[Senate Hearing 113-]
[From the U.S. Government Publishing Office]



 
  FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS FOR FISCAL 
                               YEAR 2014

                              ----------                              


                     WEDNESDAY, SEPTEMBER 11, 2013

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:30 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Tom Udall (chairman) presiding.
    Present: Senators Udall, Johanns, and Moran.

                   FEDERAL COMMUNICATIONS COMMISSION

STATEMENT OF HON. MIGNON CLYBURN, ACTING CHAIRWOMAN
ACCOMPANIED BY:
        HON. JESSICA ROSENWORCEL, COMMISSIONER
        HON. AJIT PAI, COMMISSIONER

                 OPENING STATEMENT OF SENATOR TOM UDALL

    Senator Udall. Good morning. I'm pleased to convene this 
hearing of the Appropriations Subcommittee on Financial 
Services and General Government. And I welcome my ranking 
member, Senator Mike Johanns, and other colleagues who may join 
us throughout this hearing today.
    I also want to welcome our witnesses, especially Mignon 
Clyburn, the acting chairwoman of the Federal Communications 
Commission (FCC).
    Chairwoman Clyburn, thank you for your service. I look 
forward to your testimony today.
    Also with us are Commissioners Jessica Rosenworcel and Ajit 
Pai. Both are dedicated public servants who previously served 
on the Senate Commerce and Judiciary Committees, and I look 
forward to their testimony, as well.
    Today, we are meeting on the anniversary of the tragic 
terrorist attacks of September 11, 2001, a day that is seared 
in our Nation's history as we are reminded that our Nation's 
communications networks do more than just keep us in touch with 
friends and family or entertain us with TV and music or 
facilitate commerce. In emergency situations, our 
communications networks save lives. Just as we will never 
forget the 9/11 attacks, we will never forget the heroic first 
responders who ran to the rescue. Lack of interoperable 
communications led to the further loss of life. Fixing this 
remains a key unfinished recommendation of the 9/11 Commission.
    As Commissioner Cochair Thomas Kean has said, ``When 
firemen can't talk to policemen, can't talk to rescue workers 
or medical personnel, people die.'' Congress, thus, gave the 
FCC a vital task, to ensure that communications services are 
available to all the people of the United States, helping make 
sure that calls to 9-1-1 can be made in emergencies, that 
pilots can communicate with control towers, and consumers can 
benefit from the latest wireless innovations.
    I look forward to hearing a report from you about the 
progress we're making to ensure that our first responders are 
able to communicate during an emergency.
    Last year, Congress enacted legislation that instructs the 
FCC to conduct spectrum auctions to make more spectrum 
available for mobile broadband use. Auction proceeds will also 
help fund the FirstNet public safety network and generate 
revenue for the U.S. Treasury.
    The FCC is also currently engaged in another important 
task: modernizing the more than $8 billion Universal Service 
Fund (USF) to meet our Nation's broadband challenge. The United 
States invented the Internet, but now we lag behind many 
countries when it comes to broadband access. This is especially 
so in rural parts of New Mexico, the West, and the Nation as a 
whole. The FCC conducts its work with about 1,735 full-time 
employees. That is the lowest number in decades. This 
subcommittee's fiscal year 2014 appropriations bill sets the 
FCC budget at $359.3 million, a modest increase from the fiscal 
year 2013 enacted level. FCC spending is fully offset by 
regulatory fees and proceeds from spectrum auctions. This 
subcommittee has an important responsibility, ensuring that the 
FCC uses those funds wisely on behalf of the American people.
    There are two basic questions: What are the resource needs 
of the FCC? And what are the consequences of the shortfalls?
    I have the honor of chairing this subcommittee with my 
ranking member, Senator Johanns, and I look forward to working 
with him on a bipartisan basis on these most important FCC 
issues.
    I now turn to Ranking Member Senator Johanns for any 
remarks he would like to make.

                   STATEMENT OF SENATOR MIKE JOHANNS

    Senator Johanns. Mr. Chairman, thank you. And, Mr. 
Chairman, thank you also for drawing our attention to the 
events of 9/11. I was speaking to a group of Nebraskans this 
morning, and I said, ``This is one of those events in our life 
where every single one of us, when asked about that morning, 
that fateful morning, we can describe exactly what we were 
doing when we heard about the planes flying into the towers and 
the chaos that erupted surrounding that and the other 
airplanes.'' So we must never forget. And so I appreciate you 
mentioning that.
    I also appreciate the fact that the chairman is holding 
this hearing with the current commissioners of the FCC. I was 
saying to the chairwoman, it is my hope that we'll fill out the 
full role of commissioners in the not too distant future.
    As I have said many times through the appropriations 
process, I believe addressing our Nation's debt is a 
fundamental responsibility, and a very necessary step for our 
future, and a necessary step for now, to get our economy back 
to full strength.
    We're nearing the end of the fiscal year. I want to 
reiterate my view that Congress and the President must act 
responsibly and adhere to the very bipartisan spending 
reductions that the President signed into law as a part of the 
2011 Budget Control Act.
    In addition, we need to clear the way for economic 
opportunity and international competitiveness. This 
subcommittee must take seriously our oversight role with 
respect to funding programs in performance of agencies within 
our jurisdiction. The FCC's policies and actions are extremely 
important to our country's economic growth, and therefore, this 
hearing is important. I am hopeful that it will give us an 
opportunity to discuss FCC resources and how the Commission 
proposes to do its job effectively.
    Critical to review of any resource request is a clear 
understanding of the agency's policies and plans, as well as 
results and performance. It's also important that we discuss 
issues related to regulatory predictability. So many times in 
my career, businesses have said to me, ``Just tell me the 
rules. We will figure out a way to live by those rules.'' Too 
many businesses sit on the sidelines, holding back their 
capital, their new jobs, because of the burden and uncertainty 
of Federal policies and regulations.
    In addition, because the FCC administers spectrum auctions, 
it also impacts our Nation's fiscal health. Preparations are 
underway to conduct the first-ever incentive auction of 
spectrum licenses, and the FCC needs to get it right. Like it 
or not, the Commission now has the responsibility to ensure 
that all of the upcoming auctions maximize the return for our 
shareholders, the taxpayers. And that return for taxpayers must 
include substantial deficit reduction.
    I am interested to hear how those auctions will be carried 
out and how spectrum will be leveraged in a way that is good 
for innovation and economic opportunity. It must also bring 
value to taxpayers and telecommunications customers while 
serving our Nation's first responders.
    I look forward to hearing the commissioners' views on 
whether the current FCC structure is the most effective to 
address the challenges of this century. This is the time to 
consider whether any redeployment or realignment of personnel 
or resources is appropriate. The FCC plays a role in ensuring 
that the United States continues to lead the world in digital 
innovation and communications infrastructure.
    I look forward to working with you, all of you, to address 
the challenges before us and to clear the way for continued 
U.S. leadership in communications.
    Thank you, Mr. Chairman.
    Senator Udall. Thank you.
    At this time, I would invite Chairwoman Clyburn to present 
testimony on behalf of the FCC, followed by Commissioner 
Rosenworcel and then Commissioner Pai.
    And we're very happy to be joined, also, by Senator Moran. 
Thank you.

                SUMMARY STATEMENT OF HON. MIGNON CLYBURN

    Ms. Clyburn. Thank you, and good morning.
    Chairman Udall, Ranking Member Johanns, and Senator Moran, 
I appreciate this opportunity to appear before you to discuss 
the FCC's 2014 budget request as well as our efforts to 
maximize our resources, efforts that are critical to ensuring 
that the telecommunications industry remains a vibrant and 
growing part of the U.S. economy.
    Of course, our communications networks are also vitally 
important to public safety. And on the occasion of 9/11, I 
think it's important to acknowledge and extend our appreciation 
to all those first responders, public servants, and 
servicemembers who sacrifice so much to make us safer, and to 
reinforce our support for those who lost so much.
    First, I wish to thank you for providing the Commission 
with full funding. All though we're small, our actions have 
wide-ranging impact on America's economic health and security. 
The Commission has accomplished a great deal since last year. 
We've continued our Universal Service reform efforts, enhancing 
fiscal responsibility while eliminating waste, fraud, and 
abuse. Our Lifeline reforms, alone, saved over $200 million in 
2012 and are on track to save $2 billion by the end of next 
year. We've continued to roll out additional spectrum to spur 
industry growth, even in previously unheard areas, like the 57 
to 64 gigahertz band, while encouraging innovative in 
unlicensed spectrum use wherever possible.
    Just yesterday, thanks to FCC-driven negotiations, wireless 
carriers announced a voluntary industry solution that will 
resolve the lack of interoperability in the lower 700 megahertz 
band and put that spectrum to better use. This agreement will 
make it easier for small wireless carriers to compete, spurring 
private investment, job creation, the development of innovative 
services, and other consumer benefits.
    We've ramped up our work to develop an innovative incentive 
auction process while holding our first-ever reverse auction 
for the mobility fund, and have begun working on the Tribal 
Mobility Fund auction.
    We reduced regulatory burdens in areas such as experimental 
licenses so that new technology can reach consumers faster. In 
the coming days, I will circulate a rural call completion order 
to ensure all rural Americans receive their phone calls.
    Last month, the Commission took decisive action to address 
the unreasonable rates that America's inmates and their 
families have been paying for telephone services. Throughout 
the summer, Commission employees have worked tirelessly to 
ensure that communications services are accessible to those 
with disabilities and that our Office of Native Affairs and 
Policies has the resources to enhance broadband service on 
tribal lands.
    Many of these accomplishments have given me great 
satisfaction as acting chair and are reminders that our actions 
can mean so much to so many.
    But we have more work to do. With the growing importance of 
communications technology to our economy and our global 
competitiveness, we should not compromise support for the 
Commission's work. Because we've been operating under a 
continuing resolution with sequestration for fiscal year 2013, 
we started well below our request of $346 million, at $322 
million. I would note that the FCC is completely fee-funded and 
that sequestered funds were derived from the monies paid by the 
industry. Due to sequestration, the Commission dramatically 
reduced spending, and spending reductions have come with a 
programmatic cost. We're foregoing life-cycle technology 
replacements instead of following General Services 
Administration (GSA) guidelines. We're cutting corners to 
preserve mission-critical objectives, leading to staffing 
shortages, cancellation and reduction of contracts, outdated 
and failing engineering equipment, and bare-bones travel that 
falls short of addressing core mission objectives. We're 
spending less on important programs, such as tribal 
consultations. We recently reached our lowest full-time 
equivalent (FTE) level in 30 years, and are not back-building 
important positions, let alone hiring new personnel to oversee 
mission-critical objectives, like universal service fund (USF) 
reform.
    The Commission continues to act responsibly to deal with 
cuts and shortages, including reprogramming. But with the full-
funding fiscal year 2014 level, the Commission would be better 
prepared to tackle the challenges ahead. Over the next year, 
the Commission has a daunting agenda, from fostering broadband 
deployment to moving ahead with the H-block and incentive 
auctions, all the while continuing USF reform and processing 
hundreds of thousands of applications and consumer complaints.
    In all of our actions, we will remain vigilant in promoting 
competition, protecting consumers, enhancing public safety, and 
making sure all Americans are connected to world-class 
communications networks. But, we must continue to attract and 
maintain a highly skilled workforce and give them the resources 
they need to do these critical jobs. With the funding level 
you've appropriated, I can confidently affirm that we will not 
only be headed in the right direction, but will have the tools 
to keep pace with the rapidly evolving industry that we are 
charged to oversee.

                           PREPARED STATEMENT

    Again, I wish to thank you for allowing me to appear before 
you this morning, and I look forward to answering any questions 
you may have.
    Senator Udall. Thank you very much.
    [The statement follows:]
               Prepared Statement of Hon. Mignon Clyburn
    Chairman Udall, Ranking Member Johanns, and members of the 
subcommittee, I am grateful for this opportunity to discuss the Federal 
Communications Commission's fiscal year 2014 budget request, as well as 
our efforts to maximize our resources to ensure that the communications 
market remains a vibrant and successful driver of the American economy.
    First, allow me to thank you for your decision to provide the 
Commission with full funding of the President's request for fiscal year 
2014. The $359,299,000 funding level in S. 1371 is essential to 
ensuring that we are able to continue to meet our congressionally 
directed responsibilities. Although the FCC is small compared to other 
agencies, our actions have a wide-ranging impact on our Nation's 
economic health and homeland security. The Commission and its 
predecessor agencies have safeguarded our spectrum and fine-tuned its 
use for over 100 years. We review and authorize the new wireless 
devices that are revolutionizing our economy, all while licensing 
hundreds of thousands of commercial and public safety spectrum users 
and searching for innovative methods to provide greater flexibility and 
shared uses of the airwaves.
    The FCC's spectrum auction process exemplifies our role in 
enhancing America's economic growth. Auctions not only freed up the 
airwaves and provided the spectrum that has created and sustained 
America's mobile revolution, but they have raised $51.9 billion since 
1994 for the United States Treasury. Future auctions--notably the H 
Block and the first-in-the-world ``incentive auction''--will provide 
much-needed spectrum to fuel industry growth and increase competition, 
while fostering essential nationwide interoperable safety 
communications and paying down America's deficit. As a result, American 
consumers will enjoy greater performance and choices in the wireless 
communications marketplace.
    These auctions also will fund tomorrow's public safety networks so 
that our first responders can communicate during emergencies. Today is 
the anniversary of the terrible September 11 attacks, which painfully 
highlighted the need for interoperable, functioning communications 
systems. FirstNet will be an important part of this equation but we 
must also focus on day-to-day communications services, including 
facilitating the Emergency Alert System, licensing new frequencies to 
our first responders, ensuring that no one is interfering with or 
jamming our communications networks, and making certain 9-1-1 systems 
are accessible in emergencies. Nowhere is the Commission's commitment 
to our Nation's well-being more evident than in our work to support 
homeland security. Over the last few years, the Commission has worked 
diligently on these efforts. For example, we teamed with the wireless 
industry and FEMA to bring emergency alerts to wireless consumers so 
that people in vulnerable areas will receive messages about potential 
serious events. The Commission responded to last year's Derecho storm 
with decisive action to ensure the reliability of calls to 9-1-1, and 
we will follow through on the rulemaking during my tenure.
    The Commission also oversees management of congressionally mandated 
Universal Service Fund programs so that all Americans have access to 
essential communications services, whether they live on Tribal lands in 
New Mexico, a farm in Delaware, or in subsidized housing in Nebraska. 
Since the Commission last testified before this subcommittee, we have 
continued moving forward with our efforts to enhance the effectiveness 
of our universal service programs, improving fiscal responsibility 
while eliminating waste, fraud and abuse. We also have listened to 
rural carriers and made modifications to our reforms to address many of 
their concerns. These important cost-saving steps and modifications 
involved numerous resource hours to initiate, and require additional 
staff to complete.
    In 2011, the Commission reformed USF to support a broadband-enabled 
communications infrastructure and for the first time put the ``high-
cost'' program on a budget. And just weeks ago, carriers requested 
funding under the new Connect America Fund which will leverage hundreds 
of millions of dollars in private investment to deploy broadband to up 
to 600,000 unserved homes and businesses in 44 States. We reformed the 
Lifeline Program, with cost savings on track to save $2 billion by the 
end of 2014. We reformed our Rural Health Care program to help connect 
thousands of healthcare providers in rural areas across the country to 
broadband. And this summer, we launched a proceeding to explore 
comprehensive modernization of E-Rate to ensure that schools and 
libraries have the bandwidth they need to use the latest digital 
learning tools.
    Recently, we have initiated new proceedings to provide additional 
spectrum to spur growth--even in previously unheard of areas like the 
57-64 GHz band. We have lessened regulatory burdens in areas such as 
experimental licenses so that new technology can reach consumers 
faster. Last month, the Commission took decisive action to address the 
unreasonable rates that America's inmates and their families have been 
paying for phone services. We also modernized and streamlined our data 
collection to reduce burdens while continuing the production of the 
National Broadband Map. Throughout the summer, Commission employees 
have worked long hours to make sure that communications services are 
accessible to individuals with disabilities. The staff also dedicated 
extensive efforts to ensuring that the Office of Native Affairs and 
Policy had the resources to continue to enhance broadband service on 
Tribal lands.
    Many of these matters have given me great satisfaction as Acting 
Chair and are reminders that our actions can mean so much to so many. 
But if America is to continue as a worldwide leader in communications 
and technology, we should not compromise the funding that supports the 
Commission's mission. Because we have been operating under a continuing 
resolution for fiscal year 2013, we started last year well below our 
request of $346,782,000. With sequestration, we lost 5 percent of that 
reduced continuing resolution number, or $17,096,193--leaving us with 
$322,000,000. So how exactly are these budget cuts impacting the FCC?
    The Commission has dramatically reduced spending, and these 
reductions do not come without programmatic costs. For instance, 
instead of following GSA guidelines for the replacement of our tracking 
vehicles--equipment essential to enforcement and homeland security--we 
are attempting to fund other programs, because we can keep the tracking 
vehicles running a little longer. Less funding has led to routine 
shortages in equipment and supplies, the cancellation and reduction of 
contracts, continued use of outdated and failing engineering equipment, 
and bare-bones travel that falls short of addressing core mission 
objectives. We also have less to spend on important programs such as 
Tribal consultations and reduced funds have even led to the early 
shutdown of the FCC Headquarters' air-conditioning system, adversely 
affecting those working late hours in the peak summer heat.
    But the Commission continues to act responsibly to deal with budget 
cuts and shortages, including reprogramming wherever we can find money 
while reducing services to create a funding pool. We currently have a 
reprogramming request before your subcommittee to replace our heating 
and air-conditioning system in our Columbia, Maryland, laboratory; to 
make repairs to the Enforcement Bureau facilities; and to fund upgrades 
to information technology systems essential to our legally mandated 
work. We are hoping that you will permit us to follow through on this 
reprogramming so that we can better deal with the impacts of 
sequestration.
    If we were to realize the full fiscal year 2014 funding level, 
however, the Commission would stabilize and reduce the damage to our 
budget under sequestration and initiate essential upgrades to our 
technology base--including required software changes to our equipment 
authorization programs and other licensing systems, overdue lifecycle 
replacements for Enforcement Bureau equipment, and ongoing equipment 
repairs for our Columbia, Maryland, laboratory. These funds also would 
provide enough resources to stabilize the Commission's workforce 
numbers during the next fiscal year.
    It is also important to note that our sequestered funds were not 
derived from direct appropriations, but raised from section 9 
regulatory fees paid by licensees--big and small--to ensure that their 
applications were processed, their new technology requests were 
reviewed, and consumer requests were resolved. Instead of building up 
the industry's foundation, serving the needs of consumers and funding 
dynamic new products and services, FCC licensees paid an extra $17 
million in funds that were deposited directly into the U.S. Treasury. 
Also, under section 8 of the Communications Act, the FCC raises 
approximately $25 million annually in application fees but does not see 
any of this money, as it goes directly to the Treasury. All of our 
actual application costs are paid from our appropriated number, or our 
licensing fees. So in a sense, the industry and consumers pay three 
times--once for application fees that are not used for that purpose, 
another to fund sequestration, and a third time to actually operate the 
Commission.
    And the Commission staff processes over 300,000 of these 
applications annually. They are the daily lifeblood of the 
communications sector--new equipment, new authorizations, repurposed 
spectrum--all are essential to the success of the industry. They 
include 78,000 public safety applications to ensure that first 
responders have the spectrum they need to conduct operations that save 
lives and property on a daily basis. That number also counts 167,072 
wireless applications--from your local HAM operators to aviation 
licensees, as well as maritime and of course, cellular licensees. 
Television, radio, TV translators, and other media services comprise 
24,435 of these applications, and while the International Bureau 
handles a smaller number at 1,542, those applications have important 
and overarching international impacts. Our Office of Engineering and 
Technology also handled 3,565 experimental licenses last year on an 
antiquated computer system, while processing 6,000 equipment 
authorizations yearly, not including the 16,000 authorizations from 
outside laboratories reviewed by FCC staff.
    Processing these applications is becoming more difficult as we face 
staffing shortages. The Commission maintains a highly skilled workforce 
of engineers, economists and attorneys, along with trained technical 
staff to carry out our core mission. But we have slowed backfilling 
positions, resulting in our lowest FTE levels in three decades, even as 
we are being asked to authorize more innovative products and oversee an 
increasingly complex and rapidly evolving communications marketplace. 
The inevitable results are slowdowns in application processing, which 
will impede progress and economic development and have a negative, 
cascading impact on all Commission operations--from spectrum 
development to auctions.
    The Commission's comprehensive modernization of Universal Service 
Fund programs is also affected by sequestration. While USF itself is 
exempt from sequestration, our staff-- the attorneys, technicians, 
engineers and economists who spend countless hours to manage our 
universal service programs--are not. This subcommittee has placed an 
emphasis on the Commission completing USF reform--and we intend to do 
so, but resource challenges put severe burdens on fewer staff.
    This subcommittee also directed the Commission to take decisive 
steps to alleviate rural call completion issues and report on remedial 
measures. Along with our Enforcement Bureau, these activities are being 
handled by the same bureau that is straining under the pressure of 
completing USF reform. Although I am committed to finding solutions to 
this issue, staff resources to complete the item are stretched too 
thin.
    Over the course of the next year, the Commission will be called 
upon to continue its efforts to roll out broadband to all Americans and 
develop new and innovative solutions to satisfy our Nation's insatiable 
demand for spectrum. We must complete work on our innovative incentive 
auctions program while simultaneously supporting the H Block Auction 
and a range of other auctions, big and small. We will use these 
mechanisms to raise funds for the interoperable public safety broadband 
network authorized by Congress. We also are expected to navigate and 
resolve complex cross-border issues. We will process hundreds of 
thousands of applications and consumer complaints and address issues 
that might not have been contemplated the year before in an environment 
that evolves at a break-neck speed.
    I know that our engineers are up to the task. I know that our 
lawyers are up to the task. I know that our economists and researchers 
are up to the task. I know that our administrative staff stands ready 
to support their efforts and that the Commissioners await the staff's 
input. But I want to ensure that they all have the tools and the 
resources necessary to get their respective jobs done. When I think of 
the effects of sequestration coupled with pay freezes, I worry that we 
might very well lose the next generation of topnotch engineers, 
economists, attorneys and support staff as the current generation 
retires. We will run the risk of not just shortchanging current 
employees, our industries and American consumers--we may be 
jeopardizing our collective national future. This would be bad for the 
Commission and potentially fatal for the vital sector that we oversee.
    I recognize that the sequestration problem must be resolved if we 
are to get the degree of funding we need to meet these goals. But if we 
were to receive the funding level that you have appropriated, not the 
reduced level set by sequestration, then I can confidently affirm that 
we are not only headed in the right direction but we will keep pace 
with the rapidly evolving industry that we are charged to oversee.
    Thank you for the opportunity to appear before you today and I look 
forward to answering your questions.

    Senator Udall. Thank you very much.
    Please proceed, Commissioner Rosenworcel.

                 STATEMENT OF HON. JESSICA ROSENWORCEL

    Ms. Rosenworcel. Good morning, Chairman Udall, Ranking 
Member Johanns, and Senator Moran. I'm honored to appear before 
you today.
    Let me start by noting what is important and obvious. Today 
is September 11. It is the anniversary of one of our darkest 
days. What happened 12 years ago changed us all. It left an 
indelible mark. In my family, that mark is personal, because 
one of my relatives died in the Twin Towers. But, it is also 
important to identify what has not changed, because, if 
anything, the events of that day only deepened our commitment 
to what connects us as individuals and as a Nation, because 
that is what makes us strong.
    Our communications networks make us strong. They strengthen 
our economy, they give rise to information age opportunity, and 
they support public safety. They are at their most powerful 
when their reach is universal. That means ensuring that 
everyone in this country, no matter who they are or where they 
live, has access to first-rate communications. That means urban 
America, rural America, and everything in between.
    Now, in the next fiscal year, the FCC will take steps to 
strengthen communications across the country. Let me highlight 
three:
    First, we will expand opportunity and enhance security 
through our upcoming spectrum auctions. The demand for our 
airwaves is growing at a breathtaking pace. We are now a Nation 
with more wireless phones than people. One in three adults now 
has a tablet computer. And all of these devices are using more 
of our airwaves than ever before.
    To meet this skyrocketing demand, the FCC will develop a 
series of spectrum auctions. At the direction of Congress, we 
will auction 65 megahertz of spectrum for new mobile broadband 
use, and we will also hold the world's first voluntary 
incentive auctions. These auctions are complex.
    But we must never forget one simple fact: Congress made 
clear that the revenues from these auctions will support the 
First Respond Network Authority, or FirstNet. FirstNet, in 
turn, will help develop the first nationwide interoperable 
wireless broadband network for public safety. This is 
important. Twelve years ago today, the lives of too many of our 
first responders, and those they sought to save, were put at 
risk by the absence of interoperable public safety 
communications. So we must remember, in our spectrum auctions, 
that we have promises to keep.
    Second, the FCC must take smart steps to foster the 
transition to next-generation networks. This is a time of 
extraordinary change. The number of traditional telephone lines 
is declining. The use of wireless is growing. And Internet 
protocol (IP) is remaking communications across the board. As 
we develop a new policy framework for IP networks, we must keep 
in mind the four enduring values that have always informed 
communications law: public safety, universal service, 
competition, and consumer protection. To kick-start this policy 
initiative, I believe we now need location-specific IP trials.
    Third, we must update our E-Rate program, which helps 
connect schools and libraries to the Internet. The E-Rate 
program was developed following the Telecommunications Act of 
1996. When the program began, only 14 percent of public schools 
were connected to the Internet. Today, that number is north of 
95 percent. That sounds impressive. But, the challenge is no 
longer connection; it is capacity, because too many of our E-
Rate schools, especially those in rural communities, are 
connected to the Internet at speeds of 3 megabits or less. As 
broadband speeds go, that is not fast enough for the most 
innovative teaching tools, that is not fast enough for high-
definition streaming video, and it is not fast enough to teach 
the next generation the STEM skills that are going to be so 
essential to compete.
    So I think it is time to do two things. We must increase 
the capacity of E-Rate connections, and we must decrease the 
bureaucracy of this program which can deter small and rural 
schools from even applying. If we do this, I think we can 
reboot and recharge the E-Rate program. We can call it E-Rate 
2.0.
    Finally, I want to speak directly to funding in the next 
fiscal year. Communications technologies, by some measures, 
account for one-sixth of the economy in the United States. The 
FCC not only oversees this dynamic sector, it delivers a high 
return on investment. Consider that, in nearly two decades, our 
spectrum auctions have raised over $50 billion for the United 
States Treasury. Moreover, the FCC is deficit-neutral because 
it is fully funded by regulatory fees. Furthermore, we are 
doing all we do with the lowest level of full-time employees in 
three decades.
    We can be proud of doing more with less. But if we are 
honest, there are consequences: reduced outreached, delayed 
decisionmaking, and fewer resources to address hard and 
persistent problems, like service on tribal lands.
    Consider, too, that the FCC now processes 16,000 equipment 
authorizations a year. Over the last decade, that number of 
applications has increased by 400 percent. Then think about how 
much more innovation and opportunity we could unleash if we 
update our labs, hire more engineers, and process those 
applications faster.

                           PREPARED STATEMENT

    Thank you. I look forward to answering any questions you 
might have.
    [The statement follows:]
             Prepared Statement of Hon. Jessica Rosenworcel
    Good morning, Chairman Udall, Ranking Member Johanns, and 
distinguished members of the subcommittee.
    I am honored to appear before you today as a Commissioner at the 
Federal Communications Commission. Prior to serving in this position, I 
had the great privilege of serving as counsel to the United States 
Senate Committee on Commerce, Science, and Transportation. So I know 
that oversight is essential and I am grateful for the opportunity to be 
here today.
    Let me start by noting what is important and obvious. Today is 
September 11. It is the anniversary of one of our darkest days. What 
happened 12 years ago changed us all. It left an indelible mark. In my 
family, that mark is personal--because one of my relatives died in the 
Twin Towers.
    But it is also important to identify what has not changed. We are 
resilient. We are optimistic. We are steadfast in our shared 
determination to move forward. And if anything, the events of that day 
only deepened our commitment to what connects us as individuals and as 
a Nation--because that is what makes us strong.
    Communications networks make us strong. They strengthen our 
economy, they give rise to information age opportunity, and they 
support public safety. They are at their most powerful when their reach 
is universal. That means ensuring that everyone in this country, no 
matter who they are or where they live, has access to first-rate 
communications. That means rural America, urban America, and everything 
in between.
    In the next fiscal year, the FCC will take several steps to 
strengthen communications across the country. I will highlight three.
    First, we will expand opportunity and enhance security through our 
upcoming spectrum auctions. The demand for our airwaves is growing at a 
breathtaking pace. We are now a Nation with more wireless phones than 
people. One in three adults now has a tablet computer. All of these 
devices are using more of our airwaves than ever before. But we are 
just getting started. Because worldwide, the demand for mobile 
broadband data is expected to grow by 13 times over the next 5 years.
    To meet this skyrocketing demand, the FCC will develop a series of 
spectrum auctions. At the direction of Congress in the Middle Class Tax 
Relief and Job Creation Act of 2012, we will auction 65 megahertz of 
spectrum for new mobile broadband use. The FCC also will hold the 
world's first voluntary incentive auctions to repurpose some airwaves 
in the 600 MHz band.
    These auctions are complex. But we must never forget one simple 
fact: Congress made clear that the revenues from these auctions will 
support the First Responder Network Authority, or FirstNet. FirstNet, 
in turn, will help develop the first nationwide, interoperable, 
wireless broadband network for public safety. This is important. Twelve 
years ago today, the lives of too many of our first responders--and 
those they sought to save--were put at risk by the absence of 
interoperable public safety communications. So we must remember in our 
spectrum auctions that we have promises to keep.
    Second, the FCC must take smart steps to foster the transition to 
next generation networks. This is a time of extraordinary change in 
communications networks. The number of traditional telephone lines is 
declining, the use of wireless is growing, and services dependent on 
Internet Protocol are remaking our communications across the board. As 
we develop a new policy framework for IP networks, we must keep in mind 
the four enduring values that have always informed communications law--
public safety, universal service, competition, and consumer protection. 
To kickstart this policy initiative--I believe we now need location-
specific IP trials.
    Third, we must update our E-Rate program, which helps connect 
schools and libraries to the Internet. The E-Rate program was developed 
following the Telecommunications Act of 1996. When the program began, 
only 14 percent of public schools were connected the Internet. Today 
that number is north of 95 percent. That sounds impressive. But the 
challenge is no longer connection--it is capacity. And by that measure, 
we have work to do.
    Too many of our E-Rate schools--especially those in rural 
communities--are connected to the Internet at speeds of 3 Megabits or 
less. As broadband speeds go, that is not fast enough for the most 
innovative teaching tools. It is not fast enough for high-definition 
streaming video. And it is not fast enough to teach the next generation 
science, technology, engineering, and math--or STEM--skills that will 
be so essential to compete. So I think it is time to do two things: we 
must increase the capacity of E-Rate connections and we must decrease 
the bureaucracy of this program, which can deter small and rural 
schools from even applying. If we do this, I think we can reboot, 
recharge, and reinvigorate the E-Rate program. Call it E-Rate 2.0.
    Finally, I want to speak directly to funding in the next fiscal 
year for the FCC. Communications technologies account for one-sixth of 
the economy in the United States. The FCC not only oversees this 
dynamic sector, it delivers a high return on investment. Consider that 
in nearly two decades, our spectrum auctions have raised over $50 
billion for the United States Treasury. Moreover, the FCC is deficit 
neutral because it is fully funded by regulatory fees. Furthermore, we 
are doing all we do with the lowest level of full-time employees in 
three decades.
    We are proud of doing more with less. But if we are prudent, we 
must also acknowledge that over time this has consequences: reduced 
outreach, delayed decisionmaking, and fewer resources to address hard 
and persistent problems--like service on Tribal Lands. Consider, too, 
that the FCC now processes 16,000 equipment authorizations a year. Over 
the last decade, the number of applications has increased by 400 
percent. Then think about how much more innovation and opportunity we 
could unleash if we update our labs, hire more engineers, and process 
these applications faster.
    Thank you. I look forward to answering any questions you may have.

    Senator Udall. Thank you very much for your testimony.
    Please proceed, Commissioner Pai.

                       STATEMENT OF HON. AJIT PAI

    Mr. Pai. Chairman Udall, Ranking Member Johanns, and 
Senator Moran, it is a privilege to appear before you today.
    This morning, I'd like to share with you my views on two of 
the many important issues that the FCC is confronting: Bringing 
up spectrum for commercial use and promoting infrastructure 
investments in rural America.
    Given the subcommittee's focus on appropriations, it's 
worth noting that the FCC is one of the few agencies that can 
generate a profit for the Federal Government. For example, 
between 2005 and 2008, the Commission's spectrum auctions 
raised over $33 billion that was used for deficit reduction. 
Since 2009, however, the Commission has raised only $72 million 
in auction revenue, or about two-tenths of 1 percent of the 
amount raised in the prior 4 years. This is unfortunate, of 
course, for the Treasury, but it's also unfortunate for 
American consumers, whose demands for bandwidth are increasing 
along with their use of tablets and smartphones.
    That's why, since joining the Commission last May, I've 
focused on increasing the amount of spectrum available for 
mobile broadband; in part, by rejuvenating the Commission's 
auction program. I'm pleased to report to you this morning that 
we recently have made real progress in that regard.
    For example, thanks to the leadership of Chairwoman 
Clyburn, the Commission will be ready to auction 10 megahertz 
of H-block spectrum for mobile broadband in January 2014. This 
auction would push badly needed spectrum into the commercial 
marketplace. It's projected to raise at least $1 billion, and 
possibly much more than that.
    Holding a successful H-block auction in January 2014 also 
will signal that the FCC still has both the capacity and the 
will to hold a major spectrum auction, something we have not 
done in 5\1/2\ years.
    Auctioning the H block is just one of the many directives 
and responsibilities that Congress gave us last year in the 
Spectrum Act. The Spectrum Act requires the Commission to 
increase the stock of spectrum to meet ever-increasing consumer 
demand. The proceeds of the resulting auctions will be used to 
establish a nationwide interoperable public safety broadband 
network, to reduce the deficit, and to hasten the deployment of 
next-generation 9-1-1 services. Since today is September 11, 
the first of those priorities deserves a special mention.
    As Chairman Udall observed earlier, 12 years after the 
terrorist attacks on our Nation, we still do not have a 
nationwide interoperable public safety broadband network, but 
that goal could be achieved if the FCC is able to raise the 
necessary funds for the First Responder Network Authority, as 
Congress directed.
    A successful broadcast incentive auction is critical to 
accomplishing this task. And for the incentive auction to 
succeed, we need to have a free and open auction, where market 
forces determine the outcome. The prices paid to broadcasters 
should be determined by the auction process, not by government 
fiat, and participation in the forward auction should be open 
to all. Otherwise, we may distort not only who may purchase 
spectrum, but also how much spectrum will be available to 
purchase in the first place. This would reduce net revenues and 
impede our best chance to satisfy the many funding priorities 
that Congress set out in the Spectrum Act.
    Turning to infrastructure investments, I'm concerned about 
the effects that the Commission's Quantile Regression Analysis, 
or QRA, is having on broadband deployment in rural America. The 
QRA benchmarks, which were adopted as part of the FCC's 2011 
Universal Service Fund reforms, apply only to rural carriers. 
They were meant to incentivize rate-of-return companies to 
operate more efficiently and to spend money more wisely. But 
according to the Obama administration's Department of 
Agriculture, the benchmarks have resulted in unpredictability 
and uncertainty, chilling investment and impeding broadband 
deployment, precisely the results that Ranking Member Johanns 
warned against in his statement. For these reasons, the 
Commission needs to think long and hard about how the QRA 
benchmarks are impacting rural America.
    In closing, even though we have not had a full complement 
of commissioners during the past few months, the FCC, 
nonetheless, has been quite active. Working together within the 
agency and with Congress, I'm confident that we will continue 
to discharge our responsibilities in a manner that serves the 
public interest well.

                           PREPARED STATEMENT

    Thank you once again for holding this important hearing, 
and I look forward to answering your questions.
    [The statement follows:]
                  Prepared Statement of Hon. Ajit Pai
    Chairman Udall, Ranking Member Johanns, and Senators Durbin, Coons, 
and Moran, it is a privilege to appear before you today. Thank you for 
inviting me to testify on the work of the Federal Communications 
Commission (FCC). We have been busy, and today I'd like to share with 
you my views on several important issues that we are confronting, 
namely: freeing up spectrum for commercial use, removing regulatory 
barriers to infrastructure investment, revamping the E-Rate program, 
and reforming the agency's processes.
    Spectrum.--Given this subcommittee's focus on appropriations, it is 
worth noting that the FCC is one of few agencies that can generate a 
profit for the Federal Government. By auctioning off spectrum, the 
Commission has raised tens of billions of dollars for the Treasury over 
the last two decades. Between 2005 and 2008, for example, the 
Commission's spectrum auctions raised over $33 billion that was used 
for deficit reduction, and the FCC's auctions program was a net 
contributor to the Treasury each year.
    Over the last 4\1/2\ years, however, the Commission's record on 
this front has been disappointing. Since January 2009, the Commission 
has raised a paltry $72 million in auction revenue, or about two-tenths 
of 1 percent of the amount raised in the prior 4 years. Indeed, when 
you account for the Commission's spending on auctions, our auctions 
program has actually lost money in each of the last 4 years. This is 
bad news not just for the Treasury but also for American consumers, 
whose demands for bandwidth increase as their use of tablets and 
smartphones proliferates.
    That is why, since joining the Commission last May, I have 
concentrated on trying to accelerate the allocation of spectrum for 
mobile broadband and rejuvenate the Commission's auction program. I am 
pleased to report that we recently have made real progress on both of 
these fronts.
    For example, thanks to the leadership of Chairwoman Clyburn, the 
Commission will be ready to auction 10 MHz of H-Block spectrum for 
mobile broadband in January 2014. This auction would push badly needed 
spectrum into the commercial marketplace. It is also projected to raise 
at least $1 billion--money that could be devoted to important national 
priorities (more on those shortly). Furthermore, a successful H-Block 
auction will signal to the marketplace that the FCC still has both the 
capacity and the will to hold major spectrum auctions.
    I recognize that some would prefer that the Commission delay the H-
Block auction, but I believe doing so would be a serious mistake. For 
one thing, this spectrum will be ready to be auctioned in just a few 
months; as the saying goes, a bird in the hand is worth two in the 
bush. For another, we should not run the risk of linking the auction of 
spectrum that is ready to be released into the commercial marketplace 
with other spectrum that poses much more difficult policy and technical 
challenges. In short, we cannot and should not go 6 years without a 
major spectrum auction. The time for action has arrived.
    Auctioning the H Block is just one of the many directives and 
responsibilities that Congress entrusted to us last year in the 
Spectrum Act. The act requires the Commission to bring additional 
spectrum into the commercial marketplace to address the imminent 
spectrum crunch. The proceeds of the resulting auctions will be used to 
establish a nationwide, interoperable public safety broadband network, 
to reduce the deficit, and to hasten the deployment of next-generation 
9-1-1 services. Since today is September 11, the first of those 
priorities merits special mention. Twelve years after the terrorist 
attacks against our Nation, we still do not have a nationwide, 
interoperable public safety broadband network. However, that goal could 
be achieved if the Commission is able to raise the necessary funds for 
the First Responder Network Authority, as Congress directed. As we 
implement the act, our top priority must be to adopt sound spectrum 
policies that allow us to meet our statutory duties.
    A successful broadcast incentive auction is critical to 
accomplishing this task. And for the incentive auction to succeed, I 
believe five principles must guide our work. First, we must be faithful 
to the statute. Second, we must respect the laws of physics as we 
design the band plan and the repacking algorithm. Third, we must be 
fair to all stakeholders. Fourth, we must keep our rules as simple as 
possible. And fifth, we need to complete this proceeding in a 
reasonable timeframe.
    If we hew to these principles, I remain optimistic that the 
incentive auction will prove a success. But there is much to be done. 
We must hammer out band plans that are technically feasible and 
correspond to the amount of spectrum we clear. We must determine how 
much market variation, if any, is appropriate. We must nail down how to 
optimally repack broadcasters who choose not to participate in the 
reverse auction. We must design an auction that maximizes net revenues 
and lets the market determine which bids will be accepted and how much 
spectrum will be cleared. We must continue efforts to coordinate with 
the Governments of Canada and Mexico. And we must continue to do 
aggressive and comprehensive outreach to all affected constituencies.
    Given all these tasks, I hope we can avoid unnecessary 
complications that may drag out our deliberations and delay the start 
of the auction. For example, some have suggested that we base the 
reserve prices offered to broadcasters on their enterprise values or on 
the populations they serve. Others have suggested that we restrict who 
may participate in the forward auction--in effect, set quotas that 
determine in advance who wins and who loses. But rules such as these 
will make an already complex process more complicated and will make the 
auction more likely to fail. We need to have a free and open auction 
where market forces determine the outcome. The prices paid to 
broadcasters should be determined by the auction process, not by 
Government fiat. And participation in the forward auction should be 
open to all. A contrary approach will distort not only who may purchase 
spectrum, but also how much spectrum will be available for auction. And 
such an approach will reduce net revenues and impede our best chance to 
satisfy the many funding priorities Congress set out in the Spectrum 
Act.
    Of course, the broadcast incentive auction and the H-Block auction 
aren't the only auctions the Commission has on its plate. The Spectrum 
Act requires us to reallocate and auction another 55 MHz of spectrum by 
February 2015, including the 25 MHz of spectrum adjacent to the so-
called AWS-1 band (2155-2180 MHz). To maximize the value of this 
spectrum--for consumers who want their devices to work around the 
world, for wireless providers and manufacturers who seek economies of 
scale, and for the Treasury, which could receive billions in revenue 
from this auction--we will need to pair it with the 1755-1780 MHz band 
now occupied by Federal incumbents.
    Unfortunately, Federal incumbents do not have much incentive to 
consolidate their spectrum holdings or use their spectrum more 
efficiently (without impairing their ability to carry out their 
missions). That's why Congress passed and amended the Commercial 
Spectrum Enhancement Act and established the notification-and-auction 
process for auctioning Federal spectrum. Once the FCC commences that 
process, Federal incumbents and the National Telecommunications and 
Information Administration have 18 months to put together plans to 
transition Federal spectrum into commercial hands. It's a process with 
little downside because if the auction does not raise more than 110 
percent of the estimated costs of transitioning, auction participants 
and Federal users are held harmless.
    I'm pleased to report that shortly after I proposed the use of this 
process in March, the Commission invoked it.\1\ As a result, we are 
slowly proceeding toward licensing and auctioning the 1755-1780 MHz 
band. As we do so, we should aim to clear and reallocate the band 
rather than forcing Federal users and commercial operators to undertake 
the complicated, untested task of spectrum sharing. It's not only the 
best policy. It's also the preference Congress codified in law.
---------------------------------------------------------------------------
    \1\ Statement of Ajit Pai, Commissioner, Federal Communications 
Commission, Hearing Before the Committee on Commerce, Science, and 
Transportation of the United States Senate, ``Oversight of the Federal 
Communications Commission at 2-3 (Mar. 12, 2013), http://go.usa.gov/
DWPG; Letter from the Honorable Julius Genachowski, Chairman, FCC, to 
the Honorable Lawrence E. Strickling, Assistant Secretary for 
Communications and Information, U.S. Department of Commerce (Mar. 20, 
2013), http://go.usa.gov/DWEC.
---------------------------------------------------------------------------
    Before moving on to another topic, I should note that licensed 
spectrum is not the only game in town. Unlicensed spectrum has been a 
boon to consumers and innovators alike. For instance, virtually 
everyone with a smartphone or laptop has benefited from WiFi, and 
myriad other applications like garage door openers and baby monitors 
rely on unlicensed spectrum as well. Accordingly, increasing the amount 
of spectrum available for unlicensed use has been an FCC priority. In 
February, the Commission teed up the expansion of unlicensed use by a 
full 195 MHz in the 5 GHz band.\2\ That's more than three times the 
amount of licensed spectrum we're hoping to recover from Federal users, 
and it's spectrum located adjacent to existing unlicensed allocations. 
That means fatter pipes--in the spectral sense--for next-generation 
technologies like the IEEE 802.11ac standard. This will allow higher-
speed, higher-capacity connections and will also reduce congestion in 
apartment buildings, schools, libraries, and offices. To keep the ball 
rolling on this project, we should tackle some of the less contentious 
issues this year--such as adding 25 MHz to the U-NII-3 band and 
creating a more unified set of rules for the 5 GHz spectrum--and aim to 
finish the rest by next July.
---------------------------------------------------------------------------
    \2\ Revision of Part 15 of the Commission's Rules to Permit 
Unlicensed National Information Infrastructure (U-NII) Devices in the 5 
GHz band, ET Docket No. 13-49, Notice of Proposed Rulemaking, 28 FCC 
Rcd 1769, 1825 (2013) (Statement of Commissioner Ajit Pai), available 
at http://go.usa.gov/DWm3.
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    Infrastructure Investment.--Turning to infrastructure investment, 
we have come a long way since the passage of the Telecommunications Act 
of 1996. Back then, copper was king, and consumer choice was minimal. 
Today, almost every segment of the communications industry is competing 
to offer newer, faster, and better broadband services. 
Telecommunications carriers are upgrading DSL with IP-based technology 
and fiber. Cable operators are deploying equipment based on the DOCSIS 
3.0 technical standard to increase bandwidth tenfold. Satellite 
providers are offering 12 megabit packages in parts of the country that 
never dreamed of such speeds. Communities are reforming their laws to 
attract gigabit deployments from new entrants and incumbents. And 
millions of Americans--many of whom don't subscribe to fixed broadband 
service at home--now have access to the Internet on the go using the 
mobile spectrum the Commission auctioned back in 2006 and 2008.
    What are the results of all this broadband competition? More 
choices for consumers and major challenges to old business models. 
Traditional voice telephony is a good example. In living memory, you 
only had one option: Ma Bell. But now you can select among a number of 
Voice over Internet Protocol (VoIP) providers, including cable 
operators. Or technology companies like Google, Skype, and Facebook. Or 
even video teleconferencing providers. Essentially, voice is becoming 
just another application riding over the Internet. It's no surprise, 
then, that today only one-third of U.S. households subscribe to plain 
old telephone service over the public-switched telephone network 
(PSTN), and that number is dropping each year.
    Underlying these changes is a technological revolution. Analog 
signals have gone digital. Circuit switching is giving way to packet 
switching. And first-generation cellular has been replaced with ultra-
fast LTE. The common thread knitting all of these changes together is 
the Internet Protocol (IP), a near-universal way to organize and 
transmit data.
    So what is the problem? The FCC's regulations still contemplate a 
world based on fading technologies. Instead of a converged marketplace 
in which companies from once-disparate niches compete against each 
other, the Commission too often sees silos of services and would-be 
monopolists (perhaps in part because many provisions of the 
Communications Act captured snapshots of the marketplace between 1934 
and 1996--snapshots often yellowed with age).
    Nine years ago, then-Chairman Michael Powell opened the IP-enabled 
services docket to try to resolve this regulatory anachronism and to 
clarify many ambiguities in the law.\3\ But many of the basic questions 
raised in that proceeding still remain, such as whether interconnected 
VoIP is an ``information service'' or a ``telecommunications service.'' 
And because of that regulatory uncertainty, companies may hold back 
billions of dollars in investment in IP-based technologies as they wait 
to see whether that investment will be welcomed or compromised by the 
Federal Government.
---------------------------------------------------------------------------
    \3\ IP-Enabled Services, WC Docket No. 04-36, Notice of Proposed 
Rulemaking, 19 FCC Rcd 4863 (2004), available at http://go.usa.gov/
DWmA.
---------------------------------------------------------------------------
    I believe that the Commission needs to take a hard look at its 
regulations in light of the IP transition, especially in light of the 
fact that the American people are ahead of Washington on this issue. 
Consumers are sending a clear message about the superiority of IP-
enabled networks. For instance, there were over 37 million VoIP 
subscriptions in 2011. The number of copper telephone lines has 
decreased dramatically in just the past 10 years. Government should 
heed the market's message and give the private sector the flexibility 
to make investment decisions based on consumer demand, not outdated 
regulatory mandates.
    I hope my colleagues will work with me to establish a modern 
regulatory framework for the IP transition based on a few simple 
principles.\4\ First, we must ensure that vital consumer protections 
remain in place. When consumers dial 9-1-1, they need to reach 
emergency personnel; it shouldn't matter whether they are using the 
PSTN, a VoIP application, or a wireless phone. The same goes for 
consumer privacy protections and antifraud measures like our slamming 
rules. Second, we must not import the broken, burdensome economic 
regulations of the PSTN into an all-IP world. No tariffs. No arcane 
cost studies. And no hidden subsidies that distort competition to 
benefit companies, not consumers. Third, we must retain the ability to 
combat discrete market failures and protect consumers from 
anticompetitive harm. Fourth, we must respect the metes and bounds of 
the Communications Act and not overstep our authority.
---------------------------------------------------------------------------
    \4\ Remarks of FCC Commissioner Ajit Pai, ``Two Paths to the 
Internet Protocol Transition,'' Hudson Institute, Washington, DC (Mar. 
7, 2013), http://go.usa.gov/DWmJ.
---------------------------------------------------------------------------
    The right way to start building that framework is to start ironing 
out the technical aspects of the transition immediately. And the best 
way to do that is with a real trial, an All-IP Pilot Program. An All-IP 
Pilot Program would allow companies to choose a discrete set of wire 
centers where they could turn off their old time-division-multiplexed 
electronics and migrate customers to a newer, all-IP platform. Moving 
forward with such a program would signal to carriers that we won't 
force them to invest in old networks forever. And doing so would allow 
us to move closer to the day when carriers will be able to focus 
exclusively on investing in the networks of the future rather than 
maintaining the networks of the past.
    Just as we must eliminate old regulatory barriers to infrastructure 
investment, we must also be careful not to establish new ones. A good 
example is the Commission's implementation of the quantile regression 
analysis (QRA) benchmarks from the November 2011 Universal Service 
Transformation Order.\5\ The QRA benchmarks apply only to rural 
carriers and are supposed to create ``structural incentives for rate-
of-return companies to operate more efficiently and make prudent 
expenditures.'' \6\ But reality has not caught up with theory. Instead, 
the QRA benchmarks have resulted in unpredictability and uncertainty, 
chilling the investment climate and impeding the deployment of next-
generation technologies and broadband services to rural Americans. As 
the Obama Administration's Department of Agriculture told the 
Commission in February, ``demand for [Rural Utility Service] loan funds 
dropped to roughly 37 percent of the total amount of loan funds 
appropriated by Congress in [fiscal year] 2012.'' \7\
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    \5\ Connect America Fund; High-Cost Universal Service Support, WC 
Docket Nos. 10-90, 05-337, Sixth Order on Reconsideration and 
Memorandum Opinion and Order, 28 FCC Rcd 2572, 2600 (2013) (Sixth Recon 
Order) (Statement of Commissioner Ajit Pai, Approving in Part and 
Concurring in Part), available at http://go.usa.gov/DWVj.
    \6\ Connect America Fund et al., WC Docket No. 10-90 et al., Report 
and Order and Further Notice of Proposed Rulemaking, 26 FCC Rcd 17663, 
17742, para. 210 (2011), available at http://go.usa.gov/DWv9.
    \7\ Letter from John Charles Padalino, Acting Administrator, Rural 
Utility Service, to Marlene H. Dortch, Secretary, FCC, WC Docket Nos. 
10-90, 07-135, 05-337, GN Docket No. 09-51, CC Docket Nos. 01-92, 96-
45, WT Docket No. 10-208, at 2 (Feb. 15, 2013), available at http://
go.usa.gov/DWyw.
---------------------------------------------------------------------------
    Here's one problem with the QRA benchmarks: Rural carriers must 
carefully plan their infrastructure over a 5-, 10-, or 20-year 
timeframe if they are to recover their costs. Congress recognized this 
by embedding within section 254 of the Communications Act the command 
that universal service support be ``predictable.'' But the QRA 
benchmarks change annually, with no necessary connection between the 
benchmarks from one year to the next.
    To be sure, the Commission gave rural carriers some relief back in 
February when we decided that carriers should be able to balance their 
capital investments against their operating expenses (rather than 
analyzing each--and possibly penalizing carriers for either--
separately).\8\ And the Wireline Competition Bureau recently recognized 
that implementing a whole new regression model in 2014 would be 
infeasible given our slow progress in collecting accurate maps of each 
carrier's study area.\9\
---------------------------------------------------------------------------
    \8\ Sixth Recon Order, 28 FCC Rcd at 2583, para. 29, available at 
http://go.usa.gov/DWV5.
    \9\ Connect America Fund; High-Cost Universal Service Support, WC 
Docket Nos. 10-90, 05-337, Order, DA 13-1656 (July 26, 2013), available 
at http://go.usa.gov/DWVV.
---------------------------------------------------------------------------
    But I still have my doubts about the utility of the QRA benchmarks 
as implemented. It is important to remember that they do not save money 
for the Universal Service Fund, but merely redistribute support from 
one set of carriers to another. The 2014 benchmarks are likely to 
impact significantly more carriers than the 2013 benchmarks, all of 
which are based on flawed data and inaccurate maps. And rural carriers 
still cannot know whether they will be able to recover investments made 
today since the relevant benchmarks for those investments won't be 
known until 2015. In short, the Commission needs to think long and hard 
about the QRA benchmarks.
    E-Rate.--Speaking of the Universal Service Fund, I was pleased that 
we launched a proceeding to reform and revamp the Schools and Libraries 
program, better known as E-Rate, this summer.\10\ Established at the 
direction of Congress 16 years ago, the E-Rate program is intended to 
bring advanced services to schools and libraries across America. And in 
many ways, the program has been a success. Internet access in public 
schools has almost tripled, and speeds have grown alongside 
availability. Indeed, a 2010 FCC survey showed that 22 percent of 
respondents were ``completely'' satisfied and another 58 percent were 
``mostly'' satisfied with the bandwidth they're getting.
---------------------------------------------------------------------------
    \10\ Modernizing the E-Rate Program for Schools and Libraries, WC 
Docket No. 13-184, Notice of Proposed Rulemaking, FCC 13-100 (July 19, 
2013) (Modernizing E-Rate NPRM), available at http://go.usa.gov/DWVH.
---------------------------------------------------------------------------
    But like all Federal programs, E-Rate has had its share of 
difficulties. For applicants, the funding process from start to finish 
can stretch for years. Additionally, the process too often requires the 
assistance of specialized E-Rate consultants to navigate arcane steps 
like Form 470 competitive bidding, Form 471 Program Integrity Assurance 
review, and the Form 500 commitment adjustment process. For parents, 
the process is so opaque that they cannot know ahead of time how much 
funding their school might receive and cannot track whether it is 
actually spent on enriching the education of their kids. For school 
boards, the priority system (under which things like paging and 
Blackberry services for administrators get prioritized over connecting 
a classroom to the Internet) distorts their spending decisions since 
some services are discounted by up to 90 percent while others may or 
may not receive any discount in a given funding year. And for everyone 
with a phone line, and who hence contributes to the program, it's hard 
to tell what bang we're getting for our universal service buck--
although we do know that an average of $600 million is spent each year 
on basic telephone service and other last-generation technologies.
    There is a better way--one which would focus the E-Rate program on 
children. To create a student-centered E-Rate program, we need to 
fundamentally rethink how we structure the program. That means starting 
each school with an upfront, per-student allocation of funding so they 
know how much they can spend. That means cutting the redtape so that 
the initial application is just one page and there's only one other 
form needed before funds are disbursed. That means targeting funding at 
next-generation technologies like broadband and WiFi while still 
letting local schools set their own priorities. And that means 
publishing all funding and spending decisions on an easily accessible, 
central website so that every parent, every journalist, every 
government watchdog, every American can see just how E-Rate funds are 
being spent.
    The student-centered E-Rate program I have outlined \11\ would 
fulfill E-Rate's statutory mission of bringing advanced services to 
schools and libraries across the country. It would free an extra $1 
billion for next-generation services in its first year, all without 
collecting an extra dime from the American people. And it would reduce 
waste, fraud, and abuse in the program and increase transparency and 
accountability.
---------------------------------------------------------------------------
    \11\ Remarks of Commissioner Ajit Pai, ``Connecting the American 
Classroom: A Student-Centered E-Rate Program,'' American Enterprise 
Institute, Washington, DC (July 16, 2013), http://go.usa.gov/DWvm; 
Modernizing E-Rate NPRM, FCC 13-100 (Statement of Commissioner Ajit 
Pai), available at http://go.usa.gov/DWvA.
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    Process Reform.--Finally, just as we need to reform the E-Rate 
process, we also need to reexamine our own administrative 
processes.\12\ The FCC must strive to be as nimble as the industry we 
oversee. For all too often, proceedings at the Commission needlessly 
drag on for years, with predictable consequences. For example, an 
unanswered consumer complaint might mean that consumers are subject to 
telemarketing calls during dinner. An unadjudicated waiver deters a 
rural carrier from deploying broadband to its unserved customers. And 
an unfinished rulemaking leaves capital on the sidelines as companies 
weigh the regulatory risk of moving ahead.
---------------------------------------------------------------------------
    \12\ Remarks of Commissioner Ajit Pai before the Federal 
Communications Bar Association (Feb. 21, 2013), http://go.usa.gov/DWvJ.
---------------------------------------------------------------------------
    Fortunately, we have made some progress on this front. 
Commissioners are voting on items more quickly after they are placed on 
circulation. The time between adoption and release of items has 
decreased. And we have reduced the FCC's backlog. My colleagues, aided 
by the hardworking Commission staff, deserve much credit for these 
improvements. But we still have much to do.
    To start, we should become more accountable to the public and to 
Congress about how long it takes the Commission to do its work. We need 
to establish more internal deadlines, such as a 6-month deadline for 
acting on waivers and a 9-month deadline for ruling on applications for 
review and petitions for reconsideration. We should also codify our 
informal 180-day shot clock for reviewing transactions--a deadline we 
too often honor in the breach. We should handle applications for review 
akin to the way the U.S. Supreme Court handles its certiorari process; 
this would help the FCC dispose of pleadings more efficiently. 
Additionally, we should report to Congress and the public about how we 
are doing in meeting those deadlines. I support the concept of creating 
an FCC Dashboard on our website that would collect key performance 
metrics about these deadlines--as well as our processing of consumer 
complaints--so that anyone can see just how well we're doing. This 
measure would bring some much-needed transparency to the agency.
    With greater accountability, I'm confident we would act with more 
dispatch. My emphasis on acting promptly is not just about good 
government. It is also about the impact the FCC's decisions (or lack 
thereof) have on our economy. The pace of change in the communications 
industry will only continue to accelerate. So too must the pace at the 
Commission. We can't let regulatory inertia frustrate technological 
progress or deter innovation.
    As for existing deadlines, I am happy to report that we are doing 
better in meeting our statutory reporting requirements. This year, for 
the first time since 2006, the Commission adopted its annual video 
competition report 1 year after adopting the previous such report 
thanks to Chairwoman Clyburn and the staff of the Media Bureau. But we 
have many statutory reporting deadlines each year, and these reporting 
requirements mean we spend a substantial amount of time each year 
reviewing and writing about individual silos of the communications 
marketplace rather than reforming our regulation of it. Just this week, 
the U.S. House of Representatives unanimously passed legislation that 
would cure this problem. The FCC Consolidated Reporting Act \13\ would 
replace our disparate reporting obligations with a single biennial 
Communications Marketplace Report. This would make better use of 
limited Commission resources and would be more valuable to Congress as 
it undertakes its legislative responsibilities. I would draw your 
attention to that bipartisan legislation, and I stand ready to work 
with you in the hope that it will soon be signed into law.
---------------------------------------------------------------------------
    \13\ H.R. 2844 (1st Sess. 2013), available at http://go.usa.gov/
DWwY.
---------------------------------------------------------------------------
    As you can see, even though we have not had a full complement of 
Commissioners during the past few months, the FCC nonetheless has been 
quite active. Through collaboration and collegiality, we have been able 
to accomplish a lot. For example, in addition to the issues discussed 
above, we have approved a second round of Connect America Phase I 
funding to expand broadband deployment in rural America, reformed the 
Video Relay Service program for people with disabilities to enhance 
competition and promote fiscal responsibility, and approved 
transactions that strengthened our nation's third largest wireless 
carrier.
    Working together within the agency and with Congress, I'm confident 
that we will continue to discharge our responsibilities in a way that 
will serve the public interest well. I thank you again for holding this 
important hearing and for allowing me the opportunity to testify. I 
look forward to answering your questions.

    Senator Udall. Thank you very much.
    And we'll now proceed with 7-minute rounds on questioning. 
I'll start out.
    Chairwoman Clyburn, you know, I'm appalled that some 
constituents living in rural parts of New Mexico are having 
problems with telephone call completion failures, so I thank 
you for announcing you will take action. I just wanted to give 
you an example of why this is important, and it may be an 
example you can use later to make the point.
    A rural resident of New Mexico who has a heart 
defibrillator missed a call from his doctor in an emergency. 
When his heart stopped beating, a Life Alert device notified 
the doctor, but when his doctor tried to phone him, the call 
did not go through. Thankfully, this situation did not become a 
tragedy, but it highlights why FCC action is needed. Frankly, 
action cannot come too soon. So again, I want to thank you for 
your announcement today, and we look forward to following what 
you're doing on that front.
    Chairwoman, your testimony notes that this subcommittee 
approved a fiscal year 2014 appropriation of $359 million in 
discretionary funding for the FCC. This sum is fully offset by 
regulatory fee collections and auction revenue. But the House 
appropriations level for the FCC is $320 million. How would the 
budget reduction included in the House Financial Services bill 
impact the FCC's ability to carry out its mission?

                           FCC APPROPRIATIONS

    Ms. Clyburn. It will mean further reductions and strain as 
it relates to personnel, hampering the gains that we have made 
over the last several years. We have done incredible things 
over the last 6 months, in terms of clearing applications and 
the like. That will be slowed. We have reduced, painfully, our 
FTEs by over 40 and the number of awards that we are able to 
give, you know, our fine personnel. We've had reductions and 
modifications of contracts that are approaching $4 million, 
reduced rent and utilities. The air-conditioning system goes 
off at 6 o'clock, and it's very painful at 6:01.
    There has been reduced travel and equipment. Vehicles are 
not being replaced according to Government Accountability 
Office (GAO) standards. Our Enforcement Bureau, our Public 
Safety Bureau, our Office of Engineering and Technology, their 
technical equipment is just not up to par.
    And at our Columbia, Maryland, location, where a lot of the 
innovation is supported, a lot of the certification is made, 
the air-conditioning equipment, which had a 15-year life, was 
installed in 1988.
    So those are some of the things that cannot be done or will 
be adversely affected by the budget that the House has 
proposed.
    Senator Udall. Thank you very much, Chairwoman Clyburn.
    And on the issue of spectrum auctions, last year Congress 
passed legislation that dedicates radio spectrum for a new 
FirstNet public safety network. This will be a state-of-the-art 
nationwide interoperable broadband network to help first 
responders save lives. FCC will manage voluntary incentive 
auctions to repurpose some TV-band spectrum for mobile 
broadband use. Up to $7 billion in revenue from such spectrum 
auctions will help fund the FirstNet public safety network.
    How does the timing and structure of upcoming spectrum 
auctions impact the buildout of the FirstNet network?

                           SPECTRUM AUCTIONS

    Ms. Clyburn. Definitely a motivator for us to do things 
both quickly and effectively. As you have heard, we are poised 
to auction the H block, which will act as a down payment toward 
FirstStep--FirstNet. We are on track to fund the public safety 
network, as you mentioned, through the incentive auction 
process. We are moving at all deliberate speed to get that up 
and running with real poise. And I have instructed staff to 
work towards an order by the end of the year; and next year, to 
have an auction.

                                FIRSTNET

    So we are also working with FirstNet. We created an 
advisory board for them and are facilitating, of course, 
through these efforts, the transition of spectrum to the 
authority. So we're working collaboratively with the National 
Telecommunications and Information Agency (NTIA) in order to 
make sure that the infrastructure support is there from the FCC 
to move in an expeditious manner.
    Senator Udall. Ok. Chairwoman, is it also accurate to say 
that the Department of Commerce's National Telecommunications 
and Information Administration, the NTIA, has borrowing 
authority, if needed, to help fund the FirstNet public safety 
network?
    Ms. Clyburn. It does have borrowing authority, and it can 
move ahead prior to the auction.
    Senator Udall. Great.
    Commissioner Rosenworcel, broadband is a key infrastructure 
challenge for our time, but the Nation that invented the 
Internet now ranks behind other countries when it comes to 
high-speed Internet access. On top of that, some parts of the 
United States are even further behind. And according to the 
FCC's 2012 Broadband Progress Report, nearly one-half of the 
population in rural areas of New Mexico lack fixed broadband 
access. So we're paying very close attention to the reforms to 
the Universal Service Fund. It's vital that these reforms 
succeed.
    Could you share your view on how well the reform process is 
working for tackling the digital divide and what opportunities 
exist to help overcome current barriers to broadband access and 
adoption?

                            BROADBAND ACCESS

    Ms. Rosenworcel. Broadband is absolutely the essential 
infrastructure of this day and age. It is part and parcel with 
both our commercial and our civic life. All of our data reflect 
that we have some areas in this country where broadband is 
proceeding apace, and many areas where we can be proud. Eighty 
percent of this country, for instance, has available to it 
broadband at speeds of 100 megabits or more. But the challenge, 
as you just described, comes in our rural areas. Our topography 
presents hard cases, particularly out in the mountainous West.

                        UNIVERSAL SERVICE REFORM

    Before I arrived at the agency, my colleagues worked on a 
major Universal Service reform project. The good thing about 
that is, they took the Universal Service system and they 
refocused it from last century's infrastructure challenge, 
which was voice telephony, and they refocused it on broadband 
and wireless challenges that are so important for 
communications today.
    We have made some progress, but I will also acknowledge 
that the reforms we put in place are complicated, and I do 
worry that the absence of simplicity in those reforms might be 
an impediment for further deployment in some of our rural 
areas. So over time, I hope, with my colleagues, we can 
identify ways we can adjust that, if we can do it in a manner 
that's fiscally sound, good for rural deployment, and good for 
rural consumers.
    Senator Udall. Great. Thank you very much for that answer.
    And I had--you can see, right here, New Mexico is 49th 
among States for Internet access; 34 percent of individuals 
lack Internet access. I was looking at a chart, here, and both 
Kansas and Nebraska are doing better than we are, in terms of 
Internet access. I think you're up at about 80 percent. And 
Nebraska's up just below that. So you're doing well.
    And I would----
    Senator Moran. Just so we're doing better than Nebraska.
    Senator Johanns, please proceed.
    Senator Johanns. Well, thank you.
    The chairman makes some very valid points about broadband 
access. And I would offer, maybe, an addition to these 
comments, if I could, before I get to my questions, and that is 
that, fundamentally, I see the solution to this as being driven 
by the private sector. And I worry that sometimes, in our zeal 
to solve these problems at the governmental level, we almost 
interfere with the result.
    You know, I'll share a story with you. Years ago, my wife 
wanted to do something very nice on my birthday, and she said, 
``I need your car for a day.'' She took my car and had a mobile 
phone installed in the car. They literally needed the car for a 
day to make the installation, at that point in time.
    Well, I got home that day, I've got a phone in my car. I 
thought that was the coolest thing ever. So I got on that 
phone, and I called my office, and I called my sister, and I 
called my brother, and I called my parents. I called everybody 
I could think of and told them that I was talking to them on a 
phone in my car. And then I got the bill for the first month's 
service.
    And I nearly had to sell the car to pay the bill.
    Now, today, I carry this device. It's nearly state of the 
art; it's not quite, especially over the events of the last 
couple of days. I didn't pay very much for this, because they 
entice you to come in and buy it. I can send an e-mail to 
anybody in the world. I can have a telephone conversation with 
anybody in the world, on this device. I get my monthly bill, I 
don't pay very much, because there's all kinds of plans that 
you can buy into.
    It's remarkable what's happened in my lifetime. And I 
promise you that that has been driven by the private sector, 
because the economics of doing this made sense to them, and so 
they continued to do it, and they got competitive, and they 
tried to do it better than the other person out there.
    So I guess what I would say is, I want broadband 
everywhere. I want to be able to use that phone in the most 
remote areas of Nebraska. But I'm also going to be very anxious 
to see how the private sector is going to help us get to that 
result, because I think that's what's really going to drive 
those last steps, to go from 80 percent or 78 percent to 100 
percent. And I just wanted to put that out there.
    Now, let me, if I might, focus on spectrum, because 
spectrum has a lot to do with the future of this whole debate, 
this whole industry. Commissioner Pai, I liked what you were 
saying. I do think there are some right steps going on with 
spectrum. But maybe starting with the Chair, if you could kind 
of describe for me the plans for spectrum, not just for January 
2014 and the H block, but what you're anticipating as we look 
at the next 12 months, 24 months, maybe 60 months. What should 
we be planning for? And what's the Commission working on, in 
terms of spectrum available?

                         SPECTRUM AVAILABILITY

    Ms. Clyburn. You should, and will, see more robust 
engagement, both with our Federal partners as well as private 
industry. So you heard about the H block--again, an incentive 
auction, which will use the traditional types of tools that, 
you know, we use to get spectrum to market. But we're also 
talking about dynamic spectrum technology, which will help with 
efficiencies and the like. We're also engaged with our Federal 
partners, including, you know, our fellow military partners, 
who have a lot of spectrum. And we're talking about spectrum-
sharing and the like that will--when we work through all of 
this, will bring spectrum to more markets.
    So it is literally an all-of-the-above approach, looking at 
efficiencies, working with the private sector, knowing that 
there are some state-of-the-art things going on there from an 
efficiency standpoint, working our Federal partners to make 
sure that unused or underutilized spectrum is either shared or 
repurposed, and our traditional and our legacy frameworks to 
ensure that we have spectrum in the market.
    So there is robust engagement from a host of both 
providers, holders, and the Federal Government that will bring 
spectrum to market to be able to fuel and feed our need for 
spectrum.
    Senator Johanns. Working with our Federal partners, is it 
the intention to develop a comprehensive plan, where we can 
move spectrum to auction in a systematic sort of way? Because 
nothing will stall growth in this area quicker than the lack of 
available spectrum. And it distorts the marketplace, because 
then all of a sudden whatever spectrum is in the private sector 
starts selling for distorted numbers, if you will.
    So are----
    Ms. Clyburn. So, what--right.
    Senator Johanns [continuing]. Are you working toward that?

                            FEDERAL SPECTRUM

    Ms. Clyburn. Absolutely, sir. We're in ongoing, you know, 
talks, recognizing, from a FCC standpoint, that we have to 
balance, you know, all of the challenges that you just put 
before us. So yes, it's a very methodic, engaged--and we are 
conducting conversations in a systematic manner in order to 
balance and, you know, not adversely influence natural market 
forces.
    Senator Johanns. Other commissioners, weigh in quickly. 
I've got one more question that I really want to ask, and I 
don't want to impose too much on the Chair. So if you could 
jump in.
    Ms. Rosenworcel. Ok, very quickly. In order to solve what 
you accurately characterized as a growing demand for spectrum, 
we're going to have to do three things.

                          SPECTRUM EFFICIENCY

    First, we're going to have to have more investment in 
research and technology. Any technology uses our airwaves more 
efficiently.
    Second, we're going to have to research and do more with 
topology. The way we deploy our networks is increasingly going 
to have to include things like small cells.
    And third, we have to do more with spectrum. Right now, the 
Federal Government has a lot of spectrum, and it uses it in 
service of its missions. I think we should respect that. But we 
need a policy that is about carrots and not sticks. We should 
start rewarding Government users when they're efficient with 
spectrum and then when they return more for commercial use. If 
we do that in a systematic way, we'll develop a pipeline for 
spectrum, which is a pipeline for good things for the economy.
    Mr. Pai. Senator, in addition to what my colleagues have 
mentioned, I would mention two additional aspects.

                          UNLICENSED SPECTRUM

    First, unlicensed spectrum. We commenced a proceeding, 
recently, to increase the amount of 5-gigahertz spectrum that's 
available for unlicensed use. That would be up to 195 megahertz 
of spectrum that would be available for, essentially, high-
throughput Wi-Fi. That would be a very powerful application.
    Similarly, we have teed off--or teed up a number of issues 
relating to 57 to 64 gigahertz spectrum that previously was 
thought to be unusable for unlicensed use. We are now hoping to 
get that into the pipeline, so to speak.

                              SMALL CELLS

    Additionally, one other aspect I would mention--there's no 
timeline on this, but one thing I proposed last year is for the 
FCC to streamline its--the way it evaluates wireless 
infrastructure. So in the old days, when you thought of--made 
that wireless call on your phone, you had to go to a big macro 
cell-site tower, and then the call had to be relayed that way. 
But what carriers are finding now is that it might be more 
efficient for us to have small cells distributed antenna 
systems--essentially, shrinking down the size of the cells. The 
problem is, the FCC's regulations still contemplate that that 
network infrastructure is the macro cell site, so they have to 
go through the environmental processing, the--all sorts of 
different historic preservation rules and those kinds of 
things. If we could streamline that regulatory process, we 
could help carriers and providers get a lot more bang for the 
buck when it comes to spectrum.
    Senator Johanns. We'll do another round, correct?
    Senator Udall. Yes.
    Senator Johanns. Ok. I'll stop there, then.
    Senator Udall. Senator Moran.
    Senator Moran. Mr. Chairman, thank you. Thank you and 
Senator Johanns for having this hearing. The last one we had 
was in 2012, when I occupied the seat that my colleague from 
Nebraska has. And before that, it was 10 years prior; 2002 was 
the last time the FCC was in front of the Appropriations 
subcommittee. And I think you're one of the most important 
agencies of the Federal Government. I think the role that 
commissioners play is one of the most vital and valuable. And 
you have a lot to say about the future of our country, the 
future of its economy, the security of its people. And I'm 
delighted that you're here, and I'm delighted that Chairman 
Udall saw this as an important opportunity for us.
    And I also would like to thank you for the kindness that 
you, all three, extended to me and my staff in numerous 
conversations--phone calls and conversations in the office 
about issues that we face. You all have been very generous, and 
you and your staff have been very accommodating to us and our 
issues.
    I care about a number of things that the FCC's involved in. 
One of my more recent efforts has been in innovation, 
entrepreneurship, startup companies. What the FCC does has a 
huge consequence on the ability for us to grow our economy, put 
people to work, pursue the American dream. And Kansas is a very 
rural State. You have three members of this subcommittee who 
represent very rural places, and so it's been a focus of your 
conversation as well as ours.
    But I want to start with the Universal Service reform order 
of 2011 and ask just a couple of questions. The last time that 
this hearing--a hearing like this occurred was with Chairman 
Genachowski. And mostly in response to my questions about the 
effects of that order on deployment of broadband by rural 
telephone companies and the problems that order created, what I 
heard about was the waiver process. In my view, that's an 
insufficient response. You have had a number of companies apply 
for waivers. I think maybe a handful have been granted. I don't 
know the magnitude of what those waivers--what they consisted 
of, what the order--the waiver consisted of. But it's not a 
long-term solution to a problem created by the order.
    And what I see now--and in addition to that, you've made 
six or seven adjustments--I think the seventh adjustment to the 
order dealt with delaying implementation of a model. Those 
things are good, and I appreciate that effort. I thank you for 
paying attention to this issue. But what's lacking now is a 
telephone company--a provider's ability to play for the future. 
To tell somebody that they can apply for a waiver doesn't give 
them any ability to predict what the future is going to be and 
what investment should be made.
    The adjustments, while valuable, create some uncertainty. 
And I also realize that there is a bit of hypocrisy for a 
Member of Congress to be lamenting about uncertainty when we 
create so much ourselves. But there is a real bottleneck that's 
occurred as a result of the unknowing--inability to know what 
the FCC is really going to do, long term, with the order, 
related to Universal Service reform.
    Simon Wilkie, the former FCC chief economist, concluded 
that the regression analysis is reducing incentives for small 
companies to make capital expenditures. And we have seen a 
significant drop in investment in broadband and other 
technologies. And I think it's as a result of this order. And 
even, I think, the FCC has agreed that the data used for the 
QRA is inaccurate.
    And my question, having outlined that, is, What is the 
long-term plan? What will the FCC be doing to change this 
dynamic that it has helped create, with that order, that we 
can't predict what investment is now a wise investment, because 
we don't know what our return is going to be? Is there a 
thought, long term, as compared to minor adjustments over a 
long period of time?
    Ms. Clyburn. Thank you, Senator. It's good to see you and--
--
    Senator Moran. Thank you.
    Ms. Clyburn [continuing]. Speak to you again.

                        UNIVERSAL SERVICE REFORM

    We are in it for the long haul, sir. You mentioned the 
seventh--we're up to the seventh order on recon. That is 
because there has been ongoing engagement with carriers and 
those--you know, those who support them, to ensure that the 
pathway that we set to deploy more broadband--or broadband-
enabled networks to this Nation, to put this fund on a budget 
to ensure that those gaps, in terms of disparities as it 
relates to broadband, are filled. We have been working 
constantly with providers to close this gap.
    We have made several modifications, which I voted for, 
and--in terms of certainty, the rest of this year and 2014, as 
it relates to the Quantile Regression Analysis, you know, the--
it is certain. We have frozen those benchmarks, and they're in 
place. And so for the intermediate timeframe, there is 
certainty.
    So I want to assure that the things that we have done, 
things that we will continue to do, including getting rid of 
the cost for an application for waivers and the like, will 
continue. And we will continue to work toward ensuring that the 
goals and objectives that we all have--meaning getting modern 
networks--broadband-enabled networks to this Nation, to ensure 
that we stay on a budget, to ensure that Americans get what 
they expect--that will always remain on front of our mind.
    I want to also point out that, in 1,094 study areas, there 
was either no change, in terms of the amount of monies that 
were received or bumps up. There were 127 service areas that, 
you are right, they have had some negative impact, in terms of 
reimbursements. We are constantly working with those 127 study 
areas, those companies, to ensure that there is no degrading of 
service for the people that they serve.
    So I want to assure that we are in constant contact to 
ensure that the changes that need to be made are positive and 
are in sync with our goals and objectives for a modern 
infrastructure.
    Senator Moran. I certainly want to hear from the other two 
commissioners, but I want to point out, while I'm--I think the 
things that the Commission has done have been helpful. The 
point that the freeze is in place for 1 year, that's a 
positive, but it's only a partial positive, because the 
decisions that companies are making about expenditures, they're 
thinking in much longer terms than what's going to--what this 
means to me for the next year. They want to know what their 
return is going to be, year 2, 3, 5, 7, and 10. And so the 
inability to plan or predict, I think, is the damaging factor 
that reduces the investment.
    Commissioner Rosenworcel.
    Ms. Rosenworcel. You make very good points, Senator.
    Up front, I want to say, we're trying to crisscross this 
country with broadband. We don't want to leave any community, 
in Kansas or elsewhere, behind. I think the reform that 
happened before I got to the agency is good, in many ways. 
Refocus the fund from voice telephony on broadband. That's the 
right thing to do. Put it on a budget. That's the right thing 
to do.
    But I'm going to one-up you on your certainty and talk 
about simplicity.
    Senator Moran. Ok.
    Ms. Rosenworcel. I think it is easy, in regulation, to take 
the simple and make it complicated. It is harder to take the 
complicated and make it simple. But if we succeed in making our 
program more simple over time, we will send better signals to 
the market, and we will see more investment. And I think, as we 
move forward, we're going to have to figure out how to be 
simpler so that they have the certainty they need to invest.
    Senator Moran. Commissioner, I'll change my speech and 
remarks to ``simplicity and certainty,'' because you make a--
it's a very valid point.
    Commissioner Pai, anything?
    Mr. Pai. Sure, Senator. You put your finger on the basic 
problem, that I've heard from carriers from Kansas all the way 
up to Alaska, which is that the decision of whether and how to 
deploy broadband is a multiyear investment. It's not a 1-year 
decision, it's a 5- to 20-year decision. But the problem is, 
they can't have the kind of regulatory certainty they need to 
make that determination. If you spend money in 2011, for 
example, the 2013 benchmarks apply to that investment, even 
though the benchmarks didn't even exist when you made the 
investment.
    So that's why, when we adopted the sixth tweak to the 
Universal Service Fund order, this past February, I made two 
specific proposals that I thought could mitigate that 
unpredictability and uncertainty.
    First, I proposed that we hold the QRA benchmarks constant 
for multiple years, and then adjust the--adjust it for line 
loss. Because the fact is that a lot of rural carriers are 
seeing the number of telephone subscribers they have decrease 
while the number of broadband desiring subscribers have 
increased.
    Second, I proposed that we phase in the QRA benchmarks so 
that if there's a substantial drop from year one to year two, 
the FCC could simply average year one and year two's benchmarks 
in order to mitigate some of the hits that some of these rural 
carriers would receive.
    Now, that's not an ideal solution, but those are two 
specific ways I think the Commission could reduce some of the 
unpredictability while still maintaining the overall budgetary 
framework of the Universal Service Fund that was adopted in 
2011.
    Senator Moran. My time is expired. I'll have a few more 
comments at the next round. Thank you.
    Senator Udall. We'll come back for another round, here.
    Commissioner Pai, the 2012 derecho storm left 2 million 
people without access to 9-1-1. This included many people here 
in the Nation's capital. An FCC report found that cell phone 
towers did not have adequate backup power after the storm. 
Wireless companies also failed to monitor networks properly to 
ensure that 9-1-1 service was operating.
    Last October, Hurricane Sandy also knocked out 
approximately 25 percent of cell tower sites in a 10-State area 
impacted by that storm.
    In March 2013, the FCC issued a notice of proposed 
rulemaking (NPRM) that would require periodic audits and 
adequate backup power for 9-1-1 communications infrastructure.
    In your view, what are the important lessons learned from 
the derecho storm? And when will the FCC complete updates to 
rules so that such preventable failures do not happen again?

                         PUBLIC SAFETY NETWORKS

    Mr. Pai. Mr. Chairman, thank you for the question. It is--
it implicates one of the core missions of the FCC. At my very 
first statement at my very first Commission meeting, I pointed 
out that the very first section of the Communications Act 
requires the FCC to focus on protecting the safety of life and 
property by means of radio and wire communication. And I know 
my colleagues share that same conviction, especially in light 
of the derecho, Hurricane Sandy, and other public safety 
emergencies.
    To that end, some of the lessons we've drawn in our--in the 
course of our investigations are, number one, that the Nation 
needs to make the transition to next-generation 9-1-1 sooner 
rather than later.
    One of the focuses that I've had at the FCC has been on 
essentially speeding up the IP transition, the transition from 
old copper technologies to Internet protocol-based 
technologies. Those technologies are more reliable, they're 
more effective. And especially in emergencies, as our own staff 
has found, it would have resolved a lot of the problems that we 
found in the derecho.
    Second, we found that broadcasters play an especially vital 
role in public safety emergencies. When the cell towers go 
down, as you pointed out, when the Internet is otherwise 
inaccessible, a lot of people are able to turn to their 
battery-powered radios--frankly, even go into their cars and 
listen to broadcast information that gives them emergency 
information during the storm and recovery information 
thereafter.
    We've also found that power is an important component of 
the public safety equation. The most state-of-the-art networks 
and the most advanced mobile devices are going to be of little 
use if there's not enough power to generate a signal. And so 
that's one of the areas that we've been focusing on, as well.
    In terms of the task and timeframe, as you asked in your 
question, we have conducted a number of field hearings in New 
York and New Jersey and in the Bay area. We have issued a 
derecho report, thanks to the hard working Public Safety and 
Homeland Security Bureau staff. We have issued an NPRM on 
resiliency, recently, which we hope will incentivize everyone 
from providers to State and local authorities to public safety 
answering-point officials to try to identify best practices.
    And finally, you know, we've been working with our other 
Federal colleagues to try to identify different ways that we 
can make the promise of section 1 a reality. Twelve years on, 
as you pointed out, there are some loopholes in our public 
safety communications network, and our goal--and I'm sure I 
would speak for my colleagues in this regard--is to plug those 
holes as soon as we can.
    Senator Udall. Thank you.
    And Chairwoman Clyburn and Commissioner Rosenworcel, can 
you assure me this will be a priority for you, as well?
    Ms. Clyburn. It is absolutely priority.
    Ms. Rosenworcel. Absolutely. The first duty of any public 
servant is the public safety. And as Commissioner Pai stated, 
it's right there at the start of the law.
    I would say that we learned two things from Hurricane 
Sandy, the derecho, and countless other storms and disasters 
that have happened over the last several years in this country.
    First, our new systems--our wireless systems and IP 
systems--rely on commercial power. They're not like that old 
copper line that went to your house that had an independent 
electrical source. So when the power goes out, those cease to 
work. That's a problem, and we need to start to identify ways 
to improve on that.
    Second, we need to make sure consumers are prepared. If all 
those devices plug into the wall, they need to have on hand 
backup batteries and solar-powered chargers.
    Senator Udall. Thank you.
    Senator Johanns.
    Senator Johanns. Just a follow-up on your comment.
    Having been a council member, a county commissioner, a 
mayor, a Governor, nothing is probably as important here as to 
set reasonable expectations with the consumer. If we create the 
impression that this is fail-safe, that the first flood that 
hits your neighborhood will have helicopters there to lift you 
off your roof, wherever that might be, we're doing a tremendous 
disservice.
    I think it's so important to talk to people honestly about 
what can happen during a storm. What are your backup plans? How 
are you going to deal with a family emergency if you have a 
situation where your phone service isn't working at that point 
in time? It's a whole host of things.
    And again, I think sometimes we set these expectations 
that, quite honestly, aren't realistic, number one, and can't 
be fulfilled, number two. And then we scramble around for 
months afterwards trying to figure out how to deal with it. And 
I just--I want to compliment you on your comments, because I 
just think we have to be more realistic.
    These are important topics, but I've also got another 
really important question that is befuddling the railroad 
industry. Here's the situation:
    By December 2015, railroads have to complete the positive 
train control (PTC) requirements. And that's what they are 
facing. For that system to be completed, as you probably know--
I'm guessing you've agonized over this--20,000--22,000 I think 
is the accurate number--antenna structures and rights-of-way 
have to be constructed. The Commission apparently has decided 
they have to be permitted. And that is slowed down to a snail's 
pace, because the problem is, apparently you can't get through 
the permitting process quick enough, so the chances of this 
being done in that period of time, I think, is nonexistent. In 
fact, I was doing some rough math on it, some back-of-the-
envelope math, and I think, at the current pace, you'd be 7 
years away.
    I'm interested in knowing: Has this come to your 
attention?--number one. Number two, tell me how you're going to 
solve this problem. How can we assure railroads--excuse the 
pun--that this isn't a train wreck headed their way?
    Chairman--Chairwoman.

                         POSITIVE TRAIN CONTROL

    Ms. Clyburn. Thank you, Senator.
    The FCC has been working with the railroads and other 
authorities, including the Federal Railway Authority and 
Advisory Council on Historic Properties. We've been working 
with the railway system since 2010, and we've been encouraging, 
you are right, Amtrak and the commuter rail companies to 
acquire spectrum in a secondary market.
    But we did not stop there. We are--they first--the 
companies informed staff, just this past May, on the amount of 
towers, which you just put forth, and other infrastructure 
needed. But it's just not the FCC alone, as I just put forth. 
You're talking about the Federal Railroad Administration (FRA), 
the Department of Transportation. They oversee the majority of 
the rules. We are in constant--railway safety, public safety, 
again, is job one for the FCC. I want to assure you that any 
and all engagement to expedite this manner--all of those things 
are being, you know, explored, and that we will do everything 
we can to expedite this--a positive outcome for the positive 
train control.
    Ms. Rosenworcel. I remember, about 5 years ago this month, 
there was a big train derailment in Chatsworth, California. 
Twenty-five people died. And Congress responded with the Rail 
Safety Improvement Act and the obligation to have positive 
train control to prevent that kind of human error in the 
future. As the chairwoman mentioned, this takes a lot of 
parties to get done. But I do believe we sit in a sweet spot to 
help contribute. And I think the agency has done a lot to try 
to help rail get spectrum necessary for positive train control, 
on the secondary markets, but we could also do more, because we 
could start by offering up model rules for the deployment of 
those 20,000 poles you mentioned.
    It's complicated getting deployments out there. Too 
complicated. But it takes railroads, rail authorities, local 
governments, State governments. I think one of the things we 
could do to help expedite it is develop a model rule that would 
streamline the process.
    Senator Johanns. Here's what I want to tell you, though. 
I'm not debating the law. You know, that debate, as far as I'm 
concerned, happened, and the law passed. What I'm concerned 
about is not the policy, here; what I'm concerned about is, 
there's a hard deadline, as I understand it, for this thing to 
light up on December--the end of December 2015, and I don't see 
any possibility, if my information is accurate, that it's going 
to be done by then.
    And I think what I would like to request--I'm hoping the 
chairman concurs with me on this--is for whatever Federal 
agencies are involved in this to give us a status report on how 
we're going to get from point A to point B, point B being 
December--end of December 2015, for this system to be permitted 
and done and built and operational and up and going. And if 
it's not possible, if it's not realistic, then we have to do 
something different or we have to change the effective date. We 
have to--I don't know what we have to do. I have no idea.
    Ms. Clyburn. So Senator, we will follow up with you.
    [The information follows:]

    After the September 11, 2013 hearing, I directed the Commission 
staff to keep offices in the United States Congress interested in this 
matter, updated on our progress. I also instructed the Wireless 
Telecommunications Bureau and the Office of Native Affairs and Policy 
to work as expeditiously as possible to complete a Program Comment that 
would create an efficient review process for the necessary positive 
train control (PTC) infrastructure. On September 27, 2013, the staff 
released a scoping document seeking comment on an outline of the 
Program Comment to State Historic Preservation Officers (SHPOs), 
Tribes, and other stakeholders. This is the first step in completing 
the Program Comment. The next step would be the scheduling of 
consultations with Tribes during the fall and winter of 2013. Our goal 
was to submit a Program Comment to Advisory Council on Historic 
Preservation (ACHP) in March 2014. I directed the Bureau and Office to 
devote staff and resources to this project as necessary to keep the 
process moving. I wanted to be sure the staff took the necessary steps 
to ensure the FCC's would not be an obstacle to PTC deployment. There 
are, however, many factors outside of the FCC's authority that may 
affect the deployment of PTC by the statutory deadline.

    Ms. Clyburn. I want to also reinforce that, you know, each 
railroad has a different plan for implementing PTC, but we will 
definitely follow up with you to let you know what the status 
of that is.
    Senator Johanns. Great. Great. Thank you very much.
    I think that----
    Senator Udall. Let me--and let me say to my ranking member, 
I agree with you. I think a status report would be fine. And we 
probably need to coordinate with other committees, too, that 
have jurisdiction on this.
    I would also raise the issue--as you know, on this railroad 
issue, I have many tribes in New Mexico, and there's a whole 
issue there dealing with tribal government and tribal 
sovereignty and all of that.
    Senator Moran, please----
    Senator Moran. Thank you. I appreciate what Senator Johanns 
and you just said about this issue. It is a significant one. 
Deadline is looming, and no way foreseeable that we're going to 
meet that deadline unless the FCC does what Commissioner 
Rosenworcel was saying. We need to--what we should do, what we 
could do--I think we really--you need to do it. And so would 
encourage the FCC taking the leadership and finding a solution.
    We've talked about unlicensed spectrum--we've talked about 
spectrum; I want to talk about two aspects of that yet. I heard 
the chairwoman say that we were poised to auction the H block 
at--by the deadline--the statutory deadline. And I wanted to 
make certain that that was a commitment, the FCC will auction 
the H block by that end of 2014, early 2015.

                        H BLOCK SPECTRUM AUCTION

    Ms. Clyburn. We will plan to meet the statutory deadline, 
as codified by you.
    Senator Moran. And can you say that sentence again without 
the word ``plan'' in it? ``We will meet the statutory 
deadline.''
    Ms. Clyburn. We will meet the statutory deadline. Thank 
you.
    Senator Moran. Thank you very much.
    And then, in regard to the 1755-1850 megahertz spectrum, 
what's the working relationship between the Department of 
Defense (DOD) and the FCC on this issue? Is there something 
that would give us hope that--I think you spoke about this, 
Commissioner Rosenworcel, perhaps very eloquently--not 
``perhaps''--eloquently. And I appreciate that sentiment. You 
have the sense that you're making progress and that things are 
going to happen in regard to the--making the spectrum 
available?

                            FEDERAL SPECTRUM

    Ms. Rosenworcel. There is a lot of interest, as you 
probably know, in the 1755 to 1780 megahertz band. It is 
internationally harmonized for broadband, and we could auction 
it with the 2155 to 2180 megahertz band that you've already 
asked us to auction. We could raise a lot of revenue, do a lot 
of good things for the economy.
    The challenge is that the Defense Department occupies that 
spectrum right now. There have been a lot of conversations at 
the Commerce Department about how to expedite them leaving. But 
that's hard, and it takes time, and we want to be respectful of 
our agency's defense and their need to use spectrum in service 
of their mission.
    But like I said earlier, I think we can keep on talking or 
we can develop a series of incentives. And I think if we 
develop a series of incentives for all of our Federal users of 
spectrum, they will see gain from its reallocation, and not 
just loss. And that would put us in a really good position when 
it comes to putting more wireless airwaves in the hands of 
innovators in the economy.
    Senator Moran. That's an excellent point, that we can have 
conversations among various agencies for a long period of time, 
but if there's an incentive--presumably a financial incentive 
for an agency to give up that spectrum, it's much more likely 
to happen than sitting around the table with negotiations.
    Is there somebody within the administration that is taking 
the lead, interagency-wise, on this issue?
    Ms. Rosenworcel. I know this was something--I've talked 
about it for a very long time, and I was pleased that the--I 
know that the administration is--in a recent Executive order on 
spectrum, they pulled together a group to talk about this. It's 
complicated, what I've just described, however simply I 
described it, and it will take the efforts of Congress, 
probably the Office of Management and Budget, and some big 
thinkers, generally, about how to make that kind of system 
work, on a practical level.
    Senator Moran. In regard to unlicensed spectrum, has the 
Commission yet determined the balance between spectrum that 
will be auctioned that will be unlicensed? What decisions have 
been made in regard to unlicensed spectrum? Anything in 
particular?

                          UNLICENSED SPECTRUM

    Ms. Rosenworcel. Unlicensed spectrum contributes between 
$16 billion to $37 billion to our economy annually. It is a 
tremendous resource. We have it available in the white spaces, 
in the broadcast band. We also are going to look at its use in 
the guard bands, after our upcoming 600 megahertz incentive 
auctions. And then, as Commissioner Pai mentioned, we've got 
real opportunities in the 5 gigahertz band.
    It's important that we seize them, because, if you take 
unlicensed spectrum, which is a great playing field for 
innovation, you combine it with new STEM skills and other good 
research-and-development policies, we're going to have a potent 
stimulant for the economy as a whole.
    Senator Moran. Anything else?
    Commissioner Pai, you, I think, have expressed some 
thoughts about the E-Rate and how to make it more effective, 
how to make certain that the services that are provided because 
of that E-Rate are broader, more available, but not necessarily 
without--with spending more money. Is there something that you 
would like for us to know about that topic?

                                 E-RATE

    Mr. Pai. Sure, thanks for the question, Senator. I think 
that, 17 years on, the promise of E-Rate, in some ways, has 
been realized, as my colleague Commissioner Rosenworcel pointed 
out. The vast majority of schools are now connected. But I 
think, also after 17 years, with the advent of the Internet, it 
becomes clear that the program, as originally conceived, needs 
to be reformed. And so I put forward what I've called a 
student-centered E-Rate plan that I think would better serve 
America's students, parents, school boards, and the Government, 
writ large. And in a nutshell, that plan consists of four 
different parts.
    First, making sure that we have a fairer and more equitable 
funding distribution. So right now, for example, schools that 
get a 90 percent discount essentially get $9 of E-Rate money 
for every $1 that they put in. I would propose increasing that 
match to $1 for every $3 that they get, in order to incentivize 
wiser spending. Because what we've found is that the 90 percent 
discount at schools get the vast majority of the money, in a 
lot of cases.
    I would also move to a per-student funding model so that 
every school would know, well in advance, exactly how much 
money they were going to get, based on the number of students 
they have instead of having to wait and try to guesstimate how 
much E-Rate money was going to be coming.
    Additionally, I would give a bump to remote, rural, and 
low-income schools, which face unique difficulties not faced by 
a lot of the other schools in our country.
    The second major component of the plan would be a 
simplified application process. One thing I've been struck by 
is how many educators tell me that the process is so 
overwhelming, there are so many forms--I mean, the flow chart 
is daunting enough just to look at, let alone navigate--that 
they feel it--they feel compelled to hire an E-Rate consultant. 
And so I sort of analogize it to the tax preparation industry. 
Just as you would--or a lot of people outsource their tax 
preparation to a consultant, so, too, do schools. And that has 
a cost. Every dollar they pay to a consultant is a dollar less 
that they can pay--or expend on their students.
    Third, I would eliminate the current priority system in 
order to migrate all the E-Rate spending over to next-
generation technologies. So under the current system, for 
example, you might be surprised to know that such things as 
paging and BlackBerry service for administrators gets 
prioritized over connecting a classroom to the Internet. I 
would get rid of all that and allow schools to decide, based on 
a consolidated menu of services, exactly what they need to 
serve their students well.
    And finally, transparency. All of these proposals are good 
enough, I would submit, but it's important for us to know 
exactly how the money is being spent. And so I would require 
every school district to post, on a central Web site, perhaps 
administered by the FCC or Universal Service Administrative 
Company (USAC), exactly how they spend that money. That way, 
everyone from FCC Commissioners to Members of Congress to 
individual parents could figure out exactly how a school 
district was spending its money.
    Senator Moran. That information is not now available--how 
it's spent?
    Mr. Pai. It is not easily accessible right now. In fact, 
it's almost impossible, even with a Freedom of Information Act 
(FOIA) request or other, sort of, Government process, to figure 
out how the money is being expended.
    Senator Moran. That's a good point. I don't know that I've 
ever asked a school, ``How are you spending the money?''--which 
is probably a pretty basic question that we ought to answer.
    Mr. Pai. I will construe that as an endorsement of my plan, 
Senator, thank you.
    Senator Moran. I'm out of time. Let me suggest two 
questions for the record.
    I can't tell, from the agency's request, about how the 
revenues from the spectrum auction is going to be spent within 
the FCC's budget. And if you could provide more clarity to that 
question or that--to answer that question, I'd appreciate it.
    And then, second, the number of full-time equivalent 
employees at the Commission has declined to the lowest number 
in about 20 years--20-30 years. I assume that there is also a 
shift to more contract work, and I'd be interested in knowing 
the number of contracts or how that relates to a smaller number 
of actual employees at the FCC. But what's the relationship now 
between the FCC and the contract world?
    [The information follows:]

Hon. Tom Udall,
Chairman, Subcommittee on Financial Services and General Government,
U.S. Senate Appropriations Committee, Washington, DC.
    Dear Chairman Udall: Enclosed please find a statement for the 
record for the September 11, 2013 hearing where the then-sitting 
Federal Communications Commission (FCC) Commissioners testified 
concerning the FCC's budget. Under the Commission's Rules, the FCC 
Chair represents the Commission in all issues related to the fiscal 
year budget request and none of these witnesses currently have that 
role. Accordingly, the FCC's Office of Managing Director is submitting 
this material to close the record at this juncture.
    Thank you for the opportunity to provide supplemental material for 
the record.
            Sincerely,
                                             Mark Stephens,
                                           Chief Financial Officer.
    Enclosure.
 federal communications commission response (submitted by the managing 
             director's office on behalf of the commission)
    In fiscal year 2015, the Commission published online a summary 
Auctions Expenditure Report for fiscal year 2013 to fiscal year 2015 to 
provide a thorough outline of Federal Communications Commission (FCC) 
spending needs and will continue to provide the complete Auctions 
Expenditures Report to the Congress, with a detailed list of all 
auctions expenditures for the previous fiscal year.
    In fiscal year 2013, the Commission received authority from the 
Appropriations Committee to increase the 10-year-old auctions cap of 
$85 million to $98.7 million. The increase covered the following as the 
Commission ramped up the work necessary to support incentive auctions:
  --Incentive auctions critical staffing increased--project managers, 
        engineers, attorneys, technicians;
  --Information technology (IT) contracts for outside auction 
        consultants, auction design and system development, system 
        operations;
  --Wireless Telecommunications Bureau (WTB)/Office of Engineering and 
        Technology (OET) new engineering hard/software to support 
        interference calculations for repacking;
  --Modifications to media bureau licensing system to support channel 
        sharing and repacking; and
  --Cross-border travel and outreach.
    For fiscal year 2014, the Commission is significantly increasing 
focus on auction rulemaking and auction preparation. The request to 
maintain the spending levels at fiscal year 2013 levels include:
  --Carried over employee costs from full-time equivalents (FTEs) hired 
        in fiscal year 2012-2013, added engineers, analysts, attorneys 
        and IT staff;
  --Carried over contracting costs; and
  --Increased travel funding as negotiations to support cross-border 
        negotiations related to repacking.
FTE/Contractor Numbers
    With regard to contract employees, these numbers also decreased 
significantly during the past few years, from a high of 959 in fiscal 
year 2009 to approximately 470 in fiscal year 2014.

    Senator Moran. Thank you, Mr. Chairman.
    Senator Udall. You bet. And if you want to come back and 
try to get answers to those----
    Senator Moran. You're not going away?
    Senator Udall. Yes.
    Senator Moran. All right.
    Senator Udall. Well, I'm going to do a couple of more 
questions, but I'm happy to listen to these.
    So Commissioner Rosenworcel, the Emergency Alert System 
(EAS) is a national public warning system that sends alerts 
across TV and radio stations. Federal agencies and local 
officials can use the system to warn people and provide 
instructions in emergency situations.
    I'm pleased to see progress in modernizing the EAS for 
today's wireless phones. For example, in the case of a local 
weather emergency, such as a flood or a tornado, alerts can be 
sent to cell phones located in the affected area.
    What's the current status of the FCC's efforts to extend 
such alerts nationwide and to all wireless carriers?

                         EMERGENCY ALERT SYSTEM

    Ms. Rosenworcel. Thank you, Senator, that's a great 
question.
    If you think back, there are those iconic beeps from the 
Emergency Broadcast System, which was started during the 
Kennedy administration. I think every one of us here knows 
them. That was the precursor of the Emergency Alert System, 
which was the idea that your broadcast radio and television 
could tell you what was happening locally, take advantage of 
the fact they use local wireless towers.
    But we don't need to just do that with broadcasting today. 
I'll bet every one of us in this room has a phone in their 
purse or pocketbook or in their pocket, and we can send alerts 
that are geographically targeted and text-based to every one of 
those phones, telling you about dangerous activities in the 
area, telling you about dangerous weather, telling you about 
things like AMBER Alerts.
    So we are working right now, pursuant to the WARN Act from 
2006, on the Commercial Message Mobile Alert System, which we 
have renamed the Wireless Alert System, because it's simpler. 
And we are working with our colleagues at the Federal Emergency 
Management Agency (FEMA) to try to make that happen more 
broadly. It's a voluntary system. But given the growth in use 
of mobile phones, there's a lot of interest from the wireless 
carriers in making use of it.
    Senator Udall. Thank you.
    Commissioner Pai, your testimony calls for a pilot project 
or a testbed for working out the technical aspects of the IP 
transition from copper-based phone network to more modern 
Internet infrastructure. I'd like to see rural areas that have 
not always benefited from the latest communications networks 
finally leapfrog ahead as technology advances. Would you 
support conducting such a pilot project in a rural community? 
How could the FCC work with carriers to deploy such a pilot 
project in Indian country?

                      IP TRANSITION IN RURAL AREAS

    Mr. Pai. Thank you, Senator, for the question. I think it's 
an essential component of the IP transition, that we, first of 
all, commit to having an IP pilot program that is robust. When 
I originally made the proposal, I conceived of having the IP 
pilot program administered in a number of different areas. It 
could be a big city like Albuquerque, it could be a small town 
in New Mexico, and including on tribal lands. And I would hope 
that the IP pilot program, if and when we choose to administer 
it, will take into account, as my colleague pointed out, the 
amazing geographic diversity and demographic diversity of this 
country.
    And as to when that is going to happen, I'm not quite sure, 
but whether we like it or not, the transition is upon us. I 
think that consumers are essentially voting individually about 
the superiority of IP-enabled networks. The number of voice 
over Internet protocol (VoIP) subscriptions is up, the number 
of plain-old telephone service subscriptions is down. And so 
we, at the FCC, need to get it right, and need to get it right 
as soon as we can.
    Senator Udall. Great, thank you.
    This question is for all of you. I'm especially interested 
in how rural areas can be successfully transitioned from 
copper-based telephone networks to Internet-based or IP 
networks. In the older copper-based network, telephone calls 
can be completed to rural residents who live far from the 
central switch. That old network is more robust during power 
outages. Cell towers, however, require a power supply; fiber-
optic networks require a power supply.
    As the telephone network becomes an Internet- or IP-based 
network, what will happen to traditional phone service for 
these residents in rural and remote areas? How can we ensure 
that this technological transition will be a step forward 
rather than a step backward for rural areas? And how should 
important principles and values, such as public safety, 
consumer protection, and universal service be preserved in this 
new technological era?
    Ms. Clyburn. Your questions----
    Senator Udall. Chairwoman.

                             IP TRANSITION

    Ms. Clyburn [continuing]. Embody a lot of the concerns and 
the challenges that we ask ourselves each and every day. And 
that's why the FCC formed a task force specifically looking at 
those particular issues. And I'm committed--will reaffirm my 
commitment to you that we'll look closely, not only at the 
impact--at the general impact on consumers, but, of course, on 
public safety. But regardless of the technology, universal 
service, consumer protections, competition, and public safety 
remain our core mission.

                         RURAL CALL COMPLETION

    And one specific issue, as it relates to where the IP 
transition is directly affecting rural areas today is--you 
mentioned it earlier--rural call completion--and we will 
circulate that item soon--where some calls, you know, again, 
just aren't being completed. We are working very hard to ensure 
that the transitions that are coming, you know, from landline 
to mobile to--you know, for--you know, migrating to IP--all of 
those, you know, migrations will serve to better connect and 
serve the American public, and not--those four pillars that I 
put forth, those are never compromised.

                             IP TRANSITION

    Ms. Rosenworcel. I agree with my colleagues, and I agree 
with what you set out, which is--we have exciting new IP 
networks. The technology may be new, but in communications law, 
our values are really old. They've been the same for decades. 
We care about public safety, we care about universal service, 
we care about competition, and we care about consumer 
protection. And I think having location-specific IP trials, 
including in rural areas, like you mentioned, would be a good 
way to test those out.
    Mr. Pai. Senator, I think my colleagues have ably described 
the nature of the problem.
    I would just simply step back and say that, outside of the 
IP transition, I think the agency needs to think more broadly 
about the nature of regulation in a highly dynamic industry. 
The famed economist, Ronald Coass, recently passed away, and 
one of the things that he is best known for is the fact that 
when transaction costs for a business are high, the importance 
of regulation in law becomes even greater. And especially if 
you're talking about rural areas, where, quite candidly, there 
may not be a compelling business case, if any business case, to 
make for deployment, we need to ensure, at the FCC, that we 
think about IP transition and--IP-based technologies as an 
opportunity rather than a hindrance. And if we do that, if we 
set clear and simple rules for the road, I'm convinced that we 
will keep those transaction costs low and allow the private 
sector, as the ranking member pointed out, to take the risks 
that are necessary to make multiyear--in some cases, multi-
billion dollar--investments in IP.
    Senator Udall. Great, thank you.
    Senator Moran, did you want to come back and try to get 
preliminary answers, or you want to leave those----
    Senator Moran. I----
    Senator Udall [continuing]. For the record?
    Senator Moran. Mr. Chairman, I thank you for that 
opportunity. I think both of those answers probably have some 
detail to them; and so I'm happy to have that response in 
writing.
    I appreciate what you had to say about what the chairman 
had to say about calls dropped and the efforts to solve that 
problem.
    And you, or someone, said, earlier, about service on tribal 
lands. And I don't know much about that issue, but I'd be glad 
to be educated by someone about the particular problems that 
are occurring on tribal lands.
    And so I appreciate the hearing that we had today, and 
thank you, Commissioners, Madam Chairperson, for your testimony 
today, and the response to our questions.
    Senator Udall. Senator Johanns.
    Senator Johanns. No more questions.
    If I might, I just want to say thank you for being here. I 
so appreciate the opportunity. Maybe I appear like a frustrated 
former member of the Commerce Committee.
    It's a great committee. And these are such important 
issues.
    If I just might offer one final observation, Commissioner 
Pai, I really believe you're right, I don't think anybody 
believes that the future of telecommunication or Internet 
services or broadband lies in copper to the rural areas. It 
served us well for a very, very long time.
    I'm one of those people that grew up in a rural area, and I 
can remember the party line. And we thought that was a 
tremendous step forward, that we could share the line with 
seven or eight other families. And it was a tremendous step 
forward. Obviously, when I even mention that today, people 
laugh. You know, it really dates me, and I understand that.
    Copper served us well for a long time, but it will be new 
technology. And somehow, some way, the private sector's going 
to have to find the business case for that, because these are 
in areas where there's just not a lot of people. And the 
challenge we're facing in all of our States is, these counties 
are, every Census, seeing fewer and fewer people, for a whole 
host of reasons. Agriculture is more efficient, ranching's more 
efficient; young people go to the city, and they get an 
education, they don't come back home. A whole bunch of things 
are happening out there.
    But at the end of the day, we're going to have to find a 
way to allow that technology to develop and expand. Because if 
we over-regulate it, if we over-require it, we over-all-of-
those-things to it, it won't happen, and we will perform a 
tremendous disservice.
    So I just think this extremely light touch is enormously 
important. It is about building partnerships with the private 
sector. It is doing everything we can to encourage them to 
expand and develop into those last miles. But I can almost 
guarantee you, the solution is not more regulation.
    Thank you, Mr. Chairman.
    Senator Udall. Thank you, Senator Johanns.
    And let me thank our three witnesses and thank all who 
participated in preparing for this hearing. I appreciated 
hearing from the top officials of the FCC about resource needs 
and the opportunity to explore a number of important and timely 
issues. Today's discussion has provided helpful insights into 
the FCC's operations and challenges. This information will be 
instructive as Congress moves forward to finalize our work on 
the fiscal year 2014 funding.

                     ADDITIONAL COMMITTEE QUESTIONS

    The hearing record will remain open until Wednesday, 
September 18, at 12 noon, for subcommittee members to submit 
statements and/or questions to be submitted to witnesses for 
the record.
    [The following questions were not asked at the hearing, but 
were submitted to the Commission for response subsequent to the 
hearing:]
               Questions Submitted to Hon. Mignon Clyburn
                Questions Submitted by Senator Tom Udall
           public safety communications and interoperability
    Question. The origins of the Federal Communications Commission's 
(FCC's) public safety mission pre-date the creation of the agency. In 
1912, Congress enacted legislation in response to radio distress call 
failures during the Titanic sinking. Twelve years ago, the terrorist 
attacks of 9/11 exposed a radio interoperability problem that put first 
responders' lives at additional risk. Some police and fire crews could 
not communicate via radio handsets with each other. The Commission has 
a strategic goal to promote the availability of critical communications 
infrastructures that are reliable, interoperable, redundant, and 
rapidly restorable.
    How would you rate the Commission's attainment of this strategic 
goal? What is needed to address any deficiencies and on what timetable?
    Answer. The Commission has made significant strides toward ensuring 
critical communications infrastructures are reliable, interoperable, 
redundant, and rapidly restored in the event of disaster. On September 
26, 2013, the Commission adopted a Notice of Proposed Rulemaking 
seeking comment on how wireless providers compare in keeping their 
networks operational during emergencies. I believe this information 
will create incentives for wireless providers to improve network 
resiliency, which will benefit public safety and citizens alike, 
without imposing any significant new burdens on providers. Commission 
staff will closely review the record once comments are received.
    I was pleased to see the wireless industry coalesce around a 
voluntary solution to the lack of interoperability in the lower 700 MHz 
band, which I circulated as a Report and Order. I also circulated a 
Second Report and Order that provides technical rules for the 700 MHz 
broadband spectrum licensed to the First Responder Network Authority. 
These two Orders were approved the Commission on October 28, 2013 and 
will enhance the Nation's public safety networks and improve 
communications for first responders.
          public safety answering points do-not-call registry
    Question. As part of the Middle Class Tax Relief and Job Creation 
Act of 2012, the Commission is required to create a Do-Not-Call 
registry for telephone numbers used by Public Safety Answering Points 
(PSAPs), and to prohibit the use of automatic dialing ``robocall'' 
equipment to contact those numbers. This requirement is designed to 
address concerns about the use of autodialers, which can generate large 
numbers of phone calls, tie up public safety lines, and divert critical 
responder resources away from emergency services. The law permits 
verified PSAP officials to place on the registry telephone numbers that 
are used for emergency services of communications between public safety 
agencies. In October 2012 the Commission published its rules creating 
such a registry.
    Has the registry been fully established? How is it working?
    Answer. The Commission's rules creating the PSAP Do-Not-Call 
Registry became effective on March 26, 2013, and Commission staff 
continues to work on the registry's details. Once this work is 
complete, the Consumer and Governmental Affairs Bureau will release a 
Public Notice announcing the specific operational details. The 
Commission intends to work with public safety organizations to ensure 
that PSAPs are made aware of the opportunity to place their phone 
numbers on this registry. The Commission will also work with and with 
robocalling equipment operators to inform them about the requirements.
    Question. What is the requested level of funding sought for fiscal 
year 2014 for the operation and maintenance of this registry? Does the 
Commission also seek a one-time amount for fiscal year 2014? For what 
purposes is that intended to be invested?
    Answer. The budget request for fiscal year 2014 for the PSAP Do-
Not-Call Registry is $1,500,000. This amount includes $500,000 to 
operate and maintain the registry, and a $1,000,000 one-time cost.
  tribal lands' digital divide and government-to-government relations
    Question. I want to thank you for your efforts to tackle the 
digital divide facing Native American communities. Telephone access on 
Tribal lands still lags far behind the rest of the country. Broadband 
access may be as low as 10 percent on Tribal lands. This appalling 
digital divide creates real hardships for people, particularly in 
emergency situations. That is why the work of the Commission's Office 
of Native American Affairs and Policy is so important. Engagement with 
Tribes on a government-to-government basis is critical to solving 
communications challenges in Indian Country. This subcommittee's 
appropriations bill instructs the Commission to support to develop a 
plan to fully implement its existing Statement of Policy on 
Establishing a Government-to-Government Relationship with Indian 
Tribes.
    Will you support a Commission effort to develop a plan to implement 
the Commission's statement of policy on government-to-government 
relations with Indian Tribes?
    Answer. We are committed to ensuring resources for native 
populations--the Commission recently authorized a local program and 
will commit resources where they are available. I support developing a 
plan to implement the Commission's statement of policy on government-
to-government relations with Indian Tribes, but note that sequestration 
has placed significant burdens on the Commission's travel budget. 
Provided the Commission receives the overall budget requested, we can 
commit more resources.
               national lifeline accountability database
    Question. Your testimony notes that the Commission adopted reforms 
to the Lifeline program to help low income persons get telephone 
service. As you know, Lifeline dates to the Reagan administration and 
was expanded to include wireless phone service during the presidency of 
George W. Bush.
    Here is what one Lifeline user from the Navajo Nation had to say: 
``I got help when I fell and broke my ankle. I called an ambulance and 
went to the doctor.'' Another wrote, ``I've been stranded during bad 
winter weather, and my Lifeline has helped me . . . .'' So this 
initiative can indeed be a ``Lifeline'' for low income persons in a 
time of emergency or when applying for a job.
    Yet it is important that the Commission continue reforms to guard 
against waste, fraud, and abuse. One of the recent Lifeline reforms is 
a new National Lifeline Accountability Database. This database will 
help weed out ``double dipping'' if there are duplicate participants 
receiving Lifeline assistance.
    Can I have your assurance that the Commission is committed to 
implementing this database as soon as possible?
    Answer. Yes. In the 2012 Lifeline Reform Order, the Commission 
established the National Lifeline Accountability Database (NLAD) to 
detect, prevent and eliminate duplicative support in the Lifeline/Link 
Up program. The NLAD is a key part of the Commission's reform efforts 
to cut fraud and abuse in the Lifeline program. The Universal Service 
Administrative Company, or USAC, administers the Lifeline program on 
behalf of the FCC. USAC has announced its selection of the vendor for 
NLAD. On October 23, 2013, the FCC's Wireline Competition Bureau 
released a public notice informing eligible telecommunications carriers 
(ETCs) receiving Lifeline support that the NLAD will be ready to accept 
subscriber information by December 2013.
                            lifeline reform
    Question. I understand that the Commission may be reviewing a 
proposal to prohibit in-person distribution of phone handsets to 
Lifeline customers. This could negatively impact Lifeline-eligible 
residents of Tribal lands in New Mexico. For example, eligible phone 
companies would not be able to use mobile stores to reach residents 
from remote Tribal areas and provide them with phones. Moreover, some 
remote areas do not have postal service for regular mail delivery of a 
handset.
    As the Commission considers proposals to further modify the 
Lifeline program, will you carefully take into account the special 
circumstances facing residents on Tribal lands where the digital divide 
is so acute?
    Answer. To address the significant communications deployment and 
access challenges on Tribal lands, the Commission has previously 
targeted additional universal service support for residents of Tribal 
lands in a variety of ways, including by providing enhanced Lifeline 
and expanded Link Up support. Through our Lifeline reform efforts, we 
have made our commitment to connecting these communities a priority.
    For example, the Commission set a uniform Lifeline discount amount 
at $9.25 per month on non-Tribal Lands, but recognized that low-income 
consumers living on Tribal Lands should continue to be eligible for 
enhanced Lifeline support--up to an additional $25 per month in 
Lifeline support. In addition, while Link Up support (which offsets the 
cost of commencing service) was eliminated on non-Tribal Lands, the 
Commission elected to maintain the enhanced Link Up program on Tribal 
Lands for carriers receiving high-cost support, due to the significant 
telecommunications and connectivity challenges on Tribal Lands. We will 
continue to take these special challenges into account as further 
modifications to the Lifeline program are considered, while ensuring 
this important program is protected against waste, fraud and abuse.
tribal entity's eligible telecommunications carrier application pending 
                              for 2 years
    Question. Earlier this year, other members of the New Mexico 
congressional delegation and I wrote the Commission requesting a 
decision as soon as possible on a pending Eligible Telecommunications 
Carrier (ETC) application filed by Navajo Tribal Utility Authority 
(NTUA) Wireless in WC Docket No. 09-197 to provide Lifeline service to 
people living on the Navajo Nation. NTUA Wireless seeks to make 
telecommunications service available to more residents of the Navajo 
Nation, which has some of the lowest telephone and broadband access 
rates in the continental United States. My understanding is that NTUA 
Wireless' application has been pending before the Commission unopposed 
for more than 2\1/2\ years. It is unacceptable to me that such an 
application would languish at the Commission for so long.
    When will the Commission finally resolve NTUA Wireless' pending ETC 
Lifeline application?
    Answer. I have directed staff to make this a priority and 
Commission staff has met with representatives of NTUA on several 
occasions to discuss its ETC application. NTUA Wireless recently filed 
a second amendment to its ETC designation petition on October 17, 2013 
for purposes of receiving Universal Service Fund (USF) support to 
provide Lifeline service throughout its service area within the 
boundaries of the Navajo Nation, and for a conditional ETC designation 
to participate in the Tribal Mobility Fund Phase I Auction for unserved 
areas of the Navajo Nation. Commission staff is actively reviewing this 
filing and working to reach a final decision on this matter as 
expeditiously as possible.
                    tribal mobility fund eligibility
    Question. The Eastern Navajo Agency in New Mexico, along with the 
Ramah Navajo and Zuni Pueblo, are some of the most underserved areas in 
the continental United States. It is my understanding that for the 
December Tribal Mobility Fund auction the Commission will treat the 
vast majority of the Eastern Navajo Agency as having 3G service and 
therefore not eligible for tribal mobility funding. But my 
understanding is that such coverage is not currently available 
throughout this area.
    Will the Commission take steps to confirm the level of service 
available in these areas before excluding them from potential broadband 
support through the upcoming auction? Can you explain why more area 
within the Eastern Navajo Agency is not being made eligible for tribal 
mobility funding?
    Answer. The Commission recognizes that underserved tribal areas 
have critical needs. To that end, in preparation of the scheduled 
Tribal Mobility Fund Phase I auction in December 2013, the Commission 
released a list of eligible areas. The list of eligible areas was 
generated through a review of the record, which included input from 
interested parties and an analysis of available coverage data. This 
information determined the availability and coverage of 3G services in 
numerous tribal areas, including the Eastern Navajo Agency. After 
additional data was submitted, Commission staff reassessed available 
coverage of areas in northwestern New Mexico. Based on this additional 
data, in late September, Commission staff determined that an additional 
40 census blocks in northwestern New Mexico would be eligible for 
support from the Tribal Mobility Fund Phase I.
                  bill shock and wireless ``cramming''
    Question. I authored legislation to prevent cell phone ``bill 
shock,'' unexpected increases in one's monthly bill. So I am pleased 
that the Commission worked with wireless providers to come to a 
voluntary agreement on free consumer alerts for cell phone users. 
Millions of American wireless customers now benefit from notifications 
to help avoid ``overage'' charges. But I am still concerned about some 
practices that can hurt consumers, such as ``cramming.'' Cramming is a 
practice in which telephone customers are billed for enhanced features 
such as voice mail, caller-ID and call-waiting that they have not 
ordered. The Federal Trade Commission reached a settlement with a 
company that apparently ``crammed'' unauthorized charges onto cell 
phone bills for phony anti-virus scans that showed up when smart phone 
users played the Angry Birds game app.
    What is the FCC doing to address these consumer issues? Is the 
range of remedies available to the FCC adequate to meaningfully address 
these problems?
    Has the prevalence of these unauthorized practices been reduced in 
recent years? What recourses does a customer have if victimized by one 
of these deceptive practices?
    Answer. Wireless complaints now make up a significant percent of 
the cramming complaints the Commission receives in an average month. 
Furthermore, various outside sources--including some State public 
utility commissions--have provided additional data showing that 
wireless cramming complaints are on the rise. On April 17, 2013, the 
Consumer and Government Affairs Bureau held a public workshop to 
educate consumers about detecting and preventing cramming, and to 
collect additional information in response to the Further Notice of 
Proposed Rulemaking issued to address this inquiry. Commission staff is 
reviewing the record.
              tv blackouts during retransmission disputes
    Question. During a recent dispute over retransmission fees, nearly 
3 million Time Warner Cable customers lost access to CBS programming. 
In response, you stated that media companies should ``accept shared 
responsibility'' for putting consumers' interests above other interests 
during such disputes.
    Given the Commission's authority under section 325 of the 
Communications Act, what more can the FCC do to better protect 
consumers during such retransmission disputes?
    Answer. I agree that the recent dispute between Time Warner Cable 
and CBS was particularly troubling due to the extended length of time 
of the disagreement. While Commission staff--myself included--monitored 
the situation and engaged the parties to encourage resolution, there is 
limited Commission authority in this area given that such agreements 
are privately negotiated between parties. It is my hope that, in the 
future, media companies will put consumers' interests first and prevent 
additional programming blackouts. If Congress should decide to revisit 
the issue, Commission staff would be available as a resource for 
technical assistance.
                 tv translators and incentive auctions
    Question. It is estimated that nearly 54 million Americans, 
including almost 600,000 New Mexicans, rely exclusively on over-the-air 
TV. In New Mexico in particular, viewers rely on the more than 200 
translators located throughout the State to receive broadcast 
television. This is especially the case in rural areas and on Tribal 
lands.
    As the Commission proceeds with the incentive auction rulemaking, 
will you consider the importance of protecting TV viewers in rural 
areas who are served by TV translators?
    Answer. The Commission recognizes that low power television (LPTV) 
and TV translator stations are an important source of local television 
programming for rural and remote locations. Given that these stations 
are not eligible to participate in the incentive auction, and have 
secondary status for interference purposes, the Commission sought 
comment on specific proposals to help ensure LPTV/TV translator 
stations continue to reach viewers. Commission staff is carefully 
evaluating the record compiled in the proceeding regarding the issue, 
and your views will be taken into consideration.
        spectrum sharing in the broadcast auxiliary service band
    Question. Radio spectrum is a scarce and valuable resource. As you 
know, the Department of Defense recently proposed transiting out of the 
1755-1780 MHz band. An auction of this band when paired with the 2155-
2180 MHz band reportedly could generate more than $12 billion according 
to some estimates. As part of the proposal, TV broadcasters would share 
spectrum in the Broadcast Auxiliary Service (BAS) band (2025-2110 MHz) 
with Department of Defense users. Broadcasters currently use BAS band 
spectrum for transmitting live footage during coverage of breaking news 
events and emergencies.
    As the Commission works with the Department of Commerce and Federal 
spectrum users, can you assure me that the FCC will carefully consider 
concerns about preserving broadcasters' ability to transmit live 
footage during breaking news events?
    Answer. I can assure you the Commission will carefully consider 
means to preserve broadcasters' ability to transmit live footage during 
breaking news events. In July 2013, the Commission issued a Notice of 
Proposed Rulemaking for the Advanced Wireless Services (AWS)-3 
spectrum, which specifically sought comment on the potential effects on 
incumbent BAS users and Federal users in the 2025-2110 MHz band. 
Commission staff is carefully evaluating the record compiled in the 
proceeding.
                  protecting persons with disabilities
    Question. The 21st Century Communications and Video Accessibility 
Act (CVAA) was passed by Congress in 2010 to update our Nation's 
telecommunications protections for people with disabilities. The law 
contains groundbreaking protections to enable people with disabilities 
to access broadband, digital and mobile innovations. There are 
approximately 36 million Americans with hearing loss and 25 million 
with a significant vision loss. In 2009, a study conducted by the FCC 
revealed that people with disabilities are less likely to use Internet-
based communications technologies: 65 percent of Americans have 
broadband at home, but only 42 percent of Americans with disabilities 
have these services. This gap is due in part to physical barriers that 
people with disabilities confront in using the Internet. It is for this 
reason that the National Broadband Plan, adopted by the Commission in 
March 2010, recommended that Congress and the FCC should modernize 
accessibility laws to keep pace with broadband technologies.
    What is the level of compliance with the communications provisions 
of the 21st Century Communications and Video Accessibility Act (Public 
Law 111-60), enacted October 8, 2010?
    Answer. Thus far, the compliance with the provisions of the law 
that have gone into effect has been very successful. For example, the 
National Deaf-Blind Equipment Distribution Program has provided 
communications equipment to hundreds of deaf-blind individuals, 
television shows distributed via Internet protocol are now routinely 
shown with closed captions, video programming providers are providing 
video description on television shows so people who are blind and 
visually impaired can access that programming, and there are far more 
options for accessible advanced communications wireless devices than 
ever before.
    Question. What is the status of FCC implementation of this law?
    Answer. The FCC has moved aggressively through numerous rulemakings 
and other proceedings to implement this landmark legislation. Prior to 
the Government shutdown, the Commission had met, or was on track to 
meet, every rulemaking deadline set by the CVAA. We are committed to 
meeting the remaining deadlines. The FCC is also committed to working 
with industry, consumers, and other stakeholders to address and resolve 
disability-related accessibility issues.
    Milestones in the Commission's implementation of the CVAA include:
Communications
  --Access to advanced communications services and equipment, such as 
        text messaging and e-mail; rules were adopted October 7, 2011, 
        with full implementation by October 8, 2013.
  --Access to Web browsers on mobile phones by people who are blind or 
        visually impaired; rules were adopted April 26, 2013, and will 
        be effective on October 8, 2013.
  --National deaf-blind equipment distribution program, supporting 
        programs that distribute communications equipment to low-income 
        individuals who have both significant vision and hearing loss; 
        rules were adopted April 6, 2011, a pilot program was launched 
        on July 1, 2012, and hundreds of individuals have been served 
        by the program to date.
  --Contributions by non-interconnected voice over Internet protocol 
        (VoIP) providers to the Telecommunications Relay Service (TRS) 
        Fund; rules were adopted October 7, 2011, and fully implemented 
        by the 2012-2013 TRS Fund year.
  --The Emergency Access Advisory Committee conducted a nationwide 
        survey and submitted a report in 2011 and additional reports in 
        2013; recommendations included actions needed for migration to 
        a national Internet protocol-enabled network, and to develop an 
        interim, mobile text solution that can be rapidly deployed to 
        provide nationwide access to 9-1-1 services, including to those 
        in the disability community.
Video Programming
  --The Video Programming Accessibility Advisory Committee submitted 
        reports and recommendations on captioning Internet-delivered 
        video programming in 2011, and on video description, 
        accessibility of televised emergency information, and equipment 
        accessibility requirements in 2012.
  --Closed captioning on Internet-delivered video programming; rules 
        were adopted January 12, 2012, with a multi-year phase-in that 
        began September 30, 2012 for programs to contain captions; 
        implementation required by January 1, 2014, for equipment to 
        deliver and display captions.
  --Video description on television; rules were adopted August 24, 
        2011, which became effective July 1, 2012, for programs to 
        contain video description, and implementation required by May 
        26, 2015, for equipment to deliver video description.
  --Access to televised emergency information for people who are blind 
        or visually impaired; rules were adopted April 9, 2013, and 
        will be fully implemented by May 26, 2015.
  --Video equipment accessibility to ensure that user interfaces, 
        guides, and menus for digital apparatus and navigation devices 
        are accessible; notice of proposed rulemaking was adopted May 
        30, 2013, and final rules are due October 9, 2013.
    Question. To what extent do accessibility barriers continue to 
exist for persons with disabilities?
    Answer. Barriers still exist where our rules implementing the CVAA 
have not yet gone into effect. For example, television sets and 
navigational menus that are inaccessible to people who are blind and 
visually impaired, and emergency information on TV that is not yet 
audibly accessible to people who are blind and visually impaired. 
Further implementation of our rules implementing CVAA will help to 
rectify these barriers.
                      fcc consumer complaints data
    Question. I would like to ask you about ways to improve how the FCC 
can better help consumers. The Commission receives consumer complaints 
and other public feedback through its website and other means. These 
data, however, are only made public on a very limited basis.
    What steps could the Commission take to facilitate public access to 
this complaint data? How can new technologies potentially help the 
Commission use this information to identify important issues for an 
official action or response?
    Answer. Providing help to consumers is a top priority of the 
Commission. I believe the Commission's work can benefit from taking 
advantage of new technologies. For example, the Commission should 
implement changes to the Integrated Voice Response System as 
recommended by the Consumer Advisory Committee. Improved consumer 
interfaces for the complaint process, streamlining the complaint intake 
function, which includes automating the processing, service of 
complaints, and responses to inquiries will benefit consumers and 
provide more accurate, complete, and clear data.
                               data caps
    Question. Most consumers are accustomed to online access at home 
with a broadband subscription that allows unlimited access to data from 
the Internet. Yet today many wireline and wireless Internet service 
providers are experimenting with or implementing usage-based pricing 
and ``data caps.'' My understanding is that consumer groups have asked 
the Commission to collect information on how companies implement and 
administer such data caps.
    Has the Commission taken any concrete steps to do so? Will you 
commit to studying the impacts of data caps for consumers and publicly 
reporting the Commission's findings?
    Answer. Data caps are a business model experimentation that may 
help some consumers, in particular providing lower priced options to 
low volume users. But, I believe new business models and new services 
by broadband providers--wireline or wireless--should not come at the 
expense of competition, or broadband speed and monthly capacity. I 
would support the Commission undertaking a public study to examine the 
impact that data caps have on consumers.
            political advertising disclosures, transparency
    Question. When negative campaign ads flood the airwaves, voters 
should know who's paying for them and how much they've spent. So I 
believe that requiring broadcasters to post their political files 
online is a step toward more transparent elections.
    When will the Commission finalize its rule to help bring more 
transparency and public scrutiny for political TV advertising on public 
airwaves?
    Answer. The Commission's rules requiring TV stations to post their 
public file online became effective on August 2, 2012. As part of this 
requirement, the TV stations affiliated with the top four national 
networks in the top 50 designated market areas (DMAs) were required to 
post new political file documents as of the effective date, with the 
rest of the TV stations exempted from online political file 
requirements until July 1, 2014.
    At the same time it adopted the online public file rules, the 
Commission directed the Media Bureau to issue a Public Notice on or 
before July 1, 2013, seeking comment on the impact of the availability 
of online political file information for the initial 240 stations. The 
Public Notice was issued on June 25, 2013, with the reply comment 
period ending on September 23, 2013. The record developed as part of 
the Public Notice will help the Commission determine if any changes are 
necessary prior to expiration of the online political file exemption 
for the rest of the TV industry. Staff currently is reviewing the 
record generated by the Public Notice.
            fcc wireline competition bureau staffing growth
    Question. A review of the Commission's fiscal year 2014 budget 
justification reflects that the staffing level proposed to realize the 
most significant increase for next year is the Wireline Competition 
Bureau. As proposed, the funding level would grow from $30.656 million 
to $40.069 million, representing an increase of $9.413 million, or a 
boost in spending of 31 percent. The full-time equivalent staffing for 
that component would increase from 176 to 217, or an increase of 41 
staff (23 percent growth).
    Can you please describe the work of this component and explain the 
rationale for the proposed increase?
    Answer. Additional staff is needed in the Wireline Competition 
Bureau (WCB) in order to implement reforms to the universal service 
programs--the High Cost Fund, including the newly created Connect 
America Fund, the Mobility Fund, the Tribal Mobility Fund, as well as 
the revamped Rural Health Care and Lifeline programs. In addition, WCB 
is in the process of reforming the Schools and Libraries (E-Rate 
program) and the Universal Service Fund (USF) contributions system. We 
have heard from many members of Congress on the importance of 
implementing these reforms and moving ahead with this important 
process. While sequestration has had an impact on agency's budget, we 
will reprogram if necessary to take care of all essential services 
first. However, these additional resources are essential to ensure an 
efficient and timely process as the Commission continues to implement 
USF reforms and provides continued oversight over these important 
programs.
                          fcc regulatory fees
    Question. The Commission adopted an order on August 8 to update its 
regulatory fee structure. This order followed a Government 
Accountability Office (GAO) report that found the Commission's 
regulatory fee structure is out of date given many changes in the 
telecommunications market, in regulation, and in the Commission's work 
over the last decade. The recent FCC order describes the changes as 
initial steps to more comprehensively revising the Commission's 
regulatory fee program. The order also notes that the Commission will 
issue ``shortly'' a Second Further Notice of Proposed Rulemaking once 
more public input is considered.
    How soon can we expect the Commission to take the next steps to 
modernizing its regulatory fee structure?
    Answer. As you state, the Commission recently adopted an Order that 
is an important first step in reforming the Commission's regulatory fee 
program. The fees adopted in the rulemaking are intended to be interim 
measures aimed at reforming the fee program so that fees paid by all 
licensees will more accurately reflect the current cost of regulating 
them. In reviewing the record, the Commission determined additional, 
complex issues required further analysis. While the Order prescribed a 
conclusive readjustment of regulatory fees within 3 years, and I remain 
committed to meeting this goal, we must also ensure analysis of these 
highly complex issues is done properly.
                           spectrum research
    Question. During the hearing, there was a brief discussion of the 
need for further research into how to harness and efficiently use radio 
spectrum. I would like to ask how the Commission can help spur 
innovation when it comes to maximizing use of radio spectrum for 
commercial uses. Earlier this month, the National Aeronautics and Space 
Administration (NASA) launched the Lunar Atmosphere and Dust 
Environment Explorer (LADEE). This mission includes a demonstration of 
two-way, high rate laser communications for space communications. While 
orbiting the moon, LADEE will communicate at broadband speeds with a 
receiver at the White Sands Missile Range in New Mexico. Such optical 
communications technology is similar to fiber optics but without the 
``fiber.'' Although such breakthrough technology faces technical 
challenges for terrestrial deployment, it is an example of spectrum 
research with enormous potential.
    How can the Commission encourage and promote further research into 
innovative spectrum technologies?
    Answer. The Commission has taken several steps to encourage and 
promote innovated spectrum technologies. Earlier this year, the 
Commission adopted a Report and Order to promote innovation and 
efficiency in spectrum use by expanding the types of available 
experimental authorizations. On August 9, 2013, the Commission adopted 
a Report and Order that modifies technical rules for the 60 GHz band to 
encourage technological development in these spectrum bands. The 
Commission has also begun a proceeding to examine how a potential 195 
megahertz of spectrum in the 5 GHz band may be used for unlicensed use. 
Additionally, the Commission's Technological Advisory Council is 
looking at ways to identify spectrum bands that have the potential to 
become the new ``beachfronts,'' and to assess technical or policy 
changes necessary to enable use this spectrum. I believe these efforts 
go a long way toward encouraging research into innovative spectrum 
technologies.
                                 ______
                                 
            Questions Submitted by Senator Richard J. Durbin
                         northern border issues
    Question. In November of last year I wrote to then Chairman of the 
Federal Communications Commission (FCC) Julius Genachowski on the 
importance of transparency as we conduct the first ever voluntary 
incentive auction. An important step to ensuring a successful auction 
is the completion of coordination with Canada in markets such as 
Chicago. What is the status of coordinating incentive efforts with 
Canada, and are there particular issues that still yet need to be 
resolved before moving forward?
    Answer. The United States has a long and successful history of 
close cooperation with Canada and Mexico regarding the use of radio 
spectrum along the borders and we expect that this cooperation will 
continue through the incentive auction process. This history includes 
coordination related to the digital television (DTV) transition, 
experience that FCC staff will be applying in incentive auction 
coordination efforts. The Commission will continue to abide by our 
international agreements with both countries and intends to adhere to 
all statutory requirements.
    The Commission and the State Department have been engaged in 
ongoing discussions with both Canada and Mexico on border issues 
related to the incentive auction. During the summer, I emphasized 
incentive auction-related coordination in high level meetings with our 
Canadian counterparts in Ottawa and Mexican counterparts at the 
International Telecommunication Union Global Symposium for Regulators 
in Warsaw. In September, I contacted the new Chairman of the recently-
formed Independent Federal Communications Institute of Mexico (IFETEL), 
reiterating the need to continue spectrum coordination discussions 
related to Mexico's digital television (DTV) transition and the U.S. 
incentive auction. We conduct regular discussions with Canadian 
spectrum policy managers, and are working to continue or incentive 
auction dialogue with Mexico by scheduling such regular discussions 
with the spectrum policy managers at the new IFETEL.
    As in any international negotiation, there are several unique 
stages, and progression from one stage to the next depends on a variety 
of factors. We anticipate one of the first areas where the United 
States will reach initial understandings with its Canadian and Mexican 
counterparts will concern the methodologies to be used for interference 
scenarios for television and future wireless services. We also 
anticipate seeking initial understandings related to the disposition of 
certain television allotments in Canada and Mexico that are currently 
protected under bilateral agreements.
    We intend to design an auction, repacking process and band plan 
that are sufficiently flexible to facilitate a successful auction and 
meet our statutory obligation to preserve broadcast service, while 
taking into account potential international constraints. Any such 
constraints would not result in additional stations going off the air, 
but likely would impact the Commission's ability to clear spectrum.
    As with the DTV transition, we want to ensure consumers still have 
access to over-the-air service to the greatest extent that we can, 
recognizing that in some cases, broadcast stations may choose to 
completely exit the broadcasting business. For those stations that 
choose not to participate in the incentive auction, the act requires 
the Commission to take reasonable efforts to ensure that coverage area 
and population served are retained for those stations subject to a 
channel reassignment in the repacking process. Commission staff 
continue to develop recommendations for the full Commission's 
consideration based on the record developed in the incentive auction 
proceeding.
    In the end, I expect the international consultations related to the 
Spectrum Act will ultimately lead to a better designed and more 
successful incentive auction, and will create opportunities for greater 
spectrum efficiency and band harmonization across North America.
                         universal service fund
    Question. We commend the Commission for the hard work it has 
undertaken in carrying out its Universal Service Fund (USF) and 
Intercarrier Compensation (ICC) reform orders. However, we continue to 
hear from providers in rural areas that the new rules are still 
creating uncertainty and inhibiting new investments limiting deployment 
of new technologies. While acknowledging that reforms to USF and ICC 
are necessary and some current participants will see reductions in 
support, what steps, if any, is the Commission taking to address this 
issue?
    Answer. The Commission's implementation of the USF/ICC 
Transformation Order continues to be guided by three key goals: 
expanding voice and broadband to the millions of unserved Americans, 
particularly in rural areas, while preserving voice and broadband in 
areas that would not be served absent support, increasing fiscal 
responsibility and accountability in high-cost universal service 
spending to ensure the long term sustainability of the universal 
service fund, and setting forth transition periods that recognize 
business realities.
    As we hear from stakeholders about concerns with implementation, we 
will make adjustments as appropriate. For instance, on July 26, 2013, 
the Wireline Competition Bureau (Bureau) adopted an order maintaining 
the regression methodology used in 2013 for 2014, summing the capital 
and operating expense caps. This measure will provide additional 
predictability and certainty for rate-of-return carriers as the Bureau 
works to adjust the benchmarking methodology as directed by the 
Commission through an open and transparent process.
    In addition, the Commission extended the transition for originating 
intercarrier compensation payments, a concern raised by many smaller, 
rate-of-return carriers. In particular, the revised methodology 
accounts for several additional drivers of cost in comparing spending 
between carriers, it takes recent investment into consideration, it 
extends the transition period to give carriers greater time to adjust, 
and it provides a streamlined process to address any concerns about the 
accuracy of carriers' data. The Commission also extended a number of 
reporting deadlines for the smaller carriers. Moreover, the Bureau has 
sought comment whether Connect America should provide support for 
stand-alone broadband services for the smaller carriers--an idea 
proposed by the smaller carriers and their associations. I want to 
assure you that the Commission will continue to work with all 
stakeholders, including rural carriers, throughout the reform process.
                         rural call completion
    Question. While the Committee finds that the FCC's February 2012 
Declaratory Ruling on Rural Call Completion Issues has helped make 
progress toward addressing call completion problems, the problems 
continue to occur. This issue, for both providers and customers, has 
now been continuing without clear resolution for years. What are your 
plans to address this issue? Do you believe the Commission has the 
authority, tools, and resources necessary to resolve this problem?
    Answer. I take rural call completion concerns very seriously and 
the Commission is committed to ensuring reliable telephone service for 
consumers and businesses in rural America. The consequences of the 
problems can be dire, impacting businesses, families and public safety, 
and the Commission is committed to ensuring reliable telephone service 
in rural America.
    The Commission has been attacking this problem on multiple fronts: 
investigating systemic problems with originating long distance 
providers, pointedly reminding long distance providers of their current 
obligations, proposing new Commission rules to address rural call 
completion problems, and acting daily on specific consumer and rural 
carrier complaints. These efforts are coordinated by an inter-bureau 
Rural Call Completion Task Force.
    I also circulated an Order and Further Notice of Proposed 
Rulemaking that will help make sure that calls to rural areas are 
completed, which was approved by the Commission on October 28, 2012. 
The Order enhances the FCC's ability to investigate and crack down on 
this problem while also taking immediate steps that will improve the 
performance of long-distance calls to rural America.
    In addition, earlier this year the Commission's Enforcement Bureau 
entered into a consent decree with long distance provider Level 3. 
Under the consent decree, Level 3 has committed to meeting certain 
benchmarks for completing calls to rural areas and is making a 
significant voluntary contribution to the U.S. Treasury. The 
Enforcement Bureau continues to investigate the call completion 
practices of voice communications providers.
                     t-band mission critical voice
    Question. The Middle Class Tax Relief and Job Creation Act of 2012 
required public safety users of T-band to vacate the spectrum no later 
than 2021. What, if any, impact does the Commission expect this will 
have on public safety mission-critical voice support? If T-Band is 
vacated, does the Commission believe there will be adequate spectrum 
available to public safety users to support mission-critical voice? 
Further, if the spectrum is vacated by public safety users, are there 
remaining hurdles to auctioning T-band for commercial use?
    Answer. Section 6103 of the Middle Class Tax Relief and Job 
Creation Act of 2012 ordered the Commission to reallocate the T-band 
spectrum used by public safety and begin a system of competitive 
bidding to grant initial licenses for use of the spectrum within 9 
years of enactment. Following enactment of the act, the Public Safety 
Bureau and the Wireless Telecommunications Bureau announced a freeze on 
certain forms of licensing in the T-band that could alter the spectrum 
landscape and thereby make implementing section 6109 more costly. The 
Public Safety Bureau and Wireless Telecommunications Bureau also waived 
the narrowbanding requirement for T-band licensees so that they would 
not have to commit resources to narrowbanding T-band systems that would 
eventually need to be relocated. The Bureaus took these steps to 
preserve the T-band status quo as much as possible while the Commission 
considers longer term options for implementing section 6109.
    Earlier this year, the Public Safety Bureau and the Wireless 
Telecommunications Bureau released a public notice seeking comment on 
various issues related to implementation of the act. Among the issues 
raised in the public notice are alternative spectrum for public safety 
licensees that must vacate the T-band and the funding for relocating 
these licensees to that alternative spectrum. Commission staff is 
reviewing the record.
                                 ______
                                 
               Question Submitted by Senator Mike Johanns
    Question. With respect to unlicensed spectrum--particularly that 
which permits consumers with mobile devices to make use of Wi-Fi--to 
what extent is spectrum congestion a problem that the Federal 
Communications Commission (FCC) intends to continue to address? What 
additional actions should the FCC take to address this issue?
    Answer. The Nation's demand for unlicensed services continues to 
increase dramatically, and we need more spectrum to support these 
services. The 2.4 GHz band, which has been so critical to the success 
of Wi-Fi and other unlicensed technologies, is increasingly congested 
particularly in major cities. Densely populated centers are the most 
expensive geographic areas to deploy licensed networks. For that 
reason, earlier this year the Commission issued a Notice of Proposed 
Rulemaking that proposes to make up to an additional 195 megahertz of 
spectrum in the 5 GHz band be made available for unlicensed services. A 
number of technical issues must be resolved, which requires 
coordination with the National Telecommunications and Information 
Administration (NTIA) to examine the impact these proposed rules may 
have on Federal users in the 5 GHz band, before final rules can be 
adopted. I am confident the Commission will resolve these issues 
quickly. The sooner we solve these issues, the sooner American 
innovation can show leadership in developing the 5 GHz band for 
unlicensed services.
                                 ______
                                 
            Questions Submitted by Senator Richard C. Shelby
                accountability for the lifeline program
    Question. Chairwoman Clyburn, in a recent speech, you remarked, 
``One fair criticism of the Lifeline program in the past was that, 
after the change to also support mobile service, the program was 
subject to fraud and abuse.'' Such fraud and abuse includes reported 
cases where households have exceeded the limit of one Lifeline service 
per household, or have received a subsidy without being qualified for 
one. Although the Federal Communications Commission (FCC) has 
highlighted the problem of fraud and abuse in the program, it has yet 
to launch the ``National Lifeline Accountability Database,'' a tool 
announced in January 2012 that will verify household compliance with 
data collected by subscribers. The ``2012 Lifeline Year-End Savings 
Report'' mentions that this database will be ``operational'' in 2013.
    What is the current status of the National Lifeline Accountability 
Database? When will it become fully ``operational''?
    Answer. In the 2012 Lifeline Reform Order, the Commission 
established the National Lifeline Accountability Database (NLAD) to 
detect, prevent and eliminate duplicative support in the Lifeline/Link 
Up program. The NLAD is a key part of the Commission's reform efforts 
to cut fraud and abuse in the Lifeline program. The Universal Service 
Administrative Company, or USAC, administers the Lifeline program on 
behalf of the FCC. USAC has announced its selection of the vendor for 
NLAD. On October 23, 2013, the FCC's Wireline Competition Bureau 
released a public notice informing eligible telecommunications carriers 
(ETCs) receiving Lifeline support that the NLAD will be ready to accept 
subscriber information by December 2013.
    Question. How will the FCC use the data it receives from this 
database to ensure that fraud and abuse are significantly curbed?
    Answer. The NLAD database will utilize subscriber data provided by 
ETCs to identify and reduce current instances of duplicative support. 
All ETCs must query the NLAD prior to attempting to receive 
reimbursement from the fund to determine whether a prospective 
subscriber is currently receiving a Lifeline service from another 
carrier; and whether anyone else living at the prospective subscriber's 
residential address is currently receiving a Lifeline service. If the 
NLAD indicates that a prospective subscriber is currently receiving a 
Lifeline service, the ETC must not provide and shall not seek or 
receive Lifeline reimbursement for that subscriber.
    Question. In addition, Chairwoman Clyburn, in your speech, you 
stated that reforms to the Lifeline programs ``are working as 
intended'' and ``are on track to save the Universal Service Fund an 
incredible $2 billion, by the end of 2014.''
    What metrics does the Commission use to demonstrate that the 
reforms are currently ``working as intended''?
    Answer. The Commission is very proud of the reforms that have been 
implemented in the Lifeline program, but we continue to strive to 
eliminate all waste, fraud, and abuse from the program. Through 
specific targeted reforms to the Lifeline program, the Commission is on 
track to meet its projected target of saving $2 billion through 2014 
compared to what would have been spent absent reform. The following are 
examples of savings to the program that have resulted from 
implementation of the reforms. To date, the Commission has saved over 
$180 million through the use of checks to prevent reimbursement for 
duplicate subscribers. In addition, at least $400 million was saved in 
2013 from the de-enrollment of as many as 4 million subscribers through 
the 2012 recertification process. An additional $30 million will be 
saved on an annualized basis from the de-enrollment of over 275,000 
subscribers for non-usage in 2012. Through the partial elimination of 
the Link Up program, the Commission realized over $93 million in 
savings in 2012 as Link Up expenditures dropped from roughly $14 
million per month in May 2012 to less than $200,000 per month in 
December 2012.
    Question. Where do the projected savings of $2 billion come from, 
specifically? Will the Commission use the savings to reduce the 
Universal Service Fund contribution factor, a fee that service 
providers pass along to consumers?
    Answer. The Lifeline program is on track to save the estimated $2 
billion by the end of 2014. These savings will be achieved through 
reform and modernization of all aspects of the program. The reforms 
include:
  --requiring consumers to provide proof of eligibility at enrollment;
  --requiring consumers to certify that they understand key program 
        rules and to recertify annually their continued eligibility for 
        support;
  --limiting the Lifeline benefit to one per household;
  --eliminating Link Up support for all providers except those that 
        receive high-cost universal service support on Tribal lands;
  --establishing a uniform, nationwide floor for consumers' eligibility 
        to participate in the program, which States may supplement;
  --enhanced requirements concerning marketing and advertising 
        practices of supported carriers; and
  --putting in place a robust audit requirement for providers entering 
        the Lifeline program and an ongoing independent audit 
        requirement for providers drawing more than $5 million from the 
        Fund.
    In addition, the FCC, in partnership with USAC, has also identified 
and cut substantial amounts of duplicative Lifeline support, resulting 
in the de-enrollment of hundreds of thousands of subscribers with more 
than one Lifeline supported service. These reforms are in place, are 
working as intended, and are cutting waste, fraud and abuse from the 
program while ensuring that low-income consumers have access to basic 
voice communications. Finally, to the extent Lifeline reforms 
contribute to an overall reduction in the contribution factor, 
consumers would benefit from those savings.
    Question. Currently, Lifeline is the only program funded by the 
Universal Service Fund that does not operate under a cap on the funds 
available for distribution to eligible telecommunications providers. 
Spending on the program has grown significantly from $819 million in 
2008 to an estimated $1.8 billion in 2013.
    Given the growth trajectory in recent years, is the Commission 
considering placing a cap on funds distributed from the Universal 
Service Fund for Lifeline? Why or why not?
    Answer. When we adopted reforms in early 2012, the Commission 
unanimously determined that it was appropriate to assess the impact of 
the reforms before moving forward with a budget. The Commission 
unanimously opted for a savings target as an initial matter. We 
exceeded the $200 million savings target in 2012 and are on track to 
save $2 billion by the end of 2014. The $9.25 support amount that the 
Commission adopted in the Order is an interim rate, and there is a 
Further Notice for comment on the optimal level of support for voice 
services. We continue to monitor the impact of our reforms and 
determine whether additional reforms are necessary.
    Question. In the wake of Hurricane Katrina, the FCC had 
``conditionally granted TracFone's petition for forbearance from the 
facilities requirement'' to provide Lifeline service. In April 2008, 
the Commission designated TracFone as an ``Eligible Telecommunications 
Carrier'' for Lifeline on a more permanent basis, which then allowed 
other telecom providers to access Lifeline funding without owning 
facilities.
    Given that there is no longer a requirement for providers who 
receive Lifeline subsidies to own facilities, does the Commission have 
a limit on the number of new servicers who are eligible for Lifeline 
subsidies? Why or why not?
    Answer. The States have an important role in overseeing the 
Lifeline program--they have been partners of the FCC in reform and in 
oversight and enforcement. Under section 214(e)(2) of the 
Communications Act, States designate providers as ETCs to participate 
in the Lifeline program, and to receive Lifeline support, including, in 
most cases, wireless ETCs. Currently, all but 10 States and the 
District of Columbia handle the designation of Lifeline-only wireless 
ETCs to participate in the program. States have broad authority to 
conduct thorough reviews of ETC applications.
    In addition to the statutory requirements, the FCC's reforms 
require that providers demonstrate that they are ``financially and 
technically capable of providing Lifeline service in compliance with 
program rules.'' In deciding whether to designate a provider to 
participate in Lifeline, a State or the FCC must, among other things, 
examine how long the company has been in business, whether the provider 
intends to rely exclusively on universal service disbursements to 
operate its business, whether the provider receives or will receive 
revenue from other sources, and whether it has been subject to 
enforcement action or ETC revocation proceedings in any State. As part 
of the Commission's ongoing commitment to combat waste, fraud, and 
abuse in the program, all non-facilities-based providers seeking to 
become Lifeline-only ETCs are now required to have a compliance plan 
approved by the FCC staff before being designated as an ETC by a State 
or the FCC. FCC staff thoroughly reviews these plans to ensure that 
providers have procedures in place to adhere to the new stringent 
program requirements.
                               connected
    Question. The White House's June 6, 2013 press release announcing 
the President's ConnectED initiative calls on the FCC to ``modernize 
and leverage its existing E-Rate program'' in order to ``connect 99 
percent of America's students to the Internet through high-speed 
broadband and high-speed wireless within 5 years.''
    How would the White House's initiative, ConnectED, differ from what 
the E-Rate program currently offers?
    Answer. On July 19, 2013 the Commission issued a Notice of Proposed 
Rulemaking (NPRM) seeking comments on modernizing the E-Rate program. 
As part of the E-Rate Modernization NPRM, the Commission sought 
comments on adopting a goal for the program of ensuring that schools 
and libraries have affordable access to 21st century broadband that 
supports digital learning. In proposing that goal, the Commission also 
sought comment on how to measure its success in reaching that goal, 
and, among other things, specifically sought comment on the specific 
speed goals laid out in the President's ConnectEd initiative. The E-
Rate program does not currently have specific broadband connectivity 
goals for our Nation's schools and libraries.
    Question. Would the White House proposal to ``modernize and 
leverage'' the E-Rate program add an additional cost burden to the 
Universal Service Fund? Is this a feasible goal given the fact that the 
E-Rate program operates under a funding cap adjusted each year based on 
an inflation benchmark?
    Answer. The E-Rate Modernization NPRM proposes that one of the 
goals of the program should be maximizing the cost-effectiveness of the 
E-Rate program. Consistent with that proposed goal, the NPRM seeks 
comment on whether the other proposed goals can be achieved within the 
current funding cap, and how best to do so. For example, the NPRM seeks 
comment on phasing out support for certain legacy services, such as 
paging services, and on whether increased use of consortium purchasing 
or bulk buying can be used to make E-Rate purchases more cost 
effective.
                                 ______
                                 
            Questions Submitted to Hon. Jessica Rosenworcel
                Questions Submitted by Senator Tom Udall
           public safety communications and interoperability
    Question. The origins of the Federal Communications Commission's 
(FCC's) public safety mission pre-date the creation of the agency. In 
1912, Congress enacted legislation in response to radio distress call 
failures during the Titanic sinking. Twelve years ago, the terrorist 
attacks of 9/11 exposed a radio interoperability problem that put first 
responders' lives at additional risk. Some police and fire crews could 
not communicate via radio handsets with each other. The FCC has a 
strategic goal to promote the availability of critical communications 
infrastructures that are reliable, interoperable, redundant, and 
rapidly restorable.
    How would you rate the FCC's attainment of this strategic goal? 
What is needed to address any deficiencies and on what timetable?
    Answer. In public service, public safety is paramount. It is our 
first and highest duty. For the Commission, that direction comes from 
the very beginning of the Communications Act, where Congress instructed 
the agency to make available ``to all the people of the United States. 
. . rapid, efficient, Nation-wide, and world-wide wire and radio 
communication service'' in order to promote the ``safety of life and 
property[.]''.
    Natural disasters and other emergencies not only cause immeasurable 
hardship on those directly affected, they can wreak havoc on our 
communications systems. When these systems fail, the Commission has a 
duty to identify why, and a duty to consider policy changes that can 
prevent such failures from happening again.
    In my time at the Commission, I believe that we have made 
significant progress. For instance, when the Derecho storm struck the 
Mid-Atlantic and Midwest, we learned that too many 9-1-1 calls were not 
answered. I immediately called for a staff investigation into what 
happened. Our findings were striking. Seventy-seven public safety 
answering points spanning six States lost some connectivity. This 
affected more than 3.6 million people. Seventeen 9-1-1 call centers 
lost service completely, leaving over 2 million people without access 
to 9-1-1.
    As a result of our investigation into these communications failures 
during the Derecho, we now have more clarity about what happened. We 
know that back-up generators and switches failed, power failures 
undermined monitoring capabilities, 9-1-1 centers were left in the dark 
without service--and without notice. Even better, we have proposals to 
correct these problems which I expect will be Commission policies in 
the very near future.
    The Commission also has a duty to help bring forward the next 
generation of 9-1-1 communications. New technologies are remaking our 
commercial and civic life. They have the potential to remake emergency 
communications. But if we are honest, we must acknowledge that all of 
these new opportunities to improve emergency communications come hand-
in-hand with new challenges.
    To better understand these challenges, I have visited over a dozen 
9-1-1 call centers in communities across the country. In these visits, 
I am always amazed by the individuals I see taking emergency calls. I 
am always struck by their grace under pressure. But I am also struck by 
the number of systems they use for a single call and the sheer volume 
of information they have to understand and process.
    In the not so distant future, this flood of information could turn 
into a digital deluge of photographs and videos. It is here that so-
called cloud computing holds real promise. I believe that by moving 
systems into the cloud, we can make information available to the right 
people at the right time. For instance, a call taker may not need to 
see the video of a car accident. In fact, the video might even be 
distracting. But for a police officer being dispatched to the scene, 
the video could be vital. By uploading information to the cloud, the 
information can be available for the people who need it, when they need 
it.
    While the Commission does not have the resources to provide direct 
funding for 9-1-1 call centers, help may be on the way. The Middle 
Class Tax Relief and Job Creation Act reestablished the National E-9-1-
1 Implementation Coordination Office and directed it to conduct a 
comprehensive study of next generation 9-1-1 costs. More than that, 
this law provides up to $115 million in grant funding for next 
generation 9-1-1 projects, based on revenues from the Commission's 
upcoming spectrum auctions.
    But our work is not done. The networks we rely on every day are 
changing. Today fewer consumers rely on traditional wireline 
telephones. One in three households now relies exclusively on wireless 
phones. On top of that, digital Voice over Internet Protocol (VoIP) 
services are growing fast. Unlike their wireline predecessors, wireless 
and VoIP services are dependent on commercial power. This means we need 
to start understanding what happens to essential services when the 
power goes out. Specifically, we need to ask hard questions about back-
up power and how to make our networks more dependable when we need them 
most. After all, technology evolves but our need to stay connected does 
not. So it is time for an honest conversation about network reliability 
in the wireless and digital age. This must be an essential feature of 
our ongoing policy work on the IP transition.
    Finally, there is another component to this discussion--consumers. 
We migrate so much of our lives to our wireless devices, premised on 
the idea that they are always on. But emergencies can take the most 
connected among us and turn us into wireless teetotalers. The 
Commission should take on a role in helping consumers prepare for the 
next event with longer-lasting back-up batteries, solar chargers, and 
more.
                           rural telemedicine
    Question. Telehealth technologies can greatly enhance rural medical 
services. New Mexico is a large State with many residents living far 
from urban areas. So telehealth sometimes offers the best avenue to 
help meet healthcare needs. That is why I am working in a bipartisan 
manner with Senator Thune and others to help reduce some of the 
barriers to telemedicine.
    Could you share your thoughts on improving the Rural Health Care 
program as part of broader Universal Service reforms? I'm interested in 
hearing what you believe those barriers are and how they can be 
overcome.
    Answer. Telehealth and telemedicine technologies have the power to 
enhance the quality of healthcare, improve medical outcomes, and lower 
costs. In particular, in rural areas, telemedicine technologies can 
collapse distance and time, linking rural patients to expert physicians 
in urban areas while avoiding the risks and costs of transport.
    In December 2012, the Commission adopted an Order (FCC 12-150) that 
updated our existing rural healthcare universal service mechanism, 
which makes available $400 million to rural healthcare providers for 
broadband services. I fully supported this effort. The newly updated 
Healthcare Connect Fund encourages healthcare providers from both rural 
and urban areas to join together in consortia. This allows rural 
communities to better access specialists in urban areas, while 
fostering higher capacity broadband services at lower costs.
    I believe this program will become a great resource to support the 
broadband networks needed to make telemedicine a reality in rural 
areas. But there is still work to be done. Beyond networks and 
bandwidth, broader policy factors like restrictive State licensing 
rules and limitations on insurance reimbursement can impact the 
ultimate success of telemedicine. So going forward, it is my hope that 
the Commission can work with its Federal and State partners to ensure 
that our efforts to make telemedicine successful are not impeded by 
dated licensing regimes and reimbursement policies.
               national lifeline accountability database
    Question. Your testimony notes that the Commission adopted reforms 
to the Lifeline program to help low income persons get telephone 
service. As you know, Lifeline dates to the Reagan administration and 
was expanded to include wireless phone service during the presidency of 
George W. Bush. Here is what one Lifeline user from the Navajo Nation 
had to say: ``I got help when I fell and broke my ankle. I called an 
ambulance and went to the doctor.'' Another wrote, ``I've been stranded 
during bad winter weather, and my Lifeline has helped me . . . .'' So 
this initiative can indeed be a ``Lifeline'' for low income persons in 
a time of emergency or when applying for a job. Yet it is important 
that the Commission continue reforms to guard against waste, fraud, and 
abuse. One of the recent Lifeline reforms is a new National Lifeline 
Accountability Database. This database will help weed out ``double 
dipping'' if there are duplicate participants receiving Lifeline 
assistance.
    Can I have your assurance that the Commission is committed to 
implementing this database as soon as possible?
    Answer. I am fully committed to the speedy implementation of the 
Commission's ongoing Lifeline reforms. The National Lifeline 
Accountability Database requirements were adopted in the Commission's 
Lifeline Reform Order in January 2012 (FCC 12-11), which predated my 
arrival at the Commission. Staff has reported to me that the National 
Lifeline Accountability Database will begin accepting carrier 
information by the end of this year. The first five States to be loaded 
into the database are Oklahoma, Arkansas, Louisiana, Maryland, and 
Washington, with all States projected to be loaded by the end of the 
first quarter of 2014. Commission staff, in conjunction with the 
Universal Service Administrative Company, has already held a series of 
webinars for industry and State commissions regarding the database 
requirements.
                            lifeline reform
    Question. I understand that the Commission may be reviewing a 
proposal to prohibit in-person distribution of phone handsets to 
Lifeline customers. This could negatively impact Lifeline-eligible 
residents of Tribal lands in New Mexico. For example, eligible phone 
companies would not be able to use mobile stores to reach residents 
from remote Tribal areas and provide them with phones. Moreover, some 
remote areas do not have postal service for regular mail delivery of a 
handset.
    As the Commission considers proposals to further modify the 
Lifeline program, will you carefully take into account the special 
circumstances facing residents on Tribal lands where the digital divide 
is so acute?
    Answer. The Lifeline program is an important part of keeping 
everyone in this country connected, especially for those residing in 
Tribal lands. Telecommunications deployment in Tribal lands for both 
basic and advanced services has long lagged behind the rest of the 
country. For this reason, the Lifeline program has been particularly 
important for tribal communities. After all, having access to telephone 
service is essential for calling emergency services, being able to 
secure a job, taking care of loved ones, and managing routine 
interactions with government and with healthcare providers. However, 
across the board, all of our universal service programs merit regular 
review, attention, and care. To this end, the agency must continuously 
evaluate the Lifeline program to ensure that it is meeting its intended 
purpose under section 254(b) of the Communications Act--that quality 
voice services are available at affordable rates for low-income 
consumers throughout the Nation.
    As noted above, the Commission began reform of the Lifeline program 
in January 2012, before my arrival at the agency. These reforms have 
already shown significant reduction of waste, fraud, and abuse in the 
program. But our work is not yet done. The specific proposal to 
prohibit in-person distribution of handsets has not come before my 
office. However, as the Commission continues to consider reforms to the 
Lifeline program, I am committed to taking into account the unique 
circumstances that impact Tribal lands. Apart from making good sense, 
this is what law requires us to do.
                     e-rate 2.0/connected proposal
    Question. E-Rate is an important education technology program to 
help schools connect to the Internet. In New Mexico, E-Rate helps 915 
schools and 69 libraries. More than 330,000 school children in New 
Mexico benefit from this support. I am excited about potential 
innovations to help improve student achievement. With newer 
technologies to enrich the learning experience, from distance learning 
to massive open online courses.
    Could you expand on your testimony about how E-Rate could be 
modernized to better meet the needs of schools in the current broadband 
era?
    Answer. In New Mexico and across the country, E-Rate has brought 
connectivity to our Nation's schools and libraries. In fact, over the 
course of 17 years, E-Rate has helped connect more than 95 percent of 
public school classrooms to the Internet. This is impressive. But there 
is more work to be done. Because we are quickly moving from a world 
where what matters is connectivity to a world where what matters is 
capacity. Already, year-in and year-out, the demand for E-Rate support 
is double the roughly $2.3 billion the Commission now makes available 
annually. Moreover, the agency's own survey indicates that 80 percent 
of schools and libraries believe that their broadband connections do 
not meet their current needs.
    Those needs are only going to grow. School administrators are 
facing tough choices about limited bandwidth in the classroom. How to 
divvy it up, what grades and classrooms get it, and what programs they 
can run on it. This means that without adequate capacity our students 
are going to fall short. For my part, I believe that it is time for E-
Rate 2.0. We need to protect what we have already done, build on it, 
and put this program on a course to provide higher speeds and greater 
opportunities in the days ahead.
    In July 2013, the Commission began this process with a rulemaking 
proceeding. I believe we need to focus on two basic issues if we want 
to see E-Rate 2.0 up and running fast: setting capacity goals and 
simplifying the application process.
    First, E-Rate 2.0 must be built on clear capacity goals. The fact 
that we have connected so many schools and libraries with E-Rate is 
good. But the job is not done. We can fix this with capacity goals. By 
the 2015 school year, every school should have access to 100 megabits 
per 1,000 students. Before the end of the decade, every school should 
have access to 1 gigabit per 1,000 students. Libraries, too, will need 
access on par with these capacity goals. To get to these goals, we need 
to take a hard look at the existing program. We need to collect better 
data from each of our applicants about what capacity they have and what 
capacity they need. Then I think we can make adjustments to how we 
prioritize funding to ensure that schools shorter on capacity get 
greater access to support.
    Furthermore, capacity goals will signal to markets that the United 
States is serious about making digital education a priority. This will 
yield more opportunities through greater scale for new services, 
teaching tools, and devices--everywhere. And the spillover effect for 
this kind of broadband in local communities is substantial. Building 
gigabit capacity to anchor institutions like schools and libraries is 
the ticket to gigabit communities and the ticket to digital education 
and economic growth.
    Second, we need ideas from stakeholders far and wide about how to 
simplify the application process. The E-Rate process is complex. We 
need to take a fresh look at how the complexity of our existing system 
can deter small and rural schools from applying. To this end, in our 
rulemaking we ask about the feasibility of multi-year applications. 
This could substantially reduce paperwork and administrative expense. 
We also ask how to encourage greater use of consortia applications. 
This could mean greater scale and more cost-effective purchasing. I 
think these are good ideas. We should be open to others--especially 
from those who know the challenge of filling out E-Rate forms year-in 
and year-out.
  tribal lands' digital divide and government-to-government relations
    Question. I want to thank you for your efforts to tackle the 
digital divide facing Native American communities. Telephone access on 
Tribal lands still lags far behind the rest of the country. Broadband 
access may be as low as 10 percent on Tribal lands. This appalling 
digital divide creates real hardships for people, particularly in 
emergency situations. That is why the work of the Commission's Office 
of Native American Affairs and Policy is so important. Engagement with 
Tribes on a government-to-government basis is critical to solving 
communications challenges in Indian Country. This subcommittee's 
appropriations bill instructs the Commission to develop a plan to fully 
implement its existing Statement of Policy on Establishing a 
Government-to-Government Relationship with Indian Tribes.
    Will you support a Commission effort to develop a plan to implement 
the Commission's statement of policy on government-to-government 
relations with Indian Tribes?
    Answer. Absolutely. Telecommunications deployment in Indian Country 
for both basic and advanced services lags behind the rest of the 
country. This is a troubling and persistent problem that requires 
attention. In March 2013, the Federal Communications Commission's 
Office of Native Affairs and Policy issued a report that laid out the 
Commission's priorities for tribal consultation and coordination, 
including the upcoming Tribal Mobility Fund auction and implementing 
the tribal engagement obligation that is part of the Commission's new 
universal service fund reforms. I fully support these efforts. Going 
forward, I will continue to support the Office of Native Affairs and 
Policy's efforts to implement the Commission's statement of policy on 
government-to-government relations with Indian Tribes.
                  bill shock and wireless ``cramming''
    Question. I authored legislation to prevent cell phone ``bill 
shock,'' unexpected increases in one's monthly bill. So I am pleased 
that the Commission worked with wireless providers to come to a 
voluntary agreement on free consumer alerts for cell phone users. 
Millions of American wireless customers now benefit from notifications 
to help avoid ``overage'' charges. But I am still concerned about some 
practices that can hurt consumers, such as ``cramming.'' Cramming is a 
practice in which telephone customers are billed for enhanced features 
such as voice mail, caller-ID and call-waiting that they have not 
ordered. The Federal Trade Commission reached a settlement with a 
company that apparently ``crammed'' unauthorized charges onto cell 
phone bills for phony anti-virus scans that showed up when smart phone 
users played the Angry Birds game app.
    What is the FCC doing to address these consumer issues? Is the 
range of remedies available to the FCC adequate to meaningfully address 
these problems? Has the prevalence of these unauthorized practices been 
reduced in recent years? What recourses does a customer have if 
victimized by one of these deceptive practices?
    Answer. In 2011, the Senate Committee on Commerce, Science, and 
Transportation found that telephone companies had been placing 
approximately 300 million third-party charges on phone bills every 
year, costing consumers more than $2 billion. Moreover, the Committee 
investigation found that a vast majority of the charges were fraudulent 
fees being crammed on to consumer bills.
    In response to these findings, the Commission took steps before I 
arrived to prevent cramming from taking place on wireline phones. 
Specifically, the Commission adopted rules (FCC 12-42) requiring 
telephone companies to notify subscribers of options to block third-
party charges. It also adopted policies to make third-party charges 
more apparent on phone bills.
    These rule changes have been effective. Our data reflects a 
reduction in cramming since these rules were put in place. But the 
rules the FCC adopted were limited to wireline phones. Now, however, my 
understanding is that approximately 60 percent of cramming complaints 
are for wireless phone bills. I therefore believe that the time for the 
Commission to act to end wireless cramming is now--before the 
fraudulent practice costs consumers billions more dollars and 
immeasurable aggravation.
                      fcc consumer complaints data
    Question. I would like to ask you about ways to improve how the FCC 
can better help consumers. The Commission receives consumer complaints 
and other public feedback through its website and other means. These 
data, however, are only made public on a very limited basis.
    What steps could the Commission take to facilitate public access to 
this complaint data? How can new technologies potentially help the 
Commission use this information to identify important issues for an 
official action or response?
    Answer. I agree that our consumer complaint process could be 
improved to better help consumers. In my time at the agency, it has 
become apparent that while the digital age advances, our consumer 
complaint process is stuck in the analog era. It's time for an upgrade.
    The Commission receives approximately 400,000 complaints and 
inquiries annually. Dedicated Commission staff process these complaints 
and inquiries. But our consumer complaints online interfaces are dated. 
I believe we need to improve these interfaces and the information we 
provide to consumers.
    Furthermore, the Commission should make the consumer data we 
collect more open to the public. Currently we publish our consumer 
complaint data quarterly, in snapshot form. The Commission should 
consider making its data more open, in machine-readable formats, and if 
possible, with application programming interfaces (APIs) and common 
metadata tagging schemes. We should use this data to inform the 
Commission's policy activities. Going forward, with more granular 
public data, the Commission or members of the public could slice and 
dice these numbers and identify meaningful trends that deserve our 
attention, our concern--or even our praise.
              tv blackouts during retransmission disputes
    Question. During a recent dispute over retransmission fees, nearly 
3 million Time Warner Cable customers lost access to CBS programming. 
In response, you stated that media companies should ``accept shared 
responsibility'' for putting consumers' interests above other interests 
during such disputes.
    Given the FCC's authority under section 325 of the Communications 
Act, what more can the FCC do to better protect consumers during such 
retransmission disputes?
    Answer. The vast majority of retransmission and carriage 
negotiations proceed uneventfully. But we have had some disputes that 
were not resolved swiftly. It can mean that when a cable or satellite 
customer turns on the television to watch the news, the game, or their 
favorite programming, they get stuck with a dark screen. This is not 
right. When consumers get caught in the crossfire, they become 
collateral damage in the dispute between these companies.
    If the parties can't reach resolution after some period of time, 
the FCC should use its ``good faith'' authority under the law to help 
bring an end to this disagreement and prevent long blackouts like this 
from happening. I don't think long blackouts are good for consumers. 
Furthermore, I believe that when they happen for extended periods of 
time consumers are owed a refund.
    At the same time, I think it is important to recognize that if 
these disputes are happening more frequently or getting more attention 
right now, it is at least in part because the media landscape is 
changing. There are now many more platforms--digital platforms--over 
which programming companies may want to make their content available. 
That is a good thing--because more platforms mean more opportunities 
and more choices for consumers to view content of all kinds.
                  protecting persons with disabilities
    Question. The 21st Century Communications and Video Accessibility 
Act was passed by Congress in 2010 to update our Nation's 
telecommunications protections for people with disabilities. The law 
contains groundbreaking protections to enable people with disabilities 
to access broadband, digital and mobile innovations. There are 
approximately 36 million Americans with hearing loss and 25 million 
with a significant vision loss. In 2009, a study conducted by the FCC 
revealed that people with disabilities are less likely to use Internet-
based communications technologies: 65 percent of Americans have 
broadband at home, but only 42 percent of Americans with disabilities 
have these services. This gap is due in part to physical barriers that 
people with disabilities confront in using the Internet. It is for this 
reason that the National Broadband Plan, adopted by the Commission in 
March 2010, recommended that Congress and the FCC should modernize 
accessibility laws to keep pace with broadband technologies.
    What is the level of compliance with the communications provisions 
of the 21st Century Communications and Video Accessibility Act (Public 
Law 111-60), enacted October 8, 2010? What is the status of FCC 
implementation of this law? To what extent do accessibility barriers 
continue to exist for persons with disabilities?
    Answer. The 21st Century Communications and Video Accessibility Act 
was an historic legislative effort to update our Nation's 
communications policies and provide greater protections for people with 
disabilities. I am proud that the Commission has devoted significant 
resources to implementing this important law.
    To date, the agency has reinstated video description rules, 
developed policies for Internet protocol (IP) closed captioning and 
accessibility to emergency information, put in place a new deaf-blind 
equipment distribution program, updated its telecommunications relay 
service (TRS) rules, updated its hearing aid compatibility policies, 
created a clearinghouse for information about equipment services, and 
taken action on emergency assistance through short message service 
(SMS) texting. Work is also underway on rules for accessible user 
interfaces and program guides.
    All of this means that many requirements of this law are just now 
taking effect. So going forward, it is essential to monitor the 
effectiveness of our actions. That is because enforcement is just as 
important as implementation. So to make sure these policies do the good 
Congress intended, our monitoring must be constant, and our oversight 
vigilant. This oversight should include an effort to identify what 
accessibility barriers continue for people with disabilities even after 
passage of this law. In the past, for instance, the retail availability 
of accessible devices has been uneven. In the end, it must be our goal 
to make sure that digital age opportunity is extended to everyone in 
this country--including those with disabilities.
                           spectrum research
    Question. During the hearing, there was a brief discussion of the 
need for further research into how to harness and efficiently use radio 
spectrum. I would like to ask how the Commission can help spur 
innovation when it comes to maximizing use of radio spectrum for 
commercial uses. Earlier this month, the National Aeronautics and Space 
Administration (NASA) launched the Lunar Atmosphere and Dust 
Environment Explorer (LADEE). This mission includes a demonstration of 
two-way, high rate laser communications for space communications. While 
orbiting the moon, LADEE will communicate at broadband speeds with a 
receiver at the White Sands Missile Range in New Mexico. Such optical 
communications technology is similar to fiber optics but without the 
``fiber.'' Although such breakthrough technology faces technical 
challenges for terrestrial deployment, it is an example of spectrum 
research with enormous potential.
    How can the Commission encourage and promote further research into 
innovative spectrum technologies?
    Answer. Our airwaves are infrastructure. Though they are invisible, 
they are a national resource. We must put them to use in ways that are 
smart, efficient, and--true to statute--consistent with the public 
interest. But the demands on our airwaves are growing at breathtaking 
speed. We now have more wireless phones than people. More than half of 
those phones are smartphones. One in three adults now owns a tablet 
computer. All of these devices are using more of our airwaves than ever 
before.
    But what we do today with mobile is only the tip of the proverbial 
iceberg. According to recent projections, in the next 5 years, mobile 
data traffic will be 13 times what it is right now. Moreover, what will 
emerge in the next few years is a mountain of 50 billion wireless 
connected devices and a whole brave new world of the Internet of 
Things.
    To respond successfully to these seismic changes the Commission 
must encourage wireless innovation. Innovation will take three forms--
spectrum policy, topology, and technology. With respect to spectrum 
policy, the Commission is on its way to conducting the world's first 
incentive auctions. With respect to topology, the Commission has taken 
steps to expand the use of small cells, including in the 3.5 GHz band.
    But some of the most unheralded work the Commission is doing is on 
the third component of wireless innovation, technology. New 
technologies do not arrive on the scene without exhaustive study. So 
the Commission has adopted rules that allow investigation of new 
equipment through experimental licenses. These licenses have helped 
produce a wide array of new technology, such as systems to support 
rocket launches, patient monitoring equipment, and new robotic 
technology for the armed forces.
    The Commission recently updated its rules to further expedite 
wireless experimentation, providing more up front and early opportunity 
to innovate. The new rules should provide more power to explore at 
research laboratories and universities. But to fully realize the 
potential of this research, the Commission must take steps to bring new 
devices to the public quickly. This is why, for the first time in over 
a decade, we are beginning to take a serious look at how new radio 
equipment is approved. Earlier this year, the Commission initiated a 
proposed rulemaking designed to expedite the equipment authorization 
process. Right now, new devices can take months to make it through our 
certification process. Because the number of devices in this process is 
expanding, the Commission must act to update its processes to meet this 
demand. By moving new devices through our approval process more quickly 
we can put them on the market sooner. Moreover, I think combining 
streamlined equipment authorization with new experimental licenses 
could provide a powerful jolt to wireless innovation.
                                 ______
                                 
            Questions Submitted by Senator Richard J. Durbin
                         northern border issues
    Question. In November of last year I wrote to then Chairman of the 
Federal Communications Commission (FCC) Julius Genachowski on the 
importance of transparency as we conduct the first ever voluntary 
incentive auction. An important step to ensuring a successful auction 
is the completion of coordination with Canada in markets such as 
Chicago. What is the status of coordinating incentive efforts with 
Canada, and are there particular issues that still yet need to be 
resolved before moving forward?
    Answer. The Middle Class Tax Relief and Job Creation Act requires 
that the Commission take ``all reasonable efforts'' to ensure that 
broadcast stations that are repacked as part of the incentive auction 
retain geographic and population coverage. The law also specifically 
directs the agency to coordinate with Canada and Mexico during this 
process.
    My understanding is that the Commission and State Department have 
been engaged in on-going discussions with both Canada and Mexico on 
border issues related to the incentive auction. There is reason to 
believe that we will have sufficient arrangements in place before the 
auction, especially given the history of a good working relationship 
with Canada.
    Ultimately, the Commission must abide by our international 
agreements with both countries. Our auction process, repacking process, 
and band plan must be designed to be sufficiently flexible to 
facilitate a successful auction and meet our statutory obligation to 
preserve broadcast service, while taking into account potential 
international constraints.
    Of course, it is important to note that this is not a static 
effort, but a process. Coordination must be continuous. We must be in 
an ongoing dialogue with both our northern and southern neighbors to 
make sure that our spectrum interests are coordinated and that 
opportunities to use this resource are maximized.
                         universal service fund
    Question. We commend the Commission for the hard work it has 
undertaken in carrying out its Universal Service Fund (USF) and 
Intercarrier Compensation (ICC) reform orders. However, we continue to 
hear from providers in rural areas that the new rules are still 
creating uncertainty and inhibiting new investments limiting deployment 
of new technologies. While acknowledging that reforms to USF and ICC 
are necessary and some current participants will see reductions in 
support, what steps, if any, is the Commission taking to address this 
issue?
    Answer. As you note, over a year and a half ago, the Commission 
took historic steps to update its high-cost universal service fund and 
intercarrier compensation system. Though it predated my arrival at the 
Commission, I commend my colleagues for their effort. They refocused 
the high-cost universal service system from last century's technology 
to the broadband and wireless challenges of this century. They put it 
on a budget. They also increased accountability throughout.
    But I worry that our reforms to the high-cost universal service 
system are extremely complex. I fear that this complexity can deny 
carriers dependent on them the certainty they need to confidently 
invest in their network infrastructure. So when opportunities arise to 
simplify our rules in a manner that is fiscally sound, good for rural 
consumers, and bound to inspire investment--we should seize them.
    Recently, the Commission has taken steps to increase certainty for 
rural providers. In February 2013, we adopted changes to our regression 
model to provide rate of return carriers with additional flexibility to 
meet our new limits. (FCC 13-16) We did it when we adjusted our rules 
to distribute a second round of incremental support from the first 
phase of the Connection America Fund for price cap carriers. (FCC 13-
73) And we did it when we determined to freeze the regression model for 
1 year until we get better data to make further adjustments. I am 
willing to make further changes when doing so simplifies our rules, 
does not break our budget, and brings better service and more 
investment to rural communities.
                         rural call completion
    Question. While the Committee finds that the FCC's February 2012 
Declaratory Ruling on Rural Call Completion Issues has helped make 
progress toward addressing call completion problems, the problems 
continue to occur. This issue, for both providers and customers, has 
now been continuing without clear resolution for years. What are your 
plans to address this issue? Do you believe the Commission has the 
authority, tools, and resources necessary to resolve this problem?
    Answer. Failure to complete calls to rural subscribers can cut 
families off from relatives, lead rural businesses to lose customers, 
and create dangerous delays for public safety communications. This is 
unacceptable. That is why I wholeheartedly supported our recent 
rulemaking (FCC 13-18) that proposed new record-keeping requirements 
for originating facilities-based interstate service providers, 
including wireless providers and interconnected voice over Internet 
protocol (VoIP) providers. Adopting these requirements would mean the 
Commission would have the data necessary to go after bad actors, 
vigorously enforce its rules, and bring an end to rural call completion 
problems. The Commission plans to vote on an order to implement these 
rules in our public meeting on October 28, 2013. I fully support this 
effort. Furthermore, I believe the Commission has the authority to 
address the rural call completion problem.
                     t-band mission critical voice
    Question. The Middle Class Tax Relief and Job Creation Act of 2012 
required public safety users of T-band to vacate the spectrum no later 
than 2021. What, if any, impact does the Commission expect this will 
have on public safety mission-critical voice support? If T-band is 
vacated, does the Commission believe there will be adequate spectrum 
available to public safety users to support mission-critical voice? 
Further, if the spectrum is vacated by public safety users, are there 
remaining hurdles to auctioning T-band for commercial use?
    Answer. As you note, section 6103 of the Middle Class Tax Relief 
and Job Creation Act directs the Commission to reallocate the 470-512 
MHz (or T-band) spectrum used by public safety and to auction new 
licenses in that spectrum within 9 years of enactment. Congress further 
directed that public safety licensees must discontinue their T-band 
operations within 2 years after the auction is completed.
    Earlier this year the Commission's Public Safety and Homeland 
Security Bureau issued a public notice asking questions about 
implementation of this section of the law. Among the issues raised is 
finding alternative spectrum for public safety licensees that must 
vacate the T-band and the funding for relocating these licensees to 
that alternative spectrum.
    The Commission is still considering long-term alternatives for 
current T-band public safety spectrum users. One potential option may 
be for public safety users to migrate their operations to the LTE 
system currently being developed by the First Responders Network 
Authority--FirstNet. I am hopeful that the Commission will be able to 
locate new spectrum for public safety users. Ensuring continuity of 
operations for all of our first responders is absolutely critical.
                                 ______
                                 
               Question Submitted by Senator Mike Johanns
    Question. With respect to unlicensed spectrum--particularly that 
which permits consumers with mobile devices to make use of Wi-Fi--to 
what extent is spectrum congestion a problem that the Federal 
Communications Commission (FCC) intends to continue to address? What 
additional actions should the FCC take to address this issue?
    Answer. Demand for wireless capacity is growing at breathtaking 
speed. Worldwide, mobile data traffic increased 70 percent just last 
year. According to recent projections, in the next 5 years, wireless 
broadband traffic will be 13 times what it is right now. Wireless 
networks using licensed spectrum will not be able to meet this demand 
alone. Unlicensed spectrum, or Wi-Fi, is a necessary part of the 
solution. Already, more than a third of wireless traffic is offloaded 
to unlicensed spectrum. This number will continue to grow, as some 
analysts predict that over the next 5 years more than half of mobile 
traffic will be offloaded from licensed networks to unlicensed 
technologies.
    Today, most unlicensed traffic uses the 2.4 GHz band, which is also 
the home of countless other devices, like cordless phones, microwave 
ovens, and Bluetooth technology. Extensive use is leading to 
overcrowding in the band.
    So it is necessary for the Commission to take steps to find new 
spectrum for unlicensed services. To this end, the agency recently took 
steps to make very high frequency spectrum in the 60 GHz band available 
for Wi-Fi use.
    The Commission also initiated a proceeding earlier this year where 
it recognized the potential for increased Wi-Fi use in various spectrum 
bands in the 5 GHz range. Some of the bands in this range are 
encumbered by Federal users and it could take time before they are 
available for commercial use. However, our Federal colleagues at the 
Department of Defense sent us a letter on July 17 of this year 
acknowledging that it will not need the 5.150-5.250 GHz band and that 
it could be made available for Wi-Fi use. I believe that we should 
seize this opportunity. Specifically, we can take the flexible rules 
that have been the script for an unlicensed success story in the 5.725-
5.825 GHz band and expand them to this lower portion of the 5 GHz band. 
If we do, the 802.11ac standard that is already in use in this band is 
bound to really take off. This will mean more potential for unlicensed 
use in this band--and less congestion on licensed wireless networks.
    Finally, in the Middle Class Tax Relief and Job Creation Act, 
Congress gave the Commission the authority to hold wireless incentive 
auctions and as part of this effort create guard bands in the 600 MHz 
band that are technically reasonable to prevent harmful interference. 
Under the law, these guard bands may be made available for unlicensed 
use.
    In sum, I believe that in our increasingly mobile and connected 
world, a balanced approach that includes both licensed and unlicensed 
spectrum is the key to unlocking the full economic benefits of wireless 
broadband.
                                 ______
                                 
                  Questions Submitted to Hon. Ajit Pai
                Questions Submitted by Senator Tom Udall
           public safety communications and interoperability
    Question. The origins of the Federal Communications Commission's 
(FCC's) public safety mission pre-date the creation of the agency. In 
1912, Congress enacted legislation in response to radio distress call 
failures during the Titanic sinking. Twelve years ago, the terrorist 
attacks of 9/11 exposed a radio interoperability problem that put first 
responders' lives at additional risk. Some police and fire crews could 
not communicate via radio handsets with each other. The FCC has a 
strategic goal to promote the availability of critical communications 
infrastructures that are reliable, interoperable, redundant, and 
rapidly restorable.
    How would you rate the FCC's attainment of this strategic goal?
    Answer. The promotion of reliable public safety communications has 
long been a goal of the FCC, and that has become all the more true 
since Congress passed the Middle Class Tax Relief and Job Creation Act 
of 2012. In that legislation, Congress established the First Responder 
Network Authority (FirstNet) and tasked the Commission with overseeing 
FirstNet's license and providing it with funding through the commercial 
auction of spectrum. We have already granted FirstNet's license and 
adopted technical rules for its spectrum. And this January, the FCC 
will hold its first major auction of spectrum in almost 6 years, the 
proceeds of which will go to FirstNet. For all of these reasons, I 
therefore believe that the FCC is doing its part to facilitate the 
creation of a national interoperable public safety broadband network.
    Question. What is needed to address any deficiencies and on what 
timetable?
    Answer. The FCC needs to continue moving forward with its spectrum 
auctions so that there is sufficient funding on the table for FirstNet, 
Next Generation 911, deficit reduction, and other national priorities 
identified in the Middle Class Tax Relief and Job Creation Act of 2012. 
In particular, we must hold a successful broadcast incentive auction, 
and it is our goal to do so by the end of 2014.
                           rural telemedicine
    Question. Telehealth technologies can greatly enhance rural medical 
services. New Mexico is a large State with many residents living far 
from urban areas. So telehealth sometimes offers the best avenue to 
help meet healthcare needs. That is why I am working in a bipartisan 
manner with Senator Thune and others to help reduce some of the 
barriers to telemedicine.
    Could you share your thoughts on improving the Rural Health Care 
program as part of broader Universal Service reforms? I'm interested in 
hearing what you believe those barriers are and how they can be 
overcome.
    Answer. I share your belief in the importance of telemedicine. It 
can improve health, save lives, reduce costs, ease burdens on patients 
and patients' families, and spur innovation. I have personally seen its 
power and promise across America, from Kansas to California to Alaska. 
So I am pleased that the Commission reformed its rural healthcare 
program in December 2012 to create the Healthcare Connect Fund. Those 
changes--including a streamlined application process and the 
encouragement of consortia--came into effect only recently, and I look 
forward to monitoring how they affect the landscape of telemedicine, 
especially in traditionally underserved areas. Governments at all 
levels should also examine other barriers to telemedicine. For example, 
restrictive State licensure requirements can make it difficult for 
qualified physicians in one State to treat patients in other States 
through telemedicine.
  tribal lands' digital divide and government-to-government relations
    Question. I want to thank you for your efforts to tackle the 
digital divide facing Native American communities. Telephone access on 
Tribal lands still lags far behind the rest of the country. Broadband 
access may be as low as 10 percent on Tribal lands. This appalling 
digital divide creates real hardships for people, particularly in 
emergency situations. That is why the work of the Commission's Office 
of Native American Affairs and Policy is so important. Engagement with 
Tribes on a government-to-government basis is critical to solving 
communications challenges in Indian Country. This subcommittee's 
appropriations bill instructs the Commission to support to develop a 
plan to fully implement its existing Statement of Policy on 
Establishing a Government-to-Government Relationship with Indian 
Tribes.
    Will you support a Commission effort to develop a plan to implement 
the Commission's statement of policy on government-to-government 
relations with Indian Tribes?
    Answer. Yes, I would support such an effort.
               national lifeline accountability database
    Question. Your testimony notes that the Commission adopted reforms 
to the Lifeline program to help low income persons get telephone 
service. As you know, Lifeline dates to the Reagan administration and 
was expanded to include wireless phone service during the presidency of 
George W. Bush. Here is what one Lifeline user from the Navajo Nation 
had to say: ``I got help when I fell and broke my ankle. I called an 
ambulance and went to the doctor.'' Another wrote, ``I've been stranded 
during bad winter weather, and my Lifeline has helped me . . . .'' So 
this initiative can indeed be a ``Lifeline'' for low income persons in 
a time of emergency or when applying for a job. Yet it is important 
that the Commission continue reforms to guard against waste, fraud, and 
abuse. One of the recent Lifeline reforms is a new National Lifeline 
Accountability Database. This database will help weed out ``double 
dipping'' if there are duplicate participants receiving Lifeline 
assistance.
    Can I have your assurance that the Commission is committed to 
implementing this database as soon as possible?
    Answer. Waste, fraud, and abuse in the Lifeline program is a major 
problem. The Commission has recently taken strong enforcement action 
against those who sign up the same consumers for Lifeline multiple 
times (sometimes called the ``intracompany duplicates'' problem). But 
there is more to do. The National Lifeline Accountability Database is a 
good example of a necessary next step, and I fully support its swift 
implementation.
                             lifeline reform
    Question. I understand that the Commission may be reviewing a 
proposal to prohibit in-person distribution of phone handsets to 
Lifeline customers. This could negatively impact Lifeline-eligible 
residents of Tribal lands in New Mexico. For example, eligible phone 
companies would not be able to use mobile stores to reach residents 
from remote Tribal areas and provide them with phones. Moreover, some 
remote areas do not have postal service for regular mail delivery of a 
handset.
    As the Commission considers proposals to further modify the 
Lifeline program, will you carefully take into account the special 
circumstances facing residents on Tribal lands where the digital divide 
is so acute?
    Answer. As we take steps to combat the waste, fraud, and abuse in 
the Lifeline program, we should always take account of the 
circumstances facing those who truly need the service. In particular, 
we should closely examine how reforms would affect those in remote 
Tribal areas.
                  bill shock and wireless ``cramming''
    Question. I authored legislation to prevent cell phone ``bill 
shock,'' unexpected increases in one's monthly bill. So I am pleased 
that the Commission worked with wireless providers to come to a 
voluntary agreement on free consumer alerts for cell phone users. 
Millions of American wireless customers now benefit from notifications 
to help avoid ``overage'' charges. But I am still concerned about some 
practices that can hurt consumers, such as ``cramming.'' Cramming is a 
practice in which telephone customers are billed for enhanced features 
such as voice mail, caller-ID and call-waiting that they have not 
ordered. The Federal Trade Commission (FTC) reached a settlement with a 
company that apparently ``crammed'' unauthorized charges onto cell 
phone bills for phony anti-virus scans that showed up when smart phone 
users played the Angry Birds game app.
    What is the FCC doing to address these consumer issues?
    Answer. The FCC shares jurisdiction with the FTC over issues like 
cramming. The FCC's primary role is resolving cramming complaints 
against common carriers. The staff of the Consumer and Governmental 
Affairs Bureau (CGB) receives complaints from consumers. To the extent 
such complaints warrant investigation, CGB refers those complaints to 
the staff of the Enforcement Bureau. In addition, the Commission 
currently has an open rulemaking on cramming. In August, CGB issued a 
Public Notice seeking to refresh the record in that proceeding to see 
if further Commission action is needed in this area.
    Question. Is the range of remedies available to the FCC adequate to 
meaningfully address these problems?
    Answer. The Commission has the authority to impose substantial 
forfeitures against common carriers that violate the Communications Act 
at levels likely adequate to meaningfully address any complaints it 
receives. See 47 U.S.C. section 503. The Commission has used this 
authority to take action against those who engage in cramming.
    Question. Has the prevalence of these unauthorized practices been 
reduced in recent years?
    Answer. According to the Commission's consumer complaint data, the 
number of cramming inquiries decreased from 296 in the first quarter of 
2012 to 97 in the first quarter of 2013.
    Question. What recourses does a customer have if victimized by one 
of these deceptive practices?
    Answer. If a consumer is victimized by cramming, he or she can file 
a complaint at either the FCC or FTC.
                      fcc consumer complaints data
    Question. I would like to ask you about ways to improve how the FCC 
can better help consumers. The Commission receives consumer complaints 
and other public feedback through its website and other means. These 
data, however, are only made public on a very limited basis.
    What steps could the Commission take to facilitate public access to 
this complaint data?
    Answer. We should publish an online dashboard. This dashboard 
should provide one-stop shopping for members of the public seeking to 
find out how the Commission is doing, among other things, in resolving 
complaints and addressing petitions.
    Question. How can new technologies potentially help the Commission 
use this information to identify important issues for an official 
action or response?
    Answer. By publishing key performance metrics in an online 
dashboard, the Commission would be able to target areas that are in 
need of greater Commission attention. It would also provide the public 
and members of Congress with the information they need to spur the 
agency to act more quickly. I proposed this and related ideas for 
making the Commission more efficient and accountable this past 
February. See ``Remarks of Commissioner Ajit Pai Before the Federal 
Communications Bar Association'' at 3, http://hraunfoss.fcc.gov/
edocs_public/attachmatch/DOC-319045A1.pdf.
                           spectrum research
    Question. During the hearing, there was a brief discussion of the 
need for further research into how to harness and efficiently use radio 
spectrum. I would like to ask how the Commission can help spur 
innovation when it comes to maximizing use of radio spectrum for 
commercial uses. Earlier this month, the National Aeronautics and Space 
Administration (NASA) launched the Lunar Atmosphere and Dust 
Environment Explorer (LADEE). This mission includes a demonstration of 
two-way, high rate laser communications for space communications. While 
orbiting the moon, LADEE will communicate at broadband speeds with a 
receiver at the White Sands Missile Range in New Mexico. Such optical 
communications technology is similar to fiber optics but without the 
``fiber.'' Although such breakthrough technology faces technical 
challenges for terrestrial deployment, it is an example of spectrum 
research with enormous potential.
    How can the Commission encourage and promote further research into 
innovative spectrum technologies?
    Answer. There are several things the Commission can do to encourage 
further research into innovative spectrum technologies. One is to grant 
experimental licenses, as appropriate, to universities, research 
laboratories, medical institutions, and others in order to allow them 
to test cutting-edge technologies without unnecessary regulatory 
roadblocks. (On January 31, 2013, the FCC adopted an order modernizing 
its rules regarding the Experimental Radio Service in order to 
facilitate such innovation. See http://hraunfoss.fcc.gov/edocs_public/
attachmatch/FCC-13-15A1_
Rcd.pdf.) Similarly, the agency could apply its existing authority 
under section 7 of the Communications Act more systematically and 
rigorously. Section 7 states that ``[t]he Commission shall determine 
whether any new technology or service proposed in a petition or 
application is in the public interest within one year after such 
petition or application is filed.'' Taking this statutory mandate 
seriously and resolving petitions involving new and innovative spectrum 
technologies within 1 year would help to encourage and promote further 
research.
                                 ______
                                 
            Questions Submitted by Senator Richard J. Durbin
                         northern border issues
    Question. In November of last year I wrote to then Chairman of the 
Federal Communications Commission (FCC) Julius Genachowski on the 
importance of transparency as we conduct the first ever voluntary 
incentive auction. An important step to ensuring a successful auction 
is the completion of coordination with Canada in markets such as 
Chicago. What is the status of coordinating incentive efforts with 
Canada, and are there particular issues that still yet need to be 
resolved before moving forward?
    Answer. Coordinating spectrum use along our national borders must 
be a priority for the Commission if the broadcast incentive auction is 
going to be a success. I'm pleased that some discussions have already 
started, but I believe that we need to intensify these efforts. We must 
have sustained, high-level engagement, and if asked, I stand ready to 
do whatever I can to help advance this process along.
                         universal service fund
    Question. We commend the Commission for the hard work it has 
undertaken in carrying out its Universal Service Fund (USF) and 
Intercarrier Compensation (ICC) reform orders. However, we continue to 
hear from providers in rural areas that the new rules are still 
creating uncertainty and inhibiting new investments limiting deployment 
of new technologies. While acknowledging that reforms to USF and ICC 
are necessary and some current participants will see reductions in 
support, what steps, if any, is the commission taking to address this 
issue?
    Answer. Although the USF/ICC Transformation Order was in many ways 
a necessary step toward reorienting the Universal Service Fund toward 
broadband, I fear that the quantile regression analysis (QRA) 
benchmarks adopted therein have resulted in unpredictability and 
uncertainty, chilling the investment climate and impeding the 
deployment of next-generation technologies and broadband services to 
rural Americans. I laid out several steps in February I thought the 
Commission should take, such as holding the benchmarks constant for a 
period of several years so that carriers could plan their (necessarily 
long-term) infrastructure investments, in order to ameliorate the harms 
caused by the QRA benchmarks. See http://hraunfoss.fcc.gov/
edocs_public/attachmatch/FCC-13-16A6.pdf. I still believe that, should 
the Commission retain the QRA benchmarks, we should modify their 
implementation in this manner. I hope to see progress on this issue in 
the future.
                         rural call completion
    Question. While the Committee finds that the FCC's February 2012 
Declaratory Ruling on Rural Call Completion Issues has helped make 
progress toward addressing call completion problems, the problems 
continue to occur. This issue, for both providers and customers, has 
now been continuing without clear resolution for years. What are your 
plans to address this issue? Do you believe the Commission has the 
authority, tools, and resources necessary to resolve this problem?
    Answer. On October 28, the Commission adopted new rules to collect 
data on how often calls to rural areas are properly completed. With 
that information, the Commission will be in a significantly better 
position to determine the source or sources of rural call completion 
problems and take appropriate action. As a general matter, the 
Commission has broad authority to ensure that calls dialed from one 
telephone number to another go through. So if we are willing to take 
appropriate enforcement action against bad actors, I believe that we 
will be able to resolve this problem.
                     t-band mission critical voice
    Question. The Middle Class Tax Relief and Job Creation Act of 2012 
required public safety users of T-band to vacate the spectrum no later 
than 2021. What, if any, impact does the Commission expect this will 
have on public safety mission-critical voice support? If T-band is 
vacated, does the Commission believe there will be adequate spectrum 
available to public safety users to support mission-critical voice? 
Further, if the spectrum is vacated by public safety users, are there 
remaining hurdles to auctioning T-band for commercial use?
    Answer. Earlier this year, the Commission's Public Safety and 
Homeland Security Bureau and Wireless Telecommunications Bureau sought 
comment on how to implement the required vacatur of the T-band by 
public safety users. I look forward to reviewing the record developed 
in that proceeding to determine how best to implement the statutory 
requirement you mentioned. And as we do so, we must strive to minimize 
any negative impact on public safety users.
                                 ______
                                 
              Questions Submitted by Senator Mike Johanns
    Question. Your testimony notes that `` . . . the [quantile 
regression analysis] QRA benchmarks have resulted in unpredictability 
and uncertainty, chilling the investment climate and impeding the 
deployment of next-generation technologies and broadband services to 
rural Americans.''
    Do you have a suggestion for what should replace the model in use? 
Is it your view that the Federal Communications Commission (FCC) should 
not be using benchmarking at all? Or should it use a model other that 
which you have criticized?
    Answer. There should be limits on the universal service support a 
carrier can receive. In this era of fiscal restraint, no company can 
expect the Government to continue to fund its expenses without 
question. But it is critical to remember that the QRA benchmarks do not 
reduce the size of the Universal Service Fund (USF). They merely impact 
how funds are distributed. And I have serious doubts about the utility 
of the QRA benchmarks as they have been implemented.
    The chief problem with the QRA benchmarks model at this point is 
its unpredictability. Carriers making decisions in 2013 need to know 
how the model will affect their recovery years down the road, because 
infrastructure investment is necessarily a long-term decision. Yet the 
QRA benchmarks can change each year. What is more, if a carrier's QRA 
benchmarks in any given year decrease for any reason, it may experience 
a sudden and dramatic loss in USF support under the current framework. 
This framework, then, not only undermines the statutory promise that 
universal service support be ``predictable,'' it also impedes if not 
deters altogether the deployment of next-generation networks in rural 
areas that otherwise may never have access to next-generation services.
    I laid out two proposed changes to our rules back in February that 
would have ameliorated these effects: (1) holding the benchmarks 
constant (while adjusting for line loss) for a period of several years; 
and (2) using a transition year to ease the effect of benchmark 
decreases on carriers. See http://hraunfoss.fcc.gov/edocs_public/
attachmatch/FCC-13-16A6.pdf. I still believe that, should the 
Commission retain the QRA benchmarks, we should modify their 
implementation in this manner. I hope to see progress on this issue in 
the future and would be willing to work with you should you wish to 
explore the matter further.
    Question. With respect to unlicensed spectrum--particularly that 
which permits consumers with mobile devices to make use of Wi-Fi--to 
what extent is spectrum congestion a problem that the FCC intends to 
continue to address? What additional actions should the FCC take to 
address this issue?
    Answer. Spectrum congestion in the unlicensed 2.4 GHz band has 
become a major problem, as recognized by Congress in the Middle Class 
Tax Relief and Job Creation Act of 2012. Pursuant to that statute, the 
Commission opened a rulemaking on expanding the unlicensed use of 
spectrum in the 5 GHz band in February. I believe the Commission should 
move forward with that rulemaking in the near future.
    5 GHz spectrum is especially well-suited for unlicensed use. Its 
short-range propagation characteristics enable localized reuse of the 
spectrum with minimal risk of interference. Wider channels help achieve 
faster speeds and higher throughputs. In fact, a super-wide channel 
would allow for throughputs as high as 1 gigabit per second. And the 
technical standard for this next-generation Wi-Fi--IEEE 802.11ac--
already exists. So if the FCC can act to make available more unlicensed 
spectrum in the 5 GHz band, that would mean less congestion for the 
millions of Americans who rely on Wi-Fi every day.
    Question. Your prepared testimony mentions at least 2 things that 
the FCC could do (or continue to do) in the 5 GHz band. First, you 
noted that the FCC could continue to make smart deployments of 
unlicensed portions in the 5 gigahertz (GHz) band. Second, you 
mentioned ``creating a more unified set of rules for the 5 GHz 
spectrum.''
    What specifically should the FCC do to create a more unified set of 
rules? How would these rules expand unlicensed use in the 5 GHz band? 
Would the types of rules you envision differ for the different portions 
of the 5 GHz band?
    Answer. The next-generation Wi-Fi standard--IEEE 802.11ac--achieves 
maximum performance when operating over a contiguous 160 MHz channel. 
Our goal therefore should be to harmonize the Commission's technical 
rules in the 5 GHz band wherever possible in order to allow for the use 
of such wide channels. For example, we should strive to harmonize the 
rules governing the U-NII-1 band with the rules governing the 
neighboring U-NII-2A band, such as by increasing the maximum power in 
the U-NII-1 band. Such harmonization would allow for the most 
productive use of this spectrum and provide the greatest benefit to 
American consumers.

                         CONCLUSION OF HEARINGS

    Senator Udall. With that, the subcommittee hearing is 
hereby recessed. Thank you very much, again.
    [Whereupon, at 11:55 a.m., Wednesday, September 11, the 
hearings were concluded, and the subcommittee was recessed, to 
reconvene subject to the call of the Chair.]
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