[Senate Hearing 112-846]
[From the U.S. Government Publishing Office]







                                                        S. Hrg. 112-846

                           OVERSIGHT OF THE 
                   FEDERAL COMMUNICATIONS COMMISSION

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

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 16, 2012

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation



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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

            JOHN D. ROCKEFELLER IV, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii             KAY BAILEY HUTCHISON, Texas, 
JOHN F. KERRY, Massachusetts             Ranking
BARBARA BOXER, California            OLYMPIA J. SNOWE, Maine
BILL NELSON, Florida                 JIM DeMINT, South Carolina
MARIA CANTWELL, Washington           JOHN THUNE, South Dakota
FRANK R. LAUTENBERG, New Jersey      ROGER F. WICKER, Mississippi
MARK PRYOR, Arkansas                 JOHNNY ISAKSON, Georgia
CLAIRE McCASKILL, Missouri           ROY BLUNT, Missouri
AMY KLOBUCHAR, Minnesota             JOHN BOOZMAN, Arkansas
TOM UDALL, New Mexico                PATRICK J. TOOMEY, Pennsylvania
MARK WARNER, Virginia                MARCO RUBIO, Florida
MARK BEGICH, Alaska                  KELLY AYOTTE, New Hampshire
                                     DEAN HELLER, Nevada
                    Ellen L. Doneski, Staff Director
                   James Reid, Deputy Staff Director
                     John Williams, General Counsel
             Richard M. Russell, Republican Staff Director
            David Quinalty, Republican Deputy Staff Director
   Rebecca Seidel, Republican General Counsel and Chief Investigator




















                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 16, 2012.....................................     1
Statement of Senator Rockefeller.................................     1
Statement of Senator Hutchison...................................     3
Statement of Senator Kerry.......................................     3
Statement of Senator DeMint......................................     4
Statement of Senator Begich......................................    30
Statement of Senator Boozman.....................................    31
Statement of Senator Blunt.......................................    33
Statement of Senator Lautenberg..................................    34
Statement of Senator Rubio.......................................    36
Statement of Senator Toomey......................................    38
Statement of Senator Klobuchar...................................    40
Statement of Senator Thune.......................................    42
Statement of Senator Pryor.......................................    43
Statement of Senator Cantwell....................................    45
Statement of Senator Warner......................................    46
Statement of Senator Ayotte......................................    47
Statement of Senator Wicker......................................    48

                               Witnesses

Hon. Julius Genachowski, Chairman, Federal Communications 
  Commission.....................................................     4
    Prepared statement...........................................     7
Hon. Robert M. McDowell, Commissioner, Federal Communications 
  Commission.....................................................     9
    Prepared statement...........................................    10

                                Appendix

Hon. Mignon L. Clyburn, Commissioner, Federal Communications 
  Commission, prepared statement.................................    51
Hon. Jessica Rosenworcel, Commissioner, Federal Communications 
  Commission, prepared statement.................................    52
Hon. Ajit Pai, Commissioner, Federal Communications Commission, 
  prepared statement.............................................    53
Response to written questions submitted to Hon. Julius 
  Genachowski by:
    Hon. John D. Rockefeller IV..................................    54
    Hon. Daniel K. Inouye........................................    58
    Hon. John F. Kerry...........................................    63
    Hon. Bill Nelson.............................................    65
    Hon. Maria Cantwell..........................................    66
    Hon. Frank R. Lautenberg.....................................    71
    Hon. Mark Pryor..............................................    72
    Hon. Claire McCaskill........................................    74
    Hon. Amy Klobuchar...........................................    77
    Hon. Tom Udall...............................................    78
    Hon. Mark Warner.............................................    81
    Hon. Mark Begich.............................................    83
    Hon. Kay Bailey Hutchison....................................    88
    Hon. Olympia J. Snowe........................................    91
    Hon. Jim DeMint..............................................   101
    Hon. John Thune..............................................   102
    Hon. Roger F. Wicker.........................................   104
    Hon. Roy Blunt...............................................   105
    Hon. John Boozman............................................   106
    Hon. Patrick J. Toomey.......................................   107
    Hon. Marco Rubio.............................................   111
    Hon. Dean Heller.............................................   113
Response to written questions submitted to Hon. Robert M. 
  McDowell by:
    Hon. John D. Rockefeller IV..................................   116
    Hon. Daniel K. Inouye........................................   117
    Hon. John F. Kerry...........................................   118
    Hon. Maria Cantwell..........................................   121
    Hon. Frank R. Lautenberg.....................................   122
    Hon. Mark Pryor..............................................   123
    Hon. Claire McCaskill........................................   125
    Hon. Amy Klobuchar...........................................   127
    Hon. Tom Udall...............................................   128
    Hon. Mark Warner.............................................   128
    Hon. Mark Begich.............................................   130
    Hon. Olympia J. Snowe........................................   135
    Hon. John Thune..............................................   141
    Hon. Roger F. Wicker.........................................   141
    Hon. Roy Blunt...............................................   142
    Hon. John Boozman............................................   142
    Hon. Patrick J. Toomey.......................................   143
    Hon. Marco Rubio.............................................   145
    Hon. Dean Heller.............................................   147
Response to written questions submitted to Hon. Mignon L. Clyburn 
  by:
    Hon. John D. Rockefeller IV..................................   149
    Hon. Daniel K. Inouye........................................   151
    Hon. John F. Kerry...........................................   151
    Hon. Mark Pryor..............................................   155
    Hon. Claire McCaskill........................................   157
    Hon. Amy Klobuchar...........................................   159
    Hon. Mark Warner.............................................   160
    Hon. Mark Begich.............................................   162
    Hon. Olympia J. Snowe........................................   163
    Hon. John Thune..............................................   169
    Hon. John Boozman............................................   169
    Hon. Dean Heller.............................................   170
Response to written questions submitted to Hon. Jessica 
  Rosenworcel by:
    Hon. Daniel K. Inouye........................................   173
    Hon. John F. Kerry...........................................   174
    Hon. Mark Pryor..............................................   178
    Hon. Claire McCaskill........................................   179
    Hon. Amy Klobuchar...........................................   182
    Hon. Mark Warner.............................................   182
    Hon. Mark Begich.............................................   184
    Hon. Olympia J. Snowe........................................   186
    Hon. John Thune..............................................   194
    Hon. Roy Blunt...............................................   194
    Hon. John Boozman............................................   195
    Hon. Marco Rubio.............................................   195
    Hon. Dean Heller.............................................   196
Response to written questions submitted to Hon. Ajit Pai by:
    Hon. John D. Rockefeller IV..................................   200
    Hon. Daniel K. Inouye........................................   200
    Hon. John F. Kerry...........................................   201
    Hon. Mark Pryor..............................................   203
    Hon. Claire McCaskill........................................   204
    Hon. Amy Klobuchar...........................................   206
    Hon. Mark Warner.............................................   206
    Hon. Mark Begich.............................................   208
    Hon. Olympia J. Snowe........................................   209
    Hon. John Thune..............................................   216
    Hon. Roger F. Wicker.........................................   216
    Hon. Roy Blunt...............................................   216
    Hon. John Boozman............................................   217
    Hon. Marco Rubio.............................................   217
    Hon. Dean Heller.............................................   217

 
                           OVERSIGHT OF THE 
                   FEDERAL COMMUNICATIONS COMMISSION

                              ----------                              


                        WEDNESDAY, MAY 16, 2012

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:26 p.m. in room 
SR-253, Russell Senate Office Building, Hon. John D. 
Rockefeller IV, Chairman of the Committee, presiding.

       OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV, 
                U.S. SENATOR FROM WEST VIRGINIA

    The Chairman. Ladies and gentlemen, I'm going to infuriate 
my colleagues, break Senate protocol, and forget the fact that 
we are starting our votes at a much earlier time than I 
thought, unless they have more sense down on the floor, but I 
have an opening statement that I just want to give so much, 
even though the Chairman isn't here, but our two newest members 
are, and we're very proud of that. Ah, it's Julius.
    Julius, I'm breaking all the rules. I'm going to give my 
statement, and nobody else is going to be allowed to, see. So, 
there could be a real kerfuffle up here.
    Senator Begich. I support you, Mr. Chairman, 100 percent.
    The Chairman. Obviously, it's a pleasure to welcome all of 
you today. Having five members is glorious. I was at the Fourth 
Circuit yesterday, Commissioner Rosenworcel, and for the first 
time they had 15 members. They had all their members there, 
which has nothing to do with this. Anyway, Ajit and Jessica, 
you're wonderful additions to the Board.
    This hearing follows on the heels of a hearing we had a few 
weeks ago that explored the future of video and how it's 
migrating from one platform to another. Such migration is not 
limited, however, just to video. It's occurring across the 
communications landscape.
    We all need to be giving serious thought to how our 
communications laws are protecting consumers' basic rights in 
light of these changes. But, I would be remiss if I did not 
start by acknowledging that you have accomplished on the 
Commission comprehensive reform of the high-cost Universal 
Service Fund, and you have done a very good job at it. The 
committee had a hearing on this last year, on the need for 
reform. I know that it was not easy. You had to make hard 
choices, still face difficult decisions on implementation. As 
expected, your reform efforts have not pleased everyone. But it 
was imperative that the funds start targeting universal service 
support to areas of the country without service, because they 
truly need it.
    The FCC has also the responsibility of carrying out 
implementation of the spectrum auction and public safety 
provisions that Congress passed earlier this year. I plan to be 
very aggressive in monitoring implementation of that law for 
first responders, for the obvious reasons that we all care 
about it.
    Specifically, the law gives the agency a simple and 
streamlined task to adopt minimum baseline technical 
requirements for the new FirstNet authority. Those would be 
national in scope. The FCC should not complicate or encumber 
FirstNet's mission for public safety. We have a once in a 
lifetime to get this network right, and it's complicated 
already, and we have to do it for our nation's responders. I 
will make sure that this law is carried out consistent with the 
intent of the law.
    Similarly, another program I care deeply about is E-Rate. 
Senator Snowe and I were responsible, actually, for passing 
that back in the mid-nineties, and it's made an enormous change 
in the nature of our country. It provides schools and libraries 
with, as you know, affordable access to telecommunications and 
the Internet, but also the demand from schools and from 
libraries is out-streaking the supply of money available by a 
2-to-1 formula, and that worries me greatly. That's why I'm 
troubled about the proposal that indicates that you will 
consider using E-Rate funds or authority to support digital 
literacy initiatives.
    Ranking Member Hutchison, I'm being very, very bad. OK? I 
just started early.
    Senator Hutchison. Starting early.
    The Chairman. Yes. But I got permission. I got sort of 
permission from your guy. I mean, you know, I was trying to 
be----
    Senator Hutchison. Does your Chairman do that to you?
    [Laughter.]
    The Chairman. Let me be clear. I support broadband adoption 
and digital literacy efforts. It's vital that we make sure that 
broadband is both widely deployed and adopted in rural and 
urban communities on a nationwide basis. But, let me be 
unequivocally clear, I believe any digital literacy initiative 
should not compromise the E-Rate program. The Chairman and I 
have talked about that in my office several times.
    Finally, in this hearing, we may hear calls for the 
agency's statutory authority, that it be updated. Any effort to 
revise or update the law must keep consumers front and center 
and is something that we will be watching extremely closely, 
because some might use that as a way to undermine the legal 
authority of the E-Rate, or want to, and we're not going to 
allow that to happen.
    Now, that's the end of my rudeness. But, I said what I 
wanted to say. We have questions, but we're time constrained. 
We have votes starting at what, 3:50?
    Senator Hutchison. 3:45.
    The Chairman. 3:45. They may last longer.
    Senator Hutchison. Are you going to do statements? I was 
told you weren't.
    The Chairman. No. I wasn't meant to say this. I mean that's 
why I broke the law by doing this, so that's why I started 
early. But, I think that you or Senator DeMint should be able 
to say something, and then we'll go directly to Commission 
members, unless Senator Kerry hits me with a sharp elbow.

            STATEMENT OF HON. KAY BAILEY HUTCHISON, 
                    U.S. SENATOR FROM TEXAS

    Senator Hutchison. Well, let me say that I'm glad that we 
are finally having this oversight hearing. I think it is very 
important. First let me welcome the two new members, because 
they both went through our committee with very large 
majorities, and we're glad that you're onboard, and that you 
have the full contingent now.
    I want to say publicly, because I've said it before, that a 
lot has happened since our last hearing. The net neutrality 
regulations that were put forward by the FCC are those which I 
think overstepped and am in complete disagreement with, and I 
think the activities that you all are making must be confined 
to what you're authorized to do. So, I just want to put that on 
the record.
    Going forward, we did pass the bipartisan bill on 
auctioning the wireless bands, and the incentive auctions will 
be moving forward. So, at today's meeting, I'm certainly going 
to ask some questions on that, because I know others might want 
to speak. I think that this is a very important effort going 
forward, and that it be done right is very important, also. So, 
we can explore that in the questions.
    And thank you, Mr. Chairman, for going only 2 minutes 
early, rather than 10.
    The Chairman. I would ask now if Senator Kerry, followed by 
Senator DeMint, has anything to say. I mean, obviously, you 
have a lot to say, but do you wish to say it?
    Senator Kerry. You're in rare form today, Mr. Chairman.
    The Chairman. Yes, sir.
    Senator Kerry. I'll have a beer with you.

               STATEMENT OF HON. JOHN F. KERRY, 
                U.S. SENATOR FROM MASSACHUSETTS

    Senator Kerry. 'll just say very quickly, I think a lot of 
good work has been done in the Commission, and I salute both 
bipartisan and thoughtful considerations that Commissioner 
Clyburn, Commissioner McDowell, and Chairman Genachowski have 
been putting in place here. But, we obviously have a long way 
to go. We all know that.
    The one thing I just want to put on the table is a warning 
that I'm worried that some people--I don't want to see this 
important entity get caught in the partisan crosshairs of this 
Congress. Some are suggesting a weakened or inactive FCC might 
be much better, and, you know, I think that we have to be 
really careful of winding up with an unregulated communications 
behemoth group of them out there that would be invulnerable to 
competition and unresponsive to consumers if we were to move in 
that direction.
    We need to have this discussion about where we're going 
post-1992 and 1996 efforts, none of which contemplated the 
world we're living in today. So, it's entirely appropriate to 
be here and be doing this, but I think we have to be careful as 
we go forward, Mr. Chairman.
    The Chairman. OK. Thank you, Senator Kerry.
    Senator DeMint.

                 STATEMENT OF HON. JIM DeMINT, 
                U.S. SENATOR FROM SOUTH CAROLINA

    Senator DeMint. Thank you, Mr. Chairman. And I think you 
made the best point starting out, that our job is to make sure 
consumers are protected. We know the best way to do that in 
America is through lots of choices, competition, transparency, 
and fairness for consumers. I think that's what we're all 
about, and I hope that's the way we look at it.
    My concern, as I've expressed to a number of you, is that 
there seems to be a sense sometimes in this room and in this 
Congress that telecom companies--the networks, the content 
producers--are somehow a government property or a government 
service. I think you know they're not. They're private 
companies, private investment, private management. Our job is 
to make sure that competition works, that there's enough choice 
to let the market work, and when we do that, we know that 
customers are protected, because they always have more choices 
if they're not treated right.
    Sometimes I think as we look at it as more of a public 
utility, it's our job not only to regulate it, but to manage 
it, and that's the sense I get sometimes with the decisions 
that are coming out of the FCC, with a lot of, I think, 
preemptive regulation that are solving problems that aren't 
there yet. And that's what I want to have a chance to talk a 
little bit about today.
    I appreciate the service of all of you, and I think I've 
had a little bit to do with helping to usher most of you 
through this process. So, I appreciate your service, and I 
think the way you approach your job has more to do with how we 
look at it, maybe, than you, because if you feel like we want 
you to manage the industry, that's what you're going to do. Our 
hope is that we can recognize that it is very different than 20 
years ago, that we literally have dozens and dozens of 
competitors, ways to get content to consumers we never even 
imagined, and are growing every day.
    The chances of someone being taken advantage of are getting 
less and less, and that has a lot to do with some good things 
you've done and we've done, but hopefully today we can talk 
about where to go from here, how to make competition and 
choices work better, not necessarily how to run the industry. 
Thank you, Mr. Chairman.
    The Chairman. So ordered.
    With due respect to my colleagues, I call now upon the 
Chairman. What I'd thought we do is have the Chairman and 
Commissioner McDowell speak, and then we would come in with 
questions. As you can see, there are a lot of people here, and 
a lot more coming. So, we want to use our time efficiently.

    STATEMENT OF HON. JULIUS GENACHOWSKI, CHAIRMAN, FEDERAL 
                   COMMUNICATIONS COMMISSION

    Chairman Genachowski. Chairman Rockefeller, thank you. 
Ranking Member Hutchison, members of the Committee, thank you 
for the opportunity to be here today.
    Congressional oversight is a vital function. This committee 
has also taken important steps in the last year, particularly 
the spectrum law, with its landmark provisions on incentive 
auctions and public safety. Faithfully implementing the new law 
is a key priority of the FCC today.
    I'm pleased to be joined by a full complement of 
Commissioners, including my newest colleagues, Jessica 
Rosenworcel and Ajit Pai, two experienced, accomplished, and 
excellent additions.
    They join a Commission that has been productive, collegial, 
and focused on issues of real importance to our country, and 
I'm grateful to both Commissioners Clyburn and McDowell for 
ongoing collaboration and engagement that has significantly 
improved our decisions and our processes.
    At the FCC, our mission is to maximize the power of 
communications technology to further the public interest, to 
help grow our economy, create jobs, enhance U.S. 
competitiveness, empower consumers, and unleash American 
innovation.
    We've made tremendous progress in the past 3 years, and, 
indeed, private sector innovation, investment, and job creation 
are up across the broadband economy. These metrics are up by 
double-digit percentages, both when looking at broadband 
applications and services, and when looking at broadband 
providers and network infrastructure. And the U.S. has now 
regained global leadership in mobile. American-designed apps 
and services are being adopted faster than any other. U.S. 
mobile innovation is the envy of the world. And we're the first 
country rolling out the next generation 4G mobile at scale.
    Our efforts to unleash the opportunities of broadband are 
focused on closing broadband gaps. First, the spectrum gap. 
We're focused on freeing up more spectrum for both licensed and 
unlicensed use, driving efficiency in the use of spectrum 
networks and devices, removing regulatory and other barriers to 
flexible spectrum use and mobile broadband build-out, and 
moving forward on innovative approaches like small cells, and 
on spectrum sharing as a new and additional tool to free up 
government spectrum for commercial use.
    I specifically want to thank this committee for its work to 
authorize incentive auctions. I'm proud that the idea was 
proposed in our national broadband plan, and the FCC now has 
the challenge of implementing this unprecedented mechanism. 
We'll be the first country in the world to do so, continuing a 
proud tradition of U.S. leadership on mobile policy, and I look 
forward to working with my colleagues and the Committee as we 
move forward.
    We're also tackling the broadband deployment gap. As you've 
mentioned today, about 18 million rural Americans live in areas 
with no broadband infrastructure. Our comprehensive reform plan 
adopted unanimously in October to modernize the Universal 
Service Fund will spur wired and wireless broadband build-out 
to hundreds of thousands of rural Americans in the near term, 
and sets us on a path to universal broadband deployment by the 
end of the decade, while, for the first time, putting the fund 
on a fiscally responsible budget.
    To our broadband acceleration initiative, the FCC has 
removed barriers to broadband deployment and accelerated 
broadband build-out. For example, we've adopted orders to ease 
access by broadband providers to utility poles and established 
a shot clock to speed cell tower and antenna siting.
    In addition to the broadband deployment gap, we're tackling 
the broadband adoption gap. Nearly one-third of Americans, 100 
million people, haven't adopted broadband. The Connect to 
Compete initiative enlists government, nonprofit, and private 
sector leaders to tackle the barriers to broadband adoption and 
digital literacy, one of several public-private initiatives to 
promote solutions to major challenges.
    The FCC's successful E-Rate program, created thanks to the 
leadership of Senators Rockefeller and Snowe, has already 
helped connect virtually every library and classroom in America 
last year. We adopted several important modernizations of the 
program, including removing unnecessary rules that limited 
schools' ability to strike the best deals for broadband, and we 
remain committed to this important program.
    Public safety communications is a core mission of the FCC, 
and we're on schedule in implementing the FCC provisions 
relating to FirstNet, helping deliver on the promise of 
nationwide interoperable broadband communications for our first 
responders.
    We've also taken steps to improve the location accuracy of 
mobile 911, and we're working on accelerating next-generation 
911 so that, for example, Americans will be able to send texts 
or photos to 911.
    The FCC also recently led a process culminating in ISP 
serving 90 percent of U.S. subscribers to commit to significant 
steps to strengthen our country's cybersecurity.
    In the international arena, we're working to oppose 
proposals from some countries that could seriously undermine 
the long-standing multi-stakeholder government model that has 
enabled the Internet to flourish. Consumer protection and 
empowerment is a core FCC responsibility, and we have taken 
action in many areas, including Smartphone theft, bill shock, 
and cramming, on the latter. I appreciate the excellent 
committee staff report on the subject.
    I want to highlight not only what the FCC has accomplished, 
but how we conduct our work. The FCC is committed to smart 
responsible government. We've taken many steps to modernize our 
programs and ensure that they're efficient and fiscally 
responsible. Our major reforms are saving hundreds of millions 
of dollars, and in addition to our programmatic changes, we 
also regularly review the agency's rules and processes, and 
we've moved to eliminate dozens of outdated rules and 
unnecessary data collections. We've done everything I've listed 
in this statement and more with the lowest number of full-time 
employees in 10 years.
    When I had the honor of being confirmed by the Senate for 
this position in 2009, I said I would work to focus the FCC on 
promoting investment, unleashing innovation, fostering 
competition, and protecting consumers. Those remain my goals, 
and I look forward to working with this committee, and with my 
colleagues on unleashing the opportunities of communications 
technology for our economy and the American people. I look 
forward to your questions.
    [The prepared statement of Chairman Genachowski follows:]

       Prepared Statement of Hon. Julius Genachowski, Chairman, 
                   Federal Communications Commission
    Chairman Rockefeller, Ranking Member Hutchison, Members of the 
Committee, thank you for this opportunity to appear before you today.
    At the FCC, our mission is to maximize the power of communications 
technology to grow our economy; create jobs; enhance U.S. 
competitiveness; empower consumers; and unleash American innovation, 
including in areas like education, health care, and public safety.
    Consistent with this mission, over the last three years, we have 
focused the agency on broadband communications--wired and wireless. In 
2009, we developed America's first National Broadband Plan, which 
identified key challenges and opportunities throughout the broadband 
ecosystem, and proposed solutions to ensure that the U.S. leads the 
world in broadband access and innovation.
    Together with my colleagues at the FCC, we have made tremendous 
progress in the past three years, taking many steps to unleash 
investment, innovation, and job creation. These include modernizing and 
reforming major programs like the Universal Service Fund, freeing 
spectrum for both licensed and unlicensed use, removing barriers to 
broadband buildout, and taking strong and balanced steps to preserve 
Internet freedom.
    And indeed, innovation, investment, and job creation are up across 
the broadband economy. These metrics are up both when looking at 
broadband applications and services, and when looking at broadband 
providers and networks.
    Our work at the FCC is helping create jobs across the country, from 
workers building broadband infrastructure, to agents at new broadband-
enabled customer contact centers, to employees of small businesses 
using broadband to expand, to engineers and other innovators inventing 
the new digital future.
    And the U.S. has now regained global leadership in mobile 
innovation. American-designed apps and services are being adopted 
faster than any others. U.S. mobile innovation is the envy of the 
world.
    We are also ahead of the world in deploying 4G mobile broadband at 
scale--with 64 percent of the world's 4G LTE subscribers here in the 
U.S. These next-generation networks are projected to add $151 billion 
in GDP growth over the next four years, creating an estimated 770,000 
new American jobs.
    In 2011, overall investment in network infrastructure equipment was 
up 24 percent from 2010, with broadband providers investing tens of 
billions of dollars in wired and wireless networks.
    Internet start-ups attracted $7 billion in venture capital in 2011, 
almost double the 2009 level and the most investment since 2001.
    Our efforts to improve the health of our broadband economy have 
focused on closing broadband gaps.
    First, the spectrum gap. Multiple studies show that demand for 
mobile services is on pace to exceed the capacity of our mobile 
networks.
    Last week, at the wireless industry's annual conference, I 
presented the Commission's Mobile Action Plan, which builds on the 
mobile portions of the National Broadband Plan, to achieve our goal of 
unleashing mobile innovation and investment. This plan will help ensure 
that America maintains the position it has now regained as the global 
leader in mobile. It includes incentive auctions, while also 
recognizing that we must have an ``all of the above'' strategy that 
includes freeing up more spectrum for both licensed and unlicensed use; 
driving efficiency in spectrum use, including by increasing the 
efficiency of devices and networks; removing barriers to mobile 
broadband buildout; and pioneering innovative approaches like small 
cells and spectrum sharing between government and commercial users.
    On the latter, I was pleased to announce that we are moving ahead 
in partnership with NTIA to test spectrum sharing between commercial 
and government uses in the 1755-1780 MHz band, a band of particular 
interest to commercial carriers.
    Thanks to Congress, and the hard work of this Committee last year, 
we will unleash significant amounts of prime spectrum through incentive 
auctions--an unprecedented market-based solution to reallocate spectrum 
that was proposed in the National Broadband Plan. We've announced an 
implementation plan for incentive auctions that puts us on schedule to 
launch a rulemaking by the fall of this year.
    We've also made progress toward unleashing more than 25 MHz of WCS 
spectrum, and converting 40 MHz of prime spectrum in the S-Band from 
satellite to terrestrial use.
    Last year we became the first country to free up TV white spaces 
for unlicensed use. This is the most significant release of spectrum 
for unlicensed use in 25 years, and it holds the promise of new value-
creating breakthroughs on the order of magnitude of Wi-Fi.
    We are also tackling the broadband deployment gap.
    Today, millions of rural Americans live in areas with no broadband 
infrastructure. Our plan, adopted unanimously in October, to modernize 
the Universal Service Fund will spur wired and wireless broadband 
buildout to hundreds of thousands of rural Americans in the near term, 
and sets us on the path to universal broadband by the end of the 
decade--while, for the first time, putting the Fund on a budget. 
Together with my colleagues, we crafted a set of reforms that honor 
fiscal responsibility, respect business realities, and help bring 
broadband to unserved Americans around the country, in every state.
    Through our Broadband Acceleration Initiative, the FCC has removed 
barriers to broadband deployment and accelerated broadband buildout. 
For example, we've adopted orders to ease access by broadband providers 
to utility poles and established a shot clock to speed cell tower and 
antenna siting.
    In addition to the broadband deployment gap, we are making strides 
on the broadband adoption gap.
    Nearly one-third of Americans--100 million people--haven't adopted 
broadband. The Connect to Compete Initiative enlists government, 
nonprofit, and private sector leaders to tackle the barriers to 
adoption--one of several public-private initiatives driven by the 
Commission to promote solutions to major challenges.
    The FCC's successful E-Rate program, created thanks to the 
leadership of Senators Rockefeller and Snowe, has already helped 
connect virtually every library and classroom in America. In 2010 we 
adopted several important modernizations of the program, including 
recognizing the potentially important role of mobile broadband, 
removing barriers to schools opening their computer labs as hot spots 
for their communities, and giving schools more choices to strike the 
best deals for broadband in their markets..
    Public safety is a core mission of the FCC, and the agency is 
working to harness the power of communications to make our communities 
safer.
    We are working with multiple stakeholders to advance next-
generation 9-1-1. And we accelerated the launch of Wireless Emergency 
Alerts that allows local, state and Federal authorities to send 
targeted alerts to mobile devices of people who are in the vicinity of 
an emergency.
    As part of our long-standing role in ensuring the security and 
reliability of communications networks, the FCC recently led a process 
culminating in ISPs serving 90 percent of all U.S. residential 
broadband subscribers committing to take significant steps to 
strengthen the country's cybersecurity. This includes implementing an 
Anti-Bot Code of Conduct to reduce the threat of botnets, adopting DNS 
Best Practices to prevent domain name fraud, and working to implement 
an industry framework to prevent Internet route hijacking.
    Working with government, private-sector, and nonprofit partners, we 
also developed a Small Business Cyber Planner to help small businesses 
guard against cyber attacks, which are estimated to cost targeted small 
businesses an average of $200,000 in damages.
    In today's hyper-connected, flat world, the success of American 
companies, as well as global prosperity and freedom, depends on a 
dynamic and open global Internet. And so we are working to preserve the 
Internet as a free-market globally, and oppose international proposals 
that could stifle Internet innovation. Working with our colleagues in 
government and stakeholders outside government, we are seeking to head 
off barriers to the global expansion of cloud computing, and 
encouraging free flows of data worldwide.
    And we are working to oppose proposals from some countries that 
could seriously undermine the long-standing multi-stakeholder 
governance model that has enabled the Internet to flourish as an open 
platform for communication, innovation, and economic growth. If 
adopted, these proposals would be destructive to the future of the 
Internet, including the mobile Internet, and across the U.S. Government 
we have consistently and strongly opposed such proposals.
    The FCC also provides value by protecting and empowering consumers.
    Smartphone theft is on the rise, and poses a real threat to 
consumers. In DC, New York, and other major cities roughly 40 percent 
of all robberies now involve cell phones. This past month, together 
with Senator Schumer, the wireless industry, and law enforcement from 
around the country, we announced the launch of a new database that will 
allow consumers and carriers to disable stolen smartphones and tablets 
dramatically reducing their value on the black market.
    This committee has helped lead the fight to crack down on bill 
shock, a problem that has cost millions of consumers tens, hundreds, 
and sometimes thousands of dollars in unexpected charges. Working with 
wireless providers, we found a common-sense solution to bill shock--
alerts to consumers when are about to incur overage charge. A few weeks 
ago we introduced a new online tool to help consumers track 
implementation of the commitments made by wireless carriers to provide 
usage alerts.
    Last month, the Commission approved an order to put an end to 
abusive, third-party charges on phone bills, what's commonly known as 
cramming. Previously, the Commission's Enforcement Bureau issued $12 
million in fines against four companies that had engaged in widespread 
cramming, part of a record-breaking year for our Enforcement Bureau, 
which logged $67.2 million in monetary penalties and settlements on 
behalf of consumers in 2011.
    I want to highlight not only what the FCC has accomplished, but how 
we conduct our work. The FCC is committed to smart, responsible 
government, and we have taken significant steps to modernize our 
programs and ensure that they are efficient and fiscally responsible--
saving billions of dollars.
    Our work to modernize USF and Intercarrier Compensation will not 
only spur broadband buildout, it also eliminates billions of dollars in 
hidden subsidies from consumers' phone bills.
    Our work to reform the Lifeline program is expected to save up to 
$2 billion over the next three years. Even before this order was 
adopted, we made changes that eliminated 270,000 duplicate 
subscriptions, saving $35 million.
    We reformed our Video Relay Service Program, which provides vital 
communications for people who are deaf or hard-of-hearing, saving $250 
million per year without reducing availability of service.
    In addition to our programmatic changes, we have also reviewed the 
agency's rules and processes--asking tough questions to make sure the 
agency is operating efficiently and effectively.
    In connection with this review, we've already eliminated more than 
200 outdated rules and five unnecessary data collections. We have 
identified two dozen more data collections for elimination.
    We estimate that internal reforms like consolidated IT maintenance 
and new financial system have already saved the agency almost $8 
million.
    And we've done everything I've listed and more with the lowest 
number of full-time employees in 10 years.
    In conclusion, the wired and wireless broadband sectors are 
critically important to our economy and global competitiveness. I look 
forward to working with the Committee on implementing the new incentive 
auctions law, and unleashing the opportunities of communications 
technology for our economy and the American people.
    Thank you.

    The Chairman. Thank you, Mr. Chairman.
    Commissioner McDowell.

  STATEMENT OF HON. ROBERT M. McDOWELL, COMMISSIONER, FEDERAL 
                   COMMUNICATIONS COMMISSION

    Commissioner McDowell. Thank you, Mr. Chairman, and Ranking 
Member Hutchison. This is my first opportunity to welcome our 
new colleagues. I want to thank the Senate for confirming them. 
And when the Senate did confirm them, I put out a statement 
saying how highly qualified they were and how they were able to 
hit the ground running. Little did I know that they would be 
hitting the ground running before the U.S. Senate 48 hours 
after being sworn in, but they can handle it, I'm sure. So, we 
have plenty of work to do together in the coming months and 
years.
    I believe that America's future is bright when it comes to 
putting the power of new communications technologies into the 
hands of consumers. Specifically, I firmly believe that we are 
in the early days of the Golden Age of mobile broadband. Due to 
America's light touch regulatory approach to the wireless 
sector, we have always led the world in that arena. We can 
encourage this impressive trajectory and further strengthen 
America's global leadership in wireless if we, first, implement 
the new spectrum law with simplicity, humility, and regulatory 
restraint; second, work harder to ensure that Federal, State, 
and local governments relinquish more spectrum for auction; and 
third, commence a comprehensive effort to adopt policies that 
make it easier to deploy technologies that enhance spectral 
efficiency.
    When it comes to implementing the new spectrum law, we 
should learn from past efforts to over-engineer auctions that 
resulted in unintended consequences and counterproductive 
consequences as well. New auction rules should be appropriately 
minimal, by adopting deregulatory flexible use policies that 
will make any rules future proof for innovations we can't even 
imagine today. Rules should also offer fair opportunities for 
small, medium, and large players to bid for and secure licenses 
without excluding any player from the auctions, as Congress 
intended with the law.
    The FCC's inbox is full with many other matters as well. We 
must conclude our proceeding on universal service contribution 
reform as soon as possible. This silent and automatic tax 
increase is eating into consumers' wallets. It has been as high 
as 18 percent, and it must be abated as soon as possible.
    Furthermore, we are overdue for modernizing our media 
ownership rules. Based upon the record before us and recent 
court decisions, at a minimum the 1975 vintage newspaper 
broadcast cross-ownership ban seems as out of date in today's 
highly competitive and dynamic digital marketplace as the wide 
lapels, long sideburns, and disco music of its birth year.
    And last, not only must we stay unified and energized in 
our efforts to prevent the International Telecommunication 
Union from swallowing the highly successful non-governmental, 
private sector, multi-stakeholder model for Internet 
governance, but we must quickly find allies throughout the 
world, especially in the developing world for this effort.
    So, thank you for having us here today, and I look forward 
to your questions.
    [The prepared statement of Commissioner McDowell follows:]

     Prepared Statement of Hon. Robert M. McDowell, Commissioner, 
                   Federal Communications Commission
    Thank you, Chairman Rockefeller, Ranking Member Hutchison, and 
Members of the Committee for inviting me to join you today. I have 
served as an FCC commissioner for nearly six years, and every day has 
been a privilege. Nearly four and a half years have passed since the 
full Commission has had the opportunity to appear before your 
Committee, and I am pleased to be back before you. As always, I look 
forward to answering any questions you may have.
    Today's hearing marks the first time the five of us have appeared 
together as the new fully-intact FCC. Accordingly, it is a great 
pleasure to officially welcome our new colleagues, Commissioners 
Rosenworcel and Pai.
    We have plenty of work to do together in the coming months and 
years. I believe that America's future is bright when it comes to 
putting the power of new communications technologies into the hands of 
consumers. For instance, we are in the early days of the Golden Age of 
mobile broadband. America has always led the world when it comes to 
wireless innovation and if we choose the correct policies we will 
further strengthen America's global leadership.
    For example, the United States has approximately 21 percent of the 
world's 3G/4G subscribers and approximately 69 percent of the world's 
entire LTE subscribers even though the population in the United States 
is less than five percent of the global population.\1\ American 
wireless providers are also investing more in their infrastructure than 
their international counterparts. In 2011, over $25 billion was 
invested in United States' wireless infrastructure\2\ versus $18.6 
billion invested in 15 European countries combined.\3\
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    \1\ See Informa Telecoms and Media (WCIS Database) (Dec. 2011).
    \2\ See CTIA--The Wireless Assoc., CTIA Semi-Annual Wireless 
Industry Survey (2012), http://www.ctia.org/advocacy/research/
index.cfm/AID/10316; see also CTIA--The Wireless Assoc., Semi-Annual 
2011 Top-Line Survey Results 10 (2012) (last visited May 14, 2012), 
http://files.ctia.org/pdf/CTIA_Survey_Year_End_2011_Graphics.pdf 
(providing cumulative capital investment numbers) (last visited May 14, 
2012).
    \3\ See Boa/Merrill Lynch European Telecoms Matrix Q112 (Mar. 30, 
2012) (Global Telecoms Matrix Q112) (estimating =14,368 YE 2011. 
Conversion at $1.2948/=). The European countries included in the 
Matrix: Austria, Belgium, Denmark, Finland, France, Germany, Greece, 
Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and 
UK; there are 27 members of the European Union (EU).
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    Furthermore, the American mobile market enjoys more competition 
than most international markets. According to the most recent FCC 
statistics, nine out of ten American consumers have a choice of at 
least five wireless service providers.\4\ In Europe, that number is 
around three.\5\ As a result, American consumers enjoy lower prices and 
higher mobile usage rates as compared to consumers in the European 
Union (EU)--4 cents per minute versus 17 cents generally in the EU.\6\ 
Wireless subscriber usage on average in the United States is often 
three to seven times as much compared to some countries.\7\ At the same 
time, American consumers pay at least one-third less than consumers in 
many other parts of the world.\8\ America's light touch regulatory 
policy for mobile technologies has enabled our wireless sector to 
flourish and lead the world. Policy makers should keep this important 
history in mind when contemplating the wireless industry's regulatory 
future.
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    \4\ Implementation of Section 6002(b) of the Omnibus Budget 
Reconciliation Act of 1993, Annual Report and Analysis of Competitive 
Market Conditions with Respect to Mobile Wireless, including Commercial 
Mobile Services, WT Docket No. 10-133, Fifteenth Report, 26 FCC Rcd 
9664, 9669 (2011).
    \5\ See Global Telecoms Matrix Q112.
    \6\ Roger Entner, The Wireless Industry: The Essential Engine of 
U.S. Economic Growth, Recon Analytics, at 1 (May 2012), http://
reconanalytics.com/wp-content/uploads/2012/04/Wireless-The-Ubiquitous-
Engine-by-Recon-Analytics-1.pdf) (last visited May 14, 2012).
    \7\ See Global Telecoms Matrix Q112 at 71.
    \8\ See id.
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    Combining the power of the Internet with the freedom that comes 
from wireless mobility has created new economic and political 
opportunities that were unimaginable just six years ago when I was 
first appointed to the FCC. Competition, private sector leadership and 
regulatory liberalization have wrought a wonderful explosion of 
entrepreneurial brilliance, economic growth and political change that 
is improving the human condition across the globe.
    Against this backdrop, I will discuss three broad initiatives that, 
if pursued effectively, will encourage, rather than discourage this 
impressive trajectory in mobile broadband deployment and use: (1) 
implementing the new spectrum law enacted with an eye toward 
simplicity, humility, and regulatory restraint; (2) identifying and 
engaging in an aggressive and coordinated effort to free up spectrum 
held by the Federal Government; and (3) fostering greater spectral 
efficiency.
    Next, I will: review the FCC's efforts to expand broadband 
availability to unserved Americans through our recent reform of 
Universal Service Fund (USF) distributions; show how the new digital 
economy has rendered many media ownership regulations obsolete; discuss 
how reforming the Commission's procedures would ensure greater 
efficiencies; and elaborate on my concerns over new global efforts to 
have the International Telecommunication Union (ITU) regulate the 
Internet.
The FCC Should Implement the New Spectrum Law with Simplicity, 
        Humility and Restraint
    As noted earlier, Americans are increasingly integrating the use of 
sophisticated mobile devices into their daily lives. While the 
popularity and power of mobility has ushered in vast consumer benefits, 
this new reliance on wireless services has increasingly strained our 
spectrum capacity. As you know, Congress passed legislation in February 
that originated in your Committee, which, among other things, included 
a voluntary incentive auction for our Nation's television 
broadcasters.\9\ This initiative will put new spectrum into the hands 
of our Nation's consumers. Congratulations on that bipartisan and 
historic achievement.
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    \9\ Middle Class Tax Relief and Job Creation Act of 2012, Pub. L. 
No. 112-96, Sec. Sec. 6402-6404, 126 Stat. 156, 224-230 (2012).
---------------------------------------------------------------------------
    As a result of your work, the Commission has commenced the 
implementation of that law which will result in the most complicated 
spectrum auction, or auctions, in world history. Vital to a successful 
effort, we should undertake our work with an eye toward simplicity and 
restraint. In the past, regulatory efforts to over-engineer spectrum 
auctions have caused harmful, unintended consequences. I hope that we 
will learn from our own history so we can avoid missteps by 
implementing the law with regulatory humility. In doing so, new auction 
rules will be appropriately minimal and ``future proof'' and allow for 
uses that we cannot imagine today as technology and consumer choices 
evolve. For instance, new rules should include band plans that offer 
opportunities for small, medium and large companies to bid for and 
secure licenses without having to exclude any player from the auctions.
The Federal Government Should Relinquish More Spectrum for Auction
    In addition to making television broadcast spectrum available for 
new and innovative service offerings, we must work together to identify 
opportunities to move Federal Government users into new spectrum bands. 
As our colleagues at the National Telecommunications and Information 
Administration (NTIA) have recently reported, various Federal 
Government operations are employing spectrum located within the 1755 -
1850 MHz range that could be made available for commercial uses.\10\
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    \10\ U.S. Dept. of Commerce, An Assessment of the Viability of 
Accommodating Wireless Broadband in the 1755-1850 MHz Band (Mar. 2012) 
(``NTIA Report'').
---------------------------------------------------------------------------
    NTIA made a valuable contribution to this effort, especially in 
setting forth the issues at hand. Although I commend the team at NTIA 
for their thorough and thoughtful work, I look forward to further 
analysis on the cost and timing estimates in particular.\11\ Greater 
clarity in the cost assumptions underlying the report would go a long 
way to create greater certainty in the marketplace as we attempt to 
satisfy longer-term commercial spectrum needs.
---------------------------------------------------------------------------
    \11\ The NTIA Report states that moving some commercial users could 
cost $18 billion and take 10 years. Id. at iii.
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The Government Should Adopt Policies That Will Allow For Accelerated 
        Improvements In Spectral Efficiency
    While we identify and analyze the complex issues that will arise as 
we implement the new spectrum legislation, I will continue to call for 
an increased focus on technologies and strategies to improve spectral 
efficiency. Greater emphasis and education in this area will improve 
the ability of mobile service providers, engineers, application and 
content developers as well as consumers to take better advantage of the 
immediate fixes already available in the marketplace. Spectral 
efficiency solutions include more robust deployment of enhanced antenna 
systems; improved development, testing and roll-out of creative 
technologies where appropriate, such as cognitive radios; and enhanced 
consideration of, and more targeted consumer education on, the use of 
femtocells. Each of these technological options augments capacity and 
coverage, which is especially important for data and multimedia 
transmissions. The Commission's recent workshop on receiver standards 
is a step in the right direction.
    I am pleased that we are beginning to discuss spectrum sharing in a 
meaningful way. Although the term ``sharing'' has yet to be defined in 
the context of current deliberations, I have consistently encouraged 
FCC efforts to promote a form of sharing--for instance, I have strongly 
supported our work to promote unlicensed use of the ``TV white spaces'' 
within the 700 MHz Band,\12\ the 400 MHz Band,\13\ and the 5 GHz 
Band.\14\ Although highly technical in nature, these sharing protocols, 
once brought to fruition, will appear seamless to consumers while they 
enjoy higher speeds and expanded coverage when making mobile 
connections. Moreover, the services offered in these bands have the 
potential to add many billions of dollars to the U.S. economy and to 
become essential components of the mobile broadband marketplace. For 
instance, unlicensed use of white spaces could serve as an ``off ramp'' 
for wireless traffic experiencing congestion on licensed routes just as 
Wi-Fi is increasingly being used to circumnavigate clogged channels.
---------------------------------------------------------------------------
    \12\ See, e.g., Unlicensed Operation in the TV Broadcast Bands, ET 
Docket No. 04-186, Additional Spectrum for Unlicensed Devices Below 900 
MHz and in the 3 GHz Band, ET Docket No. 02-380, Second Memorandum 
Opinion and Order, 25 FCC Rcd 18661 (2010) (using unused and under-used 
spectrum held by licensed and unlicensed commercial incumbents for the 
purpose of developing new low power wireless services).
    \13\ Amendment of Parts 2 and 95 of the Commission's Rules to 
Provide Additional Spectrum for the Medical Device Radiocommunication 
Service in the 413-417 MHz Band, ET Docket No. 09-36, Report and Order, 
26 FCC Rcd 16605 (2011) (sharing spectrum with Federal Government users 
for the purpose of developing and employing implantable medical devices 
that have a wide range of operations, including restoring movement to 
paralyzed limbs).
    \14\ See, e.g., Revision of Parts 2 and 15 of the Commission's 
Rules to Permit Unlicensed National Information Infrastructure (U-NII) 
devices in the 5 GHz Band, Memorandum Opinion and Order, ET Docket No. 
03-122, 21 FCC Rcd 7672 (2006) (sharing spectrum with Federal 
Government users for the purpose of developing and employing Unlicensed 
National Information Infrastructure (U-NII), which provides short-
range, high-speed wireless connections).
---------------------------------------------------------------------------
    Equally important, as policy makers, we should emphasize techniques 
and strategies to improve spectral efficiency. In practical terms, even 
if we could easily identify 500 megahertz of quality spectrum to 
reallocate today, we should expect the better part of a decade to 
transpire before consumers could enjoy the benefits. As history 
illustrates, it takes time to write proposed auction rules and band 
plans, analyze public comment, adopt rules, hold auctions, collect the 
proceeds, clear the bands, and watch carriers build out and turn on 
their networks. In the meantime, as powerful new applications consume 
more wireless bandwidth making it easier for innovators to create and 
deploy new technologies, enhancing more efficient use of the airwaves 
has to be a top priority for all of us.
We Must Continue Our Work on Universal Service Reform
    Before last fall, the challenge of solving the seemingly 
intractable USF and intercarrier compensation puzzle had cast a shadow 
over the FCC for more than a decade. During my time as a commissioner, 
I have tried to learn about the practical realities of the program by 
holding productive policy discussions with multiple stakeholders not 
only in America's least populated and remote regions but also in urban 
and suburban areas where customers pay rates above costs to subsidize 
rural consumers. After years of fact gathering and analysis, with a 
unanimous vote, the Commission finally modernized the high cost portion 
of the USF. As a result, we bent the spending curve on a Federal 
entitlement by imposing a strict budget on the former high cost fund 
for the first time in the fund's history.
    Historically, the high cost fund only supported traditional 
telecommunications services and did not directly support the deployment 
of broadband. Also, the program has grown tremendously over the years 
without promoting efficiency. For example, the high cost fund 
subsidized multiple providers in the same area while other parts of our 
Nation still remained unserved. Furthermore, the old structure allowed 
providers to receive subsidies to serve areas that were already served 
by unsubsidized competitors. In part, due to these and other 
inefficiencies, the high cost fund grew from $1.69 billion in 1998 to 
over $4 billion by the end of last year.\15\
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    \15\ Similarly, the aggregate amount spent on all USF programs grew 
from $3.66 billion in 1998 to over $8 billion through 2011. Sources: 
Federal Communications Commission and Universal Service Administrative 
Company.
---------------------------------------------------------------------------
    The FCC's reform efforts last fall addressed these issues, among 
many others, and transformed the high cost fund into one that will 
support next-generation communications technologies, while also keeping 
a lid on spending.\16\ Chairman Genachowski and Commissioners Copps 
(since retired) and Clyburn should be commended for this historic 
accomplishment.
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    \16\ The Commission not only has broad authority to repurpose 
support to advanced services but a duty to do so as well as handed to 
us by the plain language of section 254. In section 254(b), Congress 
specified that ``[t]he Joint Board and the Commission shall base 
policies for the preservation and advancement of universal service on 
[certain] principles.'' 47 U.S.C. Sec. 254(b)(emphasis added). Two of 
those principles are particularly instructive: First, under section 
254(b)(2), Congress sets forth the principle that ``[a]ccess to 
advanced telecommunications and information services should be provided 
in all regions of the Nation.'' 47 U.S.C. Sec. 254(b)(2). Second, with 
section 254(b)(3), Congress established the principle that 
``[c]onsumers in all regions of the Nation, including low-income 
consumers and those in rural, insular, and high cost areas, should have 
access to telecommunications and information services . . .'' 47 U.S.C. 
Sec. 254(b)(3) (emphasis added).
    Also, section 254(b)(7) instructs the Commission and Joint Board to 
adopt ``other principles'' that we ``determine are necessary and 
appropriate for the protection of the public interest, convenience, and 
necessity and are consistent with'' the Communications Act. In that 
regard, in 2010 the Federal-State Board on Universal Service 
recommended to the Commission that we use our authority under section 
254(b)(7) to adopt a principle to ``specifically find that universal 
service support should be directed where possible to networks that 
provide advanced services.''
    Some contend that the definition of universal service under section 
254(c)(1) muddies the water because it does not include ``information 
service.'' Instead, that provision states that ``[u]niversal service is 
an evolving level of telecommunications services . . . taking into 
account advances in telecommunications and information technologies and 
services.'' But, it is also relevant that the term ``telecommunications 
service'' is qualified by the adjective ``evolving.'' Even if section 
254 were viewed as ambiguous, pursuant to the well established 
principle of Chevron deference, the courts would likely uphold the 
FCC's interpretation as a reasonable and permissible one. See Chevron 
U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984).
    As part of this USF order approved last fall, the Commission agreed 
with the Joint Board recommendation and adopted ``support for advanced 
services'' as an additional principle. Moreover, even if any of the 
statutory language in section 254 appears to be ambiguous, the 
Commission's reasonable interpretation would receive deference from the 
courts under Chevron.
---------------------------------------------------------------------------
    In addition to reforming the high cost program, the Commission also 
reformed the USF low income program (Lifeline/Linkup) in January by 
restraining its spending and adopting some necessary measures to 
eliminate waste, fraud and abuse in that program.\17\
---------------------------------------------------------------------------
    \17\ Funding for the Lifeline/Linkup program has steadily increased 
over the years. In, 1998, the total support for the program was $464 
million, and in 2010, the total support was over $1.3 billion. See 
Universal Service Monitoring Report, CC Docket No. 98-202, Table 2.2 
(2011), available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/
DOC-311775A1.pdf.
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    These two reform efforts were just first steps, however, because 
the Commission only addressed the distribution, or spending, side of 
the USF equation. Equally important is the need to fix the contribution 
methodology, or the ``taxing'' side of the ledger. In other words, how 
we are going to pay for all of this?
    To put this issue in perspective, the USF contribution factor, a 
type of tax paid by telephone consumers, has risen each year from 
approximately 5.5 percent in 1998 to almost 18 percent in the first 
quarter of this year.\18\ This trend is unacceptable because it is 
unsustainable. Furthermore, the cryptic language on consumers' phone 
bills, combined with the skyrocketing ``tax'' rate, has produced a new 
form of ``bill shock.'' We must tame this wild automatic tax increase 
as soon as possible.
---------------------------------------------------------------------------
    \18\ See Proposed First Quarter 2012 Universal Service Contribution 
Factor, CC Docket No. 96-45, Public Notice, 26 FCC Rcd 16814 (OMD 
2011).
---------------------------------------------------------------------------
    In a perfect world, the Commission would have conducted 
comprehensive reform by addressing both the spending and taxing sides 
at the same time. Instead, our effort was broken into pieces. 
Nevertheless, I was pleased that the Chairman recently launched a 
further notice of proposed rulemaking on contribution reform which was 
approved by the Commission at our last open meeting.
    I look forward to working with my colleagues and all stakeholders 
to craft a pragmatic and fair solution to lower the tax rate while 
broadening the base in a manner that is within the authority granted to 
us by Congress. It is my hope that we will do so no later than this 
fall.
    Finally, given the breadth and magnitude of the various USF reforms 
we have accomplished so far, many of the effects--both positive and 
negative--may not be apparent in the near term. That said, USF reform 
is an iterative process and we will constantly monitor its 
implementation, listen to concerns, and quickly make adjustments, if 
necessary.
Our Media Ownership Proceeding Gives U.S. an Opportunity to Modernize 
        Outdated Rules
    In the upcoming months, the Commission is likely to vote on the 
quadrennial media ownership review. In December, I concurred to the 
majority of the December2011 notice of proposed rulemaking, because the 
Commission appears to be prepared to accept a regulatory status quo. I 
remain hopeful that the Commission will modernize its rules to reflect 
the economic realities of the marketplace. Maintaining decades-old 
industrial policy in this age of competition, mobility and new media is 
not in the public interest. Moreover, we have a statutory obligation to 
eliminate unnecessary mandates and bring all of our media ownership 
rules into line with today's competitive environment.\19\
---------------------------------------------------------------------------
    \19\ Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 
56, 111-12 Sec. 202(h) (1996); Consolidated Appropriations Act, 2004, 
Pub. L. No. 108-199, Sec. 629, 118 Stat. 3, 99-100 (2004) (amending 
Section 202(h) of the 1996 Act). Section 202(h) states:

    The Commission shall review its rules adopted pursuant to this 
section and all of its ownership rules quadrennially . . . and shall 
determine whether any of such rules are necessary in the public 
interest as the result of competition. The Commission shall repeal or 
modify any regulation it determines to be no longer in the public 
interest.

    Telecommunications Act of 1996 Sec. 202(h).
---------------------------------------------------------------------------
    The factual record from the FCC's 2006-2007 review, coupled with 
the weight of the evidence that has poured in thus far during our 
current review, would likely support a conclusion that the 1975 vintage 
newspaper-broadcast cross-ownership ban should be largely eliminated. 
Although the Commission has offered up a relaxation of the ban on 
newspaper-television ownership for the largest markets and considers 
eliminating restrictions on newspaper-radio combinations, these 
proposals are anemic and do not reflect marketplace realities. 
Particularly, in the past decade, broadcast stations and daily 
newspapers have grappled with falling audience and circulation numbers, 
diminishing advertising revenues, and resulting staff reductions, as 
online sources gain in popularity. Although some sectors of the news 
industry have experienced a slight resurgence,\20\ newspapers continue 
to face decline with both advertising and circulation revenues 
continuing on a downward path.\21\
---------------------------------------------------------------------------
    \20\ In 2011, network and local news viewership increased for the 
first time years; however, local TV station advertising revenues still 
experienced a decline. See Pew Research Ctr's Project for Excellence in 
Journalism, The State of the News Media 2012, Key Findings, http://
stateofthemedia.org/2012/overview-4/key-findings/ (last visited Mat 14, 
2012) (``The State of the News Media 2012'') (stating that news 
viewership increased for local stations and networks for the first time 
in five and ten years, respectively); The State of the News Media 2012, 
Local TV, http://stateofthemedia.org/2012/overview-4/key-findings/ 
(explaining that some of this loss is due to a reduction of political 
and automotive advertising from 2010 and that these revenues will 
rebound during a busy election cycle).
    \21\ The State of the News Media 2012, Overview, http://
stateofthemedia.org/2012/overview-4/; The State of the News Media 2012, 
Key Findings, http://stateofthemedia.org/2012/overview-4/key-findings/.
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    Since 2007, a number of the Nation's most prominent daily 
newspapers have gone into bankruptcy and many papers have moved to 
online-only formats. Furthermore, over the past five years, an average 
of 15 daily papers, or about 1 percent of the industry, have shuttered 
their doors each year.\22\ This is probably a response, in part, to the 
challenging economic climate, but also may be a consequence of the 
emergence of competition from new media platforms such as the Web and 
the FCC's failure to modernize our rules adequately.
---------------------------------------------------------------------------
    \22\ The State of the News Media 2012, Major Trends, http://
stateofthemedia.org/2012/overview-4/major-trends/.
---------------------------------------------------------------------------
    Regardless of any rule changes, however, traditional media owners 
are choosing to invest in new, unregulated digital outlets rather than 
acquire more heavily-regulated traditional media assets. Although 
newspaper circulation numbers continue to decline, the number of unique 
visitors to newspaper websites has been increasing.\23\ In fact, the 
White House's Council of Economic Advisors has found that newspapers 
are one of America's fastest-shrinking industries\24\ losing 
approximately 28.4 percent of its workforce between 2007 and 2011. 
Online publishing job growth, on the other hand, increased by more that 
20 percent in the same time period.\25\ Currently, 172 newspapers have 
launched online subscription plans or placed content behind a 
paywall.\26\ This represents a 15 percent increase since January alone 
and more papers are expected to follow suit in the coming months.\27\ 
In the last year, we have also witnessed a trend of traditional news 
media partnering with online distributors. For instance, Reuters is 
producing original news shows for YouTube; Facebook has entered into 
partnerships with The Washington Post, The Wall Street Journal and The 
Guardian; and Yahoo! paired with ABC News to be its sole provider of 
news video.\28\
---------------------------------------------------------------------------
    \23\ Newspaper Web Audience, Newspaper Assoc. of Am. (Apr. 25, 
2012), http://www.naa.org/Trends-and-Numbers/Newspaper-Websites/
Newspaper-Web-Audience.aspx.
    \24\ Economic Report of the President Together with The Annual 
Report of the Council of Economic Advisors 188 (February 2012) (citing 
a LinkedIn study), available at http://www.whitehouse.gov/sites/
default/files/docs/erp_2012_complete.pdf.
    \25\ Derek Thompson, Newspapers are America's Fastest-Shrinking 
Industry, The Atlantic (Mar. 11, 2012, http://www.theatlantic.com/
business/archive/2012/03/newspapers-are-americas-fastest-shrinking-
industry/254307/); Matt Rosoff, Newspapers Are The Fastest Shrinking 
Industry In The U.S., Business Insider (Mar. 8, 2012), http://
articles.businessinsider.com/2012-03-08/tech/31135175_1_linkedin-job-
growth-newspapers#ixzz1us0z9Urf; Andrew Edgecliffe-Johnson, Bleak 
Outlook for U.S. Papers, Financial Times (Mar. 16, 2012), http://
www.ft.com/intl/cms/s/0/3eef0bc4-6f73-11e1-9c57-
00144feab49a.html#axzz1uryNf9hc.
    \26\ Papers with Digital Subscriber Plans/Paywalls, NEWS & TECH 
(May 10, 2012), http://www.newsandtech.com/stats/article_22ac1efa-2466-
11e1-9c29-0019bb2963f4.html (last visited May 14, 2012).
    \27\ Compare id., with The State of the News Media 2012, 
Newspapers, http://stateofthemedia.org/2012/newspapers-building-
digital-revenues-proves-painfully-slow/ (stating that roughly 150 
newspapers have instituted a ``metered model'').
    \28\ The State of the News Media 2012, Overview,  http://
stateofthemedia.org/2012/overview-4/.
---------------------------------------------------------------------------
    In today's robust and dynamic online and mobile marketplace, 
government should not limit the options of broadcasters and the 
newspaper community to attract investment, increase efficiencies, and 
share the costs of news production. Even in today's competitive online 
environment, the medium of newspaper has an important role to play. 
Although business models are evolving, government policies should not 
distort market trends.
    Ironically, based on the evidence in the record thus far, the 
newspaper-broadcast cross-ownership rule is likely undermining its own 
ostensible goal of promoting a diversity of voices in the media 
marketplace. The rule may indeed be exacerbating the diminution of 
journalism. Further, the record thus far demonstrates that in-market 
combinations do not negatively affect viewpoint diversity \29\ and 
actually increase the quantity and quality of local news and 
information provided by commonly-owned outlets to benefit the American 
consumer.\30\ For these reasons, and many others, with the weight of 
the evidence before us it appears that the newspaper-broadcast cross-
ownership rule could be counter-productive, not in the public interest 
and should be largely eliminated.
---------------------------------------------------------------------------
    \29\ See, e.g., Newspaper Association of America, Comments, MB 
Docket No. 09-182, at 18-20 (Mar. 5, 2012) (``NAA Comments''); Adam D. 
Renhoff and Kenneth C. Wilbur, Local Media Ownership and Viewpoint 
Diversity in Local Television News, at 3, 15 (June 12, 2011), available 
at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-308596A1.pdf 
(``[T]hese findings show that under the proposed definition of 
viewpoint diversity, variation in television station co-ownership and 
cross-ownership is generally found to [have] negligible effects on 
viewpoint diversity. However, it is important to note that the data are 
limited to the degree of media co-ownership and cross-ownership 
currently allowed under FCC rules.'').
    \30\ See, e.g., 2010 Quadrennial Regulatory Review--Review of the 
Commission's Broadcast Ownership Rules and Other Rules Adopted Pursuant 
to Section 202 of the Telecommunications Act of 1996, MB Docket No. 09-
182, Notice of Proposed Rulemaking, 26 FCC Rcd 17489, 17519  85, n.185 
(2011); NAA Comments at 15-18; Diversity and Competition Supporters, 
Initial Comments, MB Docket No. 09-182, at 40-43 (Mar. 5, 2012); Adam 
D. Renhoff and Kenneth C. Wilbur, Local Media Ownership and Media 
Quality, at 3, 15 (June 12, 2011), available at http://
hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-308504A1.pdf; Jack Erb, 
Local Information Programming and the Structure of Television Markets, 
at 4, 27-28, 40-41 (May 20, 2011), available at http://
hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-308508A1.pdf.
---------------------------------------------------------------------------
Opportunities Abound for Further FCC Reform
    Congress has recently shown interest in identifying opportunities 
for the streamlining and improving Commission procedures and to ensure 
that unnecessary, outdated or harmful rules are repealed.\31\ I agree. 
Although some FCC reforms require Congressional action, others may be 
achieved internally. For instance, the Chairman has enacted some of my 
suggestions, including ensuring that notices of proposed rulemaking 
contain actual proposed rules. I applaud his efforts in this area. In 
2009, I outlined additional suggestions regarding reform of the FCC to 
Acting-Chairman Michael Copps and subsequently to Chairman Genachowski. 
For your convenience, I have attached copies of these letters. (See 
Exhibit A).
---------------------------------------------------------------------------
    \31\ Fifty years ago, there were only 463 pages in the FCC's 
portion of the Code of Federal Regulations (``CFR''). During this 
period, Americans only had a choice of three TV networks and one phone 
company. Today, over-the-air TV, cable TV, satellite TV and radio, and 
the millions of content suppliers on the Internet, offer consumers with 
an abundance of choices. In other words, the American communications 
economy was far less competitive in 1961 than it is today, yet it 
operated under fewer rules.
    In contrast, by late 1995, the FCC's portion of the CFR had grown 
to 2,933 pages--up from 463 pages 34 years earlier. As of the most 
recent printing of the CFR last October, it contained a mind-numbing 
3,746 pages of rules. Even after Congress codified deregulatory 
mandates with the landmark Telecommunications Act of 1996, the FCC 
still managed to add hundreds more pages of rules. In fact, the FCC has 
added 86 pages of rules since 2008.
    To put it another way, the FCC's rules, measured in pages, have 
grown by almost 710 percent over the course of 50 years, all while the 
communications marketplace has enjoyed more competition. During this 
same period of regulatory growth, America's GDP grew by a substantially 
smaller number: 360 percent. In short, this is one metric illustrating 
government growth outpacing economic growth.
    To be fair, some of those rules were written due to various 
congressional mandates. And sometimes the FCC does remove regulations 
on its own accord, or forbear from applying various mandates in 
response to forbearance petitions. But all in all, the FCC's regulatory 
reach has grown despite congressional attempts to reverse that trend.
---------------------------------------------------------------------------
We Should Remain Unified in Our Opposition to UN/ITU Regulation of the 
        Internet
    Finally, all of us should be concerned with a well-organized 
international effort to secure intergovernmental control of Internet 
governance. Since being privatized in the early 1990s, the Internet has 
historically flourished within a deregulatory regime not only within 
our country but internationally as well. In fact, the long-standing 
international consensus has been to keep governments from regulating 
core functions of the Internet's ecosystem.
    Unfortunately, some nations, such as China, Russia, India, Iran and 
Saudi Arabia, have been pushing to reverse this consensus by giving the 
International Telecommunication Union (ITU) regulatory jurisdiction 
over Internet governance. The ITU is a treaty-based organization under 
the auspices of the United Nations.\32\ As Russian Prime Minister 
Vladimir Putin said last June, the goal of this effort is to establish 
``international control over the Internet using the monitoring and 
supervisory capabilities of the [ITU].''\33\
---------------------------------------------------------------------------
    \32\ History, ITU, http://www.itu.int/en/about/Pages/history.aspx 
(last visited May 14, 2012).
    \33\ Vladimir Putin, Prime Minister of the Russian Federation, 
Working Day, Gov't of the Russian Fed'n, http://premier.gov.ru/eng/
events/news/15601/ (June 15, 2011) (last visited May 14, 2012).
---------------------------------------------------------------------------
    In 1988, delegates from 114 countries gathered in Australia to 
agree to a treaty that set the stage for dramatic liberalization of 
international telecommunications.\34\ As a result, the Internet was 
insulated from government control and quickly became the greatest 
deregulatory success story of all time.
---------------------------------------------------------------------------
    \34\ See International Telecommunication Union, Final Acts of the 
World Administrative Telegraphy and Telephone Conference, Melbourne, 
1988: International Telecommunication Regulations (Geneva 1989), 
available at http://www.itu.int/osg/csd/wtpf/wtpf2009/documents/
ITU_ITRs_88.pdf (last visited May 14, 2012).
---------------------------------------------------------------------------
    Today, however, several countries within the 193 member states of 
the ITU \35\ want to renegotiate the 1988 treaty to expand its reach 
into previously unregulated areas. A few specifics are as follows:
---------------------------------------------------------------------------
    \35\ Overview, ITU, http://www.itu.int/en/about/Pages/overview.aspx 
(last visited May 14, 2012).

   Subject cyber security and data privacy to international 
---------------------------------------------------------------------------
        control;

   Allow foreign phone companies to charge fees for 
        ``international'' Internet traffic, perhaps even on a ``per-
        click'' basis for certain Web destinations, with the goal of 
        generating revenue for state-owned phone companies and 
        government treasuries;

   Impose unprecedented economic regulations such as mandates 
        for rates, terms and conditions for currently unregulated 
        traffic-swapping agreements known as ``peering;''

   Establish for the first time ITU dominion over important 
        functions of multi-stakeholder Internet governance entities 
        such as the Internet Corporation for Assigned Names and 
        Numbers, the nonprofit entity that coordinates the .com and 
        .org Web addresses of the world;

   Subsume under intergovernmental control many functions of 
        the Internet Engineering Task Force, the Internet Society and 
        other multi-stakeholder groups that establish the engineering 
        and technical standards that allow the Internet to work; and

   Regulate international mobile roaming rates and practices.

    These efforts could ultimately partition the Internet between 
countries that on the one hand opt out of today's highly successful, 
non-governmental, multi-stakeholder model to live under an 
intergovernmental regulatory regime, and on the other hand, those 
member states that decide to keep the current system. Such a legal 
structure would be devastating to global free trade, rising living 
standards and the spread of political freedom. It would also create an 
engineering morass.
    These latest attempts to regulate Internet governance have rallied 
opposition on a bipartisan basis. Chairman Genachowski has also been 
working to raise awareness on this important issue as have key members 
of the Obama Administration.
    For your convenience, I have attached a copy of a recent Wall 
Street Journal op-ed that I wrote which provides more detail on the 
issue. (See Exhibit B).
Conclusion
    In sum, it has been an honor to serve as a commissioner at the FCC. 
During my service, my focus has been to support policies that promote 
consumer choice offered through abundance and competition rather than 
regulation and its unintended consequences, whenever possible. In the 
absence of market failure, unnecessary regulation in the name of 
serving the public interest can have the perverse effect of harming 
consumers by inhibiting the constructive risk-taking that produces 
investment, innovation, competition, lower prices and jobs. I will 
continue to examine the FCC's public policy challenges through this 
lens, and I look forward to continue working with all of you to ensure 
that America maintains its foothold as the leader in the communications 
marketplace.
    Thank you again for the opportunity to appear before you today. I 
look forward to your questions.
                               Exhibit A
    Robert M. McDowell, The UN Threat to Internet Freedom, Wall St. J., 
Feb. 21, 2012, at A19, available at  http://online.wsj.com/article/
SB100014240529702047924
04577229074023195322.html.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



                               Exhibit B
    Letter from FCC Commissioner Robert M. McDowell to FCC Acting 
Chairman Michael Copps (January 27, 2009).

    Letter from FCC Commissioner Robert M. McDowell to FCC Chairman 
Julius Genachowski (July 20, 2009).
                                 ______
                                 
                          Federal Communications Commission
                                   Washington, DC, January 27, 2009
Hon. Michael J. Copps,
Acting Chairman,
Federal Communications Commission,
Washington, DC.

Dear Mike:

    Once again, congratulations on being named Acting Chairman. 
Additionally, thank you for your dedication and commitment to public 
service and the Commission. It goes without saying that I am looking 
forward to continuing to work with you.
    I am greatly encouraged and energized to know that you, 
Commissioner Adelstein and I will be working together toward the goals 
of boosting employee morale, promoting greater transparency, as well as 
creating a more informed, collaborative and considerate decision-making 
process, all aimed toward advancing the timely and orderly resolution 
of Commission business. Thank you for addressing these and many other 
issues within minutes of becoming Acting Chairman. I certainly 
appreciate the new atmosphere you are creating at the Commission, and I 
know that the FCC's talented and dedicated career employees appreciate 
your efforts as well. Accordingly, with the utmost respect for you, the 
Commission staff and the new Obama Administration, I offer below 
several preliminary suggestions on achieving the important public 
interest objectives of reforming this agency. My letter is intended to 
continue a thoughtful dialogue on moving forward together to improve 
the public's ability to participate in our work, as well as our overall 
decision-making abilities. Our collaborative efforts to rebuild the 
agency should not be limited to the thoughts outlined in this brief 
letter. As you and I have discussed many of these ideas already, let 
this merely serve as a starting point for a more public discussion that 
should examine a larger constellation of ideas.
    I would first recommend that we commence a thorough operational, 
financial and ethics audit of the Commission and its related entities, 
such as the Universal Service Administrative Company and the Federal 
Advisory Committees. As with all FCC reform endeavors, I hope that all 
of the commissioners will be involved in this process, including its 
development and initiation. We should seek comment from the public and 
the Commission staff, and we should provide Commission employees with 
an opportunity to submit comments anonymously.
    I would also suggest that we work to update and republish the 
Commission's strategic plan. Completing this task would create a solid 
framework for future actions and demonstrate our commitment to 
transparency and orderliness, each of which is critical to effective 
decision making.
    The findings of our review, combined with our work to develop a new 
strategic plan, would provide us with the information and ideas 
necessary for considering a potential restructuring of the agency. I am 
not suggesting that we make change for the sake of change. After all, 
we agree that the agency needs to be flexible and must be responsive to 
its myriad stakeholders, most importantly American consumers. There 
are, however, steps we likely would want to implement to increase our 
efficiency. For example, as you have already stated, delegating some 
authority back to upper and mid-level management, filling many of the 
numerous open positions with highly-qualified applicants and making 
more efficient use of non-attorney professionals come to mind.
    As we have also discussed previously, we need to improve our 
external communications regarding FCC processes and actions. As an 
immediate first step, I suggest that we swiftly establish and publish 
Open Meeting dates for the entire 2009 calendar year. The public, not 
to mention the staff, would also greatly benefit if we would provide at 
least six months' notice on meeting dates for 2010 and beyond.
    Also, we agree that we need to overhaul our internal information 
flow, collaboration and processes. I am eager to continue to work with 
you and Commissioner Adelstein to identify and implement measures to 
increase coordination among the commissioner offices, between 
commissioner offices and the staff, as well as among the staff. It is 
important that we cooperate with each other to foster open and 
thoughtful consideration of potential actions well before jumping into 
the drafting process.
    As part of these communications improvements, I share your desire 
to update the Commission's IT and web systems. They are in dire need of 
an overhaul. Clear, concise and well-organized information systems will 
ensure that all public information is available, easily located and 
understandable.
    Finally, I propose that the commissioners work together to build an 
ongoing and meaningful rapport with other facets of government, 
especially in the consumer protection, homeland security, and 
technology areas. I am confident that close collaboration with our 
government colleagues with similar or overlapping responsibilities 
would greatly benefit the constituencies we serve.
    In closing, Mike, I again extend my warmest congratulations on your 
designation as Acting Chairman. I look forward to working together with 
you and Commissioner Adelstein to improve our agency during the coming 
days and weeks.
            Sincerely,
                                        Robert M. McDowell,
                                                      Commissioner.
cc: The Honorable Jonathan S. Adelstein
                                 ______
                                 
                          Federal Communications Commission
                                      Washington, DC, July 20, 2009
Hon. Julius Genachowski,
Chairman,
Federal Communications Commission,
Washington, DC.

Dear Julius:

    Once again, congratulations on your nomination and confirmation as 
Chairman. I am greatly encouraged and energized to know that you, 
Commissioner Copps and I will be working together on a plethora of 
communications policy challenges facing the economy and American 
consumers. Although you have only been here for three weeks, I applaud 
the steps you have already taken to reform the agency. Your recent 
statements regarding boosting employee morale, promoting greater 
transparency, and creating a more informed, collaborative and 
considerate decision-making process are heartening. Anything we could 
do to advance the timely and orderly resolution of Commission business 
would be constructive. I am confident that you will agree that the 
preliminary steps Mike took during his interim chairmanship have 
provided a sound footing upon which to build.
    Accordingly, in the collaborative and transparent spirit of my 
January 29, 2009, letter to Mike, I offer below a number of suggestions 
on achieving the important public interest objectives of reforming this 
agency. As you and I have already discussed, these thoughts are 
intended as a starting point for a more public discussion that should 
examine a larger constellation of ideas for moving forward together to 
improve the public's ability to participate in our work, as well as our 
overall decision-making abilities. Many of these ideas have been 
discussed by many people for a long period of time, and if we don't 
care who gets the credit we can accomplish a great deal.
Operational, financial and ethics audit.
    I would first recommend that we commence a thorough operational, 
financial and ethics audit of the Commission and its related entities, 
such as the Universal Service Administrative Company, the National 
Exchange Carrier Association and the Federal advisory committees. Just 
as you recently articulated in your June 30 request for information on 
the Commission's safety preparedness, I would envision this audit as an 
examination akin to a due diligence review of a company as part of a 
proposed merger or acquisition, or after a change in top management. I 
would not envision the process taking a lot of time; yet, upon 
completion, we would be better positioned to identify and assess the 
current condition of the FCC and its related entities, as well as how 
they operate.
    This undertaking would be a meaningful first step on the road to 
improving the agency. As with all FCC reform endeavors, I hope that all 
of the commissioners would be involved in this process, including its 
development and initiation. We should seek comment from the public and 
the Commission staff, and we should provide Commission employees with 
additional opportunities to submit comments anonymously. I also propose 
that we hold a series of ``town hall'' meetings at the FCC's Washington 
headquarters, at a few field offices, as well as in a few locations 
around the country to allow our fellow citizens to attend and voice 
their opinions directly to us.
    As part of a financial review, it is crucially important that we 
examine the Commission's contracting process, as well as the processes 
relating to the collection and distribution of administrative and 
regulatory fees currently conducted exclusively by the Office of 
Managing Director. For instance, we should consider whether the full 
Commission should receive notice prior to the finalization of 
significant contracts or other large transactions.
    In the same vein, it is time to examine the Commission's assessment 
of fees. Regulatory fees are the primary means by which the Commission 
funds its operations. You may be aware that the FCC actually makes 
money for the tax payers. As Mike has also noted, our methodology for 
collecting these fees may be imperfect. At first blush, it appears that 
we may have over-collected by more than $10 million for each of the 
last two years. Some have raised questions regarding how the fee burden 
is allocated. Our recent further notice of proposed rulemaking could 
lead to a methodology that lowers regulatory fees and levies them in a 
more nondiscriminatory and competitively neutral manner.
    We should also work with Congress to examine Section 8 of the Act 
and the Commission's duty to collect administrative fees. I am hopeful 
that we will examine why we continue to levy a tax of sorts of 
allegedly $25 million or so per year on industry, after the Commission 
has fully funded its operations through regulatory fees. As you may 
know, that money goes straight to the Treasury and is not used to fund 
the agency. Every year, we increase those fees to stay current with the 
Consumer Price Index. At the same time, our regulatees pass along those 
costs to consumers and they are the ones who ultimately pay higher 
prices for telecommunications services.
    Further, given the significant concerns raised about the numbers 
and the way the audits have been conducted, I recommend that we examine 
the financial management of the universal service fund. You may know 
that the Commission's Inspector General reported last year that the 
estimated erroneous payment rate for the High Cost program between July 
2006 and June 2007 was 23.3 percent, with total estimated erroneous 
payments of $971.2 million. While I am pleased that the OIG identified 
this error, it is time that we get to the bottom of this matter and 
remedy it.
    In the same spirit, an ethics audit should ensure that all of our 
protocols, rules and conduct are up to the highest standards of 
government best practices. Faith in the ethics of government officials 
has, in some cases, eroded over the years and we should make sure that 
we are doing all that we can to maintain the public's trust.
Update and republish the FCC strategic plan.
    Also in connection with this review, I hope that we can work 
together to update and republish the Commission's strategic plan. Like 
me, you may find that, as we toil on day-to-day tasks, it can be easy 
to lose sight of our strategic direction. Completing this task would 
create a solid framework for future actions and demonstrate our 
commitment to transparency and orderliness, each of which is critical 
to effective decision making.
Potential restructuring of the agency.
    The findings of our review, combined with our work to develop a new 
strategic plan, would provide us with the information and ideas 
necessary for considering a potential restructuring of the agency. As 
you know, the Commission has been reorganized over the years--for 
instance, the creation of the Enforcement Bureau under Chairman Kennard 
and the Public Safety and Homeland Security Bureau under Chairman 
Martin. Close coordination among the staff in pursuit of functional 
commonality historically has improved the Commission's effectiveness. 
Nonetheless, the time is coming again to reconsider this option.
    I am not suggesting that we make change for the sake of change. 
After all, we would agree that the agency needs to be flexible and must 
be responsive to its myriad stakeholders, most importantly American 
consumers. There are, however, additional improvements we can make to 
increase our efficiency. As Mike emphasized, the Commission's most 
precious resource, really our only resource, are its people. Many of 
our most valued team members are nearing retirement age. We need to do 
more to recruit and retain highly-qualified professionals to fill their 
large shoes. I hope our next budget will give us adequate resources to 
address this growing challenge.
    Next, I would encourage consideration of filling many of the 
numerous open positions with highly-qualified applicants and making 
more efficient use of non-attorney professionals. For example, there is 
no reason why we cannot use engineers to help investigate complaints 
and petitions that involve technical and engineering questions. This 
would be especially useful as we continue to consider matters 
pertaining to network management. Similarly, our economists could be 
better used to help assess the economic effects of our proposed 
actions.
Improve external communication.
    As you and I have also discussed, we need to improve our external 
communications regarding FCC processes and actions. I greatly 
appreciate Mike's promptness in posting the Open Meeting dates covering 
his tenure. I am hopeful that we will swiftly establish and publish 
Open Meeting dates for the entire 2009 calendar year. The public, not 
to mention the staff, would also greatly benefit if we would provide at 
least six months' notice on meeting dates for 2010 and beyond.
    As part of these communications improvements, I look forward 
providing input as to updating the Commission's IT and web systems. I 
applaud your commitment to this endeavor and Mike's success in seeming 
additional funding toward this end. Clear, concise and well-organized 
information systems will ensure that all public information is 
available, easily located and understandable. I also recommend that we 
update the General Counsel's part of the website to include litigation 
calendars, as well as access to pleadings filed by all the parties. 
Additionally, I suspect that our customers would prefer that licenses 
of all stripes be housed in one database, rather than separate 
databases spread across the stovepipes of our several bureaus. We 
should seek comment on this, and other similar administrative reform 
matters.
    In addition, I propose that we create, publish on the website and 
update regularly an easy-to-read matrix setting forth a listing of all 
pending proceedings and the status of each. This matrix would include 
those matters being addressed on delegated authority. The taxpayers 
should know what they are paying for.
    Similarly, I suggest that we establish and release a schedule for 
the production of all statistical reports and analyses regularly 
conducted by the Commission, and publish annual updates of that 
schedule. This would include, for example: the Wireless Competition 
Report, which has traditionally been released each September; the Video 
Competition Report, which until recently, was released at the end of 
each year; and the High-Speed Services Report, which, at one point, was 
released biannually. Similarly, quite some time before your arrival, I 
went on record calling for giving the American public the opportunity 
to view and comment on at least a draft or outline of the National 
Broadband Plan. I look forward to working with you to increase public 
awareness regarding the status and substance of our work on this plan. 
The goal here would be not only to ensure that the public is fully 
aware of what we are working on and when, but also to give these 
valuable analyses to their owners--the American people--with 
regularity.
    In the same vein, Congress, the American public and consumers, 
among other stakeholders--not to mention your fellow commissioners--
would greatly appreciate it if notices of proposed rulemakings actually 
contained proposed rules.
Improve internal communication.
    Also, we need to overhaul our internal information flow, 
collaboration and processes. I am eager to work with you, Mike, and our 
future colleagues, to identify and implement additional measures to 
increase coordination among the commissioner offices, between 
commissioner offices and the staff, as well as among the staff. It is 
important that we cooperate with each other to foster open and 
thoughtful consideration of potential actions well before jumping into 
the drafting process. The bottom line is simple: No commissioner should 
learn of official actions through the trade press.
    An effective FCC would be one where, for instance, Commissioner 
offices would receive options memoranda and briefing materials long 
before votes need to be cast. For example, for all rulemakings, within 
30 days of a comment period closing, perhaps all commissioners could 
receive identical comment summaries. Also, within a fixed timeframe 
after receiving comment summaries, say 60 to 90 days, all commissioners 
could receive options memos complete with policy, legal, technical and 
economic analyses. In preparation for legislative hearings, it would be 
helpful if all commissioners received briefing materials, including 
witness lists, at least five business days prior to the hearing date. 
For FCC en banc hearings or meetings, we should aim to distribute 
briefing materials to all commissioners at least one week prior to the 
event date. The details here are less important than the upshot: all 
commissioners should have unfettered access to the agency's experts, 
and receive the benefit of their work. Again, I am grateful to Mike for 
his preliminary efforts in this regard.
    Also along these lines, I hope that your team will reestablish the 
practice of regular meetings among the senior legal advisors for the 
purpose of discussing ``big picture'' policy matters, administrative 
issues, as well as to plan events and meetings that involve all of the 
offices. Given the numerous tasks we have before us, I trust you will 
agree that regular meetings among this group will improve our 
efficiencies, and go a long way toward lessening, if not eliminating, 
unpleasant surprises.
    Just as important would be to hold regular meetings among the 
substantive advisors and relevant staff, including the Office of 
General Counsel. Having ample opportunity to review and discuss pending 
proceedings and the various options at the early stages of, and 
throughout the drafting process would allow us to capitalize on our in-
house expertise early and often. Taking such precautions might also 
bolster the Commission's track record on appeal. Indeed, this type of 
close collaboration might lead to more logical, clear and concise 
policy outcomes that better serve the public interest.
    Another idea is to update and rewrite our guide to the Commission's 
internal procedures, currently entitled Commissioner's Guide to the 
Agenda Process. For instance, just as Mike has done with respect to the 
distribution of our daily press clips, I propose that we undertake a 
thorough review of the physical circulation process, including 
identifying and making changes to reduce the amount of paper 
unnecessarily distributed throughout the agency. Current procedures 
require that each office receive about eight copies of every document 
on circulation when one or two would suffice. I also wonder why our 
procedures mandate delivery of 30 paper copies of released Commission 
documents to our press office. The overwhelming majority of reporters 
who cover our agency pull the materials they need from our website. 
Perhaps this is another area where we could save money and help the 
environment all at the same time.
Coordinate with other facets of government.
    Finally, on a more ``macro'' level, I propose that the 
commissioners work together to build an ongoing and meaningful rapport 
with other facets of government, especially in the consumer protection, 
homeland security, and technology areas. I am confident that close 
collaboration with our government colleagues with similar or 
overlapping responsibilities would greatly benefit the constituencies 
we serve.
    In closing, I again extend my warmest congratulations on your new 
position as Chairman. You are to be commended for the steps you have 
taken thus far toward rebuilding this agency. I look forward to working 
together with you, Mike and our new colleagues upon their confirmation 
to do even more.
            Sincerely,
                                        Robert M. McDowell,
                                                      Commissioner.
    cc: The Honorable Michael J. Copps

    The Chairman. Thank you very much, Commissioner.
    I'll start with the questions, to be followed by Senator 
Hutchison, then Senator Kerry, and then Senator DeMint, and 
Senator Begich, hopefully, will come back.
    I appreciate the FCC's commitment to expanding the reach of 
broadband across the country, and I've said that. I also share 
your passion for making sure that broadband is both widely 
deployed and adopted in rural and urban communities on a 
nationwide basis. In fact, several months ago I requested the 
GAO, that they study the efforts supporting sustainable 
broadband adoption through the BTOP program. It's my hope that 
this study will allow us to identify the essential elements of 
a successful program to better focus resources on only those 
endeavors that have proved to be effective.
    So, while I appreciate the FCC's recent efforts on 
promoting digital literacy, such efforts should not under any 
circumstances proceed at the expense of the future of the E-
Rate program. Already, annual demand for E-Rate funds, as I 
indicated in my opening statement, is outmatching money 
available by a 2-to-1 factor.
    Now, during your confirmation hearings for the three of 
you, I asked each of you if you could commit to me that you 
will support and protect the E-Rate program. I'd just love to 
remind you that I asked for a yes or no answer, and I got all 
yeses. So we're going for a repeat performance, because the 
world changes. And so, please give me a yes or no answer. Do 
you promise not to take funds from E-Rate, funnel funds through 
E-Rate, or use E-Rate legal authority for your digital literacy 
initiatives? Mr. Chairman?
    Chairman Genachowski. Yes, I think. The answer is yes. 
We're committed to strengthening, supporting, growing the E-
Rate program. Digital literacy is important. We won't do 
anything in digital literacy that would in any way undermine 
the E-Rate program.
    The Chairman. So, that would allow you to answer yes.
    Chairman Genachowski. I believe so. Yes.
    The Chairman. Yes. So, you say yes. Please.
    Chairman Genachowski. Yes.
    The Chairman. Thank you, sir.
    Commissioner McDowell?
    Commissioner McDowell. Yes.
    The Chairman. Commissioner Clyburn?
    Commissioner Clyburn. Yes, in principle.
    The Chairman. Yes, in principle?
    Commissioner Clyburn. Yes.
    The Chairman. That's good.
    [Laughter.]
    The Chairman. Commissioner Rosenworcel?
    Commissioner Rosenworcel. Yes.
    The Chairman. And Commissioner Pai?
    Commissioner Pai. Yes.
    The Chairman. Excellent. And not much time either on that.
    This is for the Chairman, and it has to do with the 
mobility fund. In the context of FCC's universal service 
reform, you and I have spoken about the important role that 
wireless services play, particularly in rural areas. We've 
discussed the FCC's mobility fund, which you have indicated 
will help support the deployment of wireless services in areas 
that are underserved today.
    Prior to our FCC actions to reform the Universal Service 
Fund, our offices, together, discussed the importance of making 
sure that the FCC's efforts help bring wireless service to 
rural areas that do not have it now. But, it's my understanding 
that the largest holders of spectrum in my state of West 
Virginia may not participate in this fund.
    My question, therefore, is: can the mobility fund help 
poorly served states like West Virginia, even if local carriers 
choose not to take part, number one. And number two, if not, 
what other steps can be taken to bring wireless services to 
these rural areas?
    Chairman Genachowski. Well, we hope and expect that there 
will be broad participation in the upcoming reverse auction for 
the mobility fund. It's worth noting that in our USF reform 
order, for the first time, we identified mobility as an 
independent universal service goal. So, we're committed both to 
universal service to everyone in their homes, but also 
recognizing that people want and need mobile service when 
they're on the road to and from work, et cetera. That is the 
purpose of the mobility fund.
    We'll take the first step with these reverse auctions. As I 
said, we hope and expect broad participation. We're very 
committed on the goal of getting mobile broadband to the parts 
of the country that don't have it, where the economics don't 
support it, but where it's important to ensure that consumers 
have mobile access.
    The Chairman. I thank you, sir. And I now call upon the 
Ranking Member, the distinguished Senator from Texas.
    Senator Hutchison. Thank you, Mr. Chairman. First, I want 
to ask a parochial question, and it's about the State of Texas 
wireless broadband network for emergency responders. As you 
know, you've granted the State of Texas a waiver to deploy the 
emergency responder network in the 700-megahertz wireless band. 
It is further along in its efforts to comply with the 
parameters of the grant than any of the other jurisdictions in 
the country, I'm told, and they are prepared to start using the 
network as early as this month, just in time for the start of 
hurricane season.
    And my question is, because Texas has moved to try to meet 
this very important season that afflicts us regularly, is it 
possible that they will get that waiver to be able to go 
forward so that they can actually use it this year?
    Chairman Genachowski. I hope so. As you know, prior to 
Congress' enactment of FirstNet and the public safety 
proceedings, there were a small number of waivers granted. We 
understand that the NTIA, which has lead responsibility for 
FirstNet, is preparing comments to us on it. We look forward to 
getting input from the NTIA, from the Committee. We want to 
achieve the goal of the statute of having one interoperable 
public safety network for first responders. We also have to 
take into account the kinds of issues that you mention.
    Senator Hutchison. And could I just ask if it would be a 
priority, in your opinion, to try to work with all of those 
issues, and assuming that they have met all of the 
requirements, that you would be able to move expeditiously?
    Chairman Genachowski. Yes. Unfortunately, there's a small 
number, and a very small number at the stage that you described 
for Texas.
    Senator Hutchison. All right. Thank you.
    Let me ask you about spectrum, as you are getting ready to 
go forward with the auctions. I think it has been proven that 
the licenses that have the fewest strings attached or the ones 
that are burdened with the least number of restrictions will 
auction for the most revenue, which is, of course, what we all 
want. My question is: is that a priority of yours? I want to 
ask the Chairman and the senior Republican Commissioner about 
trying to keep the future spectrum auctions as free from 
burdensome restrictions as possible, in order to gain the most 
revenue.
    Mr. Chairman?
    Chairman Genachowski. I agree that simplicity is better 
than complexity, in terms of running auctions, getting spectrum 
out there. The goal of the spectrum auctions is to maximize the 
overall economic opportunity from spectrum. It's what the 
Communications Act directs us to take into account. We're going 
to start proceedings in the near future, and we'll be hearing 
from a lot of stakeholders, and we look forward to working with 
the Committee on the process of ensuring that we have spectrum 
auctions that maintain U.S. leadership in mobile.
    Senator Hutchison. Maybe I missed it. Do you think that 
freedom from restriction is a high priority for that goal?
    Chairman Genachowski. Yes, I think so. I think spectrums 
are complex, and the Commission has a lot of history in 
designing auctions. It also receives some direction from 
Congress in the statute that will faithfully implement, 
maximizing the opportunities of spectrum and determining in 
consultation with all stakeholders, the best, simplest model to 
drive the most economic growth and opportunity. That will be 
the focus that I hope we'll all have in addressing the complex 
issues in auction design.
    Senator Hutchison. OK. Either Mr. McDowell or the others, 
is there anyone who wants to weigh in on this as well?
    Commissioner McDowell. I think you're absolutely right, 
Senator. It's very important that we keep the encumbrances to 
just a bare minimal amount. Just having learned from 
experience, if we go back very briefly to 2007, when I voted on 
the July 2007 order for the 700-megahertz auction, there were 
encumbrances on the D block and the C block. I voted for the D 
block encumbrances, but I did not vote for the C block 
encumbrances.
    But, in both cases, it did not turn out as expected. For 
instance, the intended winner for the C block didn't make a 
winning bid, and nobody bid on the D block, or had a bid that 
met the minimum bid. And there are all sorts of other 
collateral problems with it.
    So, with the best of intentions, we can sometimes make 
these Rube Goldberg designs, but by the time the auction takes 
place, and certainly by the time these networks are built out, 
the market has passed by, but taking the government back in 
time. That's why it's important to adopt what we call flexible 
use policies. And I thank the Chairman for having talked a lot 
about that recently.
    Senator Hutchison. Thank you. I know there are so many who 
wanted to ask questions. I'm going to stop there, but if we 
don't get a second round, I do have some questions for the 
record. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Hutchison.
    Senator Kerry.
    Senator Kerry. Thank you, Mr. Chairman. You've recounted 
some of the progress made and some of the advances in 
technologies, and obviously, the technology itself we see 
competition in the apps, and in a lot of the things that people 
have a choice on. But, there really are only two dominant 
wireless service providers, and 96 percent of Americans have a 
choice of two wired broadband, either your cable or your 
telephone.
    So, my question to you is: how would you say the law has, 
in fact, either encouraged or discouraged competition, in the 
best sense of the word, in terms of numbers of providers, and 
so forth?
    Chairman Genachowski. Well, first, I hear from a broad 
array of speakers today that competition is a core feature of 
our free-market system, and the best mechanism to generate 
innovation, job creation, consumer benefits. Competition has 
always been an issue in the communications space. Since 1996, 
we have more competition than we did before, and that's good. 
We hear from many stakeholders in the space, smaller companies 
that are trying to compete, that they have real concerns about 
obstacles to competition. The more that we can in a smart, 
sensible, pragmatic way promote healthy robust competition, the 
better off our economy will be, the better off consumers will 
be, and the less of the need there will be to adopt other kinds 
of regulations that the Commission will need to consider if 
competition is insufficient.
    Senator Kerry. Anybody can chime in on this. Is it the 
Commission's fundamental view that two and two is adequate, 
that that's what we're willing to settle? Or should the law be 
geared toward trying to somehow figure out whether there should 
be a greater number of competitors within those spaces?
    Chairman Genachowski. I'll answer you briefly, and let 
someone else speak. A duopoly is not the ideal outcome at all.
    Commissioner McDowell. Senator, excellent issue to raise. 
According to the FCC, 90 percent of American consumers have a 
choice of five wireless providers. And also, I want to commend 
the Chairman for his work, and this goes back to Chairman 
Michael Powell, in 2002, 10 years ago, work on unlicensed use 
of the TV white spaces. I think there are a lot of 
opportunities to create new delivery platforms, which can 
inject more competition in that last mile, and wireless is a 
terrific hope in that regard. So, I'm actually very optimistic 
about more competition in the broadband space, and that 
certainly is a cornerstone of what I try to do at the 
Commission.
    Senator Kerry. I see, Commissioner. Let me just throw an 
additional question out as we do that.
    For Google, Facebook, Microsoft, Amazon, a bunch of folks, 
they have been able to innovate very significantly, obviously, 
but net neutrality has been critical, they would argue, and a 
lot of us would argue, to their ability to be able to do so.
    I think it was what, three? Yes. Three of the four 
witnesses at our recent hearing, when we had the video hearing, 
a week or so ago, 2 weeks ago, made the same argument. But, how 
would you say investors, startups on the Internet, how have 
they responded to this capacity with respect to the neutrality? 
How essential has it been, in your judgment, with respect to 
IPOs and creation of new entities?
    Commissioner Genachowski. I think it has been essential. As 
I think you agree, the issue isn't the Google, and Facebook, 
and Amazon of today, but the versions of those companies 3, 5, 
7, 9 years ago, when no one ever heard of them, and they were 
wonderful new entrepreneurial opportunities that existed 
because of an open Internet. The framework that we adopted last 
year, which was supported both by early stage investors, 
technology companies, the cable industry, most ISP providers 
provided certainty and predictability across the board to 
investors in early stage technology companies as well as 
investors in infrastructure, and, in fact, we've seen since 
then an increase in investment and innovation across the 
broadband economy.
    Our apps economy continues to boom, and we've seen double-
digit increases and investment in broadband infrastructure, and 
much more stability in this space than before we adopted our 
framework.
    Senator Kerry. And as we think about bringing this law up 
to date, were we to get to that at some point, should we codify 
the rule? Should we put it in?
    Commissioner Genachowski. I would encourage it.
    Senator Kerry. Is there any dissent on that?
    Commissioner McDowell. Yes.
    Senator Kerry. Yes. Mr. McDowell.
    Commissioner McDowell. I wrote a very long dissent in our 
2010 order. And I think actually codifying it will complicate 
efforts internationally, as we are now combating the ITU from 
trying to regulate Internet governance. This issue, as I travel 
the globe, has actually come up many, many times, others say, 
well, it's the law of the United States to do this, why can't 
we do this internationally. So, I would be very wary about 
Congress trying to codify this. Right now, it's before the 
courts, and the courts will determine whether or not the FCC 
actually had the authority to do what it did. And, of course, I 
think the FCC did not have the authority to do what it did.
    Commissioner Clyburn. Part of the reason I believe, 
Senator, that we're seeing a lot of innovation in this space 
and more encouragement toward that is because these high-level 
rules of the road, which incidentally fit on one page, provides 
certainty. It provides transparency. It provides a means for 
those who want to innovate in this space that they know that 
their service provider will not be able to favor their 
businesses at the detriment of innovation.
    So, with all of these players, oh, again, wanting and 
encouraging us to move forward with, again, these high-level 
rules of the road, I encourage us to recognize what has been 
happening over the past several years, in terms of the 
engagement, and what will continue to happen with the certainty 
and protections in place.
    Senator Kerry. I'll just say in closing, Mr. Chairman, that 
with respect to Europe, what the United States does is going to 
have a profound impact on what they do. We want them to be 
open. So, I think there's a powerful argument for why, in fact, 
we might consider the codification.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Kerry.
    I encourage all members, so that everybody can be called 
upon in a relatively short period of time, to keep their 
questions and answers to 5 minutes.
    Senator DeMint.
    Senator DeMint. Thank you, Mr. Chairman. I have to smile 
when I hear us, including you, talk about encouraging 
innovation and investment in the industry. This is one industry 
we don't need to encourage. It's just happening so much faster 
than we can even understand.
    The greatest obstacle, if you talk to people who are in the 
industry, whether they are content providers or networks, is 
just arbitrary and unpredictable rulemaking. They don't know 
what's going to happen.
    I'd be curious, Mr. Chairman, and I do appreciate you 
coming by my office, and I enjoy meeting with you, and as I 
said before, I appreciate your service, but how many complaints 
about violations of the Open Internet Order has the FCC 
received in the last 6 months, since the regulations were 
published?
    Chairman Genachowski. I'm not sure if we received any 
formal complaints.
    Senator DeMint. OK. How many did you receive before that?
    Chairman Genachowski. In terms of formal complaints, I 
believe the Commission received at least one. I'm not sure how 
many formal complaints.
    Senator DeMint. One that was handled on a particular basis. 
This is what I mean by preemptive rulemaking. A private 
network, built with private capital, and we're deciding how 
they're going to manage it.
    If there was only one network, we'd have to sit down and 
talk about it, but as Commissioner McDowell has talked about, 
whether it's wireless or landline, dozens and dozens of choices 
exist. It's remarkable to me that we're talking about--given 
our limited ability to manage anything--that we think we can 
manage the Internet and pick winners and losers.
    The market has worked well, and I think despite what has 
been said here today, I hear from the players and the 
stakeholders in the market that this threat of the Government 
coming in and deciding how much they're going to charge, based 
on bandwidth, not only affects the networks, but eventually the 
content providers will be told how to favor one versus another.
    So, this is a big concern for me, and Commissioner 
McDowell, we hear monopoly talked about a lot, duopoly talked 
about a lot in the wireless business, but how many American 
consumers purchase wireless services from a provider other than 
AT&T and Verizon.
    Commissioner McDowell. I believe, Senator, from the FCC's 
own statistics, it's, you know, well over 100 million. Perhaps, 
over half the marketplace is picking a provider other than 
those top two.
    Senator DeMint. I think we've got a pretty remarkable and 
dynamic competitive marketplace, and I think there is a good 
and growing case for a lighter and lighter hand of regulation, 
not to go in where there have been no complaints and no 
problems, and I think violate the private property rights of 
the people who build out a network and begin to tell them how 
they charge for their product. And as you know, users use 
different bandwidth. There are very big differences, and for us 
to try to regulate it makes very little sense right now.
    A lot of our decision making, as we talked about, Mr. 
Chairman, when you came by the office, is based on the 
assumption there's not enough competition. One of the 
responsibilities of the FCC is to develop and present 
competition studies. You and I talked about the need to get 
those out on time, so that we could have good information as 
decisionmakers here. Do we have a competitive market or don't 
we?
    I think all the evidence is that we do, and the FCC is long 
overdue in giving us the information we need to make good 
decisions and for you to make good decisions. Because most of 
the regulations, and what I consider arbitrary and 
unpredictable rulemaking, is coming from the assumption that 
there's not enough competition, not enough choices, and it's 
the job of government to come in and protect the consumers. I 
think it's a false assumption. We need to get those reports 
from you.
    So, again, thank you all for your service. And Mr. 
Chairman, I'll yield back.
    The Chairman. Thank you, Senator DeMint.
    Senator Begich.

                STATEMENT OF HON. MARK BEGICH, 
                    U.S. SENATOR FROM ALASKA

    Senator Begich. Thank you very much, Mr. Chairman. Thank 
you all very much for being here, and as you always know, I 
always like to invite you, especially the new members, as now 
members, to come up to Alaska to give you a sense of rural, and 
where even though 90 percent of the country has wireless and 
competition, we're not in that equation totally yet. But, thank 
you for the work you've done.
    Mr. Chairman, you know I'd be parochial for a moment, but 
that's who I represent, is Alaska. So, let me give you an 
example.
    We're dealing with an issue now with Adak. Let me give you 
a comparison. Adak is like if you were in East Texas and 
Anchorage is in Los Angeles, to give you a distance. And some 
of you know this already. 1,200 mile distance. And one of the 
rules, or at least the efforts of the national broadband plan 
was the no flash cuts. Well, here's what Adak's dealing with. 
It's a small community of 130 folks. They went from a December 
2011 resource of USF funds, to January 2012, 84 percent 
reduction, just like that. This company will be out of business 
by the end of this year.
    In the process, as you remember, many of you heard my 
complaints and concerns about the waiver process. Now, this 
group represents 130 customers. This is waiver one that they 
have to fill out and this is waiver two. It's very expensive 
and very hard to do. And somehow, you know, I recognize the one 
size can't fit all, and you have been very good, the 
Commission, in working and trying to figure out especially 
Alaska and Hawaii, because of the uniqueness, and I appreciate 
that. But, this is the worry that we just, I'm giving you my 
flashpoint.
    We need some ability, because at the end of the year, they 
will not be able to pay their RUS loans, and they will be out 
of business. They're the only landline and wireless provider in 
the whole area, that's it, in the sense of what's going to 
happen.
    So, is there a way, and I use this as an example, for small 
carriers, under 50,000 lines, and this is, as you imagine, very 
under 50,000, or any number, to help give some relief in the 
application process, and the fee structure, and the cost? This 
is several hundred thousand dollars. As you know, many of you 
are lawyers and past lawyers, and these are not cheap when you 
call a lawyer and say, ``I need a few pieces of paper drawn 
up.''
    Is there some way to give some relief in this process of 
filling out these waivers, but also very timely response, 
because their clock is ticking, and they're going to be out of 
business very quickly.
    So, Mr. Chairman, I give it to you, but, again, I want to 
start with the caveat, you guys have done an excellent job in 
working with us in Alaska, because it's so different. When we 
say ``rural,'' it is rural. Extreme rural. And all of you have 
been there and seen it. You know what I'm talking about.
    So, help us walk through this and ensure that a place like 
Adak can survive, where most their work is now in wireless. 
This is what they want to provide, as they meet the goal of the 
broadband. You don't have to go on this specific one, but this 
is my example, because it's a crisis for them.
    Chairman Genachowski. The general challenge we face is we 
inherited a program with very little accountability, where the 
recipients, in general, had control of the funding spigot, and 
fiscal responsibility is a challenge, and converting the 
program from one with insufficient accountability to one where 
the money that consumers are paying in, every dollar is going 
out in a way that makes sense is a challenge. We're in the 
first round of implementation, and we understand that for some 
of the companies, it's a particular challenge. But, we take the 
waiver process seriously. We'll continue to look for ways to 
streamline and improve it, so that we can move from the program 
that we had, which everyone agreed didn't work, to one that 
efficiently achieves our collective goals of ensuring universal 
broadband.
    Senator Begich. Is there a way, especially for very small 
carriers, because the waiver process cost is the same. You're 
going to have to fill it out. Is there a way to help give some 
relief so it's actually a streamlined process? I know you may 
think it's streamlined, but I'm not a lawyer, so I can't tell 
you what streamlined looks like from a lawyer's perspective, 
but it just seems excessive for a simple obvious issue that's 
about to happen.
    Chairman Genachowski. We will continue to look for the most 
streamlined way to run the process. There are many, many very 
small companies that are receiving consumer dollars, taxpayer 
dollars. We have to get the balance right between ensuring 
accountability, protecting the money that's going into the 
fund, but also not creating impossible situations for companies 
coming in.
    Some of what the companies are doing now in helping us make 
sure we have an accountable program, they won't have to do more 
than once, but again, we're committed to a streamlined process.
    Senator Begich. What I'll do, Mr. Chairman, I have several 
other questions, broader, and some more parochial. I'll submit 
them for the record, but I appreciate keeping to your 
requirement of 5 minutes total.
    The Chairman. Thank you, Senator Begich.
    Senator Boozman.

                STATEMENT OF HON. JOHN BOOZMAN, 
                   U.S. SENATOR FROM ARKANSAS

    Senator Boozman. Thank you, Mr. Chairman, and we appreciate 
all of you being here, and a special welcome to our two new 
members.
    Chairman Genachowski, as you know, Senator Pryor and I 
recently sent you a letter regarding the universal service 
reform, and the need for regulatory certainty, as the process 
moves forward. Businesses, both large and small, need to be 
able to properly plan for the future, and there are many 
concerns, especially from the rural providers, that they lack 
the necessary data and information to move forward. So, in a 
second, I'd welcome your comments regarding that.
    We also invited you to send a staffer to Arkansas, and I 
think many in rural America feel like they're being left out of 
the process. Arkansas is much like West Virginia. So, again, I 
would also ask you to do that.
    But, can you comment a little bit about that as we move 
forward?
    Chairman Genachowski. Sure. First of all, it would be my 
second trip to Arkansas, and I learned a lot on my first trip, 
and I recognize the challenges in rural Arkansas when it comes 
to broadband.
    Those challenges are all over the country, and we have 18 
million Americans who live in areas that have no broadband 
infrastructure, including many in Arkansas. The program we 
inherited was sending more money than it should to certain 
areas, funding four or five providers in a single area, or 
funding one company when there was an unsubsidized competitor.
    The reforms that we put in place are designed to cut those 
back, and then finally move forward with funding broadband for 
unserved Americans in places like Arkansas. The transition is 
challenging. But, our focus is on achieving these goals for 
rural America. That's the purpose of universal service, doing 
it in a way that's consistent with fiscal responsibility and 
accountability, and you're completely right, predictability and 
certainty.
    So, we are in, in some ways, the hardest part of 
implementation. We'll continue to work together as a group to 
get the balance right, so that we get broadband to people who 
don't have it, who deserve it, that we don't waste money, but 
that we also are cognizant of business realities for the 
companies that have been receiving funds for the program and 
deal with those companies in a fair, reasonable, phased-in way.
    Senator Boozman. Very good. Thank you. And any of you can 
jump in on this one. One of the things that all of us are 
hearing a lot about are the misuse of the Lifeline program. And 
the marketing is very, very aggressive now. Many Americans are 
concerned about the misuse, possible fraud and abuse of the 
Lifeline program. It's like seeing the wheelchair ad on 
television, where you contact us, and you'll get this free. 
What that does also is it really, it's one of those things that 
destroys trust in our institutions.
    So, can you comment on reforms? I know that you're actively 
working to do that. What do we need to do to fix the program?
    Chairman Genachowski. We share those concerns, and a few 
months ago, the Commission also unanimously adopted some strong 
reforms to address waste, fraud, and abuse in the program, 
tackling, for example, duplicative recipients, when there's 
only supposed to be one per home, tackling the situation when 
people who aren't entitled to get the benefit, get the benefit. 
There is a problem with sleazy, unscrupulous people who try to 
take advantage of the program and take advantage of people.
    We're increasing our enforcement efforts, and I can't speak 
about specific investigations that we have ongoing, but 
companies out there that are taking advantage of this program, 
we will come after.
    Senator Boozman. That's good to know.
    We talked about spectrum a little bit. What short-term 
solutions are out there for spectrum needs that can be utilized 
while we do the longer term solutions, such as incentive 
auctions and things like that are implemented? What's on the 
short term?
    Chairman Genachowski. Several things. And some of my 
colleagues may want to comment. I agree with Commissioner 
McDowell that unlicensed is a real opportunity. We're seeing 
Wi-Fi taking more and more of the load, that's unlicensed 
spectrum that the Commission issued, not knowing where it would 
lead, a couple of decades ago.
    We're seeing advances in technology, in infrastructure, 
smaller cells being rolled out, more efficient networks. There 
is near-term spectrum that we can auction off, if we all work 
together. We're working closely with NTIA on, for example, the 
1755 spectrum. We need to accelerate those efforts, move 
quickly. There are several pieces of spectrum that were 
identified in the legislation, with deadlines for auctioning 
them. We will auction them, and we're working hard to make sure 
that when we auction them, we'll auction them in a way that's 
most valuable to the public, for example, finding ways to pair 
a spectrum that otherwise would be put out unpaired.
    Senator Boozman. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Boozman.
    Senator Blunt.

                 STATEMENT OF HON. ROY BLUNT, 
                   U.S. SENATOR FROM MISSOURI

    Senator Blunt. On the reform of the Universal Service Fund, 
Chairman, what are you doing there to deal with the issue of 
subsidy, of an unsubsidized competitor, or, you know, in that 
environment we've talked about before? How are you defining 
unserved, and underserved, and trying to be fair, as you look 
at the unserved community, and then look at the partially 
served community? Some thought on that would be helpful.
    Chairman Genachowski. Well, getting broadband to unserved 
Americans is goal number one, along with fiscal responsibility, 
and tackling those areas where the fund is supporting one 
company, where there's an unsubsidized competitor, we all agree 
that needs to be phased out.
    There are issues at the margins that become challenging. 
What if there's partial overlap. Those are issues that will 
work through as we implement it, but our goals are very clear. 
Broadband to unserved Americans, fiscal responsibility, and 
then cognizance of business realities, so that we don't treat 
unfairly companies that shouldn't be receiving money 
ultimately, but have near-term alliances that we have to take 
into account.
    Senator Blunt. And does the additional use of this fund 
have any impact on those small telephone companies that are 60 
or so percent, we have one or two that might be as high as 90 
percent, are dependent on the help from the USF, as you then 
say, spend more of this on broadband? Does that mean you have 
less available to spend on traditional phone service, or how 
does that impact that?
    Chairman Genachowski. No, because the networks are the 
same. And many of the companies in this particular category, 
and really, most of the issues come from a subset of rural 
providers, and that's the ones that are under what's called a 
rate of return regime. These companies have received for many 
years a guaranteed 11.25 percent return. Most companies don't 
operate that way. And, in fact, most unserved rural Americans 
live in areas served by companies that are called price cap 
carriers.
    We do want to make sure that as we put in place these 
reforms that we're sensitive to the unique needs of some of the 
smallest companies that are under rate of return, but we also 
have an obligation to the consumers putting money into the 
fund. Getting that balance right is what we're focused on doing 
on together. It's not easy. But that's our goal and our focus.
    Senator Blunt. On spectrum sale, are you having any luck 
with companies? Do you need some companies to relinquish areas 
of the spectrum they have, and are you having any luck getting 
them to do that?
    Chairman Genachowski. I agree with my colleague. We need 
the Federal Government, in some cases, to relinquish spectrum 
that they have, or to move more quickly to share spectrum. 
That's the single most promising area to free up a substantial 
amount of spectrum from all the broadband, along with the 
incentive auction provisions that the Committee in Congress 
adopted recently.
    Senator Blunt. Commissioner McDowell, do you have some 
ideas as to how that sharing might work or how the government 
community could give up total control of parts of spectrum in a 
way that would be mutually beneficial, or at least beneficial 
to the use of spectrum?
    Commissioner McDowell. Yes, sir. First of all, the Federal 
Government alone probably occupies about 60 percent of the 
useable spectrum. That's just the Federal Government. Not State 
and local governments. So, that tells you a lot right there.
    Spectrum sharing is sort of an ill-defined term. It can 
mean a lot of different things. One question I would have is, 
if a private sector user of the spectrum is going to not have 
priority, would the government want to break into its channel, 
so to speak? For instance, if a private sector user is using 
their device and all of a sudden their call is dropped, because 
the government needs to use it, what is the value of that to 
the marketplace? Probably minimal. It's more along the lines of 
the rights of an unlicensed user, where you don't have 
priority. If you think of your walkie-talkie or baby monitor, 
you know, walkie-talkie from childhood, et cetera, usually got 
cutoff by the stronger person or your neighbor. So, that's not 
an ideal situation, if that's what we mean by spectrum sharing.
    The unlicensed use of TV white spaces is a form of sharing. 
Using the scraps there in between channels. So, there are a lot 
of different ways we could approach the sharing concept, but I 
don't think it's a cure-all. I think the executive branch, in 
particular, needs to look a lot harder at what kind of spectrum 
they can relinquish for auction, and they need to do it 
yesterday.
    Senator Blunt. Thank you, Chairman.
    The Chairman. Thank you, Senator Blunt.
    And now Senator Lautenberg.

            STATEMENT OF HON. FRANK R. LAUTENBERG, 
                  U.S. SENATOR FROM NEW JERSEY

    Senator Lautenberg. Thanks, Mr. Chairman. Chairman 
Genachowski, if we look at today's New York Times, it talks 
about the hacking case, that the head of the Rupert Murdoch 
British newspaper empire was formally charged on Tuesday, along 
with her husband, for burdening the course of justice in the 
phone hacking situation that's going on. I'm looking to that, 
because it bolsters the case that I want to make with you. 
There is evidence that news corporations have been involved in 
a broad range of misconduct, reaching the highest levels of the 
New York-based company, and involving actions in the UK and the 
U.S.
    Now, if we look at the list here, and we see these are 
senior people from the company, from the News Corp. And they 
applied for renewal of their license in 2007. 2007. Five years 
ago. And despite this long list, the FCC has not announced any 
plans for proactive investigation into whether or not News Corp 
is fit to hold a broadcast license in the U.S. And I address 
this to each one of you. What does it take for the FCC to begin 
an investigation?
    Chairman Genachowski. Well, obviously, we have important 
responsibilities under the law. We're aware of the serious 
issues that we see in the UK. These matters may come before the 
FCC as adjudicatory matters. I think it would be inappropriate 
for us to prejudge them, and also inappropriate to speak about 
any investigations we may have ongoing.
    Senator Lautenberg. We're not talking about an outcome. 
We're talking about an action that has to be taken.
    Chairman Genachowski. We don't comment, as other agencies 
of government don't comment, on the status of investigations. 
Obviously, we have important responsibilities that we will take 
seriously. It's important that we not prejudge it.
    Senator Lautenberg. That would be very good to take 
seriously. The head of the company found unfit to lead a major 
international company by British Parliamentary Committee. 
Doesn't that suggest that maybe we ought to be looking at them 
to see what effect that has? They do have an obligation for 
good character to have a license renewal here, and it's been a 
long time. It's my understanding that the FCC is looking into 
allegations News Corps deliberately misled the FCC regarding 
its application to renew the license of WWOR, in New Jersey.
    Mr. McDowell, do you have a point of view here about when 
we ought to get started on looking at this?
    Commissioner McDowell. I think the Chairman has stated it, 
actually, quite eloquently.
    Senator Lautenberg. I heard him.
    Commissioner McDowell. OK. Very good. I agree with what the 
Chairman said.
    Senator Lautenberg. Ms. Clyburn?
    Commissioner Clyburn. Senator, we do have a process in 
place. Any petitioner or potential petitioner has a right to 
file before us, and when and if they do, we take all of those 
matters seriously, and we will review in a timely manner.
    Senator Lautenberg. Ms. Rosenworcel?
    Commissioner Rosenworcel. The Communications Act speaks in 
terms of character, financial, and technical qualifications for 
broadcast licensees, so the Commission should monitor the 
situation.
    Commissioner Pai. And Senator, at the risk of going last, 
and having nothing original to say, I will associate myself 
with my colleagues on that question, and commit to you that in 
the context of the license renewal proceeding, I'll study the 
record very carefully, and support appropriate action.
    Senator Lautenberg. Well, I think that some action here is 
absolutely required, and we ought to get going on this. New 
Jersey, where one of the stations exists, would be the fourth 
largest media market in the country, and here these people have 
a license, and they're fiddling around with this. Charges are 
flying in all over. And I think while there's not enough 
evidence for us to make a decision, certainly, we ought to be 
looking at this, and saying, well, isn't it time for you to 
step up and declare yourself, or take that license and say the 
patience of the country has long run out, and we're going to 
award the license to a deserving party.
    Many Americans aren't able to get broadband service, 
changing the subject a little, because they live in areas where 
companies won't make it available or simply can't afford it. 
Yet, 19 states currently restrict local governments' ability to 
offer broadband. How could we expand broadband access when 
states are passing laws to prevent municipal broadband?
    Chairman Genachowski. We've seen some terrific examples of 
municipal innovation around broadband. My own view is that 
those should be encouraged. I look forward to working with the 
Committee on addressing obstacles and barriers to that.
    The Chairman. Thank you, Senator Lautenberg. I hate to do 
this, but we really have a number of people who are----
    Senator Lautenberg. Thanks, Mr. Chairman.
    The Chairman. It's over five. It's over five.
    Senator Rubio.

                STATEMENT OF HON. MARCO RUBIO, 
                   U.S. SENATOR FROM FLORIDA

    Senator Rubio. Thank you, Mr. Chairman. I'll be brief, 
because I have a few questions I want to get in.
    The first is, Commissioner McDowell, you wrote a piece in 
February in the Wall Street Journal titled, ``The U.N. Threat 
to Internet Freedom.'' I think you were talking then about the 
International Telecommunication Union, the ITU process. I know 
all of you are interested in that process. Could you just give 
us a brief update, any of you, as to where we stand on that 
issue, and what role the Commission will play in that regard?
    Commissioner McDowell. The Commission plays, actually, a 
supporting role as sort of a technical advisor to the State 
Department. The State Department takes the lead role in that. I 
understand, through both private and public information, that 
the State Department will be announcing a head of the U.S. 
delegation, a head negotiator probably next month sometime. 
This comes at a crucial time, as some very crucial meetings are 
going to take place internationally later in June, leading 
toward a treaty negotiation in Dubai this December. So, it's 
really of utmost importance that the United States cultivate 
allies throughout the world, and especially the developing 
world, which could be devastated by international regulation of 
Internet governance.
    Senator Rubio. Does the Commission anticipate in its 
supporting role putting out recommendations to the State 
Department as to what our position should be, what we should be 
advocating for or against, in terms of having an agenda for the 
summit?
    Commissioner McDowell. Thus far, I've been very encouraged 
by, actually, the Obama Administration's statements on this 
particular issue. There was a blog posting just a couple of 
weeks ago by the White House, and State Department, and 
Commerce Department jointly. So, that's a very good sign. And 
as far as I know, the FCC is onboard with that.
    Senator Rubio. Thank you. The other question we've talked a 
lot today about is access in different places. Different 
Senators have raised it. I want to raise it, and I think I'll 
start with you, Chairman, but anybody could comment on it. 
We've spoken about this briefly, when we first met. It has to 
do with Puerto Rico, and some startling statistics about Puerto 
Rico. The 2010 706 Section Report found that 4 million Puerto 
Ricans had no broadband access, which is one-sixth of all 
Americans that are identified as unserved. The 2011 study found 
that 70 percent of Puerto Rico is still unserved by the 
broadband services. My understanding is the national broadband 
plan does not factor in Puerto Rico, as if it's not part of the 
United States. In fact, it explicitly excludes Puerto Rico in 
terms of determining the broadband availability gap, based on 
insufficient data.
    Where do we stand on this issue? I think it's of critical 
importance. You might be able to update us on that.
    Chairman Genachowski. It is an important issue, and Puerto 
Rico is very much a part of our plans, and we have our goal of 
reaching unserved Americans with broadband. Puerto Rico is very 
much a part of that. Of course, the funds for that have to come 
from somewhere, which is why the more support we can get from 
the Committee on a bipartisan basis to ring savings out of the 
program, so we can get broadband to unserved Americans, the 
stronger it will be, and the faster we will be able to move.
    There's some good news in Puerto Rico. Mobile connectivity 
has increased very rapidly, also supported by some government 
programs. But, you're right. There is an issue with people in 
Puerto Rico unserved by broadband, and I look forward to 
working with you on addressing that.
    Commissioner Clyburn. And to affirm that, I look at this, 
in terms of process, especially from a mobile perspective, as a 
down payment. We made a commitment to work within a certain 
budgetary framework, and, of course, that means the types of 
engagement or restrictions that we speak of today.
    My office, we take a lot of meetings from those who care 
and represent those persons in that territory, and I care a lot 
about connectivity. I've got friends on the islands who deserve 
the same type of engagement as we have, and so, hopefully, 
again, the savings that we'll have time to speak more about 
will be able to, again, connect those in that area.
    Senator Rubio. The mobile capacity expansion, is it at par 
with the rest of the national level? In essence, is the 
evidence that that's where the demand is going, is toward the 
mobile route, because the broadband route, you talked about the 
rapid growth in mobile connectivity. Is that based on demand? 
That's what's available, so it's growing faster than the 
national average, for example, on growth?
    Chairman Genachowski. I think that's part of it. And 
there's no question that the rate of increase in Puerto Rico 
has been fast. I don't remember the level of mobile 
penetrations, as compared to other States, but we can get that 
information to you.
    Senator Rubio. Thank you. And the last point, just to go 
back to it, because I think it's really important. A lot of 
people are not aware of the implications the ITV could have in 
the 21st century, especially with some of the countries that 
are really engaging in this regard, China and Russia, who 
especially in China are not exactly bastions of Internet 
freedom. Any place that bans certain terms from search should 
not be a leader in the international Internet regulatory 
framework. So, I hope we will continue to stay engaged and 
involved in that regard. I know you all will, and I hope the 
Committee will keep a close eye on that issue as well.
    Chairman Genachowski. They're very serious issues, and the 
proposals that are out there to create a new layer of 
international governance for the Internet are just a bad idea. 
They're bad for the global economy. They're glad for freedom 
and democracy around the world. And across the administration, 
we're committed to opposing those strongly.
    Commissioner McDowell. And thank you for your resolution, 
too, Senator.
    Senator Rubio. Thank you.
    The Chairman. Thank you, Senator Rubio.
    I'm going to call now no Senator Toomey. Senator Klobuchar 
was in line before that. So, it will be Senator Toomey, Senator 
Klobuchar, Senator Pryor, and Senator Cantwell, should she 
return. If not, Senator Warner.

             STATEMENT OF HON. PATRICK J. TOOMEY, 
                 U.S. SENATOR FROM PENNSYLVANIA

    Senator Toomey. Thank you, Mr. Chairman, and I'd like to 
thank all the Commissioners as well for being here today.
    I guess the first question might as well go to the Chairman 
for this. The authority that the Commission claims for the 
passage of the open Internet order doesn't rest on Title II of 
the Communications Act at all, right?
    Chairman Genachowski. Correct.
    Senator Toomey. OK. If the court strikes down the validity 
of this order, do you support reclassifying broadband as a 
telecommunication service under that act, under Title II?
    Chairman Genachowski. The framework that we've adopted is 
working. It's widely supported. It's led to predictability and 
certainty in the industry. I hope the court doesn't strike it 
down. If it does, I hope Congress will fill the gap immediately 
and make it clear that we have the authority.
    This is a case where, through a lot of hard work, we were 
able to take a big radioactive dispute, increase certainty and 
predictability, and create a climate for increased innovation 
and investment, and it's important that that continue.
    Senator Toomey. I know that's your view. You know that's 
not shared universally here, to say the least. And neither of 
us knows what the court's going to do, but there's certainly a 
distinct possibility that they could strike this down.
    So, my question for you is: Would you support reclassifying 
broadband to have it considered under Title II?
    Chairman Genachowski. I'm on the record of saying the Title 
II approach is not the best idea. I believe we have Title I 
authority and authority in Section 706, and I'm optimistic that 
the court will uphold that, and that we can move forward in the 
direction we're on.
    Senator Toomey. Commissioner McDowell, do you have an 
opinion on this matter?
    Commissioner McDowell. I think the Title II docket ought to 
be closed in that case. I think the implications of having it 
open internationally are devastating.
    Senator Toomey. Does anybody else want to comment on this 
question?
    Commissioner Clyburn. I mentioned earlier that the current 
framework is working, that there are high-level rules of the 
road that fit on one page, that it lends a certainty and 
transparency that I think is beneficial to the American way of 
life and way of communicating, and I am hopeful, also, that the 
courts will recognize that.
    Senator Toomey. I understand, but I had a different 
question, though. It's about the applicability of Title II.
    Commissioner Clyburn. Again, I am hopeful, and if the court 
hands down a decision that's contrary to that, I'll come back 
and we'll have another----
    Senator Toomey. Answer me then.
    Commissioner Clyburn. Thank you.
    Senator Toomey. I see. Anybody else have anything they want 
to add?
    Commissioner Pai. Senator, as I said during our previous 
hearing, I would not support reclassification under Title II, 
assuming the court rules as you suggested.
    Senator Toomey. OK.
    Commissioner Rosenworcel. I acknowledge that for the last 
decade the Commission has been in the business of reclassifying 
these services as information services, and that there has been 
substantial reliance on that regime, and in addition, the 
Supreme Court has upheld that regime. At the same time, I 
support the approach that the Chairman has recommended.
    Senator Toomey. OK.
    Commissioner McDowell. Can I add one quick thing, Senator? 
I'm sorry to interrupt.
    The FCC has never, and I want to underline the word 
``never,'' considered broadband Internet access services to be 
a telecommunication service under Title II. That is a myth, and 
I'm happy to supply this committee with supplementary 
information in that regard.
    Senator Toomey. Great. I'd welcome that.
    Let me just ask a little bit about the incentive auctions. 
And I apologize if I missed the answer to this question 
earlier, but do you have a date by which you do expect to have 
finished the design process?
    Chairman Genachowski. We don't. We have a goal for starting 
the process, which is by the fall, launching the rulemakings. 
We intend to move as expeditiously as possible. We want to get 
the timing right, so that we maximize participation by 
broadcasters, and have a successful auction.
    Senator Toomey. OK. Can you share with us any sort of 
guiding principles on what kinds of conditions you might 
consider attaching to the auction process?
    Chairman Genachowski. I can't, because my mind is open. I 
expect we'll have a robust process, hearing from a lot of 
stakeholders, consulting with the Committee. Our goal is on 
maximizing the opportunity of mobile broadband to our economy, 
to all Americans, learning from experience, and maintaining 
U.S. leadership in mobile.
    Senator Toomey. Commissioner McDowell, do you have anything 
you'd like to add?
    Commissioner McDowell. I think build-out provisions are 
important, so care should be in winning bidders, so licensees 
should be investing in building out and using that spectrum. 
Beyond that, I think we need to be very careful about any other 
conditions.
    Senator Toomey. Anybody else like to add anything? OK. 
Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Toomey. Re-jiggering here, 
I will call upon Senator Klobuchar, then Senator Thune, who was 
here earlier, and then Senator Pryor, then Senator Cantwell, 
then Senator Warner, Senator Udall, and Senator Ayotte.
    Senator Klobuchar. All right.
    The Chairman. Thank you.

               STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. All right. Thank you. Thank you very 
much, Commissioners. Welcome to our two new Commissioners. I 
wanted to applaud you for your recent action on wire line 
cramming. That's something that we've had a lot of issues with 
in our state, and I wondered if you could just elaborate a 
little, Mr. Chairman, maybe, Commissioner McDowell, on how 
you're going to investigate this and what your plans are, and 
why you think it's a problem.
    Chairman Genachowski. Well, our work was informed by the 
excellent work that the staff of this committee did in tackling 
cramming hearing that the Committee held and the complaints 
that we also received at the FCC about cramming and wire line. 
And we found the same as the Committee staff report did, that 
with respect to wire line, there was real evidence of consumer 
abuse and we needed to act, and we did unanimously at the 
Commission, putting in place a set of reforms that we expect 
will decrease cramming.
    We also continue to take enforcement seriously. We 
announced over the last year a series of enforcement actions, 
with fines. That will continue. And we'll continue to look at 
the space. We've heard some reports of issues in the wireless 
space. At the point where we announced our order, I said that 
if those problems increase we will act, and so let's avoid them 
up front.
    Senator Klobuchar. Thank you. Commissioner McDowell?
    Commissioner McDowell. I don't think I can improve upon 
that answer.
    Senator Klobuchar. OK.
    Commissioner McDowell. I agree with the Chairman.
    Senator Klobuchar. That's nice and short.
    Chairman Genachowski. Thank you.
    Senator Klobuchar. That's good timing for our Dig Once. Why 
do it twice, if you can just answer it once. Right?
    [Laughter.]
    Senator Klobuchar. This is something I've been working on 
with Senator Warner. We've introduced a bill known as ``Dig 
Once,'' which requires States to install broadband conduits as 
part of any federally funded transportation project. And this 
was part of the national broadband plan. Could you just address 
how you're going to work with the Secretary of Transportation 
in carrying out this program?
    Chairman Genachowski. Well, we're encouraging the 
Transportation Department and others to move on this as quickly 
as possible, because it is a no-brainer. And since the idea was 
first conceived, it's clear that it's not only a wire line 
broadband opportunity, but a wireless one as well. Many people 
don't realize that a wireless call, most of its distance 
travels through wire line networks, and so lowering the cost of 
infrastructure build-out of fiber in the roads will help not 
only wire line, but wireless. And we're hopeful that we'll see 
some action concretely in the near future.
    Senator Klobuchar. All right. Very good. Mr. Chairman, last 
weekend, the Senate Appropriations hearing, you indicated that 
the FCC had been working closely with RUS to ensure USF reforms 
do not undermine the RUS's asset portfolio. Can you share the 
details of how those discussions are going, and are you going 
to work to make sure that there's not any harm to the 
portfolio?
    Chairman Genachowski. We recognize that there are issues 
for some USF recipients when it comes to RUS, and resolving it 
is going to require flexibility on the FCC's part, flexibility 
on the RUS part, potentially flexibility on Congress's part. We 
don't want to let the tail wag the dog and have RUS loans mean 
that consumers are paying for unjustifiable services for a long 
time. On the other hand, we recognize near-term business 
realities. We're going to work with RUS, with this committee to 
address these issues.
    Senator Klobuchar. Very good. Then I had a question about 
the first phase of the Connect America Fund. It was in the USF 
reform order. It's supposed to provide $300 million in support 
for 2012 broadband investments to unserved Census blocks on the 
map, but I'm hearing now that some portions of it may go 
unused. What's going to happen to this money?
    Chairman Genachowski. My understanding is that the response 
has so far been very strong, but I will get back to you with an 
exact percentage on how much will be utilized. [See page 77.]
    Chairman Genachowski. Obviously, we want to encourage the 
maximum possible use. I just met with one company recently that 
told me they were going to use every penny, both in the first 
phase and the second phase, and we have mechanisms to address 
unclaimed money, but I think we're hearing a positive response 
on companies taking the money and spending it with the 
accountability mechanisms that we've attached to it.
    Senator Klobuchar. OK. Very good. Last, and you can answer 
this in writing, because I know my colleagues want to get to 
this. We have some very remote areas of our State on the 
Canadian border, to the point where actually one of the parts 
of our State you cannot get to except going through Canada, 
called the Northwest Angle, unless the ice freezes over. And 
so, this is Lake of the Woods County. They applied for channel 
reallocation after the DTV transition, but had to wait years to 
get final approval from the Canadian government, and the FCC, 
this January, and this is about--and we can talk about it in 
writing--coordination with Canada, going forward with regard to 
the incentive auction legislation that was passed in February, 
and some other issues that we think we could do a better job of 
working with our Canadian friends.
    Chairman Genachowski. We'll respond in writing. [See page 
127 at **.]
    Senator Klobuchar. OK. Thank you very much.
    The Chairman. Thank you, Senator.
    And now Senator Thune. And I would remind that we have six 
people to go. Votes are meant to start at 3:50. There's a 
possibility it may slip, but people who have waited to ask 
questions should be respected. So, if people could exercise 
discipline.
    Senator Thune.

                 STATEMENT OF HON. JOHN THUNE, 
                 U.S. SENATOR FROM SOUTH DAKOTA

    Senator Thune. Thank you, Mr. Chairman. Mr. Genachowski, on 
April 3 this year, Senator Begich and I, along with 17 other 
Senators sent you a letter requesting, among other things, that 
the FCC not implement additional reductions in USF support 
until the implications of the reforms and reductions adopted in 
the USF reform order can be properly evaluated and understood. 
As of yet, there has not been an official reply to the letter.
    My question is: Will there be a reply forthcoming in the 
near future?
    Chairman Genachowski. There will be a reply forthcoming in 
the near future.
    Senator Thune. Great. And maybe this will be addressed in a 
letter, but could you answer the question about whether or not 
you would delay additional reductions in USF and ICC support 
pursuant to the further notice until the implications of the 
reforms and reductions adopted in last fall's USF order can be 
properly evaluated and understood?
    Chairman Genachowski. I think it's important that we 
continue to move forward with implementing the reforms while 
listening very carefully to the issues that come up and make 
appropriate modifications. So, one of the reasons I haven't 
responded to your letter yet was that we've made some 
modifications in the last 2 or 3 weeks that I wanted to put in 
place, so that we could tell you about them in the letter, 
because we want to respond to the concerns. Stopping the 
reforms, I think, would be counterproductive, inconsistent with 
fiscal responsibility, and unfair to unserved Americans who 
would benefit from us moving forward, including in South 
Dakota.
    Senator Thune. OK. This question has to do with the concern 
in the wireless and telecom industry about the need for 
additional spectrum. As you know, there's great consumer demand 
for wireless services, and we've got some recent economic 
reports that conclude that unleashing about 300 megahertz of 
spectrum from mobile broadband by 2016 would spur $75 billion 
in new capital spending, create somewhere between 300,000 to 
770,000 new jobs, and add $230 billion to GDP.
    When you look at the entire wireless ecosystem and all the 
economic benefits that derive from this type of investment, I 
think there's no wonder that this has been one of the few good 
news stories that we've had in the U.S. economy. And I guess my 
question has to do with the issue of how we get new spectrum 
out there.
    I mean I believe that we've got to do more to identify new 
spectrum and get it into the hands of those who are going to 
invest and continue to build robust wireless networks. I know 
that you're looking at some ways to get more spectrum to 
market, but I'm concerned that the process may take too long, 
and you all will just say that in some cases we need more time, 
and I don't think that's going to be sufficient, based upon the 
demand.
    So, the question is, consistent with what the President's 
called for in the form of an additional 500 megahertz of 
spectrum, can you provide a little more detail on how we get 
spectrum to market quickly, and avoid the pitfalls of kicking 
the can down the road?
    Chairman Genachowski. I agree with all your points. So, 
thank you for the incentive auction authority, which will make 
a big difference, and will move forward in implementing that 
quickly. Recovering spectrum from government is important, and 
working on a bipartisan basis with the Committee will help. And 
then there are areas where we've identified where by removing 
regulatory barriers to spectrum use, we can free up spectrum 
that already is commercial for terrestrial mobile broadband, 
and I look forward to working with you and the Committee on a 
bipartisan basis on that as well.
    Senator Thune. OK. We would welcome that opportunity. I 
think it's really important. And I would just follow up.
    The Chairman. I just beg of you. The votes are meant to be 
starting right now. They haven't. We have four people waiting 
to ask a question.
    Senator Thune. OK.
    The Chairman. Will you yield?
    Senator Thune. I guess I'll yield, Mr. Chairman, if that's 
your desire. Go ahead. I will submit some questions for the 
record.
    The Chairman. OK. I appreciate it. I know. One, actually, 
but you do have that.
    Senator Pryor.

                 STATEMENT OF HON. MARK PRYOR, 
                   U.S. SENATOR FROM ARKANSAS

    Senator Pryor. Thank you, Mr. Chairman. Chairman 
Genachowski, I want to jump right in on the Child Safe Viewing 
Act, and this is the bipartisan bill that basically directed 
the FCC to move beyond the V-chip, as you know, and look at 
other advance blocking technology.
    Can you give us a very quick update on the status of what 
the FCC's doing?
    Chairman Genachowski. Yes. First of all, it's a tremendous 
accomplishment for Congress to have passed this bill by 
ensuring that the industry takes disabilities issue into 
account early. It will solve a lot of problems, and really take 
advantage of the opportunities of technologies to serve people 
with disabilities.
    The statute gives us a list of target dates to hit. We've 
hit all of them so far, working very well with the disabilities 
community and industry. I think it's been a success, and we're 
committed to seeing it continue to being a success.
    Senator Pryor. Thank you. And also on the Child Safe 
Viewing Act, the one about the V-chip.
    Chairman Genachowski. Ah. I'm sorry.
    Senator Pryor. That's okay.
    Chairman Genachowski. My apologies. The Child Safe Viewing 
Act.
    Senator Pryor. You're getting those confused, because those 
are both Rosenworcel initiatives here in the Committee, but go 
ahead.
    Chairman Genachowski. I'll apply that answer to a different 
question. The Child Safe Viewing Act, the opportunities of 
technology to empower parents in meaningful ways is something 
that you and I have talked about for a long time. Chairman 
Rockefeller and I have talked about it, too. It's a real 
opportunity. We're seeing more and more new technologies hit 
the market to do that, and continuing to work together to 
incentivize, promote those technologies, and the awareness of 
parents about those technologies is important.
    Senator Pryor. And is the FCC taking steps to try to bring 
those technologies to bear, to allow parents, especially 
parents, to utilize those technologies?
    Chairman Genachowski. Yes. We've been doing outreach. We've 
done events at schools and with parents. We've worked with the 
Education Department. To the extent that we can resolve these 
issues through better technology in the hands of more parents, 
that would be preferable, and I think will actually work better 
than other courses of action.
    Senator Pryor. All right. Commissioner McDowell, did you 
have anything to add to that, to the Child Safe Viewing Act?
    Commissioner McDowell. No. I think he did a great job. He's 
on a roll.
    Senator Pryor. OK.
    [Laughter.]
    Chairman Genachowski. Thank you.
    Senator Pryor. And you mentioned the CVAA, the 21st Century 
Communication Video Accessibility Act, and it sounds like the 
Commission is maybe what, half way through, or even more, in 
trying to implement that and make that work.
    Chairman Genachowski. I think that's about right. We're 
hitting our targets and will continue to do that.
    Senator Pryor. Great. And there's also a provision about a 
clearinghouse that, again, one of the Commissioners here helped 
on. And basically, has the Commission taken steps to get the 
clearinghouse established yet?
    Chairman Genachowski. I don't remember. Commissioner 
Rosenworcel, have we?
    Commissioner Rosenworcel. I believe it's under way, but 
certainly, we will make sure that that continues.
    Senator Pryor. OK. Thank you, Mr. Chairman. I'll yield back 
my time, but I do have other questions for the record.
    The Chairman. I understand.
    Senator Pryor. Thank you.
    The Chairman. Thank you, Senator Pryor.
    Senator Cantwell.

               STATEMENT OF HON. MARIA CANTWELL, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Cantwell. Thank you, Mr. Chairman. Chairman 
Genachowski, we spoke last week about several issues, the 
enforcement action on the declaratory order on call completion, 
to make sure that it's being taken seriously, about phantom 
traffic, and how we can get the inclusion of carrier 
identification code, so that you can close a loophole and find 
a solution there. We talked about low-power FM and the 
rulemaking, and the implementation from the Local Community 
Radio Act. And so, I'm optimistic that we will be seeing low-
powered FM stations in the very near future, or by the end of 
the year, I should say.
    But, we spent a lot of time talking about the media 
ownership rule and specifically the media cross ownership. I've 
expressed my disappointment at where the Commission is on the 
proposed rule, and particularly when it's released in December, 
which seems to be the habit, and then Congress is gone, and 
oops, where's Congress' ability to raise their objections on 
this.
    So, I'm curious, because the Martin Rule that came out, and 
this is very, very similar, we had 28 Senators, including 
Senators Obama and Biden, co-sponsor a resolution of 
disapproval that subsequently passed the Senate. So, what has 
changed that you think is going to convince me and my 
colleagues that the Martin Rule, and now the Genachowski Rule, 
that was from 4 years ago, are now simply okay?
    And to follow up, too, on that, when you are looking at 
that public interest standard, why did you look at cross media 
ownership rules in the top 20 markets versus the top 10 or the 
top 30? Just because I'm trying to get it all in for the 
Chairman here.
    Chairman Genachowski. I'll keep my answer brief. Senator, 
you've been strong and consistent on these issues, and the 
views that you're expressing have been expressed by others in 
the record. The proceeding is still open, and reviewing the 
record, and then we recognize the conviction that you have on 
these issues, and all of these arguments will be taken into 
account as we move from the notice to an order.
    Senator Cantwell. Well, I would encourage you to come to 
Seattle as a previous commission did, but I'd also encourage 
you to really pay attention, that many members of Congress 
passed and the Senate passed a disapproval of the very thing 
that you're thinking about issuing again.
    So, thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Cantwell.
    Senator Warner. Then Senator Ayotte.

                STATEMENT OF HON. MARK WARNER, 
                   U.S. SENATOR FROM VIRGINIA

    Senator Warner. Thank you, Mr. Chairman. I'll try to be 
very brief, so we'll get in before the vote.
    Spectrum, one of the things I would point out, as I think 
Commissioner McDowell said, 65 percent owned by the Federal 
Government. We have a bipartisan bill, Senator Wicker and I, to 
try to do a spectrum inventory. We're not going to know how we 
can reallocate or nudge our Federal partners unless we have 
that full inventory. Unfortunately, we've had some parts of the 
administration hold back on that. I think it is an essential 
tool.
    I see Senator Wicker just coming in. At this point, talking 
about the spectrum inventory bill. I think it's an important 
step to move forward.
    I've been concerned with NTIA's approach on some of the 
government's spectrum about spectrum sharing, as opposed to 
full relocation. My understanding, though, you're working on 
something that's pretty innovative in terms of experimental 
licenses with both NTIA and the private sector that might allow 
a more efficient use of spectrum sharing with government 
spectrum. Do you want to comment on that?
    Chairman Genachowski. That's right. So, two things. One, 
spectrum sharing is an important opportunity. It shouldn't be 
thought of as eliminating the need for reallocation of 
government spectrum that's just not inefficiently used by 
government. In some cases, it may be more effective to have 
sharing, to, for example, auction a license, but protect 
particular areas around the country where there is a use, where 
it's very expensive to move. So, T-Mobile, with the support of 
the wireless industry, has filed an application for an 
experimental license, to conduct some tests around a military 
base. We're very supportive of that, and we're working closely 
with NTIA to get that granted quickly, to identify the base to 
test this out, so that we can move forward and free up spectrum 
quickly.
    Senator Warner. Well, I would commend you to move forward 
on that. And again recognizing that we have other Senators 
here, I just would add, I really support the efforts you've 
done on USF reform. I was curious with your answer that said 
none of the fixed-rate return players are going to see any 
decrease. I'm not sure how that all happens on a going-forward 
basis, since we're re-jiggering the formula, but I do think 
that getting these dollars out towards broadband, toward the 18 
million unserved Americans, and I really appreciated the fact 
that you-all are working together.
    And I hope, you know, we won't have--there will be many 
efforts to try to delay that. I think that while we may hear 
from certain of our--we don't hear in an organized fashion from 
the 18 million Americans who don't have broadband service that 
need it. So, I say Godspeed.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Warner.
    Senator Ayotte.

                STATEMENT OF HON. KELLY AYOTTE, 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Ayotte. Thank you, Chairman.
    Chairman Genachowski, we've talked a lot about the spectrum 
being held by the Government right now. I just want to ask you 
about a particular band, 1755 to 1780, which you commented on 
in your opening statement. My question is: as we go forward to 
repurpose that spectrum, how is the Pentagon being included in 
this to protect our national security interests, and how can we 
ensure that it's an open and transparent process, so that all 
stakeholders can weigh in, so that we handle that spectrum 
properly?
    Chairman Genachowski. Well, the NTIA and the Commerce 
Department represents all the Federal agencies in the process. 
We coordinate with NTIA and we also speak with the military 
agencies. Of course, I agree that it's important to make sure 
that anything that happens in this area protects the needs of 
the military, but as others have pointed out, there's wide 
agreement that there's inefficient spectrum use on the part of 
the Federal Government, and it's in all of our interests to 
address those and move forward to free up spectrum.
    Senator Ayotte. And has the Pentagon expressed any concerns 
about how you're moving forward with that band?
    Chairman Genachowski. My understanding is that there's real 
interest in this idea of a sharing mechanism for that band that 
would free up significant spectrum for commercial users in 
auctions soon, also preserving the military's ability to use 
that spectrum in the limited areas where it needs it.
    Senator Ayotte. And I quickly want to jump in on the 
Universal Service Fund, the USF fund. Certainly, we all have 
our different viewpoints on it, and New Hampshire, according to 
the last data that was out in 2009, is a donor state, $25 
million. So, I commend you on the reform, and I do think it's 
important that you're slowing the growth of the money that's 
being held in the fund. So, I think that the more that we can 
get the money out, it's important. But, even donor states, like 
New Hampshire, have rural areas, that don't have broadband 
access.
    How do I continue to assure my constituents with the 
reforms that are being made that as a donor state, that New 
Hampshire is going to be addressed in a better way for the 
return on investment for my constituents?
    Chairman Genachowski. Well, we look forward to working with 
you on concrete New Hampshire issues, but our uniform goal, our 
joint goal is to make sure that unserved Americans everywhere, 
including New Hampshire, get the benefits of the money that 
goes into this fund. And so, if you're an unserved American, 
our commitment is in the years ahead, this money will be used 
efficiently to provide service to you and not be wasted where 
it's not needed.
    Senator Ayotte. Great. And real quick. You only have data 
from 2009 by each state. We've been trying to get data from you 
for 2010 and 2011 for each state by state breakdown. I hope 
you'll get that out soon, so that everyone can see what that 
means in terms of each of their states and what they're 
contributing or not contributing.
    Thank you.
    Chairman Genachowski. Thank you.
    The Chairman. Thank you, Senator Ayotte. The vote is in 
process. Senator Wicker, you're free to ask a question, but you 
will also be chairing the hearing.

              STATEMENT OF HON. ROGER F. WICKER, 
                 U.S. SENATOR FROM MISSISSIPPI

    Senator Wicker. Thank you. And shall I adjourn it then?
    The Chairman. Yes.
    Senator Wicker. Thank you.
    Senator Hutchison. Let me ask if you will be willing to 
answer questions, also, that we didn't get the chance to ask 
for the second round.
    Chairman Genachowski. Of course.
    Senator Hutchison. We have a couple.
    Senator Wicker. I appreciate you accommodating me. We will 
report the bill to the full Senate in your absence, Mr. 
Chairman.
    Chairman Genachowski, thank you for sticking around. We all 
have full schedules this afternoon, and I'm sorry I haven't 
been here for most of the time. You know I've advocated device 
interoperability, along with a number of competitive wireless 
carriers operating in the United States. So, let me commend you 
for moving to a notice of proposed rulemaking, addressing the 
prospect of interoperability in the lower 700-megahertz band. 
Of course, this is only a step. So, if you could, tell us what 
is the status of this notice, and when do you expect the FCC to 
take final action on the issue?
    Chairman Genachowski. We're taking this seriously, and we 
appreciate your urging in this regard. Interoperability is a 
real issue for the smaller carriers that have that A block 
spectrum. There are interference issues that have come up, and 
we're now working with stakeholders to analyze the interference 
issues to determine if there's a way to address them, 
ultimately to make sure that all the carriers who have spectrum 
in that band have the ability to use it and to get devices for 
their consumers.
    Senator Wicker [presiding]. OK. Now, how is that process 
going? Because what I'm trying to get is the timeline.
    Chairman Genachowski. If I could respond in writing to 
that. I don't remember whether the comment proceeding is still 
open or not. But, our intention is to move quickly on this, 
because it's a real issue in the marketplace for the carriers 
that have the spectrum. [See page 104.]
    Senator Wicker. Well, good. Then if you could take that for 
the record and give me a specific answer on when you expect to 
take final action, that would be terrific.
    And let me just ask this to Commissioner McDowell, about 
the Universal Service Fund and relief mechanisms.
    The last time the Committee addressed this issue, I said 
the FCC needed to focus on broadband availability, while 
reigning in cost and remaining adequately responsive to the 
unique needs of rural America, which most of my State 
comprises. Not all of my colleagues agreed with every aspect of 
the order, particularly the funding dedicated to wireless 
service, and I share that concern. However, I believe the 
Commission took an important and necessary first step.
    I urge the FCC to move forward on the second part of USF 
reform, and focus on contribution to ensure that we complete 
modernization of USF. However, I do understand that some 
companies will have growing pains during this transition. It's 
my understanding that part of the USF order includes several 
relief mechanisms for those who believe that reform will have 
an adverse impact on their businesses.
    So, are you in a position today to elaborate on those 
relief mechanisms, Mr. McDowell?
    Commissioner McDowell. I believe you're speaking about the 
waiver process at the FCC. And we had an interesting dialogue 
earlier regarding that.
    We are taking this very seriously. We want to make sure 
that the waiver applications are as detailed as possible, so we 
truly understand what the hardships may or may not be for the 
applicants. But, we also want to keep it as streamlined as 
possible. This is a work in process, and we hope to be able to 
refine our process going forward and learn a lot as we go.
    Senator Wicker. How is that process proceeding?
    Commissioner McDowell. I think it's proceeding fine thus 
far, and we will make determinations as quickly as possible on 
those waiver applications.
    Senator Wicker. Well, thank you very much. And I appreciate 
you folks sticking around. I look to counsel to see if there is 
some magic words I need to say. Do I need to adjourn the 
hearing? This is the most power I've had in quite a while.
    [Laughter.]
    Senator Wicker. If there is no objection from the other 
members of the Committee, we'll keep the record open for 2 
weeks.
    Hearing no objection, the hearing is adjourned.
    [Whereupon, at 4:07 p.m., the hearing was adjourned.]
                            A P P E N D I X

        Prepared Statement of Mignon L. Clyburn, Commissioner, 
                   Federal Communications Commission
    Good afternoon Chairman Rockefeller, Ranking Member Hutchison, and 
members of the Committee.
    When I last appeared before you, I was still within year one of my 
current tenure at the FCC. Since then, the Commission has, without 
question, experienced two very dynamic and productive years. We've 
issued an impressive number of rulemakings and have engaged in an 
incredible amount of industry and intergovernmental collaborations, 
resulting in a more thorough and inclusive decision-making process.
    It has been said, at times, that agency over-regulation can lead to 
undue intrusion, which could interfere with the vibrancy of the global 
free market. We have been told, more than once, that American ingenuity 
and innovation will be stifled by unnecessary and poorly targeted 
government rulemakings. Let me firmly state for the record that I agree 
with both of those assertions. In my opinion, however, one of the best 
ways that this regulatory body can prevent this from occurring while 
not abandoning our public interest obligations, is by promoting robust 
competition throughout all communications industry sectors. The greater 
the number of viable competitors, the more incentives those competitors 
may offer consumers through better services, more product offerings, 
and yes, more marketplace discipline. In other words, the more robust 
and competitive a marketplace, the less need there is for regulation.
    But the plain truth is that this marketplace nirvana does not 
always exist. There are times when the communications ecosystem fails 
to properly address current, key consumer interests. And when that 
occurs, the Federal Communications Commission is here to play a vital 
role. We encourage industry to respond, in collaborative ways, to 
address consumer harms when appropriate, and we codify regulations 
through rulemakings when that pathway is warranted. I am not resistant 
to industry-led, voluntary solutions in some cases, because that type 
of engagement has the potential to give the marketplace greater 
flexibility to respond to evolving consumer needs in our 
technologically fast-paced environment. But I am also not ashamed of 
stating for the record that I am an advocate for smart, targeted 
regulatory action when necessary to promote meaningful competition in 
order to ensure that basic consumer protections are in place.
    We have joined hands with industry and public interest advocates in 
tackling significant reforms of the Universal Service Fund. We are 
lowering the barriers to broadband adoption by partnering with industry 
and grass roots organizations, and we have worked with the wireless 
association and others to tackle consumer bill shock issues. And most 
recently, thanks to you and both wireless and broadcast stakeholders, 
we are now better equipped to address America's appetite for more 
mobile broadband solutions.
    The Commission is moving forward to promote and encourage 
competition and we recognize that one of the best ways to achieve this 
is to repurpose more spectrum for mobile broadband services. In 2010, 
we adopted rule changes to allow mobile broadband service in the 2.3 
GHz band. This year, we proposed changes that can similarly repurpose 
40 MHz of Mobile Satellite Service spectrum for terrestrial mobile use. 
Our staff is also working diligently to implement the historic 
voluntary incentive spectrum authority that you gave us in February.
    For me, however, the greatest example of our collaboration can be 
found in the implementation of the landmark 21st Century Communications 
and Video Accessibility Act, or CVAA. In conjunction with industry 
stakeholders, bipartisan drafters in the House and Senate put together 
a comprehensive bill that works toward ensuring that there is digital 
and technological parity for those with different abilities.
    This is the most important piece of disability legislation since 
the passage of the Americans with Disability Act. It affords us 
stronger authority to adopt rules that will offer greater access to 
video programming and the most advanced voice and data services on the 
market, irrespective of the communications platform being used, to 
deliver vital services to those previously denied.
    Congress provided the roadmap, then handed it off to the FCC to 
further coordinate and strategize with private industry on how best to 
implement the parameters in a way that minimally burdens stakeholders. 
CVAA is an example of collaboration between Congress, the FCC, and 
industry at its best, and 36 million blind, deaf, and hard of hearing 
Americans are the direct beneficiaries.
    Over the past two years, the Commission has had a number of 
important public safety achievements. In September of last year, the 
Commission initiated a rulemaking, to modernize the current voice-based 
911 system to a Next Generation 9-1-1, or ``NG-9-1-1'' system so that 
the public will be able to send texts, photos, videos, and other data 
to emergency call centers. The FCC improved the reliability and 
continuity of communications by adopting outage reporting requirements 
for VoIP networks, and the agency is collaborating with broadband 
Internet Service Providers to learn more about the technical issues 
associated with the outages that the customers of those providers may 
experience. The current top priority related to public safety policy is 
implementing the specific mandates that Congress imposed with regard to 
establishing the Technical Advisory Board for First Responder 
Interoperability, and transitioning public safety spectrum to the First 
Responder Network Authority.
    I am grateful for the opportunity to speak today, and I look 
forward to answering any questions you may have on how the FCC can 
continue to promote greater access to communications technologies and 
services for all Americans. Thank you.
                                 ______
                                 
       Prepared Statement of Jessica Rosenworcel, Commissioner, 
                   Federal Communications Commission
    Good afternoon, Chairman Rockefeller, Ranking Member Hutchison, and 
the distinguished Members of the Committee.
    It is a great privilege to appear before you today. I was 
ceremonially sworn into office on Monday. My tenure at the agency has 
been limited. So it is in that spirit that I offer my remarks today. 
They will be brief.
    There may be no sector of the economy more dynamic than 
communications. These are the technologies that support our commerce, 
connect our communities, and enhance our security. They are an 
essential part of how we educate, create, entertain, inform, and govern 
ourselves.
    Yet technology changes at a blistering pace. So it is essential 
that the Commission approach its tasks with humility. It must have a 
healthy respect for the power of innovation to invert what we think we 
know.
    Still, I believe that there are enduring values in the 
Communications Act that must always inform the Commission's work. 
Public safety is paramount. Universal service means that everyone in 
this country, no matter who they are or where they live, should have 
access to first-rate communications services. Competition inspires 
private sector investment and drives the development of more innovative 
services at lower cost. And consumer protection is always in the public 
interest.
    In the weeks and months ahead, the Commission will have no shortage 
of challenging issues to address. The Middle Class Tax Relief and Job 
Creation Act tasked the agency with a series of spectrum auctions 
designed to ease the growing demand for this scarce resource. These 
include incentive auctions, which are undeniably complex. In years 
past, Commission auctions have raised $50 billion for the United States 
Treasury. Its path-breaking auctions have led the world. I am confident 
that with the right mix of engineering and economics, with these new 
auctions the Commission can once again serve as a pioneer. Furthermore, 
if it follows the law, it can do so in a way that is fair to all 
stakeholders and will provide our first responders with the resources 
and nationwide interoperability that will help keep us safe.
    For more than five years, I had the tremendous privilege of serving 
on the staff of this Committee. It is an honor to return to this room 
and sit at this table in my new role. From my time working for this 
body, I deeply understand that it is the duty of this agency to listen 
to the Congress and be responsible to the American people.
    Thank you again for the opportunity to appear before you today. I 
would be happy to answer any questions you may have.
                                 ______
                                 
             Prepared Statement of Ajit Pai, Commissioner, 
                   Federal Communications Commission
    Chairman Rockefeller, Ranking Member Hutchison, and members of the 
Committee, it is a privilege to appear before you today. Several months 
ago, you extended to me and to my colleague, Commissioner Rosenworcel, 
the opportunity to appear before you in connection with our nominations 
to the Federal Communications Commission. I am honored that this 
Committee, and ultimately the full Senate, approved our nominations. 
And I am grateful to you for your support during the confirmation 
process and for giving us the chance to serve the public in our new 
capacity. As I stated during our previous hearing, I look forward to 
building a collaborative relationship with Congress, including the 
members and staff of this Committee.
    That relationship begins, appropriately, with this oversight 
hearing. Congressional oversight of the Executive Branch and 
independent agencies is a critical feature of government. As the 
Supreme Court opined decades ago, Congress' ``power of inquiry . . . is 
an essential and appropriate auxiliary to the legislative function.'' 
\1\ It is important for agencies to be accountable not only by virtue 
of statutes that reflect accumulated Congressional will, but also 
through contemporary examination. I seek no exemption from this 
exercise. Accordingly, I welcome your exacting scrutiny regarding my 
office's performance and priorities during the fifty-two hours since I 
was sworn in as a Commissioner.
---------------------------------------------------------------------------
    \1\ McGrain v. Daugherty, 273 U.S. 135, 174 (1927).
---------------------------------------------------------------------------
    On a more serious note, the agency in the near term will be 
addressing several high-profile matters. I am eager to begin working 
with my new colleagues at the Commission, with Congress, with 
interested parties, and with the American people in doing so with care 
and dispatch.
    First and foremost among these matters is the implementation of the 
spectrum auction authority granted by Congress earlier this year. With 
the proliferation of smartphones and functionally similar devices, the 
increasing use of high-bandwidth mobile applications is straining 
network capacity. Indeed, according to one recent estimate, data 
traffic on mobile service providers' networks is projected to increase 
16 times from 2011 to 2016. The FCC therefore must do what it can to 
free up additional spectrum for broadband, and Congress' recent action 
has given the Commission important authority to accomplish this 
objective. The Commission needs to implement the incentive auction 
legislation swiftly in order to address the Nation's growing demand for 
wireless broadband. At the same time, however, it must do so in a 
balanced manner that takes into account the concerns of all 
stakeholders. It is my intention to work with my colleagues 
thoughtfully to sort through the technical, policy, and legal thickets 
ahead. We need to get this right. But implementation of this authority 
is not the only answer. Currently, the Federal Government has control 
over too much spectrum, limiting the amount of spectrum available to 
handle the growing demands of American consumers. The government 
therefore needs to accelerate its efforts to identify and to free up as 
much additional spectrum as is feasible for commercial use.
    Reform of the universal service system is another area in which the 
Commission will be focusing much attention. This past fall, as you 
know, the Commission adopted many changes to the distribution side of 
the universal service ledger. On April 27, 2012, the Commission issued 
a Further Notice of Proposed Rulemaking that seeks comment on a broad 
range of questions relating to the contribution side. I agree with the 
Commission's recent characterization of the status quo in this area: 
``The current contribution system has given rise to uncertainty, 
inefficiency, and market distortions. Outdated rules and loopholes mean 
that services that compete directly against each other may face 
different treatment. Universal service charges billed to consumers and 
businesses vary by company despite virtually identical service 
offerings, creating confusion and distorting markets. And compliance 
costs have increased as companies struggle to apply old rules to new 
products.'' \2\ In this context, reform is a necessity, not a luxury. 
Chairman Genachowski, Commissioner McDowell, and Commissioner Clyburn 
deserve much credit for taking on this challenge, and I stand ready to 
assist them in future efforts. I look forward to reviewing the record 
compiled in response to the Further Notice and taking appropriate 
action in a timely manner.
---------------------------------------------------------------------------
    \2\ News Release, ``FCC Reforms Seek Efficient, Fair USF 
Contribution System,'' available at .
---------------------------------------------------------------------------
    Media ownership is another area in which the FCC soon will be 
poised to take action. At the end of last year, the Commission released 
a Notice of Proposed Rulemaking kicking off the quadrennial review 
process mandated by Congress. The NPRM sought comment on several of the 
Commission's media ownership rules as well as certain aspects of an FCC 
order on diversity of ownership that were vacated and remanded by the 
United States Court of Appeals for the Third Circuit. My understanding 
is that the comment and reply comment deadlines have passed. I will 
carefully review the record and will support the Chairman and my fellow 
Commissioners in seeking to resolve the difficult questions presented 
in this proceeding. Our efforts must reflect the changing nature of our 
Nation's media landscape while at the same time preserving the 
Commission's commitment to the core values of competition, diversity, 
and localism.
    The areas I have outlined--spectrum policy, universal service, and 
media ownership--occupy distinct niches in communications regulation. 
But the common thread uniting them is that prompt and well-considered 
FCC action can improve the communications marketplace for the benefit 
of all consumers. Freeing up more spectrum for wireless broadband will 
give companies the incentive to invest in next-generation services and 
allow consumers to take advantage of advanced mobile applications. Wise 
reform of the contribution mechanism will ensure that the Universal 
Service Fund is sustainable and will enable more Americans to enjoy 
access to voice and broadband services. A more vibrant media sector 
will help more Americans gain access to a wider array of broadcast 
television, radio, print, and other sources of news.
    Indeed, whenever the FCC exercises its jurisdiction, it should seek 
to create a regulatory environment in which competition and innovation 
will thrive, because consumers ultimately will reap the rewards. My 
approach will be to promote policies that will give private firms 
strong incentives to raise and invest capital; to develop new products 
and services; and to compete in established and new markets. We should 
do what we can to remove uncertainty that can deter businesses and 
investors from taking risks; to revisit outdated regulations; and to 
set clear, modernized rules for the road. Moreover, the FCC should act 
with dispatch to reflect the pace of change in today's marketplace. 
Faced with an industry as vibrant and dynamic as today's communications 
sector, the Commission must guard against clinging to twentieth century 
methods of addressing the technological landscape of the twenty-first 
century.
    I believe that this approach will result in more American consumers 
enjoying better products at lower prices. And it will help the 
communications industry--which by some measures constitutes one-sixth 
of our economy--contribute more meaningfully to economic growth and job 
creation.
    Chairman Rockefeller, Ranking Member Hutchison, and members of the 
Committee, thank you once again for giving me an opportunity to serve, 
and for affording me and my new colleagues at the Commission the chance 
to testify today. I look forward to your questions.
                                 ______
                                 
Response to Written Questions Submitted by Hon. John D. Rockefeller IV 
                       to Hon. Julius Genachowski
E-Rate
    Question 1. Under the Lowest Corresponding Price rule adopted in 
1998 for the E-Rate program, providers of eligible E-Rate services are 
barred from charging the recipients of E-Rate funds more than they 
charge other similarly situated customers. This rule is intended to 
make sure that E-Rate funds go as far as possible to serve schools and 
libraries. But recent press reports have alleged that some providers 
may have been charging schools and libraries many times more than they 
charge others in the same region for the same services. Can you provide 
a history of the Commission's efforts since 1998 to enforce the Lowest 
Corresponding Price Rule?
    Answer. Adopted in 1998, the Lowest Corresponding Price (LCP) rule 
(47 C.F.R. Sec. 54.511(b)) prohibits ``providers of eligible services'' 
from charging schools and libraries ``a price above the lowest 
corresponding price for supported services.'' The rule reinforces the 
E-Rate competitive bidding rule, provides schools and libraries with 
bargaining power, and gives the FCC an additional tool for oversight.
    The FCC has taken several actions to ensure LCP compliance, 
including an $8.3 million FCC-DOJ settlement agreement in 2009 with 
AT&T regarding over-billing, and a 2011 FCC-DOJ investigation involving 
two Wisconsin E-Rate service providers. Also in 2011, the FCC's 
Inspector General subpoenaed data and information regarding LCP from 
various E-Rate service providers.
    USAC's current audit procedures test for cost-effectiveness by 
requesting a vendor's price list to determine if the customer was 
charged the LCP and comparing the prices charged to E-Rate 
beneficiaries and other similarly-situated customers. In the spring of 
2012, USAC included LCP training in its vendor trainings and will 
include it in its applicant trainings beginning in October.

    Question 2. Does the fact that some states have existing state 
master contracts for communications with providers for prices that may 
not comply with the Lowest Corresponding Price rule complicate the 
Commission's enforcement of the rule?
    Answer. The requirements of the LCP rule are well-established and 
clear. Participants in the E-Rate program are required to ensure 
compliance with all applicable Commission rules, including LCP.

    Question 3. Recently the Universal Service Administrative Company 
(USAC) that administers the Universal Service Fund, including the E-
Rate program, amended its training materials to include information 
about the Lowest Corresponding Price rule. Is the Commission aware of 
how USAC trained companies that participate in the program about the 
rule before this presentation was updated? What guidance did the 
Commission give to telephone companies before this year? Are you aware 
of why USAC decided to make these changes to the presentation?
    Answer. Internal discussions during the 2011 LCP whistle-blower 
investigation led to the Commission directing USAC to include training 
on the LCP rule in the 2012 vendor and applicant trainings. The 
Commission prepared materials regarding LCP compliance and provided 
them to USAC for incorporation in its annual trainings for service 
providers and applicants. Commission staff reviewed all USAC training 
materials and attended the vendor trainings that took place in May 
2012.

    Question 4. I have received reports that some providers have been 
awarded lengthy multi-year E-Rate service contracts? What is the 
rationale behind awarding multi-year contracts? Are they necessary to 
attract bidders to serve rural areas? What are the mean and median 
lengths on multi-year contracts? How many of these contracts are longer 
than three years? How long is the longest contract?
    Answer. The E-Rate program does not award multi-year contracts. 
Applicants for E-Rate funds may enter into multi-year contracts with 
service providers but must seek approval for E-Rate funding each year. 
An E-Rate applicant cannot enter into pre-paid multi-year contracts 
unless the applicant itself pays in advance and gets reimbursed from 
USAC on a pro-rata basis. Therefore, there is never a guarantee that E-
Rate will fund each year of a multi-year contract.
    The Commission found in the E-Rate First Report and Order that 
multi-year contracts could potentially reduce the costs incurred by the 
USF in serving the E-Rate program. The Commission found ``educators 
often will be able to negotiate better rates for. . .multi-year 
contracts, reducing the costs that both they and the universal service 
support mechanisms incur.''
    The Commission and USAC do not track data on the duration of multi-
year contracts entered into by E-Rate applicants.
Payphones
    Question 5. Payphones are a vanishing feature of the American 
communications landscape. Fifteen years ago, we had more than 2 million 
payphones across the country, but now we have less than a quarter as 
many. Despite this decline, they remain a primary link to the 
communications network for American households without any form of 
household phone. They are a vital part of keeping Americans connected 
and can be a lifeline in times of emergency.
    Before you became FCC Chairman, as part of your nominations hearing 
in 2009, I asked if you would review existing payphone policies at the 
FCC in order to ensure that the Congressional mandate to compensate 
each and every completed call is met. You responded that you would 
``review existing policies to ensure that the Congressional mandate in 
Section 276 of the Communications Act--to compensate each and every 
completed call--is met.'' I also asked if you would work to ``ensure 
that disputes over payphone compensation are resolved in an expeditious 
manner.'' You replied in the affirmative.
    In light of the important role that payphones play and the risk 
associated with the loss of communications service, please provide an 
update on what the Commission has done since you became Chairman to 
review its payphone policies and to resolve payphone compensation 
disputes in a timely manner.
    Answer. On September 7, 2010, I circulated a final order that 
resolves several payphone compensation petitions, including a petition 
for declaratory ruling filed by Illinois Public Telecommunications 
Association seeking refunds from Bell Operating Companies and petitions 
filed by independent payphone associations from the states of Illinois, 
Mississippi, New York, Florida, Ohio, and Michigan seeking Commission 
preemption of decisions by individual state commissions. The issues in 
these multiple petitions raise complex issues based on unique 
procedural facts. The Commission has compiled an extensive record 
submitted by payphone service providers and interested parties from 
several states. The order is awaiting the votes of my fellow 
Commissioners.
Mobility Fund
    Question 6. Currently, West Virginia receives a substantial amount 
of funding under the legacy Universal Service Fund high-cost support 
mechanism, which is being completely phased out. Can you guarantee that 
our state will receive funding in the upcoming Phase I Mobility Fund 
auction?
    Please explain whether your auction methodology for Phase I of the 
Mobility Fund contains any adjustments that factor in the higher costs 
of providing coverage to mountainous and foliated areas such as those 
in West Virginia. If not, please explain what incentives are contained 
in the auction to get companies to invest in West Virginia using 
Federal high-cost support.
    Answer. West Virginia carriers are currently receiving $18.5M 
annually in USF support and are receiving an additional $4.6M in CAF 
Phase I support to serve an additional 15,000 currently unserved homes 
and businesses.
    The Mobility Fund Phase I Auction (Auction 901) will offer up to 
$300 million in onetime support to carriers that commit to provide 
advanced mobile voice and broadband services in areas where such 
services are currently unavailable. Winning bidders will have to deploy 
3G service within two years or 4G service within three years of the 
award of support.
    Using a reverse auction format, bidders will identify a per-road 
mile support price at which they are willing to meet our requirements 
to cover the qualifying road miles in a given area. The states that 
receive funding will be determined by the bids that are received. 
Bidders are responsible for investigating and evaluating all technical 
and marketplace factors that may have a bearing on their bid amounts. 
Support will be awarded based on the lowest bid amounts submitted.
Lifeline
    Question 7. I believe strongly in making sure all Americans have 
access to affordable communications services--including rural and low-
income Americans. That is why I support the goal of the FCC's Lifeline 
program. At the same time, I recognize there has been rapid growth in 
the program, particularly in the prepaid wireless area. To make sure 
that this program continues to serve Americans who need it most, we 
must root out waste, fraud, and abuse.
    Earlier this year, the FCC adopted reforms of the Lifeline program 
and sought comment on additional reforms. Do you believe that those 
measures are sufficient to protect the Lifeline program against waste, 
fraud, and abuse?
    Answer. As you note, earlier this year, the FCC issued an Order to 
eliminate waste, fraud, and abuse in the Lifeline program. The Order 
includes a number of reforms to constrain program growth, including 
establishment of national eligibility criteria and a national database, 
and independent audits. On July 31, 2012, the Wireline Competition 
Bureau (WCB) issued a Progress Report estimating that Lifeline reforms 
have already generated approximately $42.75 million in savings thus far 
in 2012 by eliminating more than 300,000 duplicate customers. This puts 
us on target to meet our savings goal of $200 million in 2012. WCB will 
continue to monitor the implementation of these reforms.
Cable Rates
    Question 8. According to the FCC's 2012 Report on Cable Industry 
Prices, there is evidence that cable rates have risen at a rate in 
excess of inflation. The report noted that rates for expanded basic 
cable service increased by 3.7 percent during 2010, compared to an 
increase of 2.5 percent in the Consumer Price Index. Over time, this 
increase has been more substantial. Your report states that from 1995 
to 2010, rates increased 144 percent, compared to the Consumer Price 
Index increase of 44 percent.
    I know that, under the 1992 Cable Act, the FCC cannot regulate the 
rates of the basic tier where there is ``effective competition.'' Given 
the continuing increase in cable rates that you found, does the 
``effective competition'' standard need to be revisited?
    Answer. The Commission applies the effective competition standards 
as promulgated by Congress. If Congress decides to revisit the issue, 
Commission staff will be available to provide technical assistance. As 
you note, our most recent cable price surveys do show basic and 
expanded basic cable rates increasing more quickly in the 25 percent of 
communities where there have been findings of effective competition, 
but when the data is evaluated on a per channel basis, the average 
overall price decreases by 7.3 percent for expanded basic service.
Cramming
    Question 9. Last July, this Committee released a staff report that 
uncovered the harm caused to consumers when bogus companies cram 
fraudulent charges onto phone bills. We learned that cramming costs 
consumers as much as $2 billion a year in fraudulent charges--and that 
phone companies had been making huge profits from these charges.
    After the report exposed the extent of these practices to the light 
of day, several major landline telephone companies committed to me that 
they will stop it. That's good news. But we cannot let crammers run 
from one kind of bill to another--we must stop cramming from moving 
into wireless and other services. Are you working to make sure cramming 
does not move to other services, such as wireless?
    Answer. Like you, I am concerned about cramming practices and the 
adverse effects that they have on consumers. Your report highlights the 
problems that consumers face when they receive unwanted charges on 
their wireline bills. Our Order issued earlier this year requires 
wireline carriers that currently offer blocking of third-party charges 
to notify consumers of the option at the point of sale, on each bill, 
and on their websites. The Order also requires that wireline carriers 
place charges from non-carrier third parties in a distinct bill section 
separate from carrier charges.
    Similar to the findings in your Committee report on the subject, 
the Commission concluded that the record before us at the time did not 
demonstrate a need for rules to address cramming involving wireless--as 
well as VoIP--services, but we initiated a Further Notice about 
wireless and VoIP cramming, and we intend to monitor all consumer 
complaints closely. If the record developed through the comments 
demonstrates that there is a need for rules to address cramming 
involving wireless and VoIP service, I am committed to Commission 
action on the issue.
Political File
    Question 10. For more than five decades, broadcasters have kept 
paper copies of their public files. The FCC recently required 
television broadcasters to move into this century and finally make 
their public and political files available online. I wholeheartedly 
support this requirement. We're moving to a digital world, and 
government transparency cannot be stuck in the dark ages. However, I 
question the wisdom of exempting from the rule broadcasters who are not 
in the top 50 markets. I understand that you are worried about the 
bottom line for broadcasters in rural areas--but I am concerned about 
the citizens they serve. It is often more difficult for citizens in 
rural areas to make the trip to their nearest broadcaster's station to 
review paper files. Should you not make sure that citizens in rural 
areas can access the same information as those in the largest markets?
    Answer. I understand your concern and agree that access to this 
information should be provided to all Americans, regardless of where 
they live. To be clear, every television broadcast station is required 
to upload new public file documents into the online system to make them 
available to the public. Consumers in every area--urban and rural--will 
be able to access the stations' public file materials using the online 
system. The Commission provided a limited delay--to July 2014--for 
stations in smaller markets in order to provide additional time for 
those typically smaller stations to prepare for the transition. I 
believe this was the appropriate balance to strike, considering that 
the majority of political advertising purchases are made in larger 
markets. Stations that are not required to upload the political file 
materials until 2014 are still required to maintain materials in paper 
form at the station's main studio.
Verizon/SpectrumCo Transaction
    Question 11. The Commission and the Department of Justice are both 
reviewing a transaction between Verizon and four of the largest cable 
companies. As part of the proposed deal, Verizon and the cable 
companies would market and sell services for each other. Some have 
raised concerns that these joint operating agreements could make it 
very difficult for other companies to compete--especially companies 
that cannot offer all of the same services. These concerns are 
compounded when these competitors might be the only ones that serve 
consumers in other rural areas. So, if these competitors are harmed 
directly in a particular market, does that mean there is a risk that 
all of their rural consumers may suffer as a result? When you review 
the joint agreements as part of the larger transaction, do you plan to 
pay attention to the impact that they may have on the provision of 
voice, broadband, and video services to rural consumers across the 
country? Will the Commission consider how the joint agreements affect 
whether broadband service is further deployed, upgraded, and maintained 
for residential customers in rural America?
    Answer. The Commission's review of the Verizon-SpectrumCo 
transaction focused on the impact the transaction would have on 
consumers throughout the country, including in rural areas. I approved 
the transaction only after the companies made significant pro-consumer, 
pro-competitive modifications to their original agreements.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Inouye to 
                        Hon. Julius Genachowski
Applications for Waiver of Universal Service (USF)/Intercarrier 
        Compensation (ICC) Reform Rules
Questions on timing of review and decisions on waiver petitions
    Question 1. I am concerned about the Commission's ability to 
provide timely responses to waiver requests filed because of the recent 
USF/ICC Order. Please provide a list of waiver requests which have been 
filed to date including the date the request was filed, and the start 
and end dates of the public comment period. To the extent the FCC has 
issued a decision on the waiver request, please indicate the date of 
the decision. With respect to requests filed by native communities 
subject to the 45-day shot clock, please also include the date on which 
the shot clock started and time periods during which the shot clock was 
stopped, and why.
    Answer.
Waivers Granted (in part)
   Allband: Order (DA 12-1194, rel. July 25, 2012)

   Windy City Cellular: Interim Relief Order (DA 12-923, rel. 
        June 12, 2012)
Waivers Withdrawn
   Big Bend: (originally filed Feb. 6, 2012; withdrawn via 
        letter July 18, 2012)
Pending High-Cost Cap Waivers
   Border to Border (filed June 29, 2012; Public Notice 
        released on July 12, 2012; comments due Aug. 13, 2012; replies 
        due Aug. 28, 2012)

   Dell Telephone (filed June 6, 2012; Public Notice released 
        July 11, 2012; comments due Aug. 10, 2012; replies due Aug. 27, 
        2012)

   Adak (filed May 22, 2012; Public Notice released May 31, 
        2012; comments received July 2, 2012; replies received July 16, 
        2012)

   Accipiter (filed Apr. 18, 2012; Public Notice released May 
        4, 2012; comments received June 5, 2012; replies received June 
        20, 2012)

   Windy City Cellular (filed Apr. 3, 2012; Interim Relief 
        Order released. June 12, 2012)

   Sandwich Isles (filed Dec. 30, 2011; PN rel. Jan 10,2012; 
        comments received Feb. 9, 2012; Replies received Feb. 24, 2012; 
        1st data request letter released Mar. 13, 2012; 2nd data 
        request letter released June 6, 2012)

    The Commission has received waiver requests from three carriers 
serving Tribal Lands: Sandwich Isles, Adak and Windy City Cellular. 
Sandwich Isles has requested a waiver of Section 54.302 of the 
Commission's rules, which establishes a total limit on high cost 
universal service support of $250 per line per month. The company 
received $892.15 per line per month in 2011, or more than 3.5 times the 
overall $250 per line cap set unanimously by the Commission in the USF 
order.
    The Wireline Competition Bureau (WCB) issued a Public Notice on the 
carrier's petition on January 20, 2012. Comments were due on February 
9, with replies due on February 24, 2012. At that point the shot clock 
was stopped. WCB issued a letter seeking initial information on March 
13, 2012; and followed up requesting additional information on June 6, 
2012, noting concerns about the carrier's projected revenues and 
expenses. Staff is currently reviewing that additional information 
provided by the carrier. The redacted version of the follow-up letter 
to Sandwich Isles is available at: http://fjallfoss.fcc.gov/
edocs_public/attachmatch/DA-12-893A1.pdf. As noted above, interim 
relief has already been granted to Windy City Cellular (the wireless 
affiliate of Adak) for six months or until the waiver petition for Adak 
is resolved. The Adak petition remains under consideration and, unless 
the Wireline and Wireless Bureaus need additional information from the 
carrier to resolve the waiver petition, the 45 day shot clock expires 
on August 30, 2012.

    Question 2. How will companies be assured that if they apply for a 
waiver, your staff will move faster than they have previously?
    Answer. In all cases, the Commission's bureaus are reviewing each 
waiver petition individually and will make final decisions as 
expeditiously as possible. A thorough review is needed to protect 
consumers and small businesses that pay into the fund.

    Question 3. Does the Commission have enough staff to handle the 
amount of work needed to quickly comb through the massive amount of 
data to respond quickly to the waiver requests?
    Answer. Implementing the Commission's comprehensive overhaul of USF 
is an enormous effort, and the FCC staff is working hard on it. The 
Commission has released a total of 20 orders to date implementing the 
USF-ICC Transformation Order. As I noted at our appropriations hearings 
this year, our staff level is at a ten-year low, but we have requested 
funding that would ensure that we can successfully carry out our core 
functions, including implementing and administering the USF program 
consistent with Congress' directives under Section 254.
Question on loss of voice service requirement for waivers
    Question 4. The stated purpose of the FCC's reforms is to modernize 
the USF program to enable access to broadband. Yet, it is my 
understanding that these waivers can only be obtained if customers 
would lose voice service in an area served by a small company.

   Is my understanding correct that customers could lose access 
        to their fixed broadband and yet the service provider would not 
        qualify for a waiver as long as those customers still get voice 
        service?

     If my understanding is incorrect and a provider could 
            in fact get a waiver to avoid loss of fixed broadband for 
            customers, please identify the rule or provision of the 
            Order contradicts this understanding.

     If my understanding is correct, please explain why you 
            think this waiver structure will help to promote universal 
            access to broadband.

   Is my understanding correct that customers could see 
        significant increases in the prices they pay for voice or 
        broadband service, and yet the service provider would not 
        qualify for a waiver as long as those customers can still get 
        voice service?

     If my understanding is incorrect and a provider could 
            in fact get a waiver to avoid significant price increases 
            to consumers on voice or broadband services, please 
            identify the rule or provision of the Order that 
            contradicts this understanding.

     If my understanding is correct, please explain how 
            this complies with the statutory requirement to ensure 
            reasonably comparable rates for services in rural and urban 
            areas.

    Answer. I circulated an order to clarify that waivers can be 
granted to prevent loss of broadband service and to account for rate 
changes. The draft order was temporarily removed from circulation to 
address additional requests raised by stakeholders, but I expect to 
recirculate it for vote shortly.
    Our obligation is to review these issues carefully to ensure 
consumers and small businesses paying into the fund are protected, 
while ensuring consumers do not lose access to service. In 
demonstrating whether a waiver is warranted, the burden of proof rests 
with the petitioner. Unsubstantiated claims that rates will increase 
are not sufficient to justify a request for significant public funding. 
Accordingly, it is incumbent upon carriers to demonstrate that current 
support amounts are actually necessary and rate levels appropriate. It 
is worth noting that many carriers charge very low rates while 
receiving USF support. For example, a July 31, 2012 report from USAC 
recently noted that carriers serving 233 study areas are currently 
charging their customers less than $10 per month while receiving USF 
support.
Impact on carriers with Rural Utilities Service (RUS) Loans
    Question 5. In response to a question by Senator Klobuchar on the 
impact of the FCC's new rules on the RUS loan portfolio, you stated 
that resolving the problem is going to require ``flexibility on the 
FCC's part, the RUS's part, potentially flexibility on Congress's 
part.'' Further, in your response to Senator Klobuchar, you also stated 
that you did not want to ``have RUS loans mean that consumers are 
paying for unjustifiable services for a long time.'' In addition, The 
FCC has repeatedly claimed that most carriers would experience less 
than a ten percent reduction in funding under the FCC's new program as 
compared to the USF program prior to reform. How many carriers with RUS 
loans will experience more than a ten percent reduction in funding 
absent a waiver?
    Answer. RUS administers its loan program and has a better 
understanding of its loan portfolio. Commission staff worked closely 
with RUS throughout the USF reform process to understand their concerns 
and to estimate the potential impact of different reform options on RUS 
borrowers, and we continue to do so. Any carrier who believes they may 
have difficulty in repaying RUS loans as a result of reductions in 
support is free to file a waiver, and one factor the Commission will 
explicitly consider is the ability of a carrier to service outstanding 
debt. In addition, the information that carriers should submit when 
requesting a waiver explicitly includes information regarding 
outstanding loans, including RUS loans.

    Question 6. Please explain specifically what kind of flexibility 
you believe is necessary on the part of the FCC, the RUS, and the 
Congress to ensure that RUS borrowers do not default on their loans.
    Answer. By flexibility, I mean that the waiver process must include 
a data-driven, case-by-case analysis of individual company 
circumstances, while ensuring we are protecting consumers and 
businesses that pay into the fund. As noted above, I support modifying 
the waiver standard to take a loss of broadband service, not just voice 
service, into consideration. In addition, the National Broadband Plan 
recommended that one way to accelerate implementation of USF reforms 
would be for Congress to provide a one-time capital infusion into the 
Universal Service Fund.

    Question 7. As you review the RUS loan portfolio in hindsight, what 
types of services do you consider ``unjustifiable'' and why?
    Answer. The rate of return system has not historically had strong 
accountability measures or good incentives for carriers to control 
costs. In addition, our previous universal service funding mechanism 
gave rate of return carriers control over their own funding spigot and 
incentives to outspend their peers. As we review practices generally 
(not specific to RUS portfolio) a variety of potentially concerning 
practices have come to light. For example: the number of employees and 
operating costs of some companies of similar size and service area are 
often very different, with some carriers having many more employees and 
much higher costs for essentially the same service; some carriers 
receiving very high per-line and total USF support levels are 
simultaneously giving millions in ``capital credits'' to investors; 
some carriers have set up a web of family-owned affiliates and have 
essentially contracted with family-owned businesses at costs much 
higher than they used to pay non-family-owned companies for the same 
service.

    Question 8. As noted in the recently filed Notice of Oral Ex Parte 
Contact by the Administrator of the Rural Utilities Service, RUS loans 
were issued under the rules that were current at the time of the loan. 
Please explain the basis on which the FCC believes it is justified in 
changing rules mid-stream in a manner that could disrupt the ability of 
borrows to repay RUS loans and potentially trigger major budgetary 
problem for the Federal Government.
    Answer. The USF-ICC benchmark reforms adopted in the Order only 
affect support going forward. In recognition of business realities and 
the need for carriers to have time to adjust, the Commission is phasing 
in changes gradually over 18 months. Commission staff has an ongoing 
dialog with RUS and meet with them regularly to understand their 
lending practices and their overall loan portfolio, and to understand 
the potential impact of our actions on their borrowers, including what 
tools they have to address troubled loans. We said we would consider 
RUS debt in evaluating waiver petitions and we have been doing just 
that as Commission staff works through the small number of waiver 
petitions that have been filed. To expedite review of waivers, the 
Commission delegated authority to the Wireline Competition Bureau and 
Wireless Competition Bureau. The Order requires the Bureaus to initiate 
the process for public comment within 45 days of receipt of a petition, 
and they have consistently done so. To date, fewer than ten companies 
have filed a waiver. Of those, one has been withdrawn, and two have 
already been resolved.
    I would also like to address the misimpression that we have changed 
rules midstream and that parties could not have anticipated changes. 
All stakeholders have been on notice that comprehensive reform was 
coming to the universal service program for at least the last decade. 
In 2001 when the Commission, under then-Chairman Powell, adopted a 
reform order in response to a proposal by the Rural Task Force (RTF), 
which included RUS, the Commission agreed that the methodology was to 
be only temporary (5 years) while a more comprehensive reform was 
developed. (FCC 01-157, paras. 165-177). In 2006, the Commission voted 
to temporarily extend that mechanism, stating that the rules would 
remain in effect ``until the Commission adopts new high-cost rules for 
rural carriers.'' (FCC 06-69, para. 2). That decision was followed by 
additional notices seeking comment on reform in 2008 and in 2010, which 
ultimately led to the Order we adopted in 2011. Arguments that rules 
were changed without adequate notice ignores the procedural history of 
the reforms we have undertaken. Coupled with the transition periods 
provided to carriers and the waiver process to address unique 
circumstances, I firmly believe the reforms the Commission unanimously 
adopted strikes the right balance between the needs of rural carriers 
for support and the need to protect consumers and small businesses that 
pay into the fund. It is worth noting that the overwhelming majority of 
rural carriers (more than 700 of the approximately 800 rural carriers 
that receive USF support) are not affected by the caps or see slight 
increases in support.
April 25, 2012 Benchmark Order
    Question 9. The FCC's April 25, 2012 Order set benchmarks for 
reasonable capital and operating expenses based on comparisons among 
similarly situated rate-of-return carriers. According to the FCC, as a 
result of the Benchmark order 500 carriers will see increases in High 
Cost Loop Support (HCLS) and 100 carriers will have expenses limited to 
bring costs down to levels of similarly situated peers.
    Pleases explain the FCC's process in determining the appropriate 
similarly situated rate of return carriers to be used in determining 
reasonable capital and operating expenses for rate of return carriers 
in Hawaii and Alaska.
    Answer. In determining reasonable reimbursements for capital and 
operating expenses, the limits take into account what the actual costs 
are of rate of return companies, and compares those companies with one 
another on various dimensions--companies with a similar number of 
loops, companies with similar soil, companies with similar climate, 
companies with similar levels of under-appreciated plant--and only 
limits those companies that are extreme outliers compared to their 
peers. The purpose of benchmarking carriers to their peers is to 
identify the outliers and to determine the causes for their higher 
support amounts. The Bureau's Order identifies and limits only those 
companies whose costs are higher than 90 out of 100 companies operating 
under similar conditions. Under the methodology adopted by the Bureau, 
over 700 carriers face no limits this year and will see increases or no 
change in their high cost loop support.
    The Order included Alaska-specific considerations to ensure 
carriers compared to their peers within the state, including a specific 
Alaska variable. Sandwich Isles Communications is the only rate of 
return carrier operating in Hawaii. As noted above, that carrier has 
requested a waiver of section 54.302 of the Commission's rules, which 
establishes a total limit on high cost universal service support of 
$250 per line per month. The company received $892.15 per line per 
month in 2011, or more than 3.5 times the overall $250 per line cap set 
unanimously by the Commission in the USF order. Staff is currently 
reviewing that filing.

    Question 10. Of the approximately 100 carriers that will see 
decreases in HCLS, how many have outstanding RUS loans?
    Answer. Our understanding from information provided by RUS is that 
approximately 35 of the affected carriers have RUS loans. However, RUS 
may be in a better position to answer this based on their internal 
analysis.
Petitions for Reconsideration and Further Proceedings
    Question 11. I share the concerns raised by Senators Thune and 
Begich about the importance of fully understanding the implications of 
the reforms and reductions adopted in the USF order prior to 
implementation. To this end, please provide a summary of the status of 
the outstanding petitions for reconsideration including the primary 
issues presented for reconsideration and the manner in which the FCC 
has responded to those petitions.
    Answer. In response to the USF/ICC Transformation Order, twenty-
four petitions for reconsideration or clarification were filed. These 
petitions sought reconsideration or clarification across an array of 
issues involving both the Commission's universal service and 
intercarrier compensation reforms. Consistent with standard practice, 
public comment was sought on these petitions.
    To date, the Commission has issued four reconsideration orders 
addressing aspects of eleven different petitions for reconsideration or 
clarification. In addition, the Wireline Competition Bureau and 
Wireless Telecommunications Bureau have issued four orders that clarify 
the rules adopted in the USF/ICC Transformation Order. The Bureaus also 
have issued multiple orders to implement the reforms set forth in the 
USF/ICC Transformation Order across a range of topics, from this year's 
interstate tariff filing to benchmarks for high cost loop support. 
Finally, the Bureaus have taken a number of other actions in response 
to waiver and other requests from parties in connection with the 
proceeding.
Incentive Auctions
    Question 12. With respect to incentive auctions designed to allow 
television broadcasters the ability to sell all or a portion of their 
spectrum for mobile uses, what steps is the FCC taking to work with 
broadcasters to ensure stations that do not wish to participate are 
able to offer robust services now and into the future?
    Answer. The amount of spectrum cleared through the incentive 
auctions will depend on the voluntary participation of broadcasters. 
The Commission is educating broadcasters on the options that are 
available to them, as well as encouraging their participation. The 
Commission held a TV Broadcaster Relocation Fund Workshop to focus on 
the design of the Commission's program to reimburse some broadcasters 
for the relocation costs they will likely incur as a result of the 
channel reassignments in connection with repacking as authorized by the 
Act. While it is not expected that all broadcasters will participate, 
voluntary incentive auctions present a compelling economic opportunity 
for many broadcasters. The Commission will reach out to, and work with, 
all affected parties in a process that is transparent and fair.
Verizon-Cable Transaction
    Question 13. The FCC is currently reviewing the Verizon--Cable 
transaction. The transaction involves not only spectrum transfer but 
also commercial agreements between the parties with potentially far-
reaching impact. Is the agency reviewing the impact of the entire 
transaction--including the impact of the commercial agreements--upon 
consumers, prices, competition, network investment, and jobs? If so, do 
you anticipate that the agency will release a final Order that 
addresses the issues raised by the commercial agreements at the same 
time that it issues its decision on the spectrum transfer?

    Question 13a. Since the commercial agreements between the parties 
are confidential, the FCC review of this transaction to ensure that it 
serves the public interest takes on special import. Can we expect that 
the FCC will review this transaction with the same rigor and vigilance 
that it used in the review of the AT&T/T-Mobile proposed merger?
    Answer. The FCC recently completed its review of the Verizon 
Wireless-SpectrumCo and related transactions, which was rigorous and 
thorough. As part of that review, the Commission reviewed and worked to 
ensure significant changes were made to the commercial agreements.
Low Power Television
    Question 14. In your recently released Report and Order, the 
Commission states with regard to low power TV stations the following:

        ``Because we license low power television stations and TV 
        translators on a secondary interference basis, they create no 
        impediment to repacking as we need not protect these facilities 
        in our repacking plan. For that reason, relinquishment of 
        spectrum by these licensees through channel sharing 
        arrangements will not aid the band clearing or relocation 
        process--our immediate goal in this proceeding.''

    If the Commission does not afford protection to low power TV in its 
repacking plan, should low power licensees be afforded spectrum rights 
similar to those of many other licensees such as allowing licensees 
more technical freedom and greater spectrum flexibility?
    Answer. I recognize and appreciate the important the news, 
information, and programming that LPTV stations provide to their 
audiences. I have instructed Commission staff to continue to work with 
the LPTV community as we implement the Middle Class Tax Relief and Job 
Creation Act of 2012. As you know, LPTV stations always have been 
secondary services to full power TV stations, and Congress did not 
provide additional protections for LPTV stations in the Middle Class 
Tax Relief and Job Creation Act of 2012.

    Question 14a. What is the FCC's plan for Class A stations going 
forward?
    Answer. Class A stations have enhanced spectrum rights, and those 
Class A stations that continue to meet license requirements will have 
the opportunity to participate in the incentive auction process.
Media Ownership by Women and People of Color
    Question 15. Are you satisfied with the level of media ownership by 
women and people of color today? If not, I would appreciate your 
suggestions on how media ownership by women and people of color can be 
improved. What role can the FCC play to encourage greater media 
ownership opportunities for women and people of color?
    Answer. I believe that the FCC must ensure that the communications 
field is competitive, generates widespread opportunities, and is open 
to new ideas from all sources. The Commission currently is evaluating 
our diversity policies as part of the Quadrennial Media Ownership rule 
review. Additionally, in an effort to better understand how to best 
move forward in this area, the Office of Communications Business 
Opportunities is actively reviewing the state of the market as it 
prepares the Commission's 2012 Section 257 Report to Congress. Finally, 
over the past several years, the Commission has implemented 
recommendations from the Advisory Committee on Diversity for 
Communications in the Digital Age in order to enhance and increase 
opportunities and participation in the broadcast industry by 
underrepresented groups.
Spectrum Swaps
    Question 16. Some industry representatives as well as a few Members 
of Congress have suggested that spectrum swaps are a direct and faster 
way to increase competition in the wireless broadband market. Do you 
agree with this suggestion? What efforts are being taken or can be 
taken by the FCC to explore spectrum swaps as a way to increase 
competition in the wireless broadband market?
    Answer. There are currently no proposals or proceedings pending 
before the Commission on spectrum swaps. Should any proposals come 
forward, we will give them full consideration while coordinating with 
all interested stakeholders.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. John F. Kerry to 
                        Hon. Julius Genachowski
Updating the Law
    Question 1. The FCC has a wireless bureau, a wireline bureau, and a 
media bureau. Given that all three operate in a broadband world, should 
we have a broadband bureau at the agency that either incorporates these 
three separate bureaus or helps us understand the state of broadband 
competition and define and eliminate duplicative bureau functions?
    Answer. During my time as Chairman, I have focused the FCC on 
broadband, including through major initiatives to advance wired and 
wireless broadband deployment and adoption. Every FCC bureau--including 
the wireline, wireless, and media bureaus--is working to unleash the 
opportunities of broadband for our country. This work often involves 
collaboration across bureaus, as with the development of the National 
Broadband Plan, last year's landmark reform of the Universal Service 
Fund, and our ongoing implementation of voluntary incentive auctions.

    Question 2. The 1992 Act is 20 years old this year, and the 1996 
Act is entering its late teens. Should we update these laws and if so, 
using what set of principles?
    Answer. If Congress chooses to revisit the Cable Act of 1992 or the 
Telecommunications Act of 1996, the Commission stands ready to offer 
whatever assistance it can. Over the past few years, Congress has made 
significant changes to the communications laws, including through 
enactment of The American Recovery and Reinvestment Act, The Twenty-
First Communications and Video Accessibility Act, and The Middle Class 
Tax Relief and Jobs Creation Act. The FCC is focused on carrying out 
its important responsibilities under the existing communications laws 
to unleash the opportunities of broadband for our country, including by 
promoting broadband-related innovation, investment, and competition and 
protecting and empowering consumers.
Spectrum
    Question 3. Cisco's U.S. mobile data forecast projects that the 
volume of data traffic on mobile service provider networks will 
increase 16 times from 2011 to 2016. With that kind of demand for space 
in our airwaves for wireless broadband, the Commission should be making 
every effort to make as much existing spectrum as usable as possible 
quickly. What are the prospects for Federal and private users to share 
the spectrum that agencies currently hold without disrupting vital 
public services and what can we do to speed up the process?
    Answer. Meaningful spectrum sharing among government and commercial 
users is a key element of the Commission's ``all of the above'' 
approach to unleashing more spectrum for mobile broadband and 
increasing the efficiency of spectrum use, as reflected in our Mobile 
Action Plan. The Commission recently approved a proposal from T-Mobile, 
working with the National Telecommunications and Information 
Administration (NTIA), to test commercial-government LTE sharing in the 
1755-1780 MHz band. This test could allow us to pair that band with 
existing (AWS-3) mobile broadband spectrum at 2155-2180 MHz to enhance 
its value and usefulness prior to auctioning AWS-3 within the next 
three years, as required by the Middle Class Tax Relief Act of 2012. 
The Commission is also preparing a rulemaking to enable commercial use 
of the 3.5-GHz band while protecting government users, which could free 
up 100 MHz of spectrum for wireless broadband. Congress's continued 
support for commercial-government spectrum sharing will be important to 
the success of these efforts.

    Question 4. As space on the airwaves becomes increasingly 
congested, how will the FCC better arbitrate interference disputes 
between neighboring services in the future?
    Answer. The Commission believes that the efficient use of spectrum 
will increasingly depend on the effective control and management of 
interference between neighboring services. The Commission traditionally 
addresses interference issues by setting parameters for transmitters to 
ensure that they do not emit excessive energy into frequency bands used 
by other services. The Commission then relies on equipment 
manufacturers, service providers, and other stakeholders to ensure 
their receivers comply with those technical parameters. Challenges 
faced by recent efforts to eliminate regulatory restrictions on use of 
spectrum for mobile broadband have highlighted the importance of 
receiver performance in maximizing the overall efficiency of spectrum 
use. The Commission conducted a successful workshop this past March to 
discuss the importance of addressing receiver performance in ensuring 
efficient use of the spectrum and better defining interference 
protection rights. We have tasked our Technological Advisory Council to 
make recommendations in the near future as to how the Commission might 
approach this issue.

    Question 5. Can you talk about the priority that the Commission 
places (or that you will place) on ensuring that there is an 
appropriate mix of spectrum coming to market both for auctions and for 
such unlicensed use?
    Answer. Unleashing more spectrum for broadband, including both 
licensed and unlicensed use, is and will continue to be one of the 
Commission's highest priorities. It is part of the Commission's Mobile 
Action Plan, which focuses on five main areas: unleashing new spectrum, 
removing barriers to broadband infrastructure build-out, driving 
greater efficiency in networks and devices, promoting competition, and 
empowering consumers.
Privacy
    Question 6. The FCC recently concluded an investigation into the 
Google Wi-Fi data collection incident where the agency found that 
Google's actions did not violate section 705 of the Communications Act 
due to the fact that the incident occurred on unencrypted Wi-Fi, rather 
than a secured network. In light of the result of this investigation, 
do you believe that Congress should update section 705 to account for 
this gap in the FCC's wiretap provisions?
    Answer. Congress has directed us to protect the privacy of 
consumers when they use communications networks and services. The FCC 
has extensive experience and a long record of protecting this 
information. The FCC will continue to implement its statutory mandates, 
including section 705, and stands ready to work with Congress should it 
choose to address gaps or ambiguities in the statute.
Interoperability
    Question 7. Interoperability of consumer devices within a spectrum 
band helps promote competition in wireless services. Since the early 
1980s, the Commission has adopted rules or sent strong messages that it 
expects wireless service licensees to offer consumers equipment that 
can operate over the entire range of an allocated spectrum band. But 
interoperability does not yet exist in perhaps the most valuable 
spectrum bands the FCC has ever allocated--the lower 700 MHz band. In 
March, the FCC initiated a proceeding to promote interoperability in 
this band. I noticed that the NPRM would prefer that the industry 
propose a voluntary solution, as would I, but you also indicated an 
interest in moving to rules if that voluntary approach is unsuccessful.
    Do you believe interoperability of devices within this band 
matters, what is the FCC staff doing to monitor the efforts of the 
industry at arriving at a voluntary solution for the lower 700 MHz 
band, and how much more time do you believe the industry should have 
before you would push to conclude this proceeding and adopt rules if it 
appears that an industry solution is not possible?
    Answer. Rural providers are facing hurdles utilizing 700 MHz 
spectrum holding where 4G is being deployed. We are seeking comment on 
interference risks and possible solutions. The comment cycle in this 
proceeding closed on July 16, and staff is currently evaluating the 
record. At this time it would be premature to predict what action the 
Commission may take and when, but staff is working expeditiously to 
address this critical issue.
Public Broadcasting
    Question 8. As a long-time supporter of public broadcasting, I 
believe that it plays a special and necessary role in our media 
landscape. I was pleased to see that on November 4, 2011 the FCC 
Consumer Advisory Committee adopted a recommendation that the FCC work 
with the Administration and Congress to support continued Federal 
funding of the Corporation for Public Broadcasting and local public 
broadcast stations, including those providing service to rural, tribal, 
native, and disability communities.
    Do you support this recommendation from the FCC Consumer Advisory 
Committee and can you share your views on the unique and necessary role 
that public broadcasting plays in our media landscape?
    Answer. I strongly support continued Federal funding for the 
Corporation for Public Broadcasting and local public broadcast 
stations. They have long served the American public by providing high 
quality and innovative educational, cultural, children's and news 
programming to their local communities. The FCC stands ready to work 
with the Administration and Congress to ensure the public broadcasters 
continue to have the opportunity to flourish.
The U.N. and International Negotiations on Internet Governance
    Question 9. As former Congressman Boucher recently explained, ``The 
best way to understand the current system of global Internet governance 
is as a hub-and-spoke relationship. At the hub, a loose confederation 
of standards-setting bodies ensures the Internet's continued stability 
and functionality. Little, if any, regulation occurs at the hub. This 
arrangement leaves tremendous leeway for the sovereign governments--the 
``spokes''--to regulate the Internet within their borders.''
    And that system has worked relatively well, with some unfortunate 
outliers trying to control their population's access to information. 
Yet, there is pressure abroad for a new U.N. agency to assert 
international governmental control over the Internet. That pressure is 
coming from countries who wish to impose new tolls on service and 
countries that fear the power of open discourse on the Internet.
    In a recent blog post, NTIA Administrator Strickling wrote about 
these proposals from China and others, ``This is contrary to President 
Obama's vision of an Internet that is interoperable the world over, and 
the United States will vigorously oppose such barriers.'' And I know 
that this is a priority for Ambassador Philip Verveer and the State 
Department as well. Do all of you share the Administration's point of 
view?
    Answer. Yes. I have been very concerned by indications over the 
past year that some countries would attempt to use the ITU World 
Conference on International Telecommunications (WCIT) to give the ITU 
authority over Internet governance, undermining the long-standing 
multi-stakeholder governance model. While the existing International 
Telecommunications Regulations (ITRs) have been accepted as a framework 
for negotiations without any pending proposals related to traditional 
Internet governance issues like Internet naming and numbering, critical 
Internet public policy issues will be discussed at the WCIT.
    Of particular concern are proposals that would change Internet 
protocol interconnection and charging mechanisms, as well as limit the 
ability of companies to manage their traffic by requiring them to 
provide calling party number identification information so that 
countries can track where traffic originates. In addition, some 
countries have proposed adding cybersecurity provisions to the ITRs.
    As the U.S. Government agency with primary responsibility for 
implementing the 1988 ITRs, the FCC plays a key role in domestic and 
international preparations for the WCIT. The FCC is working in the U.S. 
delegation on WCIT to vigorously oppose any expansion of the ITRs to 
issues related to Internet governance or proposals to abandon the 
multi-stakeholder model. The FCC is actively participating in U.S. 
delegations on WCIT, where we continue to reinforce the bipartisan U.S. 
Government position to maintain a free and open Internet that is not 
encumbered by detailed ITU regulations that would jeopardize innovation 
and the free flow of information. Moreover, we are working closely with 
the State Department and others to coordinate with like-minded 
countries to form a strong coalition that can work together to develop 
a high level, technology neutral treaty and to resist any efforts for 
ITU regulation where none is needed.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Bill Nelson to 
                        Hon. Julius Genachowski
    Question 1. According to the National Hurricane Center of NOAA, the 
lack of awareness and preparation compound the impact of all major 
hurricanes and other disasters. As we approach the start of Atlantic 
hurricane season on June 1st, can you detail exactly what the 
Commission is doing to ensure enhanced warnings for citizens living in 
the path of deadly hurricanes and other natural disasters? How are 
traditional media and social media outlets assisting with these 
efforts?
    Answer. Since its inception, the Commission has been charged by 
Congress to promote safety of life and property. We have fulfilled that 
obligation by pursuing a variety of public safety emergency 
communications policies, including 911 and E911; emergency alerting 
(Emergency Alert System, Commercial Mobile Alert System); operability 
and interoperability of public safety communications; communications 
infrastructure protection and disaster response (Disaster Information 
Reporting System, Network Outage Reporting System, Special Temporary 
Authority); and network security and reliability. During a major public 
emergency, we work with our Federal partners and the communications 
sector to detect communications outages and rapidly restore critical 
communications systems and services.
    Integrating social media such as Twitter and Facebook into 
traditional public safety communications media can promote the flow of 
information before, during and after disasters. The FCC uses new media 
outlets, including our website, Twitter and Facebook, to provide 
important information to consumers when disasters occur. The Commission 
has recommended the use of social media for non-emergency 
communications during disasters instead of making non-essential voice 
calls, which can create congestion on voice networks. Social media also 
provides another outlet for people to let family and friends know they 
are safe.

    Question 2. The cost to the family members of inmates of staying in 
touch with the inmates by telephone is often prohibitive. Studies have 
shown that recidivism is reduced when inmates are able to remain in 
touch with family members during incarceration. In addition, studies 
have shown real benefits to the children of inmates if the children are 
able to remain in touch with their incarcerated parents. The Commission 
has before it a proceeding, Docket No. 09-144, which has the potential 
to provide competitive benefits, while maintaining security, through 
the mere enforcement of existing Commission policies. However, the 
docket in this proceeding has been open for some time. Is there any 
additional information the Commission needs to take action in this 
proceeding, and when can any such action be expected?
    Answer. The Commission's responsibility to ensure that inmate 
calling services are available at reasonable rates is an important one. 
The multiple, competing petitions before the Commission regarding this 
matter raise complex factual questions and issues. Commission staff is 
currently reviewing the record that has been compiled on these issues, 
including recent filings by prison payphone operators, civil liberties 
groups, and others, and I expect they will soon develop a 
recommendation regarding how best to proceed.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                        Hon. Julius Genachowski
Proposed Media Ownership Rule
    Question 1. Chairman Genachowski, what are the key differences 
between your proposed media cross ownership rule and the media cross 
ownership rule put forward by then-Chairman Martin and voted on by the 
full Commission in December 2007?
    Answer. Court cases obviously impact how we proceed in this area, 
and the Commission must make sure its rules are sustainable to the 
Third Circuit. The 2006 proceeding was a starting point for our current 
review, and I believe the recommendations in the NPRM continue to 
protect the core goals of localism, diversity of ownership and 
programming, but also take the realities of the current marketplace 
into consideration.

    Question 1a. Do your proposed media ownership rules address all of 
the issues identified by the Third Circuit Court of Appeals in its 
decision in Prometheus versus the FCC, including those regarding 
ownership of media outlets by women and minorities?
    Answer. Yes.

    Question 1b. Do you believe that shared services agreements are 
being used by some as a means to get around the spirit if not the 
letter of the Commission's media ownership rules? If so, how will you 
address this problem?
    Answer. The Commission sought comment on current attribution 
issues, included shared services agreements, in the pending Quadrennial 
Review. Staff is currently reviewing the record in that proceeding.
Verizon/SpectrumCo. Agreement
    Question 2. Chairman Genachowski, I opposed the Comcast-NBCU merger 
and I was glad that both the Commission and Department of Justice 
effectively rejected AT&T's proposed acquisition of T-Mobile. In 
general, I am very concerned about the concentration of economic power 
into the hands of a few. I know that the Commission and the DOJ are 
reviewing the proposed Verizon--SpectrumCo agreement. I realize that 
you can't discuss the substance of the ongoing review.
    One of things I found helpful in thinking through the ramifications 
of the two deals I cited above were the various filings made by 
interested parties at the Commission and the reply comments.
    Given the potential far-reaching impact of a Joint Operating 
Agreement (JOA) between Verizon and SpectrumCo, it is important that 
many of the key stakeholders and interested parties who may be impacted 
by the proposal be able to offer informed comments to the Commission in 
order to help it make a more informed decision. I know that I have a 
number of questions about the level of integration between Verizon and 
SpectrumCo under its proposed JOA, and ultimately whether the proposed 
JOA is anti-competitive.
    My understanding is that what documents there are, are heavily 
redacted because they have been declared confidential. It makes it 
difficult for these stakeholders and interested parties to express 
their concerns, or have their concerns allayed because they can't get 
access to the details.
    What is the current process for interested parties to gain access 
to the documents filed by Verizon and Spectrum Co. regarding its Joint 
Operating Agreement or related agreements?
    Answer. Over the years, the Commission has developed what is now a 
fairly standardized process for balancing the need of both applicants 
and other stakeholders to protect their confidential business 
information with the need for commenters to have access to sufficient 
information to participate effectively in Commission proceedings. That 
process involves two general levels of protective orders--one for 
``confidential'' information and one for ``highly confidential'' 
information (limited to specified categories approved in advance by the 
Commission staff)--which allow representatives of parties to a 
proceeding to have access to the information under specified conditions 
for the purpose of the proceeding only. Both levels of orders were 
issued in the Verizon/SpectrumCo proceeding. The two orders were issued 
on January 17, 2012, and are available at the following link: http://
transition.fcc.gov/transaction/verizonwireless-spectrumcocox.html.

    Question 2a. Overall, do you believe that the transparency 
surrounding access to the details of the proposed Verizon--SpectrumCo 
deal to date for interested parties to comment has been adequate? Are 
there things that can be done to improve it?
    Answer. I am proud of the process Commission staff ran to review 
the complex transactions at issue in this proceeding. The process 
enabled commenters to access sufficient information to participate 
effectively. As stated above, this is a standardized process for 
balancing the need of both applicants and other stakeholders to protect 
their confidential business information against the need for commenters 
to have access to sufficient information to participate effectively.

    Question 2b.You decided to bifurcate the Commission's review. The 
wireless division is evaluating the spectrum component. The wireless 
and enforcement divisions are evaluating the Joint Operating Agreement. 
Are these evaluations going to remain on separate tracks or will the 
Commission ultimately consider the deal as one?
    Answer. The Order the Commission adopted on August [21], 2012 after 
completing its review of the transaction addressed both the spectrum 
transfers and the commercial agreements.
Use of Broadcast White Spaces for Unlicensed Broadband (Super Wi-Fi)
    Question 3. Chairman Genachowski, what is the current status of the 
FCC's broadcast white space proceedings and pilot projects?
    Answer. Last year the United States became the first country to 
free up white spaces in the TV band for unlicensed use. This policy 
innovation holds the promise of new value-creating breakthroughs on the 
order of magnitude of Wi-Fi. The Commission is now in the 
implementation stage and we have approved database managers, devices, 
and deployments. We are finalizing the process for registering wireless 
microphones for protection in the database. Also, the Commission is 
considering whether we can use similar methods to provide unlicensed 
access to other spectrum bands.

    Question 3a. Given the challenges with freeing up new spectrum for 
licensed use, do you see unlicensed spectrum (across several bands) as 
playing an increasingly important role in overall spectrum policy?
    Answer. Freeing up more spectrum for unlicensed use is a key 
component of the Commission's spectrum policy, which we continue to 
pursue as part of our holistic approach to improving spectrum 
management and efficiency.

    Question 3b. Are you concerned that the ``The Middle Class Tax 
Relief and Job Creation Act of 2012'' may effectively block the 
creation of a super Wi-Fi broadband network operating in broadcast 
white spaces for mobile broadband as envisioned by the Commission?

    Question 3c. How does the Commission plan to manage these factors 
to ensure that super Wi-Fi over the broadcast white spaces reaches its 
potential?
    Answer. The availability of white spaces in the broadcast 
television spectrum nationwide continues to be a high priority for me.
    While the Commission is still working on our Notice of Proposed 
Rulemaking to implement the Middle Class Tax Relief and Job Creation 
Act of 2012, staff is exploring ways to enable the use of additional 
spectrum for white spaces. Consistent with the Act, the plan is to seek 
comment on the potential use of white space devices in the new guard 
bands called for by the Act, as well as to preserve existing white 
space uses on unused television channels and in other interstitial 
spectrum.
    Nationwide contiguous bands of spectrum are desirable to help 
ensure that innovation in this market can continue to blossom and 
consumers benefit from this important technology. One of the hallmarks 
of white space technology is its flexibility, however, and the 
Commission's rules permitting such operations were specifically 
designed to allow opportunistic uses in spectrum that may vary from 
location to location and time to time. I continue to believe enhanced 
use of underutilized spectrum should be encouraged by such innovative 
technologies.
December's International Telecommunications Union (ITU) Conference in 
        Dubai
    Question 4. Chairman Genachowski, as you know, this December in 
Dubai there is a conference hosted by the United Nation's International 
Telecommunications Union (ITU) that will look at revising International 
Telecommunications Regulations. The last revision to these regulations 
occurred in 1988. Much has changed with respect to information and 
communications technologies since then. I know the Commission is 
supporting the State Department's efforts.

   What are your expectations for the conference?

   What do you think are some of key issues on the table for 
        consideration?

   Much discussion has been about that the ITU will use the 
        forum to try and take greater control of the Internet. There 
        are some new Internet fees being discussed. Should U.S. 
        policymakers be concerned?

    Answer. I have been very concerned by indications over the past 
year that some countries would attempt to use the ITU World Conference 
on International Telecommunications (WCIT) to give the ITU authority 
over Internet governance, undermining the long-standing multi-
stakeholder governance model. While the existing International 
Telecommunications Regulations (ITRs) have been accepted as a framework 
for negotiations without any pending proposals related to traditional 
Internet governance issues like Internet naming and numbering, critical 
Internet public policy issues will be discussed at the WCIT.
    Of particular concern are proposals that would change Internet 
protocol interconnection and charging mechanisms, as well as limit the 
ability of companies to manage their traffic by requiring them to 
provide calling party number identification information so that 
countries can track where traffic originates. In addition, some 
countries have proposed adding cybersecurity provisions to the ITRs.
    As the U.S. Government agency with primary responsibility for 
implementing the 1988 ITRs, the FCC plays a key role in domestic and 
international preparations for the WCIT. The FCC is working in the U.S. 
delegation on WCIT to vigorously oppose any expansion of the ITRs to 
issues related to Internet governance or proposals to abandon the 
multi-stakeholder model. The FCC is actively participating in U.S. 
delegations on WCIT, where we continue to reinforce the bipartisan U.S. 
Government position to maintain a free and open Internet that is not 
encumbered by detailed ITU regulations that would jeopardize innovation 
and the free flow of information. Moreover, we are working closely with 
the State Department and others to coordinate with like-minded 
countries to form a strong coalition that can work together to develop 
a high level, technology neutral treaty and to resist any efforts for 
ITU regulation where none is needed.
``Wi Spy''
    Question 5. Chairman Genachowski, I would like to ask you a few 
questions about what is referred to as Wi-Spy and the Commission's 
Notice of Apparent Liability. As you know, when Google collected data 
from Wi-Fi networks for its Street View project it also collected so-
called payload data, which is the content of the Internet 
communications.
    Paragraph 51 from the un-redacted version of the Notice reads:

        ``For more than two years, Google's Street View cars collected 
        names, addresses, telephone numbers, URLs, passwords, e-mail, 
        text messages, medical records, video and audio files, and 
        other information from Internet users in the United States.''

        ``The record shows that Engineer Doe intended to collect, 
        store, and review payload data for possible use in other Google 
        projects. On at least one occasion, Engineer Doe reviewed 
        payload data to identify frequently visited websites. The 
        Bureau was unable to determine whether Engineer Doe did 
        anything else with the data because he declined to testify.''

        ``The record also shows that Google's supervision of the Wi-Fi 
        data collection project was minimal. In October 2006, Engineer 
        Doe shared the software code and a ``design document'' 
        explaining his plans with other members of the Street View 
        project.''

    Let me stop there.
    My understanding is that the FCC's $25,000 fine was the result of 
the company's deliberate efforts to impede and delay the investigation 
by failing to respond to requests for information material to the 
investigation. Additionally, I believe the company also failed to 
provide certifications and verifications that the company conducted a 
comprehensive search of all materials within its possession.

   Did the FCC only have the legal authority to look at whether 
        Google's actions violated Section 705(a) of the Communications 
        Act, nothing else?

   Do you believe Section 705(a) of the Communications Act 
        doesn't apply to unencrypted communications? What is the basis 
        of that interpretation?

    Answer. Congress has directed us to protect the privacy of 
consumers when they use communications networks and services. The FCC 
has extensive experience and a long record of protecting this 
information.
    The Notice of Apparent Liability cites the relevant sections of the 
Communications Act where the FCC has authority to take action on 
Google's violations. In addition, as stated on the Notice of Apparent 
Liability, there is no Commission precedent addressing the application 
of Section of 705(a) in connection with unencrypted Wi-Fi 
communications.
    The FCC will continue to implement its statutory mandates, 
including section 705, and stands ready to work with Congress should it 
choose to address gaps or ambiguities in the statute.

    Question 5a. The Street View team with personal knowledge of the 
Engineer Doe's project did not submit sworn statements. Did the 
Enforcement Bureau request the Google staff with personal knowledge 
provide sworn statements? Given Google's action to impede and delay the 
investigation would it not have made sense to obtain sworn statements 
from the Street View team? With respect to this and other 
investigations, can the Enforcement Bureau require sworn statements 
from all those with personal information regarding an allegation?
    Answer. As stated in Paragraphs #3 and #45 of the Notice of 
Apparent Liability, the FCC interviewed several individuals who worked 
on the Street View project, and, after several unmet demands, did 
receive compliant declarations from Google on the accuracy and 
completeness of the its submissions. However, Google provided 
incomplete responses to the FCC Letters of Inquiry, which constituted 
willful and repeated violations of Commission orders.

    Question 5b. It was brought to my attention that in November 26, 
2008, Google filed a patent pertaining to the collection and use of 
payload data to derive more specific location information for mobile 
handsets entitled ``Wireless Network-Based Location Approximation'' 
(Application Number: 12/315,079). Were any of the five individuals 
listed as inventors on the patent application part of the Street View 
team interviewed by the Enforcement Bureau? Was the Enforcement Bureau 
aware of the patent application at the time of its investigation? Are 
the details of the patent claims relevant to subject matter of the 
Enforcement Bureau investigation (whether there was a violation of 
Section 705(a) of the Communications Act)? For example, can any of the 
claims in the patent application also be applied to encrypted 
communications?

    Question 5c. Chairman Genachowski, the Notice of Apparent Liability 
states: ``There is not clear precedent for applying Section 705(a) of 
the Communications Act to the Wi-Fi communications at issue here.'' Why 
so? What kind of precedent does the Commission require?

    Question 5d. Increasingly, 3G wireless and 4G broadband service 
providers offload their networks onto encrypted and unencrypted Wi-Fi 
systems as part of their architecture. Does the Commission need to re-
examine Section 705(a) in light of this?
    Answer. As stated above, there is no Commission precedent 
addressing the application of Section of 705(a) in connection with 
unencrypted Wi-Fi communications. The FCC stands ready to work with 
Congress should it choose to address gaps or ambiguities in the Section 
705.
Experimental Licensing
    Question 6. Chairman Genachowski, research institutes and companies 
involved in research and development often depend on ready access to 
spectrum to develop and conduct experiments on new products. The 
Commission has long maintained an experimental licensing program 
specifically for this purpose. In the past, with only few exceptions, 
the Commission routinely authorized experimental spectrum uses without 
requiring experimental license applicants to secure the consent of 
incumbent spectrum users in the same area as long as the experimental 
operations were unlikely to cause harmful interference.
    More recently, the Commission appears to be requiring nearly all 
experimental licensees proposing to operate in numerous spectrum bands 
to coordinate and secure the consent of other spectrum users regardless 
of whether a significant risk is posed of harmful interference. These 
coordination and consent requirements can be very burdensome on 
researchers because incumbent spectrum users often have little 
incentive to cooperate and provide consent. As a result, critically 
important experimental operations are frequently delayed and sometimes 
cancelled due to the inability to secure consents on a timely basis, if 
at all.

   Can you confirm that there has been a change in Commission 
        policy regarding the coordination and consent requirements for 
        experimental licenses? If so, why the change?

   How does the Commission ensure that incumbent spectrum users 
        respond in a timely manner to those entities seeking 
        experimental licenses for temporarily sharing spectrum?

    Answer. The FCC has long included coordination or consent 
requirements in experimental authorizations where appropriate to ensure 
that incumbent licensed operations are not negatively affected by 
experimental operations. In general, this process has worked well to 
enable experimentation and research without disrupting the various 
radio-based services relied on by businesses and the public. The 
Commission is currently seeking public input on and taking a close look 
at our experimental licensing rules and procedures to ensure that the 
process works as efficiently and effectively as possible to promote the 
experimentation and research critical to the development of new 
technologies while protecting existing radio operations. Comments from 
the public have been filed and staff is carefully reviewing them and 
preparing recommendations for next steps.
Low Power FM
    Question 7. Chairman Genachowski, I have been a long-time advocate 
of making more low-power FM (LPFM) stations available to community 
broadcasters. I appreciate the work performed by the Audio Division and 
the Office of Engineering Technology over the years in advancing LPFM 
service for local community broadcasting.
    In particular, in 2006, after I consulted with the Congressional 
Research Service, I suggested to the Audio Division that KYRS-LP in 
Spokane, which faced going off the air due to the encroachment of a 
full service FM station, could relocate to a second adjacent channel to 
a full service FM station if the interference model submitted proved 
out. The FCC agreed and KYRS-LP was saved. The decision was challenged 
at the DC Circuit Court of Appeal and the FCC's actions were upheld.
    President Obama signed the Local Community Radio Act into law on 
January 4, 2011. It was a difficult negotiation. Representative Doyle 
and I, along with our public interest allies, had to make several 
concessions to the National Association of Broadcasters in order to 
undo the prohibition on locating a low-power FM stations on the third 
adjacent channel to a full service FM station.
    Effectively the law overturned the court decision with respect to 
the FCC licensing low-power FM stations for operation on the second 
adjacent channel. The intent of the language was that the FCC should 
only grant waivers in a very limited set of (unspecified) 
circumstances. That is why the bar on the waiver process is set so 
high. With that said though, within those very limited set of 
circumstances, I believe the FCC should have the flexibility to try and 
make waiver work. It should look at things such as directional antennas 
or only take interference into account in populated areas, as is it 
does with translator stations.
    There remains a disparity on some technical matters in how low-
power FM stations are treated with respect to translator stations. One 
issue is use of the contour methodology to determine area of 
interference, another issue is power level. There is no technical 
reason why low-power FM stations cannot operate safely at the same 250-
Watt power level as translator stations do. In fact, the initial 
proposed notice of proposed rulemaking on low-power FM service released 
in the late 1990s envisioned three classes of LPFM stations operating 
at 1000-Watts, 100-Watts, and at 10-Watts. As you know, the Commission 
did not go forward with its proposed 1000-Watt service.
    I want the low-power FM window to be opened as soon as possible. I 
believe that if the LPFM power level is raised to 250 Watts, it will 
lead to a lawsuit leading to further delays in opening the new LPFM 
window. For that reason I can't support it. A likely argument put 
forward will be that the FCC performed insufficient testing on the 
effects of interference from the 250 Watt LPFM service to full service 
FM stations--even though 250 Watt translator service operates today. I 
don't see the same challenges with LPFM power levels between 10 and 100 
Watts.

   Mr. Chairman, what is the status of the low power FM 
        rulemakings?

   What are the remaining steps for a new low-power FM window 
        to open?

   When do you expect this new low-power FM window to open?

    Answer. I agree that LPFM stations are an essential outlet for 
local news and information. Commission staff is working diligently to 
implement the LCRA as quickly as possible. We have adopted two orders 
to implement various sections of the LCRA and are working through the 
remaining issues. We have specifically sought public input on a 
proposal submitted by the Amherst Alliance and the Catholic Radio 
Association to raise the maximum power level for LPFM stations to 250 
watts and whether such an increase is consistent with the LCRA.
    I anticipate that we will be able to announce the dates for the 
LPFM window when the Commission acts on these final LCRA implementation 
issues. The window will open after the Media Bureau substantially 
completes the expedited processing of the frozen FM translator station 
applications. I hope this process will start this fall.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to 
                        Hon. Julius Genachowski
    Question 1. In response to a question on News Corporation, Chairman 
Genachowski responded that the FCC does not comment on the status of 
investigations and Commissioner McDowell concurred. Yet following the 
hearing, the press reported that Commissioner McDowell responded to 
reporters' questions by commenting on the status of an investigation--
saying he was unaware of any investigation into News Corporation. How 
is it possible that neither of you could comment on the status of the 
investigation during the Congressional hearing, yet Commissioner 
McDowell could respond directly and candidly to a reporter immediately 
after the hearing?
    Answer. I defer to Commissioner McDowell to address his comments.

    Question 2. During the hearing I asked you what it takes for the 
FCC to begin an investigation into the misconduct of News Corporation 
and whether that misconduct calls into question News Corporation's 
fitness to hold 27 broadcast licenses in the United States. I was not 
asking you to prejudge the outcome of such an investigation, but rather 
whether the FCC would initiate one. What does it take for the FCC to 
begin an investigation into whether News Corporation is fit to hold its 
broadcast licenses in the United States?
    Answer. The Commission considers allegations of broadcast licensee 
misconduct made in formal complaints and filings made in response to 
applications, and it may investigate possible licensee misconduct on 
its own motion. Inquiries into a licensee's qualifications to hold a 
license focus on the licensee's proclivity to deal truthfully with the 
Commission and to comply with our rules and policies. The Commission 
generally considers non-FCC misconduct only after there is an 
adjudicated finding of wrongdoing, although the Commission retains 
discretion to consider such misconduct prior to adjudication if it is 
so egregious as to shock the conscience. Adjudicated non-FCC misconduct 
is relevant to a licensee's qualifications if it involves fraud before 
another government agency, convictions for felonies and certain other 
crimes, or violations of competition and antitrust laws. The FCC has 
applied these policies faithfully and will continue to do so.

    Question 3. The Congressionally mandated deadline for implementing 
positive train control (PTC) is fast approaching. Amtrak and other 
commuter rail agencies across the country have been prioritizing PTC to 
meet the deadline; however, PTC cannot successfully operate without 
sufficient dedicated spectrum.

   Are there channels being held in the FCC's spectrum 
        inventory that have not yet been licensed to any person or 
        entity and that could be made available to the rail industry 
        for PTC use? If so, what are the FCC's plans for making these 
        channels available for PTC use?

   The FCC issued a Public Notice in May 2011 seeking comment 
        from freight and passenger railroads, equipment manufacturers, 
        railroad associations, and other interested parties on spectrum 
        issues related to the implementation of positive train control 
        (PTC). A substantial number of rail carriers responded seeking 
        FCC assistance to provide additional spectrum expressly for PTC 
        use. What actions, if any, has the FCC taken to accommodate PTC 
        implementation in response to the request for assistance?

    Answer. The Commission recognizes the importance of rail safety and 
the importance of spectrum as a necessary component of implementing PTC 
systems as required by the Rail Safety Improvement Act of 2008 (RSIA). 
The RSIA did not direct the Commission to set aside spectrum for PTC. 
On May 5, 2011, to implement the PTC provisions of the RSIA, the 
Commission issued a public notice seeking comment on the spectrum needs 
of rail carriers. Commission staff has worked with numerous commuter 
rail carriers to educate them about ways to acquire spectrum pursuant 
to the Commission's secondary market policies and to otherwise 
facilitate such transactions. In recent months, secondary market 
transactions have been consummated for some of the most challenging 
markets, including Los Angeles and New York City. Commission staff will 
continue to work with commuter rail carriers to assist them in meeting 
their obligations under the RSIA.

    Question 4. It is my understanding that the FCC is looking into 
allegations that News Corporation deliberately misled the FCC regarding 
its application to renew the license of WWOR in New Jersey. When can we 
expect a finding in this inquiry?
    Answer. Commission staff is reviewing the record developed as part 
of the renewal process for WWOR-TV, including the misrepresentation 
issues alleged against News Corporation, and will consider the 
allegations of misrepresentation in the context of that review. I 
cannot predict when the staff review will be completed.

    Question 5. The NTIA recently issued a report that raised the 
possibility of relocating government users to 2025--2110 MHz, which is 
currently used for Electronic News Gathering (ENG) operations. If this 
spectrum band is used for government users, what will the FCC do to 
ensure ENG operations are not disrupted?
    Answer. NTIA's report estimated that relocating Federal users into 
the 2025-2110 MHz band would cost $18 billion and take at least 10 
years. As a potentially lower-cost, faster alternative to bring 
spectrum to market, NTIA is investigating the possibility of making 
spectrum in the 1755-1850 MHz band available through sharing between 
commercial and Federal entities, and the FCC is working with NTIA on 
that effort. Sharing could obviate the need to relocate Federal users 
into the 2025-2110 ENG band.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Mark Pryor to 
                        Hon. Julius Genachowski
CVAA
    Question 1. The 21st Century Communications and Video Accessibility 
Act (CVAA) was enacted to update the media and communications 
accessibility requirements and expand access to current and emerging 
technologies.
    I have heard concerns about the population of the statutorily 
required advisory committees and the resulting recommendations. 
Consumer and advocacy groups that serve on these committees face 
technical and legal capacity constraints that many businesses do not. 
Will you be cognizant of these inherent limitations and keep them in 
mind as you consider the recommendations put forth by the advisory 
committees?
    Answer. Yes. I believe the VPAAC and its subcommittees have done 
great work together and have prepared strong recommendations for the 
Commission.

    Question 2. It is my understanding that the Commission will soon 
consider the Advanced Communications Services provisions of the CVAA. 
How does the Commission plan to ensure that video conferencing services 
used by consumers who are deaf or hard of hearing are interoperable 
with each other?
    Answer. Our rules require that Video Relay Services (VRS) and 
equipment be fully interoperable, ensuring that eligible users--deaf, 
hard of hearing, deaf-blind, or speech-disabled individuals who 
communicate in sign language--who obtain VRS video conferencing 
services and equipment are able to communicate with one another. The 
Commission has sought comment on how interoperability should work in 
the broader ACS context, including for users who are deaf or hard of 
hearing.
Phone Theft
    Question 3. In March, I sent a letter to Chairman Genachowski 
expressing my concern at what seems to be an epidemic of cell phone 
thefts. It is my understanding that technology within the phone could 
enable a manufacturer or wireless provider to identify a stolen phone 
and prevent reactivation of service. This has significant consumer 
privacy implications. I applaud the Commission's recent initiative to 
mitigate the theft of cell phones but I remain concerned. Would you 
walk me through the steps that the Commission has taken with regard to 
cell phone theft, particularly the establishment of the database and 
how you have addressed the privacy concerns that have been raised?
    Answer. On April 10, 2012, together with Senator Schumer, major 
city police chiefs, and the wireless industry, I announced new 
initiatives by wireless carriers to deter theft and secure customer 
data. The implementation of the initiatives can prevent stolen devices 
from being used by thieves and safeguard the consumer's private 
information contained in the smartphone.

   Implementation of a database to prevent use of stolen 
        smartphones. Customers can call their participating wireless 
        provider and report their wireless devices stolen; their 
        provider will block that device from being used again. This 
        system will be rolling out globally using common databases 
        across carriers over the next 18 months.

   Encourage users to lock their phones with passwords. 
        Smartphone makers will notify and educate users in the most 
        highly visible ways--through messages on the smartphone itself 
        and through ``Quick Start'' user guides--about how to use 
        passwords to deter theft and protect their data.

   Educate users on lock/locate/wipe applications. Wireless 
        providers will directly inform their customers about how to 
        find and use applications that enable customers to lock/locate/
        and wipe smartphones remotely.

   Public education campaign on how to protect your smartphone 
        and consumers. The wireless industry will launch a campaign, 
        with media buys, to educate consumers on how to protect their 
        smartphones and themselves from crime.

   Progress benchmarks and ongoing dialog. The wireless 
        industry will publish quarterly updates and submit them to the 
        FCC on progress on these initiatives.

    We received the first of the required quarterly compliance updates 
on June 29, 2012 and all the parties involved in this important 
initiative have met their obligations to this point. In addition, it 
appears they will meet their targets for the rest of the year. I am 
pleased we were able to address this issue in a constructive way with 
the wireless providers and public safety community so that we can deter 
theft and protect consumers' private data.
Universal Service Fund Reform
    Question 4. I am concerned about the impact of Universal Service 
Fund reform on the continuation of public and private investment in 
broadband deployment. Would you provide more information about the 
rationale for the retroactive component of the regression caps?
    Answer. As with all the USF-ICC reforms, the benchmarks only affect 
support going forward. The actions we have taken were prudent steps to 
ensure that rate of return companies have the right incentives to 
invest efficiently. In recognition of business realities and the need 
for carriers to have time to adjust, the Commission is phasing in 
changes gradually over 18 months. Additionally, the methodology adopted 
now takes account of recent investment. Waivers are available for 
carriers with demonstrated need. The Commission has an open door 
policy--Commission staff takes meetings or call requests from companies 
to address any questions, and has made all aspects of the benchmark 
analysis available for public comment. Interested parties can find a 
significant amount of data and analysis beyond what is included in the 
Benchmarks Order at http://transition.fcc.gov/wcb/iatd/neca.html.

    Question 5. What opportunities are there for carriers to correct 
data in the regression analysis other than submitting corrections to 
study area boundaries?
    Answer. The Commission utilized the best available nationwide data 
to determine the benchmarks, but we also provided a streamlined, 
expedited process to correct any inaccuracies. So far, the Wireline 
Competition Bureau has received two petitions to correct data, and both 
of the petitioners received responses within two weeks of the initial 
filing. A third petition remains under consideration. The FCC also 
launched a process to collect a full set of updated data from companies 
before the benchmarks take full effect. As noted above, Commission 
staff is ready and willing to meet with carriers regarding their 
specific issues. To the extent carriers wish to correct other potential 
non-boundary data errors they are free to do so using the same 
streamlined waiver process available for updated study area boundaries.

    Question 6. Would you explain the Commission's formulation of 
setting benchmarks for High-Cost Loop Support?
    Answer. The High Cost Loop support mechanism benchmarks compare 
carriers to other similarly-situated carriers based on a range of 
criteria. For instance, the benchmarks factor in variables that account 
for certain cost-related factors, such as population density, soil 
type, climate, as well as any recent investment by the company. 
Benchmark analysis identifies and limits reimbursement for those 
companies whose costs are higher than 90 out of 100 companies operating 
under similar conditions--based on the actual cost data, not a 
hypothetical perfectly operated company. In some cases, carriers spend 
almost three times as much per customer as carriers located in a nearly 
identical area.

    Question 7. Some contend that regression analysis will change cost 
recovery revenues from year-to-year which creates uncertainty and may 
negatively impact investment in rural areas. How will the Commission 
balance the need to control costs while encouraging network investment 
in rural areas?
    Answer. Before the Commission unanimously adopted the USF-ICC 
Transformation Order last year, rural carriers faced significant 
uncertainty regarding both USF and ICC revenues, which could fluctuate 
significantly year to year. The benchmarks analysis identifies and 
limits reimbursement for those companies whose costs are higher than 90 
out of 100 companies operating under similar conditions--based on 
actual cost data, not a hypothetical perfectly operated company. 
Because the analysis is new to carriers does not mean that it is 
unpredictable. The original HCLS mechanism was initially unfamiliar, 
too, but over time companies learned how to operate within the confines 
of that system. In response to concerns about the timing of changes to 
the benchmarks, the Wireline Competition Bureau's order earlier this 
year determined that the initial benchmarks should remain in effect 
until 2014. In the interim, the Commission will consider whether 
benchmarks should subsequently be set for multiple years rather than 
reset every year.
700 MHz Spectrum
    Question 8. It is my understanding that the Commission has 
initiated a Notice of Proposed Rulemaking regarding interoperability in 
the lower 700 MHz band. Does the Commission anticipate the completion 
of this proceeding before the end of the year?
    Answer. The comment cycle in this proceeding closed on July 16, and 
staff is engaged in evaluating the record. At this time it would be 
premature to predict what action the Commission may take and when, but 
staff is working to address this critical issue.
Low Power Television
    Question 9. For many years, Class A and Low Power Television 
Service (LPTV) stations have provided valued local, religious, Spanish 
language, and other programming. Communities have come to rely on this 
niche programming that may not otherwise be available. How will the 
Commission work to ensure the viability of Class A and LPTV during its 
implementation of the Middle Class Tax Relief and Job Creation Act? 
What is your position on mandatory channel sharing for LPTV?
    Answer. I fully appreciate and recognize the news, information and 
programming that LPTV stations provide to their communities. I have 
instructed Commission staff to continue to engage with the LPTV 
community as we work thorough implementation of the Middle Class Tax 
Relief and Job Creation Act of 2012. As you know, LPTV stations always 
have been secondary services to full power TV stations, and Congress 
did not provide additional protections for LPTV stations in the Middle 
Class Tax Relief and Job Creation Act of 2012.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Claire McCaskill to 
                        Hon. Julius Genachowski
    Question 1. Last year, I raised concerns with the FCC regarding the 
Universal Service Fund's (USF) Lifeline Program. In response to these 
concerns, the Commission has taken steps to crack down on waste, fraud 
and abuse within the program. The recent announcement that 20,500 
letters will be sent in Missouri to eliminate duplication was welcome 
news. The implementation of a database to help detect and prevent 
duplicates is an important tool, but I remain concerned that further 
action needs to be taken to address fraud.

   Has the FCC conducted its own investigation into possible 
        fraud occurring within the Lifeline program, and if so what 
        were the findings of that investigation?

   Has the Commission examined the marketing agreements 
        providers are using to advertise Lifeline products to 
        consumers?

    Answer. The Commission has taken steps to address waste associated 
with duplicative payments, beginning in 2010 with increased audits and 
a referral to the Joint Board. Beginning in June 2011, the Commission 
began investigating instances of duplicative Lifeline support. As part 
of the process to resolve duplicates, USAC has identified over 700,000 
instances of duplicative support since last year, which is expected to 
provide over $50 million in savings to the Fund. On August 13, 2012, 
USAC issued a Request for Proposal for a vendor to build the National 
Lifeline Accountability Database, which will improve detection and 
prevention of duplicative support going forward.
    The Commission's overhaul of the Lifeline program requires that 
providers (1) disclose to Lifeline consumers the requirements for 
participating in the program and (2) collect annual certifications from 
consumers that they follow those requirements. Carriers may no longer 
tell consumers that proof of eligibility is not required for 
participation in Lifeline.
    The Wireline Competition Bureau is reviewing carriers' marketing 
and advertising material in the course of its review of pending 
compliance plans.

    Question 2. As required by the Commercial Advertisement Loudness 
Mitigation (CALM) Act, the FCC published an order last December 
outlining practices that networks and cable stations must implement by 
this December. I understand these rules have not yet been published in 
the Federal Register, and I have heard little about progress since 
December. Are we on track to see this legislation--strongly supported 
by consumers--fully implemented by the end of the year?
    Answer. Yes. The CALM Act rules were published in the Federal 
Register on July 9, 2012. Media Bureau staff is reviewing issues raised 
in a Petition for Reconsideration filed by the National Cable & 
Telecommunications Association. The rules are on track to be effective 
on December 13, 2012.

    Question 3. In December, the International Telecommunication Union 
(ITU) will convene the World Conference on International 
Telecommunications (WCIT-12) in Dubai to renegotiate the International 
Telecommunication Regulations. A key topic of discussion is expected to 
be whether and how to expand it to cover the Internet.

   To what extent is the FCC involved in policy and technical 
        discussions in advance of the ITU meeting?

   What is the view of the Commission on proposals by other 
        nations to move oversight of critical Internet resources, such 
        as naming and numbering authority, to the ITU or other 
        international body?

    Answer. I have been very concerned by indications over the past 
year that some countries would attempt to use the ITU World Conference 
on International Telecommunications (WCIT) to give the ITU authority 
over Internet governance, undermining the long-standing multi-
stakeholder governance model. While the existing International 
Telecommunications Regulations (ITRs) have been accepted as a framework 
for negotiations without any pending proposals related to traditional 
Internet governance issues like Internet naming and numbering, critical 
Internet public policy issues will be discussed at the WCIT.
    Of particular concern are proposals that would change Internet 
protocol interconnection and charging mechanisms, as well as limit the 
ability of companies to manage their traffic by requiring them to 
provide calling party number identification information so that 
countries can track where traffic originates. In addition, some 
countries have proposed adding cybersecurity provisions to the ITRs.
    As the U.S. Government agency with primary responsibility for 
implementing the 1988 ITRs, the FCC plays a key role in domestic and 
international preparations for the WCIT. The FCC is working in the U.S. 
delegation on WCIT to vigorously oppose any expansion of the ITRs to 
issues related to Internet governance or proposals to abandon the 
multi-stakeholder model. The FCC is actively participating in U.S. 
delegations on WCIT, where we continue to reinforce the bipartisan U.S. 
Government position to maintain a free and open Internet that is not 
encumbered by detailed ITU regulations that would jeopardize innovation 
and the free flow of information. Moreover, we are working closely with 
the State Department and others to coordinate with like-minded 
countries to form a strong coalition that can work together to develop 
a high level, technology neutral treaty and to resist any efforts for 
ITU regulation where none is needed.

    Question 4. American companies have had an historical advantage 
when it comes to the Internet because the innovation that has fueled 
the growth of the Internet started here. Companies were created in an 
environment where unconstrained Internet access provided them with a 
platform to succeed. In this way, America had a ``strategic bandwidth 
advantage'' over other countries. It was perhaps inevitable that this 
advantage would narrow, as broadband speeds have improved around the 
world. Given that context: Is it your view that this ``strategic 
bandwidth advantage'' has led and will continue to lead to job creation 
and greater innovation?
    Answer. Robust broadband infrastructure is crucial to enabling 
innovation and job creation, and to maintaining America's global 
competitiveness. Over the past few years, the U.S. has regained global 
leadership in key areas of the broadband economy, including mobile, 
where we lead in mobile apps and 4G deployment. Since 2009, we have 
gone from less than 20 percent to more than 80 percent of Americans 
living in areas with broadband infrastructure capable of delivering 
100+ megabits per second, putting us near the top of the world in 
deployment of high-speed broadband networks. But, in this flat, 
competitive global economy, we need to keep driving toward faster 
broadband and universal access.

    Question 5. There has been bipartisan consensus in this body to 
encourage deployment and adoption of broadband for the economic and 
social benefits it brings. How do data caps help or hinder in 
accomplishing that goal?
    On the surface, usage-based billing makes sense for consumers but I 
am concerned about the chilling effect data caps could have on future 
growth of Internet video and other content. How do we ensure fair 
billing practices for consumers without creating a system that stifles 
innovation and growth of the Internet?
    Answer. The nation faces not only a broadband deployment gap, but 
also an adoption gap. Nearly \1/3\ of Americans--about 100 million 
people--still haven't adopted broadband in the home.
    Getting these Americans online would deliver dramatic benefits to 
each of these individuals--in the form of access to job listings that 
are exclusively online, children who can research on the Internet to 
help with homework, and deals that can save consumers thousands a year.
    Getting these 100 million Americans online would have tremendous 
benefits for our overall economy. Imagine if we could expand the online 
marketplace by 50 percent and how much that would do to drive sales for 
small businesses and make the U.S. a more attractive market for 
investment.
    When it comes to speed and capacity, an environment of abundance, 
not scarcity, will open the door to new innovation--some we can 
envision and others that we can't even imagine today.
    New business models and new services can be a good thing for 
consumers by driving efficiency, providing more choices, and improving 
affordability by offering lower prices per bit. It can also help ensure 
that lower users aren't subsidizing heavier users.
    At the same time, to drive U.S. leadership in the broadband 
economy, new business models and new services by broadband providers 
should not come at the expense of competition, including from over-the-
top providers, or at the expense of increases in broadband speed and 
monthly capacity.
    I am sure you would acknowledge the FCC's long-standing support of 
low power television and appreciate the success of low power TV since 
the FCC created the service in 1982. During this span of 30 years you 
are no doubt aware that low power TV has developed into an essential 
source of information and entertainment for many diverse communities 
across the country. I think two perfect examples of this dynamic would 
be the audiences who enjoy Spanish-language programming and those who 
enjoy religious programming. Likewise, LPTV has been the an entry point 
for small businesses into the broadcast market and today, many LPTV 
owners are small businessmen who work hard to continue to serve their 
local communities with news and resources aimed at the community.

    Question 6. With this in mind, and also considering the likely end 
to a great deal of low power programming as a result of the repacking, 
how do you expect that this approaching void in unique programming will 
be filled with respect to the core missions of diversity and localism?

   I would ask each of the commissioners, will you support 
        rules that allow LPTV to survive after the repack?

    Answer. I fully appreciate and recognize the news, information and 
programming that LPTV stations provide to their communities. I have 
instructed Commission staff to continue to engage with the LPTV 
community as we work thorough implementation of the Middle Class Tax 
Relief and Job Creation Act of 2012. As you know, LPTV stations always 
have been secondary services to full power TV stations, and Congress 
did not provide additional protections for LPTV stations in the Middle 
Class Tax Relief and Job Creation Act of 2012.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Amy Klobuchar to 
                        Hon. Julius Genachowski
    Question 1. As I brought up in the FCC nominations hearing in 
November, we have a population of television stations currently 
operating on the northern border of Canada, particularly in Lake of the 
Woods County. They applied for channel reallocation after the DTV 
transition but had to wait years to get final approval from the 
Canadian government and the FCC this January.
    Looking ahead to the future, the need for international cooperation 
when it comes to spectrum is important to our translator operators on 
the northern border. Has the Commission begun coordination with our 
Canadian counterparts as it relates to incentive auction legislation 
passed in February?** (Senator Klobuchar asked this question in 
Committee and requested written follow up)
    Answer. Since the passage of the incentive auctions legislation in 
February, Commission staff has met with Industry Canada twice to 
discuss the specifics of the law. As the Canadians work to finalize 
their own digital television transition, we both agree that we should 
maintain open communications to maximize beneficial opportunities in 
our repacking. The Commission will continue to work closely with our 
Canadian counterparts to find satisfactory solutions to whatever 
repacking challenges may occur. Once the Commission releases its Notice 
of Proposed Rulemaking, the International Bureau, in conjunction with 
the State Department, will be in a better position to begin more 
detailed technical coordination discussions with Industry Canada.

    Question 2. I am concerned about the impacts on the RUS loan 
program. Under the Federal Credit Reform Act, Federal agencies are 
prohibited from making large changes to their loan programs without 
congressional approval. Due to the apparent impacts of the USF order on 
RUS loan applicants, it looks like RUS may be facing a situation where 
they may have to make such changes. This creates even more uncertainty 
for rural companies. Can you please indicate your understanding of the 
financial implications under the Federal Credit Reform Act to the 
extent that RUS is required to restructure its debt portfolio as a 
result of the USF and intercarrier compensation reforms? Was this 
understanding factored into the consideration of the reform order?
    Answer. We worked closely with RUS throughout this process to 
understand their portfolio of loans and the potential impact of reforms 
on those loans, and we continue to do so. The agencies share the same 
objectives: preserving voice and broadband service where it exists 
today while extending service to as many of the 19 million Americans 
without broadband as possible, at the lowest total cost to the American 
consumer. Existing RUS loans and future USF dollars both represent 
actual costs to taxpayers and ratepayers; we must work together to 
protect those scarce resources.

    Question 3. I believe of one of the most impressive programs the 
FCC operates is the E-Rate program supporting communications technology 
in schools and libraries. Senator Rockefeller and Senator Snowe led the 
effort in creating a program that truly benefits schools and kids 
around the country. Minnesota has received a total of $344 million 
since the E-Rate program started in 1998. This support has enabled 
schools and libraries across rural Minnesota to have telecommunications 
and broadband service giving students the ability to enhance their 
education. I understand that with the increase in demand from schools 
for broadband support, E-Rate program resources are stretched thin, 
including staff time to review and audit applications. Will you commit 
to keeping the resources for administering the E-Rate program targeted 
at the intended focus of connecting schools and libraries with 
communication technologies?
    Answer. Yes, the Commission's focus is to use the resources of the 
E-Rate program to connect schools and libraries with communication 
technologies. The Commission has worked to modernize the E-Rate program 
to ensure that America's students have the connectivity required to get 
an education to compete in the 21st century economy.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Tom Udall to 
                        Hon. Julius Genachowski
USF Reform and Tribal Communities
    Question 1. Chairman Genachowski, I support reforms to bring the 
universal service fund into the broadband era. Broadband is a wise 
infrastructure investment. Restoring American leadership in broadband 
will help create jobs and provide a platform for economic growth. One 
of the past failures of USF is on Tribal lands. As you know, Native 
American communities have the worst telephone connectivity rates in the 
country. Broadband availability rates are even worse, perhaps just 10 
percent of households. These are precisely the areas that can benefit 
the most from Internet technologies that eliminate geographical 
distance--whether it is for e-Commerce, distance learning, or 
telemedicine. So I want to thank you and all the Commissioners for 
continued attention to the ``digital divide'' challenge on Tribal 
lands.

   Could you discuss how USF reforms will better serve Tribal 
        communities that currently face a digital divide when it comes 
        to broadband?

   Given the unique digital divide challenge on Tribal lands, 
        how will USF reforms ensure that telecommunications companies 
        in Tribal areas are able to bring broadband to unserved 
        communities?

    Answer. The Commission's unanimous Order modernizes USF for 
broadband, and improves accountability and efficiency to ensure maximum 
impact of funds to extend service in unserved areas, including Tribal 
lands. For the first time, dedicated funding for mobile voice and 
broadband service is provided through a two-phase Mobility Fund ($300 
million in one-time support for Phase I; $500 million annually for 
Phase II).
    In addition to the general Mobility Fund Phase I, the Order 
establishes a separate and complementary Tribal Mobility Fund Phase I, 
providing $50 million for one-time support for unserved areas with no 
3G or 4G service on Tribal lands, as well as a Tribal Mobility Fund 
Phase II, providing as much as $100 million (out of a total $500 
million of Mobility Fund support) in ongoing annual support. Carriers 
seeking to serve Tribal lands may participate in both phases of the 
general Mobility Fund and the Tribal Mobility Fund.
    We are also seeking comment on a proposal to provide Tribal 
governments ``priority units'' to ensure that Mobility Fund support for 
Tribal areas best serves Tribal needs.
    Waiver petitions from carriers serving Tribal lands will receive 
priority review. The Order requires the Wireline or Wireless Bureaus to 
complete review of waiver petitions in these instances within 45 days 
of the record closing. Waiver applicants serving Tribal lands and 
insular areas are specifically asked to share ``any additional 
information about the operating conditions, economic conditions, or 
other reasons warranting relief based on the unique characteristics of 
those communities,'' which FCC will consider when reviewing waiver 
requests.
    In addition, the Order includes unique tribal engagement provisions 
requiring all carriers serving Tribal lands to meaningfully engage with 
Tribal governments.
    With respect to the Lifeline program, earlier this year the 
Commission adopted comprehensive reform, which recognizes the unique 
circumstances faced by Tribal communities. We preserved additional 
funding for Lifeline subscribers, and maintained the Link-Up program on 
Tribal lands, which ensures that low-income consumers stay connected, 
even as we eliminated the program everywhere else in the country. The 
Lifeline Reform Order also created a broadband pilot program to 
increase adoption; at least one of these pilot projects will be 
directed at providing support on Tribal Lands.
USF Reform and Tribal Governments
    Question 2. My understanding is that some Tribal governments have 
concerns that the FCC waiver process for Tribally-owned 
telecommunications providers could potentially require disclosure of 
unrelated Tribal government financial information. Will the Commission 
require that Tribal governments provide specific details about their 
operations in order for a telecommunications provider to receive a 
waiver?
    Answer. The intent of waiver process is to take account of all 
revenues associated with USF-supported infrastructure, but not 
unrelated revenues. Accordingly, we will not take such revenues into 
account and require disclosure of unrelated information.
Connect America Fund--Mobility Fund Eligibility
    Question 3. Chairman Genachowski, my understanding is that the vast 
majority of the Navajo Nation, which encompasses an area the size of 
West Virginia, will be ineligible for mobility fund support in upcoming 
auctions because the Commission finds that this area already has 3G 
service. This would surprise me since many parts of the Navajo Nation 
still lack cell phone service.

   Could you look into this to see if one of the least served 
        areas of the country could potentially be excluded from 
        mobility fund support in these auctions?

   If there is uncertainty or controversy over whether service 
        exists in these areas, should the Commission's default position 
        be to keep these Tribal lands eligible for the Mobility fund 
        auction?

    Answer. For the first Mobility Fund auction, to be held in 
September 2012, eligible areas are based on the best available public 
data, which is supplemented by a detailed challenge process. There will 
be further opportunities for carriers or communities to raise issues 
with coverage maps prior to any future auctions. With respect to the 
Navajo Nation, a portion of the Navajo Nation is eligible for the first 
Mobility Fund Auction: 4,057 eligible census blocks, covering a 
population of 7,797, an area of 2,111 square miles, and 4,123 
qualifying road miles.
USF Reform and Impact on Rural Utility Service Loans to Telephone 
        Companies
    Question 4. Chairman Genachowski, rural telephone cooperatives from 
my state are very concerned about the impact USF reforms will have on 
their ability to provide service in high cost areas. I am concerned by 
reports that many rural telephone companies may even have difficulty 
repaying loans from the Rural Utility Service. Can the FCC work more 
closely with RUS to ensure that changes in USF programs take place in a 
manner that does not have unintended impacts on outstanding RUS loans?
    Answer. Throughout this process, we worked closely with our 
counterparts at RUS to understand their portfolio of loans and 
potential impact of reform, and we will continue to do so. The 
transition will require flexibility by both agencies to address issues 
and specific cases that will arise. The agencies share the same 
objectives: extending service to as many of the 19 million Americans 
without broadband as possible, ensuring that consumers do not lose 
existing voice and broadband service as reforms proceed, and minimizing 
the total costs borne by consumers and businesses that pay taxes and 
pay in to the Universal Service Fund.
Cell Phone Bill Shock
    Question 5. Chairman Genachowski, I want to thank you for making 
cell phone ``bill shock'' a priority. I introduced legislation, the 
Cell Phone Bill Shock Act, that requires carriers to alerts customers 
before they reached their monthly limits. This helps consumers avoid 
unexpected bills in the hundreds and even thousands of dollars. Yet I 
support the agreement that the FCC announced last October with CTIA, a 
wireless trade association. Cell phone carriers have agreed to warn 
customers before they reach monthly usage limits. That is a positive 
development, not just for consumers but also for innovation, especially 
as more wireless devices connect to the Internet. Will you assure me 
that you will keep an eye on this agreement and make sure that wireless 
companies follow through with their commitments?
    Answer. Yes, and I thank you for your leadership in Congress on 
this issue.
    The Commission has been at work on the problem of bill shock since 
2009 as a part of our Consumer Empowerment Agenda. In 2010, we proposed 
rules to require that carriers provide alerts to customers when they 
approach and when they exceed their monthly plan limits, and when they 
are traveling abroad and are about to incur international roaming 
charges not covered by their monthly plans. While Commission staff was 
reviewing the comments on those rules, CTIA approached the FCC with a 
revised Code of Conduct requiring its carriers to provide the types of 
alerts the Commission had proposed, and to do so for free and 
automatically, without any action needed by the customer.
    By the Code revisions, which were announced on October 17, 2011, 
CTIA's member carriers, which serve 97 percent of U.S. wireless 
customers, must provide at least two of the four types of alerts by 
October 17, 2012, and the remainder by April 17, 2013.
    To assist consumers in knowing which carriers are providing these 
alerts, on April 19, 2012, the Commission launched a web portal that 
tracks each participating carrier's progress in meeting these 
commitments. We will update the portal as more carriers start providing 
the alerts. We are monitoring and working closely with carriers to 
ensure that commitments are kept.
Spectrum Auction
    Question 6. I supported legislation to unleash more spectrum for 
commercial mobile broadband and public safety broadband uses. But I 
also know that broadcasting, our first wireless technology, still plays 
an important role in communities throughout New Mexico. As the 
Commission works to implement voluntary incentive auctions, can you 
comment on the steps the Commission will take to ensure transparency 
during the auction process and the viability of local broadcasting 
after the auctions?
    Answer. The amount of spectrum cleared through the incentive 
auction will depend on the voluntary participation of broadcasters. My 
colleagues and I are committed to, and will continue to run, a public, 
transparent process to implement the auction. We are also committed to 
fully educating broadcasters on the options that are available to them, 
as well as encouraging their participation in the process. On June 12, 
2012, the Commission held a TV Broadcaster Relocation Fund Workshop to 
focus on the design of the Commission's program to reimburse some 
broadcasters for the relocation costs they will likely incur as a 
result of the channel reassignments in connection to repacking as 
authorized by the Act. While not all broadcasters appear likely to 
participate in the auction, I expect the auction to present a 
compelling economic opportunity for many broadcasters. The Commission 
will reach out to, and work with, all affected parties in a process 
that is transparent and fair. I expect there will be a healthy and 
diverse broadcasting industry once the incentive auction is complete.
Spectrum Reform and Future of Low Power Television
    Question 7. Given that spectrum is a scarce and valuable resource, 
our airwaves should be used as efficiently as possible. However, I have 
heard from low power TV license holders that the Commission sent 
letters concerning their licenses. Low power TV stations often serve 
their local communities with niche programming not offered by more 
traditional TV outlets. As the Commission considers how to manage 
spectrum auctions and potential spectrum ``repackaging,'' will low 
power TV stations still have the opportunity to serve their local 
communities?
    Answer. I fully appreciate and recognize the news, information, and 
programming that LPTV stations provide to their audiences. I have 
instructed Commission staff to continue to work with the LPTV community 
as we work thorough implementation of the Middle Class Tax Relief and 
Job Creation Act of 2012. As you know, LPTV stations always have been 
secondary services to full power TV stations, and Congress did not 
provide additional protections for LPTV stations in the Middle Class 
Tax Relief and Job Creation Act of 2012.
Making More Spectrum Available for Commercial Use
    Question 8. My understanding is that the Commission is looking into 
how to make spectrum from the 1.7 GHz band available for commercial 
mobile broadband use and potentially pair spectrum within that band 
with other currently available spectrum set to be auctioned. How can 
the Commission work with the Department of Commerce and others to help 
identify where more spectrum could be made available for commercial use 
without harming national security, public safety, and other critical 
government functions?
Spectrum Sharing
    Question 9. Chairman Genachowski, you suggested in recent public 
remarks that ``spectrum sharing'' is ``the most promising way forward'' 
to making more spectrum available for mobile broadband. Could you share 
more about what role spectrum sharing between public and private 
entities can play as the Commission looks at how to meet growing 
commercial spectrum needs?
    Answer (8 and 9). Through my Mobile Action Plan we are leaving no 
stone unturned to free up more spectrum, promote more efficient use of 
spectrum, and explore new ways to manage spectrum. The plan focuses on 
five main areas: unleashing new spectrum, removing barriers to 
broadband infrastructure build-out, driving greater efficiency in 
networks and devices, promoting competition, and empowering consumers.
    My goal is to clear spectrum for auction, where appropriate, while 
also exploring new ideas on sharing spectrum. This should not be an 
either/or choice because we will likely have to utilize both models to 
unlock the full value of this scarce natural resource. Meaningful 
spectrum sharing among government and commercial users can make 
available valuable spectrum for broadband in the 1.7-GHz band. The 
Commission is working with the National Telecommunications and 
Information Administration (NTIA) to test LTE sharing in the 1755-1780 
MHz band, which could allow us to pair it with existing (AWS-3) mobile 
broadband spectrum at 2155-2180 MHz to significantly enhance the value 
of AWS-3 prior to auctioning it as required by February 2015. Also, 
small cells can significantly increase the density of network 
deployment and the efficiency of spectrum use. The Commission is 
working with NTIA on enabling small cells in the 3.5-GHz band, which 
could free up 100 MHz of spectrum for wireless broadband, and we plan 
to pursue a proposal later this year to make this spectrum available 
for mobile broadband.
E-Rate and Digital Literacy Efforts
    Question 10. The e-Rate initiative helps some of the poorest 
schools in New Mexico enhance students' learning experiences with 
broadband and digital learning technologies that would otherwise be 
unaffordable. Unfortunately, e-Rate does not fully meet the needs of 
school districts across New Mexico and throughout the country. I am 
therefore concerned that e-Rate funding may be diverted to other 
digital literacy efforts. During the hearing, you assured Senator 
Rockefeller that e-Rate would be held harmless. Could you also assure 
me that e-Rate will not be harmed as the FCC considers innovative new 
ways to improve digital literacy?
    Answer. Yes.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Mark Warner to 
                        Hon. Julius Genachowski
    Question 1. Two years ago, the President announced his intention to 
free up 500 MHz of spectrum for wireless broadband use. This initiative 
is even more necessary today due to exploding data usage by consumers, 
which is leading to faster-than-expected capacity constraints across 
the country.

   Are you satisfied with the current pace of the 
        identification and reallocation of spectrum to commercial 
        broadband use? If not, why not?

   Do you have additional suggestions about how Congress or the 
        Federal Government could accelerate the process?

    Answer. When I arrived at the Commission in 2009, demand for 
spectrum was skyrocketing but the spectrum pipeline was empty, and the 
agency had no comprehensive spectrum strategy. Actions taken in the 
1990s led to two important auctions in 2006 and 2008--the AWS band and 
the 700 MHz band, but just as the mobile revolution was accelerating, 
no efforts had been made ensure that there was sufficient spectrum in 
the pipeline, even though historically it has taken approximately a 
decade to bring spectrum to market.
    Throughout my time at the Commission, increasing the availability 
of spectrum for broadband has been one of my highest priorities because 
of its critical importance to U.S. leadership in technological 
innovation, growing our economy, and maintaining our global 
competitiveness. Early on, I asked Commission staff to develop options 
for freeing up spectrum, faster, and in new innovative ways. I also 
oversaw the development of the first National Broadband Plan, which set 
audacious targets for freeing up spectrum: 300 MHz in 5 years, and 500 
MHz in 10 years. That plan also introduced the idea of incentive 
auctions as a tool to help meet our Nation's spectrum needs. I am 
pleased that Congress granted the FCC that authority earlier this year, 
and I recently initiated a formal rulemaking process to set the rules 
for that auction.
    The Commission has continued to work with all stakeholders to free 
up additional spectrum for wireless broadband use, and has made 
significant progress. My Mobile Action Plan contemplates a ``no-stone-
left-unturned'' approach that includes freeing up more spectrum, but 
also making more efficient use of spectrum and envisioning new ways to 
manage spectrum. A few examples of our successes follow:

   Moving forward on new auctions--up to 65 MHz in the next 
        three years, in addition to the significant amount of spectrum 
        that will be freed up by incentive auctions;

   Working to remove regulatory barriers to enable up to 40 
        megahertz of Mobile Satellite Services (MSS) spectrum to be 
        used for land-based mobile broadband;

   Paving the way for innovative use of small cells in the 3.5 
        GHz band, which could free up 100 MHz of spectrum for wireless 
        broadband;

   Working with the National Telecommunications and Information 
        Administration (NTIA) and industry to test LTE sharing in the 
        1755-1780 MHz band, which could allow us to pair it with 
        existing AWS-3 mobile broadband spectrum at 2155-2180 MHz to 
        enhance its value and usefulness prior to auctioning AWS-3 as 
        required within the next three years;

   Enabling white spaces in the television broadcast band to be 
        used on an unlicensed basis;

   Working to unleash at least 25 megahertz of spectrum in the 
        Wireless Communications Services (WCS) band by removing 
        technical rules that had impeded broadband use;

   Revamping our wireless backhaul rules to lower costs and 
        reflect advances in technology; and

   Changing technical rules to accelerate the rollout of LTE in 
        the 800 MHz band.

    If and when the need arises for Congress to potentially provide 
more tools and avenues for accelerating the process I look forward to 
working with you and your colleagues to help reach the ultimate goal.

    Question 2. The USF reforms--which I supported--seek to deploy more 
mobile and fixed broadband services to rural and underserved America. 
At the same time, mobile data forecasts indicate that the volume of 
data traffic on mobile service provider networks will increase 16 times 
from 2011 to 2016. Rural Virginia wants to be part of the broadband 
economy, however, high quality broadband service just hasn't been 
available where consumers and rural economic development needs demand 
it. What would happen to the pace of rural broadband deployment if 
Universal Service Fund Reforms are blocked or slowed down at this time? 
Why is it important to move forward in terms of leveraging existing 
Federal funding to deploy more broadband to rural and underserved 
America?
    Answer. When I became Chairman, the Universal Service Fund was 
backward-looking, not forward-looking. The Fund was not focused on 
extending broadband service and had become wasteful and inefficient, 
supporting multiple carriers in some areas, supporting carriers even in 
areas where an unsubsidized competitor also provides service, and often 
rewarding inefficient spending.
    The Commission's unanimous landmark reforms to the program adopted 
late last year are designed to bring broadband to the approximately 19 
million unserved consumers throughout America. The reforms put the 
Nation on the path to universal broadband and advanced mobile coverage, 
while maintaining support for existing rural broadband and voice 
service. By cutting waste, incentivizing efficiency, and setting an 
annual budget of $4.5 billion for the program for the first time ever, 
the reforms control the size of the fund--and therefore the burden on 
consumers and businesses that pay for the program.
    In order to extend broadband to unserved rural communities while 
ensuring fiscal responsibility, it is important to keep moving forward 
with implementation of the reforms. If we do not move forward, we will 
be left with pervasive inefficiencies of the old system, and will fail 
to connect all Americans to broadband and the enormously important 
economic, educational, health care, and other benefits that broadband 
brings.

    Question 2a. I sent a letter to the FCC in 2011 arguing that 
although 4 Mbps download/1 Mbps upload may be adequate for now, this 
standard should not be considered an acceptable level of service in the 
future. How important is it to you to see that the acceptable level of 
broadband service advances over time?
    Answer. It is critical that America's broadband infrastructure keep 
pace with changing demands and technology, as the Commission recently 
underscored in this year's Broadband Progress Report, which emphasized 
the vital importance of increasing the speed and capacity of broadband 
networks throughout the country. The Connect America Fund Order also 
recognized that broadband performance must improve over time. Fiscal 
responsibility requires that the Commission use limited resources 
carefully, and it is vital that we get basic broadband capabilities to 
all Americans as quickly as possible. That means funding at least 4 
Mbps download and 1 Mbps upload speeds in the immediate term, while 
setting expectations that broadband speeds must improve over time.

    Question 3. The Commission has a number of highly anticipated open 
Notices of Proposes Rulemaking. Now that the Commission has five highly 
capable commissioners, how soon do you expect to reach decisions on key 
issues? I would encourage you to reach decisions on important matters 
as soon as possible because the delay of long-standing rulemakings has 
caused some frustration.
    Answer. The Commission has made extensive progress in clearing 
items and reforming outdated programs. We have eliminated 222 obsolete 
regulations and have modified many others to reduce burdens: Over the 
past six months we have made significant reductions in our backlog, 
including a more than 20 percent reduction in items pending more than 
six months in the Wireline Bureau, and an across the board 20 percent 
reduction in license applications and renewals pending more than six 
months. The Commission has a self-imposed 180-day shot clock for 
reviewing applications to assign or transfer control of licenses or 
authorizations to determine whether the transfer serves the public 
interest. Better than 95 percent of all license transfer applications 
received since I became Chairman have been acted on within the 180-day 
period. We have also cut the average number of days required to review 
routine wireless transactions in 2012 by more than half.
    I have also made modifications of the Commission's ``must vote'' 
rules on pending items. The must-vote rule is designed to ensure that 
the Commission releases items in a timely fashion once it has secured 
the votes of a majority of Commissioners (currently three votes). 
Previously there was virtually no time limit and when votes would 
occur, extensions were granted liberally and virtually indefinitely. I 
believe this improvement has served the Commission well and has led to 
faster approval of pending items. I will continue to work to find ways 
to make the Commission more efficient in reaching decisions.

    Question 4. Looking back at FCC data stretching to 2005, the number 
of full-time equivalents in the Office of Engineering and Technology 
appears to have dropped from 116 to 81. Do you believe this reduction 
is the source of the backlog? Why has this office, which would seem to 
be at the heart of the Commission's work, have declined over time when 
other bureaus or offices have grown or at least stayed flat?
    Answer. I have placed an emphasis on recruiting and maintaining 
engineers at the FCC in order to ensure that we have the expertise 
necessary to carry out our core technical mission. We continually 
monitor and balance the number of full time engineers that we require 
based on the work that is before the Commission.
    It is important to note that the FCC's overall FTE numbers are 
currently at their lowest levels in more than 15 years, and the number 
of engineers as well as general staff in each bureau is similarly 
reflected in this overall decrease. The number of engineers as a 
percentage of the FCC overall workforce historically has not changed 
significantly.
    Engineers are deployed throughout the Commission, not just in the 
Office of Engineering and Technology. While the number of staff in the 
Office of Engineering and Technology has been reduced, this is large 
measure is due to the relocation of staff and functions to the Public 
Safety and Homeland Security Bureau that was created a few years ago. 
OET has recently hired top-notch engineers in recent years and has been 
authorized to hire additional engineers to meet agency priorities such 
as spectrum management and incentive auctions. Nevertheless, we do not 
expect the FY 2013 numbers to differ significantly from the FY 2012 
numbers. A chart showing the number of engineers at the FCC over the 
last four years is below.
    In addition, I have established an Engineering Work Force to assess 
the overall engineering resources of the agency and make 
recommendations as to how we can strengthen our engineering resources 
and make the most effective use of the resources that we have. The 
Engineering Task Force is considering a number of recommendations, 
including how we can improve our recruitment and hiring and that we 
reestablish our Engineer in Training program.

                     FCC Engineers as of End of FY12
------------------------------------------------------------------------
                                                             FY12  (5/5/
       Bureau             FY09         FY10         FY11         12)
------------------------------------------------------------------------
EB                             82           85           86           82
IB                             34           35           34           31
MB                             49           48           46           46
OET                            49           47           50           49
PSHSB                          21           21           19           21
WCB                             4            4            3            3
WTB                            30           30           30           30
------------------------------------------------------------------------
Total                         269          270          268          262
------------------------------------------------------------------------

                                 ______
                                 
    Response to Written Questions Submitted by Hon. Mark Begich to 
                        Hon. Julius Genachowski
Senator Begich Opening Statement
    Chairman Genachowski, I want to thank you for working with me 
during the FCC's recent efforts to reform the Universal Service Fund. I 
understand the need for efficiencies, and overall support the notion of 
USF reform. I also understand the FCC's efforts to work within a 
reasonable budget. However, the reality is that given Alaska's 
geography, distance from the lower 48, and the very remote locations of 
small rural communities, all of whom must be connected to ``the grid'' 
via ``middle-mile'' terrestrial, satellite or undersea fiber circuits, 
means that Alaska is very different. Our distances are greater, our 
population is smaller, and our costs are much higher, particularly as 
it relates to the very high cost of middle-mile circuits for broadband.

    Question 1. I know you saw a small corner of Alaska last year, 
thank you for coming and we hope to host you and members of your staff 
again this year. However, I still feel the need to remind the 
Commission of the extremely remote and insular areas in Alaska. Some 
Alaskan communities, including the entire island of Adak are on the 
brink of disaster because of the sever USF funding cuts established in 
your reform order.
    According to the National Broadband Plan, there were to be no 
flash-cuts in universal service reform.
    Just yesterday folks from the Adak Telephone Utility reported that 
their wireless leg of the company saw a reduction in USF support of 84 
percent from December 2011 to January 2012. This sudden slash in 
funding has put the critical wireless service in jeopardy. Without the 
wireless leg the entire utility goes under, and the island goes dark.
    Without a waiver, Adak will be out of business by the end of the 
year and it will default on RUS loans, which were granted in part on 
the FCC's determination of USF support available at certain levels.
    Mr. Chairman, you and your staff often point to the waiver process 
as a safety net for rural companies disproportionately impacted by 
recent changes in high cost support. The waiver process is nearly as 
problematic as the underlying regulation given the substantial cost and 
investment of human resources required just to apply.
    Wouldn't public policy be better served is the FCC granted smaller 
companies (under 50,000 lines) a waiver from the filing costs as well 
as establishing a hold harmless policy whereby companies seeing their 
high cost support, cut by more than 10 percent can seek a waiver and 
have the process automatically delayed for a period of time to 
investigate and ease the transition?
    Answer. There are approximately 800 rate-of-return carriers that 
receive USF support, and thus far the Commission has received fewer 
than ten waiver requests. Of those, one has been withdrawn and two were 
granted some relief. Staff is diligently reviewing the submitted 
information and the public record for the remaining requests and will 
make final decisions as expeditiously as possible.
    In response to carriers' requests for specific guidance on the 
waiver process, the USF/ICC Transformation Order laid out criteria to 
make it easier for companies to understand the information needed to 
evaluate a claim that changes in USF support would lead to loss of 
service for consumers. Most of the information requested, such as key 
financial data and basic information about cost of service, should be 
readily available to carriers. While some carriers may choose to hire 
outside experts to assist them, there is no requirement to do so. We 
recommend companies that are considering applying for a waiver to 
contact bureau staff before filing. Each company's situation is 
different and we can advise on which information is likely to be most 
important in evaluating their individual case. For carriers receiving 
millions of dollars annually in USF support, who have costs much higher 
than their peers, some one-time burdens to enable Commission staff to 
conduct a meaningful review of their finances is not unreasonable.
    In the case of Adak, specifically, the company receives $1,482.99 
per line each month, or nearly 6 times the overall $250 per line cap 
set unanimously by the Commission in the USF order. Staff has requested 
additional information from the company to address issues regarding 
affiliate payments and executive compensation, for example. Our 
obligation is to review these issues carefully to ensure consumers and 
small businesses paying into the fund are protected.
    While staff investigates, the Bureau provided interim support for 
Windy City, Adak's wireless affiliate. Although this comes at a 
significant cost to the consumers and businesses that pay into the 
fund, staff concluded it was appropriate to ensure they had time to 
fully evaluate Adak's financial situation before making a final 
decision.

    Question 2. I understand the Commission desire to establish capital 
expense and operating expense limits for rural rate of return carriers. 
And, whether I agree or not, I understand that your staff's recent 
order establishing what is called a ``regression analysis'' to limit 
expenses puts a limit on most small companies at their current level of 
capital and operating expenses. Thank you for revisiting the formula 
recently, however there are still some companies that will be severely 
impacted by reductions to be implemented on July 1. I understand that 
your staff is well aware that the model contains data errors and other 
possible analytic flaws.
    Since your staff admits that these flaws exist, why doesn't the FCC 
limit the July 1 impact to the proposed limitation of all companies to 
their current level of expenses instead of implementing the reduction 
on a few when the reductions may be based on data errors and flaws. I 
know that the order limits the initial level of the impact and 
transitions in the impact, but why implement this reduction on a few 
until you know that you have it right?
    Answer. The Commission provided a streamlined, expedited process to 
correct any inaccuracies in the data at issue. So far, the Wireline 
Competition Bureau has received two petitions to correct data, and both 
of the petitioners received responses within two weeks of the initial 
filing. A third petition remains under consideration. The FCC also 
launched a process to collect a full set of updated data from companies 
before the benchmarks take full effect.
    Even as the Commission continues to make necessary adjustments, in 
order to extend broadband to unserved rural communities while ensuring 
fiscal responsibility it is critical to keep moving forward with 
implementation of reform. As it does so, the Commission will continue 
to run a fair, open process in which the valid concerns of stakeholders 
are addressed--working closely with affected carriers to ensure that 
residents of the Nation's rural and high-cost areas receive the quality 
voice and broadband services that all Americans need.

    Question 3. The FCC has issued a Further Notice of rulemaking that 
proposes yet more changes to USF support for smaller carriers.

   As was suggested in a letter I co-led with Senator Thune in 
        April, which was also signed by 17 others Senators, with all 
        the drastic changes made in last year's USF reform order, don't 
        you think it's time to back off the Further Notice and let the 
        industry, lenders, investors and consumers adjust to the 
        reforms and evaluate their impact on rural communities and 
        providers?

   I understand that USF caps will change every year. If that's 
        the case, how can a company plan for longer-term investments?

   How can lenders know what the caps will be in determining 
        whether to extend credit?

   Do you think it's reasonable to ask companies to file 5-year 
        network build-out plans as the FCC's new rules do when the 
        ``budget'' your new caps set for network build-out will change 
        each year?

    Answer. In recognition of business realities and the need for 
carriers to have time to adjust, the Order allowed for reasonable 
transition periods, gradually phasing in changes over 18 months. I 
believe its important to keep moving forward with implementation of 
these once-in-a-generation reforms and not roll back the progress that 
has been made. In order to extend broadband to unserved rural 
communities while ensuring fiscal responsibility, it is important to 
keep moving forward with implementation of the reforms. If we do not 
move forward, we are left with inefficiencies of old system, and will 
not be able to close the gaps to ensure that residents of the Nation's 
rural and high-cost areas receive the quality voice and broadband 
services that all Americans need.
    The Order took steps to improve the high-cost loop support (HCLS) 
mechanism, one of the principal sources of USF funding for rate-of-
return carriers. The High Cost Loop support mechanism caps compare 
carriers to other similarly-situated providers based on a range of 
criteria. Most of the independent variables change little each year--
climate, soil type and the like change only slowly if at all. Those 
variables that do change, such as the percentage of under-appreciated 
plant and line count, are in the control of, or at least known to, each 
provider. Benchmark analysis identifies and caps only those companies 
whose costs are higher than 90 out of 100 companies operating under 
similar conditions--based on the actual cost data, not a hypothetical 
perfectly operated company, and only affect support going forward. The 
addition of these variables made the methodology more accurate and 
equitable for all carriers. The Bureau does not intend, and the 
mechanism is not designed to reduce support dramatically each year.

    Question 4. The very high cost of providing broadband services in 
Alaska is directly related to the very high cost of ``middle mile'' 
terrestrial, satellite and undersea fiber circuits. The middle mile 
circuits are necessary to connect small rural Alaska communities to the 
nationwide broadband system. In rural Alaska these middle mile circuits 
can cost 20 times or more than the same circuit in an urban area. So:

   How will the FCC ensure that broadband continues to be 
        deployed in rural Alaska--at affordable rates comparable to 
        urban rates--when the FCC Connect America Fund order fails to 
        contain any mechanism for dealing with Alaska's extraordinarily 
        high middle mile costs?

   Isn't the goal of the national broadband plan to ensure 
        rural broadband customers receive broadband service at rates 
        comparable to urban areas?

   How can you ensure that rural and remote areas that are 
        genuinely high cost, such as Hawaii and Alaska, receive ongoing 
        sufficient, stable and sustainable support necessary to build 
        and operate mobile broadband networks, particularly if you use 
        a nationwide reverse auction to distribute support?

    Answer. The USF/ICC Transformation Order took several steps to 
ensure that rural and remote areas that are genuinely high cost, such 
as Hawaii and Alaska, receive the ongoing sufficient, stable, and 
sustainable support necessary to build and operate fixed and mobile 
broadband networks. For example, by including lands in Alaska and 
Hawaii within the Tribal definition in the Order, Alaska and the 
Hawaiian Homelands are eligible for the Tribal Mobility Fund Phase I 
(providing $50 million for one-time support for unserved areas (no 3G 
or 4G) on Tribal lands) and the Tribal Mobility Fund Phase II 
(providing as much as $100 million (out of a total $500 million) in 
annual support for Tribal lands). Alaska and the Hawaiian Homelands are 
also eligible for support in the general Mobility Fund Phase I and II.
    In addition to establishing the Tribal Mobility Fund, the USF/ICC 
Transformation Order provides special relief for Alaska wireless 
carriers with respect to the transition away from the legacy funding 
mechanism for wireless carriers. While all other wireless carriers are 
immediately subject to a five-year phase down in support under the old 
rules as we ramp up the Mobility Fund, we delay the beginning of the 
five-year transition period for two years for remote areas of Alaska 
(areas outside Anchorage, Juneau, and Fairbanks). Over 50 remote 
communities in Alaska have no access to mobile voice service today, and 
many remote Alaskan communities have access to only 2G. Therefore, the 
Order concludes that carriers serving remote parts of Alaska, including 
Alaska Native villages, will have a slower transition path during the 
national transition to the Mobility Fund.
    Regarding middle mile costs, we have sought comment on several 
proposals to explicitly include middle mile costs in various programs 
within the Connect America Fund. Those proposals remain under 
consideration. In providing funding for all rural areas, including 
Alaska, we have to ensure that all Americans are able to take advantage 
of the benefits of broadband while also protecting consumers and small 
businesses that pay into the Fund. In addition, recognizing the 
reliance on lower bandwidth satellite backhaul in many areas of Alaska, 
for areas with no terrestrial backhaul options, the broadband public 
interest obligations have been relaxed. Rather than being required to 
provide broadband speeds of 4Mbps downstream and 1 Mbps upstream, fixed 
broadband providers compelled to use satellite backhaul need only 
provide service of 1 Mbps downstream and 256 kbps upstream to receive 
USF support. This is yet another example of the Order taking into 
consideration Alaska's unique circumstances.

    Question 5. It appears highly likely that as a result of the 
November USF/ICC order many rural carriers will lose revenues--both USF 
support and from elimination of crucial intercarrier compensation. Is 
that correct?
    Alaska, like 22 other States, has a complimentary State level 
universal service program. The Alaska state fund disburses over $15 
million to Alaskan carriers each year. Do you anticipate these State 
funds will have to expand to cover revenue lost from the reforms you 
are implementing? And if so, have you calculated how much these State 
funds will need to grow?
    Answer. While the vast majority of carriers see an increase of 
support as a result of reform, some carriers will see reductions phased 
in over a period of years as a result of corporate operations expenses 
that are in excess of similarly situated carriers, lower than average 
rates, and other factors. As carriers adjust to our targeted reforms 
that are designed to promote broadband deployment in a fiscally 
responsible way, we expect that they will make changes in their 
operations to adjust to any potential support reductions before seeking 
additional Federal or state universal service funding--which must 
ultimately be paid for by consumers and small businesses.
    As a general matter, the Commission supports the efforts of many 
states who have established state funds to assist in the deployment of 
broadband-capable networks as the statute contemplates. In many 
instances state USF funds, like the Federal USF fund, impose a burden 
on consumers and small businesses and are trying to balance these 
concerns as they set a budget for their funds. Federal and state funds 
working together to meet consumer needs is the essence of the federal-
state partnership envisioned by Congress in the universal service 
provisions of the 1996 Act. It is possible that some states will modify 
their state universal service funds in response to the FCC's recent 
reforms, but we cannot predict what individual states will do.

    Question 6. Would you agree the FCC's November universal service 
and intercarrier compensation order is the most major reform of these 
programs since the 1996 Act?
    Why then didn't you, as the chair, use the process established by 
Congress and refer issues to the Federal-State Joint Board on Universal 
service?
    Congressional intent is clear. The joint board process was created 
for a reason yet it was not used. Why is that? Why didn't you follow 
Congressional intent?
    Answer. Section 254 (c)(2) of the Communications Act states that 
the ``Joint Board may, from time to time, recommend to the Commission 
modifications in the definition of the services that are supported by 
Federal universal service support mechanisms.''\1\ The Commission 
instituted a special comment cycle for State Members of the Federal-
State Joint Board on Universal Service to seek specific input regarding 
the proposals in the USF/ICC Notice of Proposed Rulemaking. Many of the 
policy innovations the Commission adopted in the USF/ICC Transformation 
Order arose from Joint Board recommendations, including, among others, 
determining that USF support be directed where possible to networks 
that provide advanced services, as well as voice services; establishing 
a budget for the high cost program of $4.5 billion; and the creating a 
separate Mobility Fund. We will continue our ongoing dialogue with the 
State Members of the Joint Board.
---------------------------------------------------------------------------
    \1\ 47 U.S.C. Sec. 254(c)(2).

    Question 7. The E-Rate program has always meant a great deal to the 
State of Alaska, ensuring that the children and educators living and 
working in our state's most remote towns and villages have access to 
the Internet and distance learning and professional development courses 
that are otherwise unavailable to them locally.
    Let me quote from comments filed with the FCC last week by the 
Superintendent of the Dillingham City School District: As a small, 
rural school district in Alaska that has high poverty, low socio-
economic, and predominantly native Alaskan population (Yupik), ``I want 
to thank the FCC for our current level of E-Rate funding. We are an 
``off the road'' community, meaning the only way in and out is by air, 
dog sled, snow machine, or boat. We just recently acquired access to 
high-speed fiber Internet via GCI Corporation extending this service to 
rural, remote areas of Alaska. The cost for this more than doubled our 
annual rate and without the current E-Rate support we could not afford 
this service.'' Is there a better way to administer the digital 
literacy program without damaging E-Rate processing?
    Answer. The E-Rate program has achieved remarkable success--97 
percent of American schools and nearly all public libraries now have 
basic Internet access. I supported the needed improvements to upgrade 
and modernize the E-Rate program to ensure that America's students can 
keep up with the innovative high-tech tools that are now essential for 
a world-class education and to compete in the 21st Century economy. The 
FCC's 2010 E-Rate Order makes it easier for schools and libraries to 
get the highest speeds for the lowest prices by increasing their 
options for broadband providers and streamlining the application 
process for educators and librarians.
    I can assure you that I will not support any action that will 
potentially damage this vital program. The Commission's goal is to 
provide the important benefits of the E-Rate program to eligible 
schools and libraries protect the integrity of the program and 
investigate potential waste, fraud and abuse.

    Question 8. Also wish to highlight the importance of keeping intact 
reliable source of communications to relay emergency and lifesaving 
information to those areas that lack reliable cellular or Internet 
service.
    It is imperative that rural communities continue to have reliable 
sources of communications in cases of emergency and lifesaving 
situations. Can the Commission comment on ways to improve the 
distribution of emergency alert information?
    Answer. The Commission has improved the distribution of Emergency 
Alert System (EAS) alerts by requiring that EAS Participants (e.g., 
broadcast stations) have the capability to receive EAS alerts formatted 
in the Common Alerting Protocol (CAP). CAP allows EAS Participants to 
receive EAS alerts directly from the alert originator (e.g., the 
Federal Emergency Management Agency, National Weather Service, state 
and local governments). CAP alerts also have the potential to provide 
geographically targeted alerts that can include rich content such as 
streaming video and multilingual alerts.
    Last year, the Commission also conducted the first nationwide test 
of the EAS. This test allowed the Commission and FEMA to test each link 
within the EAS cascade architecture. The test showed that the cascade 
architecture was basically sound, but that there are areas of the 
current system that need improvement. We will continue to work with 
FEMA and the EAS Participants to address the weaknesses so that the 
system will work as planned.

    Question 9. The due diligence work done day in and day out by local 
broadcasters will be lost if constituents can't receive it. How does 
the FCC intend to improve this?
    Answer. The Commission, Federal Emergency Management Agency (FEMA) 
and other Federal agencies work together to assist broadcasters and 
other communications services during emergencies, particularly those 
involving severe weather. One tool the Commission utilizes is the 
Disaster Information Reporting System (DIRS)--this is a voluntary web-
based system where broadcasters and providers inform the FCC about 
their operating status following a major disaster.
    In the most recent storm--Hurricane Isaac--the Commission began 
outreach and coordination with agencies and broadcasters in the days 
leading up to the storm. The FCC coordinated with FEMA and deployed 
teams to conduct safety scans in advance of the storm's arrival to 
coastal states. DIRS was instrumental in providing the Commission with 
information about the status of communication services throughout the 
storm. In addition, the coordinated efforts and information received 
allowed Commission and FEMA to provide an emergency supply of fuel to 
keep generators running at New Orleans Spanish-language TV and radio 
stations so that they could stay on the air as the storm came through 
the region.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Kay Bailey Hutchison to 

                        Hon. Julius Genachowski
    Question 1. Many countries like China and Russia have proposed 
using the ITU, an agency of the United Nations, to impose regulations 
on the Internet. At the end of the year, the ITU will meet in Dubai to 
negotiate a new treaty. I believe it is critically important for the 
United States to present a single, bipartisan front at that conference 
to keep the Internet free of international regulation and to protect 
the multi-stakeholder governance model.
    Mr. Chairman, in your opening statement, you stated that the FCC is 
``working to oppose proposals from some countries that could seriously 
undermine the long-standing multi-stakeholder governance model that has 
enabled the Internet to flourish.'' Please expand on this comment and 
discuss more specifically what the FCC is working on and what you 
believe the FCC's role should be in this process.
    Answer. I have been very concerned by indications over the past 
year that some countries would attempt to use the ITU World Conference 
on International Telecommunications (WCIT) to give the ITU authority 
over Internet governance, undermining the long-standing multi-
stakeholder governance model. While the existing International 
Telecommunications Regulations (ITRs) have been accepted as a framework 
for negotiations without any pending proposals related to traditional 
Internet governance issues like Internet naming and numbering, critical 
Internet public policy issues will be discussed at the WCIT.
    Of particular concern are proposals that would change Internet 
protocol interconnection and charging mechanisms, as well as limit the 
ability of companies to manage their traffic by requiring them to 
provide calling party number identification information so that 
countries can track where traffic originates. In addition, some 
countries have proposed adding cybersecurity provisions to the ITRs.
    As the U.S. Government agency with primary responsibility for 
implementing the 1988 ITRs, the FCC plays a key role in domestic and 
international preparations for the WCIT. The FCC is working in the U.S. 
delegation on WCIT to vigorously oppose any expansion of the ITRs to 
issues related to Internet governance or proposals to abandon the 
multi-stakeholder model. The FCC is actively participating in U.S. 
delegations on WCIT, where we continue to reinforce the bipartisan U.S. 
Government position to maintain a free and open Internet that is not 
encumbered by detailed ITU regulations that would jeopardize innovation 
and the free flow of information. Moreover, we are working closely with 
the State Department and others to coordinate with like-minded 
countries to form a strong coalition that can work together to develop 
a high level, technology neutral treaty and to resist any efforts for 
ITU regulation where none is needed.

    Question 2. Mr. Chairman, at the end of March, Senator Cornyn and I 
sent you a letter urging the FCC to seriously consider Big Bend 
Telephone Company's waiver petition pertaining to the USF (Universal 
Service Fund) reform order. As you may recall, Big Bend serves an 
incredibly rural, very large, and extremely rugged region of Texas 
along nearly 500 miles of the U.S.-Mexico border. I believe the USF 
order's waiver process was intended precisely for unique and outlier 
companies like Big Bend. Can you explain to the Committee what criteria 
the FCC is using to evaluate USF waiver petitions?
    Answer. In reforming the Fund, the Commission unanimously agreed 
that, as a matter of fiscal responsibility and accountability, and to 
protect consumers and small businesses paying into the Fund, a 
thorough, but fair waiver process was necessary for any company seeking 
a waiver. Any carrier facing reduced support as a result of the 
Commission's universal service reforms may file a petition for waiver 
clearly demonstrating that good cause exists for exempting the carrier 
from some or all of those reforms, and that the waiver is necessary and 
in the public interest to ensure that consumers in the area continue to 
receive service.
    Waivers will be granted where an eligible telecommunications 
carrier can demonstrate that, without additional universal service 
funding, its support would not be ``sufficient to achieve the purposes 
of section 254 of the Act.'' In particular, a carrier seeking such a 
waiver must demonstrate that it needs additional support in order for 
its customers to continue receiving service in areas where there is no 
terrestrial alternative. Several weeks ago, I circulated a draft order 
to my colleagues to clarify that waivers can be granted to prevent loss 
of broadband service, not just loss of voice service.
    A full discussion of the Commission's waiver process is available 
in the CAF Order beginning at page 177 (available at http://
hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-11-161A1.pdf).

    Question 2a. Is there an update on the status of Big Bend's 
petition?
    Answer. Big Bend filed a letter withdrawing its petition on July 
18, 2012.

    Question 2b. When can we expect the FCC to issue a final decision 
on the first batch of waiver petitions?
    Answer. The FCC is acting expeditiously to consider pending waiver 
petitions. For example, on June 12, 2012, the Wireless 
Telecommunications Bureau granted interim relief to Windy City Cellular 
of the Commission's rules related to the interim cap on USF support. On 
July 25, 2012, the Wireline Competition Bureau granted in part a waiver 
to Allband Communications Cooperative.
    In all cases, the Commission's bureaus are reviewing each waiver 
petition individually and will make final decisions as expeditiously as 
possible. As you know, to expedite review of waivers, the Commission 
delegated to the Wireline Competition and Wireless Telecommunications 
Bureaus the authority to approve or deny all or part of requests for 
waivers of phase-downs in support. We required that the Bureaus 
initiate the process for public comment within 45 days of receipt of a 
petition.

    Question 3. Mr. Chairman, the landmark wireless spectrum bill that 
Congress passed earlier this year directed the FCC to conduct an 
``incentive auction'' of broadcast spectrum. The auction and the 
subsequent ``repacking'' of the broadcast band will be very complex. 
Can you please tell the Committee what the FCC has done so far to 
implement the incentive auction law and what the next steps are?
    Answer. In March 2012, I established the Incentive Auction Task 
Force, comprised of leading experts from the Wireless and Media 
Bureaus, Office of Engineering and Technology, and Office of General 
Counsel, as well as the Commission's Chief Economist and Chief 
Technology Officer. Gary Epstein, Senior Advisor to the Chairman, leads 
the Task Force. We also announced the retention of leading experts in 
auction theory and implementation from the prize-winning auction and IT 
specialists of Auctionomics, Power Auctions and MicroTech.
    In May 2012, the Commission held a workshop that focused on helping 
broadcasters approach the financial and strategic opportunities 
presented by channel sharing. Panelists discussed the practical 
business and operational challenges and potential solutions that 
broadcasters who are considering channel sharing are facing. On June 
25, the Commission held a TV Broadcaster Relocation Fund Workshop to 
focus on the design of the Commission's program to reimburse some 
broadcasters for the relocation costs they will likely incur as a 
result of the channel reassignments in connection with repacking as 
authorized by the Act. Currently, the Task Force and Commission staffs 
are preparing Notices of Proposed Rule Making (NPRM) for the fall. The 
Commission intends to meet all statutory deadlines and move 
expeditiously to meet the growing demand for wireless spectrum.

    Question 3a. There is a strong need throughout the wireless 
industry for additional spectrum, and time is an important factor in 
meeting consumers' increasing demand for mobile broadband. Can you 
estimate when the incentive auction might begin?
    Answer. Commission staff are actively working so we can initiate 
proceedings this fall on the spectrum auction process and 
implementation. The process will seek public input from all interested 
parties through comments, workshops, and other means and we intend to 
meet all statutory deadlines and act expeditiously to meet the growing 
demand for wireless spectrum.

    Question 3b. Your National Broadband Plan called for 120 megahertz 
of spectrum to be cleared by an incentive auction. Within the 
boundaries of the spectrum bill and while still protecting 
broadcasters, do you think the FCC can reach that goal?
    Answer. As I have previously mentioned, I am concerned that some 
provisions in the law could hinder our ability to reach the 120 MHz 
goal, but we have assembled a team of economists, engineers, attorneys, 
and others to ensure we maximize the amount of spectrum recovered 
consistent with the law.
    The amount of spectrum cleared through the incentive auctions will 
depend on the voluntary participation of broadcasters. The Commission 
is, and will continue, educating broadcasters on the options that are 
available to them, as well as encourage their participation. As noted 
above, the Commission held a TV Broadcaster Relocation Fund Workshop to 
focus on the design of the Commission's program to reimburse some 
broadcasters for the relocation costs they will likely incur as a 
result of the channel reassignments in connection to repacking as 
authorized by the Act. While it is not expected that all broadcasters 
will participate, voluntary incentive auctions present a compelling 
economic opportunity for many broadcasters. The Commission will reach 
out to, and work with, all affected parties in a process that is 
transparent and fair.

    Question 3c. Aside from your work on incentive auctions, what else 
is the FCC doing to get more spectrum into the hands of the private 
sector as soon as possible?
    Answer. Since 2009, the Commission has been working on a Mobile 
Action Plan, which contemplates an ``all of the above'' approach that 
includes freeing up more spectrum, but also more efficient use of 
spectrum and new ways to manage spectrum. Our plan focuses on five main 
areas: unleashing new spectrum, removing barriers to broadband 
infrastructure build-out, driving greater efficiency in networks and 
devices, promoting competition and empowering consumers.
    The FCC is unleashing at least 25 megahertz of spectrum in the 
Wireless Communications Services (WCS) band by removing technical rules 
that had impeded broadband use. We have also proposed removing 
regulatory barriers to enable up to 40 megahertz of Mobile Satellite 
Services (MSS) spectrum to be used for land-based mobile broadband. The 
U.S. has become the first country to enable white spaces in the TV 
spectrum to be used on an unlicensed basis.
    The Commission adopted a shot clock to speed approvals of towers 
and antennas, and streamlined access and reduced costs for attaching 
broadband lines and wireless antennas to utility poles across America. 
By eliminating outdated rules, we have also increased the amount of 
spectrum available for wireless backhaul.
    The new FCC Mobility Fund, created through savings from reforms to 
the Universal Service Fund, will use market-based mechanisms to extend 
mobile broadband coverage in rural America.
    Staff is moving forward on new auctions--up to 65 MHz in the next 
three years, plus the significant amount of spectrum that will be freed 
up by incentive auctions. And we need to seize the opportunities of 
unlicensed spectrum--through steps to ensure a successful future for 
Wi-Fi and by making more spectrum available through advanced sharing 
techniques such as databases of available spectrum and dynamic spectrum 
access.
    Also, meaningful spectrum sharing among government and commercial 
users could provide a path to free up valuable spectrum for broadband 
in the 1.7-GHz band. The Commission with the National 
Telecommunications and Information Administration (NTIA) to test LTE 
sharing in the 1755-1780 MHz band, which could allow us to pair it with 
existing (AWS-3) mobile broadband spectrum at 2155-2180 MHz to enhance 
its value and usefulness prior to auctioning AWS-3 as required within 
the next three years. Also, small cells can significantly increase the 
density of network deployment and the efficiency of spectrum use. The 
Commission is working with NTIA on enabling small cells in the 3.5-GHz 
band, which could free up 100 MHz of spectrum for wireless broadband.

    Question 4. The FCC recently put out for comment a proposal to 
increase the authorized power for Low Power FM (LPFM) radio stations 
from 100 watts to 250 watts. When this committee passed the Local 
Community Radio Act (LCRA) in 2010, it was with the understanding that 
LPFM stations operate at a maximum of 100 watts. Congress may have 
acted differently had it known the FCC might allow LPFM stations to 
operate at 250 watts. Why is the FCC now contemplating changing and 
expanding the parameters of LPFM?
    Answer. The Commission sought comment on a third-party proposal to 
bring rural and non-core LPFM stations onto the same footing as FM 
translator stations. We also sought comment on whether the proposal 
``could offset limited potential audiences, promote LPFM station 
viability and expand radio service to areas where full service 
operations may not be economically feasible.''
    The Commission is mindful of concerns that have been raised in the 
record, and sought comment on the potential for interference and need 
for adjacent channel spacing under the proposal, as well as whether the 
proposal ``can be implemented in a manner that would not undermine the 
detailed LCRA protection standards and interference remediation 
procedures, which are presumably grounded on the current LPFM maximum 
power level.''
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Olympia J. Snowe to 
                        Hon. Julius Genachowski
Comprehensive Spectrum Inventory
    As you know I have been calling for a comprehensive inventory for 
over three years now. A comprehensive inventory of both Federal and 
non-federal spectrum would provide decision makers at the FCC, NTIA, 
and Congress a clearer, more detailed, and up-to-date understanding of 
how spectrum is currently being used and by whom--data essential to 
sound policy decisions and spectrum management--mainly given the FCC 
manages over 2 million active licenses and NTIA administers over 
450,000 assignments.
    While I appreciate the Commission's effort in conducting a 
``baseline'' spectrum inventory and creating Spectrum Dashboard and the 
LicenseView, it is not a sufficient substitute to conducting a 
comprehensive inventory. In addition, Representative Stearns, Senator 
Warner and former Commissioner Copps have all recently called for a 
comprehensive spectrum inventory. So there is a growing appeal for such 
effort to have a better understanding of spectrum usage.
    Question 1. Do you plan to conduct a comprehensive spectrum 
inventory of non-federal licenses? And do you believe comprehensive 
inventory is essential to gaining a better understanding of how 
spectrum is being used and by whom?
    Answer. As noted, the Commission has completed a baseline spectrum 
inventory, which was one of the most substantial and comprehensive 
evaluations of spectrum in the Commission's history. Through out 
systematic process, we have developed two online tools, Spectrum 
Dashboard and LicenseView, that reflect our understanding of where the 
most significant spectrum opportunities lie.
    Our steps in creating and maintaining a spectrum inventory have 
provided the necessary information to determine how best to unleash 
significant additional spectrum for wireless broadband over the next 
ten years. Combined with the incentive auction authority granted to the 
Commission in the Middle Class Tax Relief and Job Creation Act of 2012 
and Job Creation Act, these mechanisms will help our country realize 
the full potential of wireless and further our global competitiveness, 
innovation and economic health.

    Question 2. How important would having more detailed data on 
spectrum usage and infrastructure and device deployment be to pursuing 
sharing opportunities between spectrum users and promoting more 
spectral efficiency?
    Answer. In order to keep pace with our Nation's broadband demands, 
we need to develop new tools to supplement our older ones like clearing 
and reallocating spectrum. Spectrum sharing is such a tool. Just as 
incentive auctions are a big new idea and new tool for freeing up 
spectrum for commercial use, the recent recommendations by the 
President's Council of Advisors on Science and Technology (PCAST) on 
government/commercial sharing are a big idea on freeing up spectrum for 
commercial use. Both ideas can help drive our economy and job creation. 
In partnership with NTIA, the Commission has been moving forward 
aggressively to identify sharing opportunities with commercial 
providers on Federal spectrum. In addition, the Commission has taken 
several steps toward removing barriers and allowing more flexible use 
of spectrum, especially for mobile broadband, and strives to create 
market incentives for the efficient use of spectrum. It is more 
important to ensure we invest in the right ``rules of the road'' to 
promote sharing, data will play a key role in informing how those rules 
are crafted.

    Question 3. Has the FCC created any maps showing where spectrum 
auctioned has actually been deployed and is in use? Does the FCC have 
any detail how much auctioned spectrum has yet to be built out in rural 
areas?
    Answer. The Commission takes deadlines on its build-out 
requirements seriously and monitors licensees' progress in meeting 
their obligations. The National Broadband Map--a joint creation of NTIA 
and the FCC--provides granular geographic information on broadband 
availability and can be segmented by technology in order to show where 
wireless service is available.

    Question 4. How much detail do you have on what percentage of the 
area of the United States does not have enough spectrum to meet public 
demand? For the most densely populated areas, how does the FCC 
determine that providing more spectrum is better than promoting greater 
spectrum reuse or heterogeneous networks to meet the demand?
    Answer. I expect that more spectrum, greater investment in network 
capacity and density, and new technologies will all play a role in 
meeting growing demand for wireless services. Since 2009, the 
Commission has been executing on our Mobile Action Plan, which 
contemplates an ``all of the above'' approach that includes freeing up 
more spectrum, but also more efficient use of spectrum and new ways to 
manage spectrum. A market-based, flexible-use approach to spectrum 
management enables the market to assess demand and determine the best 
approach to meet that demand.
FCC Technical Expertise
    In your remarks, you stated the Commission is operating with its 
lowest number of employees. The FCC is also unfortunately operating at 
one of its lowest number of engineers--over a 60 percent reduction in 
engineers from the 1950s to today--yet the Commission is dealing with 
significantly more technically complex issues such as advanced wireless 
communications, commercial cable & satellite industries, public safety 
interoperability, more device certifications, and broadband.
    Engineers at the FCC play an essential role in regulatory matters 
by providing technical consultation on policy matters, managing 
spectrum allocations, and creating new opportunities for competitive 
technologies. I'm concerned this lack of expertise is hampering 
innovation and job growth because of the excessive delays to businesses 
that are waiting approval to technical waivers, experimental licenses, 
and filed petitions at the agency.
    Others share my concern, a 2009 Government Accountability Office 
report found that the agency ``faces challenges in ensuring it has the 
expertise needed to adapt to a changing market place.'' And 2011 
Wireless Report by the National Research Council suggested the FCC 
would benefit from ``enhancing its technology assessment and 
engineering capabilities'' due to ``entering an era in which technical 
issues are likely to arise on a sustained basis.''

    Question 5. What specifically has the Commission done to bolster 
its technical resources and staffing to ensure it has the adequate 
number and type of engineers to handle the agency's workload?
    Answer. The FCC's engineers are a highly-educated, well-qualified 
critical resource to achieving our mission. Ensuring engineering 
resources keep pace with changes in communications technology is a key 
challenge for the Commission.
    Earlier this year, Congress gave the Commission authority to 
conduct incentive auctions. To conduct those auctions, the Commission 
will need additional engineering resources. We have received 
reprogramming authority from the House and Senate Appropriations 
Committees to fund two more engineers for those activities during the 
current Fiscal Year.
    To encourage excellence in engineering, the Commission's engineers 
must have adequate facilities and equipment. Accordingly, the FCC has 
requested $500,000 for Fiscal Year 2013 to upgrade the OET's Columbia 
Laboratory facility as part of the plan. The Senate Appropriations FY13 
Financial Services bill provides funding consistent with these upgrades 
while the House bill does not. The Senate bill also fully funds the 
FCC's workforce while the House Report language encourages the FCC to 
reduce its current workforce

    Question 6. From FY 2011 to FY2012, the FCC funding for its 
workforce increased to allow for 141 new full time employees. Of the 
141 authorized new employees, how many are designated engineering 
positions? How many engineers have been hired over the past 2 years and 
what has been the net increase of engineers?
    Answer. The FCC is at its lowest level of FTEs in ten years and has 
not increased its FTEs during the previous two Fiscal Years. The chart 
below provides a complete workforce snapshot of the FCC's engineers 
since Fiscal Year 2009.

                      FCC Engineers as of End of FY
------------------------------------------------------------------------
                                                             FY12  (5/5/
       Bureau             FY09         FY10         FY11         12)
------------------------------------------------------------------------
EB                             82           85           86           82
IB                             34           35           34           31
MB                             49           48           46           46
OET                            49           47           50           49
PSHSB                          21           21           19           21
WCB                             4            4            3            3
WTB                            30           30           30           30
------------------------------------------------------------------------
Total                         269          270          268          262
------------------------------------------------------------------------


    Question 7. Do you believe the FCC has the sufficient level of 
technical resources, given the concerns various entities have raised?
    Answer. Ensuring engineering resources keep pace with the change in 
technology is a key challenge faced by the Commission. Our budget 
requests additional funding for engineering resources and upgrades to 
our Columbia Laboratory for FY13 to ensure that our engineers have 
adequate operational resources.
Wireless Device Performance
    As you know, I have been advocating for greater attention to 
receiver performance standards for some time. I believe one of the 
problems contributing to the numerous interference disputes we've 
witnessed over the past decade is the lack of clear receiver 
performance guidelines. I've proposed legislation that would take steps 
to help mitigate, and even prevent, future interference disputes 
resulting in greater certainty for the market and new entrants. I 
applaud the FCC for holding its two-day workshop on receiver 
performance a couple months ago.

    Question 8. What was the result of the workshop and what additional 
steps will the FCC take to promote greater spectral efficiency and 
interference immunity of wireless devices?
    Answer. The workshop concluded with broad agreement that receiver 
efficiency is an issue that is ripe for more focused attention. 
Spectral efficiency is a key component of the Commission's Mobile 
Action Plan. Our Technological Advisory Council has made it one of 
their top priorities to find a constructive path forward on these 
issues that will have to involve all key stakeholders, including 
commercial spectrum users, government spectrum users, and device 
manufacturers.
Regulatory Uncertainty
    The dispute between LightSquared and the GPS community is very 
disconcerting because it involves two very important services--wireless 
broadband and GPS. Given the significant benefits both technologies 
provide to millions of Americans and businesses, presenting an 
``either-or'' scenario undermines innovation and consumer choice.
    However, earlier this year, the Commission proposed to ``suspend 
indefinitely'' LightSquared's underlying Ancillary Terrestrial 
Component (ATC) authorization even though the FCC took steps, over the 
decade, to implement greater flexibility to satellite carriers like 
LightSquared to use their licenses for ground-based communications 
services and the FCC's public notice on IB docket 11-109 highlighted 
``the U.S. GPS Industry Council and LightSquared's predecessor licensee 
submitted a joint letter to the Commission stating that those 
interference issues had been resolved'' and ``no party sought 
reconsideration of that build-out requirement.''

    Question 9. Earlier this year you stated that ``regulatory 
certainty and predictability promote investment.'' However, I'm 
concerned about the Commission's handling of the LightSquared matter 
and the lack of certainty and predictability that existed. Do you share 
my concern about the effect this kind of regulatory uncertainty may 
have on future wireless investment?
    Answer. The LightSquared proceeding presented unique challenges 
related to commercial operations and national security because of 
receiver overload problems that were reported to the Commission by the 
GPS Industry. Ensuring that devices operate within their spectrum is 
critical to provide all potential licensees of spectrum certainty and 
predictability. Finding additional spectrum for innovative wireless 
services has been the source of tremendous growth for our country, and 
its potential to create jobs and drive the economy for the foreseeable 
future is substantial. I remain focused on ensuring that the Commission 
maximizes the economic, public safety, and national security potential 
spectrum offers.

    Question 10. The LightSquared/GPS dispute also raises concern about 
how future interference disputes will be resolved. How are new entrants 
supposed to invest significant capital into developing and deploying 
wireless services if an incumbent user raises harmful interference 
concerns so late in the process and/or is unwilling to work in good 
faith to find a solution?
    Answer. The role of receivers in enabling access to spectrum for 
new services implicates Federal stakeholders, as well as the private 
sector. As you note, receiver performance issues have often arisen as a 
conflict between legacy stakeholders and new entrants where deployment 
of new technologies and services threatens to adversely impact an 
incumbent or place restrictions on the new entrant. Other past examples 
include interference issues between new cellular radio systems and 
public safety radio systems, satellite digital radio systems and 
proposed terrestrial data services, and unlicensed Wi-Fi systems and 
FAA weather radar systems. The resolution of such matters has 
historically required a public process involving regulators, 
stakeholders and other parties. Because such discussions sometime begin 
upon the introduction of a new service or technology, full deployment 
of such new services could be hindered.
    The Commission typically addresses interference issues by setting 
parameters for transmitters to ensure that they do not emit excessive 
energy into frequency bands used by other services. The Commission then 
relies upon equipment manufacturers, licensees, and other stakeholders 
to ensure their receivers comply with those technical parameters. They 
are best positioned to know of their limitations and specifications and 
should notify the Commission if overload interference is a potential 
issue as a result of receiver characteristics.

    Question 11. Why didn't the FCC provide any possible alternative 
solutions to satisfactorily resolve the interference issues?
    Answer. The Commission will consider any specific suggestions for 
alternative solutions and review potential solutions under the 
Memorandum of Understanding process with NTIA.

    Question 12. Did the FCC use its technical advisory committee in 
any aspect of the LightSquared/GPS controversy? If yes, how and to what 
degree? If not, why wasn't the TAC utilized?
    Answer. The TAC offers guidance and recommendations on broad 
technology issues such as the transition of the PSTN and to IPV6. 
Traditionally, the TAC has not provided recommendations on pending 
rulemaking proceedings.
    The TAC is, however, studying the general issue of receiver 
performance.

    Question 13. Were these commercial GPS devices adequately tested 
under the FCC's device certification process? And how does the FCC 
enforce the Part 15 rules?
    Answer. Receivers that operate in the frequency range 30--960 MHz 
are subject to equipment authorization, which is based on self-approval 
of compliance with the emissions limits. GPS receivers operate in the 
1559--1610 MHz band and therefore are not subject to any FCC testing or 
equipment authorization requirements. Part 15 devices are accept 
interference from licensed services and to not interfere with licensed 
services. As stated above, the Commission typically addresses 
interference issues by setting parameters for transmitters to ensure 
that they do not emit excessive energy into frequency bands used by 
other services. The Commission then relies upon equipment 
manufacturers, service providers, and other stakeholders to ensure 
their receivers comply with those technical parameters.

    Question 14. How many commercial GPS devices have been certified 
since 2003, when the FCC adopted rules permitting MSS licensees to 
integrate an Ancillary Terrestrial Component (ATC) into their networks? 
Were these devices tested against an adjacent band ATC emission test 
signal?
    Answer. As noted above, GPS receivers are not subject to equipment 
authorization and therefore none have been certified.
Timely Technical Decision Making
    With the rapid advancement of technologies and innovation within 
the telecommunications industry, it is imperative that the Commission 
not only have the technical expertise to make well-informed regulatory 
decisions but also that it makes such decisions in a timely manner.
    As Representatives Walden and Stearns highlighted in a December 
2011 letter, ``the Commission had 5,328 petitions, more than a million 
consumer complaints, and 4,185 license applications that had been 
sitting for more than two years as of July 2011.'' Also, a well known 
regulatory lawyer, Mitch Lazarus, once remarked ``Technical proceedings 
[at the FCC] in general, including those to authorize new technologies, 
have been dismayingly slow.''
    While I understand there are numerous reasons why a proceeding can 
remain open for such a long time, it is still concerning because the 
lack of action on pressing issues before the FCC can hinder innovation 
and cause significant uncertainty to small start-up companies and small 
businesses that are critical to job creation due to waiting for a 
decision from the FCC.

    Question 15. Can you provide an update as to the steps you have 
taken to remove bottlenecks in order act timelier on petitions and 
proceedings?
    Answer. From the beginning of my tenure as Chairman, I have made 
reform of agency processes a top priority. For example, we have reduced 
Commission backlogs, including a 52 percent reduction in pending 
satellite licensing applications and a 24 percent reduction in the 
number of pending petitions for reconsideration and applications for 
review. The Commission is working effectively, and we are moving in the 
right direction. There is more we can do to improve performance, and I 
am committed to continuing reform.

    Question 16. Can you elaborate on how the FCC has adhered to this 
statutory requirement? What future steps will the FCC take to better 
utilize Section 7?
    Answer. The Commission conducts over 70 different types of 
proceedings, and each type of proceeding involves specific 
circumstances that the Commission must consider. Where appropriate, the 
Commission has adopted its own internal shot-clocks to facilitate 
expedited processing of important matters. But it is imperative that 
the Commission have sufficient flexibility and discretion to give 
adequate attention to each filing and each proceeding.
Trucker TV Petition
    There is a matter before you regarding a proposal to offer 
television service to a population of approximately 2 million long haul 
truck drivers at rest stops, so called ``Trucker TV.'' This population, 
sometimes on the road for 27 plus days out of each month is currently 
without this basic service that you and I take for granted.
    My understanding is that this has been pending for 7 years and is 
currently the longest standing circulating item on the 8th floor 
pending for the last three plus years. It seems to me that this service 
is long overdue and the benefits are great.

    Question 17. What are you doing to move this proposal forward?
    Answer. Commission staff recently met with representatives of 
Clarity Media Systems to discuss its proposal and the pending 
Application for Review. Commission staff encouraged Clarity to explore 
alternatives given that the 2025-2110 MHz band on which its proposal 
relies is the preferred relocation option for the Department of Defense 
under the recent National Telecommunications and Information 
Administration (NTIA) report regarding the repurposing of Federal 
Government spectrum for wireless broadband use.
    Commission staff has outlined potential options for Clarity Media's 
video service proposal, and staff remains available to provide 
assistance as the company evaluates these alternatives.
Spectrum Sharing for Unlicensed Use
    In your remarks at the CTIA Wireless Show earlier this month, you 
put a stronger emphasis on spectrum sharing and small cells--two areas 
I have been advocating for greater focus on over the past several 
years--to meet future capacity needs of the wireless industry. With 
respect to spectrum sharing, you highlighted your partnerships with 
NTIA in testing LTE sharing in the 1755-1780 MHz band and the 
experimental license T-Mobile applied for to test a sharing concept.

    Question 18. Is the FCC's focus on sharing opportunities limited 
only to the 1755-1780 MHz band or is the Commission actively looking at 
sharing opportunities in other bands also?
    Answer. The Commission is looking at sharing opportunities in 
multiple spectrum bands. The Commission is also considering other kinds 
of sharing arrangements, such as small cell use in the 3.5 GHz band. 
Small cells can significantly increase the density of network 
deployment and the efficiency of spectrum use. The Commission is 
working with NTIA on enabling small cells in the 3.5-GHz band, which 
could free up 100 MHz of spectrum for wireless broadband. I intend to 
propose to my colleagues an item on small cell use in the 3.5 GHz band 
and will continue to explore other opportunities for technology that 
could enhance spectrum efficiency. Lastly, the Commission has also 
begun sharing arrangements in some bands, such as in UHF TV white 
spaces.

    Question 19. It's my understanding the sharing arrangement in the 
1755-1780 band will be paired with the 2155-2180 MHz band and auctioned 
as licensed spectrum. What opportunities might unlicensed use have in 
the FCC's spectrum sharing strategy? It seems like actively pursuing 
other unlicensed opportunities could be another way to spur innovation 
and job creation, right?
    Answer. The Commission is pursuing an ``all of the above'' strategy 
regarding sharing approaches. 1755-1780, as well as paired 2155-2180 
MHz spectrum, may be best suited for licensed uses.
    I agree that encouraging more innovative and efficient uses of 
spectrum is important to spur innovation and job creation and will 
continue to encourage dynamic spectrum sharing and secondary markets 
for spectrum, as well as development and deployment of femtocells, 
smart antenna technology, and devices that can access unlicensed 
spectrum like Wi-Fi.
    The Commission is also promoting unlicensed sharing in other bands, 
including TV white spaces in the UHF band. In addition we will soon 
begin exploring unlicensed use in the 5 GHz band, as directed by the 
Middle Class Tax Relief and Job Creation Act of 2012.
    I am encouraged by signs of innovation around unlicensed spectrum 
and Wi-Fi, including at companies like Microsoft, Google, Dell, 
Cablevision, Time Warner, and a bevy of smaller companies such as 
Spectrum Bridge, Shared Spectrum and Adaptrum. All these companies are 
investing in developing technology and business models around 
unlicensed spectrum.

    Question 20. Have any other wireless carriers besides T-Mobile 
applied for experimental licenses to test sharing concepts? Answer. T-
Mobile's application with respect to 1755 MHz was filed with the 
support and on behalf of the wireless industry, which intends to 
participate through coordination with CTIA. T-Mobile, CTIA and other 
participants are cooperating with DOD through NTIA.
Status of White Spaces
    Several other countries have followed our lead in exploring the use 
of white spaces and one country, the United Kingdom, announced plans to 
launch ``enhanced Wi-Fi'' service next year. I have concerns the United 
States could be surpassed in this very promising area because other 
countries are more aggressively implementing their white spaces plans.

    Question 21. What is the current status of the white spaces effort 
at the FCC?
    Answer. As noted above, last year we became the first country to 
free up TV white spaces for unlicensed use, which hold the promise of 
new value-creating breakthroughs on the order of magnitude of Wi-Fi. 
The Commission is now in the implementation stage--approval of database 
managers, devices and deployments, as well as finalizing process for 
registering wireless microphones for protection in the database. Also, 
the Commission is considering whether we can use similar methods to 
provide access to other parts of the spectrum (See Notice of Inquiry--
Promoting More efficient Use of Spectrum Through Dynamic Spectrum Use 
Technologies, ET Docket No. 10-237, November 20, 2010; also see the 
forthcoming report from the Presidential Council of Advisors on Science 
and Technology (PCAST).)
FCC & NTIA Joint Spectrum Planning
    As you know, Section 112 of the statue (47 U.S.C. 922) requires the 
Assistant Secretary and FCC Chairman to meet ``at least, biannually'' 
to conduct joint spectrum planning activities. It looks like the last 
time there was formal FCC announcement of such meeting was in June 
2010.

    Question 22. Over the past two years, how many times have you met 
with Assistant Secretary Strickling about spectrum policy/planning and 
can you elaborate on what issues were discussed?
    Answer. I have discussed spectrum policy issues with Assistant 
Secretary Strickling on many occasions over the past two years. Topics 
included how to accelerate clearing and/or sharing spectrum currently 
used by the Federal Government. The Commission and NTIA have ongoing 
dialogues regarding spectrum issues on a nearly daily basis at the 
staff level.
Long-Term Spectrum Planning
    In June 2004, the Bush Administration released the Spectrum Policy 
for the 21st Century to promote the development and implementation of a 
U.S. spectrum policy for the 21st century. One of its key 
recommendations was the development of a ``National Strategic Spectrum 
Plan'' to provide a long-term vision for domestic (federal and non-
federal) spectrum use and strategies to meet those needs.
    However, the last Progress Report on the Spectrum Policy Initiative 
(released October 2009) had the status of such plan as ``expected 
completion TBD.'' And while the Chapter 5 of the National Broadband 
Plan provided some long-term planning it was primarily focused on 
wireless broadband services instead of the whole spectrum ecosystem of 
radio-based services?

    Question 23. What is the current status of the National Strategic 
Spectrum Plan? Do you believe such long-term planning could be 
beneficial to exploring greater sharing opportunities between 
commercial and Federal spectrum and help foster greater coexistence 
between adjacent band licensees?
    Answer. The National Strategic Spectrum Plan is administered by 
NTIA. The National Broadband Plan, released in 2010, outlines spectrum 
plans and initiatives that the Commission is now actively implementing. 
That National Broadband Plan recommends that the FCC update its 
spectrum plan in 2013.
    I am committed to working closely with the Federal and commercial 
sectors to explore both short-and long-term sharing opportunities, as 
well as working through technical coexistence issues.
Universal Service Fund & E-Rate
    The National Broadband Plan and subsequent research have identified 
the lack of digital literacy among low-income Americans as a major 
barrier to broadband adoption. To address this, the Commission proposed 
implementing and operating a digital literacy program through the E-
Rate program's administrative structure. The FCC has proposed $50 
million in annual funding over a four year period and that such funds 
would be provided through saving from the restructuring of the Lifeline 
program. While I'm a strong advocate for a greater focus on improving 
digital literacy to spur broadband adoption, I'm concerned about the 
impact this proposed program will have on the E-Rate program, if it is 
administered through it.

    Question 24. I'm concerned the proposed Digital Literacy program 
will be difficult to monitor. With E-Rate, it is possible and cost-
effective to send auditors to school and library sites to ensure 
applicants have actually purchased and installed the equipment for 
which they received E-Rate support and providers have actually 
delivered promised services. By contrast, it seems it may be difficult 
for auditors to determine this proposed digital literacy initiative's 
funds have actually been spent on courses. Can you tell me how USAC 
could properly audit this digital literacy initiative?
    Answer. In reforming the various components of Universal Service, 
combating waste, fraud, and abuse is a top priority. Any new program 
must have measures in place to ensure appropriate accountability, such 
as requirements that would enable auditors to verify that funds have 
been used appropriately. In the Further Notice of Proposed Rulemaking, 
the Commission sought comment on the reporting obligations that should 
be tied to such funding.
Competitive Access to Spectrum
    The ``spectrum crunch'' is not exclusive to just one or two 
carriers, it is industry wide. And while the top four carriers provide 
wireless service to 90 percent of the total subscribers in the U.S., 
more than 30 million other subscribers use someone else. As you know, 
Section 309(j)(3) of the statute (47 U.S.C. 309(j)(3)) requires 
Commission to promote ``economic opportunity and competition'' by 
``disseminating licenses among a wide variety of applicants'' including 
small businesses, rural carriers, and minority and woman-owned 
businesses.

    Question 25. How should the FCC ensure, in a fair and competitive 
manner, that all carriers--large and small--have adequate access to 
this critical but finite resource?
    Answer. I can assure you that the Commission will carefully 
consider all of our statutory requirements and use the mechanisms 
available to us to carrying out future auctions in a way that ensure a 
competitive, vibrant wireless market.

    Question 26. Several countries have recently held or plan to hold 
spectrum auctions to make more spectrum available for next generation 
wireless communications and broadband. Some of these countries have 
applied certain conditions to their auctions rules. For example:

  1.  In its 4G auction, France's ARCEP provided bidding preferences to 
        carriers that agreed to host MVNOs on its networks and had 
        enhanced rural build-out requirements. It also required roaming 
        agreements--to a losing bidder--for any carrier that won more 
        than one frequency block.

  2.  Germany's regulator, Bundesnetzagentur, applied rural build-out 
        requirements for its 800 MHz auction and placed bidding 
        restrictions on certain carriers.

  3.  The Netherlands reserved two spectrum blocks in the 800 MHz band 
        and one in the 900 MHz band for new entrants.

  4.  Canada, in its 2008 AWS auction, set aside spectrum for a new 
        entrant.

  5.  Czech Republic's CTU has reserved the 1.8 GHz block for a new 
        entrant

  6.  Ofcom has proposed spectrum caps in its upcoming LTE spectrum 
        auction.

  7.  Australia has proposed spectrum caps for its upcoming auction.

    It should be noted that several of these auctions ended up 
exceeding revenue expectations. I'm not advocating for the 
implementation of any conditions on any future auctions but I'm curious 
as to why these countries deemed it necessary to apply such conditions 
in their auctions rules? Do you believe the FCC should closely 
examination the recent 4G auctions in other countries to assist in 
determining how best to design future domestic auctions?
    Answer. I am committed to an auction process that is the result of 
an open, transparent, inclusive, fact-based, data-driven approach that 
is guided by economics and engineering. The Commission will take into 
consideration input from all parties and entities that have ideas on 
how best to structure auctions, including structures that may have been 
used in international auctions. We are open to all factors that can 
make future auctions successful once we have the opportunity to examine 
all the evidence.

    Question 27. As you know, Section 309(j)(7) of the statute (47 
U.S.C. 309(j)(7)) expressly prohibits the Commission from using the 
expected revenue from a spectrum auction as a basis for determining the 
public interest of frequency assignments. Furthermore, Congress, in 
H.R. Rep. No. 111, 103d Cong., 1st Sess. 258 (1993), emphasized that 
``important communications policy objectives should not be sacrificed 
in the interest of maximizing revenues.''
    While there is broad agreement auctions are the best mechanism to 
distribute spectrum licenses, is there too much emphasis currently 
being placed on maximizing auction revenues instead of the longer term 
economic benefit that may result? How might such skewed focus on 
proceeds hinder achieving the strategic goals necessary for the long 
term health of the spectrum ecosystem?
    Answer. Auctions have resulted in over $50 billion of revenue to 
the U.S. Treasury and unleashed hundreds of billions of dollars in 
benefits for our economy since Congress granted such authority. Through 
the Mobile Action Plan, the Commission is exploring an ``all of the 
above'' approach that includes freeing up more spectrum, but also more 
efficient uses of spectrum and new ways to manage spectrum that are not 
focused on auctioning exclusive licenses resulting in revenue. 
Spectrum, whether auctioned or utilized through sharing or on an 
unlicensed basis, has been proven to lead to substantial economic value 
well beyond one-time revenues raised through an auction.
Spectrum Efficiency Metrics
    One of the primary, long-standing goals of the FCC has been to 
promote more efficient use of spectrum. The FCC's 1999 Spectrum Policy 
Statement highlighted ``with increased demand for a finite supply of 
spectrum, the Commission's spectrum management activities must focus on 
allowing spectrum markets to become more efficient.'' and Strategic 
Plan for FY 2003-2008 (published in 2002) indicated its general 
spectrum management goal is to ``encourage the highest and best use of 
spectrum . . .''
    In its 2002 report, the Spectrum Policy Task Force developed three 
definitions: spectrum efficiency, technical efficiency, and economical 
efficiency. However, the SPTF concluded ``it is not possible, nor 
appropriate, to select a single, objective metric that could be used to 
compare efficiencies across different radio services.''

    Question 28. In the FCC's search to free up more spectrum for 
wireless broadband, how does the FCC effectively determine and compare 
the spectral efficiency of different types of radio-based services when 
targeting various frequencies for reallocation?
    Answer. The Commission has not applied a single efficiency metric 
for different types of services. In fact, the Technical Advisory 
Council (TAC) considered such metrics and determined that a single 
metric to compare spectral efficiency among different services is not 
feasible. The TAC made a number of recommendations for improving 
overall spectral efficiency, such as increasing sharing among services, 
which are under consideration.

    Question 29. Does the FCC use network density as a component of its 
spectrum efficiency metric? If not, given the FCC already imposes 
build-out requirements to licensees, should the FCC explore requiring 
network density guidelines too as a way to promote more efficient use 
of spectrum?
    Answer. Operators continue to explore how best to manage their 
networks and I encourage them to be as efficient as possible, taking 
all potential solutions into consideration. I am very excited about the 
opportunity for small cells to significantly increase the density of 
network deployment and the efficiency of spectrum use. The Commission 
is working with NTIA on enabling small cells in the 3.5-GHz band, which 
could free up 100 MHz of spectrum for wireless broadband. I intend to 
propose to my colleagues an item on small cell use in the 3.5 GHz band 
and will continue to explore other opportunities for technology that 
could enhance spectrum efficiency.

    Question 30. Does the FCC have any additional data on network 
density comparisons of the U.S. in relation to other countries?
    Answer. We do not.
Resolving the ``Spectrum Crunch'' Through Technology
    I'm concerned there is not enough focus on the role of technology 
in meeting the growing demand for wireless network capacity. An Ofcom 
report rightfully points out increasing wireless network capacity 
depends on a combination of ``spectrum, technology, and topology.'' 
Given the challenges we face with reallocation, I believe technology 
will play an even more prominent role.
    For example, research by Ofcom found that early 4G mobile networks 
will be 230 percent more spectrally efficient than 3G networks and that 
efficiency will increase to 450 percent by 2020. Technologies like 
dynamic spectrum access and cognitive radio can considerably improve 
utilization by allowing more aggressive spectrum sharing, and, though 
many years off, quantum entanglement and ``twisted'' waves hold amazing 
potential to significantly, and even possibly infinitely, increase 
capacity without any additional spectrum.
    However, I'm concerned about the threats the U.S. is facing in 
regards to its leadership in innovation, primarily with ICT. Many 
reports highlight most of the global R&D growth will be mainly 
attributed to Asian economies--according to NSF, the United States' 
share of global R&D expenditures dropped from 38 percent to 31 percent 
between 1999 and 2009, while the Asia region grew from 24 percent to 35 
percent. In addition, more U.S.-based companies are locating R&D 
operations overseas--the number of overseas researchers employed by 
U.S. multinationals nearly doubled from 138,000 in 2004 to 267,000 in 
2009.

    Question 31. What more can the government do (besides make the R&D 
tax credit permanent) to foster greater R&D investment, primarily in 
ICT?
    Answer. The National Broadband Plan made seven specific 
recommendations on steps the Federal Government could take to promote 
broadband R&D. The recommendations are available at http://
www.broadband.gov/plan/7-research-and-development/
?search=research%2band%2bdevelopment.

    Question 32. Given the benefits that both the private and public 
sectors will reap from more advanced technologies, how can there be 
more collaboration between both sectors to see these technologies to 
fruition?
    Answer. The FCC participates in Wireless Spectrum Research and 
Development (WISARD) group of the National Coordination Office for 
Networking and Information Technology Research and Development to help 
develop priorities, encourage private investment, and develop public/
private partnerships where appropriate.

    Question 33. Does the FCC have any estimates on the amount of 
domestic private sector funding in wireless R&D as a percentage of 
overall industry capital investment? Do you believe there is enough 
domestic R&D investment in advanced wireless communications in 
comparison to other countries?
    Answer. The U.S. leads the world in 3G subscribers by a wide 
margin, and we are leading the world in deploying 4G mobile broadband 
at scale with 64 percent of global LTE subscribers. The wireless 
industry invested $310 billion 2010. The apps economy continues to 
grow, and U.S. firms and developers continue to lead the way. In the 
last three years we've gone from less than 20 percent of our population 
living in areas with broadband infrastructure capable of delivering 
100+ megabits per second to approximately 80 percent, putting us at or 
near the top of the world. Last year we became the first country to 
free up white spaces for unlicensed use, which hold the promise of new 
value-creating breakthroughs on the order of magnitude of Wi-Fi and we 
are continuing to take actions to permit utilization of this spectrum. 
The wireless industry has been key to making this possible but as set 
out in the National Broadband Plan there are R&D opportunities that 
need the attention of Government, which currently provides 
approximately 60 percent of funding for basic research.

    Question 34. How important are Federal programs like NSF EARS and 
DARPA STO to the long-term growth and health of innovation in the 
spectrum ecosystem and should Congress provide greater funding for 
basic research in this area?
    Answer. The NSF EARS and DARPA STO programs both fund studies of 
advanced wireless technologies to facilitate increased use of the 
spectrum. However, the Commission is not in a position to comment on 
programs that it does not oversee.
Spectrum Flexibility
    The National Broadband Plan highlighted the importance of spectrum 
flexibility. The NBP concluded that ``flexibility of use enables 
markets in spectrum, allowing innovation and capital formation to occur 
with greater efficiency'' and ``spectrum flexibility, both for service 
rules and license transfers, has created enormous value.'' That 
innovation and capital formation could be beneficial to addressing the 
challenges that exist in making more affordable and faster broadband 
available in rural areas.
    As you know, Section 336 of the statute (47 U.S.C. 336) allows 
broadcasters to offer ancillary and supplementary services, which 
includes data transmission and interactive materials. Section 336 also 
prescribes the assessment and collection of fees related to such 
service offerings, and the FCC, back in 1998, adopted rules requiring 
broadcasters to pay a fee of 5 percent of gross revenues from such 
services for which they charge subscription fees or other specified 
compensation.

    Question 35. If we need to get broadband into rural areas, why not 
let other licensees, like broadcasters, attempt to close the digital 
divide that exists? Mainly, since they may have infrastructure already 
in place to build off of.
    Answer. Broadcasters are not precluded from offering broadband, 
provided they operate within the context of the current rules for 
broadcasting, including paying 5 percent of revenue from ancillary and 
supplementary services to the government.

    Question 36. Last year, I wrote you inquiring why a local 
broadcaster in Oregon (WatchTV) was denied an experimental license. It 
is my understanding that the broadcaster re-filed his application but 
it remains pending two years later. What is the current status of this 
pending application?
    Answer. The application remains under review in the context of the 
changes anticipated for the UHF band, including channel repacking.

    Question 37. How many other experimental license applications 
related to broadband services have been denied or are still pending?
    Answer. The Commission is committed to expeditiously reviewing and 
approving experimental license applications, while also performing our 
important role of ensuring that the licenses would comply with our 
rules.
    The Commission processed approximately 1600 experimental license 
and special temporary authority applications last year. At any given 
time, the Commission typically has about 230 pending applications that 
are undergoing review and coordination. The Commission tracks 
applications for experimental licenses by the frequencies that are 
used, not the category of technology or service such as broadband or 
narrowband.
    Staff has informed me that they believe that most experiments for 
developing commercial wireless technology in the last year have been in 
the 700 MHz band where approximately 90 applications for experimental 
licenses were filed for development of commercial wireless broadband 
technology. Approximately 5 such applications are pending at this time.
    In addition, approximately 70 experimental licenses associated with 
the public safety bands within the 700 MHz block have been approved. 
Applications for experimental licenses are rarely denied and instead 
the Commissions staff works with the applicant to agree on conditions 
that will allow the experiment to go forward.
    The Commission is committed to expeditiously reviewing experimental 
license applications.

    Question 38. If there is concern about ``unjust enrichment'' if 
broadcasters provide broadband, why isn't there the same concern with 
wireless communications licenses issued prior to 1994? Wouldn't the 5 
percent of gross revenue that broadcasters have to pay if they add 
broadband to their signals fairly compensate the government, mainly 
since such service would have to be ``ancillary and supplementary'' to 
their broadcast television signal?
    Answer. Even though the FCC adopted rules to avoid unjust 
enrichment, some parties have still raised concerns that such 
flexibility would be unfair since the broadcasters weren't assigned the 
spectrum via an auction. However, as you know, the FCC has only 
auctioned licenses since 1994 and prior to that used comparative 
hearings and then lotteries for frequency assignments--including 
licenses for wireless communications.
Q16--Spectrum Fees
    Every administration since President Clinton has requested spectrum 
fee authority from Congress. Recommendation 5.6 of the National 
Broadband Plan suggested ``Congress should consider granting authority 
to the FCC to impose spectrum fees on license holders and to NTIA to 
impose spectrum fees on users of government spectrum'' to address 
inefficiencies in spectrum allocations and promote more efficient use 
of spectrum.
    Ofcom imposed similar fees (known as Administrative Incentive 
Pricing) in the late 1990s and issued a report in 2009 that concluded 
the fees ``met its primary objective in helping to incentivise spectrum 
users to consider more carefully the value of the spectrum they use 
alongside that of other inputs, and to take decisions that are more 
likely to lead to optimal use of the available spectrum.'' The report 
also ``found no evidence to suggest that the application of AIP has 
given rise to material adverse consequences for spectrum efficiency.''

    Question 39. Should Congress grant the FCC and NTIA spectrum fee 
authority either on all licenses and assignments or just on non-
auctioned licenses, mainly if the FCC moves to implement greater 
flexibility of spectrum use? Do you believe the FCC can strike the 
proper balance in applying spectrum fees to promote more efficient use 
of spectrum but not to a point that it presents an undue financial 
burden to the licensee?
    Answer. As noted in the National Broadband Plan Recommendation 5.6, 
our current policy leads to a situation where there is inadequate 
consideration of alternative spectrum uses, creating artificial 
constraints on spectrum supply and a generally inefficient allocation 
of spectrum resources. One way to address these inefficiencies is to 
impose a fee on spectrum, so that the licensees take the value of 
spectrum into account. The NBP requested that Congress grant the FCC 
and NTIA the authority to impose spectrum fees, but only on spectrum 
that is not licensed for exclusive flexible use.
    The Bush Administration requested legislative authority for the 
fees from 2001-2008, while the current Administration has repeated this 
request during the past three appropriations cycles. Any fee system 
authorized should avoid disrupting public safety and provide enough 
flexibility to deal with multiple budget cycles. The FCC will implement 
whatever plan Congress mandates, and ensure a fair and efficient 
process.

    Question 40. Some parties have opposed spectrum fees calling them a 
tax. But what is the difference between a spectrum fee that is paid 
annually and a licensee paying a lump sum at an auction? If a spectrum 
fee is a tax, isn't an auction payment a tax as well since it too goes 
to Treasury? Or are both not considered taxes since they are transfers 
to government for the right to use a public good?
    Answer. A fee applies to a government action (such as licensing) 
that bestows a benefit on the applicant, not shared by other members of 
society, while a tax is not tied to the benefits received. See National 
Cable Television Ass'n v. FCC, 415 U.S. 336, 340-341 (1974). Congress 
has authorized the FCC to collect and process regulatory fees to cover 
the costs of its operations. Congress has also directed that proceeds 
from spectrum auctions are deposited in the U.S. Treasury.

    Question 41. If not spectrum fees, how should the FCC impose 
economic fairness between licensees that are/were awarded via auctions 
versus those that were awarded via comparative hearings and lotteries?
    Answer. Over the years, Congress has provided the Commission with 
various tools to bring spectrum to market. The FCC will implement 
whatever plan Congress mandates and ensure a fair and efficient 
process.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Jim DeMint to 
                        Hon. Julius Genachowski
    Question 1. How many complaints about violations of the ``Open 
Internet Order'' has the FCC received since the regulations were 
published? Please briefly explain the nature of any such complaints.
    Answer. The Commission has received no formal complaints. In May, a 
company called L2Networks filed an informal complaint against Albany 
Water, Gas & Light Commission alleging violation of the open Internet 
rules. L2N says that Albany WG&L has wrongly accused L2N of engaging in 
unlawful theft of service ``by simply delivering over-the-top-internet-
based VoIP services . . . to an existing Albany Water, Gas & Light 
Commission Internet customer,'' and that this charge ``is in effect an 
unconventional attempt to block Internet-based `lawful content, 
applications, services, or non-harmful devices.' ''
    In addition, we have received occasional consumer complaints (on 
average, 1 or 2 a week) that could implicate the Open Internet rules. 
These include, for instance, possibly discriminatory application of a 
data cap; service throttling; web-site blocking; port blocking; and 
refusal to allow software updates. As noted in the Open Internet order, 
such informal consumer complaints do not typically result in written 
orders, but the Enforcement Bureau examines trends or patterns in 
complaints to help monitor market developments.

    Question 2. Would the FCC's network non-duplication, syndicated 
program exclusivity, and sports blackout rules be necessary if existing 
compulsory copyright licenses available to MVPDs when distributing 
certain broadcast video content were repealed?
    Answer. Although there could be some interaction between the FCC 
rules and existing statutory copyright licenses, the FCC rules have 
been developed to promote policies of the Communications Act that are 
separate from, and independent of, the statutory license provisions of 
the copyright laws.

    Question 3. When MVPDs negotiate carriage contracts with cable 
networks--such as TBS, Discovery, ESPN, and Food Network--is copyright 
licensing included?
    Answer. The Commission does not have knowledge of the private 
contractual discussions between MVPDs and cable programmers, and those 
contracts likely vary widely. Presumably, such deals generally contain 
copyright components to provide the MVPD with the ability to carry the 
network on its system.

    Question 4. Regarding carriage negotiations between MVPDs and cable 
networks, is it fair to say there is a well-established mechanism in 
the marketplace--today--to negotiate and ``clear'' copyright licenses 
associated with such carriage?
    Answer. The Commission does not have knowledge of the private 
contractual discussions between MVPDs and cable programmers. Based on 
existing MVPD channel line-ups, it does appear that those entities are 
able to negotiate deals for the carriage of the channels on MVPD 
systems.

    Question 5. When will the FCC release its next video competition 
report? Has the FCC under your leadership met its statutory obligations 
regarding video competition reports? Will the FCC conduct a review of 
its video regulations to determine whether any should be eliminated or 
modified to reflect today's marketplace?
    Answer. On July 20, 2012, the Commission released the 14th Video 
Competition Report. The Report had not been released for several years 
prior to my nomination to the Commission. As such, there was a need to 
update the record and collect the relevant data before issuing a new 
Report. In 2009, the Commission solicited 2007, 2008, and 2009 data, 
information, and comment for the period 2007, 2008, and 2009 similar to 
what the Commission requested for previous reports. Thereafter, the 
Commission initiated a comprehensive review of the way in which it uses 
data, including data used for its statutory competition reports. In the 
course of that review, the Commission determined that the data 
submitted in response to the 2009 notices of inquiry should be 
supplemented. Thus, on April 21, 2011, the Commission released a 
Further Notice of Inquiry, requesting additional data for 2009, seeking 
data for 2010, and encouraging the submission of comparable historical 
data for 2007 and 2008.
    As part of our reform effort, we have been reviewing all of the 
Commission rules, with the elimination of 222 obsolete regulations. A 
comprehensive review of the video regulations would be appropriate 
after the completion of the LPTV digital transition in 2015.

    Question 6. Is it true that, regarding regulatory fees, the 
Commission has not fundamentally changed its assessment methodology 
since 1994? Is it true that the Commission issued an NPRM to overhaul 
this system in 2008? If so, when will that proceeding be complete?
    Answer. The Commission conducts a rulemaking yearly to ensure the 
use of a fair and balanced process for collecting the Section 9 fees 
pursuant to applicable appropriations legislation. The Commission 
issued an NPRM to conduct a more thorough rebalancing in 2008. No 
further action was taken at that time. There is currently an item on 
circulation seeking further input from all stakeholders on rebalancing 
regulatory fee structure. I expect this step in the proceeding to begin 
very soon.

    Question 7. When was the current standard for television 
broadcasting developed? What legal, regulatory, or technical obstacles 
prevent broadcasters from adopting new and innovative technologies and 
standards?
    Answer. The ATSC digital broadcast standard was developed in the 
early 1990s by an alliance of public and private entities. Based on 
this private agreement, the Commission incorporated the standard into 
our rules. The standard itself is flexible, which allows stations to 
provide multiple audio tracks and Mobile DTV signals. We are aware that 
the broadcast industry is considering the formulation of a new or 
modified digital television standard, and if such a standard is brought 
to the Commission we will consider it, as the Commission commonly does 
to encourage and accommodate innovation. It is important to note that 
the existing standard is incorporated into the equipment used today to 
broadcast and receive digital television. Consideration of any new 
standard therefore would have to include consideration of transitional 
issues

    Question 8. In FY 2011, how much did the FCC spend on salaries and 
operations directly related to licensing issues?
    Answer. The FCC does not maintain specific salary and operational 
estimates for activities related to licensing actions. These activities 
are included in the FCC's general budget request, which provides budget 
estimates by bureau and general operations.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
                        Hon. Julius Genachowski
    Question 1. An important issue with respect to Universal Service 
Fund Reform that has not been addressed is the industry contribution 
mechanism that pays for USF subsidies.
    Mr. Genachowski, will you conclude contribution reform during your 
tenure as Chairman? Could you commit to completing it sometime this 
year?
    Answer. Universal service reform is part of a broader agency effort 
to modernize outdated programs, eliminating unnecessary rules and 
improving efficiency and effectiveness. The current contribution system 
imposes significant compliance costs and creates inconsistencies and 
market distortions. I look forward to working with my fellow 
Commissioners and with all stakeholders in pursuit of these goals. I 
agree with the sentiment expressed by Commissioner McDowell at the 
hearing that, while the FCC's inbox is full with many other matters, we 
must conclude our proceeding on universal service contribution reform 
as soon as possible.

    Question 2. Congress recently passed spectrum auction legislation 
and the Commission will begin setting rules for implementation perhaps 
as early as this fall. I'm hearing from some low power television 
(LPTV) interests in my state who are concerned about how the FCC will 
handle low power stations when the FCC conducts their incentive 
auctions, and subsequently goes through a process of clearing channels 
31-51. Low power TV stations provide a valuable service, such as local 
public meetings and religious broadcasting. LPTV has been the entry 
point for small businesses into the broadcast market and today, many 
LPTV owners are small businesses who work hard to continue to serve 
their local communities with news and resources aimed at the community. 
Would you support rules that allow LPTV to survive. What assurance can 
you provide that low power television stations will be protected?
    Answer. I fully appreciate and recognize the news, information and 
programming that LPTV stations provide to its customers. I have 
instructed Commission staff to continue to work with the LPTV community 
as we work through implementation of the Middle Class Tax Relief and 
Job Creation Act of 2012. As you know, LPTV stations are secondary 
services to full power TV stations, and Congress did not provide 
additional protections for LPTV stations in the Middle Class Tax Relief 
and Job Creation Act of 2012.

    Question 3. Many telecom providers are now saying that many states 
and possibly thousands of smaller markets are going to miss out on the 
$300 million in 2012 broadband support, because the FCC denied 
eligibility for funding in areas served even partially by fixed 
wireless companies. In areas that may not be adequately served by fixed 
wireless, is the FCC prepared to review requests for waivers?
    Answer. Phase I of the Connect America Fund provides up to $300 
million in support for price cap carriers to spur the expansion of 
broadband in their service territories. That funding supplements the 
approximately $1 billion in support price cap companies already 
received under the previous universal service support mechanisms, and 
is focused on promoting rapid new deployments to currently unserved 
areas. On July 24, 2012, seven carriers filed with the Commission their 
plans to use almost $115 million they were awarded under the Connect 
America Fund. The carriers that accepted funding agreed to deploy 
broadband in unserved areas covering more that 17,000 census blocks in 
37 states, including 180 locations in South Dakota.
    Carriers that accepted the funding must meet strict requirements 
for deploying broadband to areas that, among other things, are 
currently unserved by terrestrial fixed broadband according to the 
National Broadband Map. To the extent an area is already served by 
another provider of terrestrial fixed broadband--whether fixed 
wireless, cable, or the price cap carrier itself--it is not eligible 
for CAF Phase I support.
    One carrier recently filed a petition for waiver relating to fixed 
wireless service territories as reflected on the National Broadband 
Map, and Commission staff is currently evaluating that waiver request.

    Follow-on: With respect to the mechanisms in place to address 
unclaimed money for broadband support, please describe these mechanisms 
in detail. Will you retain the funding for price cap rural broadband, 
which is the Nation's greatest area of broadband need?
    Answer. The Commission stated in the Transformation Order that any 
funds not claimed in Phase I of the Connect America Fund would be used 
to advance the Commission's broadband objectives pursuant to its 
statutory authority. We are considering how best to use unclaimed CAF 
Phase I support. As part of that process, we are reviewing two pending 
waiver requests from price cap carriers.

    Question 4. Mr. Genachowski, you told the Senate Appropriations 
Committee on May 9, 2012, that the FCC will have to demonstrate 
``flexibility'' in addressing the waiver applications of individual 
small telephone companies from the applicability of the universal 
service distribution regression model. What exactly does 
``flexibility'' mean in that context?
    Answer. By flexibility, I mean that the waiver process must include 
a data-driven, case-by-case analysis of individual company 
circumstances. In addition, I have circulated an Order to my fellow 
Commissioners that would modify the waiver standard to take a loss of 
broadband service, not just voice, into consideration.
    I strongly encourage carriers considering applying for a waiver to 
contact Wireline Competition Bureau staff regarding their specific 
situations and to seek guidance on the waiver process as early as 
possible if they are considering applying.

    Question 5. The recently released universal service distribution 
regression model required a number of data points from companies and, 
in some cases, there may have been errors in the inputting of the data. 
As a result, I understand that if the mapping information is incorrect 
the Commission will undertake an expedited waiver process and not 
charge the impacted company any related fee. However, that leaves other 
companies, which may be facing dramatically lower levels of support 
based on another data point, having to spend thousands of dollars in 
application fees to simply get the FCC to correct an error. Is that 
fair?
    Answer. Any waiver application to correct data in the spending 
benchmarks will be expedited and processed without a fee. As you note, 
the Bureau has acted quickly to consider these waiver requests. For 
example, on June 26, 2012, the Wireline Competition Bureau granted 
requests for waiver to correct the study area boundaries of two 
carriers. This action was taken less than two weeks after the waiver 
requests were received.

    Follow-on: Can you commit that if a company seeks a waiver based on 
incorrect data, the Commission will waive the requisite fee and resolve 
it on an expedited basis?
    Answer. Yes.

    Question 6. Chairman Genachowski, on May 9, 2012, during your 
appearance before the Senate Appropriations Committee, you told 
senators that from early on in the USF reform process the FCC and RUS 
worked closely together to forestall any adverse unintended 
consequences resulting from changes to universal service distributions. 
Can you give the Committee a few examples of changes to the USF reform 
order that reflected input from RUS?
    Answer. Commission staff has worked closely with RUS throughout the 
USF reform process to understand their concerns and to estimate the 
potential impact of different reform options on RUS borrowers, and we 
continue to do so. The Commission recognized and addressed concerns 
about past investment and outstanding debt by providing for a waiver 
process for relief from the support reductions. Where a provider can 
show that rule changes endanger existing service--including situations 
where a carrier needs to pay off debt for past investments--the 
Commission will consider waiver requests on an individualized, fact 
intensive basis. In addition, the information that carriers should 
submit when requesting a waiver explicitly includes information 
regarding outstanding loans, including RUS loans.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Roger F. Wicker to 
                        Hon. Julius Genachowski
    Question 1. At the FCC Oversight Hearing, you offered to respond in 
writing with an update on the timing for the lower 700 MHz 
interoperability proceeding. Could you please provide this update, as 
well as a specific answer on when you intend to take final action?
    Answer. The initial petition for rulemaking was filed in September 
2009. The Notice of Proposed Rulemaking was adopted in March 2012, with 
comments due June 1, 2012, and reply comments due July 16, 2012.

    Question 1a. After reviewing the comments received, will the 
Commission take final action this year?
    Answer. The comment cycle in this proceeding closed on July 16 and 
staff is engaged in evaluating the record. I continue to encourage 
industry to work towards a solution, even as staff evaluates the 
record. At this time it would be premature to predict what action the 
Commission may take and when, but we are working expeditiously to 
address this critical issue.

    Question 2. Is it true that your office has circulated an Order to 
dismiss/deny all pending 700 MHz public safety waivers?

    Question 2a. If so, how will the dismissal/denial of these waiver 
requests speed the deployment of an interoperable public safety 
network?

    Question 2b. Why should first responders in a state ready to deploy 
a network have to wait several more years until FirstNet is 
operational?
    Answer. A draft order addressing the pending 700 MHz public safety 
waivers has been circulated to the Commissioners, but it is currently 
under discussion and has not yet been adopted.
    Although the Commission has granted waivers permitting early 
deployment of public safety broadband networks in the public safety 
broadband spectrum and deployment of narrowband networks in the 
spectrum, a number of additional waiver petitions have remained pending 
as of Feb. 22, 2012, the effective date of the Middle Class Tax Relief 
and Job Creation Act of 2012. In the Act, Congress required the 
Commission to reallocate the D block for use by public safety entities 
and to assign a license for both the D block and the existing public 
safety broadband spectrum to the newly established First Responder 
Network Authority (FirstNet). Further, the Middle Class Tax Relief and 
Job Creation Act of 2012 directs the FCC to ``take all actions 
necessary to facilitate the transition'' of the existing public safety 
broadband spectrum to FirstNet. Upon its establishment, FirstNet is 
responsible for deploying and operating the nationwide public safety 
broadband network.
    Because of the Middle Class Tax Relief and Job Creation Act of 
2012's mandate for the FCC to facilitate the transition of the public 
safety broadband spectrum and the D block to FirstNet to hold the 
single nationwide public safety wireless license and to take all 
actions to build, deploy and operate this network, the Commission 
should consider minimizing impediments to the reallocation and 
licensing processes involved, in a manner that serves the public 
interest. The Commission's mandate includes balancing consideration of 
public interest factors that could support the grant of the waiver 
against the encumbrances that would be imposed on the spectrum slated 
by Congress for assignment to FirstNet.

    Question 3. In your opinion, how long will it be before FirstNet is 
operational?

    Question 3a. How long before it has been deployed to 50 percent of 
the Nation's geography?
    Answer. Congress gave responsibility over FirstNet implementation 
to NTIA in the Middle Class Tax Relief and Job Creation Act of 2012. 
Accordingly, the NTIA is in a better position to answer that question.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Roy Blunt to 
                        Hon. Julius Genachowski
    Question 1. The Federal Government is the largest spectrum user in 
the country today. It seems only logical that some of the commercial 
demand for spectrum will need to be met by using spectrum licenses 
which are currently held by the Federal Government. What is the 
Commission currently doing, and what is their long term plan, to 
facilitate a process to make some government spectrum available in the 
near term at auction? We spoke previously about an idea of government 
users sharing spectrum with commercial providers. Could you expand on 
that, and address how a sharing concept fits in with the Commission's 
previous auctions which heavily emphasized licensing nationwide bands 
for commercial use?
    Answer. Meaningful spectrum sharing among government and commercial 
users could substantially increase the efficiency of spectrum use, 
including by enabling use for commercial broadband of up to 95 
megahertz of spectrum in the 1.7-GHz band. Recently, the Commission has 
partnered with the National Telecommunications and Information 
Administration to test LTE sharing in the 1755-1780 MHz LTE band, which 
could allow us to pair it with existing (AWS-3) mobile broadband 
spectrum at 2155-2180 MHz to enhance its value and usefulness prior to 
auctioning it as required within the next three years.
    With the support and on behalf of the wireless industry, T-Mobile 
has applied for an experimental license in the 1755 MHz band. T-Mobile, 
CTIA and other participants are cooperating with DOD through NTIA. In 
addition, small cells can significantly increase the density of network 
deployment and the efficiency of spectrum use. The Commission is 
working with NTIA on enabling small cells in the 3.5-GHz band, which 
could free up 100 MHz of spectrum for wireless broadband.

    Question 2. Knowing that the Commission has yet to set up the exact 
rules and framework for how this next broadcast spectrum auction will 
proceed, I'm curious if you could at least address a concern of mine 
and I'm sure other members of this panel about how the process will 
affect low-power broadcasters in our states, specifically in rural 
areas? Do you foresee a scenario where the FCC will have to do more 
than one round of voluntary vacating and repacking, for instance if the 
initial process yields only a small amount of freed up spectrum?
    Answer. As you note, it is still early in the process, but I 
understand your concern and I can assure you that we will continue to 
work with the LPTV community to address their concerns. LPTV stations 
are secondary services to full power TV stations, and Congress did not 
provide any additional protections for LPTV stations in the recently 
enacted Middle Class Tax Relief and Job Creation Act of 2012.

    Question 3. The Commission has told the D.C. Circuit that one 
reason it has been unable to complete the special access proceeding is 
the lack of data provided by the competitive service providers in 
response to the Commission's first data request. How many competitive 
local exchange carriers responded to your first request and what 
efforts has the Commission made since then to complete the record and 
obtain sufficient data?
    Answer. Fourteen competitive LECs submitted information in response 
to the voluntary data requests. Since that submission, the Commission 
has been actively reviewing the record to develop a more comprehensive 
data collection on special access issues.

    Question 4. The Commission's first data request included request 
for network maps and other data that would permit the Commission to 
identify the areas where competitors have deployed their own networks 
and can therefore offer competitive special access services. In order 
to ensure that the Commission's processes are fact driven and 
analytically sound, what effort has the Commission made to obtain 
network maps from the carriers that did not disclose the locations of 
their competitive facilities?
    Answer. An upcoming comprehensive data collection will gather 
information that is necessary to complete the special access 
proceeding.

    Question 5. After reviewing responses to its first data request is 
the Commission satisfied that it has an accurate picture of these 
different platforms and how they compete with one another?
    Answer. While the initial data requests provided valuable 
information, we will need additional data from all relevant providers 
to complete this proceeding.

    Question 6. Is the Commission able to review accurately the 
functioning of this market with the data it has received to date?
    Answer. While the initial data requests provided valuable initial 
information, we will need additional data from all relevant providers 
to complete this proceeding.

    Question 7. I understand from the record that there are several 
providers offering competitive special access services using wireless 
technologies. Additionally, I also know that in many areas of the U.S. 
utility companies have networks where they offer competitive special 
access services. How many of these providers responded to the 
Commission's data requests?
    Answer. No fixed wireless providers or utilities responded to the 
voluntary data requests.

    Question 8. From these submissions, is the Commission able to 
accurately assess the functioning of these types of markets and their 
place in the overall special access service networks?
    Answer. While the initial data requests provided valuable 
information, we will need additional data from all relevant providers 
to complete this proceeding.

    Question 9. Finally, over the past two years, telecommunications 
networks, and specifically the special access network is experiencing a 
dramatic shift toward Ethernet services and away from legacy services. 
The Commission's initial data requests asked for data from 2010. With 
these large scale shifts toward Ethernet for backhaul use in the past 
two years, has the Commission followed on with further data requests, 
or does it plan to request this new data, to reflect this new build-out 
trend?
    Answer. Yes, we intend to seek additional data through our 
comprehensive data request

    Question 10. How will the Commission look to marry the special 
access technologies in use today?
    Answer. We are looking at all relevant technologies and their uses.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. John Boozman to 
                        Hon. Julius Genachowski
    Question 1. Does the Commission intend to apply the new public--
political file requirements to other platforms, and not just 
broadcasters? If Yes, then when? If No, then why not?
    Answer. The Commission has not yet decided whether or when to 
require radio stations and MVPDs to transition their public files from 
paper to online. One of the largest MVPDs, Time Warner Cable, has 
voluntary placed its files on political advertising online for the last 
two years. As we gain more experience with the TV stations, we will 
consider whether to apply the new online file requirements to radio 
stations and other MVPDs.

    Question 2. What steps have you directed to reduce spending and to 
operate in a more cost-conscious manner? What cost-savings have these 
measures realized?
    Answer. The Commission has taken a number of steps to save costs 
and eliminate unnecessary spending. For example, we expect to reap 
significant cost saving efficiencies from a number of IT and other 
initiatives while improving performance. The Agile Cloud Provisioning 
and Management initiative will save $1.45 million annually and improve 
transparency, enabling greater access for consumer and industry. The 
Data Center consolidation follows OMB directives on consolidation and 
virtualization and will eliminate redundancies between Gettysburg and 
DC sites, while ultimately saving $1.1 million annually. Other examples 
include:

   Rent--A savings in rent in the amount of $1.4 million due to 
        reducing the size of FCC headquarters and field office space.

   Contracts Services--$4.1 million. This savings includes a 
        reduction in contracts throughout the FCC, with significant 
        savings identified in IT services contracts, administrative 
        services, human resources and financial operations contracts. 
        (see charts below)

   Equipment--Overall FCC equipment costs were reduced by 
        $500,000. The majority of these savings are in ITC software and 
        hardware.
                                 ______
                                 
 Response to Written Questions Submitted by Hon. Patrick J. Toomey to 
                        Hon. Julius Genachowski
    Question 1. What is the justification for keeping the Title II 
docket open?
    Answer. The Commission routinely leaves notice of inquiry 
proceedings open for extended periods so that the public can comment as 
appropriate. In the last year and a half, this docket has received 19 
new filings, including as recently as last month.

    Question 2. When are you planning to close the Title II docket?
    Answer. See response above.

    Question 3.Will you close the Title II docket if the D.C. Circuit 
Court of Appeals upholds the Open Internet Order?
    Answer. It would be premature to comment on that issue at this 
time.

    Question 4. According the FCC's National Broadband Plan, 95 percent 
of the population lives in housing units with access to broadband. Do 
you believe broadband is being deployed to Americans in a reasonable 
and timely manner?
    Answer. Congress directed the FCC to conduct an ``inquiry 
concerning the availability of advanced telecommunications capability 
to all Americans,'' and to ``determine whether advanced 
telecommunications capability is being deployed to all Americans in a 
reasonable and timely fashion. Last year's Broadband Progress Report 
showed that more than 20 million Americans lived in areas where they 
still could not get broadband. That is not reasonable or timely, and it 
is far short of ``all'' Americans. Commission staff are currently 
preparing this year's Broadband Progress Report.

    Question 5. After receiving certain FCC approvals, LightSquared 
invested billions of dollars in a proposed 4G wireless network before 
the FCC then prevented them from offering service due to interference 
concerns with GPS devices that could not be resolved to the 
Commission's satisfaction. There have been accusations that 
LightSquared received preferential treatment by the Commission in 
obtaining certain waivers. LightSquared, however, claims they were 
treated unfairly when the Commission revoked their waiver and blocked 
them from building out their planned network. Please address both 
accusations and give a detailed explanation of the process that led to 
approval and then withdrawal of the ATC waiver.
    Answer. The decisions of the Commission's bureaus with respect to 
LightSquared have been determined by the facts and arguments in the 
record.
    I have included below a detailed summary of the procedural history 
of the LightSquared matter prepared by Commission staff:
2001
   Commission issues Notice of Proposed Rule Making to permit 
        mobile satellite service providers to offer an ancillary 
        component in response to requests filed by Mobile Satellite 
        Ventures Inc. and New ICO Global Communications.

   Proposal invites comment on whether the proposed rules would 
        protect GPS systems. See Flexibility for Delivery of 
        Communications by Mobile Satellite Service Providers in the 2 
        GHz Band, the L-Band and the 1.6/2.4 GHz band, Notice of 
        Proposed Rule Making, IB Docket No. 01-185, 16 FCC Rcd. 15,532 
        (2001).
2003
   Commission adopts rules permitting MSS licensees to 
        integrate ATC into their satellite networks to provide mobile 
        service to areas where satellite signals are degraded or 
        blocked (i.e., urban areas and inside of buildings). See 
        Flexibility for Delivery of Communications by Mobile Satellite 
        Service Providers in the 2GHz Band, the L-Band, and the 1.6/2.4 
        GHz Bands, IB Docket Nos. 01-185, 02-364, Report and Order, 18 
        FCC Rcd. 1962 (2003), as modified by Order on Reconsideration, 
        18 FCC Rcd. 13,590 (2003).

   Rules require MSS licensees to offer an integrated satellite 
        and terrestrial service--they must maintain a viable satellite 
        service and cannot offer terrestrial service separately.

   Rules also allow up to 1,725 terrestrial base stations to be 
        deployed in the L-band, which includes the spectrum adjacent to 
        and below the GPS band.
2004
   Commission's International Bureau authorizes SkyTerra 
        (formerly MSV), to offer an integrated MSS/ATC service to users 
        equipped with dual-mode MSS/ATC mobile devices.

   Authorization provides for expansive ATC, including the 
        deployment of thousands of terrestrial base stations. See 
        Mobile Satellite Ventures Subsidiary LLC Application for Minor 
        Modification of Space Station License for AMSC-1, File Nos. 
        SAT-MOD-20031118-00333, SAT-MOD-20031118-00332, SES-MOD-
        20031118-01879, Order and Authorization, 19 FCC Rcd. 22,144 
        (Int'l Bur. 2004).
2005
   Commission modifies the MSS ATC rules in response to 
        petitions for reconsideration of the 2003 Order.

   Adopted rules were (and remain) consistent with the 
        recommendations of the GPS industry and the Executive Branch, 
        which included input from the Department of Defense.

   Commission removes the previously adopted limitation on the 
        number of terrestrial base stations that may be deployed. See 
        IB Docket Nos. 01-185, Memorandum Opinion and Order and Second 
        Order on Reconsideration 20 FCC Rcd. 4616 (2005) (ATC 
        Reconsideration Order).

   Extensively discusses the potential overload interference 
        from L-band (SkyTerra) ATC base stations to Inmarsat mobile 
        satellite terminals as well as potential overload interference 
        from 2 GHz ATC mobile devices operating above 1995 MHz to PCS 
        mobile receivers operating in the adjacent band below 1995 MHz.

   No one raises receiver overload interference issue.
2009 (March-April)
   Harbinger and SkyTerra together file an application for 
        transfer of control of SkyTerra to Harbinger.

   SkyTerra subsequently files an application for modification 
        of its authority for an ancillary terrestrial component, 
        including requests for waivers of a number of the Commission's 
        rules for ATC operation.

   Commission invites public comment on both requests, 
        triggering extensive comments.
2009 (July-August)
   GPS industry raises concerns about SkyTerra's application 
        for ATC modifications, stating that the existing out-of-band 
        emissions limits would be insufficient to protect against 
        interference to GPS from LightSquared's planned low power base 
        stations and indoor ``femto-cells.'' Out-of-band emissions are 
        not the same as receiver overload, which is the basis of the 
        current controversy.

   No one raises receiver overload issue.

   SkyTerra and the U.S. GPS Industry Council submit a joint 
        letter to the Commission stating that the out-of-band emissions 
        interference issues had been resolved. No commenter raises any 
        other concerns about GPS interference.
2010 (March 15)
   National Broadband Plan Recommendation 5.8.4 calls for the 
        FCC to accelerate terrestrial deployment in the MSS spectrum.
2010 (March 26)
   Commission's bureaus and offices issue two orders addressing 
        the 2009 Harbinger and SkyTerra requests and comments:

        (First Order) SkyTerra Subsidiary LLC Application for 
        Modification Authority for Ancillary Terrestrial Component, 
        Order and Authorization, 25 FCC Rcd. 3043 (Int'l Bur. 2010).

     Authorizes the transfer of control from SkyTerra to 
            Harbinger, explaining Harbinger's plans to construct a 
            hybrid-satellite-terrestrial network and noting terrestrial 
            component would cover 90 percent of the United States.

     Notes Harbinger's plans to deploy a network that will 
            cover 100 percent of the U.S. population via the satellite 
            component and ultimately over 90 percent of the population 
            via its terrestrial component.

     Observes that if Harbinger successfully deploys its 
            integrated satellite/terrestrial network, it would be able 
            to provide mobile broadband communications in areas where 
            it is difficult or impossible to provide coverage by 
            terrestrial base stations.

     Does not waive or alter MSS/ATC rules.

        (Second Order) See SkyTerra Communications, Inc., Transferor 
        and Harbinger Capital partners Funds, Transferee Applications 
        for Consent to Transfer Control of SkyTerra Subsidiary, LLC, IB 
        Docket No. 08-184, Memorandum Opinion and Order and Declaratory 
        Ruling, 25 FCC Rcd. 3059 (IB, OET, WTB, rel. March 25, 2010).

     Modifies SkyTerra's authorization to provide ATC, 
            applying conditions to address all technical concerns 
            raised in the comment cycle and granting a request to 
            increase the power level of the base stations.

     Commission's bureaus coordinate Order with relevant 
            Executive Branch agencies. Notes DOD's concerns about 
            potential interference to national security systems in 
            certain circumstances and instructs the licensee to 
            continue to work with DOD to resolve these concerns.

     No one raises receiver overload interference issue.
2010: (July-September)
   Commission follows National Broadband Plan recommendations 
        and initiates a rule making to provide greater flexibility to 
        deploy terrestrial service in the mobile satellite service. See 
        Notice of Proposed Rulemaking and Notice of Inquiry, ET Docket 
        No. 10-142, 25 FCC Rcd. 9481.

   GPS Industry Council files comments in September that 
        include reference to the possibility of receiver overload 
        interference to GPS receivers at a distance of about 100 meters 
        from ATC base stations based on state-of-the-art filtering, and 
        notes that for much of the mobile consumer GPS in use, 
        including public safety (e.g., 911cellphones), the harmful 
        interference effect would be somewhat worse than this case.

   GPS Council notes that, ``[i]n earlier Commission 
        proceedings, the Council has worked collaboratively with MSS 
        operators of ATC to seek mutual agreements that facilitate 
        successful MSS ATC operations and avoid interference to the GPS 
        installed base. The Council believes that solutions are 
        available to mitigate the otherwise unavoidable harmful effects 
        described in these comments and looks forward to working 
        collaboratively with interested parties to explore these issues 
        and potential solutions.''
2010 (November-December)
   November 15: LightSquared announces the successful launch of 
        its first next-generation satellite, SkyTerra 1.

   November 18: LightSquared files a request to modify its ATC 
        authority to accommodate its business plan of selling data 
        network capacity at wholesale, rather than retail (as SkyTerra 
        had done). The request seeks to allow wholesale service 
        providers to offer terrestrial-only handsets at the same power 
        levels and conditions previously granted. See LightSquared 
        Subsidiary LLC Request for Modification of its Authority for an 
        Ancillary Terrestrial Component, SAT-MOD-20101118-00239.

   Commission places November 18th request on Public Notice. 
        See Policy Branch Information, Satellite Space Applications 
        Accepted for Filing, Report No. SAT-00738, Public Notice (rel. 
        November 19, 2010); see also LightSquared Subsidiary LLC 
        Request for Modification of its Authority for Ancillary 
        Terrestrial Component, SAT-MOD 20101118-00239, Order, DA 10-
        2243 (IB, Sat. Div., rel. Nov. 26, 2010).

   GPS industry, GPS users and Federal agencies object to 
        LightSquared's planned terrestrial deployment, alleging that 
        the GPS environment will be changed by LightSquared's wholesale 
        model because it will no longer be motivated to be cognizant of 
        the impact on its own satellite service--based on a concern 
        about major potential GPS interference due to ``receiver 
        overload.''

   Limited technical data is submitted related to the scope of 
        the receiver overload problem and no mitigation is submitted.
2011 (January)
   International Bureau issues January 26th Order modifying 
        LightSquared's authorization.

   Order provides a conditional waiver of the ATC ``integrated 
        services'' rule to allow wholesalers to offer mobile terminals 
        with only terrestrial capability, rather than ``dual mode'' 
        capability (i.e., the ability to communicate in a single 
        handset or terminal via either a satellite or a terrestrial 
        network).

   Order establishes a process to investigate the GPS 
        interference issue that had been raised and stipulates that 
        LightSquared may not offer commercial service until the process 
        is complete and the risk of harmful interference has been 
        resolved.

   Order imposes numerous other conditions to ensure that 
        LightSquared will continue to provide a commercially 
        competitive satellite service and will continue to develop and 
        make available in the marketplace dual mode MSS/ATC-capable 
        devices.
2011 (July)
   Technical Working Group submits report concerning results of 
        testing on the GPS receiver overload issues.

   LightSquared states it will not utilize the upper 10 MHz of 
        the L-Band in order to satisfy interference concerns.

   Commission issues a Public Notice requesting comment on the 
        report.
2011 (August)
   Commission receives over 3,000 comments in the proceeding.
2011 (September)
   Commission releases Public Notice requiring additional 
        testing. See Public Notice, Fed. Commc'ns Comm., Status of 
        Testing in Connection with LightSquared's Request for ATC 
        Commercial Operating Authority (Sept. 13, 2011).
2012 (February)
   Commission receives input from NTIA that receiver overload 
        interference cannot be resolved at this time. Commission seeks 
        public input on the NTIA recommendation, as well as on other 
        related issues. Commission staff is currently reviewing the 
        record developed in response to that Public Notice.

    Question 6. In your testimony at the hearing you mentioned that you 
have eliminated 200 outdated rules. Are there more rules that can be 
identified and eliminated? Can you please explain your process in 
identifying rules that should be eliminated?
    Answer. Consistent with President Obama's Executive Orders, the FCC 
has developed and published a plan for ongoing retrospective review of 
regulations, and I have instructed each Bureau and Office to take such 
actions as are necessary to identify additional rules and regulations 
that can be eliminated. The Commission continues its work to identify 
further rules for elimination.

    Question 7. How much broadcast spectrum do you anticipate freeing 
using the incentive auctions?
    Answer. The amount of spectrum cleared will depend on the extent of 
voluntary participation by broadcasters. The Commission is, and will 
continue, educating broadcasters on the options that are available to 
them, as well as encouraging their participation. The Commission held a 
TV Broadcaster Relocation Fund Workshop to focus on the design of the 
Commission's program to reimburse some broadcasters for the relocation 
costs they will likely incur as a result of the channel reassignments 
in connection to repacking as authorized by the Act. While it is not 
expected that all broadcasters will participate, voluntary incentive 
auctions present a compelling economic opportunity for many 
broadcasters. The Commission will reach out to, and work with, all 
affected parties in a process that is transparent and fair.

    Question 8. If the incentive auctions do not produce a significant 
quantity of spectrum that can reallocated, what will the Commission do 
to address the spectrum shortage?
    Answer. Since 2009, the Commission has been working on a Mobile 
Action Plan, which contemplates an ``all of the above'' approach that 
includes freeing up more spectrum, but also more efficient use of 
spectrum and new ways to manage spectrum. Our plan focuses on five main 
areas: unleashing new spectrum, removing barriers to broadband 
infrastructure build-out, driving greater efficiency in networks and 
devices, promoting competition and empowering consumers.

    Question 9. When will the first incentive auction occur?
    Answer. This Fall we will initiate proceedings and staff will 
carefully evaluate all comments that are received. The process will 
involve the views of all interested parties through comments, 
workshops, and other means necessary to help guide an economic, data 
and fact-based driven effort in order to navigate the best path for a 
successful auction. The Commission intends to meet all statutory 
deadlines and expeditiously to meet the growing demand for wireless 
spectrum.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Marco Rubio to 
                        Hon. Julius Genachowski
Spectrum
    Question 1. The FCC's National Broadband Plan set a goal of 500 MHz 
of spectrum for commercial mobile use, and the President endorsed that 
goal. How much spectrum has been reallocated consistent with the 
Broadband Plan? What steps are being taken to reach the 500 MHz goal?
    Answer. Since 2009, the Commission has been working on a Mobile 
Action Plan, which contemplates an ``all of the above'' approach that 
includes freeing up more spectrum, but also more efficient use of 
spectrum and new ways to manage spectrum. Our plan focuses on five main 
areas: unleashing new spectrum, removing barriers to broadband 
infrastructure build-out, driving greater efficiency in networks and 
devices, promoting competition and empowering consumers.
    Meaningful spectrum sharing among government and commercial users 
could substantially increase the efficiency of spectrum use, including 
by enabling use for commercial broadband of up to 95 megahertz of 
spectrum in the 1.7-GHz band. We are working expeditiously with DOD, 
through NTIA, with respect to the 1755 MHz band and addressing what 
will happen with the 2155-2180 MHz band. With the support and on behalf 
of the wireless industry, T-Mobile has applied for an experimental 
license in the 1755 MHz band. T-Mobile, CTIA and other participants are 
cooperating with DOD through NTIA. Also, small cells can significantly 
increase the density of network deployment and the efficiency of 
spectrum use. The Commission is working with NTIA on enabling small 
cells in the 3.5-GHz band, which could free up 100 MHz of spectrum for 
wireless broadband.

    Question 2. Since service rules would have to be in place before 
the auction, and an auction have to be completed in mid-2014 for 
licensing by February 2015, can you commit to beginning a draft of the 
NPRM by the end of this year, particularly since the Commission has 
been considering the 2155 MHz band for some years now?
    Answer. The Commission is on track to propose rules for incentive 
auctions by this fall. Staff are actively working so the Commission can 
start a proceeding this fall on the spectrum auction process and 
implementation. The process will involve the views of all stakeholders 
through comments, workshops, and other means necessary to help guide an 
economic, data and fact-based driven effort in order to navigate the 
best path for a successful auction. The Commission intends to meet all 
statutory deadlines and expeditiously to meet the growing demand for 
wireless spectrum before the looming spectrum crunch can have a 
negative impact on the wireless industry. The timing of subsequent 
stages of the incentive auction process will become clearer after the 
NPRMs are adopted. The Commission intends to meet all statutory 
deadlines.

    Question 3. As you know, PL 112-96 gives States the ability to 
``opt-out'' of the FirstNet network in favor of their preferred--yet 
still interoperable--projects, and the Commission has previously 
granted waivers for public safety entities to build first responder 
networks. Florida has a Petition for Waiver currently pending at the 
Commission. In addition, Pembroke Pines, FL was one of 21 entities to 
be granted a waiver in 2010.

   Can early-deployments by States and communities with full 
        funding and a commitment to interoperability with the future 
        nationwide network create additional critical resources for 
        that network?

   Why hasn't the Commission granted pending waivers in light 
        of the critical need for those resources?

   What tools does the FCC possess to ensure early deployments 
        can and do interoperate with the FirstNet network?

    Answer. The Middle Class Tax Relief and Job Creation Act of 2012 
established a framework in which to achieve a nationwide, interoperable 
public safety network. The Middle Class Tax Relief and Job Creation Act 
of 2012 charges the Commission with ``facilitating the transmission'' 
of the 700 MHz public safety spectrum to FirstNet. We must do so in a 
manner that serves the public interest, and provides the best possible 
foundation for FirstNet to build on. The role of FirstNet in achieving 
that goal is critical.
    A draft order addressing the pending 700 MHz public safety waivers 
has been circulated to the Commissioners, but it is currently under 
discussion and has not yet been adopted. Because of the Middle Class 
Tax Relief and Job Creation Act of 2012's mandate for the FCC to 
facilitate the transition of the public safety broadband spectrum and 
the D block to FirstNet to hold the single nationwide public safety 
wireless license and to take all actions to build, deploy and operate 
this network, the Commission should consider minimizing impediments to 
the reallocation and licensing processes involved, in a manner that 
serves the public interest. The Commission's mandate includes balancing 
consideration of public interest factors that could support the grant 
of the waiver against the encumbrances that would be imposed on the 
spectrum slated by Congress for assignment to FirstNet. The Commission 
is working with NTIA and other stakeholders to address the waivers 
consistent with Congressional intent.
Pending Docket
    Question 4. As of today, the petition for declaratory ruling in FCC 
docket 09-144 has been pending for 1,027 days. Could you please tell me 
if and when the Commission intends to take action to resolve this 
proceeding?
    Answer. The Communications Act requires the FCC to ensure that 
rates for inmate calling services are just and reasonable, while 
prisons' legitimate security interests related to inmate calling 
services are adequately protected.
    Multiple, competing petitions on these rate issues have been filed 
by stakeholders. In addition, the Commission has before it a petition 
regarding use of IP-based calling services by families of prisoners. 
These petitions raise complex issues. Commission staff is reviewing the 
record that has been compiled on these issues and continues to meet 
with interested parties to obtain a better understanding of the facts 
and arguments.

    Question 5. In the past you have spoken in favor of providing 
certainty in the marketplace. Do you believe that not taking action on 
pending dockets and NPRMs creates certainty?
    Answer. The Commission has made extensive progress in clearing 
items and reforming outdated programs. After no action on it for years, 
the USF Reform Order was reported out unanimously to provide broadband 
to unserved areas in a fiscally responsive manner.
    We have also eliminated 222 obsolete regulations and have modified 
many others to reduce burdens: The Commission issued an Order to 
eliminate waste and abuse in the Lifeline program so that phone service 
can be provided to those who truly need it. The Commission also 
finalized the viewability Order, so that more customers can receive 
affordable access to basic tier digital programming.
    Over the past six months we have made significant reductions in our 
backlog, including a more than 20 percent reduction in items pending 
more than six months in the Wireline Bureau, and an across the board 20 
percent reduction in license applications and renewals pending more 
than six months. The Commission has a self-imposed 180-day shot clock 
for reviewing applications to assign or transfer control of licenses or 
authorizations to determine whether the transfer serves the public 
interest. Better than 95 percent of all license transfer applications 
received since I became Chairman have been acted on within the 180-day 
period. We have also cut the average number of days required to review 
routine wireless transactions in 2012 by more than half.
    I will continue to direct my staff to work on efforts to eliminate 
backlog and unneeded regulations so that we can streamline and improve 
the core functions of the agency.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                        Hon. Julius Genachowski
    Thank you for your testimony before the Committee. I appreciate the 
time you spent and your thoughtful answers to the following questions.
    As you all know, our economy benefits greatly from the 
communications and technology sector. Competition and innovation have 
created new services and devices as well as high-quality jobs that have 
changed the lives of Americans. This sector is incredibly important to 
sustainable growth of our economy. That is why Congress must push the 
Federal Communications Commission to be the most open and transparent 
agency in the Federal Government. The industries you regulate are too 
important to our nation.
    Under your chairmanship, I have seen notable steps in the right 
direction, and you have made process a ``top priority.'' That being 
said, I am concerned that the FCC is not always as open and transparent 
as it should be. The problem as I see it today is that the FCC can pick 
and choose the rules it wants to follow when it wants to follow them. 
This method is convenient for the FCC, but it is not good government, 
and we owe more to Americans with business before the FCC.
    I introduced legislation that pushes the FCC toward more 
transparency and openness. The intent of my legislation is not to 
hamstring the agency. It is to push them to be exactly what Americans 
expect from their government, open and transparent regulators of the 
laws passed by Congress.
    A more predictable and consistent FCC will create jobs in Nevada, 
which has the unfortunate distinction of leading our Nation in 
unemployment for over two years. Every government agency should be 
committed to policies that promote job creation, investment and 
innovation. The technology sector has helped growth in our country for 
the last twenty years and will continue to if big government does not 
overburden it.
    I introduced two measures, the Telecommunications Jobs Act (S. 
1817) and the Federal Communications Commission Consolidated Reporting 
Act (S. 1780). These bills push the FCC to be the most open and 
transparent agency in the Federal Government and provide a streamlined 
method of reporting to Congress.
    The following questions are in regards to those bills, and I would 
ask you to please respond to each question.

    Question 1. One of the most important reforms I introduced would 
force the Commission to demonstrate beyond any doubt the need for 
regulation before intervening in the marketplace. I strongly believe 
that a cost-benefit analysis should be conducted on any regulation that 
will have a significant market impact, and I believe that before the 
FCC begins a rule proposal, they survey industry within three years of 
proposing a rule to determine whether that regulation is even 
necessary. A cost-benefit analysis mandating the FCC to identify actual 
consumer harm and conduct an economic, market-benefit analysis is 
consistent with President Obama's Executive Order 13563 on Improving 
Regulation and Regulatory Review. Would you support legislation that 
implements a cost benefit analysis consistent with the President's 
Executive Order? If not, why?
    Answer. Consistent with President Obama's Executive Orders, I have 
directed the Bureaus and Offices to engage in a rigorous analysis of 
the costs and benefits associated with significant proposed rules, 
including involving our Chief Economist early in the rulemaking process 
to evaluate the economic impact of proposed rules. Such routine 
consideration of the costs and benefits of proposed rules is consistent 
with the agency's legal and regulatory requirements and is an example 
of good government practice and sound administrative procedure. I am 
committed to ensuring that such analysis is conducted by the agency in 
connection with any significant rulemaking.

    Question 2. Do you support legislation mandating the FCC to survey 
the marketplace within three years before initiating a rulemaking?
    Answer. The Commission regularly engages with the public and 
industry in the communications marketplace as part of its work. Where 
necessary, the Commission initiates proceedings with a Notice of 
Inquiry, which permits the agency to take a broader look at the market 
prior to issuing an NPRM. However, the Commission should be able to 
maintain flexibility to address the specific circumstances of each 
proceeding before it. There may be instances where a survey requirement 
would cause unnecessary delay in the Commission's ability to promote 
innovation, investment, and competition, and protect and empower 
consumers.

    Question 3. Under your chairmanship, 85 percent of the Notices of 
Proposed Rulemakings have contained text of proposed rules. However, in 
the years before your chairmanship, only 38 percent contained the 
specific text. Also, at times, these NPRM's have been broad, leading to 
uncertainty because industries are not clear as to what the FCC is 
actually looking at. Do you believe that the FCC should include the 
actual language of any and all proposed new rules in every NPRM?
    Answer. As you noted, I have taken steps to include text of 
proposed NPRMs where appropriate. The Administrative Procedure Act does 
not require the inclusion of proposed rules in all cases and in some 
circumstances, rules are not appropriate as the agency is looking to 
learn more about whether a rule should be issued and what it should 
look like.

    Question 4, These NPRM's can stay open for quite a while costing 
industry time and resources without any knowledge of whether action 
will take place or not. I have heard from many of my constituents with 
business before the Commission that they simply cannot get an answer 
from the Commission on what seems to be routine petitions, 
applications, or proceedings.
    Nevada has asked for a waiver from the FCC in regards to its 700 
megahertz public safety early deployment rules. I understand that a 
decision on this could have been delayed until Congress passed a public 
safety spectrum allocation bill. Now, with provisions intended to 
facilitate a public safety network in place, the FCC still seems to be 
stalling on this.
    Other companies have purchased spectrum in the lower 700 MHz and 
are awaiting a decision by the FCC on whether rules regarding 
interoperability, clearing channel 51 or waivers to build out 
requirements will be granted.
    The issue of ``special access'' has been open for 10 years before 
the Commission without any resolution. This is an issue worth billions 
of dollars to the entire industry.
    Furthermore, last July, I and a number of my colleagues on this 
Committee wrote to you and we did not receive a response for 8 weeks 
and only after multiple follow up letters and calls. When Senators on 
the Committee of jurisdiction have trouble receiving a response from 
the FCC, there clearly are problems with answering questions.
    All of this leads to uncertainty. There doesn't appear to be much 
confidence among many companies that the FCC can act expeditiously on 
much of anything of significance to the industry. Proceedings can 
languish for 3, 5, or 10 years. Companies, generally, have a hard time 
investing, or increasing their investment, if they are uncertain what 
the regulatory environment is going to look like for their business.
    You have worked on this issue and established internal 180-day shot 
clocks; however, this has not solved all the problems of open ended 
NPRMs. Do you believe that Congressional legislation implementing shot 
clocks on FCC action is appropriate? If not, why? Does the Commission 
expect to act on any of the examples listed above?
    Answer. The Commission conducts over 70 different types of 
proceedings, and each individual proceeding involves unique 
circumstances that the Commission must carefully consider. Where 
appropriate, the Commission has adopted its own internal shot clocks to 
facilitate expedited processing of particular types of matters. But a 
uniform shot clock requirement for all proceedings would deny the 
Commission the flexibility needed to give appropriate attention to each 
individual proceeding.

    Question 5. Since 2008, the FCC has conducted a number of merger 
reviews. How many times has the FCC failed to conclude the review 
within the 180-day shot clock period? How many times was the deadline 
missed? Was there any reason they were missed?
    Answer. The Commission has a self-imposed 180-day shot clock for 
reviewing applications to assign or transfer control of licenses or 
authorizations to determine whether the transfer serves the public 
interest. Better than 95 percent of all license transfer applications 
received since I became Chairman have been acted on within the 180-day 
period. Each proceeding is unique, however, and in some cases 
circumstances require the Commission to take more time to ensure it is 
fulfilling Congress directive to approve a transaction only upon an 
affirmative finding that it is in the public interest.

    Question 6. Going back to the President's Executive Order 13563, 
you have fully supported the ideals of the order, which in part states 
``For proposed rules, such access shall include, to the extent feasible 
and permitted by law, an opportunity for public comment on all 
pertinent parts of the rulemaking docket, including relevant scientific 
and technical findings.''
    In the days before the record closed on the Commission's reform of 
the high cost of the Universal Service Fund, the FCC added 114 new 
pages of its own to use in the final decision. This practice denied 
public input on information that was used to render a decision which 
seemed to run counter to the President's Executive Order. Without 
adequate public and stakeholder input, the chance that a regulation 
will have unintended consequences increases. One example brought to my 
attention is that now smaller rural markets like those in my state will 
miss out on support because of the presence of fixed wireless services. 
They believe more dialogue and transparency could have avoided this 
outcome.
    Do you believe that relying on reports in rulemaking and 
adjudications that are without a robust notice and comment process is 
appropriate? Or substantially altering a report after the period with 
which industry input or comments are accepted?

    Question 6a. Do you agree that it is not the best practices of a 
government agency to dump data into a report at the 11th hour without 
industry input?

    Question 6b. Do you agree that this method, while perhaps helpful 
to the Commission, is not open and transparent to the level benefitting 
an agency that issues regulations that have a significant economic 
impact?
    Answer. With regard to the USF proceeding specifically, the 
additional material you reference as added to the record was primarily 
material that was cited by commenters to the proceeding. Commission 
staff formally placed that material into the record of the proceeding 
for the convenience of the public and to assist all stakeholders in 
understanding the materials that the FCC cited in its decision. 
Subsequently, the Commission's Office of General Counsel issued a 
public notice seeking comment on alternate means of having materials of 
this type added to the record, including requiring commenters to submit 
copies of all underlying materials they cite in their comments. 
Comments filed in response to that public notice, including from 
industry, objected to requiring commenters to include a copy of all 
cited materials. Going forward, I have instructed staff to submit 
documents into the record prior to the internal circulation of any 
draft rulemakings.
    The FCC rightfully should review transfers of lines under section 
214 of the Communications Act and the transfer of licenses under 
section 309 and 310 of the Communications Act. However, this review 
should not provide the FCC to extract a list of concessions from the 
applicant in exchange for approval. For example, in the 2011 Comcast/
NBC Universal transaction order, the Commission accepted a 
``voluntary'' commitment from Comcast to comply with net neutrality 
rules even if a court overturns those rules.

    Question 7. This agreement was made through a transaction review 
and was done without any public scrutiny--as proposed conditions are 
often unknown until the approval order is announced. Do you believe 
that this type of rulemaking provides a scenario in which one set of 
rules exist for those who have merged and another exists for those who 
have not?
    Answer. No. In its review of the Comcast-NBC Universal transaction, 
the Commission faithfully carried out its statutory responsibility to 
approve a transaction only upon finding that it is in the public 
interest.

    Question 8. Have there been instances you have experienced when 
merger conditions have been imposed that was not directly related to 
the transfer questions?
    Answer. During my Chairmanship, the Commission's merger conditions 
have been directly related to the issues raised by the relevant 
transaction.

    Question 9. Do you believe it is appropriate to require the FCC to 
end this practice by requiring the FCC to narrowly tailor any 
conditions it imposes or commitments it accepts to only address harm 
caused by the transfer of licenses?
    Answer. I believe that the Communications Act appropriately directs 
the Commission in its review of license transfers.
    Last November, I introduced S. 1780, the Federal Communications 
Commission Consolidated Reporting Act. In section 3 of that bill, I 
identified 24 reports for repeal and elimination. 16 of those reports 
were ones required of the FCC. Many of these required reports appeared 
to me to be contemplated during eras long since passed; were ones with 
an exceedingly narrow focus; or ones that bore little relevance to 
today's communications marketplace.

    Question 10. Have you had the opportunity to review the FCC reports 
that were identified in S. 1780? Would you take issue with any of the 
recommended deletions?
    Answer. I support efforts to streamline the agency's reporting 
obligations. The reports identified in S. 1780 would be mandates from 
Congress, and to the extent Congress directs the Commission to provide 
alternative reports to Congress, I will work to implement the new 
requirements.
    Notwithstanding my desire to leave the FCC of its reporting burden, 
S. 1780 calls for the FCC to provide a Report to Congress with respect 
to the state of the communications marketplace, covering such matters 
as competition in broadband deployment and barriers to the competitive 
marketplace. The FCC is currently required to do many of these narrowly 
focused reports, but it seems to me that what we lack is anything like 
a comprehensive look at the totality of the marketplace at regular 
intervals. My thought was that this should be done every two years.

    Question 11. What is your opinion of such a proposal? I believe 
that both the FCC and Congress would benefit from such a Report.
    Answer. See answer above.
                                 ______
                                 
Response to Written Questions Submitted by Hon. John D. Rockefeller IV 
                       to Hon. Robert M. McDowell
Agency Travel
    Question 1. We have all heard the recent accounts of some Federal 
agencies misusing their travel budgets. I find these reports very 
disturbing. I therefore want to make sure that nothing similar is 
taking place at any of the agencies under this committee's 
jurisdiction.
    Accordingly, please provide me the following data from the past 
twelve months ending June 30, 2012 for you, each of the members of your 
staff, the detailees to your office, and anyone you have announced as a 
special advisor, special counsel, or special assistant to your office. 
Chairman Genachowski, please also include the same data about the heads 
of the Commission's bureaus and offices.
    Please include line items for the following for each person in the 
report:

   Indicate whether the person is an official member of your 
        staff, a detailee, a special advisor, or other status.

   Dates of travel

   Any events attended while traveling

   Dates events were attended

   Length of stay

   Any registration fees associated with the event

   Total cost of traveling (e.g., airfare, lodging, per diem, 
        etc.)

   Indicate whether and how you or your staff participated in 
        the event (e.g., giving a speech, participating on a panel, 
        etc.)

   If the travel involved or included unofficial business, were 
        personal funds used?

   If the travel was not associated with a particular event, 
        what was the purpose of the travel?

   Were all reimbursable funds spent in accordance with Federal 
        laws?

    Answer. Thank you, Senator, for your oversight in this area. At the 
outset, I respectfully note that throughout my six-year tenure at the 
FCC, approximately 36 percent of my annual office travel budget has 
gone unspent, on average, meaning that these funds have been returned. 
Next, in all cases, any instances of non-official business were paid 
using personal funds. Also, all reimbursable funds were spent in 
accordance with Federal laws. Finally, I ask that you please refer to 
Exhibit A for detailed line items.
Public Safety Waivers
    This Committee worked hard to pass legislation that will make a 
nationwide, interoperable public safety network a reality. The law is 
clear that the network must be based on a single nationwide 
architecture. I recognize that, before the law was passed the FCC 
granted several waivers to allow certain jurisdictions, on a 
conditional basis, to begin building certain facilities. I also 
understand that a number of other jurisdictions filed waivers that 
remain pending.
    There have been press reports that some at the Commission believe 
that the law does not speak directly to whether the FCC should grant 
new, additional authority to jurisdictions to begin building their own 
networks before the new FirstNet board is put into place. Such a 
position seems to undermine the clear intent of this Committee and of 
Congress toward creating a nationwide network. Such a position also 
runs the risk of replicating the mistakes of the past by creating 
separate networks that may never be truly interoperable.
    I recognize that allowing one or two of these jurisdictions to move 
forward with their networks, subject to appropriate conditions and 
vendor indemnification, may provide some benefits for public safety. 
But I have heard from experts that allowing a number of jurisdictions 
to move forward could make it much more expensive and difficult in the 
long-term to deploy a truly interoperable network nationwide. That was 
not Congress's intent.

    Question 2. Will you commit that when you review whether to allow 
authority for jurisdictions to begin building their networks before 
FirstNet is set up that you will act in a manner that is consistent 
with Congressional intent?
    Answer. Yes.

    Question 3. In your opinion, how would the granting of new 
authority not complicate FirstNet's efforts to achieve nationwide 
interoperability for our first responders?
    Answer. The FCC should do everything possible to make our Nation 
safe sooner rather than later. As you know, FirstNet is not yet 
established. Further, its operational status, construction plan and 
construction schedule are not expected for some time. As a result, I am 
concerned that denying new and additional authority may have the effect 
of penalizing those jurisdictions that have taken a lead in resolving 
their individual, localized challenges. A nationwide approach--as 
recognized in the legislation--may be ideal. At the same time, it is 
also possible to smartly and efficiently put together a nationwide 
network. Congress recognized this by establishing an avenue for local 
jurisdictions to ``out opt'' of the nationwide network. Likewise, more 
recently, the FCC's May 22, 2012, report setting forth minimum 
technical requirements for nationwide interoperability notes that the 
existing infrastructure elements under construction pursuant to FCC 
waiver ``can be leveraged into the [nationwide public safety broadband 
network], while meeting the requirements for interoperability.''

    Question 4. Also, how would you make sure that grants of new 
authority would not also run the risk of increasing the overall costs 
of the network?
    Answer. Given that FirstNet is not established, its budget 
projections do not yet exist. I am hopeful that FirstNet's budget 
projections would include an array of options, which would allow 
stakeholders to carefully analyze the costs and benefits of its 
proposals.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Inouye to 
                        Hon. Robert M. McDowell
Media Ownership by Women and People of Color
    Question 1. Are you satisfied with the level of media ownership by 
women and people of color today? If not, I would appreciate your 
suggestions on how media ownership by women and people of color can be 
improved. What role can the FCC play to encourage greater media 
ownership opportunities for women and people of color?
    Answer. I continue to be concerned about the decline of female and 
minority ownership of broadcast outlets. I voted in favor of the 
Commission's 2007 Diversity Order, which included several measures 
designed to help ``eligible entities'' enter the broadcasting industry. 
Those measures included easing rules to encourage greater investment in 
eligible entities and affording such entities additional time to meet 
broadcast construction deadlines. Six of the 13 rules adopted in 2007 
were struck down as arbitrary and capricious by the Third Circuit in 
Prometheus II, 652 F.3d 431 (3d Cir. 2011), because the Commission did 
not support how this definition would achieve the stated underlying 
goal of promoting the participation of women and minorities.
    One of the rules that survived judicial review was the advertising 
non-discrimination rule, which prohibits broadcasters from entering 
into contracts containing provisions that discriminate on the basis of 
race or ethnicity, also referred to as ``no urban/no Hispanic'' 
clauses. In fact, I have been told that our rule banning such 
discriminatory practices was the first Federal civil rights rule 
adopted in decades. This rule has had far-reaching, beneficial effects. 
The Minority Media and Telecommunications Council estimates that the 
non-discrimination rule would effectively inject approximately $200 
million per year into the cash flow of minority broadcasters. 
Furthermore, the American Association of Advertising Agencies (4A's) 
has developed and circulated to the advertising industry--which we do 
not regulate--a non-discrimination policy framework to end the practice 
of ``no urban/no Hispanic'' dictates. In response, the CEOs of the 
largest advertising agencies, which control about 80 percent of media 
buys, have signed pledges to implement this non-discrimination policy 
and complaint process.
    In response to the Prometheus II decision and as part of the 
quadrennial media ownership proceeding, we are considering the myriad 
proposals to enhance media diversity that have been introduced over the 
past few years. For those proposals aimed at expanding media 
opportunities for minorities and women, we have to be mindful that any 
action the Commission takes in this area must also be legally 
sustainable and satisfy the rigorous demands of the Equal Protection 
Clause, as interpreted under the Supreme Court's Adarand Constructors, 
Inc. v. Pena, 515 U.S. 200 (1995), line of cases.
    The Commission must ensure that it does not adopt regulations that 
are likely to be struck down on constitutional grounds and, for this 
reason, I have been outspoken about the need to launch new studies 
designed to overcome the demands of Adarand. I am pleased that the 
Chairman ordered a literature review of research into the critical 
information needs of the American public and the barriers to 
participation in the communications industry. The final results of this 
literature review were filed with the Commission on July 16 and 
confirmed my long-standing belief that diversity studies are needed.
    I also continue to be interested in the potential viability of a 
new tax certificate program to promote broadcast ownership by 
economically disadvantaged businesses. Legislators through the years 
have expressed interest in reviving some form of the old FCC tax 
certificate policy, which Congress abolished in 1995. I would be 
pleased to offer lawmakers technical assistance in exploring the 
options for using a modified tax certificate program to encourage 
expansion of minority and female ownership of broadcast stations in 
ways that pass muster under Adarand.
    In the meantime, the Commission can continue to encourage media 
ownership by hosting workshops that bring small and minority owned 
business together with large industry participants. For instance, in 
July 2012, the FCC hosted a conference on supplier diversity at the FCC 
and, in November 2012, we will host its fourth annual ``Capitalization 
Strategies Workshop'' for small and diverse businesses involved in the 
media and telecommunications industries.
    Furthermore, the Commission can continue to encourage the private 
sector to reach out to minorities. Mentoring opportunities for minority 
owners and initiatives that promote real world experience are the best 
way to create success for minority entrepreneurs. I applaud private 
sector initiatives, such as the MMTC-Clear Channel Ownership Diversity 
Initiative, which provides ownership and training opportunities for 
minorities, women, and other underserved groups.
    This program has resulted in four stations being successfully 
overhauled and re-launched by minority and women entrepreneurial 
partners of MMTC. Whenever MMTC is donated a broadcast station, the 
station is used to train minorities and women in broadcasting.
Spectrum Swaps
    Question 2. Some industry representatives as well as a few Members 
of Congress have suggested that spectrum swaps are a direct and faster 
way to increase competition in the wireless broadband market. Do you 
agree with this suggestion? What efforts are being taken or can be 
taken by the FCC to explore spectrum swaps as a way to increase 
competition in the wireless broadband market?
    Answer. I understand that the FCC staff routinely handles 
transactions that include exchanges of spectrum between wireless 
service providers. For instance, wireless providers reach agreement to 
exchange spectrum to align spectrum holdings and create contiguous 
service areas to promote greater efficiencies. Parties file assignment 
applications electronically and the staff processes them quickly. Given 
the ease of process, I agree that these types of swaps, and the 
certainty in the FCC's processes, aid in increasing competition within 
the mobile broadband marketplace.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. John F. Kerry to 
                        Hon. Robert M. McDowell
Updating the Law
    Question 1. The FCC has a wireless bureau, a wireline bureau, and a 
media bureau. Given that all three operate in a broadband world, should 
we have a broadband bureau at the agency that either incorporates these 
three separate bureaus or helps us understand the state of broadband 
competition and define and eliminate duplicative bureau functions?
    Answer. Generally speaking, I subscribe to the belief that Congress 
tells the Commission what to do, not the other way around. Nonetheless, 
ideas that involve consolidation of bureaus and offices with redundant 
functions can be positive and constructive. The Internet has thrived 
because the government has generally kept its hands off of it. 
Therefore, if the creation of a new consolidated broadband bureau were 
to lead to the imposition of new regulations on the Internet, the 
creation of such a bureau would be counterproductive.
    I do agree, however, with the overall assessment that our current 
statutory framework, has created market distorting legal stovepipes. 
This construct has often forced regulators and industry to make 
decisions based on whether a business model fits into Titles I, II, 
III, VI or none, even though the services delivered are often 
indistinguishable to the consumer. Therefore, if Congress contemplates 
potential legislation, it may want to consider an approach that is more 
focused on preventing concentrations and abuses of market power that 
result in consumer harm.

    Question 2. The 1992 Act is 20 years old this year, and the 1996 
Act is entering its late teens. Should we update these laws and if so, 
using what set of principles?
    Answer. The communications marketplace has changed dramatically 
since 1992 and 1996 and the statute does not reflect the current 
marketplace. These laws were written before the Internet and mobile 
platforms revolutionized the way Americans communicate. As discussed 
above, the rigid regulatory structure based on the regulatory history 
of particular delivery platforms no longer works and is no longer 
applicable to today's dynamic and competitive landscape. As Congress 
contemplates FCC reform, it may want to consider an approach that is 
more focused on preventing concentrations and abuses of market power 
that result in consumer harm. Ideally, there might be a focus on a 
rewrite that would treat platforms in a like manner.
Spectrum
    Cisco's U.S. mobile data forecast projects that the volume of data 
traffic on mobile service provider networks will increase 16 times from 
2011 to 2016. With that kind of demand for space in our airwaves for 
wireless broadband, the Commission should be making every effort to 
make as much existing spectrum as usable as possible quickly.

    Question 3. What are the prospects for Federal and private users to 
share the spectrum that agencies currently hold without disrupting 
vital public services and what can we do to speed up the process?
    Answer. The prospects for commercial entities sharing spectrum held 
by Federal users is not clear at this time. As a preliminary matter, I 
note that sharing is an ill-defined concept. While I have strongly 
supported the FCC's work to promote sharing within the ``TV white 
spaces'' in the 700 MHz Band, the 400 MHz Band, and the 5 GHz Band, we 
must keep in mind that developing these sharing protocols has been 
challenging, time-consuming and costly. For example, the white spaces 
initiative began in 2002 and, although it has come a long way, the 
process is not yet complete. In addition, these sharing arrangements 
are not designed for or suited to robust, high-powered and ubiquitous 
commercial availability. Nonetheless, I remain hopeful that stronger 
leadership will result in agencies relinquishing spectrum for 
commercial auction. If we are left only talking about sharing, critical 
needs will be unmet and America's global competitiveness will be 
severely undermined.

    Question 4. As space on the airwaves becomes increasingly 
congested, how will the FCC better arbitrate interference disputes 
between neighboring services in the future?
    Answer. In my experience, instances of harmful interference between 
neighboring services arise under unique sets of circumstances and 
should be examined on a case-by-case basis. The Commission's 
responsibility is to analyze the necessary level of protection for an 
incumbent user and the technical efficiencies (or lack thereof) in the 
new user's operations or proposed operations. By its nature, this 
undertaking is careful, deliberative and somewhat time-consuming.
    I am hopeful that factoring into the Commission's interference 
analyses the role of receivers may be a means to make our analytical 
process more efficient. Therefore, I am pleased that the Commission has 
begun to examine the operation and performance of receivers within its 
interference analysis. The Commission's Technical Advisory Council 
recently established a working group on this matter and I look forward 
to learning more.
    Conservative studies and estimates have suggested that use of 
spectrum on an unlicensed basis contributes at least $50 billion 
annually to the U.S. economy, thanks to the benefits we all gain from 
widespread Wi-Fi availability, or uses like automatic highway toll 
payment, or business uses for smart inventory.

    Question 5. Can you talk about the priority that the Commission 
places (or that you will place) on ensuring that there is an 
appropriate mix of spectrum coming to market both for auctions and for 
such unlicensed use?
    Answer. As noted earlier, I have been an outspoken proponent of 
unlicensed use of the ``TV white spaces'' in the 700 MHz Band. 
Unlicensed use provides today's entrepreneurs with a means to develop 
new and exciting products without the high barrier to entry posed by 
licensed spectrum use. In addition, unlicensed Wi-Fi has become an 
important tool for licensed carriers. Cisco recently reported that IP 
traffic carried over Wi-Fi alone is expected to surpass the amount of 
traffic carried over wired networks by 2015. A 2011 Juniper Research 
report states that, by 2015, 63 percent of traffic generated by mobile 
devices will transfer onto the fixed network via unlicensed Wi-Fi and 
femtocell technologies. Furthermore, unlicensed networks will pick up 
90 percent of this offloaded data at some point in transit. This means 
that unlicensed spectrum, no matter where it exists, plays a critical 
role in the context of mobile broadband services and will continue to 
do so for the longer term.
Privacy
    The FCC recently concluded an investigation into the Google Wi-Fi 
data collection incident where the agency found that Google's actions 
did not violate section 705 of the Communications Act due to the fact 
that the incident occurred on unencrypted Wi-Fi, rather than a secured 
network.

    Question 6. In light of the result of this investigation, do you 
believe that Congress should update section 705 to account for this gap 
in the FCC's wiretap provisions?
    Answer. As noted earlier, I subscribe generally to the philosophy 
that Congress tells me what to do, not the other way around. 
Furthermore, I am not familiar with, nor was I involved with, this 
investigation or its findings. I would note that Wi-Fi, whether 
encrypted or unencrypted, is an unlicensed, secondary wireless service. 
Thus, modifying section 705 would confer expanded FCC jurisdiction over 
a currently unlicensed service.
Interoperability
    Interoperability of consumer devices within a spectrum band helps 
promote competition in wireless services. Since the early 1980s, the 
Commission has adopted rules or sent strong messages that it expects 
wireless service licensees to offer consumers equipment that can 
operate over the entire range of an allocated spectrum band. But 
interoperability does not yet exist in perhaps the most valuable 
spectrum bands the FCC has ever allocated--the lower 700 MHz band. In 
March, the FCC initiated a proceeding to promote interoperability in 
this band. I noticed that the NPRM would prefer that the industry 
propose a voluntary solution, as would I, but you also indicated an 
interest in moving to rules if that voluntary approach is unsuccessful.

    Question 7. Do you believe interoperability of devices within this 
band matters, what is the FCC staff doing to monitor the efforts of the 
industry at arriving at a voluntary solution for the lower 700 MHz 
band, and how much more time do you believe the industry should have 
before you would push to conclude this proceeding and adopt rules if it 
appears that an industry solution is not possible?
    Answer. I hope that all interested parties will come to the 
negotiating table and work in good faith to resolve the 
interoperability challenge in the lower 700 MHz Band. Government 
mandates should be a last resort. That maxim is especially relevant 
here because minimal regulation in the wireless sector has created an 
environment that has maximized opportunities for investment, 
innovation, competition and job creation. Before disrupting this 
fruitful environment with new government mandates, all stakeholders, 
including industry and consumers, should work as hard as they can to 
produce a private sector resolution. An independently-created 
interoperability framework stands a far better chance of success than 
would a top-down government regulation. In other words, the private 
sector is better at this than we are.
    With respect to staff responsibilities and timing for FCC action, I 
respectfully defer to Chairman Genachowski.
Public Broadcasting
    As a long-time supporter of public broadcasting, I believe that it 
plays a special and necessary role in our media landscape. I was 
pleased to see that on November 4, 2011 the FCC Consumer Advisory 
Committee adopted a recommendation that the FCC work with the 
Administration and Congress to support continued Federal funding of the 
Corporation for Public Broadcasting and local public broadcast 
stations, including those providing service to rural, tribal, native, 
and disability communities.

    Question 8. Do you support this recommendation from the FCC 
Consumer Advisory Committee and can you share your views on the unique 
and necessary role that public broadcasting plays in our media 
landscape?
    Answer. The Corporation for Public Broadcasting (CPB) is a non-
profit corporation created as part of Public Broadcasting Act of 1967. 
Congress has found that ``it is in the public interest to encourage the 
growth and development of public radio and television broadcasting, 
including the use of such media for instructional, educational, and 
cultural purposes;'' ``the encouragement and support of public 
telecommunications, while matters of importance for private and local 
development, are also of appropriate and important concern to the 
Federal Government;'' and ``it is necessary and appropriate for the 
Federal Government to complement, assist, and support a national policy 
that will most effectively make public telecommunications services 
available to all citizens of the United States.'' 47 U.S.C. 
Sec. 391(a). The statute regarding the Corporation for Public 
Broadcasting is codified as Section 396 of the Communications Act of 
1934.
    The statute dictates that board members of the Corporation for 
Public Broadcasting are selected by the President of the United States 
and confirmed by the Senate. The CPB also submits an annual report to 
the President for transmittal to Congress. Furthermore, the CPB's 
annual budget is composed almost entirely of an annual appropriation 
from Congress, plus interest on those funds. For Fiscal Year 2012, its 
Federal appropriation was $444.2 million, along with an additional $1 
million in interest earned. The CPB, in turn, allocates 89 percent of 
these funds to support programming and station grants. About CPB: 
Financial Information, CPB, http://cpb.org/aboutcpb/financials/budget/ 
(last visited July 31, 2012).
    As you point out, the FCC Consumer Advisory Committee adopted and 
re-adopted a recommendation in November 4, 2011 and February 24, 2012, 
respectively, ``that the Federal Communications Commission, in its 
interaction with the Administration and with the Congress, support 
continued Federal funding of CPB to continues its support for public 
broadcast stations, including those providing service to rural, tribal, 
native, and disability communities.'' As demonstrated above, however, 
the FCC has no jurisdiction over the funding or oversight of CPB.
The U.N. and International Negotiations on Internet Governance
    As former Congressman Boucher recently explained, ``The best way to 
understand the current system of global Internet governance is as a 
hub-and-spoke relationship. At the hub, a loose confederation of 
standards-setting bodies ensures the Internet's continued stability and 
functionality. Little, if any, regulation occurs at the hub. This 
arrangement leaves tremendous leeway for the sovereign governments--the 
``spokes''--to regulate the Internet within their borders.''
    And that system has worked relatively well, with some unfortunate 
outliers trying to control their population's access to information. 
Yet, there is pressure abroad for a new U.N. agency to assert 
international governmental control over the Internet. That pressure is 
coming from countries who wish to impose new tolls on service and 
countries that fear the power of open discourse on the Internet.
    In a recent blog post, NTIA Administrator Strickling wrote about 
these proposals from China and others, ``This is contrary to President 
Obama's vision of an Internet that is interoperable the world over, and 
the United States will vigorously oppose such barriers.'' And I know 
that this is a priority for Ambassador Philip Verveer and the State 
Department as well.

    Question 9. Do all of you share the Administration's point of view?
    Answer. The Administration and I share a common point of view on 
this matter. I have been pleased to work with Assistant Secretary 
Strickling, Ambassador Phil Verveer and Ambassador Terry Kramer on this 
important matter. I am attaching a copy of an op-ed published in the 
Wall Street Journal on February 21, 2012, which outlines my view on 
this subject.
                                 ______
                                 
   Response to Written Question Submitted by Hon. Maria Cantwell to 
                        Hon. Robert M. McDowell
    Question. Commissioner McDowell, what is ``light licensing'' and do 
you believe this is something that should be considered in the context 
of the broadcast white spaces?
    Answer. I have long supported unlicensed use of spectrum in the 
broadcast TV white spaces. Among other benefits, unlicensed spectrum 
serves as an incubator for wireless innovation. TV white spaces, with 
its use of a geo-location database, serves as a test bed for innovation 
in cognitive radio. Opening this band to unlicensed use is an important 
component of the long-term spectrum planning currently underway in the 
U.S. While there may be a place for ``light licensing,'' this concept 
is not defined, and, to my knowledge, is not yet a factor in the 
Commission's analysis within the context of the broadcast TV white 
spaces rules.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to 
                        Hon. Robert M. McDowell
    Question 1. In response to a question on News Corporation, Chairman 
Genachowski responded that the FCC does not comment on the status of 
investigations and Commissioner McDowell concurred. Yet following the 
hearing, the press reported that Commissioner McDowell responded to 
reporters' questions by commenting on the status of an investigation--
saying he was unaware of any investigation into News Corporation. How 
is it possible that neither of you could comment on the status of the 
investigation during the Congressional hearing, yet Commissioner 
McDowell could respond directly and candidly to a reporter immediately 
after the hearing?
    Answer. In response to your question regarding a possible 
investigation into News Corporation at the hearing on May 16, 2012, I 
agreed with the statements made by the Chairman, stating that ``I think 
the Chairman has stated it, actually, quite eloquently. . . . I agree 
with what the Chairman said.'' The Chairman's response to your question 
was as follows:

        Well, obviously, we have important responsibilities under the 
        law. We're aware of the serious issues that we see in the UK. 
        These matters may come before the FCC as adjudicatory matters. 
        I think it would be inappropriate for us to prejudge them, and 
        also inappropriate to speak about any investigations we may 
        have ongoing.

    He then restated that ``[w]e don't comment, as other agencies of 
government don't comment, on the status of investigations. Obviously, 
we have important responsibilities that we will take seriously. It's 
important that we not prejudge it.''
    In a blog posted on The Hill website, dated May 16, 2012, it was 
reported that ``Republican commissioner Robert McDowell told The Hill 
he wasn't aware of any active investigation into News Corporation at 
the FCC.'' Andrew Feinberg, Lautenberg wants FCC to probe News Corp., 
The Hill (May 16, 2012), http://thehill.com/blogs/hillicon-valley/
technology/227869-lautenberg-wants-fcc-to-investigate-news-
corporation/. Further, in an interview on C-SPAN's The Communicators, I 
stated that:

        For any possible adjudicatory matter, we don't comment. We 
        don't comment on investigations, whether they are or are not 
        happening. I don't know of any FCC investigation in this 
        regard, but I may not know, as well. We have an Enforcement 
        Bureau who can investigate things on their own. And, so we will 
        follow the facts and the law and established Commission 
        precedent and procedure in this case, should it become a case, 
        and any other case that comes along as well.

    Communicators with Robert McDowell, C-SPAN, May 17, 2012, http://c-
spanvideo.org/program/McDowell. This interview was covered in the 
Communications Daily on May 18, 2012.
    As in my testimony, my statements to The Hill and during The 
Communicators interview, I did not comment on the status of a 
particular investigation, whether an investigation is, in fact, 
happening or not happening or prejudge the outcome of any potential 
investigation. I only stated that I have no personal knowledge 
regarding whether or not an investigation exists and that, if a case 
were to come before us, we would follow the facts and apply the 
appropriate law in accordance with Commission precedent and procedure.

    Question 2. During the hearing I asked you what it takes for the 
FCC to begin an investigation into the misconduct of News Corporation 
and whether that misconduct calls into question News Corporation's 
fitness to hold 27 broadcast licenses in the United States. I was not 
asking you to prejudge the outcome of such an investigation, but rather 
whether the FCC would initiate one. What does it take for the FCC to 
begin an investigation into whether News Corporation is fit to hold its 
broadcast licenses in the United States?
    Answer. I defer to the Chairman regarding whether the Commission 
will initiate an investigation into News Corporation. As stated above, 
I am not aware of whether or not there are any pending investigations 
involving News Corporation. However, any additional investigation into 
New Corporation's fitness to be a broadcast licensee would be informed 
by our character qualification policies and precedent.
    A review of a licensee's character is fact-specific and generally 
performed during a licensing proceeding--such as requests for a new 
authorization or to modify, renew, or transfer a license--to determine 
whether the public interest would be served by grant of an application. 
The Commission examines any relevant misconduct (i.e., violations of 
the Communications Act or the Commission's rules and policies), as well 
as conduct that takes place outside the Commission's traditional 
purview (non-FCC misconduct), to determine whether an applicant would 
be truthful with the FCC and comply with its rules and policies in 
operating a broadcast station. In considering misconduct outside of the 
FCC's traditional purview, the Commission generally considers certain 
forms of adjudicated misconduct, such as felony convictions and 
misrepresentations to governmental units.\1\ The Commission also has 
policies and precedent for corporate licensees relating to alleged 
misconduct by parent companies, subsidiaries, affiliates, and 
employees. Such policies and precedent should be considered in 
determining whether an investigation should or should not be launched.
---------------------------------------------------------------------------
    \1\ The Commission will consider unadjudicated non-broadcast 
related misconduct if it is ``so egregious as to shock the conscience 
and evoke almost universal disapprobation.'' E.g., Policy Regarding 
Character Qualifications in Broadcast Licensing Amendment of Part 1, 
the Rules of Practice and Procedure, Relating to Written Responses to 
Commission Inquiries and the Making of Misrepresentations to the 
Commission by Applicants, Permittees, and Licensees, and the Reporting 
of Information Regarding Character Qualifications, Policy Statement and 
Order, 5 FCC Rcd 3252, 3252 n.5 (1990); Policy Regarding Character 
Qualifications In Broadcast Licensing Amendment of Rules of Broadcast 
Practice and Procedure Relating to Written Responses to Commission 
Inquiries and the Making of Misrepresentations to the Commission by 
Permittees and Licensees, Report, Order and Policy Statement, 102 FCC 
2d 1179, 1205 n.60 (1986); Contemporary Media, Inc. v. FCC, 214 F.3d 
187, 192.
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                                 ______
                                 
     Response to Written Questions Submitted by Hon. Mark Pryor to 
                        Hon. Robert M. McDowell
CVAA
    The 21st Century Communications and Video Accessibility Act (CVAA) 
was enacted to update the media and communications accessibility 
requirements and expand access to current and emerging technologies.
    I have heard concerns about the population of the statutorily 
required advisory committees and the resulting recommendations. 
Consumer and advocacy groups that serve on these committees face 
technical and legal capacity constraints that many businesses do not.

    Question 1. Will you be cognizant of these inherent limitations and 
keep them in mind as you consider the recommendations put forth by the 
advisory committees?
    Answer. Yes. I have not received any complaints regarding the 
composition of our statutorily required advisory committees or the 
resulting recommendations. I will keep such issues in mind when 
considering the recommendations of our advisory committees.

    Question 2. It is my understanding that the Commission will soon 
consider the Advanced Communications Services provisions of the CVAA. 
How does the Commission plan to ensure that video conferencing services 
used by consumers who are deaf or hard of hearing are interoperable 
with each other?
    Answer. I look forward to learning more about the timing and the 
substance of a forthcoming order implementing the Advanced 
Communications Services provisions of the CVAA. As we review the draft, 
we will proceed mindful of your concern and will be happy to work 
closely with you and your staff.
Phone Theft
    In March, I sent a letter to Chairman Genachowski expressing my 
concern at what seems to be an epidemic of cell phone thefts. It is my 
understanding that technology within the phone could enable a 
manufacturer or wireless provider to identify a stolen phone and 
prevent reactivation of service. This has significant consumer privacy 
implications. I applaud the Commission's recent initiative to mitigate 
the theft of cell phones but I remain concerned.

    Question 3. Would you walk me through the steps that the Commission 
has taken with regard to cell phone theft, particularly the 
establishment of the database and how you have addressed the privacy 
concerns that have been raised?
    Answer. Given that the initiative to mitigate cell phone theft has 
been undertaken by Chairman Genachowski and his staff, I respectfully 
defer to him on this question.
Universal Service Fund Reform
    I am concerned about the impact of Universal Service Fund reform on 
the continuation of public and private investment in broadband 
deployment.

    Question 4. Would you provide more information about the rationale 
for the retroactive component of the regression caps?
    Answer. The reforms are only intended to affect USF support going 
forward, not support that has been received in the past. Nevertheless, 
some carriers are concerned that some of the reforms will reduce their 
future support which will, in turn, make it impossible for them to pay 
off debts incurred prior to the adoption of our reforms. In such 
circumstances, carriers have a specific waiver process available to 
them which was issued as part of the USF Order. Such waiver requests 
will be considered on a case-by-case basis.

    Question 5. What opportunities are there for carriers to correct 
data in the regression analysis other than submitting corrections to 
study area boundaries?
    Answer. If carriers have concerns regarding the use of flawed data, 
it is my understanding that they can seek corrections through a 
streamlined waiver process, and they would not have to follow the 
stricter waiver requirements set forth in the USF order. I am seeking a 
formal clarification from the Wireline Competition Bureau regarding 
this point.

    Question 6. Would you explain the Commission's formulation of 
setting benchmarks for High-Cost Loop Support?
    Answer. Generally, the regression analysis approach was adopted by 
the FCC with the purpose of giving rate-of-return carriers an incentive 
to invest more efficiently and operate more prudently. It was expected 
that the analysis would compare carriers' costs to similarly situated 
carriers and place limits on those carriers whose costs are 
significantly higher. As for how the benchmarks were specifically 
formulated, they were developed by the Wireline Competition Bureau 
staff and did not come to a full vote of the Commission. As such, I 
respectfully defer to Chairman Genachowski for the details on their 
formulation.

    Question 7. Some contend that regression analysis will change cost 
recovery revenues from year-to-year which creates uncertainty and may 
negatively impact investment in rural areas. How will the Commission 
balance the need to control costs while encouraging network investment 
in rural areas?
    Answer. The current regression analysis was set forth on April 25, 
2012, in a Wireline Competition Bureau order. The bureau order provides 
certainty through 2014. After 2014, it is my understanding that the 
Wireline Competition Bureau has been working with some of the 
associations for the rural carriers to help get a more accurate 
projection of potential fluctuations in funding levels. Having said 
that, I have consistently said that USF reform is an iterative process 
and we will constantly monitor its implementation, listen to concerns, 
and quickly make adjustments, if necessary.
700 MHz Spectrum
    Question 8. It is my understanding that the Commission has 
initiated a Notice of Proposed Rulemaking regarding interoperability in 
the lower 700 MHz band. Does the Commission anticipate the completion 
of this proceeding before the end of the year?
    Answer. Given that this question pertains to timing of an open 
proceeding, I respectfully defer to Chairman Genachowski.
Low Power Television
    Question 9. For many years, Class A and Low Power Television 
Service (LPTV) stations have provided valued local, religious, Spanish 
language, and other programming. Communities have come to rely on this 
niche programming that may not otherwise be available. How will the 
Commission work to ensure the viability of Class A and LPTV during its 
implementation of the Middle Class Tax Relief and Job Creation Act?
    Answer. I recognize the benefits that low power TV stations provide 
to their communities. LPTV, however, is a secondary service and 
stations are displaced if they cause unacceptable interference to a 
full power station or other spectrum users. Furthermore, the spectrum 
legislation does not include or protect LPTV stations. Class A 
stations, however, have more protection rights and are capable of 
participating in the spectrum auction. As we start working to implement 
the Middle Class Tax Relief and Job Creation Act, we will keep your 
concerns about Class A and LPTV stations in mind and be happy to work 
with you and your staff.

    Question 10. What is your position on mandatory channel sharing for 
LPTV?
    Answer. The idea of mandatory channel sharing for LPTV has not been 
specifically raised with me and, to my knowledge, is not an issue that 
is currently under consideration by the Commission. The concept of 
channel sharing, however, is being widely discussed throughout the 
Commission for many services. For instance, the Commission, in its 
recent Channel Sharing Order, adopted rules to allow for the sharing of 
broadcast channels by stations that choose to share a 6 MHz channel 
with one or more other stations in connection with the incentive 
auction. These rules permit stations to relinquish spectrum for new 
wireless services while allowing them to continue to provide broadcast 
television services and receive a capital infusion from the auction 
proceeds. The channel sharing permitted by this order is completely 
voluntary--both in regard to participation and channel sharing 
partners--and is only available to broadcasters that will participate 
in the incentive auction. Thus, LPTV stations may not participate at 
this time. The Commission, however, stated that we ``will consider how 
channel sharing will be applied outside of the incentive auction 
context in a future proceeding.''
    The Commission does have mandatory time sharing for NCE FM stations 
that do not operate 12 hours per day each day of the year and is 
seeking comment on whether we should extend this mandatory time-sharing 
to the LPFM service. These radio services, however, are not auctioned 
services; whereas, LPTV stations are required to be auctioned pursuant 
to section 73.5000 of the Commission's rules. Mandatory channel sharing 
may be difficult to implement for an auctioned service.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Claire McCaskill to 
                        Hon. Robert M. McDowell
    Question 1. Last year, I raised concerns with the FCC regarding the 
Universal Service Fund's (USF) Lifeline Program. In response to these 
concerns, the Commission has taken steps to crack down on waste, fraud 
and abuse within the program. The recent announcement that 20,500 
letters will be sent in Missouri to eliminate duplication was welcome 
news. The implementation of a database to help detect and prevent 
duplicates is an important tool, but I remain concerned that further 
action needs to be taken to address fraud. Has the FCC conducted its 
own investigation into possible fraud occurring within the Lifeline 
program, and if so what were the findings of that investigation?
    Answer. I respectfully defer to Chairman Genachowski on this 
question since investigations are under the control of the Chairman.

    Question 2. Has the Commission examined the marketing agreements 
providers are using to advertise Lifeline products to consumers?
    Answer. Yes, the Commission has been examining the use of marketing 
materials in the context of the Lifeline program. In fact, the 
Commission included the following language in its January 31 Lifeline 
Order:

        To increase accountability within the program and to target 
        support where it is needed most, we require that ETCs providing 
        Lifeline-supported services make specific disclosures in all 
        marketing materials related to the supported service. We adopt 
        rules requiring ETCs to explain in clear, easily understood 
        language in all such marketing materials that the offering is a 
        Lifeline-supported service; that only eligible consumers may 
        enroll in the program; that documentation is necessary for 
        enrollment; and that the program is limited to one benefit per 
        household, consisting of either wireline or wireless service. 
        We also require ETCs to explain on certification forms that 
        Lifeline is a government benefit program, and consumers who 
        willfully make false statements in order to obtain the benefit 
        can be punished by fine or imprisonment or can be barred from 
        the program. For purposes of this rule, the term ``marketing 
        materials'' includes materials in all media, including but not 
        limited to print, audio, video, Internet (including e-mail, 
        web, and social networking media), and outdoor signage, that 
        describe the Lifeline-supported service offering, including 
        application and certification forms. These disclosures will 
        help ensure that only eligible consumers enroll in the program 
        and that those consumers are fully informed of the limitations 
        of the program, so as to prevent duplicative or otherwise 
        ineligible service as well as other forms of waste, fraud, and 
        abuse. Additionally, we require every ETC to disclose the 
        company name under which it does business and the details of 
        its Lifeline service offerings in any Lifeline-related 
        marketing and advertising. (See July 31st Lifeline Order, para. 
        275)

    Additionally, in that Order, the Commission directed ``USAC to 
undertake ongoing reviews of ETCs' marketing materials sufficient to 
ensure compliance with program rules.'' (Id. at para 276). The 
Commission left ``the scope and frequency of those reviews to USAC's 
discretion, but direct[ed] the Wireline Competition Bureau to oversee 
USAC's efforts to review the ETCs' materials.'' (Id.)

    Question 3. As required by the Commercial Advertisement Loudness 
Mitigation (CALM) Act, the FCC published an order last December 
outlining practices that networks and cable stations must implement by 
this December. I understand these rules have not yet been published in 
the Federal Register, and I have heard little about progress since 
December. Are we on track to see this legislation--strongly supported 
by consumers--fully implemented by the end of the year?
    Answer. The Commission adopted and released the Report and Order 
implementing the CALM Act on December 13, 2011. The Commission 
published the CALM Act Order in the Federal Register on July 9, 2012. 
Additionally, I have been informed that the Commission has received 
approval from the Office of Management and Budget (OMB) for the new and 
modified information collection requirements contained in the CALM Act 
Order. It is my understanding that the rules should take effect on 
December 13, 2012 as planned. It is always possible, however, that 
unforeseen legal challenges could delay implementation.

    Question 4. In December, the International Telecommunication Union 
(ITU) will convene the World Conference on International 
Telecommunications (WCIT-12) in Dubai to renegotiate the International 
Telecommunication Regulations. A key topic of discussion is expected to 
be whether and how to expand it to cover the Internet. To what extent 
is the FCC involved in policy and technical discussions in advance of 
the ITU meeting?
    Answer. Regarding the policy and technical responsibilities of the 
FCC staff in general, I respectfully defer to Chairman Genachowski. In 
the meantime, I have been fully engaged on this important issue. I have 
written an editorial for the Wall Street Journal (which is attached), 
delivered speeches domestically and internationally and testified 
before the House Subcommittee on Communications and Technology. In 
addition, I have met with officials at the International 
Telecommunications Union, fellow regulators around the world, as well 
as private sector stakeholders to raise awareness and enlist support.

    Question 5. What is the view of the Commission on proposals by 
other nations to move oversight of critical Internet resources, such as 
naming and numbering authority, to the ITU or other international body?
    Answer. While I cannot speak for the full Commission, I will 
reiterate that I oppose any and all efforts by the ITU, or any 
governmental body, to regulate the Internet. For an outline on my 
position on this matter, please see the attached copy of an op-ed 
published in the Wall Street Journal on February 21, 2012.

    Question 6. American companies have had an historical advantage 
when it comes to the Internet because the innovation that has fueled 
the growth of the Internet started here. Companies were created in an 
environment where unconstrained Internet access provided them with a 
platform to succeed. In this way, America had a ``strategic bandwidth 
advantage'' over other countries. It was perhaps inevitable that this 
advantage would narrow, as broadband speeds have improved around the 
world. Given that context: Is it your view that this ``strategic 
bandwidth advantage'' has led and will continue to lead to job creation 
and greater innovation?
    Answer. The Internet has thrived because government has generally 
taken a hands-off approach. If we do not alter that approach, it is my 
belief that America will continue to lead the world in Internet-related 
job creation and innovation.

    Question 7. There has been bipartisan consensus in this body to 
encourage deployment and adoption of broadband for the economic and 
social benefits it brings. How do data caps help or hinder in 
accomplishing that goal?
    Answer. The Internet has flourished due to the fact that the 
government has largely not imposed regulations on it. Government 
interference in Internet service providers' abilities to manage their 
own systems will hinder their ability to freely choose how to allocate 
resources and will likely slow continued investment in broadband 
deployment.

    Question 8. On the surface, usage-based billing makes sense for 
consumers but I am concerned about the chilling effect data caps could 
have on future growth of Internet video and other content. How do we 
ensure fair billing practices for consumers without creating a system 
that stifles innovation and growth of the Internet?
    Answer. I am sure you would acknowledge the FCC's long-standing 
support of low power television and appreciate the success of low power 
TV since the FCC created the service in 1982. During this span of 30 
years you are no doubt aware that low power TV has developed into an 
essential source of information and entertainment for many diverse 
communities across the country. I think two perfect examples of this 
dynamic would be the audiences who enjoy Spanish-language programming 
and those who enjoy religious programming. Likewise, LPTV has been the 
an entry point for small businesses into the broadcast market and 
today, many LPTV owners are small businessmen who work hard to continue 
to serve their local communities with news and resources aimed at the 
community.

    Question 9. With this in mind, and also considering the likely end 
to a great deal of low power programming as a result of the repacking, 
how do you expect that this approaching void in unique programming will 
be filled with respect to the core missions of diversity and localism?
    Answer. As you know, LPTV is a secondary service. Stations may be 
displaced if they cause harmful interference to a full-power station or 
primary user, and the spectrum legislation does not include or protect 
LPTV stations. Hopefully, some LPTV opportunities will still remain 
after repacking. We do need to recognize, however, that the video 
programming landscape has changed dramatically. Broadcast is no longer 
the only outlet for speech. The Internet has proven to be the most 
``disruptive'' technology in history and has allowed Americans to 
access programming to watch whenever, wherever and has greatly enhanced 
competition. It is my hope that original content on the Internet will 
continue to grow and I would encourage displaced LPTV broadcasters to 
consider online options.

    Question 10. I would ask each of the commissioners, will you 
support rules that allow LPTV to survive after the repack?
    Answer. I recognize the benefits that low power TV stations provide 
to their communities and would be supportive of rules that enable their 
success after any ``repacking.''
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Amy Klobuchar to 
                        Hon. Robert M. McDowell
    Question 1. As I brought up in the FCC nominations hearing in 
November, we have a population of television stations currently 
operating on the northern border of Canada, particularly in Lake of the 
Woods County. They applied for channel reallocation after the DTV 
transition but had to wait years to get final approval from the 
Canadian government and the FCC this January.
    Looking ahead to the future, the need for international cooperation 
when it comes to spectrum is important to our translator operators on 
the northern border. Has the Commission begun coordination with our 
Canadian counterparts as it relates to incentive auction legislation 
passed in February?** (Senator Klobuchar asked this question in 
Committee and requested written follow up)
    Answer. I agree that there is an important need to closely 
coordinate with our Canadian counterparts as we move forward to 
implement the legislation passed in February. The Commission will also 
need to work with our counterparts in Mexico on this issue. As this 
question pertains to staff efforts to undertake these responsibilities, 
I respectfully defer to Chairman Genachowski.

    Question 2. I believe of one of the most impressive programs the 
FCC operates is the E-Rate program supporting communications technology 
in schools and libraries. Senator Rockefeller and Senator Snowe led the 
effort in creating a program that truly benefits schools and kids 
around the country. Minnesota has received a total of $344 million 
since the E-Rate program started in 1998. This support has enabled 
schools and libraries across rural Minnesota to have telecommunications 
and broadband service giving students the ability to enhance their 
education. I understand that with the increase in demand from schools 
for broadband support, E-Rate program resources are stretched thin, 
including staff time to review and audit applications.
    Will you commit to keeping the resources for administering the E-
Rate program targeted at the intended focus of connecting schools and 
libraries with communication technologies?
    Answer. Yes. Some have advocated that E-Rate funds be used to 
establish a digital literacy program, but my interpretation of Section 
254 of the Telecom Act is that it does not allow for E-Rate funds to be 
used for such educational purposes. Therefore, in addition to the 
establishment of such a program taking from limited E-Rate resources, 
the FCC may not have the legal authority to administer a digital 
literacy program to begin with.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Tom Udall to 
                        Hon. Robert M. McDowell
USF Reform and Tribal Communities
    Question 1. Chairman McDowell, I support reforms to bring the 
universal service fund into the broadband era. One of the past failures 
of USF is on Tribal lands. As you know, Native American communities 
have the worst telephone connectivity rates in the country. Broadband 
availability rates are even worse, perhaps just 10 percent of 
households. These are precisely the areas that can benefit the most 
from Internet technologies that eliminate geographical distance--
whether it is for e-Commerce, distance learning, or telemedicine. So I 
want to thank you and all the Commissioners for continued attention to 
the ``digital divide'' challenge on Tribal lands. Could you discuss how 
USF reforms will better serve Tribal communities that currently face a 
digital divide when it comes to broadband?
    Answer. Since arriving at the Commission in 2006, I have made 
support for Tribal and Alaska Native lands a priority during the course 
of my work on Universal Service reform. Accordingly, the USF Order from 
last fall recognized the unique needs of Tribal lands in various ways. 
For example, the Order created special mobility funds--Tribal Mobility 
Fund Phase I ($50 million) and Tribal Mobility Phase II ($100 
million)--which were designed to increase deployment of mobile 
broadband to Tribal lands, established tribal engagement obligations 
between eligible telecommunications carriers and tribal leaders, and 
set forth a priority review process for waiver petitions that pertain 
to Tribal lands.

    Question 2. Given the unique digital divide challenge on Tribal 
lands, how will USF reforms ensure that telecommunications companies in 
Tribal areas are able to bring broadband to unserved communities?
    Answer. Unfortunately, a high proportion of Tribal lands are 
currently not served by broadband. As part of its USF reform efforts, 
the Commission tried to find new ways to target funding toward areas of 
our nation where broadband has not been deployed. To help meet this 
objective, the Commission reformed certain components of the USF 
program that were not fiscally prudent. For example, prior to the 
Commission's reforms, multiple providers were able to receive high cost 
fund support for the same locations. Additionally, providers were 
permitted to receive subsidies to serve areas that were already served 
by unsubsidized competitors. Ending these components of the USF system 
will allow for the funds to be retargeted to areas of our nation that 
are unserved, such as on Tribal lands. Additionally, in addition to the 
tribal mobility funds discussed above, the Commission also created a 
special ``remote areas'' fund which will become available for remote 
parts of our nation.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Mark Warner to 
                        Hon. Robert M. McDowell
    Question 1. Two years ago, the President announced his intention to 
free up 500 MHz of spectrum for wireless broadband use. This initiative 
is even more necessary today due to exploding data usage by consumers, 
which is leading to faster-than-expected capacity constraints across 
the country. Are you satisfied with the current pace of the 
identification and reallocation of spectrum to commercial broadband 
use? If not, why not? Do you have additional suggestions about how 
Congress or the Federal Government could accelerate the process?
    Answer. The National Broadband Plan, released in March 2010, 
recommended that the government identify and release 500 megahertz of 
spectrum for mobile broadband use over the course of ten years. In the 
intervening years, the government has neither identified nor released 
any such spectrum. Furthermore, no plans appear on the horizon that 
would make available new spectrum for mobile broadband use. 
Accordingly, I am disappointed.
    I am all the more disappointed to learn of the recent findings of 
the President's Council of Advisors on Science and Technology (PCAST). 
In its report of July 20, 2012, PCAST concludes that ``the traditional 
practice of clearing and reallocating portions of the spectrum used by 
Federal agencies is not a sustainable model for spectrum policy.'' 
PCAST further concludes that, instead ``the best way to increase 
capacity is to leverage new technologies that enable larger blocks of 
spectrum to be shared.''
    First of all, ``sharing'' is an ill-defined term. But more 
importantly, sharing is not a panacea, and will not likely lead to 
widespread robust deployment of mobile broadband, let alone result in 
new revenue to the U.S. Treasury. Therefore, I remain hopeful that the 
Federal Government will think more creatively to identify new ways to 
encourage the Executive Branch to relinquish Federal spectrum for 
auction, as well as to help create a policy framework that encourages 
greater technological advancements and investments in spectral 
efficiency--that is, to squeeze more capacity out of currently 
available airwaves.

    Question 2. The USF reforms--which I supported--seek to deploy more 
mobile and fixed broadband services to rural and underserved America. 
At the same time, mobile data forecasts indicate that the volume of 
data traffic on mobile service provider networks will increase 16 times 
from 2011 to 2016. Rural Virginia wants to be part of the broadband 
economy, however, high quality broadband service just hasn't been 
available where consumers and rural economic development needs demand 
it. What would happen to the pace of rural broadband deployment if 
Universal Service Fund Reforms are blocked or slowed down at this time?
    Answer. The USF Order steered USF funding toward areas of our 
nation that are currently unserved by broadband. To that end, the FCC 
reformed certain components of the USF program that were not fiscally 
prudent. For example, prior to the Commission's reforms, multiple 
providers were able to receive high cost fund support for the same 
locations. Additionally, providers were permitted to receive subsidies 
to serve areas that were already served by unsubsidized competitors. If 
these, among the many other USF reforms, are blocked or slowed down, 
efforts to support broadband in unserved areas would be thwarted.

    Question 2a. Why is it important to move forward in terms of 
leveraging existing Federal funding to deploy more broadband to rural 
and underserved America?
    Answer. One of the driving forces behind USF reform was the need to 
ensure that those funds are leveraged to the maximum extent possible. 
Afterall, USF is ultimately paid for by the consumers, and the 
Commission has a responsibility to ensure that these funds are used 
wisely. In addition to the reforms discussed in the previous question, 
the USF Order also established a competitive auction process which will 
hopefully lead to a more efficient system in the future.

    Question 2b. I sent a letter to the FCC in 2011 arguing that 
although 4 Mbps download/1 Mbps upload may be adequate for now, this 
standard should not be considered an acceptable level of service in the 
future. How important is it to you to see that the acceptable level of 
broadband service advances over time?
    Answer. It is very important for policymakers to implement policies 
that encourage--and not hinder--advances in broadband services. As 
forth in Section 254(b)(3) of the Telecommunications Act, consumers in 
rural areas of our nation ``should have access to telecommunications 
and information services, including interexchange services and advanced 
telecommunications and information services, that are reasonably 
comparable to those services provided in urban areas.'' In other words, 
it's not just a good idea, it's the law.

    Question 3. The Commission has a number of highly anticipated open 
Notices of Proposes Rulemaking. Now that the Commission has five highly 
capable commissioners, how soon do you expect to reach decisions on key 
issues? I would encourage you to reach decisions on important matters 
as soon as possible because the delay of long-standing rulemakings has 
caused some frustration.
    Answer. Thank you. I agree. We should strive to finish all of our 
tasks as quickly as possible without sacrificing quality.

    Question 4. Looking back at FCC data stretching to 2005, the number 
of full-time equivalents in the Office of Engineering and Technology 
appears to have dropped from 116 to 81. Do you believe this reduction 
is the source of the backlog? Why has this office, which would seem to 
be at the heart of the Commission's work, have declined over time when 
other bureaus or offices have grown or at least stayed flat?
    Answer. Although I applaud intelligent efforts to make government 
more efficient through beneficial reductions in head counts, by every 
objective measure I have seen that the decline in the number of quality 
engineers at the FCC has made it harder for us to carry out our 
Congressionally mandated obligations. In other words, I share your 
concern about the decline in the number of engineers in the 
Commission's Office of Engineering and Technology. In fact, I wrote to 
Chairman Genachowski on this and other matters in July 2009. The 
Commission's most precious resource, really its only resource, is its 
people. Many of our most valued team members are nearing retirement age 
or have already retired. We need to do more to recruit and retain 
highly-qualified professionals to fill these slots.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Mark Begich to 
                        Hon. Robert M. McDowell
Senator Begich Opening Statement
    Chairman Genachowski, I want to thank you for working with me 
during the FCC's recent efforts to reform the Universal Service Fund. I 
understand the need for efficiencies, and overall support the notion of 
USF reform. I also understand the FCC's efforts to work within a 
reasonable budget. However, the reality is that given Alaska's 
geography, distance from the Lower 48, and the very remote locations of 
small rural communities, all of whom must be connected to 'the grid' 
via ``middle-mile'' terrestrial, satellite or undersea fiber circuits, 
means that Alaska is very different. Our distances are greater, our 
population is smaller, and our costs are much higher, particularly as 
it relates to the very high cost of middle-mile circuits for broadband.

    Question 1. I understand the Commission desire to establish capital 
expense and operating expense limits for rural rate of return carriers. 
And, whether I agree or not, I understand that your staff's recent 
order establishing what is called a ``regression analysis'' to limit 
expenses puts a limit on most small companies at their current level of 
capital and operating expenses. Thank you for revisiting the formula 
recently, however there are still some companies that will be severely 
impacted by reductions to be implemented on July 1. I understand that 
your staff is well aware that the model contains data errors and other 
possible analytic flaws.
    Since your staff admits that these flaws exist, why doesn't the FCC 
limit the July 1 impact to the proposed limitation of all companies to 
their current level of expenses instead of implementing the reduction 
on a few when the reductions may be based on data errors and flaws.
    Answer. First, the constructs of the regression analysis were 
created by Wireline Competition Bureau staff, under the control of the 
Chairman, and were set forth in a bureau level order. Second, I have 
consistently said that USF reform is an iterative process and we will 
constantly monitor its implementation, listen to concerns, and quickly 
make adjustments, if necessary. Third, if carriers have concerns 
regarding the use of data that is flawed, in their view, it is my 
understanding from the Commission's bureau professionals that the 
carriers can seek correction of the data through a streamlined waiver 
process, and they would not have to follow the stricter waiver 
requirements set forth in the USF order. I am seeking further 
clarification from the bureau regarding this point.

    Question 1a. I know that the order limits the initial level of the 
impact and transitions in the impact, but why implement this reduction 
on a few until you know that you have it right?
    Answer. For those carriers that are concerned that data errors and 
flaws have incorrectly led to reductions of USF support, it is my 
understanding that they can file a waiver petition for correction of 
such data through a streamlined process. I am seeking further 
clarification from the bureau regarding this point.

    Question 2. It appears highly likely that as a result of the 
November USF/ICC order many rural carriers will lose revenues--both USF 
support and from elimination of crucial intercarrier compensation. Is 
that correct?
    Answer. While universal service funding levels will be reduced for 
some rate-of-return carriers due to the Commission's USF reforms, other 
rate-of-return carriers will see an increase in universal service funds 
due to the reforms. Regarding intercarrier compensation reform, the 
Commission established a regime to phase-out hidden subsidies. It 
provided rate of return carriers a longer transition period (9 years) 
compared to the transition period provided for price cap carriers (6 
years). These intercarrier compensation reforms, coupled with the 
recovery mechanism, were intended to provide more certainty than the 
previous status quo for the rate-of-return industry, especially since 
many rate-of-return carriers have increasingly faced line loss at an 
unpredictable rate.

    Question 3. Alaska, like 22 other states, has a complimentary state 
level universal service program. The Alaska state fund disburses over 
$15 million to Alaskan carriers each year. Do you anticipate these 
State funds will have to expand to cover revenue lost from the reforms 
you are implementing? And if so, have you calculated how much these 
State funds will need to grow?
    Answer. Many of the USF reforms have not yet taken effect and 
various petitions are still pending before the FCC. Therefore, it is 
premature to know whether state funds will need to be used.

    Question 4. The E-Rate program has always meant a great deal to the 
State of Alaska, ensuring that the children and educators living and 
working in our state's most remote towns and villages have access to 
the Internet and distance learning and professional development courses 
that are otherwise unavailable to them locally.
    Let me quote from comments filed with the FCC last week by the 
Superintendent of the Dillingham City School District: As a small, 
rural school district in Alaska that has high poverty, low socio-
economic, and predominantly native Alaskan population (Yupik), ``I want 
to thank the FCC for our current level of E-Rate funding. We are an 
``off the road'' community, meaning the only way in and out is by air, 
dog sled, snow machine, or boat. We just recently acquired access to 
high-speed fiber Internet via GCI Corporation extending this service to 
rural, remote areas of Alaska. The cost for this more than doubled our 
annual rate and without the current E-Rate support we could not afford 
this service.'' Is there a better way to administer the digital 
literacy program without damaging E-Rate processing?
    Answer. First, I recognize that USF has played a critical role in 
many rural parts of our nation, especially in Alaska, for education, 
health care and general communication needs. Second, Chairman 
Rockefeller asked at the hearing whether I promised not to take funds 
from E-Rate, funnel funds through E-Rate, or use E-Rate legal authority 
for digital literacy initiatives, and I responded ``yes.'' Finally, as 
to whether there is a better way to administer a digital literacy 
program, my interpretation of Section 254 of the Telecom Act is that it 
does not allow for E-Rate funds to be used for such educational 
purposes. Therefore, in addition to the establishment of such a program 
taking from limited E-Rate resources, the FCC may not have the legal 
authority to administer a digital literacy program to begin with.

    Question 5. Also wish to highlight the importance of keeping intact 
reliable source of communications to relay emergency and lifesaving 
information to those areas that lack reliable cellular or Internet 
service.
    It is imperative that rural communities continue to have reliable 
sources of communications in cases of emergency and lifesaving 
situations.
    Can the Commission comment on ways to improve the distribution of 
emergency alert information?
    Answer. See answer below.

    Question 6. The due diligence work done day in and day out by local 
broadcasters will be lost if constituents can't receive it. How does 
the FCC intend to improve this?
    Answer. I have heard from many broadcasters about the benefit of 
broadcast signals to provide vital information to Americans during 
emergencies. They stress that one-way broadcast transmissions do not 
suffer from the capacity constraints experienced by wireless systems 
when, during an emergency, everyone is attempting to use their devices 
to contact their families and access the Internet. I have seen 
demonstrations of Mobile TV and Mobile EAS, which will allow mobile 
devices to display broadcast signal if they contain the requisite chip 
and software or which the use of a device with an antenna that can plug 
into a wireless device. This could develop into a valuable means of 
distributing emergency alerts and the information compiled by 
broadcasters to the American people, especially in rural areas.
                               Exhibit A

                                         Commissioner Robert M. McDowell
----------------------------------------------------------------------------------------------------------------
 Dates of Travel/                                                                     Registration
  Length of Stay    Purpose of Travel/Event(s)  and Dates        Role at Event            Fee?        Total cost
----------------------------------------------------------------------------------------------------------------
08/21-08/24/2011   To Attend the Tech Policy Institute's    Speaker; Bilateral                None     $1,869.15
                    Aspen Forum in Aspen, Colorado.          meetings with
                   Deliver keynote remarks; Speak on panel   government officials
                    presentation; Meet with government       and industry; Give
                    officials; Meet with industry            media interviews.
                    officials; Meet with representatives
                    from civil society; Give media
                    interviews. (8/21--8/23)
----------------------------------------------------------------------------------------------------------------
08/29-08/30/2011   Sioux Falls, South Dakota.               Participated in                   None     $1,448.55
                   Roundtable discussions hosted by          roundtable
                    Senator John Thune. To participate in    discussions re USF
                    roundtable discussions regarding         with Senator John
                    issues with Senator John Thune, his      Thune and other
                    staff, multiple telecom service          speakers; Meet with
                    providers and broadcasters who serve     government and
                    South Dakota and to tour a telecom       industry officials;
                    carrier's central office facility. (08/  Tour a telecom
                    30)                                      carrier's central
                                                             office facility.
----------------------------------------------------------------------------------------------------------------
09/27-09/29/2011   Jackson, Wyoming.                        Meet with WY                      None     $1,783.81
                   Roundtable discussions re universal       broadcasters; Meet
                    service fund issues with Wyoming         with WY telecom
                    telecommunications companies and state   companies and state
                    government officials; Meet with WY       officials; Tour cable
                    broadcasters; Tour of cable TV           TV facilities.
                    facilities. (9/27--9/28)
----------------------------------------------------------------------------------------------------------------
11/01-11/08/2011   London, UK and Brussels, Belgium.        Speaker; Meeting with             None     $6,741.75
                   London: Speaker at several venues; Meet   government, industry
                    with investment analysts; Meet with      and civil society
                    Members of Parliament; Meet with         officials.
                    Ministry for Culture, Communications
                    and Creative Industries; Give media
                    interviews; Meet with communications
                    industry representatives; Meet with
                    civil society representatives; Meet
                    with OfCom. (11/02-11/04)
                   Brussels: Keynote speaker at The Global
                    Forum; Meet with foreign government
                    officials; Meet with industry
                    officials; Meet with civil society
                    officials. (11/05-11/07)
----------------------------------------------------------------------------------------------------------------
11/14-11/16/2011   Silicon Valley, California.              Speaker; Meet with                None     $,1664.51
                   Speaker at Federal Communications Bar     industry officials;
                    Association event; Meet with             Meet with civil
                    government and industry officials. (11/  society officials;
                    14-11/16)                                Meet with government
                                                             officials.
----------------------------------------------------------------------------------------------------------------
01/10-01/13/2012   To attend the 2012 International         Speaker; Meet with                None     $1,869.04
                    Consumer Electronics Show (CES) Las      industry government
                    Vegas, Nevada.                           and civil society
                   Speaker on panel presentation; Meet       officials; Give media
                    with industry, government and civil      interviews; Learn
                    society officials; Learn about latest    about latest
                    technologies on trade show floor; Give   technologies.
                    media interviews; Meet with foreign
                    government officials (1/10-1/12).
----------------------------------------------------------------------------------------------------------------
01/19/-01/20/2012  Speaker, Duke University, Durham, North  Speaker; Meet with                None       $446.30
                    Carolina.                                education industry
                   Speaker in academic settings; Meet with   and civil society
                    industry and civil society officials;    officials.
                    Tour charitable community center and
                    meet with its officials. (1/19-1/20)
----------------------------------------------------------------------------------------------------------------
01/21-01/25/2012   To Attend the World Radiocommunication   U.S. Delegate;                    None     $4,390.52
                    Conference (WRC) Geneva, Switzerland     Speaker; Participate
                    as an official member of the U.S.        in bilateral
                    delegation.                              discussions.
                   Meet with foreign government officials;
                    Meet with officials from industry and
                    civil society; Meet with U.S.
                    Government officials. (1/22-1/24)
----------------------------------------------------------------------------------------------------------------
02/22-02/29/2012   Meetings in Madrid, Spain; GSMA Show,    Speaker; Meetings with            None     $5,134.56
                    Barcelona. Speaker GSMA Show; Meet       industry; Bilateral
                    with foreign government officials;       meetings with foreign
                    Meet with civil society officials;       government officials.
                    Meet with industry executives; Meet
                    with U.S. Government officials; Learn
                    about latest technologies on trade
                    show floor. (2/23-2/28)
----------------------------------------------------------------------------------------------------------------
03/15/2012         Speaker, University of Virginia,         Speaker; Meet with                None       $111.02
                    Charlottesville, Virginia.               university officials;
                   Speaker at Virginia Broadcasters event;   Meet with rural
                    speaker at telemedicine forum at         healthcare officials.
                    University of Virginia; Meet with UVA
                    officials; Give media interviews. (3/
                    15)
----------------------------------------------------------------------------------------------------------------
04/16-04/18/2012   To attend the National Association of    Speaker; Meet with                None     $1,426.30
                    Broadcasters Show, Las Vegas, NV.        industry and civil
                   Speaker on panel presentation; Meet       society officials.
                    with industry officials; Meet with
                    civil society officials; Give media
                    interviews. (4/16-4/18)
----------------------------------------------------------------------------------------------------------------
05/08/2012         Speak at CTIA Show, New Orleans,         Speaker; Meet with                None       $966.45
                    Louisiana.                               industry and civil
                   Speaker on panel presentation; Meet       society officials.
                    with industry and civil society
                    officials; Learn about newest
                    technologies on trade show floor; Give
                    media interviews. (5/08)
----------------------------------------------------------------------------------------------------------------
05/22/2012         Speak at The Cable Show 2012 (National   Speaker; Meet with                None       $232.91
                    Cable & Telecommunications               industry and civil
                    Association) in Boston, Massachusetts.   society officials.
                   Speaker on panel presentation; Meet
                    with industry and civil society
                    officials; learn about the latest
                    technologies on trade show floor. Give
                    media interviews. (5/22)
----------------------------------------------------------------------------------------------------------------
06/07/2012         Speak at TIA Show, Dallas, Texas.        Speaker; Meet with                None       $949.07
                   Give keynote address; Speak at civil      industry and civil
                    society event; Meet with industry        society officials.
                    officials; Give media interviews. (6/
                    07)
----------------------------------------------------------------------------------------------------------------
06/24-07/02/2012   Rome, Italy.                             Speaker; Meet with                None     $6,180.19
                   Speaker at civil society event held in    foreign government
                    Italian Parliament; Bilateral meetings   officials; Meet with
                    with officials from Italian              civil society and
                    government; Meet with industry           industry officials;
                    officials; Bilateral meetings with       Tour government radio
                    officials from the Holy See; Meet with   and TV facilities.
                    U.S. Government officials; Give press
                    interviews; Tour communications
                    facilities of Vatican City. (6/25-6/
                    30)
----------------------------------------------------------------------------------------------------------------


               Angela Giancarlo, Chief of Staff and Senior Legal Advisor to Commissioner McDowell
----------------------------------------------------------------------------------------------------------------
 Dates of Travel/                                                                     Registration
  Length of Stay    Purpose of Travel/ Event(s) and Dates        Role at Event            Fee?        Total Cost
----------------------------------------------------------------------------------------------------------------
11/01-08/2011      To support and assist Commissioner in    support and assist                none     $5,969.71
                    official business meetings in London,    Commissioner
                    England (11/02-11/05); to support
                    commissioner's participation in
                    GlobalForum conference in Brussels,
                    Belgium (11/06-11/07)
----------------------------------------------------------------------------------------------------------------
11/13-15/2011      To speak at a Continuing Legal           speaker                           none     $1,849.44
                    Education seminar, ``Federal
                    Communications Commission and Federal
                    Activity Review: Update on Key
                    Wireless Developments in the Federal
                    Government,'' sponsored by Law
                    Seminars International, in Seattle,
                    Washington (11/14)
----------------------------------------------------------------------------------------------------------------
1/21-28/2012       To support U.S. Government by serving    Senior U.S. Delegate              none     $6,282.53
                    as Senior Member, U.S. Delegation,
                    2012 World Radio Communication
                    Conference in Geneva, Switzerland (1/
                    22-27)
----------------------------------------------------------------------------------------------------------------
2/22-29/2012       To support and assist Commissioner in    support and assist                none     $5,882.99
                    official business meetings in Madrid,    Commissioner
                    Spain (2/23-25); to support
                    commissioner's participation in GSMA
                    Conference in Barcelona, Spain (2/26-
                    28)
----------------------------------------------------------------------------------------------------------------
4/27-29/2012       To speak on panel, ``View from the       speaker                           none       $324.12
                    Agencies,'' sponsored by the
                    Telecommunications Industry
                    Association, in Cambridge, Maryland (4/
                    28)
----------------------------------------------------------------------------------------------------------------
5/07-10/2012       To participate in official meetings, to  support and assist                none     $2,244.64
                    support and assist Commissioner (who     Commissioner, speaker
                    was also a speaker), and to speak on
                    panel, ``Time to Fuel Up? Spectrum,
                    Auctions, and Steps to Meet Rising
                    Demand,'' at the CTIA Conference in
                    New Orleans, Louisiana (5/09)
----------------------------------------------------------------------------------------------------------------


                          Erin McGrath, Legal Advisor, Media, to Commissioner McDowell
                             (on detail from the Wireless Telecommunications Bureau)
----------------------------------------------------------------------------------------------------------------
 Dates of Travel/                                                                     Registration
  Length of Stay    Purpose of Travel/ Event(s) and Dates        Role at Event            Fee?        Total cost
----------------------------------------------------------------------------------------------------------------
4/14/2012-         NAB Show 2012 (National Association of   Speaker;                          None     $1,751.21
4/18/2012           Broadcasters) (4/15-4/17) To speak on   support and assist
                    luncheon panel at ABA/FCBA/NAB           Commissioner
                    Presents ``The 31 Flavors of Local
                    Broadcasting'' (4/15); to participate
                    in official meetings (4/16-4/17); to
                    support and assist Commissioner (who
                    was also a speaker); to meet with
                    industry participants; and to learn
                    about the latest technologies on the
                    show floor
----------------------------------------------------------------------------------------------------------------
5/21/2012-         The Cable Show 2012 (National Cable &    Speaker;                          None       $890.67
5/23/2012           Telecommunications Association) (5/21-  support and assist
                    5/22) To speak on panel, ``Legally       Commissioner
                    Speaking: FCC Advisors on Law, Policy,
                    Telecom, and the Future'' (5/22); to
                    participate in official meetings (5/
                    22); to support and assist
                    Commissioner (who was also a speaker);
                    to meet with industry participants;
                    and to learn about the latest
                    technologies on the show floor
----------------------------------------------------------------------------------------------------------------

                                 ______
                                 
  Response to Written Questions Submitted by Hon. Olympia J. Snowe to 
                        Hon. Robert M. McDowell
Comprehensive Spectrum Inventory
    As you know I have been calling for a comprehensive inventory for 
over three years now. A comprehensive inventory of both Federal and 
non-federal spectrum would provide decision makers at the FCC, NTIA, 
and Congress a clearer, more detailed, and up-to-date understanding of 
how spectrum is currently being used and by whom--data essential to 
sound policy decisions and spectrum management--mainly given the FCC 
manages over 2 million active licenses and NTIA administers over 
450,000 assignments.
    While I appreciate the Commission's effort in conducting a 
``baseline'' spectrum inventory and creating Spectrum Dashboard and the 
LicenseView, it is not a sufficient substitute to conducting a 
comprehensive inventory. In addition, Representative Stearns, Senator 
Warner and former Commissioner Copps have all recently called for a 
comprehensive spectrum inventory. So there is a growing appeal for such 
effort to have a better understanding of spectrum usage.

    Question 1. How important would having more detailed data on 
spectrum usage and infrastructure and device deployment be to pursuing 
sharing opportunities between spectrum users and promoting more 
spectral efficiency?
    Answer. I am not convinced that undertaking a formal spectrum 
inventory would be an effective use of the Commission's limited 
resources. For instance, any data captured would reflect a mere 
snapshot in time, rather than paint a full picture of spectrum use on a 
given channel, within a given band and/or at a given location. To the 
extent that private sector spectrum users seek additional information 
on spectrum matters in connection with the pursuit of sharing 
opportunities, I would hope that the FCC's databases and personnel 
would be helpful resources.
FCC Technical Expertise
    In Chairman Genachowski's remarks, he stated the Commission is 
operating with its lowest number of employees. The FCC is also 
unfortunately operating at one of its lowest number of engineers--over 
a 60 percent reduction in engineers from the 1950s to today--yet the 
Commission is dealing with significantly more technically complex 
issues such as advanced wireless communications, commercial cable & 
satellite industries, public safety interoperability, more device 
certifications, and broadband.
    Engineers at the FCC play an essential role in regulatory matters 
by providing technical consultation on policy matters, managing 
spectrum allocations, and creating new opportunities for competitive 
technologies. I'm concerned this lack of expertise is hampering 
innovation and job growth because of the excessive delays to businesses 
that are waiting approval to technical waivers, experimental licenses, 
and filed petitions at the agency.
    Others share my concern, a 2009 Government Accountability Office 
report found that the agency ``faces challenges in ensuring it has the 
expertise needed to adapt to a changing market place.'' And 2011 
Wireless Report by the National Research Council suggested the FCC 
would benefit from ``enhancing its technology assessment and 
engineering capabilities'' due to ``entering an era in which technical 
issues are likely to arise on a sustained basis.''

    Question 2. Do you believe the FCC has the sufficient level of 
technical resources, given the concerns various entities have raised?
    Answer. The FCC has the sufficient level of technical resources. 
Any additional staff would increase the FCC budget and is not 
necessary. Throughout my tenure, I have enjoyed a positive and 
enjoyable working relationship with Julius Knapp, our Chief of Office 
of Engineering and Technology (OET) and his entire team of in-house 
engineers and technologists. OET is an invaluable resource to my staff 
and me--incredibly knowledgeable, not to mention responsive--on 
engineering and IT matters.
Competition and Innovation
    A growing number of consumers are combing traditional media 
services with more innovative products that allow them to stream online 
content. Some products allow consumers to stream online content of all 
types and aggregate it with either free OTA broadcasts or basic cable 
service.
    The Commission is considering an order that would allow for the 
encryption of basic cable signals. While there are several benefits to 
encrypting basic cable service, there are also some concerns that 
innovative devices allowing users to combine online content with basic 
cable service may no longer be compatible without additional hardware 
or software or reduce functionality of the device, and may face 
additional monthly fees for a cable box. As you know, Congress 
specifically addresses this issue in Section 624A of the statute (47 
U.S.C. 544a), which requires the FCC to assure compatibility between 
consumer electronics equipment and cable systems so cable customers can 
enjoy the full benefits of both.

    Question 3. Is there a solution that would provide the positive 
benefits of cable encryption to cable operators while also allowing for 
IP-based devices and other innovative products that more consumers are 
purchasing to have the opportunity for success in the marketplace? Are 
there any risks to consumers of allowing innovative devices the ability 
to decrypt the basic cable signals so they can access those channels 
unencumbered by additional equipment or reduced functionality?
    Answer. These issues regarding the connectivity of IP-based devices 
to equipment provided by cable operators have been raised in the basic 
service tier encryption proceeding. Numerous parties have filed in what 
has become an extensive record. We are reviewing the record thoroughly. 
As this matter is currently before the Commission in the form of an 
open proceeding, it is not appropriate to comment on the current state 
of deliberations at this time.

    Question 4. It's my understanding that other non-cable MPVDs are 
able to encrypt all of their video signals, even basic video service. 
Should Congress revisit the statute to provide greater parity in 
regards to signal encryption?
    Answer. Generally speaking, I subscribe to the belief that Congress 
tells the Commission what to do, not the other way around. Nonetheless, 
I have maintained that all of our rules should be modernized to reflect 
the current marketplace. As stated above, the Commission is currently 
considering whether to allow cable operators to encrypt the basic 
service tier so it is not appropriate for me to comment on an open 
proceeding.
Universal Service Fund & E-Rate
    The National Broadband Plan and subsequent research have identified 
the lack of digital literacy among low-income Americans as a major 
barrier to broadband adoption. To address this, the Commission proposed 
implementing and operating a digital literacy program through the E-
Rate program's administrative structure. The FCC has proposed $50 
million in annual funding over a four year period and that such funds 
would be provided through saving from the restructuring of the Lifeline 
program. While I'm a strong advocate for a greater focus on improving 
digital literacy to spur broadband adoption, I'm concerned about the 
impact this proposed program will have on the E-Rate program, if it is 
administered through it.

    Question 5. I'm concerned the proposed Digital Literacy program 
will be difficult to monitor. With E-Rate, it is possible and cost-
effective to send auditors to school and library sites to ensure 
applicants have actually purchased and installed the equipment for 
which they received E-Rate support and providers have actually 
delivered promised services. By contrast, it seems it may be difficult 
for auditors to determine this proposed digital literacy initiative's 
funds have actually been spent on courses. Can you tell me how USAC 
could properly audit this digital literacy initiative?
    Answer. I share your concern that a proper audit of such a program 
could prove challenging. Nonetheless, I have long advocated a 
comprehensive audit of USAC. We should keep in mind that universal 
service funds are paid by consumers. The FCC should ensure certain 
thresholds are met when administering USF programs. First and foremost, 
the funds should be used for purposes that are authorized by Congress. 
Also, the FCC should ensure that the funds are used in an efficient and 
transparent manner. Although addressing digital literacy issues may be 
important, I question whether the proposed digital literacy program 
would meet either of these threshold questions.
Competitive Access to Spectrum
    The ``spectrum crunch'' is not exclusive to just one or two 
carriers, it is industry wide. And while the top four carriers provide 
wireless service to 90 percent of the total subscribers in the U.S., 
more than 30 million other subscribers use someone else. As you know, 
Section 309(j)(3) of the statute (47 U.S.C. 309(j)(3)) requires 
Commission to promote ``economic opportunity and competition'' by 
``disseminating licenses among a wide variety of applicants'' including 
small businesses, rural carriers, and minority and woman-owned 
businesses.

    Question 6. How should the FCC ensure, in a fair and competitive 
manner, that all carriers--large and small--have adequate access to 
this critical but finite resource?
    Answer. As the FCC moves forward to implement the new incentive 
auction law, I will work with my colleagues to ensure that our auction 
rules are minimal and ``future proof,'' allowing for flexible uses in 
the years to come as technology and markets change. I am hopeful that 
new rules should include band plans that offer opportunities for small, 
medium and large companies to bid for and secure licenses without 
having to exclude any player from the auctions. Recognizing that 
overly-complex rules governing the C and D Blocks of the 700 MHz 
auction held in 2007-2008 produced several harmful unintended 
consequences, we should learn from the past and keep new auction rules 
minimal. As an overarching matter, I hope our new rules will stick with 
the Commission's more recent ``flexible use'' policy. Old style 
``command and control'' (prescriptive) rules hamper creative 
entrepreneurs who are in the best position to understand and satisfy 
consumer demands. Otherwise, the main goals of the new law, putting 
more bandwidth into the hands of consumers as quickly as possible and 
maximizing revenue at auction, may not be attained. In order to create 
greater certainty and thus a higher participation level, I hope that we 
will implement the law with humility, simplicity and restraint.
    Several countries have recently held or plan to hold spectrum 
auctions to make more spectrum available for next generation wireless 
communications and broadband. Some of these countries have applied 
certain conditions to their auctions rules. For example:

  1.  In its 4G auction, France's ARCEP provided bidding preferences to 
        carriers that agreed to host MVNOs on its networks and had 
        enhanced rural build-out requirements. It also required roaming 
        agreements--to a losing bidder--for any carrier that won more 
        than one frequency block.

  2.  Germany' regulator, Bundesnetzagentur, applied rural build-out 
        requirements for its 800 MHz auction and placed bidding 
        restrictions on certain carriers.

  3.  The Netherlands reserved two spectrum blocks in the 800 MHz band 
        and one in the 900 MHz band for new entrants.

  4.  Canada, in its 2008 AWS auction, set aside spectrum for a new 
        entrant.

  5.  Czech Republic's CTU has reserved the 1.8 GHz block for a new 
        entrant

  6.  Ofcom has proposed spectrum caps in its upcoming LTE spectrum 
        auction.

  7.  Australia has proposed spectrum caps for its upcoming auction.

    Question 7. It should be noted that several of these auctions ended 
up exceeding revenue expectations. I'm not advocating for the 
implementation of any conditions on any future auctions but I'm curious 
as to why these countries deemed it necessary to apply such conditions 
in their auctions rules? Do you believe the FCC should closely 
examination the recent 4G auctions in other countries to assist in 
determining how best to design future domestic auctions?
    Answer. I would expect that the team responsible for designing the 
forthcoming incentive auctions will examine the recent auctions in 
other countries as part of their work. At the same time, America is 
leading the way in rolling out advanced mobile technologies as it 
always has. We have led because long ago we adopted a lightly-regulated 
framework for the wireless sector.
    For example, the United States has approximately 21 percent of the 
world's 3G and 4G subscribers, and approximately 69 percent of the 
world's LTE subscribers, even though the U.S. is home to less than five 
percent of the global population. American wireless providers are also 
investing more in their infrastructure than their international 
counterparts. In 2011, over $25 billion was invested in the United 
States' wireless infrastructure versus $18.6 billion invested in 15 of 
the largest European countries combined.
    Furthermore, the American mobile market enjoys more competition 
than most international markets, which may suggest that perhaps we are 
studying the efforts of other countries while making different and more 
constructive policy choices here. According to the most recent FCC 
statistics, nine out of ten American consumers have a choice of at 
least five wireless service providers. In Europe, that number is around 
three. As a result, American consumers enjoy lower prices and higher 
mobile usage rates compared to consumers in the European Union (EU)--4 
cents per minute in the U.S. versus 17 cents generally in the EU. 
Wireless subscriber usage on average in the United States is often 
three to seven times more than some countries. At the same time, 
American consumers pay at least one-third less for their more enhanced 
wireless services than consumers in many other parts of the world.
    As you know, Section 309(j)(7) of the statute (47 U.S.C. 309(j)(7)) 
expressly prohibits the Commission from using the expected revenue from 
a spectrum auction as a basis for determining the public interest of 
frequency assignments. Furthermore, Congress, in H.R. Rep. No. 111, 
103d Cong., 1st Sess. 258 (1993), emphasized that ``important 
communications policy objectives should not be sacrificed in the 
interest of maximizing revenues.''

    Question 8. While there is broad agreement auctions are the best 
mechanism to distribute spectrum licenses, is there too much emphasis 
currently being placed on maximizing auction revenues instead of the 
longer term economic benefit that may result? How might such skewed 
focus on proceeds hinder achieving the strategic goals necessary for 
the long term health of the spectrum ecosystem?
    Answer. As discussed above, a minimal amount of regulation created 
the climate for the American private sector to make the American 
wireless sector the best in the world. Policy makers should keep this 
important fact in mind when contemplating the wireless industry's 
regulatory future. Congress determines whether auction proceeds should 
be a priority and it codified that directive in the recent spectrum 
legislation set forth in the Middle Class Tax Relief and Job Creation 
Act of 2012.
Spectrum Efficiency Metrics
    One of the primary, long-standing goals of the FCC has been to 
promote more efficient use of spectrum. The FCC's 1999 Spectrum Policy 
Statement highlighted ``with increased demand for a finite supply of 
spectrum, the Commission's spectrum management activities must focus on 
allowing spectrum markets to become more efficient..'' and Strategic 
Plan for FY 2003-2008 (published in 2002) indicated its general 
spectrum management goal is to ``encourage the highest and best use of 
spectrum . . .''
    In its 2002 report, the Spectrum Policy Task Force developed three 
definitions: spectrum efficiency, technical efficiency, and economical 
efficiency. However, the SPTF concluded ``it is not possible, nor 
appropriate, to select a single, objective metric that could be used to 
compare efficiencies across different radio services.''

    Question 9. In the FCC's search to free up more spectrum for 
wireless broadband, how does the FCC effectively determine and compare 
the spectral efficiency of different types of radio-based services when 
targeting various frequencies for reallocation?
    Answer. As these types of analyses and conclusions are made by the 
bureaus and Office of the Chairman, I respectfully defer to Chairman 
Genachowski and the FCC's technical staff on this question.
    One of the common spectrum efficiency metrics for wireless 
communications is in terms of bits/second/hertz. Some parties have 
suggested more granular metrics such as bits/second/hertz/pop or bits/
second/hertz/cell. It seems like there could be several different 
metrics within each definition of efficiency.
    Robin Bienenstock of Sanford Bernstein raised the issue of network 
density and highlighted the difference between the U.S. and European 
countries. Specifically, Ms. Bienenstock compared California with Spain 
(noting similar size, topography, and population density). A major 
carrier in Spain had 33,000 base stations, whereas a major U.S. carrier 
in California had only 6,000 sites. Across the board, the network 
density for operators in Spain is three to six times higher than that 
of operators in California. With more cell sites, there is greater 
spectrum reuse, which means more efficient use, and a lessening of 
demand for the raw material (spectrum).

    Question 10. Does the FCC use network density as a component of its 
spectrum efficiency metric? If not, given the FCC already imposes 
build-out requirements to licensees, should the FCC explore requiring 
network density guidelines too as a way to promote more efficient use 
of spectrum?
    Answer. As these types of analyses and conclusions are made by the 
bureaus and Office of the Chairman, I respectfully defer to Chairman 
Genachowski and the FCC's technical staff on this question.

    Question 11. Does the FCC have any additional data on network 
density comparisons of the U.S. in relation to other countries?
    Answer. As these types of analyses and conclusions are made by the 
bureaus and Office of the Chairman, I respectfully defer to Chairman 
Genachowski and the FCC's technical staff on this question.
Resolving the ``Spectrum Crunch'' Through Technology
    I'm concerned there is not enough focus on the role of technology 
in meeting the growing demand for wireless network capacity. An Ofcom 
report rightfully points out increasing wireless network capacity 
depends on a combination of ``spectrum, technology, and topology.'' 
Given the challenges we face with reallocation, I believe technology 
will play an even more prominent role.
    For example, research by Ofcom found that early 4G mobile networks 
will be 230 percent more spectrally efficient than 3G networks and that 
efficiency will increase to 450 percent by 2020. Technologies like 
dynamic spectrum access and cognitive radio can considerably improve 
utilization by allowing more aggressive spectrum sharing, and, though 
many years off, quantum entanglement and ``twisted'' waves hold amazing 
potential to significantly, and even possibly infinitely, increase 
capacity without any additional spectrum.
    However, I'm concerned about the threats the U.S. is facing in 
regards to its leadership in innovation, primarily with ICT. Many 
reports highlight most of the global R&D growth will be mainly 
attributed to Asian economies--according to NSF, the United States' 
share of global R&D expenditures dropped from 38 percent to 31 percent 
between 1999 and 2009, while the Asia region grew from 24 percent to 35 
percent. In addition, more U.S.-based companies are locating R&D 
operations overseas--the number of overseas researchers employed by 
U.S. multinationals nearly doubled from 138,000 in 2004 to 267,000 in 
2009.

    Question 12. What more can the government do (besides make the R&D 
tax credit permanent) to foster greater R&D investment, primarily in 
ICT?
    Answer. The Executive Branch should act more aggressively to 
identify and relinquish spectrum held by the Federal Government. The 
underlying message from the recent report from our colleagues at 
National Telecommunications and Information Administration (NTIA) on 
the viability of accommodating commercial wireless broadband in the 
1755-1850 MHz band is disappointing. It appears that other Executive 
Branch agencies did not provide NTIA with sufficient data to support 
many of the assumptions and conclusions. The thrust of the report seems 
to indicate that the Executive Branch is going to resist relinquishing 
more spectrum. For starters, the report does not discuss how 
efficiently, or inefficiently, the Federal Government uses spectrum.
    We must also acknowledge that the Federal Government occupies about 
60 percent of the best spectrum. Federal users have no incentive to 
move off of this prime real estate but do have an incentive to keep the 
rest of us in the dark about how much it really would cost to move them 
and how long that task would really take. In theory, the Executive 
Branch should be especially incentivized to find a way to liberate more 
spectrum to auction for private sector uses in light of the fact that 
Congress updated the National Telecommunications and Information 
Administration Organization Act as part of the recent spectrum 
legislation (set forth in the Middle Class Tax Relief and Job Creation 
Act of 2012) to accommodate reimbursing Federal spectrum users willing 
to move.

    Question 13. Given the benefits that both the private and public 
sectors will reap from more advanced technologies, how can there be 
more collaboration between both sectors to see these technologies to 
fruition?
    Answer. Private and public sectors could collaborate by working 
with greater alacrity to identify sharing opportunities for low power 
operations. Over the years, I have consistently encouraged FCC efforts 
to promote different forms of spectrum sharing--for instance, in the 
``TV white spaces'' within the 700 MHz Band, the 400 MHz Band, and the 
5 GHz Band. These projects have been complex and time consuming, 
however. I am hopeful that these discussions and opportunities would 
proceed with greater speed. At the same time, I caution that the term 
``sharing'' is amorphous and the notion of ``sharing'' has not been 
defined in the context of current deliberations. While spectrum sharing 
opportunities can be beneficial, sharing should not be viewed as a 
panacea to resolve the long-term need for more spectrum in the 
marketplace.

    Question 14. Does the FCC have any estimates on the amount of 
domestic private sector funding in wireless R&D as a percentage of 
overall industry capital investment? Do you believe there is enough 
domestic R&D investment in advanced wireless communications in 
comparison to other countries?
    Answer. While U.S. industries fund approximately 70 percent of 
domestic R&D, the Federal Government is the primary source of funding 
for basic research, providing approximately 60 percent of funding, and 
industry conducts less than 20 percent of the basic research done in 
the U.S., according to the Science Coalition.
    According to CTIA--The Wireless Association, in 2011, over $25 
billion was invested in United States' wireless infrastructure versus 
$18.6 billion invested in 15 of the largest European countries 
combined. I would like to see policies adopted that would make that 
figure spike upward. Time and again, however, business leaders tell me 
that policies that grow government instead of the private sector are 
inhibiting investment. Overall, they say, increased regulation coupled 
with uncertainties over monetary and other government policies are to 
blame for flat growth curves.

    Question 15. How important are Federal programs like NSF EARS and 
DARPA STO to the long-term growth and health of innovation in the 
spectrum ecosystem and should Congress provide greater funding for 
basic research in this area?
    Answer. Generally speaking, I subscribe to the belief that Congress 
tells the Commission what to do, not the other way around. This is 
especially so with regard to budget decisions. That said, these 
programs have added value over the years and it is appropriate to 
review them regularly.
Spectrum Flexibility
    The National Broadband Plan highlighted the importance of spectrum 
flexibility. The NBP concluded that ``flexibility of use enables 
markets in spectrum, allowing innovation and capital formation to occur 
with greater efficiency'' and ``spectrum flexibility, both for service 
rules and license transfers, has created enormous value.'' That 
innovation and capital formation could be beneficial to addressing the 
challenges that exist in making more affordable and faster broadband 
available in rural areas.
    As you know, Section 336 of the statute (47 U.S.C. 336) allows 
broadcasters to offer ancillary and supplementary services, which 
includes data transmission and interactive materials. Section 336 also 
prescribes the assessment and collection of fees related to such 
service offerings, and the FCC, back in 1998, adopted rules requiring 
broadcasters to pay a fee of 5 percent of gross revenues from such 
services for which they charge subscription fees or other specified 
compensation.

    Question 16. If we need to get broadband into rural areas, why not 
let other licensees, like broadcasters, attempt to close the digital 
divide that exists? Mainly, since they may have infrastructure already 
in place to build off of.
    Answer. I am supportive of allowing broadcasters to use their 
spectrum in innovative ways. I believe that our rules should provide 
flexibility to ensure that innovation is not stifled in the years to 
come as technology and markets change. Broadcasters should be allowed 
to put any excess capacity to its highest value use whether it is for 
the creation of multicast stations, Mobile TV, or broadband solutions.
    Even though the FCC adopted rules to avoid unjust enrichment, some 
parties have still raised concerns that such flexibility would be 
unfair since the broadcasters weren't assigned the spectrum via an 
auction. However, as you know, the FCC has only auctioned licenses 
since 1994 and prior to that used comparative hearings and then 
lotteries for frequency assignments--including licenses for wireless 
communications.

    Question 17. If there is concern about ``unjust enrichment'' if 
broadcasters provide broadband, why isn't there the same concern with 
wireless communications licenses issued prior to 1994? Wouldn't the 5 
percent of gross revenue that broadcasters have to pay if they add 
broadband to their signals fairly compensate the government, mainly 
since such service would have to be ``ancillary and supplementary'' to 
their broadcast television signal?
    Answer. As stated above, I support flexible use policies that 
ensure spectrum is always put to its highest-value use. Further, to 
promote spectral efficiency and alleviate capacity constraints, we need 
to encourage secondary market transactions to get our spectrum 
resources into the hands of industry participants that will rapidly 
deploy the bandwidth for the benefit of all Americans. Licensees--
whether they are broadcasters or mobile wireless providers--or 
innovators hoping to launch new technologies and products should be 
able to acquire spectrum through transfers, assignments, leasing 
arrangements and/or channel sharing without being constrained by 
Commission-created barriers dictating that specified frequencies be 
used to provide defined services. Flexibility will hasten the 
deployment of broadband and enable the wireless sector to continue to 
flourish, which will promote job creation and economic growth 
throughout America.
Spectrum Fees
    Recommendation 5.6 of the National Broadband Plan suggested 
``Congress should consider granting authority to the FCC to impose 
spectrum fees on license holders and to NTIA to impose spectrum fees on 
users of government spectrum'' to address inefficiencies in spectrum 
allocations and promote more efficient use of spectrum. It is my 
understanding that every administration since Clinton has requested 
spectrum fee authority from Congress.
    Ofcom imposed similar fees (known as Administrative Incentive 
Pricing) in the late 1990s and issued a report in 2009 that concluded 
the fees ``met its primary objective in helping to incentivise spectrum 
users to consider more carefully the value of the spectrum they use 
alongside that of other inputs, and to take decisions that are more 
likely to lead to optimal use of the available spectrum.'' The report 
also ``found no evidence to suggest that the application of AIP has 
given rise to material adverse consequences for spectrum efficiency.''

    Question 18. Should Congress grant the FCC and NTIA spectrum fee 
authority either on all licenses and assignments or just on non-
auctioned licenses, mainly if the FCC moves to implement greater 
flexibility of spectrum use? Do you believe the FCC can strike the 
proper balance in applying spectrum fees to promote more efficient use 
of spectrum but not to a point that it presents an undue financial 
burden to the licensee?
    Answer. I do not support imposing fees on any entity holding rights 
to use spectrum as the costs will be passed on to consumers.

    Question 19. Some parties have opposed spectrum fees calling them a 
tax. But what is the difference between a spectrum fee that is paid 
annually and a licensee paying a lump sum at an auction? If a spectrum 
fee is a tax, isn't an auction payment a tax as well since it too goes 
to Treasury? Or are both not considered taxes since they are transfers 
to government for the right to use a public good?
    Answer. Congress enacted Section 309(j), authority for awarding 
spectrum based on competitive bidding, in order to determine the 
highest and best use for the spectrum, and to promote economic 
opportunity and competition and ensure that new and innovative 
technologies are readily accessible to the American people. Given this 
rationale, I do not support imposing fees on any entity holding rights 
to use spectrum because the costs will be passed on to consumers.

    Question 20. If not spectrum fees, how should the FCC impose 
economic fairness between licensees that are/were awarded via auctions 
versus those that were awarded via comparative hearings and lotteries?
    Answer. During my time at the FCC, I have advocated for market-
based solutions to public policy challenges, or toward the lightest 
regulatory touch possible and only when absolutely necessary. 
Therefore, I do not support imposing fees on any entity holding rights 
to use spectrum as the costs will be passed on to consumers.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
                        Hon. Robert M. McDowell
    Question 1. An important issue with respect to Universal Service 
Fund Reform that has not been addressed is the industry contribution 
mechanism that pays for USF subsidies.
    Mr. McDowell, you have called on the Commission to act on this 
important matter by this fall. Could you share your views with the 
Committee on the importance of concluding contribution reform in a 
timely fashion?
    Answer. The universal service fund (USF) contribution factor, a 
``tax'' on consumers' phone bills, has risen dramatically over the 
years. It was approximately 5.5 percent in 1998 and spiked to almost 18 
percent in the first quarter of this year. Such a trend is 
unsustainable and is an automatic tax increase on consumers. There have 
been various proposals to reform and update the USF contribution 
methodology for over a decade but none has succeeded in garnering a 
Commission vote. It is imperative that the FCC take its recent reform 
efforts seriously and come to resolution no later than this fall so 
that we can slow down this steady increase of the contribution factor.

    Question 2. Congress recently passed spectrum auction legislation 
and the Commission will begin setting rules for implementation perhaps 
as early as this fall. I'm hearing from some low power television 
(LPTV) interests in my state who are concerned about how the FCC will 
handle low power stations when the FCC conducts their incentive 
auctions, and subsequently goes through a process of clearing channels 
31-51. Low power TV stations provide a valuable service, such as local 
public meetings and religious broadcasting. LPTV has been the entry 
point for small businesses into the broadcast market and today, many 
LPTV owners are small businesses who work hard to continue to serve 
their local communities with news and resources aimed at the community.
    Would you support rules that allow LPTV to survive? What assurance 
can you provide that low power television stations will be protected?
    Answer. I recognize the benefits that low power TV stations provide 
to their communities. LPTV is a secondary service and stations are 
displaced if they cause interference to a full power station. I would 
be supportive of rules that enable their success; however, the spectrum 
legislation does not include or protect LPTV stations.
                                 ______
                                 
   Response to Written Question Submitted by Hon. Roger F. Wicker to 
                        Hon. Robert M. McDowell
    Question. Should the pending 700 MHz public safety waivers be 
dismissed/denied?
    Answer. No. Common sense dictates that the Commission handle these 
pending requests on a case-by-case basis rather than dismiss the lot 
out of hand. In my experience, one-size-fits-all policy making in this 
context rarely works, especially when we are working with jurisdictions 
that have unique characteristics. By examining each waiver request 
individually, we will not delay the deployment of broadband networks to 
the first responders in these communities. Furthermore, the technology 
to knit the interoperable network together, should that be necessary, 
already exists thanks to private sector innovation. It's not clear to 
me why the Commission would want to stand in the way of early adopters 
and the beneficial economies of scale completion of these projects will 
bring to the public safety sphere.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Roy Blunt to 
                        Hon. Robert M. McDowell
    Question 1. To what extent has the Commission taken into account 
online radio and news providers in your most recent quadrennial media 
ownership review proceeding? Are/were online mediums viewed as equal 
competitors to radio and television broadcasters and newspapers?
    Answer. I concurred to the majority of the December 2011 notice, 
because I am concerned that the Commission appears to be prepared to 
accept a regulatory status quo. The Commission should modernize its 
rules to reflect the economic realities of the marketplace, such as the 
growth of digital outlets. We should be realistic and pragmatic, 
instead of pursuing an overly-cautious, wait-and-see approach regarding 
the further development of new media platforms, such as the Internet 
and mobile devices, even though they have already revolutionized the 
market. Further, we have a statutory obligation under section 202(h) to 
eliminate unnecessary mandates and bring our rules into line with the 
modern marketplace.

    Question 2. I'm interested in the progress that the FCC and NTIA 
are making to clear the additional 300 megahertz before 2015, and 500 
megahertz total, that the Administration and industry agree is needed 
to address the pending spectrum crunch. How much spectrum do you 
currently have in the pipeline to auction today that could be used for 
broadband services? Let's assume that incentive auctions yield 100 MHz, 
where does the balance of the spectrum needed come from? Will you and 
NTIA be able to meet this 2015 deadline?
    Answer. I am not aware of any substantial amount of new spectrum 
that is in the pipeline for auction. Accordingly, I respectfully defer 
to Chairman Genachowski on this question as he and his team exclusively 
handle negotiations relations with NTIA.

    Question 3. What do you believe are the main impediments to freeing 
up more government spectrum and getting it into the commercial spectrum 
pipeline? 4. What do you believe the Commission's role is in 
identifying and clearing additional, government spectrum?
    Answer. The Executive Branch should act more aggressively to 
identify and relinquish spectrum held by the Federal Government. The 
underlying message from the recent report from our colleagues at 
National Telecommunications and Information Administration (NTIA) on 
the viability of accommodating commercial wireless broadband in the 
1755-1850 MHz band is disappointing. It appears that other Executive 
Branch agencies did not provide NTIA with sufficient data to support 
many of the assumptions and conclusions. The thrust of the report seems 
to indicate that the Executive Branch is going to resist relinquishing 
more spectrum. For starters, the report does not discuss how 
efficiently, or inefficiently, the Federal Government uses spectrum.
    We must also acknowledge that the Federal Government occupies about 
60 percent of the best spectrum. Federal users have no incentive to 
move off of this prime real estate but do have an incentive to keep the 
rest of us in the dark about how much it really would cost to move them 
and how long that task would really take. In theory, the Executive 
Branch should be especially incentivized to find a way to liberate more 
spectrum to auction for private sector uses in light of the fact that 
Congress updated the National Telecommunications and Information 
Administration Organization Act as part of the recent spectrum 
legislation (set forth in the Middle Class Tax Relief and Job Creation 
Act of 2012) to accommodate reimbursing Federal spectrum users willing 
to move.
                                 ______
                                 
    Response to Written Question Submitted by Hon. John Boozman to 
                        Hon. Robert M. McDowell
    Question. What short-term solutions for spectrum needs can be 
utilized while longer-term solutions, such as incentive auctions, are 
implemented?
    Answer. While we identify and analyze the complex issues that will 
arise as we implement the new spectrum legislation, I will continue to 
call for an increased focus on technologies and strategies to improve 
spectral efficiency. Greater emphasis and education in this area will 
improve the ability of mobile service providers, engineers, application 
and content developers as well as consumers to take better advantage of 
the immediate fixes already available in the marketplace. Spectral 
efficiency solutions include more robust deployment of enhanced antenna 
systems; improved development, testing and roll-out of creative 
technologies where appropriate, such as cognitive radios; and enhanced 
consideration of, and more targeted consumer education on, the use of 
femtocells. Each of these technological options augments capacity and 
coverage, which is especially important for data and multimedia 
transmissions. The Commission's recent workshop on receiver standards 
is a step in the right direction.
                                 ______
                                 
 Response to Written Questions Submitted by Hon. Patrick J. Toomey to 
                        Hon. Robert M. McDowell
    Question 1. Do you believe the FCC has conducted thorough cost-
benefit analyses before implementing new regulations?
    Answer. No.

    Question 2. In response to a question I posed at the hearing, you 
said the Commission has never classified broadband Internet access 
services as Title II telecommunications services. You went on to say 
that you are willing to provide to this committee supplementary 
information on this point. Please provide any and all additional 
information on this issue that you believe this committee will find 
informative.
    Answer. The Commission has never classified broadband Internet 
access services as ``telecommunications services'' under Title II of 
the Communications Act, as illustrated in the following summary of the 
history of the regulatory classification of broadband Internet access 
services.
    Within two years of the privatization of the Internet in 1994, 
Congress overwhelmingly enacted the landmark Telecommunications Act of 
1996 (1996 Act) and President Clinton signed it into law. Previously, 
the FCC had never regulated ``information services'' or ``Internet 
access services'' as common carriage under Title II. Rather, such 
services were classified as ``enhanced services'' under Title I. And, 
to the extent that regulated common carriers offered their own enhanced 
services, using their own transmission facilities, the FCC required the 
underlying, local transmission component to be offered on a common 
carrier basis.\1\ Furthermore, no provider of retail information 
services was ever required to tariff such service. With the 1996 Act, 
Congress had the opportunity to reverse the Commission and regulate 
information services, including Internet access services, as 
traditional common carriers, but chose not to do so. Instead, Congress 
codified the Commission's existing classification of ``enhanced 
services'' as ``information services'' under Title I.
---------------------------------------------------------------------------
    \1\ Some who are advocating that broadband Internet access service 
should be regulated under Title II cite to the Commission's 1998 GTE 
ADSL Order to support their assertion. See GTE Telephone Operating 
Cos., CC Docket No. 98-79, Memorandum Opinion and Order, 13 FCC Rcd. 
22,466 (1998) (GTE ADSL Order). The GTE ADSL Order, however, is not on 
point, because in that order the Commission determined that GTE-ADSL 
service was an interstate service for the purpose of resolving a tariff 
question.
---------------------------------------------------------------------------
    Subsequently, in 1998, Congress directed the Commission to report 
on its interpretation of various parts of the 1996 Act, including the 
definition of ``information service.'' \2\ In response, on April 10, 
1998, under the Clinton-era leadership of Chairman William Kennard, the 
FCC issued a Report to Congress finding that ``Internet access services 
are appropriately classed as information, rather than 
telecommunications, services.'' \3\ The Commission reasoned as follows:
---------------------------------------------------------------------------
    \2\ Departments of Commerce, Justice, and State, the Judiciary, and 
Related Agencies Appropriations Act, 1998, Pub. L. No. 105-119, 111 
Stat. 2440, 2521-2522, Sec. 623.
    \3\ Federal-State Board on Universal Service, CC Docket No. 96-45, 
Report to Congress, 13 FCC Rcd. 11501,  73 (1998) (Report to 
Congress).

        The provision of Internet access service . . . offers end users 
        information-service capabilities inextricably intertwined with 
        data transport. As such, we conclude that it is appropriately 
        classed as an ``information service.'' \4\
---------------------------------------------------------------------------
    \4\ Id. at  80 (emphasis added).

    The Commission further reasoned that treating Internet access 
services as telecommunications services would lead to ``negative policy 
consequences.'' \5\
---------------------------------------------------------------------------
    \5\ Id. at  82 (``Our findings in this regard are reinforced by 
the negative policy consequences of a conclusion that Internet access 
services should be classed as `telecommunications.' '').
---------------------------------------------------------------------------
    To be clear, the FCC consistently held that any provider of 
information services could do so pursuant to Title I.\6\ The Commission 
made no distinction in the way that retail providers of Internet access 
service offered that information service to the public. The only 
distinction of note was under the FCC's Computer Inquiry rules, which 
required common carriers that were also providing information services 
to offer the transmission component of the information service as a 
separate, tariffed telecommunications service. But again, this 
requirement had no effect on the classification of retail Internet 
access service as an information service.
---------------------------------------------------------------------------
    \6\ As Seth P. Waxman, former Solicitor General under President 
Clinton, wrote in an April 28, 2010 letter to the Commission, ``[t]he 
Commission has never classified any form of broadband Internet access 
as a Title II `telecommunications service' in whole or in part, and it 
has classified all forms of that retail service as integrated 
`information services' subject only to a light-touch regulatory 
approach under Title I. These statutory determinations are one reason 
why the Clinton Administration rejected proposals to impose `open 
access' obligations on cable companies when they began providing 
broadband Internet access in the late 1990s, even though they then held 
a commanding share of the market. The Internet has thrived under this 
approach.'' (Emphasis in the original.)
---------------------------------------------------------------------------
    Meanwhile, during the final days of the Clinton Administration in 
2000, the Commission initiated a Notice of Inquiry (NOI) to examine 
formalizing the regulatory classification of cable modem services as 
information services.\7\ As a result of the Cable Modem NOI, the 
Commission issued a declaratory ruling classifying cable modem service 
as an information service on March 14, 2002.\8\ In the Commission's 
Cable Modem Declaratory Ruling, it pointed out that ``[t]o date . . . 
the Commission has declined to determine a regulatory classification 
for, or to regulate, cable modem service on an industry-wide basis.'' 
\9\ Only one month earlier, on February 14, 2002, in its Notice of 
Proposed Rulemaking \10\ regarding the classification of broadband 
Internet access services provided over wireline facilities, the 
Commission underscored its view that information services integrated 
with telecommunications services cannot simultaneously be deemed to 
contain a telecommunications service, even though the combined offering 
has telecommunications components.
---------------------------------------------------------------------------
    \7\ Inquiry Concerning High-Speed Access to the Internet Over Cable 
and Other Facilities, GN Docket No. 00-185, Notice of Inquiry, 15 FCC 
Rcd 19287 (2000) (Cable Modem NOI).
    \8\ Inquiry Concerning High-Speed Access to the Internet Over Cable 
and Other Facilities; Internet Over Cable Declaratory Ruling; 
Appropriate Regulatory Treatment for Broadband Access to the Internet 
Over Cable Facilities, GN Docket No. 00-185, CS Docket No. 02-52, 
Declaratory Ruling and Notice of Proposed Rulemaking, 17 FCC Rcd 4798 
(2002) (Cable Modem Declaratory Ruling), aff'd, Nat'l. Cable & 
Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967 (2005) (Brand 
X).
    \9\ Id. at  2.
    \10\ Appropriate Framework for Broadband Access to the Internet 
over Wireline Facilities, Universal Service Obligations of Broadband 
Providers, CC Docket No. 02-33, Notice of Proposed Rulemaking, 17 FCC 
Rcd 3019 (2002) (Wireline Broadband NPRM).
---------------------------------------------------------------------------
    Subsequently, on June 27, 2005, the Supreme Court upheld the 
Commission's determination that cable modem services should be 
classified as information services.\11\ The Court, in upholding the 
Commission's Cable Modem Order, explained the Commission's historical 
regulatory treatment of ``enhanced'' or ``information'' services:
---------------------------------------------------------------------------
    \11\ Brand X, 545 U.S. 967.

        By contrast to basic service, the Commission decided not to 
        subject providers of enhanced service, even enhanced service 
        offered via transmission wires, to Title II common-carrier 
        regulation. The Commission explained that it was unwise to 
        subject enhanced service to common-carrier regulation given the 
        ``fast-moving, competitive market'' in which they were 
        offered.\12\
---------------------------------------------------------------------------
    \12\ Id. at 977 (emphasis added, internal citations to the 
Commission's Computer Inquiry II decision omitted).

    After the Supreme Court upheld the Commission's classification of 
cable modem service as an information service in its Brand X decision, 
the Commission without dissent issued a series of orders classifying 
all broadband services as information services: wireline (2005)\13\, 
powerline (2006)\14\ and wireless (2007).\15\ Consistent with the 
Court's holding and reasoning in its Brand X decision, the Commission 
made these classifications to catch up to market developments, to treat 
similar services alike and to provide certainty to those entities 
provisioning broadband services, or contemplating doing so. Prior to 
these rulings, however, such services were never classified as 
telecommunications services under Title II.
---------------------------------------------------------------------------
    \13\ Appropriate Framework for Broadband Access to the Internet 
over Wireline Facilities; Universal Service Obligations of Broadband 
Providers; Review of Regulatory Requirements for Incumbent LEC 
Broadband Telecommunications Services; Computer III Further Remand 
Proceedings: Bell Operating Company Provision of Enhanced Services; 
1998 Biennial Regulatory Review--Review of Computer III and ONA 
Safeguards and Requirements; Conditional Petition of the Verizon 
Telephone Companies for Forbearance Under 47 U.S.C. Sec. 160(c)with 
Regard to Broadband Services Provided Via Fiber to the Premises; 
Petition of the Verizon Telephone Companies for Declaratory Ruling or, 
Alternatively, for Interim Waiver with Regard to Broadband Services 
Provided Via Fiber to the Premises; Consumer Protection in the 
Broadband Era, CC Docket Nos. 02-33, 95-20, 98-10, 01-337, WC Docket 
Nos. 04-242, 05-271, Report and Order and Notice of Proposed 
Rulemaking, 20 FCC Rcd 14853 (2005) (Wireline Broadband Order), aff'd, 
Time Warner Telecom, Inc. v. FCC, 507 F.3d 205 (3d Cir. 2007).
    \14\ United Power Line Council's Petition for Declaratory Ruling 
Regarding the Classification of Broadband over Power Line Internet 
Access Service as an Information Service, WC Docket No. 06-10, 
Memorandum Opinion and Order, 21 FCC Rcd 13281 (2006).
    \15\ Appropriate Regulatory Treatment for Broadband Access to the 
Internet Over Wireless Networks, WT Docket No. 07-53, Declaratory 
Ruling, 22 FCC Rcd 5901 (2007).
---------------------------------------------------------------------------
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Marco Rubio to 
                        Hon. Robert M. McDowell
Internet Governance
    Question 1. Besides the upcoming World Conference on Information 
Technology, are there other conferences, summits, etc., occurring in 
which the United States needs to be concerned about other countries 
advocating for a more state controlled Internet governance model?
    Answer. Even if this effort is unsuccessful in December, we must 
continue to be vigilant. Internet governance will no doubt be on the 
agenda for international conferences and discussions throughout 2013 
and beyond. Given the high profile, not to mention the dedicated 
efforts by some countries, I cannot imagine that this matter will 
disappear. Similarly, I urge skepticism for the ``minor tweak'' or 
``light touch.'' As we all know, regulation only seems to grow. We must 
remain vigilant for years to come.
Spectrum
    Question 2. Cisco's U.S. mobile data forecast projects that mobile 
data traffic will increase 16 times from 2011 to 2016--a compound 
annual growth rate of 74 percent. What happens if we do not have enough 
spectrum to keep pace with that demand? How would that impact 
consumers?
    Answer. As these statistics illustrate, more powerful 4G networks, 
sophisticated devices and complex mobile applications are taxing 
spectrum availability. Recognizing the need for spectrum to flow toward 
its highest and best use, in February, Congress passed the Middle Class 
Tax Relief Act of 2012, which included language for incentive auctions 
of broadcast spectrum. Some estimate these auctions could place up to 
an additional 80 megahertz of prime television broadcast spectrum into 
American consumers' hands.
    My ideas for satisfying consumer demand for faster and more robust 
mobile communication are: First, the FCC should implement the new 
spectrum law with humility, simplicity and regulatory restraint; Next, 
the Executive Branch should be far more aggressive in identifying and 
relinquishing for private sector use spectrum held by the Federal 
Government; Third, the FCC should do more to encourage a free-flowing 
secondary spectrum market by completing transaction reviews more 
quickly and with a minimal amount of conditions; and finally, the FCC 
should provide local public safety entities the flexibility and 
certainty necessary to leverage economies of scale by continuing to 
operate, build and deploy interoperable LTE networks pursuant to waiver 
on a case-by-case basis.

    Question 3. Based on previous spectrum auctions, what lessons do 
you hope the Commission has learned in order to avoid missteps in the 
upcoming auctions?
    Answer. As the FCC moves forward to implement the new incentive 
auction law, I will work with my colleagues to ensure that our auction 
rules are minimal and ``future proof,'' allowing for flexible uses in 
the years to come as technology and markets change. I am hopeful that 
new rules should include band plans that offer opportunities for small, 
medium and large companies to bid for and secure licenses without 
having to exclude any player from the auctions. Recognizing that 
overly-complex rules governing the C and D Blocks of the 700 MHz 
auction held in 2007-2008 produced several harmful unintended 
consequences, we should learn from the past and keep new auction rules 
minimal. As an overarching matter, I hope our new rules will stick with 
the Commission's more recent ``flexible use'' policy. Old style 
``command and control'' (prescriptive) rules hamper creative 
entrepreneurs who are in the best position to understand and satisfy 
consumer demands. Otherwise, the main goals of the new law, putting 
more bandwidth into the hands of consumers as quickly as possible and 
maximizing revenue at auction, may not be attained. In order to create 
greater certainty and thus a higher participation level, I hope that we 
will implement the law with humility, simplicity and restraint.
Wireless Policies
    Question 4. In your written testimony, you state that ``America has 
always led the world when it comes to wireless innovation and if we 
choose the correct policies we will further strengthen America's global 
leadership.'' What are examples of ``correct policies'' that we should 
choose? What are examples of wrong policies that we should not choose?
    Answer. As noted earlier, in order to create greater certainty and 
thus a higher participation level, I hope that we will implement the 
law with humility, simplicity and restraint. Congress clearly expressed 
its intent that no entities should be excluded from participating in 
these auctions. Keeping in mind that overly-complex rules governing the 
C and D Blocks of the 700 MHz auction produced several harmful 
unintended consequences, as we go forward, we should learn from the 
past and keep new auction rules minimal. Otherwise, the main goals of 
the new law, putting more bandwidth into the hands of consumers as 
quickly as possible and maximizing revenue at auction, may not be 
attained.
Regulatory Reform
    Question 5. At the Committee's recent hearing on online video, 
there was consensus--among the witnesses and some members of the 
Committee--that Congress needs to rewrite the Telecommunications Act. 
And as you are probably aware, some industry stakeholders advocate for 
the need to reform the Act and break down the regulatory silos. Do you 
think that Congress should rewrite the Telecommunications Act to better 
reflect the current telecommunications environment?
    Answer. Yes.

    Question 5a. And if so, what parts of the Act should Congress 
update or rewrite?
    Answer. Today's consumers seek to use their favorite applications 
and content whenever and wherever they choose. Such material may be 
delivered over coaxial cable, copper wires, fiber or radio waves, and 
the distinction is of little consequence to most consumers as long as 
the supply of products and services satisfies consumers' demands. 
Legacy statutory constructs, however, have created market distorting 
legal stovepipes based on the regulatory history of particular delivery 
platforms. As a result, the current statutory requirements have forced 
regulators and industry to make decisions based on whether a business 
model fits into Titles I, II, III, VI, or none. As Congress 
contemplates FCC reform, it may want to consider an approach that is 
more focused on preventing concentrations and abuses of market power 
that result in consumer harm. Additionally, I agree with the notion 
that Congress could consider building on the deregulatory bent of 
Sections 10 and 11 from the Telecommunications Act of 1996 by adding an 
evidentiary presumption during periodic regulatory reviews that would 
enhance the likelihood of the Commission reaching a deregulatory 
decision.

    Question 6. The President recently commended the Commission for 
supposedly cutting 190 regulations and cited the FCC's efforts as a 
prime example of regulatory reform under his Administration. In your 
view, does the Commission take seriously the need for regulatory 
reform? How rigorous and consistent is the use of cost-benefit 
analysis, and how enthusiastically does the Commission approach its 
obligation to engage in a biennial review--and trimming--of its 
regulations?
    Answer. Unfortunately, the Commission's record on using a cost-
benefit analysis has neither been rigorous nor consistent when 
reviewing its current regulations. If the FCC had engaged in a more 
rigorous and consistent analysis, its previous biennial reviews likely 
would have resulted in the repeal of many more unnecessary regulations 
over the years. Additionally, the Commission should seriously employ a 
cost-benefit analysis when contemplating adopting new rules, as well, 
because new regulations almost always cause collateral and 
unpredictable economic effects, and regulatory burdens are ultimately 
passed on to consumers.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                        Hon. Robert M. McDowell
    Thank you for your testimony before the Committee. I appreciate the 
time you spent and your thoughtful answers to the following questions.
    As you all know, our economy benefits greatly from the 
communications and technology sector. Competition and innovation have 
created new services and devices as well as high-quality jobs that have 
changed the lives of Americans. This sector is incredibly important to 
sustainable growth of our economy. That is why Congress must push the 
Federal Communications Commission to be the most open and transparent 
agency in the Federal Government. The industries you regulate are too 
important to our nation.
    Under Chairman Genachowski, I have seen notable steps in the right 
direction, and he has made process a ``top priority.'' That being said, 
I am concerned that the FCC is not always as open and transparent as it 
should be. The problem as I see it today is that the FCC can pick and 
choose the rules it wants to follow when it wants to follow them. This 
method is convenient for the FCC, but it is not good government, and we 
owe more to Americans with business before the FCC.
    I introduced legislation that pushes the FCC toward more 
transparency and openness. The intent of my legislation is not to 
hamstring the agency. It is to push them to be exactly what Americans 
expect from their government, open and transparent regulators of the 
laws passed by Congress.
    A more predictable and consistent FCC will create jobs in Nevada, 
which has the unfortunate distinction of leading our Nation in 
unemployment for over two years. Every government agency should be 
committed to policies that promote job creation, investment and 
innovation. The technology sector has helped growth in our country for 
the last twenty years and will continue to if big government does not 
overburden it.
    I introduced two measures, the Telecommunications Jobs Act (S. 
1817) and the Federal Communications Commission Consolidated Reporting 
Act (S. 1780). These bills push the FCC to be the most open and 
transparent agency in the Federal Government and provide a streamlined 
method of reporting to Congress.
    The following questions are in regards to those bills, and I would 
ask you to please respond to each question.

    Question 1. One of the most important reforms I introduced would 
force the Commission to demonstrate beyond any doubt the need for 
regulation before intervening in the marketplace. I strongly believe 
that a cost-benefit analysis should be conducted on any regulation that 
will have a significant market impact, and I believe that before the 
FCC begins a rule proposal, they survey industry within three years of 
proposing a rule to determine whether that regulation is even 
necessary. A cost-benefit analysis mandating the FCC to identify actual 
consumer harm and conduct an economic, market-benefit analysis is 
consistent with President Obama's Executive Order 13563 on Improving 
Regulation and Regulatory Review. Would you support legislation that 
implements a cost benefit analysis consistent with the President's 
Executive Order? If not, why?
    Answer. Yes.

    Question 2. Do you support legislation mandating the FCC to survey 
the marketplace within three years before initiating a rulemaking?
    Answer. Yes.

    Question 3. Under the Chairman, 85 percent of the Notices of 
Proposed Rulemakings have contained text of proposed rules. However, in 
the years before Chairman Genachowski, only 38 percent contained the 
specific text. Also, at times, these NPRMs have been broad, leading to 
uncertainty because industries are not clear as to what the FCC is 
actually looking at. Do you believe that the FCC should include the 
actual language of any and all proposed new rules in every NPRM?
    Answer. Yes. During his tenure at the FCC, Chairman Genachowski has 
made progress on ensuring that many notices of proposed rulemaking 
contain actual proposed rules. I support a continuation of this 
practice.

    Question 4. These NPRMs can stay open for quite a while costing 
industry time and resources without any knowledge of whether action 
will take place or not. I have heard from many of my constituents with 
business before the Commission that they simply cannot get an answer 
from the Commission on what seems to be routine petitions, 
applications, or proceedings.
    Nevada has asked for a waiver from the FCC in regards to its 700 
megahertz public safety early deployment rules. I understand that a 
decision on this could have been delayed until Congress passed a public 
safety spectrum allocation bill. Now, with provisions intended to 
facilitate a public safety network in place, the FCC still seems to be 
stalling on this.
    Other companies have purchased spectrum in the lower 700 MHz and 
are awaiting a decision by the FCC on whether rules regarding 
interoperability, clearing channel 51 or waivers to build out 
requirements will be granted.
    The issue of ``special access'' has been open for 10 years before 
the Commission without any resolution. This is an issue worth billions 
of dollars to the entire industry.
    Furthermore, last July, I and a number of my colleagues on this 
Committee wrote to you and we did not receive a response for 8 weeks 
and only after multiple follow up letters and calls. When Senators on 
the Committee of jurisdiction have trouble receiving a response from 
the FCC, there clearly are problems with answering questions.
    All of this leads to uncertainty. There doesn't appear to be much 
confidence among many companies that the FCC can act expeditiously on 
much of anything of significance to the industry. Proceedings can 
languish for 3, 5, or 10 years. Companies, generally, have a hard time 
investing, or increasing their investment, if they are uncertain what 
the regulatory environment is going to look like for their business.
    Chairman Genachowski has worked on this issue and established 
internal 180-day shot clocks; however, this has not solved all the 
problems of open ended NPRMs.
    Do you believe that Congressional legislation implementing shot 
clocks on FCC action is appropriate? If not, why? Does the Commission 
expect to act on any of the examples listed above?
    Answer. I believe that Congressional legislation implementing shot 
clocks could be helpful in many circumstances provided the ability to 
allow for reasonable exceptions is granted. Regarding the timing of 
pending FCC proceedings, I respectfully defer to Chairman Genachowski 
because the Chairman controls the Commission's agenda.

    Question 5. Since 2008, the FCC has conducted a number of merger 
reviews. How many times has the FCC failed to conclude the review 
within the 180-day shot clock period? How many times was the deadline 
missed? Was there any reason they were missed?
    Answer. The FCC failed to conclude its review of major transactions 
within the 180-day shot clock period at least twelve times since 
January 1, 2009.\16\ I respectfully defer to Chairman Genachowski as to 
why certain deadlines were missed because the timing of merger reviews 
is within the control of the Chairman.
---------------------------------------------------------------------------
    \16\ Additionally, according to the Commission's timeline, the 
applications for the proposed AT&T/T-Mobile transaction were dismissed 
on day 178. It was dismissed after the parties requested that the 
applications be withdrawn. The clock, however, was tolled for 38 days. 
Thus, the transaction was acted upon more than 180 days after the 
applications appeared on public notice.

    Question 6. Going back to the President's Executive Order 13563, 
the Chairman has fully supported the ideals of the order, which in part 
states ``For proposed rules, such access shall include, to the extent 
feasible and permitted by law, an opportunity for public comment on all 
pertinent parts of the rulemaking docket, including relevant scientific 
and technical findings.''
    In the days before the record closed on the Commission's reform of 
the high cost of the Universal Service Fund, the FCC added 114 new 
pages of its own to use in the final decision. This practice denied 
public input on information that was used to render a decision which 
seemed to run counter to the President's Executive Order. Without 
adequate public and stakeholder input, the chance that a regulation 
will have unintended consequences increases. One example brought to my 
attention is that now smaller rural markets like those in my state will 
miss out on support because of the presence of fixed wireless services. 
They believe more dialogue and transparency could have avoided this 
outcome.
    Do you believe that relying on reports in rulemaking and 
adjudications that are without a robust notice and comment process is 
appropriate?
    Answer. No.

    Question 6a. Or substantially altering a report after the period 
with which industry input or comments are accepted?
    Answer. No.

    Question 7. Do you agree that it is not the best practices of a 
government agency to dump data into a report at the 11th hour without 
industry input?
    Answer. Yes.

    Question 8. Do you agree that this method, while perhaps helpful to 
the Commission, is not open and transparent to the level benefitting an 
agency that issues regulations that have a significant economic impact?
    Answer. Yes.

    Question 9. The FCC rightfully should review transfers of lines 
under section 214 of the Communications Act and the transfer of 
licenses under section 309 and 310 of the Communications Act. However, 
this review should not provide the FCC to extract a list of concessions 
from the applicant in exchange for approval. For example, in the 2011 
Comcast/NBC Universal transaction order, the Commission accepted a 
``voluntary'' commitment from Comcast to comply with net neutrality 
rules even if a court overturns those rules.
    This agreement was made through a transaction review and was done 
without any public scrutiny--as proposed conditions are often unknown 
until the approval order is announced.
    Do you believe that this type of rulemaking provides a scenario in 
which one set of rules exist for those who have merged and another 
exists for those who have not?
    Answer. Yes. The Commission has imposed conditions and accepted 
``voluntary'' commitments in approving transactions that are aimed at 
industry-wide concerns resulting in disparate requirements among 
private sector participants.

    Question 10. Have there been instances you have experienced when 
merger conditions have been imposed that was not directly related to 
the transfer questions?
    Answer. Yes.

    Question 11. Do you believe it is appropriate to require the FCC to 
end this practice by requiring the FCC to narrowly tailor any 
conditions it imposes or commitments it accepts to only address harm 
caused by the transfer of licenses?
    Answer. I believe that, in reviewing a transaction to ensure it is 
in the public interest, narrowly-tailored conditions and commitments 
should only be imposed or accepted to ameliorate transaction-specific 
harms, so I would support such a requirement if Congress should decide 
legislation is appropriate.

    Question 12. Last November, I introduced S. 1780, the Federal 
Communications Commission Consolidated Reporting Act. In section 3 of 
that bill, I identified 24 reports for repeal and elimination. 16 of 
those reports were ones required of the FCC. Many of these required 
reports appeared to me to be contemplated during eras long since 
passed; were ones with an exceedingly narrow focus; or ones that bore 
little relevance to today's communications marketplace. Have you had 
the opportunity to review the FCC reports that were identified in S. 
1780?
    Answer. Yes.

    Question 12a. Would you take issue with any of the recommended 
deletions?
    Answer. No.

    Question 13. Notwithstanding my desire to leave the FCC of its 
reporting burden, S. 1780 calls for the FCC to provide a Report to 
Congress with respect to the state of the communications marketplace, 
covering such matters as competition in broadband deployment and 
barriers to the competitive marketplace. The FCC is currently required 
to do many of these narrowly focused reports, but it seems to me that 
what we lack is anything like a comprehensive look at the totality of 
the marketplace at regular intervals. My thought was that this should 
be done every two years. What is your opinion of such a proposal? I 
believe that both the FCC and Congress would benefit from such a 
Report.
    Answer. I agree that such a report would be beneficial to the FCC, 
Congress and the public.
                                 ______
                                 
Response to Written Questions Submitted by Hon. John D. Rockefeller IV 
                       to Hon. Mignon L. Clyburn
Public Safety Waivers
    This Committee worked hard to pass legislation that will make a 
nationwide, interoperable public safety network a reality. The law is 
clear that the network must be based on a single nationwide 
architecture. I recognize that, before the law was passed the FCC 
granted several waivers to allow certain jurisdictions, on a 
conditional basis, to begin building certain facilities. I also 
understand that a number of other jurisdictions filed waivers that 
remain pending.
    There have been press reports that some at the Commission believe 
that the law does not speak directly to whether the FCC should grant 
new, additional authority to jurisdictions to begin building their own 
networks before the new FirstNet board is put into place. Such a 
position seems to undermine the clear intent of this Committee and of 
Congress toward creating a nationwide network. Such a position also 
runs the risk of replicating the mistakes of the past by creating 
separate networks that may never be truly interoperable.
    I recognize that allowing one or two of these jurisdictions to move 
forward with their networks, subject to appropriate conditions and 
vendor indemnification, may provide some benefits for public safety. 
But I have heard from experts that allowing a number of jurisdictions 
to move forward could make it much more expensive and difficult in the 
long-term to deploy a truly interoperable network nationwide. That was 
not Congress's intent.

    Question 1. Will you commit that when you review whether to allow 
authority for jurisdictions to begin building their networks before 
FirstNet is set up that you will act in a manner that is consistent 
with Congressional intent?
    Answer. Yes. I will faithfully adhere to the specific language and 
spirit of the Middle Class Tax Relief and Job Creation Act of 2012.

    Question 2. In your opinion, do you agree that the granting of new 
authority would complicate FirstNet's efforts to achieve nationwide 
interoperability for our first responders?
    Answer. I believe that any early deployment plans should be 
carefully evaluated on their own merits to ensure that such any 
proposed deployment provides concrete, near-term public safety 
benefits. With appropriate safeguards, I believe this is possible to do 
without undermining the important tasks that FirstNet has been given by 
Congress, including preserving and promoting interoperability.

    Question 3. Also, if the Commission were to grant some 
jurisdictions new authority, how would you make sure that they would 
not run the risk of increasing the overall costs of the network?
    Answer. Appropriate safeguards, such as requiring adherence to the 
recommendations of the Technical Advisory Board for First Responder 
Interoperability, can help minimize risk. It also makes sense to avoid 
stranding assets that have already been purchased by local 
jurisdictions to the extent possible.
Political File
    Question 4. For more than five decades, broadcasters have kept 
paper copies of their public files. The FCC recently required 
television broadcasters to move into this century and finally make 
their public and political files available online. I wholeheartedly 
support this requirement. We're moving to a digital world, and 
government transparency cannot be stuck in the dark ages. However, I 
question the wisdom of exempting from the rule broadcasters who are not 
in the top 50 markets. I understand that you are worried about the 
bottom line for broadcasters in rural areas--but I am concerned about 
the citizens they serve. It is often more difficult for citizens in 
rural areas to make the trip to their nearest broadcaster's station to 
review paper files. Should you not make sure that citizens in rural 
areas can access the same information as those in the largest markets?
    Answer. As I understand the Order, it is not a permanent exemption 
in that all TV stations will have to start filing online in July 2014.
    Broadcasters urged us to give them time to gain experience working 
with the online public file system before requiring that they maintain 
their political file online. We opted to give that time to the smaller 
broadcasters that could most be in need.
    As our Order points out, the record found that stations affiliated 
with the top four broadcast networks often provide the highest-rated 
programming, and therefore the most-watched advertising, including a 
large proportion of political advertising. The 11 percent of stations 
that have to initially comply reach 65 percent of Americans, and 
account for roughly 60 percent of the total television political 
advertising dollars spent in each major election cycle.
    Our rulemaking further notes that delayed implementation for 
stations with a smaller market reach will ensure that the Commission is 
able to target assistance to these stations, if necessary. We go on to 
point out that FCC staff will gain experience with the process of 
assisting the smaller first wave of broadcasters transitioning to the 
online political file. This will enable staff to more efficiently 
assist the larger number of stations that will transition later, that 
may need enhanced support because of their more limited IT resources.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Inouye to 
                         Hon. Mignon L. Clyburn
Media Ownership by Women and People of Color
    Question 1. Are you satisfied with the level of media ownership by 
women and people of color today? If not, I would appreciate your 
suggestions on how media ownership by women and people of color can be 
improved. What role can the FCC play to encourage greater media 
ownership opportunities for women and people of color?
    Answer. No, I am not satisfied, and I feel that the FCC needs to 
gather the most current data on ownership demographics in order to 
appropriately update our media ownership rules. Assessing the critical 
information needs of American communities is essential to our media 
ownership landscape, and currently, the Commission lacks comprehensive 
data on how citizens are accessing and digesting media content and from 
what sources.
    Once we gather the data we need to assess market entry barriers and 
other obstacles to female and minority ownership, we can move forward 
with more complete media ownership analysis and subsequent changes to 
our rules.
Spectrum Swaps
    Question 2. Some industry representatives as well as a few Members 
of Congress have suggested that spectrum swaps are a direct and faster 
way to increase competition in the wireless broadband market. Do you 
agree with this suggestion? What efforts are being taken or can be 
taken by the FCC to explore spectrum swaps as a way to increase 
competition in the wireless broadband market?
    Answer. If by spectrum swaps, Senator, you mean leases from 
spectrum licensees to other parties following the FCC's rules and 
policies on secondary market transactions, then yes, I wholeheartedly 
agree. In my opinion, the Commission should encourage mobile wireless 
carriers to be more efficient when using the spectrum they currently 
hold. Under Chairman Genachowski's leadership, the Commission has 
initiated proceedings, held workshops, and taken other steps to 
encourage commercial mobile wireless carriers to be more efficient. For 
example, in late 2010, the Commission adopted a Notice of Inquiry to 
seek comment on issues related to promoting greater use of dynamic 
spectrum access technologies and secondary market transactions.
    Also, small cells can significantly increase the density of network 
deployment and the efficiency of spectrum use. The Commission is 
working with NTIA on enabling small cells in the 3.5-GHz band, which 
could free up 100 MHz of spectrum for wireless broadband.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. John F. Kerry to 
                         Hon. Mignon L. Clyburn
Updating the Law
    Question 1. The FCC has a wireless bureau, a wireline bureau, and a 
media bureau. Given that all three operate in a broadband world, should 
we have a broadband bureau at the agency that either incorporates these 
three separate bureaus or helps us understand the state of broadband 
competition and define and eliminate duplicative bureau functions?
    Answer. Updating the agency's organization to keep pace with 
changes in the communications industry benefits the public interest in 
a number of ways. However, the FCC Chairman should maintain the 
statutory discretion to organize the Commission in the manner that best 
allows her or him to resolve the numerous rulemakings, petitions, and 
proceedings that come before the agency.
    During my time at the agency, the Commission's Bureaus have worked 
together on the drafting of the National Broadband Plan and its 
implementation, and their individual perspectives, such as licensing 
and technical understanding, have played an important role in the 
development of our overall policy goals. It's not clear to me that a 
separate Bureau is necessary at this time given the collaborative 
nature of the Bureaus' work to date.

    Question 2. The 1992 Act is 20 years old this year, and the 1996 
Act is entering its late teens. Should we update these laws and if so, 
using what set of principles?
    Answer. The recent hearings on the 1992 Act have been extremely 
worthwhile. Some industry stakeholders have called for an update, and I 
think it is important for us to begin the groundwork for broad, 
possible adjustments of our current telecommunications laws.
    That said, I support the preservation of the Commission's authority 
to ensure that the communications marketplace is robustly competitive 
and properly serves consumers. Our public interest mandate is an 
important facet of that objective.
Spectrum
    Cisco's U.S. mobile data forecast projects that the volume of data 
traffic on mobile service provider networks will increase 16 times from 
2011 to 2016. With that kind of demand for space in our airwaves for 
wireless broadband, the Commission should be making every effort to 
make as much existing spectrum as usable as possible quickly.

    Question 3. What are the prospects for Federal and private users to 
share the spectrum that agencies currently hold without disrupting 
vital public services and what can we do to speed up the process?
    Answer. The prospects for Federal agencies and commercial licensees 
to share spectrum are strong. On July 20, 2012, the President's Council 
of Advisors for Science and Technology (PCAST) released a report that 
recommended this type of sharing as the most practical, cost effective, 
and quickest way to ensure that the commercial mobile wireless industry 
can keep up with the demand that American consumers have for mobile 
broadband services.
    To move quickly to implement the recommendations in the PCAST 
Report, I would suggest that the Senate and the House each appoint a 
task force to study the Report and meet regularly with the appropriate 
staff members of the NTIA and the FCC to determine if new Federal laws 
are necessary and appropriate to efficiently implement the sharing 
recommendations.

    Question 4. As space on the airwaves becomes increasingly 
congested, how will the FCC better arbitrate interference disputes 
between neighboring services in the future?
    Answer. Section 6408 of the Middle Class Tax Relief and Job 
Creation Act of 2012, directs the Comptroller General of the United 
States to conduct a study to consider efforts to ensure that each 
transmission system is designed and operated, so that reasonable use of 
adjacent spectrum does not excessively impair the functioning of such 
system. That statute also requires the Comptroller General to consider 
receiver performance as it relates to spectral efficiency. The 
Commission should consider whether it has authority to take action to 
improve receiver performance. If the Commission has that authority, it 
should initiate a proceeding to consider rules to improve receiver 
standards.

    Question 5. Conservative studies and estimates have suggested that 
use of spectrum on an unlicensed basis contributes at least $50 billion 
annually to the U.S. economy, thanks to the benefits we all gain from 
widespread Wi-Fi availability, or uses like automatic highway toll 
payment, or business uses for smart inventory. Can you talk about the 
priority that the Commission places (or that you will place) on 
ensuring that there is an appropriate mix of spectrum coming to market 
both for auctions and for such unlicensed use?
    Answer. The Commission must make it a priority to ensure that there 
is an appropriate mix of spectrum for auctions and for unlicensed use. 
I appreciate the bi-partisan effort that Senators and Representatives 
led to ensure that the Middle Class Tax Relief and Job Creation Act of 
2012 contained statutory provisions to protect unlicensed spectrum. It 
is estimated that unlicensed spectrum generates between $16-37 billion 
each year for the U.S. economy. In November of last year, the Consumer 
Federation of America issued a report, which found that Wi-Fi offload 
resulted in wireless carriers not having to construct 130,000 cell 
sites. This resulted in annual cost savings of more than $25 billion.
    Last month, New America Foundation, GiG.U, the United Negro College 
Fund, Google, Microsoft, and the other founding partners announced a 
project called AIR U. This initiative recognizes that universities 
located in certain rural areas are struggling to find access to 
affordable broadband networks. This challenge often makes it more 
difficult for these institutions to attract the best faculty and 
students. By employing unlicensed TV White Space services, AIR U can 
offer a low-cost means to provide these universities with increased 
coverage and capacity. In addition, the initiative will stimulate and 
aggregate demand in the adjacent community. All of this will encourage 
greater investment in, and development of, new services. This further 
underscores the public interest merits of ensuring that there is 
sufficient unlicensed spectrum available.
Privacy
    The FCC recently concluded an investigation into the Google Wi-Fi 
data collection incident where the agency found that Google's actions 
did not violate section 705 of the Communications Act due to the fact 
that the incident occurred on unencrypted Wi-Fi, rather than a secured 
network.

    Question 6. In light of the result of this investigation, do you 
believe that Congress should update section 705 to account for this gap 
in the FCC's wiretap provisions?
    Answer. Yes. The Google Street View investigation highlighted that 
section 705, written long before Wi-Fi existed, is outdated. The 
Commission is happy to serve as a technical resource in considering 
possible revisions. We would also recommend consultation with the 
Department of Justice, given the overlap between section 705 and the 
Wiretap Act.
Interoperability
    Interoperability of consumer devices within a spectrum band helps 
promote competition in wireless services. Since the early 1980s, the 
Commission has adopted rules or sent strong messages that it expects 
wireless service licensees to offer consumers equipment that can 
operate over the entire range of an allocated spectrum band. But 
interoperability does not yet exist in perhaps the most valuable 
spectrum bands the FCC has ever allocated--the lower 700 MHz band. In 
March, the FCC initiated a proceeding to promote interoperability in 
this band. I noticed that the NPRM would prefer that the industry 
propose a voluntary solution, as would I, but you also indicated an 
interest in moving to rules if that voluntary approach is unsuccessful.

    Question 7. Do you believe interoperability of devices within this 
band matters, what is the FCC staff doing to monitor the efforts of the 
industry at arriving at a voluntary solution for the lower 700 MHz 
band, and how much more time do you believe the industry should have 
before you would push to conclude this proceeding and adopt rules if it 
appears that an industry solution is not possible?
    Answer. Yes; interoperability in the lower 700 MHz band matters a 
great deal to mobile wireless consumers.

   Throughout the history of the mobile wireless industry, 
        whenever it appeared that a lack of interoperability might 
        arise with regard to a spectrum band the Commission was about 
        to allocate for mobile wireless service, the Commission has 
        either issued an order mandating interoperability, as it did in 
        the 1981 Cellular Report and Order, or strongly instructed the 
        industry that it expects consumer equipment to operate over the 
        entire range of that spectrum band. The lower 700 MHz band, as 
        you mentioned, is the only spectrum band the Commission has 
        allocated that lacks interoperability.

   The proceeding to develop auction rules for the 700 MHz 
        band, which the FCC initiated in 2006, was closely followed by 
        the industry and consumer advocates because it was widely 
        anticipated that the excellent engineering characteristics of 
        the band would lead to unforeseen innovation in broadband 
        applications and devices. The lack of interoperability in the 
        700 MHz band is preventing some American consumers, such as 
        rural customers who subscribe to service from companies who won 
        licenses in the A Block of the lower 700 MHz band, from 
        enjoying the access to this innovation that other Americans can 
        enjoy. It is also preventing carriers from offering competitive 
        options for comparable mobile broadband services which, in 
        turn, leads to higher quality services and lower prices.

    When Congress enacted the voluntary incentive auction and other 
        spectrum provisions of the Middle Class Tax Relief and Job 
        Creation Act of 2012, it received well deserved praise, because 
        our Nation's demand for mobile broadband services has created a 
        spectrum crunch. If finding new ways to repurpose spectrum for 
        commercial mobile broadband services is a national policy 
        priority, then removing a barrier to productive use of the 700 
        MHz band, which is perhaps the most valuable spectrum the 
        Commission has ever repurposed, should be just as important for 
        this Commission.

    Chairman Genachowski is the appropriate person to answer how the 
FCC staff is monitoring the industry's progress towards a voluntary 
solution.
    I do not think the Commission should give the industry more than a 
few more months to find a voluntary solution before circulating an 
Order that mandates interoperability in the lower 700 MHz band.

   The industry has already had more than two years to arrive 
        at a voluntary solution and, to date, remain very far apart on 
        the issue. Holders of B Block and C Block licenses in the lower 
        700 MHz band allege that operations from holders of Channel 51 
        broadcast licenses and holders of E Block licenses in the 700 
        MHz band will cause harmful interference to any networks that 
        will use A Block licenses in the lower 700 MHz band. Therefore, 
        the holders of B and C Block licenses do not want to be in a 
        unified band class with A Block licenses. The holders of A 
        Block licenses disagree and believe that appropriately 
        conducted tests and analyses persuasively rebut the arguments 
        from the B and C Block licensees. In my opinion, without a 
        mandate that the parties must achieve interoperability by a 
        certain date, there will not be a voluntary solution because it 
        is not in the interests of the holders of B and C Block 
        licenses, who compete with many of the A Block licensees, to 
        reach such an agreement.

   The March 2012 Notice of Proposed Rulemaking asks technical 
        questions to examine the merits of these competing arguments. 
        The period for filing comments and reply comments ended earlier 
        this month. The A Block licensees have conducted tests of 
        handsets with A Block license networks and tests of handsets 
        with B and C Block license networks, near Channel 51 and E 
        Block operations and the test results showed no harmful 
        interference to the A Block or B and C Block networks. The 
        interoperability advocates have also filed technical analyses 
        and empirical to show that, A Block license operations would 
        not cause harmful interference to B Block and C Block licensed 
        operations if all three were unified in a single band class. 
        The opponents of interoperability have also conducted tests 
        that, they contend, support their position. The FCC staff needs 
        to review all the test results and decide which are the most 
        persuasive. The interoperability advocates believe that this 
        can be accomplished in a few months.
Public Broadcasting
    As a long-time supporter of public broadcasting, I believe that it 
plays a special and necessary role in our media landscape. I was 
pleased to see that on November 4, 2011 the FCC Consumer Advisory 
Committee adopted a recommendation that the FCC work with the 
Administration and Congress to support continued Federal funding of the 
Corporation for Public Broadcasting and local public broadcast 
stations, including those providing service to rural, tribal, native, 
and disability communities.

    Question 8. Do you support this recommendation from the FCC 
Consumer Advisory Committee and can you share your views on the unique 
and necessary role that public broadcasting plays in our media 
landscape?
    Answer. I often include public broadcasting stations in my list of 
the top networks because of my great affinity for the content that they 
offer. Their programming for children and adults alike inspires, 
educates, and enriches viewers all across America.
    I agree with the Consumer Advisory Committee's recommendation that 
the loss or significant reduction of Federal funds to CPB would 
negatively impact all currently funded stations, and may force some to 
go off the air. Acutely impacted would be those in rural, tribal, 
native, and disability communities.
The U.N. and International Negotiations on Internet Governance
    Question 9. As former Congressman Boucher recently explained, ``The 
best way to understand the current system of global Internet governance 
is as a hub-and-spoke relationship. At the hub, a loose confederation 
of standards-setting bodies ensures the Internet's continued stability 
and functionality. Little, if any, regulation occurs at the hub. This 
arrangement leaves tremendous leeway for the sovereign governments--the 
``spokes''--to regulate the Internet within their borders.''
    And that system has worked relatively well, with some unfortunate 
outliers trying to control their population's access to information. 
Yet, there is pressure abroad for a new U.N. agency to assert 
international governmental control over the Internet. That pressure is 
coming from countries who wish to impose new tolls on service and 
countries that fear the power of open discourse on the Internet.
    In a recent blog post, NTIA Administrator Strickling wrote about 
these proposals from China and others, ``This is contrary to President 
Obama's vision of an Internet that is interoperable the world over, and 
the United States will vigorously oppose such barriers.'' And I know 
that this is a priority for Ambassador Philip Verveer and the State 
Department as well. Do all of you share the Administration's point of 
view?
    Answer. Yes I do.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Mark Pryor to 
                         Hon. Mignon L. Clyburn
CVAA
    The 21st Century Communications and Video Accessibility Act (CVAA) 
was enacted to update the media and communications accessibility 
requirements and expand access to current and emerging technologies.
    I have heard concerns about the population of the statutorily 
required advisory committees and the resulting recommendations. 
Consumer and advocacy groups that serve on these committees face 
technical and legal capacity constraints that many businesses do not.

    Question 1. Will you be cognizant of these inherent limitations and 
keep them in mind as you consider the recommendations put forth by the 
advisory committees?
    Answer. Yes. Implementing the CVAA to comply with both the language 
and the spirit of the most important accessibility legislation since 
the Americans with Disabilities Act is one of my highest policy 
priorities.
    Further, the Video Programming Accessibility Advisory Committee's 
(VPAAC) reports show where consensus has not been reached on this 
issue. It also received alternate views and identified areas that need 
further review. It is all part of the record and will be considered 
when we undertake future rulemakings.

    Question 2. It is my understanding that the Commission will soon 
consider the Advanced Communications Services provisions of the CVAA. 
How does the Commission plan to ensure that video conferencing services 
used by consumers who are deaf or hard of hearing are interoperable 
with each other?
    Answer. We are considering this issue in a forthcoming Notice of 
Proposed Rulemaking, and its comment period has now closed. The 
Commission will undertake the next step of this rulemaking soon.
Phone Theft
    In March, I sent a letter to Chairman Genachowski expressing my 
concern at what seems to be an epidemic of cell phone thefts. It is my 
understanding that technology within the phone could enable a 
manufacturer or wireless provider to identify a stolen phone and 
prevent reactivation of service. This has significant consumer privacy 
implications. I applaud the Commission's recent initiative to mitigate 
the theft of cell phones but I remain concerned.

    Question 3. Would you walk me through the steps that the Commission 
has taken with regard to cell phone theft, particularly the 
establishment of the database and how you have addressed the privacy 
concerns that have been raised?
    Answer.

   On April 10, 2012, Chairman Genachowski brought together 
        major city police chiefs and the wireless industry to announce 
        new initiatives by wireless carriers to deter theft and secure 
        customer data.

   Implementation of a database to prevent use of stolen 
        smartphones. Within six months of their agreement when 
        Americans call their participating wireless provider and report 
        their wireless devices stolen, their provider will block that 
        device from being used again. This system will be rolling out 
        globally using common databases across carriers over the next 
        18 months.

   Encourage users to lock their phones with passwords. 
        Smartphone makers will notify and educate users in the most 
        highly visible ways--through messages on the smartphone itself 
        and through ``Quick Start'' user guides--about how to use 
        passwords to deter theft and protect their data.

   Educate users on lock/locate/wipe applications. Wireless 
        providers will directly inform their customers about how to 
        find and use applications that enable customers to lock/locate/
        and wipe smartphones remotely.

   Public education campaign on how to protect your smartphone 
        and consumers. The wireless industry will launch a campaign, 
        with media buys, to educate consumers on how to protect their 
        smartphones and themselves from crime.

   Progress benchmarks and ongoing dialog. The wireless 
        industry will publish quarterly updates and submit them to the 
        FCC on progress on these initiatives. We received the first of 
        the required quarterly compliance updates on June 29, 2012.
Universal Service Fund Reform
    I am concerned about the impact of Universal Service Fund reform on 
the continuation of public and private investment in broadband 
deployment.

    Question 4. Would you provide more information about the rationale 
for the retroactive component of the regression caps?
    Answer. The regression methodology for high cost loop support uses 
carriers' latest cost information--and that cost data is updated 
annually--in order to establish reasonable limits for reimbursable 
capital and operating costs for rate-of-return companies. The 
methodology only affects support going forward, beginning on July 1, 
2012.
    Question 5. What opportunities are there for carriers to correct 
data in the regression analysis other than submitting corrections to 
study area boundaries?
    Answer. Carriers may file a streamlined waiver request of the 
regression analysis, if they conclude that the results will have a 
limiting effect of their reimbursable costs due to resulting errors. So 
far, the Commission has only received two waiver requests on the study 
area boundaries, and the Bureau granted those waivers within two weeks 
of receiving those requests.

    Question 6. Would you explain the Commission's formulation of 
setting benchmarks for High-Cost Loop Support?
    Answer. The methodology uses quantile regression analyses to 
generate a set of limits for each rate-of-return cost company study 
area for capital and operating expenditures, based on the carriers' own 
cost information, which the National Exchange Carrier Association files 
annually with the Commission. At the direction of the Commission's USF/
ICC Reform Order, the Wireline Competition Bureau compared each 
company's costs using statistical techniques, to determine which 
companies are similarly situated. The Bureau then set the regression-
derived limits at the 90th percentile of costs, for both capital 
expenditures and operating expenditures, as compared to the similarly 
situated companies.
    The policy rationale for adopting quantile regression analyses 
stemmed from two main observations. First, under the prior rules, 
carriers with high loop costs may have up to 100 percent of their 
marginal loop costs above a certain threshold reimbursed from the USF. 
This gave carriers the incentive to increase their loop costs and 
recover that marginal amount from the Fund, without regard for 
efficient investment or impact of availability of funds for other high 
cost areas. Second, carriers that took measures to control their costs 
or invest and operate more efficiently were losing support to the 
carriers that were increasing their costs under the old rules.
    The limitations imposed through the regression analyses are meant 
to address these issues and incentivize carriers to be more efficient 
in their investment and operations. Thus, by comparing similarly 
situated carriers through a quantile regression analyses, we can 
observe which carriers have been more efficient, and through the 
limitations, incentivize those carriers with expenses in the 90th and 
above percentile to become more efficient in their investment and 
operating expenses.

    Question 7. Some contend that regression analysis will change cost 
recovery revenues from year-to-year which creates uncertainty and may 
negatively impact investment in rural areas. How will the Commission 
balance the need to control costs while encouraging network investment 
in rural areas?
    Answer. Concerns with the predictability of the costs that will be 
reimbursable if the regression analyses are conducted annually have 
been raised in the Petitions for Reconsideration. The Bureau's Order 
enables companies to calculate their expected support amounts until 
2014, providing more certainty to rate-of-return carriers in the short-
term. In the meantime, the Commission is considering the issues raised 
by the carriers in the Petitions for Reconsideration, including whether 
the regression analyses should be set for multiple years.
700 MHz Spectrum
    It is my understanding that the Commission has initiated a Notice 
of Proposed Rulemaking regarding interoperability in the lower 700 MHz 
band.

    Question 8. Does the Commission anticipate the completion of this 
proceeding before the end of the year?
    Answer. Holders of B Block and C Block licenses in the lower 700 
MHz band allege that operations from holders of Channel 51 broadcast 
licenses and holders of E Block licenses in the 700 MHz band will cause 
harmful interference to any networks that will use A Block licenses in 
the lower 700 MHz band. The holders of A Block licenses continue to 
disagree. In my opinion, without a mandate that the parties must 
achieve interoperability by a certain date, there will not be a 
voluntary solution because it is not in the interests of the B and C 
Block licensees, who compete against many of the A Block licensees, to 
reach such an agreement.
    The March 2012 Notice of Proposed Rulemaking asks technical 
questions to examine the merits of these competing arguments. The 
period for filing comments and reply comments ended earlier this month. 
The A Block licensees have conducted tests of handsets with A Block 
license networks and tests of handsets with B and C Block license 
networks, near Channel 51 and E Block operations and the test results 
showed no harmful interference to the A Block or B and C Block 
networks. The interoperability advocates have also filed technical 
analyses and empirical to show that, A Block license operations would 
not cause harmful interference to B Block and C Block licensed 
operations if all three were unified in a single band class. The 
opponents of interoperability have also conducted tests that, they 
contend, support their position. The FCC staff needs to review all the 
test results and decide which are the most persuasive. The 
interoperability advocates believe that this can be accomplished in a 
few months.
Low Power Television
    For many years, Class A and Low Power Television Service (LPTV) 
stations have provided valued local, religious, Spanish language, and 
other programming. Communities have come to rely on this niche 
programming that may not otherwise be available.

    Question 9. How will the Commission work to ensure the viability of 
Class A and LPTV during its implementation of the Middle Class Tax 
Relief and Job Creation Act?
    Answer. As I understand it, the Act made no specific mention of 
LPTV. However, I am a strong proponent of LPTV broadcasters and the 
unique content they provide, and look forward to continuing to work 
with them on any assistance the Commission can offer going forward.

    Question 10. What is your position on mandatory channel sharing for 
LPTV?
    Answer. I have heard concerns from LPTV broadcasters, and intend to 
have further conversations with stakeholders and the FCC's Media Bureau 
to ensure that LPTV stations are protected to the greatest extent 
possible as we move toward greater spectrum efficiency.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Claire McCaskill to 
                         Hon. Mignon L. Clyburn
    Last year, I raised concerns with the FCC regarding the Universal 
Service Fund's (USF) Lifeline Program. In response to these concerns, 
the Commission has taken steps to crack down on waste, fraud and abuse 
within the program. The recent announcement that 20,500 letters will be 
sent in Missouri to eliminate duplication was welcome news. The 
implementation of a database to help detect and prevent duplicates is 
an important tool, but I remain concerned that further action needs to 
be taken to address fraud.

    Question 1. Has the FCC conducted its own investigation into 
possible fraud occurring within the Lifeline program, and if so what 
were the findings of that investigation?
    Answer. While I cannot comment on current investigations, as you 
note, the Commission became aware of duplicative services to consumers 
in the Lifeline program, and issued an Order last summer prior to our 
major reform of the Lifeline program in January 2012, to clarify our 
Lifeline requirements and resolve duplicates in numerous states. That 
process has continued and is expected to save the Universal Service 
Fund approximately $50 million through 2012.

    Question 2. Has the Commission examined the marketing agreements 
providers are using to advertise Lifeline products to consumers?
    Answer. The Commission's overhaul of the Lifeline program required 
that the providers disclose to Lifeline consumers the requirements for 
participating in the program and to certify annually that they follow 
those requirements. Those requirements include eligibility for 
participating in the program. As such, carriers may no longer state 
that proof of eligibility is not required, as evidenced by prior 
advertising before our reform Order was adopted. Moreover, the Bureau 
is reviewing carriers' marketing and advertising material in the course 
of its review of pending compliance plans with the Lifeline reforms 
adopted by the Commission where the carrier is relying upon the 
Commission's conditional grant of forbearance from the facilities-based 
requirements of the Act. Carriers are required to include in their 
compliance plans ``a detailed explanation of how the carrier will 
comply with the Commission's marketing and disclosure requirements for 
participation in the Lifeline program.'' In order to fulfill that 
requirement, many are submitting their marketing and advertising 
materials which the Bureau is reviewing for compliance with our new 
rules.

    Question 3. As required by the Commercial Advertisement Loudness 
Mitigation (CALM) Act, the FCC published an order last December 
outlining practices that networks and cable stations must implement by 
this December. I understand these rules have not yet been published in 
the Federal Register, and I have heard little about progress since 
December. Are we on track to see this legislation--strongly supported 
by consumers--fully implemented by the end of the year?
    Answer. Yes. We are on track to achieve implementation by December 
13th of this year.

    Question 4. In December, the International Telecommunication Union 
(ITU) will convene the World Conference on International 
Telecommunications (WCIT-12) in Dubai to renegotiate the International 
Telecommunication Regulations. A key topic of discussion is expected to 
be whether and how to expand it to cover the Internet. To what extent 
is the FCC involved in policy and technical discussions in advance of 
the ITU meeting?
    Answer. The ITU World Conference on International 
Telecommunications (WCIT) will take place in December 2012, in Dubai to 
revise the International Telecommunications Regulations (ITRs), a 
treaty instrument governing the exchange of international 
telecommunications traffic. As the U.S. Government agency with primary 
responsibility for implementing the 1988 ITRs, the FCC has actively 
engaged in domestic and international preparations for the WCIT.
    The domestic preparatory process is headed by the State Department, 
with participation from other U.S. Government agencies and information 
and communications technology (ICT) stakeholders. The international 
preparatory process took place in an ITU Council Working Group (CWG), 
open to all ITU Member States and Sector Members. The CWG developed 
draft revisions to the ITRs based on contributions to the CWG, which 
will be submitted for consideration to the WCIT.
    The CWG for the WCIT met for the last time on June 20-22, 2012. The 
CWG's report, with proposed changes to the ITRs, was finalized at the 
June meeting and made available to Member States so that they can 
prepare national positions. The FCC will continue to participate in any 
future preparatory meetings and to conduct outreach with other 
countries.
    There has been concern that some countries would attempt to use the 
WCIT to give the ITU authority over Internet governance (including 
naming, numbering and addressing), undermining the long-standing multi-
stakeholder governance model. No specific proposals to grant such 
authority were received by the CWG, and, significantly, the existing 
ITRs have been accepted as a framework for negotiations. This should 
help limit the new issues that may be brought into the treaty. However, 
critical Internet public policy issues will be discussed at the WCIT. 
Of particular concern are proposals that would change Internet protocol 
interconnection and charging mechanisms, as well as limit the ability 
of companies to manage their traffic by requiring them to provide 
calling party number identification information so that countries can 
track where traffic originates. In addition, some countries have 
proposed to add provisions concerning cybersecurity to the ITRs.

    Question 5. What is the view of the Commission on proposals by 
other nations to move oversight of critical Internet resources, such as 
naming and numbering authority, to the ITU or other international body?
    Answer. The FCC will continue to reinforce the U.S. Government 
position not to expand the ITRs to issues related to Internet 
governance. Moreover, we will continue to coordinate with our allies to 
form a strong coalition of like-minded countries that can work together 
to maintain a free and open Internet that is not encumbered by detailed 
ITU regulations that would jeopardize innovation and the free flow of 
information.

    Question 6. American companies have had an historical advantage 
when it comes to the Internet because the innovation that has fueled 
the growth of the Internet started here. Companies were created in an 
environment where unconstrained Internet access provided them with a 
platform to succeed. In this way, America had a ``strategic bandwidth 
advantage'' over other countries. It was perhaps inevitable that this 
advantage would narrow, as broadband speeds have improved around the 
world. Given that context: Is it your view that this ``strategic 
bandwidth advantage'' has led and will continue to lead to job creation 
and greater innovation?
    Answer. Yes, but we must continue on our path to achieve the goals 
of universal broadband deployment, adoption, and use in this great 
nation. 19 million Americans do not have access to robust broadband, 
and \1/3\ of Americans still have not adopted broadband. For those who 
are indigent, minority, living on Tribal Lands or in the Territories, 
the statistics are worse. The Commission is using every tool at its 
disposal to address these issues. We have reformed our Universal 
Service Fund to direct the investment of high-cost support to 
broadband-capable networks in order to reach millions of consumers 
within the decade. We are working with the private sector in a program 
called Connect to Compete to address broadband adoption for low-income 
families who have school-age children, and we have adopted a pilot 
program to determine how we can begin to address the broadband needs of 
all low-income Americans who qualify for our Lifeline program that 
currently supports telephone service. We also must continue along the 
path of supporting private sector investment in broadband networks to 
increase bandwidth capabilities and services, and encouraging access to 
an Open Internet by all consumers throughout the globe.

    Question 7. There has been bipartisan consensus in this body to 
encourage deployment and adoption of broadband for the economic and 
social benefits it brings. How do data caps help or hinder in 
accomplishing that goal?
    Answer. The broadband marketplace continues to evolve, and the 
Commission is monitoring the delivery of broadband service to 
consumers, as required by Section 706 of the Telecommunications Act, 
for instance. As part of that effort, studying the impact of speeds 
delivered, data caps, and other terms and conditions is a useful 
endeavor for us to observe the changes that are occurring, including 
how those changes impact the adoption and use rate of broadband and the 
benefits that ensue as a result. The Commission currently is 
considering an expansion of its Section 706 review that aligns with our 
goals of promoting the deployment, adoption and use of broadband by all 
Americans.

    Question 8. On the surface, usage-based billing makes sense for 
consumers but I am concerned about the chilling effect data caps could 
have on future growth of Internet video and other content. How do we 
ensure fair billing practices for consumers without creating a system 
that stifles innovation and growth of the Internet?
    Answer. As described above, the Commission is actively monitoring 
the broadband marketplace to promote the deployment, adoption, and use 
of broadband and encourage the benefits it offers. Such review includes 
the competitive effects of services offered on the Internet, including 
whether the terms and conditions of that offering, have a limiting 
effect on innovative services that may compete directly with 
incumbents. To date, my observation is that the marketplace is 
evolving, and we should continue monitoring that evolution and the 
impact it has on the deployment, adoption and use of broadband by 
consumers; and we should address complaints about unfair practices as 
quickly as possible so as to ensure continued innovation and investment 
in broadband.

    Question 9. I am sure you would acknowledge the FCC's long-standing 
support of low power television and appreciate the success of low power 
TV since the FCC created the service in 1982. During this span of 30 
years you are no doubt aware that low power TV has developed into an 
essential source of information and entertainment for many diverse 
communities across the country. I think two perfect examples of this 
dynamic would be the audiences who enjoy Spanish-language programming 
and those who enjoy religious programming. Likewise, LPTV has been the 
an entry point for small businesses into the broadcast market and 
today, many LPTV owners are small businessmen who work hard to continue 
to serve their local communities with news and resources aimed at the 
community.
    With this in mind, and also considering the likely end to a great 
deal of low power programming as a result of the repacking, how do you 
expect that this approaching void in unique programming will be filled 
with respect to the core missions of diversity and localism?
    Answer. I am fully aware of the great value that LPTV gives to 
their communities of viewers, and my office has had had multiple 
interactions with LPTV broadcasters who have given us windows into the 
content they produce and how their audiences depend on it. I intend to 
continue listening to the concerns of LPTV station owners and 
broadcasters to better shape our repacking plans in order to protect 
these unique content providers.

    Question 10. I would ask each of the commissioners, will you 
support rules that allow LPTV to survive after the repack?
    Answer. Yes.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Amy Klobuchar to 
                         Hon. Mignon L. Clyburn
    As I brought up in the FCC nominations hearing in November, we have 
a population of television stations currently operating on the northern 
border of Canada, particularly in Lake of the Woods County. They 
applied for channel reallocation after the DTV transition but had to 
wait years to get final approval from the Canadian government and the 
FCC this January.

    Question 1. Looking ahead to the future, the need for international 
cooperation when it comes to spectrum is important to our translator 
operators on the northern border. Has the Commission begun coordination 
with our Canadian counterparts as it relates to incentive auction 
legislation passed in February?** (Senator Klobuchar asked this 
question in Committee and requested written follow up)
    Answer. The United States has had a long and successful history of 
close cooperation on use of the radio spectrum along the border with 
Canada. The FCC's International Bureau routinely communicates with its 
Canadian counterparts on a wide variety of regulatory and other 
coordination matters, ranging from wireless to satellite to radio and 
television broadcast. Cooperating on the incentive auctions is no 
different.
    The United States currently has international agreements for 
sharing TV spectrum along the border with Canada and Mexico. These 
agreements will be respected and can affect the FCC's ability to 
efficiently repack the spectrum.
    The Canadians are in the planning stages of finalizing their 
digital television transition, and both sides agree that we should 
maintain open communications to maximize beneficial opportunities in 
our repacking. We will continue to work closely with the Canadians to 
find satisfactory solutions to whatever repacking challenges may occur.
    Since the release of the National Broadband Plan, the FCC has kept 
our counterparts in Canada informed--at quarterly meetings of the FCC-
Industry Canada spectrum working group, or Radio Technical Liaison 
Committee (RTLC) and at two other bilateral meetings--of the 
possibility of reallocating a portion of the TV spectrum for wireless 
broadband. Since the passage of the incentive auctions legislation last 
February, FCC staff has met with Industry Canada twice to discuss the 
specifics of the legislation.
    Once the Commission releases its Notice of Proposed Rulemaking in 
the fall of 2012, the International Bureau, in conjunction with the 
State Department, will be in a better position to begin more formal 
technical coordination discussions with Industry Canada.

    Question 2. I believe of one of the most impressive programs the 
FCC operates is the E-Rate program supporting communications technology 
in schools and libraries. Senator Rockefeller and Senator Snowe led the 
effort in creating a program that truly benefits schools and kids 
around the country. Minnesota has received a total of $344 million 
since the E-Rate program started in 1998. This support has enabled 
schools and libraries across rural Minnesota to have telecommunications 
and broadband service giving students the ability to enhance their 
education. I understand that with the increase in demand from schools 
for broadband support, E-Rate program resources are stretched thin, 
including staff time to review and audit applications. Will you commit 
to keeping the resources for administering the E-Rate program targeted 
at the intended focus of connecting schools and libraries with 
communication technologies?
    Answer. As you know, our primary goal in the reform and 
modernization of our USF programs is to ensure that they all Americans 
are connected to robust broadband. I commit to you that we will 
continue to strive to achieve that goal in an efficient and effective 
way. It is not our intent to make any changes to the E-Rate program 
that would damage USAC's administration of the E-Rate program.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Mark Warner to 
                         Hon. Mignon L. Clyburn
    Two years ago, the President announced his intention to free up 500 
MHz of spectrum for wireless broadband use. This initiative is even 
more necessary today due to exploding data usage by consumers, which is 
leading to faster-than-expected capacity constraints across the 
country.

    Question 1. Are you satisfied with the current pace of the 
identification and reallocation of spectrum to commercial broadband 
use? If not, why not?
    Answer. I am pleased with the FCC staff's efforts, to date, to 
faithfully implement the voluntary incentive auction authority 
provisions of the Middle Class Tax Relief and Job Creation Act of 2012. 
Less than two months after President Obama signed the bill into law, 
Chairman Genachowski circulated a draft Order to implement the channel 
sharing provisions of the new legislation.
    In light of the Nation's dramatic surge in demand for mobile 
broadband services over the past few years, I believe all relevant 
branches and agencies of the Federal Government need to collaborate on 
a more efficient process for finding spectrum that can be repurposed 
from Federal use towards commercial mobile use.

    Question 1a. Do you have additional suggestions about how Congress 
or the Federal Government could accelerate the process?
    Answer. On July 20, 2012, the President's Council of Advisors on 
Science and Technology (PCAST) released a report that recommended the 
FCC and NTIA find 1000 MHz of spectrum that could be shared by Federal 
agencies and commercial mobile wireless carriers. The Report finds this 
type of sharing to be the most practical, cost effective, and quickest 
way to ensure that the commercial mobile wireless industry can keep up 
with the demand that American consumers have for mobile broadband 
services.
    To move quickly in order to implement the recommendations in the 
PCAST Report, I would suggest that the Senate and the House each 
appoint a task force to study the Report and meet regularly with the 
appropriate staff members of the NTIA and the FCC to determine if new 
Federal laws are necessary and appropriate to efficiently implement the 
sharing recommendations.

    Question 2. The USF reforms--which I supported--seek to deploy more 
mobile and fixed broadband services to rural and underserved America. 
At the same time, mobile data forecasts indicate that the volume of 
data traffic on mobile service provider networks will increase 16 times 
from 2011 to 2016. Rural Virginia wants to be part of the broadband 
economy, however, high quality broadband service just hasn't been 
available where consumers and rural economic development needs demand 
it.
    What would happen to the pace of rural broadband deployment if 
Universal Service Fund Reforms are blocked or slowed down at this time? 
Why is it important to move forward in terms of leveraging existing 
Federal funding to deploy more broadband to rural and underserved 
America?
    Answer. It would be unfortunate for the Commission's reform of the 
USF system to be delayed because unserved consumers may not have 
broadband delivered to them as quickly. We anticipate that with the 
changes we made to our high-cost fund, we can deliver more fixed and 
mobile services to unserved consumers. The reason it is so important to 
leverage these funds to address the unserved needs is that broadband 
service is so important for delivering economic benefits to communities 
and individuals.

    Question 2a. I sent a letter to the FCC in 2011 arguing that 
although 4 Mbps download/1 Mbps upload may be adequate for now, this 
standard should not be considered an acceptable level of service in the 
future. How important is it to you to see that the acceptable level of 
broadband service advances over time?
    Answer. I agree that the definition of broadband is not a static 
definition. It will change as American consumers' use of broadband 
changes. I also believe that we must continue to monitor the speeds 
that consumers need. We are doing just this in our review of the 
marketplace as required by Section 706 of the Telecommunications Act. 
As the speeds increase, so too must our definition of broadband, and it 
is important to me that communities and consumers attain the broadband 
speeds they need in order to participate in the 21st century 
communications marketplace. This is especially so for rural areas which 
need connectivity for economic development and the delivery of 
important services, such as healthcare.

    Question 3. The Commission has a number of highly anticipated open 
Notices of Proposed Rulemaking. Now that the Commission has five highly 
capable commissioners, how soon do you expect to reach decisions on key 
issues? I would encourage you to reach decisions on important matters 
as soon as possible because the delay of long-standing rulemakings has 
caused some frustration.
    Answer. I agree, and am eager to reduce our backlog as quickly as 
possible. I have found my new colleagues to be equally as determined in 
clearing our pending items, and look forward to working with them and 
our existing leadership team to do so.

    Question 4. Looking back at FCC data stretching to 2005, the number 
of full-time equivalents in the Office of Engineering and Technology 
appears to have dropped from 116 to 81. Do you believe this reduction 
is the source of the backlog? Why has this office, which would seem to 
be at the heart of the Commission's work, have declined over time when 
other bureaus or offices have grown or at least stayed flat?
    Answer. Our OET is one of the most crucial and hard-working bureaus 
at the Commission. I am absolutely in favor of increasing its personnel 
back to the previous number if not higher, and advocate similar action 
for additional bureaus as well.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Mark Begich to 
                         Hon. Mignon L. Clyburn
Senator Begich Opening Statement
    Chairman Genachowski, I want to thank you for working with me 
during the FCC's recent efforts to reform the Universal Service Fund. I 
understand the need for efficiencies, and overall support the notion of 
USF reform. I also understand the FCC's efforts to work within a 
reasonable budget. However, the reality is that given Alaska's 
geography, distance from the Lower 48, and the very remote locations of 
small rural communities, all of whom must be connected to 'the grid' 
via ``middle-mile'' terrestrial, satellite or undersea fiber circuits, 
means that Alaska is very different. Our distances are greater, our 
population is smaller, and our costs are much higher, particularly as 
it relates to the very high cost of middle-mile circuits for broadband.

    I understand the Commission desire to establish capital expense and 
operating expense limits for rural rate of return carriers. And, 
whether I agree or not, I understand that your staff's recent order 
establishing what is called a ``regression analysis'' to limit expenses 
puts a limit on most small companies at their current level of capital 
and operating expenses. Thank you for revisiting the formula recently, 
however there are still some companies that will be severely impacted 
by reductions to be implemented on July 1. I understand that your staff 
is well aware that the model contains data errors and other possible 
analytic flaws.

    Question 1. Since your staff admits that these flaws exist, why 
doesn't the FCC limit the July 1 impact to the proposed limitation of 
all companies to their current level of expenses instead of 
implementing the reduction on a few when the reductions may be based on 
data errors and flaws. I know that the order limits the initial level 
of the impact and transitions in the impact, but why implement this 
reduction on a few until you know that you have it right?
    Answer. I do not believe such action is necessary for the following 
reasons. The Bureau used the latest information available to it at that 
time for the high-cost loop regression analyses. The streamlined 
process created to correct study area boundaries was appropriate given 
that only 129 study areas were negatively impacted by the regression 
analyses (and not all of those who are capped were likely to have 
erroneous study area boundaries). This has been confirmed by the fact 
that only two streamlined waivers have been sought. Both were granted 
within two weeks of receipt. Staff has begun the process to obtain the 
study area boundary data from carriers for future regression analyses.
    Moreover, the policy rationale for adopting quantile regression 
analyses stemmed from two main observations. First, under the prior 
rules, carriers with high loop costs may have up to 100 percent of 
their marginal loop costs above a certain threshold reimbursed from the 
USF. This gave carriers the incentive to increase their loop costs and 
recover that marginal amount from the Fund, without regard for 
efficient investment or impact of availability of funds for other high 
cost areas. Second, carriers that took measures to control their costs 
or invest and operate more efficiently were losing support to the 
carriers that were increasing their costs under the old rules.
    The limitations imposed through the regression analyses are meant 
to address these issues and incentivize carriers to be more efficient 
in their investment and operations. Thus, by comparing similarly 
situated carriers through a quantile regression analyses, we can 
observe which carriers have been more efficient, and through the 
limitations, incentivize those carriers with expenses in the 90th and 
above percentile to become more efficient in their investment and 
operating expenses. Delay in the regression analyses would mean delay 
in incentivizing carriers to be more efficient.
    Finally, to the extent any carrier needs adjustments to the 
reforms, it may file a waiver request with the Commission and 
demonstrate that support is not sufficient for it to serve consumers.

    Question 2. It appears highly likely that as a result of the 
November USF/ICC order many rural carriers will lose revenues--both USF 
support and from elimination of crucial intercarrier compensation. Is 
that correct?
    Answer. It depends on each carrier's situation vis-a-vis the 
reforms with respect to USF. For some carriers serving rural areas, 
such as mid-sized carriers like ACS, they actually have access to more 
support to serve unserved consumers by deploying broadband. As for ICC, 
carriers were already losing ICC support due to market changes. The 
modifications we made to the ICC system actually provide the carriers 
more certainty about their ongoing ICC compensation than they would 
have had otherwise. For example, our changes have provided that some of 
their losses can be made up from consumers and the USF--revenues that 
otherwise would not have been available to them, but for the FCC's 
reforms.

    Question 3. Alaska, like 22 other states, has a complimentary State 
level universal service program. The Alaska state fund disburses over 
$15 million to Alaskan carriers each year. Do you anticipate these 
State funds will have to expand to cover revenue lost from the reforms 
you are implementing? And if so, have you calculated how much these 
State funds will need to grow?
    Answer. The FCC has continually encouraged states to work with us 
in ensuring that the high-cost areas of their states have reasonable 
and comparable services, and we continue to engage with them as our 
USF/ICC Reform Order is implemented.
    As a former state Commissioner and Chair of the Federal-State Joint 
Board on Universal Service, I have met with my state counterparts to 
discuss reform numerous times. Those exchanges have been helpful in our 
consideration and implementation of the reforms. This is a fruitful 
dialogue that continues.

    Question 4. The E-Rate program has always meant a great deal to the 
State of Alaska, ensuring that the children and educators living and 
working in our state's most remote towns and villages have access to 
the Internet and distance learning and professional development courses 
that are otherwise unavailable to them locally.
    Let me quote from comments filed with the FCC last week by the 
Superintendent of the Dillingham City School District: As a small, 
rural school district in Alaska that has high poverty, low socio-
economic, and predominantly native Alaskan population (Yupik), ``I want 
to thank the FCC for our current level of E-Rate funding. We are an 
``off the road'' community, meaning the only way in and out is by air, 
dog sled, snow machine, or boat. We just recently acquired access to 
high-speed fiber Internet via GCI Corporation extending this service to 
rural, remote areas of Alaska. The cost for this more than doubled our 
annual rate and without the current E-Rate support we could not afford 
this service.'' Is there a better way to administer the digital 
literacy program without damaging E-Rate processing?
    Answer. The Commission asked questions about implementing a digital 
literacy program in its Further Notice accompanying the universal 
service Lifeline Reform Order. It sought comment on several different 
ways that the program would be administered. We continue to review that 
record. It is not our intent to make any changes to the E-Rate program 
that would damage USAC's processing of E-Rate applications/claims.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Olympia J. Snowe to 
                         Hon. Mignon L. Clyburn
Comprehensive Spectrum Inventory
    As you know I have been calling for a comprehensive inventory for 
over three years now. A comprehensive inventory of both Federal and 
non-federal spectrum would provide decision makers at the FCC, NTIA, 
and Congress a clearer, more detailed, and up-to-date understanding of 
how spectrum is currently being used and by whom--data essential to 
sound policy decisions and spectrum management--mainly given the FCC 
manages over 2 million active licenses and NTIA administers over 
450,000 assignments.
    While I appreciate the Commission's effort in conducting a 
``baseline'' spectrum inventory and creating Spectrum Dashboard and the 
LicenseView, it is not a sufficient substitute to conducting a 
comprehensive inventory. In addition, Representative Stearns, Senator 
Warner and former Commissioner Copps have all recently called for a 
comprehensive spectrum inventory. So there is a growing appeal for such 
effort to have a better understanding of spectrum usage.

    Question 1. How important would having more detailed data on 
spectrum usage and infrastructure and device deployment be to pursuing 
sharing opportunities between spectrum users and promoting more 
spectral efficiency?
    Answer. I believe the Commission should continue to improve the 
information it has on spectrum usage and infrastructure and device 
deployment. I have consistently said that, in addition to finding more 
spectrum that can be repurposed for commercial services, we need to 
encourage licensees to become more efficient at using the spectrum that 
is already allocated for commercial services. Having more information 
about how licensees use allocated spectrum will help us promote more 
efficient use of spectrum.
FCC Technical Expertise
    In Chairman Genachowski's remarks, he stated the Commission is 
operating with its lowest number of employees. The FCC is also 
unfortunately operating at one of its lowest number of engineers--over 
a 60 percent reduction in engineers from the 1950s to today--yet the 
Commission is dealing with significantly more technically complex 
issues such as advanced wireless communications, commercial cable & 
satellite industries, public safety interoperability, more device 
certifications, and broadband.
    Engineers at the FCC play an essential role in regulatory matters 
by providing technical consultation on policy matters, managing 
spectrum allocations, and creating new opportunities for competitive 
technologies. I'm concerned this lack of expertise is hampering 
innovation and job growth because of the excessive delays to businesses 
that are waiting approval to technical waivers, experimental licenses, 
and filed petitions at the agency.
    Others share my concern, a 2009 Government Accountability Office 
report found that the agency ``faces challenges in ensuring it has the 
expertise needed to adapt to a changing market place.'' And 2011 
Wireless Report by the National Research Council suggested the FCC 
would benefit from ``enhancing its technology assessment and 
engineering capabilities'' due to ``entering an era in which technical 
issues are likely to arise on a sustained basis.''

    Question 2. Do you believe the FCC has the sufficient level of 
technical resources, given the concerns various entities have raised?
    Answer. I am proud of the talented engineers and other 
professionals at the FCC. During Chairman Genachowski's testimony 
before the Senate Financial Services Committee, on May 9, 2012, he 
mentioned that currently, the agency has the lowest number of full time 
employees in 10 years. To your point, the FCC is in the process of 
conducting an evaluation of the engineering needs and resources at the 
agency.
Competition and Innovation
    A growing number of consumers are combing traditional media 
services with more innovative products that allow them to stream online 
content. Some products allow consumers to stream online content of all 
types and aggregate it with either free OTA broadcasts or basic cable 
service.

    Question 2a. The Commission is considering an order that would 
allow for the encryption of basic cable signals. While there are 
several benefits to encrypting basic cable service, there are also some 
concerns that innovative devices allowing users to combine online 
content with basic cable service may no longer be compatible without 
additional hardware or software or reduce functionality of the device, 
and may face additional monthly fees for a cable box. As you know, 
Congress specifically addresses this issue in Section 624A of the 
statute (47 U.S.C. 544a), which requires the FCC to assure 
compatibility between consumer electronics equipment and cable systems 
so cable customers can enjoy the full benefits of both.
    Answer. We are looking at this issue carefully, and weighing the 
benefits of encryption against any costs to consumers. We are exploring 
this via our NPRM on the issue, and intend to take the time to strike a 
proper balance in order to get it right.

    Question 3. It's my understanding that other non-cable MPVDs are 
able to encrypt all of their video signals, even basic video service. 
Should Congress revisit the statute to provide greater parity in 
regards to signal encryption?
    Answer. While it is true that non-cable MVPDs can encrypt video 
signals, most consumers would nonetheless need equipment to view their 
cable signals. We have the authority to eliminate the ban, and doing so 
may achieve greater regulatory parity. And as always, I welcome any 
input from Congress on this.
Universal Service Fund & E-Rate
    The National Broadband Plan and subsequent research have identified 
the lack of digital literacy among low-income Americans as a major 
barrier to broadband adoption. To address this, the Commission proposed 
implementing and operating a digital literacy program through the E-
Rate program's administrative structure. The FCC has proposed $50 
million in annual funding over a four year period and that such funds 
would be provided through saving from the restructuring of the Lifeline 
program. While I'm a strong advocate for a greater focus on improving 
digital literacy to spur broadband adoption, I'm concerned about the 
impact this proposed program will have on the E-Rate program, if it is 
administered through it.

    Question 4. I'm concerned the proposed Digital Literacy program 
will be difficult to monitor. With E-Rate, it is possible and cost-
effective to send auditors to school and library sites to ensure 
applicants have actually purchased and installed the equipment for 
which they received E-Rate support and providers have actually 
delivered promised services. By contrast, it seems it may be difficult 
for auditors to determine this proposed digital literacy initiative's 
funds have actually been spent on courses. Can you tell me how USAC 
could properly audit this digital literacy initiative?
    Answer. As with other reforms to the Universal Service Fund, 
combating waste, fraud, and abuse is a top priority. Our new program 
will not be taking money from E-Rate, and will be budget-neutral. What 
we are proposing is a new initiative to address digital literacy, which 
will not affect E-Rate and will be imminently auditable.
Competitive Access to Spectrum
    The ``spectrum crunch'' is not exclusive to just one or two 
carriers, it is industry wide. And while the top four carriers provide 
wireless service to 90 percent of the total subscribers in the U.S., 
more than 30 million other subscribers use someone else. As you know, 
Section 309(j)(3) of the statute (47 U.S.C. 309(j)(3)) requires 
Commission to promote ``economic opportunity and competition'' by 
``disseminating licenses among a wide variety of applicants'' including 
small businesses, rural carriers, and minority and woman-owned 
businesses.

    Question 5. How should the FCC ensure, in a fair and competitive 
manner, that all carriers--large and small--have adequate access to 
this critical but finite resource?
    Answer. Section 309(j)(3) of the Communications Act of 1934, 
directs the FCC to establish a competitive bidding methodology, 
considering such factors as: the development and rapid deployment of 
new technologies, promoting economic opportunity and competition, and 
the efficient and intensive use of spectrum. Consistent with this 
statutory authority, among the many options we could consider is 
limiting the amount of spectrum an entity could acquire at an auction. 
All entities, irrespective of annual revenues or number of subscribers, 
would and should be able to participate. However, the agency may 
address this challenge by imposing limits on how much spectrum any one 
entity could acquire.

    Question 6. Several countries have recently held or plan to hold 
spectrum auctions to make more spectrum available for next generation 
wireless communications and broadband. Some of these countries have 
applied certain conditions to their auctions rules. For example:

  1.  In its 4G auction, France's ARCEP provided bidding preferences to 
        carriers that agreed to host MVNOs on its networks and had 
        enhanced rural build-out requirements. It also required roaming 
        agreements--to a losing bidder--for any carrier that won more 
        than one frequency block.

  2.  Germany' regulator, Bundesnetzagentur, applied rural build-out 
        requirements for its 800 MHz auction and placed bidding 
        restrictions on certain carriers.

  3.  The Netherlands reserved two spectrum blocks in the 800 MHz band 
        and one in the 900 MHz band for new entrants.

  4.  Canada, in its 2008 AWS auction, set aside spectrum for a new 
        entrant.

  5.  Czech Republic's CTU has reserved the 1.8 GHz block for a new 
        entrant

  6.  Ofcom has proposed spectrum caps in its upcoming LTE spectrum 
        auction.

  7.  Australia has proposed spectrum caps for its upcoming auction.

    It should be noted that several of these auctions ended up 
exceeding revenue expectations. I'm not advocating for the 
implementation of any conditions on any future auctions but I'm curious 
as to why these countries deemed it necessary to apply such conditions 
in their auctions rules? Do you believe the FCC should closely 
examination the recent 4G auctions in other countries to assist in 
determining how best to design future domestic auctions?
    Answer. Again, Section 309(j) enables the FCC to consider other 
options that have successfully led to more competitive options for 
consumers. A number of the proposals identified above were designed to 
reserve spectrum for new entrants. New entrants provide additional 
options to consumers and I think the FCC should also consider offering 
a new entrant bidding credit. During the 700 MHz proceeding in 2007 
that led to the auction (Auction No. 73) of those highly valuable 
licenses, Public Knowledge and other parties proposed this new entrant 
credit. The FCC ultimately decided against adopting this credit for two 
reasons. First, according to that Order, there was a ``scant record'' 
on this issue. Second, the FCC's Order claimed that there were other 
such proposals that the agency did adopt that could promote 
participation by new service providers. One such proposal was package 
bidding. Another was making multiple licenses available in each and 
every market. Another was offering credits for small businesses. But, 
according to comments filed at the FCC, small businesses won only 2.6 
percent of the licenses offered in Auction No. 73. If we want to 
encourage more participation by small businesses, we should consider 
other options such as a new entrant bidding credit.

    Question 7. As you know, Section 309(j)(7) of the statute (47 
U.S.C. 309(j)(7)) expressly prohibits the Commission from using the 
expected revenue from a spectrum auction as a basis for determining the 
public interest of frequency assignments. Furthermore, Congress, in 
H.R. Rep. No. 111, 103d Cong., 1st Sess. 258 (1993), emphasized that 
``important communications policy objectives should not be sacrificed 
in the interest of maximizing revenues.''
    While there is broad agreement auctions are the best mechanism to 
distribute spectrum licenses, is there too much emphasis currently 
being placed on maximizing auction revenues instead of the longer term 
economic benefit that may result? How might such skewed focus on 
proceeds hinder achieving the strategic goals necessary for the long 
term health of the spectrum ecosystem?
    Answer. As Congress mandated in those statutes you identified, the 
FCC should design auctions to achieve important national communications 
policies such as promoting the broadest deployment of advanced 
communications services and putting spectrum to its highest and best 
use. The primary interest in designing auctions should not be to 
maximize auction revenues.
Spectrum Efficiency Metrics
    One of the primary, long-standing goals of the FCC has been to 
promote more efficient use of spectrum. The FCC's 1999 Spectrum Policy 
Statement highlighted ``with increased demand for a finite supply of 
spectrum, the Commission's spectrum management activities must focus on 
allowing spectrum markets to become more efficient'' and Strategic Plan 
for FY 2003-2008 (published in 2002) indicated its general spectrum 
management goal is to ``encourage the highest and best use of spectrum 
. . .''
    In its 2002 report, the Spectrum Policy Task Force developed three 
definitions: spectrum efficiency, technical efficiency, and economical 
efficiency. However, the SPTF concluded ``it is not possible, nor 
appropriate, to select a single, objective metric that could be used to 
compare efficiencies across different radio services.''

    Question 8. In the FCC's search to free up more spectrum for 
wireless broadband, how does the FCC effectively determine and compare 
the spectral efficiency of different types of radio-based services when 
targeting various frequencies for reallocation?
    Answer. The FCC generally has not applied a spectral efficiency 
metric for different types of services. The FCC's Technological 
Advisory Council (TAC) considered such metrics and determined that a 
single metric to compare spectral efficiency among different services 
is not feasible. However, the TAC prepared a white paper on the subject 
that is available on the FCC website at http://transition.fcc.gov/oet/
tac/tacdocs/meeting92711/Spectrum_Efficiency_Metrics_White_Paper_by_
TAC_Sharing_Working_Group_25Sep2011.doc
    The TAC made a number of suggestions for improving overall spectral 
efficiency, such as increasing sharing among services, which are under 
consideration. See http://transition.fcc.gov/oet/tac/tacdocs/
Dec2011_mtg_full.ppt#443,46,Spectrum Efficiency Metrics Actionable 
Recommendations

    Question 9. One of the common spectrum efficiency metrics for 
wireless communications is in terms of bits/second/hertz. Some parties 
have suggested more granular metrics such as bits/second/hertz/pop or 
bits/second/hertz/cell. It seems like there could be several different 
metrics within each definition of efficiency.
    Robin Bienenstock of Sanford Bernstein raised the issue of network 
density and highlighted the difference between the U.S. and European 
countries. Specifically, Ms. Bienenstock compared California with Spain 
(noting similar size, topography, and population density). A major 
carrier in Spain had 33,000 base stations, whereas a major U.S. carrier 
in California had only 6,000 sites. Across the board, the network 
density for operators in Spain is three to six times higher than that 
of operators in California. With more cell sites, there is greater 
spectrum reuse, which means more efficient use, and a lessening of 
demand for the raw material (spectrum).
    Does the FCC use network density as a component of its spectrum 
efficiency metric? If not, given the FCC already imposes build-out 
requirements to licensees, should the FCC explore requiring network 
density guidelines too as a way to promote more efficient use of 
spectrum?
    Answer. The number of cell towers would be considered in evaluating 
spectrum efficiency for a commercial wireless service licensee, but it 
is only one of many factors that determine whether the spectrum is 
being used efficiently. Generally, cell towers are added to achieve 
coverage and capacity where needed. A lower number of cell towers in 
one location as compared to another may simply be a reflection of lower 
traffic demands. The key consideration is whether a wireless carrier is 
using reasonably available techniques to meet traffic demands in the 
most dense areas. Other factors that would be considered are the amount 
of spectrum, the wireless technology that is used and any constraints 
that may limit deployment such as the need to protect against 
interference to services operating in adjacent spectrum.

    Question 10. Does the FCC have any additional data on network 
density comparisons of the U.S. in relation to other countries?
    Answer. The FCC has data on many but not all wireless towers in the 
U.S. We do not have any direct access to data on network density in 
other countries. Moreover, carriers have increasingly deployed wireless 
base stations that provide service capacity in crowded areas and are 
not located on towers but rather on buildings and a variety of objects. 
We have no data on these small cells.
Resolving the ``Spectrum Crunch'' Through Technology
    I'm concerned there is not enough focus on the role of technology 
in meeting the growing demand for wireless network capacity. An Ofcom 
report rightfully points out increasing wireless network capacity 
depends on a combination of ``spectrum, technology, and topology.'' 
Given the challenges we face with reallocation, I believe technology 
will play an even more prominent role.
    For example, research by Ofcom found that early 4G mobile networks 
will be 230 percent more spectrally efficient than 3G networks and that 
efficiency will increase to 450 percent by 2020. Technologies like 
dynamic spectrum access and cognitive radio can considerably improve 
utilization by allowing more aggressive spectrum sharing, and, though 
many years off, quantum entanglement and ``twisted'' waves hold amazing 
potential to significantly, and even possibly infinitely, increase 
capacity without any additional spectrum.
    However, I'm concerned about the threats the U.S. is facing in 
regards to its leadership in innovation, primarily with ICT. Many 
reports highlight most of the global R&D growth will be mainly 
attributed to Asian economies--according to NSF, the United States' 
share of global R&D expenditures dropped from 38 percent to 31 percent 
between 1999 and 2009, while the Asia region grew from 24 percent to 35 
percent. In addition, more U.S.-based companies are locating R&D 
operations overseas--the number of overseas researchers employed by 
U.S. multinationals nearly doubled from 138,000 in 2004 to 267,000 in 
2009.

    Question 11. What more can the government do (besides make the R&D 
tax credit permanent) to foster greater R&D investment, primarily in 
ICT?
    Answer. The government can play a major role by identifying and 
reducing any unnecessary regulatory burdens. It is my understanding 
that, during Chairman Genachowski's tenure, we have eliminated 210 
obsolete regulations and identified 25 data collections for 
elimination.

    Question 12. Given the benefits that both the private and public 
sectors will reap from more advanced technologies, how can there be 
more collaboration between both sectors to see these technologies to 
fruition?
    Answer. The Commission has worked well with Federal advisory 
committees to identify issues that can be addressed by promoting best 
practices. I would encourage other Federal agencies to engage in 
similar collaborations if they are not already doing so.

    Question 13. Does the FCC have any estimates on the amount of 
domestic private sector funding in wireless R&D as a percentage of 
overall industry capital investment? Do you believe there is enough 
domestic R&D investment in advanced wireless communications in 
comparison to other countries?
    Answer. We do not collect data on the amount of domestic private 
sector funding in wireless R&D. Chapter 7 of the National Broadband 
Plan discussed research and development in broadband technologies and 
made a number of recommendations for action by other Federal agencies. 
See http://www.broadband.gov/. The FCC participates in Wireless 
Spectrum Research and Development (WISARD) group of the National 
Coordination Office for Networking and Information Technology Research 
and Development to help develop priorities, encourage private 
investment, and develop public/private partnerships where appropriate. 
See http://www.nitrd.gov/. You may wish to contact that organization 
for further information on private sector research and development.

    Question 14. While U.S. industries fund approximately 70 percent of 
domestic R&D, the Federal Government is the primary source of funding 
for basic research, providing approximately 60 percent of funding, and 
industry conducts less than 20 percent of the basic research done in 
the U.S., according to the Science Coalition.
    How important are Federal programs like NSF EARS and DARPA STO to 
the long-term growth and health of innovation in the spectrum ecosystem 
and should Congress provide greater funding for basic research in this 
area?
    Answer. Federal Government research initiatives, such as the 
National Science Foundation's Enhancing Access to the Radio Spectrum 
initiative Defense Advanced Research Projects Agency's Strategic 
Technology Office, provide valuable insights on ways to promote 
spectrum efficiency. With regard to whether Congress should provide 
greater funding to those program, however, I must refer you to those 
who assist President Obama in overseeing those agencies.
Spectrum Flexibility
    The National Broadband Plan highlighted the importance of spectrum 
flexibility. The NBP concluded that ``flexibility of use enables 
markets in spectrum, allowing innovation and capital formation to occur 
with greater efficiency'' and ``spectrum flexibility, both for service 
rules and license transfers, has created enormous value.'' That 
innovation and capital formation could be beneficial to addressing the 
challenges that exist in making more affordable and faster broadband 
available in rural areas.
    As you know, Section 336 of the statute (47 U.S.C. 336) allows 
broadcasters to offer ancillary and supplementary services, which 
includes data transmission and interactive materials. Section 336 also 
prescribes the assessment and collection of fees related to such 
service offerings, and the FCC, back in 1998, adopted rules requiring 
broadcasters to pay a fee of 5 percent of gross revenues from such 
services for which they charge subscription fees or other specified 
compensation.

    Question 15. If we need to get broadband into rural areas, why not 
let other licensees, like broadcasters, attempt to close the digital 
divide that exists? Mainly, since they may have infrastructure already 
in place to build off of.
    Answer. Broadcasters are currently allowed to provide ancillary 
services over their licensed spectrum, if they also provide one stream 
of standard stream of free television programming. This may not be the 
most efficient way to meet the growing need for commercial mobile 
services, because broadcast television spectrum is licensed to stations 
in six megahertz channels within a defined local area. Wireless 
broadband services, especially those using the most advanced 
technologies, such as Long Term Evolution or LTE, are most efficiently 
deployed when using different sized channels over larger geographic 
areas. One of the reasons for conducting voluntary incentive auctions 
is to enable the Commission to receive the six megahertz channels from 
broadcasters and reorganize the spectrum into a band plan that can be 
more efficiently allocated for mobile services including mobile 
broadband services.

    Question 16. Even though the FCC adopted rules to avoid unjust 
enrichment, some parties have still raised concerns that such 
flexibility would be unfair since the broadcasters weren't assigned the 
spectrum via an auction. However, as you know, the FCC has only 
auctioned licenses since 1994 and prior to that used comparative 
hearings and then lotteries for frequency assignments--including 
licenses for wireless communications.
    If there is concern about ``unjust enrichment'' if broadcasters 
provide broadband, why isn't there the same concern with wireless 
communications licenses issued prior to 1994? Wouldn't the 5 percent of 
gross revenue that broadcasters have to pay if they add broadband to 
their signals fairly compensate the government, mainly since such 
service would have to be ``ancillary and supplementary'' to their 
broadcast television signal?
    Answer. As your question suggests, today, broadcasters may add 
broadband to their signals, if they can offer a standard definition 
stream of free television programming. They pay a five percent fee to 
the government on those ancillary services. Broadcasters have not, 
however, taken much advantage of this capability. Therefore, this 
approach, thus far, has not been sufficient to help the Nation meeting 
the explosive demand for spectrum that can be used commercial mobile 
broadband services. One reason for this may be that the television band 
plan is ill suited for today's advanced mobile broadband networks. 
Congress likely reached a similar conclusion when it enacted the 
voluntary incentive auction authority provisions of the Middle Class 
Tax Relief and Job Creation Act of 2012.
Spectrum Fees
    Recommendation 5.6 of the National Broadband Plan suggested 
``Congress should consider granting authority to the FCC to impose 
spectrum fees on license holders and to NTIA to impose spectrum fees on 
users of government spectrum'' to address inefficiencies in spectrum 
allocations and promote more efficient use of spectrum. It is my 
understanding that every administration since Clinton has requested 
spectrum fee authority from Congress.
    Ofcom imposed similar fees (known as Administrative Incentive 
Pricing) in the late 1990s and issued a report in 2009 that concluded 
the fees ``met its primary objective in helping to incentivise spectrum 
users to consider more carefully the value of the spectrum they use 
alongside that of other inputs, and to take decisions that are more 
likely to lead to optimal use of the available spectrum.'' The report 
also ``found no evidence to suggest that the application of AIP has 
given rise to material adverse consequences for spectrum efficiency.''

    Question 17. Should Congress grant the FCC and NTIA spectrum fee 
authority either on all licenses and assignments or just on non-
auctioned licenses, mainly if the FCC moves to implement greater 
flexibility of spectrum use? Do you believe the FCC can strike the 
proper balance in applying spectrum fees to promote more efficient use 
of spectrum but not to a point that it presents an undue financial 
burden to the licensee?

    Question 17a. Some parties have opposed spectrum fees calling them 
a tax. But what is the difference between a spectrum fee that is paid 
annually and a licensee paying a lump sum at an auction? If a spectrum 
fee is a tax, isn't an auction payment a tax as well since it too goes 
to Treasury? Or are both not considered taxes since they are transfers 
to government for the right to use a public good?

    Question 17b. If not spectrum fees, how should the FCC impose 
economic fairness between licensees that are/were awarded via auctions 
versus those that were awarded via comparative hearings and lotteries?
    Answer. Allow me to respond to all three questions on spectrum 
fees. This was a recommendation in the March 2010 National Broadband 
Plan, designed to address certain concerns about those spectrum 
licensees with inflexible licenses that limit the spectrum to specific 
uses. As the Plan explains, these licensees do not incur opportunity 
costs for use of their spectrum. Therefore, they are not apt to receive 
market signals about new uses with potentially higher value than 
current uses. The result can be inadequate consideration of alternative 
uses and artificial constraints on spectrum supply. The Plan 
recommended that Congress provide the FCC and NTIA with authority to 
issue spectrum fees on these licensees but not on spectrum that is 
licensed for exclusive flexible use. In my opinion, the FCC and NTIA 
should coordinate closely and hear from all relevant stakeholders, 
especially licensees, before we take a position on such a proposal.
                                 ______
                                 
     Response to Written Question Submitted by Hon. John Thune to 
                         Hon. Mignon L. Clyburn
    Question. Congress recently passed spectrum auction legislation and 
the Commission will begin setting rules for implementation perhaps as 
early as this fall. I'm hearing from some low power television (LPTV) 
interests in my state who are concerned about how the FCC will handle 
low power stations when the FCC conducts their incentive auctions, and 
subsequently goes through a process of clearing channels 31-51. Low 
power TV stations provide a valuable service, such as local public 
meetings and religious broadcasting. LPTV has been the entry point for 
small businesses into the broadcast market and today, many LPTV owners 
are small businesses who work hard to continue to serve their local 
communities with news and resources aimed at the community. Would you 
support rules that allow LPTV to survive? What assurance can you 
provide that low power television stations will be protected?
    Answer. We recognize the importance of LPTV stations as they 
encourage growth and strengthen the means by which information is 
disseminated especially among small communities. Although the Spectrum 
Act did not totally address LPTV auction issues we do recognize the 
need for specificity. Therefore, the Commission has and will continue 
to work with the providers to ensure that they have a sustainable 
avenue for continued distribution of LPTV content.
                                 ______
                                 
    Response to Written Question Submitted by Hon. John Boozman to 
                         Hon. Mignon L. Clyburn
    Question. What short-term solutions for spectrum needs can be 
utilized while longer-term solutions, such as incentive auctions, are 
implemented?
    Answer. In my opinion, the Commission should encourage mobile 
wireless carriers to be more efficient when using the spectrum they 
currently hold. Under Chairman Genachowski's tenure, the Commission has 
initiated proceedings, held workshops, and taken other steps to 
encourage commercial mobile wireless carriers to be more efficient. For 
example, in late 2010, the Commission adopted a Notice of Inquiry to 
seek comment on issues related to promoting greater use of dynamic 
spectrum access technologies and secondary markets. Earlier this year, 
the Commission held a workshop on distributed antenna systems and small 
cell technology that augment mobile broadband and wireless services in 
cities and communities. At that workshop, FCC staff members, and 
invited panelists, discussed successful deployments of DAS and small 
cell technologies in both outdoor and indoor public spaces, including 
hospitals, campuses, buildings, business and historical districts, and 
transit systems.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                         Hon. Mignon L. Clyburn
    Thank you for your testimony before the Committee. I appreciate the 
time you spent and your thoughtful answers to the following questions.
    As you all know, our economy benefits greatly from the 
communications and technology sector. Competition and innovation have 
created new services and devices as well as high-quality jobs that have 
changed the lives of Americans. This sector is incredibly important to 
sustainable growth of our economy. That is why Congress must push the 
Federal Communications Commission to be the most open and transparent 
agency in the Federal Government. The industries you regulate are too 
important to our Nation.
    Under Chairman Genachowski, I have seen notable steps in the right 
direction, and he has made process a ``top priority.'' That being said, 
I am concerned that the FCC is not always as open and transparent as it 
should be. The problem as I see it today is that the FCC can pick and 
choose the rules it wants to follow when it wants to follow them. This 
method is convenient for the FCC, but it is not good government, and we 
owe more to Americans with business before the FCC.
    I introduced legislation that pushes the FCC toward more 
transparency and openness. The intent of my legislation is not to 
hamstring the agency. It is to push them to be exactly what Americans 
expect from their government, open and transparent regulators of the 
laws passed by Congress.
    A more predictable and consistent FCC will create jobs in Nevada, 
which has the unfortunate distinction of leading our nation in 
unemployment for over two years. Every government agency should be 
committed to policies that promote job creation, investment and 
innovation. The technology sector has helped growth in our country for 
the last twenty years and will continue to if big government does not 
overburden it.
    I introduced two measures, the Telecommunications Jobs Act (S. 
1817) and the Federal Communications Commission Consolidated Reporting 
Act (S. 1780). These bills push the FCC to be the most open and 
transparent agency in the Federal Government and provide a streamlined 
method of reporting to Congress.
    The following questions are in regards to those bills, and I would 
ask you to please respond to each question.

    Question 1. One of the most important reforms I introduced would 
force the Commission to demonstrate beyond any doubt the need for 
regulation before intervening in the marketplace. I strongly believe 
that a cost-benefit analysis should be conducted on any regulation that 
will have a significant market impact, and I believe that before the 
FCC begins a rule proposal, they survey industry within three years of 
proposing a rule to determine whether that regulation is even 
necessary. A cost-benefit analysis mandating the FCC to identify actual 
consumer harm and conduct an economic, market-benefit analysis is 
consistent with President Obama's Executive Order 13563 on Improving 
Regulation and Regulatory Review. Would you support legislation that 
implements a cost benefit analysis consistent with the President's 
Executive Order? If not, why?
    Answer. In my opinion, a Federal statute is not necessary because 
the Commission has been complying with President Obama's Executive 
Order. The cost benefit analysis is a key factor that the Commission 
considers before it adopts any rules. I welcome any and all ideas on 
minimizing consumer harm and improving transparency. But, I would need 
to see specific legislative language on targeted analyses prior to 
rendering any opinion.

    Question 2. Do you support legislation mandating the FCC to survey 
the marketplace within three years before initiating a rulemaking?
    Answer. At this point, and without knowing more details about such 
possible legislation, I would find it difficult to support a Federal 
statute requiring the FCC to survey the marketplace within three years 
before initiating a rulemaking proceeding. As an initial matter, 
Congress already has statutes requiring the Commission to report about 
various industries that we regulate on an annual basis. For example, 
with regard to the video programming industry, the FCC researches the 
industry language and releases annual competition reports on trends, 
user habits, and market place shifts. These reports inform us about 
what fluctuations are happening and why. They are thorough and well 
laid out. They assist us in our rulemakings and guide us in addressing 
areas of concerns in the various industries we regulate. I feel they 
are a sufficient means of assessing the market.
    In addition, requirements to study the marketplace before 
initiating rulemaking proceedings would prevent the Commission from 
being flexible enough to adjust to changes in technology and, 
therefore, changes in the needs of both consumers and communications 
companies. In addition, in many instances, the Commission initiates 
rulemaking proceedings to reduce regulatory burdens. For example, in 
May 2012, the Commission adopted rule changes that would permit 
Specialized Mobile Radio licensees in the 800 MHz to use these licenses 
to provide 3G voice and data services. The Commission moved very 
quickly to initiate and adopt these rule changes. Sprint filed its 
petition for a declaratory ruling or a rulemaking in June 2011. The 
Commission its Notice of Proposed Rulemaking in March and adopted the 
rule changes in May 2012. The Commission would not have been able to 
move so expeditiously in this proceeding if there had been a Federal 
statute requiring the agency to first conduct a survey before 
initiating a proceeding.

    Question 3. Under the Chairman, 85 percent of the Notices of 
Proposed Rulemakings have contained text of proposed rules. However, in 
the years before Chairman Genachowski, only 38 percent contained the 
specific text. Also, at times, these NPRM's have been broad, leading to 
uncertainty because industries are not clear as to what the FCC is 
actually looking at. Do you believe that the FCC should include the 
actual language of any and all proposed new rules in every NPRM?
    Answer. In my opinion, the Administrative Procedures Act, which 
governs all Federal agencies, has sufficient notice and comment 
requirements to give the public, including FCC licensees, adequate 
information about rules the Commission might adopt and sufficient 
opportunity to comment on any such proposed rules. In some cases, it 
might be difficult to specify every detail of such proposed rules. The 
Commission should have flexibility, when those few instances present 
themselves, to not specify every detail of every proposed rule.

    Question 4. These NPRM's can stay open for quite a while costing 
industry time and resources without any knowledge of whether action 
will take place or not. I have heard from many of my constituents with 
business before the Commission that they simply cannot get an answer 
from the Commission on what seems to be routine petitions, 
applications, or proceedings.
    Nevada has asked for a waiver from the FCC in regards to its 700 
megahertz public safety early deployment rules. I understand that a 
decision on this could have been delayed until Congress passed a public 
safety spectrum allocation bill. Now, with provisions intended to 
facilitate a public safety network in place, the FCC still seems to be 
stalling on this.
    Other companies have purchased spectrum in the lower 700 MHz and 
are awaiting a decision by the FCC on whether rules regarding 
interoperability, clearing channel 51 or waivers to build out 
requirements will be granted.
    The issue of ``special access'' has been open for 10 years before 
the Commission without any resolution. This is an issue worth billions 
of dollars to the entire industry.
    Furthermore, last July, I and a number of my colleagues on this 
Committee wrote to you and we did not receive a response for 8 weeks 
and only after multiple follow up letters and calls. When Senators on 
the Committee of jurisdiction have trouble receiving a response from 
the FCC, there clearly are problems with answering questions.
    All of this leads to uncertainty. There doesn't appear to be much 
confidence among many companies that the FCC can act expeditiously on 
much of anything of significance to the industry. Proceedings can 
languish for 3, 5, or 10 years. Companies, generally, have a hard time 
investing, or increasing their investment, if they are uncertain what 
the regulatory environment is going to look like for their business.
    Chairman Genachowski has worked on this issue and established 
internal 180-day shot clocks; however, this has not solved all the 
problems of open ended NPRMs.
    Do you believe that Congressional legislation implementing shot 
clocks on FCC action is appropriate? If not, why? Does the Commission 
expect to act on any of the examples listed above?
    Answer. I support measures that encourage efficiency, transparency, 
and a more productive FCC, but I am wary of reform measures that would 
restrict our deliberative and adjudicatory process and force us to 
speed up meetings with outside parties, and internal deliberations in 
order to meet a deadline that does not afford enough time for 
thoughtful and extensive review.

    Question 5. Since 2008, the FCC has conducted a number of merger 
reviews. How many times has the FCC failed to conclude the review 
within the 180-day shot clock period? How many times was the deadline 
missed? Was there any reason they were missed?
    Answer. Not all license transfer applications are decided at 
Commission level. The operating Bureaus decide several of these 
transfer applications. As I understand it, the 180-day ``shot clock'' 
was introduced in 2000 as an informal, non-binding tool to give the 
public a better sense of the timing of agency review and to provide the 
agency with a target to shoot for in most transactions. It is my 
understanding that, since Chairman Genachowski was sworn in, the 
Commission has decided over 95 percent of all applications within 180 
days. For the specific reasons why certain license transfer 
applications, I respectfully refer you to the Office of General 
Counsel's Transaction Team at the Commission. That team is responsible 
for coordinating the FCC's review of applications for the transfer of 
control and assignment of licenses and authorizations involved in major 
transactions, such as mergers. The Transaction Team helps ensure that 
the Commission's internal procedures are transparent and uniform across 
the various Bureaus. It is also responsible for recommending how to 
improve the review process to promote faster and more consistent review 
of applications.

    Question 6. Going back to the President's Executive Order 13563, 
the Chairman has fully supported the ideals of the order, which in part 
states ``For proposed rules, such access shall include, to the extent 
feasible and permitted by law, an opportunity for public comment on all 
pertinent parts of the rulemaking docket, including relevant scientific 
and technical findings.''
    In the days before the record closed on the Commission's reform of 
the high cost of the Universal Service Fund, the FCC added 114 new 
pages of its own to use in the final decision. This practice denied 
public input on information that was used to render a decision which 
seemed to run counter to the President's Executive Order. Without 
adequate public and stakeholder input, the chance that a regulation 
will have unintended consequences increases. One example brought to my 
attention is that now smaller rural markets like those in my state will 
miss out on support because of the presence of fixed wireless services. 
They believe more dialogue and transparency could have avoided this 
outcome.
    Do you believe that relying on reports in rulemaking and 
adjudications that are without a robust notice and comment process is 
appropriate? Or substantially altering a report after the period with 
which industry input or comments are accepted?
    Answer. As it relates to our recent USF proceeding, the additional 
pages were added to assist consumers and all stakeholders so that they 
have a better understanding of the materials that the FCC cited in its 
decision. In addition, a substantial portion of these materials (law 
review articles, journals, magazine articles, etc) were cited by 
commenters. Thus, as a service to consumers, the Commission decided to 
include them in record

    Question 7. Do you agree that it is not the best practices of a 
government agency to dump data into a report at the 11th hour without 
industry input?
    Answer. Per to the response offered for the previous question, much 
of the material in the USF proceeding was actually cited by industry. 
To address this shortcoming, the FCC's Office of General Counsel issued 
a Public Notice seeking comment on alternate means of having these 
materials added to the record, including requiring industry to submit 
copies of materials that they cite in their comments.

    Question 8. Do you agree that this method, while perhaps helpful to 
the Commission, is not open and transparent to the level benefitting an 
agency that issues regulations that have a significant economic impact?
    Answer. Guidance has been given to the FCC staff that documents 
which submissions need to occur prior to the internal circulation of 
any draft rulemakings. This procedure should alleviate the concerns you 
have raised on this point.

    Question 9. The FCC rightfully should review transfers of lines 
under section 214 of the Communications Act and the transfer of 
licenses under section 309 and 310 of the Communications Act. However, 
this review should not provide the FCC to extract a list of concessions 
from the applicant in exchange for approval. For example, in the 2011 
Comcast/NBC Universal transaction order, the Commission accepted a 
``voluntary'' commitment from Comcast to comply with net neutrality 
rules even if a court overturns those rules.
    This agreement was made through a transaction review and was done 
without any public scrutiny--as proposed conditions are often unknown 
until the approval order is announced.
    Do you believe that this type of rulemaking provides a scenario in 
which one set of rules exist for those who have merged and another 
exists for those who have not?
    Answer. In my opinion, this is not a rulemaking proceeding, it is 
an adjudication of a license transfer application. Since the Commission 
follows the mandates set forth in the relevant sections of the 
Communications Act, the Commission applies the same laws and agency 
precedent to the relevant facts raised by each particular license 
transfer application.

    Question 10. Have there been instances you have experienced when 
merger conditions have been imposed that was not directly related to 
the transfer questions?
    Answer. No, I have not experienced such an instance. Under Section 
310 of the Communications Act, a party that applies to acquire an FCC 
license has the burden of demonstrating that the license transfer would 
serve the public interest. In some cases, the applicants will attempt 
to meet that burden by voluntarily committing themselves to take an 
action they claim would provide a public interest benefit. The 
applicants may also voluntarily commit to conditions that address 
potential competitive harms especially when parties have filed 
petitions to deny an application because the license transfer would 
cause harm to competition and harm to consumers. Since the applicants 
have the interest in acquiring the spectrum and they also bear the 
burden of proof, it is for the applicants to decide if the voluntary 
commitments serve their best interests.

    Question 11. Do you believe it is appropriate to require the FCC to 
end this practice by requiring the FCC to narrowly tailor any 
conditions it imposes or commitments it accepts to only address harm 
caused by the transfer of licenses?
    Answer. Section 310 of the Communications Act requires the FCC to 
ensure that the license transfer applicants have met their burden of 
proving that an application serves the public interest. As with any 
regulatory action, it requires a balancing of costs and benefits. That 
mandate does not limit the FCC's authority to only address harms and, I 
respectfully submit, it should not.

    Question 12. Last November, I introduced S. 1780, the Federal 
Communications Commission Consolidated Reporting Act. In section 3 of 
that bill, I identified 24 reports for repeal and elimination. 16 of 
those reports were ones required of the FCC. Many of these required 
reports appeared to me to be contemplated during eras long since 
passed; were ones with an exceedingly narrow focus; or ones that bore 
little relevance to today's communications marketplace. Have you had 
the opportunity to review the FCC reports that were identified in S. 
1780? Would you take issue with any of the recommended deletions?
    Answer. As you note, many of the reports you mention are mandates 
from Congress. If Congress chooses to amend the Communications Act and 
no longer require those reports, I expect the Commission will 
faithfully comply.

    Question 13. Notwithstanding my desire to leave the FCC of its 
reporting burden, S. 1780 calls for the FCC to provide a Report to 
Congress with respect to the state of the communications marketplace, 
covering such matters as competition in broadband deployment and 
barriers to the competitive marketplace. The FCC is currently required 
to do many of these narrowly focused reports, but it seems to me that 
what we lack is anything like a comprehensive look at the totality of 
the marketplace at regular intervals. My thought was that this should 
be done every two years. What is your opinion of such a proposal? I 
believe that both the FCC and Congress would benefit from such a 
Report.
    Answer. The Commission already covers competition in broadband 
deployment and barriers to a competitive marketplace in a number of 
Congressionally mandated reports such as the triennial Section 257 
Reports, and the annual Mobile Service Competition Reports. Depending 
on the details of the mandate, a report that looks at the totality of 
the marketplace could prove useful. I expect the Commission will 
faithfully comply with any mandate from Congress.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Inouye to 
                        Hon. Jessica Rosenworcel
Media Ownership by Women and People of Color
    Question 1. Are you satisfied with the level of media ownership by 
women and people of color today? If not, I would appreciate your 
suggestions on how media ownership by women and people of color can be 
improved. What role can the FCC play to encourage greater media 
ownership opportunities for women and people of color?
    Answer. According to the Commission staff, data from 2009 indicate 
that 2.1 percent of the 1349 full-power television stations are 
minority owned. According to a study from Santa Clara University based 
on data from 2007 examining the ownership of II, 249 AM and FM full-
power commercial stations, 7.24 percent are minority owned. The most 
widely cited data from 2006 and 2007 suggest that women own 4.97 
percent of commercial television stations and 6 percent of full-power 
commercial radio stations.
    These numbers paint a troubling picture. But they also suggest that 
the Commission needs more recent data to better understand trends in 
ownership. As a result, I support the agency's ongoing efforts to 
update its ownership numbers in the Form 323 process. I believe that 
good data should inform our efforts on this front, and right now we 
lack current numbers and analysis that will support the development of 
legally sustainable policy.
    However, as a general matter, I believe that the single most 
effective way to encourage greater media ownership opportunities for 
women and people of color would be to reinstate the minority tax 
certificate program. This program, which began in 1978, dramatically 
increased broadcast ownership diversity before its repeal by Congress 
in 1995. It encouraged the sale of broadcast and cable properties to 
minority-owned entities by deferring the capital gains taxes of the 
seller. While adjustments may be warranted to prevent waste and abuse, 
I believe that it is time to take a fresh look at this program and how 
it can be updated to encourage more diverse ownership of media 
properties.
Spectrum Swaps
    Question 2. Some industry representatives as well as a few Members 
of Congress have suggested that spectrum swaps are a direct and faster 
way to increase competition in the wireless . broadband market. Do you 
agree with this suggestion? What efforts are being taken or can be 
taken by the FCC to explore spectrum swaps as a way to increase 
competition in the wireless broadband market?
    Answer. I agree that spectrum swaps can provide opportunities to 
use our airwaves more efficiently. Depending on the particular spectrum 
involved, swaps may present one avenue that should be considered by the 
Commission as a means to promote both competition and effective use of 
our airwaves. Voluntary spectrum swaps in the secondary market have 
enabled many licensees to use frequency bands or serve in geographic 
locations that may be better suited for their services.
    Other types of spectrum swaps, including those involving government 
spectrum, may merit consideration if they present opportunities to 
rationalize spectrum or improve spectrum efficiency. However, history 
suggests such swaps can take a long time and may be costly. For 
instance, the spectrum swap involving Nextel Communications and the 800 
MHz band began in 2004. It is still underway. There have been 
difficulties with relocating government and other incumbent users, and 
the transition has taken much longer and has been much more expensive 
than originally anticipated.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. John F. Kerry to 
                        Hon. Jessica Rosenworcel
Updating the Law
    Question 1. The FCC has a wireless bureau, a wireline bureau, and a 
media bureau. Given that all three operate in a broadband world, should 
we have a broadband bureau at the agency that either incorporates these 
three separate bureaus or helps us understand the state of broadband 
competition and define and eliminate duplicative bureau functions?
    Answer. The Commission's existing organization largely matches the 
structure of the Communications Act. In other words, the silos that 
have come to characterize the law have their parallels in the agency 
Bureaus. But as you acknowledge, a variety of communications 
technologies now provide broadband service. In many markets these 
technologies compete with one another. But I do not believe that it 
necessarily follows that a single Bureau devoted to broadband would 
improve policy development. The expertise in each Bureau is substantial 
from engineering to network economics to legal authority-and it is 
important to incorporate this knowledge to facilitate good decision-
making.
    Nonetheless, I recognize that thinking across disciplines has 
value. For this reason, I would support an agency task force to ensure 
that broadband decisions across technologies are reasonably harmonized 
and to prevent duplication of efforts. I also think it would be prudent 
to direct such a group to update in a streamlined way some of the major 
objectives of the National Broadband Plan.

    Question 2. The 1992 Act is 20 years old this year, and the 1996 
Act is entering its late teens. Should we update these laws and if so, 
using what set of principles?
    Answer. Communications technology changes at a blistering pace. It 
is a challenge for both legislators and regulators to keep up with the 
evolution of our markets and the expanding range of services used by 
consumers and businesses. Inevitably, laws that are more than a decade 
old can feel dated-and may not reflect the evolution of technology.
    The challenge, however, is to consider what comes next. While 
consensus may exist for the need to update the Communications Act, 
consensus on how to do this is more elusive. In this environment, I 
believe that the proper starting point is identifying the essential 
values in existing law.
    For my part, I believe that four key elements should anchor this 
conversation. First, public safety is critical. Second, universal 
service helps ensure that everyone in this country, no matter who they 
are and where they live, has access to communications services that are 
an important part of opportunity in the digital age. Third, competition 
delivers innovative services and promotes investment. Fourth, consumer 
protection is essential.
    Rebuilding the law around these principles is not simple, however. 
In addition, it is not easy to migrate existing stakeholders from the 
current system to a wholly new framework. Because dislocation has 
consequences for both businesses and consumers, I believe that a 
sweeping new law could be a positive force-but also a destabilizing 
one. As a result, while a longer-term conversation starts regarding the 
rewrite of the Communications Act, a shorter-term discussion about 
smaller fixes would be beneficial. To this end, I believe agency 
deliberations would benefit from reform of the Government in the 
Sunshine Act. I also believe that additional resources for engineering 
to speed the certification of wireless devices would expedite the 
delivery of new and innovative services in the marketplace. Finally, I 
believe that expanding the role of Administrative Law Judges at the 
agency merits consideration. This could result in swifter resolution of 
disputes, which in time could yield both more certainty and more 
investment.
Spectrum
    Cisco's U.S. mobile data forecast projects that the volume of data 
traffic on mobile service provider networks will increase 16 times from 
2011 to 2016. With that kind of demand for space in our airwaves for 
wireless broadband, the Commission should be making every effort to 
make as much existing spectrum as usable as possible quickly.

    Question 3. What are the prospects for Federal and private users to 
share the spectrum that agencies currently hold without disrupting 
vital public services and what can we do to speed up the process?
    Answer. The demand for mobile broadband is growing at a 
breathtaking pace. As a result, it is vitally important that we find 
new and innovative ways to manage our spectrum resources. These efforts 
will need to include incentive auctions, sharing, and an ongoing effort 
to identify new and innovative ways to meet the increased pressures on 
our airwaves.
    With passage of the Middle Class Tax Relief and Job Creation Act, 
the Commission has incentive auction authority, which will permit it to 
encourage existing licensees to return underutilized airwaves in 
exchange for a portion of the auction proceeds. This will facilitate 
putting more of our spectrum resources into use for new mobile 
broadband services.
    I support efforts to promote sharing of Federal spectrum with 
commercial users where doing so provides protection for critical 
Federal services that make use of our airwaves. To this end, I am 
encouraged by government and industry efforts to develop opportunities 
for sharing of Federal spectrum with commercial licensees in the 1755-
1850 MHz band. This is an exciting development that could become a 
model for additional sharing opportunities. Furthermore, I am intrigued 
by the recent report on spectrum sharing from the President's Council 
of Advisors on Science and Technology. While not all the ideas in this 
report have been met with enthusiasm from commercial licensees, the 
concept of expanding sharing across all Federal users merits further 
consideration. In particular, I believe that the recommendation to 
develop expanded geolocation databases to facilitate access to spectrum 
could speed the development of sharing. The information in these 
databases could provide a framework that would foster additional 
investment in cognitive and sensing technologies that over time would 
increase the viability of sharing, provide greater protection for 
existing Federal users, and promote more efficient use of our airwaves.
    Finally, we must think creatively. While past efforts to reclaim 
spectrum from Federal users have involved the stick, I think going 
forward we should explore the carrot. Today, the Commercial Spectrum 
Enhancement Act provides funding to Federal users for relocation when 
their airwaves are reallocated for commercial use. It also provides 
upfront funding for planning. What is missing is a series of clear 
incentives. To this end, I believe we should explore ways to 
financially reward Federal authorities for efficient use of their 
spectrum resource. As a related matter, I am intrigued by the 
recommendation of the President's Council of Advisors on Science and 
Technology regarding development of a synthetic currency for Federal 
spectrum use. This kind of accounting system might provide a clearer 
picture of existing Federal demands on our airwaves. Moreover, it could 
be used for the basis of developing a system that rewards Federal 
agencies when they return underutilized spectrum, perhaps through an 
increase in their budget.

    Question 4. As space on the airwaves becomes increasingly 
congested, how will the FCC better arbitrate interference disputes 
between neighboring services in the future?
    Answer. Radio spectrum is a scarce but valuable resource. The 
demands placed on it are only going to grow over time. Reducing harmful 
interference is an essential part of making more efficient and more 
reliable use of our limited spectrum resource. To this end, the 
Commission may want to consider more clearly defining what constitutes 
``harmful interference.'' At the same time, I am aware that adding 
additional detail to this concept could result in rigid application 
over time, denying necessary flexibility and stifling the ability to 
innovate.
    In addition, the Commission should consider the role receivers play 
in spectral efficiency and interference. Currently, the agency attempts 
to limit interference through rules that prohibit transmitters from 
emitting excessive energy into spectrum allocated for other services. 
This approach depends on the private sector to manufacture receivers 
that comply with those technical parameters. Service providers can then 
alert the Commission when a receiver is being overloaded. However, I 
believe that this issue merits a fresh look. Accordingly, I support the 
efforts of the Commission's Technological Advisory Council, which has 
been exploring these issues. The Commission staff also held a workshop 
on spectrum efficiency and receivers on March 12, 2012. Finally, the 
recent spectrum report from the President's Council of Advisors on 
Science and Technology recommends a flexible approach to receiver 
management in order to increase spectral efficiency without harming 
functionality.

    Question 5. Can you talk about the priority that the Commission 
places (or that you will place) on ensuring that there is an 
appropriate mix of spectrum coming to market both for auctions and for 
such unlicensed use?
    Answer. I believe that good spectrum policy requires a mix of 
licensed and unlicensed services. Licensed services provide reliability 
and interference protection. Unlicensed services can stimulate 
innovation because they have low barriers to entry. They can also 
assist with network congestion and facilitate rural deployment.
    It has been more than a quarter of a century since the Commission 
first designated specific bands for unlicensed use. In that time, a 
wide range of devices using unlicensed spectrum-from garage door 
openers and cordless telephones to Internet services and ``hot spots''-
have changed the way we live and work. Going forward, the potential for 
unlicensed use is even greater. Already, use of the 2.4 GHz band for 
Wi-Fi has dramatically changed the way we use wireless networking and 
access the Internet.
    More recently, in the Middle Class Tax Relief and Job Creation Act, 
Congress provided the Commission with authority to develop band plans 
with guard bands in the broadcast television spectrum following an 
incentive auction. While such bands are limited to a size technically 
reasonable to prevent harmful interference to adjacent licensed uses, 
they are also permitted under the law to allow for unlicensed use 
within the guard bands. As the Commission develops band plans in the 
aftermath of its incentive auction of the broadcast television 
spectrum, it should keep in mind the power of unlicensed applications 
to stimulate the development of innovative new devices and grow our 
economy.
    In the same legislation, Congress directed the Commission to 
conduct a rulemaking concerning unlicensed use in the 5350-5470 MHz 
band. Furthermore, it directed the National Telecommunications and 
Information Administration to study the impact on Federal users of 
making both the 5350-5470 MHz band and 5850-5925 MHz band unlicensed. 
Exploring these further opportunities for unlicensed use is the right 
thing to do. I fully support it.
Privacy
    The FCC recently concluded an investigation into the Google Wi-Fi 
data collection incident where the agency found that Google's actions 
did not violate section 705 of the Communications Act due to the fact 
that the incident occurred on unencrypted Wi-Fi, rather than a secured 
network.

    Question 6. In light of the result of this investigation, do you 
believe that Congress should update section 705 to account for this gap 
in the FCC's wiretap provisions?
    Answer. I find the collection of payload data that this 
investigation revealed very troubling. Section 705(a) of the 
Communications Act prohibits unauthorized publication or use of 
communications. In critical part, it prevents any unauthorized person 
from ``intercept[ing] any radio communications and divulge[ing] or 
publishing[ing]'' the communications to anyone else. While the agency's 
Enforcement Bureau found that an employee at Google knowingly collected 
Wi-Fi payload data between 2007 and 2010, it decided not to take 
enforcement action against Google under section 705(a) because the data 
was unencrypted. Yet it seems troubling that user activities in our own 
homes must be encrypted in order to be protected under the law. If 
Congress updates the law, I would faithfully follow the direction in 
any new statute.
Interoperability
    Interoperability of consumer devices within a spectrum band helps 
promote competition in wireless services. Since the early 1980s, the 
Commission has adopted rules or sent strong messages that it expects 
wireless service licensees to offer consumers equipment that can 
operate over the entire range of an allocated spectrum band. But 
interoperability does not yet exist in perhaps the most valuable 
spectrum bands the FCC has ever allocated--the lower 700 MHz band. In 
March, the FCC initiated a proceeding to promote interoperability in 
this band. I noticed that the NPRM would prefer that the industry 
propose a voluntary solution, as would I, but you also indicated an 
interest in moving to rules if that voluntary approach is unsuccessful.

    Question 7. Do you believe interoperability of devices within this 
band matters, what is the FCC staff doing to monitor the efforts of the 
industry at arriving at a voluntary solution for the lower 700 MHz 
band, and how much more time do you believe the industry should have 
before you would push to conclude this proceeding and adopt rules if it 
appears that an industry solution is not possible?
    Answer. Interoperability is an essential component of a diverse 
communications system. I am pleased that Commission staff has been 
actively monitoring the work of the industry standard setting bodies to 
address interference-related concerns.
    As a related matter, on March 21, 2012, the Commission adopted a 
Notice of Proposed Rulemaking to evaluate whether or not 
interoperability in the lower 700 MHz band will cause interference for 
licensees and to explore next steps. The record developed in response 
to this proceeding just closed on July 16, 2012. I am examining this 
record carefully and will make sure that my office is open for 
discussion with all relevant stakeholders. If progress is not being 
made on a voluntary basis, however, I would be willing to explore what 
further actions the Commission could take to promote interoperability 
in a timely fashion. If an agency decision completing this proceeding 
is presented before my office by the Chairman, I would vote it 
expeditiously.
Public Broadcasting
    As a long-time supporter of public broadcasting, I believe that it 
plays a special and necessary role in our media landscape. I was 
pleased to see that on November 4, 2011 the FCC Consumer Advisory 
Committee adopted a recommendation that the FCC work with the 
Administration and Congress to support continued Federal funding of the 
Corporation for Public Broadcasting and local public broadcast 
stations, including those providing service to rural, tribal, native, 
and disability communities.

    Question 8. Do you support this recommendation from the FCC 
Consumer Advisory Committee and can you share your views on the unique 
and necessary role that public broadcasting plays in our media 
landscape?
    Answer. I agree that public broadcasting is a vital part of our 
media landscape. I also support continued Federal funding of the 
Corporation for Public Broadcasting. As the Commission's Consumer 
Advisory Committee noted, ``[a] loss or significant reduction of 
Federal funds to [the Corporation for Public Broadcasting] would 
impact--negatively and dramatically--all currently funded stations'' 
and while ``[s]uch impacts would be of nationwide scope,'' they would 
be ``particularly acute in rural, tribal, native, and disability 
communities.''
The U.N. and International Negotiations on Internet Governance
    As former Congressman Boucher recently explained, ``The best way to 
understand the current system of global Internet governance is as a 
hub-and-spoke relationship. At the hub, a loose confederation of 
standards-setting bodies ensures the Internet's continued stability and 
functionality. Little, if any, regulation occurs at the hub. This 
arrangement leaves tremendous leeway for the sovereign governments--the 
``spokes''--to regulate the Internet within their borders.''
    And that system has worked relatively well, with some unfortunate 
outliers trying to control their population's access to information. 
Yet, there is pressure abroad for a new U.N. agency to assert 
international governmental control over the Internet. That pressure is 
coming from countries who wish to impose new tolls on service and 
countries that fear the power of open discourse on the Internet.

    Question 9. In a recent blog post, NTIA Administrator Strickling 
wrote about these proposals from China and others, ``This is contrary 
to President Obama's vision of an Internet that is interoperable the 
world over, and the United States will vigorously oppose such 
barriers.'' And I know that this is a priority for Ambassador Philip 
Verveer and the State Department as well. Do all of you share the 
Administration's point of view?
    Answer. I unequivocally share the Administration's goal of 
maintaining an open and interconnected global Internet. The multi-
stakeholder approach to governance has allowed the Internet to develop 
into a successful platform for innovation, democracy, access to 
information, and scientific progress. I therefore support the 
Administration in its efforts to resist attempts to use the World 
Conference on International Telecommunications (WCIT) to centralize 
control of the Internet within the International Telecommunications 
Union. To this end, I support the August 2, 2012 submission of the 
Department of State to the International Telecommunications Union, 
which represents the first set of proposals of the United States for 
the upcoming WCIT. Moreover, last week at the Asia Pacific Economic 
Cooperation telecommunications ministerial meeting in St. Petersburg, I 
represented the United States with Ambassador Verveer and Ambassador 
Kramer in a series of bilateral meetings with other nations to develop 
international support for our WCIT submission.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Mark Pryor to 
                        Hon. Jessica Rosenworcel
CVAA
    The 21st Century Communications and Video Accessibility Act (CVAA) 
was enacted to update the media and communications accessibility 
requirements and expand access to current and emerging technologies.
    I have heard concerns about the population of the statutorily 
required advisory committees and the resulting recommendations. 
Consumer and advocacy groups that serve on these committees face 
technical and legal capacity constraints that many businesses do not.

    Question 1. Will you be cognizant of these inherent limitations and 
keep them in mind as you consider the recommendations put forth by the 
advisory committees?
    Answer. Yes. I fully understand and appreciate that consumer and 
advocacy groups that serve on these committees may face technical, 
legal, and financial restraints that their business counterparts do 
not. However, to date, Commission staff that works with these advisory 
committees report that consumer and advocacy groups have played a 
significant role in the Video Programming Access Advisory Committee and 
the Emergency Access Advisory Committee, both of which are statutorily-
required by the 21st Century Communications and Video Accessibility 
Act. In particular, the Video Programming Access Advisory Committee 
provided vital input that informed the agency's work on IP captioning. 
In addition, the Emergency Access Advisory Committee has put forth a 
resolution on texting to 911 that merits further consideration. This 
latter committee also has discussed seeking to be rechartered for an 
additional year. I would support such an extension. Going forward, I 
commit to working with all stakeholders, including consumer and 
advocacy groups, to see that the implementation of the 21st Century 
Communications and Video Accessibility Act continues to expand access 
to modem communications technologies for all consumers.

    Question 2. It is my understanding that the Commission will soon 
consider the Advanced Communications Services provisions of the CVAA. 
How does the Commission plan to ensure that video conferencing services 
used by consumers who are deaf or hard of hearing are interoperable 
with each other?
    Answer. Video conferencing services are an important communications 
technology for consumers who are deaf or hard of hearing. On October 7, 
2011, the Commission released a rulemaking that included a request for 
comment on the definition of ``interoperable video conferencing 
services.'' This record is currently under review. As the Commission 
continues to implement the Advanced Communications Services provisions 
of the 21st Century Communications and Video Accessibility Act, I will 
strive to consider carefully how the authority provided to the agency 
under the law could help ensure that video conferencing services used 
by consumers who are deaf or hard of hearing are interoperable.
700 MHz Spectrum
    It is my understanding that the Commission has initiated a Notice 
of Proposed Rulemaking regarding interoperability in the lower 700 MHz 
band.

    Question 3. Does the Commission anticipate the completion of this 
proceeding before the end of the year?
    Answer. Interoperability is an essential component of a diverse 
communications system. I am pleased that Commission staff has been 
actively monitoring the work of industry standard-setting bodies to 
address interference-related concerns.
    As a related matter, on March 21, 2012, the Commission adopted a 
Notice of Proposed Rulemaking to evaluate whether or not 
interoperability in the lower 700 MHz band will cause interference for 
licensees and to explore potential next steps. The record developed in 
response to this proceeding just closed on July 16, 2012. I am 
examining this record carefully and will make sure that my office is 
open for discussion with all relevant stakeholders. If progress is not 
being made on a voluntary basis, however, I would be willing to explore 
what further actions the Commission could take to promote 
interoperability in a timely fashion. If an agency decision completing 
this proceeding is presented before my office by the Chairman, I would 
vote it expeditiously.
Low Power Television
    For many years, Class A and Low Power Television Service (LPTV) 
stations have provided valued local, religious, Spanish language, and 
other programming. Communities have come to rely on this niche 
programming that may not otherwise be available.

    Question 4. How will the Commission work to ensure the viability of 
Class A and LPTV during its implementation of the Middle Class Tax 
Relief and Job Creation Act?
    Answer. Class A and low-power television broadcasters can provide 
important services to their communities. They often offer truly local 
programming options that are not available elsewhere on the proverbial 
television dial. As you note, these stations also historically have 
provided unique programming for niche audiences.
    In the Middle Class Tax Relief and Job Creation Act, Congress 
directed the Commission to conduct incentive auctions and, as 
necessary, subject to a specific series of conditions, repack 
television broadcast licensees. Note that the law expressly defines 
Class A television licensees as broadcast television licensees and 
therefore provides them with rights comparable to full-power stations 
in the incentive auction process. However, Section 6403(b)(5) of the 
Middle Class Tax Relief and Job Creation Act expressly states that it 
does not alter the spectrum usage rights of low-power television 
stations. In crafting rules for incentive auctions and developing 
processes for repacking, the Commission must be faithful to the 
direction it received from Congress.

    Question 5. What is your position on mandatory channel sharing for 
LPTV?
    Answer. Channel sharing can offer a number of benefits for 
broadcasters. For instance, by sharing channels broadcasters can retain 
separate licenses and call signs, but can save costs by using the same 
facilities. These advantages can be especially important for low-power 
stations that can allow them to use their resources to provide better 
programming for their viewers. I believe that channel sharing should be 
an option for broadcasters. I recognize that a voluntary approach is 
preferable. At the same time, the Commission ultimately must abide by 
Section 6403(b)(5) of the Middle Class Tax Relief and Job Creation Act 
which expressly states that the law does not alter the existing 
spectrum usage rights of low-power television licensees.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Claire McCaskill to 
                        Hon. Jessica Rosenworcel
    Last year, I raised concerns with the FCC regarding the Universal 
Service Fund's (USF) Lifeline Program. In response to these concerns, 
the Commission has taken steps to crack down on waste, fraud and abuse 
within the program. The recent announcement that 20,500 letters will be 
sent in Missouri to eliminate duplication was welcome news. The 
implementation of a database to help detect and prevent duplicates is 
an important tool, but I remain concerned that further action needs to 
be taken to address fraud.

    Question 1. Has the FCC conducted its own investigation into 
possible fraud occurring within the Lifeline program, and if so what 
were the findings of that investigation?
    Answer. I fully support the actions that the Commission has taken 
to prevent duplicates in the universal service Lifeline program. 
However, I am not privy to nor authorized to comment on ongoing 
investigation by the agency's Office of Inspector General. To the 
extent that investigation is ongoing, I commit to carefully reviewing 
any materials that the Office of Inspector General shares with my 
office. Furthermore, I will support continued efforts of the agency to 
detect and eliminate waste, fraud, and abuse within the Lifeline 
program.

    Question 2. Has the Commission examined the marketing agreements 
providers are using to advertise Lifeline products to consumers?
    Answer. Yes. Before my tenure, on February 6, 2012, the Commission 
released an Order increasing provider accountability within the 
Lifeline Program. This decision required providers of Lifeline-
supported services to include plain, easy-to-understand language in all 
of their Lifeline marketing materials that the offering is a Lifeline-
supported service; that Lifeline is a government assistance program; 
that only eligible consumers may enroll in the program; that specific 
documentation is necessary for enrollment; and that the program is 
limited to one benefit per household, consisting of either wireline or 
wireless service. I support this effort. I also believe that the 
Commission should periodically review these rules to ensure that they 
are effective.

    Question 3. As required by the Commercial Advertisement Loudness 
Mitigation (CALM) Act, the FCC published an order last December 
outlining practices that networks and cable stations must implement by 
this December. I understand these rules have not yet been published in 
the Federal Register, and I have heard little about progress since 
December. Are we on track to see this legislation--strongly supported 
by consumers--fully implemented by the end of the year?
    Answer. Work is being done to ensure that rules relating to the 
Commercial Advertisement Loudness Mitigation (CALM) Act will be fully 
in effect by the end of the year. On July 9, 2012, the rules necessary 
to implement the CALM Act were published in the Federal Register. In 
addition, the Office of Management and Budget recently approved the 
rules, eliminating any implementation obstacles under the Paperwork 
Reduction Act. Consequently, the Commission is on course to have its 
CALM rules in effect on December 13, 2012. I understand that in 
industry efforts are underway right now to ensure compliance by this 
date.

    Question 4. In December, the International Telecommunication Union 
(ITU) will convene the World Conference on International 
Telecommunications (WCIT-12) in Dubai to renegotiate the International 
Telecommunication Regulations. A key topic of discussion is expected to 
be whether and how to expand it to cover the Internet. To what extent 
is the FCC involved in policy and technical discussions in advance of 
the ITU meeting?
    Answer. The Commission has primary responsibility for implementing 
the 1988 International Telecommunications Regulations. Because these 
regulations have been accepted as a framework for negotiations at the 
World Conference on International Telecommunications in Dubai (WCIT), 
the agency is participating in both domestic and international 
preparations for the Conference. To this end, I support the August 2, 
2012 submission of the Department of State to the International 
Telecommunications Union, which represents the first set of proposals 
of the United States for the upcoming WCIT. Moreover, last week at the 
Asia Pacific Economic Cooperation telecommunications ministerial 
meeting in St. Petersburg, I represented the United States with 
Ambassador Verveer and Ambassador Kramer in a series of bilateral 
meetings with other nations to develop international support for our 
WCIT submission.

    Question 5. What is the view of the Commission on proposals by 
other nations to move oversight of critical Internet resources, such as 
naming and numbering authority, to the ITU or other international body?
    Answer. I unequivocally share the Administration's goal of 
maintaining an open and interconnected global Internet. The multi-
stakeholder approach to governance has allowed the Internet to develop 
into a successful platform for innovation, democracy, access to 
information, and scientific progress. Consequently, I support the 
Administration in its efforts to resist attempts to use the WCIT to 
centralize control of the Internet within the ITU on a range of issues, 
including naming and numbering authority. As noted above, last week at 
the Asia Pacific Economic Cooperation telecommunications ministerial 
meeting in St. Petersburg, I represented the United States with 
Ambassador Verveer and Ambassador Kramer in a series of bilateral 
meetings with other nations to develop international support for our 
position in advance of the WCIT meeting in Dubai.

    Question 6. American companies have had an historical advantage 
when it comes to the Internet because the innovation that has fueled 
the growth of the Internet started here. Companies were created in an 
environment where unconstrained Internet access provided them with a 
platform to succeed. In this way, America had a ``strategic bandwidth 
advantage'' over other countries. It was perhaps inevitable that this 
advantage would narrow, as broadband speeds have improved around the 
world. Given that context: Is it your view that this ``strategic 
bandwidth advantage'' has led and will continue to lead to job creation 
and greater innovation?
    Answer. Yes. I believe that the United States has been a global 
leader in innovation and the deployment of new technologies and 
services. For example, today, the United States has more than 60 
percent of the world's 4G LTE subscribers. These next-generation 
networks are projected to add $151 billion in GDP growth over the next 
four years, creating roughly 770,000 new American jobs. Continued 
investment in next-generation networks, both mobile and wired, is 
essential to the long-term health of our economy, and our ability to 
remain competitive and facilitate continued job creation and wage 
growth. Moreover, next-generation networks are a key platform for 
innovation in the United States.

    Question 7. There has been bipartisan consensus in this body to 
encourage deployment and adoption of broadband for the economic and 
social benefits it brings. How do data caps help or hinder in 
accomplishing that goal?
    Answer. This is a question that merits further study. On the one 
hand, if data caps are transparent and address real network capacity 
concerns, they can be a legitimate tool to manage congestion. 
Furthermore, I am not adverse to the idea that those who use more 
network capacity pay more. On the other hand, if these caps are set 
simply to generate fees for exceeding the limits, this can reduce 
incentives for robust broadband deployment. Given the increasing use of 
data caps by broadband service providers, I support the Commission's 
efforts to seek comment on broadband capacity issues in its recent 
Notice of Inquiry pursuant to Section 706 of the Telecommunications Act 
of 1996. The information provided in response to this inquiry will 
inform the Commission's upcoming annual report on broadband deployment 
progress.

    Question 8. On the surface, usage-based billing makes sense for 
consumers but I am concerned about the chilling effect data caps could 
have on future growth of Internet video and other content. How do we 
ensure fair billing practices for consumers without creating a system 
that stifles innovation and growth of the Internet?
    Answer. This is a legitimate concern. I believe that many consumers 
are not familiar with how common activities online, including video 
streaming, may cause them to quickly reach or exceed their data caps. 
In light of this, more consumer education is necessary, and optimally 
would be coupled with tools that allow consumers to easily track their 
data usage. At the same time, the Commission must review the record 
that results from its recent Notice of Inquiry pursuant to Section 706 
of the Tel communications Act of 1996 to better understand how data 
caps operate and their impact on innovation and growth of the Internet.

    Question 9. I am sure you would acknowledge the FCC's long-standing 
support of low power television and appreciate the success of low power 
TV since the FCC created the service in 1982. During this span of 30 
years you. arc no doubt aware that low power TV has developed into an 
essential source of information and entertainment for many diverse 
communities across the country. I think two perfect examples of this 
dynamic would be the audiences who enjoy Spanish-language programming 
and those who enjoy religious programming. Likewise, LPTV has been the 
an entry point for small businesses into the broadcast market and 
today, many LPTV owners are small businessmen who work hard to continue 
to serve their local communities with news and resources aimed at the 
community.
    With this in mind, and also considering the likely end to a great 
deal of low power programming as a result of the repacking, how do you 
expect that this approaching void in unique programming will be filled 
with respect to the core missions of diversity and localism?
    Answer. Low-power television broadcasters can provide important 
services to their communities. They can offer truly local and unique 
programming options that are not available elsewhere on the proverbial 
television dial. As you note, these stations also historically have 
been an important entry point for small businesses seeking to gain a 
toehold in the broadcasting market.
    In the Middle Class Tax Relief and Job Creation Act, Congress 
directed the Commission to conduct incentive auctions and, as necessary 
and, subject to a specific series of conditions, repack television 
broadcast licensees. Section 6403(b)(5) of this law expressly states 
that it does not alter the spectrum usage rights of low-power 
television stations. I am aware of the value that low-power television 
stations have provided viewers across the country and will strive to 
faithfully implement the law.

    Question 10. I would ask each of the commissioners, will you 
support rules that allow LPTV to survive after the repack?
    Answer. As discussed above, Section 6403(b)(5) of the Middle Class 
Tax Relief and Job Creation Act expressly states that it does not alter 
the spectrum usage rights of low-power television stations. In crafting 
rules for incentive auctions and developing processes for repacking, 
the Commission must be faithful to the direction it received from 
Congress.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Amy Klobuchar to 
                        Hon. Jessica Rosenworcel
    As I brought up in the FCC nominations hearing in November, we have 
a population of television stations currently operating on the northern 
border of Canada, particularly in Lake of the Woods County. They 
applied for channel reallocation after the DTV transition but had to 
wait years to get final approval from the Canadian government and the 
FCC this January.

    Question 1. Looking ahead to the future, the need for international 
cooperation when it comes to spectrum is important to our translator 
operators on the northern border. Has the Commission begun coordination 
with our Canadian counterparts as it relates to incentive auction 
legislation passed in February?
    Answer. The United States has had a long and successful history of 
close cooperation on the use of radio spectrum along the border with 
Canada. It is my understanding, based on public statements by the 
Chairman, that coordination with Canada on our incentive auction 
process is already underway.

    Question 2. I believe of one of the most impressive programs the 
FCC operates is the E-Rate program supporting communications technology 
in schools and libraries. Senator Rockefeller and Senator Snowe led the 
effort in creating a program that truly benefits schools and kids 
around the country. Minnesota has received a total of $344 million 
since the E-Rate program started in 1998. This support has enabled 
schools and libraries across rural Minnesota to have telecommunications 
and broadband service giving students the ability to enhance their 
education. I understand that with the increase in demand from schools 
for broadband support, E-Rate program resources are stretched thin, 
including staff time to review and audit applications. Will you commit 
to keeping the resources for administering the E-Rate program targeted 
at the intended focus of connecting schools and libraries with 
communication technologies?
    Answer. Yes. The E-Rate program has a long record of providing low-
income and rural schools and libraries with the connectivity they need 
to help their students and patrons become digitally literate and 
capable of using communications and information technology. Year-in and 
year-out, the demand for E-Rate support has been twice as great as the 
funding available. It is a very popular-and important-program. To make 
sure that E-Rate has a bright future, the agency must regularly 
evaluate the application process to make sure that it does not 
inappropriately burden schools and libraries with limited resources, 
while still including measures to prevent waste, fraud, and abuse.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Mark Warner to 
                        Hon. Jessica Rosenworcel
    Question 1. Two years ago, the President announced his intention to 
free up 500 MHz of spectrum for wireless broadband use. This initiative 
is even more necessary today due to exploding data usage by consumers, 
which is leading to faster-than-expected capacity constraints across 
the country. Are you satisfied with the current pace of the 
identification and reallocation of spectrum to commercial broadband 
use? If not, why not?
    Answer. The work done so far to identify and reallocate spectrum 
has been a good start, but additional effort is required. The evidence 
is all around us. It is more than just the proliferation of smart 
phones and tablet computers. Within the next decade, machine to machine 
devices may number as high as 50 billion.
    This is an extraordinary challenge. To meet it will require effort 
on multiple fronts-at the same time. With passage of the Middle Class 
Tax Relief and Job Creation Act, the Commission has incentive auction 
authority, which will permit it to encourage existing licensees to 
return underutilized airwaves in exchange for a portion of the auction 
proceeds. This will facilitate putting more of our spectrum resources 
into use for new mobile broadband services.
    I also believe we will need to consider new ways of sharing of 
Federal spectrum with commercial users where doing so provides 
protection for critical Federal services that make use of our airwaves. 
To this end, I am encouraged by government and industry efforts to 
develop opportunities for sharing of Federal spectrum with commercial 
licensees in the 1755-1850 MHz band. Furthermore, I am intrigued by the 
recent report on spectrum sharing from the President's Council of 
Advisors on Science and Technology. While not all the ideas in this 
report have been met with enthusiasm from commercial licensees, the 
concept of expanding sharing across all Federal spectrum merits further 
consideration. In particular, I believe that the recommendation to 
develop expanded geolocation databases to facilitate access to spectrum 
could speed the development of sharing.
    In addition, I believe that the information in these databases 
could help foster additional investment in cognitive and sensing 
technologies that over time would increase the viability of sharing, 
provide greater protection for existing Federal users, and promote more 
efficient use of our airwaves. The Commission also should explore what 
steps it can take to facilitate the deployment of small cells. By 
making more efficient use of existing frequencies, small cells can help 
cover geographies that larger towers may not adequately serve.

    Question 1a. Do you have additional suggestions about how Congress 
or the Federal Government could accelerate the process?
    Answer. While past efforts to reclaim spectrum from Federal users 
have involved the stick, I think going forward we should explore the 
carrot. Today, the Commercial Spectrum Enhancement Act provides funding 
to Federal users for relocation when their airwaves are reallocated for 
commercial use. It also provides upfront funding for planning. What is 
missing is a series of clear incentives. To this end, I believe we 
should explore ways to financially reward Federal authorities for 
efficient use of their spectrum resource. To this end, I am intrigued 
by the recommendation of the President's Council of Advisors on Science 
and Technology regarding development of a synthetic currency for 
Federal spectrum use. I believe this kind of accounting system might 
provide a clearer picture of existing Federal demands on our airwaves. 
Moreover, it could be used for the basis of developing a system that 
rewards Federal agencies when they return underutilized spectrum, 
perhaps through an increase in their budget.

    Question 2. The USF reforms--which I supported--seek to deploy more 
mobile and fixed broadband services to rural and underserved America. 
At the same time, mobile data forecasts indicate that the volume of 
data traffic on mobile service provider networks will increase 16 times 
from 2011 to 2016. Rural Virginia wants to be part of the broadband 
economy, however, high quality broadband service just hasn't been 
available where consumers and rural economic development needs demand 
it. What would happen to the pace of rural broadband deployment if 
Universal Service Fund Reforms are blocked or slowed down at this time? 
Why is it important to move forward in terms of leveraging existing 
Federal funding to deploy more broadband to rural and underserved 
America?
    Answer. I believe that all Americans, whoever they are, wherever 
they live, should have access to first-rate communications services. In 
the past, the Commission's high-cost universal service program has 
focused on the delivery of voice telephony to every community in this 
country. Going forward, as a result of the Commission's recent 
universal service reforms, the goal is the delivery of wired and 
wireless services, both voice and broadband, to all Americans.
    This is a good development. Today, as many as 19 million Americans 
have no broadband service available. The reform framework developed by 
the agency, which predates my arrival at the Commission, is designed to 
provide additional support to carriers serving in these areas that 
presently lack broadband and wireless service. At the same time, it is 
designed to provide a predictable path forward for carriers that have 
historically relied on support from the high-cost universal service 
fund for voice service. Furthermore, it is designed to accomplish these 
things while leveraging existing deployments and staying within a 
budget of roughly $4.5 billion annually.
    This is a complex process, and there are many details subject to 
dispute by stakeholders dependent on the former system of support. 
These details will require continued assessment and review by the 
agency. But at a high level, it is reform that is worth pursuing. 
Making sure that broadband and wireless services are available 
everywhere in this country is an essential part of making sure that the 
opportunity for prosperity in the 21st century reaches all of our 
communities. I fear that if these reforms are substantially set back, 
as many as 19 million Americans may be put at risk, without access to 
the networks necessary for modern commerce and civic life.

    Question 2a. I sent a letter to the FCC in 2011 arguing that 
although 4 Mbps download/1 Mbps upload may be adequate for now, this 
standard should not be considered an acceptable level of service in the 
future. How important is it to you to see that the acceptable level of 
broadband service advances over time?
    Answer. I agree that the Commission's speed benchmarks for 
broadband services should not be set in stone. Broadband services and 
technologies are dynamic-and so are the ways that consumers use these 
technologies. The Commission should continue to monitor technological 
developments and consumer demand as it evaluates and sets speed 
benchmarks in the future.

    Question 3. The Commission has a number of highly anticipated open 
Notices of Proposed Rulemaking. Now that the Commission has five highly 
capable commissioners, how soon do you expect to reach decisions on key 
issues? I would encourage you to reach decisions on important matters 
as soon as possible because the delay of long-standing rulemakings has 
caused some frustration.
    Answer. While the Chairman of the agency sets the agenda and 
determines when issues can be considered by the full Commission, I will 
strive to vote decisions in a timely way, without unnecessary delay. 
Communications is a dynamic sector in our economy, and the agency 
should, within its resources, make decisions in a way that facilitates 
investment and expedites the opportunity for consumers to benefit from 
new and innovative services. To this end, I have repeatedly called for 
the agency to establish a timeline for upcoming wireless auctions.

    Question 4. Looking back at FCC data stretching to 2005, the number 
of full-time equivalents in the Office of Engineering and Technology 
appears to have dropped from 116 to 81. Do you believe this reduction 
is the source of the backlog? Why has this office, which would seem to 
be at the heart of the Commission's work, have declined over time when 
other bureaus or offices have grown or at least stayed flat?
    Answer. I believe that the Commission would benefit from additional 
technical resources. It is my understanding that today there are less 
than 300 engineers working at the agency overall. Those that are here 
are a talented group. However, the pressures on them are substantial 
because we are entering an era in which technical issues are likely to 
come up with greater frequency.
    At the same time, it is important to consider how these individuals 
have an opportunity to contribute to the decision-making of the agency. 
To this end, I believe that the engineers could help the agency prevent 
backlogs by assisting with technical review, playing a consulting role 
in major decisions, and also contributing to idea generation and policy 
development within the agency. In addition, the experts in the Office 
of Engineering and Technology should be freely available to every part 
of the Commission, including the Commissioner offices.
    While I do not have information regarding past hiring practices, I 
believe the agency may be able to attract new engineering graduates by 
developing an engineering honors program similar to the attorney honors 
program it has today. The attorney honors program is a two-year 
employment and training program designed to introduce new and recent 
law school graduates to the field of communications and the law. A 
similar program for engineers could introduce young people with 
engineering backgrounds to how their technical expertise can be used to 
inform public policy at the Commission.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Mark Begich to 
                        Hon. Jessica Rosenworcel
Senator Begich Opening Statement
    Chairman Genachowski, I want to thank you for working with me 
during the FCC's recent efforts to reform the Universal Service Fund. I 
understand the need for efficiencies, and overall support the notion of 
USF reform. I also understand the FCC's efforts to work within a 
reasonable budget. However, the reality is that given Alaska's 
geography, distance from the Lower 48, and the very remote locations of 
small rural communities, all of whom must be connected to 'the grid' 
via ``middle-mile'' terrestrial, satellite or undersea fiber circuits, 
means that Alaska is very different. Our distances are greater, our 
population is smaller, and our costs are much higher, particularly as 
it relates to the very high cost of middle-mile circuits for broadband.

    I understand the Commission desire to establish capital expense and 
operating expense limits for rural rate of return carriers. And, 
whether I agree or not, I understand that your staff's recent order 
establishing what is called a ``regression analysis'' to limit expenses 
puts a limit on most small companies at their current level of capital 
and operating expenses. Thank you for revisiting the formula recently, 
however there are still some companies that will be severely impacted 
by reductions to be implemented on July 1. I understand that your staff 
is well aware that the model contains data errors and other possible 
analytic flaws.

    Question 1. Since your staff admits that these flaws exist, why 
doesn't the FCC limit the July 1 impact to the proposed limitation of 
all companies to their current level of expenses instead of 
implementing the reduction on a few when the reductions may be based on 
data errors and flaws. I know that the order limits the initial level 
of the impact and transitions in the impact, but why implement this 
reduction on a few until you know that you have it right?
    Answer. The Commission has worked to correct data errors in the 
rural carrier benchmarks quickly and efficiently through a streamlined 
waiver process. As a result, two streamlined waivers have already been 
granted, both within two weeks of filing. In addition, I understand 
that Commission staff has begun the process of gathering additional 
data from carriers directly. I support this effort. Going forward, it 
is clear that implementing the universal service reforms in the 
Commission's November 18, 2011 decision will be a complex process that 
may require additional adjustments along the way.

    Question 2. It appears highly likely that as a result of the 
November USF/ICC order many rural carriers will lose revenues--both USF 
support and from elimination of crucial intercarrier compensation. Is 
that correct?
    Answer. As a result of the reforms set forth in the decision by the 
Commission on November 18, 2011, I understand that some carriers will 
lose revenues while other carriers will gain revenues in the form of 
additional universal service support. For example, ACS recently 
accepted more than $4 million to deploy broadband to unserved areas in 
Alaska. In addition, a number of smaller, rural carriers will be 
eligible to gain additional universal service support if they fall 
below the Commission's capital and operating expense benchmarks. With 
respect to intercarrier compensation, the decision permits some of the 
lost intercarrier compensation revenue to be made up through a new 
recovery mechanism that was not previously available. This, however, is 
a process that requires constant monitoring, in order to ensure that it 
is fair, within budgetary parameters, and above all consistent with the 
law. I recognize the important role that rural carriers play in 
delivering communications services to the hardest-to-serve parts of 
this country, and I will keep this in mind as the Commission continues 
to implement its universal service reforms.

    Question 3. Alaska, like 22 other states, has a complimentary State 
level universal service program. The Alaska state fund-disburses over 
$15 million to Alaskan carriers each year. Do you anticipate these 
State funds will have to expand to cover revenue lost from the reforms 
you are implementing? And if so, have you calculated how much these 
State funds will need to grow?
    Answer. The Commission's November 18, 2011 decision anticipates 
that carriers seeking to replace lost revenues that result from 
universal service and intercarrier compensation reforms would have 
several avenues for relief: petitioning the Commission for a waiver; 
replacing lost intercarrier compensation revenue through a new end-user 
pass-through and through the Connect America Fund; petitioning the 
Commission for additional intercarrier compensation support; and 
seeking to replace lost intercarrier compensation through state 
universal service funds.
    As we continue to implement the Commission's universal service 
reforms and better understand its broader impact on all stakeholders, I 
welcome input from our State partners. In particular, I understand the 
unique challenges that carriers in Alaska face as they deploy 
communications networks in the most remote regions of the country. 
Going forward with reform, I will keep this in mind.

    Question 4. The E-Rate program has always meant a great deal to the 
State of Alaska, ensuring that the children and educators living and 
working in our state's most remote towns and villages have access to 
the Internet and distance learning and professional development courses 
that are otherwise unavailable to them locally.
    Let me quote from comments filed with the FCC last week by the 
Superintendent of the Dillingham City School District: As a small, 
rural school district in Alaska that has high poverty, low socio-
economic, and predominantly native Alaskan population (Yupik), ``I want 
to thank the FCC for our current level of E-Rate funding. We are an 
``off the road'' community, meaning the only way in and out is by air, 
dog sled, snow machine, or boat. We just recently acquired access to 
high-speed fiber Internet via GCI Corporation extending this service to 
rural, remote areas of Alaska. The cost for this more than doubled our 
annual rate and without the current E-Rate support we could not afford 
this service.'' Is there a better w1ay to administer the digital 
literacy program without damaging E-Rate processing?
    Answer. I share your concerns. I strongly believe that digital 
literacy initiatives developed by the Commission should in no ay harm 
the funding or legal foundation of E-Rate. The E-Rate program has a 
long record of providing low-income and rural schools and libraries 
with the connectivity they need to help their students and patrons 
become digitally literate and capable of using communications and 
information technology. We must ensure that it has a bright future, so 
that it can continue to help schools like those in Dillingham.
    At the same time, I recognize that digital literacy is an 
increasingly critical component of obtaining an education, searching 
for a job, developing job-related skills, accessing government 
information, and participating in civic life. Consequently, I would be 
open to looking at new ways to consider supporting digital literacy 
through public-private partnerships with broadband providers. This also 
could I include efforts through Connect2Compete, a national nonprofit 
initiative that aims to provide low-income families with school-aged 
children with free digital literacy training, low-cost computers, and 
low-cost Internet access.

    Question 5. Also wish to highlight the importance of keeping intact 
reliable source of communications to relay emergency and lifesaving 
information to those areas that lack reliable cellular or Internet 
service.
    It is imperative that rural communities continue to have reliable 
sources of communications in cases of emergency and lifesaving 
situations. Can the Commission comment on ways to improve the 
distribution of emergency alert information?
    Answer. I agree that all communities, including rural communities, 
must have reliable sources of communications in emergency situations. 
Furthermore, we should be consistently looking for ways to improve the 
distribution of this information. To this end, the Commission is 
working with Federal Emergency Management Agency and Early Alert System 
(EAS) participants to implement advances in the distribution of 
emergency information. As of June 30, 2012, EAS participants--including 
broadcasters and cable and satellite providers-must be able to accept 
EAS messages using a common messaging protocol, Common Alerting 
Protocol (CAP). CAP allows emergency alert originators to send one 
alert over multiple communications platforms, and also allows EAS 
participants to receive EAS alerts directly from the alert originators, 
including the Federal Emergency Management Agency, National Weather 
Service, and the relevant State and local governments. This 
distribution method can offer much richer alert content that can be 
more precisely targeted to reach affected populations, including those 
with disabilities and those who do not speak English.
    In addition, recent testing has shown that there are ways to 
improve implementation of the system. On November 9, 2011, the Federal 
Emergency Management Agency and the Commission collaborated on the 
first nationwide test of the EAS. The Commission is working with 
participants to address issues that were identified in the test, in 
order to further strengthen this emergency information system.

    Question 6. The due diligence work done day in and day out by local 
broadcasters will be lost if constituents can't receive it. How does 
the FCC intend to improve this?
    Answer. The Commission works with the Federal Emergency Management 
Agency and other Federal authorities with responsibility for disaster 
response, to continually improve communications with EAS participants, 
including local broadcasters. In addition to the CAP adoption discussed 
above, the Commission has implemented the Disaster Information 
Reporting System (DIRS) to improve communication with EAS participants 
during emergencies. DIRS is a voluntary web-based tool that allows 
broadcasters and other EAS participants to quickly and efficiently 
inform the Commission about their operating status and needs during 
times of crises. It provides the Commission and other agencies with 
information regarding communications status during and after a major 
emergency, and provides broadcasters and other service providers with 
ability to ask for and receive assistance, if necessary.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Olympia J. Snowe to 
                        Hon. Jessica Rosenworcel
FCC Technical Expertise
    In Chairman Genachowski's remarks, he stated the Commission is 
operating with its lowest number of employees. The FCC is also 
unfortunately operating at one of its lowest number of engineers--over 
a 60 percent reduction in engineers from the 1950s to today--yet the 
Commission is dealing with significantly more technically complex 
issues such as advanced wireless communications, commercial cable & 
satellite industries, public safety interoperability, more device 
certifications, and broadband.
    Engineers at the FCC play an essential role in regulatory matters 
by providing technical consultation on policy matters, managing 
spectrum allocations, and creating new opportunities for competitive 
technologies. I'm concerned this lack of expertise is hampering 
innovation and job growth because of the excessive delays to businesses 
that are waiting approval to technical waivers, experimental licenses, 
and filed petitions at the agency.
    Others share my concern, a 2009 Government Accountability Office 
report found that the agency ``faces challenges in ensuring it has the 
expertise needed to adapt to a changing market place.'' And 2011 
Wireless Report by the National Research Council suggested the FCC 
would benefit from ``enhancing its technology assessment and 
engineering capabilities'' due to ``entering an era in which technical 
issues are likely to arise on a sustained basis.''

    Question 1. Do you believe the FCC has the sufficient level of 
technical resources, given the concerns various entities have raised?
    Answer. The FCC would benefit from additional technical resources. 
It is my understanding that today there are less than 300 engineers 
working at the agency. They are a talented group. However, the 
pressures on them are substantial because, as the National Research 
Council suggests, we are entering an era in which technical issues are 
likely to come up with greater frequency.
    At the same time, it is important to consider how these individuals 
have an opportunity to contribute to the decision-making of the agency. 
To this end, I believe they should assist with technical review, play a 
consulting role in major decisions, and also contribute to idea 
generation and policy development within the agency. In addition, the 
experts in the Office of Engineering and Technology should be freely 
available to every part of the FCC, including the Commissioner offices.
Unlicensed Spectrum
    In your opening statement, you highlight the importance of 
incentive auctions to meeting the growing demand for wireless 
broadband. Obviously, the spectrum made available through incentive 
auctions will primarily be exclusive licenses--the recently passed 
legislation does allow unlicensed use in the guard and gap bands but it 
isn't clear how much will be available.
    As you may be aware, one concern I had about the legislation was 
its impact on unlicensed opportunities in the TV band. My belief is 
that possible such allocation would allow for a new wave of innovation 
different from but complimentary to the work in the licensed space--it 
shouldn't be an ``either-or'' scenario but an environment where both 
can thrive.
    Unlicensed use created markets for Wi-Fi, Bluetooth devices, 
cordless phones, and countless other innovations and with it hundreds 
of companies and thousands of jobs. And the consumer demand for 
unlicensed spectrum and devices is undeniable-- more than 80 percent of 
smartphone users prefer Wi-Fi over cellular for mobile data and 65 
percent of tablet users utilize Wi-Fi connections exclusively.
    In addition, over 1 billion Wi-Fi devices shipped globally in 2011, 
and by 2014, 90 percent of smartphones will be Wi-Fi enabled. The 
economic impact is also significant--a 2009 report by Perspective 
Associates estimated unlicensed applications could provide up to $37 
billion of economic benefit annually over the next 15 years to our 
economy.

    Question 2. What are your views on the role of unlicensed spectrum 
and should the FCC explore greater opportunities for unlicensed use 
outside of the traditional bands, such as 2.4 GHz and 5 GHz?
    Answer. I believe that good spectrum policy requires a mix of 
licensed and unlicensed services. Licensed services provide reliability 
and interference protection. Unlicensed services can stimulate 
innovation because they have low barriers to entry. They can also 
assist with network congestion and facilitate rural deployment.
    It has been more than a quarter of a century since the FCC first 
designated specific bands for unlicensed use. In that time, a wide 
range of devices using unlicensed spectrum--from garage door openers 
and cordless telephones to Internet services and ``hot spots''--have 
changed the way we live and work. Going forward, the potential for 
unlicensed use is even greater. Already, use of the 2.4 GHz band for 
Wi-Fi has dramatically changed the way we use wireless networking and 
access the Internet.
    More recently, in the Middle Class Tax Relief and Job Creation Act, 
Congress provided the FCC with authority to develop band plans with 
guard bands in the broadcast television spectrum following an incentive 
auction. While such bands are limited to a size technically reasonable 
to prevent harmful interference to adjacent licensed uses, they are 
also permitted under the law to allow for unlicensed use within the 
guard bands. As the FCC develops band plans in the aftermath of its 
incentive auction of the broadcast television spectrum, it should keep 
in mind the power of unlicensed applications to stimulate the 
development of innovative new devices and grow our economy.
    In the same legislation, Congress directed the FCC to conduct a 
rulemaking concerning unlicensed use in the 5350-5470 MHz band. 
Furthermore, it directed the National Telecommunications and 
Information Administration to study the impact on Federal users of 
making both the 5350-5470 MHz band and 5850-5925 MHz band unlicensed. 
Exploring these further opportunities for unlicensed use is the right 
thing to do. I fully support it.

    Question 3. Should the FCC perform a similar exercise to Ofcom, the 
U.K. regulator, in creating a report (License-Exemption Framework 
Review) that provides a framework for exploring and managing unlicensed 
use of spectrum?
    Answer. As noted above, I believe that good spectrum policy 
requires a balanced mix of licensed and unlicensed services. In our 
consideration of how best to achieve this balance, we may wish to 
consider studying the licensed and unlicensed spectrum ecosystem in 
this country in a manner similar to the framework developed by Ofcom.
Competition and Innovation
    A growing number of consumers are combing traditional media 
services with more innovative products that allow them to stream online 
content. Some products allow consumers to stream online content of all 
types and aggregate it with either free OTA broadcasts or basic cable 
service.
    The Commission is considering an order that would allow for the 
encryption of basic cable signals. While there are several benefits to 
encrypting basic cable service, there are also some concerns that 
innovative devices allowing users to combine online content with basic 
cable service may no longer be compatible without additional hardware 
or software or reduce functionality of the device, and may face 
additional monthly fees for a cable box. As you know, Congress 
specifically addresses this issue in Section 624A of the statute (47 
U.S.C. 544a), which requires the FCC to assure compatibility between 
consumer electronics equipment and cable systems so cable customers can 
enjoy the full benefits of both.

    Question 4. Is there a solution that would provide the positive 
benefits of cable encryption to cable operators while also allowing for 
IP-based devices and other innovative products that more consumers are 
purchasing to have the opportunity for success in the marketplace? Are 
there any risks to consumers of allowing innovative devices the ability 
to decrypt the basic cable signals so they can access those channels 
unencumbered by additional equipment or reduced functionality?
    Answer. Viewing habits are evolving and consumers are turning to 
new avenues to find content. The FCC's rules must address this changing 
media landscape while still allowing providers the ability to protect 
their content.
    In October 2011, the FCC began a proceeding exploring the best ways 
to balance these interests and asking whether to eliminate the rule 
prohibiting basic service tier encryption for all-digital cable 
systems. The agency proposed to allow cable operators to encrypt the 
basic service tier in all-digital systems but require any operators who 
choose this option to take steps to minimize the potential for 
disruption for their subscribers. In determining whether to implement 
these proposals, the Commission must be sure to abide by the direction 
Congress provided in Section 624A to maximize ``open competition in the 
market for all features, functions, protocols and other product and 
service options'' while also protecting ``the integrity of signals 
transmitted to the cable operator.'' At the same time, any further 
Commission action should enhance the ability of innovative products to 
reach consumers in the marketplace.
    In the meantime, device manufacturers can develop new IP-based 
devices that are consistent with existing encryption protections 
incorporating CableCARD compatibility to decrypt linear cable services. 
CableCARD technology does require a small piece of additional 
equipment, but it can also provide consumers with the benefit of new 
devices while allowing cable companies to realize the benefits of 
encryption.

    Question 5. It's my understanding that other non-cable MPVDs are 
able to encrypt all of their video signals, even basic video service. 
Should Congress revisit the statute to provide greater parity in 
regards to signal encryption?
    Answer. I believe that the FCC has adequate authority to address 
these issues under existing law, while taking into account consumer 
expectations and the need to ensure compatibility with existing 
consumer devices. However, as a matter of principle, I believe that the 
agency should always welcome additional guidance from Congress.
Universal Service Fund & E-Rate
    The National Broadband Plan and subsequent research have identified 
the lack of digital literacy among low-income Americans as a major 
barrier to broadband adoption. To address this, the Commission proposed 
implementing and operating a digital literacy program through the E-
Rate program's administrative structure. The FCC has proposed $50 
million in annual funding over a four year period and that such funds 
would be provided through saving from the restructuring of the Lifeline 
program. While I'm a strong advocate for a greater focus on improving 
digital literacy to spur broadband adoption, I'm concerned about the 
impact this proposed program will have on the E-Rate program, if it is 
administered through it.

    Question 6. I'm concerned the proposed Digital Literacy program 
will be difficult to monitor. With E-Rate, it is possible and cost-
effective to send auditors to school and library sites to ensure 
applicants have actually purchased and installed the equipment for 
which they received E-Rate support and providers have actually 
delivered promised services. By contrast, it seems it may be difficult 
for auditors to determine this proposed digital literacy initiative's 
funds have actually been spent on courses. Can you tell me how USAC 
could properly audit this digital literacy initiative?
    Answer. Digital literacy is an increasingly critical component of 
obtaining an education, searching for a job, developing job-related 
skills, accessing government information, and participating in civic 
life. While I fully support efforts to address digital literacy, I also 
share your concerns. First, I believe digital literacy initiatives 
developed by the FCC should in no way harm the funding or legal 
foundation of E-Rate. This is a program with a strong record of 
providing low-income and rural schools and libraries with the 
connectivity they need to help their students and patrons become 
digitally literate and capable of using communications and information 
technology. Second, I believe auditing is an important part of ensuring 
the effectiveness of government programs. As you note, auditing has 
improved the E-Rate program and helped ensure that providers deliver 
promised services. Accordingly, any effort to develop digital literacy 
programs will need to include measures to prevent waste, fraud, and 
abuse.
Competitive Access to Spectrum
    The ``spectrum crunch'' is not exclusive to just one or two 
carriers, it is industry wide. And while the top four carriers provide 
wireless service to 90 percent of the total subscribers in the U.S., 
more than 30 million other subscribers use someone else. As you know, 
Section 309(j)(3) of the statute (47 U.S.C. 309(j)(3)) requires 
Commission to promote ``economic opportunity and competition'' by 
``disseminating licenses among a wide variety of applicants'' including 
small businesses, rural carriers, and minority and woman-owned 
businesses.

    Question 7. How should the FCC ensure, in a fair and competitive 
manner, that all carriers--large and small--have adequate access to 
this critical but finite resource?
    Answer. As you note, Section 309(j)(3)(B) of the Communications Act 
directs the FCC to promote economic opportunity and competition in its 
spectrum auctions ``by disseminating licenses among a wide variety of 
applicants, small businesses, rural telephone companies, and businesses 
owned by members of minority groups and women.'' The statute also 
provides the agency with a variety of means it can use to accomplish 
this goal, including, pursuant to Section 309(j)(4)(D), ``the use of 
tax certificates, bidding preferences, and other procedures.'' Under 
Sections 309(j)(4)(A) and 309(j)(4)(C), the FCC also is authorized to 
promote access to spectrum licenses by allowing alternative payment 
methods and by providing licenses in a variety of geographic sizes and 
frequency ranges.
    To implement these provisions of the Communications Act, the FCC 
historically has used tools that have included set-asides and bidding 
credits. The former work by limiting auction participation to classes 
of entities, including, for instance, new entrants; the latter work by 
providing credits to small businesses to assist with payment for 
winning bids.
    This complex legal landscape was altered by Section 6404 of the 
Middle Class Tax Relief and Job Creation Act, which amended Section 
309(j), limiting the agency's authority to prohibit participation in 
future spectrum auctions. At the same time, this new law specifically 
retained the Commission's ability to use rules of general applicability 
to promote competition. Going forward, the agency will need to identify 
how all of this legal authority--both new and old--can provide spectrum 
opportunities for wireless providers--both large and small.
    Furthermore, the FCC can promote access to spectrum through 
secondary markets. Secondary markets can provide more companies with 
opportunities to purchase spectrum outside of the Commission's auction 
process. The FCC should continue to investigate ways to encourage the 
fair and efficient development of robust secondary markets.

    Question 8. Several countries have recently held or plan to hold 
spectrum auctions to make more spectrum available for next generation 
wireless communications and broadband. Some of these countries have 
applied certain conditions to their auctions rules. For example:

  1.  In its 4G auction, France's ARCEP provided bidding preferences to 
        carriers that agreed to host MVNOs on its networks and had 
        enhanced rural build-out requirements. It also required roaming 
        agreements--to a losing bidder--for any carrier that won more 
        than one frequency block.

  2.  Germany' regulator, Bundesnetzagentur, applied rural build-out 
        requirements for its 800 MHz auction and placed bidding 
        restrictions on certain carriers.

  3.  The Netherlands reserved two spectrum blocks in the 800 MHz band 
        and one in the 900 MHz band for new entrants.

  4.  Canada, in its 2008 AWS auction, set aside spectrum for a new 
        entrant.

  5.  Czech Republic's CTU has reserved the 1.8 GHz block for a new 
        entrant

  6.  Ofcom has proposed spectrum caps in its upcoming LTE spectrum 
        auction.

  7.  Australia has proposed spectrum caps for its upcoming auction.

    It should be noted that several of these auctions ended up 
exceeding revenue expectations. I'm not advocating for the 
implementation of any conditions on any future auctions but I'm curious 
as to why these countries deemed it necessary to apply such conditions 
in their auctions rules? Do you believe the FCC should closely 
examination the recent 4G auctions in other countries to assist in 
determining how best to design future domestic auctions?
    Answer. I believe that the development of auction rules is a 
process that incorporates relevant law, evolutionary change in spectrum 
markets, and a range of interests that are often unique to the country 
whose regulator or legislature is responsible for developing the 
framework for bidding opportunities. As we develop upcoming auctions, 
the FCC should consider examining 4G auction efforts abroad. There may 
be important and useful lessons that we can import to our own auction 
policies and process.

    Question 9. As you know, Section 309(j)(7) of the statute (47 
U.S.C. 309(j)(7)) expressly prohibits the Commission from using the 
expected revenue from a spectrum auction as a basis for determining the 
public interest of frequency assignments. Furthermore, Congress, in 
H.R. Rep. No. 111, 103d Cong., 1st Sess. 258 (1993), emphasized that 
``important communications policy objectives should not be sacrificed 
in the interest of maximizing revenues.''
    While there is broad agreement auctions are the best mechanism to 
distribute spectrum licenses, is there too much emphasis currently 
being placed on maximizing auction revenues instead of the longer term 
economic benefit that may result? How might such skewed focus on 
proceeds hinder achieving the strategic goals necessary for the long 
term health of the spectrum ecosystem?
    Answer. Section 309(j)(7) of the Communications Act limits the 
FCC's ability to consider expectation of Federal revenues when making 
determinations on allocating and assigning spectrum. Instead, under 
Section 309(j)(3) the statute directs the agency to consider a number 
of other factors, including developing and rapidly deploying new 
technologies, products, and services; promoting economic opportunity 
and competition; avoiding unjust enrichment; and furthering the 
efficient and intensive use of spectrum. Simply put, the FCC has a duty 
to weigh these factors as the statute instructs. In doing so, it should 
naturally consider the long-term health of the spectrum ecosystem.
Spectrum Efficiency Metrics
    One of the primary, long-standing goals of the FCC has been to 
promote more efficient use of spectrum. The FCC's 1999 Spectrum Policy 
Statement highlighted ``with increased demand for a finite supply of 
spectrum, the Commission's spectrum management activities must focus on 
allowing spectrum markets to become more efficient . . .'' and 
Strategic Plan for FY 2003-2008 (published in 2002) indicated its 
general spectrum management goal is to ``encourage the highest and best 
use of spectrum . . .''
    In its 2002 report, the Spectrum Policy Task Force developed three 
definitions: spectrum efficiency, technical efficiency, and economical 
efficiency. However, the SPTF concluded ``it is not possible, nor 
appropriate, to select a single, objective metric that could be used to 
compare efficiencies across different radio services.''

    Question 10. In the FCC's search to free up more spectrum for 
wireless broadband, how does the FCC effectively determine and compare 
the spectral efficiency of different types of radio-based services when 
targeting various frequencies for reallocation?
    Answer. The FCC generally has not applied a spectral efficiency 
metric for different types of services. The agency's Technological 
Advisory Council considered such metrics, but determined that a single 
point of comparison to assess spectral efficiency among different 
services is neither feasible nor desirable. The Technological Advisory 
Council produced a white paper on this subject in September 2011. I am 
reviewing this document, and anticipate that the guidance it provides 
will inform my thinking more generally on efficient spectrum use.

    Question 11. One of the common spectrum efficiency metrics for 
wireless communications is in terms of bits/second/hertz. Some parties 
have suggested more granular metrics such as bits/second/hertz/pop or 
bits/second/hertz/cell. It seems like there could be several different 
metrics within each definition of efficiency.
    Robin Bienenstock of Sanford Bernstein raised the issue of network 
density and highlighted the difference between the U.S. and European 
countries. Specifically, Ms. Bienenstock compared California with Spain 
(noting similar size, topography, and population density). A major 
carrier in Spain had 33,000 base stations, whereas a major U.S. carrier 
in California had only 6,000 sites. Across the board, the network 
density for operators in Spain is three to six times higher than that 
of operators in California. With more cell sites, there is greater 
spectrum reuse, which means more efficient use, and a lessening of 
demand for the raw material (spectrum).
    Does the FCC use network density as a component of its spectrum 
efficiency metric? If not, given the FCC already imposes build-out 
requirements to licensees, should the FCC explore requiring network 
density guidelines too as a way to promote more efficient use of 
spectrum?
    Answer. As you note, different metrics may be used for examining 
whether or not spectrum is being used efficiently. To the best of my 
knowledge, the FCC has not generally used network density. Instead, 
requirements for building networks tend to focus on the coverage of 
some level of service, rather than the number of towers deployed. This 
is because a variety of factors can impact tower deployment, including 
the propagation features of the relevant spectrum, the quantity of 
spectrum available, and the local terrain and regional topography. 
Moreover, a lower number of towers in one location as compared to 
another may simply be a reflection of lower traffic demand. 
Furthermore, deployment may be limited by the need to protect against 
interference to services operating in adjacent spectrum. In sum, while 
network density guidelines may help facilitate the efficient use of 
spectrum, they are one of a wide variety of considerations.

    Question 12. Does the FCC have any additional data on network 
density comparisons of the U.S. in relation to other countries?
    Answer. The FCC has data on many, but not all, wireless towers in 
the United States. However, it does not have direct access to 
information on network density in other countries, which limits the 
ability to develop comparisons. At the same time, changes in technology 
may complicate efforts to make use of such comparisons. With the 
increasing deployment of wireless base stations that provide service 
capacity in crowded areas that are not located on towers but on 
buildings and other objects, assessment of density nationally and 
internationally may become substantially more complex.
Resolving the ``Spectrum Crunch'' Through Technology
    I'm concerned there is not enough focus on the role of technology 
in meeting the growing demand for wireless network capacity. An Ofcom 
report rightfully points out increasing wireless network capacity 
depends on a combination of ``spectrum, technology, and topology.'' 
Given the challenges we face with reallocation, I believe technology 
will play an even more prominent role.
    For example, research by Ofcom found that early 4G mobile networks 
will be 230 percent more spectrally efficient than 3G networks and that 
efficiency will increase to 450 percent by 2020. Technologies like 
dynamic spectrum access and cognitive radio can considerably improve 
utilization by allowing more aggressive spectrum sharing, and, though 
many years off, quantum entanglement and ``twisted'' waves hold amazing 
potential to significantly, and even possibly infinitely, increase 
capacity without any additional spectrum.
    However, I'm concerned about the threats the U.S. is facing in 
regards to its leadership in innovation, primarily with ICT. Many 
reports highlight most of the global R&D growth will be mainly 
attributed to Asian economies--according to NSF, the United States' 
share of global R&D expenditures dropped from 38 percent to 31 percent 
between 1999 and 2009, while the Asia region grew from 24 percent to 35 
percent. In addition, more U.S.-based companies are locating R&D 
operations overseas--the number of overseas researchers employed by 
U.S. multinationals nearly doubled from 138,000 in 2004 to 267,000 in 
2009.

    Question 13. What more can the government do (besides make the R&D 
tax credit permanent) to foster greater R&D investment, primarily in 
ICT?
    Answer. I believe that innovation is the development of new ideas 
and the realization of those ideas on a large scale. The long-term 
health of our economy depends on our ability to foster innovation. It 
can drive job growth, improve wages, and facilitate our ability to 
produce goods and services that are competitive in global markets.
    Consequently, I believe that the FCC has a duty to consider all of 
its substantive policies in light of the importance of innovation. In 
addition, the agency should develop processes that facilitate smart and 
swift decision-making, which can, in turn, speed the deployment of new 
technologies and creation of new markets. To this end, I support the 
efforts of the Commission's Office of Engineering and Technology to 
consider ways to improve the equipment authorization process, thereby 
creating more opportunities to certify more innovative devices. 
Finally, the agency should be in a continuous dialogue with other 
Federal authorities with interests in research and development, as well 
as business leaders, to make sure that government efforts consistently 
promote innovation, opportunity, and economic growth.

    Question 14. Given the benefits that both the private and public 
sectors will reap from more advanced technologies, how can there be 
more collaboration between both sectors to see these technologies to 
fruition?
    Answer. I believe that government efforts to collaborate with 
industry are an essential part of managing our growing need for 
spectrum resources. The FCC, working with the National 
Telecommunications and Information Administration, can serve a critical 
role in helping foster this collaboration. I am encouraged, for 
instance, by joint intergovernmental and industry efforts to find 
opportunities for sharing of Federal spectrum in the 1755-1850 MHz band 
with commercial licensees. This is an exciting development that could 
become a model for addition sharing opportunities. As finding new, 
unencumbered spectrum becomes more difficult, efforts like this one 
will become an increasingly important part of our ongoing effort to 
relieve our spectrum crunch.

    Question 15. Does the FCC have any estimates on the amount of 
domestic private sector funding in wireless R&D as a percentage of 
overall industry capital investment? Do you believe there is enough 
domestic R&D investment in advanced wireless communications in 
comparison to other countries?
    Answer. In its annual report to Congress on the state of 
competition in the mobile wireless sector, the FCC examines a variety 
of data concerning the mobile wireless marketplace, including estimates 
regarding research and development. Today, the United States has 64 
percent of the world's 4G LTE subscribers. These next-generation 
networks are projected to add $151 billion in GDP growth over the next 
four years, creating roughly 770,000 new American jobs. These data make 
clear that the United States has emerged as a global leader in mobile 
innovation. Going forward, I will support efforts by the agency to 
promote innovation and investment in advanced wireless communications, 
so that the United States can continue to be a leader in providing 
these services.

    Question 16. While U.S. industries fund approximately 70 percent of 
domestic R&D, the Federal Government is the primary source of funding 
for basic research, providing approximately 60 percent of funding, and 
industry conducts less than 20 percent of the basic research done in 
the U.S., according to the Science Coalition.
    How important are Federal programs like NSF EARS and DARPA STO to 
the long-term growth and health of innovation in the spectrum ecosystem 
and should Congress provide greater funding for basic research in this 
area?
    Answer. Federal programs like the National Science Foundation's 
Enhancing Access to Radio Spectrum and the Defense Advanced Research 
Project Agency's Strategic Technology Office can promote growth and 
innovation in the spectrum ecosystem. I support efforts by Congress to 
advance innovation through funding for basic research in these or 
similar programs.
Q8--Spectrum Flexibility
    The National Broadband Plan highlighted the importance of spectrum 
flexibility. The NBP concluded that ``flexibility of use enables 
markets in spectrum, allowing innovation and capital formation to occur 
with greater efficiency'' and ``spectrum flexibility, both for service 
rules and license transfers, has created enormous value.'' That 
innovation and capital formation could be beneficial to addressing the 
challenges that exist in making more affordable and faster broadband 
available in rural areas.
    As you know, Section 336 of the statute (47 U.S.C. 336) allows 
broadcasters to offer ancillary and supplementary services, which 
includes data transmission and interactive materials. Section 336 also 
prescribes the assessment and collection of fees related to such 
service offerings, and the FCC, back in 1998, adopted rules requiring 
broadcasters to pay a fee of 5 percent of gross revenues from such 
services for which they charge subscription fees or other specified 
compensation.

    Question 17. If we need to get broadband into rural areas, why not 
let other licensees, like broadcasters, attempt to close the digital 
divide that exists? Mainly, since they may have infrastructure already 
in place to build off of.
    Answer. Millions of Americans rely on free, over-the-air television 
as their primary source of news, information, and entertainment. As the 
Nation reassesses its spectrum resources, it is imperative for the FCC 
to consider this role in the broader communications landscape. To this 
end, I am open to hearing about proposals for new ways to bring 
wireless broadband service to rural areas that involve broadcasting. At 
the same time, allowing a piecemeal approach to freeing up spectrum for 
wireless broadband has the potential to undermine comprehensive efforts 
to make sure that spectrum resources are used as effectively and 
efficiently as possible. As a result, in considering any proposal to 
alter existing licenses, the FCC must take into consideration the 
broader need to maximize spectral efficiency.

    Question 18. Even though the FCC adopted rules to avoid unjust 
enrichment, some parties have still raised concerns that such 
flexibility would be unfair since the broadcasters weren't assigned the 
spectrum via an auction. However, as you know, the FCC has only 
auctioned licenses since 1994 and prior to that used comparative 
hearings and then lotteries for frequency assignments--including 
licenses for wireless communications.
    If there is concern about ``unjust enrichment'' if broadcasters 
provide broadband, why isn't there the same concern with wireless 
communications licenses issued prior to 1994? Wouldn't the 5 percent of 
gross revenue that broadcasters have to pay if they add broadband to 
their signals fairly compensate the government, mainly since such 
service would have to be ``ancillary and supplementary'' to their 
broadcast television signal?
    Answer. As a general matter, the FCC has a duty to ensure that 
spectrum is used in smart and efficient ways--both locally and 
nationally--in order to optimize the value of this public resource. 
Providing additional flexibility to existing licensees may be one way 
of achieving this goal. At the same time, in Section 309(j)(3)(C) and 
309(j)(4)(E) of the Communications Act, Congress directed the FCC to 
take steps to avoid unjust enrichment when recovering spectrum for the 
public as well as when in issuing wireless licenses and permits. The 
Commission must therefore account for concerns about unjust enrichment 
that may arise if broadcasters, or other licensees that received their 
spectrum prior to the Commission obtaining auction authority in 1994, 
are later permitted to use their licenses to offer services other than 
those originally intended. Of course, these concerns must be taken into 
consideration along with other statutory criteria and the broader need 
to promote smart and efficient use of our spectrum resource.
Q9--Spectrum Fees
    Recommendation 5.6 of the National Broadband Plan suggested 
``Congress should consider granting authority to the FCC to impose 
spectrum fees on license holders and to NTIA to impose spectrum fees on 
users of government spectrum'' to address inefficiencies in spectrum 
allocations and promote more efficient use of spectrum. It is my 
understanding that every administration since Clinton has requested 
spectrum fee authority from Congress.
    Ofcom imposed similar fees (known as Administrative Incentive 
Pricing) in the late 1990s and issued a report in 2009 that concluded 
the fees ``met its primary objective in helping to incentivise spectrum 
users to consider more carefully the value of the spectrum they use 
alongside that of other inputs, and to take decisions that are more 
likely to lead to optimal use of the available spectrum.'' The report 
also ``found no evidence to suggest that the application of AIP has 
given rise to material adverse consequences for spectrum efficiency.''

    Question 19. Should Congress grant the FCC and NTIA spectrum fee 
authority either on all licenses and assignments or just on non-
auctioned licenses, mainly if the FCC moves to implement greater 
flexibility of spectrum use? Do you believe the FCC can strike the 
proper balance in applying spectrum fees to promote more efficient use 
of spectrum but not to a point that it presents an undue financial 
burden to the licensee?
    Answer. As you note, in recent years different Administrations have 
proposed that Congress provide the FCC with the authority to use 
economic measures, like spectrum fees, to promote more efficient use of 
this scarce resource. Were Congress to provide this authority to the 
agency, I would be interested in fully exploring how such fees could be 
useful in promoting this purpose, while at the same time not imposing 
an undue burden on licensees.

    Question 20. Some parties have opposed spectrum fees calling them a 
tax. But what is the difference between a spectrum fee that is paid 
annually and a licensee paying a lump sum at an auction? If a spectrum 
fee is a tax, isn't an auction payment a tax as well since it too goes 
to Treasury? Or are both not considered taxes since they are transfers 
to government for the right to use a public good?
    Answer. The proper characterization of spectrum fees would depend 
on how they are established by Congress and whether they impose undue 
burdens on licensees.

    Question 21. If not spectrum fees, how should the FCC impose 
economic fairness between licensees that are/were awarded via auctions 
versus those that were awarded via comparative hearings and lotteries?
    Answer. I recognize that concerns regarding economic fairness may 
arise when additional flexibility is granted to spectrum licensees 
outside of the auction process. Consequently, I believe that the FCC 
must consider these issues while also rendering decisions that are 
faithful to the Communications Act and consistent with the broader need 
to promote smart and efficient use of our spectrum resource.
                                 ______
                                 
     Response to Written Question Submitted by Hon. John Thune to 
                        Hon. Jessica Rosenworcel
    Question. Congress recently passed spectrum auction legislation and 
the Commission will begin setting rules for implementation perhaps as 
early as this fall. I'm hearing from some low power television (LPTV) 
interests in my state who are concerned about how the FCC will handle 
low power stations when the FCC conducts their incentive auctions, and 
subsequently goes through a process of clearing channels 31-51. Low 
power TV stations provide a valuable service, such as local public 
meetings and religious broadcasting. LPTV has been the entry point for 
small businesses into the broadcast market and today, many LPTV owners 
are small businesses who work hard to continue to serve their local 
communities with news and resources aimed at the community. Would you 
support rules that allow LPTV to survive? What assurance can you 
provide that low power television stations will be protected?
    Answer. Low-power television broadcasters can provide important 
services to their communities. They can offer truly local and unique 
programming options that are not available elsewhere on the proverbial 
television dial. As you note, these stations also historically have 
been an important entry point for small businesses seeking to gain a 
toehold in the broadcasting market.
    In the Middle Class Tax Relief and Job Creation Act, Congress 
directed the Commission to conduct incentive auctions and, as necessary 
and, subject to a specific series of conditions, repack television 
broadcast licensees. Section 6403(b)(5) of this law expressly states 
that it does not alter the spectrum usage rights of low-power 
television stations. In crafting rules for incentive auctions and 
developing processes for repacking, the Commission must be faithful to 
the direction it received from Congress.
                                 ______
                                 
      Response to Written Question Submitted by Hon. Roy Blunt to 
                        Hon. Jessica Rosenworcel
    Question. Local radio and television stations are currently 
competing with a vibrant and growing online marketplace for listeners 
and viewers. However, their online competitors are not saddled with the 
same regulations. Do you think that in trying to protect localism and a 
multitude of voices the regulations might actually be stifling growth 
opportunities?
    Answer. Under Title III of the Communications Act, the FCC has 
duties to ensure that the services it oversees that make use of our 
scarce spectrum resources do so in the public interest. Historically, 
with respect to broadcasting, this assessment has included 
consideration of how these services support localism, competition, and 
diversity.
    While the Commission must unequivocally honor the law and consider 
its precedent, I agree that it also must mind the evolution of the 
marketplace. To this end, it is important for the agency to recognize 
that an emerging class of online services provides new viewing and 
listening options for the public. While these emerging services may 
lack the same obligations as traditional broadcasters, in some cases 
they also do not enjoy the same protections, including, for instance, 
must carry rights.
    In sum, this is a complex marketplace, with a mix of legacy 
obligations and new technologies that provide emerging business 
opportunities. In approaching this issue, I believe that the agency 
must be faithful to the Communications Act and consistent with the law, 
promote the public interest. In doing so, however, it should also 
continuously assess how the evolution of media markets is changing the 
way that listeners and viewers seek to hear and watch and how this in 
turn, impacts localism, competition, and diversity.
                                 ______
                                 
    Response to Written Question Submitted by Hon. John Boozman to 
                        Hon. Jessica Rosenworcel
    Question. What short-term solutions for spectrum needs can be 
utilized while longer-term solutions, such as incentive auctions, are 
implemented?
    Answer. Radio spectrum is a scarce but valuable resource. The 
proliferation of wireless devices and growing demand for wireless data 
services puts new pressures on the use of our airwaves. As you may 
know, the President set a goal of developing an additional 500 
megahertz of spectrum over the next ten years for new commercial use. 
This is an important effort. It is also a serious challenge. To this 
end, you suggest that to meet this challenge we need to consider nearer 
term solutions to address our growing spectrum needs, while longer-term 
efforts like incentive auctions are put in place. I wholeheartedly 
agree.
    I believe these efforts should include continued examination of 
opportunities that come from spectrum sharing. I am encouraged, for 
instance, by joint intergovernmental and industry efforts to find 
opportunities for sharing of Federal spectrum in the 1755-1850 MHz band 
with commercial licenses.
    At the same time, it is important that we recognize that relocation 
of Federal spectrum users is complicated and expensive, so designing 
systems that provide clear incentives and rewards for Federal 
authorities to be more efficient with this resource needs additional 
consideration. As a related matter, it may be useful to consider the 
recommendations of the President's Council of Advisors on Science and 
Technology, which suggest use of a synthetic currency system to 
encourage Federal agencies to return underutilized spectrum resources 
in return for a budget increase.
    Finally, technologies that enable more efficient spectrum use need 
both industry investment and Commission support. I believe that the 
public and private sectors should further explore how best to promote 
technologies like spectrum sensing and cognitive radios, which can 
facilitate multiple users accessing the same spectrum. This effort 
should also include consideration of small cell technologies that can 
provide wireless coverage and capacity in limited areas. These include 
technologies like femtocells, which are small wireless base stations 
that look like wireless routers but use wireline technologies for 
backhaul. I understand that the FCC held a forum on small cells in 
October 2011. Going forward, I believe that the agency should spend 
additional time and attention on these technologies and identifying the 
role that they can play in addressing our spectrum challenge.
                                 ______
                                 
     Response to Written Question Submitted by Hon. Marco Rubio to 
                        Hon. Jessica Rosenworcel
Telecommunications Act
    Question. At the Committee's recent hearing on online video, there 
was consensus--among the witnesses and some members of the Committee--
that Congress needs to rewrite the Telecommunications Act. And as you 
are probably aware, some industry stakeholders advocate for the need to 
reform the Act and break down the regulatory silos. Do you think that 
Congress should rewrite the Telecommunications Act to better reflect 
the current telecommunications environment? And if so, what parts of 
the Act should Congress update or rewrite?
    Answer. As you suggest, the Communications Act is often described 
as a series of silos. Title II of the law is built around wireline 
services. Title III is designed to address services that make use of 
radio spectrum--from wireless broadband to broadcasting. Title VI is 
constructed to address cable systems. While at one time this approach 
may have been logical, the evolution of technology has dated this 
structure and rendered it less than ideal.
    The challenge, however, is to consider what comes next. While 
consensus may exist for the need to update the Communications Act, 
consensus on how to do this is more elusive. In this environment, I 
believe that the proper starting point is identifying the essential 
values in existing law. For my part, I believe that four key elements 
should anchor this conversation. First, public safety is critical. 
Second, universal service helps ensure that everyone in this country, 
no matter who they are and where they live, has access to 
communications services that are an important part of opportunity in 
the digital age. Third, competition delivers innovative services and 
promotes investment. Fourth, consumer protection is essential.
    Rebuilding the law around these principles, however, is not simple. 
In addition, it is not easy to migrate existing stakeholders from the 
current system to a wholly new framework. Because dislocation has 
consequences for both businesses and consumers, I believe that a 
sweeping new law could be a positive force--but also a destabilizing 
one. As a result, while a longer term conversation starts regarding the 
rewrite of the Communications Act, a shorter term discussion about 
smaller fixes would be beneficial. To this end, I believe agency 
deliberations would benefit from reform of the Government in the 
Sunshine Act. I also believe that additional resources for engineering 
to speed the certification of wireless devices would expedite the 
delivery of new and innovative services in the marketplace. Finally, I 
believe that expanding the role of Administrative Law Judges at the 
agency merits consideration. This could result in swifter resolution of 
disputes, which in time could yield both more certainty and more 
investment.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                        Hon. Jessica Rosenworcel
    Thank you for your testimony before the Committee. I appreciate the 
time you spent and your thoughtful answers to the following questions.
    As you all know, our economy benefits greatly from the 
communications and technology sector. Competition and innovation have 
created new services and devices as well as high-quality jobs that have 
changed the lives of Americans. This sector is incredibly important to 
sustainable growth of our economy. That is why Congress must push the 
Federal Communications Commission to be the most open and transparent 
agency in the Federal Government. The industries you regulate are too 
important to our Nation.
    Under Chairman Genachowski, I have seen notable steps in the right 
direction, and he has made process a ``top priority.'' That being said, 
I am concerned that the FCC is not always as open and transparent as it 
should be. The problem as I see it today is that the FCC can pick and 
choose the rules it wants to follow when it wants to follow them. This 
method is convenient for the FCC, but it is not good government, and we 
owe more to Americans with business before the FCC.
    I introduced legislation that pushes the FCC toward more 
transparency and openness. The intent of my legislation is not to 
hamstring the agency. It is to push them to be exactly what Americans 
expect from their government, open and transparent regulators of the 
laws passed by Congress.
    A more predictable and consistent FCC will create jobs in Nevada, 
which has the unfortunate distinction of leading our Nation in 
unemployment for over two years. Every government agency should be 
committed to policies that promote job creation, investment and 
innovation. The technology sector has helped growth in our country for 
the last twenty years and will continue to if big government does not 
overburden it.
    I introduced two measures, the Telecommunications Jobs Act (S. 
1817) and the Federal Communications Commission Consolidated Reporting 
Act (S. 1780). These bills push the FCC to be the most open and 
transparent agency in the Federal Government and provide a streamlined 
method of reporting to Congress.
    The following questions are in regards to those bills, and I would 
ask you to please respond to each question.

    Question 1. One of the most important reforms I introduced would 
force the Commission to demonstrate beyond any doubt the need for 
regulation before intervening in the marketplace. I strongly believe 
that a cost-benefit analysis should be conducted on any regulation that 
will have a significant market impact, and I believe that before the 
FCC begins a rule proposal, they survey industry within three years of 
proposing a rule to determine whether that regulation is even 
necessary. A cost-benefit analysis mandating the FCC to identify actual 
consumer harm and conduct an economic, market-benefit analysis is 
consistent with President Obama's Executive Order 13563 on Improving 
Regulation and Regulatory Review. Would you support legislation that 
implements a cost benefit analysis consistent with the President's 
Executive Order? If not, why?
    Answer. I support the objectives of Executive Order 13563 and as a 
related matter, Executive Order 13579. Cost-benefit analysis can be a 
useful tool for evaluating the relative merits of any particular 
policy. In many cases, balancing benefits with costs can help identify 
efficient outcomes and facilitate good public policy.
    At the same time, as an analytical method, it may not always be 
fully compatible with the statutory direction in the Communications 
Act. It would be complex, for instance, to integrate cost-benefit 
analysis with the six principles governing universal service policy 
that are enumerated in the law. It would be similarly complex to use 
cost-benefit analysis to evaluate obligations under the Communications 
Assistance for Law Enforcement Act, which defines the duty of carriers 
to cooperate in the interception of communications for law enforcement 
purposes.
    As a result, the utility of cost-benefit analysis must be 
considered in conjunction with other objectives in the law. However, 
with this caveat, I believe it can be a useful and important analytical 
tool for the agency in its decision-making process in major 
rulemakings.

    Question 2. Do you support legislation mandating the FCC to survey 
the marketplace within three years before initiating a rulemaking?
    Answer. I agree that the FCC should regularly survey the 
communications marketplace to ensure that its rules and policies are up 
to date. However, I fear that a unilateral obligation to have a 
particular marketplace survey in effect three years in advance of any 
rulemaking may have the unintended effect of precluding the agency from 
responding in a sufficiently swift fashion to developments in 
communications markets that may require its immediate attention--to 
protect consumers, to maintain fair opportunities in our markets, and 
to ensure that our goods and services are globally competitive.

    Question 3. Under the Chairman, 85 percent of the Notices of 
Proposed Rulemakings have contained text of proposed rules. However, in 
the years before Chairman Genachowski, only 38 percent contained the 
specific text. Also, at times, these NPRMs have been broad, leading to 
uncertainty because industries are not clear as to what the FCC is 
actually looking at. Do you believe that the FCC should include the 
actual language of any and all proposed new rules in every NPRM?
    Answer. In general, yes. The clarity that proposed rules may 
provide can be useful for all stakeholders with an interest in FCC 
policies. It can improve the fairness of agency proceedings. At the 
same time, I fear that layering extensive new procedural requirements 
on top of existing ones may prevent the agency from responding in a 
nimble fashion to the developments in dynamic communications markets 
that may require its immediate attention. In addition, it is important 
to recognize that a rulemaking proposal is often improved when comments 
address more than the specific language choices in proposed rules, and 
thereby compel the agency to think more broadly about the policies it 
may be proposing.

    Question 4. These NPRMs can stay open for quite a while costing 
industry time and resources without any knowledge of whether action 
will take place or not. I have heard from many of my constituents with 
business before the Commission that they simply cannot get an answer 
from the Commission on what seems to be routine petitions, 
applications, or proceedings.
    Nevada has asked for a waiver from the FCC in regards to its 700 
megahertz public safety early deployment rules. I understand that a 
decision on this could have been delayed until Congress passed a public 
safety spectrum allocation bill. Now, with provisions intended to 
facilitate a public safety network in place, the FCC still seems to be 
stalling on this.
    Other companies have purchased spectrum in the lower 700 MHz and 
are awaiting a decision by the FCC on whether rules regarding 
interoperability, clearing channel 51 or waivers to build out 
requirements will be granted.
    The issue of ``special access'' has been open for 10 years before 
the Commission without any resolution. This is an issue worth billions 
of dollars to the entire industry.
    Furthermore, last July, I and a number of my colleagues on this 
Committee wrote to you and we did not receive a response for 8 weeks 
and only after multiple follow up letters and calls. When Senators on 
the Committee of jurisdiction have trouble receiving a response from 
the FCC, there clearly are problems with answering questions.
    All of this leads to uncertainty. There doesn't appear to be much 
confidence among many companies that the FCC can act expeditiously on 
much of anything of significance to the industry. Proceedings can 
languish for 3, 5, or 10 years. Companies, generally, have a hard time 
investing, or increasing their investment, if they are uncertain what 
the regulatory environment is going to look like for their business.
    Chairman Genachowski has worked on this issue and established 
internal 180-day shot clocks; however, this has not solved all the 
problems of open ended NPRMs.
    Do you believe that Congressional legislation implementing shot 
clocks on FCC action is appropriate? If not, why? Does the Commission 
expect to act on any of the examples listed above?
    Answer. Communications is a dynamic sector in our economy, and the 
agency should, within its resources and consistent with the law, make 
decisions in a way that facilities investment and expedites the 
opportunity for consumers to benefit from new and innovative services. 
This is especially important for small businesses, which are essential 
to job creation.
    As a new Commissioner at the agency, I believe that it is important 
to study the source of any delay. If regulatory inertia is responsible, 
that needs to be addressed. If the technical expertise necessary to 
render a timely decision is not available, that likewise needs to be 
addressed. If, however, applicants are resolving disputes on their own, 
that is often preferable to regulatory intervention. Similarly, if 
delays are the result of ongoing litigation, that is a right that 
should be respected by the agency decision-making process.
    While I believe that the Commission has adequate authority to 
address issues before it in a timely way, I welcome further guidance 
from Congress.
    Many of the proceedings cited above began well before my tenure at 
the agency. I will endeavor to study the record, consider the interests 
of all stakeholders, and vote what is before me in a timely fashion.

    Question 5. Since 2008, the FCC has conducted a number of merger 
reviews. How many times has the FCC failed to conclude the review 
within the 180-day shot clock period? How many times was the deadline 
missed? Was there any reason they were missed?
    Answer. It is my understanding that during the last three years, 
over 95 percent of license transfer applications were acted upon within 
180 days. As a new Commissioner, I cannot speak to the reasons that may 
have required any particular transaction to take longer than the 
informal shot clock period. However, as a general matter, I believe the 
agency should act swiftly in its review, provided that while doing so 
it can faithfully perform its statutory duties under the Communications 
Act.

    Question 6. Going back to the President's Executive Order 13563, 
the Chairman has fully supported the ideals of the order, which in part 
states ``For proposed rules, such access shall include, to the extent 
feasible and permitted by law, an opportunity for public comment on all 
pertinent parts of the rulemaking docket, including relevant scientific 
and technical findings.''
    In the days before the record closed on the Commission's reform of 
the high cost of the Universal Service Fund, the FCC added 114 new 
pages of its own to use in the final decision. This practice denied 
public input on information that was used to render a decision which 
seemed to run counter to the President's Executive Order. Without 
adequate public and stakeholder input, the chance that a regulation 
will have unintended consequences increases. One example brought to my 
attention is that now smaller rural markets like those in my state will 
miss out on support because of the presence of fixed wireless services. 
They believe more dialogue and transparency could have avoided this 
outcome.
    Do you believe that relying on reports in rulemaking and 
adjudications that are without a robust notice and comment process is 
appropriate? Or substantially altering a report after the period with 
which industry input or comments are accepted?
    Answer. I was not a member of the Commission at the time for the 
decisions you cite above. However, I believe that the agency should 
always have the ability to rely on publicly available information. 
Likewise, I believe it should always strive to make its processes 
transparent and fair.
    In November 2011, the Commission issued a Public Notice seeking 
comment on ways to increase transparency in agency proceedings, in 
order to ensure that all stakeholders have access to relevant 
information when filing pleadings and other materials. I support this 
effort.

    Question 7. Do you agree that it is not the best practices of a 
government agency to dump data into a report at the 11th hour without 
industry input?
    Answer. Yes.

    Question 8. Do you agree that this method, while perhaps helpful to 
the Commission, is not open and transparent to the level benefitting an 
agency that issues regulations that have a significant economic impact?
    Answer. The agency should always strive to be faithful to the laws 
that govern its processes, transparent, and fair.

    Question 9. The FCC rightfully should review transfers of lines 
under section 214 of the Communications Act and the transfer of 
licenses under section 309 and 310 of the Communications Act. However, 
this review should not provide the FCC to extract a list of concessions 
from the applicant in exchange for approval. For example, in the 2011 
Comcast/NBC Universal transaction order, the Commission accepted a 
``voluntary'' commitment from Comcast to comply with net neutrality 
rules even if a court overturns those rules.
    This agreement was made through a transaction review and was done 
without any public scrutiny--as proposed conditions are often unknown 
until the approval order is announced.
    Do you believe that this type of rulemaking provides a scenario in 
which one set of rules exist for those who have merged and another 
exists for those who have not?
    Answer. I believe that the FCC should render its decisions in a 
manner faithful to the law, consistent with the record, and taking into 
account the interests of all stakeholders.

    Question 10. Have there been instances you have experienced when 
merger conditions have been imposed that was not directly related to 
the transfer questions?
    Answer. I was sworn into office as a Commissioner last month. 
Consequently, I have not yet rendered a decision on a transfer 
proceeding or directly ``experienced when merger conditions have been 
imposed'' that were ``not directly related to the transfer questions.''

    Question 11. Do you believe it is appropriate to require the FCC to 
end this practice by requiring the FCC to narrowly tailor any 
conditions it imposes or commitments it accepts to only address harm 
caused by the transfer of licenses?
    Answer. I believe merger conditions should be rationally related to 
the transaction at issue.

    Question 12. Last November, I introduced S. 1780, the Federal 
Communications Commission Consolidated Reporting Act. In section 3 of 
that bill, I identified 24 reports for repeal and elimination. 16 of 
those reports were ones required of the FCC. Many of these required 
reports appeared to me to be contemplated during eras long since 
passed; were ones with an exceedingly narrow focus; or ones that bore 
little relevance to today's communications marketplace. Have you had 
the opportunity to review the FCC reports that were identified in S. 
1780? Would you take issue with any of the recommended deletions?
    Answer. As a general matter, I support the effort to streamline the 
range of reporting obligations that the FCC is presently subject to 
under a variety of laws. However, before committing to the repeal of 
all 24 reports contemplated in the legislation, I would like to further 
assess how these reports are used--by industry and consumers--to assess 
the current marketplace.

    Question 13. Notwithstanding my desire to leave the FCC of its 
reporting burden, S. 1780 calls for the FCC to provide a Report to 
Congress with respect to the state of the communications marketplace, 
covering such matters as competition in broadband deployment and 
barriers to the competitive marketplace. The FCC is currently required 
to do many of these narrowly focused reports, but it seems to me that 
what we lack is anything like a comprehensive look at the totality of 
the marketplace at regular intervals. My thought was that this should 
be done every two years. What is your opinion of such a proposal? I 
believe that both the FCC and Congress would benefit from such a 
Report.
    Answer. I believe such a report could be beneficial. However, I 
think it is important that when the FCC collects this kind of data, it 
does so in a manner that is useful for consumers.
                                 ______
                                 
Response to Written Questions Submitted by Hon. John D. Rockefeller IV 
                            to Hon. Ajit Pai
Public Safety Waivers
    This Committee worked hard to pass legislation that will make a 
nationwide, interoperable public safety network a reality. The law is 
clear that the network must be based on a single nationwide 
architecture. I recognize that, before the law was passed the FCC 
granted several waivers to allow certain jurisdictions, on a 
conditional basis, to begin building certain facilities. I also 
understand that a number of other jurisdictions filed waivers that 
remain pending.
    There have been press reports that some at the Commission believe 
that the law does not speak directly to whether the FCC should grant 
new, additional authority to jurisdictions to begin building their own 
networks before the new FirstNet board is put into place. Such a 
position seems to undermine the clear intent of this Committee and of 
Congress toward creating a nationwide network. Such a position also 
runs the risk of replicating the mistakes of the past by creating 
separate networks that may never be truly interoperable.
    I recognize that allowing one or two of these jurisdictions to move 
forward with their networks, subject to appropriate conditions and 
vendor indemnification, may provide some benefits for public safety. 
But I have heard from experts that allowing a number of jurisdictions 
to move forward could make it much more expensive and difficult in the 
long-term to deploy a truly interoperable network nationwide. That was 
not Congress's intent.

    Question 1. Will you commit that when you review whether to allow 
authority for jurisdictions to begin building their networks before 
FirstNet is set up that you will act in a manner that is consistent 
with Congressional intent?
    Answer. Yes, as a Commissioner, I take very seriously my 
responsibility to implement the laws enacted by Congress in a faithful 
manner.

    Question 2. In your opinion, how would the granting of new 
authority not complicate FirstNet's efforts to achieve nationwide 
interoperability for our first responders?
    Answer. In evaluating whether jurisdictions should be provided with 
interim authority to move forward with their own networks, the 
Commission must consider very carefully whether such action would 
hamper FirstNet's efforts to achieve nationwide interoperability. For 
this reason, the Commission indicated in its recent order that 
``adherence to the `recommended minimum technical requirements' for 
nationwide interoperability developed by the Interoperability Board and 
transmitted to FirstNet under Section 6203 of the Public Safety 
Spectrum Act will be critical in determining whether a [jurisdiction 
will receive an STA].'' I strongly agree with this statement.

    Question 3. Also, how would you make sure that grants of new 
authority would not also run the risk of increasing the overall costs 
of the network?
    Answer. This is another important factor for the Commission to 
consider. On one hand, were jurisdictions to spend money on equipment 
and infrastructure that would need to be replaced by
    FirstNet, then overall costs would increase. If, on the other hand, 
such equipment and infrastructure could be integrated into FirstNet's 
network, then FirstNet would save money that could then be used to 
broaden the coverage of its network, especially in rural areas.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Inouye to 
                             Hon. Ajit Pai
Media Ownership by Women and People of Color
    Question 1. Are you satisfied with the level of media ownership by 
women and people of color today? If not, I would appreciate your 
suggestions on how media ownership by women and people of color can be 
improved. What role can the FCC play to encourage greater media 
ownership opportunities for women and people of color?
    Answer. Right now, the Commission is in the midst of a rulemaking 
proceeding designed to enhance ownership diversity. I look forward to 
carefully reviewing the record that has been complied by the 
Commission, and it is my hope that we will be able to reach consensus 
on creative proposals for diversifying broadcast ownership by the end 
of the year. In particular, I am grateful that the Minority Media and 
Telecommunications Council (MMTC) has offered 47 suggestions for the 
Commission's consideration, and I believe that MMTC's recommendations 
deserve serious study.
Spectrum Swaps
    Question 2. Some industry representatives as well as a few Members 
of Congress have suggested that spectrum swaps are a direct and faster 
way to increase competition in the wireless broadband market. Do you 
agree with this suggestion? What efforts are being taken or can be 
taken by the FCC to explore spectrum swaps as a way to increase 
competition in the wireless broadband market?
    Answer. When it comes to spectrum policy, the overarching goal is 
to get spectrum into the hands of those who will use it best. That is 
why the FCC should do all that it can to allow these licenses to 
migrate to their highest use in the secondary market. Spectrum swaps 
can play a key role in this by enabling operators to trade spectrum so 
that they can put together more contiguous blocks and achieve greater 
efficiency. Although the FCC has taken steps to make secondary markets 
function more smoothly over the years, more needs to be done. In the 
near term, I think that codifying in the FCC's rules reasonable shot-
clocks for various types of spectrum sales and modernizing the spectrum 
screen that the Commission uses to evaluate spectrum transactions would 
help create greater certainty for the marketplace.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. John F. Kerry to 
                             Hon. Ajit Pai
Updating the Law
    Question 1. The FCC has a wireless bureau, a wireline bureau, and a 
media bureau. Given that all three operate in a broadband world, should 
we have a broadband bureau at the agency that either incorporates these 
three separate bureaus or helps us understand the state of broadband 
competition and define and eliminate duplicative bureau functions?
    Answer. Today, the FCC's bureau structure divides the 
communications marketplace into silos of technologies and services. But 
convergence and competition have rendered this approach hopelessly 
outdated. Cable operators offer phone and Internet services. 
Telecommunications carriers promote video service. Voice over Internet 
Protocol (or VoIP) providers sell voice service and video 
teleconferencing. Companies like Netflix use the Internet to deliver 
video service. And wireless providers, once known for selling phones 
the size of a brick, give consumers new, multifunctional ways to 
connect on the go. Given these dramatic changes in the marketplace, the 
Commission should absolutely consider restructuring its operations.

    Question 2. The 1992 Act is 20 years old this year, and the 1996 
Act is entering its late teens. Should we update these laws and if so, 
using what set of principles?
    Answer. Ultimately, it is up to Congress to decide whether to 
update the Communications Act. However, the technological landscape and 
communications marketplace have changed enormously in the sixteen years 
since the Act was last subject to significant revisions, and it is 
therefore often very challenging for the Commission to apply the Act to 
today's world. Should Congress move forward with revising the Act, I 
believe that it would be helpful to adhere to the principle of 
competitive neutrality; the Act should not seek to advantage or 
disadvantage any particular technology or competitor. I also believe 
that the Act should allow the FCC to focus on removing barriers to 
technological innovation and infrastructure investment while at the 
same time ensuring that the communications marketplace works for the 
benefit of consumers.
Spectrum
    Cisco's U.S. mobile data forecast projects that the volume of data 
traffic on mobile service provider networks will increase 16 times from 
2011 to 2016. With that kind of demand for space in our airwaves for 
wireless broadband, the Commission should be making every effort to 
make as much existing spectrum as usable as possible quickly.

    Question 3. What are the prospects for Federal and private users to 
share the spectrum that agencies currently hold without disrupting 
vital public services and what can we do to speed up the process?
    Answer. As part of my ``all-of-the-above'' approach to spectrum 
policy, I believe that we should pursue spectrum sharing, particularly 
geographic spectrum sharing, where appropriate. In this regard, the 
President's Council of Advisors on Science and Technology recently 
released a report containing many ideas that merit careful study. I 
stand ready to work with my colleagues at the Commission as well as 
with the National Telecommunications and Information Administration to 
evaluate these proposals. At the same time, however, I also believe 
that it is important to continue efforts to clear as many Federal 
spectrum bands as possible and reallocate them for exclusive commercial 
use.

    Question 4. As space on the airwaves becomes increasingly 
congested, how will the FCC better arbitrate interference disputes 
between neighboring services in the future?
    Answer. To avoid interference, the Commission is very careful to 
set heavily-tested power limits and other technical rules for devices 
and those using various spectrum bands. Should interference occur, the 
parties usually work together to resolve the problem and only come to 
the Commission as a last resort. Going forward, the FCC will have to 
continue to be vigilant about properly calibrating our rules and 
ensuring that carriers and device manufacturers comply with them.

    Question 5. Conservative studies and estimates have suggested that 
use of spectrum on an unlicensed basis contributes at least $50 billion 
annually to the U.S. economy, thanks to the benefits we all gain from 
widespread Wi-Fi availability, or uses like automatic highway toll 
payment, or business uses for smart inventory. Can you talk about the 
priority that the Commission places (or that you will place) on 
ensuring that there is an appropriate mix of spectrum coming to market 
both for auctions and for such unlicensed use?
    Answer. Unlicensed spectrum has flourished in certain spaces, most 
notably Wi-Fi, and is an important component to successful spectrum 
policy. Section 6406 of the recently enacted Middle Class Tax Relief 
and Job Creation Act directs the Commission to begin a proceeding to 
allow unlicensed devices in the 5350-5470 MHz bands. I will work with 
my colleagues to implement this provision as expeditiously as possible.
Privacy
    The FCC recently concluded an investigation into the Google Wi-Fi 
data collection incident where the agency found that Google's actions 
did not violate section 705 of the Communications Act due to the fact 
that the incident occurred on unencrypted Wi-Fi, rather than a secured 
network.

    Question 6. In light of the result of this investigation, do you 
believe that Congress should update section 705 to account for this gap 
in the FCC's wiretap provisions?
    Answer. As the Enforcement Bureau noted in concluding its 
investigation of this incident, ``there is no Commission precedent 
addressing the application of section 705(a) in connection with Wi-Fi 
communications.'' Google, Inc., File No. EB-10-IH-4055, NAL/Acct. No. 
201232080020, FRNs: 0010119691, 0014720239, Notice of Apparent 
Liability for Forfeiture, DA 12-592, at para. 53 (Apr. 13, 2012) 
(Google Order). Rather than decide whether section 705 applied to 
unencrypted Wi-Fi networks (which would have required a Commission-
level decision since the Bureau does not have authority to resolve 
``novel'' issues of law, see 47 C.F.R. Sec. 0.311(a)(3)), the Bureau 
declined to prosecute the action given its view that there was a lack 
of ``sufficient evidence'' of a violation. See Google Order at para. 
53. As such, the Commission has not yet determined whether a gap exists 
in section 705's wiretap protections.
Interoperability
    Interoperability of consumer devices within a spectrum band helps 
promote competition in wireless services. Since the early 1980s, the 
Commission has adopted rules or sent strong messages that it expects 
wireless service licensees to offer consumers equipment that can 
operate over the entire range of an allocated spectrum band. But 
interoperability does not yet exist in perhaps the most valuable 
spectrum bands the FCC has ever allocated--the lower 700 MHz band. In 
March, the FCC initiated a proceeding to promote interoperability in 
this band. I noticed that the NPRM would prefer that the industry 
propose a voluntary solution, as would I, but you also indicated an 
interest in moving to rules if that voluntary approach is unsuccessful.

    Question 7. Do you believe interoperability of devices within this 
band matters, what is the FCC staff doing to monitor the efforts of the 
industry at arriving at a voluntary solution for the lower 700 MHz 
band, and how much more time do you believe the industry should have 
before you would push to conclude this proceeding and adopt rules if it 
appears that an industry solution is not possible?
    Answer. As you indicated above, before I was confirmed by the 
Senate, the FCC adopted a Notice of Proposed Rule Making (NPRM) 
addressing this issue. That rulemaking proceeding remains open, and I 
have met with interested parties to hear their perspectives on the 
issue. It is my hope that that the parties involved will work 
collaboratively to develop a private-sector solution. At this point, I 
am skeptical that publicly announcing a Commission deadline for those 
efforts would give both sides the proper incentives to reach an 
agreement.
Public Broadcasting
    As a long-time supporter of public broadcasting, I believe that it 
plays a special and necessary role in our media landscape. I was 
pleased to see that on November 4, 2011 the FCC Consumer Advisory 
Committee adopted a recommendation that the FCC work with the 
Administration and Congress to support continued Federal funding of the 
Corporation for Public Broadcasting and local public broadcast 
stations, including those providing service to rural, tribal, native, 
and disability communities.

    Question 8. Do you support this recommendation from the FCC 
Consumer Advisory Committee and can you share your views on the unique 
and necessary role that public broadcasting plays in our media 
landscape?
    Answer. I believe that non-commercial broadcasters, including 
public broadcasters, play a vital role in our media landscape. As a 
parent, for example, I have a firsthand appreciation of the valuable 
children's educational programming aired by public broadcasters. At the 
FCC, it is our job to maintain a regulatory environment that allows 
non-commercial broadcasters to do what they do best. Congress, for its 
part, determines the funding level received by public broadcasters and 
in making that decision must consider the important service those 
broadcasters provide along with many other factors. As an FCC 
Commissioner, I am reluctant to step outside my lane and involve myself 
in appropriations decisions involving non-FCC funds.
The U.N. and International Negotiations on Internet Governance
    As former Congressman Boucher recently explained, ``The best way to 
understand the current system of global Internet governance is as a 
hub-and-spoke relationship. At the hub, a loose confederation of 
standards-setting bodies ensures the Internet's continued stability and 
functionality. Little, if any, regulation occurs at the hub. This 
arrangement leaves tremendous leeway for the sovereign governments--the 
``spokes''--to regulate the Internet within their borders.''
    And that system has worked relatively well, with some unfortunate 
outliers trying to control their population's access to information. 
Yet, there is pressure abroad for a new U.N. agency to assert 
international governmental control over the Internet. That pressure is 
coming from countries who wish to impose new tolls on service and 
countries that fear the power of open discourse on the Internet.
    In a recent blog post, NTIA Administrator Strickling wrote about 
these proposals from China and others, ``This is contrary to President 
Obama's vision of an Internet that is interoperable the world over, and 
the United States will vigorously oppose such barriers.'' And I know 
that this is a priority for Ambassador Philip Verveer and the State 
Department as well.

    Question 9. Do all of you share the Administration's point of view?
    Answer. I believe that the Commission should continue to support 
the Administration's work to promote a global Internet free from 
government control and to preserve and advance the successful multi-
stakeholder model that governs the Internet today.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Mark Pryor to 
                             Hon. Ajit Pai
CVAA
    The 21st Century Communications and Video Accessibility Act (CVAA) 
was enacted to update the media and communications accessibility 
requirements and expand access to current and emerging technologies.
    I have heard concerns about the population of the statutorily 
required advisory committees and the resulting recommendations. 
Consumer and advocacy groups that serve on these committees face 
technical and legal capacity constraints that many businesses do not.

    Question 10. Will you be cognizant of these inherent limitations 
and keep them in mind as you consider the recommendations put forth by 
the advisory committees?
    Answer. Yes.

    Question 11. How does the Commission plan to ensure that video 
conferencing services used by consumers who are deaf or hard of hearing 
are interoperable with each other?
    Answer. The Commission's rules require that Video Relay Services 
(VRS) and equipment be fully interoperable. This obligation is designed 
to ensure that those who obtain VRS video conferencing services and 
equipment are able to communicate with each other. The Commission has 
sought comment on how interoperability should work in the broader 
context of advanced communications services, including for users who 
are deaf or hard of hearing, and I look forward to reviewing the record 
that has been compiled in that proceeding.
700 MHz Spectrum
    It is my understanding that the Commission has initiated a Notice 
of Proposed Rulemaking regarding interoperability in the lower 700 MHz 
band.

    Question 12. Does the Commission anticipate the completion of this 
proceeding before the end of the year?
    Answer. As a Commissioner, I do not have control over when items 
are brought to the floor for the Commission's consideration, so I 
cannot say when the Commission will complete this proceeding. In the 
meantime, I hope that the interested parties will work together to 
develop a private-sector solution.
Low Power Television
    For many years, Class A and Low Power Television Service (LPTV) 
stations have provided valued local, religious, Spanish language, and 
other programming. Communities have come to rely on this niche 
programming that may not otherwise be available.

    Question 13. How will the Commission work to ensure the viability 
of Class A and LPTV during its implementation of the Middle Class Tax 
Relief and Job Creation Act?
    Answer. The Middle Class Tax Relief and Job Creation Act provides 
Class A stations with all of the protections provided full-power 
television stations, and the Commission must comply with this statutory 
mandate when implementing our incentive auction authority. With respect 
to LPTV stations, I believe that they should continue to be part of the 
media landscape. In section 6403(b)(5) of the Middle Class Tax Relief 
and Job Creation Act of 2012, Congress specifically addressed the 
spectrum usage rights of LPTV stations, and it is the Commission's duty 
to implement the legislation as written.

    Question 14. What is your position on mandatory channel sharing for 
LPTV?
    Answer. In an order adopted earlier this year, the Commission 
decided that LPTV stations would not be eligible to participate in 
channel sharing arrangements as a part of the incentive auction process 
but that the Commission would consider in a future proceeding whether 
to allow LPTV stations to enter into such arrangements. I had not yet 
arrived at the Commission when that order was issued, and I have not 
had the opportunity to review the record that was developed by the 
Commission. As a result, I do not have a firm view on this issue.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Claire McCaskill to 
                             Hon. Ajit Pai
    Last year, I raised concerns with the FCC regarding the Universal 
Service Fund's (USF) Lifeline Program. In response to these concerns, 
the Commission has taken steps to crack down on waste, fraud and abuse 
within the program. The recent announcement that 20,500 letters will be 
sent in Missouri to eliminate duplication was welcome news. The 
implementation of a database to help detect and prevent duplicates is 
an important tool, but I remain concerned that further action needs to 
be taken to address fraud.

    Question 1. Has the FCC conducted its own investigation into 
possible fraud occurring within the Lifeline program, and if so what 
were the findings of that investigation?
    Answer. Waste, fraud, and abuse of universal service funding is 
unacceptable, and although I was not a Commissioner at the time, I 
welcomed many of the reforms the Commission adopted for the Lifeline 
program in February. I understand that the Commission has instructed 
the Universal Service Administrative Company to investigate allegations 
of fraud regarding duplication through a process known as in-depth data 
validation. I understand that project is ongoing and is likely to 
result in the savings of millions of dollars of universal service 
funding that would have otherwise been wasted.

    Question 2. Has the Commission examined the marketing agreements 
providers are using to advertise Lifeline products to consumers?
    Answer. Although the Commission's rules require eligible 
telecommunications carriers to advertise the availability of their 
services, including Lifeline services, I am unaware of any specific 
inquiries by the Commission regarding the marketing agreements 
providers are using to advertise Lifeline products.

    Question 3. As required by the Commercial Advertisement Loudness 
Mitigation (CALM) Act, the FCC published an order last December 
outlining practices that networks and cable stations must implement by 
this December. I understand these rules have not yet been published in 
the Federal Register, and I have heard little about progress since 
December. Are we on track to see this legislation--strongly supported 
by consumers--fully implemented by the end of the year?
    Answer. I have been informed by the Media Bureau that the 
regulations implementing the CALM Act are scheduled to take effect on 
December 13, 2012.

    Question 4. In December, the International Telecommunication Union 
(ITU) will convene the World Conference on International 
Telecommunications (WCIT-12) in Dubai to renegotiate the International 
Telecommunication Regulations. A key topic of discussion is expected to 
be whether and how to expand it to cover the Internet. To what extent 
is the FCC involved in policy and technical discussions in advance of 
the ITU meeting?
    Answer. I understand that the Commission has been actively engaged 
in and supportive of administration and congressional efforts to retain 
the multi-stakeholder governance model that has become so central to 
the success of the Internet.

    Question 5. What is the view of the Commission on proposals by 
other nations to move oversight of critical Internet resources, such as 
naming and numbering authority, to the ITU or other international body?
    Answer. I oppose such proposals, and several of my colleagues 
(including the Chairman) share the view that the global Internet should 
remain free from government control and that we should preserve the 
successful multi-stakeholder model that governs the Internet today.

    Question 6. American companies have had an historical advantage 
when it comes to the Internet because the innovation that has fueled 
the growth of the Internet started here. Companies were created in an 
environment where unconstrained Internet access provided them with a 
platform to succeed. In this way, America had a ``strategic bandwidth 
advantage'' over other countries. It was perhaps inevitable that this 
advantage would narrow, as broadband speeds have improved around the 
world. Given that context: Is it your view that this ``strategic 
bandwidth advantage'' has led and will continue to lead to job creation 
and greater innovation?
    Answer. Our country's historic decision to allow the commercial 
Internet to develop and grow unfettered by government regulation has 
led to the blossoming of the online economy, the creation of hundreds 
of thousands of jobs, and greater innovation. To retain our advantage 
over other countries, however, we must redouble our efforts to remove 
regulatory barriers to technological innovation and infrastructure 
investment.

    Question 7. There has been bipartisan consensus in this body to 
encourage deployment and adoption of broadband for the economic and 
social benefits it brings. How do data caps help or hinder in 
accomplishing that goal?
    Answer. Like the meters that measure electricity usage and the 
buckets-of-minutes consumers purchase for their cellphones, data caps 
may be a method of ensuring that consumers get what they pay for and 
that low-use consumers are not penalized for the demands others put on 
the network. They can also help manage congestion and thus improve 
customers' broadband experience.

    Question 8. On the surface, usage-based billing makes sense for 
consumers but I am concerned about the chilling effect data caps could 
have on future growth of Internet video and other content. How do we 
ensure fair billing practices for consumers without creating a system 
that stifles innovation and growth of the Internet?
    Answer. Given the dynamism of and swift innovation in the online 
environment--not to mention the explosion in Internet video products in 
recent years--I believe that we should carefully monitor the situation 
but at the same time remain cautious about intervening in this area.

    Question 9. I am sure you would acknowledge the FCC's long-standing 
support of low power television and appreciate the success of low power 
TV since the FCC created the service in 1982. During this span of 30 
years you are no doubt aware that low power TV has developed into an 
essential source of information and entertainment for many diverse 
communities across the country. I think two perfect examples of this 
dynamic would be the audiences who enjoy Spanish-language programming 
and those who enjoy religious programming. Likewise, LPTV has been the 
an entry point for small businesses into the broadcast market and 
today, many LPTV owners are small businessmen who work hard to continue 
to serve their local communities with news and resources aimed at the 
community.
    With this in mind, and also considering the likely end to a great 
deal of low power programming as a result of the repacking, how do you 
expect that this approaching void in unique programming will be filled 
with respect to the core missions of diversity and localism?
    Answer. I agree with your assessment of the valuable role played by 
LPTV stations and believe that they should continue to be a part of the 
media landscape. As the Commission begins to implement its incentive 
auction authority, we must closely examine the issues that you raise in 
your question. We are in the earliest stages of the implementation 
process; in fact, we have not yet issued a notice of proposed 
rulemaking to commence the proceeding. Accordingly, at this point, it 
is too soon to say whether and how repacking will affect LPTV stations' 
operations and programming.

    Question 10. I would ask each of the commissioners, will you 
support rules that allow LPTV to survive after the repack?
    Answer. I believe that low-power TV stations should continue to be 
a part of the media landscape. The Middle Class Tax Relief and Job 
Creation Act provides Class A low-power stations with all of the 
protections provided full-power television stations, and the Commission 
must comply with this statutory mandate when implementing our incentive 
auction authority. In section 6403(b)(5) of the Middle Class Tax Relief 
and Job Creation Act of 2012, Congress specifically addressed the 
spectrum usage rights of other LPTV stations, and it is the 
Commission's duty to implement the legislation as written.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Amy Klobuchar to 
                             Hon. Ajit Pai
    As I brought up in the FCC nominations hearing in November, we have 
a population of television stations currently operating on the northern 
border of Canada, particularly in Lake of the Woods County. They 
applied for channel reallocation after the DTV transition but had to 
wait years to get final approval from the Canadian government and the 
FCC this January.

    Question 1. Looking ahead to the future, the need for international 
cooperation when it comes to spectrum is important to our translator 
operators on the northern border. Has the Commission begun coordination 
with our Canadian counterparts as it relates to incentive auction 
legislation passed in February? ** (Senator Klobuchar asked this 
question in Committee and requested written follow up)
    Answer. Yes. I have been informed that staff from the International 
Bureau has already met with their Canadian counterparts to discuss the 
incentive auction legislation.

    Question 2. I believe of one of the most impressive programs the 
FCC operates is the E-Rate program supporting communications technology 
in schools and libraries. Senator Rockefeller and Senator Snowe led the 
effort in creating a program that truly benefits schools and kids 
around the country. Minnesota has received a total of $344 million 
since the E-Rate program started in 1998. This support has enabled 
schools and libraries across rural Minnesota to have telecommunications 
and broadband service giving students the ability to enhance their 
education. I understand that with the increase in demand from schools 
for broadband support, E-Rate program resources are stretched thin, 
including staff time to review and audit applications. Will you commit 
to keeping the resources for administering the E-Rate program targeted 
at the intended focus of connecting schools and libraries with 
communication technologies?
    Answer. Yes. As I indicated at the hearing, I oppose the use of E-
Rate funds for a digital literacy program.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Mark Warner to 
                             Hon. Ajit Pai
    Two years ago, the President announced his intention to free up 500 
MHz of spectrum for wireless broadband use. This initiative is even 
more necessary today due to exploding data usage by consumers, which is 
leading to faster-than-expected capacity constraints across the 
country.

    Question 1. Are you satisfied with the current pace of the 
identification and reallocation of spectrum to commercial broadband 
use? If not, why not?
    Answer. I am deeply concerned that the Commission is not on track 
to meet the goals set forth in the National Broadband Plan. In 
particular, our goal of reallocating 300 MHz for mobile broadband by 
2015 will soon slip out of reach unless we turn things around. 
According to the timetable set forth in the National Broadband Plan, by 
2012 we were supposed to have reallocated 180 MHz for mobile broadband. 
Unfortunately, however, no new spectrum has been made available that 
can be used effectively for wireless broadband in the more than two 
years since the National Broadband Plan was released.

    Question 1a. Do you have additional suggestions about how Congress 
or the Federal Government could accelerate the process?
    Answer. There are three things that the Commission should do in the 
near term to get us back on track to meeting the goals set forth in the 
National Broadband Plan. First, we should adopt service, technical, and 
licensing rules for AWS-4 by the end of September to put an additional 
40 MHz of spectrum toward terrestrial mobile broadband. Second, we 
should take action by the end of August so that 4G LTE technology can 
be deployed in the Wireless Communications Services (WCS) band. 
Finally, we should initiate the rulemaking process for implementing 
incentive auctions by this fall and set a deadline of June 30, 2014 for 
conducting those auctions.

    Question 2. The USF reforms--which I supported--seek to deploy more 
mobile and fixed broadband services to rural and underserved America. 
At the same time, mobile data forecasts indicate that the volume of 
data traffic on mobile service provider networks will increase 16 times 
from 2011 to 2016. Rural Virginia wants to be part of the broadband 
economy, however, high quality broadband service just hasn't been 
available where consumers and rural economic development needs demand 
it.
    What would happen to the pace of rural broadband deployment if 
Universal Service Fund Reforms are blocked or slowed down at this time? 
Why is it important to move forward in terms of leveraging existing 
Federal funding to deploy more broadband to rural and underserved 
America?
    Answer. Communications infrastructure requires not a one-or two-
year investment, but a five-or ten-year commitment. As such, a constant 
stream of reforms every year or two is unlikely to give investors much 
certainty. Instead, the Commission needs a long-term strategy and must 
sometimes be patient before demanding more from the industry. Indeed, 
Congress recognized that smart infrastructure investment takes time 
when it instructed the Commission to make universal service support 
``predictable.'' Phase I of the Connect America Fund provides only 
short-term, one-time subsidies for deployment, without the long-term 
stability needed to create a business plan in rural America. The 
Commission must move past the one-off distributions of funds in Phase I 
and move onto the long-term support envisioned by Phase II of the 
Connect America Fund in order to provide predictable Federal funding to 
support rural broadband deployment. That's not to say the Commission 
should rush to judgment, only that we cannot delay in making the hard 
choices in order to accelerate rural broadband deployment.

    Question 2a. I sent a letter to the FCC in 2011 arguing that 
although 4 Mbps download/1 Mbps upload may be adequate for now, this 
standard should not be considered an acceptable level of service in the 
future. How important is it to you to see that the acceptable level of 
broadband service advances over time?
    Answer. As the marketplace evolves and consumers adopt faster 
broadband connections, the Commission must continue to evaluate whether 
the speed tiers it has adopted are adequately fulfilling their purpose, 
while constantly balancing the consumer benefits of faster speeds 
against the budgetary implications of such requirements.

    Question 3. The Commission has a number of highly anticipated open 
Notices of Proposes Rulemaking. Now that the Commission has five highly 
capable commissioners, how soon do you expect to reach decisions on key 
issues? I would encourage you to reach decisions on important matters 
as soon as possible because the delay of long-standing rulemakings has 
caused some frustration.
    Answer. The FCC should be as nimble as the industry we oversee. As 
the pace of private sector innovation accelerates, it is imperative 
that the FCC become more agile. Bureaucratic inertia should not be a 
barrier to the deployment of new services or capital investment. 
Rather, the Commission should facilitate economic growth and job 
creation by making decisions in a timely manner.
    As a Commissioner, I do not set the Commission's agenda, and so I 
cannot speak with certainty when the Commission will act in any 
particular rulemaking proceeding. However, I can state my commitment to 
act promptly when presented with an agency proposal that is based on a 
well-developed record. Delays at the Commission can do a disservice to 
the parties to a proceeding and ultimately to the American public.

    Question 4. Looking back at FCC data stretching to 2005, the number 
of full-time equivalents in the Office of Engineering and Technology 
appears to have dropped from 116 to 81. Do you believe this reduction 
is the source of the backlog? Why has this office, which would seem to 
be at the heart of the Commission's work, have declined over time when 
other bureaus or offices have grown or at least stayed flat?
    Answer. Today's communications marketplace is dynamic, and it is 
accordingly essential for the Commission to have the personnel 
necessary to successfully execute its mission. Based on my experience, 
the engineers in the Commission's Office of Engineering and Technology, 
as well as engineers working in the Commission's various Bureaus, do 
outstanding work and provide the Commission with invaluable counsel. 
However, I do agree that the Commission should bolster its engineering 
resources to the extent that it has the resources to do so.
    As a Commissioner, I do not make the Commission's staffing 
decisions, and I thus cannot speak authoritatively as to why there has 
been a decline in staff within the Office of Engineering and Technology 
since 2005.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Mark Begich to 
                             Hon. Ajit Pai
    Chairman Genachowski, I want to thank you for working with me 
during the FCC's recent efforts to reform the Universal Service Fund. I 
understand the need for efficiencies, and overall support the notion of 
USF reform. I also understand the FCC's efforts to work within a 
reasonable budget. However, the reality is that given Alaska's 
geography, distance from the lower 48, and the very remote locations of 
small rural communities, all of whom must be connected to ``the grid'' 
via ``middle-mile'' terrestrial, satellite or undersea fiber circuits, 
means that Alaska is very different. Our distances are greater, our 
population is smaller, and our costs are much higher, particularly as 
it relates to the very high cost of middle-mile circuits for broadband.

    Question 1. I understand the Commission desire to establish capital 
expense and operating expense limits for rural rate of return carriers. 
And, whether I agree or not, I understand that your staff's recent 
order establishing what is called a ``regression analysis'' to limit 
expenses puts a limit on most small companies at their current level of 
capital and operating expenses. Thank you for revisiting the formula 
recently, however there are still some companies that will be severely 
impacted by reductions to be implemented on July 1. I understand that 
your staff is well aware that the model contains data errors and other 
possible analytic flaws.
    Since your staff admits that these flaws exist, why doesn't the FCC 
limit the July 1 impact to the proposed limitation of all companies to 
their current level of expenses instead of implementing the reduction 
on a few when the reductions may be based on data errors and flaws. I 
know that the order limits the initial level of the impact and 
transitions in the impact, but why implement this reduction on a few 
until you know that you have it right?
    Answer. Given the known errors in the study area boundary maps used 
by the quantile regression analysis, as well as anomalies such as the 
additional limitations on capital expenditures that the quantile 
regression analysis imposes on Alaska companies (despite the 
difficulties carriers have deploying service in Alaska), I support 
suspending implementation of the quantile regression analysis until the 
end of 2012 to give the Commission time to review the pending 
applications for review and fix any errors in the analysis. It is 
important to note that taking this step would not increase overall 
universal service expenditures.

    Question 2. It appears highly likely that as a result of the 
November USF/ICC order many rural carriers will lose revenues--both USF 
support and from elimination of crucial intercarrier compensation. Is 
that correct?
    Answer. Although I was not a Commissioner at the time of the 
adoption of the USF/ICC Transformation Order, I have looked at the 
staff analysis of the impacts of that order, and I understand that some 
rural carriers will lose a significant amount of USF support and others 
will gain a small amount of USF support. Rural carriers will also 
receive reduced intercarrier compensation over time, although the USF/
ICC Transformation Order also included methods to offset those losses, 
at least in part.

    Question 3. Alaska, like 22 other states, has a complimentary state 
level universal service program. The Alaska state fund disburses over 
$15 million to Alaskan carriers each year. Do you anticipate these 
State funds will have to expand to cover revenue lost from the reforms 
you are implementing? And if so, have you calculated how much these 
State funds will need to grow?
    Answer. Some states have considered expanding the size of their 
state-level funds in response to the USF/ICC Transformation Order; 
others have not. It is up to each state (or state commission) to 
determine the response most appropriate to the unique challenges that 
state faces in deploying telecommunications to its people. I am not 
aware of any staff analysis of how much these state-level funds may 
grow in light of the USF/ICC Transformation Order's reforms.

    Question 4. The E-Rate program has always meant a great deal to the 
State of Alaska, ensuring that the children and educators living and 
working in our state's most remote towns and villages have access to 
the Internet and distance learning and professional development courses 
that are otherwise unavailable to them locally.
    Let me quote from comments filed with the FCC last week by the 
Superintendent of the Dillingham City School District: As a small, 
rural school district in Alaska that has high poverty, low socio-
economic, and predominantly native Alaskan population (Yupik), ``I want 
to thank the FCC for our current level of E-Rate funding. We are an 
``off the road'' community, meaning the only way in and out is by air, 
dog sled, snow machine, or boat. We just recently acquired access to 
high-speed fiber Internet via GCI Corporation extending this service to 
rural, remote areas of Alaska. The cost for this more than doubled our 
annual rate and without the current E-Rate support we could not afford 
this service.''
    Is there a better way to administer the digital literacy program 
without damaging E-Rate processing?
    Answer. As I indicated at the hearing, I oppose the use of E-Rate 
funds for a digital literacy program. And I share your concern that the 
creation of a digital literacy program may make it difficult for the 
Universal Service Administrative Company to administer the E-Rate 
program as well.

    Question 5. Also wish to highlight the importance of keeping intact 
reliable source of communications to relay emergency and lifesaving 
information to those areas that lack reliable cellular or Internet 
service.
    It is imperative that rural communities continue to have reliable 
sources of communications in cases of emergency and lifesaving 
situations. Can the Commission comment on ways to improve the 
distribution of emergency alert information?
    Answer. Over the past five years, the Commission has issued a 
series of orders to improve the Emergency Alert System (EAS), and we 
must continue this important work. In general, I believe that we must 
emphasize technological redundancy when it comes to emergency alert 
information. That is, such information should be distributed through a 
variety of different methods (e.g., broadcast, cable, mobile, etc.). 
Greater redundancy will increase the chances that a particular 
individual will receive emergency alert information.

    Question 6. The due diligence work done day in and day out by local 
broadcasters will be lost if constituents can't receive it. How does 
the FCC intend to improve this?
    Answer. I believe that it is very important that we continue to 
maintain the broadcast-based legacy EAS. The Commission noted earlier 
this year that switching to a fully Common Alerting Protocol (CAP) EAS 
system is not technically feasible at the present time. Therefore, we 
must work to improve the efficacy of the broadcast-based system while 
we phase in CAP capabilities.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Olympia J. Snowe to 
                             Hon. Ajit Pai
FCC Technical Expertise
    In Chairman Genachowski's remarks, he stated the Commission is 
operating with its lowest number of employees. The FCC is also 
unfortunately operating at one of its lowest number of engineers--over 
a 60 percent reduction in engineers from the 1950s to today--yet the 
Commission is dealing with significantly more technically complex 
issues such as advanced wireless communications, commercial cable & 
satellite industries, public safety interoperability, more device 
certifications, and broadband.
    Engineers at the FCC play an essential role in regulatory matters 
by providing technical consultation on policy matters, managing 
spectrum allocations, and creating new opportunities for competitive 
technologies. I'm concerned this lack of expertise is hampering 
innovation and job growth because of the excessive delays to businesses 
that are waiting approval to technical waivers, experimental licenses, 
and filed petitions at the agency.
    Others share my concern, a 2009 Government Accountability Office 
report found that the agency ``faces challenges in ensuring it has the 
expertise needed to adapt to a changing market place.'' And 2011 
Wireless Report by the National Research Council suggested the FCC 
would benefit from ``enhancing its technology assessment and 
engineering capabilities'' due to ``entering an era in which technical 
issues are likely to arise on a sustained basis.''
    Question 1. Do you believe the FCC has the sufficient level of 
technical resources, given the concerns various entities have raised?
    Answer. It is essential to the successful execution of its mission 
that the Commission has the necessary technical capabilities and 
engineering expertise available to inform its work as it responds to 
the many technically complex issues facing it in today's dynamic 
telecommunications marketplace. Based on my experience, the engineers 
in the Commission's Office of Engineering and Technology, as well as 
engineers working in the Commission's various Bureaus, do outstanding 
work and provide the Commission with invaluable counsel. However, I do 
agree that the Commission should further bolster its engineering 
resources to the extent that it has the resources to do so.
Unlicensed Spectrum
    In your opening statement, you highlight the importance of 
incentive auctions to meeting the growing demand for wireless 
broadband. Obviously, the spectrum made available through incentive 
auctions will primarily be exclusive licenses--the recently passed 
legislation does allow unlicensed use in the guard and gap bands but it 
isn't clear how much will be available.
    As you may be aware, one concern I had about the legislation was 
its impact on unlicensed opportunities in the TV band. My belief is 
that possible such allocation would allow for a new wave of innovation 
different from but complimentary to the work in the licensed space--it 
shouldn't be an ``either-or'' scenario but an environment where both 
can thrive.
    Unlicensed use created markets for Wi-Fi, Bluetooth devices, 
cordless phones, and countless other innovations and with it hundreds 
of companies and thousands of jobs. And the consumer demand for 
unlicensed spectrum and devices is undeniable--more than 80 percent of 
smartphone users prefer Wi-Fi over cellular for mobile data and 65 
percent of tablet users utilize Wi-Fi connections exclusively.
    In addition, over 1 billion Wi-Fi devices shipped globally in 2011, 
and by 2014, 90 percent of smartphones will be Wi-Fi enabled. The 
economic impact is also significant--a 2009 report by Perspective 
Associates estimated unlicensed applications could provide up to $37 
billion of economic benefit annually over the next 15 years to our 
economy.

    Question 2. What are your views on the role of unlicensed spectrum 
and should the FCC explore greater opportunities for unlicensed use 
outside of the traditional bands, such as 2.4 GHz and 5 GHz?
    Answer. With the growing proliferation of wireless services and 
devices in the marketplace, the FCC must do all that it can to make 
more spectrum available for commercial use and to utilize spectrum that 
is already in use more efficiently. To meet this challenge, I intend to 
take an ``all of the above'' approach to spectrum policy, which 
includes exploring opportunities for unlicensed spectrum where 
feasible.

    Question 3. Should the FCC perform a similar exercise to Ofcom, the 
U.K. regulator, in creating a report (License-Exemption Framework 
Review) that provides a framework for exploring and managing unlicensed 
use of spectrum?
    Answer. The FCC should study Ofcom's License-Exemption Framework 
Review (LEFR) carefully and then decide whether to perform a similar 
exercise.
Competition and Innovation
    A growing number of consumers are combing traditional media 
services with more innovative products that allow them to stream online 
content. Some products allow consumers to stream online content of all 
types and aggregate it with either free OTA broadcasts or basic cable 
service.
    The Commission is considering an order that would allow for the 
encryption of basic cable signals. While there are several benefits to 
encrypting basic cable service, there are also some concerns that 
innovative devices allowing users to combine online content with basic 
cable service may no longer be compatible without additional hardware 
or software or reduce functionality of the device, and may face 
additional monthly fees for a cable box. As you know, Congress 
specifically addresses this issue in Section 624A of the statute (47 
U.S.C. 544a), which requires the FCC to assure compatibility between 
consumer electronics equipment and cable systems so cable customers can 
enjoy the full benefits of both.

    Question 4. Is there a solution that would provide the positive 
benefits of cable encryption to cable operators while also allowing for 
IP-based devices and other innovative products that more consumers are 
purchasing to have the opportunity for success in the marketplace? Are 
there any risks to consumers of allowing innovative devices the ability 
to decrypt the basic cable signals so they can access those channels 
unencumbered by additional equipment or reduced functionality?
    Answer. The Commissioners have not yet been presented with an item 
addressing the encryption of basic cable service. It is my 
understanding, however, that efforts are underway to find common ground 
on this issue between cable operators and other device manufacturers. 
Once an item is circulated for the Commission's consideration, I look 
forward to reviewing it and assessing whether it should be adopted 
given the potential benefits and risks mentioned above.

    Question 5. It's my understanding that other non-cable MPVDs are 
able to encrypt all of their video signals, even basic video service. 
Should Congress revisit the statute to provide greater parity in 
regards to signal encryption?
    Answer. It is true that other non-cable MVPDs, such as DBS 
providers, are able to encrypt all of their programming. As a general 
matter, I believe that there should be regulatory parity among 
competitors so that the government is not in a position of picking 
winners and losers in the marketplace. To the extent that there is not 
a persuasive technological justification for the disparate treatment of 
MVPDs with respect to encryption, it would be appropriate for Congress 
to take another look at the statute.
Universal Service Fund & E-Rate
    The National Broadband Plan and subsequent research have identified 
the lack of digital literacy among low-income Americans as a major 
barrier to broadband adoption. To address this, the Commission proposed 
implementing and operating a digital literacy program through the E-
Rate program's administrative structure. The FCC has proposed $50 
million in annual funding over a four year period and that such funds 
would be provided through saving from the restructuring of the Lifeline 
program. While I'm a strong advocate for a greater focus on improving 
digital literacy to spur broadband adoption, I'm concerned about the 
impact this proposed program will have on the E-Rate program, if it is 
administered through it.

    Question 6. I'm concerned the proposed Digital Literacy program 
will be difficult to monitor. With E-Rate, it is possible and cost-
effective to send auditors to school and library sites to ensure 
applicants have actually purchased and installed the equipment for 
which they received E-Rate support and providers have actually 
delivered promised services. By contrast, it seems it may be difficult 
for auditors to determine this proposed digital literacy initiative's 
funds have actually been spent on courses. Can you tell me how USAC 
could properly audit this digital literacy initiative?
    Answer. As I indicated at the hearing, I oppose the use of E-Rate 
funds for a Digital Literacy program. With respect to using other 
universal service funds for a Digital Literacy Program, I share your 
concern that it would be difficult for USAC to properly audit it. Along 
these lines, I would note that although the Commission sought comment 
generally in its recent Further Notice of Proposed Rulemaking on 
whether USAC should administer the program, the Commission's inquiry 
did not specifically seek comment on whether USAC could properly audit 
the program if given this responsibility or whether any of the existing 
auditing procedures employed by USAC in its oversight of other 
universal service programs could be used effectively to guard against 
waste, fraud, and abuse in the proposed program. Moreover, the FNPRM 
did not ask whether the additional responsibility of overseeing a 
Digital Literacy program would compromise USAC's ability to 
aggressively uncover waste, fraud, and abuse in the existing universal 
service programs. These are all important questions that must be 
answered.
Competitive Access to Spectrum
    The ``spectrum crunch'' is not exclusive to just one or two 
carriers, it is industry wide. And while the top four carriers provide 
wireless service to 90 percent of the total subscribers in the U.S., 
more than 30 million other subscribers use someone else. As you know, 
Section 309(j)(3) of the statute (47 U.S.C. 309(j)(3)) requires 
Commission to promote ``economic opportunity and competition'' by 
``disseminating licenses among a wide variety of applicants'' including 
small businesses, rural carriers, and minority and woman-owned 
businesses.

    Question 7. How should the FCC ensure, in a fair and competitive 
manner, that all carriers--large and small--have adequate access to 
this critical but finite resource?
    Answer. The best way to solve the spectrum access problem is to get 
as much additional spectrum into the marketplace as possible, encourage 
more efficient use, and have a robust secondary market. Moreover, by 
developing band plans with a mix of geographic licensing areas, we can 
provide better opportunities for smaller businesses and rural carriers 
to obtain spectrum.

    Question 8. Several countries have recently held or plan to hold 
spectrum auctions to make more spectrum available for next generation 
wireless communications and broadband. Some of these countries have 
applied certain conditions to their auctions rules. For example:

  1.  In its 4G auction, France's ARCEP provided bidding preferences to 
        carriers that agreed to host MVNOs on its networks and had 
        enhanced rural build-out requirements. It also required roaming 
        agreements--to a losing bidder--for any carrier that won more 
        than one frequency block.

  2.  Germany's regulator, Bundesnetzagentur, applied rural build-out 
        requirements for its 800 MHz auction and placed bidding 
        restrictions on certain carriers.

  3.  The Netherlands reserved two spectrum blocks in the 800 MHz band 
        and one in the 900 MHz band for new entrants.

  4.  Canada, in its 2008 AWS auction, set aside spectrum for a new 
        entrant.

  5.  Czech Republic's CTU has reserved the 1.8 GHz block for a new 
        entrant

  6.  Ofcom has proposed spectrum caps in its upcoming LTE spectrum 
        auction.

  7.  Australia has proposed spectrum caps for its upcoming auction.

    It should be noted that several of these auctions ended up 
exceeding revenue expectations. I'm not advocating for the 
implementation of any conditions on any future auctions but I'm curious 
as to why these countries deemed it necessary to apply such conditions 
in their auctions rules? Do you believe the FCC should closely 
examination the recent 4G auctions in other countries to assist in 
determining how best to design future domestic auctions?
    Answer. To the extent that foreign communications policies can 
provide lessons (both positive and negative) for the Commission, I 
agree that the Commission should examine the structure and results of 
spectrum auctions conducted abroad.

    Question 9. As you know, Section 309(j)(7) of the statute (47 
U.S.C. 309(j)(7)) expressly prohibits the Commission from using the 
expected revenue from a spectrum auction as a basis for determining the 
public interest of frequency assignments. Furthermore, Congress, in 
H.R. Rep. No. 111, 103d Cong., 1st Sess. 258 (1993), emphasized that 
``important communications policy objectives should not be sacrificed 
in the interest of maximizing revenues.''
    While there is broad agreement auctions are the best mechanism to 
distribute spectrum licenses, is there too much emphasis currently 
being placed on maximizing auction revenues instead of the longer term 
economic benefit that may result? How might such skewed focus on 
proceeds hinder achieving the strategic goals necessary for the long 
term health of the spectrum ecosystem?
    Answer. As you note, section 309(j)(7) of the Communications Act 
prohibits the FCC from making revenues the sole focus of our auction 
efforts. At the same time, revenue to the U.S. Treasury is one of the 
many benefits of spectrum auctions. Over the years, deficit reduction 
from auction proceeds has been a significant factor in compelling 
Congress to make the difficult political decisions necessary to free up 
much-needed spectrum. Large proceeds can also be the sign of a well-
designed auction. As a general matter, I believe that the agency should 
focus on making spectrum available to those who will quickly put it to 
the most productive use. As a result, for example, while it may be the 
case that rules prohibiting the warehousing of spectrum could reduce 
auction revenues under certain situations, it is nevertheless 
appropriate for the Commission to adopt such requirements.
Spectrum Efficiency Metrics
    One of the primary, long-standing goals of the FCC has been to 
promote more efficient use of spectrum. The FCC's 1999 Spectrum Policy 
Statement highlighted ``with increased demand for a finite supply of 
spectrum, the Commission's spectrum management activities must focus on 
allowing spectrum markets to become more efficient..'' and Strategic 
Plan for FY2003-2008 (published in 2002) indicated its general spectrum 
management goal is to ``encourage the highest and best use of spectrum 
. . .''
    In its 2002 report, the Spectrum Policy Task Force developed three 
definitions: spectrum efficiency, technical efficiency, and economical 
efficiency. However, the SPTF concluded ``it is not possible, nor 
appropriate, to select a single, objective metric that could be used to 
compare efficiencies across different radio services.''

    Question 10. In the FCC's search to free up more spectrum for 
wireless broadband, how does the FCC effectively determine and compare 
the spectral efficiency of different types of radio-based services when 
targeting various frequencies for reallocation?
    Answer. The Office of Engineering and Technology informs me that 
the Commission has not yet found a feasible way to apply one specific 
measurement for spectral efficiency across all types of wireless 
services. Instead, the FCC's Technological Advisory Council (TAC) has 
identified a number of metrics that enable efficiency comparisons 
across a variety of satellite and terrestrial based systems categories. 
TAC released a draft white paper on this subject that includes a number 
of suggestions for improving spectral efficiency which are under 
consideration at the Commission.

    Question 11. One of the common spectrum efficiency metrics for 
wireless communications is in terms of bits/second/hertz. Some parties 
have suggested more granular metrics such as bits/second/hertz/pop or 
bits/second/hertz/cell. It seems like there could be several different 
metrics within each definition of efficiency.
    Robin Bienenstock of Sanford Bernstein raised the issue of network 
density and highlighted the difference between the U.S. and European 
countries. Specifically, Ms. Bienenstock compared California with Spain 
(noting similar size, topography, and population density). A major 
carrier in Spain had 33,000 base stations, whereas a major U.S. carrier 
in California had only 6,000 sites. Across the board, the network 
density for operators in Spain is three to six times higher than that 
of operators in California. With more cell sites, there is greater 
spectrum reuse, which means more efficient use, and a lessening of 
demand for the raw material (spectrum).
    Does the FCC use network density as a component of its spectrum 
efficiency metric? If not, given the FCC already imposes build-out 
requirements to licensees, should the FCC explore requiring network 
density guidelines too as a way to promote more efficient use of 
spectrum?
    Answer. The number of cell towers is one of the many factors that 
are considered when evaluating the spectral efficiency of a commercial 
wireless service licensee. The overall analysis hinges on whether the 
licensee is using reasonable available techniques to meet traffic 
demands in dense areas. With respect to your second question, I am open 
to considering any methods by which the agency can promote the more 
efficient use of spectrum, consistent with its statutory authority and 
technical and economic feasibility.

    Question 12. Does the FCC have any additional data on network 
density comparisons of the U.S. in relation to other countries?
    Answer. I have been informed by the Office of Engineering and 
Technology that the FCC has data on many but not all wireless towers in 
the United States and no data on the increasing number of small cells 
being deployed on top of buildings and other objects in dense areas. 
Similarly, the Commission does not have direct access to data on 
network density in other countries.
Resolving the ``Spectrum Crunch'' Through Technology
    I'm concerned there is not enough focus on the role of technology 
in meeting the growing demand for wireless network capacity. An Ofcom 
report rightfully points out increasing wireless network capacity 
depends on a combination of ``spectrum, technology, and topology.'' 
Given the challenges we face with reallocation, I believe technology 
will play an even more prominent role.
    For example, research by Ofcom found that early 4G mobile networks 
will be 230 percent more spectrally efficient than 3G networks and that 
efficiency will increase to 450 percent by 2020. Technologies like 
dynamic spectrum access and cognitive radio can considerably improve 
utilization by allowing more aggressive spectrum sharing, and, though 
many years off, quantum entanglement and ``twisted'' waves hold amazing 
potential to significantly, and even possibly infinitely, increase 
capacity without any additional spectrum.
    However, I'm concerned about the threats the U.S. is facing in 
regards to its leadership in innovation, primarily with ICT. Many 
reports highlight most of the global R&D growth will be mainly 
attributed to Asian economies--according to NSF, the United States' 
share of global R&D expenditures dropped from 38 percent to 31 percent 
between 1999 and 2009, while the Asia region grew from 24 percent to 35 
percent. In addition, more U.S.-based companies are locating R&D 
operations overseas--the number of overseas researchers employed by 
U.S. multinationals nearly doubled from 138,000 in 2004 to 267,000 in 
2009.

    Question 13. What more can the government do (besides make the R&D 
tax credit permanent) to foster greater R&D investment, primarily in 
ICT?
    Answer. The government should embrace tax policies and regulatory 
policies that make the United States the best place in the world to do 
business. We must create an environment that is attractive to 
investment and allows the entrepreneurial spirit of the American people 
to flourish. We also must provide companies with regulatory certainty 
so that they have the confidence to commence long-term projects in our 
country.

    Question 14. Given the benefits that both the private and public 
sectors will reap from more advanced technologies, how can there be 
more collaboration between both sectors to see these technologies to 
fruition?
    Answer. The Commission should approve equipment and devices as 
quickly as possible so that they can be brought to the market with 
dispatch. The Commission should also pursue flexible spectrum policies 
so that new technologies may be deployed into the field without undue 
delay. For companies to pursue new technologies, they must have 
confidence that they will be able to earn a return on their investment 
in a reasonable amount of time.

    Question 15. Does the FCC have any estimates on the amount of 
domestic private sector funding in wireless R&D as a percentage of 
overall industry capital investment? Do you believe there is enough 
domestic R&D investment in advanced wireless communications in 
comparison to other countries?
    Answer. I am informed that the Commission does not have data on the 
amount of domestic private sector funding in wireless R&D. Chapter 7 of 
the National Broadband Plan discussed research and development in 
broadband technologies and made a number of recommendations for action 
by other Federal agencies. The FCC participates in the Wireless 
Spectrum Research and Development (WISARD) group of the National 
Coordination Office for Networking and Information Technology Research 
and Development to help develop priorities, encourage private 
investment, and develop public/private partnerships where appropriate. 
You may wish to contact that organization for further information on 
private sector research and development.

    Question 16. While U.S. industries fund approximately 70 percent of 
domestic R&D, the Federal Government is the primary source of funding 
for basic research, providing approximately 60 percent of funding, and 
industry conducts less than 20 percent of the basic research done in 
the U.S., according to the Science Coalition.
    How important are Federal programs like NSF EARS and DARPA STO to 
the long-term growth and health of innovation in the spectrum ecosystem 
and should Congress provide greater funding for basic research in this 
area?
    Answer. Federal programs that conduct basic research that would not 
otherwise be done in the private sector are important and should 
receive funding. In light of the substantial fiscal challenges faced by 
our country, however, the question whether funding for such programs 
should be increased is one committed in the first instance to Congress' 
discretion.
Spectrum Flexibility
    The National Broadband Plan highlighted the importance of spectrum 
flexibility. The NBP concluded that ``flexibility of use enables 
markets in spectrum, allowing innovation and capital formation to occur 
with greater efficiency'' and ``spectrum flexibility, both for service 
rules and license transfers, has created enormous value.'' That 
innovation and capital formation could be beneficial to addressing the 
challenges that exist in making more affordable and faster broadband 
available in rural areas.
    As you know, Section 336 of the statute (47 U.S.C. 336) allows 
broadcasters to offer ancillary and supplementary services, which 
includes data transmission and interactive materials. Section 336 also 
prescribes the assessment and collection of fees related to such 
service offerings, and the FCC, back in 1998, adopted rules requiring 
broadcasters to pay a fee of 5 percent of gross revenues from such 
services for which they charge subscription fees or other specified 
compensation.

    Question 17. If we need to get broadband into rural areas, why not 
let other licensees, like broadcasters, attempt to close the digital 
divide that exists? Mainly, since they may have infrastructure already 
in place to build off of.
    Answer. I believe that accelerating the deployment of broadband 
into rural areas is a high priority and do not believe that we should 
foreclose the consideration of creative ideas for closing the digital 
divide.

    Question 18. Even though the FCC adopted rules to avoid unjust 
enrichment, some parties have still raised concerns that such 
flexibility would be unfair since the broadcasters weren't assigned the 
spectrum via an auction. However, as you know, the FCC has only 
auctioned licenses since 1994 and prior to that used comparative 
hearings and then lotteries for frequency assignments--including 
licenses for wireless communications.
    If there is concern about ``unjust enrichment'' if broadcasters 
provide broadband, why isn't there the same concern with wireless 
communications licenses issued prior to 1994? Wouldn't the 5 percent of 
gross revenue that broadcasters have to pay if they add broadband to 
their signals fairly compensate the government, mainly since such 
service would have to be ``ancillary and supplementary'' to their 
broadcast television signal?
    Answer. Before reaching a conclusion on these issues, I would want 
to review a properly developed record in the context of a formal agency 
rulemaking.
Spectrum Fees
    Recommendation 5.6 of the National Broadband Plan suggested 
``Congress should consider granting authority to the FCC to impose 
spectrum fees on license holders and to NTIA to impose spectrum fees on 
users of government spectrum'' to address inefficiencies in spectrum 
allocations and promote more efficient use of spectrum. It is my 
understanding that every administration since Clinton has requested 
spectrum fee authority from Congress.
    Ofcom imposed similar fees (known as Administrative Incentive 
Pricing) in the late 1990s and issued a report in 2009 that concluded 
the fees ``met its primary objective in helping to incentivise spectrum 
users to consider more carefully the value of the spectrum they use 
alongside that of other inputs, and to take decisions that are more 
likely to lead to optimal use of the available spectrum.'' The report 
also ``found no evidence to suggest that the application of AIP has 
given rise to material adverse consequences for spectrum efficiency.''

    Question 19. Should Congress grant the FCC and NTIA spectrum fee 
authority either on all licenses and assignments or just on non-
auctioned licenses, mainly if the FCC moves to implement greater 
flexibility of spectrum use? Do you believe the FCC can strike the 
proper balance in applying spectrum fees to promote more efficient use 
of spectrum but not to a point that it presents an undue financial 
burden to the licensee?
    Answer. I prefer auctions to spectrum fees as an efficient way to 
get commercial spectrum into the hands of those who will use it most 
productively and to compensate the American people for this valuable 
asset. As a practical matter, I believe it would be difficult to apply 
spectrum fees fairly and effectively to spectrum licensees for a number 
of reasons, including retroactivity issues, waivers for particular 
services, and decisions about how far up the band they would apply. 
With respect to placing spectrum fees on Federal spectrum, I am open to 
considering a wide range of proposals for encouraging the Federal 
Government to make more efficient use of its current spectrum and to 
relinquish additional spectrum for commercial use.

    Question 20. Some parties have opposed spectrum fees calling them a 
tax. But what is the difference between a spectrum fee that is paid 
annually and a licensee paying a lump sum at an auction? If a spectrum 
fee is a tax, isn't an auction payment a tax as well since it too goes 
to Treasury? Or are both not considered taxes since they are transfers 
to government for the right to use a public good?
    Answer. In my view, the main difference between auctions and 
spectrum fees is that auction prices are determined through a market 
mechanism while fees are generally imposed by government fiat.

    Question 21. If not spectrum fees, how should the FCC impose 
economic fairness between licensees that are/were awarded via auctions 
versus those that were awarded via comparative hearings and lotteries?
    Answer. Some have argued that there is inequity among existing 
wireless licensees because some licensees had to buy their spectrum at 
auction, while others received their spectrum licenses outside of the 
auction process. While I will remain mindful of this concern, my main 
focus will be getting as much spectrum into the marketplace as quickly 
as possible, and with as much flexibility as possible, for the benefit 
of consumers.
                                 ______
                                 
     Response to Written Question Submitted by Hon. John Thune to 
                             Hon. Ajit Pai
    Question. Congress recently passed spectrum auction legislation and 
the Commission will begin setting rules for implementation perhaps as 
early as this fall. I'm hearing from some low power television (LPTV) 
interests in my state who are concerned about how the FCC will handle 
low power stations when the FCC conducts their incentive auctions, and 
subsequently goes through a process of clearing channels 31-51. Low 
power TV stations provide a valuable service, such as local public 
meetings and religious broadcasting. LPTV has been the entry point for 
small businesses into the broadcast market and today, many LPTV owners 
are small businesses who work hard to continue to serve their local 
communities with news and resources aimed at the community. Would you 
support rules that allow LPTV to survive? What assurance can you 
provide that low power television stations will be protected?
    Answer. I believe that LPTV stations should continue to be part of 
the media landscape. In section 6403(b)(5) of the Middle Class Tax 
Relief and Job Creation Act of 2012, Congress specifically addressed 
the spectrum usage rights of LPTV stations, and it is the Commission's 
duty to implement the legislation as written.
                                 ______
                                 
   Response to Written Question Submitted by Hon. Roger F. Wicker to 
                             Hon. Ajit Pai
    Question. Should the pending 700 MHz public safety waivers be 
dismissed/denied?
    Answer. In granting 700 MHz public safety waivers to twenty-one 
recipients more than two years ago, the Commission expressly 
acknowledged the pressing need for public safety to begin development 
and deployment of wireless broadband network infrastructure. It also 
acknowledged that by granting waiver relief, these entities would be 
given a degree of certainty, allowing them to take advantage of funding 
opportunities and to leverage existing deployment plans that may be 
time-sensitive. Moreover, the Commission further acknowledged that 
these early deployments could serve to identify what additional issues 
may arise for public safety in connection with the larger goal of 
establishing a nationwide interoperable broadband network. These 
considerations and benefits have not necessarily changed with regard to 
the waivers that have been granted and may also apply to pending 
requests for waivers. To that end, the wholesale termination of the 
existing waivers and denial of the pending requests for waiver 
authority would be a missed opportunity, which could further delay the 
provision of a critical tool to First Responders and the citizens they 
protect. For these reasons, I believe that each waiver must be analyzed 
carefully on a case-by-case basis.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Roy Blunt to 
                             Hon. Ajit Pai
    Question 1. With the Internet allowing for an almost unlimited 
number of radio competitors to the basic FM and AM stations available 
today, should the Commission look to raise or eliminate the local radio 
ownership caps? If diversity of opinion and meeting the public interest 
are the reasons for having the caps, with Internet competition as 
robust and growing as it is now, why do the caps remain so low?
    Answer. The Commission's media ownership regulations must reflect 
the current state of the marketplace and technological landscape, 
including the Internet, while at the same time safeguarding the 
principles of competition, localism, and diversity. With these 
principles in mind, I will examine the record complied by the 
Commission in the 2010 quadrennial review proceeding and assess whether 
the current radio ownership limits should be modified.

    Question 2. With numerous print newspapers closing down over the 
past decade, do you think that limiting the ownership pool of potential 
buyers for struggling newspapers might be contributing to this? Put 
another way, if the choice is between a local television station owner 
buying the newspaper or the newspaper ceasing to operate, which is the 
ideal?
    Answer. Under this scenario, I would strongly prefer to see a local 
television station buy a newspaper than to see a newspaper cease to 
operate.
                                 ______
                                 
    Response to Written Question Submitted by Hon. John Boozman to 
                             Hon. Ajit Pai
    Question. What short-term solutions for spectrum needs can be 
utilized while longer-term solutions, such as incentive auctions, are 
implemented?
    Answer. The most important thing that the Commission could do in 
the short term is to expedite its consideration of secondary market 
transactions that facilitate the transfer of spectrum to those who will 
put it to the most productive use. Our current process often takes far 
too long and is a major impediment to the efficient use of spectrum. 
Furthermore, the FCC should identify and expedite the consideration of 
all spectrum-related proceedings in cases where spectrum is laying 
fallow or could be put to more productive uses. A recent example of 
this is the Commission's recent order modernizing a burdensome 
regulatory requirement in order to provide certain spectrum licensees 
the flexibility to deploy advanced wireless services in portions of the 
800 MHz band. See Report and Order, In the Matter of Improving Spectrum 
Efficiency Through Flexible Channel Spacing and Bandwidth Utilization 
for Economic Area-based 800 MHz Specialized Mobile Radio Licensees, WT 
Docket No. 12-64 (May 24, 2012), available at < http://
transition.fcc.gov/Daily_
Releases/Daily_Business/2012/db0524/FCC-12-55A1.pdf>. By removing 
outdated rules, the Commission can enable licensees to more efficiently 
utilize spectrum in the short term.
                                 ______
                                 
     Response to Written Question Submitted by Hon. Marco Rubio to 
                             Hon. Ajit Pai
Spectrum
    Question. Cisco's U.S. mobile data forecast projects that mobile 
data traffic will increase 16 times from 2011 to 2016--a compound 
annual growth rate of 74 percent. How will consumers be affected if we 
do not have enough spectrum to keep pace with that demand? How will 
application developers be affected if we do not have enough spectrum to 
keep pace with that demand?
    Answer. If demand exceeds the availability of spectrum, consumers 
would bear the brunt of the impact. They would experience slower data 
speeds, worse service quality, and increased prices. Moreover, 
investment and innovation would suffer. Bandwidth scarcity would deter 
capital investment in the communications industry and discourage 
developers from creating new products and applications for consumers to 
use.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                             Hon. Ajit Pai
    Thank you for your testimony before the Committee. I appreciate the 
time you spent and your thoughtful answers to the following questions.
    As you all know, our economy benefits greatly from the 
communications and technology sector. Competition and innovation have 
created new services and devices as well as high-quality jobs that have 
changed the lives of Americans. This sector is incredibly important to 
sustainable growth of our economy. That is why Congress must push the 
Federal Communications Commission to be the most open and transparent 
agency in the Federal Government. The industries you regulate are too 
important to our Nation.
    Under Chairman Genachowski, I have seen notable steps in the right 
direction, and he has made process a ``top priority.'' That being said, 
I am concerned that the FCC is not always as open and transparent as it 
should be. The problem as I see it today is that the FCC can pick and 
choose the rules it wants to follow when it wants to follow them. This 
method is convenient for the FCC, but it is not good government, and we 
owe more to Americans with business before the FCC.
    I introduced legislation that pushes the FCC toward more 
transparency and openness. The intent of my legislation is not to 
hamstring the agency. It is to push them to be exactly what Americans 
expect from their government, open and transparent regulators of the 
laws passed by Congress.
    A more predictable and consistent FCC will create jobs in Nevada, 
which has the unfortunate distinction of leading our Nation in 
unemployment for over two years. Every government agency should be 
committed to policies that promote job creation, investment and 
innovation. The technology sector has helped growth in our country for 
the last twenty years and will continue to if big government does not 
overburden it.
    I introduced two measures, the Telecommunications Jobs Act (S. 
1817) and the Federal Communications Commission Consolidated Reporting 
Act (S. 1780). These bills push the FCC to be the most open and 
transparent agency in the Federal Government and provide a streamlined 
method of reporting to Congress.
    The following questions are in regards to those bills, and I would 
ask you to please respond to each question.

    Question 1. One of the most important reforms I introduced would 
force the Commission to demonstrate beyond any doubt the need for 
regulation before intervening in the marketplace. I strongly believe 
that a cost-benefit analysis should be conducted on any regulation that 
will have a significant market impact, and I believe that before the 
FCC begins a rule proposal, they survey industry within three years of 
proposing a rule to determine whether that regulation is even 
necessary. A cost-benefit analysis mandating the FCC to identify actual 
consumer harm and conduct an economic, market-benefit analysis is 
consistent with President Obama's Executive Order 13563 on Improving 
Regulation and Regulatory Review. Would you support legislation that 
implements a cost benefit analysis consistent with the President's 
Executive Order? If not, why?
    Answer. Yes, I believe that the Commission should make a 
determination that the benefits of any proposed rule outweigh its costs 
before any new rule is adopted.

    Question 2. Do you support legislation mandating the FCC to survey 
the marketplace within three years before initiating a rulemaking?
    Answer. I believe that the Commission should regularly survey the 
marketplace and that it is important to do so before enacting new 
rules.

    Question 3. Under the Chairman, 85 percent of the Notices of 
Proposed Rulemakings have contained text of proposed rules. However, in 
the years before Chairman Genachowski, only 38 percent contained the 
specific text. Also, at times, these NPRMs have been broad, leading to 
uncertainty because industries are not clear as to what the FCC is 
actually looking at. Do you believe that the FCC should include the 
actual language of any and all proposed new rules in every NPRM?
    Answer. I believe that including the actual language of proposed 
rules in NPRMs improves the rulemaking process by enabling stakeholders 
and members of the public to provide more focused and specific input to 
the Commission.

    Question 4. These NPRMs can stay open for quite a while costing 
industry time and resources without any knowledge of whether action 
will take place or not. I have heard from many of my constituents with 
business before the Commission that they simply cannot get an answer 
from the Commission on what seems to be routine petitions, 
applications, or proceedings.
    Nevada has asked for a waiver from the FCC in regards to its 700 
megahertz public safety early deployment rules. I understand that a 
decision on this could have been delayed until Congress passed a public 
safety spectrum allocation bill. Now, with provisions intended to 
facilitate a public safety network in place, the FCC still seems to be 
stalling on this.
    Other companies have purchased spectrum in the lower 700 MHz and 
are awaiting a decision by the FCC on whether rules regarding 
interoperability, clearing channel 51 or waivers to build out 
requirements will be granted.
    The issue of ``special access'' has been open for 10 years before 
the Commission without any resolution. This is an issue worth billions 
of dollars to the entire industry.
    Furthermore, last July, I and a number of my colleagues on this 
Committee wrote to you and we did not receive a response for 8 weeks 
and only after multiple follow up letters and calls. When Senators on 
the Committee of jurisdiction have trouble receiving a response from 
the FCC, there clearly are problems with answering questions.
    All of this leads to uncertainty. There doesn't appear to be much 
confidence among many companies that the FCC can act expeditiously on 
much of anything of significance to the industry. Proceedings can 
languish for 3, 5, or 10 years. Companies, generally, have a hard time 
investing, or increasing their investment, if they are uncertain what 
the regulatory environment is going to look like for their business.
    Chairman Genachowski has worked on this issue and established 
internal 180-day shot clocks; however, this has not solved all the 
problems of open ended NPRMs.
    Do you believe that Congressional legislation implementing shot 
clocks on FCC action is appropriate? If not, why? Does the Commission 
expect to act on any of the examples listed above?
    Answer. The tempo of our economy has been set by rapid 
technological innovation and a dynamic competitive landscape. This is 
perhaps best observed in the convergence that we are witnessing in the 
telecommunications marketplace and explosion in new products and 
services made available to our Nation's consumers. It is therefore 
essential that the FCC exercise its regulatory authority in a well-
informed and expeditious manner to ensure certainty not only for those 
that seek to invest and grow our economy but for all participants. If 
the Commission demonstrates an inability to respond in this fashion, 
then Congress justifiably could decide to impose shot-clock 
requirements upon the Commission.
    As a Commissioner, I do not set the Commission's agenda, and so I 
cannot speak with certainty when the Commission will act on any of the 
examples above. However, I can state my commitment to act promptly when 
presented with an agency proposal that is based on a well-developed 
record.

    Question 5. Since 2008, the FCC has conducted a number of merger 
reviews. How many times has the FCC failed to conclude the review 
within the 180-day shot clock period? How many times was the deadline 
missed? Was there any reason they were missed?
    Answer. I have not had an opportunity to vote on a proposed 
transaction that requires Commission approval since I was sworn in on 
May 14, 2012, and cannot speak authoritatively to the Commission's 
reasons for missing deadlines prior to that date. Going forward, I 
intend to review the record in any transaction in a timely fashion and 
to take action that enables the Commission to make a determination 
within the shot clock period.

    Question 6. Going back to the President's Executive Order 13563, 
the Chairman has fully supported the ideals of the order, which in part 
states ``For proposed rules, such access shall include, to the extent 
feasible and permitted by law, an opportunity for public comment on all 
pertinent parts of the rulemaking docket, including relevant scientific 
and technical findings.''
    In the days before the record closed on the Commission's reform of 
the high cost of the Universal Service Fund, the FCC added 114 new 
pages of its own to use in the final decision. This practice denied 
public input on information that was used to render a decision which 
seemed to run counter to the President's Executive Order. Without 
adequate public and stakeholder input, the chance that a regulation 
will have unintended consequences increases. One example brought to my 
attention is that now smaller rural markets like those in my state will 
miss out on support because of the presence of fixed wireless services. 
They believe more dialogue and transparency could have avoided this 
outcome.
    Do you believe that relying on reports in rulemaking and 
adjudications that are without a robust notice and comment process is 
appropriate? Or substantially altering a report after the period with 
which industry input or comments are accepted?
    Answer. It is essential to the Commission's proper execution of its 
rulemaking functions that the public have a full and fair opportunity 
to participate in the notice-and-comment process. Adherence to the 
values of openness and transparency requires nothing less. I therefore 
am troubled when an agency relies on reports that have not been made 
subject to the scrutiny of all interested stakeholders through 
sufficient notice. Likewise, altering a report after the close of the 
comment process and without allowing an additional period of comment is 
troubling.

    Question 7. Do you agree that it is not the best practices of a 
government agency to dump data into a report at the 11th hour without 
industry input?
    Answer. Yes, the introduction of data into a report without 
sufficient opportunity for public comment compromises the sufficiency 
of the record and consequently, the conclusions based on that record.

    Question 8. Do you agree that this method, while perhaps helpful to 
the Commission, is not open and transparent to the level benefitting an 
agency that issues regulations that have a significant economic impact?
    Answer. Yes, it is essential for the Commission to do its work in 
an open and transparent manner. In the Commission's Strategic Plan for 
2012-2016, Strategic Goal 8, ``Operational Excellence,'' specifically 
sets forth the FCC's objective of making ``the FCC a model for 
excellence in government . . . by making decisions based on sound data 
and analyses; and by maintaining a commitment to transparent and 
responsive processes that encourage public involvement and best serve 
the public interest.'' The method described in your question is in 
stark conflict with that goal.

    Question 9. The FCC rightfully should review transfers of lines 
under section 214 of the Communications Act and the transfer of 
licenses under section 309 and 310 of the Communications Act. However, 
this review should not provide the FCC to extract a list of concessions 
from the applicant in exchange for approval. For example, in the 2011 
Comcast/NBC Universal transaction order, the Commission accepted a 
``voluntary'' commitment from Comcast to comply with net neutrality 
rules even if a court overturns those rules.
    This agreement was made through a transaction review and was done 
without any public scrutiny--as proposed conditions are often unknown 
until the approval order is announced.
    Do you believe that this type of rulemaking provides a scenario in 
which one set of rules exist for those who have merged and another 
exists for those who have not?
    Answer. Yes, the scenario outlined above can lead to a situation 
where different legal requirements apply to different companies.

    Question 10. Have there been instances you have experienced when 
merger conditions have been imposed that was not directly related to 
the transfer questions?
    Answer. I have not had occasion to evaluate FCC-proposed conditions 
extraneous to the merits of a transaction in the several weeks since I 
was sworn in. But I am aware that the Commission in the past has 
imposed merger conditions that were not designed to ameliorate a 
transaction-specific harm.

    Question 11. Do you believe it is appropriate to require the FCC to 
end this practice by requiring the FCC to narrowly tailor any 
conditions it imposes or commitments it accepts to only address harm 
caused by the transfer of licenses?
    Answer. Yes, I believe that the FCC should only impose merger 
conditions (or require parties to adhere to so-called ``voluntary 
commitments'') in order to remedy transaction-specific harms that have 
been established in the record.

    Question 12. Last November, I introduced S. 1780, the Federal 
Communications Commission Consolidated Reporting Act. In section 3 of 
that bill, I identified 24 reports for repeal and elimination. 16 of 
those reports were ones required of the FCC. Many of these required 
reports appeared to me to be contemplated during eras long since 
passed; were ones with an exceedingly narrow focus; or ones that bore 
little relevance to today's communications marketplace. Have you had 
the opportunity to review the FCC reports that were identified in S. 
1780? Would you take issue with any of the recommended deletions?
    Answer. Yes, I have had the opportunity to review the reports 
identified in S. 1780, and I do not oppose any of the recommended 
deletions.

    Question 13. Notwithstanding my desire to leave the FCC of its 
reporting burden, S. 1780 calls for the FCC to provide a Report to 
Congress with respect to the state of the communications marketplace, 
covering such matters as competition in broadband deployment and 
barriers to the competitive marketplace. The FCC is currently required 
to do many of these narrowly focused reports, but it seems to me that 
what we lack is anything like a comprehensive look at the totality of 
the marketplace at regular intervals. My thought was that this should 
be done every two years. What is your opinion of such a proposal? I 
believe that both the FCC and Congress would benefit from such a 
Report.
    Answer. I support this proposal, as well as S. 1780 in its 
entirety. In my view, S. 1780 would modernize the Commission's 
reporting obligations to reflect the convergence that has taken place 
in the communications marketplace and at the same time ensure that 
policymakers receive information critical to making data-driven 
decisions.

                                  
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