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

               OVERSIGHT OF THE FEDERAL COMMUNICATIONS COMMISSION

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

                                    HEARING

                                   BEFORE THE

                 SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                               NOVEMBER 17, 2015

                                   __________

                               Serial No. 114-101

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Printed for the use of the Committee on Energy and Commerce
                           energycommerce.house.gov
                                      ______

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                        COMMITTEE ON ENERGY AND COMMERCE

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

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

                                 C O N T E N T S

                                  ----------
                                                                       Page
    Hon. Greg Walden, a Representative in Congress from the State of
      Oregon, opening statement......................................     1
        Prepared statement...........................................     3
    Hon. Anna G. Eshoo, a Representative in Congress from the State
      of California, opening statement...............................     5
        Prepared statement...........................................     6
    Hon. Fred Upton, a Representative in Congress from the State of
      Michigan, opening statement....................................     7
        Prepared statement...........................................     7
    Hon. Frank Pallone, Jr., a Representative in Congress from the
      State of New Jersey, opening statement.........................     9
    Hon. Gus M. Bilirakis, a Representative in Congress from the
      State of Florida, prepared statement...........................    94

                                   Witnesses

    Tom Wheeler, Chairman, Federal Communications Commission.........    11
        Prepared statement...........................................    13
        Answers to submitted questions...............................   102
    Mignon Clyburn, Commissioner, Federal Communications Commission..    18
        Prepared statement...........................................    20
        Answers to submitted questions...............................   139
    Jessica Rosenworcel, Commissioner, Federal Communications
      Commission.....................................................    27
        Prepared statement...........................................    29
        Answers to submitted questions...............................   146
    Ajit Pai, Commissioner, Federal Communications Commission........    33
        Prepared statement...........................................    35
        Answers to submitted questions...............................   150
    Michael O'Rielly, Commissioner, Federal Communications Commission    40
        Prepared statement...........................................    42
        Answers to submitted questions...............................   153

                               Submitted Material

    Statement of Bill Haslam, Governor of Tennessee, submitted by
      Mrs. Blackburn.................................................    96
    Statement of Herbert H. Slatery, III, Lieutenant Governor of
      Tennessee, submitted by Mrs. Blackburn.........................    97
    Letter of June 18, 2015, from Messrs. Latta and Green to FCC
      Commissioner Tom Wheeler, submitted by Mr. Latta...............    98
    Statement of the Illionois Chamber of Commerce, submitted by Mr.
      Kinzinger......................................................   100

               OVERSIGHT OF THE FEDERAL COMMUNICATIONS COMMISSION

                                  ----------

                           TUESDAY, NOVEMBER 17, 2015

                      House of Representatives,
         Subcommittee on Communications and Technology,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 10:15 a.m., in
    room 2123, Rayburn House Office Building, Hon. Greg Walden
    (chairman of the subcommittee) presiding.
        Present: Representatives Walden, Latta, Barton, Shimkus,
    Blackburn, Scalise, Lance, Guthrie, Olson, Pompeo, Kinzinger,
    Bilirakis, Johnson, Long, Ellmers, Collins, Cramer, Upton (ex
    officio), Eshoo, Doyle, Welch, Yarmuth, Clarke, Loebsack, Rush,
    DeGette, Butterfield, Matsui, McNerney, Lujan, and Pallone (ex
    officio).
        Staff Present: Ray Baum, Senior Policy Advisor,
    Communications and Technology; Rebecca Card, Assistant Press
    Secretary; Andy Duberstein, Deputy Press Secretary; Gene
    Fullano, Detailee, Telecom; Kelsey Guyselman, Counsel, Telecom;
    Peter Kielty, Deputy General Counsel; Grace Koh, Counsel,
    Telecom; David Redl, Counsel, Telecom; Charlotte Savercool,
    Professional Staff, Communications and Technology; Gregory
    Watson, Legislation Clerk, Communications and Technology; Jean
    Woodrow, Director, Information Technology; Christine Brennan,
    Minority Press Secretary; Jeff Carroll, Minority Staff
    Director; David Goldman, Minority Chief Counsel, Communications
    and Technology; Tiffany Guarascio, Minority Deputy Staff
    Director and Chief Health Advisor; Jerry Leverich, Minority
    Counsel; Lori Maarbjerg, Minority FCC Detailee; Tim Robinson,
    Minority Chief Counsel; and Ryan Skukowski, Minority Policy
    Analyst.

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

        Mr. Walden. Good morning, everyone. And welcome to the
    subcommittee on Communications and Technology and our oversight
    hearing on the Federal Communications Commission.
        I want to welcome the Chairman and all of the
    Commissioners. We are glad to have you here again. We
    appreciate your joining us today.
        As you know, it is our job to not only initiate innovative
    legislation and work with all of you on various individual
    legislative and regulatory priorities, but it is also our job
    to conduct rigorous and appropriate oversight of the Federal
    Communications Commission. And that is the subject of the
    hearing that we have today.
        Sadly, it is clear by various actions of this and previous
    commissions that Congress has delegated too much flexibility at
    times and authority to the FCC. And it seems that, regardless
    of what our clear legislative intent is, too often that clear
    intent gets misunderstood or, worse, obfuscated or obstructed.
    So, colleagues, we have to do a better job when we write these
    bills so as to limit FCC authority, not to expand it.
        This committee has placed an emphasis on improving the
    FCC's processes when it comes to conducting the people's
    business. The full House has concurred with our work on
    multiple occasions, including as recently as last night, when
    the House passed the FCC Process Reform Act of 2015
    unanimously. This effort arises from complaints and suggestions
    from the public and from various Commissioners over the years
    under various Chairs. Better process at the FCC will result in
    more transparent decisionmaking, where all the Commissioners
    have a meaningful opportunity to participate.
        And, Chairman Wheeler, while you have made important
    improvements, and I commend you for that--you have reduced
    backlogs, you have implemented a new complaint process, among
    other items--members of your own Commission are driven to
    publicly express their frustrations with the bigger
    decisionmaking process at times, so it is distressing to hear
    of somewhat bitter divisions.
        Now, let me give you three specific issues that concern me
    and many of us on the committee.
        First, our lawyers believe the FCC has disregarded the
    clear directive in the STELA Reauthorization Act of 2014 by
    expanding the scope of the DSTAC Working Group beyond what was
    ever intended by the committee. So that is number one.
        Number two, the FCC has promulgated rules designed to
    preempt state laws regarding municipal broadband absent
    congressional authority to do so.
        And, of course, the FCC continues its 8-year-long failure
    to complete its required quadrennial review of media ownership
    rules. I wonder what penalties would befall a licensee of the
    Commission that so failed to follow the law.
        And that is just the list of things that have already
    happened. The Commission has a number of pending proceedings
    that threaten to walk the same tired path of partisan,
    predetermined outcomes.
        The Commission has announced a rulemaking to ``clarify the
    FCC's expanded privacy authority under the new Internet
    rules,'' even when some cheerleaders for Title II common
    carrier regulation of the Internet access are coming to realize
    just how wide a net this self-granted authority casts over the
    Internet. If IP addresses are equivalent to phone numbers under
    Title II, just how will commerce flow in a broadband world?
    What is the FCC's definition of ``privacy'' under a law
    designed for hand-cranked telephones?
        The Commission appears poised to move forward on an item to
    redefine multichannel video programming distributor, or MVPD,
    to include linear over-the-top video providers. This is billed
    as a way to promote online video as a competitor to traditional
    cable and satellite providers, yet many over-the-top providers
    assert that government intervention is not warranted and that
    this will chill investment and innovation in the nascent,
    growing sector.
        And the Commission appears ready to move forward to expand
    the scope of the universal service Lifeline program without
    adopting controls to prevent ballooning costs. While this
    Commission has taken some steps to reduce waste, fraud, and
    abuse--and I commend you for that--much work remains in these
    areas, and the program still lacks meaningful spending
    controls. This, despite the fact the contribution factor for
    universal service--that is the percentage of consumers' bills
    the FCC collects each month to support the Universal Service
    Fund program--will rise to 18 percent in January, and that is
    an all-time high.
        Serious concerns about the misguided management and reward
    system of the Enforcement Bureau have risen to the point that
    Chairman Upton, the vice chairman of this subcommittee, Mr.
    Latta, and I have asked the Government Accountability Office to
    conduct an independent investigation into how decisions are
    made, how fines are determined, and how employee performance is
    assessed.
        In addition to these concerns, many stakeholders have
    expressed overarching concern that the FCC is adopting and
    applying its rules in an arbitrary fashion, singling out
    certain companies or industries for asymmetric regulation. This
    concern is buttressed, in their view, by so many 3-to-2 votes.
        With the spectrum auction less than 4 months away, I would
    also like to get your assurance that the Federal Communications
    Commission will fully and faithfully implement the law that was
    passed by Congress that broadcasters will not be forced to
    participate and that the Commission will make all reasonable
    efforts to preserve broadcaster coverage, prevent interference,
    and make sure that consumers can continue to enjoy their over-
    the-air viewing.
        Two final notes. First, congratulations to the FCC on your
    October 23 unanimous vote to adopt the AM radio revitalization
    order, providing needed relief to the struggling AM radio
    industry. To quote the NAB press release, ``a great day for AM
    radio and for millions of listeners across America.'' I
    especially commend Commissioner Pai for his leadership on this
    issue and for all of you for coming together and finally
    getting this done.
        And I also want to congratulate Commissioners Rosenworcel
    and O'Rielly for their bipartisan efforts on 5G wireless. Keep
    it up.
        There is no lack of leadership or ability among the five
    people sitting before us today. You are all accomplished,
    recognized leaders. Our job is to change the system so each of
    you is a full participant in these incredibly important and
    complex decisions in a rapidly changing communications world.
        With that, I will turn to my friend from California, Ms.
    Eshoo, for her opening comments.
        [The prepared statement of Mr. Walden follows:]

                     Prepared statement of Hon. Greg Walden

        As you know, it's our job on this subcommittee to not only
    initiate innovative legislation and work with each of you on
    various legislative and policy proposals, but also to conduct
    rigorous and appropriate oversight of the FCC, as we will do
    today.
        Sadly, it's clear by various actions of this and previous
    commissions, Congress has delegated too much flexibility and
    authority to the FCC. And it seems that regardless of what our
    clear legislative intent is, too often that clear intent is
    misunderstood, or worse, obfuscated or obstructed. So
    colleagues, we have to do a better job when we write these
    bills so as to limit FCC authority, not expand it.
        This committee has placed an emphasis on improving the
    FCC's processes when it comes to conducting the people's
    business. The full House has concurred with our work multiple
    times, including as recently as last night when the House
    passed the FCC Process Reform Act of 2015 by voice vote. This
    effort arises from complaints and suggestions from the public
    and from various commissioners over the years under various
    chairs. Better process at the FCC will result in more
    transparent decision-making where all the commissioners have a
    meaningful opportunity to participate.
        And Chairman Wheeler, while you have made important
    improvements--you've reduced backlogs, implemented a new
    complaint process among other items--members of your own
    commission are driven to publicly express their frustrations
    with the bigger, decision-making process. It's distressing to
    hear of the bitter divisions.
        Now, let me give you three, specific issues that concern
    us:
         Our lawyers believe the FCC has disregarded the
    clear directive in the STELA Reauthorization Act of 2014 and
    expanded the scope of the DSTAC working group beyond what was
    ever intended;
         The FCC has promulgated rules designed to preempt
    state laws regarding municipal broadband absent congressional
    authority to do so;
         and, of course, the FCC continues its eight-year-
    long failure to complete its required quadrennial review of
    media ownership rules. (I wonder what penalties would befall a
    licensee of the commission that so failed to follow the law?)
        And that's just the list of things that have already
    happened. The commission has a number of pending proceedings
    that threaten to walk the same tired path of partisan,
    predetermined outcomes:
         The commission has announced a rulemaking to
    ``clarify the FCC's expanded privacy authority under the new
    Internet rules.'' Even some cheerleaders for Title II, common
    carrier regulation of Internet access are coming to realize
    just how wide a net this self-granted authority casts over the
    Internet. If IP addresses are equivalent to phone numbers under
    Title II, just how will commerce flow in a broadband world?
    What's the FCC's definition of ``privacy'' under a law designed
    for hand-cranked telephones?
         The commission appears poised to move forward on
    an item to redefine ``multichannel video programming
    distributor'' or ``MVPD'' to include linear over the top video
    providers. This is billed as a way to promote online video as a
    competitor to traditional cable and satellite providers--yet,
    many over-the-top providers assert that government intervention
    is not warranted and that will chill investment and innovation
    in the nascent and growing sector.
         The commission appears ready to move forward to
    expand the scope of the Universal Service Lifeline program
    without adopting controls to prevent ballooning costs. While
    the commission has taken some steps to reduce waste, fraud and
    abuse, much work remains in these areas, and the program still
    lacks meaningful spending controls. This despite the fact that
    the contribution factor for universal service--the percentage
    of consumers' bills that the FCC collects each month to support
    USF programs--will rise to 18 percent in January, an all-time
    high.
         Serious concerns about the misguided management
    and reward system of the Enforcement Bureau have risen to the
    point that Chairman Upton, Vice Chairman Latta and I have asked
    the Government Accountability Office to conduct an independent
    investigation into how decisions are made, how fines are
    determined and how employee performance is assessed.
        In addition to these concerns, many stakeholders have
    expressed overarching concern that the FCC is adopting and
    applying its rules in an arbitrary fashion, singling out
    certain companies or industries for asymmetric regulation. This
    concern is buttressed by so many 3-2 votes.
        With the spectrum auction less than four months away, I
    would also like to get your assurance that the FCC will fully
    and faithfully implement the law, that broadcasters will not be
    forced to participate, and that the commission will make all
    reasonable efforts to preserve broadcasters coverage areas so
    that consumers can continue to enjoy over-the-air viewing.
        Two final notes. First, congratulations to the FCC for your
    October 23rd, unanimous vote to adopt the AM Radio
    Revitalization Order providing needed relief to the struggling
    AM radio industry--to quote the NAB press release ``a great day
    for AM radio and for millions of listeners across America.'' I
    commend Commissioner Pai for his leadership on this issue and
    all of you for coming together and finally getting that done.
    And I want to also congratulate Commissioners Rosenworcel and
    O'Rielly for their bipartisan efforts on 5G wireless--keep it
    up.
        There is no lack of leadership or ability among the five
    people sitting before us today. You are all accomplished,
    recognized leaders. Our job is to change the system so that
    each of you is a full participant in these incredibly important
    and complex decisions in the rapidly changing communications
    world.

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

        Ms. Eshoo. Thank you, Mr. Chairman.
        And good morning, Mr. Chairman and members of the
    Commission. It is always great to see you here, the full
    Commission.
        I want to start out by commending the Chairman and,
    certainly, the Commissioners. The Chairman began his job as the
    Chairman of the Commission 2 years ago this month. I don't know
    what the exact date was, Mr. Chairman, but I know it was 2
    years ago. And it may seem to you like 100 years, some days
    anyway.
        But in the staff memorandum, if members have read it, I
    just want to go through what I think is an honor roll of
    addressing issues. This is taking on a great deal, and I think
    they are all worthy of mention. Some of my colleagues are not
    going to agree, but, obviously, I think it is very important:
    net neutrality, spectrum legislation, public safety, AWS-3
    auction, incentive auctions, the pending merger transactions,
    universal service, the E-rate, Lifeline, Rural Health Care
    Program, tech transition, consumer protection, public safety,
    enforcement, and I think there is--well, obviously, there has
    been work on process reform.
        And when I name off all of these areas, imagine the work
    that is underneath one or two words. So, whether Commissioners
    have agreed or disagreed on parts of policies that come under
    those umbrellas, you have taken on a huge workload, and I
    salute you. I have served with either five or six chairmen and
    commissions, and I think that this is the most proactive
    commission and chairman that we have worked with. So thank you.
    I salute you.
        More than a decade ago, the Columbia Business School
    professor Eli Noam examined the relationship between
    entrepreneurship and government and telecommunications. He
    concluded that entrepreneurial firms exist in the telecom
    sector--and this is so interesting to me--not despite of
    government but, rather, because of it.
        So let's assess how. Competition has been foundational in
    the Communications Act for more than 80 years, eight decades.
    So we do get some things right around here. Actions such as the
    Carterfone decision, the breakup of AT&T, and the 1996 Telecom
    Act demonstrated that when incumbents fail to innovate that the
    public sector has to step up to protect consumers and promote
    competition.
        But what should communications policy look like in the
    second decade of the 21st century? In the Internet age, it
    begins with open, interconnected networks that empower
    consumers and businesses to use the devices and the services of
    their choosing. Robust, enforceable open Internet rules prevent
    broadband providers from blocking or throttling lawful online
    content or engaging in paid prioritization.
        It means reforming legacy video laws that hinder innovation
    and consumer choice while protecting incumbent interests. And
    it means ensuring that consumers can buy a set-top box from
    someone other than their pay-TV provider. The lack of
    competition in the set-top box space has left consumers paying,
    on average, what some people think is whopping: $231 a year on
    rental fees alone. Why we allow this to continue I don't know,
    but it really does need to be addressed.
        So, to promote competition, we also need commonsense
    policies that make it easier for new companies to enter the
    broadband market. And I want to thank Commissioner Rosenworcel
    for highlighting in her testimony today the ``dig once'' policy
    that the chairman of our subcommittee and myself launched and
    on a bipartisan basis have promoted to promote broadband and do
    it in a very smart way.
        Finally, competition should be embedded in the decisions we
    make on spectrum. A balanced spectrum policy that recognizes
    the importance of both licensed and unlicensed spectrum is
    going to enhance competition, it will drive down prices, and it
    will unlock new innovation. It is an innovation platform in our
    country, and we can't lose sight of that.
        So my special thanks to you, Mr. Chairman, for your superb
    leadership; to each Commissioner for your leadership, for your
    working together. Even when you disagree, it is not personal,
    it is about the policy. And we all benefit from a variety of
    views.
        And more than anything else, I will be gone from this
    world, but what I want written about the 21st century is that
    it was an American century.
        I have gone over my time. I apologize to Congresswoman
    Matsui. I was going to yield time to her, but perhaps somebody
    else will.
        Thank you, Mr. Chairman.
        And thank you----
        [The prepared statement of Ms. Eshoo follows:]

                    Prepared statement of Hon. Anna G. Eshoo

        More than a decade ago, Columbia Business School Professor
    Eli Noam examined the relationship between entrepreneurship and
    government in telecommunications. He concluded that
    entrepreneurial firms exist in the telecom sector not despite
    of government but rather because of it. Let's assess how.
        Competition has been foundational in the Communications Act
    for more than 80 years. Actions such as the Carterfone
    decision, the breakup of AT&T and the 1996 Telecom Act
    demonstrated that when incumbents fail to innovate, the
    government has stepped in to protect consumers and promote
    competition. But what should competition policy look like in
    the second decade of the 21st century?
        In the Internet age, it begins with open, interconnected
    networks that empower consumers and businesses to use the
    devices and services of their choosing. Robust, enforceable
    open Internet rules prevent broadband providers from blocking
    or throttling lawful online content or engaging in paid
    prioritization. It means reforming legacy video laws that
    hinder innovation and consumer choice, while protecting
    incumbent interests. And it means ensuring consumers can buy a
    set-top box from someone other than their pay-TV provider. The
    lack of competition in the set-top box space has left consumers
    paying on average a whopping $231 per year on rental fees
    alone.
        To promote competition, we also need commonsense policies
    that make it easier for new companies to enter the broadband
    market. A `dig once' policy is one such example of how to
    reduce the barriers to broadband deployment, increase
    competition, and do so while saving taxpayer dollars. When new
    competition is unlikely to emerge, such as in the $40 billion a
    year special access market, the FCC must act decisively to
    reform the market and stop anti-competitive practices.
        Finally, competition should be embedded in the decisions we
    make on spectrum. A balanced spectrum policy that recognizes
    the importance of both licensed and unlicensed spectrum will
    enhance competition, drive down prices and unlock new
    innovation.
        My special thanks to Chairman Wheeler and fellow
    Commissioners for being here today. With your commitment to a
    competitive telecommunications agenda, the second decade of the
    21st century can be the decade when entrepreneurs finally
    prevailed.

        Mr. Walden. Thank you.
        Ms. Eshoo [continuing]. Commissioners.
        Mr. Walden. I will now turn to the chairman of the full
    committee, the gentleman from Michigan, Mr. Upton, for opening
    comments.

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

        Mr. Upton. Well, thank you, Mr. Chairman.
        As we all know, 2 years ago, this committee welcomed a
    newly sworn-in Chairman Wheeler to this very hearing room. Our
    message then for the new Chair and the entire Commission was
    short and sweet: Given the FCC's jurisdiction over one of the
    most important sectors of our economy, the decisions that they
    would make would be critical to innovation, jobs, and our
    Nation's global leadership in technology.
        And, today, our request is just as simple: In executing its
    functions, the agency must operate with openness and
    transparency for the benefit of American consumers and job
    creators.
        Unfortunately, notwithstanding our clear and numerous
    concerns, the FCC has been plagued at times by process failures
    and a lack of healthy and honest policy debate. Ultimately,
    this has produced uncertainty in the market, harming our
    economy and the robust communication sector's ability to create
    the jobs that all Americans need.
        There remains many significant matters to be decided by the
    Commission. These are opportunities for the FCC to get back on
    track, to demonstrate its commitment to process reform and
    return to the bipartisan policymaking that was once a hallmark
    of the FCC.
        What you collectively do together matters to folks in
    Michigan and across the country, whose daily lives have been
    transformed by technology. And if the process can be improved,
    we will all be better for it.
        I yield the balance of my time to Mrs. Blackburn and then
    Mr. Latta.
        [The prepared statement of Mr. Upton follows:]

                     Prepared statement of Hon. Fred Upton

        Two years ago, the Energy and Commerce Committee welcomed a
    newly sworn in Chairman Wheeler to this very hearing room. Our
    message then for the new Chairman and the entire commission was
    short and sweet: given the FCC's jurisdiction over one of the
    most important sectors of our economy--the decisions that they
    would make would be critical to innovation, jobs, and our
    nation's global leadership in technology. And today, our
    request is just as simple: in executing its functions, the
    agency must operate with openness and transparency for the
    benefit of American consumers and job creators.
        Unfortunately, notwithstanding our clear and numerous
    concerns, the FCC has been plagued at times by process failures
    and a lack of healthy and honest policy debate. Ultimately,
    this has produced uncertainty in the market harming our economy
    and the robust communications sectors' ability to create the
    jobs Americans need.
        There remain many significant matters to be decided by the
    commission. These are opportunities for the FCC to get back on
    track, to demonstrate its commitment to process reform and
    return to the bipartisan policy-making that was once a hallmark
    of the FCC. What you collectively do together, matters--to
    folks in Michigan and across the nation whose daily lives have
    been transformed by technology. And if the process can be
    improved, we will all be better for it.

        Mrs. Blackburn. Thank you, Mr. Chairman.
        I want to say thank you to each of the Commissioners for
    taking your time to be here. It has been a while since we have
    had the full panel, and we are appreciative for this because we
    do have some questions. And FCC actions over the past several
    months have raised some questions about transparency and
    accountability and, as our chairman likes to say, regulatory
    humility or the lack thereof. So those are issues we want to
    cover with you today.
        We also are going to want to talk some about net neutrality
    and the Commission's potential entry into the online privacy
    realm. That has been the jurisdiction of the FTC, so we are a
    bit concerned about that and about how your policies seem to go
    about pushing the concept of picking winners and losers, which
    is not your job. The marketplace should do that.
        I am also going to have some questions about your decision
    to preempt state laws in Tennessee and North Carolina on the
    muni broadband issue. The chairman touched on this. You have a
    position there that even DOJ found that it could not support.
    So this is of concern to us.
        We thank you for being here to answer the questions.
        And I yield the balance of the time to Mr. Latta.
        Mr. Latta. Well, thank you very much. I appreciate the
    gentlelady for yielding.
        And, Mr. Chairman, thanks for today's hearing.
        And to the Commission, thanks very much for being with us
    today.
        Over the past year, this subcommittee has devoted many
    hearings to oversight of the FCC. This attention has not been
    misplaced. The communications and technology industry is a very
    productive and dynamic sector of our economy. We cannot afford
    to overlook the significance of regulatory policies and how the
    FCC's decisions affect the success of this vibrant industry.
        Without proper oversight, some actions emerging from the
    FCC, like the Downloadable Security Technical Advisory
    Committee proposals, can go unchecked and have negative impacts
    on a thriving industry. DSTAC, established by the FCC as
    directed by Congress, was formed to make recommendations on a
    software-based, downloadable security system for securing video
    content. However, the FCC allowed the DSTAC to focus on
    navigation interface issues, as well as downloadable security.
    This action goes against clear direction from Congress. As a
    result, the technical working group failed to achieve its
    intended purpose.
        I look forward to hearing from the Commissioners today on
    this issue, Mr. Chairman. And I yield back the balance of my
    time.
        Mr. Walden. The gentleman yields back the balance of the
    chairman's time.
        And we will now go to the ranking member of the full
    committee, the gentleman from New Jersey, Mr. Pallone.

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

        Mr. Pallone. Thank you, Chairman, and I also want to thank
    our ranking member for holding this hearing.
        And thank you to all the Commissioners for coming up to
    talk with us once again.
        This is the fourth FCC oversight hearing we have had this
    year. I certainly appreciate the efforts the Republicans have
    put into overseeing the Commission. Oversight of all the
    agencies under our committee's jurisdiction is always a top
    priority for Democrats, and, still, I wish the committee had
    been as energetic this year about other problems the American
    people are grappling with, such as climate change, safe
    drinking water, or domestic violence in sports.
        Nevertheless, today's hearing is at least timely. We just
    recently commemorated the third anniversary of when Hurricane
    Sandy ripped through the East Coast. The storm left people
    across my district stranded without communication, some of them
    for weeks. And so I have spent the past 3 years making sure
    that we are better prepared for the next time disaster strikes.
    Because unless we do more to control climate change, there will
    be a next time.
        And that is why, yesterday, I introduced the SANDy Act to
    make sure people have better access to communications in an
    emergency. The bill recognizes the importance of phone service,
    TV, and radio during emergencies. I hope that the proposal in
    that bill, along with the efforts at the FCC to make networks
    more resilient, will mean that we never have a repeat of the
    communication failures from 3 years ago.
        But as important as network resiliency is, the FCC role in
    helping consumers is much broader. So I would like to briefly
    mention my other priorities for the Commission.
        First, online video. The future of communications is video,
    and the future of video is online and mobile. I thank the
    Commission for its ongoing work to understand this dynamic
    market, but I urge you to always remain focused on putting
    consumers first. Above all, the Commission's priority should be
    making sure consumers are the ones deciding what services and
    devices meet their needs.
        Second is spectrum. To make sure consumers can access the
    content they choose wherever they choose on whatever device
    they choose, they need more spectrum. The FCC is doing its part
    to meet this demand through its record-breaking spectrum
    auction earlier this year and its first-of-its-kind incentive
    auction set for early next year. I hope that Congress can
    continue to do our part by building on our recent work in the
    budget deal. We must find new ways to free more spectrum. We
    have not done enough.
        I know I have a couple other people here that want to use
    my time, but, before I yield, I wanted to thank Chairman Walden
    for his willingness to revisit the matter of broadcast
    ownerships. The chairman called a hearing to explore this issue
    a few months ago but had to cut it short. And this is an issue
    that the American people care deeply about, so I appreciate the
    fact that the chairman has offered to complete the hearing on
    December 3, and I look forward to it.
        So I thank, again, our witnesses. I look forward to hearing
    from you all about the important work the FCC is doing to help
    consumers.
        I have 2 minutes. I would like to give 1 minute to Mr.
    Butterfield and 1 to Ms. Matsui. We will start with Mr.
    Butterfield.
        Mr. Butterfield. I will do it very quickly, Mr. Pallone.
    Thank you very much for yielding.
        And thank you, Mr. Chairman, for convening this important
    hearing today.
        And to Commissioner Wheeler and to your colleagues, thank
    you so very much for coming.
        I would like to very quickly mention one thing because I
    may not be able to get it out during the remainder of the
    hearing. This is very important to me, and it is important to
    members of the Congressional Black Caucus. I recall that when I
    was a judge, when I was lawyer, and now as a community-based
    Congressman, I have run into this problem constantly throughout
    the years, and that has to deal with telephone calls from
    prisoners. Even when I was a trial judge, I used to get collect
    calls from those who were incarcerated.
        And you, Mr. Wheeler, and your Commission have addressed
    this issue, and I want to thank you and Ms. Clyburn and the
    others who worked so diligently on this.
        A call that used to cost as much as $14 per minute--a lot
    of people don't realize this--$14 per minute now costs 11 cents
    per minute. A 15-minute phone call used to be up to $210--a 15-
    minute call, $210. Now it is $1.65 per minute.
        And I just want to commend you for your bold step in making
    that happen. I have a friend who is in prison. I visit him four
    times a year. And it is a big conversation among the population
    in the prison, how they have been relieved of these burdensome
    phone calls. And so I want to thank you for your work in that
    area.
        And now I yield to my friend, Ms. Matsui.
        Ms. Matsui. Thank you very much for yielding to me.
        Welcome back, Chairman Wheeler and Commissioners. We
    appreciate the work you are doing in many areas.
        One of my top priorities is making more spectrum available.
    The recently passed Budget Act took important first steps, but
    I believe Congress and the FCC need to build upon these
    provisions to identify new spectrum opportunities.
        We also share many other priorities, from modernizing the
    Lifeline program for broadband to keeping the incentive auction
    on track. I look forward to hearing more about the FCC's
    progress on promoting a competitive market for special access
    services.
        I also urge the Commission to work with the subcommittee to
    ensure any products of the set-top box working group process
    serve the public interest.
        Thank you, and I yield back.
        Mr. Walden. The gentlelady yields back.
        All time has expired.
        We will now go to the Chairman of the Federal
    Communications Commission, the Honorable Mr. Wheeler, for your
    opening statement. It is good to see you.
        And I just want to stipulate for the record, the red I am
    wearing has nothing to do with Ohio State.
        Let's go now to Mr. Wheeler.

         STATEMENTS OF THE HON. TOM WHEELER, CHAIRMAN, FEDERAL
          COMMUNICATIONS COMMISSION; THE HON. MIGNON CLYBURN,
       COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION; THE HON.
       JESSICA ROSENWORCEL, COMMISSIONER, FEDERAL COMMUNICATIONS
         COMMISSION; THE HON. AJIT PAI, COMMISSIONER, FEDERAL
       COMMUNICATIONS COMMISSION; AND THE HON. MICHAEL O'RIELLY,
            COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION

                   STATEMENT OF THE HON. TOM WHEELER

        Mr. Wheeler. Mr. Chairman, it is a privilege to be here.
    Ms. Eshoo, Mr. Pallone.
        The color facts speak for themselves, sir.
        I have a prepared statement in the record, and I look
    forward to discussing a vast array of topics that have been
    suggested here today.
        Let me begin by applauding this body and the House for the
    bipartisan passage of H.R. 2583. We understand the process
    reforms that you seek, and we will comply with the law.
        Briefly today, let me focus on three topics that only
    Congress can resolve and pledge to work with this committee in
    addressing them.
        As I have said every time that I have been here, we have a
    crisis in bringing public safety communications into the
    digital era. We all mourn the events in Paris and the tragedy
    that happened there, but it reminds us of the need for constant
    preparedness and vigilance.
        When September 11 happened in this country, we discovered
    problems with the interoperability among our first responders,
    and Congress stepped up to address that. Mr. Pallone's new
    proposal that he just spoke about reminds us of the need to
    improve network resiliency in disasters.
        And there is another lurking problem, and that is the
    difficulty of our 6,800 public safety answering points, our 911
    operators, and the difficulty they are having adopting the next
    generation, the digital generation, of 911 capabilities. They
    risk becoming analog islands in a digital sea. The current
    systems are costly to operate and with limited capabilities
    compared to digital. The transition is expensive. It requires
    new equipment and new systems. It requires running redundant
    analog and digital during the conversion.
        There needs to be a national solution, national
    coordination, and national help to find the funds, perhaps from
    future auctions. It is worthy of public hearings, I would urge,
    Mr. Chairman, to illuminate the issue and the potential
    solutions, and we would look forward to working with the
    committee in that regard.
        Secondly, this committee has taken really important steps
    on infrastructure construction, and more opportunities await.
    There are really three goals. When you look at infrastructure,
    there are really three goals. How do you provide for clarity,
    consistency, and completion--the three C's of infrastructure.
        Insofar as clarity is concerned, today, court decisions
    decide infrastructure policy. Congress should decide
    infrastructure policy. You know, we need policy on activities
    that are deemed normally not to have significant impact on the
    environment. We need to eliminate the need for permits on
    technology upgrades without negative effects. We need to have
    the presumption that one commercial approval works for others;
    you don't have to have repetitive approvals. And we need to
    address the challenge in the Clean Water Act that says that
    when you dig up a street to replace the sewer you are
    prohibited by law from laying fiber. It just doesn't make any
    sense. Talk about ``dig once.''
        Insofar as consistency, only Congress can streamline the
    siting of facilities on Federal lands. There are just too many
    agencies with too many diverse processes to do serially.
        And on the question of completion, there needs to be
    certainty in the decisions. The reality is that appeals from
    the shot clock--we establish a shot clock, and then it goes to
    court in appeals, and it just delays the process further. One
    example of a solution was recently passed in the State of
    California, where the California law says that if a decision is
    not made within the shot clock it is deemed granted.
        So clarity, consistency, and completion are the goals we
    need to focus on for infrastructure, and we looked forward to
    working with you on those.
        And, finally, I know that this committee is concerned about
    pirate radio. During my tenure, we have taken 280 enforcement
    actions against pirate radio. That is in the last 2 years.
    Commissioner O'Rielly has been a real leader in keeping us
    focused on this. We are working with the NAB on a joint task
    force on pirate radio.
        But we need more tools. We are playing Whack-a-Mole right
    now. Every time a station pops up, we whack it. We need to have
    consequences for those who facilitate those stations popping
    up, the landlords who look the other way because helping
    pirates is risk-free. Congress could make it illegal to aid or
    abet pirate radio operations, and, in the process, denying them
    the opportunity to operate in this way would be a significant
    means of thwarting the continued growth of pirate radio.
        On these and all other issues, we look forward to working
    with this committee. And I thank you for the opportunity to be
    here.
        [The prepared statement of Mr. Wheeler follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Walden. Mr. Chairman, thank you for those
    recommendations and suggestions. Thanks for being here. We look
    forward to the questions.
        We will now go to the Honorable Ms. Clyburn, Commissioner
    of the Federal Communications Commission.
        Thanks for your good work on the issues raised by Mr.
    Butterfield. And we look forward to your testimony.

                  STATEMENT OF THE HON. MIGNON CLYBURN

        Ms. Clyburn. Thank you, Chairman Walden, Ranking Member
    Eshoo, distinguished members of the committee. I appreciate the
    opportunity to appear before you this morning in the company of
    my colleagues.
        We are living during an incredibly exciting time. America
    remains the land of opportunity. Technological advancements
    abound, providing new means to achieve the American Dream. And
    broadband is one of the biggest enablers of that dream. It is
    breaking down barriers to health care through remote
    monitoring, it is offering new paths to jobs and training, and
    it is providing our children with world-class learning.
        Most Americans enjoy ubiquitous access to broadband, but
    the number of those who do not remains high. I am both humbled
    and grateful that, from the directive issued by you, that the
    FCC has the obligation, ability, and opportunity to serve our
    Nation by acting to close chronic opportunity divides.
        My written testimony, which I ask to be included in the
    record, focuses on a promise and opportunities made possible by
    universal access to broadband, and it outlines our efforts to
    close those remaining communications access gaps.
        The Mobility Fund. While many of us enjoy nearly ubiquitous
    mobile coverage, pockets of our Nation remain in darkness. In
    2001, a bipartisan FCC adopted a dedicated Mobility Fund, but
    it has yet to be implemented. I believe that it is imperative
    that we move quickly to adopt a permanent Mobility Fund to
    eliminate coverage gaps across our Nation.
        Lifeline. The statute accords equal weight to rural high-
    cost areas and low-income consumers when it comes to ensuring
    access to service reasonably comparable to those we enjoy in
    urban areas, and it is time that the FCC do so, as well. It is
    time to move from merely criticizing to fixing remaining
    problems in Lifeline.
        So I fully support the modernization of the program to
    address the affordability divide. And I believe that the steps
    we have already taken and the plan we have outlined in our
    notice of proposed rulemaking would not only eliminate
    incentives for waste, fraud, and abuse but enable Lifeline to
    become truly a real communications bridge to help Americans in
    need to get back on their feet.
        The incentive auction. The Commission has worked hard to
    implement your directives regarding the incentive auction. And
    I am proud that we adopted rules to incentivize smaller
    companies to deploy wireless networks in areas that lack
    advanced services.
        And, as you have heard, the reform of inmate calling
    services. I am deeply grateful that we finally acted, in the
    absence of a functional marketplace, to provide affordable
    communication services for those wanting and needing to stay in
    touch with the currently incarcerated. Too many families,
    friends, and attorneys are making unconscionable choices to
    stay in touch. And our Nation is plagued by the highest
    recidivism rate in the world in part because families cannot
    afford to maintain regular contact and too many former inmates
    go home as strangers and are unable to readjust.
        Our Connect to Health program. That task force is an effort
    to reach beyond the Beltway to focus on game-changing projects
    and stimulating new collaborations between public and private
    stakeholders and local communities that are seeking to solve
    health challenges through broadband-enabled solutions.
        And, lastly, we talked about it, the AM revitalization
    item. This bipartisan compromise addressed and met the needs of
    small businesses, AM radio owners, and the public by taking
    steps to increase the viability of AM radio stations through
    access to an FM translator.
        Mr. Chairman, this sums up my testimony. The rest is in the
    record. And I look forward to any questions you may have.
        [The prepared statement of Ms. Clyburn follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Walden. Commissioner, thank you for your good work, and
    thanks for sharing those items with us.
        We will now go to Commissioner Rosenworcel.
        Thank you for being here. We look forward to your
    testimony, as well.

               STATEMENT OF THE HON. JESSICA ROSENWORCEL

        Ms. Rosenworcel. Good morning, Chairman Walden, Ranking
    Member Eshoo, and members of the subcommittee. Thank you for
    the opportunity to appear before you today along with my
    colleagues at the FCC.
        Today, communications technologies account for one-sixth of
    our economy, and that is no wonder, because these are the
    networks that carry all aspects of modern, commercial, and
    civic life. They are changing at a breathtaking pace, requiring
    us all to think boldly about the future. And, in the months
    ahead, the FCC will do just that as we begin the world's first
    spectrum incentive auction, work to speed the IP transition,
    and update universal service and media policies. This is lofty
    stuff.
        But I want to begin today by talking about the least
    glamourous part of the communications revolution. I want to
    talk about infrastructure. Because no amount of new fiberoptic
    facilities or spectrum matters without good policies on the
    ground.
        I believe it is time to take a comprehensive look at
    deployment practices and find a way to make them more
    consistent all across the country. We can begin with ``dig
    once'' policies, which can pave the way for more broadband
    deployment.
        And the notion behind ``dig once'' is simple. When
    construction crews are building or repairing roads, deploying
    broadband conduit at the same time adds only 1 percent to the
    cost of highway projects. But this small change can have big
    impact, yielding more broadband investment, more universal
    access, and more competition.
        We should also focus on Federal lands, which make up as
    much as one-third of our national real estate. We can expedite
    deployment here by creating an open data inventory of Federal
    infrastructure assets that can help support broadband and
    wireless deployment.
        We also need standard contracts from the GSA to facilitate
    deployment of antenna structures on Federal property. And,
    while we are at it, we should consider extending FCC's shot-
    clock policies for State and local jurisdictions to Federal
    authorities so those who want to deploy infrastructure get a
    timely response.
        Not all of these policies can be acted on by the Commission
    alone, but I believe it is essential that we work with you and
    our Federal colleagues to help put them in place.
        Now, these gritty realities of network deployment may not
    get the glory, but they are important. Of course, it is also
    important that we focus on what we can do with our new
    networks. So now I want to talk about how our networks are used
    for learning.
        When I was growing up, homework required just a paper,
    pencil, and my brother leaving me alone. That is no longer
    true, because today 7 in 10 teachers assign homework that
    requires access to broadband. But FCC data suggests as many as
    one in three households do not subscribe to broadband service.
        Now, if you think about those numbers, where they overlap
    is what I call the homework gap. And if you are a student in a
    household without broadband, now just getting your homework
    done is hard. Applying for a scholarship is challenging. And
    while some students may have access to a smartphone, let me
    submit to you that a phone is just not how you want to research
    and type a paper, apply for jobs, or further your education.
        These students enter the job market with a serious
    handicap. And that is a job market today where half of all jobs
    require some level of digital skills. By the end the decade,
    that number jumps to 77 percent. But the loss here, ultimately,
    is more than individual, because it is a loss to our collective
    human capital and shared economic future that we need to
    address.
        Now, to address it is going to require a mix of public and
    private initiatives, modernizing FCC work to support
    connectivity in low-income households, more WiFi, more
    competition, and better infrastructure. But I think the sooner
    we act, the sooner we bridge the homework gap and give more
    students a fair shot at 21st-century success.
        Now, learning, of course, is just one example of how new
    communications technologies are remaking our world. There are
    others. Just last week, we had a cruel reminder from abroad
    that when the unthinkable occurs our security so often depends
    on connectivity. And in the days and weeks ahead, I know our
    horror will not fade, but our resilience will only grow. And at
    home and abroad, we need to study the mix of public alerts,
    first-responder communications, and social networking that
    facilitated safety. Those lessons can make us stronger, and we
    should submit ourselves to the discipline of learning them.
        Thank you. I look forward to answering any questions.
        [The prepared statement of Ms. Rosenworcel follows:]

       [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Walden. Thank you, Commissioner.
        I will now turn to Commissioner Pai for your opening
    comments. Thanks for being with us. We look forward to your
    testimony.

                     STATEMENT OF THE HON. AJIT PAI

        Mr. Pai. Thank you, sir.
        Chairman Walden, Ranking Member Eshoo, members of the
    subcommittee, thank you for inviting me to testify today. Since
    2012, it has been a pleasure to labor alongside you on these
    issues of critical importance, and I look forward to continuing
    that work in the time to come.
        This morning, I would like to share my perspective on three
    important issues on which members of this subcommittee have
    recently focused, and I will start with broadband deployment.
        Before shovels even hit the dirt, Internet service
    providers must navigate a dizzying array of Federal, state, and
    local obstacles, and this comes at a cost. Every week spent
    negotiating with a municipality for access to local rights of
    way is another week that consumers must wait for a faster
    service. Every dollar spent complying with outdated regulations
    is a dollar that could have been spent delivering digital
    opportunities. I have heard and seen this for myself,
    everywhere from Fargo, North Dakota, to Hammond, Louisiana.
        I applaud the work of this subcommittee on breaking down
    the barriers to broadband infrastructure deployment. On a
    bipartisan basis, you have examined six bills that could boost
    broadband deployment, including the Broadband Conduit
    Deployment Act of 2015. This bill would help ensure that fiber
    accompanies every new highway and, thereby, improve broadband
    across America. This kind of work in the weeds is exactly what
    is needed if we are going to spur private-sector investment.
        Unfortunately, in my view, the FCC has not been as focused
    in promoting the digital revolution. The decision to regulate
    Internet service providers, like Ma Bell of yore, is a case in
    point, but that is not the only problematic decision. The FCC
    has also impeded the IP transition, making it harder for
    carriers to leave behind the fading copper networks of
    yesterday and focus on building next-generation networks.
        It is time for the Commission to change course. We should
    recognize that competition is the best guarantor of consumer
    welfare, certainly more than pervasive regulation. We should
    embrace the IP transition and clear out the regulatory
    underbrush that has slowed down the rollout of new services.
    And we should work with this subcommittee on further breaking
    down the barriers to infrastructure investment.
        Speaking of changing course, I hope the Commission will
    soon abandon its quest to regulate the over-the-top video
    market. So far, we have left this market to evolve on its own,
    and that has been a wise approach, in my opinion. As the
    Digital Media Association, which represents over-the-top
    providers including Apple, Microsoft, and Sony, put it, ``The
    tremendous developments in over-the-top services have emerged
    in an environment that permits innovators to be flexible and
    unencumbered.'' And so the Commission's proposal, as they put
    it, ``could end up backfiring, reducing resources and
    opportunities for these innovators rather than expanding
    them.''
        And, last month, Ranking Member Pallone called on the FCC
    to hit the ``pause'' button on regulating streaming video
    because consumers are beginning to have more programs to choose
    from, more ways to get them, and more options on prices. I
    wholeheartedly agree. And I think that the FCC should embrace
    the paradigm he expressed this morning of putting consumers
    first.
        One last concern I raise for the subcommittee's
    consideration is the agency's enforcement process. I applaud
    the leaders of this subcommittee for asking the GAO last month
    to investigate the management of the FCC's Enforcement Bureau.
        To be blunt, the FCC's enforcement process has gone off the
    rails. The FCC routinely asserts that companies have violated
    never-adopted rules, ignores facts that get in the way of good
    press, and plucks forfeiture amounts out of thin air.
        Things weren't always this way. Under Chairman
    Genachowski's leadership, I only dissented on one enforcement
    action, and that was because I thought the proposed forfeiture
    amount was too low. Under Acting Chairwoman Clyburn's
    leadership, I didn't dissent on any Enforcement Bureau actions,
    not one. But in the last 13 months, I have voted against 10. To
    be clear, I haven't changed my approach. It is the Commission's
    approach that has changed.
        One further problem is that Commissioners themselves can't
    oversee the enforcement process. On June 24, I asked the
    Enforcement Bureau to provide me with a list of their open
    investigations. One day before our last oversight hearing, the
    Chairman's office told me they believed they were a week or two
    away from supplying this information. Five months later, my
    office has followed up on this request no less than 12 separate
    times, and I still haven't received a list of open
    investigations.
        This is unacceptable. As someone nominated by the President
    and accountable to this body and to the American public for
    making FCC policy, I should be able to find out what the FCC,
    including its bureaus, is doing. That I can't indicates that
    the agency's process is broken.
        Chairman Walden, Ranking Member Eshoo, members of the
    subcommittee, thank you once again for holding this hearing. I
    appreciate your concern about areas of interest to the FCC and
    look forward to working with you once again in the time to
    come.
        [The prepared statement of Mr. Pai follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Walden. Thank you, Commissioner Pai. That is very
    disturbing. We will follow up on that.
        Mr. O'Rielly, we are delighted to have you before the
    committee. Commissioner, please go ahead with your opening
    comments.

                 STATEMENT OF THE HON. MICHAEL O'RIELLY

        Mr. O'Rielly. Thank you, Mr. Chairman. Thank you for the
    honor to be before this subcommittee to help further its
    oversight responsibility over the Federal Communications
    Commission.
        During my 2-year tenure, I have tried to be true to my
    principles, look for areas of agreement with my colleagues, and
    move past any disagreements that we may have. This subcommittee
    is right to focus significant attention on the Commission,
    given how our decisions impact the American economy. In
    retrospect, I wish I had pushed for more FCC hearings when I
    advised committee members years ago.
        With your indulgence, I would like to touch on four areas
    to help further the discussion.
        First, a key priority for me is expanding the amount of
    commercial spectrum available and updating infrastructure rules
    to facilitate build-out. While the Spectrum Pipeline Act is a
    step in the right direction, industry experts indicate that 350
    megahertz of licensed spectrum will be needed to meet projected
    demand by the end of the decade. Inevitably, Federal Government
    users must reduce their footprint. And we need to incentivize
    this transition, including instituting Federal Government
    spectrum user fees.
        The Commission's efforts to release more spectrum for
    commercial use include the upcoming broadcast incentive
    auction, a proceeding targeting specific bands above 24
    gigahertz, and examining the best ways to open the 5.9-
    gigahertz band for unlicensed use.
        But no matter how much new spectrum is available,
    substantial infrastructure upgrades are needed. And I have
    discussed a number of ways to promote build-out in my written
    testimony.
        Second, the Commission recently moved to reduce barriers to
    private-sector, not government, foreign investment by proposing
    to extend the common carrier streamlined review process to
    broadcast licensees. This action is not just about increasing
    capital for domestic broadcasters but also about expanding the
    ability of U.S. firms to invest internationally.
        At the same time, fixing the process at the Commission will
    do nothing to alleviate the problems inherent in the opaque and
    lengthy Team Telecom review process. I respectfully request
    this body to consider ways to work across committee
    jurisdiction to craft an oversight function for Team Telecom
    that is grounded in fact and legitimacy rather than the whims
    of any Federal department at any given moment.
        Third, I repeat my call for some badly needed process
    reforms at the Commission. Top of this list is allowing those
    interested in Commission open meeting items to see the exact
    text being proposed to engage in a clear and level playing
    field, not through a dense fog of spin.
        Other reform ideas I have advocated were summarily deferred
    to a process review task force. My office has been actively
    engaged in this process, but suffice it to say that no action
    has occurred yet. The committee's legislation in this area is
    both helpful and needed.
        Lastly, the subcommittee should be concerned about the
    potential for Commission mission creep. Nearly every week, the
    Commission expansively interprets the Communications Act to
    claim broad authority outside that originally contemplated by
    the law. Without proper constraints, it is easy to see this or
    a future Commission trying to micromanage business practices of
    edge providers or online companies.
        The Commission's strong interest in regulating privacy and
    data security is a troubling example with major implications
    for the tech economy and those businesses that transact with
    customers online. The Commission should not freelance in an
    area where it has little expertise. The communications sector
    is much too important to the economy to be saddled with
    experimental regulations from any and all interested agencies.
        So, with that, I thank the chairman and wish to yield back.
        [The prepared statement of Mr. O'Rielly follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Walden. Commissioner O'Rielly, thank you.
        And thanks to all the Commissioners and the Chairman for
    being here and for your comments.
        I am going to start.
        Commissioner Rosenworcel, I noted in your recent testimony
    in the Senate that you supported cost-benefit analysis in the
    FCC's decisionmaking, reflecting what the President has
    proposed in his 2011 Executive order. Is that correct?
        Ms. Rosenworcel. Thank you for the question, Chairman
    Walden.
        I did acknowledge that the President issued an Executive
    order in July of 2011----
        Mr. Walden. Right.
        Ms. Rosenworcel [continuing]. Directing agencies to the
    extent possible to follow cost-benefit analysis, yes.
        Mr. Walden. And you support that?
        Ms. Rosenworcel. I can support an Executive order, yes.
        Mr. Walden. Some I do; some I don't.
        Commissioner Pai, do you support that concept, as well, the
    cost-benefit analysis in the FCC's decisionmaking, reflecting
    the President's order of 2011 for the other agencies?
        Mr. Pai. I do wholeheartedly, Mr. Chairman.
        Mr. Walden. Mr. O'Rielly?
        Mr. O'Rielly. Absolutely, Mr. Chairman.
        Mr. Walden. Commissioner Clyburn?
        Ms. Clyburn. I support the concept.
        Mr. Walden. So, Commissioner Wheeler, it looks----
        Mr. Wheeler. Oh, my goodness.
        Mr. Walden [continuing]. Like you have three to two here
    right now, or three to one. Is this something we can look
    forward to you maybe circulating?
        Mr. Wheeler. Well, I think the first thing that I clearly
    don't need to remind this committee----
        Mr. Walden. You are an independent agency not subject to
    the----
        Mr. Wheeler [continuing]. That we are----
        Mr. Walden [continuing]. President's Executive order.
        Mr. Wheeler [continuing]. Independent----
        Mr. Walden. That is why you can show leadership and----
        Mr. Wheeler. You knew it.
        Mr. Walden. Yes.
        Mr. Wheeler. And it is hard not to believe in cost-benefit
    analysis.
        Mr. Walden. OK.
        Mr. Wheeler. And the purpose of rulemakings is to conduct
    that kind of cost-benefit analysis and to discover, through the
    advocacy process, what are the costs----
        Mr. Walden. All right, but----
        Mr. Wheeler [continuing]. And what are the benefits and
    make a decision on it.
        Mr. Walden. As you know this process, I only have 5
    minutes, so I am going to cut to the chase here.
        Is that something you are willing to put out for the
    Commission to consider in a formal basis, that you will do
    cost-benefit analyses?
        Mr. Wheeler. So, Mr. Chairman, I have not specifically
    looked at the Executive order you referenced. Let me take a
    look at it, and I will be happy to get a response to you.
        Mr. Walden. All right. I will make sure and get it to you.
        This issue that Commissioner Pai raised is obviously
    disturbing to the committee. And he details how this has not
    been an issue in the past, now contends it is an issue. He has
    been trying to get access to what the Enforcement Bureau is
    looking at.
        If I were on the Commission, I would feel that
    responsibility and feel like I had the authority to get that.
    What is the issue there, Chairman?
        Mr. Wheeler. Thank you, Mr. Chairman.
        I think that the issue here is the difference between a law
    enforcement activity and a policy deliberation. And in the law
    enforcement side of things, you are dealing with sensitive
    information, you are dealing with information that can move
    markets, you are dealing with a presumption of innocence, that
    somebody's name gets dragged through the press----
        Mr. Walden. Well, but I guess if----
        Mr. Wheeler [continuing]. But let me----
        Mr. Walden. Because if prior Chairs have been willing to
    share that information, is there a specific----
        Mr. Wheeler. It is not my understanding that that is the
    case, sir, that the law enforcement activities have always
    been----
        Mr. Walden. But are all of these law enforcement, or are
    they just----
        Mr. Wheeler. They are all law enforcement, yes, sir.
        Mr. Walden. All right. Commissioner Pai seems to have a
    disagreement. I am going to try and sort this out.
        Commissioner Pai?
        Mr. Pai. Mr. Chairman, a couple of responses.
        First, I think, fundamentally, every Commissioner has the
    responsibility to understand, because we are accountable for
    the policy decisions that any subordinate bureau makes.
        Secondly, I have a security clearance comparable to any
    member of the Enforcement Bureau. I have been privy to some of
    the most sensitive government operations there are, far more
    sensitive, for example, than deciding whether or not Lyft or
    Uber or somebody else should get a citation from the
    Enforcement Bureau.
        Additionally, I think that it is a question of selective
    prosecution that has been raised. For example, on issues like
    the TCPA, our number-one source of complaints is for violations
    of the Do Not Call Registry. Yet, when we adopted the TCPA
    rules, we only had one Enforcement Bureau citation on the
    books. Why is that?
        Pirate radio. Commissioner O'Rielly has long been beating
    the drum, yet it wasn't a priority till----
        Mr. Walden. All right.
        Mr. Pai [continuing]. Recently. I want to understand why
    that is.
        Mr. Walden. Commissioner O'Rielly, have you had similar
    sort of problems?
        Mr. O'Rielly. I agree with my colleague on a number of
    fronts. And he raised these issues--I have raised them before
    publicly. I have a problem with a number of aspects of our
    Enforcement Bureau, both in the selective prosecution but also
    getting information.
        For instance, we have been trying to work on pirate radio
    for a while. In July, we adopted an item. I have been pushing
    them to do the policy statement that all of us agreed to do. It
    wasn't until last week, when this hearing was announced, or 2
    weeks ago, that we actually finally got some ideas out of the
    Enforcement Bureau in terms of how to address pirate radio.
        So I am troubled by how irresponsive they are to the
    concerns that we have and the activities that we would like to
    see addressed. But then, also, on the prosecution side, deep
    problems in terms of some of the items that we have adopted
    against my wishes.
        Mr. Walden. All right. My time for questions has expired.
    To be continued.
        We turn now to the gentlelady from California, Ms. Eshoo.
        Ms. Eshoo. Thank you, Mr. Chairman.
        Thank you for all of your opening statements.
        There is something that I failed to mention in my opening
    statement, and I think it is important enough to circle back. I
    was talking about new competition and when it is unlikely to
    emerge. An example is the $40-billion-a-year special access
    market. The FCC, I believe, has to act decisively to reform the
    market and stop anticompetitive practices. So I know that you
    are working on it, but I want to underscore it, because this
    isn't something that is small.
        I would also like to recognize Ambassador Verveer, who is
    in the audience.
        And thank you for your extraordinary service to our
    country, Mr. Ambassador. Welcome. You enhance the hearing room
    with your presence. Thank you very much.
        Mr. Walden. Here, here.
        Ms. Eshoo. Now, some questions.
        Commissioner O'Rielly, in March, you called for the
    Commission to proceed with setting rules and policies that
    affirmatively permit foreign ownership of broadcast licensees
    above the 25-percent cap. I know that the proposed rulemaking
    was unanimously adopted last month.
        Can you just quickly state what you think will come out of
    that proposal?
        Mr. O'Rielly. Absolutely.
        Ms. Eshoo. Because I think it is a very important one.
        Mr. O'Rielly. No, I think so, as well. And I agree. And I
    thank the good work of my colleagues, including the Chairman,
    who has been very cooperative on this issue.
        We have worked to try and provide a clear path for foreign
    investment into U.S. broadcast properties from the private
    sector, not the government, not foreign governments. And, in
    doing so, we think we can increase the amount of capital
    available for broadcasters in terms of things that they may
    need to do. That is very important.
        But it also, as I talked about in my testimony, it is also
    about allowing U.S. investors internationally. This has been a
    barrier that is pointed on in a number of----
        Ms. Eshoo. It does raise capital.
        Mr. O'Rielly. Absolutely.
        Ms. Eshoo. It raises capital. So thank you, and thank you
    for working on that.
        Commissioner Rosenworcel, you need to know that the
    chairman leaned over and said, ``What did you do to get so many
    Commissioners to talk about 'dig once'?'' One of these days, it
    is going to pass the Congress. But thank you. And thank you to
    the Chairman and anyone else that--I think that Commissioner
    Clyburn also said something about it.
        You suggested that legislative efforts to increase licensed
    spectrum for the licensed spectrum pipeline should also include
    unlicensed. Obviously, you know that I am a huge proponent of
    unlicensed spectrum. You have called this the WiFi dividend.
        Now, in crafting legislation, how do we ensure that the
    enormous economic value of unlicensed is reflected in CBO's
    scoring?
        I almost didn't ask you this, because you are not a CBO
    person, but you have been on the inside of the government. And
    this is a problem. Anyway, do you want to take a shot at it?
        Ms. Rosenworcel. Thank you for the question, difficult
    though it is.
        Everyone in this room has probably used unlicensed spectrum
    today.
        Ms. Eshoo. Sure.
        Ms. Rosenworcel. Maybe it has been WiFi, your garage-door
    opener, an RFID tag when you were at the store, or a baby
    monitor overnight. Everyone in this room has used it. It is a
    huge part of our daily lives, and it is a huge part of our
    economy, responsible for more than $140 billion in economic
    activity annually.
        Ms. Eshoo. Right.
        Ms. Rosenworcel. So, when we talk about spectrum policy, we
    need to make sure we talk both about licensed and unlicensed.
    And when legislation moves through this committee, including a
    swath of unlicensed is a good thing for the wireless economy.
    It is what I have called the WiFi dividend.
        The challenge, as you acknowledge, comes with the
    Congressional Budget Office, which reviews spectrum legislation
    and has a heavy bias towards spectrum that gets auctioned and
    sold through the FCC's auction process. It strikes me that that
    accounting is outdated because it doesn't account for the $140
    billion in economic activity every year that is dependent on
    unlicensed spectrum.
        And so the idea behind a WiFi dividend is to continue to
    move unlicensed spectrum when licensed legislation comes about.
    And I think, if we do that, we can see the economy grow and the
    Internet of Things really flourish.
        Ms. Eshoo. Yes, that is great. Thank you.
        Mr. Chairman, our Senate colleagues have done a study and
    concluded that consumers pay an average of $231 annually. I
    said that in my opening statement. What are we going to do
    about this?
        I think that section 629 is pretty specific in terms of its
    intention to give consumers a choice in what device they want
    to use. Do you want to comment on this?
        Mr. Wheeler. Well, thank you, Ms. Eshoo.
        Just last week, we closed a comment period in which we were
    asking for responses to the DSTAC report that Mr. Latta had
    referenced, and I think we need to then decide what we do to go
    on from there.
        You know, I was reading section 629 this morning in
    anticipation it might be a topic. And I note that it
    specifically says that the Congress is telling the FCC to
    ``assure,'' quote/unquote, the availability of competitive
    navigation devices.
        So we are going to get the comments in. We had a really
    fulsome DSTAC process. It produced two separate reports. We put
    both of those out for comments. The comments closed last week.
    We will review them and decide what happens next.
        Ms. Eshoo. My time has expired. I have more questions. I
    don't know if we are going to do more than one round.
        Mr. Walden. We will try to.
        Ms. Eshoo. Thank you very much.
        Mr. Walden. We will go now to Mrs. Blackburn next.
        Mrs. Blackburn. Thank you, Mr. Chairman.
        Chairman Wheeler, I want to talk about the Downloadable
    Security Technical Advisory Committee report and the final
    report it issued on development of downloadable security
    systems that would facilitate the delivery of video programming
    over third-party services. And, as you can imagine and as we
    have talked many times, my content producers in Nashville have
    a lot of concern about this.
        And one of the proposals would allow MVPD service to be
    disassembled into individual piece parts that any retail device
    manufacturer could selectively reassemble into a new
    configuration and a new service. And it is similar to the
    AllVid concept considered by the FCC in 2010. Disaggregating
    this MVPD content would also lead third parties to circumvent
    the consumer protections that are built into regulated MVPD
    service but not into AllVid.
        So, with respect to AllVid, I am concerned by ideas that
    are being pushed right now by some individuals and groups that
    would allow third parties to use the content for their own
    service in ways that violate the licensing terms and without
    consent of the content creator.
        And we have a TV marketplace that is producing more video
    content than ever, so why would the government support this
    kind of intervention and theft?
        Mr. Wheeler. Thank you, Ms. Blackburn.
        I think the first reality here is that AllVid was an idea
    from half a dozen years ago. The world has moved on
    substantially since then.
        As I indicated to Ms. Eshoo, the goal of DSTAC was to
    address exactly the question that you raise. And there were
    strong opinions on both sides. And the conclusions, the
    comments on it have just been filed.
        I can assure you that it is no one's goal to thwart the
    security that protects the sanctity of copyrights and that we
    will review the record that has been developed accordingly.
        Mrs. Blackburn. So we can be assured that you all are not
    going to diminish the right of these content creators to
    control their content, correct?
        Mr. Wheeler. We have to protect copyright, madam.
        Mrs. Blackburn. OK.
        Let me move on. I watched some video statements made by
    Jonathan Chambers over at the North Carolina Rural Center's
    Rural Broadband Conference that was held back in September. And
    he did a presentation called ``Build It Anyway.'' And he, in
    this, personally talked about how he personally secured $100
    million, which he referred to as a tiny amount of money, for a
    rural broadband experiment.
        And I want to play that right now.
        [Video shown.]
        Mrs. Blackburn. OK. If we can come back to the questioning.
        Mr. Chairman, were you aware of this presentation and aware
    that he was discussing $100 million as a tiny amount of money?
    Because I can assure you, to my constituents in Tennessee, it
    is not a tiny amount of money.
        Mr. Wheeler. I am unaware, but you just gave me a new piece
    of information. I had not seen that video, nor had I heard a
    report of this presentation.
        Mrs. Blackburn. Are you aware of this supposed experiment?
        Mr. Wheeler. Yes. We all voted on that experiment. And the
    question is, are there alternative ways to get broadband
    delivery in rural areas? We have a crisis in terms of broadband
    in rural America----
        Mrs. Blackburn. The private sector, I think, can probably--
    --
        Mr. Wheeler. The issue is we are currently subsidizing one
    group of people who build fiber. And so the question was,
    ``should there be tests of others who also build fiber, such as
    electric co-ops, and whether they can provide service where it
    is not being provided?'' That is what this test was about.
        Mrs. Blackburn. But to the tune of $100 million?
        Mr. Wheeler. That is what the test is about. Yes, ma'am.
        Mrs. Blackburn. You think that that is worth $100 million?
        Mr. Wheeler. There are huge areas----
        Mrs. Blackburn. OK.
        Mr. Wheeler [continuing]. Of our country that are not being
    served by broadband.
        Mrs. Blackburn. Is this an example of regulatory humility
    with which you approach your job?
        Mr. Wheeler. No, I think our responsibility, I hope, is to
    make sure that we are using funds to expand the reach of
    broadband and to do so creatively.
        Mrs. Blackburn. Mr. Chairman, I have letters from both the
    Governor and the Lieutenant Governor of the State of Tennessee
    I would like to submit for the record about their concerns----
        Mr. Walden. Without objection.
        Mrs. Blackburn [continuing]. With overriding muni
    broadband.
        [The information appears at the conclusion of the hearing.]
        Mrs. Blackburn. I yield back.
        Mr. Walden. The gentlelady yields back.
        I recognize the ranking member of the full committee, Mr.
    Pallone, for 5 minutes.
        Mr. Pallone. Thank you, Mr. Chairman.
        I mentioned earlier that, yesterday, I introduced the
    Securing Access to Networks in Disasters, or SANDy, Act. And
    the SANDy Act is a result of an examination of what went wrong
    during Hurricane Sandy 3 years ago and incorporates some
    lessons learned.
        I wanted to ask initially, Commissioner Rosenworcel, I know
    you visited New Jersey shortly after Sandy struck, and, based
    on your experiences, do you have any suggestions for
    legislative steps we can take to help consumers during
    emergencies and disasters?
        Ms. Rosenworcel. Thank you, Congressman Pallone.
        I did in fact visit the New Jersey shore right after
    Hurricane Sandy hit, and I won't soon forget what I saw: the
    coast ripped apart by wind and rain and the people who lived
    there and their stamina and fortitude and desire to rebuild. I
    know that our communications networks worked during that storm,
    but not all of them, and on the New Jersey coast, far too few
    of them.
        So I think your SANDy legislation is a terrific start to
    force us to look at network resiliency in a new way, to come up
    with master contacts for our Nation's 911 call centers, and
    also to adjust the Stafford Act to reflect a priority of
    communications service providers in crisis.
        Mr. Pallone. Thank you.
        Let me ask Chairman Wheeler: A second component of this
    issue involves network resiliency. And, as you know, over 40
    percent of the wireless towers went out in New Jersey during
    Sandy. What is the status of the FCC's proceeding on network
    resiliency?
        Mr. Wheeler. So we have had a 911 network resiliency
    proceeding which we completed, and we continue to work on the
    other resiliency issues. I think that your legislation is
    helping to focus on these issues and will provide some more
    responsibilities to follow through on.
        Mr. Pallone. All right. I am going to follow up with you
    about some of this after the hearing----
        Mr. Wheeler. Great.
        Mr. Pallone [continuing]. If that is OK.
        Let me ask you, Chairman Wheeler, about the incentive
    auction. I know that running a successful incentive auction
    next year is one of your top priorities, and that----
        Mr. Wheeler. Yes, sir.
        Mr. Pallone [continuing]. Is one of mine, as well. And I
    have heard some concerns that the software you are using to run
    the auction may not be ready in time. So I just wanted to give
    you a chance to respond.
        Two questions. When do you expect the incentive auction
    software package to be finalized? And do you plan to give the
    impacted industries practice rounds with the software before
    the auction starts?
        Mr. Wheeler. Thank you very much, Mr. Pallone.
        The software packages are being developed over time, and
    are virtually all completed at this point. They are being run
    through an internal red team process; an outside, third-party,
    break-it process, if you will.
        And then, specifically to your question, we will be having
    trials and mock auctions, where it will be tested ultimately by
    those who are going to use it.
        Mr. Pallone. OK.
        Let me just ask you about pirate radio. I know you have
    been fairly successful lately in finding bipartisan support on
    a number of things. And I think an issue that you discussed
    that should have bipartisan support are the problems with the
    proliferation of illegal pirate radio stations. You mentioned
    it in your statement.
        Do you think that there are any changes in the law that
    could help the FCC better enforce against illegal pirate radio
    stations?
        Mr. Wheeler. Yes, sir. This has been an effort that
    Commissioner O'Rielly and I have both been working on, and he
    has particularly been the cattle prod on the activity.
        But, as I said in my statement, it is Whack-a-Mole right
    now. They pop up, we jump on them, they pop up, we jump on
    them, but they just move to the next place.
        Landlords turn a blind eye to this. If there was a way that
    we could go and say to the landlords, ``Excuse me, you have
    some liability in this decision, as well.'' They just see it as
    income--``Hey, I have somebody that is going to start paying me
    money for this space. I will rent it out to them.'' If they
    understood that there were consequences from that kind of
    enabling and illegal act, I think that would be very helpful.
        Mr. Pallone. OK.
        Did you want to respond, Mr. O'Rielly?
        Mr. O'Rielly. No. I agree with the Chairman's comments. I
    think I want to be careful exactly on approaching landlords. We
    would like to have an education process, as well. Many may not
    be familiar. I do not want to expose landlords in a broad
    category. I want to be careful when we do it.
        But it is not just landlords. It is political campaigns
    that advertise on these illegal pirate stations. And there are
    a lot of other--concert promoters. There are things that we
    need to educate the community that should not be participating
    with these pirate radios. They are illegal, and we should go
    after all the mechanisms to eliminate them.
        Mr. Pallone. All right. Thanks a lot.
        Thank you, Mr. Chairman.
        Mr. Walden. We will now turn to the gentleman from Texas,
    Mr. Barton, for 5 minutes.
        Mr. Barton. Well, thank you, Mr. Chairman.
        I apologize to the Commission for not being here for their
    opening statements. As you know, we have the Health
    subcommittee, and they are meeting at 10, so we always have to
    go back and forth. So I missed their statement, but I am
    appreciative of the Commission being here.
        Those of you that have attended hearings like this in the
    past, my normal routine would be to start asking the Chairman
    and the other members a series of questions about low-power
    television. I am going to submit those for the record, so I am
    not going to disappoint you, but we will put them in the
    written part of the record.
        What I am going to do is kind of go off script--yes, and
    Greg says, ``Uh-oh''--but in a positive way, I hope,
    bipartisan.
        We just had this terrible attack in Paris, and hundreds of
    people were killed. We need to do something about it. ISIS and
    the terrorist networks can't beat us militarily, but they are
    really trying to use the Internet and all of the social media
    to try to intimidate and beat us psychologically.
        My question--and I will start with the Chairman, but then
    each of the members of the Commission: Isn't there something we
    can do under existing law to shut those Internet sites down?
    And I know they pop up like weeds, but, once they do pop up,
    shut them down, and then turn the Internet addresses over to
    the appropriate law enforcement agencies to try to track them
    down?
        I would think that, even in an open society, when there is
    a clear threat, they have declared war against us, our way of
    life, they have threatened to attack this very city that our
    Capitol is in, that we could do something about the Internet
    social-media side of the equation.
        So I would start with the Chairman and then anybody else
    who wishes to comment.
        Mr. Wheeler. Thank you, Mr. Barton.
        As you have done, we cannot underestimate the challenge
    here. I am not sure that our authority extends to picking and
    choosing among Web sites, but I do think there are specific
    things that we can do. As you----
        Mr. Barton. Well, do we need to, on a bipartisan basis,
    give additional authority to shut some sites down?
        Mr. Wheeler. One of the issues here is the question of
    ``What is a lawful intercept?'' is something that the Congress
    can define. You did it in CALEA. Things have moved on since
    then. You know, you read in the press that they were using
    PlayStation 4 games to communicate, which is outside the scope
    of anything ever considered in CALEA. So there are probably
    opportunities to update the lawful intercept concept.
        I think there is also a question about the security of our
    networks. There have been 17 fiber cuts in the Bay Area in the
    last few months mysteriously happening. There were two fiber
    cuts yesterday, not in the Bay Area but elsewhere in the
    country. We need to have some kind of a big-data capability of
    determining what is happening to our network out there. Because
    it is not just people getting on the network; it is, perhaps,
    people doing things to the network.
        We have the only reporting system in the Nation that we
    run, called the Network Outage Reporting System, NORS. We don't
    have the ability to use that to go for big data, to have big-
    data analysis. It is barely holding together with baling wire
    and glue because it is using ancient technology. We have been
    asking for appropriations to upgrade that.
        I know the appropriation process is still underway, and I
    know it is not this committee, but this experience has called
    out the importance of network security. And if we can't connect
    the dots--you know, after 9/11, we kept hearing about ``We
    couldn't connect the dots, we couldn't connect the dots.'' We
    have the ability inside our systems to use big data to connect
    the dots, but we don't have----
        Mr. Barton. Well, my time----
        Mr. Wheeler [continuing]. The capacity to do it.
        Mr. Barton [continuing]. Is about to expire. I would assume
    it is a ``yes'' answer, that the Commission will work with the
    committee if we need to update our laws to do so.
        Mr. Wheeler. It is a capital ``Yes,'' sir.
        Mr. Barton. OK.
        Is there anybody else who wants to comment on that before--
    my time just expired.
        Ms. Eshoo. Well, I want to thank you for raising this. And
    I know that the FBI, relative to the cuts in the Bay Area, have
    said that they need to deal with HPSCI, the House Permanent
    Select Committee on Intelligence. And so we will just----
        Mr. Barton. Well, it is a clear and present danger.
        Ms. Eshoo. Yes. Of course it is.
        Mr. Barton. They have declared war against us.
        Ms. Eshoo. And I don't think any of this is coincidental
    either.
        Mr. Barton. And they are using the Internet in an extremely
    offensive, inappropriate----
        Ms. Eshoo. Effective way.
        Mr. Barton [continuing]. Way against us. And we ought to be
    able to make it, at a minimum, much more difficult and,
    hopefully, absolutely shut it down.
        With that, Mr. Chairman, I would yield back.
        But I will get you my questions on low-power TV.
        Mr. Wheeler. I look forward to them, sir.
        Mr. Walden. The gentleman yields back the balance of his
    time.
        The chair now recognizes the gentleman from Pennsylvania,
    Mr. Doyle.
        Mr. Doyle. Thank you, Mr. Chairman.
        And I just want to say to Mr. Barton, I wholeheartedly
    agree with what you said, too, and hopefully we can work on
    that.
        Chairman Wheeler, at the risk of sounding like a broken
    record, I want to talk to you a little bit about special
    access.
        Mr. Wheeler. Yes, sir.
        Mr. Doyle. First, I want to thank you for the Commission's
    continued work on special access. And while I was somewhat
    concerned that the comment deadlines were once again extended,
    I want to applaud the Commission for beginning its
    investigation into tariff rates and conditions in these
    markets. I believe that the Commission has worked hard and
    diligently on this proceeding. I just wish you would work
    faster. However, I know some of my colleagues on the other side
    of the aisle have taken issue with this proceeding.
        Mr. Chairman, I have two questions.
        First, if ILECs are using their market position to charge
    anticompetitive rates to competitors, jacking up prices for
    competing services, or driving competitors out of business, do
    consumers benefit from that?
        And, secondly, does investment in broadband infrastructure
    increase or decrease in competitive markets?
        Mr. Wheeler. Well, I think the answer to the first is
    ``no,'' and the answer is ``increase'' in the second.
        You know, one of the things that gets lost in this issue is
    we call it ``special access.'' Boy, there is a term that
    doesn't say anything. What we are talking about is services
    that are necessary for competition. We ought to start calling
    these ``competitive services.''
        Because you can't have cell densification, which makes
    wireless networks work better, without backhaul, which requires
    this special access. You can't have the Internet of Things in
    5G built out. It is going to do nothing but expand the need for
    this, let alone the kind of competitive services you were
    talking about that increases service opportunity by competitive
    providers and lowers costs.
        So I think we ought to call it what it is. This is services
    that are essential for competition.
        Mr. Doyle. Thank you, Mr. Chairman.
        Mr. Chairman, I also want to ask you, the Commission
    recently decided, in evaluating spectrum transitions, to take a
    closer look at deals that involve low-band spectrum. And the
    FCC recognized the unique value of that spectrum and the fact
    that there is already significant concentration of that
    spectrum among just a few carriers.
        You have now evaluated several transactions in which you
    have conducted that enhanced review, but in each case you still
    decided to allow further concentration of low-band spectrum.
    Just last week, the Commission approved a transaction where the
    buyer exceeded the low-band screen established by the
    Commission.
        My question is, what is the point of creating a mechanism
    for enhanced review if the Commission is not prepared to use
    it?
        Mr. Wheeler. Well, thank you, Congressman.
        I think there are two parts to that. One is you always want
    to have this enhanced review because that, in itself, is
    putting a stake in the ground, if you will.
        Secondly, it is a review. And so the question becomes ``Is
    there a legitimate application that overcomes that stake in the
    ground?'' In this particular instance, which involves some
    rural broadband, some rural spectrum for AT&T, the Commission
    reached the decision that, yes, on the merits, this would be
    enhancing to service to consumers.
        Mr. Doyle. Thank you.
        Mr. Chairman, let me ask you, on privacy, I am concerned
    about some of the ongoing reports we are seeing that ISPs are
    tracking consumers online by using tracking headers and other
    types of unsecure technologies that can endanger consumer
    privacy and user security. Third-party companies are already
    publicly claiming that they are using these super-cookies to
    track users online. Mr. Chairman, I just want to urge the
    Commission to take action and rein in these harmful practices.
        And, finally, on set-top boxes, the DSTAC recently released
    its report on new proposals that would allow consumers to buy
    and use third-party devices for video programming. I believe
    the future of this technology is over-the-top services. I
    encourage the Commission to continue working on this issue.
    Pay-TV subscribers should not have to suffer exorbitant rental
    fees for poorly designed and produced equipment. And I would
    urge the Commission to continue your work on these proceedings.
        Mr. Chairman, thank you and all of the Commission for being
    here before us today. I know we see you frequently, and we
    appreciate your input and the work that you are doing on the
    Commission.
        I yield back.
        Mr. Walden. The gentleman yields back the balance of his
    time.
        The chair now recognizes the vice chair of the subcommittee
    on Communications and Technology, the gentleman from Ohio, Mr.
    Latta.
        Mr. Latta. Thank you very much, Mr. Chairman, for yielding.
        And, again, to the Commissioners for being here, thanks
    very much.
        If I could go back to a question the chairman had asked a
    little bit earlier to Commissioners Clyburn and Rosenworcel.
        Do you have access to the Enforcement Bureau's work?
        Ms. Clyburn. Every 2 to 3 weeks, I have meetings with the
    Enforcement Bureau. We go through items, you can call them hot
    topics, so to speak. Some of them are extremely hot. You know,
    some are at, I guess, the genesis of some of the conversations
    here today.
        So I have never felt that there was any information that I
    requested or that I needed to know what is going on in the
    bureau, know what's going on in the ecosystem, and make a
    decision that might come up to us. I have never felt----
        Mr. Latta. OK. Let me ask this, though. You say you have a
    meeting every couple of weeks. How current is that information
    from the Enforcement Bureau? Is it something that has happened
    in the last 2 weeks, or is it something that has gone on for
    weeks and months beforehand?
        Ms. Clyburn. It depends on the status of the item, so it is
    just all of the above.
        Mr. Latta. Could I ask a follow-up on that, then? When you
    say it is the status of the item, how many would be older type
    of enforcement work?
        Ms. Clyburn. If I had to handicap it based on the last
    three or four meetings, sort of 50/50. Again, an item might get
    teed up, and then you will get a status----
        Mr. Latta. So some of them have been going on for a lot
    longer before you ever find out about it.
        Ms. Clyburn. Naturally. And when you talk about NALs,
    notice of apparent liability, and process, you get updates. And
    these often take quite a bit of time, because, again, there is
    due process to the party that might have the NAL. So it can be
    a mixture there.
        Mr. Latta. OK.
        Let me ask Commissioner Rosenworcel, what is your response
    to that?
        Ms. Rosenworcel. My access is virtually the same as what
    Commissioner Clyburn just described.
        Mr. Latta. Commissioner Pai?
        Mr. Pai. So the conversation thus far has focused on things
    that are circulated to the Commissioners for a vote--a notice
    of apparent liability, for instance.
        What I am talking about is a list of open investigations,
    things that the Enforcement Bureau is doing without our
    knowledge that is not ultimately, perhaps, going to be
    presented to us for a vote.
        Quite often, we hear about these things only when they
    reach the press. And, for example, the recent Hilton letter of
    inquiry is something that I learned about and my staff learned
    about because of press reports.
        And it seems to me that it is not too much to ask for the
    people who are tasked by this body with setting communications
    policy to understand what it is----
        Mr. Latta. Let me----
        Mr. Pai. The Enforcement Bureau is not an independent
    agency with----
        Mr. Latta. Yes, let me interrupt, if I could. When you say
    you got something from a press report, how long had that
    Enforcement Bureau's work been going on prior to you even
    seeing it in the newspaper?
        Mr. Pai. I am not sure how long it had been going on, but
    it was issued contemporaneously with some other enforcement
    actions we took that very day.
        Mr. Latta. OK.
        If I could ask Commissioner O'Rielly?
        Mr. O'Rielly. I have similar problems. But can I give you
    an example that just happened yesterday? We came out with an
    FTC-FCC memorandum of understanding. I had an opportunity to
    talk to some folks at the FTC. They were notified of it on last
    Thursday. I learned of it yesterday morning. So, I mean, it is
    just a lack of sharing.
        Mr. Latta. OK. Thank you.
        Commissioner Pai, if I could go on to another question for
    you. In June, Congressman Green and I sent a letter to Chairman
    Wheeler stating our concerns with the direction of the DSTAC
    and urged the Commissioner to follow the clear statutory
    language set forth in STELA and ensure that the DSTAC inquiry
    and report do not go beyond the bounds of the statute. And,
    unfortunately, changes were not made to DSTAC, which was unable
    to reach a consensus on recommendations for downloadable
    security solutions for set-top boxes.
        DSTAC produced a report with two recommendations, one that
    would rely on apps, and one referred to the AllVid. And, again,
    the gentlelady from Tennessee had asked some questions
    questioning to the Commissioner on this, or the Chairman of the
    Commission.
        If I could ask you, Commissioner Pai, on the app, if apps
    are already prevalent in the market and used on smartphones,
    smart TVs, and Apple TVs, et cetera, why isn't the FCC keeping
    focused on consumer demands and preferences rather than looking
    backward to the AllVid approach?
        Also, are you concerned that such a strict technological
    mandate, which would take years to develop, would be obsolete
    by the time it is even implemented?
        Mr. Pai. Thank you for the question, Congressman. And I
    understand that is a widespread concern. I think that here
    regulatory humility is called for, not just because it is
    imperative that the FCC hew strictly to the mandate that was
    set forth in the law but also because, as you pointed out and
    have pointed out various times before, this marketplace is
    changing rapidly, and so any FCC intervention could have
    unintended consequences.
        So, therefore, I don't think it is appropriate for us to
    issue technological mandates or otherwise adopt proposals that
    could frustrate innovation, that could allow for the theft of
    content, that could otherwise stand in the way of consumer
    benefits.
        Mr. Latta. OK.
        Well, thank you. My time has expired.
        And, Mr. Chairman, if I could ask unanimous consent to
    enter the letter from Congressman Green and myself----
        Mr. Walden. Without objection.
        Mr. Latta [continuing]. Into the record.
        [The information appears at the conclusion of the hearing.]
        Mr. Walden. I appreciate that.
        We will now go to Mr. Loebsack from Iowa.
        Mr. Loebsack. Thank you, Mr. Chair. Thanks for having this
    hearing.
        It is good that all five of you are here today. I really
    appreciate your presence and responding to questions.
        Before I ask my question about USF, which I ask almost
    every time we have somebody here at least, I do want to mention
    again that I think that Mr. Barton raised a very serious issue
    here, not necessarily what we can do with the Internet and
    restricting it, whatever the case may be, but I think bigger
    questions beyond that even.
        And, Chairman Wheeler, I was very happy to hear you--or not
    happy, but I appreciate the fact that you had some information
    on fiber cuts.
        I was on the Armed Services Committee for 8 years before I
    got on this committee. Traveled overseas to zones of conflict
    often. I guess it heightens my concern, obviously, about what
    happened in Paris. We all are concerned about that. But then we
    bring it home here to our infrastructure in the United States.
    And the Internet fiber, all of this is part of our
    infrastructure.
        It is absolutely essential that we know where all of this
    is so that we can protect it and so we can make sure that we
    can prevent an attack on that part of our infrastructure. I
    think it is really critical. So thank you for addressing that.
    And I am sure we are going to go forward with this, in
    cooperation with you folks, to make sure that we can prevent
    those kinds of attacks from happening on that very important
    part of our infrastructure.
        I do want to ask about universal service. You all know--I
    think I have mentioned this a number of times--that I represent
    a very rural district. When I first got on this committee
    earlier this year, I went to all 24 counties, and I talked to
    folks about rural broadband and how important it is for the
    economy, for education, for health care, for farmers, economic
    development, on and on and on.
        And folks are very frustrated in my district, especially
    when it comes to the USF. And so I kind of want to know what
    the status is, if we can have a status update for fixing the
    standalone broadband problem that ties the Universal Service
    Fund to voice service, denies support for broadband-only
    service in areas served by smaller rural carriers.
        We have gotten bipartisan support to do something about the
    USF and to reform it so that we really can bring that service
    to folks in theses rural areas. It is bipartisan.
        And so I would like to get a little update, if I could,
    from you, Chairman Wheeler, about where we are on that. And I
    promised folks last week when I was talking to them that I
    would ask you directly about that.
        Mr. Wheeler. Thank you, Congressman.
        Yes, this is a bipartisan effort. We have a bipartisan
    working group of three of us up here--Commissioner O'Rielly,
    Commissioner Clyburn, and myself--who are working on a rate-of-
    return carrier reform package that we hope to have on the floor
    of the Commission next month.
        Mr. Loebsack. Good.
        Mr. Wheeler. A lot of people have focused on a December
    date that we had talked about in a Senate hearing. We are not
    going to be controlled by the calendar, but we want to get this
    done quickly.
        The key issue here is whether or not we are going to make
    sure that the money is spent for the expansion of broadband.
    Because that is what your consumers want. They say, ``How do I
    get broadband further out into my areas?''
        There are some proposals that are put forth that are called
    fixes to this that say, ``OK, we will send the money out, but
    there is no requirement that it actually expand broadband.''
        Mr. Loebsack. That is right.
        Mr. Wheeler. And our group, the three of us, are working to
    say, ``How do we make sure that we have money that is going out
    to rural areas that will result in expansion of broadband
    service?''
        Mr. Loebsack. I appreciate that.
        Did you want to say something, as well, Commissioner
    Rosenworcel?
        Ms. Rosenworcel. Oh, sure.
        Mr. Loebsack. Or Commissioner Clyburn?
        Ms. Clyburn. We get mixed up all the time.
        Mr. Loebsack. Sorry about that.
        Ms. Clyburn. One of the reasons why I am so excited about
    working with this group is, I asked myself a question: Is there
    a mechanism in place when it comes to these carriers that will
    tell us how many households are connected? And when I could not
    answer that question, I said: We have to do something beyond
    modernizing this program. We need a way to track to make sure
    that we are on target, to make sure that the moneys are going
    to close the broadband gap.
        And so this is why it is so important for us to make sure
    that each dollar we spend is to enable broadband deployment.
        Mr. Loebsack. Thank you.
        Ms. Clyburn. And I am proud to work with these men to see
    that that happens.
        Mr. Loebsack. Thanks to all of you. I really appreciate it.
        I am near the end of my time. I do want to submit, however,
    a question for the record on video relay service, if I may, Mr.
    Chair. I would like to be able to submit that question, as
    well.
        Thank you so much. I yield back.
        Mr. Latta [presiding]. The gentleman yields back.
        The chair now recognizes the gentleman from Illinois, the
    chairman of the Subcommittee on Environment and the Economy,
    for 5 minutes.
        Mr. Shimkus. Thank you, Mr. Chairman.
        Hey, Loebsack, how many counties?
        Mr. Loebsack. Twenty-four.
        Mr. Shimkus. I have 33. So I just say ``ditto'' to his
    comments, and I don't have to go down that route.
        But I would also--the good response, what popped in her
    head was the failure of broadband stimulus to do a lot of what
    we want it to do in rural America. And it was the overbuilding
    of competitive areas. And just on the record, being here for a
    while helps you remember some of the old stories, and we lost a
    great opportunity there.
        Chairman, you mentioned clarity, consistency, completion?
        Mr. Wheeler. Yes.
        Mr. Shimkus. I like that. I am starting to wrap my mind
    around reliability, affordable, and sustainable. I think those
    are also good goals to reach in a lot of different areas. And I
    think it highlights telecommunication in the next era for all
    Americans, again, dealing with the rural changes.
        But that goes to an issue that we talked about the last
    time, I think, when the full Commission was here. We still have
    a terrible problem with dropped calls in rural America. And I
    talked to the association this morning, said I would raise it.
        I think the last answer was, ``We have the rules to enforce
    it.'' I think our folks don't see it that way. Or my point is,
    they are still having a problem, and it is not fixed.
        Do you want to comment briefly on that?
        Mr. Wheeler. Thank you. Thank you, Mr. Shimkus.
        Mr. Shimkus. Briefly.
        Mr. Wheeler. I mean, there are several things. One--I will
    be--watch how fast.
        One is that we did pass a rule that false rings, which is
    what was going on, are no longer allowed.
        Secondly, we heard a lot about enforcement today. We have
    moved against three major carriers who were allowing this to
    happen. We just finished with Verizon, for instance, with a $2
    million fine and a requirement that they do $3 million to fix
    the situation because they knew it was going on, and they did
    nothing about it.
        So, yes, sir, we are trying to be aggressive on this front.
        Mr. Shimkus. And let me have a followup. What is the status
    of this data collection effort? And will this information be
    made public? And, if not, why?
        Mr. Wheeler. We are----
        Mr. Shimkus. On the call completion question.
        Mr. Wheeler. On the call completion, we are completing
    that. And to the extent that there is nonconfidential data, it
    will be on the record.
        Mr. Shimkus. OK. Thank you.
        I want to talk also about--because the ranking member of
    the subcommittee and I, we do the first responders. And Ranking
    Member Pallone talked about his proposal. FirstNet has to get
    its act together. FirstNet came to see us. I think they are
    making better strides. But they are on the hook if we have
    another major event, and we have not moved aggressively.
        Now, in discussions with me, they say they now understand
    that they have to, in essence, contract with people who build
    out networks, which was what we were trying to say when we
    fought on the legislation to begin with.
        But shame on us and shame on FirstNet and shame on the
    Commission if we have another event and we cannot communicate.
    So we need to all have our shoulders at the wheel and do what
    we can to push this.
        Commissioner O'Rielly?
        Mr. O'Rielly. Can I only say that, when we were working on
    the statute I was working on behalf of a number of Senators,
    the structure that is now outlined is something I disagreed
    with. And the Commission actually doesn't have a great role in
    FirstNet. NTIA, at the Department of Commerce, has a greater
    role in its oversight function. I lost that debate, and now we
    have a process exactly playing out how I thought it might.
        Mr. Shimkus. I think I lost some of the debate during that
    discussion, too, and I am not sure it is appropriately placed.
    And I don't think we have a--I am just concerned. I am glad
    they came to visit with me. But the public is not going to say,
    ``Oh, it is NTIA,'' right?
        Mr. O'Rielly. True.
        Mr. Shimkus. They are going to say FCC, they are going to
    say Members of Congress and the executive branch.
        Mr. O'Rielly. No, I tried to provide authority to the FCC
    through that process. I just lost that discussion. So if
    Congress wishes to give us more authority, we would be happy to
    have more involvement.
        Mr. Shimkus. Thank you.
        And let me just continue with you. That memo you received,
    you got it yesterday?
        Mr. O'Rielly. Yes, sir.
        Mr. Shimkus. You said the FTC had it Thursday?
        Mr. O'Rielly. Yes, sir.
        Mr. Shimkus. Commissioner Pai, when did you get that memo?
        Mr. Pai. I saw it on the Web site yesterday.
        Mr. Shimkus. Commissioner Rosenworcel?
        Ms. Rosenworcel. Yesterday.
        Mr. Shimkus. Commissioner Clyburn?
        Ms. Clyburn. The same.
        Mr. Shimkus. Chairman Wheeler, do you want to respond?
        Mr. Wheeler. I have been working on it for 18 months. The
    reality here is that it was signed yesterday, it became
    effective yesterday, and that----
        Mr. Shimkus. But you understand the problem. This is
    illustrative of this debate about communicating. And I know we
    have, you know, three to two, and I know Democrats have the
    majority, but I would hope the Commissioners are kind of one
    big, happy family and work together to move telecommunications
    processes. Just like we do on this committee, right?
        So I think it is just a little----
        Ms. Eshoo. Thank you, Brother Shimkus.
        Mr. Shimkus [continuing]. Illustrative, and everybody
    should have the information when everyone has the information.
        And I yield back.
        Mr. Latta. The gentleman's time has expired, and he yields
    back.
        The chair now recognizes the gentlelady from California for
    5 minutes.
        Ms. Matsui. Thank you, Mr. Chairman.
        Chairman Wheeler, Congress tasked the FCC with balancing
    many priorities in the incentive auction, including protecting
    access to local broadcasting.
        Now, during the last few weeks, I had a chance to meet with
    many of our Sacramento broadcasters. They work hard to keep my
    constituents informed. My local broadcasters have also told me
    that they are invested in the success of the incentive auction.
        I believe the incentive auction can clear the beachfront
    spectrum to fuel our wireless economy while making sure
    Sacramentans and consumers across the Nation still get the
    local news and information that they need.
        My local broadcasters also brought up the concern that they
    could be at risk of losing their license after the auction if
    they aren't able to transition to a new channel assignment
    within 39 months. I know how critical it is to get the spectrum
    into the market, but we need to make sure that this transition
    doesn't leave TV viewers in the dark.
        Chairman Wheeler, my question is: How can the FCC, number
    one, make sure broadcasters successfully make this transition
    after the auction? And two, what is the FCC's plan if
    broadcasters can't meet the FCC's deadline?
        Mr. Wheeler. Thank you very much, Ms. Matsui.
        I totally agree on the importance of local community
    broadcasting and why it has to remain after the auction.
        Here is how it works. We had 36 months that the statute
    said before you have to move off after getting money. Then we
    put 3 months in for construction permits, which is how you got
    to 39 months.
        Now, the interesting thing is that the National Association
    of Broadcasters, in our proceedings, said, ``Oh, we only need
    30 months.'' But, be that as it may, what we would do in this
    kind of a situation that you outlined is to have an extension.
    I mean, there is a 6-month extension at least that you can get
    on this that we will be able to work through.
        This is not a drop-off-the-edge-of-the-table situation for
    anybody. As we see that things are approaching the edge of the
    table, there are solutions that can be taken.
        But at the same point in time, those who are bidding on
    spectrum need to know that there is some certainty that they
    are going to get it, or else it doesn't have any value to them.
    And so we look at 39 months, we look at the extension, we look
    at certainty, and I think we can work it out.
        Ms. Matsui. So you will balance this out and work with
    them.
        Mr. Wheeler. I think we can work with them, yes.
        Ms. Matsui. OK, great. I can assure my locals then.
        Mr. Wheeler. Yes, ma'am.
        Ms. Matsui. Thank you.
        Commissioner Rosenworcel, you have spoken about the need
    for smart spectrum policies so that the United States can
    continue to lead the world in 5G. I know the FCC has taken some
    recent steps to look at opening up higher-frequency spectrum
    bands for next-generation mobile services. Congress has also
    acted. The Bipartisan Budget Act included important provisions.
        Now, Commissioner Rosenworcel, what more can the FCC do to
    identify new spectrum opportunities? What more can Congress do?
        Ms. Rosenworcel. Thank you, Congresswoman Matsui, for the
    question.
        Today, as you probably know, the bulk of our spectrum
    activity takes place at 3 gigahertz or below, but, going
    forward, we are going to look way, way up there. And when we
    do, if we combine really stratospheric frequencies with dense
    networks of small cells, we are going to develop wireless
    services that go further and faster than ever before.
        It is absolutely imperative that the FCC lead when we deal
    with this issue, because the rest of the world is starting to
    look at high-band spectrum and trying to find ways to deploy.
    We have a rulemaking, and it is important that we conclude that
    rulemaking and identify bands where we can proceed.
        Ms. Matsui. OK. Great.
        Chairman Wheeler, you have highlighted the FCC's work on a
    spectrum above 24 gigahertz as critical for 5G. I hope the FCC
    will move forward expeditiously so that we can create a climate
    for American leadership in 5G.
        And I know this is really important. We just ought to
    reiterate this. When do you expect to issue final rules for
    this important proceeding?
        Mr. Wheeler. Thank you, Congresswoman.
        As Commissioner Rosenworcel just indicated, we just
    developed in this proposed rulemaking for 28 GHz, 37 GHz, and
    39 GHz bands, as well as for 64 GHz to 71 GHz for unlicensed
    purposes. And we did that in a timely manner so that we could
    go to the World Radio Conference in Geneva, which is being held
    right now, and get a leg up, if you will, on advocating our
    position to the world.
        Ms. Matsui. OK.
        Mr. Wheeler. So that was step one. We will close this
    rulemaking by the summer, clearly. And I have also committed to
    my colleagues that we will also open a new rulemaking on
    additional spectrum up in the higher bands.
        Ms. Matsui. OK. Good.
        Well, thank you very much.
        And I know my time is up. I yield back.
        Mr. Latta. Thank you.
        The gentlelady's time has expired, and she yields back.
        The gentleman from New Jersey is recognized for 5 minutes.
        Mr. Lance. Thank you, Mr. Chairman.
        Good morning to the panel.
        Commissioner O'Rielly, I believe there is a good deal of
    room for criticism of the net-neutrality order. And I ask you
    what message you believe this sends internationally when our
    government asserts such authority over the Internet. Are you at
    all concerned that other nations, including some repressive
    regimes, could get the wrong idea about America's commitment to
    free speech and free expression online?
        Mr. O'Rielly. Yes, sir. Thank you for the question.
        I experienced this when I was in Barcelona recently, when
    we had an opportunity to talk to some of our European
    colleagues about what they were planning to do and what
    activities the United States signals were sending to their
    activities. And if you see what the European Union has done
    recently on the issue of net neutrality, it is different than
    what the United States has done and is actually a step back, I
    would say, from some of the extensive steps that we have taken
    and problematic steps that we have taken.
        So I am troubled by what message it sends internationally,
    how far and how wide the United States has moved through the
    net-neutrality proceeding at the Commission. I think it is the
    wrong signal internationally. Thankfully, some of the other
    nations are looking at it a little differently, but it is very
    problematic going forward.
        Mr. Lance. Thank you.
        Mr. Pai, do you have an opinion on that?
        Mr. Pai. I would agree with what my colleague said. And I
    also have had the opportunity to speak with counterparts from
    South Asia to South America who have expressed amazement that,
    having built the Internet economy that is the envy the world,
    the U.S. would put that at risk with a regulatory scheme that
    creates more uncertainty and impedes future broadband
    deployment.
        Mr. Lance. Thank you.
        Chairman Wheeler, you stated your intent to commence a
    rulemaking to promulgate rules, quote, to clarify the FCC's
    expanded privacy authority under the new Internet rules and
    that you would hope that this would be forthcoming this fall.
        Could you please update us on that, given the timeframe?
        Mr. Wheeler. We have missed fall, Mr. Lance. And----
        Mr. Lance. Congress misses deadlines all the time, so----
        Mr. Wheeler. And it is, I think, because of the
    significance of the issue. We have long had responsibility for
    privacy issues. And how that maps over into the IP world is
    something that I hope we will be able to begin to surface in
    proposals early next year.
        Mr. Lance. Thank you.
        Are there other members--Mr. Pai?
        Mr. Pai. Two aspects of that.
        First, the agency's decision divested the Federal Trade
    Commission of jurisdiction, and they are the agency with
    longstanding expertise as well as statutory authority over this
    area.
        In the meantime, unless and until the FCC, the five of us,
    promulgate rules, the binding guidance upon the agency was put
    out in an Enforcement Bureau advisory on May 20 of last year.
    And this is the core rule now that the private sector has to
    adhere to: ``The Enforcement Bureau intends that broadband
    providers should employ effective privacy protections in line
    with their privacy policies and core tenets of basic privacy
    protections.''
        I have no idea what this means. Neither does the private
    sector. And the entire industry is at the mercy, from edge
    providers to ISPs, as to how the agency is going to proceed in
    this brave new world.
        Mr. Lance. Yes, I tend to agree with that.
        Would other members of the Commission like to comment?
        Commissioner Rosenworcel?
        Ms. Rosenworcel. Sure.
        Privacy is a cherished principle, and it is also a
    complicated one in the digital age. So, going forward, we are
    going to have to provide more clarity. I respect that the
    Chairman wants to have a rulemaking on that. And I acknowledge,
    as Commissioner Pai said, that our existing guidance is
    insufficient to date.
        Mr. Lance. Yes. Thank you.
        Commissioner Clyburn?
        Ms. Clyburn. One of the things that is uplifting and great
    about this is we have complementary jurisdiction with the FTC,
    and we work collaboratively. We meet on a monthly basis to make
    sure that consumers are protected. So our job, our
    collaborative, combined role is to ensure that there are no
    holes when it comes to protecting consumers.
        And so we will work and we will get more clarity when
    something is before us. But in terms of the jurisdiction under
    section 222, our role, as provided by you, is clear when it
    comes to privacy.
        Mr. Lance. Commissioner O'Rielly?
        Mr. O'Rielly. I have spent a great deal of time on the
    issue of privacy. I have to say, I find that the Commission's
    understanding of the issue is lacking and its expertise is low.
        The FTC spent over the last two decades becoming an expert
    in this space and providing guidance and providing the
    structure, and we are going to waltz in there and provide quite
    a bit of damage, I think, going forward, notwithstanding the
    fact that it is a very important issue.
        Mr. Lance. Thank you. I think we will continue to monitor
    this, and I thank you for your testimony.
        Thank you, Mr. Chairman.
        Mr. Latta. Thank you.
        The gentleman's time has expired, and he yields it back.
        The chair now recognizes the gentleman from California for
    5 minutes.
        Mr. McNerney. I thank the chairman.
        And I thank the Commissioners for giving us your wishlist
    this morning. I think it was an interesting list.
        Mr. Chairman, would you update us a little bit on the
    Commission's efforts to address cybersecurity, specifically
    coordination with some of the other Federal agencies?
        Mr. Wheeler. Yes, sir.
        As a matter of fact, next week, I am meeting with a
    coordinating group of the heads of all of the independent
    agencies of the government--Nuclear Regulatory Commission, FTC,
    FERC, the whole group--where we are coordinating our policies.
        And the approach that we have taken at the FCC is one of
    the models that is being talked about across all agencies,
    which is, how do you work with a multistakeholder group inside
    your industry to come up with processes that are both self-
    reviewing and self-enforcing, with the involvement of the
    agency, and how do we do that across the board?
        The financial industry has been very successful in doing
    that. We are successfully now underway on that, and we will be
    continuing to work with other agencies.
        Mr. McNerney. Are you a lead agency in regard to this
    issue?
        Mr. Wheeler. I would hope so, sir.
        Mr. McNerney. Do you think there is a potential that sort
    of a knee-jerk reaction to the tragic Paris attacks could
    actually make us less secure, specifically----
        Mr. Wheeler. I am not sure what you mean by ``a knee-jerk
    reaction.''
        Mr. McNerney. Well, I mean some policies that are designed
    to sound tough but actually cause problems, more problems than
    they were intended, specifically with cyber and maybe backdoor
    policies.
        Mr. Wheeler. So, it is interesting. I was having a
    discussion with Ms. Matsui, who I see has left, before the
    hearing that--one of the things that I have found my 2 years in
    this job is that the regulatory process--because it provides
    for so much diverse input from so many different parties--is a
    slow process. So I think that that tends to mitigate the kind
    of knee jerk you are talking about.
        And the fact that there wouldn't be lots of opinions heard,
    I think, is not a reality that exists, as the Administrative
    Procedure Act set out our procedures.
        Mr. McNerney. Thank you.
        Commissioner Clyburn, you mentioned the Mobility Fund
    hasn't really been implemented yet. Do you see a path forward
    to that?
        Ms. Clyburn. Yes, I do. I have been working with our
    Wireless Bureau, and they assured me that we have a pathway to
    completion.
        You and I have both experienced traveling down roads,
    traveling down state highways where we look at our phones,
    absolutely no bars, absolutely no coverage. At night, alone, it
    is not the most comfortable feeling.
        And so we are looking at this, how do we ensure the safety
    in terms of travel, the opportunities, particularly in rural
    America, that they have comparable service. And I think we are
    on a pathway of doing that real soon.
        Mr. McNerney. Thank you.
        Commissioner Rosenworcel, you mentioned the Federal lands
    for broadband deployment. What is your vision for that?
        Ms. Rosenworcel. Well, by some measures, one-third of our
    Nation's real estate is owned by the Federal Government. And
    they are some of the areas that have the sparsest deployment of
    communications services.
        So the question is, what Federal facilities exist on those
    lands that we could use to support broadband deployment or
    antenna structures? And if we could identify what facilities we
    have, we would be in a position to expedite deployment in rural
    America and lower the cost of deployment while we are at it.
        Mr. McNerney. So the initial phase, then, would be just to
    identify existing facilities.
        Ms. Rosenworcel. I think it would be important for us to
    identify existing facilities. I also think it would be
    important for us to develop a master contract with the GSA so
    that the private sector that is interested in deployment would
    have a single contract they could use. And I also think we
    should consider shot clocks, which would reduce the amount of
    time that the Federal Government had to respond to those
    requests for deployment.
        Mr. McNerney. OK. Thank you.
        Mr. O'Rielly, you mentioned that Federal Government user
    fees are needed. Would you expand on that a little bit?
        Mr. O'Rielly. So it is a suggestion I said. My colleague
    and I have had a good, healthy discussion over the years
    regarding in terms of incentives that may provide. I also think
    you need to provide a mechanism to force Federal users to
    relinquish spectrum, and I think that one way to do that is
    impose a spectrum fee.
        So we put the opportunity cost to the spectrum for the
    Federal Government users on an annual basis, and, therefore,
    they have an incentive to decrease how much they use.
        Mr. McNerney. Thank you.
        I was certainly interested in the comment on high-frequency
    spectrum, but we will have to put that one off.
        Thank you, Mr. Chairman. I yield back.
        Mr. Latta. Thank you very much.
        The gentleman's time has expired, and he yields back.
        The chair now recognizes for 5 minutes the gentleman from
    Texas.
        Mr. Olson. I thank the chair.
        And welcome to our friends from the FCC.
        I am going to talk about privacy and the Enforcement Bureau
    this afternoon. I want to ask about what I call a what-the-heck
    moment I had back home.
        About 2 weeks ago, Chairman Wheeler, you were on the
    Charlie Rose show, and you shared that in the next several
    months the FCC would address privacy of the networks. You
    stated, ``We need a voice in the collection of information
    about us,'' end quote. Those 10 words set off an onslaught of
    what-the-heck questions from back home.
        So, Commissioner O'Rielly, I may be mistaken here, but
    doesn't the FTC have jurisdiction over the privacy of the
    networks, not the FCC? Are you concerned about the takeover,
    mission creep of the FCC getting involved in the FTC's
    business?
        Mr. O'Rielly. So, as the result of our net-neutrality
    decision, we now have an issue regarding the privacy of
    networks, broadband networks, and the treatment of them under,
    as my colleagues highlighted, section 222.
        I am extremely concerned about that and have highlighted
    that for a considerable amount of time and what it can mean for
    two different regulatory agencies to have oversight over
    similar information and that providers that operate on both
    sides of the equation will be stuck with two different
    regulators fighting over each other. The MOU is an attempt to
    try and say that we are going to cooperate, but the different
    treatment of the same data is going to be problematic, in my
    opinion.
        I have also highlighted why I think that our expertise on
    the subject matter is pretty dormant and lacking compared to
    the FTC.
        Mr. Olson. Mr. Pai, your comments, sir? Same issue.
        Mr. Pai. I would agree with Commissioner O'Rielly on that.
        And I think it is also critical to remember that our
    authority, as granted by Congress, is extremely limited. Under
    section 222, telecommunications carriers, backed up by the
    FCC's rules, have a duty to protect customer proprietary
    network information. That is a very narrow category of
    information, such things as your telephone number or what
    service you subscribe to. It is not the vast array of
    information that people think about when they think about
    privacy.
        And so I worry, as well as Commissioner O'Rielly has
    suggested, that the agency's newfound zeal to enforce these
    privacy mandates may bleed over to edge providers. If you like
    something on Facebook, is that, sort of, a consumer piece of
    information that consumers would expect to be private? It may
    well be, in which case the FCC would have the incentive and
    ability to get into that space.
        Mr. Olson. I share those concerns.
        Any comments, gentlemen, about this MOU that came out
    yesterday between the FTC and FCC? Any comments about that?
        Mr. Pai. I agree with what Commissioner O'Rielly has said,
    both in terms of process, the fact that all of us found out
    about it yesterday, and in terms of substance, that the MOU
    wouldn't have been necessary if we had each stayed within our
    lanes and let the FTC handle what it is statutorily empowered
    to do. And if we focused on building out broadband to a lot of
    these areas as opposed to regulating the network heavily, this
    entire MOU would have been obviated.
        Mr. O'Rielly. There is one sentence or at least one clause
    in here that just highlights the exact problem I have
    indicated. It says, ``... Including FCC's authority over
    activities engaged in by common carriers and by non-common
    carriers for and in connection with common-carrier services.''
        The scope of that is extremely broad. ``By non-common
    carriers for and in connection with common-carrier services.''
    There is no limiting principle on that concept. I think that is
    very problematic.
        Mr. Olson. Again, what the heck?
        And then about the Enforcement Bureau, the rise of the
    Enforcement Bureau, the current head was quoted last April in
    the National Journal as saying this: ``Generally speaking, I
    have found that most companies want to do the right thing. And
    when it's clear that something is impermissible, they generally
    don't do it,'' end quote. He said, ``When it's clear, they
    generally don't do it.'' But then he said: I'm almost always
    working in a gray area.
        ``Clear'' to me means black and white. ``Gray'' is gray,
    nebulous. That gray area has earned him the title from the
    National Journal of ``the FCC's $365 million man.'' Back home,
    again, people say, what the heck?
        So my question for you, Mr. O'Rielly and Mr. Pai, is: How
    does fines totaling $365 million help consumers, promote
    innovation and investment? How come they should have that role
    instead of Congress?
        Mr. Pai. That is a good question, Congressman. I suppose
    those companies should be grateful to the extent that the
    agency was generous. In the Ortel case, for example, it said
    that the FCC had the authority to fine those companies $9
    billion, but, out of the goodness of its heart, it was only
    going to fine them $5 million. But I think, in a lot of cases,
    it is simply a number drawn out of thin air.
        And in this regard, I tend to be old-fashioned. I think,
    before you enforce a rule, you have to have a rule. If you are
    going to pick a number, it should have some grounding in
    objective fact and, you know, precedent. That is just not the
    way the enforcement operation works anymore.
        Mr. O'Rielly. Can I comment on top of that? And I
    highlighted this in my testimony. If you see some of the
    citations that we issued against First National Bank and Lyft,
    we didn't provide them any kind of notice that they were even
    coming. They didn't even know what was happening.
        So the idea that you referenced, where they are working
    with the carriers and trying to make sure that they do the
    right thing, these weren't carriers; these are non-carriers--
    had no idea what was coming their way, and there was no
    communication from the Commission.
        So I agree with my colleague's just point. These numbers
    are picked out of the air. We are not going to see $365
    million. It is great for a press release, but it is not going
    to actually develop.
        Mr. Olson. And that is very frightening for the market.
        One final question. You guys are----
        Mr. Wheeler. Could I----
        Mr. Olson. I only have a little time here. Sorry,
    Commissioner Wheeler, but I have one last question.
        You all are in charge of the bureau, the Enforcement
    Bureau. Let's play like you are grade school teachers, you give
    them grades. What grade would you give them, A through F?
        Mr. Wheeler. A.
        Mr. Olson. A.
        Ms. Clyburn?
        Ms. Clyburn. A.
        Mr. Olson. Ms. Rosenworcel?
        Ms. Rosenworcel. A.
        Mr. Olson. Mr. Pai?
        Mr. Pai. Not passing.
        Mr. Olson. Mr. O'Rielly?
        Mr. O'Rielly. A fine individual but a D-minus.
        Mr. Olson. D-minus.
        Thank you much. I yield back.
        Mr. Wheeler. Let me say that we worked with the attorney
    general of Texas on that $353 million settlement. It was
    billions of dollars that were crammed onto the bills of
    millions of subscribers across the country. And of that $353
    million, some went back to the State of Texas, as the AG
    insisted, and to other States. But $267 million went back into
    the pockets of consumers who had been bilked because they were
    charged for things they did not buy.
        That is rational enforcement. That is the kind of job I
    think that all consumers expect us to be doing. Millions of
    people, billions of dollars, done in conjunction with all 50
    State AGs.
        Mr. Olson. I hear you, but----
        Mr. Latta. The gentleman's time has expired.
        Mr. Olson [continuing]. Pay this money right now. Yes.
    Again, we don't have that. You guys should not have that
    weapon. You should be working with our governors, our attorney
    generals. That is my interest.
        Mr. Latta. Thank you.
        The gentleman's time has expired, and he yields back.
        The chair now recognizes the gentlelady from Colorado for 5
    minutes.
        Ms. DeGette. Thank you, Mr. Chairman.
        Well, Chairman Wheeler, I wanted to ask you, with respect
    to these recent enforcement efforts, the recent ones, what is
    your view of the FCC's authority vis-a AE2-vis your ability to
    take these efforts?
        Mr. Wheeler. Thank you. I think we have the responsibility
    and the authority as granted in the act.
        And the interesting thing, what we are hearing here is, so
    we have 19 notices of apparent liability this year. The average
    annual notice of apparent liabilities by the last Republican
    administration of the FCC was an average of 215 a year.
        Ms. DeGette. Thank you.
        Now, yesterday, the FTC and the FCC announced a memorandum
    of understanding for continued cooperation on consumer
    protection. And this MOU mentioned that the agencies are going
    to engage in joint enforcement actions. So are there some
    specific areas where you think that consumer protection is
    particularly at risk and where this cooperation is going to be
    especially beneficial?
        Mr. Wheeler. Thank you.
        The other thing that is key to know about that MOU is that
    it replaced the previous MOU. This is not some unique
    relationship.
        Ms. DeGette. Right. It didn't just come up out of thin air.
        Mr. Wheeler. And so what we have always tried to do is to
    say, OK, what are the lanes, and where do we cooperate? Because
    our authorities abut with these other. And I think we have an
    excellent working relationship with the FTC, and we were able
    to codify it in this MOU.
        Ms. DeGette. And are there some specific areas in which you
    think you can cooperate that will be beneficial?
        Mr. Wheeler. So, for instance, on the issue of the cramming
    that was discussed a moment ago, the $353 million fine, we have
    worked with the FTC on that. It is clear that the FTC has
    authority over the non-common-carrier----
        Ms. DeGette. I only have 5 minutes.
        Mr. Wheeler [continuing]. Activity of common carriers.
        Ms. DeGette. Are there other areas that you think----
        Mr. Wheeler. FTC has authority over the----
        Ms. DeGette. Cramming. Are there other areas you are going
    to focus on?
        Mr. Wheeler. Yes.
        Ms. DeGette. What are they?
        Mr. Wheeler. So, for instance, they have authority over
    non-common-carrier activities of common carriers.
        Ms. DeGette. OK.
        Now, there are 14 months left in the Obama administration,
    and, obviously, the Commission has a lot of pending actions and
    rules. One thing I think the Commission should focus on
    completing is any further actions on the Satellite TV Extension
    and Localism Act reauthorization that this subcommittee
    authored last Congress.
        In that act, Congress directed the Commission to prepare a
    report on downloadable security capabilities for pay-TV
    content. Now, what I understand is that a technical advisory
    group has completed its report, and some stakeholders are
    seeking a rulemaking that would require changes to the set-top
    boxes used in cable, IPTV, and satellite TV providers. This is
    something Mr. Doyle was talking about a little bit.
        One of the main issues we hear about from consumers over
    and over again is that customer service can be complicated to
    navigate and also onerous. And so a lot of us feel like we need
    to protect consumers, while at the same time giving providers
    and content creators the flexibility they need to adapt to
    changing business models.
        So I am wondering if the Commission has considered, if
    leased set-top boxes are responsible for their own customer
    service, that could cause a lot of confusion.
        Mr. Wheeler. So, thank you, Congresswoman.
        The comment period on the recommendations of the DSTAC
    report ended last week. I don't know if this was an issue that
    was raised in the comments. I would suspect so. And we have not
    fully worked through those comments.
        Ms. DeGette. Well, once you do, I would appreciate it if
    you would supplement your testimony so that we could get an
    answer to that.
        Now, I, lastly, want to touch on the special access issue.
    Many competitive telephone providers use the physical
    infrastructure of incumbent carriers to provide telecom
    services to businesses through an arrangement called ``special
    access.''
        The FCC has been considering updating the special access
    rules for decades, as some of us on this committee know, and it
    has recently completed an extensive data-gathering process to
    inform changes to the rules.
        I am wondering, Chairman Wheeler, if, now that the
    Commission has undertaken such a significant effort, will this
    be a priority for the FCC during the remainder of this
    administration?
        Mr. Wheeler. Yes, ma'am.
        Ms. DeGette. Thanks.
        I yield back.
        Mr. Latta. Thank you.
        The gentlelady yields back.
        And the chair now recognizes the gentleman from Kansas for
    5 minutes.
        Mr. Pompeo. Thank you, Mr. Chairman.
        We have heard from four Commissioners today, Mr. Wheeler,
    that they are getting late information, incomplete information
    with respect to Enforcement Bureau practices.
        Your explanation implied somehow that they were
    untrustworthy or incapable of handling the sensitive
    information. I think that is counterfactual. I think they, all
    four, are cable people, highly capable of handling that
    information. And I also think it is inconsistent with how this
    Commission ought to operate.
        And so I would certainly urge you to change that practice
    and would urge this committee to do all that we can to make
    sure that you do.
        Mr. Wheeler. Well, I would hope that I was not giving an
    impression that they are untrustworthy. As Commissioner Clyburn
    said, they are briefed every 2 weeks by the Enforcement Bureau
    as to----
        Mr. Pompeo. Thank you. I don't have much time. It was
    certainly the implication that I heard from you. Perhaps I got
    it wrong.
        I want to talk about competition in the cybersecurity
    world. I spend a fair amount of time on this in my role on the
    Intelligence Committee and here on this subcommittee.
        Not too long ago, you were talking about network providers,
    Mr. Wheeler, and you talked about a common set of standards for
    cybersecurity.
        Mr. Wheeler. Yes, sir.
        Mr. Pompeo. My judgment is that would make it easier for
    hackers. If you had a common set of standards, it is easier to
    attack.
        These businesses, these network providers, are in the
    business of providing secure, reliable connectivity. That is
    how they operate their business, how they make money.
        Why is it you think you can develop a set of standards that
    would be superior to what AT&T or Sprint or Verizon or any of
    the others might be able to accomplish in the world of
    cybersecurity?
        Mr. Wheeler. We didn't develop them. They developed them.
    What we did was provide a coordinating body. This was a
    multistakeholder process where everybody sat down and put
    together the best heads and said, what are the kind of
    processes that we all need to make sure that we have in place,
    and how do we monitor those processes so that we know, are they
    being done, A, and, B, as you just suggested, the hackers are
    always working ways around, and how do we keep up with that.
        Mr. Pompeo. Right. It makes no sense to me for a common set
    of standards to be a regulatory tool that the FCC issues. It
    just makes it simple.
        Mr. Wheeler. We have not issued them, sir. It is not a
    regulatory tool.
        Mr. Pompeo. Great. I am glad that you have now committed to
    not doing that today.
        Mr. Wheeler. No, let me----
        Mr. Pompeo. I appreciate that.
        Mr. Wheeler. We have a process that was developed in
    conjunction with--it is not developed as a rule, OK? It is
    flexible. It is designed to be flexible----
        Mr. Pompeo. Great.
        Mr. Wheeler [continuing]. For the very reasons you are
    talking about.
        Mr. Pompeo. I am thrilled.
        You talk about competition all the time. The IP transition
    is supposed to make sure we have the most updated technology.
    And yet the Commission, when it decided to impose requirements
    that carriers provide IP-based wholesale replacement services
    to competitors, the fiber facilities, that you said you
    required, quote, ``reasonably comparable to those of legacy
    services.''
        Why would you create what appears to me to be a real
    disincentive for deploying new facilities and new services?
        Mr. Wheeler. Thank you, sir.
        Because of the fact that you don't want a situation where
    regulation is encouraging the people who are currently using
    competitive facilities to not be able to have equivalents.
        So if I am selling a service to you and it is based on
    copper and suddenly the carrier decides, I am taking the copper
    out or shutting it down, I need to be able to continue to
    provide a service to you. And so, if that migrates over into
    fiber and IP, I ought to still be able to have a relationship
    with that carrier so that I can continue to provide the service
    to you.
        Mr. Pompeo. Commissioner Pai, do you agree with that
    analysis in terms of the disincentive it creates for build-out?
        Mr. Pai. I don't, Congressman.
        And I think you put your finger right on the concern. The
    notion that the government should force one company to stay in
    a business that it doesn't want to be in for the benefit of
    another company is the very definition of intrusive government
    intervention.
        Instead, we should recognize that the marketplace is much
    more competitive, that cable companies are deploying metro
    Ethernet, that wireless is increasingly an alternative, and get
    out of this business of, you know, sort of, Depression-era
    regulation of a marketplace that simply isn't the way it was
    back in the 1930s.
        Mr. Pompeo. You actually made the case more articulately
    than I did. Thank you.
        Mr. Wheeler. But nobody is saying that you should stay in a
    business you don't want to be in. What the rule says is that
    you can't shut somebody off without offering them the same kind
    of service in your new technology.
        Mr. O'Rielly. Well, and the rule also states, Congressman,
    that you can't change your services without our permission,
    which we will never give you.
        Mr. Wheeler. Which has been the rule forever.
        Mr. Pompeo. Right.
        Mr. Wheeler. That is in 214.
        Mr. Pompeo. Would you agree we should that rule?
        Mr. Wheeler. Section 214----
        Mr. Pompeo. But, no, I am asking--no, I understand the
    history.
        Mr. Wheeler. Section 214----
        Mr. Pompeo. So it has not only been there a long time, but
    you like it.
        Mr. Wheeler. Section 214 has been the bedrock of
    telecommunications policy for the last 80 years.
        Mr. Pompeo. Chairman Wheeler, have you read the reports,
    Reuters reports, about WCRW and its connection to control by
    Chinese entities?
        Mr. Wheeler. Yes, sir.
        Mr. Pompeo. Tell me what the FCC is doing about that and
    what your position is with respect to that particular station
    that is airing pro-Chinese communications here in the United
    States.
        Mr. Wheeler. We have an investigation going on to find out,
    with the representations that have been made along the way as
    they filed for increases in power and other kinds of things. We
    learned about it through the Reuters report, just as you did.
        Mr. Pompeo. Great. And so I assume, because there is an
    investigation going on, there is nothing more you will share
    with me this morning. Is that correct?
        Mr. Wheeler. Thank you, sir.
        Mr. Pompeo. Great. Thank you.
        I yield back the balance of my time.
        Mr. Latta. The gentleman yields back.
        And the chair now recognizes the gentleman from Kentucky
    for 5 minutes.
        Mr. Yarmuth. Thank you very much, Mr. Chairman.
        Thanks to all the Commissioners for their testimony and
    appearance.
        A couple years ago, I was in a middle school in my
    district, which is Louisville, Kentucky. And it is a school
    that is not atypical in an urban setting. Ninety-five percent
    of the kids were on free and reduced lunch. And I asked the
    principal what percentage of her students she would estimate
    had access to the Internet at home. She said probably 10
    percent. And, you know, that breaks your heart because you know
    those kids are lost, particularly if they are already in middle
    school.
        So what we have been trying to do in Louisville is--
    broadband, expanded broadband is great. Wireless technology is
    great. But there are families who can't afford $10 a month for
    whom broadband means nothing because they don't have a
    computer, whose only access might be through the phone, and so
    forth.
        So we have been trying to do a local initiative to try and
    just create in some neighborhoods public WiFi, free WiFi, so
    kids could at least be able to have it, whether they have a
    tablet or a phone. And AT&T and others have been very helpful
    in trying to accomplish that.
        So I would just throw that out as--I know some of you are
    sensitive to this. But as you consider expanded access, that is
    a critical consideration.
        Secondly, earlier this year, I introduced the Keep Our
    Campaigns Honest Act, which would require the FCC to use its
    existing authority to require disclosure of those who are
    funding campaign spots.
        We just concluded a campaign in Kentucky in which the vast
    majority of all the ads run for both gubernatorial candidates
    were run by outside groups. Nobody knows who they were. Nobody
    still knows who they were. I would say that my constituents'
    reaction was that, if there were a lot of Styrofoam bricks
    available, they would have bought as many as they could have
    afforded. The outrage was palpable.
        So, once again, I would request that the Commission
    consider that. We are going into a campaign that has already
    started with anonymous ads. And this is something that I think
    is a high priority for Americans, and it is certainly for, I
    think, the benefit of democracy that people know who they are
    being influenced by.
        I know Chairman Walden has a problem with the KOCH Act, as
    we call it, because he says it would require too many donors to
    be listed. But I think the Commission could do something; say,
    anybody who funded more than 25 percent of the ads, so, at the
    most, you would have four people identified in the ad. But,
    again, I think this is critical, and I would urge you to
    proceed on that.
        And, finally, a question that I have to ask because the
    person I live with would not welcome me back unless I did. And
    I am new to this subcommittee and relatively new to the
    committee, so I may have missed something, but where does the
    implementation of the requirement on volume of ads in
    television shows stand? Because, anecdotally, it seems that it
    has not been implemented very extensively.
        I would throw it open to anybody. Chairman?
        Mr. Wheeler. So, first of all, I understand the reporting-
    to-a-higher-authority challenge that you face.
        And, you know, the interesting thing that is going on, I
    can't answer specifically--and I will get something for the
    record for you--but the interesting thing that we are now
    seeing is that there is actually a decrease in the number of
    ads on most of the major networks right now, as they are
    feeling the pressure from online competition and people not
    wanting to sit through ads.
        And that is the marketplace operating, and that is an
    encouraging thing. I am not sure what an agency's role should
    be in saying there should be this many ads, but----
        Mr. Yarmuth. No, I am not talking about the frequency, the
    number of ads. I am talking about the sound volume.
        Mr. Wheeler. Oh, the sound. Oh.
        Mr. Yarmuth. The sound volume.
        Mr. Wheeler. Yes, Commissioner Clyburn has just passed me a
    note saying----
        Mr. Yarmuth. Thank you.
        Ms. Eshoo. Would you yield just for 2 seconds?
        Mr. Yarmuth. Sure. I yield.
        Ms. Eshoo. It is going to be on my tombstone as the only
    thing that people in the country know me for. But thanks for
    asking about it.
        Mr. Yarmuth. And I actually notice that there are some
    commercials, actually, where the volume drops. And I don't know
    whether that is intentional, somebody trying to get people to
    pay more attention or not. But I am just curious as to where
    the enforcement mechanism is or whether it is being enforced.
        Mr. Wheeler. I would be happy to get back to you on that.
        Mr. Yarmuth. Thank you very much, Mr. Chairman. I yield
    back.
        Mr. Latta. Thank you.
        The gentleman yields back the remainder of his time.
        And the chair now recognizes the gentleman from
    southeastern Ohio for 5 minutes.
        Mr. Johnson. Thank you, Mr. Chairman.
        And I thank our panel members for being with us today.
        Chairman Wheeler, as you know, we had concerns about your
    proposal to relocate the 200 servers from your headquarters to
    West Virginia. We sent you letters to that effect. Those
    concerns were not with the purpose of the move but the
    disruption that it would cause to operations and the risk of
    data loss.
        We have had a number of open inquiries and investigations
    on the FCC, and we are still waiting on some of those documents
    to be produced.
        So, according to the materials that you provided in
    response to our letters, you were permitted, at your request,
    to reprogram $8.5 million for this effort. How much did the
    move actually cost? Did it cost $8.5 million?
        Mr. Wheeler. I don't know that off the top of my head.
        Mr. Johnson. You don't know the answer for that? So you
    don't know whether it was more? Less?
        Mr. Wheeler. I can get you----
        Mr. Johnson. Can you get me that, please?
        Do you have a plan for where you plan to move--if it didn't
    cost the $8.5 million, do you have a plan for where you intend
    to put the surplus that you asked for?
        Mr. Wheeler. I don't know that it exists.
        Mr. Johnson. OK. So you will get that back for the record?
        Mr. Wheeler. Yes.
        Mr. Johnson. All right.
        Well, suffice it to say the move didn't go as smoothly as
    we were told it would. You ran into problems with cabling that
    were attributed to the contractor. And the move took an
    additional 3 days, according to senior FCC management.
        According to at least one press report, employees were told
    to stay at home when the problems were encountered, and you
    were unable to get all the systems back up and running in the
    time that you allotted. Is that true?
        Mr. Wheeler. Yes, sir.
        Mr. Johnson. OK.
        According to another report, a senior FCC manager stated,
    ``We could have always asked for more time up front, possibly
    padded our schedules. Instead, we chose to be ambitious in our
    timelines because that is what a startup mentality culture
    does.''
        So the way I read that statement is, rather than appreciate
    the impact of taking the agency off line on other
    organizations, agencies, regulated entities, and the public, a
    decision was made to go for the sound bite. Am I reading that
    wrong?
        Mr. Wheeler. Yes, sir.
        Mr. Johnson. OK.
        Well, then, didn't the FCC have the final say on the plans
    for the move? How did you allow this to happen?
        Mr. Wheeler. No, I think that this was a question of what
    is a logical way of doing it----
        Mr. Johnson. I am an IT guy, Chairman Wheeler, and I have
    been doing implementations for a long time, and any planning up
    front includes planning for things like this.
        Mr. Wheeler. I am an IT guy, too. I agree.
        Mr. Johnson. Did you guys have that in your consideration?
        Mr. Wheeler. Yes, sir. And we built in, and it was wrong.
        Mr. Johnson. OK. Good. So you acknowledge that that was a
    failure.
        Mr. Wheeler. But I must say----
        Mr. Johnson. Good.
        Mr. Wheeler [continuing]. I think that our staff is
    fabulous----
        Mr. Johnson. Let me move on. Let me move on, Mr. Chairman.
        Does the FCC have in place a policy on the approval and the
    use of social media and Web 2.0--for example, using Twitter and
    YouTube? Such a policy would seek to insulate the FCC from
    cyber threats and social engineering, would it not?
        Mr. Wheeler. I am sorry, do we have----
        Mr. Johnson. Do you have a policy on the approval and the
    use of social media and Web 2.0, like Twitter and YouTube?
        Mr. Wheeler. On our----
        Mr. Johnson. On your employees.
        Mr. Wheeler. Yes, we have a policy.
        Mr. Johnson. You do.
        Does the FCC have general guidelines for use of these
    technologies for FCC employees in their official capacities, in
    their responsibilities of FCC employees?
        Mr. Wheeler. I believe so, that it said use it in your
    official capacity.
        Mr. Johnson. You say you believe so. You do, or you don't?
        Mr. Wheeler. No, I believe so. And I believe that the
    counsel is to use it appropriately in your official capacity.
        Mr. Johnson. Do these guidelines extend to the use of these
    technologies for FCC employees in their unofficial capacity?
        Mr. Wheeler. This is a question of the use of FCC
    facilities for unofficial activities----
        Mr. Johnson. In their unofficial capacity----
        Mr. Wheeler. Yes, sir.
        Mr. Johnson [continuing]. Are there guidelines on how FCC
    employees should be using those kinds of technologies?
        Mr. Wheeler. Yes, sir.
        Mr. Johnson. Can you describe to us what those policies
    are?
        Mr. Wheeler. You are supposed to have--you are using this
    for official purposes. I believe that there have been actions
    taken against some employees who didn't. I believe that there
    have been Office of Inspector General inspections in some
    situations and that people have lost their jobs.
        Mr. Johnson. OK.
        Well, are you familiar with the several videos posted
    online memorializing the server move? Have you seen some of
    those videos?
        Mr. Wheeler. No, sir, I haven't seen those.
        Mr. Johnson. Well, in these videos, the Commission revealed
    several pieces of non-public information, including the names
    and license plates of some FCC employees, the types of servers
    the FCC is using to store important and sensitive data, and
    many pictures of the specific setup the FCC has at its new data
    center.
        Chairman Wheeler, it is a little hard for me, as an IT
    professional, to take seriously the FCC as an agency that wants
    to be a privacy and cybersecurity regulator when it sacrificed
    important cyber information, employee privacy, at the altar of
    good PR.
        Commissioner Pai, were you aware these videos were being
    posted?
        Mr. Pai. I was not, Congresswoman.
        Mr. Johnson. Commissioner Clyburn, were you aware that the
    videos were being posted?
        Ms. Clyburn. I was not.
        Mr. Johnson. Commissioner Rosenworcel?
        Ms. Rosenworcel. No.
        Mr. Johnson. No?
        Commissioner O'Rielly?
        Mr. O'Rielly. No, sir.
        Mr. Johnson. OK.
        Mr. Wheeler. I was not either, sir.
        Mr. Johnson. You were not either? OK.
        Chairman Wheeler, our colleagues on the Committee on
    Appropriations are currently working on final provisions to
    fund our government agencies. Among the issues that they are
    tackling as part of that process is putting into law a ban on
    the FCC's use of its authority to regulate rates for broadband
    Internet access service, consistent with your consistent
    statements to Congress that FCC won't regulate, rate-regulate
    broadband.
        It is my understanding that Appropriations staff asked the
    FCC to provide technical assistance in drafting this provision
    and that the FCC refused to provide Congress with the benefit
    of your expertise. It is completely inappropriate for an agency
    of the government to refuse to engage in the provision of its
    expertise to the Congress.
        When will you remedy this situation? And can you assure
    that it will not happen again? Are you guys going to provide
    that information to the Appropriations staff or not?
        Mr. Wheeler. I was unaware of that situation, Congressman.
    I do think that it is unnecessary to put those kind of riders
    on the Appropriations----
        Mr. Johnson. But that is not your call. That is not your
    call. That is Congress' request. Are you going to provide the
    information?
        Mr. Wheeler. I was unaware of the situation----
        Mr. Johnson. And are you going to provide the information?
        Mr. Wheeler [continuing]. It is not hard to figure out how
    to draft it. Yes, sir.
        Mr. Johnson. OK. All right.
        Mr. Chairman, my time has expired.
        Mr. Latta. Thank you very much.
        The gentleman's time has expired.
        And the chair now recognizes the gentlelady from New York
    for 5 minutes.
        Oh, I am sorry. I didn't see Mr. Butterfield come back in.
        Mr. Butterfield. Thank you, Mr. Chairman.
        Mr. Latta. The gentleman is recognized for 5 minutes.
        I am sorry.
        Mr. Butterfield. Thank you, Mr. Chairman.
        Let me first direct my question to you, Chairman Wheeler.
    As I understand it, the congressionally mandated Downloadable
    Security Technology Advisory Committee report provides no
    assurances that, under the AllVid approach, unlike an apps
    approach, congressionally mandated protections like privacy and
    emergency alerts would be honored.
        Now, tell me, how does that serve the public interest?
        Mr. Wheeler. I am not sure I understand the question, that
    this is----
        Mr. Butterfield. Maybe I am reading it incorrectly. Let me
    try it again.
        As I understand it, the congressionally mandated
    Downloadable Security Technology Advisory Committee report----
        Mr. Wheeler. Right.
        Mr. Butterfield [continuing]. Provides no assurances that,
    under an AllVid approach, congressionally mandated protections
    like privacy and emergency alerts would be honored. Does that
    serve the public interest?
        Mr. Wheeler. So, thank you, Congressman.
        Mr. Butterfield. Yes.
        Mr. Wheeler. AllVid was a half-a-dozen-years-ago kind of
    approach. I know people like to characterize what is going on
    as the resurgence of AllVid.
        What we did was to have a report that dealt with the
    security issues involved in fulfilling our section 629
    responsibilities. And the comments on that just closed last
    week.
        Mr. Butterfield. OK.
        Mr. Wheeler. I am unaware, having not been through the
    comments yet or seen a briefing on the comments, of the kind of
    issues that you have raised having been raised in the comments,
    but I will certainly look for them.
        Mr. Butterfield. And if this approach does not honor
    licensing terms that are negotiated between programmers and
    MVPDs, how would that affect the diversity of programming
    available to consumers?
        Mr. Wheeler. So, as I said to Ms. Blackburn, one of the
    reasons that you had the security discussion to begin with was
    the protection of copyrights so that the kind of situation you
    talk about wouldn't happen.
        Mr. Butterfield. Does that also give online video
    distributors a competitive advantage over traditional
    distributors, as OVDs would not be overburdened by the rules?
    Does it give a competitive advantage to the traditional
    distributors?
        Mr. Wheeler. I think we want to make sure--the question
    is--so there are online over-the-top services coming through on
    the Internet part of the cable that comes into your house. The
    question then becomes, on the cable part of the cable, if you
    will, what is the impact of the set-top box?
        And the important thing--because I know this committee is
    very interested in making sure that there is no thwarting of
    innovation through regulation. And we share that, as well. One
    of the questions that I hope was addressed--and I look forward
    to the comments--is what is the impact of the set-top box on
    thwarting the kind of opportunities for consumers that I think
    you were just talking about.
        Mr. Butterfield. All right.
        Let's go to Lifeline modernization. Lifeline modernization
    appears to be on good track, but the question still remains,
    how do we create a wireless broadband solution under the
    current rate of $9.95?
        Mr. Wheeler. So, yes, it is on track. And, thanks to
    Commissioner Clyburn for the work that she has been doing,
    Commissioner Rosenworcel and her calling us out constantly on
    the homework gap, we are going to address those problems.
        And I think that if you look at the kind of capacity that
    can be bought at that kind of price, that what we want to do is
    give people the opportunity to do that and to exercise their
    own choices along the way, as well.
        Mr. Butterfield. Can you speak to how you intend to promote
    competition among Lifeline providers at this price?
        Mr. Wheeler. Consumers should have choices.
        Mr. Butterfield. Finally, how will the FCC ensure that
    voice-only still remains a service offering for eligible low-
    income consumers?
        Mr. Wheeler. It is important.
        Mr. Butterfield. All right. The next question would take
    longer than 40 seconds, so I am going to stop right there and
    yield back.
        Mr. Latta. Thank you very much.
        The gentleman yields back the balance of his time.
        And the chair now recognizes the gentleman from Illinois
    for 5 minutes.
        Mr. Kinzinger. Thank you, Mr. Chairman.
        And thank you all for being here today and having a good
    time with us. We appreciate it.
        Mr. Chairman, before I get started with my questions, I am
    going to ask unanimous consent to include in the record a
    letter from the Illinois Chamber of Commerce on the need for a
    regulatory approach at the FCC that fosters investment and
    innovation in the deployment of technology.
        Mr. Latta. So ordered.
        [The information appears at the conclusion of the hearing.]
        Mr. Kinzinger. Chairman Wheeler, I understand that the FCC
    has established a broadcast reimbursement deadline of 39 months
    after the auction. If the Commission plans to repack up to
    1,100 local TV stations, there is a reasonable question about
    whether that 39 month deadline is technically feasible with so
    few tower crews, structural consultants, a lack of antenna
    manufacturing capacity, among other things.
        Even if we assume that all of those issues are resolved,
    there is still the outstanding issue of whether or not the
    relocation fund will be sufficient to pay for moving all of the
    broadcasters. You have responded to some of those concerns,
    stating that you have no reason to believe that the $1.75
    billion broadcaster relocation will be insufficient to cover
    their relocation costs.
        That leaves a secondary question of, what if the fund isn't
    sufficient to pay for the moving of all broadcasters? Again,
    your Commission stated that you believe the fund will be
    sufficient, but if it is not, the FCC has the authority to
    develop a prioritization scheme for reimbursement claims. What
    would this scheme entail?
        Mr. Wheeler. So, obviously, it is a hypothetical at this
    point in time----
        Mr. Kinzinger. Right.
        Mr. Wheeler [continuing]. And you would want to know what
    the realities of the situation are. The $1.75 billion is a
    number that set by the committee, and we will adhere to that.
    There is----
        Mr. Kinzinger. Well, no, I understand. I have limited time,
    but if it is not sufficient. So you said you would prioritize.
        Now, are you saying that you would provide funding over the
    $1.75 billion? Or would you be pulling from one broadcaster to
    pay another? How is that going to work?
        Mr. Wheeler. So we are limited to $1.75 billion. One of the
    challenges of the whole auction is it is an auction, and you
    don't know what the result is going to be.
        Mr. Kinzinger. Yes.
        Mr. Wheeler. And so we could sit here and hypothesize----
        Mr. Kinzinger. But we need to hypothesize, to an extent,
    because----
        Mr. Wheeler. I am sorry, what?
        Mr. Kinzinger. I said, to an extent, we need to
    hypothesize, because we have to plan, we have to understand so
    we are not surprised.
        Mr. Wheeler. And what that means is you have to be ready to
    be able to deal with the issue should it arise.
        Mr. Kinzinger. Yes.
        Mr. Wheeler. And that includes maybe coming back to
    Congress and saying, hey, there were some judgment calls here
    that didn't work out. And so, that may be----
        Mr. Kinzinger. But you see it--potentially on the table
    would be prioritizing broadcasters or maybe pulling from one--
    --
        Mr. Wheeler. So, actually, I think that the broadcasters--I
    don't want to get in the situation where you are picking and
    choosing.
        Mr. Kinzinger. Yes.
        Mr. Wheeler. That is not the job of this agency.
        Mr. Kinzinger. No.
        Mr. Wheeler. I do want to be in a situation of adhering to
    the law, which says 1.75.
        Mr. Kinzinger. OK.
        Mr. Wheeler. And if that means we have to come back and say
    to the committee, hey, it didn't work and here are the facts--
    but I haven't got those facts to give you now.
        Mr. Kinzinger. OK.
        For the whole panel, let's assume for a moment that the 39
    month deadline for relocating broadcasters can't be met. And I
    know you assume it can. Let's assume for a moment it can't.
    Would you allow broadcasters to be forced off the air at that
    point?
        Mr. Wheeler. No.
        Mr. Kinzinger. I guess we will start with Mr. O'Rielly.
        Mr. O'Rielly. No, sir.
        Mr. Pai. No.
        Ms. Rosenworcel. No.
        Ms. Clyburn. Absolutely not.
        Mr. Wheeler. No. And the interesting thing is we have a 6-
    month extension that is provided for now. And the other thing
    that is fascinating to us is that, when the NAB participated in
    this, they told us they would only need 30 months.
        Mr. Kinzinger. OK.
        Mr. Wheeler. And, we are all learning as this process goes
    on.
        Mr. Kinzinger. Yes.
        And not to skip back to the relocation fund, but one of the
    things I want to make sure, though, is one of the possibilities
    is not forcing broadcasters to then shoulder the cost of it if
    it is above $1.75 billion, right?
        Mr. Wheeler. This is clearly no one's goal.
        Mr. Kinzinger. OK. Well, that is good. It is not anybody's
    goal; I just want to make sure it is not really there as an
    option.
        Mr. Wheeler. I understand, Congressman.
        Mr. Kinzinger. Commissioner O'Rielly, in a welcome sign of
    the kind of collaboration that we expect but seldom see on the
    Commission, you and Commissioner Clyburn both issued a joint
    statement of support for the public notice recently issued to
    remind USF recipients of expenditures that should not be
    supported by the universal service.
        Your joint statement went further and stated concerns with
    certain other expenses not related to the provision of service,
    such as for artwork and cafeterias, that may be permitted under
    certain readings of the rules. You both called on the
    Commission to initiate a proceeding to address these issues in
    the coming months.
        Commissioner O'Rielly, what would be the benefits of such a
    proceeding?
        Mr. O'Rielly. So the vast number of rural carriers do a
    wonderful job in serving and completely don't do some of these
    practices. But we have found that some providers have been
    doing a very interesting reading of our rules. We do not
    believe that the scarce universal service funding should go to
    things like artwork within the building of the provider or
    building a cafeteria for their employees. So we want the
    dollars to be spent on building out networks and providing
    service to consumers.
        Mr. Kinzinger. And, basically, everybody on the panel would
    agree, I think, this?
        Mr. Wheeler. Yes.
        Mr. Kinzinger. All right.
        Mr. Chairman, hopefully that is----
        Mr. Latta. Thank you very much.
        Mr. Kinzinger [continuing]. That is good input. And I will
    I yield back.
        Mr. Latta. The gentleman's time has expired.
        And also, the chair has heard that we might have votes
    around 1:05 to 1:20. So if we can keep our questions at 5
    minutes, I would appreciate it.
        And the gentleman from Vermont is recognized for 5 minutes.
        Mr. Welch. Thank you very much. Sorry for my absence.
        First of all, I want to thank the Commission for the
    tremendous work that you do. There are very hard, contentious
    issues. In the hope that we have on this committee--Bob Latta
    and I, of course, started the Rural Working Group--and I know
    the hope on your Commission is that you would find ways to work
    together in a contentious time.
        But let me ask, Commissioner Pai, you had indicated your
    problem with the enforcement process now, and I heard you loud
    and clear. I just thought I would ask Mr. Wheeler, I would give
    you an opportunity to respond to that.
        Because I assume all of you hope, against hope at times,
    that you can get a bipartisan votes. That eludes us on this
    panel more than we would like. It eludes you on your Commission
    more than you would like.
        But, Mr. Wheeler, I would like you to at least have an
    opportunity to respond to Commissioner Pai.
        Mr. Wheeler. Well, thank you. And, as I said, we have been
    following the processes that have been in place for the
    Commission for years and years and years. There are actually
    fewer notices of apparent liability that have been issued than
    when Commissioner Pai was in the General Counsel's Office. So
    there have been some changes in that regard.
        We want to make sure the Commissioners continue to get
    briefed on a regular basis, as they always have. And we want to
    recognize that there are certain things that are law
    enforcement activities and certain things that are policy
    activities.
        Mr. Welch. Yes. All right. Thank you.
        And, Commissioner Rosenworcel, I want to thank you.
        Commissioner Rosenworcel came up to Vermont. People were
    impressed. You might want to have her in Indiana.
        But you were talking about the homework gap. And that is,
    in fact, a big deal. What kind of progress are you making, and
    what can we do to be helpful?
        Ms. Rosenworcel. Thank you. I appreciate the question. And
    I appreciated the opportunity to head home to New England, too.
        I think the homework gap is the cruelest part of our new
    digital divide, but it is within our power to bridge it and fix
    it. We can update a low-income program known as Lifeline to
    make sure it supports broadband. We should focus in a laser-
    like way on households that have children who are in school.
    And we should also promote the availability of more unlicensed
    spectrum and WiFi.
        Those things will all make a difference, as will more
    public- and private-sector partnerships to help bring computers
    and broadband to students who are in school.
        Mr. Welch. OK.
        And you also spoke in the beginning about ``dig once.''
        I wonder, Mr. Pai and Mr. O'Rielly, that seems to me to be
    such a practical way to try to avoid cost and have the money
    spent really, Mr. O'Rielly, in the way you were suggesting,
    where other moneys were not properly spent.
        Is that something we can make progress on? Ms. Eshoo has
    been a leader on this. But I will start with you, Mr. Pai, and
    then you, Mr. O'Rielly.
        Mr. Pai. Thanks for the question, Congressman.
        I think, absolutely, there is bipartisan agreement here, as
    there is on this panel, on ``dig once'' and other policies like
    it. As I pointed out in my testimony, I think the six pieces of
    legislation that you have introduced and/or are considering are
    terrific.
        And I have seen that for myself. Just last week, I was in
    Hammond, Louisiana, stringing fiber along mud in the Bayou, and
    I heard firsthand how difficult it is to navigate around some
    of these regulatory obstacles.
        Mr. Welch. Well, Mr. Chairman, I hope we can really do
    that.
        Mr. O'Rielly?
        Mr. O'Rielly. Yes, I support the legislation, but I think
    it may require Congress to--we can't do it ourselves--require
    congressional action, and we support that.
        Mr. Welch. OK. So you are really recommending to this panel
    that we do everything we can to do something sensible to save
    money and expand access.
        Mr. O'Rielly. Absolutely. And there is a number of build-
    out ideas my colleagues and I have had, and we think those
    would be very hopeful.
        Mr. Welch. All right.
        Mr. Chairman, I move the bill. We can get away with it. We
    are here.
        Mr. Latta. Is the gentleman yielding back there?
        Mr. Welch. I am not yielding. I still have another minute.
        Mr. Latta. OK.
        Mr. Welch. Mr. Wheeler, on the broadband speed, you know,
    there are two standards out there now, 10/1 versus 25/3. So
    that conflict is a conflict, and I am wondering if you can
    address that.
        Mr. Wheeler. Thank you, Congressman.
        Yes, 25 down and 3 megabits up is what we call table
    stakes, and it is available today to about 80 percent of the
    population. The problem is it is not available to 20 percent of
    the population, and how do we get there.
        So, first, you have to have universal service reform that
    makes sure that money is being spent to expand broadband. And
    then, secondly, you have to recognize that this is a growing
    process, that the most expensive part of building broadband is
    laying the fiber. After that, it is all electronics, and the
    cost actually declines.
        So how do we get broadband, good broadband, but not what we
    would like to see across the board, out first? And that is what
    we are saying. So we will support 10/1 as a minimum. But a lot
    of people are building more. I was at the NTCA convention and
    met a gentleman from North Dakota who said that he serves
    14,000 square miles, has 4,000 subscribers, and he has fiber to
    the home.
        Mr. Welch. That is great.
        I see my time is up, but I just want to at least thank--I
    can't ask my question--Commissioner Clyburn, who also came to
    Vermont and gave an outstanding presentation to all our utility
    folks.
        So thank you very much, Commissioner.
        Mr. Latta. Thank you.
        The gentleman's time has expired.
        The chair now recognizes the gentleman from Missouri for 5
    minutes.
        Mr. Long. Thank you, Mr. Chairman.
        Chairman Wheeler, I am going to channel my inner Chairman
    Dingell here and ask for a yes-or-no answer to a simple
    question.
        Isn't regulating broadband providers, but not anybody else,
    going to create confusion or even a false sense of security
    among consumers that whatever rules apply to broadband
    providers will apply to whoever sees their information on the
    Internet, yes or no?
        Mr. Wheeler. I am sorry, I didn't understand what you were
    saying at the end. Whoever sees----
        Mr. Long. Shouldn't consumers have the same protection on
    privacy issues, shouldn't they assume that they have the same
    protection, whether they are going over a line or whether they
    are using a third party? Shouldn't the protections be the same?
        Mr. Wheeler. There should be uniform expectation of
    privacy, yes, sir.
        Mr. Long. OK.
        Even if you can't or just don't want to impose privacy
    obligations on other entities, what steps should other agencies
    or Congress take to ensure that consumers' information is
    protected in a uniform manner on the Internet?
        Mr. Wheeler. Well, as you say, we have said that we will
    not regulate edge providers. And the FTC has moved with its own
    set of guidelines. The administration has its white paper. And
    I expect that what we do will be operating within those same
    kind of concepts so that there is some parity along the way.
        Mr. Long. Regulating the edge providers differently.
        Mr. Wheeler. No, we will not be regulating the edge
    providers differently.
        Mr. Long. You won't.
        Mr. Wheeler. We will not.
        Mr. Long. OK.
        Commissioner Pai, do you want to weigh in on this?
        Mr. Pai. Congressman, I think this is essentially the
    problem, is that if consumers are to have a uniform expectation
    of privacy, then it would seem to follow from that that
    everybody in the broadband ecosystem, from your Internet
    service provider all the way to the edge provider, should face
    the same regulations.
        Mr. Long. Right. I mean, to me, that makes common sense,
    and that is what I am trying to get to.
        Commissioner O'Rielly, do you have any comment on that?
        Mr. O'Rielly. I agree with my colleague's point. I imagine
    that when this item is done we are going to have different
    regimes for different types of--based on the provider used or a
    third-party provider. And that is going to be problematic for
    consumers.
        Mr. Long. OK.
        Chairman Wheeler, in STELA, this committee requested that
    the GAO, Government Accountability Office, study the impact of
    any phaseout of the compulsory copyright licenses for cable and
    satellite on the related provisions in the communications law.
    The GAO is currently conducting that study and has yet to
    report back to Congress on its findings.
        I have concerns with the FCC moving ahead and repealing
    exclusivity rules which are interrelated with these licenses
    before GAO has reported back to this committee and has made any
    predetermination as to the appropriate public policy decision.
    Is it necessary that the FCC phase out these rules now, which
    seems premature?
        Mr. Wheeler. Thank you, Congressman.
        STELA also required the Commission to begin a proceeding on
    retransmission consent negotiations. Exclusivity is an issue
    that factors into that. I think that is the appropriate place
    to address it.
        Mr. Long. OK.
        I will stay with you, Chairman Wheeler. I have a little
    time here left, I think.
        As you know, the committee has been very active in working
    to find ways to get more spectrum into the commercial
    marketplace to fuel the growing need for broadband. We have
    taken a series of legislative steps to make that happen, but
    the FCC plays a crucial role here also.
        One area where we can make quick progress is
    commercializing the spectrum of 1675 to 1680 megahertz. This
    spectrum has been the subject of a 3-year-old proceeding at the
    FCC, and both Congress and the administration have offered
    budget language encouraging its use for the wireless broadband
    by 2017. So how and when will the FCC complete these
    proceedings?
        Mr. Wheeler. For 16 gig? We are looking----
        Mr. Long. Yes.
        Mr. Wheeler. We are looking at all of the above-3-gig
    spectrum. I believe that we will----
        Mr. Long. 1675 to 1680 megahertz is what I am----
        Mr. Wheeler. Megahertz?
        Mr. Long. Yes. Not gig, megahertz.
        Mr. Wheeler. Sorry. I thought you were talking about the
    upper band.
        I can't answer that question specifically, sir, and give
    you a time. I will be happy to get back to you.
        Mr. Long. Yes, I would love for you to get back to my staff
    on that.
        And, as you know, this committee has been very active in
    working to find ways to get more spectrum into the commercial
    marketplace to fuel the growing need for broadband. We have
    taken a series of legislative steps to make that happen. But,
    like I say, you all play a crucial role. So if you could check
    that out and get back to me, I would really appreciate that.
        Mr. Wheeler. We certainly agree with the importance of
    doing that.
        Mr. Long. I yield back.
        Mr. Latta. Thank you.
        The gentleman yields back.
        And, also, the members see that they have just called our
    first votes, with about 13:49 left.
        And the chair now recognizes the gentlelady from New York.
        Ms. Clarke. Thank you, Mr. Chairman. And I thank our
    ranking member, Ms. Eshoo. And I would like to thank our
    Commissioners for their appearance and responses today.
        Like many of you, I am encouraged, actually excited, about
    the recent signing of the bipartisan budget agreement, which
    included provisions of the Spectrum Pipeline Act of 2015 that
    is based on a draft that my office introduced. And I look
    forward to the FCC fulfilling the goals of this act and
    identifying and repurposing wireless spectrum from Federal to
    commercial uses.
        More spectrum can only translate into more opportunities
    for our Nation's citizens, particularly those from historically
    underserved communities where wireless broadband is often the
    only gateway to opportunities.
        On this point, I have a question related to increasing
    engagement for seasoned and aspiring entrepreneurs and
    businesses of color in the upcoming spectrum auction and
    beyond. But, prior to that, I would just like to say to
    Commissioner Clyburn, congratulations on the reform of the
    inmate calling services. This will help to mitigate a lot of
    the hardship millions of families across our Nation have faced
    in dealing with that service.
        But I would like to ask, do you see the FCC's revamped
    designated-entity rules as sufficient enough to create
    opportunities for minority spectrum ownership? And what can the
    FCC do to enhance and incentivize secondary market transactions
    that have the potential to drive more diversity in minority
    ownership of commercial wireless spectrum?
        I was directing that to you, Commissioner Clyburn.
        Ms. Clyburn. OK. Thank you very much. I appreciate it.
        A number of things that we have done in the past year and a
    half or so, I think, will stimulate the marketplace and the
    ecosystem.
        We repealed the attributable material relationship rule and
    the former defaulter rule because we recognize that, while
    well-intentioned, they were keeping businesses, particularly
    diverse businesses, out of the market.
        We also adopted a rural bidding credit, which will give
    more incentive to those in those particular areas, which is a
    twofer. It would, you know, stimulate more deployment in those
    particular areas, and it would allow for more opportunities in
    a smaller footprint.
        We also are looking at small-business incentives, bidding
    credits, that, again, would stimulate that type of investment
    and opportunities.
        And, of course, we are always looking for ways to stimulate
    secondary-market transactions. Again, a smaller footprint, in
    some cases, and a more laser-beam focus.
        And so we are looking at and continuing conversations with
    those who have great ideas to really do what we can to
    diversify the ecosystem for businesses of all sizes and
    businessowners from all backgrounds.
        Ms. Clarke. Thank you. That is encouraging. We want to
    definitely stay focused on that. There have been some
    substantial losses, particularly in black communities, over the
    years, and we would like to see opportunities particularly for
    young, more inspired businessowners and entrepreneurs to really
    gain a foothold in this market.
        Shifting gears a bit, the FCC appears to have been focused
    on expanding online video platforms, but there still appears to
    be challenges in getting the content directly to the consumer,
    as evidenced in the current AllVid debate.
        So I want to drill down just a little bit and ask Chairman
    Wheeler: The proposal made by the AllVid proponents in your
    DSTAC proceedings requires a new box just to get the MVPD
    content to the new retail device. Instead of getting rid of
    boxes, AllVid requires an additional box. And I think you have
    heard colleagues commenting on this this morning.
        This is a concern on two fronts for consumers, increased
    box costs and increased energy costs, in addition to no
    guarantee of consumer protection. This seems out of step with
    today's marketplace.
        Aren't these increased costs and diminished consumer
    protections a concern for the FCC, as well?
        Mr. Wheeler. Thank you, Congresswoman.
        There has been a lot of talk today about AllVid, which is a
    half-dozen years old and apparently somebody has wanted to
    resurrect.
        We have just finished a comment period on the DSTAC
    requirement that was in STELA. It was finished last week. The
    making of conclusions from that is premature.
        We believe that section 629 says to us that we have the
    responsibility to assure that there is competitive choice in
    terms of navigation devices. DSTAC had several approaches as to
    how to do that. The decision about where you go from there is
    one that we have not yet made because the comments just closed
    last week.
        Ms. Clarke. Well, let me just say this. I think it is clear
    that we need to monitor this very closely. Because there is no
    doubt, if two devices are needed, there is going to be an
    increase in energy costs. There is no doubt about that.
        Mr. Wheeler. It is also possible there could be no devices
    needed and there would be a reduction in cost. I mean, that is
    the interesting thing that we have to----
        Mr. Latta. And I am sorry to have to cut the Chairman off.
    We have----
        Ms. Clarke. Yes. No problem. I yield back, Mr. Chairman.
        Mr. Latta [continuing]. About 7 minutes left on the roll
    here.
        And the chair now recognizes the gentleman from New York
    for 5 minutes.
        Mr. Collins. Thank you, Mr. Chairman. I guess we will see
    if I can be a little bit brief.
        Mr. Wheeler, at the end of July, in this hearing room, I
    asked you about pirate radio. I am a New Yorker. That is a big
    issue certainly down State, even though I am from the Buffalo
    area. And I did send you a letter signed by the entire New York
    delegation----
        Mr. Wheeler. Yes, sir.
        Mr. Collins [continuing]. And most of the New Jersey
    delegation, including Ranking Member Pallone.
        But, since then, I have continued to be disappointed. There
    have only been, as I understand it, five or six fines issued
    related to pirate radio. And it is such a small number, it is
    certainly the feeling within the industry that that has done
    nothing to address the serious issue, that we consider a
    serious issue, of the multiple pirate radio operators that
    continue to operate in the New York metropolitan area.
        So, you know, my contention is, you know, to be very
    direct, that you have paid this lip service and, frankly,
    little more than lip service. You know, you decimated the
    Enforcement Bureau. You have closed offices and eliminated
    field engineers in an effort you call consolidation. But I can
    tell you, coming from the business sector, and I do understand
    consolidation, you need results to go with it, and, in this
    case, there have been few to no results.
        So my staff called your Enforcement Bureau and said, ``Can
    you give us an update on what is going on with pirate radio and
    the enforcement efforts?''--directly to your Enforcement
    Bureau. I don't know if you will be surprised to hear this.
    Their comment was, ``We are not handling that. You will have to
    call Mr. Wheeler's personal office to find out what is being
    done on pirate radio.''
        My perspective? That is an embarrassing runaround,
    disrespectful to my office for sure, that your Enforcement
    Bureau says, ``We are not doing anything.''
        Mr. Wheeler. I agree with you, sir.
        Mr. Collins. So I would like you and would ask you to get
    back to us----
        Mr. Wheeler. Yes, sir.
        Mr. Collins [continuing]. In particular to my staff, who
    came off of that phone call and you can imagine the comments
    that they made about what we consider to be lip service to
    pirate radio. And if nothing else, if that is all it is, tell
    us that is all it is. But I would very much appreciate not
    having to wait months to get a response on this, because I
    found that unbelievable, frankly.
        Mr. Wheeler. So do I.
        Mr. Collins. Well, good. So I will look----
        Mr. Wheeler. Because the reality is, as I said in my
    statement, Congressman, there have been 280 enforcement actions
    that we have taken in the last 2 years under my chairmanship.
    And we have a joint task force that we are working with the NAB
    on this.
        And I suggested in my testimony that there were also some
    additional steps that Congress could take to help us deal with
    the landlords, because they are the ones who are facilitating
    this. And the pirate radio folks, you shut them down, they
    thumb their nose at you, and they go someplace else.
        Mr. Collins. No, we understand that piece. But we were
    quite frustrated by the----
        Mr. Wheeler. I would be, too.
        Mr. Collins [continuing]. Very direct response----
        Mr. Wheeler. I would be, too.
        Mr. Collins. So we will just jointly dig to the bottom.
        Mr. Wheeler. We will fix that.
        Mr. Collins. Now, the other thing--and I reach out to the
    industry and ask them to help me with some questions. I am
    sitting here at the bottom of the dais, and, usually, by the
    time, 30 other questions are asked. And I will tell you, what
    came back from me asking them to ask you was really a
    frustration they see right now in the investment side, actions
    that are a wet blanket and really having a negative impact on
    investments.
        But they also pointed out, from their perspective--and I
    don't know whether this is a rhetorical comment or asking a
    question, but--what they see from the FCC as selective
    enforcement on the TTY issue, spectrum set-asides for companies
    who are not participating in the auctions, and onerous
    regulations extended to new technologies like streaming video
    that do nothing but discourage investments.
        Mr. Wheeler. Thank you for asking. Let me see if I can tick
    them off real fast.
        Mr. Collins. All right.
        Mr. Wheeler. TTY. It is really interesting. AT&T asked for
    a waiver. We granted them the waiver. We called them and said,
    ``We are going to grant you the waiver.''
        They followed the next day with a letter saying, ``Why
    haven't you granted us the waiver? And, by the way, what about
    our competitors on this?''
        We went back to them, and we said, ``Would you file a
    complaint so we can see if it is appropriate to take
    enforcement?''
        Mr. Collins. I am about to run out of time.
        Mr. Wheeler. They didn't want us to do that.
        And, secondly, on over-the-top, we have started a
    rulemaking on that. The purpose of rulemakings is to learn. We
    learned the vast number of things that are developing very
    rapidly. And we have not moved forward on that notice of
    proposed rulemaking. And I don't see, until the situation
    changes, that we would.
        And I forget your third.
        Mr. Collins. That is OK. My time has expired.
        Mr. Latta. The gentleman's time has expired.
        Mr. Collins. And I do look forward to catching up with you
    on the enforcement piece. Thank you.
        Mr. Latta. The chair now recognizes the gentleman from
    Illinois for 5 minutes.
        Mr. Rush. I want to thank you, Mr. Chairman.
        And I also want to commend the Commission and Commissioner
    Clyburn, in particular, for the capping on the predatory phone
    rates for our inmates across the country.
        But I wanted to ask the Commission in general, I want to
    raise a question and raise an issue that is affecting my city,
    Chicago, other urban areas all across the Nation, and this is
    on the issue of urban violence.
        There have been 2,587 shootings and 435 murders in Chicago
    so far this year--more than L.A. And New York City combined.
    And it is well-known that these gang leaders who are primarily
    perpetrating this violence, that they are using social media to
    advance their agendas and their conflicts.
        Knowing that the FCC has limited jurisdiction over
    Facebook, Twitter, and Instagram, is there anything within the
    realm of public safety that the FCC can use to help address and
    curtail this violence? Can and will the FCC add its important
    voice, its stature, to this dynamic discussion?
        Mr. Wheeler. Mr. Rush, the situation that you describe is,
    as you say, tragic. It is not dissimilar to what Mr. Barton
    raised a moment ago with regard to terrorist threats and
    terrorists using social media.
        We do not have jurisdiction over Facebook and all the other
    edge providers. We do not intend to assert jurisdiction over
    them. And I don't believe that they are--as legitimate as your
    concern is, I don't believe that we have the jurisdiction to do
    the kind of thing that you suggest.
        Mr. Rush. That means that you don't think that the FCC
    could weigh in on this in any way?
        Mr. Wheeler. I am happy to use the bully pulpit. I am happy
    to talk to Mark Zuckerberg and others to raise this issue and
    to say, hey, this is important kind of thing, we need to be in
    this together. But we don't have regulatory authority.
        Mr. Rush. I am not seeking regulatory.
        Mr. Wheeler. OK.
        Mr. Rush. I would grant you that I don't believe that you
    have jurisdiction. But I think that there is a bully pulpit,
    that you and others may be able to address this issue. I am not
    trying--I don't want to----
        Mr. Wheeler. I will call Mark Zuckerberg this afternoon to
    raise the issue that you have raised and the issue that Mr.
    Barton has raised. And I am sure that he is concerned about it,
    as well, and he will have some thoughts.
        Mr. Rush. Thank you.
        Ms. Clyburn. Right quickly, sir. Good to see you. And thank
    you for the acknowledgement.
        One thing that we are acting on and working with law
    enforcement and other authorities are stolen phones, as people
    are still using throwaway phones and burner phones or whatever
    you want to call them to commit crimes. We are continuing to
    work--our Consumer and Government Affairs Bureau is working
    with our sister agencies and then, like I said, law enforcement
    authorities and mayors across this Nation to address that
    issue. So where we can, we will.
        Mr. Rush. Thank you.
        Does any other Commissioner have anything to offer?
        Mr. Pai. Congressman, this doesn't directly relate to
    social media, but one of the things that I was disturbed to
    find when I visited a maximum-security prison in Georgia
    recently was that the use of contraband cell phones is having a
    direct and severe effect on people outside of prisons. I heard
    about family members, witnesses, and others, crime victims,
    who, because of the use of contraband cell phones in prison,
    have faced threats, including to their very lives.
        And I think that is something where the agency, a couple of
    years ago, teed up a number of different ideas. And I think it
    would be appropriate for the agency to come to closure on that
    to help protect some of these people, disproportionately
    minority, who are getting, some killed or robbed or otherwise
    threatened by use of this technology.
        Mr. Rush. Thank you, Mr. Chairman. I yield back.
        Mr. Latta. Thank you very much.
        The gentleman yields back.
        Just to let everyone know, we are about 18 minutes into
    this vote, with about 230 that haven't voted.
        And the chair recognizes the gentleman from Florida.
        Mr. Bilirakis. Thank you, Mr. Chairman. I will be as brief
    as I possibly can.
        Thank you for the Commissioners' testimony today. I really
    appreciate it so much.
        Chairman Wheeler, as part of the Enforcement Bureau's
    ongoing work, it is my understanding that there has been a
    letter of inquiry, or LOI, seeking information from a hotel
    chain on all of the properties from, again, its name, the name
    of the hotel chain--including franchises, over which it may not
    have any legal authority.
        To your knowledge, does the Enforcement Bureau have any
    reason to believe there are violations of the Commission's
    rules at these facilities? That is the first question.
        Mr. Wheeler. Thank you, Congressman.
        Typically, an LOI, a letter of inquiry, is sent when there
    is a belief that this is and they are seeking information to
    find out whether that belief is factual.
        Mr. Bilirakis. Based on the size of the request--again, all
    the properties--the cost to the hotel and loss of productivity
    and wages would seem to be quite high, I am sure you will
    agree, given the technical nature of the request, without any
    notion that this fishing expedition will bear fruit for
    consumers.
        Isn't this exactly the kind of thing that a cost basis
    analysis would prevent from being unnecessarily imposed on,
    again, American job creators? Would you agree with that?
        Mr. Wheeler. Thank you.
        There have been multiple actions that we have brought
    against hotel chains because what they have been doing is
    jamming the signals of people like you and me in order----
        Mr. Bilirakis. You are sure of that? You are certain of
    that?
        Mr. Wheeler. I am certain we have brought these actions and
    that is what was going on and that what has happened is that
    they have been forcing people to buy services from them instead
    of using the licensed services that we have authorized. And
    section 333 of the act says that we have a responsibility to
    protect the licensed services that we authorize. And----
        Mr. Bilirakis. And it specifically states that in the act--
    --
        Mr. Wheeler. Yes, sir.
        Mr. Bilirakis [continuing]. With regard to WiFi. Is that
    correct?
        Mr. Wheeler. It is an appropriate service of the agency.
        And so I am unfamiliar with exactly the specifics that you
    are talking about here, but if there is a letter of inquiry
    that was sent out, I would imagine that there have been some
    indications of difficulties and WiFi access being blocked in
    contravention of the law.
        Mr. Bilirakis. You are assuming that. OK. Thank you.
        Commissioner Pai, there has been some renewed attention to
    the TCPA this summer. The FCC recently passed a package of
    declaratory orders, but I fear they didn't impose real reforms
    to actually stop unwanted calls or help on this. And maybe it
    would cause unnecessary litigation.
        A statement from the Chairman about telephone townhalls had
    been quickly corrected after our last oversight hearing, within
    a few hours, I understand. I have a different question this
    time for this hearing.
        We talked about apps for customer relationship management
    and whether a smartphone is or can be an autodialer under the
    FCC's majority's interpretation. There are many small
    businesses in America, in my district as well, that rely on
    smartphones to run their businesses.
        I have a few questions. Yes-or-no answers would be greatly
    appreciated.
        Mr. Pai. Sure.
        Mr. Bilirakis. If a small business owner has a smartphone
    and uses one of those apps, has that person violated the TCPA,
    in your opinion?
        Mr. Pai. Yes, according to the majority.
        Mr. Bilirakis. Could that person be subject to FCC
    enforcement action even for a misdial?
        Mr. Pai. Yes.
        Mr. Bilirakis. Unbelievable.
        Would that person be subject to the private right of action
    provided under the TCPA?
        Mr. Pai. Yes.
        Mr. Bilirakis. OK.
        Commissioner Rosenworcel, is this a result that you
    support?
        Ms. Rosenworcel. Well, let me be clear. I don't like
    robocalls, and I think most people are not fond of them. So I
    think we should take any and all actions we can to prevent
    them, because those unwanted calls are not something that
    people are all that eager to receive.
        Mr. Bilirakis. However, we are not accomplishing our goal--
    --
        Ms. Rosenworcel. No, but let me speak to you exactly to
    what you were talking about with autodialers.
        The Telephone Consumer Protection Act was passed in 1991.
    In 1991, an autodialer was a big, bulky piece of equipment. One
    of our challenges today is that we have to still use that law
    when we have software that can accomplish what that hardware
    did decades ago.
        And so I think the struggle that the agency has is trying
    to figure out how to manage with a statute that didn't
    contemplate the digital world we live in today.
        Mr. Bilirakis. OK. Let me ask you again. Do you----
        Mr. Latta. I am sorry. The----
        Mr. Bilirakis. OK. Yes, we have to go.
        Mr. Latta [continuing]. Gentleman's time has expired.
        Mr. Bilirakis. All right. I am going to submit something
    for the record.
        [The statement of Mr. Bilirakis follows:]

                  Prepared statement of Hon. Gus M. Bilirakis

        I would like to register my disappointment in your October
    22 order limiting the ability for jails to collect commissions
    on inmate phone calls. We've exchanged letters on this issue
    this year, and law enforcement officials in my district, like
    Sherriff Chris Nocco from Pasco County, continually inform me
    how important these fees are to their operations.
        Services like GED programs, parenting classes and industry
    certification training programs are solely funded by these
    fees, and now are at risk of termination.
        While it's on questionable legal grounds that the FCC can
    even regulate intrastate rates charged by payphone service
    providers in the first place, the practical result of this
    order will cap rates in aggregate so that revenues won't cover
    expenses at all.
        Reintegration services will disappear, and that's a shame.
        Thank you and I yield back.

        Mr. Bilirakis. Thank you, Mr. Chairman.
        Mr. Latta. Thank you very much.
        And the chair recognizes the ranking member.
        Ms. Eshoo. Thank you, Mr. Chairman.
        Just very quickly, two things.
        Thank you to all of the Commissioners. I have some more
    questions. I will put them in writing.
        Commissioner Clyburn, I didn't get to say earlier, thank
    you for your work on Lifeline. Thank you. It is really helping
    to make a difference.
        And to Commissioners O'Rielly and Pai, I hope that I didn't
    hear you siding with people that rip off consumers. Any outfit
    that is going to place charges on a consumer's bill and bilk
    them, I don't think that is the place where anybody wants to
    stand. Now, maybe you have some other issues with the
    enforcement part of the agency. But that is not only the wrong
    side, it is the wrong side of history.
        Mr. Chairman, I would like to ask for a point of
    clarification on the introduction of multimedia during our
    hearings. Earlier in our hearing today, one of our colleagues
    introduced a video as part of her line of questioning without
    asking for objection. As you know, when letters or other
    written materials are entered into our record, we first have to
    ask for unanimous consent.
        The Democrats on the committee had previously sent a letter
    to our Republican colleagues asking them, when video or other
    multimedia evidence is introduced, that we first check with our
    colleagues on the other side. Now, she may not have known that
    that request should have been made.
        And I think, for regular order here, no side ever wants to
    be surprised. So I ask----
        Mr. Latta. If I could----
        Ms. Eshoo. But let me just ask the parliamentarian the
    following----
        Mr. Latta. Well, just if I could, to the ranking member,
    because of the interest of time and we are going to miss the
    vote, if we could ask our staffs to work together on your
    question.
        Ms. Eshoo. Yes, but let me put my question----
        Mr. Latta. OK.
        Ms. Eshoo [continuing]. Out there so it is a part of the
    record.
        It is a parliamentary inquiry, and it is the following: Can
    you provide some clarification as to whether video and
    multimedia evidence will be treated the same as written
    materials as a matter of this subcommittee's process?
        And we will await the----
        Mr. Latta. We will work with our staff.
        Ms. Eshoo. Yes. Not the staff, the parliamentarian.
        Mr. Latta. OK. Thank you.
        Ms. Eshoo. Thank you, Mr. Chairman.
        Mr. Latta. And if I could real quickly just, again, thank
    the Commission for being with us today. On behalf of the
    chairman of the subcommittee and also the ranking, we thank you
    for your time.
        And, without any other questions coming before us, we stand
    adjourned.
        Ms. Eshoo. Thank you.
        [Whereupon, at 1:25 p.m., the subcommittee was adjourned.]
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