[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
FCC: PROCESS AND TRANSPARENCY
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HEARING
BEFORE THE
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
MARCH 17, 2015
__________
Serial No. 114-21
__________
Printed for the use of the Committee on Oversight and Government Reform
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.fdsys.gov
http://www.house.gov/reform
______
U.S. GOVERNMENT PUBLISHING OFFICE
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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
JASON CHAFFETZ, Utah, Chairman
JOHN L. MICA, Florida ELIJAH E. CUMMINGS, Maryland,
MICHAEL R. TURNER, Ohio Ranking Minority Member
JOHN J. DUNCAN, Jr., Tennessee CAROLYN B. MALONEY, New York
JIM JORDAN, Ohio ELEANOR HOLMES NORTON, District of
TIM WALBERG, Michigan Columbia
JUSTIN AMASH, Michigan WM. LACY CLAY, Missouri
PAUL A. GOSAR, Arizona STEPHEN F. LYNCH, Massachusetts
SCOTT DesJARLAIS, Tennessee JIM COOPER, Tennessee
TREY GOWDY, South Carolina GERALD E. CONNOLLY, Virginia
BLAKE FARENTHOLD, Texas MATT CARTWRIGHT, Pennsylvania
CYNTHIA M. LUMMIS, Wyoming TAMMY DUCKWORTH, Illinois
THOMAS MASSIE, Kentucky ROBIN L. KELLY, Illinois
MARK MEADOWS, North Carolina BRENDA L. LAWRENCE, Michigan
RON DeSANTIS, Florida TED LIEU, California
MICK MULVANEY, South Carolina BONNIE WATSON COLEMAN, New Jersey
KEN BUCK, Colorado STACEY E. PLASKETT, Virgin Islands
MARK WALKER, North Carolina MARK DeSAULNIER, California
ROD BLUM, Iowa BRENDAN F. BOYLE, Pennsylvania
JODY B. HICE, Georgia PETER WELCH, Vermont
STEVE RUSSELL, Oklahoma MICHELLE LUJAN GRISHAM, New Mexico
EARL L. ``BUDDY'' CARTER, Georgia
GLENN GROTHMAN, Wisconsin
WILL HURD, Texas
GARY J. PALMER, Alabama
Sean McLaughlin, Staff Director
Rachel Weaver, Deputy Staff Director
Tristan Leavitt, Counsel
Cordell Hull, Counsel
Sharon Casey, Deputy Chief Clerk
C O N T E N T S
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Page
Hearing held on March 17, 2015................................... 1
WITNESSES
The Hon. Thomas Wheeler, Chairman, Federal Communications
Commission
Oral Statement............................................... 4
Written Statement............................................ 8
APPENDIX
Wheeler-FCC Response to Questions for the Record................. 58
2015-02-04 WSJ - How White House Thwarted FCC Chief on Net
Neutrality..................................................... 71
2015-02-23 Daily Caller Obama's Move to Regulate Internet by
Picket......................................................... 79
2015-03-16 Orgs to JEC EEC - Net Neutrality...................... 82
2015-03-17 Orgs to FCC - Net Neutrality.......................... 84
2015-03-02 The Process of Governance by Sallet FCC............... 87
FCC: PROCESS AND TRANSPARENCY
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Tuesday, March 17, 2015,
House of Representatives,
Committee on Oversight and Government Reform,
Washington, DC.
The committee met, pursuant to notice, at 10 a.m., in room
2154, Rayburn House Office Building, the Honorable Jason
Chaffetz (chairman of the committee) presiding.
Present: Representatives Chaffetz, Mica, Jordan, Walberg,
Amash, DesJarlais, Farenthold, Massie, Meadows, DeSantis, Buck,
Walker, Blum, Hice, Russell, Carter, Grothman, Palmer,
Cummings, Maloney, Norton, Connolly, Kelly, Lawrence, Lieu,
Watson Coleman, Plaskett, DeSaulnier, Welch, and Lujan Grisham.
Chairman Chaffetz. Good morning. The Committee on Oversight
and Government Reform will come to order. Without objection,
the chair is authorized to declare a recess at any time.
We are here today to examine the FCC's rulemaking process
and the agency's commitment to transparency. Three weeks ago,
the FCC approved new rules that will dramatically increase the
regulation of the Internet. The problem is Americans only got a
chance to read them last week.
Last month, Chairman Wheeler told Members of Congress that
releasing the preliminary discussion draft ran contrary to
``decades of precedent'' at the Commission. In reality, the
current process for making changes to Internet rules is far
less transparent than what occurred with the equally
controversial media ownership rule changes in 2007.
In 2007, then-Senator Obama's ``strongly requested'' the
FCC ``put out any changes that they intend to vote on in a new
notice of proposed rulemaking.'' Senator Obama believed to do
otherwise would be ``irresponsible.'' Then-Chairman Kevin
Martin responded to these concerns by releasing the draft text
of the rule changes and inviting a 4-week public comment
period.
In making the text public, Chairman Martin explained,
``Because of the intensely controversial nature of the . . .
proceeding and my desire for an open and transparent process, I
want to ensure that Members of Congress and the public had the
opportunity to review my proposal prior to any Commission
action.'' That didn't happen in this case so to suggest that
there is no precedent for this, that is just not true.
Chairman Martin went even further and, in December 2007,
testified before Congress, more than once, about the rule
changes. And yet we invited Commissioner Wheeler to come before
us and he refused. Didn't have any problem meeting at the White
House, but did have a problem coming before Congress.
In today's case, Chairman Wheeler did quite the opposite
and failed to provide this type of transparency. Chairman
Wheeler did not make the rule public, did not invite public
comment, and declined to appear before this committee. We find
that wholly unacceptable.
Further, it appears the FCC has been concealing certain
communications from the public without legal basis.
I want to put up a slide. We will refer to this later. But
there are several reactions to requests that were made for
Freedom of Information Act experiences.
Do we have that slide? I guess not. I am going to keep
going.
Organizations that hold our Government accountable depend
on the FOIA process to gain insight into agency decisionmaking.
The FCC's track record in responding to FOIA requests is weak,
at best.
At the outset, the FCC denies more than 40 percent of all
FOIA requests. The documents FCC does produce contain a number
of redactions, including some that black out entire pages of
text.
This committee has received 1,600 pages of unredacted email
traffic previously provided in a highly redacted form through
FOIA requests to various organizations, including vice.com.
Today we will compare these communications to understand what
legal justification Mr. Wheeler's agency used to prevent this
information from becoming public. In addition, we will examine
the series of events resulting in the highly controversial vote
to use Title II to regulate the Internet like a public utility.
In May 2014, the FCC issued a Notice of Proposed Rulemaking
concerning Internet regulation that indicated broadband and
mobile services would remain classified under Title I. Public
Statements made by Chairman Wheeler and communications received
by this committee demonstrate that this was the chairman's
intent during this time period.
In October 2014, and after the FCC's public comment period
ended, media reports indicate that Chairman Wheeler intended to
finalize a hybrid approach that continued to classify broadband
and mobile Internet services under Title I. Just days later,
President Obama appeared in a YouTube video calling for a
radically different proposal: full Title II reclassification,
similar to a utility or telephone company. Emails provided to
the committee by the FCC suggest that this came as a major
surprise to the FCC staff, including Mr. Wheeler.
On January 7th, Chairman Wheeler announced the FCC would
radically alter course and reclassify broadband and mobile
services under Title II. I am sure much will be made about the
4 million comments that were made, but they were not made in
the context of fully changing this to Title II. The FCC adopted
the rule change on February 26th in a three to two vote.
The lack of transparency surrounding the open Internet
rulemaking process leaves us with a lot of questions. This is a
fact-finding hearing. This committee remains committed to
ensuring full transparency across Government, and I look
forward to hearing more from Chairman Wheeler today.
With that, I will now recognize the ranking member from
Maryland, Mr. Cummings, for 5 minutes.
Mr. Cummings. Thank you very much, Mr. Chairman.
We are here today to discuss net neutrality, the rule that
was adopted last month by the FCC.
There are strong opinions on all sides of this issue. No
doubt about it. On the one hand, Internet service providers,
including Comcast, AT&T, Verizon and Time Warner, oppose the
rule and lobbied against it. They argued that additional
regulation would increase fees, reduce investment, slow network
upgrades, and reduce competition and innovation.
On the other hand, supporters of this new rule contend that
ISPs should not be allowed to discriminate based on content.
They believe ISPs should be required to act like phone
companies, controlling the pipes that make up the Internet, but
not what flows through them. Consumers, social media entities
and companies like Facebook, Netflix, and Google favor open
Internet policy because they do not want to be charged higher
prices to provide their services.
The question before the committee is not which policy we
may prefer, but whether the process used by the FCC to adopt
the rule was appropriate. Republicans who oppose the new rule
allege that President Obama exerted undue influence on the
process. But we have seen no evidence to support this
allegation.
Instead, the evidence before the committee indicates that
the process was thorough, followed the appropriate guidelines,
and benefited from a record number of public comments.
I welcome Chairman Wheeler here today to discuss the
process used by the FCC, and I would like to make several
points for the record. First, the FCC received more comments on
this rule than any other rule in its history. That is indeed
very significant. As I understand it, the FCC received about 4
million comments. This grassroots movement was highlighted when
John Oliver, a popular late night talk show host, encouraged
his viewers to go on the FCC website to comment on the proposed
rule. The number of comments was also extremely high because
the FCC established a 60-day comment period twice, twice as
long as required by the Administrative Procedures Act.
In addition, the President has a right to express his
position on proposed rules, and he did so forcefully in this
case. In November he made remarks in support of an open
Internet rule, arguing that it is ``essential to the American
economy.'' He said the FCC ``should create a new set of rules
protecting net neutrality and ensuring that neither the cable
company nor the phone company will be able to act as a
gatekeeper, restricting what you can do or see online.''
When he gave this speech, the President also ensured that
his office submitted the appropriate ex parte filing. He did
this through the National Telecommunications and Information
Agency, which is tasked with providing the FCC with information
about the Administration's position on policy matters.
Presidents routinely make their positions known to
independent agencies regarding pending rules. Presidents
Reagan, George H.W. Bush, Clinton, and George W. Bush all
expressed opinions on FCC regulations during their
presidencies. In fact, for this neutrality rule there were more
than 750 ex parte filings from individuals, public interest
groups, lobbyists, corporations, and elected officials, all of
whom had an opportunity to make their views known.
Finally, if the committee is going to examine the actions
of Chairman Wheeler and his communications with supporters of
the rule, then we must also examine the actions of Republican
Commissioners Pai, O'Reilly, and others who oppose the rule.
Multiple press accounts indicate that they have been working
closely with Republicans on and off, on and off Capitol Hill to
affect the FCC's work, and we should review their actions with
the same level of scrutiny.
Chairman Wheeler, I want to thank you again for appearing
before our committee today, and I look forward to your
testimony.
With that, Mr. Chairman, I yield back.
Chairman Chaffetz. I thank the gentleman.
I will hold the record open for five legislative days for
any member who would like to submit a written Statement.
We will now recognize our witness, the Honorable Thomas
Wheeler, Chairman of the Federal Communications Commission. We
welcome you here today and glad that you could join us.
Pursuant to committee rules, all witnesses will be sworn
before they testify, so if you will please rise and raise your
right hand.
Do you solemnly swear or affirm that the testimony you are
about to give will be the truth, the whole truth, and nothing
but the truth?
[Witness responds in the affirmative.]
Chairman Chaffetz. Thank you. We appreciate it.
In order to allow time for discussion, we normally ask for
your testimony to be limited to 5 minutes, but we are very
forgiving on this. We would appreciate your verbal comments.
Your entire written Statement will be made part of the record.
Mr. Wheeler
STATEMENT OF THE HONORABLE THOMAS WHEELER, CHAIRMAN, FEDERAL
COMMUNICATIONS COMMISSION
Mr. Wheeler. Thank you very much, Mr. Chairman, ranking
member, members of the committee. I will take that hint, as
well as your forgiveness, and try to skip through some early
paragraphs here.
I am proud of the process that the Commission ran to
develop the Open Internet Order. It was one of the most open
and most transparent in Commission history, and the public's
participation was unprecedented.
Last April I circulated a draft Notice of Proposed
Rulemaking that included a set of open Internet protections and
also asked questions about the best way to achieve an open
Internet. The Open Internet NPRM adopted in May proposed a
solution based on Section 706 of the Telecommunications Act of
1996. It also specifically asked extensive questions as to
whether Title II of the Communications Act of 1934 would be a
better solution.
A quick point on our procedures. While, historically, some
NPRMs just ask questions, during my chairmanship, I have made
it a policy to present draft NPRMs to my colleague that contain
specific proposals as a means to flag key concepts for
commenters' attention. I believe this is an important part of
an open and transparent rulemaking process. But let's be clear.
The proposal is tentative, not a final conclusion, and the
purpose of the comment period is to full test that concept. In
this instance, as in others, it worked in the desired way to
focus the debate.
The process of the Open Internet rulemaking was one of the
most open and expansive processes the FCC has ever run. We
heard from startups; we heard from ISP; we heard from a series
of public roundtables; as Mr. Cummings mentioned, we heard from
750 different ex partes; we heard from over 140 Members of
Congress; we heard from the Administration both in the form of
President Obama's very public Statement on November the 10th
and in the form of the MTIA's formal submission.
But here I would like to be really clear. There were no
secret instructions from the White House. I did not, as CEO of
an independent agency, feel obligated to follow the President's
recommendations. But I did feel obligated to treat it with the
respect that it deserves, just as I have treated with similar
respect the input, both pro and con, from 140 Senators and
Representatives. And most significantly, as has been pointed
out, we heard from 4 million Americans.
We listened and learned throughout this entire process, and
we made our decision based on a tremendous public record.
My initial proposal was to reinState the 2010 rules. The
tentative conclusion put forth in the NPRM suggested that the
FCC could assure Internet openness by applying a ``commercial
reasonableness'' test under Section 706 to determine
appropriate behavior of ISPs. As the process continued, I
listened to countless consumers, innovators, and investors
around the Country.
I also reviewed the submissions in the record and became
concerned that the relatively untested ``commercially
reasonable'' standard might be subsequently interpreted to mean
that what was reasonable for ISP's commercial arrangements, not
what was reasonable for consumers. That, of course, would be
the wrong conclusion, and it was an outcome that was
unacceptable.
So that is why, over the summer, I began exploring how to
utilize Title II and its well-established ``just and
reasonable'' standard. As previously indicated, this was an
approach on which we had sought comment in the NPRM and about
which I had specifically spoken, saying that all approaches,
including Title II, were ``very much on the table'' for
consideration.
You have asked whether there were secret instructions from
the White House. Again, I repeat the answer is no.
Now, the question becomes whether the President's
announcement on November 10th had an impact on the Open
Internet debate, including at the FCC. Of course it did.
The push for Title II had been hard and continuous from
Democratic Members of Congress. The President's weighing in to
support their position gave the whole Title II issue new
prominence. Of course, we had been working on approaches to
Title II, including a combined Title II/Section 706 solution,
for some time. The President's focus on Title II put wind in
the sails of everyone looking for strong open Internet
protection. It also encouraged those who had been opposing any
Government involvement to, for the first time, support
legislation with bright line rules.
And as I considered Title II, it became apparent that,
rather than being a monolith, it was a very fluid concept. The
record contained multiple approaches to the use of Title II.
One of those was the Title II/Section 706 ``hybrid'' approach
that bifurcated, some would say artificially, Internet service.
Another, the approach we ultimately chose, used Title II and
Section 706, but without bifurcation. And still another, the
one the President supported, was only Title II without Section
706. All of these were on the table prior to the President's
Statement.
But let me be specific. We were exploring the viability of
a bifurcated approach. I was also considering using Title II in
a manner patterned after its application in the wireless voice
industry, and I had, from the outset, indicated a straight
Title II was being considered.
A key consideration throughout this deliberation was the
potential impact of any regulation on the capital formation
necessary for the construction of broadband infrastructure. An
interesting result of the President's Statement was the absence
of a reaction from the capital markets. When you talk about the
impact of the President's Statement, this was an important data
point, resulting, I believe, from the President's position
against rate regulation. It was, of course, the same goal that
I had been looking to achieve from the outset.
As we moved to a conclusion, I was reminded how it was not
necessary to invoke all 48 sections of Title II. In this
regard, I had been considering the substantial success of the
wireless voice industry after it was deemed a Title II carrier
pursuant to Section 332 of the Communications Act. In applying
Title II, but limiting its applicable provisions, the Congress
and the Commission in that Act enabled a wireless voice
business with hundreds of billions of dollars of investment and
a record of innovation that makes it the best in the world.
This is the model for the ultimate recommendation that I put
forward to my colleagues.
There were other industry data points that informed my
thinking and the Commission's analysis. One was the recognition
of interconnection as an important issue, a topic not addressed
by the President. Another was my letter to Verizon Wireless
about its announcement to limit ``unlimited'' data customers if
the subscriber went over a certain amount of data, a policy it
ultimately reversed.
Of particular note was the active bidding, and ultimately
overwhelming success, of the AWS-3 spectrum auction at the end
of 2014 and the beginning of 2015, which showed that investment
in networks, even in the face of the potential classification
of mobile Internet access under Title II, continued to
flourish. Other industry data points included the work of Wall
Street analysts and the Statements of the ISPs themselves.
Sprint, T-Mobile, Frontier, and hundreds of small rural
carriers said that they would continue to invest under this
Title II framework that we were developing.
Ultimately, the collective findings of the public record
influenced the evolution of my thinking and the final
conclusion that modern, light-touch Title II reclassification,
accompanied by Section 706, provides the strongest foundation
for Open Internet rules. Using this authority, we adopted
strong and balanced protections that assure the rights of
Internet users to go where they want, when they want, protect
the open Internet as a level playing field for innovators and
entrepreneurs, and preserve the economic incentives for ISPs to
invest in fast and competitive broadband networks.
I stand ready to answer your questions.
[Prepared Statement of Mr. Wheeler follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Chaffetz. Thank you. I will recognize myself for 5
minutes.
Chairman, did you or the FCC ever provide the White House
the proposed rule prior to the final vote?
Mr. Wheeler. No, sir.
Chairman Chaffetz. The comment period was open May 15th.
How many times did you meet either at the White House or did
the White House officials come meet with you during that time?
Mr. Wheeler. In total? I mean, about any issue?
Chairman Chaffetz. Yes.
Mr. Wheeler. I think that we have shown you my calendar
that has something like 10.
Chairman Chaffetz. June 11th with Jason Furman, correct?
Mr. Wheeler. You have the list, sir.
Chairman Chaffetz. June 18th with Jeffrey Zients; Caroline
Atkinson, July 17th; September 11th, Jeffrey Zients; September
30th, Megan Smith; October 15th, Jason Furman; October 28th,
Jeffrey Zients; and then Mr. Zients visiting with you on
November 9th at the FCC. Does that sound accurate?
Mr. Wheeler. If that is the list that we provided, sir.
Chairman Chaffetz. And yet you only provided an ex parte
for one of those meetings. Why is that?
Mr. Wheeler. First of all, the rules are quite clear on
what constitutes an ex parte, and that is an attempt to file
specifically in a specific docket and to influence the outcome
of that docket.
Chairman Chaffetz. Did you discuss this matter during those
meetings?
Mr. Wheeler. And there are provisions long established,
going back to, I think, the Bush Administration Office of
Legislative Council.
Chairman Chaffetz. Sir, I have 5 minutes. I need to ask
very specific questions.
Mr. Wheeler. But I need to answer your question. There is
no requirement. You are asking about ex partes, and there is no
requirement that there be an ex parte filed. There was no need
for an ex parte to be filed, either. I just wanted to make sure
that we have both explained.
Chairman Chaffetz. I don't understand that. You met with
them. Are you telling me that this proposed rule did not come
up in any of those meetings but one?
Mr. Wheeler. I don't know the details of those meetings. I
can't recall the details of those meetings. I can assure you
that there were no, nothing that would trigger an ex parte.
Chairman Chaffetz. So you were meeting with the White House
multiple times during the open comment period, after the
comment period closes, and we are supposed to believe that one
of the most important things the FCC has ever done, that this
didn't come up and you didn't have any discussions, that they
didn't comment back to you about what you were doing? Is that
what we are supposed to believe?
Mr. Wheeler. The Administration was very scrupulous in
making it clear that I was an independent agency.
Chairman Chaffetz. I guess the point is, chairman, you met
with them multiple times. They came to visit you, you went to
visit them. But we invite you to come and you refuse. We ask
you to send us some documents. You didn't send us a single one.
And that double standard is very troubling for us.
I need to move on.
Mr. Wheeler. Mr. Chairman, one thing here. I did agree to
come. I am here.
Chairman Chaffetz. No, but before the rule. You met with
the White House before the rule but you didn't meet here.
Mr. Wheeler. You gave me a week's notice. You asked for the
production of documents.
Chairman Chaffetz. That is usually what we give people.
Mr. Wheeler. There were other committees that I am also
trying to respond to. I said in the response I would look
forward to coming to you and I look forward to being here
today.
Chairman Chaffetz. And I didn't believe you then and I
don't believe you now. You said that you would not come to
visit with us. You didn't send us a single document that we
asked for before that rule. That is just not right.
Mr. Wheeler. I think we sent you 1,800 documents.
Chairman Chaffetz. After the rule. My complaint is that
beforehand you didn't. And you met with multiple times with the
White House. I am moving on. Hold on.
Mr. Wheeler. OK.
Chairman Chaffetz. Our time is short. This is the way it
works.
On September 23d, multiple people met at the White House. I
am going to enter into the record, ask unanimous consent this
Daily Callar article of February 23d, 2015, White House log
showing that a number of people met at the White House that are
activists on this topic.
Chairman Chaffetz. I want to play a video clip. This is
6:55 in the morning of the day that the President is going to
issue his Statement. This is you, right, at your home?
Mr. Wheeler. Yes, sir.
Chairman Chaffetz. And you woke up that morning to
protesters out in front of your house; they laid down or sat
down in front of your car, wouldn't let you get out of your
driveway. They were there trying to make quite a Statement. And
there is a long 5-minute video of this.
At 7:35 that morning you sent out an email to your fellow
commissioners calling it an interesting development, and then
later that afternoon--I want to put up a slide.
[Slide.]
Chairman Chaffetz. Now, when this was provided to vice.com,
you redacted this. This was all redacted. Hard to see up on the
screen, but we don't understand why this was redacted. This is
what you wrote. In fact, if you want to read it, go ahead.
This is the same day; 6:55 in the morning, protesters show
up; 7:35 you are sending out a concern. Then, all of a sudden,
the President's Statement comes out in a very coordinated
fashion. He has the right to weigh in on this, that is fine.
But later that afternoon you send out this email, it says,
FYI isn't it interesting? The day of the demonstration just
happens to be the day folks take action at my house. The video
POTUS just happens to end up the same message as the message
for POTUS. The White House sends an email to the supporters
list asking ``Please pass this on to anyone who cares about
saving the Internet.'' And then you write, hmm. Why did you
write that?
Mr. Wheeler. Does this suggest a secret plan, secret set of
instructions?
Chairman Chaffetz. I am asking you why. You wrote it. It is
your language.
Mr. Wheeler. I think that this clearly is showing that
there was no kind of coordination.
Chairman Chaffetz. There was no coordination? The
protesters show up, just happen to show up the morning before
the announcement comes? Nobody knows that the President is
going to make this announcement except the protesters, who show
up at your home, and you are saying that, you are the one that
wrote that you thought, hmm, isn't it interesting.
Mr. Wheeler. Excuse me, I wasn't speaking clearly, clearly.
No, I am talking about coordination with us at the Commission.
I don't know who else they were coordinating with, and this
suggests that maybe they were coordinating with others.
Chairman Chaffetz. So you had multiple meetings with the
White House, they came to visit you, and we are supposed to
believe that there was only one discussion about this? Is that
still your testimony?
Mr. Wheeler. Let me be really clear. They came once to meet
with me and filed an ex parte----
Chairman Chaffetz. Yes, that is true.
Mr. Wheeler [continuing]. At which time I was told, as the
ex parte says, the President is going to make an announcement a
couple days later, and he is going to endorse Title II. That is
all I knew. The other meetings at the White House, I was there
on trade, I was there on national security issues, I was there
on Spectrum, I was there on auctions, I was there on E-Rate.
There were numerous issues. Caroline Atkinson was one of
the names that you named when you were going through the list.
I can assure you I didn't talk to her about Open Internet
because she knows nothing about Open Internet. That entire
conversation, and several that I have had with her, have been
about trade issues and the process for reviewing agreements
that relate to national security items.
Chairman Chaffetz. So you only spoke one time with Jeffrey
Zients about this, one time?
Mr. Wheeler. The only time that Jeffrey Zients said to me
this is what the President's position is was when he came and
filed an ex parte saying that. I have been repeatedly saying I
know the President has a strong position in favor of it the
open Internet, as do I, and keeping them informed that I was
fighting for a strong open Internet position.
Chairman Chaffetz. So you informed them and you are telling
me they had no reaction, no comments?
Mr. Wheeler. I informed them that I had a strong position
in favor of. As a matter of fact, I believe you have emails
that show that I have emails with them saying, hey, these press
reports that I am watering this down aren't true.
Chairman Chaffetz. I have lots more questions, but my time
is far exceeded.
We will now recognize the ranking member, Mr. Cummings, for
5 minutes.
Oh, sorry, Mr. Welch. Mr. Welch of Vermont, you are
recognized for 5 minutes.
Mr. Welch. Thank you very much.
Let's get right to this. Mr. Wheeler, this was probably one
of the most contentious questions, public policy questions that
we have faced in the time I have served in Congress, 4 million
comments. All of us, as Members of Congress, received comments.
The two things that I understood were of concern to you and
your fellow commissioners, Republican and Democrat, were how
would whatever decision you made affect innovation and capital
formation, the build-out, is that correct?
Mr. Wheeler. That was the balance, sir.
Mr. Welch. And was that something that, over time, you all
debated to try to figure out what would be the impact of
whatever direction you took?
Mr. Wheeler. Yes, sir. The whole rulemaking process is an
evolutionary process, and, as I said in my Statement, the whole
concept of what Title II is is a fluid and evolutionary
process.
Mr. Welch. All right. And the premise of this hearing seems
to be almost like a Watergate type of deal, what did you know
and when did you know it. But in public policy, when you are
trying to figure out what you can know and get to a good public
policy decision, it is a back and forth discussion; it is
listening to the 4 million comments, it is listening to Members
of Congress, oh, and, incidentally, the President of the United
States, elected by everybody is a relevant commentator, is that
correct?
Mr. Wheeler. I can tell you I was constantly learning
through this process.
Mr. Welch. All right. Now, there was, in The New York
Times, a report about a previous matter at the FCC where
President Reagan had the commissioner in for 45 minutes. Did
President Obama ever summon you to the White House for the
purpose of a 45 minute discussion about the way it is going to
be with this order that you were considering?
Mr. Wheeler. No, sir. President Obama has never summoned me
to the White House to discuss anything the FCC is doing.
Mr. Welch. All right. And you indicated on this capital
formation issue, after the President, who, by the way, was
obviously aware of the enormous grassroots concern about the
outcome, that when he made his comment, you observed what was
the impact on the markets, correct?
Mr. Wheeler. Yes, sir.
Mr. Welch. And what was that impact?
Mr. Wheeler. There was zero impact on the market. And one
of the concerns that all of the ISP's had been making is
understand what the consequences of an action in Title II may
be on the markets and, lo and behold, there wasn't.
Mr. Welch. In fact, in the case of another country that has
done this, Denmark, I believe, have they continued to have open
access and capital formation with respect to the build-out of
their Internet?
Mr. Wheeler. You are better informed than I am, sir, on
Denmark.
Mr. Welch. OK. Now, just on this capital formation issue,
you mentioned the Spectrum auction. Did that exceed what was
expected to be revenues from that auction?
Mr. Wheeler. Significantly. We raised about $41 billion,
which was triple what some of the estimates were.
Mr. Welch. And with respect to the market since then, has
there been any major disruption that can be attributed to the
decision that you made?
Mr. Wheeler. The market has continued to advance northward
on the valuations of these stocks.
Mr. Welch. All right. And my understanding, as well, is one
of your enormous concerns when you initially proposed possibly
using Section 706 was the wariness about having too heavy-
handed a regulatory regime. And you have some history in the
industry. Were there factors that you took into consideration
in the decision on Title II about what type of regulatory
framework that would be applicable?
Mr. Wheeler. Yes, sir. The model that was built for the
wireless industry, which the wireless industry sought, by the
way, was to use Title II and to have them declared a common
carrier, but then to forebear, to not enforce those parts of
Title II that are no longer relevant.
Mr. Welch. And is it your intention to work with your
fellow commissioners, both Republican and Democrat, in order to
achieve that light touch approach?
Mr. Wheeler. Yes, sir, and I believe this rule has. As a
matter of fact, there are 48 sections to Title II, and we have
forborne from 27 of those, and that just compares with the 19
that were forborne from in the wireless environment.
Mr. Welch. OK. I want to go back basically to the money
question here, the suggestion that somehow, some way, President
Obama, who has a right to express an opinion, muscled you and
the Commission into doing something that you did not want to
do, and as suggestions that that was the case, the Chairman has
indicated a number of meetings you had with folks from the
White House. I just want to give you an opportunity to say
whether the President gave you directions, explicit or
implicit, as to how you should do your job or left it to you to
exercise your judgment and your persuasive ability with your
fellow commissioners.
Mr. Wheeler. No, the President did not. And I interpreted
what the President's Statement was was that he was joining with
the 64 Democratic Members of Congress and the millions of
people, and that he was identifying with them.
Mr. Welch. Thank you, Mr. Wheeler.
I yield back.
Chairman Chaffetz. I thank the gentleman.
We will now recognize the gentleman from Ohio, Mr. Jordan.
Mr. Jordan. Thank you, Mr. Chairman.
Mr. Wheeler, in your testimony you said that the Notice of
Proposed Rulemaking adopted in May proposed a solution based on
Section 706 of the Telecommunications Act. In fact, that seems
to be your position throughout most of 2014, a 706-based
approach. In fact, you testified on May 20th of last year, in
front of Energy and Commerce Committee, that Section 706
approach is sufficient to give the FCC what it needs for an
open Internet. And as late as October 30th of last year, The
Wall Street Journal wrote, ``Chairman Wheeler will move forward
with a 706-based approach.''
Now, back to where the chairman was. All that seems to
change on November 10th, where you State publicly that now
Title II is definitely in the mix, and that is ultimately the
direction that the Commission took. So my question is real
simple: What changed between October 30th and November 10th?
Mr. Wheeler. Mr. Jordan, I think that is an incorrect
assumption.
Mr. Jordan. I am using your Statements, Mr. Wheeler. I am
using what The Wall Street Journal, did they get it right or
were they wrong?
Mr. Wheeler. So on February 19th I said that we keep Title
II authority on the table. The Commission has authority to keep
Title II if warranted.
Mr. Jordan. I am not disputing that.
Mr. Wheeler. There is a laundry list, sir, where I said
that.
Mr. Jordan. Hang on. Hang on. But your testimony, I am
quoting from today's testimony you just read. The proposed rule
was a 706-based approach, and The Wall Street Journal, as late
as October 30th, said a 706 approach was what Chairman Wheeler
was going to move forward with. It changes on the 10th. What
happened between the 30th and the 10th seems to me two events:
one, the President made his YouTube video and commented and
moved toward a Title II approach and he issued a Statement,
and, two, you had an important meeting with Mr. Zients on
November 6th.
Mr. Wheeler. I think that is an incorrect assumption, sir.
Mr. Jordan. I am going by the time line, the stuff you
provided.
Mr. Wheeler. Let me quote from The New York Times the day
after The Wall Street Journal, saying there are four options on
the table.
Mr. Jordan. No, no, no. You can respond when I ask you a
question. That is how it works.
Mr. Wheeler. OK.
Mr. Jordan. All right. So now let me just go through where
the chairman was earlier, your interactions with the White
House. March 6th, FCC Chairman Tom Wheeler meets with Jeff
Zients. Now, here is where you can answer something. Who is
Jeff Zients, by the way?
Mr. Wheeler. He is the head of the National Economic
Council.
Mr. Jordan. OK, at the White House, right? And assistant to
the President for economic policies, got this long title,
right?
Mr. Wheeler. Correct.
Mr. Jordan. OK. So you met with him on March 6th. March
7th, FCC Chairman Tom Wheeler meets with the White House
economic advisor, Jeff Zients; May 7th, meeting with Jeff
Zients at the White House; May 21st, Tom Wheeler meets with
Jeff Zients at the White House; June 11th, Tom Wheeler meets
with the Economic Council advisors at the White House; June
18th, Wheeler meets with Jeff Zients at the White House;
September 11th, Tom Wheeler meets with Jeff Zients at the White
House; October 15th, Tom Wheeler meets again with White House
economic advisors; and October 28th, Tom Wheeler meets with
Jeff Zients at the White House.
So, again, leading up to October 30th, you met with the
White House nine different times, all at the White House with
Mr. Zients, who is the assistant to the President for economic
policy. And up through October the position of the Commission,
according to The Wall Street Journal and according to your
testimony in front of Congress is a 706-based approach. That
changes just a few days later. And I would argue it changes on
November 6th, when again you met with Mr. Zients.
But the one difference here, Mr. Wheeler, the one
difference here is nine times you went to the White House; on
November 6th Jeff Zients comes to you. As I look at the record,
this is the only time he came to you, and my contention is, and
I think where the chairman is and, frankly, where a lot of
Americans would be as they look at this record is Jeff Zients
came to you and said, hey, things have changed; we want the
Title II approach to this rule.
Now, am I wrong?
Mr. Wheeler. Yes. First of all, there may have been nine
meetings, but I tell you, I listed them a moment ago and I
won't go through them again.
Mr. Jordan. No, there were nine meetings at the White House
where you went to the White House. There is one meeting when
Jeff Zients comes to you. And the meeting when he comes to you
is right before everything changes.
Mr. Wheeler. The long list dealing with trade, dealing with
cyber, dealing with auctions, and as I said in my testimony,
before there was any input there were multiple issues on the
table, including a Title II and 706 approach and a hybrid----
Mr. Jordan. I have 29 seconds. Hang on 1 second, Mr.
Wheeler.
Mr. Wheeler. But it is a mistake to say that the only thing
that was on the table was Section 706.
Mr. Jordan. I didn't say that.
Mr. Wheeler. I thought you had.
Mr. Jordan. No, I said nine times you met with him and you
testified in front of Congress 706 and The Wall Street Journal
report that is what you were going to do, and then it changes a
couple days later. I have 11 seconds.
Mr. Wheeler. And The Wall Street Journal report was wrong.
Mr. Jordan. I have 11 seconds. In your testimony you say, I
want to be clear, there were no instructions from the White
House. I did not, as CEO of an independent agency, feel
obligated to follow the President's recommendations.
One last question, if I could, Mr. Chairman.
Mr. Wheeler, who is Philip Verveer?
Mr. Wheeler. He is a special counsel in my office, senior
counsel in my office.
Mr. Jordan. Your top lawyer. Your top advisor. Senior
counsel.
Mr. Wheeler. He is an advisor, yes.
Mr. Jordan. OK. Well, this is an email our staff got with
Mr. Verveer and a lobbyist from AT&T on the 10th, the day this
all changes, 4 days after Mr. Zients came to you. After you
went nine times to the White House in the course of a year, Mr.
Zients comes to you, everything changes, and this is what the
AT&T representative said to your senior counselor: This is
awful and bad for any semblance of agency independence. Too
many people saw Zients going in to meet with Tom last week.
So I am not the only one who thinks everything changed on
November 6th. This individual talked to your senior counselor
and said things changed on November 6th when, again, the White
House came to you and said, Mr. Wheeler, new sheriff in town,
things are different, it is Title II from this point forward.
And that is ultimately what you all adopted. Even though you
had a 706 plan all this time, you ultimately adopted a Title II
approach.
Mr. Wheeler. We did not adopt a Title II approach. We
adopted a Title II and Section 706, which I believe, I can't
read it all, but I think it is referenced in the first line of
that email.
Chairman Chaffetz. The gentleman's time has expired.
Mr. Cummings. Mr. Chairman, with all due respect, the
gentleman just went over a minute and a half. At least I would
ask that he be allowed to answer that question.
Chairman Chaffetz. Sure. Go ahead.
Mr. Wheeler. Thank you. There were, and as I was pointing
out, The New York Times actually wrote the day after this Wall
Street Journal article, that hybrid ``is one of the four
possibilities the FCC is considering as it seeks to draw up a
net neutrality framework that unlike the last two attempts will
hold up in court.'' The Title II and 706 usage, as I said in my
testimony, was on the table along with a Title II and 706 non-
hybrid, along with 706, along with Title II by itself.
Chairman Chaffetz. Now recognize the gentlewoman from New
York, Mrs. Maloney, for 5 minutes.
Mrs. Maloney. Thank you.
Chairman Wheeler, it has been reported that the proposed
open net neutrality rule received 4 million comments, and I am
curious, compared to other rules before the FCC, did any other
rule get anywhere near this number of comments?
Mr. Wheeler. No, ma'am, and it broke our IT system.
Mrs. Maloney. I heard that. Do you have a sense of what
percentage of the comments were in favor of net neutrality? I
know that thousands of comments came in to my office, and all
of them were in favor of an open Internet and net neutrality.
What about your comments?
Mr. Wheeler. I think they ran about three to one in favor.
Mrs. Maloney. Three to one in favor. There were also
several online petitions. I know of one, Free Press, but there
were several others. Are you aware of these online petitions?
Mr. Wheeler. Yes, ma'am.
Mrs. Maloney. And I also know that there were
demonstrations, even in your house, and open meetings and
forums and all kinds of comment periods that you participated
in. And I assume you are familiar with the popular late night
host, John Oliver. He had a piece about net neutrality this
summer that went viral, and he was highly critical of you and
your time as a lobbyist. Are you aware of his program?
Mr. Wheeler. Yes, ma'am. I had new research that had to do
with what a dingo was.
Mrs. Maloney. OK. Well, he encouraged his viewers in this
program to go to the FCC site and to register their position,
and I understand that after his piece aired that you had to
extend the comment period, that it even broke down there were
so many comments coming in in favor of net neutrality and an
open Internet. Is that true?
Mr. Wheeler. Yes, ma'am.
Mrs. Maloney. So do you have any idea how many comments
were submitted after John Oliver's show? Did you break that
down? How many came in?
Mr. Wheeler. I don't know that off the top of my head; I
can get that for you.
Mrs. Maloney. Would you get that for the committee?
Mr. Wheeler. Yes, ma'am.
Mrs. Maloney. And all that attention on you and the efforts
of the individuals that commented, the grassroots
organizations, and the John Oliver piece, is it fair to say
that they had some impact on your decisionmaking process, is
that correct?
Mr. Wheeler. Well, they all went in to the record, No. 1,
and the decision was made on the record, and obviously there
was a high level of concern. I also met around the Country.
Mrs. Maloney. I know, you went all around the Country
holding public forums and listening to comments.
Mr. Wheeler. And those had great impact.
Mrs. Maloney. So I would like to ask you, I am very
curious. In your opinion, who had the greater impact on the
FCC's rule, President Obama's comment or John Oliver's show?
Mr. Wheeler. Well, you know, I tend to view that what was
going on was the President was signing on to the 64 Members of
Congress and the millions of people who had told they want
Title II.
Mrs. Maloney. I sincerely want to thank you, Chairman
Wheeler. It appears that the voices of the American people were
listened to and that you made the proper choice. I commend you
for keeping an open mind during this process and for doing what
is right for the American people and, I believe, the economy.
So I would just say, with all due respect, I believe that
my Republican colleagues are looking at this issue in the wrong
way. They should be thanking President Obama for coming out
strongly in favor of an open Internet rule, clearly where the
American public is and clearly where the economists are, and
they shouldn't be criticizing him.
What I am hearing here today is similar to the hearings we
have had on the auto industry, where the restructuring that
President Obama did, with the support of Congress, to the auto
industry, it was highly critical, they were very critical of
it. But now it is reported it saved 500 jobs; we are now
exporting autos; we had the biggest sales of American autos in
the history of our Country. It was the right decision and I
believe this is the right decision for the American people, and
I want to thank you.
Mr. Wheeler. Thank you, ma'am.
Mr. Cummings. Would the gentlelady yield?
Mrs. Maloney. I most certainly will.
Mr. Cummings. Chairman Wheeler, much has been made about
these emails between some of the FCC staff on November 10th,
2014, the day of the President's announcement. Up until the
President's announcement, were a majority of the public
comments in favor of an open net policy?
Mr. Wheeler. Yes, sir.
Mr. Cummings. In light of all of these public comments, was
Title II being explored by your staff?
Mr. Wheeler. We were deep into Title II and a Title II 706
combination.
Mrs. Maloney. Mr. Ranking Member, may I reclaim my time?
Mr. Cummings. Of course.
Mrs. Maloney. I just want to end by saying that President
Obama saved the auto industry. He saved the auto industry and
he saved the Internet, and I believe very strongly that
Republicans are on the wrong side of this issue for the economy
and for the American people.
Chairman Chaffetz. Thank the gentlewoman.
We will now recognize the gentleman from Florida, Mr. Mica,
for 5 minutes.
Mr. Mica. Thank you, Mr. Chairman.
Welcome. I think this boils down to people are trying to
figure out why you were against the President's policy on net
neutrality before you became for the President's policy and in
a very abrupt turn, and some of it evolves around
circumstances. The Zients meeting with you appears to be very
influential. It appears, too, from some of the communications I
have seen, May 15th, is that when you were releasing the NPRM?
Mr. Wheeler. Yes, sir.
Mr. Mica. I have a copy of an email from Senate Chief of
Staff, this is Mr. Reid's chief of staff at the time, David
Krone. Do you know him?
Mr. Wheeler. Yes, sir.
Mr. Mica. It appears like there was enlistment to try to
keep your previous position intact. He said, good luck today.
Not sure how things have landed, but trust to make it work.
Please shout out if you need anything. Spoke again last night
with the White House and told them to back off Title II. Went
through, once again, the problems it creates for us.
Do you remember this email?
Mr. Wheeler. Yes, sir.
Mr. Mica. OK. Well, it appears that, in defense of your
trying to come up with a certain position, that people were
trying to back you. It looks like Senator Reid was backing you
at that time, right? Or at least this is the indication we
have. And he was trying to get the White House to back off
pressuring you. Is that correct?
Mr. Wheeler. So I am really grateful for this question, Mr.
Mica, because there is, I think, a couple of things that are
important to respond to. One is that the President was clear he
was for a strong open Internet during the campaign----
Mr. Mica. But before his position, you were against his
position, and you had allies that were trying to help you. I
mean, Reid was a big cheese at that time, and this was his
chief of staff. I was a chief of staff on the Senate; I know
the power that they wield.
Mr. Wheeler. Yes, sir. And what I was saying is the against
it before you were for it, the answer in that is no.
Mr. Mica. Well, no. I mean, everything we have, every
public document, and some of it has been cited here, you were
taking a different course. You took a different course, too, in
even rolling this out. You offered a proposal, is that correct?
Mr. Wheeler. I have testified, sir, that this is an
evolutionary process.
Mr. Mica. The proposal was very scant on mention of Title
II.
Mr. Wheeler. No, it was very rich in the mentioning of
Title II and specifically said is it better.
Mr. Mica. OK.
Mr. Wheeler. But be that as it may, as I said, this was a
evolutionary process, and the job of a regulator is to put
forth a proposal to see what it attracts in terms of concerns,
and to learn from that experience and to evolve; and that is
what I did through this entire process.
Mr. Mica. But, see, everything we have indicates that you
were headed in a different direction. You were trying to stem
the tide of the White House. I mean, you were in an awkward
position. And even Commissioner Pai, is it, he said in his
dissenting Statement, President Obama's endorsement of Title II
forced a change in the FCC's approach. So maybe everyone else
who has been observing this process, your comments up to date,
and even one of the commissioners is in conflict with what you
believe.
Mr. Wheeler. Mr. Mica, before the President made his
comment, we were working on a Title II and 706 solution. After
he made his comment, he delivered a Title II and Section 706.
Mr. Mica. And I think Mr. Zients, on November 6th, strong-
armed you. I mean, it is pretty evident and everyone saw it.
Mr. Chairman, let me yield to you.
Chairman Chaffetz. Could we put up the slide, please?
[Slide.]
Chairman Chaffetz. I want to know why you felt compelled to
communicate with the White House about what The New York Times
was writing. This was back in April. You started with this: The
New York Times is moving a story that the FCC is gutting the
open Internet rule. It is flat out wrong. Unfortunately, it has
been picked up by various outlets. You go through and explain
it. Then you send that to Jeffrey Zients. Then you also send
one to John Podesta, sorry, I should have had you on the first
email. Podesta writes back to you, brutal story. Is somebody
going to go on the record to push back? You write back to him,
Yes. I did with a Statement similar to what I emailed you.
You are supposed to be an independent agency, and you are
interacting regularly with the White House on how to
communicate on the PR of a New York Times story?
Mr. Wheeler. So, Mr. Chairman, I had said that we were
going to reinState the 2010 rules, which the President had
endorsed. The report in The New York Times was saying he is not
doing that. I was, therefore, responding and saying you should
know that that report is not true.
At the same point in time I have furnished you also emails
to Members of Congress, Democratic Members of Congress, saying
the same point, and that was what this was. This was, look, the
2010 rules I stand behind and I am not out in a campaign to gut
them, which is what was being reported in the press. And one of
the subsequent emails I sent, as you will recall, was an
article that said, oh, wait a minute, this was
mischaracterized; and that is what that exchange was about.
Chairman Chaffetz. Then why are you redacting all of this
in a FOIA request? How does that meet the standard of FOIA? Why
is this redacted?
Mr. Wheeler. I have to tell you the FOIA, how we respond to
FOIA is done by career staff, not in my supervision, based on
longstanding procedures. I can't answer why certain things are
blacked out.
Chairman Chaffetz. This Administration might want to take
some lessons about FOIA and how to respond to it, because I am
tired of having the heads of the agencies saying, oh, I don't
know anything about it. This is the public's right to know.
This is how the public understands what is happening and not
happening, and your organization is redacting this information,
and it is wrong. I need a further explanation. When can you
give us a further explanation as to why these types of material
is redacted? What is a reasonable time to respond?
Mr. Wheeler. I would be happy to have the staffs work and
provide that to you.
Chairman Chaffetz. By when?
Mr. Wheeler. With expedition.
Chairman Chaffetz. Can you give me a date? By the end of
the month, is that fine?
Mr. Wheeler. Sure.
Chairman Chaffetz. Thank you.
We will now recognize the gentlewoman from the District of
Columbia, Ms. Norton, for 5 minutes.
Ms. Norton. Thank you, Mr. Chairman.
Chairman Wheeler, you know, it is very hard to make a case
against net neutrality, and these members don't want to go home
and make that case, so they are trying to make a case, for
example, against hearing the opinion of the President of the
United States on neutrality. This is a very important policy
issue. It is inconceivable in our Republic that the President
would be silenced on it.
I ran an independent agency. I looked to see what the rules
were in this case. The fact of an administration weighing in on
such a notion is not new, is it?
Mr. Wheeler. No, ma'am.
Ms. Norton. In fact, I was able to discover that Presidents
Reagan, H.W. Bush, Clinton, George W. Bush have all weighed in
specifically on FCC policies in the past, is that not correct?
Mr. Wheeler. Yes, ma'am.
Ms. Norton. I can understand that in such a case where
there might be some appearance, after all, you are an
independent agency and you must abide by that independence,
that you would go to your office of legal counsel. And as it
turns out, there is an office of legal counsel's opinion
advising the then-President George H.W. Bush on whether it was
indeed permissible for that president to contact the FCC to
advocate for a specific position on rulemaking. Is that not
correct?
Mr. Wheeler. Yes, ma'am.
Ms. Norton. Now, because this is the President of the
United States, and not one of our constituents, it is
interesting to note that there are rules about how this should
be done. That needs to be laid out here, since the President is
being criticized, you are being criticized, the Commission is
being criticized; and that has to do with disclosure. The legal
opinion Stated whether or not these matters must be disclosed
in rulemaking on the record if they are of substantial
significance, is that not the case?
Mr. Wheeler. Yes, ma'am.
Ms. Norton. The opinion also addressed whether it is
permissible for the FCC to solicit the views of White House
officials, solicit the views of White House officials, and
whether these would be subject to public disclosure. Is that
not correct?
Mr. Wheeler. Yes, ma'am.
Ms. Norton. So here we have rules saying, yes, Mr.
President, we are not going to silence you on important issue,
but we are going to make clear that your views are absolutely
transparent. So there is no law prohibiting the FCC from
soliciting the opinion of the White House, there are no rules,
and it is in the discretion of whether the FCC would have to
disclose that communication, is that not correct?
Mr. Wheeler. Yes, ma'am.
Ms. Norton. The White House would be required to submit an
ex parte filing only if its response was of substantial
significance and clearly intended to affect the ultimate
decision, is that not the case?
Mr. Wheeler. Yes, ma'am.
Ms. Norton. Did not the White House submit an ex parte
filing on November the 10th, 2014?
Mr. Wheeler. Yes, ma'am.
Ms. Norton. Mr. Chairman, I submit that the rules have been
followed to the letter. This has been an openly transparent
matter. The President was not and should not have been
silenced. If there were more Americans wanting to submit their
opinions, you could imagine that those Americans would also
want to know where the President of the United States stood on
this matter.
I thank you very much and yield back my time.
Mr. Cummings. Would the gentlelady yield, please?
Ms. Norton. I would be glad to yield.
Mr. Cummings. Thank you.
Mr. Wheeler, when you come into office, you are sworn in,
is that right?
Mr. Wheeler. Yes, sir.
Mr. Cummings. And you have an oath that you have to adhere
to, is that right?
Mr. Wheeler. Yes, sir.
Mr. Cummings. And during this process, this entire process,
just tell us whether you believe that you have upheld your
oath.
Mr. Wheeler. Yes, sir.
Mr. Cummings. Every syllable?
Mr. Wheeler. Yes, sir.
Mr. Cummings. Thank you very much.
Ms. Norton. Could I enter into the record the opinions of
some who have submitted them, civil rights and other
organizations of various kinds, to the record, Mr. Chairman?
Chairman Chaffetz. Without objection, so ordered.
Chairman Chaffetz. We will now recognize the gentleman from
Michigan, Mr. Walberg, for 5 minutes.
Mr. Walberg. Thank you from Mr. Chairman.
Coming from the auto capital of the world, let me, for the
record, also make a Statement that I will back up the reason
why I did. The President was involved, but it was not the
President that saved the auto industry; it was the American
auto worker that saved the auto industry, and is doing that to
this day.
And I think it is also with the Internet. The President has
his right to make Statements. Many people have a right to make
Statements. Congress has a right to make Statements. The
question is whose Internet is it. I contend it is the American
people's. It is wide open, it is broad, and it has worked
pretty well. This is not opening up, in my opinion, the
Internet; it is closing it down.
Mr. Wheeler, on November 7th, going back to some earlier
questions, the day after Zients visited you, The Wall Street
Journal reported that the FCC was likely to delay net
neutrality rules until the next year. Was there ever a point in
time when the open Internet issue was intended to be on the
agenda for December 11th public meeting of the Commission?
Mr. Wheeler. Yes, sir. I was trying to push for that, but
it was not possible.
Mr. Walberg. What happened to push it off the agenda?
Mr. Wheeler. It was just a bridge too far.
Mr. Walberg. Bridge too far? In whose mind?
Mr. Wheeler. You can whip the horse, but you can't make it
go faster sometimes.
Mr. Walberg. But in whose mind was it a bridge too far?
Mr. Wheeler. The staff, those of us who were trying to put
it together. We just couldn't get the work done.
Mr. Walberg. In your Statement announcing the new rules,
you called the new rules historic and also ``a shining example
of American democracy at work.'' If that is so, why did you not
let Americans see the rule before voting on it?
Mr. Wheeler. Oh, golly, sir, we followed the process that
has been in place at the Commission for both Republican and
Democratic chairmen for recent memory.
Mr. Walberg. But the people never saw the rule.
Mr. Wheeler. We were very specific in putting out a fact
sheet and saying this is what we are looking at. Then we went
into an editing process, which is not unlike a judicial kind of
situation back and forth.
Mr. Walberg. But you went through that. You went through
that in your opening Statement, all of the process, giving them
drafts, and that is great, a little idea of where you are
going; and that developed over time. But ultimately the
language of the rule was not submitted to the American eyesight
to view and ultimately comment on it, and why was that?
Mr. Wheeler. That is the typical process at the agency, as
it has been forever, is that a draft rule is put out by the
chairman's office and then the commissioners go into editorial
negotiation, if you will.
Mr. Walberg. Sure.
Mr. Wheeler. Over what the final rule would say, and that
is normally a 3-week process. That does not involve putting out
the rule.
Mr. Walberg. But in light of the monumental process this
was, this is the most monumental change to the rules of the
Internet in the history of the Internet, wouldn't you say?
Mr. Wheeler. It is a letting down, setting down.
Mr. Walberg. It is huge.
Mr. Wheeler. Yes.
Mr. Walberg. It is huge. And in light of that, and the
emotion that I feel back in my district, and I am sure everyone
on this dais feels it in their district, people commented on
it; you had 140 Members of Congress, you had over 4 million
comments from people and entities concerned with this issue. I
just don't understand why, at the very last, when you are going
to have the rule as written, that it wasn't released to the
public for comment. If you did it over again, would you have
done it differently and let them see it?
Mr. Wheeler. No, sir.
Mr. Walberg. Why not?
Mr. Wheeler. First of all, it wasn't a final rule; there
were changes that were being made in the process. Second of
all, it is against the Commission's procedures to do that, and
always has been.
Mr. Walberg. I don't know that to be true. In fact, I would
regard that as not true. With Commissioner Pai, he called, ``a
monumental shift toward government control of the Internet.''
In light of this monumental shift, what harm would come from
letting the American public see the text of the draft rule
before the FCC----
Mr. Wheeler. We didn't hide the pea, sir. We put out
specifics; this is what it does. We then engaged, as we always
do, in private, in camera, editorial negotiations amongst the
commissioners. We never put out a draft before those edits.
Mr. Walberg. That is not true.
Mr. Wheeler. I am sorry?
Mr. Walberg. And the American public deserved the
opportunity at this level, at this time period, to have
comments and opportunity to push back. This was a shift, a
monumental shift that should have had that oversight.
Mr. Chairman, I yield.
Chairman Chaffetz. If the gentleman would yield.
Mr. Walberg. I yield.
Chairman Chaffetz. You have the discretion to make it
public, and you chose not to, correct?
Mr. Wheeler. I have the discretion. It is not the practice
of the Commission to do that.
Chairman Chaffetz. You have the discretion to make it
public, correct?
Mr. Wheeler. The answer is yes.
Chairman Chaffetz. OK.
Mr. Wheeler. Can I refine my answer?
Chairman Chaffetz. No, you can't. Hold on 1 second.
Chairman Martin, at the request of Members of Congress,
including Senator Obama, who insisted on the openness when he
was the Senator, and they did it. They came and testified to
Congress, they made the rule open and they went through a
second comment period; and you chose not to.
Mr. Wheeler. I am glad you raise that, sir, because I think
that that is more urban legend than fact. My understanding of
the Chairman Martin situation is as follows: one, that he wrote
an op-ed in The New York Times in which he released two
paragraphs of an order. He followed that with a press release
in which he released one and a half pages of a 41-page section
of 124-page item. That is a difference between releasing an
entire item.
Chairman Chaffetz. He made himself available to Congress;
they went through a second. And what is startling to me and
what is telling to me is that Senator Obama's position on this
is totally different than President Obama's position on this.
Time has expired. We are now going to recognize the
gentleman from Virginia, Mr. Connolly, for a very generous 5
minutes.
Mr. Connolly. Thank you, Mr. Chairman.
Chairman Wheeler, is it unusual for an independent agency
such as yours to communicate with the executive branch?
Mr. Wheeler. No, sir.
Mr. Connolly. Is it routine?
Mr. Wheeler. Yes, sir.
Mr. Connolly. Does it compromise independence, as you
understand the word?
Mr. Wheeler. No, sir.
Mr. Connolly. The Chairman began his questioning by reading
off a list of meetings that apparently we are supposed to see
as sinister, you or your colleagues meeting with various White
House officials. Would that be unique to your tenure as
chairman? Previous chairmen never did that, is that correct?
Mr. Wheeler. I haven't seen the logs, but I believe that
every chairman has these kinds of meetings.
Mr. Connolly. Is there something sinister, though, in the
timing of these meetings? Because I think the insinuation from
my friends on the other side is meant to suggest that there is
something really deliberately sinister here; you are meeting
with them either to tailor the rule or to get your instructions
or to have some kind of quiet subversive conversation that
obviously the public isn't aware of. Is that what occurred?
Mr. Wheeler. No, sir.
Mr. Connolly. Did the White House ever direct you in the
wording, framing, or content of the rule?
Mr. Wheeler. No, sir.
Mr. Connolly. Ever?
Mr. Wheeler. Even when they filed, it was not a direction;
it was a here is our opinion, which, as I say, is the same
opinion as 64 Members of Congress had been writing me to
express and millions of Americans had been writing to express.
Mr. Connolly. Right. And as we just saw with a letter to
the ayatollah in Iran, one doesn't always want to put too much
credence in letters from Members of Congress; it has to be put
on into context.
Mr. Wheeler. Can I pass on that one, sir?
Mr. Connolly. Yes, I know. I thought I would just sneak
that in in my 5 minutes.
OK, the chairman was just suggesting in his overtime that
you could have waived the rule and, by extension, should have
waived the rule to bring the public in at an earlier date in
the draft or the drafting of the rule. Your answer to that was
a little bit derivical: yes, I had that power, but it is not
our practice. Going beyond that, though, following up on the
chairman's question, why, in looking at that ability to waive,
did you not avail yourself of it?
Mr. Wheeler. There are many reasons why negotiations
amongst commissioners ought to be in camera. So, for instance,
you put out the draft. What do you do, then, 2 days later when
paragraph 345 gets changed? Do you put it out again and say,
oh, hey, look at this? How do you deal with the back and forth
between various offices? How do you deal with ongoing research?
Is it right to have this kind of an activity that can be
very much affecting of capital markets out there, people
misinterpreting what this is or that, markets crashing or
inflating, whatever the case may be? And it is for that reason,
those kinds of reasons that FOIA, in specific, says these kinds
of editorial negotiations are specifically not FOIA-able,
because they are works in progress. And that was why I made
that decision, sir, and that is why that precedent exists, I
believe.
Mr. Connolly. And do you regret that decision?
Mr. Wheeler. No, sir.
Mr. Connolly. From your point of view, by making that
decision, you protected the integrity of the process and the
content of the rule?
Mr. Wheeler. Yes, sir.
Mr. Connolly. OK. Did you feel, when President Obama issued
his Statement with respect to net neutrality--there were press
reports at the time that you and your colleagues were surprised
or taken a little bit off-guard. You may want to comment on
that, but did you view his issuance of such a Statement as
undue interference in your process, which was still underway?
Mr. Wheeler. No. As we have discussed, all presidents have
had input to the process, in multiple administrations and
multiple proceedings; it is not undue at all.
Mr. Connolly. Not any different than Congress weighing in
with letters or resolutions or hearings such as this?
Mr. Wheeler. Correct, sir.
Mr. Connolly. Thank you. I have no further questions.
Thank you, Mr. Chairman.
Chairman Chaffetz. If the gentleman would yield, I would
like to actually--I don't know if we can put up this slide. I
am going to need a copy of that back.
But your communications person, in November, a couple days
afterwards, in response to your question about were they
surprised, did it have an impact, Sharon Gilson. Who is Sharon
Gilson?
Mr. Wheeler. She runs our media operation.
Chairman Chaffetz. She wrote, ``This question rankles me.
Do you take this as twisting the knife? I don't want to
overreact, but I am ready to log a call.'' So to suggest that
there was no rankling internally there at the FCC I think
would, certainly they are emailing back and forth. And, again,
this gets redacted. I don't see this as part of the public
process here that warrants any sort of redaction, but just
thought I would bring that up.
I appreciate the gentleman.
Mr. Cummings. Would the gentleman yield?
Mr. Connolly. Since it is my time, I just want to remind
the chairman that is an interesting point, but we had a
virtually identical situation with J. Russell George, where his
media person issued a Statement contradicting his sworn
testimony, and he disavowed her Statement saying she was
misinformed. So if you are going to cite a media person as
corroborating your point, I am happy to do so.
Now I yield to my friend, Mr. Cummings.
Mr. Cummings. Mr. Wheeler, do you have a comment with
regard to what the chairman just said?
Mr. Wheeler. Actually, this is the first I have seen this.
This QA rankles me, I am not even sure what it is referencing.
Mr. Cummings. And who is the person writing that and what
level are they on?
Mr. Wheeler. Shannon Gilson, and she is the head of the
media office.
Mr. Cummings. All right. Thank you very much.
Chairman Chaffetz. Now recognize the gentleman from Texas,
Mr. Farenthold, for 5 minutes.
Mr. Farenthold. Thank you, Mr. Chairman.
I tell you, I am sitting here shaking my head at how some
of this stuff has happened. I remember back in the 1980's and
1990's the Internet grassroots, Internet activists were
fighting to keep Internet service, remaining classified as an
information service and not as a telecommunication service, and
the marketing job to completely flip that is just staggering to
me.
But I also want to address something my friend from across
the aisle just brought up, and that is--wait, I completely lost
my train of thought. I will get back to it.
Mr. Connolly. I think you were agreeing that I had a
brilliant point that needed to be reinforced because it is St.
Patrick's Day.
Mr. Farenthold. On the public comment section, I remember
where I was going now, what happens is we are seeking public
comments on things that we don't know what we are seeking
comments on. Open government is about the people knowing the
thought process that goes into creating rules and regulations.
It is why we have C-SPAN, it is why anybody can turn on and see
the debates going on in Congress and reach out to his or her
Congressman or woman and give comment.
I am really troubled by--and I think this isn't just the
FCC; this is the executive branch agencies creating laws by
regulation behind closed doors. You are defending doing it
behind closed doors and not letting the public, and I just have
to say I personally have a problem with that. The more light of
day we have on that, the better off we are.
Let me go back to my public comments question in
particular. I have a hierarchy kind of comments that come into
my office. You know, something that is originally written by a
constituent, thoughtful piece is the most important, then
something from a non-constituent, then a form letter, and then
one of these things that you clip. So is there a breakdown you
would be willing to share with us of the public comments, how
they fall within some sort of similar hierarchy? You are
nodding your head like you all think the same way.
Mr. Wheeler. I know exactly what you mean, Congressman, and
I get all kinds of notes that range from----
Mr. Farenthold. I am running out of time. Can you provide--
--
Mr. Wheeler [continuing]. To the handwritten. I will try. I
don't know if we can break out 4 million comments that way, but
I will try.
Mr. Farenthold. I mean, if it is done, it is done. Whatever
information you could get on me.
All right, so you have moved and what you all have done,
and I think we will cover more of this in a Judiciary Committee
hearing, but I have two questions that are really kind of
burning on me. One is, as you move Internet service from an
information service to a telecommunications service under Title
II, are we opening the door to applying universal service fund
taxes to Internet services, to your broadband service? Does
this open the door to that?
Mr. Wheeler. We specifically said that we would not do that
in this proceeding. As you know, there is an ongoing joint
Federal-State board addressing that question. Even if it were
to happen, in a hypothetical, that doesn't mean that the total
number gets changed.
Mr. Farenthold. And do you feel like these regulations of
subjecting the retail Internet service providers to more
government regulation is going to encourage or discourage more
competition in the field?
Mr. Wheeler. One of the reasons why we were really focused
on making sure that there was no impact on investment capital
is because we want to incentivize investment.
Mr. Farenthold. It seems like you are having to go through
a tangle of government regulations and be a heavily regulated
industry, as opposed to just hanging out your shingle and
stringing some wires or putting up a radio transmitter to do
fixed broadband.
Mr. Wheeler. So there are four regulatory issues in this
rule: no blocking, no throttling, no paid prioritization, and
that you must be transparent with consumers. Those four seem to
be pretty well adopted; they are in the Republican bill that
has been proposed.
Mr. Farenthold. I guess my issue is my mom, before she
passed away, only used Internet, but I was her tech support, so
I wanted her to have an always on broadband connection, so any
time her modem didn't connect, I didn't get a phone call. But
it seems like under this scenario there would be no ability to
buy just like an email only type broadband service.
Mr. Wheeler. That is absolutely incorrect. There is nothing
that we do with retail rate regulation or the way in which----
Mr. Farenthold. But her service provider, I couldn't go out
and buy something so I get my email always on and fast, but I
am never going to stream a Netflix video. Why shouldn't I have
that alternative to buy that?
Mr. Wheeler. There is nothing that prohibits a service
provider from having that option. You can have email only; you
can say I want 5 megabits, I want 10 megabits, I want 25
megabits, and you can charge all at different prices.
Mr. Farenthold. But it is speed only.
Mr. Wheeler. There is nothing in this order that regulates
consumer rates, and that was by design. To go to your core
question of investment, consumer revenues, the day after this
order goes into effect, should be exactly the same as consumer
revenues the day before because we do nothing to regulate
consumer revenues.
Mr. Farenthold. I disagree that you are going to see
limited in product offering. I don't like the fact that AT&T
throttled my unlimited access after X number of gigabytes. I
could buy more gigabytes for more money and do that, so I want
that choice.
Chairman Chaffetz. I thank the gentleman.
Now recognize the ranking member, Mr. Cummings, for 5
minutes.
Mr. Cummings. Thank you very much.
Chairman Wheeler, I want to thank you for your testimony.
You, over the years, have earned a reputation for high
integrity and excellence, and when I asked you a little earlier
about having taken an oath and whether you believe you adhered
to that oath, your answer was yes, and I am just here to tell
you I believe you.
Mr. Wheeler. Thank you, sir.
Mr. Cummings. I want to ask you about the actions of the
Republican Commission members. We have heard outrage about the
President this morning. Let's go to Commissioner O'Reilly, Mike
O'Reilly. He is a former Republican Senate staffer who has been
an active opponent of the Open Internet rule. Is that a fair
Statement? Do you know that to be the case?
Mr. Wheeler. Yes, sir.
Mr. Cummings. OK. Chairman Wheeler, when the committee
requested documents from you, we also requested documents from
the other commissioners, including Commissioner O'Reilly, and
we received them. For example, we have now obtained an email
exchange between Republican Commissioner Mr. O'Reilly and three
individuals outside the FCC. They are Robert McDowell, a
partner in the communications practice of a large lobbying firm
that represents a variety of telecommunications clients; Harold
Furchtgott-Roth, an economic consultant in the communications
sector; and Baron Soca, the President of Tech Freedom, a
libertarian think tank focused on tech policy issues.
In this exchange, Commissioner O'Reilly sought edits,
sought edits on a draft op-ed he was working on opposing the
Open Internet rule.
Chairman Wheeler, were you aware, at the time, that
Commissioner O'Reilly was having these private communications
with these individuals? Were you aware of that?
Mr. Wheeler. No, sir.
Mr. Cummings. All three of these individuals have
professional interests that could be affected by the passage of
this rule, is that right?
Mr. Wheeler. Yes, sir.
Mr. Cummings. In response to Commissioner O'Reilly's
request, several of the individuals provided substantive edits.
In fact, one response had so many edits that he apologized,
writing, ``I know it looks like a lot of red ink, but I really
just tried to finesse, clarify, etc.''
According to this email chain, Commissioner O'Reilly then
forwarded these edits onto his staff, writing, this is what he
sent his staff: ``OK, took a bunch and left out some stuff.''
Chairman Wheeler, Commissioner O'Reilly's op-ed was
published in The Hill on May 5th, 2014. That was just 10 days
before the Notice of Proposed Rulemaking was published, isn't
that right?
Mr. Wheeler. Yes, sir.
Mr. Cummings. So these edits provided by outside parties
seem clearly designed to affect the ultimately decision of the
FCC. Are you aware of any ex parte filing regarding this email
exchange or these communications?
Mr. Wheeler. Golly, Congressman, no.
Mr. Cummings. Are you aware?
Mr. Wheeler. No, sir, I am not aware.
Mr. Cummings. Would it be normal for you to be aware?
Mr. Wheeler. No.
Mr. Cummings. Now, my staff went through all the ex parte
filings regarding this rule, all 750 of them, and they could
not find one, not one filed by any of these three individuals
for these communications. Do you know why that might be?
Mr. Wheeler. No, sir.
Mr. Cummings. And you just sat here and testified about how
you need to go by the rules and you need to file the ex parte
under certain circumstances. Would you tell us how you feel
about that, what you just learned, assuming it to be accurate,
what I just told you? Is that consistent with the way it is
supposed to be, the way you are supposed to operate?
Mr. Wheeler. I think that it is fair to say, Congressman,
that there is often a free and fluid back and forth between
practitioners in the bar and members of the Commission.
Mr. Cummings. But do you think an ex parte should have been
filed?
Mr. Wheeler. I don't know in this specific one. I don't
want to sit here and hip-shoot on that; I would leave that to
the ex parte experts.
Mr. Cummings. I understand. Well, let me be clear. I am not
suggesting that anyone engaged in inappropriate activity here,
but if the Republicans want to accuse the President of undue
influence in this process, even when he submitted, he did it
the right way, an ex parte filing, they can't just conveniently
ignore similar actions on the Republican side. There is
something wrong with that picture: fairness, balance; and I am
concerned about that.
With that, I yield back.
Chairman Chaffetz. Now recognize the gentleman from
Florida, Mr. DeSantis, for 5 minutes.
Mr. DeSantis. Thank you, Mr. Chairman.
Chairman Wheeler, I want to go back to this Wall Street
Journal report, October 30th, 2014, which reported that you and
the Commission were prepared to move forward on a hybrid 706
type approach; and I think that was consistent with a lot of
the public reporting at the time. So is it your testimony that
that was not in fact the case, that you were not at that time
leaning toward a 706 hybrid type approach?
Mr. Wheeler. No, we had gone through an evolutionary
process, and at that point in time we were focusing on a hybrid
approach. That is a correct Statement.
Mr. DeSantis. OK. Very good. So obviously something changed
between October 30th and when you eventually submitted this
rule. I think it has been pointed out how the President was
very forceful in making his ideas known. Did you know that when
the Commission adopted the rule, 400 pages, February 26th,
2015, the Democratic National Committee tweeted,
congratulations for adopting President Obama's plan?
Mr. Wheeler. I found it out afterwards.
Mr. DeSantis. OK. So you know this is being reported as
something that is actually the President's plan, adopted by the
Commission, and it is less that this is something that the
Commission came up with on its own.
Now, you had talked about the release of the report. The
report could have been released in early February. The vote
happened several weeks after that. Why not just release the
proposed rule to the public, given that this is something that,
one, has a lot of interest, but, two, all the comment, all the
period and input was done really before you had the movement to
a Title II framework? So why not just let the people see it?
Mr. Wheeler. So I think there are a couple of things here.
First of all, let me be clear that your comment about a hybrid
being on the table is correct, as were the other approaches
that, as I said to Mr. Jordan, the day following that Journal
article, The New York Times reported that there were four on
the table.
Mr. DeSantis. No, I understand that, but just with the
transparency, can you address the transparency?
Mr. Wheeler. Mr. Connolly and I engaged in this. I did not
release the draft order because it was the draft, underlined,
order. I did take pains to have fact sheets and other outreach
so the people understood what was in it.
Mr. DeSantis. So you are saying----
Mr. Wheeler. But the exact words----
Mr. DeSantis. Let me clarify this, though. You are saying
it is a draft order until the Commission approved it, and that
is why you didn't release it?
Mr. Wheeler. Yes, sir, that is the way things work, yes.
Mr. DeSantis. Well, actually, you could have released it,
and that has been made clear; and I think that, particularly in
this town, this idea that we are just passing things to find
out what is in things, without the public having access to
that, I don't think that that works.
Let me ask you this. Can you guarantee to the American
taxpayer, people who use broadband service, that if this goes
into effect, that they will not see taxes show up as
contributions to the Universal Service Fund?
Mr. Wheeler. We have carefully drafted this with two
specific things in mind.
Mr. DeSantis. You can explain, but can you guarantee them
they will not pay more?
Mr. Wheeler. We have said that this does not trigger
universal service, as I said to a previous question.
Mr. DeSantis. But that has been disputed. I know that one
of your members dissented and said that he believes Title II
imposes a statutory obligation----
Mr. Wheeler. We are talking past each other. Let me just be
clear, because this is a specific point, that the provision we
have forborne from the provision that would authorize us today,
in this rulemaking, to do that, to have universal service.
There is a joint Federal-State board addressing that very
question today. How they resolve things in the future, I do not
know, but this rulemaking was very clear to say that we do not
trigger that which you are concerned.
Mr. DeSantis. But it does not foreclose it, and the fact
that we are in Title II framework, that opens the door for this
to happen, depending on what was decided with that commission.
Look, I want open, robust Internet. When I see 400 pages of
red tape, this, to me, does not seem what openness is going to
be. And the experience when the government gets involved in
these things, the 400 pages, it is never going to be less than
400; it is going to be more. It is going to metastasize and
government is going to be able to get involved in other aspects
of this. I wish the public would have had more input. I know
that this is going to be contested, obviously, in the courts
and here in the Congress.
I am out of time and I yield back.
Mr. Wheeler. Can I clarify one thing, sir? There is
actually eight pages of rules in there. The rest is
establishing the predicates and the background for, for
instance, the court challenge.
Chairman Chaffetz. I thank the gentleman from Florida.
We now recognize the gentleman from California, Mr. Lieu,
for 5 minutes.
Mr. Lieu. Thank you, Mr. Chairman.
Thank you, Mr. Wheeler, for your public service. I know you
will be testifying in many committees on Capitol Hill. I have
heard a lot of back and forth today, and I just want to get on
the record the answer to the following question, which is
essentially was the process followed by FCC in this case
essentially the same process that the FCC has followed in other
prior rulemakings?
Mr. Wheeler. Yes, sir.
Mr. Lieu. In fact, in this case there was a lot of public
comment, and there is nothing wrong with a commissioner being
influenced by public comment, correct?
Mr. Wheeler. Absolutely.
Mr. Lieu. There is nothing wrong with a commissioner, if a
Member of Congress wrote a particularly compelling letter, to
be influenced by such a letter, correct?
Mr. Wheeler. I hope that we learn from the whole process,
from the record being built.
Mr. Lieu. And there is nothing wrong with any commissioner
being influenced by a president of the United States, provided
that that contact is reported in an ex parte filing, correct?
Mr. Wheeler. We should make our decision independently on
the record that has been established by those who have
commented.
Mr. Lieu. And in this case the Administration did file an
ex parte record.
Mr. Wheeler. Correct.
Mr. Lieu. And members of the public can go on your website
and look at everyone who has filed ex parte, correct?
Mr. Wheeler. Yes.
Mr. Lieu. And the President of the United States cannot
fire you as a commissioner, correct?
Mr. Wheeler. Correct.
Mr. Lieu. Wouldn't we want different folks to weigh in on
issues of this magnitude, including not just the President, but
Members of Congress and public? Wouldn't we want everybody to
be able to weigh in and you all make your decision? Isn't that
the way democracy works?
Mr. Wheeler. I think it is the way democracy works and it
is the way the Administrative Procedure Act was structured, to
make sure that there was an open opportunity for notice and
comment, and then make a decision based on what that record
was.
Mr. Lieu. Thank you.
I yield back the balance of my time.
Chairman Chaffetz. I thank the gentleman. If the gentleman
would yield for a second.
Similar to what you are saying, I do think there is room
for everybody to weigh in, whether it be the President, a
Member of Congress. But it is about openness and transparency;
it is about filing those things, and I think that is what the
gentleman is saying. I would hope that we could find other
people on both sides of the aisle.
I really do believe, certainly at the FCC and other
agencies, that maybe we should require by law that there be a
30-day notice. Take the final rule, give it the light of day
and let it be out there for 30 days. What harm would there be
in doing that?
And I would appreciate if the gentleman would consider
that. He is a very thoughtful member and I appreciate the time.
Mr. Cummings. Would the gentleman yield further?
You have heard all of this, Mr. Chairman, and I am just
curious. When you hear the complaints back and forth, and here
you are sitting here, what I consider to be a hot seat, are
there things that you would like to see us do either as the
Congress to bring more clarity or do you feel like the process
is fine just the way it is? I mean, because we want to be
effective and efficient. We can't just keep going on these
merry-go-rounds over and over again. There will be
controversial decisions in the future.
And going to Mr. Lieu's comments, if there is guidance that
we can provide that will get rid of any kind of ambiguity with
regard to people wondering whether folks have crossed this line
or that line, I mean, I am sure you have thought about this a
lot, and I know you want to act in the best interest of the
United States and our citizens and certainly your agency. Is
there anything that you can think of?
Mr. Wheeler. I appreciate that question, Mr. Cummings. My
goal has been to make sure that I follow the rules. I don't
make the rules or the regulations that interpret the statute; I
try to follow them. You know, the Administrative Conference of
the United States is kind of the expert agency when it comes to
processes, and they and you, I think, have a significant
challenge in that the rules have to apply across all agencies,
not just the FCC, so far be it from me to get specific and say
you ought to change Section 2(b)(iii). But I see my job as
trying to adhere to the statute and the rules that have been
put in place to deliver on those concepts.
Chairman Chaffetz. I thank the gentleman. And as I
recognize Mr. Walker here, I want to respond to what you just
said and highlight, again, under the rules you did have the
discretion to make it public, and you elected not to. I think
what Congress should consider is compelling you to make that
open and transparent, rather than just simply making it
discretionary.
Now recognize the gentleman from North Carolina, Mr.
Walker, for 5 minutes.
Mr. Walker. Thank you, Mr. Chairman.
Being a relatively new member in Congress, I am learning
things every day. In fact, I had already known that Al Gore had
invented the Internet, but today I found out, according to Mrs.
Maloney, that the President has saved the Internet.
Just curious. Do you think is a Statement that is fair? Do
you think his involvement has saved the Internet for the
future?
Mr. Wheeler. Oh, I think that this is a much bigger issue,
Congressman. I think that the Internet is the most powerful and
pervasive platform that has ever existed in the history of the
planet, and that it has an impact on every aspect of our
economy and every aspect of how we act as individuals; and for
that to exist without rules and without a referee is
unthinkable.
Mr. Walker. Well, let me get back to what you said earlier.
You testified, in fact, today that you did not feel obligated
to follow the President's suggest. So my question is what
exactly was the President's suggestion.
Mr. Wheeler. The President filed an ex parte saying that we
should have Title II, and we did not follow that suggestion; we
did Title II plus 706. He did not say that we should do
interconnection; we did interconnection. He did not suggest
that we should have the scope of forbearance that we had.
Mr. Walker. Sure. I am actually getting to the place as far
as your action with him, when you say he suggested. There were,
what, 9 or 10 trips to the White House? Do you remember which
time it was suggested as far as where there was disagreement,
where there was agreement?
Mr. Wheeler. I am sorry, sir. My comment about suggestion
was specifically referencing the ex parte that he filed.
Mr. Walker. OK. So you are saying there was no one-on-one
suggestion with you and the President whatsoever when it came
to net neutrality discussion?
Mr. Wheeler. That is correct.
Mr. Walker. OK. Let's go back to the pictures, obviously,
of the protesters that were there that morning. Did you have
any word or any idea that those protesters would be showing up
that morning, or were you as surprised as the look that you had
on your face?
Mr. Wheeler. I was surprised. And if I had spent less time
brushing my teeth, they would have missed me, because they just
barely caught me.
Mr. Walker. So you had no idea that those guys, you weren't
tipped off they were showing up that morning?
Mr. Wheeler. No.
Mr. Walker. OK. Your posture has been called, by some of
the outlets, apologetic since this decision was made. Why do
you think that assumption is being made?
Mr. Wheeler. Apologetic?
Mr. Walker. Yes. Since the decision has been made, there
have been some outlets that have said maybe not backing up on
the decision, but it seems like it was not as firm as it was
when the decision was made. Why do you think that would be
characterized like that?
Mr. Wheeler. Oh, my goodness, Congressman. I hope that this
is not apologetic. I said, in the press conference after this,
this was my proudest day being involved in public policy for
the last 40 years as I have. There is no way that I am
apologetic. I am fiercely proud of this decision and believe
that it is the right decision and believe that it is an
important decision not only for today, but for tomorrow.
Mr. Walker. You talked about, a little earlier, and I think
Congressman DeSantis mentioned this a little bit earlier, you
talked about The Wall Street article was wrong. You may have
addressed this just a minute ago. Can you tell me specifically,
I believe that what was your comment, that The Wall Street
Journal had it wrong? Specifically, what did they have wrong?
Mr. Wheeler. Well, what I was referencing was The New York
Times article the following day where, as I understood in The
Wall Street Journal article, and I obviously don't have it, but
as has been represented here that it said there was one
solution on the table; and The New York Times the following day
said there were four solutions on the table.
Mr. Walker. So which one is accurate?
Mr. Wheeler. The Times is correct.
Mr. Walker. The Times is correct.
Mr. Wheeler. Let me be really specific. And I have
constantly said throughout this entire process that Title II
has always been on the table. And I said in my testimony that
we were looking at 706, Title II and 706 in a hybrid, Title II
and 706 in not a hybrid, and Title II by itself.
Mr. Walker. The appearance of being an independent agency,
which you have claimed probably 12 to 15 times today, can you
understand why people would have some questions when there are
meeting after meeting with the White House? Is there anything
that the American people or Congress can see there is a
balance, where there is also input from the other side, as
opposed to just one particular partisan perspective?
Mr. Wheeler. So you know, Congressman, during that period,
I believe that I met more than three times as often with
Members of Congress. You know, my job is to take input. My job
is to provide expertise on issues that are being considered.
And that kind of an ongoing relationship with all aspects of
government is an important role, I believe.
Mr. Walker. Thank you, Mr. Wheeler. My time has expired.
I will yield back to the Chairman.
Chairman Chaffetz. I thank the gentleman.
We will now recognize Mrs. Watson Coleman from New Jersey.
Mrs. Watson Coleman. Thank you very much, Mr. Chairman.
Mr. Wheeler, thank you very much for your testimony. Thank
you for your forbearance and thank you for the fact that it
seems that you responded to the enormous interest and concern
with net neutrality. I am a newbie also, but I became aware of
net neutrality on social media. So thank you so much for that.
I wanted to just clarify a couple things. First of all,
with respect to the comment about perhaps we ought to have a
60-day comment period after the final rule, that would then
make that final rule possibly not a final rule, and I don't
know how we would then determine it to ever became a final
rule.
It has been Stated that you have met with the White House
on several occasions during what is supposedly a controversial
period of time. Was the issue of net neutrality the only thing
you were doing during the period of time when you were
considering net neutrality? Were there a variety of other
issues you may have been meeting with members of the White
House or at the White House? And, if so, just for the record,
might you just want to share some of those?
Mr. Wheeler. Thank you, Congresswoman. Yes. So I met on
national security issues; we met on trade related issues;
cybersecurity; the E-Rate, what was happening there; spectrum
policy. The White House was obviously very, very much involved
in implementing the instructions of the Congress to re-purpose
spectrum, and we had to work very closely with all the agencies
and the White House on that. And the spectrum auctions,
obviously, as well.
Mrs. Watson Coleman. Thank you, Mr. Wheeler. That gives us
an illustration of the variety of issues that you had been
addressing. We would love to have the opportunity to work on
one thing at a time. We know you don't, we know the President
doesn't, and you know we can't.
So, I mean, to suggest that that is the only thing that you
were doing is certainly misleading and is, I believe, a
mischaracterization of your continued Statements that you were
not meeting on these issues, and I have no reason not to
believe you. And given that this is such a huge issue, that
everyone wants access and net neutrality, it just seems to me
that you were quite willing to listen to more than 4 million
people, what they had to say, to all of the motions that were
filed for consideration, including the President of the United
States. I listen to him; I think he is really quite brilliant
and has great ideas for this Country.
So I just wanted to thank you for the opportunity to hear
your testimony and to be able to give you an opportunity to
answer questions as to the kinds of things that are on your
plate that you might have been discussing with the White House.
Mr. Wheeler. Thank you.
Mrs. Watson Coleman. Thank you very much.
Thank you, Mr. Chairman. I yield back my time.
Chairman Chaffetz. I thank the gentlewoman.
We will now recognize the gentleman from Georgia, Mr. Hice,
for 5 minutes.
Mr. Hice. Thank you, Mr. Chairman.
And thank you, Mr. Wheeler, for being here with us. It has
been pretty well established that there were not, and with many
excuses, but the FCC did not report various meetings with the
White House and White House officials, even though you did
report to various lobbyists and activists and companies and so
forth. That is well established here today, but this does not
seem at all as though transparency has taken place. When there
is a specific area that is deliberately not reported, the
appearance is that it is secretive, that there is something to
hide. And you are denying that today, is that true?
Mr. Wheeler. Yes, sir, there was no secret. I am not sure I
understood. Reporting to lobbyists? I am not sure what----
Mr. Hice. The ex parte type thing. I mean, we have 755
entries.
Mr. Wheeler. Oh, when they would file.
Mr. Hice. Yes.
Mr. Wheeler. I am sorry.
Mr. Hice. And there is no filing with the White House
except one. So, I mean, it gives every appearance of secrecy
rather than transparency. Would you agree with that?
Mr. Wheeler. And I think that it has to do with the fact
that the language of ex parte is when it is intended to affect
a decision and to provide information of substantial
significance.
Mr. Hice. And you don't believe this is substantial
significance?
Mr. Wheeler. There was when Jeff Zients came to see me and
said this is what the President is going to do. That was
substantial significance.
Mr. Hice. As a general rule, if someone is offering you an
opinion, you would not object to an opinion being offered to
you, I am assuming. Just a general rule. We all respect the
First Amendment. If someone has an opinion, you would feel free
to let them have an opinion.
Mr. Wheeler. Yes, sir.
Mr. Hice. On the other hand, if someone or some group,
whatever, was trying to give directives to you or the FCC or
whatever, you would probably be outspoken against that action.
I mean, if someone is giving an opinion, that is no problem;
but if someone wants to be intrusive and give orders, that may
be a different scenario and you would be outspoken toward it.
Mr. Wheeler. And I think, boy, did we get opinions on this.
Mr. Hice. OK. You mentioned a while ago that the White
House offered their opinion on this whole thing, and I would
like to put up a slide that we had a little bit earlier, emails
from the chief of staff to the Senate majority leader to you.
The top line up there that is in red, the comment is: spoke
again last night with the White House and told them to back off
Title II. That sounds like a whole lot more than an opinion.
Typically, you would not tell someone who is offering an
opinion to back off. Would you agree with that?
Mr. Wheeler. I don't understand the parsing of the words,
sir.
Mr. Hice. All right. You said you don't have any problem,
there is no problem, typically, with someone just giving an
opinion. But this is more than an opinion because the comment
here is tell the White House to back off. So there is more than
just an opinion coming from the White House, it would appear.
Mr. Wheeler. You know, the other part about that is that I
had, at the same point in time, 90 letters from Republican
Members of Congress saying that I should not do Title II.
Mr. Hice. I am not talking about Members of Congress. This
Statement right here is the White House.
Mr. Wheeler. But the point is that suggested Title II is
very much in the mix. This, if I can read right, is----
Mr. Hice. It says, spoke again last night with the White
House and told them to back off Title II. Went through once
again the problems it creates with us. This is more than an
opinion.
Mr. Wheeler. This is May, and as I indicated, in May I was
proposing that Section 706 was the solution, and I learned
through the process of this, long before the White House ever
had their filing, that Section 706 was not the answer.
Mr. Hice. But the White House was not providing an opinion,
they were putting some sort of directive to do something;
otherwise, there wouldn't have been comments to tell the White
House to back off. It was more than an opinion coming from the
White House.
Mr. Wheeler. You know, I think that you are reading into
this.
Mr. Hice. Why else would the comment be to back off if it
is just an opinion? If the White House was offering an opinion,
no one would be saying back off. There was more than an opinion
that was being presented.
Mr. Wheeler. With all due respect, that is your opinion.
Mr. Hice. Well, it is your email. It is your email, and the
words back off are pretty strong.
Mr. Wheeler. I don't think that it is conclusive that there
is more than clearly just what is Stated there.
Mr. Hice. It says back off because this is creating
problems for us. That is more than just my opinion; it is an
email.
Mr. Wheeler. That is his opinion.
Mr. Hice. I yield my time.
Mr. Wheeler. That is his opinion.
Chairman Chaffetz. Thank the gentleman.
We will now recognize the gentlewoman from the Virgin
Islands, Ms. Plaskett, for 5 minutes.
Ms. Plaskett. Thank you, Mr. Chairman.
And thank you, Mr. Wheeler, for being here this morning. I
think that it is so important to understand the significant
attention that this Open Internet order has generated, and that
that interest is primarily in the process as opposed to the
content of what the Open Internet is.
And having these hearings regarding this process and
whether or not you have used discretionary, your discretionary
ability, as opposed to a rule, is something that I think is
also very interesting. And I thought it would be important for
us to understand the steps the FCC takes in that rulemaking
process.
Now, the official FCC blog contains a post from the general
counsel, John Solet, entitled The Process of Governance: The
FCC and the Open Internet Order.
Mr. Chairman, I ask unanimous consent to enter that post
into this hearing record at this time.
Mr. Hice [presiding]. Without objection. Thank you.
Ms. Plaskett. Thank you.
Ms. Plaskett. The general counsel begins by explaining that
the FCC seeks to ``create an enforceable rule that reflects
public input, permits internal deliberation, and is built to
withstand judicial review.''
Chairman Wheeler, is it an accurate Statement that that is
the objectives in the FCC and its rulemaking?
Mr. Wheeler. Yes, ma'am.
Ms. Plaskett. And after the public comment period, the FCC
staff reviewed proposals in light of that public record, so we
know the public comment period was actually even longer than
normally is done; 60 days as opposed to the 30 days that you
were required, because of the volume and the interest of this.
When was that done, the review beginning in light of the public
record?
Mr. Wheeler. Well, the traditional way that we do it is
that the comment period closes and you have an opportunity to
review those comments, and then you have a period where you can
comment on the comments, and then you review those.
Ms. Plaskett. OK. And do you remember at what time that
that was closed to begin the review process?
Mr. Wheeler. I don't know those exact dates, ma'am; I can
get them for you.
Ms. Plaskett. OK. And then the proposed order is
distributed to the other FCC commissioners for internal review
and deliberation again, is that correct?
Mr. Wheeler. Yes, ma'am.
Ms. Plaskett. And what is that timeframe, do you recall how
long?
Mr. Wheeler. It is 3 weeks before the vote.
Ms. Plaskett. All right.
Mr. Wheeler. That is by our own internal record.
Ms. Plaskett. And that is a critical portion of it, right,
the commissioners' internal deliberations?
Mr. Wheeler. Yes, ma'am.
Ms. Plaskett. And then before the vote to adopt the Open
Internet order on February 6th, there were calls to disclose
that order, right?
Mr. Wheeler. That is correct.
Ms. Plaskett. And is it a general FCC policy to publicly
release an order before the Commission votes on it?
Mr. Wheeler. No, ma'am.
Ms. Plaskett. And what could possibly be that, the issue of
undue influence after that deliberation? What would be the
reasoning behind that, the rationale?
Mr. Wheeler. Well, the rationale is that, first of all,
there has been this extended period of comment and public
debate, and then you get to a point in time when the rubber
meets the road and you are drafting, and you are going back and
forth and editing a document that changes frequently as a
result; and that is something that is dynamic and not public.
One reason, you want to make sure you have the full
participation of all of the commissioners; second, as I
mentioned before, the opportunity to cause mischief in
financial markets by misinterpretations of changing glad to
happy is an issue. So these have always been in camera kinds of
editorial activities.
Ms. Plaskett. So then even after the vote, there are then
additional steps that are taken before the order is final and
ready for release, correct?
Mr. Wheeler. Yes, ma'am.
Ms. Plaskett. And you followed those.
Mr. Wheeler. Yes, ma'am.
Ms. Plaskett. And that includes commissioners' individual
Statements with their opinions, further discussion and
clarification of any significant arguments made from the
dissenting Statements, and then the final cleanup edits,
correct?
Mr. Wheeler. Yes, ma'am. And when those final cleanup edits
were made by the dissenters, that was about midday, and on the
following morning, at 9:30, we released the item.
Ms. Plaskett. And that final order was released on March
12th, correct?
Mr. Wheeler. Yes, ma'am.
Ms. Plaskett. So it appears to be that you did not depart
in any way from your rulemaking process in this respect, in
regard to the open Internet. It really has been a question to
many people's mind, and our good chairman and other
individuals, whether you used your discretionary outside of
what is the general rulemaking, right?
Mr. Wheeler. That is correct.
Ms. Plaskett. And if you had used your discretion, then we
would be in a hearing about something else as to whether that
discretion was appropriate or not appropriate based on the
President weighing in on something that had huge importance to
the people of the United States.
Mr. Wheeler. I can't comment on that hypothetical, but the
point of the matter is that we followed precedents and
procedures that has been followed for years and years by both
Republican and Democratic Commissions.
Ms. Plaskett. Thank you very much.
I yield the balance of my time and thank you.
Chairman Chaffetz. I thank the gentlewoman.
Now recognize the gentleman from Oklahoma, Mr. Russell, for
5 minutes.
Mr. Russell. Thank you, Mr. Chairman.
Thank you, Chairman Wheeler, for your long and dedicated
public service to our Country. I know it is often thankless.
And while opinions may differ, your dedication to it is
appreciated.
Mr. Wheeler. Sir, I recognize your badge. Thank you for
your service.
Mr. Russell. Well, thank you, sir.
You had Stated in earlier testimony today that you came to
an evolutionary decision because you determined it was
reasonable for ISPs, but not reasonable for consumers with this
ruling. Is it not true that with this ruling that Federal taxes
could now be applied to consumers, where they were once
prohibited?
Mr. Wheeler. I think that that is in the hands of Congress.
You all will get to decide that. Right now the Internet Tax
Freedom Act specifically prohibits that, and whether that is
changed is outside of my jurisdiction.
Mr. Russell. But from an informational service to a
communications service, by moving it to Title II, does it not
lay the foundation for consumers being taxed?
Mr. Wheeler. Again, that is going to end up being your
decision, not mine.
Mr. Russell. Was it possible when it was just an
information service outside of Title II?
Mr. Wheeler. Information services, some are taxed at State
levels, I believe. Some could be taxed at State levels. I want
to make sure it is could because we have the Internet Tax
Freedom Act sitting on top of everything. So it cuts both ways,
I guess.
Mr. Russell. OK, Article I, Section 8 of the Constitution
States that it is Congress that has the power to regulate
commerce. Do you believe this?
Mr. Wheeler. Yes, sir.
Mr. Russell. Do you believe that the public would have been
better served by giving Congress a chance to review the rules
prior to their release, especially in light of your testimony
today where you said that rules have to apply across all
agencies and be considered?
Mr. Wheeler. This has been, as you know, Congressman, a 10-
year process where there has been multiple input by multiple
congresses along the way. There is legislation now, which is
entirely appropriate. I think what our job is is to take the
instructions of Congress as stipulated in statute and interpret
them in terms of the realities of the day, and that is what we
did.
Mr. Russell. The quote that I would like to read to you by
a senior vice president of a communications company says, ``The
FCC today chose to change the way commercial Internet has
operated since its creation. Changing a platform that has been
so successful should be done, if at all, only after careful
policy analysis, full transparency, and the Congress, which is
constitutionally charged with determining policy.''
Now, you and your agency have established a clear belief
that adopting these Title II rules would create problems, as we
have seen in some of the email traffic that we have reviewed
today. You also have Stated in other emails produced to the
committee that you did not intend to be a wallflower in your
tenure at the Commission. But given the coordinated efforts in
the pressure of the White House, the coincidentally timed
protest, and other White House Statements, would it be
unreasonable, then, for Americans to somehow feel betrayed that
this decision was a cave against your earlier judgment and
damaged the reputation of the FCC as an independent agency?
Mr. Wheeler. No. And I also think that it is important to
go to your key assumption there, quoting this senior vice
president. The interesting thing in all of this is that there
are four bright line rules. There are only four lines in this
order: no blocking, no throttling, no paid prioritization, and
transparency; and all of the ISPs have been saying publicly,
buying newspaper ads, running TV commercials, you have been
subject to it, saying, oh, we would never think of not doing
that.
So when this person says it is going to change the basic
operation of the Internet, there is some kind of a discord
there, some kind of a disconnect, because they are saying, oh,
we are not going to do that, and then they say, oh, but when
they require that we don't do that, that is changing the
operation of the Internet; and I think that is kind of an
underlying tension that has been going through this whole
thing.
Mr. Russell. Well, I would hope, as we move forward in the
future, there is clearly going to be lawsuits in this process;
there is going to be continued discussion about it; that we
would make sure that Congress regulates commerce. I personally
believe that what we will see follow will be a taxation of
consumers. I think had they known that, they wouldn't have been
so quick to click the Internet like to get these 4 million
comments. And I think we have set back free information and
access to all Americans. Thank you.
I yield back the balance of my time.
Chairman Chaffetz. I thank the gentleman.
We will now recognize the gentlewoman from Michigan, Mrs.
Lawrence, for 5 minutes.
Mrs. Lawrence. Thank you, Mr. Chairman and ranking member.
Welcome, Chairman Wheeler.
Mr. Wheeler. Thank you.
Mrs. Lawrence. I appreciate you being here today. My
friend, my colleague Stated that there was a Statement that you
did not intend to be a wallflower. I find that refreshing.
Those who take an oath to serve the people and to be part of
our regulatory process should not be a wallflower; they should
be actively engaged. And I appreciate the passion you have
distributed today.
I want you to know when I came to Congress I too had heard
a lot about this net neutrality. I have done my homework and I
came to Congress with an open mind and willingness to see both
sides of this issue. I also am aware that over 4 million people
filed public comments with the FCC. Four million. Most of them
average people voting yes. And I also saw the President's
comments on this issue.
So one of the things I want to ask of you today, Mr.
Wheeler, is to really solidify you in this position. Chairman
Wheeler, you were supported by telecom companies when President
Obama selected you to this position, is that correct?
Mr. Wheeler. I believe so, yes, ma'am.
Mrs. Lawrence. And you were unanimously, meaning both sides
of the House, confirmed, by the Senate as well.
Mr. Wheeler. Yes, ma'am.
Mrs. Lawrence. So it was not just one side of the House, of
the Senate, it was both sides.
Mr. Wheeler. No, ma'am. Yes, ma'am.
Mrs. Lawrence. And then from 1976 to 1984, you worked for
the National Cable Television Association, which is clearly
representing these agencies that would be affected, and
eventually became the president and CEO, is that correct?
Mr. Wheeler. Yes, ma'am.
Mrs. Lawrence. And from 1992 to 2004, Chairman Wheeler, you
served as the president and the CEO of the Cellular
Telecommunications and Internet Association, is that correct?
Mr. Wheeler. Yes, ma'am.
Mrs. Lawrence. Clearly, you would not be a wallflower. So
you know this telecom industry very well, because if there ever
was such a thing as the Internet or ISP, you would know that,
correct?
Mr. Wheeler. I have spent my professional life in this
space, ma'am.
Mrs. Lawrence. So, knowing this, would you push for
regulations that you knowingly were aware that would damage the
industry that you represented for so many years?
Mr. Wheeler. [No audible response.]
Mrs. Lawrence. So the decision and the regulation that you
advocated for, your position was this wold not damage, but
enhance.
Mr. Wheeler. Thank you, Mrs. Lawrence, that is a really
good question. I think there are two answers to it. No. 1 is
that, yes, I was the chief advocate, chief lobbyist for those
two industries when they were growth industries, not the
behemoths that they are now, but a different time.
Mrs. Lawrence. Right.
Mr. Wheeler. And I hope I was a pretty good advocate. They
were my client. My client today is the American consumer.
Mrs. Lawrence. Yes.
Mr. Wheeler. And that is who I want to make sure that I am
representing.
Mrs. Lawrence. Yes.
Mr. Wheeler. Now, doing that, we do not help the American
consumer by cutting off the nose of those who provide
competitive broadband service to spite your face. So what we
were doing in this was balancing the consumer protection with
the investment necessary to provide competitive broadband
services. And I went back to my roots as the president of CTIA,
when the wireless industry sent me to Congress and said we need
to be regulated as a Title II common carrier with forbearance,
and Congress agreed with that, and that is the rules under
which the wireless voice industry since then has had $300
billion in investment and become the marvel of the world.
So the answer is yes on both fronts. You can't help
consumers if you are not stimulating broadband growth. But my
job today is representing American consumers.
Mrs. Lawrence. And just for the record, because the
questioning today is inferring that, would you support
regulations, and you eloquently Stated that there is a
balancing of this and information and your experience bring you
to this point, would you support regulations that would hurt
ISPs just because the White House thought it was a good idea?
Mr. Wheeler. Throughout this process I have been trying to
be very independent and very thoughtful.
Mrs. Lawrence. And, last, do you honestly believe that net
neutrality will stifle innovation, hurt access, or hinder the
growth and development of the telecom industry, given your 40
years of experience?
Mr. Wheeler. No, ma'am. And it is not just my opinion that
counts, however. But when major Internet service providers like
Sprint, like T-Mobile, like Frontier Communications, like
Google Fiber, like hundreds of rural providers say that they
too believe they will be investing and continuing to growth
competitive broadband, I believe that is reinforcement of this
point.
Mrs. Lawrence. Thank you for your service, and I yield back
my time.
Chairman Chaffetz. Thank you.
We will now recognize the gentleman from Alabama, Mr.
Palmer, for 5 minutes.
Mr. Palmer. Thank you, Mr. Chairman.
Thank you, Mr. Wheeler, for testifying.
Mr. Wheeler. Mr. Palmer.
Mr. Palmer. You claimed in your opening Statement that this
was the most open and transparent rulemaking in FCC history, is
that correct?
Mr. Wheeler. Yes, sir.
Mr. Palmer. You have claimed in your testimony that all of
your communications with the White House were properly
accounted for with ex parte filings, is that correct?
Mr. Wheeler. Yes, sir.
Mr. Palmer. Would you put up the slide, please?
While they are working on that slide, I have here a copy of
your ex parte filing for the President's Statement on net
neutrality. Mr. Wheeler, it is two paragraphs long, three
sentences total. Are we left to believe that the entirety of
the White House's involvement in this process can be captured
in just three sentences?
Mr. Wheeler. I am now being passed--this is the letter,
November 10, Dear Ms. Dorsch?
Mr. Palmer. Yes, that is correct.
Mr. Wheeler. I believe that it has, then, a two-page
attachment with it that gets quite specific and says what
bright line rules should be and things such as that, that
wireless should be covered and things like that.
Mr. Palmer. Do we have that?
Chairman Chaffetz. They are working on getting it, but I
believe the portion that deals with this topic is, as the
gentleman says, three sentences.
Mr. Palmer. Three sentences, yes.
Mr. Wheeler. I disagree, respectfully, sir. They put in
here the entire Statement of the President in which he was
saying this is what I think we ought to stand for.
Chairman Chaffetz. If the gentleman would yield.
Are you telling us that Jeffrey Zients came over to meet
with you and just read the President's Statement?
I will yield back to Mr. Palmer.
Mr. Wheeler. I don't think that was the question. Maybe I
am confused here, Mr. Palmer.
Mr. Palmer. Well, let me be a little more specific. Your
calendar shows on February 2014 you had two phone calls the
same afternoon with a counselor to the President, John Podesta,
and with the White House Office of Science & Technology Policy,
is that correct?
Mr. Wheeler. If the calendar says that, I don't recall
talking to Mr. Podesta, but if the calendar says that.
Mr. Palmer. You don't recall talking with Mr. Podesta? Do
you have any recollection of a phone call with Mr. Podesta on
that day?
Mr. Wheeler. If the calendar says, sir, I will stipulate to
it.
Mr. Palmer. Do you recall talking to the White House Office
of Science & Technology Policy?
Mr. Wheeler. I have talked to them, yes, multiple times.
Mr. Palmer. Can you give us an idea of what was discussed
in either of those calls?
Mr. Wheeler. I don't recall the specific--what was the date
that you were specifying?
Mr. Palmer. February of last year, 2014.
Mr. Wheeler. I don't know what the specifics of that call
were, I don't recall it.
Mr. Palmer. Do you have a recollection of having those
calls?
Mr. Wheeler. If my calendar says, then I must have. I don't
have a recollection of it. And the other thing is there is a
whole bunch of things that are going on that are relevant, but
I don't know what we were talking about.
Mr. Palmer. Well, it shows up on your calendar, and if you
are having a difficult time remembering the calls and certainly
the content of those calls, should either of those calls have
been recorded as ex parte contacts?
Mr. Wheeler. I think there are two answers to the question.
One, I don't recall the content; second, as we have discussed
previously, there are specific guidelines rules as far as what
ex parte is; and, third, that there is, and has been since the
first Bush Administration, a ruling that contacts with the
Administration and with the Congress are not ex parte.
Mr. Palmer. Last question here. What other contacts do you
recall that you have had with the White House staff prior to
the April 2014 emails that have been publicly released?
Mr. Wheeler. You have my calendar and you have my emails.
Mr. Palmer. Mr. Chairman, I yield the balance of my time.
Chairman Chaffetz. Now recognize the gentleman from
California, Mr. DeSaulnier, for 5 minutes.
Mr. DeSaulnier. Thank you, Mr. Chairman.
Mr. Chairman, I just want to thank you for your service. I
am tremendously proud of not just your decision, but also your
testimony today, and how you have handled yourself,
particularly considering, as one of my colleagues pointed out,
your background.
Mr. Wheeler. Thank you.
Mr. DeSaulnier. And coming from the San Francisco Bay Area,
obviously the importance to innovation for us and having many
constituents and friends who work at companies like Facebook
and Google and Apple, we want to make sure we get it right; and
also having a presence in my district of AT&T and Comcast, I
understand the balance you had to go through.
I also understand the importance of the balance of your
independence and expertise of independent commissions and their
relationship with the Administration and Congress, and I
actually think there is obviously a very strong argument to be
made that someone like yourself and your staff are more
appropriately situated to avoid some of the politics and make
these decisions.
Having said that, I was particularly taken by your comments
to one of the questions about whether you were, by appearance,
looking like you were sort of second-guessing your decision and
your vote, and your response to that, I thought, was very
forthright and very determined and clear. So that was to the
decision. Knowing that the process is probably as important and
the perspective of the process is as important as the actual
decisionmaking, how would you respond to the question of are
you equivocating about your concerns about the questions you
are being asked and the process?
Mr. Wheeler. So I believe that we handled this,
Congressman, just as any other issue that comes before us,
whether it is exciting and headline grabbing like this or much
more mundane things we normally deal with; that we used the
established procedures and precedents very religiously.
Mr. DeSaulnier. So would you say that your comments about
your pride in the actual decisionmaking you feel equally as
proud as the process?
Mr. Wheeler. I think the process worked, sir.
Mr. DeSaulnier. OK. So your comment about the number of the
input from the public, the 4 million comments, would you
ascribe a reason for that? I have gotten lots of input, I know
we all have, from average, everyday citizens. Could you ascribe
the motivation?
Mr. Wheeler. I think that the Internet touches people's
lives more than any other network probably in the history of
mankind, and everybody, believe me, everybody has an opinion
about the Internet and everybody wants to talk about the
Internet. So when you begin addressing issues such as will the
Internet continue to be fair, fast, and open, those are things
that it doesn't take an engineering degree or a computer
science degree to be able to understand. Those are things you
can understand that affect people individually, and I think
that is why we had this kind of response.
Mr. DeSaulnier. I appreciate that. It is interesting
sitting in this room and seeing behind you a picture of the
connection of the Transcontinental Railway. When you look from
a historical perspective of how the Federal Government has
handled what would be considered assets of the commonwealth,
but also wanted to be fair to the people who were investing
from the private sector, whether it was railroads or television
or the media, from your perspective, one of the concerns is who
benefits and who does not, and usually the poorest Americans
have benefited the least, at least in the short-term.
Do you have any comments about this rulemaking and the
digital divide? Will it help eliminate that or by not doing
this rulemaking and having sort of an opposite rulemaking, how
it would affect the poorest of Americans?
Mr. Wheeler. If you do not have access, free, fair, open
access, then you, per se, have a divide; and so when we come
out and talk about how there needs to be, no matter where you
are, no matter what legal content it is, that there should be
open access to it, that the predicate to not having a divide.
Not to say that there aren't challenges that we will continue
to face, but that the baseline is there has to be openness.
Mr. DeSaulnier. Thank you, Mr. Chairman.
Chairman Chaffetz. Thank you. I thank the gentleman.
Now recognize the gentleman from Iowa, Mr. Blum, for 5
minutes.
Mr. Blum. Thank you, Mr. Chairman.
Thank you, Chairman Wheeler, for being here today and
sharing your insights with us. I must admire your green tie.
Obviously, I did not get the memo.
Mr. Wheeler. It is that day.
Mr. Blum. Yes.
I have a general question.
Mr. Wheeler. When you grow up with an Iowa woman who is big
into Irish, you make sure that you wear a green tie, sir.
Mr. Blum. Well said.
I have a general question for you and then a more specific
question. In your opening Statement this morning, you mentioned
that one of the FCC's goals, let me make sure I get this
correct, is to protect the open Internet as a level playing
field for innovators and entrepreneurs.
Mr. Wheeler, I am one of those innovators and I am one of
those entrepreneurs. My concern, as a small businessman, Mr.
Wheeler, is I have seen firsthand what happens to private and
free marketplaces when the heavy hand of the Federal Government
gets involved; and typically what happens, we see less
innovation, we see lower qualities, we see higher prices,
higher taxes. An example of that recently is the Affordable
Care Act, which was supposed to help level the playing field
for small businesses, and we have seen there higher prices,
less innovation, higher taxes.
My question to you, and a question I get asked in Iowa
often, Mr. Wheeler, is what steps is the FCC going to take to
ensure, to ensure that the Internet remains vibrant,
innovative, and open, when history, once again, has shown us
when the heavy hand of the Federal Government gets involved in
a free and vibrant market, bad things happen?
Mr. Wheeler. Thank you, Mr. Blum. First of all, I would
like to identify with you as one entrepreneur to another. I too
have been a small businessman; I have started a half a dozen
companies. Some worked, some didn't.
Mr. Blum. That happens.
Mr. Wheeler. You understand that experience as well, I am
sure.
Mr. Blum. Yes.
Mr. Wheeler. And for the decade before I took this job, I
was a venture capitalist who was investing in early stage
Internet protocol-based companies. So I know both personally,
from my own entrepreneurial experience, as well as from my
investing experience, that openness is key. If the companies
that I had invested in did not have open access to the
distribution network, it would have been an entirely different
story.
Mr. Blum. What will you do to guarantee it?
Mr. Wheeler. What you can tell your constituents is that it
is openness that is the core of creativity, because there
should be nobody acting as a gateway and saying, hmm, you are
only going to get on my network if you do it on my terms. And
the key, then, as we go to the previous discussion that what
you want to do is make sure you have that gateway not blocking
the openness of entrepreneurs and at the same point in time
that gateway not being retail price regulated so that it can
continue to invest. And that is the kind of balance that we
were trying to do. But I would urge you to tell your
constituents the opportunity for innovation and the opportunity
for the scaling that is required of innovation has never been
greater because the networks are open.
Mr. Blum. With all due respect, many people back in Iowa
would say you are trying to solve a problem that doesn't exist
today.
I have a specific question for you. During an interview
with the Consumer Electronics Show in January, you said that
you had an aha moment in the summer of that year when you
realized the Telecommunications Act of 1996 applied Title II
classification to wireless phone providers, but exempted them
from many of its provisions.
Later in the year, House Communications Subcommittee Chair
Greg Walden said that he met with you in November 2014 to
reiterate congressional Republicans' concern with Title II
regulation of the Internet. In that meeting, Chairman Walden
said you assured him that you were committed to net neutrality
without classification of broadband under Title II. Sounds to
me like a flip flop. Can you explain that difference?
Mr. Wheeler. I respect Mr. Walden greatly, and I am going
to be testifying before him on Thursday. I saw that he made
that Statement. I went back to the contemporaneous notes from
that meeting and we have a completely different set of
recollections and, in fact, the notes because my notes say that
I said that we would use light touch Title II and Section 706.
I don't know what is going on; all I am saying is those are
what my notes are, sir.
Mr. Blum. Thank you.
I yield my time.
Chairman Chaffetz. Thank you.
Now recognize the gentleman from Georgia, Mr. Carter, for 5
minutes.
Mr. Carter. Thank you, Mr. Chairman.
Thank you, Mr. Wheeler, for being here today. We appreciate
it very much. In the short 5 minutes that I have, I want to try
to get a better understanding of two things. First of all,
throughout the process today and through my reading and through
listening, it just appears that the whole process, there was
more attention paid to the White House than there was to
Congress, and I just don't understand why that would be the
case in an independent body like yours. Did you serve on the
transition team for the Obama Administration?
Mr. Wheeler. Yes, sir.
Mr. Carter. You did. That is correct. So it is safe to say
and true to say that you have a very close relationship with
the President, is that right?
Mr. Wheeler. I am not sure that I have a close relationship
with the President. I know the President.
Mr. Carter. Well, you served on his transition team. I
don't think he would have somebody who wasn't close to him on
his transition team. Agreed?
Mr. Wheeler. I am not going to make representations for the
President.
Mr. Carter. OK. Fair enough. Fair enough. OK, well, he
didn't ask me to be on his transition team. Let's put it that
way, OK?
Well, the day after the vote for the rule, did it strike
you as being interesting at all that a fellow commissioner of
yours called the new rule President Obama's plan?
Mr. Wheeler. Everybody is entitled to their own opinion. I
think it is appropriate to State something very clearly in
response to what you are saying. Since taking this job, I met
once with the President in the Oval Office; it was the first
couple of days on the job. It was congratulations, welcome to
the job.
Mr. Carter. I understand that.
Mr. Wheeler. In that meeting, in that meeting, sir, he said
to me you need to understand I will never call you; you are an
independent agency.
Mr. Carter. Then why do you think a fellow commissioner
made the comment that this is President Obama's plan for the
Internet? Why do you think that someone would make that
comment?
Mr. Wheeler. He has been good to his word, sir, and I have
no idea why somebody would want to make that kind of comment.
Mr. Carter. Why do you think that the Democratic National
Committee made the Statement that it was President Obama's
plan?
Mr. Wheeler. I have noticed occasionally over time that
both committees will engage in hyperbole.
Mr. Carter. So you just think it is hyperbole? Do you agree
with the DNC's Statement?
Mr. Wheeler. I believe that this is a plan that was put
together by the FCC.
Mr. Carter. So you do not agree with the DNC's Statement
that this is President Obama's plan.
Mr. Wheeler. Well, let's get specific. One, he didn't have
Section 706 in what he sent when he sent something in. Second,
he didn't cover interconnection, which we cover. Third, he
talked about forbearing from rate regulation, not the 26 other
things that we do. I think that we produced a plan that is
uniquely our plan and is a plan that is based on the record
that was established before us; and that when the President
joined the 64 Democratic Members of Congress and the millions
of people and said he too thought this made sense, that he was
piling on rather than being definitive.
Mr. Carter. All that is fine, but let me ask you through
the process of this evolution of the plan, did your thought
process change at all? I mean, initially it appeared that you
had in mind what was referred to as a hybrid 706 plan.
Mr. Wheeler. You actually used the right word there, my
evolution on this plan. I started out with pure 706 and then I
realized, as I said in my testimony, that that wouldn't work
because of the commercially reasonable test, and so I started
exploring Title II kinds of ideas.
Mr. Carter. Did anyone lead you in this exploration?
Mr. Wheeler. Yes, sir, all kinds of commenters and a lot of
work that was put into that.
Mr. Carter. Do you think any of those commenters were
influenced by the White House?
Mr. Wheeler. I have no idea.
Mr. Carter. One final question. Do you feel that you paid
as close attention to the White House as you paid to Congress?
Mr. Wheeler. Sir, I believe that I have, frankly, spent
more time discussing this issue with Members of Congress than
with the Administration.
Mr. Carter. Then ultimately do you feel like you listened
to the input of Congress more so than the White House?
Mr. Wheeler. I paid full attention to the record that was
established in this proceeding, and it included Members of
Congress saying no, don't do Title II, and it included Members
of Congress saying do do Title II.
Mr. Carter. Again, do you feel like you paid as close
attention to Congress as you did to the White House?
Mr. Wheeler. I think my responsibility is to be responsive
to all of the people who are involved.
Mr. Carter. I can't tell whether that is a yes or no.
Mr. Wheeler. I think I was very responsive to Congress.
Mr. Carter. Thank you very much.
Chairman Chaffetz. Thank the gentleman.
And I appreciate the gentleman's commitment to St.
Patrick's Day as exemplified by that jacket, but the chair is
prepared to rule that he has only been outdone by the gentleman
from Wisconsin, who clearly is wearing his colors today, and
will now recognize that gentleman from Wisconsin, Mr. Grothman,
for 5 minutes.
Mr. Grothman. Thanks for hanging around so long.
Last month The Wall Street Journal, you maybe saw, had an
article reporting that the White House had spent months in a
secretive effort to change the FCC course. Did this news come
as a surprise to you? When you heard about it, what was your
reaction?
Mr. Wheeler. So there is a standard process, I believe,
where the White House works on developing their position. I was
not a part of it.
Mr. Grothman. Did it surprise you when you heard about it?
Mr. Wheeler. It is not a surprise that something like that
goes on.
Mr. Grothman. OK. Last spring and summer you had various
meetings with White House officials. Did you become aware at
that time that the White House was working on an alternative to
your original proposal?
Mr. Wheeler. I had heard rumors that the White House was
looking at this, as I say, like they look at all other issues
to develop an administration position.
Mr. Grothman. OK. The White House, apparently, in
formulating this alternative, had dozens of meetings with
online activists, startups, traditional telecommunication
companies. We believe participants were allegedly told not to
discuss the process. Were you aware of these meetings at the
time?
Mr. Wheeler. I knew that there was a process, this group. I
did not know who they were meeting with.
Mr. Grothman. OK.
I yield the rest of my time.
Chairman Chaffetz. Thank you.
Now recognize the gentleman from Maryland, Mr. Cummings.
Mr. Cummings. Mr. Wheeler, as we now wind down this
hearing, Mr. Chairman, I want to thank you again for your
testimony. When decisions are made by various bodies,
commissions, quite often people are in disagreement with those
decisions, and I don't think there is anything wrong with
looking behind the curtain to try to figure out what the
process was, because one of the things that we have been
pushing very hard on in this committee is the whole idea of
transparency. So your testimony has been very enlightening.
I think we need to keep in mind that these decisions are
made by people who come to government, and they don't have to
do that, but they come to government trying to bring their own
experiences to the table, their concerns, and their hopes of
bringing us more and more to that perfect union that we talk
about.
So I want to thank you for all that you have done and
continue to do. And I want to thank the other commissioners and
your employees. I think a lot of times in these circumstances
we forget that there are employees who have worked very hard on
these issues and trying to do it right, so that is very
important. I hope that you will take that back to your
commissioners and the employees.
And I am hopeful that we can move forward here. Again, I
have listened to you very carefully. There was a moment, I
mentioned to my staff, that kind of touched me a bit, when you
were asked whether you were backtracking on your decision; and
the passion that you responded in saying that absolutely not,
this is a decision that you all made and that you are proud of
it, and that is something that is very important to you. You
can't fake that. You can't fake it. And as a trial lawyer, I am
used to watching people testify.
Another thing that you said and you were very clear is that
you adhered to the rules, and I appreciate that and I believe
so. So we look forward to continuing to work with you and again
I want to thank you for your testimony.
Mr. Wheeler. Thank you, Mr. Cummings.
Chairman Chaffetz. Mr. Chairman, I appreciate your being
here today. We were made aware that the inspector general has
opened an investigation of this process. Are you aware of that
investigation?
Mr. Wheeler. No.
Chairman Chaffetz. It is my understanding it is not an
audit, it is not an inspection, but an actual investigation.
Would you be willing to cooperate with this investigation?
Mr. Wheeler. Of course.
Chairman Chaffetz. I think one of the key things, and it
was brought up on both sides, is the process of openness and
transparency. My personal opinion, there could have been a lot
more done to maximize the transparency and the openness. The
rules do allow you latitude to give it more transparency than
you did. I think one of the things our body should look at is
compelling that openness and transparency, rather than making
it simply discretionary; and that is something we will have to
take back, because there are rulings that go one direction or
another. Some people are happy, some aren't.
But the idea that the public could, say, have a 30-day
opportunity to see the final rule I think rings true with a lot
of people. This notion that, right up until the time you voted
for it, nobody outside of that Commission is allowed to see the
final product does not lend itself well to maximizing openness
and transparency. And that is just my comment, it is not a
question. But I do think a 30-day window would do that.
I also think that the interactions with those who have an
opinion is fine, it is a healthy one. But the lack of
disclosure about those, overly redacting emails does lead one
to believe that there was a bit more of a secret type of
communication going on there, and I think you can understand,
at least I hope that you can appreciate why some people would
come to that conclusion, particularly given the dramatic change
in the policy that you took.
Nevertheless, I think this was a good and healthy hearing.
We appreciate your participation. That is what this process is
about. There are fact-finding things that we engage in and I
appreciate your participation here today. We do have a number
of outstanding requests from the FCC that we would appreciate
your providing that information to this committee. Some take a
little bit longer in time, some are fairly easy, but we
appreciate your staff who have to do a lot of this work, and
thank them for those efforts.
This committee now stands adjourned.
[Whereupon, at 12:40 p.m., the committee was adjourned.]
APPENDIX
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