[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
OVERSIGHT OF THE FEDERAL COMMUNICATIONS
COMMISSION
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
DECEMBER 12, 2013
__________
Serial No. 113-109
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
RALPH M. HALL, Texas HENRY A. WAXMAN, California
JOE BARTON, Texas Ranking Member
Chairman Emeritus JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois FRANK PALLONE, Jr., New Jersey
JOSEPH R. PITTS, Pennsylvania BOBBY L. RUSH, Illinois
GREG WALDEN, Oregon ANNA G. ESHOO, California
LEE TERRY, Nebraska ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan GENE GREEN, Texas
TIM MURPHY, Pennsylvania DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee MICHAEL F. DOYLE, Pennsylvania
Vice Chairman JANICE D. SCHAKOWSKY, Illinois
PHIL GINGREY, Georgia JIM MATHESON, Utah
STEVE SCALISE, Louisiana G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio JOHN BARROW, Georgia
CATHY McMORRIS RODGERS, Washington DORIS O. MATSUI, California
GREGG HARPER, Mississippi DONNA M. CHRISTENSEN, Virgin
LEONARD LANCE, New Jersey Islands
BILL CASSIDY, Louisiana KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky JOHN P. SARBANES, Maryland
PETE OLSON, Texas JERRY McNERNEY, California
DAVID B. McKINLEY, West Virginia BRUCE L. BRALEY, Iowa
CORY GARDNER, Colorado PETER WELCH, Vermont
MIKE POMPEO, Kansas BEN RAY LUJAN, New Mexico
ADAM KINZINGER, Illinois PAUL TONKO, New York
H. MORGAN GRIFFITH, Virginia JOHN A. YARMUTH, Kentucky
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
Subcommittee on Communications and Technology
GREG WALDEN, Oregon
Chairman
ROBERT E. LATTA, Ohio ANNA G. ESHOO, California
Vice Chairman Ranking Member
JOHN SHIMKUS, Illinois MICHAEL F. DOYLE, Pennsylvania
LEE TERRY, Nebraska DORIS O. MATSUI, California
MIKE ROGERS, Michigan BRUCE L. BRALEY, Iowa
MARSHA BLACKBURN, Tennessee PETER WELCH, Vermont
STEVE SCALISE, Louisiana BEN RAY LUJAN, New Mexico
LEONARD LANCE, New Jersey JOHN D. DINGELL, Michigan
BRETT GUTHRIE, Kentucky FRANK PALLONE, Jr., New Jersey
CORY GARDNER, Colorado BOBBY L. RUSH, Illinois
MIKE POMPEO, Kansas DIANA DeGETTE, Colorado
ADAM KINZINGER, Illinois JIM MATHESON, Utah
BILLY LONG, Missouri G.K. BUTTERFIELD, North Carolina
RENEE L. ELLMERS, North Carolina HENRY A. WAXMAN, California, ex
JOE BARTON, Texas officio
FRED UPTON, Michigan, ex officio
C O N T E N T S
----------
Page
Hon. Greg Walden, a Representative in Congress from the State of
Oregon, opening statement...................................... 1
Prepared statement........................................... 3
Hon. Anna G. Eshoo, a Representative in Congress from the State
of California, opening statement............................... 5
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 6
Prepared statement........................................... 7
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 8
Witnesses
Tom Wheeler, Chairman, Federal Communications Commission......... 10
Prepared statement........................................... 13
Answers to submitted questions............................... 87
Mignon Clyburn, Commissioner, Federal Communications Commission.. 23
Prepared statement........................................... 25
Answers to submitted questions............................... 113
Jessica Rosenworcel, Commissioner, Federal Communications
Commission..................................................... 34
Prepared statement........................................... 36
Answers to submitted questions............................... 127
Ajit Pai, Commissioner, Federal Communications Commission........ 38
Prepared statement........................................... 40
Answers to submitted questions............................... 138
Michael O'Rielly, Commissioner, Federal Communications Commission 52
Prepared statement........................................... 53
Answers to submitted questions............................... 151
OVERSIGHT OF THE FEDERAL COMMUNICATIONS COMMISSION
----------
THURSDAY, DECEMBER 12, 2013
House of Representatives,
Subcommittee on Communications and Technology,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:10 a.m., in
room 2123 of the Rayburn House Office Building, Hon. Greg
Walden (chairman of the subcommittee) presiding.
Members present: Representatives Walden, Latta, Shimkus,
Terry, Rogers, Blackburn, Lance, Guthrie, Gardner, Kinzinger,
Long, Ellmers, Barton, Upton (ex officio), Eshoo, Matsui,
Lujan, Dingell, DeGette, Matheson, and Waxman (ex officio).
Staff present: Gary Andres, Staff Director; Ray Baum,
Senior Policy Advisor/Director of Coalitions; Sean Bonyun,
Communications Director; Matt Bravo, Professional Staff Member;
Andy Duberstein, Deputy Press Secretary; Gene Fullano,
Detailee, Telecom; Kelsey Guyselman, Counsel, Telecom; Grace
Koh, Counsel, Telecom; David Redl, Counsel, Telecom; Charlotte
Savercool, Legislative Coordinator; Tom Wilbur, Digital Media
Advisor; Jessica Wilkerson, Staff Assistant; Shawn Chang,
Democratic Chief Counsel for Communications and Technology
Subcommittee; Margaret McCarthy, Democratic Professional Staff
Member; Kara van Stralen, Democratic Policy Analyst; and
Patrick Donovan, Democratic FCC Detailee.
OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OREGON
Mr. Walden. I will call to order the subcommittee on
Communications and Technology, and it is a delight to welcome
all five members of the Federal Communications Commission,
fully installed, and bright and shiny faces and ready to go
today. We welcome you. And, Chairmen Wheeler and Commissioner
O'Rielly, we especially welcome you and look forward to working
with you to set the communications agenda for the United
States.
The Federal Communications Commission is the arm of our
government tasked with fostering some of the most important
parts of our national economy, and among them, the
telecommunications industry, the video distribution industries,
and the Internet.
Given the economic significance of these industries, the
changes from Congress--the charge from Congress to encourage
competition, license our national spectrum assets, and
facilitate technological advances, is one that must be
discharged with transparency, accountability, and a long view
of the technological landscape. It is with this in mind that
this subcommittee has worked over the last 3 years on efforts
to improve the Commission's processes. As the subcommittee with
jurisdiction over the Federal Communications Commission, we
take this task very seriously and with great care to ensure the
Commission not only remains a vital institution, but one that
can serve as an example for other federal agencies of
accountability and efficiency. A bipartisan majority of this
subcommittee is deeply committed to this cause, and is proud to
have reported out a bipartisan FCC process reform bill to the
full House of Representatives yesterday.
Chairman Wheeler, it is clear you want to improve the
Agency. I have appreciated our conversations and your comments,
and I would like to commend you for turning your attention to
this task as one of your first roles as Chairman by asking one
of your top advisors to review the FCC process, and submit
recommendations for improvement by early 2014.
While there are a number of large proceedings currently
pending at the Commission, many of this we will talk about
today, I am particularly concerned with returning the
Commission to addressing some of its long-overdue
responsibilities. For example, despite multiple unsuccessful
trips to the Third Circuit Court of Appeals, the Commission's
responsibility to address the Media Ownership proceeding
remains unfulfilled. Additionally, licensing, one of the
original reasons for the creation of the Commission, has fallen
woefully behind. Of particular note is the tragic pace of
processing of applications in the Commission's Media Bureau.
Now, the AM Radio industry has been clamoring for the
ability to use FM translators to give new life to that classic
medium, and I certainly appreciate what Commissioner Pai has
done taking on this issue, and it is very good work, and as a
former licensee, I actually know firsthand the Commission has
been in no rush to address translator applications. In fact, my
own application sat unresolved at the Commission for 10 years.
To put this in context, while the Commission considered my
application, my wife and I actually sold our radio stations,
our son went off and graduated from college, and every full-
power television station in the country converted from analog
to digital broadcasting.
Look, the Commission can do better than that. The
Commission should do better than that, and I am hopeful that
our shared commitment will lead to improvement in that bureau.
As the only one on the panel with the unique experience of
having been a licensee of commercial broadcast, and still under
your jurisdiction with my amateur radio license, which I am set
to renew for March, and hopefully it will get approved within
10 years, I would like to offer two pieces of advice for you as
you move forward with your change. First, where Congress has
spoken, I urge you to heed the words in statute, and reject
calls to act in ways contrary to congressional intent. For
example, in the Incentive Auction proceedings, some were
calling on the Commission to exclude bidders from participating
in the auction. Others still are calling for excessive guard
bands in the attempt to end run requirements to license reclaim
TV band spectrum. I am just saying both are bad ideas.
Second, I urge you to bear in mind that even seemingly
small changes in your rules can have significant impact on the
market. The Commission's recent decision to apply yet
incomplete rules to its UHF discount has effectively frozen
many plans for broadcast mergers and acquisitions. The problem
here isn't that the Commission wants to update, or needs to
update the UHF discount rule; the problem is that, absent a
decision how and importantly when the Commission will move
forward, it has pressed pause for an indefinite period of time.
We all know that markets do not react favorably to this kind of
open-ended uncertainty.
On the other hand, I applaud the recent announcement on the
schedule for the Spectrum Incentive Auctions. Both the
broadcast and wireless industries are waiting with baited
breath to see how the FCC addresses this first-of-a-kind
auction, to say nothing of the public safety agencies that are
counting on the auction fund to fund FirstNet. The certainty of
a timetable is good for both stakeholders and for the
Commission.
Finally, turning to those large proceedings the Commission
has on its plate. We are looking forward to working with you to
tackle the tough issues like the IP transition, universal
service reform and media ownership. Chairman Upton and I
recently launched a large proceeding of our own; an initiative
to update the Communications Act. Each of you brings a unique
perspective to your work on the Commission; industry lobbyists,
newspaper publisher, a couple of lawyers, even some former
legislative Hill staffers. That experience combined with your
expertise on the Federal Communications Commission staff and
your own work on the Commission will be valuable in our efforts
as we work together to update and modernize the Communications
Act.
So Congress--or, Chairman Wheeler, we wouldn't want to
demote you to the level of Congressman, Chairman Wheeler--yes,
our numbers aren't that great. Commissioner O'Rielly, we
especially welcome you aboard the FCC. And Commissioners
Clyburn, Rosenworcel, and Pai, welcome back, not only to the
Commission, but before our committee. We thank you all for
joining us today. We look forward to working together in this
very critical sector of America's economy to spur further
innovation of technology growth and jobs.
And with that, I will now yield to the ranking member of
the subcommittee, my friend, Ms. Eshoo, from California.
[The prepared statement of Mr. Walden follows:]
Prepared statement of Hon. Greg Walden
I am pleased to welcome the full complement of FCC
Commissioners and its new chairman to our subcommittee today.
Chairman Wheeler and Commissioner O'Rielly, we welcome you and
look forward to working with you to set the communications
agenda for our nation.
The Federal Communications Commission is the arm of our
government tasked with fostering some of the most important
parts of our national economy. Among them, the
telecommunications industry, the video distribution industries,
and the Internet. Given the economic significance of these
industries, the charge from Congress to encourage competition,
license our national spectrum assets, and facilitate
technological advances is one that must be discharged with
transparency, accountability, and a long view of the
technological landscape.
It is with this in mind that this subcommittee has worked
over the last 3 years to improve the commission's process. As
the subcommittee with jurisdiction over the FCC, we take great
care to ensure that the commission not only remains a vital
institution, but one that can serve as an example for other
federal agencies of accountability and efficiency. A bipartisan
majority of this subcommittee is deeply committed to this cause
and is proud to have reported a bipartisan FCC process reform
bill to the full House yesterday. Chairman Wheeler, it's clear
you want to improve the agency, and I'd like to commend you for
turning your attention to this task by assigning one of your
top advisors to review FCC processes and submit recommendations
for improvement by early January 2014.
While there are a number of large proceedings currently
pending at the commission, many of which we will talk about
today, I am particularly concerned with returning the
commission to addressing some of its long overdue
responsibilities. For example, despite multiple unsuccessful
trips to the Third Circuit Court of Appeals, the commission's
responsibility to address the media ownership proceeding
remains unfulfilled. Additionally, licensing--one of the
original reasons for the creation of the commission--has fallen
woefully behind. Of particular note is the tragic pace of
processing of applications in the commission's Media Bureau.
The AM radio industry has been clamoring for the ability to use
FM translators to give new life to a classic medium. I
appreciate Commissioner Pai's good work in this regard. And, as
a former licensee, I know first hand that the commission has
been in no rush to address translator applications. My own
application sat unresolved at the commission for ten years. To
put this in context, while the commission considered my
application my wife and I sold our stations, our son went off
to and graduated college, and every full-power television
station in the country converted from analog to digital
broadcasting. The commission can and should do better and I am
hopeful that our shared commitment will lead to improvement.
As the only one on this panel with the unique experience of
having been a licensee of the commission as well as a
policymaker, I would like to offer two pieces of advice for you
as you move forward with your charge. First, where Congress has
spoken, I urge you to heed the words in statute and reject
calls to act in ways contrary to congressional intent. For
example, in the incentive auction proceeding some are calling
on the commission to exclude bidders from participating in the
auction. Others still are calling for excessive guard bands in
an attempt to end-run requirements to license reclaimed TV band
spectrum. Both are bad ideas.
Second, I urge you to bear in mind that even seemingly
small changes in your rules can have significant impact on the
market. The commission's recent decision to apply yet
incomplete rules to its UHF discount has effectively frozen
many plans for broadcast mergers and acquisitions. The problem
here isn't that the commission wants to update the UHF discount
rule, the problem is that absent a decision how--and
importantly, when--the commission will move forward, it has
pressed pause for an indefinite period of time. We all know
that markets do not react favorably to this kind of open-ended
uncertainty.
On the other hand, I applaud the recent announcement on the
schedule for the spectrum incentive auctions. Both the
broadcast and wireless industries are waiting with bated breath
to see how the FCC address this first-of-its-kind auction, to
say nothing of the public safety agencies that are counting on
the auction to fund FirstNet. The certainty of a timetable is
good for both stakeholders and the commission itself.
Finally, turning to those large proceedings that the
commission has on its plate, we are looking forward to working
with you to tackle tough issues like the IP Transition,
Universal Service Reform, and media ownership. Chairman Upton
and I recently launched a large proceeding of our own--an
initiative to update the Communications Act. Each of you brings
a unique perspective to your work on the commission: industry
lobbyist, newspaper publisher, a couple of lawyers, and even
some former legislative staffers. That experience, combined
with your expertise on the Federal Communications Commission
itself will be valuable part of our efforts and we look forward
to working together.
Chairman Wheeler, Commissioner O'Rielly, welcome.
Commissioners Clyburn, Rosenworcel, and Pai, welcome back. We
thank you for joining us today and look forward to working
together to foster this critical sector of the economy.
# # #
OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Eshoo. Thank you, Mr. Chairman, for holding this
hearing. It is wonderful to see a full Federal Communications
Commission before us. Welcome to each one of you. A special
welcome to the new Chairman. I think that you start out with
100 percent goodwill with everyone that is on this committee, I
think our full committee, in fact, I think the Congress.
There have been many months where we didn't have a full
Commission. I want to once again thank Commission Clyburn for
her exceptional leadership during that period of time. Welcome
to each one of the Commissioners, and, of course, to the newest
Commissioner, Mike O'Rielly, who served on the other side of
that table. When I first came to the committee, he was here
when we began the Telecom Act, and now, guess what, you get to
trudge through that all over again, according to the Chairman.
So I guess there are some things that we just never finish
with.
As Chairman Wheeler announced last week, the Commission has
made the upcoming Incentive Auction of broadcast television
spectrum the top priority of the Commission, and I agree. This
is a rare opportunity to auction beachfront spectrum under 1
gigahertz, and the FCC has to structure rules to promote a
competitive wireless landscape, and ensure carriers of all
sizes, both regional and national, have an opportunity to bid
competitively for licensed spectrum, and it has to be done
right. It is the first time in the history of the world that an
auction has been structured this way, and I appreciate, Mr.
Chairman, and all the Commissioners, your understanding the
delicacy of this needing to be done right, well, and
successfully.
Similarly, recognizing the enormous economic and societal
benefits of an unlicensed spectrum, which is tucked away in one
corner of my Telecom heart, the FCC has an opportunity to
structure a band plan that ensures a nationwide block of
spectrum under 1 gigahertz dedicated for unlicensed innovation.
With unlicensed spectrum being a critical tool to bring
broadband to unserved areas, including rural America, this
opportunity really must be seized.
In addition to the important role the FCC has in freeing up
more spectrum for mobile broadband, I would like to highlight
four issues that the Commission make a top priority in 2014,
and I think you are going to.
First, during the 3 months since I released draft
legislation, the message from individuals, communications
companies and consumer groups has been abundantly clear. Our
video laws are in need of reform. They are broken. Independent
of such legislation, the Commission does have an important
responsibility to promote competition, consumer choice, and
localism across the video marketplace.
Second, I hope the Commission will continue its focus on
modernizing the e-Write Program to support the 21st century
digital needs of our schools and libraries. In June, together
with Commissioner Rosenworcel, we called for such an update,
and I am pleased that the Whitehouse and the FCC agree with us
and have made this issue a key priority. We have to stay on it.
We have to move, and we have to make it much better. It has got
to be a 21st century plan.
Third, the Commission should uphold, I think, the goals of
Section 629, and ensure a vibrant, competitive retail Set-Top
Box market. The successor to the current cable card regime,
whether by FCC rule or, more preferably, a voluntary industry
agreement, will usher in a new generation of technologies that
will give consumers greater choice and ensure that innovation
flourishes.
Finally, I am pleased that the Commission has made the
transition to next-generation 911, as well as improving the
indoor location accuracy of 911 calls a key priority. In fact,
later today, it is my understanding that the Commission will
vote on an Order to improve the reliability of 911, and I look
forward to continued updates as the Commission proceeds with
the implementation of Next Gen 911.
Mr. Chairman, thank you for holding this morning's hearing.
I look forward to the important testimony of Chairman Wheeler
and each of the Commissioners. Most importantly, I pledge to
work with each of you to make America's communications sector
the most effective and the most admired in the world.
And with that, I yield back.
Mr. Walden. Gentlelady yields back.
The Chair now recognizes the chairman of the full
committee, Mr. Upton, from Michigan, I believe.
Mr. Upton. Great State of Michigan.
Mr. Walden. Not Ohio.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. Thank you, Mr. Chairman.
Now, today we welcome a fully-constituted FCC back to the
Energy and Commerce Committee. The last time that we heard from
the full Commission was in July of 2012. So the FCC has
regulatory authority over a sector of our economy that is
critical to innovation, jobs and our Nation's global leadership
in technology. The communications sector is also an integral
part of our daily lives, connecting us to loved ones, alerting
us to natural disasters, and entertaining and educating us
every single day.
As the regulatory agency of these industries, the FCC has
the immensely-important task of promoting growth and
competition. Our hearing today will examine actions that the
FCC has taken since the last Commission last appeared and set
expectations for the Agency's future. As the oversight
authority for the Commission, our committee works hard to
ensure that the FCC functions for the benefit of American
consumers as well as companies. And we also want to make sure
that this Agency functions efficiently and transparently as all
government agencies should.
I am glad to say that this is not a partisan concern.
Bipartisan majority on a voice vote of the full committee
reported an FCC Process Reform Bill yesterday that will help
the FCC operate more openly and effectively, and we expect it
to be on the House floor in the not-too-distant future. And the
bill is needed. There are several stalled proceedings and
ambiguous projects at the Commission that caused concern to me
and other members of the committee. We have sent a number of
letters in the past months regarding media ownership
proceedings. Subcommittee Vice Chair Latta has gone to the
extent of drafting a bill to end the Cable Set-Top Box
Integration Ban, a bill that seems to make a lot of sense, and
which perhaps the FCC should have considered doing a while ago.
My concern and hope is that we can start a productive dialogue
today with our esteemed witnesses on these and the many other
important issues pending at the Commission.
Commissioner O'Rielly, I would like to welcome you back to
the Energy and Commerce Committee, a committee you know well,
having once served here as staff. And, Chairman Wheeler, though
you are from Ohio, this is often known as the Big House, now
the Dingell Room. Hope you appreciate the green-and-white
decor. And, yes, we were for Sparty. Welcome back.
And I yield to other members--Republican members.
[The prepared statement of Mr. Upton follows:]
Prepared statement of Hon. Fred Upton
Today we welcome a fully constituted FCC back to the Energy
and Commerce Committee. The last time we heard from the full
commission was July 2012. The FCC has regulatory authority over
a sector of our economy that is critical to innovation, jobs,
and our nation's global leadership in technology. The
communications sector is also an integral part of our daily
lives, connecting us to loved ones, alerting us to natural
disasters, and entertaining and educating us every day. As the
regulatory agency of these industries, the Federal
Communications Commission has the immensely important task of
promoting growth and competition.
Our hearing today will examine actions the FCC has taken
since the commission last appeared and set expectations for the
agency's future. As the oversight authority for the commission,
our committee works hard to ensure that the FCC functions to
the benefit of American consumers and companies. We also want
this agency to function efficiently and transparently, as all
government agencies should. I'm glad to say that this is not a
partisan concern--a bipartisan majority of the full committee
reported an FCC Process Reform bill yesterday that will help
the FCC operate more openly and effectively.
And the bill is needed. There are several stalled
proceedings and ambiguous projects at the commission that cause
concern to me and other members of this committee. We have sent
several letters in the past months regarding media ownership
proceedings. Subcommittee Vice Chairman Latta has even gone to
the extent of drafting a bill to end the cable set-top box
integration ban, a bill that seems to make a lot of sense and
which, perhaps the FCC should have considered doing a while
ago. My sincere hope is to start a productive dialogue today
with our esteemed witnesses on these and the many other
important issues pending at the commission.
Commissioner O'Rielly, I'd like to welcome you back to
Energy and Commerce, a committee you know well, having once
served on the staff here. Chairman Wheeler, we welcome you and
look forward to working together during your tenure as
chairman.
# # #
Mr. Walden. The Chairman now recognizes the vice chair on
subcommittee communications, Mr. Latta, from Ohio, home of the
Speaker of the House. More importantly, number two.
Mr. Latta. Thank you very much for yielding, Mr. Chairman,
and thank you very much to our Commissioners for being with us
today, and welcome to our newest members of the Commission. I
really appreciate having you here with us today.
The communications and technology industry has been a
consistent bright spot in the U.S. economy. It has created
millions of American jobs, spurred significant investment and
innovation, and most importantly, empowered consumers, who are
the driving force behind robust competition in the
communications marketplace.
As U.S.-based businesses lead the world in technological
advances, we have a responsibility to ensure the FCC fosters
continued growth and development in the communications sector.
This can be achieved by the FCC incorporating more transparency
and accountability in its processes; operating within the
bounds of the statutory authority; and acting upon legislation
according to Congressional intent.
I look forward to continuing working with Chairman Upton
and the members of this committee, and also Congressman Green,
on my bill, H.R. 3196, which is the legislation to eliminate
the integration ban on Set-Top Boxes, and allow the marketplace
to get to the next generation of innovation without the
regulatory barriers being put in front of it.
I look forward to the hearing and hearing the testimony
today. And, Mr. Chairman, I yield back.
Mr. Walden. Thank you.
Chair recognizes the gentlelady from Tennessee, the vice
chair of the full committee, for the remaining 40 seconds, if
she wants.
Mrs. Blackburn. And I thank the Chairman. I want to welcome
all of our Commissioners, and publicly commend Commissioner
Clyburn for the wonderful work that she did when she served as
the Acting Chair. We appreciate that leadership. And, Chairman
Wheeler, we look forward to having you continue and to work in
a collaborative manner to find results for the private sector.
We would hope that the Commission will be proactive, not get
beyond its mission, but to stay focused on your core mission.
Pay attention to economic analysis, look at cost-benefit
analysis, and make certain that you don't suffer mission creep,
which is casting a shadow over the private sector.
With that, I yield back.
Mr. Walden. The gentlelady yields back.
Chair recognizes the ranking member of the full committee,
Mr. Waxman.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Thank you very much, Mr. Chairman. I want to
welcome the members of the Commission, Chairman Wheeler and all
the Commissioners, and I also want to join in commending
Commissioner Clyburn for the incredible job she did as Acting
Chairwoman from the industry agreement on interoperability, to
long-overdue reforms on prison phone rates. Your brief
chairmanship will be remembered for the remarkable amount you
accomplished.
Let me welcome Chairman Wheeler and Commissioner O'Rielly.
I congratulate you on your appointment and confirmation, and we
are pleased to have you here. You join the FCC at a time when
our country is undergoing dramatic and perhaps fundamental
transformations in communications, networks and technologies,
and the decisions you make at the Commission will no doubt have
lasting impact on our nation's communications landscape.
At the top of the FCC agenda is the spectrum auctions
authorized by the Public Safety and Spectrum Auction Act last
year, and I am pleased to see that the FCC is moving ahead to
conduct the H Block Auction in January, in addition to
allocating new wireless spectrum to address our nation's
spectrum shortage. This auction will provide significant down-
payment for the nationwide Interoperable Public Safety Network.
I also support, Chairman Wheeler, your recently-announced
timetable for the Incentive Auction. This auction has many
layers of complexity, and I applaud your commitment to getting
the technical issues right.
Congress gave the FCC the tools to unleash the economic
opportunities for both licensed and unlicensed spectrum,
revolutionized public safety communications, ensure a vibrant
and competitive wireless market, all the while protecting
consumer access to free, over-the-air television. And I think
the FCC must remain faithful to these goals as you implement
the law.
You also must bear in mind the principles undergirding the
Communications Act as we consider the next evolution in our
nation's wireless networks. Our values do not change with each
successive generation of technology. Whether the infrastructure
is copper or fiber optics, the Commission's charge is to
protect and promote the longstanding goals of competition,
universal access and consumer protection.
Chairmen Upton and Walden recently called for a multi-year
examination of possible updates to the Communications Act, and
I welcome the opportunity for a bipartisan consideration of
these issues, and I hope the Commission will be a partner in
this endeavor.
In 2010, the Commission and this committee spent many hours
working to preserve the principle of an open Internet. That
process led to a sensible set of rules governing the broadband
market that was supported by a diverse group of stakeholders,
and provided the foundation for the FCC's Open Internet Order.
I believe the Open Internet Order will be upheld in the court,
but whatever the outcome, I will be looking to you to ensure
that the Internet remains an open platform for innovation and
economic growth.
I want to, at this point, yield the balance of my time to
my fellow Californian and good friend, Congresswoman Matsui.
Ms. Matsui. Thank you very much, Ranking Member Waxman, for
yielding me time. It is wonderful to see the full complement of
the Commission here today. I want to join in welcoming Chairman
Wheeler and--who brings a wealth of knowledge and experience to
the FCC, and I would also like to congratulate and welcome
Commissioner O'Rielly, and I also would like to commend
Commissioner Clyburn for her leadership during the interim
period. Thank you very much.
Mr. Chairman, the subcommittee is working diligently to
find bipartisan solutions for smart and sound spectrum policy
for our nation. We work to create a path for DOD to reallocate
the 7055 to 7080 megahertz band. DOD and the broadcasters
should be applauded for their leadership on a landmark sharing
agreement. Moreover, I joined with Representative Guthrie to
introduce H.R. 3674, the Federal Spectrum Incentive Act, which
passed this committee yesterday in a bipartisan manner. The
bill is first of its kind that offers a fresh approach that
would create a Federal Spectrum Incentive Auction.
I look forward to working closely with my colleagues and
the Administration in moving this bill to the floor.
There are tough decisions ahead, and I want to encourage
also the FCC to move it forward with the USF reform efforts.
Modernizing the USF for broadband, particularly the Lifeline
Program, will provide a path toward universal broadband
adoption in this country.
And with that, I yield back the balance of my time.
Mr. Walden. The gentlelady yields back the balance of her
time.
All time has been consumed. We will now go to our
witnesses, and again, we thank you very much for being here
today, and the public service work you are all undertaking.
And, Mr. Wheeler, as Chairman of the FCC, we are going to
lead off with you. So pull that microphone close, turn on the
button, and you are good to go, sir.
STATEMENTS OF THE HONORABLE TOM WHEELER, CHAIRMAN, FEDERAL
COMMUNICATIONS COMMISSION; THE HONORABLE MIGNON CLYBURN,
COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION; THE HONORABLE
JESSICA ROSENWORCEL, COMMISSIONER, FEDERAL COMMUNICATIONS
COMMISSION; THE HONORABLE AJIT PAI, COMMISSIONER, FEDERAL
COMMUNICATIONS COMMISSION; AND THE HONORABLE MICHAEL O'RIELLY,
COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION
STATEMENT OF TOM WHEELER
Mr. Wheeler. Thank you very much, Mr. Chairman, Ms. Eshoo,
other members of the committee. It is a privilege to be before
you today, and a privilege to be joining my colleagues here,
the full component of the Commission. I think we will make a
great team, and I know that all of us are honored to be able to
work with the quality men and women that make up the FCC.
Today is my 39th day on the job, and I have enjoyed the
informal discussions that I have been able to have with many of
you in the interim. I look forward to today having even more
complete discussions and to working with you afterwards.
As I think everybody in their statements has indicated, we
are in a very exciting time--in the midst of a great network
revolution. The lesson of history is that revolutions like that
come chock full of challenges, and we are going to have to work
together on how we address those challenges.
We have tended to look at those challenges through three
prisms, if you will. First of all, how do we make sure that
what policies we adopt promote economic growth and maintain
national leadership? Clearly, at the root of those are issues
such as competition and maintaining the necessary assets, such
as spectrum.
The second prism is what we have begun to call ``the
network compact.'' For a century, there has been a developed
set of values that represent the relationship between those who
operate networks and those who use networks. Those values must
be preserved regardless of the type of the technology used in
the network.
And third is the goal that networks work for everyone. It
is not just the delivery of broadband, but it is what broadband
enables that is important. If we don't have 21st century
education capabilities, if we don't make sure that Americans
with disabilities have access to the capabilities of the new
technology network, if we don't make sure that the Tribal
Americans have opportunities to use the new networks, then we
have failed in our goal.
So those three things--economic growth, the network compact
and what networks enable--are the three pillars of policy, but
at the heart of them is competition. It has become a joke, at
least in my office that I keep saying competition, competition,
competition, but that is very much what we believe.
Let me do a quick look at the three areas where the
Commission is keeping pace with innovation--that innovative
economy. First is process reform. The committee's bipartisan
effort yesterday is significant and is noted and appreciated.
On my second day, Mr. Chairman, as you noted, I began a process
that will produce a report in 60 days. We are going to look at
how to enhance accountability through deadlines and tracking
systems; how to expedite the licensing process like you
referenced, and how to shorten the processing time of
applications for review. Commissioner Pai has an interesting
idea in that regard, how to streamline consumer complaint
collection and a searchable database, which Commissioner
Rosenworcel has been a champion of, and how to attack the
backlog, as Commissioner Clyburn did when she was Chairwoman.
We also want to weed out outdated regulations and incorporate
performance measures.
The second focus is going to be, as you have all
appropriately said, the spectrum auctions, especially the
Incentive Auction. This committee, working with NTIA and DOD,
has provided great leadership on the 1755 to 1780 MHz band, and
we look forward to moving forward on that and moving that to
auction. The Guthrie-Matsui Bill, which you all moved yesterday
and has been referenced, takes the Incentive Auction idea and
applies it to federal agencies, which is a great step forward.
Speaking of incentives, we have the Incentive Auction coming
up. We have established a schedule now. We are going to have
policy recommendations in January; we are going to have
consideration and discussion of that until spring when we will
be making a decision; and we will have an auction in mid-2015.
But while we are discussing spectrum and regulatory
process, I would be remiss if I didn't bring up an item we will
be considering today--a proposal to ask for comments on a rule
to reflect the realities of new onboard aircraft technology.
There have been lots of misconceptions about that, and let me
just see if I can address these right up front. One, we are
proposing to consider to continue the ban on mobile devices
that can interfere with terrestrial networks, but where there
is new onboard technology that eliminates that potential for
interference, then there is no need for an interference rule.
This is the responsible thing to do. Where the rationale for a
rule doesn't exist, the rule shouldn't exist. We are the expert
technical agency, and new technology removes the technical
justification of this rule. In that regard, I should mention
that I have spoken with Transportation Secretary Fox this
morning, and he has told me that, yes, the FCC is the technical
agency, and that the Department of Transportation is the
aviation agency, and that they will be moving on a rule to
address voice calls on airplanes. I am the last person in the
world who wants to listen to somebody talking while I fly
across the country, but we are the technical agency, and we
will make the technical rules that reflect the way the new
technology works.
Finally, item three, you have all talked about the IP
transitions, I should say because it is not just one
transition, it is a multifaceted process. At today's meeting,
we are going to hear a report from the Technology Transitions
Policy Taskforce, which will lay out a schedule including a
plan for a January order that will invite experiments in the
field, real-life experiments, recommend data collection, and
create a framework for policy decisions.
So we have a full agenda, as you have all said. It is a
privilege to be here, to be able to work with all of you, and I
look forward to doing that in the time coming.
[The prepared statement of Mr. Wheeler follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Walden. Chairman Wheeler, thank you for your public
service, and thank you for recognizing our concerns on the
subcommittee and full committee.
And now we will switch to, I guess once a Chairman, always
a Chairman, right? Highest title. Former Chairwoman Clyburn. We
are delighted to have you back before the committee. Thanks for
your work publicly and please go ahead with your opening
statement.
STATEMENT MIGNON CLYBURN
Ms. Clyburn. Thank you, Chairman Walden, Ranking Member
Eshoo and members of the committee. Thank you again for
allowing me to appear before you today.
Since our last visit, I have had an incredible opportunity
to serve as Acting Chair, and I am glad to note that with the
support of my colleagues and the assistance of a skilled and
dedicated staff, we were able to move a number of important
items which clearly advanced the public interest.
This hearing comes at a critical stage in our
communications policy continuum. We are experiencing tremendous
technological change that affects every aspect of our lives.
And as we look ahead to the challenges of tomorrow, I believe
it is important to understand the terrain over which we have
traveled. We have reached a voluntary interoperability industry
solution and the lower 700 megahertz ban to address an issue
that, for years, had been impeding the deployment of valuable
spectrum. We launched a proceeding to modernize the FCC's
schools and libraries program, known E-Rate, to ensure that our
children have the resources and connectivity they need to
support digital learning and become the leaders of tomorrow. We
adopted an Order to address rule call completion because it is
unacceptable in today's world that calls to non-urban areas are
not being completed. We adopted an Order to reform inmate
calling services to finally provide relief to millions of
families who have been paying unreasonably-high rates to stay
connected with loved ones. We enabled the H Block Spectrum
Auction, and the AWS-3 Proposal to take major steps forward on
government and commercial spectrum sharing, and we have made
ongoing reforms to Lifeline, and proposed significant
forfeitures to companies not following the FCC's rules.
With Chairman Wheeler and my fellow Commissioners, I look
forward to building on the progress we have made. As Chairman
Wheeler has made clear, the voluntary incentive auction
proceeding continues to be a top Commission priority. For those
broadcast television licensees who want to continue to use
their spectrum, the Act mandates that the Commission make all
reasonable efforts to preserve the coverage area and population
served. The Act also has clear directives for the proceeds from
the Forward Auction, which includes much-earned contributions
to the Public Safety Trust Fund and the national deficit.
Congress also gave the Commission authority to propose a
ban plan with an appropriate balance of unlicensed and licensed
spectrum. Unlicensed spectrum plays a critical role in
advancing more efficient use of spectrum, and commercial
wireless carriers are increasingly using unlicensed Wi-Fi
services to offload their smartphone traffic. In addition to
spectrum, Chairman Wheeler has also announced that the
Commission will consider an Order next month to launch trials
regarding the ongoing technology transitions.
I do believe that trials, instructed properly, can produce
helpful insights into how best to approach reform, and I will
be keeping a keen eye on how the trials and future reforms
affect all consumers. Process reform is where we have an
opportunity to develop an even more efficient Agency.
Yesterday, the committee passed a Federal Communications
Commission Process Reform Act of 2013. I am pleased that the
proposed modifications to The Sunshine Act would facilitate
federal commissioners' participation on the Federal State Joint
Boards and the Joint Conference.
I would also encourage you to review the Paperwork
Reduction Act and how it can be improved. For example, the FCC
is using its Web site to better inform consumers and industry,
yet, to obtain voluntary feedback on our Web site, the PRA
requires OMB approval. As a result, the Commission cannot be as
responsive to users without engaging in a lengthy OMB approval
process.
So as you can see, Mr. Chairman, and distinguished members
of the committee, we have both challenges and opportunities
ahead. I look forward to working with each of you to address
our evolving communications landscape.
I appreciate your attention this morning, and would be glad
to answers any questions you may have.
[The prepared statement of Ms. Clyburn follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Walden. Thank you for your work, your testimony, your
recommendations.
And we will now go to Commissioner Rosenworcel. Thank you
for being here this morning. We are delighted to have you back,
and please go ahead.
STATEMENT OF JESSICA ROSENWORCEL
Ms. Rosenworcel. It is good to be back.
Good morning, Chairman Walden, Ranking Member Eshoo, and
members of the subcommittee. It is an honor to appear before
you today in the company of my colleagues, new and old, at the
FCC.
By some measures, communications technologies account for
as much as \1/6\ of our economy. No wonder. These are the
networks that carry all aspects of our modern, commercial and
civic life. They are changing at a breathtaking pace. Keeping
up requires taking a fresh look at our policies. Informed by
the policies of the past, we have to think boldly about the
future.
Now, in the weeks ahead we will do this as we wrestle with
the upcoming transition to Internet protocol, and think about
Spectrum Auctions, including Incentive Auctions, but I think we
make a mistake if we focus only on networks themselves. After
all, there is great beauty and power in what we can do with
them.
Our new networks can change the ways we connect, create and
conduct commerce. They can change the ways we learn and seek
security. So in my brief time before you today, this is what I
want to talk about; how the broadband beneath us and the
airwaves all around us can improve education and improve public
safety.
First, I want to talk about the E-Rate Program. E-Rate
helps connect schools and libraries across the country to the
Internet. It is a byproduct of the Telecommunications Act of
1996. Remember 1996? Probably everyone in this room called the
Internet the Information Super Highway. It was a long time ago.
In 1996, only 14 percent of public schools were connected
to the Internet. Today, thanks to the E-Rate, that number is
north of 95 percent, which sounds good. It sounds like the job
is done, but nothing could be further from the truth, because
the challenge today is not connection, it is capacity. Too many
of our E-Rate schools access the Internet at speeds as low as 3
megabits. That is too slow for high-definition video, it is not
fast enough for the most innovative teaching tools, and it is
definitely not fast enough to prepare the next generation with
the STEM skills that are so essential to compete.
Contrast this with efforts underway in some of our world
neighbors. In South Korea, 100 percent of schools are connected
to high-speed broadband, and all schools are converting to
digital textbooks by 2016. Ireland will have all schools
connected to 100 megabits next year. Finland will have all
schools connected to 100 megabits the year after that.
Meanwhile, in both Turkey and Thailand, the government is
seeking a vendor to supply tablet computers to millions of
students for a new era of broadband-enabled digital learning.
Now, we can wait and see where the status quo takes us and
let other nations lead the way, or we can choose a future where
all American students have the access to the broadband they
need to compete, no matter who they are, where they live or
where they go to school. I think it is time to compete. I think
it is time for E-Rate 2.0. The FCC has a rulemaking proceeding
underway to reboot and recharge the E-Rate Program. I think we
need to make it a high priority. I think we need to find ways
to bring 100 megabits to all schools in the near-term, and 1
gigabit to all schools in the long-term. While we are at it, we
must find ways to reduce the bureaucracy of this program, and
make it easier for small and rural schools to participate.
Second, I want to talk about a number all of us know by
heart but none of us ever hopes to use. I want to talk about
911.
In my time at the FCC, I have visited 911 call centers all
across the country. I am always struck by the steely calm of
those who answer the phones and help ensure that help is on the
way. I am also struck by how many emergency calls now come in
from wireless phones. In fact, nationwide, more than 70 percent
of calls made to 911 are made from wireless phones. That is
more than 400,000 calls per day.
Now, if you use your wireless phone to call 911 from
outdoors, your location is reported, sometimes to within 50
meters, under FCC location accuracy standards. But if you use
your wireless phone to call 911 from indoors, you had better
cross your fingers because no FCC location accuracy standards
apply. I think this is an unacceptable gap in public safety
communications. It deserves your attention and ours, because no
matter where you are when you call 911, you want first
responders to find you.
Moreover, as our networks evolve and the ways we use them
change, we must make sure our public safety policies keep pace.
In fact, our approaches to networks, both wired and wireless,
need to evolve as markets evolve, but in our efforts, we must
not lose sight of why networks matter because they can do more
than connect us, they can strengthen, education and enhance our
security, and, of course, grow our economy in new and exciting
ways.
Thank you. I look forward to answering any questions you
might have.
[The prepared statement of Ms. Rosenworcel follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Walden. Ms. Rosenworcel, thank you for your work and
your testimony and your suggestions.
We go now to Commissioner Pai. Thank you for being here,
and thank you for all the work you have been doing, and please
go ahead with your opening statement.
STATEMENT OF AJIT PAI
Mr. Pai. Thank you, Mr. Chairman. Chairman Walden, Ranking
Member Eshoo, Members of the Subcommittee. Thank you for
holding this hearing.
It has been exactly one year since I last appeared before
you, and much has happened in the time since. Most notably, we
have lost two colleagues, and we have gained two new ones.
Chairman Wheeler and Commissioner O'Rielly have gotten off to
strong starts, and I am pleased that we are finally back at
full strength.
Over the past year, we have made progress in a number of
different areas, but there is much more to be done. This
morning, I will touch on two of the issues that I find most
pressing: the Incentive Auction and E-Rate reform. A fuller
list of FCC priorities, from cable forbearance to AM radio, is
detailed in my written testimony.
First, the Incentive Auction. Perhaps the most daunting
challenge the Commission faces is the looming spectrum crunch.
To meet this challenge, we are focused on implementing the
responsibilities that Congress gave us in the Spectrum Act,
especially with respect to the Broadcast Incentive Auction.
The Incentive Auction is the Commission's best chance to
push a large amount of spectrum, well suited for mobile
broadband, into the commercial marketplace. I support Chairman
Wheeler's recent announcement, setting the middle of 2015 as
our new target. It is more important to get the Incentive
Auction done right than it is to get it done right now. If, for
example, any part of our software were to fail during the
Incentive Auction, like another government Web site that shall
not be named, the Commission, by law, would not get a second
bite at the apple.
My greatest worry about the Incentive Auction, however, is
not with technology; it is about participation. In order for
the Incentive Auction to be successful, we will need robust
participation by both broadcasters and wireless carriers. So
the Commission must avoid choices that will deter participation
in both the Reverse Auction and the Forward Auction.
For the Reverse Auction, prices paid to broadcasters should
be determined by the market, not set by administrative fiat.
Any attempt to restrict payments to broadcasters, including a
complicated scoring scheme, will deter broadcasters'
participation and risk causing the Incentive Auction to fail.
For the Forward Auction, the Commission should not limit
carriers' ability to participate, such as by setting a spectrum
cap or narrowing the spectrum screen. This would result in less
spectrum for mobile broadband, less revenue to fund national
priorities that this Committee has identified, and a greater
chance for a failed auction.
Another issue that will impact participation in the Forward
Auction is the size of the geographic licenses to be offered.
Our NPRM proposed using Economic Areas, but some argue that
this would make it too difficult for smaller carriers to
participate in the auction. Our goal should be to allow as many
carriers as possible to bid, whether they be nationwide,
regional, or rural. So I am pleased to see alternative
proposals for license sizes, such as the newly-coined ``Partial
Economic Areas.'' If technically feasible, these proposals
deserve serious consideration.
Aside from the Incentive Auction, there are many other
opportunities when it comes to spectrum, from the H Block
Auction next month to the possible clearing of AWS-3 to greater
unlicensed use in the 5 gigahertz band. Consistent with my all-
of-the-above approach, I hope we seize all of these
opportunities in the near-term.
The second issue I will discuss is the Universal Service
Fund's Schools and Libraries Program, better known as E-Rate.
In many ways, E-Rate has been a success, as my colleague
has pointed out. But it also has had difficulties. The funding
process can stretch for years. Many schools and libraries feel
compelled to hire outside consultants to handle all the
complexities. Others don't bother applying at all. Services
like paging are prioritized over services like connecting
classrooms, and there is no meaningful transparency into either
the amount or the impact of E-Rate spending.
To solve these problems, I proposed a Student-Centered E-
Rate Program. This means an upfront allocation of funding and a
matching requirement so that applicants know how much money
they can spend, and have greater incentives to spend that money
wisely. This means simplifying the application process. This
means targeting funding and next-generation technologies, while
still letting local schools set their own priorities. And this
means making all funding and spending decisions accessible on a
central Web site that everyone can see.
In its first year, a student-centered approach would
provide an extra $1 billion for next-generation services, all
without collecting an extra dime from the American people.
Accordingly, I believe it would be premature to increase the
program's budget. And under no circumstances should we do so
without finding corresponding savings in other parts of the
Universal Service Fund. We cannot ask Americans to pay even
more in their monthly phone bills, especially when median
household income in this country is now lower than it was in
2007.
Thank you once again to Chairman Walden and Ranking Member
Eshoo for holding this hearing. I look forward to answering
your questions, and to continuing to work with you and my
colleagues in the months to come.
[The prepared statement of Mr. Pai follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Walden. Thank you, Commissioner Pai. We appreciate your
thoughtful testimony and your recommendations.
We will now go to Commissioner O'Rielly. Welcome aboard the
Federal Communications Commission. Welcome back before this
committee. And you know how the rules work, so please go ahead,
and again, thank you for being here today.
STATEMENT OF MICHAEL O'RIELLY
Mr. O'Rielly. Thank you to the Chairman and ranking member,
and members of the subcommittee.
In respect of the time of the subcommittee members, I would
like to make five points and then move on to answer your
questions.
Point 1. I am truly honored to be before the subcommittee.
I had the pleasure of working in front of the full committee
staff for 8 years, and it was one of the greatest jobs I will
ever have. The breadth of knowledge and command of the diverse
policy issues by the members of this committee are of the
highest quality.
Point 2. The FCC is an independent agency, not part of the
Executive Branch. It was created by Congress and serves to
implement the statutes enacted by Congress. I firmly believe
that our role is to follow the statute as written, and not
substitute our thoughts for your work. The Commission has no
right or authority to ignore the statute or statutory
deadlines. Thankfully, I have worked on most communications
policy statutes over the last 20 years, and have firsthand
knowledge of the intent behind many key provisions.
Point 3. The Commission has difficult but exciting work
ahead. If done correctly, it can have a significant positive
impact on U.S. gross domestic product and on national
productivity. Our communications companies are extremely
important to the U.S. economy, and we must allow them to
flourish in the world marketplace. The Commission's overall
focus, however, must remain on the consumer.
Point 4. In terms of specific items, my particular focus
and attention will be on the immediate work before the
Commission. In the big picture, the FCC must finish rules for
the Incentive Auctions, continue USF reform, proceed with the
IP transition trials, and complete our media ownership
proceeding.
Point 5. Part of the role of the Commission is to conduct
outreach and provide information to the public. I take this
function seriously, and it is why I am choosing to spend some
time on the issue of distracted driving caused by wireless
device users. Drivers need to put away their wireless phones
and focus their ``eyes on the drive.'' Let me be clear. My view
is the wireless industry is doing yeoman's work to get out the
message. They are aware of the problem, they are dedicating
considerable resources to finding solutions and education, and
they are working hard to prevent the horrible tragedies caused
by texting, viewing, emailing, tweeting, mapping, posting,
among others, while driving. It does not appear that more
government regulation will be helpful in this space. Instead, I
am talking to my colleagues to find ways to use our voice in
non-regulatory, non-costly ways to educate the public and
prevent senseless accidents.
Thank you.
[The prepared statement of Mr. O'Rielly follows:]
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Mr. Walden. You win the prize. Two minutes and 37 seconds
return. No, we want to thank you all----
Mr. O'Rielly. I'm familiar with this committee very well.
Mr. Walden. Yes, that is right. Yes indeed. Some will learn
along the way. We appreciate all your testimony and your
recommendations, and it is just good to have all five
Commissioners in place, or four Commissioners and Chair in
place. As Commissioner Pai said, it has been a year to the day,
I think, since we had the Commissioners here, so welcome
aboard.
I know we all have a lot of questions. I am going to--I
have learned at the heels of the former Chairman, Mr. Dingell,
about trying to get answers at a relatively rapid rate, so I am
going to try and pose some of these, not as skillfully as he
does, in a yes-or-no format, but the extent to which you can
address them rapidly, and that would be good.
And I want to start, Mr. Wheeler, with you as Chairman. I
know you all are voting on this NPRM today. I do want to
stress, it would be helpful if the public got to see that. As
far as I know, you and your staff are the only ones who see it
in advance. That is one of the process issues I hope you will
break through, and this maybe will be the last NPRM that is not
public first. But the Commission--I want to follow up and
figure out how you are going to permit, as your testimony
indicates, airlines to choose whether to allow voice calls, and
here is why I ask it. Is the Commission planning to waive
either the common carrier obligation to complete calls, or the
net neutrality rules on blocking VoIP packets? Both would seem
to be necessary in order to prevent voice calling from
aircraft.
Mr. Wheeler. So thank you, Mr. Chairman.
So first to your point that the NPRM that we are
considering today will be complete in listing the rule--the
words of the rule----
Mr. Walden. Right.
Mr. Wheeler [continuing]. That we are considering. In light
of the philosophy that----
Mr. Walden. Right.
Mr. Wheeler [continuing]. You and I share, which is let us
get it out there so people can see it.
Mr. Walden. Right.
Mr. Wheeler. The purpose of this is to do just that; to put
the language out so people can see it and give us their
comments on it.
Now, to your specific question, the Open Internet Order
specifically provides what is called the premises exemption,
and that means that coffee shops, bookstores, and airlines
mentioned by name, are exempted from the Order in that, under
the definition of reasonable network management, which is one
of the tools that are allowed for premises owners, which
include airlines, there is the ability to pick and choose
exactly what comes over.
Mr. Walden. All right. We will follow up more on the other
piece that you might have to deal with as well.
I want to ask you about Title II. You have a--you haven't,
but there has been a proceeding open at the Commission for a
long time that would--the reclassification docket. Are you
planning to keep that open or are you planning to close it?
Mr. Wheeler. So I think we are in a situation right now
where we are waiting for a court opinion on exactly what our
authorities are on a broad sense, and that there is no rush
between now and then to make a decision on Title II. I will
note, however, that, as you mentioned, this docket has been
open for a long time, and it has not had the threatened
chilling effect that some had worried about on investment in
wireless and broadband infrastructure. This is an issue that
clearly is going to have to be dealt with----
Mr. Walden. Right.
Mr. Wheeler [continuing]. And we will start with the court
decision.
Mr. Walden. Sorry, I have about three more questions I want
to try and get in here.
We understand the FCC has launched a study, a multimarket
study, of critical information needs. Apparently the study
includes a qualitative media analysis which would require
interviewing reporters and editors to figure out how the media
decide what news stories to run. Are these the kinds of
questions that government entities should be asking of the news
media? And with somebody with a journalism degree, I do get a
little chill up my spine thinking about the government asking
how these decisions are made. Doesn't it have an effect on the
media that the regulatory body is even asking these questions,
and how does it help you fulfill your Section 257 mandate fund
which is predicated?
Mr. Wheeler. So I think this goes back to the root of the
discussion you and I were having a moment ago about making sure
that the public understands what is going on. The 257
requirement mandates lowering barriers to access to media for
minorities, women, small business and other identified groups.
In order to make that kind of a judgment, you have to have
facts. In order to have facts, you do studies. And what we did
was, there is a study that has been proposed by a consulting
firm that we were working with, and we put that out for public
notice to exactly get the kind of input----
Mr. Walden. All right.
Mr. Wheeler [continuing]. That you are suggesting----
Mr. Walden. All right, I----
Mr. Wheeler [continuing]. But it is not, and this is not an
effort to influence the media.
Mr. Walden. Well, I am going to interrupt you just a second
because when you are spending somewhere between $209,918, and
some of the questions of the media personnel include what is
the news philosophy of the station, who decides what stories
are covered, what are the demographics of news management
staff, have you ever suggested coverage of what you consider to
be a story with critical information or consider its use, what
was the reason given for the decision, these seem like really
internal journalistic issues.
Now, I need to move on to one other because I am actually
over, but it is a very important question. The quantile
regression analysis, QRA, approach to provide universal support
for world companies, that was part of the Commission's USF
reform efforts, has had a negative impact, negative impact, on
investment and the deployment of broadband services in rural
America. Commissioner Pai, you have been an advocate for the
need to address this problem, to ensure that rural Americans
are not left behind. What do you recommend, Commissioner Pai,
needs to be done with regard to the application of the QRA?
Mr. Pai. Well, thank you for the question, Mr. Chairman.
I have seen the problems on paper. The Obama
Administration's Department of Agriculture, for example,
reported earlier this year that some 37 percent of funds from
RUS are sitting on the table because there is so much
uncertainty among rural carriers. And I have seen it in person
from my home state of Kansas to carriers in rural Alaska.
Because they are uncertain about what the future portends,
because of the QRA, they are not making additional investments
in terms of broadband, and that creates a digital divide that
we won't be able to bridge.
Mr. Walden. So, Chairman Wheeler, if I might, given the
negative impact of the QRA that it is having on broadband
development, especially in rural America, do you intend to
reconsider its application?
Mr. Wheeler. Yes. As a matter of fact, I have asked the
Bureau to draft an Order that I could share with my colleagues
to eliminate the QRA and to return to the high-cost loop
support model.
Mr. Walden. I appreciate that. I have got other issues
obviously with the FM translators for AM, and delay in the
rulemaking, dealing with cable operators and the groups
utilized by them, and so maybe we can follow up afterwards, but
the committee has been kind to let me overextend my
questioning, but we are usually fairly flexible on that here.
So I will now turn it over to the ranking member from
California, Ms. Eshoo.
Ms. Eshoo. That is great. So I have 7 minutes, right, Mr.
Chairman?
Mr. Chairman, you said that it is your 39th day. What I
would like to add to that is that I think your adult lifetime
of work has brought you to this. So it is not just really the
39th day----
Mr. Wheeler. It has been a long lifetime I think.
Ms. Eshoo [continuing]. It is a wonderful path that has
prepared you for this position.
I have a whole list of niche issues, which is really the
way we deal with all of these things.
First of all, do you think you are going to get a deal on
cell phone unlocking by the end of this year?
Mr. Wheeler. We will be presenting to the Commission today,
the voluntary agreement that has been reached with the wireless
industry. And so the answer to your question is strongly yes.
Ms. Eshoo. That is just terrific. My second question to
you, Mr. Chairman, is last week, as you know, I joined with my
colleagues, Representatives Doyle and Matsui, to ask you to
take action to prevent AT&T from implementing a significant
rate hike for their special access customers. I appreciate what
you have done in terms of the suspension, but I think that
there is much more than needs to be done on special access
reform.
Can we expect further action on special----
Mr. Wheeler. I----
Ms. Eshoo [continuing]. Access reform?
Mr. Wheeler. I apologize, Ms. Eshoo, but I am currently
recused from that----
Ms. Eshoo. OK.
Mr. Wheeler [continuing]. Proceeding, and so----
Ms. Eshoo. I see. So how will it happen?
Mr. Wheeler. It moves ahead with the other members of the
Commission.
Ms. Eshoo. I see. Well, I am just going to assume that they
are going to--that this area is going to be examined because we
really have to have reasonable rates for this important
service.
Commissioner Rosenworcel, thank you for your testimony. I
love the way you present things. It is so clear. You can feel
the sense of urgency and why it is urgent.
How are you going to pursue getting this done at the
Commission? The whole issue of E-Rate, everything that is
attached to it, you have presented an eloquent case, and I
think that you gave a fantastic speech last week on 911 and the
problems that we have between indoor and outdoor. So on both
that and the E-Rate, maybe I should be asking the Chairman what
he plans to do on E-Rate. I know what you want to do, but maybe
we should just switch over to Chairman Wheeler.
Mr. Wheeler. Well, I think on E-Rate, that there is a
leader in this Commission, and that Commissioner----
Ms. Eshoo. We only need five.
Mr. Wheeler. What?
Ms. Eshoo. We only need five.
Mr. Wheeler. I would like to associate myself with the
remarks of----
Ms. Eshoo. Good. Good.
Mr. Wheeler [continuing]. Ms. Rosenworcel.
Ms. Eshoo. Well, we will look forward to you joining her in
that effort, and maybe the next time the Commission comes
before us, you can tell us the steps that you are going to
take.
Mr. Wheeler. We are going to put out a schedule, just like
we have for the Incentive Auction and the IP transition, to
address this issue.
Ms. Eshoo. That is terrific. On the challenge of the indoor
versus outdoor and wireless and 911, what is your plan to
address this?
Ms. Rosenworcel. Well, as the old saying goes, you may only
make one 911 call in your life, but it will be the most
important call----
Ms. Eshoo. Right.
Ms. Rosenworcel [continuing]. You will ever make.
Ms. Eshoo. Yes.
Ms. Rosenworcel. And right now, if you make that call from
your wire line phone, your first responder knows exactly where
you are.
Ms. Eshoo. Right.
Ms. Rosenworcel. If you make that call outdoors, in a
field, using your wireless phone, we have location accuracy
standards so that first responder----
Ms. Eshoo. Well, I am asking----
Ms. Rosenworcel [continuing]. Can find you.
Ms. Eshoo [continuing]. What you want to do about where the
challenge lies.
Ms. Rosenworcel. So----
Ms. Eshoo. We know what is working.
Ms. Rosenworcel [continuing]. Indoors----
Ms. Eshoo. Yes.
Ms. Rosenworcel [continuing]. Is the problem. We have no
standards. And increasingly, household are cutting the cord.
More than \1/3\ of households rely exclusively on their
wireless phones. So I don't think it is acceptable that when
people make emergency calls, first responders can't find them.
Ms. Eshoo. Yes.
Ms. Rosenworcel. I have recommended in that speech that you
mentioned that we start a rulemaking to address this, because
we have heard both from carriers----
Ms. Eshoo. Yes.
Ms. Rosenworcel [continuing]. And from public safety
officials on the frontline that this is an issue that----
Ms. Eshoo. Well, good for you for identifying this and
taking it up, because I think one of the things that I taught
my children from their earliest memory was 911, and putting
their little fingers on the keypad so that they would
understand that, and I think----
Ms. Rosenworcel. Me too.
Ms. Eshoo [continuing]. You are absolutely right.
Commissioner Pai, you made a wonderful comment, something about
not one dime more on phone bills. I want to raise something
with the Chairman, going back to it, about below-the-line fees.
Representatives Doyle, Lujan, Matheson, myself, we wrote to our
Nation's leading wireless and wire line providers and we asked
them about their practice of applying below-the-line fees on
monthly bills. I agree with Commissioner Pai. That is why we
wrote. We have a concern about what people are paying. These
things are hidden. They think that they are--they think
everything on their bill is a tax. And I have to tell you, I
brought my bills in. I couldn't tell what the heck they were.
Who was doing what to whom and what it was for. So tell me what
you think the Agency, or if you have--I know there is a long
list of big challenges, but these are still important issues
for consumers. What steps can the Agency take under existing
statute to ensure that consumers know exactly how much they are
paying each month, especially prior to signing up for their
service, and this whole issue of below-the-line fees?
Mr. Wheeler. Yes. Ms. Eshoo, this is a very legitimate
concern. The specific one I believe you are referencing is a
re-transmission consent----
Ms. Eshoo. That too.
Mr. Wheeler [continuing]. The charge----
Ms. Eshoo. Yes.
Mr. Wheeler [continuing]. That cable operators have just
begun putting on----
Ms. Eshoo. Right.
Mr. Wheeler [continuing]. The bill.
Ms. Eshoo. Right.
Mr. Wheeler. And I say just begun, and I am trying to get
our arms around that and figure out just exactly what our
authorities are to answer your question. It does, however,
strike me that it fits right in, the broader issue that the
Chairman and Mr. Upton and others have talked about in terms of
the kinds of issues that need to be addressed in a Telecom Act
rewrite here, is just what is going on. If they are----
Ms. Eshoo. Yes, but that will be like 7 years from now.
Mr. Wheeler. Well, no, but I----
Mr. Walden. Oh, no.
Ms. Eshoo. Well, yes.
Mr. Wheeler. I won't speak----
Ms. Eshoo. Let us see.
Mr. Walden. I won't get crosswise between you and the
Chairman.
Ms. Eshoo. OK. Yes, no. Thank you. Thank you, Mr. Chairman,
and thank you Chairman Walden.
Mr. Wheeler. Thank you.
Ms. Eshoo. And thank you to the entire Commission. I want
to say also a welcome to the whole new team that has come in,
and we wish you well, we really do. And the Chairman and the
Commission will operate at a higher level because of the high
level of people that have come in to support the work. So
congratulations to each one of you.
Mr. Walden. We will now move on to the vice chair of the
full--of the subcommittee, Mr. Latta, from Ohio from 5 minutes.
Mr. Latta. Thank you very much, Mr. Chairman. Again, thanks
very much for our Commission members for being with us today.
And this is a question I would like to ask all of you, and
this question is, the Incentive Auction legislation prohibits
the FCC from excluding qualified bidders from the auction. And
fortunately, while the Incentive Auction process works its way
up to the Commission, it appears that the Wireless Bureau is
simultaneously working on the ``spectrum aggregation'' docket
to achieve--de facto spectrum caps. Will you commit to allowing
any interested bidder that complies with the statutory
requirements to participate fully in the auction? And,
Chairman, if I can start with you, because I notice in your
testimony on page 6 that you talk about the Incentive Auction,
you had said that you are looking at a voluntary market
oriented approach, so if I could start with you.
Mr. Wheeler. The statute is quite explicit in that regard
that the Commission may not exclude somebody from
participating.
Mr. Latta. And also, what about aggregating, would it be
wide open for everyone to be involved in that?
Mr. Wheeler. Well, it is interesting with the--what has
been developing here. I mean the CEO of AT&T recently came out
with a statement saying, wait a minute, I think I would like to
have rules to make sure that not one party can run away with
all the spectrum. So I think there is--in between those
positions is where reality exists, but the statute, I agree, is
quite clear. The statute says that you will not exclude
anybody, and the statute also says that the Commission will
design an auction so as to promote economic opportunity and
competition and consumer choice to sustain a healthy wireless
marketplace, and we will do both.
Mr. Latta. Madam Clyburn.
Ms. Clyburn. Yes, Section 6404 is clear that any party that
abides or obeys the rules, that they are qualified to
participate. It also makes clear that the Commission has the
authority to enforce and introduce rules of general
applicability that will allow for spectrum aggregation in order
to promote competition. So again, my colleague mentioned that
part of the reason for, I think for some of the robust
participation and the type of ideas that we are seeing is
because we took a dual path on the same day we released the
rules, or released the notice of opposed rulemaking on
Incentive Auction, we also released a notice of proposed
rulemaking on trying to glean information about this dual path.
So I think that this, in the long run, will help and improve
our information and information dissemination and our
acquisition and rulemaking once we decide on a clear path
forward.
Mr. Latta. Thank you. Commissioner?
Ms. Rosenworcel. The Middle-Class Tax Relief and Job
Creation Act says that we can have rules of general
applicability, but we cannot exclude anyone from participation
in the auction. I think it is easy and simple; we just have to
follow the law.
Mr. Latta. Commissioner Pai?
Mr. Pai. I would agree with my colleague, and I would also
point out that if you look at the end goal which is to have a
successful auction that pushes out a lot of spectrum, yields
sufficient revenue to fund national priorities, and provides
fairness to all parties involved, then we should not
preemptively deter participation from wireless carriers by
adopting unduly strict spectrum policies.
Mr. Latta. Commissioner O'Rielly?
Mr. O'Rielly. I want to thank my colleagues for stating
that the statute is clear because, as one of many people who
worked on it, it was an effort to give the Commission some
authority in this space when members couldn't come to
agreement. I am extremely hesitant to impose limitations on
spectrum holdings because we have certain other obligations
under the statute. In a nice way, I mean the money from the
auctions has already been spent. We have already spent the
money from the Spectrum Act, and so we have obligations to
provide $7 billion for FirstNet, and we have deficit reduction
numbers that have already gone out the door. So I am worried
about anything that would depress auction revenues. I am
certainly aware of the statute and I want to remain open-
minded, but I am hesitant at this time to impose any type of
limitation.
Mr. Latta. Thank you. And many of you know that rural call
completion has been an ongoing issue in my district, and I
commend the FCC for producing the November 8 Order and Further
Notice of Proposed Rulemaking to improve the Commission's
ability to monitor the delivery of calls to rural areas by
mandating certain recording, retention and reporting
requirements from carriers. And, Commissioner Pai, do you
believe the November 8 Order will resolve the call completion
problem or does more need to be done?
Mr. Pai. Congressman, I certainly hope that it will.
Whether it is Toledo or Topeka, we need to figure out where the
kink in the system is, whether it is intermediate providers,
whether it is last-mile, what point in the network is failing.
And if it is a technical problem, then we can take steps to fix
that technical problem, but if it is something else, then the
FCC needs to be empowered to take corrective action. So I
certainly support taking the appropriate actions sooner rather
than later on that issue.
Mr. Latta. Thank you very much.
Mr. Chairman, I see my time has expired and I yield back.
Mr. Walden. Thank the gentleman.
We now turn to the ranking member of the full committee,
Mr. Waxman, for 5 minutes.
Mr. Waxman. Thank you very much, Mr. Chairman.
I just want to indicate that under the Act, the FCC may not
single out a specific provider for exclusion from a system of
competitive bidding. At the same time, the FCC is permitted to
adopt and enforce rules of general applicability that promote
competition. Even AT&T recently acknowledged they would support
rules that limit the amount of spectrum any one company could
acquire as long as the rules applied evenly to all auction
participants.
Chairman Wheeler, as you know, I am a strong supporter of
the FCC's open Internet rules because I believe the Internet
must remain an open platform for innovation and commerce. You
have emphasized the importance of the Open Internet Order. At
the same time, you recently made comments suggesting that an
Internet service provider could charge a content provider, such
as Netflix, a fee in order to guarantee the best available
transmission speed. Do you see these type of business
arrangements as consistent with the FCC's open Internet rules
that you support?
Mr. Wheeler. Thank you, Mr. Waxman, for raising that issue
because it gives me an opportunity to get more specific than I
was in Ohio.
I am a strong supporter of the open Internet rules, full
stop. The rules were written in such a way as to envision
opportunities for innovation and experimentation, and to impose
on them a balance between protecting the open Internet,
protecting consumers and stimulating innovation. New ideas
under the Open Internet Order, new ideas such as those you have
referenced, in a wireless environment particularly, are not
prohibited, but there is a clear responsibility for the
Commission to make sure that what takes place does not
interfere with Internet access, is not anticompetitive, and
does not provide preferential treatment, and we will enforce
that. We will maintain the balance between innovation and
assuring there is an open Internet.
Mr. Waxman. I appreciate your expanding on that issue.
While network infrastructure and technology have changed since
the passage of the 1996 Telecommunications Act, the values
embedded in the Act have not. And, Mr. Chairman, I know that
the Commission will soon begin a process to collect real-world
information and data on the IP transitions. How will the
Commission continue to advance the longstanding goals of
competition, universal access and consumer protection
throughout this transition process?
Mr. Wheeler. You know, Mr. Waxman, there are many people
who have described the IP trials as a technology trial. I don't
think they are a technology trial. We know how to build IP
networks. They are exactly what you just phrased. They are a
values trial. They are how do we make sure that the values
that, for 100 years, Americans have come to expect from their
networks continue even after the way in which that network
operates changes. And that is what we are going to be looking
for in these trials. It is not whether the guzintas and the
guzouttas wash. We know that can get taken care of. It is how
do you preserve the values in the new technological
environment?
Mr. Waxman. Commissioner Rosenworcel, do you want to add
anything to that?
Ms. Rosenworcel. I think there are so many exciting things
that can come with new networks, and I think we should embrace
the future rather than reject it. So I think experimenting in
these kind of trials is a smart way to go, but as we move into
the future, what we do has to be informed by the values that
have always been a part of communications policy. And I see
four: public safety, universal access, competition and consumer
protection.
Mr. Waxman. OK. Commissioner O'Rielly----
Mr. O'Rielly. Yes, sir.
Mr. Waxman [continuing]. I appreciate your appeal to
bipartisanship in your testimony, and I know you played an
important role in helping us get bipartisan legislation in the
passage of the Public Safety and Spectrum Act last year,
because you helped negotiate the provisions and the
availability of unlicensed spectrum in the Broadcast Incentive
Auction.
What is your perspective on unlicensed spectrum generally,
and do you think the Commission is on the right track in
balancing the availability of unlicensed and licensed bands?
Mr. O'Rielly. Yes, I am a strong proponent of unlicensed
spectrum. I am always amazed what the innovators and the
experimenters can do with unlicensed spectrum. I think there is
great opportunity in 600 MHz for more unlicensed spectrum. The
NPRM that was put out on this matter proposed a number of
different ideas where unlicensed could fit. The Commission
proposed Channel 37, the guard bands, if there are going to be
guard bands, depending on what our band plan looks like. We
talked about wireless microphones. There's still going to be
white space at least in 500 MHz, maybe in 600 MHzas well. And
then there are going to be residual conversions depending if
you are talking about converting from 6 megahertz broadcast
channels to 5 megahertz wireless channels. So there should be
opportunities in the Incentive Auction proceeding after our
rules are complete for unlicensed spectrum, and I am strongly
supportive of those.
Mr. Waxman. Thank you.
Mr. O'Rielly. The only difficulty is figuring out how big
those guard bands should be.
Mr. Waxman. OK, thank you. And my last question is to
Commissioner Pai. You stated in your testimony that 92 percent
of Americans now can choose from 10 or more wireline
competitors. If that number is accurate, doesn't it demonstrate
that the procompetitive policies of the '96 Telecom Act are
working, and don't you believe we should continue to support a
marketplace that gives non-incumbents a fair chance to compete?
Mr. Pai. Congressman Waxman, thank you for the question. I
think what the multiplicity of choices that consumers enjoy
today demonstrates is that in the IP environment where you have
convergence, something that we only dreamed about during the
'96 Act--where you have telephone companies competing with
cable companies competing with wireless companies and others to
provide the same services that we can now rely in a way we
could not in 1996 on the marketplace and technological
innovation to drive consumer choice. And so to the extent that
there are values of competition embedded in the 1996 Act, I, of
course, embrace those, but I think we also need to be mindful
of the fact that technology can quite often outpace where laws
and regulations are, and that appears to be where we are with
respect to the IP transition.
Mr. Waxman. Yes, but do you think we should support a
marketplace that gives non-incumbents a fair chance to compete?
Mr. Pai. Absolutely. I think the marketplace should give
every competitor a fair chance to compete.
Mr. Waxman. Thank you. Thank you, Mr. Chairman.
Mr. Walden. Now turn to the gentleman from Michigan, Mr.
Rogers.
Mr. Rogers. Thank you very much, and as the representative
of Michigan State University, I want to say thank you for
giving me a great weekend. I appreciate that. I do find it
suspicious, however, that my phone has not worked since the
game.
Mr. Wheeler. Yes.
Mr. Rogers. I wonder if you might be looking into that for
me, Mr. Chairman.
The FCC's recent Communications Security Reliability and
Interoperability Council meeting----
Mr. Wheeler. Right.
Mr. Rogers [continuing]. I understand you talked about the
need to apply metrics and evaluate cyber security. Can you
elaborate on that for me?
Mr. Wheeler. The CSRIC, which is the shorthand for the
group you are talking about, has done a terrific job in using
the multi-stakeholder process to come up with rules on botnets,
on DNSSEC, on router security, important kinds of network
security issues, but it is not enough just to say, OK, here are
the rules, and then walk away. The question is, are the rules
working. And so what I had asked CSRIC to do, not for us to
impose but in the multi-stakeholder process, is to say how do
you establish metrics to know if this is working, because that
is the trust-but-verify kind of a situation.
Mr. Rogers. Well, how do you find those--how are you
working through that process to define metrics in threats that
change literally by the hour?
Mr. Wheeler. So on those 3 issues, for instance, on
botnets, for instance, how can you track the movement of where
botnets are going, they seem to have moved into data centers,
for instance, and what do we know about that and what might
that suggest, and what are we seeing in terms of results of the
implementation of the kinds of things that CSRIC has suggested.
That is what we need to know.
Mr. Rogers. All right, and if you find that out, and you
find that you are in some disagreement with industry on meeting
those standards, do you foresee a regulatory scheme?
Mr. Wheeler. Well, I wouldn't want to presume a
hypothetical. I would hope that we would be working with
industry to identify what needs to be done, and much like we
are going to announce today on cell phone unlocking when we sat
with industry and said, here is a problem, it has to be solved,
and by the way we will have metrics on that. I think that is
the preferable first approach, and that is the approach that we
are taking with CSRIC.
Mr. Rogers. But when you say that, does that mean--if I
hear you correctly, that means you are at least contemplating a
regulatory scheme of some sort, beyond just the voluntary here
is our metrics, try to----
Mr. Wheeler. Yes, that is----
Mr. Rogers [continuing]. Meet those metrics.
Mr. Wheeler [continuing]. That is the right question but it
is not--the key word is contemplating. I have talked repeatedly
about what I call the seesaw, the regulatory seesaw. You do
this, we don't need to do this. And so what CSRIC is doing is
saying, OK, here are the kinds of things that need to be done.
Saying let us measure them, make sure that is going because the
result is that we don't. If the seesaw has to tip, it has to
tip, but it only tips on the basis of need, not the basis of
theory.
Mr. Rogers. If I understood your answer, there is a
possibility you could regulate.
Mr. Wheeler. There is always the possibility, sure.
Mr. Rogers. Yes, OK, we should have lots of conversations
on that. I worry that by the time you have processed your
regulatory framework, you are too late, you have missed the
boat, the threat changes----
Mr. Wheeler. I----
Mr. Rogers [continuing]. They have moved down the--OK.
Mr. Wheeler. I could not agree more. The challenge of
networks and the reason why the multi-stakeholder process is
preferred----
Mr. Rogers. Yes.
Mr. Wheeler [continuing]. Is because it is much more
dynamic, much more flexible, moves much quicker than a
regulatory process can, and then can stay flexible.
Mr. Rogers. OK.
Mr. Wheeler. And that is why I am trying to say, yes, this
is the preferred process to deal with.
Mr. Rogers. So you are not going to move away from the
council?
Mr. Wheeler. I am sorry?
Mr. Rogers. You are not going to move away from the council
model for regulation, you are going to continue to try to use
that.
Mr. Wheeler. The multi-stakeholder process----
Mr. Rogers. Yes.
Mr. Wheeler [continuing]. On this is the right way to go.
Mr. Rogers. Perfect. Can you talk about Team Telecom? It is
an important compliment to the CFIUS process----
Mr. Wheeler. Right.
Mr. Rogers [continuing]. In terms of preventing investments
or IT equipment purchases to prevent, certainly, a threat to
our national security interests, like Chinese attempts to gain
control of IT and telecommunication notes in the United States.
Can you walk us through where you are at on that to give us
some idea where you are--what you are thinking?
Mr. Wheeler. Well, when issues come before the Commission
relative to mergers, acquisitions, whatever the case may be,
the input from Team Telecom is always sought and taken into
account, and is crucially important.
Mr. Rogers. Yes. Do you see an improvement to that process?
Can we do something different? You have a limited set of--once
that report comes back, you have a limited set of decisions you
can make. You are either in, you are out----
Mr. Wheeler. Correct.
Mr. Rogers [continuing]. Or you disagree with the decision.
Is there something better we should be doing there, providing
some authority for you all to be, given again, the nature of
the changing technology and how fast the changes----
Mr. Wheeler. I have not had to live through one of these
yet, so I am probably not qualified to opine here on the fly. I
would love to look into this and to have a discussion with you
about it.
Mr. Rogers. We are looking at some reforms to CFIUS to try
to make sure we are keeping up, and I look forward to that
dialog.
Mr. Wheeler. Great. I will look forward to that.
Mr. Rogers. Thank you very much for being here.
Mr. Walden. Thank you, gentlemen.
We will now turn to committee chairman emeritus, Mr.
Dingell, for--also from Michigan, I believe, for 5 minutes. Go
ahead, Mr. Dingell.
Mr. Dingell. Mr. Chairman, I commend you for this very
important hearing, and I have no comments on football or other
matters.
I want to welcome my old friend, Chairman Wheeler, to the
committee. We look forward to great things from you. I am
satisfied you will serve will distinction. I want to also
welcome Commissioner O'Rielly, and I want to commend
Commissioner Clyburn for her fine service as Acting Chairwoman.
Quite frankly, your daddy would be very proud.
My questions this morning are going to be directed solely
at Chairman Wheeler, and will elicit, as you not be surprised
to hear, yes or no responses.
Chairman, I would like to start with the Reverse Auction of
Broadcast Frequencies, authorized by the Middle Class Tax
Relief and Job Creation Act. I note you recently announced that
the Commission will not conduct such auctions until 2015. That
gives you an extra year. In the meantime, do you expect to
complete negotiations concerning the relocation of broadcast
frequencies with Canada, Mexico and our border areas, yes or
no?
Mr. Wheeler. No, but, am very hopeful that we will be able
to move it forward, and as DTV showed, you don't have to have
the signature on the page.
Mr. Dingell. And you know that that can cause an awful lot
of viewers to lose service, and an awful lot of screens to go
dark in our part of the country. Chairman Wheeler, similarly,
paragraph 15 of the Commission's notice of proposed rulemaking
for the Incentive Auction states, ``the Commission expects
interested parties will have an opportunity for meaningful
comment on all specific repackaging methodologies it is
considering before it makes a decision.'' Does the Commission
publicly commit to sharing with the public the broadcast
frequency repackaging methodology it adopts, as well as the
variables and other inputs it may use to predict repackaging
results, yes or no?
Mr. Wheeler. I will go beyond yes and say absolutely.
Mr. Dingell. Now, Mr. Chairman, let us move on to the
Forward Auction of Broadcast Frequencies. Section 6403(C) of
the Middle Class Tax Relief and Job Creation Act provides the
Commission may not grant licenses through Forward Auction,
reassigned or reallocated broadcast frequencies, or revoke
spectrum usage right unless it proceeds--unless the proceeds of
the Forward Auction are greater than the following 3 factors
combined. First, the total amount of compensation the
Commission must pay successful bidders in the Reverse Auction,
the costs of conducting a Forward Auction, and the estimated
costs for the Commission to pay for broadcaster reallocations.
In addition, it is in the public interests that the Commission
ensure the auction raises a significant amount of money in
order to help build out of the FirstNet. Together, these
constitute a significant pressure on the Commission to raise
sufficient revenues to accomplish these objectives. Do they
not, yes or no?
Mr. Wheeler. Yes.
Mr. Dingell. Now, Mr. Chairman, at the end, will the
Commission adopt transparent and simple rules to encourage
participation by the broadest group of wireless providers in
the Forward Auction, yes or no?
Mr. Wheeler. Yes.
Mr. Dingell. Mr. Chairman, it is--let us focus our
attention on intelligent transportation systems. This is of
considerable importance to my part of the country and our
principle industries, and the 5 gigahertz band. Given that the
Commission licensed ITS almost 15 years ago, is it reasonable
to say that it would be premature for the Commission to
authorize unlicensed use of the 5850-5925 megahertz band before
the studies are completed, that confirm such use would not
cause harmful interference with ITS services and other
incumbent users, yes or no?
Mr. Wheeler. Yes, and let me go further. We will not
authorize if there is harmful interference.
Mr. Dingell. I am very comforted that you are here this
morning, Mr. Chairman. Now, Chairman Wheeler, do you believe
that the Commission should approve unlicensed use of the 5850-
5925 megahertz band before definitively establishing no risk of
harmful interference with ITS systems or practical strategies
to mitigate such risk, yes----
Mr. Wheeler. No, and I repeat, will do nothing that causes
harmful interference.
Mr. Dingell. Now, Mr. Chairman, alternately, is the
Commission considering moving forward with rulemaking opening
up only the 5350 megahertz band for unlicensed use, yes or no?
Mr. Wheeler. So this is where I need to just ask a
question, sir. The answer is yes, if it is are we considering.
The answer is no, if we have decided.
Mr. Dingell. Now, Mr. Chairman, I would like to commend you
for your work in advancing the transition to IT-based networks.
Will the Commission consider an Order in January 2014 that will
address geographic trials, as well as how to protect in the
best way consumers using IT-based networks, yes or no?
Mr. Wheeler. Yes.
Mr. Dingell. Mr. Chairman, you have been most gracious to
me, and I thank you for this.
Mr. Chairman, your comments have been most enlightening and
helpful. I want to thank you and the members of the Commission
for your presence and assistance throughout this morning. Thank
you, Mr. Chairman.
Mr. Walden. Thank you very much. The gentleman yields back,
and the Chair now recognizes for 5 minutes Mr. Guthrie.
Mr. Guthrie. Thank you, Mr. Chairman. I appreciate that.
Chairman Wheeler, and welcome to the FCC also, Mr.
O'Rielly.
Mr. Wheeler. Thank you, sir.
Mr. Guthrie. I appreciate having you here. And,
Commissioner Clyburn, again, I echo the good work that you did
in your time as Chairwoman.
But there seems to have been a lot of progress being made,
this is to Chairman Wheeler, a lot of progress been made to
free-up the 1755 to 1780 hertz band for commercial use,
megahertz band, and I know the FCC has already sought comment
on how this band should be used for commercial purposes. Is the
FCC on track to auction the 1755 to 1780 band paired with the
2155, 2180 band, and if so, when will it occur?
Mr. Wheeler. So the answer is yes, we are on track. There
are some issues that still have to be worked out with NTI and
DOD and some----
Mr. Guthrie. Are there some impediments----
Mr. Wheeler [continuing]. Details, but I think--I am sorry,
what?
Mr. Guthrie. Are there some impediments that you can
identify that are--that you are on track, but you say there are
some impediments?
Mr. Wheeler. Yes, I think these are just implementational
kinds of things in their agreement, but to be specific to your
question, we would hope that we could do it in the September
time frame.
Mr. Guthrie. September time frame, great. And then you
spent some time in the wireless industry I know, and have seen
firsthand how spectrum demand has grown exponentially. I
realize that a lot of our short-term focus is on the Incentive
Auction on the 1755 to 1780 megahertz, but looking forward,
what is the FCC doing to plan for future spectrum demand, and
how can the FCC ensure that there continues to be a pipeline on
new spectrum to satisfy what consumers--an insatiable demand
for bandwidth anywhere, any time. So to look at again, how do
you plan for future spectrum demand beyond this? What kind of
thoughts do you have----
Mr. Wheeler. Sure.
Mr. Guthrie [continuing]. Beyond this----
Mr. Wheeler. Sure.
Mr. Guthrie [continuing]. Forward Auction?
Mr. Wheeler. Well, first we say yay and verily to what you
and Ms. Matsui have done. Applying the Incentive Auction
concepts to government spectrum, I am a believer that by the
time that you peel everything away, it comes down to economics
no matter who you are. Right? And the economics of an agency
where they can get cash to help them fulfill their mission is
an important kind of decision they should make. And you have
created--with Ms. Matsui, have created a structure where this
can happen.
Mr. Guthrie. Well, we looked at that in our working group,
and it is a lot of work for these agencies to do that. It is
not something you can just wish away, as I learned more and
more about it. And I always say I didn't run around Kentucky
saying, send me to Washington and I will deliver you spectrum.
And so you learn things when you get elected that you never
thought you would deal with, and I have found this fascinating
because, as I said, my constituents demand it. They want the
fast bandwidth. So----
Mr. Wheeler. But it is also----
Mr. Guthrie [continuing]. But it is----
Mr. Wheeler. It is interesting----
Mr. Guthrie [continuing]. But it is true that we have to--
if we were looking at it just by law say, by Fiat say, you have
to release spectrum, I mean you could get numbers, well, it is
going to cost this, it is going to cost that, and so it does
give them a reason to go in and make this happen.
Mr. Wheeler. And the interesting thing is, I was involved
in the negotiation for AWS-1 back in the year 2000, and the
first negotiation with the Department of Defense, and we kept
saying to them, but you are going to get money, and they kept
saying, but we can't spend it because it goes to the General
Treasury.
Mr. Guthrie. Right.
Mr. Wheeler. And so what you have done is set up a
structure to help compensate people. The beauty of it is that
what it does is that it creates a cash flow for them to be able
to meet their new needs, and to be able to upgrade their
equipment, and so it is a winning situation all around.
Mr. Guthrie. That is like, Ms. Matsui, she said--I think
yesterday you said, win, win, win, I think is what it does for
the consumers, for the agencies and for the taxpayers. So
beyond--so in the future, what are you kind of looking at, do
you think should happen, just for bandwidth and more spectrum
as we all move into the future?
Mr. Wheeler. I am sorry, sir?
Mr. Guthrie. Well, I must just as we move on into the--
beyond the immediate auctions and things, what other things do
you think we can do to free spectrum?
Mr. Wheeler. So first of all, we are constantly looking at
how you get the most efficient use out of the spectrum. One of
the interesting things that we are going to be running is a
test on what do you do with spectrum sharing, because there is
probably not--there is, in a digital world, the opportunity to
share spectrum, but our spectrum allocations were set up with
analog assumptions.
Mr. Guthrie. Yes.
Mr. Wheeler. And so if we can share it, reuse it, it is a
great opportunity and we need to be pursuing that as well.
Mr. Guthrie. Yes, a great metaphor of that I always thought
was you don't have a lane on a highway dedicated just for
emergency vehicles, but when emergency vehicles come down the
highway, people get out of the way.
Mr. Wheeler. Good point.
Mr. Guthrie. And I think that is a great metaphor for that.
Well, Mr. Chairman, I will yield back 15 seconds.
Mr. Walden. Chair recognizes the gentlelady from California
for 5 minutes.
Ms. Matsui. Well, thank you very much, and let me just
follow up on my partner's questions here.
I know back in the day, you were looking at the use of
federal spectrum, and I think it is a concept now that has
finally come to the point where we can actually do something
about it. And I believe that this is a way to really encourage
the federal agencies to relinquish a non-critical spectrum, and
as Congressman Guthrie says, it is not easy to do, but we
worked with DOD and we made a lot of progress.
Now, I am also looking at what Commissioner Rosenworcel has
also always said about using the carrot-and-stick approach
regarding the federal spectrum holders, and having them
relinquish their spectrum. Now, in your view, and I also want
Chairman Wheeler to comment on this too, are the financial
incentives identified in the bill adequate to encourage federal
agencies to relinquish non-critical spectrum? And I think I
will go to you first, Chairman Wheeler.
Mr. Wheeler. I don't know the answer to that because I
haven't market-tested it, and I think that ``is this enough
incentive?'' is a market-test question. So I am going to, with
all due respect, punt. What is important is the concept that
has been developed, and it would seem to me that once that
concept is codified, that making sure that incentives are
adequate is frankly the easier lift on the whole exercise.
Ms. Matsui. All right, thank you. Commissioner Rosenworcel?
Ms. Rosenworcel. Thank you for the question. I think first
of all that the legislation that you and Congressman Guthrie
have introduced is terrific. The demand on our airwaves is
going up and the supply of unencumbered spectrum is going down.
It is time to be creative. This legislation is creative. As far
as the incentives go, I think it is a good starting point for
conversation because right now, federal agencies, by some
measures, have veto control over about 60 percent of our
airwaves. They use their spectrum, their mission focus, to
protect our national defense, to keep our planes in the sky, to
tell us what weather patterns are coming, but they don't have
structural incentives to be efficient with it. Your bill is a
start of a conversation about how we should apply those
incentives, and once we get them right, we will have a catalyst
for a lot more spectrum from new mobile broadband uses, which
would be a terrific thing for the economy.
Ms. Matsui. Great. Thank you very much.
Chairman Wheeler, you have emphasized how important it is
for you to lead the FCC in fact-based decision-making. In the 5
gigahertz proceeding, for example, this committee is looking to
the FCC's engineering expertise to determine the conditions
under which Wi-Fi can use a band in a way that protects the
missions of federal systems and commercial systems. How are you
and your staff planning on responding to the challenge, and is
this proceeding a priority for the Commission?
Mr. Wheeler. So as Commissioner O'Rielly said, I would
associate myself with his comment that he is a strong supporter
of unlicensed. The key, of course, is to make sure that there
is no harmful interference, as I have discussed with Mr.
Dingell, but I believe that if you take a look at the 5
gigahertz, and you look at block 1, NII-1, that we should be
moving to a rulemaking on that, which is something that
Commissioner Pai has often suggested. Also when you look at
band 2 which is DOD, and band 4 which is ITS, that we have to
address the questions that I was addressing with Mr. Dingell,
and that is to make sure there is no harmful interference, and
there is nothing in the record that really gets to that at this
point in time, but we need to build that record.
Ms. Matsui. OK, fine, thank you very much. And I have to
ask a broadband-adoption question here. The FCC has, Chairman
Wheeler, implemented broadband adoption as part of the Lifeline
reform measures. Can you explain what the FCC plans to do
here----
Mr. Wheeler. Yes.
Ms. Matsui [continuing]. And what is the goal of these
pilot projects?
Mr. Wheeler. So there are 14 projects that are taking place
around the country that we are funding with some of the savings
that we have had in other parts of the program, and we are
going to be looking at, for instance, what is the impact of a
Lifeline-like subsidy on broadband adoption, and we are going
to be looking at what are the kinds of training issues to help
people understand what broadband can do for them, and the kinds
of things that they can do once they get on the Internet,
because those seem to go part and parcel. It is not just that
you can access it, but also that you can use it and you
understand why you ought to be using it.
Ms. Matsui. So are you going to use this information to
develop a responsible permanent broadband adoption program?
Mr. Wheeler. That is the goal. These are trials to inform
our future actions, and wireless broadband and broadband
adoption are kind of the sine qua non of what the Agency does.
Ms. Matsui. OK. I want to thank you.
I yield back my time.
Mr. Walden. The gentlelady yields back her time.
And the Chair recognizes the gentleman from Texas for 5
minutes.
Mr. Barton. Thank you, Mr. Chairman, and I want to make a
comment on the audience. This one is a lot bigger than the one
upstairs with the joint hearing, and they seem to be more
interested too. So I guess that is a credit to the subcommittee
and the FCC Commissioners. We have the NRCC--not NRC, NRC.
Mr. Walden. I think you need to be clear on that one.
Mr. Barton. That would be news, wouldn't it, if Greg Walden
was testifying upstairs? Anyway, I just have one question.
The Middle Class Tax Relief and Job Creation Act requires
repackaging and auctioning of the 65 megahertz of spectrum, and
the low-powered TV stations, of which there are hundreds if not
thousands, are not guaranteed continued existence, but Chairman
Walden, this subcommittee, myself, have a bill that we hope to
introduce very soon. While it doesn't guarantee them any
additional rights, it does create, I hope, a pathway so that
they may continue to exist. As the new Chairman of the
Commission, Mr. Wheeler, do you have any thoughts on what might
be done to give our low-powered TV industry a chance to
continue to exist?
Mr. Wheeler. Thank you, Mr. Barton. Yes, and that would
probably fall in three buckets. One, there has been a lot of
talk following the statute, and as you point out, the statute
says that LPTV translators are secondary surfaces and that is
what the statute says. Second is we have actually opened a
public notice on the delivery of the content of LPTV's. How do
we make sure that the content, and this ends up being more of a
digital technology question than anything else, and how do you
use digital technology to get the content out, because that is
the consumer protection issue here, to make sure the consumer
gets the content. And then the third point here is that there
may be a safeguard in the reality that rural areas don't have
that great a demand for spectrum for wireless services to begin
with, and so they may be operating in areas where there will be
less pressure to get spectrum, but we will find out as we go
through this process.
Mr. Barton. OK. Commissioner O'Rielly, you are the new kid
on the block, so to speak. You haven't had a chance publicly to
comment on this issue. Do you have any thoughts about low-
powered TV and what might be done to help them continue to
exist?
Mr. O'Rielly. Well, the Chairman is right in the sense that
you have the right to introduce legislation. Working for the
members on the Spectrum Act, there was a decision made by those
members to not protect low-power and translators, and you have
legislation. I would defer to your legislation to whether that
may resolve that. I know you and I had a chance to talk. I know
some of the low-power representatives have argued it may be
beneficial financially to the government for low-power
television stations to participate. I am not sure, and I don't
know if it is accurate, but we have heard that argument as
well, and it is probably something we have to explore.
Mr. Barton. OK.
That is my only question, Mr. Chairman. With that, I yield
back.
Mr. Latta. The gentleman yields back the balance of his
time.
The Chair now recognizes the gentleman from Utah for 5
minutes.
Mr. Matheson. Thank you, Mr. Chairman. I appreciate all the
Commissioners taking the time to be here today. I think this is
a very informative hearing.
First, Chairman Wheeler, in my city, Utah, we have over 750
active translators that relay signals to many rural communities
that rely on broadcast television to obtain their newscast,
their public service announcements, their entertainment. Now,
with the increased reliance on mobile data, there is no doubt
that we need to take steps to move forward with making more
spectrum available--I've heard concerns that the spectrum
repackaging that could result from the Incentive Auctions could
have a negative impact on those rural communities that tend to
be more dependent on broadcast television.
What steps is the FCC taking to protect these viewers from
possible negative impacts?
Mr. Wheeler. Well, Congressman, the first issue is how
threatened should they feel, and the fact that they are living
in rural areas where there is less of a demand for mobile
spectrum may end up being a de facto shield for them.
Mr. Matheson. All right.
Mr. Wheeler. Secondly is, as the statute says, this is a
secondary surface, it does not have protection. So the question
is how do you protect consumers, as you are suggesting, who
rely on it, and that is why we have had a public notice and are
seeking comments on the question of how do you get what the
translator or LPTV station does in terms of content out, and
how does new technology fit into that, such as digital use of
the airwaves or whatever the case may be. But this is clearly
an issue where we need to be focusing on what is the effect on
the consumer----
Mr. Matheson. Right.
Mr. Wheeler [continuing]. Rather than what is the effect on
the transmission media, because you have told us how we should
look at that transition media.
Mr. Matheson. Right. I appreciate that response. There has
been a lot of back-and-forth on how the Incentive Auction
should be structured, and I think most would agree it is
imperative we maximize participation, both in the Reverse
Auctions and the Forward Auctions, but, Chairman Wheeler, I was
wondering, what do you see is the best way for us to maximize
participation and also revenue for the federal government in
both of these auctions?
Mr. Wheeler. Before I took this job, I was in the business
of doing business deals----
Mr. Matheson. Yes.
Mr. Wheeler [continuing]. And I think that is what we are
talking about here.
Mr. Matheson. Right.
Mr. Wheeler. This is a business transaction that someone
who has a license needs to make a business decision about, and
how do you do that. Well, I--and what is our role. First of
all, we need to make sure that we are getting relevant
information on a timely basis into the hands of those parties
to make that decision, and that is why we have scheduled the
auction plan. We are saying in January, we are going to begin
laying out exactly what that kind of information needs to be.
Secondly, I think it is incumbent on us to have an outreach
program----
Mr. Matheson. Yes.
Mr. Wheeler [continuing]. In which we make sure that small
and large broadcasters understand how the program is going to
work, what the economics could be, and maybe even begin to
think in terms of what economic models might look like, because
at the end of the day, what we are really doing is we are
saying we want the marketplace to make a decision as to what is
the highest and best use of spectrum, and the marketplace can't
make that kind of decision until it is informed. So it is
incumbent upon us to make sure that that kind of information is
in a timely manner available to those, and to help them with
that process.
Mr. Matheson. Commissioner Rosenworcel, I have a question
for you about the ConnectED Program you mentioned briefly in
your opening testimony. You also mentioned that the current E-
Rate program had some bureaucratic inefficiencies built into it
right now. What can the Commission do to maximize efficiency to
get more bang for the buck, what can you do with your existing
authority, or what do you need for Congress to do to change it
to also increase those efficiencies?
Ms. Rosenworcel. Thank you very much for the question. I
think this program is really important, and reinvigorating it
is really important for education, infrastructure and the
economy. I think we can do more with this program just as it
is. As my colleague, Commissioner Pai, noted, we do subsidize a
whole bunch of old-fashioned services right now. We should
phase those out over time and focus instead on capacity and
band width. And like you mentioned, we need to reduce
bureaucracy. Bureaucracy gets in the way of small and often
rural schools from participating in this program. I would like
to see us encourage greater use of consortia to improve bulk
buying power, and also have multiyear applications to reduce
the administrative burden on schools that do participate.
Mr. Matheson. I appreciate that.
Mr. Chairman, I yield back.
Mr. Latta. The gentleman yields back.
And the Chair now recognizes for 5 minutes the gentleman
from Nebraska.
Mr. Terry. Thank you, Mr. Chairman. And let me begin with
by thanking former Acting Chair Clyburn, and during your tenure
as Acting Chair, you finished the low-power FM, and you guys
did a wonderful job on it, you really did, and I want to thank
all of you for that.
But Acting Chair--former Acting Chair, just now Member
Clyburn----
Ms. Clyburn. The Commissioner----
Mr. Terry. Commissioner, yes.
Ms. Clyburn [continuing]. Formerly known as.
Mr. Terry. Yes, that works, and you can have a sign for
your name now, but you were extremely communicative. I love the
way you reach out to us and, frankly, you are so extraordinary
that I think every Chairman, including the new one, should
model themselves after that. We don't--it is very rare that we
see that level of communication, so I just want to thank all of
you. This really is a great Board. You guys are really serious
about the real issues, and I like how you filter out the
politics that surrounds all of this. Keep it up.
I know that the quantile regression analysis has already
been discussed to some point, but I just want to let you know
that has been a long-time concern for me. I think some of the
concerns that we had that it could actually displace or retard
capital investment in rural America, when this is all about
getting cheap resources and capital into rural America because
of its high cost. And so it really needs to be reviewed, and,
Chairman Wheeler, I appreciate your comments on the record here
today is that you understand this problem. I will invite you
and all of the Commissioners out to rural Nebraska. You land in
my district, then we go there. But it really is becoming a
problem. There is one provider in Diller, Nebraska, that we
have used as the model for responsible rural telecom, because
there are businesses there that now have high speed, and they
are using it to monetize their businesses there, where they
truly are a worldwide business, not just the two blocks at
Diller, Nebraska. But there is a wind farm that they are having
trouble. The wind farm that wants to go there, that needs a
broadband hookup, and they are saying, with our cap, we don't
have the money. We aren't allowed to use that money in that
way. So it is having serious effects. It is just not that one
house that is 30 miles aback and, you know, line in and out, it
is really hurting rural economic development.
So I want to go ahead. And then in my 2 minutes left, I
want to ask the real question and to Chairman Wheeler, and
either of the Commissioners wish to step in, but I want to ask
about a rule that concerns the video market. Many of us are
concerned that the price of cable subscriptions, and I will
tell you that is an often and frequent call to my congressional
office. And the current market for video is seeing an expansion
in the scope of current law wasn't necessarily intended to
address. That is the FCC has defined buying group of MVPD's for
the purpose of program access rules in a way that excludes the
NCTC, essentially the only buying group out there. So are there
plans by the Commission to look into this, to maybe change it,
do you think that the NCTC should be excluded from this
process, Chairman Wheeler?
Mr. Wheeler. Thank you, Mr. Terry. I have just become aware
of the issues that have been raised about this, and want to get
all over it and would ask that we be able to get back to you,
but the answer is we are now aware and will be dealing with it.
Mr. Terry. Any of the Commissioners have concerns about the
NCTC being excluded from this rule? Hearing none, Mr. Pai, you
actually had an expression.
Mr. Pai. No good expression goes unpunished.
Mr. Terry. Yes.
Mr. Pai. I supported the notice that teed-up a lot of the
questions--and we teed-up a lot of different questions, as you
know, paragraphs 84 to 100 of that Order listed all the issues
under consideration--and I look forward to working with
Chairman Wheeler and my colleagues to ensure that the FCC takes
the appropriate action to ensure that buying groups or other--
--
Mr. Terry. Great.
Mr. Pai [continuing]. Entities are able to compete.
Mr. Terry. And others nodded.
Mr. O'Rielly. Right.
Mr. Terry. Mr. O'Rielly?
Mr. O'Rielly. I am sorry, I didn't express a facial----
Mr. Terry. Also known as the new guy.
Mr. O'Rielly. The new guy, yes. I would have to agree with
Chairman Wheeler. I don't have as much information on this, and
I look to get up-to-speed on it, so I apologize that I don't.
Mr. Terry. Yield back.
Mr. Latta. The gentleman yields back the balance of his
time.
And the Chair now recognizes the gentleman from New Mexico
for 5 minutes.
Mr. Lujan. Mr. Chairman, thank you very much. And, Chairman
Wheeler, welcome today. To all the Commissioners, welcome.
Again, as we are announcing former positions in post,
Commissioner Clyburn, I know that you are very welcome here
today. It is great to hear the recognition from my colleagues
with your leadership and your work, and I don't want to speak
for former Public Utility Commissioner Ray Baum either, but I
am going to invoke his name a bit. It is good to have another
fellow Utility Commissioner here and a leader. For those of you
that aren't aware, myself and Ray served at the same time on
Utility Commissions as Commissioner Clyburn. We had a chance to
do some great things together, and it is great to have you
again in that leadership capacity, Commissioner Clyburn.
Chairman Wheeler, I appreciate very much the conversation
about quantile regression analysis. I think you will see that
there are many rural members of Congress, or members that
represent rural parts of America, that are on this committee.
As we look at this encouraging investment in rural America, I
hope that, through all these deliberations and rulemaking, that
we don't lose sight of the fact that if we can make a mobile
call from an airline, that we should be able to make it
anywhere in rural America. And if technology is allowing for
that to occur, I don't want to hear that we are not able to
anymore. So thank you again for looking at this and making sure
that rural America will not be left out, Mr. Chairman.
With that being said, I would also encourage and was
encouraged by the fact that, in a recent report, there was some
conversation about the Tribal--and would encourage that that is
critically important as we roll out the re-evaluation of the
QRA. And lastly, I want to let you know that I am planning on
introducing a piece of legislation to include the elevation of
the National Tribal Recognition of ONAP as a permanent office,
and I would hope that we might be able to work with our
colleagues to elevate that--reports directly to the Chairman,
especially with the evolution of what we are seeing with the
extension of utilities across rural America, including tribal
lands.
Mr. Chairman, I am intrigued very much by the conversation
around the IP transition. I think Chairman Rogers, Chairman of
the Intelligence Committee, was asking about the importance of
security in networks, that we not lose sight of the fact of the
importance of protection of consumers and network security. As
we are looking forward into future technologies, sometimes
things that we have read about in fiction or we have seen in
television, there has been a lot of concern recently about
security of networks, about the infringement on individuals,
peering eyes, if you will, sometimes into consumer information,
and I am intrigued by your direction to move onward with real-
world experiments that will be coming forward. I would like
your thoughts on anything that you are aware of, or that the
FCC may be looking at with laser-based quantum encryption,
point-to-point work that is happening right now with our
national labs, it has been written about, I know it makes some
people nervous but it seems to me that as we are looking to
protect consumer information and intellectual property, that
the more advanced that we can make our networks with technology
that is currently available that we may take to the commercial
marketplaces, something that I would like to encourage and see
and just like to get your thoughts on that.
Mr. Wheeler. I just learned quantile regression analysis,
and now you want me to know laser-based quantum encryption.
Mr. Lujan. Yes, sir.
Mr. Wheeler. I look forward to learning a lot about that. I
don't mean to be light, but let me be specific on what I can
comment on. Our networks need to be secure, period. What I was
trying to say to Mr. Rogers is that the best way for attacking
that is through the multi-stakeholder process and moving with
dispatch, because the bad guys sure figure out a way to get
around things so we need to make sure that our responses are
flexible. We are working, obviously, with the President's
Executive Order and the various steps that he is taking, or the
Executive agencies are taking, in that regard. I happen to
believe that 2 challenges of the IP transition is going to be
the security of the networks and the privacy of the
information. If you go back to the comment that I was making, I
believe, to Mr. Waxman about the trials need to be about
measuring values, then we need to be addressing both of those
issues inside that trial, and I look forward to learning more
about how laser quantum can help that.
Mr. Lujan. I appreciate it, Chairman. And if I may, Mr.
Chairman, you know, it wasn't too long ago that when the same
idea was presented, that we may be able to move data over
lights and lasers----
Mr. Wheeler. Right, exactly.
Mr. Lujan [continuing]. There were a lot of discouraging
thoughts that were associated with that, but as we are moving
now away from copper as a new medium where even the ability to
move data on fiber can't keep up with our processing speeds. If
laser-based quantum encryption is good enough to keep national
security secrets preserved, I would certainly hope that we find
a way to extend these protections to consumers as well. And
again, with the real threats that are taking place with theft,
with intellectual property, right now we know that it works
point-to-point, but there are ways to make this work with--what
we have available. This is a serious area that I have tried to
take up with the Intelligence Committee. They were very
cautious with their conversations with me until I presented
with them with publications that have talked about this in open
source and an unclassified way. So I am hoping that we might be
able to look into this more, and have a serious attempt to
incorporate this into our day-to-day lives.
Thanks again, Mr. Chairman, for that latitude.
Mr. Latta. The gentleman yields back.
And the Chair now recognizes the gentleman from Colorado
for 5 minutes.
Mr. Gardner. Thank you, Mr. Chairman. And I want to commend
all the Commissioners for being here today, and congratulations
on your new role and your newly-retired-from role. Thank you
for your service. And, Commissioner Pai, I want to thank you
for your work on the quantile regression analysis, and the
comments that you made at the beginning of your testimony was--
the question of Chairman Walden, I guess, was something that I
have dealt with each and every day in a district bigger than
the State of South Carolina. I have a number of rural telecom,
rural utilities that continue to face the uncertainty as you
have mentioned about the QRA, and I appreciate it. And so,
Chairman Wheeler, thank you very much for your comments on that
as well, and I look forward to following up with you as those
conversations and decisions move forward.
I wanted to ask a quick question to Commissioner Pai about
the issue of ConnectED and the E-Rate Program. Who is
responsible for policing to make sure the E-Rate Program is
being used as it--as appropriately, making sure there is no
abuse of the program?
Mr. Pai. Congressman, thanks for the question. In theory,
the Universal Service Administrative Company, overseen by us,
monitors it, but in practice, given the limited resources that
USAC has and given the limited resources the FCC has to oversee
USAC, there is not a great deal of transparency and
accountability in the system.
Mr. Gardner. A question I had with that is twofold. Number
1, how do we ensure that there is no overlap of private sector
service with E-Rate funding and programs to make sure that we
are not adding to government competition of the private sector,
but number two, if USAC has identified a problem with an E-Rate
contract or recipient, is there a way to police or perhaps are
there bar--you know, disbarment issues that you can talk about,
because I know one of the issues in Colorado is that there has
been a company that is involved, and has been morphed into a
new company, that has had significant issues with E-Rate
violations and is now involved in another company in Colorado
that is providing services to schools.
Mr. Pai. Yes. USAC has taken actions such as the type you
have indicated, and as well the Department of Justice in
appropriate cases can take action where it suspects that
something fraudulent has occurred. And I am quite sure I speak
for my colleagues when I say that the FCC has no interest in
doing anything but enforcing the rules against people who abuse
the E-Rate system. With respect to the first part of your
question, I think it is critical as we think about reforming
the E-Rate Program, in addition to restructuring the basic
planks of it, that we ensure that at the end of day we don't
supply E-Rate funds to supplant or add to the problems of
competitors who have taken the risk and invested private
capital in deploying networks.
Mr. Gardner. And, Commissioner Rosenworcel, I know you
talked about this as well. I don't know if you have anything to
add.
Ms. Rosenworcel. You know, I would echo largely the
sentiment of my colleague. I--we wouldn't want government funds
to displace private sector funds. We want to be efficient with
the limited dollars we have, and make sure we reach as many
schools, at as high speed as possible, including in rural
Colorado. And with respect to oversight, we could always
benefit from more oversight. When we find bad actors in a
program, we have to take efforts to get them out.
Mr. Gardner. Great. Thank you. And Commissioner--or,
Chairman Wheeler, a question I have, and this may be something
that you need to get back to me on, are you familiar with a
report on next-generation 911 that is being put together by the
National Highway Traffic Safety Administration in connection
with a Blue Ribbon Panel that was convened by, let me get the
name here, the FCC's Communications Security Reliability and
Interoperability Council?
Mr. Wheeler. Right. That is CSRIC, yes.
Mr. Gardner. Yes, CSRIC. Are you familiar with a report
that is about to come out in January?
Mr. Wheeler. I am not familiar with a report that is about
to come out.
Mr. Gardner. There was the Blue Ribbon Panel that was put
together at----
Mr. Wheeler. Right, I know that, right. Yes.
Mr. Gardner. Right, CSRIC. Apparently, there is a Blue
Ribbon Panel--the report is coming out in January, and there
are some questionable findings in this report, and I would hope
that perhaps the FCC, because I believe some of the findings
are not in-line with FCC ideas at all. If you could take a look
at that report before it is issued and public to make sure that
when we issue a report that has the stamped seal of approval of
the federal government, that it is in-line with the FCC
directives, and believes that----
Mr. Wheeler. You can consider that done.
Mr. Gardner. Thank you very much. And a final question in
my time, regarding the IP transition issues, heading in a good
direction but--and there are significant strides being made to
transition to IP but, talking about rural America again, how do
we further encourage this transition in a way that ensures
consumers remain served in the long-run and particularly in
rural America?
Mr. Wheeler. I am sorry, that consumers would be served in
the long-run?
Mr. Gardner. In the long-run, particularly in rural
America.
Mr. Wheeler. Yes, it is going to be very important that we
have trials in rural areas to begin to answer those kind of
questions. I mean you can't go to New York City or some place
like this and run a trial and say that it applies in cities in
your district. That is going to be one of the criteria that we
are looking at.
Mr. Gardner. Thank you.
Yield back my time.
Mr. Walden. Thank you. The gentleman yields back.
And the Chair recognizes the gentleman from Missouri for 5
minutes.
Mr. Long. Thank you, Mr. Chairman. And, Chairman Wheeler, I
came to Congress with a 30-year background in the auction
business, so that was my profession for 30 years before I got
here, so I have a great interest, and any time that we try to
conduct an auction for anything, and it is certain to me about
this Reverse Auction thing, because I am not sure exactly how
that is supposed to work, but can you provide us with a
timeline of actions that need to occur before the Incentive
Auctions would begin?
Mr. Wheeler. Yes, sir. In next month's open meeting, we are
going to have a presentation that is going to lay out both the
timeline and the policy issues that need to be decided, and
some recommendations on those. Then in the spring, we are going
to be voting on a Report and Order that solicits offers to do
trials, sets up a measurement scheme for them, and begins to
address the kinds of policy issues that will be tangential to
all of that, and then we will go forth with trials.
Mr. Long. Can you also tell me what the FCC is doing to
ensure that the maximum amount of revenue will be generated
through these auctions, which was always a concern of mine as
an auctioneer?
Mr. Wheeler. Believe me, one of ours as well because we
have the responsibility not only to fund FirstNet and the
auction activities themselves, but also to contribute to pay
down the federal deficit. And I think the key to how you can
maximize revenue comes down to multiple things. One is, we have
got to be able to attract broadcasters. We have got to have
something, as I was saying previously, that are rules that are
understandable, are rules that we are actually being aggressive
and helping people understand the economic impact of them,
because there is, as you know, you are only going to bid to the
point that your spreadsheets say it is going to be making
sense. So that is the first thing, that we have to attract
broadcasters. We also have a challenge here in that we have to
be freeing up spectrum.
Mr. Long. Have to be what?
Mr. Wheeler. Freeing up spectrum.
Mr. Long. Which requires people to put spectrum----
Mr. Wheeler. Which--there is the----
Mr. Long [continuing]. End of the auction.
Mr. Wheeler. There is the key. So you have to provide the
appropriate incentive to get them to free up----
Mr. Long. And do you foresee that happening? From what I
have talked to, and people I have talked to, I don't know if
that is going to happen in as large a way as what we----
Mr. Wheeler. So the Congress told us to make it happen, and
we are going to do our damndest to deliver on those
instructions, and I believe that we will be able to fulfill the
challenge that we have been given. And in no way, shape or form
do I underestimate the magnitude of it. I have spent more time
on this issue in the last 39 days than any other issue. And I
know my colleagues all feel the same way on this. We understand
that we are biting off a huge chunk here.
Mr. Long. And there is an article where you were speaking
in Ohio, and to quote out of the article, ``the protection of
competition Mr. Wheeler said would apply to the coming auctions
of additional airwaves or spectrum for mobile broadband. In
April, the Justice Department told the FCC that it could help
to protect competition by ensuring that the two largest
companies, AT&T and Verizon, were not allowed to use their
financial might to buy up all the available spectrum being
auctioned, shutting out smaller carriers.'' So how do you
balance that? How do you decide I want to get the most money
for my product over here, but I want to limit my bidders over
here, how does that----
Mr. Wheeler. I also think that the more people that get to
the auction, presumably, the better result. And so we want to
make sure that we are creating an auction marketplace that will
attract as many people as possible, not just the giants. As a
former entrepreneur, we want to make sure that we have smaller
wireless companies, and that there are entrepreneurial
opportunities in here. That is one of the things that is most
interesting about what we recently put out for public notice,
the proposal from the Competitive Carriers Association, the
Rural Carriers Association and the NTCA, the Rural Wireline
Association, on talking about smaller economic areas so that
they could bid for a smaller piece of geography, rather than a
humungous piece, because four entrepreneurs, four smaller
carriers, they can target their activities, they can take
something that is a consumable bite, rather than be forced to
go out and not compete.
Mr. Long. But they also have to put together a patchwork
quilt of--to make their system work, correct, but they can buy
through the auction, they have to be able to----
Mr. Wheeler. So they can buy their areas, they can buy
other smaller areas, rather than having to buy and this is not
a decision, I just want to be clear, this is what we have put
out for comment, but it is certainly a very interesting idea--
--
Mr. Long. But if they made A, B and C, and they get A and B
but then they can't get C, then A and B weren't worth anything.
Mr. Wheeler. But that is kind of the history of the
wireless industry. We are about to conduct our 96th auction,
and I have been in them from the outset, and traditionally,
that kind of situation has occurred, and then an aftermarket
develops in which various players say, ``OK, how can I
reorganize for the most efficiency?''
Mr. Long. OK. I am beyond my time by quite a little bit, so
if I had any time, I would yield it back.
Mr. Walden. The gentleman's time has expired.
And the Chair now recognizes the gentlelady from North
Carolina for 5 minutes.
Mrs. Ellmers. Thank you, Mr. Chairman. And thank you to the
Commissioners for being here today.
Commissioner Clyburn, I am going to direct my questions to
you. I have an issue that has been raised from my sheriffs back
home in North Carolina. It has to do with one of the points
that you made in your opening testimony, and I will just read
from your opening statement. ``We adopted an Order to reform
inmate calling services to finally provide relief to millions
of families and 2.7 million children who have been paying
unreasonably-high rates to stay connected with incarcerated
loved ones.'' My sheriffs back home do have some concerns on
this issue, and they would like me to pose some questions to
you in regard to security measures that they will now be
putting in place. Certainly, they want to be able to provide
access and information and the ability to communicate with
family members, but they are concerned that this regulation is
saying that their ability to put forward call blocking through
the prison, is that an issue. Is that looked upon as something
that we want to veer away from?
Ms. Clyburn. So let me start again. Thank you, and it is a
pleasure meeting a Carolinian.
Mrs. Ellmers. Absolutely, yes.
Ms. Clyburn. Right. We might argue a bit about which----
Mrs. Ellmers. Yes.
Ms. Clyburn. Right.
Mrs. Ellmers. That is OK though. We are brothers, cousins,
sisters.
Ms. Clyburn. Absolutely.
Mrs. Ellmers. That is right.
Ms. Clyburn. So let me start with the latter in terms of
the call blocking concerns that some of the sheriffs and
persons who run jail facilities have mentioned. So as it
relates to that particular item, I want to assure you that
nothing within anything that we have delivered in this Order
prevents any type of security in--security needed type of a
blocking. So if it is a judge or a witness or something----
Mrs. Ellmers. Yes.
Ms. Clyburn [continuing]. You know, is potentially at
risk----
Mrs. Ellmers. Yes.
Ms. Clyburn [continuing]. Then yes, these providers can
block calls. The call blocking comes into play when there is
not a business relationship with--if someone is doing business
with somebody else, and then the supplier----
Mrs. Ellmers. Yes.
Ms. Clyburn [continuing]. Is blocking them, that is when we
have some disconnects with our rules, but when it comes to
security protocols, that is in place. So you mentioned what is
at the epicenter of our reasoning for reform----
Mrs. Ellmers. Yes.
Ms. Clyburn [continuing]. That family members, those who
represent those who are incarcerated, not everybody
incarcerated is guilty----
Mrs. Ellmers. Yes.
Ms. Clyburn [continuing]. And those who are trying to help
rehabilitate those inmates have complained to us for a number
of years, for well over 10 years, that the ability to
communicate was just financially outrageous, that it was an
unaffordable regime. So what we did, after 10 long years, was
act.
Mrs. Ellmers. Yes.
Ms. Clyburn. And we looked at, and reminded ourselves with
the Communications Act in terms of universal service principles
put forward----
Mrs. Ellmers. Yes.
Ms. Clyburn [continuing]. That is the providing of just and
reasonable rates for all. And so we put in a mechanism that
will provide that, and what we also did, not only providing a
means for just and reasonable rates for those families and
others who use the phone service, but providing the means for a
just and reasonable rate of return----
Mrs. Ellmers. Yes.
Ms. Clyburn [continuing]. For those carriers. At the same
time, built in those--that just and reasonable rate of return
for carriers----
Mrs. Ellmers. Yes.
Ms. Clyburn [continuing]. Is the amount of money needed to
provide state-of-the-art security protocols.
Mrs. Ellmers. Yes.
Ms. Clyburn. So nothing within the framework in terms of
what we put forth in terms of the Order and the further Order
that will deal with intrastate rates, will compromise security
protocols, but it will bring more certainty and more, I guess,
I would--again, just affordability for those----
Mrs. Ellmers. Yes.
Ms. Clyburn [continuing]. Who are making calls to the
incarcerated.
Mrs. Ellmers. There are also concerns about the cost
involved. Can you give some guidance in anticipation of the
costs that they will have to incur as a result of wanting to
make sure that everyone is protected?
Ms. Clyburn. Right.
Mrs. Ellmers [continuing]. And the security is there. Also
would you consider exempting local jails until they can come up
with a plan of action?
Ms. Clyburn. So one of the things that we have put forth in
this engagement is the capacity for any provider that is under
distress----
Mrs. Ellmers. Yes.
Ms. Clyburn [continuing]. They can apply for a waiver
process for a full waiver. And so that capacity is within
means, and so they do have the ability to do so, but one of the
things that I wanted to emphasize is when we came up with this
particular rate structure, we looked at a number of cost
studies----
Mrs. Ellmers. Yes.
Ms. Clyburn [continuing]. And cost models that included a
wide array of facilities, and came up actually with a cost
structure that was much higher than some of the petitioners
wanted us to----
Mrs. Ellmers. Yes. Yes.
Ms. Clyburn [continuing]. But we thought that we needed to
take into account facilities, large and small, in order to come
up with a rate structure that we think it strikes the right
balance.
Mrs. Ellmers. Well, thank you very much. And I look forward
to working with the Commission on this issue and the
subcommittee and my law enforcement back home, so thank you so
much. I look forward to that.
Ms. Clyburn. Thank you, ma'am.
Mrs. Ellmers. And I yield back the remainder of my time.
Mr. Latta [presiding]. The gentlelady yields back. And
seeing no other members to ask questions, I want to thank the
Commission for being with us today, and I know that Chairman
Walden does the same, and I also want to thank the Commission
for changing your time today for your meeting to be able to be
here, and I understand your meeting is at 2 o'clock, so we
appreciate you accommodating the committee to appear before us
today.
And seeing no further business to come before the
committee, the committee stands adjourned.
[Whereupon, at 12:30 p.m., the subcommittee was adjourned.]
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