[Senate Hearing 114-575]
[From the U.S. Government Publishing Office]
S. Hrg. 114-575
OVERSIGHT OF THE
FEDERAL COMMUNICATIONS COMMISSION
=======================================================================
HEARING
before the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 15, 2016
__________
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Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri MARIA CANTWELL, Washington
MARCO RUBIO, Florida CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas EDWARD MARKEY, Massachusetts
DAN SULLIVAN, Alaska CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin TOM UDALL, New Mexico
DEAN HELLER, Nevada JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado GARY PETERS, Michigan
STEVE DAINES, Montana
Nick Rossi, Staff Director
Adrian Arnakis Deputy Staff Director
Jason Van Beek, General Counsel
Kim Lipsky, Democratic Staff Director
Chris Day, Democratic Deputy Staff Director
Clint Odom, Democratic General Counsel and Policy Director
C O N T E N T S
----------
Page
Hearing held on September 15, 2016............................... 1
Statement of Senator Thune....................................... 1
Statement of Senator Nelson...................................... 4
Letter dated February 12, 2016 to Hon. Tom Wheeler, Chairman,
Federal Communications Commission from Hon. Bill Nelson.... 70
Statement of Senator Wicker...................................... 29
Statement of Senator Cantwell.................................... 31
Statement of Senator McCaskill................................... 32
Statement of Senator Fischer..................................... 33
Statement of Senator Blunt....................................... 34
Statement of Senator Klobuchar................................... 36
Statement of Senator Moran....................................... 38
Statement of Senator Schatz...................................... 40
Statement of Senator Daines...................................... 41
Statement of Senator Markey...................................... 43
Statement of Senator Gardner..................................... 46
Statement of Senator Booker...................................... 48
Article dated August 28, 2016 from The New York Times
entitled ``Broadband Law Could Force Rural Residents Off
Information Superhighway'' by Cecilia Kang................. 48
Statement of Senator Sullivan.................................... 52
Statement of Senator Udall....................................... 54
Statement of Senator Blumenthal.................................. 56
Article dated March 2, 2016 from the Seattle Times entitled
``FCC right to think outside the cable set-top box'' by the
Seattle Times editorial board.............................. 58
Article dated February 10, 2016 from The Boston Globe
entitled ``FCC Should Unlock Savings for Cable Consumers''. 59
Article dated April 20, 2016 from Bloomberg View entitled
``Cheaper Cable TV Starts With A Better Box''.............. 60
Article dated February 15, 2016 from the Chicago Tribune
entitled ``Imagine your viewing options if the FCC unlocks
the cable box'' by the Editorial Board..................... 62
Article dated September 9, 2016 from the Los Angeles Times
entitled ``It's time to kill the cable box'' by The Times
Edirorial Board............................................ 63
Article dated September 15, 2016 from The New York Times
entitled ``Free TV Viewers from Cable Box Fees'' by the
Editorial Board............................................ 65
Statement of Senator Peters...................................... 65
Statement of Senator Johnson..................................... 67
Witnesses
Hon. Tom Wheeler, Chairman, Federal Communications Commission.... 5
Prepared statement........................................... 7
Hon. Jessica Rosenworcel, Commissioner, Federal Communications
Commission..................................................... 11
Prepared statement........................................... 13
Hon. Ajit Pai, Commissioner, Federal Communications Commission... 14
Prepared statement........................................... 15
Hon. Michael O'Rielly, Commissioner, Federal Communications
Commission..................................................... 18
Prepared statement........................................... 20
Hon. Mignon L. Clyburn, Commissioner, Federal Communications
Commission..................................................... 21
Prepared statement........................................... 23
Appendix
Response to written questions submitted to Hon. Tom Wheeler by:
Hon. John Thune.............................................. 75
Hon. Roger F. Wicker......................................... 82
Hon. Roy Blunt............................................... 87
Hon. Kelly Ayotte............................................ 88
Hon. Dan Sullivan............................................ 89
Hon. Ron Johnson............................................. 89
Hon. Cory Gardner............................................ 89
Hon. Bill Nelson............................................. 90
Hon. Maria Cantwell.......................................... 91
Hon. Claire McCaskill........................................ 93
Hon. Amy Klobuchar........................................... 94
Hon. Brian Schatz............................................ 95
Hon. Edward Markey........................................... 96
Hon. Cory Booker............................................. 96
Hon. Joe Manchin............................................. 100
Response to written questions submitted to Hon. Jessica
Rosenworcel by:
Hon. John Thune.............................................. 101
Hon. Deb Fischer............................................. 102
Hon. Cory Booker............................................. 103
Hon. Joe Manchin............................................. 104
Response to written questions submitted to Hon. Ajit Pai by:
Hon. John Thune.............................................. 105
Hon. Deb Fischer............................................. 106
Hon. Ron Johnson............................................. 106
Hon. Claire McCaskill........................................ 107
Hon. Joe Manchin............................................. 109
Response to written questions submitted to Hon. Michael O'Rielly
by:
Hon. John Thune.............................................. 109
Hon. Deb Fischer............................................. 111
Hon. Ron Johnson............................................. 111
Hon. Cory Gardner............................................ 111
Hon. Claire McCaskill........................................ 112
Hon. Joe Manchin............................................. 112
Response to written questions submitted to Hon. Mignon L. Clyburn
by:
Hon. John Thune.............................................. 113
Hon. Roger F. Wicker......................................... 113
Hon. Maria Cantwell.......................................... 114
Hon. Joe Manchin............................................. 114
OVERSIGHT OF THE
FEDERAL COMMUNICATIONS COMMISSION
----------
THURSDAY, SEPTEMBER 15, 2016
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 10:04 a.m. in
room SR-253, Russell Senate Office Building, Hon. John Thune,
Chairman of the Committee, presiding.
Present: Senators Thune [presiding], Nelson, Wicker,
Cantwell, McCaskill, Fischer, Blunt, Klobuchar, Moran, Schatz,
Daines, Markey, Gardner, Booker, Sullivan, Udall, Blumenthal,
Peters, Johnson, Heller, and Manchin.
OPENING STATEMENT OF HON. JOHN THUNE,
U.S. SENATOR FROM SOUTH DAKOTA
The Chairman. Good morning. This hearing will come to
order.
We're delighted to have the FCC Commission Chairman and the
other four Commissioners with us today for an oversight
hearing.
And let me just preface what I'm going to say. My opening
statement is fairly hard-hitting. It is designed in the
interest not of my personal feelings but the importance of the
relationship between the Congress and this institution. I want
people to understand as I make my remarks that that's the vein
in which it is intended.
In the past, people used to say that the telecom policy was
not particularly partisan and that both parties could often
find common ground to work together. The voting record at the
Commission certainly bears that out with the previous five
permanent FCC chairmen combining for just 14 party-line votes
in open meetings during their tenure.
In this Commission, under Chairman Wheeler, this agency has
too often pursued a highly partisan agenda that appears driven
by ideological beliefs more than by a sober reading of the law.
Chairman Wheeler has forced 3-2 votes on party-line items a
total of 25 times. And just to put that in perspective, in 3
years under Chairman Wheeler, the FCC has seen nearly twice as
many partisan votes than in the previous 20 years combined.
What were once very rare events are now standard operating
procedure at the Commission. A free and open Internet,
universal broadband access for all Americans, innovative
offerings for pay-TV customers, and necessary privacy
protections all have broad bipartisan support.
So why has the current FCC continually advanced divisive
policies at the expense of certainty for consumers and
innovators that only bipartisan solutions can offer?
Of course, consensus is not always achievable on every
issue, and I would be the first to acknowledge that, but when
there have been opportunities for common ground, the Commission
has frequently chosen a partisan path over collaboration. By
relying on unnecessarily partisan tactics, Mr. Wheeler has, I
believe, missed opportunities for bipartisan accomplishments.
Chairman Wheeler at times has seemed to use even the
distribution of information about Commission proceedings as a
political weapon. Too often, we have seen conveniently timed
leaks and disclosures used as tools to benefit a partisan
agenda.
But he and I spoke earlier this week, and I reiterated my
call for the FCC to be as transparent as possible. Treating all
Commissioners fairly, not using the disclosure of non-public
information as a sword, would lead to a better process at the
agency, which, in turn, could only improve the Commission's
work product.
While process issues at the FCC may seem to be just a minor
transgression that can be chalked up to business as usual in
Washington, D.C., in this case, it illustrates a divisive
leadership approach which threatens to undermine the
credibility of the agency now and into the future.
This partisanship has been used to do the following things:
a complete upending of how the Internet is regulated, creating
years of uncertainty for everyone; stripping important consumer
protection responsibilities from the Federal Trade Commission;
a failed attempt to override States' rights on municipal
broadband in a power grab that was overturned by the courts;
increasing the size of the Universal Service Fund by billions
of dollars while simultaneously undermining bipartisan efforts
to improve the program's accountability; the unnecessary and
unlawful disclosure of trade secrets; and a plan that could
possibly be adopted later this month to have the FCC and its
Media Bureau design and dictate the future of television apps.
The common thread among these partisan actions by the
agency is a clear intent to install the Federal Communications
Commission as the most important player in the communications
landscape, the arbiter through which all new marketplace
developments and innovations must pass.
If you're an innovator working to develop a new consumer-
friendly Internet-based app, sorry, you need to first make sure
it conforms to the license required and regulated by the FCC.
If you're a mobile subscriber enjoying competitive service
plans that make data more affordable for you, enjoy it while it
lasts, because while the Commission might be OK with that
today, they could easily deem it unlawful next year or even
tomorrow.
And if you're a small business seeking a new way to promote
your company online, sorry, the FCC is going to saddle would-be
disruptors with rules preventing them from challenging the
dominant players in the online advertising market.
Rather than exercising regulatory humility and putting
faith in the marketplace, over and over again, the FCC has
required companies to beg for government permission to
innovate.
And Republicans are not alone in noticing the FCC's
overreach. On several occasions, other Federal agencies have
refused to support the FCC's actions. The Copyright Office
strongly criticized the earlier proposal for set-top boxes,
which was far less complex than the new one.
The staff at the Federal Trade Commission called the FCC's
privacy rules ``not optimal,'' which is bureaucrat-speak for
``really bad.''
And the Department of Justice refused to defend the FCC's
unlawful action on municipal broadband.
This all stands in contrast, I might add, to good-faith
efforts by Republicans and Democrats in Congress to work
together on telecom policy. The bipartisan MOBILE NOW Act is
the most prominent example of this in the Senate, but other
examples abound: FCC reauthorization, Kari's Law, the Amateur
Radio Parity Act, the SANDY Law, the Improving Rural Call
Quality and Reliability Act, and more.
In Congress, communications policy is often a rare oasis of
cross-aisle cooperation. But even here, the partisan toxicity
of the Commission has reached across D.C. and infected our
bipartisan work. For proof of this, one need look no further
than Senator Reid blocking the Senate's telecom agenda while
admitting that this committee has done its work, including
reporting nominees in bipartisan fashion.
What is perhaps most unfortunate is that we have clear
examples of the good the Commission can do when it truly works
toward bipartisanship. Earlier this year, Chairman Wheeler and
Commissioner O'Rielly worked together to address the standalone
broadband problem that threatened rural communities. More
recently, the FCC issued its Spectrum Frontiers Order, which is
an important downpayment toward making much-needed spectrum
available to fuel the next generation of gigabit wireless
services.
I just want to urge all members of the Commission to treat
each other fairly, to respect the law, and to be willing to ask
Congress for guidance, and to seek consensus wherever and
whenever possible. Doing so will result in agency actions that
are more likely to ensure. Further, less controversy at the
Commission will improve its credibility, providing it with more
wherewithal to carry out its statutory responsibilities.
And on a side note, while this agency is far from the
largest in our Committee's expansive jurisdiction, its
importance to the future of our economy and our society is hard
to overstate. Communications and media networks are at the
center of Americans' lives, and that role is only going to
increase over time.
Regardless of how the agency operates or who is in charge
of leading the Commission, it's important and worthwhile for
the Commerce Committee to hold regular oversight hearings of
the FCC, and today's hearing should be viewed as establishing a
regular biannual schedule for FCC oversight.
Thank you. And I will recognize the Ranking Member, Senator
Nelson, for his opening statement.
STATEMENT OF HON. BILL NELSON,
U.S. SENATOR FROM FLORIDA
Senator Nelson. Mr. Chairman, I, too, have a rather hard-
hitting opening statement. And I certainly acknowledge with you
the highly charged partisan times. And I acknowledge also that
this committee, indeed with the relationship that you and I
have personally, cuts through a lot of that partisanship and
comes up with bipartisan solutions on issue after issue.
And as you look back across that chart that your staff just
held up, indeed, administrative agencies often reflect the
times in which they are holding their administrative hearings
and their votes, and this has been one of the most contentious.
As a matter of fact, it is still beyond my understanding
when one of the two Republican members were confirmed with the
direct agreement between the two leaders of the Senate that
Jessica Rosenworcel would, in fact, be confirmed as a follow-
up, and that was the agreement.
Can you imagine Everett Dirksen, and can you imagine Mike
Mansfield--as a matter of fact, I've heard stories about Mike
Mansfield, when a Democratic Senator did not keep his word to a
Republican Senator, Mike Mansfield, in the home state of that
Democratic Senator, rebuked him. Where have those days gone?
And why do we still sit around and wait for the confirmation of
Mrs. Rosenworcel?
So, indeed, and I say this with a heavy heart, but at the
same time with an encouraged heart, because of the relationship
that you and I have and how we have been able to get some
things done here, not the least of which just recently was the
FAA bill.
And so here we have the session of the Federal
Communications Commission. It's a very full agenda. It's an
ambitious agenda. And while proceedings like this one on
broadband and privacy, are incredibly important, I want now to
touch on Chairman Wheeler's latest proposal to free consumers
from having to pay annoying and excessive monthly rental fees
for set-top boxes.
Everybody agrees, I don't see much dissent, that we need to
move beyond set-top boxes as technology rapidly advances. The
marketplace should constantly strive for ways to give consumers
what they want. Congress said as much in 1996, thank you,
Senator, from Massachusetts.
Congress said as much in 1996 when we required the FCC give
consumers some alternatives to the boxes, and yet 20 years have
passed and consumers are still renting these boxes month after
month. We're beyond that.
That's why this Senator is fully supportive of the FCC's
efforts to use its authority to give consumers relief. As
Chairman Wheeler and I have discussed, I'm encouraged that your
leadership and your relentless drive have gotten us so close to
that shared goal.
Now, we've spent a great deal of our time here in the
Senate trying to put politics aside, as we have stated on a
number of issues, in order to reach agreement, and I learned
long ago that no matter how good intentioned a proposal, if
consensus can't be reached, then it's not going to be a
success.
So we sit here 2 weeks from a planned vote on the proposal
in the Commission, and I continue to hear from many
stakeholders that there are elements, Mr. Chairman Wheeler, of
your proposal that continue to need work. Much of that concern
comes from the approach that you've taken on copyright and
content, and, in fact, I share those concerns and have stated
those concerns to you, and I've stated those concerns publicly
months ago.
If we stay on the present course, I fear the FCC's actions
to promote set-top box competition would be tied up in court
and hamstrung for years. We just experienced that reality with
net neutrality, which created a decade-long fight and left
consumers without effective consumer protections as they use
their broadband service.
And so it's my hope that the Commission will take the time
necessary to reach out to stakeholders in good faith to try to
resolve some of these concerns so that we can once and for all
free consumers from the monthly set-top box fees. It's very,
very important to consumers, and it needs to be done.
Let me just mention a couple of other issues. At our last
oversight hearing, Mr. Chairman, you and I talked about the
need for Congress to act to help advance the ongoing evolution
of our Nation's 911 infrastructure to the Next Generation of
911.
It's a public safety priority for the Federal Government,
and states to further this transition to make sure that 911
service remains robust and able to respond adequately and
effectively in an emergency.
We all rely on it. It's a call that we hope we never have
to make, and it's time for all of us to do everything that we
can to make it a reality throughout the entire country.
So I will be offering for cosponsorship in the near future
legislation to promote the development and deployment of the
Next Generation of 911 services, and to make this transition a
success. And I invite all of our colleagues to join.
And so with that, Mr. Chairman, thank you for the
opportunity, and thank you for the opportunity of working with
you.
The Chairman. Thank you, Senator Nelson. I appreciate that.
Thanks for your opening remarks.
We'll turn to the panel, and we'll start on my right, and
your left, with the Chairman, and then Commissioner
Rosenworcel, Commissioner Pai, Commissioner O'Rielly,
Commissioner Clyburn. Welcome to all of you. As always, we're
delighted to have you in front of the Committee and look
forward to hearing from each of you today.
So, Mr. Chairman, if you would please proceed.
STATEMENT OF HON. TOM WHEELER, CHAIRMAN,
FEDERAL COMMUNICATIONS COMMISSION
Chairman Wheeler. Thank you, Mr. Chairman, Senator Nelson,
Members of the Committee.
You know, as a certain November event approaches and a new
administration is on the horizon, this may be my last
appearance before this committee. I will cooperate fully with
the new administration to assure a smooth transition at the
FCC, but I do want to take this opportunity to observe that it
has been a privilege to work with this committee over the last
3 years. I'm grateful to the Committee for recommending my
confirmation and for the dialogue that we have had throughout
my tenure, and I look forward to that dialogue continuing
today.
One of the dialogues that we have had ongoing Senator
Nelson just raised, and that's the issue of the Next Generation
911. The benefits of IP networks are simply not being realized
because for far too many Americans, Next Generation 911
networks don't exist. This not only defers the advantages of
next-generation technologies, but it increases the risk of 911
failure to those communities remaining on legacy 911.
As we meet today, our old 911 networks are under attack.
Last Saturday's Washington Post had a big article describing
how telephone denial-of-service attacks can and have shut down
911 networks. And the FBI and DHS are reporting record levels
of ransomware attacks on 911 systems. There is a crisis cooking
in our 911 networks. The decisionmaking of Congress will be
necessary on this important public safety issue.
Now, as has been referenced, later this month the
Commission will vote on whether to fulfill a mandate that the
Congress gave us 20 years ago to assure that consumers have
competitive choice in how they access cable and satellite
programming.
Last February, we put forth a proposal to follow the
statutory command of the Communications Act that, quote, The
Commission shall adopt regulations to assure the commercial
viability of competitive navigation capability to the satellite
and cable services consumers pay for.
Now, I've heard the question asked, ``Why are you doing
this if the market is working?'' It isn't. Ninety-nine percent
of consumers have no choice despite the statutory mandate that
they shall have choice.
The cable industry has been playing rope-a-dope with that
statutory mandate for 20 years. First, they created a licensing
body to license, but failed to license that technology, in a
meaningful manner. Then in 2008, Comcast announced, ``The age
of the closed proprietary set-top box is behind us; the era of
open cable is here.'' Eight years ago. Consumers have seen
nothing happen.
Then in 2010, in a CTA filed in an FCC proceeding,
``Consumers should have the option to purchase video devices at
retail that can access their multi-channel provider's video
services without a set-top box supplied by that provider.'' Six
years ago, and consumers have seen nothing happen.
A recent Harris poll showed that 74 percent of consumers
believe set-top box rental fees are too high, and with good
reason. One study submitted for our record found that while
set-top box fees increased 180 percent, during that same
period, the cost of other consumer electronics fell by 95
percent. Yet every month, by one estimate, consumers are
charged $1.6 billion that Congress mandated they should have an
alternative to paying.
For the last 7 months, we have been working with the
affected parties to improve and simplify the original proposal.
When the cable industry proposed a much simpler apps-based
approach, we adopted it. We also adopted the programmers'
suggestions to assure that copyrights and contracts are
protected end-to-end.
We are now at that point in the rulemaking process when
each Commissioner reviews the work and makes his or her
suggestions for improvement. We have demonstrated our
willingness to make significant changes in the original
proposal while remaining faithful to the mandate in the
statute.
I look forward to my colleagues' input and to working with
them. The beauty of this Commission is the deliberative process
in which we are now engaged.
When the Los Angeles Times, the Hollywood hometown
newspaper, editorialized that our proposal, ``Shows how the FCC
can live up to that Congressional mandate while still
protecting copyrights and saving U.S. consumers billions of
dollars and the Commission should move forward with it,'' they
correctly assessed how both consumers and creators are
protected by the improvements that have been made to the
original proposal.
As Commissioner Rosenworcel said when we adopted the NPRM,
``It is time, past time, to live up to our statutory
obligations and foster the competition that consumers
deserve.''
Finally, Mr. Chairman, let me close by expressing how much
I hope that Commissioner Rosenworcel will be able to continue
to serve on the FCC. This committee knows, from her service on
its staff, her tremendous abilities, and her depth of
understanding of the issues before the Commission.
As Chairman of this agency, I hope we can continue to count
on Commissioner Rosenworcel's insights and leadership.
Thank you very much.
[The prepared statement of Chairman Wheeler follows:]
Prepared Statement of Hon. Tom Wheeler, Chairman,
Federal Communications Commission
Introduction
Chairman Thune, Ranking Member Nelson, and Members of the
Committee, thank you for this opportunity to discuss our work at the
Federal Communications Commission.
Since we last met six months ago, the Commission has continued to
make strong progress on our policy agenda. While I am pleased with this
progress, our work is far from done. With each passing day,
communications technology grows more important to our economy and
quality of life. That means there's no letting up at the Commission. We
must continue to promote core values like universal access, public
safety, consumer protection, and competition at the same bold pace we
have consistently maintained.
This testimony recaps major developments since our March hearing,
and highlights some key priorities as we move forward.
Key Developments
Incentive Auction
After years of planning, and at the direction of Congress, we are
in the midst of the historic incentive auction to make available
greenfield low-band spectrum by repurposing a portion of the broadcast-
TV band for wireless use.
When I last visited this Committee I noted that the auction's
design allows for multiple stages of bidding in order to match the
supply of spectrum from broadcasters with the demand expressed by
wireless bidders. That process is playing out as designed. In the first
stage of the auction we made available an initial clearing target of
126 MHz, but the cost to clear that amount of broadcast spectrum
exceeded the bid prices of the wireless bidders. We therefore began the
second stage on September 13 with a reverse auction to determine the
cost to clear a reduced amount--114 MHz--of spectrum. A second stage
forward auction will follow the conclusion of the reverse.
We also continue to plan for the post-auction transition and
repacking of TV stations. The Incentive Auction Task Force will soon
release for discussion and comment transition models to calculate the
order and schedule of station relocation efforts. These models reflect
the input we've received from broadcasters, wireless companies, tower
crews, equipment manufacturers, and other stakeholders.
Getting the transition right is as important as getting the auction
itself right. We continue to prioritize planning for an efficient and
effective transition with minimal disruption to the viewing public.
With the continued engagement of industry stakeholders, that's exactly
what we'll get.
5G--Spectrum Frontiers
This July, the Commission unanimously adopted the Spectrum
Frontiers Report and Order, our most significant step yet to accelerate
the development and deployment of 5G wireless technology. This next
generation of wireless connectivity promises quantum leaps forward in
three key areas: speeds resembling fiber that are at least 10 times and
maybe 100 times faster than today's 4G LTE networks; responsiveness
less than one-thousandth of a second, which enables real-time
communication; and network capacity multiples of what is available
today.
Coupling this ultra-fast, low-latency, high-capacity connectivity
with the almost unlimited processing power of the cloud will enable
life-saving healthcare advances, smart-city energy grid and water
systems, immersive education and entertainment, and, most importantly,
new applications yet to be imagined.
By approving the Spectrum Frontiers item, the United States became
the first country in the world to open up high-band spectrum for 5G
networks and applications.
We are repeating the proven formula that made the United States the
world leader in 4G: one, make spectrum available quickly and in
sufficient amounts; two, give great flexibility to companies that can
use the spectrum in expansive ways; and three, stay out of the way of
technological development. We will also balance the needs of various
different types of uses in these bands through effective sharing
mechanisms; take steps to promote competitive access to this spectrum;
encourage the development of secure networks and technologies from the
beginning; and remove unnecessary hurdles to siting and infrastructure
deployment.
Business Data Services
The Commission's Business Data Services proposal seeks to promote
competition that will encourage innovation and investment. Long known
as Special Access, Business Data Services offer the kind of dedicated
access that wireless providers need to connect cell towers and antennas
to their networks. Such dedicated network connections are also used by
small businesses, retailers, banks, manufacturers, schools, hospitals,
and universities to move large amounts of data.
In many areas, however, competition in the supply of Business Data
Services remains limited, and that can translate into higher prices for
wireless networks and businesses, which then translates into higher
prices for consumers. In April, the Commission launched its Business
Data Services proceeding to help address this challenge.
To seize the opportunities to increase the deployment of mobile
networks and to move towards 5G connectivity, we're going to need a lot
more backhaul to handle the massive increase in data traffic. Lack of
competition doesn't just hurt the deployment of wireless networks
today, it also threatens to delay the buildout of 5G networks with its
demand for many, many more backhaul connections to many, many more
antennas. And it hurts the many businesses and institutions that rely
on these services in an ever-increasing data-driven world.
The Commission has a long and complicated history with Business
Data Services and the time has come for action. Reform is supported by
the Nation's leading wireless carriers, save one, and my goal is to
conclude this proceeding no later than the end of this year.
Set-Top Boxes
Today, 99 percent of pay-TV consumers pay hundreds of dollars in
set-top box rental fees on top of their monthly bill every year because
they don't have meaningful alternatives. This February, the Commission
launched a proceeding to assure consumer choice in the set-top box
marketplace, as Congress mandated.
Over the past seven months, the Commission has conducted an open
proceeding where we heard from pay-TV providers, programmers, device
and software manufacturers, consumers groups, and, most important, the
American people. I was heartened to see the industry and other
stakeholders step up to tackle the issue with constructive feedback.
Last week, I circulated proposed rules to fulfill our Congressional
mandate and provide consumers with choice in how they access pay-TV
content. If adopted, consumers will no longer have to rent a set-top
box, month after month, just to watch the programming they already pay
for. Instead, pay-TV providers will be required to provide apps--free
of charge--that consumers can download to a variety of devices to
access all the programming they pay for.
Among other consumer benefits, these rules would enable integrated
search across different sources of content and open the door for
innovation, spurring new apps and devices, giving consumer more choice
and control. Expanded access to programming created by independent and
diverse voices on the same platform as your pay-TV provider's would
mean consumers will more easily find content that is buried behind
guides or not available from a pay-TV provider.
To ensure that all copyright and licensing agreements will remain
intact and in response to feedback we received, the delivery of
programming will continue to be overseen by pay-TV providers from end-
to-end. The proposed rules also maintain important consumer protections
regarding emergency alerting, accessibility and privacy.
Privacy
After months of talks with stakeholders, the Commission launched a
proceeding in March to give consumers the tools they need to make
informed decisions about how Internet Service Providers use and share
their data, and confidence that ISPs are taking steps to keep that data
secure--all while encouraging continued innovation by ISPs and other
actors.
For the past six months, we've been listening, learning, and
speaking with the public to figure out the best way to achieve these
goals. Parties engaged in this process have included--among others--
consumer and other public interest groups, fixed and mobile ISPs,
advertisers, app and software developers, academics, other government
actors, and individual consumers. The FTC's input has been particularly
helpful as a key partner in consumer privacy protection.
I am confident we'll be able to arrive at final rules that are good
for consumers and good for innovation later this year.
Robocalls
Robocalls are the top consumer complaint we receive at the
Commission. Aside from simply being annoying, they are an invasion of
privacy, and are rife with attempted, and unfortunately often
successful, fraud and identity theft.
The Commission has taken strong action to crack down on robocalls.
Last summer, we closed loopholes in the Telephone Consumer Protection
Act, ensuring that robocallers face stiff consequences when they make
unwanted calls and send unwanted texts. More recently, we imposed
strong consumer protections on specific debt collection robocalls. But
TCPA enforcement only works against those robocallers we can find and
want to play by the rules.
This July, I wrote letters to major wireless and wireline telephone
carriers, as well as the major gateway providers that sometimes
transmit calls between other carriers, to say that consumers can no
longer wait for additional tools to stop robocalls. I called on them to
offer robust call blocking to their customers, free of charge. Industry
responded aggressively by establishing the Robocall Strike Force, which
is led by AT&T and includes representatives from telecommunications
carriers, device manufacturers, operating system vendors, app
developers, and other segments of the industry.
On August 19, the Commission hosted the first meeting of the
Robocall Strike Force, where they set forth an aggressive timeline of
60 days to submit recommendations. On behalf of consumers, I am pleased
that the Strike Force members have volunteered their time to come
together to attack the robocall epidemic, and I look forward to the
results in October.
Lifeline Modernization
Three weeks after I last appeared before this Committee, the
Commission adopted an Order to modernize the Lifeline program. Lifeline
was established during the Reagan administration and updated during the
second Bush administration based on one simple concept: that we must
provide assistance so that low-income Americans can access the dominant
communication network of the day. In the Reagan era, that was the
telephone network. In the Bush era, that was the cell phone network.
Today that's broadband.
Accordingly, the first thing the Order does is to allow the support
that the Bush administration extended to cell phone service to now be
applied to broadband, whether wired or wireless, under the same kinds
of conditions.
The Order also institutes good management practices that will
dramatically reduce waste, fraud, and abuse. We started from a strong
foundation laid by Chairman Genachowski and Chairwoman Clyburn who
established a database to see if Lifeline consumers were double
dipping. Correcting this flaw in the program's earlier expansion has
already paid off by reducing payments by over a billion dollars to
ineligible recipients who gamed the system.
I am proud of the work that has been done over the years to shore
up the Lifeline program and prevent future fraud. We will continue to
work diligently to make sure that important safeguards are in place for
this vital program.
Open Internet Decision
On June 14, the D.C. Circuit upheld the FCC's Open Internet Rules.
The court's ruling is a victory for consumers and innovators who
deserve unfettered access to the entire web, and it ensures the
Internet remains a platform for unparalleled innovation, free
expression, and economic growth. After a decade of debate and legal
battles, this ruling affirms the Commission's ability to enforce the
strongest possible Internet protections--both on fixed and mobile
networks--that will ensure the Internet remains open, now and in the
future.
Looking Ahead
Next-Generation 911
During my tenure as FCC Chairman, and in my prior testimony before
this Subcommittee, I have been very vocal about the urgent need to
improve our 911 system. The recent tragedies in Orlando, Louisiana, and
too many other cities highlight the importance of 911 in times of
crisis.
The Commission has taken action to improve the quality and accuracy
of 911, and there is good news to report. We see industry is stepping
up to many of the challenges, improving 911 location accuracy,
supporting text-to-911, and generally investing to improve network
reliability and resiliency.
But effective 911 service depends on our Nation's 911 call centers.
These Public Safety Answering Points, or PSAPs, must have technology to
receive and process calls quickly, accurately locate callers, and
dispatch an appropriate response. The unfortunate fact is that 911,
designed originally for analog voice, doesn't scale effortlessly to the
advanced digital, wireless, and multi-media technology landscape. In
too many communities, the PSAPs are relying on dangerously out of date
technology, and the transition to Next Generation 911 (NG911)--
envisioned by Congress in 1999 when it established 911 as the national
emergency number--has not started or is stalled. Resource-strapped
local jurisdictions struggle to maintain existing 911 service, let
alone to achieve Congress's NG911 vision.
Industry and many states, counties, and cities are working hard to
address transition risk and achieve NG911 capabilities. Nearly 20
percent of counties now support text-to-911. Many jurisdictions are
building out their Emergency Services IP Networks--the basic backbone
for NG911 in their communities.
But these islands of progress are the exception, not the rule.
Unless we find a way to help the Nation's PSAPs overcome the funding,
planning, and operational challenges they face as commercial
communications networks evolve, NG911 will remain beyond the reach for
much of the Nation. Let me be clear on this point: 911 service quality
will not stay where it is today, it will degrade if we don't invest in
NG911.
Congress has the unique ability to accelerate the transition to
NG911. A clear national call to action, with timely application of
resources, would actually lower NG911 transition costs by shortening
the transition period and enabling 911 authorities to retire costly
legacy facilities more quickly. Here are three ways that Congress could
help:
National 911 Map: PSAPs are increasingly dependent on
electronic maps for 911 routing and location, but the maps that
they rely on should not end at the county or state line.
Congress could authorize and fund the FCC (in collaboration
with DOT) to create a national 911 map that would be available
to every PSAP and would eliminate the seams between commercial
communications network infrastructure and emergency response
dispatch systems.
Cybersecurity Defenses for PSAPs: PSAPs face the same cyber
vulnerabilities that have proven so challenging to both
government and commercial organizations, but most lack trained
workforce and the necessary tools for cyber defense. Congress
could bring PSAP IP Networks under the protective umbrella of
DHS's ``Einstein'' program by funding the deployment of
intrusion detection sensors for NG911 networks.
National NG911 Implementation Date with Matching Funds:
Currently, there is no national timetable or target date for
completing the transition to NG911. Congress could establish a
nationwide NG911 implementation date (e.g., to complete the
transition by the end of 2020) and authorize matching funds to
help state and local communities achieve this goal. Congress
can further jump start this effort by ensuring that federally
run PSAPs and Emergency Operations Centers make achievement of
NG911 capability a funding priority.
This Committee has commendably made public safety a priority, and I
urge you to do everything in your power to make sure our Nation's 911
system evolves safely as it adjusts to achieve your NG911 vision and
that PSAPs have the tools and support they need to avoid undue risk in
the transition.
Cybersecurity
One of the most important missions of the FCC is to ensure our
Nation's commercial communications infrastructure supports public
safety and national security. The vulnerability of advanced
telecommunications networks to physical and cyber-attack is not lost
upon us. We have and will continue to work closely with industry and
our agency partners to identify, mitigate and where possible reduce
cybersecurity risk.
Cybersecurity principles--availability, integrity, and
confidentiality--are now routinely incorporated in our engagement with
industry. Our advisory committees are doing important work tackling
tough cybersecurity issues for current and future networks. Our
approach is to have communication providers and their industry partners
lead while the FCC brings useful assistance and transparency to ensure
that this effort benefits from early peer review and serves to
accelerate development of 5G devices and services. We believe that this
approach will accelerate U.S. deployment of secure, reliable, and
highly functional 5G networks.
Conclusion
The Commission remains focused on harnessing the power of
communications technology to grow our economy and enhance U.S.
leadership while preserving timeless values like universal service.
While there are disagreements about many of the issues I've outlined,
we can all agree on the importance of the Commission's core functions
that are critical to U.S. economy, businesses, and consumers. I look
forward to continuing to work with members of this Committee on these
and other matters.
The Chairman. Thank you, Chairman Wheeler.
With that, Commissioner Rosenworcel.
STATEMENT OF HON. JESSICA ROSENWORCEL, COMMISSIONER, FEDERAL
COMMUNICATIONS COMMISSION
Commissioner Rosenworcel. Good morning, Chairman Thune,
Ranking Member Nelson, and the Members of the Committee. Thank
you for the opportunity to appear before you today.
I'm going to start by noting what is important and what is
obvious. We began this week on the anniversary of one of our
darkest days. What happened 15 years ago on September 11
changed us all. It left an indelible mark. And in my family,
that mark is personal because one of my relatives died in the
Twin Towers.
But it's just as important to recognize what has not
changed. We are resilient, we are optimistic, and we are
strong, and I think communications networks also make us
strong. They strengthen our economy, they give rise to digital
age opportunity, and they support public safety. And in light
of this week's anniversary, it's public safety that I want to
focus on today, and specifically what can be done right now to
improve our Nation's emergency number system.
911 is the first telephone number I taught my children.
It's a number that every one of us knows by heart, but none of
us hopes to ever have to use. But use it we do. In fact, across
the country, we call 911 over 240 million times a year, and 70
percent of those calls are made over wireless phones. In other
words, the vast bulk of our calls are coming into our Nation's
911 centers over technology that the system was not designed
for.
This is a problem because while technology has changed so
much in our lives, our communications systems that are used by
our Nation's 911 call centers, they just haven't kept pace. I
know because I visited nearly two dozen 911 call centers all
across the country from Alaska to Arkansas, Nevada to New
Jersey, California to Colorado, and a whole bunch of places in
between.
And it's not that work isn't being done. In the last 2
years alone, the FCC has put in place policies to facilitate
texting to 911. We've devised a framework to improve the
ability of 911 call centers to be able to locate callers using
wireless phones, and this is progress.
But what comes next is so much bigger because Next
Generation 911 services can support a whole range of data and
video communications. So for those who call in an emergency, it
will mean the opportunity to offer real-time video from an
accident, it will mean the ability to provide first responders
with an instantaneous picture of a fleeing suspect or emergency
incident, which can especially help rural public safety
officials prioritize and deploy limited resources.
But to remake the Nation's 911 system to fully reflect the
digital age takes funding. And historically, supporting our
Nation's 6,000 911 call centers has been strictly a local
affair. There is no national program or annual Federal revenue
source. But, still, there are two things we can do right now to
kick-start local 911 modernization.
First, we need to end fee diversion. Approximately $2.5
billion is collected each year by local and state authorities
to support 911 service, and those funds, they're typically a
small line item on your phone bill. But not all states follow
through and actually use the dollars collected from that line
item for 911 purposes. In fact, in the last year for which the
FCC has data, eight states transferred funds collected for 911
for other purposes, including things that have nothing to do
with public safety. In fact, in the past, some of those have
used these funds for overtime pay for state workers and dry
cleaning services for state agencies. This has to stop.
Second, tucked in the Middle Class Tax Relief and Job
Creation Act of 2012 is another way to jolt-start 911
modernization. As you know, this legislation authorized a
series of wireless spectrum auctions that are being run by the
FCC. And these auctions, which are still ongoing, have already
raised enormous sums. A portion of those funds, $115 million,
was set aside by Congress for a grant program to help support
Next Generation 911, but somehow this program has stalled and
is yet to begin more than 4 years after Congress passed this
legislation.
It's time to get this program up and running. It's the best
near-term and national resource we have to put Next Generation
911 in place. And while those funds are limited, they can have
broad impact if we use them wisely and fund projects that can
be a blueprint for updating 911 in communities nationwide, and
when we do, those states that are shortchanging their own 911
programs with fee diversion, they should be at the end of the
line.
Thank you. I look forward to answering any questions you
might have.
[The prepared statement of Commissioner Rosenworcel
follows:]
Prepared Statement of Hon. Jessica Rosenworcel, Commissioner,
sFederal Communications Commission
Good morning, Chairman Thune, Ranking Member Nelson, and members of
the Committee. Thank you for the opportunity to appear before you along
with my colleagues at the Federal Communications Commission.
Let me begin by noting what is important and obvious. We began this
week on the anniversary of one of our darkest days. What happened
fifteen years ago on September 11 changed us all. It left an indelible
mark. In my family, that mark is personal--because one of my relatives
died in the Twin Towers.
But it is also important to identify what has not changed. We are
resilient. We are optimistic. We are steadfast in our shared
determination to move forward as individuals and as a Nation--because
that is what makes us strong.
Communications networks make us strong. They strengthen our
economy, give rise to digital age opportunity, and support public
safety. In light of this week's anniversary, it is public safety I want
to focus on today--and specifically what can be done right now to
improve our Nation's emergency number system.
911 is the first telephone number I taught my children. It is a
number that every one of us knows by heart but every one of us hopes
that we will never have to use. But use it we do. In fact, across the
country we call 911 240 million times a year. More than 70 percent of
those calls come from wireless phones rather than traditional landline
phones. That means that the bulk of our emergency calls come over a
different technology than the 911 system was designed to use.
This is a problem. Because while technology has changed so much in
our lives, the communications systems used by our Nation's 911 call
centers have not fully kept pace. I know--because I have seen this
firsthand in the nearly two dozen 911 call centers I have visited all
across the country--from Alaska to Arkansas, California to Colorado,
Nevada to New Jersey, Vermont to Virginia and many more places in
between.
It's not that work is not being done. In the last two years alone,
the Commission has put in place policies to facilitate texting to 911.
We have devised a framework to improve the ability of 911 call centers
to identify the location of emergency calls made from wireless phones.
This is progress. But what comes next is even bigger. Next
Generation 911 services can support a whole range of data and video
communications. For those who call in an emergency, it will mean the
opportunity to offer real-time video from an accident. It will mean the
ability to provide first responders with instantaneous pictures of a
fleeing suspect or emergency incident, helping rural public safety
officials prioritize and deploy limited resources. These capabilities
can make public safety both more effective and more responsive.
But to remake the Nation's 911 systems to fully reflect the digital
age takes funding. Historically supporting our nations roughly 6,000
911 call centers has been a local affair. There is no national program
or annual Federal revenue source. But, still, there are two things this
Committee can do to kick-start local 911 modernization.
First, we need to end fee diversion. Approximately $2.5 billion is
collected each year by local or state authorities to support 911
service. These funds are typically from a small line item on our phone
bills identified as support for 911 service. But not all states follow
through and actually use these funds for 911 purposes. In fact, in the
last year for which the Federal Communications Commission has data,
eight states transferred funds collected for 911 to other purposes--
including uses that have nothing to do with public safety. In the past,
some of those uses have included overtime pay for state workers and dry
cleaning services for state agencies. This has to stop.
Second, tucked into the Middle Class Tax Relief and Job Creation
Act of 2012 is a way to kick-start 911 modernization. As you know, this
legislation authorized a series of wireless spectrum auctions. These
auctions, which are still ongoing, have raised billions--and the
proceeds are dedicated to some initiatives that get a lot of attention,
like establishing the First Responders Network Authority, assisting the
relocation of broadcasters in the 600 MHz band, and reducing the
deficit. But there is one program these spectrum auctions fund that has
not yet gotten the glory it deserves--a program for Next Generation
911.
Section 6503 reinstates the joint 911 Implementation Office and
authorizes a $115 million grant program to update 911. You might be
familiar with it--because this Committee helped develop this
legislation. But this program has stalled and has yet to begin more
than four years after Congress authorized its creation.
It is time to get this program up and running. It is the best near-
term and national resource we have to help put Next Generation 911 in
place. While these funds are limited, they can have broad impact if we
use them wisely and fund Next Generation 911 projects that can be a
blueprint for updating services in communities nationwide. And when we
do--states that are short-changing their own 911 programs with fee
diversion should be at the end of the line.
Thank you. I will be happy to answer any questions you might have.
The Chairman. Thank you, Commissioner Rosenworcel.
Commissioner Pai.
STATEMENT OF HON. AJIT PAI, COMMISSIONER,
FEDERAL COMMUNICATIONS COMMISSION
Commissioner Pai. Chairman Thune, Ranking Member Nelson,
Members of this Committee, thank you for holding this hearing
and giving me the opportunity to testify this morning.
Since 2012, it has been a privilege to work alongside you
on issues as varied as broadband deployment and freeing up more
spectrum for consumer use.
In my opening statement, I would like to build upon the
sentiments expressed by the Chairman and the Ranking Member in
their opening statements, sentiments that I share. In
particular, I would like to focus on four issues where I think
we can reach a bipartisan consensus and benefit the American
people. This committee and its Members have shown tremendous
leadership on many of these issues.
The first is ensuring direct access to 911. Earlier this
year, Senators Fischer and Klobuchar, along with Senators
Cornyn, Cruz, and Schatz, introduced the Kari's Law Act of
2016. This bill would require that all multi-line telephone
systems sold, leased, or installed in the United States will
allow direct 911 calling as the default setting. It would
ensure that calling 911 always works. I hope that this worthy
legislation becomes law soon.
Second, I want to commend, among others, my home state
Senators, Senators Roberts and Moran, for introducing the
Kelsey Smith Act. This bill would help law enforcement to
locate wireless 911 callers in emergencies by ensuring that
they have critical access to location information. It is
inspired by the sad story of 18-year-old Kelsey Smith, whose
parents I had the opportunity to meet earlier this year.
Days after she graduated from high school, Kelsey was
kidnapped in Overland Park, Kansas. Almost four excruciatingly
long days later, law enforcement found Kelsey's body. She had
been raped, killed, and left about 20 miles from where she had
been abducted.
It never should have taken that long to find Kelsey. She
had her cell phone with her, but her family, local law
enforcement, and even the FBI were not able to get the cell
phone's geographic coordinates from her carrier for days. Once
they did get that information, it took law enforcement
approximately 45 minutes to locate her body.
We already know that the law that bears her name works.
Over 20 states have enacted similar bills, and they've helped
locate victims and saved lives. I heard for myself firsthand
from law enforcement that a 5-month-old baby in my home state
of Kansas was saved as a result of this solution.
I hope that a bipartisan compromise can be reached that
would allow this Federal Kelsey Smith Act to be enacted.
I'll turn next to spectrum, an area where this committee
has been leading. In particular, I want to commend the Chairman
and the Ranking Member on the introduction of the MOBILE NOW
Act and this committee for passing it.
I'm especially grateful to you for asking the FCC to move
forward on opening up spectrum above 24 gigahertz in what are
known as the millimeter-wave bands. As your legislation
recognizes, opening up these bands is going to be a key part of
our 5G future and a critical input into American leadership in
this space.
Thanks in no small part to your efforts, the FCC recently
expanded its millimeter-wave proceeding to include over 17
gigahertz of additional spectrum. Many of these bands were
identified in the MOBILE NOW Act. I'm glad that we reached a
bipartisan agreement on this issue at the FCC, and I hope we
move quickly to reach a final resolution to this part of the
proceeding.
Finally, I would like to touch on another area where I hope
that the Commission can move quickly and in a bipartisan
manner. It involves something called ATSC 3.0, which is the
next-generation broadcast standard.
In April, broadcasters and the consumer electronics
industry filed a petition asking the FCC to give broadcasters
the option of using this next-generation standard. In turn, we,
the FCC, asked for input on ATSC 3.0, and the result was clear:
widespread support.
There is no dispute that this next-generation broadcast
standard will allow broadcasters to provide better service to
the American people. It will be easier for consumers, for
instance, to watch over-the-air programming on their mobile
devices. Picture quality will improve. And broadcasters will be
able to provide advanced emergency alerts with localized
information and much greater amounts of data.
I believe it's important for the FCC to act with dispatch
on this petition. Just as America is leading the way on mobile
technologies, such as 5G, so, too, we should be at the
forefront of innovation in the broadcast space. I therefore
hope that the FCC will issue a Notice of Proposed Rulemaking on
ATSC 3.0 no later than the end of this year.
Chairman Thune, Ranking Member Nelson, Members of the
Committee, thank you once again for giving me this opportunity
to testify. I look forward to answering your questions and
continuing to work with you and your staffs in the time ahead.
[The prepared statement of Commissioner Pai follows:]
Prepared Statement of Hon. Ajit Pai, Commissioner,
Federal Communications Commission
Chairman Thune, Ranking Member Nelson, and Members of the
Committee, thank you for giving me the opportunity to testify this
morning. Since 2012, it has been an honor to work with you on a wide
variety of issues, from encouraging broadband deployment in rural
America to freeing up more spectrum for consumer use.
These days, we hear a lot about communications issues that engender
vigorous disagreement, often along partisan lines. In my testimony,
however, I want to focus on five important issues where we can reach
consensus in the short term and benefit the American people. This
Committee and its Members have shown tremendous leadership in many of
these areas.
The issues I will focus on are: (1) ensuring direct dial 911; (2)
helping law enforcement locate 911 callers in emergencies, (3) freeing
up 5 GHz spectrum for the next generation of unlicensed use; (4)
opening up spectrum bands above 24 GHz for 5G and other innovative
wireless technologies, and (5) moving forward with ATSC 3.0, the next-
generation broadcast standard.
I'll start with the two public safety issues.
Direct Dial 911.--Ensuring direct access to 911 is important both
to me and the Members of this Committee. Earlier this year, Senators
Deb Fischer and Amy Klobuchar, along with Senators John Cornyn, Ted
Cruz, and Brian Schatz, introduced The Kari's Law Act of 2016. I
commend those Senators for their leadership.
Many people now know the tragedy that inspired this legislation. In
December 2014, Kari Rene Hunt Dunn was attacked and killed by her
estranged husband in a Marshall, Texas, hotel room. Her nine-year-old
daughter, who was with her, tried calling 911 four times as she had
been taught to do. But her calls for help never went through. That's
because the hotel's phone system required guests to dial a ``9'' before
calling 911.
When I learned about this nearly three years ago now, I started an
inquiry into the status of 911 dialing at properties across the country
that use multi-line telephone systems. I wanted to understand the scope
of the problem and what we could do to fix it. At the time, I gave
Kari's father, Hank Hunt, my personal commitment that I would do my
best to ensure that no one would ever again confront that situation.
Hank has been a tireless advocate for this cause. And significant
progress has been made.
But the job isn't done. The Kari's Law Act of 2016 would take us
one step closer to accomplishing Hank's mission. It would require that
all multi-line telephone systems sold, leased, or installed in the
United States allow direct 911 calling as the default setting. So I
applaud the efforts of Hank, Members of this Committee, and the many
others who are making a difference on this issue. Indeed, since I last
testified before this Committee, the Committee approved Kari's Law as a
part of the FCC Reauthorization Act of 2016 and the U.S. House of
Representatives passed its own version of Kari's Law. So I hope that
this bill soon becomes law.
Locating 911 Callers.--The sad story of Kelsey Smith highlights
another important step that can be taken to improve public safety.
Days after she graduated from high school, minutes after she got
off the phone with her mother, and seconds after she bought an
anniversary present for her boyfriend, 18-year-old Kelsey Smith was
kidnapped. She was abducted in broad daylight as she got into her car
outside a department store in Overland Park, Kansas. Almost four
excruciatingly long days later, law enforcement found Kelsey's body.
She had been raped and then strangled to death. Her body was left in a
wooded area about 20 miles from where she was abducted.
It never should have taken that long to find Kelsey. She had her
cellphone with her, so her wireless carrier knew her location. Kelsey's
family, local law enforcement, and even the FBI asked that company to
help them find Kelsey by supplying the cellphone's geographic
coordinates. There was no question that this was an emergency--
surveillance video showed a man running up behind Kelsey and forcing
her into a car--but days passed before the company agreed to provide
the phone's location.
Once they got that information, law enforcement took approximately
45 minutes to locate her body.
As a parent, I cannot imagine the pain that Melissa and Greg Smith,
Kelsey's parents, have endured. As Melissa has put it, ``What does a
parent go through when a child is missing? You do not eat because you
do not know if your child is eating. You do not sleep because you
wonder if they are sleeping. It is pure hell.'' And of course, no
parent should ever have to bury a child.
It would be completely understandable if the Smiths decided to
grieve privately over such a terrible crime. But they chose a different
path--a public one. They became national advocates for change.
This is where the Kelsey Smith Act, sponsored by Kansas Senators
Pat Roberts and Jerry Moran, among others, comes into play.
Right now, Federal law doesn't prohibit telecommunications
companies from providing location information to the police in actual
emergencies. But, as Kelsey's parents discovered, it doesn't require
them to do so, either. So companies take different approaches.
Sometimes they provide the information, sometimes they don't. Sometimes
they respond quickly, sometimes they don't. This inconsistent approach
puts lives at risk.
We know that this bill can make a difference. The Kelsey Smith Act
is currently the law in over 20 states. And it is already helping law
enforcement save lives. For example, one month after it passed in
Tennessee, police obtained location information in time to rescue a
child who had been kidnapped by a suspected child rapist. Back in
Kansas, not far from where Kelsey grew up, police officials told me how
they invoked the law to quickly track down and save a 5-month-old baby
who was strapped into the back seat of a vehicle that had been
carjacked. Luckily, the mother's cellphone was in the stolen car;
police used that phone's location information to find the vehicle and
the baby, who miraculously was sleeping peacefully in the back seat.
To ensure that these successes become the norm across the country,
I hope that a bipartisan compromise can be reached in order to help the
Kelsey Smith Act become law.
I'll turn next to two spectrum issues that this Committee has been
considering.
5 GHz Band.--I want to thank the Committee for its leadership in
identifying and drawing attention to the 5 GHz band, a band ideally
suited for unlicensed use. The Spectrum Act, which was signed into law
four years ago, called on the FCC to begin the administrative process
for opening up the 5 GHz band. The FCC did that in 2013.
Since then, Senators Marco Rubio and Cory Booker have introduced
the Wi-Fi Innovation Act. This bill has helped kept the 5 GHz band
front and center in our spectrum discussions. And the efforts of
Chairman Thune and others have also played key roles in helping to move
the ball forward on this part of the 5 GHz band. I applaud those
efforts.
Taken together, in the U-NII-4 band as well as the lower, U-NII-2B
band, there are up to 195 MHz of spectrum that the FCC could open up
for consumer use. It is not hyperbole to say that this could transform
the wireless world. For this spectrum is tailor-made for the next-
generation of unlicensed use. Its propagation characteristics minimize
interference in the band, and the wide, contiguous blocks of spectrum
allow for extremely fast connections, with throughput reaching one
gigabit per second. The technical standard to accomplish this,
802.11ac, already exists, and devices implementing it are already being
built. All of this means we can rapidly realize the benefits of more
robust and ubiquitous wireless coverage for consumers, more manageable
networks for providers, a new test bed for innovative application
developers, and other benefits we can't even conceive today.
So the FCC needs to open up these bands for consumer use. While the
FCC recently issued a public notice that seeks to refresh our
rulemaking record, I would have liked to see the Commission move more
quickly in this proceeding. Indeed, I have been calling on the FCC to
open these bands up since 2012. Both Qualcomm, through its re-
channelization approach, and Cisco, through its detect-and-avoid
proposal, have identified paths forward. I hope the agency gets this
proceeding across the finish line, and soon.
Spectrum Above 24 GHz.--I want to commend Chairman Thune and
Ranking Member Nelson on the introduction of the MOBILE NOW Act and
this Committee for passing it. In particular, I commend you for calling
on the FCC to move forward on opening up millimeter-wave bands for
mobile use. Your efforts are already paying dividends.
Not long ago, most would have thought of the millimeter wave bands
as dead zones when it came to mobile services. After all, nearly all
commercial mobile networks operate in frequencies below 3 GHz. But, as
has been the hallmark of the communications sector, engineers are
finding a way and technology is advancing.
Companies are now investing heavily in mobile technologies that
rely on spectrum above 24 GHz as part of their work on 5G mobile
technologies. Over a year ago, I visited Samsung's 5G research lab near
Dallas, Texas. There, engineers are hard at work developing base
stations and mobile technologies that are crossing into these spectrum
frontiers. Their experiments with multiple-input, multiple-output
antennas no bigger than a Post-it note have already demonstrated that
5G technologies can use millimeter wave bands to deliver mobile speeds
in excess of 1 gigabit per second.
More recently, I attended Intel's demonstration of its millimeter
wave technology at the FCC's headquarters. It showed how spectrum above
24 GHz can be used to beam signals off tables, buildings, or other
objects to find the most efficient, highest-capacity connection between
a base station and mobile user. These and many other efforts will
enable consumers to enjoy the next generation of wireless connectivity.
What is the FCC's role here? In my view, we should put a framework
in place that will allow 5G to develop in the United States as quickly
as the technology and consumer demand allow. The U.S. has led the world
in 4G, and there is certainly a lot of running room left with LTE and
LTE-Advanced. But we must continue to lead as mobile technologies
transition to 5G. The key is to make sure that the FCC does not become
a regulatory bottleneck or send signals that would lead companies to
focus their research and investments abroad.
Thanks, I believe, in no small part to your efforts, the FCC
recently expanded our millimeter wave proceeding to include over 17 GHz
of additional spectrum bands--many of which are bands that were
identified for further study in the MOBILE NOW Act.
I'm glad to see that the Commission is looking to move these
massive swaths of spectrum into the marketplace. I hope those efforts
bear fruit and that the Commission will move quickly to bring this part
of our proceeding to an order.
Next-Generation Broadcast Standard.--Another area where I hope that
the Commission can move forward quickly in a bipartisan manner involves
ATSC 3.0, the next-generation broadcast standard. In April,
broadcasters and the consumer electronics industry filed a petition for
rulemaking with the Commission asking the FCC to provide broadcasters
with the option of using the next-generation broadcast standard.
The Commission sought comment on this petition, and following the
close of comments in late June, there was widespread support for it.
There is no dispute that the next-generation broadcast standard will
allow broadcasters to provide better service to the American people.
Consumers will easily be able to watch over-the-air programming on
mobile devices. Picture quality will improve with 4K transmissions.
Accurate sound localization and customizable sound mixes will produce
an immersive audio experience. And broadcasters will be able to provide
advanced emergency alerts with localized information and greater
amounts of data.
I believe that it is important for the Commission to act with
dispatch. Just as the United States is leading the way on 5G in the
mobile space, so too should we be at the forefront of innovation in the
broadcast space. Other countries aren't standing still. Earlier this
year, for example, South Korea adopted the ATSC 3.0 standard, and ATSC
3.0 broadcasters are scheduled to begin there in February 2017. We
should get moving, too.
I therefore hope that the Commission will issue a Notice of
Proposed Rulemaking on ATSC 3.0 no later than the end of this year. Put
simply, the FCC should not stand in the way of innovation. This is
especially true because all we are talking about is giving broadcasters
the option of using ATSC 3.0. No one would be required to do so. Let's
allow broadcasters who wish to move forward with ATSC 3.0 pursue this
pro-consumer path as quickly as possible.
***
Chairman Thune, Ranking Member Nelson, and Members of the
Committee, thank you once again for holding this hearing and allowing
me the opportunity to testify. I look forward to answering your
questions, listening to your views, and continuing to work with you and
your staff in the days ahead.
The Chairman. Thank you, Commissioner Pai.
Commissioner O'Rielly.
STATEMENT OF HON. MICHAEL O'RIELLY, COMMISSIONER, FEDERAL
COMMUNICATIONS COMMISSION
Commissioner O'Rielly. Thank you, Chairman Thune, Ranking
Member Nelson, and the Members of the Committee for the
opportunity to participate in the Committee's oversight of the
FCC.
As I have stated before, while fundamental differences
remain on many matters, individual Commissioners still seek to
find areas of agreement. Today I will focus on just three
issues, but look forward to answering all of your questions.
First, 5G and wireless infrastructure. The enormous
functionality of worldwide wireless services has helped
cultivate an insatiable demand for even more. This development
has helped produce a global race among certain countries to be
the world leader in the market for the next iteration of
wireless services, commonly referred to as 5G. If successful,
it could effectively produce a type of wireless fiber with
amazing speeds, enormous capacity, and infinitesimal latency.
Thankfully, the United States is on an accelerated pace to
bring 5G to American consumers and help shape the global
marketplace for these services for the next decade or two. My
colleagues deserve credit for an expedited bipartisan effort to
make the requisite bandwidth available. My effort was to push
to successfully conclude the adoption of four spectrum bands
and to expand the spectrum review to new additional bands.
Standing in the way of progress, however, are some
localities, tribal governments, and states seeking to extract
enormous fees for providers and operating siting review
processes that are not conducive to a quick and successful
deployment schedule. At some point, the Commission may need to
exert authority provided by Congress to preempt the activities
of those delaying 5G deployment without justifiable reasons.
Switching topics to the Commission's consideration of the
new set-top box rules, Chairman Wheeler recently circulated an
order based on a new apps-centric alternative, an approach that
I have advocated for as a realization of the direction of the
current marketplace.
I should state that I appreciate that the Chairman and his
team jettisoned the previous NPRM model, but the new effort
comes with its own baggage. Instead of embracing the video
distributors' filed proposal, the latest version adds
complicated and flawed provisions to that offer, effectively
threatening and undermining the viability of the entire apps
approach.
The proposed rule would ultimately set the Commission up as
an arbiter of a compulsory license, which the Copyright Office
confirmed we have no authority to do. And although the proposal
is touted to leave programming contracts between MVPDs and
programmers intact, MVPDs would be prohibited from signing
contracts with programmers that would create unreasonable
limits on consumer access, complete with a convenient starter
list of terms that would be allowed, some that would be
unquestionably unreasonable, and, of course, a wide gray space
in between. This draft is unacceptable in my opinion.
My last issue is the Commission's overall functionality.
During my time at the Commission, I have highlighted certain
shortcomings in the Commission's processes. I certainly believe
that there are better ways to operate the Commission that would
not jeopardize the prerogative or power of the Chairman,
whoever that may be.
To facilitate this, I have given speeches, testified,
written blogs, and discussed at length the many steps the
Commission can take to correct bad practices and improve
general operations. Unfortunately, little has been accomplished
to make these or other changes, notwithstanding Chairman
Wheeler's public comments, in favor of many of my suggestions.
Process reforms are necessary at the Commission, and if the
Commission won't fix itself, I hope Congress will continue to
review the subject.
Thank you, and I look forward to engaging with you on these
subjects and others as well.
[The prepared statement of Commissioner O'Rielly follows:]
Prepared Statement of Hon. Michael O'Rielly, Commissioner,
Federal Communications Commission
Thank you, Chairman Thune, Ranking Member Nelson, and Members of
the Committee for the opportunity to participate in the Committee's FCC
oversight process. Since our last visit in March, a lot has occurred at
the Commission and more difficult issues are expected in the coming
months. As I have stated somewhat before, while fundamental differences
remain on many matters, individual Commissioners still seek to find
some areas of agreement. Today, I will focus on just three issues, but
look forward to answering all of your questions.
5G and Wireless Infrastructure
The enormous functionality of worldwide wireless services has
helped cultivate an insatiable demand for even more. Consumers want
increased mobility and now expect to be able to use their wireless
devices for additional purposes, meaning the applicable industries and
governments cannot rest on their respective laurels. This development
has helped produce a global race among certain countries to be the
world leader in the market for the next iteration of wireless services,
commonly referred to as 5G. If successful, it could effectively produce
a type of ``wireless fiber'' with amazing speeds, enormous capacity and
infinitesimal latency.
Thankfully, the United States is on an accelerated pace to bring 5G
to American consumers and help shape the global marketplace for these
services for the next decade or two. My colleagues deserve credit for
an expedited, bipartisan effort to make the requisite bandwidth
available. My effort was to push to successfully conclude adoption of
four spectrum bands and to expand the spectrum review to new,
additional bands. In short order, the Commission was able to move from
draft proposal to relatively reasonable final rules, including the
framework for the upcoming spectrum auctions to be held in the near
future, but more issues are being considered as part of the further
notice.
Despite this, the Commission can only create a climate for future
success and deployment of 5G. The real work, and ultimate overall
success of this effort, will depend on the private sector
participants--our nation's wireless providers. And they seem ready to
do their part to champion this opportunity. They have done the
research, conducted the testing, established pilot markets and are on
the verge of commercially deploying 5G services in the years ahead.
Hopefully, these efforts will not be waylaid by other Commission
actions.
One area that the Commission, and perhaps Congress, can provide
greater assistance is removing barriers to the wireless infrastructure
necessary to deploy 5G. As I have previously outlined, experts estimate
that the propagation capabilities (short distances) will require a ten-
fold or greater siting of wireless towers and antennas. Some have
argued that we may see a million new small cells and DAS antennas
deployed in the next five years. All of this infrastructure can't be
sited without approval of decision makers, including private land
owners and municipal managers.
Standing in the way of progress, however, are some localities,
Tribal governments and states seeking to extract enormous fees from
providers and operating siting review processes that are not conducive
to a quick and successful deployment schedule. At some point, the
Commission may need to exert authority provided by Congress to preempt
the activities of those delaying 5G deployment without justifiable
reasons.
Set-Top Boxes
Seven months ago, on a 3-2 vote, the Commission stretched our
statutory authority beyond recognition to produce a troubled NPRM in
the name of ``unlocking the box.'' Since then, significant concerns and
fundamental objections to the Commission's approach were raised almost
daily. Not surprisingly, the proposal previously circulated was exposed
as unworkable and inadvisable. Accordingly, Chairman Wheeler has
circulated an order based on a new apps-centric alternative, an
approach that I have advocated for as a realization of the direction of
the current marketplace. I should state that I appreciate that the
Chairman and his team jettisoned the failed NPRM model, but the new
effort comes with its own baggage. Instead of embracing the video
distributors' filed proposal, the latest version adds complicated and
flawed provisions to that offer, effectively threatening and
undermining the viability of the entire apps-based approach.
Fundamentally, the video marketplace has expanded radically since
Congress enacted section 629. Innovation spurred by fierce competition
is bringing many new options to the table, and prompting pay-TV
providers to develop their own mobile apps, all without a set-top box
anywhere to be seen. But as the market innovates past the Commission's
limited section 629 jurisdiction, my colleagues have reinterpreted that
provision to shut down all this experimentation and force the modern
video marketplace into a mandatory new framework that is likely both
illegal and infeasible.
The proposed rule would ultimately set the Commission up as arbiter
of a compulsory license, which the Copyright Office confirmed we have
no authority to do under current law. Though the Commission has stated
that the one-size-fits-all Model License would be developed by an
outside licensing body established by MVPDs and content providers, the
proposed language is clear that the job of this licensing body is
merely to develop recommendations for a consensus license,
recommendations that the Commission may accept, micromanage, or retool
at will. Actually, since the authority is delegated to the Media
Bureau, it is not even the Commissioners that will make the decisions.
And although the proposal is touted to leave programming contracts
between MVPDs and programmers intact, MVPDs would be prohibited from
signing contracts with programmers that would create ``unreasonable''
limits on consumer access, complete with a convenient starter list of
terms that would be allowed, some that would be ``unquestionably
unreasonable,'' and of course a wide gray space in between.
Meanwhile, when you look at the magnitude and the constraints of
the actual project being demanded, it is highly unlikely that it can
even be accomplished, given unlimited time and resources, let alone in
two years and with the resource demands of a highly competitive
industry. The proposal requires that every MVPD create a separate
working app for every widely deployed operating system that receives or
displays video programming. How many would that be just to start? Roku,
Amazon, Google, Android, AppleTV and Apple iOS, Windows, TiVo . . .
Blackberry? Linux? And here is the key: each of these apps must provide
the exact same functionality as a set-top box provided by the MVPD.
Given the differences in standards and capabilities among different
devices, not to mention among different set-top box options provided by
each MVPD, this seems like a heavy lift to say the least.
I look forward to continuing the dialogue with my colleagues on
this issue, but I remain skeptical, given my experiences with the NPRM,
that my views will be welcome or fully considered.
Process Reform
During my time at the Commission, I have highlighted certain
shortcomings in the Commission's processes. I simply believe that there
are better ways to operate the Commission that would not jeopardize the
prerogative or power of the Chairman, whoever that may be. To
facilitate this, I have given speeches, testified, written blogs and
discussed at length many steps the Commission can take to correct bad
practices and improve general operations. Unfortunately, little has
been accomplished to make these or other changes, notwithstanding
Chairman Wheeler's public comments in favor of many of my suggestions.
In sum, the Process Review Task Force, created by the Chairman, has
failed to deliver and practically no procedural changes have been
permitted.
The lack of action on these improvements runs counter to a process
reform just issued last week by the Chairman pertaining to the disposal
of personnel matters. Without getting into the substance, the Chairman
contemplated, decided and declared a new procedure for addressing
personnel changes that he believes are taking too long. Specifically,
the Commission will now vote on these items at its monthly Open
Meetings, without discussion or comment.
One telling thing from this new procedural decree is how fast it
was issued and without any input from my colleagues or me. The Chairman
issued the new memorandum that established the new procedures. There
was no internal review task force where Commissioners were asked their
opinion and debate was allowed. It begs the question, why can't the
Chairman adopt the many process review ideas I have proposed--at least
the ones that he is in agreement with--as quickly? In other words, if
the Chairman has such unilateral power to change the Commission's rules
at will, why can't this be used to implement the process review changes
I have suggested?
Thank you, and I look forward to engaging with you on these issues
and others.
The Chairman. Thank you, Commissioner O'Rielly.
Commissioner Clyburn.
STATEMENT OF HON. MIGNON L. CLYBURN, COMMISSIONER, FEDERAL
COMMUNICATIONS COMMISSION
Commissioner Clyburn. Chairman Thune, Ranking Member
Nelson, and Members of the Committee, good morning. Please
excuse the red eye. Despite an overnight flight that arrived
about 6:57 a.m. out at Dulles, know that I am honored to be
here and thankful for the opportunity to outline my vision--the
vision is blurred, though----
[Laughter.]
Commissioner Clyburn.--for bringing robust, affordable, and
ubiquitous connectivity to all Americans.
There is much to report in the 6 months since I last
testified before this committee. In April, I launched my
Connecting Communities Tour, a concept formed out of a desire
to see and hear from rural and urban communities as well as
those with and without connectivity.
Just last month, I visited New Mexico, where I joined
Senator Udall for a roundtable discussion on expanding
broadband access.
In the days following my visit, I heard from Randy, a
software developer from Edgewood, New Mexico. Despite living
just 20 miles east of Albuquerque, his fastest option for fixed
broadband is 7.5 megabits per second at a price of around $62
per month. In his letter, he described broadband as a cold,
hard necessity in the digital age.
Unfortunately, my experience in traveling the country has
demonstrated that Randy's story is not unique. When my
Connecting Community Tour wraps up on October 19, with a
solutions-focused policy at Georgetown University, I will have
visited 10 states, including Arizona, California, Colorado,
Massachusetts, New Mexico, New York, Pennsylvania, South
Carolina, of course, Washington, and West Virginia.
I am also excited to share that the Commission with tee up
a Notice of Proposed Rulemaking later this month, which stems
from our inquiry on independent programming. Following more
than 36,000 filings from our prior Notice of Inquiry, the
Commission has built a record that shows there are real
challenges facing independent programmers. For consumers, this
can mean higher monthly programming costs as well as
restrictions that limit their ability to watch their favorite
content through online platforms.
Third, the Commission, through its Connect2Health Task
Force, continues to focus on the intersection of broadband and
health policy. Just last month, we launched our new broadband
health mapping tool, which allows Federal, State, and local
agencies, as well as the private sector, to examine the
relationship between connectivity and health at the local
level, identify current issues, and develop future solutions to
address connectivity gaps and promote positive health outcomes.
From this initiative, we have learned that rural counties
are 10 times more likely than urban areas to have low broadband
access and higher rates of diabetes. Similarly, the neediest
counties when it comes to the intersection of broadband and
health are concentrated in the South and Midwest. Knowing this
information will help both the public and private sectors
target limited resources to improve infrastructure and deploy
connected health technologies.
Finally, I believe the Commission is on the cusp of
something big when it comes to the deployment of 5G wireless
services. We have seen the need for mobile data continue to
grow as more American consumers take advantage of their
smartphones and tablets in ways unheard of even a few years
ago.
Opening up spectrum above 24 gigahertz is just the next of
many steps in the path toward 5G technologies. As we move into
this new age of increased connectivity, it is essential that
those who live in rural and high-rent urban areas are part of
this new frontier and that industry and government work
together to make sure to narrow, rather than widen, the digital
divide in this country.
Thank you once again for allowing me to share my priorities
with you this morning. And I look forward to answering any
questions you may have.
[The prepared statement of Commissioner Clyburn follows:]
Prepared Statement of Hon. Mignon L. Clyburn, Commissioner,
Federal Communications Commission
Chairman Thune, Ranking Member Nelson and Members of the Committee,
good morning and thank you for the opportunity to outline my vision for
bringing robust, affordable and ubiquitous connectivity to all
Americans. There is much to report in the six months since I last
testified before this Committee.
#ConnectingCommunities
In April, I launched my #ConnectingCommunities Tour, a concept
formed out of a desire to see and hear from rural and urban communities
as well as those with and without connectivity. Just last month, I
visited New Mexico, where I joined Senator Udall for a roundtable
discussion on expanding broadband access. We discussed how costly it is
to deploy services, particularly on Native lands. Even in places where
broadband is deployed, the lack of internal infrastructure amongst
anchor institutions like a school or library, can make it inaccessible
to populations most in need.
In the days following my visit, I heard from Randy, a software
developer from Edgewood, New Mexico. Despite living just 20 miles east
of Albuquerque, his fastest option for fixed broadband is 7.5 megabits
per second (Mbps), at a price of around $62 per month. In his letter,
he described broadband as a ``cold hard necessity in the digital age.''
Unfortunately, my experience in traveling the country has demonstrated
that Randy's story is not a unique one.
By the time my #ConnectingCommunities tour wraps up with a
``solutions-focused'' policy forum on October 19, I will have visited
10 states including Arizona, California, Colorado, Massachusetts, New
Mexico, New York, Pennsylvania, South Carolina, Washington, and West
Virginia. The forum, which will be held at Georgetown University Law
Center, will highlight my observations from the visits and focus on
proposing answers to some of the toughest challenges facing the
communications sector, including broadband affordability, viewpoint,
diversity and inmate calling reform.
Advancing Opportunities for Independent Programming
I am also excited to share that the Commission will tee up a Notice
of Proposed Rulemaking (NPRM) later this month, which stems from our
inquiry on independent programming. Following more than 36,000 filings
in the docket in response to our prior Notice of Inquiry, the
Commission has built a record that makes clear that there are real
challenges facing independent programmers and consumers are paying the
price with higher monthly programming costs and restrictions that limit
their ability to watch their favorite content through online platforms.
Since launching the inquiry in February, I have continuously asked:
Is there an answer for those frustrated consumers seeking more diverse
programming, as well as programmers looking to expand their reach to
more households? Is there a disconnect and if so, where is it? And does
this all mean that our existing system is broken and if the answer is
yes, who should fix it? The NPRM that the full Commission will consider
on September 29 continues the process of asking and ultimately
answering these questions.
Connect2Health--Examining the Intersection between Broadband and Health
Policy
Third, the Commission through its Connect2Health Task Force
continues to focus on the intersection of broadband connectivity,
advanced technology and health. I am incredibly proud to tell you about
our new broadband health mapping tool, which allows federal, state and
local agencies as well as the private sector to examine the
relationship between connectivity and health at a local level, identify
current issues, and develop future solutions to address connectivity
gaps and promote positive health outcomes.
We have learned from this initiative that rural counties are ten
times as likely as urban areas to have low broadband access and high
diabetes. Similarly, the neediest counties when it comes to the
intersection of broadband and health are concentrated in the South and
Midwest. Knowing this information, will help both the public and
private sectors target limited resources to improve infrastructure and
deploy connected health technologies.
It is for these reasons that I applaud the bipartisan introduction
of the RURAL Telehealth Act by Senators Wicker and Schatz. The bill
recognizes that non-rural hospitals and health-care providers may be
best positioned to bring telehealth services to rural communities. By
limiting Healthcare Connect funds to providers who predominantly serve
rural areas, the legislation preserves the FCC's goal of delivering
advanced telehealth services to communities most in need.
Advancing 5G Connectivity
Finally, I believe the Commission is on the cusp of something
``big'' when it comes to the deployment of 5G wireless services.
According to the latest research, mobile data traffic has grown 4,000-
fold over the past 10 years and almost 400-million-fold over the past
15 years. We have seen the need for mobile data continue to grow as
more American consumers take advantage of their smartphones and tablets
in ways unheard of even a few years ago.
In July, the FCC took a momentous step towards bringing next
generation wireless technology to consumers by making available nearly
11 gigahertz (GHz) of high-band spectrum available for licensed and
unlicensed use. The governing rules, which balance different approaches
such as exclusive use licensing, shared access and unlicensed access,
will enable established industry players and entrepreneurs to develop
innovate offerings for consumers.
Opening up spectrum above 24 GHz is just the next of many steps in
the path towards 5G technologies. As we move into this new age of
increased connectivity, it is essential that those who live in rural
areas and high-rent urban areas are a part of this new frontier and
that industry and government work together to make sure to narrow,
rather than widen the digital divide in the country.
Thank you again for allowing me to share my priorities with you
this morning. I look forward to answering any questions you may have.
The Chairman. Thank you, Commissioner Clyburn.
Can we get you a cup of coffee?
[Laughter.]
The Chairman. Well, despite the charisma of the Members of
this committee, our hearings have a tendency to put people to
sleep anyway, so if you're already--if you've been up all
night.
We'll proceed with questions. And I've got a list here of
Members. But let me start.
Chairman Wheeler, as I pointed out in my opening statement,
you've presided over the most partisan FCC in the agency's
history, and twice the number of 3-2 party-line votes as the
five previous Commissioners combined.
I say that because I am concerned about the precedent that
it creates for future FCC chairs. And what is to prevent a
Republican FCC to come in and just reverse what you and your
colleagues have done? Or then another Democrat administration
come in and reverse the previous Republican majority, and on
and on and on? I think you see where I'm going with this.
And so my concern is, and I'm wondering what your view on
this is, is whether that approach could lead to a destabilizing
and endless cycle of regulatory uncertainty, which is what I
think everybody who follows these proceedings, and everybody
that's involved with telecommunications policy is concerned
about, is creating certainty. And it seems to me, at least,
that the current pattern, trend, if continued, could create
greater uncertainty because future Commissions could come in
and do things, everything, by party-line vote.
Your thoughts.
Chairman Wheeler. Thank you, Mr. Chairman. And I think you
raise a legitimate issue. I mean, one of the interesting saving
graces the Commission has is the need to make a decision on the
record. And I agree that we don't want to have this up-and-
down, in-and-out kind of situation. And any changes would, of
course, as I say, have to be based on the record.
I think it's important--your chart is correct, I presume. I
haven't done a box score, but I presume that you did. And, you
know, but about 90 percent of the decisions that we make are
unanimous.
And just for the record, I was trying--sitting here trying
to think about the times when some of those 3-2 votes were me
voting against one or both of my Democratic colleagues. I mean,
I recall that on the question of whether there was effective
competition for cable, that it was Commissioner Pai and
Commissioner O'Rielly and I who were the three. I recall that
on the Alaska Plan for carriers in Alaska, it was Commissioner
Rosenworcel and Commissioner Pai--and Commissioner O'Rielly and
I that were the three. My memory is weak in terms of pulling
things out on the spur of the moment.
But this is a collegial body, this is a body where the
deliberative process is important. And I, too, hope that we can
find ways to resolve issues in a concomitant manner.
The Chairman. Let me shift gears for just a minute to one
of the issues that you talked about earlier, and I'll pose this
to Commissioner O'Rielly. But Chairman Wheeler in his opening
statement said that all copyright and licensing agreements
remain intact under his set-top box proposal, and his fact
sheet says that deals made between pay-TV providers and content
providers are not affected by this proposal.
Commissioner O'Rielly, you stated that the order prohibits
MVPDs from signing contracts with programmers that the agency
deems to be unreasonable. And so I'm wondering, I'll direct
this to you to start with, and then perhaps widen it out, but
do you think it's accurate or is it potentially misleading to
say that the draft order would have no effect on the freedom of
negotiation between content orders and MVPDs for programming
carriage?
Commissioner O'Rielly. I don't want to characterize it as
misleading, but I will say that I think it's inaccurate. I have
outlined why. Because it is putting the Commission right in the
middle between the programmer and the MVPD. We're preventing
the MVPD from signing contracts that contain certain things
that we deem, that Tom Wheeler deems, as unreasonable. We
won't--the Commissioners won't get a chance to do that because
it will be done at the Bureau level with the Chairman's
oversight. So that imposes that Commission in the middle of
those decisions.
So I think it's inaccurate to say that we are leaving those
intact. Now, whether it goes retroactive or not, it's unclear
from the item, but nothing prevents the Commission from going
backward.
The Chairman. Chairman Wheeler, in your opening statement,
you called the FTC's input on your privacy NPRM particularly
helpful. And during our discussions, you have indicated that
the FTC filed good comments, so the FCC's final rule will look
a lot like that--the FCC's rule I should say. And I appreciate
your deference to the FTC's experience regarding consumer
privacy protection.
But I would like to know, will the FTC have an opportunity
to review and publicly comment on the FCC's new privacy
proposal before you all vote on it? And if not, could you tell
us why?
Chairman Wheeler. Thank you, Mr. Chairman. If I can go back
to the previous question, I'll come to this one, too, but just
to make sure. This is what the deliberative process is about.
And if there is a desire to remove the specific provision that
Commissioner O'Rielly just talked about, we can do that.
The matter of interfering with contracts, however, I want
to make a real clear point on. What we've been saying is that
we're not setting up ourselves to second-guess a contract after
it's been done. What the provision that the Commissioner was
referring to says that MVPDs cannot behave in the kind of
anticompetitive manner in contracts with programmers.
As you know, for 7 or 8 weeks this summer, we held
extensive discussions with both the cable industry and
programmers. This was a provision that the programmers
specifically asked needed to be in to protect their contracts.
I keep saying I am for protecting programmers' contracts. If
that was a mistake, as with anything else in that item, and my
colleagues have a different approach or different thoughts,
let's do it, let's get at it, and deal with those through this
ongoing deliberative process. So the door isn't closed on
anything.
Now, to your privacy question, the FTC did file with us on
privacy, and they have made multiple suggestions to us in terms
of how to improve our original proposal. And as I indicated to
you the other day, and you just referenced, we take those
seriously and are embracing them in what we do, and we have an
ongoing dialogue with the FTC.
As you know, the situation with the FTC's authority on
privacy has been significantly constrained, however, by a
recent Ninth Circuit decision in which in a suit brought by
AT&T, AT&T alleged that the FTC did not have any jurisdiction
over any activity, any activity, of any company regulated by
the FCC, and the Ninth Circuit agreed with them.
So, therefore, there is not an ability, if there ever were,
for the FTC to exert its jurisdiction, to exert authority, over
the question of the privacy activities of common carriers.
The Chairman. But the question I had was, will they have an
opportunity to publicly comment on the privacy proposal----
Chairman Wheeler. As recently as yesterday, we were working
with them on this.
The Chairman. That's different than publicly commenting,
though.
Chairman Wheeler. They can certainly publicly comment, sir,
certainly.
The Chairman. All right. Anybody else on set-top boxes or
the privacy issue before I hand it over to--Commissioner Pai,
do you want in on it?
Commissioner Pai. Senator, I would agree with Commissioner
O'Rielly's assessment, and I think it underscores the
importance of releasing these documents publicly so that
everybody can have a chance to see exactly what the terms are
that the FCC is going to be voting on.
Because as I read the document, I share Commissioner
O'Rielly's concern, that the FCC declares per se unreasonable
certain contractual terms that MVPDs will not be allowed to
enter into even if the programmer is asking for those to be
included in the contract.
The Chairman. Thank you.
Senator Nelson?
Senator Nelson. I noticed in each of your opening comments
that you all picked up on the bipartisan flavor that the
Chairman and I had commented upon earlier in our comments and
the need for building consensus.
And, Commissioner O'Rielly, I remember in your
confirmation, you actually were asked how you could ensure that
there is not a partisan divide at the Commission, and you
responded that you have a history of working across the aisle.
I think that's good.
Just a few months ago, you said in a press conference,
quote, It reminds me of an old phrase on Capitol Hill, never
count on a Democrat to hold their vote.
Now, as you have already heard the Chairman and me talking
about how we try to operate in the best traditions of the
Senate, so when I hear comments like that made publicly in
which you in effect insult every Democratic Member of the
Senate, then I wonder, how is this going to bring about
consensus----
Commissioner O'Rielly. Sure.
Senator Nelson.--and attempts at unanimity? So can you
explain those comments in that press conference?
Commissioner O'Rielly. Sure. So the phrase that I used or
the comment that I used has been mentioned--I worked 20 years
in Congress, it was used repeatedly, and so I, you know, was
repeating--it wasn't my comment, I was repeating something that
was repeatedly said by many of my employers over the years.
What we had just come from is a situation where we had an
agreement on a particular item, and I don't, unless you want
to, go into the subject, but we had an agreement, a bipartisan
agreement, on an item, and it was the third time where one of
my colleagues had backed out of the deal.
And so it's hard--you know, I think I also said as part of
my confirmation process, that when I give you my word, it is my
word, and so I will be there. We've had instances where people
have backed out of the deal 5 minutes before the open meeting.
Actually, in one instance, we postponed the open meeting a
number of times so the item could be rewritten against my
interest even though we had had a previous agreement.
So it's a frustration level, and maybe the comment is
impolite, but it wasn't my comment, it was a frustration level
to the fact that we had an agreement, and we can't count on the
word of my colleagues. And I've had difficulty with that going
forward, and it's been harmful to our relationships to--but I
turn back to the point that since then, we have had different
agreements since then. So things like 5G, things like the
Alaska Plan, where we can--I have put those things aside and
made deals that sometimes not all my colleagues agreed with.
Senator Nelson. Let me ask you about another one.
Commissioner O'Rielly. Sure.
Senator Nelson. This was a statement that you made
following the Open Internet Order, ``The D.C. Circuit's
decision is more than disappointing, it also confirms why every
parliamentary trick in Congress was used to pack this
particular court.''
Do you think that accusing Senate Democrats of packing the
D.C. Circuit Court to determine the outcome in the net
neutrality case, don't you think that enflames the partisan
divide?
Commissioner O'Rielly. Well, I think it was pointing out
the fact that I believe that occurred. I was here during the
time that we went to--I left just before the nuclear option was
initiated. November 2013 is when I was confirmed and took my
job.
So I lived through 3 years of threats of the nuclear
option, and then eventually it did happen, and participated in
all of the meetings at the leadership level when this was
discussed. So I was at the highest conversations. And so I
don't think my comments are inaccurate.
I'm not trying to enflame any Member of this body in my
thoughts. I still return to the point that I am willing to sit
down and negotiate any item that is before the Commission, and
have done so on multiple occasions.
So I'm not trying to insult you in any way. I was just,
again, to the previous comment, it was just an accurate
statement that my views were reflecting what had happened. So I
don't--it's not trying to insult you in any way.
Senator Nelson. Do you think the D.C. Court was packed in
order to determine the net neutrality outcome?
Commissioner O'Rielly. Net neutrality in and of itself? No,
sir. Do I believe it was done to change the outcome of many
proceedings, including the direction of multiple
administrations? Yes. It was a comment I pulled because I--I
know we had talked about this before, but, you know, there are
a couple comments from Senator Reid, and he said, you know, we
put onto the Court three people, and I don't think they deserve
to be on any court, but they, we put them on there, and they
have been terrible. They're the ones that said the President
can't have recess appointments, which we've had since this
country started. They've done a lot of bad things, and we're
focusing very intently on the D.C. Circuit. We at least need
one more. There are three vacancies. We need at least one more,
and that will switch the majority.
Senator Nelson. I think what is happening is this hyper-
partisan atmosphere is causing these venting comments to come
out when in order for our government to function, we've got to
have a modicum of stability and respect for the rule of law.
And I would encourage people to be mindful of their comments in
the future when observing that.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Nelson.
Senator Wicker.
STATEMENT OF HON. ROGER F. WICKER,
U.S. SENATOR FROM MISSISSIPPI
Senator Wicker. Well, I think this committee has worked on
a bipartisan basis, and I have the highest regard for the
Chairman and the Ranking Member.
I will simply say this because I don't want it to go
unchallenged. Commissioner O'Rielly has not said anything today
in testimony that isn't accurate, and I agree with what he
said. And it may sound partisan coming from the Commissioner,
but it was absolutely what happened to the D.C. Court. And in
quoting the Democratic leader, he's correct.
Now, I would like to get on with other issues, but I feel
that I have to defend the Commissioner in that what he said is
factual. But let's talk about something that is bipartisan.
Chairman Wheeler, 26 of us sent you a letter July 11, and
it was led by Senator Manchin and by this Senator regarding the
build-out of rural broadband and the Mobility Fund. On July 11,
26 of us on a bipartisan basis signed that. So thank you,
Senator Manchin, for helping with that, and thank you all who
signed it.
We got an answer yesterday. And I would just say, Mr.
Chairman, it's disappointing to me that we have to have a
hearing to get a letter back on something that over a quarter
of this body asked about. And basically the response was, We're
looking into it, we hope to get back to you by the first of the
year. No decisions have been made on how best to target the
Mobility Fund Phase II support, but Commission staff is
continuing to process reviewing the record.
So, you know, I appreciate the fact that apparently this
hearing being scheduled today persuaded you to write a letter
to us dated yesterday. Can you give us any specific steps
beyond what you said in the letter, or are you unable to do
that, about how the Commission might be expanding broadband
into the rural community?
Chairman Wheeler. Thank you, Senator. Yes, let me be
specific in that regard, I think in two areas.
The first thing that we have to know is, where is there not
coverage?
Senator Wicker. We pretty much know that.
Chairman Wheeler. The record available on that, with all
due respect, sir, has not been good because of the manner in
which the Commission collected the data.
The first way that we did that was the National Broadband
Plan, in which we relied on the states to provide information,
and it wasn't very good information.
So then we went out and we hired a third party to collect
information on a census block basis. Gee, that's pretty small,
getting down to a small area. But it wasn't granular enough
because, OK, well, there's coverage in this census block, but
it could be on the left side of the census block, but not the
right side of the census block. So it was insufficient
information.
It is my hope that by the end of this month, we will have
the analysis of the new Form 477 that we have required the
carriers to provide with us for the first time. So we put a new
third bite at the apple. Let's get the carriers to give us
specific information with responsibility for that data, and
then let's put that into what is called a shapefile, and that
means let's see it in this area and show where there's coverage
here, there's not coverage here, specifically, and not just the
generalities.
We expect to have that information by hopefully the end of
this month. So that's kind of step one. We will have the
information on which to make a decision.
Step two then is, how are we going to fund that? I am
hopeful that by the end of this year, we will have moved a
broadband Mobility Fund revision, and it's going to have to
make some really tough decisions because there are recipients
of our funds today who are serving areas where there is already
coverage.
And the question we're going to have to decide is whether
we should be funding only those areas where there is not
coverage, where we now have this very granular information, and
if that's the case, how do you be fair to those who have been
continuing--who have been receiving Universal Service funding
in competitive situations to give them some kind of a glide
path? That's the challenge we're working on right now.
Senator Wicker. Well, let me say your answer is certainly
more comprehensive today than it was yesterday, and I hope you
can move quickly on that.
Let me just say, I've got to ask a question about set-top
boxes, and the answer from Chairman Wheeler was long and
extensive.
Mr. Pai, Chairman Wheeler's talking points say this: The
proposed final rules will allow consumers to access their pay-
TV content via free apps on a variety of devices so they no
longer have to pay monthly rental fees. And I think Mr.
O'Rielly said that an apps-centric approach was what he wanted.
Enable integrated search, content protection and privacy.
Is at least that much of his talking points accurate? And
are there going to be more or fewer set-top boxes if this
proposal by Chairman Wheeler goes forward?
Commissioner Pai. Thanks for the question, Senator. I wish
I could say it were, but I don't think it is, and I think the
last point of that, for example, is critical. The protection of
content is something that I think a lot of people have focused
on, and, again, it underscores the importance of making this
public so people can judge for themselves. Don't rely on our
word about it.
The proposal on the table would interject the FCC into two
different relationships: the MVPD programmer relationship in
terms of regulating the terms that they would be allowed to
agree with, and the relationship between those two and the
third-party device manufacturers in terms of the standard
licensing.
So with respect to the standard licensing agreement, the
FCC says, well, the Media Bureau could second-guess any
consensus that the MVPDs and programmers might come to in terms
of what should be in that agreement. And if they don't reach a
consensus at all, the FCC itself will directly write the
standard licensing agreement.
And so I think unfortunately the combination of those two
provisions makes it highly unlikely, I think, that content
would be adequately protected in the view of all stakeholders.
Senator Wicker. Thank you, sir.
The Chairman. Thank you, Senator Wicker.
Senator Cantwell.
STATEMENT OF HON. MARIA CANTWELL,
U.S. SENATOR FROM WASHINGTON
Senator Cantwell. Thank you, Mr. Chairman.
And I'm not sure I understand every nuance of the
discussion that we've been having about partisanship, but one
thing I can say is I'm very glad that the FCC stood up and
decided to protect the Internet with the net neutrality rules.
So thank you so much for that.
To me, the Internet is one of the most important economic
tools and drivers of our economy, and continuing to have
consumer protections to prevent being charged for fast or slow
lanes is vitally important.
So I think as you go through this discussion, continue to
look at the consumer interests here because it's very
important.
So one thing I wanted to ask about that, and the Ranking
Member brought this up a little bit, there was a little bit of
discussion during that whole net neutrality discussion that we
were going to see a flight of capital outside because of this
rule. Have you seen that thus far, Mr. Chairman? And do you
have any comments on this ICANN discussion and some of my
colleagues' concepts about what they think they can be done
here in controlling the Internet as a U.S. domestic product?
Chairman Wheeler. Thank you very much, Senator. We have
seen increased investment in broadband networks. We have seen a
13 percent increase in fiber. This is all since the Open
Internet Order. We have seen an increase in venture-backed
activities using the now open Internet. We have seen an
increase in usage in the Internet, and, as a result, we have
seen an increase in the revenues coming from the Internet to
the carriers all since the development of the adoption of the
Open Internet Order.
Insofar as your question about ICANN is concerned, that's a
matter that's in the Department of Commerce, and I'm glad of
it.
[Laughter.]
Senator Cantwell. You have no thoughts on----
Chairman Wheeler. It is not in my arena, ma'am.
Senator Cantwell. Well, I just--we had a discussion long
ago on this committee in which one of our colleagues called it
a bunch of tubes, which obviously wasn't really what this is.
And to have a global network is critically important for that
functionality. We want to access international markets, and
having it work is very important. So thank you so much.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Cantwell.
Senator McCaskill.
STATEMENT OF HON. CLAIRE McCASKILL,
U.S. SENATOR FROM MISSOURI
Senator McCaskill. Thank you. So many subjects, so little
time.
[Laughter.]
Senator McCaskill. It's really hard. Very briefly, I do
just want to make a comment on BDS. You know, the Business Data
Services has been in front of the Commission for 10 years;
count them, 10 years. You were waiting on data. You've got
data. Let's go. Let's go. Let's make a decision. This is
important. BDS is important. So I just wanted to be a
cheerleader for a decision on BDS within the coming weeks.
Set-top boxes. Interesting about this is I am big on
competition. I think competition is really important. And as
I'll speak to in a moment, I think the set-top boxes have been
a source of some of the many scams involved with billing in the
cable and satellite industry. But I've never seen a unanimous
opposition from providers, programmers, and the creative
community. I mean, usually in this chair they're on different
sides. They're all arguing with each other. They're all unified
in their opposition to this.
So, you know, the licensing part of this, can you, Chairman
Wheeler, or any of the other members explain to me where
Congress has granted you the authority to involve itself in
copyright licensing like this as it relates to the creative
community? The copyright licensing part, this is new, and I
would like to know where the authority comes from.
Chairman Wheeler. Thank you very much, Senator. Your first
comment, the report that you put out on cable pricing and
consumer activities, as you know, one of the major issues in
there was the surprise that comes at the end of the month,
``Oh, my golly, I've got to pay this for this box, and nobody
ever told me? I don't have any choice.'' That's what we're
trying to deal with.
On your specific question insofar as copyright authority,
what the Commission is trying to do is not to write copyright
policy, but to write a policy inside its authority which does
not interfere with existing copyright authority and with the
contractual terms that copyright holders do inside that
authority.
As I said, we worked for months with the copyright holders
to try and find the way to do that. We're probably 90 percent
there. I'm looking forward to working with my colleagues on,
``What does it take to lock things down?'' Because it is not
our goal to become a judge of the contracts between MVPDs and
programmers.
Senator McCaskill. Well, I'm glad you acknowledge you're
not there yet. So let's keep working.
Chairman Wheeler. This is the--we're down to the
deliberative process at the Commission, and we've got five
smart Commissioners, and I'm sure we're going to have a very
fulsome discussion back and forth on this, and this is an
important part of it.
Senator McCaskill. You mentioned our investigation through
the Permanent Subcommittee on Investigations. Senator Portman
and I have been doing a bipartisan investigation on the cable
and satellite industry. We've done the first hearing. We have
another one coming up.
This report talks about a lot of what we found, and if any
of you haven't read it, I hope you will because it's startling.
It's startling the practices that have been embraced.
And I know you have the authority to issue customer service
and truth-in-billing guidelines for cable, but it's my
understanding, disagree with me if I'm wrong, that you do not
have that authority with satellite. Correct?
Chairman Wheeler. Correct.
Senator McCaskill. So I would certainly urge you to listen
to the phone call I taped when I called my satellite provider
about an item on my bill, and I taped the conversation. I said
clearly who I was. And they were charging me a maintenance fee
for the equipment they own.
So I was trying to get them to explain to me, ``Why are you
charging me to maintain equipment that you own, that if it
doesn't work, I can't see the programming, and so I don't have
to pay you. Why would you be charging me for that? I want it
taken off.''
And I want you to know they tried to tell me they were
going to charge me to quit charging me, and it's all on tape,
it's on the website. And it was a startling--and this was 2
days before the hearing.
So this is the kind of stuff that has been going on, and I
just hope that we deal with the fact that you do not have the
authority with satellite to clean up some of these practices.
And people are outraged at the bait-and-switch in the business
model that this uncovers that is not consumer-friendly.
So thank you, Mr. Chairman.
The Chairman. Thank you, Senator McCaskill.
Senator Fischer.
STATEMENT OF HON. DEB FISCHER,
U.S. SENATOR FROM NEBRASKA
Senator Fischer. Thank you, Mr. Chairman.
Chairman Wheeler, welcome. As you know, in June, I sent you
a letter along with several other Members of Congress, and we
were raising concerns about the FCC's recent Lifeline Order.
This letter echoed the concerns of nearly 100 State
Commissioners, that by creating a new Federal lifeline
broadband provider designation, the FCC is effectively
eliminating the States' role in deciding which carriers can
offer Lifeline within their borders.
This new designation directly contradicts the language of
the Communications Act, which gives states primary
responsibility for designating carriers to participate in the
Federal Universal Service programs. Twelve States, including
mine in Nebraska, are suing the FCC, so it appears to agree.
So, Mr. Chairman, do you assert that the FCC's recent
preemption of the states is lawful?
Chairman Wheeler. Thank you, Senator. Nothing that we did
changed the existing authority of any State PUC. The question
that had to be dealt with was, How do you determine an ETC when
for broadband service that broadband provider is a nationwide
provider, and unlike a telephone company, not just located in
Nebraska or wherever, and with a relationship with the PUC? And
we were being told that by broadband, by national broadband,
providers, that they would not be able to offer broadband if
they had to do individual State ETC certification.
The goal was, How do we get broadband to all Americans? So
the decision that got made was not to reduce any existing State
authority but to say that for broadband, which the statute does
provide for, the FCC can say you are an ETC, and that's what we
did.
Senator Fischer. First of all, I would ask, did you share
the broadband providers' concerns with State commissions?
Chairman Wheeler. Throughout the proceeding, there was a
healthy back-and-forth on this.
Senator Fischer. And haven't the states always designated
carriers where they took jurisdiction by State law, and then
the FCC, by law, only fills in the gaps?
Chairman Wheeler. I think you just specifically put your
finger on the issue when you said the state-identified
carriers. We were talking about companies that are broadband
providers that are not carriers under State jurisdiction.
Senator Fischer. Commissioner Pai, how would you answer my
question?
Commissioner Pai. Senator, thanks for the question. I do
think that the FCC essentially divested states of the authority
to decide which eligible telecommunications carriers could be
certified, which I think is an obvious legal problem given the
statute, as I read it.
But it also creates an important policy problem, and that's
because the states have been on the front lines in rooting out
a lot of the waste, fraud, and abuse we see in the system. In
Oklahoma, for example, it was the State commission which was
critical in determining that a carrier had fleeced taxpayers,
you and me, of over $27 million.
So I think we definitely want to keep states as a
cooperative partner as opposed to essentially shutting them out
on the front end, which is one of the reasons why a wide
variety of states have unfortunately seen fit to sue us to make
us follow the law.
Senator Fischer. And, Mr. Chairman, in your response to my
letter, you mentioned a partnership between the states and the
FCC. And I've heard that the states and the program
administrator, USAC, are unclear about what role the states are
supposed to play after the FCC's order. How do you plan to
remedy that?
Chairman Wheeler. Well, I did not realize that USAC was
unclear. We will move immediately to get USAC the appropriate
authorities together with NRIC or whoever the appropriate State
body is to work through what our belief is to what the process
is.
Senator Fischer. And you will work with the State
commissions as well in trying to clarify the issues that are
before them that are----
Chairman Wheeler. I'm sorry, I said USAC, I meant NRIC to
work with the State commissions. I'm sorry.
Senator Fischer. OK. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Fischer.
Senator Blunt has returned, and he's up next.
STATEMENT OF HON. ROY BLUNT,
U.S. SENATOR FROM MISSOURI
Senator Blunt. Thank you, Mr. Chairman.
Chairman Wheeler, I intended to talk about copyright law,
but I think my colleague from Missouri and Senator Thune have
both done that, so I will look at what you all had to say about
that. I chair the Rules Committee, which is the Committee that
has jurisdiction over the Library of Congress, which has the
copyright rules, and I may very well have to--want to submit
some questions on that topic.
I want to talk about two other things that we've talked
about before. In August, the Commission adopted, like in many
other cases, apparently on a party-line vote, its quadrennial
review of broadcast ownership rules. Nothing substantially
changes in those except there are two areas I want to mention,
just to be sure that we're understanding what you've done in
the way I believe it's been done, one on joint sales agreements
where one broadcaster is selling advertising time on behalf of
another in local markets.
Now, as you know, this committee has been particularly
active in challenging a sense earlier of how these agreements
would go forward, but after multiple bipartisan letters, two
acts of Congress, and a court ruling by the Third Circuit
Court, the FCC, I believe in its new rule, acknowledges
grandfathering in joint sales agreements when there's a
transfer of ownership.
And then the second thing that I think is new is in another
joint agreement, joint service agreements. Those are contracts
to share resources, like a helicopter that two news teams might
use. There are new disclosure levels in these rules that
stations have never had to disclose before in terms of the
specific, as I understand it, the specific economic terms
involved. That would be outside anything a station
independently would have to disclose.
So is this a step toward regulation? is the second
question.
The first question is, Am I right in believing that now the
new rules allow these joint sales agreements to go forward and
then----
Chairman Wheeler. Yes, sir, you are correct. And what we
tried to do was to take the specific language or the specific
intent of the language, as it was explained to us and the
appropriations writer, about grandfathering and to adopt that.
Insofar as----
Senator Blunt. Joint service?
Chairman Wheeler.--SSAs, the issue here is, How do we make
a judgment as to whether or not the rules are being
circumvented through contractual arrangements? And one of the
ways you do that is to have information. What you cited was a
collection of information, not a decision. But what is the
information? We just had a discussion a minute ago about how we
have had imperfect information on which to make decisions. This
is an attempt to get good information.
Senator Blunt. Two of you did not vote for this package.
This may or may not have been one of the topics, but if either
Mr. O'Rielly or Mr. Pai would like to comment on this, I would
like to hear what you have to say.
Commissioner Pai. Thank you, Senator. I did dissent from
the decision in part because of the FCC's restrictions on joint
sales agreements and shared services agreements.
With respect to JSAs, the record is clear and, in my view,
unchallenged, stemming from evidence that we have collected
everywhere from Joplin to Springfield, that some of these
agreements have been useful in helping broadcasters provide the
public vital information.
And with respect to shared services agreements, I think the
writing is on the wall, that the FCC is collecting information
as a step toward, as you put it, more regulation, essentially
prohibiting shared service agreements, and that's something I
think would be unfortunate for the marketplace and for
consumers in particular.
Senator Blunt. Mr. O'Rielly?
Commissioner O'Rielly. I agree with my colleague on his two
points. I think this is the first step. The SSA declaratory
structure is intended to for a future Commission to impose new
rules and limitations on stations and their ability to share
such activities.
Senator Blunt. Then can anyone tell me a way that these new
broadcast ownership rules could now be appealed or ask for a
change?
Mr. Pai?
Commissioner Pai. I think they will be appealed. I would
imagine the Third Circuit would retain jurisdiction, and given
the previous decision, the Prometheus III decision, where the
court said the FCC needs to take a serious look at whether
these regulations remain necessary. The FCC, having not just
doubled down on them but made them stricter, I think the court
is going to take to have serious concerns with what the FCC
did.
Senator Blunt. Thank you. Thank you, Chairman.
Senator Fischer [presiding]. Thank you, Senator Blunt.
Senator Klobuchar.
STATEMENT OF HON. AMY KLOBUCHAR,
U.S. SENATOR FROM MINNESOTA
Senator Klobuchar. Thank you. I also had some questions on
the cross-ownership rules, and I will put those on the record.
I thought I would start with you, Commissioner Rosenworcel,
with your work that you've long done on the 911 issue. I
appreciate that. You've come out to my state, and as you know,
Senator Burr and I chair, have long chaired, that caucus along
with Representatives Eshoo and Shimkus, and we've done some
good work including getting the $115 million in grants for the
Next Generation 911 Implementation Grant Program and have
worked to further the technology. Could you talk particularly
about the Grant Program and how it's best leveraged to pave the
way for broader investments?
Commissioner Rosenworcel. Thank you, Senator Klobuchar, and
thank you for your leadership as the head of the 911 Caucus and
also for visiting a 911 center in Minnesota with me.
Here's the thing. This program was set up 4 years ago. We
don't have many Federal programs to help accelerate 911 and
bring it to next generation. Congress asked that rules would be
developed within 120 days of passage. We are probably some
1,500 days since this law was passed.
So I think we should get it up and running, and when we do,
we need to make sure that we have a national definition of Next
Generation 911 based on nationally accredited standards. And
then we also have to make sure that we take these funds and use
them to develop blueprints in rural communities, urban
communities, and everything in between so that when we're done
with it, communities all across the country can copy and
benefit.
Senator Klobuchar. Thank you very much. As you all know, I
worked hard on the broadband issue with the Chairman, and we
appreciate the bipartisan work you did to get this done. That
wasn't one of those votes up there.
And as you know, there is still more work to be done. I
think I'll just put some record questions here about the
Universal Service reforms, Chairman Wheeler, and just the
concerns we have in getting those done.
I thought I would turn to one question about Business Data
Services, and if you could just answer it briefly.
Earlier this year, I joined several of my colleagues in
writing to ensure that the Business Data Services proceeding is
based on complete and accurate data. Do you have any other
concerns that would prevent the proceeding from moving forward?
I know that you indicated that you are confident that the
Commission has the right data, but is there anything else that
would hold it up?
Chairman Wheeler. Is there anything else that would hold it
up? I hope not. I hope that we are going to be moving on this
very soon. And I believe we do have the data. And there are
ongoing discussions virtually every day that generate more
data.
Senator Klobuchar. Very good. On the set-top box issue, I
obviously support reducing the costs, increasing choice for
consumers. I'm the Ranking Member of the Judiciary Antitrust
Subcommittee, which also focuses on the FTC, and I know the
issue was raised already, which I appreciate, on the FTC-FCC
issue of enforcing the privacy standards. And there has also
been major copyright discussions here.
But I wanted to specifically focus on the copyright issues
with regard to smaller programmers with the current proposal,
which already face narrow margins, and a difficult competitive
landscape.
Chairman Wheeler. Right.
Senator Klobuchar. Any changes that would inadvertently
harm the value of their copyrighted material or increase the
likelihood of piracy could force some of those innovative and
competitive companies out of business. What assurances would
you give them? I'm trying to figure out how this would work for
them as well as some of the other concerns that have been
raised by my colleagues.
Chairman Wheeler. Thank you, Senator. Yesterday, we
received a letter from the Writers Guild West endorsing our new
proposal and specifically talking about how it created
opportunity for independent programmers.
Senator Klobuchar. So you believe that there aren't any
problems at all for independent programmers?
Chairman Wheeler. Well, the challenge that independent
programmers face today is that, A, will the cable operator let
them on; and, B, or are they subjected to some kind of a
purgatory where they have to be out here and hard to find?
If you have the kind of integrated search that we're
talking about, it creates opportunity for independent
programmers, and that's why we have a very robust record of
independent programmers saying they support what we're doing
here.
Senator Klobuchar. I think I'll go back to my Universal
Service reform question. When can carriers expect to have all
the information they need to make a decision on the reforms to
the USF?
Chairman Wheeler. I'm glad you asked that question. As you
know, they're going to make a decision November 1. Right now,
we're out. We've got workbooks out. We're working with the
various rate-of-return carriers to help them understand. And
this is the question about whether they want to choose the new
model or want to stay with the legacy approach, and we're
working with them right now, including having a new workbook
that's out. You've got to go through and say, ``OK, how are you
going to be able to look at capital costs?'' There are all
kinds of detailed questions in there. We're trying to walk
through and give them tools to do that.
Senator Klobuchar. OK. So do we know the timing on it,
though?
Chairman Wheeler. It's out.
Senator Klobuchar. OK. So----
Chairman Wheeler. The workbook. I mean the workbook is out.
Senator Klobuchar. And so they have what they need now?
Chairman Wheeler. I hope that the workbook is the beginning
of the determination of what they need, and that we are
available and working with them through various means to answer
any questions they've got.
Senator Klobuchar. So is all the information on their
build-out obligations and budget caps, is that out?
Chairman Wheeler. Yes, ma'am.
Senator Klobuchar. OK. All right. Thank you.
Senator Fischer. Thank you, Senator Klobuchar.
Senator Moran.
STATEMENT OF HON. JERRY MORAN,
U.S. SENATOR FROM KANSAS
Senator Moran. Chairman, thank you very much.
Commissioners, thank you and Mr. Chairman for being here. First
of all, I recognize the member of the Commission from Kansas
and thank him for his call to action in regard to broadband
deployment in rural communities.
There are a number of pending orders that are highly
partisan and controversial before the FCC, and I want to make
sure we don't forget every dollar spent on compliance with
those orders, and potential regulations mean less dollars being
spent in deployment of broadband particularly in rural areas.
And rather than using the inadequate broadband deployment
as a pretext for additional regulation, Commissioner, you seem
to have tried to remove the barriers toward that broadband
deployment, and I appreciate that.
With the short time and the vote that has been called, I'm
going to save Chairman Wheeler till the last so that he gets to
keep talking and not cut into my time.
[Laughter.]
Senator Moran. But first of all, Commissioner Rosenworcel,
on the set-box top proposal, tell me, what are you thinking?
How do you see the proposal? What's on your mind?
Commissioner Rosenworcel. Sure. Thank you, Senator, for the
question. You know, set-top boxes are clunky and they're
costly. Consumers don't like them and they don't like paying
for them, and that is not just my professional opinion, it's my
personal opinion, too. So we're taking a hard look at what the
Chairman has put before us, and there's a lot in there that
seems to work.
I'm going to be very candid with you, that I have some
problems with licensing and the FCC getting a little bit too
involved in the licensing scheme here because when I look at
the Communications Act in Section 629, I just don't think we
have the authority, which I will commit to keep on working with
my colleagues because I think bringing some change to the set-
top box market would be a good thing for consumers, my
household included.
Senator Moran. Chairman Wheeler, on this topic, under your
final proposal, will device manufacturers be required to comply
with Section 631, 338(i) of the Communications Act with respect
to privacy or simply be subjected to the FTC and State attorney
generals' unfair deceptive practices act?
Chairman Wheeler. Thank you, Senator. Let me say one thing.
I look forward to working with Commissioner Rosenworcel and all
my other colleagues on the issue, the first issue, you raised.
Second, insofar as--we do not have jurisdiction over device
manufacturers. We have worked with the FTC on this issue and
are advised that if our rule requires that devices warrant to
consumers that they are complying with 338 and 631, that the
FTC will have the ability to do the necessary enforcement to
protect that privacy.
Senator Moran. Thank you. We'll have the FTC in front of my
subcommittee and this committee in the near future, and we have
some preference in the way that they do business, and we're
going to have that conversation with them.
On the topic of broadband relocation, the auctions,
following the incentive auction remains increasingly concerned
about the potential funding shortfalls and timeline, and I'm
committed to working with Senator Schatz and others on the
Committee to see that we have a plan in case the things that
we're fearful of happening actually do happen. So we look
forward to your reports in regard to that as this process goes
forward.
And again on auctions, and I'll ask this to you, Mr.
Chairman, I'm also particularly focused on 5G. And the last
time you and I spoke here at Commerce Committee, I asked about
Spectrum Frontiers and the upcoming high-band auctions. I
appreciated that you moved to complete the Frontier proceedings
quickly, and I would like to ask again about the timing for
high-band spectrum auctions.
As retention of auction funds in your budget request, I get
to visit with you and the others as well. This year they
totaled $124 million. I'm concerned about the ongoing incentive
auction. When will we hear about the high-band auctions?
Chairman Wheeler. So when I told you when you were wearing
your appropriations hat, I'm seriously concerned about the cuts
that have been proposed to the auction budget and our ability
to do all the heavy lifting in auctions that we have.
Insofar as specifically auctioning off the new millimeter-
wave spectrum, that is not scheduled because it has to work its
way--the pig has to work its way through the python in the
auction operation. But at the same point in time, there are
some pieces of that spectrum, or of what we have identified,
that already have licensees, and we are working to facilitate
sharing transfers and whatever activities may be necessary
there to get that spectrum to work even pre-auction.
Senator Moran. Thank you, Mr. Chairman. You have added to
my vocabulary. I have never heard of a pig working its way
through a python, but it's an expression that I like and may
borrow. Thank you.
[Laughter.]
Senator Fischer. Thank you, Senator Moran.
Senator Schatz.
STATEMENT OF HON. BRIAN SCHATZ,
U.S. SENATOR FROM HAWAII
Senator Schatz. Thank you very much. There are no snakes in
Hawaii, so that was----
[Laughter.]
Senator Schatz. You know, this hearing started with a very
important principle, which is to say that the Commerce
Committee, and you all know this, having many of you worked on
the Committee or certainly with the Committee, and the FCC has
been a bastion of bipartisanship, but not recently. And so I'm
struck by the collective desire, certainly described from sort
of different ends of the elephant, to get to 5-0 where we can,
and it seems to me that there are two principles to adhere to
when we're trying to get to 5-0. Right? One is compromise, and
I'll get to that, especially on set-top boxes, in a minute. And
the other is conduct.
And the exchange that Senator Nelson had with Commissioner
O'Rielly I thought was important, not because we want to single
you out, but because all of us say things that maybe don't lend
themselves to getting to 5-0.
So I just offer to you, Commissioner, and to all of us,
that we ought to think through whether or not what we're saying
is constructive and leads us to strengthen the institution of
the FCC, which has done so much over so many years, and to
strengthen the institution of the Senate and this committee to
get back to that history, that disposition, of trying to get to
5-0.
So now on set-top boxes, I absolutely support the principle
that people shouldn't be ripped off by being forced to rent a
device. I think that is now a commonly held bipartisan
principle, and it wasn't without some objections over the
months and years. But now we are very, very close to getting
across the finish line.
My concern, both on process and on policy, is that the
thing that I thought I was agreeing to and advocating for may
be accomplished in the next 15 days, but lots of other things
which I think deserve more scrutiny and oversight and
discussion may also be accomplished, and it's not at all clear
to me that it is necessary to do all of these other things in
order to get across the finish line when it comes to providing
consumers with some relief on set-top boxes.
I am absolutely encouraged by all of the Commissioners'
willingness to kind of get at what the offending provisions may
be, and I heard Commissioner O'Rielly and Pai talk about these
two offending provisions having to do with how licensing
agreements would be overseen in the future by the Commission,
and Commissioner Rosenworcel and Wheeler talking about their
willingness to discuss and probably pursue a compromise.
And so I want to just get as clear as I can without sort of
refereeing the Commission's deliberations.
First for Commissioner Wheeler, it sounds as though you are
open to modifying this to accommodate some of these quite
legitimate concerns. Is that accurate?
Chairman Wheeler. Yes, sir, if we can do that and protect
the mandate from Congress, which I believe we can.
Senator Schatz. Commissioner Pai, part of the difficulty
when conducting a negotiation is to find out whether or not
these are two of the many objections that you may have to the
current proposal or if these are the two main objections,
because to the extent that Commissioner Wheeler makes
accommodations, and then you pop up with three new objections,
that would--and I'm not suggesting you would, I just want to
get it clear that if we're trying to get to 5-0, and he does
backflips to accommodate these concerns, that we don't find
three new concerns 72 hours out. Commissioner Pai, do you want
to comment on that?
Commissioner Pai. Absolutely, Senator. And that's why my
office makes it a practice to put our suggested changes to
these orders that we vote on at our monthly meetings on our
internal chain at least 1 week and sometimes several weeks in
advance so that everyone knows what the universe of our
concerns might be and what our proposals are. Those are two of
the key ones.
Another one is that I don't want anything to inadvertently
delay or deter innovation. So, for example, any change to the
standard licensing agreement has to be approved by the Media
Bureau, and so that might end up slowing things down.
And the other thing is that I don't want the MVPDs to be
either deterred or just delayed in introducing new innovations
in their own equipment, and one of the concerns I have is that
they might be delayed or deterred because they would have to
ensure that the consumer experience is replicated on every
other app or every other wave accessing the programming. So
essentially what any MVPD does, they have to make it available
on every other platform.
Senator Schatz. But those are--you're just fleshing out the
original objections, are you not? These are not different
objections.
Commissioner Pai. No, well, this is a separate--it's
related to it, it's related to that core concern. And so that's
one of the things we're going to be hopefully talking about in
the days to come.
Senator Schatz. OK. Thank you very much.
Senator Fischer. Thank you, Senator Schatz.
Senator Daines.
STATEMENT OF HON. STEVE DAINES,
U.S. SENATOR FROM MONTANA
Senator Daines. Thank you, Madam Chair. In the spirit of
Senator Schatz trying to perhaps help broker the peace process
within the FCC, let me take a shot at that as well.
In March of this year, the U.S. House passed the Small
Business Broadband Deployment Act. If was a vote of 411 to
zero. There are very few votes in the United States House where
you have a zero on the end of anything. It then came over here.
We had it in the Senate. This is my bill. It passed this
committee 21 to 3, that's a pretty good shot. Three touchdowns
versus a field goal.
[Laughter.]
Senator Daines. And so that's about as strong a
bipartisanship as we'll see around here. The Commission is set
to consider extending the exemption again in December.
It's pretty clear that Congress has spoken on this issue. I
would argue it hasn't stuttered, it hasn't spoken, it shouted
pretty loud. And maybe I'll start with the Chairman. Do you
agree that Congress's intent on this issue is clear? And will
you vote to extend the exemption for small businesses?
Chairman Wheeler. Thank you very much, Senator. You know,
one of the issues about--on the whole small business question
is, just what is the definition of a small business when you're
in the broadband business? You know? The SBA defines a small
business as $38 million or less in the broadcasting space.
Senator Daines. Right. Yes. And I've spent a lot of time in
the technology business looking and trying to stratify and
looking at how you segment businesses certainly within a
particular vertical. Congress has spent a lot of time, and we
debated that. I worked very hard with some of my colleagues
across the aisle, and we took a subscriber view of that versus
a revenue view, of 250,000 subscribers. So I----
Chairman Wheeler. And we're sensitive to what you----
Senator Daines. Right.
Chairman Wheeler. I'm fully--the interesting thing is that
250,000 subscribers is about $250 million in revenue when take
a revenue approach. And so you've got to say to yourself, are
you going to keep transparency because it's, quote, too
expensive away from consumers who are on companies that do a
quarter billion dollars a year in revenue?
And I'm not trying to be judgmental with that, I'm just
saying that's kind of the facts. And what we're doing is, as
you know, we have until the end of the year to decide, are we
going to extend this or not? And that's the kind of thing we're
wrestling with.
Senator Daines. And I won't--OK, so it's not so much
whether in principle you agree with there should be a line
drawn, it's perhaps where the line is drawn.
Chairman Wheeler. Where's the line, correct, sir.
Senator Daines. And I guess I just would respectfully say
in the spirit of trying to hopefully generate more bipartisan
agreement at the FCC level, Congress has spoken very loudly on
that and very clearly on that, and I hope you would respect at
least our guidance there as you deliberate on where that line
should be drawn.
Chairman Wheeler. Yes, sir.
Senator Daines. Thank you. In fact, I think the only
difference between the two chambers was a 5 year versus 3 year
is the difference, where agreement on the level where the line
should be drawn.
Chairman Wheeler. Yes.
Senator Daines. I want to shift gears and talk about the
wireless coverage Mobility Fund. In Montana, the wireless
coverage is not just a convenience, it's really a public safety
issue. Many Montanans, as many people who live in rural areas,
live many miles from the next home, from a hospital, and having
that kind of connectivity is very essential.
Mr. Chairman, you talk about competition. I know we've had
you in Montana, and thank you for coming to Montana. In
Montana, competition can be limited. And I'm curious on your
thoughts around what can be done. What are you doing to promote
additional competition, particularly in rural America?
Chairman Wheeler. Thank you very much, Senator. I think
there are multiple things. One, I know your question was about
competition, but first we've got to make sure everybody has got
coverage, and that's what I was talking to Senator Wicker
about. And we are going to adapt the Mobility Fund to work on
that, to move toward that.
Second, I think that there are new technologies that hold
great promise. You know, there are--you know, Rwanda, which is
worse than Montana in terms of dispersion, has some really
interesting infrastructure-sharing things that they are doing,
and I suggested at the cellular convention 2 weeks ago they
might want to look at things like that.
I think that 5G and the promise of 5G--you know, the folks
at Verizon have been telling us that they think that 5G is a
rural solution in many ways and that they refer to it as
wireless fiber.
So I think that there are multiple solutions, including our
policies, innovative approaches, and 5G.
Senator Daines. Thank you, Mr. Chairman. I'm out of time.
Boy, it goes by fast when you're having fun.
Just a closing comment. We are getting a fair amount of
input from the people I represent back home about AM radio.
I'll just leave it as a comment. I just want to share my
concern.
As it's written today, the proposal could actually leave
some Montanans without AM radio service. I look forward to
working with you to discuss it a little further because
sometimes you have a--if you can't get connectivity, AM radio
sometimes is sometimes your link back to--it is, and really it
becomes a link for weather forecasts and so forth for folks who
are out there spending time on tractors that we want to make
sure we take care of.
Chairman Wheeler. I look forward to helping you on that.
Senator Daines. Thank you much.
The Chairman [presiding]. Thank you, Senator Daines.
Senator Markey.
STATEMENT OF HON. EDWARD MARKEY,
U.S. SENATOR FROM MASSACHUSETTS
Senator Markey. Thank you. Two years ago I voted for
Commissioner O'Rielly. I've known him for 20 years. He's a
conservative. He's a Republican. I voted for him.
Commissioner Rosenworcel two years ago was promised a vote.
By unanimous consent, we can bring that vote up on the floor
this afternoon so that Commissioner Rosenworcel doesn't have
that cloud, you know, that is unnecessarily over her head, and
I would ask, on a bipartisan basis, that we confirm her by
unanimous consent out on the Senate floor. We can do it
immediately. And I just think it's an important statement for
the Committee to make.
This is a relic of the past. It's a typical satellite
Artelco set-top box. But it's today. This could be in your
house 20 years ago; this could be in your house today.
An investigation led by Senator Blumenthal and I found
that, one, approximately 99 percent of all American pay-TV
subscribers rent this set-top box from their pay-TV provider.
Two, these subscribers spend on average $89 a year renting
a single set-top box, but the average household spends $232 a
year on set-top box rental fees, renting about two and a half
boxes. In other words, over 10 years, the average family is
paying $2,300 to rent this box, $2,300. That's a good business
to be in. The set-top box rental market may be worth more than
$19.5 billion per year.
Now, this little device I have here in my hand, it's an
Amazon Fire Stick. It costs $40 for a consumer to purchase. And
there are many other devices like this out there, such as Roku,
Chromebox, Apple TV. Consumers today can use these devices to
watch content from multiple sources, Hulu, Netflix, but which
they also pay. But this device cannot play the programming
package that consumers pay for each month from their cable,
satellite, or telco provider.
Put another way, the only way for a consumer--the
approximately 100 million households who subscribe to pay-TV--
is to watch the programming that they have paid for is to rent
a box from their cable, satellite, or telco company. Consumers
cannot watch their pay-TV programming on these third-party
boxes. $2,300 every 10 years for this. Good business. So that's
what the FCC is considering right now.
How do we transition to the modern technology and not an
archaic technology? We did it with the black rotary dial phone.
You don't have to rent that anymore from the telephone company,
you go down to the store and buy one. We had to change the
laws.
On programming, the program is--it was a big controversy in
1992 because actually rural Americans wanted 18-inch satellite
dishes, but the cable industry wasn't willing to sell HBO and
Showtime and CNN to them. So we had to change the laws so that
those 18-inch dishes could get access to the programming.
It has to be reasonable. That's the standard. But we
changed the law. Who would imagine the world today without
DIRECTV? Huh? Who would imagine that world? We had to create it
because they needed access to the programming.
So this device is something that only the FCC now can do
something about. The FCC's proposal will ensure that through an
app created by the cable company, the cable programming package
can be played on this third-party device so consumers aren't
forced to continue paying exorbitant rental fees.
It's that simple. That's what this debate is all about. We
don't want consumers to be forced to rent a box from their pay-
TV provider in perpetuity when they can buy a device that gets
the same job done. That lack of choice has to end now.
So, Chairman Wheeler, you've heard these concerns on
programming, on copyright. We had the same issues back with the
18-inch satellite dish, but we worked it out, we created a
standard that worked. So talk about how open you are to finding
a common sense solution that can work so that over the next 14
days the consumers can be freed from these chains that have
been binding them since the day they first had a cable system
installed in their house.
Chairman Wheeler. Thank you very much, Senator. I hope that
the significant departure from structure but not from principle
that our new proposal represents is a real-life indication of
how we are willing and seeking to resolve remaining concerns
while allowing that chain to be dropped. Thank you.
Senator Markey. And, again, if anyone wants to continue to
rent this for the rest of their life, they're going to be
allowed to under the law. No one is going to stop them from
paying another $2,300 over the next 10 years. They'll still
have options.
Chairman Wheeler. And the interesting thing I read in
Business Week a couple of weeks ago is that Comcast is shipping
40,000 set-top boxes a day, a day, right now.
Senator Markey. So that's our job and your job to find this
common sense solution, but we have to find a solution. We did
it for the 18-inch satellite dish. We did it for the black
rotary dial phone. Past Commissions found the answer. That's
your job, and I urge you to do it in the next 2 weeks. I think
the American people will say that's one of the greatest days in
the history of the Commission, to be freed from this kind of a
chain.
Thank you, Mr. Chairman.
The Chairman. Will the Senator from Massachusetts hold up
that Amazon Fire Stick again? OK. All right. There it is.
The letter from Amazon to the FCC is opposed to this
proposal, by the way, just a point of fact.
Senator Markey. I will add one more fact. All of the
programmers back in 1992 opposed having to sell their
programming to the 18-inch satellite dish. Discovery came in to
me and said, ``We don't want to have to sell to the satellite
dish.'' I said, ``You can write a note to me in 5 years when
you have like four Discovery channels up on a satellite.'' And
I understand you've gotten a call that you can't refuse, but we
all know that the only way this works is if we, that is, the
government, steps in to free up these programmers so that they
can sell it to as many devices as possible. It----
The Chairman. It's not often that a company opposes their
self-interest, but their statement here to the FCC is that the
process to create such a license and oversight body will delay
competition and delay customers from receiving the MVPD
services they already pay for on the device of their choice.
That's their statement.
Senator Markey. That is a concern about the licensing
board. It is not a concern about whether or not this device
should be able to process the CNN and HBO. We can work out this
licensing board issue. These Commissioners are brilliant and
they have the capacity to be able to resolve it.
The Chairman. Well, it would be good if they would work
that out, and it would be good if they would also publish that
so people could see it before they adopt it.
Senator Markey. Yes.
The Chairman. Next up is Senator Gardner.
STATEMENT OF HON. CORY GARDNER,
U.S. SENATOR FROM COLORADO
Senator Gardner. Thank you, Mr. Chairman.
And, Senator Markey, I was just wondering if we finally
found Al Gore's lock box. Is that it right there? Is that the--
--
[Laughter.]
Senator Gardner. Chairman Wheeler, as we've discussed
before, satellite TV subscribers in La Plata and Montezuma
Counties in southwestern Colorado, the Four Corners area,
currently receive New Mexico-based broadcasts.
Chairman Wheeler. Right.
Senator Gardner. In addition, the geographic challenges
unfortunately leave the vast majority of those viewers without
access to over-the-air broadcast signals, obviously some
significant mountains in between Denver, the Front Range, and
Durango. And I commend the work that the broadcasters and
satellite providers continue to engage in as they work to
deliver Colorado TV to all four corners of Colorado.
Congress also worked to address this issue in the 2014
STELAR legislation----
Chairman Wheeler. Right.
Senator Gardner.--by extending the market modification
process to satellite TV. As they crafted the final rules to
carry out this provision, I, along with Senator Bennet and
others, urged the FCC to permit county Commissioners to
petition for market modification, and I thank you for adopting
that option.
In light of those rules, the Commissioners from La Plata
County and Montezuma County have expressed interest in moving
forward with the market modification process. DISH has also
indicated that providing Colorado television is not technically
infeasible. The Colorado broadcasters recently sent both
Senator Bennet and I a letter stating that they are willing to
provide their content to DISH in the two counties.
With this progress, I'm calling on the county Commissioners
in Colorado at this hearing, calling on the county
Commissioners involved in Colorado, the broadcasters and DISH
together, so that we can convene in a meeting next month in
Colorado to discuss ways that we can reach a final resolution.
I hope that Senator Bennet and Congressman Tipton will be able
to join me in that meeting as well. We've got to get this
finally solved.
So, Chairman Wheeler----
Chairman Wheeler. Senator, and if we can help in that,
we'll be happy to be at that meeting, too.
Senator Gardner. Thank you.
Chairman Wheeler. You tell me how we can be helpful.
Senator Gardner. Thank you. And I just again would
reiterate that commitment. You have given it to me here and
before. The FCC will expeditiously review any market
modification petitions submitted by La Plata or Montezuma.
Chairman Wheeler. Yes, sir.
Senator Gardner. Thank you very much for that.
And in light of the discussions--and I'm sorry, Senator
Udall, I don't mean to offend New Mexico TV, if that's----
[Laughter.]
Senator Gardner. It's certainly not intended to be that
way, just the Broncos.
[Laughter.]
Senator Gardner. Got to keep them there, got to keep them
there.
We talked about the complexity of these rules and
regulations that Senator Markey brought up that Chairman Thune
is talking about.
Commissioner Rosenworcel, just a couple of months ago you
expressed concern with the complexity of the initial set-top
box proposal, calling it too complicated. And Washington, D.C.,
is the only place where we make things simpler by adding to its
complexity.
The FCC's fact sheet describes the new proposal as being,
quote/unquote, simplified. Do you agree with that, that the new
rule is simpler than the original plan? And have your concerns
about this complexity been addressed?
Commissioner Rosenworcel. Well, as I said before, it's time
to inject competition into our set-top box market. Nobody has
ever written me telling me that they love their set-top boxes.
Maybe that's happened to you, but I pretty much doubt it's
happened to anybody who serves in this room.
And so I appreciate that the Chairman has made an effort to
get a conversation started on this point, but if I have one
concern, and I mentioned this earlier to Senator Moran, it's
that the licensing scheme we have here gets the FCC in the
business of trying to figure out model licenses, and I don't
see how that easily fits under the statute we have.
So that would be the complexity I see that needs work, but
I'm committed to continuing to talk with stakeholders and my
colleagues to see if we can iron some of that out and make it
simpler.
Senator Gardner. Commissioner Pai, Commissioner O'Rielly,
would you like to address this issue of complexity?
Commissioner Pai. I would agree with some of the concerns
that Commissioner Rosenworcel has expressed. And I think
originally the apps proposal, as it was presented to us, was a
much simpler one than the one we have now. The proposal on the
table takes it but also imports a lot of the problems that we
had with the original set-top box proposal.
And so I would hope that we embrace more of the original
apps proposal as it was presented to us instead of adding in
all these layers of FCC review of programming agreements and
the standard license agreement and so forth.
Commissioner O'Rielly. Yes, I would agree. I think that
what's been presented and circulated is simpler than before. It
still has difficulties and problems that I've outlined. The two
major areas need to be addressed, and hopefully we'll be able
to do that in the coming weeks.
Senator Gardner. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Gardner.
Senator Booker has returned.
Senator Booker.
STATEMENT OF HON. CORY BOOKER,
U.S. SENATOR FROM NEW JERSEY
Senator Booker. I'm really grateful and always excited when
there's a Cory-to-Cory connection here. The Cory caucus is
thriving.
[Laughter.]
Senator Gardner. Both four-letter words.
Senator Booker. Yes.
[Laughter.]
Senator Booker. So, as you all know, I was Mayor of Newark,
and mayoralty cities are where innovations are happening, where
they're finding creative ways to get things done, where there
are innovative public-private partnerships. I'm just excited
about these mayors across the country. Fiorello La Guardia said
there is no Republican or Democratic way to fix a pothole, you
just fix it. So you don't see the kind of partisan rancor you
see up here, you just see people saying, ``We've got problems,
let's get it done.''
And this is why I was so supportive of the ideas of
municipal broadband, especially in areas where there are poor
folks or rural folks who just aren't getting service, and this
idea that somehow the private sector is going to get this done,
well, they're not. And other countries have greater broadband
penetration than we have.
And so we see that when it comes to overall this crisis in
our country, which I think is the broadband deployment, we have
to really start focusing on allowing municipalities to get
things done.
And so there is slow broadband, no broadband, and as a
result of all this, one of the early things I did as a Senator
was introduce the Community Broadband Act with the support of a
lot of my colleagues here in a bipartisan way to preserve the
rights of local governments to invest in broadband networks.
Now, with consent, I would like to put in the record a New
York Times story from August 28 that was just really
disturbing. It's about some folks who are rural consumers in
Wilson, North Carolina, my father's home state, and if I can
have consent to enter this article in the record.
The Chairman. Without objection.
[The information referred to follows:]
The New York Times--Aug. 28, 2016
Broadband Law Could Force Rural Residents Off Information Superhighway
By Cecilia Kang
WILSON, N.C.--On the first day of the harvest last week, a line of
trucks brimming with sweet potatoes rolled into Vick Family Farms,
headed for a new packing plant that runs on ultrafast internet.
The potatoes were tagged with online bar codes to detail the plots
where they grew, their types of seed, and dates and times picked. On a
conveyor belt, 50 flashing cameras captured and sent images of the
spuds to an online program that sorted the Carolina Golds by size and
quality and kicked them into boxes.
The Vick family built the plant only after the nearby City of
Wilson agreed early last year to bring its municipal broadband service
to the 7,000-acre farm. Since the plant opened in October, the farm's
production and sales to Europe have jumped.
But now, after a legal battle between state and Federal officials
over broadband, the farm and hundreds of other customers in the eastern
region of the state may get unplugged.
``We're very worried because there is no way we could run this
equipment on the Internet service we used to have, and we can't imagine
the loss we'll have to the business,'' said Charlotte Vick, head of
sales for the farm.
Vick Family Farms got caught between the Federal Communications
Commission and North Carolina state legislators over the spread of
municipal broadband networks, which are cityrun Internet providers that
have increased competition in the broadband market by serving residents
where commercial networks have been unwilling to go.
This month, the United States Court of Appeals for the Sixth
Circuit upheld restrictive laws in North Carolina and Tennessee that
will halt the growth of such networks. While the decision directly
affects only those two states, it has cast a shadow over dozens of
cityrun broadband projects started nationwide in recent years to help
solve the digital divide.
In siding with the states, the court hobbled the boldest effort by
Federal officials to support municipal broadband networks. While the
court agreed that municipal networks were valuable, it disagreed with
the F.C.C.'s legal arguments to preempt state laws.
Now, cities like Wilson fear they have little protection from laws
like those in about 20 states that curb municipal broadband efforts and
favor traditional cable and telecom firms. City officials say cable and
telecom companies that have lobbied for state restrictions will be
encouraged to fight for even more draconian laws, potentially squashing
competition that could lead to lower prices and better speeds to access
the web.
``This is about more than North Carolina and Tennessee,'' said Deb
Socia, executive director of Next Century Cities, a nonprofit coalition
of cities exploring broadband projects. ``We had all looked to the
F.C.C. and its attempt to preempt those state laws as a way to get
affordable and higherquality broadband to places across the Nation that
are fighting to serve residents and solve the digital divide.''
In Wilson, officials said cable and telecom companies rejected
requests to team up with them and upgrade aging networks, which led the
city to start its own broadband network called Greenlight in 2008. The
service provides speeds of one gigabit per second, which lets people
download big video files in seconds or minutes instead of several hours
with DSL or basic cable broadband.
In 2011, companies like Time Warner Cable, represented by the cable
lobbying association, asked the North Carolina legislature to adopt a
law to limit Wilson's ability to serve customers outside Wilson County,
even though the city serves electricity customers in four additional
counties.
Grant Goings, Wilson's city manager, said the court decision made
it unclear ``how we can bridge the digital divide and create economies
of the future when there are corporate interests standing in the way.''
But some lawmakers and free-market-oriented think tanks say public
broadband projects should be carefully scrutinized by local regulators
because they are costly and, if unsuccessful, can be a financial burden
on taxpayers. In addition, the F.C.C. cannot intervene in state laws,
they said.
The court decision ``affirms the fact that unelected bureaucrats at
the F.C.C. completely overstepped their authority by attempting to deny
states like North Carolina from setting their own laws to protect
hardworking taxpayers and maintain the fairness of the free market,''
Thom Tillis, a Republican United States senator who pushed through the
2011 bill when he was North Carolina's House speaker, said in a
statement.
CenturyLink, one of the broadband providers serving Wilson and
surrounding areas, says it offers competitive Internet speeds and has
upgraded its networks. The company says it wants to partner with
municipalities but is concerned that city-run networks may have an
unfair advantage.
``If local governments choose to compete with private Internet
service providers, there needs to be a level playing field,'' said
Rondi Furgason, CenturyLink's vice president for operations in North
Carolina.
The F.C.C. does not plan to appeal the Federal court's decision
``after determining that doing so would not be the best use of
commission resources,'' Mark Wigfield, a spokesman for the agency, said
in a statement. That means municipalities that want to keep expanding
their municipal broadband networks will have to fight to overturn state
laws on their own.
The legal fight is being closely watched by other cities in states
that have similar broadband restrictions, such as Colorado and
Washington. Even big cities like Los Angeles and San Francisco are in
the early stages of exploring municipal broadband networks, which they
view as crucial to serving lowincome families who cannot afford service
from cable and telecom companies.
``It's bad news for projects looking to expand beyond their borders
in hostile, antimuni broadband states,'' said Robert Wack, president of
the City Council in Westminster, Md., which began its own gigabit
municipal network last year.
For thousands of residents in communities near Wilson, about an
hour from Raleigh, the court decision has created whiplash.
In Pinetops, a short drive east of Wilson, many residents cheered
the arrival of the Greenlight service last year. The former railroad
stop, known for its picturesque pine trees, has long struggled to
maintain its population of 1,300. Though many cars pass through the
town, there is little reason to stop, since many storefronts are
shuttered.
Last year, Pinetops officials pleaded with Wilson, its much larger
neighbor that provides water and power to the area, to also bring its
broadband service. They saw how having Greenlight had helped Wilson
attract companies like Exodus FX, a visual effects company that has
worked on movies like ``Captain America'' and ``Black Swan.'' In
February, Wilson expanded Greenlight to Pinetops by extending fiber
lines to 200 homes, and it has plans to serve 400 homes by later this
year.
Tina Gomez, a Pinetops resident, quickly saw Greenlight's benefits.
She recently got a telework job with General Electric, which requires
reliable high-speed Internet service to run a customer service software
program. Ms. Gomez, 37, also started online courses in medical billing
and coding. Before subscribing to Greenlight, finding telework was a
challenge because the existing home Internet service was too slow, she
said.
Now the political squabble over broadband may hurt her livelihood.
Mark Gomez, Ms. Gomez's husband, said they would move from Pinetops to
Wilson when their broadband service was disconnected.
``We can't stay if the basic services we need aren't here,'' Ms.
Gomez said.
At Vick Family Farms, Ms. Vick recalled what life was like before
Wilson's municipal broadband service. Her previous service, supplied by
CenturyLink, often stalled or stopped entirely. One week before
Thanksgiving a few years ago, the farm was shut down for hours because
of an Internet failure, so workers had to pack boxes by hand.
``We can't step back in time when everyone else is moving
forward,'' she said.
Senator Booker. But it's based upon a rural broadband
program that was done by a municipality. They were able to make
massive investments in upgrading their farms. It's a really
fascinating article about innovation at the local municipal
level and innovation in agriculture, but that's all now being
put at risk and rural residents could be forced off of the
information superhighway. And this isn't just a bunch of people
doing online sports betting; these are folks that need this for
education, that need this for work, that need this for their
businesses.
And so I was disappointed, if not angered, by a recent
court decision that overturned the FCC's action to approve
petitions for communities seeking to supply their communities
with local broadband. I was even more troubled to learn that
the FCC will not pursue the case further.
I sympathize with the Commission's tight resources and they
need to make tough choices, but I think we owe the American
people, families like this and this family business, a chance
to fight to make sure that they can get broadband access.
So in light of the court's decision, how important is
Congress then, given the FCC's inability to put the resources
into pursuing this case? Could you just give a few thoughts on
how important it is for Congress to act on this?
Chairman Wheeler. A number one importance. There are a few
words.
Senator Booker. That's a few words. Man, if everyone was as
cooperative in my life as you are, I might be married right
now, sir. Moving on.
[Laughter.]
Chairman Wheeler. I can't help with that.
[Laughter.]
Senator Booker. Moving on, I know there has been a
dialogue, and forgive me for having to step out to vote, but I
just want to get back to the set-top box controversy. I have my
own unofficial polling mechanism, which is when my Twitter
blows up, I know that this is an issue on the minds of lots of
different diverse interest groups around America.
One of the most robustly debated topics is something that's
of great interest to me is a guy who has both a TiVo in one
room and a regular cable box in the other one. The product in
the cable box is so inferior, so much more costly aggregated
over time, so much worse technology.
And I live in a poor neighborhood, and its census tract I
think is below the poverty line, and see my neighbors getting
what I think is bilked for this device. However, there are a
lot of my friends who I trust who are some of the greatest
companies in this country who create tremendous wealth, are
responsible for our greatest American exports, who have
expressed to me legitimate concerns.
And I would like to just conclude, if you would you said
that you have been talking with them, that you are 90 percent
of the way there. I just want for my own benefit, can you be a
little more specific about the progress you've made, what that
10 percent gap is, and how do we get to a point where some of
our valued companies in America are satisfied? What's going to
get us to 100 percent?
Chairman Wheeler. Thank you very much, Senator. Let me try
and be succinct in a complex area. The Congress mandated
competitive boxes. The industry responded with a licensing body
that they created. So all this stuff about licensing bodies. A
licensing body they created that then put out--then did not put
out licenses. OK?
Now, as we look at the situation that we've got here, how
do we set it up so that the industry, not us, is determining
how this licensing structure works? But how do we learn from
the past?
So one thing that we did was we said, OK, let's put a
little tension on the board. Let's put programmers on there so
that the cable operators and the programmers are kind of
keeping each other honest. But, you know, there's an occasional
backscratching that goes on between those two.
So we said, well, why don't we put on the equipment
manufacturers and have a three-way discussion there? So they're
kind of everybody keeping everybody else honest so the
licensing can move forward. Absolutely not. Programmers
wouldn't agree. Cable wouldn't agree. That will blow everything
up. OK?
So then who is going to be the trust-but-verify backstop in
this? Well, why not the Commission? That's the thought process
that brought us to where we are. As I have said repeatedly, we
are now in the deliberative process at the Commission, and that
we are open to whatever can solve the problem that has been
identified in terms of licensing, which I'm not sure is a real
problem, but I will say I am open-minded to how you solve it,
and at the same time, respect the mandate of the Congress that
said thou shall have competition.
And I'm heartened by my Commissioners up and down the
table--not my, the Commissioners up and down the table saying
they want to work together on this proposal, and I want to join
with them and try and resolve this.
Senator Booker. I'm way over time. I want to thank my
Chairman for his indulgence. I appreciate it.
The Chairman. Thank you, Senator Booker.
Next up is Senator Sullivan.
STATEMENT OF HON. DAN SULLIVAN,
U.S. SENATOR FROM ALASKA
Senator Sullivan. Thank you, Mr. Chairman.
And I want to begin by thanking all of you on the work that
you and your staffs did on the Alaska Plan. I know that several
months ago we had a hearing where you all committed to make the
decision whether you were supportive or not by the end of the
second quarter. And we're close, so I appreciate that, and I
appreciate the work you're currently doing to finalize the CAF-
II funding issue, and I know that the staffs are working on
that as well with Alaska's price cap carrier.
And, Mr. Chairman, you mentioned that it's all about
coverage, of course, particularly in the rural communities,
particularly in the extreme rural communities that I like to
say. You know, I was out, like all of us, back home over the
summer, and was in a lot of communities that are still
struggling. You know, sometimes you think about the most remote
communities that don't have a lot of activity.
I was actually out on Alaska Dutch Harbor, this is out in
the Aleutian chain. This is the number one seafood port in
America, so it has enormous economic activity out there, but
still really, really concerned about the lack of broadband
access. And I know that the work the Commission did is going to
help on that. So again I want to thank everybody for working
hard on that issue for my State, which I think has some unique
problems or challenges.
I want to broaden the discussion here, though, building on
a little bit of what Senator Daines was talking about, about
small businesses, and broaden it to kind of the broader issue
of the lack of economic growth that's going on in the country.
This is an incredible dynamic industry that all of you
oversee, and yet when you look at our growth from our Nation's
perspective in the last 10 years, it has been very substandard.
President Obama will be the first President that, I think, on
record has never ever hit 3 percent GDP growth in one quarter.
We've had a lost decade of economic growth, and one of the
reasons I think that's clearly happened is that we overregulate
ourselves in so many different sectors.
So we've had the Secretary of Transportation here saying it
takes 5 to 6 years on average to permit a bridge. We had the
head of the Seattle Airport who talked about it took 14 years
to get a permit to expand a new runway at Sea-Tac. In the oil
and gas sector, it took 7 years and $7 billion for a company to
get permission from the Federal Government to drill one
exploration well off the coast of Alaska; 7 years, $7 billion.
We're our own worst enemy, as the Federal Government, on
inhibiting economic growth.
In the last hearing, all of you committed to working with
us on looking at legislative recommendations on the way we, in
Congress, can assist the FCC in helping streamline our
processes and get projects moving, get dirt moving, starting to
build things.
So I offered an amendment on MOBILE NOW that would have an
application deemed granted if there's a certain amount of time
that passes on construction on Federal lands.
But what I really want to hear just from all the
Commissioners is on this issue, I know you've been thinking
about it a lot, but what are the big issues that we need to
help deploy the resources of this very dynamic industry so we
can start growing the economy? And I know you've been thinking
about it.
Commissioner Rosenworcel, I know you've been thinking about
it. Can you--and I really want to open this up to all of you.
What can we do, what should we do, to help us start building
things in this country again, particularly in this very dynamic
sector of our economy?
Commissioner Rosenworcel. Thank you, Senator. You know, we
now are in the early days of a wireless revolution. It's
becoming such an important part of civic and commercial life,
and the challenge is to get it built everywhere, especially as
we move to a new future with the Internet of things. And we
spend so much time talking about spectrum and what's happening
in the skies, and the least glamorous part is what's happening
on the ground, but it deserves twice as much attention.
We need dig-once policies all around the country,
especially in Federal lands, to make sure every time we have a
construction project, we also lay fiber. That fiber serves
wireless facilities and towers.
We need to start holding contests for communities and tell
them, ``There's a reward in it for you if you figure out a way
to expedite wireless deployment, particularly of small cells
and new architecture and infrastructures.''
And then, finally, I think when it comes to Federal
authorities, which control about one-third of our Nation's real
estate, we should make sure that there are master contracts and
that they are required to use them. And if we do that, we will
standardize and harmonize it and actually achieve some more
build-out.
Senator Sullivan. Well, we want to work with you because
those are all--you don't, Mr. Chairman, you don't have the
authority on those kind of issues. You need legislative
approval to do that kind of streamlining to deploy these
assets. Isn't that correct?
Chairman Wheeler. There is a debate over that, Senator. I
have been very encouraged to hear my two colleagues today talk
about how we have to step up to the question of preemption on
siting issues. We need to respect the rights of localities.
Senator Sullivan. Of course.
Chairman Wheeler. But the rights of localities do not
extend to thwarting the construction of the information pathway
of the 21st century. And how do we work that out in a balancing
act? And that's what they are to----
Senator Sullivan. Well, we want to work with you, Mr.
Chairman. I know my time has expired, but we also want to work
on your ideas on Federal lands because to me that's where we
clearly have a jurisdictional role. It doesn't get into the
issue with the smaller communities and localities. And I think
it's an area where we can get a lot of bipartisan support to
start building things. And I want to work with all the
Commissioners on these ideas because I think we can really
achieve some bipartisan consensus here on some of these
important issues. So thank you.
Thank you, Mr. Chairman.
Chairman Wheeler. Senator, can I do 30 seconds? T.W. Patch
is the guy who deserves the credit for getting the ball rolling
on the Alaska Plan that you were talking about. And I just want
to make sure that he gets the public recognition.
Senator Sullivan. Well, he's a good friend of mine, so I'm
glad that you're mentioning this in this hearing, and I'll pass
it on.
Chairman Wheeler. Great.
Senator Sullivan. Thank you.
The Chairman. Thank you, Senator Sullivan.
Senator Udall.
STATEMENT OF HON. TOM UDALL,
U.S. SENATOR FROM NEW MEXICO
Senator Udall. Thank you, Chairman Thune. And I know
Senator Gardner is not here, but I have the same issue in terms
of New Mexicans watching television in another state, and so I
hope we can work with him on that.
Chairman Wheeler. They don't want to watch the Broncos is
what you're saying.
Senator Udall. Yes, well, this week marks the 15th
anniversary of the tragic terrorist attacks of September 11, a
day that is seared, I think, into our Nation's history. We'll
never forget the heroic first responders who ran to the rescue.
Sadly, radio interoperability problems led to further loss of
life.
And this should remind us that our Nation's communications
networks do more than just let us call someone, watch TV, or
shop online. In emergency situations, our communication
networks save lives, and you all, as Commissioners, know that
very well. We should keep that broader perspective in mind as
we debate communications policy in this committee and at the
FCC.
Commissioner Clyburn, I really appreciate your visit to New
Mexico on the Navajo Nation last month. And thank you earlier
for reading a New Mexican's letter about broadband.
We had a tragic incident happen on the Navajo reservation
following the abduction and death of 11-year-old Ashlynne Mike
near Shiprock, New Mexico, on the Navajo Nation. The Navajo
Nation moved to put an Amber Alert system in place, but this
won't work in areas without wireless service. And this is just
one example of how the digital divide impacts those living on
tribal lands.
And so, Chairman Wheeler, I have other questions for the
record, but I now want to ask each of you a ``yes'' or ``no''
question. In my home state of New Mexico, 80 percent of those
living on tribal lands do not have access to broadband, four
out of five people without broadband access. I find that
appalling.
So I would like to ask a simple ``yes'' or ``no.'' Will you
support Chairman Wheeler's effort to take action this year to
address the digital divide on tribal lands?
Why don't we start with you, Commissioner Clyburn.
Commissioner Clyburn. Absolutely, Senator.
Senator Udall. Thank you.
Commissioner?
Commissioner O'Rielly. I don't know what his plan is, but
I'm in favor of solving the issue, yes.
Senator Udall. Good. Well, we want to work with you on
that.
Commissioner?
Commissioner Pai. Yes.
Commissioner Rosenworcel. Yes, Senator.
Senator Udall. And obviously--please say a few words here
about----
Chairman Wheeler. And let me hang my head here for a minute
because at a previous hearing I told you this would be taken
care of by football season.
Senator Udall. Yes.
Chairman Wheeler. We're in football season. We are going to
deal with this, sir. We will deal with it before the end of
football season. But as you've heard my colleagues' support for
doing this, dealing with rate-of-return carriers, and how do we
make sure there are sufficient rate-of-return opportunities on
tribal lands? Yes, sir.
Senator Udall. Thank you, Chairman Wheeler, for your
commitment to this.
Commissioner Rosenworcel, we met with students when you
were in New Mexico at Hatch, New Mexico, who do homework in the
parking lot or at a Pick-Quick store where there is free WiFi.
We need to close this homework gap facing students who come
from rural and low income families.
Jonah Madrid, a varsity football player at Hatch Valley
High School, had a bright idea. Jonah told us there should be
WiFi available on the school bus. That would help him do
homework when his team travels long distance for games. Schools
currently receive E-rate support for Internet access at school,
but not on their buses. Do you agree that WiFi on school buses
could help close the homework gap? And should this be eligible
for E-rate support?
Commissioner Rosenworcel. Yes. Well, first of all, thank
you for having me in Hatch, New Mexico. It was a treat. And I
still remember that football player, this high school student,
who told me in rural New Mexico he would take the bus an hour
and a half out to play games and an hour and a half back at
night, and then sit there in the pitch black darkness of the
school parking lot with his device because it was the only way
he could get his homework done. It seems to me that that's
trying too hard and we should be able to help him, and I think
we should use the E-rate program to help make sure that their
school buses are wireless buses and have WiFi on Wheels.
Senator Udall. Great. Thank you. I don't know if any other
Commissioners have a thought on that.
Chairman Wheeler. Far be it from me to question
Commissioner Rosenworcel on the homework gap.
[Laughter.]
Senator Udall. OK.
Commissioner Rosenworcel. I like that.
Commissioner O'Rielly. I could only suggest that it may
require a change in statute, and it may not be something that
we're allowed to do in the current provision, but that doesn't
mean--I'm not sure--and I'm also--quite frankly, this is the
first time--now, this may be the best solution, there may be
other opportunities to help this particular individual or
other--those that are in situations. So I'm not sure that's the
best solution, but I'm open to solving the problem.
Senator Udall. OK. And we'll share our authorities with you
that I think indicate that there is an ability to do this.
Thank you very much.
Thank you, Chairman Thune.
The Chairman. Thank you, Senator Udall.
Senator Blumenthal.
STATEMENT OF HON. RICHARD BLUMENTHAL,
U.S. SENATOR FROM CONNECTICUT
Senator Blumenthal. Thanks, Mr. Chairman.
Thank you all for being here and for your good work.
Let me make a couple of really simple points. I know your
world is a complicated one, the dockets, the agenda, but here
are some really simple points.
The U.S. Congress must confirm Commissioner Rosenworcel.
She has been a leader in identifying the homework gap, she has
been a tireless advocate for public safety officials, and she
has been a leading thinker at the FCC on creative ways to
update our spectrum policy for both licensed and licensed use.
She is a distinguished member of the FCC. And her confirmation
was part of an agreement that led to confirmation of
Commissioner O'Rielly.
I'm looking at you, sir. And I know you were not part of
this agreement.
[Laughter.]
Senator Blumenthal. So I'm looking at you because you are a
member of this Commission and you would not be there but for
this agreement. And I'm calling on the majority leader very
simply to keep his promise.
Number two, on the set-top box issue, Chairman Wheeler, I
want to really express my gratitude to you on behalf of the
consumers of Connecticut, who will stand to save millions of
dollars as a result of the rule that you are proposing. And,
again, to be very simple, I hope not overly simple, there's a
law that requires it.
I'm a law enforcement guy. The first and foremost duty of
anybody in public office is to enforce the law. If it's
unenforced, it undermines the credibility and trust of
everybody in that law. And the set-top box order that you have
issued very simply enforces a law that has been unenforced
since the 1990s, as we all know. It will save not only
Connecticut consumers but consumers around the country millions
of dollars.
There must be FCC oversight. Voluntary standards got us
into this mess. Only reliable and consistent enforcement law
will help preserve consumers' pocketbooks.
And I want to enter into the record editorials from some of
the newspapers that have expressed themselves on this issue,
most recently the New York Times, of ``Today,'' which very
emphatically came down on the side of consumers.
This issue is a classic ``inside-the-Beltway versus the
people of America'' issue. Inside the Beltway, there is this
hand-wringing and, ``My goodness, what are we doing?'' Outside
the Beltway, there is no question that consumers deserve to
save money through more choice and more competition. That's the
way markets work.
So I am leading to a question here, but I want to express
the strong view that this rule is needed and deserved by the
consumers of America. And I would like to just open it to you,
sir, to explain perhaps what the numbers are here in terms of
savings. These set-top boxes are dollar devourers; they simply
suck money out of consumers' pockets without any real need. And
what are the numbers in terms of potential savings?
Chairman Wheeler. Well, thank you very much, Senator. You
know, I was talking to Senator McCaskill earlier about the
study that she did on cable pricing and the consumer experience
of cable consumers, and how one of the major findings of that
was the surprise, ``Oh, my goodness, I've got this additional
charge. This isn't what they were telling me on the ads and
everything else. But there's this additional charge.''
You and Senator Markey did some great research that came up
that show there's about $230 a month per household. You do the
math on that, and it's about $1,600,000,000 every 30 days.
Senator Blumenthal. Without any benefit to consumers.
Chairman Wheeler. Without any choice. And, by the way, I
don't mean to quibble, but the benefit is you are going to pay
this or the money that you spend on your cable subscription is
down the tubes. So it is beyond that. Yes, you get a result
from your payment because you're being held hostage. And as
Commissioner Rosenworcel has said repeatedly, it's time to do
something about this.
We respect greatly the various corporations and trade
associations that have come to see us, and we try to work with
them, but the Congress gave us a mandate of a responsibility to
consumers, and our job must be to fulfill that mandate.
Senator Blumenthal. Thank you very much. My time has
expired.
Thank you, Mr. Chairman. And I offered--I guess I didn't
wait for the potential objection by entering those editorials
into the record, but if there's no objection, I'll have them
part of the record.
The Chairman. Without objection.
[The information referred to follows:]
Seattle Times--Originally published March 2, 2016 at 4:36 pm Updated
March 2, 2016 at 5:24pm
FCC right to think outside the cable set-top box
By Seattle Times editorial board
Seattle Times illustration
The FCC is finally breaking the stronghold that cable companies have on
the set-top box market. That's good, as long as it's not just a
giveaway to Google.
ENDING the cable-box racket that burdens millions of Americans is a
good proposal by the Federal Communications Commission.
There are several reasons to proceed cautiously, however. It's
troubling that the agency apparently cozied up with Google as it
developed the new rules.
The idea, floated by FCC Chairman Tom Wheeler, is that all sorts of
companies should be able to build and sell set-top boxes. People should
be able to buy their own boxes, instead of having to lease them from
cable providers.
This is appealing. Americans pay an average of $231 annually to
rent cable boxes, with costs increasing 185 percent since 1994,
according to the FCC.
FCC action is overdue. For the last 20 years, the agency has
struggled to comply with a congressional directive to open up the
market for set-top boxes. In recent years, it seemed to go the opposite
direction, authorizing cable companies to mandate that each customer's
TV use some form of set-top box to access channels.
In proposing to finally ``unlock the box,'' Wheeler cited the FCC's
2007 decision to let people buy their own cellphones instead of having
to use hardware provided by phone companies. A remarkable period of
innovation and choice ensued.
Expectations for a set-top-box revolution should be tempered. This
hardware should eventually be displaced by apps running directly on
Internet-connected ``smart'' TV sets. If that happens, consumers
wouldn't want or need additional devices or services just to watch
their shows.
As the technology and rules evolve, cable companies will find ways
to make up for lost hardware revenue, just as phone companies have done
since 2007.
Companies like Comcast may find ways to charge fees for devices
that receive their signal, whether it's a smart TV or set-top box
purchased elsewhere. ``Device billing'' is an area where the FCC is now
seeking public comment on how to proceed before it finalizes the rules
later this year. Device fees could make the medicine worse than the
disease.
Cable companies might also respond by stepping up efforts to meter
data--including digital video--which is delivered over their networks.
This could mean stricter caps on how much can be streamed monthly and
charging overage fees, like wireless companies.
Another lesson from the wireless industry is to be wary of Google.
Nine years ago, when the search giant entered the phone business
with its Android platform, the talking points were similarly about
giving consumers and device makers freedom and options.
Now Android has a dominant 83 percent share of the world smartphone
market and has generated $31 billion in sales for Google, according to
a recent lawsuit. The software is free, but Google profits immensely by
using the platform to sell ads and media, and pull users to other
Google properties.
This prompted a European Commission investigation into complaints
that Google gets an unfair advantage from services it bundles with
Android.
Google fares better with U.S. regulators. It lobbied the FCC to
open the set-top market to competing devices. Then it apparently
received early word of Wheeler's proposal--after his announcement, it
reportedly had a prototype box ready to demonstrate in Washington, D.C.
``It would be nice to pay less and have more choice when it comes to
cable boxes.''
This schmoozing raises questions about whom the new rules really
benefit. It also gives credence to cable companies' argument that the
proposal basically gives their content to Google.
It would be nice to pay less and have more choice when it comes to
cable boxes.
But the FCC needs to be sure that it's not trading one monopoly for
another, with an additional layer of ads on top.
Editorial board members are editorial page editor Kate Riley, Frank A.
Blethen, Ryan Blethen,Brier Dudley, Mark Higgins, jonathan Martin,
Thanh Tan,William K. Blethen (emeritus) and Robert C. Blethen
(emeritus).
______
The Boston Globe--February 10, 2016
FCC Should Unlock Savings for Cable Consumers
Andrew Harnik/AP/File 2015
Set-top cable and satellite television boxes look, and sometimes
act, like relics from an earlier technological age. Most of them are
clunky, finicky, and ugly. There's also something else anachronistic
about the equipment--the monthly rental fee that companies charge
customers for their use. Set-top box fees total about $231 a year per
household, according to the Federal Communications Commission. A report
released last July by Democratic senators Edward J. Markey of
Massachusetts and Richard Blumenthal of Connecticut said the rentals
generate more than $19.5 billion annually for the industry.rentals
generate than $19.5 billion annually for the industry.
Because nearly all customers sign up for service that bundles the
boxes into complicated pricing packages, few people realize what
they're being billed for--about 99 percent opt for box rentals. That's
given cable companies little incentive to make set-tops less expensive
and more useful. FCC Chairman Tom Wheeler, writing for the tech website
Re/code, said a recent analysis showed that the price of set-top boxes
has risen by 185 percent over the last two decades, while the cost of
TVs and computers has fallen by 90 percent.
Under a common-sense proposal put forth by Wheeler, the regressive
era of never-ending payments could give way to greater innovation, and
savings for consumers. The commission is scheduled to vote February 18
on a plan that would unlock some of the technology inside those heat-
generating TV boxes. It would allow outside vendors access to cable
companies' programming, but not their proprietary information, Wheeler
said, while ``maintaining strong security, copyright and consumer
protections.'' That would motivate more forward thinking tech companies
to make their own versions of the equipment, which customers could
buy--instead of lease--and then choose whichever cable or satellite
provider suits their needs. It is possible to do so now, but the
choices are limited.
Wheeler's model also would promote better integration of the two
primary ways people use their televisions--to watch traditional
stations and cable networks, and to stream Internet-based services such
as Netflix, Hulu, and YouTube. Now millions of viewers who want to do
both have to clutter their consoles with set-top boxes from cable
providers and separate equipment from Amazon, Apple, and Roku, or other
streaming companies.
The cable industry, along with some content creators and
programmers, last month formed an organization called the Future of TV
Coalition to oppose the FCC's proposed changes. The group says cable
companies already are introducing pay-TV apps that eliminate the need
for set-tops, ``a trend that will only accelerate,'' and doesn't
require government interference. Comcast, the country's biggest cable
company, has rolled out a souped-up cable box for its Xfinity customers
and also offers a service called Stream TV that doesn't require a box
for live viewing.
Alfred C. Liggins III, the Future of TV Coalition's cochair, called
Wheeler's plan ``a brazen money grab by Big Tech companies that would
do severe damage to the programming ecosystem, and in particular, niche
and minority-focused networks.'' By Big Tech, he probably means Google,
which is pushing its own fiber-optic system, and sells the popular
Chromecast Internet-streaming device. But the trade group's argument
smacks of desperation. Cable-box rentals are a throwback to the days
when people leased rotary phones from Ma Bell.
``Consumer choice should fuel the video-box market, not cable
company control'' said Markey, who coauthored the 1996
Telecommunications Act and is a longtime critic of the industry's
consumer-unfriendly practices. ``In the 21st century, consumers should
be able to choose their set-top box the same way they choose their
mobile phone.''
The FCC can't pull the plug on this practice fast enough.
______
Bloomberg View--Editorial Board--April 20, 2016 1:49 PM EDT
Cheaper Cable TV Starts With a Better Box
Like a lot of Americans, President Barack Obama thinks cable TV
costs too much. Unlike a lot of Americans, he is in a position to do
something about it--and even if he fails, it's still worth the effort.
Last Friday, Obama took the unusual step of announcing his support
for a proposal from the Federal Communications Commission intended to
make it easier for customers to purchase their own set-top cable boxes.
Whether the idea would actually save consumers money remains to be
seen, but it could help bring more competition, improved technology and
greater choice to viewers.
Currently, about 99 percent of cable-TV subscribers rent their set-
top boxes from their local providers. The average household pays more
than $200 a year, generating as much as $20 billion in revenue for the
companies (the cable industry disputes these numbers). The FCC's past
attempts to open up the cable-box market have failed--in large part
because cable providers did their best to make buying third-party boxes
a hassle. This time, though, the government has powerful new allies:
Google and other tech players with just as much muscle and money as the
cable giants.
What they're after isn't so much sales revenue as information. They
want all that data on subscriber habits and interests, which they could
then use to sell personalized ad space on video channel guides and the
like. The cable industry is trying to persuade viewers that this plan
is a threat to their privacy, but for all anyone knows, the cable
companies may already be doing the same thing is working on separate
guidelines to let cable subscribers block providers from collecting
personal data.)
The FCC wants not just more competition, but a world in which
consumers need only one box and a single remote control to explore all
the information coming through their cable wires. This seems unlikely.
More plausible is a future in which all these competing services, along
with new app-based technologies, combine to give viewers an (even more)
dizzying array of choices, from all-you-can-surf packages to more
narrow, interest-based collections of channels. Either way, the FCC
proposal is likely help bring more disruption more quickly, which is a
good thing.
Some technical but important details will need ironing out. The
proposal would create a commission devoted to standardizing data flows
for all devices, as well as protecting content creators' copyrights and
viewers' personal data. There will be time to work these things out.
The public comment period is about to end for the proposal, which will
almost certainly face a legal challenge from the cable industry. By the
time the plan is ready, in a year or two, both traditional set-top
makers and newer tech rivals will surely have refined the technology to
take better advantage of the unshackled market.
For the monopolistic cable industry--already squeezed by consumer
cord-cutting; Internet video-streaming services; and popular
programming from Netflix, Amazon and other upstarts--this will be
another blow to the bottom line. But these stodgy companies largely
have themselves to blame for their unpopularity and obsolescence. The
FCC's proposal is a small but smart step in an inevitable march toward
greater competition. Americans should be able to appreciate that on
whichever screens they choose.
______
Chicago Tribune--February 15, 2016, 12:08 PM
Editorial: Imagine your viewing options if the FCC unlocks the cable
box
By Editorial Board
The Federal Communications Commission will vote Thursday on a
proposal to give competing tech firms access to the set-top box
business. (Handout, TNS)
In an earlier tech era, consumers rented telephones from Ma Bell.
As for innovation, well, if you didn't want a black phone, you could
get one in white or avocado green. An echo of that outdated experience
exists today for cable TV watchers, nearly all of whom must rent the
cable box.
On Thursday, the Federal Communications Commission is expected to
vote on a proposal that would give competing tech firms access to the
set-top box business, a development that should bring down prices and
spur new, creative ways to watch television.
Even if this simply means getting rid of a few remotes or paying
less for an ugly, required contraption, we're all in. Households fork
over an estimated $231 in annual rental fees, the FCC says, putting
billions into the pockets of cable companies year after year. The
Consumer Federation of America believes cable subscribers overpay by $6
billion to $14 billion a year. Give us the option of buying a box, the
way we buy a cheap router for home Wi-Fi, and give us fewer remotes,
and we'll be happy enough.
But that should be just the beginning. It's reasonable to expect
that competition will mean much bigger changes to the TV experience,
because what the FCC would do is require cable companies to open the
design specifics of their platforms to outsiders.
Loosening the cable company's hold on the set-top box weakens the
barrier that separates cable from the rest of the digital entertainment
world. Imagine buying a device or service that simplifies and
integrates the experience of watching cable TV and Internet-based
streaming video programming. Imagine, too, the ability to channel surf
easily between ESPN, Hulu, Netflix and other offerings.
There are no guarantees how this ends up, but you can picture this
hastening the day when cable operators give in to unbundling-permitting
subscribers to cherry-pick their channels instead of being required to
buy packages that include programming they never watch.
You can presume cable operators don't want to upend the status quo.
Alfred Liggins, co-chair of a coalition opposed to the FCC move, said
in a statement that the proposal is ``a brazen money grab by the Big
Tech companies that would do severe damage to the programming
ecosystem.''
Those changes to the ecosystem were already under way. Consider, as
we wrote recently, the growing number of TV viewers who have cut the
cord on cable and watch a collection of subscription services like
Netflix on their smartphones and tablets. Change is happening-except
when it comes to renting the set-top box.
FCC Chairman Tom Wheeler, who's pushing hard for this deal, put it
well in an interview with Variety's ``PopPolitics'' on SiriusXM:
``The big kick I get is that AT&T and the cable companies have been
putting out statements that say, `This is going to thwart innovation.'
And I scratch my head and say, `My goodness, let's see. When was the
last time that competition thwarted innovation rather than spurring
innovation?' And you are telling me that a locked-down, closed system
will have more impetus to be innovative than a competitive, open
system? I think that history shows that it is exactly the opposite of
what happens in reality.''
Indeed, this brings us back to that avocado telephone. Until 1968,
AT&T controlled the entire phone system, requiring customers to lease
equipment and banning any third parties from connecting to its network
Then, through what's known as the Carterfone case, the FCC lifted the
ban on outsiders.
The result was nicer phones you could buy instead of rent, yes, but
it also hastened a technological revolution: answering machines, fax
machines, modems and eventually the Internet. A completely new world,
spurred by increased competition.
______
Los Angeles Times--September 9, 2016
It's time to kill the cable box
By The Times Editorial Board
The rear of a cable box is seen sitting atop a television in
Philadelphia in May 2007. Federal Communications Commission Chairman
Tom Wheeler has proposed a rule that could eliminate the need for cable
and satellite converter boxes. (Matt Rourke/AP)
Since taking office in 2013, Federal Communications Commission
Chairman Tom Wheeler has battled seemingly every company his agency
regulates as he has pushed for rules to protect the open Internet and
online privacy. Now, Wheeler is jousting with a set of players not
within the FCC's purview--the major Hollywood studios--as he tries to
fulfill a long-neglected congressional mandate.
The issue is the near monopoly that cable and satellite TV
operators have over the converter boxes that enable consumers to
unscramble and watch the channels for which they've paid. As part of a
1996 overhaul of communications law, Congress required the FCC to
assure that alternatives to these boxes would be available from
retailers. But resistance from cable operators, technical challenges
and the studios' legitimate concerns about piracy combined to thwart
would-be competitors from coming up with compelling, reliable and easy-
to-use converter-box alternatives. Major consumer-electronics companies
simply stopped trying after experimenting briefly with supposedly
``cable ready'' TVs and set-tops that couldn't support the full lineup
of pay-TV services. As a result, cable and satellite companies collect
an estimated $20 billion per year--more than $230 per household on
average--in fees for converter boxes that typically are bastions of
yesterday's technology.
Wheeler took a different tack in February, unveiling an ambitious
proposal to require pay-TV operators to make their programming
available in streams with standardized formats and security so that the
manufacturers of smart TVs, Blu-ray players, game consoles, tablet
computers and other devices could adapt their products to act as cable
or satellite TV converters too. He backed down, however, when the
studios, TV broadcasters and other programmers complained that this
approach could wipe out some of the restrictions they'd negotiated with
cable and satellite operators over how their content could be used.
These include limits on recording and commercial-skipping, as well as
requirements for where networks appear in channel lineups (for example,
requiring a news channel to appear in the same portion of the program
guide as other news channels).
That's the sort of control that Federal law gives copyright owners,
and the FCC can't argue with it. To their credit, pay-TV operators came
up with the concept for a more workable approach, which is now the
centerpiece of a new proposal that Wheeler outlined in The Times this
week: delivering their programming through an app that could run
securely on smart TVs and connected devices. This would be a huge win
for consumers because it would eliminate the need to have a costly
converter box connected to every TV in the home.
To preserve the restrictions that programmers negotiate with pay-TV
operators, consumers could watch pay-TV shows only through the app,
which would be controlled end-to-end by the cable or satellite operator
offering it. Wheeler's proposal also would require pay-TV operators to
make apps available for free on all the major software platforms used
by device manufacturers (think Apple's iOS, Google's Android and the
like), and require the apps to offer the same TV experience that
consumers have through a cable or satellite converter box. In other
words, anything you could do with a converter box--including recording
a show or skipping commercials--you'd have to be able to do through the
app.
The sticking point for the studios and some other programmers is
that Wheeler isn't willing simply to trust pay-TV operators to play
fair with their apps. His proposal would create a licensing body made
up of programmers and pay-TV representatives to certify that each pay-
TV company's app met the technical standards the licensing body had
developed. But this body would be overseen by the FCC to make sure it
didn't impose requirements that were anti-competitive or inappropriate.
For example, an app couldn't require device makers to exclude other
legitimate sources of programming, such as Netflix or Amazon Prime. The
apps also would have to make pay-TV content searchable alongside other
types of programming, although the licensing body could require device
makers to filter out pirated material.
The studios are understandably nervous about this idea of
``integrated search,'' fearing that someone searching for ``Game of
Thrones'' will be directed not just to HBO and the iTunes store, but
also to some Russian website offering free, bootlegged copies of entire
seasons. So requiring search results to be filtered makes sense, as
long as the filtering isn't so ham-handed that it screens out
legitimate online programming sources.
Yet the studios' concerns don't stop at piracy. On Thursday, the
Motion Picture Assn. of America complained that Wheeler's new proposal
amounted to a ``compulsory license'' to the studios' works because it
``encroach[ed] on copyright holders' discretion in how they exercise or
license'' their rights. In the studios' view, that discretion is
unlimited; if, for example, a studio doesn't want Charter to let
customers display its shows on Apple devices, or if it wants to block
its programming from homes in certain ZIP codes, it can try to make
such prohibitions a condition for carrying its programming on Charter's
cable systems. Any limits the FCC might place on the app licenses could
interfere with this discretion.
The MPAA is absolutely right that the FCC can't change copyright
law. But Congress did give the agency authority over pay-TV operators
and a mandate to make alternatives widely available to the operators'
converter boxes. So the agency seems well within its authority to set
rules on cable and satellite services that respect the licenses they
negotiate while still barring them from using apps to skew the
competition among device-makers and programming services--or preventing
consumers from doing things with an app that they could do with a
converter box.
Pay-TV operators wouldn't be required to make apps available under
Wheeler's proposal for at least two years, giving programmers time to
negotiate terms with cable and satellite operators for the post-
converter-box era. If they don't want to be part of it, they don't have
to license their shows for pay TV. But they can't use their copyrights
as a tool to force pay-TV operators to discriminate or othenvise
undermine Congress' demand that pay-TV operators give up their
converter-box stranglehold.
Wheeler's plan shows how the FCC can live up to that congressional
mandate while still protecting copyrights and saving U.S. consumers
billions of dollars, and the commission should move forward with it.
______
The New York Times--The Opinion Pages Editorial--Sept. 15, 2016
Free TV Viewers From Cable Box Fees
By The Editorial Board
That little black cable box beside your television is your gateway
to dozens of great shows. It's also a drain, sucking money out of your
home. Every month, millions of Americans are forced to pay high fees to
rent cable boxes. The only way this can change is if the Federal
Communications Commission votes to require cable companies to make
programming accessible through other devices, ones you could own
outright. A vote is set for Sept. 29.
On top of the fees they pay for the programming itself, people
spend an average of $231 a year to rent cable boxes, or about $20
billion annually, according to an analysis by two senators. Those
rental fees have gone up 185 percent since 1994, according to the
Consumer Federation of America, in large part because cable companies
know that people have limited choices. By contrast, when it comes to
cellphones, consumers can choose their wireless carrier and hardware
separately.
Ending cable's monopolistic control over set-top devices would
result in more choice at less cost. The F.C.C. chairman, Tom Wheeler,
has proposed requiring most cable and satellite companies to deliver TV
programming through applications that run on devices made by the likes
of Apple, Amazon, Google and Roku. People could download the apps free;
they would still pay for programming.
Large cable and satellite companies would have two years to develop
the apps and smaller cable companies would get four years. Some large
cable companies, like Comcast and Time Warner Cable, already have apps
for some of the competing devices. Cable companies that serve fewer
than 400,000 users would be exempt. People who prefer renting cable
boxes could continue doing so.
Mr. Wheeler has tried to make his proposal more palatable to the
cable companies by giving them control over how the apps work. But they
oppose having the commission approve any licensing agreements they
negotiate with device makers, because that would allow regulators to
tinker with those contracts. But without F.C.C. approval of the
agreements, cable companies are likely to set onerous conditions on
device makers or cut exclusive deals with certain makers that would
limit consumers' choices.
Instead of freeing consumers from the set-top box squeeze, some
Republican and Democratic members of Congress are supporting the cable
industry, a generous campaign contributor. The lawmakers are trying to
pressure one commissioner in particular, Jessica Rosenworcel, who was
nominated by President Obama for a second term last year but has not
been confirmed by the Republican-controlled Senate.
Phones, computers and virtually all other electronic devices become
more useful and cost less over time. Why should the box that brings TV
shows and movies into homes be any different?
The Chairman. Thank you, Senator Blumenthal.
Senator Peters.
STATEMENT OF HON. GARY PETERS,
U.S. SENATOR FROM MICHIGAN
Senator Peters. Thank you, Mr. Chairman.
I want to also thank all the Commissioners for appearing
before us here today, and appreciate certainly your tireless
work on some very, very complicated issues. And working to
deploy and develop all the cutting edge 21st century technology
is certainly a full-time job, and I think you put in more than
a full-time job based on the hours that you do.
I have some questions actually for Chairman Wheeler, but
basically it relates to a letter that Chairman Thune, Ranking
Member Nelson, Senators Booker, Rubio, and McCaskill, and I
sent to the FCC, Department of Transportation, NTIA, endorsing
a plan for the joint testing of two proposals for spectrum-
sharing in the 5.9 gigahertz band.
In June, the FCC announced it was refreshing the record for
5.9 gigahertz. In July, the public comment period closed, and
now it's my understanding that the Commission has received
prototype devices and is prepared to begin both field and bench
testing.
So, Chairman Wheeler, just some brief questions here as we
wrap up here. I understand that the FCC will release its test
plan prior to beginning Phase I of interference testing. When
will the test plan be released to the public? What is your
estimation?
Chairman Wheeler. So thank you very much, Senator. As you
know, there's a three-step process here that you all outlined,
and we said, yes, that's a great approach.
We have just received the equipment from five
manufacturers. So we are beginning immediately to assess that
equipment, its characteristics, its power levels, its
interference, all of these kinds of things that we're
responsible for, on a bench test. But we want to get through
that quickly and get off onto the DOT and their facilities to
be able to test it in that environment, and then to move on and
test it in a real-life environment.
So this is something that we're moving with dispatch on.
Actually, the equipment came a little later than hoped for, but
it's here now.
Senator Peters. So when do you plan to complete all phases
of the interference testing? Do you think you'll reach your
target of January 2017?
Chairman Wheeler. That's--I can't--I will get an answer for
you on that from our lab folks, but I'm hopeful that we're--
this is--let's push this forward.
Senator Peters. Right. So you're hopeful for January----
Chairman Wheeler. But I will get you--that's not a
commitment. I will get you a real date once the people who know
what they're talking about tell me what I think.
Senator Peters. Well, that's good. That's reasonable.
Chairman Wheeler. OK.
Senator Peters. I appreciate that. But when I talk about
commitments, will you commit, though, to making public all the
data that is collected by the FCC during the bench and the
field testing phases?
Chairman Wheeler. We will commit to the spirit of what
you're saying. If there is private data that is company-
specific, asked for confidentiality, we will have to respect
that.
Senator Peters. Next, what is your target date for making a
final determination on spectrum-sharing in the 5.9 gigahertz
band on licensed devices?
Chairman Wheeler. I think we have to wait and see what
happens here.
Senator Peters. So you don't have any kind of----
Chairman Wheeler. I haven't got a target for you, sir.
Senator Peters. It's a work in progress.
Chairman Wheeler. Yes, sir.
Senator Peters. OK. And most importantly, Mr. Chairman, I
can't overstate how critical it is that when you're evaluating
these proposals that it is based on facts, based on science,
and not opinions. Subjective judgments about what will or will
not work is just simply not going to substitute for hard
engineering data, which, because of the importance of the
spectrum from a safety perspective and some of the incredible
things that are going to be happening in the years ahead, you
know, we have to have both rigorous and open review.
So that's why I would hope that the Commission's final
determination on spectrum-sharing will be based on that data
and will undergo that review and there will be plenty of
transparency throughout the process, as much as possible, given
some of the constraints that you mentioned, but certainly have
your commitment and the other Commissioners that this will be
an open process. It is a very important one and one that has
tremendous benefits, and we want to make sure that it's being
done properly.
Chairman Wheeler. Yes, sir.
Senator Peters. Thank you.
Chairman Wheeler. Senator, can I just add one more thing
here on this, just things you and I have talked about
previously? I just want you to know that I learned that in the
next couple of weeks at the Ohio State University, they will
start driving automated cars, autonomous cars, around campus as
a part of exactly what you and I are just talking about right
now. But I just wanted to make sure that your information is
complete in that regard, sir. And it will be operational the
last Saturday in November as well.
[Laughter.]
Senator Peters. Well, I appreciate that. And at another
time I will talk about all the wonderful work done at the
University of Michigan.
[Laughter.]
The Chairman. Thank you, Senator Peters.
And next up is the Chairman of the Homeland Security
Committee and a fellow Packer fan, Senator Johnson.
STATEMENT OF HON. RON JOHNSON,
U.S. SENATOR FROM WISCONSIN
Senator Johnson. Thank you, Mr. Chairman. Actually, that's
what I would like to talk about. You know, last weekend opened
up the regular season, and we had again the very unfortunate
circumstance, many constituents in Wisconsin were forced to
watch the Vikings beat the Tennessee Titans 25-16 instead of
having the joy of watching the Green Bay Packers beat the
Jacksonville Jaguars at 27-23.
I worked with a fellow Packer fan, one of his more
endearing qualities, quite honestly, among many, among many
fine attributes, a fellow Packer fan. And so we had inserted
into the STELAR reauthorization the ability to allow
broadcasters to petition----
Chairman Wheeler. Right.
Senator Johnson.--the ability of the FCC to carry those
signals on a satellite, and wrote to you in December 2015
asking you to act expeditiously on those petitions. I asked you
in a hearing back in March 2016 to also do so.
So I'm glad to announce that we have our first petition
filed in Wisconsin by Gray Television up in Wausau asking for
permission to have their signal carried up in I guess it's Iron
and--well, Ashland and Iron County.
So I'm just asking you, you've got that petition, will you
quickly put that out to comments? We have that 20-day comment
period.
Chairman Wheeler. Yes, sir.
Senator Johnson. Beauty. So----
Chairman Wheeler. And there are components here, as you
know. I mean, so there's one, this is great, we've got the
local petition. Two, then we all have to sit down and work with
the satellite provider for the technical capacity and ability
to do that.
Senator Johnson. OK. And I believe the satellite provider
has agreed to do it. They're in favor of this. So----
Chairman Wheeler. And I said to Senator Gardner when he
raised a similar issue about bringing the various parties
together, we will be happy to come to that table as well if we
can be helpful.
Senator Johnson. OK. So can you give me a date? Because,
trust me, Packer fans are anxiously awaiting the ability to see
the Green Bay Packers on their satellite signal.
Chairman Wheeler. A date for when we'll put it out?
Senator Johnson. Yes, so when you put it out to comments so
we can start the clock ticking to celebration.
Chairman Wheeler. I don't know of any reason why we can't
put it out, I mean, instantaneously----
Senator Johnson. There you go, tomorrow.
Chairman Wheeler. They'll kill me at the Media Bureau. As
fast as humanly possible.
Senator Johnson. OK. Well, we'll keep asking that question.
Chairman Wheeler. Good.
Senator Johnson. OK. Commissioner Pai, as long as I've got
some time, are you aware of any cost-benefit analysis conducted
by the FCC in either its set-top box proceeding or privacy
proceeding currently before the Commission?
Commissioner Pai. Senator, I am not.
Senator Johnson. Should there be?
Commissioner Pai. I do think that any regulation that is
considered by the Commission should include cost-benefit
analysis. Otherwise, it seems to betray the public interest to
suggest that a regulation that would ultimately be bad for
consumers nonetheless would be passed.
Senator Johnson. So, Commissioner Wheeler, is there any
plan to do a cost-benefit analysis?
Chairman Wheeler. Well, thank you, Senator. I think that
the whole notice and comment process itself is one huge cost-
benefit analysis because we are constantly having folks come in
and talk to us about, ``Here's what the cost is,'' or somebody
else coming and saying, ``Here's what the benefits are.''
And so, you know, this is--I liken the notice and comment
processes as kind of the administrative law equivalent of the
scientific method, somebody proposes something, somebody rebuts
it, they change it, it goes here, and this is what the whole
process goes through. So I think that there is a fulsome cost-
benefit that gets done----
Senator Johnson. That's kind of haphazard as opposed to a
very formalized cost-benefit----
Chairman Wheeler. Well, the----
Senator Johnson. I'm an accountant, so I kind of like to
actually see the figures. So would a more formalized cost-
benefit analysis be helpful?
Chairman Wheeler. The--how can you collect as much
information as possible? And then the challenge, of course, in
a cost-benefit judgment comes back to that old Harry Truman
quote, you know, where he said, ``I want a one-handed economist
because they're always saying on one hand, on the other, and it
becomes less math and more judgment.''
And so as we are going through this entire long-running
administrative process, I think there percolates up to all the
members of the Commission just what the costs and benefits are
as put forward by various parties. I mean, you know, the cable
folks on the set-top box that you raise, I mean, they went out
and hired, you know, a former chief economist of the FCC to
come in and give a quantification of their numbers. Others have
quantified it other ways.
Senator Johnson. OK. Again, I would like to see a formal
process.
Real quick, Commissioner O'Rielly, you recently said that
carriers are withholding certain free data plans, quote,
because they're afraid of what the Commission might--may do.
Can you talk a little bit more about that briefly?
Commissioner O'Rielly. Yes. So we are--the Commission is in
the process of examining what is known as zero-rating plans.
That process has been going on, my understanding, for 10
months. I've been trying to get better information from the
bureaus on when this process would conclude. What's the
likelihood of concluding? What is actual conclusion? Are
carriers going to get a gold star? Are they going to be told
there's a violation and go immediately to enforcement action?
What is the likelihood of that?
We check in every--periodically. We got our last answer
yesterday, surprisingly, and the answer came back, which was,
We continue to work through the issues and not yet in position
to articulate how each policy review will conclude. We do not
at this time have a time-frame to provide.
So it is an ongoing process. We have no idea when it will
conclude. And in the meantime, carriers are left wondering
whether the particular service that they would like to offer to
consumers is permitted, or are they subject to immediately
going to enforcement action? I think that's a problem.
Senator Johnson. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Johnson.
Senator Markey, further questions.
Senator Markey. No further question except to thank you
and--thank you and the Ranking Member for this great hearing. I
very much appreciate it. I thought it was excellent, and I just
wanted to compliment you on that.
And I would just say to the FCC, I would urge you at the
next open meeting to take up privacy and take up the BDS
rulemaking so that we could begin to make progress on that. I
just urge you to try to put that on the agenda.
But thank you, Mr. Chairman, for a great hearing.
The Chairman. Thank you, Senator Markey.
Senator Nelson, anything else? I have two questions I want
to ask, but----
Senator Nelson. I want to enter into the record a letter
that I had written to the FCC back in February on set-top
boxes.
The Chairman. OK. Without objection.
[The information referred to follows:]
United States Senate
Committee on Commerce, Science, and Transportation
Washington, DC, February 12, 2016
Hon. Tom Wheeler,
Chairman,
Federal Communications Commission,
Washington, DC.
Dear Chairman Wheeler:
I write today regarding your plan for the Federal Communications
Commission (FCC) to begin a rulemaking regarding competition in the
cable set-top box marketplace. Section 629 of the Communications Act of
1934 directs the FCC to ``assure the commercial availability'' of
navigation devices used to access cable and satellite pay TV services.
I continue to support this mandate and its recognition that consumers
should have options for how they access and watch pay TV services,
while allowing innovators the freedom to do what they do best. And like
so many others, I long for the day when the clunky set-top box fades
away.
Indeed, even without FCC action, this day may be closer than we
think. How consumers access and watch video programming has changed
dramatically in recent years. From smart TVs to Internet-based video
platforms to Apple TV, Roku, Amazon Fire TV, and Google Chromecast,
advances abound in the competitive video navigation device market. TV
viewers have downloaded hundreds of millions of video navigation
applications on their phones, tablets, TVs, and set-top box
alternatives, dwarfing the number of cable set-top boxes in use.
Section 629 should always be implemented with an eye towards what is
actually happening in the marketplace, and your rulemaking should
conduct a fair and balanced inquiry about the many possible approaches
to accomplish the goals in Section 629. The FCC should not proceed down
a path to rules that fails to fully account for today's pay TV viewing
landscape.
While I support the objective of enabling competition and
innovation in the market for set-top boxes, any new FCC rules in this
area must not harm the production and distribution of video content.
The FCC's rules should not allow third-parties to do more with
programming content than has been done through negotiated arrangements
between content owners and their partners. Nor should any new FCC rules
be the means by which third parties gain, for their own commercial
advantage, the ability to alter, add to, or interfere with the
programming provided by content providers. Otherwise, both the viewing
experience and the economic underpinnings that support investment in
innovative content stand to be diminished. Section 629 does not seem to
contemplate such an outcome.
Given these concerns, the FCC must take a measured approach with
respect to any rulemaking related to its Section 629 obligations. Your
inquiry should be impartial and evenhanded, so that the FCC can develop
a fulsome record on how best to ensure the availability of competitive
TV navigation devices. The FCC also should avoid taking any action that
could ultimately threaten the vibrant market for quality video
programming.
Sincerely,
Bill Nelson,
Ranking Member.
CC: The Honorable John Thune, Chairman
Senator Nelson. And also just to make a comment, we had
earlier here a conversation about packing the D.C. Circuit
Court, and Senator Wicker expressed his opinion that he sees it
one way. And I just want to make the distinction that for a
Senator to express an opinion about court packing vis-a-vis a
particular issue is certainly appropriate because the Senate in
fact votes on the confirmation of these judges. But for members
of an independent agency, which is a quasi-judicial body, is a
separate issue. I want that distinction made clear.
The Chairman. Thank you, Senator Nelson.
Very quickly, I want to ask a couple of questions. And this
was something that Senator Klobuchar touched on, and so I
wanted to further build on some of the questions that she asked
about, recent USF high-cost reforms.
But in its March Universal Service Fund Order, the
Commission adopted several changes to the distribution of U.S.
funds to small telecom companies that serve rural America.
These USF funds are vital for the delivery of broadband
services in states like South Dakota.
It's my understanding, however, that there has been very
little information that has been released since March regarding
how these reforms are going to be implemented. And I will tell
you that rural telcos in South Dakota, and I suspect in most of
the states that Members of this committee represent, are very
concerned that unless more specific information is made
available soon, their investment plans for 2017 will be
seriously impacted, and I find that and I think most Members of
this committee would find that to be unacceptable.
So the question has to do--and I would like every
Commissioner to answer the question as to whether you will
commit to do everything that you can to ensure that rural
carriers receive in a timely fashion all the information they
need to make critical investment plans for 2017 and beyond.
Commissioner Clyburn.
Commissioner Clyburn. Yes. I think we have--rarely do we
move as quickly as persons or entities want us to, but we have
been very deliberative. We have--for a number of years now, I
can speak for 7 years firsthand, really are laser-beamed on
providing service to areas where there is none and to provide
efficiency for those dollars that are limited.
The Chairman. OK.
Commissioner O'Rielly. So, yes, my staff has been working
with the Bureau to provide information and to expedite the
answers that the carriers think that they may need. So we have
been doing that work, given my work on the rate-of-return item.
The Chairman. OK.
Commissioner Pai. Yes, Mr. Chairman. It's not just a
question of providing information; however, there are also a
number of petitions that are pending with the Commission, and
we need to address those with dispatch in order for the
carriers to know whether or not it's appropriate for them to
opt into the model. So those pending petitions are also
important.
The Chairman. OK.
Commissioner Rosenworcel?
Commissioner Rosenworcel. The answer is yes, Senator.
The Chairman. OK. Thanks.
Mr. Chairman?
Chairman Wheeler. Yes, sir.
The Chairman. OK. Thank you.
And one final point, and I don't want to belabor this point
because we've covered it at length, but, Chairman Wheeler, I
just wanted to respond. My question about 3-2 party-line votes
are on open meetings votes. And you brought up the Effective
Competition Order, which was not a 3-2 vote; with you siding
with Republicans, it was at least in part unanimous, but it was
not an open meeting vote.
And the votes that I refer to, and it's almost a third of
the opening meeting votes, which is typically where the most
important matters are voted on, those have been 3-2 party-line
votes, which, again, is unheard of, at least relative to modern
history.
I just want to ask one last question, and it has to do with
that particular pattern but with respect to a different issue.
And so I will direct this to Commissioner Pai. But we've heard
today that the party-line FCC votes have become routine over
the past few years, I've mentioned that.
You mentioned in your dissent of the recent Quadrennial
Media Ownership Review that a bipartisan majority of
Commissioners was willing to repeal the newspaper broadcast
cross-ownership rule. You went on to say, however, that
Commissioners were told that this rule would not be repealed
unless all Commissioners agreed and one in the end chose to
exercise that veto, unquote.
So I'm just going to ask, could you elaborate on that
particular vote and approach as opposed to on so many issues
Chairman Wheeler, who has embraced a partisan outcome, in this
circumstance, to demand unanimity?
Commissioner Pai. Thank you for the question, Mr. Chairman.
It was a rather odd situation since we seem to have an
overwhelming bipartisan majority that agreed that the rule in
question in the newspaper broadcast cross-ownership
restriction, which was originally adopted in 1975, had long
since outlived its usefulness, and the Third Circuit had
instructed us to take a serious look at it.
The Chairman's office told my staff, ``Look, we support
getting rid of this restriction, we believe that most members
of the Commission do, but if any member of the Commission
objects, then we are not going to support getting rid of the
rule.''
And, unfortunately, as I pointed out in my dissent, one
office exercised that option and objected. And what I thought
was unfortunate was not just that it ended up becoming bad
policy, I mean, I think this restriction should be removed, and
most people would agree with that, at least behind closed doors
at the FCC, but also just the process is very strange, to
require unanimity on an issue when, as you pointed out in your
chart, there are a number of high-profile issues where
Commissioner O'Rielly and I, in particular, have suggested
changes or made objections, and those suggestions or objections
are either ignored or dismissed out of hand.
And so my preference would be to move forward in a
bipartisan manner. Let's move the broadcast ownership
regulations into the 21st century together as opposed to these
random requirements of unanimity.
The Chairman. Mr. Chairman.
Chairman Wheeler. Rather than relying on hearsay, I think
what's important to recognize here is that for 8 years there
had been a failure at the Commission to comply with the statute
that required these quadrennial reviews. The reason that that
situation existed was because it had not been possible to get
three Commissioners to represent a majority on this issue for 8
years. Working together, we got a majority on this issue.
It was not possible to keep a majority and make the kind of
change that Commissioner Pai talked about. We have been
criticized for not having a majority. We worked. We got the
majority for the first time in 8 years.
And the exercise then became, OK, how do we follow through
on our statutory mandate that everybody from Congress to the
Third Circuit criticized us on because we didn't have the
majority?
The Chairman. Well, it seems like it is, this is an issue
where you could have done a separate rulemaking where you had
bipartisan support. But I guess my observation in this
circumstance is that it is contrasted quite sharply from the
pattern that I pointed out earlier where we had 3-2 votes on a
whole range of consequential issues, and then on this one, a
requirement for unanimity. That strikes me as somewhat odd.
But overall I want to say thank you to all the
Commissioners for being here today. And I know these are--you
deal with contentious issues, I don't deny that, and deeply
held differences of opinion about how to proceed. We deal with
that on this committee on a regular basis, too.
We try as best we can, Senator Nelson and I and Members on
both sides, to try and find that consensus, and we don't always
succeed, but we work very hard to make that happen, and I would
hope that at the Commission we could see a similar approach and
attempt because the stuff that you're dealing with, as I said
earlier, is incredibly important to our country.
And the Commission's role is incredibly important to our
country and to our economy, and the relationship with Congress
I think is incredibly important. We have an oversight role that
we take very seriously.
So we appreciate your remarks today, your answers to our
questions. I would just point out for anybody who wants to ask
additional questions for the record, if you would, we'll get
those to you, and if you could submit your answers within 2
weeks, it will be most appreciated. And with that, this hearing
is adjourned.
[Whereupon, at 12:55 p.m., the hearing was adjourned.]
A P P E N D I X
Response to Written Questions Submitted by Hon. John Thune to
Hon. Tom Wheeler
Question 1. On October 6, 2016, you circulated for the Commission's
consideration a draft rule and order in the broadband privacy
proceeding.
A. Have the commissioners or staff at the Federal Trade Commission
(FTC) had an opportunity to read the text of the new draft rule?
B. If not, will the text of the new draft rule be shared with the
FTC before the Commission votes on the new proposal, and will the FTC
have sufficient time to meaningfully provide input on the new draft
rule before the Commission votes?
C. If the Commission does not intend to share the text of the new
draft rule with the FTC, please explain why.
Answer. The Commission's rulemaking process, which has been
followed over the years by both Democratic and Republican Chairs, is
designed to give stakeholders and members of the public ample
opportunity to engage in a transparent and vigorous discussion. The
process is also designed to give Commissioners a three-week period to
discuss in confidence the substance of an item before final decisions
are released. This process is commonplace for administrative agencies
and allows the FCC to adhere to the Administrative Procedure Act, which
requires us to consider and address all comments received on our
proposals.
In following this standard process with all stakeholders alike, the
Commission has not published the text of the new draft Broadband
Privacy Order, nor have we shared it with the Federal Trade Commission
(FTC). The FTC has, however, had significant opportunity to publicly
provide constructive input on the broadband privacy proceeding and has
indeed done so. Staff of the FTC's Bureau of Consumer Protection filed
comments with the Commission on May 27, 2016. FTC Commissioner
Ohlhausen filed separate comments on the same date. Further, we
extended the reply comment deadline for the privacy proceeding,
providing the public, including the FTC, with additional time to submit
reply comments. Since the reply period closed, we have continued to
engage stakeholders and other interested entities. Upon circulating the
item to my fellow Commissioners, we published a fact sheet and a blog
post describing the new draft Order to allow the public to understand
and engage with us on the broadband privacy issues before the
Commission. Following this release, FTC Chairwoman Edith Ramirez issued
a supportive statement, saying, ``I am pleased to see the FCC moving
forward to protect the privacy of millions of broadband users across
the country. The FTC . . . provided formal comment to the FCC on the
proposed rulemaking, and I believe that our input has helped strengthen
this important initiative.'' The FTC, and other stakeholders, may
continue to meaningfully provide the Commission with input on the
publicly available information.
I can assure you that, as I stated last month at the Senate
Commerce Committee's FCC Oversight Hearing, the FCC has had an ongoing
dialogue with the FTC throughout the broadband privacy proceeding and
has taken their comments seriously. Even though the FTC does not share
jurisdiction with the FCC in this area, we are embracing many of their
comments in our new draft Order. And as you may recall, at the Senate
Commerce Committee's FTC Oversight Hearing last month, FTC Chairwoman
Ramirez confirmed that the FTC engages in regular conversations with
the FCC, both at the staff level and more senior levels, to discuss the
approach that the FTC takes when it comes to privacy. Chairwoman
Ramirez further stated, ``I do . . . as you [Chairman Thune] already
noted, do know that they [the FCC] take our comments very seriously.''
Question 2. Recently, the FCC Inspector General (IG) completed his
investigation into whether you authorized the disclosure of information
about ongoing commissioner deliberations in advance of the March 31,
2016, open meeting. The IG found that you did indeed authorize the
disclosure.
A. Do you agree with the IG's finding that you did indeed authorize
a disclosure to Politico in advance of the March 31, 2016, open
meeting?
Answer. I do not have a clear recollection of authorizing this
specific disclosure of nonpublic information, but I do not dispute the
testimony of my staff that I did so. As I explained to you in my May 2,
2016 response, my office sometimes decides to disclose nonpublic
information when we think it will promote the discussion and
understanding of important policy issues. As the IG report explains, on
the morning of March 31, 2016, there was intense media interest in the
timing and the content of the proposed Lifeline Order. The Director of
the FCC's Office of Media Relations recommended that the Commission
release high-level details about the Lifeline item to better inform the
public of the item's status. I do not doubt that I accepted her
recommendation, as I have done on other occasions when there is high
public demand for information about the Commission's activities. As the
IG Report explains, it has been the long-standing position of the FCC
that section 19.735-203 gives the Chairman the authority ``to change
the character of information from previously non-public information to
information that would be available for public disclosure.''
B. Why did you previously refuse or decline to acknowledge that you
had authorized the public disclosure of this information to Politico?
Answer. Your April 15, 2016 letter included allegations of improper
conduct by Commission employees, including myself. In this situation, I
was clearly disqualified from investigating your allegations, and
pursuant to section 19.735-107(b) of the Commission's rules, I
requested that the IG investigate them instead. In your April 15
letter, you also cited section 19.735-107(b) as authority for the
opening of an IG investigation. I publicly promised to cooperate with
the IG, and, as a potential subject of the investigation, I avoided
taking any actions that might have had the appearance of interfering
with or influencing the outcome of the investigation. I was not the
only person who deferred to the IG's fact-finding process. At the
hearing before the House Energy and Commerce Committee on July 12,
2016, for example, Chairman Walden announced that he would not ask
questions about the disputed events of March 31 due to the pending IG
investigation.
C. Rather than acknowledging your disclosure (or approval of the
disclosure), why did you instead seek to discuss the disclosure of a
fellow commissioner in your response to my April 15, 2016, letter?
Answer. In response to your question about my knowledge of whether
I or other FCC employees disclosed nonpublic information, I simply
pointed to already public reports that a commissioner's office had
provided details about the Lifeline negotiations to outside parties.
The IG's investigation identified a number of other instances in which
commissioners' offices were communicating with media representatives
prior to the Commission's open meeting on March 31.
D. The IG report states that you ``planned to follow Commissioner
Clyburn's lead on the compromise Lifeline Order'' regarding how you
would vote. Is this true?
Answer. The authors of this report make this statement based on
information they learned in an interview with the FCC's Chief of Staff,
Ruth Milkman, and on a contemporaneous e-mail she sent to other members
of my staff. While I do not have a clear recollection of making this
statement, it is consistent with the general approach since I have been
Chairman of the Commission. Commissioner Clyburn is a skilled and
passionate advocate for the Lifeline program and I look to her for
policy leadership on Lifeline issues.
Question 3. Chairman Wheeler, in 2014, you said ``there is a new
regulatory paradigm'' for cybersecurity characterized by reliance on
private sector leadership and the market first, ``while preserving
other options if that approach is unsuccessful.'' You also noted that
``[t]he pace of innovation on the Internet is much, much faster than
the pace of a notice and comment rulemaking.''
Similarly, the Administration has stressed the importance of
public-private partnerships to enhance security, believing that static
mandates cannot keep pace with growing and evolving cybersecurity
threats and technological developments. Indeed, this approach, which
the FCC's Communications Security, Reliability and Interoperability
Council (CSRIC) has adopted, is helpful in tailoring guidance to small
and mid-sized companies.
Despite the foregoing, this year the Commission has adopted
security measures and reporting requirements in a series of orders and
notices of proposed rulemaking on consumer privacy, communications
network outage reporting, technology transitions, emergency alert
systems, and 5G wireless licensing. Addressing cybersecurity in this
manner through prescriptive rulemaking appears contrary to the
Commission's professed desire to pursue the cooperative approach of an
industry-led, public-private partnership.
A. Given the recent work of CSRIC IV, what is the reason for this
apparent shift from industry-led, public private partnership to
prescriptive rulemakings?
B. Has the Commission determined that a voluntary, market-based
approach was unsuccessful?
Answer. The Commission continues to pursue the industry-led
paradigm embraced within CSRIC IV. Rather than prescribing how service
providers protect their systems, this paradigm lets service providers
determine the security measures that are most appropriate and effective
for their systems. We believe that providers are in the best position
to assess their own risk and develop effective security measures to
address that risk.
The Commission's work continues to focus on clear lines of
accountability to address residual risk. We expect service providers to
be proactive in securing their systems. This approach is consistent
with the Commission's longstanding security policies that have relied
on voluntary best practices, leveraging CSRIC recommendations and,
coupled with outage reporting rules, that do not require that providers
engineer or operate their networks in a particular manner.
Under this approach, the Commission must understand where providers
have accepted cybersecurity risk. The reporting mechanisms recently
adopted by the Commission accomplish this through a mechanism that is
similar to how the Commission has tracked network outages for over a
decade. This approach allows the Commission to identify reliability
trends and work with industry to flag concerns without having to resort
to prescriptive rules.
Question 4. It has been fifteen months since the FCC received
comments on the ``Cybersecurity Risk Management and Best Practices''
report submitted by CSRIC IV. The report was unanimously adopted by
CSRIC and includes segment-specific analysis to apply the Cybersecurity
Framework, as well as recommendations in response to the Commission's
charge.
A. What is the status of this proceeding and when will the
Commission take action?
Answer. I circulated an item to my fellow Commissioners earlier
this year that would implement CSRIC IV's recommendations. The item
remains under consideration.
B. What action has the Commission taken under CSRIC or other
contexts to examine vulnerabilities with regards to key communication
protocols like Signaling System 7 and Diameter?
Answer. As communications technologies transition from legacy
systems and networks to new all IP-networks, legacy technology is
potentially vulnerable to new risks. SS7 is one such legacy protocol
that is both nearing its end of life but still an essential part of the
communications ecosystem. For this reason, earlier this year, the
Commission tasked CSRIC to examine vulnerabilities associated with the
SS7 protocol and other key legacy communications protocols. CSRIC
established a working group to assess vulnerabilities and current
defensive mechanisms related to these legacy communications protocols
and to make recommendations to the FCC on solutions. After meeting with
several communications security experts on the SS7 security issues, the
group provided its initial risk assessment brief at its September
meeting. The briefing highlighted the vulnerabilities inherent in SS7
in both the wireline and mobile environments, vulnerabilities
associated with the interworking between SS7 and DIAMETER, and
potential risk mitigation strategies. CSRIC will submit a final report
with recommendations to the Commission in March of next year.
The FCC continues to scrutinize our numbering initiatives to
identify how underlying SS7 vulnerabilities may increase risks. We are
working with our Federal Government and communications sector partners
to bring about meaningful solutions and risk mitigation strategies that
will reduce risk from SS7 vulnerabilities consistent with the
Commission's charge to ensure that communications networks are secure,
reliable, and resilient.
Question 5. The CSRIC IV's ``Cybersecurity Risk Management and Best
Practices'' report recommends that the FCC, in partnership with DHS,
participate in voluntary meetings with communications sector
stakeholders to review cybersecurity risk management practices.
A. Does the Commission still plan to conduct these voluntary
meetings?
B. If so, how will the Commission ensure that it does not use
information voluntarily shared for enforcement or rulemaking purposes?
Answer. Strong cybersecurity policies and protections are crucial
to maintaining the reliability and resiliency of our commercial
networks and public safety mechanisms. CSRIC IV proposed that the
Commission use the DHS Protected Critical Infrastructure Information
(PCII) program to ensure the strongest protection against disclosure of
the information that would be received in assurance meetings. The
Commission would prefer to employ the DHS PCII program, but in the
interim the Commission is considering an item that would establish
legally equivalent protections that could apply to such meetings at the
Commission.
Question 6. A recent independent evaluation to determine the
effectiveness of the Commission's information security program and
practices for Fiscal Year 2015 determined the Commission was not in
compliance with the Federal Information Security Modernization Act. The
evaluation disturbingly found significant deficiencies in several
security areas.
A. Will you commit to implement information security-related
recommendations from the IG and independent auditors fully and in a
timely manner?
B. Will you please provide the Committee with regular updates on
your progress to implement these recommendations?
Answer. The FCC commits to implementing information security
related recommendations from its Inspector General and independent
auditors fully and in a timely manner. Furthermore, the FCC will
provide the Committee with regular updates on its progress to implement
these recommendations. We would be glad to work with the Committee
staff to establish a recurring process that fits your needs.
Question 7. Please provide a copy of the Commission's document
retention policies. Please include details on the Commission's
retention of e-mail messages and voice-mail messages and the
Commission's process for searching e-mail and voice-mail in response to
Freedom of Information Act requests or other requests.
Answer. The Commission's document retention policies for Federal
records are reflected in its records retention schedules. All retention
schedules are approved by the National Archives and Records
Administration (NARA), taking the form of either a General Records
Schedule developed by NARA and adopted by the FCC, or an FCC-developed
schedule approved by NARA. All of the General Records Schedules are
available on NARA's website at https://www.archives.gov/records-mgmt/
grs.html. Furthermore, the FCC specific schedules are also available on
NARA's website at the following link: https://www.archives.gov/records-
mgmt/rcs/schedules/index.html?dir=/independent-agencies/rg-0173. In
addition, the Commission would be happy to provide committee staff with
the Commission's internal directive that describes the overall process
that the FCC uses for record management, including coordination with
NARA and roles and responsibilities within the FCC.
These schedules specify the duration for which records must be
stored. E-mails and voice-mails are generally considered records under
Federal records laws. Currently, there is no specific records schedule
for e-mail and voice-mail messages. However, consistent with OMB's
Managing Government Records directive (OMB Memorandum M-12-18) and NARA
guidance (NARA Bulletins 2013-02--Guidance on a New Approach to
Managing E-mail Records, and 2014-06--Guidance on Managing E-mail), the
Commission is in the process of developing a records schedule that
would specifically cover e-mails. Among other things, this new schedule
would generally require that the e-mails of high-level officials be
treated as permanent records.
Prior to August 2015, unless otherwise required under our records
schedules, the Commission retained e-mail and voice-mail messages
according to administrative need. The Commission's retention policy for
e-mail messages was to keep all messages available on staff e-mail
accounts for 45 days. At the completion of 45 days, messages would be
held in a user's ``Deleted Items'' folder for ten additional days.
After that time, messages would be automatically deleted from the
user's e-mail account. FCC employees who needed to retain an e-mail
message for business purposes longer than 45 days could move the
message to an archive folder where it would be retained indefinitely.
The policy for retaining voice-mail messages was the same as for e-mail
messages, as the Commission's e-mail platform (Microsoft Exchange)
maintained a user's voice-mail messages in their e-mail account. The
45-day retention policy was put in place to meet users' needs and to
prudently manage electronic storage of messages based on limited
electronic storage space.
Beginning in August 2015, the FCC moved to a cloud-based solution
for e-mail messages, Office 365, greatly increasing the available
electronic storage for e-mail and voice-mail. At that time, the agency
decided to retain all e-mail messages that are potentially Federal
records that were sent or received since August 2015, pending the
adoption of the new e-mail records schedule.
With respect to searches, the agency conducts all FOIA searches
consistent with the requirements of the FOIA, i.e., one that is
``reasonably calculated to uncover all relevant documents.'' Upon
receipt of a FOIA request, Commission FOIA personnel contact any
Commission staff likely to possess records responsive to the request.
These staff perform a search of their own records for any responsive
material. The staff then provide copies of those responsive records to
the FOIA personnel for processing and release. On a case-by-case basis,
the agency determines whether additional searches are necessary to meet
FOIA's requirements. The agency uses a similar process to respond to
Congressional and litigation-related searches.
Question 8. As part of the Spectrum Frontiers Order, the FCC made
available nearly 11 GHz of spectrum, but less than 4 GHz of that will
be made available on a licensed basis. And a portion of that licensed
spectrum will be allocated on a shared basis.
A. I believe that there should be a balance between licensed and
unlicensed spectrum. Does this Order strike the proper balance? If so,
please explain why.
Answer. Opening up spectrum and offering flexibility to operators
and innovators is the most important thing we can do to enable the 5G
revolution, and I share your view that there should be a balance
between licensed and unlicensed spectrum. I have consistently pursued
spectrum policies that take an ``all of the above'' approach--making
more spectrum available for licensed, shared, and unlicensed access. In
the Spectrum Frontiers Order, we increased the amount of licensed
spectrum available by over four times what is currently available. We
made a small portion available on a shared basis, and 7 gigahertz
available on an unlicensed basis. Importantly, there are unique
physical properties of the unlicensed band that makes it best suited
for unlicensed access. Specifically, the spectrum in the 60 gigahertz
range is not able to travel long distances--the atmosphere absorbs and
dissipates the signal beyond a few meters. It therefore is very
effective for short range, high data applications, and does not lend
itself to a traditional wide-area geographic licensing approach. This
spectrum will serve as a breeding ground for new innovations, and I
believe will help drive economic activity in the U.S. as a complement
to the licensed spectrum we made available.
As the Commission looks to open up additional spectrum bands,
including an additional 18 gigahertz that the Commission proposed to
make available on a licensed basis through the Spectrum Frontiers
FNPRM, it will continue to pursue this balanced approach, while at the
same time taking into account the unique circumstances in each spectrum
band.
B. Should the Commission look for more licensed spectrum as it
considers additional high frequency bands in its further notice?
Answer. As the demand for wireless technologies increases, so does
the need for greater coverage and wireless network capacity. To keep up
with the growing demand the Commission is pursuing an ``all of the
above'' policy, and licensed spectrum will play an integral role in
future spectrum bands. As described above, the Commission will continue
to pursue a balanced approach to spectrum policy, while at the same
time examining the unique circumstances in each spectrum band. The
Further Notice of Proposed Rulemaking that was adopted
contemporaneously with the Report and Order seeks comment on making an
additional 18 gigahertz of licensed spectrum available, on top of the
3.85 gigahertz made available in the Report and Order.
Question 9. The 18th Mobile Wireless Competition Report states,
``Given the complexity of the various inter-related segments and
services within the mobile wireless ecosystem, any single conclusion
regarding the effectiveness of competition would be incomplete and
possibly misleading in light of the complexities we observe.''
A. If the Commission is unable to accurately assess overall
competition within the mobile wireless ecosystem given these
``complexities,'' how can it reasonably conclude that its regulatory
actions, undertaken in the absence of an overarching conclusion
regarding the ecosystem's state of competition, are in the public
interest?
B. If the Commission is able to assess overall competition within
the ecosystem, why has it repeatedly failed to make such an assessment
and finding?
Answer. Similar to the first seven Reports and the five most recent
Reports, the 19th Mobile Wireless Competition Report (19th Report),
released on September 23, 2016, provides extensive data and analysis of
competition in the mobile wireless marketplace and does not make a
finding that there is or is not effective competition in the
marketplace. First, as explained in the 19th Report, the mobile
wireless ecosystem is sufficiently complex and multi-faceted that it
would not be meaningful to try to make a single, all-inclusive finding
regarding effective competition that adequately encompasses the level
of competition in the various interrelated segments, types of services,
and vast geographic areas of the mobile wireless industry. In addition,
there are significant variations in size, market share, spectrum
holdings, investment, and other indicators between the top two mobile
wireless providers and the next two nationwide wireless providers. The
extent of these variations makes a broad, singular determination of how
competitive the overall mobile wireless marketplace is unhelpful in the
application of careful and empirically driven regulatory oversight.
Furthermore, as the 19th Report and previous Reports note, there is
no agreed upon definition of ``effective competition.'' However, this
does not preclude the Commission's ability to make determinations as to
the public interest benefits of particular Commission actions, which
address discrete issues, or specific facets of the mobile wireless
marketplace. Those actions follow notice and comment rulemaking
processes that allow for an extensive public record addressing the
particular matter at hand.
Question 10. The Commission's Mobile Competition Reports have
repeatedly claimed that Form 477 data are subject to ``methodological
limitations'' and have ``the potential to overstate coverage.'' What
steps is the Commission taking to ensure it has adequate information to
properly assess whether or not the Commercial Mobile Radio Services
marketplace is effectively competitive? Please describe in detail what
activity there has been in each of the past three years.
Answer. The Competition Report historically has used data from
third-party sources such as Mosaik because the Commission did not have
adequate data sourced internally. However, in recent years, the
Commission has increasingly used Form 477 data. The Commission used
Form 477 data in its last two Competition Reports (the 18th Report and
the 19th Report), but did not use Form 477 data in its 17th Competition
Report, released December 8, 2014. Form 477 data are collected using
standards and methodologies specified by the Commission. The data are
provided, and certified as accurate, by the service providers directly
to the Commission, and not to a third-party entity like Mosaik.
However, Form 477 data, as well as that from third-parties, are
potentially subject to errors or overstatements by the providers
themselves. The Commission recognizes the importance of accurate
information to our policymaking and enforcement, as well as to
consumers, and is exploring ways to ensure the accuracy of these data.
Further, another limitation has been the centroid methodology used
to determine whether a census block is considered ``covered.'' Under
the centroid methodology, if the geometric center point, or centroid,
of a census block is within the boundary of a provider's coverage map,
that block is considered to be ``covered'' even if significant portions
of the census block may be outside of any provider's coverage. In
addition, coverage estimates based on the centroid methodology
represent deployment of mobile networks and do not indicate the extent
to which service providers affirmatively offer service to residents in
the covered areas, and thus likely overstate the coverage experienced
by some consumers. In the 19th Report, for the first time, the
Commission also reports coverage based on the actual area coverage
methodology, which calculates the exact area of a census block reported
as covered by each service provider by technology, and yields more
precise estimates.
Finally, while coverage data is most useful as a necessary tool for
measuring and understanding developments in mobile coverage year over
year, it is just one element of competition between service providers
in the mobile wireless marketplace. As noted in the answer to Question
9 above, the mobile wireless ecosystem is sufficiently complex and
multi-faceted that it would not be meaningful to try to make a single,
all-inclusive finding regarding effective competition. In addition,
there is no agreed upon definition of ``effective competition.''
Please be assured that the Commission therefore continually
evaluates its current data sources and methodologies, and strives to
find new data sources and develop new methodologies, in order to
improve the quality and reliability of the data provided in the
Competition Report. Stakeholders are requested to comment on such
matters, as well as provide information and data, which the Commission
takes into account in its preparation of each edition of the report.
Question 11. In the 2016 Broadband Progress Report, the Commission
asserts that, ``the availability of advanced telecommunications
capability requires access to both fixed and mobile services.'' This is
in direct contradiction to 47 U.S.C. Sec 706(d), which defines
``advanced telecommunications capability . . . without regard to any
transmission media or technology, as high-speed, switched, broadband
telecommunications capability that enables users to originate and
receive high-quality voice, data, graphics, and video
telecommunications using any technology'' (emphasis added). Please
explain how the Commission determined that both fixed and mobile
services were required by the statute. Please include any legislative
history supporting the Commission's interpretation.
Answer. In the 2016 Broadband Progress Report, the Commission
determined that the availability of advanced telecommunications
capability in today's communications landscape requires access to both
fixed and mobile broadband services, not because the services use
different network technologies, but because they offer distinct and
complementary functions or capabilities to consumers. As noted in the
Report, consumers use fixed broadband service for high-capacity home
use, including streaming high-definition video, uploading large files,
and certain web services, but also increasingly rely on mobile
broadband services for activities like navigation, communicating with
family and friends and on social media, and receiving timely news and
information when away from home. Mobile usage represents about 62
percent of American time spent on a computing device, and 67 percent of
smartphone owners use their phone for navigation and direction. Fixed
and mobile broadband services are both critical means by which
Americans communicate, and both should be evaluated in our analysis.
Thus, as part of this inquiry, the Commission took the common-sense
step of including mobile broadband services in the assessment of
advanced telecommunications capability.
Question 12. Stakeholders have expressed serious concerns that your
business data services (BDS) proposal could further exacerbate the
challenges of providing residential broadband services in rural areas.
They argue your proposal would further disincentivize investment in the
infrastructure needed to provide broadband services to rural customers.
A. Do you share these concerns about the BDS proposal?
Answer. Business data services (BDS) play an important role in the
day-to-day life of consumers, business, and industry, and are integral
to the competitiveness of the U.S. economy as a whole in the
information age. My goal is to maximize the benefits of business data
services for U.S. consumers and businesses, especially those in rural
areas. I fully agree that maintaining incentives to invest--both by BDS
providers and by their customers--is paramount. Let me assure you that
we have continued to take the views of all stakeholders into
consideration as we work to complete BDS reform. The proposal I have
circulated to my fellow Commissioners recognizes the real challenges
faced in rural areas and strikes a balance that addresses the problems
in this market while maintaining incentives for investment by BDS
providers.
B. If not, please describe, in detail, why you think your plan is
sound policy for our Nation's rural communities and the overall growth
of our Nation's Internet infrastructure.
Answer. Earlier this year we sought broad public comment on
reforming and modernizing the existing, fragmented regulatory BDS
structure with a new framework. It is worth noting that the reform
being considered is focused on areas served by incumbent LECs regulated
pursuant to price cap regulation, not the rural areas served by rate-
of-return LECs. In early October, I circulated to my fellow
Commissioners proposed rules to reform the regulatory regime for BDS to
promote fairness, competition, and network investment in this important
marketplace. The circulated Order provides a new framework that strikes
a balance between targeted regulation for lower-bandwidth legacy
services, where evidence of market power is strongest, and lighter-
touch regulation for packet-based services, where there has been new
entry and competition may be emerging. The proposed Order is grounded
in the comprehensive record of this proceeding, including careful
review of the sophisticated economic analyses presented by multiple
parties as well as other record evidence. As we work to achieve these
important goals, we take into careful consideration the impacts various
forms of regulation would have in the markets that utilize BDS, and we
also pay particular attention to impacts any potential regulations may
have in rural areas.
Question 13. The Commission has proposed an exception to the local
media cross-ownership ban that would allow a broadcaster to invest in a
newspaper when it is ``failing.'' This exception for cases in which a
newspaper is ``failing'' renders little value to a newspaper that needs
investments now, well before it is ``failing.'' By the time a newspaper
is ``failing,'' a local broadcaster may no longer see it as a
worthwhile investment--particularly in light of the consumer trend
toward digital and mobile applications for news and entertainment.
Shouldn't the Commission be seeking ways to encourage investment in
newspapers before they get to a state of ``failing,'' and before such
newspapers may have to make the difficult decision to cut back on local
reporting resources?
Question 14. Thanks to the Internet and other digital platforms,
consumers today have available to them a nearly endless variety of
sources of information, even while some of those outlets find it
increasingly difficult to find the scale to compete in the new media
landscape. In light of dramatic and transformative changes in the 41
years since the cross-ownership ban was adopted, why should newspapers,
alone among all media providers in an Internet Age, be singled out and
generally disqualified from being co-owned with even a single
television or radio station in their local markets?
Answer. (Questions 13 and 14): The media ownership rules adopted in
the recently concluded proceeding were based on a comprehensive,
refreshed record that reflects the most current evidence regarding the
media marketplace. With respect to the Newspaper/Broadcast Cross-
Ownership (NBCO) Rule, the record demonstrates the continuing role of
newspapers and broadcast stations as the primary producers of original
local news and public interest programming. Accordingly, the Commission
concluded that regulation of newspaper/broadcast cross-ownership within
a local market remains necessary to protect and promote viewpoint
diversity.
With that said, the Commission did revise the NBCO Rule to provide
for a modest loosening of the previous ban on cross-ownership. The
modifications include: (1) modifying the rule to update its analog
parameters to reflect the transition to digital television; (2) in
order to focus the application of the rule more precisely on the areas
served by broadcast stations and newspapers, revising the trigger of
the NBCO Rule to consider both the contour of the television or radio
station involved, and whether the station and the newspaper are located
in the same Nielsen DMA or Audio Market (if any); (3) in recognition of
the fact that a proposed merger involving a failed or failing entity
does not present a significant risk to viewpoint diversity, adopting an
explicit exception to the NBCO Rule for proposed mergers involving a
failed or failing broadcast station or newspaper; and (4) considering
requests for waiver of the NBCO Rule on a case-by-case basis and
granting relief from the rule if the applicants can show that the
proposed merger will not unduly harm viewpoint diversity in the market.
The ``failed or failing entity'' provision is only one exception
and the revised rule explicitly provides for waiver requests on a case-
by-case basis. Thus, an entity may seek investment before it is
``failing,'' as long as viewpoint diversity is not unduly harmed by the
merger.
Question 15. Chairman Wheeler, in March of this year, I publicly
asked you whether you would resign from the FCC at the end of President
Obama's term, but you did not provide a clear response at that time.
Since then, however, you have privately assured me you would indeed
resign after the election. Will you now publicly commit to resigning
from the FCC at the end of President Obama's term, unless explicitly
asked to stay on by the next president?
Answer. As I said during our private conversation and at the
September Senate Commerce Committee Oversight Hearing, I will cooperate
fully with the new administration to assure a smooth transition at the
FCC.
______
Response to Written Questions Submitted by Hon. Roger F. Wicker to
Hon. Tom Wheeler
Question 1. Regarding the USF reform order for small, rate-of-
return carriers earlier this year, you've already committed to work
with Congress and affected stakeholders to promptly address any adverse
or unintended consequences that arise out of the reforms. We want to
talk about one issue that has come to light--we understand that the
record in the proceeding shows that, even with the new standalone
broadband support mechanism, most small carriers still will be forced
to offer broadband-only service at prices far in excess of what's
available in urban areas. This runs directly counter to the
Communications Act's promise of reasonably comparable services and
rates.
A. What steps will the FCC take to streamline and expedite its
waiver process to ensure that the broad major reforms to USF support
that the FCC adopted for rate of return carriers can be tailored to
meet individual carrier realities?
Answer. In the USF/ICC Transformation Order, the Commission
recognized that some carriers impacted as a result of reform might need
a waiver exempting them from some or all reforms. To assist potential
applicants in effectively formulating their waiver petitions, the
Commission provided guidance on the circumstances that would be
persuasive and compelling grounds for grant of a waiver under the
Commission's ordinary standard for granting waivers under section 1.3
of the Commission's rules. The Commission provided further
clarification and guidance in response to a subsequent petition from
several rural associations. To date, the Commission has addressed
petitions seeking waiver of support reductions for about a dozen
carriers, with two more recently filed petitions still pending. The
Commission has not received any petitions for waiver of the reasonable
comparability requirement from carriers since the March 2016 Rate-of-
Return Reform Order.
B. How do you plan to make sure ultimately that rural consumers are
paying reasonably comparable rates to urban consumers regardless of
whether its voice or broadband they want? How can you ask carriers to
certify that their broadband rates are reasonably comparable to those
in urban areas when the record clearly shows that many won't get enough
support to offer that?
Answer. The Rate-of-Return Reform Order adopted by the Commission
was the result of a bipartisan effort, aided by the rate-of-return
carriers themselves, to expand rural broadband deployment by
modernizing the USF high-cost support program for rate-of-return
carriers, including by providing support for standalone broadband.
As a condition of receiving high-cost support, the Commission
requires carriers to offer voice and broadband services in supported
areas at rates that are reasonably comparable to rates for similar
services in urban areas. We annually survey urban rates and recipients
of high-cost support are required to report annually whether their
rates are reasonably comparable to those urban rates. Based on the
Commission's most recent survey, the benchmark in 2016 for broadband
service of 10 Megabits per second (Mbps) downstream and 1 Mbps upstream
and a 150 Gigabytes (GB) per month usage allowance was $71.17. Carriers
must certify annually that they are in compliance with that benchmark,
and the Commission has stated it will deal with carriers that are not
able to make that certification on a case-by-case basis.
In the December 2014 Connect America Order, the Commission stated
that it will gather more information if eligible telecommunications
carriers (ETCs) are unable to make the reasonable comparability
certification for their broadband rates. ETCs may present factual
evidence explaining the unique circumstances that preclude them from
offering service at a rate meeting the requisite benchmark. As we
continue to implement the rate-of-return reforms we put in place
earlier this year, including providing support for standalone
broadband, we will continue to monitor consumer broadband-only rates to
ensure that our policies support reasonable comparability.
Question 2. Carriers need to let the FCC know in the next few
months if they want to elect a new cost model for USF support on a
voluntary basis or continue to receive support through a modified
version of the system that was in place before. But we understand that
information regarding several aspects of the reforms--such as budget
controls and buildout duties and the effects of certain caps--haven't
been made public yet.
A. How can carriers make informed choices about what option is
right for them without such information? Will you commit to giving
carriers complete information about both the model and the other
changes to the current support systems so that they can make informed
decisions before they need to make their final choice?
Answer. The Commission provided detailed information about both the
model and the impact of reforms for those who do not select the model
in advance of the November 1, 2016 deadline for electing the model. In
August, the Wireline Competition Bureau (WCB) released the model
support amounts offered to rate-of-return carriers. These amounts were
announced by a Public Notice and were accompanied by a spreadsheet
detailing the offer, as well as a map and a list of census blocks
showing areas that would be funded by carriers accepting the offer.
The Commission also made available information regarding the
operating expenses limitation, capital investment allowance, extent of
incumbent carrier broadband coverage (which is used to calculate
several aspects of other reforms), extent of competitive overlap,
deployment obligations for carriers remaining on legacy mechanisms,
transition payments for carriers that would receive less support if
they elect to receive model support, and the operation of the budget
control mechanism for the first half of 2017. In addition, on October
6, 2016, Commission staff and USAC held a webinar to answer the
industry's questions. Also on October 6, 2016, WCB released an order
regarding tariff revisions that must be made before carriers may
receive universal service support for standalone broadband starting
January 1, 2017. All of this information, and more, is available on
USAC's website: http://www.usac.org/hc/rules-and-orders/rate-of-return-
reform-order.aspx.
B. We also understand that depending on how the model election is
conducted, that could lead to carriers that did NOT elect the model
being harmed and getting less funding. How is that fair or reasonable?
Why are carriers who did nothing and changed nothing in how they do
business going to get less support due to the election choices of a few
companies? Can we count on you to make sure this does not happen?
Answer. In 2011, the Commission allocated $2 billion of the total
high-cost budget to support for rate-of-return carriers. The Rate-of-
Return Reform Order did not alter that amount, but did make available
to carriers a voluntary path to model-based support as well as adopt
certain reforms to the legacy support mechanisms. Given the benefits
and certainty of the model, the Commission did allocate an additional
$1.5 billion over the 10-year term to facilitate the voluntary path to
the model. Carriers that choose to continue receiving support from the
reformed legacy mechanisms will still receive support based on their
own costs, but will be subject to budgetary controls to ensure
efficient use of our finite Federal universal service resources.
The deadline for carriers to make this decision was November 1. On
November 2, the Wireline Bureau released a Public Notice announcing
that 216 rate-of-return carriers elected the model and soliciting
feedback on what measures should be considered to address the high
level of interest in model-based support.
Question 3. Your recent Order provides for companies to elect to
receive their future support through your Model or to continue to
receive support through the modified Legacy mechanisms. However, rather
than allowing each company to make that decision independently, you've
required all companies within a single state and owned by the same
holding company to make the same election. That is, all of these
companies must elect to be supported under a modified Legacy model or
under the new Model support system. So, all companies within a single
state and owned by the same holding company must make that decision as
a whole regardless of the differences between the companies, while two
companies owned by the same holding company and only a few miles apart,
but across state lines from each other, may elect separately to take
Model support or Legacy support.
A. What was the rationale in the election process for the FCC to
aggregate all companies owned by a holding company within a single
state, even if those companies within that state may be hundreds of
miles apart and very different from each other when it did not
aggregate those companies owned by the same holding company that may be
in differing states, but very similar and only a short distance from
each other?
Answer. The Commission adopted its proposal to require
participating carriers to make a state-level election, which was
generally supported in the record. The Commission did not require
carriers to make elections across state boundaries as rural incumbent
carriers are designated as eligible telecommunications carriers on a
state-by-state basis by the state commissions.
B. How does this further the ultimate goal of Telecommunications
Act--affordable, comparable Universal Service available to all?
Answer. Requiring carriers to make a state-level election prevents
rate-of-return carriers from cherry-picking the study areas in a state
where model support is greater than legacy support, and retaining
legacy support in those study areas where legacy support is greater.
Requiring carriers with multiple study areas in a state to make a
state-level election facilitates decisions about managing different
operating companies on a more consolidated basis.
Question 4. What is the timetable for the FCC to begin its CAF
Phase II reverse auction and CAF Phase II Mobility Fund?
Answer. The Commission has not established dates for the CAF Phase
II Auction or the Mobility Fund Phase II (MF-II) Auction.
The May 2016 Commission Order & FNPRM established a framework for
the CAF Phase II competitive bidding process that will allocate more
than $2 billion over the next decade in support for rural broadband,
but important details regarding the operation of the auction remain to
be decided. Many of these details will be determined in a forthcoming
Auction Procedures Public Notice.
The Commission will consider the Mobility Fund Phase II Order at
our November Open Meeting. Our recently-completed analysis of Form 477
data shows that there are significant gaps in 4G LTE coverage
throughout the country that need to be addressed through MF-II. The
primary focus of MF-II will be targeting our necessarily limited
universal service funds to promote 4G LTE service in areas where it
might not otherwise be expanded or sustained without Federal support.
Question 5. You mentioned during the hearing that the FCC continues
to struggle with gathering credible data regarding wireless coverage in
rural areas. My colleague, Senator Manchin, has proposed a number of
potential methods for gathering ``real-world'' measurements of rural
coverage, including studying the feasibility of coverage drive testing
through the United States Postal Service, commercial entities, and any
other appropriate means. Has the FCC considered employing any of these
or other methods of measuring rural wireless coverage? Can you assure
my colleagues and I that the FCC will not proceed with any reductions
to existing rural wireless USF support mechanisms until it can reliably
gather data about actual wireless coverage throughout rural America?
Answer. In the past, the Commission has confronted several
challenges in our attempts to measure mobile coverage in a way that
matches up with the public's real-world experiences. A very significant
challenge has involved the process of data collection. For the past
several years, the Commission relied on data that came from states via
the National Telecommunications Information Administration--data that
was used in the National Broadband Map--and third party commercial
vendors. For a variety of reasons, the data collected by the states and
third party commercial vendors did not always reflect the real world
experiences of consumers.
Recognizing the need to improve our mobile coverage data, the
Commission adopted an order in 2013 that required mobile wireless data
collection from one of the most reliable sources available--the mobile
wireless carriers themselves. As a result the Commission is now
collecting coverage data directly from wireless carriers through the
Commission's Form 477. Each carrier that submits data must certify to
its accuracy. We expect the data wireless carriers provide through
these submissions will be more accurate than our previous data because
it comes directly from the entity that is deploying the wireless
facilities. Commission staff have actively been analyzing the new
coverage data from wireless carriers through the revised FCC Form 477,
and recently released a detailed analysis of the December 2015 data
(along with its methodology and the raw data on which it is based) so
that stakeholders can make their own assessments regarding the
reliability of the carriers' filings. In addition, in the context of
providing for ongoing support for mobile broadband service, we intend
to provide a process to consider stakeholders' challenges to ensure
accurate decisions on the eligibility of particular areas.
I believe that all these steps substantially advance the
Commission's ability to address the inherently difficult task, given
the very nature of wireless networks, of accurately measuring mobile
broadband coverage throughout the country. The Commission remains open
as well to working with stakeholders regarding additional data sources,
including new third party sources, and specific methods that we can
employ to obtain more reliable information on mobile broadband
coverage.
A core principle of universal service reform is that finite dollars
should be distributed in an efficient, cost-effective manner that
focuses funding on areas where service would be unavailable absent
Federal support. As such, USF support should not go to areas that are
served by an unsubsidized provider. So MF-II will seek to target
ongoing support as much as possible to areas that lack unsubsidized 4G
LTE coverage. Overall, MF-II will therefore both preserve existing
service where necessary and provide substantial support for further
expansion of 4G LTE in areas where it is not currently available.
Question 6. What impact do you anticipate the FCC's proposed
changes to existing rural wireless USF support mechanisms might have on
critical services, like remote patient monitoring and precision
agriculture applications, that rely on USF-supported wireless networks
to function today? Can you assure me that the changes to wireless USF
support mechanisms you are considering will do no harm to these
existing services?
Answer. The Commission's recently-completed analysis of Form 477
data shows that there are significant gaps in 4G LTE coverage
throughout the country that need to be addressed through MF-II. The
primary focus of MF-II will be targeting finite universal service funds
to promote 4G LTE service in areas where it might not otherwise be
expanded or sustained without Federal support. With that goal in mind,
the Commission is working to address the key structural and operational
issues for a MF-II fund, including the appropriate budget, eligible
geographic areas, proper distribution methodology, and the public
interest obligations of support recipients. MF-II will also make
targeted support available to current competitive eligible
telecommunications carrier (CETC) support recipients where needed to
ensure preservation of existing service.
Question 7. In consideration of potential changes to wireless USF
support mechanisms and rural coverage data, have you or your staff
considered differences in coverage in rural areas by providers
utilizing incompatible technologies? What impact does this have on
seamless service availability for rural Americans?
Answer. In recent years, the Commission has taken steps to ensure
interoperability among mobile networks. The Commission has adopted
rules to enable consumers, especially in rural areas, to enjoy the
benefits of greater competition and more choices, and encourage
efficient use of spectrum, investment, job creation, and the
development of innovative mobile services and equipment. These changes
mirrored a voluntary industry solution to remove the lack of
interoperability in the 700 MHz band while allowing flexibility in
responding to evolving consumer needs and technological developments.
The FCC also adopted basic device interoperability requirements in the
AWS-3 and the 600 MHz service rules. Interoperability requirements in
these bands will promote better, more seamless service, while allowing
for the industry to continue to innovate, to the benefit of consumers
across the country--in rural and urban areas alike.
With regard to providing universal service funding for the mobile
broadband networks of the future, I believe that the priority needs to
be to close the remaining 4G LTE coverage gaps existing in rural area
as much as possible, rather than ensuring that such future networks are
backwards compatible with network technologies that will be in the
process of being phased out. I do believe that the proposed
transitional phase down of current support will help address this issue
in the interim.
The Commission is also considering a notice of proposed rulemaking
that would classify VoLTE as a Title II service and unify the voice and
data roaming standards, which actions together aim to provide all
consumers, including rural consumers, with seamless access to service
in all areas of the country, regardless of provider and regardless of
how a particular voice call is delivered.
Question 8. Proposed broadband privacy rules suggest creating a new
category of confidential information that reaches far beyond the type
of information that is protected in the telephone environment,
including a customer's name, postal address, and telephone number.
A. Can the Commission explain why it proposes to require ISPs to
protect information that is available in a telephone or on-line
directory?
Answer. The Commission's recently adopted privacy rules apply to
customer proprietary information, a category that includes personally
identifiable information (PII). The protection of PII is at the heart
of most privacy regimes, including the FTC's enforcement-based work
under Section 5 of the FTC Act. Names, postal addresses, and telephone
numbers are quintessential PII--each of these can readily be used to
identify an individual person.
Of course, not all PII is equally sensitive. People routinely
introduce themselves to strangers but tend to carefully guard their
Social Security numbers. The privacy rules take this difference into
account by tying customer approval requirements for the use and
disclosure of customer data to the sensitivity of the data. While use
or sharing of sensitive customer proprietary information requires
affirmative ``opt-in'' consent, an ongoing ability to ``opt-out'' is
sufficient for non-sensitive data--such as basic contact information.
That is, ISPs can generally use and share their customers' names,
addresses, and telephone numbers under our rules unless and until a
customer exercises the right to opt-out of that activity. The new rules
also permit ISPs and other telecommunications carriers to use this and
other non-sensitive customer information to market additional
communications services commonly bundled together with the subscriber's
telecommunications service. This approach preserves reasonable customer
expectations while minimizing burdens on providers.
B. Has the Commission considered only applying any new CPNI rules
to only that information that ISPs hold uniquely in their role of
providing telecom services?
C. If not, why not?
Answer. The Commission's recently adopted privacy rules reflect
ISPs' unique role as ``gatekeepers'' in the Internet ecosystem. An ISP
handles all network traffic, which means it has an unobstructed view of
all of unencrypted online activity (such as webpages visited,
applications used, and the times and date of Internet activity). On a
mobile device, an ISP can track the physical and online activities
throughout the day in real time. Even when data is encrypted, an ISP
can still see the websites that a customer visits, how often they visit
them, and the amount of time they spend on each website. Using this
information, they can piece together enormous amounts of information
about an individual--including private information such as a chronic
medical condition or financial problems.
To be absolutely clear, the rules apply only to information that an
ISP obtains by virtue of its role of providing service to its customers
as a telecommunications carrier. The rules do not apply to information
an ISP may obtain through its operation of an edge service, such as a
music streaming app. Nor do the rules apply to information an ISP
purchases on the open market.
Question 9. The Commission offers a laundry list of data to which
ISPs ostensibly have access, and which the Commission proposes should
be protected under a standard of strict liability.
A. Can the Commission explain why ISPs should be held to a stricter
standard than application and edge providers that have access to the
same data points?
Answer. In our final rules we adopt a standard that requires each
ISP to take reasonable measures to secure the customer data it collects
and possesses. What is reasonable for a given provider will depend on
contextual factors, including the size of the provider, the nature and
scope of its activities, and technical feasibility. We do not specify
the particular measures a provider must undertake to meet its data
security obligation, but we offer a list of ``exemplary practices'' as
guidance. This context-based, ``reasonableness'' approach is consistent
with the approach the FTC has taken in its enforcement work and with
other privacy regimes.
B. Does the Commission have any plans to address consumer confusion
that may well arise from the disparate way in which different actors in
the broadband ecosphere are treated?
Answer. The Commission recently adopted privacy rules to implement
Section 222 of the Communications Act, which requires
telecommunications carriers to protect the confidentiality of their
customer's proprietary information. As those rules become effective, we
will work with all stakeholders to educate consumers, as well as their
ISPs, about ISP obligations and customer rights pursuant to those
rules.
The rules reflect ISPs' unique role as ``gatekeepers'' in the
Internet ecosystem, which gives them comprehensive visibility into
their customers' online lives. In this regard they are distinguished
from even the largest edge providers. Moreover, the Commission's rules
are grounded in statutory authority--including Section 222 of the
Communications Act--that applies to ISPs but not to edge providers or
other Internet ecosystem participants.
That said, the Commission's rules were not drafted on a blank
slate. The rules incorporate the teachings of many well-established
privacy and data security frameworks, including the Fair Information
Practice Principles (FIPPs), the NIST Cybersecurity Framework, FTC
precedent and best practices guidance, and state law. In addition,
these rules are the culmination of an extensive public process in which
FTC staff, ISPs, edge providers, digital advertisers, state
governments, academics, consumer advocacy groups, and other
stakeholders provided input and debated one another's ideas. Through
this process, the key issues in this proceeding were sharpened, leading
us to refine and improve upon our original proposals.
C. Would the Commission propose that application and edge providers
that are not within the purview of FCC jurisdiction be regulated
similarly?
Answer. As I have repeatedly said, edge providers are outside the
scope of this rulemaking. The FTC has a strong track record of ensuring
that edge providers protect consumer privacy under their Section 5
authority, and I would defer to the FTC's opinion on how application
and edge providers outside of the FCC's jurisdiction should be
regulated.
______
Response to Written Questions Submitted by Hon. Roy Blunt to
Hon. Tom Wheeler
Question 1. As the Chairman of the Senate Rules Committee, I
oversee the Copyright Office, which is the entity designated by
Congress to interpret the Nation's copyright laws.
On August 3, the Copyright Office wrote a letter highly critical of
your initial proposal in proceeding MB Docket No. 16-42 because it
violated copyright law, and violated the Constitution.
If I ask the Copyright Office for its views on your new proposal,
are they going to say that this proposal is legal under copyright laws?
Answer. I think it is important to note that while Section 701(b)
of the Copyright Act authorizes the United States Copyright Office
(USCO) to ``advise'' Congress on copyright matters and ``provide
information and assistance'' to other Federal agencies, only Federal
courts have the power to authoritatively interpret copyright laws.
The USCO and other parties representing content owners expressed
concern that the ``three information flows'' approach we proposed in
the NPRM would allow third parties to interfere with the licensing
agreements that programmers negotiate with multichannel video
distributors (MVPDs). In response to these concerns, the Order on
circulation employs an ``apps-based'' approach to the delivery of MVPD
programming. Under this approach, which both the MVPDs and programmers
supported during the rulemaking, all MVPD content will be delivered to
consumers through an MVPD-controlled software application, ensuring
that copyright protections and the terms of programming license
agreements remain in place. I cannot speak for the Copyright Office's
view on this revised approach.
Question 2. The Copyright Office plainly states the law affords
copyright owners--in this case TV show producers--the ``sole right to
license'' the use of their work, as well as the right to impose
conditions on such use under the license.
Under what authority can the FCC usurp the law codified under Title
17 of United States Code as part of proceeding MB Docket No. 16-42?
Answer. Because section 106 of the Copyright Act gives content
owners the exclusive right to copy and publicly perform their works,
MVPDs must obtain a license from the owners to distribute their works.
However, licensing agreements between programmers also commonly contain
terms that do not implicate the owners' exclusive section 106 rights.
Courts have viewed these terms as simple contractual covenants. In
other words, the Copyright Act does not give content owners a ``right''
to impose terms on licensees that are unrelated to their exclusive
section 106 rights.
The FCC's authority to promote the commercial availability of
navigation devices under section 629 of the Communications Act is both
independent of and complementary to the exclusive rights section 106 of
the Copyright Act grants to content owners. As we carry out Congress's
command to promote innovation and competition in the navigation device
marketplace, we do not intend to (nor could we) change the rights and
remedies available to copyright holders, or the defenses and penalties
applicable in cases of copyright infringement.
Question 3. The Copyright Office plainly states that ``only
Congress, through the exercise of its power under the Copyright Clause,
and not the FCC or any other agency, has the Constitutional authority
to create exceptions and limitations in copyright law.''
Under what authority can the FCC usurp the Constitution as part of
proceeding MB Docket No. 16-42?
Answer. As stated above in response to Question 2, the FCC's
authority to promote the commercial availability of navigation devices
under section 629 of the Communications Act is both independent of and
complementary to the exclusive rights section 106 of the Copyright Act
grants to content owners. As we carry out Congress's command to promote
innovation and competition in the navigation device marketplace, we do
not intend to (nor could we) change the rights and remedies available
to copyright holders, or the defenses and penalties applicable in cases
of copyright infringement.
______
Response to Written Questions Submitted by Hon. Kelly Ayotte to
Hon. Tom Wheeler
Question 1. FairPoint Communications, a New Hampshire constituent
company, has a petition before the FCC regarding back payments of high-
cost support. Delay in granting the petition may have the effect of
delaying further broadband deployment to rural America. Can you commit
to me that the FCC will work with FairPoint Communications to resolve
this petition before the end of the year?
Answer. Commission staff is evaluating FairPoint's petition and has
met with the company several times to discuss the issues raised in the
petition. Staff is working to address a number of priorities by the end
of the year, including FairPoint's petition.
Question 2. Carriers need to notify the Commission in the next few
months if they plan to elect a new cost model for USF support on a
voluntary basis, or continue to receive support through a modified
version of the system already in place.
a. I understand that depending on how the model election is
conducted, it could lead carriers that did not elect the model to be
harmed and receive less funding.
i. How is that fair or reasonable? Why would carriers who did
nothing and changed nothing in how they conduct business receive less
support?
ii. Can we count on the Commission to ensure that this does not
happen?
Answer. In 2011, the Commission allocated $2 billion of the total
high-cost budget to support for rate-of-return carriers. The Rate-of-
Return Reform Order did not alter that amount, but did make available
to carriers a voluntary path to model-based support as well as certain
reforms to the legacy support mechanisms. Given the benefits and
certainty of the model, the Commission did allocate an additional $1.5
billion over the 10-year term to facilitate the voluntary path to the
model. Carriers that choose to continue receiving support from the
reformed legacy mechanisms will still receive support based on their
own costs, but will be subject to budgetary controls to ensure
efficient use of our finite Federal universal service resources. How
the model election process affects the allocation of the rate-of-return
budget amongst carriers will depend on how many and which companies
elect the model and how many and which companies choose to remain on
the legacy mechanisms.
Question 3. Under the Universal Service Fund, why do the Lifeline
and E-rate programs have automatic inflationary adjustments, but the
High Cost program lacks this corresponding mechanism? What is the
Commission's reasoning for not placing all USF programs on more
consistent regulatory footing?
Answer. Of the Universal Service Fund programs, only the E-rate and
Lifeline programs have an automatic inflation adjustment. Beginning in
2010, the Commission began adjusting the E-rate cap to account for
annual inflation to try to gradually align that program's needs with
available funding. With respect to Lifeline programs, beginning in
2016, the funding cap on Federal universal service support for Lifeline
shall be automatically increased on an annual basis to take into
account increases in the rate of inflation. The High-Cost and Rural
Health Care programs do not have such adjustments.
______
Response to Written Question Submitted by Hon. Dan Sullivan to
Hon. Tom Wheeler
Question. The FCC has spent much of its time developing regulations
for areas that, to my understanding, do not need more regulation. Yet I
have a constituent who has had license renewal applications pending at
the FCC for more than 13 years! It seems that the FCC is so busy
finding areas to regulate that it has abandoned the duties that they
are actually responsible for.
Chairman Wheeler, on June 10, 2016, I, along with members of the
Alaska delegation, Senator Murkowski and Congressman Young, sent you a
letter requesting that you provide us with a date certain for when the
FCC plans to act on pending applications from this company, who has had
these applications pending for over 13 years at the Commission. You
responded to our letter by saying that you will take action by the
fall.
Is it still your intention to make a decision on these pending
applications by fall? If so, can you provide me with a date certain?
Answer. On September 30, 2016, the Audio Division of the Media
Bureau took action on these applications in a letter decision (DA 16-
1117).
______
Response to Written Question Submitted by Hon. Ron Johnson to
Hon. Tom Wheeler
Question. I continue to be concerned that the FCC is layering on
reporting and disclosure obligations on wireless providers that will
divert resources from broadband deployment in Wisconsin and across the
country. One example of this is the FCC's Open Internet Order's
Enhanced Transparency Requirements. Apparently, FCC staff has created a
safe harbor to these requirements when companies use the FCC-created
Measuring Mobile Broadband American Program. However, this program has
well-documented flaws and is not even available in large parts of the
country. Has the Commission considered creating a safe harbor based on
commercially-available sources for mobile performance that would be
available to all wireless providers, including small companies in
Wisconsin?
Answer. The 2010 Open Internet (OI) Order adopted the Transparency
Rule, which requires broadband providers to publicly disclose
information regarding the network management practices, performance,
and commercial terms of its broadband Internet access services.
However, subsequent to adoption of the 2010 Transparency Rule, the
Commission continued to receive numerous complaints from consumers
suggesting that broadband providers are not providing information that
end users and edge providers need to receive. The Enhanced Transparency
Rule adopted in the 2015 OI Order, therefore, merely enhanced the
Transparency Rule to require specific disclosures beyond the examples
provided in the 2010 Order.
The Commission expects that in order to evaluate their own network
performance, mobile broadband providers generally already have access
to key network performance information representative of the geographic
areas in which consumers purchase service. That data--acquired through
their own or third party testing--would be the source of a provider's
disclosure under the transparency rules. The Commission has provided an
optional safe harbor; however, providers remain free to implement
alternative approaches for their network performance disclosures.
______
Response to Written Questions Submitted by Hon. Cory Gardner to
Hon. Tom Wheeler
Question 1. Chairman Wheeler, I'd like to commend the Commission on
a rare bipartisan win with its recent issuance of the Spectrum
Frontiers item. As the world continues to innovate and attempt to
overtake the United States in cutting-edge wireless technology, it's
more important than ever that we lay the groundwork for continued
leadership. Designating spectrum for 5G operations is a major first
step in that process.
Recently, Senator Booker and I successfully passed an amendment to
the MOBILE NOW Act that demonstrated the importance of both unlicensed
and licensed spectrum. Much of the spectrum in the recent Spectrum
Frontiers proceeding, however, is already licensed or being made
available for unlicensed use. And while it's a positive step that those
licensees will be able to deploy mobile services, there is still much
work to be done.
Given that the United States is fighting to remain the world's
leader in wireless technology, can you commit that the Commission will
work to find additional opportunities for licensed spectrum to be made
available?
Answer. Yes. As the demand for wireless broadband increases, so
does the need for greater coverage and wireless network capacity. To
keep up with the growing demand the Commission is pursuing an ``all of
the above'' policy that relies on a balance of licensed, unlicensed,
and shared spectrum. Opening up spectrum and offering flexibility to
operators and innovators is the most important thing we can do to
enable the 5G revolution. The Further Notice of Proposed Rulemaking
that was adopted contemporaneously with the Report and Order seeks
comment on making an additional 18 gigahertz of licensed spectrum
available, on top of the 3.85 gigahertz made available in the Report
and Order.
Question 2. Chairman Wheeler, what efforts is the FCC currently
undertaking to ensure the expeditious deployment of wireless
infrastructure to support 5G service?
Answer. High-speed mobile broadband requires high-speed broadband
buildout. However, the regulatory burdens associated with deployments
can be expensive and time-consuming. Beginning in 2014, the Commission
has taken concrete steps to immediately and substantially ease those
burdens. The Commission adopted an Order that recognized a
technological revolution with regard to infrastructure deployment had
changed the landscape. Distributed Antenna Systems (DAS) networks and
other small-cell systems use components that are a fraction of the size
of larger, older antennas and towers and can be installed on utility
poles, buildings, and other existing structures. The Order excluded
certain types of these installations from review, and also directed
Commission staff to further streamline review of DAS and small cell
deployments within 18-24 months, which was done in late summer of this
year. The FCC also substantially reformed tower lighting and marking
requirements, which greatly eased compliance burdens for tower owners
without any adverse impact on aviation safety.
The success of 5G will hinge upon deploying more densified wireless
networks and promoting common-sense siting policies that are essential
for these new networks. The Commission is placing particular emphasis
on expanding access to spectrum, enabling backhaul connections, and
promoting infrastructure deployment. In August, as noted above, the FCC
took a critical step forward on the infrastructure front when our
nationwide programmatic agreement was amended, which has streamlined
the environmental and historic review process for many small cells. The
FCC has also tightened our ``shot clock'' for siting application
reviews. The Commission will continue working to eliminate unnecessary
infrastructure siting hurdles for small cells and to ensure that siting
review fees and processes at the local level are fair and reasonable.
Advances in technology require that the FCC not only act now to
pave the way to the next generation of wireless networks, but we must
also update our rules to facilitate the transition away from legacy
wired networks. Phone and Internet providers are increasingly replacing
their legacy copper networks with next-generation networks that enable
greater broadband speeds, efficiency, capacity, and a wealth of
innovate features. The Commission acted to ensure that providers can
move forward with these transitions efficiently while also ensuring
consumers and other customers have the information they need. The
Commission also established a streamlined process for reviewing
providers' applications to transition to next generation services while
ensuring that the enduring values of competition, consumer protection,
universal service, and public safety that have long defined our
networks remain protected.
______
Response to Written Question Submitted by Hon. Bill Nelson to
Hon. Tom Wheeler
Question. I have heard from my local broadcasters that Illegal
pirate radio stations have been a big problem in Florida. Importantly,
those broadcasters tell me that these pirate radio stations interfere
with the Emergency Alert System, which is incredibly important given
the natural disasters that can affect Florida. What are you doing to
address pirate radio stations, both in Florida and nationwide? Are you
able to use fines and equipment seizures to stop these broadcasts, or
do you need additional enforcement authority?
Answer. The FCC is committed to enforcement of the licensing
requirements of the Communications Act, which the Commission has
interpreted to prohibit unlicensed radio broadcasting. Last year, 20
percent of the Enforcement Bureau's activities were directed towards
pirate radio. That's more than any other area of enforcement. During FY
2015, the Enforcement Bureau issued 130 enforcement actions for pirate
operations. So far in FY 2016, the Enforcement Bureau has investigated
459 pirate operations, leading to: (1) 159 enforcement actions; (2) six
Notices of Apparent Liability for Forfeiture totaling $80,000; and (3)
four Forfeiture Orders totaling $55,000. Nearly 36 percent of those
pirate enforcement actions (57) have been against Florida pirates.
In addition to taking formal enforcement actions, the Commission is
also addressing the issue by working more closely with broadcasters and
raising public awareness about pirate radio. For example, in March of
this year, the Commission issued an Enforcement Advisory about pirate
radio and all five Commissioners signed letters addressed to local
officials as well as groups that may provide support, intentionally or
unintentionally, to pirate radio operations. The letters and
accompanying Enforcement Advisory explain the harms caused by pirate
radio and seek to enlist the assistance of local officials, landlords,
and advertisers in identifying pirates and depriving them of financial
support. The letters and Enforcement Advisory may be accessed on the
Commission website at: https://www.fcc.gov/document/enforcement-
advisory-unauthorized-radio-broadcasting.
Finally, you ask whether the Commission needs additional
enforcement authority to stop pirate broadcasters. As you note, the
Commission has authority under the Communications Act to issue fines.
We also have authority to work with the Department of Justice and, in
some cases, state or local authorities, to seize illegal communications
equipment, including pirate radio equipment. While this authority
allows us to take strong action against those who control pirate radio
operations, as we have previously stated, it would be helpful for
Congress to amend the Communications Act to create liability for
parties who aid or abet those operations. Creating clear legal
consequences for advertisers, DJs, landlords, and other parties who
provide material support to pirate operations would give the Commission
another effective tool to address this problem.
______
Response to Written Questions Submitted by Hon. Maria Cantwell to
Hon. Tom Wheeler
Question 1. Smart City market estimates show rapid growth in coming
years, and the number of Internet-connected devices in Smart Cities
alone is expected to grow from 1.2 million in 2015 to 3.3 billion in
2018. This aspect of our Internet economy is expected to grow from
almost $2 billion in 2015, to $147.5 billion by 2020.
I think we need to do everything possible to facilitate growth in
this space.
Given this rapid growth in Smart Cities technology, what is the
Commission doing now to usher in next-generation networks to meet
anticipated spectrum demands?
Answer. As the demand for wireless technologies increases, so does
the need for greater coverage and wireless network capacity. High-speed
mobile broadband requires high-speed broadband buildout. However, the
regulatory burdens associated with deployments can be expensive and
time-consuming. Beginning in 2014, the Commission has taken concrete
steps to immediately and substantially ease those burdens. The
Commission adopted an Order that recognized a technological revolution
with regard to infrastructure deployment had changed the landscape.
Distributed Antenna Systems (DAS) networks and other small-cell systems
use components that are a fraction of the size of larger, older
antennas and towers, and can be installed on utility poles, buildings,
and other existing structures. The Order excluded certain types of
these installations from review, and also directed Commission staff to
further streamline review of DAS and small cell deployments within 18-
24 months, which was done in late summer of this year. The FCC also
substantially reformed tower lighting and marking requirements, which
greatly eased compliance burdens for tower owners without any adverse
impact on aviation safety.
The success of 5G will hinge upon the deployment of more densified
wireless networks and promoting common-sense siting policies that are
essential for these new networks. The Commission is placing particular
emphasis on expanding access to spectrum, enabling backhaul
connections, and promoting infrastructure deployment. In August, the
FCC took a critical step forward on the infrastructure front when our
nationwide programmatic agreement was amended, which has streamlined
the environmental and historic review process for many small cells. The
FCC has also tightened our ``shot clock'' for siting application
reviews. The Commission will continue working to eliminate unnecessary
infrastructure siting hurdles for small cells and to ensure that siting
review fees and processes at the local level are fair and reasonable.
Advances in technology require that the FCC not only act now to
pave the way to the next generation of wireless networks, but also
update our rules to facilitate the transition away from legacy wired
networks. Phone and Internet providers are increasingly replacing their
legacy copper networks with next-generation networks that enable
greater broadband speeds, efficiency, capacity, and a wealth of
innovative features. In recent years, the FCC has acted on numerous
occasions to facilitate this transition, while preserving enduring
values that have long defined our networks: competition, consumer
protection, universal service, and public safety.
Question 2. Some members of the content community are worried their
property interests won't be protected under the set top box proposals
out there.
The Copyright Office has also expressed concerns. And given the
complexity and the varying stakeholder interests, is the agency
coordinating with the Copyright Office to understand and address these
concerns?
Answer. The United States Copyright Office and other parties
representing content owners expressed concern that the ``three
information flows'' approach we proposed in the NPRM would allow third
parties to interfere with the licensing agreements that programmers
negotiate with multichannel video distributors (MVPDs). In response to
these concerns, the Order on circulation employs an ``apps-based''
approach to the delivery of MVPD programming. Under this approach,
which both the MVPDs and programmers supported during the rulemaking,
all MVPD content will be delivered to consumers through an MVPD-
controlled software application, ensuring that the terms of programming
license agreements remain in place. As we carry out Congress's command
to promote innovation and competition in the navigation device
marketplace, we do not intend to (nor could we) change the rights and
remedies available to copyright holders, or the defenses and penalties
applicable in cases of copyright infringement.
My staff has reached out to the Copyright Office on multiple
occasions.
Question 3. I'm interested in providing consumers maximum privacy
protections and promoting the continued growth of our innovation
economy. Many Internet economy business models are built on the
monetization of information from and about consumers.
Moreover, this model is not new. In many sectors, consumers have
gotten ``free'' services in exchange for their willingness to be
exposed to marketing material. For example, consumers get free over the
air television in exchange for watching ads-also known as the ``eyeball
model.'' It's worked in the past, and can going forward.
I'm confident we can have both strong consumer protections and a
robust, innovative Internet economy that leverages consumer info.
Before we take steps that could upset that balance, I'm interested in
seeing available data revealing how these changes could impact this
important sector of our economy. Stakeholders in these proceedings have
made many assertions about consumer behavior in ``opt-in'' vs. ``opt-
out'' privacy frameworks.
What information do we have about these critical issues? Should we
be studying them?
Answer. The Commission recently adopted a harmonized set of privacy
and data security rules for Internet service providers (ISPs) and other
providers of telecommunications services. These rules give consumers
the tools they need to make informed choices about their ISPs' use and
sharing of their personal data, as well as confidence that the data is
being kept secure. The focal point of the rules is customer control:
ISPs can use their customers' individual data in innovative ways with
customer approval. The methods for getting customer approval--``opt-
in'' and ``opt-out''--are designed to track customer expectations.
Subject to certain exceptions, under these new rules, if an ISP wants
to use individually identifiable sensitive customer data it must first
receive opt-in consent from the customer. Where the data is not
sensitive, the customer's ongoing ability to opt-out is sufficient.
Also, the rules permit ISPs to use customer data that they have
properly de-identified outside of the consent regime, opening up
another path for innovation. The record in the broadband privacy
proceeding demonstrates that the rules the Commission adopted are
consistent with current ISP practices.
The rules take a cautious, incremental approach on ``pay-for-
privacy'' arrangements, i.e., where a provider offers a discount or
other incentive in exchange for consent to use or share personal
information. We prohibit ISPs from conditioning the provision of
service altogether on a customer's surrender of personal data. But we
otherwise permit pay-for-privacy deals, subject to heightened
disclosure requirements. We will continue to monitor these kinds of
arrangements as they develop, and we stand ready to take action where
necessary to guard against predatory or coercive pricing schemes. This
case-by-case approach will permit continued innovation in this dynamic
area while protecting consumers against practices that vitiate their
privacy rights.
Question 4. I am concerned about creating a dual-privacy regime in
the Internet ecosystem. Is there value in coordinating with the FTC on
privacy issues relating to consumer Internet use, and if so, what
actions could the agency take? Are there steps we could take to
facilitate better coordination?
Answer. There is great value in having the FCC and FTC coordinate
on privacy issues. The two agencies have worked together on privacy and
other consumer protection issues for a very long time. Earlier this
year, the Commission and the FTC entered into an updated consumer
protection Memorandum of Understanding (MOU). In the MOU, each agency
recognized the others' expertise and agreed to coordinate and consult
on areas of mutual interest. An FTC manager co-moderated one of the
panels at the workshop we held to begin our exploration of broadband
privacy. The FTC filed constructive comments in the proceeding, which
informed virtually all aspects of the rules we ultimately adopted.
Additionally, the FCC has looked to the good work that the FTC has done
throughout the broadband privacy rulemaking proceeding. The FCC looks
forward to continuing to work with the FTC on this important issue.
We view the FTC's and FCC's roles in this area as complementary.
The FTC, through its enforcement mandate under Section 5 of the FTC
Act, has demonstrated great leadership in the area of protecting the
privacy of consumers by addressing unfair or deceptive acts or
practices. As the expert agency on communications policy issues, the
FCC is well positioned to ensure consumers have the right level of
control over personal information that ISPs obtain through their unique
role as ``on-ramps'' to the Internet.
Question 5. There are many parts of rural America that have poor or
nonexistent broadband connections. It seems to me that that solving the
rural broadband problem is like putting together a puzzle.
The pieces of the puzzle include smart planning, a regulatory
regime that promotes deployment, adequate Federal and state funding and
private investment--all those pieces must fit for ubiquitous coverage.
The FCC's Business Data Services proceeding impacts the private
investment part of the puzzle. I want to ensure that as we examine this
problem, we keep in mind the rural broadband development piece.
Do you have any concerns about the impact of this rulemaking on
rural broadband access? How would rural economic development, jobs, and
anchor institutions be affected if the BDS regulations made rural
investments uneconomical?
Answer. Business data services (BDS) play an important role in the
day-to-day life of consumers, business, and industry, and are integral
to the competitiveness of the U.S. economy as a whole in the
information age. Earlier this year we sought broad public comment on
reforming and modernizing the existing, fragmented regulatory BDS
structure with a new framework. It is worth noting that the reform
being considered is focused on areas served by incumbent local exchange
carriers (LECs) regulated pursuant to price cap regulation, and not the
rural areas served by rate-of-return LECs. My goal is to maximize the
benefits of business data services for U.S. consumers and businesses,
including those in rural areas. I fully agree that maintaining
incentives to invest--both by BDS providers and by their customers--is
paramount.
In early October, I circulated to my fellow Commissioners proposed
rules to reform the regulatory regime for BDS to promote fairness,
competition, and network investment in this important marketplace. The
circulated Order provides a new framework that strikes a balance
between targeted regulation for lower-bandwidth legacy services, where
evidence of market power is strongest, and lighter-touch regulation for
packet-based services, where there has been new entry and competition
may be emerging. The proposed Order is grounded in the comprehensive
record of this proceeding, including careful review of the
sophisticated economic analyses presented by multiple parties as well
as other record evidence. As we work to achieve these important goals,
we take into careful consideration the impacts various forms of
regulation would have in the markets that utilize BDS, and we also pay
particular attention to impacts any potential regulations may have in
rural areas.
______
Response to Written Questions Submitted by Hon. Claire McCaskill to
Hon. Tom Wheeler
Question 1. This is an issue I have raised with you in the past but
I want to revisit it because there have been development that I don't
think most people are aware of. Between September 2013 and February
2014, the FCC issued Notices of Apparent Liability (NALs) proposing $94
million in fines against 12 companies, touting them in press releases
and notices to Capitol Hill as cracking down on waste, fraud and abuse
in the Lifeline program. We know that in the spring of 2015, the
Department of Justice successfully prosecuted one of those companies,
Icon Telecom, for inflating its subscriber numbers, securing a 48-month
sentence for the owner and recovering more than $20 million. Setting
that example aside, which the FCC Office of Inspector General referred
to DOJ for action, to date there has been no public announcement of
further action on these 12 cases. What is the current status of each
these cases?
Answer. The Commission's Enforcement Bureau (EB) issued the 12
Notices of Apparent Liability (NALs) you reference based on data from
In-Depth Data Validation (IDV) audits. On November 16, 2015, EB
referred the 12 cases to its Office of Inspector General (OIG) to avoid
duplication of efforts, prevent adverse effects on parallel OIG
investigations, and ensure efficient use of Commission resources. After
referring these cases, EB closed these matters. We were informed by
letter that the Inspector General (IG) found no waste, fraud, or abuse
in six of the cases that he was investigating. He also found that the
USF had been fully repaid in those six cases. The IG's decision is
final and those six matters are now closed. We will not take further
action on these matters. Even though the IG found no waste, fraud, and
abuse in those cases, we will continue to keep a close eye on others
participating in the program to ensure they comply with the Lifeline
rules. We have also taken a number of steps to increase oversight of
the program in recent months and will continue to make certain that
taxpayer dollars are well spent.
We understand that the other six matters remain with the IG.
Question 2. It sounds like changes will be made to the broadband
privacy rule before it is finalized, and I look forward to learning
more about that. One thing of great importance to me is cracking down
on robocalls. Concerns have been raised over Paragraph 108 of the NPRM,
which asks whether we should ``harmonize'' the broadband privacy rules
with traditional voice rules, and thus require opt-in consent for third
parties to use data. Those who are working on robocall and call
spoofing solutions tell me they need access to the information (name
and phone number) they have today on an opt-out basis to be effective.
Can you assure me that any final action on the privacy rule will
continue to allow opt-out consent for important services like Caller ID
and enhanced Caller ID to fight spoofed robocalls, and will otherwise
do nothing to hinder the use of existing or future technologies to
fight robocalls?
Answer. I agree with you about the importance of cracking down on
robocalls. The broadband privacy rules the FCC recently adopted include
measures to aid in addressing this pressing concern. Specifically,
there is an exception that permits a carrier to use or share customer
data without the customer's approval where necessary to protect against
fraudulent, abusive, or unlawful practices. Efforts to combat unlawful
robocalling would fall within this exception.
______
Response to Written Question Submitted by Hon. Amy Klobuchar to
Hon. Tom Wheeler
Question. The Internet has revolutionized access to news and
information and upended the newspaper industry. No one would argue that
that the media landscape today is the same as when the Commission
adopted the media cross-ownership rules in 1975. In 2014, the
Commission proposed significant changes to the cross-ownership bans
involving newspapers, but the order that was finally adopted left them
essentially unchanged.
Chairman Wheeler, what did you see in the record that convinced you
the current rules are still appropriate?
Answer. The media ownership rules adopted in the recently concluded
proceeding were based on a comprehensive, refreshed record that
reflects the most current evidence regarding the media marketplace.
With respect to the Newspaper/Broadcast Cross-Ownership (NBCO) Rule,
the record demonstrates the continuing role of newspapers and broadcast
stations as the primary producers of original local news and public
interest programming. Accordingly, the Commission concluded that
regulation of newspaper/broadcast cross-ownership within a local market
remains necessary to protect and promote viewpoint diversity.
With that said, the Commission did revise the NBCO Rule to provide
for a modest loosening of the previous ban on cross-ownership. The
modifications include: (1) modifying the rule to update its analog
parameters to reflect the transition to digital television; (2) in
order to focus the application of the rule more precisely on the areas
served by broadcast stations and newspapers, revising the trigger of
the NBCO Rule to consider both the contour of the television or radio
station involved, and whether the station and the newspaper are located
in the same Nielsen DMA or Audio Market (if any); (3) in recognition of
the fact that a proposed merger involving a failed or failing entity
does not present a significant risk to viewpoint diversity, adopting an
explicit exception to the NBCO Rule for proposed mergers involving a
failed or failing broadcast station or newspaper; and (4) considering
requests for waiver of the NBCO Rule on a case-by-case basis and
granting relief from the rule if the applicants can show that the
proposed merger will not unduly harm viewpoint diversity in the market.
______
Response to Written Questions Submitted by Hon. Brian Schatz to
Hon. Tom Wheeler
Question 1. The FCC did not prohibit zero rating practices as part
of the Open Internet Order but I understand that you have been keeping
an eye on new developments related to this practice.
On one hand zero rating can provide some great opportunities for
consumers. On the other hand, it might be tough to align zero rating
practices with the principles the FCC adopted in the Open Internet
Order--namely that everyone should have access to a free and open
Internet.
Can you provide an update on the status of your examination of
these practices? How are you balancing the value these plans could have
for consumers with the principles set forth in the Open Internet Order?
Answer. The Commission's informal policy review is ongoing.
Commission staff continues to watch and learn. In some cases, these
offerings continue to evolve since first announced. For instance, T-
Mobile has made significant changes to Binge On since it was first
released late last year (including allowing video providers to opt-
out). T-Mobile also recently introduced a new pricing model (i.e., the
``One'' unlimited plan that is targeted at the new iPhone7 launch) that
incorporates some portions of the original Binge On model but not
others. And T-Mobile has made material changes to that pricing model
since its initial rollout.
This fluid situation with T-Mobile illustrates the value of the
Commission's case-by-case review laid out by the Open Internet rules.
As the market continues to evolve and innovate, the Commission will
watch carefully and work through the public interest considerations. We
want to be sure to give ample time for thoughtful conversations with
the carriers, experts, and other stakeholders. Needless to say, we want
to get this right--and that takes time.
As part of this ongoing review, the Wireless Telecommunications
Bureau recently sent AT&T a letter expressing serious concerns about
the impact of its ``Sponsored Data'' program on competition for mobile
video services and asking AT&T to address those concerns forthwith. In
its letter, the Bureau reiterated that its concerns are not with zero-
rating per se, but with the specific impact of AT&T's zero-rating
practice on competition, as implemented through the terms and
conditions of its Sponsored Data program.
Question 2. Due to Hawaii's unique geography, it is particularly
challenging for broadband service providers to deploy and maintain a
state of the art network in the state. This is particularly true for
providers in the state who are trying to expand their networks to
provide services to the most remote areas. For this reason, I believe
that the FCC should take extra care to ensure that the Business Data
Services (BDS) investments in the rural areas of our state are not
inadvertently disrupted by the FCC's Business Data Services proposals.
What steps are you taking to ensure that the proposed rules will not
inadvertently negatively impact network investment in Hawaii?
Answer. Business data services (BDS) play an important role in the
day-to-day life of consumers, business, and industry, and are integral
to the competitiveness of the U.S. economy as a whole in the
information age. Earlier this year we sought broad public comment on
reforming and modernizing the existing, fragmented regulatory BDS
structure with a new framework. My goal is to maximize the benefits of
business data services for U.S. consumers and businesses, including
those in rural areas, such as remote areas of Hawaii. I fully agree
that maintaining incentives to invest--both by BDS providers and by
their customers--is paramount.
In early October, I circulated to my fellow Commissioners proposed
rules to reform the regulatory regime for BDS to promote fairness,
competition, and network investment in this important marketplace. The
circulated Order provides a new framework that strikes a balance
between targeted regulation for lower-bandwidth legacy services, where
evidence of market power is strongest, and lighter-touch regulation for
packet-based services, where there has been new entry and competition
may be emerging. The proposed Order is grounded in the comprehensive
record of this proceeding, including careful review of the
sophisticated economic analyses presented by multiple parties as well
as other record evidence, including developments since the 2013 data
collection. As we work to achieve these important goals, we take into
careful consideration the impacts various forms of regulation would
have in the markets that utilize BDS, and we also pay particular
attention to impacts any potential regulations may have in rural areas.
Please note that Hawaiian Telcom provides DS1 and DS3, which are
lower-bandwidth legacy services, under price caps. The rates for these
services were initially based on the costs Hawaiian Telcom's
predecessor--Verizon Hawaii--incurred in providing business data
services, and thus reflected the specific costs of providing business
data services in Hawaii. While the circulated Order provides for
reductions in these rates, in the event such reductions are
inconsistent with the actual costs of serving a rural area, providers
such as Hawaiian Telcom will have the option of making a tariff filing
accompanied by cost data showing that higher rates are warranted, which
the Commission would carefully review and consider.
______
Response to Written Question Submitted by Hon. Edward Markey to
Hon. Tom Wheeler
Question. Do Stingrays and related surveillance products cause
harmful interference to consumer cellular networks, in particular to
911 access? To what extent has the FCC examined the issue of
interference in regards to law enforcement practices with wireless
surveillance technology?
Answer. The FCC remains committed to protecting the integrity of
the Nation's communications and to ensuring that use of equipment by
all parties complies with U.S. law and FCC regulations. As you know,
regulatory responsibility for the radio spectrum is divided between the
FCC and the National Telecommunications and Information Administration
(NTIA). NTIA administers spectrum and transmitter authorization for
Federal use. Given this divided responsibility, we have engaged in
discussions with our Federal partners regarding the deployment and use
of cell site simulators (CSS) through the internal FCC task force on
CSS that I established in 2014. The Commission's CSS equipment
authorizations expressly contemplated that the use of equipment by
state and local law enforcement would be under the auspices of the FBI.
To date, we are not aware of any substantiated reports of disruption of
cell phone calls by CSS devices. In addition, we understand that the
equipment includes the capability to recognize and release 911 calls.
______
Response to Written Questions Submitted by Hon. Cory Booker to
Hon. Tom Wheeler
Question 1. As you know, the state of New Jersey does not have a
designated market area despite being one of the most densely populated
states in the Nation. To alleviate the lack of local coverage, WWOR is
required to ``devote itself to meeting the special needs of its new
community (and the needs of the Northern New Jersey area in general).''
However, there is a longstanding dispute in front of the FCC on whether
WWOR is fulfilling its special obligation.
In connection with its petition to deny the renewal of WWOR's
station license, Voice for New Jersey submitted substantial evidence
that the station is not fulfilling its obligations to its community of
license. The evidence included a detailed review and analysis of the
station's programming over a representative (2 week) period, an
analysis of five quarters of Issues and Programming reports filed by
WWOR which indicated that the station provided an average of only about
two minutes per day of New Jersey news, and a study by The Eagleton
Institute of Politics at Rutgers University which concluded that WWOR
``barely covered'' local and state elections.
When determining whether a station renewal is in the public
interest, what weight is typically given to information given by
private citizens?
When determining whether to renew a station's license, what
evidence does the FCC typically look for to determine whether the
renewal is in the public interest?
When determining whether to review a determination by the Media
Bureau, what criteria does the FCC typically use in determining whether
there is a substantial question of fact as to whether renewal of the
station license is in the public interest?
Answer. The Commission's consideration of the application for the
renewal of the license for station WWOR-TV is an ongoing proceeding and
requires the agency's consideration of outstanding applications for
review and responsive pleadings. Under these circumstances, our
responses below are intended to provide an overview of the statutory
considerations that govern the Commission's review of broadcast renewal
applications in general and do not address the specific issues in the
WWOR proceeding. In addition, because that proceeding has been declared
permit-but-disclose pursuant to our ex parte rules (47 C.F.R.
Sec. 1.1206), we are placing a copy of this response in the public
docket of that proceeding (MB Docket No. 07-260).
In determining whether to grant an application for renewal of a
broadcast license, under Section 309(k)(1) of the Communications Act,
the Commission considers whether, during the preceding term of that
station's license:
(A) the station has served the public interest, convenience, and
necessity;
(B) there have been no serious violations of the Communications Act
or the rules and regulations of the Commission; and
(C) there have been no other violations by the licensee of the
Communications Act or the rules and regulations of the
Commission, which, taken together, would constitute a pattern
of abuse.
If a petition to deny has been filed against a broadcast renewal
application, the Commission (or the Media Bureau, on delegated
authority) reviews the petition pursuant to Section 309(d) of the Act
to determine whether it contains ``specific allegations of fact
sufficient to show . . . that a grant of the application would be prima
facie inconsistent with'' the factors contained in Section 309(k)(1)
noted above. If a prima facie case is established, pursuant to Section
309(e), the Commission examines the record to determine whether a
``substantial and material question of fact is presented'' warranting
further inquiry in a hearing.
In determining whether there is a substantial and material question
of fact, the Commission looks at the totality of the record, including
evidence submitted by petitioners, the responsive pleadings filed by
the station and others, the station's renewal application, the
station's public file, and any information produced in response to
inquiries from the agency. The facts adduced are then evaluated in
accordance with Commission precedent. Following this review, if the
Commission finds that a substantial and material question of fact
exists as to whether renewal of the license is in the public interest,
it will designate the renewal application for hearing before an
administrative law judge. If it finds that there are no substantial and
material questions of fact and that grant of the application would be
consistent with Section 309(k)(1), the Commission will grant the
application, although, depending on the facts before it, it may impose
conditions on the grant.
The appropriate vehicle for a party to seek Commission review of an
action on delegated authority by the Media Bureau is the filing of an
application for review. A party seeking such review must demonstrate in
its pleading the existence of at least one of the factors set out in 47
C.F.R. Sec. 1.115(b)(2), namely that the Bureau's action: (1) conflicts
with statute, regulation, precedent, or established Commission policy;
(2) involves a question of law not previously resolved by the
Commission; (3) involves application of a precedent or policy which
should be overturned; (4) involves an erroneous finding as to an
important or material question of fact; or (5) involves a prejudicial
procedural error.
Question 2. Chairman Wheeler, I applaud your efforts to move the
country toward adopting 5G networks. It is critical for U.S. innovation
that we lead the way in 5G deployment. What is the FCC doing to meet
the speed and bandwidth requirements of 5G networks through wired
backhaul services, and what further steps need to be taken to make sure
wired networks do not limit continued wireless innovation?
Answer. As the demand for wireless technologies increases, so does
the need for greater coverage and wireless network capacity. High-speed
mobile broadband requires high-speed broadband buildout. However, the
regulatory burdens associated with deployments can be expensive and
time-consuming. Beginning in 2014, the Commission has taken concrete
steps to immediately and substantially ease those burdens. The
Commission adopted an Order that recognized a technological revolution
with regard to infrastructure deployment had changed the landscape.
Distributed Antenna Systems (DAS) networks and other small-cell systems
use components that are a fraction of the size of larger, older
antennas and towers and can be installed on utility poles, buildings,
and other existing structures. The Order excluded certain types of
installations from review, and also directed Commission staff to
further streamline review of DAS and small cell deployments within 18-
24 months, which was done in late summer of this year. The FCC also
substantially reformed tower lighting and marking requirements, which
greatly eased compliance burdens for tower owners without any adverse
impact on aviation safety.
The success of 5G will hinge upon deploying more densified wireless
networks and promoting common-sense siting policies that are essential
for these new networks. The Commission is placing particular emphasis
on expanding access to spectrum, enabling backhaul connections, and
promoting infrastructure deployment. In August, as noted above, the FCC
took a critical step forward on the infrastructure front when our
nationwide programmatic agreement was amended, which has streamlined
the environmental and historic review process for many small cells. The
FCC has also tightened our ``shot clock'' for siting application
reviews. The Commission will continue working to eliminate unnecessary
infrastructure siting hurdles for small cells and to ensure that siting
review fees and processes at the local level are fair and reasonable.
In addition, the FCC has adopted rules aimed at providing that both
wireless and wired providers of telecommunications services, including
wireless services and wired backhaul services, have nondiscriminatory
access to utility poles, ducts, conduits, and rights-of-way on rates,
terms, and conditions that are just and reasonable.
Advances in technology require that the FCC not only act now to
pave the way to the next generation of wireless networks, but we must
also update our rules to facilitate the transition away from legacy
wired networks. Phone and Internet providers are increasingly replacing
their legacy copper networks with next-generation networks that enable
greater broadband speeds, efficiency, capacity, and a wealth of
innovative features. The Commission acted to ensure that providers can
move forward with these transitions efficiently while also ensuring
consumers and other customers have the information they need. The
Commission also established a streamlined process for reviewing
providers' applications to transition to next generation services while
ensuring that the enduring values of competition, consumer protection,
universal service, and public safety that have long defined our
networks remain protected. Additionally, in the Business Data Services
(BDS) proceeding, the Chairman recently circulated an order proposing
actions that would support rapid deployment of innovative 5G mobile
service by ensuring that wireless providers have fair access to BDS at
just and reasonable rates, terms, and conditions. By preserving a light
regulatory touch, we will encourage continued investment in high-speed
Ethernet facilities that will be essential to 5G.
Question 3. Is the U.S. keeping pace with other nations in moving
forward with 5G?
Answer. 5G is a national priority, and we are the first country to
establish the regulatory framework for making high-frequency spectrum
available for new 5G services. The Spectrum Frontiers Report and Order
repeats the proven formula that made the United States the world leader
in 4G: (1) make a large amount of spectrum available quickly; (2)
protect and preserve competition through the adoption of pro-
competitive policies; and (3) adopt a flexible, technology-neutral
framework that enables operators to innovate and serve the needs of
consumers. Opening up spectrum and offering flexibility to operators
and innovators is the most important thing we can do to enable the 5G
revolution. Some other countries have adopted a different, top-down
approach to 5G, which involves studying what 5G should be and how it
should operate and then determining how to allocate spectrum based on
those assumptions. We believe it is better to make the spectrum
available on a flexible basis and then get out of the way.
Question 4. There appear to be a substantial number of illegal
``pirate'' radio operations in certain regions of the United States
today. For example, the New York State Broadcasters Association (NYSBA)
believes they have identified 76 illegal radio stations operating in
Northern New Jersey and in New York City. What steps is the Commission
taking to enforce its rules against illegal radio broadcasting?
Answer. The FCC is committed to enforcement of the licensing
requirements of the Communications Act, which the Commission has
interpreted to prohibit unlicensed radio broadcasting. Last year, 20
percent of the Enforcement Bureau's activities were directed towards
pirate radio. That's more than any other area of enforcement. During FY
2015, the Enforcement Bureau issued 130 enforcement actions for pirate
operations. More than half of those actions were in the New York/New
Jersey area. So far in FY 2016, the Enforcement Bureau has investigated
459 pirate operations, leading to: (1) 159 enforcement actions; (2) six
Notices of Apparent Liability for Forfeiture totaling $80,000; and (3)
four Forfeiture Orders totaling $55,000. Nearly 50 percent of these
enforcement actions (74) have been against New York/New Jersey-area
pirates.
In addition to taking formal enforcement actions, the Commission is
also addressing the issue by working more closely with broadcasters and
raising public awareness about pirate radio. For example, in March of
this year, the Commission issued an Enforcement Advisory about pirate
radio and all five Commissioners signed letters addressed to local
officials as well as groups that may provide support, intentionally or
unintentionally, to pirate radio operations. The letters and
accompanying Enforcement Advisory explain the harms caused by pirate
radio and seek to enlist the assistance of local officials, landlords,
and advertisers in identifying pirates and depriving them of financial
support. The letters and Enforcement Advisory may be accessed on the
Commission website at: https://www.fcc.gov/document/enforcement-
advisory-unauthorized-radio-broadcasting.
Question 5. I understand that public television stations, the NAB
and the Consumer Technology Association have filed a petition at the
FCC, seeking approval to offer Next Generation TV--an exciting new
optional standard that among other innovations will provide a robust
emergency broadcast capabilities and the ability to provide more in-
depth news to viewers. I know from experience that when my constituents
dealt with Super Storm Sandy or more recently Hermine, they turned to
their local broadcasters for news and updates. I am pleased with the
increased emergency information that will be available to them with
this new standard.
Mr. Chairman, what is the status of this petition and do you think
it will be addressed by the end of this year?
Answer. The Media Bureau issued a Public Notice seeking comment on
the ATSC 3.0 Petition on April 26, 2016, and the comment period closed
on June 27, 2016.
Commission staff is reviewing the record and engaging with industry
representatives on this topic. Specifically, the Media Bureau and the
Office of Engineering and Technology are actively considering the
issues that should be raised in an NPRM proposing to authorize the ATSC
3.0 broadcast standard. We seek to support broadcasters' innovation
while ensuring that consumers who are not yet equipped for this change
can continue to receive the same level of TV service they have come to
expect.
The record raises a number of complex issues. Although the benefits
of ATSC 3.0 may be great, the transition to this broadcast transmission
standard comes with considerable technical and logistical challenges,
costs, and some risks to the many stakeholders involved, including
consumers. A forthcoming NPRM will carefully study the balance between
advancing broadcast technology that brings new features and
opportunities to broadcasters and their viewers and ensuring the
continuity and quality of broadcast service to all Americans.
Question 6. Broadcasters in my state and across the country have
advocated for the installation of FM chips in cell phones to better
enable communications during emergencies. What impact would enabling FM
chips have on emergency communications and consumers' ability to access
information when it's needed most? Should this be a requirement across
the mobile industry?
Answer. One of the Commission's highest priorities is to ensure
that all Americans can receive timely and accurate alerts, warnings,
and critical information regarding disasters and other emergencies,
irrespective of what communications technologies they use. This
capability is essential to ensure that Americans can take appropriate
action to protect their families and themselves.
FM chip sets can provide important benefits to consumers. I
understand that there are already an increasing number of phones that
include them and at least one major carrier has embraced the technology
by providing FM radio access to its customers. The question of whether
activation of these chips should be mandated or based on consumer
choice appears to be resolving itself in the marketplace.
Question 7. This summer the FCC's spectrum incentive auction began
and seems to be falling short of predicted revenues. What is the
Commission's plan to ensure this process moves forward smoothly and
yields enough revenue to relocate broadcasters? Please provide an
update of next steps in the auction process.
Answer. The Broadcast Incentive Auction is a voluntary, market-
based means of repurposing spectrum. The reverse and forward auctions
are integrated in a series of stages, with the auction proceeding to a
new stage if the final stage rule is not met at the close of the
forward auction in the preceding stage.
The Incentive Auction recently concluded the second stage of the
auction. Bidding in the reverse auction concluded with a 37 percent
reduction in broadcaster clearing costs. Although the final stage rule
was not met during Stage 2, the auction continues to work as designed
to find the market equilibrium between the supply of spectrum offered
by broadcasters and the demand of wireless providers. The auction is a
market-based mechanism for matching supply with demand. The Commission
intentionally designed the auction to account for the possibility that
supply and demand might not match at the initial clearing target.
Conducting multiple stages to align supply and demand is something we
planned for.
Stage 3--which will attempt to clear 108 megahertz for wireless
use--began with bidding in the reverse auction on Nov. 1. If the
revenues from Stage 3 of the forward auction meet or exceed the
clearing costs from the reverse auction plus $1.75 billion for the
broadcaster relocation reimbursement fund and the Commission's
estimated $207 million in administrative costs for the auction, then
the Incentive Auction will close. If not, then the Commission will
calculate the next lowest clearing target and resume reverse auction
bidding.
______
Response to Written Questions Submitted by Hon. Joe Manchin to
Hon. Tom Wheeler
Question 1. In 2011, the Commission (Federal Communications
Commission) voted to expand rural broadband access by modernizing the
Universal Service Fund. West Virginia had one of the lowest rates of
broadband service in the Nation then, and in 2016 that is unfortunately
where we remain. The job of bringing broadband access throughout my
state is far from done. A critical part of delivering on the universal
service mandate is moving forward on the next phase of the Mobility
Fund.
Last year, I wrote the Commission to highlight the real
communications challenges that remain in rural America. The fact is
that tens of thousands of West Virginians and millions of Americans
living in rural communities still do not have access to reliable
advanced wireless services. We cannot leave rural America behind. I
also led a letter with Senator Gardner and six members of this
committee on the importance of getting an accurate measure of mobile
broadband coverage in our states.
In that letter, we noted that the agency has previously indicated
that 99.9 percent of Americans live in an area that has access to some
wireless service. The reality in our states is far different than what
the maps indicated. Unfortunately, significant gaps in mobile broadband
coverage still exist in West Virginia and across rural America today.
Inaccurate data has failed rural and remote communities across this
country.
Therefore, I worked with my colleagues on the Committee on two
provisions aimed at helping the FCC better understand the reality of
mobile broadband coverage across our states. The first would explore
the viability of conducting drive testing in rural areas to map where
coverage exists, and, even more importantly, where it still needs to be
delivered. The second would take an in-depth look at whether additional
mobile coverage data should be collected from additional, or
alternative, sources.
The Commission previously acknowledged that there are limitations
in current data from reporting coverage data with reliable accuracy.
What steps is the Commission currently taking to address these
limitations?
Answer. In the past, the Commission has confronted several
challenges in our attempts to measure coverage in a way that matches up
with consumers' real-world experiences. The biggest of these challenges
involved the process of reliable data collection. For the past several
years, the Commission relied on data that came from states via the
National Telecommunications Information Administration--data that was
used in the National Broadband Map--and third party commercial vendors.
For a variety of reasons, the data collected by the states and third
party commercial vendors did not always accurately reflect the real
world experiences of consumers, including your constituents.
Recognizing the need to improve our mobile coverage data, in 2013
the Commission took a significant step forward in its Modernizing the
FCC Form 477 Data Program Order, which substantially revised and
enhanced its collection of mobile voice and broadband coverage data.\1\
The scope and nature of the new Form 477 data on mobile services
coverage is an improvement over earlier data sources in certain key
respects, such as the uniformity of data reporting. As a result, the
Commission is now collecting coverage data directly from wireless
carriers through the Commission's Form 477. We expect the data that the
wireless carriers provide through their Form 477 submissions will be
more accurate than previous data because it comes directly from the
entity that is deploying the wireless facilities and is certified by
the carriers to be an accurate reflection of their coverage.
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\1\ See Modernizing the FCC Form 477 Data Program, Report and
Order, 28 FCC Rcd 9887 (2013) (477 Report & Order). Also see Form 477
PN 2016.
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In addition, in the context of providing for ongoing support for
mobile broadband service, we intend to provide a process to consider
stakeholders' challenges to ensure accurate decisions on the
eligibility of particular areas. Finally, the Commission remains open
to working with stakeholders regarding additional data sources,
including new third party sources, and methods that we can employ to
obtain more reliable information on mobile broadband coverage.
Question 2. I applaud the Commission's continued efforts to promote
competition in the set-top box marketplace. Getting rid of set-top
boxes in favor of an ``apps-based'' approach should reduce direct
consumer costs. But innovations available to urban and suburban
consumers should be available to rural consumers as well. And I remain
concerned about the West Virginians who still do not have access to
affordable, reliable broadband service--or do not have broadband
service at all. These West Virginians may be forced to keep a set-top
box in their households.
For these rural consumers, do you believe this proposal will meet
the Communications Act's mandate to assure the commercial availability
of competitive devices?
Answer. During my recent trip to West Virginia, you and I spoke
extensively about the challenges your constituents face regarding
connectivity, so I understand your concerns. As we discussed, we will
continue to do everything we can to address the broadband connectivity
challenges those constituents are experiencing.
With respect to your concern, the cable and satellite TV industries
have assured the Commission that they are able to provide a pay-TV app
without a broadband connection.
In addition, the Order on circulation would maintain in the near
term the CableCARD support requirements to ensure a retail marketplace
for navigation devices such as TiVo, ensuring that consumers who choose
a non-MVPD provided device today will continue to be able to use their
devices.
Question 3. Consumers today are increasingly using their mobile
devices are part of their everyday lives. The 2016 Broadband Progress
Report found that fixed and mobile broadband are not functional
substitutes for one another--they are both essential components of our
lives today. I commend the Commission's recognition of the importance
of allowing different technologies to compete to bring reliable
broadband access to every home and business throughout the Nation. And
I strongly support that goal and the Commission's work to ensure
America continues to lead the next generation of wireless services,
which will require an increasing amount of high-capacity backhaul.
Could you explain how increasing competition would affect the
significant investment required to build out robust wireless networks
in rural areas?
Answer. Advanced broadband networks are a key driver of economic
and social activity today, connecting consumers across the country to
one another and to new job opportunities, education enrichment, and
health care services. This is particularly true for small and rural
communities, and every American, no matter where they live. Spectrum is
a critical input in the provision of competitively provided mobile
wireless services, and in recent years the Commission has made
substantially more spectrum available and has ensured that our policies
and rules facilitate access to spectrum in a manner that promotes
competition. For example, prior to the currently ongoing Incentive
Auction, the Commission took steps to reserve certain amounts of low-
band spectrum. To promote competition, the reserve was established for
nationwide providers that lacked such spectrum, as well as for non-
nationwide providers irrespective of their low-band holdings.
Consistent with our established policy to promote variety in licensees
and to promote access to spectrum and facilitate capital formation for
entities seeking to serve rural areas or improve service in rural
areas, non-nationwide service providers were deemed eligible to bid on
reserved spectrum in all markets nationwide. The Commission is
committed to ensuring that all Americans, including those living and
working in rural areas, have access to robust mobile broadband networks
that are increasingly essential for full participation in today's
society and economy.
______
Response to Written Questions Submitted by Hon. John Thune to
Hon. Jessica Rosenworcel
Question 1. As part of the Spectrum Frontiers Order, the FCC made
available nearly 11 GHz of spectrum, but less than 4 GHz of that will
be made available on a licensed basis. And a portion of that licensed
spectrum will be allocated on a shared basis.
A. I believe that there should be a balance between licensed and
unlicensed spectrum. Does this Order strike the proper balance? If so,
please explain why.
Answer. Yes. Unlicensed spectrum supports Wi-Fi, which has helped
democratize Internet access. Unlicensed spectrum also helps wireless
carriers manage their networks. To this end, more than half of all
wireless data connections are offloaded at some point onto unlicensed
airwaves. Moreover, unlicensed spectrum is a launching pad for wireless
innovation--and a vital part of the emerging Internet of Things. Plus,
unlicensed spectrum has a powerful bottom line--it contributes more
than $140 billion to our economy annually. For all of these reasons, we
need spectrum policies that have a role for both licensed and
unlicensed spectrum--just as you suggest. I believe the Commission
struck the right balance in its Spectrum Frontiers decision between
licensed and unlicensed spectrum. In this decision, the agency adopted
policies to accommodate terrestrial wireless services in the 28 GHz, 37
GHz, 39 GHz, and 64-71 GHz bands. While the 28 GHz, 37 GHz, and 39 GHz
bands are designated for licensed spectrum, the 64-71 GHz band is
designated for unlicensed use. This division of licensed and unlicensed
spectrum makes sense because the 64-71 GHz band is adjacent to an
existing swath of unlicensed spectrum. Combining them enhances spectrum
efficiency by enabling the use of wider channels, which creates new
possibilities for the development of Wi-Gig services.
B. Should the Commission look for more licensed spectrum as it
considers additional high frequency bands in its further notice?
Answer. Yes.
Question 2. The Commission has proposed an exception to the local
media cross-ownership ban that would allow a broadcaster to invest in a
newspaper when it is ``failing.'' This exception for cases in which a
newspaper is ``failing'' renders little value to a newspaper that needs
investments now, well before it is ``failing.'' By the time a newspaper
is ``failing,'' a local broadcaster may no longer see it as a
worthwhile investment--particularly in light of the consumer trend
toward digital and mobile applications for news and entertainment.
Shouldn't the Commission be seeking ways to encourage investment in
newspapers before they get to a state of ``failing,'' and before such
newspapers may have to make the difficult decision to cut back on local
reporting resources?
Answer. After careful consideration of the record, the Commission
concluded in its Quadrennial Review decision that oversight of
newspaper-broadcast cross-ownership remains an important part of
protecting and promoting viewpoint diversity in local markets. However,
the agency also determined that at this time an absolute ban on
newspaper-broadcast cross-ownership is overly broad and restrictive. To
this end, the Commission adopted several exceptions to its newspaper-
broadcast cross-ownership rule. First, as you note, the Commission
excepted failed or failing newspapers and broadcast stations from the
general prohibition. However, the Commission went beyond consideration
of failing firms and made clear that it also will consider exceptions
on a case-by-case basis where applicants can show that the proposed
combination will not harm viewpoint diversity in the local market.
Finally, the Commission clarified the geographic scope of the rule by
updating old analog parameters to more accurately reflect the markets
that newspapers and broadcasters actually serve.
______
Response to Written Questions Submitted by Hon. Deb Fischer to
Hon. Jessica Rosenworcel
Question 1. Commissioner Rosenworcel, both the Federal and state
universal service funds are important to my constituents in Nebraska.
As Chair of the Federal-State Joint Board, you are tasked with making a
recommendation to the FCC on how to update and reform the collection of
contributions for the Federal Universal Fund. Nebraska is currently
considering proposals to reform the contributions process for the
Nebraska State Universal Service Fund. Can you provide an update on a
potential proposal from the FCC on contributions reform? Do you see a
role for states in contributions reform, particularly if Federal action
is not going to take place in the near future?
Answer. Now that the DC Circuit has issued its broadband
reclassification opinion in United States Telecom Association v. FCC,
the Federal-State Joint Board on Universal Service is continuing its
work with new resolve. We have established a schedule for regular staff
meetings, culminating in an in-person discussion next month at the
quarterly gathering of the national association of state regulatory
officials. Although it is premature to say when the recommended
decision will be complete, work is certainly underway.
As you note, Nebraska, like some other states, has its own
universal service fund. These state funds play an important role in
ensuring that modern communications services reach our most rural
communities. While the work of the Federal-State Joint Board on
Universal Service proceeds, states may proceed with their own reforms,
provided that any changes that are made are within their jurisdictional
authority.
Question 2. I am excited about the opportunities that 5G networks
and services may bring for the U.S. and the citizens of Nebraska, and I
understand that in addition to making more spectrum available, we will
have to build out new wireless infrastructure to make 5G services a
reality. I know that 5G networks will rely on equipment that is much
smaller than traditional wireless towers, and that these small cells
will need to be widely deployed. In August, the FCC's Wireless Bureau
took positive steps to help streamline the deployment of small cell
antenna systems. However, you have made it clear that the FCC needs to
do more. What should the Commission do to address barriers to deploying
small cells?
Answer. Spectrum gets all the glory. But the unsung hero of the
wireless revolution is infrastructure--because no amount of spectrum
will lead to better wireless service without good infrastructure on the
ground. This is especially true with the next generation of wireless
services--known as 5G. With 5G services incorporating greater use of
high-band spectrum, small cells are going to be a big thing. Getting
these facilities fully deployed will take new focus and effort. That's
because our existing policies are designed for wireless towers and
facilities that have a much greater footprint than small cells.
To remedy this problem, the Commission has already taken steps to
update historic and environmental review practices in order to
streamline them for small cell deployment. Specifically, in August of
this year, the Commission modernized what is known as the nationwide
programmatic agreement pursuant to the National Historic Preservation
Act. This eliminates the need for historical review of small cell
deployments on non-historic buildings, as well as on historic buildings
or buildings within historic areas subject to visibility limits and
historic landmark designations.
Going forward, however, we will need to do more. In the near term,
the Commission should survey the fees municipalities charge for siting
as well as the length of their review to better understand deployment
challenges. In the long term, we will need to get creative. This could
include holding a smart cities contest and rewarding the communities
that put this infrastructure in place in a speedy way, facilitating the
development of 5G services. In addition, we could develop the broadband
and wireless equivalent of LEED certification, creating a market
mechanism to encourage building owners to update their facilities for
digital age service. This could be based on a model put in place by
former New York Mayor Michael Bloomberg, which helped identify
buildings with broadband infrastructure. We could also put a new
premium on deployment on Federal facilities, by developing a state-by-
state comprehensive list of Federal structures where deployment can
occur in an expedited fashion.
Question 3. Consumers are increasingly using their mobile devices
as part of their everyday lives. And, as such, we need to work together
to find ways to allow for expansion into the 5G world. As part of that
effort, I commend the FCC for its work on making high-band available
for 5G. But, it is my understanding that wireless networks will need to
use not only high-band spectrum but also will need access to more low-
bands and mid-bands. This combination of bands is critical in order for
consumers to continue to enjoy a fast paced, high demand, mobile
experience. Will you agree to find ways to make more mid-band and low-
band available for commercial use?
Answer. Yes. We have to remember that while we explore the
possibilities of millimeter wave spectrum, mid-band and low-band
spectrum is still vitally important today--and in the 5G future.
______
Response to Written Questions Submitted by Hon. Cory Booker to
Hon. Jessica Rosenworcel
Question 1. This month, New Jersey became the 5th state in the
Nation to fully implement text to 9-1-1 services. This capability will
expand 9-1-1 access to persons with disabilities and enable people in
tough situations who cannot make a call, to still access the vital
services provided by first responders. I am so proud of our state's
tremendous achievement and look forward to seeing more states follow
suit.
What challenges do you see as most pressing when it comes to
getting this and other 9-1-1 upgrades implemented nationwide?
Answer. Every year we make 240 million calls to 911. Every one of
those calls is critical--and deserves a timely answer and response. But
our 911 system is facing big challenges. By and large, the system we
have today was designed for the analog era. It is organized around
traditional wired telephony and does not fully reflect or feature the
digital capabilities of modern networks. This needs to change.
To be clear, we are taking some steps to update this system and
move forward. For example, the Commission recently adopted rules to
strengthen location accuracy for wireless calls--so first responders
can better pinpoint the location of emergency calls made from mobile
phones. In addition, the Commission put in place a framework for
texting to 911 which, as you acknowledge, is now up and running in a
handful of states--New Jersey included.
To make real progress, however, more work is required. Three major
challenges could slow down work in this area--so they need to be
addressed.
First, funding is a challenge. There is no annual Federal funding
system for 911 service. Our nation's 911 systems are funded strictly at
the state and local level. In fact, roughly $2.5 billion is collected
each year by state and local jurisdictions to support 911 service. But
as the Commission's report on 911 funding pursuant to the New and
Emerging Technology 911 Improvement Act demonstrates, some states are
diverting fees collected for 911 service for other purposes--including
uses that have nothing to do with public safety. Stripping 911 service
of funding will delay much-needed upgrades to our public safety system.
It has to stop--and it is time to consider how Federal funding for
other public safety purposes might be conditioned on a commitment to
end fee diversion.
Second, jurisdiction is a challenge. Federal authority over 911 is
limited. State and local authorities have primary responsibility for
our Nation's 911 systems--which include more than 6,000 public safety
answering points. These systems, however, are different in different
parts of the country. To illustrate this, consider Nevada and
Mississippi. Both states have populations of just under 3 million. But
while Nevada has 12 public safety answering points, Mississippi has
375. In other words, we have very different ways of managing emergency
calling in different parts of the country. It makes a uniform effort
hard. Consequently, any Federal policy in this area must consider how
implementation practices may vary from state to state.
Third, we need a common definition of next-generation 911. We need
to ensure that when we talk about next-generation 911 in one
jurisdiction it means the same thing in another jurisdiction. That is
not the case today. Federal policymakers can assist with this effort--
by developing nationally-accredited standards that promote
interoperability between public safety answering points.
Question 2. What can members of Congress do to support upgrading
these systems so that our first responders and public safety facilities
keep pace with modern technology?
Answer. There are two things that can be done right now to support
the update of our Nation's 911 systems--and improve public safety in
the process.
First, we need to end 911 fee diversion. As described above, state
and local authorities are responsible for funding 911 services. Every
year, they collect $2.5 billion in fees to support 911 facilities. This
is typically accomplished through line items on wired and wireless
phone bills that are identified as support for 911 service. However,
not all states follow through and actually use these funds for 911
purposes. Some use them for budget shortfalls and projects that have
nothing to do with public safety. This is not right--and needs to stop.
Congress can condition Federal funding for public safety projects on
states agreeing to end 911 fee diversion.
Second, we need to kick-start a special program that can help
update our Nation's 911 systems that was included in the Middle Class
Tax Relief and Job Creation Act of 2012. Section 6503 of this law re-
established a 911 Implementation Coordination Office that is jointly
run by the National Telecommunications and Information Administration
and the National Highway Traffic Safety Administration. Even better, it
authorizes a one-time $115 million matching grant program to update 911
service. But four years after Congress authorized its creation, this
program is still not up and running. This is not acceptable--especially
because it is the best near-term resource we have to get going on next-
generation 911. Congress can press the authorities responsible for this
grant program to put it in place as soon as possible--and to structure
the funding to support next-generation 911 projects that can be a
blueprint for updating services in communities nationwide.
______
Response to Written Questions Submitted by Hon. Joe Manchin to
Hon. Jessica Rosenworcel
Question 1. The Small Business Broadband Deployment Act would allow
small businesses to focus on increased deployment, instead of overly
burdensome reporting. Senator Daines and I worked with Senator Cantwell
to reach a further bipartisan compromise that builds on the version of
this bill that passed the U.S. House of Representatives by a vote of
411-0. The further agreement we reached would benefit rural consumers
in all of our states. You have previously stated that you believe small
businesses should be exempted from these additional reporting
requirements and receive a permanent exemption. Do you agree that the
temporary exemption coupled with a report by the Commission in our bill
is a reasonable path forward?
Answer. Yes.
Question 2. I applaud the Commission's continued efforts to promote
competition in the set-top box marketplace. Getting rid of set-top
boxes in favor of an ``apps-based'' approach should reduce direct
consumer costs. But innovations available to urban and suburban
consumers should be available to rural consumers as well. And I remain
concerned about the West Virginians who still do not have access to
affordable, reliable broadband service--or do not have broadband
service at all. These West Virginians may be forced to keep a set-top
box in their households.
For these rural consumers, do you believe this proposal will meet
the Communications Act's mandate to assure the commercial availability
of competitive devices?
Answer. The Commission is still in the process of evaluating the
best path forward to bring much-needed competition to the set-top box
marketplace. In my review of any proposal, I will carefully consider
the Commission's legal authority as well as the impact on consumers in
urban and rural areas. I believe any proposal that is adopted should be
both legally sustainable and capable of benefiting consumers across the
country.
______
Response to Written Questions Submitted by Hon. John Thune to
Hon. Ajit Pai
Question 1. In its Further Notice of Proposed Rulemaking in the
Spectrum Frontiers proceeding, the Commission talked about following
the 4G playbook in making available high band spectrum that we all hope
will be a platform for global 5G leadership. At the same time, the FCC
sought comment on ``use-it-or-share-it'' proposals that some argue may
devalue high band licenses. Are you at all concerned that these types
of sharing proposals could undermine investment in high band
frequencies, potentially putting our Nation's leadership in 5G at risk?
Answer. One of my key priorities in the FCC's Spectrum Frontiers
proceeding is to ensure that our policies promote investment and
innovation in these spectrum bands. As we move to the next phase of
this proceeding, I will take the concern you have expressed to heart
and support policies necessary for the U.S. to extend its 4G leadership
into the 5G world.
Question 2. As part of the Spectrum Frontiers Order, the FCC made
available nearly 11 GHz of spectrum, but less than 4 GHz of that will
be made available on a licensed basis. And a portion of that licensed
spectrum will be allocated on a shared basis.
A. I believe that there should be a balance between licensed and
unlicensed spectrum. Does this Order strike the proper balance? If so,
please explain why.
Answer. I dissented in part from the FCC's 2015 Notice of Proposed
Rulemaking in the Spectrum Frontiers proceeding because the FCC
majority refused to seek comment on opening up over 12 GHz of
additional spectrum--spectrum that could have been made available, at
least in part, for licensed use. Because the Commission did not seek
comment on freeing up those additional spectrum bands, the FCC was
procedurally barred from including those spectrum bands in the Spectrum
Frontiers Order we adopted earlier this year. I believe the agency
would have been able to free up more licensed spectrum in that Order if
the majority had agreed with me and Commissioner O'Rielly to seek
comment on those additional spectrum bands in the 2015 Notice of
Proposed Rulemaking.
But thankfully, the FCC is now seeking comment on opening up those
and other spectrum bands in the ongoing Further Notice of Proposed
Rulemaking. That is due, in no small part, to your work on the MOBILE
NOW bill, which calls for the FCC to examine many of these bands. I
hope that the FCC strikes the right balance between freeing up licensed
and unlicensed spectrum when it adopts an order involving these
additional bands.
B. Should the Commission look for more licensed spectrum as it
considers additional high frequency bands in its further notice?
Answer. Yes. I have long advocated for the agency to take an all-
of-the-above approach to spectrum. That includes making sure we
identify spectrum in the Spectrum Frontiers proceeding for licensed
use.
Question 3. The Commission has proposed an exception to the local
media cross-ownership ban that would allow a broadcaster to invest in a
newspaper when it is ``failing.'' This exception for cases in which a
newspaper is ``failing'' renders little value to a newspaper that needs
investments now, well before it is ``failing.'' By the time a newspaper
is ``failing,'' a local broadcaster may no longer see it as a
worthwhile investment--particularly in light of the consumer trend
toward digital and mobile applications for news and entertainment.
Shouldn't the Commission be seeking ways to encourage investment in
newspapers before they get to a state of ``failing,'' and before such
newspapers may have to make the difficult decision to cut back on local
reporting resources?
Answer. Yes, I agree, and that is why the Newspaper Association of
America told the Commission that the ``failing'' newspaper exception
``will not open any opportunities for newspaper companies to obtain
investment from the media industry, and certainly will not serve the
public interest.'' Our goal should be to maintain newspapers as healthy
and vibrant institutions. We shouldn't deprive them of the investment
they need to thrive until they are at death's doorstep and then hope
that someone will swoop in at the last minute to save them.
______
Response to Written Questions Submitted by Hon. Deb Fischer to
Hon. Ajit Pai
Question 1. Commissioner Pai, in a state like Nebraska, the High
Cost universal service programs are vital to ensure that carriers can
build out infrastructure. However, the FCC seems to have prioritized
resources for Lifeline and E-rate in recent years by increasing their
budgets and indexing those programs to inflation. Conversely, the High
Cost fund has been flat-lined since 2011. This makes it difficult for
rural carriers to deploy the infrastructure that is used for the other
universal service programs. Commissioner, what justification is there
for not putting all universal service programs on equal footing if all
are aimed at the same goal of getting broadband networks built and
affordable services to users?
Answer. I agree that the high-cost program is an essential means to
ensure that every American has the opportunity to access 21st century
communications networks, including high-speed broadband. Almost 34
million Americans don't have access to the broadband networks needed to
fully participate in today's digital economy. That is why I have pushed
to reform and improve our high-cost program for the past four years.
I also agree with you that spending dramatically more money on the
Lifeline and E-Rate programs (without any meaningful spending
constraint at all, in the case of the former program) was a mistake.
First, the problem both programs faced was not a lack of funding, but
poor design, which has led to improper administration. The Commission
should have sought real reform of these programs rather than just
increasing the budget for each. Second, you cannot have broadband
Internet access without broadband networks; that would suggest putting
a higher priority on the high-cost program, which promotes the build-
out of the networks upon which many low-income residents, schools, and
libraries rely.
Question 2. Small rural video providers face many challenges when
providing service to customers. Prior to the FCC's set-top box Notice
of Proposed Rulemaking, some of them had shut down their video
operations or were assessing the cost effectiveness of continuing to
provide such services to consumers. These are companies that are
providing service to the communities where they live and work, to their
neighbors and friends. So many of them continued offering video
services because wanted to preserve their customers' access to
terrestrial video offerings where they are often the only option.
Chairman Wheeler's fact sheet on the set-top box item suggests that the
order will exempt small providers with fewer than 400,000 subscribers,
but that small providers can develop apps if they choose to do so. Can
you clarify which, if any, aspects of the order will apply to small
video providers? For example, will they be subject to the same
licensing requirements as larger providers?
Answer. The Commission has not yet adopted a set-top box order. But
my position is that no aspect of the rules under consideration should
apply to small video providers with fewer than 400,000 subscribers.
______
Response to Written Question Submitted by Hon. Ron Johnson to
Hon. Ajit Pai
Question. I have been told that it will cost a rural broadband
provider in Wisconsin somewhere between $20,000 to $50,000 per year
just on the training costs associated with the FCC's currently proposed
privacy rules. Does the FCC recognize that money spent on training and
compliance lawyers diverts money to rural broadband build out?
Answer. The Commission's proposed privacy rules from March were a
wild departure from the rules that applied to Internet service
providers under the Federal Trade Commission's regime, and those rules
would have imposed very large compliance costs on very small providers.
I agree with you that such a radical departure from the FTC's
successful framework makes no sense, and that small ISPs should be
focused on what Americans so desperately want: higher-speed broadband
throughout rural America.
______
Response to Written Questions Submitted by Hon. Claire McCaskill to
Hon. Ajit Pai
Question 1. As the Ranking Minority Member of the Senate Permanent
Subcommittee on Investigations, and throughout my time in the Senate, I
have advocated for oversight and transparency for the Federal
Government, and I take serious Congress' responsibility to hold Federal
agencies accountable. As such, I was concerned to hear that some
members of the Commission have not complied with Congressional
inquiries conducted by my Republican colleagues in the House and
Senate. I understand that neither Commissioner Pai nor Commissioner
O'Rielly has provided documents in response to separate requests from
the Senate Committee on Homeland Security and Governmental Affairs and
the House Committee on Oversight and Government Reform relating to the
rulemaking process for the Open Internet Order, which was released
publicly on March 12, 2015.
Please explain all steps taken by you and your staff to respond to
the inquiries by the Senate Committee on Homeland Security and
Governmental Affairs and the House Committee on Oversight and
Governmental Affairs into Federal Communications Commission's open
Internet order.
Answer. My office has fully cooperated with these congressional
investigations into the White House's influence on the Federal
Communications Commission's net neutrality proceeding. At the outset of
these investigations, my office informed the Committees' staff that we
had no involvement in the preparation or development of the
Commission's net neutrality order. Rather, this work was exclusively
carried out in the Office of Chairman Wheeler, the Wireline Competition
Bureau, the Office of General Counsel, and other Bureaus and Offices
within the Commission.
My office therefore indicated to the Committees' staff in the first
half of 2015 that we were poorly positioned to provide documents
shedding any light on how the White House's intervention into the
Commission's rulemaking proceeding impacted the development of the net
neutrality order. In response, the Committees' staff told my office
that they would be in touch with us if they wanted us to produce any
documents and that they considered us to be in compliance with the
Committee's request. We did not hear back from the Committees for the
rest of the year. However, during this time, the Office of General
Counsel provided the House Oversight and Governmental Reform Committee
with documents from my office that we produced in response to a Freedom
of Information Act request related to the FCC's net neutrality
proceeding.
In February 2016, my Chief of Staff and Commissioner O'Rielly's
Chief of Staff had a phone conversation with both majority and minority
House Committee staff. During this call, they reiterated to staff what
we had told Committee staff in 2015. Following this call, they met on
March 4 with a representative of the Office of General Counsel to learn
about the process that the Commission had used to identify and review
documents that had been turned over to the Committee. During that
meeting, they learned that the Office of General Counsel, pursuant to
conversations with the Committee, had only turned over Commission
documents from between November 1, 2014 and December 15, 2014. It was
also confirmed that the Office of General Counsel has refused to
provide the Committee with internal drafts of the net neutrality order
from those two months. It is disappointing that the Commission is
withholding these highly relevant documents from the Committee--
documents that would show the changes that were made to the draft order
following the White House's intervention into the rulemaking process. I
can confirm that my office does not have a copy of any such drafts.
Following that meeting with the Office of General Counsel, my Chief
of Staff and Commissioner O'Rielly's Chief of Staff had another phone
conversation with both majority and minority Committee staff. During
this call, we indicated that we would search for documents from between
November 1, 2014 and December 15, 2014, using the same search terms as
had been used by the Office of General Counsel. We also indicated that
because our offices had no involvement in the development and
preparation of the net neutrality order during these two months, we
were skeptical that our efforts would produce any documents that would
assist the Commission's investigation. My office performed that search
and, as expected, this search confirmed that my office had no
involvement in the development or preparation of the net neutrality
order in November or December 2014.
Following those discussions, my office did not hear from the
Committee for many months. On September 14, 2016, my office received a
letter from Ranking Member Cummings of the House Committee. In response
to this letter, I told Ranking Member Cummings that I did not believe
that I had any documents pertinent to the Committee's investigation of
the White House's influence over the development of the net neutrality
order. Nevertheless, in the interests of transparency, my office
produced or re-produced hundreds of pages of documents related to net
neutrality from the time-frame between November 1, 2014 and December
15, 2014. These documents confirmed that my office was not involved in
developing the net neutrality order.
Question 2. Please explain your views on the obligation of you and
your office to comply with congressional requests and cooperate with
congressional investigations.
Answer. I believe that the FCC should fully cooperate with
congressional investigations. That is why it is so disappointing that
the Commission has refused to provide the Committee with internal
drafts of the net neutrality order from November and December of 2014.
These are highly relevant documents to the Committee's investigation
because they would show the changes that were made to the draft order
following the White House's intervention into the rulemaking process.
Attachment
Federal Communications Commission
Washington, DC, September 16, 2016
Hon. Elijah E. Cummings,
Ranking Member,
Committee on Oversight and Government Reform,
U.S. House of Representatives,
Washington, DC.
Dear Ranking Member Cummings:
I am responding to your September 14, 2016 letter regarding the
Oversight Committee's request for documents pertaining to the issue of
net neutrality.
I sincerely apologize if there was a disconnect between my staff
and the Republican or Democratic staff of the Oversight Committee. It
is not my intention to delay or withhold any information from the
Committee's review. Please know that any misunderstanding was
unintentional, and I seek to remedy the situation immediately.
Pursuant to the conference call between Republican and Democratic
Oversight Committee staff, my Chief of Staff, and Commissioner Pai's
Chief of Staff that occurred on March 7, 2016, my staff believed that
the Committee staff was satisfied with our responses and no further
information would be necessary. Specifically, during that call, my
staff outlined the screening process that we were told was used by the
FCC's Office of General Counsel (OGC) in producing its response to the
Committee's February 6, 2015 request, a production which your letter
seems to indicate was deemed in full compliance. Significantly, the
time-frame was limited from the period initially requested (January 14,
2014-February 6, 2015) to a six-week period from November 1 to December
15, 2014, and after two separate automated searches were performed, the
remaining documents were individually reviewed by OGC staff for
responsiveness to the Committee's requests. The documents considered to
be responsive were then provided to the Committee, except for drafts of
the net neutrality order itself, which OGC withheld as they are
considered by OGC to be highly sensitive documents critical to the
internal deliberative process. Majority and minority Committee staff
confirmed that this was an accurate description of the production
process used. Further, my staff represented and Committee staff
seemingly accepted that there would be no responsive documents from my
office had we conducted a similar process. Accordingly, no further
review was conducted, and my office has had no further contact with
majority or minority Committee staff since that date.
However, in response to your September 14, 2016 letter, my staff
and I have individually reviewed each of our documents between November
1 and December 15, 2014, and identified all documents that could be
considered relevant in any way. These largely consist of e-mails sent
within my office in the process of drafting speeches or talking points
for public events in which I participated during that timeframe. In the
interest of attempting to fully resolve any outstanding concerns you
may have, I will provide these documents to the Committee next week.
In terms of the lack of information filed with OGC, it has been
Commission practice and precedent for minority Commissioners to file
directly any materials or documents requested by a Congressional
Committee. This is, in part, because the OGC has taken a much more
active role in the policy of the agency, as opposed to strictly acting
in the capacity of a non-partisan counsel. This explains the
description of the February 18, 2016 conference call between Committee
staff and OGC, in which it was indicated that my office had not
supplied OGC with any documents.
Lastly, I hope to clear up any misunderstanding regarding my May 5,
2014 The Hill op-ed, which was reviewed and commented upon by select
outside individuals prior to publication. The Committee's press release
indicated that I tried to argue that I wrote the op-ed ``in [my]
`personal' capacity despite using official FCC resources, e-mail, and
staff.'' To clarify, I do not claim in any way that I wrote my op-ed in
my personal capacity. Instead, I was indicating that my interactions
with outside parties in this matter did not rise to the level of
requiring ex parte filings, because the outside parties did not seek to
influence FCC proceedings, but responded to my personal views provided
in the draft version of the op-ed.
I am hopeful that this will resolve any outstanding requests or
concerns in this matter. Please do not hesitate to contact me directly
or have your staff reach out to Robin Colwell in my office at (202)
418-2300 with any questions or concerns.
Sincerely,
Michael O'Rielly,
Commissioner.
cc: The Honorable Jason Chaffetz, Chairman
______
Response to Written Question Submitted by Hon. Joe Manchin to
Hon. Ajit Pai
Question. I applaud the Commission's continued efforts to promote
competition in the set-top box marketplace. Getting rid of set-top
boxes in favor of an ``apps-based'' approach should reduce direct
consumer costs. But innovations available to urban and suburban
consumers should be available to rural consumers as well. And I remain
concerned about the West Virginians who still do not have access to
affordable, reliable broadband service--or do not have broadband
service at all. These West Virginians may be forced to keep a set-top
box in their households.
For these rural consumers, do you believe this proposal will meet
the Communications Act's mandate to assure the commercial availability
of competitive devices?
Answer. This summer, I visited West Virginia and heard from many
individuals who lack access to high-speed broadband. In my view, this
situation is unacceptable and that is why I have been working at the
FCC on a variety of initiatives to close the digital divide and expand
broadband deployment in rural America. However, it is my understanding
that consumers would not need to subscribe to broadband to take
advantage of the ``apps-based'' approach currently under consideration
in the set-top box proceeding.
______
Response to Written Questions Submitted by Hon. John Thune to
Hon. Michael O'Rielly
Question 1. In its Further Notice of Proposed Rulemaking in the
Spectrum Frontiers proceeding, the Commission talked about following
the 4G playbook in making available high band spectrum that we all hope
will be a platform for global 5G leadership. At the same time, the FCC
sought comment on ``use-it-or-share-it'' proposals that some argue may
devalue high band licenses. Are you at all concerned that these types
of sharing proposals could undermine investment in high band
frequencies, potentially putting our Nation's leadership in 5G at risk?
Answer. Generally, I support efforts to promote sharing of
spectrum. However, I raised serious concerns about the sharing
proposals in both the order and further notice in my statement on this
item. The Commission is considering and seeking comment on ``use-it-or-
share-it'' mechanisms for all millimeter wave bands. And, it already
mandated a sharing paradigm between Federal and commercial users in the
lower 600 megahertz of 37 GHz band (37-37.6 GHz), but exactly how
sharing will work is teed up for comment in the further notice. The
further notice also seeks comment about whether Federal users should be
able to share spectrum with licensees for additional access in the
upper 37 GHz band. I am concerned that sharing--whether with commercial
or Federal users--will reduce investment, decrease certainty, and slow
deployment, which could jeopardize the U.S. role as the leader in 5G.
It is one thing to allow unlicensed entities to use unoccupied spectrum
until the license holder is ready to use it; it is quite another
issue--and a problematic one--to undermine commercial licenses obtained
at auction.
Question 2. As part of the Spectrum Frontiers Order, the FCC made
available nearly 11 GHz of spectrum, but less than 4 GHz of that will
be made available on a licensed basis. And a portion of that licensed
spectrum will be allocated on a shared basis.
A. I believe that there should be a balance between licensed and
unlicensed spectrum. Does this Order strike the proper balance? If so,
please explain why.
Answer. I am supportive of unlicensed spectrum and the innovation
that it can bring; therefore, I did not object to the designation of
the highest bands (64-71 GHz) for unlicensed use. But, I also agree
that the proper balance must be struck, which is why I expressed
concerns about the sharing proposals raised above. As I stated above, I
would have preferred that the lower 600 megahertz of the 37 GHz band
was licensed. Also, licensed spectrum should be truly exclusive, but
with stringent buildout requirements, so that licensees have the
incentive to innovate without the inherent concerns about sharing
spectrum. Going forward, more spectrum must be licensed on an exclusive
basis.
B. Should the Commission look for more licensed spectrum as it
considers additional high frequency bands in its further notice?
Answer. Yes, additional licensed spectrum must be part of any
future spectrum allocations.
Question 3. In 2014, Chairman Wheeler said ``there is a new
regulatory paradigm'' for cybersecurity characterized by reliance on
private sector leadership and the market first, ``while preserving
other options if that approach is unsuccessful.'' He also noted that
``[t]he pace of innovation on the Internet is much, much faster than
the pace of a notice and comment rulemaking.''
Similarly, the Administration has stressed the importance of
public-private partnerships to enhance security, believing that static
mandates cannot keep pace with growing and evolving cybersecurity
threats and technological developments. Indeed, this approach, which
the FCC's Communications Security, Reliability, and Interoperability
Council (CSRIC) has adopted, is helpful in tailoring guidance to small
and mid-sized companies.
Despite the foregoing, this year the Commission has adopted
security measures and reporting requirements in a series of orders and
notices of proposed rulemaking on consumer privacy, communications
network outage reporting, technology transitions, emergency alert
systems, and 5G wireless licensing. Addressing cybersecurity in this
manner through prescriptive rulemaking appears contrary to the
Commission's professed desire to pursue the cooperative approach of an
industry-led, public-private partnership.
A. Given the recent work of CSRIC IV, how do you account for this
apparent shift from industry-led, public private partnership to
prescriptive rulemakings?
Answer. I, too, have observed that, despite assurances by the
Commission that it would pursue a voluntary approach to security and
risk management, including in a draft Policy Statement still on
circulation, the Commission has repeatedly imposed or sought to adopt
new requirements. The Chairman's office would be in a better position
to account for this shift.
Overall, I find the Commission's efforts to adopt prescriptive
rulemakings to be troubling as it does so without sufficient authority
provided by Congress. Substantively, the Commission lacks the larger
perspective gained from entities outside our purview, potentially
creating conflicting requirements and imposing unnecessary burdens.
B. To your knowledge, has the Commission determined that the
voluntary, market-based approach has proven to be unsuccessful?
Answer. I am not aware of any such determination.
Question 4. The Commission has proposed an exception to the local
media cross-ownership ban that would allow a broadcaster to invest in a
newspaper when it is ``failing.'' This exception for cases in which a
newspaper is ``failing'' renders little value to a newspaper that needs
investments now, well before it is ``failing.'' By the time a newspaper
is ``failing,'' a local broadcaster may no longer see it as a
worthwhile investment--particularly in light of the consumer trend
toward digital and mobile applications for news and entertainment.
Shouldn't the Commission be seeking ways to encourage investment in
newspapers before they get to a state of ``failing,'' and before such
newspapers may have to make the difficult decision to cut back on local
reporting resources?
Answer. While I support completely eliminating this particular
cross-ownership restriction, to the extent that relief is going to be
limited to an exception, I agree that the Commission should not require
a newspaper to be ``failing'' before a partnership with a local
broadcaster can even be considered. It is difficult to see this
exception being of any value in today's fast-paced media environment.
______
Response to Written Questions submitted by Hon. Deb Fischer to
Hon. Michael O'Rielly
Question 1. Commissioner O'Rielly, I want to thank you for your
recent visit to Nebraska, where you got to see first-hand the
importance of infrastructure deployment in a rural state like mine. As
I'm sure you saw, there are still gaps in coverage that providers are
working to close. I am concerned about the impact of the FCC's proposed
privacy rules on broadband providers who serve rural areas of the
state. Complying with these rules may be very costly and difficult,
especially for providers with only a few employees and slim budget
margins. I fear that these rules will require more money to be spent on
regulatory compliance instead of deploying infrastructure to serve
Nebraskans. Commissioner, do you agree?
Answer. Yes, I agree. I have worked hard, along with my colleagues,
to reform the high-cost universal service program to promote broadband
deployment in rural areas that would not otherwise be served. Imposing
new burdens on providers that divert limited resources away from
deployment would run counter to this effort. The Commission is
currently considering adopting broadband privacy rules and I hope it
will carefully consider the costs and benefits of any new requirements,
especially for smaller entities.
Question 2. I am excited about the opportunities that 5G networks
and services may bring for the U.S. and the citizens of Nebraska, and I
understand that in addition to making more spectrum available, we will
have to build out new wireless infrastructure to make 5G services a
reality. I know that 5G networks will rely on equipment that is much
smaller than traditional wireless towers, and that these small cells
will need to be widely deployed. In August, the FCC's Wireless Bureau
took positive steps to help streamline the deployment of small cell
antenna systems. However, you have made it clear that the FCC needs to
do more. What should the Commission do to address barriers to deploying
small cells?
Answer. The Commission's spectrum efforts will only benefit
Americans if decision makers, such as private land owners and municipal
managers, approve the placement of infrastructure under reasonable
terms. Unfortunately, stories of barriers being placed in front of
network deployments abound. As I stated in my testimony, some Tribal
and local governments are seeking to extract enormous fees from
providers and operating siting review processes that are not conducive
to a quick and successful deployment schedule. More specifically, I
have heard several experiences of localities using the permitting
processes to slow or stop facilities siting in their rights of way. At
some point, the Commission may need to use the authority provided by
Congress to preempt the activities of those delaying 5G deployment
without justifiable reasons. This could include proactively trying to
help resolve disputes caused by locality inaction or hostility, and
designating specific Wireless Bureau staff to travel, testify, and
investigate instances of siting problems.
Additionally, we must ensure that providers have the incentive to
build backhaul. The Commission should remove barriers to deployment and
not add unsubstantiated new burdens.
______
Response to Written Question Submitted by Hon. Ron Johnson to
Hon. Michael O'Rielly
Question. The FCC claims it must act on its Privacy Proceeding
because Internet Service Providers (ISPs) have a unique insight into a
person's viewing habits. However, today, all of the top 10 websites
either encrypt by default or upon user log-in, as do 42 of the top 50.
An estimated 70 percent of traffic will be encrypted by the end of
2016. So, with the rise of encryption, do ISPs really have this unique
information?
Answer. The increasing prevalence of encryption clearly undercuts
claims that rules are needed to address ISPs' access to user
information. The Commission is currently considering adopting broadband
privacy rules, and I hope it will carefully consider such data in
determining whether and to what extent new requirements are warranted
and justified.
______
Response to Written Question Submitted by Hon. Cory Gardner to
Hon. Michael O'Rielly
Question. Commissioner O'Rielly, you've expressed support for the
FCC's efforts to streamline the deployment of small cell antennas, but
you've also stated that there remains much work to be done.
Particularly given the new buildout required for the oncoming 5G
revolution, what more can the FCC be doing to move this effort forward?
Do you believe the FCC is capable of single-handedly addressing all
remaining impediments to infrastructure buildout? If not, would
legislation be helpful in this effort and what role do you believe is
proper for Congress to play?
Answer. As I stated in my testimony, the biggest impediment to 5G
infrastructure that I hear about is that some Tribal and local
governments are seeking to extract enormous fees from providers and
operating siting review processes that are not conducive to a quick and
successful deployment schedule. For instance, I have heard several
accounts of localities using permitting processes to slow or stop
facilities siting in their rights of way. At some point, the Commission
may need to use the authority provided by Congress to preempt the
activities of those delaying 5G deployment without justifiable reasons.
While the Commission may take this step, legislation is always helpful
to obtaining consensus and facilitating Commission action, but I leave
the decision as to whether such action is appropriate or warranted to
Congress.
______
Response to Written Questions Submitted by Hon. Claire McCaskill to
Hon. Michael O'Rielly
Question 1. As the Ranking Minority Member of the Senate Permanent
Subcommittee on Investigations, and throughout my time in the Senate, I
have advocated for oversight and transparency for the Federal
Government, and I take serious Congress' responsibility to hold Federal
agencies accountable. As such, I was concerned to hear that some
members of the Commission have not complied with Congressional
inquiries conducted by my Republican colleagues in the House and
Senate. I understand that neither Commissioner Pai nor Commissioner
O'Rielly has provided documents in response to separate requests from
the Senate Committee on Homeland Security and Governmental Affairs and
the House Committee on Oversight and Government Reform relating to the
rulemaking process for the Open Internet Order, which was released
publicly on March 12, 2015.
Please explain all steps taken by you and your staff to respond to
the inquiries by the Senate Committee on Homeland Security and
Governmental Affairs and the House Committee on Oversight and
Governmental Affairs into Federal Communications Commission's open
Internet order.
Answer. I take very seriously my absolute obligation to respond
fully to any Congressional request and to cooperate fully with any
Congressional investigation. My staff and I reviewed each of our e-
mails and documents from the applicable time frames, and had no
documents responsive either to the February 9, 2015 request of the
Senate Committee on Homeland Security and Governmental Affairs, or to
the February 6, 2015 request of the House Committee on Oversight and
Governmental Affairs. Pursuant to discussions my staff had with House
Committee staff, we believed that my responses had been satisfactory
and that no further information would be necessary. However, in
response to the September 14, 2016 letter from the House Committee on
Oversight and Governmental Affairs Ranking Member Cummings, I sent a
letter on September 16, 2016, which is attached for the record.
Question 2. Please explain your views on the obligation of you and
your office to comply with congressional requests and cooperate with
congressional investigations.
Answer. I consider myself obligated, and have repeatedly committed
to respond fully and promptly to any Congressional request and to
cooperate fully with any Congressional investigation. The Federal
Communications Commission, and my position within it, was created by
Congress and is accountable to Congress in every possible respect.
______
Response to Written Question Submitted by Hon. Joe Manchin to
Hon. Michael O'Rielly
Question. I applaud the Commission's continued efforts to promote
competition in the set-top box marketplace. Getting rid of set-top
boxes in favor of an ``apps-based'' approach should reduce direct
consumer costs. But innovations available to urban and suburban
consumers should be available to rural consumers as well. And I remain
concerned about the West Virginians who still do not have access to
affordable, reliable broadband service--or do not have broadband
service at all. These West Virginians may be forced to keep a set-top
box in their households. For these rural consumers, do you believe this
proposal will meet the Communications Act's mandate to assure the
commercial availability of competitive devices?
Answer. While I am a proponent of an apps-based approach for
consumer video access, the Commission's recent regulatory proposal has
many serious flaws, one of which is its questionable technical
feasibility. The ability of MVPD systems to support any given solution
and deploy it to all of their customers should be a paramount
consideration if the Commission ultimately moves forward with its
efforts.
______
Response to Written Questions Submitted by Hon. John Thune to
Hon. Mignon L. Clyburn
Question 1. As part of the Spectrum Frontiers Order, the FCC made
available nearly 11 GHz of spectrum, but less than 4 GHz of that will
be made available on a licensed basis. And a portion of that licensed
spectrum will be allocated on a shared basis.
A. I believe that there should be a balance between licensed and
unlicensed spectrum. Does this Order strike the proper balance? If so,
please explain why.
Answer. Thank you for the question, Mr. Chairman. The Commission's
overall spectrum policy should seek to achieve a balance of licensed,
unlicensed and shared access spectrum to enable established industry
players as well as entrepreneurs to develop innovative service
offerings for consumers. I believe that the Spectrum Frontiers Order
and Further Notice, a bipartisan effort that was based on a fully
developed record, did just that. Due to its propagation
characteristics, the 64-71 GHz band is not well suited for licensed
use; thus, it was allocated for unlicensed use.
B. Should the Commission look for more licensed spectrum as it
considers additional high frequency bands in its further notice?
Answer. Yes. In the Further Notice, the Commission, recognizing the
relative proportions of spectrum allocated for licensed and unlicensed
use in the Order, proposed to make an additional 18 GHz of spectrum
available for licensed use.
Question 2. The Commission has proposed an exception to the local
media cross-ownership ban that would allow a broadcaster to invest in a
newspaper when it is ``failing.'' This exception for cases in which a
newspaper is ``failing'' renders little value to a newspaper that needs
investments now, well before it is ``failing.'' By the time a newspaper
is ``failing,'' a local broadcaster may no longer see it as a
worthwhile investment--particularly in light of the consumer trend
toward digital and mobile applications for news and entertainment.
Shouldn't the Commission be seeking ways to encourage investment in
newspapers before they get to a state of ``failing,'' and before such
newspapers may have to make the difficult decision to cut back on local
reporting resources?
Answer. Thank you for the question. My ultimate goal, consistent
with the Commission's statutory mandate, is to ensure strong, local and
diverse voices throughout the broadcast television, radio as well as
newspaper industries. The Commission, as you know, adopted the failed
or failing newspaper or broadcast station waiver as one way to inject
new investment opportunities. I remain open to looking at other ways to
support investment in the newspaper business. In assessing whether
further changes should be made to the Commission's ownership rules, I
would look to ensure we do not reduce the number of local voices; that
we have a comprehensive picture of how the incentive auction has
impacted local markets; and that we simultaneously address the dismal
state of media ownership diversity.
______
Response to Written Question Submitted by Hon. Roger F. Wicker to
Hon. Mignon L. Clyburn
Question. What impact do you anticipate the FCC's proposed changes
to existing rural wireless USF support mechanisms might have on
critical services, like remote patient monitoring and precision
agriculture applications, that rely on USF-supported wireless networks
to function today? Can you assure me that the changes to wireless USF
support mechanisms you are considering will do no harm to these
existing services?
Answer. Thank you for the question, Senator. As you know, I have
been a vocal proponent of the Mobility Fund for years, and am looking
forward to the day the Commission makes it permanent. I anticipate that
changing these support mechanisms to better target the funding to where
it is most needed means that more Americans will be able to take
advantage of services you speak of that rely on mobile wireless. Sadly,
according to recent FCC staff analysis, about 1.5 million Americans
still have no access to 4G LTE where they live. Our ultimate goal is to
make sure more Americans to have access to not only the critical
applications and services of today, but those of tomorrow. Moving
forward on the Mobility Fund will help bring that goal closer to
reality.
______
Response to Written Question Submitted by Hon. Maria Cantwell to
Hon. Mignon L. Clyburn
Question. We have a rapidly-changing media market. I think people
still want local news and access to a variety of content. One key
evolution is the method of consuming that content. Now we are as likely
to read or watch the news on smart phones as we are to pick up a
newspaper or turn on the TV. What are your thoughts on how the
Commission can get better information to make the best public interest-
based decisions on media consolidation going forward?
Answer. Thank you for the question, Senator. I wholeheartedly agree
that local news and information from a variety of viewpoints is at the
heart of a vibrant media landscape and it is what consumers expect. As
I stated during the Commission's recent Quadrennial Review proceeding,
to satisfy judicial scrutiny and demonstrate the Commission's
commitment to ownership diversity that is so desperately needed, we
need a robust record . . . in a word, data. I also believe that the
completion of the incentive auction presents an opportunity to
thoroughly assess the state of media ownership and determine whether
the Commission's rules correctly align with recent changes.
I stand ready to work with my fellow Commissioners and interested
researchers to fulfill this goal so that the Commission has the
information it needs to ensure that the right policies are in place to
promote a vibrant and diverse media landscape.
______
Response to Written Question Submitted by Hon. Joe Manchin to
Hon. Mignon L. Clyburn
Question. I applaud the Commission's continued efforts to promote
competition in the set-top box marketplace. Getting rid of set-top
boxes in favor of an ``apps-based'' approach should reduce direct
consumer costs. But innovations available to urban and suburban
consumers should be available to rural consumers as well. And I remain
concerned about the West Virginians who still do not have access to
affordable, reliable broadband service--or do not have broadband
service at all. These West Virginians may be forced to keep a set-top
box in their households. For these rural consumers, do you believe this
proposal will meet the Communications Act's mandate to assure the
commercial availability of competitive devices?
Answer. You raise an important question and one that I believe can
be satisfactorily addressed through an ``apps-based'' approach. As you
may know, today cable companies can deliver an app as a Title VI cable
service or through the Internet as an over-the-top service. The cable
industry has assured the Commission that they are able to deliver their
app as a Title VI service, meaning that consumers could purchase a
competitive device without needing an Internet connection. Similarly,
it is my understanding that satellite providers also have the
capability to deliver an apps-based approach to consumers without a
broadband connection.
Independent of this proceeding, your question reiterates to me why
it is imperative that the Commission have a laser-focus on bringing
robust, affordable broadband services to all Americans, whether they
live in an urban or a rural area.
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