[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


   PROTECTING THE INTERNET AND CONSUMERS THROUGH CONGRESSIONAL ACTION

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

                                HEARING

                               BEFORE THE

             SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            JANUARY 21, 2015

                               __________

                            Serial No. 114-1
                            
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                            


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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman
JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Chairman Emeritus                    Ranking Member
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania        ELIOT L. ENGEL, New York
GREG WALDEN, Oregon                  GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
  Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   KATHY CASTOR, Florida
GREGG HARPER, Mississippi            JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
PETE OLSON, Texas                    BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia     PAUL TONKO, New York
MIKE POMPEO, Kansas                  JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois             YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia         DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
BILL JOHNSON, Missouri               JOSEPH P. KENNEDY, III, 
BILLY LONG, Missouri                     Massachusetts
RENEE L. ELLMERS, North Carolina     TONY CARDENAS, California
LARRY BUCSHON, Indiana
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota
             
             
             Subcommittee on Communications and Technology

                          GREG WALDEN, Oregon
                                 Chairman
ROBERT E. LATTA, Ohio                ANNA G. ESHOO, California
  Vice Chairman                        Ranking Member
JOHN SHIMKUS, Illinois               MICHAEL F. DOYLE, Pennsylvania
MARSHA BLACKBURN, Tennessee          PETER WELCH, Vermont
STEVE SCALISE, Louisiana             JOHN A. YARMUTH, Kentucky
LEONARD LANCE, New Jersey            YVETTE D. CLARKE, New York
BRETT GUTHRIE, Kentucky              DAVID LOEBSACK, Iowa
PETE OLSON, Texas                    BOBBY L. RUSH, Illinois
MIKE POMPEO, Kansas                  DIANA DeGETTE, Colorado
ADAM KINZINGER, Illinois             G.K. BUTTERFIELD, North Carolina
GUS M. BILIRAKIS, Florida            DORIS O. MATSUI, California
BILL JOHNSON, Missouri               JERRY McNERNEY, California
BILLY LONG, Missouri                 BEN RAY LUJAN, New Mexico
RENEE L. ELLMERS, North Carolina     FRANK PALLONE, Jr., New Jersey (ex 
CHRIS COLLINS, New York                  officio)
KEVIN CRAMER, North Dakota
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)
  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................     1
    Prepared statement...........................................     3
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................     4
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     6
    Prepared statement...........................................     7
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     9
Hon. Steve Scalise, a Representative in Congress from the State 
  of Louisiana, opening statement................................   130

                               Witnesses

Michael Powell, President and CEO, National Cable & 
  Telecommunications Association.................................    11
    Prepared statement...........................................    14
Chad Dickerson, CEO, Etsy........................................    22
    Prepared statement...........................................    24
Paul Misener, Vice President of Global Public Policy, Amazon.com.    27
    Prepared statement...........................................    30
Jessica Gonzalez, Executive Vice President and General Counsel, 
  National Hispanic Media Coalition..............................    38
    Prepared statement...........................................    40
Nicol Turner-Lee, Vice President and Chief Research and Policy 
  Officer, Minority Media and Telecommunications Council.........    63
    Prepared statement \1\.......................................    66
Meredith Attwell Baker, President and CEO, CTIA--The Wireless 
  Association....................................................    80
    Prepared statement \2\.......................................    82
    Answers to submitted questions...............................   164

                           Submitted Material

Statement of Mayors of San Francisco, CA and New York, NY, 
  submitted by Ms. Eshoo.........................................   131
Statement of the National Association of Realtors, submitted by 
  Ms. Eshoo......................................................   133
Statements on racial justice from various organizations, \3\ 
  submitted by Ms. Eshoo.........................................    94
Article entitled, ``Comcast, Charter and Time Warner Cable all 
  say Obama's net neutrality plan shouldn't worry investors,'' 
  December 16, 2014, the Washington Post, submitted by Mr. Doyle.   135
Letter of January 15, 2015, from Sprint to the Federal 
  Communications Commission, submitted by Mr. Doyle..............   138
Article entitled, ``Verizon: Actually, strong net neutrality 
  rules won't affect our network investment,'' December 10, 2014, 
  the Washington Post, submitted by Mr. Doyle....................   140
Letter of November 14, 2014, from wireless companies to the 
  Federal Communications Commission, submitted by Mr. Walden.....   142
Verizon Policy Blog post entitled ``The Relationship Between 
  Investment and Deregulation,'' December 11, 2014, submitted by 
  Mr. Walden.....................................................   144
Letters and op-eds on net neutrality, submitted by Mr. Walden....   146
Statement of the Internet Association, submitted by Mr. Loebsack.   162

----------
\1\ The attachments to Ms. Turner-Lee's testimony are available 
  at http://docs.house.gov/meetings/if/if16/20150121/102832/hhrg-
  114-if16-wstate-turner-leen-20150121-u2.pdf.
\2\ The attachments to Ms. Baker's testimony are available at 
  http://docs.house.gov/meetings/if/if16/20150121/102832/hhrg-
  114-if16-wstate-bakerm-20150121-u1.pdf.
\3\ The information is available at http://docs.house.gov/
  meetings/if/if16/20150121/102832/hhrg-114-if16-20150121-
  sd009.pdf.

 
                      PROTECTING THE INTERNET AND 
                 CONSUMERS THROUGH CONGRESSIONAL ACTION

                              ----------                              


                      WEDNESDAY, JANUARY 21, 2015

                  House of Representatives,
     Subcommittee on Communications and Technology,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:05 a.m., in 
room 2123, Rayburn House Office Building, Hon. Greg Walden 
(chairman of the subcommittee) presiding.
    Present: Representatives Walden, Latta, Barton, Shimkus, 
Blackburn, Lance, Guthrie, Olson, Pompeo, Kinszinger, 
Bilirakis, Johnson, Long, Ellmers, Collins, Cramer, Upton (ex 
oficio), Eshoo, Doyle, Welch, Yarmuth, Clarke, Loebsack, Rush, 
DeGette, Butterfield, Matsui, McNerney, Lujan, and Pallone (ex 
officio).
    Staff Present: Gary Andres, Staff Director; Ray Baum, 
Senior Policy Advisor/Director of Coalitions; Sean Bonyun, 
Communications Director; Leighton Brown, Press Assistant; 
Rebecca Card, Staff Assistant; Karen Christian, General 
Counsel; Andy Duberstein, Deputy Press Secretary; Gene Fullano, 
Detailee, Telecom; Kelsey Guyselmann, Counsel, Telecom; Grace 
Koh, Counsel, Telecom; Tim Pataki, Professional Staff Member; 
David Redl, Counsel, Telecom; Charlotte Savercool, Legislative 
Clerk; Macey Sevcik, Press Assistant; David Goldman, Minority 
Chief Counsel for Communications and Technology Subcommittee; 
Margaret McCarthy, Minority Professional Staff Member; and Ryan 
Skukowski, Minority Legislative Assistant.

  OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Mr. Walden. I will call to order the subcommittee on 
Communications and Technology.
    Good morning and welcome to our subcommittee's first 
hearing for the 114th Congress. I can think of no issue within 
our jurisdiction that is more important to consider at this 
time than the future of the Internet and our responsibility as 
legislators to set Internet policy for the country. That is why 
we put forward draft legislation to provide consumers the 
protections they deserve while not choking off investment and 
innovation.
    We have shared this draft with my colleagues on both sides 
of the aisle. We have made it available publicly and we have 
invited our witnesses today to give us their views on this 
draft proposal, and I thank all of our witnesses for their 
participation.
    We have a very important choice to make between letting 
three very smart and capable, but unelected people at the FCC, 
a majority of the commission, use a statute written for another 
era to cobble together a regulatory scheme and undoubtedly will 
end up in court for years in litigation, providing no 
protections but much uncertainty. Or, we can do our job and 
craft a new law for this century through the open and 
transparent legislative process that we are beginning today.
    We have come together before in this subcommittee and full 
committee to craft communications legislation that, frankly, is 
now pretty good law, and we must do it again. It is the only 
way to bring clarity and certainty to Internet governance.
    Now, a little less than 4 years ago the FCC was in court 
defending its first attempt to regulate the network management 
practices of an ISP. Since then, the commissionhas gone to 
court twice in defense of net neutrality and twice the courts 
have rejected the FCC's rules. While the court seems to have 
given FCC lawyers a third time is the charm roadmap for how to 
craft rules under the current act, the commission is preparing 
to invoke net neutrality's nuclear option: Reclassification 
under the set of aging and inept rules developed for 19th 
century railroads and then adapted for the age of the monopoly, 
telephone.
    We don't have to settle for that. We have a duty to those 
who use the Internet, those who manage the Internet, and those 
who build the Internet to provide legal certainty, consumer 
protection, and clarity for investment. What we are offering 
today is a solution that will bring to an end the loop of 
litigation and legal gymnastics that has flowed from FCC 
attempts to shoehorn the policy it wants to fit the authority 
that it has.
    Our discussion draft is largely based on the 2010 Open 
Internet Order, adopted by former FCC chairman Julius 
Genachowski, and it draws from the legislative proposal put 
forward by former Energy and Commerce Committee Chairman Henry 
Waxman.
    Now, some pundits have raised concerns that the draft bill 
curtails the newfound authority that the courts have read into 
Section 706 of the Telecommunications Act. 706 was added in 
1996, and it instructs the FCC to promote the deployment of 
broadband networks. Until recently, it was understood that 
Section 706 meant that the FCC should use its existing 
authority to promote broadband deployment, and it worked.
    However, last year the courts for the first time 
interpreted Section 706 to permit the FCC to take nearly any, 
and I underscore any, action to promote broadband so long as it 
is not inconsistent with the rest of the act. Did you catch 
that? It gives them nearly any authority at the FCC. This is a 
broad expansion of what was intended under 706.
    Now, while some take comfort that it is a limited majority 
at the FCC will do what they want, I just pose the question: 
What happens when an FCC not to their liking grabs the 
regulatory throttle?
    Let me put a finer point on this. That means that Amazon, 
Etsy, and every other Internet-based company should be prepared 
to meet its new regulator. If you would like an idea of what 
you are in for, just look no further than your fellow 
witnesses, Mr. Powell and Ms. Baker, former regulators who 
currently represent the regulated. It is time to update this 
law. It is time for a fresh approach from we who are elected to 
write the law and to set the Nation's communications policy.
    My priority is to protect consumers and the Internet we all 
rely upon. My priority is to encourage its expansion to the 
hills and valleys of our vast Nation that lack connectivity and 
to various segments of our population that are underserved and 
are too often ignored. Together we have taken on complicated 
communications challenges and produced good legislative 
solutions. We have stood up to powerful special interests and 
stood with the American people, and we must do so again.
    The draft legislative proposal represents our good-faith 
effort to end the net neutrality debate before it goes to court 
again. Our committee will not ignore our responsibility. As 
some of my colleagues know, we have been working on the 
principles and draft legislation literally for months. We have 
listened to supporters, opponents, and neutral parties too. We 
will take the advice and counsel from our witnesses today into 
full consideration, and then we won't let the old Washington 
gridlock stand in the way of us doing our job, for the voters 
demand it and they deserve it.
    [The prepared statement of Mr. Walden follows:]

                 Prepared statement of Hon. Greg Walden

    Welcome to our subcommittee's first hearing of the 114th 
Congress. I can think of no issue within our jurisdiction that 
is more important to consider at this time than the future of 
the Internet and our responsibility as legislators to set 
Internet policy for the country. That's why we've put forward 
draft legislation to provide consumers the protections they 
deserve while not choking off investment and innovation. We 
have shared this draft with my colleagues on both sides of the 
aisle, we've made it available publicly, and we have invited 
our witnesses today to give us their views on this draft 
proposal.
    We have a very important choice to make between letting 
three very smart and capable, but unelected people at the FCC 
use a statute written for another era to cobble together a 
regulatory scheme that undoubtedly will end up in years of 
costly litigation, providing no protections but much 
uncertainty, or we can do our job and craft a new law for this 
century through the open and transparent legislative process 
that we are beginning today.
    We have come together before in this committee to craft 
communications legislation that is now good law, and we must do 
so again. It is the only way to bring clarity and certainty to 
Internet governance.
    A little less than four years ago, the FCC was in court 
defending its first attempt to regulate the network management 
practices of an ISP. Since then, the commission has gone to 
court twice in defense of net neutrality. And twice, the courts 
have rejected the FCC's rules. While the court seems to have 
given FCC lawyers a ``third time's the charm'' roadmap for how 
to craft rules under the current act, the commission is 
preparing to invoke net neutrality's ``nuclear option''--
reclassification under the set of aging and inapt rules 
developed for 19th century railroads and adapted for the age of 
the monopoly telephone. We don't have to settle for that.
    We have a duty to those who use the Internet, those who 
manage the Internet and those who build the Internet to provide 
legal certainty, consumer protection and clarity for 
investment. What we are offering today is a solution that will 
bring to an end the loop of litigation and legal gymnastics 
that has flowed from FCC attempts to shoehorn the policy it 
wants to fit the authority that it has.
    Our discussion draft is largely based on the 2010 Open 
Internet Order, adopted by former FCC Chairman Julius 
Genachowski and draws from the legislative proposal put forward 
by former Energy and Commerce Committee Chairman Henry Waxman.
    Some pundits have raised concerns that this draft bill 
curtails the new-found authority that the courts have read into 
Section 706 of the Telecommunications Act. Section 706 was 
added in 1996 and instructs the FCC to promote the deployment 
of broadband networks. Until recently, it was understood that 
Section 706 meant that the FCC should use its existing 
authority to promote broadband deployment. And it worked. 
However, last year the courts for the first time interpreted 
Section 706 to permit the FCC to take nearly any action to 
promote broadband, so long as it isn't inconsistent with the 
rest of the Act. Did you catch that? Nearly any action. While 
some take comfort that a slim majority of this FCC will do as 
they want, what happens when an FCC not of their liking grabs 
the regulatory throttle? Let me put a finer point on this: that 
means that Amazon, Etsy, and every other Internet-based company 
should be prepared to meet its new regulator. If you'd like an 
idea of what you're in for, look no further than your fellow 
witnesses Mr. Powell and Ms. Baker, former regulators who 
currently represent the regulated.
    It's time to update this law. It's time for a fresh 
approach from we who are elected to write the law and set the 
nation's policy. My priority is to protect consumers and the 
Internet we all rely on. My priority is to encourage its 
expansion to the hills and valleys of our vast nation that lack 
connectivity, and to various segments of our population that 
are underserved and too often ignored.
    Together, we have taken on complicated communications 
challenges and produced good legislative solutions. We've stood 
up to powerful special interests and stood with the American 
people. We must do so again.
    This draft legislative proposal represents our good faith 
effort to end the net neutrality debate before it goes to court 
again. Our committee will not ignore our responsibility. As 
some of my colleagues know, we've been working on the 
principles and draft legislation for months. We have listened 
to supporters, opponents and neutral parties, too. We will take 
the advice and counsel of our witnesses today into full 
consideration. And then we won't let the old Washington 
gridlock stand in the way of us doing the job our voters demand 
and deserve.

    Mr. Walden. And with that I recognize the gentlelady from 
California, the ranking member of the subcommittee, Ms. Eshoo, 
for her opening statement.

 OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Eshoo. Thank you, Mr. Chairman.
    Today's hearing renews a critical discussion in the new 
Congress about the Internet. Should it be truly open and equal? 
Should consumers, competition, and choice drive our 
deliberations? Should privacy and the disabled be protected? 
Should every region, city, town, and reservation, be they rural 
or urban, have equal access to broadband speeds capable of 
leveraging innovative online content and services?
    I have reviewed the majority's proposal very carefully, and 
I commend you for finally acknowledging that we do in fact have 
problems with online blocking, throttling and paid 
prioritization. We agree that bright-line rules should apply to 
both fixed and mobile broadband services.
    What is abundantly clear in the majority's proposal is to 
purposely tie the hands of the FCC by prohibiting them from 
reclassifying broadband under Title II. The proposal creates a 
huge loophole called specialized services. On the one hand, the 
proposal says it will prohibit fast lanes, but under 
specialized services, a loosely defined term, broadband 
providers can give themselves prioritized service and the FCC 
will have no power to define this.
    If our goal is to have a system that guarantees equal 
access of an open Internet to everyone, and it should, who is 
going to carry out and oversee this?
    This proposal carries an enormous bias against enforcement, 
which in turn doesn't give consumers a leg to stand on.
    The proposal does harm to the efforts made to bring 
broadband to rural areas. It could unintentionally harm the 911 
system, limit the FCC's authority to promote access by the 
disabled to communication services, and it could restrict 
access by competitors to utility poles.
    The proposal also attempts to address specific forms of 
discrimination, but who today knows with any certainty what 
tomorrow's forms of discrimination will be. The proposal takes 
away the authority of the FCC to address them. I don't think 
your constituents or mine are clamoring for a bill of rights 
for various companies. They want the guarantee of an open 
accessible Internet. Four million people spoke out to the FCC, 
and I think our goal should match theirs. We should protect 
ordinary consumers, promote innovation, create real 
competition, and advance start-ups, and when we do, our 
constituents should be 100 percent confident that these things 
are going to be carried out, that there is going to be a cop on 
the beat.
    An open Internet is not only critical to America's future, 
it is essential for every American to learn, to educate, to 
conduct commerce, to build businesses and create jobs, to 
innovate, to expand our economy, and to promote democracy. It 
will strengthen the middle class and it will bring more into 
it.
    What paths we take will determine much of our future. In an 
attempt to eliminate bad practices, we should not be tempted to 
establish rules that will create new bad practices. I think 
that this would be a march to folly.
    Mr. Walden. The gentlelady yield back the balance of her 
time?
    Ms. Eshoo. The balance of my time I yield to Mr. Doyle. I 
am sorry.
    Mr. Walden. Mr. Doyle is recognized.
    Mr. Doyle. Thank you, Mr. Chairman for holding this 
hearing.
    This draft legislation represents a step forward by my 
colleagues. That being said, the bill still falls short. It 
permanently revokes and severely weakens the Commission's 
ability to address serious issues in promoting broadband 
competition, encouraging broadband deployment, and protecting 
consumers and their privacy.
    Mr. Chairman, technology policy needs to be flexible, not 
proscriptive. It needs to be adaptive and able to change to 
meet our future needs.
    The principles included in the draft bill are very similar 
to what the FCC proposed in its 2010 rules, but since then we 
have seen battles between Netflix and ISPs over 
interconnection, renewed efforts by cities to build out their 
own broadband infrastructure and create jobs, and a continuing 
need for strong consumer protection.
    The last 5 years have been a lifetime in the technology 
world, and we need rules that can adapt to the pace of 
innovation and the new challenges that it brings.
    I yield back.
    Mr. Walden. Gentleman yields back the balance of the time.
    And we will now go to the chairman of the full committee, 
the gentleman from Michigan, Mr. Upton.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Thank you, Mr. Chairman.
    You know, this committee is known for working together to 
tackle the tough issues; a tradition of getting the job done 
where each side gives a little bit in order to make things 
better for the American public.
    But one issue that has divided us for too long is how best 
to ensure an open Internet rooted in bedrock principles of 
freedom and access for consumers and innovators alike.
    While I certainly believe that free markets address these 
issues, the FCC seems to believe regulatory action is 
necessary, and one of the only tools at its disposal is to 
apply rules from the Roosevelt era to shape the Internet of the 
21st Century.
    Given the choice between enacting prudent legislation or 
leaving the FCC to tackle this with tools unfit for the task, 
we choose to take action.
    Last week Chairman Walden, Thune and I put forward draft 
legislation that would codify FCC's authority to enforce the 
bright-line rules of the Internet road. Legislation protects 
consumers and innovators, ensuring America remains the 
preeminent global leader of the Internet era. Our proposal 
prohibits Internet service providers from blocking content, 
selectively changing the quality of traffic based on where it 
came from or what it is or prioritizing certain traffic based 
on payment.
    It requires providers to be open and transparent with 
consumers, allowing them to make the most informed choice about 
their service.
    We have also included safeguards to close potential 
loopholes and prevent mischief. This should all sound very 
familiar to my Democratic colleagues because they are the rules 
many of you and the President have been calling for for some 
time.
    The FCC has spent years trying to craft rules that achieve 
those same goals. In fact, much of this bill's language is 
taken from past FCC attempts, but limits on the commission's 
authority have resulted in years, many years, of litigation and 
certainly uncertainty.
    Consumers and industry deserve better. Consumers deserve 
certainty to know that they are protected by clear rules. 
Providers need certainty so that they can move forward with 
their business models, because without that certainty, 
innovation and investment suffer and consumers lose.
    Our thoughtful solution provides a path forward that 
doesn't involve the endless threat of litigation or the baggage 
of laws created for a monopoly era telephone service. Only 
Congress can give the commission the tools that it needs to 
protect consumers and innovation in the Internet era and 
beyond.
    This draft legislation provides a sustainable, responsible 
path to appropriately and effectively address the concerns from 
the left and the right. It puts to bed one of the most 
contentious issues that we face and allows us to move forward 
in our goal of modernizing the Nation's communication laws.
    Our Comm Act update process can bring bipartisan change, 
direct communication laws, but we first have to come together 
and resolve this near-decade-long debate over the future of the 
Internet.
    Yield the balance of my time to Mr. Barton.
    [The prepared statement of Mr. Upton follows:]

                 Prepared statement of Hon. Fred Upton

    This committee is known for working together to tackle the 
tough issues. A tradition of getting the job done, where each 
side gives a little in order to make things better for the 
American public. But one issue that has divided us for too long 
is how best to ensure an open Internet rooted in bedrock 
principles of freedom and access for consumers and innovators 
alike.
    While I believe free markets address these issues, the FCC 
seems to believe regulatory action is necessary, and one of the 
only tools at its disposal is to apply rules from the Roosevelt 
era to shape the Internet of the 21st century. Given the choice 
between enacting prudent legislation or leaving the FCC to 
tackle this with tools unfit for the task, we choose to take 
action.
    Last week, Chairmen Walden, Thune, and I put forward draft 
legislation that would codify FCC authority to enforce the 
bright-line rules of the Internet road. This legislation 
protects consumers and innovators, ensuring America remains the 
preeminent global leader of the Internet era. Our proposal 
prohibits Internet service providers from blocking content, 
selectively changing the quality of traffic based on where it 
came from or what it is, or prioritizing certain traffic based 
on payment. It requires providers to be open and transparent 
with consumers, allowing them to make the most informed choice 
about their service. We've also included safeguards to close 
potential loopholes and prevent mischief. This should all sound 
very familiar to my Democratic colleagues: these are the rules 
many of you and the president have been calling for.
    The FCC has spent years trying to craft rules that achieve 
these same goals. In fact, much of this bill's language is 
taken from past FCC attempts. But limits on the commission's 
authority have resulted in years of litigation and uncertainty.
    Consumers and industry deserve better. Consumers deserve 
certainty to know that they are protected by clear rules. 
Providers need certainty so they can move forward with their 
business models. Without this certainty, innovation and 
investment suffer, and consumers lose.
    Our thoughtful solution provides a path forward that 
doesn't involve the endless threat of litigation or the baggage 
of laws created for monopoly-era telephone service. Only 
Congress can give the commission the tools it needs to protect 
consumers and innovation in the Internet era and beyond.
    The draft legislation provides a sustainable, responsible 
path to appropriately and effectively address the concerns from 
left and right. It puts to bed one of the more contentious 
issues we face and allows us to move forward in our goal of 
modernizing the nation's communications laws. Our CommActUpdate 
process can bring about bipartisan change to our communications 
laws, but we must first come together and resolve this near 
decade-long debate over the future of the Internet.
    I thank our witnesses for their testimony today and look 
forward to advancing this legislation.

    Mr. Upton. Yield the balance of my time to Mr. Barton.
    Mr. Barton. Thank you. I thank the chairman.
    I was heartened by some of the comments that Mr. Doyle made 
in his remarks.
    Last night after the President's State of the Union, I came 
back to my office and did a little video that we put on my 
FaceBook page, we put on YouTube. I believe we put it on 
Twitter. I have a 9-year-old son that has an iPad, an iPod, an 
Xbox, a PlayStation 4, his own cell phone, knows how to use the 
Internet better than I do. He is spoiled. Well, that is his 
mother. That is his mother. She has bought him all these 
things, actually.
    No. That is not true, but, anyway, my point is, to 
paraphrase President Reagan, in his first campaign in 1980, he 
asked the American people: Are you better off today than you 
were 4 years ago? When you look at the Internet, I think you 
could ask the consumers: Are you better off today than you were 
4 years ago? And the answer would be: Yes. They are. I see 
advertisements every day. There is one playing down in Texas 
right now. Give me your bill, we will cut it in half. You know? 
I am not going to name who is offering that, but you all would 
know it if I said it.
    The Internet is not a monopoly like the telephone companies 
were or the utilities were in the 1930s. It is one of the most 
vibrant markets in the world. The chairman's draft is an 
attempt to keep it that vibrant marketplace. Some of the people 
that are at this table helped develop the policies that make 
that possible. We should support the chairman, work with the 
minority and try to come up with a bill that keeps it a vibrant 
market.
    And I don't have any time, but I am supposed to yield to 
Mr. Latta. So if the chairman would give him at least a minute, 
I would ask unanimous consent that Mr. Latta has a minute.
    Mr. Walden. Is there any objection? If not, we will 
recognize Mr. Latta for a minute out of courtesy.
    Mr. Latta. Well, thank you, very much.
    And thank you, Mr. Barton, and thank you, Mr. Chairman. I 
appreciate that, and thanks to our witnesses for being here 
today.
    The FCC has indicated it intends to soon move forward with 
an order to reclassify broadband Internet services under Title 
II of the Communications Act. I firmly believe that this course 
of action will bring legal uncertainty, slow innovation and 
investment, and ultimately negatively affect the American 
consumers.
    Even those who support reclassification recognize these 
challenges, but would attempt to circumvent these limits by 
forbearing sections of the law, a plan that would only seem to 
magnify legal uncertainty and further postpone innovation.
    It is evident that upending the longstanding precedent of a 
light-touch regulatory framework that governs the Internet 
would add unnecessary regulation on broadband providers and 
would restrict their ability to continue investing in faster 
networks that consumers demand. That is why I support the 
discussion draft put forward by the chairman and Chairman Thune 
in the Senate.
    And with that, Mr. Chairman, I appreciate the unanimous 
consent.
    Mr. Walden. And the gentleman returns the balance of his 
time.
    Before I proceed to Mr. Pallone, who I believe this is your 
first hearing in Energy and Commerce as the ranking member of 
the full committee. So we welcome you for that.
    We will add, with unanimous consent, an extra minute to 
your side of the aisle, and I have been told too that 
apparently during the open statements the mics literally on 
this side were--they could hear it streaming on the Internet. 
Apparently not on your side. So I think we have got that 
corrected now. It was an attempt to throttle Mr. Doyle. It was 
not supposed to catch Anna along the way, but, anyway, I think 
we are operating on that.
    Mr. Doyle. I think this has something to do with the 
deflated footballs, Mr. Chairman.
    Mr. Walden. That Ohio State--no. I am not going there. It 
has been painful enough. I appreciate the green room.
    All right. With that, we will get serious again, and I 
recognize the gentleman from New Jersey for 6 minutes.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Mr. Chairman.
    Let me start by stressing the importance of network 
neutrality. It is the surprisingly simple concept that 
consumers, not big corporate interests, should control what 
they access when they go online, and it represents the idea 
that small businesses should be able to compete on a level 
playing field.
    Internet access has become a critical part of all of our 
lives. It is how we apply for a job. It is how we help our kids 
with our homework. It is how we grow our businesses. And that 
is why 4 million Americans reached out to the FCC demanding 
strong net neutrality protections, and those 4 million people 
expect that we here in Washington will pay attention.
    So I am heartened that my Republican colleagues now agree 
that we all benefit from clear rules of the road enforced by 
the FCC, and I welcome their interest in bipartisan legislation 
so long as it is truly bipartisan from the start.
    Mr. Chairman, I don't want to undermine the FCC's 
authority, as I think you suggested, and I certainly don't 
think that that will serve to protect consumers. The FCC must 
continue to serve an important role in the broadband age. It 
must remain the vigilant cop on the beat standing ready to act, 
whether it is to protect consumer privacy, to encourage 
accessibility for American's with disabilities, or to promote 
broadband deployment to rural areas. And just as important, it 
must maintain the flexibility to keep up with new technology.
    So while we in Congress continue our work, I do expect the 
FCC to continue its work. These are complicated issues with 
complex answers. It has taken the FCC nearly 13 months to craft 
new rules that respond to the needs of the American public, and 
Congress cannot be expected to work it all out in 13 days.
    So I urge the FCC to continue to move forward as we begin 
this legislative effort. It has been over a year since the 
court wiped out the core net neutrality rules. So it has been 
over a year since consumers and innovators last had strong 
network neutrality protections, and that is simply too long. 
The time for the FCC to act is certainly now.
    I look forward to working with my colleagues and with the 
commission to ensure that the Internet remains an open platform 
for commerce, innovation, and self-expression for generations 
to come.
    Now I would like to yield--I know I got an extra minute--so 
I would like to yield 2 minutes to Ms. Matsui, and then the 
rest of the time, which is almost 2 minutes, to Mr. Rush.
    Ms. Matsui. Thank you.
    I thank the ranking member for yielding me time, the chair 
for holding this hearing, and the witnesses for being here 
today.
    The American people have spoken clearly on how important 
the Internet is to daily lives and our economy, and I have 
personally heard from hundreds of my constituents who write, 
call, or come up to me to share their thoughts, and I heard the 
message loud and clear when I hosted a field hearing in 
Sacramento last September on net neutrality.
    I must say, it is remarkable how the debate has shifted on 
net neutrality. I am really glad that my Republican colleagues 
now agree that there are real threats to Internet openness, but 
I am concerned about the unintended consequences of the current 
draft bill. In particular, it could undermine the FCC's efforts 
to transition USF to broadband, putting at risk broadband 
deployment and adoption advances in urban and rural areas.
    That said, I do believe that there is a role for Congress, 
and that is why I introduced a bill with Senator Leahy to 
instruct the FCC to write rules that ban pay prioritization or 
so-called Internet fast lanes. The bill has two components. It 
bans paid prioritization agreements, and it does not take away 
from the commission's authority.
    By contrast, the Republican bill attempts to ban paid 
prioritization agreements. I am very concerned that the overly 
broad definition of specialized services in the bill could 
serve as a loophole for paid prioritization schemes and create 
a two-tiered Internet system.
    The Internet is dynamic. We don't know what tomorrow will 
bring us. The FCC needs flexibility to tailor rules to adapt to 
changes in the marketplace.
    As Congress considers legislation, it is important that the 
FCC does not slow down or delay its vote.
    I look forward to continuing to work with my colleagues in 
a truly bipartisan fashion to reinstate strong net neutrality 
rules.
    And I yield to Congressman Rush.
    Mr. Rush. I want to thank the gentlelady for yielding.
    I want to thank the ranking member for yielding also.
    For two decades now, the beltway battle over how to best 
ensure a free and open Internet has been fought and persisted 
without a clear victor or a clear verdict. All of this 
uncertainty harms America's broadband consumers, chronically 
and disproportionately disconnected segments of our society and 
our local and State and Federal Governments, and even our 
Nation's economy. Certainly it also affects broadband network 
and edge providers as well, but make no mistake about it. It is 
the consumers who stand to be the biggest losers of all.
    Many consumers weighed in with Congress for the strongest 
pro-consumer rules possible. These broadband consumers and 
users have said that they love and depend greatly on their 
broadband services, and that they want for their services to be 
provided on a competitive level, competitive rates, and 
competitive terms. But they also said to Washington, to us here 
in Washington, with passion and with fervor that they do not 
trust that their broadband providers will honor those terms due 
to selfish and anti-competitive motives.
    This, Mr. Chairman, should serve as a powerful reminder to 
us that the issues arising out of this controversy are 
propelled by bipartisan concerns and are amenable to bipartisan 
resolution and compromise. These issues greatly concern all 
broadband consumers and citizens in our society regardless of 
political affiliation or leaning.
    We have all seen and heard, however, that this matter is 
too important for this committee and for Congress to stand by 
or for it to consider and mark up only a majority Republican 
draft. Accordingly, Mr. Chairman, it is my intention to 
introduce open Internet legislation in the not-too-distant 
future.
    I would hope to work with my colleagues on both sides of 
the aisle with aspiration that whatever legislation is hammered 
out, that it will be clearly surely nothing but bipartisan.
    Mr. Chairman and Ranking Member Pallone, I yield back.
    Mr. Walden. Gentleman yields backs the balance of the time, 
and that takes care of our colleagues for opening statements.
    We now go to our distinguished panel of witnesses.
    And we are going to start out with Michael Powell, 
president and CEO, National Cable & Telecommunications 
Association and former chairman of the Federal Communications 
Commission, and, Mr. Powell, we are delighted to have you back 
before our subcommittee, and we look forward to your testimony.
    Please go ahead.

STATEMENTS OF MICHAEL POWELL, PRESIDENT AND CEO, NATIONAL CABLE 
 & TELECOMMUNICATIONS ASSOCIATION; CHAD DICKERSON, CEO, ETSY; 
     PAUL MISENER, VICE PRESIDENT OF GLOBAL PUBLIC POLICY, 
  AMAZON.COM; JESSICA GONZALEZ, EXECUTIVE VICE PRESIDENT AND 
   GENERAL COUNSEL, NATIONAL HISPANIC MEDIA COALITION; NICOL 
   TURNER-LEE, VICE PRESIDENT AND CHIEF RESEARCH AND POLICY 
  OFFICER, MINORITY MEDIA AND TELECOMMUNICATIONS COUNCIL; AND 
 MEREDITH ATTWELL BAKER, PRESIDENT AND CEO, CTIA--THE WIRELESS 
                          ASSOCIATION

                  STATEMENT OF MICHAEL POWELL

    Mr. Powell. Particular welcome to the new members of the 
committee. Nothing like starting with something easy.
    It is a fundamental constitutional principle that Congress 
establishes the law and federal agencies implement it. The net 
neutrality debate raises critical institutional policy and 
practical problems that only Congress can fully address.
    The open Internet struggle has been long and tortuous 
precisely because Congress has not established a clear 
foundation for the FCC to act. The commission has turned itself 
in knots for over 10 years trying to adopt a simple set of 
Internet regulations. Twice, the courts have rebuked the 
commission for exceeding its Congressional tether, even where 
it found merit in the rules themselves.
    If Congressional authority is the problem, then surely 
Congressional action is the solution. In the absence of such 
action, the commission is poised to earnestly try again with 
another approach, prompting a third round of litigation with an 
uncertain outcome.
    Congress has the power and the responsibility to end this 
roller coaster, which is damaging to everyone other than 
lawyers and advocates.
    It should further concern this institution that the Title 
II approach being pursued is establishing an FCC role and 
regulatory framework over the Internet that Congress has yet to 
fully consider and consciously adopt itself.
    Congress adopted Title II 80 years ago to address the 
parameters of telephone regulation. The technologies were 
radically different. The prevailing philosophy favored monopoly 
rather than competition. Consumers were passive recipients of 
service rather than active publishers and creators. The 
telephone era did not have giant Internet companies using and 
influencing services and network demand and consumer 
applications. Networks were specialized for a single purpose, 
unlike the convergence of today.
    Has Congress, or, for that matter, anyone, fully thought 
through whether this antiquated analog framework should govern 
our digital future? We have no doubt that Congress soon will 
seek to advance legislation to rewrite our telecom laws, but we 
stand now at the precipice of having that decision made for 
Congress rather than by Congress in the name of net neutrality, 
with potentially far-reaching unintended consequences. Five 
unelected regulators should not have the final word on these 
serious questions. The institution that represents 320 million 
Americans should decide them.
    By changing the status quo and invoking Title II to govern 
Internet affairs, the commission would affect a major and 
dramatic shift in national broadband policy, with sweeping 
domestic and international consequences. Countries like Russia, 
China, and Iran have consistently sought to subject Internet 
access to telephone regulation and give the state greater 
authority over infrastructure. They will cheer the news the 
U.S. abandoned its leadership and moral authority as a bulwark 
against government-controlled over the Internet.
    The bevy of legal and practical problems with Title II 
counsel for Congressional intervention. For one, the strong 
desire to ban prioritization is precarious under Title II, 
which bans unjust and unreasonable practices. Under decades of 
Title II precedent, carriers have been able to charge for 
providing service without violating this requirement, and while 
the FCC surely will attempt to declare all priority charges 
unreasonable, it will face serious headwinds from well-
established precedent. Only statutorily banned prioritization 
rules will avoid this risk.
    Other unintended problems are also sure to follow. One 
agency's actions will narrow the jurisdiction of another. For 
example, if the FCC declares broadband is telecom service, the 
Federal Trade Commission's authority over such actions will be 
diminished.
    Another unintended problem is the reclassification can 
result in new fees on Internet service, raising broadband bills 
for consumers and hurting our national efforts at adoption.
    America has an ambitious national broadband goal. There is 
a strong national desire to reach more Americans in more 
places. It will take nearly $350 billion by the FCC's own 
estimate to reach all of Americans with 100 megabits per 
second, and now we dream of gigabit speeds. No one can 
consciously claim that Title II will advance the flow of 
private capital necessary to meet these ambitions.
    For some, Title II's sharp edges can be smoothed by 
forbearance, cutting away the dated and choking weeds of 
onerous regulation and leaving the fruit needed to protect 
consumers, but one person's weeds are another person's fruit, 
and the continuous and vigorous battle over this, should it be 
included--and excluded, is itself a massive regulatory 
undertaking fraught with uncertainty and litigation risk.
    Uniquely, Congress has the power to eliminate all of this 
legal uncertainty, and working together in good faith and 
consensus, we believe a cooperative effort will yield positive 
results. We support legislation--we support bipartisan 
legislation and are open to working with all members of the 
committee to reach a satisfactory resolution.
    Thank you, Mr. Chairman.
    Mr. Walden. Thank the gentleman for his testimony.
    [The prepared statement of Mr. Powell follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Walden. We are now going to go to Mr. Chad Dickerson, 
the CEO of Etsy.
    Mr. Dickerson, we are delighted to have you before the 
committee. Please make sure your microphoneis on, and we look 
forward to your testimony, sir.

                  STATEMENT OF CHAD DICKERSON

    Mr. Dickerson. Great. Thank you.
    Thank you, Chairman Walden, Ranking Member Eshoo, and 
members of the subcommittee for the opportunity to testify on 
this important issue.
    As the CEO of a rapidly growing Internet company--
technology company, I am here today because the Internet, along 
with the millions of businesses who depend on it, is under 
threat.
    Etsy is an online marketplace where you can buy handmade 
and vintage goods from artists, designers, and collectors 
around the world. We have democratized access to 
entrepreneurship for over 1.2 million sellers, 88 percent of 
whom are women who collectively sold $1.35 billion worth of 
goods in 2013. Most are sole proprietors who work from home, 
they live in all 50 states, and they depend on Etsy income to 
pay their bills and support their families. Eighteen percent of 
those sellers support themselves full time on Etsy.
    To build and run the global platform that supports these 
Internet micro businesses, Etsy has raised more than $91 
million in capital, and we employ over 600 people worldwide. 
Without the incredible power of the free and open Internet, we 
would not be where we are today.
    Like many start-ups, we had humble beginnings. We started 
out of a Brooklyn apartment; went from idea to launching in 
just a few months. No one had to ask permission to launch Etsy 
or pay for the privilege of reaching consumers through Etsy at 
the same speeds as other companies. We proved ourselves on the 
open market, and this is the entrepreneurial environment that 
we hope to preserve, like you.
    Without clear bright-line rules that preserve a level 
playing field online, millions of start-ups will suffer. Etsy 
is a low-margin business. We charge just 20 cents to list an 
item, and take only 3 \1/2\ percent of every transaction. We 
couldn't afford to pay for priority access to consumers, yet we 
know that delays of even milliseconds have a direct and long-
term impact on revenue. So this isn't just about high bandwidth 
services like video, it is about every company that depends on 
the Internet to reach consumers.
    Without strong rules to prevent discrimination online, we 
would be either forced to raise our fees to have the same 
quality of services our competitors or accept the revenue loss 
that comes with delayed load times. This would hurt the micro 
businesses who depend on our platform the most.
    Etsy's users understand what is at stake. That is why 
30,000 of them join millions of Internet users to urge Congress 
and the FCC to protect the open Internet.
    In her comments to the FCC, Tina, an Etsy seller from 
Spring Valley, Illinois, captured the sentiments of many micro 
businesses when she wrote, ``We rely on all my sales to make 
ends meet. Any change in those and it is the difference between 
balanced meals for my children and cereal for dinner.''
    We applaud Congress for recognizing that strong net 
neutrality rules are essential for innovation online. The 
discussion draft for legislation addresses many of our 
concerns, and we are encouraged to see bipartisan agreement on 
many points. In particular, we support the outright ban on paid 
prioritization, blocking, and throttling. We agree that 
transparency must underpin strong rules, and we are encouraged 
to see that the rules would apply to mobile. Given that the 
majority of Etsy's traffic now comes from mobile sources, it is 
essential that the same rules apply whether you use your phone 
or your laptop to access the Internet.
    At the same time, we are concerned that the proposal does 
not ban all types of discrimination online, leaving loopholes 
that could be easily exploited. For example, under this bill, 
broadband companies could prioritize their own services over 
others. Even more concerning, the legislation would remove the 
FCC's authority to address new unanticipated types of 
discrimination. I have worked in this industry my whole adult 
life, and I know who quickly technologies change. So how can we 
be sure that this bill anticipates every possible form of 
discrimination?
    We also have serious concerns that by revoking the FCC's 
authority under Section 706, the bill would undermine the 
agency's ability to promote rapid broadband deployment across 
the country, particularly in rural areas where the Internet 
allows entrepreneurs to reach a global marketplace. For 
example, Linda, an Etsy seller from Buchanan, Michigan, said, 
``A free Internet is so important to me because as someone who 
moved to a rural area from an urban center, I rely on fair and 
open access to the Internet to grow my small Web-based 
business.''
    Finally, while we understand that this legislation is 
narrowly focused on the last mile connection, the door to that 
last mile is just as important. This bill doesn't prevent 
broadband companies from creating choke points at the entrance 
to the last mile, nor does it grant the FCC the authority to 
regulate this issue, often referred to as interconnection, 
leaving a loophole that would allow broadband companies to 
circumvent this legislation, despite its good intentions.
    Our position today is the same as it has been all along. We 
encourage the government to establish clear bright-line rules 
that ban paid prioritization, application-specific 
discrimination, access fees, and blocking online, and to apply 
those rules equally to fixed and mobile broadband, and at the 
point of interconnection with last-mile providers.
    We believe the FCC has all the authority it needs to 
implement such rules, and that Congress has an important role 
to play as well, particularly in helping to address the 
litigation risks that will inevitably follow FCC action.
    We welcome the opportunity to work with you to protect the 
open Internet once and for all.
    Thank you.
    Mr. Walden. Mr. Dickerson, thank you very much for your 
testimony.
    [The prepared statement of Mr. Dickerson follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Walden. We will now go to Paul Misener, who is vice 
president of Global Public Policy for Amazon.com, a slightly 
larger platform for sales.
    Mr. Misener, please go ahead.
    It is good to have you back before the subcommittee.

                   STATEMENT OF PAUL MISENER

    Mr. Misener. Thank you very much, Mr. Chairman. It is good 
to be back.
    Thank you, Ranking Member Eshoo, for your attention to this 
very important issue, for holding this hearing, and for 
inviting me back.
    Amazon has long supported maintaining the fundamental 
openness of the Internet which has been so beneficial to 
consumers and for innovation. Now there is widespread 
acceptance of the need for government action to ensure that 
Internet openness. Now policymakers need only decide how to 
ensure that the Internet openness of net neutrality is 
maintained and effective.
    At Amazon, our consistent business practice is to start 
with customers and work backwards. That is, we begin projects 
by determining what customers want and how we can innovate for 
them. Here, in the context of net neutrality public policy, we 
have done the same. We take our position from our customers', 
that is consumers', point of view. Consumers want to keep the 
fundamental openness of the Internet and the choice it 
provides. Consumers will recognize if their net neutrality is 
taken from them. If their net neutrality is taken, they won't 
care how or, for example, where in the network infrastructure 
it is taken.
    We believe that the FCC has ample existing statutory 
authority to maintain net neutrality, but of course, obviously, 
Congress has the power to set new policies for net neutrality, 
either entirely through a new statute or through a mix of new 
and existing statutory authority.
    Amazon remains very grateful for Congress' continuing 
attention to net neutrality. The topic certainly is worth your 
vigilant oversight, but thank you, Mr. Chairman, especially for 
creating and sharing your discussion draft bill, and for 
providing me the opportunity to begin discussing it today.
    The principles of net neutrality contained in the 
discussion draft are excellent. For example, the draft clearly 
acknowledges that throttling and paid prioritization must be 
banned; that net neutrality protections must apply to wireless 
as well as to wire line; and that providers must disclose their 
practices.
    Of course, for these excellent principles of Internet 
openness to be meaningful to consumers, they need to be 
effective. In at least three instances, however, the discussion 
draft could be interpreted to undermine that effectiveness. So 
the bill should be modified accordingly.
    First, in subsection (d), while requiring consumer choice, 
the bill would explicitly exempt specialized services from that 
requirement. This could create a huge loophole if, for example, 
specialized services involved the prioritization of some 
content in services, just like the proscribed paid 
prioritization. Consumer choice is baked into the Internet. 
Nothing would protect consumer choice more than protecting the 
open Internet from interference by broadband and Internet 
access service providers.
    Second, in subsection (f), the discussion draft bill would 
permit broadband Internet access providers to engage in 
reasonable network management, but any claim of reasonable 
network management should be viewed suspiciously if in practice 
it undermines prohibitions of blocking, throttling, 
prioritization, et cetera.
    Third, the discussion draft bill is unclear or silent on an 
important point of clarification: Which parts of the broadband 
Internet access service providers network are covered by the 
net neutrality protections.
    As indicated earlier, a consumer will not care where in her 
service providers network any interference with net neutrality 
occurs, only whether it occurs.
    In sum, these three areas of the discussion draft bill 
should be modified in order to ensure that the Internet 
openness of net neutrality is maintained and effective.
    In addition, the discussion draft should be modified to 
provide adequate legal detail and certainty to consumers and 
businesses in the Internet ecosystem. Like all businesses, 
Internet companies need confidence in the state of law and 
regulation in order to innovate and invest in products and 
services on behalf of their customers. Details, including the 
factors that would be considered during formal complaint 
procedures are essential for businesses and consumers to have 
the confidence to make informed choices about investments and 
purchases.
    We believe that the FCC should be empowered to create 
adequate legal certainty and detail through effective 
enforcement tools and notice in comment rule making, but the 
discussion draft bill in subsection (b) says the FCC may not 
expand Internet openness obligations beyond the obligations 
established in the bill. If the intention here is to establish 
a ceiling for these obligations, that certainly is Congress' 
prerogative and a reasonable expectation which we would support 
a provision like this if the bill only went so far.
    However, with such a ceiling in place, it is not necessary 
to rescind the FCC's authority under Title II of the 
Communications Act, which, as in subsection (e), which could 
leave the agency helpless to address improper behavior as well 
within its authority under the ceiling and would leave 
consumers and businesses in the Internet ecosystem without 
adequate certainty about the FCC's enforcement powers.
    Also in part, because subsection (b) could be directing the 
FCC to establish formal complaint procedures, this provision 
could be interpreted to bar the commission from notice and 
comment rulemaking in this area, and if that is the intent, we 
oppose it. Directing the FCC not to expand statutorily 
established obligations is one thing, but we believe it would 
be a mistake to prohibit the commission from providing, through 
notice and comment rulemaking, adequate legal detail and 
certainty to customers, consumers, and businesses below that 
ceiling.
    In conclusion, Mr. Chairman, I look forward to working with 
you and your committee and the FCC to ensure that the Internet 
openness of net neutrality is maintained and effective, and, of 
course, I welcome your questions.
    Mr. Walden. Mr. Misener, thank you very much, and we look 
forward to working with you as well.
    I think we have got ways to address a lot of what you 
pointed out and may actually already have, but we will look 
forward to working with you.
    [The prepared statement of Mr. Misener follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Walden. Next we go to Jessica Gonzalez, Executive Vice 
President, General Counsel of the National Hispanic Media 
Coalition. Ms. Gonzalez, we are delighted to have you here at 
our subcommittee as well. We look forward to your testimony.

                 STATEMENT OF JESSICA GONZALEZ

    Ms. Gonzalez. Thank you, Mr. Chairman, for having me back, 
Ranking Member Eshoo, and all the members of the subcommittee.
    The open Internet, as we have heard already today, is a 
crucial tool for all people to engage in our democracy, 
participate in our economy, become better educated, and share 
their stories. I am pleased that members on both sides of the 
aisle recognize the pervasive threat that blocking, throttling, 
and paid prioritization pose to the American people and our 
economy, because the open Internet truly is a bipartisan issue.
    I am not on this panel to represent vast industries. I am 
here to speak for the millions of Americans who follow this 
issue with a level of awareness that is actually very uncommon 
for inside the beltway telecom policy.
    Over the past year, I have been surprised to align on this 
issue with everyone from my conservative in-laws in the Deep 
South to my liberal friends on the West Coast, none of whom are 
particularly well-steeped in Federal policy, particularly not 
telecom policy, but they get this because it personally affects 
their lives.
    And although NHMC supports congressional attention to this 
matter to best protect consumers, I respectfully urge Congress 
to allow the FCC to exercise its Title II authority, complete 
its rulemaking process, and enact light-touch open Internet 
rules.
    This is the most certain path to ensure that individuals 
and businesses are protected without delay. It would allow the 
expert agency flexibility to respond to innovation and changes 
in the marketplace.
    The FCC has wide support from nearly 7 million Americans 
that submitted comments or signed petitions, as well as 
hundreds of public interest, civil rights, and consumer 
advocacy organizations and leaders.
    The discussion draft of legislative on the table today 
would represent a seismic policy shift with repercussions far 
beyond the open Internet debate. It has drawn robust criticism 
for four main reasons.
    First, it would strip the country's expert communications 
agency of authority to protect consumers on the communications 
platform of the 21st Century, upending consumer protections 
that Americans have come to expect and this subcommittee has 
supported for decades; privacy, network reliability, access to 
911 services, disability access, just to name a few. It 
effectively freezes the FCC in time, only allowing it to ever 
confront a handful of harmful practices that we have 
contemplated based on market conditions and technology that 
exists today.
    Second, it would pour cement on FCC efforts to close the 
digital divide, such as rural broadband subsidies and 
modernization of lifeline which could bring greater broadband 
affordability to the working poor. Today nearly one in three 
American people still lack home broadband access. The vast 
majority of these people are rural, poor, brown, black, or a 
combination thereof.
    At the same time, standardized testing in American public 
schools is moving to digital formats. It is critically 
important that we do no harm with legislation that would 
undermine serious efforts to achieve the now indivisible goals 
of digital and educational equality.
    Third, as compared to FCC rules crafted under Title II, it 
would offer consumers limited and inferior protections. The 
draft legislation does not ban unreasonable discrimination and 
creates an exception for specialized services that threatens to 
swallow the rules.
    Fourth, it would create market uncertainty by relying on a 
flawed adjudication process. Consumers and aggrieved parties 
would have the burden to identify, report, and litigate 
violations, but most of us are likely to lack the technical 
expertise to identify the violations, the source, or have the 
legal expertise to pursue enforcement, or both.
    Those who oppose reclassification point to four concerns. 
My written testimony goes into greater detail about those 
arguments, but let me summarize.
    There is no evidence that Title II would harm investment or 
innovation, hamper broadband adoption, lead to higher taxes or 
fees or welcome protracted litigation. In fact, the hard 
evidence, including statements from the ISPs themselves, 
suggest just the opposite.
    The open Internet has allowed Americans to engage in our 
democracy at a whole new level. Tea party activists, dreamers, 
organizers of Black Lives Matter are all excellent examples of 
regular people who have harnessed the power of the open 
Internet to disseminate their messages and engage in the 
political process. This is democracy and free speech at work, 
and it is a virtue deserving of the strongest protections.
    Thank you very much for having me here today. I look 
forward to questions.
    Mr. Walden. Delighted to have you back. Thanks for your 
comments on the legislation and the issue at hand.
    [The prepared statement of Ms. Gonzalez follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Walden. We will now turn to Dr. Nicol Turner-Lee, the 
vice president and chief research and policy officer for 
Minority Media and Telecommunications Council.
    Dr. Turner-Lee, delighted to have you here as well. Please 
go ahead with your testimony.

                 STATEMENT OF NICOL TURNER-LEE

    Ms. Turner-Lee. Thank you very much, Chairman Walden, 
Ranking Member Eshoo, and distinguished members of the 
committee.
    And I do have to say, as vice president and chief research 
and policy officer, that we just changed our name today at 9 
a.m. To the Multicultural Media Telecom and Internet Council. 
So----
    Mr. Walden. We reserve the right to revise and extend our 
remarks.
    Ms. Turner-Lee. And at MMTC, still acronym is the same, we 
actually support and work to represent, for those of you that 
are unaware, organizations that consist of the NAACP, The 
National Urban League, Rainbow Push Coalition, AAJC, among 
others, so as my colleague Ms. Gonzalez has recognized, we also 
stand on the side of people who are on the other side of the 
digital divide.
    And I think that is pretty important on the topic of open 
Internet because we have been actively engaged in this debate 
as historically disadvantaged communities embark on a journey 
towards first class digital citizenship and all of the 
opportunities. So we welcome and applaud the draft legislation 
addressing the President's values.
    I want to use my time to bring three issues to the 
committee's attention today. My statement is on record in much 
more detail, but my time is best spent on these points.
    I first would like to highlight the unique benefits that an 
open Internet brings to people of color and vulnerable 
populations who we represent, and encourage the committee's 
consideration of legislation that promotes an open Internet, 
and finally I would like to offer two friendly recommendations 
designed to strengthen and ensure that the legislation realizes 
the value of all consumers who want to acknowledge the promise 
of digital equality.
    I want to affirm the words of Ranking Member Eshoo that 
broadband access, adoption, and digital literacy are civil 
right prerequisites. Broadband allows people to gain new 
skills, secure jobs, obtain quality education, and receive 
greater access to healthcare.
    Today, however, too many Americans still do not benefit 
from all that broadband enables. The rate of broadband adoption 
among vulnerable populations is disproportionately low, 
contributing to a persistent digital divide. Despite growth in 
minority home, broadband adoption rates among African Americans 
and Hispanics are still lower than whites. African Americans 
over 65, for example, still exhibit especially low rates. Fort-
five percent of African American seniors are Internet users, 
yet 30 percent only have broadband at home, compared to 63 
percent and 51 percent respectively for white seniors.
    Non-users overall cite a perceived lack of relevance, 
affordability, and the lack of a device, in that order, as 
their prime reasons for not being online.
    So closing the digital divide should and must be an 
important goal for policymakers, and steering the right course 
of action to promote and protect an open Internet is one of the 
ways to get there.
    I want to acknowledge that Congress has had a proud history 
of recognizing structural injustices in our society and acting 
to correct them.
    In the 1860s Congress framed and passed the 13th, 14th, and 
15th Amendments which enabled slavery-extended protection and 
enfranchised millions of Americans for the first time.
    In the 1960s, Congress enacted the Civil Rights Act of 
1964, the Voting Rights Act of 1965, and the Fair Housing Act 
of 1968, all due in great measure to the Reverend Martin Luther 
King whose birthday we just celebrated.
    Today Congress has the opportunity to show that leadership 
again. By enacting a legislative solution that preserves the 
open Internet we all enjoy, Congress can extend the promise of 
justice, equality, and democracy to all and avoid a legal 
quagmire that will lead to an unending uncertainty for our 
economy and citizens.
    I agree with Jessica Gonzalez that an open Internet 
stimulates demand for broadband which in turn stimulates 
investment in infrastructure and innovation. At MMTC, we know 
firsthand in this, and it is our belief that increased 
investment in broadband also improves access and adoption to 
the types of innovations we like to drive in our communities, 
but of course the way that we get there is going to have an 
impact.
    For the past 20 years, administration and FCC chairs from 
both political parties have charted a successful regulatory 
platform for the Internet, and communities of color have 
benefitted. Look at the state of wireless adoption among people 
of color.
    Under the current regulatory framework, nearly 75 percent 
of African Americans and nearly 70 percent of Hispanic cell 
phone owners use their devices to access the Internet more than 
the overall population, and people of color have embraced it as 
a tool of empowerment. Under the current rules, we have 
actually seen the type of collective mobilization in Ferguson, 
Missouri, New York City, and Columbus, Ohio. These stats to 
drive policymakers to continue the progress that is already 
being made.
    But unfortunately, meaningful open Internet rules have 
failed in the FCC. Last year the D.C. Circuit Court struck down 
key portions of the commission's open Internet order, and 
notwithstanding the current regulatory framework that has 
allowed broadband to flourish and adoption to take hold, the 
FCC is now considering the imposition of Title II regulation, 
which we believe as national civil rights organizations is ill-
suited to the current realities.
    Imposing such heavy-handed framework on the Internet would 
only serve to stifle broadband deployment, discourage 
investment, and harm innovation. It would also place 
uncertainty for consumers through regressive taxation on 
universal service and potential ambiguity on consumer 
enforcements.
    Some have argued that the adverse effects of Title II 
regulation through judicious application of forbearance 
authority is the right way. We think that misses the point. If 
the commission could exercise its forbearance authority in 
productive matter, it still would take years to sort out and 
appropriately calibrate a set of rules, and this uncertainty 
will continue to drive us away from the attention of those 
issues that our community needs the most, the modernization of 
our schools, universal service reform in other areas.
    So in closing, it is for those reasons that our groups have 
actually asked that we steer away from a tight regulatory 
framework to something that has more flexibility to allow the 
ecosystem to continue to grow, and we think the proposed 
legislative is close in actually getting there.
    I would like to just close again with two additional 
recommendations for Congress to ponder in this debate as we 
look at this issue.
    First, Congress should address the harmful practice of 
digital red lining. Digital red lining is the refusal to build 
and serve lower income communities on the same terms as 
wealthier communities. In essence, it imposes digital 
segregation. Sadly, as the experience of our country shows, 
segregation harms and degrades all of us, and this is no less 
true in the digital age. Congress should empower the FCC to 
prohibit digital red lining and we urge in this legislation 
that Congress also look at how to prevent that because 
currently this is a problem.
    Second, Congress should ensure that its open Internet rules 
will be enforced. MMTC has recommended to the commission the 
creation of an accessible, affordable, and expedited procedure 
for the reporting and resolution of complaints.
    One approach would be to use the consumer friendly 
complaint process under the Title VII framework of the Civil 
Rights Act of 1964. Under Title VII, a complainant receiving 
the expedited ruling from EEOC and does not need to hire a 
lawyer or write a complicated filing, whether the precise 
details of implementing a similar mechanism in the 
communications context, the core principle here remains the 
same.
    Consumers, particularly individuals from vulnerable 
populations, deserve, as it has been mentioned, an accessible, 
affordable, and expedited procedure for ensuring that their 
government protects them, and this must apply at whatever 
solution that we seek.
    My friends, the time is now to get past the morass of a 
debate that has been lingering for more than a decade, and with 
Congress' discussion and guidance on this issue, we at MMTC 
think we can make it happen, and we look forward to working 
with Congress to do such so that we can get to the issues that 
mean the most for our communities, universal service, public 
safety, and assuring that we actually allow the Internet to 
grow to the next level of innovation to solve our social 
problems.
    Thank you very much.
    [The prepared statement of Ms. Turner-Lee \1\ follows:]
---------------------------------------------------------------------------
    \1\ Attachments to Ms. Turner-Lee's testimony have been retained in 
committee files and are available at http://docs.house.gov/meetings/if/
if16/20150121/102832/hhrg-114-if16-wstate-turner-leen-20150121-u2.pdf.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 

    Mr. Walden. Dr. Turner-Lee, thank you for your testimony 
and your suggestions.
    We will now turn to our final witness this morning, 
Meredith Atwell Baker, president and CEO of CTIA--The Wireless 
Association.
    Ms. Baker, glad to have you back before the subcommittee as 
well. Look for forward to your comments.

               STATEMENT OF MEREDITH ATWELL BAKER

    Ms. Baker. Chairman Walden, Ranking Member Eshoo, and 
members of the subcommittee, thank you for inviting me to share 
the wireless industry's perspective on the importance of an 
open Internet. At the outset I want to be clear, America's 
wireless industry fully supports an open Internet. Wireless 
users demand it in a marketplace where competition has never 
been more vigorous. In the past 20 years, the wireless industry 
has grown from a luxury product to a key driver of economic 
growth. We all benefit from faster speeds, more services, and 
lower prices.
    The U.S. is the global leader in wireless by any metric, 
and it is at the forefront of mobile innovation in health, 
automotive, and payment fields. Central to that growth was 
Congress's foresight in establishing Section 332, a mobile-
specific regulatory framework outside of Title II. Congress has 
the opportunity to provide the same stability for broadband.
    We greatly appreciate this committee's work to develop a 
regulatory foundation for future innovation with commonsense 
net neutrality provisions. The draft is an excellent start and 
offers a viable path to preserve an open Internet with 
enforceable requirements. Properly crafted legislation will 
guarantee the protections the President has called for, while 
allowing broadband providers to continue to invest billions, 
create jobs, and innovate products.
    We do not ask that wireless be exempt from any new laws, 
only that any new requirements reflect our industry, our 
technology, and our inherent differences. I want to highlight 
three key differences.
    First, mobile services are technically different and depend 
upon limited spectrum resources. This requires substantial 
network management, millisecond by millisecond, to deliver 
service to consumers. Remarkably, there is more bandwidth in a 
single strand of fiber than in all of the spectrum allocated to 
commercial mobile services.
    Second, we are competitively different. More than 8 out of 
10 Americans can choose from 4 or more mobile broadband 
providers. This is fierce competition, and it is driving new 
services, offerings, and differentiation that benefits 
consumers.
    Third, we are evolutionarily different. 4G networks are 
less than 5 years old, and the future is bright, with 
advancements like LTE Broadcast, 5G services, and connected 
life applications. It is vital that any legislation is 
sufficiently flexible to preserve the competition, 
differentiation, and innovation mobile consumers enjoy today.
    While we are optimistic that the process on the Hill will 
enhance the wireless experience for all Americans, we have 
significant reservations with the FCC's proposed path of Title 
II. The application of Title II in any form to wireless 
broadband would harm consumers and our economy. Title II is 
designed for another technology in another era, an era in which 
competition was largely nonexistent, if at all, and innovation 
came slowly, if at all.
    Given our industry's great success with mobile broadband 
outside of Title II, we have significant concerns with how 
Title II and its 682 pages of regulation would apply to the 
dynamic mobile broadband space. If the Commission proceeds with 
Title II, as opposed to the 706 path the court contemplated a 
year ago, the wireless industry will have no choice but to look 
to the courts. Given the clear language of Section 332, we have 
every confidence that we would prevail, but it is not our 
preferred course.
    Under Section 332, mobile broadband is legally different 
too. In 1993, Congress exempted future nonvoice mobile 
services, like mobile broadband, from common carriage 
regulation. It did so unambiguously.
    Given our industry's great success with mobile broadband 
outside of Title II, we have significant concerns of how Title 
II and its 682 pages of regulation would apply. The Commission 
and the courts have repeatedly found that wireless broadband is 
not a common carriage service. The FCC lacks the statutory 
authority to change course, and litigation would harm 
consumers, with a year or more of uncertainty and delay. As 
leaders across the globe are trying to replicate our mobile 
success and embrace 5G, this is the wrong time to inject 
uncertainty and delay into our Nation's efforts. We risk 
falling behind when the stakes have never been higher and our 
connected life and global competitiveness are more within 
reach.
    The better approach would be for Congress to act and end 
this debate. Doing so would free us to turn to pressing 
bipartisan issues like spectrum reform and Comm Act 
modernization. By acting, Congress can help ensure that the 
United States remains the most dynamic and innovative mobile 
ecosystem. Thank you for the opportunity to appear on today's 
panel, and I look forward to your questions.
    Mr. Walden. Ms. Baker, thank you for being here.
    [The prepared statement of Ms. Baker \2\ follows:]
---------------------------------------------------------------------------
    \2\ Attachments to Ms. Baker's testimony have been retained in 
committee files and are available at http://docs.house.gov/meetings/if/
if16/20150121/102832/hhrg-114-if16-wstate-bakerm-20150121-u1.pdf.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 

    Mr. Walden. And thanks to all of our witnesses. You have 
blessed us with some really good thought starters. And some of 
you like what we are doing, some of you don't. All of you, I 
think we can all agree on the principles at stake here. It is a 
matter of how we get there.
    I have got a couple of questions I want to ask. I will lead 
off.
    To follow up on your testimony, Ms. Baker, regarding 
Section 332, and I am not trying to mimic our former chairman, 
Mr. Dingell, but in the essence of time I have a couple of yes-
and-no questions that really would be helpful. And I would 
start with Mr. Powell and just work down.
    Yes or no, do you agree with Ms. Baker that mobile would 
not be covered under the FCC's existing authority when it comes 
to applying these new net neutrality standards? Mr. Powell?
    Mr. Powell. I forgot whether it is phrased as yes or no, 
but we believe that the FCC could reach wireless by 
reclassifying much as they are proposing to do with respect to 
fixed broadband.
    Mr. Walden. So you think they could get there, even though 
332 has a different view of that.
    Mr. Powell. Not without risk, but we do believe that they 
could.
    Mr. Walden. All right.
    Mr. Dickerson.
    Mr. Dickerson. I am not an attorney.
    Mr. Walden. That is two of us. But I stayed in a Holiday 
Inn, so I can legislate.
    Mr. Dickerson. I think the most important thing for us is 
that in our minds there is no difference between mobile and 
broadband.
    Mr. Walden. So you want them both covered?
    Mr. Dickerson. Both covered in any regulations.
    Mr. Walden. Right. On these protections. OK.
    Mr. Misener?
    Mr. Misener. I agree with Chairman Powell's assessment, 
legal assessment. I also agree that consumers view these 
interchangeably----
    Mr. Walden. Right.
    Mr. Misener [continuing]. And it should be the same policy 
for both.
    Mr. Walden. So you think it is legally sustainable.
    Ms. Gonzalez.
    Ms. Gonzalez. I agree. It is legally sustainable.
    Mr. Walden. All right. Ms. Turner-Lee.
    Ms. Turner-Lee. I am not an attorney, but we think that 
Title II would actually stifle the expansion of mobile. So we 
think that is a bad idea.
    Mr. Walden. Ms. Baker, one more time from you.
    Ms. Baker. Mobile broadband has never been under Title II 
because of the explicit expression of Congress, so it is not 
sustainable.
    Mr. Walden. So there might be an opportunity for litigation 
here, you think. This is my point. We have got some really 
talented people, some are attorneys, some are not. Some are 
backed up by really smart attorneys as well. There is division 
right here on this panel. This is where I think certainty 
matters and legislating matters.
    Yes or no, have you actually seen what the FCC is 
proposing? Mr. Powell.
    Mr. Powell. No.
    Mr. Walden. Mr. Dickerson.
    Mr. Dickerson. We have seen principles.
    Mr. Walden. No, I mean have you seen the language?
    Mr. Dickerson. No.
    Mr. Walden. Got it.
    Mr. Misener.
    Mr. Misener. No.
    Ms. Gonzalez. They don't typically release the order. But I 
have heard a great deal about what is in.
    Mr. Walden. Oh, you have. But you haven't read it?
    Ms. Gonzalez. Haven't read it, no.
    Mr. Walden. OK.
    Ms. Turner-Lee. Don't know nothing.
    Mr. Walden. Ms. Baker.
    Ms. Baker. No.
    Mr. Walden. All right. And does anybody anticipate they 
will see it before they vote on it?
    Mr. Powell. No.
    Mr. Dickerson. I am sorry, could you repeat that question?
    Mr. Walden. Does anybody anticipate actually being able to 
see the language before the commissioners are called upon to 
vote on it?
    Mr. Powell. No.
    Mr. Walden. Mr. Dickerson.
    Mr. Dickerson. We have found the FCC process so far to be 
quite open, so we believe it is quite possible that we could.
    Mr. Walden. All right.
    Mr. Misener.
    Mr. Misener. No.
    Mr. Walden. Ms. Gonzalez.
    Ms. Gonzalez. Not sure if we would see it.
    Mr. Walden. Right.
    Ms. Turner-Lee. Probably not.
    Ms. Baker. No.
    Mr. Walden. We have two former commissioners, both of whom 
said very unlikely, nope, that you will actually see it. That 
is why I think it is a better process. You will actually get it 
see it through a legislative, transparent, open environment. 
Text is posted. You all have given us great input as we move 
forward.
    There is a disagreement, I will say, at least this is what 
I am hearing, regarding the application of universal service 
fund fees. If I heard different testimony correctly, some 
believe that the FCC's order would allow it, some believe it 
wouldn't. Some think our bill would preclude it, some wouldn't. 
My question to you is, when it comes to universal service fees, 
under what we know of the FCC's order, what they are proposing, 
would the Internet now be subject to USF levy?
    Mr. Powell.
    Mr. Powell. Yes. The way it works in short is that Congress 
requires an assessment of universal service from any 
telecommunication services provider. If the FCC reclassifies 
broadband, it will immediately be in that classification and 
subject to that assessment. There is an argument that the 
Commission could theoretically forebear from that, but in the 
absence of that action it would absolutely result in increased 
charges on federal universal service.
    Mr. Walden. All right. There is also an argument out there 
in the public, some agree, some disagree, that if the FCC goes 
down a Title II path and declares that the Internet is a public 
utility under Title II, that that nearly totally eliminates the 
Federal Trade Commission's authority, because they don't have 
authority on regulated common carriers. Correct?
    Mr. Powell, can you speak to that?
    Mr. Powell. That is correct. Under the Clayton Act Section 
5, the FTC is prohibited from exercising its authority over 
privacy, data security, and a number of other things against 
telecommunication services providers. They are obviously a 
champion of privacy today, and have broad-reaching authority to 
do so. That would be disenfranchised by this decision.
    Mr. Walden. All right.
    Mr. Misener, finally, you raised concerns in your testimony 
about specialized services--you are not the only one--that 
exemption in our draft legislation. Now, both the FCC and the 
President have said a specialized services exemption is 
necessary, and the language in our draft tracks the FCC's 
proposals. Has there about been a net neutrality rule proposed 
that does not acknowledge the need for specialized services?
    Mr. Misener. I can't say that there hasn't been one, but 
what we are concerned about, if that becomes a substitute for 
paid prioritization.
    Mr. Walden. Right.
    Mr. Misener. So that is the concern. Whether someone has 
proposed it elsewhere, I don't know.
    I will point out, however, in light of one of the prior 
comments by Chairman Powell, that he is viewing Title II as a 
binary thing, either it is all there or it is not. The 
Commission did forebear from Title II across the board. It need 
not have back in 2002. And so it could be partially unforeborn, 
as it were, and done very judiciously. So I think we can be 
much more precise about what this means and not view it as an 
all-or-nothing solution.
    Mr. Walden. You could also have another Commission that 
decides to change all that too. So that gets to our issue of 
certainty.
    I have gone over my time. I now recognize the gentlelady 
from California, Ms. Eshoo.
    Ms. Eshoo. Thank you, Mr. Chairman.
    I want to thank all the witnesses. I think that you have 
done a marvelous job through your testimony today to highlight 
what you like and what you don't, where you agree and where you 
don't. And I think that you have done it very well, and I am 
grateful to you for it.
    I just want to make a comment before I begin with my 
questions. It is thrown around--and it is a heavy charge, 
because everyone cares about this--and that is that if we go, 
we move in a certain direction, that the private sector will 
stop investing. That is a big chill for me and for everyone 
else. But there isn't anything to substantiate that. I mean, 
when you look at the wireless auction, billions of dollars have 
come in. And when we began that effort, Chairman Walden, 
myself, and the subcommittee, people laughed, and they said you 
are not going to raise a dime out of this. Forty-five billion 
dollars so far. Well, I don't know about anyone else, I think 
$45 billion is a lot of money. That is a lot of investment. 
That is worth something. And the CFO of Verizon said, we will 
keep investing whether there is Title II or not. The CTO of 
Sprint. I don't think these are insignificant comments.
    So I think it is important for the record, if someone makes 
that charge, then it should be backed up for us, because we 
need facts and the evidence that comes with the facts. I think 
that that would be most helpful to us.
    I want to go to Mr. Dickerson. I should say to everyone, 
today is the first time I met Mr. Etsy. But get a life, Anna, I 
met him on C-SPAN. He was part of a conference, the Washington 
ideas conference, and I was so taken with how he presented 
himself, what he knew, and what his company has been able to 
do, I said let's invite him in and be a witness.
    So thank you for being here. And thank you for all the jobs 
that you have created.
    The proposed bill doesn't prevent a broadband provider from 
prioritizing content from one of its own affiliates. So my 
question to you is, if a broadband provider were to prioritize 
an affiliate's content, what effect would that have on Etsy? 
And most importantly, everyone that deals with you is a 
company. They have created a new company. What kind of an 
effect would that have?
    Mr. Dickerson. Yes. One thing that you may not know about 
me, I was actually chief technology officer before I was CEO. 
So I know a lot about technology. And one of the things that we 
know is that for commerce sites, for business sites, and I 
define this broadly from Etsy to Amazon to Google, that the 
speed of your Web site is absolutely directly correlated with 
revenue. So if things are slower, revenue drops. If things are 
faster, revenue goes up.
    So in a world of paid prioritization, if smaller companies 
like Etsy were disadvantaged against larger companies, then you 
could see the larger companies see advantages purely based on 
speed. Higher revenues. And this would hurt the Etsy sellers 
who are receiving lower speeds than some of the other 
competitors.
    Ms. Eshoo. Could it put them out of business?
    Mr. Dickerson. Put them out of business. And as I said in 
my remarks, we have sellers who are making money using the 
Internet in rural areas and elsewhere, and they are using this 
money to feed their families, pay for school, do all the things 
that they need to do in their lives.
    Ms. Eshoo. Let me go to Mr. Misener. Under the proposed 
legislation the problem of interconnection abuse is not only 
ignored, but the FCC is prevented from doing anything about it 
in the future. Now, do you believe that if interconnection 
isn't explicitly addressed, how would your business and the 
ability to serve your customers, what would happen?
    Mr. Misener. Thank you, Ms. Eshoo, very much. I am not so 
clear in the bill whether it is precluded or whether it is not. 
Some people believe very strongly it is precluded. I think it 
is silent and it needs to be explicit that it is included for 
the very reason I stated in my testimony, which is consumers 
shouldn't care. A customer of Amazon should not care where in a 
network operator's network discrimination is occurring, only 
that it is occurring. And to leave that out is a major gap in 
the legislation, and I would like to see that filled.
    Ms. Eshoo. Good.
    Let's see. I am over time. Mr. Chairman, I failed to ask 
for a unanimous consent request to include in the record a 
letter dated January 20 from the mayors of New York and San 
Francisco, and the letter urges the FCC to adopt the strongest 
possible open Internet rules using Title II. And I also ask 
that letters from the National Association of Realtors and a 
group of racial justice organizations be included in the 
record. Both letters reiterate that the legislative process 
should not hold up the FCC from moving forward with strong, 
legally enforceable open Internet rules.
    Mr. Latta [presiding]. Without objection. \3\
    [The information appears at the conclusion of the hearing.]
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    \3\ The information has been retained in committee files and is 
also available athttp://docs.house.gov/meetings/if/if16/20150121/
102832/hhrg-114-if16-20150121-sd009.pdf.
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    Ms. Eshoo. Thank you, Mr. Chairman. Yield back.
    Mr. Latta. The chair recognizes himself for 5 minutes. And, 
again, thanks to our panel for being here today. And as the 
gentlelady just said, it has been a very interesting discussion 
today.
    Mr. Powell, if I could start with a question for you. I 
found your testimony very interesting about when we are dealing 
with regulations in this town, about trying to put round pegs 
in square holes and all the different things that folks out 
there are facing. But for many of us, we have very diverse 
districts. We represent suburban, urban, rural. But with many 
of the cable operators that I have in my area there have been 
concerns that the prospect of Title II regulation may require 
them to overhaul their billing practices, change their pole 
attachment rates, require them to review all of the customer 
privacy terms and conditions, and subject them to new 
enforcement rules. For many of these small companies, this 
would stifle future investment. Balancing potential harms with 
the new regulatory burdens doesn't seem to be equitable to 
those small providers. Should small providers be exempt from 
any network neutrality rules?
    Mr. Powell. First of all, I would say that we as an 
industry, and I would think that my small members would concur, 
are quite supportive of both the concept of open Internet and 
the government's interest in developing strong and sustainable 
rules. It is simply a false choice to suggest that we are 
opposed to the core and substantive effort to do so.
    What we are concerned about is in the effort to do so we 
will employ a comprehensive, complex regulatory regime that 
will substantially raise the costs of being in the ISP 
business. Cost management is a critical concern for small 
businesses, much more than even the larger. And on the margins 
of uneconomic regions that have difficulty, like rural America, 
anything that adds to the costs of deploying that 
infrastructure in those places will dampen both the ability and 
the enthusiasm to reach the hardest parts of the country.
    Mr. Latta. Thank you.
    Ms. Baker, if I could turn to your testimony, you also had 
some discussion about rural America in it, under your section 
regarding the significant risk of Title II. And you mentioned 
that if the Commission proceeds down that path that litigation 
would inevitably have more delays and uncertainties out there, 
and it's also interesting that the harm may be particularly 
acute for rural customers, as a collection of regional 
providers explained that ``applying an outdated and backward-
looking Title II common-carriage regime to our services...would 
stifle innovation and investment and would do a disservice to 
rural America.'' Could you elaborate on that disservice to 
rural America?
    Ms. Baker. Of course. Our association this year is chaired 
by Ron Smith, who is president and CEO of Bluegrass Cellular 
from Kentucky, and we brought our rural carriers in to visit 
with the FCC. They don't have armies of regulatory lawyers to 
go and comply with transparency and other burdens. Mobile 
broadband has never been under Title II. The uncertainty has 
already stifled their deployment. They are worried. They do not 
know what Title II brings.
    And, additionally, the wireless industry is extremely 
competitive. They need to differentiate to serve their 
communities. They need to make sure that they can compete with 
different concepts, and they are not sure what Title II will 
bring them in that respect.
    So the lawyers and what Title II would bring is unknown. 
Competition and differentiation are important to our rural 
carriers. And I think that is at risk under Title II.
    Mr. Latta. Let me ask you this, because when I am out in my 
district and talk to folks, especially if you are a small 
business way out in an area that might not have very good 
coverage. They are concerned, in fact I just talked with 
somebody not too long ago, about 2 weeks ago, that they have a 
problem with being able to connect with their costumers, even 
though people are trying to contact them. So are you saying 
build out and things like that for some of these folks would be 
hampered because of that, because of Title II?
    Ms. Baker. Build out and advanced services.
    Mr. Latta. OK. Thank you.
    Mr. Powell, if I could go back to your testimony, you go 
into great detail about how the current light touch regulatory 
structure has spurred a rapidly evolving and successful 
broadband ecosystem. Will Title II regulations do anything to 
encourage continued growth as we have seen over the past 15 
years? And would the reclassification encourage incumbent 
providers to upgrade networks or new companies to enter the 
market?
    Mr. Powell. I think, all hyperbole aside, the issue isn't 
whether people will invest. Of course they will. They have 
businesses to run. The real question is, will it be at a 
diminished and dampened level compared to the velocity and the 
ambitions that the country has? We hear the President and other 
people talk about wanting the Nation to achieve world class, 
top broadband speed and status. We want gigabit to every 
American, we want every American to have access to the 
Internet, and we are impatient about that.
    Networks are rebuilt every 18 to 24 months to the tune of 
$30 billion to $50 billion annually. To get to gigabit speeds, 
we are talking about hundreds of billions of dollars required 
over some amount of time. It is simply common sense to 
understand increasing regulatory costs, increasing uncertainty 
certainly will slow the magnitude or the velocity or the timing 
or the pace of those evolutions. And I am sure even in 
companies like Mr. Etsy's or Amazon they have just as much of 
an imperative of having a continued high growth evolution of 
network capacity as the primary input to the businesses they 
provide.
    So we do believe both the increased costs associated with 
the regulatory environment, the cost of borrowing that will go 
up when now the rate of return is based on being a regulatory 
industry rather than a lightly regulated one, and the years of 
uncertainty to truly finalize and settle and stabilize the 
rules will probably have a negative and depressive effect. All 
you have to do is look at the recession, when companies had 
plenty of capital but were unwilling to deploy or hire or 
invest because of the uncertainties that surrounded the market 
during the depths of the recession to have an example of how 
this works.
    Mr. Latta. Thank you very much.
    And my time has expired. And the chair recognizes Mr. 
Pallone for 5 minutes.
    Mr. Pallone. Mr. Chairman, I yield to Ms. Eshoo.
    Ms. Eshoo. I thank the gentleman.
    I just want to state for the record something that is very 
important given what Ms. Baker said. Wireless voice has been, 
as you know, a former commissioner of the FCC, under Title II 
since 1993. So I think everyone needs to have an appreciation 
of that, and I don't think the testimony reflected that.
    Thank you.
    Mr. Pallone. Thank you.
    Ms. Gonzalez, I think we both agree that putting net 
neutrality protections into law would be a win for consumers. 
But how might consumers lose if Congress were to enact the 
draft bill that we are discussing today?
    Ms. Gonzalez. Thank you, Congressman Pallone, for the 
question. I think with what is on the table today there are 
serious threats. This undermines FCC efforts to bridge the 
digital divide. Particularly concerned with rural subsidies and 
efforts to reform the lifeline program, which could have the 
potential to bring affordable broadband to the working poor. It 
undermines privacy, truth in billing, all kinds of consumer 
protections that we as Americans have come to expect and rely 
on, and it calls into question the FCC's ability to continue 
protecting us on the communications platform of the 21st 
century.
    Mr. Pallone. Thank you.
    Now, my Republican colleagues characterize their draft bill 
as consistent with the FCC's 2010 net neutrality rules. Do you 
agree that the draft bill provides the same level of protection 
as the 2010 rules?
    Ms. Gonzalez. I think it is true there are some rules that 
look like the 2010 rules. There are a number of distinctions 
that I laid out in my testimony, but I think the critical 
distinction is that it strips the FCC of any flexibility to 
oversee consumer protection and ensure that there are not 
harmful, discriminatory practices on the Internet. And so that 
is the concern. It essentially freezes the FCC in time so that 
it cannot address any harms that fall outside of the principles 
laid out in the draft legislation, nor can it address any new 
harms that present themselves as technology and the marketplace 
evolve.
    Mr. Pallone. Thank you.
    Mr. Powell, we have heard the argument today that Title II 
will stifle innovation and investment. In fact, I think the 
chairman called it the nuclear option. How would we evaluate 
this argument in light of the fact that cable companies' stock 
prices are up since President Obama announced his support for 
Title II?
    Mr. Powell. Well, public stock prices are a complex 
question. I am no market expert. But a careful examination 
historically over periods of regulatory intervention versus 
periods of light regulation will demonstrate a clear pattern. 
In the wake of the 1992 act, when cable rates were regulated, 
investment was depressed for several years until the prospect 
of the 1996 act, which deregulated those rates again and they 
soared. In 2001 and 2002, when the decisions to regulate 
broadband as an information service were put in place, it 
unleashed a radical increase in investment, totaling $1 
trillion over the course of the year.
    I sincerely believe that the market believes in the 
assertions and promises that Title II will not include rate 
regulation, it will not include the whole bevy of onerous 
regulations that exist. But unless that is clearly identified 
in an unequivocal way, I don't think it is priced into the 
market, and very likely would be if anything changed.
    Mr. Pallone. Maybe the economy is just getting so good 
that----
    Mr. Powell. Could be that too.
    Mr. Pallone. We are just seeing it soar these days based on 
what the President said last night.
    One more question. Most broadband providers, including your 
member companies, say they are already in compliance with 
network neutrality, and what they are really afraid of is the 
rate regulation by the FCC, but both the President and the FCC 
have said they support forbearance from regulation of consumer 
prices. So, Mr. Powell, if we all agree rate regulation should 
be off the table, couldn't Congress narrowly address that issue 
in legislation, and couldn't there beunintended consequences 
from placing the kind of broad restrictions on the FCC's 
authority that are in the draft bill?
    Mr. Powell. Thank you, sir. I would say two things. First 
of all, rate regulation is the most dangerous of all of the 
provisions, but I wouldn't concede that of the thousands of 
regulations in Title II that alone is the sole focus of our 
concern. We do appreciate the President saying that rate 
regulation should be forborne from, and Chairman Wheeler's 
assertions.
    But simultaneously, we have heard Chairman Wheeler talk 
about the adoption of Sections 201, 202, and 208. Section 201 
is the statutory provision where rate regulation is derived. It 
says that to ensure that practices for charging will be just 
and reasonable. That is the basis and the historical basis of 
the Commission's rate regulation.
    So we don't yet have any confidence that the words are 
matching the direction of the order and whether the government 
will make clear that rate regulation is off the table or merely 
say they have the power to rate regulate but for now are 
choosing not to.
    Mr. Pallone. Thank you.
    Thank you, Mr. Chairman.
    Mr. Walden [presiding]. Thank the gentleman.
    I will now recognize the gentleman from Illinois, Mr. 
Shimkus.
    Mr. Shimkus. Thank you, Mr. Chairman.
    My good friend Congresswoman Eshoo kind of had a shot 
across the bow at former Commissioner Baker, now president or 
chairman or czar of CTIA, and so I thought I would give her a 
chance to maybe respond to the statement made by my friend 
Anna.
    Ms. Baker. Thank you. I appreciate that.
    Ranking Member Eshoo is correct. First of all, we know the 
current framework is working. We have $112 billion of 
investment in the wireless industry in the last 4 years. But 
let's go to 1993, when Congress was enacting Section 332 and 
deregulating wireless. They did it two ways. They did two 
buckets. They did CMRS, which was mobile voice, and they did 
that subjected to limited Title II requirements. They 
separately created a second bucket, which is called PMRS, and 
that was for all new services, like mobile broadband, and they 
specifically exempt the FCC from applying Title II requirements 
on mobile--well, new services, which mobile broadband is a new 
service. FCC has always acted in accordance with that, and the 
court has always upheld that mobile broadband is not regulated 
by Title II and cannot be, according to the explicit language 
of Congress.
    Mr. Shimkus. Great. Thank you.
    And I know my colleagues have given some credit to the 
chairman of the subcommittee on movement. I mean, I am a paid 
prioritization guy. So that is where I come from in this 
debate. And I have always been the point that if you are going 
to make the $30 billion of investment every 18 months to 
upgrade the pipes, you have to have revenue to do that or you 
have to have a business model to do that.
    My whole position in this has not been limited and 
government control of the existing pipes, but encouragement of 
the expansion of more. But that was then, this is now, we are 
in a new world order where I think we have now looked at the 
debate and said--and businesses have done that too--and said, 
hey, we need to get this monkey off our back, we need to get 
some rules and some certainty. Businesses always talks about 
certainty.
    So, again, credit to the chairman by saying, OK, well, 
let's go back to the previous debates, look at what was put out 
in front by our colleagues, where can we find middle ground? 
And I believe that is the product that Chairman Walden has set 
forth, now with great consternation from my friends on the 
other side.
    So I am with the chairman. I think we can move forward and 
set some certainty. But I am a legislator. Right? This process 
we want to legislate, we want to define in law, and then allow 
the executive branch, or in this case the FCC, to implement the 
law. Because as, again, Chairman Walden said, if another FCC 
comes and is established by some other President, it could get 
turned topsy-turvy again.
    So I just wanted to just in the big point just give some 
credit about how even Chairman Walden is bringing some of us 
kicking and screaming along with him on this policy.
    Mr. Walden. Boy, can he kick.
    Ms. Eshoo. Would the gentleman yield just for a second?
    Mr. Shimkus. Yes, I would.
    Ms. Eshoo. I am Catholic, and for Catholics, we understand 
confession. So thank you.
    Mr. Shimkus. I still believe in the paid prioritization and 
incentivizing build-out. I am not sure we get there this way. 
And that is my concern.
    Mr. Walden. I appreciate it. Would the gentleman yield?
    Mr. Shimkus. I would.
    Mr. Walden. I appreciate that. And remember part of what 
drives us to legislation. First of all, we would want the FCC, 
before they go off and regulate something that everybody has 
testified has worked pretty darn well, right, I mean what we 
have today has been light touch regulation. That is how it has 
been built out. There is no overwhelming evidence of clear 
market failure that would drive to deep regulatory control from 
Washington top down. That is where some of us have been, why do 
we have to go down this path?
    What is before us today, though, is the President is now 
turning the FCC into his open puppeteer here, you know, and 
saying here is what you have to do, which goes beyond where the 
FCC chairman said he thought he should go, or what was right 
for the market. He is being pushed. And then he said, we are 
going to act at the FCC by February 26. And by the way, none of 
us here is going to necessarily see that order. That is part of 
our reform effort, by the way, which we passed out of the 
House, where we would have more transparency in the process.
    So they are moving. We don't know precisely what that is 
going to look like. We would rather give certainty because of 
this issue that Ms. Baker has outlined regarding mobile 
devices, because Mr. Etsy and Mr. Misener, as you know, we are 
all going to a mobile world. And yet the statute under 332 is 
pretty clear, that authority doesn't exist at the FCC. Now, 
they may try to go there, and there is dispute whether you can 
get there and sort of hook something around. You are going to 
be in court. Consumers aren't going to get certainty. The 
marketplace isn't going to have certainty. And for the third or 
fourth time, the lawyers are going to get rich. And, Mr. 
Dickerson, you and I aren't lawyers. So all we are going to do 
is get to pay the bill here.
    So I would prefer to get the committee together, do what we 
do as a committee, find a common ground here. And that is why 
we started with the 2010 order, we started with a lot of the 
work that the Democrats, frankly, had done with Mr. Waxman. If 
you go through section by section you will see that here. And 
then we just want to give pause to the market. So, anyway, I 
have overextended your time.
    Mr. Shimkus. I yield back the balance of my time.
    Mr. Walden. Thank you.
    Where do we go now? We go now to Mr. Doyle, who hopefully 
will be streamed on the Internet on this version of his 
comments.
    Mr. Doyle. Thank you, Mr. Chairman.
    Let me start by saying I am very concerned about the way in 
which this bill strips the FCC of its authority under Section 
706 and prevents the FCC from giving new entrants access to key 
infrastructure under Title II. The FCC needs access to every 
tool in its arsenal to promote and encourage the build-out of 
advanced broadband infrastructure. Municipal broadband and new 
entrants in the marketplace, like Google Fiber, they are 
driving U.S. innovation and driving ISPs to offer faster, 
cheaper services by bringing much-needed competition to the 
broadband market. These build-outs also create jobs across the 
country, and it is often in areas where ISPs have opted not to 
make the investments theirselves.
    I want to ask Mr. Misener and Mr. Dickerson, both of your 
companies offer innovative and high-bandwidth applications. Mr. 
Misener, I understand that Amazon has recently begun streaming 
in 4K. Are either of you concerned that the draft bill does not 
include any mention of peering or interconnection, particularly 
given how congestion at points of interconnection has recently 
been used to leverage payments from edge providers?
    Mr. Dickerson. I will speak first. We are absolutely 
concerned that interconnection is not included. I agree with 
what Mr. Misener said earlier, we think very much about our 
customer experience and their experience of the Internet. So 
regardless of whether the choke point may happen upstream or in 
the last mile doesn't matter. So interconnection is very 
important to us.
    Mr. Doyle. Mr. Misener.
    Mr. Misener. I share that view on behalf of our customers. 
It is one thing that customers just simply should not need to 
care about. Where throttling or discrimination or paid 
prioritization takes place in a network they shouldn't care. 
Frankly, they shouldn't need to care much about where in the 
statute their rights are protected, where net neutrality is 
extended. It could be done in Congress, it could be done at the 
Commission, a mix of the two. And I would suggest that 
consumers really don't care, they just want their net 
neutrality.
    Mr. Doyle. Thank you.
    Ms. Gonzalez, do you want to add to that?
    Ms. Gonzalez. Thank you, Congressman Doyle. I think we 
should consider anything that impacts a consumer's ability to 
access what they want to access on the Internet. The discussion 
draft strips the FCC of authority to even investigate this 
issue, and that is very concerning.
    Mr. Walden. Would the gentleman just on that point? Because 
I don't believe our draft does that.
    Mr. Doyle. As long as you give me all my time back.
    Mr. Walden. I will give you all your time back. I don't 
believe our discussion draft does that, and would welcome that 
opportunity. An on the interconnection piece, we leave that 
authority with the FCC. We don't do away with that here. So 
although it is absent in the bill, it is still resident at the 
Commission. So that interconnection piece we felt was taken 
care of. We would be happy to have a further discussion. I 
yield back.
    Mr. Doyle. Thank you, Mr. Chairman.
    Mr. Misener and Mr. Dickerson, the draft bill also provides 
this carveout for so-called specialized services, yet it 
doesn't allow the FCC to define what constitutes a specialized 
service. Can you envision this language being used by an ISP to 
sell preferred treatment or advantaging one competitor over 
another or even they themselves providing specialized services 
that unfairly compete in the marketplace?
    Mr. Dickerson. Absolutely. I think the lack of specificity 
in the language could allow for many applications that could be 
tantamount to discrimination. So, yes.
    Mr. Doyle. Mr. Misener.
    Mr. Misener. Mr. Doyle, certainly it would permit it with 
respect to affiliated content. So the network provider itself 
could engage in the provision of specialized services, which 
would look a lot like paid prioritization, only it is just a 
matter of ownership as opposed to payment by a third party. So, 
yes, we are very concerned.
    Mr. Doyle. Thank you.
    I just want to add on to what Ms. Eshoo was saying too 
about we have read in several news reports that senior 
executives from major companies that are represented by 
Chairman Powell and Ms. Baker, having made statements about 
Title II, which, Mr. Chairman, I would like to enter into the 
record.
    The first is one now that Comcast, Charter, and Time 
Warner, all members of Chairman Powell's organization, and I 
quote, Charter Chief Executive Tom Rutledge said that so long 
as the Federal Communications Commission waived parts of Title 
II that weren't relevant, a step that Net Neutrality advocates 
support, it would be an acceptable outcome. Similar statements 
were made by Comcast and Time Warner Cable.
    Stephen Bye, the Chief Technology Officer of Sprint, a 
member of Ms. Baker's organization, said Sprint will continue 
to invest in data networks regardless of whether they are 
regulated by Title II, Section 706, or some other light touch 
regulatory regime. And Francis Shammo, the CFO of Verizon, 
said, ``I mean to be real clear, I mean this does not influence 
the way we invest. I mean we are going to continue to invest in 
our networks and our platforms, both in Wireless and Wireline 
FiOS where we need to. So nothing will influence that.''
    So I would like to enter these three into the record, Mr. 
Chairman.
    Mr. Walden. Without objection.
    [The information appears at the conclusion of the record.]
    Mr. Doyle. I thank you, and I yield back.
    Mr. Walden. The gentleman yields back.
    We now turn to Mr. Guthrie for 5 minutes. Oh, wait a 
minute, Mr. Barton is back. I am sorry.
    Mr. Barton. I need to get reconnected, Mr. Chairman.
    Mr. Walden. All right. Then he will yield. And I think next 
is Mr. Guthrie.
    Mr. Guthrie. Thank you very much. It is a privilege to be 
here.
    And sorry, on this committee we have so many subcommittees 
going on with interesting testimony. I was out just a few 
minutes ago. And I understand, Ms. Baker, you mentioned 
Bluegrass Cellular, which is in my district. And we are very 
proud to have a very interesting concept and a successful rural 
carrier. And I understand you also talked about issues facing 
small rural carriers. But in the context of evaluating what 
constitutes reasonable network management, how are congestion 
issues different for wireless networks, particularly in small 
rural carriers?
    Ms. Baker. Well, that is a great question. I did talk about 
Bluegrass Cellular. They are our chairman this year. And they 
are deeply concerned. They have issued a letter in the record 
at the FCC. I am happy to offer it into the record here about 
their concerns for rural carriers. So with no objection? So 
there we go.
    As far as the technical capacity and the reasonable network 
management standard, we have to be very careful. If, say, Mr. 
Latta and Chairman Walden were reliving the national football 
championship and Ranking Member Eshoo were tweeting, and you 
were taking your e-mail, if you were all on the same service 
provider, you would all be on the same cell. If we had a bunch 
of 16-year-olds walking through doing a tour of what Congress 
looks like, that is a millisecond by millisecond management 
that has to happen by our carriers. That is the same cell. It 
is constrained. One strand of fiber is the same capacity of the 
entire electromagnetic spectrum.
    So there is an awful lot of network management that goes 
on. These people, if you were a CTO of one of these smaller 
carriers, you are updating any sort of things that can help you 
handle this data capacity, just amazing upload. You say $45 
billion in the spectrum auction. Well, it is no surprise 
because the data that we use has increased by 730 percent.
    Mr. Guthrie. Was that the same as congestion issues and 
interference issues? Is that different?
    Ms. Baker. Yes.
    Mr. Guthrie. And how are they different?
    Ms. Baker. The data is increasing, so the congestion is 
increasing. So we are all using more data. So it is more and 
more congested, and we have to manage our network more and 
more.
    Mr. Guthrie. It is all about interference, interference 
issues.
    Ms. Baker. Interference is if we are all using the same, if 
it is raining outside, if more people come onto our cell site, 
then we have to manage it, we have to make sure that it is 
optimized so that all of us have the best user experience.
    Mr. Guthrie. Well, thanks. And thanks for mentioning 
Bluegrass Cellular. It is a great business.
    And, Mr. Powell, I have a question. I know this issue was 
touched here earlier, but I wanted your input. The FCC, do they 
need to act in February? I mean, everyone wants the Internet to 
remain open and vibrant, but is there some particular reason 
the FCC shouldn't wait and see whether Congress can enact a 
bipartisan bill?
    Mr. Powell. It is really the decision of the Commission and 
the chairman. That is the schedule he establishes. He has that 
authority under the statute. I do believe that the Commission 
should always be respectful of the legislative process and 
provide both the expertise it needs to make a decision. But I 
also do respect their separate and different authorities, and 
they set their own timelines.
    Mr. Guthrie. So when you were chairman in 2002, when cable 
modem service was determined to be an information service, in 
comments to the FCC the NCTA indicated that, quote, ``The 
record shows that today's increasingly sophisticated broadband 
services fall even more squarely within the definition of 
information service than ever before,'' unquote. And could you 
explain this from the perspective and understanding of 
technology that you had before you in 2002 to the NCTA comments 
expressed to the FCC last year?
    Mr. Powell. I will try my best. I think one thing to note 
is the draft legislation, as I understand it, rather than 
disenfranchising the FCC of authority, is classifying a service 
the same way this Commission has classified that service for 
over 12 years, through both Republican and Democratic 
administrations, including most recently in 2010 by President 
Obama's first chairman of the FCC, who also agreed it was an 
information service. The Commission has been operating under 
that definition since the very beginning of broadband. That is 
not new.
    It is important to remember this isn't completely 
discretionary. Congress creates classes of service and defines 
them. It defines what a telecom service is and it defines what 
an information service is. When broadband first emerged, and I 
was privileged to see it come onto the scene when I was at the 
Commission, there was an open question as to whether the nature 
of that new integrated Internet service was either a 
telecommunication service or an information service under our 
precedents. It was our judgment that the factual 
characteristics, the nature of the service, the way that it was 
used was much more faithful to the definition that Congress set 
out for information services than the one they set out for 
telephone services. That went all the way to the United States 
Supreme Court, who agreed with the Commission's judgment.
    The Commission now is proposing to try to reinterpret the 
facts and apply it to the other definition. Certainly they have 
prerogative to try. But the facts are fundamentally the same as 
they were in 2002, and that will be a very serious source of 
litigation risk for the Commission when it fundamentally 
changes its mind about the factual nature of the underlying 
service.
    Mr. Guthrie. Thank you. My time has expired.
    Mr. Walden. The gentleman's time has expired.
    We will now go to Mr. Welch for his 5 minutes.
    Mr. Welch. Thank you, Mr. Chairman. A couple of points and 
then a few questions.
    Number one, I thank you and the ranking member. This is an 
excellent hearing.
    Number two, we are way ahead of where we were last year. I 
mean, this draft bill does contain I think real responses to 
the over 3 million comments that were offered to the FCC. So 
that is terrific.
    Third, I think the FCC itself, Chairman Wheeler, has been 
extremely responsive. And I have had confidence that his 
experience in the industry, as well as on the public sector 
side, makes him someone who we can have confidence with respect 
to light touch regulation.
    But number four, and this is the heart of it for me, 
whatever we do, my concern is for access to the Internet and 
the cost. And three out of four Americans, and this is 
especially true in rural America, really only have one 
provider. So they have no competition in many parts of the 
country.
    So this question of what do we do has been answered 
affirmatively about trying to maintain net neutrality in this 
legislation, but there has been injected into it a major new 
issue, which is new, and that is, do we take away jurisdiction 
from the FCC? And that is a fundamental question that requires, 
I think, an enormous amount of attention before we make a 
decision to go forward.
    Mr. Powell, I appreciate the point you made about 
uncertainty, because if you are making big investment 
decisions, obviously knowing what the rules of the road are, 
are important to you. But the uncertainty goes both ways. If 
you have legislation, it is very hard to change it. Let's be 
real. We know that. If you have a regulatory policy, it is 
there, and if it is done right it can respond to issues.
    So I want to go to a couple of things that Mr. Misener 
said, because I appreciated how specific you were. In the 
legislation there is talk about specialized services without 
definition, reasonable network management without definition in 
the legislation, and third, which parts of the broadband are 
protected by network connection. And under this legislation, if 
there were a problem in any one of those three areas, who would 
resolve the dispute or provide the remedy to somebody adversely 
affected?
    Mr. Misener. Thank you, Mr. Welch.
    It is unclear. I mean, there is a direction in the bill to 
establish an ex post adjudicatory process, which sounds nice in 
practice, but it certainly does not provide the kind of 
certainty and detail that most businesses and consumers seek.
    Mr. Welch. So, Mr. Powell, who would resolve those issues? 
I mean, there is not a dispute here that there is not a 
definition in our legislation. We could all anticipate there 
will be disputes. How would they be resolved?
    Mr. Powell. First thing I think is really important to note 
is the Commission, under judicial precedent, has the right and 
the obligation to interpret the words of Congress. What 
specialized services means or any other term of Congress would 
absolutely be within the Commission's power to interpret and 
enforce as they best understood it.
    Mr. Welch. So let me just understand, because that is 
important, I think, to me at least, what you just said. If 
there were a dispute, you are saying the FCC would have 
jurisdiction even though we are taking jurisdiction away from 
the FCC in this legislation?
    Mr. Powell. The draft, as I read it, certainly contemplates 
the FCC enforcing the provisions.
    Mr. Welch. OK. This is serious, because we know this 
question is coming. Let's say Amazon had a dispute. Where would 
they go to resolve it? Would they go to their legislator or 
would they go to the FCC?
    Mr. Powell. Surely, they would complain to the Federal 
Communications Commission, who as I understand is fully 
empowered to resolve that complaint under the provisions laid 
out by Congress, as they do with every other complaint in their 
regulatory jurisdiction.
    Mr. Welch. OK. Thank you, Mr. Powell.
    Mr. Powell. You are welcome.
    Mr. Welch. Ms. Baker, one of the questions that I have is 
most of the open Internet talk centers around over the last 
mile between the Internet service provider and the end 
consumer. But aren't there very real competitive concerns and 
potential consumer impacts that arise in the exchange of data 
between the ISPs and networks too? And how can we ensure under 
this legislation that the interconnection continues to happen 
for smaller competitive carriers in the telecommunication 
marketplace?
    Ms. Baker. That actually might be a better question for 
Chairman Powell. We have been very focused on the mobile 
industry and the technical parameters that are around the 
mobile industry and the competitive factors on the mobile 
industry. You mentioned competition and only one provider. In 
the mobile industry, 8 out of 10 Americans have a choice of 4 
or more providers, 94 percent have 3 or more providers. So it 
is a very different issue, so you may want to redirect your 
question.
    Mr. Welch. OK. I think my time has expired. So thank you. I 
yield back.
    Mr. Walden. The gentleman's time has expired.
    I would like unanimous consent to submit for the record a 
letter to Ms. Marlene H. Dortch, Secretary, Federal 
Communications Commission, from various companies, Bluegrass 
Cellular and others. Without objection, it will be entered into 
the record.
    [The information appears at the conclusion of the hearing.]
    Mr. Walden. We will now turn to the gentleman from Texas, 
Mr. Barton, for 5 minutes.
    Mr. Barton. Thank you, Mr. Chairman.
    I am going to ask just kind of a general information 
question. The gentleman at the end of the table down there, Mr. 
Powell, I used to know a Michael Powell, but he had some hair.
    Mr. Walden. He reached perfection. He is my role model.
    Mr. Powell. That was at the beginning of net neutrality.
    Mr. Barton. Is this the same Michael Powell who used to be 
important, used to be the chairman of the FCC?
    Mr. Walden. If the gentleman would yield, yes, I believe 
that is the case, and he has reached folic perfection.
    Mr. Barton. OK. I just wanted to make sure before I asked 
him a question.
    Now, Mr. Powell, now that I know who you are--and I am 
kidding, I know you--I wouldn't kid you if I didn't know you 
pretty well.
    But he is blushing, Mr. Chairman. Let the record show.
    When you were chairman of the FCC, did your Commission give 
any thought to regulating the Internet under Title II?
    Mr. Powell. No. As I said, this was a question of first 
impression when broadband was in essence invented. And that 
question was presented to the Commission of, how should it be 
properly classified under congressional law? So we did weigh 
whether to regulate it as a telecommunication provider under 
Title II or whether to regulate it as an information services 
provider under Title I. The Commission voted to do the latter.
    Mr. Barton. Are you aware of any academic or industry study 
that claims the Internet is a natural monopoly?
    Mr. Powell. I am not aware of any study. And in fact I 
think one of the most substantial decisions made by this body 
in 1996, when it passed the Telecomm Act, was to abandon that 
thesis of regulatory policy that the markets are not natural 
monopolies, they should be subject to competitive forces, and 
it shouldn't be regulated as such. I mean, I think that is one 
of the things that concerns us about the historical use of 
Title II. Built in and woven throughout that body of law is the 
assumption that the market is served most efficiently by a 
monopoly, a state-sanctioned monopoly, as AT&T once was for a 
very, very long time.
    Mr. Barton. Assuming, and I think it is a correct 
assumption, that the Internet is not a natural monopoly, that 
it is in fact a competitive market, given your knowledge, both 
in your prior capacity as chairman of the FCC and your current 
capacity as an industry leader, do you view any participant on 
the provider, the base provider part of the market to have what 
would be called monopoly market power?
    Mr. Powell. No, not during my tenure. And I disagree that 
is the case today. As an old antitrust lawyer, we know that you 
don't count noses, you look at what the effects are in the 
market. Has capacity expanded? Capacity has expanded 1,500 
percent in a decade. Has the market continued to invest? It 
invested over a trillion dollars in that decade. Have prices 
gone up to monopoly rent levels? Prices have stayed flat and 
declined on a per megabit basis. I don't think any antitrust 
scholar or Justice Department could conclude that it is an 
unhealthy, uncompetitive market based on the actual 
characteristics of the market that they use to measure that 
question.
    Mr. Barton. Well, if it is not a natural monopoly and there 
is no participant in the provider sector of the market that has 
monopoly market power, then it stands to reason that the 
committee draft is correct that we should explicitly say you 
shall not regulate or oversee the Internet under Title II. Do 
you agree with that?
    Mr. Powell. As I have testified consistently, I do think 
the cost and damage to Americans' ambitions in broadband and 
Title II far outweigh its benefits. I think that if the narrow 
task before us is to create solid, bulletproof, legally 
sustainable net neutrality rules, which we accept, we believe 
that can be done without resorting to that hammer.
    Mr. Barton. OK.
    Mr. Chairman, I want to thank the former chairman for those 
comments. I do believe that it is wise to put this out as a 
draft. I think there are some very valid questions--and my 
friends on the minority are asking some of those questions--
about how to perfect the language. I have some concerns myself 
about certain parts of the draft. But as a base principle, the 
fact that we should not regulate the Internet under Title II, I 
think is beyond question. And if we start from that premise, I 
think the discussion draft is an excellent document, and we can 
iron out the details through these hearings and if you take it 
to subcommittee markup in the markup itself.
    With that, I yield back.
    Mr.  Walden. I thank the gentleman.
    We will now turn to the gentleman from Kentucky, Mr. 
Yarmuth. Welcome aboard, and----
    Mr. Yarmuth. Thank you very much, Mr. Chairman, and I want 
to thank the panel. It has been a very enlightening 
conversation, and I am new to this entire area. So I am 
learning a lot as we go.
    And one of the things that intrigues me about this entire 
field is that we have a field that is changing as rapidly as 
anything probably in history has changed, and we talked--some 
of the members have talked about the difference between 1996 
and now and how the world has changed.
    But it is not just the technology that has changed, it is 
also the industries have changed in the sense that this is kind 
of an amorphous corporate structure that is out there now too. 
There is a lot of consolidation going on. There are companies 
getting into all various areas of the business so that at one 
point they are acting like a common carrier, at another point 
they are acting as a content provider and so forth.
    So, Mr. Powell, you have mentioned before the distinction 
between information services and telecommunication services in 
the law. Is that a meaningful distinction today?
    Mr. Powell. I think over time it shouldn't be, meaning, you 
know, this is, I think, the case for this institution which I 
think it is already committed to taking on the responsibility 
to write a new act. We are entering into a world in which a bit 
is a bit. Data networks follow radically different 
characteristics than the ones that informed those judgments 
when these laws were written in the 1930s or the 1990s, and I 
do think that is a continuing problem.
    I think net neutrality is actually just one of the first 
highly contentious issues related to ambiguity, and it won't be 
the last, and what concerns me is that I think Title II is even 
more inapplicable to modern functions and modern networks, and 
I think we will be ironing out, if that is the governing body, 
for years to come how it is properly applied to networks that 
do not behave in the ways that existed when those judgements 
were made.
    Mr. Yarmuth. Right. Thank you.
    Ms. Baker, you say in your testimony this similar 
conversation, mobile broadband is different, and I agree with 
you that network neutrality rules need to be flexible enough to 
take into account the technological differences between 
networks.
    The draft, though, we are discussing today would restrict 
the FCC's ability to interpret the net neutrality rules once 
they are enacted.
    How can the FCC give wireless carriers the flexibility they 
need without the authority to modify or clarify the network 
neutrality rules?
    Ms. Baker. I think the draft is a great start. I think as 
we evolve we need to work on the definitions and make sure that 
we have the proper definition for reasonable network 
management. Currently it acknowledges the technological 
differences. I think that is important. We will have to watch 
all the definitions, but I think we have got a great start, and 
look forward to working with all of you on it.
    Mr. Yarmuth. Thank you.
    The 1996 act created a partnership between the states and 
the Federal Government, and each had important 
telecommunications oversight and responsibilities. Our partners 
in state governments and public utility commissions are often 
closer to the ground and can respond quickly to consumer 
complaints.
    As we are considering this legislation, I want to address 
this to Ms. Gonzalez, should we be thinking about the consumer 
protection role of the states as well?
    Ms. Gonzalez. Absolutely. In fact, there has been a lot of 
talk recently about the FCC acting to protect local choice in 
broadband. In particular, there is an effort to ensure that 
states do not restrict local communities from building their 
own broadband networks. I have concern that the draft 
legislation, as it stands today, would disempower the 
commission from addressing that very serious issue of local 
choice for consumers.
    Mr. Yarmuth. And while I have your attention, we have been 
talking about the competitive situation with broadband. In my 
community there is basically one system, and so there is really 
no incentive for them to provide great quality service or 
consumer service.
    Are you concerned about the ramifications for consumer 
protection if we go down this route literally that is in the 
draft bill?
    Ms. Gonzalez. Yes. Absolutely. I think it calls into 
question the FCC's role in protecting consumers and there may 
be some competition that might not be an actual monopoly, but I 
think if you ask people around the kitchen table do they feel 
like they have choice in particularly their home broadband 
connections, I think the vast majority of consumers feel kind 
of trapped.
    Mr. Yarmuth. Yes. I agree.
    I just want to say one thing. It is certainly my preference 
for Congress to act in all of these areas, but I have very 
serious concerns, again, the way the world is moving, Congress 
at its optimum efficiency moves at about 10 miles an hour, and 
the world is moving at 100, and I think in this field and many, 
many others it is becoming very, very difficult for us to make 
long-term policy decisions because the future is so uncertain, 
and we talk about providing certainty, there is not a lot of 
certainty out in the world just because the worldis changing so 
fast.
    So, anyway, editorial comment.
    Thank you very much. I yield back.
    Mr.  Walden. Gentleman yields back.
    We now go to the gentleman from Texas, Mr. Olson, for 5 
minutes.
    Mr. Olson. Mr. Chairman, as you know, today is my first 
hearing as a member of this subcommittee, and I think I am 
thrilled to be here.
    All kidding aside, Ms. Baker, it is always refreshing to 
have someone who went to school in Houston, Texas, as a 
panelist.
    As you know, ma'am, the last major update to the 
Communications Act occurred 19 years ago. Giving the importance 
of the Internet to our economy, our social fabric, does it make 
sense for Congress to take a fresh look at how to tackle 
Internet openness rather than try to invoke statutory 
provisions that are decades old?
    Ms. Baker. Absolutely, and we are very committed to work 
with you on that.
    Mr. Olson. Thank you.
    One question for all the panelists. We all agree that these 
proposed changes by the FCC rule to Title II will bring about 
legislation. I think we can all agree with that.
    My question is that is going to make for a lot of 
uncertainty. How long will that last? When it is decided by the 
courts, how long? Any idea? A year? Two years? Five years? A 
decade? Mr. Powell?
    Mr. Powell. Well it is always hard to say without looking 
back historically, but when my commission first adopted the 
definition of information services, it was 3 to 4 years before 
there was complete resolution of a litigation case because of 
the ruling of the Supreme Court.
    The commission now is proposing to do fundamentally the 
same thing, a brand-new untested definitional change coupled, 
by the way, with new and untested other applications of 
forbearance and other things.
    So we are talking about potentially a litigation process 
that typically would run 3 to 5 years depending on its 
complexity, depending on the parties, and depending on the 
court system.
    Mr. Olson. Does that assume applications that decisions 
come out longer than 3 to 5 years, or is that sort of the whole 
window?
    Mr. Powell. Well, the problem is if any part of the order 
is overturned by a court, then there are remands to the 
commission. That could be a whole new commission. This 
commission will only be in power for the next 2 years. It could 
be remanded to the next administration's commission. This thing 
could start all over again. It is not a complete exaggeration 
to say 10 years from now we could still be sitting here.
    Mr. Olson. Mr. Dickerson, your comments, sir. How long?
    Mr. Dickerson. Yes. Well, first of all, we don't see the 
FCC action in congressional action as mutually exclusive. I 
think, obviously, Mr. Powell has a lot of experience in these 
areas. So I don't want to contradict his legal expertise and 
the process expertise.
    I am very encouraged by many of the principles in the bill. 
I have stated the issues that I am concerned about. I think the 
congressional action can--if the bill is amended in the ways 
that we have described could provide much more certainty and 
work along with FCC regulations.
    I wanted to really quickly while I have the floor amend an 
earlier comment. I wanted to clarify that I will not see the 
draft FCC order before they vote, and I apologize for that 
mistake.
    Thank you.
    Mr. Olson. Duly noted.
    Mr. Misener, how about the courts? How long?
    Mr. Misener. Well, all litigation is optional, and so it 
might be up to the litigants whether they pursue it. If we get 
a great FCC order that everyone loves, maybe no one will sue. 
Some parties have suggested that they are going to sue 
regardless. It is not we, it is they. It is a choice of theirs.
    Mr. Olson. Ms. Gonzalez, how long?
    Ms. Gonzalez. I think the risk of litigation comes with an 
FCC order as well as with the proposed legislation. I think no 
matter what there will be legal action to clarify definitional 
issues in the legislative draft, and so while all of us, 
especially those of us who are lawyers who don't make a lot of 
money on these issues would like to see, you know, as little 
litigation as possible, I think it is unavoidable regardless of 
the path.
    Mr. Olson. How about 3 to 5 years like Chairman Powell 
said? Do you think that is the window of this uncertainty?
    Ms. Gonzalez. I think the draft legislation opens up the 
opportunity for case-by-case adjudications of various 
definitional issues that the FCC would have to resolve, and so 
it could even be longer----
    Mr. Olson. Thank you.
    Fairly quick, ma'am, because Ms. Baker is waiting.
    Ms. Turner-Lee. Yes. I would actually say that I think the 
draft legislation would actually reduce the amount of time and 
that we will experience litigation----
    Mr. Olson. OK.
    Ms. Turner-Lee [continuing]. If we go towards that. And I 
also think the draft legislation would give the Congress as 
well as the FCC some room to look at some of the areas of the 
bill because out of the 11 principles there is probably one 
that it sounds like needs to be debated, and that is the 
Section 706 authority piece, but I think Congress would act 
much quicker than the type of litigation that we would actual 
have, and we would avoid the consequences of Title II.
    Mr. Olson. Ms. Baker?
    Ms. Baker. So the 2010 rules were not published for a 
while. There are various kind of procedural ways that the FCC 
can extend that time before they publish them. Once they were 
published, they were turned back last year. We are now at the 
FCC revisiting those.
    Certainly the best way to act for certainty is for Congress 
to act. So it depends on how you count it. That is 2010. It is 
2015. They will promote some more rules that will also--
depending if they really go Title II, they will be litigated. 
That will be another window of several years of litigation and 
uncertainty.
    Mr. Olson. Thank you.
    My time has expired.
    Mr. Walden. Thank the gentleman for his participation.
    I ask unanimous consent that we enter into the record a 
statement on the Verizon Policy Blog from Fran Shammo, the 
Verizon executive vice president, chief financial officer, 
which deals with this issue of investment, and in which Fran 
says, ``Experience in other countries shows that over-
regulation decreases network investment. If the U.S. ends up 
with permanent regulations inflicting Title II's 1930-era rules 
and broadband Internet access, the same thing will happen in 
the U.S. And investment broadband networks will go down.'' So 
it was a clarifying statement from December 11th.
    Ms. Eshoo. Somebody is scolding him.
    Mr. Walden. I don't have any knowledge of that since this 
was December 11th, but would enter that into the record.
    Without opposition, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Walden. We will go now to Mr. Loebsack.
    Welcome aboard the subcommittee. As you can see, we don't 
deal with many controversial issues here.
    Mr. Loebsack. I am happy to jump into this one as the very 
first issue that I am dealing with, despite the admonition from 
Mr. Powell about the difficulty of this subject.
    I want to thank the ranking member as well for this 
wonderful hearing today. I have learned a lot. This is the 
first hearing that I have had on this subcommittee. I am on the 
larger committee as well, and if I might, Mr. Chairman, I would 
like at the outset to request submission for the record a 
letter from the Internet Association offering their analysis 
and concerns of the draft bill that we are discussing.
    Mr. Chair, I would like to submit----
    Mr. Walden. Without objection.
    [The information appears at the conclusion of the hearing.]
    Mr. Loebsack. Thank you.
    I come from Iowa. I have 24 counties in my congressional 
district. It is a much more diverse district than folks on 
either coast of the United States might imagine. No offense to 
folks on either coast, especially our chair and ranking member 
here, but we have got a lot of issues in a district like mine. 
It is a very big area.
    What I would like to start off with is a question to you, 
Ms. Baker. Those statistics that you cited, something about 8 
out of 10 folks have 4 choices or--can you cite those 
statistics again?
    Ms. Baker. 8 out of 10 Americans have a choice of more 
mobile broadband providers, and 94 percent have a choice of 
three or more.
    Mr. Loebsack. And do you know where the 20 percent and the 
6 percent reside? Do you have any idea at all?
    Ms. Baker. I am certain we can get you a map.
    Mr. Loebsack. That would be wonderful. I would really 
appreciate it. I would suspect, although I don't know for sure, 
that it is probably in rural areas where those folks reside.
    This is my ninth year in Congress. My first year on this 
committee, but I have been getting around my district for the 
last 8 years, and this is a huge issue that has come up, the 
access on the part of rural areas to broadband, to cellular 
service, to all the things that we are talking about here. That 
is why I am so excited to be on this subcommittee. It was my 
first choice so I could do what I can for the folks in my 
district, and I want to thank all of you.
    Mr. Dickerson, in particular, I knew nothing about Etsy 
until my daughter requested a gift certificate as a Christmas 
present, and I immediately went online and found out what a 
wonderful service you offer. So thank you for you being here as 
well.
    Mr. Dickerson. Thank you.
    Mr. Loebsack. I support net neutrality, obviously. I am 
interested in working with both sides of the aisle so we can 
craft some kind of legislation to bring this up to where we 
ought to be in 2015, fully recognizing that we really will 
never as legislators understand all the issues down the road 
because things are going to be changing all the time.
    We are going to do the best we can, and I do appreciate the 
majority bringing a bill to the floor--or bringing a draft to 
us at this point so we can spend a lot of time working on this, 
but as I said, the rural areas are really probably my major 
concern as a Congressman, and I would like to ask, Ms. Gonzalez 
and perhaps Dr. Turner-Lee and maybe the rest of you as time 
permits what effects might this proposed legislation have on 
our rural consumers, especially the Universal Service Fund 
programs, universal programs, service programs, which were 
already mentioned briefly?
    Ms. Gonzalez. Thank you.
    Thank you, Congressman for the question.
    This is one of my deep concerns with the draft legislation 
as it stands. Stripping the FCC of Title II and 706 authority, 
calls into question the ability of the commission to continue 
ongoing processes that help subsidize expansion of broadband in 
rural areas as well as programs that could make it more 
affordable for those rural folks that do have a connection but 
can't afford to connect.
    We are really concerned about, people in rural areas 
driving down the road to wherever they can get a wireless 
signal to do their homework or we need to ensure that this bill 
does no harm to efforts to, you know, increase digital 
inclusion. It is an important imperative for education as well.
    Mr. Loebsack. Thank you.
    Dr. Turner-Lee?
    Ms. Turner-Lee. Thank you, Congressman.
    I actually want to say that I think that the bill, if you 
flip it on the other side, has the promise if we were to look 
carefully at Section 706 authority over Title II to actually 
increase the further deployment and adoption in rural 
communities. I think part of the reason why the FCC has the 
authority of 706 is to get at the very issue that you are 
talking about, and I think by looking at the bill in a way 
where that is a point of debate because it is a discussion 
draft will actually allow us to be careful in the legislative 
path that we do take.
    I mean, if we take Title II--we have already heard from the 
association leaders about the high capital investment in 
communities overall, but the communities like rural and the 
communities that we are concerned with at MMTC will be the last 
on the list if capital is depressed among our communities.
    So I think we need to be real careful about that. In the 
study that I did in 2010 of the national broadband map, there 
was very little coverage of census tracks that were the lowest 
in their areas in their states and communities, and it has been 
since 2010 under the light-touch regulatory environment that we 
have seen a lot of growth, particularly with wireless as an 
onramp for some of these communities as well.
    So I would caution against throwing the baby out with the 
bath water with the legislative proposal and to come to the 
table to really think about what ways can Section 706 perhaps--
and we have offered some solutions that we are willing to work 
and sit down with congressional members, the staff to talk 
about, but how can you actually leverage that point in there so 
that to the earlier point of the congressman we don't spend a 
lot of time wasted where we can't get to the debate of 
universal service deployment and other things that you do care 
about and we do too.
    Mr. Loebsack. I see my time has expired, Mr. Chair, but I 
would like a response from the others if that is possible for 
the record----
    Mr. Walden. Sure.
    Mr. Loebsack [continuing]. Moving forward.
    Thank you so much.
    Mr.  Walden. Or if they can give it to you really quickly.
    Mr. Loebsack. Yes.
    Mr. Dickerson. I could go very quickly. In my opening 
remarks, I said that Etsy is a democratizing force for 
entrepreneurship. Democratizing entrepreneurship means 
providing rural broadband so that people are not disadvantaged 
by where they live on whether or not they can take advantage of 
this great platform that we have.
    So we are concerned that legislation, by revoking the FCC's 
authority, could really undermine efforts to promote adoption 
in rural areas, broadband adoption.
    Mr. Loebsack. All right. Thank you.
    Mr. Powell. I think the thing I would emphasize quickly is 
the biggest problem of reaching rural America, which should be 
a sacred obligation of all telecom policy is because the costs 
are highly uneconomical for entry.
    Mr. Loebsack. I understand that.
    Mr. Powell. And so you have to balance off FCC power with 
ensuring that we are not raising the cost of providing services 
and further disincenting infrastructure builders from coming 
into those communities, and that is the other worry about 
moving to a regime that could raise those costs.
    Mr. Loebsack. Any other----
    Mr. Walden. Any others real quickly?
    Mr. Misener, go ahead.
    Mr. Misener. Thank you.
    It is hard for me to believe that investment requires 
blocking, throttling, not disclosing, engaging in paid 
prioritization.
    Mr. Loebsack. Thank you.
    Mr. Walden. All of which would be banned under our draft. 
Correct?
    Mr. Misener. Question whether it is enforceably banned, and 
question whether network operators can get out of it by 
offering specialized services or claiming reasonable network 
management.
    So there are a lot of questions, but clearly those good 
things, that what I call excellent principles, should be 
protected.
    Mr. Walden. And, remember, you still have the FTC in the 
background unless it goes Title II.
    Ms. Gonzalez.
    Ms. Gonzalez. To response directly to Dr. Turner-Lee, 
currently the Universal Service Fund is located in Title II in 
Section 254, and so 706 isn't enough for us to get there, and 
we want assurances that the commission continue ongoing and 
upcoming processes to expand access.
    Mr. Loebsack. Thank you.
    Mr. Walden. Dr. Turner-Lee?
    Ms. Turner-Lee. In response to Ms. Gonzalez--we are going 
down the line.
    I mean, I think that in terms of Title II clearly you are 
correct in terms of the assurances that are there, but then it 
comes with everything else, and I think that everything else is 
what we are actually concerned about in our communities if you 
do go back to the conversation about rate regulation, et 
cetera.
    For the communities that we represent, they are not even at 
the beginning of the finish line of this, and we have a lot 
more work to do, and I think we need to be really cautious 
about the regulatory action that is taken given the fact that 
there are 30 million people that still do not have broadband 
access, and Congressman, many of them in your area, and I think 
the fact that we have been at this conversation and we keep 
going into this whirlwind continues to disadvantage the people 
that we represent that needs to get about the business of other 
issues, and so respectfully, Ms. Gonzalez, I think you are 
right, but I think, the same token, I think Title II is just 
much too excessive to actually get the things that we want.
    Mr. Loebsack. Got it.
    Mr. Walden. Ms. Baker.
    Ms. Baker. Schools and libraries and rural programs exist 
as broadband is classified under Title I. I think they would 
continue. I think it is a good discussion to have. We have a 
Comm Act rewrite that is going forward. So I think it is 
important and we all realize it is important and we can 
continue the conversation.
    Mr. Loebsack. Thank you.
    Thank you, Mr. Chair.
    Mr. Walden. You are welcome.
    I thought it would be helpful too for the whole committee 
to hear everybody get a shot at it, and, Mr. Loebsack, if you 
would like to meet with Mr. Cramer and me afterwards, we can 
show you what a real rural district looks like.
    We are now going to go to the gentleman from Florida who 
has joined our subcommittee, Mr. Bilirakis, for five minutes.
    Mr. Bilirakis. Thank you, Mr. Chairman.
    It is an honor to serve on this subcommittee. It has been a 
terrific hearing. Thank you so very much. I have a couple 
questions here.
    First for Mr. Powell. After speaking with a medium-sized 
broadband provider in my district, they were concerned that 
during this push for a reclassification the FCC has not 
conducted a single study on the impact that reclassification 
would have on small- and medium-sized operators.
    What are your thoughts on the ability of small- and medium-
sized ISPs to handle the increased burden of internet 
regulation?
    Mr. Powell. I think it is fair to say they are deeply 
concerned. I would emphasize that the FCC has a legal 
obligation on the Regulatory Flexibility Act to take special 
consideration of small businesses in the cost benefit analysis 
of their decisions.
    Our members have filed with the commission raising grave 
concerns that they have not complied with the RFA as part of 
that analysis. That is an ongoing conversation with the 
commission, but yet another potential vulnerability in the 
rules that will come out from the commission.
    Mr. Bilirakis. Thank you, sir.
    Ms. Turner-Lee, and I know you touched upon this, but maybe 
you want to elaborate a little bit, I have a couple areas in my 
district, Lacoochee and Trilby, as many members do, where even 
today Internet adoption is significantly behind the rest of the 
country and they are struggling to get reliable broadband up 
and running.
    Can you explain why Title II reclassification could 
disproportionately impact and further harm communities with 
lower broadband adoption already?
    Ms. Turner-Lee. Yes. Thank you, Congressman.
    So in my testimony and on record I actually put more 
statistics in there to actually talk about the fact that 
relevance actually leads when it comes to the reasons why 
people do not get online. The cost of broadband as well as the 
type of device actually come after why do I need to use this 
tool, and I think for all of us in this room, if we want to 
equalize democracy, as it was said earlier, we need to get 
people online to they can realize the full value.
    The challenge with Title II, to your question, is, you 
know, again, as I have said, that we still have to get 
everybody to the starting point before we get to the finish 
line, and trying to manage around some of the hypothetical 
harms of what the Internet can do really does a disservice, and 
under monopoly-era telephone service we can only talk and hear. 
Under broadband, we can talk, hear, discuss, engage, see, and 
do other things.
    If a community is of color, we want to solve social 
problems that are chronic, like chronic disease or the lack of 
educational resources, et cetera. The possibilities and 
aspirations of the Internet are so great, and why would we try 
to restrict and regulate something that is really just still in 
its infancy, and for our communities, again, relevance is the 
issue.
    We have got to move people of color, more vulnerable 
populations like the poor and the disabled and seniors and the 
folks that do not speak English as first language to the 
Internet for the power of government resources so they can move 
from an inline economy to an online economy. We have got to 
move them into places where we can solve those problems much 
like in Florida where people are not taking advantage of the 
new technology, and having a restrictive Title II stance, I 
think, has its impacts outside of chilling investment and 
deployment.
    Mr. Bilirakis. Thank you so very much.
    Mr. Powell, will Title II regulation do anything to 
encourage incumbents to upgrade networks or new companies to 
enter the market?
    Mr. Powell. Well, I would like to take the latter part of 
your question because I think this is a serious overlooked 
aspect of Title II. It is a major disincentive for a new 
competitor to enter the market, and all you need to do to look 
for evidence is some of the examples that are held up as 
sterling new entry like Google Fiber. Google Fiber entered the 
market, by the way, it only entered the market in a handful of 
selected cities, it elected to provide broadband service and it 
elected to provide video service but refused to offer telephone 
service.
    It refused in its own public statements in saying it chose 
not to provide telephone service because of the regulatory 
compliance costs associated with being a telephone company. In 
fact, the President of the United States was in Iowa recently, 
in Cedar Falls, talking about the municipal broadband company 
that provides a very fast Internet service. That company also 
provides broadband and video service. To date, provides no 
telephone or telecommunication service in part because of the 
regulatory cost incentives.
    Title II fundamentally assumes an incumbent state-
sanctioned monopoly, and it tends to provide a regime that is 
very hostile to entering and providing a new and competitive 
alternative.
    Mr. Bilirakis. Thank you very much.
    I yield back, Mr. Chairman.
    Ms. Gonzalez. Gentleman yields back his time.
    We now go to the gentlelady from California, Matsui, for 
five minutes.
    Ms. Matsui. Thank you very much, Mr. Chairman, ranking 
member, for hold this hearing today.
    You know, the Internet is very dynamic, and I must say this 
hearing has also been dynamic and lively, and has been much 
appreciated, I know, by the members here.
    You know, a year ago no one was talking about paid 
prioritization. Now people are talking a lot about it. It is 
also called Internet fast lanes. Now, it is central now to the 
net neutrality debate, and that is why I had introduced a bill 
with Senator Leahy to ban paid prioritization or so-called 
Internet fast lanes.
    Now, the reason why I bring this up is because this is 
where the consumer gets involved. The consumer understands 
this, and when I had my hearing and at home when I talk with 
people, they understand. They don't like the idea of having to 
pay extra to access the content of programs they want to see or 
view online, and this is pretty clear, and I talk to some of 
the anchor institutions, schools and libraries, and they also 
feel that they can't afford to cut deals. Neither can the 
start-ups cut deals with each ISP to compete. So this is very 
central to what we are talking about today. So our policy has 
to be very clear about how it impacts the consumer.
    Ms. Baker and Mr. Powell, do your associations support a 
ban on paid prioritizations? And I would like a yes or no.
    Mr. Powell. Yes.
    Ms. Baker. Yes.
    Ms. Matsui. Thank you.
    Ms. Gonzalez, and I would like Mr. Misener to comment on 
this too, from a consumer point of view, does the bill truly 
ban all forms of paid prioritization, and if not, why? We have 
been talking around this, but can you please expand on this, 
and also Mr. Misener?
    Ms. Gonzalez. Sure. So I think as many have raised, there 
is a question around the definition or lack thereof of--or the 
vague definition of specialized services and whether or not 
that creates a giant loophole that could severely diminish the 
rule that was intended to ban paid prioritization. I think it 
is also worthwhile to consider issues of discrimination on the 
Internet that fall outside paid prioritization, and there are 
quite a few.
    Ms. Matsui. OK. Mr. Misener?
    Mr. Misener. Thank you.
    I think in addition to the concern about specialized 
services which, by the way, isn't just possibly a loophole for, 
quote, ``paid prioritization by third parties,'' but rather by 
affiliated companies engaged in more or less the same behavior. 
You can imagine a Internet broadband access provider also 
having an affiliated content business which gets special 
treatment. It wouldn't be paid prioritization in the sense that 
they were getting paid by a third party, but it would be 
prioritizing traffic based on the ownership rather than a 
payment.
    The other two areas of concern are ones that we have 
discussed previously. One is keeping the reasonable network 
management carveout as narrow as possible, and we should again 
view that askance if it does seem to favor some content over 
others.
    And, lastly, of course, this business about where in the 
network these things could occur. It needs to be clear in the 
bill that it is throughout the broadband Internet access 
service provider's network.
    Ms. Matsui. Do you feel that this bill is a good starting 
point? How do you feel about this?
    Mr. Misener. Are you asking me?
    Ms. Matsui. Yes.
    Mr. Misener. Yes. I do. I do. I think it is a novel 
approach where a set of principles, and which I have called 
excellent principles, are clearly defined and then capped with 
a ceiling. If that actually works, it is a great start, but our 
concerns expressed today are that how they would actually--how 
that ceiling with the great principles would actually work, but 
if it works, that is a great start.
    Ms. Matsui. Ms. Gonzalez, you feel the same way?
    Ms. Gonzalez. I am certainly pleased that members on both 
sides of the aisle agree that that net neutrality is a serious 
problem and we need to address it through government action in 
some way or another.
    I have serious reservations about the draft legislation as 
it stands, mostly given the level of authority that it would 
strip of the commission right now and the lack of inclusion of 
a ban on unreasonable discrimination on the Internet.
    Ms. Matsui. OK. Well, you know, I strongly believe that we 
have to get this right, either at the FCC or Congress. It is 
far too important.
    You think about the Internet affects everything that we do 
in our lives, and this is--and I think that this is--the first 
thing I think is a starting point is 100 percent ban on paid 
prioritization, and we have to figure out how to do that, and 
there can't be any loopholes. I mean, you are talking about 
some loopholes already. So we have to start addressing that.
    If we can't get that right, we are moving backwards. Our 
consumers will know that we are moving backwards, and we are 
really stifling competition when you think about that too. I 
have heard from many start-ups who really feel that they were 
able to start their businesses, but in fact if we don't play 
this right and ban paid prioritization, we will go backwards, 
and if we don't ban it, institute strong net neutrality 
protections for consumers and innovation.
    So I truly believe that this is our opportunity, and this 
is a wonderful hearing to begin the discussion.
    So I yield back. Thank you.
    Mr. Walden. Thank the gentlelady for her comments.
    And we will look forward to working with Mr. Misener, and 
we appreciated your comments as well as we try and--that is 
obviously not our intent to ban it and then come back and 
create a loophole and allow it to go through. So I appreciate 
your willingness to work with us on that.
    We are going to go now to the gentleman from Ohio, Mr. 
Johnson. New member of our subcommittee and delighted to have 
you part of the team.
    Mr. Johnson. And winner of the national championship, Mr. 
Chairman.
    Mr. Walden. And the gentleman's time has expired. Let's 
go----
    Mr. Johnson. No. In all seriousness, Mr. Chairman, it is an 
honor to be on the subcommittee. Under your leadership, I look 
forward to the work that we will----
    Mr. Walden. No amount of sucking up is going to get you out 
of that one. OK?
    Mr. Johnson. All right. I will buy you a new red tie later.
    To the panelists, thank you folks for being here. I have 
about 30-plus years of private sector and DOD experience in 
information technology, and so I am very familiar with the 
issues that we are dealing with and the criticality of those 
issues.
    I can remember back in the 1970s when I first got started 
in information technology and telecommunications, we went 
through generations of technological upgrades about every 10 
years. There was a generation from the 1970s to the 1980s and 
then the 1980s to the 1990s and about the mid-1990s leading 
into the 2000s it began to accelerate to where we are today. I 
mean, many of the devices that we all use on a daily basis, 
many of them weren't even here even 5 years ago.
    Today we see technological turnover about every quarter 
almost. As soon as one model comes out, the next one comes in. 
And so technological innovation requires the right conditions, 
and more government means less flexibility and fewer 
opportunities to grow. I think it was President Ronald Reagan 
that said, ``The answer to our problems is never more 
government.''
    If you look at what the telecom industry needs, in order to 
be successful it needs to be nimble in order to innovate, which 
it can't do if a heavy hand of government prevents it from 
doing so. Windows of opportunity in the industry of 
telecommunications, they only open for a very, very short 
period of time, and innovators must have the certainty that if 
they jump into the fray and if they put big investments on the 
next great big thing, that they are going to be able to take 
advantage and get a return on their investment.
    So, these issues that we are talking about today are 
extremely important, I know I represent a very rural district. 
We have talked about how important this is to some of those 
areas, and I appreciate those comments.
    Mr. Powell, in NCTA's comments to the FCC in the open 
Internet docket, it is stated that Title II reclassification, 
and I quote, ``Would dampen the very infrastructure investment 
the commission seeks to foster.'' These comments go on to 
indicate that the reclassification, again, quote, ``Would 
require providers to divert substantial time and resources to 
design and implement numerous systems and processes necessary 
to comply with the various requirements and obligations of 
Title II.''
    Can you quantify in any way the time and resources that you 
are describing in those comments?
    Mr. Powell. Well, I think it would be difficult to put a 
number on it without agreeing to what the scope is we would 
have to comply with it, and I think, as we have all recognized, 
it depends on what you are going to be subject to and what you 
are not. There are 1,000 Title II regulations. How many of them 
will apply, to what depth they apply, and what your obligation 
is on them is a huge open question.
    Mr. Johnson. Is it safe to say, though, that this type of 
diversion of time and resources will have the effect of 
chilling innovation?
    Mr. Powell. If people want a better understanding of this, 
they would go read the history of what the biggest regulatory 
problems were in the 1960s, 1970s, and 1980s with telephone 
companies. There was an enormous dissatisfaction that they were 
not investing, that they were not innovating.
    What was the last telephone innovation you recall in the 
area of wired phones? Was it the pink princess phone or the 
blue one? I mean, there was a real disincentive belief, and it 
has been the government's policy, both at the FCC and Congress, 
to be retreating from those regulatory tools for decades in 
order to spur more investment and innovation into those 
industries, and it really was that retreat that helped foster 
and explode the wireless----
    Mr. Johnson. Right.
    Mr. Powell [continuing]. Industry, the cable industry as a 
competitor to broadcast and a whole host of other industries 
with the revision of those policies.
    So I think there is plenty of examples of the way that 
Title II or that kind of regulatory model disincents and if you 
need one last example, go look at the experience in Europe, who 
when we defined it as an information service, they pursued the 
equivalent of Title II regulation. Their ministers today are 
calling for an end to that regulatory environment and an 
adoption of the U.S. model because of the depressing effects on 
innovation and investment and----
    Mr. Johnson. Like I said, more government is never the 
answer to the problem.
    Ms. Baker, do you have a thought on that as well?
    Ms. Baker. Sure. I would follow up on his example with 
Europe, because as we talk investment, if we want to put some 
hard numbers to it, we in the wireless industry don't have it 
because we have never been under title II, but a real world 
example is Europe, and from 2011 to 2013 we put 73 percent more 
capex in investment than Europe. Our networks are 30 times 
faster, and we have three times more LTE, which is the 4G 
platform than the rest of--than Europe.
    So we don't know how much this would chill. We don't know--
certainly we are going to continue to innovate. We are going to 
continue to invest. The question is how much. Maybe not as 
much, and I would say that when we looked towards the future, 
we look towards specialized services such as the connected car 
and what mobile health services are going to offer, and we are 
going to need to have smarter, faster, stronger networks to 
perform our connected life activities.
    It is going to be really exciting, but we want to make sure 
that we continue the framework that has shown such great 
investment and such great opportunity that we are leading the 
world.
    Mr. Johnson. Mr. Chairman, the case has just been made why 
it is to critically important that we do this right. 
Innovation, particularly in this industry, gives us the tools 
that we need to get our economy thriving once again, and we 
need to make sure we do this the right way.
    And I yield back.
    Mr. Walden. Appreciate that.
    Appreciate the gentleman's experience. We are glad to have 
you on the subcommittee.
    We will turn now to the gentleman from California, Mr. 
McNerney, for 5 minutes.
    Mr. McNerney. Well, Mr. Chairman, I am thrilled to be back 
on this subcommittee, and I want to thank you for holding this 
hearing and for trying to get ahead of this issue by issuing 
the draft legislation.
    You heard our deep concern about the reduction of the 
enforcement authority both from the Democrats on the panel and 
from many of our panelists.
    Mr. Chairman, I would love to be able to vote for the final 
package, and I hope that we can work together to find something 
that would work.
    Mr. Powell, I certainly sympathize with your concerns about 
overregulation raising cost to the providers. However, I also 
have concerns about reducing enforcement authority,thus raising 
the cost for end users.
    But my first question has to do with the forbearance of the 
Title II requirements. Mr. Wheeler has indicated that he is 
willing to forbear, and even if he does this, the current 
concern is that the legislation may inhibit the FCC's ability 
to react and adjust to technological advances.
    Do you share that concern that the legislation would 
inhibit the FCC's ability to react?
    Mr. Powell. Well, I think the FCC has way more to react and 
interpret than is being suggested. The FCC, with any 
Congressional act, has the first instance in responsibility to 
interpret those provisions and enforce them across a wide range 
of activity. Even in the context of specialized service, if the 
effect of something someone was doing was to block or ban or 
throttle, I am absolutely confident the commission could reach 
that behavior even under this statute.
    The complexities of forbearance are substantial. Everybody, 
including the chairman, have professed an interest in doing so. 
If one were to pull out the record, many of the advocates 
arguing that this is easy to do and will be a light touch are 
all on record with laundry lists of other provisions that 
should not be forborne from. Groups like Public Knowledge and 
others have long lists of additional requirements that should 
be maintained.
    There are also serious questions about----
    Mr. McNerney. Do you think that the FCC is more agile than 
the Congress in addressing these complex issues?
    Mr. Powell. Not always, to be perfectly honest. The 
commission and Title II have been no bastion of efficiency over 
time. Regulatory proceedings rarely take less than a year. They 
often are quite exhaustive and take a lot of time. Sometimes 
that is because they struggle to find clear direction from 
Congress as to how to act. The clearer that direction and the 
more direct it is, the more expeditious the process works, even 
with FCC implementation.
    Mr. McNerney. Well, we have a chance to pass legislation 
here, I believe, but it may be a 2015 piece of legislation that 
is in effect for 10 years. So we have to get this right and 
give the FCC the flexibility it needs to carry out those 
intents. At least that is my opinion.
    Miss Gonzalez, would you briefly summarize for us the types 
of litigation risk the FCC will likely face under the approach 
provided by the draft legislation.
    Ms. Gonzalez. So I think there is quite a few factual 
determinations. If we are talking about procedural risks that 
the legislation poses, I think it puts the burden on consumers 
to, first of all, assess whether or not they have had their net 
neutrality rights violated, and then to figure out how to bring 
that before the commission, and it is somewhat complicated 
adjudication process that requires lawyers that even many of 
the start-ups that do have some resources, more resources than 
consumers at least, have said they would be unlikely to be able 
to engage in because they have limited legal counsel.
    But beyond that, after those decisions are issued, there 
could be follow-up litigation because this creates a situation 
where we would have to get to the details on a case-by-case 
basis which could not just be one lawsuit that would likely 
come from the FCC order, but a series of lawsuits.
    Mr. Walden. Would the gentleman yield? I was trying to get 
clarification.
    Mr. McNerney. I don't want to lose too much time here.
    Mr.  Walden. I will give you a little extra with unanimous 
consent, but how is what we are proposing here directing the 
FCC to put in place appeals mechanism so consumers can appeal 
differ from how it works across any other agency in the 
government? I am confused.
    Don't we want citizens to have that ability to file a 
complete and appeal and----
    Ms. Gonzalez. We want them to have the ability, but we also 
want the Internet service providers to have the burden to show 
that they are not discriminating.
    So it is really about how we are shifting the burden, and 
it is really difficult for--there is actually not a lot of us 
consumers activists doing this work, and so it is really 
difficult for consumers to carry the burden alone.
    Mr. Walden. We will continue this conversation.
    Ms. Gonzalez. Sure. I would be happy to continue the 
conversation.
    Mr. Walden. And I will go back to the gentleman because I--
--
    Mr. McNerney. Thank you.
    Mr. Dickerson, do you think that the FCC has a role to play 
to ensure robust broadband competition?
    Mr. Dickerson. Absolutely, and one of our concerns with the 
draft legislation is the revocation of authority of the FCC to 
do that.
    Mr. McNerney. OK. Miss Gonzalez, do you think the broadband 
market is sufficiently competitive to protect consumers on its 
own?
    Ms. Gonzalez. Not at this time.
    Mr. McNerney. OK. Thank you.
    I will yield back, Mr. Chairman.
    Mr.  Walden. The gentleman yields back the balance of his 
time.
    We go now to the gentleman from Missouri, Mr. Long, for 5 
minutes.
    Mr. Long. Thank you, Mr. Chairman.
    And, Mr. Powell, a minute ago you were talking about 
technology and the old land lines and telephone development, 
our choices were pink princess phone or a blue princess phone, 
and I had to think, my 20-year-old daughters--20-something, 
they are in their 20s, what they would do if I handed them a 
rotary dial phone today and said: Here. You need to make a 
telephone call. I question whether they would be able to do 
that.
    And I saw a cartoon the other day of a young man in 1983, 
and he probably weighed 120 pounds, and he had a desktop 
computer, like we all had, about that size, and it showed 2015 
and his computer was now this size, and he weighed about the 
same thing I do today. So while his computer got smaller and he 
got larger, that is kind of what--with this, I am given a 
reminder or reminded about the story that Steve Forbes used to 
tell that if the cell phone development was left to the United 
States Government, what we would have--because in that same 
year, 1983, first phone I had was a brick phone and made by 
Motorola.
    It weighed two pounds, and in 1983 it cost $3,995. This 
phone didn't cost me $3,995, and Steve Forbes told the story 
something to the effect of if it was left to the government to 
develop cell phone technology today, that same 2-pound phone 
would weigh 4 pounds and it would cost $7,995. So I think that 
innovation is a pretty good thing, and the government, the more 
it stays out of it, the better we would be.
    We have had a long hearing here today. Had a full table of 
witnesses. Lot of my colleagues have spoken before me as they 
are prone to do in these things. Usually the time it gets 
around to me I am one of the wrap-up guys. The time it gets 
around to me a lot of the questions have already been asked, 
and so normally I like to kind of cut to the chase at this 
point and just get to the meat of the issue.
    And, Mr. Powell, sticking with you here, the consensus is 
that the Internet should be open and vibrant. Everybody agrees 
to that. But isn't the controversy really about the extent of 
the FCC's authority to ensure that it remains open and vibrant, 
whether the authority should be derived from Title II or 
Section 706, doesn't it make sense for Congress to make that 
call?
    Mr. Powell. Well, yes, sir. I think we have to recognize 
that it is not for the FCC or any regulatory agency to create 
its own jurisdiction. It is for it to act on the jurisdiction 
provided to it by this institution. There is no question that 
the reason this has been a tortuous and long debate for a 
decade is because the ambiguity surrounding the commission's 
authority to adopt a set of rules that, as you can tell from 
this panel, have almost near unanimous consent around the 
substantive rules we are attempting to achieve.
    The only thing that is being argued about is what 
authoritative basis that is executed on, and every time the 
commission attempts to do that on its own it is going to face, 
necessarily, litigation, complexity, and challenge around that.
    That is within the power of this institution to pre-
terminate, end, and settle once and for all, and I think that 
is why we are so supportive of your efforts to find bipartisan 
conclusion.
    Mr. Long. Well, the Title II proponents tell us not to 
worry about the onerous provisions of title II because the FCC 
can simply forbear from applying them.
    Is there anything simple about forbearance and couldn't 
numerous individual legal battles occur regarding what the 
commission has and hasn't decided to forbear upon the net 
neutrality once the orderis released?
    Mr. Powell. Asking me, sir?
    Mr. Long. Yes.
    Mr. Powell. I think people--not a lot of understanding of 
how forbearance works. First of all, there is an institutional 
risk here. It is a pretty hostile thing to say that a 
regulatory agency should sweep away broadly an act of Congress 
without Congress directing it to do so. If you get sweeping 
forbearance, which we are desperately relying that we will get, 
is the commission doing something in an untested untried way 
that essentially eliminates statutorily passed, Presidentially 
signed legislation, and that poses significant legal risk.
    The other challenge with forbearance is the commission must 
make very specific findings for every rule that it forebears 
from, and it will attempt to do that in a global way we hope, 
but there is a real risk that the courts will say: You are not 
permitted to do that. You are not permitted to just brush away 
a whole title. You have to explain with micro detail why each 
of these rules doesn't meet the standards Congress set out for 
you. If that ends up being the law, we are talking about a real 
morass of a process to go through rule by rule and make a 
separate and independent forbearance finding.
    For example, the commission in the past in forbearance 
proceedings has often said that it has to do it by market. So 
the forbearance definition says is the market competitive? 
Well, whatis the market? The market in Missouri is arguably 
different than the market in New York City. There have been 
times when the commission has said it can only assess that 
question on a specific market basis. If that turns out to be 
required, now we are talking about a voluminous set of 
calculations about whether a rule can no longer be implemented 
or not.
    It is easy to believe the commission is just some plenary 
authority free to make these judgments as it sees fit, but it 
is bound very strictly by the tools that this institution sets 
out, and while certainly it can try, and I understand its 
sincerity, and we are committed to trying to get the best 
resolution, it is fraught with complexity that can easily be 
cut through by this institution.
    Mr. Long. OK. Thank you.
    I was going to save a little time to yield back to the 
chairman and let him tell us everything good about the Oregon 
Ducks and how good they are going to be next year, but I think 
I am out of time.
    Mr. Walden. But I could yield you more for that purpose.
    We will turn now to the gentleman from Illinois, Mr. Rush.
    Mr. Rush. I want to thank you, Mr. Chairman, for this 
first-class hearing, and I want to thank the panelists for 
being an all-star panel of witnesses.
    Mr. Chairman, I want to ask the panel if they would answer 
this question in the Dingell-esque fashion, this first 
question, with a yes or no answer.
    Do you think that the FCC is on a collision course with the 
D.C. Circuit again if it exercises its Section 706 authority to 
reclassify broadband Internet access as a common carrier 
service under its rules? Yes or no beginning with Chairman 
Powell.
    Mr. Powell. Yes, sir, I do.
    Mr. Dickerson. Yes.
    Mr. Misener. If the network operators choose to make it so, 
yes.
    Ms. Gonzalez. Is the question whether they will go to the 
D.C. Circuit or whether the D.C. Circuit will uphold the 
decision or not?
    Mr. Rush. Will they be on a collision course?
    Ms. Gonzalez. I think it is certain to go to litigation. I 
do believe that the D.C. Circuit will uphold the Title II if it 
is done well.
    Ms. Turner-Lee. Yes to a collision course.
    Ms. Baker. Yes.
    Mr. Rush. All right.
    Chairman Powell, you have hit on this, but I want to ask 
you again in more of a forthright manner.
    Do you have any concerns that under the Republican draft 
Congress will be restating its intent to say that Section 706 
is not a direct grant of statutory authority?
    Mr. Powell. Let me say that I think that is a question for 
Congress, but representing my industry, we do not have problems 
with the commission retaining some 706 authority and breathing 
room to address changing circumstances as the D.C. Circuit 
found.
    I found the D.C. Circuit interpretation of 706 
questionable; highly in conflict with past rulings of the 
commission and Congressional intent, but the D.C. Circuit ruled 
that that is what it meant, and I think we would rather live 
with the FCC administering that provision than Title II.
    Mr. Rush. Thank you.
    I want to move on to Dr. Turner-Lee.
    Are you concerned that the FCC would not be able to deploy 
broadband services and invest in network facilities that 
provide service to low-income rural and minority communities 
under this proposed bill?
    Ms. Turner-Lee. Under the current bill, I think, as it has 
been said, if there were some additional discussion around the 
provision of Section 706 authority as we have all talked about, 
I actually think, Congressman, to your question, that it would 
be a win/win for what we are looking for in terms of broadband 
deployment for low income consumers as well as rural 
communities as well.
    As I said earlier, it would also be a great way to look at 
a proclamation against digital red lining that has the 
potential to back stop and limit progress of what we have been 
trying to do when it comes to ubiquitous deployment among 
communities.
    I honestly want to just keep reiterating that, you know, 
adoption still is at the top of this debate, and it continues 
to get swept under the rug when we talk about these issues, and 
so we are looking for some type of parody. In the legislative 
proposal, I think that that should stay top of mind as well as 
the legitimate consumer concerns that need to be dealt with. 
Even in the case of specialized services, consumer demand is 
driving everything.
    So I think it is important to keep that as the bill is 
discussed and debated, top of mind, Congressman, but I think to 
your point we have to avoid that collision course that you just 
mentioned, and we are on that pathway if we don't put in the 
right effects to actually make sure that we don't do that.
    Mr. Rush. Miss Gonzalez, I wanted to ask this question. I 
only have 30 seconds--well, 37 seconds. The chairman might be 
graceful and give me a couple of more seconds.
    The Republicans draft would authorize the FCC to hear and 
adjudicate complaints brought by individuals against their 
Internet broadband provider on a case-by-case basis.
    Should these complaints and outcomes be germane to FCC 
consideration on whether certain merger transactions would 
promote the public interest?
    Ms. Gonzalez. I am sorry, Mr. Congressman. Is the question 
whether or not this would serve the public interest to allow 
the commission to adjudicate on a case-by-case basis?
    Mr. Rush. No. If in fact the commission--should they 
consider that certain merger transactions in association with 
these complaints brought by individuals, would the FCC take--
should the FCC consider these complaints germane to its 
decisions regarding----
    Ms. Gonzalez. On mergers?
    Mr. Rush. Yes.
    Ms. Gonzalez. Well, I think when it considers complaints, 
it has to look at the ecosystem in general to determine whether 
or not there is competition. I think merger determinations are 
in separate dockets, and rightly so.
    But certainly when considering what kind of protections we 
need, we need to look at the marketplace and whether or not 
there is competition in the merger. You know, mergers and 
acquisitions and the level of competition certainly is 
relevant.
    Mr. Rush. Thank you.
    Mr. Chairman, I just have--if I can ask for an additional 
45 seconds.
    Mr.  Walden. If you go fast.
    Mr. Rush. OK. As you all know, the cash cow of competition 
around the passage of the 1996 Telecommunications Act was 
really a long-distance voice. That is where the profits and 
traffic volumes were. Congress gave the FCC and state 
commissions authority to allow competitors to enter in their 
local phone markets through resale and interconnection. That 
was the regulatory, and we saw billions and billions of dollars 
and investments follow into that sector, but times have 
changed.
    Congress knew about the Internet then, but only a few 
peoples around the world knew what a game changer the Internet 
would become. By the turn of the decade, it had become more 
apparent that the cash cows of communications were not long-
distance voice but instead wireless voice and later broadband 
data.
    Mr. Powell stated that over the course of a number of 
proceedings, the FCC found that broadband Internet access 
services are more like information services than 
telecommunications services. And perhaps Congress should have 
stepped back in and reconsidered these definitions, but we did 
not.
    And, Mr. Chairman, I think that we are on our way with this 
hearing and with additional hearings trying to settle the 
question of do broadband Internet services now fit the criteria 
for telecommunications services more than information services?
    And with that I yield back.
    Mr. Walden. Thank the gentleman.
    Thank the gentleman.
    I will now go to the gentleman from New York, new member of 
our subcommittee, Mr. Collins.
    Mr. Collins. Thank you, Mr. Chairman.
    I want to thank all the witnesses. As a new member, we are 
playing catch up a bit, and your testimony has been very 
valuable.
    My question is for Ms. Baker. I know wireline and wireless, 
they are two different worlds, and you represent the wireless 
world. And the language in our bill does talk about reasonable 
network management. I would think that is the attempt to give 
you and the wireless some flexibility, because you are in 
different worlds.
    I also seem to understand your industry is adamantly 
opposed to Title II. So we are here and we are talking and we 
understand there is difference. Could you expand a little bit 
on the reasonable network management language, which all of us 
embrace but may be difficult to interpret, and let me know how 
you see it impacting the wireless world?
    Ms. Baker. Thanks for the question.
    Yes, the wireless industry is different for a number of 
different reasons. The number one that I think we all have our 
arms around is the technical parameters. We operate on the 
spectrum, which is limited capacity, which is shared, and it is 
moving. So we need dynamic management millisecond to 
millisecond, and it changes all the time depending on who is 
sharing the spectrum. And it is going to change from today to 
45 days from now, because someone is going to come up with a 
more efficient way, and we are going to upgrade our networks.
    But they are not just technically different, they are also 
competitively different, and so our guys need to be able to 
differentiate different services so that they can compete more 
effectively against each other. We are worried what happens in 
Title II is that we might become one size fits all, and that is 
not what we want the wireless industry. We want the wireless 
industry to remain dynamic and competitive and continue to 
innovate and differentiate themselves.
    We are also very new, so we are worried with the Title II 
world that we would not be able to introduce some of the 
exciting things that are coming from the wireless platform. I 
talk about connected life, meaning mobile health, connected 
cars, some of the innovations in education.
    So we want to make sure that our future in wireless, we are 
the world's leader in 4G, and we want to make sure that we are 
the world's leader in 5G. We think this bill is a great start. 
The definition of reasonable network management includes 
technology. We will work with the committee on other 
definitions. But we are encouraged from the action here because 
we think the FCC is headed down the wrong path.
    Mr. Collins. That is very helpful, because I am glad to 
hear you are embracing what we are doing, especially that 
language, and that you feel your industry can live with that 
language. And certainly I think the committee would be very 
open as this moves forward. And I just know that there has been 
that discussion, because they are two different worlds. Very 
happy, again, to hear your support of this critical 
legislation.
    With time running late, Mr. Chairman, I will yield back the 
balance of my time.
    Mr. Walden. The gentleman has yielded back the balance of 
his time.
    It looks like we will go to our final member at the dais, 
Mr. Cramer of North Dakota. Thanks for sticking with us, and 
thanks for being on the subcommittee.
    Mr. Cramer. Thank you, Mr. Chairman, for the opportunity. 
And as you know, I spent nearly 10 years in North Dakota 
regulating various industries. And the more telecom cases that 
came before us, the less I was enthused about it, because it 
just seemed like every case that came before us was about a new 
technology that required less regulation, not more.
    Nonetheless, I was happy to carry out really several cases, 
some landmark. I think we did one of the early ETCs for a 
wireless company. We did an early VoIP interconnection case 
with a rural telco. We did a very contentious cable company 
seeking facilities-based ILEC in the Bakken. I don't know that 
any of them were unanimous. I am proud to say I was on the 
prevailing side, and all of them were held up in court, both 
federal and state court. That said, I don't feel as smart as I 
used to today for some reason. So I appreciate everybody.
    I also have to say that I was amused by Ms. Eshoo's 
admonition of Catholic confession with Mr. Shimkus, but I 
noticed that he said he came kicking and screaming, which is 
far short of repentance, I will tell you.
    Ms. Eshoo. It is part of it.
    Mr. Cramer. I appreciate, Chairman Powell, your reference 
to the omission of the RFA in this by the Commission, because 
this is a far too common omission by several regulatory 
agencies in recent years, and it was one that hadn't come to my 
attention yet. But you are right, I think a lot of issues could 
be solved much better, much more to the liking of investment 
opportunity if we were applying the RFA appropriately.
    I am also interested in this issue of specialized services. 
And maybe this will demonstrate my ignorance a little bit. But 
if we are on the one hand arguing that we should give and we 
trust the FCC's use of flexibility in determining forbearance, 
why wouldn't we trust their flexibility in determining 
specialized services under this draft? And is there some way we 
can tighten that up if it concerns people? If somebody wanted 
to take that one on.
    Mr. Misener.
    Mr. Misener. Yes, thank you for the question, Congressman. 
I do believe the FCC, as the specialized agency, ought to be 
empowered to help flesh out rules, provide through notice and 
comment rulemaking the detail and certainty that both 
businesses and consumers need, under, again, that ceiling set 
by Congress. So if the bill goes forward, the ceiling is fine, 
but the commission ought to have the authority beneath it.
    Mr. Cramer. Did you want to take a stab at that, Mr. 
Powell?
    Mr. Powell. Well, I just wanted to quickly say, in this 
denigration of specialized services this Commission has 
repeatedly held that there is room for specialized services, 
even in its 2010 rules, because it believed there were really 
serious consumer-benefiting characteristics to that.
    The reason specialized services is an issue is we use the 
same network for the provision of proprietary services that we 
built and privately financed and own a network to deliver. A 
huge amount of that capacity is reserved and used for the 
services we are in the business of selling. There is an effort, 
subtle or otherwise, to confiscate the entire platform for 
public Internet use.
    What the FCC recognized was some portion of that 
infrastructure will always rightfully be available to the 
incumbent who built the network to deliver the services and 
innovate for their consumers in the provision of the services 
they are in business to provide. You have to provide for an 
allowance for specialized services lest you are creating a 
taking of property in its totality.
    Now, if Mr. Misener is correct, can we talk about how you 
define it or what the FCC's flexibility in interpreting it? I 
have absolutely no problem with that.
    Mr. Cramer. Dr. Turner-Lee.
    Ms. Turner-Lee. Thank you. And Congressman, if I may, I 
will just add on real quickly to the other comments.
    I think there is a conversation that can be had about 
specialized services, particularly if you go back to much of my 
testimony about adoption and relevance. If we look at the case 
of zero rating programs, for example, for low-income minority 
communities that are not engaged, there is some space to 
actually have some discussion on how those could be used for a 
public interest. I think it comes back to a legitimate consumer 
concern, and questions related to who is to say today that 
tomorrow we won't be looking at telemedicine delivery and our 
ability to get our health records in real time not being 
important to us.
    I think there is some room for conversation, and with the 
FCC as the expert agency to help us guide that discussion as to 
what is important to consumers.
    Mr. Cramer. Well, and that brings me to another point that, 
again, maybe I am not understanding clearly, but we have heard 
a lot of bemoaning of the 706 authority, Title II authority 
being stripped away, and that somehow that leaves the FCC 
powerless, and we haven't talked a lot about their ancillary 
authority, which is there to deal with a lot of these issues. 
And the ones that aren't there, we are here. I mean, Congress, 
there is a new one every couple of years. I feel like for too 
many years Congress has sort of just let the agencies become 
Congress. And I think that is the balance we are trying to 
strike. And I don't know if somebody has a few seconds to add 
to that.
    Mr. Gonzalez. I can respond to that, Mr. Congressman.
    Mr. Cramer. Sure.
    Mr. Gonzalez. The reason we are concerned about the 
stripping of the 706 and the Title II is because of court cases 
in the past, you know, four decades that have really stripped 
the FCC of much of its ancillary authority and have whittled it 
away over the years. And so that to us feels like a less 
certain solution.
    Mr. Cramer. Chairman Powell, has the Commission's ancillary 
authority been stripped away?
    Mr. Powell. There are two quick things that I think are 
important. Number one, the Commission has authorities that come 
from a range of statutes. It is not exclusively governed by 
just the Telecommunication Act. The Commission has been very 
aggressive in the protection of disability access for 
communities because this body passed the CCVA, which authorizes 
them to apply disability protections to Internet services, and 
is aggressively doing so. The Commission has authority under 
CALEA to protect surveillance and other kinds of issues. There 
is a whole host of authorities. And some, yes, are ancillary. 
The Commission, I would argue, has lost ancillary when it has 
abused that power. It has also frequently used ancillary 
effectively to do any number of social-positive regulations.
    Mr. Cramer. I thank you all. This has been fascinating.
    Thank you, Mr. Chairman.
    Mr. Walden. Thank you, Mr. Cramer.
    I think that brings to a close the participation by our 
members. I have a series of letters that I ask unanimous 
consent be added in, letters and op-eds and things. One from 
Joel White, executive director of Health IT Now Coalition, 
opposing Title II; Bradley Merrill Thompson, general counsel, 
mHealth Regulatory Coalition; and Robert B. McCray, president 
and CEO, Wireless-Life Services Alliance. Without objection, we 
will put that one in.
    An opinion piece by our former colleague Rick Boucher on 
net neutrality being low hanging fruit for Congress, and urging 
action. Without objection, we will put that in the record.
    From the Telecommunications Industry Association opposing 
Title II and supporting legislative action from Scott Belcher, 
chief executive officer, Telecommunications Industry 
Association. A letter from the Application Developers Alliance, 
Mr. Jon Potter, president, Application Developers Alliance, 
agreeing regarding legislation applied in the debate. And then 
there is a coalition of economic groups, from TechFreedom to 
Americans for Tax Reform, and a whole bunch of others, and 
individuals representing educational institutions and 
elsewhere, in support of our legislative initiatives in whole 
or part. So without objection, we will put that in the record 
as well.
    [The information appears at the conclusion of the hearing.]
    Mr. Walden. And, again, we want to thank all of our 
witnesses, and especially grant some forbearance to the two 
that have to go now on to the Senate and repeat this. We thank 
you for your endurance and your participation. To all the 
witnesses, we are very sincere about following up with you 
sooner rather than later on language to deal with these issues. 
The principles that we have outlined in the legislation we feel 
strongly about. We are not in the business of creating 
loopholes to go around something we feel strongly about. So we 
look forward to collaborating with you on that, on the appeals 
process, and these various things.
    So thank you all. And we stand adjourned.
    [Whereupon, at 1:12 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

                Prepared statement of Hon. Steve Scalise

    The importance of today's hearing and the issue before us 
cannot be overstated. Simply put, the Internet has positively 
changed the world and transformed our economy in ways 
previously unimagined. How we communicate, work, get our news, 
shop or even watch television have all changed, and improved 
drastically in just a few years.
    Even President Obama stated the ``Internet has been one of 
the greatest gifts our economy--and our society--has ever 
known.'' That is why I continued to be baffled by this 
president's belief that the Federal government needs to now 
swoop in and ``fix'' the Internet.
    Last night the president talked about infrastructure. Well, 
mobile and fixed broadband networks are the infrastructure of 
the 21st century. They are the keys to the future of our 
economy and the ability of individuals to improve their 
economic well-being.
    But apparently the president and the Chairman of the 
Federal Communications Commission (FCC) believe our 21st 
century infrastructure must be ``fixed'' by applying outdated 
laws and regulations from the 1930s.
    Reclassifying broadband under Title II represents a 
complete paradigm shift in how our government treats the 
Internet. The long-standing and successful ``light touch'' 
regulatory model has ensured the Internet's success.
    Why would we want to introduce more government regulation 
and bureaucratic micromanagement from Washington that would 
harm a vibrant, successful, well-functioning global set of 
networks? It makes no sense.
    Since its inception, the Internet has been driven by market 
forces. Consumers have picked winners and losers, and 
innovators have thrived. My fear is that under Title II, the 
government--specifically the FCC--would be in the driver's seat 
dictating the market while consumers--and innovation--suffer.
    The impacts of Title II will be profound, and the imminent 
regulatory uncertainty under reclassification will drag on for 
years and kill billions of dollars in private investment. We 
must proceed deliberately. I urge the FCC to do the same and to 
take its direction from Congress rather than bow to political 
pressure from the White House.
    I commend Chairmen Walden and Upton for putting forward 
this bill. I urge Chairman Wheeler and the other FCC 
Commissioners to work with Congress on a broadband policy 
framework that works for hard-working taxpayers and innovators 
and ensures a vibrant Internet for generations to come. We do 
not need the Federal government to ``fix'' the Internet!
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