[Senate Hearing 114-175]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 114-175

                           OVERSIGHT OF THE 
                   FEDERAL COMMUNICATIONS COMMISSION

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

                                HEARING

                               BEFORE THE

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 18, 2015

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation
                             
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


                               ___________
                               
                               
                           U.S. GOVERNMENT PUBLISHING OFFICE
98-498 PDF                     WASHINGTON : 2016                           

________________________________________________________________________________________    
For sale by the Superintendent of Documents, U.S. Government Publishing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, 
U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free). 
E-mail, [email protected].  
   
       
       
       
       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST 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
                    David Schwietert, Staff Director
                   Nick Rossi, Deputy Staff Director
                    Rebecca Seidel, General Counsel
                 Jason Van Beek, Deputy 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 March 18, 2015...................................     1
Statement of Senator Thune.......................................     1
Statement of Senator Nelson......................................     3
    Letter dated March 16, 2015 from the Leadership Conference on 
      Civil and Human Rights.....................................    82
Statement of Senator Fischer.....................................    31
Statement of Senator McCaskill...................................    33
Statement of Senator Heller......................................    35
    Prepared statement...........................................    35
Statement of Senator Blumenthal..................................    38
Statement of Senator Markey......................................    40
    Letter dated March 18, 2015 from 140 advocacy groups and 
      companies supporting the Title II decision of the Federal 
      Communications Commission..................................    41
Statement of Senator Gardner.....................................    44
Statement of Senator Booker......................................    46
Statement of Senator Daines......................................    48
Statement of Senator Schatz......................................    51
Statement of Senator Cantwell....................................    52
Statement of Senator Johnson.....................................    54
Statement of Senator Moran.......................................    57
Statement of Senator Cruz........................................    60
Statement of Senator Peters......................................    63
Statement of Senator Rubio.......................................    64
Statement of Senator Ayotte......................................    68
Statement of Senator Klobuchar...................................    70
Statement of Senator Wicker......................................    72
Statement of Senator Sullivan....................................    74
Statement of Senator Manchin.....................................    77

                               Witnesses

Hon. Tom Wheeler, Chairman, Federal Communications Commission....     5
    Prepared statement...........................................     6
Hon. Mignon L. Clyburn, Commissioner, Federal Communications 
  Commission.....................................................    14
    Prepared statement...........................................    15
Hon. Michael O'Rielly, Commissioner, Federal Communications 
  Commission.....................................................    17
    Prepared statement...........................................    18
Hon. Ajit Pai, Commissioner, Federal Communications Commission...    20
    Prepared statement...........................................    21
Hon. Jessica Rosenworcel, Commissioner, Federal Communications 
  Commissioner...................................................    25
    Prepared statement...........................................    26

                                Appendix

Article dated January 2015 by Lawrence J. Spivak, Journal of 
  Internet Law, entitled ``What Are the Bounds of the FCC's 
  Authority over Broadband Service Providers?--A Review of the 
  Recent Case Law''..............................................    95
Letter dated February 2, 2015 to Chairman Thomas Wheeler, 
  Commissioners Mignon Clyburn, Jessica Rosenworcel, Ajit Pai, 
  and Michael O'Rielly from the American Association of 
  Healthcare Administrative Management (AAHAM), ACA 
  International, American Council of Life Insurers (ACLI), 
  American Financial Services Association (AFSA), American 
  Insurance Association (AIA), Child Support Enforcement Council 
  (CSEC), Coalition of Higher Education Assistance Organizations 
  (COHEAO), Computer & Communications Industry Association 
  (CCIA), Consumer Bankers Association (CBA), DBA International, 
  Education Finance Council (EFC), Independent Bankers 
  Association of Texas (IBAT), Marketing Research Association 
  (MRA), Mobile Marketing Association (MMA), National Association 
  of Chain Drug Stores (NACDS), National Association of College 
  and University Business Officers (NACUBO), National Association 
  of Manufacturers, National Association of Mutual Insurance 
  Companies (NAMIC), National Association of Retail Collection 
  Attorneys (NARCA), National Association of Student Financial 
  Aid Administrators (NASFAA), National Cable & 
  Telecommunications Association, National Council of Higher 
  Education Resources (NCHER), National Restaurant Association, 
  National Retail Federation (NRF), National Rural Electric 
  Cooperative Association (NRECA), Professional Association for 
  Customer Engagement (PACE), Retail Industry Leaders Association 
  (RILA), Satellite Broadcasting & Communications Association 
  (SBCA), Silver Users Association, State Creditor Bar 
  Associations, Student Loan Servicing Alliance (SLSA) & SLSA 
  Private Loan Committee, Telecommunications Risk Management 
  Association (TRMA), U.S. Chamber of Commerce, U.S. Chamber 
  Institute for Legal Reform, Virginia Small Business Partnership   112
Letter dated March 17, 2015 to the Committee on Commerce, 
  Science, and Transportation and the Committee on Energy and 
  Commerce from Daniel Berninger, Founder, VCXC..................   115
Response to written questions submitted to Hon. Tom Wheeler by:
    Hon. John Thune..............................................   116
    Hon. Roger F. Wicker.........................................   118
    Hon. Roy Blunt...............................................   120
    Hon. Deb Fischer.............................................   121
    Hon. Jerry Moran.............................................   123
    Hon. Dan Sullivan............................................   129
    Hon. Dean Heller.............................................   130
    Hon. Maria Cantwell..........................................   132
    Hon. Cory Booker.............................................   134
    Hon. Tom Udall...............................................   135
    Hon. Joe Manchin.............................................   142
Response to written questions submitted to Hon. Mignon L. Clyburn 
  by:
    Hon. John Thune..............................................   144
    Hon. Roy Blunt...............................................   146
    Hon. Deb Fischer.............................................   147
    Hon. Dean Heller.............................................   148
    Hon. Cory Booker.............................................   149
Response to written questions submitted to Hon. Michael O'Rielly 
  by:
    Hon. John Thune..............................................   151
    Hon. Roy Blunt...............................................   151
    Hon. Deb Fischer.............................................   152
    Hon. Dean Heller.............................................   152
Response to written questions submitted to Hon. Ajit Pai by:
    Hon. John Thune..............................................   153
    Hon. Roy Blunt...............................................   153
    Hon. Deb Fischer.............................................   154
    Hon. Dean Heller.............................................   154
Response to written questions submitted to Hon. Jessica 
  Rosenworcel by:
    Hon. John Thune..............................................   155
    Hon. Deb Fischer.............................................   157
    Hon. Dean Heller.............................................   157
    Hon. Cory Booker.............................................   158

 
                           OVERSIGHT OF THE 
                   FEDERAL COMMUNICATIONS COMMISSION

                              ----------                              


                       WEDNESDAY, MARCH 18, 2015

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:34 p.m. in room 
SR-253, Russell Senate Office Building, Hon. John Thune, 
Chairman of the Committee, presiding.
    Present: Senators Thune [presiding], Nelson, Wicker, Blunt, 
Rubio, Ayotte, Heller, Cruz, Fischer, Sullivan, Moran, Johnson, 
Gardner, Daines, Cantwell, McCaskill, Klobuchar, Blumenthal, 
Schatz, Markey, Booker, Udall, Manchin, and Peters.

             OPENING STATEMENT OF HON. JOHN THUNE, 
                 U.S. SENATOR FROM SOUTH DAKOTA

    The Chairman. Good afternoon. This hearing will come to 
order. It is great to have all five of our FCC Commissioners 
with us today. We want to welcome you and we have generated a 
bit of a crowd. Looks like there's an interest in some of these 
subjects I think here, Senator Nelson.
    Senator Nelson. Indeed.
    The Chairman. So let me just start with my remarks, and 
then I'll yield to my distinguished Ranking Member, the Senator 
from Florida, Senator Nelson, for his remarks. And then, we're 
going to ask the FCC Commissioners, if they could, to confine 
their remarks to about 3 minutes so we can get to the question 
and answer, which I think what everybody here around is 
interested in.
    So welcome to today's oversight hearing on the Federal 
Communications Commission. Every day every single American 
relies on some part of our Nation's vast communications system; 
the Internet, the telephone, television, GPS, or the radio. An 
efficient, effective communications system is the bedrock of 
our Nation's economy and it's the tie that binds together our 
twenty-first century society.
    The FCC sits right in the middle of America's digital 
world. And this is even more true following the FCC's recent 
decision to turn our Nation's broadband Internet infrastructure 
into a public utility. It is apparent from that action last 
month, the FCC is also potentially threatening an unpredictable 
agency as it struggles to operate under legal authority that 
was designed nearly 100 years ago and not seriously updated in 
decades.
    To be clear, today's hearing is not a response to the Title 
II order, but clearly no discussion about the FCC can ignore 
one of the most significant and most controversial decisions in 
the agency's history. My views on this subject are well known. 
I believe there should be clear rules for the digital road with 
clear authority for the FCC to enforce them. I put forward a 
draft bill with my House colleagues to begin the legislative 
discussion about how best to put such rules into statute. Like 
most first drafts, our draft bill is not perfect.
    I invite members of this Committee and stakeholders from 
across the political spectrum to offer us ideas on how we can 
improve it so that the final draft can win bipartisan support 
and provide everyone in the Internet world with the certainty 
that they need.
    The FCC's recent action accomplished the exact opposite. 
Rather than exercising regulatory humility, the three majority 
Commissioners chose to take the most radical, polarizing, and 
partisan path possible. Instead of working with me and my 
colleagues in the House and the Senate on a bipartisan basis to 
find a consensus, the three of you chose an option that I 
believe will only increase political, regulatory, and legal 
uncertainty, which will ultimately hurt average Internet users. 
Simply put, your actions jeopardize the open Internet that we 
are all seeking to protect.
    The tech and telecom industries agree on few regulatory 
matters, but there was one idea that unified them for nearly 
two decades: the Internet is not the telephone network and you 
cannot apply the old rules of telecom to the new world of the 
Internet. Three weeks ago, three regulators turned their backs 
on that consensus, and I believe the Internet and its users 
will ultimately suffer for it.
    The debate over the open Internet illustrates the 
importance of the FCC, which makes it all the more amazing that 
Congress has not reauthorized the FCC since then-Representative 
Markey's bill was passed a quarter century ago. Indeed, the FCC 
is the oldest expired authorization within this Committee's 
expansive jurisdiction, a situation that I intend to rectify in 
this Congress.
    Today's hearing marks the beginning of the Commerce 
Committee's efforts to write and pass legislation to 
reauthorize the FCC. I know that contentious matters like Title 
II divide the membership of this committee, but FCC 
reauthorization is an area where I believe Republicans and 
Democrats can and should work together. Wanting the FCC to be 
an effective, efficient, and accountable regulator shouldn't be 
a partisan goal. I know members on both sides of the aisle have 
common sense ideas to make the agency more responsive to the 
needs of consumers, Congress, and regulated companies alike and 
I look forward to hearing their suggestions and views. And I 
look forward to hearing the Commissioners' thoughts today about 
ways Congress can help their agency improve.
    Writing a new FCC reauthorization bill should not be a one-
off effort. It is my hope that the Committee will get back to 
regularly authorizing the Commission as part of its normal 
course of business. In order to do that effectively, the 
Committee must be diligent in its oversight. As such, the 
Commission should expect to come before this Committee again.
    How the Commission works is just as important as what the 
Commission does. In addition to discussing important 
communications policy matters, I hope members will use today's 
hearing to explore the Commission's operations, processes, and 
budget. For example, the FCC has requested $530 million for 
Fiscal Year 2016. This funding level will be the highest in the 
Commission's history. That alone raises eyebrows, particularly 
when American households continue to do more with less in this 
stagnant economy, but the FCC also wants to fund this increase 
in part by raiding the Universal Service Fund.
    Paying for record high budgets by siphoning money from USF 
is a dangerous precedent. While members of this Committee may 
have varying views on the USF's efficiency, scope, and growth, 
one thing I think we can all agree on is that its limited funds 
should not be used as a reserve fund to pay for the FCC's core 
statutory functions. That's what the Commission's regulatory 
fees are for. USF funds should pay for USF services, and I 
don't believe the FCC should jeopardize the stability and 
integrity of the Universal Service Fund in order to paper over 
its record high budget request.
    Given the significant interest in hearing from the 
Commission today, I do not expect this hearing will be a short 
one. In order to more quickly get to Members' questions, I have 
asked that all of the witnesses limit their oral statements to 
3 minutes apiece. The longer written statements will be 
submitted for the record.
    I look forward to hearing from our Commissioners today in 
what I hope will be a productive afternoon. And, with that, I 
would yield to my Ranking Member, Senator Nelson.

                STATEMENT OF HON. BILL NELSON, 
                   U.S. SENATOR FROM FLORIDA

    Senator Nelson. Thank you, Mr. Chairman.
    A few weeks ago, everybody in this room today knows that 
the FCC responded to the D.C. Circuit Court and responded to 4 
million Americans by restoring essential protections for 
consumers and competition on the Internet. Obviously, there's 
going to be a lot of discussion today about the content and the 
development of those rules. And there will be much scrutiny on 
the legal justification that the FCC used to support its 
adoption of the rules.
    Now, while those legal means are important, in fact, they 
are the statutory tools Congress gave the FCC to perform its 
job, and we must not lose sight of the results of this 
rulemaking in terms of the protections that the FCC adopted.
    As this Senator has said repeatedly, as I have discussed 
with the Chairman, I remain open to a truly bipartisan 
congressional action provided that such action fully protects 
consumers, does not undercut the FCC's role, and leaves the 
agency with flexible, forward-looking authority to respond to 
the changes in this dynamic broadband marketplace, so much of 
which what we think we know today is often changed because of 
the rapidity of development of technology.
    Many of you have heard me speak of Title X as a yet to be 
defined title. And I use the term as a way to think beyond the 
rhetoric that has now engulfed this political argument. The key 
question for me is we must ask: How, or is it possible, to take 
what the FCC has done and provide certainty that only 
legislation signed into law can provide? It is part of the 
larger debate on the appropriate role of our laws and 
regulations in the broadband age. And as we have that broader 
discussion, I invite you, Mr. Chairman Wheeler, to continue to 
work with us to craft the right policies to accomplish that 
goal.
    As important as the issue of net neutrality is to this 
nation, we should never forget the other vital work that is 
done by the FCC. With ongoing regulatory oversight over as much 
as one-sixth of our Nation's economy, this agency plays a 
critical role in ensuring universal access and promoting 
competition and protecting public safety and protecting 
consumers.
    The FCC recently closed the biggest spectrum auction in 
history, $41 billion, and funding the nationwide public safety 
wireless broadband network and providing $20 billion for 
deficit reduction. That's huge. And it is in the midst of 
planning for the voluntary broadcast television incentive 
auction; a new form of spectrum auction that could 
fundamentally change the Nation's spectrum policy. Yet we can't 
rest and, when it comes to spectrum, continued public and 
private technological development will continue to put strains 
on our spectrum resources going forward. Congress, the FCC, and 
the rest of the Federal Government needs to work together to 
develop a smart, forward-looking spectrum policy. And I 
certainly, this one Senator, will certainly try to help that 
effort.
    The FCC is also overseeing the ongoing evolution of the 
nation's communication networks, known as IP transition. One of 
the trial projects associated with IP transition is proposed in 
my state. I'm looking forward to an update on that.
    Generally, I have concerns about how the IP transition 
might affect public safety; so we can get in that. And the FCC 
has done a lot to modernize its Universal Service Fund 
programs, including expanding the E-Rate program.
    What one of us Senators has not been involved in E-Rate and 
promote it?
    And this program provides critical support for our nation's 
schools and their libraries. The enhancements, the increased 
funding will help guarantee the nation's students have access 
to twenty-first century technology, not just some of the kids 
in this country.
    And I also appreciate the work that the FCC has done to 
increase the availability of affordable high-speed broadband in 
rural areas around the country. I encourage you to redouble 
that effort to ensure there's not this digital divide that 
keeps going on; that urban kids get one things and rural kids 
get another.
    I want to thank Chairman Wheeler and the FCC staff on 
improving the agency's consumer complaints department. Senator 
Udall and I sent a letter to the FCC last year asking them to 
upgrade the Commission's consumer complaint website to make it 
more user-friendly and the Chairman delivered. The new consumer 
complaint website is light years ahead of the previous system, 
and I hope that we can continue to see the additional upgrades.
    I want to thank all of the five FCC commissioners for your 
public service. I want to thank you for subjecting yourself to 
five committee hearings--no, eight committee hearings in 5 
days.
    And, Mr. Chairman, I thank you for the privilege of serving 
with you on this Committee.
    The Chairman. Thank you, Senator Nelson. I share that, and 
we'll look forward to working together on a lot of these issues 
in the days and weeks and months ahead. And with our colleagues 
on this Committee on both sides of the aisle, some important 
work to be done.
    We're going to start by hearing from our Commissioners 
starting with the Chairman, Tom Wheeler, who will kick it off 
and then we'll go in alphabetical order after that, with 
Commissioner Clyburn, Commissioner O'Rielly, Commissioner Pai, 
and Commissioner Rosenworcel. So thank you for being here. 
Welcome.
    Chairman Wheeler, please proceed.

           STATEMENT OF HON. TOM WHEELER, CHAIRMAN, 
               FEDERAL COMMUNICATIONS COMMISSION

    Mr. Wheeler. Thank you very much, Mr. Chairman. It's a 
privilege to be here with my colleagues. We're five type-A 
individuals who have been working together for the public 
interest.
    Let me make three quick observations in keeping with your 
three-minute rule. One, the open Internet decision as you 
indicated is a watershed. Your leadership, Mr. Chairman, has 
illustrated that there really aren't any differences about the 
need to do something. As you said today, we need clear rules. 
There are different approaches, to be sure.
    [Disturbance in hearing room.]
    The Chairman. Sorry, Mr. Chairman. Please proceed.
    Mr. Wheeler. Thank you, Mr. Chairman.
    As I said, there are different approaches that we take on 
open Internet to be sure, and I have no doubt we'll be 
discussing those. We've completed our work. Strong open 
Internet rules will soon be in place.
    But let me touch on a couple other issues real quickly. One 
is that there's a national emergency in emergency services. 
Congress holds the key to that issue. The vast majority of 
calls to 9-1-1 services now, as you know, come from mobile. We 
had a unanimous decision of our Commission just a few weeks ago 
to require 9-1-1 location capability from wireless callers. The 
carriers are stepping up but delivering location information 
from the phone is only the front-end of the problem. There is 
no national policy on how to maximize the lifesaving potential 
that is now being delivered as the result of the carrier's 
activity and our rules.
    There was an example, a tragic example, in Georgia just a 
few weeks ago. A lady by the name of Shanell Anderson who was 
calling from a sinking car in the middle of a lake and her call 
was picked up by an antennae in a different public safety 
answering points jurisdiction. And you can hear this 
heartbreaking conversation with her as she says where she is 
and the dispatcher keeps saying, ``I can't find it. I can't 
find it.''
    Because this other jurisdiction didn't have the maps as to 
where this woman was all because of the vagaries of how a 
wireless signal gets distributed. There is a real opportunity. 
The 6,500 different public safety answering points are staffed 
by dedicated, qualified individuals, but there is an absence of 
a Federal program that recognized that mobile has changed the 
nature of 9-1-1 and we can't just worry about the signal coming 
from a caller. We've got to worry about what happens to make 
sure that that signal is used.
    And just let me be real clear on one thing. This is not an 
FCC power grab. I don't care how this gets done, where it goes, 
in terms of responsibility, but we have a responsibility to 
Americans to make sure that the information that we as a 
Commission are requiring be transmitted actually can get put to 
lifesaving uses. And the Congress has the ability to do 
something about that.
    My second quick issue: The broadband progress report that 
we recently released found that rural America is falling behind 
in broadband. The disparity between rural and urban America, as 
Senator Nelson suggested, is unacceptable. Only 8 percent of 
urban Americans lack high-speed broadband but 53 percent of 
rural Americans do. We tackled part of that with the E-Rate 
modernization and the rural fiber gap for schools. Forty 
percent of rural schools are without access to fiber. They now 
have alternatives under the new rules.
    The Commission recently revised the support mechanism for 
price-cap carriers, an additional $1.8 billion from Universal 
Service Fund, to upgrade their activities. And in areas that 
are not participating began the process that will lead to an 
auction next year where alternative providers can step up and 
say, ``No, I will provide service.'' And in an experiment 
leading up to that have put $100 million out to actually test 
alternative pathways.
    We plan to act on rate-of-return carriers this year to 
create a voluntary path for those who elect to receive defined 
amount of funding to deal with the tying of voice and broadband 
together which is a problem that they experience, to deal with 
replacing the infamous QRA. And that's a process that would be 
greatly facilitated if stakeholders could agree on a common 
solution.
    So I thank you, Mr. Chairman and Members of the Committee, 
for the opportunity to be before you. I look forward to 
discussing any of the issues that you want to discuss as we go 
further.
    [The prepared statement of Mr. Wheeler follows:]

           Prepared Statement of Hon. Tom Wheeler, Chairman, 
                   Federal Communications Commission
I. Introduction
    Chairman Thune, Ranking Member Nelson, and Members of the 
Committee, I appreciate the opportunity to join with my colleagues to 
appear before you regarding oversight of the Federal Communications 
Commission.
    Since becoming FCC Chairman in November 2013, I have been clear 
that the agency should be focused on two over-arching priorities:

        first, facilitating dynamic technological change to enable 
        economic growth and to promote U.S. leadership; and second, 
        ensuring that our communications networks reflect certain core 
        civic values--universal access, competition, public safety, and 
        consumer protection.

    I have also been clear from the outset that what the agency can 
accomplish depends on how we do our business. Accordingly, I have made 
improving agency operations and processes a top priority.
    Thanks to the tireless efforts of the Commission's outstanding 
professional staff, the agency has posted a significant record of 
achievement in support of these goals. I look forward to discussing 
these accomplishments with the Committee today and working with you and 
my fellow Commissioners to build on this progress and bring the 
benefits of broadband to all Americans.
II. Promoting Economic Growth and U.S. Leadership
    Broadband Internet--wired and wireless--is the indispensable 
infrastructure of our information economy. A vibrant broadband 
ecosystem is also critical to America's global economic 
competitiveness. Driven by innovative American companies and 
entrepreneurs, the U.S. is the clear global leaders in advanced 
wireless networks, devices, and applications. To enable economic growth 
and continued U.S. leadership, the Commission is focused on promoting 
fast, fair, and open broadband networks and unleashing spectrum to 
enable mobile innovation.
A. Fast, Fair, and Open Networks
    There are three simple keys to the broadband future. Broadband 
networks must be fast, fair, and open. Fast networks enable new 
products and services and remove bandwidth as a constraint on 
innovation. Fair networks ensure consumers have competitive choices. 
Open networks allow innovation without permission and freedom of 
expression. The FCC's challenge is to achieve the goal of networks that 
are fast, fair, and open for all Americans and the equally legitimate 
goal of preserving incentives for investment in broadband 
infrastructure.
Open Internet Order
    In January 2014, most of the FCC's Open Internet rules were struck 
down in court, eliminating the Commission's ability to be a cop on the 
beat--be it through principles, rules, or otherwise--to effectively 
deter or punish harmful behavior by ISPs. The Commission acted 
immediately to begin a process to restore Open Internet protections. 
Over the past year, we received input from nearly 4 million Americans 
in the one of the most transparent proceedings this Commission has ever 
run. There was a 130-day public comment period. We held six roundtable 
discussions with experts on legal, technical, and market issues. We 
heard from and responded to over 140 members of Congress. Our team had 
dozens of meetings with Congressional staff. I spoke with--and listened 
to--hundreds of consumers, innovators, and entrepreneurs in meetings 
across the country.
    On February 26, 2015, after a year-long process and a decade of 
debate, the FCC adopted bright line Open Internet protections that ban 
blocking, throttling, and paid prioritization. These rules will fully 
apply to fixed and mobile broadband. The Order also includes a general 
conduct rule that can be used to stop new and novel threats to the 
Internet. That means there will be basic ground rules to assure 
Internet openness and a referee on the field to enforce them.
    The FCC's Open Internet Order should reassure consumers, 
innovators, and the financial markets about the broadband future of our 
Nation.
    Consumers now know that lawful content online will not--cannot--be 
blocked or their service throttled. Internet users can say what they 
want and go where they want, when they want--whether they access the 
Internet on their desktop computer or on their smartphones.
    Innovators now know they will have open access to consumers without 
worrying about pay-for-preference fast lanes or gatekeepers. 
Entrepreneurs will be able to introduce new products and services 
without asking anyone's permission.
    Financial markets now know that there will be common sense Open 
Internet protections in place that rely on a modernized regulatory 
approach that has already been demonstrated to work--not old-style 
utility regulation. The rules under which the wireless voice industry 
invested $300 billion to build a vibrant and growing business are the 
model for the rules the Commission adopted. That means no rate 
regulation, no tariffing, and no forced unbundling. The new rules 
ensure ISPs continue to have the economic incentives to build fast and 
competitive broadband networks.
Community Broadband Petitions
    Last year, the leaders of Chattanooga, Tennessee and Wilson, North 
Carolina petitioned the FCC asking the agency to preempt laws enacted 
by state legislatures that prohibit them from expanding their 
successful community-owned broadband networks.
    The Commission respects the important role of state governments in 
our Federal system, and we do not take the step of preempting state 
laws lightly. But it is a well-established principle that state laws 
that directly conflict with Federal laws and policy may be subject to 
preemption in appropriate circumstances.
    Congress instructed the FCC to encourage the expansion of broadband 
throughout the Nation. Consistent with this statutory mandate, the 
Commission voted to preempt restrictive state laws in North Carolina 
and Tennessee that hamper investment and deployment of broadband 
networks in areas where consumers would benefit from greater levels of 
broadband service.
    The Commission's action will get rid of state-level red tape, which 
served as nothing more than a barrier to broadband competition, and 
allow communities to determine their own broadband future.
Broadband Progress Report
    Section 706 of the Communications Act instructs the Commission to 
``determine whether advanced telecommunications capability is being 
deployed to all Americans in a reasonable and timely fashion'' and 
report to Congress annually. Since 2010, the benchmark for advanced 
communications has been 4 megabits per second (Mbps) down, 1 Mps up. 
Four Mbps is less than the recommended capacity to stream a single HD 
video. Now consider that the average connected household has seven 
Internet-connected devices including televisions, desktops, laptops, 
tablets, and smartphones. If you were to look at the ISPs marketing 
materials, they recommend speeds of 25 Mbps or higher if you plan on 
using multiple connected devices at the same time.
    In January, the Commission established a new definition for 
advanced telecommunications capability as 25 Mbps down, 3 Mbps up. This 
new standard already holds for 83 percent of U.S. homes. But we have a 
problem when 17 percent of U.S. households can't access broadband at 
this new standard, with rural and Tribal areas disproportionately left 
behind. This new standard is an impetus for meaningful improvements in 
the availability of true high-speed networks for all Americans and also 
an invitation to innovation that is enabled by increased throughput.
Removing Barriers to Broadband Deployment
    The private sector must play the leading role in extending fast, 
fair, and open broadband networks to every American. That's why the FCC 
is committed to removing barriers to investment and to lowering the 
costs of broadband build-out. We have made great strides in this area 
in the past year, and there is more to come. Last August, we 
substantially reformed tower lighting and marking requirements, which 
greatly eased compliance burdens for tower owners without any adverse 
impact on aviation safety. In October, we adopted changes to facilitate 
the process--at the Federal and state level--for deploying small-cell 
wireless systems and other installations that have no impact on 
historic properties.
    Looking ahead, we have launched an effort to streamline further the 
Federal review for deployments of the small cell and distributed 
antenna systems that will power wireless broadband in the future. We 
have committed to wrapping up this effort by mid-2016, which is an 
aggressive schedule considering the wide consultation we are required 
to pursue with all stakeholders, including the Advisory Council on 
Historic Preservation, Tribal Nations, and State historic preservation 
offices.
    We have also been working closely with industry and other 
stakeholders to craft an approach to bring into compliance towers that 
may have been built without the historic preservation reviews required 
by statute. Once complete, this will open up thousands of towers for 
collocations, eliminating the need for new construction and excavation 
in many cases. The tower industry is working directly with us on this 
initiative, and they have committed to providing us with information 
about these towers by early June.
    In addition, we have launched a project to modernize the Tribal 
Nation consultation by establishing clear parameters for the 
information tower constructors must provide and the deadlines that 
apply to any responses or objections from Tribal Nations.
    Finally, we recognize that industry can face greater expense and 
delay when a project's Federal funding or physical location requires 
them to work with disparate Federal agencies to gain approval. To 
address this, we are taking the lead with our Federal agency partners--
including FirstNet, the Rural Utility Service, and the Federal Railway 
Administration--to clarify and simplify the Federal review process in 
cases of overlapping jurisdiction.
B. Spectrum
    No sector holds more promise for new innovations that will grow our 
economy, create jobs, and improve our quality of life than mobile 
broadband. Consider that the ``app economy'' didn't exist until 2008, 
and it is already sustains more than 600,000 U.S. jobs. Mobile is also 
an essential pathway to the Internet, accounting for more than 60 
percent of Internet usage. Spectrum is the oxygen that sustains our 
mobile networks, and more spectrum is needed to meet the increasing 
demand for mobile broadband. In 2014, the spectrum pipeline re-opened, 
and the Commission is working to make sure more spectrum can and will 
be made available on terms that promote competition and consumer 
choice.
AWS-3 Auction
    Auctions are one of the Commission's tools to meet the Nation's 
demand for wireless broadband. This January, we closed bidding on The 
AWS-3 auction (Auction 97), which was a huge success. It marked a new 
era in spectrum policy, where a collaborative and unprecedented effort 
resulted in new commercial access to Federal spectrum bands. A 
bipartisan group of leaders in Congress, Federal agencies--especially 
NTIA and DOD, industry, and the team at the FCC all came together to 
help meet the Nation's demand for wireless broadband.
    The AWS-3 auction made available an additional 65 megahertz of 
spectrum to improve wireless connectivity across the country and 
accelerate the mobile revolution that is driving economic growth and 
improving the lives of the American people. It also generated more than 
$41 billion in net bids. In particular, this auction will fully fund $7 
Billion for FirstNet's nationwide public safety broadband network. It 
will also deliver $300 Million to public safety; $115 Million in grants 
for 911, E911, and NextGen 911 implementation; and more than $20 
Billion for deficit reduction; all while paying for the spectrum 
relocation efforts of DOD and other Federal agencies.
H-Block
    The spectrum spigot was re-opened in February 2014, when the 
Commission auctioned the 10 megahertz H-Block. This was the first major 
auction of mobile broadband spectrum since 2008. The H-Block auction 
succeeded in putting this spectrum to work in the marketplace and 
raised more than $1.5 billion, much of which served as a down payment 
on the deployment of FirstNet's public safety network.
Incentive Auction
    All eyes are now on the upcoming Incentive Auction. Such attention 
is warranted. This first-in-the-world auction could revolutionize how 
spectrum is allocated. By marrying the economics of demand with the 
economics of current spectrum holders, the Incentive Auction will allow 
market forces to determine the highest and best use of spectrum, while 
providing a potentially game-changing financial opportunity to 
America's broadcasters.
    The FCC staff has been working tirelessly to design the auction 
ever since Congress authorized it in February 2012. In May 2014, the 
Commission adopted a Report and Order that set out the ground rules for 
the auction.
    This past December, we initiated a public comment period, making 
detailed proposals about how key aspects of the auction will work.
    We realize that broadcasters' participation is critical to the 
success of the Incentive Auction, and we are continuing our broadcaster 
outreach and education efforts. In February 2015, the Incentive Auction 
Task Force released an updated information packet, which, for the first 
time, has opening bid prices, based on the proposals in the 
Commission's December Public Notice. The Task Force has also started 
holding its field visits in every region of the Continental U.S., 
including both larger and smaller television markets.
    Thanks to these efforts, we are on track to conduct an Incentive 
Auction in the first quarter of 2016. We are confident that there will 
be high demand for this valuable low-band spectrum, which will help 
ensure a successful auction.
Mobile Spectrum Holdings
    The Commission is not only committed to making available more 
spectrum for mobile broadband, it is also committed to promoting 
competition in the mobile marketplace. In May 2014, the Commission 
adopted a reasonable, balanced Report and Order updating our mobile 
spectrum holding policies to ensure a healthy mobile marketplace with 
clear rules of the road for spectrum aggregation. In particular, the 
Order will help ensure competitive access to ``low-band'' spectrum that 
we will make available in the Incentive Auction, which is best suited 
for transmitting wireless communications over long distances and 
through walls. Such low-band spectrum is critical to companies' ability 
to compete in today's wireless marketplace.
Unlicensed Use (5 GHz)
    The Commission is working to make available not only licensed 
spectrum, but also unlicensed spectrum, which has enabled breakthrough 
innovations like Wi-Fi and Bluetooth. In March 2014, the Commission 
adopted an order to take 100 MHz of unlicensed spectrum at 5 GHz that 
was barely usable--and not usable at all outdoors--and transform it 
into spectrum that is fully usable for Wi-Fi. This was a big win for 
consumers who will be able to enjoy faster connections and less 
congestion, as more spectrum will be available to handle Wi-Fi traffic. 
But we cannot stop there. We have been and will continue work with our 
Federal partners and the transportation industry to find technical 
solutions that will enable the use of an additional 195 megahertz of 
spectrum for shared unlicensed use in the 5 GHz band.
Citizen's Broadband Service (3.5 GHz)
    Spectrum sharing is another Commission policy with potential to 
transform spectrum management. In April 2014, the Commission took a 
significant step toward turning the spectrum sharing concept into 
reality, adopting a Further Notice of Proposed Rulemaking to enable 
innovative spectrum sharing techniques in the 3.5 GHz band. Our three-
tiered spectrum access model, which includes Federal and non-federal 
incumbents, priority access licensees, and general authorized access 
users, could make up to 150 MHz of spectrum available for wireless 
broadband use. I plan to present an Order establishing final rules for 
this band to my fellow Commissioners in the near future.
``5G'' Spectrum Frontiers
    An effective spectrum strategy requires an all-of-the-above 
approach. This means making more spectrum available for not only 
licensed but unlicensed uses; for both exclusive use and sharing. It 
also means exploring entirely new spectrum opportunities. In October, 
the Commission adopted a Notice of Inquiry to explore the possibility 
of facilitating the use of a huge amount of spectrum in higher 
frequency bands, those above 24 GHz, which could be used strategically 
to help meet the growing demand for wireless broadband. Some in the 
industry are referring to the use of these bands in the context of so-
called ``5G.'' The NOI is about encouraging next-generation wireless 
services, and is also designed to develop a record about how these 
technologies fit into our existing regulatory structures, including how 
they can be authorized, to make sure we are facilitating and not unduly 
burdening their further development.
III. Protecting Core Values
    Changes in technology may occasion reviews of our rules, but they 
do not change the rights of users or the responsibilities of network 
providers. The Commission must protect the core values people have come 
to expect from their networks: universal access, competition, consumer 
protection, and public safety and national security.
A. Universal Access
    Universal access to communications has been at the core of the 
FCC's mission since the agency was established 80 years ago. 
Considering access to broadband is increasingly necessary for full 
participation in our economy and democracy, connectivity for all is 
more important than ever. Our universal service programs promote access 
to technology at home, at work, in schools or libraries, or when 
seeking assistance from a rural healthcare clinic. The Commission must 
ensure that our programs keep up with the changing technologies, are 
well-managed and efficient, while limiting waste, fraud, and abuse. 
Above all, we must make sure that the infrastructure supported by the 
Commission is available to ALL, including low-income Americans, 
individuals living on Tribal lands, and individuals with disabilities.
Connect America Fund
    While the private sector must play the leading role in extending 
broadband networks to every American, there are some areas where it 
doesn't make financial sense for private companies to build. That's why 
the Commission modernized our Universal Service Fund to focus on 
broadband, establishing the Connect America Fund. Already, the Connect 
America Fund (CAF) has made investments that will make broadband 
available to 1.6 million previously unserved Americans.
    In December 2014, the Commission approved an Order to move forward 
with Phase II of the Connect America Fund, putting us on the path to 
potentially bring broadband networks and services to over 5 million 
rural Americans.
    The long-term success of the Fund will be measured not just by the 
number of newly-served Americans, but by the quality of the networks 
that are being deployed. That's why the December Order increased the 
minimum download speed required as a condition of high-cost support to 
10 megabits per second, up from 4 megabits per second.
Rural Broadband Experiments
    Fulfilling our statutory mission to deliver on the promise of 
universal service in rural America challenges us to think anew, and act 
anew. In January 2014, the FCC initiated an experiment to inform our 
policies to build next-generation networks in rural America. We invited 
American enterprises, communities and groups to tell the FCC whether 
there is interest in constructing high-bandwidth networks in high-cost 
areas, and to tell us how it could be done with Connect America Fund 
support.
    In July, we adopted an Order establishing a $100 million budget for 
the rural broadband experiments, criteria for what we expect from 
applicants, and an objective, clear-cut methodology for selecting 
winning applications. These experiments will allow us to explore how to 
structure the CAF Phase II competitive bidding process in price-cap 
areas and to gather valuable information about deploying next-
generation networks in high-cost areas.
E-Rate Modernization
    E-rate--America's largest education technology program--has helped 
to ensure that almost every school and library in America has the most 
basic level of Internet connectivity. In the 18 years since E-rate was 
established, technology has evolved, the needs of students and teachers 
have changed, and basic connectivity has become inadequate.
    This past July, the Commission approved the first major 
modification of E-rate in the program's 18-year history. The overhaul 
accomplished three overarching objectives:
    First, for the first time, the Commission set specific, ambitious 
speed targets for the broadband capacity delivered to schools and 
libraries: a minimum throughput of 100 Mbps per 1,000 students and a 
pathway to 1 Gbps per 1,000 students.
    Second, we refocused the program away from funding 20th century 
technologies like pagers and dial-up phone service toward supporting 
21st century high-speed broadband connectivity. In the process, we 
moved to close the Wi-Fi gap by ensuring that over the next two years 
an additional 20 million students will have Internet access at their 
school or library desk.
    Third, we took steps to improve the cost-effectiveness of E-rate 
spending through greater pricing transparency and through enabling bulk 
purchasing to drive down costs and give Americans who contribute to E-
rate on their monthly bills the most bang for their buck.
    In December, we took the final major step in rebooting how we 
connect our students to 21st century educational opportunity by 
increasing the level of annual E-rate investment. The increase is 
justified by data showing 63 percent of American schools--and higher 
percentages in low-income and rural areas--do not currently have an 
Internet connection capable of supporting modern digital learning.
Enhanced Closed Captioning
    Reliable and consistent access to news and information for deaf and 
hard-of-hearing communities is not a luxury, it is a right. In February 
2014, the Commission adopted rules to provide standards for better 
quality closed captioning on TV programming. Members of the deaf and 
hard-of-hearing community, alongside industry--NCTA, NAB, and MPAA--
stepped up to the plate to help craft a set of rules that moves us 
toward improving captioning quality, while also assuring that vital 
news and other types of programming provide captioning. Building on 
this progress, we adopted an Order in July that requires captioning for 
video clips that are posted online.
B. Competition
    The central underpinning of broadband policy today is that 
competition is the most effective tool for driving innovation, 
investment, and consumer and economic benefits. Our competition policy 
is simple. Where competition does exist, we will protect it. Where 
competition can exist, we will incent it. And where competition cannot 
be expected to exist, we must shoulder the responsibility of filling 
that void. Many of the actions already highlighted in my testimony, 
such as approval of the two community broadband petitions and the 
Connect America Fund's investments to bring broadband to unserved 
areas, are consistent with these principles.
Multichannel Video Programming Distribution Services (MVPD)
    Some new entrants have alleged that their efforts to develop 
competitive services have faltered because they could not get access to 
programming content that was owned by cable networks or broadcasters. 
Last December, the Commission moved to give video providers who operate 
over the Internet--or any other method of transmission--the same access 
to programming that cable and satellite operators have.
    More specifically, we adopted an NPRM that proposes updating our 
interpretation of the definition of a multichannel video programming 
distributor (MVPD) to make it technology-neutral. Under our proposal, 
any providers that make multiple linear streams of video programming 
available for purchase would be considered MVPDs, regardless of the 
technology used to deliver the programming. The effect of this change 
will be to improve the availability of programming that over-the-top 
providers need and consumers want. By facilitating access to such 
content, we expect Internet-based linear programming services to 
develop as a competitor to cable and satellite. Consumers should have 
more opportunities to buy the channels they want instead of having to 
pay for channels they don't want.
Access to Last Mile Connections
    Small and medium-sized businesses, schools, hospitals, and other 
government institutions often rely on services delivered by competitive 
broadband and phone providers. But competitive providers may no longer 
be able to reach customers if incumbent carriers withdraw certain 
``last mile'' services. Last November, the Commission adopted an NPRM 
that tentatively concludes that carriers seeking to discontinue a 
service used as a wholesale input should be required to provide 
competitive carriers equivalent wholesale access going forward. The 
NPRM also proposes to update the FCC's rules so that competitive 
carriers receive sufficient notice of when copper networks are being 
shut off, so that they can continue to serve their customers 
effectively.
Joint Sales Agreements
    In March 2014, the Commission closed a loophole in our attribution 
rules for TV Joint Sales Agreements (JSAs) that had been exploited by 
some to circumvent our local TV ownership limitations. By prohibiting 
arrangements that have the full effect of common ownership--by 
stations' own admission in their SEC filings--we will protect viewpoint 
diversity and competition goals. We have also been clear to point out, 
however, that where we find that an agreement serves the public 
interest, we will waive our rule and do so through an expedited 
process.
Merger Reviews
    Congress has directed the Commission to review transactions 
(involving licenses and authorizations) under the Communications Act 
and to determine whether the proposed transaction would serve ``the 
public interest, convenience, and necessity.'' While I can't comment on 
the specific transactions currently before the Commission, I would note 
that the ``public interest'' standard encompasses the broad aims of the 
Communications Act, which include, among other things, a deeply rooted 
preference for preserving and enhancing competition in relevant 
markets, accelerating private-sector deployment of services, and 
ensuring a diversity of information sources and services to the public.
C. Public Safety
    Public Safety is one of the primary and essential missions of the 
Commission, and it cannot be left behind in this technological 
revolution. Consumers rightfully expect to be able to reach emergency 
responders, and those responders need to be able to locate those in 
need, as well as be able to communicate between themselves. The 
Commission has taken steps toward these goals.
Text-to-911
    In certain circumstances, such as domestic violence or kidnapping 
situations, texting 911 may be the only practical way to get help. In 
almost all circumstances for people who are deaf or hard-of-hearing, 
texting is the primary means for reaching out for emergency assistance. 
But most Americans still can't reach 911 via text. Last August, the 
Commission adopted an Order that required all wireless carriers and 
certain IP-based text messaging providers to support text-to-911 by the 
end of 2014. Now, if a 911 call center requests text-to-911, text 
messaging providers have six months to deploy the service in that area.
E-911/Location Accuracy
    Our E-911 location accuracy rules were written when wireless phones 
were a secondary means of communication, and were mostly used outside. 
Today, more and more consumers use wireless phones as their primary 
means of communication, and more and more 911 calls are coming from 
wireless phones, from indoors. This January, the Commission updated its 
E-911 rules to include requirements focused on indoor location 
accuracy. The new rules are intended to help first responders locate 
Americans calling for help from indoors, including challenging 
environments such as large multi-story buildings. They establish clear 
and measureable timelines for wireless providers to meet indoor 
location accuracy benchmarks, both for horizontal and vertical location 
information. The new rules were an important step forward, but by no 
means are we done. We established a floor, but so long as private app 
developers can locate consumers more accurately than a 911 call-taker 
can, we still have work to do.
Network Reliability
    The transition to IP-based networks presents potential new 
vulnerabilities to 911 service. The process of routing and completing a 
911 call now often involves multiple companies, sometimes 
geographically remote from where the call is placed. And in 2014 we saw 
a trend of large-scale ``sunny day'' 911 outages--that is, outages not 
due to storms or disasters but instead caused by software and database 
errors. In November, the Commission adopted an NPRM proposing a 911 
governance structure that would ensure that technology transitions are 
managed in a way that maximizes the availability, reliability, and 
resiliency of 911 networks, as well as the accountability of all 
participants in the 911-call completion process. That same month, the 
Commission adopted a separate NPRM regarding the transition to all-IP 
networks, which calls for an examination of potential strategies for 
providing back-up power during lengthy commercial power failures.
D. Consumer Protection
    Consumers must be able to depend on fast, open, and fair 
communications networks without being subject to discriminatory or 
predatory behavior. I have often stated that the best consumer 
protection is competitive choice. I also believe a multi-stakeholder 
process where industry rapidly adopts processes and procedures can be 
faster and more nimble than the regulatory process. But, at certain 
points, having regulation is necessary.
Record-Breaking Enforcement Actions
    2014 was a record-breaking year for enforcement actions on behalf 
of consumers. In August, the Commission fined Time Warner Cable $1.1 
million for failure to comply with our network outage requirements. In 
September, our Enforcement Bureau reached a $7.4 million settlement 
with Verizon to resolve an investigation into the company's use of 
personal consumer information for marketing purposes. In October, the 
Commission announced a $105 million settlement with AT&T Mobility to 
resolve an investigation into allegations that the company billed 
customers millions of dollars in unauthorized third-party subscriptions 
and premium text messaging services--the largest enforcement action in 
FCC history. Later in October, the Bureau proposed fining TerraCom, 
Inc. and YourTel America, Inc. $10 million for storing the personal 
information of up to 305,000 customers online in a format accessible 
through a routine Internet search. In December, the Commission 
announced a settlement of at least $90 million with T-Mobile to resolve 
an investigation into cramming allegations.
Sports Blackout Repeal
    In September, the Commission repealed its sports blackout rules, 
which prohibited cable and satellite operators from airing any sports 
event that had been blacked out on a local broadcast station. The 
sports blackout rules are a relic from the days when gate receipts were 
the National Football League's principal source of revenue and most 
games didn't sell out. The FCC will no longer be complicit in 
preventing sports fans from watching their favorite teams on TV.
Cell Phone Unlocking
    Consumers who fulfill the obligations of their mobile phone 
contracts should be able to take device to a network of their choosing 
without fear of criminal liability. One month after I became Chairman, 
the FCC secured an industry commitment to adopt voluntary industry 
principles for consumers' unlocking of mobile phones and tablets. This 
February, the country's major carriers confirmed that they have 
fulfilled their commitment. I also applaud Congress for passing 
legislation last summer to make cell phone unlocking the law of the 
land.
Tech Transitions
    As part of our November NPRM facilitating the transition from 
copper networks to IP networks, we proposed greater transparency, 
consumer protection, and opportunities for consumer input when carriers 
are planning to shut down (or ``retire'') their existing copper 
networks. We also set in motion a process to ensure that new services 
meet the needs of consumers before carriers are allowed to remove 
legacy services from the marketplace.
Retransmission Consent
    Congress created the retransmission consent regime over 20 years 
ago. Congress intended TV stations would negotiate retransmission 
consent agreements on their own. Increasingly, though, stations in a 
local market that are separately owned have banded together to 
negotiate for retransmission consent fees, even though they otherwise 
would compete against each other for those fees. In March 2014, the 
Commission adopted new rules to prohibit joint retransmission consent 
negotiations by same-market TV stations that are both ranked in the Top 
4 in order to level the playing field and to potentially keep such 
agreements from unfairly increasing cable rates for consumers. This 
step preceded Congress's expansion of the ban on retransmission consent 
to any two same-market TV stations.
IV. Modernizing the Commission
    It's not enough for the FCC to put in place policies that help 
foster the communications networks of the 21st century; the Commission 
itself must become more agile and business-like in order to become more 
effective, efficient, and transparent.
    Early last year, a Staff Working Group presented a Process Reform 
Report to the Commission as an important first step, and we sought 
comment from the public on the recommendations that were identified 
within that Report.
    Guided by this Report, we have been moving forward with changes to 
streamline how the Commission functions so we are better able to serve 
the entities we regulate, as well as the American public. For example, 
we now use a Consent Agenda at Commission meetings to facilitate quick 
action on non-controversial items that require a Commission vote, and 
we have made significant progress toward all-electronic filing and 
distribution of documents.
    Every Bureau and Office with responsibility for responding to 
requests from external petitioners and licensees has developed a 
backlog reduction plan. And last year, we also closed more than 1,500 
dormant dockets.
    In early 2015, we launched a new online Consumer Help Center, which 
will make the FCC more user-friendly, accessible, and transparent to 
consumers. The new tool replaces the Commission's previous complaint 
system with an easier-to-use, more consumer-friendly portal for filing 
and monitoring complaints. In addition to being easier to use for 
consumers, the information collected will be smoothly integrated with 
our policymaking and enforcement processes.
    The Commission's efforts to modernize operations have been 
hamstrung by level appropriations since 2013. In particular, we need to 
upgrade our IT infrastructure; we have more than 200 relic IT systems 
that are costing the agency more to service than they would to replace 
over the long term. I believe these investments are essential and will 
payback in dividends with the increased efficiency gained.
    I am aware of this Committee's interest and efforts with respect to 
modernizing our processes, including consolidating some of our 
reporting requirements, and will be happy to be of assistance, if 
requested.
V. Conclusion
    The Commission has focused on harnessing the power of 
communications technology to grow our economy and enhance U.S. 
leadership, while preserving timeless values like universal service. As 
my testimony reflects, we have made significant progress toward these 
goals to the benefit of the public.
    I recognize and appreciate the ongoing Congressional interest in 
Commission actions and process reforms. I pledge transparency and 
cooperation, as well as assistance, where requested, and look forward 
to working with Members of this Committee to maximize the benefits of 
communications technology for the American people.

    The Chairman. Thank you, Chairman Wheeler.
    Commissioner Clyburn.

  STATEMENT OF HON. MIGNON L. CLYBURN, COMMISSIONER, FEDERAL 
                   COMMUNICATIONS COMMISSION

    Ms. Clyburn. Chairman Thune, Ranking Member Nelson, Members 
of the Committee, good afternoon. My written statement details 
my views on some of the difficult decisions facing the FCC. For 
purposes of my oral summary, however, I will focus on just two. 
While I prefer competition over regulation, the truth is that 
marketplace nirvana does not always exist and here are two 
examples where markets have failed and regulatory backstop is 
needed.
    I made rural call completion a priority as Acting Chair 
because it is unacceptable in this day and age that calls are 
not being put through. We tackled this practice by prohibiting 
a ringing signal unless a call is actually completed and we 
have required carriers to retain and report call data. Data 
collection rules go into effect April first and we will use 
this information to ensure that the FCC has the tools necessary 
to take additional action if appropriate.
    While a petition requested relief from egregious inmate 
calling rates remains pending at the FCC for nearly a decade, 
fees and rates continue to increase. Calls made by deaf and 
hard of hearing inmates top $2.26 per minute, add to that an 
endless array of fees; $3.95 to initiate a call, a fee to set 
up an account, another fee to close an account, a fee to use a 
credit card, there is even a fee charged to users to get a 
refund of their own money. There are 2.7 million children with 
at least one parent incarcerated and they are the ones most 
punished. And the downstream cost of these inequities are borne 
by us all.
    The FCC finally adopted interstate rate caps in August of 
2013. And what has been the result? Despite dire predictions of 
losing phone service and lapses in security, we have actually 
seen increased call volumes as high as 300 percent and letters 
to the FCC expressing how this relief has impacted lives. I 
hope we answered the call with permanent rate caps and fees for 
all of these customers this summer.
    I am grateful, Mr. Chairman and Ranking Member, for the 
opportunity to appear before you today and look forward to 
answering any questions you many have. Thank you.
    [The prepared statement of Ms. Clyburn follows:]

      Prepared Statement of Hon. Mignon L. Clyburn, Commissioner, 
                   Federal Communications Commission
    Chairman Thune, Ranking Member Nelson and members of the Committee, 
good afternoon.
    What a privilege it is for me to come before you today. It has been 
nearly three years since our last appearance and it is amazing just how 
much has changed. I had the distinct honor of serving as Acting 
Chairwoman for 5 \1/2\ months, and since May of 2012 this Nation has 
witnessed dynamic growth and tremendous innovation: faster broadband 
speeds, an apps and services explosion, fresh competitors entering the 
market and a seemingly endless demand for spectrum. According to 
industry estimates, broadband providers invested $69 billion in network 
infrastructure in 2012, $72.2 billion in 2013 and $75.2 billion in 
2014.
    But none of this phenomenal growth happens organically. The FCC, 
more often than not on a bipartisan basis, has worked hard to enable 
this magnitude of development. These sometimes difficult decisions, by 
way of policy, have promoted and made possible incredible levels of 
investment and competition and while I would quickly exceed my five 
minutes if I were to identify every item the FCC has enabled to that 
end, I would like to highlight just a few.
    One thing that sets our great nation apart is our unwavering 
commitment to universal service. Regardless of where you live, we stand 
by that obligation to you. The FCC reformed its universal service and 
intercarrier compensation programs and put this country on a path to 
close the broadband gap. We take it for granted now, but this decision 
was an incredibly significant feat involving some difficult moments 
that followed a decade of good faith efforts which faltered. Since 
2012, I am proud to say, the FCC--through its reforms--has authorized 
funding to serve over 630,000 locations, or approximately 1.7 million 
people, in 45 states, plus Puerto Rico, with fixed broadband for the 
first time, provided mobile coverage to tens of thousands of road miles 
and connected over 50,000 people living on Tribal lands with access to 
mobile broadband. And we are poised to offer incumbent carriers the 
right to accept funding to deploy broadband within the states they 
serve very soon. For Americans living in these states, broadband access 
will be life changing.
    We took action to close connectivity gaps within our schools and 
libraries and ensure that rural health care providers have access to 
the telecommunications and broadband services their communities need 
and deserve.
    The one universal service program that has yet to be reformed, 
however, is Lifeline--our only adoption program which was established 
in 1985 and has been stuck there ever since. I am proud that this FCC 
took a bold step in 2012 to clean up a program that lacked the 
necessary checks and balances needed to curb waste, fraud and abuse. We 
took sweeping action to combat major deficiencies and this has resulted 
in savings to the program and consumers of over $2.75 billion. That 
bears repeating. This administration restructured this single universal 
service program to the tune of $2.75 billion in savings, and it doubled 
down on our commitment to enforcement by proposing forfeitures of over 
$90 million for providers we found were not following our rules.
    While these accomplishments are incredibly significant, we refuse 
to rest on our laurels. We need a new, restructured, recalibrated, 
modern-era Lifeline program that bears no resemblance to the program we 
have today. At AEI last November, I outlined five principles to guide 
Lifeline reform, all which I believe are necessary to protect the 
integrity of the fund, bring dignity to the program, and encourage 
broader participation and more competition. Key to any reform is 
removing the provider from determining whether a customer is eligible. 
Having the provider determine eligibility has created negative 
incentives, led to significant privacy concerns for consumers, and 
increased administrative burdens that have discouraged more providers 
from participating. We also need to demand more ``product'' for each 
dollar of universal service support spent. One little-known Lifeline 
fact: Of all the Federal beneficiary programs from Medicaid, to 
Supplemental Nutrition Assistance Program (SNAP), to the National 
School Lunch Program, to public housing, Lifeline has the smallest 
level of annual expenditures. At $9.25 a month, it reaches the greatest 
number of households of any program except Medicaid. If reformed 
properly, this program could once and for all enable consumers to have 
true robust broadband and prove to be one of the greatest investments 
this government could make.
    While I generally prefer competition over regulation, the truth is 
that marketplace nirvana does not always exist. There are times when 
the communications ecosystem fails to properly address consumer 
interests and when that occurs, the Federal Communications Commission 
must step up to the plate.
    The alarmingly high rate of calls not being completed to rural 
areas is one such example. I was proud to adopt an Order while Acting 
Chairwoman that tackled this unacceptable practice. The FCC has taken a 
number of significant actions against providers to put a stop to this, 
but we have much more to do. Rural call completion challenges highlight 
the need for a regulatory backstop, particularly when the private 
sector alone is unwilling or unable to resolve a concern that has 
public safety and business implications.
    Another glaring example of market failure and the need for 
regulatory backstop comes in the case of inmate calling services. A 
decade after a petition requested relief from egregiously high and 
patently unlawful fees, the market not only failed to respond, things 
got worse. Families, friends, lawyers, and clergy paid rates as high as 
$2.26 per minute for a call placed by deaf or hard of hearing inmates, 
plus an endless array of fees, including up to $3.95 to initiate a 
call, a fee to set up an account, another fee to close an account, a 
fee to use a credit card, and even a fee charged to customers when they 
are refunded their own money.
    Regardless of your views when it comes to the accused or the 
convicted, there are 2.7 million children with at least one parent 
incarcerated. They are the ones actually being punished by this unjust 
and unreasonable inmate calling structure. In addition to the anxiety 
associated with a parent who is absent on a daily basis, these young 
people suffer severe economic and personal hardships, are more likely 
to do poorly in school, and all of this is exacerbated by an 
unreasonable rate regime that limits their ability to maintain contact. 
Reputable studies show that having meaningful communication beyond 
prison walls can make a real difference when it comes to maintaining 
community ties, promoting rehabilitation and reducing recidivism.
    We took a critical first step while I was Acting Chairwoman in 
August 2013 and despite the parade of horribles that opponents to 
inmate calling services reform predicted would flow--from losing phone 
service entirely to security lapses--we have witnessed nothing of the 
sort. What we have seen is increased call volumes of 70 percent, 
including one report of a 300 percent increase, and letters explaining 
how reforms have impacted their lives. But we are not done and our job 
remains unfinished unless the intrastate calling regime (where the bulk 
of the traffic takes place) is also reformed.
    We have also adopted significant policies in the wireless market. 
In March 2014, we unanimously approved licensing and service rules to 
auction 65 megahertz of spectrum in the AWS-3 bands. This auction, 
which closed this past January, was the first auction of multiple 
paired blocks of spectrum the Commission had held in six years. Since 
mid-2010, we have witnessed explosive consumer demand for mobile 
broadband services. So this auction was important to give wireless 
carriers the spectrum they need to meet the demand on their networks.
    But it was also important to meet Congress's directives to design 
an auction that promotes more competitive options for wireless 
consumers. My colleagues and I agreed on a band plan that included 
smaller license blocks and geographic license areas and we also agreed 
to mandate interoperability between the AWS-1 and AWS-3 bands.
    Such rules encourage participation by carriers, who may have a 
smaller service footprint than nationwide providers, yet possess a 
strong desire to acquire more spectrum in order to serve a particular 
footprint. This approach promotes competition in local markets and has 
the added benefit of ensuring that the auction promotes efficient 
allocation of spectrum to the highest and best use.
    Most predicted that increased consumer demand for mobile services 
would result in robust bidding for the AWS-3 auction. But no analyst 
predicted that the total amount of winning bids would exceed $18 
billion. In fact, the final gross total winning bids was a record 
setting $44.89 billion. The success of this auction was due, in large 
part, to a painstaking effort to pair the 1755 to 1780 and 2155 to 2180 
bands. This effort involved the broadcast and wireless industries, 
Federal agencies and members of this Committee. I commend all 
stakeholders for reassessing what really matters, finding common ground 
and doing the right thing for the American public.
    We should follow a similar collaborative approach as we work 
towards finalizing rules to implement the world's first ever voluntary 
incentive auction. Encouraging smaller carriers to participate is also 
important to the success of this auction, as we must incentivize 
broadcast TV stations to take part in the reverse auction. So I am glad 
large and small carriers developed a consensus band plan that allowed 
us to shift from large Economic Areas to smaller Partial Economic 
Areas. We also unanimously adopted a Notice of Proposed Rulemaking that 
seeks to strike the proper balance between licensed and unlicensed 
services and accommodate the needs of incumbent services in the TV 
bands.
    It was important to initiate a proceeding to update our Competitive 
Bidding rules and procedures in advance of the incentive auction. This 
auction will offer applicants a historic opportunity to acquire 
substantial amounts of valuable wireless spectrum below 1 GHz. We 
proposed comprehensive reforms that will enable small businesses to 
compete more effectively in auctions and sought comment on whether we 
should do more to deter unjust enrichment.
    Finally, I would like to highlight the progress we are making in 
implementing the STELA Reauthorization Act of 2014. As required under 
the statute, the FCC has established a working group of technical 
experts to study and recommend a downloadable security system that can 
be used in conjunction with navigation devices, such as set-top boxes, 
to promote greater competition for such devices. The statute requires 
us to issue a report on this issue by September, and the Commission is 
hard at work to accomplish this milestone.
    I am grateful for the opportunity to appear before you today and 
look forward to answering any questions you may have on how the FCC can 
continue to promote greater access to communications technologies and 
services for all Americans. Thank you.

    The Chairman. Thank you, Commissioner Clyburn.
    Commissioner O'Rielly.

   STATEMENT OF HON. MICHAEL O'RIELLY, COMMISSIONER, FEDERAL 
                   COMMUNICATIONS COMMISSION

    Mr. O'Rielly. Thank you, Mr. Chairman, Ranking Member 
Nelson, and Members of the Committee for the opportunity to 
deliver testimony to you today. I have always held this 
Committee in the highest regard given my past involvement as a 
Congressional staffer with oversight hearings and legislative 
efforts. I recommit myself to being available as any resource I 
can and be of any help in the future.
    In my time at the Commission, I have enjoyed the many 
intellectual and policy challenges presented by the innovative 
and ever-changing communications sector. It is my goal to 
maintain friendships, even when my fellow Commissioners and I 
disagree, and seek out opportunities where we'll work together.
    To provide a brief snapshot, I have voted with the Chairman 
on approximately 90 percent of all items. Unfortunately, the 
percentage drops significantly to approximately 62 percent for 
the higher-profile Open Meeting items.
    One of the policies I've not been able to support is the 
insertion of the Commission into every aspect of the Internet. 
The Commission pursued an ends to justify the means approach to 
subject broadband providers to a new Title II regime without a 
shred of evidence that it's even necessary. Even worse, the 
Order punts authority to FCC staff to review current and future 
Internet practices under vague standards such as just and 
reasonable, unreasonable interference or disadvantage, and 
reasonable network management. This is a recipe for uncertainty 
for our nation's broadband providers and, ultimately, edge 
providers.
    Nonetheless, I continue to suggest creative ideas to 
modernize the regulatory environment to reflect the current 
marketplace, often through my public blog. For instance, I've 
advocated that any document to be considered in Open Meeting 
should be made publicly available on the Commission's website 
at the same time it's circulated to the Commissioners, 
typically 3 weeks in advance.
    Under the current process, I meet with numerous outside 
parties prior to an Open Meeting, but I'm precluded from 
telling them, for example, having read the document, that their 
concern is misguided or already addressed. The stated 
objections to this approach, presented under the cloak of 
procedural law, are really grounded in resistance to change and 
concerns about resource management.
    In addition, the Commission has questionable post-adoption 
processes that deserves significant attention. While I 
generally refrain from commenting on legislation, I appreciate 
the ideas put forth by Senators Heller and others, which would 
address these and other Commission practices, such as the abuse 
of delegation that block the public out of critical end-stages 
of the deliberative process. I believe that these proposed 
changes, as well as others, would improve the functionality of 
the Commission and improve consumer access to information.
    Separately, I have also been outspoken on many substantive 
issues, such as the need to free up spectrum resources for 
wireless broadband, both licensed and unlicensed.
    I look forward to working with my colleagues on this and 
many other issues in the months ahead. And I stand ready to 
answer any questions you may have.
    [The prepared statement of Mr. O'Rielly follows:]

      Prepared Statement of Hon. Michael O'Rielly, Commissioner, 
                   Federal Communications Commission
    Thank you, Mr. Chairman, Ranking Member Nelson and the Members of 
the Committee for the opportunity to deliver testimony to you today. I 
have always held this Committee in the highest regard given my past 
involvement, as a Congressional staffer, with oversight hearings and 
legislative efforts to reauthorize the Commission. Not only did these 
experiences afford me the opportunity to work and form friendships with 
a number of the Committee staff on both sides of the aisle, but I am 
also well aware of your responsibilities and the challenges of 
conducting Congressional oversight. I recommit to making myself 
available as a resource if I can be of any assistance to the Committee 
in the future.
    In my time at the Commission, I have enjoyed the many intellectual 
and policy challenges presented by the innovative and ever-changing 
communications sector. In addition, I have appreciated the opportunity 
to meet and work with many of the Commission's dedicated public 
servants, including my colleagues here today. It is my goal to maintain 
friendships even when we disagree, and seek out opportunities where we 
can work together. To provide a brief snapshot, I have voted with the 
Chairman on approximately 90 percent of all items. Unfortunately, this 
percentage drops significantly--to approximately 62 percent--for the 
higher-profile Open Meeting items.
    One of the policies I have not been able to support is the 
insertion of the Commission into every aspect of the Internet. As you 
may have heard, the Commission pursued an ends-justify-the-means 
approach to subject broadband providers to a new Title II regime 
without a shred of evidence that it is even necessary, solely to check 
the boxes on a partisan agenda. Even worse, the Order punts authority 
to FCC staff to review current and future Internet practices under 
vague standards, such as ``just and reasonable,'' ``unreasonable 
interference or disadvantage'' (i.e., the infamous general conduct 
standard), and ``reasonable network management.'' This is a recipe for 
uncertainty for our Nation's broadband providers and, ultimately, edge 
providers. Additionally, the Commission has gone down a path of no 
return by allowing this Administration to have undue influence over its 
decisions, which undermines confidence in our ability to produce fair, 
unbiased and reasoned outcomes. Other countries follow the actions of 
the FCC, and this decision is likely to sway the positions of our 
international regulatory counterparts in international fora.
    Nonetheless, I continue to suggest creative ideas to modernize the 
regulatory environment to reflect the current marketplace, often 
through my public blog. I have written extensively on the need to 
reform numerous outdated and inappropriate Commission procedures. For 
instance, I have advocated that any document to be considered at an 
Open Meeting should be made publicly available on the Commission's 
website at the same time it is circulated to the Commissioners, 
typically three weeks in advance. This fix is not tied to the net 
neutrality item, although I think it provides a great example of why 
change is needed.
    Under the current process, I meet with numerous outside parties 
prior to an Open Meeting, but I am precluded from telling them, for 
example, having read the document, that their concern is misguided or 
already addressed. I can't tell them anything of value. This can be a 
huge waste of time and effort for everyone involved, and allows some 
favored parties an unfair advantage in the hunt for scarce and highly 
prized information nuggets. Ultimately, it prevents the staff from 
focusing on the real issues and improving the text of an item. The only 
solution, in my eyes, is greater transparency by the Commission, and I 
have suggested a way to accomplish this consistent with current law. 
The stated objections to this approach, presented under the cloak of 
procedural law, are really grounded in resistance to change and 
concerns about resource management.
    In addition, the Commission has a questionable post-adoption 
process that deserves significant attention. In particular, items 
approved at a Commission meeting can then be changed by the Commission 
staff after the meeting to make or strengthen arguments in response to 
Commissioner dissents or additional industry filings to improve the 
Commission's potential litigation position.
    While I generally refrain from commenting on legislation, I 
appreciate the ideas put forth by Senators Heller and others, which 
would address these and other Commission practices, such as the abuse 
of delegation, that lock the public out of the critical end stages of 
the deliberative process. I believe that these proposed changes, as 
well as others, would improve the functionality of the Commission and 
improve consumer access to information.
    Separately, I have also been outspoken on many substantive issues, 
such as the need to free up spectrum resources for wireless broadband, 
both licensed and unlicensed. I was pleased to work with my colleague, 
Commissioner Rosenworcel, and share our thoughts on how to expand 
opportunities for unlicensed spectrum, especially in the upper 5 GHz 
band. I applaud Senators Rubio and Booker for their continued 
leadership on looking for ways to increase access to this band for Wi-
Fi use. Additionally, I have put forward substantive suggestions for 
the Lifeline program. I recognize that several of my colleagues are 
interested in expanding the program to include broadband, and I have 
put forth ideas on how to ensure that any expansion fits within a 
reasoned budget and does not result in new waste, fraud, and abuse. I 
look forward to working with my colleagues on this and other issues in 
the coming months.
    I stand ready to answer any questions you may have.

    The Chairman. Thank you, Commissioner O'Rielly.
    Commissioner Pai.

           STATEMENT OF HON. AJIT PAI, COMMISSIONER, 
               FEDERAL COMMUNICATIONS COMMISSION

    Mr. Pai. Chairman Thune, Ranking Member Nelson, and Members 
of the Committee, thank you for giving me the opportunity to 
testify this afternoon. It has been an honor to work with the 
Members of this Committee on a wide variety of issues, from 
promoting rural broadband deployment to freeing up more 
spectrum for mobile broadband. It is a particular privilege to 
appear before you today now that Senator Moran, from my home 
state of Kansas, has joined the Committee.
    When this kind Committee held my confirmation hearing, 
Senator Moran was kind enough to introduce me, and I can only 
hope that his kindness will continue if and when he has a 
chance to question me later today.
    [Laughter.]
    Mr. Pai. I last testified in front of this Committee on 
March 12, 2013. And since then, things have changed 
dramatically at the FCC. I wish that I could say that, on 
balance, these changes have been for the better. But, 
unfortunately, that is not the case.
    The foremost example, of course, is the Commission's 
decision last month to apply Title II to the Internet. The 
Internet is not broken. The FCC didn't need to fix it, but our 
party line vote overturned a 20-year bipartisan consensus in 
favor of a free and open Internet. With the Title II decision, 
the FCC voted to give itself the power to micromanage virtually 
every aspect of how the Internet works. The FCC's decision will 
hurt consumers by increasing their broadband bills and reducing 
competition. And the Title II order was not the result of a 
transparent rulemaking process.
    The FCC has already lost in court twice and its latest 
order has glaring legal flaws that are sure to keep the FCC 
mired in litigation for a long time.
    Turning to the Designated Entity Program, the FCC must take 
immediate action to end its abuse. What once was a will-
intentioned program designed to help small businesses, has 
become a playpen for corporate giants. The reason AWS-3 auction 
is a shocking case in point.
    DISH, which has annual revenues of $14 billion and a market 
cap of over $34 billion, holds an 85 percent equity stake in 
two companies that are now claiming $3.3 billion in taxpayer 
subsidies. That makes a mockery of the small business program. 
The $3.3 billion at stake is real money. It could be used to 
underwrite over 580,000 Pell Grants, fund school lunches for 
over 6 million children, or incentivize the hiring of over 
138,000 veterans for a decade.
    The abuse also had an enormous impact on small businesses 
from Nebraska to Vermont. It denied them spectrum licenses they 
would have used to give rural consumers a competitive wireless 
alternative.
    In my view, the FCC should quickly adopt a further notice 
of proposed rulemaking so that we can close loopholes in our 
rules before the next spectrum auction.
    Chairman Thune, Ranking Member Nelson, and Members of the 
Committee, thank you, once again, for giving me this 
opportunity to testify. I look forward to answering your 
questions and to working with you and your staff in the time to 
come.
    [The prepared statement of Mr. 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 
afternoon. Over the last two-and-a-half years, it has been an honor to 
work with the Members of this Committee on a wide variety of issues, 
from encouraging broadband deployment in rural America to eliminating 
the sports blackout rule, from making available more spectrum for 
mobile broadband to better connecting our Nation's schoolchildren with 
digital opportunities.
    And it is a particular privilege to appear before you today now 
that Senator Moran of my home state of Kansas has joined the Committee. 
When this Committee held my confirmation hearing, Senator Moran was 
kind enough to introduce me, and I have since enjoyed appearing with 
him at events back in Kansas. I hope that his kindness will continue 
when he has the opportunity to question me later.
    I last testified in front of this Committee two years ago. Since 
that hearing on March 12, 2013, things have changed dramatically at the 
FCC. I wish I could say that these changes, on balance, have been for 
the better. But unfortunately, that is not the case.
    Net Neutrality.--The foremost example, of course, is the 
Commission's decision last month to apply Title II to the Internet. 
That party-line vote overturned a 20-year bipartisan consensus in favor 
of a free and open Internet. It was a consensus that a Republican 
Congress and a Democratic President enshrined in the Telecommunications 
Act of 1996 with the principle that the Internet should be a ``vibrant 
and competitive free market . . . unfettered by Federal or State 
regulation.'' It was a consensus that every FCC Chairman--Republican 
and Democrat--had dutifully implemented for almost twenty years. And it 
was a consensus that led to a thriving, competitive Internet economy 
and more than a trillion dollars of investment in the broadband 
Internet marketplace--investments that have given Americans better 
access to faster Internet than our European allies, and mobile 
broadband speeds that are the envy of the world.
    Here is the truth. The Internet is the greatest example of free-
market innovation in history. The Internet empowers Americans to speak, 
to post, to rally, to learn, to listen, to watch, and to connect in 
ways our forefathers never could have imagined. The Internet is a 
powerful force for freedom, at home and abroad.
    In short, the Internet is not broken. And it didn't need the FCC to 
fix it.
    But last month, the FCC decided to try to fix it anyway. It 
reclassified broadband Internet access service as a Title II 
telecommunications service. It seized unilateral authority to regulate 
Internet conduct, to direct where Internet service providers put their 
investments, and to determine what service plans will be available to 
the American public. This was a radical departure from the bipartisan, 
market-oriented policies that have served us so well for the last two 
decades.
    With the Title II decision, the FCC voted to give itself the power 
to micromanage virtually every aspect of how the Internet works. The 
FCC can now regulate broadband Internet rates and outlaw pro-consumer 
service plans. As the Electronic Frontier Foundation wrote us, the FCC 
has given itself ``an awful lot of discretion, potentially giving an 
unfair advantage to parties with insider influence,'' which is ``hardly 
the narrow, light-touch approach we need to protect the open 
Internet.'' Or as EFF's cofounder wrote after the decision, ``Title II 
is for setting up monopolies, not tearing them apart. We need 
competition, not regulation. We need engineers not lawyers.''
    And that's precisely the problem. When I talk to people outside the 
Beltway, what they want--what they need--isn't more regulation but 
instead more broadband deployment and more competition. But this 
``solution'' takes us in precisely the opposite direction. It will 
result in less competition and a slower lane for all. What have our 
Nation's scrappiest Internet service providers told us? What did we 
hear from 142 wireless ISPs who've deployed broadband service using 
unlicensed spectrum without a dime from the taxpayer? What did we hear 
from 24 of the Nation's smallest ISPs, each with fewer than 1,000 
residential customers? What did we hear from 43 municipal broadband 
providers, including Cedar Falls Utilities? What did we hear from the 
National Black Chamber of Commerce, the National Gay & Lesbian Chamber 
of Commerce, the U.S. Hispanic Chamber of Commerce, and the U.S. Pan 
Asian American Chamber of Commerce? That regulating the Internet under 
Title II is sure to reduce competition and drive smaller competitors 
out of the business. Monopoly rules from a monopoly era will move us 
toward a monopoly.
    The FCC's Title II decision is a raw deal for consumers. Broadband 
bills will go up--the plan explicitly opens the door to billions of 
dollars in new taxes on broadband. One estimate puts the total at $11 
billion a year--with $4 billion a year on top of that if the Internet 
Tax Freedom Act isn't extended (or better yet made permanent). And 
broadband speeds will be slower. The higher costs and regulatory 
uncertainty of utility-style regulation have stymied Europe's broadband 
deployment, and America will follow suit. Just look at the data. Today, 
82 percent of Americans, and 48 percent of rural Americans, have access 
to 25 Mbps broadband speeds. In Europe, those figures are only 54 
percent and 12 percent respectively. In the U.S., average mobile 
broadband speeds are 30 percent faster than they are in Western Europe. 
And broadband providers in the U.S. are investing more than twice as 
much per person and per household as their European counterparts. Their 
model has not succeeded, as even leading European regulators and 
legislators concede. Indeed, neither big nor small providers will bring 
rural and low-income Americans online if it's economically irrational 
for them to do so. In short, Title II's utility-style regulation will 
simply broaden the digital divide.
    I am hopeful that the FCC won't get the chance. The FCC has already 
gone to court twice with attempts to regulate the Internet. Both times, 
the courts have rejected the agency's efforts. And I doubt the third 
time will be the charm. As detailed in my written dissent, the Title II 
order has glaring legal flaws that are sure to keep the Commission 
mired in litigation for a long, long time.
    Finally, the Title II order was not the result of a transparent 
notice-and-comment rulemaking process. For one thing, the FCC didn't 
actually propose Title II. In the May 2014 Notice of Proposed 
Rulemaking, the agency's plan was quite different; it was premised on 
section 706 of the Telecommunications Act and the Verizon court's 
admonitions on how to avoid Title II. Only in early February did the 
public learn that the FCC would pursue this course. And even then, the 
FCC did not make the plan public (despite the fact that an overwhelming 
majority of Americans--79 percent--said they wanted to see it). Nor did 
it make public the critical last-minute changes to the Order that were 
sought by a particular company and special interest group. Only two 
weeks after the FCC voted on the Order were Americans finally allowed 
to see it. Whatever the normal practice at the agency, net neutrality 
was anything but normal. We should have published the plan before we 
voted on it and given the public a chance to comment on its many novel 
details. Going forward, I join Commissioner O'Rielly's call for the FCC 
to make public three weeks beforehand the matters scheduled for a vote 
at public meetings.
    The Designated Entity Program.--The FCC must take immediate action 
to end abuse of our designated entity program. What was once a well-
intentioned program designed to help small businesses has become a 
playpen for corporate giants.
    Here's how the program was supposed to work. When Congress first 
granted the FCC auction authority in 1993, its goal was to help small 
businesses--``designated entities'' in FCC parlance--compete for 
spectrum licenses with large, established companies. A small business 
that lacked the funding to outspend a large corporation could bid, say, 
$100,000 for a license but end up paying only $75,000. In effect, a 
Federal subsidy would cover the remaining $25,000.
    Perversely, this well-intentioned program now helps Goliath at 
David's expense. Small business discounts are now being used to give 
billions of dollars in taxpayer-funded subsidies to Fortune 500 
companies and to make it harder for legitimate small businesses to 
compete in the wireless market. Bipartisan concern about this state of 
affairs has emerged from this Committee. And a chorus is growing among 
the public as well. For instance, both the Communications Workers of 
America and the NAACP made this point recently, explaining that big 
businesses are now abusing the program and driving out legitimate small 
and minority-owned businesses.
    The FCC's recent AWS-3 spectrum auction is a shocking case in 
point. Last month, the FCC disclosed that two companies, each of which 
claimed it was a ``very small business'' with less than $15 million in 
revenues, together won over $13 billion in spectrum licenses and are 
now claiming over $3 billion in taxpayer-funded discounts. How could 
this be? DISH Network Corp. has an 85 percent ownership stake in each 
(not to mention highly intricate contractual controls over each). 
Allowing DISH, which has annual revenues of approximately $14 billion 
and a market capitalization of over $32 billion, to obtain over $3 
billion in taxpayer-funded discounts makes a mockery of the small 
business program. Indeed, DISH has now disclosed that it made 
approximately $8.504 billion in loans and $1.274 billion in equity 
contributions to those two companies--hardly a sign that they were 
small businesses that lacked access to deep pockets.
    DISH's abuse of the program during the AWS-3 auction had an 
enormous impact on small businesses. Here are just a few examples:

   Glenwood Telephone Membership Corp. provides communications 
        services to rural parts of Nebraska. Glenwood was the 
        provisionally winning bidder for two licenses that would have 
        allowed it to serve parts of Nebraska, but it was outbid by a 
        DISH entity claiming a taxpayer subsidy. As a result, it did 
        not win a single license in the auction. Glenwood has gross 
        annual revenues of just over $13 million, which are 1,052 times 
        less than DISH's.

   Rainbow Telecommunications Association, Inc. provides 
        communications services to rural parts of Kansas. Rainbow was 
        the provisionally winning bidder for one license that would 
        have allowed it to serve parts of Kansas, but it was outbid by 
        a DISH entity claiming a taxpayer subsidy. As a result, it did 
        not win a single license in the auction. Rainbow has gross 
        annual revenues under $14 million, which are 1,025 times less 
        than DISH's.

   Pioneer Telephone Cooperative, Inc. provides communications 
        services in rural parts of Oklahoma. Although Pioneer won three 
        licenses in Oklahoma and Kansas, it was outbid by a DISH entity 
        claiming a taxpayer subsidy for another license that it could 
        have used to serve other parts of Oklahoma. Pioneer has gross 
        annual revenues under $15 million, which are 933 times less 
        than DISH's.

   Geneseo Communications Services, Inc. provides 
        communications services to rural parts of Illinois. Although 
        Geneseo won two licenses in Illinois, it was outbid by DISH 
        entities claiming taxpayer subsidies for four other licenses 
        that Geneseo could have used to serve different parts of 
        Illinois. Geneseo has annual gross revenues under $16 million, 
        which are 894 times less than DISH's.

   VTel Wireless, Inc. provides communications services to 
        consumers in rural parts of Vermont. VTel was the provisionally 
        winning bidder for one license that would have allowed it to 
        serve parts of Vermont, but it was outbid by a DISH entity 
        claiming a taxpayer subsidy. As a result, it did not win a 
        single license in the auction. VTel has gross annual revenues 
        under $27 million, which are 515 times less than DISH's.

    In every one of these cases, the small businesses that the DISH 
entities outbid either claimed no taxpayer-funded discounts or ones 
that were far smaller than those claimed by DISH.
    These examples are just a small part of a much broader story. 
Analysis shows that there were over 440 licenses in the auction for 
which the DISH entities outbid smaller companies or ones that were not 
providers of nationwide service that had been winning the licenses. 
That's more than three times as often as those providers were outbid by 
AT&T, Verizon, and T-Mobile combined.
    I am appalled that a corporate giant which itself does not have a 
single wireless customer has attempted to use small business discounts 
to box out the very companies that Congress intended the program to 
benefit and to rip off American taxpayers to the tune of more than $3 
billion. And I am certainly not alone in feeling this way. The 
Communications Workers of America, the NAACP, and many others have 
already called on the FCC to reject DISH's attempt to claim these 
discounts.
    This $3.3 billion is money that otherwise would have been deposited 
into the U.S. Treasury. This is money that could be used to fund 
581,475 Pell Grants, pay for the school lunches of 6,317,512 children 
for an entire school year, or extend tax credits for the hiring of 
138,827 veterans for the next 10 years. This is real money.
    And it is certainly not too late to ensure that the Treasury gets 
it. The DISH entities' applications are pending before the FCC. If it 
turns out that DISH did not comply with the FCC's rules, the agency 
must, at a minimum, deny them these discounts. The American people 
deserve no less.
    But regardless of whether DISH violated our rules, the FCC must 
take immediate action to ensure that this abuse never happens again. 
DISH is certainly not the only entity that has attempted to game the 
system. Remarkably, the Commission is currently moving in the wrong 
direction. Instead of tightening our rules to prevent Fortune 500 
companies from abusing the designated entity program, the FCC adopted a 
Notice of Proposed Rulemaking (NPRM) in October 2014 that would 
actually loosen our rules and make it easier for large companies to 
benefit from the program. I dissented from those parts of the NPRM. 
Unfortunately, the Commission's adoption of those proposals as well as 
an arbitrage-enabling waiver it granted on a party-line vote prior to 
the AWS-3 auction sent precisely the wrong signal to large companies. 
Instead of strictly enforcing our rules to protect American taxpayers 
and small businesses, the FCC sent an ``anything goes'' message to 
those inclined to game the system.
    The FCC must reverse course. To start, it should quickly adopt a 
Further Notice of Proposed Rulemaking that would allow the agency to 
consider a full range of options before our next auction to close 
loopholes in our rules. The proposals teed up in the October NPRM 
simply do not give the Commission that degree of flexibility. And, as I 
am well aware from my experience in the Office of General Counsel, the 
Commission has lost on notice grounds before when trying to change our 
designated entity rules.
    If, in the face of recent experience, the FCC is not willing to 
crack down on abuse of the designated entity program, then Congress 
must act.
    In that vein, I applaud the bipartisan leadership of Senators 
Ayotte and McCaskill on this issue and stand ready to work with this 
Committee to ensure that the designated entity program benefits 
legitimate small businesses rather than large corporate interests.
    Process.--I firmly believe that the FCC is at its best when it acts 
in a bipartisan, collaborative manner. Commissioners will inevitably 
hold different viewpoints on important issues. But traditionally, there 
has been a willingness to compromise, to negotiate in good faith, and 
to reach consensus. I witnessed this firsthand during my years as an 
agency staffer. And I directly participated in such negotiations and 
compromises during the first year-and-a-half of my tenure as a 
Commissioner.
    For example, during my service as a Commissioner under Chairman 
Genachowski and Chairwoman Clyburn, 89 percent of votes on FCC meeting 
items were unanimous. We didn't always start out in the same place. But 
we worked hard to reach agreements that everyone could live with and we 
usually succeeded. We understood that no political party has a monopoly 
on wisdom, and we recognized that communications issues historically 
have not been partisan in nature.
    Unfortunately, the environment at the Commission is now much 
different. Since November 2013, only 50 percent of votes at FCC 
meetings have been unanimous. This level of discord is unprecedented. 
Indeed, there have been 40 percent more party-line votes at FCC 
meetings in the last seventeen months than there were under Chairmen 
Martin, Copps, Genachowski, and Clyburn combined.
    On issue after issue, the Commission's Republicans have been 
willing to compromise. But time and time again, our overtures have been 
rebuffed. Last December, for instance, I offered twelve proposed edits 
to the Incentive Auction Procedures Public Notice. I did not expect 
that all of them would be accepted. And indeed, even if all of them had 
been accepted, the document certainly would not have been what I would 
have drafted if my office had the pen. But I was willing to meet the 
Chairman's Office more than halfway.
    So what happened? Eleven of my suggestions were rejected outright, 
and the response was ``maybe'' on the twelfth. For each proposal but 
one, there was no willingness to talk, no willingness to negotiate, no 
willingness to compromise. It was just one red line after another, or 
so I was told. What were some of those proposals that were viewed as 
too extreme? One was my suggestion to extend the comment deadlines for 
these exceedingly complex procedures. But I was told that we could not 
do so without risking a delay in the auction. You might say I was a 
little amused when the FCC later ended up extending the deadlines twice 
after receiving complaints from stakeholders. Then again, this wasn't 
the first time that an idea offered by a Republican Commissioner has 
been rejected only to be accepted when proposed by someone else. Last 
summer for instance, the Chairman's Office rejected some of my proposed 
changes to the E-Rate order (including such ``radical'' proposals as 
allowing schools and libraries to use E-Rate funds for caching servers) 
only to accept them when they were offered by one of the Democratic 
Commissioners.
    This isn't how the FCC used to operate. And it's certainly not how 
it should function. Our work product is far better when every member of 
the Commission is allowed to contribute. And our orders have far more 
legitimacy when they are the product of consensus rather than raw 
political power.
    The divisive manner in which the Commission is being run extends to 
other areas as well. In particular, the Commission's longstanding 
procedures and norms have repeatedly been abused in order to freeze out 
Commissioners and subvert the deliberative process. Here are just three 
examples:

   In a dispute about whether third parties should be given 
        access to sensitive programming contracts in the Comcast-Time 
        Warner Cable and AT&T/DIRECTV merger proceedings, the 
        Chairman's Office circulated an order at 1:39 PM on November 
        10, 2014 (the afternoon before Veterans Day) and told 
        Commissioners that they had to cast their votes by the end of 
        that day or else the programming contracts would be released. 
        What was the emergency requiring hurried consideration of such 
        an important and complex issue? There was none. Given this 
        process, I wasn't surprised that the D.C. Circuit later stayed 
        the disclosure order the Commission adopted on a party-line 
        vote.

   The Chairman's Office circulated an item last July that, 
        among other things, changed the coordination zones previously 
        adopted by the Commission in the AWS-3 band. When I asked the 
        Wireless Telecommunications Bureau to show me what the new 
        coordination zones would be, the Bureau said that it could not 
        do so. After I indicated that I would be unable to cast a vote 
        on new coordination zones without knowing what those zones 
        were, the Chairman's Office pulled the item from circulation 
        and directed the Bureau to issue it on delegated authority.

   It has long been customary at the FCC for Bureaus planning 
        to issue significant orders on delegated authority to provide 
        those items to Commissioners 48 hours prior to their scheduled 
        release. Then, if any one Commissioner asked for the Order to 
        be brought up to the Commission level for a vote, that request 
        would be honored. I can tell you from my time as a staffer in 
        the Office of General Counsel that we consistently advised 
        Bureaus about this practice. Recently, however, the Chairman's 
        Office has refused to let the Commission vote on items where 
        two Commissioners have made such a request. Moreover, on many 
        occasions significant matters have not even been provided to 
        the Commission 48 hours prior to their release. Often, we only 
        receive them a couple of hours in advance. Other times, we 
        learn about them from the press after they are released.

    Given these abuses as well as others, I commend this Committee and 
the House Energy and Commerce Committee for addressing the issue of FCC 
process reform. In particular, I would urge you to consider taking 
steps to ensure that important policy decisions are made by the 
Commission as a whole rather than staff acting at the direction of the 
Chairman's Office. Congress established the FCC as a multimember agency 
and gave each of its five members an equal vote. Had Congress wanted to 
make the agency a sole proprietorship or to make some Commissioners 
more equal than others, it would have structured the Commission in a 
dramatically different way. I believe that action should be taken to 
restore the FCC to its collaborative and bipartisan tradition.
    Chairman Thune, Ranking Member Nelson, and Members of the 
Committee, thank you once again for holding this hearing and allowing 
me the opportunity to speak. 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 Rosenworcel.

 STATEMENT OF HON. JESSICA ROSENWORCEL, COMMISSIONER, FEDERAL 
                   COMMUNICATIONS COMMISSION

    Ms. Rosenworcel. Good afternoon, Chairman Thune and Ranking 
Member Nelson and Members of the Committee.
    Today, communications technologies account for one-sixth of 
the economy. And, they are changing at a breathtaking pace. How 
quickly? Well, consider this: it took the telephone 75 years 
before it reached 50 million users. To reach the same number of 
users, television took 13 years and the Internet took 4 years. 
More recently, Angry Birds took only 35 days.
    [Laughter.]
    Ms. Rosenworcel. So we know the future is coming at us 
faster than ever before, and we also know that the future 
involves the Internet. And our Internet economy is the envy of 
the world. It was built on a foundation of openness, and that 
is why I support network neutrality.
    Now, with an eye to the future, I want to talk about two 
other things today: Wi-Fi and the Homework Gap. First, Wi-Fi. 
Few of us go anywhere now without our mobile devices in our 
palms, pockets, or purses. That's because every day in 
countless ways our lives are dependent on wireless 
connectivity. While the demand for our airwaves grows, the bulk 
of our policy conversations are about increasing the supply of 
licensed airwaves for available for commercial auction. This is 
good but it is also time to give unlicensed spectrum and Wi-Fi 
its due.
    We should do that because Wi-Fi is, after all, how we get 
online. Wi-Fi is also how our wireless carriers manage their 
networks with licensed spectrum through offloading. And Wi-Fi 
is a boon to the economy. There are studies that demonstrate 
that it is responsible for more than $140 billion of economic 
activity every year. And that's big.
    So we need to make unlicensed services like Wi-Fi a 
priority. And the Commission is doing just that with our work 
on the 3.5 gigahertz band, and next year with our work on the 
600 megahertz band. But, I think, it's going to take more than 
this to keep up with demand and that's why I think the time is 
right to explore greater unlicensed use in the upper portion of 
the 5 gigahertz band. And, going forward, we all need to be on 
guard to find more places for Wi-Fi to flourish.
    Now, second. I want to talk about the Homework Gap. Today, 
roughly seven in ten teachers assign homework that requires 
broadband access. But FCC data suggests that as many as one in 
three households do not have access to broadband at any speed. 
So think about those numbers. Where they overlap is what I call 
the Homework Gap. Because, if you are a student in a household 
without broadband today, getting your homework done, just 
getting your homework done, is hard and it's why the Homework 
Gap is now the cruelest part of our digital divide. But it's 
within our power to bridge it.
    More Wi-Fi will help, as will our recent efforts to upgrade 
connectivity in our Nation's libraries through E-Rate. But more 
work remains. And I think the FCC needs to take a hard look at 
modernizing its program to support connectivity in low-income 
households, especially those with school-aged children. And I 
think the sooner we act the sooner we bridge this gap and give 
more students a fair shot at digital age success.
    Thank you.
    [The prepared statement of Ms. Rosenworcel follows:]

     Prepared Statement of Hon. Jessica Rosenworcel, Commissioner, 
                   Federal Communications Commission
    Good afternoon, Chairman Thune, Ranking Member Nelson, and members 
of the Committee. Thank you for the opportunity to appear before you in 
the company of my colleagues at the Federal Communications Commission.
    Today, communications technologies account for one-sixth of the 
economy--and they are changing at a breathtaking pace. How fast? 
Consider this: According to the Wall Street Journal, it took the 
telephone 75 years before it reached 50 million users. To reach the 
same number of users, television took 13 years, and the Internet 4 
years. But Angry Birds took only 35 days.
    So we know the future is coming at us quicker than ever before. We 
also know that the future involves the Internet and that our Internet 
economy is the envy of the world. It was built on a foundation of 
openness. Sustaining the openness that has made us innovative, fierce, 
and creative is vitally important. In fact, our commercial and civic 
success in the digital age depends on it. That is why open Internet 
policies matter--and why I support network neutrality.
    As you have undoubtedly heard, four million Americans wrote the FCC 
to make known their ideas, thoughts, and deeply-held opinions about 
Internet openness. They lit up our phone lines, clogged our e-mail in-
boxes, and jammed our online comment system. That might be messy, but 
whatever our disagreements on network neutrality, I hope we can agree 
that's democracy in action and something we can all support.
    With an eye to the future, I want to talk about two other things 
today--the need for more Wi-Fi and the need to bridge the Homework Gap.
    First, up Wi-Fi. Few of us go anywhere now without mobile devices 
in our palms, pockets, or purses. That is because every day, in 
countless ways, our lives are dependent on wireless connectivity. While 
the demand for our airwaves grows, the bulk of our policy conversations 
are about increasing the supply of licensed airwaves available for 
auction. This is good. But the best spectrum policy involves a mix of 
both licensed and unlicensed airwaves. And focus on the former should 
not come at the expense of the latter.
    That's because the 2.4 GHz band where Wi-Fi makes its primary home 
is getting mighty crowded. The demand for 5 GHz Wi-Fi is also growing. 
So before we overwhelm Wi-Fi as we know it, we need more efforts to 
secure more unlicensed spectrum.
    There are no shortage of reasons why this is a good idea.
    After all, Wi-Fi is how we get online--in public and at home.
    Wi-Fi is also how our wireless carriers manage their networks. In 
fact, today nearly one-half of all wireless data connections are 
offloaded onto unlicensed spectrum.
    Wi-Fi is how we foster innovation. That's because the low barriers 
to entry for unlicensed airwaves make them perfect sandboxes for 
experimentation.
    Wi-Fi is also a boon to the economy. The economic impact of 
unlicensed spectrum has been estimated at more than $140 billion 
annually.
    So we need to make unlicensed services like Wi-Fi a priority in our 
spectrum policy. We have opportunities to do just that with upcoming 
FCC work in the 3.5 GHz band and in the guard bands in our reimagined 
600 MHz band. But it will take more than this to keep up with demand. 
That is why I think the time is right to explore greater unlicensed use 
in the upper portion of the 5 GHz band, and specifically from 5850 to 
5925 MHz. In the future, we need to be on guard for more opportunities 
like this so we can find more places for Wi-Fi to flourish.
    Second, I want to talk about another issue that matters for the 
future--the Homework Gap. Today, roughly seven in ten teachers assign 
homework that requires access to broadband. But FCC data suggest that 
as many as one in three households do not subscribe to broadband 
service at any speed--due to lack of affordability and lack of 
interest.
    Think about those numbers. Where they overlap is what I call the 
Homework Gap. If you are a student in a household without broadband, 
just getting homework done is hard. Applying for a scholarship is 
challenging. While some students may have access to a smartphone, let 
me submit to you that a phone is just not how you want to research and 
type a paper, apply for jobs, or further your education.
    These students enter the job market with a serious handicap. That's 
a job market today where half of all jobs require digital skills. By 
the end of the decade that number jumps to 77 percent. But the loss is 
here more than individual. It's a loss to our collective human capital 
and shared economic future that we need to address.
    That is why the Homework Gap is the cruelest part of our digital 
divide. But it is within our power to bridge it. More Wi-Fi will help, 
as will our recent efforts to upgrade connectivity in libraries through 
the E-Rate program. But more work remains. I think the FCC needs to 
take a hard look at modernizing its program to support connectivity in 
low-income households, especially those with school-aged children. And 
I think the sooner we act the sooner we bridge this gap and give more 
students a fair shot at 21st century success.
    Thank you and I look forward to answering any questions you might 
have.

    The Chairman. Thank you, Commissioner Rosenworcel.
    We have a lot of participation on both sides today. And so, 
as much as we can, try to adhere to the 5 minute rule. I know 
it will be hard as we have a lot of interest in this subject 
and a lot of questions we'd like to ask our panelists today.
    So let me start by talking a little bit about an issue 
that's important to me and to my state, and I'll start by 
saying that laws and policies that are outdated often lead to 
rules that are arbitrary which ultimately limits consumer 
choice and raises cost. And the current Universal Service Fund 
rules require a rural consumer to buy voice service from a 
small rural telephone company in order for that carrier to be 
eligible for USF support. If the same rural consumer decides to 
buy only broadband services without a telephone subscription, 
the carrier is no longer eligible to receive USF support for 
that subscriber's line. This contradiction undermines the 
mission of the new broadband-centric USF. It makes broadband 
more expensive for rural households and increasingly threatens 
the sustainability of rural communications networks.
    Last year, Senators Gardner, Klobuchar, and I led letters 
to the Commission that urged the FCC to propose rules to solve 
this issue. Nearly a year later, that issue remains unsolved. 
And so, I want to ask each of you a question. I'm going to take 
the approach of my predecessor, Chairman Rockefeller, and ask 
for the commitment from each commissioner. And the question, 
very simply, is: Will you commit to solving this growing threat 
to rural communications by the end of this year?
    Mr. Wheeler. Aye.
    Ms. Clyburn. Absolutely.
    Mr. O'Rielly. Yes.
    Mr. Pai. Yes.
    Ms. Rosenworcel. Yes.
    The Chairman. Very good. Thank you.
    Mr. Wheeler. OK, we have unanimity now, sir.
    [Laughter.]
    The Chairman. Yes. This was designed to get you guys all on 
the same side of an issue.
    [Laughter.]
    The Chairman. I want to make an observation too. I know 
with the Commission's order is the subject of the day in 
addition to other things that we would like to talk about.
    I have a father who is 95 years old. He lives in my 
hometown of Murdo, South Dakota with a population of about 500 
people. He's a user of the Internet. And it strikes me if I had 
to suggest to my dad that we're going to regulate the Internet 
that he uses with a law that was passed during the Great 
Depression when he was 14 years old, I think he would probably 
be flabbergasted. And essentially, that's what we're doing. 
We're trying to take something that was designed for a very 
different era and squeeze it and trying to fit it into a modern 
technology. And one of the issues that that statute allows for 
is rate regulation.
    Now, I know that, Chairman, you have contended that no rate 
regulation is going to result from the open-net Internet order. 
Let's just say, hypothetically, that someone files a complaint 
at the FCC alleging that the rates that they're paying an 
Internet Service Provider for broadband service are not just 
and reasonable under Section 201?
    And I'll also say to Commissioner Pai, as a result of Title 
II reclassification, isn't the Commission legally obligated to 
investigate and rule on that type of a complaint?
    Mr. Pai. Mr. Chairman, that is absolutely right. The Order 
opens the door to complaints under Section 208, both to the 
Commission and to courts around the country. And at that point 
it will be up to the Commission, if it receives such a 
complaint, to adjudicate whether or not a rate is just and 
reasonable. And most notable, the Order limits itself only to 
saying that we don't engage in ex ante regulation, things like 
tariffs and its play in methodology. But it says nothing about 
ex post regulation, and I think that is why ex post rate 
regulation is a very real prospect.
    The Chairman. So if that circumstance were to happen, 
Commissioner Rosenworcel, if the Commission judges the rates to 
be unreasonable, could the FCC require the ISP to adjust its 
rates or to impose fines and forfeitures on the ISP?
    Ms. Rosenworcel. Well, we don't have such a case before us 
right now, but I think it's important as a matter of due 
process that any provider that's having difficulty succeeding 
in getting the interconnection they need to provide service has 
the opportunity to complain to the Commission and seek 
resolution.
    The Chairman. So the answer is, yes, the FCC could.
    Ms. Rosenworcel. We'll see when we have a complaint before 
us.
    The Chairman. Right. But I'm just saying----
    Ms. Rosenworcel. Sure.
    The Chairman. I'm not saying you should. I'm saying you 
could.
    Commissioner Clyburn, in a rate complaint case, how will 
with the FCC decide if a rate is unreasonable or unjust?
    Ms. Clyburn. So given the same context that you set up, one 
of the examples that I gave in my opening statement was on 
inmate calling. And that affirms and should affirm to us all 
that the bar is incredibly high when it comes to the scenario 
that you put forth. We waited over 10 years to even think about 
addressing what was obviously a market failure. So again, we 
won't know, like my colleague said, until something is before 
us. But it passed as prologue that bar is extremely high for 
that case to come to the resolution in which you put forth.
    The Chairman. But you would have the discretion to 
determine if a rate is unjust or unreasonable?
    Ms. Clyburn. We have an obligation, I believe, to look at 
any complaint, anything filed before us, and make a decision 
accordingly.
    The Chairman. And if that decision is made, if that 
conclusion is reached, the FCC could, in that circumstance, act 
in a way that would adjust rates or impose fines?
    Ms. Clyburn. I jokingly say that, even though I am from the 
south and we have the other south, South Carolina, and that we 
have been known--and there have been very interesting people 
who have predicted the future--I, unfortunately, do not have 
that talent.
    The Chairman. Well I would have a hard time, I would think, 
explaining--or how that adjudicatory process would not be rate 
regulation and, you know like I said, granted the Chairman has 
said, that is something on which they would forebear. But if a 
case is brought forward, it strikes me at least, that the FCC 
has an obligation to respond. And I also think that things that 
are decided by this Commission certainly don't bind future 
commissions, which is why we've argues all along that working 
constructively on a legislative solution that sets clear rules-
of-the-road is the best approach to doing this.
    But that being said, my time has expired.
    Senator Nelson.
    Senator Nelson. Chairman Wheeler, rate regulation, 
unbundling, tariffing, these are things that some of the big 
corporations are quite concerned about and no doubt you've had 
conversations with the CEOs of those corporations. And you've 
explained what your order is. How did you explain it and what 
was their reaction?
    Mr. Wheeler. Thank you, Senator.
    So rate regulation, tariffing, unbundling, those sections 
are all forborne, I never know what the past tense is on 
forbearance but it's we are not using them out of Title II.
    To the point that Senator Thune was just making: 1993, 
Senator Markey, then-Congressman Markey, created Section 332 of 
the Communications Act in the House, which was sought by the 
wireless industry when they asked to be treated as Title II 
common carriers and to have forbearance from parts of the act 
that are no longer appropriate in a non-monopoly situation. 
That included, specifically as a decision by Congress, Section 
201. So the kind of example that was just raised about Section 
201(b) being some kind of backdoor into rate regulation has 
existed for 22 years in the wireless industry. And the 
Commission has not been confronted and has not acted in this 
kind of way that suggested it's some kind of backdoor 
regulation.
    In fact, what has happened is that with the absence of 
consumer rate regulation, that industry has been incredibly 
successful. The wireless voice industry has had $300 billion in 
investment since then and it was that model that is actually 
more forbearance than was created for the wireless industry 
that we patterned the open Internet order on so that it is not 
your grandfather's Title II. Title II has 48 sections. Twenty-
seven of those sections we said we will not use, which is 50 
percent more than Mr. Markey results in 22 years ago.
    So I think that the record is pretty clear. That if we say 
we're not going to have consumer rate regulation, we are not 
going to have tariffing, we are not going to have unbundling, 
and we explicitly remove those sections and say we're not 
looking at those sections and we pattern ourselves after 
something that has this kind of a two decade record of not 
having these imaginary horribles happen, then we're on a pretty 
course.
    Senator Nelson. And things like transparency and a host of 
other issues, there's wide acceptance.
    Mr. Wheeler. So the interesting thing is that there are 
four regulatory actions in our order; no blocking, no 
throttling, no paid prioritization in transparency, which are 
the same things that is the legislation up here that the 
Chairman and others have introduced contain those four. And the 
ISPs run ads saying, ``Over all four of these, we would never 
think about doing these kinds of things.''
    Those are the four regulatory constructs. The thing where 
everybody gets agitated is that we also say, and there should 
be a basic set of ground rules for things that nobody can 
anticipate, that are not proscriptive regulatory saying, 
``We're smart, therefore you will do this.'' But we are saying, 
``Well, let's take a look and is that just a reasonable? Is 
that in the consumer interest? Is that in the edge provider 
interest? Is that in the public interest?''
    And, on a case-by-case basis. And the fascinating thing to 
me, sir, is that the ISPs for years have been saying, ``We 
don't want the FCC to have such broad rulemaking authority. 
They ought to be looking at things like the FTC on a case-by-
case basis.''
    And, now, what happens is we come out and we say ``OK'' we 
do something that is like the FTC on a case-by-case basis and 
everybody says, ``Oh, that's terrible uncertainty. We don't 
know what it is. If only they would be making rules and telling 
us what things were?''
    You can't have it both ways, but I think that what we have 
built is common on four aspects. The only four regulatory 
aspects, and then says, there needs to be a set of rules and 
there needs to be a set of standards, and there needs to be a 
referee on the field who can throw the flag if somebody 
violates those standards.
    Senator Nelson. And I would just conclude, Mr. Chairman, by 
saying that certainly the five Commissioners in front of us 
would never do this kind of dastardly stuff. But, would a 
future Commission do it? And the flip side of that, and I'd 
like you to comment, Chairman Wheeler, what about the future 
CEOs that presently you have confidence in them, but what about 
someone that suddenly wants to go beyond the scope of your 
intent?
    Mr. Wheeler. So CEOs come in to me, Senator, and they say, 
``You know, we trust you. We think you have, you know, we may 
not agree with everything but, you know, you're not wild and 
crazy. And we think that there'll be decent or responsible 
decisions. And so, we trust you but what about that crazy 
person that's going to follow you, you know, some years down 
the road?''
    And my response is ``I feel the same way about you, sir, 
that you have said, `You would never do these kinds of 
dastardly things to the Internet, but what about the wild and 
crazy CEO who follows you?' ''
    And so, what all we are trying to do is say, ``Let's have a 
basic set of rules.'' Is it just? Is it reasonable? And, is 
there a referee on the field who can measure against the 
yardstick and throw the flag if appropriate?
    Senator Nelson. Thank you.
    The Chairman. Thank you, Senator Nelson.
    Senator Fischer.

                STATEMENT OF HON. DEB FISCHER, 
                   U.S. SENATOR FROM NEBRASKA

    Senator Fischer. Thank you, Mr. Chairman and Ranking Member 
Nelson.
    Chairman Wheeler, there are a number of Members of Congress 
who believe that new technologies can help the United States 
remain innovative, and I'm working with Senator Booker, Senator 
Schatz, Senator Ayotte, on the Internet of things. And I think 
that's going to be a very good bipartisan resolution and, 
moving forward, hopefully legislation so we can see that 
innovators are able to grow their businesses and they're going 
to be able to solve problems with clear rules and also clear 
expectations.
    I think that's necessary; that innovators have to have that 
certainty out there. And when I look at the general conduct 
rule that is proposed that you have here, I'm concerned it 
could jeopardize that regulatory certainty that I think we have 
to have if we're going to remain competitive.
    The Electronic Frontier Foundation has described this rule 
as an overreach and confusing. Specifically, the EFF said, 
``The FCC believes it has broad authority to pursue any number 
of practices; hardly the narrow, light-touch approach we need 
to protect the open Internet.''
    The Wall Street Journal reported that at a recent press 
conference you said, with respect to the general conduct rule, 
that ``We don't really know. We don't know where things will go 
next.''
    The Order says the agency will ``watch, learn, and act as 
required, a process that is sure to bring greater understanding 
to the Commission.''
    So my question to you is: how can any business that is 
trying to innovate have any kind of certainty that they're not 
going to be regulated by the FCC under, what I view, as a very 
vague rule that you have here?
    For example, when will it be applied? What specific harms 
does the General Conduct rule seek to address that the rest of 
the President's Open Internet order doesn't capture? What are 
you after here?
    Mr. Wheeler. Thank you, Senator.
    First of all, I'd like to identify myself as an 
entrepreneur and as somebody who has started multiple companies 
and spent the ten years before I came into this job as a 
partner at a venture capital firm investing in those companies. 
And I know from my experience that the key to innovation is 
access and that, when gatekeepers deny access, innovation is 
stifled. That's what we want to avoid. We do not want to be in 
a situation where we are having proscriptive rules. We want to 
be, and what we have structured, is something that says, ``OK, 
let's ask a couple of questions. What's the impact on consumers 
of this action? What's the impact on content providers, those 
who want to be delivering? And what's the public interest?''
    And I think we can probably all agree that nobody wants to 
sit by and see something evil happen to any three of those legs 
of the stool. And those are the tests. And we look and say, 
``OK, now, what happens on those three legs of the stool with 
this kind of an action that we have a complaint on?'' And the 
important thing is, as I was saying to Senator Nelson, that 
this is not us saying, ``We're so smart, we know what you 
should do.''
    This is specifically doing what the ISPs have been saying 
to us. Don't make rules, but rather look at things on a case-
by-case basis. And that's what we tried to build in that kind 
of flexibility.
    Senator Fischer. With that flexibility, though, what do you 
do with these entrepreneurs, the innovators that are coming up 
with things that I can't even imagine?
    And there's a process that they're going to have to go 
through with the FCC that they don't know if they're going to 
be required to go through or not. What do you say to them?
    Mr. Wheeler. Oh, I'm glad you asked.
    Senator Fischer. Do they wait and get their ideas hijacked?
    Mr. Wheeler. No, we don't move up the stack. We are talking 
about the delivery services. We are not talking about 
regulating two guys and a dog in a garage and they have to get 
permission as to what they do.
    Senator Fischer. Do you think that's clear?
    Mr. Wheeler. Yes, ma'am. Yes, ma'am. We are very clear on 
that and that is an essential component of this.
    First of all, I think it's questionable what our reach 
would be in terms of statutory authority. We are dealing with 
the delivery of what these creative people want to do, and 
making sure that they have open delivery.
    Senator Fischer. And if I could just switch gears here. In 
your testimony, I read that you're trying to move forward with 
a voluntary incentive auction no later than early 2016.
    Mr. Wheeler. Yes, ma'am.
    Senator Fischer. Are you committed to that?
    Mr. Wheeler. Yes, ma'am.
    Senator Fischer. All right. Thank you.
    The Chairman. Thank you, Senator Fischer.
    Senator McCaskill.

              STATEMENT OF HON. CLAIRE McCASKILL, 
                   U.S. SENATOR FROM MISSOURI

    Senator McCaskill. Thank you.
    I want to begin by associating myself with Commissioner 
Pai's remarks about designated entities, and we've visited 
about this.
    The rest of the story that was not explained is that not 
only was this a very big company using small businesses to get 
a $3 billion advantage, a $3 billion advantage, one of the 
entities that was used was an Alaska-native corporation, which 
I think most people are aware, that they don't have any rules 
about being small. So it is insult to injury because Alaska-
native corporations are multi-billion dollar, multi-national 
corporations that get special deals under our law. They don't 
have to compete. They don't ever age out of the program. They 
never get too old for the program. They never get too big for 
the program. And you confront legally. So this is really, I 
think, outrageous and I hope we can figure out a way to get to 
the bottom of it.
    I want to talk about Lifeline a little bit. I have visited 
with many of you about Lifeline. I think it is a program that 
began under, I believe, President Reagan, President Bush, you 
know, it was a subsidy. It morphed into a program without any 
kind of controls, without any kind of regulation, and it was a 
mess. Now, I know we have had some enforcement but I know we've 
had a pilot program on expanding it to broadband.
    Let me ask you first, Chairman Wheeler. When will the 
report on the pilot program be available?
    Mr. Wheeler. Senator, I can't give you the specific date, 
but it's in the next couple of months.
    Senator McCaskill. Well, we had some enforcement. There 
hasn't been much in a year. There is a list of reforms I think 
that include, and if any of you disagree with any of these 
reforms, if you would speak up for the record, I would 
appreciate it: Taking eligibility determination out of the 
hands of carriers; competitive bidding; making sure consumers 
have some skin in the game; placing a cost cap on the program. 
Anybody disagree with those four reforms?
    Mr. Pai. No.
    Senator McCaskill. OK.
    I would like to see those instituted and I would like a 
discussion from you about whether or not it makes sense to 
continue the Lifeline program. Doesn't it make more sense to 
make it a broadband program?
    Looking at the Homework Gap, looking at the capability of 
making calls over the Internet, doesn't it make sense to 
institute these structural reforms as we transition this from a 
program where no one has skin in the game and we have allowed 
the carriers to commit massive fraud in this country? Doesn't 
it make sense to convert this whole program over to broadband? 
And I would love your take on that.
    Ms. Clyburn. I'm not sure who you're--but I'm going to 
speak up----
    Senator McCaskill. Any of you can speak up. I would love 
somebody to speak up who disagrees with doing this.
    Ms. Clyburn. Well, I was showing my Southern graces. I 
cannot sit before you and say that I necessarily agree with 
everything you laid out.
    One of the things that I am adamant about, I put forward 
five principles last year. One of which I think is the most 
important that would get to the heart of some of the problems 
that we are having is getting the companies out of the 
eligibility game. They should not be in that space. Grocery 
stores do not certify or have people eligible, you know, for 
SNAP. They're not in that game. Doctors do not qualify people 
for Medicaid. Providers should not qualify people for that 
program. This should be an independent arm. And I think, I 
truly believe, that a lot of the issues that have plagued this 
program, if we take them out of that, would go to the heart of 
what we are seeing.
    Please.
    Senator Fischer. Commissioner Pai and Commissioner 
O'Rielly, I have had an opportunity to talk to the Chairman 
about this idea. Would you be willing to work with the 
Democratic Commissioners on a program that had controls and had 
reforms in it that transitioned over to a broadband program?
    Mr. O'Rielly. Absolutely. And, as you may know, I actually 
wrote recently about this issue and put forward some of my 
principles on reform. And I thought that it would be helpful to 
start in a review of the existing program and all the issues 
that it has faced before we go to the broadband--expand the 
program to broad band that hasn't seemed to be where the 
direction we've been getting the signals internally. So I've 
tried to put forward reforms that I would think that we could 
do going forward, but I think we should have that fundamental 
conversation on the reforms that should be in place before we 
go there.
    Senator McCaskill. Or maybe there in lieu of.
    Mr. O'Rielly. I would be open to that as well.
    Mr. Pai. Senator, first I want to thank you for your 
leadership on issues of FCC Fiscal Responsibility, including 
the AWS re-auction and Lifeline.
    With respect to Lifeline as applied to broadband, I think 
it's critical for us, first, to learn the lessons from the 
pilot. Obviously, before expanding----
    Senator McCaskill. Right.
    Mr. Pai.--it to the entire broadband industry, we want to 
understand how the pilot has worked.
    Second, I have put forward in a speech at the Citizens 
Against Government Waste a number of different principles for 
reform including some of the ones you've talked about. And I 
think it's critical for us to institute those first to ensure 
that the program is on a stable footing because, remember, the 
Lifeline program is the only one of the four Universal Service 
Fund programs that is not capped. And so, if we don't have 
those basic reforms for the process as the program stands, if 
we expand it to include broadband, there's no telling what kind 
of problems we might encounter.
    Ms. Rosenworcel. Sure.
    In 1985, when Ronald Reagan was in the White House, that's 
when we started this program. It was last updated during the 
Bush Administration. It is time to modernize this program along 
the lines you described, make sure it is free of any waste, 
fraud, and abuse, and then make it address broadband and things 
like we described, the Homework Gap.
    Senator McCaskill. Right, great.
    Mr. Wheeler. And this is not a question of how do we take 
what is there now and just do a paste here or a change there. 
We have to look at this entire program, soup to nuts, and say, 
``Wait a minute, this started in a twisted pair environment, 
metamorphosized into a mobile environment, we now live in a 
broadband environment. Why in the world are we sticking with 
the decisions of the past?''
    Senator McCaskill. Great. Thank you all.
    The Chairman. Thank you, Senator McCaskill.
    Senator Heller, and try to keep it to five if you can.

                STATEMENT OF HON. DEAN HELLER, 
                    U.S. SENATOR FROM NEVADA

    Senator Heller. Thank you, Mr. Chairman. Thanks for calling 
this hearing. I have a statement for the record that I'd like 
to submit.
    The Chairman. Without objection.
    [The prepared statement of Senator Heller follows:]

    Prepared Statement of Hon. Dean Heller, U.S. Senator from Nevada
    Thank you, Mr. Chairman for holding this hearing today. Thank you, 
Chairman Wheeler and the Commissioners of the Federal Communications 
Commission. I appreciate you all being here today.
    Many will take the time to discuss the merits of the Open Internet 
Order that was passed by a partisan vote last month. In short, I do not 
believe that the best method to handle the concerns of throttling, 
blocking and paid prioritization was by reclassifying the Internet 
under title II of the 1934 Communications Act.
    While Chairman Wheeler has repeatedly said he will only use 
portions of that title and forbear others that are not needed, we all 
know that his word, doesn't matter. He will only be chairman for a 
limited amount of time. Another Chairman could come along and do much 
more. A future FCC Chairman could install rate regulation for example. 
It really is only a matter of time in my opinion until another Chairman 
goes much further than this Chairman.
    Unless of course, the rule is challenged in court and the FCC loses 
or bipartisan legislation can be passed to find a solution to the 
concerns that Internet Service Providers could block, throttle or 
create fast lanes for lawful content online. I still have hope that we 
can strike a bipartisan agreement and urge the Ranking Member to work 
with Chairman Thune and Republicans like me, to strike a deal that will 
remove all the economic uncertainty that the Open Internet Order has 
placed on the economy.
    That being said, what I believe needs to be a focus on today's 
hearing is how the rule was passed. Aside from the negative impact on 
the economy, what this order did was shine a bright light on the 
process in which rules are enacted at the Federal Communications 
Commission.
    For years, I have argued that the rulemaking process is outdated. 
My concerns are that the lack of transparency and collaboration combine 
for the ability of the majority at the Federal Communications 
Commission to use the process of creating a rule or amending an 
existing one to reach a desired conclusion. That is why I have 
introduced the FCC Process Reform Act during the last 112th, 113th and 
now in the 114th Congress.
    The legislation would require the agency to publish rules and 
amendments before the Federal Communications Commission votes on them. 
We should never have to wait until a regulatory rule is passed before 
we know what is in it. That is not a partisan position. That is a 
fundamental transparency issue that should be passed by unanimous 
consent by the United States Senate tomorrow.
    The legislation would allow for any Commissioner to ask for a vote 
by the full commission of any order that a bureau issues. According to 
Commissioner Pai's testimony, it has long been customary at the Federal 
Communications Commission to vote on any significant order if a 
Commissioner has requested such a vote. That practice has recently not 
been honored on two separate occasions. This is wrong. The Senate 
confirms nominees for the purpose of voting. There is no reason that I 
see to deny an up or down vote on any significant issue that a bureau 
orders. Again, this isn't partisan, allowing a vote on issues is the 
transparency that all of us should be for.
    The legislation also empowers the Commission to operate more 
efficiently through the reform of the ``sunshine'' rules, allowing a 
bipartisan majority of Commissioners to meet for collaborative 
discussions subject to transparency safeguards. In fact, on this 
Senator Klobuchar has joined my effort and we have a standalone 
bipartisan bill.
    There are many more ways we can help modernize the Federal 
Communications Commission. Such as allowing for a commissioner to 
publish the changes sought to an order, allow for three Commissioners 
to direct staff to work on an issue and mandate a cost benefit analysis 
for any rule that has an economic impact over $100 million would give 
all of us a clearer sense of the impact of a rule.
    Mr. Chairman, you have been clear that you will seek to reauthorize 
the Federal Communications Commission in the coming months. I hope that 
you look at the Federal Communications Process Reform Act of 2015 and 
consider some of the legislative initiatives presented.
    Thank you

    Senator Heller. I want to thank the Commissioners, also, 
for being here.
    And, Chairman, thank you also for attending.
    Today, what I'd like to focus on is how rules are adopted. 
And Commissioner O'Rielly, your opening statement or comments 
were near and dear to some of the comments I want to make 
today. But before I do that, I'd like to make an observation. 
The observation that I have is that it was my opinion that the 
purpose of the Affordable Care Act was to guarantee that all 
Americans have the same bad healthcare. And I believe that this 
Title II decision made by this Commission is to guarantee all 
Americans the same bad Internet service.
    I also believe two things, and I don't believe I am wrong. 
One is, the purpose of this open Internet order is, one, to 
regulate and restrict content and, number two, has opened the 
door to taxation. What I'd like is Commissioners O'Rielly and 
Pai to tell me why I'm wrong.
    Mr. Pai. Well Senator, I'll just tackle part of the 
question. With respect to taxation, you are absolutely right. 
The door opens the door to billions of dollars in taxes and 
fees on broadband.
    With respect to reclassification, that alone, as the Order 
tees up, we're expecting to get a recommendation from the joint 
board on April 7 and it might be kicked off by a short period. 
But reclassification will lead to the imposition of new 
broadband taxes. And if you look at some of the new promises 
that some of the FCC is considering with respect to the 
programs administered under the Universal Service Fund, that 
extra spending has to come from somewhere. And that somewhere 
is going to come from the consumer's pocket.
    In addition to taxation, one of the issues that has been 
relatively unremarked upon is the fact that reclassification 
opens the door to a lot of taxes on the state and local level. 
So, for example, with respect to state property taxes, a lot of 
jurisdictions taxed telecom providers at a much higher rate 
than they do general businesses or non-telecom broadband 
providers. In the District of Columbia alone, where we sit, 
D.C. imposes an 11 percent tax on general receipts, on gross 
receipts. That's immediately an 11 percent tax off the bottom 
line that the broadband providers are going to have to pay 
which costs are going to be passed on to the consumer.
    And so, I think the taxation aspect of this, completely in 
respect to the Internet Tax Freedom Act which does not apply to 
fees that are associated with broadband, is so critical for us 
to keep mentioning because it does effect consumers where it 
hurts the most.
    Mr. O'Rielly. Senator, it would be impolite for me to ever 
suggest that any Senator is wrong, but I don't do healthcare 
anymore so I have no comment regarding that part of your point. 
But in terms of your substantive comment on the content, I 
might refine that and say I do believe eventually that this 
item, with the direction we're going, will get to edge 
providers. I made that point consistently.
    And if you look at where we're going on interconnection and 
how far we've gone in interconnection, there are blurry lines 
between what is actually the middle mile and what providers are 
offering today in terms of their structure. And I do believe, 
eventually this is going to affect edge providers and the 
wonderful benefits that they bring to the American economy.
    Senator Heller. Commissioner O'Rielly, I want to go to your 
opening comments calling for amendments to a rule that at least 
21 days prior to publication of a rule that it be displayed and 
made available to the public. And I don't think that is a 
partisan issue. I think that's an issue that we can all agree 
with. There are many other ways, I think, to make the FCC more 
transparent.
    I've suggested, for example, that I have concerns with 
staff changes that takes place after votes have already been 
taken. I think all Commissioners should be able to ask for a 
vote on any order of bureau passes. Commissioners should be 
able to collaborate more freely. And I think any rule that 
impacts the economy by more than $100 million should be subject 
to a cost benefit analysis.
    Commissioner O'Rielly, I believe that that would make or 
increase the transparency in the collaboration of the 
Commission that you have. But I guess the question is, one, do 
you agree with that? And two, are there any other suggestions 
that you believe would add more transparency?
    Mr. O'Rielly. Sure.
    So you suggested some really good changes that I would 
whole-heartedly agree and have advocated. I should make it 
clear, though, I don't think it is reflective of the item that 
we've just talked about. These should apply to across-the-board 
in going forward. It's not just about that neutrality that's 
indicative of some instances, but really it should apply going 
forward for everything; certainly on the 21 day availability.
    But I have a host of ideas that I think that would help, 
and my time being a Congressional staffer and now being someone 
who has seen this for about 15 months, and you highlighted the 
delegation issue. You know, we have an ununiformed situation 
now where it's called our 48 hour rule. And in some instances, 
we are notified that we have 48 hours--we are basically given a 
heads-up for 48 hours. But only in certain instances. Sometimes 
it's 48 hours. Sometimes it's 24 hours. Sometimes it's zero. I 
get an e-mail on Friday from one of the bureaus and it said, 
``As a courtesy, we're letting you know.''
    That's how it comes. It's a courtesy they're letting me 
know what they're going to do. And I just think that's the 
wrong approach. I, you know, went through the process to get on 
the Commission to make as many decisions as possible. And I'm 
happy to vote in a quick and timely way, but I don't think it's 
something that is a courtesy I'm allowed to know what's 
happening at the Commission.
    And we see that problem in the delegation area, where 
things get delegated, in many instances, by previous 
Commissions that I was part of and now the delegation authority 
continues and I don't even have an ability to track what is 
being decided by the bureaus separate from what is happening at 
my level.
    Senator Heller. Commissioner, thank you. I look forward to 
working with you.
    Mr. Chairman, I look forward to working with you on 
reauthorization of the FCC. I do hope that some of these ideas, 
both myself and what the Commissioner just mentioned, could be 
put forth and looked at as we move forward.
    The Chairman. And I appreciate the good work that you put 
into that already, Senator Heller. I look forward to working 
with you on it.
    Senator Blumenthal.

             STATEMENT OF HON. RICHARD BLUMENTHAL, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Blumenthal. Thanks, Mr. Chairman, and thanks for 
working in such a bipartisan way on this hearing and on the 
bills that we'll be considering relating to these issues.
    First of all, thanks to all of you for being here today.
    Chairman Wheeler, I appreciate your remark about the wild 
and crazy CEOs and the wild and crazy Commissioners who might 
follow the present occupants of those offices. I want to assure 
you, nobody ever asks us about the wild and crazy Senators who 
may follow us.
    [Laughter.]
    Senator Blumenthal. I'm not going to go any farther with 
that.
    I want to express my strong support for the FCC's Open 
Internet order. This decision was unequivocal, emphatic, and 
epical in its affect. It was a victory for consumers and 
innovators that's all too rare in Washington these days. And I 
know that it will be challenged in the courts, and I want to 
commit to you that I would be pleased to lead whatever amicus 
efforts may be necessary to support it. I believe there will be 
a lot of support for such involvement by my colleagues, and I 
believe it is strongly grounded in the authority that the U.S. 
Supreme Court has provided repeatedly under Chevron, most 
recently, under Smiley V Citibank, and you alluded to it in 
paragraph 329 of the Order.
    I also want to express my gratitude to all of you for 
joining in the bipartisan vote to repeal the sports blackout 
rule that I long called for with my colleague, Senator McCain. 
We plan to pursue that issue in the FANS Act because the sports 
leagues unfortunately have themselves continued to retain the 
power to blackout games through their private contract 
agreements.
    And my special thanks go to Commissioner Clyburn for 
starting the proceeding, Commissioner Pai for going to Buffalo 
and announcing your opposition of the blackout rule, and 
Chairman Wheeler for focusing the agency's attention on this 
issue.
    I want to express to all of you the action that you've 
taken strong and, again, emphatic action on cramming. And 
particularly to Commissioner Rosenworcel for coming to 
Connecticut and helping to educate consumers there about the 
pernicious effects of cramming and the attention that they need 
to pay to it.
    But, again, this action on stopping cramming through the 
settlements that you reached with AT&T and T-Mobile, I hope 
will lead to rules that go beyond those settlements. As 
important as they were, I think that there need to be rules 
established in embodying the conditions that were expressed in 
those settlements that require express consent from subscribers 
before any third-party wireless company; any wireless carrier 
allows third-party's access to their customers' bills; ensure 
third-party charges are clearly and conspicuously identified on 
bills; and provide free service to consumers to block those 
third-party charges should they choose to do so.
    And I'd like to know from each of you, you can say it 
simply yes or no, whether you commit to updating the FCC's 
rules to apply these requirements to the whole wireless 
industry and ensure all carriers protect their subscribers from 
all of these kinds of deceitful practices rather than profiting 
from them. And I'm assuming that you would agree. And you can 
indicate simply yes or no.
    Commissioner Clyburn?
    Ms. Clyburn. Yes.
    Mr. O'Rielly. Yes.
    Mr. Pai. Yes.
    Ms. Rosenworcel. Yes. Cramming is pickpocketing and we need 
to stop it.
    Mr. Wheeler. Yes, in two flavors. One, as you suggest and, 
two, we're going to keep enforcing.
    Senator Blumenthal. Thank you.
    And I hope that it will be possible for those rules to be 
promulgated. I don't ask for a firm commitment, Mr. Chairman, 
but I'm hoping by the end of spring that we can anticipate 
those rule will be on the books.
    I'd like to just turn, briefly, to the Comcast-Time Warner 
merger. As the FCC reviews this merger, I'd like your 
assurance, Mr. Chairman, that you will take into account 
anything that the FCC can do to protect consumers, because I 
think a number of us are concerned about the potential 
increases in prices and reduction in consumer choice that could 
come from continued excessive consolidation in the broadband 
marketplace.
    Mr. Wheeler. Senator, as you know, this is an adjudicatory 
proceeding and I should not opine as we are sitting in 
judgment. The responsibility that we have is to make a decision 
in the public interest, convenience, and necessity. That'll be 
the basis of the decision, sir.
    Senator Blumenthal. Thank you.
    Thanks, Mr. Chairman.
    Senator Nelson [presiding]. Senator Markey, then Senator 
Gardner.

               STATEMENT OF HON. EDWARD MARKEY, 
                U.S. SENATOR FROM MASSACHUSETTS

    Senator Markey. Thank you so much.
    And I want to congratulate you on your Title II decision. I 
think it's very consistent with the positions the FCC has taken 
over the years and including, Mr. Chairman, what you mentioned, 
in 1993, about the light-touch approach for the wireless 
industry under Title II that led to an explosion of hundred of 
billions of dollars of investment in that sector. That's in the 
best tradition of what the FCC does.
    And I think under Title II, you'll be able to continue that 
as well, ensuring not only that there is a robust competitive 
marketplace but also that privacy is protected, that the rights 
of the disabled are also protected, that we moved to ensure 
that those additional protections are built into the law.
    And I have a letter, Mr. Chairman, from 140 advocacy groups 
and companies who support the Title II decision of the FCC and 
I would like, by unanimous consent, to have this included in 
the record.
    Senator Nelson. Without objection.
    [The letter referred to follows:]

                                                     March 18, 2015
Hon. Tom Wheeler
Hon. Mignon Clyburn
Hon. Jessica Rosenworcel
Federal Communications Commission
Washington, DC.

Dear Chairman Wheeler, Commissioner Clyburn, and Commissioner 
Rosenworcel,

    We, the undersigned organizations and companies, thank you for your 
vote on February 26 to protect Internet communications from 
discrimination by reclassifying broadband access under Title II of the 
Communications Act.
    Over the last year, nearly seven million Americans have contacted 
the Federal Communications Commission on this issue, with the 
overwhelming majority in favor of Title II reclassification. In 
addition, hundreds of advocates, civil rights groups, companies, 
entrepreneurs, and legal experts have spoken out in favor of Net 
Neutrality.
    The FCC followed the letter of the law by voting for 
reclassification, and it heeded the calls of millions of Americans. You 
proved that sound policy that benefits the public interest can carry 
the day in Washington. Your vote will help keep the Internet open for 
years to come, free from slow lanes and gatekeeping, which will enable 
future generations to enjoy the greatest platform for free expression, 
democracy, and innovation the world has ever known. If Congress acts, 
it should consider the FCC's rule the floor, and not the ceiling, when 
it comes to the protections afforded Americans.
    Those that support Net Neutrality and Title II represent a wide 
range of interests and political affiliations. What we have in common 
is an unwavering belief in the power of the Internet and the need to 
keep it open for the benefit of the public. This is not a partisan 
idea. Independents, Republicans and Democrats alike favor Net 
Neutrality by overwhelming margins.
    Thank you for standing with the organizations and individuals 
across this country that defend and benefit from the open Internet.
            Sincerely,

18MillionRising.org                  Kongregate
Access                               LawGives
American Civil Liberties Union       Leaflad
Addy                                 LendUp
Agile Learning Labs                  Linknovate
AirHelp                              Media Democracy Fund
American Library Association         MediaFire
Amicus                               Media Literacy Project
AppRebates                           Media Mobilizing Project
Appar                                Medium
Apptology                            Meetup
Association of Research Libraries    MixRank
Augur                                Motionry
Authentise                           MoveOn.org
Automattic                           Mozart Medical
Badger Maps                          Mozilla
betaworks                            National Hispanic Media Coalition
Bitnami                              New America's Open Technology
                                      Institute
Blu Zone                             Next Big Sound
Boing Boing                          NOTCOT
BuzzFeed                             OfficeNinjas
Center for Democracy & Technology    OpenDNS
The Center for Media Justice         OpenMedia.org
Cheezburger                          Opera Software
Codecademy                           PadMapper
CodeScience                          Pixoto
ColorOfChange                        Poll Everywhere
Common Cause                         Popular Resistance
Consumers Union                      Presente.org
Contextly                            Public Knowledge
CREDO Action                         Publitas.com
Daily Kos                            Rallyware
Demand Progress                      ReadMe.io
Digg                                 Recrout
Duffy, Inc.                          reddit
Distinc.tt                           ReplySend
DuckDuckGo                           Reylabs
Dwolla                               RootsAction.org
DynaOptics                           Savvy System Designs
Earbits                              Shapeways
Electronic Frontier Foundation       SketchDeck
Embedly                              Sonic
Engine                               SpoonRocket
Etsy                                 Statwing
Faithful Internet                    Stripe
Fandor                               SumOfUs
Fight for the Future                 Techstars
Flytenow                             TerrAvion
Floor64                              The Nation
Foundry Group                        TheNextWeb.com
Foursquare                           ThoughtWorks
Free Press                           Tilt
Future of Music Coalition            TouchCast
Gawker Media                         Tumblr
General Assembly                     Twilio
GitHub                               Union Square Ventures
Global Accelerator Network           United Church of Christ, OC Inc.
Grid                                 Upworthy
HayStack TV                          VHX
HelloSign                            Vidcaster
Heyzap                               Vimeo
Hire an Esquire                      Vox Media
Imgur                                Warby Parker
Inside Social                        Women's Institute for Freedom of
                                      the Press
Instapaper                           Women's Media Center
Internet Freedom Business Alliance   Worldly
inXile                               Xola
Kaltura                              Yanomo
Kickstarter                          Yelp
                                     Zentail.com
                                     Zynga
 


    Senator Markey. I thank you, Mr. Chairman.
    So I would like, if you could, just to talk a little bit 
more about Title II and how, in fact, it was rate regulation 
that made it possible for there to be a universal phone system 
across the country and, without it and the subsidies that flew 
within that system, that we could not have had Universal 
Service? But the opposite here is the goal of the FCC in terms 
of your intention to use the 1993 wireless precedent as the 
approach, which you think is wisest. Can you expand upon that 
again, Mr. Wheeler?
    Mr. Wheeler. Thank you, Senator.
    Well, I think there are actually two approaches, two 
historical approaches here. The first is the Internet wouldn't 
have existed if the FCC hadn't required that telephone 
companies controlled who was able to attach equipment to the 
phone network. And it was those old screeching Hayes modems 
that we bought and hooked up to our first-generation home 
computers that allowed the Internet to begin to take place. And 
so, the root of the Internet is in open access.
    And then, the question becomes: Okay, how do you balance 
out the fact that there need to be consumer protections at the 
same point in time that you want to be incentivizing 
competitive construction of ever-faster speed capabilities? And 
it was clear that--and as everybody knows, I had an 
evolutionary process in my own thinking on this. And the 
realization that in 1993, what you had structured in Section 
332 produced the kind of success where there was not great 
regulation, there was not tariffing, there was not all these 
things that used to come with this old structure. And the most 
important thing there, Senator, I think is the realization that 
on the day after this order takes affect, the consumer revenues 
for the ISPs should be exactly the same if not better than the 
day before it took affect because we are not touching those.
    And one of the things that's key here also is that, you 
know, when the President made his announcement and joined the 
64 Members of Congress, including you and many on this 
Committee, who said that we ought to be doing Title II, the 
following day stocks went up. And so, if the concern was that 
there is a negative impact of this kind of light-touch 
regulation that allows rates to be set by the market not by 
government officials, there was a concern that that was going 
to have an impact on capital formation. It certainly has been 
disproved and disproved again after we made our decision and 
the stocks are beating the S&P.
    Senator Markey. And if I may say this, what we've done is 
we've created, you have created a more predictable investment 
environment where we know the 62 percent of all venture capital 
2 years ago went to Internet and software companies knowing 
that they could get in, reach to their customers, there would 
not be discrimination, that there would not be throttling, 
blocking, that they could reach their customers. That's where 
the energy is. That's where the growth is in this sector, and 
you've done a great job in identifying those tens of thousands 
of companies that are out there.
    And similarly, I just want to say here that the Internet 
Tax Freedom Act originally passed, you know, in 1998, it 
prohibits states or local governments from taxing Internet 
access, electronic commerce, it's reauthorized every few years. 
And there's an Internet Tax Freedom Forever Act that Senator 
Thune has introduced that I'm an original cosponsor on. OK.
    So I think, you know, we have to be careful in this area 
and I would just say to you, Commissioner Rosenworcel, that 
you've done a fantastic job, the whole Commission has, in 
focusing on the E-Rate.
    As we pass new trade bills, as we speed up the pace of 
change in our economy, we have to make sure that we speed up 
the pace at which young kids get the skillset they need for the 
new jobs in our country. So if you're talking about TTIP or TPP 
and you want to speed up the pace of change, you have to speed 
up the pace of change for kids. And by raising the E-Rate from 
$2.4 billion to $3.9 billion per year, you're going to close 
that Homework Gap. You're going to make sure the kids in the 
poorest cities and towns, poorest homes, get access to the 
skillsets they're going to need to compete with the smartest 
kids in the world. And I congratulate you for that because it's 
a vision of what America has to be in this global economy.
    I thank you, Mr. Chairman.
    The Chairman [presiding]. Thank you, Senator Markey.
    Senator Gardner.

                STATEMENT OF HON. CORY GARDNER, 
                   U.S. SENATOR FROM COLORADO

    Senator Gardner. Thank you, Mr. Chairman, for holding the 
hearing today.
    Thank you to the Commissioners for joining us today.
    Chairman Wheeler, I know Chairman Thune just covered this a 
little bit so I just want to, again, reiterate what he said. 
Last year, I led almost 90 Members of the House, Members of 
Congress signing a letter asking the FCC to adopt and implement 
a Connect America Fund mechanism for rural rate-of-return 
carriers that would encourage broadband adoption.
    I know Chairman Thune and Senator Klobuchar led a very 
similar letter here. We talked about that earlier, and just 
wanted to again reiterate my support for a tailored updated CAF 
mechanism that would allow these carriers to move forward with 
broadband deployment in areas that truly need it. So thank you 
for your statements today.
    Mr. Wheeler. Could I make a commercial here for a second? 
Just 30 seconds?
    Senator Gardner. Is it going to have the same unity that 
your answer did earlier?
    Mr. Wheeler. Yes, sir.
    Senator Gardner. OK, all right.
    Mr. Wheeler. The answer is: Yes, sir.
    Senator Gardner. Very good.
    Mr. Wheeler. We are going to do that.
    The great thing about the rate-of-return carriers is that 
there are these small, vibrant, heart-of-the-community kind of 
organizations in very small communities. Getting accord amongst 
them as to the best way to help them do their job is worthy of 
Henry Kissinger. And I hope that we can have the help of you 
and Senator Thune and the Committee to help send the message 
that says, ``Hey, folks, it is time to quit bickering over 
details.''
    Let's have a common approach because we are going to move 
and we'll make that decision if we have to make that decision. 
But it sure would be good if we understood that the various 
segments of the industry could pull together and say, ``Hey, 
this is the kind of North Star you ought to be guiding to.''
    Senator Gardner. Well, thank you. And I appreciate that. 
And we're so close to each other, I feel like we ought to be 
having a cup of coffee.
    Mr. Wheeler. We ought to have a beer.
    [Laughter.]
    Senator Gardner. I'll take that.
    Commissioner Clyburn, if there is one thing the FCC's Title 
II proceeding displayed, this is something Senator Heller has 
talked about earlier as well, the need for greater transparency 
for an order with such sweeping regulatory reach, it makes 
little sense the general public did not have access to the text 
of the Order until two weeks after the Commission voted on it. 
So my question to you, Commissioner Clyburn, is this: Should 
the FCC publicly release items put on circulation prior to a 
Commission vote, especially those that significantly impact the 
economy?
    Ms. Clyburn. One of the things that I liked to talk about 
in terms of this process, it is among the most open in the 
world. We had a notice and 4 million comments that allow people 
to weigh-in. One of the things I'm also cautious about when we 
talk of them, I'm open to any type of, you know, ways that we 
can improve the transparency and the like, is there is a 
deliberative process that takes place among us. And I would 
love for that to continue.
    I am able to speak in unbridled fashion. And one of the 
things I am worried about in terms of releasing things, what I 
would say is, prematurely, is that could be compromised. If I 
have a question or a concern or want to get some feedback, I 
would not like for that to necessarily get out before I come to 
terms with the exchanges. There are APA issues, we're a quasi-
judicial body, and I, again, abide by APA, you know, 
requirements. So all of those things, I think, need to be 
fleshed out before we make any type of move and direction.
    Senator Gardner. Thank you, Commissioner Clyburn.
    Commissioner O'Rielly, I know spoke to this.
    Commissioner Pai, would you like to add to this?
    Mr. Pai. I completely agree that, especially with respect 
to meeting on ends that these documents should be revealed at 
least 3 weeks before the Commission vote. But for on this 
particular case, the fact that it wasn't revealed created a big 
haze of confusion both among net neutrality supporters and 
opponents. And what you saw in the days leading up to the Order 
was a substantial portion of the Order was revised with respect 
to the so-called ``Broadband Subscriber Access Service'' in 
response to a particular company and a special interest that 
wanted that removed for a variety of reasons.
    And there is a great deal of press interest. If you Google 
it, so to speak, you will find a lot of people wondering what 
was this change about; how does it affect the Order; how are we 
going to respond to it? But, because of the Sunshine 
Prohibition, none of those people were able to have any input. 
If we had our product on the table on day one when it was 
circulated, the American people could see it and ultimately it 
would have made our work product a lot better. It would have 
helped it more legally sustainable.
    Senator Gardner. And thank you.
    I am running out of time here and I have a couple of 
questions. So perhaps we could work on answers for the record 
talking about petitions, a number of petitions, before the FCC; 
USF clarity petitions for reconsideration, or forbearance 
petitions, other petitions that have been before the FCC, and 
wondering how we can make sure that these petitions are 
addressed in a timely manner. So perhaps you could get back to 
me, members of the Commission, get back to me on how we can--
what internal processes should we change at the FCC to 
facilitate, to have a more timely processing.
    And one last question, Chairman Wheeler. Twenty-five 
million-dollars has transferred out of the Fiscal Year 2016 
budget from the Universal Service Fund to the FCC's general 
budget. I'm concerned that that could affect something that I 
am very, very concerned about and that's rural funding USF 
issues. Chairman Wheeler, what additional not-ongoing agency 
activities will this funding shift pay for?
    Mr. Wheeler. Well, it's a proposed shift. And the attitude 
is this, the idea is this, the money has to be spent. That kind 
of money has been spent traditionally on the activities of the 
wireline bureau, the wireless bureau, and others on USF. We 
fund our auction activity through the revenues from auctions. 
The question is why should Universal Service activities be 
funded by people who were not involved in Universal Service. So 
why should a broadcaster have to pay fees for programs that 
they're not involved in? Why should, you know, some marine 
licensees? Why should, you know, et cetera, et cetera?
    And so, all this was was an attempt say, ``OK, how do we 
make sure that the gazintas and gazoutas are balancing each 
other out?'' Because it has to be paid and, if the decision is 
that the Congress wants to say, ``Hey, yes, you ought to make 
sure that broadcasters pay for this?'' You know, so be it.
    What we were trying to do was to say ``What makes logical 
management sense?''
    Senator Gardner. So let me just clarify. So the $25 million 
isn't dedicated to anything, it's just being put back into the 
general budget.
    Mr. Wheeler. The money gets spent. OK. So the question is: 
Does that money get raised by the general assessment that goes 
against everybody who is involved with the Commission or does 
it get raised through the program that it relates to?
    And, you know, there will be a significant decrease for 
broadcasters, for instance, if they no longer contribute to 
something that they do not participate in.
    The Chairman. Thank you, Senator Gardner.
    Senator Booker.

                STATEMENT OF HON. CORY BOOKER, 
                  U.S. SENATOR FROM NEW JERSEY

    Senator Booker. Thank you, Chairman.
    First of all, I wanted to say thank you to all five who are 
serving our country. Often debates in Congress get personal, 
but every single one of you have done a great service in trying 
to achieve noble aspirations, noble goals. I'm grateful for 
your work. Some of the issues that individuals bring up have 
been really important to me. They won't get headlines.
    Honorable Clyburn, criminal justice reform is critically 
important to me. And what you're doing and through your 
advocacy with your fellow Commissioners and with the Chairman 
is, to me, absolutely essential to end the nightmare of broken 
families and those linkages are so important for us to bring 
justice back to our legal system.
    I just want to jump in and really, Commissioner Wheeler, 
give you a chance to just sort of address some of the things 
that I hear said consistently that I see no evidence for 
whatsoever. And I would just like to give you a chance to talk, 
for the brief time that I have, a little bit about this idea 
that somehow what you did was anti-business, that somehow it 
undermines the ability for companies to thrive in this 
marketplace.
    Some of the other folks talked. I am a passionate believer 
in the importance of us to have a free and open Internet. Net 
neutrality, it is critical for the growth for the American 
economy. And then, more importantly, as I would with kids, 
especially urban kids, and see that those skillset that they 
can learn the democratizing force of Internet access to 
democratize education and information, job opportunities, 
business opportunities, access to capital. All that excites me.
    And so, as a guy who is kind of pro-business, I wonder if 
you can address the issue. Because, when I read that T-Mobile, 
Google, Cablevision, Windstream have acknowledged that using 
Title II with forbearance doesn't change their investment 
plans, executives at Verizon and folks from my state, Comcast, 
Time Warner Cable, Charter, have said the same thing to their 
investors, it's not going to undermine their investors. Wall 
Street and capital markets barely noticed the Title II news. 
And that's because investors understand the Order and that the 
FCC's Title II framework does not regulate rates or impose 
other so-called ``utility regulations.'' So Wall Street didn't 
budge, the heads of companies that I know and talk with on a 
regular basis say that it's not going to affect their behavior.
    So what these rules do, plain and simple, is keep broadband 
providers from discriminating. So will you just address the 
mountain of evidence rebutting the speculation about investment 
harms? And I think that users deserve the right to an open 
Internet, not just rhetoric, and how Title II in a sense, does 
not undermine but still actually, my opinion, could provide an 
environment where there's more investment in this space.
    Mr. Wheeler. Thank you, Senator.
    You know, I think it would be hard to find a bigger 
capitalist sitting at this table than me. I am a capital C 
capitalist and have been involved in starting companies and 
helping build companies for most of my professional life.
    The key, there are multiple keys to this success of risk 
capital enterprises. One is that you have to have access to the 
consumer. The reason that Steve Case was able to build AOL as 
he was is because he had this open network that would scale 
like this. And, you know, he could get six people over here in 
some place in New Jersey and seven people in Boston and a 
couple of people over in Albuquerque and, excuse me I keep--and 
out of that, build a whole. If he had had to go serially to the 
various folks who provide services there and say ``Can I get 
on? Can I get on?'' which we had to do so many times in 
history, it wouldn't have been that kind of a success story. 
And so, open access is key to innovation and growth.
    Second, you need to make sure that those who are providing 
that access are getting the rate-of-return that they deserve 
because that's the only reason they're going to invest the 
capital to build the pipes to begin with. And that has been a 
threshold issue with me from day one of this topic. And, again, 
I come back to the model that the wireless industry has used 
most successfully for their voice services and not having rate 
regulation; not saying this is what consumer prices are going 
to be; not having tariffing; not saying you've got to build 
something and then unbundle it. It is a structure that 
encourages the investment.
    And I think that, third, that that is a reality that has 
been proved out by the market. As you said, Sprint says this 
works for them. T-Mobile says they'll invest. Google Fiber, who 
has never been regulated under Title II says, ``Of course we're 
going to continue to build even though we are now under Title 
II.'' Cablevision comes on and says, ``It's not going to change 
our business practices.''
    The small rural rate-of-return carriers that we have been 
talking about here in this hearing, they file in support of 
Title II with us because like everybody understands that, 
appropriately done, Title II provides certainty and serious 
opportunity for return.
    Senator Booker. And I'm going to stop you there. I've seen 
the Chairman bench press. I don't want to tick him off.
    [Laughter.]
    The Chairman. Thank you, Senator Booker. We'll defer that 
from the record. No. We have Senator Daines up next.

                STATEMENT OF HON. STEVE DAINES, 
                   U.S. SENATOR FROM MONTANA

    Senator Daines. That's quite a statement from Senator 
Booker, too, saying that.
    [Laughter.]
    Senator Daines. I'm not Cory Gardner. I just got moved up 
from the kiddie table here to get the full Thanksgiving dinner 
here. So good to be up here.
    You know, my background was 12 years in technology, Cloud 
computing as part of a startup that we took public. And we were 
part of the free willing, Wild West of the Internet and seeing 
what that does for innovation and value creating here in 
American jobs. I'm one that believes in unconstrained 
innovation, speed-of-light commerce, and I'm just hoping that 
the only constraints that we'll see in this incredible story 
that is going on with the Internet is technology constraints 
but not regulatory constraints.
    And so, it just gives me pause. And I heard, you know, I 
have great respect for my friends across the aisle here and 
some of the proof points they've demonstrated in terms of the 
capital markets didn't move with these announcements, the CEOs 
are saying things are going to be OK in some of these 
companies. I'm more concerned about where this all goes long-
term. There have been a lot of hearings in Washington, when I 
go back in history of the records, where what began as perhaps 
well-intentioned, well intended, and good idea, turned into 
overreach. I have not seen many Federal agencies and 
regulations ever diminished; they tend to only grow.
    And so, I'm looking where this all heads for kids and 
grandkids because I think we've got something very, very 
special here in America, which is this free and open Internet. 
So with that as background, I do want to shift gears and talk 
about the transparency and accountability of the FCC. I'm 
concerned about the Commission's routine practice of granting 
broadband editorial privileges to staff beyond just the 
technical and conforming edits.
    Commissioner O'Rielly, you in your testimony discussed the 
promise that socially leads to broad staff editorial 
privileges, could you describe some specific examples of what 
needs to be addressed to ensure a transparent and open process?
    Mr. O'Rielly. Sure.
    So I've had difficulty in the last meeting. The Chairman 
asked for a right--the bureau asked for a right for editorial 
privileges and I objected. And part of the reason is because I 
had an opportunity to look at our manual and they're actually 
not contained within--there are no fast and rules on what we 
have. They are just practices that we've written down in this 
consumers, you know, Commissioner's guide to what the agenda 
meeting should be. So what I've suggested is, one, we ought to 
codify our practices here rather than just have them as free 
flight floating. But, two, I've had a problem with the practice 
itself because what has been encompassed within editorial 
privilege has not been just technical informing it has also 
been to the text itself and substantial changes.
    In fact, early on in my time the changes were quite, I want 
to be careful in my wording, but they were quite negative to 
one of my colleagues in terms of what was being, you know, what 
the changes were being suggested. It's unnecessary to criticize 
another one of my colleagues when it's something that I had 
voted for. It's unnecessary to do that in the text.
    Senator Daines. So along that line, were there staff 
editorial edits made to the Open Internet order after the 
Commission voted on February 26?
    Mr. O'Rielly. Yes.
    Senator Daines. Were you allowed to discuss those changes 
made to the Order?
    Mr. O'Rielly. Well, I think I can suggest there have been 
changes since the item we voted on and to the item that was 
released. One of them was that they, you know, had to 
effectively had to backtrack on the Chairman's speech regarding 
the, as pull out the specifics here, regarding the peering 
issue. He had argued that it was going to be done separately 
and not part of this item and the interconnection issue was 
going to be separate. And here they actually put a footnote in 
and said, ``No, no, it's actually contained in here.'' They had 
to actually back out his own statement in the correction.
    Mr. Wheeler. Can I, just to be clear on that, Mike. This, 
what you're quoting, was a speech that I made over a year ago 
in which I said, ``you know, I'm not so sure that--'' I have 
been saying throughout this process, you know, as we led up to 
it, that interconnection needed to be on the table. This was 
not an editorial decision that was made in secret. This was a 
policy decision that was put forth to everybody.
    Senator Daines. Let me bring it back here----
    Mr. Wheeler. But, look, can I also say I would like to 
identify myself with Commissioner O'Rielly and the points that 
he made in his blog. I think he made some really valid points 
and I think that we have to deal with this. He and I both 
walked in essentially the same time and at the same time----
    Mr. O'Rielly. Same day.
    Mr. Wheeler [continuing]. And were handed--well, I was a 
couple minutes before.
    Senator Daines. But let me ask you----
    Mr. Wheeler. But----
    Senator Daines. Chairman Wheeler, excuse me, than why did 
you choose not to have the entire Commissioner revote on the 
revised Internet order on March 12, especially if the FCC staff 
made substantive editorial change?
    Mr. Wheeler. So the changes that got made were changes that 
were in response to dissents which we required by law----
    Senator Daines. And I guess, just in the spirit of 
transparency, could you just make that February 26 order is 
available to us?
    Mr. Wheeler. Sure. It's on the website.
    Senator Daines. OK. OK.
    Mr. Wheeler. But let me be----
    Senator Daines. Twenty-sixth, February 26.
    Mr. Wheeler. It's on the website, yes.
    Mr. O'Rielly. On the final one, is he saying on the one we 
voted on the day of?
    Senator Daines. Right, what was finally voted on on 
February twenty-sixth?
    Mr. Wheeler. The final order is on the website. And that's 
the public doc but the issue here that we're----
    Senator Daines. I don't believe it is. We will follow up on 
that but maybe we could get to the bottom of that. And I think 
that it gets to the issue right now of transparency and 
accountability we've got even within the Commissioners here.
    Mr. Wheeler. Mike, the final order is not on the website?
    Mr. Pai. The document as we voted on, on February twenty-
sixth, is not on the website.
    Mr. Wheeler. The final document as required----
    Senator Daines. Right, but my point is that that vote ----
    Mr. Wheeler.--by the process in the law----
    Senator Daines. Well, the question has changed back and 
forth so then prove the transparency around the process.
    Mr. Wheeler. So I'd like then to associate myself with 
Commissioner Clyburn who was absolutely right when she said 
that this is an editorial process. And the going back and 
forth, if we open that process up, there are multiple things 
that are going to happen. Markets aren't going to understand, 
``well, you know, Commissioner Clyburn wants to change glad to 
happy. What's that mean?''
    This is a quasi-judicial role that we exercise. We need to 
be going through and having the ability to, in camera, have our 
own discussions.
    But, 30 seconds more, sir.
    I think there is a misunderstanding that the end of the 
game is the final rule, because what happens is you put it out, 
you publish in the Federal Register and the next thing that 
happens is that people are going to file for reconsideration. 
And what is reconsideration? Reconsideration is the entire 
decision is out there for everybody to see, and then the public 
comes in and comments and says, ``No, we would think you ought 
to reconsider this.'' And we're going to have to vote again.
    Senator Daines. Right. And I'm out of time, but just let me 
summarize by saying, you know, the stakes are awfully high as 
we're looking at something as of stepping into Title II and to 
the Internet. And I would hope that we could work together here 
to improve the accountability and transparency of that process 
so that we, one, can ensure we have trust as well as better 
outcomes. And with that, I'm out of time.
    Thanks, Mr. Chairman.
    The Chairman. Thanks, Senator Daines.
    Senator Schatz.

                STATEMENT OF HON. BRIAN SCHATZ, 
                    U.S. SENATOR FROM HAWAII

    Senator Schatz. Thank you.
    Chairman Wheeler, thank you for enduring today's hearing 
and yesterday's hearing.
    And thank you to all of the Commissioners for you great 
work. We really appreciate it.
    I want to thank the Chairman for the bipartisan process 
that he has undertaken to explore the possibility of 
legislating in this space. I'm not clear that we're going to be 
able to get there because I think that we don't have a meeting 
of the minds even on the kind of basics of a negotiation. Which 
is to say, it's hard to imagine that President Obama or House 
and Senate Democrats would agree to legislation that would 
undermine the basic principles of net neutrality.
    I think there is some openness among some of us to 
enshrining those net neutrality principles in statute, but if 
we're unable to kind of reach the common ground in terms the 
beginning of a negotiation, than I'm not necessarily hopeful. 
But I think it is worth exploring. I think it is worth 
discussing. I'm a little concerned about the litigation risk 
not just on the Title II side but on the forbearance's side.
    So I think it's worth exploring but I also think we ought 
to be direct with each other about what's realistic in terms of 
a legislative strategy or litigation strategy. And I'm not sure 
that at some point we're not going to have to decide which it 
is and what's the most practical course of actions.
    Can you tell me, Mr. Wheeler, how you arrived at the 
forbearances? Did you sort of start with the net neutrality 
principles and then forbear everything else? Or, how did arrive 
at those forbearances?
    Mr. Wheeler. It's a great question. Thanks, Senator.
    We started with back to Section 332 and Senator Markey and 
those 19 that clearly have experience as shown are not 
necessary. And then, we went through and said, what are other 
ones that in this situation are not applicable? And that got us 
a list of 27 from the 19 of the earlier.
    Senator Schatz. So what remains that isn't the sort of four 
principles of net neutrality but also that hasn't been 
forborne?
    Mr. Wheeler. I mean I won't go through the list but the 
highlights, OK, the big ticket items.
    Senator Schatz. Please.
    Mr. Wheeler. Section 201 and 202, which is basically where 
this just and reasonable test resides; Section 208, which is 
the consumer protection aspect; Section 222, which is the 
privacy activities; Section 254, which is universal service. 
And that's probably the first hand of priority issues.
    Senator Schatz. Is it fair to say this is unprecedented in 
terms of the number of things that have been forborne? Has that 
been done before at that sort of scale?
    Mr. Wheeler. Well, they were done--it was done for Section 
332 and has stuck.
    Senator Schatz. That it has stuck.
    Mr. Wheeler. And has stuck.
    Senator Schatz. And has----
    Mr. Wheeler. And has been successful.
    Senator Schatz. And has the Commission, in its history, 
undone a forbearance? I think people are calling it un-
forbearing, but has the Commission--there's this concern that, 
well you may have forborne all of these provisions in the 
statute but that doesn't prevent the future FCC from--I mean, 
is there any evidence that a future FCC would do that in the 
future based on past actions?
    Mr. Wheeler. That's the right question.
    Here's the issue: So Section 10 of the Act instructs us how 
we forbear and that we must forbear if certain things are met. 
If you were to go and reverse that, there would have to be an 
on-the-record notice and comment proceeding that follows 
Section 10 and says here is the record that builds to de-
forbear. So technically you could. Realistically, there is a 
lot we have to go through.
    Senator Schatz. You are actually on my question now, which 
is: How procedurally and legally would you kind of do the 
evaluation? And then, on an operational level: How would you 
forbear? But I guess my question is, in the FCC's history, has 
it undertaken to undo a forbearance and does it do that?
    Mr. Wheeler. Not that I am aware of, sir. And, again, what 
you would have to do--so for instance, let's just 
hypothetically say, 5 years from now somebody wants to come in 
a de-forbear on rate regulation. There's going to be a serious 
test that has to be done to say what is it that has changed, 
and that of course will be an appealable decision itself. And 
it will be an open proceeding. And it will have everybody in 
the country involved in it. And so, I think the ability to de-
forbear is going to be a high bar to hurdle.
    Senator Schatz. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Schatz.
    Senator Cantwell.

               STATEMENT OF HON. MARIA CANTWELL, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Cantwell. Thank you, Mr. Chairman.
    I am reminiscing of the time that we had a major discussion 
about FERC's use of just and reasonable and Enron's 
manipulation of energy markets. And even though just and 
reasonable was in place, the majority of commissioners still 
struggled with a long time about whether manipulative rates 
could ever be just and reasonable.
    So I would suggest that that interpretation of just and 
reasonable is probably going to be left up to the determination 
of whoever is in the majority of the Commission. So hopefully 
people will get some common ground on that and a framework. But 
thank you for your work.
    I'd like to follow up on Senator Fischer's question as it 
related to the auction of spectrum since, you know, people are 
saying, ``Well, we want to get right, but we also want to get 
it done.'' And when we're talking about a delay for a third 
time, I just want to make sure that we have all the tools and 
all the information we need now; resources to get us there 
given that, I think, this is for our rural communities. 
Something that we really need to pair with resources so that we 
could get robust broadband networks out there.
    So I just want to go back over what we think. You know, do 
we have any problems that are undiscovered here that we think 
is going to cause us problem in actually getting this done? In 
the fall of 2015; starting the auction in 2016?
    Mr. Wheeler. It has never been tried.
    Senator Cantwell. It has never been what?
    Mr. Wheeler. It has never been tried.
    That's a huge problem, Senator. You know, we are inventing 
from whole cloth. So, for instance, when I walked in the door I 
said: ``Wait a minute, we got to have a timeout here.'' Because 
I come from a software background, like you, and I've never 
seen code work the first time and we didn't have an appropriate 
testing structure in place and all of this sort of stuff.
    And so, we delayed 6 months while we could put a red team 
in place; while we could do the kinds of things that normally 
get done with software. But having said that, I believe that we 
will be able to begin the auction in the first quarter of 2015. 
I'm sorry, 2016.
    Thank you.
    And we are managing to stick to that goal. We will be 
bringing forth to the Commission later this year in ample time 
for the people who might be bitters, the final package of rules 
that bitters will be using. We are on road trips, which I guess 
I'm not supposed to call road trips, information sessions 
around the country, meeting with broadcasters and sitting down 
helping them understand what the financial considerations that 
they want to keep in mind are. And we are managing this for a 
first quarter of 2016 auction.
    Senator Cantwell. Besides the, you know, uncertainty of 
trying it, are there any other obstacles that you see at this 
point?
    Mr. Wheeler. We have a lawsuit that we have to get through 
here that the NAB and a broadcaster have filed, but I'm 
confident that we'll get on the other side of that and be able 
to move on. We have a situation where, you know, when you start 
talking about spectrum, everybody wants a piece or to keep 
their piece or to not change. We need to deal with that. You 
know, Commissioner Rosenworcel's incredibly valid point about 
unlicensed spectrum; we need to make sure there's unlicensed 
spectrum in here.
    At the same point in time, Congress instructed us to use 
the spectrum that wireless, microphones, and others have been 
using. We've got to find homes for them. I mean, I believe this 
is all doable. I do not underestimate the challenge, but we 
have now been at it for 3 years and I can see light at the end 
of the tunnel. And better than that, we are managing to that 
date.
    Senator Cantwell. OK. I saw inclinations to speak but I 
have half a second. I mean a half a minute left.
    Mr. Pai. Well, Senator, if I could jump in? I think the 
biggest challenge we confront right now is the complexity of 
the auction as it is currently structured.
    Just to give you two examples of that: First, the dynamic 
reserve pricing proposal which is on the table. It's 
exceedingly difficult for members of the Commission, myself, to 
understand exactly how it will work in real-time. And when 
you're dealing with a broadcaster community that is unused to 
dealing with these kinds of auctions at all, it's going to be 
exceptionally difficult. And if we want to incentivize them to 
participate, this proposal essentially would undercut the 
amount of money that the market would determine they are 
eligible to get from the wireless carriers in the auction.
    The second example of complexity is the potential of 
variability in the banned plans. And so, you would have some 
situation in which some spectrum might be occupied by a 
wireless carrier. In an adjacent market, it might occupied by a 
broadcaster. How that interference will work is a very 
complicated issue and we have to get it right. We only have one 
shot. Otherwise, you end up with very difficult situation for 
the carriers and the broadcasters alike.
    Mr. Wheeler. And what Commissioner Pai is talking about are 
those kinds of issues I was referencing that we have to deal 
with this year.
    Senator Cantwell. Thank you, Mr. Chairman. That's why I 
asked the question because I wanted us to expand on it a little 
bit so we can get through those.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Cantwell.
    Senator Johnson.

                STATEMENT OF HON. RON JOHNSON, 
                  U.S. SENATOR FROM WISCONSIN

    Senator Johnson. Thank you, Mr. Chairman.
    Chairman Wheeler?
    Mr. Wheeler. Yes, sir?
    Senator Johnson. The FCC is an independent agency 
commission created by Congress and accountable to Congress. 
Correct?
    Mr. Wheeler. Yes, sir.
    Senator Johnson. I kind of want to walk you through a 
timeline here. I really only just need yes or no answers here 
just to confirm that I've got this right.
    On January 14, 2014, the D.C. Circuit struck down portions 
of the FCC's 2010 Open Internet order. Correct?
    Mr. Wheeler. Yes.
    Senator Johnson. In that decision, the D.C. Circuit 
provided the FCC with the roadmap to follow an order to craft 
net neutrality rules that it would uphold. Correct?
    Mr. Wheeler. They said----
    Senator Johnson. Just----
    Mr. Wheeler. I know but I----
    Senator Johnson. Quickly.
    Mr. Wheeler. Section 706 was a solution if you were not 
going to do Title II. The reason we were throwing out this 
decision, the court said, is because you did not use Title II.
    Senator Johnson. So they gave you a roadmap.
    Then, on February also 2014, you announced your intent to 
file the roadmap the D.C. court laid out. Right?
    Mr. Wheeler. Correct.
    Senator Johnson. In April 2014, you circulated Notice of 
Proposed Rulemaking that tentatively concluded the FCC should 
base its net neutrality rules on its authority under Section 
706. Correct?
    Mr. Wheeler. Yes.
    Senator Johnson. That rulemaking was voted on in May 2014. 
Correct?
    Mr. Wheeler. Yes.
    Senator Johnson. According to reports, you were planning on 
holding a vote on that net neutrality order in December 2014 
based on Section 706 or hybrid approach. Correct?
    You announced your intentions----
    Mr. Wheeler. 706 or a hybrid approach? No.
    Senator Johnson. Right.
    Mr. Wheeler. No.
    Senator Johnson. You did not----
    Mr. Wheeler. No. What we were trying to----
    Senator Johnson.--announce your intention to hold a vote on 
the----
    Mr. Wheeler. Yes. I did say we were trying to do things in 
December and what we were trying to manage to, at that point in 
time, was a Title II Section 706 approach. Not an order.
    Senator Johnson. On November 10, 2014, President Obama 
announced his support for regulating the Internet under Title 
II. Correct?
    Mr. Wheeler. Correct.
    Senator Johnson. Were you aware of that announcement before 
he made it?
    Mr. Wheeler. They came to see me November 6, I believe.
    Senator Johnson. So you were made aware of that a few days 
before that?
    Mr. Wheeler. Yes, sir.
    Senator Johnson. Ultimately, you decided not to hold a vote 
on the net neutrality order in December. Correct?
    Mr. Wheeler. That's correct. We couldn't get it done.
    Senator Johnson. Yesterday, you told the House Oversight 
and Government Affairs Committee you delayed the vote because 
you did not have the time to ``Whip the horses to complete an 
order in time for the December 2014 open meeting.'' Correct?
    Mr. Wheeler. I think I used some metaphor like that.
    Senator Johnson. OK.
    Finally, the FCC voted to reclassify broadband services as 
telecommunications services under Title II on February 26, 
2015. Correct?
    Mr. Wheeler. Yes, sir.
    Senator Johnson. The next day, on February 27, the 
Democratic National Committee, the DNC, sent an e-mail boasting 
that ``The FCC has approved President Obama's plan.''
    Were you aware of that blast?
    Mr. Wheeler. I saw it after it went out. I saw it after it 
went out.
    Senator Johnson. Now, based on the actions of that 
timeline, do you think an objective observer taking a look at 
those actions would really view your actions as Chairman of 
those of an independent Chairman of an independent agency?
    Mr. Wheeler. Yes, sir.
    Senator Johnson. You don't think somebody could come to the 
conclusion that you were just really carrying water for this 
administration?
    Mr. Wheeler. No, sir. I was looking at a Title II in 
Section 706 approach before the President filed his position 
and we came out with a Title II Section 706 approach. The 
President, in his filing, did not suggest we should cover 
interconnection. We covered interconnection. The President did 
not suggest the breadth of the kind of forbearance that we have 
talked about. And the President talked only in terms of doing 
something with Title II. So I think that, actually, what we 
came out with is stronger as well as more deregulatory than 
what the President filed with us in his part.
    Senator Johnson. Commissioner Pai, were you a little 
surprised at the about-face of Chairman Wheeler in respect to 
his order on Internet?
    Mr. Pai. Not sure if I was surprised but I was disappointed 
that the independence of the agency, in my view, had been 
compromised by the imposition of the political considerations 
by the Executive Branch.
    Senator Johnson. Can you describe or are you concerned 
about potential lawsuits under those rules and regulations that 
currently are going to be forborne, whatever that is, under 
this current rulemaking?
    Mr. Pai. Absolutely. I think there are significant legal 
flaws in the Order throughout, and I've detailed them in my 
dissent. With respect to forbearance alone, I think the fact 
that the FCC crafted a novel and completely unprecedented 
competition analysis, which is essentially we don't have to do 
one in order to forbear, was unprecedented. The fact that the 
Order repeatedly uses the phrases ``we forbear for now'' or 
``at this time'' was unprecedented. The fact that the Order 
never gave notice of the specific provisions from which it 
might or might not forbear was unprecedented.
    I think the jettisoning of a lot of the forbearance 
precedence, which at its core dates to Section 10 of the 
Communications Act, was unprecedented. And I think review in 
court will have a great deal of scrutiny to apply to some of 
the decision with respect to forbearance.
    Senator Johnson. There is going to be a great deal of 
uncertainty in terms of investment and in terms of people and 
how they view the Internet over the next few years, isn't 
there, because of this ruling?
    Mr. Pai. Absolutely. And if I could just elaborate on that 
a little bit? I mean, the companies that are responsible for 
the largest capital expenditures in this industry have told us 
that Title II will impede investment. The smallest providers 
have told us the same thing. And if I might quote from a letter 
we got on February 10, Title II regulation will undermine the 
business model that supports our network, raise our costs, and 
hinder our ability to further deploy broadband.''
    And you might ask what corporate titan wrote that 
statement. Was it a Comcast, an AT&T, or Verizon? It was 43 
municipal broadband providers, including the very broadband 
provider that President Obama visited in the weeks leading up 
to our February 26 vote, who told us that Title II is a roadmap 
to a regulated monopoly. That is not something that creates the 
incentives to invest and innovate.
    Similarly, on the mobile side the argument has been made 
repeatedly that this sort of deluded Title II that has existed 
since 1993 is a recipe for success. And I would suggest to you 
that's completely not the case. First of all, the reason we 
refrain from rate regulation and the other Title II regulations 
on mobile was because the FCC explicitly found that there was 
competition in the wireless marketplace and so that these 
regulations weren't necessary but the market forces would 
protect the consumer.
    Here in the net neutrality order, the agency specifically 
says there is not a sufficient competition which is part of the 
reason why Title II is necessary. And similarly, with the 
arguments made, well people are going to invest anyway.
    And, look, the bottom line is these broadband networks 
don't have to exist. I mean, the fact that Google Fiber is 
deploying is unremarkable. What is remarkable is the fact that, 
right now, Google Fiber does not offer voice service. Why? It 
would cost zero. I mean they've already built the fiber.
    The reason they accepted this on the record is because 
there are Title II regulations that apply to voice. And it 
strains credulity to think that on one hand you could apply 
Title II regulations that are even stronger than what the 
President suggested, but on the other hand that revenues aren't 
going to be affected. You can't say on one hand we're 
forbearing now from Universal Service Fund contributions but on 
the other hand tee up, well, in a couple of weeks or months 
that we're going to increase broadband taxes to fund some of 
these promises under the Universal Service Fund.
    You have to pay the piper when it comes to Title II. And 
the proof is going to be in the pudding in the months to come, 
not in the ephemeral stock variations.
    Mr. Wheeler. So, Senator, can I----
    Senator Johnson. My time is up. I always say if it's not 
broke don't fix it. And I would say there are a lot of people 
having buyer's remorse on this rulemaking.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Johnson.
    Senator Moran.

                STATEMENT OF HON. JERRY MORAN, 
                    U.S. SENATOR FROM KANSAS

    Senator Moran. Mr. Chairman, thank you very much.
    Commissioners and Mr. Chairman, thank you for your presence 
today. I look forward to this conversation. I have appreciated 
what I have heard so far. I look forward to seeing, at least 
some of you, in the appropriations process.
    Mr. Wheeler. We'll see you again.
    Senator Moran. I will see you again. All of the 
Commissioners----
    Mr. Wheeler. I think Commissioner Pai and me just like last 
time.
    Senator Moran. All right.
    Well, I have had on one-on-one meetings with each of you, 
other than Commissioner O'Rielly, and I would welcome that at 
some point in time when it fits your schedule, Commissioner. 
And I actually have enjoyed the conversations that we've had 
and I appreciate the respectful manner in which those have 
occurred.
    Let me ask about, as you would expect, my focus will be 
upon rural providers and consequences to rural America. First, 
on net neutrality and then I will shift to the E-Rate issue. On 
net neutrality, one of the providers has shared with me that 
the regulatory burden they currently exist, they have a 
calendar of things they do to comply with the regulations. 
Three pages in front of me, the amount of time they indicated 
that it would take--first of all, I should tell you this is a 
less than 20 employee business, covered less than 1,000 square 
miles of service territory, has less than 2,000 customers. And 
their calendar indicates that it would include 62 different 
Federal filing mandates that would require 1,490 man-hours, 
person hours. And I am worried that net neutrality, the Order 
that the Commission has entered, will only increase that burden 
and in the same way I think that mandating health insurance is 
only valuable if you can find a doctor. Mandating network 
management rules does nothing to protect the person who has 
access to broadband.
    And many of our conversations, Commissioners, one-on-one, 
have been about access to folks who live in rural places in the 
country. And so, I'm going to ask Commissioner Pai this 
question.
    Mr. Chairman, I'm reluctant to ask you because I would lose 
all my time in your answer.
    [Laughter.]
    Senator Moran. And so, Commissioner Pai, how does the net 
neutrality rules impact rural providers? Did the Commission 
collect data that would provide the Commission evidence input 
before making the decision related to net neutrality as to the 
cost of compliance and ultimately who pays the price of those 
regulations?
    Mr. Pai. Fantastic questions all, Senator, and thank you 
for your concern.
    I think that Title II is going to have a devastating impact 
on rural broadband customers. And the simple reason is that 
it's a challenging enough business case as it stands to build 
broadband networks in rural America given the sparse 
population, the great distances, et cetera. When you layer on 
top of that Title II regulations, you are going to make it 
exceptionally more difficult for broadband companies to take 
the risks to deploy the capital to make that infrastructure 
work.
    I use the example from my hometown, which you know well, 
Wave Wireless, which supplies broadband Internet service to my 
own parents. As it is, it's tough for them to get reasonable 
alternative when it comes to broadband. Wave has said it's 
going to be challenging for them. They are going to have people 
to comply with these regulations. It's not going to be easy for 
them to deploy more infrastructure in the field.
    And the FCC, unfortunately, neglected the only credible 
evidence when it comes to rural broadband deployment, which was 
the statements of the many, many companies that wrote to us and 
said Title II is a bad solution for these small rural broadband 
providers and the competitive alternatives.
    For example, we got a letter from 24 of the country's 
smallest ISPs. All of which serve less than 1,000 customers. 
One of them serve four customers in Cannon Falls, Minnesota. 
And they told us that Title II will badly strain our limited 
resources because they have in-house attorneys and no budget 
line items for outside council.
    Repeatedly, we have heard from some of these smaller 
providers that Title II will reduce their ability to compete. 
One of the great ironies to me of Title II in this entire 
debate has been the key thing that people say, I think, where 
they mean when they say net neutrality is that we want more 
competition. We want more broadband providers offering better 
choices at better prices at faster speeds. Title II takes us 
exactly in the opposite direction because it's going to be, by 
definition, heavy-handed regulations disproportionally affects 
smaller competitors. We see this all these other regulated 
industries.
    Senator Moran. Commissioner, so I don't get accused of 
being biased, I want to make sure that you don't take all my 
time either.
    [Laughter.]
    Mr. Pai. Senator, I thought we had an understanding here.
    Mr. Wheeler. I want to set a record for a 30 second 
response.
    The record and the information that we gathered in the 
record does not ignore the question you asked, as has been 
suggested. The NTCA, the association that represents all of 
these small, 20 employee kinds of companies filed, again, 
obviously representing a consensus in their industry, saying 
they supported Title II in this open Internet order.
    Mr. Pai. This is absolutely critical. What they supported 
with respect to Title II is a last mile connectivity they 
already offer as a Title II transmission service. They did not 
support the broad assertion of Title II jurisdiction over 
interconnection of the entire----
    Mr. Wheeler. No, I think you're----
    Senator Moran. Next time I'm going to ask Commissioner 
O'Rielly.
    [Laughter.]
    Senator Moran. And perhaps either Commissioner Rosenworcel 
or Commissioner Clyburn can respond.
    Thank you very much for that answer. My time is up. We 
always say that before we ask the next question. And what I 
would say is that we have a great appeal that's been on file 
for 4 years. We have asked you to respond. It has not been 
responded to and I would ask your commitment that you would get 
the details from us and----
    Mr. Wheeler. I'm sorry. What is it--yes. There's an appeal?
    Senator Moran. Kan-ed, yes. An appeal, for four years, for 
rates that were established that--they filed, I'm sorry. They 
filed in 2011 and it is a case dealing back to the funding of 
2005.
    Mr. Wheeler. Great. Yes, sir.
    Senator Moran. So we'll follow up and give you all the 
details.
    Mr. Wheeler. You'll have an answer fast.
    Senator Moran. And Mr. Chairman, thank you very much. I'll 
submit the rest of my questions for the record.
    The Chairman. Thank you, Senator Moran.
    Senator Cruz.

                  STATEMENT OF HON. TED CRUZ, 
                    U.S. SENATOR FROM TEXAS

    Senator Cruz. Thank you, Mr. Chairman.
    Commissioners, thank you for being here.
    The Internet has proven to be an incredible haven for 
innovation and for opportunity. And I believe the Commission's 
Order poses a profound threat to continued innovation on the 
Internet and, in time, will hurt small content providers and 
favor large corporations with influence in Washington.
    I also believe the Order is contrary to law. I'd like to 
ask you, Mr. Chairman, initially just a simple question. In the 
Order, am I correct that what the Commission has done is now to 
treat broadband providers as common carriers?
    Mr. Wheeler. Yes, sir.
    Senator Cruz. How then, Mr. Chairman, does the Commission 
justify that given that last year, when the D.C. Circuit struck 
down the Commission's previous failed attempt at regulating the 
Internet, the D.C. Circuit said, on page 45 of the opinion, 
``We think it obvious that the Commission would violate the 
Communications Act were it to regulate broadband providers as 
common carriers.''
    Mr. Wheeler. Sir, I would be happy to get a specific legal 
response for you on that. I think that what the court was 
saying was that the Commission was imposing common carrier-like 
regulation without stepping up and saying you are a common 
carrier. And that's what essentially that statement says, I 
believe. They were saying you are violating the Communications 
Act if you are doing these common carriage-like requirements 
without making a finding that in fact they are common carriers.
    And that was the gut of that.
    Senator Cruz. Well, let me ask, the specific Order that was 
put out, was it subject to ordinary notice and comment? And 
specifically, was the public able to look at the details and 
comment on it before it was adopted?
    Mr. Wheeler. There was a full notice and comment proceeding 
and longer than average----
    Senator Cruz. Mr. Chairman, let me ask that question again. 
Was the public able to read the specific details and comment on 
the specific details of this order before it was adopted?
    Mr. Wheeler. The Order was put out in keeping with the 
total process, the precedence of the----
    Senator Cruz. Mr. Chairman, you are avoiding saying the 
word no.
    Mr. Wheeler. Because with due respect, sir, the O'Rielly 
rule, never disagree with the Senator.
    Senator Cruz. My question is simply: Was the public able to 
read the Order and comment on it before it was entered? The 
answer is no, correct?
    Mr. Wheeler. That is not the way the process works in the 
FCC.
    Senator Cruz. I didn't ask you----
    Mr. Wheeler. I believe that's an answer.
    Senator Cruz. Mr. Chairman, I did not ask the way the 
process worked. I asked: Was the public able to read and 
comment on it before it was entered? There's either a yes or 
no. Either, yes, you could go and read it before it came into 
effect, or, no, you could not.
    Mr. Wheeler. The public never reads orders, sir. So the 
answer to that is----
    Senator Cruz. The answer is no.
    I would note that just a few weeks ago President Obama's 
executive amnesty was enjoined by a Federal court for a 
violation of notice and comment. And I think the Commission's 
action represents an abuse of its authority.
    Let's shift, though, to the effect of this Order. Treating 
broadband providers as common carriers, putting them under 
Title II, treating them as public utilities subjects them to 
Section 201. Section 201 gives the Commission the authority. 
According to Section 201, all charges and practices shall be 
just and reasonable. Is that correct?
    Mr. Wheeler. Correct.
    Senator Cruz. I want to understand the effect of the 
Commission's order. It is the Commission's position is that it 
has full legal authority from this day forward to regulate 
every charge and every practice of every broadband provider to 
determine whether they are just and whether they are 
reasonable.
    Mr. Wheeler. We have said, sir, that we believe this should 
operate the same way that Section 332 has and that has not been 
the result.
    Senator Cruz. But, Mr. Chairman, you seem to be 
misunderstanding my question. I understand that you're 
currently telling us you're going to forbear from using this 
authority. My question is to understand what legal authority 
the Commission is claiming.
    Mr. Wheeler. 201 is the legal authority. We are using 201 
and 202 in this order.
    Senator Cruz. So I am correct that it is the Commission's 
position that it has the legal authority to regulate every 
single charge and every single practice of every broadband 
provider and to determine in the Commission's own judgment 
whether those charges and those practices are just and 
reasonable?
    Mr. Wheeler. There has been removed from the item the 
procedures that the Commission would use to do that; as in 
tariffing, as in retail rate regulation----
    Senator Cruz. But all of that is a matter of forbearance.
    Mr. Wheeler. Those tools----
    Senator Cruz. You're not arguing that you lack the legal 
authority. You're saying right now you're refraining from doing 
that. Correct?
    Mr. Wheeler. No, sir. I'm arguing that the tools to make 
that happen, tariffing ability, rate regulation ability, have 
specifically been removed and that we expect the 201 will 
function as it has for the last 22 years in wireless.
    Senator Cruz. Well, Mr. Chairman, would you support 
legislation from this Committee codifying the forbearance 
you're suggesting, explicitly prohibiting the Commission from 
regulating the rates or practices of broadband providers? Since 
you claim right now that we should trust the Commission you'll 
never do that, would you support legislation making that 
explicit?
    Mr. Wheeler. So I would need to be real careful on that. I 
would be very happy to provide input to the Committee. I want 
to be careful about saying I'm endorsing legislation or arguing 
against legislation or whatever. I think the point you raise, 
however, is that in any open Internet rule or legislation there 
should not be consumer rate regulation.
    Senator Cruz. Let me ask one final question. My time is 
expiring. But, Commissioner Pai, would you share with this 
Committee what the impact is likely to be of this Order on 
consumers; the taxes and the impact on innovation and 
opportunity online?
    Mr. Pai. It's a terrific question, Senator Cruz. Thank you 
for it. The impact is going to be substantial.
    First and foremost, consumers' broadband bills will go up. 
The door is open to billions of dollars in new taxes through 
the Universal Service Fund contribution. An independent study 
has suggested it's going to be $11 billion each and every year. 
That assumes that the FCC doesn't increase the amount it has 
promised to spend on some of these Universal Service Fund 
programs.
    Additional, these fees are going to go up as a result of 
the increase in state and local taxes that broadband providers 
are going to have to pay as a result of reclassification. 
Telecom providers traditionally pay a higher rate than non-
telecom providers. The fees are going to go up, additionally, 
because poll attachment rates are going to go up. Right now, a 
lot of the broadband providers pay at lower 224(d) rate. That 
rate is going to go up to the 224(e) rate. That cost has to be 
borne by someone. It's going to be borne by the consumer, and 
that's just the bills.
    In terms of the actual service, the reduction competition 
that Title II is going to work across this country, but 
especially in rural America, is going to be substantial. You've 
heard our exchanges about how some of these smaller ISPs, in 
particular, are going to have to either, you know, suck up the 
cost or go out of business altogether.
    Additionally, some of the larger providers are going to 
have to include a line item whenever they're thinking about 
deploying infrastructure. Will the Commission employ Section 
201 authority to second-guess infrastructure we're putting in 
place for interconnection? The three routes that traffic has to 
go over could be second-guessed by the Commission. All of these 
things now go through the FCC as gatekeeper.
    Third, consumers are going to suffer as a result of the 
second-guessing the FCC is going to do through the Internet 
conduct standard. As the Chairman pointed out, we don't really 
know where this is going to go, that the FCC is going to sit 
there as a referee to throw the flag.
    But the problem is nobody even knows what the game is, what 
the rules are. And I think when the FCC explicitly tees up pro-
consumer things like T-Mobile's music freedom, which allows, 
you know, the free streaming of music videos or music content 
to your Smartphone outside of data caps, and says that may be 
an Internet violation. Then, ironically enough, it's going to 
be some of the competitive wireless upstarts who want to 
challenge the big boys who are going to have to say, ``Whoa, 
before we offer this, let's make sure we clear this with the 
FCC. Let's make sure we get an advisory opinion from the FCC as 
the enforcement bureau.'' Not the full Commission, the 
enforcement bureau to make sure this is kosher.
    So essentially, as a result of all of this, instead of the 
Internet working to the benefit of consumers in being developed 
by technologists, engineers, and innovators, it's going to be 
lawyers, bureaucrats, and politicians who decide what kind of 
digital opportunity we're going to have in the twenty-first 
century.
    Senator Cruz. Thank you.
    Mr. Pai. But other than that, it's OK.
    Senator Cruz. Thank you very much.
    [Laughter.]
    Senator Cruz. Powerfully said.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Cruz.
    Senator Peters is back so I have Senator Peters, Senator 
Sullivan, Senator Rubio.

                STATEMENT OF HON. GARY PETERS, 
                   U.S. SENATOR FROM MICHIGAN

    Senator Peters. Thank you, Mr. Chairman.
    And thank you to each of the Commissioners. This has been a 
very long afternoon for you. And there are a few more questions 
for you, but I appreciate your service, your public service, 
and your commitment to these issues that are complicated and, 
as we are seeing, can be contentious from time-to-time. So 
thank you for your service.
    This is going to go primarily to Commissioner Rosenworcel 
because of your work in this area. Then I'll ask the Chairman, 
as well, to comment on this. But there is, without question, 
tremendous demand for Wi-Fi and devices using unlicensed 
spectrum right now. And as a result, the upper 5 gigahertz band 
is being targeted for potential sharing, as you're very well 
aware, particularly the 75 megahertz and the 5.9 gigahertz band 
reserved for the use of Intelligent Transportation System, the 
ITS, including V2V and V2I, which utilize the Dedicated Short-
Range Communications service systems.
    Those supportive of sharing this band point to the many 
years of spectrum has been reserved without actually being 
used. But I think this ignores the millions of dollars that 
have been invested and thousands of hours spent focused on the 
technology's development to this point.
    The reality is that these connected vehicles are being 
deployed today in pilot programs on the streets of Ann Arbor, 
Michigan, for example, and the National Highway Traffic Safety 
Administration has taken action that will likely lead to a 
rulemaking of this to require nationwide deployment of vehicles 
using the V2V during the next few years. And the agency has 
said that V2V and V2I has the potential, and I think this is 
incredible, the potential to mitigate or eliminate 80 percent 
of all accidents that occur right now with the non-impaired 
drivers.
    If we continue to focus on advanced Intelligent 
Transportation Systems of vehicles and in a smarter 
infrastructure, we can spur innovation, we're going to build to 
create jobs, we're going to be able to discover new business 
models and opportunities that haven't been previously possible, 
and we can save thousands of lives in the process. So I would 
contend that we should not do anything here in Congress, or at 
the FCC for that matter, that would derail this incredible 
comment.
    So Commissioner Rosenworcel, I'd like kind of your thoughts 
on this. And hopefully, today, you might be willing to commit 
not to move forward on opening the 5.9 gigahertz band to Wi-Fi 
until it has been proven that it can be done without any 
harmful interference to these lifesaving technologies with our 
vehicles.
    Ms. Rosenworcel. OK. Thank you, Senator Peters, for the 
question.
    As you undoubtedly know, the demand for our airwaves has 
grown exponentially over the last decade. And certainly that's 
true since 1999, when the spectrum was set aside for the kind 
of Intelligent Transportation Systems you're describing. And I 
know that the development has been slow but I also know a lot 
of resources have been poured into that effort.
    Since 1999, when that spectrum was set aside, something 
else has happened. We've grown much, much better at managing 
interference and allowing for the sharing of services in all 
sorts of radio spectrum. So it's my hope that we can explore 
how this could be a shared spectrum for both unlicensed and ITS 
services, but I take your point that we absolutely cannot 
sacrifice safety in the process.
    Senator Peters. Well, I appreciate that and your concern to 
make sure that that's going to be at the top of your list.
    Chairman Wheeler, if you'd care to comment as well, 
certainly your thoughts on it.
    Mr. Wheeler. I think Commissioner Rosenworcel is spot on 
and the future is all about how can you share. And the 
encouraging thing here is that Intelligent Transportation 
Systems and Wi-Fi are not that dissimilar. And so, I think that 
there's a way that, you know, technology can work--I mean, if 
you're essentially--sending fits the same kind of way, there 
ought to be a way that you can figure it and that's what we're 
encouraging.
    Senator Peters. Great. Well, I appreciate that.
    Mr. Chairman, I'm going to yield back.
    The Chairman. Thank you, Senator Peters.
    Senator Rubio.

                STATEMENT OF HON. MARCO RUBIO, 
                   U.S. SENATOR FROM FLORIDA

    Senator Rubio. Thank you.
    And I thank you, Senator Sullivan, for yielding your place 
so that I can make it to my next appointment.
    Commissioner O'Rielly, I wanted to begin with you that the 
use of wireless broadband Internet connected devices has 
provided all sorts of economic growth and innovation. It was 
previously, quite frankly, unimaginable. And wireless traffic, 
as we all know, is projected to grow exponentially in the years 
ahead. And because of this, as you may be aware, I introduced 
legislation to free up additional spectrum for commercial use 
both licensed and unlicensed.
    And I strongly believe that we should be enacting policies 
that ensure that the United States continues to lead the world 
in wireless innovation and technology. And unfortunately, it's 
my personal opinion and I think that of others that the FCC net 
neutrality order is quite frankly the opposite of what we 
should be doing. I would be interested to hear you talk a 
little bit about the impact the Order is going to have on 
wireless and on wireless consumers who are interested in this 
topic and may not understand its true impacts on them.
    Mr. O'Rielly. Absolutely. Thank you for your leadership on 
wireless issues. I would say that I think the Commission has 
flipped and is backward on how it approaches wireless issues 
for purposes of judging whether wireless should be treated, you 
know, as actually offering broadband services; we say no. But 
for purposes of applying Title II, we say yes. I think it's 
completely backwards.
    Title II application to wireless services, I think; one, is 
a violation of the statute and I think that is one where we are 
most exposed in a court proceeding. And I think that the 
statute fairly clear on that. People have pointed out that 
332(c) gets to the question of wireless voice, but wireless 
data has never been treated as a common carrier service and 
shouldn't be, in my opinion. It's something that we should 
celebrate rather than trying to regulate.
    So I think it's something that you've been a leader on and 
I think it's something we should move forward on. And I just 
think the Commission has it completely backward in what we're 
trying to do here.
    Senator Rubio. Well, and as you know, I've introduced the 
Wi-Fi Innovation Act with Senator Booker and I did so because 
of the growth and potential of Wi-Fi and the need for more 
unlicensed spectrum from Wi-Fi applications. So I'm pleased the 
Commission has made additional unlicensed spectrum available on 
the lower five band, but I'm also hopeful we can make progress 
in the upper band and that's where our bill is focused.
    So my question is: What is the process and timing for 
bringing that additional bands into use? And I'm concerned that 
these bands have become mired in all sorts of arguments and 
stall tactics. So what's your plan to break that logjam and can 
the FCC use its leadership push the process ahead?
    Mr. O'Rielly. Well thank you for your leadership on your 
legislation. I don't mean to comment since Senator Peters is no 
longer here, but I can't make the commitment that he asked for 
which was that we not move forward on 5 gigahertz. I think it's 
something that we can move forward.
    I've worked with my colleagues on this issue. I think it's 
something we can do in a short order while still protecting the 
DSRCs. So we can do both in this band. It's something that's 
necessary, and I think the Chairman articulated this just a 
couple moments ago, that they aren't too far apart. And it's 
something we can do. It has been bogged down in some technical 
reasons for some interests who aren't interested in sharing 
their band and I think that's problematic.
    Senator Rubio. And Commissioner Pai, I wanted to ask you, 
the Internet has, as you know, become an incredible incubator 
for jobs, growth, freedom under the stewardship of this 
country, of the United States. In a speech last year, at the 
Free State Foundation Policy Seminar you said and I wanted to 
quote accurately, ``Public utility regulation would embolden 
those foreign governments around the world that want to impose 
greater international regulation upon the Internet.''
    So, like you, not only am I concerned about the negative 
impact on investment and innovation here at home by subjecting 
broadband to these Title II regulations but I'm also very 
concerned about the message this sends to other governments 
around the globe who do seek, quite frankly, blatant greater 
control over Internet governance. We see that in China and 
Russia and other parts of the world.
    In your opinion, what are the international implications, 
potential international implications of the FCC applying Title 
II to the Internet?
    Mr. Pai. Senator, thank you for the question.
    I think the international implications are worrying and 
that concern was best expressed by the State Department's own 
Ambassador in 2009 when he said: ``That this net neutrality 
proceeding will be viewed by foreign countries as an excuse to 
regulate content and infrastructure in a way that might not be 
consistent with our own policies.'' And I think, while the 
technical issues might be, of course, dissimilar, nonetheless 
the overall message that is sent by adopting Title II 
regulation to solve a problem that simply doesn't exist is that 
the FCC, or writ large the U.S. Government, wants to 
micromanage how the Internet works. And I think it becomes 
difficult for us to maintain on the international stage, as 
Ambassador Verveer pointed out 6 years ago, that on one hand we 
want a free and open Internet when these same repressive 
foreign regimes can say, ``Well, look, you yourself said that 
the Internet is broken, that competition is insufficient, and 
that the FCC now is going to stand as the gatekeeper.''
    Senator Rubio. So we're sending a mixed message. On the one 
hand we're arguing that government has no role to play and on 
the other hand our own government has said there is a problem 
we need to solve and therefore it has injected itself.
    Mr. Wheeler. Senator?
    Mr. Pai. I agree.
    Senator Rubio. Yes?
    Mr. Wheeler. With due respect, I disagree. And I have met 
with foreign regulators on this topic. And my message to them 
is: This is no more regulating the Internet than the First 
Amendment regulates free speech. This is saying that the 
Internet is open, that everybody has the right to express 
themselves.
    I met 2 weeks ago with all of the European regulators and 
they understand this is what it is. I met last week with the 
head of the International Telecommunications Union, which is 
kind of the international body that comes up with this. This is 
not, you need to understand, this is not the regulation of the 
Internet. This is making sure that the Internet is open.
    The regulation of the Internet is the regulation of 
numbers, names, routers, this kind of activity; and tariffing 
and rates. ``That is not what this country stands for,'' I 
said.
    When Putin tries to shut down Pussy Riot on Facebook; when 
China tries to shut down access to Google; when Turkey tries to 
shut down access to Twitter; those are absolute violations of 
what we're talking about here. Because no party, whether 
government or private sector, should act as a gatekeeper to who 
gets on the Internet. That's what this rule does.
    Senator Rubio. But as you just said at the outset of your 
statement, you're saying this is no more regulation than the 
First Amendment. The problem is Putin doesn't have a First 
Amendment and neither does China.
    Mr. Wheeler. No, but----
    Senator Rubio. I understand you're meeting and talking to 
Europeans, but the ones we're really concerned about is China 
and Russia and others who already control the Internet because 
they are not constrained by a First Amendment. And, in fact, 
don't even understand the concept, in particular, in China of 
this notion of free speech. And so, when you make the argument 
to them that the, for example, as you've made now that we're 
not regulating content, for them it's literally a foreign 
concept.
    They don't have a First Amendment nor do they have any sort 
of societal and/or governmental commitment to the notion of 
free speech. What they see is a governmental agency of the 
United States involved in setting terms for how the Internet 
can be provided maybe even if it's content neutral. And I think 
it gives them an excuse to say, ``If your government can do it, 
our government can do it, too.'' I'm sorry. I wanted----
    Mr. Wheeler. With respect, I don't think it sets the rules. 
And another thing is, when I met with Secretary General Zhao, 
who is Chinese OK, and said, ``You need to understand that's 
what this is. And in your home country, when you are blocking, 
that would be a violation of our open Internet rules because 
that's what this is about. Not the operation of the network but 
making sure that the--''
    Senator Rubio. And I'm confident that he probably informed 
you that in his country they set rules, in your country you can 
set your own rules. He'll remind you of their sovereignty and 
the notion that their view of what's free speech and what 
should be allowed is very different than----
    Mr. Wheeler. The position of our country hasn't changed.
    Mr. Pai. Senator, if I could just add one critical point. 
Even at a level less profound than matters of free speech and 
nonetheless is the case, that what we have done is sends the 
message.
    Let me give you one quick example. Under our Internet 
Conduct Standard, the FCC explicitly tees up practices such as 
sponsored data as potentially being net neutrality violations. 
If we were to find that a sponsored data practice, which 
essentially gives consumers something for free, would violate 
net neutrality. Now we see foreign countries engaging that same 
practice. The same people who pushed us to adopt this net 
neutrality order have called sponsored data every human rights 
violation.
    Now we see foreign countries starting to do the same thing: 
banning sponsored data and other pro-consumer type innovations 
that allow some of the smaller competitors to distinguish 
themselves. So we can't act as if what the FCC does is within a 
vacuum when it's bad. But the message that it sends when it's 
good is somehow going to be transmitted through the globe. You 
can't have it both ways.
    The Chairman. Thank you, Senator Rubio.
    Senator Ayotte.

                STATEMENT OF HON. KELLY AYOTTE, 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Ayotte. Thank you, Chairman and Ranking Member. I 
appreciate it.
    Commissioner Pai, shortly after the latest spectrum auction 
you and I penned an op-ed in The Wall Street Journal on the 
Designated Entity program and the flaws in the program. I think 
we used and showed a very egregious example in the most recent 
auction that companies with billions of dollars in revenue were 
able to get taxpayer credits to purchase discounted spectrum. 
Since our op-ed, it has been interesting to see that a wide 
variety of groups have come out to say this issue needs to be 
addressed by the FCC including groups ranging from the NAACP to 
Americans for Tax Reform.
    Can you update us on this program? I hope that the 
Commission as a whole will take a very thorough review of what 
happened because it can't have been what we intended with the 
so-called ``Designated Entity'' program. This isn't benefiting 
truly small or disadvantaged businesses.
    Mr. Pai. Thank you, Senator, for the question and for your 
leadership on this issue.
    Since you and I had a chance to collaborate, we have seen, 
as you pointed out, a broad raising of concern across the 
country and across the political spectrum about this issue. 
Senator McCaskill expressed her concerns previously; 
Representative Pallone on the House side has as well; and aside 
from the NAACP and Americans for Tax Reform, groups as varied 
as the NAACP and Citizens Against Government Waste have pointed 
out that this was not the way it was supposed to work.
    Unfortunately, I wish I had a better story to tell with 
respect to the facts. But since you and I worked together, it's 
come to my attention that not only were there people who didn't 
participate in the auction at all, like the gentleman we cited 
in our op-ed, there are specific companies from Nebraska to 
Vermont who put in bids but were out-bid either by one or even 
by both of the Designated Entities, essentially run by Dish, 
who ultimately were either denied a license and didn't get 
anything out of the AWS re-auction or who had to have been much 
more than they wanted to.
    And I think part of the problem is that these are 
facilities-based carriers. These are actual companies providing 
actual service to actual customers in a lot of these places. 
And instead, they had to give way to some of this arbitrage 
that we saw in the auction. And so, that's why currently the 
FCC is undergoing its standard review of how the AWS re-auction 
at some point petitions to deny may be filed by competitors or 
others who are concerned about it. And I welcome the Chairman's 
response of Representative Pallone who said that, ``we want to 
make sure that the integrity of the program remains intact, 
that no one was unjustly enriched.'' It is important for us to 
have a further notice of proposed rulemaking where we make sure 
once and for all that these loopholes are closed and a 
corporate welfare ends.
    Mr. Wheeler. Can I pick up on that, Senator, because we 
could make news?
    Senator Ayotte. Yes, I would like to.
    Mr. Wheeler. Commissioner Pai and I are going to agree.
    [Laughter.]
    Mr. Wheeler. OK? There are people back here who are falling 
off their chairs at this moment.
    Senator Ayotte. I'm glad we can agree on this.
    Mr. Wheeler. Ditto.
    I am against slick lawyers coming in and taking advantage 
of a program that was designed for a specific audience and a 
specific purpose. I'm as opposed to that as I was when 
Commissioner Pai and I disagreed last year on the way the slick 
lawyers were trying to take advantage of our rules on 
broadcasting. We are going to fix this. These are rules that 
have been in place since the Bush Administration.
    As the Commissioner said, we've got a rulemaking underway 
on this. We are going to issue a new public notice on this to 
make sure that this specific issue is teed up and we are going 
to make sure that Designated Entities have the opportunity to 
participate and not to have Designated Entities as beards for 
people who shouldn't.
    Ms. Clyburn. And Senator, I want you to know that I've been 
pushing for change in this since 2010. It has been a constant 
refrain for me to ensure more opportunities in the space. As 
you know, as was said, we are reviewing those applications. 
Nothing final has been said. People have an opportunity to 
weigh in.
    Senator Ayotte. Great. Thank you.
    Important issue, but I can't leave without addressing the 
Commission's recent order. I think it's only in Washington that 
something as innovative and has driven so much growth and new 
ideas as the Internet, where we would end up with an order that 
essentially applies 1930s-style utility regulation and think 
that that may be the best way going forward to ensure that 
there's future innovation. I want to share the concerns of many 
of my colleagues that have been raised about the Commission's 
order.
    And Commissioner O'Rielly, I want to ask you briefly about 
Europe, because Europe isn't exactly known for its laissez-
faire, hands-off regulatory approach. But as I understand the 
proposals the Europeans are discussing appear to be much less 
stifling than the FCC's recent rules. Normally we're not 
looking to them as the model of where we want to be in terms of 
regulations. But can you help me understand as what I see some 
recent examples of where, in fact, we could be disadvantaged to 
some of our foreign competitors?
    Mr. O'Rielly. Yes, Senator. I appreciate that.
    I just came back from Barcelona, as a number of my 
colleagues did. And I had an opportunity to talk to a number of 
people there, as my colleagues did. And Europeans particularly 
notice the decisions that--unlike the Chairman's conversations, 
my conversations suggest they are very aware of what we did and 
are willing to exploit it and take advantage of that and say, 
``If you're going to regulate the network, we're going to go in 
the opposite direction and we're willing to be less 
regulatory'' and trying to drive traffic to their way, drive 
companies their way. And then, let the United States suffer in 
the process, which I think is completely backwards.
    Mr. Wheeler. Senator, I met with the European regulators 
and told them what we had done and what we hadn't done. And I 
came away with exactly a 180 degrees different. And then I 
talked to the CEOs of the major international wireless carriers 
one of whom then was quoted in the press as saying, ``Yes, you 
know, I think that this approach that America is taking is 
responsible and applicable.''
    And, you know, what the key thing for all of them was was 
what we did in terms of so-called ``specialized'' services, 
managed services, non-public Internet services, and how we 
specifically said that isn't going to be covered because the 
growth in the Internet business--Verizon just had a, their CFO 
just had a statement about this at our investors conference. 
The growth in the Internet business is going to be in specific 
services, Internet of Things over-the-top services that are not 
public Internet services and are specifically precluded from 
regulation in this. That was the big thing that the Europeans 
wanted to talk to me about because they had heard, ``Oh, you're 
going to cover it.''
    And I said, ``No, we're not.''
    And everybody said, ``Oh, OK. Well then, we're pretty 
copacetic.''
    Senator Ayotte. I know my time is up but I'll do a follow-
up question because there's a specific example I can think of 
where, frankly, already Europeans are purposing things that are 
not as onerous as what was purposed overall by the Commission.
    Thank you.
    The Chairman. Thank you, Senator Ayotte.
    Senator Klobuchar.

               STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. Thank you very much, Mr. Chairman. We 
had a Joint Economic Committee hearing with Jason Furman. I was 
there and then on the floor so it's good to come back.
    This week I'm introducing the Improving World Call Quality 
and Reliability Act with Senator Tester. I know problems with 
world call completion are of interest to many members of the 
Commission and I thank you for that.
    And also Members of the Committee, I hope you'll consider 
cosponsoring our bill which is going to directly address one of 
the root causes of the problem; Least Call Routers. Recently, 
as you all know, you took enforcement action against Verizon, a 
major enforcement action for failure to investigate problems 
with calls not being completed to rural areas. We thank you for 
that.
    Part of the settlement included a commitment to addressing 
the number of Least Call Routers Verizon uses. I'd like to, 
again, thank you and particularly Commissioner Clyburn for the 
continued attention to this issue and this problem which is now 
5 years old. We still clearly have problems outside of Verizon.
    So I will ask both Chairman Wheeler, Commissioner Clyburn: 
Least Cost Routers seem to be a major source of these call 
completion problems. Do we need to know at least who they are 
and require them to follow minimum quality standards? And do 
you agree that we need to get to the source of the problem?
    And for my colleagues who aren't familiar with this: It is 
what it sounds. It's actually calls being dropped at businesses 
and homes for no reason and they're not getting the kind of 
service that they need. They're getting substandard service. 
And so, Mr. Chairman?
    Mr. Wheeler. So first of all, I think you've pinpointed 
something very important. The data on that, we will finally 
start getting first of next month, when the information when 
carriers are required to file with us. So we'll be able to say 
to you, with statistical specificity, what, Senator, I believe 
is the situation that you're attempting to solve. And that 
you're moving this legislation is terrific and that this is 
something we are also considering in our further notice on this 
topic. But I think you've identified that cause celebre.
    Senator Klobuchar. Thank you very much.
    Commissioner Clyburn, thank you for your leadership on this 
issue.
    Ms. Clyburn. I thank you very much.
    One of the things that was positive about the Consent 
Decree that you mention with Verizon is now we're going to have 
workshops. There's going to be research. In terms of the 
overall issue, of course, the Chairman mentioned that April 
first the tension requirements kick in. In August we'll have a 
clear picture with reports being released.
    So I know right now one of the things that you mentioned, 
the Least Cost Routers, today, you know, the rules don't apply 
to them today. But, thank you very much for reinforcing an 
issue that we will continue to review.
    Senator Klobuchar. OK, very good.
    Thank you, all of you.
    Last Congress, I introduced the Smartphone Theft Prevention 
Act. As we all know, this is an unbelievable problem across the 
country with these smartphones being stolen and people getting 
beat up, sometimes killed, over cell phones. And the bill 
required Smartphone manufacturers and wireless carriers to 
install kill switches on all their smartphones so that 
consumers could wipe their information and lock the device if 
it was stolen.
    Following this call to action, the carriers signed a 
voluntary commitment to have this capability on their devices 
by this Summer. Additionally, Minnesota and California passed 
laws to require these consumer protections on all phones sold 
in their states. We've come a long way on the issue instead 
sort of pretending it's not happening or that we can't do 
anything about it. But I think we need to keep on the pressure 
and that's why I'm actually reintroducing the bill.
    Chairman Wheeler, are you committed to keep working with me 
to address smartphone theft? And do you think there can be more 
that's done on the national level; and any other Commissioner 
that wants to chime in?
    Mr. Wheeler. Yes. Yes, ma'am.
    And thank you for your leadership in coming down to help us 
kick off the workshop that we had on this. And let me tell you 
about some of the results of that. Yes, you're right. The kill 
switch, the voluntary agreement, the kill switch. I've seen 
reports uncorroborated but in some major cities where theft has 
gone down as a result of this, we're not supposed to break 
our--I'm not going to break our arms patting ourselves on the 
back, but I think there are three things here that are 
underway. One is that there needs to be a non-wipable, as in 
you can't wipe it out and substitute something else, unit 
identifier for each device. Like a vehicle identification 
number on a car that can't go away.
    At our request, the 3GPP, which is a standards body, has 
said that they will come out with a standard on that by the end 
of the year. A step forward but we're only moving towards it. 
It doesn't solve.
    Second issue is that there needs to be an on-device remote 
lock, the ability to wipe this sort of thing. The devices, 
after July of this year, the devices that come into the market, 
will have that capability.
    The third component that we have to have is we have to have 
a good stolen phone database. There's currently one run by the 
JSM Association but it is: well, if you'll participate in this 
and it's not quite user-friendly and it's not the kind--and we 
need to work with them or with law enforcement to improve that. 
And we've been working with law enforcement to bring pressure 
on either one of those.
    But I think those are the three steps that we have to take, 
but you have clearly been a leader on this and thank you.
    Senator Klobuchar. Well, thank you.
    Do you want to add anything, Commissioner Rosenworcel?
    Ms. Rosenworcel. Well, let's see. One in three robberies 
today involves the theft of a mobile device. And in some major 
metropolitan areas it's one in two robberies. And by any 
measure, that's an epidemic. So I think it's vitally important 
that every consumer have access to the ability to remotely wipe 
their device and that should be on every device free of cost. 
And we should make sure that's available as soon as possible.
    Senator Klobuchar. All right. Thank you very much.
    The Chairman. Thank you, Senator Klobuchar.
    Senator Wicker has returned. So Senator Wicker, Senator 
Sullivan, Senator Manchin.

              STATEMENT OF HON. ROGER F. WICKER, 
                 U.S. SENATOR FROM MISSISSIPPI

    Senator Wicker. Thank you very much.
    [Laughter.]
    Senator Wicker. Eight hearings in 5 days? Is that what I've 
heard?
    Mr. Wheeler. Five hearings in 8 days.
    Senator Wicker. Only five hearings in 8 days. Well, I've 
had four hearings in one day. So there you go.
    [Laughter.]
    Senator Wicker. Breathlessly rushed back in and thank you 
all for filibustering until I could get here.
    Mr. Pai, let me ask you. You know, sometimes we vigorously 
disagree with our colleagues. It's clear you vigorously 
disagree with the majority of this panel on the so-called 
``open Internet rule.'' And I appreciate you doing it 
cheerfully but also forcefully. And I want you to help us 
understand the reasons that you have given procedurally and 
substantively under this statute as to why this decision is 
violative of requirements and violative of the Communications 
Act.
    Mr. Pai. Senator, thank you for the question. I could go 
through all 67 pages but I will abbreviate it for the sake of 
the panel and for everyone watching.
    In short, there are problems with process and problems with 
substance. In terms of process, my view is the agency failed to 
comply with the Administrative Procedure Act in terms of giving 
the public fair notice and an opportunity to comment on the 
proposal that it ultimately adopted. Here is the indisputable 
truth. The FCC never purposed Title II. It adopted a proposal 
in May of 2014 that was based on Section 706. Through the 
course of the summer, it was widely reported that Section 706 
was the lead proposal. Later, it was reported that some sort of 
hybrid proposal based on the Missoula Initiative was the lead 
proposal.
    Only after the President's announcement on November 10, 
that Title II was ``my plan'' and I'm ``asking the FCC to 
implement it,'' did the FCC suddenly change course.
    Senator Wicker. What would need to have been done for the 
proposal to actually have been made?
    Mr. Pai. I would say, and I said this before the President 
made his announcement when I held the only FCC hearing that 
allowed people to comment on net neutrality down in College 
Station, Texas, my view was that whatever the new proposal was, 
the American people should be allowed to see it and comment on 
it. We should have a new round of notice and comment. That 
would avoid the pickle the agency is now in, that it's going to 
have to litigate for a couple of years whether or not there was 
sufficient APA notice. But there simply wasn't in this case.
    And I think the best evidence of that is the fact that you 
saw a lot of speculation in the press once we actually got the 
document on February 5. Well, what's in it? What's not in it? 
When the changes were made in the lead up to February 26, well 
what does it mean that broadband subscriber access service was 
removed? How does that effect interconnection?
    None of those details were public and no one knew how to 
comment on it because they didn't know what was in the plan.
    Senator Wicker. Now, with regard to the substance.
    Mr. Pai. With respect to substance, I think that both the 
text of the Communications Act and the FCC's own precedents 
make it difficult for, if not impossible I would argue, for 
Title II to be applied to the broadband industry.
    I'll just give you one example of that. With respect to 
mobile broadband, Section 332 explicitly prohibits private 
mobile service from being classified as a common carrier. And 
to be sure through the Order, if you've had a chance to read 
it, you'll see all sorts of legal gymnastics in which the FCC 
cleverly tries to redefine the public switch network in order 
to have it apply to the Internet, to the mobile broadband 
services. But I don't think a review in court is certainly 
going to see that that passes muster.
    Similarly with respect to wireline Title II, I would argue 
that there are substantial legal hurdles that the agency is 
going to have to broach in order to make Title II stick. So 
both for reasons of process and substance, I think, there are 
serious litigation risks with this order.
    Senator Wicker. Is there any question in your mind that 
this is going to result in years and years of litigation?
    Mr. Pai. The best proof is what has happened in the past. 
This is the FCC's third bite of the apple. The first two times 
resulted in unsuccessful challenges at the D.C. Circuit. The 
first case, which was the Comcast BitTorrent case, took 2 years 
for us to resolve. The 2010 Open Internet order was only 
resolved by the D.C. Circuit in 2014.
    So the silver lining to this order is that the 
Communications Bureau will be busy for quite some time trying 
to figure out which courts to challenge this in and the courts 
will have a long time to savor its many details.
    Senator Wicker. And in terms of protecting the flexibility 
and the ability going forward of this huge engine of the 
economy, what does this order do?
    Mr. Pai. I think it's going to have a significant negative 
impact. And the best example of that is mobile data. The 
argument has been made repeatedly here today that well Title II 
as applied to mobile has been successful because it has been 
somewhat diluted, but two points to that. Number one, as my 
colleague Commissioner O'Rielly pointed out, mobile data has 
never been a Title II service.
    But second, it strains credulity to argue that the 
tremendous increase in mobile investment has been attributable 
to Title II application to mobile voice. Obviously, to anyone 
who is objective looking at this the introduction of the 
smartphone in 2007 generated an explosion in mobile data usage 
which carriers then had to struggle to keep up with. And they 
did that by investing billions of dollars in spectrum and 
billions more in wireless infrastructure. And it was because 
mobile data was lightly regulated as an information service 
that we saw this benefit to consumers.
    I would also argue that it's sort of paradoxical to me at 
least that in January the FCC made a big show about 25-megabits 
per second being the standard for broadband, but then in 
February decided that mobile broadband would be subjected to 
Title II. As my colleague has pointed out, you can't have it 
both ways. Mobile doesn't count when it comes to this 
artificially high threshold but it does count when we want to 
regulate it extensively.
    Senator Wicker. Thank you very much.
    The Chairman. Thank you, Senator Wicker.
    Senator Sullivan.

                STATEMENT OF HON. DAN SULLIVAN, 
                    U.S. SENATOR FROM ALASKA

    Senator Sullivan. Thank you, Mr. Chairman.
    And thank you, Commissioners. I know you have had a long 
day. And I have a bunch of basic questions. You're the experts. 
I'm a freshman Senator here trying to figure out what's going 
on. Obviously, there's a lot of press.
    Let me just ask a couple of basic questions. To the extent 
you can keep them short, but I want to try and get, you know, a 
number of different responses. FCC reauthorization, when was 
the last time that happened by Congress?
    Mr. Wheeler. I think the Chairman said 25 years ago.
    Senator Sullivan. So do you think that's a good idea?
    Mr. Chairman, Chairman Wheeler, why do you think that's a 
good idea? Should we do that?
    I know the Chairman has said that he thinks it's a good 
idea.
    Mr. Wheeler. I think Congress makes the rules. Congress 
decided not to for 25 years. If Congress wants to decide to do 
it again, Congress makes the rules.
    Senator Sullivan. Commissioner Pai?
    Mr. Pai. I think it's a useful exercise because it allows 
this Congress to modernize our operations and make sure that 
our rules keep pace with the times. And I think that's 
important for Congress to be involved with.
    Senator Sullivan. Let me just follow up on that. So big 
policy decisions--you're an independent agency--so big policy 
decisions, who makes those calls? Congress, the President, you? 
Who is responsible for making big policy decisions that impact 
telecommunications?
    Mr. Wheeler. I didn't know who you were----
    Senator Sullivan. I'm sorry. I've got so many questions 
this is----
    Mr. Wheeler. Clearly Congress has historically set down the 
parameters and said this is what we want the agency to do----
    Senator Sullivan. You think----
    Mr. Wheeler.--and to establish an expert agency----
    Senator Sullivan.--regulating the Internet is a big policy 
decision that wasn't contemplated 70 years ago that should be 
more of a congressional action than an independent agency 
action?
    Mr. Wheeler. I think that the Congress instructed us to 
protect the public interest, convenience, and necessity, and 
gave specific authorities to do that. And that's what we were 
following.
    Senator Sullivan. On a portion of the economy that wasn't 
contemplated 70 years ago?
    Mr. Wheeler. Well, this was 1996 but the early days of the 
Internet.
    Senator Sullivan. So, Commissioner Pai?
    Mr. Pai. I agree. You know, that's why I said in the wake 
of the Verizon versus FCC decision in 2014 that now the FCC, 
now twice having failed in court to have its open Internet rule 
sustained, we should turn to Congress for guidance.
    Senator Sullivan. So is there anything in the law, real 
quickly, that gives the President kind of--so let say Chairman 
Thune or Ranking Member Nelson go to the Senate floor and they 
give a big speech on the Internet and how they want it to be 
controlled, how they want it to be regulated. It's well thought 
out. And then the President gives a speech too.
    Is there anything in the law at all that says, ``This 
agency should give more deference to the President?''
    Mr. Pai. Absolutely not.
    Mr. Wheeler. Absolutely not.
    Senator Sullivan. OK.
    In terms of consensus, do you try to work consensus as 
Commissioners? Because there are obviously some pretty 
differing opinions of this rule. Is that the typical approach 
to try to work on consensus? Do you think that's important to 
try to achieve consensus?
    Mr. Chairman, a lot of times if you're the Chair you want 
to work on consensus. Do you think that's important?
    Mr. Wheeler. I totally agree. Ninety percent of our 
decisions are 5-0. The difficult decisions often become 
contentious. We've had a series of 4-1 decisions.
    Senator Sullivan. Do you think that decisions like this 
that are highly contentious, splitting the Commissioners as 
mentioned, you think it's going to lead to a lot of litigation?
    Do you think this decision is going to lead a lot of 
litigation?
    Mr. Wheeler. The big guys have said they're going to sue on 
this one. They've been saying it from day one.
    Senator Sullivan. Well, when some of your commissioners 
think it's illegal action, you think that invites litigation?
    Mr. Wheeler. You know, the beauty of it is that you get two 
lawyers in a room and you'll have three opinions.
    Senator Sullivan. Well, that's cute but I'm not sure that 
there's a beauty here at all, to be honest.
    Years of litigation are going to create uncertainty. Do you 
think uncertainty is good for investment in this part of the 
economy?
    Mr. Wheeler. One of the things that----
    Senator Sullivan. Do you think uncertainty is good for 
investment in this part of the economy?
    Mr. Wheeler. Uncertainty is never good and there are all 
kinds of uncertainty including what's the Commission going to 
do. We have set out a certain set of rules. People know what 
the rules of the road are now, what the yardsticks are. That 
didn't exist before, and remember that under the 2010 rules, 
they were not stayed by the court. And so they were in effect 
for 4 years.
    Senator Sullivan. Can you give me an example?
    Mr. Wheeler. There was great investment during the period 
when they were in effect.
    Senator Sullivan. Can you give me an example of regulating 
a large part of the economy that's resulted in spurring 
innovation and dramatically increasing economic activity in 
jobs?
    Mr. Wheeler. Look at the period 2010 to 2014 when the 
previous open Internet rules were in place and we had 
unprecedented growth.
    Senator Sullivan. Commissioner Pai, can you respond to 
that?
    Mr. Wheeler. Look at the period--there are other examples 
too, such as when DSL was regulated under Title II during its 
greatest period of growth. There is, I mean I think there are 
track records here that established this kind of growth.
    Senator Sullivan. Do you have a sense of that?
    Mr. Pai. I respectfully disagree with the Chairman. I think 
that the explosion, in particular, when it comes to wireless 
investment was specifically because the 2010 order exempted 
wireless from the net neutrality rules. And especially one of 
the reasons why we now live in an increasingly mobile world is 
because the FCC was relatively restrained in 2010 compared to 
what it did now.
    Time is only going to tell, and I think the best example is 
Europe where the Europeans have significantly less access to 
high-speed broadband than we do, 82 percent of Americans only, 
sorry, 48 percent of Europeans. And when it comes to wireless 
in particular, the U.S. has 50 percent of the world's 4G LTE 
subscribers. There's a reason for that. And the reason is 
because, until February 26, we were relatively restrained and 
stuck with a bipartisan consensus that has served us so well 
since the Clinton Administration.
    Senator Sullivan. Mr. Chairman, I'm out of time. I have 
additional questions I'd like to submit for the record. Thank 
you.
    The Chairman. Senator Sullivan, thank you and we'll make 
sure that those questions get submitted for the record. And 
since I can't see anybody else coming in----
    [Laughter.]
    The Chairman. It's Senator Manchin's turn.
    Senator Sullivan. You better hit the switch.
    The Chairman. The Chair recognizes the Senator from West 
Virginia.

                STATEMENT OF HON. JOE MANCHIN, 
                U.S. SENATOR FROM WEST VIRGINIA

    Senator Manchin. Thank you, Mr. Chairman. I appreciate that 
so much.
    This is such an interesting topic and you know I keep 
thinking back to those who are old enough or grew up basically 
before there was mobile phones, cell phones, Internet, 
computers----
    Mr. Wheeler. Television.
    [Laughter.]
    Senator Manchin. I didn't want to go, but we can go there 
if you want to.
    [Laughter.]
    Senator Manchin. And then, you know, in West Virginia there 
are still discussions, did Al Gore really invent the Internet 
or was it something we all contributed to and all of us being 
involved. I think when you look about where we are, we all will 
agree. This is an intricate part of our life today and we all 
depend on it. We might not know all the answers to the 
questions that we just put forth, but bottom line is we don't 
want to lose what we have.
    In rural states such as West Virginia, they told us that 
when you divested yourself of the telephone Ma Bell it will be 
better. Well, it wasn't. They told us also that basically, if 
we deregulated the airlines, it will be better. It wasn't. 
Deregulation hasn't, and they said when you deregulate the 
utilities it'll be better. It wasn't.
    So basically, with all that being said, you know in a rural 
area, rural states, we're a little bit leery of how much better 
you want to make it for us. So with that, we want to make sure 
that we still have our access, we're still able to have all of 
our schools connected in West Virginia. Every school in our 
state is connected and we made sure of that.
    How do we now be able to take that homework to home and 
still make sure that the child has the ability to do that? I 
can assure you that there's not enough market in West Virginia 
for all of our friends on Wall Street or in Silicon Valley to 
do that. I know that. But I'm still looking for the balance. 
Somehow we can all--and I understand with the FCC I know you're 
taking a lot of flak on this but I understand. Basically, I do 
look at this as a necessity utility to a certain extent. But 
with that, I know I wouldn't have what I have if the market 
hadn't been able to do what it did.
    So there are some of us on our side of the aisle that is 
looking for that middle road. Without going to court, can we 
help alleviate that? Can we do legislation, working with our 
colleagues on our Republican side, working together as 
Americans and finding a solution to this without battling it 
out in a court system and ending up, you know, it's going to be 
costly no matter what happens. And the consumers end up paying.
    So I would say, Mr. Chairman, just coming down or any of 
you, Mr. O'Rielly maybe since you haven't had lots to say with 
this, and then finding out--have you all, among yourselves, the 
five of you, tried to find commonality here that we can work?
    Mr. O'Rielly. So let me suggest an answer to, also to 
Senator Sullivan's question. The Commission is a creature of 
Congress. So any time the Congress can speak on something, I 
think it's helpful for my purposes. So I think that's very 
helpful. So whatever you are able to agree, in terms of 
legislation, I think that's helpful. I don't know the 
particulars but I leave that to your capable hands to whether 
you can get legislation and what you think the best outcome 
should be in terms of policy decisions.
    Senator Manchin. You know, when you look at the GDP of 
China, China is at 9 trillion; Russia is at 2 trillion; Great 
Britain is at 2 trillion. We're at 17-plus trillion. So we've 
done something right in spite of ourself. And we want to make 
sure that we can continue to grow and Internet has been a big 
part of that GDP.
    You have to give us some direction here. If you five can't 
find some areas, you know, of agreement or consensus and right 
now I see you split three-two; pretty evenly split. I think 
you're all probably good friends. You all talk and work 
together, but on this you're split. If you can't come together, 
how in the world do you expect us to work together?
    I'm going to skip over you because I'm going to come right 
back. Right here, I'm going to come--Ms. Clyburn, I will come 
to you.
    Ms. Clyburn. Miracles do happen.
    [Laughter.]
    Ms. Clyburn. I am a believer.
    Senator Manchin. I think we're on the same wavelength.
    Ms. Clyburn. Well, one of the things that I don't think we 
could have envisioned just a few months ago is that this body, 
Congress, you know, recognizes the importance and need for 
rules for free and open Internet. We are encouragers, enablers, 
of innovation and investment and that's why this conversation I 
think is healthy and important. We might not agree on the 
particulars but we agree on what we think the endgame is; and 
that is a robust, open, and free platform that will allow every 
community to be the best it can be.
    Senator Manchin. It would be accurate for me to evaluate 
saying that the system that we have right now, the way we're 
operating the Internet right now, is giving us the access and 
protection that we need, an average citizen in America, but 
also allowing the innovators and creators to continue to invest 
and get a return on that investment. And has it come down that 
basically that I'm just corporate America, I'm just not getting 
exactly what I intend for my stockholders to see I'm getting a 
return on investment so I won't put the money into it because 
you haven't let unfettered, let me go?
    You want to jump in?
    Ms. Clyburn. One of the things that I things that I think 
is lost----
    Senator Manchin. I'm sorry, Mr. Chairman.
    Ms. Clyburn.--is some of the--I'm sorry. Will you forgive 
me?
    Senator Manchin. I had to wait a long time so maybe he'll 
give me a couple extra questions.
    [Laughter.]
    Ms. Clyburn. He said he would forgive it and----
    Senator Manchin. Go ahead.
    Ms. Clyburn. Oh, right.
    So there are pro-competitive elements of this order that 
nobody is talking about. When it comes to pole attachments, 
that has been, you know, in your community, that has been a 
bottleneck. This order helps us, gives us the tools to enable 
that type of investment to get rid of the barriers to that. 
When we talk about our national priorities of connecting 
America, completing that stool of getting rid--my colleague 
talks about the Homework Gap. It is important for us to have 
connectivities and connectivity in our schools and our 
libraries. But it's just as important that learning does not 
stop when people get home.
    So enabling more people to connect with pole attachments to 
provide service will hopefully make things more affordable for 
more people allowing them to connect at home. All of these 
things are linked. And that's why it's so important for us to 
continue this conversation. We might not agree on every 
footnote, which is my internal joke, but we agree on the end.
    Senator Manchin. I would encourage you all to work 
together.
    Ms. Clyburn. Thank you.
    Senator Manchin. I know. You're on.
    Mr. Pai. With the Chairman's indulgence, Senator, I would 
answer that question simply by saying that Title II, I think, 
takes us away from the direction of getting more broadband 
options. And one of the most unfortunate things about the net 
neutrality debate, at least to me and I say this both as a 
Commissioner and as someone who grew up in rural America far 
away from any big city, is that there are a number of different 
FCC policies within our legal authority that we could pursue to 
give folks in West Virginia and folks in Kansas and folks in 
South Carolina the same broadband options that people here in 
Washington take for granted.
    We can make it easier, for example, to deploy wireless 
infrastructure. We could get more 5 gigahertz spectrum out 
there so that wireless ISPs can deliver high-speed broadband in 
places like mountainous West Virginia where you can't lay 
fiber. We can make it easier to embrace the IP transitions so 
that these carriers don't have to invest every single dollar in 
copper but it can deliver fiber to West Virginians. We could 
modernize the E-Rate program to make it fairer for rural 
schools who currently don't get a fair shake out of the program 
to be able to get funding for that program to connect kids with 
digital opportunities.
    Senator Manchin. But then you also----
    Mr. Pai. These are all things that are fiber----
    Senator Manchin.--have control of how that's delivered. 
Correct?
    Mr. Pai. I'm sorry?
    Senator Manchin. There's a possibility of losing control of 
how it's delivered?
    Who is going to make the decision of how I get that?
    Mr. Pai. All of us would ultimately set the regulatory 
framework and the private sector would then have a maximum 
incentive to do----
    Senator Manchin. I understand and I'm not objecting to 
this. I understand where you're coming from and I want the best 
of both worlds, I guess.
    Mr. Pai. Right.
    Senator Manchin. OK?
    I have a pretty good world right now. Can I make it better 
without throwing the baby out with the bathwater and losing the 
protections that I've got? I think that's what I'm looking for.
    Mr. Pai. Absolutely.
    Mr. Wheeler. Senator, I think you raise an excellent point 
and I have to say that in this hearing room I keep hearing the 
echo of years ago, sitting at this table, when Senator Hollings 
was sitting up there in the chair. And he kept saying in his 
great South Carolina drawl, ``I'm a born-again deregulator.'' 
Because he learned, as you said, what are the realities when 
you say the people who run it are the people who are going to 
make the rules. And what we're trying to say is that this is 
the most powerful and pervasive platform in the history of the 
planet. And there ought to be some rules that are made by 
people other than those who run it.
    Senator Manchin. Yes, sir.
    The Chairman. And I would say to the Senator from West 
Virginia that perhaps on this issue we here can find consensus 
and inspire those five to find consensus.
    Mr. Wheeler. Senator, can I pick up on that and say yea and 
verily?
    The Chairman. Yes. Well, if we can together, though, 
seriously on a solution, because I think that would make a lot 
of sense for a lot of reasons.
    Senator Wicker has one more question he'd like to ask.
    Senator Wicker. One more line of questioning. But Senator 
Manchin is right; we got it pretty good now. Innovation is 
pretty good now and I do wonder if this is a solution in search 
of a problem.
    But talking about rural America. Commissioner Clyburn, 
thank you for visiting Mississippi. Thank you for visiting 
rural Sunflower County----
    Ms. Clyburn. Yes.
    Senator Wicker.--specifically Ruleville in the Mississippi 
Delta and there you saw a groundbreaking telemedicine program 
that is treating and attempting to defeat Type II Diabetes. 
Thank you so much for coming.
    This program depends on USF supported robust mobile 
broadband connections. What is the FCC prepared to do to ensure 
that sufficient USF support remains available so that rural 
wireless networks remain up and running enabling access to 
these critical lifesaving and cost-saving advances in medicine?
    Ms. Clyburn. You know about phase one of our Mobility Fund 
as well as our Connect America Fund. We are moving ahead in the 
next phases of that which we will hope will be further enablers 
for investments. We've got broadband experiments and rural 
initiatives that will help us work out the kinks for us to go 
to the next stage of a broader series of investments.
    So what we're doing is on a very parallel course, working 
out the kinks in terms of IP transition and the like and really 
continuing to fuel innovation and moneys and investments. And 
working with communities, with the private sector, with 
government officials to ensure that the monies that are needed 
to close these gaps to ensure that Ruleville, Mississippi has 
the connectivity it needs to further the positive health 
outcomes that I witnessed in that area. Incredible, incredible 
outcomes.
    Senator Wicker. When you were there, did we get you down to 
Indianola to see the B.B. King Museum?
    Ms. Clyburn. I missed that, unfortunately.
    Senator Wicker. We'll have to invite you back. World 
class----
    Ms. Clyburn. We didn't allocate enough time but if you 
invite me back I will be glad to. I didn't get a chance to do 
too much eating. So if you could work on that next time.
    [Laughter.]
    Senator Wicker. Chairman Wheeler, the University of 
Mississippi Medical Center and the Delta Council have written 
you imploring you to preserve Universal Service Support for 
rural areas. Can the Commission assure rural consumers that 
there will be no reductions in their access to wireless 
services? And what assurances can you give this Committee that 
rural consumers will not lose their current ability to choose 
among quality providers?
    Mr. Wheeler. I think Commissioner Clyburn--thank you, 
Senator. Can I get an invitation? I'd like to see Lucille.
    [Laughter.]
    Senator Wicker. Great. Good. Absolutely.
    Mr. Wheeler. I think Commissioner Clyburn hit the nail on 
the head in terms of we are looking at moving to phase two of 
the Mobility Fund and that it has to fit into all the other 
activities, which we spoke about earlier in this hearing in 
terms of what we're doing for Universal Service. You know, we 
talk about the great job that the University Of Mississippi 
Medical Center is doing. I'm a huge believer in what mobile 
health can do.
    Before I took this job, I was the Chairman of the UN 
Foundations in Health Alliance, where it's literally going 
around the world and saying, ``Hey, here's how you can use 
mobility to solve these problems.'' And we want to make sure 
that those kind of opportunities sure do exist in this country.
    Senator Wicker. Thank you.
    And thank you, my colleagues, for the second round.
    The Chairman. Thank you, Senator Wicker.
    Senator Nelson, you want to ask another question too?
    We're almost there, guys.
    [Laughter.]
    Senator Nelson. Not quite.
    [Laughter.]
    Senator Nelson. Mr. Chairman, I have a letter that the 
Leadership Conference on Civil and Human Rights, they're 
weighing in on this. I ask that it be entered in the record.
    The Chairman. Without objection.
    [The letter referred to follows:]

        The Leadership Conference on Civil and Human Rights
                                     Washington, DC, March 16, 2015

               Protect and Modernize the Lifeline Program

    Dear Chairman Thune and Ranking Member Nelson:

    On behalf of The Leadership Conference on Civil and Human Rights, a 
coalition charged by its diverse membership of more than 200 national 
organizations to promote and protect the rights of all persons in the 
United States, we urge you to defend the Lifeline program against 
threats to eliminate it. We also urge you to support the expansion of 
Lifeline to broadband. The Lifeline program allows our Nation's most 
vulnerable and chronically underserved communities to maintain 
telephone service that would otherwise be unaffordable. While critics 
have focused on alleged fraud and abuse as a reason to eliminate or 
limit the program, we believe the best approach, as the Committee 
prepares for its upcoming oversight hearing of the Federal 
Communications Commission (FCC), is to allow the FCC's strict reforms 
to continue to address identified abuses, while at the same time 
assisting the FCC with its plans to update this program for the 21st 
century.
    Lifeline is a successful program, enabling 12 million of our most 
vulnerable populations to call 911, contact prospective and current 
employers, and connect with essential health, social, and educational 
services. Moreover, telephone access for low-income people can save 
money for other Federal programs, replacing more expensive in-person 
office visit and simultaneously rooting out fraud in those programs. 
Because a small household benefit is used in the private marketplace, 
this program both helps the less fortunate and strengthens competition 
and jobs.
    Although sensationalized and opportunistic attacks on the program 
have gained traction because they exacerbate and exploit stereotypes 
about the individuals who use the program, the reality is that the 
FCC's reforms have successfully addressed fraud and abuse in a 
comprehensive manner:

   The National Lifeline Accountability Database has eliminated 
        approximately 1.28 million duplicates, which will save the fund 
        approximately $161 million on an annualized basis.

   The FCC's enforcement actions have proposed more than $90 
        million in fines against companies for violating rules. FCC 
        consent decrees have recovered $600,000 in payments to the U.S. 
        Treasury; and more than $400,000 in repayments to the Universal 
        Service Fund (USF). The FCC has issued citations to more than 
        300 Lifeline customers with duplicative subscriptions.

   FCC Chairman Wheeler developed a USF strike force to stop 
        fraud and abuse. However, the FY2015 appropriation does not 
        permit full deployment of that effort.

    Though successful, Lifeline remains trapped in outdated technology. 
The FCC recognizes this limitation and is currently developing 
proposals to improve and modernize the program. We urge you to 
collaborate with the FCC Chairman and sitting Commissioners as they 
develop their ideas. For example, Commissioner Rosenworcel has 
correctly noted that Lifeline expansion is the logical complement to 
recent E-rate reforms, enabling us to fully address the ``homework 
gap.'' Commissioner Clyburn's reform principles are consistent with 
longstanding proposals from the civil rights community:

  1.  Adopt minimum standards to get the most for every universal 
        service dollar.

  2.  Protect privacy and make the program more efficient by limiting 
        the role of providers in eligibility verification.

  3.  Encourage broader provider participation in Lifeline, including 
        possibly expanding participation to community institutions and 
        others.

  4.  Leverage efficiencies by permitting eligible customers to enroll 
        in Lifeline when they qualify for other benefits programs.

  5.  Leverage public-private partnerships for outreach and training.

    As broadband rapidly replaces voice service as the basic 
communications tool for our era, the FCC should rapidly update Lifeline 
to match the times. Broadband non-adoption still hovers at 
approximately 30 percent of the U.S. population, and is even lower for 
seniors, Latinos, African-Americans, and recent immigrants. Increasing 
broadband adoption will improve the economic well-being of those 
populations as well as the economic competitiveness of our country as a 
whole.
    We urge you to support the modernization of this critical program 
and to reject the most recent spate of unsubstantiated and outdated 
attacks. Please contact Leadership Conference Media/Telecommunications 
Co-Chair Cheryl Leanza, UCC O.C., Inc., at 202-841-6033 or Corrine Yu, 
Leadership Conference Managing Policy Director, at 202-466-5670, if you 
would like to discuss the above issues.
            Sincerely,
                                            Wade Henderson,
                                                 President and CEO.
                                              Nancy Zirkin,
                                          Executive Vice President.

    Senator Nelson. Let's go back. You know this flap started 
that prompted 4 million comments. I take it that's fairly 
unprecedented?
    Mr. Wheeler. The record.
    Senator Nelson. And a lot of that was expressing their 
angst because they thought that their Internet was going to be 
messed with. Is that correct?
    Mr. Wheeler. Yes, sir.
    Senator Nelson. And by messing with it, if we think back to 
what was in the public's mind at the time, it was: Were they 
going to have to pay more because certain content was going to 
have to pay more to get on to the Internet pipes. Is that 
correct?
    Mr. Wheeler. That was one of the major issues, the so-
called ``fast lane'' issue.
    Senator Nelson. And by you drawing the Order as you have 
drawn it, does that allow you, the FCC as a regulator, as 
referee, along with future regulators, if someone suddenly 
wants to charge more for certain traffic on the Internet than 
other types of traffic, that an FCC is going to be a referee 
there now or in the future to prevent that?
    Mr. Wheeler. Yes, sir. We have a flat-out ban on those 
kinds of paid fast lanes.
    Senator Nelson. And that's in the Order?
    Mr. Wheeler. Yes, sir.
    Senator Nelson. Mr. Pai, do you disagree with that?
    Mr. Pai. I agree it's in the Order. But I also agree with--
--
    Senator Nelson. No.
    Mr. Pai.--the Chairman last year when he----
    Senator Nelson. The obvious question is do you disagree 
with that provision in the Order?
    Mr. Pai. Oh, yes, I do. Absolutely, because, number one, 
there is no paid prioritization now. There are no fast lanes 
now. This is an entirely hypothetical concern.
    Senator Nelson. OK.
    Mr. Pai. And as the Chairman pointed out last year----
    Senator Nelson. I'll tell you, Mr. Pai, it wasn't of no 
concern to 4 million people.
    Mr. Pai. Well, you put it well, Senator, when you said they 
had angst about what was going to happen. If you look at the 
actual document, there is no evidence in the record of any 
systemic failure specifically with paid prioritization. 
Moreover, even if he agreed there was a problem, as the 
Chairman testified before the House last year, you cannot ban 
paid prioritization under Title II. And I agree with them.
    Mr. Wheeler. Well, you're putting words in my mouth here.
    Mr. Pai. I'm quoting you.
    Mr. Wheeler. No. Let's be real clear. I said that there is 
a waiver process under Title II that is a way out of it. What 
we have done, as you know, is to have a flat-out ban on paid 
prioritization and to specify what the waiver test ought to be. 
So if you're going to represent my position, let's be specific 
on what that is.
    Senator Nelson. Let me ask you, Chairman Wheeler, is there 
a difference in the issue about the application of Title II 
that is before the court this time that was different the last 
time that this issue was before the court?
    Mr. Wheeler. Yes, sir. I think that the issue----
    Senator Nelson. Would you explain that to the Committee?
    Mr. Wheeler. The issue before the court in the 2010 rule 
was the court determined that the kinds of requirements that 
the Commission had put in place were only requirements that 
could be applied to a common carrier. And because of the fact 
that the agency had not said that broadband providers were 
common carriers, they therefore couldn't reach and impose on 
them.
    A point that is of interest in that lawsuit and is relative 
to Commissioner Pai has said a moment ago about paid 
prioritization is that Verizon's counsel during oral argument 
said: ``I have been explicitly authorized by my client to tell 
the court that the reason we are appealing this decision is 
that we want the kind of unregulated environment that would 
allow us to do the kind of things that you've been talking 
about such as paid prioritization.''
    It was those issues that were all involved in that 
decision.
    Senator Nelson. Let me give you, Chairman Wheeler, the 
chance. There was one of the Senators here, I think it was 
Senator Johnson, that he had asked a question and Commissioner 
Pai had answered it. You requested an opportunity to respond 
and there was not time in the Senator's. Do recall?
    Mr. Wheeler. You remember that? This is like watching a 
tennis match, sir. I'm not sure I remember the question.
    Mr. Pai. I think that's where you wanted to voice your 
agreement with what I was saying?
    Mr. Wheeler. Was that what it was? No wonder I forgot.
    [Laughter.]
    Mr. Wheeler. Thank you, though, Senator.
    Mr. Pai. Senator, could I just----
    Senator Nelson. I've got some additional questions I'll 
submit for the record----
    The Chairman. Great.
    Senator Nelson.--because of the lateness of the hour.
    The Chairman. Do you have a response to this last question?
    Mr. Pai. Well, Senator, just to the previous question. I 
just want to make sure we are absolutely accurate. I am quoting 
the Chairman on May 20, 2014. ``There is nothing in Title II 
that prohibits paid prioritization.''
    Mr. Wheeler. So let's quit playing on words.
    Mr. Pai. Moreover, the representation of the oral argument 
was----
    Mr. Wheeler. Wait a minute. Wait. Wait. Wait. Wait. Wait.
    Mr. Pai.--completely misconstrued.
    Mr. Wheeler. Wait. I will stipulate to the fact that I said 
that. And what that statement says is not how you are 
interpreting it.
    Mr. Pai. You can go to YouTube and watch it.
    Mr. Wheeler. Just timeout. Does Title II provide a waiver 
process?
    Mr. Pai. There is no waiver process in Title II. You can 
interpret the rules to fashion some sort of make----
    Mr. Wheeler. There is in all of Title II a process where 
you can apply to the Commission for a waiver.
    Mr. Pai. Under what section?
    Mr. Wheeler. And if you don't take that out of context, 
what I was saying in that hearing was that there is always an 
opportunity under Title II to come in and seek a waiver under 
our general procedures.
    Mr. Pai. OK. If that's the argument, then obviously with 
the FCC has general waiver authority to apply it to anything 
under the sun in order to argue that Title II----
    Mr. Wheeler. Boy, well I sure followed up in my explanation 
of things then, didn't I?
    Mr. Pai. I take you at your word then, that you didn't 
believe that Title II banned paid prioritization. I mean, I 
think I agree with that and the record speaks for itself.
    Senator Nelson. Well, let me just say this----
    Mr. Wheeler. We'll use Commissioner Rosenworcel as a 
referee.
    Ms. Rosenworcel. It's very fun to sit between the two of 
these men.
    [Laughter.]
    Senator Blumenthal. Mr. Chairman, I think that the meetings 
at the FCC must be very interesting.
    Mr. Pai. It's must-watch TV, Senator.
    [Laughter.]
    Senator Nelson. Let me just say that I have the shared 
responsibility with the Chairman of this Committee as the 
majority of this Committee, the Chairman, to see if there's any 
common ground. And I'm not sure there is common ground if the 
issues are as divided as they are. And that saddens me because 
I think that reasonable people can usually come together and 
find a consensus.
    But Commissioner Pai, if the Chairman says, and this has 
been typical throughout the last 3 hours and 15 minutes, if the 
Chairman says the sky is blue, you will say, ``No, it's a 
different color.''
    Mr. Pai. Senator, the best----
    Senator Nelson. And that's what has gone on all day.
    Mr. Pai. Senator, the best example of my willingness to 
find consensus is my track record over the two and a half years 
I've had the privilege of serving as the Commissioner. Under 
Chairman Genachowski and Chairwoman Clyburn, we had 89 percent 
of unanimous votes in terms of meeting items. That percentage 
has gone down precipitously, down to 50 percent. You will find 
even on net neutrality, in May 2014, the Chairman's office 
asked us, ``Would you be interested in talking about a possible 
solution?''
    I said, ``Yes.'' They never got back to us.
    On this particular issue and a great number of high-profile 
issues, we consistently have put a proposal on the table to at 
least allow us to find consensus; not just on net neutrality, 
incentive auction, E-Rate, you name it.
    All of my statements are on the record. You can look at 
them on my website and they've repeatedly been rebuffed for God 
knows what reason. But my door is always open. Perhaps my 
foolish Midwestern optimism, I really believe that we can get 
to yes because in the first 2 years of my tenure, we did get to 
yes.
    Mr. Wheeler. So since I'm the one who is being impugned 
here----
    Senator Nelson. And you have my permission since this is my 
time.
    Mr. Wheeler. You know, there's a difference between staking 
out a position and saying this position, which is contrary to 
the goals of the majority, if you don't agree with this 
position then you're not compromising with me. But we'll let 
that slide.
    I've heard Commissioner Pai on this. Here's a 
Communications Daily headline ``Wheeler is Sitting on NPRM on 
Redefining MVPD in Hopes of Consensus With Republicans.'' 
Here's a statement from Commissioner Pai on our location orders 
saying, ``At the time, I expressed concern the NPRM's proposals 
would fail to meet that test, and that concern was borne out by 
the record in this proceeding. So I'm pleased we have adjusted 
course and are now adopting requirements that meet these two 
watchwords. I want to commend the parties that worked 
cooperatively on this effort.''
    I sit down with all of my colleagues every other week; we 
have a regular meeting for an hour, on the schedule at least 
for an hour, to say: ``What are the issues? And what do we need 
to work on?'' And I hope that we can continue to produce 
results that where we respect each other, but we need to be 
real careful of talking about how redefining things and then 
saying, ``because you won't take my redefinition, you won't 
compromise,'' that's not compromise.
    Senator Nelson. I'll just conclude by saying that I have a 
great deal of faith in Senator Thune as a partner as we go 
forth on a lot of issues on this Committee. And whether or not 
we can work out something on this, it's to-be-determined. But I 
can assure you that the conversations between Senator Thune and 
me are quite civil and in the best spirit of friendliness.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Nelson.
    And I think this discussion demonstrates that we do need to 
figure out how to resolve this issue. And indeed, the 
ambiguity, I mean the uncertainty; all the discussion that's 
going on right now suggests to me that we need some clarity. 
And if we want to ban paid prioritization, let's do it in law. 
I mean that's a fairly straightforward way of solving this 
issue and eliminating what will be a lot of uncertainty in a 
certain, I think, a model lawsuit.
    So I look forward to working with you and Members on both 
sides. I hope we can find that Title X, as you referred to it. 
The sweet spot.
    All right. I assume that the Senators from the Northeast 
are back because they want to ask some questions. Can you be 
very, very quick?
    Senator Blumenthal. With that suggestion, certainly, Mr. 
Chairman.
    The Chairman. The Senator from Massachusetts.
    Senator Blumenthal. We will seek common ground on brevity.
    [Laughter.]
    The Chairman. Say that not for my benefit but for theirs.
    Senator Blumenthal. I understand. And I want to thank all 
of you for your patience and your perseverance here today.
    I just want to second what my two colleagues have said that 
what we're certainly going to seek common ground, but I think 
there is a clear policy that has emerged from the FCC on an 
open Internet and net neutrality and that policy now, even if 
it is the result of a divided Commission, is the law. And, if 
it's challenged as I indicated earlier, I certainly would do 
everything in my power to support it because I think clarity is 
to be greatly sought and prized here.
    I want to explore another area which relates to a letter 
that I received from a Connecticut radio station, WGCH, in 
Greenwich. A local owner of that radio station, Rocco Forte, 
wrote to me regarding notification he received from Verizon 
that Verizon Legacy Services provided to the station would be 
immediately terminated in 90 days and that the station must 
find alternative service options. And he was upset, 
understandably, that his other options cost 2.5 times what the 
station currently pays and also would take weeks to install.
    WGCH is a station that serves more than a million people 
with information that they need and deserve on emergencies, 
severe weather, catastrophes, and listeners rely on that 
service. So as IP transition moves forward and more legacy 
providers go through this process of obtaining permission for 
the Commission to discontinue existing services in favor of 
newer technologies and more and more consumers receive these 
kinds of notices of discontinuance, I want to make sure that 
there are sufficient protections for consumers.
    Mr. Chairman, Chairman Wheeler, I understand the Commission 
is committed to making sure that consumers are properly 
informed but I'd also like to know what the Commission is doing 
to ensure that consumers have recourses and enforceable 
standards so they're not literally, like WGCH, cutoff from 
service in the process.
    Mr. Wheeler. Yes, sir.
    We have just finished the comment period on a rulemaking on 
this issue. We shorthand call it ``Copper Retirement,'' and 
there are three principles. The first principles is a public 
safety principle: you can't negatively effect the ability of 
people to call 9-1-1. And interestingly enough, when you go to 
fiber, that becomes a real issue because fiber doesn't have 
power that comes with it. So how are you going to deal with 
that in a power outage situation?
    Second is that the consumers needs to know what's going on. 
So there has to be transparency. None of this, ``Surprise, 
we're going to be changing things,'' which is kind of like, 
sounds like the story you're talking about.
    And third is that small and medium operators like your 
medium companies like you're talking about, need to continue to 
have competitive choices. And so, we've teed up all three of 
those questions in this rulemaking, and we'll be wrestling with 
bringing them forward in an order. But you've put your finger 
on a very important issue.
    Senator Blumenthal. And what will be the timing for that?
    Mr. Wheeler. I hope to be able to work with all of my 
colleagues to deliver that, you know, sometime around football 
season, shall we say. I'll give myself a little leeway there.
    Senator Blumenthal. Great.
    Mr. Wheeler. We take this quite seriously.
    Senator Blumenthal. I want to just conclude on the subject 
that I raised during the end of my last question. It seems to 
me one of the brightest areas, one of the most promising areas 
in the video marketplace these days, seems to be the 
flexibility offered to consumers by online video services. And 
I'm talking about Netflix, Amazon Prime, AppleTV.
    Just yesterday, as you may know, The Wall Street Journal 
reported that Apple is in talks with TV networks to offer a 
less expensive slimmed down service, a bundle of 25 channels 
this fall, but here's the comment that struck me and I'm 
quoting: ``For now, the talks don't involve NBCUniversal, owner 
of the NBC Broadcast Network and cable channels like USA and 
Bravo, because of a falling-out between Apple and NBCUniversal 
parent company Comcast Corporation, the people familiar with 
the matter said.''
    I'm concerned about competition among broadband providers. 
I think that concern about anti-competitive behavior is real, 
as the quote indicated. These companies that offer new 
services, new competition, require a high-speed Internet access 
to reach their customers and that risk of anti-competitive 
behavior is one of the reasons that I've raised concern about 
the Comcast merger that we've discussed with Time Warner. And, 
in fact, if I may quote you, you said: ``the underpinning of 
broadband policy today is that competition is the most 
effective tool for driving innovation, investment, and consumer 
and economic benefits. Unfortunately, the reality we face today 
is that as broadband increases competitive choice decreases.''
    My time has expired, perhaps gratefully in your view, but I 
just want to invite your comment if you have any other comments 
or from other members of the Commission, because I think that 
central principle and goal of competition is so important. I 
know that you can't comment on the merger, I'm not asking you 
to, but if you or any of your colleagues has a comment on this 
general area, I would welcome it.
    Mr. Wheeler. Yes, I have opinions. I know that I will 
surprise you, but I will look down the table to see if 
anybody--I don't want to hog this. Does anybody want to? 
Jessica?
    Ms. Rosenworcel. Sure.
    Television is going to change more in the next couple of 
years than it has over the last several decades. We all now 
want to watch what we want to watch when we want to watch it on 
any screen handy. And I think the Commission, going forward, 
needs to be mindful of all of these new services and help find 
ways to make them successful so that consumers have more choice 
and that there's more competition in the provision of video 
services.
    Mr. Wheeler. I have heard from so many of the Members of 
this Committee about cable pricing and these kinds of things. 
The answer is in competition. That competition is coming over-
the-top. It is coming over-the-top through the Internet. It is 
one of the reasons why there has to be an open Internet because 
historically cable systems have chosen who will be on. I will 
take this service, not that service. And we cannot be in that 
kind of a situation if we want to have true video competition.
    Senator Blumenthal. Thank you.
    The Chairman. Thank you, Senator Blumenthal.
    Senator Markey.
    Senator Markey. Thank you, Mr. Chairman, very much.
    May I ask you, Mr. Chairman, did the FCC follow the 
processes used by both Democratic and Republican Commissions 
when crafting these latest net neutrality rules?
    Mr. Wheeler. Yes, sir.
    Senator Markey. Hmm. These are tough decisions. So it's a 
process, though. And out of the process came a decision that I 
agree with. I think it's an historically correct decision but I 
don't think there should be a question about whether or not you 
use the process that allowed all voices to be heard. And the 
final vote, three to two, three to two is based upon the 
totality of everything that all five of you had the opportunity 
to hear. Three to two. But the process gave everyone the 
ability to be able to hear what they needed to hear.
    OK? And I think you made just the right decision. And I 
think you made the right decision looking at the whole history 
of the FCC, and what you've done for our country. Back in the 
1970s, you know, the CEO of Sprint and MCI came into my office 
and they had less than one-half of one-half of one-half of 1 
percent of the market. And they wanted the FCC to change the 
rules so you didn't have to dial 23 numbers before you dialed 
the number your mother made you memorize in case you're ever in 
a car accident.
    [Laughter.]
    Senator Markey. And that's what created those industries. 
The FCC is saying, ``No, competition.'' You know the FCC passed 
the rules and said, ``No, a cable company doesn't have to put 
up a separate pole down these streets. You can use the 
telephone pole and pay a reasonable fee to do so. We don't want 
the whole street filled up with just poles, huh?''
    It was reasonable. It added to the competition. AT&T didn't 
want to be broken up, you know, but we all had black rotary 
dial phones. You can't just stay there forever. We're already a 
hundred years into that era at that point. Got to move on. It's 
all about competition. It's all about innovation.
    When you did the light touch on wireless, 1993, the FCC 
using Title II was all intended on unleashing hundred and 
hundreds of billions of dollars of new investment. It worked. 
The FCC made the right decision. You're the agency of 
expertise.
    When we created the third, fourth, fifth, sixth, seventh 
cell phone license, the reason we had to do it was the first 
two companies had monopolies charging 50 cents a minute and the 
phone was the size of a brick and nobody had one. That's 1993. 
That's 1994. People have two devices in their pockets, but the 
FCC made the right decision to advance competition. That's what 
this is all about.
    The cable industry did not want AT&T and the telephone 
companies to get into cable. They wanted the monopoly. AT&T did 
not want the cable industry to be able to find telephone 
service. Right? They all fought. These are big players here. 
Big players, and I understand it. Big players don't want little 
people coming in ruining this nice little world that they have 
going.
    And even the decision you just made on municipal 
broadbands, that's just saying to individual communities all 
across the country, you can't provide competition. And that's a 
three to two decision here. Three to two, three to two, three 
to two. I understand. I understand the Commissioners that vote 
no. These are tough issues. There were tough issues on allowing 
MCI and Sprint to be born back in the 1970s. Tough decisions 
because you're taking on the monopolies, you're taking on the 
big companies.
    So we're at crossroads here where the innovation, the 
investment dollars, the creativity, the content creators are 
not the big companies, they're thousands of little companies 
that all benefit from net neutrality. You got it just right. 
It's the heart of our economy. It's where young people want to 
go, of all races. It's where the venture capitalists are 
putting their money.
    And as you correctly pointed out, all these companies then 
reported within days after you passed this rule that it wasn't 
going to effect their long-term investment in their 
infrastructure going forward. They all said the exact same 
thing. But you know what else happened? All over the country, a 
whole bunch of people between the ages of 20 and 35 all said, 
``This is great. I got new apps; I got new technologies; I have 
new services; I have new stuff. I can now reach 310 million 
Americans.''
    And as soon we do that in America and come up with the 
idea, then we're selling it across the world branded ``Made In 
America.'' It's these new companies that make the difference. 
And just like Sprint and MCI all the way through today, that's 
what the FCC is all about. And you're the agency of expertise 
and you've used this existing framework brilliantly over the 
years. Brilliantly.
    And I think you got it right again. And I think it would be 
ill-advised for the Congress to move in and try to be the 
agency of expertise when there is now a consensus that it's 
already been built by the statements of the largest companies 
that they can live with it; that they'll invest at the same 
pace but the enthusiasm that comes from these smaller software 
apps companies, the new Internet startups has just been 
overwhelming.
    So I just say this to put in context the whole history of 
how far we've come in a brief period of time. You don't have 
to, when a long distance phone call comes into your house, any 
longer yell, ``Hurry, hurry. It's a long distance call.''
    AT&T had charged two bucks a minute for a hundred years 
because they could get away with it. OK? And what we're doing 
here is we are not letting people get away with saying, ``No.'' 
There's another way of doing business. That's what net 
neutrality under Title II makes possible for our country.
    And I thank you so much for your good----
    The Chairman. I thank the Senator from Massachusetts. I 
assume there wasn't a question in there.
    [Laughter.]
    Senator Markey. There was and, in fact, the first question 
was to the Commissioner, and he answered.
    The Chairman. That's OK. You don't have to ask.
    [Laughter.]
    Senator Markey. It was the leading question but it was a 
question.
    The Chairman. And mark the Senator from Massachusetts down 
as undecided on our draft bill.
    [Laughter.]
    The Chairman. I want to, just in terms of FCC 
reauthorization, very quickly, it got asked once before and a 
couple of you responded to it, but I want to ask the question 
of all the Commissioners. Is that something you think we ought 
to do? Is it time to reauthorize the FCC?
    Mr. Wheeler. That's a decision that you make. The Congress 
has made the decision not to thus far. If you want to change 
that decision, you're the Congress you make the rules.
    Ms. Rosenworcel. I agree. That's up to Congress, but I also 
agree that it's always good to review Federal agencies and 
practices.
    Mr. Pai. Yes.
    Mr. O'Rielly. It's Congress's decision but I do agree. It's 
time to move forward with something.
    Ms. Clyburn. I yield to the expert body.
    Senator Markey. Mr. Chairman, can I say? Twenty-five years 
is a long time.
    The Chairman. It is.
    Your hair was a different color back then.
    [Laughter.]
    The Chairman. And very quickly, one reform that you would 
recommend that we make, or a top reform, as you think about FCC 
reauthorization? Any come to mind?
    Mr. O'Rielly. I have put a number on the table already and 
talked about them in my statement. But one that I haven't 
talked about that I think there's a need to have an 
accountability of our enforcement procedures. We issue a number 
of NALs and in judgments in that case, but there's no actual 
tracking of what actually happens to the money. Are we actually 
getting the money that we're actually, you know, assigning 
penalties for, and I think that that will be very helpful. I 
tried to get the material for this hearing and the information 
just came back, well, we don't track that. I just think there's 
something wrong.
    We should know that if we're penalizing somebody is it 
actually being paid, you know, what is the ramifications for 
this? So that's one thing I would add to the multiple layers 
I've already talked about.
    Ms. Clyburn. And I have been talking about this for a 
number of years. But Sunshine Act Reform, it makes our 
deliberative process a bit cumbersome particularly as it 
relates to the joint board and conference. And so, Sunshine Act 
reform would be top of my list.
    Mr. Pai. I will say in addition to the proposals in the 
Process Reform Act and Consolidated Reporting Act, I would add 
reform of Section 5 of the Communications Act to ensure that 
the full commission has an opportunity to weigh in on serious 
and substantial policy questions, which current are often 
resolved on delegated authority by the bureaus.
    Ms. Rosenworcel. I think we need a program to bring in more 
engineers. We have more wireless technologies evolving faster 
than at any point in human history. And I think that if we were 
able to bring in more engineers to review some of those new 
technologies and equipment authorizations, which are 
multiplying, we would be a lot faster at making sure that 
innovation makes its way to the marketplace.
    Mr. Wheeler. I think this is a series of good ideas and I'd 
like to be much more forthcoming and more detailed in a 
response with a laundry list, sir.
    The Chairman. Okay. All right.
    Well, look, it has been a long day. I appreciate your 
indulgence. I would just say, in closing, I think the issues 
that we've discussed and debated today, you can tell there are 
strong feelings about. I still believe, maintained for a long 
time, that we're better served in the long run if we can 
provide clear rules for the road. And I think clear direction 
of the FCC but limited, tailored, to me, is a better way to 
approach the issue of how best to achieve an open Internet. 
And, as I mentioned before, we've got a bill with Senator 
Nelson and others on the Committee about it.
    I would hope, going forward, that the Commission could play 
a constructive role, not discourage us from legislating but 
perhaps be helpful if we decide to do something that would put 
something in statute that I think, again, addresses the issue 
of uncertainty and lawsuits which is going to plague, I think, 
this order for some time to come, that you all could play a 
contributing role to that and not work against that.
    Mr. Wheeler. Can I just be supportive of those comments, 
sir? I think we're in a situation of we will, we will provide 
you whatever expertise that we can including from different 
points of view. And this is going to be a classic situation of 
we'll report and you decide.
    The Chairman. OK.
    Senator Nelson. And I've asked that question as well of the 
Chairman. And he has assured me that he will. My sense is, as a 
result of what we've heard today from the five commissioners, 
is that we're going to have to let this percolate a bit before 
we can actually sit down and have this consensus-building that 
you and I are talking about.
    The Chairman. OK.
    With that, the hearing record will remain open for two 
weeks, during which time the Senators are asked to submit any 
questions for the record. Upon receipt, the witnesses are 
requested to submit their written answers to the Committee as 
soon as possible.
    I thank the panel. This hearing is adjourned.
    [Whereupon, at 6:10 p.m., the hearing was adjourned.]

                            A P P E N D I X

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                                   February 2, 2015
Via Electronic Filing

Chairman Thomas Wheeler,
Commissioner Mignon Clyburn,
Commissioner Jessica Rosenworcel,
Commissioner Ajit Pai,
Commissioner Michael O'Rielly,
Federal Communications Commission,
Washington, DC.

Re: In the Matter of Rules and Regulations Implementing the 
  Telephone Consumer Protection Act of 1991, CG Docket No. 
                                                     02-278

Dear Chairman Wheeler and Commissioners Clyburn, Rosenworcel, Pai, and 
O'Rielly:
    The undersigned trade associations and business groups, 
representing hundreds of thousands of U.S. companies and organizations 
from across the U.S. economy, strongly urge the Federal Communication 
Commission (``FCC'' or ``Commission'') to expeditiously address the 
issues raised in the numerous petitions that have been and continue to 
be filed with the Commission regarding the Telephone Consumer 
Protection Act (``TCPA''). Given that compliance-minded organizations 
in a variety of sectors are being dragged into court and strong-armed 
into large settlements on an almost daily basis under the TCPA, for 
actions that do not remotely threaten the privacy interests that the 
statute was intended to protect, regulatory relief by the Commission is 
desperately required. We ask for clarification from the FCC to help 
curb abusive lawsuits that likely harm consumers overall.
I. Consumer Use of Wireless Phones is Vastly Different Than When the 
        TCPA Was Enacted Almost 25 Years Ago
    In response to complaints about unwanted telemarketing telephone 
calls, especially during dinner time, Congress passed the TCPA in 1991. 
It includes a provision that prohibits the use of ``automatic telephone 
dialing systems'' (a term defined by Congress with specific elements)--
instead of manual dialing--or an artificial or prerecorded voice under 
certain circumstances when calling a wireless telephone.
    When the TCPA was enacted over two decades ago, wireless telephones 
were a luxury item, charges for receiving calls on a wireless telephone 
were prohibitively expensive, and the landline telephone was the 
dominant consumer telecommunications device. However, as the Commission 
itself has acknowledged, ``wireless use has expanded tremendously since 
the passage of the TCPA in 1991.'' \1\ Today, 90 percent of Americans 
own wireless telephones \2\ and 58.8 percent of households are entirely 
or predominantly ``wireless-only.'' \3\ Moreover, the number of 
``wireless-only'' households grew by 3 percent between the second half 
of 2013 and the first half of 2014, the largest 6-month increase since 
2010, and there are five demographic groups in which the majority live 
in households with only wireless telephones.\4\ Certain parts of the 
country also have a particularly high number of wireless-only 
households.\5\ Furthermore, many consumers today have calling plans 
that provide unlimited minutes, making use of wireless telephones 
inexpensive as well as convenient for the general public.
---------------------------------------------------------------------------
    \1\ Rules and Regulations Implementing the Telephone Consumer 
Protection Act of 1991, 27 FCC Rcd 1830,  29 (2012) (``2012 TCPA 
Order'').
    \2\ Pew Internet Project, Mobile Technology Fact Sheet, Pew 
Research Center (2014), available at http://www.pewinternet.org/fact-
sheets/mobile-technology-fact-sheet/.
    \3\ Stephen J. Blumberg & Julian V. Luke, Div. of Health Interview 
Statistics, Nat'l Ctr. for Health Statistics, Centers for Disease 
Control and Prevention, Wireless Substitution: Early Release of 
Estimates From the National Health Interview Survey, January-June 2014, 
at 1 (Dec. 16, 2014) (``CDC Wireless Substitution Estimates''), 
available at http://www.cdc.gov/nchs/data/nhis/earlyrelease/
wireless201412.pdf.
    \4\ Id. at 2; those demographic groups are adults aged 18-44, 
adults living only with unrelated adult roommates, adults renting their 
home, adults living in poverty or near poverty, and Hispanic adults.
    \5\ Id. at 7. See also, Wireless-only Voice Households by State, 
2012, Wireless Competition Bureau, FCC (rel. Jan. 7, 2015), available 
at http://transition.fcc.gov/Daily_Releases/Daily
_Business/2015/db0107/DOC-331388A1.pdf.
---------------------------------------------------------------------------
    Compared to 1991, organizations today--including many small 
businesses--use efficient, automated technologies to place a variety of 
time-sensitive, non-telemarketing calls. Unfortunately, due to a lack 
of clarity under the TCPA, these important communications are 
increasingly being chilled, organizations making the calls are 
increasingly being subjected to frivolous litigation, and consumers are 
increasingly missing important communications. This situation has a 
disproportionately negative impact on lower-income households, 
particular age groups, and residents located in certain parts of the 
United States.\6\
---------------------------------------------------------------------------
    \6\ According to estimates from the CDC, 59.1 percent of 
individuals living in ``Poor'' households and 50.8 percent of 
individuals living in ``Near-poor'' households live in wireless-only 
households. Comparatively, only 40.8 percent of individuals living in 
``Not-poor'' households live in wireless-only households. CDC Wireless 
Substitution Estimates at 6.
---------------------------------------------------------------------------
II. Regulatory Clarity Regarding the TCPA is Desperately Needed
    While the wireless marketplace and consumer use of this technology 
have rapidly evolved, the TCPA has not changed and the FCC's 
regulations have not kept pace. There is, unfortunately, a tsunami of 
class action TCPA lawsuits driven not by aggrieved consumers, but by 
opportunistic plaintiffs' firms taking advantage of uncertainty in the 
law to rake in attorney fees. As the immense record before the 
Commission details, TCPA lawsuits against businesses and other entities 
are skyrocketing. TCPA litigation grew by 560 percent between 2010 and 
2014.\7\
---------------------------------------------------------------------------
    \7\ Debt Collection Litigation & CFPB Complaint Statistics, 
December 2014 & Year in Review, WebRecon LLC (Jan. 22, 2015), available 
at http://dev.webrecon.com/debt-collection-litigation-cfpb-complaint-
statistics-december-2014-and-year-in-review/.
---------------------------------------------------------------------------
    The law is being abused through litigation theories never intended 
by Congress. For example, some plaintiffs contend that any system 
(whether or not it is actually an ``automatic telephone dialing 
system'' as defined by the statute) triggers TCPA liability under the 
perplexing theory that even a system that is not automatic could be 
modified to later become automatic, hypothetically sometime in the 
future. Others contend that a system need not even have the statutory 
elements of an ``automatic telephone dialing system'' to be an 
``automatic telephone dialing system'' under the statute. This cannot 
be what Congress intended.
    The defendants in these cases are no longer just the telemarketers 
that Congress targeted; they are businesses, big and small alike, 
forced to choose between settling the case or spending significant 
money defending an action where the alleged statutory damages may be in 
the millions, or even billions, of dollars. Further, many of these 
companies are being sued for reasons outside of their control, such as 
dialing a number provided by a customer that was later reassigned to 
another party.
    The wide-spread litigation and the specter of devastating class 
action liability has or may spur some businesses and organizations to 
cease communicating important and time-sensitive non-telemarketing 
information via voice and text to the detriment of customers, clients, 
and members. Without FCC action, consumers may not, for example, be 
timely informed of options to avoid a foreclosure, going into 
collection, a bad credit rating, or confiscation of property; receive 
notice of payments due and other billing issues; receive basic 
requested information ranging from time-sensitive prescription refill 
reminders and other healthcare notifications to the details of a money 
transfer and other financial transactions; or receive information 
specifically requested by the consumer through an on demand text. The 
benefits of these services cannot be overstated-in the student loan 
market, it is estimated that 1 million or more borrowers each year will 
``time out'' and default on their student loans, in large part because 
their servicers cannot efficiently reach them on their wireless 
devices.\8\ By helping to keep individuals current on their payments, 
or, at least, preventing their debt from spiraling out of control, 
these types of communications have the ability to lower costs for 
consumers.
---------------------------------------------------------------------------
    \8\ Judy Xanthopolous, Modifying the TCPA to Improve Services to 
Student Loan Borrowers and Enhance Performance of Federal Loan 
Portfolios, Quantria Strategies, LLC, 10 (Jul. 2013), available at 
http://c.ymcdn.com/sites/www.ncher.us/resource/collection/A593D8BC-
DA09-45BB-8A2D-EDD4E0889108/QuantriaStudyreTCPA-July2013.pdf.
---------------------------------------------------------------------------
    The undersigned groups ask for clarification from the FCC so that 
the statute is applied in the manner that Congress intended, as 
expressed through the specific language Congress enacted. As reflected 
in the record before the FCC, the requested clarifications will neither 
``gut'' the TCPA nor ``open the floodgates'' to abusive calls. The 
clarifications will, however, curb abusive lawsuits that ultimately are 
likely to harm consumers overall. We urge the Commission to modernize 
its TCPA implementation by providing commonsense clarifications and 
necessary reforms to facilitate the delivery of time-sensitive consumer 
information to mobile devices while continuing to protect consumers 
from unwanted telemarketing calls.\9\
---------------------------------------------------------------------------
    \9\ We recognize that the Commission has exempted certain 
categories of calls to wireless numbers that are ``not charged to the 
called party.'' See Cargo Airline Association Petition for Expedited 
Declaratory Ruling, Rules and Regulations Implementing the Telephone 
Consumer Protection Act of 1991, Order, 29 FCC Rcd 3432  20 (2014). 
But ``free to end user'' is not the solution, particularly outside of 
the context of text notifications; no such program for uncharged voice 
calls to wireless phones exists now in the marketplace, and many 
communications (such as healthcare calls to elderly patients) can only 
be delivered by voice communications, not texts.
---------------------------------------------------------------------------
III. Conclusion
    By addressing the important issues raised in the pending TCPA-
related petitions, the Commission can help curtail abusive lawsuits 
that will likely lead to increased costs for consumers, provide 
American businesses with desperately needed certainty, and ensure that 
businesses maintain the ability to communicate in an efficient manner 
that best meets the demands of their customers, while at the same time 
preserving the important goals of the TCPA. The FCC, as an expert 
agency, must recognize that the world has changed significantly since 
1991 and it is time for the FCC to clarify and modernize its TCPA rules 
to reflect the realities of today.
            Sincerely,

American Association of Healthcare Administrative Management (AAHAM)

ACA International

American Council of Life Insurers (ACLI)

American Financial Services Association (AFSA)

American Insurance Association (AIA)

Child Support Enforcement Council (CSEC)

Coalition of Higher Education Assistance Organizations (COHEAO)

Computer & Communications Industry Association (CCIA)

Consumer Bankers Association (CBA)

DBA International

Education Finance Council (EFC)

Independent Bankers Association of Texas (IBAT)

Marketing Research Association (MRA)

Mobile Marketing Association (MMA)

National Association of Chain Drug Stores (NACDS)

National Association of College and University Business Officers 
(NACUBO)

National Association of Manufacturers

National Association of Mutual Insurance Companies (NAMIC)

National Association of Retail Collection Attorneys (NARCA)

National Association of Student Financial Aid Administrators (NASFAA)

National Cable & Telecommunications Association

National Council of Higher Education Resources (NCHER)

National Restaurant Association

National Retail Federation (NRF)

National Rural Electric Cooperative Association (NRECA)

Professional Association for Customer Engagement (PACE)

Retail Industry Leaders Association (RILA)

Satellite Broadcasting & Communications Association (SBCA)

Silver Users Association

State Creditor Bar Associations \10\
---------------------------------------------------------------------------
    \10\ Creditor's Attorney Association of Alabama; Alaska Creditor 
Bar; Arizona Creditor Bar Association, Inc.; Arkansas Creditors Bar 
Association, Inc.; California Creditors Bar Association; Colorado 
Creditor Bar Association, Inc.; Connecticut Creditor Bar Association; 
Florida Creditors Bar Association, Inc.; Collection Law Section of the 
Hawaii State Bar Association; Illinois Creditors Bar Association; 
Maryland-DC Creditors Bar Association; Minnesota Creditors Rights 
Association; Missouri Creditor Bar Inc.; New Jersey Creditors Bar 
Association; Consumer Credit Association of Metropolitan New York; 
Commercial Lawyers Conference of New York; The Creditor's Rights 
Attorneys Association of Nevada; North Carolina Creditors Bar 
Association; Pennsylvania Creditors' Bar Association; Tennessee 
Creditors Bar Association; Texas Creditor's Bar Association; Wisconsin 
Creditors' Rights Association, Inc.

---------------------------------------------------------------------------
Student Loan Servicing Alliance (SLSA) & SLSA Private Loan Committee

Telecommunications Risk Management Association (TRMA)

U.S. Chamber of Commerce

U.S. Chamber Institute for Legal Reform

Virginia Small Business Partnership
                                 ______
                                 
                                                       VCXC
                                     Washington, DC, March 17, 2015

Committee on Commerce, Science, and Transportation,
Russell Senate Office Building 254,
Washington, DC.

Committee on Energy and Commerce,
2125 Rayburn House Office Building,
Washington, DC.

Dear Senators Thune, Nelson, Wicker, Shatz and Representatives Upton, 
            Pallon, Walden, Eshoo:

    Thank you for arranging for the testimony of the Federal 
Communication Commission regarding the February 26, 2015 approval of 
the Open Internet Order. Please consider including the following 
questions:

   1.  Do you think the Internet would have been more successful under 
        a Title II regime?

   2.  Why does the Commission redefine Public Switched Network (PSN) 
        to encompass both the telephone network and the Internet ?

   3.  In what sense do you believe there exists an equivalence between 
        telephone numbers and IP addresses that justifies the 
        Commission regulating the Internet and telephone network as a 
        single network?

   4.  When did Congress extend Federal Communication Commission 
        authority over computer networks?

   5.  What principle does the Commission include that limits the Order 
        to ``communication'' issues?

   6.  Are you aware bringing all public IP addresses into the 
        definition of Public Switched Network increases by at least a 
        factor of 10 the segment of the economy under Commission 
        jurisdiction?

   7.  The Order identifies use of discretionary forbearance, but does 
        the Order identify the limit of Commission discretionary 
        authority?

   8.  Can you think of an example that falls outside Commission 
        authority to ``tailor'' and ``modernize'' the Communication Act 
        of 1934 that requires Congressional intervention?

   9.  What percentage of Internet transactions over the last decade do 
        you suspect suffer the types of violations of open Internet 
        principles the Commission seeks to address in the Order?

  10.  What can you point to as the contributions of the Federal 
        Communication Commission to the expansion of the Internet over 
        the last 20 years?

  11.  What percentage of Commission staff do you consider expert on 
        Internet issues, and do you anticipate the need to expand 
        Commission staff in support of implementing the Order?

  12.  Can you name three successful start-up's relying on Commission 
        exercise of Title II authority?

  13.  Can you make a no new taxes pledge to the communicating public 
        with regard to the reclassification of Broadband Internet 
        Access Service as a Title II service.

    Please include this letter a part of the committees' respective 
oversight hearing records.
            Sincerely,
                                          Daniel Berninger,
                                                           Founder,
                                                                  VCXC.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
                            Hon. Tom Wheeler
    Question 1. Under the reasoning adopted in the Open Internet Order, 
should a dial-up Internet service provider (ISP) also be classified as 
a common carrier? Does a dial-up ISP perform any functions different 
than, or in addition to, those the FCC attributes to a BIAS provider 
that would enable the FCC to classify the dial-up ISP as an information 
service provider? If so, what are those functions? Do you think 
classification of a dial-up ISP as a common carrier was something that 
anyone anticipated in 1996?
    Answer. The Open Internet Order does not address the classification 
of dial-up Internet access service. The scope of the Open Internet 
Order is Broadband Internet Access Service, which is defined as ``a 
mass-market retail service by wire or radio that provides the 
capability to transmit data to and receive data from all or 
substantially all Internet endpoints, including any capabilities that 
are incidental to and enable the operation of the communications 
service, but excluding dial-up Internet access service.'' \1\ This 
comes from the definition the Commission adopted in 2010. The 2010 Open 
Internet Order noted that the market and regulatory landscape for dial-
up Internet access service differed from broadband Internet access 
service.\2\
---------------------------------------------------------------------------
    \1\ Protecting and Promoting the Open Internet, GN Docket No. 14-
28, Report and Order on Remand, Declaratory Ruling, and Order, FCC 15-
24, para. 25 (rel. Mar. 12, 2015) (Open Internet Order).
    \2\ Preserving the Open Internet, GN Docket No. 09-191, WC Docket 
No. 07-52, Report and Order, 25 FCC Rcd 17905, 17932, para. 44, 17935, 
para. 51 (2010) (2010 Open Internet Order), aff'd in part, vacated and 
remanded in part sub nom. Verizon v. FCC, 740 F.3d 623 (D.C. Cir. 
2014).

    Question 2. Under the Computer Inquiry rules, the FCC determined 
that the transmission component of wireline broadband service was 
limited to a connection between the customer and the ISP, and did not 
include any connections between the ISP and the rest of the Internet. 
How does the FCC justify adopting a more expansive classification in 
the Open Internet Order, which includes every ISPs' connection with the 
rest of the Internet as a subsidiary part of the common carrier service 
sold to the end user?
    Answer. Consistent with Supreme Court precedent, the Open Internet 
Order applies the 1996 Act to broadband Internet access service based 
on record evidence about how that service exists and is offered today. 
The Commission's Computer Inquiry proceeding drew a line between (1) 
basic services, which were subject to common carrier regulation; and 
(2) enhanced services, which were not. The 1996 Act effectively tracked 
that distinction in its definitions of ``telecommunications'' and 
``information'' services. The Supreme Court in the Brand X case held 
that those terms are ambiguous with respect to their application to 
cable modem service and that the Commission is entitled to deference in 
its interpretation and application of those terms.\3\ In the Open 
Internet Order, the Commission exercised its authority, upheld by the 
Supreme Court in Brand X, to interpret the 1996 Act based on the 
current facts in the record about how broadband is offered today.
---------------------------------------------------------------------------
    \3\ Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 
U.S. 967, 980-81 (2005) (Brand X).
---------------------------------------------------------------------------
    With respect to broadband providers' interconnection (also called 
Internet traffic exchange) practices, the D.C. Circuit in Verizon v. 
FCC recognized that broadband providers have ``gatekeeper'' control 
over the flow of content.\4\ Interconnection is simply the operation of 
the gate. The Open Internet Order explains that broadband Internet 
access service providers' interconnection arrangements are implicit in 
the provision of retail broadband service that offers consumers access 
to the entire Internet and, in any event, are provided for and in 
connection with that service.\5\ Thus, the Commission concluded that 
``disputes involving a provider of broadband Internet access service 
regarding Internet traffic exchange arrangements that interfere with 
the delivery of a broadband Internet access service end user's traffic 
are subject to our authority under Title II of the Act.'' \6\
---------------------------------------------------------------------------
    \4\ Verizon,740 F.3d 623, 646 (D.C. Cir. 2014).
    \5\ Open Internet Order at para. 204.
    \6\ Open Internet Order at para. 204.

    Question 3. The definition of ``information service'' was based 
largely on the definition that applied to the Bell Operating Companies 
under the Modified Final Judgment (MFJ) following divestiture. In 
United States v. Western Elec. Co., 673 F. Supp. 525, 587-97 (D.D.C. 
1987), aff'd in part, rev'd in part, 900 F.2d 283 (D.C. Cir. 1990), the 
MFJ court determined that gateway services constituted information 
services ``under any fair reading'' of the definition. How would you 
distinguish Internet access service as offered today from those 
services that the MFJ found to fall unambiguously within the definition 
of Internet access?
    Answer. The Open Internet Order properly relies on law and facts 
that supersede the AT&T Modified Final Judgment, instead applying 
statutory terms from the 1996 Act to broadband as it exists and is 
offered today. The Supreme Court in Brand X held that the relevant 
statutory terms were ambiguous as to the provision of cable modem 
service and that the Commission is entitled to deference in its 
interpretation and application of those terms. In the Open Internet 
Order, the Commission exercised its authority to interpret ambiguous 
terms in the statute and found, based on the record, that broadband 
Internet access service today is best understood as including a 
telecommunications service offering.

    Question 4. On June 8, 2011, NCTA and COMPTEL filed a petition for 
reconsideration seeking modification of the pole attachment rules to 
ensure equal treatment of cable operators and telecommunications 
carriers. Will you commit to ensuring that this petition is resolved 
before the Open Internet Order takes effect? If not, please explain why 
the FCC would require more than four years to address this petition.
    Answer. As I recently told participants at NCTA's Internet & 
Television Expo, I am committed to ensuring that cable operators do not 
confront excessive rates for pole attachments. On May 6, 2015, the 
FCC's Wireline Competition Bureau issued a short public notice to 
refresh the record on the pending NCTA and COMPTEL petition for 
reconsideration seeking to bring cable and telecommunications rates 
into closer alignment. Once the record is refreshed, my expectation is 
that a recommendation to the full Commission to bring the rates into as 
close alignment as the Communications Act allows will be forthcoming.

    Question 5. The FCC and state utility commissioners long ago 
recognized that, if utility-style regulation applies to Internet access 
service, ``it would be difficult to devise a sustainable rationale 
under which all. . .information services did not fall into the 
telecommunications service category.'' \7\ Do you agree with that 
previous Commission finding?
---------------------------------------------------------------------------
    \7\ Federal-State Joint Board on Universal Service, Report to 
Congress, 13 FCC Rcd 11501, para. 57 (1998).
---------------------------------------------------------------------------
    Answer. The statement quoted in your question comes from the 1998 
Stevens Report, which was a report to Congress concerning the 
implementation of universal service mandates, and not a binding 
Commission Order classifying broadband Internet access services. In any 
event, the Commission did not find in the Stevens Report that broadband 
Internet access service--in the form it is offered today--was an 
information service. When the Commission issued that report, in 1998, 
broadband Internet access service was at ``an early stage of deployment 
to residential customers'' and constituted a tiny fraction of all 
Internet connections.\8\ Virtually all households with Internet 
connections used traditional telephone service to dial-up their 
Internet Service Provider (ISP), which was typically a separate entity 
from their telephone company.\9\ The Stevens Report reserved judgment 
on whether entities that provided Internet access over their own 
network facilities were offering a separate telecommunications 
service.\10\ The Commission further noted that ``the question may not 
always be straightforward whether, on the one hand, an entity is 
providing a single information service with communications and 
computing components, or, on the other hand, is providing two distinct 
services, one of which is a telecommunications service.'' \11\ The Open 
Internet Order concluded, based on a current record, that broadband 
Internet access service today includes a separable telecommunications 
service offering.
---------------------------------------------------------------------------
    \8\ See Inquiry Concerning the Deployment of Advanced 
Telecommunications Services to All Americans in a Reasonable and Timely 
Fashion, and Possible Steps to Accelerate Such Deployment Pursuant to 
Section 706 of the Telecommunications Act of 1996, CC Docket No. 98-
146, Report, 14 FCC Rcd 2398, 2446, para. 91 (1999); Ind. Anal. & Tech. 
Div., Wireline Comp. Bur., Trends in Telephone Service, 2-12, chart 
2.10, 16-3, Tbl. 16.1 (Aug. 2008).
    \9\ See Stevens Report, 13 FCC Rcd 11501, 11540, para. 81.
    \10\ Stevens Report, 13 FCC Rcd at 11530, para. 60 (``[T]he matter 
is more complicated when it comes to offerings by facilities-based 
providers.''), 11535 n.140 (``We express no view in this Report on the 
applicability of this analysis to cable operators providing Internet 
access service.'').
    \11\ Id., 13 FCC Rcd at 11530, para. 60.

    Question 6. Under the FCC's Open Internet Order rationale, why are 
the services provided by content distribution networks (CDNs) not 
classified as telecommunications services? Do they not just transmit 
information? How are the information processing, retrieval and storage 
functions of CDN services different from the information functions that 
are provided as part of broadband Internet access services?
    Answer. The scope of the Open Internet Order is broadband Internet 
access services, which do not include content delivery networks 
(CDNs).\12\ As the Order explained, ``The Commission has historically 
distinguished these services from `mass market' services and, as 
explained in the 2014 Open Internet NPRM, they do not provide the 
capability to transmit data to and receive data from all or 
substantially all Internet endpoints. \13\
---------------------------------------------------------------------------
    \12\ Open Internet Order at para. 340.
    \13\ Id. (internal quotation marks omitted).

    Question 7. The FCC's Fiscal Year 2016 budget submission 
distinguishes between full time equivalent positions (FTEs) supported 
by regulatory fees and FTEs supported by auction revenues. What will 
happen to auction-funded FTEs once the broadcast incentive auction is 
complete? Because no other substantial auctions are currently expected, 
will there be a reduction in the number of FTEs supported by auction 
revenues in the coming years? How many FTEs funded by the Spectrum 
Auctions Program work primarily in the FCC headquarters at the Portals? 
Do any FTEs funded by the Spectrum Auctions Program work at other FCC 
facilities, and if so, how many and at which facilities?
    Answer. After the broadcast incentive auction is complete, any term 
spectrum auction funded FTEs to support the broadcast incentive auction 
will be terminated and the total number of spectrum auction funded FTEs 
is likely to decrease in number, provided that additional spectrum 
auction activity is reduced. The total number of Spectrum Auction 
Program FTEs at September 30, 2014 was 216. Of this number, 
approximately 201 FTEs worked primarily in the FCC headquarters at the 
Portals. Approximately 15 FTEs worked at the Gettysburg facility. No 
other FTEs worked on the Spectrum Auctions Program at any other 
facility other than the headquarters and Gettysburg locations.

    Question 8. The FCC's Fiscal Year 2016 budget submission explains 
that the Spectrum Auctions Program had nearly $318 million of available 
cash as of September 30, 2014. How much available cash is projected to 
be available as of September 30, 2015?
    Answer. The Commission is projected to have approximately $488 
million available at September 30, 2015. These funds will allow the 
Commission to complete the broadcaster incentive auction and the 
relocation of broadcasters, which is estimated to start in FY 2016 and 
end in FY 2019.

    Question 9. In its Fiscal Year 2016 budget submission, the FCC 
projects 1,671 FTEs in FY 2016, a reduction of 37 from FY 2015's 1,708. 
Please provide the Committee with the number of non-contract FTEs at 
the FCC for each of the last ten years. Also, please provide the number 
of contract positions funded by the FCC for each of the last ten years.
    Answer. The total number of non-contract FTEs at the FCC for each 
of the last ten years and the number of contract positions funded by 
the FCC for FY 2009 through FY 2015 is listed in the table below. The 
Commission does not have records to support the number of contract 
positions funded by the FCC for FY 2006 through FY 2008.

----------------------------------------------------------------------------------------------------------------
                       2006         2007         2008      2009    2010    2011    2012    2013    2014    2015
----------------------------------------------------------------------------------------------------------------
Total FTEs              1,816        1,793        1,776    1,779   1,775   1,776   1,725   1,723   1,716   1,690
----------------------------------------------------------------------------------------------------------------
Total Contractors         Not          Not          Not      959     813     576     551     551     501     503
                    Available    Available    Available
----------------------------------------------------------------------------------------------------------------

                                 ______
                                 
  Response to Written Questions Submitted by Hon. Roger F. Wicker to 
                            Hon. Tom Wheeler
    Question 1. In the FCC's February 26, 2015 press release announcing 
its Open Internet Order, the Commission indicates that with respect to 
Section 254 of the Telecommunications Act of 1996 there will be a 
``partial application of Section 254.''

    (a) Which parts of section 254 will apply and which parts of 
section 254 will not apply?
    Answer. In the Open Internet Order, the Commission forbore in part 
from the first sentence of section 254(d) ``insofar as [it] would 
immediately require new universal service contributions associated with 
broadband Internet access service.'' \1\ The Commission also forbore 
from sections 254(g) (concerning rates charged by providers of 
interexchange telecommunications services) and (k) (prohibiting the use 
of revenues from a non-competitive service to subsidize a service that 
is subject to competition).
---------------------------------------------------------------------------
    \1\ Open Internet Order, at para. 488.

    (b) What does ``partial application'' mean?
    Answer. ``Partial application'' refers to the fact that the Open 
Internet Order applied much of section 254 to broadband Internet access 
service, but forbore from the specific requirements described above in 
response to question 1(a).

    (c) What effect will the Open Internet Order have on the universal 
service lifeline program?
    Answer. The Open Internet Order applies what the Commission 
describes as the ``policy-making provisions'' of section 254 to 
broadband Internet access service. The Commission found that taking 
that step would ``give us greater flexibility in pursuing'' universal 
service policies relating to broadband Internet access services and 
would provide ``another statutory justification'' in support of 
policies already underway and other goals that the Commission has 
articulated, such as support for robust, broadband-capable networks in 
rural America.\2\
---------------------------------------------------------------------------
    \2\ Id. at para 486.

    (d) What effect will the Open Internet Order have on the universal 
service schools and libraries program?
    Answer. The Open Internet Order does not make any changes to the E-
rate program. However, as in the 2010 Open Internet Order, the 
Commission has provided that the Open Internet rules apply to mass-
market broadband Internet access services purchased with the support of 
the E-rate program.

    (e) What effect will the Open Internet Order have on the universal 
service rural healthcare program?
    Answer. The Open Internet Order does not make any changes to the 
rural healthcare program. However, in applying the ``policy-making 
provisions'' of section 254 to broadband Internet access service, the 
Commission adopted an approach that would ``give us greater flexibility 
in pursuing'' universal service policies relating to broadband Internet 
access services and would provide ``another statutory justification'' 
in support of policies already underway and other goals that the 
Commission has articulated.\3\
---------------------------------------------------------------------------
    \3\ Id.

    (f) What effect will the Open Internet Order have on the 
telecommunications relay service fund?
    Answer. The Open Internet Order applies section 225 of the 
Communications Act to broadband Internet access services. Among other 
things, section 225 mandates the availability of interstate and 
intrastate TRS to the extent possible and in the most efficient manner 
to individuals in the United States who are deaf, hard of hearing, 
deaf-blind, and who have speech disabilities. In declining to forbear 
from section 225, the Commission explained that ``[a]s technologies 
advance, section 225 maintains our ability to ensure that individuals 
who are deaf, hard of hearing, deaf-blind, and who have speech 
disabilities can engage in service that is functionally equivalent to 
the ability of a hearing individuals who do not have speech 
disabilities to use voice communication services.'' \4\ The Commission 
forbore, however, from the application of TRS contribution obligations 
that otherwise would newly apply to broadband Internet access service.
---------------------------------------------------------------------------
    \4\ Id. at para. 468.

    (g) What effect will the Open Internet Order have on Universal 
Service Fund support for broadband Internet access service, especially 
in rural areas?
    Answer. The Open Internet Order does not make any changes to 
Universal Service Fund support for rural and other high-cost areas. The 
Open Internet Order applies what the Commission describes as the 
``policy-making provisions'' of section 254 to broadband Internet 
access service. The Commission found that taking that step would ``give 
us greater flexibility in pursuing'' universal service policies 
relating to broadband Internet access services and would provide 
``another statutory justification'' in support of policies already 
underway and other goals that the Commission has articulated, such as 
support for robust, broadband-capable networks in rural America.\5\
---------------------------------------------------------------------------
    \5\ Id at para. 486.

    Question 2. Section 254 (d) provides that ``every 
telecommunications carrier that provides interstate telecommunications 
services shall contribute . . . to preserve and advance universal 
service.'' The FCC's press release indicates that ``the Order DOES NOT 
require broadband providers to contribute to the Universal Service Fund 
under section 254. The question of how best to fund the Nation's 
universal service programs is being considered in a separate, unrelated 
proceeding that is already underway.'' \6\
---------------------------------------------------------------------------
    \6\ https://www.fcc.gov/document/fcc-adopts-strong-sustainable-
rules-protect-open-internet

    (a) What is the Commission's plan for funding universal service now 
that the FCC has reclassified broadband Internet access service as a 
---------------------------------------------------------------------------
telecommunications service?

    (b) Do you support universal service contributions from providers 
of broadband Internet access service?
    Answer--combined response for (a) and (b). The Open Internet Order 
did not alter the Commission's ongoing processes for determining 
whether and how to reform the universal service contributions 
mechanism. The Commission has a pending rulemaking regarding 
contributions reform, and has referred issues relating to contributions 
reform to the Federal-State Joint Board on universal service. I look 
forward to considering any recommendations the Joint Board puts forward 
to address the question of whether broadband Internet access providers 
should contribute.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Roy Blunt to 
                            Hon. Tom Wheeler
    Question 1. You have held in place broadcast media ownership rules, 
many of which are decades old--including one that dates back to 1941. 
How do you square this with the ownership rules in place for other FCC 
regulated entities, like cable, satellite and wireless companies?
    Answer. The Commission issued a Notice of Proposed Rulemaking 
seeking comment on current media ownership rules. It is important to 
remember that the Commission has attempted to revisit media ownership 
rules but they have been remanded on several occasions by the Third 
Circuit. However, as we review the rules, we are taking steps to 
increase opportunities for broadcasters and potential new entrants.
    One of the first votes I took as Chairman was to approve a 
Declaratory Ruling to clarify the Commission's policies and procedures 
for reviewing broadcast transactions involving foreign ownership and 
investment. The hope is that this will unleash new capital to help 
existing and future media entities serve the needs and interests of 
their communities. Another change we have enacted is the enforcement of 
our existing local ownership rules to close loopholes when we adopted 
new attribution rules for the use of joint sales agreements (JSAs) for 
television stations.
    Thus, despite the fact broadcast media ownership rules have been in 
place for a long time, we will continue toreview and adapt our rules 
where and when it is warranted.

    Question 2. In 1991, Congress passed the Telephone Consumer 
Protection Act (TCPA). The intent of the legislation was to cut down on 
the growing number of unwanted telemarketing calls interrupting 
families and consumers at home. At the time, 90 percent of households 
used a landline telephone, but today technology is changing as more 
households ``cut the cord'' and use wireless phones.
    Despite the change in technology, TCPA regulations have not kept 
pace and need to be modernized.
    Today, there are numerous petitions that have been pending at the 
FCC for months, and in many cases for over a year.
    The lack of action by the FCC is hurting consumers. For example, as 
Chairman of the Appropriations Subcommittee on Labor, Health, and 
Education, I hear from student loan servicers who cannot contact 
graduates in danger of becoming delinquent on their payments.
    This is detrimental to a student's long-term credit, and the 
problem extends to virtually every business across every sector of the 
economy.
    I'd like to submit for the record a letter to the FCC that was 
signed by 35 diverse trade associations affected by the outdated TCPA.
    Congress did not envision this state of affairs when it enacted 
TCPA. What is your plan for addressing these pending petitions?
    Answer. As you note, Congress enacted the TCPA in 1991 to protect 
consumers from specific unwanted calls. The statute and the 
Commission's implementing rules prohibit the use of automatic telephone 
dialing systems and artificial or prerecorded voice messages to make 
non-emergency calls to wireless numbers and other specified recipients 
without prior express consent.
    Petitions for declaratory ruling now pending before the Commission 
raise a variety of issues, including what equipment qualifies as an 
autodialer and how consent from consumers must be obtained to comply 
with this statutory requirement. The Chairman has circulated a proposal 
to his fellow commissioners that would resolve more than 20 of these 
petitions. The Chairman's proposal would provide the clarity that 
businesses and other callers have requested. The proposal is based on 
an extensive record in response to the petitions, including numerous 
informative meetings with trade associations, small business owners, 
state attorneys general, consumer groups, and other interested parties, 
including those with debt collection interests that are similar to 
student loan services.
    Please be assured that we have carefully considered the input of 
all stakeholders, including callers and consumers alike, on the consent 
requirement and other issues in the Chairman's proposed decision.

    Question 3. It's become distressingly normal for the FCC to ignore 
Congress and obstruct our attempts at oversight.
    For example, in 2011, a bipartisan group of 33 senators--including 
myself--sent a letter to the FCC expressing concerns for a waiver to be 
granted to a company called LightSquared. The waiver would have been 
disastrous to Global Positioning System (GPS) technology. The letter 
had no effect, and the waiver remained on track.
    Senator Grassley initiated a formal investigation, and was told by 
the FCC that the Commission is not obligated to answer to anyone except 
the Chairman of the Senate Commerce Committee and the Chairman of the 
House Energy & Commerce Committee.
    Mr. Chairman, I don't hold you at fault for the actions of your 
predecessor, but do you agree that the FCC is unaccountable to 99.6 
percent of the Members of Congress?
    Answer. Congress maintains the ability to amend our organic 
statute, pass laws affecting our work and determine our spending 
levels. Accordingly, the FCC, although specifically designated by 
Congress as an Independent Regulatory Agency, answers to Congress.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Deb Fischer to 
                            Hon. Tom Wheeler
    Question 1. All Commissioners, over 40 members of the Senate signed 
a letter to the FCC last year seeking a way for rate-of-return carriers 
to receive USF support for broadband-only subscribers. When will the 
FCC make this bipartisan priority a reality?
    Answer. Last April, the Commission unanimously proposed a number of 
key principles for any reform: (a) support amounts must remain within 
the existing rate-of-return budget; (b) support must be distributed 
equitably and efficiently; (c) support must be based on forward-looking 
costs; and (d) no double recovery may occur for broadband costs. We 
recognize the substantial time, effort, and resources that have been 
invested in this effort to date, but significant questions remain as to 
whether the existing proposals fully meet the Commission's principles. 
While we have made no final decisions to adopt or reject any particular 
proposals, we do believe that more work can be done to develop a 
holistic plan that meets the principles set out by the Commission to 
ensure that high-cost support is distributed in a manner that maximizes 
public benefits.
    In March, my fellow Commissioners and I made a commitment to 
Senator Thune to reform the USF support mechanisms for rate-of-return 
carriers by the end of the year. I take that commitment very seriously. 
I have asked stakeholders in the rate-of-return community for their 
creative cooperation in getting this job done for rural consumers. I 
look forward to continuing the work of modernizing the universal 
service fund high-cost program and to working with stakeholders, 
including rural carriers and consumers, to ensure that that we are 
delivering the best possible voice and broadband experiences to rural 
areas.

    Question 2. All Commissioners, what effect does reclassification 
have on the costs that cable ISPs will have to pay to attach their 
wires to utility poles and what will this change mean for my rural 
constituents that are cable broadband customers?
    Answer. The Open Internet Order applies section 224 of the 
Communications Act to broadband Internet access services, and in so 
doing ensures that companies providing broadband Internet access 
service--but not previously entitled to the protections of section 
224--will have access to utility poles at reasonable rates. With 
respect to the regulated rates at which cable companies are able to 
attach their wires to utility poles, as I recently told participants at 
NCTA's Internet & Television Expo, I am committed to ensuring that 
cable operators do not confront excessive rates for pole attachments. 
On May 6, 2015, the FCC's Wireline Competition Bureau issued a short 
public notice to refresh the record on the pending NCTA and COMPTEL 
petition for reconsideration seeking to bring cable and 
telecommunications rates into closer alignment. Once the record is 
refreshed, my expectation is that a recommendation to the full 
Commission will be forthcoming to bring the rates into as close 
alignment as the Communications Act allows.

    Question 3. Chairman Wheeler, the law defines an ``information 
service'' as ``the offering of a capability for generating, acquiring, 
storing, transforming, processing, retrieving, utilizing, or making 
available information via telecommunications.'' Why doesn't the plain 
language of the statute compel a finding that Internet access is, at 
least primarily, an information service that enables consumers to 
generate, acquire, store, transform, process, retrieve, utilize or make 
available information?
    Answer. The Supreme Court in the Brand X case held that the terms 
telecommunications service and information service are ambiguous with 
respect to their application to cable modem service and that the 
Commission is entitled to deference in its interpretation and 
application of those terms.\1\ In the Open Internet Order, the 
Commission exercised its authority, upheld by the Supreme Court in 
Brand X, to interpret these terms based on the current facts in the 
record. Specifically, based on the substantial record compiled in 
response to the NPRM, the Commission determined that ``providers today 
market and offer consumers separate services that are best 
characterized as (1) a broadband Internet access service that is a 
telecommunications service; and (2) ``add-on'' applications, content, 
and services that are generally information services.'' \2\
---------------------------------------------------------------------------
    \1\ Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 
U.S. 967, 980-81 (2005) (Brand X).
    \2\ Open Internet Order, at para. 341
---------------------------------------------------------------------------
    Paragraphs 355 through 387 of the Open Internet Order provide a 
thorough analysis as to why the Commission concluded that the broadband 
Internet access service fits within the statutory definition of a 
``telecommunications service'' rather than an ``information service.''

    Question 4. Chairman Wheeler, I'm concerned that President Obama's 
new Internet regulations were written in a ``one-size-fits-all'' way so 
small cable operators in Nebraska, wireless ISPs across the country, 
and even municipal broadband networks will be treated similarly to 
bigger broadband companies. The president's own Small Business 
Administration even admonished the FCC that its proposed rules would 
unduly burden small businesses. Was there any concern at the FCC about 
how President Obama's Open Internet Order will negatively impact small 
Internet service providers, and why did they get swept up in this 400-
page order?
    Answer. The Open Internet Order ensures that all persons who 
subscribe to broadband Internet access service--regardless of whether 
they live in a densely-populated city or a very rural area--have the 
freedom to use the Internet to conduct commerce, communicate, educate, 
entertain, and engage in the world around them.
    In developing carefully-tailored open Internet protections, the 
Commission carefully considered comments from small ISPs and their 
representatives. Indeed, it was largely based on the concerns of 
smaller providers that the Commission declined to adopt certain 
enhancements to the Open Internet transparency rule that were proposed 
in the 2014 Open Internet NPRM--such as a requirement to disclose the 
source of congestion, packet corruption, and jitter. In addition, the 
Commission granted a temporary exemption to small ISPs (defined for 
this purpose as those with 100,000 or fewer subscribers) from all 
enhancements to the transparency rule, and it directed the Commission's 
Consumer & Governmental Affairs Bureau to determine whether to maintain 
that exemption and at what threshold by December 15, 2015. More 
generally, the Commission can and does grant waivers where a small 
entity cannot bear a burden appropriate to larger entities.\3\
---------------------------------------------------------------------------
    \3\ Id. at para. 530 (citing waiver possibility for Title II 
obligations); see, e.g., Revision of the Commission's Rules to Ensure 
Compatibility with Enhanced 911 Emergency Calling Systems, 17 FCC Rcd 
14841 (2002) (extending compliance deadline for smaller providers 
only).

    Question 5. Chairman Wheeler, why didn't the FCC offer more APA 
notice and comment on Title II prior to the president's YouTube video?
    Answer. The Notice of Proposed Rulemaking issued by the Commission 
in May 2014 expressly identified and sought comment on the potential 
reclassification of broadband Internet access service. During the 
extended comment cycle--of over 100 days--parties had more than 
sufficient opportunity to comment, and nearly four million comments 
were filed. As the Open Internet Order stated, the approach adopted by 
the Commission ``is one that the NPRM expressly identified as an 
alternative course of action. It is one on which the Commission sought 
comment in almost every section of the NPRM. It is one that several 
broadband Internet access service providers vigorously opposed in their 
comments in light of their own reading of the NPRM.'' \4\ The 
Commission provided ample notice of the approach that we adopted in the 
final order, in full compliance with our legal obligations under the 
Administrative Procedures Act.
---------------------------------------------------------------------------
    \4\ Id at para. 387.

    Question 6. Chairman Wheeler, does the FCC's reclassification 
decision mean that the FTC no longer has jurisdiction over the privacy 
activities of broadband providers? Because of the reclassification 
decision, are we about to lose the FTC's expertise when it comes to 
ISPs' privacy practices?
    Answer. I believe this question refers to the so-called ``common 
carrier'' exception that Congress included in the FTC Act. The FCC is 
not expert in, or in a position to comment on, the FTC's jurisdiction. 
That said, the FCC has substantial expertise and experience in 
protecting the privacy of customers of communications networks, and is 
committed to bringing that expertise and experience to bear in the 
context of broadband Internet access services. In addition, the FCC has 
a close working relationship with the FTC, and looks forward to 
continued collaboration on many matters.

    Question 7. Chairman Wheeler, can you explain how the FCC can 
preempt state governance of municipal broadband when the Supreme Court 
ruled in Nixon v. Missouri Municipal League the commission does not 
have this authority? Specifically, how are the federalism issues 
different under section 706 and section 253?
    Answer. In Section 706 of the Telecommunications Act of 1996, 
Congress directed the Commission to encourage broadband deployment and 
take immediate action to remove barriers to infrastructure investment 
and promote competition when advanced broadband is not being deployed 
to all Americans in a reasonable and timely fashion.
    In our February 26, 2015 decision regarding certain state laws in 
North Carolina and Tennessee, the Commission found that certain 
statutory provisions in the North Carolina and Tennessee statutes 
constituted barriers to broadband infrastructure investment and 
competition, and we preempted those provisions pursuant to our 
authority under section 706. This action was taken in response to 
petitions for preemption filed by the City of Wilson, North Carolina 
(Wilson) and the Electric Power Board of Chattanooga, Tennessee (EPB).
    The Commission's decision to preempt does not preempt restrictive 
laws with respect to municipal broadband in other states. However, the 
decision does establish a precedent for reviewing similar laws in other 
states, and the Order stated that the agency would not hesitate to 
preempt other, similar state laws if those laws constitute barriers to 
broadband deployment.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Jerry Moran to 
                            Hon. Tom Wheeler
    Question 1. In 2012 the Department of State, working with the 
Federal Communications Commission, reached a long anticipated agreement 
with the Mexican Government regarding spectrum sharing in the 800 MHz 
band to ensure both countries' operators would be permitted to maximize 
use of this spectrum band without unnecessary interference. Following 
the signing of this ``Revised Protocol'' then-Chairman Genachowski 
praised the agreement for the public safety and wireless broadband 
benefits that would result. Unfortunately the Mexican Government has 
yet to act upon the responsibilities assumed by Mexico in the 
agreement. As you know, the domestic benefits of this agreement are 
completely dependent upon Mexican action--and as a result are at a 
standstill almost three years following the signing of the Protocol. 
What is the FCC doing to resolve this international standstill?
    Answer. While negotiations with Mexico have not progressed as 
quickly as we would like, the FCC has engaged with our Mexican 
counterparts since 2012--including throughout Mexico`s 
telecommunications regulatory reform which took place in 2012-2014--to 
realize the benefits of the Revised Protocol. Subsequent to the 
establishment of Mexico's new regulatory agency the Federal 
Telecommunications Institute (IFT) in September 2013, FCC staff worked 
with IFT staff to reestablish relationships with the appropriate 
contacts and team members responsible for 800 MHz issues in Mexico.
    Since 2013, the FCC, in coordination with the State Department, has 
held several in-person meetings both in Mexico City and in Washington 
with IFT staff and Commissioners, and video conferences. Since 2014, 
FCC and IFT staff have worked together diligently on various 800 MHz 
related policy and legal issues and have held regular task force calls. 
FCC Chairmen and Commissioners have repeatedly raised the 800 MHz 
rebanding issue during their meetings with Mexican officials, including 
the ITU Plenipotentiary in Korea in October 2014 and most recently at 
the GMSA Mobile World Congress in Barcelona, Spain in March, 2015. The 
FCC has been waiting for IFT to issue new licenses to incumbent Mexican 
licensees that need to move out of the portion of the 800 MHz band 
spectrum that will be used for public safety. During the most recent 
call with IFT staff on April 28, 2015, IFT staff indicated that they 
are in the process of finalizing the necessary steps to issue new 
licenses to authorize the clearing of the 800 MHz band.

    Question 1a. How has the FCC coordinated with the Department of 
State to resolve this issue?
    Answer. The FCC has coordinated closely with State Department on 
these issues since the signing of the Revised Protocol with Mexico in 
2012. State Department has been invited and has participated in the in-
person task force meetings in Mexico City and at the FCC with IFT 
staff, as well as teleconferences and videoconferences with Mexican 
counterparts.

    Question 1b. When can Congress expect to see progress by the 
Mexican government to ensure that the hoped-for public and economic 
benefits are fully realized?
    Answer. The FCC has been assisting ITF as much as possible, but 
Mexico does not have an accurate database of its licensees like the FCC 
does. IFT staff have been collecting data from their licensees and 
reporting the information to the FCC so that our Transition 
Administrator can plan the relocation for both countries. While Mexico 
is making some progress, the FCC has emphasized to IFT the importance 
of moving forward on this issue as quickly as possible. One of the 
problems facing Mexico is that it has some government licensees whose 
relocation is more complex. All incumbent licensees must be issued new 
licenses in different spectrum before relocation can begin. IFT 
indicated recently that it is working towards issuing new licenses and 
taking the necessary steps to clear the 800 MHz band, but has not 
committed to any specific dates.

    Question 2. More than 900 small cable operators across the country 
rely upon a single buying group, the National Cable Television 
Cooperative (NCTC), to purchase the programming they offer their 
customers. Existing law clearly indicates that Congress intended to 
prevent programmers from charging ``buying groups'' discriminatory 
rates. However, due to problems with the manner in which the FCC 
drafted its rules, the NCTC does not enjoy the protections Congress 
intended. This problem was brought to the FCC's attention in June of 
2012. In October 2012, the FCC issued a rulemaking tentatively 
concluding that its definition of a ``buying group'' needs to be 
modernized to fix this problem and sought comment on this matter. The 
issue has now been before the FCC for more than two years, and last 
year the Small Business Administration has urged the FCC to act. What 
is the status of this proceeding? Does the FCC intend on examining this 
rule this year? Why or why not?
    Answer. The Media Bureau continues to evaluate the record in this 
proceeding, which raises complex legal and policy issues impacting not 
just small cable operators but also programmers. The Bureau is 
analyzing the costs and benefits of such a rule change as well as the 
effect of this proposed rule change on the video marketplace generally. 
While I understand the concerns raised by the NCTC, nothing is 
prohibiting the NCTC from qualifying as a buying group under the 
existing rules, as they previously have done. The companies can create 
a reserve under the Commission's existing rules and have the 
protections of Section 628, but have chosen not to. At this time, it 
appears that these companies are getting agreements, and we are unclear 
on the need for Federal intervention at this time.

    Question 3. According to the agency's FY 2016 budget request, the 
FCC has not requested additional full time employees. Can you please 
describe in detail the composition of the FCC staff by position type? 
How many attorneys does the FCC employ? How many economists does the 
FCC employ? How many engineers does the FCC employ? How many 
administrative staff does the FCC employ? How has that changed over the 
past 5 years? Please provide detail on other positions that may not be 
included in the questions above.
    Answer. The FCC employs 1,686 employees (as of April 18, 2015). The 
current breakdown of FCC employees by type of positions is as follows:

   592 Attorneys

   60 Economists

   256 Engineers

   149 in administrative offices/positions

   629 employees in other occupations, such as analysts, 
        specialists, IT, and accounting/finance positions.

    Over the past 5 years, the total number of employees has declined 
from the FCC's staffing levels in FY 2010 to the present. For 
comparison, the FY 2010 figures by type of position were as follows:

   544 Attorneys

   57 Economists

   270 Engineers

   201 in administrative offices/positions

   760 in other occupations, such as analysts, specialists, IT, 
        and accounting/finance positions.

    Question 4. One of the goals of the 2011 Connect America Fund 
proceeding was to transition universal service support away from voice 
services to broadband service for unserved Americans. Last year, 130 
Members of Congress wrote to the FCC urging progress on universal 
service updates that are tailored for small companies so they could 
receive support for offering stand-alone broadband, which consumers are 
increasingly demanding. I understand that the FCC has sought comment on 
such updates at least three times now in the last few years. When will 
the FCC make additional progress in this regard? What more data or 
information does the FCC need to collect in order to achieve this goal?
    Answer. Last April, the Commission unanimously proposed a number of 
key principles for any reform: (a) support amounts must remain within 
the existing rate-of-return budget; (b) support must be distributed 
equitably and efficiently; (c) support must be based on forward-looking 
costs; and (d) no double recovery may occur for broadband costs. We 
recognize the substantial time, effort, and resources that have been 
invested in this effort to date, but significant questions remain as to 
whether the existing proposals fully meet the Commission's principles. 
While we have made no final decisions to adopt or reject any particular 
proposals, we do believe that more work can be done to develop a 
holistic plan that meets the principles set out by the Commission to 
ensure that high-cost support is distributed in a manner that maximizes 
public benefits.
    In March, my fellow Commissioners and I made a commitment to 
Senator Thune to reform the USF support mechanisms for rate-of-return 
carriers by the end of the year. I take that commitment very seriously. 
I have asked stakeholders in the rate-of-return community for their 
creative cooperation in getting this job done for rural consumers. I 
look forward to continuing the work of modernizing the universal 
service fund high-cost program and to working with stakeholders, 
including rural carriers and consumers, to ensure that that we are 
delivering the best possible voice and broadband experiences to rural 
areas.

    Question 5. Describe the role of the FCC's Chief Information 
Officer (CIO) in the development and oversight of the IT budget for 
your agency. How is the CIO involved in the decision to make an IT 
investment, determine its scope, oversee its contract, and oversee 
continued operation and maintenance?
    Answer. The FCC's CIO is situated within the Office of Managing 
Director and works directly with both the Managing Director and the 
Chief Financial Officer. The CIO provided significant input to 
determine the FCC's IT investment--which is reflected in the Fiscal 
Year 2016 budget. All requested programmatic funding increases, apart 
from the restacking/move of the FCC, are IT-based. We continue to 
strengthen the IT staff by hiring more experienced personnel, bringing 
in highly-skilled detailees from other agencies to oversee 
implementation, and decreasing the number of contractors. The IT 
department has ``intrapreneurs'' who work closely with each bureau and 
office assessing programming in order to (1) prioritize projects 
according to available funding; and (2) provide the necessary data for 
budgeting IT projects.

    Question 6. Describe the existing authorities, organizational 
structure, and reporting relationship of the Chief Information Officer. 
Note and explain any variance from that prescribed in the newly-enacted 
Federal Information Technology and Acquisition Reform Act of 2014 
(FITARA, PL 113-291) for the above.
    Answer. Although I am aware that OMB still must provide substantial 
guidance on agency implementation of the Act, the FCC was already 
moving in the right direction to ensure that our CIO had the support 
and level of responsibility contemplated by Congress. FITARA mandates a 
``significant role'' in programming, budgeting and decision-making 
related to IT at their agencies, including approving the IT portion of 
the annual budget requests agencies submit to Congress. The FCC CIO 
clearly has this responsibility within the Commission.
    The FCC's CIO works directly with the CFO and Managing Director to 
develop the budget, and he has access to enhanced procurement staff 
with an IT focus. Specifically, the CIO has implemented a cross-
Commission perspective in order to replicate capabilities and reuse 
applications across the agency--a key component of FITARA. Strategic 
sourcing and consolidation also are key initiatives. The CIO has 
demonstrated the use of both of these initiatives in the lift and shift 
to a Federal data center and the use of Software as a Platform in his 
new initiatives.
    In fact, the FCC has an outstanding CIO and we hope that by 
building his department and strengthening and empowering his staff, we 
will serve as a role model for IT good governance. In addition, our CIO 
has a good working relationship with the Federal CIO and is in step 
with efforts to modernize the approaches to the acquisition and 
implementation of IT in government.

    Question 7. What formal or informal mechanisms exist in your agency 
to ensure coordination and alignment within the CXO community (i.e., 
the Chief Information Officer, the Chief Acquisition Officer, the Chief 
Finance Officer, the Chief Human Capital Officer, and so on)?
    Answer. Given the compact nature of the FCC, the Office of Managing 
Director (OMD) coordinates and directs the office's staff, including 
the CFO and CIO. Also situated under OMD are human resources and 
procurement office personnel. The combination of these offices within 
OMD and the elevated status of the CIO in answering directly to the 
Managing Director have ensured that the Commission's planning efforts 
are well coordinated through regular internal contacts.
    These support functions also coordinate closely with other parts of 
the FCC. For example, the CIO conducts regular briefings with the 
individual Bureau/Office chiefs and deputies to inform them of upcoming 
IT related upgrades and changes. He also works closely with high level 
Commission staff to develop systems acquisitions requirements.

    Question 8. According to the Office of Personnel Management, 46 
percent of the more than 80,000 Federal IT workers are 50 years of age 
or older, and more than 10 percent are 60 or older. Just four percent 
of the Federal IT workforce is under 30 years of age. Does your agency 
have such demographic imbalances? How is it addressing them?
    Answer. The demographic probably is representative of all of the 
Federal Government, but the Commission does not consider an applicant's 
age when making hiring decisions. The FCC also is proud that its 
working environment encourages loyal staff and excellent retention of 
highly qualified personnel. During the past year, the FCC has 
endeavored to hire and retain qualified, skilled staff regardless of 
their age, including respected personnel detailed from other agencies. 
We believe that we need to maintain a fully staffed IT shop and 
decrease dependency on IT contractors. Until we receive essential 
funding, however, we will be unable to fully meet needed staffing 
levels.

    Question 9. How much of the agency's budget goes to Demonstration, 
Modernization, and Enhancement of IT systems as opposed to supporting 
existing and ongoing programs and infrastructure? How has this changed 
in the last five years?
    Answer. The Government Accountability Office has noted that Federal 
agencies currently spend more than 70 percent of their IT budgets on 
maintaining legacy systems. The FCC, like other agencies, has been 
caught in this legacy trap; as of the end of FY13, we were trending 
well above even the Federal average of 70 percent. In fact, the FCC has 
trended as high as 80 percent for Operations and Maintenance (O&M) and 
this level actually increased during the past five years.
    We have tackled the problem of legacy systems head-on and targeted 
all available resources toward modernizing our IT systems. But we 
require additional funds to make this a reality, or risk maintaining 
high-cost, antiquated and inefficient systems. The FCC's Fiscal Year 
2016 budget requests $5.8 million to replace the FCC's legacy 
infrastructure with a managed IT Service provider, as well as one-time 
infusions of $9.6 million to rewrite the FCC's legacy applications as 
part of a modular ``shift'' to a modern, resilient, cloud-based 
platform. These new funds will be dedicated to removing the legacy 
restraints imposed on our budget and allow for spending directed toward 
more economical and useful resources.

    Question 10. What are the 10 highest priority IT investment 
projects that are under development in your agency? Of these, which 
ones are being developed using an ``agile'' or incremental approach, 
such as delivering working functionality in smaller increments and 
completing initial deployment to end-users in short, six-month time 
frames?
    Answer. We have very modest IT investment projects compared to most 
other agencies and are currently utilizing reprogrammed funds to 
support a server move. Our FY16 budget outlines the remainder of our 
specific priorities: $5.8 million to replace the FCC's legacy 
infrastructure with a managed IT Service provider, as well as one-time 
infusions of $9.6 million to rewrite the FCC's legacy applications as 
part of a modular ``shift'' to a modern, resilient, cloud-based 
platform. We also have asked for $2.2 million to improve the resiliency 
of the FCC systems, specifically to address gaps identified in our 
recent FISMA audit process.
    At present, the development of a replacement for our ECFS (or 
``comments'') system is an important example of the continued use of 
agile development. This project, from start to finish, will take less 
than six months and uses entirely agile techniques. The ZenDesk 
deployment took less than 90 days and our new tracking tool will be 
developed in a similar manner, using either PaaS or SaaS, involving no 
on-site hardware or software and supported fully in the cloud.
    Our move to ``O365'' is a top-ten priority--but it does not involve 
development, just moving our Microsoft infrastructure to a true cloud 
environment. Our highest priority development efforts are mostly 
centered on incentive auctions and licensing systems. These upgrades 
are a stop-gap measure until funding is made available for fundamental 
rewrites of those systems into a true cloud infrastructure, fully 
utilizing the agile approach

    Question 11. To ensure that steady state investments continue to 
meet agency needs, OMB has a longstanding policy for agencies to 
annually review, evaluate, and report on their legacy IT infrastructure 
through Operational Assessments. What Operational Assessments have you 
conducted and what were the results?
    Answer. We determined last year that we had 207 legacy systems, 
mostly unsupportable going forward. As a result, we developed a long-
term IT modernization plan that is reflected in our Fiscal Year 2016 
budget. Our Fiscal Year 2016 budget requests $5.8 million to replace 
the FCC's legacy infrastructure with a managed IT Service provider, as 
well as one-time infusions of $9.6 million to rewrite the FCC's legacy 
applications as part of a modular ``shift'' to a modern, resilient, 
cloud-based platform. A rationalization process for all systems and 
applications is ongoing as part of our effort to reduce the overall 
cost and complexity of FCC systems. The initial results reflected 
almost a 50 percent reduction in the number of ``systems'' to be 
modernized and a significant reduction in active servers.

    Question 12. What are the 10 oldest IT systems or infrastructures 
in your agency? How old are they? Would it be cost-effective to replace 
them with newer IT investments?
    Answer. The FCC has identified the legacy system issue as a core 
impediment to agency efficiency and a major contributor to overpriced 
maintenance costs. It would be more cost-effective to replace these 
systems with newer IT investments and we are moving in this direction. 
The development of the new Consumer Complaint Database is an example of 
this work.
    I have been advised by our IT staff that examples of our oldest 
applications include: GenMen, ULS, CDBS, ECFS, ELS, ETFS, EDOCS, EMTS 
and PAMS. Aging Infrastructure includes: E25K, V490 servers, UPS units 
in Auctions computer room, Core Routers and the Distribution Switches 
as well as our SAN. The age of these applications and infrastructure is 
broad, but mostly falls into the over 10 year range with some probably 
approaching 20 years.
    It is more cost effective to rewrite the applications into a cloud 
infrastructure versus replacing the equipment. The initial estimate for 
just modernizing the applications in the way the FCC has been doing 
business for the past two decades would mean rewriting applications in 
antiquated code on old platforms in a waterfall approach with an 
estimate of over $22 million, not including upgrading all of the 
hardware. Further, that traditional approach is not conducive to short 
term results through agile development, which significantly reduces our 
exposure and allows us to adapt quickly to congressional and regulatory 
requirements. Our request reflects a 50 percent cost avoidance on the 
development effort alone without even addressing cost avoidance on the 
hardware.

    Question 13. How does your agency's IT governance process allow for 
your agency to terminate or ``off ramp'' IT investments that are 
critically over budget, over schedule, or failing to meet performance 
goals? Similarly, how does your agency's IT governance process allow 
for your agency to replace or ``on-ramp'' new solutions after 
terminating a failing IT investment?
    Answer. We are currently in the process of implementing a long-term 
modernization effort. We do not have issues and problems related to 
over-budget, over-schedule or related issues due in part to a lack of 
investment in future needs. Our IT governance process, managed through 
OMD, allows for a fast turn-around through direct contact and 
discussion with the CFO and Managing Director. We have a rigorous 
investment review process for all new development and have instituted a 
review of all O&M and development efforts.

    Question 14. What IT projects has your agency decommissioned in the 
last year? What are your agency's plans to decommission IT projects 
this year?
    Answer. We have not decommissioned any IT projects, but did replace 
the Consumer Complaints Database system. Because of flat appropriations 
and not having significant new IT projects funded other than auctions, 
our entire focus has been on O&M for existing systems. We were 
compelled to halt improvements and upgrades to the Broadband Map this 
year due to funding restraints.

    Question 15. The newly-enacted Federal Information Technology and 
Acquisition Reform Act of 2014 (FITARA, PL 113-291) directs CIOs to 
conduct annual reviews of their agency/department's IT portfolio. 
Please describe your agency/department's efforts to identify and reduce 
wasteful, low-value or duplicative information technology (IT) 
investments as part of these portfolio reviews.
    Answer. In February 2014, the FCC conducted a top-to-bottom review 
of its internal processes and determined that IT systems at the agency 
were in serious need of modernization. Since that time, we have been 
actively engaged in modernizing the remaining portion of the 207 legacy 
systems and creating integrated systems similar to the Consumer 
Complaint Database.
    The CIO's recommendations on the IT portfolio review are clearly 
highlighted in our Fiscal Year 2016 Budget request: $5.8 million to 
replace the FCC's legacy infrastructure with a managed IT Service 
provider, as well as one-time infusions of $9.6 million to rewrite the 
FCC's legacy applications as part of a modular ``shift'' to a modern, 
resilient, cloud-based platform. We also have asked for $2.2 million to 
improve the resiliency of the FCC systems, specifically to address gaps 
identified in our recent FISMA audit process.

    Question 16. In 2011, the Office of Management and Budget (OMB) 
issued a ``Cloud First'' policy that required agency Chief Information 
Officers to implement a cloud-based service whenever there was a 
secure, reliable, and cost-effective option. How many of the agency/
department's IT investments are cloud-based services (Infrastructure as 
a Service, Platform as a Service, Software as a Service, etc.)? What 
percentage of the agency/department's overall IT investments are cloud-
based services? How has this changed since 2011?
    Answer. The FCC currently is planning to move to cloud-based 
system. Beyond the move of Microsoft products to 0365, which is a full 
cloud-based deployment, lack of funding will limit our ability to re-
write our applications in to a cloud infrastructure. We currently have 
several examples of our ongoing initiative to move systems to the 
cloud, including: ZenDesk, Relativity, Mule API Manager, box.com, 
Google Apps for Government, Amazon Web Services, Appian, and 
CenturyLink for website deployment. We also are planning for several 
more, including; Azure, SoftLayer, Office365, Incentive Auction, ISAS 
Bidding system, BPM using ServiceNow and IdaaS using Okta. Please note 
that these involve only partial deployments in most instances. ZenDesk 
is a full cloud implementation like O365.

    Question 17. Provide short summaries of three recent IT program 
successes--projects that were delivered on time, within budget, and 
delivered the promised functionality and benefits to the end user. How 
does your agency define ``success'' in IT program management? What 
``best practices'' have emerged and been adopted from these recent IT 
program successes? What have proven to be the most significant barriers 
encountered to more common or frequent IT program successes?
    Answer. Earlier this year, the FCC launched a new Consumer Help 
Center with a revamped complaint web interface at about 1/6th the 
traditional cost for such a project. This project epitomizes many of 
the agency-wide changes that we hope to implement for IT: inexpensive, 
off-the-shelf solutions, combined with resiliency, user-friendly 
options, and the potential to improve our internal data collection 
methods to increase transparency and inform policy-making decisions. 
The roll out of VDI remote access for Commission staff over the last 
year has made our agency more efficient and allowed for our workforce 
to be more mobile and office independent. The move to O365 also is a 
significant project with a fixed price and will be delivered on time 
and on budget. We also are updating our Electronic Comment Filing 
System (ECFS), our 20-year old comments database, which showed strain 
during the Open Internet proceeding. Completion is targeted within the 
next month.
    Unfortunately, lack of funding has undermined additional system 
development projects. On April 6, 2015, we did sign a contract to move 
our server off-premises to a secure Federal cluster site in West 
Virginia, and that project is underway. The Commission has made 
progress on moving to electronic filing and distribution of licenses 
for most matters, and we would like to develop a process for including 
the remainder, with sufficient funding.
    In addition, OMD is working hard on improving the searchability, 
navigability and appearance of the FCC's external website; improvements 
in search functionality should be seen within the next month, if not 
earlier. Improving usability and appearance has involved input from 
FCC.gov stakeholders internally and externally. The status of the 
FCC.gov upgrade project is described in a recent blog post by the FCC's 
CIO: www.fcc.gov/blog/modernizing-fccgov-website.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dan Sullivan to 
                            Hon. Tom Wheeler
    Question 1. Chairman Wheeler, thank you for visiting Alaska last 
August. Since your visit, the Alaska Telephone Association has authored 
a plan, the ``Consensus Alaska Plan,'' which would allow them to 
provide broadband to unserved areas and improve service throughout 
Alaska. 16 Alaskan companies have signed on to the plan. What are your 
thoughts on the Consensus Alaska Plan?
    Answer. The Commission has long recognized the unique challenges of 
deploying broadband to remote areas of Alaska. We welcome industry 
input and will consider the plan presented by the Alaskan companies as 
the Commission considers reforms to the high-cost mechanisms that 
support voice and broadband service provided by rate-of-return 
carriers, as well as support for mobile carriers.

    Question 2. Chairman Wheeler, in November, President Obama made 
clear that he believed the FCC should reclassify broadband under Title 
II of the Telecommunications Act. Soon after, you changed your position 
on net neutrality, aligning it with the President's position. Please 
address the legality of a president influencing the actions of an 
independent agency.
    Answer. The process the FCC followed to develop the Open Internet 
Order was the informal rulemaking process established in Section 553 of 
the Administrative Procedure Act. Interested parties can participate in 
this process by submitting comments into the rulemaking record or by 
making ex parte presentations to FCC Commissioners and staff. Executive 
branch officials, including the President, can and do participate in 
these FCC rulemaking proceedings. The Department of Justice Office of 
Legal Counsel found in a 1991 opinion requested by the George H.W. Bush 
Administration that ``it is permissible for White House officials to 
contact FCC Commissioners in an effort to influence the results of an 
FCC rulemaking,'' subject to the Commission's disclosure rules.\1\
---------------------------------------------------------------------------
    \1\ 15 U.S. Op. Off. Legal Counsel 1, 3 (1991).
---------------------------------------------------------------------------
    On November 10, 2014, President Obama issued a video and a written 
statement calling for the creation of ``a new set of rules protecting 
net neutrality.'' His statement became part of the Open Internet 
rulemaking record later the same day, when the National 
Telecommunications and Information Administration filed the President's 
statement and a notice of an ex parte presentation in the proceeding 
record. President Obama was one of many commenters--including many 
Members of Congress--who supported a Title II reclassification 
approach.

    Question 3. In the future, there is the possibility that Congress 
will attempt to rewrite the Communications Act. The last major overhaul 
of your original authorizing legislation was the Telecommunications Act 
of 1996. In that Act, Congress was very clear that expansion of 
advanced telecommunications services to rural Americans was a priority. 
The Act established the Universal Service Fund as a way of implementing 
that priority, stating that congressional intent was that funding be 
``sufficient'' to allow infrastructure to be built to remote, sparsely 
populated areas and that the funding be ``predictable'' so that 
companies providing the infrastructure can take on necessary debt with 
a reasonable expectation that they will be able to maintain their debt 
coverage. Do you agree that the principle of universal service, which 
has long been a guiding principle of the Federal Government, should 
continue to be a priority in any new legislation?
    Answer. As I have made clear since the day I arrived at the 
Commission, universal service is one of the core elements of the 
network compact that exists between the companies that provide the 
service and the public. Congress has enshrined this value in the 
Communications Act, and achieving universal service is a goal that must 
guide the work of the FCC in all that we do. Simply put, access denied 
is opportunity denied.

    Question 4. The FCC is now examining additional ideas for expanding 
broadband capability in unserved areas. For Alaska, one of the biggest 
obstacles to closing the broadband availability gap is ensuring that 
all Alaska service providers have access to middle-mile capability at 
reasonable rates. Will you commit to work on closing the broadband 
availability gap in Alaska?
    Answer. I understand the challenges to providing reasonably 
comparable broadband to end-users presented by the current middle-mile 
options in many parts of Alaska. The most remote, highest-cost areas 
may take longer to reach than other areas, but any long-term solution 
for Alaska must include addressing the middle-mile capabilities. I am 
heartened by news that there is some progress by the private sector to 
upgrade existing middle-mile capabilities and create new ones.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                            Hon. Tom Wheeler
    Question 1. Understanding the complexity of the incentive auction, 
what is the current timeline for when the incentive auction is expected 
to take place? Is there any way we can push up the timeline?
    Answer. The Commission adopted the Incentive Auction Report and 
Order in May 2014, establishing the basic policies and rules for the 
auction. Since then, the Commission has moved forward on numerous 
fronts to address the range of auction implementation issues. We are on 
track to accept applications in the fall of this year and to conduct 
the Incentive Auction beginning in the first quarter of 2016. That 
schedule gives us the time we need to complete work on the auction 
procedures and related polices, and ensure that the auction software 
will run seamlessly.

    Question 1a. Are there any other spectrum auctions that the FCC is 
planning on conducting before the authorization runs out in 2022? If 
so, what are they? At what point in the process are they in? What can I 
do to be helpful to bring more spectrum to auction?
    Answer. The Commission is committed to making additional licensed 
and unlicensed spectrum available for broadband and continues to rely 
on its auction authority to use market-based mechanisms to accomplish 
that goal. Auctions are a crucial tool in our tool belt that we have 
regularly used to make commercial wireless spectrum available to us 
since the authority was originally granted to us by Congress in 1993.
    The Commission has a number of commercial wireless auctions in the 
pipeline, in addition to the Incentive Auction. We also need to 
maintain the ability to auction spectrum into the future, including for 
bands not yet identified, so that when they are identified, we can move 
as quickly as possible to make the spectrum available in the 
marketplace.
    For instance, in April 2015 the Commission adopted the 3.5 GHz 
Report and Order, which establishes an innovative three-tiered sharing 
framework to create a 150-megahertz band of spectrum that, among other 
innovative spectrum sharing concepts, envisions periodic auctions 
occurring every three years (3.5 GHz Auctions). In the recurring 3.5 
GHz Auctions, up to 70 megahertz will be available on a licensed basis.
    In addition, the Commission recently initiated a proceeding to 
identify spectrum in a number of bands above 24 GHz that could be 
harnessed for mobile services, including what some refer to as ``5G.'' 
The Commission sought comment on how these bands could be made 
available for mobile broadband and other uses, including through 
auction. The Commission also periodically holds auctions for spectrum 
that is in our inventory, including spectrum for which there was not a 
winning bidder in previous auctions.
    I appreciate your offer for assistance in identifying additional 
spectrum that could be made available for auction, and look forward to 
working with you to achieve our mutual goals.

    Question 2. I believe that FCC Process reform is long overdue. Do 
you believe that we can make simple changes to the rulemaking process 
at the FCC that would create more transparency? Do you believe that we 
should codify the rulemaking process? Do you believe a proposed rule or 
amendment to a rule should be published for at least 21 days? If you do 
not believe that we should publish a proposed rule or amendment for at 
least 21 days do you believe it should be published before the vote at 
all?
    Answer. The FCC rulemaking process is governed by statute through 
the Administrative Procedure Act.\1\ The APA applies to all independent 
agencies' rulemaking proceedings, and establishes a well-understood, 
transparent process that has stood the test of time. APA provides for 
public notice and comment cycles, ex parte rules, and reconsideration/
appeals--ample opportunity for the public to participate, which enables 
decisionmaking to proceed in an orderly and fair fashion.
---------------------------------------------------------------------------
    \1\ 5 USC 551 et seq.
---------------------------------------------------------------------------
    Releasing the text of a draft order in advance of a Commission vote 
effectively re-opens the comment period and can result in a never-
ending proceeding. The APA requires agencies engaged in notice-and-
comment rulemaking to consider the comments in the record of a 
proceeding before reaching a decision. Publicly releasing a draft order 
before adoption would create the opportunity for additional public 
comment, which would have to be addressed under the APA. Addressing new 
round of public comments on matters already fully subject to public 
comment could result in a new draft order that is substantially 
different from the original, which in turn could lead to another public 
comment period (and another if a new draft order were released in 
response to subsequent public comment). In short, requiring the release 
of a draft order prior to its adoption could jeopardize the FCC's 
ability to conclude rulemakings in a timely fashion.

    Question 3. Would you please propose one regulation that we should 
eliminate?
    Answer. The Report on FCC Process Reform, released on February 14, 
2014 after a comprehensive review by a staff working group, recommended 
several regulations that should be eliminated. Commission staff is 
working diligently to implement these and other recommendations from 
the report. Here are a few examples of regulations that the Commission 
either has recently, or proposes should be, eliminated:
    In the last year, the Commission eliminated over 20 rules relating 
to wireless services in an effort to reduce and minimize regulatory 
burdens and streamline its rules. Specifically, rules were eliminated 
to modernize the amateur licensing process, significantly reform and 
modernize the cellular service rules, and improve and streamline rules 
and requirements for wireless infrastructure.
    On the media front, last September the Commission repealed its 
sports blackout rules, which prohibited cable and satellite operators 
from airing any sports event that had been blacked out on a local 
broadcast station. That action removed Commission protection of the 
NFL's private blackout policy, which requires local broadcast stations 
to black out a game if a team does not sell a certain percentage of 
tickets to the game at least 72 hours prior to the game. In revisiting 
the rules, the Commission determined that the rules were no longer 
justified in light of the significant changes in the sports industry 
since these rules were first adopted nearly forty years ago.
    Last November, the Commission unanimously adopted a Notice of 
Proposed Rulemaking that would update the contest rules. In the item, 
the Commission proposed to end the mandate that broadcasters disclose 
contest information fully and accurately over the air, instead 
proposing to allow stations to refer consumers to detailed contest 
information available on a website. We expect to move forward with a 
rulemaking on this issue this year.
    In the equipment certification context, a Notice of Proposed 
Rulemaking is on circulation now that would propose to eliminate the 
requirement to file an importation Form 740 for each entry of 
electronic and communications equipment, which would ease the burden 
for equipment manufacturers. In addition, the NPRM proposes to combine 
the Declaration of Conformity and Verification procedures into one 
self-approval program that is essentially identical to programs used in 
other parts of the world, streamlining the equipment certification 
process.
    In February 2015, new rules went into effect that eliminated 
unnecessary international reporting requirements in Part 43 of the 
Commission's rules. In addition, there is a Further Notice of Proposed 
Rulemaking pending--which we expect to complete later this year--that 
proposes to eliminate most or all of the interim design and 
construction milestone showings currently required of geostationary 
orbit satellite system licensees.
    In an order adopted in October 2014, the Commission eliminated the 
requirement that 700 MHz public safety licensees narrowband their 
systems from 12.5 kHz to 6.25 kHz channels by December 31, 2016. The 
Commission concluded that the narrowbanding requirement was unnecessary 
because it limited the technical flexibility of licensees to use newer 
technologies (such as broadband) and would impose unnecessary costs 
without corresponding benefits. In addition, in an NPRM adopted in 
April 2015, the Commission proposed to sunset the requirement to 
transmit 911 calls from non-service initialized (NSI) phones following 
a six-month transition period. The Commission proposed to sunset the 
rule because NSI phones are a frequent source of harassing and 
fraudulent 911 calls and because alternative means of accessing 911 are 
widely available.
    In the last year, the Commission eliminated the technology plan 
requirement and the prohibition on WAN ownership in the E-rate program. 
In addition, there is an NPRM currently pending that would propose to 
eliminate rules from which the Commission has granted unconditional 
forbearance for all carriers, and also proposes to remove references to 
``telegraph'' from certain sections of the Commission's rules.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                            Hon. Tom Wheeler
    Question 1. The Commission's actions on Net Neutrality go a long 
way to ensuring an open and vibrant Internet that protects consumers 
and promotes innovation for many years to come. I know that you faced 
some strong headwinds in taking that action and, like many of my 
colleagues, I'm pleased that you all had the courage to take that step.
    As we now look ahead, I know you are looking to review some of the 
larger mergers that are next on your agenda. One of those mergers in 
particular, the combination of Comcast and Time Warner Cable, seems 
particularly troubling. As I understand it, the resulting company would 
control more than half of the broadband connections in our country.
    At the same time, it would own enormous amount of content, become 
the dominant cable and broadband company in nearly every major market, 
and have significant sway over cable advertising. Just as we are 
entering an exciting new period where our most popular content brands 
like Netflix, Amazon, ESPN, Nickelodeon and HBO are available ``over 
the top'' or soon will be, one company that competes directly against 
them will also control the pipe that determines their fate.

    Question 1a. I'd like your perspective on the potential impact that 
market consolidation generally could have on competition especially in 
the area of content pricing and availability and your commitment to 
give the merger transactions pending in front of the FCC a very 
thorough review.
    Answer. With regard to your first point, as you may know, my mantra 
since becoming Chairman has been ``competition, competition, 
competition'' and I have been dedicated to promoting that goal. Last 
fall I announced a new Agenda for Broadband Competition, noting that 
competition is the most effective tool for driving innovation, 
investment, and consumer and economic benefits. The Agenda is a set of 
policy goals that are broadly applicable as the marketplace continues 
to evolve. I pledged that (1) where competition exists, the Commission 
will protect it; (2) where greater competition can exist, we will 
encourage it; (3) where meaningful competition is not available, we 
will work to create it; and (4) where competition cannot be expected to 
exist, we must shoulder the responsibility of promoting the deployment 
of broadband.
    With respect to the proposed merger between AT&T and DIRECTV, the 
Commission continues to conduct a detailed and comprehensive review, 
including consideration of the competition issues that you raise.
    On April 24, Comcast announced its decision to abandon its bid to 
acquire Time Warner Cable.

    Question 2. Some in the industry have called for a premium on 
getting the incentive auction ``right'' over rushing to just get it 
``done.'' I think American consumers and innovators deserve both. At 
the hearing Chairman Wheeler and Commissioner Pai both spoke to the 
complexities involved in moving forward with this auction as possible 
reasons for delay.

    Question 2a. Does the FCC have the expertise, personnel and 
technology resources to complete the auction without a further delay?

    Question 2b. If not, what additional resources are needed and are 
these needs accounted for in the FCC budget request that covers the 
time period during which the auction is expected to be conducted?
    Answer. Yes. The FCC received its requested auctions cap in its 
Fiscal Year 2013, 2014 and 2015 Appropriations bills. The FCC has 
requested an $11 million increase in the auctions cap for Fiscal Year 
2016, from $106 million to $117 million. If we receive the requested 
level, along with our overall budget request of $388 million for Fiscal 
Year 2016, we will have sufficient funds to move ahead.

    Question 3. Late last year, I sent you a letter raising issues 
about universal service reforms and encouraging you to consult more 
directly with the Tribal communities before you move forward with 
reforming universal service fund programs that could address some of 
the service gaps on tribal lands.
    In February 2015, the National Congress of American Indians filed a 
petition for reconsideration complaining that the FCC adopted reforms 
that will drain $900,000 annually from tribally-owned carriers serving 
tribal lands and that it reached that decision without engaging in 
formal consultation with the tribal nations with regard to these 
reforms. The cost of the underlying decision threatens to have a 
dramatic impact on carriers serving tribal lands. You have acknowledged 
the special challenges to bringing advanced networks to tribal lands.

    Question 3a. Couldn't a more robust consultation with the tribes 
have led the FCC to consider a tribal tailored approach in reaching its 
decision?

    Question 3b. What plans does the FCC have to address the growing 
digital divide on tribal lands?

    Question 3c. When does the FCC plan to resolve the NCAI petition 
for reconsideration?
    Answer. The Commission is strongly committed to working with Tribal 
Nations to ensure that Tribal concerns are appropriately considered and 
addressed as part of the Commission's broader efforts to improve 
broadband deployment throughout the United States. Expanding high speed 
broadband connections to all corners of the country, including Tribal 
lands, is a top priority for the Commission.
    In general, the Commission is strongly committed to working with 
Tribal Nations through meaningful and vigorous efforts on a regular 
basis. ONAP has renewed its commitment to Tribal consultation, 
training, and outreach, and the Commission's comprehensive and regional 
approach has proven unique among Federal agencies. With ONAP's 
leadership, for example, the Commission has forged partnerships with 
Tribal Nations and inter-Tribal government associations to ensure that 
the well-received Tribal Broadband, Telecom, and Media Consultation and 
Training Workshops meet the individual needs of their regions across 
Indian Country. The Commission, through ONAP, hosts these regional 
events for Tribal Nations, and at no cost to attendees.
    Basic key communications issues are covered at all of the 
workshops, including universal service, spectrum, and broadcast. In 
2014, the Commission committed to upgrade and expand its Tribal 
consultation and training efforts, launching a more intensive version 
of the workshops. Each of the 2 \1/2\ day workshops was held in Indian 
Country or, in one case, in a location requested by one of our Tribal 
partners. These locations included Tribal lands in California, Idaho, 
Minnesota, and Oklahoma, as well as the Southeast region central City 
of Nashville. And each of the workshops had a common goal--to train and 
assist Tribal Nations in developing more robust broadband, 
telecommunications, and broadcast infrastructure to serve those living 
on Tribal lands. The workshops also were coupled with deployment of the 
Native Learning Lab, a modular teaching tool developed for in-depth 
educational sessions at computer stations.
    The evolution of the Commission's approach to Tribal engagement is 
also an iterative process. While we have made significant steps forward 
over the years, much remains to be done. Developing separate tracks in 
consultations and training--with sessions geared toward those new to 
communications issues and sessions geared to those with more advanced 
knowledge--are in the planning stages for 2015 and beyond. Holding 
workshops in regions and locations in Indian County that have not yet 
hosted a regional workshop is another priority. ONAP is presently 
targeting the Northwest, North Plains, Alaska, Southwest, and Southern 
Plains regions.
    In addition, building upon the very successful Tribal E-rate 
training workshop held at the Santa Fe Indian School last November, the 
Commission and the Universal Service Administrative Company are 
planning, among other things, a series of four or five such trainings 
across Indian Country in 2015. We are working with our inter-Tribal 
government organization and Indian education partners to plan those 
sessions in conjunction with, for example, other Tribal meetings or 
gatherings and/or other Commission Tribal consultation and training 
workshops in locations proximate to significant numbers of Tribal 
Nations and in locations that involve low travel costs for attendees. 
The FCC is constantly looking to build upon the successes of its 
approach, always in consultation and coordination with Tribal Nations 
across Indian Country.
    In the recent December 2014 Connect America Order, the Commission 
revised the High-Cost Loop Support (HCLS) mechanism to distribute high-
cost support more equitably among high-cost carriers in order to 
provide better incentives for carriers to curb waste, as it had 
proposed to do in April 2014. This is a near-term reform intended to 
help us get the most out of our USF dollars. This decision was built on 
an extensive record on the proposal, including comments from rural 
carriers and their representatives, and published Commission staff 
analysis of the effects of the revision. We believe it is important to 
move forward with implementation of this mechanism to ensure that 
universal service funds are being used as cost effectively and 
efficiently as possible. We will closely monitor the effects of the 
interim HCLS mechanism on rate-of-return carriers, particularly those 
that serve Indian Country, and we will revisit this issue in the event 
that it has unanticipated results.
    With regard to the National Congress of American Indians' petition 
for reconsideration of the December 2014 Connect America Order, the 
Commission will give the petition full consideration and will act on it 
after it has been given the full and complete analysis that is 
necessary to reach a decision.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Cory Booker to 
                            Hon. Tom Wheeler
    Question 1. As you know, the television station WWOR has a special 
obligation to serve the citizens of the state of New Jersey. New Jersey 
is consumed by two out of state media markets, New York and 
Philadelphia, and thus the citizens of New Jersey face unique 
challenges to accessing local broadcast TV. I understand that some of 
my constituents have raised complaints through the appropriate process 
at the FCC, but have come back empty handed. I also understand that 
questions have been raised regarding the procedures involved in the 
case. Specifically, one issue raised through a petition filed by Voices 
of New Jersey took seven years to review.

    Question 1a. What can be done in the future to ensure that 
television licenses, which are assigned for terms of 8 years, do not 
take nearly that long to review for renewal?
    Answer. I understand your concern regarding the length of time it 
took to resolve the license renewal for WWOR-TV. As you know, since 
becoming Chairman, I have made it a priority to reduce the backlog of 
pending matters within the Bureaus. Each license renewal application 
must be reviewed individually to determine if the station operated in 
the public interest over the prior license term. In cases where 
Petitions to Deny are filed against renewal applications, the process 
can take longer, but I agree that such reviews should not take over 
seven years to complete. In August 2014, less than a year after my the 
beginning of my tenure at the Commission, a Bureau-level decision was 
issued with respect to WWOR license renewals for terms ending in 2007 
and in 2014. An Application for Review addressing both license renewals 
was filed last fall and is currently under review.

    Question 1b. How long do you anticipate the current WWOR proceeding 
will take at the Commission?
    Answer. WWOR-TV filed its latest renewal application on February 3, 
2015, with Petitions to Deny due by May 1, 2015. With regard to the 
grant of the renewal for the license term that ended in 2007, I 
understand that an Application for Review was timely filed last fall, 
and the Media Bureau is actively working on recommendations for the 
full Commission's consideration.

    Question 2. WWOR is permitted to own two television stations and 
two newspapers in the New York media market, despite the Commission's 
own rules that prevent this kind of media cross-ownership. The media 
ownership rules are in place to promote competition, diversity of 
voices, and localism in the media.

    Question 2a. What is your response regarding this matter?
    Answer. Fox Television Stations, Inc. is allowed to own WNYW-TV, 
WWOR-TV and the New York Post in the country's largest media market, 
under a temporary waiver granted by the Media Bureau in August 2014, 
pending the outcome of the 2014 Quadrennial Review of the broadcast 
ownership rules. The Media Bureau's decision to grant the temporary 
waiver currently is subject to the pending Application for Review. It 
is important to note that ownership of the Wall Street Journal is not 
implicated by our rules, as the newspaper is considered a national 
newspaper, as opposed to a local newspaper.

    Question 2b. How can we work together to ensure these values remain 
intact in the changing media landscape?
    Answer. Please be assured that I take seriously the 
responsibilities to ensure that the goals to promote competition, 
diversity of voices, and localism are at the forefront as we navigate 
the issues facing the video marketplace in the 21st century. I 
encourage you and your constituents to participate in our pending 2014 
Quadrennial Review so that the Commission has an ample record on which 
to make its policy decisions.

    Question 3. As mayor of Newark, I saw firsthand how critical local 
governments are to finding innovative solutions to the unique 
challenges they face. When it comes to broadband deployment, you don't 
have to look far to notice the inadequacies that exist in low-income 
communities and rural areas. In communities with no broadband, slow 
broadband, or few options to choose from to improve their connectivity, 
municipal broadband can be a useful tool in connecting communities. In 
January, I introduced the Community Broadband Act to preserve the 
rights of local governments to invest in broadband networks should they 
so choose. I was pleased with the FCC's recent action to grant the 
petitions of North Carolina and Tennessee which sought waivers freeing 
them from burdensome state regulations that tied their hands and 
prevented them from investing in municipal networks. While the FCC's 
action was a critically important step in the right direction, I think 
we can still do more to reduce the burdens on local governments and 
protect their freedom to innovate.

    Question 3a. Do you agree that legislation would help ensure that 
communities have the right to invest in their own broadband networks?
    Answer. I share your commitment to ensuring that all Americans have 
access to high quality broadband in light of its importance to driving 
innovation, investment, and consumer and economic benefits. Section 706 
of the Telecommunications Act of 1996 mandates that the Commission 
encourage broadband deployment and take immediate action to remove 
barriers to infrastructure investment and promote competition when 
advanced broadband is not being deployed to all Americans in a 
reasonable and timely fashion.
    In our February 26, 2015, decision, the Commission found that 
certain statutory provisions in the North Carolina and Tennessee 
statutes constituted barriers to broadband infrastructure investment 
and competition, and we preempted those provisions pursuant to our 
authority under section 706. This action was taken in response to 
petitions for preemption filed by the City of Wilson, North Carolina 
(Wilson) and the Electric Power Board of Chattanooga, Tennessee (EPB).
    The Commission's decision to preempt does not preempt restrictive 
laws with respect to municipal broadband in other states. However, the 
decision does establish a precedent for reviewing similar laws in other 
states, and the Order stated that the agency would not hesitate to 
preempt other, similar state laws if those laws constitute barriers to 
broadband deployment.
    Should Congress desire to enact legislation such as you have 
described, the Commission would provide technical assistance where 
requested and appropriate.

    Question 3b. How do you see municipal broadband helping communities 
that currently struggle to find affordable, reliable broadband?
    Answer. Broadband deployment is critically important to local 
communities and the people who live and work in them. In areas where 
there is no other provider, community broadband deployment helps to 
connect those communities to the 21st century network and all the 
benefits that come along with that connectivity. In areas where there 
may be an incumbent that is not delivering the kind of broadband that 
is sufficient to meet the community's needs, community broadband 
deployment can bring much needed competition, encouraging further 
investment and innovation. As I told NATOA last October, ``Local choice 
and competition are about as American as you can get.''
    In our February 26, 2015 decision to preempt statutory provisions 
restricting municipal broadband in Tennessee and North Carolina, the 
Commission found that preemption of the laws at issue would likely lead 
to increased overall broadband infrastructure investment and promote 
overall broadband competition in those states. In particular, the 
record in the proceeding demonstrated that ``community broadband 
solutions in Tennessee and North Carolina such as EPB and Wilson have 
played and will continue to play a critical role by providing service 
where market failures are occurring or policy goals related to 
broadband deployment are not being met and where private providers may 
have little incentive to invest. This enhances overall broadband 
deployment and competition in Tennessee and North Carolina.'' Moreover, 
the Commission found that private sector providers in the areas served 
by EPB and Wilson demonstrated a ``pattern of positive competitive 
responses'' by stabilizing broadband rates and improving service.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Tom Udall to 
                            Hon. Tom Wheeler
    Question 1. Broadband is a critical challenge. Those without 
Internet access are missing out on more than video streaming and e-
mail. They are increasingly missing out on opportunities to fully take 
part in a society that is moving more and more of its communications 
and interactions onto the Internet. According to FCC data, more than 
630,000 New Mexicans or thirty percent of our state's population lack 
access to fixed broadband speeds of 25 megabits per second. In rural 
areas of the state, seventy-seven percent lack such access to fast 
broadband. Nationwide, rural Americans are 13 times more likely to lack 
access to broadband than Americans in urban areas. So I am paying close 
attention to reforms to the Universal Service Fund. It is vital that 
these reforms succeed, especially in rural areas.

    Question 1a. How will the FCC continue to advance reforms to ensure 
that unserved areas are targeted for broadband support?

    Question 1b. How will the FCC balance the need to connect areas 
with no broadband service, while upgrading areas with slow service?
    Answer. I agree that high-speed broadband access is an essential 
component for economic growth in rural areas in states such as New 
Mexico. As you know, the deployment of broadband is a powerful platform 
that encourages economic growth and facilitates improvements in 
education, health care, public safety, and other key policy areas. That 
is why expanding high-speed broadband connections to all corners of the 
country is a top priority for the Commission.
    Last December, the Commission adopted a Connect America Fund Phase 
II Report and Order to move forward with Connect America for price-cap 
carriers. In Connect America Phase II, the Commission will offer cost 
model-calculated support to price cap carriers in high-cost areas that 
are not served by an unsubsidized facilities-based provider of 
residential voice and broadband service. Importantly, the Order raises 
the minimum broadband speed carriers are required to deploy from 4 Mbps 
to 10 Mbps, consistent with our statutory obligation to ensure that 
rural Americans have access to services that are reasonably comparable 
to those available to their urban and suburban neighbors.
    This year we will adopt the rules and requirements that will apply 
to the competitive bidding process that will help close gaps where 
large incumbent providers won't commit to extending broadband in a 
given state. No rural area should fall through the cracks. A primary 
policy goal for the competitive bidding process is to ensure that there 
is widespread participation from all providers that can deliver high-
quality service, thereby providing the most efficient use of limited 
USF dollars.
    Additionally, my fellow Commissioners and I have committed to act 
on reforming the USF support mechanisms for rate-of-return carriers in 
the coming year to ensure that we are delivering the best possible 
voice and broadband experiences to rural areas within the confines of 
our Connect America budget, while providing increased certainty and 
predictability for all carriers and a climate for increased broadband 
expansion. We have already amended our support mechanism to ensure more 
carriers in rural areas get support. I look forward to working with my 
fellow Commissioners, industry stakeholders, as well as you and your 
colleagues, to develop a solution that meets our common goal of 
ensuring that all Americans have access to robust voice and broadband 
services.

    Question 2. Chairman Wheeler, I want to thank you for your 
commitment to consultation and outreach to Tribes. One recent example 
was an E-Rate workshop held at the Santa Fe Indian School. This 
outreach is an example of how the FCC Office of Native Affairs and 
Policy (ONAP) can help the FCC tackle the digital divide facing Native 
American communities. In New Mexico, 89 percent of those living on 
Tribal lands do not even have access to fast broadband speeds. 
Nationwide, broadband adoption rates for those on Tribal lands may be 
as low as 10 percent.

    Question 2a. Will you assure me that the FCC will prioritize 
tackling the digital divide in Indian country?
    Answer. The Commission is strongly committed to working with Tribal 
Nations through meaningful and vigorous efforts on a regular basis. 
ONAP has renewed its commitment to Tribal consultation, training, and 
outreach, and the Commission's comprehensive and regional approach has 
proven unique among Federal agencies. With ONAP's leadership, for 
example, the Commission has forged partnerships with Tribal Nations and 
inter-Tribal government associations to ensure that the well-received 
Tribal Broadband, Telecom, and Media Consultation and Training 
Workshops meet the individual needs of their regions across Indian 
Country. The Commission, through ONAP, hosts these regional events for 
Tribal Nations, and at no cost to attendees.
    Basic key communications issues are covered at all of the 
workshops, including universal service, spectrum, and broadcast. In 
2014, the Commission committed to upgrade and expand its Tribal 
consultation and training efforts, launching a more intensive version 
of the workshops. Each of the 2 \1/2\ day workshops was held in Indian 
Country or, in one case, in a location requested by one of our Tribal 
partners. These locations included Tribal lands in California, Idaho, 
Minnesota, and Oklahoma, as well as the Southeast region central City 
of Nashville. And each of the workshops had a common goal--to train and 
assist Tribal Nations in developing more robust broadband, 
telecommunications, and broadcast infrastructure to serve those living 
on Tribal lands. The workshops also were coupled with deployment of the 
Native Learning Lab, a modular teaching tool developed for in-depth 
educational sessions at computer stations.
    The evolution of the Commission's approach to Tribal engagement is 
also an iterative process. While we have made significant steps forward 
over the years, much remains to be done. Developing separate tracks in 
consultations and training--with sessions geared toward those new to 
communications issues and sessions geared to those with more advanced 
knowledge--are in the planning stages for 2015 and beyond. Holding 
workshops in regions and locations in Indian County that have not yet 
hosted a regional workshop is another priority. ONAP is presently 
targeting the Northwest, North Plains, Alaska, Southwest, and Southern 
Plains regions.
    In addition, building upon the very successful Tribal E-rate 
training workshop held at the Santa Fe Indian School last November, the 
Commission and the Universal Service Administrative Company are 
planning, among other things, a series of four or five such trainings 
across Indian Country in 2015. We are working with our inter-Tribal 
government organization and Indian education partners to plan those 
sessions in conjunction with, for example, other Tribal meetings or 
gatherings and/or other Commission Tribal consultation and training 
workshops in locations proximate to significant numbers of Tribal 
Nations and in locations that involve low travel costs for attendees. 
The FCC is constantly looking to build upon the successes of its 
approach, always in consultation and coordination with Tribal Nations 
across Indian Country.

    Question 2b. How does the FCC's FY16 budget request ensure that 
ONAP will have the resources it needs to help the FCC implement its 
existing policy on consultation with Tribes on a government to 
government basis?
    Answer. If the Commission receives the funding level it has 
requested for its FY 2016 budget, those funds will be used to carry out 
the Commission's responsibilities, which includes the work of ONAP.

    Question 3. I previously authored legislation to help wireless 
consumers avoid cell phone ``bill shock'' after inadvertently exceeding 
monthly usage limits. The Cell Phone Bill Shock Act would have required 
consumer alerts before going over monthly limits as well as prior 
customer consent before a cell phone company could charge any 
``overage'' fees. This legislation was never enacted. Yet I believe it 
did help lead to the voluntary 2011 agreement by most major U.S. 
wireless carriers to provide free consumer usage alerts.

    Question 3a. How well is the voluntary 2011 agreement working?

    Question 3b. How many ``bill shock'' complaints has the FCC 
received since the agreement was announced?
    Answer. In 2013, the Commission announced that approximately 97 
percent of wireless customers across the Nation were now protected from 
bill shock as participating U.S. wireless companies had met an April 
17, 2013 deadline to provide free, automatic usage-based alerts when 
they approach or exceed plan limits for data, voice, and text, or when 
they incur international roaming charges. At the same time, as part of 
its continuing consumer education mission, the FCC held a public 
Consumer Workshop to educate consumers about these and other ways they 
can protect themselves from bill shock.
    Also, the FCC updated its Bill Shock Web Portal to give consumers 
at-a-glance status of carriers' reported compliance on bill shock 
alerts. (Visit the Web page at FCC.gov/bill-shock-alerts.) The Bill 
Shock Web Portal offers links to participating carrier websites, 
meeting commitments from the previous year's agreement with CTIA and 
Consumers Union to clearly disclose policies and tools regarding usage 
balances and alerts. The FCC's Consumer Empowerment Agenda focuses on 
harnessing technology and information to help consumers make informed 
decisions in the communications marketplace. The agency's Consumer 
Empowerment Agenda includes resources to help Americans protect 
themselves against bill shock, and other misleading or deceptive 
practices, along with greater openness and transparency efforts to make 
more data easily available to the public.
    Since the April 17, 2013, deadline through the end of 2014 the 
Commission has received approximately 400 complaints, an average of 
just fewer than 20 complaints per month over that span, an 
approximately 60 percent drop from the average of 54 complaints per 
month for the two years prior to the alerts taking effect. For context, 
the Commission received roughly 16,000 complaints per month for 
unwanted calls and text messages over the same period. Thus, it is fair 
to say that less than 20 complaints per month is not a significant 
number of complaints to cause alarm and suggests the carriers are 
complying with sending the alerts. Of course, the Commission continues 
to closely monitor complaints, and the issue as a whole, in order to be 
sure that carriers continue to alert consumers about potential bill 
shock.

    Question 4. Last year, you wrote to Verizon about your concerns 
that some features of wireless data plans seem to go beyond reasonable 
network management practices. Today, most consumers are accustomed to 
online access at home with a broadband subscription that allows 
unlimited access to data from the Internet. Yet many wireline and 
wireless Internet service providers are now experimenting with or 
implementing usage-based pricing and ``data caps.'' Consumer groups 
have asked the Commission to collect information on how companies 
implement and administer such data caps. What steps has the Commission 
taken to do so?
    Answer. I was deeply troubled by reports of providers slowing down 
speeds for selected customers who purchased ``unlimited'' data plans 
under the guise of ``reasonable network management.'' I asked the major 
wireless carriers for more information about these practices, so that 
we can more closely examine whether these practices are consistent with 
the principles of an open Internet, including the requirement that ISPs 
provide accurate and timely disclosures of their practices.
    As to whether data allowances and usage-based pricing plans more 
generally are appropriate, the Open Internet Report and Order noted 
that there is an unresolved debate concerning the benefits and 
drawbacks of these practices. As a result, we declined to make blanket 
findings about these practices and will address concerns under the no-
unreasonable interference/disadvantage standard on a case-by-case 
basis. However, in the Report and Order, we also emphasized that 
providers must disclose usage allowances under the Transparency Rule to 
ensure consumers know exactly what is included in their pricing plans. 
The Commission will continue to closely monitor this issue, including 
future consumer complaints, to ensure that usage allowances do not 
adversely impact Internet openness.

    Question 5. Chairman Wheeler, the Federal agency overseeing 
broadband providers and Internet policy should be a flagship agency 
when it comes to using the best IT tools available. Yet when record 
numbers of Americans tried to submit comments on net neutrality, the 
FCC's electronic filing system crashed. Last year, Senator Moran and I 
worked together to pass the Federal IT Acquisition Reform Act 
(``FITARA''). This will help Federal agencies save billions of taxpayer 
dollars. The FCC's new consumer complaints system is a good example of 
how IT reform should work. After Senator Nelson and I wrote to you 
asking for an online consumer complaints database, you created one that 
is much more functional than the old complaints web page. It was 
delivered in less than 6 months, for a cost of just $450,000. I want to 
encourage more of this type of ``agile'' IT reform.

    Question 5a. How do you plan to prioritize the FCC's IT reform 
efforts moving forward?
    Answer. We appreciate your work to pass FITARA--it will certainly 
drive necessary changes in the landscape of Federal Government IT. 
Thank you also for your recognition of our efforts at the FCC to move 
forward with more agile IT development designed to save millions of 
dollars and time in the delivery of services.
    The cost for the startup of the Consumer Complaint Database system 
was approximately $352,000. Accordingly, the new system was 1/6th the 
traditional systems cost and was up and running less than 90 days after 
purchase. The system epitomizes many of the agency-wide changes that we 
hope to implement for IT: inexpensive, off-the-shelf solutions, 
combined with resiliency, user-friendly options, and the potential to 
improve our internal data collection methods to increase transparency 
and inform policy-making decisions. In every instance the FCC is 
looking toward the implementation of off-the-shelf solutions that are 
cloud based and require minimal configuration as the preferred 
solution(s) for our modernization.
    Our FY16 budget outlines our specific priorities: $5.8 million to 
replace the FCC's legacy infrastructure with a managed IT Service 
provider, as well as one-time infusions of $9.6 million to rewrite the 
FCC's legacy applications as part of a modular ``shift'' to a modern, 
resilient, cloud-based platform. We also have asked for $2.2 million to 
improve the resiliency of the FCC systems, specifically to address gaps 
identified in our recent FISMA audit process.

    Question 5b. What are the most important IT systems that need to be 
modernized?
    Answer. In November 2014, the FCC received a reprogramming to apply 
$8.75 million to support initial IT upgrades. The first part of this 
process involves moving our servers off-premises to a shared Federal 
facility. We signed the contract for this essential effort on April 6, 
2015. We also are continuing basic IT modernization projects and 
planning related to modernizing our 207 legacy systems. We will 
continue with the projects described above where funding is available.
    The most urgent needs for modernization are within the core 
missions of the FCC: licensing and auctions. We also are well underway 
in rebuilding our Electronic Comment Filing System (ECFS) platform, 
which showed its age during the large-scale Open Internet rulemaking. 
It is the continuing goal of the FCC to provide platforms that support 
transparency, outreach and input as well as the other requirements of 
our constituent communities. Our core system for licensing, ULS, is at 
the top of our major system list for modernization, which in this case 
is a total re-write into a cloud infrastructure. None of this, however, 
will happen without receiving adequate funding.

    Question 6. Describe the role of your department's Chief 
Information Officer (CIO) in the development and oversight of the IT 
budget for the FCC. How is the CIO involved in the decision to make an 
IT investment, determine its scope, oversee its contract, and oversee 
continued operation and maintenance?
    Answer. The FCC's CIO is situated within the Office of Managing 
Director and works directly with both the Managing Director and the 
Chief Financial Officer. The CIO provided significant input to 
determine the FCC's IT investment--which is reflected in the Fiscal 
Year 2016 budget. All requested programmatic funding increases, apart 
from the restacking/move of the FCC, are IT-based. We continue to 
strengthen the IT staff by hiring more experienced personnel, bringing 
in highly-skilled detailees from other agencies to oversee 
implementation, and decreasing the number of contractors. The IT 
department has ``intrapreneurs'' who work closely with each bureau and 
office assessing programming in order to (1) prioritize projects 
according to available funding; and (2) provide the necessary data for 
budgeting IT projects.

    Question 7. Describe the existing authorities, organizational 
structure, and reporting relationship of the Chief Information Officer. 
While I am aware that the FCC is an independent agency, please note and 
explain any variance from that prescribed in the newly-enacted Federal 
Information Technology and Acquisition Reform Act of 2014 (FITARA, PL 
113-291) for the above.
    Answer. Although I am aware that OMB still must provide substantial 
guidance on agency implementation of the Act, the FCC was already 
moving in the right direction to ensure that our CIO had the support 
and level of responsibility contemplated by Congress. FITARA mandates a 
``significant role'' in programming, budgeting and decision-making 
related to IT at their agencies, including approving the IT portion of 
the annual budget requests agencies submit to Congress. The FCC CIO 
clearly has this responsibility within the Commission.
    The FCC's CIO works directly with the CFO and Managing Director to 
develop the budget, and he has access to enhanced procurement staff 
with an IT focus. Specifically, the CIO has implemented a cross-
Commission perspective in order to replicate capabilities and reuse 
applications across the agency--a key component of FITARA. Strategic 
sourcing and consolidation also are key initiatives. The CIO has 
demonstrated the use of both of these initiatives in the Lift and Shift 
to a Federal data center and the use of Software as a Platform in his 
new initiatives.
    In fact, the FCC has an outstanding CIO and we hope that by 
building his department and strengthening and empowering his staff, we 
will serve as a role model for IT good governance. In addition, our CIO 
has a good working relationship with the Federal CIO and is in step 
with efforts to modernize the approaches of the acquisition and 
implementation of IT in government.

    Question 8. What formal or informal mechanisms exist at the FCC to 
ensure coordination and alignment within the CXO community (i.e., the 
Chief Information Officer, the Managing Director, the FCC Bureau 
Chiefs, Chief Acquisition Officer, the Chief Finance Officer, the Chief 
Human Capital Officer, and so on)?
    Answer. Given the compact nature of the FCC, the Office of Managing 
Director (OMD) coordinates and directs the office's staff, including 
the CFO and CIO. Also situated under OMD are human resources and 
procurement office personnel. The combination of these offices within 
OMD and the elevated status of the CIO in answering directly to the 
Managing Director have created an IT-centric focus that greatly 
benefits the Commission in long-term planning efforts.
    The CIO also conducts regular briefings with the individual Bureau 
chiefs and deputies to inform them of upcoming IT related upgrades and 
changes. He also works closely with high level Commission staff to 
develop systems acquisitions requirements. The establishment of the 
``intrapreneur'' designation ensures that highly qualified IT 
representatives are attached to each bureau and office and serve as 
their advocates and representatives.

    Question 9. According to the Office of Personnel Management, 46 
percent of the more than 80,000 Federal IT workers are 50 years of age 
or older, and more than 10 percent are 60 or older. Just four percent 
of the Federal IT workforce is under 30 years of age. Does FCC have 
such demographic imbalances? How is it addressing them?
    Answer. The demographic probably is representative of all of the 
Federal Government, but the Commission does not consider an applicant's 
age when making hiring decisions. The FCC also is proud that its 
working environment encourages loyal staff and excellent retention of 
highly qualified personnel. During the past year, the FCC has 
endeavored to hire and retain qualified, skilled staff regardless of 
their age, including respected personnel detailed from other agencies. 
We believe that we need to maintain a fully staffed IT shop and 
decrease dependency on IT contractors. Until we receive essential 
funding, however, we will be unable to fully meet needed staffing 
levels.

    Question 10. How much of the FCC's budget goes to Demonstration, 
Modernization, and Enhancement of IT systems as opposed to supporting 
existing and ongoing programs and infrastructure? How has this changed 
in the last five years?
    Answer. The Government Accountability Office has noted that Federal 
agencies currently spend more than 70 percent of their IT budgets on 
maintaining legacy systems. The FCC, like other agencies, has been 
caught in this legacy trap; as of the end of FY13, we were trending 
well above even the Federal average of 70 percent. In fact, the FCC has 
trended as high as 80 percent for Operations and Maintenance (O&M) and 
this level actually increased during the past five years. A notable 
exception has been new auction system development to support the 
agency's mission and critical security upgrades.
    We have tackled the problem of legacy systems head-on and targeted 
all available resources toward modernizing our IT systems. But we 
require additional funds to make this a reality, or risk maintaining 
high-cost, antiquated and inefficient systems. The FCC's Fiscal Year 
2016 budget requests $5.8 million to replace the FCC's legacy 
infrastructure with a managed IT Service provider, as well as one-time 
infusions of $9.6 million to rewrite the FCC's legacy applications as 
part of a modular ``shift'' to a modern, resilient, cloud-based 
platform. These new funds will be dedicated to removing the legacy 
restraints imposed on our budget and allow for spending directed toward 
more economical and useful resources.

    Question 11. What are the FCC's 10 highest priority IT investment 
projects that are under development? Of these, which ones are being 
developed using an ``agile'' or incremental approach, such as 
delivering working functionality in smaller increments and completing 
initial deployment to end-users in short, six-month time frames?
    Answer. We have very modest IT investment projects compared to most 
other agencies and are currently utilizing reprogrammed funds to 
support a server move. Our FY16 budget outlines the remainder of our 
specific priorities: $5.8 million to replace the FCC's legacy 
infrastructure with a managed IT Service provider, as well as one-time 
infusions of $9.6 million to rewrite the FCC's legacy applications as 
part of a modular ``shift'' to a modern, resilient, cloud-based 
platform. We also have asked for $2.2 million to improve the resiliency 
of the FCC systems, specifically to address gaps identified in our 
recent FISMA audit process.
    At present, the development of a replacement for our ECFS (or 
``comments'') system is an important example of the continued use of 
agile development. This project, from start to finish, will take less 
than six months and use entirely agile techniques. The ZenDesk 
deployment took less than 90 days and our new tracking tool will be 
developed in a similar manner, using either PaaS or SaaS, involving no 
on-site hardware or software and supported fully in the cloud.
    Our move to ``O365'' is a top-ten priority--but it does not involve 
development, just moving our Microsoft infrastructure to a true cloud 
environment. Our highest priority development efforts are mostly 
centered on incentive auctions and licensing systems. These upgrades 
are a stop-gap measure until funding is made available for fundamental 
rewrites of those systems into a true cloud infrastructure, fully 
utilizing the agile approach.

    Question 12. To ensure that steady state investments continue to 
meet agency needs, OMB has a longstanding policy for agencies to 
annually review, evaluate, and report on their legacy IT infrastructure 
through Operational Assessments. Does FCC conduct such assessments or 
something equivalent to operational assessments? What assessments have 
you conducted and what were the results?
    Answer. Yes. We determined last year that we had 207 legacy 
systems, mostly unsupportable going forward. As a result, we developed 
a long-term IT modernization plan that is reflected in our Fiscal Year 
2016 budget. Our Fiscal Year 2016 budget requests $5.8 million to 
replace the FCC's legacy infrastructure with a managed IT Service 
provider, as well as one-time infusions of $9.6 million to rewrite the 
FCC's legacy applications as part of a modular ``shift'' to a modern, 
resilient, cloud-based platform. A rationalization process for all 
systems and applications is ongoing as part of our effort to reduce the 
overall cost and complexity of FCC systems. The initial results 
reflected almost a 50 percent reduction in the number of ``systems'' to 
be modernized and a significant reduction in active servers.

    Question 13. What are the FCC's 10 oldest IT systems or 
infrastructures? How old are they? Would it be cost-effective to 
replace them with newer IT investments?
    Answer. The FCC has identified the legacy system issue as a core 
impediment to agency efficiency and a major contributor to overpriced 
maintenance costs. It would be more cost-effective to replace these 
systems with newer IT investments and we are moving in this direction. 
The development of the new Consumer Complaint Database is an example of 
this work.
    I have been advised by our IT staff that examples of our oldest 
applications include: GenMen, ULS, CDBS, ECFS, ELS, ETFS, EDOCS, EMTS 
and PAMS. Aging Infrastructure includes: E25K, V490 servers, UPS units 
in Auctions computer room, Core Routers and the Distribution Switches 
as well as our SAN. The age of these applications and infrastructure is 
broad, but mostly falls into the over 10 year range with some probably 
approaching 20 years.
    It is more cost effective to rewrite the applications into a cloud 
infrastructure versus replacing the equipment. The initial estimate for 
just modernizing the applications in the way the FCC has been doing 
business for the past two decades would mean rewriting applications in 
antiquated code on old platforms in a waterfall approach with an 
estimate of over $22 million, not including upgrading all of the 
hardware. Further, that traditional approach is not conducive to short 
term results through agile development, which significantly reduces our 
exposure and allows us to adapt quickly to congressional and regulatory 
requirements. Our request reflects a 50 percent cost avoidance on the 
development effort alone without even addressing cost avoidance on the 
hardware.

    Question 14. How does FCC's IT governance process allow for the FCC 
to terminate or ``off ramp'' IT investments that are critically over 
budget, over schedule, or failing to meet performance goals? Similarly, 
how does your department's IT governance process allow for the FCC to 
replace or ``on-ramp'' new solutions after terminating a failing IT 
investment?
    Answer. We are currently in the process of implementing a long-term 
modernization effort. We do not have issues and problems related to 
over-budget, over-schedule or related issues due in part to a lack of 
investment in future needs. Our IT governance process, managed through 
OMD, allows for a fast turn-around through direct contact and 
discussion with the CFO and Managing Director. We have a rigorous 
investment review process for all new development and have instituted a 
review of all O&M and development efforts.

    Question 15. What IT projects has the FCC decommissioned in the 
last year? What are the FCC's plans to decommission IT projects this 
year?
    Answer. We have not decommissioned any IT projects, but did replace 
the Consumer Complaints Database system. Because of flat appropriations 
and not having significant new IT projects funded other than auctions, 
our entire focus has been on O&M for existing systems. We were 
compelled to halt improvements and upgrades to the Broadband Map this 
year due to funding restraints.

    Question 16. The newly-enacted Federal Information Technology and 
Acquisition Reform Act of 2014 (FITARA, PL 113-291) directs CIOs to 
conduct annual reviews of their agency/department's IT portfolio. While 
I am aware that the FCC is an independent agency, please describe FCC's 
efforts to identify and reduce wasteful, low-value or duplicative 
information technology (IT) investments as part of these portfolio 
reviews.
    Answer. In February 2014, the FCC conducted a top-to-bottom review 
of its internal processes and determined that IT systems at the agency 
were in serious need of modernization. Since that time, we have been 
actively engaged in modernizing the remaining portion of the 207 legacy 
systems and creating integrated systems similar to the Consumer 
Complaint Database.
    The CIO's recommendations on the IT portfolio review are clearly 
highlighted in our Fiscal Year 2016 Budget request: $5.8 million to 
replace the FCC's legacy infrastructure with a managed IT Service 
provider, as well as one-time infusions of $9.6 million to rewrite the 
FCC's legacy applications as part of a modular ``shift'' to a modern, 
resilient, cloud-based platform. We also have asked for $2.2 million to 
improve the resiliency of the FCC systems, specifically to address gaps 
identified in our recent FISMA audit process.

    Question 17. In 2011, the Office of Management and Budget (OMB) 
issued a ``Cloud First'' policy that required agency Chief Information 
Officers to implement a cloud-based service whenever there was a 
secure, reliable, and cost-effective option. While I am aware that the 
FCC is an independent agency, how many of the FCC's IT investments are 
cloud-based services (Infrastructure as a Service, Platform as a 
Service, Software as a Service, etc.)? What percentage of the 
department's overall IT investments are cloud-based services? How has 
this changed since 2011?
    Answer. The FCC currently is planning to move to cloud-based 
system. Beyond the move of Microsoft products to 0365, which is a full 
cloud-based deployment, lack of funding will limit our ability to re-
write our applications in to a cloud infrastructure. We currently have 
several examples of our ongoing initiative to move systems to the 
cloud, including: ZenDesk, Relativity, Mule API Manager, box.com, 
Google Apps for Government, Amazon Web Services, Appian, and 
CenturyLink for website deployment. We also are planning for several 
more, including; Azure, SoftLayer, Office365, Incentive Auction, ISAS 
Bidding system, BPM using ServiceNow and IdaaS using Okta. Please note 
that these involve only partial deployments in most instances. ZenDesk 
is a full cloud implementation like O365.

    Question 18. Provide short summaries of three recent IT program 
successes--projects that were delivered on time, within budget, and 
delivered the promised functionality and benefits to the end user. How 
does your department define ``success'' in IT program management? What 
``best practices'' have emerged and been adopted from these recent IT 
program successes? What have proven to be the most significant barriers 
encountered to more common or frequent IT program successes?
    Answer. The FCC rolled out the Consumer Complaint Database at about 
1/6th the traditional cost for such a project and it epitomizes many of 
the agency-wide changes that we hope to implement for IT: inexpensive, 
off-the-shelf solutions, combined with resiliency, user-friendly 
options, and the potential to improve our internal data collection 
methods to increase transparency and inform policy-making decisions. 
The roll out of VDI has made our agency more efficient and allowed for 
our workforce to be more mobile and office independent. In addition, 
the Commission has moved to electronic filing and distribution of 
licenses for most matters and we are engaged in developing a process 
for including the remainder. We also are updating ECFS, our 20 year old 
comments database, which showed strain during the Open Internet 
proceeding. Completion is targeted for the spring.
    Unfortunately, lack of funding has undermined additional system 
development projects. On April 6, 2015, we did sign a contract to move 
our server off-premises to a secure Federal cluster site in West 
Virginia. The move to O365 also is a significant project with a fixed 
price and will be delivered on time and on budget. Further, we plan to 
develop and deliver the ECFS commenting system in the same time frame 
and using the same methodologies as the complaints system. This process 
will replace the aged and much maligned system that had difficulty 
handling four million comments during our recent Open Internet ruling.
    Also, OMD is working hard on improving the searchability, 
navigability and appearance of the FCC's external website; improvements 
in search functionality should be seen within the next two months, if 
not earlier. Improving usability and appearance has involved input from 
FCC.gov stakeholders internally and externally. The status of the 
FCC.gov upgrade project is described in a recent blog post by the FCC's 
CIO: www.fcc.gov/blog/modernizing-fccgov-website.
    As part of this process, we revamped the FOIA page at fcc.gov to 
make data and filing information more readily available to members of 
the public. Information on the budget and appropriations for the 
current Fiscal Year and the number of total FTEs are available on the 
website. FOIA Annual Reports and quarterly reports to DOJ are also 
available on the website.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Joe Manchin to 
                            Hon. Tom Wheeler
    Question 1. AM radio is one of the primary ways of reaching many 
people in remote portions of West Virginia. From covering local high 
school sports, to announcing school closings and relaying essential 
emergency information, AM radio service provides important information 
to many of my constituents. I understand that the Federal 
Communications Commission (FCC) issued a Notice of Proposed Rule-Making 
titled the ``Revitalization of AM Radio Service'' in November 2013, and 
I would appreciate an update on that process.

    Question 1a. Is it accurate to say that this rulemaking is non-
controversial?
    Answer. My goal is to ensure that we are revitalizing the AM radio 
service rather than enriching it by indiscriminately awarding valuable 
FM translator licenses to a broad class of AM station owners whose 
abilities to compete in the media ecosystem vary widely. The Commission 
staff is actively reviewing the record and developing recommendations 
for the full Commission's consideration.

    Question 1b. The public comment period closed March 20, 2014. What 
is the reason for the delay?
    Answer. Commission staff is continuing to review the record in the 
proceeding and is developing recommendations for the full Commission's 
consideration. The Commission has proposed, among other things, to have 
an exclusive filing window for AM stations to apply for FM translator 
stations, and modest modifications to existing technical rules. On the 
first point, we have to determine whether there is a need to have an 
exclusive window given the current availability of FM translator 
licenses. The number of FM translator licenses has grown from 3,800 in 
2003 to about 6,300 today. An additional 1,600 new licenses will be 
issued over the next 12-18 months. On the second point, we proposed 
modest technical changes that would not erode current AM protection 
standards. However, stakeholders have proposed other changes that need 
to be carefully evaluated to ensure that we are not creating new 
interference.
    In a recent blog and a speech at the annual conference for the 
National Association of Broadcasters this month, I referenced my plans 
to conclude this item with an order in the coming weeks. I look forward 
to putting forth a proposal for my fellow Commissioners to consider in 
the near term.

    Question 2. On behalf of the Kanawha County Metro 911 and 911 call 
centers throughout this country, I commend the Commission for updating 
its E911 rules to help first responders better locate individuals 
calling from indoors with a wireless phone, but we must do more. 
According to the FCC, about 70 percent of 911 calls are placed from 
wireless phones, and that percentage continues to grow every day. The 
public has an expectation that 911 call centers know their location 
automatically, and we must commit ourselves to making that a reality.

    Question 2a. It's my understanding that the new FCC rules will 
improve the accuracy of locating wireless calls made indoors by 40 
percent over the next two years. Will these rules have any effect on 
calls made from wireless phones outdoors?
    Answer. Yes. The Commission already has location accuracy rules in 
place for wireless 911 calls made from outdoors, under which wireless 
providers must deliver location information to Public Safety Answering 
Points, or PSAPs, within 50 meters for 67 percent of calls and 150 
meters for 90 percent of calls if they use handset-based technologies 
(e.g., GPS), and within 100 meters for 67 percent of calls and 300 
meters for 90 percent of calls if they use network-based technologies. 
These rules remain in place following the Commission's recent location 
accuracy order.
    As you have noted, the new FCC location rules focus on improving 
location accuracy performance for wireless 911 calls originating from 
indoor environments. However, we expect that these rules will drive 
improved location accuracy in outdoor as well as indoor locations. 
First, the new rules measure compliance by looking at live 911 call 
data from both indoor and outdoor environments. Thus, the rules will 
incentivize wireless providers to improve location performance in both 
environments. Second, we expect that some of the technologies that 
providers plan to deploy to improve indoor location will also improve 
outdoor location. For example, data submitted in the record suggests 
that combining Assisted GPS (A-GPS) and Observed Time Difference of 
Arrival (OTDOA) technology, both of which providers plan to implement 
in their new LTE networks, will improve both indoor and outdoor 
accuracy.

    Question 2b. Is there a way to streamline the existing process 
whereby 911 centers ``ping'' wireless providers to receive detailed 
location information from callers to save time in these emergency 
situations?
    Answer. When a wireless user places a 911 call, the wireless 
provider initiates two location-based functions: (1) it uses cell tower 
ID and sector information to route the call to the appropriate 911 call 
center, and (2) it activates other location technologies, which may 
include GPS and/or network triangulation, to determine the precise 
location of the caller. Depending on the location technology used, 
generating and transmitting a precise location fix may take a number of 
seconds after the call is initiated. For example, where GPS is used, 
coordinate information on the caller's whereabouts may not be available 
to the PSAP until 12-30 seconds after the call has connected. This 
interval is sometimes referred to as the ``latency period.''
    While no location solution is likely to completely eliminate 
latency, there are ways to reduce the latency period for many 911 calls 
so that PSAPs can obtain precise location information more quickly. We 
expect that some of the new technologies being developed for indoor 
location will reduce latency significantly below 30 seconds, and in 
many cases may enable precise location information to be generated in 
no more than a few seconds. In addition, PSAPs can reduce latency by 
adjusting their bidding and rebidding procedures for retrieving 
location information as it is updated. It is our goal to ensure that 
precise location information is made available to PSAPs as quickly as 
technically possible in each 911 call, and that wireless carriers 
continue to provide updated location information throughout the call 
where available and whenever the PSAP requests such information.

    Question 2c. What are the next steps the Commission plans to take 
to improve the accuracy of location information for wireless callers 
across the board?
    Answer. The Commission's January 29, 2015 Order significantly 
strengthens its location accuracy rules for wireless 911 calls 
originating in all environments. The Order establishes transparent and 
measurable benchmarks, many of which are based on the Roadmap Agreement 
commitments made by the four nationwide carriers and similar 
commitments by the members of the Competitive Carrier Association. 
However, the Order goes beyond those voluntary commitments and is more 
comprehensive--it is stronger on vertical location, eliminates VoLTE-
only performance benchmarks, requires stringent measurement, and 
includes tools for PSAPs to monitor and seek improvement in location 
accuracy in their jurisdictions.
    With the new rules now in effect, the Commission will turn its 
focus to monitoring implementation of these requirements and ensuring 
that wireless providers meet their commitments to improve location 
accuracy for all wireless 911 calls. Key early steps to be taken by the 
wireless providers will include establishing a test bed by the 4th 
quarter of 2015 to begin testing and certifying indoor location 
technologies; beginning the standards-setting process to support the 
provision of dispatchable location information to 911 call centers; and 
developing the National Emergency Address Database and submitting a 
database security and privacy plan to the Commission.

    Question 3. The FCC requires licensees and carriers to post signs 
warning transient workers--such as roofers and other construction 
workers--about the presence of radiofrequency (RF) radiation and 
details about specific areas where the RF radiation exposure is or may 
be above the legal limit. However, many roofers and other tradesmen 
report that the signage is not always present, and, when it is, it 
oftentimes lacks important details about where the RF radiation levels 
are dangerous.

    Question 3a. It's my understanding that the FCC's Universal License 
System contains a significant amount of useful information, including 
the location, licensee contact, and power level of some--but not all--
devices currently in operation. If that is correct, why doesn't the FCC 
maintain a central database for all RF radiation generating devices?
    Answer. At this stage, the Commission is in the process of 
modernizing all of its IT systems. One of the issues that we consider 
when upgrading a specific system is how we can improve the compilation 
and use of data. Since we have been chronically underfunded in our IT 
efforts in recent years with six years of flat Commission budgets, we 
have lacked the resources to make significant improvements to any of 
our systems.
    As we continue to improve our systems and their data capabilities, 
we will consider the option and feasibility of maintaining a central 
database for all RF radiation generating devices. One of our first 
deployments envisioned is a coalescing of databases in a cloud 
deployment from their present stove piped systems as we re-write these 
mission applications to a cloud infrastructure. This will improve our 
capability and flexibility to make further improvements.

    Question 3b. Given the potential for signage to be unavailable, 
incomplete, or not properly located, what assistance does the FCC 
provide to transient workers and their employers to help them identify 
the location of RF radiation generating devices on buildings and other 
structures?
    Answer. The Commission has established requirements to protect 
workers near radio transmitters from excessive levels of radio 
frequency RF exposure. These requirements include restrictions on 
access to areas near antennas (e.g., fencing around antenna towers and 
restrictions to rooftop antenna farms) and signage to alert works to 
potential RF hazards. These rules primarily contemplated workers on 
towers who had an understanding of the steps necessary to avoid 
excessive RF exposure. As wireless technology has evolved many antennas 
have been designed to be inconspicuous and are deployed in locations 
where other types of workers who have little or no knowledge of RF may 
conduct tasks close by--painting, tree trimming, roof replacement, etc.
    The FCC has initiated a comprehensive rulemaking proceeding 
concerning RF exposure, including proposing changes in the rules to 
better protect all types of workers. We are planning to implement final 
rules to improve protections for workers later this year.
    Meanwhile, we have vigorously enforced the existing rules. In April 
of last year Verizon paid $50,000 to resolve an FCC investigation into 
violations of the Commission's RF exposure limits and agreed to 
implement a rigorous compliance plan to protect all people near 
wireless transmission facilities. We are continuing to monitor the 
compliance of other service providers.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
                         Hon. Mignon L. Clyburn
    Question 1. Under the reasoning adopted in the Open Internet Order, 
should a dial-up Internet service provider (ISP) also be classified as 
a common carrier? Does a dial-up ISP perform any functions different 
than, or in addition to, those the FCC attributes to a BIAS provider 
that would enable the FCC to classify the dial-up ISP as an information 
service provider? If so, what are those functions? Do you think 
classification of a dial-up ISP as a common carrier was something that 
anyone anticipated in 1996?
    Answer. In 2010, the FCC did not extend the Open Internet rules to 
dial-up Internet access because it concluded that the market and 
regulatory landscape for dial-up was different from broadband Internet 
access service. Particularly, the FCC found that:

        We also do not apply these [Open Internet] rules to dial-up 
        Internet access service because telephone service has 
        historically provided the easy ability to switch among 
        competing dial-up Internet access services. Moreover, the 
        underlying dial-up Internet access service is subject to 
        protections under Title II of the Communications Act. The 
        Commission's interpretation of those protections has resulted 
        in a market for dial-up Internet access that does not present 
        the same concerns as the market for broadband Internet access. 
        No commenters suggested extending open Internet rules to dial-
        up Internet access service.\1\
---------------------------------------------------------------------------
    \1\ 2010 Open Internet Order, 25 FCC Rcd at 17932 at 17935, para. 
51

    In Verizon v. FCC, the D.C. Circuit did not disturb the FCC's 
definition of broadband Internet access including the decision to 
exclude dial-up Internet access. The 2015 Open Internet Order reaffirms 
---------------------------------------------------------------------------
the FCC's 2010 findings and decision.

    Question 2. Under the Computer Inquiry rules, the FCC determined 
that the transmission component of wireline broadband service was 
limited to a connection between the customer and the ISP, and did not 
include any connections between the ISP and the rest of the Internet. 
How does the FCC justify adopting a more expansive classification in 
the Open Internet Order, which includes every ISPs' connection with the 
rest of the Internet as a subsidiary part of the common carrier service 
sold to the end user?
    Answer. If I understand your question, the Open Internet Order 
states that the reclassification of broadband Internet access service 
involves only the transmission component of Internet access service. It 
also finds that consumers' use of today's Internet to access content 
and applications is not inextricably intertwined with the underlying 
transmission component. In my opinion, the main import of the Computer 
Inquiries decisions is that they disprove the claim that the Commission 
has never before applied Title II to the transmission component of 
Internet access service. From 1980 to 2005, facilities-based telephone 
companies were obligated to offer the transmission component of their 
enhanced service offerings--including broadband Internet access service 
offered via digital subscriber line (DSL)--to unaffiliated enhanced 
service providers on nondiscriminatory terms and conditions pursuant to 
tariffs or contracts governed by Title II.

    Question 3. The definition of ``information service'' was based 
largely on the definition that applied to the Bell Operating Companies 
under the Modified Final Judgment (MFJ) following divestiture. In 
United States v. Western Elec. Co., 673 F. Supp. 525, 587-97 (D.D.C. 
1987), aff'd in part, rev'd in part, 900 F.2d 283 (D.C. Cir. 1990), the 
MFJ court determined that gateway services constituted information 
services ``under any fair reading'' of the definition. How would you 
distinguish Internet access service as offered today from those 
services that the MFJ found to fall unambiguously within the definition 
of Internet access?
    Answer. The Open Internet Order thoroughly explains, in paragraphs 
306 to 433, why classifying broadband Internet access service as a 
telecommunications service is a reasonable interpretation of the 
Communications Act. The Commission's prior decisions classifying 
broadband Internet access service as an information service are based 
largely on a factual record compiled over a decade ago, during its 
early evolutionary period. As the Open Internet Order makes clear, the 
factual premises underlying those decisions have changed. Today, it is 
more reasonable to assert that the ``indispensable function'' of 
broadband Internet access service is ``the connection link that in turn 
enables access to the essentially unlimited range of Internet--based 
services.'' This is evident from: (1) consumer conduct, which shows 
that subscribers today rely heavily on third-party services, such as e-
mail and social networking sites, even when such services are included 
as add-ons in the broadband Internet access provider's service; (2) 
broadband providers' marketing and pricing strategies, which emphasize 
speed and reliability of transmission separately from and over the 
extra features of the service packages they offer; and (3) the 
technical characteristics of broadband Internet access service.

    Question 4. The FCC and state utility commissioners long ago 
recognized that, if utility-style regulation applies to Internet access 
service, ``it would be difficult to devise a sustainable rationale 
under which all . . . information services did not fall into the 
telecommunications service category.'' \2\ Do you agree with that 
previous Commission finding?
---------------------------------------------------------------------------
    \2\ Federal-State Joint Board on Universal Service, Report to 
Congress, 13 FCC Rcd 11,501,  57 (1998).
---------------------------------------------------------------------------
    Answer. Your question refers to a 1998 Report to Congress 
concerning the implementation of universal service mandates from the 
Telecommunications Act of 1996. At that time, wireline broadband and 
DSL services were classified as telecommunications services. Thus, the 
Report, which is not a binding FCC Order interpreting the statute, was 
describing the state of Internet access service 17 years ago and it 
expressly reserved judgment on whether entities, if they provide 
Internet access over their own network facilities, were offering a 
separate telecommunications service.

    Question 5. Under the FCC's Open Internet Order rationale, why are 
the services provided by content distribution networks (CDNs) not 
classified as telecommunications services? Do they not just transmit 
information? How are the information processing, retrieval and storage 
functions of CDN services different from the information functions that 
are provided as part of broadband Internet access services?
    Answer. The 2015 Open Internet Order determined that broadband 
Internet access service does not include virtual private network (VPN) 
services, content delivery networks (CDNs), hosting or data storage 
services, or Internet backbone services, to the extent those services 
are separate from broadband Internet access service. The Order 
concluded that such services are distinct from mass market services 
which the Order defines as ``service[s] marketed and sold on a 
standardized basis to residential customers, small businesses, and 
other end-user customers such as schools and libraries.''
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Roy Blunt to 
                         Hon. Mignon L. Clyburn
    Question 1. I fully appreciate your effort to address high rates 
for phone calls between inmates and their families, friends, lawyers, 
and clergy.
    As I understand it, this issue had been languishing at the FCC for 
years and it wasn't until 2012, under your leadership as Acting 
Chairwoman, that the FCC finally issued a Notice of Proposed 
Rulemaking.
    That Notice was approved by the Commission on a bipartisan 5-0 
vote. However, when the Report and Order was voted on in 2013, it was 
approved on a party-line vote.
    As Acting Chairwoman at the time, why did this issue lose 
bipartisan support?
    Answer. I was proud of my tenure as Acting Chairwoman to work with 
my colleagues on a bipartisan basis to tackle a number of items that 
had been languishing at the Commission. Indeed, we had unanimous, 
bipartisan decisions on a number of issues including the Notice of 
Proposed Rulemaking to reform the FCC's E-rate universal service 
program, an Order to address rural call completion, an Order to reform 
the FCC's data collection for purposes of the National Broadband Map, 
and an Order implementing voluntary commitments to resolve the lack of 
interoperability in the lower 700 MHz band.
    On certain issues, my colleagues and I may agree on the goal but 
not always on the path to achieve the result. As we move forward with 
additional reforms for inmate calling services, I hope to continue to 
work with my colleagues for consensus and a solution that complies 
fully with the obligations under our statute.

    Question 2. The National Sheriffs Association, Sheriffs and state 
associations have presented data and information to show the cost they 
incur for security and administrative functions necessary to allow 
inmate calling services in correctional facilities. Are you considering 
this information? How are you working with the Sheriffs to ensure that 
your rules do not jeopardize security in jails?
    Answer. Yes, we are working with all interested parties, including 
sheriffs and correctional facilities, to ensure that reforms maintain 
safe and secure inmate communication. While it is important that 
reforms comply with the directives of the statute of reasonable rates 
and fair compensation, it is equally critical that security protocols 
remain in place.
    In February 2014, the FCC's interstate rate caps of $0.21 per debit 
or prepaid call and $0.25 for collect calls went into effect. Since 
that time, we have seen tremendously positive results with increased 
call volumes--as high as 300 percent. At the same time, I have not 
heard any concerns that the reforms have had a negative impact on 
security protocols. This result highlights the ability to achieve 
meaningful reform while maintaining advanced security protocols.
    As we move forward to adopt additional reforms, maintaining this 
balance is a priority for me. In October 2014, the FCC sought comment 
on additional reforms to inmate calling services as well as the data 
submitted by the inmate calling providers in the Second Further Notice 
of Proposed Rulemaking. Correctional authorities have filed comments 
and letters in the proceeding and we value their opinions, experiences 
and expertise. Commission staff is reviewing the record and considering 
positions from all interested parties.
    In addition, Commission staff has met with the National Sheriff's 
Association, the American Jail Association, regional correctional 
authorities and sheriffs. The dialogue with correctional authorities is 
ongoing and we welcome their perspectives and input. My door is always 
open.

    Question 3. The FCC's current proposed rules would extend FCC 
regulation over the rates charged by inmate calling service providers 
to inmates for intrastate calls, even though the states regulate 
intrastate rates. How do you justify this intrusion into states' 
rights?
    Answer. In 2013, the FCC's inmate calling reforms were limited to 
interstate calls and at that time, I asked our state colleagues to 
follow our lead. Throughout this proceeding, the Commission has 
highlighted the problems associated with excessive ICS rates and 
charges and offered to work with states to address intrastate ICS rates 
and practices. Unfortunately, only a few including Missouri, have 
instituted reforms. In fact, in other states, we have seen intrastate 
rates and site commission payments on intrastate calls actually 
increase.
    In the Second Further Notice of Proposed Rulemaking on inmate 
calling service (ICS), the Commission sought comment on the legal and 
policy considerations related to possibly reforming interstate and 
intrastate ICS rates and practices. While the proceeding is pending and 
no decision has been reached, Congress gave the FCC explicit authority 
over intrastate calls as well as authority to preempt inconsistent 
state regulations.
    In particular, Section 276 of the Communications Act of 1934, as 
amended, provides the Commission with authority over payphone service 
and inmate calling service. With regard to intrastate calls, Section 
276(b) directs the FCC to establish a per call compensation plan ``for 
each and every intrastate and interstate call.'' Moreover, Section 
276(c) states that ``[t]o the extent that any State requirements are 
inconsistent with the Commission's regulations, the Commission's 
regulations on such matters shall preempt such State requirements.'' In 
the Second Further Notice of Proposed Rulemaking, the Commission sought 
comment on these provisions, the FCC's legal authority and how to 
harmonize any forthcoming Commission regulations with state rules and 
regulations, particularly in states that have taken steps to reform ICS 
in their jurisdictions, such as Missouri. For example, the Commission 
asked about adopting exemptions to preemption of inconsistent state 
laws as well as an approach in which states would be responsible for 
regulating intrastate ICS as long as that regulation is in compliance 
with the Commission's core principles for ICS.
    The Second Further Notice remains pending and we are continuing to 
analyze the record received and meet with interested parties on the 
matter on next steps for inmate calling reforms.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Deb Fischer to 
                         Hon. Mignon L. Clyburn
    Question 1. All Commissioners, over 40 members of the Senate signed 
a letter to the FCC last year seeking a way for rate-of-return carriers 
to receive USF support for broadband-only subscribers. When will the 
FCC make this bipartisan priority a reality?
    Answer. I reiterate my support to reform the universal service 
regime for rate of return carriers to address the gap in universal 
service when consumers want to subscribe only to standalone broadband. 
The current universal service program lacks the proper incentives to 
reward carriers for deploying broadband networks and having consumers 
adopt broadband. The status quo, in fact, penalizes carriers for doing 
just that by taking away certain universal service support when 
customers subscribe to standalone broadband. The FCC needs to realign 
incentives and reward carriers for deploying broadband networks and 
doing so in an efficient manner.
    Last year, the FCC unanimously adopted four principles to guide 
universal service reforms for rate of return carriers: (1) staying 
within the existing budget of approximately $2 billion a year; (2) 
distributing support equitably and efficiently; (3) distributing 
support based on forward-looking costs; and (4) ensuring that no double 
recovery occurs. Last month, I spoke to NTCA's legislative conference 
and reiterated my support for these principles and discussed how to 
turn these principles into reality in a manner that is predictable and 
enables carriers to invest and plan.
    To truly reach our goal of universal service, however, we need both 
(1) access to the facilities and (2) access that is affordable. Without 
both legs in place, the effort will not stand. What is too rarely 
stated is the fact that the principle of ensuring universal access to 
low-income consumers shares equal weight in the statute with the 
principle that high cost, rural and insular areas should have access to 
reasonably comparable service at reasonably comparable rates to urban 
areas. Rate of return carriers serve areas that are often less dense 
and higher cost than urban areas, so the universal service fund plays a 
pivotal role in the deployment and maintenance of these networks. While 
carriers, of course, invest their own capital, Federal universal 
service support is critical in closing the gap between investment and 
return in less dense, rural areas. In addition, universal service is 
necessary to ensure that the service, once deployed, is affordable for 
all. So, it is past time to not only reform the high cost program but 
also to modernize the FCC's only means-tested adoption program to move 
it from 1985 to 2015 to ensure that consumers in rural areas can afford 
to adopt broadband. Both pieces are key to ensure that consumers in 
high cost, rural areas have access to broadband.
    While the Chairman determines the timing of items, I remain ready 
and able to assist in any way to move forward with reforms. I look 
forward to working with the Chairman and my colleagues on meaningful 
reforms for consumers served by rate of return carriers.

    Question 2. All Commissioners, what effect does reclassification 
have on the costs that cable ISPs will have to pay to attach their 
wires to utility poles and what will this change mean for my rural 
constituents that are cable broadband customers?
    Answer. The FCC's Open Internet Order removes impediments to 
broadband competition and deployment by allowing new entrants access to 
poles. Access to poles, as well as rights of way, are critical for 
infrastructure build-out and the FCC's reclassification ensures that 
all broadband providers have the right and ability to access poles. 
Competition leads to better service and lower prices for consumers.
    In terms of the rates paid by cable providers for access to pole 
attachments, the FCC in the Open Internet Order cautioned that any 
increases could ``undermin[e] the gains the Commission achieved by 
revising the pole attachment rates paid by telecommunications 
carriers.'' The FCC also committed to ``monitor[] marketplace 
developments following this Order and can and will promptly take 
further action in that regard if warranted.''
    If you are aware of any instances where cable providers are faced 
with increases in the cost to access poles, please let me know. I want 
to ensure that the FCC follows through with its commitment to take 
swift action if there is evidence that pole attachment rates are 
increasing.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                         Hon. Mignon L. Clyburn
    Question 1. I believe that FCC Process reform is long overdue. Do 
you believe that we can make simple changes to the rulemaking process 
at the FCC that would create more transparency? Do you believe that we 
should codify the rulemaking process? Do you believe a proposed rule or 
amendment to a rule should be published for at least 21 days? If you do 
not believe that we should publish a proposed rule or amendment for at 
least 21 days do you believe it should be published before the vote at 
all?
    Answer. I am happy to serve as a resource to your Office as you 
consider reforms that could make the FCC's processes more efficient, 
transparent, and accessible to the public. I am pleased to report that 
the Commission has successfully reduced a significant backlog of items 
before us. The total volume of items pending at the FCC for more than 
six months has dropped by more than 44 percent since May 1, 2014. 
Furthermore, the total volume of licensing-related items pending more 
than six months at the Commission has dropped by more than 37 percent 
since May 1, 2014. Finally, the Commission has seen an over 17 percent 
drop in the number of applications for review and petitions for 
reconsideration pending more than six months since May 1, 2014. The 
Bureaus and Offices also have achieved significant backlog reductions. 
For example, the Enforcement Bureau has closed nearly 8,000 cases since 
April 2013. The Wireless Bureaus has resolved over 2,000 applications 
older than six months. And the Media Bureau has reduced its pending 
AFRs by over 50 percent and granted nearly 1,000 license renewals in 
the fourth quarter of 2014 alone. We share the concern of the Committee 
that we ensure process reform increases--rather than reduces--
efficiencies. I hope that any specific changes to the rulemaking 
process will not reduce the agency's flexibility to address certain 
problems in the most efficient manner. I also hope that any statutory 
changes to the rulemaking process would not impede our ability to 
deliberate among each other and change initial rule proposals.

    Question 2. Would you please propose one regulation that we should 
eliminate?
    Answer. It would be helpful if we could eliminate the Sunshine Act 
rule that prohibits more than two FCC Commissioners from meeting on 
policy at the same time unless there is a public notice announcing such 
a meeting.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Cory Booker to 
                         Hon. Mignon L. Clyburn
    Question 1. As mayor of Newark, I saw firsthand how critical local 
governments are to finding innovative solutions to the unique 
challenges they face. When it comes to broadband deployment, you don't 
have to look far to notice the inadequacies that exist in low-income 
communities and rural areas. In communities with no broadband, slow 
broadband, or few options to choose from to improve their connectivity, 
municipal broadband can be a useful tool in connecting communities. In 
January, I introduced the Community Broadband Act to preserve the 
rights of local governments to invest in broadband networks should they 
so choose. I was pleased with the FCC's recent action to grant the 
petitions of North Carolina and Tennessee which sought waivers freeing 
them from burdensome state regulations that tied their hands and 
prevented them from investing in municipal networks. While the FCC's 
action was a critically important step in the right direction, I think 
we can still do more to reduce the burdens on local governments and 
protect their freedom to innovate.

    Question 1a. Do you agree that legislation would help ensure that 
communities have the right to invest in their own broadband networks?
    Answer. In my opinion, local elected officials know and are in the 
best position to address the critical needs of their constituents, be 
it education, public safety or infrastructure deployment such as 
broadband. They should not be prevented from responding to requests of 
citizens, particularly if there is a means to bring neighborhoods out 
of the digital darkness. There are communities that have literally 
begged the private sector for high speed Internet, but have been 
repeatedly turned down. I am proud that the FCC has drawn a line in the 
sand in favor of local choice to ensure that municipalities have the 
right to decide whether or not to deploy broadband networks.
    As you note, however, the FCC's decision is limited to removing 
barriers to infrastructure deployment in two states, North Carolina and 
Tennessee. If another community is being deprived of the benefits of 
broadband, it must file its own petition requesting relief. The FCC 
will need to seek comment on any petition and evaluate the record 
before reaching a decision.
    I wish to applaud your leadership and that of Senators McCaskill, 
Markey, King, and Wyden, in introducing the Community Broadband Act of 
2015. In the past, similar legislation enjoyed bipartisan support, and 
I will offer any assistance I can as Congressional offices consider 
this proposed legislation.

    Question 1b. How do you see municipal broadband helping communities 
that currently struggle to find affordable, reliable broadband?
    Answer. America has been committed to the ideal of universal 
service for over a century. This principle is so important that 
Congress enshrined this mandate in Section 254 of the Communications 
Act, as amended. Section 254 makes clear that ``[c]onsumers in all 
regions of the Nation, including low-income consumers and those in 
rural, insular, and high cost areas . . . should have access to 
telecommunications and information services, including . . . advanced 
telecommunications and information services'' and that such services 
should be ``affordable.''
    In the 20th century, the FCC met its universal service goal by 
ensuring that all Americans had access to voice telephone service. 
Today, broadband is an essential service, and, I believe, we are 
falling woefully short of our statutory mandate in the 21st century 
with respect to broadband. Too many consumers lack still broadband 
access and, for many more, the service is simply not affordable.
    The consequences of being left in the digital darkness are 
devastating--depriving communities and their citizens of tools that 
could greatly improve their lives. Municipalities have at times asked, 
and even pleaded, for the private sector to respond to requests and 
deploy broadband in their communities. Too many times, I am sad to say, 
the answer has been no.
    Municipal broadband projects may be the only way for citizens to 
receive affordable, reliable broadband, with localities often working 
through public-private partnerships to close existing divides. Too many 
foreclosed opportunities currently exist because state laws are 
preventing cities and towns from deploying their own networks even if 
their constituents overwhelmingly endorse the effort. Communities are 
being left behind, digital gaps are widening, and promises of universal 
access remain unfilled. With the vote that I cast on February 26th, one 
more barrier has been lifted in two states.

    Question 2. Thank you for your leadership on prison phone reform 
and I applaud the FCC's actions to better regulate interstate prison 
phone calling rates so that inmates can stay better connected to their 
families, and ultimately have a better chance at rehabilitation and 
assimilation back into society. I recently reintroduced the REDEEM Act 
with Senator Rand Paul, which aims to provide comprehensive reforms to 
our Nation's prison system and end the perpetual cycle of imprisonment. 
Just as you saw abuses in inmate calling rates, it appears the next 
frontier could be abuses in new technologies like video conference 
calls. I'm concerned that in-person visits may be replaced by video 
conference calls, in order for prisons to profit of these visitations.

    Question 2a. Do you share these concerns?
    Answer. Yes, I share these concerns. We know that meaningful 
contact helps to promote rehabilitation and reduce recidivism and as a 
result, we should do everything in our power to promote communication 
and connectivity with friends and family. Unfortunately, high rates for 
inmate calling have discouraged such contact and ever increasing rates 
make it difficult, if not impossible, for struggling families to stay 
in touch.
    I was extremely proud during my term as Acting Chairwoman to take a 
critical first step in tackling this issue. In August 2013, the FCC 
adopted interstate rate caps to ensure that those rates are just and 
reasonable. After the FCC's rate caps for interstate inmate calling 
service (ICS) calls went into effect in February 2014, interstate call 
volumes went up between 70 and 300 percent. These data remove any doubt 
that unaffordable rates discourage contact while a more affordable 
regime promotes communications.
    I share your concern that services are migrating to video 
visitation and the same marketplace failures we saw with voice services 
are likely to flow to video visitation. In the current inmate calling 
market, providers compete to become a monopoly provider of inmate 
calling services to a correctional facility. All too often, the 
selection of the provider is based on which company promises the 
biggest economic return to the facility without regard to the cost 
borne by the consumer. While the FCC is poised to reform calling 
services, we do not want to create a loophole where calls migrate to 
another platform and consumers are once again left with an unaffordable 
rate regime.
    For this reason, the FCC recently sought comment on the need for 
reform of alternative technologies in correctional facilities in our 
October 2014 Second Further Notice of Proposed Rulemaking. We 
specifically asked about video visitation as the FCC needs to be 
forward-looking and ensure that protections are in place today and in 
the future. We are working to develop a record on what is occurring and 
whether the FCC needs to intervene.

    Question 2b. What more must be done to bring justice to prison 
communications and allow families to stay connected?
    Answer. The FCC must reform all aspects of inmate calling services 
to bring final and comprehensive relief to families, friends, lawyers 
and clergy. While the FCC's rate caps have had positive results as 
shown by call volumes increasing, the reforms were limited to 
interstate calls. Approximately 85 percent of ICS calls are intrastate 
and these rates have not been reformed. We have also seen payments to 
facilities, known as site commissions, go up and new fees and charges, 
known as ancillary charges, increase. The FCC needs to act swiftly to 
bring relief and adopt a reasonable rate structure for all ICS calls.
    Data underscore the critical need for the FCC to promote 
connectivity and reform inmate calling services. In April 2014, the 
United States Department of Justice released a report analyzing the 
five-year recidivism rates for over 400,000 prisoners in 30 states, and 
the results are troubling. Two-thirds were rearrested within three 
years, and three-quarters were rearrested within five years. These 
trends come with enormous societal costs. In addition to more crime, 
crowded correctional facilities, more expensive prisons, and the 
judicial time required to prosecute these offenses, it costs an average 
of $31,000 per year to house each inmate. While we do not know how to 
solve all of the criminal justice challenges, we do know that 
meaningful communication helps to promote rehabilitation, thus reducing 
recidivism.
    It is my hope that the FCC will take final action this summer. I 
appreciate your leadership on this issue and look forward to working 
with you to bring justice to the Inmate Calling Services regime.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
                         Hon. Michael O'Rielly
    Question 1. What are your views on the interconnection provisions 
in the Open Internet Order and the record on which the FCC based such 
provisions?
    Answer. I am deeply troubled by the Commission's decision to impose 
regulations on what has been known for years as peering, especially 
under a vague standard contained in section 201 of the Communications 
Act (i.e., just and reasonable) and without any evidence of actual harm 
to providers or consumers. The Commission's lack of a record to 
establish such a regime is astounding and is a deep exposure point for 
future litigation from a process perspective. More importantly, I do 
not agree with the claims of statutory authority used to justify the 
new review process. Lastly, the case-by-case structure based on 
complaints by those disagreeing with how private negotiations are going 
creates a high level of uncertainty that will cloud the peering 
marketplace.

    Question 2. You recently wrote a blog post critical of the use of 
``delegated authority.'' Can you expand on your concerns in this area, 
and do you fear that ``delegated authority'' has become a mechanism for 
diminishing the ability of commissioners to influence the FCC's 
business?
    Answer. The use of delegated authority is not a new practice by the 
Commission, but its increased use is a troubling one. Overall, its use 
is a systemic effort to expand the power of the majority to effectuate 
its agenda under the guise of efficiency. Unfortunately, by decreasing 
debate and thoughtful review, it increases the likelihood that outcomes 
and decisions are unsustainable--both from a process and policy 
perspective. In fact, I am living with decisions to delegate authority 
to staff made years ago by previous Commissions, which seems 
unreasonable. I have advocated specific changes to delegated authority 
that would address the biggest drawbacks to its use. These include 
requiring the staff to notify Commissioners no later than 48 hours 
before release of an item in which delegated authority is used for non-
routine matters. This uniform period is not provided today. 
Additionally, Commissioners should have the right to undelegate an item 
and resolve it by a full Commission vote.
    Question 3. The FCC and state utility commissioners long ago 
recognized that, if utility-style regulation applies to Internet access 
service, ``it would be difficult to devise a sustainable rationale 
under which all . . . information services did not fall into the 
telecommunications service category.'' \1\ Do you agree with that 
previous Commission finding?
---------------------------------------------------------------------------
    \1\ Federal-State Joint Board on Universal Service, Report to 
Congress, 13 FCC Rcd 11,501,  57 (1998).
---------------------------------------------------------------------------
    Answer. Disappointingly and against my views, I predict that over 
time the Commission will expand its reach under the new Net Neutrality 
rules beyond broadband networks to apply to all other types of 
information services, such as the application layer (i.e., edge 
providers). Despite promises not to do this, there is nothing in the 
rules that would prevent it from occurring and the natural mission 
creep of a regulatory body will expand into areas not supposedly 
intended. The reality is that this Commission has already extended 
itself into the edge provider area in a couple of instances (e.g., text 
to 911). Additionally, the lines between broadband networks and edge 
providers have blurred and will continue to do so, making it more 
likely that the Commission will overstep this imaginary line.
                                 ______
                                 
      Response to Written Question Submitted by Hon. Roy Blunt to 
                         Hon. Michael O'Rielly
    Question. In 1991, Congress passed the Telephone Consumer 
Protection Act (TCPA). The intent of the legislation was to cut down on 
the growing number of unwanted telemarketing calls interrupting 
families and consumers at home. At the time, 90 percent of households 
used a landline telephone, but today technology is changing as more 
households ``cut the cord'' and use wireless phones.
    Despite the change in technology, TCPA regulations have not kept 
pace and need to be modernized.
    Today, there are numerous petitions that have been pending at the 
FCC for months, and in many cases for over a year.
    The lack of action by the FCC is hurting consumers. For example, as 
Chairman of the Appropriations Subcommittee on Labor, Health, and 
Education, I hear from student loan servicers who cannot contact 
graduates in danger of becoming delinquent on their payments.
    This is detrimental to a student's long-term credit, and the 
problem extends to virtually every business across every sector of the 
economy.
    Commissioner O'Rielly, is it possible for the FCC to address this 
issue?
    Answer. I believe that it is an absolute necessity that the 
Commission act on the issues raised by the more than almost three dozen 
petitions seeking clarity and relief from the TCPA, as authorized by 
the statute, in order to permit the offering of beneficial services to 
consumers by legitimate companies. Disappointingly, a number of parties 
have argued that any action on such petitions would be an effort to 
flood consumers with robocalls, which is certainly not my goal nor a 
realistic assessment. I am hopeful that the Commission will be able to 
overcome this demagoguery and thoughtfully act on this issue in the 
near future.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Deb Fischer to 
                         Hon. Michael O'Rielly
    Question 1. All Commissioners, over 40 members of the Senate signed 
a letter to the FCC last year seeking a way for rate-of-return carriers 
to receive USF support for broadband-only subscribers. When will the 
FCC make this bipartisan priority a reality?
    Answer. As I previously promised to Chairman Thune, I will dedicate 
the necessary energy and time to resolve the remaining pieces of USF 
reform, including developing solutions for rate-of-return carriers. 
During my time at the Commission, I have actively engaged the carriers 
and Commission staff on ways to move forward with the intent to reach 
resolution in quick fashion. I am worried, however, that meeting an 
year-end deadline will require some significant changes in the 
priorities of the Commission, including resources and staff, as well as 
a willingness of all parties to find an acceptable compromise. I am 
hopeful that the recent attention to this issue, as evident by it being 
raised in the Commerce hearing, will expedite the timeline.

    Question 2. All Commissioners, what effect does reclassification 
have on the costs that cable ISPs will have to pay to attach their 
wires to utility poles and what will this change mean for my rural 
constituents that are cable broadband customers?
    Answer. At this point in time, it would certainly seem that the 
decision by my colleagues to reclassify retail broadband Internet 
access service as a telecommunications service will lead to rate 
increases for pole attachments, as governed by section 224 of the 
Communications Act. I am worried that any increases will make it more 
expensive to deploy broadband by companies and access broadband by 
consumers, especially in rural America. While the Commission has 
indicated that this is not the desired outcome, and staff is now 
seeking comment on an aspect of this issue, it is unclear what the 
outcome or legal justification will be.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                         Hon. Michael O'Rielly
    Question 1. I believe that FCC Process reform is long overdue. Do 
you believe that we can make simple changes to the rulemaking process 
at the FCC that would create more transparency? Do you believe that we 
should codify the rulemaking process? Do you believe a proposed rule or 
amendment to a rule should be published for at least 21 days? If you do 
not believe that we should publish a proposed rule or amendment for at 
least 21 days do you believe it should be published before the vote at 
all?
    Answer. I appreciate your great leadership on this issue and concur 
with your efforts. I have outlined a number of ways to reform the 
Commission's procedures, particularly as it pertains to resolving 
issues at the Commissioner level, that would improve transparency, 
efficiency and accountability. I agree with each of your questions 
posed above.

    Question 2. Would you please propose one regulation that we should 
eliminate?
    Answer. While it is difficult to select one specific rule for 
elimination, I suggest that it is time to consider the outright ending 
of the Commission's separations regime. In it, the Commission and 
states allocate telecommunications carriers' costs based on whether the 
service is Federal or state in nature. In our modern communications 
environment, and particularly given the purely interstate nature of the 
Internet, the old separations structure is a good candidate for being 
eliminated or at least seriously curtailed. The Federal-State Joint 
Board on Separations is currently considering separations reform, and I 
hope that they will complete their comprehensive review, with an eye 
towards ending these rules, in the near future.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
                             Hon. Ajit Pai
    Question 1. What are your views on the interconnection provisions 
in the Open Internet Order and the record on which the FCC based such 
provisions?
    Answer. The Notice of Proposed Rulemaking (NPRM) discussed IP 
interconnection in a single paragraph, tentatively concluding that the 
FCC should maintain the previous restrained approach, so that the Part 
8 ``Open Internet'' rules would not apply ``to the exchange of traffic 
between networks, whether peering, paid peering, content delivery 
network (CDN) connection, or any other form of inter-network 
transmission of data, as well as provider-owned facilities that are 
dedicated solely to such interconnection.'' Nevertheless, the Open 
Internet Order subjected IP interconnection arrangements to sections 
201 and 202 of the Communications Act, arrogating to the FCC the power 
to order an Internet service provider ``to establish physical 
connections with other carriers, to establish through routes and 
charges applicable thereto . . . and to establish and provide 
facilities and regulations for operating such through routes.'' In 
other words, the Open Internet Order adopted an unprecedented approach 
radically different from what the NPRM proposed. The record is hardly 
adequate to justify such a decision. Indeed, the best evidence in the 
record suggests the free market for interconnection has been an 
unmitigated success, with transit rates falling 99 percent over the 
last decade. In short, that decision was both unwise and unlawful.

    Question 2. The FCC and state utility commissioners long ago 
recognized that, if utility-style regulation applies to Internet access 
service, ``it would be difficult to devise a sustainable rationale 
under which all . . . information services did not fall into the 
telecommunications service category.'' \1\ Do you agree with that 
previous Commission finding?
---------------------------------------------------------------------------
    \1\ Federal-State Joint Board on Universal Service, Report to 
Congress, 13 FCC Rcd 11,501,  57 (1998).
---------------------------------------------------------------------------
    Answer. I do.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Roy Blunt to 
                             Hon. Ajit Pai
    Question 1. Commissioner Pai, regarding the FCC's actions on inmate 
calling services, I saw that you voted in favor of the 2012 Notice of 
Proposed Rulemaking, and that the Notice was adopted by a 5-0 vote. 
However, you voted against the final Order in 2013, and you wrote a 
dissenting opinion to the Order. Can you elaborate for the record why 
you dissented?
    Answer. I dissented from the Order because it was legally infirm 
and bad policy. On the legal question, I thought the Order violated the 
Administrative Procedure Act by adopting rules that had never been 
proposed and by ignoring record evidence that contradicted the Order's 
conclusions. On the policy side, I would have supported action to 
institute simple and reasonable rate caps. But the Order instead 
combined de facto rate-of-return regulation for ICS providers at all 
correctional institutions in America, which the FCC could not have 
administered effectively, with a flawed rate cap that would have 
resulted in county jails, secure mental health facilities, and juvenile 
detention centers scaling back their security measures or even 
terminating inmate calling services entirely. Five months after the FCC 
adopted the Order, the D.C. Circuit Court of Appeals stayed the 
majority of the Order from taking effect, presumably because it 
identified similar shortcomings in the FCC's decision.

    Question 2. The FCC now has proposed rules to extend its regulation 
over the rates charged by inmate calling service providers to inmates 
for intrastate calls, even though the states regulate intrastate rates. 
Do you believe the FCC can justify this intrusion into states' rights?
    Answer. I am skeptical that the FCC has the authority to regulate 
the intrastate telephone rates of inmate calling service providers 
given section 2 of the Communications Act, which states that nothing in 
the Act ``shall be construed to apply or to give the Commission 
jurisdiction with respect to [  ] charges, classifications, practices, 
services, facilities, or regulations for or in connection with 
intrastate communication service by wire or radio of any carrier.''
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Deb Fischer to 
                             Hon. Ajit Pai
    Question 1. All Commissioners, over 40 members of the Senate signed 
a letter to the FCC last year seeking a way for rate-of-return carriers 
to receive USF support for broadband-only subscribers. When will the 
FCC make this bipartisan priority a reality?
    Answer. Two years ago, I called on the FCC to reform the USF to 
support broadband-capable facilities for rate-of-return carriers. And 
though progress has been slow--it took more than a year before the 
Commission sought comment on a standalone-broadband mechanism for rate-
of-return carriers in June 2014--we're nearing the end. Along with my 
fellow Commissioners, I have committed to working towards adoption of a 
standalone-broadband mechanism by the end of the year. Although as a 
Commissioner I do not set the agenda, I am hopeful that we will remain 
on course.

    Question 2. All Commissioners, what effect does reclassification 
have on the costs that cable ISPs will have to pay to attach their 
wires to utility poles and what will this change mean for my rural 
constituents that are cable broadband customers?
    Answer. Reclassification is likely to increase the costs of cable 
ISPs by $150-200 million per year, increasing the cost of broadband to 
rural consumers. That's because cable ISPs will no longer qualify for 
the section 224(d) pole attachment rate (the cable rate) and instead 
will have to pay the higher section 224(e) rate (the telecom rate). 
Some companies will try to recoup these costs through higher rates; 
others will delay or avoid investment in rural America. Either way, it 
means higher prices and lower speeds for your rural constituents going 
forward.

    Question 3. Commissioner Pai, can you share your views on the so-
called general conduct rule and what it would mean for innovation and 
regulatory certainty? Do you believe this language is written in a way 
to only apply to ISPs?
    Answer. The FCC's new Internet conduct standard gives the FCC a 
roving mandate to review business models and upend pricing plans that 
benefit consumers. With only seven vaguely worded--and non-exhaustive--
factors to guide enforcement, the FCC will have almost unfettered 
discretion to decide what business practices clear the bureaucratic 
bar, and decisions about network architecture and design will no longer 
be in the hands of engineers but bureaucrats and lawyers. As the 
Electronic Frontier Foundation wrote: This open-ended rule will be 
``anything but clear,'' ``suggests that the FCC believes it has broad 
authority to pursue any number of practices,'' and ``gives the FCC an 
awful lot of discretion, potentially giving an unfair advantage to 
parties with insider influence.'' Even FCC leadership conceded that 
``we don't really know'' what the Internet conduct rule prohibits, and 
``we don't know where things go next.'' That is the very definition of 
regulatory uncertainty, and entreprenuers will need to start seek 
permission from the FCC before innovating.
    Although the rule apparently applies only to ISPs at this time, the 
reasoning underlying the rule and the FCC's expansive interpretation of 
section 706 of the Telecommunications Act gives the FCC a platform to 
apply this rule throughout the Internet ecosystem going forward.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                             Hon. Ajit Pai
    Question 1. I believe that FCC Process reform is long overdue. Do 
you believe that we can make simple changes to the rulemaking process 
at the FCC that would create more transparency? Do you believe that we 
should codify the rulemaking process? Do you believe a proposed rule or 
amendment to a rule should be published for at least 21 days? If you do 
not believe that we should publish a proposed rule or amendment for at 
least 21 days do you believe it should be published before the vote at 
all?
    Answer. I agree that changes should be made to the rulemaking 
process at the FCC in order to provide for greater transparency. The 
American people are too often left in the dark when it comes to agency 
decision-making. In the meantime, favored special interests are able to 
gain access to ``non-public'' information. This is wrong. The American 
people have a right to know what their government is doing. I therefore 
believe that drafts of all agenda items, including proposed rules or 
amendments to rules, should be released to the public at least 21 days 
prior to FCC meetings. I also favor codifying this practice in the 
FCC's rules.

    Question 2. Would you please propose one regulation that we should 
eliminate?
    Answer. There are many candidates, but one particularly outdated 
rule that the Commission should eliminate is the newspaper-broadcast 
cross-ownership prohibition. That regulation was enacted in 1975, a 
time when the information marketplace was vastly different than it is 
today. Back then, cable news didn't exist; neither did the Internet. 
Now, Americans can access an ever-widening range of news and 
information online at any time, day or night, so fewer and fewer of us 
choose to subscribe to a daily newspaper. And as online advertising 
becomes ever more local and mobile, the advertising niche once served 
by newspapers is fading fast. The numbers say it all. Since the 
newspaper-broadcast cross-ownership rule was enacted in 1975, over one 
in five newspapers in the United States has gone out of business. 
During that same time period, while the number of households in our 
country has increased by over 55 percent, newspaper circulation has 
declined by more than 25 percent. Had the prohibition on newspaper-
broadcast cross-ownership been eliminated years ago, the industry's 
prospects might look brighter today. Investments in newsgathering are 
more likely to be profitable when a company can distribute news over 
multiple platforms. And cross-owned television stations on average 
provide their viewers with more news than do other stations. Given 
these facts and the substantial challenges facing the newspaper 
business, it doesn't make sense to single out broadcasters and prevent 
them from operating newspapers. If you are willing to invest in a 
newspaper in this day and age, the government should be thanking you, 
not standing in your way.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
                        Hon. Jessica Rosenworcel
    Question 1. Under the reasoning adopted in the Open Internet Order, 
should a dial-up Internet service provider (ISP) also be classified as 
a common carrier? Does a dial-up ISP perform any functions different 
than, or in addition to, those the FCC attributes to a BIAS provider 
that would enable the FCC to classify the dial-up ISP as an information 
service provider? If so, what are those functions? Do you think 
classification of a dial-up ISP as a common carrier was something that 
anyone anticipated in 1996?
    Answer. The Open Internet Order limits its scope to ``broadband 
Internet access service'' which excludes dial-up Internet service. See 
Open Internet Order, FCC 15-24,  187, n.456. This exclusion was 
initially adopted in 2010. At that time, the Commission determined that 
dial-up Internet access service should be excluded from the definition 
of broadband Internet access service for three primary reasons. First, 
Title II regulations already apply to the telephone connections that 
dial-up subscribers use to access dial-up services. Second, the market 
for dial-up Internet access services did not present the same concerns 
as the market for broadband Internet access. Namely, ``telephone 
service has historically provided the easy ability to switch among 
competing dial-up Internet access services.'' 2010 Open Internet Order, 
25 FCC Rcd 17905, 17935,  51. And third, due to the slow speeds of 
dial-up, many of the Internet applications and services--such as 
streaming video--that may be the most susceptible to discriminatory 
conduct, are unavailable as a practical matter over dial-up. See 2009 
Open Internet Notice of Proposed Rulemaking, 24 FCC Rcd 13064, 13101,  
91, n.209, cited in 2010 Open Internet Order at n.161. As such, the 
Open Internet Order does not address the regulatory classification of 
dial-up Internet access service. For these reasons, I believe the 
exclusion of dial-up Internet service from the definition of broadband 
Internet access service makes sense.

    Question 2. Under the Computer Inquiry rules, the FCC determined 
that the transmission component of wireline broadband service was 
limited to a connection between the customer and the ISP, and did not 
include any connections between the ISP and the rest of the Internet. 
How does the FCC justify adopting a more expansive classification in 
the Open Internet Order, which includes every ISPs' connection with the 
rest of the Internet as a subsidiary part of the common carrier service 
sold to the end user?
    Answer. Broadband service--as it is offered today--did not exist at 
the time the FCC's Computer Inquiry regime was put in place back in 
1985. The Computer Inquiry rules distinguished between (1) ``basic'' 
services, which were subject to common carrier regulation; and (2) 
``enhanced'' services which were not. See Amendment of Section 64.702 
of the Comm'n's Rules & Regs, Final Decision, 77 F.C.C. 2d 384,  115-
23 (1980) (``Computer II''). This distinction was effectively codified 
by Congress in the definitions of ``telecommunications service'' and 
``information service'' in the Telecommunications Act of 1996. In Brand 
X, the Supreme Court held that those statutory terms were ambiguous 
with respect to their application to cable modem service and that the 
Commission is entitled to deference. Nat'l Cable & Telcomms. Ass'n v. 
Brand X Internet Servs., 545 U.S. 967, 986-1000 (2005).
    In the Open Internet Order, the Commission exercised its authority, 
consistent with Brand X, to interpret the statutory terms 
``telecommunications service'' and ``information service'' based on the 
current facts in the record about broadband Internet access service. 
The Commission also found that ``disputes involving a provider of 
broadband Internet access service regarding Internet traffic exchange 
arrangements that interfere with the delivery of a broadband Internet 
access service end user's traffic are subject to our authority under 
Title II of the Act.'' Open Internet Order,  204. For this reason, the 
Commission found that the definition of broadband Internet access 
service ``includes the exchange of Internet traffic by an edge provider 
or an intermediary with the broadband provider's network.'' Open 
Internet Order,  195.

    Question 3. The definition of ``information service'' was based 
largely on the definition that applied to the Bell Operating Companies 
under the Modified Final Judgment (MFJ) following divestiture. In 
United States v. Western Elec. Co., 673 F. Supp. 525, 587-97 (D.D.C. 
1987), aff'd in part, rev'd in part, 900 F.2d 283 (D.C. Cir. 1990), the 
MFJ court determined that gateway services constituted information 
services ``under any fair reading'' of the definition. How would you 
distinguish Internet access service as offered today from those 
services that the MFJ found to fall unambiguously within the definition 
of Internet access?
    Answer. The Open Internet Order is limited in scope to broadband 
Internet access service, and I cannot speculate as to how they compare 
to the gateway services the MFJ court examined. Consistent with Supreme 
Court precedent in Brand X, in the Open Internet Order, the Commission 
interprets and applies today's law, the Telecommunications Act of 1996, 
to today's service--broadband Internet access service. The Supreme 
Court in Brand X held that the telecommunications and information 
service definitions were ambiguous as to the provision of cable modem 
service and that the Commission is entitled to deference in its 
interpretation of the terms. Nat'l Cable & Telcomms. Ass'n v. Brand X 
Internet Servs., 545 U.S. 967, 986-1000 (2005). In the Open Internet 
Order, the Commission exercised its authority to interpret ambiguous 
terms in the statute and found, based on the record, that broadband 
Internet access service as it is offered today is best understood as a 
telecommunications service.

    Question 4. The FCC and state utility commissioners long ago 
recognized that, if utility-style regulation applies to Internet access 
service, ``it would be difficult to devise a sustainable rationale 
under which all . . . information services did not fall into the 
telecommunications service category.'' \1\ Do you agree with that 
previous Commission finding?
---------------------------------------------------------------------------
    \1\ Federal-State Joint Board on Universal Service, Report to 
Congress, 13 FCC Rcd 11,501,  57 (1998).
---------------------------------------------------------------------------
    Answer. The finding quoted above was made in a report to Congress, 
referred to as the Stevens Report, which primarily concerned the 
implementation of universal service mandates and was not a Commission 
Order classifying Internet access services. In addition, when the 
Stevens Report was issued back in 1998, broadband Internet access 
service was at `` `an early stage of deployment to residential 
customers' and constituted a tiny fraction of all Internet 
connections.'' Open Internet Order,  315 quoting Stevens Report,  91. 
And further, the Stevens Report reserved judgment on whether entities 
that provided Internet access over their own network facilities were 
offering a separate telecommunications service. It notes that ``the 
question may not always be straightforward whether, on the one hand, an 
entity is providing a single information service with communications 
and computing components, or, on the other hand, is providing two 
distinct services, one of which is a telecommunications service.'' Open 
Internet Order,  315 quoting Stevens Report,  60.
    Therefore, based on record evidence on the manner in which 
broadband Internet access service is offered today, the Commission, 
including myself, has concluded that it is best understood as a 
telecommunications service. The Order does not reach the classification 
of any other service. Open Internet Order,  418.

    Question 5. Under the FCC's Open Internet Order rationale, why are 
the services provided by content distribution networks (CDNs) not 
classified as telecommunications services? Do they not just transmit 
information? How are the information processing, retrieval and storage 
functions of CDN services different from the information functions that 
are provided as part of broadband Internet access services?
    Answer. The Open Internet Order limits its scope to broadband 
Internet access service, and this does not include content delivery 
networks or CDNs. As the Order explained, the Commission has 
historically distinguished CDN services from ``mass market'' broadband 
services because they ``do not provide the capability to transmit data 
to and receive data from all or substantially all Internet endpoints.'' 
Open Internet Order,  340.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Deb Fischer to 
                        Hon. Jessica Rosenworcel
    Question 1. All Commissioners, over 40 members of the Senate signed 
a letter to the FCC last year seeking a way for rate-of-return carriers 
to receive USF support for broadband-only subscribers. When will the 
FCC make this bipartisan priority a reality?
    Answer. In Section 254 of the Telecommunications Act of 1996, 
Congress defined universal service as ``an evolving level of 
telecommunications service.'' In addition, Congress charged the 
Commission with ``periodically'' updating this definition, while 
``taking into account advances in telecommunications and information 
technologies and services.''
    To this end, it is important that the Commission recognize that an 
increasing number of households are subscribing to broadband service 
without also subscribing to traditional voice telephony. This is true 
in both urban and rural communities. As a result, I think the time is 
right to develop policies that grant rate-of-return carriers serving 
rural areas the flexibility to receive support for broadband-only 
subscribers. I would like the Commission to complete a proceeding on 
this matter as soon as possible and no later than the end of this year.

    Question 2. All Commissioners, what effect does reclassification 
have on the costs that cable ISPs will have to pay to attach their 
wires to utility poles and what will this change mean for my rural 
constituents that are cable broadband customers?
    Answer. In the February 26, 2015 Order Protecting and Promoting the 
Open Internet, the Commission stated that it was ``committed to 
avoiding an outcome in which entities misinterpret today's decision as 
an excuse to increase pole attachment rates of cable operators 
providing broadband Internet access service.'' The Commission also 
stated that such increases would be ``unacceptable as a policy 
matter,'' and the agency committed to monitoring the marketplace for 
any such changes.
    To this end, on May 6, 2015, the Commission's Wireline Competition 
Bureau released a Public Notice seeking to refresh the record on a 
petition filed by a number of parties, including some in the cable 
industry. The petition specifically requests that the Commission 
examine the cost allocators used in the calculation of the 
telecommunications rate for pole attachments in order to minimize the 
difference between rates paid by telecommunications providers and cable 
operators. I look forward to reviewing the record in response to this 
Public Notice.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                        Hon. Jessica Rosenworcel
    Question 1. I believe that FCC Process reform is long overdue. Do 
you believe that we can make simple changes to the rulemaking process 
at the FCC that would create more transparency? Do you believe that we 
should codify the rulemaking process? Do you believe a proposed rule or 
amendment to a rule should be published for at least 21 days? If you do 
not believe that we should publish a proposed rule or amendment for at 
least 21 days do you believe it should be published before the vote at 
all?
    Answer. I believe any agency or arm of the government can find ways 
to act with greater speed, efficiency, and transparency. The Commission 
is no exception. That is why I support efforts to examine and improve 
the Commission's rulemaking practices and procedures.
    Specifically, I support efforts to clarify our rulemaking process. 
But I believe that it is essential that any changes made are compliant 
with both the Communications Act and the Administrative Procedure Act. 
Moreover, it is important that efforts to improve our rulemaking 
practices do not increase red tape or bureaucracy. That is because I 
believe the agency needs to be nimble in a fast-moving and dynamic 
communications marketplace.
    As a general matter, I believe the Commission should make available 
proposed rule text in its Notices of Proposed Rulemaking when 
initiating a proceeding that could lead to significant changes to 
agency policies. Moreover, I believe under normal circumstances this 
text should be made available at least 21 days in advance of a decision 
on final rules.

    Question 2. Would you please propose one regulation that we should 
eliminate?
    Answer. It is time to eliminate the ORBIT Act report. This report, 
which the Commission is required to file with Congress annual basis, is 
no longer necessary in light of the successful privatization of 
Intelsat and Inmarsat that occurred more than a decade ago. By 
eliminating this requirement, Congress can free up resources that are 
necessary to produce this document and allow the agency to dedicate 
them to more current matters.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Cory Booker to 
                        Hon. Jessica Rosenworcel
    Question 1. As mayor of Newark, I saw firsthand how critical local 
governments are to finding innovative solutions to the unique 
challenges they face. When it comes to broadband deployment, you don't 
have to look far to notice the inadequacies that exist in low-income 
communities and rural areas. In communities with no broadband, slow 
broadband, or few options to choose from to improve their connectivity, 
municipal broadband can be a useful tool in connecting communities. In 
January, I introduced the Community Broadband Act to preserve the 
rights of local governments to invest in broadband networks should they 
so choose. I was pleased with the FCC's recent action to grant the 
petitions of North Carolina and Tennessee which sought waivers freeing 
them from burdensome state regulations that tied their hands and 
prevented them from investing in municipal networks. While the FCC's 
action was a critically important step in the right direction, I think 
we can still do more to reduce the burdens on local governments and 
protect their freedom to innovate.

    Question 1a. Do you agree that legislation would help ensure that 
communities have the right to invest in their own broadband networks?
    Answer. Absolutely. American enterprise and self-sufficiency are 
the stuff of legend. History, however, demonstrates that when we really 
thrive is when we come together in common cause to get things done. For 
our forbears, this meant everything from holding barn raisings to 
building bridges, to setting up cooperatives to bring electricity to 
our Nation's farms. But our infrastructure challenges are not limited 
to the past nor limited to rural areas. Today we have communities that 
face them across the country--with broadband.
    That is why the FCC's recent action regarding municipal broadband 
is so important. As our record at the agency suggests, when existing 
providers failed to meet their broadband needs, communities in 
Chattanooga, Tennessee and Wilson, North Carolina came together and 
built it themselves. That strikes me as fundamentally American--and 
something we should support.
    However, there are limits to the FCC's action. It only addressed 
specific laws affecting communities in two states. Moreover, it was 
limited to efforts to extend currently authorized municipal networks.
    As a result, legislation--like the Community Broadband Act--is 
valuable. It can address broader issues related to municipal broadband 
and clarify the rights of communities interested in developing their 
own networks.

    Question 1b. How do you see municipal broadband helping communities 
that currently struggle to find affordable, reliable broadband?
    Answer. Broadband is more than a technology--it's a platform for 
opportunity. Access to high-speed service is now necessary to attract 
and sustain businesses, expand civic services, and secure a viable 
future. That's why so many communities across the country are exploring 
the possibilities of providing municipal service. It may not be the 
right course in every case. However, where it is viable, it can bring 
broadband to places that presently lack adequate service and in other 
locations can provide competitive pressure to lower the cost of service 
and make it more affordable.

    Question 2. I joined my colleague Senator Rubio in reintroducing 
the Wi-Fi Innovation Act, which aims to address the growing demand for 
spectrum by encouraging more spectrum sharing for unlicensed Wi-Fi use. 
Freeing up more spectrum will pave the way for economic growth and 
innovation. As you know, spectrum in this band was allocated in 1999 
for use in intelligent transportation to improve roadway safety. While 
these uses have continued to slowly develop, the demand for Wi-Fi has 
sky rocketed. Furthermore, new technologies that don't require 
dedicated spectrum, such as autonomous cars, advanced camera and radar 
technology, and automatic breaking are advancing. I was pleased to read 
your blog outlining the importance of freeing up spectrum in the 5 GHz 
band.

    Question 2a. What can the Commission do to safely and swiftly move 
the process forward to test the potential of making this band available 
for Wi-Fi use?
    Answer. To understand how the FCC can move safely and swiftly to 
make more Wi-Fi available in the upper portion of the 5 GHz band, it is 
useful to review the legislative and regulatory history concerning this 
portion of the airwaves.
    In the Middle Class Tax Relief and Job Creation Act of 2012, 
Congress directed the FCC and the NTIA to take a close look at the 
upper portion of the 5 GHz band. As a result, the FCC began a 
rulemaking in February 2013 (FCC 13-22) that proposed freeing up more 
spectrum in these airwaves. This rulemaking specifically incorporated 
into the record the NTIA's study of unlicensed device use in the 5.85-
5.925 GHz band. Since then, in an order in August 2014 (FCC 14-30), the 
FCC took steps to make more spectrum available for Wi-Fi in the lower 
portion of the 5 GHz band. This is helpful--but it means that the 
Commission still has work to do to move forward on unlicensed 
opportunities in the 5.85-5.925 GHz portion of the band.
    As you note above, the 5.85-5.925 GHz band was allocated more than 
15 years ago for Dedicated Short Range Communications Services (DSRC) 
systems designed to improve roadway safety. But progress on the 
development of DSRC systems has been slow. In the meantime, demand for 
unlicensed services like Wi-Fi has exploded. In addition, during the 
same period, spectrum sharing technologies have advanced considerably.
    In light of this background, I believe it is time for the FCC to 
move forward and develop unlicensed spectrum opportunities in the upper 
portion of the 5 GHz band. Moreover, I have advocated for this course 
in a blog post with my colleague Commissioner O'Rielly (Driving Wi-Fi 
Ahead: the Upper 5 GHz Band: http://www.fcc.gov/blog/driving-wi-fi-
ahead-upper-5-ghz-band). To do this safely and swiftly, we should 
encourage the use of experimental licenses for testing in this band. In 
addition, we should refresh the record from our 2013 rulemaking and 
commit to developing final rules for unlicensed service in this portion 
of the 5 GHz band as soon as possible thereafter.

    Question 2b. How can we in Congress help?
    Answer. Congress should encourage the Commission to refresh its 
record on the possibilities for greater unlicensed use in the upper 5 
GHz band and develop final rules as soon as possible thereafter.

                                  [all]