[Senate Hearing 114-180]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 114-180
 
   PROTECTING THE INTERNET AND CONSUMERS THROUGH CONGRESSIONAL ACTION

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

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            JANUARY 21, 2015

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



                         U.S. GOVERNMENT PUBLISHING OFFICE 

98-593 PDF                     WASHINGTON : 2016 
-----------------------------------------------------------------------
  For sale by the Superintendent of Documents, U.S. Government Publishing 
  Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
         DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
                          Washington, DC 20402-0001















       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 January 21, 2015.................................     1
Statement of Senator Thune.......................................     1
Statement of Senator Nelson......................................     3
    Letter dated January 15, 2015 to Hon. Thomas Wheeler from 
      Stephen Bye, Chief Technology Officer, Sprint..............    83
    Letter dated January 20, 2015 to Hon. John Thune and Hon. 
      Bill Nelson from Chris Polychron, 2015 President, National 
      Association of REALTORS...................................   149
Statement of Senator Blunt.......................................    86
Statement of Senator Klobuchar...................................    88
Statement of Senator Moran.......................................    89
Statement of Senator Markey......................................    91
Statement of Senator Heller......................................    93
Statement of Senator Daines......................................    96
Statement of Senator Booker......................................    98
    Article dated December 8, 2014 entitled ``Booker, King: Don't 
      destroy the open Internet'' by Cory Booker and Angus King..   101
    Letter dated January 21, 2015 to Hon. John Thune, Hon. Bill 
      Nelson, Hon. Roger Wicker and Hon. Brian Schatz from 
      Michael Beckerman, Internet Association....................   103
    Letter dated January 20, 2015 to Hon. John Thune and Hon. 
      Bill Nelson from ColorOfChange.org, Center for Media 
      Justice, Free Press, National Hispanic Media Coalition and 
      Presente.org...............................................   104
    Letters from other organizations advocating for Title II.....   105
Statement of Senator Blumenthal..................................   134
Statement of Senator Manchin.....................................   136
Statement of Senator Schatz......................................   138
    Prepared statement...........................................   140
Statement of Senator Peters......................................   141
Statement of Senator Cantwell....................................   146

                               Witnesses

Hon. Meredith Attwell Baker, President and CEO, CTIA--The 
  Wireless Association..........................................     5
    Prepared statement...........................................     6
Gene Kimmelman, President, Public Knowledge......................    28
    Prepared statement...........................................    29
Hon. Robert M. McDowell, Partner, Wiley Rein LLP and Senior 
  Fellow, Hudson Institute.......................................    37
    Prepared statement...........................................    38
Paul Misener, Vice President, Global Public Policy, Amazon.com...    45
    Prepared statement...........................................    47
W. Tom Simmons, Senior Vice President, Public Policy, 
  Midcontinent Communications....................................    50
    Prepared statement...........................................    52
Nicol E. Turner-Lee, Ph.D. Vice President and Chief Research and 
  Policy Officer, Multicultural Media, Telecom and Internet 
  Council (MMTC).................................................    55
    Prepared statement...........................................    57

                                Appendix

Hon. Tom Udall, U.S. Senator from New Mexico, prepared statement.   155
Response to written questions submitted to Hon. Meredith Attwell 
  Baker by:
    Hon. Marco Rubio.............................................   155
    Hon. Deb Fischer.............................................   157
    Hon. Ron Johnson.............................................   158
    Hon. Brian Schatz............................................   159
    Hon. Cory Booker.............................................   159
    Hon. Tom Udall...............................................   160
    Hon. Joe Manchin.............................................   160
Response to written questions submitted to Gene Kimmelman by:
    Hon. Deb Fischer.............................................   162
    Hon. Amy Klobuchar...........................................   163
    Hon. Brian Schatz............................................   163
    Hon. Cory Booker.............................................   163
    Hon. Tom Udall...............................................   165
    Hon. Joe Manchin.............................................   165
Response to written questions submitted to Hon. Robert M. 
  McDowell by:
    Hon. Marco Rubio.............................................   167
    Hon. Deb Fischer.............................................   169
    Hon. Ron Johnson.............................................   174
    Hon. Brian Schatz............................................   176
    Hon. Cory Booker.............................................   177
    Hon. Joe Manchin.............................................   181
Response to written questions submitted to Paul Misener by:
    Hon. Deb Fischer.............................................   183
    Hon. Brian Schatz............................................   184
    Hon. Cory Booker.............................................   184
    Hon. Tom Udall...............................................   187
    Hon. Joe Manchin.............................................   187
Response to written questions submitted to W. Tom Simmons by:
    Hon. Deb Fischer.............................................   188
    Hon. Brian Schatz............................................   189
    Hon. Cory Booker.............................................   190
    Hon. Joe Manchin.............................................   190
Response to written questions submitted to Nicol E. Turner-Lee, 
  Ph.D. by:
    Hon. Deb Fischer.............................................   191
    Hon. Brian Schatz............................................   193
    Hon. Cory Booker.............................................   193
    Hon. Joe Manchin.............................................   195

                       PROTECTING THE INTERNET
                         AND CONSUMERS THROUGH
                          CONGRESSIONAL ACTION

                              ----------                              


                      WEDNESDAY, JANUARY 21, 2015

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:30 p.m. in room 
SR-253, Russell Senate Office Building, Hon. John Thune, 
Chairman of the Committee, presiding.
    Present: Senators Thune [presiding], Wicker, Blunt, Heller, 
Moran, Daines, Nelson, Cantwell, Klobuchar, Blumenthal, Schatz, 
Markey, Booker, Manchin, and Peters.

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

    The Chairman. This hearing of the Senate Commerce, Science, 
and Transportation Committee will come to order, and I 
appreciate our panelists' indulgence. We were informed a while 
back that we are going to have a number of votes. We are trying 
to juggle it, and appreciate all of our Senators and those who 
are participating in today's hearing, and their willingness to 
work with us to try and accommodate that schedule.
    Today we convene the Committee's first hearing of the 114th 
Congress to consider an issue that has divided policymakers for 
more than a decade: how best to protect the open Internet. The 
Federal Communications Commission believes it already has the 
answer: impose public utility regulations on the Internet. But 
there is a well-founded fear that regulating the Internet, like 
a public utility monopoly will harm its entrepreneurial nature, 
chill investment, and lead to prolonged litigation.
    Instead of using outdated regulations, I believe the most 
enduring way to protect the Internet and individual Internet 
users is through legislation that establishes clear rules of 
the digital road as well as clear limits on the FCC's 
regulatory authority.
    Certainty about how consumers will be protected and 
certainty about the government's role in the online world is 
critical to preserve the Internet as an engine for innovation, 
creativity, economic growth, and free expression. I want us to 
pass legislation providing certainty that users will have 
unfettered access to the entire Internet. I want us to pass 
legislation that provides certainty for creators at the edge of 
the Internet so that they can continue to reach users across 
the Internet without interference.
    I want us to pass legislation that provides certainty for 
Internet service providers about precisely what rules they will 
be required to follow. And I want us to pass legislation that 
provides certainty for the FCC so that it can enforce legally 
sound open Internet rules that survive beyond the current 
Administration. The entire Internet needs this kind of 
statutory certainty, and only--only--Congress can provide it.
    Last week, I put forward a set of 11 principles that I 
believe can be the framework for a bipartisan consensus. The 
discussion draft that Chairman Upton and I released is our 
attempt to put these principles into statutory text. The 
details matter greatly in this debate, and we felt there could 
be no progress toward a solution until legislators started 
discussing those details.
    I do not expect our draft to be a final product, but I also 
believe that it is not a partisan starting point to the 
conversation. We put forth a good faith proposal to find common 
ground between the parties. We hope today's hearings will 
facilitate the serious conversation around a long-term 
solution.
    I am willing to discuss how the 11 principles will be 
implemented, and I am eager to get to work with my colleagues, 
many of whom I have already spoken with. But I also want to be 
clear that I will not compromise these principles, particularly 
if doing so would leave the FCC's authority unbounded or if it 
would leave open the possibility for harmful regulatory burdens 
being leveled on the Internet.
    Chairman Upton, Chairman Walden, and I have been working 
with our colleagues on the Commerce Committees and across the 
aisle since late last year to find a lasting resolution that 
protects the open Internet. My colleague, the new Ranking 
Member of this Committee, Senator Bill Nelson of Florida, has 
been in serious and substantive discussions with me. I 
appreciate his efforts, and they underscore that there is a 
bipartisan interest in finding a legislative solution.
    In the absence of clear legislative guidance, the FCC has 
floundered for more than a decade to forge its own regulatory 
powers from legal authorities crafted prior to the emergence of 
the Internet as the most consequential communications platform 
of our lifetime. We have now reached an unfortunate point where 
both the President and the Chairman of the FCC feel compelled 
to move forward using a toolbox built 80 years ago to regulate 
a literal monopoly. And they do so without any apparent 
interest in working with Congress to solve the FCC's legal 
dilemma.
    Even if the Executive Branch seems willing to go alone down 
a politically toxic and legally uncertain path, I sincerely 
hope that a willingness to collaborate develops within the 
legislative branch. After a decade of failure and wasted 
taxpayer resources, we should not continue to leave this issue 
to a five-member regulatory agency. Congress needs to reassert 
its responsibility to make policy and let the FCC do what it 
does best: enforce clear statutory rules.
    I want to work together with my colleagues to finally 
settle the question of the FCC's authority over retail Internet 
service. If Chairman Wheeler moves ahead as planned, however, 
the only certainty is that the FCC will again find itself 
tangled up in court for years to come.
    Before I finish my remarks, I want to put forward a 
challenge to the members of this committee. Let us find common 
ground and forge a permanent solution. I have offered the 
President an opportunity to engage. I have spoken with Chairman 
Wheeler on numerous occasions, and I will engage any senator 
who wants to find a workable legislative solution. Having the 
FCC regulate the Internet as a public utility while Congress 
sits idly on the sideline is an outcome that will prove to be 
shortsighted. Let us find a consensus solution that none of us 
have to call a compromise. I look forward to hearing from our 
diverse panel of experts today and also to working with my 
colleagues in the coming days and weeks.
    With that, I yield to my distinguished Ranking Member, the 
Senator from Florida, Senator Nelson.

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

    Senator Nelson. Mr. Chairman, indeed it has been a pleasure 
working with you as we have been having discussions on this 
issue and many others over the past several months, and there 
will be many areas that we will be able to carry forth this 
bipartisan tradition. The interest in this particular topic is 
evident by the lines still waiting outside of the door to get 
in. I thank you for calling this hearing, and as we said in the 
organizational meeting yesterday, I look forward continuing the 
work with you in this committee's proud tradition of working in 
a bipartisan fashion.
    The Internet has become an essential part of our everyday 
lives. You will be hearing a lot more about national security 
and the place that the Internet plays in cybersecurity. Many of 
us are almost constantly connected to the Internet--at school, 
at work, or at play. Computers, tablets, and smart phones are 
certainly within arm's reach and in most of our pockets.
    Access to broadband research and the broadband Internet 
service is no longer a luxury item. It is a basic service that 
provides a vital link to our friends, and our family, and the 
rest of society. And because it is an integral part of how we 
live today, there is broad agreement today among consumers in 
many parts of the industry and in Congress that we have to 
protect a free and open Internet. That was always the case. For 
years we heard from some that net neutrality ``was a solution 
in search of a problem.'' Well, I am glad that we moved beyond 
that tired talking point and are here today to discuss how we 
can preserve a free and open Internet.
    That is an essential step, and I fully appreciate how far 
many of our colleagues have come on this issue in a very short 
time. And one indication of that is over four million Americans 
have taken the time to weigh in directly with the FCC to 
express their desire for strong net neutrality protections. 
They do not want their access to websites and services blocked. 
They want to know more about their Internet service and the 
overall performance of the connection, and they are certainly 
worried about their broadband provider picking winners and 
losers on the Internet by regulating those content companies 
who refuse to pay a toll to a slow lane of service.
    So as the Chairman and I have been talking about these 
issues for some time, I want to continue those discussions. But 
I want to be clear about what is important to this Senator, and 
I believe it is to most of the consumers. First, we need to be 
vigilant in protecting consumers' interest. Theirs is the lens 
through which we must see any proposal on net neutrality, the 
consumers' interest. And, second, while I appreciate and 
respect the desire by businesses for certainty of the 
investment and the operation, and that is a legitimate concern 
that we want to help protect, I remain concerned about any 
proposal that would strip away the FCC's tools to enforce 
essential consumer protections for broadband service.
    The Internet is evolving at a blistering pace. The Internet 
that we know today likely will be vastly different a decade 
from now. Take, for example, when we started the space program, 
when we put up John Glenn, we did not even know if the eyeballs 
were going to stay in the eye sockets. And now we are at a 
point that we are seriously discussing, and the President said 
last night we are sending humans to Mars. That is the goal.
    Things evolve. Things change at a blistering pace. And the 
Internet is one of them, this ever-evolving Internet. This 
senator believes that we need a regulator who is not frozen in 
time, and the FCC must have authority that is flexible enough 
that it can respond to a changing world. If we put a strait 
jacket on the Commission, we may very well miss the future and 
leave the Agency powerless and American consumers defenseless 
to deal with the emerging problems.
    For over 80 years, Congress has tasked the FCC with 
preventing unjust practices, stopping unreasonable 
discrimination, protecting competition, and promoting the 
public interest. These are not mere abstract ideals.
    And so, without this flexible authority, the FCC could not 
have successfully extended universal service funding to 
broadband or to ensure the privacy of sensitive consumer 
information. These laws and principles have made the U.S. 
telecommunications market the envy of the world, and they 
should not be discarded.
    And so finally, some maintain that we must have 
congressional action on net neutrality prior to the FCC action. 
I do not share that idea. It is more important to get the issue 
right than it is to get it done right now. The stakes are too 
high. The consumers' interest are at stake. The future of the 
Internet is at stake.
    The congressional prerogative to act does not cease merely 
because an agency has moved forward and done its job. And 
similarly, an agency is not always required to cease its 
reasoned consideration of an issue merely because Congress may 
be examining the same concern at the same time of which we have 
that legitimate authority and responsibility to do. And to that 
end, this senator welcomes the FCC's efforts to put in place 
necessary consumer protections for the Internet. I look forward 
to reviewing the particulars of the Chairman of the FCC's 
proposal next month.
    I want to thank the witness today for appearing, and I look 
forward to hearing your testimony.
    The Chairman. Thank you, Senator Nelson. We have a very 
distinguished and impressive group of panelists today to speak 
to this issue, and I am going to introduce each of them, and 
then we will start left to right with Ms. Baker. Honorable 
Meredith Attwell Baker is President and CEO of CTIA, which is 
the wireless association here in Washington, D.C.; Mr. Gene 
Kimmelman, President and CEO of Public Knowledge; the Honorable 
Robert McDowell, Senior Fellow at the Hudson Institute; Mr. 
Paul Misener, Vice President of Global Public Policy at 
Amazon.com; Mr. Tom Simmons, Senior Vice President of Public 
Policy at Midcontinent Communications from my home state of 
South Dakota; and Dr. Nicol Turner-Lee, Vice President and 
Chief Researcher and Policy Officer, Multicultural Media & 
Telecommunications Council here in Washington, D.C.
    Thank you all for being here, and we will start on my left 
and your right. Ms. Baker?

 STATEMENT OF HON. MEREDITH ATTWELL BAKER, PRESIDENT AND CEO, 
                CTIA--THE WIRELESS ASSOCIATION

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

   Prepared Statement of Meredith Attwell Baker, President and CEO, 
                    CTIA--The Wireless Association
    Chairman Thune, Ranking Member Nelson, and members of the 
Committee, thank you for inviting me to share the wireless industry's 
perspective on the importance of an open Internet.
    At the outset, I want to be clear: America's wireless industry 
fully supports an open Internet, and the mobile Internet is open today. 
Wireless users demand it and in a marketplace where competition has 
never been more vigorous or barriers to switching lower, mobile 
broadband providers know that providing consumers with a robust, 
reliable, open Internet experience is a business imperative.
    A Strong Foundation. More than twenty years ago, wireless 
communications was very new and did not fit cleanly in the FCC's 
traditional Title II telephone rules. Future investment and innovation 
were in jeopardy because of substantial Federal and state regulatory 
overhang. Congress acted decisively in 1993, establishing a Federal 
mobile-specific regulatory approach under Section 332 of the 
Communications Act with clear rules for mobile voice services and other 
mobile offerings.
    Under this successful regime, the wireless industry has grown from 
a luxury product to a key driver of economic growth upon which nearly 
every American relies. For 44 percent of Americans, their only phone is 
their mobile phone, and the wireless industry is now larger than the 
agriculture, hospitality, automotive and airplane industries.\1\ Prices 
per megabyte have fallen 99 percent from 2005 to 2013,\2\ and mobile 
broadband use has grown 51 times over since 2008.\3\
---------------------------------------------------------------------------
    \1\ Centers for Disease Control, Wireless Substitution: Early 
Release of Estimates from the National Health Interview Survey, 
January-June 2014, http://www.cdc.gov/nchs/data/nhis/earlyrelease/
wireless201412.pdf; Recon Analytics, The Wireless Industry: The 
Essential Engine of U.S. Economic Growth, http://reconanalytics.com/wp-
content/uploads/2012/04/Wireless-The-Ubiquitous-Engine-by-Recon-
Analytics-1.pdf.
    \2\ The Boston Consulting Group, The Mobile Revolution: How Mobile 
Technologies Drive a Trillion-Dollar Impact (Jan. 15, 2015), https://
www.bcgperspectives.com/content/articles/.
telecommunications_technology_business_transformation_mobile_revolution/
    \3\ Cisco, VNI Mobile Forecast Highlights, 2013--2018, http://
www.cisco.com/assets/sol/sp/vni/forecast_highlights_mobile/
index.html#Country (Filter by Country (United States), then select 
2013 Year in Review).
---------------------------------------------------------------------------
    We all benefit from faster speeds, more services, and lower prices, 
as well as innovative devices and applications unimagined and 
unforeseen a decade or even a year ago. The U.S. wireless ecosystem is 
envied around the world as mobility is now at the forefront of 
American-driven innovation in the health, automotive, payment, and 
education fields. Small businesses that incorporate mobility are 
witnessing revenues growing twice as fast, and work forces are growing 
eight times faster than their non-mobile peers.\4\ Mobility has never 
been more central to our Nation's global competitiveness and our 
future.
---------------------------------------------------------------------------
    \4\ The Boston Consulting Group, The Mobile Revolution: How Mobile 
Technologies Drive a Trillion-Dollar Impact (Jan. 15, 2015), https://
www.bcgperspectives.com/content/articles/
telecommunications_technology_business_transformation_mobile_revolution/.
---------------------------------------------------------------------------
    A Clear Opportunity. Congress has the opportunity to provide the 
same regulatory stability for broadband as it did for all of mobility 
in 1993. We face significant regulatory uncertainty and ongoing legal 
debate over the FCC's authority over broadband and network management. 
We greatly appreciate this Committee's work and foresight with today's 
hearing to develop a solid regulatory foundation for future innovation 
and investment in mobile broadband with common sense net neutrality 
provisions that provide certainty for all affected stakeholders. The 
need for clarity is felt by all, from large to small, including 
regional and small providers serving the most rural and remote parts of 
our country, east to west from New Hampshire to Alaska, and north and 
south from the shores of Lake Superior across northern Wisconsin and 
the upper Peninsula of Michigan to the gulf coast of Mississippi.
    The draft bill is an excellent start and offers a reasonable path 
toward ensuring the preservation of an open Internet with real, 
enforceable requirements. Properly crafted legislation will guarantee 
the protections the President has called for and would allow mobile 
broadband providers to continue to invest billions, create jobs, and 
bring innovative products to all Americans.
    Importantly, we do not ask that wireless be exempt from any new 
laws, only that any new requirements reflect our industry, our 
technology, and our inherent differences. It is vital that any 
legislation is sufficiently flexible to preserve the competition, 
differentiation, and innovation mobile consumers' enjoy and reflect the 
unique, sometimes millisecond by millisecond technical challenges that 
wireless networks face as they provide service to America's 350 million 
wireless subscribers.
    The FCC's Parallel Path. While we are optimistic that the process 
on the Hill will enhance the wireless experience for all Americans, we 
have significant reservations with the path currently contemplated by 
the FCC. This is at least the third time the FCC has tried to establish 
jurisdiction over net neutrality. Unfortunately, it appears the 
Commission may yield to ill-conceived calls for ``platform parity'' by 
imposing 1930s-era wired rules on wireless broadband services. CTIA 
believes the application of Title II, in any form, to wireless 
broadband would harm consumers and our economy, and is counter to the 
framework for mobile services Congress established in 1993. We view the 
Commission's apparent decision to move forward based on Title II as 
another missed opportunity. The Commission could achieve all of its 
public policy objectives with mobile-specific rules under Section 706 
of the Communications Act: a path the D.C. Circuit clearly signaled 
could withstand judicial scrutiny if properly structured.
    Nonetheless, the Commission appears poised to move forward under 
Title II even though the reality is that Title II was designed for 
another technology and another era, an era in which competition was 
largely non-existent and innovation came slowly, if it came at all. 
Rules designed for homes with a single black rotary phone and families 
waiting until after 11 p.m. before they could affordably make long 
distance calls: No choice, just voice, and highly regulated prices.
    Mobile is Different. America's wireless industry is the exact 
opposite. Much of the credit for that goes to CTIA's members, whose 
investment, innovation, and relentless competitive drive has made high-
quality wireless service available to nearly every American. This 
amazing evolution in the way we communicate, access the Internet, and 
conduct business has occurred at a pace dramatically faster than the 
speed at which traditional wired service or electricity--services 
regulated under Title II or Title II-like, utility-style regimes with 
their origins in the Interstate Commerce Act of 1887--became available 
across the country.
    Given our industry's great success with mobile broadband outside of 
Title II, we have significant concerns with how Title II--and its 1000 
rules and 682 pages of regulation--would apply to the dynamic mobile 
broadband space. Any new rules must be mobile-specific and designed for 
our networks, not superimposed on them, because mobile broadband is 
different. Encouragingly, over two thirds of Americans agree that 
wireless services should not be subject to same exact requirements as 
wired broadband options.
    I want to highlight four key differences that explain why. First, 
mobile services are technically different, completely dependent upon 
limited spectrum resources requiring nimble and dynamic network 
management to deliver service to consumers on the go.\5\ There is more 
bandwidth in a single strand of fiber than in all of the spectrum 
allocated for commercial mobile services. In recognition of its 
fundamental technical differences, some have suggested that mobile 
broadband could be accommodated solely through a reasonable network 
management exception. While reasonable network management is a 
necessity for mobile wireless, that approach would not fully reflect 
the significant additional differences that characterize the mobile 
broadband industry.
---------------------------------------------------------------------------
    \5\ Dr. Jeffrey H. Reed and Dr. Nishith D. Tripathi, Net Neutrality 
and Technical Challenges of Mobile Broadband Networks (Sept. 4, 2014), 
http://www.ctia.org/docs/default-source/default-document-library/net-
neutrality-and-technical-challenges-of-mobile-broadband-networks-9.pdf.
---------------------------------------------------------------------------
    Second, we are competitively different: More than 8 out of 10 
Americans can choose from 4 or more mobile broadband providers.\6\ This 
fierce competition is driving new services, offerings, differentiation 
and options like Music Freedom and Sponsored Data that benefit 
consumers. No one wants a one-size-fits-all mobile Internet experience. 
A competitive market also drives sustained investment. Relying on 
mobile-specific open Internet rules, the wireless industry has invested 
$121 billion over the last four years alone.\7\
---------------------------------------------------------------------------
    \6\ Federal Communications Commission, Annual Report and Analysis 
of Competitive Market Conditions With Respect to Mobile Wireless, 
Including Commercial Mobile Services, Seventeenth Report (Dec. 18, 
2014), Chart III.A.2, https://apps.fcc.gov/edocs_public/attachmatch/DA-
14-1862A1.pdf.
    \7\ CTIA-The Wireless Association, Annualized Wireless Industry 
Survey Results--December 1985 to December 2013, http://www.ctia.org/
docs/default-source/Facts-Stats/ctia_survey_ye
_2013_graphics-final.pdf?sfvrsn=2; AT&T Financial and Operational 
Results (3Q 2014), http://www.att.com/Investor/Earnings/3q14/
master_3q14.pdf; Verizon Condensed Consolidated Statements of Income 
(3Q 2014), http://www.verizon.com/about/file/3713/
download?token=EKXz8Nx9; T-Mobile 3rd Quarter 2014 Financial Results, 
http://investor.t-mobile.com/Cache/
1001191498.PDF?Y=&O=PDF&D=&fid=1001191498&T=&iid=4091145; David Barden, 
Bank of America U.S. Wireless Matrix (Nov. 18, 2014); NTELOS Holding 
Corp. Reports Third Quarter 2014 Results (Oct. 31, 2014), http://
ir.ntelos.com/press-releases/detail/1214/; U.S. Cellular Reports third 
Quarter 2014 Results (Oct. 31, 2014), http://investors.uscellular.com/
news/news-release-details/2014/US-Cellular-reports-third-quarter-2014-
results/default.aspx; Jennifer Fritsche, Quick And Dirty: Q4 2014 Big 4 
Wireless Preview, Wells Fargo Equity Research (Jan. 14, 2015).
---------------------------------------------------------------------------
    Third, we are evolutionarily different. Wireless is still an early 
stage technology. 4G networks are less than 5 years old, the modern 
smartphone only 7, and we are just beginning to see options like VoLTE, 
LTE Broadcast, LTE Advanced as well as the promise of the next 
generation of wireless, 5G. The need for a mobile specific approach 
with respect to new connected life applications is particularly clear 
as the network management requirements for such services are still in 
development. For instance, General Motors recently explained that 
``neither we nor our mobile network operator suppliers can predict all 
of the techniques that may need to deliver [connected car] services to 
our customers.'' \8\ The risk of applying wired rules on wireless 
services ``would . . . constrain the innovation [GM is] seeking to 
provide.''
---------------------------------------------------------------------------
    \8\ General Motors Ex Parte, FCC GN Docket 14-28 (Oct. 9, 2014), 
http://apps.fcc.gov/ecfs/document/view?id=60000972470.
---------------------------------------------------------------------------
    And fourth, and potentially most relevant for today's discussion, 
mobile broadband is legally different. In 1993, Congress in section 332 
exempted non-voice services--private mobile radio services (PMRS) like 
mobile broadband--from common carriage regulation.\9\ It did so 
unambiguously, saying those services ``shall not'' be subject to common 
carriage obligations. Based on this clear articulation of congressional 
intent, the Commission itself has repeatedly found that wireless 
broadband service may not be classified as a common carriage service. 
And the U.S. Court of Appeals has twice held that ``Mobile-data 
providers are statutorily immune, perhaps twice over, from treatment as 
common carriers.'' \10\ This clear line of precedent underscores the 
riskiness of a Commission attempt to classify broadband as a Title II 
service now.\11\
---------------------------------------------------------------------------
    \9\ See appended White Paper, ``Section 332's Bar Against Common 
Carrier Treatment of Mobile Broadband: A Legal Analysis'' at 9.
    \10\ Cellco P'Ship v. FCC, 700 F.3d 534, 538 (D.C. Cir. 2012); see 
also Verizon v. FCC, 740 F.3d 623, 650 (D.C. Cir. 2014).
    \11\ Suggestions that the regulatory framework for CMRS, or mobile 
voice services, is an appropriate comparison for the Commission's 
desired Title II with forbearance approach is misguided and 
misunderstand Congress's clear direction in 1993. Broadband Internet 
access and CMRS are fundamentally different services governed by 
disparate Congressional provisions. The use of the Commission's 
``forbearance'' authority to impose expansive new regulatory mandates, 
rather than to remove existing regulation, would upend the deregulatory 
purposes for which Congress enacted the forbearance provisions in 
Section 332(c). In 1993, Congress directed the Commission to apply some 
Title II common-carrier mandates on CMRS mobile voice services. In 
sharp contrast, and at the same time, Congress expressly prohibited the 
Commission from treating services like mobile broadband as common 
carrier offerings subject to Title II. There is a vast difference 
between applying Title II's obligations to voice CMRS offerings, as 
Congress directed, and applying such mandates to mobile broadband, 
contrary to Congress's clear directive. Further, the very use of 
forbearance to establish a new affirmative regulatory mandate for 
services that have never before been subjected to Title II turns 
Congress' statutory design on its head. Forbearance was designed as a 
deregulatory tool: The very term ``forbear'' means to ``restrain an 
impulse to do something'' or ``refrain.'' This, of course, is what the 
Commission did with respect to CMRS under Section 332(c)--it reduced 
and eliminated existing regulation. There is no evidence whatsoever 
that Congress intended the Commission to use forbearance as a key tool 
in applying Title II to services that never were subject to common 
carrier regulation. Reclassifying broadband as Title II and then 
forbearing is a regulatory path that only Congress, not the Commission, 
could pursue.
---------------------------------------------------------------------------
    The Significant Risk of Title II. Accordingly, if the Commission 
proceeds down the Title II path, the wireless industry will have no 
choice but to look to the Court of Appeals for a remedy. Given the 
clarity of Section 332, and years of FCC and judicial precedent, we 
have every confidence we would prevail in such an effort,\12\ but it is 
not our preferred course. Litigation inevitably involves more delay and 
uncertainty, an outcome that is antithetical to investment and the 
fast-paced technological evolution of the U.S. wireless industry. 
Consumers would be harmed as we would all lose a year, if not much 
longer, in regulatory limbo. This harm may be particularly acute for 
rural consumers, as a collection of regional providers explained that 
``[a]pplying an outdated and backward-looking Title II common-carriage 
regime to our services would . . . stifle innovation and investment and 
would do a disservice to rural America.'' \13\
---------------------------------------------------------------------------
    \12\ While Section 332 provides an absolute bar to imposing common 
carrier duties on mobile broadband providers, mobile broadband also 
fits squarely under the definition of ``information services'' under 
the Communications Act, which is an additional and equally valid bar on 
applying Title II to mobile broadband. The Commission has correctly 
concluded that ``[w]ireless broadband Internet access service offers a 
single, integrated service to end users, Internet access, that 
inextricably combines the transmission of data with computer 
processing, information provision, and computer interactivity, for the 
purpose of enabling end users to run a variety of applications.'' 
Appropriate Regulatory Treatment for Broadband Access to the Internet 
Over Wireless Networks, Declaratory Ruling, 22 FCC Rcd 5901, 5911  26 
(2007).
    \13\ Bluegrass Cellular, Inc. et al Ex Parte, FCC GN Docket 14-28 
(Nov. 14, 2014), http://apps.fcc.gov/ecfs/document/view?id=60000983742.
---------------------------------------------------------------------------
    As leaders across the globe are trying to replicate our mobile 
success and embrace 5G, this is the exact wrong time to inject 
uncertainty into our Nation's efforts. We risk falling behind when the 
stakes have never been higher for our future connected life and global 
competitiveness.
    After more than a decade of debate, the better approach would be 
for Congress to act and set the ground rules for a generation of new 
investment, allowing us to get these questions behind us so that we all 
can turn to pressing bipartisan issues like spectrum policy and 
modernization of the Communications Act. These key steps will ensure 
that the United States remains the most dynamic, innovative, and open 
mobile ecosystem in the world.
    Thank you for the opportunity to appear on today's panel. I look 
forward to your questions.
                                 ______
                                 
                               Attachment

Section 332's Bar Against Common Carrier Treatment of Mobile Broadband: 
                            A Legal Analysis

                           Table of Contents
Introduction 

I. The Act Prohibits the Commission from Subjecting Mobile Broadband to 
Common Carrier Mandates 

        A. Mobile Broadband is Not CMRS

        B. Mobile Broadband is Not the ``Functional Equivalent'' of 
        CMRS

        C. Mobile Broadband is PMRS and Immune From Common Carrier 
        Regulation

II. Mobile Broadband Is An Integrated Information Service With No 
Separate ``Telecommunications Service'' Component

III. The Act Bars Any ``Hybrid'' Reclassification Approach to Mobile 
Broadband

        A. Section 332 Prohibits the Commission From Subjecting a 
        Hybrid ``Service'' to Common Carrier Mandates

        B. Section 3 Precludes the Commission From Pursuing The Hybrid 
        Approach

Conclusion 
                                 ______
                                 
Introduction
    While CTIA--The Wireless Association (``CTIA'') and its members 
are committed to preserving an open mobile Internet, any new rules in 
this area must rest on a solid legal foundation--one that is consistent 
with the Communications Act of 1934, as amended (the ``Act'') and will 
withstand judicial scrutiny. And on one point in particular, the Act is 
clear: Under Section 332, mobile broadband may not, under any 
circumstances, be subjected to common carrier treatment under Title II. 
The Commission may move forward to help preserve an Open Internet 
pursuant to section 706, but may not legally apply Title II mandates to 
mobile broadband services.
    Specifically, Section 332 erects barriers to common carrier 
regulation of mobile broadband that extend beyond the restrictions that 
other provisions of the Act establish for broadband offerings 
generally. Moreover, this bar applies regardless of whether the 
Commission wrongly reverses 15 years of precedent and declares that the 
broadband offering sold to end users includes a distinct 
telecommunications service or if it pursues a ``hybrid'' approach that, 
for the first time, identifies a distinct ``service'' purportedly 
offered to edge providers and declares that to be a telecommunications 
service.
    Several parties attempt to read the Section 332 prohibition out of 
the statute, articulating far-fetched theories under which the 
provision simply does not mean what it says. Their arguments are not 
properly addressed in this proceeding, as the Commission has not 
provided any notice to support the legislative rules they seek here. In 
any event, those arguments cannot be squared with the statutory text or 
this Commission's decisions. As the Commission held 20 years ago and 
the D.C. Circuit has confirmed, Congress intended only mobile offerings 
that mimic traditional telephone service to be subject to common 
carrier treatment. All other mobile offerings, including mobile 
broadband, are ``private'' offerings, for which Section 332 expressly 
prohibits common carrier treatment. There is thus no lawful basis for 
subjecting mobile broadband offerings to common carrier obligations.
I. The Act Prohibits the Commission from Subjecting Mobile Broadband to 
        Common Carrier Mandates
    Section 332(c) forbids the Commission from subjecting services that 
are not CMRS or the functional equivalent thereof to common carrier 
mandates. Section 332(c)(2) provides that the Commission ``shall not'' 
treat any private mobile service (``PMRS'') provider ``as a common 
carrier for any purpose.'' 47 U.S.C. Sec. 332(c)(2). Section 332(d)(3), 
in turn, defines PMRS as ``any mobile service. . .that is not a 
commercial mobile service or the functional equivalent of a commercial 
mobile service, as specified by regulation by the Commission.'' Id. 
Sec. 332(d)(3).
    Thus, the Commission may only subject mobile broadband services to 
Title II if those services are commercial mobile services (``CMRS'') or 
the functional equivalent of CMRS. As detailed below, they are not.
A. Mobile Broadband is Not CMRS
    Section 332(d) defines CMRS as an ``interconnected service'' made 
available for profit to a substantial portion of the public, id. 
Sec. 332(d)(1), and defines ``interconnected service'' to mean 
``service that is interconnected with the public switched network (as 
such terms are defined by regulation by the Commission),'' id. 
Sec. 332(d)(2).
    The Commission first interpreted the key terms CMRS and PMRS in 
1994's Second CMRS Order. Implementation of Sections 3(n) and 332 of 
the Communications Act; Regulatory Treatment of Mobile Services, 9 FCC 
Rcd 1411, 1434  54 (1994) (``Second CMRS Order''). In defining the 
``public switched network'' component of the CMRS definition, the 
Commission emphasized that Congress was referring to the traditional 
telephone network:

        [A]ny switched common carrier service that is interconnected 
        with the traditional local exchange or interexchange switched 
        network will be defined as part of that network for purposes of 
        our definition of ``commercial mobile radio services.''

        . . . We agree . . . that use of the North American Numbering 
        Plan by carriers providing or obtaining access to the public 
        switched network is a key element in defining the network 
        because participation in the North American Numbering Plan 
        provides the participant with ubiquitous access to all other 
        participants in the Plan.

    Id. at 1436-37  59-60 (emphases added). Accordingly, in section 
20.3, the Commission defined ``public switched network'' to mean 
``[a]ny common carrier switched network . . . including local exchange 
carriers, interexchange carriers, and mobile service providers, that 
use the North American Numbering Plan in connection with the provision 
of switched services.'' 47 C.F.R. Sec. 20.3.\1\
---------------------------------------------------------------------------
    \1\ This language unequivocally rebuts Vonage's suggestion, Letter 
from William B. Wilhelm, Counsel for Vonage Holdings Corp., to Marlene 
H. Dortch, Secretary, FCC, GN Docket Nos. 14-28, 10-127 at 6 (Dec. 11, 
2014) (``Vonage Letter''), that the Commission ``explicitly rejected'' 
an interpretation linking the CMRS definition to voice services 
traversing the traditional telephone network.
---------------------------------------------------------------------------
    More recently, in 2007, the Commission explained that Section 
332(c) and its implementing rules barred it from classifying mobile 
broadband as common carriage. It first found that ``mobile wireless 
broadband Internet access service does not fit within the definition of 
`commercial mobile service' because it is not an `interconnected 
service.' '' Appropriate Regulatory Treatment for Broadband Access to 
the Internet over Wireless Networks, Declaratory Ruling, 22 FCC Rcd 
5901, 5916-17  41-43 (2007) (``Wireless Broadband Order''). The 
Commission reiterated its 1994 determinations that the CMRS definition 
requires ``interconnect[ion] with the traditional local exchange or 
interexchange switched network,'' and that `` `use of the North 
American Numbering Plan by carriers providing or obtaining access to 
the public switched network is a key element in defining the network.' 
'' Id. at 5917  44, quoting Second CMRS Order, 9 FCC Rcd at 1436-37  
59-60. Because ``[m]obile wireless broadband Internet access service in 
and of itself does not provide this capability to communicate with all 
users of the public switched network,'' it ``does not meet the 
definition of `interconnected service,'' and therefore is not CMRS. 
Wireless Broadband Order at 5917-18  45, citing 47 C.F.R. Sec. 20.3. 
The Act calls for common carrier treatment only of CMRS, not of PMRS, 
and thus precludes such treatment for mobile broadband. Id. at 5919-20 
 48-51. While the Commission noted that, in the Second CMRS Order, it 
had stated that the public switched network was `` `continuously 
growing and changing because of new technology and increasing demand,' 
'' the Commission held that both ``section 332 and [its] implementing 
rules did not contemplate wireless broadband Internet access service as 
provided today.'' Id. at 5918 45 n.119.
    The Commission reiterated this core point under Chairman 
Genachowski, stating in a 2012 brief to the D.C. Circuit that ``CMRS is 
defined as a mobile service that is `provided for profit,' 
`interconnected' to the public switched telephone network.'' Brief for 
Respondents, Cellco P'ship v. FCC, Case Nos. 11-1135, 11-1136, at 7 
(D.C. Cir. Mar. 8, 2012) (emphasis added).
    The D.C. Circuit has twice confirmed that Section 332, as long 
interpreted by this Commission, precludes the Commission from 
regulating mobile broadband as common carriage. First, in the 2012 
Cellco decision on data roaming, the court explained that ``section 332 
specifies that providers of `commercial mobile services,' such as 
wireless voice-telephone service, are common carriers, whereas 
providers of other mobile services are exempt from common carrier 
status.'' Cellco P'Ship v. FCC, 700 F.3d 534, 538 (D.C. Cir. 2012). The 
court determined that this framework erects a ``statutory exclusion of 
mobile-internet providers from common carrier status.'' Id. at 544. 
Given the separate bar against common-carrier treatment of information 
services, the court noted further, mobile broadband providers were 
``statutorily immune, perhaps twice over,'' from such treatment. Id. at 
538. Therefore, ``[e]ven though wireless carriers ordinarily provide 
their customers with voice and data services under a single contract, 
they must comply with Title II's common carrier requirements only in 
furnishing voice service.'' Id. at 538.
    In 2014, the D.C. Circuit again addressed the issue in its review 
of the Commission's Open Internet Order. In that order, the Commission 
conceded that Section 332(c)(2) bars the application of common carrier 
mandates to mobile broadband, but argued that the provision did not 
constrain its actions because the rules it was adopting did not impose 
common carriage. Preserving the Open Internet, Report and Order, 25 FCC 
Rcd 17905, 17950  79 & n.247 (2010), aff'd in part, vacated and 
remanded in part sub nom. Verizon v. FCC, 740 F.3d 623 (D.C. Cir. 
2014). The court disagreed with this latter proposition in Verizon, 
overturned the Commission's rules, and emphasized that ``treatment of 
mobile broadband providers as common carriers would violate section 
332.'' Verizon, 740 F.3d at 650.
    The Commission may not reverse itself and declare that mobile 
broadband is CMRS. A handful of commenters have argued that the 
Commission should amend its current rules in section 20.3 to redefine 
the ``public switched network'' to include the Internet. See Letter 
from Michael Calabrese, Director of the Wireless Future Project, Open 
Technology Institute (``OTI''), New America Foundation to Marlene H. 
Dortch, Secretary, FCC, GN Docket Nos. 14-28, 10-127 (Nov. 10, 2014) 
(``OTI Letter''); Vonage Letter; Letter from Gene Kimmelman, President, 
Public Knowledge (``PK''), to Marlene H. Dortch, Secretary, FCC, GN 
Docket Nos. 10-127, 14-28 (Nov. 7, 2014) (``PK Letter''); Letter from 
Harold Feld, Sr. Vice President, PK, Michael Calabrese, Director, 
Wireless Future Project, OTI and Erik Stallman, Director of the Open 
Internet Project, Center for Democracy & Technology (``CDT''), to 
Marlene H. Dortch, Secretary, FCC, GN Docket Nos. 14-28, 10-127 (Dec. 
11, 2014) (filed as Public Interest Organizations) (``OTI/PK/CDT 
Letter''); Letter from Marvin Ammori to Marlene H. Dortch, Secretary, 
FCC, GN Docket No. 14-28 (Nov. 12, 2014) (``Ammori Letter''). This 
argument fails--the Commission has no authority to pursue such an 
interpretation of section 332.
    As an initial matter, the Commission has not provided the requisite 
notice for any such amendment. The Administrative Procedure Act 
(``APA'') requires an agency to provide notice of proposed rule 
changes. See 5 U.S.C. Sec. 553. An ``[a]gency notice must describe the 
range of alternatives being considered with reasonable specificity.'' 
Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506, 549 
(D.C. Cir. 1983). Here, the Notice asked only whether mobile broadband 
Internet access service ``fit[s] . . . the definition of `commercial 
mobile radio service.' '' Protecting and Promoting the Open Internet, 
Notice of Proposed Rulemaking, 29 FCC Rcd 5561, 5614  150 (2014). It 
never asked whether ``the definition''--set out in Section 20.3--should 
be changed, or provided notice that it might be. Indeed, while the 
Notice proposed specific additions and changes to various Commission's 
rules, it never raised the possibility of amending section 20.3. 
Comments in the record cannot substitute for the required notice from 
the Commission. The legally mandated ``notice necessarily must come--if 
at all--from the agency.'' Small Refiner, 705 F.2d at 549. Thus, the 
Commission could not amend section 20.3 without first providing notice 
and seeking comment on such a modification. Moreover, any amendment to 
Section 20.3 would have implications well beyond the Open Internet 
context and could well affect the interests of parties not 
participating in this docket, further compounding the notice failure. 
Moreover, if it were not legally barred from amending Section 20.3 (and 
it is), the absence of notice creates substantial risk that any such 
amendment would fail to account for the broad and substantial 
implications stemming from expansion of the CMRS definition.
    In any event, there is no statutory basis for the reinterpretation 
urged by these commenters. While Section 332 directs the Commission to 
define ``public switched network'' by regulation, that definition must 
be consistent with the statutory text and congressional intent. Here, 
whatever limited discretion the Commission has as to that definition, 
it cannot be interpreted broadly enough to cover the broadband 
Internet.
    Indeed, when Congress used the term ``public switched network'' in 
1993, it did so knowing that the Commission and the courts had 
routinely used that term interchangeably with ``public switched 
telephone network.'' \2\ It is axiomatic that, when Congress 
``borrows'' a term of art that has been given meaning by the courts or 
the relevant agency, it ``intended [that term] to have its established 
meaning.'' McDermott Int'l, Inc. v. Wilander, 498 U.S. 337, 342 (1991). 
In this case, Congress--like the courts and the Commission before it--
used ``public switched network'' to mean ``public switched telephone 
network.''
---------------------------------------------------------------------------
    \2\ See Ad Hoc Telecommunications Users Committee v. FCC, 680 F.2d 
790, 793 (D.C. Cir. 1982) (``[WATS] calls are switched onto the 
interstate long distance telephone network, known as the public 
switched network, the same network over which regular long distance 
calls travel.'') (quoted in American Tel. and Tel. Co.; Revisions to 
Tariff F.C.C. No. 259, Wide Area Telecommunications Service (WATS), 
Memorandum Opinion and Order, 91 FCC2d 338, 344  16 (1982)); Amendment 
of Part 22 of the Commission's Rules Relating to License Renewals in 
the Domestic Public Cellular Radio Telecommunications Service, Report 
and Order, 7 FCC Rcd 719, 720  9 (1992) (Commission's cellular service 
policy is to ``encourage the creation of a nationwide, seamless system, 
interconnected with the public switched network so that cellular and 
landline telephone customers can communicate with each other on a 
universal basis.'') (emphasis added)), recon. on other grounds, 8 FCC 
Rcd 2834 (1993), further recon. on other grounds, 9 FCC Rcd 4487 
(1994); Provision of Access for 800 Service, 6 FCC Rcd 5421, 5421  1 
n.3 (1991) (``800 numbers generally must be translated into [plain old 
telephone service] numbers before 800 calls can be transmitted over the 
public switched network.''), recon. on other grounds, 8 FCC Rcd 1038 
(1993); Telecommunications Services for Hearing-Impaired and Speech-
Impaired Individuals, and the Americans with Disabilities Act of 1990, 
Notice of Proposed Rulemaking, 5 FCC Rcd 7187, 7190  20 (1990) 
(``subscribers to every telephone common carriers' interstate service, 
including private line, public switched network services, and other 
common carrier services''); MTS and WATS Market Structure, Order 
Inviting Further Comments, 1985 FCC LEXIS 2900 at *2 (Fed.-State Jt. 
Bd. 1985) (``costs involved in the provision of access to the public 
switched network[] are assigned . . . on the same basis as . . . the 
local loop used by subscribers to access the switched telephone 
network.'') (emphasis added)); Applications of Winter Park Tel. Co., 
Memorandum Opinion and Order, 84 FCC2d 689, 690  2 n.3 (1981) (``the 
public switched network interconnects all telephones in the 
country.'').
---------------------------------------------------------------------------
    This point is confirmed by the text of the more recently enacted 
Section 1422(b)(1), which established the FirstNet public safety radio 
network. In that provision, adopted in 2012, Congress distinguished 
between the ``public switched network,'' on the one hand, and the 
``public Internet,'' on the other, demonstrating that nearly 20 years 
after 1993, Congress continued to view these as different and separate 
networks. 47 U.S.C. Sec. 1422(b)(1). This fact belies any suggestion 
that Congress used the term ``public switched network'' in a way that 
could be interpreted to include the broadband Internet.
    Moreover, Section 332(d)(2) addresses interconnection with ``the 
public switched network.'' Congress's use of that phrasing demonstrates 
that it meant for there to be only one such network; the CMRS 
definition does not contemplate offerings that interconnect with either 
of two separate networks.
    The relevant legislative history further confirms that the 
Congressional understanding is inconsistent with defining the Internet 
to be the ``public switched network.'' The Conference Report 
accompanying the legislation confirms that, though Congress used the 
term ``public switched network,'' it viewed that term as synonymous 
with ``the Public switched telephone network.'' H.R. Rep. No. 103-213, 
at 495 (1993) (Conf. Rep.) (emphasis added) (``OBRA Conference 
Report''). OTI, PK, and CDT claim that the legislative history supports 
the opposite reading, but they have misread the Conference Committee's 
Report. Citing page 495 of the Conference Report, they contend that the 
House version of the bill used the term ``public switched telephone 
network,'' and that the Conference Committee chose the Senate version, 
which dropped the word ``telephone.'' See OTI/PK/CDT Letter at 3-4; OTI 
Letter at 7-8. These groups exclaim in bold, italicized text that 
Congress ``expressly delet[ed] the word `telephone' from Section 332's 
references to `public switched network,' '' but this is not true. The 
House and Senate versions of the bill (attached as Exhibit 1) both used 
the term ``public switched network.'' See 139 Cong. Rec. 
H2997 (reproducing H.R. 2264, the House's version of the 
bill, which (in section 5205(d)(1)(B)) required that a service be 
``interconnected . . . with the public switched network'' in order to 
qualify as CMRS). Therefore, the claim that Congress chose statutory 
text that used the term ``public switched network'' over text that used 
``public switched telephone network'' is factually wrong. The 
Conference Report language to which OTI, PK, and CDT refer (attached as 
Exhibit 2) does not quote the House bill, but rather describes it--and 
characterizes it as requiring interconnection ``with the Public 
switched telephone network,'' OBRA Conference Report at 495, even 
though the legislation itself used the term ``public switched 
network.'' This, of course, confirms (rather than refutes) the 
conclusion that Congress meant the term ``public switched network'' to 
mean ``public switched telephone network,'' and that the Commission 
cannot adopt a contrary definition in section 20.3 of its rules.
    Lacking any textual basis for their claims, commenters resort to 
conclusory assertions regarding Congress's intent. OTI, PK, and CDT 
state that ``it would have been extraordinarily shortsighted if 
Congress had tied the Commission's hands to such a degree that only 
wireless services directly interconnected with the telephone system and 
using the North American Numbering Plan (NANP) could be regulated as a 
common carrier[s] for any purpose.'' OTI/PK/CDT Letter at 6-7; OTI 
Letter at 2. But this argument simply assumes the point it purports to 
prove--that Congress would have wanted the Commission to subject mobile 
broadband to common carrier requirements. In fact, the evidence shows 
otherwise: Congress specifically established CMRS and PMRS as distinct 
categories, specifically limited CMRS to offerings that interconnected 
to the public switched telephone network, specifically deemed all other 
offerings to be PMRS, and specifically exempted PMRS from common 
carrier treatment. These actions show that Congress intended to exempt 
mobile Internet offerings from common carrier regulation. As noted 
above, the Commission recognized this very point, explaining that 
``section 332 . . . did not contemplate wireless broadband Internet 
access service as provided today.'' Wireless Broadband Order, 22 FCC 
Rcd at 5918  45 n.119.
    That point is bolstered, not undercut, by the fact that Congress in 
1993 was aware of the emerging Internet. See OTI/PK/CDT Letter at 4; 
OTI Letter at 5. If Congress had intended to encompass Internet access 
services that are distinct from the PSTN within the definition of CMRS, 
it could--and would--have done so. But it chose instead to draw a sharp 
distinction between traditional common-carrier offerings and other 
offerings, and exempted the latter from common carrier regulations. 
Indeed, this was Congress's principal intention in adopting Section 
332(c)--namely, to ensure that common carrier voice services 
interconnected with the traditional network were treated alike while 
encouraging investment and innovation in new, advanced networks by 
leaving them unburdened by those rules.
    Likewise, Ammori suggests that the Commission can redefine the 
statutory terms because ``the Internet is so central to American life 
and business that it has become the Nation's 21st Century public 
switched network and the current definition should be seen as 
outdated.'' Ammori Letter at 2. This, however, is a policy choice for 
Congress to make, not the Commission. Congress did not tie the CMRS 
designation to the ``centrality'' of the network a service uses, but 
instead limited the term to services that interconnect with the public 
switched telephone network. In any event, there is more than a little 
irony in this argument, given that the mobile broadband Internet has 
become ``central to American life'' without being classified as CMRS or 
subject to common-carrier duties. There is thus no reason to believe 
that Congress would have intended the mobile broadband Internet's 
importance to provide a basis to include it within the definition of 
the public switched network, or that the courts would ever accept such 
an interpretation.
    The Commission may not determine that mobile broadband is 
interconnected. OTI and Vonage further argue that mobile broadband 
already is an interconnected service as that term is currently defined, 
because (in OTI's words) ``broadband users quite readily can call any 
telephone number they wish using their broadband connection.'' OTI 
Letter at 5. See also Vonage Letter at 5 (contending that the statute 
never uses the term ``in and of itself'' and suggesting that one 
service (mobile broadband) can be regulated based on the 
characteristics of a different service).
    The Commission has already expressly rejected that argument. In the 
Wireless Broadband Order, it held that, even though VoIP or other 
applications that ride over mobile broadband Internet service may 
provide an interconnected service, the underlying mobile broadband 
service ``itself is not an `interconnected service' as the Commission 
has defined the term.'' Wireless Broadband Order, 22 FCC Rcd at 5917-18 
 45. In short, services are classified and regulated on the basis of 
their own features. Mobile broadband might well facilitate use of VoIP 
offerings, but the provision of a VoIP offering is atop the broadband 
service, and constitutes its own offering. Mobile broadband does not 
provide dial tone, does not offer the user access to NANP endpoints, 
and does not ``interconnect[]'' with the public switched network. 
Broadband service allows access to video, but it is not a broadcast 
television or cable service. It offers access to Facebook and Instagram 
and LinkedIn, but it is not a social network. Broadband is not a 
newspaper or a financial service, even though users can read headlines 
or purchase stocks online, nor is broadband a bookstore, a music 
streaming service, or a search engine. So too, broadband is not VoIP, 
and cannot be said to offer interconnection with the public switched 
network simply because its users can access other services that do. 
Indeed, the suggestion that over-the-top VoIP services interconnect 
with the PSTN is itself untrue: These providers historically have 
delivered traffic to a local exchange carrier, and it is that carrier--
not the VoIP provider, let alone the mobile broadband provider--that 
interconnects with the PSTN. See, e.g., Time Warner Cable Request for 
Declaratory Ruling that Competitive Local Exchange Carriers May Obtain 
Interconnection Under Section 251 of the Communications Act of 1934, as 
Amended, to Provide Wholesale Telecommunications Services to VoIP 
Providers, Memorandum Opinion and Order, 22 FCC Rcd 3513, 3514  2 (WCB 
2007).
    Other claims seeking to conflate VoIP with mobile broadband for 
classification purposes are similarly misguided. First, the assertion 
that the need to use a VoIP application is no different from the need 
to use an end-user device, and thus not determinative of whether mobile 
broadband service qualifies as CMRS, see OTI/PK/CDT Letter at 5-6; 
Ammori Letter at 1-2, is simply wrong. The VoIP application is distinct 
from the broadband offering over which it rides and, as Commission 
precedent establishes, must be evaluated on its own terms. Second, it 
is irrelevant whether VoIP applications ``come bundled with'' a 
device's ``operating system.'' OTI/PK/CDT Letter at 6. Rather, VoIP and 
mobile broadband are distinct, and each is subject to its own 
regulatory framework. Finally, while commenters might not like 
Congress's framework, the need to use a separate application to access 
a particular service is relevant to classification questions. Indeed, 
the Commission in 2007 held that the ``need to rely on another service 
or application'' was not only relevant, but determinative as to 
classification of a service. Wireless Broadband Order, 22 FCC Rcd at 
5917-18  45.
    Ultimately, the approach advocated by Vonage and others would upend 
the Commission's entire regulatory framework by conflating over-the-top 
services of all types with the broadband offerings on which they ride. 
The effects of such a framework would reverberate throughout the 
Internet ecosystem, eviscerating decades' worth of Commission precedent 
and creating debilitating uncertainty. The Commission must reject this 
outcome, particularly where, as here, the absence of APA notice has 
left it without the benefit of comprehensive and meaningful comment on 
these issues.
B. Mobile Broadband is Not the ``Functional Equivalent'' of CMRS
    OTI, PK, and CDT contend that that the Commission should deem 
mobile broadband the ``functional equivalent'' of CMRS, see OTI/PK/CDT 
Letter at 6-8; OTI Letter at 4-8; PK Letter at 3-5. That argument, 
however, is not presented here, as the Notice does not raise this 
question (which would require a significant factual record), and, in 
any case, its proponents cannot overcome the hurdles erected by 
Congress.
    The FCC Has Failed to Provide Notice. The Commission has not 
provided notice that it might deem mobile broadband the ``functional 
equivalent'' of CMRS. As mentioned above, the Notice asked only whether 
mobile broadband might be deemed CMRS. But the term ``functional 
equivalence'' does not appear in the definition of CMRS. Rather, it 
appears in the definition of PMRS, which is defined to include ``any 
mobile service . . . that is not a commercial mobile service or the 
functional equivalent of a commercial mobile service, as specified by 
regulation by the Commission.'' Id. Sec. 332(d)(3). Having declined to 
seek comment on the PMRS definition generally or the ``functional 
equivalent'' language in particular, the Commission cannot ``specify by 
regulation'' based on the existing record that mobile broadband is the 
functional equivalent of CMRS.
    The Commission cannot rely on Administrative Procedure Act's 
exception for interpretive rules to excuse its failure to provide 
notice and an opportunity to comment the ``functional equivalence'' 
question. As noted above, Congress specifically directed that any 
service deemed the functional equivalent of CMRS would be ``specified 
by regulation by the Commission.'' 47 U.S.C. Sec. 332(d)(3). Where a 
``statute defines a duty in terms of agency regulations, those 
regulations are considered legislative rules.'' USTA v. FCC, 400 F.3d 
29, 38 (D.C. Cir. 2005). Even aside from that clear Congressional 
directive to use legislative rules to identify services that are the 
functional equivalent of CMRS, a declaration that a service is the 
functional equivalent of CMRS meets the test for a legislative rule 
because it would have `` `legal effect.' '' American Min. Cong. v. Mine 
Safety & Health Admin., 995 F.2d 1106, 1112 (D.C. Cir. 1993). 
Specifically, in the ``absence of the rule there would not be an 
adequate legislative basis for . . . agency action to . . . ensure the 
performance of duties''--namely, the common carrier obligations that 
some urge the Commission to impose on providers of wireless broadband 
Internet access services. Id. As the D.C. Circuit recently reiterated, 
the ``most important factor'' in determining whether a rule is 
legislative or interpretive is ``the actual legal effect (or lack 
thereof) of the agency action in question on regulated entities.'' 
National Min. Ass'n v. McCarthy, 758 F.3d 243, 252 (D.C. Cir. 2014). 
The effect of any ``interpretation'' of Sec. 332(d)(3) finding that 
wireless broadband Internet access is the functional equivalent of 
CMRS--indeed, the very purpose of such an interpretation--is to impose 
new common-carrier obligations on providers of that service. For all 
these reasons, the Commission could not adopt a rule finding that 
wireless broadband Internet access is the functional equivalent of CMRS 
without first providing notice and comment--which the Commission has 
never provided.
    Mobile Broadband is Not the Functional Equivalent to CMRS. Nor is 
there any factual or legal basis for a finding of functional 
equivalence. ``Congress's purpose,'' the Commission has concluded, was 
to treat as CMRS only a `` `mobile service that gives its customers the 
capability to communicate to or receive communication from other users 
of the public switched network.' '' Wireless Broadband Order, 22 FCC 
Rcd at 5917  44. Congress intended the hallmark of CMRS to be the 
provision of interconnected service through use of the PSTN. No service 
lacking this essential attribute could amount to a functional 
equivalent of CMRS. The functional equivalent language was intended to 
ensure that `` `similar services are accorded similar regulatory 
treatment.' '' Second CMRS Order, 9 FCC Rcd at 1418  13 (quoting OBRA 
Conference Report at 494). To that end, the Commission observed that 
the primary criterion in determining whether a given service is the 
functional equivalent of CMRS is ``whether the service is a close 
substitute for CMRS,'' id. at 1448  80.\3\ It further made clear that 
it was principally concerned with traditional economic criteria for 
substitutability: ``For example, we will evaluate whether changes in 
price for the service under examination, or for the comparable 
commercial service, would prompt customers to change from one service 
to the other.'' Id. There is no evidence in the record that customers 
are dropping CMRS in favor of mobile broadband--and particularly no 
evidence that they are doing so in favor of mobile broadband itself. In 
all events, the need to develop a record as to such issues demonstrates 
why it would be both necessary and appropriate to seek comments on 
these matters, which the Commission has never done, before addressing 
these claims.
---------------------------------------------------------------------------
    \3\ Thus, for example, the Commission found that automatic vehicle 
monitoring systems ``do not offer interconnected service'' and thus are 
presumptively classified as PMRS, but explained that, if they ``develop 
interconnected service capability in the future . . . they will be 
subject to reclassification.'' Second CMRS Order, 9 FCC Rcd at 1453  
99. Likewise, 220-222 MHz private land mobile services ``that are not 
interconnected . . . will be presumptively classified as PMRS,'' id. at 
1452  95, and SMR services might be either, depending on whether they 
are interconnected, id. at 1451  90-91.
---------------------------------------------------------------------------
    Contrary to some parties' apparent belief, references to the House 
Report's discussion of ``private carriers'' that were ``permitted to 
offer what are essentially common carrier services,'' OTI/PK/CDT Letter 
at 7, quoting H.R. Rep. 103-111 at 586-87, in fact undercut these 
parties' functional equivalence argument. That Report explicitly 
recognized that the functional equivalence prong was limited to 
services that were ``interconnected with the public switched telephone 
network.'' See id. (emphasis added).
    OTI contends that ``mobile broadband is . . . the functional 
equivalent of what a commercial mobile service was in 1993,'' OTI 
Letter at 4, because its users can access the PSTN ``through use of 
VoIP applications,'' id. at 6. Others similarly contend that the 
Commission should deem mobile broadband CMRS's functional equivalent 
because ``phones using mobile broadband are capable of replicating the 
functions of CMRS phones.'' PK November 7 Letter at 5; Vonage Letter at 
9. As noted above, however, these arguments confuse the service offered 
by a VoIP provider (and its CLEC partner) from the separate broadband 
Internet access offering.
    Public Knowledge's suggestion that mobile broadband is (or is about 
to become) ``indistinguishable from Title II wireline service'' is 
flatly wrong. The two services differ dramatically: VoIP offers only 
the ability to engage in voice communications, whereas mobile broadband 
``inextricably combines the transmission of data with computer 
processing, information provision, and computer interactivity, for the 
purpose of enabling end users to run a variety of applications,'' 
Wireless Broadband Order, 22 FCC Rcd at 5911  26, including ``e-mail, 
newsgroups, and interaction with or hosting of web pages,'' id. at 5910 
 25, not to mention the huge array of apps that have arisen since the 
Wireless Broadband Order's release. Indeed, the repeated references to 
VoIP highlights that mobile broadband is not the functional equivalent 
of CMRS--the mobile broadband service that carries VoIP traffic is not 
in and of itself the voice service offered by either CMRS or VoIP, and 
mobile broadband is not a ``close substitute'' for mobile voice. 
(Similarly, voice over LTE (``VoLTE'') is a distinct offering and 
cannot render the broadband offering CMRS.) In all events, even if this 
position were potentially tenable--and it is not--the Commission would 
need to create a factual record as to the substitutability of these 
services using traditional economic analysis. The Commission has not 
even sought to create such a record to date.
    Nor is there any merit to the claim that the Commission must deem 
mobile broadband the functional equivalent of CMRS to resolve a 
potential contradiction between (1) Section 3's requirement that a 
telecommunications service be subject to common carrier requirements 
and (2) Section 332(c)(2)'s prohibition against subjecting PMRS to such 
requirements. See OTI Letter at 2; Ammori Letter at 1; OTI/PK/CDT 
Letter at 8-9. OTI, PK, CDT, and Ammori have things backwards: if there 
were any conflicting commands in the statute, they should lead the 
Commission to adhere to its correct conclusion that broadband Internet 
access is an integrated information service, rather than to ignore the 
plain language of Section 332, under which mobile broadband is not CMRS 
or its functional equivalent. In addition, the canon of construction 
that a ``specific provision controls over one of more general 
application,'' e.g., Gozlon-Peretz v. United States, 498 U.S. 395, 407 
(1991), resolves any possible conflict. That canon requires that the 
Commission give effect to the more specific requirements of Section 
332, which govern wireless providers, and which were intended to ensure 
that private mobile services such as mobile broadband remained immune 
from common carrier mandates. Notably, Congress in that section decided 
that common carrier status would turn not solely on whether a wireless 
provider's service meets the definition of telecommunications service 
in Section 153(53), but also on whether that service meets the narrower 
definition of CMRS in Section 332(d)(1) or is its functional 
equivalent. Because wireless broadband Internet access is PMRS, the 
Commission must enforce Congress's specific and unambiguous command 
that PMRS ``shall not . . . be treated as a common carrier for any 
purpose,'' 47 U.S.C. Sec. 332(c)(2) (emphases added), regardless of the 
Commission's applications of the definitions of telecommunications 
service and information service in Section 153.
C. Mobile Broadband is PMRS and Immune From Common Carrier Regulation
    PMRS, as noted above, is defined by statute to mean ``any mobile 
service . . . that is not a commercial mobile service or the functional 
equivalent of a commercial mobile service, as specified by regulation 
by the Commission.'' Id. Sec. 332(d)(3).
    Vonage is wrong to suggest that this provision is immaterial 
because sections 301 and 303 give the Commission authority over mobile 
service that is ``independent of Section 332.'' Vonage Letter at 3-4. 
The D.C. Circuit firmly rejected this position in both Cellco and 
Verizon, explaining that Section 332's limitations trump affirmative 
grants of power elsewhere in the Act. Thus, in Cellco, the court 
``concluded that Title III authorizes the Commission to promulgate the 
data roaming rule,'' but nevertheless had to face ``the critical 
issue''--whether the rule on review ``contravene[d] the Communications 
Act's prohibition against treating mobile-internet providers as common 
carriers.'' Cellco, 700 F.3d at 544. The Verizon court likewise held 
that, notwithstanding provisions affording the FCC regulatory authority 
over broadband service, it was ``obvious that the Commission would 
violate the Communications Act were it to regulate broadband providers 
as common carriers.'' Verizon, 740 F.3d at 650.
    For the reasons discussed above, mobile broadband is not, and 
cannot be, either CMRS or its functional equivalent. It therefore is 
PMRS, and cannot be subject to common carrier requirements.
II. Mobile Broadband Is An Integrated Information Service With No 
        Separate ``Telecommunications Service'' Component
    As explained above, Section 332 provides an independent and 
complete barrier to imposing common carrier duties on mobile broadband 
providers. But there is a separate, and equally sufficient, barrier to 
imposing those duties: mobile broadband services meet the definition of 
``information service'' and the Commission cannot sub-divide mobile 
broadband services into distinct ``telecommunications service'' and 
``information service'' components.
    As the Supreme Court explained in Brand X, the classification of 
broadband service rests first and foremost ``on the factual particulars 
of how Internet technology works and how it is provided.'' Nat'l Cable 
& Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967, 991 (2005) 
(``Brand X''). Ever since the Commission's 1998 Report to Congress, 
which concluded that broadband providers ``conjoin the data transport 
with data processing, information provision, and other computer-
mediated offerings, thereby creating an information service,'' Federal-
State Joint Board on Universal Service, Report to Congress, 13 FCC Rcd 
11501, 11540  81 (1998), the Commission consistently has held that 
broadband Internet access is an integrated information service, see, 
e.g., Wireless Broadband Order, 22 FCC Rcd 5901. The Supreme Court, of 
course, has upheld that approach. See Brand X, 545 U.S. 967. When the 
Commission examined mobile broadband in 2007, it held that ``[w]ireless 
broadband Internet access service offers a single, integrated service 
to end users, Internet access, that inextricably combines the 
transmission of data with computer processing, information provision, 
and computer interactivity, for the purpose of enabling end users to 
run a variety of applications,'' and concluded that wireless broadband 
``meets the statutory definition of an information service under the 
Act.'' Wireless Broadband Order, 22 FCC Rcd at 5911  26.
    If anything, the transmission and processing functions of mobile 
broadband have become more integrated since 2007. As Drs. Jeffrey Reed 
and Nishith Tripathi explain in a paper that CTIA has entered into the 
record, as mobile technologies and networks have evolved, ``subscribers 
are increasingly using advanced networks for multiple simultaneous data 
services,'' necessitating ``[e]xtensive and complex processing in the 
mobile broadband network. . . .'' Dr. Jeffrey H. Reed and Dr. Nishith 
D. Tripathi, Net Neutrality and Technical Challenges of Mobile 
Broadband Networks at 31, attached to Letter from Scott Bergmann, CTIA, 
to Marlene H. Dortch, FCC, GN Docket Nos. 14-28, 10-127 (filed Sept. 4, 
2014). They show that this tight integration between transmission and 
processing is essential whether the user is browsing a website, engaged 
in mobile video conferencing, or undertaking any of the myriad other 
activities made possible by mobile broadband. Indeed, ``[t]he nodes of 
the entire wireless network infrastructure work together to present a 
single unified view of the network to the subscriber's device and to 
provide service-specific QoS for a user's services according to the 
3GPP LTE framework'' Id. Thus, the factual premises that previously led 
the Commission to classify mobile broadband Internet access offerings 
as integrated information services compel the same result even more so 
today.
    Further, a decision splitting broadband Internet access into 
discrete ``telecommunications service'' and ``information service'' 
components would be especially vulnerable on appeal in light the 
Supreme Court's 2009 decision in FCC v. Fox Television Stations, Inc. 
556 U.S. 502 (2009). That decision held that an agency must ``provide a 
more detailed justification'' for changing course ``than what would 
suffice for a new policy created on a blank slate'' in two 
circumstances: (1) when ``its new policy rests upon factual findings 
that contradict those which underlay its prior policy'' and (2) ``when 
its prior policy has engendered serious reliance interests that must be 
taken into account.'' In those cases, ``a reasoned explanation is 
needed for disregarding facts and circumstances that underlay or were 
engendered by the prior policy.'' Id. at 515. Any decision to 
reclassify mobile broadband service would implicate both of these 
circumstances, because it would (1) reflect new factual findings 
contradicting previous findings and (2) disrupt established reliance 
interests.
    Indeed, the Commission expressly invited the reliance at issue 
here: When it classified mobile broadband as an integrated information 
service more than seven years ago, it explained that ``[t]hrough this 
classification, we provide the regulatory certainty needed to help spur 
growth and deployment of these services.'' Wireless Broadband Order, 22 
FCC Rcd at 5911  27. The result has been clear: America's wireless 
companies have ``invested hundreds of billions of dollars in their 
networks in reasonable reliance on their Title I status.'' See Comments 
of TechFreedom, GN Docket Nos. 14-28, et al, at 95 (July 17, 2014). 
Wireless providers have invested over $113 billion in capital 
expenditures since 2010 alone, including a record $33 billion in 2013. 
See CTIA Ex Parte, Protecting and Promoting the Open Internet, GN 
Docket No. 14-28 (Oct. 1, 2014), http://apps.fcc.gov/ecfs/document/
view?id=60000
870154.
III. The Act Bars Any ``Hybrid'' Reclassification Approach to Mobile 
        Broadband
    Any effort to pursue a so-called ``hybrid'' reclassification of 
mobile broadband service would likewise be unlawful. As CTIA 
understands the hybrid approach, the Commission would leave intact its 
prior holdings that broadband Internet access service provided to 
subscribers is an integrated information service, but would, for the 
very first time, identify a new ``remote host service'' that is 
provided by the broadband provider to the edge (or content) provider, 
and declare that offering to be a telecommunications service. See 
Mozilla, Petition to Recognize Remote Delivery Services in Terminating 
Access Networks and Classify Such Services as Telecommunications 
Services under Title II of the Communications Act, GN Docket Nos. 14-
28, 10-127 & 09-191 at 4-5, 9 (May 5, 2014); Letter from Tim Wu and 
Tejas Narechania, Columbia Law School, to Marlene H. Dortch, FCC, Open 
Internet Remand, GN Docket No. 14-28 (Apr. 14, 2014). The hybrid 
approach has multiple legal infirmities that apply in the context of 
fixed and mobile services alike, as well as separate mobile-specific 
barriers grounded in Section 332(c)(2). And like ``complete'' 
reclassification, hybrid reclassification of mobile broadband is simply 
incompatible with the facts.
A. Section 332 Prohibits the Commission From Subjecting a Hybrid 
        ``Service'' to Common Carrier Mandates
    Section 332(c)(2) bars the Commission from imposing common carrier 
regulation on a mobile broadband provider's ``service'' offered to edge 
providers. Again, the ``service'' at issue is the broadband provider's 
delivery of the edge provider's content to the broadband provider's own 
subscriber over its last-mile facilities, purportedly on the edge 
provider's behalf. This ``service'' clearly is not CMRS or its 
equivalent, both because it is not ``interconnected'' with the public 
switched network (which, as discussed above, means the public switched 
telephone network) and also because it is not offered ``for profit.''
    As a threshold matter, one commenter, Public Knowledge, seeks to 
evade the Section 332(c) analysis by asserting that `` `[s]ender-side' 
broadband. . .is not mobile or necessarily wireless,'' given that the 
edge provider's server ``sits at a fixed location.'' Letter from Harold 
Feld, Public Knowledge, to Marlene H. Dortch, FCC, GN Docket Nos. 10-
127, 14-28 (Oct. 24, 2014). The statute, however, dictates otherwise. 
Section 332(d) establishes that both PMRS and CMRS are mobile services 
``as defined in section 153 of this title,''  (i.e., Section 3 of the 
Act). 47 U.S.C. Sec. 332(d)(1) & (d)(3) (emphasis added). That 
provision defines the term ``mobile service'' to mean ``a radio 
communication service carried on between mobile stations or receivers 
and land stations, and by mobile stations communicating among 
themselves,'' and specifies that the term includes ``both one-way and 
two-way radio communication services.'' Id. Sec. 153(33). Under this 
statutory definition, mobile broadband providers are indisputably 
providing a ``mobile service'' even with respect to the edge provider. 
In particular, the delivery of content over the wireless last mile is 
``a radio communication service carried on between mobile stations or 
receivers and land stations,'' and it is such even if one conceives of 
the sender-side service as a ``one-way'' service.
    Thus, the offering at issue is a ``mobile service'' under Section 3 
and is either PMRS or CMRS. For the reasons discussed herein, it is 
clearly PMRS, and immune from common carrier treatment.
    First, like the service that broadband providers offer to their 
subscribers, any service that might be understood to be provided to 
edge providers is not ``interconnected'' as that term is used in 
Section 332. Specifically, that service does not allow the edge 
provider to connect to ``[a]ny common carrier switched network, whether 
by wire or radio, . . . that uses the North American Numbering Plan in 
connection with the provision of switched services.'' 47 C.F.R. 
Sec. 20.3 (definition of public switched network) (emphasis added). 
Indeed, when a broadband provider delivers an edge provider's content 
to the broadband subscriber, that subscriber is the only entity to whom 
the edge provider can send its content. The edge provider cannot choose 
to send content even to other entities connected to the Internet, much 
less to recipients on networks using NANP numbering. Congress imbued 
the term ``interconnected'' with a specific meaning, tied to the public 
switched telephone network, and any effort to ignore that intent would 
unlawfully collapse the framework established by Congress.
    Second, under Section 332(d)(1), CMRS is a mobile service ``that is 
provided for profit and makes interconnected service available.'' Id. 
Sec. 332(d)(1). Thus, whereas Congress only required that a ``fee'' be 
charged in order for an offering to be a telecommunications service, it 
required even more for a service to be CMRS--that is, such a service 
must be provided ``for profit.'' As discussed above, any ``service'' 
offered by broadband providers to edge providers in connection with the 
delivery of broadband traffic to end users is not offered to such edge 
providers ``for a fee''--and it certainly is not offered ``for 
profit.'' Indeed, even if there were merit to Mozilla's claim that the 
fees paid to broadband providers by their subscribers satisfy the Act's 
``for a fee'' requirement with respect to the ``service'' broadband 
providers offer to edge providers, that argument still would fail to 
demonstrate that the service is provided to the edge provider ``for 
profit.'' In that case, the only service that the broadband provider 
offers ``for profit'' is the service to its subscriber--i.e., the 
entity that pays the broadband provider for the service.
B. Section 3 Precludes the Commission From Pursuing The Hybrid Approach
    Moreover, even if broadband providers offer a ``service'' to edge 
providers as described above, it is not a ``telecommunications 
service'' under Section 3 of the Act. Section 3(53) defines the term 
``telecommunications service'' to mean ``the offering of 
telecommunications for a fee directly to the public, or to such classes 
of users as to be effectively available directly to the public.'' 47 
U.S.C. Sec. 153(53). Any such hybrid ``service'' is not offered ``to 
the public,'' is not made available ``for a fee,'' and, in any event, 
is not even ``telecommunications.''
    First, if such a ``service'' exists, broadband providers do not 
offer it ``directly to the public, or to such classes of users as to be 
effectively available directly to the public.'' In fact, broadband 
providers do not offer any service ``directly'' to edge providers. They 
only offer their services directly to their own subscribers. Edge 
providers, in turn, buy service from other entities--including their 
own broadband providers, transiting providers, content delivery 
networks, and so on. They have a direct relationship with those 
entities, not with the subscriber's broadband provider.
    Second, even if broadband providers offer a ``service'' to edge 
providers, they do not offer that service ``for a fee,'' as the 
``telecommunications service'' definition requires. Broadband providers 
collect fees from their subscribers, and CTIA is not aware of any 
circumstances in which a broadband provider collects a fee from an edge 
provider as compensation for the broadband provider's delivery, to its 
subscriber, of that edge provider's content.
    Mozilla has argued that the Act's ``for a fee'' requirement is 
satisfied by the monies that broadband providers collect from their own 
subscribers. See Comments of Mozilla, GN Docket Nos. 14-28, 10-127 at 
12 (July 15, 2014). This argument fails, because ``the plain meaning of 
the Communications Act. . .suggests that the entity to which the 
service is offered must pay the fee, not some other party.'' Barbara 
van Schewick and Alec Schierenbeck, Comments on Mozilla's Proposal at 
2-3, 7-8, attached to Letter from Barbara van Schewick, Stanford Law 
School, to Marlene H. Dortch, FCC, GN Dockets 14-28, 09-191 (Oct. 30, 
2014). The Commission has held as much: Just as Mozilla suggests that a 
broadband provider can be understood to provide a telecommunications 
service to an edge provider when the ``fee'' the broadband provider 
receives is from a third party (its own subscriber), a competitive LEC 
argued in 2011 that it could be deemed to be providing a 
telecommunications service to a party to whom it delivered traffic when 
the fee that it received was from a third party (in that case, an 
interexchange carrier that paid it access charges in connection with 
the traffic). See Qwest Communications Co., LLC v. Northern Valley 
Communications, LLC, Memorandum Opinion and Order, 26 FCC Rcd 8332, 
8337-38  10 (2011) (quoting Northern Valley's Answer and Legal 
Analysis at 18-22). The Commission disagreed: `` `[I]n order [for the 
service provider's offering] to be a telecommunications service, the 
service provider must assess a fee for its service' ''--i.e., the 
service that is being deemed a ``telecommunications service''--rather 
than for a different service it provides to a different entity. Id. 
(quoting Petition for Declaratory Ruling that pulver.com's Free World 
Dialup is Neither Telecommunications Nor a Telecommunications Service, 
Memorandum Opinion and Order, 19 FCC Rcd 3307, 3312-13,  10 (2004)) 
(emphasis added). That logic applies with equal force here: For the 
``service'' offered by broadband providers to edge providers to be a 
telecommunications service, the broadband providers must charge the 
edge providers a fee for that service. They do not, and the hybrid 
approach is therefore unlawful.
Conclusion
    For the reasons discussed herein, the Act bars the Commission from 
reclassifying broadband Internet services as including a distinct 
telecommunications service component, and from pursuing the ``hybrid'' 
approach. Instead, it should adopt a regulatory framework grounded in 
its Section 706 powers. This remains the best legal path to preserving 
an open Internet.
            Respectfully submitted,
                            CTIA--The Wireless Association

Michael F. Altschul
Scott K. Bergmann
Krista L. Witanowski
CTIA--The Wireless Association
1400 16th Street, NW, Suite 600
Washington, DC 20036

  
  
  
  
  
  
  
  
  

Adam D. Krinsky
Russell P. Hanser
Wilkinson Barker Knauer, LLP
2300 N Street, NW, Suite 700
Washington, DC 20037
  

Michael K. Kellogg
Scott H. Angstreich
KELLOGG, HUBER, HANSEN, TODD, EVANS & FIGEL, P.L.L.C.
Sumner Square
1615 M Street, NW, Suite 400
Washington, DC 20036
December 22, 2014
                               EXHIBIT 1
                               
  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                             

                               EXHIBIT 2
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          GENE KIMMELMAN, PRESIDENT, PUBLIC KNOWLEDGE

    Mr. Kimmelman. Thank you, Mr. Chairman. On behalf of Public 
Knowledge, a non-profit that promotes creativity, freedom of 
expression, and an affordable and open Internet and 
communications platform, I really appreciate the opportunity to 
testify today.
    Mr. Chairman, I would like to start by congratulating you 
on ascending to the throne of this committee. Your staff has 
been wonderful in reaching out, and debating issues, and 
engaging with us, and we really look forward to working with 
you in the coming years. And of course I can always say the 
same, Senator Nelson, for you and your wonderful staff. It is a 
pleasure working with you.
    It is really quite a pleasure to see bipartisan statements 
on this committee about the importance of many of the critical 
principles that are necessary for an open Internet. It is 
really an important bipartisan step that I applaud you for. But 
I must also say that we are extremely pleased to see the FCC 
moving forward with strong net neutrality rules to preserve an 
open Internet, and to address what millions of consumers, small 
businesses, innovators, civil rights organizations have been 
asking for, and that is preserving freedom on the Internet and 
ensuring adequate tools for policing that to promote freedom of 
expression on that important platform of communications.
    We really appreciate your desire in Congress to review all 
the important policies that govern communications, and look 
forward to working with you on that. However, I must urge 
caution in this area in more than three decades of work with 
the Congress and communications regulators, the expert agency. 
It is very important that whatever you do not interfere with 
rules that the agency appropriately can promulgate or legislate 
in a manner that could cause more harm than good.
    Now, what do I mean by that? My experience is that Congress 
is great, really wonderful, and has accomplished a lot when it 
is establishing principles and goals for communications and 
many other policy areas. That is what you do best. That is what 
has worked in the past. And then delegating authority to an 
expert agency to work out all the details and manage the rules 
of the road. And in this space what that has done is enable us 
to go from landline services to wireless services, from 
broadcast to cable, from traditional telecom to broadband 
services.
    But given the tremendous dynamism in this area as well, the 
technology changing so fast, it is also important to make sure 
that we are preparing for what is the next generation of 
offerings for consumers, that we are looking forward and not 
just backward.
    It is extremely dangerous, I believe, for the Congress to 
step in and try to micromanage what is best left to an expert 
agency. Now, what I mean here? In this draft legislation, you 
address a number of important areas--blocking, pay 
prioritization. But general non-discrimination that is harmful 
to competition and freedom of expression, what about that? What 
might the next generation of that be? Caps on services, usage 
caps? Some kind of new fast lanes that are based on quality, 
not speed? Some kind of preferential arrangement for Comcast, 
an AT&T, a Verizon for its own affiliated services? I do not 
know what those might be, but it is absolutely critical that we 
do not need to come back to Congress every time we worry about 
discrimination, but that an expert agency has the authority to 
deal with that.
    In legislating, you need to not just worry about this 
dynamism. Keep in mind that these are companies, wonderful 
companies, that have been found by the courts following agency 
action to have an incentive and an opportunity to discriminate. 
Why? Not because they are bad, but that it is profit 
maximization for these companies. And it is with that incentive 
that we need a policeman, in this case the FCC, to monitor what 
they do. So we need the FCC to be able to exercise all of its 
authority, use all of its tools that are necessary to address 
these dangers. And we believe that requires Title II, which it 
does not appear the draft legislation contemplates.
    And if you are serious about legislating, we also urge you 
to look at the tried and true tools that have protected 
consumers in so many ways, whether it is their privacy, or the 
rights of the disabled, or extending services to rural America, 
or providing subsidies for low income people who could not 
afford essential services, we need to make sure those tools are 
available as well in the broadband area for these services. 
Unfortunately, again, it does not appear the draft legislation 
provides those tools for the FCC.
    So in conclusion, I urge you as you consider evaluating 
what the FCC does, to let them go. Do what you do best, monitor 
them. Step in if they have done it inappropriately, and 
consider all the forward-looking needs that we have for 
consumers in the broadband era. Thank you so much.
    [The prepared statement of Mr. Kimmelman follows:]

   Prepared Statement of Gene Kimmelman, President, Public Knowledge
    Public Knowledge,\1\ along with millions of consumers, civil and 
media rights groups,\2\ small businesses, and innovative start-up 
companies, believes that application of Title II authority under the 
Communications Act is critical to preserve and promote an open Internet 
that is affordable to all and fully supportive of freedom of 
expression.\3\ We therefore support the FCC's current efforts to adopt 
Title II rules in response to the most recent DC Circuit court ruling. 
Public Knowledge also believes it is entirely appropriate for Congress 
to consider updating the Act to address inadequacies in law and to 
guide the FCC's understanding of Congressional intent. However, the 
draft legislation proposed by Chairman Thune on January 16, 2015, 
raises a number of serious concerns about how and when such 
Congressional intervention is warranted, and raises many questions 
about the specific tools Congress must empower the FCC to use in order 
to effectively preserve and promote an open, affordable, 
nondiscriminatory Internet.
---------------------------------------------------------------------------
    \1\ I would like to thank Kristine DeBry, Harold Feld, Kate 
Forscey, Jodie Griffin, Chris Lewis, Sherwin Siy, and Michael Weinberg 
for their substantial contributions to this testimony.
    \2\ See Open Letter to Latino Community Urging Support for Real 
Network Neutrality, signed by the National Hispanic Media Coalition, 
Center for Media Justice and other groups (July 14, 2014). Available at 
http://centerformediajustice.org/2014/07/open-letter-to-latino-
community-urging-support-for-real-network-neutrality/
    \3\ See Letter from Voices for Internet Freedom to Tom Wheeler, 
Chairman, FCC, GN Docket No. 14-28 (Nov. 3, 2014), http://apps.fcc.gov/
ecfs/document/view?id=60000978248; Letter from Comptel, Engine, the 
Computer & Communications Industry Ass'n, and Internet Freedom Business 
Alliance to Tom Wheeler, Chairman, FCC, GN Docket No. 14-28 (Dec. 30, 
2104), http://apps.fcc.gov/ecfs/document/view?id=60001011438; Jonathan 
Weisman, Shifting Politics of Net Neutrality Debate Ahead of FCC Vote, 
N.Y. Times (Jan. 19, 2015) (``The F.C.C. has received four million 
comments on net neutrality--overwhelmingly in favor--ahead of its Feb. 
26 decision day.'').
---------------------------------------------------------------------------
    Public Knowledge cares about keeping the Internet open because the 
Internet has become--as Congress has repeatedly recognized in past 
legislation \4\--the essential communications service of the 21st 
Century. As communication, commerce, and civic engagement increasingly 
depend on broadband Internet access, it becomes even more critical to 
ensure that the Internet remains open for all Americans to participate 
online to the best of their abilities. Fortunately, in Title II, 
Congress has already given the FCC the flexibility to do just that.
---------------------------------------------------------------------------
    \4\ Broadband Data Improvement Act, Pub. L. No. 110-385, Sec. 102 
(2008).
---------------------------------------------------------------------------
The Speed of Broadband Evolution Lends Itself to Agency Oversight
    Since the first publicly reported case of online blocking occurred 
in 2005, when a rural telephone company called Madison River blocked 
competing VoIP calls, our dependence on reliable access to an open 
Internet--and the costs of unreasonable blocking--has continued to grow 
exponentially. The broadband environment has become increasingly more 
complex, and the Congress has already given the FCC a wide variety of 
tools to address it. In 2005, at the time of the Madison River case, no 
one seriously considered that children in rural areas could not do 
their homework unless the FCC reformed the Universal Service Fund to 
promote affordable access. Few people were even aware of bandwidth 
caps, let alone considering how bandwidth caps might have profound 
impact on our economy or the future of innovation. Congress in 2005 
could not have anticipated that broadband providers might track our 
every move with ``Super Cookies,'' or considered the impact of 
broadband services on our ability to complete phone calls to rural 
exchanges, the impact of broadband on our 9-1-1 system, or how 
broadband policy and an open Internet would become a concern in 
retransmission consent negotiations. But all of these policy 
considerations, and more, now crowd the FCC's docket.
    Insisting that protections for the open Internet must include a ban 
on paid prioritization, and that net neutrality rules equally to 
wireless, is not at all the same as saying that these two things are 
the only elements of wise communications policy. To the contrary, as 
affirmed just last year by a 5-0 vote of the Federal Communications 
Commission, our communications policy has always embodied the broader 
fundamental traditional values of service to all Americans, 
competition, consumer protection, and public safety.\5\ Further, as 
discussed below, even the Commission's decisions to reclassify 
broadband as a Title I service occurred against a backdrop of 
expectation that it retained the authority to address both potential 
future conduct that would threaten the open Internet.\6\
---------------------------------------------------------------------------
    \5\ Technology Transitions, et al., GN Docket No. 13-5, et al., 
Order, Report and Order and Further Notice of Proposed Rulemaking, 
Report and Order, Order and Further Notice of Proposed Rulemaking, 
Proposal for Ongoing Data Initiative, 29 FCC Rcd 1433 (2014) 
(Technology Transitions Order).
    \6\ Broadband Industry Practices, Notice of Inquiry, WC Docket No. 
07-52 (2007). See also id., Statement of Chairman Kevin J. Martin; see 
also, Inquiry Concerning High-Speed Access to the Internet Over Cable 
and Other Facilities, GN Docket No. 00-185; Internet Over Cable 
Declaratory Ruling; Appropriate Regulatory Treatment for Broadband 
Access to the Internet Over Cable Facilities, CS Docket No. 02-52, 
Declaratory Ruling and Notice of Proposed Rulemaking, 17 FCC Rcd. 4798 
(2002) (Cable Modem Order), aff'd, Nat'l Cable & Telecomm. Ass'n v. 
Brand X Internet Servs., 545 U.S. 967 (2005), at  108-112.
---------------------------------------------------------------------------
    As then-Chairman Michael Powell explained in his concurring 
statement to the Cable Modem Order: ``The Commission's willingness to 
ask searching questions about competitive access, universal service and 
other important policy issues demonstrates its commitment to explore, 
evaluate and make responsible judgments about the regulatory 
framework.'' \7\ The draft legislation would, for the first time, 
remove the ability of the FCC to ``make responsible judgments about the 
regulatory framework.''
---------------------------------------------------------------------------
    \7\ See Cable Modem Declaratory Ruling, Separate Statement of 
Chairman Michael K. Powell (2002).
---------------------------------------------------------------------------
Congress Best Succeeds When it Legislates Around Broad Principles and 
        Allows Flexibility for Technological Innovation and Economic 
        Change
    The Communications Act of 1934 has survived so long for the same 
reason that legislation based on fundamental principles--such as the 
Federal Trade Commission Act of 1914 and the Sherman Antitrust Act of 
1894--have survived for so long. It relies on broad principles enacted 
by Congress and flexible administration by an expert agency capable of 
handling rapid technological and economic change. This focus on 
fundamental values such as service to all Americans and consumer 
protection--rather than focusing on ``clarity'' and ``certainty'' 
around the issues of the moment--made the United States the undisputed 
leader in telecommunications policy and technology. We are the Nation 
that put a phone on every farm. We are the Nation that invented the 
modern wireless industry. We are the Nation that invented the Internet.
    In all these cases, Title II played a vital part in ensuring our 
global leadership. The Carterfone proceeding and the Computer Inquiries 
of the 1970s and 1980s made the modern Internet possible. They also 
demonstrate the value of rulemaking flexibility. Both proceedings 
responded to changes in technology Congress could not have predicted in 
1934 when it created Title II. Although Carterfone was initially a 
single adjudication, the Commission quickly found this constant case-
by-case approach inherently unworkable and detrimental to the evolution 
of an independent customer equipment market. The Commission therefore 
shifted to its Title II Rulemaking authority to create network 
attachment rules, a development widely praised as paving the way for 
such innovations as the answering machine (the predecessor to modern 
voice-mail service), the fax machine, and ultimately the dial up 
modem--the necessary precursor to today's Internet.\8\
---------------------------------------------------------------------------
    \8\ FCC Office of Plans and Policy Working Paper #31, ``The FCC and 
the Unregulation of the Internet, July 1999.
---------------------------------------------------------------------------
    Similarly, the FCC's initial Computer proceedings that created the 
distinction between ``enhanced services'' (now ``information 
services'') and telecommunications services took place against a 
background of changing technology. Again, the Commission first tried to 
distinguish between ``enhanced services'' and ``telecommunications 
services'' through adjudication.\9\, and again this proved unworkable. 
Rather than providing the certainty necessary for businesses to 
innovate and technology to develop, reliance on case-by-case 
adjudication proved costly, time consuming, and confusing. As a 
consequence, the Commission adopted a set of bright line rules in its 
Computer II proceeding \10\ that allowed a wide range of services, 
including the dial-up Internet, to flourish. As technology and the 
marketplace continued to evolve rapidly, the Commission responded in 
the Computer III proceeding \11\ by relaxing its rules to reflect the 
breakup of the Bell monopoly and their relevant changes.
---------------------------------------------------------------------------
    \9\ Reg. and Policy Problems Presented by the Interdependence of 
Computer and Communications Services, Final Decision, 28 FCC 2d 267 
(1971) (Computer I).
    \10\ In the Matter of Amendment of Section 64.702 of the 
Commission's Rules and Regulations (Second Computer Inquiry), 77 FCC 2d 
384 (1980) (Computer II Final Decision).
    \11\ In the Matter of Amendment of Sections 64.702 of the 
Commission's Rules and Regulations (Third Computer Inquiry), Phase II 
Report and Order, 104 F.C.C.2d 958 (1986) (Computer III Phase II 
Order).
---------------------------------------------------------------------------
    When Congress has legislated to exercise appropriate oversight, it 
has generally recognized the need to preserve regulatory flexibility by 
enhancing rulemaking authority. Congress' actions in 1993 \12\, which 
lay the foundation for the modern wireless industry, illustrate how 
Congress has exercised its responsibility for oversight and used its 
legislative authority to direct the Commission. For more than a decade, 
the FCC struggled to find the appropriate regulatory framework for 
mobile wireless voice services. The Commission relied on case-by-case 
adjudication to determine which services were subject to Title II and 
thus eligible for interconnection rights and access to phone numbers, 
and which services were not Title II and therefore not eligible for 
interconnection. (It is important to stress that the nascent wireless 
industry wanted to be classified as a Title II service to gain the pro-
competitive benefits of Title II classification.)
---------------------------------------------------------------------------
    \12\ Omnibus Reconciliation Act of 1993, Pub. L. No. 103-66, 
enacted August 10, 1993.
---------------------------------------------------------------------------
    The 1993 Act included numerous innovations.\13\ Most importantly, 
Congress replaced the FCC's case-by-case adjudication with a regulatory 
classification for ``commercial mobile radio service'' (CMRS). While 
specifying the general principle for common definition, it explicitly 
required that the FCC define the statutory terms via regulation. 
Congress also explicitly classified CMRS as Title II, but gave the FCC 
the flexibility to forbear from any provisions that it found 
unnecessary.
---------------------------------------------------------------------------
    \13\ For example, the 1993 Act gave the FCC the authority to 
conduct spectrum auctions, which it left to the FCC to define by rule 
subject to guidance from Congress on general principles. See Id.at 
Sec. 309(j).
---------------------------------------------------------------------------
    Finally, in 1996, Congress enacted the most sweeping reform of the 
Communications Act since its inception. In doing so, it benefitted 
tremendously from more than two decades of FCC rulemaking efforts to 
introduce competition into the voice and video marketplace. The 1996 
Act did not abolish Title II or seek to eliminate FCC rulemaking 
authority. To the contrary, Congress depended on the FCC to use the 
combination of Title II rulemaking and forbearance both to shift the 
industry to a more competitive footing and to ensure that the 
fundamental values of consumer protection, universal service, 
competition, and public safety remained central to our critical 
communications infrastructure.
    As these examples show, and as Congress has repeatedly recognized 
in its periodic updates of the Communications Act, rulemaking authority 
provides critical flexibility for the Commission to adapt existing 
rules to rapidly evolving technology and the ever-shifting marketplace. 
A statute captures a single moment in time. It works best, therefore, 
when focused on broad and timeless principles--fundamental values such 
as consumer protection, competition, universal service, and public 
safety--rather than trying to account for every single detail.
    The one exception to this pattern was when Congress passed the 
Cable Act of 1984. In an effort to provide ``certainty'' and 
``clarity,'' Congress stripped both the FCC and local franchising 
authorities of the bulk of consumer protection authority. Congress 
instead included specific provisions to address the handful of specific 
issues that had emerged in the 15 years the FCC had regulated cable 
pursuant to its ancillary authority. Congress assumed that by 
legislating in detail, and addressing the problems immediately before 
it, the 1984 Cable Act would promote both competition and innovation to 
the benefit of consumers.
    Instead of promoting competition and innovation to the benefit of 
consumers, the 1984 Cable Act created a concentrated industry marked by 
escalating prices and poor customer service. Cable operators, free from 
regulatory oversight, worked quickly to crush incipient competition and 
leverage their control over programmers. The situation deteriorated so 
rapidly and thoroughly that, after only eight years, Congress enacted 
an almost complete and sweeping reversal of its 1984 legislation. The 
Cable Consumer Protection and Competition Act of 1992, unlike its 1984 
predecessor, empowered the FCC to address anticompetitive practices and 
promote competition in broad terms.
Measuring The Draft legislation Against This Legislative Background
    Both Houses of Congress have already expressed interest in 
conducting a thorough reexamination of the Communications Act similar 
to the bipartisan effort that culminated in the passage of the 
Telecommunications Act of 1996. Today's draft legislation, 
unfortunately, resembles the catastrophically unsuccessful Cable Act of 
1984. Like the Cable Act of 1984, it has elevated ``certainty'' over 
flexibility and focused on today's headlines rather than on timeless 
fundamental principles.
Prioritization Was Never The Only Concern For An Open Internet
    When the FCC reclassified cable modem service as an information 
service in 2002, it recognized that it needed to address critical 
``social policies'' such as privacy and universal service.\14\ The FCC 
also relied on its broader authority to address new issues, such as the 
first case of VoIP blocking.\15\ When the FCC issued its Wireline 
Reclassification Order \16\ and accompanying Open Internet Principles, 
it simultaneously issued a further notice of proposed rulemaking to 
address concerns around consumer protection, reliability, national 
security, disability access, and universal service.\17\ Critically, the 
Open Internet Principles were never considered on their own as an 
adequate replacement for Title II. Rather, in reclassifying broadband 
as an information service, the Commission assumed it would have 
sufficient authority--via ancillary authority or through other 
statutory provisions--to address consumer protection, disability 
access, and universal service through future rulemakings.
---------------------------------------------------------------------------
    \14\ See, e.g., Cable Modem Order at  72, 110-112.
    \15\ Madison River Communications, LLC and Affiliated Companies, 
File No. EB-05-IH-0110, Consent Decree (2005).
    \16\ Appropriate Framework for Broadband Access To The Internet 
Over Wireline Facilities, CC Docket No. 02-33; Universal Service 
Obligations of Broadband Providers, Review of Regulatory Requirements 
for Incumbent LEC Broadband Telecommunications Services, CC Docket No. 
01-337; Computer III Further Remand Proceedings: Bell Operating Company 
Provision of Enhanced Services, 1998 Biennial Review--Review of 
Computer III ONA Safeguards and Requirements, CC Docket Nos. 95-20, 98-
10; Conditional Petition of Verizon Telephone Companies for Forbearance 
under 47 U.S.C. Sec. 160(c) With Regard to Broadband Services Provided 
By Fiber to the Premises; Petition of Verizon Telephone Companies for 
Declaratory Ruling Or, Alternatively, For Interim Waiver With Regard To 
Broadband Services Provided Via Fiber to the Premises, WC Docket No. 
04-242; Consumer Protection In The Broadband Era, WC Docket No. 05-271, 
Report & Order and Notice of Proposed Rulemaking, Policy Statement, 20 
FCC Rcd 14853 (2005) (``Wireline Framework Order'').
    \17\ See Wireline Framework Order at  146-159; See also Statement 
of Chairman Kevin Martin (``government will continue to have a role in 
this dynamic, new broadband marketplace. Together with our state 
colleagues, the Commission must vigilantly ensure that law enforcement 
and consumer protection needs continue to be met''); Statement of 
Commissioner Kathleen Q. Abernathy (``The Commission has already made 
clear its intention to ensure access to emergency services as Americans 
transition to packet-switched communications technologies, irrespective 
of how those services are classified under the Communications Act. As 
we make clear in today's Notice, we will now turn our attention to 
other ``social policy'' requirements, such as those involving 
disability access, slamming, and consumer privacy.'')
---------------------------------------------------------------------------
    In 2006, Congress considered legislation similar to the draft 
legislation here as part of the Communications Opportunity, Promotion, 
and Enhancement Act of 2006 (COPE Act).\18\ Then, as now, the bill 
proposed to strip the FCC of its regulatory authority and limit the FCC 
to case-by-case adjudication. Even in 2006, this limitation was 
considered too drastic and the entire effort to reform the 
Communications Act crashed on the unwillingness of drafters to allow 
sufficient flexibility for the FCC. The approach taken in the COPE 
legislation has grown less suitable with the passage of time.
---------------------------------------------------------------------------
    \18\ 109th Congress, H.R. 5252 & S. 2686.
---------------------------------------------------------------------------
    When the D.C. Circuit made it clear in the Comcast case that it 
intended to dramatically scale back the applicability of ancillary 
jurisdiction, Public Knowledge was the first organization to urge the 
FCC to reclassify broadband as a Title II service precisely because 
only Title II could provide adequate authority to protect our 
traditional fundamental values of consumer protection, service to all 
Americans, reliability, and competition.\19\ Public Knowledge has 
continued to press for Title II not only as the most straightforward 
way to prevent blocking or paid prioritization, but also as the only 
way to continue to protect the fundamental values that have made our 
communications infrastructure the envy of the world.
---------------------------------------------------------------------------
    \19\ Ex parte Submission of Public Knowledge, GN Docket 09-191 
(filed Jan. 28, 2010).
---------------------------------------------------------------------------
    Congress should therefore follow the successful approach that it 
took in 1993 when Congress used Title II to lay the groundwork for the 
current wireless industry,\20\ and in the approach Congress took in 
1996 when it used Title II to create the modern telecommunications 
market.
---------------------------------------------------------------------------
    \20\ Omnibus Reconciliation Act of 1993, Pub. L. No. 103-66, 
Sec. 6002(b)(2)(A)(iii).
---------------------------------------------------------------------------
The FCC Needs Rulemaking Flexibility
    In 2006, both Democrats and Republicans rejected the COPE Act 
proposal to limit FCC authority over broadband to adjudication of non-
discrimination principles. Lawmakers found it inadequate to protect the 
open Internet and preserve our fundamental values. This approach 
remains inadequate today. Without rulemaking authority, the FCC cannot 
address new circumstances that have already become part of the public 
debate. Nor can it address pressing consumer protection issues, as 
envisioned when the FCC initially classified broadband as an 
information service.
    The lack of rulemaking authority of the Federal Trade Commission is 
frequently cited as one of the weaknesses of the agency, and 
specifically one of the reasons why it cannot adequately address 
concerns about network neutrality. As discussed at length above, while 
adjudication is a useful tool in specific circumstances, it does not 
replace the ability of rulemaking to respond to changes in a dynamic 
marketplace. The process of rulemaking allows all stakeholders to come 
together in a well-defined and deliberative process subject to judicial 
review. It allows the FCC to keep itself informed of technological and 
marketplace developments, and to make necessary adjustments or correct 
mistakes.
    Rulemaking also provides certainty. It ensures consumers can expect 
the same level of protection for a service regardless of the specific 
provider or the specific facts of any given case. It simplifies the 
process of consumer protection for both consumers and the agency. 
Development of a body of case law takes time, and litigating the first 
cases can create enormous expense. Rather than creating clarity and 
certainty, the draft legislation would appear to open the door to 
endless litigation as the only means to clarify the statutory language. 
Rather than permitting consumer protections to evolve in concert with 
the changing broadband marketplace and adjust to changes in technology, 
the shift to adjudication will create ossification and leave consumers 
dangerously exposed as a body of relevant case law slowly develops.
    As noted above, eliminating the FCC's rulemaking authority would 
not be a return to the status quo, but a dramatic shift. The FCC has 
always assumed it has rulemaking authority since it first reclassified. 
When the D.C. Circuit rejected the FCC's theory of ancillary authority 
in 2010, the FCC switched to a theory of regulatory authority using 
Section 706 of the 1996 Act.\21\ The FCC has relied on Section 706 
authority--which the draft legislation would eliminate--to sustain its 
ongoing efforts to reform Universal Service and ensure ubiquitous, 
affordable access to all Americans in accordance with Section 254,\22\ 
the Broadband Data Improvement Act of 2008,\23\ and the relevant 
sections of the American Recovery Act of 2009.\24\
---------------------------------------------------------------------------
    \21\ Now codified at 47 U.S.C. Sec. 1302.
    \22\ 47 U.S.C. Sec. 254
    \23\ Broadband Data Improvement Act of 2008, Pub. L. No. 110-385 
(Oct 10, 2008)
    \24\ American Recovery and Investment Act of 2009, Pub. L. No. 111-
115 (Feb. 17, 2009).
---------------------------------------------------------------------------
    Even while the FCC considered other sources of rulemaking 
authority, the FCC explicitly left Title II as an option should it ever 
become necessary. If Congress intends to remove this option, it needs 
to provide the FCC with an equally flexible tool to replace Title II.
Congress Cuts Short FCC Authority To Address Vital Public Policies
    It is important, therefore, to review the list of consumer 
protections and pro-competitive policies found in Title II which this 
draft legislation would foreclose by prohibiting the Commission from 
classifying broadband as Title II and by eliminating Section 706 as a 
separate source of authority.

   Consumer privacy (Section 222)

   Truth in billing regulations (derived from Section 201)

   Authority to resolve complaints with regard to overcharges 
        or unreasonable billing practices, deceptive practices, failure 
        to provide adequate facilities to support promised services, or 
        otherwise address consumer protection issues (derived from 
        Section 201)

   Authority to address service to all Americans, carrier of 
        last resort, or refusal to serve based on race, religion, or 
        national origin (Section 202)

   Authority over 9-1-1 (Section 251)

   Authority over interconnection (Section 251)

   Ability to compel broadband providers to report outages, or 
        provide other necessary information to compile relevant 
        information so that the Commission may assess deployment, 
        affordability, ability to support critical services such as 9-
        1-1 or national defense, impact on small businesses, or 
        otherwise ascertain any pertinent information relevant to 
        wireline broadband deployment. (Sections 214, 215, 218, 256, 
        257 and 1302 (Section 706))

   Universal Service Fund reform (Sections 254, 1302)

   Disability access (Section 255)

   Access to pole attachments for broadband providers not 
        offering bundled video or Title II telecommunications (Section 
        224)

   Liability for acts and omissions of agents, so that 
        companies cannot use contractors or subsidiaries to avoid 
        responsibility for anti-consumer conduct (Section 217)

   Preemption of state regulation (Sections 253, 1302)

    As noted above, elimination of Section 706 as a source of 
regulatory authority would appear to make it effectively impossible for 
the Commission to collect information necessary to determine whether 
advanced telecommunications services are being adequately deployed to 
all Americans in a timely manner, or to otherwise ascertain essential 
information as to our national broadband infrastructure.\25\
---------------------------------------------------------------------------
    \25\ Comcast Corp. v. FCC, 600 F.3d 642, 659 (D.C. Cir. 2009) 
(interpreting clause stating that Section 256 does not ``expand any 
existing authority'' as negating ancillary authority).
---------------------------------------------------------------------------
    It is also noteworthy that in 2006, when Congress considered 
similar legislation as part of COPE, Congress includes a provision 
expressly preempting state prohibitions on municipal broadband, a 
provision that enjoyed bipartisan support.\26\ Here, the legislation 
proposes to eliminate the primary source of authority for Federal 
preemption of these restrictions without providing any replacement. 
Given that deployment of competing high-speed broadband systems is 
generally recognized today as even more critical than it was in 2006, 
repeal of Section 706 authority without providing any replacement to 
address this issue would be a step backward from where Republicans and 
Democrats were on this issue ten years ago.
---------------------------------------------------------------------------
    \26\ H.R. 5252, Sec. 4.
---------------------------------------------------------------------------
Problems With Alternative Sources Of Authority
    Proponents of the draft legislation note that the Commission may 
have other sources of authority to achieve these goals--notably Title 
III for wireless services and Title VI for cable services. 
Additionally, proponents of the draft legislation argue that by 
classifying broadband as an ``information service,'' that the 
Commission's ancillary authority remains intact.
    As an initial problem, it is hard to reconcile this defense of the 
language with the stated goal of providing certainty. Instead of the 
well-known and established contours of Title II, the legislation would 
require the Commission to hunt among its possible sources of authority. 
Even where authority arguably exists, it may apply only to one 
technology (e.g., wireless, or cable operators) but not others.
    Additionally, the judicial expansion of the ``common carrier 
prohibition,'' and the judicial hostility to exercise of the FCC's 
ancillary authority create further uncertainty. In Echostar Satellite 
LLC v. FCC,\27\ the D.C. Circuit held that because ancillary authority 
is not ``delegated by Congress,'' the court will not defer to any 
Commission use of ancillary authority under Chevron.\28\ The loss of 
Chevron deference for FCC actions using ancillary authority 
significantly undermines its usefulness as a source of authority and 
invites judges to substitute their own judgment for that of the 
agency--hardly a recipe for clarity and certainty.
---------------------------------------------------------------------------
    \27\ 704 F.3d 992 (D.C. Cir. 2013).
    \28\ Id. at 998 n.3. Additionally, the case takes a generally 
narrow view of the FCC's ability to enforce device attachment rules 
through 629. The case is generally instructive of the narrow way the 
D.C. Circuit has read the Commission's Title VI authority, suggesting 
why it would be unduly optimistic to rely on anything in Title VI as a 
source of authority for broadband.
---------------------------------------------------------------------------
    The same is true of the common carrier prohibition. The D.C. 
Circuit has issued two opinions that shed light on what constitutes a 
``core common carrier obligation'' that the FCC may not impose on an 
information service.\29\ It has limited the usefulness of this guidance 
by saying that any too rigid or inflexible application of a rule could 
transform it into a ``common carrier obligation'' and leave enforcement 
open to an ``as applied'' challenge.\30\ Again, this seems a recipe for 
confusion and chaos rather than clarity and certainty.
---------------------------------------------------------------------------
    \29\ Cellco v. FCC, 700 F.3d 534 (D.C. Cir. 2013); Verizon v. FCC, 
740 F.3d 623 (D.C. Cir. 2014).
    \30\ Cellco v. FCC at 548-549.
---------------------------------------------------------------------------
    Finally, we cannot ignore the enormous preclusive effect Congress 
has when it acts. This legislation explicitly proposes to severely 
curtail and limit the scope of FCC authority over broadband Internet 
access service, and shield broadband providers from the consumer 
protections in Title II. Any attempt by the FCC to protect consumers 
using other sources of authority would need to overcome the argument 
that Congress deliberately intended to foreclose Commission action and 
limit it to the language of this specific provision.
Example: How The Draft Legislation Effectively Curtails FCC 
        Jurisdiction Over Interconnection
    Although the language does not explicitly eliminate any FCC 
authority over interconnection, it eliminates any application of 
Section 251 \31\ to broadband or any other ``advanced telecommunication 
service'' by prohibiting Title II classification. It is hard to see how 
the FCC could find authority for any jurisdiction over broadband 
interconnection under this statute. Even if it did find jurisdiction 
under a theory of ancillary authority or from some other source, 
interconnection is a quintessential common carrier obligation. Finally, 
even if the FCC found jurisdiction, and promulgated an interconnection 
rule sufficiently vague to avoid the common carrier prohibition, the 
FCC would face the argument that this is precisely the sort of 
regulation Congress intended to prohibit when it passed the draft 
legislation.
---------------------------------------------------------------------------
    \31\ 47 USC Sec. 251.
---------------------------------------------------------------------------
The Draft Legislative Language Does Not Appear To Address Existing 
        Forms of Discrimination, Let Alone Provide Adequate Authority 
        For Future Forms Of Discrimination Or Other Threats To The Open 

        Internet
    Additionally, the language proposed to address threats to the open 
Internet does not address conduct that would have been reachable under 
the Commission's 2010 rules. In this regard, the draft legislation is 
clearly a step backward, rather than a step forward, and does not 
appear to comport with the traditional understanding of network 
neutrality.
    By changing the broader principle of `no discrimination' into the 
very narrow and limited case of `no paid prioritization or throttling,' 
the draft legislation falls short of even the inadequate rules of 2010, 
let alone the more robust protections offered by Title II. For example, 
these rules would not have prevented AT&T from limiting FaceTime to 
particular tiers of service--as it tried to do in 2012. It would not 
address discriminatory use of data caps, such as Comcast has used to 
favor its own streaming content over that of rivals. It would not 
address potential issues arising at Internet interconnection, the 
gateway to the last mile. Even worse, by eliminating any flexibility on 
rulemaking or enforcement, the bill would prevent the FCC from 
addressing any new forms of discrimination and threats to openness that 
arise.
    If the proposed rule cannot even stop forms of discrimination we've 
already seen, how can it possibly protect the open Internet going 
forward?
    Furthermore, the exemption for specialized services combined with 
the lack of rulemaking authority creates a potential loophole to sell 
prioritized service to specific applications or content simply by 
calling these fast lanes ``specialized services.'' It is true that the 
FCC's 2010 rule had a similar loophole, but the FCC announced it would 
continue to address this with future rulemakings. This draft 
legislation creates the same loophole, but strips the FCC of the power 
to plug it. While the draft legislation prohibits specialized services 
that are clearly a sham, it gives the FCC no power to define this and 
leaves open specialized services that effectively create fast lanes but 
with some fig leaf alternative explanation.
The Draft Legislation Creates An Enormous Loophole For Censorship and 
        Surveillance
    The language of the draft legislation also creates a significant 
loophole that could allow censorship, surveillance, or other actions 
that thwart the Internet's openness under the guise of preventing 
copyright infringement or any other ``unlawful activity.'' A bill that 
would permit ISPs to inspect and discriminate among Internet traffic so 
long as they can argue they are simply engaging in ``reasonable 
efforts'' to prevent infringement or illegal activity could do 
irreparable damage to any Congressional or agency efforts to protect an 
open Internet.
    Although the FCC has in the past included limited exceptions to its 
open Internet rules for copyright measures,\32\ this is significantly 
less worrisome than the draft legislation. An agency creating a rule 
with an exception for copyright infringement is worlds apart from a law 
that prevents the expert agency from using any authority to act against 
discriminatory behavior if the ISP can argue its efforts were designed 
to prevent infringement or any other illegal activity.
---------------------------------------------------------------------------
    \32\ See Preserving the Open Internet, GN Docket No. 09-191, 
Broadband Industry Practices, WC Docket No. 07-52, Report and Order,  
111, Appendix A Sec. 8.9 (Dec. 23, 2010) (``Nothing in this part 
prohibits reasonable efforts by a provider of broadband Internet access 
service to address copyright infringement or other unlawful 
activity.'').
---------------------------------------------------------------------------
    This is not just an academic distinction. After all, the litigation 
that sparked multiple rounds of agency rulemakings on net neutrality 
was centered around Comcast limiting access to peer-to-peer 
applications like BitTorrent, regardless of the legality of the actual 
content being transmitted.\33\ It is not so difficult to imagine 
actions that explicitly or implicitly favor established content 
distributors at the expense of technologies or platforms that could 
potentially be used to infringe copyright, with carriers using the 
copyright infringement loophole of the draft legislation to circumvent 
open Internet enforcement.
---------------------------------------------------------------------------
    \33\ Formal Complaint of Free Press and Public Knowledge Against 
Comcast Corporation for Secretly Degrading Peer-to-Peer Applications 
(Nov. 1, 2007), https://www.publicknowledge.org/pdf/
fp_pk_comcast_complaint.pdf.
---------------------------------------------------------------------------
    Additionally, by elevating this exception in statutory language, 
Congress would invite others to use this provision well beyond its 
intended purpose. For Congress to affirmatively create such an 
exception, despite already stating that open Internet rules are 
subordinate to existing laws governing law enforcement access, the 
statute appears to create permission for unlawful surveillance. Because 
broadband Internet access is the basis for provision of voice-over-IP 
services protected by Section 222, and other electronic communication 
protected by ECPA,\34\ this apparent invitation for broadband access 
providers to `voluntarily' spy on their customers risks undermining 
Congress' ongoing efforts to balance civil liberties with law 
enforcement and national security concerns.
---------------------------------------------------------------------------
    \34\ 18 U.S.C. Sec. 2701 et seq.
---------------------------------------------------------------------------
    Similarly, by uniquely elevating intellectual property within the 
context of the Communications Act, the draft legislation may be argued 
to expand the requirement for broadband operators to take measures to 
read and intercept arguably infringing traffic well beyond the existing 
safe harbor requirements under the Digital Millennium Copyright Act 
\35\ and the Communications Decency Act.\36\ Unlike regulatory 
language, which is often merely explanatory and clearly limited, it is 
a canon of statutory interpretation that every word of legislation is 
to be given substantive meaning. Congress should not create new 
ambiguities and uncertainties in an already contentious area of law.
---------------------------------------------------------------------------
    \35\ 17 U.S.C. Sec. 512.
    \36\ 47 U.S.C. Sec. 230(c)(1). The breadth of the bill's exception 
for efforts targeted at any ``other unlawful activity'' not only 
encompasses alleged copyright infringement, but a wide range of 
allegations, including defamation, misappropriation, discrimination, 
breaches of contracts, and a host of others.
---------------------------------------------------------------------------
Precluding the Use of Title II Through Legislation Raises Serious 
        Concerns
    Those seeking to limit FCC authority like to recite the mantra 
``first do no harm.'' While we appreciate Congress' role in updating 
the Communications Act periodically, we remain concerned that the draft 
legislation is likely to cause more harm than benefit. We urge the FCC 
to move forward on Title II rules and urge Congress to evaluate those 
in light of broader policy goals and the concerns we raise about the 
draft.
    The history of the development of our modern communications 
landscape demonstrates that Title II preserves critical values, 
promotes competition and investment, and is flexible enough to 
accommodate changes in technology and the marketplace. The concerns 
that Title II is insufficiently flexible for broadband can--and 
should--be thoroughly examined in this fuller context. In doing so, 
Congress can continue to protect the fundamental values of our 
communications system.

 STATEMENT OF HON. ROBERT M. McDOWELL, PARTNER, WILEY REIN LLP 
              AND SENIOR FELLOW, HUDSON INSTITUTE

    Commissioner McDowell. Thank you, Mr. Chairman, and Ranking 
Member Nelson, and all the distinguished members of the 
Committee. It is really an honor to be back here before you 
again. I am a partner at Wiley Rein and as a Senior Fellow of 
the Hudson Institute's Center for Economics of the Internet. 
Nonetheless, I am not testifying today on behalf of any client 
of Wiley Rein or on behalf of the Hudson Institute. Any 
opinions I express today are purely my own.
    From my perspective, by the way, I think it is quite 
appropriate for your first hearing of the new Congress to be 
focused on the future of the Internet. I have always supported 
the goals of an open Internet that maximizes freedom, and that 
is precisely what the private sector built as the Internet 
migrated further away from government control.
    We are here today, however, because the FCC is on the brink 
of applying an antiquated, but powerful, 80-year-old law to the 
dynamic and ever-evolving Internet. Title II of the 
Communications Act of 1934 was designed in an era when people 
held their phones with two hands. While I was a Commissioner, I 
kept my grandmother's 1950s black rotary dial phone from San 
Angelo, Texas on my desk to remind me of the lack of innovation 
and investment produced by Title II. On her birthday--you all 
may remember this--we kids would stay up past 11 p.m. to call 
her because the heavy-handed regulatory capture of Title II 
produced artificially high long distance rates, which came down 
just a little, late at night.
    The FCC's Chairman, a friend of mine, maintains that the 
so-called just and reasonable standard of Sections 201 and 202 
will be good policy for America's world-leading Internet 
economy. He and I are both students of history, so let us allow 
history to be our guide to test that premise.
    Since President Franklin D. Roosevelt signed Title II into 
law, the principles underpinning Sections 201 and 202 have been 
litigated in Federal appellate courts nearly 400 times, with 
the last decision being rendered as recently as 2012. That 
equates to an average of five court cases per year since Title 
II became law. And those are only cases that involve the just 
and reasonable standard and not other aspects of Title II, 
which my friend, Gene Kimmelman, has suggested also be included 
in new FCC rules.
    Similarly, within the FCC itself, the just and reasonable 
standard has been litigated in administrative proceedings 1,069 
times. That equates to more than 13 cases per year since 
inception of Title II. In short, ``just and reasonable'' is 
perhaps the most litigated term telecommunications 
jurisprudence. Applying it to the Internet would create a 
billable hours bonanza for telecom lawyers, so really I should 
be all for this. But is this what we want America's 21st 
century tech policy to look like? To put a finer point on it, 
do we want the robust Internet economy to be shaped by 
engineers, consumers, and entrepreneurs, or lawyers?
    Today, policymakers have a choice in front of them, a sharp 
choice. Do they want to protect an open Internet, or do they 
want broader government engineering of the Internet ecosphere? 
The draft bill, although imperfect, attains the ostensible 
policy goals net neutrality proponents have advocated for years 
by essentially restating existing law, but allowing the FCC to 
enforce it. For instance, the bill prohibits anti-competitive 
throttling and paid prioritization. It also mandates 
transparency for consumers and much more.
    These are also the goals outlined by President Obama in his 
Directive to the FCC of November 10. Logically then, net 
neutrality proponents should be happy with the goals of the 
draft, but some want more than their stated goals. They want 
Title II and the power that comes with it. But make no mistake: 
Title II would drag America's tech sector under its purview.
    The Supreme Court said as much when it held in 2005 that 
reclassification of broadband Internet under Title II, ``would 
subject to mandatory common carrier regulation all information 
service providers that use telecommunications as an input to 
provide information services to the public.'' Translated, if 
you think you are merely a content, or application provider, or 
a tech company, after Title II reclassification you could be 
eventually regulated like an old-fashioned phone company. This 
is especially true as tech and telecom companies continue to 
morph to look like one another. And FCC attempts to refrain or 
forebear from the vast majority of Title II's 1,000 or so 
requirements will likely fail an appeal because any reasons 
given to justify sweeping forbearance logically undercut the 
reasons for applying Title II to begin with. In other words, 
Title II classification and massive forbearance contradict each 
other.
    Although I continue to advocate for a comprehensive rewrite 
of our communications laws to focus more on consumer 
protection, as Senator Nelson pointed out, rather than outdated 
technology-centric approaches, the draft in front of the Senate 
today provides all sides of this debate with the opportunity to 
declare victory. The last question is, will they?
    Thank you very much, and I look forward to your questions.
    [The prepared statement of Mr. McDowell follows:]

Prepared Statement of Hon. Robert M. Mcdowell, Partner, Wiley Rein LLP 
                  and Senior Fellow, Hudson Institute
Overview
    Chairman Thune, Ranking Member Nelson and distinguished Members of 
the Committee, thank you for having me testify before you today. My 
name is Robert McDowell. From 2006 until 2013, I served as a 
Commissioner of the Federal Communications Commission (FCC). Currently, 
I am a partner of the internationally recognized law firm of Wiley Rein 
LLP. I am also a Senior Fellow at the Hudson Institute's Center for 
Economics of the Internet, a non-profit, non-partisan policy research 
organization. Nonetheless, I am not testifying today on behalf of any 
client of Wiley Rein or on behalf of the Hudson Institute. The opinions 
I express today are strictly my own.
    I am especially honored to be testifying at the first substantive 
hearing of this Committee in the 114th Congress. From my biased 
perspective, it is quite appropriate that your first hearing is focused 
on the future of Internet freedom.
    I have always supported policies that promote an open and freedom-
enhancing Internet. That is precisely what the American private sector 
built as the result of long-standing and bipartisan public policy that 
insulated the Net from unnecessary regulation.
    During my tenure at the FCC, the issue of government regulation of 
Internet network management, or ``net neutrality,'' came before me 
several times in a variety of contexts. I am deeply familiar with the 
arguments for and against new regulations in this area. I voted against 
the Commission's first two attempts to issue new rules for many 
reasons, not the least of which was that the FCC was reaching beyond 
the powers Congress gave it. Each time, the appellate courts largely 
agreed and largely struck down the FCC's attempt to regulate in this 
space.\1\
---------------------------------------------------------------------------
    \1\ Verizon v. FCC, 740 F.3d 623 (D.C. Cir. 2014); Comcast Corp. v. 
FCC, 600 F.3d 642 (D.C. Cir. 2010).
---------------------------------------------------------------------------
    The 114th Congress has a historic opportunity to end the debate by 
forging ahead with a legislative alternative.
    In the meantime, however, the FCC faces one of the most important 
questions in its 80-year history: are its intentions to protect an open 
Internet, or merely to establish its unlimited power over the entire 
Internet ecosphere? FCC Chairman Tom Wheeler says we will have an 
answer on February 26.
    As he said at the Consumer Electronics Show on January 7, his 
preference is to depart from Clinton-era bipartisan policy and classify 
the Internet as a ``utility'' using Title II of the Communications Act 
of 1934.\2\ Chairman Wheeler noted that while the Commission initially 
considered a regulatory approach under Section 706, such an approach--
based on a ``commercially reasonable'' standard--was deemed 
insufficient because ``commercially reasonable could be interpreted as 
what is reasonable for the ISPs, not what's reasonable for consumers or 
innovators.'' \3\ Instead, Chairman Wheeler indicated that the 
Commission will impose the Title II ``just and reasonable'' 
standard.\4\
---------------------------------------------------------------------------
    \2\ 47 U.S.C. Sec. 201 et seq.
    \3\ Hon. Tom Wheeler, Chairman, FCC, Address to the 2015 
International Consumer Electronics Show (Jan. 7, 2015).
    \4\ Id. (noting that the FCC will ``propose rules that say no 
blocking, no throttling, [and no] paid prioritization,'' and that the 
``yardstick against which behavior should be measured . . . is just and 
reasonable'').
---------------------------------------------------------------------------
    I am deeply familiar with Title II, having studied its mandates for 
seven years as a senior Commissioner on the FCC and as an attorney for 
more than 24 years in the telecommunications arena. I can say with 
confidence that bringing down the blunt ``command-and-control'' sledge 
hammer of Title II onto the Internet will eventually cause collateral 
damage to America's tech economy.
    As ``tech'' and ``telecom'' companies morph to look like each other 
by deploying their own massive fiber and wireless networks embedded 
with software and content to better serve consumers, Title II will end 
up regulating all such companies under its ``mother-may-I-innovate'' 
dictates. The Supreme Court said as much in 2005 in its Brand X 
decision.\5\
---------------------------------------------------------------------------
    \5\ NCTA v. Brand X Internet Servs., 545 U.S. 967, 994 (2005) 
(``[Reclassification] would subject to mandatory common-carrier 
regulation all information-service providers that use 
telecommunications as an input to provide information service to the 
public.'').
---------------------------------------------------------------------------
    Furthermore, as the Progressive Policy Institute determined last 
year, Title II regulation of the Net could trigger state and local 
regulations, taxes and fees costing consumers ``a whopping $15 
billion'' a year. And that's ``on top of the adverse impact on 
consumers of less investment and slower innovation that would result'' 
from Title II.\6\
---------------------------------------------------------------------------
    \6\ Robert Litan and Hal Singer, Outdated Regulations Will Make 
Consumers Pay More for Broadband, Progressive Policy Institute, at 1 
(Dec. 1, 2014).
---------------------------------------------------------------------------
    And make no mistake, trying to refrain, or ``forbear,'' from 
applying most of Title II's approximately 1,000 heavy-handed 
requirements while selecting only a few, as proposed by Chairman 
Wheeler, will make an FCC order impossible to defend in court because 
the picking and choosing between who gets regulated and who does not 
will look arbitrary and politically-driven to appellate judges.
    The tragedy of this debate is that no one, including phone, 
wireless and cable companies, has ever contested the goals of keeping 
the Internet open. It has been open and freedom-enhancing since it was 
privatized in the mid-1990s due to market forces and protections under 
existing antitrust and consumer protection laws. Instead, the fight has 
devolved into a question of how overreaching and heavy-handed the FCC 
would be in pursuing its ostensible goals.
    It's time to choose a different path and put to rest this debate. 
Although I still hope for a comprehensive rewrite of our Nation's 
communications laws, the legislation being considered today has the 
potential to provide all sides with a way out.
    For net neutrality supporters, they would achieve their long-
sought-after goals of: adding protections for consumers and tech start-
ups; ensuring Internet service providers could not unlawfully block or 
throttle content and applications or impose anticompetitive paid 
prioritization requirements; creating Congressionally-defined 
enforcement authority for the FCC in this space, and more. They would 
also be able to enjoy, for the first time, the certainty that a court 
cannot hand them another loss, or that a future FCC could not roll back 
the rules.
    For opponents of new FCC rules, the bill would: take the specter of 
Title II off the table; restore regulatory certainty; protect freedom 
of speech; clip the FCC back onto its Congressional leash so it can't 
regulate the entire Net; and create a legal firewall that would protect 
investment and innovation in the computer network infrastructures that 
underpin the Internet ecosphere.
    The unelected FCC stands at a fork in the road. If it rushes down 
the Title II lane, it will own the consequences: decreased investment, 
a hobbled tech sector, new taxes and fees on consumers and global 
regulators emboldened to regulate the Net like an old-fashioned phone 
company as well.\7\ Going in this direction would reveal that having 
full power over the Net economy was what the FCC really wanted all 
along.
---------------------------------------------------------------------------
    \7\ Expansion of the government's reach into the operations of the 
Internet is only providing cover and encouragement to foreign 
governments as well as multilateral and intergovernmental institutions 
that want to have, as Vladimir Putin said, ``international control of 
the Internet.'' Vladimir Putin, Prime Minister of the Russian 
Federation, Working Day, Prime Minister Vladimir Putin Meets with 
Secretary General of the International Telecommunications Union 
Hamadoun Toure, Gov't Of The Russian Fed'n (June 15, 2011), available 
at http://premier.gov.ru/eng/events/news/15601/.
---------------------------------------------------------------------------
    In the other direction, however, the FCC can attain its and the 
White House's stated policy goals, be protected by Congressional 
action, and bask in the glow of achieving a bipartisan consensus of 
historic proportions. The future of the Internet, and America's digital 
economy, deserve no less.
Extended Analysis
Classifying Broadband as a ``Utility''--Style Common Carrier Under 
        Title II of the Communications Act of 1934 Would Generate 
        Litigation and Uncertainty, Cause Unintended Consequences and 
        Undermine Growth in the Entire Internet 
        Ecosystem
    The notion that retrofitting Title II, an antiquated--but 
powerful--80-year-old statute designed for the copper-based, analog, 
voice-only phone monopolies of the early 20th Century, would somehow be 
good for the dynamic and ever-evolving Internet ecosphere is a faulty 
premise. Title II has the potential to be devastating to the entire 
Internet ecosystem. While I was a Commissioner, I kept my grandmother's 
1950s black rotary-dial phone from San Angelo, Texas in my office as a 
reminder of the lack of innovation and investment produced by Title II. 
The law erroneously presumed that a natural monopoly for 
telecommunications would always exist and, accordingly, it froze in 
place the technologies of the day. As a result, America was denied the 
benefits of entrepreneurial risk taking such as new investment, 
innovation, lower prices and improved consumer choice. Over time, 
markets, regulators and legislators were able to create a deregulatory 
environment that fostered a virtuous cycle of investment and innovation 
that obviated the need for regulation.
    During my 24 year career in the telecommunications space, I have 
become quite familiar with the Communications Act. As the FCC moves 
forward with its plan to impose Title II onto the Internet, even if 
ostensibly ``lightly,'' \8\ I am deeply concerned about the 
ramifications of excavating an ancient law that was written when people 
held their phones in two hands and applying it not only to America's 
beautifully chaotic tech sector but also to technologies and services 
that have not yet been invented.
---------------------------------------------------------------------------
    \8\ See Wheeler, supra note 3.
---------------------------------------------------------------------------
    As a threshold matter, FCC Chairman Tom Wheeler's proposal to apply 
sections 201 and 202 \9\ to Internet access will inevitably lead to 
litigation. Not only will the legality of the FCC's new order be 
challenged, but subsequent enforcement actions will be as well.
---------------------------------------------------------------------------
    \9\ Id.
---------------------------------------------------------------------------
    Let's allow history to be our guide. Since being signed into law by 
President Franklin D. Roosevelt in 1934, the principles underpinning 
sections 201 and 202 have spawned nearly 400 court cases.\10\ The first 
appellate case was decided in 1936 \11\ and the most recent appellate 
court decision was handed down in 2012.\12\ Additionally, as the result 
of decades of administrative litigation, the FCC itself has issued over 
1,000 decisions attempting to apply the same ``just and reasonable'' 
standard Chairman Wheeler proposes today.
---------------------------------------------------------------------------
    \10\ This estimate of court cases was determined by researching 
cases citing the ``just and reasonable'' or ``unjust or unreasonable'' 
standards in the context of sections 201(b) and 202(a) of the 
Communications Act. The cases included in this estimate vary with 
respect to the depth of analysis involved and provide a general context 
as to the amount of litigation sections 201 and 202 have spawned over 
the years. See, e.g., Global Crossing Telecomms., Inc. v. Metrophones 
Telecomms., Inc., 550 U.S. 45, 47 (2007); Ambassador, Inc. v. United 
States, 325 U.S. 317, 323 (1945); AT&T Co. v. United States, 299 U.S. 
232, 246-47 (1936); Cellco P'ship v. FCC, 700 F.3d 534, 548 (D.C. Cir. 
2012); Virgin Islands Tel. Corp. v. FCC, 444 F.3d 666, 669-70 (D.C. 
Cir. 2006); AT&T Corp. v. FCC, 448 F.3d 426, 435 (D.C. Cir. 2006); 
Nat'l Ass'n of State Util. Consumer Advocates v. FCC, 372 F.3d 454, 
456, 460 (D.C. Cir. 2004); Orloff v. FCC, 352 F.3d 415, 419 (D.C. Cir. 
2003); Hi-Tech Furnace Sys., Inc. v. FCC, 224 F.3d 781, 792 (D.C. Cir. 
2000); Bell Atlantic Tel. Co. v. FCC, 79 F.3d 1195, 1202 (D.C. Cir. 
1996); Am. Message Centers v. FCC, 50 F.3d 35, 39 (D.C. Cir. 1995); MCI 
Telecommunications Corp. v. FCC, 59 F.3d 1407, 1414 (D.C. Cir. 1995); 
Capital Network Sys., Inc. v. FCC, 28 F.3d 201, 204 (D.C. Cir. 1994); 
Nat'l Rural Telecom Ass'n v. FCC, 988 F.2d 174, 184 (D.C. Cir. 1993); 
Illinois Bell Tel. Co. v. FCC, 988 F.2d 1254, 1260 (D.C. Cir. 1993); 
Competitive Telecomms. Ass'n v. FCC, 998 F.2d 1058, 1064 (D.C. Cir. 
1993); MCI Telecomms. Corp. v. FCC, 917 F.2d 30, 39 (D.C. Cir. 1990); 
MCI Telecomms. Corp. v. FCC, 842 F.2d 1296, 1303 (D.C. Cir. 1988); Ad 
Hoc Telecomms. Users Comm. v. FCC, 680 F.2d 790, 795 (D.C. Cir. 1982); 
Am. Broad. Companies, Inc. v. FCC, 663 F.2d 133, 138 (D.C. Cir. 1980); 
MCI Telecomms. Corp. v. FCC, 627 F.2d 322, 336 (D.C. Cir. 1980); AT&T 
Co. v. FCC, 449 F.2d 439, 450 (2d Cir. 1971).
    \11\ AT&T Co., 299 U.S. at 246-47.
    \12\ Cellco P'ship., 700 F.3d at 548.
---------------------------------------------------------------------------
    In short, the term ``just and reasonable'' is perhaps the most 
litigated phrase in telecommunications jurisprudence. Is this what we 
want America's 21st Century tech policy to look like? And I say this as 
an attorney, with all due respect to my fellow practitioners: do we 
want our world-leading Internet economy to be shaped by engineers, 
consumers and entrepreneurs, or lawyers?
    Additionally, not only would a new Title II regime, however 
``skinny,'' produce an abundance of lawsuits and uncertainty, but the 
premise of applying it to begin with is flawed as well. Proponents of 
regulating the Internet under Title II argue that doing so would 
prevent ``two-sided markets,'' usage-based pricing and 
``discrimination'' \13\ of Internet traffic. In fact, the exact 
opposite is true. Not only does Title II allow usage-based pricing, 
that is exactly what it is designed to regulate.\14\ Not only does it 
allow for the ``reasonable'' discrimination of traffic, it mandates 
that similarly situated producers of traffic can be charged similar 
rates if those rates are just or reasonable.\15\ Title II would not 
prevent network operators from charging some content and application--
or ``edge''--providers to carry their Internet traffic. Indeed, Title 
II would allow for a ``sending party pays'' construct that some 
American edge providers and network operators are battling against 
together in international regulatory arenas.\16\ Furthermore, it would 
provide cover and encouragement to the Vladimir Putins of the world who 
are looking to regulate the Internet globally.
---------------------------------------------------------------------------
    \13\ The term ``discrimination'' is often misused in the net 
neutrality debate. Discrimination can have many meanings. To a network 
engineer, discrimination is absolutely necessary and means having the 
ability to manage Internet Protocol networks. For instance, consumers 
downloading movies want those video bits to arrive on their screens 
quickly and without interference from other Internet traffic such as e-
mail or voice over Internet protocol (VoIP) communications. Similarly, 
a caller using VoIP in an emergency wants his/her call to 911 to take 
priority over Internet traffic carrying a cat video. Another example is 
Internet traffic carrying heart monitoring data from a patient to his/
her doctor. During a medical crisis, the patient will want 
discrimination, thus allowing life-saving data to reach the doctor as 
quickly as possible and ahead of other traffic. This is also known as 
``prioritization,'' something net neutrality proponents oppose. 
Treating all Internet traffic ``equally,'' as many net neutrality 
proponents want, would undermine the beneficial aspects of allowing the 
freedom to innovate through the ability to discriminate in the 
engineering context. What should not be permitted, and is prohibited 
under existing antitrust and consumer protection laws, is 
discrimination that has an anticompetitive effect that harms consumers. 
Boiling the net neutrality debate down to the bumper sticker of ``treat 
all Internet traffic equally'' may have popular appeal, but it is a 
misleading slogan that will likely have dangerous implications if it is 
codified as public policy.
    \14\ 47 U.S.C. Sec. Sec. 201-202.
    \15\ Id. Sec. 202(a).
    \16\ Revisions of the International Telecommunications 
Regulations--Proposals for High Level Principles to be Introduced in 
the ITRs, ETNO, CWG-WCIT12 Contribution 109, at 2 (2012), available at 
http://www.itu.int/md/T09-CWG.WCIT12-C-0109/en.
---------------------------------------------------------------------------
    At the consumer level, industry analysts have concluded that new 
utility-like economic regulation of the Internet would likely ``have 
the perverse effect of raising prices to all users'' (hitting low-
income users the hardest), and some users would likely see the end of 
their service entirely.\17\
---------------------------------------------------------------------------
    \17\ Howard Buskirk, Investors, Analysts Uneasy About FCC Direction 
on Net Neutrality, Comm. Daily, Oct. 2, 2009, at 2; see also National 
Cable & Telecommunications Association Comments at 19 and Verizon and 
Verizon Wireless Reply Comments at 17-18 to Preserving the Open 
Internet, GN Docket No. 09-191; Street Talk, CableFAX, June 14, 2010 
(``But while it's business as usual now, capital investment will come 
down if Title II becomes a reality, said Credit Suisse telecom services 
dir[ector] Jonathan Chaplin. He said the next place companies would 
look to capture some of the return is costs, which would mean jobs.'').
---------------------------------------------------------------------------
    Finally, a Title II framework would lay a broad-based legal 
foundation for the Commission eventually to regulate the entire 
Internet ecosystem--not just network operations, but content, 
applications and potentially devices. Such is the goal of the 
influential thought-leader of the movement, the man who coined the term 
``net neutrality,'' Columbia law professor, Timothy Wu. He provided 
refreshingly honest testimony alongside me at a House Judiciary 
Committee hearing on net neutrality last June.\18\ His influence over 
shaping the arc of net neutrality policies is not merely theoretical--
it is real and highly effective. For example, Professor Wu has 
tremendous influence at the FCC, having authored the first-ever net 
neutrality merger conditions during the Commission's approval of the 
AT&T/BellSouth transaction in 2006.\19\ In short, the ultimate policy 
goal of many Title II proponents is comprehensive industrial policy for 
the entire Internet space.
---------------------------------------------------------------------------
    \18\ See House Judiciary Subcommittee on Regulatory Reform, 
Commercial and Antitrust Law, Net Neutrality: Is Antitrust Law More 
Effective than Regulation in Protecting Consumers and Innovation?, 
113th Congress, 2nd sess., 2014 (testimony of Timothy Wu), available at 
http://judiciary.house.gov/_cache/files/bcecca84-4169-4a47-a202-
5e90c83ae876/wu-testimony.pdf. (noting that state manipulation of the 
Net would shape ``not merely economic policy, not merely competition 
policy, but also media policy, social policy'' and ``oversight of the 
political process'').
    \19\ Spencer E. Ante, Tim Wu, Freedom Fighter, Bus. Wk., Nov. 8, 
2007, available at http://www.businessweek.com/stories/2007-11-08/tim-
wu-freedom-fighterbusinessweek-business-news-stock-market-and-
financial-advice; Robert M. McDowell, This is Why the Government Should 
Never Control the Internet, Wash. Post, July 14, 2014, available at 
http://www.washington
post.com/posteverything/wp/2014/07/14/this-is-why-the-government-
should-never-control-the-internet/.
---------------------------------------------------------------------------
    Furthermore, turning information services into telecommunications 
services via a de novo classification effort by the FCC would render 
drawing a principled line between broadband service providers and other 
entities that combine transmission with information processing or 
storage, such as the content delivery networks that give us Netflix 
movies or YouTube videos, impossible. In short, as ``tech'' and 
``telecom'' companies blend their technologies and business operations, 
or ``converge,'' to better serve consumers, the differences between 
them are disappearing. Many such companies have thousands of miles of 
fiber (embedded with intelligence and content) that connect servers and 
routers all over the country to deliver a slurry of ones and zeros 
(which present themselves to consumers as voice, data and video 
services) as quickly as possible to consumers. Designed in 1934, Title 
II is incapable of seeing these 21st Century technological distinctions 
and is likely to draw all such companies under its powerful purview. 
The Supreme Court has warned that this scenario could develop. It held 
in its Brand X decision in 2005 that ``[reclassification] would subject 
to mandatory common-carrier regulation all information-service 
providers that use telecommunications as an input to provide 
information service to the public.'' \20\ Or, as Robert Litan recently 
explained, ``[t]here is a very slippery slope from having designated 
ISPs as being subject to common carriage regulation to having to 
include other forms of Internet transmissions as well because they 
arguably use `telecommunications services', the legal hook in Title II 
for its application.'' \21\ That captures nearly any edge provider that 
owns even the smallest amount of transmission, processing, storage or 
caching facilities.
---------------------------------------------------------------------------
    \20\ Brand X, 545 U.S. at 994.
    \21\ See Robert E. Litan, Regulating Internet Access as a Public 
Utility: A Boomerang on Tech If It Happens, Economic Studies at 
Brookings, at 2 (June 2, 2014).
---------------------------------------------------------------------------
    This analysis is neither new nor partisan.\22\ In fact, the 
Clinton-era FCC Chairman, William Kennard, presciently said in 1998:
---------------------------------------------------------------------------
    \22\ American Internet policy enjoys a rich heritage of 
bipartisanship. The Clinton-Gore-era flexible ``hands-off'' approach to 
Internet governance, and other Internet policy matters, has been 
supported by both Republicans and Democrats in Congress and the FCC for 
over two decades. These policies have served not only American 
consumers and the U.S. economy well, but also have helped spread 
freedom and prosperity across the globe through the power of the mobile 
Internet. This year, Congress has an opportunity to recast American 
Internet policy in a constructive and bipartisan manner worthy of its 
heritage.

        Turning specifically to the matter of Internet access, we note 
        that classifying Internet access services as telecommunications 
        services could have significant consequences for the global 
        development of the Internet. We recognize the unique qualities 
        of the Internet, and do not presume that legacy regulatory 
        frameworks are appropriately applied to it.\23\
---------------------------------------------------------------------------
    \23\ Federal-State Joint Board on Universal Service, CC Docket No. 
96-45, Report to Congress, 13 FCC Rcd 11501,  82 (1998).

---------------------------------------------------------------------------
    Just two years later, he reiterated:

        It just doesn't make sense to apply hundred-year-old 
        regulations meant for copper wires and giant switching stations 
        to the IP networks of today. . . . We now know that decisions 
        once made by governments can be made better and faster by 
        consumers, and we know that markets can move faster than 
        laws.\24\
---------------------------------------------------------------------------
    \24\ Hon. William E. Kennard, Chairman, FCC, Remarks at the Voice 
Over Net Conference: Internet Telephony--America Is Waiting (Sept. 12, 
2000).

    And here's what the Clinton White House had to say about placing 
legacy regulations on the Internet: ``We should not assume. . .that the 
regulatory frameworks established over the past sixty years for 
telecommunications, radio and television fit the Internet.'' \25\
---------------------------------------------------------------------------
    \25\ The White House, A Framework for Global Electronic Commerce 
(July 1, 1997).
---------------------------------------------------------------------------
    Rather than applying the 80-year old Communications Act to the 
Internet, if Congress believes that a change is needed to protect 
consumers, entrepreneurs, innovation and free markets, it should 
consider new legislation that is narrowly tailored and reflects the 
market realities of the early 21st Century. Even more importantly, 
Congress should consider a comprehensive update of our communications 
laws, and I hope that would be a topic for a future hearing.
Wireless Broadband Is Different from Wireline Internet Services and 
        Should Not Be Subject to Rigid Rules
    The American wireless industry has been a crown jewel of the 
American economy for over 30 years. In fact, since its inception, the 
domestic wireless industry has invested more than $430 billion in 
infrastructure.\26\ The White House Office of Science and Technology 
has noted that ``[a]nnual investment in U.S. wireless networks grew 
more than 40 percent between 2009 and 2012, from $21 billion to $30 
billion.'' \27\
---------------------------------------------------------------------------
    \26\ CTIA--The Wireless Association, CTIA's Wireless Industry 
Summary Report: Year-End 2013 Results (2014), available at http://
www.ctia.org/docs/default-source/Facts-Stats/ctia_survey_
ye_2013_graphics-final.pdf?sfvrsn=2; John C. Hodulik, et al., U.S. 
Wireless 411: Version 5, UBS, Nov. 25, 2014, at 10.
    \27\ FCC, Fact Sheet: Internet Growth and Development (2014), 
available at https://apps.fcc.gov/edocs_public/attachmatch/DOC-
325653A1.pdf.
---------------------------------------------------------------------------
    Analysts' projections estimate that between 2013 and 2017 wireless 
infrastructure investment will generate as much as $1.2 trillion in 
economic growth and create (directly and indirectly) up to 1.2 million 
new jobs.\28\ This will result in an estimated $85 to $87 billion of 
economic growth each year from 2013 through 2017, giving a 2.2 percent 
boost in GDP by 2017.\29\ Furthermore, the use of unlicensed spectrum, 
like Wi-Fi, generates an estimated $62 billion a year for the U.S. 
economy.\30\
---------------------------------------------------------------------------
    \28\ Alan Pearce, J. Richard Carlson & Michael Pagano, Wireless 
Broadband Infrastructure: A Catalyst for GDP and Job Growth 2013-2017 
(2013), available at http://www.pcia.com/images/
IAE_Infrastructure_and_Economy_Fall_2013.PDF.
    \29\ Id.
    \30\ Consumer Electronics Association, Unlicensed Spectrum and the 
American Economy: Quantifying the Market Size and Diversity of 
Unlicensed Devices (2014), available at http://www.ce.org/
CorporateSite/media/gla/CEAUnlicensedSpectrumWhitePaper-FINAL-
052814.pdf.
---------------------------------------------------------------------------
    Wireless carriers are investing in the world's best infrastructure 
because competition is fierce. According to an FCC report released just 
last month, as of January 2014, 93.8 percent of the U.S. population had 
access to at least three mobile broadband providers, and 83.8 percent 
lived in areas with coverage by four or more mobile broadband 
providers.\31\ Robust competition is providing a strong check against 
anti-competitive behavior. Accordingly, the long-standing and 
bipartisan consensus regarding public policy in the wireless space has 
been to allow competition to obviate the need for command-and-control 
regulation and industrial policy. As the statistics reveal, this hands-
off approach has produced a constructive explosion of entrepreneurial 
brilliance which is benefiting consumers. Now is not the time to put 
our gains at risk by injecting rigid regulations into a thriving 
competitive market.
---------------------------------------------------------------------------
    \31\ Implementation of Section 6002(b) of the Omnibus Budget 
Reconciliation Act of 1993; Annual Report and Analysis of Competitive 
Mobile Conditions with Respect to Commercial Mobile Services, 
Seventeenth Report, WT Docket No. 13-135, Table III.A.v (rel. Dec. 18, 
2014).
---------------------------------------------------------------------------
    Furthermore, America is leading the world in 4G wireless 
technologies and services, or LTE. U.S. consumers account for more than 
37 percent of the world's LTE subscribers even though America is home 
to less than five percent of the world's population.\32\ By contrast, 
Western Europe, with a population greater than the U.S., accounts for 
just 13 percent of the world's LTE subscribers.\33\
---------------------------------------------------------------------------
    \32\ Ovum's Informa Telecoms & Media World Cellular Information 
Service (WCIS+) (as of Sept. 2014).
    \33\ 4G Americas, Global LTE Connections (as of Sept. 2014), 
available at http://www.4gamericas.org/
index.cfm?fuseaction=page&pageid=2055.
---------------------------------------------------------------------------
    Dominance in 4G penetration and adoption is giving America a 
decisive advantage in the highly competitive global marketplace. We 
didn't get here through government mandates or industrial policy, 
however. Investment in new wireless technologies, unfettered by 
unnecessary government regulation, is producing faster mobile data 
connection speeds. Specifically, average mobile connection speeds in 
the U.S. are 30 percent higher than in Western Europe.\34\ Best of all, 
that gap is expected to grow. As the ``Internet of Everything'' 
(``IoE'') explodes to connect billions more devices to the Net--through 
mobile technologies, from cars to health monitoring equipment to 
inventory control technologies--it will transform the global economy 
and America will have an advantage over our economic rivals.\35\
---------------------------------------------------------------------------
    \34\ See Cisco VNI Forecast Highlights, available at http://
www.cisco.com/web/solutions/sp/vni/vni_forecast_highlights/index.html.
    \35\ See Deloitte, How policy actions could enhance or imperil 
America's mobile broadband competitiveness, Sept. 2014, at 17, 
available at http://www2.deloitte.com/content/dam/Deloitte/us/
Documents/technology-media-telecommunications/us-tmt-mobile-index-
09262014.pdf (``Bullish industry forecasts include an estimate of 26 
billion installed Internet of things units by 2020, impacting the 
global supply chain, and a prediction of 24 billion connected devices 
globally by 2016, resulting in a $1.2 trillion impact to North American 
economies from revenues, cost reductions, or service improvements.'').
---------------------------------------------------------------------------
    New phone-monopoly-style regulations applied to wireless broadband 
by the FCC, however, could inhibit investment and innovation, and 
America could lose her competitive advantage in the mobile and IoE 
space.
    In view of the unique characteristics of wireless broadband, it was 
the bipartisan and unanimous consensus of the FCC in its 2010 Open 
Internet Order that the heart of new net neutrality rules not be 
applied to wireless broadband services.\36\ The primary reason for 
treating wireless and wireline differently is that mobile broadband 
technologies use shared networks. Wireless consumers may not realize 
it, but they are sharing bandwidth with their neighbors. The sharing of 
wireless bandwidth creates a host of technical and operational 
challenges associated with the availability of capacity, the lack of 
predictability about consumer demand and the scarcity of spectrum. As 
such, the intricate art of network management of wireless networks is 
far different from that of fiber or coaxial-based networks.\37\ 
Applying rigid, one-size-fits-all regulations to mobile broadband would 
tie the hands of engineers trying to maximize network efficiency for 
consumers as they are forced to live under new government supervision. 
Innovation, investment and consumer well-being would be at risk as new 
rules would create uncertainty and spark a counterproductive 
regulation/litigation cycle.\38\ Any new legislation should take into 
account the unique characteristics of wireless broadband.
---------------------------------------------------------------------------
    \36\ Preserving the Open Internet, GN Docket No. 09-191, WC Docket 
No. 07-52, Report and Order, 25 FCC Rcd 17905,  80-92 (2010).
    \37\ For instance, according to CTIA--The Wireless Association, ``a 
single fiber strand can carry 1,000 times more bits per second than a 
10 GHz radio channel.'' Reply Comments of CTIA--The Wireless 
Association, GN Docket Nos. 14-28, 10-127, at 3 (filed Sept. 15, 2014). 
Wireless technologies are, indeed, different and highly complex, and 
should not be burdened by new ``one-size-fits-all'' regulation.
    \38\ See Robert Litan and Hal Singer, The Best Path Forward on Net 
Neutrality, Progressive Policy Institute, at 8 (Sept. 4, 2014) (noting 
that ``a heavy-handed Title II approach could risk substantial core 
investment without generating any offsetting incremental investment at 
the edge'').
---------------------------------------------------------------------------
    Furthermore, as a matter of law, Congress would have to act to 
create a new framework for wireless broadband. The FCC cannot 
accomplish this on its own. In Title III, Congress wisely prohibited 
the FCC from regulating wireless broadband services as common carriage 
under Title II.\39\ It is a misconception that Section 332 provides the 
FCC with the power to regulate wireless broadband under Title II, as 
Chairman Wheeler stated at the Consumer Electronics Show two weeks ago. 
In fact, the U.S. Court of Appeals for the D.C. Circuit has held 
recently that wireless broadband providers ``are statutorily immune, 
perhaps twice over, from treatment as common carriers.'' \40\
---------------------------------------------------------------------------
    \39\ 47 U.S.C. Sec. 332(c)(2).
    \40\ Cellco P'ship, 700 F.3d at 538.
---------------------------------------------------------------------------
    In Section 332, Congress codified an important distinction between 
a ``commercial'' mobile service and ``private'' mobile service.\41\ A 
commercial mobile service ``interconnects'' with the public switched 
telephone network (``PTSN'').\42\ A private mobile service, by 
contrast, is not interconnected with the PSTN.\43\ By definition, 
wireless broadband does not connect to the PSTN because it is an 
Internet access service.
---------------------------------------------------------------------------
    \41\ 47 U.S.C. Sec. 332(d).
    \42\ Id. Sec. 332(d)(1); see also 47 C.F.R. Sec. 20.3.
    \43\ 47 U.S.C. Sec. 332(d)(3).
---------------------------------------------------------------------------
    In 1993, Congress enacted legislation mandating that the FCC treat 
these two services differently.\44\ For commercial mobile services, or 
traditional voice cellular services connected to the PSTN, Congress 
instructed the FCC to impose narrowly defined common carrier 
regulations.\45\ For private mobile services, including what are now 
mobile broadband services, however, Congress declared that ``[a] person 
engaged in the provision of a service that is a private mobile service 
shall not, insofar as such person is so engaged, be treated as a common 
carrier for any purpose.'' \46\ In short, to be ``treated as a common 
carrier'' means the FCC cannot impose Title II-style public utility 
regulation on a wireless broadband service provider.\47\
---------------------------------------------------------------------------
    \44\ Pub. L. No. 103-66, 107 Stat. 312 (1993).
    \45\ Id. Sec. 332(c)(1).
    \46\ Id. Sec. 332(c)(2).
    \47\ Verizon, 740 F.3d at 652; 47 U.S.C. Sec. Sec. 201, 202. Even 
though wireless carriers will often provide their customers with both 
commercial and private mobile services under a single contract, the FCC 
may only treat wireless carriers as common carriers under Title II when 
they are providing traditional mobile voice services. See Cellco, 700 
F.3d at 538.
---------------------------------------------------------------------------
    Simply put, Congress has already spoken: Section 332 clearly bars 
the FCC from regulating wireless broadband under Title II.\48\ Attempts 
to circumvent Congress's direct mandate will be overturned in court.
---------------------------------------------------------------------------
    \48\ 47 U.S.C. Sec. 332(c)(2).
---------------------------------------------------------------------------
Conclusion
    The Internet ecosphere is blossoming beautifully, resulting in the 
most positive and constructive transformation of the human condition in 
history. If Congress chooses to act, it should do so in a tailored 
manner. In the meantime, while the directly elected representatives of 
the American people work together in good faith on these issues, the 
FCC should delay further action.
    Thank you for the opportunity to testify and I look forward to your 
questions.

    The Chairman. Thank you, Mr. McDowell.
    Mr. Misener?

   STATEMENT OF PAUL MISENER, VICE PRESIDENT, GLOBAL PUBLIC 
                       POLICY, AMAZON.COM

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

 Prepared Statement of Paul Misener, Vice President for Global Public 
                           Policy, Amazon.com
    Thank you, Chairman Thune and Ranking Member Nelson. My name is 
Paul Misener, and I am Amazon's Vice President for Global Public 
Policy. Thank you for your attention to this important topic; for 
calling this hearing; and for inviting me to testify.
I. Introduction
    Amazon has long supported maintaining the fundamental openness of 
the Internet, which has been so beneficial to consumers and innovation. 
We made our first FCC filing in support of the open Internet over 
twelve years ago, even before the term ``net neutrality'' was coined. 
Amazon also has long joined with other parties in support of net 
neutrality. A decade ago, we were a leading member of a coalition that 
included dozens of companies, as well as dozens of public interest 
groups from across the political spectrum. At the time, many 
policymakers questioned the benefits of Internet openness, and whether 
such benefits needed to be ensured by government. But now there is 
widespread acceptance of the need for government action to ensure 
Internet openness; now policymakers need only decide how to ensure that 
the Internet openness of net neutrality is maintained and effective. 
Amazon currently supports net neutrality through the Internet 
Association, as well as directly and through other organizations.
    At Amazon, our consistent business practice is to start with 
customers and work backwards. That is, we begin projects by determining 
what customers want and how we can innovate for them. Here, in the 
context of net neutrality public policy, we have done the same: we take 
our position from our customers'--consumers'--point of view.
    Consumers want to keep the fundamental openness of the Internet and 
the choice it provides. After two decades of the World Wide Web, it's 
no longer a novelty: Consumers have come to expect and demand openness 
and choice on the Internet--to demand net neutrality. Consumers also 
have come to understand that bits are bits; that it shouldn't be any 
harder or more expensive for their broadband Internet access service 
provider to deliver one bit over another, and that there's no technical 
or other inherent reason to discriminate against one bit over another, 
or prioritize one bit over another.
    Consumers will recognize if net neutrality is taken from them. And 
if their net neutrality is taken, they won't care how or, for example, 
where in the network infrastructure it is taken: If net neutrality is 
taken at one point in the network, rather than another, consumers won't 
care. They are results-oriented: At the end of public policy 
discussions and decisions, consumers ultimately will judge whether 
Internet openness was ensured--whether they got to keep net neutrality, 
or whether it was taken away from them.
II. Legal Authority
    Consumers certainly will be results-oriented in their assessment of 
what particular legal authority the United States Government uses to 
ensure that net neutrality is maintained: The authority will either 
work, or it won't. We believe that the FCC has ample existing statutory 
authority to maintain net neutrality, and we welcome Chairman Wheeler's 
attention to this issue and his efforts to use his statutorily-granted 
authority in a measured, focused way. We would not want discussions of 
new statutory authority to derail or delay Chairman Wheeler's work but, 
like he recently has said, we also would welcome additional statutory 
direction from Congress.
    Some telecom lawyers believe the FCC cannot fully maintain historic 
net neutrality protections employing only the provisions of Section 706 
of the Telecommunications Act. Recent litigation suggests they are 
right. Such lawyers also point out that the FCC could ``un-forebear'' 
the entirety of Title II of the Communications Act for this purpose, 
and they are right. But some other telecom lawyers believe that if the 
FCC reinstated all of Title II, there would be myriad unintended 
consequences unrelated to net neutrality. They are probably right, too, 
and Amazon is focused on strong, enforceable net neutrality 
protections, so we don't support a complete return to Title II here. We 
have concluded that reinstating only a few provisions of Title II--
particularly all or parts of Sections 201, 202, and 208--plus relying 
on other existing statute, including Section 706, would be adequate to 
maintain net neutrality without creating unintended consequences.
    But, of course, these approaches are within the confines of 
existing statutory authority. Obviously, Congress has the power to set 
new policies for net neutrality, either entirely through a new statute, 
or through a mix of new and existing statutory authority.
III. Discussion Draft
    Amazon remains very grateful for Congress's continuing attention to 
net neutrality. The topic certainly is worthy of your vigilant 
oversight. Thank you also, Mr. Chairman, for creating and sharing your 
Discussion Draft bill, and for providing me the opportunity to begin 
discussing it today. I look forward to continuing conversations about 
net neutrality protections in the coming weeks and months.
    The principles of net neutrality contained in the Discussion Draft 
are excellent: For example, the draft clearly acknowledges that 
throttling and paid prioritization must be banned; that net neutrality 
protections must apply to wireless, as well as wireline; and that 
providers must disclose their practices.
    Of course, for these excellent principles of Internet openness to 
be meaningful to consumers, they need to be effective. In at least 
three instances, however, the Discussion Draft could be interpreted to 
undermine that effectiveness, so the bill should be modified 
accordingly to ensure that the Internet openness of net neutrality is 
maintained and effective.
    First, in Subsection (d), while requiring ``Consumer Choice,'' the 
bill would explicitly exempt ``specialized services'' from that 
requirement. This could create a huge loophole if, for example, 
specialized services involved the prioritization of some content and 
services, just like proscribed ``paid prioritization,'' the only 
difference being that the content or service prioritized came from the 
broadband Internet access service provider itself, instead of a third 
party.
    Subsection (d)(1) reads, ``Nothing in this section shall be 
construed to limit consumer choice of service plans or consumers' 
control over their chosen broadband Internet access service. . . .'' 
Hopefully, no one wants to limit actual consumer choice. Indeed, 
consumer choice is exactly what advocates of net neutrality have been 
trying to preserve and protect for over a dozen years. But other than 
the ``specialized services'' that are explicitly exempted from the 
consumer choice requirement, it is not obvious what part of the bill 
might be construed as limiting consumer choice. Almost explicitly, 
therefore, the bill acknowledges that the provision of such specialized 
services would defeat consumer choice and the Internet openness of net 
neutrality, despite the limitations of Subsection (d)(2).
    Consumer choice is baked into the Internet. Nothing would protect 
consumer choice more than protecting the open Internet from 
interference by broadband Internet access service providers. As I have 
described in previous testimony before Congress, the Internet is 
fundamentally different--both in technical design and practical 
operation--from other major media, including newspapers, radio 
broadcasting, satellite TV, and cable. In those media, content is 
``pushed'' out to consumers--and thus fills up the papers, channel, or 
channels--in the hope that many consumers will want to read, hear, or 
watch the content. In contrast, Internet consumers ``pull'' to 
themselves the content of their choosing, so Internet content does not 
fill a broadband Internet access provider's network unless a consumer 
has pulled it through there. Again, the open Internet is all about 
consumer choice, so Subsection (d) is unnecessary if this bill 
otherwise would ensure the Internet openness of net neutrality.
    If, contrary to these concerns, the purpose of Subsection (d) is to 
ensure that consumers are allowed to choose among various, non-
discriminatory plans based on bit rates or monthly data volumes, then 
there are ways to say that more clearly: Something along the lines of, 
``Nothing in this section should be construed to limit the ability of 
consumers to choose to pay for higher or lower data rates or volumes of 
broadband Internet access service based on their individual needs.'' We 
agree that it makes no sense to require an infrequent e-mail user to 
pay the same for Internet access as a 24/7 gamer and, if such a 
clarification is needed, we would support it. But the current language 
of Subsection (d) does not accomplish this goal and introduces the 
other noted problems.
    Second, in Subsection (f), the Discussion Draft bill would permit 
broadband Internet access providers to engage in ``reasonable network 
management.'' This is a standard caveat to net neutrality, and we 
support it, at least in theory. But particularly with the inclusion of 
wireless broadband in the ambit of net neutrality protections, any 
claim of reasonable network management should be viewed very 
suspiciously if, in practice, it undermines prohibitions of blocking, 
throttling, paid prioritization, etc., or if it tends to favor content 
or services offered by the broadband provider itself.
    Third, the Discussion Draft bill is unclear or silent on an 
important point of clarification: Which parts of a broadband Internet 
access service provider's network are covered by the net neutrality 
protections? As indicated earlier, a consumer will not care where in 
her service provider's network any interference with net neutrality 
occurs, only whether it occurs. Providers should not be allowed to 
accomplish blocking, throttling, paid prioritization, etc., further 
upstream in the network, just because the bill could be construed to 
address only the network facilities closer to consumers, such as the 
``last mile.'' If, by this possible omission and limitation of FCC 
powers, net neutrality were made ineffective by allowing the otherwise 
prohibited behaviors to occur further upstream, consumers would rightly 
judge their net neutrality to have been taken away.
    In sum, these three areas of the Discussion Draft bill should be 
modified in order to ensure that the Internet openness of net 
neutrality is maintained and effective.
    In addition, the Discussion Draft should be modified to provide 
adequate legal detail and certainty to consumers and businesses in the 
Internet ecosystem. Although the Discussion Draft's net neutrality 
principles are promising, they also are fairly general. And, although 
the Discussion Draft would require, in Subsection (a)(5), broadband 
Internet providers to disclose their practices, these disclosures would 
merely reflect what providers currently are doing, not what they would 
be legally permitted to do.
    Like all businesses, Internet companies need confidence in the 
state of law and regulation in order to innovate and invest in products 
and services on behalf of their customers. They need to know, with a 
reasonable degree of certainty, whether a new product or service could 
be deployed without interference by broadband Internet access service 
providers. Certainty does not require legal certitude, but it does 
require confidence-inspiring transparency, predictability, stability, 
and fairness. Yet statutes are necessarily less detailed than agency-
written rules. And such details--including the factors that would be 
considered during formal complaint procedures--are essential for 
businesses and consumers to have the confidence to make informed 
choices about investments and purchases.
    We believe that the FCC should be empowered to create adequate 
legal certainty and detail through effective enforcement tools and 
notice and comment rulemaking. But the Discussion Draft bill would 
limit the FCC in several ways. Subsection (b) says that the FCC ``may 
not expand . . . Internet openness obligations . . . beyond the 
obligations established'' in the bill ``whether by rulemaking or 
otherwise.'' The word ``expand'' is vague, but if the intention here is 
to establish a ceiling for these obligations, i.e., a cap on the FCC's 
authority respecting the substantive provisions of the bill, this is 
Congress's prerogative and reasonable expectation; we certainly don't 
support allowing an agency to act beyond its statutory authority, and 
would support a provision like this, if the bill went only so far.
    However, with such a ceiling in place, it is not necessary to 
rescind the FCC's authority under Title II of the Communications Act, 
as in Subsection (e). Summarily blocking the FCC's use of existing 
statutory enforcement authority could leave the agency helpless to 
address improper behaviors well within its authority under the ceiling 
created in Subsection (b), and would leave consumers and businesses in 
the Internet ecosystem without adequate certainty about the FCC's 
enforcement powers. With so much at stake for consumers and businesses, 
this very real possibility should not be left to chance. We believe 
that the FCC's Title II authority should be maintained to ensure the 
effectiveness of Internet openness, subject to any reasonable 
substantive ceiling on Internet openness obligations.
    Also, in part because Subsection (b) directs the FCC to establish 
``formal complaint procedures'' and ``enforce the obligations [of the 
bill] though adjudication of complaints,'' this provision could be 
interpreted to bar the FCC from notice and comment rulemaking in this 
area. If that is the intent, we oppose it. Directing the FCC not to 
``expand'' statutorily-established obligations is one thing, but we 
believe it would be a mistake to prohibit the Commission from 
providing, through notice and comment rulemaking, adequate legal detail 
and certainty to consumers and businesses. Outlining the parameters 
around permissible forms of ``reasonable network management'' is but 
one example of where the FCC could provide important detail to 
consumers and businesses through notice and comment rulemaking. Notice 
and comment rulemaking also would more readily expose any attempt by 
the FCC to ``expand'' the open Internet obligations of the bill, and 
thus would promote the core purpose of this subsection. And notice and 
comment rulemaking provides an important avenue for public 
participation in the work of government agencies; this avenue should 
not be blocked for net neutrality.
    Thus, at a minimum, Subsection (e) should be amended to ensure that 
the FCC retains its Title II tools, subject to a substantive ceiling on 
Internet openness obligations, such as included in Subsection (b)(1), 
which itself should be clarified to allow the FCC to provide, through 
notice and comment rulemaking, adequate legal detail and certainty to 
consumers and businesses.
IV. Conclusion
    In conclusion, Mr. Chairman, I look forward to working with you, 
your committee, and the FCC to ensure that the Internet openness of net 
neutrality is maintained and effective.
    And I welcome your questions.

    The Chairman. Thank you, Mr. Misener.
    Mr. Simmons?

  STATEMENT OF W. TOM SIMMONS, SENIOR VICE PRESIDENT, PUBLIC 
              POLICY, MIDCONTINENT COMMUNICATIONS

    Mr. Simmons. Chairman Thune, Ranking Member Nelson, members 
of the Committee, thank you so much for inviting me here today 
to discuss how Congress can update our Internet laws to ensure 
vigorous broadband investment and an open Internet for the 
future. My name is Tom Simmons. I am the Senior Vice President 
of Public Policy for Midcontinent Communications.
    Midcontinent is the leading provider of cable television, 
telephone, high-speed Internet access, and cable advertising 
services in North Dakota, South Dakota, and Minnesota. Our 
communities vary in size from densities of five to 116 homes 
per mile of cable plant, and their population ranges from less 
than 125 in Dodge, North Dakota to more than 160,000 in Sioux 
Falls, South Dakota. Our mission is to ensure that the rural 
communities we serve are at the leading edge of technology.
    The FCC's decision a decade ago to regulate Internet 
service only lightly encouraged Midcontinent to invest nearly 
$400 million in our networks over the past 10 years. We 
recently doubled our customers' download speeds, and just this 
past November we unveiled our new gigabit initiative, which 
will make gigabit Internet speeds available that are five times 
faster than our current best, and about 35 times faster than 
the average high-speed Internet access speed in the country 
today. Once complete, gigabit Internet access will be available 
to the majority of our customers, including those in some of 
our most rural areas of the country.
    And we're not alone in our investment. Since 1996, ISPs 
Internet service providers have invested $1.3 trillion in their 
broadband networks. Last year, ISPs invested more in America 
than any other non-financial sector. Today, more than 85 
percent of U.S. homes have access to networks that can achieve 
100 megabit speeds or faster. The overall Internet economy in 
the U.S. supports 869,000 jobs. In 2014 alone, Midcontinent's 
customers' bandwidth usage increased by 77 percent, and 
bandwidth consumption is doubling for us every 15 months. 
Midcontinent has a tremendous business incentive to invest, but 
not if we are subjected to regulation that limits our ability 
to innovate.
    Midcontinent supports the draft legislation. It would 
establish basic principles of Internet fairness and set this 
country on a path to regulatory certainty and stability. It 
would ensure that broadband customers can enjoy unconstrained 
use of the service they pay for, that the FCC can protect 
consumers, that Internet-based businesses can invest without 
concern that an ISP can interfere with their access to 
customers, and that ISPs can develop their service freely. And 
it would accomplish all these goals without dragging the 
provision of Internet service back to the monopoly telephone 
era.
    Many of the draft's obligations reflect our existing 
business practices. Every Internet user should be able to 
access any lawful content service or application they choose. 
Purposely throttling customers would directly interfere with 
our business strategy of offering the fastest-possible 
broadband speeds. And no ISP has adopted a strategy of paid 
prioritization, even in the absence of rules.
    The draft legislation also wisely protects the need for 
network management. ISPs need to utilize reasonable network 
management practices to ensure customers are getting the 
maximum benefits of their broadband service, and to protect 
consumers against harmful cyber intrusion. The draft 
legislation's transparencies principles strike an appropriate 
balance between consumers' need for and the right to clear and 
easy-to-understand information about the broadband service, and 
the need to ensure that in the name of transparency, potential 
wrongdoers do not have a road map for the best means of 
thwarting safeguards that we put in place to protect the 
network.
    While we can support well-crafted regulations, we are 
adamantly opposed to the imposition of an outdated common 
carrier regulatory regime. Imposing Title II regulations would 
work against the government's policy goals of increasing 
broadband deployment and adoption. The regulatory burdens and 
costs associated with a Title II approach would have a 
significant and disproportionate impact on our ability to 
invest further in our broadband networks.
    Title II proponents often point to the FCC's forbearance 
authority which is intended to allow the FCC to alleviate some 
of Title II's regulatory burdens as a simple solution to our 
concerns. But in reality, those same Title II proponents are 
pressing the FCC not to forbear from vast swathes of Title II 
now that they think the reclassification decision might be 
going their way.
    While it seems clear that applying a Title II regulatory 
framework to broadband Internet access will only interfere with 
the dynamic Internet, the FCC is poised to take just that step. 
Truly there is a better way, and the proposed legislation is an 
important part of finding the right path forward. Therefore, I 
urge the Committee to move forward with a bipartisan draft so 
that Midcontinent and others can continue to ensure that all 
Americans, including those in rural America, receive the full 
potential of America's broadband networks.
    Thank you so much again for inviting me to be here today, 
and we look forward to working with you on these very important 
measures.
    [The prepared statement of Mr. Simmons follows:]

     Prepared Statement of W. Tom Simmons, Senior Vice President, 
                      Midcontinent Communications
    Chairman Thune, Ranking Member Nelson, and Members of the 
Committee, thank you for inviting me here today to share my thoughts on 
the ways Congress can update our Internet laws to ensure vigorous 
broadband investment and an open Internet for the future. I also 
appreciate the opportunity to address the proposed legislation for 
achieving these goals.
    My name is Tom Simmons and I am the Senior Vice President of Public 
Policy for Midcontinent Communications. Midcontinent is the leading 
provider of cable television services, as well as local and long 
distance telephone service, high-speed Internet access services, and 
cable advertising services in North Dakota, South Dakota, and 
Minnesota. Midcontinent's service area includes over 335 communities 
serving approximately 300,000 customers. The communities we represent 
vary in size from densities of 5 to 116 homes per mile of cable plant, 
and their population ranges from less than 125 in Dodge, North Dakota 
to our largest community, Sioux Falls, South Dakota, which has a 
population of more than 160,000.
    Innovation and foresight have shaped Midcontinent's course for more 
than 80 years. At Midcontinent, we have made it our mission to ensure 
that the rural communities we serve are at the leading edge of 
technology. Our goal throughout our footprint is always to continue to 
find ways not only to meet, but to exceed the communications needs of 
our customers.
A Positive Regulatory Environment Has Spurred Broadband Investment
    The Federal Communications Commission's (``FCC'') decision a decade 
ago to lightly regulate Internet service encouraged Midcontinent to 
invest nearly $400 million in our networks over the past 10 years and 
to make our network increasingly faster and more robust. This past 
summer, we doubled our customers' download speeds, raising the speed of 
the standard wideband 1.0 service tier from 30 Mbps to 60 Mbps and the 
fastest wideband 3.0 tier from 100 Mbps to 200 Mbps.
    In November 2014, Midcontinent unveiled our exciting new Gigabit 
Initiative. Our new investment will make gigabit Internet speeds 
available to approximately 600,000 homes and 55,000 businesses along a 
high-capacity fiber network that covers more than 7,600 miles in North 
Dakota, South Dakota and Minnesota. Our network will offer download 
speeds that are five times faster than our current best and 35 times 
faster than the average high-speed Internet access speed in America. 
And we are not limiting these speeds to a few neighborhoods in the 
largest cities. Once the initiative is complete in 2017, gigabit 
Internet access will be available to the majority of our customers, 
including those in some of the most rural areas of our country.
    Midcontinent's decision to make these investments has been driven 
by the knowledge that we will not be limited in our ability to use that 
investment to create and develop the most compelling broadband service 
offerings possible. Unconstrained by the type of regulations that 
preclude and hinder our innovation in the television space, we are 
incented to continue to invest and expand. And we are not alone in this 
approach. Since 1996, ISPs have invested $1.3 trillion in their 
broadband networks. Last year, ISPs invested more in America than any 
other nonfinancial sector. Today, more than 85 percent of U.S. homes 
have access to networks that can achieve 100 Mbps speeds or faster. The 
overall Internet economy in the U.S. supports 869,000 jobs.
Midcontinent Supports Open Internet Principles
    While the FCC's light regulatory touch has created an environment 
that enables investment and innovation by increasing the odds of a 
positive return on investment, our business decisions are also driven 
by consumer demand. Our decision to upgrade our network's capacity and 
download speeds was made in response to our customers' ever increasing 
demand for--and expectation of--fast and unfettered access to any 
lawful content, applications, and services. In 2014 alone, 
Midcontinent's customers' bandwidth usage increased by 77 percent, and 
we see bandwidth consumption doubling every 15 months. Midcontinent has 
a tremendous business incentive to ensure that we continue to have the 
enhanced bandwidth to deliver a superior user experience.
    An important part of a positive user experience is ensuring a free 
and open Internet. From a business perspective, it makes no sense for 
us to engage in any behavior that would alienate our current and future 
customers. We do not engage in anti-consumer practices such as 
throttling or blocking disfavored content or the use of devices because 
our customers would not tolerate it. Cable ISPs continued to abide by 
open Internet principles even after the FCC's net neutrality rules were 
overturned because many of them make good business sense. The fact is, 
while it is popular to view the current net neutrality debate as an 
``us versus them'', ``David versus Goliath'' battle with broadband ISPs 
as the villain of the piece, Midcontinent, and the cable broadband 
industry as a whole, agree with the widespread consensus that certain 
open Internet principles promote the virtuous cycle of innovation and 
investment that characterizes the Internet economy.
Midcontinent Supports The Draft Legislation
    The draft legislation would establish basic principles of Internet 
fairness and set this country on a path to regulatory certainty and 
stability that would incite the broadband deployment that invigorates 
our American economy. The draft's thoughtful approach ensures that 
broadband Internet access service will meet consumers' expectations for 
unconstrained use of the service they pay for, that the FCC has the 
ability to protect consumers from any adverse consequences of a bad 
actor, that Internet businesses can invest and grow without concern 
that an ISP can interfere with their access to potential customers, and 
that ISPs can create, grow and develop their service freely, subject to 
important restrictions on anticompetitive behavior. And it will 
accomplish all these goals without dragging the provision of Internet 
service back to the monopoly telephone era, resulting in years of 
litigation, uncertainty and the stifling of innovation and investment 
enthusiasm.
    As I mentioned, many of the draft's obligations reflect the 
business practices of most ISPs today. There is little debate, for 
example, that every Internet user should be able to access any lawful 
content, service, or application that they choose. ISPs like 
Midcontinent do not engage in blocking practices because we understand 
that our customers purchase our services because they want access to 
their favorite content, services, and applications, and they want to 
explore the many new offerings emerging every day. ISPs have nothing to 
gain and everything to lose by restricting customers' access to lawful 
Internet offerings.
    Similarly, broadband providers like Midcontinent constantly upgrade 
their networks to enhance capacity and offer faster speeds to 
anticipate and get in front of increased consumer demand. Purposely 
throttling customers would directly interfere with our business 
strategy of offering the fastest possible broadband speeds. And despite 
the apocalyptic warnings of a two-tier Internet, no ISP has adopted a 
strategy of paid prioritization, even in the absence of rules, as there 
is no real business case today that favors it.
    At the same time, we commend the draft legislation for its careful 
preservation of consumers' ability to choose service plans and features 
they want. No rule should preclude customers from being able to select 
the service plan or features they want to receive.
    The draft legislation also wisely protects the need for network 
management. Even the most vocal net neutrality advocates recognize that 
ISPs need to utilize reasonable network management practices to ensure 
customers are getting the maximum benefits of their broadband service. 
ISP networks are flooded every day with spam attacks, viruses, and 
times of network congestion. ISPs devote significant time and energy to 
protecting consumers and the networks against harmful cyber intrusions, 
and to ensuring that traffic flows as smoothly as possible.
    The draft legislation's transparency principles strike an 
appropriate balance between consumers' need for, and right to, clear 
and easy-to-understand information about their broadband service so 
that they can make informed choices, and ISPs' concern that the rules 
not require so much network information to be posted publicly that 
potential wrongdoers have a roadmap to the best means of thwarting 
safeguards put in place to protect the network.
    The cable industry supports each of these open Internet principles. 
Why wouldn't we? The same open Internet economy that has brought 
tremendous opportunities to consumers and given birth to industry 
giants like Google, Amazon, and Netflix has also created significant 
incentives for ISPs to expand deployment of high-speed broadband 
infrastructure to all corners of the country.
    While it often seems that those of us engaged in the net neutrality 
debate have diametrically opposing views, the truth is that we are all 
working towards the same goal--a sensible public policy that preserves 
and facilitates the ``virtuous circle'' of innovation, demand for 
Internet services, and deployment of broadband infrastructure. The only 
point of debate is how to get there. We commend the Committee on its 
carefully balanced approach.
Title II Would Be the Wrong Approach
    Despite the fact that ISPs have no real incentives to violate the 
principles of the open Internet, making rules arguably unnecessary, we 
at Midcontinent understand the concerns that have led us to where we 
are today, and so we are not necessarily opposed to well-crafted 
regulations that would effectively support the twin goals of preserving 
the open Internet and encouraging continued innovation and investment. 
But we are adamantly opposed to the imposition of an outdated common 
carrier regulatory regime that is not equipped to govern the modern 
communications market.
    Title II of the Communications Act was designed for the 1930s 
telephone monopoly era, and carries with it thousands of common carrier 
regulations that could stifle our industry's ability to continue 
deploying the next generation of high-speed networks. Taking this 
radical and destructive step to fix what isn't even broken simply makes 
no sense.
    As the representative of a relatively small broadband ISP that 
serves a predominantly rural area, I strongly believe that imposing 
Title II regulations would work against the government's policy goals 
of increasing broadband deployment and adoption. The regulatory burdens 
and costs associated with a Title II approach would have a significant 
and disproportionate impact on Midcontinent's--and other small and 
medium-sized providers'--ability to invest further in our broadband 
networks.
    The idea that Title II reclassification would harm providers' 
ability to obtain the capital needed to invest is not merely 
speculation. Roughly 90 percent of the $73 billion invested in 
telecommunications infrastructure in 2013 was spent on those industry 
segments that are exempt from Title II regulation. There can be no 
better example of the market's disdain for Title II services than 
Google's decision to forgo offering voice services over their newly 
built fiber infrastructure due to concerns about common carrier 
regulation.
    Title II proponents often argue that common carrier regulations 
offer clear and simple answers to difficult policy questions. This is 
demonstrably false. Attempting to impose an outdated regulatory 
framework on the modern communications system has led to rampant 
uncertainty and confusion. The FCC has struggled in a variety of 
contexts (including special access regulation, universal service 
reform, network unbundling) to develop clear and effective policies 
that adapt outdated regulations to today's complex marketplace. Many 
point to the FCC's forbearance authority, which is intended to allow 
the FCC to alleviate some of Title II's regulatory burdens, as the 
simple solution to any regulatory dilemma. In reality, many of those 
same Title II proponents who once claimed that forbearance would be 
easy are now pressing the FCC not to forbear from vast swaths of Title 
II now that they think the reclassification decision is going their 
way.
    Given these realities, it seems clear that applying the Title II 
regulatory framework to broadband Internet access service will serve 
only to interfere with the dynamic Internet marketplace that has had a 
profound impact to the way we live and work. Yet the FCC is poised to 
take just this step. Truly there is a better solution to be found, and 
the proposed legislation is an important part of finding the right path 
forward. I urge the Committee to move forward with a bipartisan draft 
so that Midcontinent and others can continue to ensure that all 
Americans--including those in rural America--receive the full potential 
of America's broadband networks.
    Thank you again for inviting me here today, and we look forward to 
working with all of you on these important issues.

    The Chairman. Thank you, Mr. Simmons.
    Dr. Turner-Lee?

            STATEMENT OF NICOL E. TURNER-LEE, Ph.D.,

               VICE PRESIDENT AND CHIEF RESEARCH

            AND POLICY OFFICER, MULTICULTURAL MEDIA,

              TELECOM AND INTERNET COUNCIL (MMTC)

    Dr. Turner-Lee. I am a little short, so I have to pull up. 
Chairman Thune, Ranking Member Nelson, and distinguished 
members of the Committee, I am honored to appear before the 
Committee to address this Nation's efforts to preserve the open 
Internet, particularly as it concerns communities of color and 
other more vulnerable populations.
    And I have to say to keep my job as Vice President and 
Chief Research and Policy Officer that we changed our name 
today, and so for the record, we just became the Multicultural 
Media, Telecom and Internet Council after 28 years. And for 
those of you that are less familiar with MMTC, what we 
primarily do is work to preserve and expand opportunity, equal 
access, and ownership among people of color, particularly 
minority and women business enterprises, and we proudly partner 
with groups that consist of the National Urban League, LULAC, 
AAJC, Rainbow Push Coalition, among others, to actually advance 
that mission.
    And our groups have been intricately involved with this 
issue for quite some time. We have been actively engaged in the 
debate as historically disadvantaged communities embark on a 
journey toward first class digital citizenship and all of its 
opportunities. So today we applaud the draft legislation 
addressing the President's values as a starting point for 
further discussion.
    And I would like to bring to your attention three issues, 
and my statement is on record in much more detail, but my time 
is best spent on these points. I would first like to highlight 
the unique benefits that the open Internet brings to people of 
color and vulnerable populations, and encourage the Committee's 
consideration of legislation that promotes an open Internet. 
And finally in my testimony, I would like to offer two friendly 
recommendations to the legislation that will promote the open 
Internet while at the same ensuring consumer protections.
    Let me start by saying that broadband access adoption and 
digital literacy are civil rights prerequisites. Broadband 
allows all Americans to gain new skills, secure good jobs, 
obtain a quality education, and receive greater access to 
healthcare. Today, however, too many Americans still do not 
benefit from all that broadband enables. The rate of broadband 
adoption among vulnerable populations is disproportionately 
low, contributing to a persistent digital divide.
    Despite growth in minority home broadband adoption, rates 
among African-Americans and Hispanics are still lower than 
whites. African-Americans over the age of 65, for example, 
still exhibit especially low rates. Forty-five percent of 
African-American seniors are Internet users, and only 30 
percent have broadband at home compared to 63 percent and 51, 
respectively, for white seniors. Non-users, overall, cite 
perceived lack of relevance, affordability, and the lack of a 
device in that order as their prime reasons for not being 
online. So closing the digital divide should and must be an 
important goal for policymakers, and steering the right course 
of action to promote and protect an open Internet is one way 
for us to get there.
    Now, Congress has had a proud history of recognizing 
structural injustices in our society and acting to correct 
them. In the 1860s, Congress framed and passed the 13th, 14th, 
and 15th Amendments which ended slavery, extended equal policy, 
and enfranchised millions of Americans for the first time. In 
the 1960s, Congress enacted the Civil Rights Act of 1964, the 
Voting Rights Act of 1965, and the Fair Housing Act of 1968, 
all due in great measure to a great man whose birthday we just 
celebrated.
    And today, Congress has the opportunity to show that 
leadership yet again. By enacting a legislative solution that 
preserves the open Internet we all have to come to enjoy, 
Congress can extend the promise of justice, equality, and 
democracy for all, and avoid a legal quagmire that will lead 
the unending uncertainty for our economy and citizens.
    An open Internet stimulates demand for broadband, which in 
turn stimulates investment in infrastructure and innovation, 
all too important to multicultural communities and vulnerable 
populations. It is our belief at MMTC increased investment in 
broadband also improves access adoption, and the types of 
innovations that we like to drive in our communities, including 
tele-health, distance learning, and open government.
    For the past 20 years, the FCC chairs from both political 
parties' administrations that have charted a successful 
regulatory paradigm for the Internet and communities of color 
have benefited from that. Although overall broadband adoption 
by people of color has lagged, for example, certain categories 
have not. Nearly 75 percent of African-Americans and 70 percent 
of Hispanic cell phone owners use their devices to access the 
Internet, more than the overall population. And people of color 
have embraced broadband as a tool of empowerment under the 
current rules as evidenced in places like Ferguson, Missouri, 
New York City, and Columbus, Ohio.
    These stats should tell us that we need to continue this 
progress, but unfortunately recent efforts by the FCC to enact 
meaningful open Internet rules have failed. Last year the D.C. 
Circuit Court struck down key portions of the Commission's Open 
Internet Order. Now, notwithstanding the current regulatory 
framework that has allowed broadband to flourish and take hold, 
the FCC is considering the imposition of Title II regulation, 
which we at MMTC believe is ill suited to the current 
realities. Imposing such a heavy-handed framework on the 
Internet would only serve to stifle broad band's deployment, 
discourage investment, and harm innovation. It would also place 
uncertainty for consumers to regressive taxation on universal 
service and potential ambiguity on consumer enforcements.
    Some have argued that the FCC could reduce the adverse 
effects of Title II regulation through judicious applications 
of forbearance authority. We think that suggestion misses the 
point. Even if the Commission could exercise its forbearance 
authority in a productive manner, it would take years to sort 
out an appropriately calibrated set of rules. And meanwhile, 
this regulatory uncertainty harms communities of colors for the 
reasons I have already mentioned.
    The bottom line is that even if the Commission were to 
forbear, delay would stifle the progress we have seen in 
connected communities of color and put us behind on the 
discussion of areas that matter the most of us, universal 
service, ensuring public safety, as well as digital redlining.
    I would like to just close really quickly with two 
additional amendments that we think could actually enhance 
this. First, as Congress considers the bill, Congress should 
address the harmful practice of digital redlining. Digital 
redlining is the refusal to build and service lower income 
communities on the same terms as well as wealthier communities. 
It imposes, in essence, digital segregation.
    Sadly, as the experience of this country shows, segregation 
harms and degrades all, and we cannot bring that into the 
digital age. Congress should empower the FCC to prohibit 
digital redlining, and, therefore, ensure equal access for all, 
and that could be considered under the FCC's current 706 
authority.
    Second, we think to enhance the consumer protections in the 
bill, perhaps there is a way to suggest something that we 
actually put into record, which is the creation of an 
accessible, affordable, and expedited procedure for the 
reporting and resolution of complaints. Modeled after the 
probable cause paradigm in Title 7 of the Civil Rights of 1964, 
we feel that the precise details of that structure could be 
applied to the communications ecosystem, and, therefore, allow 
people to get their complaints heard without feeling like they 
have to have a lawyer.
    So in closing, the time is now to get past the morass of a 
debate that has been lingering for more than a decade. And with 
Congress's discussion and guidance on the issue, I think we can 
make it happen. So we offer those, and I welcome any questions, 
and we're here to help in the crafting of this legislation.
    [The prepared statement of Dr. Turner-Lee follows:]

 Prepared Statement of Nicol E. Turner-Lee, Ph.D., Vice President and 
  Chief Research & Policy Officer, Multicultural, Media, Telecom and 
                        Internet Council (MMTC)
Introduction
    Chairman Thune, Ranking Member Nelson, distinguished Members of the 
Committee, esteemed colleagues on the panel, I am pleased and honored 
to appear before the Committee today to address this Nation's efforts 
to preserve the open Internet--particularly as it concerns our Nation's 
communities of color and other vulnerable populations including the 
economically disadvantaged, seniors and people with disabilities. I 
currently serve as Vice President and Chief Research & Policy Officer 
of the Multicultural Media, Telecom and Internet Council, previously 
known as the Minority Media and Telecommunications Council (``MMTC''). 
It is my privilege to help lead this national not-for-profit 
organization that for 28 years has been dedicated to promoting and 
preserving equal opportunity and civil rights in the mass media, 
telecommunications, and broadband industries. The MMTC proudly 
represents historic civil rights and advocacy organizations such as the 
NAACP, the National Urban League, LULAC--and hundreds of others. In a 
previous role, I served as Vice President and first Director of the 
Media and Technology Institute of the Joint Center for Political and 
Economic Studies where we developed the first comprehensive study on 
minority broadband adoption.\1\
---------------------------------------------------------------------------
    \1\ See Nicol Turner-Lee, Jon P. Gant and Joseph Miller, National 
Minority Broadband Adoption: Comparative Trends in Adoption, Acceptance 
and Use, Joint Center for Political and Economic Studies (March 2010), 
available at http://jointcenter.org/sites/default/files/MTI_
BROADBAND_REPORT_WEB.pdf (last visited January 19, 2015).
---------------------------------------------------------------------------
    At MMTC, we believe that every consumer, entrepreneur, and business 
has the right to an accessible and open Internet. An open Internet is 
essential to enabling all Americans--including and especially Americans 
of color and other vulnerable groups--to experience first class digital 
citizenship in the 21st century.
    Digital citizenship is the new passport that guarantees full access 
to the opportunities powered by broadband and the Internet, especially 
those applications and broadband-enabled devices that help promote 
physical wellness, civic engagement, wealth creation, economic 
development and educational readiness. The cost of digital exclusion-
whether as consumers or producers-is too high to ignore for people of 
color and other vulnerable populations. With new technology 
transforming how we live, learn and earn in our society, it is 
imperative that no one is left behind: especially your constituents 
striving to break through the daily challenges of social and economic 
isolation. Policies that deter efforts to foster broadband adoption 
will have a profound effect on people of color, particularly those who 
have not adopted Internet access and as a result are unable to 
participate fully in society through job search, civic discourse and 
access to government services. It is essential that we assess these 
``opportunity costs'' for consumers as this discussion is elevated 
toward a legislative solution.
    Consistent with these views, I would like to bring three issues to 
the Committee's attention today. First, I would like to highlight the 
unique benefits that an open Internet brings to people of color and 
vulnerable populations, and explain why MMTC--along with a diverse 
range of other nonprofit, consumer, and labor organizations, as well as 
businesses and scholars--came out in support of open Internet rules 
based on the Federal Communications Commission's (FCC) Section 706 
regulatory authority, rather than the Commission's Title II authority 
that applies to legacy utilities.\2\ Second, I would like to encourage 
the Committee to consider a legislative proposal to promote an open 
Internet, provided it preserves the Commission's ability to protect 
consumers. Third, I would like to offer two friendly recommendations 
that are designed to ensure: (1) that all consumers are included in the 
promise of first class citizenship in the digital age; and (2) that 
policymakers refocus on other critical broadband priorities that can 
render positive net impacts for historically disenfranchised 
communities, such as such as prohibiting redlining, promoting universal 
service, and ensuring public safety.
---------------------------------------------------------------------------
    \2\ See generally Comments of the National Minority Organizations, 
FCC GN Docket No. 14-28 (July 18, 2014). See also Comments of the 
Chicagoland Black Chamber of Commerce (July 17, 2014); Comments of the 
U.S. National Black Chamber of Commerce, National Gay & Lesbian Chamber 
of Commerce, U.S. Hispanic Chamber of Commerce, and U.S. Pan Asian 
American Chamber of Commerce (July 18, 2014); Comments of the Black 
Women's Roundtable (July 18, 2014); Florida State Hispanic Chamber of 
Commerce (July 14, 2014); Asian Americans Advancing Justice (July 15, 
2014); Comments of the Communications Workers of America and National 
Association for the Advancement of Colored People (July 15, 2014); 
Comments of League of United Latin American Citizens, National Action 
Network, National Association for the Advancement of Colored People, 
the National Coalition on Black Civic Participation, and the National 
Urban League (July 18, 2014).
---------------------------------------------------------------------------
I. An Open Internet Benefits Communities of Color
    As the Nation recognizes the legacy of the Reverend Dr. Martin 
Luther King, Jr. this week, we can all acknowledge that the journey 
towards civil and human rights is incomplete. Recent events in 
Ferguson, Missouri, Columbus, Ohio, and New York City serve as painful 
reminders. Today, broadband access, adoption and digital literacy join 
the suite of civil rights prerequisites to first class citizenship in 
the digital age. Broadband is essential for living a life of equal 
opportunity in the 21st Century. And broadband access allows all 
Americans--African American, white, Latino, Asian, women, men, abled, 
and disabled--to gain new skills, secure good jobs, obtain a quality 
education, and receive greater access to healthcare through state of 
the art tele-health technologies. Broadband has also become the new 
broadcast, streaming in ``real time'' what transpires both nationally 
and internationally, and in recent history mobilizing people around 
social change.
    Too many Americans, however, still do not benefit from all that 
broadband enables. They do not have general Internet access or have not 
adopted broadband technology at home.\3\ This problem is particularly 
acute in many communities of color and among the poor, seniors and less 
educated citizens, contributing to a persistent ``digital divide.'' 
Despite increases in minority home broadband adoption over the past few 
years, African Americans and Hispanics are still not getting broadband 
connections at home in sufficient numbers. This is especially the case 
among two demographic subgroups within minority populations: elderly 
minorities and those with limited formal education.\4\ Recent data from 
the Pew Research Center found that older African Americans, as well as 
those that had not attended college, are significantly less likely to 
go online or have residential broadband access compared to whites of 
similar demographic profiles.\5\ In the case of African Americans, 
individuals age 65 and older have especially low rates of adoption when 
compared to whites. Forty-five percent of African American seniors are 
Internet users and 30 percent have broadband at home as compared to 63 
percent and 51 percent respectively for whites.\6\ While younger, 
college educated, and higher-income African Americans are just as 
likely as their white counterparts to use the Internet and to have home 
broadband access, these statistics are less promising as socioeconomic 
status and educational attainment levels decline.
---------------------------------------------------------------------------
    \3\ See FCC, Connecting America: The National Broadband Plan 167-68 
(2010) (``National Broadband Plan''); David Honig, Esq. & Nicol Turner-
Lee, Ph.D., MMTC, Refocusing Broadband Policy: The New Opportunity 
Agenda for People of Color 7-8 (Nov. 21, 2013) (``MMTC White Paper'').
    \4\ Aaron Smith, Pew Research Center, African Americans and 
Technology Use, A Demographic Portrait, 1-17 (Jan. 6, 2014), available 
at http://www.pewInternet.org/files/2014/01/African-Americans-and-
Technology-Use.pdf (last visited January 19, 2015).
    \5\ Id.
    \6\ Id.
---------------------------------------------------------------------------
    Nearly 70 percent of Hispanic Americans access the Internet through 
cell phone devices.\7\ Less than 60 percent of Hispanics, however, have 
a home broadband connection,\8\ which may impose some limitations when 
applying for jobs or completing certain homework assignments.
---------------------------------------------------------------------------
    \7\ See Maeve Duggan & Aaron Smith, Pew Research Center, Cell 
Internet Use (Sept. 2013) available at http://www.pewInternet.org/
files/old-media//Files/Reports/2013/PIP_CellInter
netUse2013.pdf (last visited January 19, 2015).
    \8\ See Pew Research Internet Project, Pew Research Center, 
Broadband Technology Fact Sheet (2015), available at http://
www.pewInternet.org/fact-sheets/broadband-technology-fact-sheet/ (last 
visited January 19, 2015).
---------------------------------------------------------------------------
    Non-Internet users cite a perceived lack of relevance, 
affordability, and the lack of an Internet-capable device as their 
prime reasons for not being online.\9\ And, as a recent study conducted 
by the National Telecommunications and Information Administration, 
which included analysis from two FCC economists, found, approximately 
two-thirds of non-subscribing households say they will not subscribe to 
broadband at any price.\10\ Closing the digital divide, therefore, must 
be a vital goal for policy makers: Our challenge is to look toward 
promoting adoption. Historically disadvantaged groups often have the 
most to gain from accessing broadband technology.
---------------------------------------------------------------------------
    \9\ Id.
    \10\ See Carare, Octavian and McGovern, Chris and Noriega, Raquel 
and Schwarz, Jay A., The Willingness to Pay for Broadband of Non-
Adopters in the U.S.: Estimates from a Multi-State Survey (November 18, 
2014). Information Economics and Policy, Forthcoming. Available at 
SSRN: http://ssrn.com/abstract=2375867 or http://dx.doi.org/10.2139/
ssrn.2375867 (Last accessed January 20, 2015).
---------------------------------------------------------------------------
    The current debate concerning whether and how the Commission might 
regulate the Internet has largely over-shadowed the adoption crisis. 
Last year, MMTC and a coalition of 45 highly respected, national civil 
rights, social service and professional organizations representing 
millions of constituents, urged the Commission to focus its broadband 
policies on promoting engagement, adoption and informed broadband use 
by communities of color, and to exercise its authority to promote 
broadband to protect all consumers' rights to an open Internet. These 
groups, including the National Coalition on Black Civic Participation, 
Rainbow PUSH Coalition, MANA--A Latina Organization, National Hispanic 
Caucus of State Legislators and National Organization of Black County 
Officials, asked the Commission to establish an accessible, affordable, 
and expedited procedure for the resolution of complaints. Modeled after 
the probable cause paradigm in Title VII of the 1964 Civil Rights Act, 
which ensures equal employment opportunity, our proposal sought to 
complement the Commission's Ombudsperson proposal and the Commission's 
efforts to expand transparency. Other national civil rights 
organizations--including the National Urban League, the National Action 
Network, the NAACP, and the League of United Latin American Citizens--
also urged the Commission not to use its Title II authority.
    We all agree with President Obama that this Nation needs to advance 
and enforce those values undergirding Internet openness. In our joint 
filing, our coalition urged the Commission to take a straightforward 
approach that includes \11\:
---------------------------------------------------------------------------
    \11\ See Comments of the National Minority Organizations 11-12, FCC 
GN Docket No. 14-28 (July 18, 2014).

   The immediate reinstatement of no-blocking rules to protect 
---------------------------------------------------------------------------
        consumers.

   Creation of a new rule barring commercially unreasonable 
        actions, while affording participants in the broadband economy, 
        particularly minority entrepreneurs, the opportunity to enter 
        into new types of reasonable commercial arrangements,\12\ and 
        through monitoring by FCC's Office of Communications Business 
        Opportunities, ensuring that minority entrepreneurs are never 
        overlooked by carriers seeking to develop new commercial 
        arrangements.
---------------------------------------------------------------------------
    \12\ See In the Matter of Protecting & Promoting the Open Internet, 
29 F.C.C. Rcd. 5561,  116 (2014).

   The establishment of a rebuttable presumption against paid 
        prioritization that protects against ``fast lanes'' and any 
        corresponding degradation of other content, while ensuring that 
        such presumption could be overcome by business models that 
        sufficiently protect consumers and have the potential to 
        benefit consumer welfare (for example, telemedicine 
        applications).\13\
---------------------------------------------------------------------------
    \13\ As indicated in our Comments, any prioritized service that 
overcomes the presumption would remain subject to enforcement, and 
consumers would be able to obtain rapid relief by working with the 
Ombudsperson and through the complaint process modeled after the 
probable cause paradigm found in Title VII of the 1964 Civil Rights 
Act.

   The need for greater transparency and enforceable disclosure 
---------------------------------------------------------------------------
        requirements to maintain online consumer protections.

   The reigning in of bad actors, especially those engaged in 
        blocking, as the D.C. Circuit confirmed the Commission has the 
        authority to do.\14\
---------------------------------------------------------------------------
    \14\ See Verizon v. FCC, 740 F.3d 623, 655 (D.C. Cir. 2014).

    Like our President, we believe that an open Internet stimulates 
demand for broadband, which in turn stimulates investment in broadband 
infrastructure.\15\ Increased investment in broadband infrastructure 
improves access in all communities.\16\ This is especially true in poor 
and low-income communities that tend to be affected most by increases 
or decreases in investment and concomitant price changes.\17\ This is 
basic economics.\18\ That is why our Coalition opposes Title II 
reclassification of broadband as a telecommunications service.
---------------------------------------------------------------------------
    \15\ See, e.g., Daniel A. Lyons, Internet Policy's Next Frontier: 
Usage-Based Broadband Pricing, 66 Fed. Comm. L.J. 1, 31 (2013) 
(explaining that an economically rational network operator faced with 
regular congestion (demand) will ``invest capital to expand the network 
and provide more bandwidth to all users'').
    \16\ See National Broadband Plan, supra note 3, at 129.
    \17\ See, e.g., Kevin A. Hassett & Robert J. Shapiro, Georgetown 
Center for Business and Public Policy, Towards Universal Broadband: 
Flexible Broadband Pricing and the Digital Divide 12 (Aug. 2009) 
(``Towards Universal Broadband''), available at http://www.gcbpp.org/
files/Academic_Papers/AP_Hassett_Shapiro_Towards.pdf (last visited 
January 19, 2015).
    \18\ See, e.g., J. Gregory Sidak, A Consumer-Welfare Approach to 
Network Neutrality Regulation of the Internet, 2 J. Comp. L. & Econ. 
349, 357 (2006) (``Private investors will fund the construction of a 
broadband network only if they have a reasonable expectation that the 
company making that investment will recover the cost of its investment, 
including a competitive (risk-adjusted) return on capital.'')
---------------------------------------------------------------------------
    We believe that preserving the open Internet is one of the 
fundamental civil rights issues of our time. And that is why this is an 
issue that Congress should address.
II. Congress is Well Positioned to Preserve the Open Internet
    Congress has a proud history of recognizing structural injustices 
in our society and acting to correct them. In the 1860s, Congress 
framed and passed the Thirteenth, Fourteenth, and Fifteenth Amendments, 
which ended slavery, extended equal protection, and enfranchised 
millions of Americans for the first time. In the 1960s, Congress 
enacted the Civil Rights Act of 1964, the Voting Rights Act of 1965 and 
the Fair Housing Act of 1968--all due in great measure, I hasten to 
add, to the work of a man whose birthday we celebrated this past 
weekend.
    Today, Congress has the opportunity to show leadership yet again. 
By enacting a legislative solution that preserves the open Internet, 
Congress can extend the promise of justice, equality, and democracy not 
only to all citizens, but especially to communities of color and more 
vulnerable groups who are most in need of the opportunity provided by 
access to high-speed broadband.
    For the past 20 years, FCC Chairs from both political parties have 
charted a successful regulatory paradigm for the Internet.\19\ And 
although overall adoption of broadband by people of color has 
lagged,\20\ innovation among certain broadband technologies has not. 
For example, nearly 75 percent of African American and 68 percent of 
Hispanic cell phone owners use their devices to access the 
Internet,\21\ and these numbers are increasing.\22\ African Americans 
and Latinos use smartphones for non-voice applications, such as web 
surfing and accessing multimedia content, at a higher rate than the 
population in general.\23\ Asian Americans have adopted smartphones at 
a higher rate than the total U.S. population.\24\ And people of color 
have largely embraced social media, such as Twitter and Instagram.\25\ 
This along with the increasing availability of Wi-Fi services through 
fixed broadband providers has enabled mobility, which is critically 
important to communities of color. These are encouraging signs as 
wireless becomes the new broadcast for American citizens and 
demonstrates that the broadband market is both dynamic and competitive 
in wireless and wireline. Yet, policymakers must act to ensure that 
this progress continues.
---------------------------------------------------------------------------
    \19\ See, e.g., Michael Powell, Chairman, FCC, Preserving Internet 
Freedom: Guiding Principles for the Industry, at 2 (Feb, 8, 2004) 
available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-
243556A1.pdf (articulating four principles); Julius Genachowski, 
Chairman, FCC, Statement re Preserving the Open Internet (2010), 
available at https://apps.fcc.gov/edocs_public/attachmatch/FCC-10-
201A2.pdf (last visited January 19, 2015) (``The rules . . . we adopt 
today are rooted in ideas first articulated by Republican Chairmen . . 
. and endorsed in a unanimous FCC policy statement in 2005.'').
    \20\ See MMTC White Paper, supra note 3, at 7.
    \21\ Maeve Duggan and Aaron Smith, Pew Research Center's Internet & 
American Life Project, Cell Internet Use 2013 5 (Sept. 16, 2013), 
available at http://pewInternet.org/Reports/2013/Cell-Internet.aspx 
(last visited January 19, 2015).
    \22\ Id. at 7.
    \23\ See Kathryn Zickuhr & Aaron Smith, Pew Research Center's 
Internet & American Life Project, Home Broadband 2013 (Aug. 26, 2013) 
available at http://pewInternet.org/Reports/2013/Broadband.aspx. See 
also Nielsen, More of What We Want: The Cross Platform Report of Q1 
2014 (June 30, 2014) (``Nielsen''), available at http://
www.nielsen.com/us/en/insights/reports/2014/more-of-what-we-want.html 
(last visited January 17, 2015). (reporting that African Americans and 
Hispanics are more likely than other ethnic groups to watch video on 
demand).
    \24\ Nielsen, Significant, Sophisticated, and Savvy: The Asian 
American Consumer 19 (2013), available at http://www.aaja.org/wp-
content/uploads/2013/12/Nielsen-Asian-American-Consumer-Report-2013.pdf 
(last visited January 19, 2015).
    \25\ See Yoree Koh, Twitter Users' Diversity Becomes an Ad Selling 
Point, The Wall Street Journal (Jan. 20, 2014), available at http://
online.wsj.com/news/articles/SB100014240527023044
19104579323442346646168?mg=reno64-wsj (last visited July 14, 2014); 
Nielsen, supra note 23, at 11.
---------------------------------------------------------------------------
    Although the Internet has remained open, recent efforts by the FCC 
to enact prospective open Internet rules have not succeeded. Last year, 
the D.C. Circuit struck down significant portions of the Commission's 
Open Internet Order, while offering a roadmap to potentially 
sustainable rules.\26\ Now the agency is considering the imposition of 
Title II regulations on the Internet notwithstanding the current 
regulatory framework that has allowed broadband to flourish. But Title 
II was designed for a telephone era that assumed monopoly control of 
the communications infrastructure and regulated accordingly.\27\ Its 
tools include common carriage, rate regulation, and the imposition of 
increased access charges and taxes.\28\
---------------------------------------------------------------------------
    \26\ See Verizon v. FCC, 740 F.3d 623 (D.C. Cir. 2014).
    \27\ See Robert Litan, Brookings Inst., Regulating Internet Access 
as a Public Utility 2 (June 2, 2014) available at http://
www.brookings.edu//media/research/files/papers/2014/06/
regulating_Internet_access_public_utility_litan/
regulating_Internet_access_public_utility_
litan.pdf (last visited January 19, 2015).
    \28\ See id. at 1.
---------------------------------------------------------------------------
    Monopoly control of the broadband marketplace is not what we have 
today.\29\ Because Title II is ill suited to current realities, 
imposing its heavy-handed framework on the broadband marketplace would 
only serve to discourage investment and stifle infrastructure 
deployment.\30\ The effects of this investment dis-incentivizing 
approach could disproportionately impact communities where lower 
adoption makes the economics of deployment more challenging. It also 
threatens those innovations inspired by broadband and the Internet to 
address and solve problems that hold our communities hostage, such as 
chronic disease, the absence of robust educational resources, and ``in 
line'' versus ``online'' government services. In short, just as the 
costs of digital exclusion are high, so are the risks associated with 
Title II.
---------------------------------------------------------------------------
    \29\ See id. at 2 (``[Title II] never was intended . . . to apply 
to services that were not characterized by monopoly, such as Internet 
access.'').
    \30\ See Comments of the Communications Workers of America and 
National Association for the Advancement of Colored People, FCC GN 
Docket No. 14-28 (July 15, 2014).
---------------------------------------------------------------------------
    Some have argued that the FCC could reduce the adverse effects of 
Title II regulation through judicious application of its forbearance 
authority.\31\ Although this suggestion is well intentioned, it misses 
the point. Even if the Commission could exercise its forbearance 
authority in a productive manner, it would take years to sort out an 
appropriately calibrated set of rules, whether due to lengthy 
rulemakings or litigation. Meanwhile, this regulatory uncertainty would 
send capital to the sidelines. The economic literature suggests that 
these regulatory uncertainty effects would disproportionately harm 
communities of color.\32\ The bottom line is that even if the 
Commission were to exercise its forbearance authority, the delay 
inherent in the process would likely stifle the progress we have seen 
in connecting communities of color. Our communities deserve better than 
this.
---------------------------------------------------------------------------
    \31\ See, e.g., Statement by the President on Internet Neutrality, 
Daily Comp. Pres. Doc. No. 00841, 2 (Nov. 10, 2014).
    \32\ See, e.g., Hassett & Shapiro, supra note 17, at 4-5, 12 
(linking increased private investment with increased minority access); 
J. Gregory Sidak, A Consumer-Welfare Approach to Network Neutrality 
Regulation of the Internet, 2 J. Comp. L. & Econ. 349, 466-67 (2006) 
(explaining that marginal broadband users--who tend to be minorities--
are most affected by price increases).
---------------------------------------------------------------------------
    Congress should act to preserve the open Internet, and with it the 
promise of first class digital citizenship and equal opportunity for 
all. Congress has the ability to amend the Communications Act to 
provide strong, bright-line open Internet protections. That is why MMTC 
and four dozen national minority organizations have urged the 
Commission to preserve the open Internet without implementing Title II 
regulations. We encourage Congress to follow the same effective course.
III. MMTC'S Recommendations
    As Congress considers how best to achieve these goals, we ask that 
they keep all options on the table. The legislative proposal should 
transition to a legislative debate for how to get past this morass so 
we can address other issues causing strain in the telecommunications 
ecosystem. Along those lines, we believe it is imperative that Congress 
narrowly target its effort in resolving the issue of the open Internet, 
and not attempt to diminish the FCC's authority to address other 
important consumer protection issues such as prohibiting redlining, 
promoting universal service, and ensuring public safety.
    To this point, I would like to offer two recommendations that I 
believe are consistent with the spirit of the ``eleven principles for 
bipartisan rules in the Internet Age'' that the Committee has laid 
out.\33\
---------------------------------------------------------------------------
    \33\ See Republican Press Office, Press Release, Congressional 
Leaders Unveil Draft Legislation Ensuring Consumer Protections and 
Innovative Internet (Jan. 16, 2015), available at http://1.usa.gov/
1wgzCia (last visited January 19, 2015).
---------------------------------------------------------------------------
    First, Congress should address, or at a minimum reinforce the FCC's 
ability to address, the practice of ``digital redlining.'' ``Digital 
redlining'' is the refusal to build and serve lower-income communities 
on the same terms as wealthier communities.\34\ It imposes, in essence, 
digital segregation. Sadly, as the experience of our country shows, 
both de jure and de facto segregation harms and degrades all of us--
especially the most vulnerable among us. This is no less true in the 
digital age. Congress has recognized this in the past, which is why it 
has directed the Commission to collect demographic information 
concerning unserved areas when it measures deployment of advanced 
telecommunications capability.\35\ Speaking in Cedar Rapids last week, 
President Obama observed that high-speed broadband is ``not a luxury, 
it's a necessity.'' \36\ Congress should build on its past work and the 
President's observation by empowering the FCC to prohibit digital 
redlining and thereby ensure equal access for all.
---------------------------------------------------------------------------
    \34\ Broadband & Social Justice, Press Release, MMTC Urges 
Government to Address Digital Redlining; Ensure Equitable Access for 
All (Jan. 15, 2015), http://broadbandandsocialjustice.org
/2015/01/mmtc-urges-government-to-address-digital-redlining-ensure-
equitable-access-for-all/ (last visited Jan. 17, 2015).
    \35\ See Broadband Data Services Improvement Act, Pub. L. No. 110-
385, Sec. 103, 122 Stat. 4095, 4096-97 (2008) (codified at 47 U.S.C. 
Sec. 1302(c)).
    \36\ Remarks by the President on Promoting Community Broadband 
(Jan. 14, 2015), available at http://www.whitehouse.gov/the-press-
office/2015/01/14/remarks-president-promoting-community-broadband (last 
visited January 19, 2015).
---------------------------------------------------------------------------
    Second, Congress should ensure that its open Internet rules will be 
enforced. This requires the creation of an accessible, affordable, and 
expedited procedure for the reporting and resolution of complaints. As 
mentioned, one approach would be to use a consumer-friendly complaint 
process modeled on the probable cause paradigm in Title VII of the 
Civil Rights Act of 1964.\37\ Congress designed Title VII to offer 
rapid and affordable remedies for employment discrimination faced by 
women and people of color.\38\ Under Title VII, a complainant receives 
an expedited ruling from the EEOC, and does not need to hire a lawyer 
or write a complicated filing. The same ought to be true in the context 
of broadband. Instead of the formal and often byzantine process 
envisioned by Section 208 of the Communications Act,\39\ consumers 
ought to have an effective, straightforward, expeditious way to provide 
the Commission with enough information to determine whether there is a 
prima facie case of specific or systemic harm. If the Commission finds 
probable cause to believe that its rules have been violated, the agency 
could immediately implement a mediation process or take enforcement 
action. Whatever the precise details of this mechanism, the core 
principle remains the same: consumers, particularly individuals from 
vulnerable populations, deserve an accessible, affordable, and 
expedited procedure for ensuring that their government protects them 
from harm.
---------------------------------------------------------------------------
    \37\ See Civil Rights Act of 1964, Pub. L. No 88-352, 78 Stat. 241 
(1964) (codified as amended at 42 U.S.C. Sec. Sec. 2000e et. seq.)
    \38\ See 42 U.S.C. Sec. 2000e-2 (prohibiting employment 
discrimination on the basis of ``race, color, religion, sex, or 
national origin'').
    \39\ See 47 U.S.C. Sec. 208. Section 208 directs complainants to 
submit a petition to the Commission, the Commission then forwards the 
complaint to the common carrier for response, and the Commission may 
then open an investigation.
---------------------------------------------------------------------------
    Honorable Members of the Committee, we are at an impasse. If we do 
not act, the largest sacrifice will be the next generation: children 
from all classes, races and educational backgrounds may never 
experience the possibilities that new technology can offer to our 
communities, our Nation, and their world.
    Thank you again for the opportunity to testify, and I look forward 
to your questions.
                                 ______
                                 
                               Appendix A

    Minority Media and Telecommunications Council--November 21, 2013

        Refocusing Broadband Policy: The New Opportunity Agenda 
                          for People of Color

            By David Honig, Esq. and Nicol Turner-Lee, Ph.D.

                           Table of Contents

I. Introduction

II. The State of Digital Equity

III. The Impact of Internet Regulation on Broadband Adoption

        Recapping the History of Broadband Policies

        The FCC's Proposed New Regulatory Framework

        The Impact of FCC Regulatory Decisions on Broadband Adoption

IV. Refocusing Broadband Policy to Advance Digital Inclusion for People 
of Color

        Modernizing the E-rate and Using Broadband to Transform U.S. 
        Education

        Facilitating Telemedicine and Mobile Health Innovation

        Expanding Digital Employment and Entrepreneurship for People of 
        Color

        Rolling Back the Regressive Taxation of Wireless Services and 
        E-Commerce that Hinders Broadband Adoption and Use

V. A Call to Action

About the Authors

Endnotes
                            List of Figures

Figure 1: Barriers To Broadband Adoption--Minority Communities

Figure 2: Trends In Broadband Adoption Rates Across Demographic Groups: 
2005-2013

Figure 3: A Snapshot Of Key Metrics For The U.S. Broadband Market
                                 ______
                                 
Executive Summary
    People of color have long been involved in and impacted by 
communications policy issues. From the denial of broadcast licenses to 
minority entrepreneurs dating back to the 1930s to the censure of 
political activists of color during highly charged social justice 
debates of the 1960s, people of color have long advocated for inclusion 
in this space. More recently, people of color and their communities 
have been greatly affected by a lack of digital resources and 
information to further their economic, civic and educational goals. 
These particular issues involve, for example, low levels of computer 
ownership, major gaps in digital literacy, failing schools, lack of 
awareness of the benefits and uses of broadband, regressive taxation of 
advanced communications services (especially wireless), and inadequate 
access to spectrum, capital, and opportunity for multicultural digital 
entrepreneurs.
    As such, the core concern for advancing broadband adoption and 
digital innovation in the U.S. is to assure that first class digital 
citizenship is afforded to people of color and other vulnerable groups 
that include low-income populations, seniors and people with 
disabilities. A passport to digital citizenship guarantees full access 
to the opportunities powered by broadband and the Internet, especially 
those applications and Internet-enabled devices that drive physical 
wellness, wealth creation and educational readiness. With nearly half 
of the African American and Hispanic community unconnected to these 
resources, policymakers should champion broadband policies that 
facilitate, not stifle, digital diversity, inclusion and 
entrepreneurship.
    While broadband access is more readily available to consumers where 
they live and work, the last few years have underscored a simple fact 
about broadband adoption dynamics: they are extremely complex and 
unique to each user group. And for communities of color, the barriers 
that are impeding more robust adoption and use of broadband are many in 
number and multifaceted in nature.
    Encouraging a more inclusive digital ecosystem could not be more 
timely. Recent debates on Internet regulation, particularly net 
neutrality, have minimized the importance of these critical issues and 
largely overshadowed the adoption crisis. Overwhelmingly, public, 
private and community stakeholders all desire to create and maintain an 
``open Internet,'' yet some of these same discussions have driven apart 
the very parties that should be working together to address inequities 
in digital access that diminish opportunities for minority consumers.
    In an effort to return concerns about broadband adoption and 
digital equity to the forefront, this paper calls forth broadband 
policies that are focused on closing the digital divide and bringing 
more people of color into the innovation age. In doing so, this paper 
explores current trends in minority broadband adoption and assesses how 
current policy debates are supporting or detracting from strategies to 
promote higher adoption rates in minority communities. In the end, the 
paper outlines a more progressive agenda to achieve first class digital 
citizenship for people of color, including:

  1.  Modernizing E-rate and using broadband to transform education;

  2.  Facilitating universal telemedicine and mobile health innovation;

  3.  Expanding digital employment and entrepreneurship opportunities 
        for people of color; and,

  4.  Rolling back the regressive taxation of wireless services and e-
        commerce that hinders broadband adoption and use.

    This agenda is by no means exhaustive. Numerous other issues must 
be addressed before communities of color can be fully included in 
ongoing broadband debates. Indeed, there is likely to be disagreement 
regarding which issues to prioritize. Such debate is welcomed and 
encouraged, provided, of course, that collective attention remains 
focused on adoption and notions of digital equality. In an environment 
where advocates and community leaders are working together to connect 
the unconnected, bolster digital literacy, modernize public policy 
frameworks, and spread the good news about broadband, it's vital that 
the esoteric debates focused on Internet regulation not be permitted to 
consume all of the energies and time that must be devoted to these 
aforementioned issues.
I. Introduction
    People of color have long been involved in and impacted by 
communications policy issues. From the denial of broadcast licenses to 
minority entrepreneurs dating back to the 1930s to the censure of 
political activists of color during highly charged social justice 
debates of the 1960s, people of color have long advocated for inclusion 
in this space. More recently, people of color and their communities 
have been greatly affected by a lack of digital resources and 
information to further their economic, civic and educational goals. 
These particular issues involve, for example, low levels of computer 
ownership, major gaps in digital literacy, failing schools, lack of 
awareness of the benefits and uses of broadband, regressive taxation of 
advanced communications services (especially wireless), and inadequate 
access to spectrum, capital, and opportunity for multicultural digital 
entrepreneurs.
    As such, the core concern for advancing broadband adoption and 
digital innovation in the U.S. is to assure that first class digital 
citizenship is afforded to people of color and other vulnerable groups 
that include low-income populations, seniors and people with 
disabilities. A passport to digital citizenship guarantees full access 
to the opportunities powered by broadband and the Internet, especially 
those applications and Internet-enabled devices that drive physical 
wellness, wealth creation and educational readiness. With nearly half 
of the African American and Hispanic community unconnected to these 
resources, policymakers should champion broadband policies that 
facilitate, not stifle, digital diversity, inclusion and 
entrepreneurship.
    While broadband access is more readily available to consumers where 
they live and work, the last few years have underscored a simple fact 
about broadband adoption dynamics: they are extremely complex and 
unique to each user group.\1\ And for communities of color, the 
barriers that are impeding more robust adoption and use of broadband 
are many in number and multifaceted in nature (See Figure 1).
Figure 1: Barriers To Broadband Adoption--Minority Communities \2\


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Given these barriers, it is imperative that policymakers focus more 
resources on these complex but solvable problems. Addressing these 
barriers will require a significant commitment of time, funding, and 
patience to carefully tailor and target outreach and digital literacy 
programs. Successfully designed and deployed, these efforts have proven 
to be extremely successful in connecting unconnected minorities, even 
though they can be a challenge to implement.\3\
    Federal policymakers should also foster a balanced environment that 
encourages the type of multi-stakeholder collaboration that is 
essential to bringing more minorities online. The U.S. Department of 
Commerce's National Telecommunications and Information Administration 
(NTIA) has done an exceptional job in working with local stakeholders 
to design and deploy community-specific outreach and training programs. 
The Connect2Compete program, an outgrowth of efforts by the Federal 
Communications Commission (FCC) in this space, recently launched a new 
national radio and broadcast ad campaign, in partnership with the Ad 
Council, to promote the benefits of broadband to millions of 
Americans.\4\ As to be discussed in this paper, continuing forward with 
this type of ``collaborate first'' instead of a ``regulate first'' 
approach cultivates a more proactive environment for addressing 
broadband adoption issues.
    Encouraging a more inclusive digital ecosystem could not be more 
timely. Recent debates on Internet regulation, particularly net 
neutrality, have minimized the importance of these critical issues. 
Overwhelmingly, public, private and community stakeholders all desire 
to create and maintain an ``open Internet,'' yet some of these same 
discussions have driven apart the very parties that should be working 
together to address inequities in digital access that diminish 
opportunities for minority consumers.
    In an effort to return concerns about broadband adoption and 
digital equity to the forefront, this paper calls forth broadband 
policies that are focused on closing the digital divide. In doing so, 
this paper explores current trends in minority broadband adoption and 
assesses how current policy debates are supporting or detracting from 
strategies to promote higher adoption rates in minority communities. In 
the end, the paper outlines a more progressive agenda to achieve first 
class, digital citizenship for people of color and ensuring that people 
experience the economic benefits that access and use of broadband 
provides.
    Section I of the paper summarizes current data on broadband 
adoption among African Americans and Hispanics. Section II examines 
current debates on Internet policy that can advance or limit broadband 
adoption rates in communities of color. Section III, the final section, 
outlines a pathway that ensures increased engagement of people of color 
in the digital economy. In Section III, four core policy areas that are 
both pragmatic and targeted in scope are introduced to close the 
digital divide: (1) modernizing E-rate and using broadband to transform 
education; (2) facilitating universal telemedicine and mobile health 
innovation; (3) expanding digital employment and entrepreneurship 
opportunities for people of color; and (4) rolling back the regressive 
taxation of wireless services and e-commerce that hinders broadband 
adoption and use.
    This agenda is by no means exhaustive. Numerous other issues must 
be addressed before communities of color can be fully included in 
ongoing broadband debates. Indeed, there is likely to be disagreement 
regarding which issues to prioritize. Such debate is welcomed and 
encouraged, provided, of course, that collective attention remains 
focused on adoption and notions of digital equality. In an environment 
where advocates and community leaders are working together to connect 
the unconnected, bolster digital literacy, modernize public policy 
frameworks, and spread the good news about broadband, it's vital that 
the esoteric debates focused on Internet regulation not be permitted to 
consume all of the energies and time that must be devoted to these 
aforementioned issues.
II. The State of Digital Equity
    Broadband is the foundation upon which the 21st century economy is 
being built. It is rapidly transforming virtually every aspect of 
modern life--from how we communicate to how we receive medical care to 
the types of businesses that develop in under-served communities. And 
most important for minorities and any other group that has been pushed 
to the margins of society, broadband represents the apex of equality--
an on-ramp to a digital world where everyone can compete on a level 
playing field.\5\ Striking the right balance between tinkering with 
policy and helping to forge the partnerships and collaborations needed 
to close the digital divide are all core to the recalibration of 
broadband policy, especially if these groups are to benefit from the 
digital economy.
    Despite slight increases in minority broadband adoption over the 
last few years, African Americans and Hispanics are still under-
adopting.\6\ Figure 2 provides a historical overview of the digital 
divides that has plagued these communities for much of the last decade.
Figure 2: Trends In Broadband Adoption Rates Across Demographic Groups: 
        2005-2013
        
       [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 
        
        
    As shown in Figure 2, African Americans have experienced a 50 
percent increase in broadband adoption, while Hispanics are only at 
half of that rate of growth in the last eight years. Increasing mobile 
Internet use by people of color can partially explain higher levels of 
broadband adoption among minorities. According to recent research by 
the Pew Internet and American Life Project, 63 percent of Americans use 
their cell phone to access the Internet or use e-mail; and, one in five 
cell owners do most of their online browsing on their phone.\17\ 
Seventy four percent of African Americans are cell phone Internet users 
as compared to 68 percent of Hispanics and 59 percent of whites.\18\ 
Low-income populations, less-educated and younger Internet users were 
also more likely to go online using their cell phones at higher rates 
than wealthier, more educated and older populations.\19\
    The emergence of smartphones has contributed to the expanded use of 
the mobile Internet by people of color. In 2013, Pew research found 
that 56 percent of American adults own a smartphone of some kind, 
compared with 70 percent who have broadband at home.\20\ In their study 
of smartphone usage, Pew research found that African Americans and 
Latinos over-indexed in their use of these devices for non-voice 
applications such as web surfing, playing games and accessing 
multimedia content.\21\ A report issued by the Joint Center for 
Political and Economic Studies mirrored these findings reporting that 
46 percent of whites have smartphones compared to 49 percent of African 
Americans and Hispanics.\22\ E-mail (90 percent), online social media 
(82 percent) and research for school or work (70 percent) were the 
primary activities of Internet users connecting solely through a 
smartphone.\23\ While the Joint Center study concluded that access to 
multiple Internet-enabled devices (i.e., home broadband, tablet and 
smartphone) increases the likelihood that individuals will access more 
welfare-enhancing content such as jobs, health/medical information and 
e-commerce, wireless access is clearly addressing one major barrier to 
adoption--the absence of a home broadband connection for people of 
color.\24\
    While the promise of broadband is being realized by some, a large 
number of African Americans and Hispanics are still not online, citing 
relevance first and the lack of digital literacy skills second as 
critical reasons. Among non-Internet users, recent Pew research found 
that 15 percent of American adults over the age of 18 were not 
online.\25\ According to this data, 34 percent of non-Internet users 
reported that the Internet was just not that relevant to them, pointing 
to the lack of interest, desire and need for it as the main reasons for 
lack of a connection.\26\ Digital illiteracy was cited by 32 percent of 
survey respondents as to the reason for their lack of a connection, 
while 19 percent cited the expense of service and/or computer as 
another reason for not getting online.\27\
    According to Pew's research on why people are not getting online, 
24 percent of Hispanics are non-Internet users as compared to 15 
percent of African Americans, and 14 percent of Whites.\28\ Seniors, 
low-income populations, and rural residents also ranked high as non-
Internet users.\29\ When these variables are combined with race and 
ethnicity, disparities in broadband adoption rates are even more 
dramatic.
    Despite their lack of online use, non-Internet users reported, both 
in 2010 and 2013, adequate availability of and access to broadband 
services either at home, through family members or friends, or at their 
place of employment.\30\ Compared to 2010 Pew data, access to Internet 
resources is even greater now--only seven percent of study respondents 
reported no access to an Internet Service Provider (ISP) in 2013.\31\
    This finding alone suggests that the market for broadband services 
has blossomed over the last decade, despite gaps in demand. Some 
researchers and advocates would also argue that the certainty provided 
by a long-standing, minimalist regulatory approach to broadband policy 
served to preserve and expand the ecosystem, resulting in both 
continued investment in infrastructure and rapid deployment of next-
generation wireline and wireless networks to nearly every part of the 
country.\32\ Today, the vast majority of households in the U.S. are 
served by broadband ISPs, with most having multiple wireline and 
wireless options.\33\ Equally as important, the quality of broadband 
service--measured in terms of speed, the range of offerings, and other 
factors--has greatly increased,\34\ and prices have fallen.\35\ Figure 
3 summarizes some key achievements in the U.S. broadband market.
Figure 3: A Snapshot Of Key Metrics For The U.S. Broadband Market

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Highlighting these accomplishments in the broadband market is 
important because the notion of universal service and equal access to 
communications technology and media has long been at the core of 
minority advocacy in this space.\40\ Many national civil rights 
organizations have continually exerted pressure on stakeholders in the 
public and private sectors to ensure that historically disadvantaged 
groups, along with low-income households and others that have been 
pushed to the margins of society, have robust access to these 
transformative services.\41\
    The juxtaposition of the state of broadband markets against current 
rates of adoption therefore should draw attention to the mismatch 
between growth and consumer demand, suggesting the need to focus on 
increasing broadband adoption.
III. The Impact of Internet Regulation on Broadband Adoption
    The current debate centered over whether and how the FCC might 
regulate the Internet has largely overshadowed the adoption crisis.\42\ 
The roots of this debate stretch all the way back to discussions in the 
1990s and early 2000s about the appropriateness of imposing common 
carrier-style ``open access'' rules on cable broadband service 
providers with one of the first early concerns being local franchise 
regulation.\43\ Coined in the early 2000s, ``network neutrality'' 
attempts to both capture an amorphous set of values for Internet 
governance and levy an indictment of sub-par competition in the market 
for high-speed Internet access.\44\
    Over time, the conversation has evolved into a broader examination 
of the market for high-speed Internet access in the United States and 
the extent to which ISPs could possibly position themselves as 
gatekeepers to content on the World Wide Web.\45\ To that end, those 
who advocate in favor of more regulation of the Internet have long 
punctuated their arguments with ominous ``what ifs'' that might befall 
an ``unregulated'' broadband sector.\46\ In their view, the absence of 
affirmative rules governing how ISPs can and cannot manage their 
networks leaves the market vulnerable to a range of hypothetical 
dangers.\47\ On the other hand, those who argue for a minimalist 
regulatory framework view other governmental entities such as the 
Department of Justice or Federal Trade Commission mitigating genuine 
market failures and consumer harms on a case-by-case basis.
Recapping the History of Broadband Policies
    While both of these sides have their merits, they do not fully 
embrace solutions for addressing the broadband adoption crisis. Despite 
the FCC's 2010 National Broadband Plan's\48\ articulation of an 
inspiring vision for a more inclusive and robust culture of digital 
engagement, the type of rules needed to monitor and preserve the open 
Internet have undergone scrutiny from government, industry and advocacy 
groups. Historically, a hands-off approach has long been the primary 
guiding principle for regulating the Internet in the United States. One 
of the clearest interpretive statements of the FCC's mandate in this 
space came from FCC Chairman William Kennard, who served as FCC chair 
in the late 1990s when the commercial Internet began to reach the 
general population and when broadband networks first began to emerge.
    At that time, some local franchise authorities had decided to 
impose ``open access'' requirements, a form of common carrier 
regulation, on cable modem broadband service. Further, many consumer 
advocates and cable competitors were calling for the FCC to impose an 
open access obligation when approving AT&T's (the long distance 
company) acquisition of the largest cable company, TCI. In 1999, 
recognizing that this new service and the Internet sector were poised 
for exponential growth, Kennard stated:

        In a market developing at these speeds, the FCC must follow a 
        piece of advice as old as Western Civilization itself: first, 
        do no harm. Call it a high-tech Hippocratic Oath.

        So with competition and deregulation as our touchstones, the 
        FCC has taken a hands-off, deregulatory approach to the 
        broadband market. We approved the AT&T-TCI deal without 
        imposing conditions that they open their network.

        The competitive fires are burning. The market has a degree of 
        certainty and investment dollars have followed. Yet some local 
        cable franchising authorities want to try a different approach. 
        Instead of a national policy of de-regulation and competition, 
        they want a local policy of regulation.

        It is in the national interest that we have a national 
        broadband policy. The FCC--as I've said before--has the 
        authority to set one, and we have. We have taken a deregulatory 
        approach, an approach that will let this nascent industry 
        flourish.\49\

    After several court challenges regarding the efficacy of imposing 
open access rules on cable broadband ISPs,\50\ the FCC endeavored to 
clarify, once and for all, the appropriate regulatory framework for all 
broadband platforms.\51\ To that end, between 2002 and 2007 the FCC 
classified every type of broadband platform as an ``information 
service,'' reflecting the dynamic and interactive nature of information 
flowing over these networks.\52\ The practical impact of these 
decisions was that broadband would be subjected only to the 
Commission's ancillary regulatory authority under Title I of the 
Communications Act, which provides for little to no government 
oversight. This contrasted greatly with the policy framework that had 
been developed for basic telephone service, which is regulated under 
Title II as a common carrier.\53\ The FCC concluded that a minimalist 
regulatory framework for broadband services was necessary given the 
dynamism of the market, and was also essential to ``promot[ing] 
widespread deployment of broadband services.''\54\
    While these policy imperatives were clearly focused on facilitating 
more widespread access to broadband services, a goal shared by 
communities of color, the FCC during this period also explored how to 
ensure that ``the various capabilities of [broadband] technologies 
[were] not used in a way that could stunt the growth of the economy, 
innovation and consumer empowerment.''\55\ Addressing these concerns, 
FCC Chairman Michael Powell put forth four principles that would 
``preserve the freedom of use broadband consumers [had] come to 
expect.''\56\ These ``Powell Principles,'' which would be eventually 
adopted by the FCC in a non-binding Policy Statement in 2005, entitled 
consumers to:

    Access the lawful Internet content of their choice;

    Run applications and use services of their choice, subject 
        to the needs of law enforcement;

    Connect their choice of legal devices that do not harm the 
        network; and

    Experience competition among network providers, application 
        and service providers, and content providers.\57\

    Each principle was subject to the reasonable network management 
needs of the broadband service provider.\58\ While these were not 
formal, enforceable rules, the FCC did express an intention to 
``incorporate the. . .principles into its ongoing policymaking 
activities.''\59\
    Despite the rapid build-out of the Nation's broadband 
infrastructure, skepticism regarding the ability of organic market 
forces to drive the marketplace to positive, consumer-focused outcomes 
has lingered. In the mid-and late-2000s, there were repeated calls for 
the imposition of common carrier-style rules on broadband ISPs, even 
though the FCC had expressly declined to do so for fear that such rules 
would choke innovation.\60\ Moreover, calls for formal network 
neutrality rules increased as some advocates argued that the 
Commission's Policy Statement enshrining the Powell Principles was 
insufficient to protect against the potential for content 
discrimination, blocking, throttling, and other such activities by 
ISPs. However, until 2007 the FCC did not receive a single complaint 
claiming unlawful or unreasonable behavior by ISPs.\61\ And even when 
it did--in a case involving alleged throttling of the bandwidth-intense 
data traffic of BitTorrent by cable broadband provider Comcast \62\--
the debate over the proper scope of Internet regulation and consumer 
protection quickly snowballed into what some saw as a proxy battle over 
the future of the open Internet.
    The subsequent inquiry by the FCC, which began in early 2008, set 
in motion a series of interrelated events that, over the next two 
years, largely dominated the discussion of removing barriers to 
broadband adoption and resulted in the adoption of network neutrality 
rules. Having anticipated legal challenges, a year earlier the FCC 
launched a rulemaking proceeding to ``provide greater clarity regarding 
the Commission's approach to these issues.'' \63\ Specifically, the 
Commission wished to codify the four principles included in the 2005 
Policy Statement, along with two new rules: a nondiscrimination rule 
and a transparency requirement for ISPs.\64\
The FCC's Proposed New Regulatory Framework
    In December 2010, the Commission closed its rulemaking proceeding 
by adopting a completely new regulatory framework for the Internet, a 
framework that went far beyond what the FCC had outlined previously in 
its 2005 Policy Statement. The FCC rationalized that such sweeping and 
historic action was necessary to preserve the open Internet. These new 
rules encompassed:

    Blocking. Subject to reasonable network management, 
        providers of fixed broadband Internet access services were 
        prohibited from blocking lawful Internet content, applications, 
        services, or non-harmful devices.\65\ Mobile broadband 
        providers were afforded more latitude and prevented only from 
        blocking lawful websites or applications that provide voice or 
        video telephony services.\66\

    Transparency. All ISPs were required to disclose their 
        network management practices (e.g., congestion management, 
        attachment rules), performance characteristics (e.g., service 
        description and impact of specialized services), and commercial 
        terms (e.g., pricing and privacy policies).\67\ Consumer and 
        civil rights organizations favored strong transparency 
        requirements.\68\

    Unreasonable discrimination. Recognizing that ``[a] strict 
        nondiscrimination rule would be in tension with our recognition 
        that some forms of discrimination, including end-user 
        controlled discrimination, can be beneficial,'' \69\ the FCC 
        adopted a rule that prohibited only providers of fixed 
        broadband service from ``unreasonably discriminat[ing] in 
        transmitting lawful network traffic over a consumer's broadband 
        Internet access service.'' \70\

    Several carve-outs and exceptions were included in this framework. 
In one major carve-out, the FCC, recognizing the unique capacity 
constraints and other distinctive qualities of wireless networks, 
limited the extent to which the rules applied to mobile broadband ISPs. 
In particular, the FCC opted to ``apply certain of the open Internet 
rules, requiring compliance with the transparency rule and a basic no-
blocking rule.'' \71\ In a second exception, the FCC created a new 
category of services--specialized services--that are to be exempt from 
the rules for the foreseeable future.\72\ This class of services 
includes VoIP and IP video and might eventually embrace applications 
like telemedicine. According to the exception, these specialized 
services must also be closely monitored by the FCC in order to ``verify 
that [they] promote investment, innovation, competition, and end-user 
benefits without undermining or threatening the open Internet.'' \73\
    As soon as these rules were finalized and put into effect,\74\ they 
were appealed to the Court of Appeals for the District of Columbia 
Circuit on the grounds that the FCC had exceeded the regulatory 
authority granted to it by Congress.\75\ A decision in the case is 
expected by the end of 2013.\76\
The Impact of FCC Regulatory Decisions on Broadband Adoption
    While this paper takes no position on which side will prevail in 
the court decision on the net neutrality rules, it's worth noting that 
an ``open Internet'' and increased broadband adoption should still be 
the goals regardless of the decision. As stated earlier, broadband 
growth and technology innovation have created the backdrop for greater 
digital engagement by all citizens, yet more vulnerable populations are 
not immediately adopting. As shown in Figure 2, disparities still exist 
despite the fact that the FCC explicitly stated that it ``expect[ed] 
that open Internet protections [would] help close the digital divide by 
maintaining low barriers to entry for underrepresented groups and 
allowing the development of diverse content, applications and 
services.'' \77\ Moreover, gaps between African Americans, Hispanics, 
and Whites have persisted both before and after the imposition of 
Internet regulation.\78\ Given this scenario, what could be the impact 
of more or less Internet regulation now narrowing the current digital 
divide?
    If the rules were to be upheld in this decision, minority consumers 
and other newcomers to the Internet might be subjected to cost shifting 
by ISPs to shoulder the cost of heavier users that congest the Internet 
with heavy video streaming and multimedia downloads. The idea that 
minority consumers, who are already disproportionately adopting 
broadband and sensitive to any changes in price, should incur the 
expense of heavier bandwidth users does not appear to further the goals 
of broadband adoption. Previous data points presented in this paper 
indicated that e-mail, social media and access to multimedia content 
(e.g., photos, music, etc.) were primary activities online for minority 
consumers.\79\ These three functions taken together do not require 
enormous amounts of bandwidth and justify the need for service and 
price differentiation for late adopters and non-Internet users to match 
usage expectations and their discretionary income.
    Moreover, over-regulating this industry could undermine business 
models that have essentially kept, and continue to keep, the cost of 
broadband services lower. In a paper on broadband competition, Everett 
Ehrlich argues that the Internet's ``two-sided'' market is what drives 
down consumer pricing.\80\ Comparing the broadband ecosystem to that of 
newspapers, Ehrlich notes that the daily newspaper generates its 
revenue through consumer subscriptions and advertising, and concludes 
that if newspapers were over-regulated and told to keep ad revenues 
marginalized, newspapers--much like the Internet--would find themselves 
substantially raising consumer prices and possibly impacting consumer 
demand for the product.'' \81\ Today, the cost of broadband services 
is, in fact, decreasing due to flexible business models that capitalize 
on competition and market-driven revenue opportunities, e.g., online 
advertising.\82\
    On this same issue, online content and applications that serve the 
needs of Internet users and entice those who are offline to adopt, 
should take some priority in this content's arrival to the PCs and 
smart devices of consumers. In his article on the ``two-sided'' market 
of the Internet, Nicholas Economides, a net neutrality proponent, 
suggested that prioritization of monetized content over non-paying 
firms on an ``open Internet'' is discriminatory.\83\ While his 
conclusions have some plausibility due to the diverse interests of 
Internet users, safeguards are already in place to monitor industry's 
performance in this area. The FCC's annual ``Measuring Broadband 
America'' report details the speed and performance of broadband 
connections and calls out degrading services among broadband 
providers.\84\ In this annual report card, any negative effect on 
broadband performance due to content prioritization is designed to show 
up, thus making the industry more accountable--and in some cases, more 
competitive in touting their service quality. Therefore, there is 
little danger that prioritizing some content will cause a degradation 
of general Internet traffic. Moreover, some legitimate cases for 
content prioritization do exist--one being in the area of telemedicine.
    As more minorities, for example, suffer from chronic diseases and 
inadequate access to health care, more advanced and consumer-focused 
telemedicine and telehealth applications should take priority over 
leisurely downloads, especially if the need for data is critical for 
patient care and insurance companies are willing to pay for it.\85\ The 
ability of high-speed broadband networks to facilitate patient to 
doctor connections, especially for low-income or rural communities, is 
another step towards assuring first class digital citizenship for all 
Americans. Given that most minorities are also using the mobile 
Internet to access the web, the combination of spectrum shortages for 
commercial wireless and the imposition of overly stringent neutrality 
rules might limit the expedited delivery of this type of content, 
especially if applications like telemedicine are not exempted from the 
rules.
    In sum, if the net neutrality rules are ultimately upheld by the 
Federal courts, then policymakers, minority advocates and community 
stakeholders must consider the potential impacts of regressive cost 
structures, stalled competition and innovation on efforts to advance 
broadband adoption and use. The Commission should also interpret and 
apply its rules and policies in a reasonable, forward-looking manner 
commensurate with the minimalist regulatory framework for broadband 
that has encouraged investment and innovation throughout the ecosystem 
for nearly two decades. Failure to do so could adversely impact users 
by undermining business model experimentation (e.g., new ad-supported 
services, or non-monopolistic partnerships between content providers 
and ISPs that hinge on granting preferred network access) and the 
emergence of new services that are being developed in direct response 
to consumer demand (e.g., telemedicine tools that require 
prioritization; new streaming media services).\86\
    If the rules are invalidated, on the other hand, the ``open 
Internet'' should still remain an essential policy focus. Policymakers, 
minority advocates and community stakeholders should place continued 
pressure on industry to invest, innovate and extend its efforts to 
bring more underserved populations online, particularly by stabilizing 
or reducing consumer costs for broadband services. In the absence of 
rules, the FCC should also recognize that broadband service is 
different from what has historically been considered a common carrier 
service. These fundamental technological differences are also evident 
in the ability to enable broadband Internet access via different 
platforms--e.g., cable, DSL, BPL, fiber, 3G wireless, 4G wireless, and 
satellite. This type of intermodal competition that was impossible in 
the context of basic telephone service suggests the maintenance of a 
minimalist, Title I-based regulatory framework under which the market 
has long thrived. On this basis alone, attempting to reclassify 
broadband as a Title II telecommunications service could prove harmful 
for consumers and companies alike.\87\
    If history is any guide, debates around Internet regulation will 
continue to dominate the discussion around the future of the Internet, 
but, as suggested in this paper, at a cost to closing the digital 
divide. The time, resources and efforts focused on picking ``winners'' 
and ``losers'' in this debate can detract from solving the enormously 
complex and top priority task of connecting and serving the 
unconnected.
    Going forward, numerous other barriers and issues are ripe for 
narrowly tailored interventions that, if properly calibrated, can help 
deliver more robust and evenly distributed gains in consumer welfare. 
The final section of this paper expounds upon these opportunities and 
proposes more pragmatic policy solutions that would advance the cause 
of digital inclusion.
IV. Refocusing Broadband Policy to Advance Digital Inclusion for People 
        of Color
    Broadband policy should engage communities of color to leverage 
broadband for individual and community empowerment. As such, this paper 
offers an alternative approach to broadband policy that shifts the 
resources and energy from a protracted and unnecessary battle over 
regulation to connection of underserved and under-connected demographic 
groups.
    With these dynamics in mind, the remainder of this paper 
articulates an alternative path forward for the FCC, Congress, ISPs, 
advocates, and other stakeholders in the broadband space. The issues 
discussed below are of fundamental importance not only to communities 
of color, but to every demographic group, sector, and institution in 
the United States.
Modernizing the E-rate and Using Broadband to Transform U.S. Education
    A critical component of solving the adoption crisis in the United 
States is ensuring that children are equipped with the skills needed to 
excel in our digital society. While Internet access has diffused across 
nearly every school in the nation,\88\ high-speed access is unavailable 
in many schools, and the disruptive power of broadband remains largely 
untapped in this vital sector. The issues are well known: average 
bandwidth per student is low across the entire student population; many 
schools lack adequate computing equipment (e.g., laptops and tablets) 
to tap into the full power of broadband; too many teachers are 
unprepared to apply or teach new technologies in the classroom; and 
lack of home access to broadband access profoundly inhibits learning 
outside of school.\89\
    Addressing these barriers is essential for all children and our 
country generally, but especially vital for African American and 
Hispanic students, particularly those from low-income, low-wealth 
families. As in many other contexts, significant disparities exist in 
the educational achievement and performance of communities of color 
vis-a-vis other demographic groups. Despite significant gains in recent 
years, African American and Hispanic students still lag behind children 
in other demographic groups by a number of measures, including high 
school graduation rates and reading and math test results.\90\ As a 
result, African Americans and Hispanics are less likely to attend and 
finish college than White counterparts.\91\
    Broadband cannot and will not solve all of these problems on its 
own, but ensuring that high-speed Internet access is widely available 
in schools and being applied to enhance educational engagement will be 
significant steps toward bridging the achievement gap. Broadband 
supports an ever-expanding array of tools and services that can provide 
students with more individualized learning experiences that can be 
accessed regardless of location. Modernizing the E-rate program to 
ensure that funding is being used to support these types of outcomes 
must be a priority for Federal policymakers. Fortunately, the FCC has 
begun the process of updating and streamlining this program to better 
reflect the modern educational and technological environment.\92\
    To ensure that E-rate 2.0 is aligned with the educational and 
technology goals of minority communities, the FCC should engage 
directly with stakeholders working in these communities to benefit from 
their expertise and explore what works when it comes to designing 
programs aimed at enhancing educational outcomes in minority 
communities.\93\ The next iteration of the E-Rate program can be 
pivotal in upgrading technology-deficient schools and libraries located 
in poor and minority communities and initiating the pathway to digital 
citizenship for isolated populations. Robust digital learning 
environments will also enable the use of 21st century devices, as well 
as pedagogies that support science, technology, engineering and 
mathematics (STEM) core competencies for disadvantaged schools and 
students.
    All of these gains, of course, will be for naught if home broadband 
adoption rates remain low. In this new world of broadband-enabled 
communication and education, learning should not stop once a student 
leaves the schoolyard. A growing body of evidence suggests that 
children in households that adopt broadband have better educational 
outcomes than children in households that remain unconnected.\94\ These 
gains, however, also hinge on parents who are themselves digitally 
literate and who are engaged in helping their children use broadband to 
enhance their education.\95\ Much work remains to be done at the 
community level to ensure that parents, grandparents, teachers, 
community leaders, and other authority figures agree to use broadband 
to create a culture of adoption, a culture of digital learning, and a 
culture of digital empowerment and achievement for minority students of 
all ages.
Facilitating Telemedicine and Mobile Health Innovation
    As previously discussed, advanced broadband technology is rapidly 
transforming healthcare in the United States. This real-time, always-on 
communications platform allows for dramatic new approaches to 
delivering and consuming medical care regardless of location.\96\ A 
wide range of broadband-enabled technologies--from wireless sensors to 
mobile devices to electronic health records--are already being used by 
practitioners to deliver in-home care, to remotely monitor patients' 
vital signs, to provide healthcare services in underserved areas, and 
to more conveniently connect patients with specialists.\97\ Together, 
these new approaches are generating impressive results in the form of 
better health outcomes, lower costs, and wider availability.\98\ Yet 
the very groups that are poised to benefit most immediately and 
profoundly from these more advanced healthcare services--i.e., older 
adults, people with disabilities, African Americans, and Hispanics--
have the lowest broadband adoption rates.
    For minorities in particular, broadband-enabled telemedicine 
provides convenient and affordable ways to address chronic illnesses 
and diseases. This is especially critical for African Americans and 
Hispanics, who collectively are at a higher risk of developing costly 
chronic diseases (e.g., diabetes, heart disease) than other groups.\99\ 
They are also less likely to have health insurance, which reduces the 
likelihood that chronically ill patients will seek out and obtain 
preventative care or other services that could lead to early diagnosis 
and treatment.\100\ As such, African Americans and Hispanics are poised 
to benefit greatly from the full panoply of telemedicine services, 
especially those enabled by and accessible on mobile devices. Since 
African Americans and Hispanics are already avid users of wireless 
broadband services,\101\ there is growing evidence that mobile 
telemedicine interventions and solutions are well positioned to deliver 
the kind of preventive, real-time medical care that is not readily 
accessible to these patients.\102\
    Uncertainty regarding the ability to prioritize healthcare data 
traffic, and the persistence of numerous legal and regulatory barriers, 
could thwart continued progress in telehealth. As the National 
Foundation for Women Legislators (NFWL) and the National Organization 
of Black Elected Legislative (NOBEL) Women observed in 2010, having 
wide latitude to manage networks and prioritize certain types of 
critical, time-sensitive data is essential to promoting continued 
innovation in this space.\103\ While it could be determined that 
telehealth applications could be exempted from neutrality rules, 
several other barriers can also impede further progress and innovation 
in this space.\104\ These include a range of analog-era rules impacting 
physician licensure and credentialing,\105\ as well as antiquated 
insurance reimbursement mechanisms and health data privacy rules.\106\ 
Addressing and potentially resolving these impediments can unleash the 
full disruptive power of broadband in the healthcare space. To that 
end, it is imperative that policymakers at the Federal and state levels 
work to remove barriers and encourage more innovation throughout the 
burgeoning telemedicine ecosystem. Ultimately, a windfall of benefits 
and opportunity for communities of color and other underserved groups 
should be at the top of a new broadband policy agenda.
Expanding Digital Employment and Entrepreneurship for People of Color
    An important consequence of addressing the adoption crisis and 
removing persistent barriers to broadband adoption in education will be 
increased use of advanced communications tools to bolster minority 
entrepreneurship, employment, and overall wealth creation and economic 
standing.
    High-speed Internet access is an increasingly essential tool for 
workers of all kinds. Broadband rapidly creates new jobs and new kinds 
of jobs\107\ and represents a unique platform that allows anyone with 
an idea, ambition, and digital literacy skills to launch a small 
business.\108\ This is potentially a boon for people of color in 
particular, who have endured decades of stubbornly high unemployment 
rates.\109\ Such chronic employment disparities, coupled with the 
lingering vestiges of marginalization, have also contributed to a 
staggering gap in household wealth between Whites, African Americans, 
and Hispanics. A recent analysis by Pew found that the ``median wealth 
of white households is 20 times that of [B]lack households and 18 times 
that of Hispanic households.''\110\ Together with limited access to 
capital,\111\ low rates of broadband adoption, and lagging digital 
literacy skills,\112\ these factors combine to put African Americans 
and Hispanics at a grave disadvantage in the new digital economy.
    Becoming a digital entrepreneur, however, can be difficult. As with 
any other business endeavor, using broadband to start a new venture is 
fraught with uncertainty. Success often hinges on funding, 
relationships, skill, and luck. Unfortunately, the deck has long been 
stacked against minorities in the high tech space. A 2011 report by 
MMTC found that ``minorities, particularly African Americans, 
Hispanics, and women, remain sorely underrepresented across the high 
tech sector and in the ranks of some of the sector's biggest 
companies.'' \113\ Numerous factors have contributed to this outcome--
low participation rates and achievement in STEM subjects (science, 
technology, engineering, and math) by African American and Hispanic 
students; a general disregard for Equal Employment Opportunity (EEO) 
reporting and compliance by high tech firms; little support for 
minority and women business enterprises in the sector; and limited 
access to critical resources (e.g., spectrum).\114\ Indeed, despite 
lofty rhetoric promising equal access and openness, the high tech 
sector still remains largely closed to African Americans and 
Hispanics.\115\ Such an inhospitable environment discourages the type 
of risk-taking needed to succeed in this highly dynamic and competitive 
space.\116\
    At a time when many high tech companies are advocating for 
immigration law reforms in an effort to import more talent--and thus 
fill viable openings with non-citizens--policymakers should work to 
bolster the domestic supply of technologically proficient workers.\117\ 
The urgency around these issues is made even more acute by Federal 
sequestration and budget cuts that make it necessary for public 
officials to choose how to deploy increasingly scarce resources in a 
way that will realize the largest return on investment. In such an 
environment, policymakers--while insisting on strict enforcement of EEO 
and other civil rights mandates--should tread carefully on relying 
entirely on rigid policies dependent upon government oversight. 
Instead, a collaborative approach that partners public and private 
sectors to advance minority participation in the high tech sector 
should be considered. To that end, policymakers should support efforts 
to improve minority STEM achievement,\118\ make minority employment 
data more transparent, raise awareness of effective minority hiring 
practices in the private sector, increase access to capital and other 
critical resources needed for minority entrepreneurs to thrive in this 
space, and improve broadband adoption rates in minority 
communities.\119\
    These and other actions must be taken to equip eager minority 
candidates with the skills, resources, and confidence needed to compete 
for and secure positions in this space.\120\ These efforts will also 
undoubtedly encourage and embolden would-be digital entrepreneurs to 
enter the fray and attempt to build successful businesses.
Rolling Back the Regressive Taxation of Wireless Services and E-
        Commerce that Hinders Broadband Adoption and Use
    As previously discussed, African Americans and Hispanics are over-
indexing in their use of the mobile Internet and increasingly becoming 
the avid users of smartphones. Yet, despite these positive trends, 
wireless services continue to be taxed at disproportionately high 
rates.
    This preference by minorities for mobile services makes high 
wireless taxes a significant burden on low-income users, and 
particularly minorities. A 2012 analysis of wireless taxes found that 
the average tax burden on wireless consumers was just over 17 percent, 
with many states having rates over 20 percent.\121\ State and local 
levies and fees comprise the largest share of these taxes (11.36 
percent of the overall burden).\122\
    The regressive nature of these taxes could discourage continued use 
of wireless services, including mobile broadband, in communities of 
color and low-income households.\123\ Combined with an array of other 
state and local taxes being levied on digital goods, the overall tax 
burden associated with using mobile services to purchase goods could 
deter more robust use of these tools by the very groups that are 
turning to them as their primary means of communication. As the Joint 
Center for Political & Economic Studies noted in a 2011 report,

        ``[s]uch regressive taxation schemes create a broadband 
        adoption barrier for low-income individuals that have no other 
        reliable way to go online. The higher total cost of service 
        created by these taxes may cause many low-income consumers to 
        either forego purchasing a mobile device and subscribing to a 
        mobile service plan or cancel their service upon discovering 
        the true cost of maintaining their service.'' \124\

    Similar concerns abound in communities of color, where mobile 
broadband has emerged as the primary pathway to first class digital 
citizenship.\125\
    There are several ways in which policymakers can work together to 
reverse these trends. First, local and state policymakers should work 
closely with community leaders, advocates for minorities and the poor, 
and other stakeholders to appreciate how integral wireless services 
have become to everyday life. Acquiring such perspective could help to 
begin the process of equalizing the tax treatment of wireless services 
with other services. Second, the FCC should work to rein in growth of 
the USF portion of the overall wireless tax burden. In particular, the 
Commission could accelerate reforms aimed at creating economies in the 
operation of the High Cost Fund, and more accurately targeting 
subsidies and thus driving down overall costs.\126\ Continued support 
of the Lifeline program will ensure that people of color, irrespective 
of their ability to pay, will be able to benefit from wireless 
services. Third, Congress should pass legislation that would place a 
moratorium on new state and local wireless taxes for the foreseeable 
future. In the recent past, several bills to this effect have been 
introduced, but none has gained momentum towards enactment.\127\
    In sum, according to the 2011 report from the Joint Center for 
Political and Economic Studies,

        ``[w]hile regressive state and local wireless taxation 
        structures may appear to generate revenues to provide needed 
        services, these taxes also put mobile opportunities farther out 
        of reach for those consumers who would most benefit from 
        wireless broadband.'' \128\
    As such, there are many opportunities for stakeholders to come 
together and develop fairer tax structures for wireless and E-commerce.
V. A Call to Action
    This agenda is by no means exhaustive. Numerous other issues must 
be addressed before communities of color can be confident in their 
inclusion in ongoing broadband debates. Indeed, there is likely to be 
disagreement regarding which issues to prioritize. Such debate is 
welcomed and encouraged, provided, of course, that collective attention 
remains focused on adoption and notions of digital equality. In an 
environment where advocates and community leaders are working together 
to connect the unconnected, bolster digital literacy, modernize public 
policy frameworks, and spread the good news about broadband, more 
complex debates focused on Internet regulation seem to redirect 
energies and time spent on these aforementioned issues.
    As stated throughout the paper, the current focus on the 
enforcement of rules that are designed to be prophylactic \129\ towards 
hypothetical ``what ifs'' has detracted from this critical conversation 
on how the Nation will ensure a more inclusive and beneficial Internet 
for all citizens. The critical concern of advancing digital inclusion 
should resonate with all stakeholders who want to assure that millions 
of Americans are privileged to the social, economic and education 
benefits powered by the broadband ecosystem. In particular, the call to 
action must include:

   Modernizing E-rate and using broadband to transform 
        education;

   Facilitating universal telemedicine and mobile health 
        innovation;

   Expanding digital employment and entrepreneurship 
        opportunities for people of color; and,

   Rolling back the regressive taxation of wireless services 
        and e-commerce that hinders broadband adoption and use.

    These are all actionable policy issues that serve to engage and 
remove the deterrents to broadband adoption for more vulnerable 
populations.
    While priorities will differ on how to reach these goals, agreement 
on the core issue of first class, digital citizenship for people of 
color, low-income, senior and disabled Americans should resonate, 
especially in the achievement of digital equity. Ultimately, this 
aspirational state will only be achieved if all interests are aligned 
around common goals that are focused on empowering vulnerable 
populations to seize the many opportunities afforded by informed 
broadband use.
About the Authors
    David Honig, Esq.--David Honig is Co-Founder and President of the 
Minority Media and Telecommunications Council (MMTC). Since 1986, MMTC 
has been the Nation's leading advocate for equal opportunity and civil 
rights in the mass media, telecommunications, and broadband industries. 
David has practiced communications and civil rights law since 1983, 
specializing in electronic redlining and race discrimination cases, and 
defining the legal space that is the intersections of civil rights and 
telecommunications law. In his role at MMTC, David has represented over 
80 national minority, civil rights and religious organizations before 
the FCC and has been named by the National Law Journal as one of the 30 
most influential communications lawyers. David also serves pro bono as 
chief counsel and chair of the Legal Redress Committee of the Florida 
State Conference of Branches of the NAACP.
    Nicol Turner-Lee, Ph.D.--Dr. Nicol Turner-Lee is Vice President and 
Chief Research and Policy Officer for the Minority Media and 
Telecommunications Council (MMTC). She is responsible for crafting the 
research agenda that aligns with MMTC's longstanding civil rights 
history. Prior to joining MMTC, Nicol served as President and CEO of 
the National Association for Multi-ethnicity in Communications, the 
premier professional association advocating and empowering for 
diversity in the media and cable communications industry. She also 
served as Vice President and the first Director of the Media and 
Technology Institute at the Joint Center for Political and Economic 
Studies. In this role, she published the first ``National Minority 
Broadband Adoption Study,'' a body of work that was cited in the 
congressionally mandated National Broadband Plan and other FCC 
publications. Dr. Turner-Lee has received a variety of professional 
recognitions for her research in broadband and Internet policy, most 
recently being recognized as one of 60 most inspiring women in media by 
the Alliance for Women in Media. She also sits on several national 
Boards including the Telecommunications Policy Research Conference 
(TPRC).
Endnotes
    \1\ The literature on this point is vast and growing. For a 
representative sampling, see National Minority Broadband Adoption 
(identifying minority-specific barriers); Barriers to Broadband 
Adoption: A Report to the FCC, New York Law School (Oct. 2009), 
available at http://www.nyls.edu/user_files/1/3/4/30/83/
ACLP%20Report%20to%20the%20FCC%20%20Barriers
%20to%20BB%20Adoption.pdf (identifying dozens of barriers impacting 
broadband adoptions by seniors, people with disabilities, and 
stakeholders throughout the education, energy, and healthcare sectors) 
(``Barriers to Broadband Adoption''); Paula Gardner et al., Getting 
turned on: Using ICT training to promote active ageing in New York 
City, The Journal of Community Informatics, 8(1) (2012), available at 
http://ci-journal.net/index.php/ciej/article/view/809 (identifying 
barriers and methods for overcoming barriers in the senior citizen 
community).
    \2\ These barriers are derived from: National Broadband Plan; 
National Minority Broadband Adoption; Promoting Broadband Adoption 
Among Minorities, Florida Conference of Black State Legislators (Oct. 
2011), available at http://communicationsconsumersunited.com/wp-
content/uploads/2011/10/Florida-Conference-of-Black-State-Legislators-
Broadband-Adoption-paper-092010.pdf; Robert Shapiro and Kevin Hassett, 
A New Analysis of Broadband Adoptions Rates by Minority Households, 
Georgetown Center for Business and Public Policy (June 2010), available 
at http://www.sonecon.com/docs/studies/
Report_on_Broadband_Pricing_and_Minor
ities-Shapiro-Hassett-June-21-2010.pdf; Broadband Imperatives for 
African Americans: Policy Recommendations to Increase Digital Adoption 
for Minorities and Their Communities, Joint Center for Political & 
Economic Studies et al. (Sept. 2009), available at http://
www.jointcenter.org/sites/default/files/upload/research/files/
MTI_Broadband_Report_Print.pdf; Nicol Turner-Lee, The New Era of 
Broadband and Democracy: Pathways to Digital Inclusiveness, Joint 
Center for Political & Economic Studies (Aug. 2009), available at 
http://www.jointcenter.org/sites/default/files/upload/research/files/
turnerlee_0.pdf.
\3\ See, e.g., Broadband Adoption Toolkit, National 
Telecommunications & Information Administration, U.S. Dept. of Commerce 
(April 2013), available at http://www2.ntia.doc.gov/files/
toolkit_042913.pdf (highlighting dozens of successful adoption 
programs) (``Broadband Adoption Toolkit'').
    \4\ See Press Release, Ad Council & Connect2Compete Launch 
Nationwide PSA Campaign to Increase Digital Literacy for 62 Million 
Americans, March 21, 2013, Ad Council, available at http://
www.adcouncil.org/News-Events/Press-Releases/Ad-Council-
Connect2Compete-Launch-Nationwide-PSA-Campaign-to-Increase-Digital-
Literacy-for-62-Million-Americans.
    \5\ See, e.g., Universal Broadband Adoption.
    \6\ See e.g., Jon P. Gant et al., National Minority Broadband 
Adoption: Comparative Trends in Adoption, Acceptance and Use, Joint 
Center for Political & Economic Studies (March 2010), available at 
http://www.jointcenter.org/sites/default/files/upload/research/files/
MTI_BRO
ADBAND_REPORT_WEB.pdf (examining the myriad of barriers impeding more 
robust adoption in these communities (``National Minority Broadband 
Adoption''). Additoinal data nd analysis can be found in Figure 1 and 
accompanying citations.
    \7\ These barriers are derived from: National Broadband Plan; 
National Minority Broadband Adoption; Promoting Broadband Adoption 
Among Minorities, Florida Conference of Black State Legislators (Oct. 
2011), available at http://communicationsconsumersunited.com/wp-
content/uploads/2011/10/Florida-Conference-of-Black-State-Legislators-
Broadband-Adoption-paper-092010.pdf; Robert Shapiro and Kevin Hassett, 
A New Analysis of Broadband Adoptions Rates by Minority Households, 
Georgetown Center for Business and Public Policy (June 2010), available 
at http://www.sonecon.com/docs/studies/
Report_on_Broadband_Pricing_and_Minor
ities-Shapiro-Hassett-June-21-2010.pdf; Broadband Imperatives for 
African Americans: Policy Recommendations to Increase Digital Adoption 
for Minorities and Their Communities, Joint Center for Political & 
Economic Studies et al. (Sept. 2009), available at http://
www.jointcenter.org/sites/default/files/upload/research/files/
MTI_Broadband_Report_Print.pdf; Nicol Turner-Lee, The New Era of 
Broadband and Democracy: Pathways to Digital Inclusiveness, Joint 
Center for Political & Economic Studies (Aug. 2009), available at 
http://www.jointcenter.org/sites/default/files/upload/research/files/
turnerlee_0.pdf.
    \8\ See John Horrigan, Home Broadband Adoption 2008, Pew Internet & 
American Life Project (July 2008), available at http://
www.pewinternet.org//media//Files/Reports/2008/PIP_
Broadband_2008.pdf
    \9\ Id.
    \10\ Id.
    \11\ Id.
    \12\ See John Horrigan, Broadband Adoption and Use in America, at 
p. 3, FCC OBI Working Paper Series No. 1 (Feb. 2010), available at 
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-296442A1.pdf
    \13\ See Exploring the Digital Nation: Computer and Internet Use at 
Home, National Telecommunications & Information Administration, U.S. 
Dept. of Commerce (Nov. 2011), available at http://www.ntia.doc.gov/
files/ntia/publications/exploring_the_digital_nation_computer
_and_internet_use_at_home_11092011.pdf
    \14\ See Exploring the Digital Nation: America's Emerging Online 
Experience, NTIA, U.S. Dept. of Commerce (June 2013), available at 
http://www.ntia.doc.gov/files/ntia/publications/
exploring_the_digital_nation_-_americas_emerging_online_experience.pdf
    \15\ See Joanna Brenner & Lee Rainie, Pew Internet: Broadband, Pew 
Internet & American Life Project (Dec. 2012), available at http://
pewinternet.org/Commentary/2012/May/Pew-Internet-Broadband.aspx
    \16\ See Kathryn Zickuhr & Aaron Smith, Home Broadband 2013, Pew 
Internet & American Life Project (Aug. 2013), available at http://
pewinternet.org//media//Files/Reports/2013/PIP_Broadband%202013.pdf
    \17\ See Maeve Duggan., & Aaron Smith, Cell Internet Use 2013, Pew 
Internet & American Life Project (September 16, 2013, available at 
http://www.pewinternet.org/Reports/2013/Cell-Internet/Summary-of-
Findings.aspx
    \18\ Id.
    \19\ Id.
    \20\ Supra, note 16
    \21\ Id.
    \22\ See John Horrigan, Recent Tech Adoption Trends and 
Implications for the Digital Divide, Joint Center for Political and 
Economic Studies (August 2012), available at http://
www.jointcenter.org/research/recent-tech-adoption-trends-and-
implications-for-the-digital-divide,
    \23\ Id.
    \24\ Id.
    \25\ See Kathryn Zickhur, Who's Not Online and Why?, Pew Internet & 
American Life Project (Sept. 25, 2013), available at http://
www.pewinternet.org/Reports/2013/Non-internet-users.aspx
    \26\ Id.
    \27\ Id.
    \28\ Id.
    \29\ Id.
    \30\ Id.
    \31\ Id.
    \32\ See, e.g., Patrick Brogan, Updated Capital Spending Data Show 
Continued Significant Broadband Investment in Nation's Information 
Infrastructure, at p. 2, chart 1, Research Brief, U.S. Telecom (April 
2012), available at http://www.ustelecom.org/sites/default/files/
documents/042012_Investment_2011_Research_Brief.pdf (observing tens of 
billions of dollars in annual investment in network infrastructure by 
ISPs) (``Updated Capital Spending Data'').
    \33\For an overview, see National Broadband Map, Summarize: 
Nationwide, http://www.broadbandmap.gov/summarize/nationwide.
    \34\For recent data, see Measuring Broadband America, FCC (Feb. 
2013), available at http://www.fcc.gov/measuring-broadband-america/
2013/february ("Measuring Broadband America--Feb. 2013"); Measuring 
Broadband America, FCC (July 2012), available at http://www.fcc.gov/
measuring-broadbandamerica/2012/july (``Measuring Broadband America--
July 2012''); Measuring Broadband America, FCC (Aug. 2011), available 
at http://www.fcc.gov/measuring-broadband-america/2011/august. For data 
from the mid- to late-2000s, see generally Internet Access Services: 
Status as of June 30, 2010, FCC (March 2011), available at http://
hraunfoss.fcc.gov/edocs--public/attachmatch/DOC-305296A1.pdf.
    \35\ See, e.g., Shane Greenstein & Ryan C. McDevitt, Evidence of a 
Modest Price Decline in U.S. Broadband Services, National Bureau of 
Economic Research, NBER Working Paper 16166 (July 2010), available at 
http://www.nber.org/papers/w16166.pdf?new_window=1.
    \36\ See National Broadband Map, Summarize: Nationwide, http://
www.broadbandmap.gov/summarize/nationwide
    \37\ Updated Capital Spending Data.
    \38\ Id.
    \39\ See, e.g., Measuring Broadband America--Feb. 2013; Measuring 
Broadband America--July 2012.
    \40\ See generally Beloved Community (``. . . our ``digital Beloved 
Community'' envisions a future where everyone has the ability to 
participate in our digital ecosystem. It exhibits an economy that 
enables innovative individuals from culturally diverse backgrounds to 
benefit equally from the technological advancement and innovations they 
create. Like Dr. King's dream, the digital Beloved Community gains its 
strength from empowering every individual and thereby advancing the 
whole.'' Id. at p. 1.)
    \41\ See, e.g., In the Matter of Implementation of Section 
621(a)(1) of the Cable Communications Policy Act of 1984 as amended by 
the Cable Television Consumer Protection and Competition Act of 1992, 
Reply Comments of MMTC et al., MB Docket No. 05-311 (March 28, 2006), 
available at http://mmtconline.org/lp-pdf/MMTCRedliningReply101A8B.pdf 
(MMTC, along with dozens of other national civil rights and minority 
advocacy organizations, calling for protections against redlining, 
which would have had disproportionately negative impacts on communities 
of color).
    \42\ The ``historical origins'' of the debate, however, can be 
traced to the Computer Inquiries, which were launched in the 1970s and 
early 1980s to examine ``the relationship between traditional ``common 
carriers''. . . and the emerging data-processing industry.'' See 
Jonathan E. Nuechterlein And Philip J. Weiser, Digital Crossroads: 
Telecommunications Law and Policy in the Internet Age (2nd ED.) 188 
(MIT 2013) (``Digital Crossroads'').
    \43\ See, e.g., Mark A. Lemley and Lawrence Lessig, The End of End-
to-End: Preserving the Architecture of the Internet in the Broadband 
Era, 48 U.C.L.A. L. Rev. 925 (2001) (arguing in favor of open access 
policies in order to preserve the ``end-to-end'' principle, which is at 
the core of modern conceptions of ``network neutrality'' and the ``open 
Internet'') (``End of End-to-End'').
    \44\ See, e.g., Tim Wu, Network Neutrality, Broadband 
Discrimination, 2 J. on Telecomm. & High Tec. L. 141 (2003) (``Network 
Neutrality, Broadband Discrimination'').
    \45\ See, e.g., id.
    \46\ See, e.g., SavetheInternet.com, Network Neutrality 101, http:/
/www.savetheinternet.com/net-neutrality-101 (providing a list of 
hypothetical outcomes if network neutrality rules are absent from the 
marketplace) (``Network Neutrality 101'').
    \47\ See, e.g., Tim Burners-Lee, Long Live the Web: A Call for 
Continued Open Standards and Neutrality, Nov. 22, 2010, Scientific 
American, available at http://www.scientificamerican.com/
article.cfm?id=long-live-the-web&print=yes (``Although the Internet and 
Web generally thrive on lack of regulation, some basic values have to 
be legally preserved.'') (``Long Live the Web'').
    \48\ Id.
    \49\ Quotes excerpted from speech given by former FCC Chairman 
William Kennard at The Cable Show, 1999, available at http://
transition.fcc.gov/Speeches/Kennard/spwek-921.txt
    \50\ AT&T v. City of Portland, 43 F.Supp.2d 1146 (U.S.D.C. Or. 
1999), rev'd, 216 F.3d 871 (9th Cir. 2000).
    \51\ See Inquiry Concerning High-Speed Access to the Internet Over 
Cable and Other Facilities, 17 F.C.C.R 4798 (2002), aff'd, sub nom. 
Nat'l Cable & Telecomm. Ass'n v. Brand X Internet Serv., 545 U.S. 967 
(2005) (``Brand X'').
    \52\ See Appropriate Framework for Broadband Access to the Internet 
over Wireline Facilities, 20 FCC Rcd 14,853 (2005); Classification of 
Broadband Over Power Line Internet Access Service as an Information 
Service, 21 FCC Rcd 13281 (2006); In the Matter of Appropriate 
Regulatory Treatment for Broadband Access to the Internet Over Wireless 
Networks, 22 FCC Rcd 5901 (2007).
    \53\ See, e.g., Digital Crossroads at p. 40-82 (discussing this 
regulatory regime and its evolution in detail).
    \54\ See Press Release, FCC Classifies Cable Modem Service as an 
``Information Service,'' March 14, 2002, FCC, available at http://
transition.fcc.gov/Bureaus/Cable/News_Releases/2002/nrcb0201.html.
    \55\ See FCC Chairman Michael Powell, Preserving Internet Freedom: 
Guiding Principles for the Industry, at p. 2, Remarks at the Silicon 
Flatirons Symposium on ``The Digital Broadband Migration: Toward a 
Regulatory Regime for the Internet Age,'' University of Colorado School 
of Law, Boulder, Colorado, Feb, 8, 2004, available at http://
hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-243556A1.pdf.
    \56\ Id. at p. 5.
    \57\ See Appropriate Framework for Broadband Access to the Internet 
over Wireline Facilities, Policy Statement, 20 FCC Rcd 14986 (2005).
    \58\ Id. at  5, fn. 15.
    \59\ Id.
    \60\ See, e.g., Barbara A. Cherry, Maintaining Critical Rules to 
Enable Sustainable Communications Infrastructures, 24 Georg. St. U. L. 
Rev. 947 (2007) (calling for common-carrier regulation); Susan 
Crawford, Transporting Communications, 89 Boston U. L.R. 871 (2009) 
(same).
    \61\ See In the Matter of Broadband Industry Practices, Notice of 
Inquiry, at  3, WC Docket No. 07-52 (rel. April 16, 2007). It should 
be noted that the FCC in 2005 did mediate a settlement in a case 
alleging the blocking of VoIP traffic by a small ISP. See In the Matter 
of Madison River Communications LLC and Affiliated Companies, Consent 
Decree, 20 FCC Rcd 4295 (2005).
    \62\ See In the Matters of Formal Complaint of Free Press and 
Public Knowledge Against Comcast Corporation for Secretly Degrading 
Peer-to-Peer Applications and Broadband Industry Practices Petition of 
Free Press et al., for Declaratory Ruling that Degrading an Internet 
Application Violates the FCC's Internet Policy Statement and Does Not 
Meet an Exception for ``Reasonable Network Management, Petition for 
Declaratory Ruling, FCC, File No. EB-08-IH-1518 (filed Nov. 1, 2007), 
available at http://transition.fcc.gov/broadband_network_management/
fp_et_al_nn_declaratory_ruling.pdf. Comcast countered that its network 
management practices vis-a-vis BitTorrent were necessary to assure a 
reliable and consistent user experience for the vast majority of users 
who did not engage in such bandwidth-heavy uses. Indeed, a small 
handful of users engaging in such online behavior (e.g., peer-to-peer 
swapping of massive data files) have discernible impacts on the overall 
online experience for all users. At peak times, such uses can cause 
congestion, which degrades the speeds and reliability of online 
connections for all users. Over time, ISPs and others have experimented 
with a range of business models--including data caps and tiered 
pricing--to more accurately price data consumption.
    \63\ See In the Matter of Preserving the Open Internet, Notice of 
Proposed Rulemaking, at  6, GN Docket No. 09-191 (rel. Oct. 22, 2009).
    \64\ See generally id.
    \65\ Open Internet Order at  88.
    \66\ Id.
    \67\ Id. at  54.
    \68\ See, e.g., Comments of the National Organizations at p. 14.
    \69\ Open Internet Order at  77.
    \70\ Id. at  88.
    \71\ Id. at  96.
    \72\ Id. at  112-114.
    \73\ Id. at  113.
    \74\ See Preserving the Open Internet; Final Rule, 76 Fed. Reg. 
59,191-59,235 (Sept. 23, 2011), available at http://www.gpo.gov/fdsys/
pkg/FR-2011-09-23/html/2011-24259.htm.
    \75\ See, e.g., Nate Anderson, Verizon Sues to Halt FCC's Net 
Neutrality Rules, Oct. 2, 2011, Ars Technica, available at http://
arstechnica.com/tech-policy/news/2011/10/verizon-sues-to-halt-fccs-net-
neutrality-rules.ars. The case is Verizon v. FCC, No. 11-1355 (D.C. 
Cir.).
    \76\ See, e.g., John Eggerton, Court Sets Oral Argument Date for 
Network Neutrality Challenge, June 25, 2013, Multichannel News, 
available at http://www.multichannel.com/news-article/court-sets-oral-
argument-date-network-neutrality-challenge/144114 (reporting that oral 
arguments in the case are scheduled for Sept. 9, 2013).
    \77\ See Preserving the Open Internet, Report and Order, 25 FCC Rcd 
17905, at  18 (2010).
    \78\ See data analyzed in Figure 2. See supra note, 7.
    \79\ Supra, note 22.
    \80\ See Ev Ehrlich, Shaping the Digital Age: A Progressive 
Broadband Agenda (p. 24). Washington, DC: Progressive Policy Institute 
(July 2013), available at http://www.progressive
policy.org/wp-content/uploads/2013/07/07.2013-Ev-Ehrlich_Shaping-the-
Digital-Age_A-Progressive-Broad-Agenda.pdf.
    \81\ Id.
    \82\ Supra, note 35.
    \83\ See Nicholas Economides and Joacim Tag, Network Neutrality on 
the Internet: A Two-Sided Market Analysis, Information Economics and 
Policy, Vol. 24, 2012, NET Institute Working Paper No. 07-45; NYU Law 
and Economic Research paper 0-70; NYU Working Paper No 2451/26057 
(August 2012), available at SSRN: http://ssrn/cp,abstract=101921 or 
http://dx.doi.org/10.2139/ssrn.1019121
    \84\ Supra, note 34.
    \85\ See Nicol Turner-Lee, Brian Smedley and Joseph Miller, 
Minorities, Mobile Broadband and the Management of Chronic Diseases, 
Joint Center for Political and Economic Studies (April 2012), available 
at http://www.jointcenter.org/research/minorities-mobile-broadband-and-
the-management-of-chronic-diseases.
    \86\ For a discussion of additional potential harms, see generally 
Ev Ehrlich, Shaping the Digital Age: A Progressive Broadband Agenda, 
Progressive Policy Institute (July 2013), available at http://
www.progressivepolicy.org/wp-content/uploads/2013/07/07.2013-Ev-
Ehrlich_Shaping-the-Digital-Age_A-Progressive-Broad-Agenda.pdf.
    \87\ See, e.g., Austin Schlick, A Third-Way Legal Framework for 
Addressing the Comcast Dilemma, FCC (rel. May 6, 2010), available at 
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-297945A1.pdf 
(proposing a common carrier-like regulatory framework for broadband).
    \88\ See Fact Sheet: Update Of E-Rate For Broadband In Schools And 
Libraries, FCC (July 2013), available at http://transition.fcc.gov/
Daily_Releases/Daily_Business/2013/db0719/DOC-322288A1.pdf.
    \89\ For additional discussion and analysis of these and other 
impediments, see National Broadband Plan; Barriers to Broadband 
Adoption. See also Modernizing the E-rate Program for Schools and 
Libraries, Notice of Proposed Rulemaking, WC Docket No. 13-184, FCC 13-
100 (rel. July 23, 2013), available at http://transition.fcc.gov/
Daily_Releases/Daily_Business/2013/db0723/FCC-13-100A1.pdf (``E-rate 
NPRM 2013'').
    \90\ See, e.g., Valerie Strauss, U.S. High School Graduation Rates 
See Big Minority Gains--Analysis, June 6, 2013, Wash. Post, available 
at http://www.washingtonpost.com/blogs/answer-sheet/wp/2013/06/06/u-s-
high-school-graduation-rate-sees-big-minority-gains-analysis/; NAEP 
2012: Trends in Academic Progress, National Center for Education 
Statistics, U.S. Dept. of Education (June 2013), available at http://
nces.ed.gov/nationsreportcard/subject/publications/main2012/pdf/
2013456.pdf.
    \91\ For an historical overview of these data, see Enrollment rates 
of 18-to 24-year-olds in degree-granting institutions, by level of 
institution and sex and race/ethnicity of student: 1967 through 2010, 
National Center for Education Statistics, U.S. Dept. of Education, 
available at http://nces.ed.gov/programs/digest/d11/tables/
dt11_213.asp. See also Anthony P. Carnevale and Jeff Strohl, Separate & 
Unequal: How Higher Education Reinforces the Intergenerational 
Reproduction of White Racial Privilege, Georgetown University Public 
Policy Institute (July 2013), available at http://www9.georgetown.edu/
grad/gppi/hpi/cew/pdfs/Separate%26Unequal.FR.pdf (arguing that ``The 
racial and ethnic stratification in educational opportunity entrenched 
in the Nation's K-12 education system has faithfully reproduced itself 
across the full range of American colleges and universities.'' Id. at 
p. 7).
    \92\ E-rate NPRM 2013 at  1 (noting that ``there is a growing 
chorus of calls to build on the success of the E-rate program by 
modernizing the program and adopting clear forward-looking goals aimed 
at efficiently and effectively ensuring high-capacity connections to 
schools and libraries nationwide.'')
    \93\ Leveraging public-private partnerships for these purposes 
should be pursued whenever possible. See, e.g., Statement of Acting 
Chairwoman Mignon L. Clyburn, Re: Modernizing the E-rate Program for 
Schools and Libraries, WC Docket No. 13-184, available at http://
www.fcc.gov/article/doc-322284a2.
    \94\ See, e.g., National Broadband Plan at p. 246-247; The Impact 
of Broadband on Education, Report to the U.S. Chamber of Commerce (Dec. 
2010), available at http://www.uschamber.com/sites/default/files/about/
US_Chamber_Paper_on_Broadband_and_Education.pdf.
    \95\ See, e.g., CFY, Impact, http://cfy.org/impact/ (providing 
several case studies of how effective this organization's particular 
approach to using broadband to bolster learning at home, and engaging 
parents in the process, has been over the last few years).
    \96\ See, e.g., National Broadband Plan at p. 197-222 (discussing 
the impacts of broadband on healthcare).
    \97\ For additional examples and discussion, see Policy Framework 
for Empowering Women with Broadband at p. 8-14; The Impact of Broadband 
on Telemedicine, Report to the U.S. Chamber of Commerce (April 2009), 
available at http://www.nyls.edu/user_files/1/3/4/30/83/
BroadbandandTelemedicine.pdf.
    \98\ See, e.g., Joseph Conn, Report Finds Telehealth Services are 
Cost Effective, Clinically Successful, July 11, 2013, 
ModernHealthcare.com, available at http://www.modernhealthcare.com/
article/20130711/NEWS/307119951 (reporting on the results of several 
studies demonstrating the many positive impacts of telehealth programs 
in the U.S. and abroad).
    \99\ See generally CDC Health Disparities ad Inequalities Report--
United States, 2011, Morbidity and Mortality Weekly Report, Vol. 60, 
CDC (Jan. 2011), available at http://www.cdc.gov/mmwr/pdf/other/
su6001.pdf (providing a broad array of data regarding minority health 
disparities). See also U.S. Dept. of Health & Human Services, Office of 
Minority Health: African American Profile, http://
minorityhealth.hhs.gov/templates/browse.aspx?lvl=2&lvlid=51 (providing 
recent data regarding incidences of major chronic diseases among 
African Americans); U.S. Dept. of Health & Human Services, Office of 
Minority Health: Hispanic/Latino Profile, http://
minorityhealth.hhs.gov/templates/browse.aspx?lvl=2&lvlid=54 (providing 
recent data regarding incidences of major chronic diseases among 
Hispanics/Latinos).
    \100\ Id.
    \101\ For a review of recent data regarding adoption trends and the 
benefits of such robust wireless adoption among communities of color, 
see James E. Prieger, The Broadband Digital Divide and the Benefits of 
Mobile Broadband for Minorities, Pepperdine University School of Public 
Policy Working Paper No. 45 (April 2013), available at http://
digitalcommons.pepperdine.edu/cgi/
viewcontent.cgi?article=1044&context=sppworkingpapers.
    \102\ Supra, note 81.
    \103\ Policy Framework for Empowering Women with Broadband at p. 
13.
    \104\ See, e.g., Barriers to Broadband Adoption at p. 36-50 
(identifying many of these barriers).
    \105\ For additional discussion, see Medical Licensure and Practice 
Requirements, American Telemedicine Association (June 2011), available 
at http://www.americantelemed.org/docs/default-source/policy/ata-
policy-on-state-medical-licensure-and-practice-requirements.pdf.
    \106\ Barriers to Broadband Adoption at p. 36-50.
    \107\ The best recent example of this dynamic is the emergence of 
the ``app economy,'' which has generated tens of thousands of new jobs 
in just a few years. See Michael Mandel, Where the Jobs Are: The App 
Economy, TechNet (Feb. 2012), available at http://www.technet.org/wp-
content/uploads/2012/02/TechNet-App-Economy-Jobs-Study.pdf.
    \108\ See, e.g., Universal Broadband Adoption at p. 28-38.
    \109\ See, e.g., The African American Labor Force in the Recovery, 
U.S. Dept. of Labor (Feb. 2012), available at http://www.dol.gov/_sec/
media/reports/BlackLaborForce/BlackLabor
Force.pdf (analyzing employment trends among African Americans and 
comparing them to those of Hispanics and Whites).
    \110\ See Rakesh Kochhar et al., Wealth Gap Rises to Record Highs 
Between Whites, Blacks, Hispanics, at p. 1, Pew Research Center (July 
2011), available at http://www.pewsocialtrends.org/files/2011/07/SDT-
Wealth-Report_7-26-11_FINAL.pdf.
    \111\ See, e.g., Alicia Robb, Access to Capital Among Young Firms, 
Minority-owned Firms, Women-owned Firms, and High-tech Firms, Report to 
the Small Business Administration Office of Advocacy (April 2013), 
available at http://www.sba.gov/sites/default/files/files/rs403tot%
282%29.pdf.
    \112\ See, e.g., David Honig, Digital Literacy Beyond Social Media, 
July 10, 2012, Huffington Post, available at http://
www.huffingtonpost.com/david-honig/digital-literacy-beyond-s_b_
1662456.html.
    \113\ See Dorrissa Griffin and Kristal Lauren High, Minorities and 
High Tech Employment, at p. 3, MMTC (July 2011), available at http://
mmtconline.org/lp-pdf/Jobs%20Report%20%20
Minorities%20&%20High%20Tech%20Employment.pdf (``Minorities and High 
Tech Employment'').
    \114\ See generally id. (providing a comprehensive analysis of 
these various impediments and offering an array of recommendations for 
overcoming them).
    \115\ See, e.g., Dan Nakaso, Asian Workers Now Dominate Silicon 
Valley Tech Jobs, Nov. 30, 2012, San Jose Mercury News, available at 
http://www.mercurynews.com/business/ci_22094415/asian-workers-now-
dominate-silicon-valley-tech-jobs (reporting that, between 2000 and 
2010, ``African-American and Hispanic tech workers each saw slight 
decreases: Positions held by African-American tech workers fell from 
2.8 percent to 2.3 percent; those held by Hispanic workers dropped from 
4.6 percent to 4.2 percent.'') This dynamic is not confined to Silicon 
Valley. Indeed, it is observable across the Nation's high tech 
workforce. See Minorities and High Tech Employment at p. 6.
    \116\ Minorities and High Tech Employment at p. 22-23 (discussing 
how factors like isolation and stereotyping contribute to this 
dynamic).
    \117\ See, e.g., Eric Lipton and Somini Sengupta, Latest Product 
From Tech Firms: An Immigration Bill, May 5, 2013, N.Y. Times, 
available at http://www.nytimes.com/2013/05/05/us/politics/tech-firms-
take-lead-in-lobbying-on-immigration.html?ref=todayspaper&_r=1&.
    \118\ See, e.g., The White House, Educate to Innovate, http://
www.whitehouse.gov/issues/education/k-12/educate-innovate.
    \119\ Minorities and High Tech Employment at p. 27-33 (discussing 
these and other recommendations in depth).
    \120\ See, e.g., David Honig, STEM Jobs are the Future, But What 
Role Will Minorities Play?, Dec. 14, 2011, Broadband & Social Justice 
Blog, available at http://broadbandandsocial
justice.org/2011/12/stem-jobs-are-the-future-but-what-role-will-
minorities-play/.
    \121\ See Scott Mackey, Wireless Taxes and Fees Continue Growth 
Trend, at p. 321, Tax Analysts Special Report, State Tax Notes, Oct. 
29, 2012, available at http://www.ksefocus.com/wordpress-content/
uploads/2012/11/mackey-state-tax-notes.pdf. Nebraska has the highest 
combined wireless tax burden in the country; Oregon--at 7.67 percent--
has the lowest.
    \122\ Id.
    \123\ See, e.g., id. at p. 329.
    \124\ See Nicol Turner-Lee et al., The Social Cost of Wireless 
Taxation: Wireless Taxation and its Consequences for Minorities and the 
Poor, at p. 9, Joint Center for Political & Economic Studies (Nov. 
2011), available at http://www.jointcenter.org/sites/default/files/
upload/research/files/
The%20Social%20Cost%20of%20Wireless%20Taxation.pdf (``The Social Cost 
of Wireless Taxation'').
    \125\ See, e.g., Sharon Weston Broome, Press Statement: 
Comprehensive Reform of Wireless Taxation Needed Now, National 
Organization of Black Elected Legislative Women (2011), available at 
http://files.ctia.org/pdf/
NOBEL_Nobel_Women_Press_Statement_on_Wireless_Taxa
tion.pdf.
    \126\ The FCC is already engaged in many of these activities as 
part of its comprehensive overhaul of the Universal Service Fund and 
the intercarrier compensation framework. However, litigation and other 
roadblocks are impeding the swift resolution of many of these issues.
    \127\ See, e.g., H.R. 2309--Wireless Tax Fairness Act of 2013, 
http://beta.congress.gov/bill/113th-congress/house-bill/2309.
    \128\ The Social Cost of Wireless Taxation at p. 11.
    \129\ See Preserving the Open Internet, Report and Order, 25 FCC 
Rcd 17905, at  12 (2010) (describing its open Internet rules as 
``prophylactic'') (``Open Internet Order'').

    The Chairman. Thank you, Dr. Turner-Lee. We have a lot of 
participation here today from Senators, so I am going to 
confine us to 5-minute rounds and run a pretty tight gavel on 
that. So, if somebody is answering a question we will not 
interrupt you, but try if you can to adhere to that.
    Mr. Simmons, would subjecting broadband services to Title 
II regulations make it more or less costly for Midco to offer 
and expand broadband services, and would it make it more or 
less costly for Midco's subscribers to purchase broadband 
services?
    Mr. Simmons. Senator, thank you. I believe it would 
increase our cost of operation. If we were to adhere or respond 
to all the requirements of Title II, it would place a great 
burden on us in just the reporting structures alone. And some 
of the unintended consequences perhaps buried within all that 
that may not be obvious to some, but our cost of operation for 
pole attachments, for instance. We would be now paying a 
substantially higher fee than we would under the classification 
as an information service.
    And for us in our very rural areas, it is very significant. 
There are a lot of miles of wide open prairies from small town 
to small town that we have to interconnect, so I am going to 
guess that our costs would probably be a whole lot higher than 
it might be in a more densely populated area. There are some 
parts of our country where we cannot even go underground. It 
must be all above ground. I am talking specifically of the 
Black Hills of South Dakota, for example. Hard for us to tunnel 
through granite. So it would increase our costs there, and 
those costs ultimately would be passed onto our customers.
    The real burden for us other than increasing costs, which 
we never want to do unnecessarily to any of our customers, is 
that we would have to explain to them how their costs were 
going up with no appreciable increase in value to them. We 
might get away for a short time by saying it is the government 
and we cannot do anything about it, but it tends to reduce the 
level of trust that they might have in us. And we are very, 
very sensitive to our customers' demands, and we work very hard 
to satisfy them, not only in the quality of services that we 
are also provide, but also in the price that we expect them to 
pay for it. So, Senator, it would have a great impact on our 
company.
    The Chairman. Thank you. Mr. McDowell, following potential 
Title II reclassification, and with Section 706 authority at 
its disposal, what would be the limits of the FCC's authority 
to regulate broadband Internet service or the entire Internet 
for that matter?
    Commissioner McDowell. Under Title II?
    The Chairman. Under Title II reclassification and Section 
706.
    Commissioner McDowell. So Section 706, according to the 
D.C. Circuit a year ago almost exactly would allow the 
Commission to adopt rules that accomplish all the ostensible 
goals outlined by Chairman Wheeler and President Obama on 
November the 10th.
    The Chairman. Mr. Misener, in your testimony, you stated 
that Amazon, and I quote, ``certainly does not support allowing 
an agency to act beyond its statutory authority.'' Do you agree 
with Mr. McDowell, and, if so, do you support Congress 
establishing limits on the FCC's authority?
    Mr. Misener. Well, certainly it is Congress's prerogative, 
Senator, to establish those limits, and we would support 
Congress pursuing that avenue. Of course there is an existing 
statute under which the FCC may and should operate, and 
Chairman Wheeler should be applauded for the work he has done 
with his existing statute. But if there were additional 
statutory direction given by Congress, we certainly would 
welcome that.
    The Chairman. As a follow-up to that, the Internet 
Association, which lobbies on Amazon's behalf, recently sent a 
letter to the FCC stating that just three of Title II's 48 
sections appear adequate to meet open Internet goals, namely 
Sections 201, 202, and 208. Would you support--as a follow-up 
to the previous question, Congress prohibiting the FCC from 
applying the 45 unnecessary sections of Title II to the 
Internet, including retail rate regulation?
    Mr. Misener. Senator, you raise a terrific point. Title II 
is not binary. My friend Mr. McDowell has talked about the 
harms that Title II could create and I share his view. And so, 
we do believe that Title--sorry--Sections 201, 202, and 208 
would be adequate to protect net neutrality, which has been our 
focus both at Amazon and the Internet Association.
    The Chairman. Mr. Kimmelman, if the FCC intends with its 
forthcoming rules to forbear from all those parts of Title II 
that are ``less relevant to broadband services,'' as the 
President has said in his advocating efforts, would you support 
Congress statutorily prohibiting the FCC from applying those 
parts of Title II to broadband services in the future?
    Mr. Kimmelman. Mr. Chairman, I think it depends exactly on 
what you are talking about. I think of 48 sections, there are 
only a handful that could be relevant as far as I can imagine 
looking forward or looking at it today. It is more than Mr. 
Misener's three, but not a lot more.
    I think the real question is, is it appropriate at this 
time in looking at it to just wipe those out completely for the 
future? If it is something that is a reporting requirement like 
Mr. Simmons is talking about, it may have nothing to do with 
what we care about in broadband. But if it matters to promoting 
build out, if it matters to making the service affordable, if 
it matters to basic privacy protections, if it matters to 
promoting more competition so that we get multiple carriers, I 
would hope you would want to preserve that authority somewhere 
in the expert agency so they could adjust to technology and 
market conditions.
    The Chairman. My time has expired. Senator Nelson?
    Senator Nelson. Thank you, Mr. Chairman. Ms. Baker, I have 
a letter from one of your largest member companies, from 
Sprint. And, Mr. Chairman, I would ask consent that it be 
entered as part of the record.
    The Chairman. Without objection.
    [The information referred to follows:]

                                                     Sprint
                                                   January 15, 2015
Hon. Thomas Wheeler,
Chairman,
Federal Communications Commission,
Washington, DC.

Re: In the Matter of Protecting and Promoting the Open Internet, 
            GN Docket No. 14-28.

Dear Chairman Wheeler:

    Over the past several weeks, public interest groups, mobile and 
wireline carriers, industry associations, and government entities have 
debated heatedly the appropriate legal basis for the authorization of 
net neutrality rules. The debate has focused on whether data services 
should be governed by Title II or Section 706 of the Communications 
Act. Regardless of the legal grounds proposed, Sprint has emphasized 
repeatedly that net neutrality rules must give mobile carriers the 
flexibility to manage our networks and to differentiate our services in 
the market. With that said, Sprint does not believe that a light touch 
application of Title II, including appropriate forbearance, would harm 
the continued investment in, and deployment of, mobile broadband 
services.
    When first launched, the mobile market was a licensed duopoly. This 
system was a failure, resulting in slow deployment, high prices and 
little innovation. In 1993, Congress revised the Telecommunications Act 
to allow new carriers, including Sprint, to enter the market. This 
competition resulted in tremendous investment in the wireless industry, 
broader deployment, greater innovation, and falling prices. It is 
absolutely true that this explosion of growth occurred under a light 
touch regulatory regime. Some net neutrality debaters appear to have 
forgotten, however, that this light touch regulatory regime emanated 
from Title II common carriage regulation, including Sections 201, 202 
and 208 of the Communications Act.
    With the deployment ofiS95 data services in 1999, Sprint was one of 
the first wireless carriers in the United States to deploy mobile data 
service on a national scale. Sprint went on to upgrade these data 
services to IS-2000 lxRTT in 2002, lxEVDO Rev 0 in 2004, and lxEVDO Rev 
A in 2006. Sprint made these investments despite the fact that the FCC 
had not yet declared mobile broadband to be an information service. 
Sprint and other wireless carriers have continued to invest in the 
advancement of mobile data services with the deployment of LTE 
networks. So long as the FCC continues to allow wireless carriers to 
manage our networks and differentiate our products, Sprint will 
continue to invest in data networks regardless of whether they are 
regulated by Title II, Section 706, or some other light touch 
regulatory regime.
    Sprint has always believed that competition, not regulation, will 
provide consumers the best mobile services at the lowest price. We urge 
the FCC and Congress not to be distracted by debates over Title II but 
to focus on competition by ensuring that any net neutrality regulations 
adopted recognize the unique network management challenges faced by 
mobile carriers and the need to allow mobile carriers the flexibility 
to design products and services to differentiate ourselves in the 
market.
            Sincerely,
                                               Stephen Bye,
                                          Chief Technology Officer.
Cc: Commissioner Clyburn
Commissioner Rosenworcel
Commissioner Pai
Commissioner O'Reilly

    Senator Nelson. And I quote from the first paragraph, 
``Sprint does not believe that a light touch application of 
Title II, including appropriate forbearance, would harm the 
continued investment in and deployment of mobile broadband 
services.'' How does that square, Ms. Baker, with your 
testimony?
    Commissioner Baker. Thank you, Senator. So what we know is 
that the current framework is working. In the past four years, 
we have invested $121 billion in infrastructure. We will still 
invest. There is no doubt about that, because if you--in this 
industry if you miss an innovation cycle, you risk being 
obsolete. The question is how much.
    Mobile broadband has never been under Title II, so it is an 
unknown. I would bring to your attention what happened in 
Europe. Europe was the leader in 3G, and then they over 
regulated. And between 2011 and 2014, in the United States, we 
had 73 percent more investment in CapX. Our networks are 30 
times faster than in Europe, and we have three times more 
subscribers in LTE, so it is a real world comparison. But it is 
clear that if there is more regulation, there is less 
investment.
    I would call attention to a second filing that Sprint made 
last week. The first one received an awful lot of attention. 
The second was talking about how mobile is different and needs 
to be regulated differently, and it is both not only the 
technical components, but also the competitive marketplace of 
the mobile ecosystem.
    Senator Nelson. You do not disagree with the position taken 
by Sprint in the letter.
    Commissioner Baker. Investment will happen. The question is 
how much.
    Senator Nelson. OK. Well, let me ask you about this. 
Several senior executives from several of your companies have 
told Wall Street that reclassification would have no impact on 
network investment. Can you reconcile those statements?
    Commissioner Baker. Well, mobile broadband has never been 
under Title II. And when Congress deregulated wireless in 1993, 
it was very clear in the language that it used. It decided that 
mobile voice was a CMRS, and it put it in one bucket, and it 
said it was going to use limited Title II requirements. And it 
put mobile broadband under PMRS, and it said--Congress 
explicitly said that it was exempt from Title II requirements. 
So the FCC cannot just disregard what Congress told them what 
they had to do and reclassify as a Title II requirement.
    Senator Nelson. Mr. Kimmelman, do you want to comment?
    Mr. Kimmelman. Thank you, Senator Nelson. I respectfully 
disagree with Ms. Baker's legal analysis. I think Congress left 
that authority to the FCC, and I think it is within the FCC's 
authority to do that. And I would just point out, the logic of 
this is real simple. You all have one of these probably.
    If you pick it up and make a phone call, it is under 
general, non-discrimination requirements as defined by the law. 
Now, if you want to go and look for a map, or you are looking 
for a restaurant, or you are editing a document, is that 
private service as compared to a commercial service? That is 
what the FCC is grappling with. We believe they have the 
authority to do it under the authority that you had given them. 
And logically, it makes no sense to differentiate those at this 
point in time.
    Commissioner Baker. And can I respond to that?
    Commissioner McDowell. And can I respond to that, too, 
please?
    Commissioner Baker. The way that Congress described it 
actually was very specific, and it said if it touched the PSTN, 
the public network--the telephone network system, then it 
would, in fact, be new future broadband services. So it is very 
clear how Congress defined what future mobile services would 
be. And just because you can watch a broadcast on your 
telephone does not make a broadcast a broadcaster--a telephone 
broadcaster just because you can make a payment on a phone.
    You do not define it by the services that ride upon it. You 
define it by what the service is.
    Commissioner McDowell. And the FCC agreed in the data 
roaming order in 2011.
    Senator Nelson. So what was wildly successful with regard 
to the wireless industry, are you saying that that cannot be 
applied to broadband, the regulatory approach?
    Commissioner Baker. The regulatory wireless----
    Senator Nelson. Why could that same model not work for 
broadband?
    Commissioner Baker. Congress set the regulatory regime. The 
FCC cannot decide what they want to do with it. The Congress 
has set out what the regulatory regime is for wireless, and I 
appreciate that you think it is wildly successful. We do, too, 
and we just want to make sure that it stays that way. The 
regulatory split is for mobile voice one way and for new 
services, such as mobile broadband another way.
    Senator Nelson. Mr. Kimmelman?
    Mr. Kimmelman. What is wildly successful has been the 
wireless industry overall, which includes the portion that Ms. 
Baker indicated is subject to broader non-discrimination 
requirements. So I believe it is a matter of what is logical 
and what does the FCC have the authority to do. We clearly 
disagree on the legal issue, but I think as a policy matter, do 
you want to treat the broadband portion of your wireless 
service than your just plain old phone calling on the wireless? 
It does not make sense to me.
    Senator Nelson. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Nelson. I have in this 
order Senators Blunt, Klobuchar, Moran, and then Markey. 
Senator Blunt?

                 STATEMENT OF HON. ROY BLUNT, 
                   U.S. SENATOR FROM MISSOURI

    Senator Blunt. Thank you, Chairman. So on that same line, 
Mr. McDowell, a number of times in 2003, 2005, and 2007, the 
FCC said that it did not have the authority to regulate this 
because it classified broadband as an information service. Is 
that correct?
    Commissioner McDowell. It did not say it did not have the 
authority in certain technologies. For instance, DSL could--
perhaps the Supreme Court said in 2005 in Brand X it could have 
at that point. But things have changed. So wireless is 
different. Section 332, as my former colleague, Commissioner 
Baker, just pointed out, is very clear actually, and it is what 
Congress did in 1993, I believe.
    So Congress has spoken. The FCC cannot legislate on this 
point, only Congress can. And that is why it is very 
appropriate for this committee to be considering legislation.
    Senator Blunt. And, Ms. Baker, your point was that since 
Congress has said broadband is an information service, using it 
through wireless technology way does not change the definition 
of the service?
    Commissioner Baker. Correct.
    Senator Blunt. And when Congress said that, was that 
specifically intended to define whether Title II----
    Commissioner Baker. It was----
    Senator Blunt.--would apply or not?
    Commissioner Baker. Sorry. I am sorry, Senator. It was with 
the emergence of the wireless industry, and I said the voice 
looks like voice and has PTSN. And whatever new services, we 
want to make sure that they flourish and are successful, which 
I think--I think Congress got it right. Mobile broadband has 
been extremely successful, and I think we look forward to the 
next success in a connected life of mobile health, and 
connected cards, and mobile payments.
    Senator Blunt. In your testimony, did you mention the 
amount of investment?
    Commissioner Baker. The wireless industry has invested $121 
billion over the last years, so I think the system is clearly 
working. We are the leader in the world by any metric basically 
almost, and we want--we want to take our leadership in 4G and 
make sure that we lead in the next generation of networks, 5G.
    Senator Blunt. You served on the FCC. Was there ever a 
complaint at the time--a formal complaint filed since the 
adoption of the 2010 open rule?
    Commissioner Baker. No.
    Senator Blunt. And you Mr. McDowell?
    Commissioner McDowell. No, there were not. No, ever.
    Senator Blunt. So I know that Senator Nelson said that we 
should not wear out the idea of a solution in search of a 
problem, but if there is no complaint, what are we trying to 
solve here?
    Commissioner McDowell. I think we are here, Senator, 
because the FCC is proposing Title II, and that is so toxic to 
the Internet ecosphere, not just network operators like 
wireless companies, or cable companies, or phone companies, but 
content and application providers that have their own networks, 
their own fiber, thousands of miles of fiber and routers, 
caching content and intelligence close to end users so 
consumers can get that data, that content more quickly.
    They, according to the Supreme Court, which I quoted in my 
testimony, could be captured by Title II classification. That 
is what I think they do not understand. And the proponents of 
net neutrality, as my friend Gene pointed out, they want more 
than 201 and 202. They want other aspects of Title II in there, 
and I think that's what this is all about.
    So if the ostensible goals, if the real goals as they have 
been promoted for 10 years, and I was at the Commission for 
seven of those 10 years, if they really want to protect 
consumers, then what this committee could do, what Congress 
could do is restate some existing law, like the Federal Trade 
Commission Act essentially, and essentially give the FCC some 
enforcement powers there. But also classifying broadband 
Internet access as a Title II telecom service takes away the 
Federal Trade Commission's authority under the common carrier 
exemption.
    So there are a lot of unintended consequences here, and it 
would be bad, I think, for the entire Internet sector, anyone 
with fiber, or servers, or wireless connectivity, whether they 
think they are a tech company or not, could be captured by 
this.
    Senator Blunt. And, Mr. Kimmelman, you have appeared before 
the Committee many times, a good friend of the Committee, and 
always willing to come in and talk to us. But if, as you 
suggested, things have changed dramatically in the last few 
years, why would the Congress not deal with that specifically 
rather than to leave it up to the current FCC, and a future FCC 
with different commissioners? I assume whatever this FCC does, 
if it survives the legal challenge, and we all believe there 
would be one, then the next FCC would have the ability to do 
just exactly the opposite. Why would we not want to make that a 
more firm-founded future?
    Mr. Kimmelman. I think it is an appropriate goal, Senator 
Blunt, to aspire to that. I have lived through many FCCs that 
have changed course. I lived through much litigation around the 
FCC and, in all honesty, around congressional legislation in 
this area. And a lot of that litigation is around things on the 
margin or things about a definition, things that are within a 
range, within a framework. It is not like black or white. And 
as you say, because it is so fast moving, because it is so 
dynamic, it is very difficult for Congress to pinpoint 
precisely not just what needs to happen today, but next year 
and the following year.
    So I think it is totally appropriate for Congress to look 
at this, and I urge you to do so. But one suggestion I would 
have is if you want to legislate, maybe we can get away from 
this discussion of is it Title II, is it Title I, is it Title 
VI, or 706, and think about with your principles what powers--
what goals do you want to establish, what policies do you want 
to establish, and then what tools do you want experts at an 
agency to be grappling with on a day-to-day basis. I think if 
we approached it that way, you would find much less 
disagreement than what is apparent on some of these 
discussions.
    Senator Blunt. Thank you, Mr. Chairman.
    The Chairman. Thank you. Senator Klobuchar?

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

    Senator Klobuchar. Thank you very much, Chairman Thune. 
Congratulations on your new chairmanship, and congratulations 
to Senator Nelson. Thank you all for being here.
    The open nature of the Internet has certainly allowed it to 
quickly become an essential tool for economic development. We 
have certainly seen it in my state, and with more than four 
million comments received by the FCC on the proposed net 
neutrality rules, it is clear that Americans truly recognize 
the impact of these decisions.
    As you probably know, I chaired the Judiciary Antitrust 
Committee and now will be the Ranking Member with Senator Lee. 
And I have a strong interest in ensuring robust competition for 
all users of the Internet, so I thought I would start with 
that, my other hat with antitrust, Mr. Kimmelman.
    And we have heard some claims that antitrust laws can 
readily address any effort by Internet providers to use their 
market power to put any limitations on the open Internet, and I 
do not think the antitrust laws quite fit to take care of 
everything. And do you think they are sufficient to address 
that, and can you expend on your views of the FCC's role in net 
neutrality versus the FTC's role?
    Mr. Kimmelman. Thank you, Senator. I think antitrust is 
essential, but it is not sufficient to deal with issues in this 
area. Remember antitrust is a very targeted statute. The 
Sherman Act and the Clayton Acts have you in Congress telling 
the agencies to prevent a reduction in competition and to 
protect--prevent efforts to monopolize. It is not about 
promoting competition. That is what you put in the 
Communications Act. It is not about preventing all 
discrimination that is unreasonable. It is about getting at it 
when it is blocking entry, or when it is cartel type behavior, 
or when it is actually allowing for a dominant firm to expand 
its dominance. So it can get at a few things, but not 
everything, even in the competition realm.
    And then beyond competition, as Dr. Turner-Lee says, there 
are a lot of other values at stake here. This is about 
opportunities and equity across our society. That is something 
the antitrust laws only address through trying to promote 
consumer welfare. It does not address the other attributes. So 
I think the FCC plays a critical role. Title II is a portion of 
it, the principles and the rulemaking authority. 706 as a 
mandate was offering an ability to extend broadband and 
possibly even expand it, as Dr. Turner-Lee said, to low income 
customers. I think that could be extremely valuable as we move 
forward and make it affordable for everybody. So it is the 
combination of the tools I think that is so critical.
    Senator Klobuchar. OK. Anyone else want to comment on that?
    Commissioner McDowell. If I could.
    Senator Klobuchar. Yes?
    Commissioner McDowell. So actually Gene outlined a terrific 
explanation of antitrust law, but there is also the Federal 
Communications Commission and consumer protection law, Section 
5, and that is also very useful and applicable here.
    Senator Klobuchar. Very good. Thank you. Mr. Simmons, thank 
you for being here today and for the services that Midcontinent 
provides in Minnesota.
    Mr. Simmons. Thank you.
    Senator Klobuchar. And could you expand on what you hear 
from your customers when it comes to expectations for a free 
and open Internet?
    Mr. Simmons. Senator, thank you. I think, you know, when 
the debate began, especially the call to arms with the request 
for information coming from the public, we did, in fact, hear 
from a goodly number of our customers who were all in favor of 
regulations, keeping the Internet open, even proposing Title 
II. When I visited with a number of them, they had actually no 
idea what Title II was. In fact, Title II equals open Internet. 
Yes, we are for that. Let us send a letter.
    When we started describing what Title II really involves, 
and, by the way, we could send out a couple hundred pages of 
documentation and start understanding all the components of 
that, even after reading the text of all those things, which 
might, in fact, be imposed upon us, even then unless you have 
actually experienced what that really means in practicality, it 
is difficult to understand.
    You cannot really imagine what it is like putting together 
rate and tariff sheets and submissions to the FCC, and never 
mind state regulation with all this, until you have had to put 
those sheets together and understand how involved it really 
was. So after we explained what it was really about and that 
there might, in fact, be additional costs that would come down 
on our customers, their favoritism toward Title II diminished 
rather quickly.
    Senator Klobuchar. OK. One last question here. If Congress 
decides to create a new broadband-focused statute or title, 
what will happen to the Universal Service Fund if Section 254, 
which currently governs universal service, is omitted from any 
such legislation governing broadband? How do you think that 
affects things like the high cost and e-rate that are just now 
being re-oriented for broadband?
    Mr. Kimmelman. Well, Senator, as drafted, I think it would 
be very difficult to expand and continue what the FCC has been 
doing to promote investment in broadband in high-cost rural 
areas. And it would definitely be impossible to allow just a 
broadband low income service for lifeline. Now, that may not be 
the intent, but as drafted, that is the way it reads.
    Senator Klobuchar. OK. So it is something we have to work 
on. I am going to just put these questions on the record so I 
can turn it over to my colleague with the vote. But I do have 
some questions--I have raised this before--on call completion 
problems really plaguing rural areas, and a lot of the ISP-to-
ISP. And I can put it all in writing so we do not have to talk 
about it now. Thank you very much, everyone.
    The Chairman. Thank you, Senator Klobuchar. Senator Moran?

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

    Senator Moran. Mr. Chairman, thank you. Mr. Simmons, you 
probably come as close to a typical carrier in a state like 
mine as well in Kansas. And I wanted to hear from you the 
difficulties you face in deployment of broadband today and how 
either this legislation or the potential consequences of the 
FCC decision would affect your ability to deploy broadband, 
particularly in rural America.
    Mr. Simmons. Senator, it is difficult for us to be able 
provide services to all those who really require it or need it. 
There are some areas in our service area where it is just 
physically economically unfeasible for a private risk company 
to answer those particular needs. We are always encouraged with 
a new program, whether it be stimulus, or whether it be an RUS 
program, that those dollars would be allocated specifically 
toward those who are unserved. We have not accomplished that 
goal quite yet.
    In too many cases our markets are over-built with maybe a 
little bit of new service to some areas out there. And I guess 
we have come to expect that, which is why even in our small 
communities we have open competition from other providers who 
are doing pretty much what we do. But there is a concern within 
Title II with all of this, and I guess it would raise some 
questions on the part of the financial community. You know, I 
know that some who have it, it will not impact their plans for 
investment, and maybe they are a very large publicly traded 
company that has easier access to cash than we do, but we have 
to rely on our relationships with private bankers. We need to 
go out and borrow money from them. We have borrowed money in 
order to expand our networks even today.
    Our concern is that their willingness to lend money, to 
take on that risk, is substantial today, but with the 
uncertainty of all this, it may become even more substantial. 
They may, in fact----
    Senator Moran. When you say ``the uncertainty of all 
this,'' ``all this'' is defined as what?
    Mr. Simmons. What Title II really means, the applications 
of Title II. And frankly it has not been helpful to have even 
the speculation about Title II actually becoming the rules 
under which we will be regulated. So it does represent a 
concern. And even our banking partners with all this would take 
a look at it, and maybe it would cost us more money on the 
interest rates that are charged today if, in fact, that degree 
of uncertainty continues. So it is of great concern for us.
    Senator Moran. Thank you. Mr. McDowell or maybe Mr. 
Misener, another area of interest in addition to rural for me 
is innovation. How do we make certain that the next 
entrepreneur with a great opportunity for success because of 
the Internet is not hindered in the regulatory environment? And 
it seems to me there are couple of ways you could look at this, 
that certainty is certainly important, but additional costs 
related to regulation. I want to make certain that that person 
who goes to their basement or their garage in the back of their 
office and has this idea has a better chance of success. And it 
seems to me clearly how we ``regulate the Internet'' has a 
consequence. Mr. McDowell?
    Commissioner McDowell. So I will be quick so Paul has time 
for that, too, because he is a great expert on this and an old 
friend. But anyway, so I think it is important for folks to 
understand, the Internet as we know it today, the entire 
ecosphere, the so-called edge of the core, grew up under 
existing law, and it has blossomed beautifully. It is one of 
the greatest economic creations by human beings ever. So I 
think that is important for folks to understand.
    So why? We need to learn from those lessons because it was 
relatively unregulated. This came about seven and a half years 
ago, the mobile Internet, and that has exploded beautifully 
across the globe. So going forward, I think the Title II cloud 
creates a lot of questions, as Mr. Simmons pointed out.
    But also as Gene Kimmelman has pointed out, there are those 
who want to bring other aspects of Title II, other than just 
201 and 202 there. So once you plant that seed, once you 
classify information services, the Supreme Court has said the 
rest of the tech economy is going to come in with it, and that 
is going to cause all of the doubts that Mr. Simmons just 
eloquently pointed out.
    Mr. Misener. That was brief. Thank you, Mr. McDowell, and 
thank you, Senator. I think they are answerable in the same 
area; that is to say, innovation investment in both cases. I do 
not think anybody can credibly argue that they need to block 
consumer access to Internet content in order to invest. They do 
not need throttle to invest. They do not need to fail to 
disclose their practices in order to invest.
    And so, the reasonable net neutrality kinds of provisions 
adopted in this discussion draft already are kinds of things 
that are not going to harm investments. And it is not just 
credible to say that, you know, the inability to block customer 
or consumer access to information is necessary for investment.
    Senator Moran. Thank you. Thank you, Mr. Chairman.
    The Chairman. All right. We have got the first vote on, so 
we are going to go--we will go Senator Markey, Senator Heller, 
probably break, go down and vote, and then we will just have to 
play it by ear after that. But we will try and get back as 
quickly as possible to give other members that want to ask 
questions an opportunity to do so. Senator Markey?

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

    Senator Markey. Congratulations, Mr. Chairman, Senator 
Nelson. The dawn of a new era. It is great. Congratulations.
    You know, the fact is that we have a device like this, but 
we had to pass laws to make it possible because, believe me, 
AT&T, there were two companies, two licenses. It was analog 
that cost 50 cents a minute. You did not own one of these 
things in 1994, believe me. You had to change the laws to have 
the third, fourth, fifth, sixth, seventh company get in. The 
government had to say let them in. OK. So we did that, the 
government.
    So all these things all come from policies that we created. 
I was there. I was Chairman over in the House of the 
Telecommunications Committee. This stuff did not exist. So we 
need policy. We have got to say how much competition do we 
want? How much will consumers benefit from it? How much more 
investment will go in if more companies can get in? That is 
always the test.
    And so, let us just go to 2013. 2013 in America, 62 percent 
of all venture capital in America in 2013 went to software 
companies and Internet companies, the new companies, companies 
whose names you do not know. Sixty-two percent of all venture 
capital in America. Why? Because they believe that they have 
access to an open Internet. They are the Google, eBay, Amazons 
of this era because without the laws in the nineties, you do 
not have Mr. Misener sitting here. He is not famous.
    You have got to open it up. The big companies do not 
innovate that way. They innovate in the pipeline, but they do 
not innovate in new products and new services. They just do not 
do that. So that is our big challenge here, and that is why 
companies like Dwolla, Etsy, all the coolest companies of 
today, companies that are the Googles and eBays of today, they 
want Title II. They want protection. They want to be able to go 
to the venture capital market and get the capital because they 
can say, we do not have to worry that we are going to have 
access to our customers.
    That is what this is all about, creating that open, 
entrepreneurial, chaotic, paranoia-inducing, Darwinian 
marketplace. That is what we have in America. We have to 
protect it. We have to protect it, and we have to protect 
everyone else as well. So you agree, Mr. Kimmelman, that 
Dwolla, Etsy, all those companies, hundreds of them, are in 
jeopardy if we do not give them the full Title II protection. 
Do you agree with that?
    Mr. Kimmelman. I agree completely. I think they are 
counting on that, and they are counting on the predictability 
of there not being discriminatory practices and a meaningful 
enforcement mechanism. And that is what draws capital to them. 
That is what makes them invest.
    Senator Markey. Let us go to universal service. Will the 
draft before us today guarantee a protection of universal 
service for all Americans?
    Mr. Kimmelman. Senator, only if you are looking at old-
fashioned telephone service. I think if you are looking for 
investment in broadband and you are looking for making it more 
affordable, as drafted it does not reach that.
    Senator Markey. How about senior citizens' protections? 
Would that be protected?
    Mr. Kimmelman. Not for broadband, Senator.
    Senator Markey. How about guaranteeing that rural America 
is served? Would that be guaranteed?
    Mr. Kimmelman. Not for broadband as I read it, Senator 
Markey.
    Senator Markey. How about accessibility for the deaf and 
the blind? I am the author of almost every telecommunications 
law mandating accessibility for the deaf and the blind in 
America. And, by the way, all these devices are now accessible 
because of that. Would that be protected? Could that be 
advanced?
    Mr. Kimmelman. No, Senator, only for telephone service, not 
broadband.
    Senator Markey. OK, thank you. Now, let us go to privacy on 
the Internet. Would privacy be protected? Would there be--under 
this formulation, would the FCC be able to move in order to 
protect the privacy of Americans?
    Mr. Kimmelman. Senator, as I read it, the customer 
proprietary network information protections are all in Title 
II. They are for telecommunication service, so not broadband 
unless it is considered a telecommunications service.
    Senator Markey. Thank you. And so, we have got all of these 
things that are there that right now everyone is used to, 
everybody believes is going to be a part of the future. But if 
we do not move to Title II, we do not get them, and under the 
draft that we have right now, they are not there. And so, this 
is a big debate that we have to have in our country, especially 
when the chief financial officer of Verizon--Verizon says that 
it will not affect their investment strategy at all if Title II 
is used. That is Verizon.
    But it will affect Dwolla, Etsy, hundreds of smaller 
companies who are the innovative companies. They are the ones 
that change. They are the ones that are branded ``Made in 
America.'' Today we are Google, and Hulu, and YouTube, but 
there is a whole new generation coming up 10 years from now 
whose names we are going to know only if we keep it open and 
they can reach the capital markets, and then reach customers on 
a non-discriminatory basis.
    And so, that is a huge challenge for us here on the 
Committee, to get it right, Mr. Chairman, to make sure that 
this free flow of capital that is now going out of the venture 
capital firms into the software or Internet companies is not 
inhibited; that we do not create uncertainty for these 
companies that are really the heartbeat of what it is that 
young people all across the country are saying that they want. 
``Network neutrality'' is just a fancy word for ``non-
discrimination.'' And in the same way that the Civil Rights Act 
says non-discrimination in schools and counters for people to 
go and be served, the same thing is true over here. ``Network 
neutrality'' is just a fancy word of saying that anybody can 
get in, anyone can compete, anyone can innovate. And we have to 
protect that in America because that is what has happened over 
the last 20 years. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Markey. Senator Heller?

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

    Senator Heller. Mr. Chairman, thank you for holding this 
hearing. I appreciate the fact that the first hearing that we 
have has to do with protecting the Internet from the FCC, from 
bureaucrats, and I certainly appreciate moving forward on this 
particular piece of legislation. Hopefully we can come to a 
consensus. I want to thank all of you for being here. Your 
testimony has been good and very informative, so I certainly do 
appreciate all that you are saying.
    I want to go back to the previous comments made by my 
friend across the aisle, and he talked about this phone. I 
guess my question, Mr. McDowell, would this phone exist if the 
FCC had regulated the Internet 10 years ago?
    Commissioner McDowell. Probably not, but I do want to agree 
with something that Senator Markey said, which is this 
innovation----
    Senator Heller. Feel free to respond. Yes, please feel to 
respond.
    Commissioner McDowell.--it came about as a result of laws 
that were passed years ago, and that the marketplace is 
burgeoning because of laws passed years ago. If this committee 
wants to restate that in order to give the FCC enforcement 
authority there, then that is the will of Congress. But we have 
the wonderful Internet we have today because of the existing 
legal environment.
    Senator Heller. Ms. Baker, do you have any comments?
    Commissioner Baker. I agree. I mean, the innovation has 
been allowed to explode in the mobile broadband space because 
Congress explicitly chose a non-regulatory path for it.
    Senator Heller. Now you served on the FCC. Both of you 
served on the FCC. And in your comments, Mr. McDowell, you 
talked about litigation. What is your expectation of this going 
to the courts if the FCC moves forward on their order?
    Commissioner McDowell. I think a Title II order will 
definitely go to court. I think it will be overturned. And, by 
the way, you know, I am on record. I voted against two other 
net neutrality orders, in part because I thought nothing was 
wrong that needed fixing, but also because the FCC just did not 
have the legal authority to do what it did.
    So the Section 332 problems, as Commissioner Baker pointed 
out, I think are real problems on appeal, but also this trying 
to classify and yet massively forbear at the same time is going 
to look arbitrary and capricious, more like picking political 
friends rather than having any principled regulation.
    Senator Heller. With your experience on the FCC, could you 
estimate how long it would take for litigation like this to go 
through?
    Commissioner McDowell. Well, the last order from 2010 took 
37 months, and there was a lot of uncertainty in the interim.
    Senator Heller. Yes, that is what I was going to ask you, 
regulatory uncertainty at this point. What impact would that 
have on the industry, Ms. Baker?
    Commissioner Baker. We have several rural carriers in 
particular who are very insecure and have already pulled back 
on some of their investments because they do not know that they 
can get--they do not know what advanced services they can do 
because they do not know how much money they are going to have 
to spend on lawyers, so it is going to have significant 
slowing. To what extent we do not know. Mobile broadband has 
never been regulated by Title II, so we do not know.
    Senator Heller. Have you had an opportunity to take a look 
at the legislative text that the Chairman is proposing?
    Commissioner Baker. Yes, I think it is a very good start. 
We are very pleased with reasonable network management 
provision, that it has some technical parameters to it. There 
are clearly some issues that we need to have more discussion 
about, but we are very pleased with the fact that--the only way 
for this industry to have clarity is for Congress to act. The 
certainty we need happens in this room.
    Senator Heller. So you would argue that it makes more 
sense----
    Commissioner Baker. Absolutely.
    Senator Heller.--for Congress to act as opposed to going 
through a regulatory scheme.
    Commissioner Baker. Yes.
    Senator Heller. This is the reason I make this point, that 
if left up to the FCC alone to act, I do believe this will be 
challenged in court. Obviously the level of uncertainty that we 
would see in the industry, for however many months, whether it 
is 37 months or beyond, and I think there is a pretty good 
chance the FCC will not win. So what does it do to the 
industry? And I would argue that this exercise has been all for 
nothing.
    We have an opportunity, and, you know, I took a look at 
what the Chairman has done in his particular piece of 
legislation. Frankly, it is 70 percent of what the other side 
of the aisle wants--prohibiting blocking, prohibiting 
throttling, prohibiting paid prioritization, requiring 
transparency. This is everything the other side wants. And I 
guess, Mr. Chairman, what I do not understand is if they get 70 
percent of what they want, why would they want to risk it? I 
guess being from Nevada, we know a good bet when we see one, 
and I think this is a good bet. I really do think this is a 
good bet, and I just do not understand.
    Mr. Misener. May I, Senator?
    Senator Heller. Yes?
    Mr. Misener. Thank you. You know, I am a long-time 
proponent of net neutrality. I have been doing this for a dozen 
years, and I think two things. One is, first of all, we are 
willing to work with Congress for sure. I do not think that 
this exclusive of the FCC's process. They have an existing 
statute that they can work with, and they are working with, and 
it should be applauded, but that does not preclude us from 
working together. My testimony was very much designed to work 
with this committee to develop a strong bill with what you want 
to accomplish.
    But I think a little bit too much credit is being given to 
the forbearance decisions the Commission made a decade ago. 
Frankly, the network operators have been working under a period 
of detente where they have been on their best behavior. They 
have not been doing the bad things that they want to do. They 
have not been engaged in the blocking and the paid 
prioritization principally because they are concerned about FCC 
coming down or Congress coming down on them. So I would not 
want to give too much credit to the fact that we have been in 
this forbearance position for a dozen years, but I am happy to 
work with you on legislation.
    Senator Heller. And I appreciate that because that is what 
I want. I want the other side to come with us, work with us, 
get something done. I just have one more question, Mr. 
Chairman, if you will?
    Mr. Kimmelman, if this FCC order was not--was not prepared 
and moving forward, based on what the Chairman has introduced 
with his legislative text, would you vote for it? Would you 
support it? If the FCC----
    Mr. Kimmelman. Senator, I wish I had a vote. I think--I 
think it is commendable. I think by taking away some of the 
fundamental powers of enforcement, I would still be extremely 
worried even if the FCC were doing nothing, because even if the 
FCC is doing nothing, I think, Mr. Misener is absolutely right. 
There is an air or sense that somewhere between information 
services and Title II, that this industry has to behave, and it 
has been doing so. And I think that lack of predictability is 
an uncertainty that has driven a huge amount of investment 
while litigation is going on, while there is a lot of problems. 
I would want to make--and that is with the understanding the 
FCC has this residual authority. It is like a hammer that they 
could use.
    So I would want to preserve some kind of a hammer or some 
kind of a flexibility to make sure that you are forward 
looking. But I think it is a great start, Mr. Chairman and 
Senator Heller. I think we can--we can work on things, but 
there are some very big issues that need to be worked out.
    Senator Heller. Mr. Chairman, thank you. Thanks for 
proposing this legislation. I want to get both sides to work 
together so we can solve this problem.
    The Chairman. Thank you, Senator Heller. Great panel, great 
discussion. When we come back, Senator Booker will be up first, 
followed by Senator Daines. I appreciate, again, your patience 
and indulgence, and I do have to brag on my home state guy. PC 
Magazine said that Midcontinent Cable is the fastest ISP in the 
Nation recently.
    So we will adjourn, or at least I should not say 
``adjourn,'' but recess temporarily, and hopefully we will be 
back here in an hour-ish. Thank you.
    [Recess.]
    The Chairman. All right, we are back. And in typical Senate 
fashion, it is a model of efficiency getting through a series 
of votes on the floor. We appreciate again so much the patience 
of everybody who is here, and particularly our panelists. Thank 
you for hanging around.
    Is the Senator from Montana ready to ask questions, or 
should I----
    Senator Daines. Mr. Chairman, we are ready.
    The Chairman. All right. I would recognize the Senator from 
Montana, Senator Daines.

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

    Senator Daines. Thank you. I am down over here on the 
extended part of the table here, but thank you. And thank you, 
Mr. Chairman, for holding this most important hearing.
    I have a little different background than many who come to 
the U.S. Senate. I had the chance to spend 28 years in the 
private sector before being elected to Congress a couple of 
years ago and then coming over to the Senate. Several years 
ago, I left a job at Procter & Gamble to come home to my home 
state of Montana and was part of an Internet startup company. 
In fact, it was just a small company when I joined, and 12 
years later we have grown to a thousand employees, one of the 
larger employers in the state of Montana, and it was a great 
success story. Here we are in Montana, the land of fly fishing 
and A River Runs Through It, and yet growing a world class 
Internet company. In fact, it was cloud computing, and back in 
those days, we did not know what the cloud was. We thought it 
was something to do with maybe something up in the sky, but it 
turned into a tremendous success. It capitalized at $1.8 
billion. We built a global company that was acquired by Oracle. 
So I just share that as background kind of where I am coming 
from as we engage in this most important issue.
    And I remember when I joined the company, I asked the CEO 
before I joined the executive team, I said what is your 
competitive differentiator? And he said I can run faster than 
anybody else. It was speed, the ability to innovate and create 
value faster than anybody else. And we competed globally 
against companies and competitors all over the world. I am very 
proud to be an American company that was winning in the 
technology space.
    Well, with that as background and going back to Ms. Baker's 
comment earlier, and I know that was a long time ago when we 
were last here before the votes. But you said something that 
piqued my interest about what happened in Europe with 3G when 
they were out in front, and then because of overregulation, 
suddenly they no longer are--have global leadership. Could you 
maybe expand on that a bit more? And, you know, what bad 
regulations caused that do you think, and what are some of the 
watch-outs we should be aware of here as a committee as we 
think about the right policy moving forward?
    Commissioner Baker. Well, welcome, and thank you for the 
first question. So I appreciate it, and your background is 
perfect to understand this. I really think, you know, what 
happened was the United States got the environment right. We 
got the de-regulatory climate for wireless. We got the 
auctions. Meanwhile in Europe, they were the leaders of 3G, and 
they said, you know, we are going to put in wholesale 
regulations. We are going to do price regulation. We are going 
to do mandate roaming. And they did not put any low-band 
auction out there.
    And in the course of that time from 2006 to 2010, we 
started building a foundation for our 4G networks, which are 
now the world's leader. And where we basically have the same 
number of subscribers--we have 5 percent of the world's 
subscribers--we have almost--we have 50 percent higher CapX and 
investment than they do, and it is because we got it right and 
they got it wrong.
    And after building their house of regulation, we had people 
like Nellie Cruz, who, as you recall, was very adamant about 
regulation. She is now looking at the United States market, and 
she says we want to be like them. They got it right. We will 
get it right for 5G. And I think we have places like Japan and 
South Korea who are like, wow, the United States beat us so 
badly in 4G that maybe--we are just going to skip to 5G. So it 
is really about getting the environment right, and, you know, 
the rest of the world is at our heels, so we need to make sure 
we continue to get it right here.
    Senator Daines. And I think that is one of my great 
concerns certainly as someone who has been on the other side, I 
guess, in the private sector in looking at the famous adage, 
``We are from Washington, D.C., and we are here to help'' in 
terms of what this could for the--on the upside, but 
potentially on the downside as it relates to the regulatory 
environment to hinder value creation, and growth, and global 
competitiveness.
    Dr. Turner-Lee. May I, Senator, if you do not mind?
    Senator Daines. Yes, please.
    Dr. Turner-Lee. Just from the statistics that I mentioned 
about the over-indexing of people of color on wireless, I think 
the point that we are actually seeing in Europe is one that we 
should take, you know, with some caution because what we are 
seeing, particularly with communities of color, is this use of 
the 4G and expanding networks because most of those families 
are wireless-only households. So I think, again, to your point, 
we really have to get this right here because that is actually 
going to be, I think, the on-ramp for some of these low income 
and more vulnerable consumers that are actually adopting 
wireless first before they go into more wire line services.
    Senator Daines. Thank you. Mr. McDowell, what do you 
think--as you look at regulation, what concerns you in terms of 
a regulation that would hinder innovation in terms of our high-
tech sectors here that could harm what we are trying to do here 
as a country to maintain global competiveness?
    Commissioner McDowell. Well, regulations always have a cost 
one way or another, and the most common cost, which is the 
hardest to measure, are the unintended consequences or what 
innovation did not come to market as a result of that 
regulation. That is very hard to measure. So I like to turn it 
around to say, well, what has worked in the Internet ecosphere? 
A lot of things have worked right, and that is based on the 
laws that were put into effect. Not Title II, but other laws 
that were put into effect. And where is the innovation 
investment going? It is in the least regulated areas.
    Senator Daines. Why does the FCC have the sense of urgency 
to want to put these regulations in place next month? I am 
somewhat new to the Hill and wondering what is the sense of 
urgency here to put these regulations in place without some 
careful deliberation in the hearings and so forth?
    Mr. Misener. Senator, thank you. As someone who has worked 
on this issue for 12 years, I do not think there is any urgency 
at all. It has been a dozen years of debate and no action. I 
agree completely with Commissioner Baker that we need to get it 
right with respect to net neutrality, especially as opposed to 
Europe, because here you have the Internet content providers 
are American companies. The network operators are American 
companies. In Europe the network operators are European 
companies, and the Internet content providers are American 
companies. And so, if we get net neutrality wrong here, you can 
bet that we will not have a leg to stand on in Europe.
    Senator Daines. Yes, thank you. Mr. Chairman, I think my 
time has expired. Thank you.
    The Chairman. Thank you, Senator Daines. Senator Booker?
    Senator Booker. [Off audio.] So I gave you guys some nice 
words, but I will skip them now because that is my time.
    [Laughter.]

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

    Senator Booker. This is an issue I am very passionate 
about, and I am grateful for the commentary of everyone. And I 
think that we all have a lot of similar ambitions in terms of 
what the open and free Internet would be. But I would love to 
tailor my conversations with you, Dr. Turner-Lee, because in 
your testimony I love where you come from, a lot of the same 
experience that I do.
    And, you know, while government may seem scary to some 
people, I would not be sitting here today if it was not for the 
Federal Government protecting my rights. The town I grew up in, 
it was the Government putting in place certain frameworks to 
protect a black family that wanted to move in. And so, when it 
comes to the Goliath, whether it is--industry or what-have-
you--the Government is really important.
    And I hold here this area of debate, and here in Section 2, 
there is a big section here. And Chairman Thune is somebody I 
have a deep respect for and think he has done a courageous 
thing by putting a bill out, and I appreciate, Chairman, that 
you say this is the beginning of a conversation. But it 
basically eviscerates a lot of the key elements that are put in 
place in Section 202 of Title II that specifically refer to 
disadvantaged and minority communities.
    Now, I know that mobile may be doing a great job in leading 
the globe, but broadband certainly is not. We are behind our 
global competitors. And specifically if you look at a map of 
minority communities, poor communities, those are the ones 
where private enterprise often does not see the urgency to get 
there. And so, I was curious, in your testimony when I read it, 
your written testimony, that you rely in some ways on Section 
706 for protections and others, but yet this legislation does 
not give those protections. Let me give you a couple of 
examples.
    Right now, we are waiting on the FCC to allow two cities 
with high poverty, high minority--Wilson, North Carolina, which 
has--is a majority/minority city, blacks and Latinos, and 
Chattanooga, a city I have long admired, that has a significant 
minority population. And what these cities said is that we want 
to give better access to broadband, and we want to have our own 
municipal broadband. And their states, however, have said--this 
is a locality that wants to determine its own destiny, but the 
states have said, no, you cannot. We are passing laws 
preventing that, which the big Goliaths all support. And so, 
this is David versus Goliath.
    This legislation takes that ability to fight Goliath out 
where they cannot appeal to the Federal Government. So next 
month, the FCC is going to get a chance to rule using Section 
706 that is specifically eviscerated in the legislation you put 
forward to allow these two cities to do something that is 
actually pretty incredible--faster broadband than even the big 
Goliaths are doing, free open access for minority communities. 
And so, these are the kinds of protections that to me are 
essential for us as a Nation to activate the genius and 
entrepreneurialism of other communities.
    The proposed legislation would end the FCC's ability to 
remove barriers to small businesses and minority-owned 
businesses. In many ways, these communities have traditionally 
benefited from the Agency protection in a world where 
marketplace is often tipped toward the biggest companies and 
``high value customers.'' Well, kids in Newark and Camden to me 
are high value customers, and they stand to lose the most if 
the Commission's authority is all but stripped by this new law.
    So you stated in your testimony that the Committee should 
consider ``a legislative proposal to promote an open Internet, 
provided it preserves the Commission's ability to protect 
consumers.'' And so, I just really want you to be specific 
because you seem to be advocating for things that are not yet 
in the proposed legislation that I fully support to make sure 
that this world is far more equal to those folks that seem to 
consistently lose out when it comes to opportunity and equality 
in our country.
    Dr. Turner-Lee. [Off audio.]
    Senator Booker. You have got to push the button, by the 
way.
    [Laughter.]
    Dr. Turner-Lee. Yes, I have got to push the button, right. 
I have only been here 2 hours, and I have not figured that one 
out. So, first of all, I want to say congratulations. We follow 
you on Twitter. We follow you wherever you go. We are so happy 
that you are in this seat.
    Senator Booker. Thank you. Thank you very much.
    Dr. Turner-Lee. I want to put that out as a public 
acknowledgement.
    Senator Booker. And that is for the record, by the way.
    [Laughter.]
    Dr. Turner-Lee. It is for the record. And I also want to 
say, too, to your point I am glad that we do share the same 
goals. I have always known that we have, but just by listening 
to things that you say that broadband adoption is the number 
one civil rights issue and concern of this time. And I think to 
what Senator Markey said earlier, it is a new lunch counter 
debate for many of us in our communities. The 30 million people 
that are not online, the people that we kind of care about 
versus the digital elite in our community. It is really 
important to kind of let them know the value and importance of 
broadband. So I want to address that.
    When the civil rights groups, the ones that we represent, 
which are more traditional, came forth when the Chairman put 
out his proposal, it was always with the Section 706 provision 
with strong protection consumers. So you are correct because 
Section 706 has actually enabled communities of color to do a 
lot of things, right? Stop digital redlining. It has helped us 
with minority media ownership, Universal Service Fund, et 
cetera. So with respect to the use of 706, in the testimony I 
do talk about, you know, this idea of still keeping that on the 
table as some point of legislative debate or discussion as you 
try to move toward a bipartisan bill.
    I mean, part of this discussion and what I think is so 
wonderful about these hearings is the fact that Congress is 
talking to one another about this, and those of us that are on 
the side wanting to do the very things that you are interested 
in and making sure that there is nobody left behind. You know, 
we get this chance to say, please do talk to each other because 
we want to move onto the business of other areas.
    With regards to the statement that we put out there, I 
mean, there were a couple of things that we did put into the 
written statement as well about digital redlining being a very 
important piece, that, again, if you eviscerate 706, you will 
not be able to deal with redlining in a very important way, or 
universal service reform. And I think that is important to note 
for this hearing as well. So we ask the Chairman and the 
Ranking Member to consider that in that conversation of how we 
actually come together and get past the morass of some of the 
division on this bill, which I think, again, for us is a 
promising discussion for the primary reasons of getting back to 
the business of adoption, the issues that you care about.
    On the muni thing, just the last thing, just to respond to 
municipal broadband. So we at MMTC really have not taken an 
opinion on that. We put out a press statement applauding the 
President for his commitment to universal broadband adoption 
and deployment, and we see that as part of this broader way to 
actually expand that. But one of the things, again, digital 
redlining, we have to also be careful that we are not creating 
these fiber-hoods and communities where we actually give people 
permission to build broadband and deploy it, but yet we pass 
over communities within that neighborhood. And sometimes we as 
a community have had felt the disproportionate impact of being 
passed over as a result of that.
    Senator Booker. Right, and I want to put some things in the 
record, but just to the last municipal broadband point. Having 
been a mayor, the best innovation in America, if you want to 
talk about what is going on in this country in terms of 
government, it is not going on at the Federal level. It is not 
even at the State level.
    Dr. Turner-Lee. Muni.
    Senator Booker. It is at the municipal level. And to 
eviscerate municipalities' ability to innovate, especially 
because disproportionately poor minorities live in cities, 
would be unconscionable and unacceptable to me. And I hope it 
is something that we can consider in discussions for the 
legislation that is being considered by the Chairperson.
    I want to enter for the record, if the Chairperson will 
allow, number one, an op-ed I authored with Senator King 
outlining the importance of strong net neutrality rules. Number 
two is a letter from the Internet Association expressing 
concerns with the proposed legislation. And very importantly, 
number three, letters from civil rights and social justice 
groups, over a hundred of them, advocating for Title II really 
specifically because of a lot of the protections, the bedrock 
protections that are statutorily in Title II that allow like 
the civil rights legislation, like the voting rights 
legislation, around minorities and others, that bedrock defense 
of their rights so that Goliath cannot succeed over the noble 
Davids out there.
    [The information referred to follows:]

             Booker, King: Don't destroy the open Internet

                     By Cory Booker and Angus King

                updated 7:53AM EST, Mon December 8, 2014

   http://www.cnn.com/2014/12/08/opinion/booker-king-net-neutrality/

    Editor's note: Cory Booker, a Democrat, is a United States senator 
from New Jersey. Angus King, an independent, is a United States senator 
from Maine. The opinions expressed in this commentary are solely those 
of the authors.

    (CNN)--The Internet is one of the most powerful tools on the 
planet. Across the globe, millions of people connect every minute of 
every day to harness its wealth of information, exchange ideas in an 
open platform and foster the type of innovation and entrepreneurship 
that spurs economic growth. And today, it's never been more at risk in 
the United States.
    Earlier this year, a court decision unlocked the ``pandora's box.'' 
There are now no enforceable rules to ensure small businesses, 
nonprofits and individuals can continue to access online content 
without fear of discriminatory practices or content blocking by 
Internet service providers who own the information pipelines.
    Indeed, without new rules, service providers could create fast 
lanes, impose new fees, and even block certain content and promote 
other content to bolster their bottom line. This would destroy the open 
Internet as we know it.
    This is not idle speculation. Executives at cable and phone 
companies have expressed a desire to engage in such activities, and in 
fact, have already tried to do so. If we permit blocking, 
discrimination, and tolls, we will undermine the Internet's low-cost 
level playing field that has transformed our society, created an 
economic boom, and provided opportunity to so many in the United States 
and around the world.
    In the last few decades, we have seen first-hand how the open 
Internet has led to a robust startup economy where Americans create 
content, solve problems and pioneer new technologies that improve the 
lives of people across the globe. Businesses like Twitter, YouTube, 
Tumblr, Google, Facebook and more have emerged because they were able 
to start on an even playing field, where consumers--not Internet 
service providers--determined their success. Degrading service or 
forcing businesses to pay-to-play would fundamentally undermine the 
openness and access on which the Internet has thrived.
    To allow the Internet to become a bastion of powerful incumbents 
and carriers would be a mistake of historic proportions. Instead, it 
must remain a place where all speakers, creators and innovators can 
harness its transformative power now and in the future.
    Fortunately, we do not need to create new laws or a complex 
regulatory structure to preserve the Internet as we know it. Instead, 
the Federal Communications Commission can pass rules that prevent toll 
booths, content blocking and discrimination by simply reclassifying 
broadband as a common carrier service under Title II of the 
Communications Act.
    All the FCC would be doing is applying the legal framework that 
Congress expected it to apply, and that both Supreme Court Justice 
Antonin Scalia and President Barack Obama agree is the correct 
approach. In other words, the legal tools are there and ready to use.
    Some worry that this approach could be overly burdensome on 
Internet service providers, but the fact is, the FCC can easily apply 
only the necessary parts of Title II regulation through a process known 
as forbearance. This flexible approach would allow the FCC to adopt 
bright-line rules that provide certainty to the market, and would keep 
the Internet as a powerful, open platform that gives everyone--not just 
the highest-bidder--the opportunity to freely exchange goods and ideas. 
Any approach that stops short of reclassifying broadband under Title II 
will not allow the FCC to adopt the rules we need today to protect 
customers and businesses, and will result in high social and economic 
costs.
    All other approaches require case-by-case adjudication, leading to 
never-ending litigation (which, in itself, disproportionately harms 
small businesses and start-ups), market uncertainty, high costs of 
regulation and opportunities for regulatory overreach.
    Title II has already worked well to strengthen telecommunications 
in the United States. Under Title II regulation, telephone service has 
been robust and accessible. Mobile phone service, also a Title II 
service, continues to thrive and investment has remained steady and 
more and more individuals turn to mobile as their primary voice 
service. While many do not realize it, Title II also applies to the 
broadband services offered to the Nation's large businesses, known as 
enterprise broadband, and to the many services offered to millions of 
our rural Americans.
    An open Internet is not only essential for the future of America's 
economic growth, but it is also a ladder for social and economic 
mobility, allowing families in rural or low-income areas to access 
educational and social services, participate in our democracy and 
contribute to the marketplace of ideas. This is why we have been 
working with our colleagues in Congress to encourage the FCC to protect 
the open Internet under Title II. Adopting these sensible rules would 
give the FCC the power to intervene if broadband providers attempt to 
abuse the principles of the open Internet while also creating market 
and regulatory certainty.
    We are proud to join more than 4 million Americans of all political 
beliefs, as well as companies in our home states and across the 
country, who have spoken out in favor of strong open Internet rules and 
against the creation of fast and slow lanes.
    We urge the FCC to act quickly to implement fair rules of the road 
that protect businesses and consumers and preserve the power of the 
open Internet.
    The future of our democracy and economy depend on it.
                                 ______
                                 
                                       Internet Association
                                   Washington, DC, January 21, 2015

Hon. John Thune,
Chairman,
United States Senate,
Committee on Commerce, Science, and Transportation,
254 Russell Senate Office Building,
Washington, DC.
  
  
  

Hon. Bill Nelson,
Ranking Member,
United States Senate
Committee on Commerce, Science, and Transportation,
254 Russell Senate Office Building,
Washington, DC.
  
  
Hon. Roger Wicker,
Chairman,
Subcommittee on Communications, Technology and the Internet,
United States Senate,
Committee on Commerce, Science, and Transportation,
254 Russell Senate Office Building,
Washington, DC.

Hon. Brian Schatz,
Ranking Member,
Subcommittee on Communications, Technology and the Internet,
United States Senate,
Committee on Commerce, Science, and Transportation,
254 Russell Senate Office Building,
Washington, DC.

Dear Chairman Thune, Ranking Member Nelson, Chairman Wicker, and 
Ranking Member Schatz:

    I write on behalf of the Internet Association to share our views on 
today's legislative hearing to discuss the proposed net neutrality 
legislation before your Committee. The Internet Association is the 
unified voice of the Internet economy, representing the interests of 
leading Internet companies \1\ and their global community of users. The 
Internet Association is dedicated to advancing public policy solutions 
to strengthen and protect Internet freedom, foster innovation and 
economic growth, and empower users. As such, we are keenly aware of and 
interested in any net neutrality related public policy, regardless of 
its origins and legal foundation.
---------------------------------------------------------------------------
    \1\ The Internet Association's members include Airbnb, Amazon, AOL, 
Auction.com, eBay, Etsy, Expedia, Facebook, Gilt, Google, Groupon, IAC, 
LinkedIn, Lyft, Monster Worldwide, Netflix, Practice Fusion, Rackspace, 
reddit, Salesforce.com, Sidecar, SurveyMonkey, TripAdvisor, Twitter, 
Uber Technologies, Inc., Yelp, Yahoo!, and Zynga.
---------------------------------------------------------------------------
    Since last May, when the Federal Communications Commission first 
requested public comments on its proposed open Internet rules, the 
Internet Association has taken a position that is results oriented. By 
this, we mean that our priority is for the adoption of robust and light 
touch open Internet rules that protect Internet freedom, foster 
innovation and economic growth, and empower users. The rules for which 
we specifically advocated are a ban on blocking, discrimination, and 
paid prioritization by both wired and wireless broadband Internet 
access providers. We also have expressed our concern--outside of the 
traditional last mile net neutrality debate -that these providers can 
use interconnection as a chokepoint to degrade consumer access and harm 
online services.
    Many of the principles outlined by Chairman Thune are responsive to 
our concerns in key respects, and we are grateful for the leadership 
both the House and Senate have shown in crafting them, as well as the 
outreach to stakeholders throughout this process. With respect to the 
draft legislation, changes need to be made to ensure the outcomes match 
these principles so that an open Internet is fully protected. Although 
this list is not intended to be exhaustive, we have concerns about 
certain key provisions in the discussion draft--namely discrimination, 
throttling, specialized services, consumer choice, and reasonable 
network management practices.
    The bill as currently drafted does not expressly ban 
discrimination. Allowing discrimination unconnected to a payment 
creates the possibility of discrimination by vertically integrated 
Internet access providers. Similarly, the current prohibition on 
throttling in the discussion draft is ambiguous since it prohibits 
``selective'' throttling only when the throttling is ``based on source, 
destination, or content'' of the traffic. This leaves open the 
possibility that an access provider could adopt a policy of generally 
throttling Internet traffic of a particular ``type,'' such as video 
traffic.
    We also have concerns about the definitions of specialized 
services, consumer choice, and reasonable network management practices 
in the discussion draft. These terms as currently drafted could be used 
as loopholes to avoid the legislation's obligations, leading to the 
unintended consequence of the exception swallowing the rule. 
Specialized services are defined expansively and are permitted save 
where ``devised or promoted'' to evade the open Internet rules, or 
where they impinge on the ``meaningful availability'' of broadband 
Internet access. Unfortunately, neither term is specifically defined. 
Similarly, we are concerned that the discussion draft's consumer choice 
provision could be read to allow broadband Internet access providers to 
prioritize a service if consent is given through a provision buried in 
a dense and lengthy consumer service contract. Finally, the discussion 
draft could allow access providers to hide reasonable network 
management practices from transparency requirements, and thus, 
potentially hide discrimination under the guise of reasonable network 
management.
    We look forward to working with the Committee on some key issues of 
concern for Internet companies--including the issues outlined above-as 
the Committee's process advances. As we review Congressional open 
Internet proposals, we will continue to work with stakeholders--
including the FCC--to produce enforceable rules. The path forward is 
not binary, and we have a responsibility to protect the free and open 
Internet for our members, as well as their community of users, by 
working with regulators, legislators, and stakeholders to achieve this 
end.
    It is encouraging to see that support for net neutrality rules 
cross party lines. We must all work together to ensure that the 
Internet is free and open for users and innovators.
            Respectfully,
                                         Michael Beckerman,
                                                 President and CEO,
                                                   Internet Association
                                 ______
                                 
                                                   January 20, 2015

Hon. John Thune,
United States Senate SD-511,
Washington, DC.
Hon. Bill Nelson,
716 Senate Hart Office Bldg.,
Washington, DC.

Dear Chairman Thune and Raking Member Nelson:

    It has been a year since a Federal court struck down the Federal 
Communications Commission's (FCC) Open Internet rules.
    And currently, there are no rules preventing Internet Service 
Providers (ISPs) like Comcast, AT&T, and Verizon from interfering with, 
blocking, censoring, or discriminating against online content and Web 
traffic.
    This is why our groups oppose any effort that would prevent the FCC 
from adopting strong and enforceable Net Neutrality rules at the 
agency's upcoming Feb. 26 meeting. We fear that the draft legislation 
currently under discussion is designed to do just that, and to stall 
the FCC. We believe instead that it is time for the FCC to take sound 
action at last to protect our online digital rights.
    Over the past year, more than four million commenters have called 
on the FCC to adopt strong Net Neutrality protections banning 
unreasonable discrimination online. Millions more have petitioned 
Congress and the FCC for the same kinds of protections.
    Thousands of organizations and businesses have joined that call as 
well, including an unprecedented number of racial justice and civil 
rights groups.
    The vast majority of these commenters have called on the Commission 
to reclassify broadband as a Telecommunications Service under Title II 
of the Communications Act. This would re-establish the agency's 
authority to enforce nondiscrimination rules and other necessary 
protections for Internet users.
    For our organizations, Net Neutrality is a critical racial justice 
issue.
    The open Internet has made it possible for communities of color to 
tell our own stories online and speak for ourselves without first 
seeking permission from corporate gatekeepers. It has ensured that our 
voices will always be heard and never silenced.
    That is why more than 100 civil rights and racial justice groups, 
including the National Hispanic Media Coalition, 18MillionRising.org, 
LatinoJustice PRLDEF, the Center for Media Justice, ColorOfChange.org, 
Black Lives Matter, and Presente.org, have called on the FCC to re-
establish its legal authority to protect our online rights. A full list 
of civil rights and racial justice leaders and organizations that 
support the FCC moving forward with Title II reclassification and 
Network Neutrality is available in filings with the FCC that are 
attached to this correspondence.
    ColorOfChange.org, the largest Black online civil rights group in 
the country, has filed 75,000 comments with the FCC in support of 
reclassification. And Congressional champions such as Reps. John Lewis, 
John Conyers, Donna Edwards, Keith Ellison, Raul Grijalva, and Sen. 
Cory Booker are among the growing chorus calling for Title II 
protections.
    Through the years, our groups have had to fight back against the 
misleading arguments made by the ISPs that Net Neutrality would widen 
the digital divide because of the harm it would cause to investment. 
But the untruthfulness of those arguments was exposed last month at a 
conference for investors.
    At the gathering, the chief executives and chief financial officers 
for Verizon, Comcast, Charter Communications, and Time Warner Cable all 
told investors the truth: that Title II would not harm investment.\1\ 
The companies had to tell the truth in this setting since it is against 
the law to deceive investors. In addition, Sprint undermined the anti-
Net Neutrality arguments made by other wireless providers by telling 
the Commission that Title II rules would not harm investment.\2\
---------------------------------------------------------------------------
    \1\ Fung, Brian, ``Comcast, Charter and Time Warner Cable all say 
Obama's net neutrality plan shouldn't worry investors,'' The Washington 
Post, Dec. 16, 2014. http:/fwww.washingtonpost.com
jblogsjthe-switchfwp/2014/12/16/comcast-charter-and-time-warner-cable-
all-tell-investors-strict-net-neutrality-wouldnt-change-much/.
    \2\ Fung, Brian, ``Sprint: Tough net neutrality rules would be fine 
by us,'' The Washington Post, January 16, 2015: http:/
fwww.washingtonpost.comfblogs/the- switchfwp/2015/01/16/sprint-tough-
net-neutrality-rules-would-be-fine-by-usf.
---------------------------------------------------------------------------
    It is time for the FCC to move forward and vote on Net Neutrality 
rules on Feb. 26. We oppose congressional proposals that would restrict 
the FCC's legal authority to enforce strong Net Neutrality protections 
or strip the Commission of the flexibility it needs to preserve 
nondiscrimination rules in a communications landscape that continues to 
evolve.
    Preserving the FCC's Title II authority is also critical to 
addressing other broadband-related issues like universal service, 
competition, interconnection, consumer protection, privacy, and public 
safety.
    For all of these reasons, we oppose any effort to derail the FCC 
from taking action to use its existing Title II authority, or to 
prevent the FCC from protecting our online digital rights through 
strong Net Neutrality rules.
            Sincerely,
                                          ColorOfChange.org

                                   Center for Media Justice

                                                 Free Press

                          National Hispanic Media Coalition

                                               Presente.org
                                 ______
                                 
                                                    January 5, 2015
Federal Communications Commission
445 12th Street, SW
20024 Washington, DC
14-28: Protecting and Promoting the Open Internet
10-127:In the Matter of Framework for Broadband Internet Service


Dear Chair Tom Wheeler and Commissioners Clyburn and Rosenworcel,

    As a new generation of civil rights organizations and leaders who 
represent the rural and urban poor, immigrants, and communities of 
color, we urge you to swiftly adopt enforceable network neutrality 
rules that prevent discrimination online. Now is the right time to 
equally protect the digital voice and rights of the Nation's most 
vulnerable communities--whether they access the Internet from a 
computer, a phone, or a tablet.
    On Monday, November 10, 2014, President Obama urged the Federal 
Communications Commission to reclassify broadband as a common carrier 
service under Title II of the Communications Act, coupled with strong, 
bright-line net neutrality rules. Bright-line rules provide certainty 
to the market, keep the costs of regulation low, and limit FCC 
overreach.
    We are concerned by press reports that the FCC--instead of standing 
with the President, policy experts, and almost 4 million people to 
support strong network neutrality rules--is instead considering 
dangerous ''hybrid'' rules that would destroy the open Internet as we 
know it.
    Commissioners, we urge you to stand with the President and adopt a 
plan to reclassify Internet service providers as common carriers. This 
would give the Commission the authority it needs to adopt enforceable 
rules that ban ISPs from discriminating against, or blocking, our 
content online.
    Protecting an open and non-discriminatory Internet is critical for 
the health and well being of communities of color and low-income 
families. The fight for an open Internet is not just about broadband 
access and corporate investment; it is also a fight for real 
representation for the most vulnerable constituencies in the United 
States.
    The open Internet has given our communities the rare opportunity to 
ensure our stories are told accurately, in our own voices. From job 
applications, healthcare, and entrepreneurship to the management of 
Federal benefits, immigration status and online education--communities 
of color and low-income families rely on the open Internet to meet our 
basic needs.
    Commissioners, we respectfully, but passionately, urge you to stand 
with the President and the people to propose the strongest network 
neutrality rules available. Now is the time to reclassify broadband as 
a common carrier under Title II, with equal protections for users of 
fixed and mobile broadband. When it comes to preventing online 
discrimination and protecting our Internet freedom, there is no room 
for compromise or delay.
            Respectfully,

18 Million Rising
Access Humbolt
Alliance for a Just Society
Alliance of South Asians Taking Action
Allied Media Projects
Alternate ROOTS
Angry Asian Man
API Equality--Northern California
Appalshop
Arts and Democracy Project
Asamblea de Derechos Civiles
Asian Americans Advancing Justice--Asian Law Caucus
Asian Pacific American Network of Oregon
Black Alliance for Just Immigration
Black Excellence Project
Black Lives Matter
Boulder Community Broadcast Association
Brown & Green: South Asians for Climate Justice
Brown Boi Project
Brown Paper Tickets
Center for Media Justice
Center for Rural Strategies
Center for Social Inclusion
Champaign-Urbana Citizens for Peace and Justice
Chinese for Affirmative Action
Color of Change
Common Cause
Common Frequency
Community Justice Project
Community Technology Network
Concerned Citizens for Justice
Council on American-Islamic Relations
CREDO
Demand Progress
Dignity and Power Now
Ella Baker Center for Human Rights
Empowered Pacific Islander Communities
Esperanza Peace and Justice Center
Families for Freedom
Families Rally for Emancipation and Empowerment
Fight for the Future
Free Press
Future of Music Coalition
Global Action Project
Generation Justice
Greenlining Institute
Hispanic Association of Colleges and Universities
Hyphen Magazine
Illinois Campaign for Prison Phone Justice
Latino Rebels
Linebreak Media
Making Contact
Martinez Street Women's Center
May First/People Link
Media Action Center
Media Action Grassroots Network
Media Alliance
Media Literacy Project
Media Mobilizing Project
Million Hoodies Movement for Justice
Minnesota Center for Neighborhood Organizing
Movement Strategy Center
Nation Inside
National Asian Pacific American Women's Forum
National Association of Hispanic Journalists
National Hispanic Media Coalition
National Korean American Service & Education Consortium
National People's Action
New Sanctuary Coalition of NYC
OpenMedia International
Our Time
People's Press Project
Presente
Progressives United
Prometheus Radio Project
Race Forward
Racial Justice Action Center
Radio Bilingue
Roosevelt Institute
Roosevelt Institute--Campus Network
Run For Us
Seeding Change: A Center for Asian American Movement Building
Share New Mexico
South Asian Americans Leading Together
Southwest Organizing Project
St. Paul Neighborhood Network
The Highlander Research and Education Center
The Utility Reform Network (TURN)
The Visibility Project
Truthout.org
United Church of Christ, OC Inc.
United We Dream
Urbana-Champaign Independent Media Center
Voices for Racial Justice
Vote Mob
We the People
Women, Action & the Media!
Women's Institute for Freedom of the Press
Young People's Project
Young Women United
Youth Justice Coalition
      
                                 ______
                                 
                           City and County of San Francisco
                                                   January 26, 2015
Dear Chairman Wicker and Ranking Member Schatz:

    The undersigned mayors are writing to support the strongest 
possible rules to guarantee Net Neutrality. As you know, the Federal 
Communications Commission ("FCC" or "Commission") is currently engaged 
in a proceeding to determine the most effective strategies for ensuring 
that the Internet remains free and open. It is critical that the FCC 
act now to implement regulations that protect consumers and innovation. 
The Commission should implement clear, legally defensible rules that: 
support transparency so that consumers can evaluate service offerings; 
prohibit blocking of lawful content; bar discrimination and ban paid 
prioritization.
    We believe that the most effective way to truly protect the open 
Internet is for the FCC to break with its previous approach and re-
classify broadband Internet as a telecommunications service subject to 
regulation as a common carrier, by reclassifying Internet access as a 
Title II service. The Commission has, to date, classified broadband 
Internet service-whether offered via wireline facilities, wireless 
technologies or power lines-as an "information service." By treating 
broadband as an information service, the Commission has unclear 
authority and must construct a new regulatory regime. The Commission 
could remedy this be relying on Title II where the Commission has clear 
authority and where it has at its disposal an existing array of tools 
to protect consumers and competition, including service quality, rates, 
discrimination, disclosure of information requirements. Once Internet 
service has been classified as a Title II service, the FCC would have 
the ability to forbear from elements of the Title II regime that are 
unnecessary or archaic, if they do not serve to protect consumers or 
serve the public interest.
    This approach would enable the FCC to require sufficient 
transparency for consumers to make informed choices and accurately 
assess the services they are being provided. Currently, the lack of 
clear, accurate information results in confusion with respect to key 
service features, like download and upload speeds, pricing and usage 
restrictions. This has contributed to widespread consumer 
dissatisfaction with broadband providers. These practices also place 
considerable burdens on local agencies, which must use their own 
resources to help consumers resolve challenges.
    The risk that content and content-provider based blocking and other 
discriminatory practices pose to Net Neutrality has been a source of 
great public concern. Rules prohibiting the blocking of lawful content, 
services and applications are particularly important for the public 
schools and libraries that serve our residents. These institutions 
serve critically important educational functions for young people and 
adults. In addition, because they provide Internet access in the 
context of meaningful education, training, employment and other 
programs, they are essential vehicles for meeting adoption goals.
    It is critically important that our residents-among them many 
students, parents, educators and others who are only able to connect to 
broadband at schools or libraries-are able to freely access lawful 
content without being confronted with delays that threaten adoption. In 
addition, it is vital that the content our residents, businesses and 
others create is freely accessible online. With this in mind, we urge 
the Commission, upon re-classifying broadband as a telecommunications 
service, to adopt the strongest possible rules against blocking, 
prioritization and other discriminatory practices.
    We urge you to vigorously promote a free and open Internet by 
supporting the reclassification of broadband as a telecommunications 
service under Title II, promulgating effective transparency rules and 
adopting the strongest possible protections against blocking, 
prioritization and other discriminatory practices.
            Sincerely,
                                                 Edwin Lee,
                                                             Mayor,
                                                     San Francisco, CA.

                                            Bill De Blasio,
                                                             Mayor,
                                                          New York, NY.
                                 ______
                                 
                                 
          [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                       
                                 
                                 
                                                  December 10, 2014
Senate Majority Leader Harry Reid
Senate Minority Leader Mitch McConnell
Speaker of the House John Boehner
House Minority Leader Nancy Pelosi
United States Congress

The Honorable Tom Wheeler
The Honorable Mignon Clyburn
The Honorable Jessica Rosenworcel
The Honorable Ajit Pai
The Honorable Michael O'Rielly
Federal Communications Commission
445 12th Street, SW
Washington, DC

Dear Majority Leader Reid; Minority Leader McConnell; Speaker Boehner; 
Minority Leader Pelosi; Chairman Wheeler; and Commissioners Clyburn, 
Rosenworcel, Pai, and O'Rielly:

    We write, representing a wide range of technology companies, to 
express our strong opposition to proposals to classify broadband as a 
``Title II'' service. Based on our experience and business expertise, 
we believe that our companies and our employees--like the consumer, 
businesses, and public institutions who depend on ever-improving 
broadband networks--would be hurt by the reduced capital spend in 
broadband networks that would occur if broadband is classified under 
Title II. Such a dramatic reversal in policy is unnecessary to ensure 
an open Internet.
    For almost twenty years, national leadership, on a bipartisan 
basis, has nurtured the broadband Internet with a wise, effective, and 
restrained policy approach that supported the free flow of data, 
services, and ideas online while creating a climate that supported 
private investment in broadband networks. The result has been a 
technological, economic, and social miracle that has boosted economic 
productivity and enriched lives, and created in America a symbiotic 
Internet economy that's the envy of the world.
    Our companies are proud to have played a role in that miracle, and 
we look forward to a long future providing the devices, components, and 
services that fuel the modern Internet. But this depends on a continued 
national commitment to building and deploying ever more capable and 
faster networks--something Title II puts at risk.
    While many experts have noted the damage Title II could do to 
network investment, the harm would cascade out far beyond the provision 
of broadband service because the Internet is now so entwined with our 
entire economy. As the White House explained last year, ``[the] build-
out of broadband infrastructure itself is a major driver of American 
investment and job creation. . .even more significant are the ways that 
connectivity is transforming a range of industries, from education to 
entertainment to agriculture to travel.'' \1\
---------------------------------------------------------------------------
    \1\ Office of Science and Technology Policy & The National Economic 
Council, Four Years of Broadband Growth (June 2013), http://
www.whitehouse.gov/sites/default/files/broadband_
report_final.pdf.
---------------------------------------------------------------------------
    Reversing course now by shifting to Title II means that instead of 
billions of broadband investment driving other sectors of the economy 
forward, any reduction in this spending will stifle growth across the 
entire economy.
    This is not idle speculation or fear mongering. And as some have 
already warned, Title II is going to lead to a slowdown, if not a hold, 
in broadband build out, because if you don't know that you can recover 
on your investment, you won't make it. One study estimates that capital 
investment by certain broadband providers could be between $28.1 and 
$45.4 billion lower than expected over the next five years if wireline 
broadband reclassification occurs.\2\ If even half of the ISPs decide 
to pull back investment to this degree, the impact on the tech 
equipment sector will be immediate and severe, and the impact would be 
even greater if wireless broadband is reclassified.
---------------------------------------------------------------------------
    \2\ USTelecom ex parte, FCC Docket 14-28 (Nov. 19, 2014) 
(submitting a study, ``The Impact of Title II Regulation of Internet 
Providers on Their Capital Investments by Kevin A. Hassett and Robert 
J. Shapiro), http://ustelecom.org/sites/default/files/documents/
ExParte_Title
II_Study_11.19.14_pb.pdf. The companies for which capital investment is 
estimated represent approximately half of industry capital spending.
---------------------------------------------------------------------------
    The investment shortfall would then flow downstream, landing first 
and squarely on technology companies like ours, and then working its 
way through the economy overall. Just a few years removed from the 
worst recession in memory, that's a risk no policymaker should accept, 
let alone promote.
    On behalf of all Americans who depend upon the broadband Internet 
that has flourished under the current approach, we urge you to reject 
backward looking demands for Title II classification, and remain 
faithful to the policy approach that has served the Nation well.
            Sincerely,

ACS Solutions
Actiontec Electronics, Inc.
ActiveVideo Networks
ADTRAN
Affirmed Networks
Alcatel-Lucent ARRIS
Asurion
Berry Test Sets
BlackArrow
Blonder Tongue
Broadcom
BTECH Inc
Casa-Systems
CBM of America
Ciena
Cisco
Commscope
Compass-EOS
Concurrent Computer
Corning
dLink
Drake
Enhanced Telecommunications, Inc.
Entropic
Ericsson
FiberControl
Finisar Corp
Gainspeed, Inc.
Go! Foton Corp
Harmonic
Humax Digital
IBM
Imagine Communications
Independent Technologies Inc.
Intel
Juniper Networks
KPG
MetroTel Corp.
Minerva Networks, Inc.
Netcracker Technology
Nokia Solutions and Networks
Optical Zonu Corp.
Pace
Panasonic Corporation of North America
Penthera Partners
Preformed Line Products, Inc.
Prysmian Communications Cable & Systems USA
Qualcomm
RGB Communications L.L.C.
Rovi
Sandvine
Sheyenne Dakota, Inc.
SNC Mfg. Co., Inc.
Sumitomo Electric Lightwave
Synacor
This Technology
Vermeer Corp.
Walker and Associates
Wintel

CC: Secretary of Commerce Penny Pritzker
White House Director of the National Economic Council Jeffrey Zients
White House Chairman of the Council of Economic Advisers Jason Furman
                                 ______
                                 
                                                  December 10, 2014

Hon. Harry Reid,
Senate Majority Leader,
Washington, DC.

Hon. John Boehner,
Speaker of the House,
Washington, DC.

Hon. Mitch McConnell,
Senate Republican Leader ,
Washington, DC.

Hon. Nancy Pelosi,
House Minority Leader,
Washington, DC.

Hon. Tom Wheeler,
Federal Communications Commission,
Washington, DC.

  
  
  

Dear Majority Leader Reid; Republican Leader McConnell; Speaker 
Boehner; Minority Leader Pelosi; and Chairman Wheeler:

    As members of the National Association of Manufacturers, the 
largest manufacturing association in the United States, representing 
14,000 small, medium and large manufacturers in every industrial sector 
and in all 50 states, we have strong concerns with proposals to 
regulate the Internet, which could have a negative impact on 
manufacturers' ability to innovate and broaden economic growth.
    Manufacturers vigorously support an open Internet. The robust 
telecommunications infrastructure that has been deployed over the past 
20 years has transformed the way our companies operate and has 
contributed significantly to the growth of the manufacturing sector in 
the United States. Indeed, our shop floors are some of the most highly 
sophisticated and connected environments in the world. Leveraging the 
open Internet has led to groundbreaking technological innovations in 
our products and processes.
    While the regulatory environment in place has encouraged this 
investment and innovation, current proposals to regulate the Internet 
with early 20th Century-era laws severely threaten continued growth. 
Our country cannot afford to derail this innovation with a burdensome 
regulatory scheme that will cut off incentives to invest in the 
networks our companies use.
    Therefore, we urge you to oppose any efforts to unnecessarily 
regulate the open Internet. Unnecessary regulation will lead to a 
slowdown in innovation, chill investment in future technologies and 
stall much needed economic growth.
            Sincerely,
AAM
ABB Inc.
ACE Clearwater
AGA Marvel
American Architectural Manufacturers Association
American Time & Signal Co., Inc.
Arcadia Chair Company
Associated Industries of Florida
Association for Manufacturing Excellence
Automatic Spring Products Corporation
Baker Boy
Ball Corporation
Belden Brick Company
Bergkamp Inc.
Bernier Cast Metals Inc.
Betts Company
Bison Gear & Engineering Corp.
Blackhawk Molding Co., Inc.
BTE Technologies
Cal Sheets LLC
California Manufacturers & Technology Association
Carolina Color Corporation
Cello-Wrap Printing Co., Inc.
Click Bond, Inc.
Cooper Standard Automotive
Corn Refiners Association
Custom Deco LLC
deVan Sealants, Inc.
DTE, Inc.
Emerson
Fabricators and Manufacturers Association, International
Federal Broach Holdings LLC
Fiberglass Coatings Inc.
French Oll Mill Machinery Co.
Glier's Meats Inc.
Heritage Plastics
Hess Pumice Products, Inc.
Highland Machine Co
Hudson Extrusions, Inc.
INDA, The Association of the Nonwoven Fabrics Industry
International Dairy Foods Association
Irex Corporation
Jackson Area Manufacturers Association
James Machine Works LLC.
Kaivac, Inc.
Kansas Chamber Koller Enterprises, Inc.
Marlin Steel Wire Products
Materion Technical Materials
McGregor Metalworking Companies
Memry Corporation
Metal Treating Institute
Miltec UV Corporation
Mississippi Manufacturers Association
Missouri Association of Manufacturers
Modine Manufacturing Company
Montana Chamber of Commerce
Narragansett Improvement Co
National Association of Manufacturers
National Council for Advanced Manufacturing
National Shooting Sports Foundation
Neenah Enterprises, Inc.
Nevada Manufacturers Association
North Carolina Chamber
Northeast PA Manufacturers and Employers Association
Oceanaire, Inc.
Osmose Holdings, Inc.
Painter Tool Inc.
Pennsylvania Manufacturers' Association
Perlick Corp
Power Technology Inc.
PRAB
Rekluse Motor Sports
Reshoring Institute
Resilient Floor Covering Institute
Rhode Island Manufacturers Association
RoMan Manufacturing Inc.
Sandmeyer Steel Company
SASCO Chemical Group, Inc.
Sioux Corporation
SKF USA Inc. SSAB
Stanley Black & Decker, Inc.
State Chamber of Oklahoma
Staub Manufacturing Solutions
Syncro Corporation
Techmer PM, LLC
Tenneco Inc.
Texas Association of Business
The Manufacturing Consortium
The Ohio Manufacturers' Association
TMP Technologies Inc.
Trippe Manufacturing Company
United Equipment Accessories, Inc.
USG Corporation
Valley Industrial Association
Ventahood, Ltd.
Vermeer Corporation
WEIDMANN Electrical Technology, Inc.
WilliamsRDM, Inc.
Worksman Cycles

Cc: Members of the House Energy and Commerce Committee
Members of the Senate Commerce, Science, and Transportation Committee
The Honorable Mignon Clyburn
The Honorable Jessica Rosenworcel
The Honorable Ajit Pai
The Honorable Michael O'Rielly
The Honorable Penny Pritzker, U.S. Secretary of Commerce
Mr. Jeffrey Zients, Director of the National Economic Council and 
Assistant to the President for Economic Policy
Dr. Jason Furman, Chairman of the Council of Economic Advisers
                                 ______
                                 
                                                   January 20, 2015
Senator John Thune,
Chairman,
Senate Commerce Committee,
Washington, DC.

Senator Bill Nelson,
Ranking Member,
Senate Commerce Committee,
Washington, DC.

Congressman Fred Upton,
Chairman,
House Energy and Commerce Committee,
Washington, DC.

Congressman Frank Pallone
Ranking Member,
House Energy and Commerce Committee,
Washington, DC.

Dear Mssrs. Chairmen and Ranking Members:

    Congress, not three unelected officials, should decide the future 
of the Internet.
    The Federal Communications Commission (FCC) has twice tried to 
regulate the Internet in the name of ``Net Neutrality''--and twice 
failed in court. Lawmakers of both parties have proposed legislation 
that would avoid the need for the FCC to try again--yet FCC Chairman 
Tom Wheeler seems intent on issuing new rules. Worse, he plans to break 
with two decades of bipartisan consensus that the Internet should not 
be subject to 1930s public utility regulation.
    We worry about the unintended consequences of any form of 
regulation--but also recognize that legislation appears to be the only 
way to stop the FCC from trying to impose Title II of the 
Communications Act on the Internet and thus prevent years of ensuing 
litigation. To prevent a slippery slope towards broader regulation of 
the Internet, any legislative compromise must tightly constrain the 
FCC's authority and discretion. At a minimum, that means three things:

  1.  Congress must bar the FCC from imposing Title II on the Internet. 
        Title II was developed for the telephone monopoly of the 1930s; 
        it is utterly inappropriate for the dynamic Internet ecosystem. 
        Invoking Title II threatens both to impose billions of dollars 
        of taxes and fees on consumers, undermine broadband investment, 
        and drag ``edge'' companies into a regulatory morass.

  2.  Congress must clarify that it did not intend the 1996 Telecom Act 
        to give the FCC a blank check to regulate the Internet. In its 
        Verizon decision, the D.C. Circuit mistakenly upheld the FCC's 
        2010 re-interpretation of Section 706 of that Act as allowing 
        it to regulate any form of ``communications'' in any way the 
        agency claims would promote broadband deployment or adoption--
        not just broadband companies or net neutrality.

  3.  If Congress gives the FCC clear rules and the power to enforce 
        them, the Commission will not need the power to write 
        additional rules. Congress, not the FCC, should decide whether 
        additional rules become necessary. (Case-by-case enforcement is 
        how the FCC's 2010 Open Internet Order and its 2014 proposed 
        rules would have worked anyway.)
    We urge you to proceed with dispatch, but also with the utmost 
caution and through regular order in the normal legislative process. 
Only Congress can craft a solution that is appropriately narrow, avoids 
endless legal challenges, and puts this divisive issue behind us. Only 
then can we move on to many long-overdue reforms--such as opening up 
more spectrum for mobile broadband, clearing actual regulatory barriers 
to broadband deployment and competition, and updating the 
Communications Act for the Digital Age.
            Sincerely,

ORGANIZATIONS                                            INDIVIDUALS (Organizations listed here are for
                                                          identification only)
 TechFreedom
 
 Americans for Tax Reform
 
 Americans for Prosperity
 
 Center for Individual Freedom
 
 Competitive Enterprise Institute
 
 Council for Citizens Against Government Waste
 
 Information Technology and Innovation
 Foundation
 
 Institute for Liberty
 
 Institute for Policy Innovation
 
 International Center for Law & Economics
 
 Lincoln Labs
                                                          Daniel Berninger, founder, VCXC
 Taxpayers Protection Alliance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

                                 ______
                                 
Dear Chairman Wheeler:

    Last month, President Obama issued a statement urging the FCC to 
reclassify consumer broadband service under Title II of the 
Communications Act. We are writing on behalf of Business Roundtable's 
membership to express opposition to using Title II of the 1934 
Communications Act as the principal basis for FCC action to maintain an 
open Internet.
    Business Roundtable CEOs believe that government intervention in 
the economy is occasionally necessary to achieve societal goals. 
However we also believe that such intervention must be done in a way 
that promotes economic growth and job creation. For this reason, our 
membership strongly advocates for smart regulation and believes in the 
following principles:

   Regulation must be justified by a compelling public need, 
        such as demonstrated market failure.

   Regulatory decisions should be based on the best available 
        information, not speculation.

   Regulatory choices should maximize certainty and minimize 
        burdens, so as to promote investment, innovation, and 
        competitiveness.

    Business Roundtable is opposed to applying last century's 
regulatory tools to our rapidly-evolving Internet. We believe that it 
is also unwarranted given the lack of demonstrated market failure to 
maintain an open Internet. You will find in the attachment further 
background on Business Roundtable's position on this issue and thoughts 
on a reasonable path forward.
    Thank you for considering our views, and we look forward to working 
with you on a path forward for this issue that meets the principles of 
smart regulation.
            Sincerely,
                                               John Engler.
                                 ______
                                 
                                         Business Rountable
                                                   January 20, 2015

   Business Roundtable Position on Regulation of Consumer Broadband 
            Service under Title II of the Communications Act

    Regulation remains a top concern of America's business leaders. 
According to the most recent Business Roundtable (BRT) CEO Economic 
Outlook Survey, nearly 40 percent of our members listed regulations as 
the greatest cost pressure facing their businesses--making regulation 
the top cost pressure for the third year in a row.i 
Moreover, nearly half of CEOs cited regulatory issues as a top factor 
holding back the pace of U.S. investment spending.ii This is 
why BRT is a strong advocate of smart regulation that promotes economic 
growth and job creation, while achieving societal goals.
---------------------------------------------------------------------------
    \i\ Business Roundtable, CEO Economic Outlook Survey Q4 2014 
(December 2014), available at http://businessroundtable.org/resources/
ceo-survey/2014-Q4.
    \ii\ Id.
---------------------------------------------------------------------------
    This fundamental principle of smart regulation has also long and 
widely been recognized, for example in executive orders: 
wiii
---------------------------------------------------------------------------
    \iii\ See, e.g., E.O. 13563, ``Improving Regulation and Regulatory 
Review,'' 76 Fed. Reg. 3821 (Jan. 18, 2011); E.O. 13579, ``Regulation 
and Independent Regulatory Agencies,'' 76 Fed. Reg. 41587 (July 14, 
2011).

   Regulation should be justified by a compelling public need, 
---------------------------------------------------------------------------
        such as demonstrated market failure.

   Regulatory decisions should be based on the best available 
        information, not speculation.

   Regulatory choices should maximize certainty and minimize 
        burdens, so as to promote investment, innovation and 
        competitiveness.

    Last month, President Obama issued a statement urging the FCC to 
reclassify consumer broadband service under Title II of the 
Communications Act.iv Doing so would violate the principles 
of smart regulation for the reasons outlined below:
---------------------------------------------------------------------------
    \iv\ http://www.whitehouse.gov/the-press-office/2014/11/10/
statement-president-net-neutrality.

   Private markets have not failed; to the contrary, the basic 
        elements of an open Internet have evolved and persisted 
---------------------------------------------------------------------------
        voluntarily within the Internet ecosystem.

   Arguments to reclassify consumer broadband service under 
        Title II are based primarily on speculation, not empirical data 
        and historical experience.

   Title II would substantially burden consumer broadband 
        service and create profound uncertainty for Internet service 
        providers (ISPs). Innovation, investment, and consumers would 
        all suffer.

    The last point bears further emphasis. Consumer broadband currently 
operates in an environment in which all participants are free to 
innovate in response to changes in consumer demand, technology, or 
other market features. Under Title II, virtually any action by an ISP 
that potentially affects consumer broadband service would require FCC 
approval--a time-consuming, costly and unpredictable process.
    Reclassification under Title II will result in increased consumer 
fees at the federal, state and local levels. According to a recent 
analysis conducted by economists Robert Litan and Hal Singer of the 
Progressive Policy Institute, reclassification under Title II could 
result in $17 billion in new consumer fees, including $15 billion in 
state and local fees and $2 billion in fees for the Federal Universal 
Service Fund.v This $17 billion in additional fees equates 
to approximately $67 per year per wireline broadband connection and $72 
per year per wireless broadband connection.vi To put these 
figures in context, consider that the average wireline broadband 
connection currently costs consumers roughly $537 per year and the 
average wireless broadband connection currently costs consumers $585 
per year.vii In short, if broadband services are 
reclassified and regulated under Title II, the average consumer's 
annual Internet bill could increase by more than 12 percent due to new 
fees at the federal, state and local levels. In addition to higher 
consumer costs, reclassification under Title II would contribute to 
heightened market uncertainty. High levels of uncertainty are harmful 
to capital spending in any industry, but the long-lived investments 
made by telecommunications firms should be especially sensitive to it. 
This would greatly hamper ISPs' ability to innovate, and could 
potentially reduce innovation throughout the broader economy and place 
the United States at a competitive disadvantage vis-a-vis other 
countries in the allocation of global capital.
---------------------------------------------------------------------------
    \v\ Robert Litan and Hal Singer, Outdated Regulation Will Make 
Consumers Pay More for Broadband (December 2014), available at http://
www.progressivepolicy.org/wp-content/uploads/2014/12/2014.12-Litan-
Singer_Outdated-Regulations-Will-Make-Consumers-Pay-More-for-
Broadband.pdf.
    \vi\ Id.
    \vii\ Id.
---------------------------------------------------------------------------
    Finally, reclassification under Title II is also likely to reduce 
ISPs' extraordinary level of capital investment in faster and more 
widely-available broadband services. For instance, according to Hassett 
and Shapiro (2014), applying Title II regulation to ISPs is projected 
to reduce total capital investment in the telecommunications industry 
by $28-$45 billion over a five-year period--a decline of approximately 
13-21 percent compared to the status quo.\1\ Importantly, even if the 
FCC can successfully exercise its powers to forebear from applying 
certain aspects of Title II in the near term (which is not a foregone 
conclusion), the prospect that future administrations or Commissions 
will reverse course, could have a chilling effect on industry 
investment.
---------------------------------------------------------------------------
    \1\ Kevin A. Hassett and Robert Shapiro, The Impact of Title II 
Regulation of Internet Providers on Their Capital Investments (November 
2014), available at http://www.sonecon.com/docs/studies/
Impact_of_Title_II_Reg_on_Investment-Hassett-Shapiro-Nov-14-2014.pdf.
---------------------------------------------------------------------------
    Ironically, in the call to regulate ISPs under Title II is that 
there is already broad agreement regarding the principles outlined in 
the FCC's current Open Internet proposal:

   Transparency on the part of ISPs regarding the policies that 
        govern their networks;

   No blocking of legal content; and

   No commercially unreasonable discrimination, including 
        favoring traffic from affiliated entities.\2\
---------------------------------------------------------------------------
    \2\ http://www.fcc.gov/guides/open-internet.

    Further, it is not at all clear that Title II would actually 
authorize the FCC to impose the kinds of bright-line prohibitions that 
the President seeks.
    BRT believes that there are smarter ways to implement these 
principles, as an example under Section 706 of the Telecommunications 
Act of 1996 or with new, more targeted legislation. We remain firmly 
opposed to attempting to do so by reclassifying consumer broadband 
service under Title II because it will not fuel the American economy 
but, rather, burden it.
    For further information, please contact Liz Gasster of Business 
Roundtable at (202) 496-3274 or [email protected].
About Business Roundtable
    Business Roundtable's CEO members lead companies with $7.2 trillion 
in annual revenues and nearly 16 million employees. BRT member 
companies comprise more than a quarter of the total market 
capitalization of U.S. stock markets and invest $190 billion annually 
in research and development--equal to 70 percent of U.S. private R&D 
spending. Our companies pay more than $230 billion in dividends to 
shareholders and generate more than $470 billion in sales for small and 
medium-sized businesses annually. BRT companies also make more than $3 
billion a year in charitable contributions.
                                 ______
                                 
                                                   January 22, 2015

Senator John Thune,
Chair,
Committee on Commerce, Science, and Transportation,
Washington, DC.

Senator Bill Nelson,
Ranking Member,
Committee on Commerce, Science, and Transportation,
Washington, DC.

Dear Chairman Thune & Ranking Member Nelson:

    We appreciate the Committee interest in Net Neutrality and commend 
the Committee for holding yesterday's hearing on ``Protecting the 
Internet and Consumers Through Congressional Action.'' The undersigned 
groups represent the interests of higher education and libraries, which 
rely on an open Internet to provide vital educational and research 
services to students, the public and the Federal Government itself. We 
joined together last year to release a set of Principles for an Open 
Internet that we believe could be useful to the Committee.
    As the Committee considers legislation on this topic, we urge you 
to incorporate the views of the library and higher education 
communities. We have attached our initial comments to the Federal 
Communications Commission from last July, including our Principles, 
which explain in detail how an open Internet is essential to ensuring 
that our higher education and library systems and university-based 
research remain the finest in the world. The comments also provide a 
model for reforms to ensure an open Internet for all.
    Please contact us with any questions or concerns. We look forward 
to working with the Committee on these important issues.
            Sincerely,
                                                Kevin Maher
                                          American Library Association.

                                                Krista Cox,
                                     Association of Research Libraries.

                                           Jarret Cummings,
                                                              EDUCAUSE.
                                 ______
                                 
                               Before the
                   FEDERAL COMMUNICATIONS COMMISSION
                          Washington, DC 20554


In the Matter of                            )
                                            )
Protecting and                              )       GN Docket No. 14-28
 Promoting
the Open Internet                           )
                                            )
 

                              Comments of 
        American Association of State Colleges and Universities
                     American Council on Education
                      American Library Association
                  Association of American Universities
              Association of College & Research Libraries
           Association of Public and Land-grant Universities
                   Association of Research Libraries
                Chief Officers of State Library Agencies
                    Council of Independent Colleges
                               EDUCAUSE 
                                  And 
                      Modern Language Association
                             July 18, 2014

Executive Summary
    Libraries and institutions of higher education depend upon an open 
Internet to carry out their missions and to serve their communities. 
Our organizations are extremely concerned that broadband Internet 
access providers that offer services to the general public (i.e., 
public broadband Internet access providers) currently have the 
opportunity and financial incentive to block, degrade or discriminate 
against certain content, services and applications. We thus support 
strong, enforceable policies and rules to protect and promote an open 
Internet.
    The specific proposals in the Notice of Proposed Rulemaking (NPRM) 
fall short of what is necessary to ensure that libraries, institutions 
of higher education and the public at large will have access to an open 
Internet. It proposes different rules for fixed and mobile broadband 
access when there is no technological reason to do so. Furthermore, the 
proposed rules appear to endorse individually-negotiated contracts that 
could grant some users expedited transmission and prioritized content, 
thereby relegating non-prioritized users to a ``slow lane.''
    In these comments, we suggest ways to strengthen the proposed rules 
and ensure that they preserve an open Internet for libraries, higher 
education and the communities we serve. For instance,

   the proposed open Internet rules should explicitly apply to 
        public broadband Internet access service provided to libraries, 
        institutions of higher education and other public interest 
        organizations;

   the rules should prohibit ``paid prioritization;''

   the proposed rules should be technology-neutral and should 
        apply equally to fixed and mobile services;

   the Federal Communications Commission (FCC) should adopt a 
        re-defined ``no-blocking'' rule that bars public broadband 
        Internet access providers from interfering with the consumer's 
        choice of content, applications, or services;

   the FCC should strengthen the disclosure rules; and

   the proposed ombudsman should be charged with protecting the 
        interests of libraries and higher education institutions and 
        other public interest organizations, in addition to consumers 
        and small businesses.

    Regarding the scope of the proposed rules, the FCC should clarify 
that its rules only apply to those network providers that offer service 
to the general public and do not apply to private networks that do not 
serve the general public or to end user Wi-Fi provided by coffee shops, 
libraries and colleges and universities.
    The FCC has all necessary authority to implement open Internet 
rules sufficient to protect and promote the openness of the Internet. 
Title II reclassification would provide valuable certainty to the 
marketplace and place public broadband Internet access service on an 
equal regulatory footing with other communications services. In the 
alternative, we agree with the FCC that enforceable rules could be 
created under its Section 706 authority. We have serious reservations, 
however, about the viability of the proposed ``commercially 
reasonable'' standard. If the FCC chooses to implement open Internet 
rules under Section 706, it should craft a different standard that 
reflects the unique character of the Internet as an open platform for 
innovation, freedom of speech, research and learning, which we suggest 
could be called an ``Internet reasonable'' standard.
                                 ______
                                 
                           Table of Contents
I. Introduction
II. The FCC Should Specifically Recognize the Importance of an Open 
        Internet for Research, Education, the Free Flow of Information, 
        and Other Public Interest Benefits Provided by Institutions of 
        Higher 
        Education and Libraries

    A.  From Its Inception in University Laboratories, the Internet Was 
            Created In a Higher Education Culture that Values Openness, 
            Research, Learning and Freedom of Expression, and the FCC 
            Should Seek to Preserve These Foundational Characteristics 
            of the Internet

    B.  Libraries and Higher Education Bring the Benefits of the 
            Internet to Segments of the Population that May Not Be 
            Served by the Commercial Sector

    C.  Higher Education and Libraries Are at the Forefront of Internet 
            Innovation

    D.  The Final Order in this Proceeding Should Recognize the Value 
            of the Internet for Research, Learning, Education and 
            Freedom of Speech
III. The FCC Should Design Strong Open Internet Rules to Preserve the 
        Unique and Vitally Important Character of the Internet to 
        Promote 
        Research, Learning, Education and the Free Flow of Information

    A.  The Scope of the Rules Should Cover All Institutions that Serve 
            the Public Interest, Including Higher Education and 
            Libraries

    B.  The Commission Should Prohibit Paid Prioritization

    C.  The Scope of the Rules Should Clearly State that the Open 
            Internet Rules Do Not Apply to Private Networks or End 
            Users

    D.  The Rules Should Be Technology-Neutral

    E.  The FCC Should Clarify the Disclosure Rules to Ensure that 
            Information about Data Caps and Bandwidth Speeds are 
            Displayed Prominently and Clearly to Consumers and Edge 
            Providers

    F.  The FCC Must Establish a Firm ``No Blocking'' Policy for Both 
            Mobile and Fixed Broadband Providers, and the Policy Should 
            Focus on the End User Perspective

    G.  The Commission's Enforcement Ombudsperson Should Be Authorized 
            to Act as a Watchdog for Libraries and Higher Education
IV. The Commission Has All Necessary Authority to Implement Open 
        Internet Rules Sufficient to Preserve the Character of the 
        Internet as an Open Platform for Education, Research and Free 
        Speech

    A.  Classifying Public Broadband Internet Access Service as a Title 
            II Common Carriage Service Offers a Strong, Certain Path to 
            Preserving an Open Internet

    B.  Section 706 Offers an Effective Path to Preserving an Open 
            Internet If Based on an ``Internet Reasonable'' Standard
V. Conclusion
Appendix A: Net Neutrality Principles
Appensix B: About the Organizations
                                 ______
                                 
I. Introduction
    The American Association of State Colleges and Universities 
(AASCU), the American Council on Education (ACE), American Library 
Association (ALA), the Association of American Universities (AAU), the 
Association of College & Research Libraries (ACRL), the Association of 
Public and Land-grant Universities (APLU), the Association of Research 
Libraries (ARL), the Chief Officers of State Library Agencies (COSLA), 
Council of Independent Colleges (CIC), EDUCAUSE and the Modern Language 
Association (MLA) \1\ welcome the opportunity to submit these comments 
in response to the Notice of Proposed Rulemaking (NPRM) in this 
proceeding \2\ to protect and promote the open Internet.\3\
---------------------------------------------------------------------------
    \1\ Brief descriptions of each of these organizations are contained 
at the end of the Appendix.
    \2\ FCC 14-61, released May 15, 2014.
    \3\ Many of the signatories to these comments representing 
institutions of higher education and libraries published our key Net 
Neutrality Principles for protecting and promoting the open Internet on 
July 10, 2014 (attached as Appendix A). We recommend these Principles 
as a framework for resolving many of the issues in this proceeding. 
These comments offer more detailed suggestions regarding some of the 
specific questions raised in the NPRM.
---------------------------------------------------------------------------
    Our nation's libraries and institutions of higher education are 
leaders in creating, fostering, using, extending and maximizing the 
potential of the Internet for research, education and the public good. 
Libraries and institutions of higher education \4\ depend upon an open 
Internet to fulfill their missions and serve their communities.
---------------------------------------------------------------------------
    \4\ While our comments reflect the views of the libraries and 
higher education organizations, we note that governmental 
organizations, K-12 education, community-based organizations and other 
similar organizations whose missions are to serve the public interest 
benefit from an open Internet as well.
---------------------------------------------------------------------------
    Our organizations are thus extremely concerned with the current 
void in policies to protect the openness of the Internet. As a result 
of the D.C. Circuit Court of Appeals decision in Verizon v. FCC, \5\ 
there are currently no rules or policies in effect to guard against 
blocking or discriminatory behavior by broadband Internet access 
providers. Broadband providers that serve the general public (which we 
refer to herein as ``public broadband Internet access providers'') 
currently have the financial incentive and the opportunity to sell 
higher priority access to certain content providers and discriminate 
against other providers who do not have the resources to pay for 
enhanced access. Allowing public broadband providers to degrade or 
discriminate against library or higher education content jeopardizes 
our institutions' ability to fulfill our public interest missions and 
educational goals.
---------------------------------------------------------------------------
    \5\ Verizon v. FCC, 740 F.3d 623 (D.C. Cir. 2014)(``Verizon'').
---------------------------------------------------------------------------
    Our organizations strongly urge the FCC to adopt enforceable rules 
that ensure an open Internet. We believe that the FCC has all necessary 
authority to establish such rules. Title II provides valuable certainty 
to the marketplace and places public broadband Internet access service 
on an equal regulatory footing with other communications services. If 
Title II reclassification is not feasible, however, the FCC should 
craft enforceable rules using its authority under Section 706. We have 
serious reservations, however, about the viability of the 
``commercially reasonable'' standard proposed by the Commission. As we 
explain in more detail below, the FCC should adopt a standard that 
reflects the unique character of the Internet as a platform for 
innovation, free speech, research and education, which we suggest could 
be called the ``Internet reasonable'' standard.
    Our comments proceed as follows:

   First, these comments will explain why protecting and 
        promoting an open Internet is so vitally important to the 
        missions of institutions of higher education and libraries and 
        to the students, teachers, researchers, library patrons and the 
        communities that these institutions serve.

   Second, these comments will discuss some of the specific 
        proposals raised in the NPRM and will suggest alternate 
        approaches to some of the key issues that are necessary to 
        protect and promote an open Internet for entities that serve 
        the public interest, such as libraries and institutions of 
        higher education.

   Third, these comments will discuss the legal basis for the 
        FCC's actions to protect and promote the open Internet in the 
        wake of the Court of Appeals decision. In particular, we will 
        discuss the merits of Title II reclassification, as well as an 
        ``Internet reasonable'' standard under Section 706.
II. The FCC Should Specifically Recognize the Importance of an Open 
        Internet for Research, Education, the Free Flow of Information, 
        and Other Public Interest Benefits Provided by Institutions of 
        Higher 
        Education and Libraries
    High-capacity broadband is the key infrastructure that libraries, 
community colleges, public and private colleges and universities, and 
many other institutions need to carry out their public interest 
missions. These institutions rely on open Internet access both to 
retrieve and contribute content on the World Wide Web. In fact, the 
public interest missions of libraries and institutions of higher 
education are highly intertwined with the Internet. The democratic 
nature of the Internet as a neutral platform for carrying information 
and research to the general public is strongly aligned with the public 
interest missions of libraries and higher education.
    Unfortunately, the NPRM does not give sufficient recognition to the 
value of the Internet for education, learning, research and other 
public services. While the NPRM properly describes the importance of 
the Internet for innovation and commerce, the educational and public 
interest benefits of an open Internet are just as important.
    This section of these comments provides an overview of the 
Internet-based services and content that libraries and institutions of 
higher education provide to their communities and explains why the FCC 
should incorporate our institutions' perspective into its open Internet 
rules.
A. From Its Inception in University Laboratories, the Internet Was 
        Created In a Higher Education Culture that Values Openness, 
        Research, Learning and 
        Freedom of Expression, and the FCC Should Seek to Preserve 
        These 
        Foundational Characteristics of the Internet
    The initial protocols for the Internet were developed by 
institutions of higher education, and universities were the first to 
deploy private high-speed data networks that formed the test-bed for 
what later became the public Internet.\6\ The Internet arose out of the 
same university mindset that promotes the open exchange of information, 
intellectual discourse, research, free speech, technological 
creativity, innovation and learning. This essential character of the 
Internet as an open platform should be preserved by the FCC. 
Incorporating these principles into treatment of Internet access is 
especially important in today's age when Internet access is provided by 
commercial companies. Internet openness is an essential driver of the 
``virtuous circle'' that both the FCC and the Federal court have 
recognized as the engine for Internet development. The unimpeded flow 
of knowledge, information, and interaction across the Internet enables 
the circle of innovation, user demand, and subsequent broadband 
expansion that have generated the dramatic social, cultural, and 
economic benefits acknowledged by the Commission, the courts, and the 
Nation as a whole.
---------------------------------------------------------------------------
    \6\ There are several papers that document the role of university 
professionals in creating the protocols that developed into what we 
know as the Internet today. One brief summary of these efforts is 
available at http://www.internetsociety.org/internet/what-internet/
history-internet/brief-history-internet.
---------------------------------------------------------------------------
B. Libraries and Higher Education Bring the Benefits of the Internet to 
        Segments of the Population that May Not Be Served by the 
        Commercial Sector
    An open Internet is especially important for libraries to serve the 
needs of the most vulnerable segments of our population, including 
those in rural areas, unemployed and low-income consumers, and elderly 
and disabled persons. Public libraries specialize in providing Internet 
access to all people, especially the roughly one-third of people who do 
not have broadband access at home. Local public libraries offer the 
only no-fee public Internet access in over 60 percent of all 
communities.\7\ The general public depends upon the availability of 
open, affordable Internet access from their local libraries to complete 
school homework assignments, locate e-government services, research 
family histories, find health information, learn from job-training 
videos and apply for jobs, download streaming media, upload and share 
their own digital content, and more. The nation as a whole benefits 
when libraries and their patrons have access to open, high-speed, 
online information and services. Two-thirds of public libraries report 
they would like to increase their broadband speeds, largely driven by 
community demand for high-speed wired and Wi-Fi Internet access and the 
services enabled by this library broadband infrastructure.\8\
---------------------------------------------------------------------------
    \7\ See, http://www.plinternetsurvey.org/analysis/public-libraries-
and-community-access.
    \8\ Institute of Museum and Library Services Public Hearing: 
``Libraries and Broadband: Urgency and Impact''. See transcript at 
http://www.imls.gov/about/broadband_hearing.aspx.
---------------------------------------------------------------------------
    Similarly, colleges and universities make Internet access available 
to their entire student bodies, faculty, researchers and 
administrators. Higher education institutions make the Internet 
accessible and plentiful so that it provides a foundation for Internet-
based learning and experimentation. College students who may not have 
broadband at home are able to develop a familiarity with the Internet 
on campus that they can take with them to their jobs, their families 
and their lives after college. Furthermore, the majority of college 
students live off-campus, which means that students rely on the 
availability of the public Internet for access to (increasingly media-
rich) courses and learning resources, academic and student support, 
faculty and peer collaboration, and more.
    This is particularly the case for the rapidly growing population of 
students in distance learning or hybrid \9\ courses, where all or a 
significant portion of the learning process takes place away from 
campus. Distance learning and hybrid courses increase higher education 
access, making it possible for adult learners and other students to 
pursue their academic goals when a traditional, campus-based academic 
experience might make that infeasible. However, such courses and 
programs also make those students' learning experience highly dependent 
on high-bandwidth Internet access. Online courses rely more and more on 
multi-media resources, adaptive learning applications, and dynamic 
simulations for interactivity, engagement, and subsequent learning 
success. Just as degradation of Internet transmission speed can make an 
online video or video game for personal entertainment unwatchable or 
unplayable, such degradation could easily frustrate a learning 
experience utilizing online video, simulations, and so forth, with dire 
implications for the student, family, community, and our country, writ 
large.
---------------------------------------------------------------------------
    \9\ In ``hybrid courses,'' students learn in the classroom for part 
of the course time while learning online for other portions of the 
course time. For example, a hybrid course might have students attending 
class on campus once a week while learning via online modalities for 
the remainder of the course time that week.
---------------------------------------------------------------------------
C. Higher Education and Libraries Are at the Forefront of Internet 
        Innovation
    Libraries and higher education institutions have been leaders in 
developing innovative uses of Internet bandwidth and new learning 
methodologies from the Internet's inception. Today, higher education 
institutions use the public Internet to advance learning (both in class 
and at a distance, including innovations such as massive open online 
courses, or MOOCs), research (especially around ``big data''), Digital 
Humanities \10\ and scholarly collaboration. Higher education 
specializes in developing innovative online learning services, such as 
multimedia instructional resources, dynamic simulations, and cloud 
computing capabilities.
---------------------------------------------------------------------------
    \10\ For a brief introduction into the new field of Digital 
Humanities, please see ``A Guide to Digital Humanities'' provided by 
Northwestern University, available at http://sites.lib
rary.northwestern.edu/dh/.
---------------------------------------------------------------------------
    Libraries have been among the most innovative Internet users and 
generators of online content. Virtually every library across the 
country now provides broadband services to its patrons at no charge, 
and 98 percent of public libraries provide wireless (Wi-Fi) access as 
well. Library patrons are constantly using the Internet to take 
advantage of educational services, remote medical services, job-
training courses, distance learning classes, access to e-government 
services, computer and technology training, and more. Furthermore, 
librarians specialize in collecting and hosting robust databases of 
information, digitizing unique community artifacts and records, 
engaging community conversations through social media, developing 
innovative media, and preserving the free flow of information and 
research over the public Internet for all people.
    Below are some specific examples of projects and services that 
highlight our institutions' value in providing access to information 
and the importance of the open Internet in disseminating such 
information.\11\
---------------------------------------------------------------------------
    \11\ Additional examples of library and higher education uses of 
the open Internet are available here: http://www.arl.org/storage/
documents/publications/lt-pubint-nn13dec10.pdf.

   The National Library of Medicine (NLM), the world's largest 
        medical library, provides a vast amount of information-based 
        services, ranging from video tutorials to downloads of large 
        genomic datasets. NLM provides valuable information and data to 
        the public amounting to trillions of bytes each day 
        disseminated to millions of users. Without rules to protect the 
        open Internet, NLM's ability to provide access to this 
---------------------------------------------------------------------------
        important information would be jeopardized.

   Columbia University created the 9/11 Oral History Project, 
        focusing on the aftermath of the destruction of the World Trade 
        Center. The Project includes over 900 recorded hours on digital 
        media. More than half of the Columbia collection is open and 
        available to the public, and the entire archive will eventually 
        be available for study and research. This content is currently 
        used in New York K-12 public schools.

   After receiving over 2,500 boxes of records and documents 
        and 12,000 promotional photographs from the New York World's 
        Fair of 1939 and 1940, the New York Public Library (NYPL) 
        digitized the content and makes it available online. It 
        provided the material in a free app that was later named one of 
        Apple's ``Top Education Apps'' of 2011 and is used in New York 
        K-12 public schools.

   The Ann Arbor Public Library has produced and shared close 
        to 150 podcasts featuring interviews from a local historian 
        discussing the Underground Railroad, to a fifth-grader talking 
        about library programs for kids her age, to Top Chef Steph. The 
        library also hosts the Ann Arbor Film Festival Archive, among 
        dozens of local history digital collections.

   The Iowa City Public Library encourages interest and 
        awareness of local musicians with a digital collection of more 
        than 100 albums by artists playing everything from electronica 
        to children's music. The collection includes out-of-print music 
        and live shows.

   The North American Network of Science Labs Online (NANSLO) 
        is an alliance of cutting-edge science laboratories that 
        provide students enrolled in higher education science courses 
        with opportunities to conduct their lab experiments on state-
        of-the-art science equipment over the Internet. From any 
        computer, students can log into one of the labs' web interfaces 
        and manipulate the controls on a microscope or other scientific 
        equipment, participate in conversations with lab partners, ask 
        for assistance from a knowledgeable lab technician in real 
        time, and collect data and images for their science 
        assignments. NANSLO makes it possible for students who cannot 
        go to campus for a lab course because of their rural location 
        or family and work obligations to still pursue a science 
        degree.

   Scholars in the digital humanities from around the country 
        are integrating historical documents and data sources with 
        audio, video, and interactive simulations to provide students 
        and the general public with online access to immersive learning 
        experiences. For example, the University of Richmond's Digital 
        Scholarship Lab has developed ``Hidden Patterns of the Civil 
        War,'' a collection of interrelated projects that use digital 
        tools and digital media to provide interactive representations 
        of Civil War era social, cultural, political, and economic 
        developments. As another example, the University of California, 
        Los Angeles Center for Digital Humanities maintains the Digital 
        Karnak Project, which provides students, faculty, and the 
        public with an online, interactive, three-dimensional virtual 
        reality model of the ancient Egyptian temple site of Karnak 
        accompanied by original videos, maps, and essays.

   nanoHUB serves as an online platform for nanotechnology 
        research, education, and collaboration. The site hosts hundreds 
        of online simulation programs for nanoscale phenomena. It also 
        provides online presentations, courses, learning modules, 
        podcasts, animations, teaching materials, and more. In 
        addition, the site offers researchers a venue to explore, 
        collaborate, and publish content, as well. Through nanoHUB-U, 
        undergraduate and graduate students in engineering and applied 
        sciences can access both instructor-led and self-paced courses 
        incorporating online video and simulations, allowing them to 
        obtain an essential grounding in the field.
D. The Final Order in this Proceeding Should Recognize the Value of the 
        Internet for Research, Learning, Education and Freedom of 
        Speech
    In principle, the higher education and library communities strongly 
value and support the open Internet as a fundamental cornerstone for 
preserving our democracy and enhancing freedom of speech in the 
information age. In practice, the education and library communities 
need an open, accessible Internet for ``nuts and bolts'' services--
distance learning, telemedicine, access to e-government services, and 
many other essential community services. Educators and librarians are 
continuously developing new digital content, e-learning services and 
other teaching tools that depend on unfettered access to the Internet.
    As mentioned earlier, the NPRM does not give sufficient attention 
to the Internet's importance to education, research and free speech. We 
urge the FCC to incorporate the needs of libraries and institutions of 
higher education into its rationale justifying its open Internet 
policies. In addition, we also provide some specific policy suggestions 
below.
III. The FCC Should Design Strong Open Internet Rules to Preserve the 
        Unique and Vitally Important Character of the Internet to 
        Promote 
        Research, Learning, Education and the Free Flow of Information
    Our organizations suggest that the FCC make the following changes 
to its proposed rules to reflect the needs and interests of higher 
education and libraries.
A. The Scope of the Rules Should Cover Broadband Providers that Serve 
        the Public and Institutions that Serve the Public Interest, 
        Including Higher Education and Libraries
    The NPRM proposes to retain the same definitions and scope of the 
FCC's rules as were adopted in the 2010 Open Internet Order.\12\ The 
definitions in the FCC's 2010 Open Internet Order, however, do not 
clearly include all the entities that should be included. The 
definitions should include all libraries, higher education and other 
public interest organizations explicitly.\13\
---------------------------------------------------------------------------
    \12\ Preserving the Open Internet, GN Docket No. 09-191, WC Docket 
No. 07-52, Report and Order, 25 FCC Rcd 17905 (Open Internet Order).
    \13\ In the proceedings leading up to the FCC's 2010 Open Internet 
Order, ALA, ARL and EDUCAUSE filed multiple comments to ensure that the 
needs of libraries, higher education and other public interest 
institutions were included in the FCC's policies. (See, e.g., Ex parte 
letter from ALA, ARL and EDUCAUSE in General Docket No. 09-191 and WC 
Docket No. 07-52, December 13, 2010.) While we were gratified that the 
FCC changed the definition of ``end user'' to include ``schools and 
libraries'', this language does not reflect the needs of all libraries, 
higher education and other public interest institutions in an open 
Internet, as we discuss in more detail below.
---------------------------------------------------------------------------
    The 2010 Open Internet Order applied the agency's open Internet 
rules only to ``mass market'' services, which it defined as:

        a service marketed and sold on a standardized basis to 
        residential customers, small businesses, and other end-user 
        customers such as schools and libraries, including services 
        purchased with support of the E-rate program.\14\
---------------------------------------------------------------------------
    \14\ NPRM, para. 54.

    This definition needs to be clarified to ensure that the term 
``other end-user customers'' clearly includes institutions of higher 
education and other institutions that purchase standardized broadband 
Internet access service.\15\ Certainly, institutions of higher 
education are not ``residential customers'' or ``small businesses.'' 
There is some uncertainty about whether institutions of higher 
education (and their libraries) are included in the term ``schools'' 
because the term is sometimes interpreted as applying only to K-12 
schools. The FCC should explicitly state that all libraries, colleges, 
universities and other public interest institutions that purchase 
standardized broadband Internet access service from public broadband 
providers \16\ are included in the term ``other end-user customers, 
such as schools and libraries.''
---------------------------------------------------------------------------
    \15\ Note that the Online Competition and Consumer Choice Act 
introduced by Sen. Leahy (S. 2476) and Rep. Matsui (H.R. 4880) on June 
17, 2014 both include the word ``institution'' in the definition of 
both ``end user'' and ``edge provider,'' which recognizes libraries and 
higher education institutions' dual role as consumers and content 
providers.
    \16\ As we explain further below, the proposed rules should only 
apply to those broadband providers that serve the general public, which 
we describe as ``public broadband Internet access services providers'' 
or ``public broadband providers.'' The word ``public'' is in this 
context is intended to have a meaning similar to the definition of 
``telecommunications service,'' which is defined as ``the offering of 
telecommunications for a fee directly to the public, or to such classes 
of users as to be effectively available directly to the public, 
regardless of the facilities used.'')
---------------------------------------------------------------------------
B. The Commission Should Prohibit Paid Prioritization
    We are especially concerned that public broadband Internet access 
providers now have the opportunity and financial incentive to provide 
favorable Internet service to certain edge providers or customers, 
thereby disadvantaging non-profit or public interest entities such as 
colleges, universities and libraries. For instance, public broadband 
providers could sell faster or prioritized transmission to certain 
entities (``paid prioritization''). Many institutions that serve the 
public interest, such as libraries, colleges and universities, may not 
be able to afford to pay extra fees simply for the transmission of 
their content and could find their Internet traffic relegated to 
chokepoints (the ``slow lane'') while prioritized traffic zips through 
to its destination. Paid prioritization inevitably favors those who 
have the resources to pay for expedited transmission and disadvantages 
those entities--such as libraries and higher education--whose missions 
and resource constraints preclude them from paying these additional 
fees.
    Further, it is likely that those who are able to pay for 
preferential treatment will pass along their costs to their consumers 
and/or subscribers. In some cases, libraries and other public 
institutions may be among these subscribers who would then be forced to 
pay more for services they may broker on behalf of their patrons. 
Public libraries, for instance, subscribe to digital media services 
such as Hoopla, OverDrive, and Zinio, to provide access to video, 
audiobooks, e-books, and e-magazine titles.
    Finally, prioritizing some traffic over others would undermine one 
of the Internet's fundamental underlying principles--network operators 
are expected to use ``best efforts'' to deliver information to the end 
user. And from a broader perspective, traffic prioritization creates 
artificial motivations and constraints on the use of the Internet, 
damaging the web of relationships and interactions that define the 
value of the Internet for both end users and edge providers.
C. The Scope of the Rules Should Clearly State that the Open Internet 
        Rules Apply to Public Broadband Providers and Not to Private 
        Networks or End Users
    The FCC should also clarify the scope of the rules to ensure that 
they are not applied to private networks or end users. The 2010 Open 
Internet Order correctly found that the open Internet rules should not 
apply to premise operators, such as individual consumers' home Wi-Fi 
connections or bookstores or coffee shops that provide wireless 
services to their patrons. (This provision is sometimes misleadingly 
called the ``coffee shop exception.'') While the Commission was correct 
to find that these end user activities should not be subject to open 
Internet rules, this list of services is not exhaustive. For instance, 
almost all libraries offer Wi-Fi connections to their patrons, and 
these end user Wi-Fi services should not be regulated as if they were 
public broadband providers. Also, many colleges and universities have 
their own private end-user networks (both on-campus and off-campus 
\17\) that are not available to the general public. The FCC should 
clarify that all private, end-user networks fall within the ``coffee 
shop'' exception and should not be subject to open Internet regulation.
---------------------------------------------------------------------------
    \17\ Some colleges maintain several different campuses and maintain 
private networks connecting these campuses. These networks are 
analogous to intra-corporate networks that connect branch offices of a 
multi-location business. Such networks serve the internal 
communications and broadband needs of their owners and should not be 
subject to these rules.
---------------------------------------------------------------------------
    There is no precedent or expectation that private networks or end 
users, whether large or small, should be subject to regulation; doing 
so in this proceeding would burden consumers such as libraries and 
institutions of higher education and discourage the purchase and use of 
broadband Internet access services. There is substantial precedent in 
the law for treating private networks differently from networks 
available to the public.\18\
---------------------------------------------------------------------------
    \18\ See, e.g., Section 103 of the Communications Assistance for 
Law Enforcement Act (CALEA), which specifically excludes ``equipment, 
facilities, or services that support the transport or switching of 
communications for private networks or for the sole purpose of 
interconnecting telecommunications carriers.'' 47 U.S.C. 
Sec. 1002(b)(2)(B). See also, ``Common Carrier Regulation of 
Telecommunications Contracts and the Private Carrier Alternative,'' by 
Pitsch and Bresnahan, Federal Communications Law Journal, Vol. 48, 
Issue Three, June 1, 1996 (which reviews the FCC's history of treating 
several activities as ``private,'' including satellite transponders, 
private land mobile radio services, and enhanced services, in part 
because they are not offered to the general public.)
---------------------------------------------------------------------------
    We believe that the NPRM intends to exclude private networks and 
end user activities from regulation, but we urge the FCC in its final 
rules to expand the list of end users as set forth above and to be 
absolutely clear that such private networks and end users (such as 
households, coffee shops, higher education institutions, or libraries) 
should be free to decide how they use the broadband services they 
obtain from public broadband Internet access service providers.
D. The Rules Should Be Technology-Neutral
    The 2010 Open Internet Order created separate rules for fixed and 
mobile services. The arguments for distinguishing between fixed and 
mobile service were not well founded in 2010 and are even less 
defensible today. Consumers and edge providers use fixed and mobile 
services interchangeably, often switching from one device to another to 
surf the web, send and receive e-mail, post to Twitter accounts, use 
applications, download e-books, view lectures and listen to podcasts. 
The proliferation of 4G mobile networks makes it increasingly easy to 
upload and download data using mobile devices. Students, library 
patrons, faculty and researchers are increasingly dependent on using 
mobile devices. Mobile services will become even more prevalent in the 
future with the advent of 5G technologies \19\ and as more spectrum is 
made available for commercial mobile services through the upcoming 
incentive auctions. We urge the FCC to think ahead to the enormous 
growth of mobile technologies and craft policies that anticipate the 
future. Broadband Internet policies should be independent of the 
connection technology (wired, wireless, satellite, fiber-optic, etc.) 
and open Internet rules should apply no matter which technology is used 
to access the Internet.
---------------------------------------------------------------------------
    \19\ ``EU and South Korea to Develop 5G Mobile Network'', Financial 
Times, June 16, 2014, available at http://tinyurl.com/mhmgkkt. (``For 
consumers, the EU suggests 5G mobile device users will be able to 
download a one-hour high-definition film in six seconds.'')
---------------------------------------------------------------------------
E. The FCC Should Clarify the Disclosure Rules to Ensure that 
        Information about Data Caps and Bandwidth Speeds are Displayed 
        Prominently and Clearly to Consumers and Edge Providers
    The NPRM proposes to enhance the transparency rules to give 
consumers, edge providers, the Internet community and policy-makers 
greater information about broadband Internet access providers' services 
and network management practices. Our organizations support these 
proposals. Consumers have a right to know the scope and quality of the 
services that they are purchasing, especially in light of the hundreds 
of complaints received by the Commission that the advertised bandwidth 
offerings may exceed the actual amount of provided bandwidth. 
Furthermore, public broadband providers are continually changing their 
network equipment, routing tables, and management practices, so any 
disclosures should be updated regularly. Requiring public broadband 
providers to make available the information about the actual scope and 
quality of the broadband services will allow regulators to hold 
providers accountable for their services and make sure that their 
actual services align with how providers describe them to end users of 
all types, including colleges, universities, and libraries.
    Furthermore, the Commission should make sure that public broadband 
providers display this information in a standardized format so that 
consumers can compare different providers' services. While the NPRM 
cites examples of disclosure requirements from the food, drug, credit 
card, appliance and mortgage industries, another useful analogy may be 
the disclosures required when purchasing an automobile. Just as car 
dealers must display basic information regarding the automobile 
(including miles per gallon, warranties, financing terms, and other 
features and functions), a public broadband Internet service provider 
should be required to disclose the bandwidth, latency, data caps, 
warranties, payment terms, termination penalties, and so forth.\20\
---------------------------------------------------------------------------
    \20\ The disclosure requirements should track the performance 
measurements in the FCC's ``Measuring Broadband America'' reports. See, 
http://www.fcc.gov/measuring-broadband-america.
---------------------------------------------------------------------------
F. The FCC Must Establish a Firm ``No Blocking'' Policy for Both Mobile 
        and Fixed Broadband Providers, and the Policy Should Focus on 
        the End User Perspective
    The NPRM proposes

        to adopt the text of the no-blocking rule that the Commission 
        adopted in 2010, with a clarification that it does not preclude 
        broadband providers from negotiating individualized, 
        differentiated arrangements with similarly situated edge 
        providers (subject to the separate commercial reasonableness 
        rule or its equivalent). So long as broadband providers do not 
        degrade lawful content or service to below a minimum level of 
        access, they would not run afoul of the proposed rule. We also 
        seek comment below on how to define that minimum level of 
        service. Alternatively, we seek comment on whether we should 
        adopt a no-blocking rule that does not allow for priority 
        agreements with edge providers and how we would do so 
        consistent with sources of legal authority other than section 
        706, including Title II. [footnotes omitted]

    In our view, the FCC must establish a no-blocking rule that is 
clear to public broadband Internet access providers, consumers and edge 
providers and that has a firm basis in legal authority. It is a bedrock 
principle of Internet openness that broadband providers should not be 
permitted to block consumers' access to lawful websites, applications 
or services. We support the FCC's effort to re-instate the no-blocking 
rule (though without tying it to the ``commercially reasonable'' 
standard, as we explain in more detail below).\21\
---------------------------------------------------------------------------
    \21\ A rule that requires public broadband Internet access 
providers not to block access to lawful websites, applications and 
services does not on its own treat the provider as a common carrier. 
Broadband providers may still have the opportunity to negotiate 
individual arrangements or provide additional services to certain edge 
providers. A no-blocking policy simply directs the provider to allow 
access to the websites, applications or services requested by the 
consumer.
---------------------------------------------------------------------------
    While we are pleased that the FCC proposes to re-instate the no-
blocking rule vacated on appeal, we suggest that the FCC may need to 
redefine the nature of the service being offered in order to be 
consistent with the Verizon decision. The NPRM proposes to include a 
definition of a ``minimum level of access'' or a ``minimum level of 
service'', but doing so may be the exact opposite of the Verizon 
court's recommendation. \22\ Rather than defining a minimum level of 
service, our reading of the court's decision is that FCC should take a 
broader view of the definition of the service that is being provided 
(``access to their subscribers generally'')--a definition that would 
encompass both individually negotiated levels of service and a lower 
level ``boundary'' (not a mandated minimum).
---------------------------------------------------------------------------
    \22\ The key sentence from the Verizon decision is as follows: 
``Thus, if the relevant service that broadband providers furnish is 
access to their subscribers generally, as opposed to access to their 
subscribers at the specific minimum speed necessary to satisfy the 
anti-blocking rules, then these rules, while perhaps establishing a 
lower limit on the forms that broadband providers' arrangements with 
edge providers could take, might nonetheless leave sufficient `room for 
individualized bargaining and discrimination in terms' so as not to run 
afoul of the statutory prohibitions on common carrier treatment.'' 
Cellco, 700 F.3d at 548.
---------------------------------------------------------------------------
    Admittedly, there is ambiguity in the court's language, and it is 
not entirely clear in the Verizon court's discussion of this topic 
whether the relevant ``service'' is service to the end user/subscriber 
or to the edge provider. The FCC's proposed definition of ``mass 
market'' suggests that the relevant service is the service provided to 
the end user/subscriber, but the court's language implies that the 
relevant service is provided to the edge providers. In the context of 
the ``no-blocking'' rule, we suggest that the most relevant service is 
the service provided to the end user/subscriber. The service being 
provided is to connect the end user/subscriber to the Internet 
``cloud.'' For this purpose, there is no need to define a ``minimum 
level of access or service'' being ``provided'' to the edge provider. 
It is sufficient to say that a broadband provider may not block access 
to any lawful website, application or service chosen by the end user/
subscriber, subject to reasonable network management.\23\
---------------------------------------------------------------------------
    \23\ Defining the no-blocking rule in this manner, as a service 
provided to the end user/subscriber, also helps to justify the ``no-
blocking'' rule separately from the rule concerning the treatment of 
edge providers, discussed below.
---------------------------------------------------------------------------
    The no-blocking rule, as defined by the choice of the end user/
subscriber, does not run afoul of the statutory provision that bars 
broadband providers from being regulated as common carriers. Defined in 
that way, this type of ``no-blocking rule'' does not run the risk that 
a court would find it to be similar to a common carrier-like obligation 
to serve the public indiscriminately. Rather, a no-blocking rule 
defined as carrying out the will of the consumer simply says that, once 
a public broadband Internet access provider connects an end user/
subscriber to the Internet ``cloud'', it cannot take affirmative steps 
to block a certain lawful website, application or service that the 
consumer chooses to access from that ``cloud''. Rather than directing 
each public broadband provider to serve each individual website, 
application or service, such a no-blocking rule would simply say that 
the provider cannot block those edge providers connected to the 
Internet cloud from serving the requests the providers' subscribers 
have made of them.
    To clarify the ``no-blocking'' rule and to avoid the risk of being 
overturned on appeal, the Commission should insert the end user's 
perspective into the ``no-blocking rule'', so that it would read as 
follows:

        A person engaged in the provision of broadband Internet access 
        service, insofar as such person is so engaged, shall not block 
        an end user from accessing lawful content, applications, 
        services, or non-harmful devices, subject to reasonable network 
        management.

    Note that, unlike the 2010 Open Internet Order, the ``no-blocking'' 
rules should be applied equally to both fixed and mobile services.\24\ 
The 2010 ``no-blocking'' rule for mobile devices was far weaker than 
the no-blocking rule for fixed services. The rule for fixed service 
prohibited blocking of ``lawful content, applications, services, or 
non-harmful devices''. The rule for mobile devices only applied to 
lawful websites and applications that compete with the providers' voice 
or video offerings. In other words, mobile providers were allowed to 
block services, non-harmful devices, and some applications as well 
(those that do not compete with their voice and video offerings).
---------------------------------------------------------------------------
    \24\ As the NPRM notes, the 2010 Open Internet Order rule barred 
fixed providers from blocking ``lawful content, applications, services, 
or non-harmful devices subject to reasonable network management. It 
prohibited mobile providers from blocking ``consumers from accessing 
lawful websites,'' as well as ``applications that compete with the 
provider's voice or video telephony services,'' subject to ``reasonable 
network management.''[footnotes omitted]. See NPRM, para. 21.
---------------------------------------------------------------------------
    The policy of differentiating between fixed and mobile technologies 
cannot stand up to scrutiny. As mentioned above, the technologies for 
mobile services are developing rapidly, and speeds of 4G mobile devices 
are already faster than the lowest level of fixed broadband service 
when the FCC first adopted its open Internet policies in 2005. Mobile 
services are expected to carry ten and hundred megabit levels in the 
near future. Furthermore, even if one were to accept the theory that 
mobile networks have greater technical constraints than fixed (with 
which we disagree), the no-blocking rule should be reasonably related 
to these technical differences. Instead, the no-blocking rule for 
mobile devices arbitrarily allows blocking of non-competing 
applications or services but not websites, with no showing that 
applications or services are more data-intensive or more difficult to 
manage than websites.\25\ This directly inhibits consumer choice and 
competition, and undermines the FCC's stated policies that led it to 
require number portability from one device to another.
---------------------------------------------------------------------------
    \25\ In fact, the 2010 Open Internet Order found that the accessing 
lawful websites generated much more traffic than services or 
applications, which indicates that applications and services create 
less congestion and there is no need for mobile broadband providers to 
be able to block these services. See 2010 Open Internet Order, paras. 
97-106.
---------------------------------------------------------------------------
G. The Commission's Enforcement Ombudsperson Should Be Authorized to 
        Act as a Watchdog for Libraries and Higher Education
    The NPRM proposes ``the creation of an ombudsperson to act as a 
watchdog to represent the interests of consumers, start-ups and small 
businesses.'' \26\ We agree that creating an ombudsperson could help 
enforce the open Internet policies. We simply request that the 
ombudsperson be vested with the responsibility to advocate for the 
interests of libraries, colleges and universities in addition to 
consumers, start-ups and small businesses. Because libraries, colleges 
and universities have limited budgets with which to serve collectively 
millions of people, they are in an especially vulnerable position if 
public broadband providers block or degrade their traffic. Including 
libraries and higher education in the charter of the ombudsperson's 
responsibilities will help to send a message to these providers to take 
our institutions' concerns seriously.
---------------------------------------------------------------------------
    \26\ NPRM, paras. 8 and 10. We also note that our institutions are 
not mentioned in Chairman Wheeler's statement when discussing the role 
of the ombudsperson.
---------------------------------------------------------------------------
IV. The Commission Has All Necessary Authority to Implement Open 
        Internet Rules Sufficient to Preserve the Character of the 
        Internet as an Open Platform for Education, Research and Free 
        Speech
A. Re-Classifying Public Broadband Internet Access Service as a Title 
        II Common Carriage Service Offers a Strong, Certain Path to 
        Preserving an Open Internet
    Re-classification of public broadband Internet access service \27\ 
as a Title II ``common carrier'' service would allow the FCC to craft a 
set of policies and procedures that effectively ensures the broader 
public interest goals of an open Internet are met, while providing the 
FCC with the flexibility to adapt and tailor its regulations to fit the 
market. Treating providers of broadband services offered to the general 
public as Title II common carriers will provide valuable certainty to 
the marketplace and will place public broadband Internet access service 
on an equal regulatory footing with other communications services. Re-
classifying public broadband Internet access service is a legally 
sustainable approach \28\ that would ensure that relevant providers 
will not be able to engage in ``unreasonable discrimination'' against 
or in favor of any particular content, application or service.
---------------------------------------------------------------------------
    \27\ See Footnote 16 for an explanation of ``public'' in this 
context.
    \28\ National Cable & Telecommunications Association et al., v. 
Brand X Internet Services et al., 545 U.S. 967 (2005).
---------------------------------------------------------------------------
B. Section 706 Offers an Effective Path to Preserving an Open Internet 
        If Based on an ``Internet Reasonable'' Standard
    While Title II re-classification has the benefits noted above, in 
the alternative, we urge the FCC to craft legally-sustainable rules to 
protect and promote Internet openness using the Section 706 authority 
that was upheld by the U.S. Court of Appeals in the Verizon decision. 
The court of appeals provided some specific guidance as to how to 
structure open Internet rules under section 706 that could be legally 
sustainable, and the NPRM indicates that the FCC intends to follow this 
path. But the NPRM then proposes to adopt a ``commercially reasonable'' 
standard that is not required by section 706 or the Verizon court. The 
``commercially reasonable'' standard could undermine the open Internet 
policies that the FCC seeks to establish.
    To replace the ``non-discrimination'' rule that was invalidated by 
the Verizon court, the NPRM ``tentatively conclude[s] that the 
Commission should adopt a revised rule that, consistent with the 
court's decision, may permit broadband providers to engage in 
individualized practices, while prohibiting those broadband provider 
practices that threaten to harm Internet openness.'' To explain this 
standard, the NPRM goes further to suggest that it should include a) 
``an enforceable legal standard of conduct barring broadband provider 
practices that threaten to undermine Internet openness,'' b) clearly 
established factors to give guidance about what would undermine 
Internet openness, and c) ``encouragement of individualized 
negotiation.'' \29\ The NPRM recognizes that ``[s]ound public policy 
requires that Internet openness be the touchstone of a new legal 
standard.'' \30\
---------------------------------------------------------------------------
    \29\ NPRM, para. 111.
    \30\ NPRM, para. 116.
---------------------------------------------------------------------------
    The NPRM then proposes a rule to require broadband providers to 
offer service that is ``commercially reasonable,'' which raises many 
concerns. The NPRM states that the FCC:

        would prohibit as commercially unreasonable those broadband 
        providers' practices that, based on the totality of the 
        circumstances, threaten to harm Internet openness and all that 
        it protects. At the same time, it could permit broadband 
        providers to serve customers and carry traffic on an 
        individually negotiated basis.

    While we understand that any standard under Section 706 must allow 
some degree of individual negotiation to avoid treating broadband 
providers as ``common carriers'', we have strong concerns that a 
generic ``commercially reasonable'' standard would give too much leeway 
to such providers to undermine the open Internet goal. For instance, a 
``commercially reasonable'' approach could be interpreted to allow any 
broadband and edge provider to reach a contract to provide ``paid 
prioritization''. If the two companies reach an agreement that they 
mutually believe to be in their commercial interests, it might be found 
``commercially reasonable'' even if it has the effect of degrading the 
Internet service used by other parties (such as higher education 
institutions and libraries) sharing the same network.\31\ Furthermore, 
a ``commercially reasonable'' standard may not provide assurance that 
the Internet will remain open for non-profit (non-commercial) entities 
who serve a public interest mission, such as colleges, universities, 
and libraries.
---------------------------------------------------------------------------
    \31\ Stated differently, a broadband provider and an edge provider 
voluntarily agree to enter a contract that prioritizes the edge 
provider's traffic, it will be difficult for the FCC to find such an 
arrangement ``commercially unreasonable'' if it is in the commercial 
best interests of both parties.
---------------------------------------------------------------------------
    We believe that the Commission should craft a different standard 
under section 706 that is more directly related to the unique and open 
character of the Internet. Such a standard should provide a baseline 
level of openness protections, while permitting but setting boundaries 
around the scope of individual negotiation. This new standard should be 
derived from the culture and character of the Internet itself so that 
the essential operating principles which created and sustain the 
``virtuous circle'' of Internet growth and development are preserved 
into the future. Rather than borrow an existing standard from another 
area of law or activity (as suggested in paragraph 119), it would be 
far better for the Commission to craft a flexible standard that 
reflects how the Internet was initially designed and inherently 
functions. Rather than a generic ``commercially reasonable'' standard, 
the proper standard should be grounded in what is ``Internet 
reasonable.''
    The proposed ``Internet reasonable'' standard would recognize that 
the Internet itself is fundamentally an ecosystem that supports a 
myriad of personal, institutional, community, and commercial 
relationships and interests. As with any other ecosystem, if the 
conditions that foster those relationships and interests are negatively 
impacted, the system as a whole is subject to collapse. The virtuous 
circle the FCC identified and the court endorsed is a function of a 
healthy ecosystem--preserving the system's capacity for healthy growth 
and evolution means preserving the essential conditions that catalyzed 
its development in the first place.
    There are several key features of the Internet that can be 
incorporated into an ``Internet reasonable'' standard. In evaluating 
whether an action by a public broadband Internet access provider is 
``Internet reasonable'', the FCC could assess whether or not the action 
violates these rebuttable presumptions:

  1.  ``Innovation without Permission'': This phrase (often articulated 
        by one of the ``fathers'' of the Internet, Vint Cerf) captures 
        the notion that end users and edge providers should not have to 
        obtain the permission of a public broadband provider to use the 
        Internet. Any action taken by a public broadband provider to 
        require its ``approval'' to carry certain lawful content, 
        applications or services should be presumed to be in violation 
        of what is ``Internet reasonable.''

  2.  ``Paid Prioritization'': The Internet is built on a democratic 
        model that allows any individual, library, college, start-up 
        business, or huge commercial conglomerate to obtain access to 
        each other's content, services or applications without actions 
        by the public broadband provider to prioritize some traffic 
        over others. Any action by a public broadband provider to sell 
        or provide enhanced transmission to some content or service 
        providers over others should be presumed to violate what is 
        ``Internet reasonable.'' \32\ Prioritizing some traffic over 
        others would fundamentally alter the Internet as a whole by 
        creating artificial motivations and constraints on its use, 
        damaging the web of relationships and interactions that define 
        the value of the Internet for both end users and edge 
        providers.
---------------------------------------------------------------------------
    \32\ Of course, broadband providers may continue to charge 
consumers and content, application and service providers for their 
broadband connections to the Internet, and may receive greater 
compensation for greater bandwidth capacity chosen by the consumer or 
content, application or service provider. This principle limits the 
broadband provider's ability to prioritize certain traffic over other 
traffic after the initial connection is purchased.

  3.  ``Open Platform'': The Internet is unique because it uses a 
        decentralized, open architecture that has few barriers to 
        entry. Any action by a public broadband provider to undermine 
        the open architecture of the Internet should be presumed to 
        violate what is ``Internet reasonable,'' due to its inevitable 
        adverse impact on the capacity of the Internet to maintain and 
        advance the virtuous circle of innovation. \33\
---------------------------------------------------------------------------
    \33\ This concept is also similar to the ``broad form'' of the 
``end-to-end'' design of the Internet, as articulated in Internet 
Architecture and Innovation, by Barbara van Schewick, MIT Press, 2010, 
available at https://netarchitecture.org.

  4.  ``Degradation'': It should be presumed that public broadband 
        providers should refrain from taking any action to favor one 
        party if it would degrade the level of service provided to 
        other parties. But this is not all. The networks that carry 
        Internet traffic are undergoing continual change. Internet 
        demand is following an exponential growth curve. If the 
        Internet transmission speed available to a given user or edge 
        provider does not keep pace with this growth, then the user or 
        edge provider may effectively experience a degraded level of 
        service as compared to those whose transmission speeds maintain 
        or exceed that pace. Any action by a public broadband provider 
        that would discourage it from investing in greater bandwidth to 
        the non-prioritized party should also be presumed to violate 
---------------------------------------------------------------------------
        the ``Internet reasonable'' standard.

    The factors above are not hard and fast barriers--they establish 
rebuttable presumptions that the broadband providers could overcome if 
they can demonstrate a public interest benefit. If a public broadband 
provider's action violates these presumptions, it would have the burden 
of proving that its action was nevertheless in the public interest. For 
instance, a public broadband provider might be able to justify an 
individually negotiated agreement for prioritized transmission of 
telemedicine services, of emergency or public safety communications, or 
other services that are particularly necessary in the public interest. 
The provider might be able to explain that it uses ``Quality of 
Service'' (QOS) to enhance some traffic in a manner that does not 
degrade the traffic of other users. The provider may also have the 
opportunity to justify its action if the network is congested, 
particularly if the adjudicatory body finds that the congestion is not 
due to the provider's own failure to invest.
    By articulating these and perhaps other factors ahead of time, the 
FCC could fashion an approach using an ``Internet reasonable'' standard 
that would incorporate the flexibility that the Verizon court found 
wanting in the prior rules,\34\ while also providing as much guidance 
as possible to consumers, edge providers, libraries, colleges and 
universities, and the Internet ecosystem as a whole.
---------------------------------------------------------------------------
    \34\ ``Moreover, unlike the data roaming rule in Cellco--which 
spelled out `sixteen different factors plus a catchall. . .that the 
Commission must take into account in evaluating whether a proffered 
roaming agreement is commercially reasonable,' thus building into the 
standard `considerable flexibility,' Cellco, 700 F.3d at 548--the Open 
Internet Order makes no attempt to ensure that this reasonableness 
standard remains flexible.'' Verizon slip op. p. 59.
---------------------------------------------------------------------------
V. Conclusion
    In conclusion, libraries and institutions of higher education are 
greatly concerned that public broadband Internet access providers 
currently have the financial incentive and the opportunity to block, 
degrade or prioritize the Internet transmission of some at the expense 
of others. These practices, if permitted, could have severe adverse 
impacts on online education, research, learning and free speech. We 
urge the FCC to incorporate the needs of higher education and libraries 
into its open Internet rules, including by making the following 
changes:

  a.  The FCC should clarify that the proposed open Internet rules 
        apply to public broadband Internet access providers that serve 
        libraries, institutions of higher education and other public 
        interest organizations;

  b.  ``paid prioritization'' should be prohibited;

  c.  the proposed rules should be technology-neutral and should apply 
        equally to fixed and mobile services;

  d.  the FCC should adopt a re-defined ``no-blocking'' rule that bars 
        public broadband Internet access providers from interfering 
        with the consumer's choice of content, applications, or 
        services;

  e.  the FCC should strengthen the disclosure rules;

  f.  the proposed ombudsman should be charged with protecting the 
        interests of libraries and higher education institutions and 
        other public interest organizations, in addition to consumers 
        and small businesses;

  g.  the FCC should continue to recognize that libraries and 
        institutions of higher education operate private networks or 
        engage in end user activities that are not subject to open 
        Internet rules; and

  h.  the FCC should preserve the unique capacities of the Internet as 
        an open platform by exercising its well-established sources of 
        authority to implement open Internet rules, based on Title II 
        reclassification or an ``Internet reasonable'' standard under 
        Section 706.
            Respectfully Submitted,
                                          Muriel A. Howard,
                                                         President,
                                American Association of State Colleges 
                                              and Universities (AASCU).

                                              Terry Hartle,
                                             Senior Vice President,
                                   American Council on Education (ACE).

                                           Emily Sheketoff,
                             Executive Director, Washington Office,
                                    American Library Association (ALA).

                                            John C. Vaughn,
                                                     Senior Fellow,
                            Association of American Universities (AAU).

                                       Mary Ellen K. Davis,
                                                 Executive Director
                    Association of College & Research Libraries (ACRL).

                                           Peter McPherson,
                                                         President,
              Association of Public and Land-grant Universities (APLU).

                                             Krista L. Cox,
                               Director, Public Policy Initiatives,
                               Association of Research Libraries (ARL).

                                                Ann Joslin,
                                                         President,
                      Chief Officers of State Library Agencies (COSLA) 
                                    and Idaho Commission for Libraries.

                                             Richard Ekman,
                                                         President,
                                 Council of Independent Colleges (CIC).

                                            Diana Oblinger,
                                                 President and CEO,
                                                              EDUCAUSE.

                                             Rosemary Feal,
                                                Executive Director,
                                        Modern Language Association
                                 ______
                                 
                               Appendix A
    The following Net Neutrality Principles were previously filed in 
this docket on Thursday, July 10, 2014

                       Net Neutrality Principles

                              Provided by

  American Association of Community Colleges, American Association of 
    State Colleges and Universities, American Council on Education, 
  American Library Association, Association of American Universities, 
   Association of Public and Land-grant Universities, Association of 
Research Libraries, Chief Officers of State Library Agencies, EDUCAUSE, 
   Modern Language Association, National Association of Independent 
                       Colleges and Universities
    The above organizations firmly believe that preserving an open 
Internet is essential to our Nation's freedom of speech, educational 
achievement, and economic growth. The Internet now serves as a primary, 
open platform for information exchange, intellectual discourse, civic 
engagement, creativity, research, innovation, teaching, and learning. 
We are deeply concerned that public broadband providers have financial 
incentives to interfere with the openness of the Internet and may act 
on these incentives in ways that could be harmful to the Internet 
content and services provided by libraries and educational 
institutions. Preserving the unimpeded flow of information over the 
public Internet and ensuring equitable access for all people is 
critical to our Nation's social, cultural, educational, and economic 
well-being.
    Our organizations have joined together to provide the following 
background information and to set forth the key principles (below) that 
we believe the Federal Communications Commission (FCC) should adopt as 
it reconsiders its ``net neutrality'' policies in response to the 
recent court decision. We invite others to join us.
    Background: The FCC opened a new proceeding on ``net neutrality'' 
in May 2014 (Docket No. 14-28). This proceeding is in response to a 
January 2014 ruling by the U.S. Court of Appeals--D.C. Circuit that 
overturned two of the FCC's key ``net neutrality'' rules but affirmed 
the FCC's authority under Section 706 of the Telecommunications Act to 
regulate broadband access to the Internet. The new FCC proceeding will 
explore what ``net neutrality'' policies it can and should adopt in the 
wake of the court's ruling.
    The above organizations support the FCC's adoption of ``net 
neutrality'' policies to ensure that the Internet remains open to free 
speech, research, education and innovation. We believe that Internet 
Service Providers (ISPs) should operate their networks in a neutral 
manner without interfering with the transmission, services, 
applications, or content of Internet communications. Internet users 
often assume (and may take for granted) that the Internet is inherently 
an open and unbiased platform, but there is no law or regulation in 
effect today that requires ISPs to be neutral. ISPs can act as 
gatekeepers--they can give enhanced or favorable transmission to some 
Internet traffic, block access to certain websites or applications, or 
otherwise discriminate against certain Internet services for their own 
commercial reasons, or for any reason at all.
    The above organizations are especially concerned that ISPs have 
financial incentives to provide favorable Internet service to certain 
commercial Internet companies or customers, thereby disadvantaging 
nonprofit or public entities such as colleges, universities and 
libraries. For instance, ISPs could sell faster or prioritized 
transmission to certain entities (``paid prioritization''), or they 
could degrade Internet applications that compete with the ISPs' own 
services. Libraries and higher education institutions that cannot 
afford to pay extra fees could be relegated to the ``slow lane'' on the 
Internet.
    To be clear, the above organizations do not object to paying for 
higher-capacity connections to the Internet; once connected, however, 
users should not have to pay additional fees to receive prioritized 
transmission and their Internet messages or services should not be 
blocked or degraded. Such discrimination or degradation could 
jeopardize education, research, learning, and the unimpeded flow of 
information.
    For these reasons, the above organizations believe that the FCC 
should adopt enforceable policies based on the following principles to 
protect the openness of the Internet:
Net Neutrality Principles
     Ensure Neutrality on All Public Networks: Neutrality is an 
essential characteristic of public broadband Internet access. The 
principles that follow must apply to all broadband providers and 
Internet Service Providers (ISPs) who provide service to the general 
public, regardless of underlying transmission technology (e.g., 
wireline or wireless) and regardless of local market conditions.
     Prohibit Blocking: ISPs and public broadband providers 
should not be permitted to block access to legal websites, resources, 
applications, or Internet-based services.
     Protect Against Unreasonable Discrimination: Every person 
in the United States should be able to access legal content, 
applications, and services over the Internet, without ``unreasonable 
discrimination'' by the owners and operators of public broadband 
networks and ISPs. This will ensure that ISPs do not give favorable 
transmission to their affiliated content providers or discriminate 
against particular Internet services based on the identity of the user, 
the content of the information, or the type of service being provided. 
``Unreasonable discrimination'' is the standard in Title II of the 
Communications Act; the FCC has generally applied this standard to 
instances in which providers treat similar customers in significantly 
different ways.
     Prohibit Paid Prioritization: Public broadband providers 
and ISPs should not be permitted to sell prioritized transmission to 
certain content, applications, and service providers over other 
Internet traffic sharing the same network facilities. Prioritizing 
certain Internet traffic inherently disadvantages other content, 
applications, and service providers--including those from higher 
education and libraries that serve vital public interests.
     Prevent Degradation: Public broadband providers and ISPs 
should not be permitted to degrade the transmission of Internet 
content, applications, or service providers, either intentionally or by 
failing to invest in adequate broadband capacity to accommodate 
reasonable traffic growth.
     Enable Reasonable Network Management: Public broadband 
network operators and ISPs should be able to engage in reasonable 
network management to address issues such as congestion, viruses, and 
spam as long as such actions are consistent with these principles. 
Policies and procedures should ensure that legal network traffic is 
managed in a content-neutral manner.
     Provide Transparency: Public broadband network operators 
and ISPs should disclose network management practices publicly and in a 
manner that 1) allows users as well as content, application, and 
service providers to make informed choices; and 2) allows policy-makers 
to determine whether the practices are consistent with these network 
neutrality principles. This rule does not require disclosure of 
essential proprietary information or information that jeopardizes 
network security.
     Continue Capacity-Based Pricing of Broadband Internet 
Access Connections: Public broadband providers and ISPs may continue to 
charge consumers and content, application, and service providers for 
their broadband connections to the Internet, and may receive greater 
compensation for greater capacity chosen by the consumer or content, 
application, and service provider.
     Adopt Enforceable Policies: Policies and rules to enforce 
these principles should be clearly stated and transparent. Any public 
broadband provider or ISP that is found to have violated these policies 
or rules should be subject to penalties, after being adjudicated on a 
case-by-case basis.
     Accommodate Public Safety: Reasonable accommodations to 
these principles can be made based on evidence that such accommodations 
are necessary for public safety, health, law enforcement, national 
security, or emergency situations.
     Maintain the Status Quo on Private Networks: Owners and 
operators of private networks that are not openly available to the 
general public should continue to operate according to the long-
standing principle and practice that private networks are not subject 
to regulation. End users (such as households, companies, coffee shops, 
schools, or libraries) should be free to decide how they use the 
broadband services they obtain from network operators and ISPs.
                               Appendix B
About the American Association of Community Colleges (AACC)
    The American Association of Community Colleges (AACC) is the 
primary advocacy organization for the Nation's community colleges. The 
association represents more than 1,100 two-year, associate degree-
granting institutions and more than 13 million students. AACC promotes 
community colleges through five strategic action areas: recognition and 
advocacy for community colleges; student access, learning, and success; 
community college leadership development; economic and workforce 
development; and global and intercultural education.
About the American Association of State Colleges and Universities 
        (AASCU)
    AASCU is a Washington, DC-based higher education association of 
more than 400 public colleges, universities, and systems whose members 
share a learning-and teaching-centered culture, a historic commitment 
to underserved student populations, and a dedication to research and 
creativity that advances their regions' economic progress and cultural 
development.
About the American Council on Education (ACE)
    Founded in 1918, ACE is the major coordinating body for all the 
Nation's higher education institutions, representing more than 1,600 
college and university presidents, and more than 200 related 
associations, nationwide. It provides leadership on key higher 
education issues and influences public policy through advocacy. For 
more information, please visit www.acenet.edu or follow ACE on Twitter 
@ACEducation.
About the American Library Association (ALA)
    The American Library Association is the oldest and largest library 
association in the world, with approximately 57,000 members in 
academic, public, school, government, and special libraries. The 
mission of the American Library Association is to provide leadership 
for the development, promotion, and improvement of library and 
information services and the profession of librarianship in order to 
enhance learning and ensure access to information for all.
About the Association of American Universities (AAU)
    The Association of American Universities is an association of 60 
U.S. and two Canadian research universities organized to develop and 
implement effective national and institutional policies supporting 
research and scholarship, graduate and professional education, 
undergraduate education, and public service in research universities.
About the Association of College and Research Libraries (ACRL)
    The Association of College and Research Libraries (ACRL), a 
division of the American Library Association, is a professional 
association of academic librarians and other interested individuals. It 
is dedicated to enhancing the ability of academic library and 
information professionals to serve the information needs of the higher 
education community and to improve learning, teaching, and research.
About the Association of Public and Land-grant Universities (APLU)
    The Association of Public and Land-grant Universities (APLU) is a 
research, policy, and advocacy organization representing 234 public 
research universities, land-grant institutions, state university 
systems, and affiliated organizations. Founded in 1887, APLU is North 
America's oldest higher education association with member institutions 
in all 50 U.S. states, the District of Columbia, four U.S. territories, 
Canada, and Mexico. Annually, APLU member campuses enroll 4.7 million 
undergraduates and 1.3 million graduate students, award 1.1 million 
degrees, employ 1.3 million faculty and staff, and conduct $41 billion 
in university-based research.
About the Association of Research Libraries (ARL)
    The Association of Research Libraries (ARL) is a nonprofit 
organization of 125 research libraries in the U.S. and Canada. ARL's 
mission is to influence the changing environment of scholarly 
communication and the public policies that affect research libraries 
and the diverse communities they serve. ARL pursues this mission by 
advancing the goals of its member research libraries, providing 
leadership in public and information policy to the scholarly and higher 
education communities, fostering the exchange of ideas and expertise, 
facilitating the emergence of new roles for research libraries, and 
shaping a future environment that leverages its interests with those of 
allied organizations. ARL is on the web at http://www.arl.org/.
About the Chief Officers of State Library Agencies (COSLA)
    COSLA is an independent organization of the chief officers of state 
and territorial agencies designated as the state library administrative 
agency and responsible for statewide library development. Its purpose 
is to provide leadership on issues of common concern and national 
interest; to further state library agency relationships with Federal 
Government and national organizations; and to initiate cooperative 
action for the improvement of library services to the people of the 
United States. For more information, visit www.cosla.org.
About the Council of Independent Colleges (CIC)
    CIC is the major national service organization for all small and 
mid-sized, independent, liberal arts colleges and universities in the 
U.S. CIC focuses on providing services to campus leaders through 
seminars, workshops, and programs that assist institutions in improving 
educational offerings, administrative and financial performance, and 
institutional visibility.
About EDUCAUSE
    EDUCAUSE is a nonprofit association whose mission is to advance 
higher education through the use of information technology. EDUCAUSE 
supports those who lead, manage, and use information technology in 
higher education through a comprehensive range of resources and 
activities, including analysis, advocacy, community building, 
professional development, and knowledge creation. The current 
membership comprises more than 2,400 colleges, universities, and 
related organizations, including nearly 350 corporations, with over 
68,000 active members. (www.educause.edu)
About the Modern Language Association (MLA)
    The Modern Language Association promotes the study and teaching of 
languages and literatures through its programs, publications, annual 
convention, and advocacy work. The MLA exists to support the 
intellectual and professional lives of its members; it provides 
opportunities for members to share their scholarly work and teaching 
experiences with colleagues, discuss trends in the academy, and 
advocate for humanities education and workplace equity. The MLA aims to 
advance the many areas of the humanities in which its members currently 
work, including literature, language, writing studies, screen arts, 
digital humanities, pedagogy, and library studies. The MLA facilitates 
scholarly inquiry in and across periods, geographical sites, genres, 
languages, and those disciplines in higher education that focus on 
questions about communication, aesthetic production and reception, 
translation, and interpretation.
About the National Association of Independent Colleges and Universities 
        (NAICU)
    NAICU serves as the unified national voice of independent higher 
education. With more than 1,000 member institutions and associations, 
NAICU reflects the diversity of private, nonprofit higher education in 
the United States. They include traditional liberal arts colleges, 
major research universities, church-and faith-related institutions, 
historically black colleges, Hispanic-serving institutions, single-sex 
colleges, art institutions, two-year colleges, and schools of law, 
medicine, engineering, business, and other professions.

    Dr. Turner-Lee. And, Senator, we are not on that letter 
because we actually are against Title II, but we do believe in 
the same things.
    Senator Booker. Right. Well, I hope whatever we do does not 
trample----
    Dr. Turner-Lee. That is right.
    Senator Booker.--over the rights of minorities, poor, 
rural, and others that are so important to the success of 
America.
    The Chairman. And we think you are very discerning, Dr. 
Turner-Lee, in that respect. Thank you, Senator Booker. Senator 
Blumenthal?

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

    Senator Blumenthal. Thank you, Mr. Chairman, and thank you 
for having this hearing and for your legislative proposal, 
which I think is certainly an effort to bring us together on 
this issue. And I know we may have differences within this 
room, but I think all of us share the goal of protecting 
consumers, which are your customers. And we may differ about 
the best way to do it.
    For me as a former Attorney General, as a law enforcer, 
this hearing has a certain ``Alice in Wonderland'' quality 
because normally the folks in favor of flexibility are saying 
do not legislate, and the folks in favor of bright line rules 
are saying put it in the statute. And here we have the claim 
that legislation will somehow lead to more flexibility and 
discretion, which I think may be not only counterintuitive, but 
counter factual.
    And my concern is that we are removing potentially 
authority that would prevent the FCC from confronting 
disparities in access among consumers of different incomes or 
in different geographic areas, stopping anti-competitive 
behavior in an increasingly consolidating market, and 
protecting consumer privacy. And precisely the types of 
disparities and problems that the Communications Act sought to 
prevent. So as technology hurtles forward, I hope that we can 
go back to the principles of the act, the six foundational 
principles of the Communications Act, and make sure that we 
preserve the discretion and authority of the FCC to protect 
consumers.
    With that in mind, in a way, Mr. Misener and Mr. Kimmelman, 
I note a number of similarities between your respective 
testimonies, and particularly you both note the importance of 
preserving interpretive rulemaking authority for the FCC, and I 
would like to ask both of you to expand on this. Mr. Misener, 
this proposal seems to provide a fair amount of certainty for 
the major broadband companies, but not all that many others. 
Without granting the FCC the ability to define the key terms 
and respond to a quickly evolving marketplace, do businesses 
that rely on the Internet not face a fair amount of 
uncertainty?
    Mr. Misener. Thank you, Senator. When American companies 
are choosing whether to invest in a particular country around 
the world, one of the very first things they examine is the 
legal regime. They want the certainty of the transparency, the 
reliability, the stability of that legal regime. We seek the 
same thing here. We want that certainty to know whether and to 
what extent we may be offering services to our customers 
without interference from broadband Internet access providers 
in between. And if we get that certainty, then we will be able 
to deploy more investment.
    There is a tension that came up earlier in the hearing 
today, Senator. The tension was between the level of authority 
and the fear of overreach, OK? That has to do with existing 
statute. We come in squarely in between saying we believe the 
Commission has sufficient authority and does not need to 
overreach. But in the context of this legislation, the 
brilliance of it is to establish really strong, what I have 
called, excellent principles, but with a cap, a ceiling on top. 
And if we are able to work within this framework of deciding 
what principles are there, but also tell the agency not to 
overreach, that seems like the best way to balance this and 
provide the certainty to companies like mine that need it.
    Senator Blumenthal. Mr. Kimmelman, it seems like the lack 
of clarity surrounding some key aspects of this proposal would 
likely provide incentives for litigation, and the lack of 
certainty will lead the parties to court. Just as an example, I 
am not sure I understand exactly what falls inside or outside 
the definition of a ``specialized service.'' So let me ask you, 
what hope does an individual consumer have against the legal 
and lobbying sway and, in fact, overwhelming power of some of 
the bigger players here if there is that lack of clarity?
    Mr. Kimmelman. Thank you, Senator. I think you are 
absolutely right. I think it is very hard for consumers after 
the fact. I think Mr. Misener said this well before. If 
something is happening to their service, they have no idea 
where in the network the problem is. They have no idea who to 
blame or who is responsible, and so it is very hard to come in 
after the fact and file a complaint when you are not even sure 
who is responsible, and the other side has massive resources.
    I actually agree with Mr. Misener's approach. I would say, 
though, that from my perception of what is going on at the FCC, 
that it would be best to sit back and wait and see the details 
because I believe they will within their responsibility, as Mr. 
Misener indicated, move forward prudently and appropriately to 
address all of the principles that the Chairman has put out in 
this draft. I do not think it will be an overreach. I would be 
stunned if it were.
    And I think at that point it would be appropriate for the 
Committee to look at that and see is there something that is 
left that needs to be adjusted. I think the FCC has gotten the 
message loud and clear to be careful and prudent in how it 
applies its current authority.
    Senator Blumenthal. So you are saying, in effect, that 
legislation at this point may be a solution in search of a 
problem before we know whether there is overreach.
    Mr. Kimmelman. Senator, I would not want to go that far. I 
think it is always appropriate for the Senate to consider what 
the appropriate policies are. But I, again, just urge caution 
and prudence here to wait and see what some of the details are 
before moving too far.
    Senator Blumenthal. And let me draw a different analogy 
then. What you are suggesting is a yellow blinking light 
instead of a red or a green.
    Mr. Kimmelman. Yes, thank you.
    Senator Blumenthal. Thank you. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Blumenthal. And just as a 
point here, the special services definition in the draft is 
drawn from the FCC's 2010 rules, former Chairman Waxman's 2010 
legislative proposal, and the President's recent statements, 
which all recognize development of specialized services as a 
pro-innovation policy.
    The Senator from West Virginia, Senator Manchin.

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

    Senator Manchin. Thank you very much, Mr. Chairman. Thank 
you for this hearing. Sorry we have been running to all 
different committees today, but I want to thank all of you.
    I come from the rural state of West Virginia, which is a 
small rural state, like a lot of rural states in America. On 
Saturdays during football season, West Virginia University 
football stadium is our largest city. It holds about 66,000 
people, and that is our largest city, so that gives you an idea 
of what we are dealing with.
    And a small rural state like mine, pure deregulation does 
not have really a good track record. It did not work with the 
phone companies. It did not work with the utility companies. It 
did not work with the airlines. And we do not--if you tell a 
person do not worry, we are going to give you better service, 
we have had past experience where we do not believe that. So I 
guess we are a little bit like Missouri, the ``Show Me State.''
    What has worked in West Virginia is the public/private 
partnership model like the Universal Service Fund where private 
companies get a little help, a little incentive, to make 
investments and expand into our rural areas where you normally 
would not normally go because of markets. We understand that. 
This year we had over 90,000 West Virginians who will get 
broadband service because of USF programs.
    What concerns me, and tell me--somebody tell me if it is 
real--Mr. Kimmelman, maybe you know--that the FCC has told me 
that the bill will undercut the ability to continue these 
programs if we pass this bill. And if you could explain that in 
your opinion, I would appreciate it, sir.
    Mr. Kimmelman. Thank you, Senator Manchin. I do believe it 
is a program because that program originally started for 
telecommunication service. And to subsidize rural America to 
make sure in high-cost areas that we all had connectivity.
    Senator Manchin. Right.
    Mr. Kimmelman. So it is related to the definition of 
telecommunication service.
    The FCC has now tried to use its powers under 706 to extend 
broadband and offer incentives for investment in broadband in 
rural America. It is U Section 254 in conjunction with 706. Way 
too much in the weeds, Senator, but the point is that those are 
powers that in the draft as it currently exists could be 
eviscerated.
    And so, while that--it would still be there for telephone 
service. For extending broadband, it is a big question mark.
    Commissioner McDowell. If I could just comment on that, I 
was a Commissioner at the FCC when we reformed the 
Interpersonal Service Distribution Program in the fall of 
2011--October 2011. And actually we reformed it to support 
broadband, and it was actually--now it is a broadband subsidy 
rather than an old-fashioned phone subsidy.
    This bill, in my legal opinion, does not undermine. I know 
that probably Chairman Thune from South Dakota, a net 
recipient, would not support or draft a bill if it undermined 
universal service. What it will perhaps do is cabin off the 
ability of the FCC to tax broadband Internet access and raise 
consumers' rates therefore.
    But in terms of the distribution side, that order should 
stand. And I do not see any language in this bill that would 
harm the distribution of universal service.
    Senator Manchin. Would we be able to have the FCC here so 
we can find out who is telling the truth?
    The Chairman. Well, that is----
    Senator Manchin. Or whose opinion is accurate, let us put 
that--I am sorry.
    The Chairman. You can grab six of them over there, Joe.
    Senator Manchin. OK, very quickly because my time is 
running out and I need to ask Mr. Misener something.
    Dr. Turner-Lee. [Off audio.] I agree with Mr. McDowell as 
well as Gene in terms of being just really careful that the 
authority is not granted to protect universal service, but 
there is also the creative way that a provision could be put 
into the legislation that could actually enforce it as well. So 
I think that is another way to actually look at it.
    So without throwing the baby out with the bathwater, I 
think we could also look at a provision that goes into the 
draft legislation that could actually protect the Universal 
Service Fund.
    Senator Manchin. Ms. Misener, in 1996 you were a startup 
company, right--Amazon?
    Mr. Misener. Yes, sir.
    Senator Manchin. OK. If you--you know, we are trying to 
strike the balance between the free market and consumer 
protections, and I think it has been said can we not create a 
regulatory regime with innovation stifled because the Federal 
Government cannot keep up with the speed of the business. 
However, as you know, regulators need to have oversight to 
ensure a level playing field, right, and fair competition among 
entrepreneurs big and small.
    What changes, if any, would be needed in the bill to ensure 
that today's startups are able to compete on a level playing 
field? How would this have affected you?
    Mr. Misener. Thank you, Senator. We always think in terms 
of our customers, and their access to us, and the kinds of 
services that we want to be able to provide to them. And so, it 
is the choice of consumers that matters most. Startups will do 
fine so long as consumers can reach them. If somehow consumers, 
however, are cut off from them, the startups will not succeed, 
but the consumer will be denied the choice.
    If we have net neutrality provisions, the reasonable, not 
overreaching, ones that actually protect that consumer choice, 
the startups will be fine. The innovators will be able to 
provide their services without permission from broadband 
network operators to the consumers who have the choice.
    Senator Manchin. Mr. Chairman, if I could submit the rest 
of my questions to the Committee.
    The Chairman. I thank the Senator from West Virginia. 
Senator Schatz?

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

    Senator Schatz. Thank you, Mr. Chairman. I am looking 
forward to working with you and Ranking Member Nelson and my 
Subcommittee Chair, Senator Wicker. We all agree that an open 
Internet has to function in today's society, and that is why I 
think it is important for us to work together to consider the 
best path forward to protect net neutrality.
    As we consider our options, we have got to aim and 
accomplish and balance three objectives, in my opinion: to 
provide maximum protection to consumers, to provide maximum 
flexibility to promote innovation and the Internet economy, 
while also enabling continued investment in the state-of-the-
art broadband infrastructure. Congress always has the 
prerogative to legislate, but we also have to recognize the 
advantages of an expert agency. And especially in the area of 
the Internet, the FCC needs to have flexible forward-looking 
authority to protect consumers and an innovative Internet.
    I am afraid the draft legislative proposal would make it 
nearly impossible for the FCC to deal with future problems or 
opportunities as they come up. The point here is that when it 
comes to telecommunications and the Internet, Congress is best 
suited to establish broad policies, but the particulars ought 
to be left to the expert agencies. So while I intend to keep an 
open mind on possible legislation, I do have deep reservations 
about intervening in the FCC's ongoing rulemaking.
    I believe this flexibility is really critical, and I have a 
question perhaps for all the panel depending on time, but I 
will start with Mr. Kimmelman. I am concerned this draft 
legislation does not preserve the authority in the FCC that it 
needs. My question is simply, is there a way to modify this 
legislation that holds net neutrality harmless, but also allows 
the FCC to evolve and promulgate rules and respond to 
circumstances that are going to be very difficult to anticipate 
from this committee?
    Mr. Kimmelman. Yes, thank you, Senator Schatz. There 
certainly is. I mean, it is up to Congress how to draft it. I 
think this is a matter of getting past all the titles and the 
characterizations and getting at the functions. Flexibility 
requires giving the FCC tools, giving them, as you say, 
principles, guidance, direction, and parameters for action, and 
then giving them the flexibility to work with it. That has 
traditionally been rulemaking authority. Congress can obviously 
call it whatever it wants, but the attributes need to be there 
in order for that flexibility to exist.
    Senator Schatz. Thank you. Mr. Misener?
    Mr. Misener. Thank you, Senator. You know, some of the 
arguments against the FCC's actions actually are sort of 
arguments against having an FCC in the first place. And if 
there were not an agency there now, part of the discussion 
might be should we create a specialized agency? That is 
obviously counter factual. Yes, the agency is 80 years old, but 
that is also a good thing. It has been around for a long time. 
It works on a lot of things. It is a big, large agency. It does 
some good things.
    I cannot imagine net neutrality being lower than number, 
say, three or four on the list of things that the FCC is 
working on. So if we have got a regulatory agency specialized 
in telecommunications, they ought to be working on net 
neutrality above so many other things that they already work 
on.
    Senator Schatz. Go ahead, Mr. McDowell.
    Commissioner McDowell. Senator, I just--very quickly, which 
is the Federal Trade Commission has jurisdiction here. Section 
5 of the Federal Trade Commission Act protects consumers in all 
sorts of complex tech industries. It could be Internet search. 
It could be computer software, disk operating systems, things 
of that nature. And actually what Title II would do would be 
take away the authority from the FTC under something called 
``the common carrier exemption,'' which is in the statute, and 
put it only in the hands of the FCC.
    And so, actually I think your own logic shows that you 
probably do not want Title II legislation. You want to have 
perhaps similar type consumer protection and enforcement only 
type protections. The FTC has worked quite well as an 
enforcement-only non-rulemaking body for over a hundred years, 
not just 80 years. So if the length of time of an agency is the 
measure of its success, then I guess the FTC is more successful 
than the FCC.
    Senator Schatz. Ms. Baker?
    Commissioner Baker. I agree with Rob. I think that people 
understand regulators regulate. The last example that we could 
see was when the FCC thinks that what they are going to do and 
what the consumers actually think that they are doing is the 
apps community. When the FCC enacted text 9-1-1, it affected 
the apps community.
    I think bringing everybody under Title II is not the way to 
go. I think the legislation is the first option so that we can 
have great security as to what the future brings, and the FCC--
the much more legal path forward for all consumers is 706.
    Senator Schatz. Right. I will just wrap up. My time has 
expired. But it seems to me that the arguments you are making 
against the FCC's actions are really particular to the FCC 
proposed rules, but it is not as though it is necessary in 
order to legislate to take away all future authority and 
flexibility from the FCC. So that is the balance that, you 
know, I am trying to explore here. It is possible that we will 
not be able to achieve that balance. It is possible that the 
FCC moves forward with its rules and we cannot come to a 
consensus. But I want to allow for the possibility that there 
is a space for legislation and allowing the FCC to continue to 
do its work. Thank you, Mr. Chairman.
    [The prepared statement of Senator Schatz follows:]

   Prepared Statement of Hon. Brian Schatz, U.S. Senator from Hawaii
    Mr. Chairman. I am looking forward to working with you, Ranking 
Member Nelson, and my Subcommittee Chair, Senator Wicker. We all agree 
that an open Internet has become crucial for everyone to function in 
today's society. That is why it is important for us to work together to 
consider the best path forward to protect net neutrality.
    As we consider our options, we must aim to accomplish and balance 
three objectives:

   provide maximum protection to consumers,

   provide maximum flexibility to promote innovation and the 
        Internet economy while also

   enabling continued investment in a state of the art 
        broadband infrastructure.

    Most importantly, net neutrality protections must ensure that the 
FCC has the ongoing authority to protect consumers. To be effective, 
these rules must contain at least four essential elements:

   they must prohibit fast lanes,

   they must not block lawful content,

   they must prohibit throttling while allowing for reasonable 
        network management, and

   they must increase transparency.

    So, I look forward to hearing from our witnesses on the Chairman's 
draft legislation and on the FCC's ongoing rulemaking and the best way 
to achieve each of these objectives.
    Congress always has the prerogative to legislate, but we also must 
recognize the advantages of an empowered expert agency. Particularly in 
an area as dynamic as the Internet, the FCC should have flexible, 
forward-looking authority. I fear that the draft legislative proposal 
would make it nearly impossible for the FCC to deal with future 
problems or opportunities as they come up.
    The point here is that when it comes to telecommunications and the 
Internet, Congress is best suited to establish broad policies but the 
particulars ought to be left to the expert agency.
    So, while I intend to keep an open mind on possible legislation, I 
have deep reservations about intervening in the FCC's ongoing 
rulemaking.
    I look forward to working with Chairman Thune, Ranking Member 
Nelson and Subcommittee Chairman Wicker to ensure that net neutrality 
protections first and foremost protect consumers while enabling our 
companies to continue to invest, innovate and succeed.

    The Chairman. Thank you, Senator Schatz. Senator Peters, 
you are up.

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

    Senator Peters. Thank you. Thank you, Mr. Chairman. And I 
would certainly like to thank you, Chairman Thune, and Ranking 
Member Nelson, for convening this hearing and for your work. 
And certainly appreciate your work, Senator Thune, as well as 
my home state colleague or former colleague, Congressman Upton, 
for your work on this bill as we go forward. I certainly am a 
believer that, as everybody, I think, on this committee, that 
affordable high-speed Internet is an issue that we are all 
hearing about back in our districts, and understand it is 
extremely important that it is open, it is available.
    And I certainly appreciated Senator Markey's earlier 
comments talking about if you are looking at trying to develop 
business and small business in particular, that is what I hear 
when I am home. I was in an incubator in Detroit just a few 
weeks ago, and all of those companies are coming up with 
incredible ideas. And I might say, if I may put a little plug 
in for Detroit here when people kind of have a view of Detroit. 
If you go into this incubator and close your eyes and open your 
eyes up when you walk, you think you are in Silicon Valley, not 
in Detroit, Michigan. But you are in Detroit, Michigan, so 
there is a lot of exciting things happening, and it is a result 
of the Internet and the open architecture that is there that we 
want to make sure is there going forward.
    Now, whether that means using Title II, whether it means 
legislation, whether it means doing a combination of the two, I 
am certainly open to that as well, and look forward to a 
further discussion of these issues. But I have a couple of 
things that I just wanted to ask the panel broadly about the 
future because I think every one of you said at various time 
that this is a constantly evolving area, that we have got to 
stay on top of it. So we want to make sure that we have a 
framework that is flexible.
    So my first question is, as you know the Communications Act 
was last overhauled back in 1996, and I would be curious to 
hear all of your opinions. Do you see the draft legislation 
that we are discussing here today as a stop gap measure meant 
to endure for just a year or two while we are working on this 
new act, or do you think this could be a long-term framework 
for broadband regulation for years to come? If we could just 
maybe with Ms. Baker.
    Commissioner Baker. I support the--I support this as 
something that if we have an issue of net neutrality that needs 
to be addressed, and I think this is a great start to 
addressing net neutrality. I think that there could be a Com 
Act rewrite that would also occur to address greater issue. I 
think when Senator Markey was talking about the digital issues 
with disabilities, he did a great job on CCBA, enacting 
targeted legislation for disabilities going forward in the IP 
world, and it is has made a world of difference. I think that 
this is a great foundation. I think it will endure, but I think 
that there could be part of the Com Act that could also be 
reexamined since 1996 was a long time ago.
    Mr. Kimmelman. Senator Peters, it is a great question. I 
think that from watching this industry for more than 30 years 
and participating here, this is your one shot at the apple. I 
do not see Congress coming back to this over and over again. It 
never has. I cannot imagine it ever will. And in this 
environment it is quite difficult. So I would say if you are 
going to legislate, set policy and think about everything you 
need to do, and think about doing no harm as well.
    And I think that in trying to address a direct issue 
related to net neutrality and a lot of principles that all of 
us agree on, there are a number of things that are left out. 
There are a number of things that may do harm. And I think you 
ought to be really careful about that because this will endure. 
I cannot imagine that we are doing multiple bills through 
Congress this year.
    Commissioner McDowell. So I have known Gene a long time, 
and surprisingly we agree on more things than people realize. 
So we believe that, I think, any future legislation should 
focus on consumer protection, and I also agree with do no harm.
    I think to answer the question directly, the answer is yes. 
Actually you can have this bill and you can have a 
comprehensive rewrite, but you do not have to do it all at the 
same time. You could do this bill first, and then later it gets 
incorporated into a comprehensive rewrite. And I think a 
comprehensive rewrite is needed to tear down those siloes that 
are technology-centric. They were created in 1934.
    And then let us look at it through the lens of consumers, 
and consumers do not really care how they get their information 
so long as they are getting it and they are able to generate 
it.
    Mr. Misener. Senator, I think it is most important to get 
it right because we do not know whether it is going to endure 
or not. We do not know whether it is going to be subsumed into 
a new act or overtaken by a new act, but we have to get it 
right.
    Mr. Simmons. Senator, from our standpoint, we think this is 
a reasonable framework. At least it is something that is not an 
attempt to reconfigure something old into something required 
new. I had an acquaintance who offered some prairie logic, and 
he told me that it makes absolutely no sense to try to figure 
out how--what part of the crescent wrench we need to use in 
order to pound a nail. What we really need to do is to provide 
somebody with a hammer.
    And I think in this situation we need to provide the right 
tools to the FCC for them to do their job. I do not believe 
they have the right tools now. Our debate is about trying to 
configure the tools that might be available into something that 
could be useful when, in fact, we need to be able to develop 
the right tools, and I believe this legislation is a reasonable 
framework to do just that.
    Dr. Turner-Lee. So I agree with most of what was said on 
the panel, and I will offer some other thoughts, Senator, and 
it is a great question with the Com Act. So I think this 
juncture that we are in is to address this net neutrality 
debate and the legal gymnastics that we have been in for a long 
time. We need to give the FCC something that can withstand in 
the courts, and I think we should take that seriously, and stop 
putting all these issues into the bucket, and do a 
comprehensive Telecom Act rewrite.
    I think the modernization of that act is so critical to so 
many other parts of the ecosystem that we would be fooling 
ourselves if we think that we cannot go back to that and 
revisit what that 1934 act looks like. Even the last update on 
spectrum policy in 1996--the ecosystem has changed 
dramatically.
    So I would just suggest that if this process can go forward 
with the draft legislation, that this is seen as a provision in 
that larger bill that we cannot take back. And so, I think the 
seriousness of getting past this is important, but I do not 
think we need to come back for this again because that is what 
we are trying to stop by having this conversation.
    Senator Peters. All right, thank you.
    The Chairman. Thank you, and I would echo what has been 
said. We would love to do an update. It's time to do an update. 
It's time to modernize the Act, but that is a debate for 
another day. Right now, we are focused specifically on this 
issue, and it is an issue that I think needs to be dealt with 
and addressed and provided some certainty.
    My understanding is Senator Booker has one more question, 
is that correct?
    Senator Booker. Yes.
    The Chairman. I think Senator Nelson has one more question, 
and Senator Cantwell has been willing to defer to Senator 
Booker. So if you would like to proceed.
    Senator Booker. I just want to, Dr. Turner--I just want 
to--Dr. Turner-Lee, excuse me. I just want to ask one more 
question because I actually think, again, we agree that these 
issues urgently need to be addressed, but I just do not 
understand your cure for them. And the reason why over a 
hundred civil rights organizations have signed onto that letter 
is because the Court specifically said that the only way you 
could regulate the bad behavior is by making them common 
carriers under Title II.
    And I just want to ask from you, you rely on Section 706. 
You say in your testimony that one approach would be to use the 
consumer friendly complaint process modeled on the probable 
cause paradigm in Title 7 of the Civil Rights Act of 1964. Now, 
having dealt with the world of EEOC complaints, having had one 
parent that was dealing with that professionally, a lot of 
people find that process wholly inadequate to deal with bias, 
racism, and other types of discrimination.
    In fact, when you are asking in terms of this world of 
technology poor communities, communities of color to have the 
sophistication with which to file complaints when they are not 
engineers and they are not the like, they often do not have 
them. I bring your attention to even some of my colleagues last 
year who put forth a minority paper criticizing this very 
process by which to stop discrimination. Their report was 
entitled ``EEOC''--using the process you say, putting the onus 
on the consumer to make the complaint. Their paper was 
entitled, ``EEOC an Agency on the Wrong Track: Litigation 
Failures, Misfoucused Priorities, and Lack of Transparency 
Raise Concerns About an Important Anti-Discrimination Agency.''
    So I would just ask you to respond that if we really are 
about the goal of making sure that minorities, poor 
communities, disadvantaged communities, marginalized 
communities who right now are not even being served by the 
juggernauts and the behemoths in this area, why do you think 
this is an adequate cure when it is not in the civil rights 
world. And that is why, again, over a hundred civil rights 
organizations have stepped forward and said Title II is the way 
to go because the Court has specifically said that is the only 
way that the FCC has the authority with which to stop 
discriminatory practices.
    Dr. Turner-Lee. So this is an interesting one. I would love 
to follow this up after this, too, and keep talking to you 
about it because I think it is a healthy dialogue.
    So one of the reasons, and people have asked us why we 
actually chose not to go with an imposition of Title II 
framework is primarily, again, because if you look at modern 
1934 monopolistic practices and why the Com Act was designed to 
sort of break up the bill, that had a lot to do with the fact 
that telephone service was more ubiquitous in our communities. 
I mean, your grandmother, my grandmother, we all had phones, we 
all had had phone numbers. It was easy to talk and hear. Now, 
we are seeing broadband as so transformative that it is beyond 
just a static communications protocols, but it is things for 
our communities that matter the most, like telemedicine, 
distance learning, and all those other things.
    The fear of a Title II regime that allows that innovation 
to stop in our communities when we have such a broadband 
adoption gap is something that we should take very seriously. 
Yes, we want to put in protections. I totally agree with you, 
Senator--humbly agree with you--that we need to find ways to 
level the playing field so that more people can participate. 
But if we put in a regulatory regime against the regime that 
has actually allowed our folks to get more engaged in this 
ecosystem, to solve community problems, I think we are making a 
big mistake.
    And we need to really--as a researcher we need to look at 
that. Those places that have not built out may never get built 
out. They may get passed over because it is no longer going to 
be companies making money in other places to invest. It may be 
something else. So I think we need to look at those kinds of 
issues.
    Senator Booker. And just to interrupt. I am smiling because 
there is a regulatory regime in place to enforce the law right 
now to make sure that there is more broadband penetration, to 
make sure that localities, like Wilson, North Carolina, do 
their job. And what you are recommending here is to strip the 
Federal Government of that authority and shift the onus and the 
burden on the very disadvantaged poor populations, to put the 
burden on them to try to fight for their rights through a 
process that has proven anemic even in the civil rights 
community.
    Dr. Turner-Lee. Well, on the case of the EEO--so I will 
tell you why we actually chose that, outside of my boss being a 
fan of the EEOC. And those that know David Honick know that 
this is something that he has done as a civil rights lawyer for 
years. We tried to figure out a process where you just could 
not put 706 by itself. We felt as civil rights groups on this 
side of the argument that if we were going to propose 706, we 
could not do it without a way of enforcing and showing that 
there should be stronger consumer protections.
    EEO for all of its flaws has still been the go-to place for 
anybody to actually bring forth any kind of complaint or 
litigation without fear of reprisal or having somebody, you 
know, losing their job. It has been a place we have been able 
to carefully archive what those injustices have been so that 
other people can come and actually take advantage of the 
lessons that are learned without having to get an attorney. It 
also has been a place where we were actually able to help 
consumers not have to wait for a very long time to figure out 
if their resolution is going to resolve.
    We have talked to the Commission about this proposal. We 
have talked to enforcement. We have done our due diligence, 
Senator, in all honesty about this because we think if you are 
going to go a 706 route, you have to have a strong consumer 
protection. What our fear is if we say that we are going to 
take Title II and we decide to forbear all of those things, 
what is the risk of a new commission coming in and reversing 
that decision? What is the risk of going into litigation on 
that that takes the attention away from universal service 
reform, broadband deployment adoption, all the things you care 
about just because we are back in a quagmire with the FCC where 
we are not talking about our issues.
    I think those are serious concerns, and I respect many of 
the groups that are on that letter because we work with them on 
issues related to voting rights and other things. But we really 
have to think carefully and be cautious about the steps that we 
make because we have a $30 million person adoption problem in 
this country that is not narrowing even among----
    Senator Booker. And my time has expired. I want to be 
respectful of my colleagues. I will just finish by saying that 
the beautiful statements in the beginning of your statement to 
me do not hold with your cure. And in a Nation where there is a 
tragic digital divide and where the Internet is essential for 
poor children, for kids in rural neighborhoods, essential for 
families, and the situation as it is not acceptable to you or 
me. To take the teeth away from the only mechanism to enforce 
some vision in this country that we can catch up with 
competitors in the globe and have broadband penetration, have 
equal access, equal opportunity.
    The only hope often marginalized, disadvantaged communities 
have to stand up to the big Goliaths in the industry is often, 
as we have seen in civil rights and voting rights, the Federal 
Government. Thank you.
    Dr. Turner-Lee. Hopefully we can get together, Senator, and 
keep talking.
    Senator Booker. OK.
    The Chairman. I fully encourage that.
    [Laughter.]
    The Chairman. It is a fascinating discussion, and I am very 
hopeful that you win that argument.
    [Laughter.]
    The Chairman. But I do think this points out that there are 
a lot of questions, and I think the point that Dr. Turner-Lee 
is getting to is the legal uncertainty and the potential for a 
future commission. You create these rules, and you will be in 
court all the time on all ranges of them. Congress ought to be 
heard on this. Let us set some rules that apply to the modern 
age, not to the age that existed in 1934. Thank you, Senator 
Booker. Senator Cantwell?

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

    Senator Cantwell. Well, thank you, Mr. Chairman, and sorry 
I have been on the floor for most of the day and helping to 
manage for our side of the aisle the legislation on the 
Keystone pipeline. But this is an issue of great concern to me 
and to my constituents in the state of Washington. So I wish I 
was able to be here in person, but the great thing about the 
Internet is that I will be able to watch this hearing, and see 
what everybody said, and review it.
    And that is exactly the point. I am here to fight for an 
open Internet and to make sure that I have that right, and that 
I am not going to be artificially slowed down, or throttled, or 
pay extra because somebody, like an ISP--a Verizon or an AT&T 
or a Comcast--has decided to now bundle C-SPAN service with 
something else and make me pay more, or just simply think that 
what we do in Congress is pretty dull and boring, and so it is 
OK to slow it down anyway, and maybe not give us as quick 
access.
    So I have heard loud and clear from my constituents about 
this issue, and the innovation economy in the Pacific Northwest 
is not going to be quiet about this issue, I can guarantee you. 
It is the lifeblood of our economy, and they are going to be 
concerned about anything that does not set about the right 
rules for transparency and openness to the Internet.
    I learned recently this week that Starbucks has 15 million 
active users in its iPhone app, is doing more than five million 
transactions weekly, OK? So take one company who prides itself 
on how fast it can process coffee every morning, and they know 
you do not really want to have a long line because as soon as 
you start having a long line, then customers are going to go 
out the door.
    But now just think, a transaction that is slowed down even 
5 seconds on that little app because people are coming in and 
just taking the product, and thinking, and saying, OK, I am 
getting my coffee. Now, all of a sudden you slow that down by 
just 5 seconds or you say you are going to make those people 
pay more, you are artificially increasing the price of product. 
So my constituents wanted us--while I know we debate a lot 
about movies and, you know, certain types of content, my 
constituents wanted me to bring the message that this affects 
all of commerce. And they also believe that it has a chilling 
effect on investment because if you do not get a rate of return 
on the investment, if you are basically saying I am going to 
maybe you give you slower service in the future, then are you 
going to invest in your customers, or are you going to try to, 
you know, fight this challenge of having slower access.
    So I know you, Mr. Chairman, are earnest in trying to move 
this forward and to try to have this discussion. But I would 
ask the American public, you know, if you really are confident 
about the bundled services that you are getting now and you 
think that is really clear and transparent, then, you know, 
yes, you might like this. But otherwise, I would say to you 
that everything from data plans to exactly the prohibition on 
the FCC here would be problematic for the very principles that 
you are trying to protect in the bill.
    And while it is good to say on the one hand, you know, we 
do not want throttling, we want transparency, you know, we want 
all of these things, to me there are three concerns. First, it 
does not fix the fast lane problem because there is a big 
exemption big enough to drive a truck through, and that is 
right from my constituents, and I am happy to provide names and 
people. So, yes, the bill calls for transparency--no blocking, 
no throttling--but hidden in the middle of the bill are 
provisions that permit cable companies and telcos to create 
fast lanes for vaguely defined specialized services. So this 
leaves the innovators without the kind of guarantee to harness 
the full power of the Internet.
    Second, has to do with the fact that it fails to address 
the middle mile Internet interconnection issue and strips the 
FCC of any power to address it in the future. And finally, it 
jettisons the FCC's existing authority under 706 and takes all 
the flexibility and discretion away from the FCC which has to 
be the policeman on the beat. We do not want this bill to pass 
and be frozen in time. This is exactly the way the rules are. 
We need somebody that is going to continue to make sure that 
innovation happens and that we move forward.
    So I guess my question is because I see my time is almost 
up is, Mr. Kimmelman, do you have a concern--I see in your 
comments here about the protections--a long list of protections 
you are saying should be there for consumers. Do you have 
concerns that these--I just see these commercials all the time 
on TV, the telcos arguing about this data plan and that data 
plan, and do not be fooled by this data plan because it does 
not include this. Do you think that without transparency here 
we are going to be in the same debate on data plans only as it 
relates to now this broadband service?
    Mr. Kimmelman. Yes, Senator Cantwell. I agree with all your 
points. I think that the draft bill addresses a number of the 
important issues that need to be addressed, but it does strip 
the FCC of forward-looking flexibility or interpretive 
flexibility as to how to understand these going forward.
    So a fast lane of speed may be illegal under this, but I do 
worry about a data cap for certain usage, dropped bits, which 
is really your example, the Starbucks example. It may not be a 
faster lane, a faster speed, but some people's bits get 
dropped, others do not. Why? Does an affiliate of an Internet 
service provider get preferred treatment, faster treatment, 
better treatment, better quality of service? Those are all 
issues that need to be addressed.
    I do believe just to--on the specialized service I do want 
to come back because the Chairman pointed out something very 
important. This is not new language. This is language that has 
appeared elsewhere. I think the tricky part for you if you are 
legislating is to understand, well, the FCC might do something 
with a specialized service definition, and a number of us might 
dispute exactly what the words are. Under the current regime, 
we would then have the flexibility to come back and fight that 
out next week, next month, six months from now as applied and 
interpreted.
    So if Congress steps in and wants to make a definition like 
this, I would just urge you to be very careful about exactly 
what words you pick and what flexibility you give the FCC to 
move forward and understand how that is being used. Mr. Misener 
had some examples before of how it could be used anti-
competitively. That would be a legitimate concern. We want an 
agency to have the authority to look at that.
    Senator Cantwell. Mr. Chairman, I know you are trying to 
move legislation, and I respect that. To me, these are very 
tricky things, and while you can say you have a 65-mile an hour 
speed limit on a highway, but if no one is there enforcing it, 
pretty soon people are going to drive a lot faster. And the 
question is who is going to call the rules of the road here 
once we pass this legislation?
    If you just think about it, who would have thought that 
many consumers would be, you know, buying with an app, and yet 
that is a very short period of time. So it is hard to say what 
is going to come next. It is very important that we--to me, I 
want to see what the FCC does, and I hope they will protect--
truly protect net neutrality and protect an open Internet. I 
thank the Chair.
    The Chairman. I thank the Senator from Washington. And the 
one thing I can assure you they will do is use a 1934 law to do 
it. There has got to be a better way, guys. Senator Nelson, you 
had one more question I think.
    Senator Nelson. And, Senator Cantwell, congratulations on 
your Seahawks. That was one of the more exciting times.
    Mr. Chairman, I would like to have consent to put into the 
record a letter to you and to me from the National Association 
of Realtors asking that our discussions not hold up the FCC's 
deliberations.
    The Chairman. Without objection.
    [The information referred to follows:]

                          National Association of Realtors
                                   Washington, DC, January 20, 2015

Hon. John Thune,
Chairman,
Senate Commerce, Science, and Transportation Committee,
Washington, DC.
Hon. Bill Nelson,
Ranking Member,
Senate Commerce, Science, and Transportation Committee,
Washington, DC.

Dear Chairman Thune and Ranking Member Nelson:

    On behalf of 1.1 million members of the NATIONAL ASSOCIATION OF 
REALTORS (NAR), I write in advance of your hearing entitled: 
``Protecting the Internet and Consumers through Congressional Action'' 
to express NAR's belief that open Internet rules are necessary to 
protect our members, who are primarily independent contractors and 
small businesses, as well as their clients. NAR is encouraged to see 
lawmakers acknowledge the need for action to protect the open Internet. 
NAR, together with other Main Street businesses, has been making this 
case for many years. However, the legislative process should not hold 
up the rulemaking currently underway at the FCC.
    Recent statements from FCC Chairman Wheeler indicating that the FCC 
is moving toward strong, legally sustainable open Internet rules are 
encouraging. NAR supports open Internet rules that will protect 
American businesses and consumers by preventing Internet Service 
Providers (ISPs) from blocking, throttling, or discriminating against 
Internet traffic and prohibit paid prioritization arrangements. As you 
know, the FCC has a complete public record on this issue and should 
continue its work to vote on an Open Internet Order at its February 
meeting as planned.
    The Internet has been a driving force for innovation for decades, 
and our members, their customers, and local communities are benefiting 
from this innovation every day. The economic growth and job creation 
fueled by the open Internet is unprecedented in American economic 
history. This growth has been fostered by the Federal Communications 
Commission (FCC) under both Republican and Democrat administrations for 
over a decade.
    Our members, who identify themselves as REALTORS, represent a wide 
variety of real estate industry professionals. REALTORS have been 
early adopters of technology, and are industry innovators who 
understand that consumers today are seeking real estate information and 
services that are fast, convenient and comprehensive. Increasingly, 
technology innovations are driving the delivery of real estate services 
and the future of the real estate sales businesses.
    Streaming video, Voice over Internet Protocol, and mobile 
applications are commonly used in our businesses today. In the future, 
new technologies, like virtual reality and telepresence among others, 
will be available that will no doubt require open Internet access 
unencumbered by technical or financial discrimination.
    The benefits of broadband Internet for innovation and economic 
development are unparalleled. But the Nation will lose those tremendous 
benefits if the Internet does not remain an open platform, where 
Americans can innovate without permission and with low barriers to 
launching small businesses and creating jobs. Given this reality, it is 
important that this Committee work with the FCC to enact and preserve 
open Internet policies that promote competition between Internet 
application and service providers. NAR is ready to work with you on 
this important issue.
            Sincerely,
                                           Chris Polychron,
                                                    2015 President,
                                      National Association of REALTORS

cc: Members of the Senate Commerce, Science & Transportation Committee

    Senator Nelson. Mr. Kimmelman, the bill that is under 
discussion does not contain a general non-discrimination 
provision, nor does it provide regulatory discretion to the FCC 
to make such determinations. What do you think about that?
    Mr. Kimmelman. Senator Nelson, that is a major concern to 
us because, again, it may look very small, but this has been 
the overarching principle to get at fundamental concerns about 
unreasonable discrimination on networks as they evolve, 
services as they change. And so, I would hope that is not too 
big an ask to reconsider that issue as the legislation goes 
forward.
    Senator Nelson. Thank you.
    The Chairman. Thank you, Senator Nelson. I will just ask a 
couple of quick questions here, too. Mr. Misener, in your 
prepared testimony, you suggested that ``The Internet is 
fundamentally different both in technical design and practical 
operation from other major media, including newspapers, radio 
broadcasting, satellite TV, and cable.'' That is a quote from 
your statement. Is the Internet also different in technical 
design and practical operation from the copper wire public 
switch telephone network that Title II was written specifically 
to address?
    Mr. Misener. Of course.
    The Chairman. And so, why would we not want to come up with 
a new regime? Why would we take something that was designed in 
the era of copper wire public switch telephone networks and try 
and apply it to the Internet age?
    Mr. Misener. Because that's all the agency has to work with 
right now.
    The Chairman. And is that not an argument for why Congress 
ought to give them some direction?
    Mr. Misener. I am not arguing against that, Senator. Mr. 
Chairman, I support exploring this. I also--I have a very 
results-oriented perspective for this, and this is coming from 
our customers. They want their net neutrality. They know about 
the issue very strongly. They feel passionately about it. They 
deserve to have these net neutrality protections. And I am a 
lot less concerned, and I know they are not concerned at all 
about how those protections are given to them.
    If somehow they lose their net neutrality, they will know 
that they lost it, and they will look to us, the people 
involved in this policy discussion, and say we have failed. But 
if instead they keep it, we will have succeeded no matter what 
avenue we take. And so, I am looking forward to working with 
you and your committee on your very common sense approach.
    The Chairman. Let me just ask a quick question because 
there were some concerns raised before and concerns raised 
today that the draft would threaten the FCC's ability to 
enforce rules on issues like universal service, accessibility, 
9-1-1, and rural call completion. Our view is that the draft 
bill does not affect the ability of the FCC to address these 
issues because it has ample ancillary authority to deal with 
them.
    So that said, are the concerns that Amazon has with the 
discussion draft related to the FCC's ability to address issues 
like rural call completion or universal service?
    Mr. Misener. No, Mr. Chairman. With respect to getting 
consumers and businesses the certainty that they need to invest 
in purchase----
    The Chairman. So what Amazon is not, you aren't saying, 
that you believe that the FCC needs to reclassify until Title 
II to deal with 9-1-1 or accessibility issues.
    Mr. Misener. We do not have an opinion on that, Mr. 
Chairman. We have not studied this as well as others have. We 
have been laser-focused on net neutrality and ensuring that the 
choice that inherent in the Internet is maintained for the 
future. And we are largely ambivalent on how that choice is 
maintained.
    The Chairman. Mr. McDowell?
    Commissioner McDowell. Mr. Chairman, the FCC has looked at 
Voice over Internet Protocol and applied a lot of these types 
of requirements on voice over and international protocol even 
though it is an information service that does not fall under 
Title II. That has been upheld by the appellate courts. In 
addition, with universal service, as I said earlier, in October 
2011, we re-purposed the subsidy program to support, by the 
way, all of the things that Senator Booker so eloquently 
pointed out as well as support for rural services. But 
broadband information services, we did that. That was 
challenged before the 10th Circuit very vehemently in one of 
the most aggressive, complex pieces of litigation I have ever 
seen in my career, and we won.
    And keep in mind, this was the first bipartisan entitlement 
reform since 1996. There were Democrats and myself on the FCC, 
and we all agreed that that was the way to go. And that was 
upheld by the courts. So, no, the bill as drafted in front of 
me today does not threaten those things. There is terrific 
appellate history here and precedent at the FCC to support all 
of those things you mentioned.
    Mr. Kimmelman. Mr. Chairman, may I just offer that I 
generally agree with my friend, Mr. McDowell. He has agreed 
with me at times, and I agree with him on this, except for his 
conclusion there for the following reason. Every time--the 
courts have looked askance at the FCC's use of ancillary 
authority, scrutinized it very carefully. And there is some 
inconsistency in how they have applied that. If Congress 
legislates, the question will be how are you thinking about 
that ancillary authority. How do you want it applied, because 
it is a new law. So if you intend for it to apply as it has in 
telecom in the past, I would very much suggest that you write 
that into the proposed language.
    The Chairman. All right. Senator Nelson, anything else for 
the good of the order? Senator Blumenthal?
    Senator Blumenthal. Thank you, Mr. Chairman. Just a couple 
of questions. Again, I welcome your--all of your willingness to 
work with the Committee on the proposal before, which, as you 
have said, raises questions, but may offer some potential--a 
lot of potential. And I think there are questions that need to 
be answered, and in my own mind the best approach may be to 
wait until we see what the FCC does. And I have taken a 
position on what I think it should do. Others may agree or 
disagree, but the likelihood of our acting before the FCC I 
think is small anyway.
    But let me ask you, Mr. Misener, if, and I'm picking his 
company simply without any aspersion or disparagement. It is a 
great company. If Comcast decided to cap the amount of data a 
consumer is allowed to use each month, and it exempted any 
streaming video of its own affiliated NBC content from that 
tap, could the FCC under this proposal stop that practice?
    Mr. Misener. Under the discussion draft, I am afraid not, 
and largely because the things underneath that ceiling which 
are terrific ideas to protect net neutrality--I keep saying it 
is a good list--the Commission has largely taken out of 
ensuring that those are actually implemented. And I think 
businesses like ours really are looking for the kind of 
certainty that only an agency which is into the details can 
provide it. It is great for Congress to have high-level 
instruction to the agency as the appropriate role, but 
companies like mine and many others are going to be looking to 
the agency for the detail and certainty of regulation that is 
designed to implement Congress' goals.
    Senator Blumenthal. I certainly would welcome other 
responses.
    Commissioner McDowell. Thank you.
    Senator Blumenthal. But I do not want to take too much 
time.
    Commissioner McDowell. I will be as quick as I possibly 
can, which is hard. But anyway----
    Senator Blumenthal. I would be happy to stay, but, you 
know, I do not want----
    Commissioner McDowell. Your specific example, Comcast is 
living under merger conditions that would prohibit that. But 
second of all, even if they were not, there is Section 5 of the 
Federal Trade Commission Act. There is also common law at the 
State and Federal level. I think there would be an avalanche of 
plaintiffs--you know, class action lawsuits to prevent that 
from happening.
    Senator Blumenthal. But that really begs the question----
    Commissioner McDowell. If it was anti-competitive.
    Senator Blumenthal.--the FCC is supposed to protect 
consumers so they do not have to----
    Commissioner McDowell. Right, but there is the Federal 
Trade Commission to protect them. There are State consumer 
advocates to protect them. There are State Attorneys General, 
of which you were one, there to protect them. There is lots of 
overlapping law here. The notion that there is no law here 
protecting consumers is a myth. It is an absolute myth.
    Senator Blumenthal. And I hate----
    Mr. Misener. But so much of what Mr. McDowell talks about 
is----
    Senator Blumenthal. I am sorry. Could you repeat your 
point, Mr. Misener?
    Mr. Misener. I am sorry, Senator. What Mr. McDowell keeps 
going back to is FTC involvement in this, and if the FTC were a 
rulemaking authority that actually promulgated rules that 
companies like mine could look at, and examine, and get the 
certainty from, that is one thing. But ex-post regulation is 
not helpful in developing certainty.
    Commissioner McDowell. It has worked thus far.
    Senator Blumenthal. Did you have a comment, Mr. Kimmelman?
    Mr. Kimmelman. I was effectively going to say the same 
thing as Mr. Misener. The after the fact competition analysis 
at the FTC, whether it is antitrust or looking at unfair 
practices is extremely lengthy, subject to a lot of the same 
litigation he is criticizing with the FCC, has very seldom been 
practiced. And it has survived as a sleepy little agency 
because it has not done a whole lot in this space, and it does 
not have rulemaking authority.
    So I agree with Mr. Misener. I do not believe most of the 
companies represented at this table, and maybe many of the 
senators would want to give them rulemaking authority, but that 
is just a guess.
    Senator Blumenthal. And I would just say, you know, since 
you have alluded to my own experience, and I know you know an 
immense amount about this area, to say, well, the Attorneys 
General can do it sounds good, but the attorneys general are so 
limited in resources. And as with any law and any rule, it is 
dead letter unless there is effective enforcement. And the 
burdens of enforcement are much more substantial in reality--in 
practical reality than they may seem on theory or on paper, a 
fact that I know you well understand from your own experience.
    Let me just conclude with this quick question to Mr. 
Kimmelman. The broadband companies--or any of you who want to 
address it. The broadband companies seem to receive a lot of 
assistance, a lot of public assistance--spectrum, public 
rights-of-way, billions of dollars in universal service funds, 
large open-ended liability protection, sometimes to my great 
chagrin from litigation in the Communications Decency Act.
    So the question on my mind is, why should the public--us, 
all of us--provide all of these very substantive benefits, but 
insist on only very limited consumer protections?
    Mr. Kimmelman. Well, Senator, I don't think you should. I 
think that those are wonderful benefits. They also raise a lot 
of capital on the market, and I fully respect that. I think it 
is very critical for our market economy. But they do get 
government benefits, and there should be obligations. I think 
the question is what is the right amount. What is the right 
balance there?
    And I think there is a lot in the Communications Act that 
can basically oblige them to do things that you think are 
reasonable in return for those public benefits. I would hope we 
would preserve those.
    Senator Blumenthal. And I would certainly welcome other 
comments as long--I thank the Chairman for his indulgence.
    Dr. Turner-Lee. And I will be quick, Senator. I think that 
is why, going back to the earlier question about the 
Communications Act rewrite or the Modernization Communications 
Act, I think re-looking at the public interest standard right 
now, which has been very Morpheus in terms of what is 
acceptable, what is not acceptable, what are the give and takes 
that we have today is a serious discussion to have. And, again, 
I think that is why we cannot take that off the table as 
something that is very important to this country to actually go 
back and update that. But we have to get past this quagmire 
right now. But your point is well taken, and I think it is one 
that should be taken up at that time.
    Commissioner Baker. And I would just like to say that just 
start where--end where I started, which is wireless is 
different, and we are differently technically. When you talk 
about data caps, when you talk about spectrum constraint, when 
you talk about throttling, I would say we have to optimize the 
networks for our users' experience so that everyone can have 
the best experience. And when you talk about spectrum, we have 
paid billions of dollars for it to the Federal Government, and 
continue to pay billions of dollars to the Federal Government, 
a $45 billion auction going on right now.
    So as we move forward in these discussions, I just want to 
put the asterisk in your mind that wireless is different from a 
technical competitive legal way. We need to make sure that we 
can differentiate it in the rules.
    Mr. Simmons. Senator----
    Senator Blumenthal. Well, I--go ahead.
    Mr. Simmons. I am sorry. Senator, if I could, as a cable 
operator, broadband operator, we do not get free right-of-way 
with all that. We pay for the right-of-way in our franchise 
fees. We also do not receive any subsidies, unlike a number of 
our competitors. We are not eligible for stimulus activity in 
all of that. Our networks are built purely with private risk 
capital, and we rely on the satisfaction of customers, frankly, 
for our only means of survival. So I just wanted to share that 
point for the question.
    Senator Blumenthal. I appreciate it. That is a very good 
point, and I really do appreciate your coming all the way from 
South Dakota to be with us today.
    Mr. Simmons. Oh, thank you.
    Senator Blumenthal. I hear it is a long ways away.
    The Chairman. That is another issue for this committee.
    [Laughter.]
    Senator Blumenthal. But I want to, again, thank the 
Chairman and especially all of you. I apologize for the wait 
that you had, but this hearing has been very, very valuable, 
and you have been very helpful. Thank you.
    The Chairman. Yes. And I would just say, too, and just the 
final question, I guess, have any of you seen what the FCC is 
going to do?
    Commissioner Baker. No.
    The Chairman. OK.
    Commissioner McDowell. Absolutely not. I am still under my 
ethics ban, just for the record.
    [Laughter.]
    The Chairman. All right. Anybody expect to?
    Commissioner Baker. No, nothing.
    The Chairman. All right. And I just say that because I 
think this process is so much more open. I mean, I put out a 
draft, you are all shooting at it. That is fine.
    [Laughter.]
    The Chairman. That is the way the process works, but that 
is why I think there is so much in terms of getting public 
involvement. And this has been a great hearing, and you have 
been a great panel. Thank you for your great answers to the 
questions. It has been very informative. And a lot of good 
questions from our Senators on both sides. It is an important 
issue, and it is really important that we get it right. So 
thank you for your patience, and with that, this hearing is 
adjourned. And I thank my Ranking Member for his patience.
    [Whereupon, at 6:20 p.m., the hearing was adjourned.]

                            A P P E N D I X

   Prepared Statement of Hon. Tom Udall, U.S. Senator from New Mexico
    I want to thank Chairman Thune for calling this hearing today. It 
is great to be back here with you in the Commerce Committee.
    I am ready to work with the Chairman, Ranking Member Nelson, and my 
colleagues here on the many issues under this committee's jurisdiction. 
Internet and innovation policies are at the top of that list.
    Tackling the digital divide is critical for promoting economic 
opportunity, healthcare access, and education. Yet the Nation that 
invented the Internet lags behind other countries when it comes to 
broadband speeds. Unfortunately, my home state of New Mexico ranks 47th 
among states when it comes to the availability of download speeds 
greater than 3 megabits per second. According to 2013 data from the 
National Broadband Map, one out of four New Mexicans does not even have 
access to faster Internet speeds of 25 megabits per second. So I want 
to work to encourage investment in broadband networks where it is 
needed the most, and that is often in rural areas and on Tribal lands.
    But coming from a state where many are people are already stuck in 
the Internet slow lane illustrates for me what net neutrality is all 
about: no one should be a second-class citizen online. I've heard from 
hundreds of New Mexicans who want to ensure the Internet remains an 
open and fair forum for all. One constituent wrote to me about his 
opposition to Internet ``toll lanes'':

        ``[It is] essential to my job as a [film] location scout to 
        have quick access to information about local businesses, 
        schools, neighborhoods, and city governments within New Mexico. 
        . . . I need to access an always-changing variety of websites. 
        Slowing access to the majority of the web, while giving 
        preferential treatment to certain selected sites would affect 
        my ability to work in a competitive field.''

    Here is another reaction. Jared Tarbell co-founded the e-commerce 
site Etsy, and then he returned home to Albuquerque to start a new 
venture called Levitated. During a recent visit to this cutting edge 
workspace, he explained to me how important it is for entrepreneurs 
like him to keep the Internet fair and open.
    As I travel throughout New Mexico, I want to see Internet-based 
companies--such as a data center located on the Navajo Nation--have the 
same access to customers as Amazon and Netflix enjoy. That is how we 
can truly help bring the benefits of broadband to all.
    So I am encouraged by the Chairman Thune's draft legislation to 
protect the Open Internet. This is a positive step in the right 
direction. I do not think this draft bill should delay the FCC from 
taking action. Yet I am very encouraged that after, years of partisan 
debate, we appear to be closer than ever to consensus on the issue of 
net neutrality.
    Again, I look forward to today's hearing and working with my 
colleagues here on this and other important issues before the 
Committee.
    Thank you.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Marco Rubio to 
                      Hon. Meredith Attwell Baker
    Question 1. The use of wireless broadband and Internet connected 
devices has provided a firestorm of economic growth and innovation that 
was previously unimagined, and wireless traffic is projected to grow 
exponentially in the years ahead. Because of this, last year I unveiled 
a wireless innovation agenda and introduced legislation to free up 
additional spectrum for commercial use, both licensed and unlicensed. I 
strongly believe that Congress should enact policies that ensure that 
the U.S. continues to lead the world in wireless innovation and 
technology.
    Ms. Baker, can you tell me how this legislative effort, to preserve 
an open Internet, would affect the wireless industry's ability to grow 
our economy and provide innovative wireless technology to consumers 
versus the effect of the efforts being led by the FCC and the President 
to reclassify broadband service under Title II?
    Answer. We appreciate and fully support your wireless innovation 
agenda. The wireless industry currently faces significant regulatory 
uncertainty and the risk of future litigation and further uncertainty 
is very high. If the FCC chose to reclassify mobile broadband from 
Title I to the arcane Title II utility rules, it would treat our world-
leading mobile broadband networks the same as our roads, our electrical 
grids, and our water supply. The mobile industry changed more in the 
last six months than those industries in the last 60 years, and none of 
these industries have anywhere near the innovation or competition that 
is in the U.S. wireless industry. Legislation is the best path forward 
to preserve an open Internet and provide the certainty necessary for 
mobile broadband providers to continue investing billions, creating 
jobs, and bringing innovative products to consumers.

    Question 2. It seems competition on the basis of network strength, 
made possible by efficient network management and investment, is a key 
differentiator in the U.S. market, with carriers constantly offering 
new and innovative data plans and technologies to attract consumers.
    Are you concerned that an unintended consequence of new rules out 
of the FCC could prevent carriers from being able to differentiate 
themselves and make the wireless industry less competitive, ultimately 
harming the very consumers that rules are supposed to protect?
    Answer. Yes. As I highlighted in my testimony, wireless is 
different. Mobile broadband providers face many unique technical 
challenges and as your question indicates carriers compete based on 
their network strength, among other things. These challenges include 
limited spectrum resources, varying numbers of users at any one time, 
differing handsets with differing capabilities, differing spectrum 
bands and differing technology platforms, and each user's constantly 
changing channel conditions, to name a few. These challenges demand far 
more complex network management than fixed broadband requires and 
mobile providers must retain flexibility to develop innovative services 
plans and offerings in order to attract consumers. If these differences 
are not recognized, it actually puts wireless at a competitive 
disadvantage, not only with each other but with fixed broadband 
services. There is more bandwidth in a single strand of fiber than in 
all of the spectrum allocated for commercial mobile services and mobile 
broadband providers cannot simply ``build their way out'' of capacity 
constraints. The significant amount of competition for mobile broadband 
services leads today to over 700 different service plans and 
competitive options. We agree that the risk of a ``one-size-fits-all'' 
mobile Internet under Title II would harm consumers that benefit from 
significant competitive differentiation and innovation today. To see 
the impact of monopoly-style regulation on wireless, we can look to 
Europe, which is far behind 4G LTE deployment compared the U.S. Under a 
more heavy-handed regulatory regime, EU capital investment has 
unsurprisingly tracked far lower compared to U.S. investment levels, 
with U.S. wireless capex running 73 percent higher than that in five EU 
countries with similar population from 2011-14. The positive results of 
that U.S. investment: mobile networks with speeds 30 percent faster 
than Europe, while serving three times more LTE subscribers.

    Question 3. We have heard industry suggest that should the FCC 
follow through with a ruling on Net Neutrality it would create a 
significant burden for making continued investment in your networks. 
Yet, critics of that claim point to the recent AWS-3 auction, which 
surpassed $40 billion, as an indication that the wireless industry is 
well suited to continue making investments in infrastructure. Can you 
respond to those critics?
    Answer. In the last ten years, the wireless industry has invested 
over $260 billion in next generation networks. That degree of 
investment will be put at risk if the FCC reclassifies mobile broadband 
under Title II. While a number of factors affect investment decisions, 
the AWS-3 auction result demonstrates a few basic facts: six years is 
too long to wait between spectrum auctions and mobile broadband 
providers need more spectrum and fast. Furthermore, the AWS-3 auction 
demonstrates what happens when the FCC makes available spectrum on an 
exclusive and substantially cleared basis. Investment flows to such 
lightly-regulated environments, and consumers are the ultimate 
beneficiary. Further, if the Commission proceeds down the Title II 
path, the wireless industry would look to the Court of Appeals and 
Congress for a remedy, and given the clarity of Section 332, and years 
of FCC and judicial precedent, we have every confidence we would 
prevail in such an effort and the ultimate regulatory framework will 
encourage future innovation and investment.

    Question 4. It has become clear that the United States is seen 
around the world as a leader in wireless. When other countries' 
regulators are looking to the U.S. to try and emulate our success, what 
is the most important thing we should or shouldn't do in order to 
maintain our position of global leadership in wireless?
    Answer. As you correctly observe, when the U.S. is leading, the 
wrong thing to do is radically change the regulatory regime for 
wireless services. The U.S. leads the world in wireless investment and 
cutting-edge LTE networks and subscribers because of the light 
regulatory touch that has been applied to the wireless industry by 
Congress and the FCC. To maintain the U.S. position as the global 
leader in wireless innovation and deployment, the United States should 
continue to apply a mobile-specific regulatory touch to wireless 
services and providers. The reclassification of mobile broadband 
services as telecommunications services and the application of Title II 
to wireless broadband services would risk our abdication of leadership 
and enable other countries to surpass the U.S. in wireless investment 
and innovation. We urge the government to focus on allocating more 
spectrum for commercial use and modernizing the Communications Act.

    Question 5. Can you briefly describe the litigation vulnerabilities 
that would come from Title II reclassification?
    Answer. The litigation risks are significant and would result in 
substantial regulatory uncertainty for multiple years, which would 
ultimately harm U.S. consumers. The greatest vulnerability from Title 
II reclassification emanates from the fact that Congress under Section 
332 prohibits the FCC from imposing common carrier obligations on 
mobile broadband services because such services are neither commercial 
mobile radio services nor the functional equivalent thereof. In 
addition, mobile broadband services, just like all broadband services, 
are integrated information services that do include a separate 
telecommunications service component. The FCC properly classified 
mobile broadband services as information services in 2007, and any 
attempt to reclassify mobile broadband services as telecommunications 
services would have to survive the heightened scrutiny required by the 
Supreme Court in FCC v. Fox Television Stations, Inc. 556 U.S. 502 
(2009) because reclassification would have to rest upon factual 
findings that contradict those reached in 2007, and the information 
service classification decision in 2007 engendered reliance interests, 
namely that the wireless industry has invested tens of billions of 
dollars in reliance on the FCC's 2007 decision.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Deb Fischer to 
                      Hon. Meredith Attwell Baker
    Question 1. Ms. Baker--In 2010, the FCC chose a light-touch mobile-
specific approach to Open Internet rules. This allowed Americans to 
benefit with record-setting investment and innovation throughout the 
entire mobile ecosystem. Since then, applications have increased by 347 
percent, data traffic has increased 732 percent, and video traffic has 
increased 733 percent. Do you think Chairman Thune's draft legislation 
sufficiently takes the differences of wireless technologies into 
account so as not to disrupt the incredible growth we are seeing in 
your industry and that consumers have come to expect and demand? What 
might be the consequences on consumers if we don't give flexibility to 
wireless operators to manage their networks?
    Answer. Congressional action is the best path to preserve an open 
Internet and enable mobile broadband providers to continue investing 
billions, creating jobs, and bringing innovative products to consumers. 
The draft legislation is an excellent start, and we look forward to 
working with Chairman Thune and other members of the Committee to 
ensure that the legislation reflects the unique technical and 
operational challenges that mobile broadband providers face in 
dynamically managing their networks in real time. These challenges 
include reliance on a finite amount of spectrum, consumer mobility 
(which means a constantly fluctuating number of users in each cell 
site), hundreds of different handsets with different capabilities, a 
variety of technology platforms across multiple spectrum bands, and 
each user's constantly changing channel conditions, to name a few. 
These challenges demand complex and dynamic network management. To 
continue providing Americans with increasingly faster speeds and mobile 
Internet access anytime and anywhere, wireless providers must have the 
flexibility to manage their networks so that all users enjoy the 
highest quality service experience. Legislation should also reflect the 
highly competitive and innovative wireless marketplace.

    Question 2. To All Witnesses--While the FCC is in the process of 
ensuring net neutrality, some want the FCC to impose all of these 
obligations under the guise of ensuring consumer protection. Some argue 
that common carrier requirements on broadband providers should include 
almost most all of Title II, in addition to Sections 201, 202, and 208. 
Specifically, some activists have suggested the following parts of 
Title II must be applied to the broadband industry:

        UNIVERSAL SERVICE
        Sec. 214. [47 U.S.C. 214] Extension Of Lines
        Sec. 225. [47 U.S.C. 225] Telecommunications Services for 
        Hearing-Impaired and Speech-Impaired Individuals.
        Sec. 254. [47 U.S.C. 254] Universal Service.
        Sec. 255. [47 U.S.C. 255] Access by Persons With Disabilities.

        CONSUMER PROTECTION
        Sec. 217. [47 U.S.C. 217] Liability of Carrier for Acts and 
        Omissions of Agents.
        Sec. 222. [47 U.S.C. 222] Privacy Of Customer Information.
        Sec. 230. [47 U.S.C. 230] Protection for Private Blocking and 
        Screening of Offensive Material.
        Sec. 258. [47 U.S.C. 258] Illegal Changes in Subscriber Carrier 
        Selections.

        COMPETITION
        Sec. 224. [47 U.S.C. 224] Regulation of Pole Attachments.
        Sec. 253. [47 U.S.C. 253] Removal of Barriers to Entry.
        Sec. 251. [47 U.S.C. 251] Interconnection
        Sec. 256. [47 U.S.C. 256] Coordination for Interconnectivity.
        Sec. 257. [47 U.S.C. 257] Market Entry Barriers Proceeding.

    Do you agree or disagree that these sections of Title II common 
carrier regulation are needed? If you agree, please explain why.
    Answer. CTIA does not support the reclassification of broadband 
services as telecommunications services subject to Title II, or the 
application of Title II to the broadband industry.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Ron Johnson to 
                      Hon. Meredith Attwell Baker
    Question 1. According to your testimony, since 2010, wireless 
carriers have invested over $121 billion in capital expenditures, not 
including the cost of spectrum. If Chairman Wheeler and the FCC subject 
the wireless industry to rules that were designed for a monopoly 
telephone system and public utilities, I am concerned that it will 
chill this investment and impede future innovations. How can we ensure 
that any legislation we might enact to preserve an open Internet 
doesn't have a negative effect on capital investment?
    Answer. We share your concern. The U.S. wireless industry has a 
significant impact on our Nation's economy under the current regulatory 
framework. In the last ten years, the wireless industry has invested 
over $260 billion. In 2013, U.S. carriers invested a one year record 
high of more than $33 billion. This was four times as much in network 
infrastructure per subscriber than the rest of the world in 2013. In 
addition, U.S. carriers have paid $53 billion for spectrum and just bid 
over $40 billion in the AWS-3 auction over the last two months. In 
addition to these staggering figures, there are significant downstream 
effects through jobs, GDP and productivity. The wireless industry 
directly or indirectly supports 3.8 million jobs, or 2.6 percent of all 
U.S. employment. The wireless industry pays wages that are 65 percent 
higher than the national average and contributes $195.5 billion to the 
U.S. GDP. Our industry is now larger than the publishing, agriculture, 
hotels and lodging, air transportation, motion picture and recording, 
and motor vehicle manufacturing industry segments.
    CTIA believes an attempt to reclassify wireless broadband under 
Title II would be based upon dubious legal authority and would likely 
lead to years of litigation and uncertainty. The application of Title 
II, in any form, to wireless broadband would harm consumers and our 
economy, chill investment and impede future innovations. Clear 
Congressional legislation, in contrast, would provide legally 
sustainable requirements that protect Internet openness and recognize 
the unique technical and operational challenges that mobile networks 
face.

    Question 2. According to statistics, 92 percent of consumers have 
access to three or more mobile broadband providers, and 82 percent are 
served by four or more. In this highly competitive marketplace, isn't 
Internet openness essential for a mobile provider to win and retain 
customers?
    Answer. Yes. The wireless industry is fiercely competitive. They 
compete on price, speeds, service plans and offerings, quality of 
service or network management, and more. The result is a thriving, 
competitive mobile marketplace, with more choices, innovative options, 
and tremendous value. Internet openness is essential to attract and 
retain customers in today's wireless market. Not surprisingly, there 
has not been a single formal complaint filed since the adoption of the 
FCC's 2010 Open Internet rules.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Brian Schatz to 
                      Hon. Meredith Attwell Baker
    Question. I believe that the FCC needs to have ongoing, flexible 
authority over broadband. I am concerned that the draft legislation 
does not preserve that type of authority. What changes can--or should--
be made to the draft that would address this concern?
    Answer. Currently, the FCC has no clear and explicit authority to 
address net neutrality or other broadband-related concerns. 
Congressional action remains the best path for ensuring the FCC has 
sufficient and legally sustainable authority going forward.
    Section 13 of the draft legislation provides the FCC with case-by-
case adjudicatory authority, which gives the FCC flexibility to 
interpret companies' responsibilities under the law. As new issues 
involving the broadband market arise, the FCC will be able to evaluate 
how best to resolve disputes.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Cory Booker to 
                       Hon. Meredith Atwell Baker
    Question 1. One aspect largely absent from the debate on Chairman 
Thune's proposed neutrality legislation is the issue of 
interconnection. Interconnection is not covered under current 
legislation. Do you believe that interconnection points can be choke 
points to the Internet highway?
    Answer. Internet companies have exchanged traffic subject to 
privately negotiated arrangements since the commercialization of the 
Internet. This system has worked effectively and not resulted in choke 
points on the Internet highway.

    Question 1a. Under the proposed legislation, how would 
interconnection issues be addressed?
    Answer. The proposed legislation does not address interconnection, 
and is focused on end-user Internet access issues.

    Question 2. Students, health care providers, and entrepreneurs have 
benefited greatly from innovative online platforms and the free flow of 
information. I fear that, without strong net neutrality rules, a 
``tiered Internet'' could emerge, creating barriers for innovators and 
small businesses.
    In the absence of strong anti-discrimination protections provided 
under Title II, and without Section 706 authority, what tools does the 
FCC have to prevent discriminatory practices and differential treatment 
we all agree should be prohibited?
    Answer. The draft legislation provides the FCC with legally 
sustainable authority to enforce prohibitions on paid prioritization, 
except if a consumer affirmatively chose such an arrangement, as well 
as specialized services that would ``threaten the meaningful 
availability of broadband Internet access service'' or are designed to 
circumvent the legislation's requirements. Further, differentiation and 
robust competition in the wireless sector continues to deliver great 
value and new services to consumers, and we hope any new approach 
preserves the ability of highly competitive mobile broadband providers 
to compete and innovate with unique and targeted offerings, such as the 
education and health-based services you reference.

    Question 3. As currently drafted, what protections does the 
legislation provide that broadband reclassification would not?
    Answer. For the reasons detailed in the appendix to my written 
testimony, CTIA believes an attempt to reclassify wireless broadband 
under Title II would be based upon dubious legal authority and would 
likely lead to years of litigation and uncertainty. The legislation, in 
contrast, would provide legally sustainable requirements that protect 
Internet openness and could provide the same sort of statutory support 
for growth that enactment of Section 332 did for wireless voice in 
1993.

    Question 4. Do you believe, as the draft legislation suggests, the 
FCC should not be able to claim any authority under Section 706 of the 
Telecommunications Act of 1996?
    Answer. The strongest basis for the FCC's authority to ensure 
Internet openness would emanate from new, clear statutory authority 
provided by Congress. If such new authority was enacted, the FCC would 
not need to cite to other provisions.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Tom Udall to 
                       Hon. Meredith Atwell Baker
    Question 1. Ms. Baker, in your testimony, you argue that ``mobile 
is different'' than other communications technologies. Yet you indicate 
that CTIA would support net neutrality rules provided that such rules 
reflect the unique needs for wireless.
    Could you please clarify CTIA's position on what net neutrality 
principles or rules your member companies would support? For example, 
do you agree that if consumers want to go online to Amazon, they should 
be able to get there without artificial barriers, whether they are 
using an iPhone or a desktop computer?
    Answer. Yes, and that has always been the practice of the 
competitive wireless industry. Consumers should be able to access the 
legal content of their choosing using legal devices without artificial 
barriers as long as mobile broadband providers are able to manage their 
networks to address the unique congestion, interference, and other 
traffic management challenges faced by broadband providers that utilize 
spectrum and wireless networks to provide service to consumers. The 
proposed legislation would ensure such an outcome.

    Question 1a. Would CTIA support FCC enforcement authority for those 
types of clear ``rules of the road'' for net neutrality that CTIA 
endorses?
    Answer. CTIA supports the grant of adjudicatory authority for the 
FCC to resolve net neutrality-related disputes based upon clear 
statutory requirements.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Joe Manchin to 
                       Hon. Meredith Atwell Baker
    Question 1. During the hearing, I received conflicting information 
about how the Chairman's proposed legislation would impact Universal 
Service Fund (USF) broadband programs like the Connect America Fund 
(CAF) that help private companies make investments and expand their 
network into rural, underserved areas. Due to the importance of these 
programs to my state and the communities I represent, I am requesting a 
written explanation of the anticipated impacts this bill would have on 
USF programs from each of the witnesses, specifically:
    What authority or authorities does the Federal Communications 
Commission currently rely on to operate and execute USF programs like 
the Connect America Fund?
    Answer. Section 254 of the Communications Act is the primary 
jurisdictional basis to support Connect American Fund. The FCC has 
explained: ``Section 254 grants the Commission clear authority to 
support telecommunications services and to condition the receipt of 
universal service support on the deployment of broadband networks, both 
fixed and mobile, to consumers.'' The Commission has further concluded: 
``We also have independent authority under section 706 of the 
Telecommunications Act of 1996 to fund the deployment of broadband 
networks.'' Thus, the FCC's current classification of broadband as a 
Title I information service poses no obstacle to USF programs like the 
Connect America Fund that support broadband deployment in West Virginia 
today.

    Question 1a. Without either Section 706 of the Telecommunications 
Act of 1996 authority or Title II of the Communications Act of 1934 
authority, as proposed in the draft legislation, under what authority, 
if any, could the FCC incentivize broadband deployment?
    Answer. As explained above, the FCC has already concluded that 
Section 254 provides support for broadband services to high-cost areas, 
schools, libraries and hospitals, even though the relationship between 
broadband providers and consumers is classified as an information 
service under Title I. The FCC will therefore be able to continue to 
provide those subsidies and support going forward regardless of the 
classification of broadband services. Nothing in the draft legislation 
limits FCC ability to continue to support these important universal 
service priorities.
    Moreover, given the substantial investment that has flowed into 
broadband facilities over the last decade outside of Title II, we are 
concerned that the application of Title II and its regulatory weight 
could disincent this sort of investment that has lead to over $121 
billion over the last four years alone. We believe that the draft 
legislation and the clear statutory authority for ensuring Internet 
openness could be a spur to continued investment.

    Question 1b. What would happen to the Connect America Fund and 
similar programs should this legislation pass in its current form?
    Answer. The programs would continue to be administered by the FCC 
pursuant to its authority under Section 254 of the Communications Act.

    Question 2. One of the primary concerns I have about the proposal 
we are discussing today is the removal of all rulemaking authority. 
Businesses need certainty, and rulemaking allows businesses to 
understand how the general goals and standards Congress establishes in 
law--such as affordable and accessible Internet--will be specifically 
applied before they make investment decisions. The proposed bill 
removes all the transparency requirements included in rulemaking and 
replaces them with a new, retroactive, case-by-case rulemaking process 
that could be very difficult for small start-up businesses to 
understand. Without rulemaking, how would entrepreneurs understand how 
the FCC would apply the mandates of this bill to particular 
circumstances?
    Answer. Today, the wireless industry--from carriers to app 
developers--faces significant regulatory uncertainty and ongoing legal 
debate over the FCC's authority. Clear, Congressional action, like the 
draft legislation, is the best way to avoid years more of uncertainty 
for all affected stakeholders. Indeed, the legislation itself 
establishes rules without the delay and appellate review that accompany 
FCC rulemakings.
    Further, Section 13 of the draft legislation provides the FCC with 
case-by-case adjudicatory authority, which gives the FCC flexibility to 
interpret companies' responsibilities under the law. As new issues 
involving the broadband market arise, the FCC will be able to evaluate 
how best to resolve disputes.

    Question 2a. What opportunities would businesses and consumer 
groups have to weigh-in on the FCC's application of these rules going 
forward?
    Answer. Businesses and consumer groups would have the opportunity 
to participate in the FCC's complaint process. Indeed, the FCC recently 
launched a new consumer help center ``designed to empower consumers'' 
and ``streamline [the] complaint system'' with a new web-based 
interface that ``replaces 18 outdate complaint forms with one web 
portal'' and that will ``promptly serve complaints on providers, 
enabling them to respond more quickly to consumers.''

    Question 2b. How could any changes, however small, even be made to 
reflect the specific concerns of entrepreneurs or small businesses with 
the explicit prohibition on expanding Internet openness obligations 
included in Subsection (b) the draft bill?
    Answer. We believe that congressional action is the best path 
forward for entrepreneurs and small business to have explicit and clear 
statutory protections. Further, as noted above, Section 13 of the draft 
legislation provides the FCC with case-by-case adjudicatory authority, 
which gives the FCC flexibility to interpret companies' 
responsibilities under the law. As new issues involving the broadband 
market arise, the FCC will be able to evaluate how best to resolve 
disputes.

    Question 3. Do wireless network providers have different network 
management demands than wireline networks? Please explain.
    Answer. Yes. Mobile services are technically different, completely 
dependent upon limited spectrum resources requiring nimble and dynamic 
network management to deliver service to consumers on the go. There is 
more bandwidth in a single strand of fiber than in all of the spectrum 
allocated for commercial mobile services. And the use of spectrum to 
provide broadband services involves unique congestion, interference, 
and other traffic management challenges that do not apply to wireline 
network management. More detail on the significant technical 
differences facing mobile broadband providers can be found at http://
www.ctia.org/docs/default-source/default-document-library/net-
neutrality-and-technical-challenges-of-mobile-broadband-networks-9.pdf.

    Question 3a. If so, how would wireless service providers be 
impacted by a universal ``reasonable network management'' practice that 
treats all providers the same?
    Answer. We are encouraged that the draft legislation explicitly 
states that '' a network management practice is reasonable if it is 
appropriate and tailored to achieving a legitimate network management 
purpose, taking into account the particular network architecture and 
any technology and operational limitations of the broadband Internet 
access service provider.'' Wireless networks face unique congestion, 
interference and other traffic management challenges. Applying the same 
``reasonable network management'' standard to all providers would 
deprive wireless broadband providers of the ability to manage their 
networks in a manner that satisfies consumer expectations and 
recognizes the unique challenges faced when delivering an ever-
increasing amount of voice, video, and data traffic in a spectral 
environment.
                                 ______
                                 
     Response to Written Question Submitted by Hon. Deb Fischer to 
                             Gene Kimmelman
    Question. To All Witnesses--While the FCC is in the process of 
ensuring net neutrality, some want the FCC to impose all of these 
obligations under the guise of ensuring consumer protection. Some argue 
that common carrier requirements on broadband providers should include 
almost most all of Title II, in addition to Sections 201, 202, and 208. 
Specifically, some activists have suggested the following parts of 
Title II must be applied to the broadband industry:

        UNIVERSAL SERVICE
        Sec. 214. [47 U.S.C. 214] Extension Of Lines
        Sec. 225. [47 U.S.C. 225] Telecommunications Services for 
        Hearing-Impaired and Speech-Impaired Individuals.
        Sec. 254. [47 U.S.C. 254] Universal Service.
        Sec. 255. [47 U.S.C. 255] Access by Persons With Disabilities.

        CONSUMER PROTECTION
        Sec. 217. [47 U.S.C. 217] Liability of Carrier for Acts and 
        Omissions of Agents.
        Sec. 222. [47 U.S.C. 222] Privacy Of Customer Information.
        Sec. 230. [47 U.S.C. 230] Protection for Private Blocking and 
        Screening of Offensive Material.
        Sec. 258. [47 U.S.C. 258] Illegal Changes in Subscriber Carrier 
        Selections.

        COMPETITION
        Sec. 224. [47 U.S.C. 224] Regulation of Pole Attachments.
        Sec. 253. [47 U.S.C. 253] Removal of Barriers to Entry.
        Sec. 251. [47 U.S.C. 251] Interconnection
        Sec. 256. [47 U.S.C. 256] Coordination for Interconnectivity.
        Sec. 257. [47 U.S.C. 257] Market Entry Barriers Proceeding.

    Do you agree or disagree that these sections of Title II common 
carrier regulation are needed? If you agree, please explain why.
    Answer. Public Knowledge has consistently supported the idea that 
there are basic, fundamental values of communications networks that 
must be preserved under Internet protocol (IP) networks \1\, including 
protecting Universal Service, competition and interconnection of 
providers, and basic consumer protections such as privacy and truth-in-
billing practices. Whatever the classification status that the FCC 
currently or subsequently applies to broadband and IP networks, these 
values remain as the baseline expectations of the public under the 
Communications Act.
---------------------------------------------------------------------------
    \1\ https://www.publicknowledge.org/news-blog/blogs/five-
fundamentals-for-the-phone-network
-transition
---------------------------------------------------------------------------
    I agree that the listed sections of the Communications Act continue 
to be needed for traditional voice services and potentially for 
broadband services as well. All of them have been important statutory 
manifestations of the fundamental values of communications networks and 
the rules crafted from them have been applied to traditional voice 
telephone services. However, it is possible that the FCC might find 
that some of these sections need not apply to broadband in order to 
preserve the fundamental values when broadband is reclassified under 
Title II.
    In my testimony I highlighted concerns that the Thune draft bill 
may prevent the FCC ensuring that fundamental values (such as privacy, 
accessibility for the disabled, universal service, and others) could be 
protected because the draft bill limits the sort of further proceeding 
described above. Allowing the FCC such power can reduce regulatory 
burdens in the future through a transparent, APA-compliant process.
    The ongoing FCC proceeding around the transition of the phone 
network to an all IP network is an appropriate place for the FCC and 
stakeholders to wrestle with the length of time that such statutes are 
necessary for voice services. Should the Congress continue with a 
process to update the Communications Act, Congress will be forced to 
show how it will maintain the fundamental values of communications 
networks under an updated or new statutory regime, including 
maintaining the power of the FCC to enforce such protections.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Amy Klobuchar to 
                             Gene Kimmelman
    Question. I have some concerns about transparency and rules 
governing the points of network interconnections, an area that we 
should explore more. My concern about a lack of rules or enforcement is 
not a prediction or hypothetical--it's already happening in the voice 
networks. For the last five years, we've seen rural communities 
suffering from persistent call completion problems which arise because 
we don't have enough visibility or enforcement capability with respect 
to how calls are flowing across networks. This is just an example of 
what not understanding or having transparency on a part of a network 
can mean.
    Mr. Kimmelman, without some basic transparency at least at the 
interconnection between underlying networks, how do we protect 
consumers and achieve other important policy objectives?
    Answer. I agree that rules governing points of interconnection 
continue to be important to ensure that networks function properly for 
all Americans, no matter where they may live or work. Public Knowledge 
continues to support the bipartisan resolution led by Senators 
Klobuchar, Fischer, Thune, and others acknowledge the central role of 
the FCC in resolving rural call completion problems and encouraging the 
FCC to use its broad authority to address these concerns. Similarly, as 
networks transition to newer, all-IP networks, the power of the FCC to 
resolve such issues must be maintained regardless of technological 
upgrades made to our national communications networks. It does not help 
consumers to see net neutrality rules applied at the point of the 
network connecting last mile providers to consumers if the problem 
simply moves upstream to these interconnection points. I am encouraged 
that Chairman Wheeler has signaled that he intends to preserve to the 
FCC's ability to address interconnection concerns beyond the narrower 
proceeding around net neutrality rules. We believe he has the power to 
address these concerns under his current statutory authority. If the 
Congress moves forward with legislation around net neutrality or a 
Communications Act update, it should preserve the power of FCC to 
investigate and conduct the necessary rule makings to preserve the end-
to-end connectivity of the network for all Americans.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Brian Schatz to 
                             Gene Kimmelman
    Question. I believe that the FCC needs to have ongoing, flexible 
authority over broadband. I am concerned that the draft legislation 
does not preserve that type of authority. What changes can--or should--
be made to the draft that would address this concern?
    Answer. The simplest way to preserve flexible authority at the FCC 
would be to alter three parts of the draft bill. First, change Section 
1 of the draft bill to place the language in Title II of the 
Communications Act. Second, delete subsection b(1)--labeled 
``Commission Authority''--in the new section inserted to the 
Communications Act by Section 1 of the draft bill. Removing this takes 
away the limitations on FCC rulemaking authority beyond the rules 
prescribed in the draft bill, giving the FCC flexibility to investigate 
related topics as technology, business practices, and the market 
changes. Third, elimination Section 2 of the draft bill which limits 
the FCC authority under 706 that was upheld by the DC Circuit Court in 
the Verizon case. These changes will give the FCC the flexibility it 
needs to fully address open Internet concerns, while not preventing the 
FCC from protecting other basic consumer protections that I highlighted 
in my testimony may be in danger from such a narrowly tailored bill.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Cory Booker to 
                             Gene Kimmelman
    Question 1. One aspect largely absent from the debate on Chairman 
Thune's proposed neutrality legislation is the issue of 
interconnection. Interconnection is not covered under current 
legislation. Do you believe that interconnection points can be choke 
points to the Internet highway? Under the proposed legislation, how 
would interconnection issues be addressed?
    Answer. Yes, interconnection points can be choke points on the 
Internet if disputes over interconnection and peering agreements slow 
or limit traffic across different parts of the network. Consumers lose 
in this situation, through no fault of their own.
    The draft bill does not seem to address interconnection issues 
since it narrowly creates new rules to protect consumers, but limits 
the authority of the FCC to go beyond those consumer focused rules. I 
believe the agency already has the authority to address interconnection 
under Title II of the Communications Act, but Congress could reaffirm 
this by placing these rules under Title II and then removing the 
restrictions against other regulatory action in the draft bill.

    Question 2. Students, health care providers, and entrepreneurs have 
benefited greatly from innovative online platforms and the free flow of 
information. I fear that, without strong net neutrality rules, a 
``tiered Internet'' could emerge, creating barriers for innovators and 
small businesses.
    In the absence of strong anti-discrimination protections provided 
under Title II, and without Section 706 authority, what tools does the 
FCC have to prevent discriminatory practices and differential treatment 
we all agree should be prohibited?
    Answer. A tiered Internet is not just a real fear in a world 
without strong net neutrality rules, it is a likely outcome. Some 
Internet service providers have been clear that without net neutrality 
rules they would like to create business practices that would section 
off the internet, charging extra fees for the delivery of content and 
services.\1\ We have already seen some instances of discrimination by 
Internet service providers against potential competitive services. One 
example is the concern that Public Knowledge and others raised in 
connection to AT&T's treatment of Facetime in 2013.\2\ Fortunately, 
Public Knowledge was able to threaten a complaint under the FCC's 2010 
open Internet rules, which were still in effect at the time, and AT&T 
changed its practices.
---------------------------------------------------------------------------
    \1\ https://www.publicknowledge.org/news-blog/blogs/these-rules
    \2\ https://www.publicknowledge.org/news-blog/blogs/att-hangout
---------------------------------------------------------------------------
    In the absence of Title II and Section 706 authority the FCC does 
not have any tools to prevent discriminatory practices and would 
require Congress to act in order to restore its authority.

    Question 3. As currently drafted, what protections does the 
legislation provide that broadband reclassification would not?
    Answer. The draft bill, as currently drafted, does not provide any 
protections beyond what rules crafted under a reclassification to Title 
II would provide.

    Question 4. Do you believe, as the draft legislation suggests, the 
FCC should not be able to claim any authority under Section 706 of the 
Telecommunications Act of 1996?
    Answer. The FCC has used Section 706 for a number of rulemakings 
and reforms over the years including its ongoing reform of the 
Universal Service Program (USF). I would caution against removing the 
FCC's authority under 706 without addressing possible unintended 
consequences such as harming these reforms of USF.

    Question 5. Recent data shows 96 percent of the population has at 
most, two Internet Service Provider options. How do you respond to 
concerns that the current legislative proposal would hamstring the 
FCC's ability to promote competition in broadband?
    Answer. All stakeholders agree that deploying high-speed broadband 
services is a capital intensive undertaking. Combined with the 
increasing consumer expectations and FCC standards for what constitutes 
broadband \3\, many Americans would say that they do not have true 
competition for broadband services. The FCC has several tools to 
promote broadband deployment and competition in the marketplace. One is 
the Universal Service Program which subsidizes deployment in high cost 
areas, as well as to schools and libraries which anchor communities. 
The FCC is currently looking at another tool; if its authority under 
Section 706 of the Communications Act can allow it to promote broadband 
deployment and competition by overturning state prohibitions on 
community broadband deployment projects in Chattanooga, TN and Wilson, 
NC. The draft bill as currently constructed could eliminate the power 
of the FCC to act in these cases and extend the competition that the 
Chattanooga and Wilson projects are already successfully providing to 
surrounding communities. Given the enormous cost and risk involved in 
deploying high-speed broadband, we should not limit the ways in which 
communities can choose to ensure their residents are connected to the 
market. These projects are critical economic development opportunities 
for many communities when carefully planned and created with community 
support and input.
---------------------------------------------------------------------------
    \3\ http://www.fcc.gov/document/fcc-finds-us-broadband-deployment-
not-keeping-pace
---------------------------------------------------------------------------
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Tom Udall to 
                             Gene Kimmelman
    Question 1. Mr. Kimmelman, debate over the FCC's authority to issue 
net neutrality rules also raise the broader question of what the role 
of the FCC should be in the new broadband era. Last year, for example, 
the FCC adopted a set of governing principles for the phone-to-
broadband transition. Those core values include Public Safety, 
Universal Service, Competition, and Consumer Protection. Can you share 
your thoughts about how legislation limiting the FCC's authority over 
broadband matters could potentially undermine the agency's ability to 
ensure those core values for our communications systems in the future?
    Answer. The FCC is currently undergoing a process of managing the 
transition of the traditional phone networks to 21st Century, all 
Internet protocol networks through its open proceeding on the tech 
transition. This transition is happening right now in the market and is 
good for consumers, but the FCC's involvement is critical to make sure 
that vulnerable consumers are not left behind and these network changes 
are upgrades for everyone. We agree that the core ``network compact'' 
values you cited are an important check list of values that must be 
maintained in the Communications Act and at the FCC to protect the 
public interest. The draft bill, as written, would strip the ability 
for the FCC to manage the tech transition and continue to preserve 
these core values since many of them reside in Title II or have been 
justified using Section 706. Reclassification of broadband under Title 
II simplifies the FCC's work in managing the transition, but it has 
been able to do so under its current authority in Section 706 as well.

    Question 2. Mr. Kimmelman, I would like to ask you to respond to 
some of the issues raised around crafting rules that reflect the 
realities for a wireless company managing its network. Last year, FCC 
Chairman Tom Wheeler wrote to Verizon about his concerns that some 
features of wireless data plans seem to go beyond reasonable network 
management practices. Given the draft Thune bill's lack of FCC 
enforcement authority, does the legislation go far enough to protect 
Internet openness for wireless users?
    Answer. While the draft bill does include net neutrality rules that 
cover both wireline and wireless services, there are two weaknesses in 
the bill around wireless services. First, as we've mentioned before, 
the bill limits the FCC's rule making authority to the specific net 
neutrality rules prescribed in the bill. It would not allow the FCC to 
investigate harms from future business practices as new technology and 
business practices change. It freezes the abilities of the agency in 
time, while technology continues to develop. Second, the draft bill 
does not prohibit broader discrimination beyond throttling and paid 
prioritization. Nondiscrimination has always been a core value of 
network neutrality rules that both throttling and paid prioritization 
fall under. A broader nondiscrimination rule would allow the FCC to 
deal with harmful practices that we already concerned about but that 
don't fall into basic throttling or paid prioritization. These harmful 
practices include anticompetitive uses of data caps and exemption of a 
network providers services from such caps.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Joe Manchin to 
                             Gene Kimmelman
    Question 1. During the hearing, I received conflicting information 
about how the Chairman's proposed legislation would impact Universal 
Service Fund (USF) broadband programs like the Connect America Fund 
(CAF) that help private companies make investments and expand their 
network into rural, underserved areas. Due to the importance of these 
programs to my state and the communities I represent, I am requesting a 
written explanation of the anticipated impacts this bill would have on 
USF programs from each of the witnesses, specifically:

    Question 1a. What authority or authorities does the Federal 
Communications Commission currently rely on to operate and execute USF 
programs like the Connect America Fund?
    Answer. In order to include broadband in the services funded 
through the Universal Service Fund programs, the Commission relied upon 
Sections 254(e) and 706(b) as independent sources of authority to 
require carriers to offer broadband in addition to telephony service as 
a condition for receiving USF support. Support for broadband is 
currently implemented as a condition on carriers that are also offering 
Title II telephony service. The Commission's reasoning was upheld by 
the 10th Circuit but U.S. Cellular has asked the Supreme Court to 
reverse that holding.

    Question 1b. Without either Section 706 of the Telecommunications 
Act of 1996 authority or Title II of the Communications Act of 1934 
authority, as proposed in the draft legislation, under what authority, 
if any, could the FCC incentivize broadband deployment?
    Answer. Without Section 706, the Commission would be stripped of 
one of the sources of authority it used to support broadband deployment 
through the USF. The Commission may still be able to appeal to its 
Section 254(e) authority to specify what USF recipients may or may not 
do with USF funds, but that question is still not settled in the 
courts. Lacking both Title II authority for broadband and Section 706 
authority would create serious questions about how the Commission can 
move forward in administering USF programs. Moreover, if the Commission 
lacks both Section 706 and Title II authority for broadband, any 
conversations about adjusting the fund to better support broadband 
deployment would be stopped in their tracks, and the Commission would 
lose the ability to be more forward-thinking as a steward of the USF.

    Question 1c. What would happen to the Connect America Fund and 
similar programs should this legislation pass in its current form?
    Answer. The draft bill in its current form would create uncertainty 
for the Commission's ability to continue administering and improving 
the ways in which Universal Service programs fund broadband. The draft 
would strip the FCC of its Section 706 authority, which was an 
independent source of authority upheld by the 10th Circuit for the 
Commission's decision to require recipients to deploy broadband. 
Moreover, if the Commission lost its Section 706 authority and could 
not classify broadband Internet access services as telecommunications 
services, it is not clear how the Commission could at some point 
reshape USF programs to fund broadband services independently. Losing 
that option as a legal matter stops the policy conversation about the 
future of universal broadband service in its tracks.

    Question 2. One of the primary concerns I have about the proposal 
we are discussing today is the removal of all rulemaking authority. 
Businesses need certainty, and rulemaking allows businesses to 
understand how the general goals and standards Congress establishes in 
law--such as affordable and accessible Internet--will be specifically 
applied before they make investment decisions. The proposed bill 
removes all the transparency requirements included in rulemaking and 
replaces them with a new, retroactive, case-by-case rulemaking process 
that could be very difficult for small start-up businesses to 
understand. Without rulemaking, how would entrepreneurs understand how 
the FCC would apply the mandates of this bill to particular 
circumstances?
    Answer. A rulemaking would absolutely provide more certainty than a 
case-by-case review process. Rulemakings by design provide an agency 
the flexibility to adapt policy and law to changing circumstances much 
more quickly and agilely than Congress can. An agency only requires 3 
votes to alter a rule that may no longer be working. It is also unclear 
how an individual case would apply to subsequent cases brought--whether 
it would have binding precedent, and to what extent.

    Question 2a. What opportunities would businesses and consumer 
groups have to weigh-in on the FCC's application of these rules going 
forward?
    Answer. There are number of problems with relying on a complaint 
process alone. First, it is not preventive--you have to wait for the 
harm to happen--and the party filing the complaint naturally has to be 
aware that the harm is happening. This is not always clear to consumers 
who are often poorly positioned to recognize potential violations. It 
is also not always clear who has standing to bring a complaint. 
Finally, even when standing is clear, bringing a complaint is time-
consuming and expensive, which most disadvantages the consumers or 
small businesses the process ostensibly exists to protect most.

    Question 2b. How could any changes, however small, even be made to 
reflect the specific concerns of entrepreneurs or small businesses with 
the explicit prohibition on expanding Internet openness obligations 
included in Subsection (b) the draft bill?
    Answer. There is no simple fix--the legislation is fundamentally 
problematic because it would eliminate the Commission's rulemaking 
authority. The complaint process is a valuable one but to be effective 
it really must be connected to an actual rulemaking, not supplant 
rulemaking. It is also counterproductive to foreclose the expert agency 
from applying policies to new technologies as the Internet access 
environment continues to evolve.

    Question 3. Do wireless network providers have different network 
management demands than wireline networks? Please explain.
    Answer. All communications technologies have unique technical 
qualities that would require unique network management considerations--
DSL has network management demands distinct from cable, which is also 
distinct from satellite, which is distinct from wireless, and so forth. 
But each of these provides the same fundamental on-ramp to the 
Internet, and so any public policy considerations on openness and 
reliable access applies equally to any connectivity technology.
    This means that a reasonable network management standard must serve 
the same underlying policy equally. The best approach for a universal 
``reasonable network management'' practice considers the technical 
qualities of types of access as well as the fundamental principles it 
exists to preserve. A clear rule based on fundamental principles can be 
applied flexibly to any particular access technology. This best 
addresses reasonable network management for existing technologies as 
well as any yet unimagined future technologies.

    Question 3a. If so, how would wireless service providers be 
impacted by a universal ``reasonable network management'' practice that 
treats all providers the same?
    Answer. All communications technologies have technical qualities 
that will make them inherently different from any others and that will 
therefore require their own unique network management considerations--
DSL has network management demands distinct from cable, which is also 
distinct from satellite, which is distinct from wireless, and so forth. 
But each of these provides the same fundamental on-ramp to the 
Internet, and so any public policy considerations on openness and 
reliable access applies equally to any connectivity technology.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Marco Rubio to 
                        Hon. Robert M. McDowell
    Question 1. What would provide greater certainty for the 
marketplace--the FCC's adoption of rules that reclassify broadband 
services as telecommunications services subject to Title II, or 
enactment of legislation by Congress?
    Answer. Thank you, Senator, for the opportunity to comment on this 
issue. Enactment of legislation by Congress would provide far more 
certainty to the Internet marketplace than FCC regulation of last-mile 
broadband networks and the entire Internet backbone under Title II.\1\ 
In fact, an FCC decision to impose Title II on broadband providers will 
increase uncertainty for many businesses, with harmful implications for 
continued investment and innovation in the Internet economy.
---------------------------------------------------------------------------
    \1\ Steve Lohr, In Net Neutrality Push, F.C.C. Is Expected to 
Propose Regulating Internet Service as a Utility, N.Y. Times, Feb. 2, 
2015, available at http://nyti.ms/1wXgOoe (noting that Chairman Wheeler 
may suggest imposing regulations on ``companies that manage the 
backbone of the Internet'').
---------------------------------------------------------------------------
    For instance, American technology companies that derive a 
competitive advantage from our country's historic commitment to 
innovation without permission and the ability adjust rapidly to changes 
in consumer demand may soon find themselves waiting for Washington's 
approval as their global competitors take advantage of our newly-
regulated, and therefore slower, ``mother-may-I-innovate'' regulatory 
regime. America's tech sector will not be immune from Title II common 
carrier regulation if the FCC attempts to regulate broadband Internet 
access services under Title II. Over my career as an FCC Commissioner 
and as an attorney, I have had extensive experience interpreting and 
enforcing Title II, and I can confidently say that ``tech'' companies 
are likely to be swept up into Title II's regulatory vortex along with 
the targeted network operators. As innovation and consumer demand 
continue to blur the lines between what used to be clearly delineated 
legal and regulatory silos between network operators (such as phone, 
cable and wireless companies) and ``tech'' companies that offer 
``information services''--such as computer processing and data storage 
processing, as well as content and application providers--it will 
become increasingly difficult for bureaucrats to parse with surgical 
precision the differences between transmission and information 
services.\2\
---------------------------------------------------------------------------
    \2\ See, e.g., Inquiry Concerning High-Speed Access to the Internet 
Over Cable and Other Facilities, Docket No. FCC-02-77, 17 FCC Rcd 4798, 
 40 (2002) (noting the increasing difficulty in distinguishing between 
``transmission'' and ``information'' services).
---------------------------------------------------------------------------
    As a group of entrepreneurs, including Mark Cuban, recently 
explained, Title II classification of the Internet will fundamentally 
blur the lines between regulated and unregulated networks and 
services--making it ``impossible for entrepreneurs to know whether 
their IP-based offering will be subject to Title II regulation. . 
.[thus] undermin[ing] the very innovation and investment that the 
Commission purportedly seeks to protect.'' \3\ Furthermore, ``[t]his 
concern is particularly acute in an era where all new consumer 
electronics and information technologies include a component the 
Commission could conceivably view as a `telecommunications service.' '' 
\4\
---------------------------------------------------------------------------
    \3\ VCXC Ex Parte, Protecting and Promoting the Open Internet, GN 
Docket No. 14-28 (Jan. 23, 2015), available at http://apps.fcc.gov/
ecfs/comment/view?id=60001010900.
    \4\ Id.
---------------------------------------------------------------------------
    One thing we know for sure is that, if the FCC proceeds down the 
Title II path, years of litigation--and resulting uncertainty--will 
result. When all is said and done, a court of appeals may strike down 
the FCC's decision to regulate broadband under Title II, as they have 
done twice before. Such an outcome would be a setback for those who 
seek enforceable net neutrality rules. Worse yet, the courts may uphold 
the FCC's decision to impose Title II on broadband providers but 
overturn its decision to forbear from the vast majority of Title II's 
requirements. Such a determination could have devastating consequences 
as the full brunt of Title II is thrust upon the entire Internet 
marketplace.
    On the other hand, Congressional action--such as the proposed 
legislation--has the ability to provide the protections net neutrality 
proponents ostensibly seek, while shielding the Internet from harmful 
regulatory overreach. The proposed legislation would provide far more 
certainty for businesses and consumers because it would allow the 
Internet to flourish without the risk of being overturned in court.

    Question 2. Chairman Wheeler has suggested that he is planning to 
go forward with an open Internet rule in February even knowing that 
members of Congress are working to try to provide the agency with the 
appropriate tools to prevent blocking, throttling, and paid 
prioritization.
    Can you tell me why you think the Chairman plans to move forward? 
And if there is such urgency, wouldn't legislative action not only 
provide the Commission with better tools but also a foundation that 
wouldn't require the exhaustive process of forbearance?
    Answer. I cannot speak to Chairman Wheeler's state of mind. I am 
taking the liberty of including a link to a recent Washington Post 
article which sheds some light on this question.\5\
---------------------------------------------------------------------------
    \5\ Brian Fung, FCC Chairman Warns: The GOP's Net Neutrality Bill 
Could Jeopardize Broadband's Vast Future, Wash. Post, Jan. 29, 2015, 
available at http://www.washing
tonpost.com/blogs/the-switch/wp/2015/01/29/fcc-chairman-warns-that-
republican-bill-could-je
opardize-broadbands-vast-future/.

    Question 3. In in 2012, I led an effort to pass S. Con. Res. 50., a 
quote, ``Sense of Congress that the Secretary of State in consultation 
with the Secretary of Commerce, should continue to implement the 
position of the United States on Internet governance that clearly 
articulates the consistent and unequivocal policy of the United States 
to promote a global Internet free from government control and preserve 
and advance the successful multi-stakeholder model that governs the 
Internet today.'' I realize there are distinctions to be made between 
this bill and the efforts being pursued at the FCC but S. Con. Res. 50 
passed unanimously by Congress and sent a strong message to 
international stakeholders of the Internet.
    With your efforts being involved in Internet governance issues, can 
you give us a sense of how an FCC ruling on Net Neutrality would be 
perceived by our international allies who look to the United States for 
leadership on these issues? Should the tech community and consumers 
here in the U.S. be concerned about what it means for them around the 
world, as less democratic regimes take notice of the FCC's heavy-handed 
rules?
    Answer. Having been part of official U.S. diplomatic delegations to 
negotiate treaties in the communications space, as well as recently 
being a member of a blue ribbon panel on Internet governance,\6\ I can 
personally attest to the influence of the American net neutrality 
debate on international efforts to regulate all corners of the 
Internet. Vladimir Putin has stated plainly his goal to have 
``international control of the Internet'' through the International 
Telecommunication Union.\7\ In light of Russia's recent expansion into 
the Crimea and Ukraine, not to mention crackdowns on Internet freedoms, 
it is now obvious that Putin's threats should be taken seriously. And 
so should the explicit proposed treaty language of China, Saudi Arabia, 
Iran and their client states, some of which call for massive 
multilateral regulation of the Internet including networks, content and 
applications.\8\
---------------------------------------------------------------------------
    \6\ See Panel On Global Internet Cooperation and Governance 
Mechanisms, available at www.internetgovernancepanel.org.
    \7\ Vladimir Putin, Prime Minister of the Russian Federation, 
Working Day, Prime Minister Vladimir Putin Meets with Secretary General 
of the International Telecommunications Union Hamadoun Toure, Gov't Of 
The Russian Fed'n (June 15, 2011), http://premier.gov.ru/eng/events/
news/15601/.
    \8\ See, e.g., Proposals for the Work of the Conference, Algeria, 
Saudi Arabia, Bahrain, China, United Arab Emirates, Russian Federation, 
Iraq, Sudan, Contribution 47, at Art. 2 (Dec. 11, 2012), http://
www.itu.int/md/S12-WCIT12-C-0047/en (advocating changes to basic 
definitions contained in treaty text so the ITU would have unrestricted 
jurisdiction over the Internet); Contribution from Iran, The Islamic 
Republic of Iran, CWG-WCIT12 Contribution 48, Attachment 2 (2011), 
http://www.itu.int/md/T09-CWG.WCIT12-C-0048/en (arguing that the ITU's 
rules define ``telecommunications'' to include ``processing'' or 
computer functions).
---------------------------------------------------------------------------
    Furthermore, I have been told in official bilateral negotiations 
with foreign governments, as well as by global ministers of 
communications, regulators and international business executives in 
more informal settings, that the FCC's efforts to regulate Internet 
network management have generated thinking throughout the world that 
more regulation of the Internet ecosystem should be the norm. Recent 
initiatives in Europe underscore this point.\9\ Ironically, the 
Snowden/NSA matter has also fueled international efforts in this 
regard--as if the problem of government involvement in this area can be 
cured by even more government involvement.
---------------------------------------------------------------------------
    \9\ See, e.g., Case C-131/12, Google Inc. v. Agencia Espanola de 
Proteccion de Datos (E.C.R. 2014) (European High Court's ruling on the 
``right to be forgotten''); European Single Market for Electronic 
Communications, COM (2013) 0627--C7-0267/2013--2013/0309(COD) A7-0190/
2014 (European Union's Net Neutrality proposal).
---------------------------------------------------------------------------
    In short, the imposition of Title II regulation on broadband 
providers will provide cover to less freedom friendly international 
regimes that wish to subvert the private sector, non-profit and 
nongovernmental multi-stakeholder model of Internet governance. Regimes 
seeking to impose extensive economic and social regulations--from 
regulations on rates and payment flows, to restrictions on speech over 
the Internet--will find themselves more insulated than ever from 
criticism. The negative consequences of dramatically increased 
regulations on a global level would hit American tech companies, which 
operate in numerous countries around the world, particularly hard as 
the door opens to a new ``sending party pays'' construct where American 
content and application companies subsidize state-owned phone companies 
across the globe.\10\ Any decision to regulate broadband like 
traditional telephone services would, without question, damage the 
global Internet economy--to the detriment of consumers and American 
tech companies worldwide.
---------------------------------------------------------------------------
    \10\ See, e.g., Revisions of the International Telecommunications 
Regulations--Proposals for High Level Principles to be Introduced in 
the ITRs, ETNO, CWG-WCIT12 Contribution 109, at 2 (2012), http://
www.itu.int/md/T09-CWG.WCIT12-C-0109/en. (advocating application of a 
sending party pays principle).
---------------------------------------------------------------------------
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Deb Fischer to 
                        Hon. Robert M. McDowell
    Question 1. Mr. McDowell--Please explain how Title II regulations 
would inhibit American dominance and global competitiveness in 
``Internet of Things?''
    Answer. Thank you, Senator, for the opportunity to offer my views 
on this important topic. Over the past few years, the world has 
witnessed an explosion in the development of the ``Internet of 
Everything'' fueled by America's tech sector. From innovations with 
dramatic implications for the health and automotive sectors, to 
developments that improve the everyday lives of ordinary people, the 
Internet of Everything is transforming the global economy. In fact, 
Cisco estimates that, over the next decade, the Internet of Everything 
will result in more than $14 trillion in global economic growth as the 
number of Internet-connected devices rises to around 50 billion.\1\
---------------------------------------------------------------------------
    \1\ Joseph Bradley, et al., Embracing the Internet of Everything to 
Capture Your Share of $14.4 Trillion, Cisco Internet Bus. Solutions 
Grp. (2013), available at http://www.cisco.com/web/about/ac79/docs/
innov/IoE_Economy.pdf; see also Federal Trade Commission, Internet of 
Everything: Privacy and Security in a Connected World, at i (Jan. 
2015), available at http://www.ftc.gov/system/files/documents/reports/
federal-trade-commission-staff-report-november-2013-workshop-entitled-
internet-things-privacy/150127iotrpt.pdf (noting that ``[s]ix years 
ago, for the first time, the number of `things' connected to the 
Internet surpassed the number of people'').
---------------------------------------------------------------------------
    To ensure our tech sector remains the envy of the world, we must 
continue to follow the open and permission-less approaches to 
innovation that have worked so well thus far. For example, America is, 
and always has been, the global leader in wireless technology and 
services by avoiding burdensome regulations.\2\ In the absence of 
harmful Title II regulations, America's wireless broadband market has 
become fiercely competitive--driving massive investment and innovation 
that has contributed to, and will continue to contribute to, vital 
economic growth.\3\ In light of the unprecedented success we've seen as 
the Internet economy has continued to develop, it is difficult to 
imagine why some advocate turning away from tried-and-true policies in 
favor of a stifling regulatory regime designed for an era of vacuum 
tubes and rotary-dial telephones. Indeed, black rotary-dial telephones 
were ``state-of-the-art'' for 40 years, even though technology and 
innovation allowed better consumer experiences. Imposing this 
antiquated regime on the vibrant Internet economy will threaten 
American innovation and future economic growth.
---------------------------------------------------------------------------
    \2\ See Ovum's Informa Telecoms & Media World Cellular Information 
Service (WCIS+) (as of Sept. 2014) (noting that U.S. consumers, who 
make up less than 5 percent of the world's population, account for more 
than 37 percent of the world's LTE subscribers).
    \3\ See Alan Pearce, J. Richard Carlson & Michael Pagano, Wireless 
Broadband Infrastructure: A Catalyst for GDP and Job Growth 2013-2017 
(2013), available at http://www.pcia.com/images/
IAE_Infrastructure_and_Economy_Fall_2013.PDF (estimating that, from 
2013 to 2017, wireless investments will generate as much as $1.2 
trillion to the economy and add up to 1.2 million new jobs).
---------------------------------------------------------------------------
    The speed at which the Internet has been able to develop and 
flourish was a direct result of the Clinton Administration's policy of 
keeping the government's hands off of the Internet sector. As former 
FCC Chairman William Kennard stated, ``[i]t just doesn't make sense to 
apply hundred-year-old regulations meant for copper wires and giant 
switching stations to the IP networks of today.'' \4\ The Clinton-era 
view has enjoyed strong bipartisan support, until recently. While the 
proposed legislation honors this hands-off tradition, as Chairman 
Kennard warned, Title II classification of broadband would represent a 
dramatic departure from the policies that have allowed the Internet to 
become the fastest growing disruptive technology in human history.
---------------------------------------------------------------------------
    \4\ Remarks of the Hon. William E. Kennard, Chairman, FCC, Voice 
Over Net Conference: Internet Telephony: America Is Waiting (Sept. 12, 
2000) (``We know that decisions once made by governments can be made 
better and faster by consumers, and we know that markets can move 
faster than laws.'').
---------------------------------------------------------------------------
    America's tech sector will not be immune from Title II common 
carrier regulation if the FCC attempts to regulate broadband Internet 
access services under Title II. Over my career as an FCC Commissioner 
and as an attorney, I have had extensive experience interpreting and 
enforcing Title II, and I can confidently say that ``tech'' companies 
are likely to be swept up into Title II's regulatory vortex along with 
the targeted network operators. As innovation and consumer demand 
continue to blur the lines between what used to be clearly delineated 
legal and regulatory silos between network operators (such as phone, 
cable and wireless companies) and ``tech'' companies that offer 
``information services''--such as computer processing and data storage 
processing, as well as content and application providers--it will 
become increasingly difficult for bureaucrats to parse with surgical 
precision the differences between transmission and information 
services.\5\
---------------------------------------------------------------------------
    \5\ See, e.g., Inquiry Concerning High-Speed Access to the Internet 
Over Cable and Other Facilities, Docket No. FCC-02-77, 17 FCC Rcd 4798, 
 40 (2002) (noting the increasing difficulty in distinguishing between 
``transmission'' and ``information'' services).
---------------------------------------------------------------------------
    For example, many application and content providers, content 
delivery networks, and providers of services offered through connected 
devices provide transmission services as a component of their 
information services, such as the CDNs that give us Netflix movies or 
YouTube videos. The same is true for search engines that connect an 
advertising network to a search request and for e-mail providers and 
social networks that enable chat or messaging sessions. Some tech 
companies sell other services, such as e-reader services, but buy 
wireless access on a wholesale basis to deliver their content. Such 
synergistic deals would be complicated--at best--under Title II because 
the e-reader service provider would be considered a reseller of 
telecommunications services under Commission precedent. In a Title II 
world, tech companies offering these and similar services will be 
forced to make vital decisions on long-term investments and business 
strategies affecting the Internet of Everything, while facing the 
prospect that they may one day be subjected to increasingly costly and 
stifling regulations.
    As a group of entrepreneurs, including Mark Cuban, recently 
explained, Title II classification of the Internet will fundamentally 
blur the lines between regulated and unregulated networks and 
services--making it ``impossible for entrepreneurs to know whether 
their IP-based offering will be subject to Title II regulation . . . 
[thus] undermin[ing] the very innovation and investment that the 
Commission purportedly seeks to protect.'' \6\ Furthermore, ``[t]his 
concern is particularly acute in an era where all new consumer 
electronics and information technologies include a component the 
Commission could conceivably view as a `telecommunications service.' '' 
\7\
---------------------------------------------------------------------------
    \6\ VCXC Ex Parte, Protecting and Promoting the Open Internet, GN 
Docket No. 14-28 (Jan. 23, 2015), available at http://apps.fcc.gov/
ecfs/comment/view?id=60001010900.
    \7\ Id.
---------------------------------------------------------------------------
    As legal scholars have observed, regulation tends to grow.\8\ For 
example, recent actions by regulators and courts in Europe, which view 
``Internet companies'' as a single category, have led to regulations 
that grow heavier by the day. As a result, particularly in the wireless 
broadband sector, America has gained a substantial advantage over 
Europe in terms of investment, connection speeds, and innovation. 
European broadband providers have invested considerably less ($244 per 
household) in their networks than their American counterparts ($562 per 
household).\9\ Recent data show that 82 percent of all Americans have 
access to 25 Mbps speeds using wired broadband, while only 54 percent 
of Europeans have access to comparable broadband service.\10\ European 
regulators lament that broadband providers are ``reluctant to invest 
large sums in new high-speed networks'' in Europe, that ``Europe is 
losing the global race to build fast fixed broadband connections,'' and 
that ``frustrated consumers are stuck in the Internet slow lane.'' \11\
---------------------------------------------------------------------------
    \8\ Berin Szoka & Adam Thierer, Net Neutrality, Slippery Slopes & 
High-Tech Mutually Assured Destruction, Tech. Liberation Front (Oct. 
23, 2009), http://techliberation.com/2009/10/23/netneutrality-slippery-
slopes-high-tech-mutually-assured-destruction/ (``The reality is that 
regulation always spreads. The march of regulation can sometimes be 
glacial, but it is, sadly, almost inevitable: Regulatory regimes grow 
but almost never contract.'').
    \9\ Christopher S. Yoo, U.S. vs. European Broadband Deployment: 
What Do the Data Say?, at i (June 2014), available at https://
www.law.upenn.edu/live/files/3352-us-vs-europeanbroad
band-deployment; see also Erik Bohlin, Kevin W. Caves, and Jeffrey A. 
Eisenach, ``Mobile Wireless Performance in the EU & the US'' (May 
2013), available at http://www.gsmamobile
wirelessperformance.com/.
    \10\ Yoo Report, supra, at i.
    \11\ European Commission Memo 13/756, Regulatory mess hurting 
broadband investment: consumers and businesses stuck in slow lane (Aug. 
30, 2013), available at http://europa.eu/rapid/press-release_MEMO-13-
756_en.htm.
---------------------------------------------------------------------------
    Subjecting the flourishing Internet of Everything to the risk of 
Title II regulation will undoubtedly hamstring America in its ability 
to compete with the rest of the world. American technology companies 
that derive a competitive advantage from our country's historic 
commitment to innovation without permission and the ability to adjust 
rapidly to changes in consumer demand may soon find themselves 
sidelined, waiting for Washington's approval, as their competitors take 
advantage of waning American influence. Tech companies that assume they 
would be insulated from the burdens of Title II could turn out to be 
sorely mistaken.

    Question 2. Mr. Simmons and Mr. McDowell--can you please describe 
the impacts on a small cable operator in the state of Nebraska of 
having the FCC force heavy-handed Title II utility regulations. My 
understanding is the FCC currently has 1,000 active rules based on 
Title II, occupying nearly 700 pages in the Code of Federal Regulations 
and that the Progressive Policy Institute recently issued a report 
highlighting how Title II reclassification of the Internet would add 
about $15 billion in user fees to our economy, increasing annual levies 
on middle class families by $67 for wireline service and $72 for 
wireless broadband.
    Answer. You are correct, Senator, that the requirements of Title II 
are voluminous with extensive, complex, and burdensome provisions that 
will hit small cable operators and other small broadband providers 
particularly hard. Like all other broadband providers, small cable 
operators will likely face increased taxes, costs, restricted access to 
financing, and reduced opportunities to innovate.
    The regulatory burdens resulting from Title II classification are 
substantial and include, in part: the regulation of rates, terms, and 
conditions; non-discrimination requirements (which in fact allow 
reasonable pricing discrimination); entry and exit regulations; 
confidentiality requirements, audits, and privacy restrictions. 
Additionally, if the FCC follows through with classifying broadband as 
a telecommunications service under Title II, broadband providers will 
be required to contribute to Federal and state universal service funds. 
These taxes and fees will be passed on to consumers, and every 
broadband customer in America will see a jump in their Internet bills. 
While large providers will no doubt feel the effect of costs associated 
with Title II, small providers with fewer resources will be hit 
particularly hard.
    As I mentioned in my testimony before the Committee, there is one 
industry that stands to benefit greatly from Title II classification--
lawyers. Cable operators generally have not had experience complying 
with Title II. Without having navigated the morass of Title II's 
requirements, small cable operators in particular are likely to see 
their compliance costs surge. They will need to hire regulatory 
personnel and retain telecom attorneys to advise them on which forms to 
file and how they can offer their services to the public without 
running afoul of Title II requirements. That's great for Washington, 
D.C. lawyers, but a terrible thing for small businesses and American 
innovation.

    Question 3. To All Witnesses--While the FCC is in the process of 
ensuring net neutrality, some want the FCC to impose all of these 
obligations under the guise of ensuring consumer protection. Some argue 
that common carrier requirements on broadband providers should include 
almost most all of Title II, in addition to Sections 201, 202, and 208. 
Specifically, some activists have suggested the following parts of 
Title II must be applied to the broadband industry:

        UNIVERSAL SERVICE
        Sec. 214. [47 U.S.C. 214] Extension Of Lines
        Sec. 225. [47 U.S.C. 225] Telecommunications Services for 
        Hearing-Impaired and Speech-Impaired Individuals.
        Sec. 254. [47 U.S.C. 254] Universal Service.
        Sec. 255. [47 U.S.C. 255] Access by Persons With Disabilities.

        CONSUMER PROTECTION
        Sec. 217. [47 U.S.C. 217] Liability of Carrier for Acts and 
        Omissions of Agents.
        Sec. 222. [47 U.S.C. 222] Privacy Of Customer Information.
        Sec. 230. [47 U.S.C. 230] Protection for Private Blocking and 
        Screening of Offensive Material.
        Sec. 258. [47 U.S.C. 258] Illegal Changes in Subscriber Carrier 
        Selections.

        COMPETITION
        Sec. 224. [47 U.S.C. 224] Regulation of Pole Attachments.
        Sec. 253. [47 U.S.C. 253] Removal of Barriers to Entry.
        Sec. 251. [47 U.S.C. 251] Interconnection
        Sec. 256. [47 U.S.C. 256] Coordination for Interconnectivity.
        Sec. 257. [47 U.S.C. 257] Market Entry Barriers Proceeding.

    Do you agree or disagree that these sections of Title II common 
carrier regulation are needed? If you agree, please explain why.
    Answer. Senator, you raise a terrific point about the slippery 
slope of Title II, which has over 1,000 separate requirements. The FCC 
is essentially legislating as it decides which of those requirements 
should apply to last-mile broadband networks and the entire Internet 
backbone in order to benefit politically favored constituencies.\12\ 
Importantly, none of these Title II provisions are needed to protect 
consumers. Other laws are already in place to help consumers, and the 
Federal Trade Commission (FTC),\13\ state attorneys general, consumer 
advocates, and trial lawyers are poised to act if broadband service 
providers were to act in an anticompetitive manner.
---------------------------------------------------------------------------
    \12\ Steve Lohr, In Net Neutrality Push, F.C.C. is Expected to 
Propose Regulating Internet Service as a Utility, N.Y. Times, Feb. 2, 
2015, available at http://nyti.ms/1wXgOoe (noting that Chairman Wheeler 
may suggest imposing regulations on ``companies that manage the 
backbone of the Internet'').
    \13\ Importantly, Title II classification would effectively strip 
the FTC of its ability to protect Internet consumers under Section 5 of 
the Federal Trade Commission Act, because Section 5 includes a common 
carrier exemption. 15 U.S.C. Sec. 45(a)(2).
---------------------------------------------------------------------------
    In fact, the FCC sought comment on proposals to impose many of 
these Title II provisions on broadband providers ten years ago--
proposals that the FCC did not adopt.\14\ In the intervening decade, 
the Internet has flourished as an engine for innovation and economic 
growth under a light-touch regulatory approach--under both Republican 
and Democratic FCC Chairmen--without the need for any of these Title II 
provisions. As the influential thought-leader of the net neutrality 
movement, the man who coined the term ``net neutrality,'' Columbia law 
professor Timothy Wu, recently told Congress, ``[o]ne way or another, 
the light-handed protection of open Internet norms over the last twenty 
years has served to protect the Internet as an innovation platform.'' 
\15\
---------------------------------------------------------------------------
    \14\ Appropriate Framework for Broadband Access to the Internet 
Over Wireline Facilities, Report and Order and Notice of Proposed 
Rulemaking, 20 FCC Rcd 14853,  146-57 (2005).
    \15\ House Judiciary Subcommittee on Regulatory Reform, Commercial 
and Antitrust Law, Net Neutrality: Is Antitrust Law More Effective than 
Regulation in Protecting Consumers and Innovation?, 113th Congress, 2nd 
sess., 2014 (testimony of Timothy Wu), available at http://
judiciary.house.gov/_cache/files/bcecca84-4169-4a47-a202-5e90c83ae876/
wu-testimony.pdf.
---------------------------------------------------------------------------
    The sections of Title II that net neutrality proponents are 
advocating be thrust upon the Internet ecosphere would actually harm 
consumers by stifling innovation with ``mother-may-I'' mandates.\16\ 
The core provisions of Title II--Sections 201, 202, and 208--derive 
from the common carrier regime that Congress imposed on the railroads 
in the 1880s. These provisions allow the FCC to regulate nearly every 
aspect of a common carrier's business--including their prices and 
practices. If the FCC follows through with classifying broadband under 
Title II, the FCC will delegate to itself the power to impose pervasive 
rate regulation over the Internet economy.
---------------------------------------------------------------------------
    \16\ Comments of Public Knowledge et al., at 88-89, GN Docket No. 
14-28 (July 14, 2014) (arguing that ``the Commission should not simply 
forbear from . . . Commission authority over interconnection and shut 
down of service (Sections 251(a), 256, and portions of 214(c)), 
discretionary authority to compel production of information (Sections 
211, 213, 215, and 218-20), provisions which provide explicit power for 
the Commission to hold parties accountable and prescribe adequate 
remedies (Sections 205-07, 209, 212, and 216), provisions designed to 
protect consumers (Sections 203 and 222), or provisions designed to 
ensure affordable deployment and the benefits of broadband access to 
all Americans (Sections 214(e), 225, 254, 255, and 257). These statutes 
are in addition to the bare minimum recognized in Section 332(c) as the 
minimum needed to protect consumers--Sections 201, 202, and 208.''); 
see also Senate Committee on Commerce, Science, and Transportation, 
Protecting the Internet and Consumers Through Congressional Action, 
114th Congress, 1st sess., 2015 (testimony of Gene Kimmelman).
---------------------------------------------------------------------------
    Moreover, if the FCC were to impose Section 214 on Internet access 
services, broadband providers could not build new broadband lines or 
extend existing lines without first obtaining permission from the FCC. 
Broadband providers, even those operating in communities that enjoy 
multiple providers, would also be prohibited from discontinuing service 
to a community or part of a community without first obtaining 
permission from the FCC. Title II's requirement that providers obtain 
regulatory permission before introducing or discontinuing services 
stands in stark contrast to the ``permission-less'' innovation that has 
been the hallmark of the Internet. Yet fast-paced innovation has been 
essential to market success in the Internet ecosystem. If a provider 
develops a better way to serve its customers, it races to roll out new 
features or updates quickly in order to stay ahead of the competition. 
Similarly, if a new service fails to attract customers, a provider must 
be able to quickly modify or even abandon the service and move on to 
the next idea. Imagine if something as innovative as the e-reader 
required FCC oversight at every stage of its development.
    Section 222 is the provision of Title II that requires common 
carriers to protect customer proprietary network information. While it 
is unclear how the requirements of Section 222 would even operate when 
applied to the Internet--given that the statute is designed to protect 
details about customers' telephone calls--some net neutrality advocates 
may attempt to use this ill-fitting set of FCC regulations to impose 
heightened privacy restrictions throughout the entire Internet 
ecosystem. Importantly, the FTC already has jurisdiction to protect 
consumer privacy on the Internet, but Title II classification would 
strip the FTC of its authority under Section 5's common carrier 
exemption.\17\ Moreover, the restrictions of Section 222 are largely 
inconsistent with the existing privacy policies of many Internet 
companies--from search engines and advertising networks, to social 
network and e-mail providers. Imposing these inconsistent requirements 
could discourage such companies from pursuing innovative new ways to 
provide broadband services.
---------------------------------------------------------------------------
    \17\ 15 U.S.C. Sec. 45(a)(2).
---------------------------------------------------------------------------
    Section 251 is the provision of Title II that requires 
interconnection and sharing of networks. If the FCC classifies 
broadband under Title II, interconnection between broadband providers 
would be subject to government regulation. At the same time, some 
parties would inevitably seek to use Section 251 to try to require 
broadband providers to share or ``unbundle'' their networks at 
government mandated prices, which would create strong disincentives to 
invest in new networks. Indeed, Tim Wu recently said that ``Title II 
actually could be used in very bold ways to try and increase 
competition should a future FCC want to. It creates the option, if the 
future FCC wanted to, of saying alright . . . we're glad you built that 
out now we're going to let competitors all use the underlying 
infrastructure and try and sell services separately.'' \18\ As both the 
D.C. Circuit and the Commission have explained, however, such 
``unbundling requirements tend to undermine the incentives . . . to 
invest in new facilities and deploy new technology.'' \19\
---------------------------------------------------------------------------
    \18\ C-SPAN, Communicators with Tim Wu, Title II & Local Loop 
Unbundling: Tim Wu discusses how Title II could be used to foster 
competition through local loop unbundling (Nov. 12, 2014), available at 
http://www.c-span.org/video/?c4520676/title-ii-local-loop-unbundling.
    \19\ Review of the Section 251 Unbundling Obligations of Incumbent 
Local Exchange Carriers, Report and Order and Order on Remand and 
Further Notice of Proposed Rulemaking, 18 FCC Rcd 16978,  3 (2003); 
United States Telecom Ass'n v. FCC, 359 F.3d 554, 584-85 (D.C. Cir. 
2004) (explaining that unbundling requirements are ``likely to delay 
infrastructure investment, with CLECs tempted to wait for ILECs to 
deploy [broadband-capable loops] and ILECs fearful that CLEC access 
would undermine the investments' potential return'').
---------------------------------------------------------------------------
    Section 254 is the provision of Title II that charges the FCC with 
ensuring all Americans have access to telecommunications and 
information services. The FCC does not need to regulate broadband under 
Title II to encourage broadband deployment because the FCC has already 
exercised--and the courts have upheld--the Commission's Section 254 
authority to use the Universal Service Fund (USF) to support broadband 
deployment. However, if the FCC follows through with classifying 
broadband as a telecommunications service under Title II, broadband 
providers will be required to contribute to Federal and state universal 
service funds. These taxes and fees--amounting to as much as $11 
billion by some estimates--will be passed on to consumers, and every 
broadband customer in America will see an increase in their bills.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Ron Johnson to 
                        Hon. Robert M. McDowell
    Question 1. What will be the tax implications of applying Title II 
to broadband providers? What new costs will consumers see on their 
monthly bills if the FCC moves forward with its proposed Title II 
approach?
    Answer. Thank you, Senator, for raising this important concern. 
Title II classification will undoubtedly result in increased costs for 
broadband providers and end-users and run the risk of increased taxes 
for other Internet service offerings as well. The regulatory burdens 
resulting from Title II classification are substantial and include, in 
part: the regulation of rates, terms, and conditions; non-
discrimination requirements (which, in fact allow reasonable pricing 
discrimination); entry and exit regulations; confidentiality 
requirements, audits, and privacy restrictions.
    As I noted in my testimony, the Progressive Policy Institute has 
estimated that Title II regulation of broadband could lead to 
substantial state and local regulations, taxes, and fees costing 
consumers $11 billion a year.\1\ These costs, of course, would come 
``on top of the adverse impact on consumers of less investment and 
slower innovation that would result'' from Title II.\2\
---------------------------------------------------------------------------
    \1\ Robert Litan and Hal Singer, Outdated Regulations Will Make 
Consumers Pay More for Broadband, Progressive Policy Institute, at 1 
(Dec. 1, 2014). Note that the Progressive Policy Institute issued a 
correction on its initial assessments--revising its estimate for costs 
and fees down from $15 billion to $11 billion. Hal Singer and Robert 
Litan, No Guarantees When it Comes to Telecom Fees, The Progressive 
Policy Institute (Dec. 16, 2014), available at http://
www.progressivepolicy.org/issues/economy/no-guarantees-when-it-comes-
to-telecom-fees/.
    \2\ Id.
---------------------------------------------------------------------------
    Additionally, if the FCC follows through with classifying broadband 
as a telecommunications service under Title II, broadband providers 
will be required to contribute to Federal and state universal service 
funds. These taxes and fees will be passed on to consumers, and every 
broadband customer in America will see an increase in their bills. 
While large providers will no doubt feel the impact of increased costs 
associated with Title II, small providers with fewer resources will be 
hit particularly hard. In short, Title II will result in an Internet 
``tax.''
    Resulting legal fees incurred to comply with and combat the new 
regime will also raise costs for providers--and thus consumers. As I 
mentioned in my testimony, the only group that stands to benefit from 
Title II classification are lawyers. Because Title II compliance is 
complicated, most broadband providers will need to hire experienced 
attorneys to help them navigate the Title II regulatory maze. That's 
great for Washington, D.C. lawyers, but a needless drag on American 
innovation.
    It would be naive to assume higher taxes, fees, and legal costs 
will not find their way to consumers' monthly bills. Thus, at the end 
of the day, it is the end-user consumer that will suffer due to the 
FCC's experiment with Title II.

    Question 2. For comparison, would the bill Senator Thune has 
circulated result in any new taxes on consumers?
    Answer. No.

    Question 3. How easy will it be for the FCC to forbear from onerous 
provisions of Title II? I have heard many say that the FCC could apply 
Title II but forbear from all of the outdated provisions. On the other 
hand, Consumer Watchdog recently told the FCC that Sections 214, 225, 
254, 255, 217, 222, 230, 258, 224, 253, 251, 256, and 257 should be 
applied to broadband providers to ``ensure vital consumer protections 
are in place as [the FCC] strive[s] to ensure `net neutrality' ''. It 
appears that there isn't a whole lot of agreement on what we should 
forbear from. Is there a concern that either the FCC will not 
adequately forbear or that any forbearance will be challenged in court 
(by groups like Consumer Watchdog)?
    Answer. Thank you for your question, Senator.
    It will not be easy, as many claim, for the FCC to forbear from the 
onerous provisions of Title II because the FCC has turned the Section 
10 forbearance process into a lengthy, burdensome, and data-intensive 
ordeal in recent years. Under Section 10 of the Communications Act, the 
FCC is required to forbear if: ``(1) enforcement of such regulation or 
provision is not necessary to ensure that the charges, practices, 
classifications, or regulations by, for, or in connection with that 
telecommunications carrier or telecommunications service are just and 
reasonable and are not unjustly or unreasonably discriminatory; (2) 
enforcement of such regulation or provision is not necessary for the 
protection of consumers; and (3) forbearance from applying such 
provision or regulation is consistent with the public interest.'' \3\ 
Historically, forbearance proceedings have involved narrow questions of 
law. They operate much like an adjudicatory proceeding and require 
large amounts of evidence for every regulation question. The FCC puts 
the ``burden'' of persuasion and production on the proponent of 
forbearance;\4\ if the proponent fails to carry one of its burdens, the 
FCC can simply deny forbearance. Any similar approach here would 
increase the risk of large parts of Title II potentially applying. 
Because of the fact-and data-intensive nature of the inquiry, 
forbearance proceedings often take 15 months, notwithstanding 
Congress's direction that the FCC act on forbearance petitions within 
12 months.\5\ Furthermore, recently the trend at the FCC is for even 
the most obvious of forbearance petitions to be denied.
---------------------------------------------------------------------------
    \3\ 47 U.S.C. 160(a).
    \4\ Petition to Establish Procedural Requirements to Govern 
Proceedings for Forbearance Under Section 10 of the Communications Act 
of 1934, as Amended, 24 FCC Rcd 9543,  21 (2009).
    \5\ 47 U.S.C. Sec. 160(c).
---------------------------------------------------------------------------
    For example, it took the FCC fifteen months to deny forbearance 
from antiquated accounting rules developed in the 1930s for monopoly-
era telephone companies--the Part 32 Uniform System of Accounts.\6\ 
Instead of demonstrating a continuing need for its Part 32 rules, the 
FCC denied forbearance because the petitioner had ``not demonstrated 
that Part 32 is not necessary to ensure that charges and practices are 
just and reasonable, that Part 32 is not necessary for the protection 
of consumers, and that forbearance from Part 32 would be consistent 
with the public interest.'' \7\ It took another 17 months of 
uncertainty to conclude the litigation over the FCC's denial of 
forbearance.
---------------------------------------------------------------------------
    \6\ Petition of USTelecom for Forbearance Under 47 U.S.C. 
Sec. 160(c) from Enforcement of Certain Legacy Telecommunications 
Regulations, Memorandum Opinion and Order and Report and Order and 
Further Notice of Proposed Rulemaking and Second Further Notice of 
Proposed Rulemaking, 28 FCC Rcd 7627,  56-77 (2013), aff'd, Verizon & 
AT&T v. FCC, 770 F.3d 961 (D.C. Cir. 2014).
    \7\ Id.  59.
---------------------------------------------------------------------------
    A more fundamental problem is that the logic of forbearance is 
incompatible with the FCC's desire to impose Title II on broadband 
providers to the extent it tries to ground such a decision on the 
purported market power they enjoy. By contrast, to justify forbearance 
under Section 10 of the Act, the Commission would have to find that 
enforcing certain provisions of Title II is not necessary to ensure 
just and reasonable rates or to protect consumers. There is obvious 
tension between finding (i) that broadband providers have market power 
to justify Title II regulation but (ii) that certain Title II 
requirements are unnecessary to constrain such market power. As I said 
in my testimony, trying to forbear from applying most of Title II's 
approximately 1,000 heavy-handed requirements while selecting only a 
few, as some have proposed, including Chairman Wheeler, involves 
picking and choosing between who gets regulated and who does not, which 
will look arbitrary and politically-driven to an appellate court.
    The assumption that forbearance can mitigate the draconian impact 
of Title II is also mistaken. As the Commission previously told 
Congress, classifying broadband under Title II ``would effectively 
impose a presumption in favor of Title II regulation of such providers. 
Such a presumption would be inconsistent with the deregulatory and 
procompetitive goals of the 1996 Act. In addition, uncertainty about 
whether the Commission would forbear from applying specific provisions 
could chill innovation.'' \8\
---------------------------------------------------------------------------
    \8\ Federal-State Joint Board on Universal Service, Report to 
Congress, 13 FCC Rcd 11830,  47 (1998).
---------------------------------------------------------------------------
    You are correct that there is not agreement--even among net 
neutrality proponents--on which Title II provisions should be subject 
to forbearance. Some of the most restrictive provisions of Title II are 
those embraced by the proponents of Title II classification as 
essential to their cause.\9\ FCC decisions granting forbearance are 
often challenged in court, and net neutrality proponents will 
inevitably sue to stop the FCC from forbearing from any provisions of 
Title II that they deem essential to maintaining an open Internet. For 
example, net neutrality proponents challenged the FCC's 2010 Open 
Internet Order because they believed the FCC did not go far enough in 
regulating wireless broadband.\10\ Any decision by the FCC to forbear 
from Title II will be challenged in court, and, as the Commission 
previously told the Supreme Court, ``[f]orbearance proceedings would be 
time-consuming and hotly contested and would assuredly lead to new 
rounds of litigation, and there is no way to predict in advance the 
ultimate outcome of such proceedings.'' \11\
---------------------------------------------------------------------------
    \9\ Comments of Public Knowledge et al., at 88-89, GN Docket No. 
14-28 (July 14, 2014) (arguing that ``the Commission should not simply 
forbear from . . . Commission authority over interconnection and shut 
down of service (Sections 251(a), 256, and portions of 214(c)), 
discretionary authority to compel production of information (Sections 
211, 213, 215, and 218-20), provisions which provide explicit power for 
the Commission to hold parties accountable and prescribe adequate 
remedies (Sections 205-07, 209, 212, and 216), provisions designed to 
protect consumers (Sections 203 and 222), or provisions designed to 
ensure affordable deployment and the benefits of broadband access to 
all Americans (Sections 214(e), 225, 254, 255, and 257). These statutes 
are in addition to the bare minimum recognized in Section 332(c) as the 
minimum needed to protect consumers--Sections 201, 202, and 208.'').
    \10\ See Free Press v. FCC, No. 11-1411 (D.C. Cir. filed Oct. 25, 
2011).
    \11\ Petition for Writ of Certiorari, U.S. Dept. of Justice and 
FCC, FCC v. Brand X Internet Servs., No. 04-277, at 25, 2004 WL 1943678 
(Aug. 27, 2004) (internal citations omitted).
---------------------------------------------------------------------------
                                 ______
                                 
    Response to Written Question Submitted by Hon. Brian Schatz to 
                        Hon. Robert M. McDowell
    Question. I believe that the FCC needs to have ongoing, flexible 
authority over broadband. I am concerned that the draft legislation 
does not preserve that type of authority. What changes can--or should--
be made to the draft that would address this concern?
    Answer. Thank you, Senator, for the opportunity to comment on this 
issue. The draft legislation, as written, provides the FCC with an 
appropriate level of flexibility to enforce prohibitions on blocking, 
throttling, and paid prioritization that net neutrality proponents have 
long sought. Unlike the Title II approach proposed by the FCC, the 
draft legislation will finally provide a level of certainty in the 
Internet ecosystem that will benefit consumers and businesses alike.
    While Congressional action would serve to provide a stable path 
forward, an FCC decision to impose Title II on not just last-mile 
broadband networks, but the entire Internet backbone as well, will 
create harmful uncertainty.\1\ Furthermore, America's tech sector will 
not be immune from Title II common carrier regulation if the FCC 
attempts to regulate broadband Internet access services under Title II, 
however, there is substantial uncertainty as to how exactly Title II 
will be imposed on tech companies. Over my career as an FCC 
Commissioner and as an attorney, I have had extensive experience 
interpreting and enforcing Title II, and I can confidently say that 
``tech'' companies are likely to be swept up into Title II's regulatory 
vortex along with the targeted network operators. As innovation and 
consumer demand continue to blur the lines between what used to be 
clearly delineated legal and regulatory silos between network operators 
(such as phone, cable and wireless companies) and ``tech'' companies 
that offer ``information services''--such as computer processing and 
data storage processing, as well as content and application providers--
it will become increasingly difficult for bureaucrats to parse with 
surgical precision the differences between transmission and information 
services.\2\ In this Title II world, tech companies will be forced to 
make vital decisions on long-term investments and business strategies, 
while facing the prospect that they may one day be subjected to 
increasingly costly and stifling regulations.
---------------------------------------------------------------------------
    \1\ Steve Lohr, In Net Neutrality Push, F.C.C. is Expected to 
Propose Regulating Internet Service as a Utility, N.Y. Times, Feb. 2, 
2015, available at http://nyti.ms/1wXgOoe (noting that Chairman Wheeler 
may suggest imposing regulations on ``companies that manage the 
backbone of the Internet'').
    \2\ See, e.g., Inquiry Concerning High-Speed Access to the Internet 
Over Cable and Other Facilities, Docket No. FCC-02-77, 17 FCC Rcd 4798, 
 40 (2002) (noting the increasing difficulty in distinguishing between 
``transmission'' and ``information'' services).
---------------------------------------------------------------------------
    As a group of entrepreneurs, including Mark Cuban, recently 
explained, Title II classification of the Internet will fundamentally 
blur the lines between regulated and unregulated networks and 
services--making it ``impossible for entrepreneurs to know whether 
their IP-based offering will be subject to Title II regulation . . . 
[thus] undermin[ing] the very innovation and investment that the 
Commission purportedly seeks to protect.'' \3\ Furthermore, ``[t]his 
concern is particularly acute in an era where all new consumer 
electronics and information technologies include a component the 
Commission could conceivably view as a `telecommunications service.' '' 
\4\
---------------------------------------------------------------------------
    \3\ VCXC Ex Parte, Protecting and Promoting the Open Internet, GN 
Docket No. 14-28 (Jan. 23, 2015), available at http://apps.fcc.gov/
ecfs/comment/view?id=60001010900.
    \4\ Id.
---------------------------------------------------------------------------
    One thing we know for sure is that, if the FCC proceeds down the 
Title II path, years of litigation--and resulting uncertainty--will 
result. When all is said and done, a court of appeals may strike down 
the FCC's decision to regulate broadband under Title II, as the courts 
did on two prior occasions in sustaining challenges to the FCC's net 
neutrality rules. Such an outcome would be a setback for those who seek 
enforceable net neutrality rules.
    On the other hand, Congressional action--such as the proposed 
legislation--has the ability to provide the protections net neutrality 
proponents want, while shielding the Internet from harmful regulatory 
overreach or prolonged regulatory uncertainty during the inevitable 
legal challenges. This approach would provide far more certainty for 
businesses and consumers because it would allow the Internet to 
flourish without the risk of being overturned in court.
    Finally, to the extent that concerns over the FCC's authority to 
regulate broadband stem from a desire to protect consumers--as net 
neutrality advocates claim--both the Department of Justice and the 
Federal Trade Commission are well equipped to cure any market ills that 
may negatively affect consumers.\5\ Many other complex sectors of the 
American economy operate under government supervision afforded by 
antitrust and consumer protection laws without new extra layers of 
untested regulations and bureaucracies. Additionally, there are the 
protections of state and Federal common law such as breach of contract, 
tortious interference with contract, deceptive trade practices, fraud 
and more. For instance, if ISPs were to breach their terms of service 
with their customers, the plaintiff's bar would have a field day 
launching an uncountable number of class action lawsuits.
---------------------------------------------------------------------------
    \5\ Section 2 of the Sherman Act, 15 U.S.C. Sec. 2, prohibits 
conduct that would lead to monopolization. In the event of abuse of 
market power, this is the main statute that enforcers would use. In the 
context of potential abuses by broadband Internet access service 
providers, this statute would forbid: (1) Exclusive dealing--for 
example, the only way a consumer could obtain streaming video is from a 
broadband provider's preferred partner site; (2) Refusals to deal (the 
other side of the exclusive dealing coin)--i.e., if a cable company 
were to assert that the only way a content delivery network could 
interconnect with it to stream unaffiliated video content to its 
customers would be to pay $1 million/port/month, such action could 
constitute a ``constructive'' refusal to deal if any other content 
delivery network could deliver any other traffic for a $1,000/port/
month price; and (3) Raising rivals' costs--achieving essentially the 
same results using different techniques.

    Section 5 of the Federal Trade Commission Act, 15 U.S.C. Sec. 45, 
essentially accomplishes the same curative result, only through the 
FTC. It generally forbids ``unfair competition.'' This is an effective 
statute to empower FTC enforcement as long as Internet access service 
is considered an ``information service.'' The FTC Act explicitly does 
not apply to ``common carriers.''
---------------------------------------------------------------------------
    The argument that antitrust or consumer protection actions take too 
long and would produce results only after it was ``too late'' is 
specious. Antitrust and consumer protection agencies, such as the 
Federal Trade Commission, can act at the same speed as, if not more 
quickly than, the Federal Communications Commission.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Cory Booker to 
                        Hon. Robert M. McDowell
    Question 1. One aspect largely absent from the debate on Chairman 
Thune's proposed neutrality legislation is the issue of 
interconnection. Interconnection is not covered under current 
legislation. Do you believe that interconnection points can be choke 
points to the Internet highway?
    Answer. Thank you, Senator, for the opportunity to respond to your 
questions. With respect to your first question, no, I do not believe 
that interconnection points can be choke points to the Internet. Since 
the inception of the commercial Internet, interconnection agreements--
i.e., peering arrangements and transit arrangements--have been 
privately negotiated without government oversight--an approach that, 
since the Clinton-Gore Administration, the Commission has found 
benefits consumers. The FCC has explained that ``interconnection 
between Internet backbone providers has never been subject to direct 
government regulation, and settlement-free peering and degradation-free 
transit arrangements have thrived.'' \6\ The FCC has also concluded 
that ``the Internet backbone market is sufficiently competitive and 
will remain so'' and that ``the prices and terms of interconnection in 
the market will also be competitive.'' \7\
---------------------------------------------------------------------------
    \6\ Verizon Communications Inc. and MCI, Inc. Applications for 
Approval of Transfer of Control, Memorandum Opinion and Order, 20 FCC 
Rcd 18433,  133 (2005).
    \7\ SBC Communications Inc. and AT&T Corp. Applications for 
Approval of Transfer of Control, Memorandum Opinion and Order, 20 FCC 
Rcd 18290,  132 (2005)
---------------------------------------------------------------------------
    In fact, the FCC agreed that Internet interconnection should not be 
regulated in the 2010 Open Internet Order \8\ and again as recently as 
the 2014 Open Internet Notice of Proposed Rulemaking.\9\ The 2010 net 
neutrality rules ``applied to a broadband provider's use of its own 
network but did not apply the no-blocking or unreasonable 
discrimination rules 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.'' \10\ The FCC proposed to ``maintain this approach'' 
in the 2014 Open Internet Notice of Proposed Rulemaking.\11\
---------------------------------------------------------------------------
    \8\ Preserving the Open Internet, Report and Order, 25 FCC Rcd 
17905,  67 n.209 (2010) (``Open Internet Order'').
    \9\ Protecting & Promoting the Open Internet, Notice of Proposed 
Rulemaking, 29 FCC Rcd 5561,  59 (2014) (``Open Internet Notice of 
Proposed Rulemaking'').
    \10\ Open Internet Notice of Proposed Rulemaking  59; see also 
Open Internet Order  67 n.209 (``Open Internet Order'') (explaining 
that rules did not ``affect existing arrangements for network 
interconnection, including existing paid peering arrangements''); see 
also id.  47 (``Nor does broadband Internet access service include 
virtual private network services, content delivery network services, 
multichannel video programming services, hosting or data storage 
services, or Internet backbone services (if those services are separate 
from broadband Internet access service). These services typically are 
not mass market services and/or do not provide the capability to 
transmit data to and receive data from all or substantially all 
Internet endpoints.'').
    \11\ Open Internet Notice of Proposed Rulemaking  59.
---------------------------------------------------------------------------
    Nothing has changed in the Internet's backbone that could possibly 
justify now regulating Internet interconnection under Title II. Even as 
the business models of some large content providers have consumed an 
increasingly large share of Internet traffic, the market has responded 
just as it always has--with individualized agreements that take into 
account the myriad of unique circumstances that exist between any two 
particular networks considering how to interconnect with each other. 
This approach has a proven track record of accommodating new business 
models such as content delivery networks (CDNs), encouraging more 
efficient interconnection arrangements, creating incentives for the 
deployment and upgrade of broadband networks, and ultimately enhancing 
and improving end users' experience.
    Interconnection points have never been viewed as ``choke points'' 
to the Internet because no current backbone provider has market power 
that would be required to prevent interconnection.\12\ Indeed, content 
providers have numerous choices for delivering their Internet traffic 
to consumers. In addition to relying on CDNs to aggregate and deliver 
traffic to ISPs, a content provider can choose from among numerous 
providers of ``transit'' services whose business models revolve around 
the delivery of traffic to ISPs, or can interconnect directly with the 
ISP itself. As proof of how competitive these markets are, transit 
rates have plummeted with year-over-year price reductions of 25 percent 
to 44 percent over the past 6 years, as transit prices fell from $9 per 
Mbps in 2009 to $0.94 per Mbps in 2014--and are expected to fall 
further, to $0.63 per Mbps in 2015.\13\ At the same time, however, the 
volume of Internet traffic flowing over peering and transit 
arrangements has been growing at a remarkable pace due, in part, to the 
increase of Internet traffic generated by the popularity of Netflix and 
YouTube.\14\ This combination of falling prices and increased output 
belies the suggestion that interconnection points are or could be used 
as choke points to the Internet.
---------------------------------------------------------------------------
    \12\ See AT&T Inc. & BellSouth Corp. Application for Transfer of 
Control, Memorandum Opinion and Order, 22 FCC Rcd 5662,  127, 143 
(2007) (finding that the ``Tier 1'' backbone market--which includes the 
largest backbone providers, as measured by their size, geographic 
scope, and interconnections--is ``both competitive and dynamic,'' and 
noting that providers ``compete vigorously'' with regard to price, 
quality, and geographic reach); see also Applications Filed by Global 
Crossing Ltd. & Level 3 Commc'ns, Inc. for Consent to Transfer Control, 
26 FCC Rcd 14056, 14069 (2011) (noting that the number of ``Tier I'' 
Internet backbone providers has increased, from eight providers in 
2005, to twelve in 2011).
    \13\ Dr. Peering, What are the Historical Transit Pricing Trends?, 
available at http://drpeering.net/FAQ/What-are-the-historical-transit-
pricing-trends.php.
    \14\ See, e.g., Cisco, Cisco Visual Networking Index: Forecast and 
Methodology, 2013-2018 at 1 (June 10, 2014); see also Global Internet 
Phenomena Report: 2H 2014, Sandvine (Nov. 11, 2014) (noting that 
Netflix accounts for 34.9 percent of all download traffic at peak 
times--with YouTube accounting for 14 percent).
---------------------------------------------------------------------------
    Question 1a. Under the proposed legislation, how would 
interconnection issues be addressed?
    Answer. As explained in my answer to Question 1a, interconnection 
would and should remain unregulated. Private companies would continue 
to negotiate interconnection arrangements without the need for 
government regulation as they have done successfully since the 
inception of the commercial Internet.

    Question 2. Students, health care providers, and entrepreneurs have 
benefited greatly from innovative online platforms and the free flow of 
information. I fear that, without strong net neutrality rules, a 
``tiered Internet'' could emerge, creating barriers for innovators and 
small businesses.
    In the absence of strong anti-discrimination protections provided 
under Title II, and without Section 706 authority, what tools does the 
FCC have to prevent discriminatory practices and differential treatment 
we all agree should be prohibited?
    Answer. A key fact that has been lost in this debate is that a 
``tiered Internet'' already exists--and always has--because many 
content and application providers have entered into peering 
arrangements with ISPs, which enable their content and data to be 
delivered directly to customers quickly and efficiently rather than 
relying upon multiple providers. Furthermore, companies like Netflix 
and Google have created content delivery networks by placing their own 
servers inside the networks of ISPs to provide faster delivery of their 
content. While these practices clearly create a ``tiered Internet,'' 
they are necessary when considering the sheer volume of data sent by 
content providers like Netflix and ultimately benefit consumers. 
Without reasonable differentiation, users simply would not be able to 
access the same quality of services they enjoy today.
    Also, while it may come as a surprise to some net neutrality 
proponents who have viewed Title II as the holy grail of Internet 
regulation, Title II does not prohibit all discrimination. What Title 
II prohibits is ``unjust or unreasonable discrimination,'' \15\ meaning 
that discrimination among content owners and users is not prohibited so 
long as similarly situated parties are treated the same. This means 
that paid prioritization, tiered pricing, sending party pays 
arrangements, and two-sided markets are all permissible under Title II. 
In fact, allowing these types of ``discriminatory'' business 
relationships lies at the heart of Title II.
---------------------------------------------------------------------------
    \15\ 47 U.S.C. Sec. 202(a).
---------------------------------------------------------------------------
    Furthermore, to the extent that concerns over the FCC's authority 
to regulate broadband stem from a desire to protect consumers--as net 
neutrality advocates claim--both the Department of Justice and the 
Federal Trade Commission are well equipped to cure any market ills that 
may negatively impact consumers.\16\ Other complex sectors of the 
American economy operate under government supervision through the rules 
afforded by antitrust and consumer protection laws without new extra 
layers of untested regulations and bureaucracies. Additionally, there 
are the protections of state and Federal common law such as breach of 
contract, tortious interference with contract, deceptive trade 
practices, fraud and more.
---------------------------------------------------------------------------
    \16\ Section 2 of the Sherman Act, 15 U.S.C. Sec. 2, prohibits 
conduct that would lead to monopolization. In the event of abuse of 
market power, this is the main statute that enforcers would use. In the 
context of potential abuses by broadband Internet access service 
providers, this statute would forbid: (1) Exclusive dealing--for 
example, the only way a consumer could obtain streaming video is from a 
broadband provider's preferred partner site; (2) Refusals to deal (the 
other side of the exclusive dealing coin)--i.e., if a cable company 
were to assert that the only way a content delivery network could 
interconnect with it to stream unaffiliated video content to its 
customers would be to pay $1 million/port/month, such action could 
constitute a ``constructive'' refusal to deal if any other content 
delivery network could deliver any other traffic for a $1,000/port/
month price; and (3) Raising rivals' costs--achieving essentially the 
same results using different techniques.
    Section 5 of the Federal Trade Commission Act, 15 U.S.C. Sec. 45, 
essentially accomplishes the same curative result, only through the 
FTC. It generally forbids ``unfair competition.'' This is an effective 
statute to empower FTC enforcement as long as Internet access service 
is considered an ``information service.'' The FTC Act explicitly does 
not apply to ``common carriers.''

    Question 3. As currently drafted, what protections does the 
legislation provide that broadband reclassification would not?
    Answer. The proposed legislation has a number of advantages over 
the FCC's proposal to regulate last-mile broadband networks and the 
entire Internet backbone under Title II.\17\ The legislation would 
provide certainty to businesses, thus promoting continued investment 
and innovation by companies throughout the entire Internet ecosystem. 
It would also prevent the inevitable litigation that will result if the 
FCC classifies broadband Internet access services under Title II.
---------------------------------------------------------------------------
    \17\ Steve Lohr, In Net Neutrality Push, F.C.C. Is Expected to 
Propose Regulating Internet Service as a Utility, N.Y. Times, Feb. 2, 
2015, available at http://nyti.ms/1wXgOoe (noting that Chairman Wheeler 
may suggest imposing regulations on ``companies that manage the 
backbone of the Internet'').
---------------------------------------------------------------------------
    Most importantly, the proposed legislation would protect businesses 
from the burdensome and harmful regulations of Title II. Title II 
classification will undoubtedly result in increased costs for broadband 
providers and end-users and run the risk of increased taxes for other 
Internet service offerings as well. The regulatory burdens resulting 
from Title II classification are substantial and include, in part: the 
regulation of rates, terms, and conditions; non-discrimination 
requirements (which, in fact allow reasonable pricing discrimination); 
entry and exit regulations; confidentiality requirements, audits, and 
privacy restrictions.
    As I noted in my testimony, the Progressive Policy Institute has 
estimated that Title II regulation of the Internet could lead to 
substantial state and local regulations, taxes, and fees costing 
consumers $11 billion a year.\18\ These costs, of course, would come 
``on top of the adverse impact on consumers of less investment and 
slower innovation that would result'' from Title II.\19\ Additionally, 
if the FCC follows through with classifying broadband as a 
telecommunications service under Title II, broadband providers will be 
required to contribute to Federal and state universal service funds.
---------------------------------------------------------------------------
    \18\ Robert Litan and Hal Singer, Outdated Regulations Will Make 
Consumers Pay More for Broadband, Progressive Policy Institute, at 1 
(Dec. 1, 2014). The Progressive Policy Institute issued a correction on 
its initial assessments--revising its estimate for costs and fees down 
from $15 billion to $11 billion. Hal Singer and Robert Litan, No 
Guarantees When it Comes to Telecom Fees, The Progressive Policy 
Institute (Dec. 16, 2014), available at http://
www.progressivepolicy.org/issues/economy/no-guarantees-when-it-comes-
to-telecom-fees/.
    \19\ Id.
---------------------------------------------------------------------------
    In addition to the regulatory burdens of Title II, imposing Title 
II on broadband Internet and backbone service providers will create 
harmful uncertainty. For instance, America's tech sector will not be 
immune from common carrier regulation if the FCC attempts to regulate 
broadband Internet access services under Title II, however, there is 
substantial uncertainty as to how exactly Title II will be imposed on 
tech companies. As innovation and consumer demand continue to blur the 
lines between what used to be clearly defined legal and regulatory 
silos between network operators (such as phone, cable and wireless 
companies) and ``tech'' companies that offer ``information services''--
such as computer processing and storage processing--it will become 
increasingly difficult for bureaucrats to parse with surgical precision 
the differences between transmission and information services.\20\ In 
this Title II world, tech companies will be forced to make vital 
decisions on long-term investments and business strategies, while 
facing the prospect that they may one day be subjected to increasingly 
costly and stifling regulations.
---------------------------------------------------------------------------
    \20\ See, e.g., Inquiry Concerning High-Speed Access to the 
Internet Over Cable and Other Facilities, Docket No. FCC-02-77, 17 FCC 
Rcd 4798,  40 (2002) (noting the increasing difficulty in 
distinguishing between ``transmission'' and ``information'' services).
---------------------------------------------------------------------------
    Many net neutrality supporters, emboldened by the prospect of Title 
II classification, have increasingly expressed an ultimate policy goal 
of comprehensive industrial policy for the entire Internet space. The 
influential thought leader who coined the term ``net neutrality,'' Tim 
Wu, has stated that state manipulation of the Internet could be used to 
shape ``not merely economic policy, not merely competition policy, but 
also media policy, social policy'' and ``oversight of the political 
process.'' \21\ Also, as the President and CEO of Public Knowledge, 
Gene Kimmelman, noted in his testimony, supporters of Title II 
classification seek expansive control over the Internet.\22\
---------------------------------------------------------------------------
    \21\ House Judiciary Subcommittee on Regulatory Reform, Commercial 
and Antitrust Law, Net Neutrality: Is Antitrust Law More Effective than 
Regulation in Protecting Consumers and Innovation?, 113th Congress, 2nd 
sess., 2014 (testimony of Timothy Wu), available at http://
judiciary.house.gov/_cache/files/bcecca84-4169-4a47-a202-5e90c83ae876/
wu-testimony.pdf.
    \22\ Senate Committee on Commerce, Science, and Transportation, 
Protecting the Internet and Consumers Through Congressional Action, 
114th Congress, 1st sess., 2015 (testimony of Gene Kimmelman), 
available at http://www.commerce.senate.gov/public/
index.cfm?p=Hearings&Con
tentRecord_id=7ba9cc4e-3cd8-44dd-bb84-
fed5f6309ab2&ContentType_id=14f995b9-dfa5-407a-9
d35-56cc7152a7ed&Group_id=b06c39af-e033-4cba-9221-
de668ca1978a&MonthDisplay=1&Year
Display=2015.

    Question 4. Do you believe, as the draft legislation suggests, the 
FCC should not be able to claim any authority under Section 706 of the 
Telecommunications Act of 1996?
    Answer. Yes, I do. As I wrote in my dissent to the FCC's 2010 Open 
Internet Order, Congress never designed Section 706 to contain an 
affirmative grant of authority.\23\ Indeed, the FCC historically had 
not viewed Section 706 as a source of regulatory authority. The FCC's 
decision in 2010 to abandon its own precedent and find direct authority 
to regulate the Internet in Section 706, a clearly de-regulatory 
provision, was improper. The proposed legislation would restore what I 
believe to be to the original Congressional intent of Section 706 and 
overturn the D.C. Circuit's contrary determination.\24\ The remarkable 
development of the Internet occurred without the need for the FCC to 
take any regulatory action grounded solely in Section 706, and there is 
no reason to believe the Internet will not continue to flourish under 
the proposed legislation.
---------------------------------------------------------------------------
    \23\ Dissenting Statement of Commissioner Robert M. McDowell, 
Preserving the Open Internet, Report and Order, 25 FCC Rcd 17905, 18049 
(2010) (``Open Internet Order'').
    \24\ Verizon v. FCC, 740 F.3d 623, 630 (D.C. Cir. 2014).
---------------------------------------------------------------------------
    At the same time, the FCC would claim new authority from Congress 
under the proposed legislation that would provide clarity, appellate 
certainty and protections for consumers and entrepreneurs.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Joe Manchin to 
                        Hon. Robert M. McDowell
    Question 1. During the hearing, I received conflicting information 
about how the Chairman's proposed legislation would impact Universal 
Service Fund (USF) broadband programs like the Connect America Fund 
(CAF) that help private companies make investments and expand their 
network into rural, underserved areas. Due to the importance of these 
programs to my state and the communities I represent, I am requesting a 
written explanation of the anticipated impacts this bill would have on 
USF programs from each of the witnesses, specifically:

    Question 1a. What authority or authorities does the Federal 
Communications Commission currently rely on to operate and execute USF 
programs like the Connect America Fund?
    Answer. The FCC relied upon Section 254 and Section 706 in creating 
the Connect America Fund. Section 254 provides authority for the 
Commission to ensure consumers have ``[a]ccess to advanced 
telecommunications and information services . . . in all regions of the 
Nation.'' \25\ Section 706 directs the Commission to encourage 
broadband deployment to all Americans.\26\ In 2011, the Commission 
concluded that both of these provisions independently authorize the 
Commission to provide support for broadband networks.\27\ The U.S. 
Court of Appeals for the Tenth Circuit upheld the Commission's 
authority under Sections 254 and 706 to use the USF to support the 
deployment of broadband networks.\28\
---------------------------------------------------------------------------
    \25\ 47 U.S.C. Sec. 254(b)(2).
    \26\ 47 U.S.C. Sec. 1302(a).
    \27\ Connect America Fund, Report and Order and Further Notice of 
Proposed Rulemaking, 26 FCC Rcd 17663,  60[-730 (2011) (``Section 254 
grants the Commission clear authority to support telecommunications 
services and to condition the receipt of universal service support on 
the deployment of broadband networks, both fixed and mobile, to 
consumers. Section 706 provides the Commission with independent 
authority to support broadband networks in order to `accelerate the 
deployment of broadband capabilities' to all Americans.'').
    \28\ In re FCC 11-161, 753 F.3d 1015, 1054 (10th Cir. 2014).

    Question 1b. Without either Section 706 of the Telecommunications 
Act of 1996 authority or Title II of the Communications Act of 1934 
authority, as proposed in the draft legislation, under what authority, 
if any, could the FCC incentivize broadband deployment?
    Answer. Even without Section 706, the FCC could still rely upon its 
authority under Section 254 to incentivize broadband deployment. As the 
FCC has explained, ``Section 254 grants the Commission clear authority 
to support telecommunications services and to condition the receipt of 
universal service support on the deployment of broadband networks, both 
fixed and mobile, to consumers.'' \29\ The Tenth Circuit upheld the 
FCC's authority under Section 254 to condition ``USF funding on 
recipients' agreement to provide broadband Internet access services.'' 
\30\
---------------------------------------------------------------------------
    \29\ Connect America Fund  60.
    \30\ In re FCC 11-161, 753 F.3d at 1047-48.

    Question 1c. What would happen to the Connect America Fund and 
similar programs should this legislation pass in its current form?
    Answer. Nothing would happen to the Connect America Fund or similar 
USF programs because the FCC would retain its existing authority under 
Section 254.

    Question 2. One of the primary concerns I have about the proposal 
we are discussing today is the removal of all rulemaking authority. 
Businesses need certainty, and rulemaking allows businesses to 
understand how the general goals and standards Congress establishes in 
law--such as affordable and accessible Internet--will be specifically 
applied before they make investment decisions. The proposed bill 
removes all the transparency requirements included in rulemaking and 
replaces them with a new, retroactive, case-by-case rulemaking process 
that could be very difficult for small start-up businesses to 
understand. Without rulemaking, how would entrepreneurs understand how 
the FCC would apply the mandates of this bill to particular 
circumstances?
    Answer. Thank you for your question, Senator. As a threshold 
matter, it is important to note that the remarkable development of the 
Internet occurred in the absence of FCC rulemaking authority in this 
area. Prior to the Commission's 2010 Open Internet Order, the FCC 
adhered to long-standing precedent that it did not have regulatory 
authority over the Internet, particularly when Congress concluded it 
was the policy of the United States ``to preserve the vibrant and 
competitive free market that presently exists for the Internet and 
other interactive computer services, unfettered by Federal or state 
regulation.'' \31\ Congress wrote those words at the same time it wrote 
Section 706. There is no reason to believe the Internet will not 
continue to flourish under the proposed legislation.
---------------------------------------------------------------------------
    \31\ 47 U.S.C. Sec. 230(b)(2).
---------------------------------------------------------------------------
    The draft legislation provides the FCC with an appropriate level of 
flexibility to enforce prohibitions on blocking, discrimination, and 
paid prioritization that net neutrality proponents have long sought. 
Unlike the Title II approach proposed by the FCC, the draft legislation 
will finally provide a level of certainty in the Internet marketplace 
that will benefit consumers and businesses alike.
    While Congressional action would serve to provide a stable path 
forward, an FCC decision to regulate last-mile broadband networks and 
the entire Internet backbone under Title II will create harmful 
uncertainty.\32\ For instance, America's tech sector will not be immune 
from Title II common carrier regulation if the FCC attempts to regulate 
broadband Internet access services under Title II, however, there is 
substantial uncertainty as to how exactly Title II will be imposed on 
tech companies. Over my career as an FCC Commissioner and a private 
practitioner, I've had ample experience interpreting and enforcing 
Title II, and I can confidently say that we are unlikely to see the 
type of precise application of Title II needed to protect tech 
companies from being swept up with network operators. As innovation and 
consumer demand continue to blur the lines between what used to be 
clearly defined legal and regulatory silos between network operators 
(such as phone, cable and wireless companies) and ``tech'' companies 
that offer ``information services''--such as computer processing and 
storage processing--it will become increasingly difficult for 
bureaucrats to parse with surgical precision the differences between 
transmission and information services.\33\ In this Title II world, tech 
companies will be forced to make vital decisions on long-term 
investments and business strategies, while facing the prospect that 
they may one day be subjected to increasingly costly and stifling 
regulations.
---------------------------------------------------------------------------
    \32\ Steve Lohr, In Net Neutrality Push, F.C.C. Is Expected to 
Propose Regulating Internet Service as a Utility, N.Y. Times, Feb. 2, 
2015, available at http://nyti.ms/1wXgOoe (noting that Chairman Wheeler 
may suggest imposing regulations on ``companies that manage the 
backbone of the Internet'').
    \33\ See, e.g., Inquiry Concerning High-Speed Access to the 
Internet Over Cable and Other Facilities, Docket No. FCC-02-77, 17 FCC 
Rcd 4798,  40 (2002) (noting the increasing difficulty in 
distinguishing between ``transmission'' and ``information'' services).
---------------------------------------------------------------------------
    As a group of entrepreneurs, including Mark Cuban, recently 
explained, Title II classification of the Internet will fundamentally 
blur the lines between regulated and unregulated networks and 
services--making it ``impossible for entrepreneurs to know whether 
their IP-based offering will be subject to Title II regulation. . 
.[thus] undermin[ing] the very innovation and investment that the 
Commission purportedly seeks to protect.'' \34\ Furthermore, ``[t]his 
concern is particularly acute in an era where all new consumer 
electronics and information technologies include a component the 
Commission could conceivably view as a `telecommunications service.' '' 
\35\
---------------------------------------------------------------------------
    \34\ VCXC Ex Parte, Protecting and Promoting the Open Internet, GN 
Docket No. 14-28 (Jan. 23, 2015), available at http://apps.fcc.gov/
ecfs/comment/view?id=60001010900.
    \35\ Id.
---------------------------------------------------------------------------
    It will be very difficult for the tech community to understand how 
to comply with Title II. The regulatory burdens resulting from Title II 
classification are substantial and include, in part: the regulation of 
rates, terms, and conditions; non-discrimination requirements (which, 
in fact allow reasonable pricing discrimination); entry and exit 
regulations; confidentiality requirements, audits, and privacy 
restrictions. Complicating matters further, if the FCC follows through 
with classifying broadband as a telecommunications service under Title 
II, broadband providers will be required to contribute to Federal and 
state universal service funds. Understanding and complying with this 
onslaught of new regulations will require expensive legal advice, which 
is why Title II classification will be great for Washington, D.C. 
lawyers, but a terrible thing for businesses and American innovation.
    One thing we know for sure is that, if the FCC proceeds down the 
Title II path, years of litigation--and resulting uncertainty--will 
result. When all is said and done, a court of appeals may strike down 
the FCC's decision to regulate broadband under Title II, as the courts 
did on two prior occasions in sustaining challenges to the FCC's net 
neutrality rules. Such an outcome would be a setback for those who seek 
enforceable net neutrality rules.
    Worse yet, the courts may uphold the FCC's decision to impose Title 
II on broadband providers but overturn its decision to forbear from the 
vast majority of Title II's requirements. Such a determination could 
have devastating consequences as the full brunt of Title II is thrust 
upon the Internet marketplace.
    On the other hand, Congressional action--such as the proposed 
legislation--has the ability to provide the protections net neutrality 
proponents want, while shielding the Internet from harmful regulatory 
overreach or prolonged regulatory uncertainty during the inevitable 
legal challenges. This approach would provide far more certainty for 
businesses and consumers because it would allow the Internet to 
flourish without the risk of being overturned in court.
    Finally, the proposed legislation would not eliminate the FCC's 
ability to interpret and enforce the law in adjudications involving 
particular circumstances. Courts have upheld the FCC's ability to adopt 
new interpretations in adjudicatory proceedings,\36\ and the FCC 
presumably could similarly enforce the proposed legislation through 
adjudication if necessary.
---------------------------------------------------------------------------
    \36\ Cassell v. FCC, 154 F.3d 478, 486 (D.C. Cir. 1998) (``It is 
well settled that an agency `is not precluded from announcing new 
principles in an adjudicative proceeding.'' (quotation omitted)).

    Question 2a. What opportunities would businesses and consumer 
groups have to weigh-in on the FCC's application of these rules going 
forward?
    Answer. Because the legislation allows for complaints to be filed 
with the FCC, any enforcement or adjudicatory proceedings at the 
Commission would provide an opportunity for public input on how to 
interpret and apply the rules going forward.

    Question 2b. How could any changes, however small, even be made to 
reflect the specific concerns of entrepreneurs or small businesses with 
the explicit prohibition on expanding Internet openness obligations 
included in Subsection (b) the draft bill?
    Answer. No changes are necessary because the draft legislation will 
provide businesses and entrepreneurs the certainty they need to 
innovate and invest.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Deb Fischer to 
                              Paul Misener
    Question 1. Mr. Misener--Would the FCC or FTC be a more appropriate 
regulator of Amazon's privacy, data security, and data breach 
notification practices?
    Answer. Amazon's guiding concern in navigating privacy issues is 
customer trust. We use our customer data to innovate and improve the 
customer experience. We strive to focus on privacy throughout our 
business, and uphold our promise to our customers through our publicly 
available Privacy Policy. The FTC already has enforcement authority 
over that promise to our customers through Section 5 of the Federal 
Trade Commission Act.

    Question 2. To All Witnesses--While the FCC is in the process of 
ensuring net neutrality, some want the FCC to impose all of these 
obligations under the guise of ensuring consumer protection. Some argue 
that common carrier requirements on broadband providers should include 
almost most all of Title II, in addition to Sections 201, 202, and 208. 
Specifically, some activists have suggested the following parts of 
Title II must be applied to the broadband industry:

        UNIVERSAL SERVICE
        Sec. 214. [47 U.S.C. 214] Extension Of Lines
        Sec. 225. [47 U.S.C. 225] Telecommunications Services for 
        Hearing-Impaired and Speech-Impaired Individuals.
        Sec. 254. [47 U.S.C. 254] Universal Service.
        Sec. 255. [47 U.S.C. 255] Access by Persons With Disabilities.

        CONSUMER PROTECTION
        Sec. 217. [47 U.S.C. 217] Liability of Carrier for Acts and 
        Omissions of Agents.
        Sec. 222. [47 U.S.C. 222] Privacy Of Customer Information.
        Sec. 230. [47 U.S.C. 230] Protection for Private Blocking and 
        Screening of Offensive Material.
        Sec. 258. [47 U.S.C. 258] Illegal Changes in Subscriber Carrier 
        Selections.

        COMPETITION
        Sec. 224. [47 U.S.C. 224] Regulation of Pole Attachments.
        Sec. 253. [47 U.S.C. 253] Removal of Barriers to Entry.
        Sec. 251. [47 U.S.C. 251] Interconnection
        Sec. 256. [47 U.S.C. 256] Coordination for Interconnectivity.
        Sec. 257. [47 U.S.C. 257] Market Entry Barriers Proceeding.

    Do you agree or disagree that these sections of Title II common 
carrier regulation are needed? If you agree, please explain why.
    Answer. At Amazon, we are focused on ensuring implementation of 
strong net neutrality rules for our customers. If full net neutrality 
protections--including a ban on paid prioritization, discrimination, 
and throttling, applied to fixed and wireless broadband, and at every 
point in the network--are pursued under Title II, only Sections 201, 
202, and 208 are necessary. Congress may of course, create a new 
statute, or update existing statute to achieve these full net 
neutrality protections, as well.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Brian Schatz to 
                              Paul Misener
    Question. I believe that the FCC needs to have ongoing, flexible 
authority over broadband. I am concerned that the draft legislation 
does not preserve that type of authority. What changes can--or should--
be made to the draft that would address this concern?
    Answer. Amazon believes the FCC should be empowered to create 
adequate legal certainty and detail through effective enforcement tools 
and notice and comment rulemaking. As I outline in my testimony, 
statutes are necessarily less detailed than agency-written rules. Such 
details--including the factors that would be considered during formal 
complaint procedures--are essential for businesses and consumers to 
have the confidence to make informed choices about investments and 
purchases, and the FCC's ability to define these details should be 
preserved.
    If the intent of the draft legislation is to create a statutory 
ceiling for obligations on Broadband Internet Service providers (BIAS), 
this can be accomplished without rescinding the FCC's authority to 
regulate below the ceiling. We believe that the FCC's Title II 
authority should be maintained to ensure the effectiveness of Internet 
openness, subject to any reasonable substantive ceiling on Internet 
openness obligations.
    The draft legislation, at a minimum, should be amended (Subsection 
e) to ensure that the FCC retains its Title II tools, subject to a 
substantive ceiling on Internet openness obligations, such as included 
in Subsection (b)(1), which itself should be clarified to allow the FCC 
to provide, through notice and comment rulemaking, adequate legal 
detail and certainty to consumers and businesses.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Cory Booker to 
                              Paul Misener
    Question 1. One aspect largely absent from the debate on Chairman 
Thune's proposed neutrality legislation is the issue of 
interconnection. Interconnection is not covered under current 
legislation. Do you believe that interconnection points can be choke 
points to the Internet highway?
    Answer. A consumer will not care where in her service provider's 
network any interference with net neutrality occurs, only whether it 
occurs. Providers should not be allowed to accomplish blocking, 
throttling, or paid prioritization further upstream in the network 
either, as the Discussion Draft bill appears to address only the 
network facilities closer to consumers, such as the ``last mile.''

    Question 1a. Under the proposed legislation, how would 
interconnection issues be addressed?
    Answer. The Discussion Draft bill is lacks any clarity on 
interconnection. The proposed legislation should be modified to ensure 
that the Internet openness of net neutrality is maintained and 
effective at every point in the network.

    Question 2. Students, health care providers, and entrepreneurs have 
benefited greatly from innovative online platforms and the free flow of 
information. I fear that, without strong net neutrality rules, a 
``tiered Internet'' could emerge, creating barriers for innovators and 
small businesses.
    In the absence of strong anti-discrimination protections provided 
under Title II, and without Section 706 authority, what tools does the 
FCC have to prevent discriminatory practices and differential treatment 
we all agree should be prohibited?
    Answer. If the FCC's authority under Title II and Section 706 to 
prevent discriminatory practices and differential treatment by 
Broadband Internet Access Service Providers (BIASP) is eliminated, new 
statutory obligations will have to be codified that ensure strong 
protections against paid prioritization, discrimination, and 
differential treatment by BIASP.

    Question 3. As currently drafted, what protections does the 
legislation provide that broadband reclassification would not?
    Answer. As currently drafted, the proposed legislation embodies 
several of the same principles that would be enforced through broadband 
reclassification; however, some of the exemptions included in the 
Discussion Draft could undermine the effectiveness of those principles. 
For example, the ``specialized services'' exemption could create a 
loophole that would allow the prioritization of content and services 
from a BIASP's affiliate.

    Question 4. Do you believe, as the draft legislation suggests, the 
FCC should not be able to claim any authority under Section 706 of the 
Telecommunications Act of 1996?
    Answer. Amazon is focused on strong, enforceable net neutrality 
protections, and we have concluded that reinstating three provisions of 
Title II -all or parts of Sections 201, 202, and 208--plus relying on 
other existing statute, including Section 706, would be adequate to 
maintain net neutrality without creating unintended consequences.
    The draft legislation creates a statutory ceiling on BIAS 
obligations, and it is not necessary to rescind the FCC's authority 
under Title II of the Communications Act, as in Subsection (e). 
Summarily blocking the FCC's use of existing statutory enforcement 
authority could leave the agency helpless to address improper behaviors 
well within its authority under the ceiling created in Subsection (b), 
and would leave consumers and businesses in the Internet ecosystem 
without adequate certainty about the FCC's enforcement powers. With so 
much at stake for consumers and businesses, this very real possibility 
should not be left to chance.

    Question 5. I am proud to have a leading company like Amazon 
provide more than 3,000 jobs in my home state. Indeed, Internet 
companies like Amazon that benefit from a free and open Internet drive 
innovation and strengthen local economies in states across the country. 
Can you describe how net neutrality has allowed your business to thrive 
and what that means for growth and future employment?
    Answer. At Amazon, our consistent business practice is to start 
with customers and work backwards. That is, we begin projects by 
determining what customers want and how we can innovate for them. Here, 
in the context of net neutrality public policy, we have done the same: 
we take our position from our customers'--consumers'--point of view.
    Net neutrality is core to the customer's experience, and the 
customer will know if their net neutrality has been taken from them. 
The customer experience drives what we call at Amazon the ``Flywheel''. 
By creating a great customer experience, we drive more traffic to our 
properties. This allows us to increase the number of sellers and 
selection while bringing down prices, which creates a better customer 
experience, and enables the Flywheel to expand. It is a virtuous cycle 
that enables Amazon to invest in great products and services for our 
customers in businesses that we have such as Audible.

    Question 6. Amazon has a long-standing history in support of net 
neutrality principles. Can you describe what principles your company 
believes need to be in place to achieve true net neutrality?
    Answer. At Amazon, we are customer obsessed, and focused on results 
that will preserve the customer experience. We have long supported 
strong, enforceable rules to protect an open Internet; and, would like 
to see a path forward that achieves this. True net neutrality includes 
a ban on paid prioritization, blocking, and discrimination, applied to 
both mobile and fixed broadband, and to every point in the network, 
including at interconnection.

    Question 6a. Does the Chairman's draft legislation cover those 
principles?
    Answer. The Chairman's draft covers the principles of a ban on paid 
prioritization, blocking, and discrimination, and applies to both fixed 
and wireless broadband. The draft lacks clarity on the application of 
the principles to interconnection, and contains exemptions that may 
undermine the strength of these principles.

    Question 6b. What changes would you recommend to the draft 
legislation?
    Answer. First, in Subsection (d), while requiring ``Consumer 
Choice,'' the bill would explicitly exempt ``specialized services'' 
from that requirement. This could create a huge loophole if, for 
example, specialized services involved the prioritization of some 
content and services, just like proscribed ``paid prioritization,'' the 
only difference being that the content or service prioritized came from 
the broadband Internet access service provider itself, instead of a 
third party.
    Furthermore, if the purpose of Subsection (d) is to ensure that 
consumers are allowed to choose among various, non-discriminatory plans 
based on bit rates or monthly data volumes, then there are ways to say 
that more clearly: Something along the lines of, ``Nothing in this 
section should be construed to limit the ability of consumers to choose 
to pay for higher or lower data rates or volumes of broadband Internet 
access service based on their individual needs.'' We agree that it 
makes no sense to require an infrequent e-mail user to pay the same for 
Internet access as a 24/7 gamer and, if such a clarification is needed, 
we would support it. But the current language of Subsection (d) does 
not accomplish this goal and introduces the other shortcomings that we 
have noted.
    Second, in Subsection (f), the Discussion Draft bill would permit 
broadband Internet access providers to engage in ``reasonable network 
management.'' This is a standard caveat to net neutrality, and we 
support it, at least in theory. But particularly with the inclusion of 
wireless broadband in the ambit of net neutrality protections, any 
claim of reasonable network management should be viewed very 
suspiciously if, in practice, it undermines prohibitions of blocking, 
throttling, paid prioritization, etc., or if it tends to favor content 
or services offered by the broadband provider itself.
    Third, the Discussion Draft bill is unclear or silent on an 
important point of clarification: Which parts of a broadband Internet 
access service provider's network are covered by the net neutrality 
protections? Providers should not be allowed to accomplish blocking, 
throttling, paid prioritization, etc., further upstream in the network, 
just because the bill could be construed to address only the network 
facilities closer to consumers, such as the ``last mile.'' If, by this 
possible omission and limitation of FCC powers, net neutrality were 
made ineffective by allowing the otherwise prohibited behaviors to 
occur further upstream, consumers would rightly judge their net 
neutrality to have been taken away.
    In addition, the Discussion Draft should be modified to provide 
adequate legal detail and certainty to consumers and businesses in the 
Internet ecosystem. Although the Discussion Draft would require, in 
Subsection (a)(5), broadband Internet providers to disclose their 
practices, these disclosures would merely reflect what providers 
currently are doing, not what they would be legally permitted to do.
    We believe that the FCC should be empowered to create adequate 
legal certainty and detail through effective enforcement tools and 
notice and comment rulemaking. But the Discussion Draft bill would 
limit the FCC in several ways. Subsection (b) says that the FCC ``may 
not expand . . . Internet openness obligations . . . beyond the 
obligations established'' in the bill ``whether by rulemaking or 
otherwise.'' The word ``expand'' is vague, but if the intention here is 
to establish a ceiling for these obligations, i.e., a cap on the FCC's 
authority respecting the substantive provisions of the bill, this is 
Congress's prerogative and reasonable expectation. However, with such a 
ceiling in place, it is not necessary to rescind the FCC's authority 
under Title II of the Communications Act, as in Subsection (e). 
Summarily blocking the FCC's use of existing statutory enforcement 
authority could leave the agency helpless to address improper behaviors 
well within its authority under the ceiling created in Subsection (b), 
and would leave consumers and businesses in the Internet ecosystem 
without adequate certainty about the FCC's enforcement powers. We 
believe that the FCC's Title II authority should be maintained to 
ensure the effectiveness of Internet openness, subject to any 
reasonable substantive ceiling on Internet openness obligations.
    Also, in part because Subsection (b) directs the FCC to establish 
``formal complaint procedures'' and ``enforce the obligations [of the 
bill] though adjudication of complaints,'' this provision could be 
interpreted to bar the FCC from notice and comment rulemaking in this 
area. We believe it would be a mistake to prohibit the Commission from 
providing, through notice and comment rulemaking, adequate legal detail 
and certainty to consumers and businesses. Outlining the parameters 
around permissible forms of ``reasonable network management'' is but 
one example of where the FCC could provide important detail to 
consumers and businesses through notice and comment rulemaking.
    Thus, at a minimum, Subsection (e) should be amended to ensure that 
the FCC retains its Title II tools, subject to a substantive ceiling on 
Internet openness obligations, such as included in Subsection (b)(1), 
which itself should be clarified to allow the FCC to provide, through 
notice and comment rulemaking, adequate legal detail and certainty to 
consumers and businesses.

    Question 7. Amazon has proven to be a successful and innovative 
company. It has most recently found great success in providing over-
the-top online video service. As consumers increase their use of online 
video, do you agree that the interconnection point is a choke point 
between an ISP and a consumer?
    Answer. Without strong enforceable rules, interconnection can 
certainly become a choke point, regardless of what traffic is being 
routed through the network. A bit is a bit, and consumers should not 
have their net neutrality thwarted at any point in the network whether 
they are streaming video or browsing a retail site.

    Question 7a. Does it concern you that the proposed legislation 
would not provide Amazon or others with interconnection protections, 
and could prevent the FCC from regulating in those areas?
    Answer. Without strong enforceable rules that apply to every point 
in the network, true net neutrality cannot be achieved. The draft 
legislation should be modified to clarify this point.
                                 ______
                                 
      Response to Written Question Submitted by Hon. Tom Udall to 
                              Paul Misener
    Question. Mr. Misener, I think everyone agrees that any potential 
regulation touching the Internet should use a light approach. What then 
do you see as the best way for Congress to help ensure that there is 
meaningful competition, continued investment, and consumer choice 
across the Internet ecosystem?
    Answer. Consumers certainly will be results-oriented in their 
assessment of what particular legal authority the United States 
Government uses to ensure that net neutrality is maintained: The 
authority will either work, or it won't. We believe that the FCC has 
ample existing statutory authority to maintain net neutrality, and we 
welcome Chairman Wheeler's attention to this issue and his efforts to 
use his statutorily-granted authority in a measured, focused way. We 
would not want discussions of new statutory authority to derail or 
delay Chairman Wheeler's work, but just as Mr. Wheeler recently noted 
that he would welcome additional statutory direction from Congress, we 
are also open to such legislation.
    We have concluded that reinstating only a few provisions of Title 
II--particularly all or parts of Sections 201, 202, and 208--plus 
relying on other existing statute, including Section 706, would be 
adequate to maintain net neutrality without creating unintended 
consequences. But, of course, these approaches are within the confines 
of existing statutory authority. Congress has the power to set new 
policies for net neutrality, either entirely through a new statute, or 
through a mix of new and existing statutory authority.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Joe Manchin to 
                              Paul Misener
    Question 1. During the hearing, I received conflicting information 
about how the Chairman's proposed legislation would impact Universal 
Service Fund (USF) broadband programs like the Connect America Fund 
(CAF) that help private companies make investments and expand their 
network into rural, underserved areas. Due to the importance of these 
programs to my state and the communities I represent, I am requesting a 
written explanation of the anticipated impacts this bill would have on 
USF programs from each of the witnesses, specifically:

    Question 1a. What authority or authorities does the Federal 
Communications Commission currently rely on to operate and execute USF 
programs like the Connect America Fund?

    Question 1b. Without either Section 706 of the Telecommunications 
Act of 1996 authority or Title II of the Communications Act of 1934 
authority, as proposed in the draft legislation, under what authority, 
if any, could the FCC incentivize broadband deployment?

    Question 1c. What would happen to the Connect America Fund and 
similar programs should this legislation pass in its current form?
    Answer. Amazon does not have any expertise with the operation or 
execution of USF programs.

    Question 2. One of the primary concerns I have about the proposal 
we are discussing today is the removal of all rulemaking authority. 
Businesses need certainty, and rulemaking allows businesses to 
understand how the general goals and standards Congress establishes in 
law--such as affordable and accessible Internet--will be specifically 
applied before they make investment decisions. The proposed bill 
removes all the transparency requirements included in rulemaking and 
replaces them with a new, retroactive, case-by-case rulemaking process 
that could be very difficult for small start-up businesses to 
understand. Without rulemaking, how would entrepreneurs understand how 
the FCC would apply the mandates of this bill to particular 
circumstances?
    Answer. The Discussion Draft should be modified to provide adequate 
legal detail and certainty to consumers and businesses in the Internet 
ecosystem. Although the Discussion Draft would require, in Subsection 
(a)(5), broadband Internet providers to disclose their practices, these 
disclosures would merely reflect what providers currently are doing, 
not what they would be legally permitted to do.
    Like all businesses, Internet companies need confidence in the 
state of law and regulation in order to innovate and invest in products 
and services on behalf of their customers. They need to know, with a 
reasonable degree of certainty, whether a new product or service could 
be deployed without interference by broadband Internet access service 
providers. Certainty does not require legal certitude, but it does 
require confidence-inspiring transparency, predictability, stability, 
and fairness. Yet statutes are necessarily less detailed than agency-
written rules. And such details--including the factors that would be 
considered during formal complaint procedures--are essential for 
businesses and consumers to have the confidence to make informed 
choices about investments and purchases.
    We believe that the FCC should be empowered to create adequate 
legal certainty and detail through effective enforcement tools and 
notice and comment rulemaking.

    Question 2a. What opportunities would businesses and consumer 
groups have to weigh-in on the FCC's application of these rules going 
forward?
    Answer. As currently drafted, the Discussion Draft does not provide 
for notice and comment rulemaking or public comment. Businesses and 
consumer groups would have to rely on a case-by-case basis complaint 
system.

    Question 2b. How could any changes, however small, even be made to 
reflect the specific concerns of entrepreneurs or small businesses with 
the explicit prohibition on expanding Internet openness obligations 
included in Subsection (b) the draft bill?
    Answer. Subsection (b) says that the FCC ``may not expand . . . 
Internet openness obligations . . . beyond the obligations 
established'' in the bill ``whether by rulemaking or otherwise.'' The 
word ``expand'' is vague, but if the intention here is to establish a 
ceiling for these obligations, i.e., a cap on the FCC's authority 
respecting the substantive provisions of the bill, this is Congress's 
prerogative and reasonable expectation; we certainly don't support 
allowing an agency to act beyond its statutory authority, and would 
support a provision like this, if the bill went only so far.
    However, with such a ceiling in place, it is not necessary to 
rescind the FCC's authority under Title II of the Communications Act, 
as in Subsection (e). Summarily blocking the FCC's use of existing 
statutory enforcement authority could leave the agency helpless to 
address improper behaviors well within its authority under the ceiling 
created in Subsection (b), and would leave consumers and businesses in 
the Internet ecosystem without adequate certainty about the FCC's 
enforcement powers. With so much at stake for consumers and businesses, 
this very real possibility should not be left to chance. We believe 
that the FCC's Title II authority should be maintained to ensure the 
effectiveness of Internet openness, subject to any reasonable 
substantive ceiling on Internet openness obligations.
    At a minimum, Subsection (e) should be amended to ensure that the 
FCC retains its Title II tools, subject to a substantive ceiling on 
Internet openness obligations, such as included in Subsection (b)(1), 
which itself should be clarified to allow the FCC to provide, through 
notice and comment rulemaking, adequate legal detail and certainty to 
consumers and businesses.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Deb Fischer to 
                             W. Tom Simmons
    Question 1. Mr. Simmons and Mr. McDowell--can you please describe 
the impacts on a small cable operator in the state of Nebraska of 
having the FCC force heavy-handed Title II utility regulations. My 
understanding is the FCC currently has 1,000 active rules based on 
Title II, occupying nearly 700 pages in the Code of Federal Regulations 
and that the Progressive Policy Institute recently issued a report 
highlighting how Title II reclassification of the Internet would add 
about $15 billion in user fees to our economy, increasing annual levies 
on middle class families by $67 for wireline service and $72 for 
wireless broadband.
    Answer. The regulatory burdens and costs associated with a Title II 
approach would have a significant and disproportionate impact on small-
and medium-sized providers' ability to invest further in our broadband 
networks. The Federal Communications Commission's decision a decade ago 
to lightly regulate Internet service encouraged Midcontinent and other 
small providers to invest hundreds of millions of dollars in our 
networks to make those networks increasingly faster and more robust. In 
rural areas, those investments were risky, but we made them driven by 
the knowledge that we would not be limited in our ability to use that 
investment to create and develop the most compelling broadband service 
offerings possible, the type of service we believe all our customers 
deserve. Title II reclassification would harm providers' ability to 
obtain the capital needed to invest and make obtaining that capital 
significantly more expensive. It could also open broadband service up 
to a number of Federal and state fees applied to telecommunications 
services, driving up the cost of broadband and making it more difficult 
for our subscribers to afford.

    Question 2. To All Witnesses--While the FCC is in the process of 
ensuring net neutrality, some want the FCC to impose all of these 
obligations under the guise of ensuring consumer protection. Some argue 
that common carrier requirements on broadband providers should include 
almost most all of Title II, in addition to Sections 201, 202, and 208. 
Specifically, some activists have suggested the following parts of 
Title II must be applied to the broadband industry:

        UNIVERSAL SERVICE
        Sec. 214. [47 U.S.C. 214] Extension Of Lines
        Sec. 225. [47 U.S.C. 225] Telecommunications Services for 
        Hearing-Impaired and Speech-Impaired Individuals.
        Sec. 254. [47 U.S.C. 254] Universal Service.
        Sec. 255. [47 U.S.C. 255] Access by Persons With Disabilities.

        CONSUMER PROTECTION
        Sec. 217. [47 U.S.C. 217] Liability of Carrier for Acts and 
        Omissions of Agents.
        Sec. 222. [47 U.S.C. 222] Privacy Of Customer Information.
        Sec. 230. [47 U.S.C. 230] Protection for Private Blocking and 
        Screening of Offensive Material.
        Sec. 258. [47 U.S.C. 258] Illegal Changes in Subscriber Carrier 
        Selections.

        COMPETITION
        Sec. 224. [47 U.S.C. 224] Regulation of Pole Attachments.
        Sec. 253. [47 U.S.C. 253] Removal of Barriers to Entry.
        Sec. 251. [47 U.S.C. 251] Interconnection
        Sec. 256. [47 U.S.C. 256] Coordination for Interconnectivity.
        Sec. 257. [47 U.S.C. 257] Market Entry Barriers Proceeding.

    Do you agree or disagree that these sections of Title II common 
carrier regulation are needed? If you agree, please explain why.
    Answer. Generally, we disagree that these provisions should be 
applied to broadband service, although they should continue to apply to 
existing telecommunications carriers. Title II of the Communications 
Act was designed for the 1930s telephone monopoly era, and applying 
Title II regulations to today's broadband service would be highly 
disruptive and work against the government's policy goals of increasing 
broadband deployment and adoption. Importantly, however, while these 
considerations would support refraining from imposing the unnecessary 
and burdensome obligations and restrictions contained in Title II, 
there are a small number of provisions that happen to be codified in 
Title II and, far from imposing unnecessary restrictions or 
obligations, actually facilitate broadband investment and deployment 
goals. Section 224, which establishes a series of rights among 
different classes of carriers and non-carriers with respect to access 
to poles, conduits, and rights-of-way, and Section 230, which provides 
immunity from publisher-related liability for various classes of 
Internet intermediaries, including ISPs, would fall into this category.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Brian Schatz to 
                             W. Tom Simmons
    Question. I believe that the FCC needs to have ongoing, flexible 
authority over broadband. I am concerned that the draft legislation 
does not preserve that type of authority. What changes can--or should--
be made to the draft that would address this concern?
    Answer. Under the draft legislation, the FCC retains significant 
authority to interpret and enforce the net neutrality rules, and the 
draft does not deprive the FCC of any basis of authority it has relied 
upon to regulate broadband.
    With regard to net neutrality, the draft legislation specifically 
targets impermissible discriminatory behaviors that have been 
identified as threats to the open Internet, and the FCC would have 
authority to interpret those rules, as well as to pursue violations of 
those rules based on its interpretation of the law.
    With regard to future broadband regulations, the draft does not 
remove the basis for any authority the FCC has relied upon to regulate 
broadband. Where the FCC has extended regulations to apply to broadband 
service--for example, by extending universal service support to 
broadband, it has explicitly stated that such authority exists in 
provisions of the Communications Act, and has not relied on Section 706 
as a primary basis of authority.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Cory Booker to 
                             W. Tom Simmons
    Question 1. One aspect largely absent from the debate on Chairman 
Thune's proposed neutrality legislation is the issue of 
interconnection. Interconnection is not covered under current 
legislation. Do you believe that interconnection points can be choke 
points to the Internet highway?

    Question 1a. Under the proposed legislation, how would 
interconnection issues be addressed?
    Answer. Interconnection arrangements have never been covered by 
open Internet regulations, and are not covered by the proposed net 
neutrality legislation, because they are not part of broadband Internet 
access service. However, the draft legislation would not alter the 
FCC's authority over interconnection agreements; it simply prevents the 
FCC from creating a new regulatory scheme of its own design.
    I do not believe that the very few high-profile complaints of 
interconnection abuse are representative of the actual interconnection 
marketplace, which has developed organically over the years in the 
absence of regulation. The interconnection market is healthy and 
thriving, and will continue to evolve along with the rest of the 
Internet ecosystem.

    Question 2. Students, health care providers, and entrepreneurs have 
benefited greatly from innovative online platforms and the free flow of 
information. I fear that, without strong net neutrality rules, a 
``tiered Internet'' could emerge, creating barriers for innovators and 
small businesses.
    In the absence of strong anti-discrimination protections provided 
under Title II, and without Section 706 authority, what tools does the 
FCC have to prevent discriminatory practices and differential treatment 
we all agree should be prohibited?
    Answer. By prohibiting blocking, paid prioritization and 
throttling, the draft specifically and strongly targets and prohibits 
impermissible discriminatory behaviors that have been identified as 
threats to the open Internet. Rather than relying on a nebulous non-
discrimination standard, the draft provides clear rules that the FCC 
may interpret through case-by-case adjudication.

    Question 3. As currently drafted, what protections does the 
legislation provide that broadband reclassification would not?
    Answer. The draft legislation provides the substantial protection 
of legal and regulatory certainty for all parties involved. In the 
absence of legislation, it is clear that regardless of how the FCC 
rules, that decision will be challenged in court. While this third 
challenge to the FCC's net neutrality authority proceeds in the courts, 
broadband providers seeking to formulate business strategy, edge and 
content providers developing their business plans for new product and 
services, and consumers will be faced with several years of regulatory 
uncertainty, with no real prediction of, or ability to rely on, the 
outcome of the litigation.
    Enacting legislation would avoid the need for yet another 
protracted litigation, set clear standards for ISP behavior, and 
establish unassailable authority for the FCC to prevent any 
anticompetitive behavior by ISPs that violates the rules--all without 
imposing monopoly telephone regulations on broadband Internet access 
service.

    Question 4. Do you believe, as the draft legislation suggests, the 
FCC should not be able to claim any authority under Section 706 of the 
Telecommunications Act of 1996?
    Answer. No. The D.C. Circuit upheld the FCC's use of Section 706 as 
a basis of authority for implementing net neutrality rules that it 
believed would spur broadband deployment, and I believe that the FCC 
could rely on Section 706 to formulate net neutrality rules.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Joe Manchin to 
                             W. Tom Simmons
    Question 1. During the hearing, I received conflicting information 
about how the Chairman's proposed legislation would impact Universal 
Service Fund (USF) broadband programs like the Connect America Fund 
(CAF) that help private companies make investments and expand their 
network into rural, underserved areas. Due to the importance of these 
programs to my state and the communities I represent, I am requesting a 
written explanation of the anticipated impacts this bill would have on 
USF programs from each of the witnesses, specifically:

    Question 1a. What authority or authorities does the Federal 
Communications Commission currently rely on to operate and execute USF 
programs like the Connect America Fund?
    Answer. The FCC relies on section 254 of the Communications Act to 
operate and execute its USF programs, including in its 2011 decision to 
extend universal service support to broadband service. The Commission 
mentioned Section 706 as a secondary source of authority for extending 
USF support to broadband, but made clear that it believed that section 
254 was sufficient and that it was only ``relying on section 706(b) as 
an alternative basis to section 254 to the extent necessary.''

    Question 1b. Without either Section 706 of the Telecommunications 
Act of 1996 authority or Title II of the Communications Act of 1934 
authority, as proposed in the draft legislation, under what authority, 
if any, could the FCC incentivize broadband deployment?
    Answer. The draft legislation provides only that broadband service 
may not be classified as a Title II service; it does not deprive the 
FCC of all Title II authority. The Commission could continue to 
exercise all existing authority under Title II as it always has, 
authority it has exercised in the name of incentivizing broadband 
deployment.

    Question 1c. What would happen to the Connect America Fund and 
similar programs should this legislation pass in its current form?
    Answer. The draft legislation would have no effect on those 
programs.

    Question 2. One of the primary concerns I have about the proposal 
we are discussing today is the removal of all rulemaking authority. 
Businesses need certainty, and rulemaking allows businesses to 
understand how the general goals and standards Congress establishes in 
law--such as affordable and accessible Internet--will be specifically 
applied before they make investment decisions. The proposed bill 
removes all the transparency requirements included in rulemaking and 
replaces them with a new, retroactive, case-by-case rulemaking process 
that could be very difficult for small start-up businesses to 
understand. Without rulemaking, how would entrepreneurs understand how 
the FCC would apply the mandates of this bill to particular 
circumstances?

    Question 2a. What opportunities would businesses and consumer 
groups have to weigh-in on the FCC's application of these rules going 
forward?
    Answer. The FCC itself has endorsed a case-by-case approach to 
adjudicating violations of open Internet rules as the best way to 
provide more detailed rulings, explaining that ``the novelty of 
Internet access and traffic management questions, the complex nature of 
the Internet, and a general policy of restraint in setting policy for 
Internet access service providers weigh in favor of a case-by-case 
approach.'' In 2010, when it adopted a case-by-case approach to 
enforcement, the FCC noted that the proposal had met with almost 
universal support among commenters. And unlike in the Comcast-
BitTorrent matter, the draft legislation does not raise any concerns of 
vagueness, because it provides generally applicable bright-line ex ante 
rules that will facilitate the swift adjudication of allegations and 
enable those making investment decisions to understand easily what 
types of ISP behavior is permissible. To the extent that private 
entities did not agree with the FCC's interpretation of the rules, they 
could meet with the Commission to discuss their concerns or seek a 
declaratory ruling on the permissibility of certain practices under the 
rules.

    Question 2b. How could any changes, however small, even be made to 
reflect the specific concerns of entrepreneurs or small businesses with 
the explicit prohibition on expanding Internet openness obligations 
included in Subsection (b) the draft bill?
    Answer. The draft legislation sets forth Congress's expectations of 
how ISPs should behave and bans behavior that Congress believes would 
threaten an open Internet, while still allowing ISPs to innovate. The 
FCC would have full power to regulate ISPs that are violating the 
prohibitions Congress has established. It appropriately would not allow 
the FCC to substitute its own judgment--or that of any private entity--
for that of Congress. As noted above, to the extent that private 
entities did not agree with the FCC's interpretation of the rules, they 
could meet with the Commission to discuss their concerns or seek a 
declaratory ruling on the permissibility of certain practices under the 
rules.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Deb Fischer to 
                       Nicol E. Turner-Lee, Ph.D.
    Question 1. To All Witnesses--While the FCC is in the process of 
ensuring net neutrality, some want the FCC to impose all of these 
obligations under the guise of ensuring consumer protection. Some argue 
that common carrier requirements on broadband providers should include 
almost most all of Title II, in addition to Sections 201, 202, and 208. 
Specifically, some activists have suggested the following parts of 
Title II must be applied to the broadband industry:

        UNIVERSAL SERVICE
        Sec. 214. [47 U.S.C. 214] Extension Of Lines
        Sec. 225. [47 U.S.C. 225] Telecommunications Services for 
        Hearing-Impaired and Speech-Impaired Individuals.
        Sec. 254. [47 U.S.C. 254] Universal Service.
        Sec. 255. [47 U.S.C. 255] Access by Persons With Disabilities.

        CONSUMER PROTECTION
        Sec. 217. [47 U.S.C. 217] Liability of Carrier for Acts and 
        Omissions of Agents.
        Sec. 222. [47 U.S.C. 222] Privacy Of Customer Information.
        Sec. 230. [47 U.S.C. 230] Protection for Private Blocking and 
        Screening of Offensive Material.
        Sec. 258. [47 U.S.C. 258] Illegal Changes in Subscriber Carrier 
        Selections.

        COMPETITION
        Sec. 224. [47 U.S.C. 224] Regulation of Pole Attachments.
        Sec. 253. [47 U.S.C. 253] Removal of Barriers to Entry.
        Sec. 251. [47 U.S.C. 251] Interconnection
        Sec. 256. [47 U.S.C. 256] Coordination for Interconnectivity.
        Sec. 257. [47 U.S.C. 257] Market Entry Barriers Proceeding.

    Do you agree or disagree that these sections of Title II common 
carrier regulation are needed? If you agree, please explain why.
    Answer. I disagree that Title II is needed. The Internet has 
developed into the transformative medium it is today without the 
application of any of these provisions to broadband Internet access. 
Indeed, MMTC believes that the Internet's astounding rise over the past 
two decades is directly attributable to the light-touch regulatory 
approach taken by the FCC to broadband.\1\
---------------------------------------------------------------------------
    \1\ See David Honig, Esq. & Nicol Turner-Lee, Ph.D., MMTC, 
Refocusing Broadband Policy: The New Opportunity Agenda for People of 
Color 7-8 (Nov. 21, 2013) (``MMTC White Paper''); Comments of the 
National Minority Organizations, GN Docket Nos. 14-28 and 10-127 (July 
18, 2014).
---------------------------------------------------------------------------
    Access to the Internet has provided so many great opportunities for 
Americans across the board. The Internet in America has become the 
marvel of the world as consumers benefit from telehealth, educational 
endeavors, civic engagement, and free speech opportunities that have 
empowered their lives and provided myriad opportunities to achieve and 
grow. Today's competitive broadband marketplace works well and has 
helped ensure those opportunities continue to be available to those who 
need it most.
    The reason the Internet has become so dynamic and powerful in our 
lives is due to the decades-old bipartisan approach begun under 
President Clinton in which the government made the wise decision to 
allow the Internet to proliferate, innovators to create and consumers 
to benefit. It is this consumer-oriented and investment-focused 
approach that has brought us today's Internet.
    A high quality broadband connection provides essential resources 
and tools for more vulnerable populations that include the poor, people 
of color, people with disabilities, those without a high school 
education and seniors. The Internet and Internet-enabled technologies, 
applications and services make it possible for these groups to leverage 
data, voice, video and social media to solve chronic and persistent 
problems. We need the Internet to be the aspiration for these 
communities, and avoid a collision course that is mired by years of 
legal and political disputes.
    As technology advances and brings various new apps and online 
services that improve quality of life for so many people, it's 
important that regulators do their best to make these services 
available to as many people as people. I do not believe that Title II 
is the best regulation to ensure this happens.
    MMTC, and our partnership of leading civil rights organizations, 
support the values of the open Internet, particularly those expressed 
by the Administration. The focus as we see it should be on how to close 
the digital divide and how to bring advanced, high-speed broadband to 
all Americans. We believe that the enactment of Title II regulations 
will exacerbate the problem that we all should be attempting to solve.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Brian Schatz to 
                       Nicol E. Turner-Lee, Ph.D.
    Question. I believe that the FCC needs to have ongoing, flexible 
authority over broadband. I am concerned that the draft legislation 
does not preserve that type of authority. What changes can--or should--
be made to the draft that would address this concern?
    Answer. The Multicultural Media, Telecom and Internet Council 
(``MMTC'') urges Congress to preserve the Federal Communications 
Commission's Section 706 authority to regulate advanced communications 
capabilities, including broadband. The FCC is the expert agency; as 
such, the Commission regularly examines the state of the industry and 
creates benchmarks for our current and future success. The Commission 
should retain the authority to set standards to regulate the broadband 
industry in a flexible and responsive manner, and institute the 
appropriate consumer enforcement. Specifically, the legislation should 
set forth the appropriate statutes that support open Internet rules 
that can be enforced through Section 706 authority. This authority to 
regulate broadband will impact the Commission's ability to prohibit 
redlining, protect universal service reform, and ensure a robust public 
safety network.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Cory Booker to 
                       Nicol E. Turner-Lee, Ph.D.
    Question 1. One aspect largely absent from the debate on Chairman 
Thune's proposed net neutrality legislation is the issue of 
interconnection. Interconnection is not covered under current 
legislation.
    Answer. The fact that the bill does not specifically mention 
interconnection is not surprising or troubling. Policymakers have long 
viewed interconnection issues as fundamentally distinct from regulatory 
initiatives aimed at promoting Internet openness--which have always 
focused on the mass-market, retail broadband service offered to end 
users, not on the longstanding, commercial traffic-exchange 
relationships among network providers upstream. The 2010 Open Internet 
Order expressly excluded interconnection from the scope of its rules, 
and the NPRM proposes to maintain that approach going forward. FCC 
Chairman Wheeler likewise has expressed the view on numerous occasions 
that interconnection is not the same issue as net neutrality and should 
be considered separately. President Obama's statement also signaled a 
preference for addressing interconnection by requiring additional 
disclosures and network transparency, and I believe that the draft bill 
appears to follow this same approach.

    Question 1a. Do you believe that interconnection points can be 
choke points to the Internet highway?
    Answer. Yes, there can be congestion at interconnection points, but 
it is highly unlikely that they could be used as choke points to the 
Internet highway. It is my understanding that network congestion can be 
caused by either the ISP or the edge content provider that decides how 
and when it sends traffic to the interconnection points. The FCC record 
establishes that those who want to put content online have more ways to 
get that content to end users than ever before. There are multiple 
routes onto the major ISPs' networks, so anyone can get their content 
delivered to an ISP's customers without any direct commercial 
relationship with that ISP. And larger Internet content providers that 
do want direct connectivity now appear to be arranging for such 
connections.\1\ In addition, Internet interconnection points have 
always occurred through non-regulated, commercial arrangements. This 
approach has allowed the Internet to grow rapidly and support 
increasing access speeds. The competitive marketplace for 
interconnection--whether via backbone transit providers, content 
delivery networks and direct peering arrangements--has resulted in the 
rapid decline in the cost of Internet transit which has, in turn, 
enabled high-bit-rate applications, such as streaming video.
---------------------------------------------------------------------------
    \1\ See e.g., Edward Wyatt and Noam Cohen, Comcast and Netflix 
Reach Deal on Service, The New York Times (Feb. 23, 2014), available at 
http://www.nytimes.com/2014/02/24/business/media/comcast-and-netflix-
reach-a-streaming-agreement.html?_r=0 (last visited Feb. 4, 2015).

    Question 1b. Under the proposed legislation, how would 
interconnection issues be addressed?
    Answer. As explained above, I read the bill as correctly declining 
to impose affirmative restrictions on interconnection. The FCC could 
also adopt disclosure requirements relating to interconnection from 
both ISPs and content providers.

    Question 2. Students, health care providers, and entrepreneurs have 
benefited greatly from innovative online platforms and the free flow of 
information. I fear that, without strong net neutrality rules, a 
``tiered Internet'' could emerge, creating barriers for innovators and 
small businesses.
    Answer. All of these segments mentioned, and many more, have 
exponentially benefitted from broadband and the platforms that private 
investment and build out have enabled. It is apparent that clear rules 
on open Internet are required, but they also need to be flexible enough 
to accommodate new businesses models that may help low-income 
communities realize the relevance of broadband services and increase 
adoption. For example, MMTC, along with a host of other civil rights 
organizations, have advocated against ``paid prioritization'' if it 
results in a ``tiered Internet.'' However, MMTC has also worked with 
companies, like T-Mobile, to increase service offerings for low-income 
consumers that might make it more attractive--and less expensive--for 
their low-income customers to adopt the technology.\2\ Further, it is 
unclear how Title II rules will impact small businesses, as the 
Commission has not undertaken sufficient small business economic impact 
studies. For example, the Wireless Internet Service Providers 
Association (WISPA) recently reiterated its concern over deficiencies 
in the FCC's handling of its Regulatory Flexibility Act requirements 
and the resulting lack of economic impact analysis for open Internet 
regulations on small businesses, stating, ``the significant economic 
impact of any new open Internet regulations has not been given full, 
fair and appropriate consideration by the Commission.''\3\
---------------------------------------------------------------------------
    \2\ See e.g., Statement of David Honig, President and CEO, Minority 
Media and Telecommunications Council, RE: T-Mobile's Music Freedom 
Program (Aug. 27, 2014), available at http://mmtconline.org/wp-content/
uploads/2014/08/MMTC-Statement-TMobile-Music-Freedom-0827
14.pdf (last visited Feb. 4, 2015).
    \3\ See Wireless Internet Service Providers Association, Ex Parte 
Presentation, GN Docket No. 14-28 (Feb. 3, 2015).

    Question 2a. In the absence of strong anti-discrimination 
protections provided under Title II, and without Section 706 authority, 
what tools does the FCC have to prevent discriminatory practices and 
differential treatment we all agree should be prohibited?
    Answer. MMTC has strongly advocated for the use of Section 706 
authority with a Title VII enforcement mechanism, modeled after the 
Civil Rights Act, to ensure an open Internet. MMTC has argued that 
these policy tools, coupled with a presumption against paid 
prioritization, and a strong enforcement program, will facilitate the 
Commission's adoption of smart net neutrality rules that meet the goals 
of transparency and equity, while fostering broadband adoption and 
informed use. In our July filing with the FCC, MMTC, in partnership 
with 45 national civil rights organizations (``collectively, National 
Minority Organizations''), proposed a straightforward approach 
exercising Section 706 authority that included: \4\
---------------------------------------------------------------------------
    \4\ See Comments of the National Minority Organizations, GN Docket 
Nos. 14-28 and 10-127 (July 18, 2014).

   The immediate reinstatement of no-blocking rules to protect 
---------------------------------------------------------------------------
        consumers.

   The creation of a new rule barring commercially unreasonable 
        actions, while affording participants in the broadband economy, 
        particularly minority entrepreneurs, the opportunity to enter 
        into new types of reasonable commercial arrangements and, 
        through monitoring by the FCC's Office of Communications 
        Business Opportunities (OCBO), ensuring that minority 
        entrepreneurs are never overlooked by carriers seeking to 
        develop these new commercial arrangements.

   The establishment of a rebuttable presumption against paid 
        prioritization that protects against ``fast lanes'' and any 
        corresponding degradation of other content, while ensuring that 
        such presumption can be overcome by business models that 
        sufficiently protect consumers and have the potential to 
        benefit consumer welfare (e.g., telemedicine applications). Any 
        prioritized service that overcomes the presumption would remain 
        subject to enforcement, and consumers would be able to obtain 
        rapid relief by working with the Ombudsperson and/or through 
        the complaint process based on Title VII of the 1964 Civil 
        Rights Act, discussed in more detail at the end of this 
        response.

   The need to underscore the need for transparency. 
        Enforceable disclosure requirements are the key to consumer 
        protection online.

   Section 706 can also be used to punish bad actors, 
        especially those engaged in blocking, as the D.C. Circuit Court 
        confirmed in Verizon v. FCC, the Commission has the authority 
        to do.

    MMTC has also proposed that Section 706 look to stronger 
enforcement mechanisms to effectively resolve consumer complaints. 
Drawing from the U.S. Equal Employment Opportunity Commission (EEOC), 
Title VII of the Civil Rights Act of 1964 (``Title VII'') could be 
imported into the FCC's Internet regulatory process under Section 706 
of the Telecommunications Act of 1996. The EEOC's complaint process 
serves a vital role in resolving most employment discrimination 
complaints before they reach the court system. By encouraging voluntary 
mediation and informal settlement, the EEOC reduces the strain on 
judiciary while promoting swift resolution of discrimination claims. At 
the same time, the EEOC retain the ability to investigate and pursue 
legal action against employers that have violated Title VII. If no 
action is taken, individuals can pursue their legal claims privately 
through civil law suits. In doing so, the EEOC complaint process acts 
as a first line of defense against Title VII violations, guaranteeing 
that individuals will have their complaints heard by the EEOC or will 
be free to proceed on their own.
    In the same way, this process, if adapted to open Internet 
enforcement, could be the first line of defense for consumers who 
believe they are aggrieved by an apparent violation of Internet 
openness. The Title VII framework would provide the FCC with a flexible 
and enforceable legal framework, a clearly established set of factors 
and guidance, and mechanism to allow the FCC to evaluate challenged 
practices on a case-by-case affordably, efficiently and expeditiously. 
Such a procedure should help alleviate any misimpression that Section 
706 is insufficiently muscular to preserve Internet openness, while at 
the same time building consumer confidence in the FCC's stewardship of 
the open Internet.\5\
---------------------------------------------------------------------------
    \5\ See FCC Filing Dockets 14-28 and 10-27, ``Application of the 
EEOC Complaint Process to 1996 Telecommunications Act Section 706 
Complaints Regarding the Open Internet,'' September 18, 2014.
---------------------------------------------------------------------------
    Instead of relying on a more formal complaint process under Section 
208, the Title VII model would allow a complaint to provide the 
Commission with enough information to make out a prima facie case of 
specific or systemic harm, allowing the Commission to conduct an 
initial screening and, if the Commission's staff issues a non-
precedential finding of probable cause, the agency may institute 
expedited enforcement or mediation. This model would provide consumers 
with an efficient, affordable and expedited means of pursuing alleged 
rule violations and other claims against providers.\6\
---------------------------------------------------------------------------
    \6\ See FCC Filing Dockets 14-28 and 10-27, ``Application of the 
EEOC Complaint Process to 1996 Telecommunications Act Section 706 
Complaints Regarding the Open Internet,'' September 18, 2014.

    Question 3. As currently drafted, what protections does the 
legislation provide that broadband reclassification would not?
    Answer. The legislation would significantly establish an outright 
ban on paid prioritization--one that the FCC likely could not adopt 
under Title II of the Communications Act. According to several experts, 
service differentiation will not be entirely banned under Title II. 
Sections 201 and 202 of the Communications Act--the two provisions of 
Title II that some have cited as support for rules addressing paid 
prioritization--each require the FCC to engage in a highly fact-
specific, contextual analysis of whether particular conduct is ``just 
and reasonable,'' and thus could not be used to adopt the sort of 
categorical ban on paid prioritization appearing in the legislation.

    Question 4. Do you believe, as the draft legislation suggests, the 
FCC should not be able to claim any authority under Section 706 of the 
Telecommunications Act of 1996?
    Answer. No. The FCC is the expert agency and, as such, should be 
able to exercise flexible authority that is responsive to our changing 
information needs. We believe that there should be movement towards a 
legislative compromise that preserves FCC's Section 706 Authority to 
ensure the implementation and enforcement of net neutrality rules.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Joe Manchin to 
                       Nicol E. Turner-Lee, Ph.D.
    Question 1. During the hearing, I received conflicting information 
about how the Chairman's proposed legislation would impact Universal 
Service Fund (USF) broadband programs like the Connect America Fund 
(CAF) that help private companies make investments and expand their 
network into rural, underserved areas. Due to the importance of these 
programs to my state and the communities I represent, I am requesting a 
written explanation of the anticipated impacts this bill would have on 
USF programs from each of the witnesses, specifically:

    Question 1a. What authority or authorities does the Federal 
Communications Commission currently rely on to operate and execute USF 
programs like the Connect America Fund?
    Answer. The FCC's USF and CAF programs principally rely on Section 
254 of the Communications Act, which governs contributions to and 
disbursements from these programs, and Section 214 of the Act, which 
establishes eligibility criteria for carriers seeking support.

    Question 1b. Without either Section 706 of the Telecommunications 
Act of 1996 authority or Title II of the Communications Act of 1934 
authority, as proposed in the draft legislation, under what authority, 
if any, could the FCC incentivize broadband deployment?
    Answer. The legislation would not change the status quo regarding 
the FCC's USF and CAF programs. Those programs today play a vital role 
in promoting broadband deployment--and do so without classification of 
broadband Internet access services as a Title II service. The 
obligation of telecommunications carriers to contribute to those 
programs, and the ability of those programs to support broadband 
deployment, would remain the same.

    Question 1c. What would happen to the Connect America Fund and 
similar programs should this legislation pass in its current form?
    Answer. I believe that nothing will happen to these programs if the 
legislation passed. As noted above, since the CAF was established, the 
program has been successful at promoting broadband deployment, and all 
the while broadband Internet access service has been classified as an 
information service. The legislation would leave that current 
classification in place, and thus would not affect CAF support going 
forward.

    Question 2. One of the primary concerns I have about the proposal 
we are discussing today is the removal of all rulemaking authority. 
Businesses need certainty, and rulemaking allows businesses to 
understand how the general goals and standards Congress establishes in 
law--such as affordable and accessible Internet--will be specifically 
applied before they make investment decisions. The proposed bill 
removes all the transparency requirements included in rulemaking and 
replaces them with a new, retroactive, case-by-case rulemaking process 
that could be very difficult for small start-up businesses to 
understand. Without rulemaking, how would entrepreneurs understand how 
the FCC would apply the mandates of this bill to particular 
circumstances?
    Answer. The D.C. Circuit Court made clear in Verizon v. FCC that 
``[S]ection 706 of the Telecommunications Act . . . furnishes the 
Commission with the requisite affirmative authority to adopt [open 
Internet] regulations.'' In 2012, the D.C. Circuit Court unanimously 
upheld the transparency rule as a valid exercise of the FCC's authority 
under Section 706. The D.C. Circuit Court also made clear that Section 
706 would support the adoption of appropriately tailored rules 
prohibiting blocking of online content and requiring ``commercial 
reasonableness'' in business relationships between ISPs and edge 
providers. The ``commercial reasonableness'' standard can be likened to 
core Title II standards requiring just and reasonable terms and 
conditions, and prohibiting unreasonable discrimination without the 
substantial burdens and uncertainty created by common carrier 
regulations. We should be following the D.C. Circuit Court's roadmap 
for new open Internet rules under Section 706, whereas the FCC can 
preserve the flexibility needed for regulating Internet access without 
needlessly creating legal risk and uncertainty.

    Question 2a. What opportunities would businesses and consumer 
groups have to weigh-in on the FCC's application of these rules going 
forward?
    Answer. Businesses and consumer groups would have the opportunity 
to participate in any rulemaking proceeding that the FCC undertakes to 
adopt rules implementing the statutory requirements. In such a 
proceeding, the FCC likely would need to develop a clear understanding 
of certain concepts in the legislation (e.g., what constitutes 
``blocking,'' what kinds of ``network management'' are ``reasonable,'' 
etc.), and businesses and consumers groups would be able to share their 
insights on those matters. Moreover, businesses and consumer groups 
could weigh in on any future petitions seeking declaratory rulings or 
other guidance under the legislation. Such parties might also have the 
opportunity to provide input on adjudicatory proceedings, to the extent 
the FCC opens aspects of those proceedings to public comment.

    Question 2b. How could any changes, however small, even be made to 
reflect the specific concerns of entrepreneurs or small businesses with 
the explicit prohibition on expanding Internet openness obligations 
included in Subsection (b) the draft bill?
    Answer. Even if the FCC cannot impose substantive restrictions 
beyond those in subsection (b) of the draft bill, it still would be 
accorded deference in interpreting the restrictions in the legislation 
itself. And as the FCC considers how to interpret aspects of the 
legislation (e.g., the meaning of ``blocking'' and ``reasonable network 
management''), it will be obligated to consider the input of 
entrepreneurs, small businesses, consumer groups, and others who submit 
their views to the agency.

                                  [all]