[Senate Hearing 115-153]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 115-153

                    INVESTING IN AMERICA'S BROADBAND
                   INFRASTRUCTURE: EXPLORING WAYS TO
                     REDUCE BARRIERS TO DEPLOYMENT

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

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 3, 2017

                               __________

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








[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
















                         U.S. GOVERNMENT PUBLISHING OFFICE 

28-640 PDF                     WASHINGTON : 2018 
-----------------------------------------------------------------------
  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 FIFTEENTH CONGRESS

                             FIRST SESSION

                   JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi         BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri                  MARIA CANTWELL, Washington
TED CRUZ, Texas                      AMY KLOBUCHAR, Minnesota
DEB FISCHER, Nebraska                RICHARD BLUMENTHAL, Connecticut
JERRY MORAN, Kansas                  BRIAN SCHATZ, Hawaii
DAN SULLIVAN, Alaska                 EDWARD MARKEY, Massachusetts
DEAN HELLER, Nevada                  CORY BOOKER, New Jersey
JAMES INHOFE, Oklahoma               TOM UDALL, New Mexico
MIKE LEE, Utah                       GARY PETERS, Michigan
RON JOHNSON, Wisconsin               TAMMY BALDWIN, Wisconsin
SHELLEY MOORE CAPITO, West Virginia  TAMMY DUCKWORTH, Illinois
CORY GARDNER, Colorado               MAGGIE HASSAN, New Hampshire
TODD YOUNG, Indiana                  CATHERINE CORTEZ MASTO, Nevada
                       Nick Rossi, Staff Director
                 Adrian Arnakis, Deputy Staff Director
                    Jason Van Beek, General Counsel
                 Kim Lipsky, Democratic Staff Director
              Chris Day, Democratic Deputy Staff Director
                      Renae Black, Senior Counsel
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 3, 2017......................................     1
Statement of Senator Thune.......................................     1
Statement of Senator Nelson......................................     3
    Prepared statement...........................................     4
Statement of Senator Capito......................................    42
Statement of Senator Fischer.....................................    48
Statement of Senator Schatz......................................    50
Statement of Senator Cortez Masto................................    52
Statement of Senator Cruz........................................    55
Statement of Senator Gardner.....................................    57
Statement of Senator Markey......................................    57
Statement of Senator Peters......................................    59
Statement of Senator Heller......................................    61
Statement of Senator Klobuchar...................................    64
Statement of Senator Blumenthal..................................    66
Statement of Senator Moran.......................................    69

                               Witnesses

Patricia Cooper, Vice President, Satellite Government Affairs, 
  Space Exploration Technologies Corp. (SpaceX)..................     6
    Prepared statement...........................................     7
Larry Downes, Project Director, Georgetown Center for Business 
  and Public Policy..............................................    14
    Prepared statement...........................................    16
Brian M. Hendricks, Head of Technology Policy and Public Affairs 
  for the Americas Region, Nokia Corporation.....................    23
    Prepared statement...........................................    25
Hon. Jeff Weninger, State Representative, Arizona House of 
  Representatives................................................    32
    Prepared statement...........................................    34
Hon. Gary Resnick, Mayor, Wilton Manors, Florida.................    35
    Prepared statement...........................................    37

                                Appendix

Response to written question submitted to Patricia Cooper by:
    Hon. Jerry Moran.............................................    71
    Hon. Dan Sullivan............................................    71
    Hon. Maggie Hassan...........................................    73
Response to written questions submitted to Larry Downes by:
    Hon. Roger Wicker............................................    73
    Hon. Jerry Moran.............................................    76
    Hon. Maggie Hassan...........................................    80
Response to written questions submitted to Brian M. Hendricks by:
    Hon. Jerry Moran.............................................    83
    Hon. Maggie Hassan...........................................    85
    Hon. Catherine Cortez Masto..................................    87
Response to written questions submitted to Hon. Jeff Weninger by:
    Hon. Jerry Moran.............................................    89
    Hon. Dan Sullivan............................................    89
    Hon. Maggie Hassan...........................................    90
Response to written question submitted to Hon. Gary Resnick by:
    Hon. Maggie Hassan...........................................    90

 
                    INVESTING IN AMERICA'S BROADBAND
                   INFRASTRUCTURE: EXPLORING WAYS TO
                     REDUCE BARRIERS TO DEPLOYMENT

                              ----------                              


                         WEDNESDAY, MAY 3, 2017

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10 a.m. in room 
SR-253, Russell Senate Office Building, Hon. John Thune, 
Chairman of the Committee, presiding.
    Present: Senators Thune [presiding], Nelson, Wicker, 
Cantwell, Blunt, Klobuchar, Sullivan, Blumenthal, Fischer, 
Schatz, Moran, Markey, Cruz, Booker, Heller, Peters, Gardner, 
Hassan, Capito, Cortez Masto, Lee, and Inhofe.

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

    The Chairman. Well, good morning. This morning our 
Committee meets again to explore ways to promote broadband 
investment and deployment. Before opening our discussion on 
infrastructure, I want to take a moment to welcome and thank 
our friends to the North for joining us here today. Our 
colleagues from the Canadian House of Commons serving on the 
Standing Committee on Industry, Science, and Technology, have 
joined us today to talk about how our two nations can learn 
from one another regarding improving broadband connectivity. 
The members of this committee extend a warm welcome to you, and 
we look forward to our continued dialogue on broadband policy.
    Improving our Nation's infrastructure is a bipartisan goal 
that Congress and the administration share. In March, we heard 
from a diverse panel of witnesses who spoke of the issues 
facing our Nation's infrastructure across several sectors of 
our economy. One of our witnesses, Shirley Bloomfield, speaking 
on behalf of NTCA--the Rural Broadband Association, offered 
insight about the benefits that stem from deploying and 
modernizing broadband infrastructure. As we all know, access to 
broadband is critical to everyday life and is a driving force 
behind much of the economic growth we've experienced over the 
last two decades.
    Particularly in areas like South Dakota, keeping up with 
the demand for access to broadband can be challenging. Rural 
communities unfortunately often lag behind their urban 
counterparts due to more challenging geographies and lower 
population density. To address this disparity, a major part of 
our continuing discussion on improving the Nation's 
infrastructure should include solutions to reducing any 
unnecessary hurdles to broadband deployment.
    As we look to potential solutions, we must be mindful of 
the tremendous investment made to deploy these services and 
look for opportunities to help cut through red tape. For 
example, many wireless carriers are already deploying next-
generation small cells that are the size of a pizza box and 
thus reducing the need for larger towers and minimizing 
environmental impact.
    To help foster more deployment, we must ensure the 
regulatory regime in place is reflective of these advances in 
technology. Speeding up deployment will also come from 
eliminating unnecessary red tape and delays. As my colleagues 
from Alaska, Minnesota, Wisconsin, and other northern states 
already know, in places like South Dakota, you are lucky if you 
have a 6-month window to undertake the hard work of deploying 
broadband infrastructure, whether that's laying fiber, erecting 
towers, or building satellite Earth stations. This makes any 
bureaucratic delay in securing permits even more damaging in 
states like ours.
    In South Dakota, for instance, Golden West 
Telecommunications has to start the permitting process 1 to 2 
years before it can begin putting fiber in the ground, and 
sometimes even that is not enough.
    In April 2015, Golden West began the process of securing 
permits to deploy fiber facilities in Custer, a mile-high city 
in the Black Hills with a population of about 2,000 people. Due 
to delays particularly from the National Forest Service, Golden 
West didn't get the necessary approvals until this past 
November, some 18 months later. Well, on Monday, it was still 
snowing in the Black Hills. Nevertheless, after more than 2 
years of waiting, Golden West is ready to start digging just as 
soon as the weather clears. In the meantime, a multimillion 
dollar project has been on hold, good jobs have been deferred, 
and valuable Internet service has been delayed.
    Today, I hope that we will explore ways to facilitate 
faster broadband deployment and avoid these unnecessary delays. 
We must be cognizant, however, of the role our local 
communities have in authorizing and managing the deployment of 
physical infrastructure. Many businesses serving these 
communities, like Midco in South Dakota, have developed great 
partnerships within their footprint, and we, as policymakers, 
want to encourage such relationships to thrive.
    A good starting point for addressing many of these issues 
is for the Senate to immediately take up and pass the MOBILE 
NOW Act, which this committee approved during our first markup 
in January. This bipartisan bill would streamline the process 
of applying for easements, rights-of-way, and leases for 
federally managed property, and would establish a shot clock 
for review of those applications.
    MOBILE NOW would also establish a national broadband 
facilities asset database listing government property that 
could be used by private entities for the purpose of building 
or collocating communications facilities. For all these 
reasons, it's my hope in the coming weeks we'll finally see 
Senate passage of the MOBILE NOW Act.
    As Congress considers developing legislation to improve the 
Nation's infrastructure, our discussion here today will help 
build a constructive record regarding America's digital 
infrastructure.
    I look forward to hearing from our distinguished panel 
today, and I want to thank you all for your willingness to 
testify.
    I want to turn now to Senator Nelson for any opening 
remarks he may have.
    Senator Nelson.

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

    Senator Nelson. Thank you, Mr. Chairman.
    This is an important topic. We have neglected our 
infrastructure for so long. And, of course, when we talk about 
infrastructure, it's not just roads and bridges, it's not just 
airports and seaports, it's the expansion of broadband. And I'm 
particularly pleased that Mayor Gary Resnick, of Wilton Manors, 
Florida, is here with us for the second time, to provide a 
local perspective that is so important to this issue of 
expansion of high-tech broadband. It's clear that we're right 
here on the cusp of another leap forward in wireless 
communications.
    And also at the table this morning, a company, SpaceX. 
Companies like this are preparing to launch innumerable 
satellites that basically will cover communications for the 
entire planet--communications directly off of a satellite. So 
we're going to have innumerable opportunities, terrestrial 
wireless companies are focused on deploying the next-generation 
5G wireless service, and that will provide many consumer 
benefits and likely serve as the backbone for our increasingly 
connected economy. And then the more we're connected, then the 
only thing we have to worry about, Mr. Chairman, is keeping the 
Russians out of all of our communications.
    So in looking at an infrastructure package, this Committee 
has already talked about the necessity of direct spending for 
broadband expansion. So we're going to look today at whether 
there are other non-monetary measures Congress could or should 
take to improve our nation's digital infrastructure.
    So, many of us at the Federal level to the State level to 
the local level around the country want Americans to benefit 
from the availability of robust wireless. Building these 
networks has always brought up a number of very sensitive 
issues: historic preservation, environmental concerns, state 
and local land use policies, tribal sovereignty, national 
security. And the advent of 5G brings with it networks that 
require installation of much denser wireless infrastructure 
made up of many more small facilities. So I hope that all of 
our stakeholders, including those represented here today, can 
work together to find ways to effectively balance all of these 
competing concerns.
    Now, with that said, I want to say something else about a 
different subject. The question many have asked me, following 
last week's announcement by the FCC Chairman Pai, that he 
intends to roll back the Commission's net neutrality rules, 
``Where,'' they ask me, ``do we go from here as lawmakers?''
    Well, I certainly believe American consumers deserve better 
than what the FCC Chairman is proposing. They need to know, the 
consumers, that we have their back, and they deserve certainty 
and finality when it comes to their essential right to a truly 
free and open Internet protected by clear, enforceable net 
neutrality rules.
    That lasting finality can only come from legislation, which 
the Chairman and I have been talking about for a couple of 
years, which is why this Senator has been open to finding a 
bipartisan solution on this issue. That solution cannot merely 
pay lip service to net neutrality, but it must include real 
protections for consumers and empower the FCC with flexible, 
forward-looking authority over broadband providers. Otherwise, 
we're going to be in this ``never never land'' where the FCC 
will say something and then it will be tied up in the courts 
for years, and it will go from one court to another.
    If we could ever get a bipartisan legislative solution, 
then that solves the problem, but, of course, that's not easy. 
Net neutrality legislation is not going to happen overnight, 
even when you have the kind of goodwill that the Chairman and I 
do, and the members of this committee do. The reality is that 
right now we're facing that there are too many folks, from 
Chairman Pai to the stakeholders and lawmakers, that are dug in 
on a particular side of this issue, so it's making compromise 
an impossible task.
    So this Senator is an optimist by nature, but it's pretty 
clear to me that the climate just isn't ripe at the moment for 
a legislative solution that would lead to real substantive 
legislation that could garner sufficient bipartisan support, 
but that doesn't mean we shouldn't be trying. And this Senator 
will continue to try.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Nelson follows:]

   Prepared Statement of Hon. Bill Nelson, U.S. Senator from Florida
    Mr. Chairman, today we have another opportunity to talk about the 
importance of infrastructure to our economy, and in particular, the 
promise that comes with the next generation of wireless broadband. I am 
pleased that Gary Resnick, mayor of the great City of Wilton Manors, 
Florida, will once again join us today to provide an important local 
government perspective.
    It is clear that we are on the brink of a yet another leap forward 
in wireless communications. Companies like SpaceX are preparing to 
launch innovative global networks made up of hundreds of satellites in 
order to provide true high-speed, satellite-based broadband service. 
Terrestrial wireless companies are focused on deploying next-generation 
5G wireless service, which will provide many consumer benefits and 
likely serve as the backbone for our increasingly-connected economy.
    In looking at an infrastructure package, this committee has already 
talked about the necessity of direct spending for broadband expansion. 
Today, we look at whether there are other, non-monetary measures 
Congress could--or should--take to improve our Nation's digital 
infrastructure.
    Everyone--from those of us in the Senate to our mayors and local 
officials around the country--want Americans to benefit from the 
availability of robust wireless broadband. Building these networks has 
always brought up a number of very sensitive issues--from historic 
preservation and environmental concerns to state and local land use 
policies, tribal sovereignty, and national security. And the advent of 
5G brings with it networks that require installation of much denser 
wireless infrastructure, made up of many more smaller facilities.
    I continue to hope that all stakeholders, including those 
represented before us today, can work together to help us find ways to 
effectively balance the competing concerns about siting and 
construction of wireless facilities and consumers' increasing demand 
for fast and reliable wireless broadband services.
    With that said, I look forward to hearing from our witnesses.
    But before we do that, Mr. Chairman, I'd like to take a brief 
moment to address a question many have asked me following last week's 
announcement by FCC Chairman Pai that he intends to roll back the 
commission's net neutrality rules: Where do we, as lawmakers, go from 
here?
    I certainly believe American consumers deserve better. They need to 
know that we have their back. And they deserve certainty and finality 
when it comes to their essential right to a truly free and open 
Internet protected by clear, enforceable net neutrality rules.
    That lasting finality can only come from legislation, which is why 
I have been open to finding a true bipartisan solution on this issue. 
That solution cannot merely pay lip service to net neutrality, but must 
include real protections for consumers and empower the FCC with 
flexible, forward-looking authority over broadband providers.
    But I'm not naive. I have always said that net neutrality 
legislation would not happen overnight--even between members of 
goodwill who are not afraid to roll up their sleeves and tackle the 
issue. The reality we're facing right now is that there are too many 
folks--from Chairman Pai to stakeholders and lawmakers--that are dug in 
on this issue, making compromise an impossible task.
    Mr. Chairman, I'm an optimist by nature but it's pretty clear to me 
that the climate isn't ripe at the moment for any negotiations that 
will lead to real, substantive legislation that could garner sufficient 
bipartisan support.

    The Chairman. Thank you, Senator Nelson. And try we will. I 
think it's really important that Congress be heard from on this 
subject, and I think the actions being proposed by the FCC are, 
I believe, going to provide hopefully the necessary impetus for 
us to move forward with a legislative solution because, 
frankly, I think everybody here, we've batted this subject 
around a lot, realizes that the uncertainty created by constant 
lawsuits and changing administrations isn't something that's 
good for what has been a remarkable success story.
    And the Internet and all that it's meant for our lives and 
our economy and the productivity that we see in the world 
today, we want to see that continued, we want to see that 
continued investment, and in order for that to happen, I think 
we've got to have certainty, and the best way to achieve that 
is through legislation. So I hope we can get there, and we're 
certainly committed to that end, and I'm glad to hear the 
Senator from Florida indicate that he is as well.
    Let's proceed to our panel. And I want to start with Ms. 
Patricia Cooper, the Vice President of Satellite Government 
Affairs at SpaceX. She will be followed by Mr. Larry Downes, 
the Project Director for the Georgetown Center for Business and 
Public Policy; Mr. Brian Hendricks, who is the Head of 
Technology Policy and Public Affairs for the Americas Region 
for Nokia Corporation--this is a bit of a homecoming for Mr. 
Hendricks, who once served as the Committee's Republican Staff 
Director for my predecessor, Senator Kay Bailey Hutchison--the 
Honorable Jeff Weninger, who is a State Representative from the 
state of Arizona and has been doing some interesting work in 
this field; and the Honorable Gary Resnick, who, as Senator 
Nelson mentioned, is the Mayor of Wilton Manors in Florida, and 
so we're glad to have you back in front of this Committee.
    A great panel. We'll start on my left, and your right, with 
Ms. Cooper. If you could confine your oral remarks to as close 
to 5 minutes as possible, it will enable us to get to 
questions, and we certainly want to give members of the 
Committee an opportunity to ask those.
    So please proceed, Ms. Cooper.

         STATEMENT OF PATRICIA COOPER, VICE PRESIDENT,

        SATELLITE GOVERNMENT AFFAIRS, SPACE EXPLORATION

                  TECHNOLOGIES CORP. (SpaceX)

    Ms. Cooper. Mr. Chairman, Ranking Member Nelson, and 
members of the Committee, thank you for the opportunity to 
participate in this important and obviously timely hearing. As 
this committee reviews barriers to broadband deployment, SpaceX 
appreciates your consideration of the capability that new U.S.-
based satellite constellations operating close to the Earth can 
contribute to closing the digital divide.
    In addition to my opening statement, I have prepared a 
detailed written statement, which I have submitted for the 
record.
    Mr. Chairman, I am pleased to be here today representing 
SpaceX. As you know, SpaceX has from its inception leveraged 
American innovation, technical savvy, and an upstart culture to 
provide the most advanced launch and spacecraft systems in 
history.
    With around 6,000 U.S.-based employees and a network of 
4,400 suppliers nationwide, we are proud to provide a 
dependable and affordable ride to space for NASA, the 
Department of Defense, and the most sophisticated 
communications satellite operators in the world. Our innovation 
in launch technology has focused on achieving the ``holy 
grail'' of space access, reusability, and at the end of March, 
we successfully conducted the world's first reflight of an 
orbital-class rocket.
    Looking forward, we intend to leverage our 15 years of 
experience toward a broadband satellite constellation. We plan 
to design, develop, produce, launch, and operate a 
constellation of 4,000 satellites. These will provide high-
speed, low-latency, and affordable broadband to the underserved 
and unserved populations throughout the United States and 
abroad. This is an ambitious but vital objective.
    This Committee knows well the broadband picture in our 
country today, with 34 million Americans without access to even 
basic broadband, 23 million of these in rural or remote areas, 
41 percent of Americans living on tribal lands without 
broadband, and, importantly, more than half of connected 
Americans with only one available broadband service provider.
    Today's hearing is about barriers to deployment, deploying 
broadband, in America. SpaceX believes that the next-generation 
satellite services will substantially alter the picture of 
broadband access and competition. My testimony will focus on 
the unique regulatory and spectrum-based barriers to bringing 
these systems online.
    Let me briefly describe the SpaceX satellite system and how 
we think it can contribute to the broadband challenge. 
Initially, the SpaceX system will consist of 4,425 satellites 
operating close to the Earth with deployments starting in the 
next 5 years. On each spacecraft, we will apply cutting-edge 
space technologies that allow for spectrum reuse. The 
satellites in space will connect to user terminals on rooftops 
with gateways interconnected with the terrestrial Internet. In 
doing so, we will be able to bring services to homes, schools, 
or businesses with just a rooftop terminal a bit larger than a 
laptop.
    In short, adding a new user will just require minimal 
ground infrastructure, helping to address that last mile, and 
alleviating the common terrestrial challenges of siting, 
digging trenches, laying fiber, and dealing with property 
rights.
    So what hurdles do satellite systems face? First, 
regulations for these non-geostationary satellite 
constellations are in desperate need of modernization. The FCC 
has recognized this and is currently building a record to 
update the rules. We applaud this and encourage the Congress to 
monitor this effort and press for new rules that encourage 
innovation and reward spectrum-efficient constellations.
    Second, SpaceX is concerned that spectrum use policies 
limit the potential for large constellations in space. Here, we 
recommend the government make, as a priority, access to key 
spectrum bands for these systems.
    Third, we ask Congress to ensure technology neutrality when 
assessing broadband infrastructure initiatives generally. In 
the past, satellite was largely overlooked as a technology, 
even though it offers the widest geographic reach. Given the 
promise of the next generation of satellite broadband, we urge 
that satellite be qualified alongside their analogs with 
terrestrial and mobile systems in any broadband program.
    Finally, in order to deploy large constellations, launch 
regulations at both the FCC and FAA need to be reformed. These 
regulations were written when commercial launches were rare. 
With commercial launch, and now landings, increasing in cadence 
to twice monthly and eventually weekly, it's time for an 
update.
    At the FCC, spectrum for commercial launches is licensed 
through multiple short-term temporary authorizations per 
launch. For the last 4 years, the FCC has been working to 
provide an allocation which would, in turn, streamline the 
licensing process. We encourage Congress to support the FCC's 
launch spectrum rulemaking and press them to finalize it.
    At the FAA, regulations on commercial space launches also 
need to be modernized and streamlined. We applaud this 
committee for recently holding hearings on this issue, and we 
encourage you to continue efforts to ensure regulations keep 
pace with industry and not stifle innovation. We are excited 
about the promise our satellite constellation can bring.
    Mr. Chairman, thank you again for the opportunity to here 
today. I will be pleased to answer any questions.
    [The prepared statement of Ms. Cooper follows:]

   Prepared Statement of Patricia Cooper, Vice President, Satellite 
   Government Affairs, Space Exploration Technologies Corp. (SpaceX)
    Mr. Chairman, Ranking Member Nelson, and Members of the Committee,

    Thank you for the opportunity to participate in this important and 
timely hearing. As this Committee reviews broadband infrastructure 
investments, measures to streamline the regulatory process, and policy 
reforms to reduce barriers to expansion of broadband access in the 
United States, we are grateful that the Committee is considering the 
potential capability that a new generation of U.S.-based low-Earth 
orbit (``LEO'') satellite broadband services can contribute to 
connectivity.
    New technologies in space and on the ground, significant downward 
adjustments in satellite manufacturing costs, improved software and 
computing power, and dramatic reductions in the cost of space launch 
are all driving an era where large constellations of satellites 
orbiting close to the Earth can provide the high-speed, low-latency 
Internet service that many consumers have come to expect. Moreover, 
these systems offer the potential to provide reliable, high-quality 
broadband service to areas of the United States and the world that have 
been underserved or not served at all. Such systems can help alleviate 
the inherent challenges of providing high-speed Internet to rural and 
``hard-to-reach'' areas. Here, the geographic reach of satellite 
systems may obviate the need to build out the so-called ``last mile'' 
that, due to costs, environmental regulations, property rights issues, 
and other regulatory obstacles, starves so many communities of 
reliable, quality Internet access. Because of the significant up-front 
cost of a global satellite system, there is an inherent incentive to 
connect customers, no matter where they are. The satellites can ``see'' 
them whether they are urban or rural, and the incremental cost of 
adding a rural customer to a satellite network is so much lower than 
adding that rural customer to a ground-based cellular network.
    Last November, SpaceX filed an application with the Federal 
Communications Commission (``FCC'') for a license to operate a new non-
geostationary satellite orbit (``NGSO'') broadband Internet 
constellation, unveiling a development project we have been undertaking 
for nearly three years. While I will discuss some of the features of 
this system to help inform the Committee's views with respect to the 
capabilities offered by next-generation broadband satellite 
constellations (see Section III), my testimony today will focus more 
broadly on the following policy areas, and potential barriers, to the 
expansion of broadband access in the United States:

  (1)  The emergence of new technologies and cost structures that make 
        large-scale, space-based broadband Internet services more 
        viable today than ever before, and the potential such services 
        could provide in expanding affordable access to high-speed 
        broadband, including in rural, exurban, and suburban areas;

  (2)  Efficient use of spectrum, and whether current regulatory 
        frameworks provide the proper incentives for companies 
        developing large constellations of satellites to invest in 
        technologies that effectively share spectrum among these 
        systems. The Committee should take proactive steps to encourage 
        and reward companies that utilize and advance technologies that 
        result in maximum spectrum sharing and efficiency;

  (3)  The need to reconsider how current law, policy, and programs 
        focused on expanding broadband access treat satellite systems, 
        including a re-assessment of the potential data service and 
        speeds offered, the application of ``infrastructure'' 
        investments to space and ground systems, and subsidies for 
        underserved consumers, school districts, rural health care 
        providers, etc. for customer equipment. Here, it is timely to 
        review how satellite broadband has improved and can contribute 
        to the Nation's connectivity goals, and how to incorporate such 
        services into any national infrastructure initiative.

  (4)  The need to streamline and modernize FCC and Federal Aviation 
        Administration (``FAA'') regulations associated with commercial 
        space launch, which today create barriers for emerging 
        broadband satellite constellations from the United States, as 
        well as degrade the U.S. space launch industrial base and its 
        ability to be globally competitive.

    SpaceX has, from the beginning, leveraged American innovation, 
technical savvy, and an upstart, iterative culture to provide the most 
advanced launch and spacecraft systems in history. We are proud to have 
contributed to providing a dependable and affordable ride to space for 
NASA, the Department of Defense, and the world's most sophisticated 
commercial satellite manufacturers and operators. Today, we are 
regularly conducting cargo resupply missions to and from the 
International Space Station (``ISS'') with our Dragon spacecraft, and 
next year, we will launch the first American astronauts from U.S. soil 
on an American rocket since the Space Shuttle was retired in 2011.
    SpaceX has restored the U.S. as a leader in global commercial 
satellite launch by percentage of market share. Looking forward, the 
company intends to leverage its fifteen years of experience in cost-
effectively building and deploying large, complex space systems to 
support our broadband satellite constellation. With a vertically-
integrated approach to this initiative--from design, development, 
production, launch, and operations--SpaceX is addressing many of the 
challenges that have stymied past attempts to achieve affordable, high-
speed broadband from space.
I. SpaceX Today
    Founded in 2002, SpaceX today is the world's largest launch 
services provider, measured by missions under contract. We are an 
American firm that designs, manufactures, and launches rockets within 
the United States, with minimal reliance on foreign vendors or 
suppliers. SpaceX was founded with the express goal of dramatically 
improving the reliability, safety, and affordability of space 
transportation. We have made that goal a reality.
    The SpaceX Falcon 9 launch vehicle has now successfully launched 32 
times, all while achieving evolutionary but significant reductions in 
the cost of space launch. To achieve revolutionary reductions in launch 
costs, which will contribute to our ability to rapidly and cost-
effectively deploy our broadband satellite constellation, SpaceX has 
focused on making our rockets reusable. Last month, SpaceX successfully 
launched and landed a previously-flown Falcon 9 booster, placing a 
high-value telecommunications satellite into orbit for SES, a global 
satellite operator.
    SpaceX has nearly 70 missions on manifest, representing more than 
$10 billion in signed contracts for a diverse and growing set of 
customers, including NASA, the Department of Defense, commercial 
satellite operators, and allied international governments. SpaceX has a 
healthy, robust business; as technology companies should, we invest 
much of our profits back into the company's manufacturing and launch 
infrastructure and into advanced research and development, including 
satellite and ground system development.
    Meanwhile, we continue to push ahead on rocket technology 
developments and innovations as we advance toward fully and rapidly 
reusable launch vehicles; design and fly, with Dragon, the safest crew 
transportation system ever produced for American astronauts for NASA; 
and develop and produce the initial prototypes for our broadband 
satellite system for initial launch by the end this year. Critically, 
all of this innovation is occurring in the United States, creating 
jobs, advancing technology, and generating substantial economic 
activity.
    SpaceX maintains its manufacturing and engineering headquarters in 
Hawthorne, CA; a satellite system design and development office in 
Redmond, WA; a Rocket Development and Test Facility in McGregor, TX; 
and launch pads at Cape Canaveral Air Force Station, NASA Kennedy Space 
Center, Vandenberg Air Force Base, and, soon, a commercial launch site 
near Brownsville, TX. SpaceX maintains a network of more than 4,400 
American suppliers and partners--an investment in the American 
industrial base when others are spending abroad.
II. Disparities in Broadband Availability & Quality: A Market 
        Opportunity
    SpaceX sees substantial demand for high-speed broadband in the 
United States and worldwide. As the Committee is aware, millions of 
Americans outside of limited urban areas lack basic, reliable access. 
Furthermore, even in urban areas, a majority of Americans lacks more 
than a single fixed broadband provider from which to choose and may 
seek additional competitive options for high-speed service.\1\
---------------------------------------------------------------------------
    \1\ Federal Communications Commission, 2016 Broadband Progress 
Report, (January 28, 2016), GN Docket No. 15-191, available at https://
apps.fcc.gov/edocs_public/attachmatch/FCC-16-6A1.pdf.
---------------------------------------------------------------------------
    According to the FCC, thirty-four million Americans lack access to 
25 megabits per second (``Mbps'') broadband service, and 47 percent of 
the Nation's students lack the connectivity to meet the FCC's short-
term goal of 100 Mbps per 1,000 students and staff. As the FCC has 
noted:

        there continues to be a significant disparity of access to 
        advanced telecommunications capability across America with more 
        than 39 percent of Americans living in rural areas lacking 
        access to advanced telecommunications capability, as compared 
        to 4 percent of Americans living in urban areas, and 
        approximately 41 percent of Americans living on Tribal lands 
        lacking access to advanced telecommunications capability.\2\
---------------------------------------------------------------------------
    \2\ Ibid.

    While more than twenty-three million Americans living in rural 
areas account for the majority of those who lack access, nearly ten 
million Americans living in non-rural areas also lack basic access to 
high-speed Internet service. As this Committee well knows, the U.S. 
lags behind other developed nations in both its broadband speed and in 
price competitiveness, and many rural areas are simply not served by 
traditional broadband providers due to the high capital expenditure 
required for last-mile infrastructure relative to low revenue 
opportunities.
    At the same time, worldwide demand for broadband services and 
Internet connectivity continues to grow, with consumers increasing 
their requirements for speed, capacity, and reliability. The volume of 
traffic flowing over the world's networks continues to skyrocket, with 
one vendor estimating that annual global Internet Protocol (``IP'') 
traffic surpassed the zettabyte threshold in 2016--meaning that over 
1,000 billion gigabytes of data was exchanged worldwide last year.\3\ 
By 2020, that figure is projected to more than double (reaching a level 
nearly 100 times greater than the global IP traffic in 2005), global 
fixed broadband speeds will nearly double, and the number of devices 
connected to IP networks will be three times as high as the global 
population.
---------------------------------------------------------------------------
    \3\ Cisco Visual Networking Index: Forecast and Methodology, 2015-
2020, at 1 (June 6, 2016), available at http://www.cisco.com/c/en/us/
solutions/collateral/service-provider/visual-network
ing-index-vni/complete-white-paper-c11-481360.pdf; see also http://
blogs.cisco.com/sp/happy-zettabyte-day-2016. To fathom the volume of a 
zettabyte, if one byte is a litter, then a zettabyte is the equivalent 
of 7080 Pacific Oceans. See id.
---------------------------------------------------------------------------
    As consumer demands on speed and capacity continue to grow, 
disparities in access and competitive choice persist for many 
communities. Many consumers who have access to broadband today lack the 
multiplicity of choice that robust, competitive marketplaces tend to 
offer. The FCC has found that ``only 38 percent of Americans have more 
than one choice of providers for fixed advanced telecommunications 
capability,'' with only ``13 percent of Americans living in rural areas 
having more than one choice of providers of these services compared to 
44 percent of Americans living in urban areas.'' \4\
---------------------------------------------------------------------------
    \4\ FCC, 2016 Broadband Progress Report.
---------------------------------------------------------------------------
    In large measure, the disparity in available service to rural and 
``hard-to-reach'' areas is the result of the heavy, up-front capital 
expenditures necessary to achieve connectivity to these locations. 
Further, regulatory hurdles and the general pace of regulatory 
approvals in the U.S. associated with siting broadband infrastructure 
and securing environmental approvals continue to pose challenges. 
According to the Government Accountability Office (``GAO''):

        Access to affordable broadband telecommunications is vital to 
        economic growth and improved quality of life across the 
        country. In rural areas in particular, broadband can serve to 
        reduce the isolation of remote communities and individuals. The 
        provision of broadband Internet infrastructure and services in 
        the United States is generally privately financed. However, 
        rural areas can have attributes that increase the cost of 
        broadband deployment, such as remote areas with challenging 
        terrain, or make it difficult to recoup deployment costs, such 
        as relatively low population densities or incomes. These 
        attributes can decrease the likelihood that a broadband service 
        provider will build out or maintain a network in a rural area. 
        For these reasons, some rural areas lag behind urban and 
        suburban areas in broadband deployment or service speed.\5\
---------------------------------------------------------------------------
    \5\ U.S. Government Accountability Office, Rural Broadband 
Deployment: Improved Consistency with Leading Practices Could Enhance 
Management of Loan and Grant Programs, (April 2017), GAO-17-301, 
available at http://www.gao.gov/assets/690/684093.pdf.

    Despite a diverse set of technology platforms currently serving the 
ever-growing demand for broadband, from terrestrial fiber and cable 
systems to mobile cellular networks and, to a lesser degree, space-
based systems, many parts of the United States and the world lack 
access to reliable broadband connectivity. However, next-generation 
satellite systems operating in orbits close to the Earth, with 
innovative technologies to provide rapid data rates and minimal 
latency, may offer a way around this gap in broadband access in the 
United States.
    Beyond the United States, the United Nations Broadband Commission 
for Sustainable Development recently noted that 4.2 billion people, or 
57 percent of the world's population, are simply ``offline'' for a wide 
range of reasons--but predominately because the necessary connectivity 
is not present or not affordable.\6\ As the Committee knows, access to 
broadband and communications technologies are key to economic growth, 
social stability, access to healthcare, education, and basic services, 
particularly in lesser-developed countries.
---------------------------------------------------------------------------
    \6\ Broadband Commission for Sustainable Development, ``Open 
Statement from the Broadband Commission for Sustainable Development to 
the UN High-Level Political Forum (HLPF)'' (July 11, 2016), available 
at http://broadbandcommission.org/Documents/publications/HLPF-
July2016.pdf.
---------------------------------------------------------------------------
    In numerous ways, satellite technology has long helped to alleviate 
inequities in the availability of communications services, in part due 
to its geographic reach. Historically, satellites first revolutionized 
the availability of international telephony, then pioneered global 
distribution of video content. More recently, satellite systems have 
introduced broadband connectivity for mobile platforms, such as 
aircraft and ships--establishing and supporting new markets and 
enhancing those businesses and their customer experience.
III. SpaceX's Proposed Satellite Architecture--Broadband from Space
    SpaceX plans to bring high-speed, reliable, and affordable 
broadband service to consumers in the U.S. and around the world, 
including areas underserved or currently unserved by existing networks. 
Other companies have also recently announced plans for large-scale 
broadband satellite constellations, with the FCC currently undertaking 
a processing round considering the applications of a number of 
potential licensees requesting authority to operate in the United 
States.
    For our part, we will apply cutting-edge space technologies and 
spectrum re-use approaches, while leveraging our unique space-based 
design, manufacturing, launch, and space operations experience. 
Specifically, technology advancements like dynamic beam forming and 
phased array antennas in space and on the ground, as well as optical 
inter-satellite links to establish a ``mesh network'' in space through 
which the satellites will communicate with each other, enhance the 
capacity and customer experience for broadband satellite service.
    Initially, the SpaceX system will consist of 4,425 satellites 
operating in 83 orbital planes (at altitudes ranging from 1,110 km to 
1,325 km). This system will also require associated ground control 
facilities, gateway earth stations, and end user earth stations.\7\ 
Using Ka- and Ku-Band spectrum, the initial system is designed to 
provide a wide range of broadband and communications services for 
residential, commercial, institutional, governmental, and professional 
users worldwide. SpaceX has separately filed for authority to operate 
in the V-Band, where we have proposed an additional constellation of 
7,500 satellites operating even closer to Earth. In the future, these 
satellites would provide additional broadband capacity to the SpaceX 
system and further reduce latency where populations are heavily 
concentrated.\8\
---------------------------------------------------------------------------
    \7\ Space Exploration Holdings, LLC, Application for Approval for 
Orbital Deployment and Operation Authority for the SpaceX NGSO 
Satellite System (November 15, 2016), Before the Federal Communications 
Commission, IBFS File No. SAT-LOA-20161115-00118.
    \8\ Space Exploration Holdings, LLC, Application for Approval for 
Orbital Deployment and Operating Authority for the SpaceX NGSO 
Satellite System (March 1, 2017), Before the Federal Communications 
Commission, IBFS File No. SAT-LOA-20170301-00027.
---------------------------------------------------------------------------
    To implement the system, SpaceX will utilize the availability of 
significantly more powerful computing and software capabilities, which 
will enable SpaceX to allocate broadband resources in real time, 
placing capacity where it is most needed and directing energy away from 
areas where it might cause interference to other systems, either in 
space or on the ground. Because the satellites will beam directly to 
gateways or user terminals, the infrastructure needed on the ground--
particularly in rural or remote areas--is substantially reduced, 
essentially addressing the ``last mile'' challenge and helping to close 
the digital divide. In other words, the common challenges associated 
with siting, digging trenches, laying fiber, and dealing with property 
rights are materially alleviated through a space-based broadband 
network.
    SpaceX intends to continually iterate and improve the technology in 
the system, something that our satellite manufacturing cost profile and 
in-house launch capability uniquely enables. The ability to modify 
service as necessary, as well as refresh the technology of the 
satellite system through iterative spacecraft design changes and 
phased, continuous deployment, is critical to meet rapidly changing 
customer demands and responsibly utilize spectrum. This approach will 
ensure that the system remains adaptable to existing and future 
customer demands.
    For the end consumer, SpaceX user terminals--essentially, a 
relatively small flat panel, roughly the size of a laptop--will use 
similar phased array technologies to allow for highly directive, 
steered antenna beams that track the system's low-Earth orbit 
satellites. In space, the satellites will communicate with each other 
using optical inter-satellite links, in effect creating a ``mesh 
network'' flying overhead that will enable seamless network management 
and continuity of service. The inter-satellite links will further help 
SpaceX comply with national and international rules associated with 
spectrum sharing, which distinguishes our system from some of the other 
proposed NGSO constellations.
    Overall, SpaceX has designed our system to achieve the following 
key objectives:

  (1)  Capacity. By combining the umbrella coverage of the LEO 
        Constellation with the more intensive coverage from the VLEO 
        Constellation, the SpaceX System will be able to provide high 
        volume broadband capacity over a wide area. SpaceX will 
        periodically improve the satellites over the course of the 
        multi-year deployment of the system, which may further increase 
        capacity.

  (2)  Adaptability. The system leverages phased array technology to 
        steer dynamically a large pool of beams to focus capacity where 
        it is needed. As noted, optical inter-satellite links will 
        permit flexible routing of traffic on-orbit. Further, the 
        constellation ensures that a variety frequencies can be reused 
        effectively across different satellites to enhance the 
        flexibility, capacity and robustness of the overall system.

  (3)  Broadband Services. The system will be able to provide broadband 
        service at fiber-like speeds, the system's use of low-Earth 
        orbits will allow it to target latencies comparable to 
        terrestrial alternatives. SpaceX intends to market different 
        packages of data at different price points, accommodating a 
        variety of consumer demands.

  (4)  Efficiency. SpaceX is designing the system from the ground up 
        with cost-effectiveness and reliability in mind, from the 
        design and manufacturing of the space and ground-based 
        elements, to the launch and deployment of the system using 
        SpaceX launch services, development of the user terminals, and 
        end-user subscription rates.

    Later this year, SpaceX will begin the process of testing the 
satellites themselves, launching one prototype before the end of the 
year and another during the early months of 2018. Following successful 
demonstration of the technology, SpaceX intends to begin the 
operational satellite launch campaign in 2019. The remaining satellites 
in the constellation will be launched in phases through 2024, when the 
system will reach full capacity with the Ka- and Ku-Band satellites. 
SpaceX intends to launch the system onboard our Falcon 9 rocket, 
leveraging significant launch cost savings afforded by the first stage 
reusability now demonstrated with the vehicle.
IV. Barriers to the Expansion of Broadband from Satellite Systems: 
        Policy Recommendations for the Committee
    As the Committee considers policy action that could facilitate the 
expansion of broadband access in the United States, SpaceX respectfully 
offers the following recommendations for satellite infrastructure:

    Regulations for NGSO Systems Need Modernization. Congress should 
support the FCC's ongoing efforts to modernize certain regulations 
relating to NGSO satellite systems, which were originally developed 
nearly two decades ago and in many cases are outmoded given modern 
satellite system technology and market conditions. For example, current 
FCC rules require an NGSO licensee to launch all satellites in its 
constellation within six years of receiving a license. While this may 
have been desirable in the past, this artificial timeline inhibits the 
organic growth of large satellite constellations, preventing them from 
growing with the market to respond to consumer demand. Instead, these 
systems should be allowed to grow more like cellular networks, where 
additional assets and updated technology are deployed over time to meet 
increased demand.
    Moreover, in the case of large constellations like SpaceX's, the 
system is brought into operation with far fewer satellites, with 
additional satellites launched to add capacity and meet market demand 
as it evolves. As such, companies investing in a multi-year deployment 
strategy should not be penalized for enhancing their system over time. 
The FCC is currently conducting a rulemaking to modernize its satellite 
rules, especially those applicable to NGSO systems, which we hope will 
yield a regulatory regime more consistent with current market and 
technology realities.\9\ Should the FCC not proceed quickly in 
addressing these issues, the Committee should support waivers to ensure 
these innovative broadband systems are not artificially constrained.
---------------------------------------------------------------------------
    \9\ Updates to Parts 2 and 25 Concerning Non-Geostationary, Fixed-
Satellite Service Systems and Related Matters, 31 FCC Rcd. 13651 (2016) 
(``NPRM'').
---------------------------------------------------------------------------
    Next Generation Satellite Systems are Broadband Infrastructure and 
should be Included in any Infrastructure Legislation. The expansion of 
satellite broadband through U.S.-based constellations is, 
fundamentally, a national infrastructure project, even though many 
components of the infrastructure will be in space. In prior investment 
rounds and through funds like the Universal Service Fund (``USF''), 
satellite broadband was often an afterthought. For example, of the $6.9 
billion awarded for broadband infrastructure through National 
Telecommunications and Information Administration's (``NTIA'') 
Broadband Technology Opportunities Program (``BTOP'') and the U.S. 
Department of Agriculture's Rural Utilities Service (``RUS''), only 
approximately $100 million went to satellite systems, or less than 1.5 
percent of all funds appropriated.\10\ In many ways, this was the 
result of limitations at the time on satellite capacity, high latency 
rates due to satellite distance from the Earth, and relatively slow 
data rates compared to terrestrial and mobile networks. It was also 
related to a general failure of imagination to make investment and 
subsidy structures applicable to satellite infrastructure and consumer 
hardware, since satellite systems have few ``shovels in the ground.''
---------------------------------------------------------------------------
    \10\ National Telecommunications and Information Administration, 
U.S. Department of Commerce, Broadband Technology Opportunities Program 
(BTOP) Quarterly Program Status Report (March 2017), available at 
https://www.ntia.doc.gov/files/ntia/publications/ntia_btop_31st
_qtrly_report.pdf; and U.S. Department of Agriculture, Rural Utilities 
Service, Broadband Initiatives Program Final Report (December 2016), 
available at https://www.rd.usda.gov/files/reports/
RUS_BIP_Status_FinalReportDec_2016.pdf.pdf.
---------------------------------------------------------------------------
    However, as satellite-based broadband achieves speeds, latencies, 
and pricing equivalent to terrestrial and 5G wireless technologies, it 
becomes especially critical for Congress and Federal agencies to 
reconsider how these systems can participate in national infrastructure 
investment programs and other Federal initiatives to close the digital 
divide. Infrastructure associated with a satellite broadband system 
includes launch facilities, consumer terminals that are placed on homes 
or businesses, gateways that will be placed at potentially hundreds of 
Internet points of presence (``PoPs'') throughout the United States 
that are used to route traffic, large antennas to track and control the 
satellites in space, and satellite operations centers. The satellites 
themselves are essentially infrastructure in the sky, a network that is 
not dissimilar to cell towers or underground fiber.
    As such, SpaceX encourages the Committee to take steps to ensure 
that broadband satellite system infrastructure is duly captured in any 
infrastructure, incentive, or tax policy legislation undertaken to 
expand broadband access in the United States. Such an approach will not 
only ensure that Congress and regulatory agencies maintain a 
technology-neutral approach, but it will also ensure the U.S. 
Government and American consumers are positioned to benefit from the 
significant innovations and great promise of that satellite systems are 
poised to bring.
    Systems and Technology that Achieve Spectrum Efficiency Should be 
Rewarded. The new generation of broadband NGSO constellations holds 
incredible potential to bring affordable, fiber-like broadband services 
to underserved and unserved areas of the United States. Investment in 
advanced technologies that provide spectral efficiency and operational 
flexibility are necessary for NGSO systems to increase access to 
reliable, high-speed broadband connectivity. Unfortunately, not all 
operators have chosen to make the investment necessary to include many 
of these technologies in their proposed systems. As a result, some 
systems would not only make inefficient use of the spectrum they seek 
to use, but also may prevent other NGSO systems from efficiently 
sharing the available spectrum.
    As such, the Committee should ensure that the FCC takes steps to 
incentivize and reward efficient spectrum sharing. Spectrum sharing 
policies should ensure that all systems have equitable access to 
spectrum, avoid any warehousing of spectrum by non-operating systems, 
and incorporate sufficient flexibility to promote and accommodate 
spectrum coordination among operating systems. Given the advent of new 
space-based and ground technologies, spectrum sharing is most 
efficiently managed by using highly intelligent and flexible 
satellites, as this expands the range of potential sharing strategies 
available to the operators involved.
    Congress should encourage regulatory authorities to adopt rules 
that create incentives that encourage the use of spectrally-efficient 
technologies. Spectrum is a valuable and increasingly scarce resource, 
which must be shared by multiple satellite and terrestrial systems. 
Licensing inefficient NGSO systems, or granting such systems access to 
the U.S. market, not only imposes a burden on more efficient systems, 
but also undermines the national interest in promoting efficient usage 
of spectrum and maximizing broadband service to the public. Yet at 
present, the FCC has no mechanism for rewarding more efficient systems 
for their investment in advanced and spectrum-friendly technologies. If 
Congress wants to ensure that valuable spectrum resources are put to 
intensive and efficient use, it should encourage the FCC to implement 
policies that reward NGSO spectral efficiency when making public 
interest determinations.
    Spectrum Use Policy in the Ka- and V-Bands Should be Revised. 
SpaceX is concerned about FCC spectrum use policies that enable NGSO 
constellations, specifically in Ka- and V-bands. FCC rules effective 
today were written over a decade ago, and did not envision the 
potential of large constellations operating in low Earth orbit. As a 
result, these constellations are unduly restricted from using important 
segments of spectrum as compared to ground-based fixed systems. While 
the agency has granted waivers for NGSO systems to operate in parts of 
this spectrum on an unprotected, non-interference basis, this approach 
is not sustainable over the long-term, especially as these new systems 
come online. To partially remedy this challenge, FCC has released a 
Notice of Proposed Rulemaking (``NPRM'') that would make an additional 
1.3 GHz of Ka-band spectrum available for NGSO use, a positive 
development that SpaceX encourages the Committee to support. In 
addition, FCC should further remove impediments to NGSO use of 4.5 GHz 
of V-band spectrum (37.5-40.0/50.4-52.4 GHz), a step that would make 
U.S. spectrum rules more consistent with existing international 
allocations for use.
    FCC Commercial Launch Spectrum Licensing Process Should be 
Streamlined. For four years, the FCC has been considering a Notice of 
Proposed Rulemaking (``NPRM'') that would make available a limited 
range of frequencies in the Federal spectrum band that are commonly 
used for commercial launch available to the commercial sector on a co-
primary basis.\11\ The FCC proposed moving away from approving 
commercial launch spectrum grants under Special Temporary 
Authorizations (``STA''), which are handled on an individual basis and 
remain in effect for a short period of time, to a more streamlined 
approach that reduces paperwork and regulatory burden. We encourage the 
Committee to support the pending NPRM, to enable the FCC to better 
manage spectrum allocations for commercial launch spectrum. This effort 
is a timely and important step for the Commission to adjust to the 
increasing cadence and complexity of launches and growth in number of 
U.S. launch service providers.
---------------------------------------------------------------------------
    \11\ Amendment of Part 2 of the Commission's Rules for Federal 
Earth Stations Communicating with Non-Federal Fixed Satellite Service 
Space Stations; Federal Space Station Use of the 399.9-400.05 MHz Band; 
and Allocation of Spectrum for Non-Federal Space Launch Operations, 
(May 9, 2013), ET Docket No. 13-115, RM-11341 (``NPRM''), available at 
https://apps.fcc.gov/edocs_public/attachmatch/FCC-13-65A1_Rcd.pdf.
---------------------------------------------------------------------------
    FAA Commercial Launch License Regulations Require Modernization. 
Aside from issues relating to spectrum and broadband policy 
specifically, SpaceX is also working with this Committee, and others, 
through its Subcommittee on Space, on an important effort to modernize 
and streamline the FAA regulations governing commercial space launch. 
These regulations were promulgated in a time when commercial spaces 
launches were rare, and launch was primarily the domain of the U.S. 
Government. However, as the industry transitions from a pace of a few 
commercial launches per year to a launch per week, or more, in the near 
future, it is essential that FAA regulations be updated to avoid 
obstructing industry growth and innovation in the U.S. domestic 
commercial space launch industry.
                                 *****
    Mr. Chairman, I appreciate your invitation to testify before the 
Committee today. SpaceX looks forward to being part of the solution to 
expand access to high-speed, reliable, and affordable broadband 
Internet connectivity in the United States and worldwide. If we can 
answer any questions or provide any additional information, please 
contact Mat Dunn at [email protected].

    The Chairman. Thank you, Ms. Cooper.
    Mr. Downes.

STATEMENT OF LARRY DOWNES, PROJECT DIRECTOR, GEORGETOWN CENTER 
                 FOR BUSINESS AND PUBLIC POLICY

    Mr. Downes. Well, thank you and good morning, Mr. Chairman, 
Ranking Member Nelson, and members of this committee. I am 
grateful for the opportunity to testify this morning before you 
on barriers to broadband adoption and deployment on an 
accelerated base, based in Silicon Valley, by the way. I am 
also the author of several books, on the information economy, 
innovation, and the impact of regulation on the speed and 
trajectory of technology innovation.
    Let me start with some good news. Twenty years into the 
Internet revolution, the U.S. continues to dominate global 
markets for disruptive innovation, in large part, because of 
farsighted bipartisan policies from this committee and others. 
If we stay this course, future investments will make possible a 
new wave of innovation in everything from autonomous vehicles 
to smart cities, virtual reality, on-demand manufacturing, 
artificial intelligence, among many others.
    But as the saying goes, the future is already here, it's 
just not very evenly distributed. Driven by a combination of 
geographic, demographic, and educational factors, today's 
digital have-nots are characterized, not by their race, sex, or 
income so much as by where they live. Americans in rural and 
tribal lands, as well as seniors and those with less education, 
are now the groups disproportionately disconnected from our 
increasingly important digital conversation, and we are all 
worse off for their absence.
    To close that gap, and in the spirit of nonpartisan 
cooperation, Blair Levin and I recently reviewed the history of 
U.S. broadband deployment and developed eight specific 
recommendations for future infrastructure legislation. Levin, 
as this committee knows, directed the visionary National 
Broadband Plan, perhaps the most cost effective investment of 
the entire 2009 stimulus bill.
    Now, these recommendations are hardly original. Well, they 
probably are in terms of Blair, but none of them are 
controversial. And, happily, many of the best ideas would cost 
little or nothing in taxpayer dollars, but they do require your 
leadership to break longstanding logjams across government.
    In considering how best and most effective to close this 
remaining availability and adoption gap, my overall advice to 
this committee is to learn from the success and failure of 
previous Federal and local efforts, notably the 2009 American 
Recovery and Reinvestment Act.
    The bottom line here is simple. Accelerating deployment and 
adoption of broadband infrastructure for disconnected Americans 
will require some Federal spending, but the spending needs to 
be done in a more focused and professional way than in the past 
to reach those who truly need help. And those efforts can be 
multiplied by encouraging the update of state and local 
processes, which in turn, will provide incentives for private 
investors to reallocate even more of their own capital in ways 
that ultimately benefit everyone.
    Let me just very briefly list our specific recommendations, 
which I describe in my written testimony in the record.
    Number one is to limit and carefully control direct 
investments. We suggest creating a broadband acceleration fund, 
but use it only in areas where there is currently no provider. 
We want to determine the need of subsidies on a per-area basis 
and have one agency, preferably the FCC, be the sole 
administrator. And we suggest using general appropriations to 
fund that program rather than increases to the universal 
service fee.
    Second is to severely limit ongoing support. We want to 
change the paradigm of small capital support with uncertain 
ongoing operating subsidies to one that strongly favors areas 
where initial capital would be sufficient to overcome 
excessively high costs, and then use reverse auctions to 
maximize the bang for taxpayer buck in those areas.
    And number three, extend ``Dig Once.'' This committee has 
already looked at this and has made great progress. We agree 
ensuring broadband conduit is installed whenever Federal roads 
are dug up for any reason, and to the extent possible, 
extending that policy to state roads and rights-of-way.
    Number four, address other unproductive barriers to mobile 
deployment. While local authorities, of course, continue to 
ensure public safety and other local interests, most of what 
slows down installation of new equipment promotes no public 
interest; in fact, quite the opposite. Treating small cell and 
tent installation on utility poles and buildings, for example, 
as if they were full-scale tower builds really serves no public 
goal. Shot clocks, uniform pole attachment policies, and other 
best practices should be established I think at the Federal 
level.
    Number five, reengineer government processes that hinder 
private investment. Many local processes for application review 
and inspection are ad hoc, creating unneeded delays and costs 
that hold back deployment for both wired and mobile builds of 
next-generation networks. These must be standardized. The 
problem is not local regulation so much as local process or 
really the lack thereof.
    Number six, make investments technology-neutral. Next-
generation mobile networks and satellite-based solutions, as 
you just heard, they will be truly competitive in both speed 
and reliability, with fiber, cable, and copper hybrid 
technologies, which are also improving. So Federal programs, 
including Lifeline, should encourage development and deployment 
of all broadband technologies.
    Number seven, address non-financial causes of the digital 
divide. Availability in price have really largely been solved 
through public and private solutions. Surveys now consistently 
show that those who remain part of the digital divide, again, 
rural, senior, and less educated Americans, are unlikely to 
take broadband at any price. Public education about the 
relevance of broadband and training in basic computer usage may 
not cost much, but without them, any money spent will at least 
be partly wasted.
    And then, finally, use the bully pulpit to encourage 
digital want-nots. The National Broadband Plan laid out a 
vision of America's broadband future, which has largely come to 
be, or will soon, but neither the White House nor the FCC 
communicated that vision to digital want-nots. The FCC should 
take an updated plan on the road along with startups and 
established companies who are making the vision a reality.
    Now, in Silicon Valley, this is what we call a win-win-win, 
and I'm happy to expand on any of these points and look forward 
to your questions. Thank you very much.
    [The prepared statement of Mr. Downes follows:]

       Prepared Statement of Larry Downes,\1\ Project Director, 
            Georgetown Center for Business and Public Policy
---------------------------------------------------------------------------
    \1\ Larry Downes is Project Director at the Georgetown Center for 
Business and Public Policy. His books include Big Bang Disruption: 
Strategy in an Age of Devastating Innovation (Portfolio, 2014), 
Unleashing the Killer App (Harvard Business School Press, 1998), The 
Laws of Disruption (Basic Books, 2009).
---------------------------------------------------------------------------
    Chairman Thune, Ranking Member Nelson and members of the Committee, 
thank you for this opportunity to testify on barriers to accelerated 
broadband deployment.
    My name is Larry Downes. Based in Silicon Valley, I am Project 
Director at the Georgetown Center for Business and Public Policy and 
the author of several books on the information economy, innovation, and 
the impact of regulation on the speed and trajectory of technology 
innovation.
Summary
    Let's start with some good news. Twenty years into the Internet 
revolution, the U.S. continues to dominate a global market for 
disruptive innovation, in large part because of far-sighted bi-partisan 
policies. In particular, broadband-related legislation over the last 
two decades--including the 1996 Communications Act, Section 230 of the 
Communications Decency Act, the American Recovery and Reinvestment Act 
of 2009 and the Spectrum Act of 2012--have encapsulated some of the 
most successful technology policies ever adopted.
    In response, U.S. network developers have built the world's most 
extensive wired and wireless broadband infrastructure. Competing 
providers are now racing to build next-generation networks, including 
gigabit Internet over fiber, cable and hybrid networks and ultra-high 
speed 5G mobile networks. And in keeping with recommendations of the 
visionary 2010 National Broadband Plan, almost all of this new 
investment has been privately funded.
    Ubiquitous high-speed Internet has meant that every industry my 
colleagues and I have studied is in the midst of or about to be 
dramatically changed for the better.\2\ If we stay the course, future 
investments will make possible a new wave of innovation in everything 
from autonomous vehicles to smart cities, virtual reality, on-demand 
manufacturing, and artificial intelligence, among many others.
---------------------------------------------------------------------------
    \2\ Larry Downes and Paul Nunes, ``Big-Bang Disruption,'' Harvard 
Business Review (March, 2013), pp. 44-56, available at https://
papers.ssrn.com/sol3/papers.cfm?abstract_id=2709801.
---------------------------------------------------------------------------
    But the broadband revolution has yet to reach some of our most at-
risk communities and remote geographies. As science fiction writer 
William Gibson famously said, ``The future is already here, it's just 
not very evenly distributed.'' Though we may disagree about the metrics 
for determining acceptable speeds, latency and technology platforms for 
what constitutes broadband service, no one can deny that a significant 
digital divide still exists in the U.S.
    Driven by a combination of geographic, demographic and educational 
factors, today's digital have-nots are characterized not by their race, 
sex, or income but by where they live. Americans living in rural and 
tribal lands, as well as seniors and those with less education, are now 
the groups disproportionately disconnected from our increasingly 
important digital conversation. And we are all worse off for their 
absence.\3\
---------------------------------------------------------------------------
    \3\ Blair Levin and Larry Downes, A New Digital Divide has 
Emerged--and Conventional Solutions Won't Bridge the Gap, The 
Washington Post, Oct. 14, 2016, available at https://
www.washingtonpost.com/news/innovations/wp/2016/10/14/a-new-digital-
divide-has-emerged-
and-conventional-solutions-wont-bridge-the-gap/?utm_term=.882707eba100. 
See also National Telecommunications and Information Administration, 
Digitally Unconnected in the U.S. Who's Not Online and Why?, Sept. 28, 
2016, available at www.ntia.doc.gov/blog/2016/digitally-
unconnected-us-who-s-not-online-and-why; Monica Anderson and Andrew 
Perrin, 13 percent of Americans Don't Use the Internet--Who are They?, 
Pew Research Report, Sept. 7, 2016, available at http://
www.pewresearch.org/fact-tank/2016/09/07/some-americans-dont-use-the-
internet-
who-are-they/; Larry Downes, The Digital Revolution has not Reached All 
of Us, The Washington Post, Aug. 31, 2016, available at https://
www.washingtonpost.com/news/innovations/wp/2016/08/31/the-internet-
revolution-has-not-reached-all-of-us/?utm_term=.dd4ffcefd9d9.
---------------------------------------------------------------------------
    Though our public and utility infrastructure, which just received 
an overall grade of ``D+'' from the American Society of Civil 
Engineers,\4\ should clearly be the focus of the most urgent and 
sustained attention, there is also broad agreement that targeted 
Congressional action can accelerate the continued deployment and 
adoption of broadband technologies, closing what remains of our digital 
divide.\5\
---------------------------------------------------------------------------
    \4\ See American Society of Civil Engineers, 2017 Infrastructure 
Report Card, available at http://www.infrastructurereportcard.org/.
    \5\ As the White House and Congress develop an infrastructure plan 
promised during the campaign, many, including Senators, House Members 
and mayors, are urging that broadband be included. See, e.g., 
Klobuchar, Capito, King, Heitkamp, Boozman Lead 48 Senators in Urging 
President Trump to Include Broadband in Any Infrastructure Initiative, 
January 31, 2017, available at https://www.klobuchar.senate.gov/public/
index.cfm/news-releases?ID=A5F09FAD-1223
-4B0C-A058-80DDD0A9AF09; Letter to President Donald Trump, Jan. 30, 
2017, available at http://welch.house.gov/sites/welch.house.gov/files/
Telecom%202017.01.30%20Letter%20to%20
Pres%20Trump%20re.%20broadband_0.pdf; Next Century Cities, Over 60 
Mayors and Municipal Leaders Send Letter Calling on Congress to Include 
Broadband in Infrastructure Plans, March 1, 2017, available at http://
nextcenturycities.org/2017/03/01/over-60-mayors-and-municipal-leaders-
send-letter-calling-on-congress-to-include-broadband-in-infrastructure-
plans/.
---------------------------------------------------------------------------
    In the spirit of non-partisan cooperation, Blair Levin and I 
recently reviewed the history of U.S. broadband deployment and 
developed eight specific recommendations for future infrastructure 
legislation.\6\ Levin, as this Committee knows, directed the visionary 
National Broadband Plan--perhaps the most cost-effective investment of 
the entire stimulus bill--and now serves as a senior fellow at the 
Brookings Institution.
---------------------------------------------------------------------------
    \6\ Blair Levin and Larry Downes, Should Broadband Be Included in 
the Trump Infrastructure Plan?, The Washington Post, April 5, 2017, 
available at https://www.washingtonpost.com/news/the-switch/wp/2017/04/
05/should-broadband-be-included-in-the-trump-infrastructure-plan/
?utm_term=.a1d904f5fcee.
---------------------------------------------------------------------------
    These recommendations are hardly original--well, they probably are 
to Blair. But in any event, they are not controversial. Some of them 
have already been presented to this Committee in response to your 
request for recommendations. Others have been offered in various forms 
by analysts across the political spectrum.\7\
---------------------------------------------------------------------------
    \7\ See, e.g., Doug Brake, A Policymaker's Guide to Rural Broadband 
Infrastructure, Information Technology and Innovation Foundation (April 
2017), available at http://www2.itif.org/2017-rural-broadband-
infrastructure.pdf?mc_cid=4fb4705a17&mc_eid=98756dc702; Blair Levin and 
Carol Mattey In Infrastructure Plan, a Big Opening for Rural Broadband, 
Brookings Institution, Feb. 13, 2017, available at, https://
www.brookings.edu/blog/the-avenue/2017/02/13/in-infrastructure-plan-a-
big-opening-for-rural-broadband/.
---------------------------------------------------------------------------
    Still more specific, common-sense reforms have now been proposed by 
the FCC in several infrastructure-related Notices approved without 
dissent at the Commission's most recent meeting.\8\ Others, including 
freeing up critical radio spectrum currently licensed to the Federal 
Government, are part of the proposed MOBILE NOW Act.
---------------------------------------------------------------------------
    \8\ See FCC, April, 2017 Open Commission Meeting, April 20, 2017, 
available at https://www.fcc.gov/news-events/events/2017/04/april-2017-
open-commission-meeting. (Statements of Comm. Clyburn, concurring)
---------------------------------------------------------------------------
    Happily, many of the best ideas would cost little or nothing in 
taxpayer dollars. But they do require your leadership to break long-
standing logjams across government.
    In considering how best and most effectively to close the remaining 
availability and adoption gaps, my overall advice to this Committee is 
to learn from the successes and failures of previous Federal and local 
efforts, notably the 2009 American Recovery and Reinvestment Act--the 
last major Federal investment in infrastructure rebuilding and 
expansion.\9\
---------------------------------------------------------------------------
    \9\ H.R. 1--111th Congress: American Recovery and Reinvestment Act 
of 2009.
---------------------------------------------------------------------------
    Many of the broadband-related initiatives in the stimulus bill 
significantly improved broadband availability for those living in 
rural, mountain and tribal areas, where competitive private investment 
for ultra-high speed wired infrastructure remains difficult to cost-
justify. But there is also little argument that, due not to cost but to 
poor management and unfocused objectives, far too much of the billions 
in stimulus dollars committed to this effort failed to help anyone.\10\
---------------------------------------------------------------------------
    \10\ See, e.g., Testimony of Ann C. Eilers, Principal Assistant 
Inspector General, DOC OIG before the House Energy & Commerce 
Committee's Subcommittee on Communications and Technology, Is the 
broadband stimulus working?, Feb. 27, 2013, available at https://www
.oig.doc.gov/OIGPublications/OIG-13-017-T.pdf; Government 
Accountability Office, Recovery Act: USDA Should Include Broadband 
Programs Impact in Annual Performance Reports, June, 2014 at page 22; 
Tony Romm, Wired to Fail, Politico, July 28, 2015, available at http://
www.politico.com/story/2015/07/broadband-coverage-rural-area-fund-
mishandled-120601.
---------------------------------------------------------------------------
    The bottom line is simple: Accelerating deployment and adoption of 
broadband infrastructure for disconnected Americans will require some 
Federal spending. But the spending needs to be done in a more focused 
and professional way than in the past to reach those who really need 
help.
    And those efforts can be multiplied by encouraging the update of 
state and local processes, which in turn will provide incentives for 
private investors to reallocate their own capital in ways that 
ultimately benefit everyone.
Recommendations
  1.  Limit and carefully control direct investments. Any direct 
        infrastructure spending Congress approves should be targeted 
        exclusively to the few remaining census tracts, mostly rural 
        and tribal, where there is currently no competitive broadband 
        service. Congress should consider setting aside a modest 
        portion of its proposed infrastructure fund, say $20 billion, 
        for a one-time rural broadband acceleration program.

     Network operators would be offered subsidies to build out in these 
        extremely high-cost areas, with a requirement to use 
        technologies with sufficient bandwidth to support substantial 
        future growth, perhaps up to 100 Mbps speeds. Calculation of 
        specific subsidies should be made on a per-location basis, 
        determining as precisely as possible how much is needed to 
        overcome otherwise prohibitive build-out costs.

     Funds for the acceleration program, moreover, should come from 
        general appropriations rather than raising the already-
        unsustainable fees consumers pay into the Universal Service 
        Fund, which today represents a 17.4 percent cost added to voice 
        services.\11\
---------------------------------------------------------------------------
    \11\ See FCC, Contribution Factor and Quarterly Filings--Universal 
Service Fund Management Support, available at https://www.fcc.gov/
general/contribution-factor-quarterly-filings-univer
sal-service-fund-usf-management-support.

     To avoid problems that plagued the Recovery Act's scattered 
        broadband initiatives, moreover, the acceleration program 
        should be managed by one agency, with strict controls to help 
        ensure troubled projects get attention (or cut off) sooner 
        rather than later. Between the National Telecommunications and 
        Information Administration, Rural Utilities Service, and the 
        FCC, there is consensus that the FCC does the best job at 
        maximizing its deployment-related funds, and should be the sole 
        agency responsible for the acceleration fund, albeit with added 
---------------------------------------------------------------------------
        controls to reduce waste and abuse.

  2.  Severely limit ongoing support. To date, Federal efforts to 
        overcome the financial hurdles to deploying rural broadband 
        infrastructure have suffered from a structural flaw. The FCC 
        provides payments in the form of small ongoing annual 
        subsidies, even in areas when all that was needed to overcome 
        high infrastructure costs was an initial capital investment. 
        Because of this approach, it can take years for providers to 
        recoup their own capital investments, unintentionally 
        encouraging operators to build piecemeal in rural areas, and to 
        make decisions based on what providers believe the government 
        will fund rather than on what consumers want.

     Future investments should avoid this error by offering instead 
        carefully-calculated one-time subsidies. This will save 
        billions in ongoing costs. While some truly high-cost areas 
        will continue to need both start-up capital and operating 
        support, the emphasis for any new rural broadband 
        infrastructure spending should be on those locations for which 
        capital alone can overcome the need for further government 
        subsidy. This will deliver the most bang for scarce taxpayer 
        bucks.

     After determining the optimal per-location subsidy needed, the 
        government may find there are more providers willing to build 
        in underserved rural and tribal areas than there are funds to 
        support them. If so, the FCC should be authorized to run a 
        reverse auction among competing providers to bid down the per-
        location cost.\12\
---------------------------------------------------------------------------
    \12\ See Blair Levin and Carol Mattey In Infrastructure Plan, a Big 
Opening for Rural Broadband, Brookings Institution, Feb. 13, 2017, 
available at, https://www.brookings.edu/blog/
the-avenue/2017/02/13/in-infrastructure-plan-a-big-opening-for-rural-
broadband/.

     The FCC has already proposed such a solution to improve the 
        efficiency of existing universal service programs, with the 
        goal of letting market forces deliver ``the best deal 
        available'' to maximize limited funds.\13\
---------------------------------------------------------------------------
    \13\ FCC, In the Matter of Connect America Fund Universal Service 
Reform--Mobility Fund, WC Docket No. 10-90. March 7, 2017, available at 
https://apps.fcc.gov/edocs_public/attachmatch
/FCC-17-11A1.pdf.

  3.  Extend ``Dig Once.'' Lack of coordination between broadband and 
        other infrastructure projects wastes time and resources, 
        particularly when roads are being built or maintained. It is 
        essential that we fully embrace a ``Dig Once'' rule, requiring 
        installation of conduits for broadband equipment whenever roads 
        are being dug up for any reason. According to the Government 
        Accountability Office, ``Dig Once'' can reduce the cost of 
        deploying fiber under highways in urban areas up to 33 percent 
        and up to 16 percent in rural areas.\14\
---------------------------------------------------------------------------
    \14\ See Letter from Government Accountability Office, June 27, 
2013, available at http://www.gao.gov/assets/600/591928.pdf.

     At least two bills circulating in Congress now would expand 
        existing ``Dig Once'' policies.\15\ Dig Once should also be 
        extended to state roads, and to all public rights of way 
        adjoining roads.\16\
---------------------------------------------------------------------------
    \15\ See, e.g., MOBILE NOW Act, S.19, 115th Congress (2017-2018); 
Broadband Conduit Deployment Act, H.R. [  ], 115th Congress (2017-
2018). Similar provisions were proposed in the Streamlining and 
Investing in Broadband Infrastructure Act, S. 2163, 114th Congress 
(2016-2017).
    \16\ A coalition of public policy think tanks wisely recommended at 
a recent hearing that the policy be expanded to state roads, and to all 
public rights of way adjoining roads. Available at http://
docs.techfreedom.org/
Letter_EC_Hearing_on_Dig_Once.pdf?ct=t%28PR_LabMD_Amicus_
January_20171_4_2017%29&mc_cid=87bf010f7a&mc_eid=fb2145b79f.

  4.  Address other unproductive barriers to mobile deployments. On the 
        mobile side, the good news for local authorities is that 5G 
        networks will rely not on macro cell towers so much as small 
        cell sites, with small, low-power antennae that can be attached 
---------------------------------------------------------------------------
        to existing poles and on buildings.

     There will, however, be an explosion of such installations, 
        significantly increasing the pressure on local authorities to 
        review and approve applications. To ensure U.S. dominance in 5G 
        deployment, network operators will need authorities to use 
        predictable criteria, reasonable and consistent terms, and 
        proportionately quick time frames for review.

     Local authorities should of course retain the ability to ensure 
        public safety of new equipment, but much of the sometimes 
        permanent delay operators already experience in managing 
        applications has little if anything to do with legitimate 
        public policy concerns. As former FCC Commissioner Robert 
        McDowell recently cataloged, investments are increasingly being 
        held up by ad hoc or outdated processes, unrelated turf wars, 
        and petty corruption.\17\
---------------------------------------------------------------------------
    \17\ Robert McDowell, Clearing the Barriers to Critical 
Communications Infrastructure, Mobile Future (April 20, 2017), 
available at http://mobilefuture.org/clearing-the-barriers-to-critical-
communications-infrastructure/

     At a minimum, Congress should establish Federal guidelines to 
        eliminate unnecessary bickering over pole attachments, 
        especially for poles that are municipally-owned or owned by 
        regulated utilities. To avoid rent-seeking behavior that grinds 
        the process to a halt, we need cost-based attachment fees, 
        ``climb-once'' policies, and basic rules about notice and 
        contractor qualifications. Network operators should not be 
        penalized in either time or money for replacing or upgrading 
        small cell equipment--applications that are often treated as 
---------------------------------------------------------------------------
        full-scale installations of new towers.

     The FCC has already begun the process of establishing more 
        aggressive shot clocks and ``deemed approved'' rules, but 
        Congressional action on these common-sense improvements would 
        be easier to sustain over likely legal challenges.\18\
---------------------------------------------------------------------------
    \18\ FCC, In the Matter of Accelerating Wireless Broadband 
Deployment by Removing Barriers to Infrastructure Investment, WT Docket 
17-79 (April 27, 2017), available at http://transi
tion.fcc.gov/Daily_Releases/Daily_Business/2017/db0330/
DOC344160A1.pdf?ct=t(PR_LabMD_
Amicus_January_20171_4_2017)&mc_cid=10c138d1f0&mc_eid=fb2145b79f; FCC, 
In the Matter of Accelerating Wireline Broadband Deployment by Removing 
Barriers to Infrastructure Investment, WT Docket 17-84 (April 27, 
2017), available at http://transition.fcc.gov/Daily_Releases/
Daily_Business/2017/db0330/DOC-
344161A1.pdf?ct=t(PR_LabMD_Amicus_January_20171_4_
2017)&mc_cid=10c138d1f0&mc_eid=fb2145b79f; City of Arlington v. FCC, 
133 S.Ct. 183 (2013).

  5.  Re-engineer government processes that hinder private investment. 
        Beyond pole and building access issues, both wired and mobile 
        deployment is being held back unnecessarily by unproductive 
        costs associated with dealing with slow and overly bureaucratic 
        local governments. The problem is not so much local regulations 
---------------------------------------------------------------------------
        as it is local processes--or often, the lack thereof.

     As Google Fiber's unique approach to selecting its markets has 
        shown, commitment to efficient permitting and deployment 
        strategies by local authorities can prove decisive in which 
        cities get new private infrastructure investment and which ones 
        do not.\19\ Simply providing a single point of contact within a 
        local government can make a big difference in both speed and 
        cost of deployment, along with access to city property and 
        streamlined zoning processes. If inspectors don't show up when 
        promised, moreover, an entire project can be stalled at 
        enormous expense.
---------------------------------------------------------------------------
    \19\ See Larry Downes, U.S. Digital Infrastructure Needs More 
Private Investment, Harvard Business Review, Oct. 14, 2016, available 
at https://hbr.org/2016/10/u-s-digital-infrastructure-needs-more-
private-investment.

     Both municipal employees and installers would also save a great 
        deal of time by moving from individualized permits to a single 
        project-based permit. The individual permits repeat much of the 
        same information, putting a strain on resource-challenged 
        planning departments to evaluate redundant information, slowing 
---------------------------------------------------------------------------
        down reviews with no benefit.

     Local governments must be cured of the bad habit of holding 
        approvals hostage until broadband providers agree to pay for 
        unrelated public works, such as repairing streets even where no 
        work is being performed. This is an inefficient solution to 
        local funding problems, one that disproportionately impacts 
        costs for broadband consumers.

     Especially given the coming explosion of small cell deployments, 
        there is widely-held consensus that outdated and overly 
        bureaucratic local processes are particularly holding up 
        deployment of mobile infrastructure, a problem that is 
        guaranteed to get much worse if positive steps are not taken 
        soon.

     A few years ago, I discovered first-hand just how chaotic and ad 
        hoc local approaches can be. A mobile provider applied for 
        permission to install a handful of new low-power antennae on 
        existing utility poles in my small unincorporated Bay Area 
        town--equipment needed to improve 4G LTE service in the hills 
        just north of Berkeley.

     Though county officials were ready and able to review and decide 
        on the applications on a professional basis, doing so took over 
        a year, held up by free-for-all hearings of unrelated 
        committees and local advisory groups. These meetings were 
        regularly derailed by the misrepresentations of outsiders who 
        characterized the applications as being for new, full-size cell 
        towers, upsetting and misleading residents for no good 
        reason.\20\
---------------------------------------------------------------------------
    \20\ See Rick Radin, Kensington Gives Partial Approval to AT&T 
Antennas, The Mercury News, July 31, 2013, available at http://
www.mercurynews.com/2013/07/31/kensington-gives-partial-approval-to-
att-antennas/.

     These are especially frustrating and counterproductive 
        inefficiencies, ones that represent some of the most 
        unnecessary obstacles to accelerated broadband deployment. They 
        must be resolved quickly. 5G networks, once deployed, will be 
        truly competitive with very high speed and highly-reliable 
        wired networks. They will not only provide underserved areas of 
        the country with faster and cheaper broadband options, but will 
        take the mobile computing revolution to the next level for all 
---------------------------------------------------------------------------
        Americans, and at increasingly attractive prices.

     Best practices distilled from a long history of good and bad 
        examples should be established at the Federal level and 
        included in the infrastructure bill as conditions for local 
        jurisdictions to receive Federal assistance.

  6.  Make investments technology-neutral. For the most sparsely 
        populated and geologically challenging parts of the United 
        States, the economics of laying fiber-optic cable are unlikely 
        to make sense any time soon, even with subsidies. So the 
        question becomes not only what alternative broadband 
        technologies are best suited to rural and mountainous regions, 
        but how to encourage providers to continue developing and 
        deploying them.

     In many rural areas, for example, fixed wireless technologies have 
        proven themselves capable of providing high-speed last-mile 
        connections to homes and businesses, with the promise of even 
        better performance going forward. Satellite-based solutions 
        have also matured, as have hybrid fiber/copper technologies 
        using existing telephone lines.\21\
---------------------------------------------------------------------------
    \21\ Richard Bennett, Wireless First: A Winning Strategy for Rural 
Broadband, High-Tech Forum, April 11, 2017, available at http://
hightechforum.org/wireless-first-a-winning-strategy-for-rural-
broadband/.

     But up until now, Universal Service programs have either 
        explicitly or implicitly favored wired technologies, for 
        example by defining minimum broadband speeds above what is 
        reasonably necessary or by setting latency standards in a way 
        that intentionally excludes satellite-based solutions.\22\
---------------------------------------------------------------------------
    \22\ See Doug Brake, A Policymaker's Guide to Rural Broadband 
Infrastructure, Information Technology and Innovation Foundation (April 
2017), available at http://www2.itif.org/2017-rural-broadband-
infrastructure.pdf?mc_cid=4fb4705a17&mc_eid=98756dc702.

     No matter how the infrastructure bill provides for broadband in 
        the remaining unserved locations, it should do so on a 
        technology-neutral basis to encourage continued development of 
---------------------------------------------------------------------------
        new options.

  7.  Address nonfinancial causes of the digital divide. Though the 
        focus of this hearing is on obstacles to deployment, I want to 
        say a little about the equally important problem of adoption. 
        Again, there is broad consensus on both the problems and 
        common-sense solutions.

     As the most recent data from the Pew Research Project shows, we 
        are winning the battle to reduce broadband cost for those least 
        able to afford it. In addition to expanded Universal Service 
        programs and the shift from voice to broadband for Lifeline and 
        other programs, leading Internet providers, including Comcast, 
        AT&T and, recently, Sprint, have expanded programs aimed at 
        low-income families, signing up millions of new Internet users 
        for roughly $10 a month.\23\
---------------------------------------------------------------------------
    \23\ Larry Downes, The Digital Revolution Has Not Reached All of 
Us, The Washington Post, August 31, 2016, available at tps://
www.washingtonpost.com/news/innovations/wp/2016/08/31/the-internet-
revolution-has-not-reached-all-of-us/.

     As the adoption gap narrows, however, we need new strategies that 
        target different problems. Availability and price are no longer 
        the most significant factors holding back the 13 percent of 
        Americans who remain offline. Consistent with finding over the 
        last decade, the Pew Research Center noted recently that only 
        19 percent of offline adults cite the expense of Internet 
---------------------------------------------------------------------------
        service of owning a computer as a barrier.

     Instead, ``[a] third of non-internet users (34 percent) did not go 
        online because they had no interest in doing so or did not 
        think the Internet was relevant to their lives.'' Researchers 
        reported. ``Another 32 percent of non-internet users said the 
        Internet was too difficult to use, including 8 percent of this 
        group who said they were `too old to learn.' '' \24\
---------------------------------------------------------------------------
    \24\ Monica Anderson and Andrew Perrin, 13 percent of Americans 
Don't Use the Internet--Who are They?, Pew Research Report, Sept. 7, 
2016, available at http://www.pewresearch.org/fact-tank/2016/09/07/
some-americans-dont-use-the-internet-who-are-they/

     While income undoubtedly continues to play a significant role in 
        non-adoption, in other words, many who remain offline wouldn't 
        use the Internet even if it were free. This conclusion was also 
        reached by a recent NTIA survey, which found that over half of 
        those who don't have Internet service at home--again, largely 
        rural and older Americans, and those with less education--say 
        they just don't want or need it.\25\
---------------------------------------------------------------------------
    \25\ National Telecommunications and Information Administration, 
Digitally Unconnected in the U.S. Who's Not Online and Why?, Sept. 28, 
2016, available at www.ntia.doc.gov/blog/2016/digitally-unconnected-us-
who-s-not-online-and-why.

     Part of this resistance comes from the fact that unconnected 
        Americans don't know how to use a computer or even a 
        smartphone, let alone how to install and maintain networking 
        equipment inside or outside their home. So whatever funding the 
        infrastructure law provides for broadband will be wasted if 
        some of that support isn't directed to providing hands-on 
        education and on-going support. Community groups and senior 
---------------------------------------------------------------------------
        centers are natural conduits for these essential services.

  8.  Use the bully pulpit to encourage digital want-nots. Given the 
        Internet's growing importance for education, health care, jobs, 
        and civic engagement, there is also agreement that non-adopters 
        are simply and tragically wrong in thinking broadband isn't 
        relevant to their lives.

     It is, therefore, incumbent on those of us already enjoying the 
        benefits of the digital revolution to employ creative new 
        approaches to convincing them to join us. Solving the training 
        and support issues of the least tech-savvy users will go a long 
        way to overcoming potent inertia, but it won't fully answer the 
        relevance problem. Digital want-nots also need to understand 
        the value of getting online.

     These include the obvious benefits of connecting to family and 
        friends and expanding entertainment options. But there are more 
        fundamental ways emerging technologies, including the Internet 
        of Things and smart homes and communities in particular can 
        improve quality of life, especially for seniors hoping to age 
        in place in their homes.

     Many of these benefits were vividly described in the later 
        chapters of the National Broadband Plan, but neither the FCC 
        nor the White House used the Plan effectively to promote a 
        vision of tomorrow that would make getting online today 
        irresistible.\26\
---------------------------------------------------------------------------
    \26\ Following the Plan's publication, the focus for policy leaders 
in and out of the FCC was on the spectrum crisis the Plan identified--
alarms that Congress, the FCC, and network operators have so far 
responded to admirably.

     Public education about why the infrastructure bill is spending 
        money on broadband will be critical to getting maximum value 
        from any new investment. That effort should include, at a 
        minimum, the White House and related Departments including 
        those dealing with commerce, housing, health, energy and 
---------------------------------------------------------------------------
        education.

     The FCC should be tasked with coordinating the public outreach, 
        and for working with start-ups and established companies 
        developing the most exciting and relevant applications and 
        their respective trade groups in public-private partnerships.

     Much as organizations such as the Consumer Technology Association 
        put on local trade shows for government officials, the FCC 
        should develop visionary presentations about our broadband 
        future. Then, the Commission should take it on the road, in the 
        form of high-impact mini-trade shows, helping those who don't 
        believe in the value of connectivity see and hear first-hand 
        what it is they are missing already and what's ahead in the 
        near-future.

    Following these basic recommendations will maximize the value of 
any taxpayer money spent on broadband infrastructure. Even more, these 
simple steps will help multiply government spending with continued 
private investment, accelerating efforts to close the digital divide 
and bring the least-connected parts of the country into our growing 
digital conversation.
    In Silicon Valley, that's what we call a win-win-win.
    I am happy to expand on any of these points, and look forward to 
your questions. Thank you.

    The Chairman. Thank you, Mr. Downes.
    Mr. Hendricks.

                STATEMENT OF BRIAN M. HENDRICKS,

          HEAD OF TECHNOLOGY POLICY AND PUBLIC AFFAIRS

           FOR THE AMERICAS REGION, NOKIA CORPORATION

    Mr. Hendricks. Thank you, Chairman Thune, Ranking Member 
Nelson, and members of the Committee. Thank you for the 
invitation to share Nokia's thoughts on how to encourage 
broadband deployment. As the Chairman mentioned, I am an alum 
of the Committee and had occasion to exchange notes with 
Senator Hutchison yesterday; she sends her regards to all of 
you. I also got the impression she thought this might be comic 
retribution for all the hearings I made her sit through.
    [Laughter.]
    Mr. Hendricks. So please be kind.
    We commend the Committee for your work on the MOBILE NOW 
Act. Nokia is very supportive of that legislation, particularly 
the spectrum provisions. We think that this and your continued 
interest in creating spectrum opportunities are important in 
building a foundation for investment in the technologies that 
will enable a truly connected society.
    The good news, as Professor Downes mentioned, is we have 
excellent broadband networks in the United States, they are 
just not deployed everywhere we want them, and they will 
require massive investments in order to evolve further in 
support of the use cases that we are contemplating for the 
connected programmable world. These include things like 
connected health care, intelligent transportation, and smart 
cities.
    As I note in my written testimony, the technical challenges 
we face in supporting emerging demands are considerable. We 
will need peak data rates to get much higher. We will need to 
drop latency, which is the delay in transmission in networks, 
to near zero to ensure that applications with no-fault 
tolerance, like autonomous driving vehicles and remote medical 
treatment will work reliably. The size and cost of the 
infrastructure we deploy must be smaller, while at the same 
time delivering higher functionality, such mobile edge 
computing and analytics.
    Tens of billions of dollars of investment is required in 
research and development and in the deployment of new 
infrastructure and software to grow capacity and coverage of 
our networks. Many different technologies, including Wi-Fi, 
multiple generations of wireless networks, and satellite must 
work together to form a comprehensive technology framework.
    The good news is there are hundreds of entities large and 
small willing to make this investment. We need to help assure 
that their intentions become the reality. We need to think very 
carefully about regulatory policies and understand their impact 
on the cost of deployment and the type of returns investors can 
realized on those deployed assets.
    Rational actors don't make uneconomic investment. So key to 
encouraging investment will be ensuring an opportunity for 
innovative products, pricing, and new revenue sources. We need 
to avoid policy shocks that disrupt planned investment, such as 
making changes to the tax code, such as those proposed in the 
House. I mentioned this more extensively in my testimony, but 
the single greatest impediment to broadband infrastructure 
investment that this Congress could conceive would be to adopt 
limitations to interest deductibility.
    Many providers of broadband services use the debt market to 
finance their acquisition and deployment of technology, and 
tens of billions of dollars will ultimately drained out of that 
opportunity. We recognize that the tax reform you're looking at 
is a comprehensive set of tradeoffs. We recommend highly that 
that not be one of them that you consider.
    We need to continue finding ways to improve access to 
Federal land and assets. Whether you're a fan of shot clocks or 
would prefer other avenues to streamline the process, such as 
requiring agencies to permit multisite applications to allow 
for the reduction of duplicative impact studies and reduce 
legal costs, it's clear more can be done. We're encouraged by 
the Committee's work in this area, and we follow the 
developments quite closely, including many of the ideas that 
Senator Heller has recently put forward.
    In addition, we need the FCC to move forward aggressively 
with its proceeding on siting challenges and to use its 
Broadband Deployment Advisory Committee as a place to bring 
together stakeholders, including industry, states, cities, and 
towns, to identify the best practices and a plan for 
replicating them in jurisdictions across the country. It would 
be beneficial for Congress to clarify and bolster the authority 
of the FCC, particularly as it relates to the range of 
structures and locations covered under Section 253 of the 
Communications Act and the reasonableness of fees and charges. 
We note there are several ways to do that, any one of which can 
greatly improve upon our recent experience.
    We should continue to refine programs within congressional 
and Federal purview that can assist with the affordability of 
certain infrastructure deployments and ultimately end-user 
connections.
    Nokia would like to see broadband as a focus in the 
upcoming infrastructure bill, and we would encourage you to 
prioritize funds toward early deployments of IoT verticals like 
smart city, connected and intelligent infrastructure, and 
connected health care. We think that doing so will help 
considerably with the demonstration of the value proposition to 
broadband consumers and improve adoption rates. Higher uptake 
is a key way to improve the business case for broadband 
deployment, particularly in rural areas.
    Finally, let me say that Nokia has frequent interaction 
with stakeholders across the country. As we worked in support 
of FirstNet's outreach to states and to ascertain the 
availability of infrastructure for that massive undertaking, we 
learned a great deal about who is investing in broadband 
technology, the state of the infrastructure, and how investment 
decisions are made.
    As you consider ways to address the challenges of rural 
broadband deployment, I would encourage you to make sure you 
continue hearing from those that face those challenges most 
directly. They often do not have Washington offices, and they 
may come here once or twice a year, but co-ops, as one example, 
provide broadband coverage to 40 percent of the Nation's land 
mass with only 5 percent of its population. Understanding the 
solutions necessitates understanding the problems. We think 
they can offer some critical insights and should be part of 
this conversation.
    Thank you. I would be happy to answer any of your 
questions.
    [The prepared statement of Mr. Hendricks follows:]

Prepared Statement of Brian M. Hendricks, Head of Technology Policy and 
       Public Affairs for the Americas Region, Nokia Corporation
    Chairman Thune, Vice Chairman Nelson, and members of the Committee. 
Thank you for the opportunity to share Nokia's thoughts about ways to 
encourage and improve broadband deployment in the United States.
Nokia
    Nokia is a leading innovator in the technologies that connect 
people and things. With business activities in more than 125 countries, 
we are driving the transition to smart, virtual broadband networks and 
connectivity by creating one single network for all services. We are 
converging mobile and fixed broadband, IP routing and optical networks, 
with the software and services to manage all of these technologies. 
Supporting Nokia's comprehensive connectivity portfolio is a world-
class research and development program led by the award winning U.S. 
based Nokia Bell Labs, and with additional R&D centers in the United 
States, Europe, and Asia. Nokia invested more than $5 billion in R&D 
during 2016, adding to a portfolio that now exceeds 90,000 patents. Our 
researchers and engineers continue to develop technologies that will 
transform the way people and things communicate and connect, including: 
5G wireless technology, ultra broadband access, IP and Software Defined 
Networking (``SDN''), Cloud applications, IoT and security solutions, 
data analytics, and sensor and imaging technology that will be widely 
utilized in IoT applications.
    Nokia is also a major facilitator of the emerging Internet of 
Things (``IoT'') market through our ``ng Connect'' program. With 
Nokia's ``ng Connect'' program, we have built an ecosystem of more than 
300 members including leading network, consumer electronics, 
applications, and content providers. The IoT community of the ng 
Connect program brings innovative companies together to collaborate on 
solution concepts, end-to-end prototypes, business models, and market 
trials that will unleash the full potential of the IoT.
Broadband Deployment in the United States
    The United States is fortunate to have very good broadband 
networks, particularly with respect to wireless broadband. However, as 
noted by many researchers, in spite of considerable Federal and state 
policy efforts over the last decade, we have not been able to deploy 
truly high-speed broadband capability ubiquitously throughout the 
country. There are persistent, known challenges underlying this 
reality. Therefore, it is timely to take a fresh look at this issue as 
the Committee is now doing. Nokia commends the Committee for its work 
on the MOBILE NOW Act. This legislation, once enacted, makes critical 
changes to siting of infrastructure on Federal land with improved 
access to rights-of-way, and further directs the FCC and NTIA to work 
on a range of spectrum that is critical to mobile broadband 
development. We see this legislation as a critical step forward and 
urge its prompt passage. Importantly, Congress continues to hear about 
spectrum policy from industry groups. The reason is that the need for a 
predicable, flexible supply of spectrum for broadband use, across a 
range of bands, is a foundational element of the connected society. It 
is not a subject that can be addressed in one bill and then 
deprioritized. We encourage you, the FCC, and NTIA to continue your 
aggressive work on spectrum policy.
    We stand at a very important moment with a huge leap forward in 
technology applications and services emerging at a rapid pace. Once 
relegated to the confines of science fiction novels, ideas like 
autonomous driving vehicles are no longer distant aspirations. As we 
look at the near and mid-term, Nokia believes that there will be 
substantial advancement in the areas of connected health care, 
intelligent transportation and infrastructure, and Smart Cities among 
others. Augmented and virtual reality, machine-to-machine 
communication, remote diagnostic medicine and perhaps even a tactile 
Internet, with instantaneous feedback to a user enabling things like 
remote surgery, being among the possibilities. More of our learning, 
commerce, health care delivery, and daily living will take place via a 
broadband connection, making the availability of high quality, 
affordable broadband a necessity for modern living now more than at any 
time in our history. We have not fully addressed the so-called digital 
divide with current generations of technology, so there is a danger 
that the divide will not only persist, but could actually widen. If 
more commerce, learning, and quality of life enhancing activities like 
health care take place in a digitized context, and people in some areas 
of the country lack access to a connection, the divide between users in 
different geographies and socio-economic strata will grow. Fortunately, 
there are opportunities to engage this challenge.
    To place the technical challenges ahead of us in context, consider 
that Nokia believes that we will see a more than 10,000 fold increase 
in the amount of traffic on networks over the next 5-10 years resulting 
from deeper penetration and uptake of mobile broadband, dramatic 
increases in connected devices and machines, the expansion of the 
industrial Internet, and connected transportation and health care among 
other applications. On the mobile broadband side, we believe that in 
order to accommodate the increase in traffic and the sensitivity of 
many emerging applications like autonomous driving cars and connected 
healthcare, network peak data rates will need to increase to more than 
10 Gbit/sec (gigabytes per second) with at least 100 Mbit/sec 
everywhere in the network. For perspective, reaching that type of peak 
data rate would require a jump potential a hundred or more fold from 
where we are today in many deployed networks.
    The massive increase in capacity, and in coverage, needed to create 
a network environment capable of the foregoing will require substantial 
investment in infrastructure, particularly small cells and distributed 
antenna systems to ``densify'' network deployments. Densification of 
networks is a core strategy to elevate capacity and capability of 
wireless networks in order to reach latency (delay in packet 
transmission) levels below 1 millisecond, which will be necessary for 
many future use cases. For context, reported latency rates in U.S. 
wireless networks during 2016 ranged from a low of 60 milliseconds in 
LTE networks to a high of 163 milliseconds in older 3G networks.\1\ 
These are fast networks, and they do a great job of providing reliable 
wireless broadband service to consumers that support the voice, text, 
and video services for which they were designed. But, it is clear that 
significant upgrades are needed to reach a reality where zero fault 
tolerance applications like autonomous vehicles can be widely deployed.
---------------------------------------------------------------------------
    \1\ See e.g., Comparisons of networks drawn from mobile subscribers 
at https://opensignal.com/reports/2016/02/usa/state-of-the-mobile-
network/. Industry figures vary, and in many cases suggest even lower 
latency figures that continue to improve as additional investment is 
made.


---------------------------------------------------------------------------
    Nokia view of 5G wireless network conditions and requirements

    The good news is that wireless carriers, large and small, in the 
U.S. are prepared to make the necessary investment and meet the 
challenge. In fact, broadband providers of all kinds including cable 
companies, utilities, municipalities, and cooperatives (which are an 
essential part of the rural broadband strategy) all stand ready to 
invest significantly in broadband infrastructure to support the 
foregoing vision of a connected society. However, the decisions made by 
regulators and legislators at the state level, and here in Washington 
will have a significant impact on their collective ability to deploy 
and continuously upgrade broadband infrastructure. Based on our 
experience as a major partner for companies and communities that deploy 
broadband technology, Nokia believes that there are three key things 
that policymakers need to be mindful of in fashioning regulatory and 
legislative actions if the true objective is to create an environment 
conducive to robust investment:

  (1)  Regulatory policy impacts the ability of providers to monetize 
        infrastructure investment and can be a major driver of costs 
        and delays in broadband infrastructure deployment;

  (2)  The relative health of the investment environment for broadband 
        infrastructure is heavily influenced by regulatory activities 
        as noted, but also by fiscal policy actions Congress may 
        undertake such as an infrastructure bill and comprehensive tax 
        reform; and

  (3)  Emerging use cases are both a driver of broadband network 
        requirements and consumer interest in, and adoption of the 
        technology. Adoption rates are a key component of the business 
        case for major infrastructure investment, particularly in rural 
        and underserved areas. Industry and policymakers can do more to 
        shape consumer expectations and uptake of the technology.
Regulatory policy impacts
    Over the last several years we have seen a major focus on 
regulatory policies like privacy and network neutrality here in 
Washington. These are important issues with a real need for clear 
standards and rigorous, predictable enforcement to provide consumers 
critical protections. Unfortunately, they have also become a source of 
considerable uncertainty for markets. Nokia is not a broadband service 
provider, so when we look at issues like these it is to discern how 
rules and restrictions will shape the scope of our ongoing research and 
product development (such as research demand for additional computing 
power and analytics capabilities in our infrastructure solutions), and 
the market for broadband infrastructure more generally. And, there is a 
clear impact in our experience.
    In the case of the FCC's now repealed broadband privacy rules, 
limitations on broadband service provider access to, and utilization of 
data that is routinely available to other technology companies in the 
ecosystem directly limited the capability of broadband providers to 
realize potential value creation opportunities in the future. And, that 
alters the value calculation that providers make in determining 
whether, and how much to invest in certain technologies. In the same 
way, the ex ante prohibition of innovative pricing models (for example 
fee based prioritization directly at the consumer's direction) under 
the net neutrality rules, and the inclusion of a nebulous ``general 
conduct standard,'' in our judgment created a significant risk to 
broadband provider investment. The prohibition on new pricing options 
and the general conduct rule make any significant deviations from 
current practices in traffic management, data plan pricing, or creation 
of specialized services risky from a legal and regulatory standpoint. 
Those risks have been a regular discussion point between broadband 
providers and their suppliers, and have directly impacted product 
discussions including whether to continue developing specific features 
in new products and whether to move forward with specific deployment 
plans. Along with an observable decline in capital expenditures in the 
last two years, these developments are a clear indication of a negative 
impact on investment from the regulation.
    My purpose in raising these two issues, which I understand to be 
the subject of very passionate debate, is not to make a normative 
judgment about what the FCC did, or should do, or even what Congress 
should do. Rather it is to bring the conversation to a point where 
there is an understanding that regulatory choices directly impact the 
decision making of private actors, and ultimately how capital 
expenditure decisions are made. To put a finer point on this, we note 
that there is a frequent focus on profit and loss statements of 
telecommunications providers in these debates: wherein we hear that 
profits are healthy therefore investment will continue to happen and 
regulatory factors have not impeded capital deployment. In our 
experience, profit is frequently not an accurate, or at least not a 
complete, barometer of the health of the investment environment. 
Indicators like average revenue per user (ARPU) and return on capital 
employed (ROCE) are more tightly linked to the investment decisions of 
broadband providers because they are measures of how well a provider is 
monetizing prior capital investment and what the returns on planned 
investment will be. When policy shocks occur, they directly impact the 
forecasts that providers have relied on in making capital decisions, 
and those decisions are then altered. Since the adoption of the network 
neutrality order in 2015, the ARPU of all but one U.S. wireless carrier 
has declined as opportunities to introduce new sources of revenue were 
constrained.\2\
---------------------------------------------------------------------------
    \2\ See https://www.statista.com/statistics/283513/arpu-top-
wireless-carriers-us/
---------------------------------------------------------------------------
    Whatever position one takes on the issues of privacy and net 
neutrality, and we take none here; restrictions on the ability to 
generate marginal revenue through certain innovative activities like 
data analytics and prioritization invariably impact the capital 
expenditure decision making because they limit the ability to fully and 
flexibly monetize marginal infrastructure investment. There is a range 
of very reasonable opinion about these issues. Our hope is that as 
Congress considers these issues moving forward, it will do so with 
careful deliberation on how a legislative solution (which we strongly 
favor) will balance consumer protections with the impact to the capital 
decision making of the very providers we want to invest in improving 
connectivity.
    State and local: Regulatory issues at the state and local level 
will also impact the ability to deploy broadband infrastructure at 
levels necessary to realize the vision for a connected society. As I 
noted earlier, the next generation networks will depend on a massive 
deployment of new infrastructure. The need for this increased wireless 
infrastructure, and other necessary broadband infrastructure 
investment, has already reached a critical level. Unfortunately, Nokia 
has experienced first-hand the frustration of local coverage needs 
being thwarted by local siting practices. Common problems fall into 
several related, and overlapping categories, as follows:

   Undefined laws and processes and/or a lack of personnel;

   Redundant, fragmented procedures; and

   Onerous and prohibitive fees

    In our experience, many jurisdictions have ill-defined processes 
for receiving and processing requests to site infrastructure. The lack 
of defined procedures leads to inefficiencies and haphazard results. We 
have found that jurisdictions that lack defined procedures are often 
not familiar with the legal landscape intended to remove barriers to 
deployment. As an example, although some larger cities are experienced 
with Section 6409(a) of the Spectrum Act, even those jurisdictions 
typically have not revised their processes to incorporate that law. 
Actions that qualify for 6409(a) streamlined treatment, nevertheless 
can be delayed by localities seeking modified lease terms, for 
instance, when attempting to negotiate a master agreement or franchise 
license prior to requesting regulatory siting approvals. Many local 
governments are using these master agreements as a substitute for a 
more comprehensive legal framework (effectively creating a de facto 
zoning ordinance via contract).
    The lack of clear procedures makes the application process much 
more difficult from the beginning--it can be hard to know where to even 
start--let alone ultimately obtaining the required authorization to 
move forward. It is therefore not surprising that jurisdictions that 
suffer from ill-defined, haphazard processes also lack the employee 
resources to process siting requests. We understand that local 
jurisdictions often face budgetary constraints, however, lack of 
employee resources exacerbates a number of other impediments. Each 
unnecessary extra step (or steps) in the process that should result in 
modest delays can clog the deployment pipeline entirely when coupled 
with a lack of government personnel. In most cases, the overwhelming 
majority of the time necessary to deploy a small cell has nothing to do 
with the process for acquiring the equipment, installing it, or 
connecting it to power and backhaul: it is time spent obtaining review 
and approval.
    In addition to process and personnel limitations, Nokia often 
experiences multi-layered review processes involving several agencies 
within a jurisdiction. This leads to review and approval timelines that 
are not easily discernable from one authority or interdepartmental 
agency to the next. In one major city example, the process is fairly 
well defined, but involves three or four different phases, which occur 
in seriatim instead of concurrently. While review times should be in 
the 90-day range, approval often takes double that, layering delay on 
top of delay. Depending on the number of site applications that are 
under review with the government, at any given time, the timelines to 
approval for the initial application can challenge the viability of the 
entire deployment.
    Fees that are assessed for initial access, recurring access, and 
things like regulatory site inspections can threaten the economics of 
an entire deployment. Nokia, and our partners, have experienced site 
``inspection fees'' of $3,000 or even $4,000 applicable to each 
location. These per-location fees are particularly outrageous when put 
in the context of hundreds, or even thousands, of small cells planned 
for a single deployment. Many localities lack personnel to inspect 
individual macro-cell (large, frequently tower based) sites; so, the 
timeframes and expense that would be applied to small cell deployments 
under the current approval framework is a major concern. Notably, the 
$3,000-4,000 fees do not include other application fees and recurring 
fees associated with accessing the location.
    The fee problem is further exacerbated by an emerging cottage 
industry of third party consultants who see the complexities of 
citywide deployments as a business opportunity, becoming a middleman. 
The goal of the consultant is often not to maximize connectivity, but 
rather to maximize city revenues. Consulting agreements also frequently 
provide broad marketing and management services rights that include 
revenue sharing options with the locality based on the lease terms that 
the third party is able to negotiate with the carrier. Nokia has recent 
experience with this problem. Consultants frequently enter the mix in 
preparation for major events that lead to short-lived local economic 
development initiatives. From a business perspective, a service 
provider may plan to build for the longer term, with infrastructure 
intended to benefit a community long after the event is over. Yet 
consultants often push for higher fees for these temporary high profile 
projects, and the result is we do not achieve the type of long-term 
economic development that would better serve residents and businesses.
    Once higher fees are charged due to an event-specific deployment, 
those rates then become precedent, and set a rate floor for future 
deployments, not just in that particular city, but also in other 
locations where the consultants are working. In multiple cities where 
Nokia has participated in preparations for a short-lived event, we have 
found the elevated fees to be prohibitive and backed away from 
participation only later to see those elevated fees cited by 
consultants to localities as a benchmark for other longer term 
deployment projects.
    Nokia certainly understands that thinly staffed localities would 
turn to such consultants with promises of generating additional revenue 
for city activities. And, there is some value in the temporary use of 
third parties to process applications and negotiate rates in reducing 
delays from personnel shortages, provided that the third parties have 
experience in the issues involved and are truly temporary to deal with 
the short-term expected surge in applications for small cell 
deployments. The risk, however, is that the ultimate beneficiary of 
this arrangement is the consultant, and the citizenry loses through 
less robust deployment and higher subscription fees needed to support 
the expensive rights-of-way fees the consultant extracts. The 
introduction of a new layer of participant, the contracted consultant, 
with their own profit motivations skews the charges assessed against 
network operators and equipment vendors even further from the ``cost 
recovery'' level. Taken with the sheer number of small cells and 
distributed antenna systems (``DAS'') that are planned for 5G network 
densification efforts, the consultant-driven costs provide an almost 
insurmountable barrier to deployment in many jurisdictions.
    The use of consultants has moved well beyond the events context, 
and is now proliferating across a widening geography. As noted, these 
consultants have an incentive to drive up the fees assessed in each 
subsequent jurisdiction to leverage ever increasing fees for their own 
financial gain due to the nature of their retention agreement 
compensation terms. Each locality becomes the new benchmark for the 
next consulting contract, driving rates ever higher. Nokia believes 
that the FCC and Congress should view the hiring of such consultants to 
negotiate siting rates skeptically. This type of retention becomes 
counter to the objective of facilitating broadband deployment when win 
bonuses or other fee level based compensation are utilized. Nokia 
therefore has told the FCC in written comments to find that this type 
of compensation is not appropriate and may be a basis for applicants in 
impacted jurisdictions to obtain relief from the Commission. We have 
attached an example of marketing materials representative of the kind 
these consultants send out to cities as an exhibit. Revenue sharing and 
the maximization of revenues are featured prominently, to further our 
point.
    There are several additional challenges Nokia sees in the 
deployment of infrastructure, many of which have been noted to, and are 
being examined by, the FCC. These include: (1) total moratoria on 
deployments in some jurisdictions, (2) severe restrictions on the size 
of new equipment or the imposition of restrictions or new fees on 
modifications to existing deployments, and (3) utterly uneconomic per 
site access fees (initial and recurring charges) in many cases assessed 
on a per pole or point basis. Just some examples cited to the FCC in 
its previous proceeding looking at these issues:

Moratoria: An Illinois city has denied all permits to locate small 
cells along ROWs. Another city in that state is refusing to process 
permit applications until it can enact a new ordinance on small cells. 
A Florida county has a moratorium blocking all ROW installations. There 
could be as many as 17 other city or county moratoria in Florida.

Partial restrictions and arbitrary conditions:

   Texas city is refusing to allow any wireless facilities in 
        ROWs;

   New Jersey city requires a public bidding process to attach 
        facilities to utility poles but has failed to seek bids for 
        more than six months;

   Several California cities require providers to demonstrate 
        gaps in service coverage as a condition of ROW access;

   Florida city limits the number of small cell installations 
        (regardless of the number of providers) to 13 sites in one 
        square mile;

   Several Illinois jurisdictions impose minimum distance 
        requirements of up to 1,000 feet between small cell 
        installations, even when the installations serve different 
        wireless providers;

   Other jurisdictions impose limitations on the height of 
        poles that can house small cell infrastructure.

Fee examples:

   California city is demanding up to $20,000 in annual ROW 
        fees. Two other California cities charge ROW fees per pole of 
        over $1,000 per month and $2,300 per month respectively;

   A Massachusetts city requires a $5,000 up-front fee before 
        it will negotiate an ROW use agreement. Another city in that 
        state is demanding a $6,000 per pole annual fee;

   A Minnesota city is demanding a $6,000 annual per pole fee;

   An Oklahoma city charges more than $2,500 per year per small 
        cell;

   A company that holds a contract with New York to manage 
        wireless facilities is demanding fees of $9,000 per year for 
        small cells;

   The New Jersey Department of Transportation is requesting 
        $37,000 per year per for each new facility located in state 
        highway ROWs; and

   The Virginia Department of Transportation charges $24,000 
        per year for each new structure in state highway ROWs.

    From Nokia's perspective, it is quite clear that major Federal 
action is required to alleviate these barriers to deployment. The form 
of that action is no doubt going to be a contentious give and take with 
some preferring broad Federal preemption of state and local time, place 
and manner regulation and others suggesting we need to respect local 
autonomy. Nokia's view is that neither extreme is a good policy 
solution. It is quite true that states and localities have an interest 
in public health and safety and the use of their local regulatory 
authority to advance those interests. However, it is also quite clear 
that many practices, including those that I have cited, are conspiring 
to create an environment that is deeply adverse to the Committee's 
stated interest of broadband deployment. And, these practices are not 
isolated; they are spread across many states and localities of all 
shapes and sizes. So, what can be done about this? Nokia suggests the 
following:

   Highlight the broad benefits to the public that will come 
        with the densification of infrastructure deployments, things 
        that are not possible today but can be a reality in a connected 
        society. There is an excellent report from Accenture attached 
        to my testimony that further highlights this;

   Allow the FCC's refreshed proceeding on these issues to 
        proceed, and encourage the Commission to look at ways to 
        highlight not just the practices noted above, but also best 
        practices of local authorities. There are some that have been 
        very forward leaning in streamlining regulatory processes. Some 
        states have adopted comprehensive legislation and some 
        localities interested in Smart City deployments have worked to 
        streamline bureaucratic process. These should be examples that 
        we highlight;

    Notably, while Nokia supports state level legislation, we do not 
        believe that this is the optimal solution as a stand-alone 
        strategy. Network deployments are not planned on a city-by-
        city, or even state-by-state basis. Uniformity, efficiency, and 
        economic viability of broadband deployment likely require a 
        Federal solution;

   Congress should consider changes to the Communications Act, 
        particularly in Sections 253 and 332 that further clarify and 
        strengthen the FCC's authority to provide a backstop to 
        unreasonable local rules. Whether the result of the FCC's 
        process will be broadly applied shot clocks, fee limitations, 
        and other restrictions, or more of a model template of 
        practices backed by a case-by-case review and approval in the 
        event of unreasonable and non-compliant practices, it is clear 
        that something must be done.
Investment environment
    While awareness of how regulatory actions can impact the incentive 
and opportunity to invest is crucial, these are not the only policy 
considerations currently before this Congress that could impact the 
future of broadband deployment in the United States. The House of 
Representatives will consider comprehensive tax reform, likely later 
this year, and two proposals in particular that are part of those 
discussions could have lasting negative consequences for broadband 
investment. First, there is a policy proposal to limit or even 
eliminate interest deductibility for businesses. Second, there is also 
a policy proposal to impose border adjustment (so called import) taxes. 
Each of these would have a major impact on the financial decision 
making of broadband providers.
    The House suggestion to limit interest deductibility is married to 
another proposal, to change the period of so-called ``expensing'' or 
depreciation such that companies could expense 100 percent of the 
equipment up front rather than depreciating it over a longer period 
(typically 5-7 years in our industry). It is important to note that 
while beneficial, the move to the 100 percent expensing model does not 
change how much money a company may receive in a tax benefit, it simply 
shifts the money into an upfront time period. Companies will get the 
same tax benefit as under current law, just faster. By contrast, 
limiting or eliminating interest deductibility would eliminate billions 
of dollars worth of current tax benefit (and therefore money available 
for investment) permanently. Put in very simple terms, any entity that 
relies primarily on debt instruments to finance capital expenditure 
would see their net cost of borrowing increase due to the loss of 
interest deductibility. And that means less dollars, billions of them, 
for broadband infrastructure deployment.
    Critically, there are many entities currently involved in providing 
broadband services, from cable companies and utilities to cooperatives 
and privately held telecommunications companies that borrow to build. 
And when they borrow they do not do so for a single deployment, they do 
so for each capital deployment be it for upgrades or expansion of their 
network to cover new areas. Therefore, the loss of interest 
deductibility will impact those companies each time they tap the debt 
market. For many of these providers, funding investment entirely out of 
current revenues is not an option, nor is tapping the equity market by 
offering additional stock for sale. Many are not publicly traded, and 
among those that are, some cannot realistically dilute the value of 
their stock by releasing more shares. Debt financing has emerged as a 
widely employed, rational business approach. Upending that through tax 
reform will drain tens of billions of dollars out of future investment 
in broadband networks across utilities, cooperatives, small and mid-
sized telcos and many cable providers. While Nokia understands tax 
reform is a complex undertaking with many tradeoffs, we feel strongly 
this should not be one of them.
    There has likewise been significant discussion about the imposition 
of an import tax as much as 20 percent. As Congress considers tax 
reform, it is important to recognize how the current supply chain for 
broadband components and finished products is constructed. While the 
United States is home to many research facilities (including some of 
Nokia's), software development centers, and even component 
manufacturing, it is also true that many of the thousands of components 
that make up broadband infrastructure solutions originate outside the 
U.S. Current ITA agreements and other exemptions have limited the 
duties assessed against these components, and the result has been lower 
cost equipment. If Congress imposes a border adjustment tax and/or 
eliminates the exemptions for electronics and broadband components, the 
result will be much higher prices for equipment either through duties, 
or through changes to supply chains to work around those country 
specific duties that impose higher costs. In turn, the ability of 
broadband providers to execute their broad deployment plans will be 
impacted. Again, we understand that tax reform is complicated; we are 
highlighting the impact to the stated equity of the Committee to 
improve broadband deployment. While the tax code is not a current 
barrier to deployment, it could quickly become so if members are not 
cognizant of the impact of these proposals.
Use cases and adoption
    In today's world, we cannot have a discussion on how to encourage 
and improve broadband deployment in the United States without taking 
into consideration the growing Internet of Things (``IoT'') ecosystem 
and the transformation of the global economy into the Digital Economy. 
These are fundamental to demonstrating value and generating enthusiasm 
among consumers that will further encourage adoption of broadband 
technology. A core consideration of broadband deployment in rural areas 
is how many potential users will actually adopt and use the technology 
if network investment is undertaken. It is a key metric in the business 
case for deployment, and industry must do a better job of both 
developing the use cases that create interest and value for consumers, 
and raising awareness of the same.
    The growing demand for connectivity and the digitalization of our 
day-to-day activities will require policy makers to think differently. 
At Nokia, we are working to build proven IoT use-cases around the 
world, particularly in the digital health, transportation, public 
safety, and smart cities areas. For example, Smart City use-cases 
require expertise that spans many different fields including finance, 
planning, transport, energy, safety, telecommunications and more. They 
also require public-private partnerships (PPPs) that embrace all of 
these different dimensions. The IoT smart city concept, as other 
verticals, is a holistic and layered framework that addresses the needs 
of multiple aspects of smart city projects and allows cities to use 
urban data to boost economic competitiveness, and build more effective, 
workable solutions to many city challenges. Along the way, we have seen 
numerous challenges including some of the regulatory issues I cited 
previously and others: difficulty in figuring out how to replicate and 
scale IoT Smart City solutions to different sized cities; layers of 
stakeholders; lack of technical expertise at the local level; and very 
challenging procurement environments.
Solutions

  1.  Encourage Increased Innovation and Investment: policies should 
        seek to encourage innovation and investment through such tools 
        as: collaboration with industry, academia, and other key 
        stakeholders; empowering CIOs and senior city government 
        leadership; R&D investment across vertical sectors; and review 
        of existing laws and regulations before adopting new ones;

  2.  5G wireless networks will be a key element in realizing the 
        Internet of Things' promise--Congress can enable test beds in 
        the U.S. Infrastructure--The Federal Government should make 
        additional spectrum available for mobile broadband, implement 
        effective spectrum management programs, and incentivize 
        investment in network infrastructure;

  3.  Public-Private Partnerships--The Federal Government should 
        incentivize the use of public-private partnerships as a means 
        to accelerate IoT development and adoption, and U.S. global 
        leadership;

  4.  Funding IoT/connectivity: As Congress considers an infrastructure 
        bill and future funding legislation, we are mindful of the 
        challenges. However, to the extent funding may be available 
        either through redirecting current program activities or 
        creating new ones, Nokia suggests:

     Funding local government efforts to implement 
            connected technologies and services;

     Funding large-scale national pilot projects for smart 
            cities that focus on integrating multiple smart city 
            applications with scalable and replicable solutions;

     Establishing national challenges with prizes to spur 
            the development of IoT applications with high social or 
            economic impact;

     Funding R&D for key underlying technological 
            challenges relevant to the Internet of Things, such as 
            improving cyber security and reducing power consumption.

    We are supportive of many existing Federal programs such as the 
FCC's CAF program, the rural utility service and others (even those we 
think need reform). To the extent Congress considers an infrastructure 
bill, we are supportive of additional funding through grants or tax 
policy that can lead to additional, targeted broadband infrastructure 
investment. But, to be clear, in an environment of scarce fiscal 
resources we believe priority should be given to the priorities we 
listed.
    Thank you again for the opportunity to testify before the 
Committee.

    The Chairman. Thank you, Mr. Hendricks.
    Mr. Weninger.

STATEMENT OF HON. JEFF WENINGER, STATE REPRESENTATIVE, ARIZONA 
                    HOUSE OF REPRESENTATIVES

    Mr. Weninger. Chairman Thune, Ranking Member Nelson, and 
members of the Committee, it is a true honor to be speaking 
here to be speaking to you today.
    As mentioned, my name is Jeff Weninger. I'm a State 
Representative in Arizona. And I, along with my colleagues, 
especially Senator Fann and Senator Smith, passed and got 
signed by the Governor, House Bill 2365 this year, which did a 
lot of things that are being talked about, shot clocks, and 
just created a great environment we think going forward.
    Today, you can look down any crowded street in America and, 
at a glance, see multiple people, young and old, looking at 
their smartphones or tablets, following online maps, checking 
Instagram, Snapchat, or Facebook, watching YouTube or Netflix, 
videochatting on Skype or FaceTime, or accessing one or more 
countless apps. My mother lives in a retirement community. She 
used to have a wired Internet connection with a desktop 
computer. Last year, she got rid of it, and now she sits in her 
chair for a couple hours a day in the living room and accesses 
Facebook and e-mail through her smartphone.
    Hearing this, it's not hard to understand that mobile data 
usage is skyrocketing. According to Cisco, in 2016 alone, U.S. 
mobile data traffic grew 44 percent, and it's expected to grow 
fivefold from 2016 to 2021. Big events cause people to use 
their mobile devices even more. At the Phoenix Open golf 
tournament in February of this year, for just one carrier, 
mobile data use was equivalent to 26 million selfies. That same 
carrier had a 60 percent increase with roughly the same amount 
of people from the very year before at the tournament.
    All this is the fun stuff, but mobile devices are critical 
to more serious matters. According to Pew Research Center, 40 
percent of cell phone users said they found themselves in an 
emergency situation in which having their phone with them 
helped, and the FCC reports that 70 percent of 911 calls are 
from wireless phones. My father lives in Tucson, and only has a 
wireless phone. He does not have a wired phone or a landline. 
In the last year, he has had to call 911 twice for an 
emergency. For his sake and the sake of all Americans, it's 
critical that these devices work when we need them the most.
    While these phones, tablets, and apps seem magical, they 
don't run on magic, they run on hardware and software connected 
to antennas and ultimately fiber-optic cables, and all of this 
is installed on towers and poles and in underground conduits. 
In other words, they require infrastructure. And more and more 
of that infrastructure will be in the form of small cells which 
are placed on utility poles, street lights, signs, bus 
shelters, and traffic signals, and are designed to blend into 
the existing environment.
    FCC Chairman Pai recently said, ``The future of wireless 
will evolve from large macro cell towers to include thousands 
of densely deployed small cells operating at lower power.'' 
These small cells are necessary to meet today's customers' 
needs, but they're even more important for the next generation 
of wireless networks, 5G.
    We're meeting today's needs and preparing for that future 
in Arizona, where we just passed a landmark bill that promotes 
needed investment in small cells while ensuring the appropriate 
level of local control. Arizonans will know that when they want 
to use the mobile devices, the infrastructure will be there to 
support them.
    You may have heard that sometimes there are conflicts 
between wireless carriers, cities, and towns, over how and 
where these small cells will be built, but in Arizona, we have 
the support for the bill from the industry players and also 
from the municipal association, the Arizona League of Cities 
and Towns.
    How did we get there? Simple. We had many productive 
discussions about how to address the concerns of the cities and 
towns and others while ensuring the right policy framework for 
investment. The bill ensures that there is a uniform statewide 
policy for wireless carriers to get the necessary permits and 
agreements from Arizona cities and towns, and those cities and 
towns are able to ensure that small cells meet their local 
codes for public safety, design standards, and concealment 
requirements. If the wireless carrier wants to attach to 
municipal poles, like street lights, the bill ensures that 
carriers will pay appropriate fees for that attachment.
    In summary, I'm very proud that Arizona's new bill is a 
great example of how the state, cities, towns, and industry can 
all work together to meet a shared goal of ensuring that the 
needs and demands of citizens for broadband networks will be 
met.
    And as I'm efficient and believe in shot clocks, I think I 
finished just in time.
    [Laughter.]
    [The prepared statement of Mr. Weninger follows:]

    Prepared Statement of Hon. Jeff Weninger, State Representative, 
                    Arizona House of Representatives
    Today, you can look down any crowded street in America and, at a 
glance, see multiple people, young and old, looking at their 
smartphones or tablets--following online maps, checking Instagram, 
Snapchat or Facebook, watching YouTube or Netflix, videochatting on 
Skype or FaceTime, or accessing one or more of countless apps. My 
mother lives in a retirement community. She used to have a wired 
Internet connection with a desktop computer. Last year she got rid of 
it and now sits on her chair in the living room and accesses Facebook 
and e-mail through her smart phone. Hearing this, it's not hard to 
understand that mobile data usage is skyrocketing. According to Cisco, 
in 2016 alone, U.S. mobile data traffic grew 44 percent, and is 
expected to grow 5-fold from 2016 to 2021.
    Big events cause people to use their mobile devices even more. At 
the Phoenix Open golf tournament in February, for just one carrier, 
mobile data use was equivalent to 26 million selfies! That same carrier 
had a 60 percent increase in data usage at the tournament in 2017 
compared to 2016.
    All that is the fun stuff, but mobile devices are critical to more 
serious matters. According to the Pew Research Center, 40 percent of 
cell phone owners said they found themselves in an emergency situation 
in which having their phone with them helped, and the FCC reports that 
70 percent of 911 calls are from wireless phones. My father lives in 
Tucson and only has a wireless phone. In the last year he has had to 
call 911 two times in an emergency. For his sake and the sake of all 
Americans it is critical that these devices work when we need them 
most.
    While these phones, tablets and apps seem magical, they don't run 
on magic, they run on hardware and software connected to antennas and 
ultimately fiber-optic cables, and all of this is installed on towers 
and poles and in underground conduits. In other words, they require 
infrastructure, and more and more of that infrastructure will be in the 
form of small cells, which are placed on utility poles, street lights, 
signs, bus shelters and traffic signals and are designed to blend into 
the existing environment.
    FCC Chairman Pai recently said that ``The future of wireless will 
evolve from large, macro-cell towers to include thousands of densely-
deployed small cells, operating at lower power.'' These small cells are 
necessary to meet today's customer needs, but they are even more 
important for the next generation of wireless networks--5G.
    We're meeting today's needs and preparing for that future in 
Arizona, where we just passed a landmark bill that promotes needed 
investment in small cells while ensuring the appropriate level of local 
control. Arizonans will know that when they want to use their mobile 
devices, the infrastructure will be there to support them.
    You may have heard that sometimes there are conflicts between 
wireless carriers and cities and towns over how and where these small 
cells will be built. But in Arizona, we had support for the bill from 
the industry players and also from the municipal association, the 
Arizona League of Cities and Towns.
    How did we get there? Simple, we had many productive discussions 
about how to address the concerns of the cities and towns and others 
while ensuring the right policy framework for investment. The bill 
ensures that there is a uniform statewide policy for wireless carriers 
to get the necessary permits and agreements from Arizona cities and 
towns, and those cities and towns are able to ensure that small cells 
meet their local codes for public safety, design standards, and 
concealment requirements. If the wireless carrier wants to attach to 
municipal poles, like street lights, the bill ensures that carriers 
will pay appropriate fees for that attachment.
    In summary, I am very proud that Arizona's new bill is a great 
example of how the state, cities, towns, and industry can all work 
together to meet a shared goal of ensuring that the needs and demands 
of citizens for broadband networks will be met.

    The Chairman. Nicely done. Thank you, Mr. Weninger.
    Mr. Resnick.

            STATEMENT OF HON. GARY RESNICK, MAYOR, 
                     WILTON MANORS, FLORIDA

    Mr. Resnick. Good morning, Chairman Thune, Ranking Member 
Nelson, and members of the Committee. I am Gary Resnick, Mayor 
of the City of Wilton Manors, Florida, and an active member of 
the National League of Cities and the National Association of 
Telecommunications Officers and Advisors. And I want to thank 
both NLC and NATOA for their support with my testimony and 
their support with these issues over the years.
    In addition to my public service, I am an attorney with the 
law firm of GrayRobinson and head up our broadband practices 
group, and I want to thank you for the opportunity again to 
share our perspectives from local government leaders across the 
country.
    I also want to thank the Committee, and in particular 
Senator Nelson--we Floridians are very lucky to have you 
representing us, sir--for calling attention to the importance 
of broadband deployment. As both an elected official and the 
past Chair of the FCC's Intergovernmental Advisory Committee, I 
can assure you that no one cares more about competitive 
broadband choices than local governments. We are not just 
regulators, but we are large consumers and understand how 
important reliable, competitive broadband is for our local 
economies and our residents.
    As with other new technologies over the years, the 
incredible success in rolling out broadband has made it a 
disruptive technology. It challenges the resolve of all 
stakeholders, including local governments and industry members, 
to remain cooperative partners. If we, as a nation, will 
succeed in providing all businesses and residents from Miami, 
Florida, to Miami, Texas, with excellent, affordable, reliable 
service, local governments and service providers must remain 
cooperative partners, and Federal support for that partnership 
is essential to deploying successfully the infrastructure 
needed for broadband.
    For years, cities and towns like mine have worked 
proactively with both service providers and infrastructure 
companies to support broadband technology. As city leaders, 
though, we must also balance other important needs of our 
communities. Our current policy framework supports us in that 
role, and that's why broadband service and infrastructure has 
been able to expand so rapidly.
    In my community of Wilton Manors, we have supported both 
service providers and infrastructure companies, including 
allowing the use of public property, and we, along with many 
other local governments, are updating our codes to support 
access for small cell technology in our public rights-of-way. 
We have even attempted, in conjunction with transportation 
construction projects, to deploy broadband infrastructure for 
use by the industry. However, currently, Federal and state 
policies prohibit us from doing so.
    When local governments do restrict broadband 
infrastructure, trust me, there are very good reasons, 
particularly when dealing with requests to install facilities 
in the public rights-of-way. We are stewards of the public 
rights-of-way. Our codes exist to ensure that the rights-of-way 
remain safe for all who are impacted by their use, including 
our first responders, utilities, the traveling public, and 
adjacent property owners. We cannot sacrifice these other 
important interests for one particular use.
    There are some concerns with managing the public rights-of-
way that are more important to us in Florida than perhaps in 
other areas. We pay a price in Florida to live in paradise, 
with severe hurricanes, storms, flooding, and lightning 
strikes. Any public works director will tell you that with 
these environmental challenges, it makes absolute sense to 
construct utilities underground. Not only does this improve 
aesthetics and increase property values, it provides much 
reliable utility service and allows first responders and 
residents to use streets during and after these emergencies 
rather than waiting sometimes days or weeks until downed power 
lines are cleared.
    Taxpayers in many communities throughout the state have 
approved referenda to spend hundreds of millions of dollars to 
underground existing overhead utilities, including recently the 
town of Palm Beach. The same reason for not favoring overhead 
utilities applies to broadband infrastructure that may be 
located in the rights-of-way.
    In addition, in Florida, it is vital for our Department of 
Transportation and cities and counties to maintain what's known 
as ``clear zones'' adjacent to roads. Our roadways often border 
waterways, and the only safe way to pull off a road to avoid an 
accident and not get submerged, is to have no fixed facilities 
along such roads. Clear loans--clear zones--excuse me--are 
essential for public safety, not only in Florida, but I 
understand in communities that suffer from heavy snows and ice 
as well.
    My reasons for discussing these concerns is to show that 
our local codes address very practical issues. There is no one-
size-fits-all solution. Local regulation is the only system 
that works. Unfortunately, there are proposals on the table now 
that would preempt and minimize cities' roles and reduce our 
ability to ensure the safe, responsible deployment of 
infrastructure. Federal policies that preempt local authority 
to support certain technologies or competitors risk producing 
winners and losers. These industries are very competitive. If 
it suddenly became cheaper, faster, easier for a company to 
deploy its technology, it would create unfair competitive 
advantages.
    Finally, if Congress preempts local authority over public 
rights-of-way, local taxpayers would be forced to subsidize the 
broadband industry. Much of the dialogue occurring in the 
states and at the FCC would allow wireless providers to attach 
their equipment to government-owned light poles for as little 
as $15 per year. These are very expensive. My city just spent 
over $210,000 to install new light poles, and it would not be 
fair for our taxpayers to pay for this public property to be 
used virtually for free. As a Mayor, if I give business such 
perks, my constituents would expect a great deal in return.
    We have several policy recommendations for the Committee 
that are more dealt with in detail in my written statement. 
First, the Federal Government should prioritize local 
decisionmaking on infrastructure. Second, Congress should 
tackle Federal barriers to infrastructure deployment. The 
MOBILE NOW Act goes a long way to doing that. Third, Congress 
should allow local governments to use every tool in its 
toolbox. And, finally, we should consider appropriate education 
for broadband users. Our first responders are constantly 
reminding residents that they cannot text to 911 or post an 
emergency on social media instead of calling 911.
    In conclusion, on behalf of the NLC and NATOA and the City 
of Wilton Manors, I wish to thank the Committee for inviting me 
to participate in this hearing today. America's local 
governments are committed to supporting Congress and increasing 
broadband deployment. And I look forward to any questions you 
may have.
    Thank you.
    [The prepared statement of Mr. Resnick follows:]

 Prepared Statement of Hon. Gary Resnick, Mayor, Wilton Manors, Florida
    Good morning, Chairman Thune, Ranking Member Nelson and members of 
the Committee. I am Gary Resnick, Mayor of Wilton Manors, Florida, 
having served on the Commission for over 18 years and Mayor since 2008. 
I am also a long-term member of the National League of Cities (NLC) and 
the National Association of Telecommunications Officers and Advisors 
(NATOA). The National League of Cities is the Nation's oldest and 
largest organization representing local elected officials in America's 
cities and towns. NLC represents 19,000 cities and towns of all sizes 
across the country. The National Association of Telecommunications 
Officers and Advisors is the premier professional association that 
provides support on the many local, state, and Federal communications 
laws, judicial decisions, and technology issues impacting the interests 
of local governments. The cities and towns in your states are very 
likely members of NLC and NATOA.
    I currently serve as Vice Chair of NLC's Information Technology and 
Communications Committee. In addition, I have served on the Federal 
Communications Commission's (FCC) Intergovernmental Advisory Committee 
for eight years including as Chair from 2014 through 2016. The IAC 
provides guidance to the FCC on a broad range of issues important to 
state, local and tribal governments including cable franchising, public 
rights-of-way, facilities siting, universal service, broadband access 
and adoption, and public safety communications. More locally, I have 
served on the Board of Directors of the Florida League of Cities for 14 
years and have chaired various committees for the Florida League 
addressing communications policies and issues. My background as an 
attorney with the Florida firm of GrayRobinson, representing businesses 
and local governments for over 20 years in connection with such 
communication issues, and my role as Mayor, has afforded me a unique 
opportunity to work effectively with public and private entities, and 
local citizens, focused on improving communications services.
    I want to thank the Committee for calling attention to the 
importance of broadband deployment in our communities by holding this 
hearing and appreciate the opportunity to provide the unique 
perspective of local governments and our role in promoting broadband 
deployment. I want to particularly thank Senator Nelson not only for 
his focus on this issue, but for his excellent service for all 
Floridians--we are truly fortunate to have him represent us.
    No one wants broadband deployment and competitive broadband choices 
more than local governments. We understand the opportunities that 
broadband presents for our local communities and our residents in terms 
of public safety, economic development, healthcare, entertainment and 
education. We are not only regulators of broadband infrastructure and 
services, we are also large consumers of broadband services, and 
sometimes even providers. In Florida, for example, the City of 
Gainesville has been a provider of high speed broadband service for 
commercial entities for many years. For years, communities of all sizes 
around the Nation have taken innovative steps to increase the 
deployment of broadband infrastructure, both wired and wireless, while 
balancing our health, safety, and welfare concerns.
Local Successes in Broadband Infrastructure Deployment
    Local governments like mine have been active partners for years now 
in ensuring that their residents and local businesses have access to 
competitive broadband choices. Siting broadband infrastructure in 
Florida has and is working very well. Both wired and wireless services 
have been deployed efficiently and effectively in communities 
throughout our state. While there are some areas where certain 
broadband wireline providers have not extended their fiber, local 
governments including my City have worked with service providers to 
encourage such build out of entire communities, usually with success.
    With respect to wireless broadband infrastructure, local 
governments generally process applications for wireless facilities in 
an efficient and expeditious manner not only for the benefit of their 
residents, visitors, and businesses, but also for their own benefit, as 
wireless services are important for local governments' own 
communications needs. We appreciate the many benefits of expanded 
access to broadband options. In fact, many local governments are now 
actively working to deploy conduit, fiber, towers, and other 
communications facilities themselves, particularly in conjunction with 
construction projects in the rights-of-way and on public property, or 
are planning these for future projects. The goal of these projects is 
to encourage providers to offer advanced wired and wireless broadband 
services throughout our communities.
    Cities realize that the smart deployment of infrastructure must 
carefully balance the needs of our industry partners with the public 
health, safety and welfare concerns of communities. Wireline broadband 
infrastructure has been built out, with wireline broadband service 
available throughout Florida, and indeed throughout most of the 
country, largely because of local governments managing their 
franchising authority in a responsible manner.
    Similarly, the reason why wireless services and infrastructure for 
macro tower sites have expanded so rapidly in Florida is because local 
governments have enjoyed broad home rule authority to adopt appropriate 
land use regulations to make siting decisions that work best for their 
communities and applicants. Most local codes afford government staff 
sufficient ability to work with communications providers and 
infrastructure companies in a way that serves the industries' needs 
while addressing local land use, public safety and other concerns 
within their authority. This is particularly important with respect to 
installing communications infrastructure in the rights-of-way, since 
Florida local governments are precluded under current State law from 
entering into agreements for the installation of facilities in the 
rights-of-way. The relatively recent requests to install small cell and 
micro cell technology infrastructure in the public rights-of-way has 
created new challenges as well as opportunities for local governments.
    First, we should understand what we are talking about in terms of 
this infrastructure. I have met on numerous occasions with both 
providers of wireless service and infrastructure companies that do not 
provide service but install and manage equipment to lease to providers. 
We should understand that the term ``small cell'' does not refer to the 
size of the facility, but according to industry engineers, refers to 
the distance that the signal will reach and can be used to provide 
service only to small areas. The industry has described this 
infrastructure as ``the size of a pizza box,'' but the type and size of 
such infrastructure varies greatly with some companies looking to place 
towers that are 120, tall in the rights-of-way, while other providers 
seek to site relatively small antenna sites of 6 cubic feet or less 
that could be collocated on existing light or utility poles. The small 
cell infrastructure to be located in the rights-of-way also includes 
equipment cabinets that may be as large as 28 cubic feet or bigger than 
most refrigerators in our homes. Thus, the infrastructure to be located 
in the rights-of-may not be anything like a pizza box but may be more 
like a pizza delivery vehicle located adjacent to a 120, tower, much 
bigger than anything else in the rights-of-way. In addition, because 
small cell facilities reach only small areas, the industry will look to 
locate a lot of such facilities particularly in densely populated 
areas, with each provider needing its own facilities since antennas and 
equipment cabinet are not shared by providers. Thus, some cities may be 
facing as many as 10 or more sites on one block to accommodate all 
carriers' small cell networks. Many local governments that have 
comprehensive policies in place to address macro towers and 
infrastructure on private and public property have not been faced 
previously with requests to locate this volume and size of 
infrastructure in the rights-of-way and thus, have to consider 
appropriate policies.
    Some cities around the country, such as the City of San Antonio, 
have worked in consultation with providers to develop master agreements 
for the placement of such infrastructure in the rights-of-way. The City 
entered a master license agreement with Verizon which served as a model 
for other providers, to allow access to city rights-of-way and to 
attach equipment to certain city-owned structures for an agreed-upon 
fee schedule. The City found that this proactive agreement allowed 
Verizon and others to increase coverage and capacity, benefiting both 
the providers and customers, while allowing the City to protect 
important safety and land-use concerns, including the City's unique 
historical aesthetic character.
    In Florida as well, there are many examples of local governments 
working proactively with the broadband communications and 
infrastructure industries to support deploying infrastructure. The City 
of Tampa has worked diligently to support expanding communications 
capabilities for its residents and businesses. The City allows wireless 
infrastructure on commercial buildings, and the City has leased 
numerous public properties for the installation of infrastructure for 
both wireless carriers and wireless infrastructure companies. The City 
also hosts over 190 free Wi-Fi hotspots and thousands of subscriber-
based Wi-Fi hotspots, creating a dense, reliable network for residents 
and businesses. The City has committed extensive capital and resources 
to handling rights-of-way registration and permit applications in a 
timely fashion, ensuring that infrastructure is developed with minimal 
disruption to city streets or business operations.
    The robust deployment of broadband infrastructure has occurred 
under existing state and Federal communications laws that recognize the 
important role of local governments and preserve local land use 
authority while balancing the needs of the industry so that 
communications services are not effectively prohibited. I have met with 
many members of the infrastructure industry who candidly have stated 
that the reason they are seeking access to public rights-of-way as 
opposed to private property is that access will be quicker, especially 
if various state bills pass that mandate that local governments grant 
permits within a short time frame, and cheaper since private property 
landlords will require rent. From a technical standpoint, the industry 
has stated that there is no reason that they cannot locate small cell 
technology on public or private property outside of the public-rights-
of-way. The communications laws were never intended to ensure that 
either the infrastructure or wireless carrier industry has the cheapest 
and quickest route available to deploy infrastructure. I would caution 
that such policies in new communications laws would harm competition 
and discourage innovation.
Important Considerations in Local Regulation
    Local governments have a duty to their taxpayers to protect and 
manage public property and public rights-of-way for the benefit of all 
users. The public rights-of-way typically are not owned by local 
governments, but rather are held in public trust for all users of the 
rights-of-way, including government employees and first responders, 
public utilities, businesses and the travelling public. In addition to 
transportation, utility, public safety and land use concerns, we have 
other valid concerns with managing the rights-of-way, including ADA, 
environmental, economic development, property value, aesthetics, 
encouragement of collocation versus new installations, and costs for 
management and maintenance. Local regulation is vital to ensure that 
the important interests of both residents and competitive industry 
users of public resources are protected. This regulation actually 
protects the long-term viability of the industries in question. For 
example, if a tower company installs a tower in the rights-of-way 
without sufficient regard to building codes or safety of the traveling 
public and persons are injured or killed, no cost cutting or regulatory 
preemption will save that company. Appropriate local regulations that 
protect important interests are necessary to maintain viable provider 
and infrastructure industries.
    Local regulations of wireless infrastructure in Florida did not 
come about in a vacuum. Rather, most localities have adopted land use 
codes that are consistent with Florida and Federal statutes and 
regulations after considering input from the affected industries and 
other stakeholders. For the most part, local governments in Florida 
have approved infrastructure siting applications as long as there did 
not exist a land use reason to deny such application. Many local 
governments, including my City, are actively updating their codes to 
reflect the relatively new small and micro cell technologies that are 
seeking to be sited in public rights-of-way.
    Local governments in Florida also have unique concerns in managing 
the deployment of such infrastructure in their communities. More 
hurricanes, tropical storms, cyclones and lightning strikes occur in 
Florida than any other state in the Nation. In the past ten years, 38 
of these storms have made landfall in Florida, causing deaths and 
billions of dollars of property damage. In response, communities around 
the state have worked hard to make their communities more resilient, by 
requiring that new utilities be constructed underground, and asking 
taxpayers to pay to underground existing overhead utilities. The 
residents of the Town of Palm Beach recently approved a referendum for 
the Town to spend tens of millions of dollars to underground utilities 
throughout the Town. Florida communities know very well that 
constructing utilities underground offers many advantages: utility 
service is more reliable, particularly in storms and lightning strikes, 
maintenance of utilities and rights-of-ways is less costly, there is 
greater safety for the travelling public, community aesthetics are 
improved and property values increase. Further, when there are 
catastrophic storms, first responders and residents gain much faster 
access to streets, without having to wait often several days to address 
downed utility lines. These reasons that support utilities being 
constructed underground apply equally to communications infrastructure 
in the rights-of-way.
    In addition, many Florida roads border waterways and canals. 
Ensuring that the rights-of-way adjacent to roads remain clear is a 
priority of our State's Department of Transportation as well as 
counties and municipalities. This is essential for drivers to pull 
safely off the road or to avoid accidents without submerging their 
vehicles. State Departments of Transportation and local governments 
often have such ``clear zones'' for public safety, requiring that no 
fixed objects be placed in the rights-of-way or that such areas are not 
constantly under construction to locate and to maintain facilities. I 
understand from talking to my colleagues in other states, including 
South Dakota, that there are similar protections in place in states 
that are subject to freezing ice and heavy snow storms for the safety 
of the travelling public. Constant construction and permanent 
facilities in the public rights-of-way would be just as hazardous in 
such communities.
Avoiding One-Size-Fits-All Federal Preemption
    A one-size-fits-all Federal preemption scheme, either as a result 
of FCC regulations or new Federal legislation, cannot adequately take 
into account the diverse and particular needs of communities from state 
to state. In Florida, under current law, local governments are not able 
to negotiate and to enter into agreements with communications providers 
for access to the rights of way. My city for example, could not enter 
into the type of agreement that San Antonio entered with Verizon. Our 
only authority to address our valid concerns with use of our rights-of-
way while accommodating the needs of communications providers is 
through our codes. Federal preemption of local governments' codes could 
leave Florida counties and cities without a way to address our vital 
interests that Federal courts have determined are lawful areas for us 
to regulate under Federal and Florida law. Because of Florida's unique 
law with respect to local control over rights-of-way for communications 
facilities, the FCC and Congress must be very cautious about 
interfering with local authority. There could be unintended 
consequences that would be harmful to the communications and 
infrastructure industries as a result of inappropriate Federal action.
    The Federal Government should also be careful not to pick winners 
and losers through law or regulation. Both the service provider and 
infrastructure industries have become extremely competitive, not just 
in Florida but around the country. Making it easier, faster, or less 
costly for a particular technology, competitor, or type of 
infrastructure to be deployed will create significant competitive 
advantages and harm viable competitors. If Congress or the FCC 
encourages particular technologies, it will remove incentives to 
develop better technology. For example, prioritizing the deployment of 
``small cell'' wireless infrastructure, which covers only a small area 
of service may have negative consequences. Affording these technologies 
advantages under Federal law could limit the deployment of technologies 
that would provide greater coverage and be less physically impactful on 
our environments.
    Local regulations may actually incentivize advances in technology. 
For example, local government regulations that require collocation if 
feasible before a new tower can be constructed, have encouraged the 
industry to adopt better methods to collocate more facilities on 
existing towers and structures and have led to safer tower practices 
and more efficient use of infrastructure resources. Local needs for 
hidden or stealth infrastructure have led to the development of new 
kinds of smart street furniture and advances in infrastructure 
camouflaging.
    The Federal Government must also not ask taxpayers to subsidize 
these industries to boost one type of infrastructure over others. 
Preemption of local fees or rent for use of government-owned light and 
traffic poles, or fees for use of the rights-of-way amounts to a 
taxpayer subsidy of wireless providers and wireless infrastructure 
companies. There is no corresponding benefit for such taxpayers such as 
requiring the broadband industry to reduce consumer rates or offer 
advanced services to all communities within a certain time frame. While 
it could be said that the benefit is that the wireless provider 
industry will deploy 5G for consumers, there is certainly no 
requirement being discussed. Further, it is hard to find a public 
benefit by giving special concessions to an infrastructure industry 
that does not provide service to consumers, but earns revenue by 
constructing, managing and leasing infrastructure. Light and traffic 
poles paid for by taxpayers are not cheap. My City has had the occasion 
as part of roadway improvement projects to purchase many new lights 
poles over the past several years. In 2016, we purchased 22 new poles 
for Dixie Highway at a cost of $5,340 per light pole. Total cost of 
installation with directional bore, conductors, conduit, distribution 
system, etc. was $209,350. In 2012, we purchased 34 new light poles for 
a project on Powerline Road at a cost of $4,357.70 per pole and total 
cost of installation of $249,277.30, and in 2010, a similar project for 
installing 51 new light poles on Wilton Drive cost $344,756.90. Many of 
the industry advocates argue that the industry should be allowed to use 
such light poles for free or for as little as $15 per attachment per 
year. Why should our taxpayers pay for the infrastructure to be used by 
these for-profit companies? The onus is on Congress to negotiate on 
behalf of the American public, and if it offers handouts to industry, 
it must negotiate something tangible in turn that improves service for 
consumers--not just promises or predictions of increased competition in 
the future. As a Mayor, if I were negotiating to provide perks for 
certain businesses, I would certainly be expected by my constituents to 
get a good deal for them in turn.
    In addition, during my years serving on the IAC, we devoted 
substantial attention to broadband adoption and why roughly 20 percent 
of the Nation's households do not subscribe to broadband. Certainly 
access to broadband figures into this, particularly in rural and tribal 
areas where carriers have refused to construct infrastructure because 
of relatively low returns on the capital investment. However, what the 
IAC and the FCC have realized is that for many residents, broadband is 
simply not affordable. Local governments, including my City, have 
worked hard to make broadband available to such residents, often 
through Federal programs such as CDBG, by setting up community centers, 
schools and libraries and free Wi-Fi in parks and government buildings 
where residents can obtain free access to broadband as well as 
education on how to use and not to use broadband. In any discussion 
about supporting infrastructure, we should not lose sight of the 
ultimate goal of having affordable broadband available for all 
residents.
Policy Recommendations for the Committee
    To ensure that all Americans have reliable access to affordable, 
truly high-speed wireless broadband, local governments through NLC and 
NATOA have proposed a number of actions the Federal Government can take 
to increase competition and the reach of broadband.

   Prioritize Local Decision-making on Infrastructure--In 
        addition to avoiding further Federal preemption of local police 
        powers, Congress and the FCC should encourage further local 
        input in Federal decision-making processes. The FCC's recently-
        formed Broadband Deployment Advisory Committee, or ``BDAC,'' is 
        tasked with advising the FCC as to state laws and local 
        ordinances to address small cell infrastructure deployment. 
        However, I and my local government colleagues around the 
        country have concerns since only one member out of 29 on the 
        Committee is a local government official. With all due respect, 
        the other members of the committee have never voted on a local 
        government ordinance. More local government representatives 
        should be appointed to this body.

   Tackle Federal Barriers to Infrastructure Deployment--This 
        Committee has already taken numerous steps to speed wireless 
        broadband deployment through the bipartisan MOBILE NOW Act. By 
        freeing up Federal spectrum, streamlining access to Federal 
        lands, building a database of available infrastructure, and 
        implementing common-sense dig-once policies for Federal 
        construction, the Committee is helping to eliminate obvious 
        barriers to deployment in Federal systems. Congress could go 
        further, particularly as it considers comprehensive 
        infrastructure legislation, to ensure that Federal 
        transportation dollars and other Federal funding programs are 
        not restricted in a way that prohibits the inclusion of conduit 
        or dark fiber in state and local government projects. For 
        example, my City recently completed a multimillion dollar 
        improvement on Dixie Highway largely with Federal 
        transportation funds. When we wanted to install conduit 
        underground as part of that project, we were told the funds 
        were restricted and we could not do so, even if we wanted to 
        pay the extra labor and material costs for the conduit 
        installation. We have a larger project commencing next year and 
        would like to install conduit. Federal infrastructure funding 
        programs should recognize that broadband infrastructure is a 
        necessary part of bridge, tunnel, and roadway projects. The IAC 
        completed a Wireless Report at the request of the FCC last 
        December, which is maintained on the FCC's website. One of the 
        things we realized, surprisingly, is that the FCC does not 
        maintain remotely complete data as to macro towers that may be 
        available for collocation. The IAC recommended that it would be 
        a good practice for local governments and the FCC to maintain 
        such information to collocate wireless communications 
        facilities more easily.

   Allow Local Governments to Use Every Tool in the Toolbox--We 
        need every tool in the toolbox to ensure our residents can have 
        access to affordable, modern broadband and do not wind up 
        subsidizing the provider and infrastructure industries without 
        obtaining significant benefits in return. That means allowing 
        local governments to implement innovative policies like dig-
        once, which reduces the cost of underground broadband 
        infrastructure, or touch-once, which minimizes the time and 
        disruption necessary to add new broadband providers to existing 
        utility poles. In addition, we should have the ability to 
        negotiate with the broadband industries. Verizon approached the 
        City of Fort Walton Beach, FL to obtain access to government 
        property including government infrastructure in the public 
        rights-of-way. The City entered into an agreement with Verizon 
        that afforded the access it needed and also provided 
        substantial benefits for the City and its residents including 
        market rates of over $2,000 per attachment. My City as well has 
        negotiated for the use of public property in exchange for 
        benefits that accrue to my City's residents. Virtually all 
        local governments have entered into similar arrangements. 
        Allowing local governments and industry members to work 
        together to reach win wins is by far the best state and Federal 
        policy. Cities also need the freedom to develop municipal 
        broadband networks, if appropriate, without outright or 
        effective preemption that limits competition. Smaller and rural 
        communities that have successfully developed partially or 
        wholly publicly owned networks have found this option to be a 
        critical lifeline in a market that does not allow private 
        providers to realize a sufficient return on investment to serve 
        these communities. As broadband has become a necessary 
        component for cities to retain talent and attract business, 
        denying them this option ensures that they will continue to 
        experience ``brain drain'' and fewer economic opportunities.

   Education--Finally, while we all support the goal of making 
        broadband available for everyone, as policymakers we should be 
        considering appropriate education on how to use and not to use 
        broadband. We all know that broadband should not be used for 
        certain purposes, such as identity theft, bullying, and other 
        inappropriate but available uses. Also, not all broadband 
        content is appropriate for all users. Many cities are educating 
        residents on broadband. For example, my City and others often 
        remind residents that posting something on social media is not 
        a substitute for calling 911 in an emergency. First responders 
        do not monitor social media. In the IAC, we often discussed the 
        social responsibility that should accompany the technology, but 
        those issues were not really within the FCC's scope. Perhaps 
        they are within Congress's.
Conclusion
    On behalf of the City of Wilton Manors and my colleagues with NLC 
and NATOA, I want to thank the Committee for inviting me to participate 
in this hearing today. I offer the ongoing assistance of local 
governments as you examine ways to increase broadband deployment 
responsibly across our Nation. I urge you to view local governments as 
strong partners in ensuring that broadband services are available to 
all Americans.
    Thank you again. I look forward to any questions you might have.

            STATEMENT OF HON. SHELLEY MOORE CAPITO, 
                U.S. SENATOR FROM WEST VIRGINIA

    Senator Capito [presiding]. Thank you. I just made a 
meteoric leap to the Chair's chair.
    [Laughter.]
    Senator Capito. It's so nice to be here. Well, thank you. 
And I want to thank Chairman Thune. Obviously we were just 
called for a vote. He has gone to vote, and he has yielded me 
the time to make my statement and ask some questions. I'm not 
going to reiterate all the benefits of broadband. I'm from West 
Virginia, a state that has challenges that many of our states 
have.
    I appreciate Ms. Cooper's testimony when she references the 
GAO Report that says states' access to affordable broadband 
telecommunications is vital to economic growth and improved 
quality of life for the country. So we need to have it easily 
accessible and to try to help those areas who have been 
unserved.
    So today I want to announce I am going to be introducing a 
bill called the Gigabit Opportunity Act, which builds on 
Chairman Pai's idea and vision of ``gigabit opportunity 
zones.'' It seeks to expedite the deployment of broadband in 
low-income rural areas. And in the GO Act, the FCC would be 
directed to release a framework to streamline broadband laws in 
states, counties, and cities. There are a myriad of different 
hoops that have to be jumped through, but once adopted, I think 
Governors would be able to nominate portions of their states' 
low-income areas as ``gigabit opportunity zones.'' So I hope my 
colleagues on both sides will join with me to get the 
flexibility and the streamlining of existing regulations.
    Mr. Downes, in your testimony, you mentioned the unintended 
consequences of unfocused investments, and you mentioned the 
stimulus package in 2009. Certainly, in West Virginia we had a 
major investment, and we're still 49th in deployment. 
Encouraging broadband has been difficult--you know, not having 
the competition that we need, the burdensome regulations 
obviously are holding us back.
    What suggestions besides what you have in your written 
statement would you put forward for future investments if and 
when we get to an infrastructure package that includes 
broadband? You mentioned $20 billion, and you mentioned that 
FCC should be in charge rather than having the three different 
pockets. Would there be anything else you would add to that 
statement?
    Mr. Downes. Yes. And thank you. And I had an opportunity, 
Senator, to look at your draft legislation, and it was very 
encouraging, so I hope it does move forward.
    Senator Capito. Thank you.
    Mr. Downes. So obviously we know that some of the broadband 
stimulus money was spent better than others. And I think one of 
the things we learned even from all three different bureaus is 
that we have to watch these projects more closely and more 
professionally, frankly, and make sure that when we make a loan 
or we make an investment to a private party to do an 
infrastructure bill, we can't just leave it alone, we have to 
watch them. Because a lot of these projects got into trouble, 
some of the contractors were not very experienced, and they 
just were allowed to go on and spend money and deliver nothing. 
So I think much more professional management, and as I say, so 
far the FCC did the best job, but they could use a lot of help 
as well.
    Senator Capito. One of the areas I've struggled with is the 
way that broadband deployment is reported and measured. For 
instance, if you have the census tracts, you can have an entire 
tract, and if you serve one person or one household in the 
census tract, then that census tract is considered ``served'' 
in some reporting. Do you have a concern as well as to the 
actual data that we're receiving as to who is getting this 
service and who isn't?
    Mr. Downes. Yes, I do. I agree that the measurement by 
census tract is obviously not the best. And it goes the other 
way, too. You start to see things that look like they're 
unserved based on, sort of, the criteria that the FCC and 
others use to determine what constitutes broadband, how much 
latency is allowed, and so on. That, frankly, has excluded 
satellite up till now. So I think we can do a much better job 
of pinpointing just where the real problems are. But, as you 
know, we already have a pretty good idea of the unserved 
communities and the underserved communities and where they are, 
and that should be the focus.
    Senator Capito. Do you find, though, a bit of a disconnect 
into what your definition of underserved might be; for 
instance, the CAF-II money is going to providers to go to 
underserved and unserved areas? And I've been pushing, at least 
in my state, to make sure that we go to unserved because it 
doesn't really do as much good, I don't think, to up somebody's 
speed before somebody even has availability of the service. Do 
you have a comment on that?
    Mr. Downes. Yes, no, I completely agree. The unserved 
communities ought to be the focus certainly of any actual 
Federal spending. In fact, that should be the exclusive focus. 
And we should use this reverse auction process once we figured 
out what the real investment requirement would be to get over 
the high cost to find the least cost provider and do it in a 
way that maximizes the public spend.
    Senator Capito. Thank you.
    And, Mr. Weninger, I would like to say our state and our 
Governor just signed a broadband bill under kind of 
controversial circumstances, so I want to take an opportunity 
to thank him, Governor Justice, for signing it and the 
legislatures that put it into effect. And I'll be interested to 
see how it compares with what you all have done in Arizona. So 
thank you for being here today to bring that forward. Thank 
you.
    Mr. Weninger. Thank you.
    Senator Nelson. Ms. Cooper, this is exciting. You're going 
to put up 4,000-plus satellites, you're going to cover every 
part of the globe. Tell me how you're going to get along with 
those that put the pipes down that run into the houses. Are you 
directly competing against them or are you going to cooperate 
with them and concentrate in the areas that they can't serve 
with 5G?
    Ms. Cooper. Thank you, Senator. The constellation we're 
planning to build will cover the globe pretty equally. So the 
service will be available globally where we can manage our 
landing rights and develop our capacity on space.
    The business we plan to develop is meant to go direct to 
consumers, those consumers who seek to subscribe we would seek 
to serve. We are still several years away from deploying that 
service. I would expect that there would be significant uptake 
in areas that have no service now, but we also expect in areas 
where there are relatively few consumers with choice that we 
would be a new competitor entering the market. That I think is 
a question that will unfold in the years as we become closer to 
service rollout.
    Senator Nelson. OK. More competition.
    Mr. Mayor, you have testified that you don't want the Feds 
to mess around with the state and local regulations related to 
the expansion of broadband. So explain more in detail, what do 
you think about the FCC rulemaking that they are considering? 
And if they adopt what they're considering, what impact is that 
going to have on the agreement states and cities have already 
made on wireless siting?
    Mr. Resnick. Thank you, Senator Nelson. The success in 
rolling out broadband over the years has been made possible by 
the current framework of local regulation. Macro towers have 
been deployed effectively throughout the entire country. 
Virtually everybody around the country has access to wireline 
broadband, also made possible through local regulation.
    The FCC's proposed NPRMs to potentially preempt local 
authority would have, I think, devastating effects on the 
industry and on the choices available for consumers. What local 
regulations show is that a one size does not fit all, it's not 
possible, and it also tends to pick winners and losers.
    If we create incentives or give special treatment for small 
cell, which by the way is not small. There has been a lot of 
talk about small cell. That term refers to the size of the 
coverage, it doesn't refer to the size of the facilities. Some 
of our communities have been approached by companies wanting to 
put 120-foot poles in the rights-of-way accompanied by 
refrigerator-size equipment cabinets. They are not small. They 
just provide service over a very small area. So that's the 
term, ``small cell,'' it means the size, the distance of the 
service that it can reach, not the size of the facility. They 
are definitely not the size of pizza boxes.
    But companies like SpaceX that want to innovate with new 
technology should be encouraged, and if we adopt policies that 
preempt local authorities solely to encourage more small cell 
facilities being built in our rights-of-way, what's it going to 
do for innovation? It's going to discourage innovation, it's 
going to favor one competitor over the others, and it's going 
to basically create winners and losers. So that type of policy 
that would preempt local regulation would not be a very good 
model to follow.
    The local regulations, however, have encouraged innovation. 
For example, local governments can require collocation as 
opposed to building new towers. That does encourage innovation 
because the industry has to become more creative about how to 
obtain the signal as opposed to just building new towers 
everywhere. Also, there is innovation now where there is 
technology that can use actually manhole covers to provide the 
same type of coverage that small cell technology provides. 
Local governments can require stealth and camouflage 
requirements with respect to this technology. If the FCC 
preempts those types of local initiatives, it's going to 
discourage innovation, it's going to hurt certain competitors 
that are entering the business, and we don't think it's 
appropriate.
    Senator Nelson. OK. Madam Chairman, I'm going to go vote, 
and I will ask them to hold the vote for you until you can get 
there.
    Senator Capito. Thank you. Thank you very much.
    The Chair is back, so I will----
    The Chairman. Feel free to keep going.
    [Laughter.]
    Senator Capito. I need to go vote.
    The Chairman [presiding]. Thank you. Thank you for your 
patience and your indulgence. And Members of Parliament from 
the north, thank you for being here. You get to witness what is 
our experience when we have votes going on in the middle of 
hearings.
    [Laughter.]
    The Chairman. So thank you for being here.
    Let me pick up. I know that there have been a few questions 
asked already by my colleagues, but as I made clear in the 
situation in Custer, South Dakota, that I mentioned in my 
opening remarks, unnecessary bureaucratic delay in securing 
permits wastes time and deprives consumers of critical 
services.
    So, Mr. Downes, in our efforts to streamline deployment, we 
don't want to step on local interests or discourage 
experimentation, but we do want to identify where logjams 
exist, like along the lines of what we're experiencing in 
Custer in South Dakota, that serve no public interest. And so 
the question is, can you comment on your findings with regard 
to some of the practices that you've found wasteful?
    Mr. Downes. Sure. So, thank you, Senator, for the question. 
I don't think that this is an all-or-nothing or it's not black-
and-white. I think there are lots of things at the local level 
that are specific to the locality and also we've seen I think 
an example of the build-out of Google Fiber and now other 
gigabit fiber services. We see what happens when localities are 
incentivized to experiment. Their competitive spirit gets up 
and they start to discover a lot of things about their 
practices that don't make sense or just don't fit in that 
environment, and they get rid of them. And certainly as we move 
into 5G, we're going to see a lot of communities saying, states 
and localities saying, ``We want 5G. We want to be leaders in 
this innovation. It's an opportunity for economic growth. And 
we're going to experiment in ways that we can to get it in as 
quickly as possible.''
    At the same time, there is a lot that's wasteful. I live in 
an unincorporated community in Contra Costa County in 
California. The county people are very efficient, they're very 
professional, they have their rules and regulations, but as 
soon as there is even a hint of a new antenna going up on an 
existing utility pole, we've got all sorts of, sort of, ad hoc 
local authorities and people who get involved in the process, 
and that's usually where the delay is coming from. They don't 
know what they're debating about. They think they're talking 
about a full tower install when they're not, and that's just 
part of what drags things out. As I say, it's not the 
regulations, it's the lack of uniform process, even just having 
the inspector show up when he's supposed to. If they don't, 
then we can have very expensive delays for no good reason.
    So I think there is that kind of waste that's easy to get 
out, and I think that's really what the FCC is getting at in 
the latest NPRM, not to foreclose local interests.
    The Chairman. Let me direct this one, if I might, to Mr. 
Weninger. And by the way, congratulations on the Bill 2365 that 
you had passed in Arizona. Your bill was aimed at streamlining 
infrastructure policies at all levels of government to pave the 
way for the deployment of next-generation wireless services to 
the people in your state. It's particularly noteworthy, I 
think, that your bill earned the support of the League of 
Arizona Cities and Towns. And so I'm wondering what lessons we 
can learn, as Federal policymakers, from how state and local 
authorities in Arizona worked together to speed the deployment 
of next-generation services. Maybe you can talk about your 
legislation, how you worked out and reached out to and created 
a sort of integrated approach among all the levels of 
government in your state.
    Mr. Weninger. Thank you, Mr. Chairman. Yes, the inner 
workings of that was about 20 stakeholder meetings that were 
very intense in the beginning and did get heated. But once we 
figured out what each side really wanted, what the industry 
wanted, and what the local governments wanted, it got easier.
    The local governments were concerned about some of the 
things brought up here: concealment, aesthetics, public safety. 
So we addressed those and gave a lot on that.
    The industry is very concerned with price and speed, so the 
shot clocks. We instituted and settled on a 75-day shot clock, 
and essentially about $200 total when you added up the $50, the 
$50, and then a $100 fee.
    But I think it's important within that framework, that with 
the shot clock, if you look at some of the things that were 
happening before, we had Verizon took 3 years to get nine 
master lease agreements in place with nine different cities. 
And when you have these companies coming in and putting forward 
millions and millions of dollars in infrastructure, and you 
have hundreds of cities and towns that have all different 
rules, all different fee structures, you're never going to be 
able to keep up with technology, you're always going to be 
behind, and you're always going to have people who are lacking.
    We all came together, but one reason we did all this is 
because there were some people who were dragging this process 
out. One city has put up 71 of these, and in every case, they 
said they had to have an inspector, they were charging 
thousands of dollars, they were essentially charging the same 
amount, inspections and everything that you do for the large 
cell towers, and in all 71 cases of those poles, they made the 
company replace them anyway. So the company had to buy them a 
brand new pole and had to wait for 6 months to a year to ever 
even get it up.
    But in the end, and I will submit it to you that the 
Arizona League of Cities and Towns was great to work with, but 
this was not a conservative organization. But we worked hard 
with them and we figured out what both sides wanted and needed, 
and in the end, they weren't just neutral, they supported the 
bill, which, again, got out of the legislature unanimously out 
of both houses, and the Governor signed.
    The Chairman. Mr. Hendricks, again welcome back to the 
Committee. I notice you have something at your feet, and I'm 
told it may be a small cell. So maybe you could tell us a 
little bit about that piece of equipment and show us what you 
brought with you today.
    Mr. Hendricks. Certainly, Mr. Chairman. And I think it's 
particularly important, given Mayor Resnick's comments moments 
ago about small cells not being small.
    This is a fairly typical Nokia small cell. [Witness 
displays case demonstrating size.] They come larger. They also 
come as small as a drink coaster. They come with capabilities 
to transmit from a few meters up to a few kilometers on the 
basis of the particular technology and software that is on 
board.
    One thing that is, I think, very important to understand, 
as our friend from Arizona was just outlining, about how 
regulatory costs impact deployment. Not even taking some of the 
more outrageous examples that we have seen, a $3,000 site 
inspection fee to put this on a pole, $2,500 a month--or $2,500 
initial charge for the attachment, $1,500 a month in return 
charges, makes this a $22,000 enterprise just in regulatory 
costs to get it put on a pole. That doesn't include labor, that 
doesn't include getting power to it or backhaul to it, or the 
costs of going through the regulatory process.
    So if we were to deploy, again, fairly modest, 200 of these 
in a city, that's $4.5 million in cost just to get it on a pole 
and keep it there for a year. We think that we need to do 
considerably better than that. We've also seen--and I outline 
this in my testimony--some great partners. Nokia has great 
partners with communities. We serve 30 or so municipal 
broadband systems. We're a major partner in the FirstNet 
project that will be building the wireless network.
    So we have great experience and great partners, but we also 
have encountered extraordinary problems jurisdiction to 
jurisdiction, some places that have no process at all, so that 
you don't know where to begin, some places where five agencies 
will be involved in seriatim looking at the application, the 
costs and fees that are associated here. The advent of third 
parties who have been coming in to negotiate on behalf of 
cities for these agreements have sprouted up kind of like 
crabgrass in the spring, and they have revenue-sharing 
arrangements with the city that are designed to extract as much 
as possible for the cost of placing these facilities. All of 
those things take the cost of the deployment well beyond, in 
many cases, what makes the project viable. And the timelines 
are also an issue. So----
    The Chairman. Thank you. We appreciate that.
    Senator Fischer.

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

    Senator Fischer. Thank you, Mr. Chairman.
    Representative Weninger, you talked about some of the 
changes that Arizona has recently made with your bill regarding 
wireless broadband deployment. The Nebraska legislature is 
working on legislation to ensure the infrastructure necessary 
for these new technologies is available.
    In the broader context, what do you see is the role of 
states in working with Federal, local, and also private 
entities to reduce the barriers to broadband deployment?
    Mr. Weninger. Thank you, Senator. One thing I thought was 
interesting as I was coming here was looking over one of your 
bills, which was kind of mapping out Federal and government 
facilities, and I thought that was interesting because in a lot 
of these more rural communities and different parts, there is a 
lot of times government infrastructure and government buildings 
and government workers. Sometimes in our communities, they're 
the largest employer in some of those rural communities. So I 
thought that was important.
    But, yes, I think the states always--hopefully we can work 
with you like we worked in Arizona with the cities to help get 
this done. It's just--I keep coming back to this, and I like 
using real world examples--it's just so important for 
everybody, rural, and low-income neighborhoods, and everywhere 
else. I mean, when I go back to my hotel tonight, using data, 
I'm going to FaceTime with my daughter and be able to talk to 
my daughter pretty much in real time like I'm there.
    I mean, technology is advancing so quickly, and I'm one who 
embraces it and thinks it's amazing, and anything we can do for 
you, as a state, or to work with the Federal Government or 
Nebraska, I think, is a good thing.
    Senator Fischer. Thank you. And Mr. Downes and Mr. 
Hendricks, as we look at new technologies, for example, the 
Internet of Things, that's going to require obviously smaller 
facilities, and those have differences with the current, as you 
just showed us some of the smaller cell capabilities that we 
have available now.
    When we're looking at these new technologies, how different 
are the siting policies going to be from the large towers? And 
how are we going to educate stakeholders to be able to deal 
with this both at the state and the local level about the 
importance that we have these rational siting ordinances? How 
are we going to move ahead on this?
    Mr. Hendricks. The first thing I would say, Senator, and 
thank you for the question, is earlier we heard about the major 
deployment successes we've had on broadband in the past, 
particularly with wireless. Interesting, when I was here on the 
Committee and we worked on a major piece of legislation, we 
passed comprehensive reform to macro cell tower siting, that 
streamlined things, and the evidence from the field is 
considerable, that that was a major component in very fast 
deployment of 4G LTE technology.
    So the lesson learned there is when you have rational 
policies that help to eliminate huge differences place to 
place, you can get ubiquitous deployment quickly. We think 
that's true here also, but we also think that when you're 
talking about adapting your local ordinances to accommodate 
densification of a network with small cells, that may be 
hundreds and hundreds of deployments in a city, you can't look 
at it from the perspective of requiring an individual 
application for every small cell site. You need to allow things 
like multisite application so that you can take care of it at 
once, and you can reduce impact study consequences and costs, 
and you can have one site selection fee assessed instead of 
$3,000 per small cell.
    So we do have to change the way we think about these 
deployments because there is a major difference between a 
$400,000 macro tower, with everything including a diesel 
generator that is deployed there and the small cell that I just 
showed you.
    Senator Fischer. And the small box, right.
    Mr. Downes, did you have anything to add?
    Mr. Downes. Yes, I would just add that one of the things 
that's going to be also important about 5G deployment is this 
is going to be a technology that's going to evolve and change 
very rapidly, and so it's also going to be important not to 
penalize providers when they upgrade equipment or change 
equipment. If that's treated as a brand-new install, that will 
slow things down inordinately and obviously discourage better, 
faster, cheaper service.
    Senator Fischer. So you would think at the Federal level, 
we also need to be aware that changing technologies will 
require us to have a different view of the regulations that are 
in place?
    Mr. Downes. Yes, I think so. Again, what I would suggest is 
just learning from the local, the best practices, put that into 
legislation, that is, the minimum standard, obviously leaving 
locals to play with opportunities or other kinds of 
experimentation beyond that, but just have a baseline of sort 
of minimum requirement for flexibility. That's really going to 
help everybody.
    Senator Fischer. OK. Thank you.
    Mr. Downes. Thank you.
    Senator Fischer. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Fischer.
    Senator Schatz.

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

    Senator Schatz. Thank you, Mr. Chairman. Thank you for 
scheduling this hearing on broadband infrastructure deployment. 
Improving people's access to the Internet is critical to 
economic and social development, but it also matters what kind 
of Internet people have access to.
    So just very briefly, Chairman Pai is making a mistake with 
repealing the Open Internet Order, which will undermine the 
Internet, as we know it. The Internet is not broken, and there 
is no constituency to repeal the Open Internet Order.
    My first question is for Ms. Cooper. I found your testimony 
fascinating. Satellite Internet is often associated with low 
speeds, high latency, high prices. You have asserted that 
SpaceX essentially changes the paradigm. How?
    Ms. Cooper. Thank you, Senator. We have a couple ideas. 
First, we want to bring the satellites closer to Earth. By 
bringing them closer to Earth, the latency required in the 
system to get the satellite back to the Earth is reduced 
considerably. Our system, we think, will have latencies below 
35 milliseconds, whereas traditional satellite services are in 
the hundreds of milliseconds. That's important for some kinds 
of applications, but not for everything.
    The next problem is being able to offer speeds and sort of 
capacity that are comparable to what you would see with fiber 
services today. For that, we propose to build many satellites 
that have multiple satellites in view, and they're highly 
intelligent satellites. They can focus their beams at very 
small areas, allow them to reuse the frequencies that they have 
very efficiently. That allows us to serve more customers with 
higher speeds and adapt our capacity where the demand rises and 
falls.
    We are also, I think, uniquely situated because we've got 
this heritage of applying real innovation to manufacturing, 
both to the spacecraft, we'll be developing satellites that 
have not been seen before, and deploying them using the 
reusable launch capability that can help us not only deploy 
quickly but also more cheaply.
    So our goal is to provide fiber-like services at market-
prevailing prices with a different construct of a satellite 
architecture.
    Senator Schatz. You noted in your testimony that in the 
last broadband infrastructure program satellite received less 
than 2 percent of stimulus money. What led to that? And how do 
you think we need to change in whatever we do next?
    Ms. Cooper. I would answer that in two ways. The first is, 
I think satellite architectures need a little bit of 
conceptualization to make them parallel to their terrestrial 
counterparts. A satellite terminal looks a lot like a cable 
modem in sort of its function. It's on the consumer premise. If 
there's a program that encourages or offsets the cost at the 
consumer's home for the equipment they need to get Internet, 
there is no reason why you couldn't include a satellite 
equivalent. A gateway is equivalent to a router or a switch or 
a POP, it's part of the network equipment.
    I think in the past, being able to apply those to the 
spacecraft themselves was a conceptual construct that we just 
never got to. So that was part of the hard work to do, is just 
to say this is a different kind of architecture. It needs to be 
sort of aligned with what terrestrial is.
    The second is that the satellite services need to be 
equivalent to the kinds of services that anyone would get in 
other kinds of areas that are served with other technologies, 
and that's incumbent on us to provide.
    Senator Schatz. Does the statutory framework allow for the 
FCC to do this, or does this require legislation?
    Ms. Cooper. I think it will be determined by what program 
it is that we're talking about. We would like to work with you 
on it.
    Senator Schatz. OK. Mr. Hendricks, of the regulatory 
challenges that you've discussed today, what would you 
recommend that the Committee work on?
    Mr. Hendricks. Well, I think in the long run, as both 
Chairman Thune and Ranking Member Nelson mentioned, the net 
neutrality issue is one that is a big challenge. I get in the 
current climate how difficult the conversations are, but we've 
been running on this regulatory hamster wheel for about 10 
years now, and we've gone through several iterations of stop, 
start, stop, start.
    As a technologist, which is what Nokia does, those kinds of 
regulatory shocks change dramatically the product development 
that we are doing where you assume you can do things like 
analytics and look at application-specific prioritization, and 
then, poof, you can't.
    And so Congress settling once and for all what it believes 
the FCC's authority is and how that authority should be 
operationalized is a very preferable solution, I think, for 
most administering. I'm maybe a little more optimistic that we 
can get there because I think there's a lot more we agree on 
than not. I think that's an area.
    I think we'll have to take a wait-and-see approach to what 
happens after--if the FCC carries forward with net neutrality 
NPRM that was put forward. You will then again have, by virtue 
of the reclassification of broadband services, a common privacy 
framework that applies to all services. It's a reasonable 
conversation at that point to have about whether or not you 
think what the FTC framework does is the right framework for 
everyone, but then at least you're back on a technology-neutral 
standing. So Congress may have an opportunity to look at that 
as well.
    And I think I identified mostly what I thought were things 
you shouldn't do or that you have to be very cautious in doing, 
particularly as you consider things like tax reform because I 
think those challenges are going to be difficult to overcome.
    Senator Schatz. Thank you.
    The Chairman. Thank you, Senator Schatz.
    Senator Cortez Masto.

           STATEMENT OF HON. CATHERINE CORTEZ MASTO, 
                    U.S. SENATOR FROM NEVADA

    Senator Cortez Masto. Thank you. Thank you, Mr. Chair and 
Ranking Member. So I'm from Nevada, and we have challenges like 
everyone else with respect to access to rural broadband. So I'm 
very excited to hear and have this discussion today. And so 
thank you for all being here.
    Mr. Hendricks, you made a number of references in your 
testimony to smart cities, and this is an area that I'm very 
interested in working on, and I'm glad you raised it. I'm 
curious, did you partner with a community under the DOT 
challenge last year?
    Mr. Hendricks. I would have to check. I don't recall doing 
that. One thing I will say is I think Nevada has been probably 
the most forward-leaning customer that we have dealt with in 
our discussions. It is very clear, from the Governor to the 
legislature to the Members of Congress, that there is an 
interest in making Nevada an attractive place for tech 
investment, and we've had a lot of fabulous conversations with 
cities about doing smart city deployment kind of work.
    Senator Cortez Masto. And this is why I bring it up, and 
I'm grateful that, Mayor, you're here as well as a 
representative. I've worked in state and local government, and 
I think there is an opportunity at the Federal level to help 
incentivize local, state, private sector to come together down 
a path. And I think in Nevada our future is in technology and 
in promoting technology, and you see that happening, and that's 
why I bring up the smart cities. This is an issue that I'm 
interested in looking at Federal dollars to help incentivize 
communities to really go down this path, both rural and our 
urban areas. And I'm curious if that's something that you would 
be interested in seeing in the future as well.
    Mr. Hendricks. Yes, I think very much. In my testimony, I 
described that. I think to the extent that there will be funds 
available for fiscal activities in an infrastructure bill and 
in other contexts, Nokia very much would like to see priority 
given to those verticals, including smart cities.
    And I think there's an opportunity there. One of our 
biggest challenges isn't dealing with unreasonable cities, it's 
dealing with cities that may not have a process at all. And so 
you can condition participation and receipt of some of those 
dollars on adoption of a comprehensive zoning ordinance for 
these kinds of things to facilitate it. So there are some 
incentives that can be built in that I don't think have to be 
punitive in their nature. But we very much support funding for 
those kind of verticals.
    Senator Cortez Masto. And so because I only have a short 
amount of time, and I would love to hear also from you, Mayor, 
as well as Representative Weninger. And let me add this to the 
discussion, because of my background in working in local and 
state, there are often times when what you do--and you talked 
about zoning issues, infrastructure issues, you know your 
community better than everyone, and not every community is the 
same.
    Mr. Hendricks. Right.
    Senator Cortez Masto. And when we're looking at going down 
the path with Federal legislation and what we need in this 
space, I want to make sure that we, at the Federal level, are 
coordinating and listening with our local governments, our 
state governments, and the private sector in each community. 
But I find, as I jump into this area, there are too many 
organizations that are out there, and nobody is talking or 
communicating.
    I know that we have a Broadband Deployment Advisory 
Committee created by the FCC Chair as well as the Broadband 
Opportunity Council and a number of other committees, who are 
all focused on addressing and solving these issues we are 
currently facing, and these various committees each have the 
same intent, but have vastly different makeup, and they're not 
always talking and sharing the same data.
    Would it be simpler if we just designated a lead Federal 
agency that really focused on addressing and bringing in those 
local governments and state governments and the private sector 
to address these issues? Or I would be curious about your 
thoughts on how we make sure we have that level of vertical 
communication and that we're all sharing information to the 
benefit of our communities and the technology that we want to 
promote.
    Mr. Weninger. I can go real quick.
    Senator, you make some great points. And I, too, come 
from--I was a city councilman, and now where I'm at, at the 
state legislature, so I kind of see all sides of it including I 
own restaurants, so I've gone through zoning and different 
things. I think one of the top problems is that there is this 
old paradigm of you have this break between the electeds and 
then you have the people who are in the zoning department, who 
definitely--I mean, they fought us the hardest, but the 
electeds wanted it.
    I guess it's different then from what the Mayor is saying, 
because they don't want to have every council meeting and have 
somebody down there, you know, the place fills up because 
they're putting up a large macro cell tower, and so they like 
this kind of being off their plate. But I think you make a 
great point on the smart cities part because also too often 
cities always think that everything in the Planning Department 
has to be paid for by fees. And I've never believed that 
because you zone a Walmart or whatever, and you have sales tax 
coming in that's generating money for the city to pay those 
salaries.
    And the amount of money and just on the Internet of Things 
that can be generated just for private business, but then not 
only that, for the cities, through smart cities, through 
efficiencies, they're going to save money where they don't have 
to go check every water meter or the trash can kind of things 
that are coming is enormous, I mean, and that's just going to 
get bigger.
    So, yes, if there can be some organizations speaking with 
one voice, or the Senate and the Congress speaking with one 
voice, and interact with the cities, I think it's just kind of 
an education process of breaking these old paradigms and how 
business has been done for so long.
    Mr. Resnick. Senator, first of all, I do appreciate your 
comments, and you're right on. Actually, my father lived in 
Nevada for 20 years, and I spent a lot of time there, and I've 
seen some of the communities that have excellent broadband 
service, and other communities in Nevada, and in Florida as 
well, that don't have the competitive choices that we all 
deserve.
    There are a lot of barriers now that have nothing to do 
with local regulations, but unfortunately these are programs 
that have been in place for many, many years, particularly by 
the Federal Government, that do prohibit innovation and 
deployment of technology.
    For example, there are communities, including mine, that 
are undergoing major roadway construction projects using 
Federal dollars. When my city undertook a several million 
dollar roadway construction project on Dixie Highway, which is 
a major road through my city, we wanted to install conduit, 
very simple. We just thought it would be used by the industry 
for broadband purposes, and if we can install it as part of 
this construction project, pay the labor and extra material 
costs, which were minimal, then this would be a win-win. But 
the Federal funds that were funding that construction project 
prohibited us from doing that.
    And that exists with respect to a lot of Federal programs 
as well as a lot of state programs. A lot of times we're doing 
these construction projects with state dollars, and you can't 
use those funds to support dark fiber and conduit, which is 
silly really. And so those are some of the things that we 
should look at eliminating.
    With respect to the committees and which organizations 
should take the lead on coordinating all of these efforts, it 
just seems that right now I think some organizations have a 
goal in mind and then set up a committee to reach that goal 
without really wanting to go through an honest process 
unfortunately.
    We're very concerned, for example, the FCC's Broadband 
Deployment Advisory Committee, which I think my colleague here 
is on, but I think that committee's goal is to adopt or suggest 
local ordinances for cities and counties to adopt to support 
the deployment of broadband technology. The problem is there is 
only 1 out of 29 members on that committee who's a local 
official, so the local officials are going to be very skeptical 
about anything that that committee comes out with.
    And another committee of the FCC, the Intergovernmental 
Advisory Committee, which I chaired until 2016, the Governor of 
Connecticut is the Chair of that committee, and she requested 
that the FCC appoint somebody from the IAC to serve on this 
Broadband Deployment Advisory Committee, but that did not 
happen.
    So I know the National League of Cities is working now with 
industry members, with stakeholders from counties, from states, 
and they've created a task force to try and come up with 
basically an education package for local officials around the 
country, and I'm sure that they would be willing to work with 
any stakeholders in this area to support broadband deployment 
in a more effective way.
    You look at municipal broadband as well. There are 
communities that the only way they will get broadband service 
is if the municipality makes the investment. In Florida, as 
well as in states throughout the country, that is prohibited. 
So you have some policies in place, either on a state and on a 
Federal level, that prohibit the type of investment that local 
governments want to make to make sure that their residents do 
have access to competitive broadband choices, but are 
prohibited from doing so by existing policies.
    Senator Cortez Masto. Great. Thank you very much.
    And thank you for allowing me to go over.
    The Chairman. Thank you, Senator Masto.
    Senator Cruz.

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

    Senator Cruz. Thank you, Mr. Chairman. Thank you to each of 
the witnesses for being here and joining us at this hearing 
today.
    Mr. Downes, there was some discussion earlier today about 
the FCC and the regulation of the Internet. As you know, the 
Internet arose in a very light-touch regulatory environment, 
and, indeed, much of the reason why we've seen such incredible 
free speech and free enterprise and opportunity is because 
innovation did not require prior approval from Federal 
Government regulations, but, rather, the Internet has been a 
haven for freedom.
    That changed 2 years ago when the FCC for the first time 
asserted its authority to regulate the Internet as a Title II 
public utility, treating the Internet under an authority that 
was designed in a very different context some 80 years ago and 
not designed with the Internet in mind.
    In my view, that decision was lawless, it was a power-grab 
from the FCC, and it was profoundly dangerous for a Federal 
regulatory agency to assert the authority to regulate pricing 
in terms of service on the Internet. One of the great virtues 
of the Internet has been innovation without prior government 
regulation. Chairman Pai has wisely stated his intention to 
reverse that lawless power-grab.
    Could you tell this Committee, Mr. Downes, in your 
judgment, what are the benefits to ensuring that the Internet 
remains in a light-touch regulatory environment without Federal 
regulators demanding preapproval before innovation?
    Mr. Downes. Sure. Thank you for that question, Senator 
Cruz. So in my filings on the 2015 Order, I shared your view 
that, net neutrality aside, the principles aside, the real 
issue was public utility reclassification, and that was my 
chief concern with the 2015 Order. I don't think we have to 
look any further than some of our counterparts, particularly in 
Europe, where permissionless innovation has not been the 
starting point.
    And in my research on disruptive innovation, what we find 
is that because the speed of change, particularly with digital 
technology, but you know lots of other technologies, genomic 
technologies and materials technologies, the pace of change is 
so rapid, in a good way, that even the best intended regulatory 
oversight can unintentionally get in the way.
    And my view was that the reclassification of public utility 
was a very dangerous move in that regard in that it could have 
led to, as you say, rate regulation and other kinds of things 
that were there, now forbeared from, but could have been 
unforbeared from in some future administration. So I shared 
that concern and I continue to share that concern.
    Senator Cruz. And I will commend you for introducing the 
word ``unforbeared'' to this Committee. That may be a first, 
but indeed it is a danger well to be worried about.
    Let me shift to a different topic. Mayor Resnick, earlier 
this year our committee held a hearing on examining ways to 
improve our Nation's infrastructure, and at that hearing, I 
asked witnesses if deploying small cell networks employing 5G 
wireless technology could serve as an important component to 
improving infrastructure.
    The Mayor of Miami Beach, Philip Levine, responded by 
saying, ``Whether it's telecommunications or bridges or tunnels 
and roads, Congress could appropriate a trillion dollars, but 
nothing will ever get done because the process is absolutely 
broken at the permitting level. I don't care if it's telecom or 
a new road, the process is broken. It's not even about the 
money. It's about the process. It needs to be streamlined. 
We're in a race with the rest of the world. We're all wearing 
handcuffs and weights. It's priority number one, and I see it 
as a Mayor.''
    Do you agree with Mayor Levine? Is the process at the 
permitting level a major barrier to effective infrastructure 
deployment?
    Mr. Resnick. Well, thank you, Senator. And actually Mayor 
Levine and I are good friends, and his city is----
    Senator Cruz. I figured that was the case.
    Mr. Resnick.--a friend of mine, and they're dealing with 
tremendous issues in Miami Beach, including sea level rise and 
flooding and having a good chunk of their property basically 
underwater as opposed to waterfront in a couple years, as is my 
city. So we're all dealing with a lot of challenges.
    I don't think permitting is broken. I think with respect to 
this new technology, as I stated in my remarks, it's a 
disruptive force. We haven't had experience dealing with it 
before. We need to educate our staffs and local officials 
throughout the country on how to properly deal with the 
technology.
    We are in the process now in Florida, and actually Miami 
Beach was one of the first in Florida to do this, we are 
updating our local codes to address the new technology, 
particularly for access to our rights-of-way because that 
hasn't occurred before. But there is nothing in place now that 
would prohibit the deployment of new small cell technology in 
our rights-of-way, and we are moving forward to support that 
technology, we just need some more education and, frankly, a 
little bit of time to update our codes.
    The bill that, for example, passed in Arizona will go a 
long way in doing that, but we are also very concerned with 
preemption because there are other communities that have 
achieved this through agreements. For example, San Antonio, 
Arizona, is considered a model around the country for having an 
excellent agreement with Verizon that then has been used by 
that city and others as models with other providers around the 
country.
    If the Federal or state government preempts local 
jurisdiction with respect to these issues, they will prohibit 
us from entering into those types of win-win agreements with 
the providers. So we have to be cautious about basically 
preempting local authority and discretion as well because then 
you'll preempt these types of win-win scenarios that can be 
achieved.
    Mr. Weninger. Mr. Chairman, could I possibly address that 
real quick?
    Senator Cruz. In a brief moment, yes.
    Mr. Weninger. OK. Yes. I just respectfully disagree. Our 
legislation puts a 75-day shot clock, puts normal fees, and I 
went through earlier some just really crazy year-long 
processes. We had nine master agreements done by Verizon that 
took 3 years to get done. Technology is passing you by, by that 
point. And I just think this infrastructure is critical.
    We did it unanimously in Arizona. There's a way of getting 
it done where you still protect those local rights, but allow 
them to deploy this technology in a very efficient, fast 
manner. We also did batching to where if they do have a 
problem, they come in batches of 25 that they're putting in, if 
they do have a problem with two or three of those, they can 
take those out and the process goes a little longer, and then 
the others are moving efficiently through the process at that 
time.
    Senator Cruz. Very good. Thank you.

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

    Senator Gardner [presiding]. Thank you.
    Senator Markey.

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

    Senator Markey. Thank you, Mr. Chairman, very much. I think 
we all agree that investment in broadband infrastructure has 
broad bipartisan support, and there's a simple reason. 
Obviously it's the engine of innovation in our society, a job-
creating machine, it's chaotic, it's entrepreneurial, it goes 
right to the enterprise identity of our country, but we always 
have to try to strike a balance.
    And so in 2015, the broadband companies, the wireless 
companies, invested $87 billion in new infrastructure upgrades. 
That's great, and that's what we want, but at the same time, 
one half of all venture capital in the United States went to 
software and Internet-specific startups, that is, companies 
which rely upon net neutrality to guarantee that they can reach 
all 320 million people in America for the business model that 
they are trying to create. So that's a nice balance: $87 
billion in infrastructure upgrades, half of all venture capital 
goes into software and Internet-specific startups. Perfect 
balance.
    So my question is, Do each of you believe in a free and 
open Internet? Yes or no?
    Ms. Cooper?
    Ms. Cooper. We are not yet a service provider. And we 
expect that we're going to be subject to the rules of the 
Commission when we do provide service in a few years, and we 
expect that the rules are going to have many twists and turns 
as Congress, the Commission, and the courts continue to look at 
this.
    Senator Markey. So yes or no? Yes, you do? You believe in a 
free and open Internet?
    Ms. Cooper. We're not yet an Internet service provider, 
sir.
    Senator Markey. Oh, I see. OK. Well, let me just say that I 
have a document here from 800 innovators, startups, businesses 
from all 50 states, 800 of them, who have sent a letter calling 
for the retaining of the net neutrality rules so that they will 
be able to continue to be job creators in this environment. And 
that's the tension here, because in the absence of a guarantee, 
you can't raise the money from the venture capitalists in order 
to reach their customers if you are going to be dependent upon 
the broadband carriers to be able to provide the services.
    So to the extent to which we all agree that there should be 
more broadband, there should be, and $87 billion of investment 
says we're heading in that direction. To the extent to which 
new companies want to get in, we shouldn't have laws to 
prohibit them from getting in at the city and town level. They 
should be able to get in. They should be able to provide the 
services. Broadband companies don't like that either. They want 
to shut down that kind of competition, there's no question 
about it.
    What they also want to do, broadband companies, is they 
want to, kind of, monetize the privacy of Americans. And we 
just had a successful effort by the Republicans to pass a 
congressional review act repeal of the privacy laws that had 
been built by the FCC into law in order to protect consumers so 
that you could not sell their information if permission was not 
received from a consumer.
    Do each of you believe that there should be a protection of 
privacy, that a broadband provider actually is required to 
provide so that you have to receive permission before you can 
sell that information?
    Mr. Resnick.
    Mr. Resnick. Well, Senator, actually when I was Chair of 
the FCC's Intergovernmental Advisory Committee, we took up 
these issues, and we supported unanimously the net neutrality 
order as well as the privacy rules that were put in place.
    Senator Markey. Thank you, sir. I appreciate it. Yes.
    Mr. Weninger.
    Mr. Weninger. Senator, respectfully, this really isn't my 
wheelhouse.
    Senator Markey. OK. That's fine.
    Mr. Hendricks?
    Mr. Hendricks. Although not a service provider, we do 
absolutely support consumer privacy protections, just not the 
ones the FCC had adopted.
    Senator Markey. Mr. Downes.
    Mr. Downes. Yes, I agree. The framework that the FTC has 
used for years, which is opt-in, has worked extremely well--I'm 
sorry, for opt-out, which has worked extremely well. What the 
FCC wanted to do was opt-in, and I don't think that was a good 
idea.
    Senator Markey. Yes. Ms. Cooper.
    Ms. Cooper. As we design our constellation, we are 
committed to building a system that can protect the privacy and 
security of our customers.
    Senator Markey. Yes. Well, obviously the problem with opt-
out is that, by definition, they've got all your information 
and they're using it unless you opt-out, whereas with opt-in, 
they've actually got to come to you and say, ``May I have your 
permission to use all of the financial data that our company 
has gathered about you, health care data about your daughter 
searching for information about anorexia at age 13, that you 
have to get their permission, the family permission, before you 
start selling that information to 50 companies that might want 
to start advertising right there on that site toward that 13-
year-old girl. So there's a big difference between opt-in and 
opt-out.
    The FCC I think had it right. OK, people are buying this 
service, the broadband service. It's expanding dramatically. 
Privacy is now basically for sale across our country. And these 
are the most sensitive pieces of information about a family 
that can be obtained. So we're going to have to just continue 
to have a national fight over this issue because I think it's 
as fundamental an issue as we have in our country.
    Thank you, Mr. Chairman.
    Senator Gardner. Senator Peters.

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

    Senator Peters. Thank you, Senator Gardner. And thank you 
to all of our panelists today for your testimony.
    It's in my mind, before we embark on any kind of 
comprehensive infrastructure package, we need to have a real 
complete picture of the landscape that we're dealing with. And 
as many of you know, this committee passed the MOBILE NOW Act 
last January, which I think was an important step, one step of 
what will be many steps to help that and facilitate that 
knowledge.
    One provision of the bill that would establish a database 
of Federal communications facility installations, in fact, I 
sponsored an amendment to that provision, which would require 
agencies to help states and localities contribute to this 
database with information about their own broadband assets. 
Having the database include Federal, local, and state data 
certainly will make it more comprehensive and a better tool for 
stakeholders to make these kinds of decisions.
    However, this database only covers assets owned by Federal, 
state, and local governments. We still face challenges in 
understanding and mapping the scope of private assets, although 
sometimes it can be even easier to deploy broadband on private 
lands. And I believe private and public should seek to 
constantly learn from and help one another. And so the Federal 
Government should do everything possible certainly to 
streamline, but also needs private cooperation to understand 
how we can act more quickly.
    So, Mr. Resnick, my question is to you. A report last year 
by the FCC's Intergovernmental Advisory Committee, which, of 
course, you chair, found that the FCC lacks the data on the 
location of wireless towers and other facilities, the providers 
who use each tower, and other information that would streamline 
local and Federal decisionmaking.
    So if you could take a moment and describe further the 
challenges that we face with collecting this data and creating 
the comprehensive map necessary for broadband service. And then 
also in your work, if you have seen any models that would be 
helpful in dealing with the situation?
    Mr. Resnick. Well, thank you, Senator. I do appreciate the 
question. And that is correct, that was an important component 
of the report that the IAC issued in, I think, December 2016, 
so it's recent.
    We were actually quite stunned and surprised that the FCC 
did not have data as to what facilities were out there that 
would be available for collocation for providers to use. We 
just assumed this is an agency tasked to do this, and they're 
all specialists, and they spend a tremendous amount of time 
researching the industry and researching what facilities are 
existing, and they don't have any of this information.
    And because there are several reasons. One, not all towers 
are required to be registered. There is only actually a very 
small percentage of towers that are required to be registered. 
It has to do with the location and the size of the towers. And 
often even the industry doesn't know what facilities are out 
there that might be possible for collocation.
    There are some local governments that have in their local 
codes mandated that all providers and infrastructure companies 
register their facilities with the local governments. And 
there's usually no fee for such registration or a nominal fee 
just to cover the administrative costs with maintaining that 
database, and that has been useful, both for regulators and 
first responders who need to know where these facilities are as 
well as for the industry members that are looking to collocate 
equipment on these facilities. So I think that would be 
incredibly helpful throughout the entire country. And I'm sure 
National League of Cities and other government organizations 
could work with their partners to try and come up with models 
that might be appropriate for the Federal Government to look 
at. Thank you, sir.
    Senator Peters. I appreciate that. Any other panelists that 
would like to comment on that?
    Mr. Hendricks. Just very briefly, Senator, I would say that 
I agree. Nokia is a major provider of the infrastructure and a 
partner in the FirstNet project that's going forward. We saw 
firsthand that it's very difficult sometimes to know what 
assets were out there, both land mobile radio towers, private 
towers, and other things, what state of readiness and whether 
they have been hardened.
    That information, in our experience, exists in various 
places. There are system integrators that build networks for 
companies. There should be a model where we can cooperatively 
share that information and improve the picture, I think.
    Senator Peters. All right. Yes, ma'am.
    Ms. Cooper. I would just like to add more generally that 
the knowledge of any transmitter is a valuable piece of 
information, particularly as you expect different technologies 
to share spectrum, to operate, and co-exist. Whether that's the 
method that's applicable for every technology maybe remains to 
be determined, but I do think that the knowledge of locations 
is an important piece of the prospect of spectrum efficiency 
and sharing.
    Senator Peters. I appreciate it. Thank you so much.

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

    Senator Heller [presiding]. Thank you, Mr. Peters.
    Mr. Chairman, I think I yield myself 5 minutes. Thank you. 
There's a lot of temptation sitting at this seat to make a lot 
of decisions, but the biggest temptation is this muffin that's 
sitting right here in front of me. I'm quite sure you had that 
set up.
    [Laughter.]
    Senator Heller. Anyway, I want to thank the panel for being 
here and taking time. A lot of good insight, a lot of good 
history, and I certainly know that this is an issue that's very 
important to my state, and I certainly appreciate the other 
Senator from Nevada that was here earlier and her questioning, 
and I know this is just as important to our Chairman here in 
South Dakota, as it is in the state of Nevada.
    But I want to share real quickly, briefly, a success story 
that we have in the state of Nevada, and it's an electric 
company called Valley Electric Association. It's located in a 
small city just outside of Las Vegas called Pahrump. Most 
people do think of it as just an electric company, but they 
have a great story about their recent success in broadband 
deployment.
    They partnered with a company out of Las Vegas called 
Switch, and I'm certain most of you are familiar with Switch, 
where they were able to run a 1-gig fiber option line from Las 
Vegas to Reno. I don't know that I've heard of any other 1-gig 
fiber optic highways that run nearly 500 miles through some of 
the smallest rural communities that we have in the state. And I 
would argue that there aren't even urban areas in the state of 
Nevada that have this kind of access for their schools or 
hospitals and even some of their residents.
    But Valley Electric helped engineer this path. They 
prepared the poles. They submitted the applications to get all 
this done. And it's because they saw a bigger picture. And this 
invitation that I had to spend time with them, they went 
through this, and the success that they were able to see. They 
do know this, that if communities don't have broadband, the 
people will leave, and that has been a concern for the rural 
portions of our state. You can't operate a school, you can't 
operate a hospital, or a business. We have communities in our 
state that you can't even swipe a debit card because they don't 
have access.
    But the fiber route that they prepared is like a highway. 
And most of you are aware of this, you need off-ramps. And so 
they're building those broadband off-ramps, and they're facing 
some serious barriers. So they have the fiber, but it's the 
off-ramps now that are causing the problems, and they're 
problems that mostly come with the Bureau of Land Management.
    Sandy Valley, Nevada, is a good example. They already have 
the electric lines that were permitted into that valley, they 
just need to add the cables for broadband, and that's taken 10 
months filing the application, and yet after 10 months, they 
still do not have approval. Federal agencies like BLM are 
hamstringing private companies that are using their own money 
to invest and expand infrastructure into places no one else 
wants to expand.
    Valley Electric will face the same challenges in Amargosa 
Valley; Beatty, Nevada; and every rural town that D.C. has 
probably never heard of, but ones that most of us have visited 
at one time or another in our own states.
    I believe that people in these communities deserve 
broadband, and Valley Electric told me that the delayed 
applications from the Federal land agencies is the number one 
barrier to broadband deployment. So I have legislation I'm 
working on with the Chairman that will streamline the Federal 
permitting process.
    Mr. Hendricks, you mentioned that in your testimony. And I 
appreciate your comments, and most important, to ensure that 
there's a shot clock that these Federal agencies have to abide 
by.
    And, Mr. Weninger, you mentioned that in your own 
legislation back in Arizona and the difference that that made. 
I agree with you and believe that we should do that at the next 
level, which is our level.
    So I guess I want to start with Mr. Downes and ask if these 
Federal agency complaints that I get from the state of Nevada, 
are they common across the country, the eastern and the western 
portions?
    Mr. Downes. Yes. Thank you, Senator. And the funny thing is 
I think--my understanding is that much of the fiber 
infrastructure for California is actually built just on the 
Nevada side of the border because the California people made it 
even more difficult than in Nevada.
    So there's no question that a lot of these delays have no 
public interest value whatsoever. And, again, shot clocks, even 
the shot clocks that exist right now in wireless, they're very 
generous in terms of how many days that they are. And I think, 
yes, certainly in the western United States in the 
intermountain region, where obviously most of the land or much 
of the land is federally owned, not surprisingly, the 
complaints you hear most are about Federal management.
    Senator Heller. Mr. Downes, is this an issue of process or 
is it an issue with resources, or is it just an accountability 
issue that we're dealing with, with some of these agencies?
    Mr. Downes. Well, it's some of all of those. It really 
depends on who you're talking about and where you're talking 
about. In a lot of cases, there are no processes. In a lot of 
cases, certainly there is resource constraint as well. 
Obviously, Federal agencies, as well as municipalities, they 
don't really have competition per se. So if you're not getting 
your permits done as quickly as you would like from them, it's 
not like you're going to go somewhere else to get them. And I 
think that's actually where the solution comes in.
    As I say, the best incentive is to buildup sort of 
competitive spirit. And we saw how Google did that so 
brilliantly in the initial rollout of Google Fiber, getting all 
those cities to compete, not by offering money, not by offering 
tax incentives, but by offering to streamline their processes, 
a single point of reference, give access to city buildings and 
other property.
    And I think as the states and the localities start to 
recognize the real economic opportunity that 5G and next-
generation wired Internet provides, you're going to start to 
see more of that, that these locations will say, ``We want that 
development here, we want to be leaders in that,'' and they 
will suddenly discover just how much better a job they can do 
even given the resource constraints that they have.
    Senator Heller. Yes, but my problem when I talk about 
process is with the government agencies themselves. It doesn't 
matter--Nevada is 110,000 square miles. It doesn't matter which 
community I go to, they will tell me that their BLM office is 
the worst when it comes to dealing with that, and I'm going to 
guess that it's true in any other state that I go to. But right 
now, I'll tell you that Pahrump believes that the office in Las 
Vegas is the worst in the country because they can't get these 
applications through.
    How do we hold these agencies accountable?
    Mr. Downes. So my experience, Senator, is certainly more at 
the local and state level, not with the BLM and other agencies. 
But, you know, you control the power of the purse, and that's 
where you can hurt them or get them where you want them. Again, 
minimum requirements for how quickly they deal with things, and 
penalties, I suppose, to the extent that Congress can implement 
them, for the agencies that just don't follow the rules that 
they're set up to do with their reasonable rules.
    Senator Heller. Now, Mr. Weninger, you served with my son-
in-law in the legislature.
    Mr. Weninger. Yes, yes, I did. And I know your daughter.
    Senator Heller. Have you solved these problems in Arizona, 
the problems that we're seeing in Nevada? What processes did 
you go through, not only for your own legislation, but what did 
you do to overcome--because you have as much public lands as we 
do, at least close? How were you able to overcome some of these 
Federal agencies and able to implement some of the programs 
that you've been successful at doing?
    Mr. Weninger. It's difficult. Basically, ours probably 
isn't going to affect the BLM land. We will still have to deal 
with that. But one thing we did on the legislation, we put a 
shot clock within the shot clock. So you have to tell us within 
20 days whether or not the application is complete or not 
because we don't want you running clear up to 70 days and say, 
``Well, no, we don't have everything.'' But then that's within 
the 75 days, so it's not in addition to. And so I think that 
helps a lot.
    But we have the same problems you do. I think somebody else 
mentioned, it's because so much of our land is Federal land 
that we're kind of held captive by that in the West.
    Senator Heller. Thanks for the question. I sit in the 
Chair, so I get to go 8 or 9 minutes, right, Mr. Chairman?
    [Laughter.]
    Senator Heller. Ms. Klobuchar.

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

    Senator Klobuchar. All right. Thank you to both of you, and 
thank you. I apologize for being late. We had a Judiciary 
Committee hearing with FBI Director Comey, so I'll try to use 
the same tone with all of you that all the other Senators were 
using in that hearing. I'm just kidding.
    [Laughter.]
    Senator Klobuchar. OK. So I have been pushing hard for a 
competitive agenda for this country, and I am so glad that we 
launched the Senate Broadband Caucus, which includes myself, as 
Chair, and Capito, King, Heinrich, and Boozman. And I really 
see broadband as the infrastructure challenge of our time.
    My favorite story of the week was hearing when I was in 
northern Minnesota about a cancer doctor who for years when he 
couldn't be at the hospital and he would be sent something at 
home about a patient in some kind of urgent situation, he would 
have to go to the McDonald's parking lot to look at X-rays. OK, 
this happened in northern Minnesota in a pretty mid-sized town, 
not a small town. So those are the kinds of things we're 
encountering.
    So we're pushing hard to get funding, whether it is changes 
to the universal service fund, whether it is this major 
broadband infrastructure discussion that we're having, and I've 
gotten both Secretary Mills and Secretary Chao to commit that 
it should be part of any infrastructure package. We're hoping 
we hear from the White House about specific infrastructure 
package. The Senate has a package that's a trillion dollars 
with a major Internet component. And I just think we need to 
get this done.
    So I'm going to start with something more specific, and 
that is, I've advanced broadband legislation to make deployment 
easier by requiring transportation and broadband providers 
during construction to just dig once, and this legislation 
passed the Commerce Committee in the MOBILE NOW Act, it passed 
in January.
    Mr. Downes, you testified that ``Dig Once'' policies can 
reduce the cost of deploying fiber under highways in urban 
areas by up to 33 percent and up to 16 percent in rural areas. 
Would those kind of savings make some high-cost areas more 
economical to serve?
    Mr. Downes. Absolutely. And thank you, Senator Klobuchar. 
It's good to see you again.
    So, look, I can't think of any reason, and I can't find 
anybody who doesn't agree with the idea of ``Dig Once.'' It 
really just makes so much sense. And those numbers that I gave 
in my testimony came from the GAO. I think they're quite solid. 
So absolutely, we bring down the cost by putting that conduit 
in place. Then we can put the fiber in. It can only be to a 
benefit. I can't think of any reason not to do it.
    Senator Klobuchar. OK. Thanks. Something else, I just keep 
looking for ways to show, especially some of our urban friends, 
that the gap that we're seeing is in rural areas. And yet cost 
of living in rural areas are lower. There are reasons we want 
to have people just live throughout our country and not just in 
congested areas. And we also have a lot of cool businesses 
being developed there, and that has been the heart of our 
economy, the way we're able to develop small businesses and 
then they grow, but they can't without broadband.
    I was actually at one business in a small town where there 
is not good enough broadband, and she's up to 25 employees. She 
makes chains for chain jewelry. She has to have her sales staff 
located 100 miles away or so in Fargo because they have 
Internet there, and so then she's able to communicate with them 
by phone.
    So Senators Capito and Sullivan and I have introduced this 
bill to conduct an analysis of the effects of broadband 
deployment and adoption in the U.S., asking the Commerce 
Department to do that.
    Mr. Resnick, with your experience with the National League 
of Cities, would better economic data help mayors and other 
community leaders make the case for investing in broadband 
deployment?
    Mr. Resnick. Thank you, Senator. Yes, absolutely. We're 
always trying to measure the economic development effects of 
infrastructure. It's not something that a lot of local 
governments are easily accomplished to tackle. And so if the 
Federal Government could support that effort, absolutely. If we 
could show the benefits of broadband technology in terms of our 
economic development, I think it would encourage investment, 
not only by local governments and state governments, but also 
probably by the private sector as well. Thank you.
    Senator Klobuchar. OK. Thank you very much.
    This one is for you, Mr. Hendricks. Broadband 
infrastructure deployment can often be hampered by slow and 
redundant permitting processes, particularly when it comes to 
infrastructure siting on Federal lands. For those rural and 
tribal residents living near Federal land, this inefficient 
process can be the difference between living in an unserved 
community and modern broadband access.
    I've been working to streamline this process, and there are 
some provisions in this MOBILE NOW bill I just referred to that 
would improve permitting and encourage deployment on Federal 
lands by developing a common form for applications and 
establishing a clear point of contact with Federal agencies.
    Could you talk about some of the primary obstacles that the 
broadband service providers that your company works with face 
when trying to deploy broadband infrastructure on Federal 
lands?
    Mr. Hendricks. Well, to be fair, I think we have much more 
experience when it comes to deploying in city centers, but we 
do obviously work with providers across a range of 
jurisdictions. You've noted several provisions in the MOBILE 
NOW Act. By the way, we fully support all of those provisions 
that you have put in there.
    Shot clocks, response times, the requirement for individual 
applications for individual cells as opposed to figuring out a 
way to aggregate and consider multiple sites at a time, which 
also requires you to do multiple impact studies, those things 
begin to layer in cost. And so we certainly support the idea of 
shot clocks and taking a look at other ways to incentivize, 
perhaps even making clear to BLM and others that, ``You have 
this authority. Use it or lose it. You know, at some point, 
we're going to deem granted some of these applications if you 
don't give the proper attention to them.''
    Senator Klobuchar. OK. Very good. I note that most of the 
rest of my questions, they say, ``Senator Nelson asked this,'' 
``Senator Cortez,'' so I will not use the usual Senator theme 
of just being redundant anyway, and I will turn this over to 
Senator Blumenthal, my colleague. Thank you, all of you.

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

    Senator Blumenthal. Thank you, Senator Klobuchar. I, too, 
will try to avoid being redundant. I know you've been asked a 
lot of questions about net neutrality and some about broadband 
privacy. The threat to net neutrality and privacy on the 
Internet I think are two of the most profound challenges we 
face. They've been set back in recent weeks by Republican 
colleagues, by pronouncements from Chairman Pai, and by 
President Trump, which, in my view, have undermined essential 
values of both privacy and open Internet that are key to 
investment in broadband.
    According to a recent study by the Pew Research Center, 91 
percent of adults agree or strongly agree that, quote, 
``Consumers have lost control of how personal information is 
collected and used by companies.'' Another study found that 
nearly half of American Internet users avoid online activities, 
including online purchases and civic activities due to their 
security and privacy concerns. That apprehension on the part of 
Americans certainly inhibits investment in broadband, in 
infrastructure, in all of the communications technology that is 
vital to our future economically, not to mention in quality of 
life.
    So let me ask you, Mr. Hendricks, do you think that these 
threats to privacy are good for investment in the Internet, or, 
on the contrary, are obstacles?
    Mr. Hendricks. One of the things that Nokia, as a 
technologist, thinks a lot about is where we will be in the 
next 5 to 10 years with the Internet of Things and the 
connected programmable world. And we talk a lot about 
trustworthiness as an important metric for people in uptake and 
use of those technologies because more and more of those 
technologies are going to require you to put more and more of 
your physical, financial, and personal life at risk. And so it 
is something that we think a great deal about. We are 
constantly talking in the design of our products, how do we 
make them more secure by design? How do we incorporate privacy 
protections? And I think we've contributed a lot to the policy 
conversation in town about how you do that.
    I think the one thing that I hope comes out of our 
participation in that debate is we think that it is a good 
thing to talk about enhanced privacy protections regularly. Our 
big concern with what the FCC did was that it began to make 
distinctions between sectors of this ecosystem who could use 
information one way and not another.
    And so I think our concern is let's take a fresh look at 
how we can potentially improve privacy protections across all 
sectors because we don't yet know how this marketplace is 
evolving. Service providers are becoming content providers, 
edge companies are become service providers. We have to make 
sure that we develop these protections robust but technology-
neutral.
    Senator Blumenthal. Well, I've introduced a bill, it's 
called MY DATA, the Managing Your Data Against Telecom Abuses 
Act, along with Senator Udall. It endeavors to protect this 
data by enabling the public sector and the government to be 
more effective in protecting this kind of data and enhancing 
confidence in exactly the systems that you just mentioned. The 
legislation ensures that the FTC's jurisdiction in the Internet 
ecosystem includes broadband providers, a loophole that now 
exists in the current law. And I hope that members of this 
panel and the companies and interests you represent will 
support this legislation because I think it's important to your 
interests, the public's interests, the industry's interests, 
and restoring consumer privacy and data security across all 
Internet platforms. So thank you very much for being here 
today.
    Thank you, Mr. Chairman.
    The Chairman [presiding]. Thank you, Senator Blumenthal.
    It has been a great discussion, and we really do welcome 
and appreciate your input. I think this lends a lot to the 
conversation that we're having about the best way to increase a 
more rapid deployment of this technology across the country so 
that we can pursue not only high-speed Internet services and 
broadband in areas of the country that don't receive it today, 
but as we look at 5G and everything we need to do to stay ahead 
of the curve there, we want to get there first, and that 
requires obviously an awful lot of work at every level of 
government. And so we've heard from several state and local 
leaders today as well as those that are working in the industry 
to make all this happen.
    A final question just to close it out, in MOBILE NOW, as 
you probably know, we address some of the issues regarding 
deployment and Federal agencies. I'm wondering if there is 
anything that Congress can do to get folks to work together in 
delivering broadband services to our communities in a 
reasonable amount of time in addition to what we're doing with 
respect to the Federal piece of this in the MOBILE NOW bill? So 
any final pieces of advice or suggestions as we try to move 
quickly in putting policies in place and creating conditions 
that are favorable to the build-out that we need to see?
    Yes, Ms. Cooper.
    Ms. Cooper. The frequencies that are enormously valuable--K 
band, Ka band, and V band--the rules for many of these 
frequency bands that will carry next-generation broadband 
services, including by satellite, are immature and, in some 
cases, out of date, and it's very important to ensure that as 
those rules and allocations are considered, that the 
technologies that can reach Americans with broadband are 
considered as part of those allocations. We consider satellite 
to offer real promise for broadband access, and we want to make 
sure that in those bands, satellite services are considered. 
Thank you.
    Mr. Downes. Senator, I would just add, I know we weren't 
talking specifically about spectrum today, but obviously, as 
you know, the most valuable now spectrum that's available 
that's underutilized or unused is held by Federal Government 
agencies, and we need to do a much better job of offering the 
right kinds of incentives, the right kinds of carrots and 
sticks, to get some of that either shared or freed up for next-
generation applications.
    Mr. Hendricks. I would add to that, Mr. Chairman. I'm sure 
that Members of the Senate are tired of hearing of the spectrum 
issue because it seems like every year you get a wish list from 
industry about doing spectrum things.
    As technologists, the reason that spectrum remains an 
important and critical topic on an ongoing basis is because the 
more bands that are made available to us, as researchers and 
developers of the technology, the more flexible the 
infrastructure is that we can develop for carriers of all size, 
rural ones, large ones. Different bands with different 
characteristics have different deployment scenarios.
    So continuing to work on spectrum--and you've been 
excellent--is a core priority. So passing MOBILE NOW is a great 
step because of the 3-gigahertz spectrum that is in there, but 
I would encourage you to keep thinking and keep working on 
those spectrum issues because the more options you give us, the 
better the solutions we can develop will be.
    The Chairman. It does seem like almost every issue that 
comes in front of this committee comes back to that issue of, 
how do we get more spectrum? So thank you.
    Mr. Weninger.
    Mr. Weninger. Mr. Chairman, thank you. I think you're off 
to a great start. And obviously I'm pretty proud of the 
legislation that a big team of ours put together, and if you 
use any of that on a national level, I think that would be 
incredible.
    I think some people just don't realize how quickly some of 
these companies and apps are scaling. And so I think it's very 
tough for the cell phone companies to predict, and they just 
need to keep building. I own restaurants, and right now food 
delivery through an app is exploding. We have four different 
companies that we do it through, and it's adding onto our 
revenue every day.
    Also in my district, we have four different autonomous 
vehicle companies working in my district, which is mainly 
Chandler, and that's going to be on the same platform. And 
these things are coming so fast that if we don't really hurry 
this up, we're going to be left way behind the eight ball. 
Thank you.
    The Chairman. Thanks.
    Mr. Resnick. And, Mr. Chairman, thank you again for the 
hearing today and for inviting us to participate. I would just 
request that local governments be part of the process in 
developing these policies. Ultimately, if facilities are going 
to be deployed, whatever type of facilities, from the small 
device that my colleague here showed you--I was actually going 
to bring a model of the 28-cubic-foot cabinets that another 
company wants to install on our rights-of-way, but I couldn't 
get it on a plane. And I was going to have a blow-up model of 
it brought in, but that wouldn't have probably worked very 
well.
    But, so they're not always so small. There are other--
that's the problem with advances in technology, it's not all 
the same, and local governments have to deal with these 
different types of technology that are now looking for access 
to the rights-of-way. I do not want a 28-cubic-foot 
refrigerator sitting on the sidewalk in front of my house, no 
offense. I don't think you would want that either. So we do 
have to be part of the process to come up with solutions.
    And I do want to support, though, the comments that some of 
your Senator colleagues made today. There does need to be 
confidence in the technology. Broadband is a great technology, 
but it can be used for inappropriate purposes. I think every 
local government in the country by now has had a data breach, 
and they're tremendously disruptive. When our data is breached 
by somebody accessing our databases, our employee records, our 
customer records, tremendous impacts. The City of Fort 
Lauderdale shut down for 3 days because its internal data was 
breached.
    So I think there does need to be greater confidence in the 
technology so that these inappropriate uses of broadband do not 
occur, and I think that would go a long way to support 
adoption. Thank you again.
    The Chairman. Thank you.

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

    Senator Moran. Mr. Chairman, I detected a groan when I 
walked in the room----
    [Laughter.]
    Senator Moran.--not necessarily by the witnesses, but by 
others, and including you.
    [Laughter.]
    The Chairman. I thought I had my mike turned off. Sorry.
    [Laughter.]
    Senator Moran. So I will submit my questions in writing, 
Mr. Chairman.
    The Chairman. All right. Thank you, Senator Moran. That was 
not a collective groan about you, but nonetheless, we 
appreciate that. We'll make sure that your questions are 
answered for the record.
    And I would just say to our witnesses, again thank you for 
being here. And we will keep the hearing record open. You will 
get questions for the record, and if you could respond to those 
as quickly as possible, we usually like to try and get that 
closed out within a couple weeks' time, that would be most 
appreciated.
    So with that, thank you again, and we'll continue this 
conversation/discussion. Hopefully it will lead beyond just a 
discussion, but really substantive steps forward in terms of 
how we address these issues and try and find that balance that 
was discussed today, work with the various entities of 
government to streamline, expedite, and make it easier to get 
this technology out there and all the benefits that come with 
it.
    So thank you. This hearing is adjourned.
    [Whereupon, at 12:16 p.m., the hearing was adjourned.]

                            A P P E N D I X

     Response to Written Question Submitted by Hon. Jerry Moran to 
                            Patricia Cooper
    Question. As your written testimony states, next generation 
satellite systems have vastly improved their capacity, lowered latency 
rates, and met equivalent pricing to their terrestrial broadband-
providing competitors in recent years.
    Can you explain the importance of taking a ``technology-neutral 
approach'' in any comprehensive infrastructure or tax legislative 
package considerations by this Congress and Federal regulating 
agencies?
    Answer. SpaceX sees great potential for constellations of 
satellites operating close to the earth to deliver reliable, high-
quality broadband service to consumers throughout the United States, 
including those areas that have been underserved or not served at all. 
However, programs to encourage broadband infrastructure build-out and 
service adoption often don't capture satellite technology.
    By covering the entire globe, such constellations can overcome the 
``last mile'' connectivity challenges such as terrestrial build-out 
costs, environmental regulations, property rights issues, and other 
regulatory obstacles. The satellites can ``see'' customers, no matter 
where they are, whether urban or rural, at the same nominal incremental 
cost to add any customer for broadband service.
    The deployment of U.S.-based satellite broadband constellations 
are, fundamentally, national infrastructure projects, even though they 
are private-sector driven and many components of the infrastructure 
will be in space. Although satellite constellations have different 
network elements than traditional ground-based networks, such as fiber, 
fixed wireless or mobile broadband, we urge Congress and the 
Administration to ensure that the nation's programs and incentive tools 
for broadband infrastructure build-out are extended to space-based 
constellations. Given heightened Congressional and Administration 
emphasis on rural high-speed Internet access and broadband 
infrastructure, the time is ripe for Congress and Federal agencies to 
reconsider how satellite-based systems can participate.
    Beyond defining the network elements that qualify for programs, 
other program requirements can unintentionally exclude satellite-based 
solutions. For example, grant programs that require technical support 
in every county where service is offered are unworkable not only for 
satellite broadband providers, but for any regional or national service 
provider. The National Broadband Mapping system, too, should capture 
data about satellite-based broadband services made available 
nationwide. This would not only enhance the understanding of our 
broadband landscape, but also provide a more accurate basis for shaping 
future broadband programs designed to expand broadband access for all 
citizens.
    SpaceX encourages the Committee to ensure that satellite-based 
broadband infrastructure is considered and genuinely captured in any 
infrastructure, incentive, or tax policy legislation undertaken toward 
expanding broadband access in the United States. Such an approach will 
ensure that Congress and regulatory agencies consider all technology 
platforms available to deliver broadband to American consumers.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Dan Sullivan to 
                            Patricia Cooper
    Question. During the hearing, we talked a lot about the need to 
streamline the infrastructure permitting process for next generation 
technology, especially for deploying 5G technologies. In many parts of 
Alaska, however, there still is no connectivity, and the most realistic 
solution for many of these places is communications brought to them by 
satellite.

    a. Ms. Cooper, what opportunities does satellite technology bring 
to rural communities, such as in Alaska, for receiving broadband?

    b. What deployment barriers does the satellite industry face in 
deploying these new technologies, and what solutions do you propose, 
specifically where can Congress help in reducing those barriers?
    Answer. Satellite-based Internet infrastructure can bridge the 
broadband access challenges that many rural and remote American 
communities face. SpaceX is developing a broadband constellation that 
will offer high-speed, low-latency, affordable broadband services to 
consumers across America, regardless of where they are. The service 
will include continuous broadband coverage for Alaskans even in the 
northernmost areas of the state, following the deployment of satellites 
in a specific near-polar orbit. The SpaceX system, which will begin 
deployment in 2019, is designed to offer fiber-like speeds at a 
competitive price direct to consumers. This means that consumers 
throughout Alaska--even in Arctic latitudes--will have available the 
same competitive broadband services, with speeds, latencies, and 
pricing equivalent to terrestrial, using the same SpaceX laptop-sized 
user terminals that will be offered elsewhere in the Continental U.S. 
By removing the ``cost-per-mile'' construct of connectivity, satellite 
constellations operating close to the earth can make high-quality, low-
latency, affordable broadband to consumers who have never been 
connected, and also inject competition to those who are served 
currently by only one provider.
    More could be done to enable the development and deployment of this 
sort of Internet infrastructure in space, and more Americans could be 
have access to broadband.

  1.  Overhaul outmoded and inefficient regulatory processes for the 
        launch services needed to deploy satellite constellations. The 
        Federal Aviation Administration (FAA) regulations governing 
        commercial space launch should be streamlined and modernized to 
        keep pace with more frequent commercial launches anticipated in 
        support satellite constellations and overall industry growth. 
        Similarly, the Federal Communications Commission (FCC) should 
        act on its long-pending Notice of Proposed Rulemaking 
        (``NPRM'') designed to formalize co-primary allocations of 
        Federal frequencies already commonly used for commercial 
        launch. Such an allocation would allow the FCC to streamline 
        and expedite licenses for commercial launch spectrum as the 
        cadence and complexity of U.S. launches grows along with the 
        deployment of satellite constellations.

  2.  Build in rewards for satellite systems that are built for 
        spectrum efficiency. Advanced spacecraft and ground 
        technologies yield high levels of spectral efficiency and 
        operational flexibility, yielding greater capacity to reach 
        more unserved Americans with reliable, high-speed broadband. 
        Highly intelligent and flexible satellites also can 
        interoperate with multiple similar systems, while still 
        protecting existing space and terrestrial networks, adding to 
        the competitive marketplace. Unfortunately, not all such 
        proposed systems are making the needed technology investments 
        for efficient use of spectrum, in effect hampering sharing of 
        available spectrum compared to other more adaptable 
        constellations. At present, the FCC has no mechanism for 
        rewarding more efficient satellite systems for their investment 
        in advanced and spectrum-friendly technologies or penalizing 
        those systems that do not. Congress and the FCC should 
        encourage rules that incentivize and reward use of spectrally-
        efficient satellite systems and technologies, with the goal of 
        equitable access to spectrum, preventing spectrum warehousing 
        by non-operating satellite systems, and promoting and 
        accommodating multiple satellite constellations that can 
        coordinate and operate while serving American consumers.

  3.  Ensure that any broadband infrastructure or incentive programs 
        are technologically neutral, allowing satellite broadband 
        alternatives to qualify. This means finding parallels between 
        elements of satellite and terrestrial networks so that 
        satellite-based solutions can qualify for national 
        infrastructure investment programs and other Federal 
        initiatives to close the digital divide. Beyond defining the 
        network elements that qualify for programs, other program 
        requirements can unintentionally exclude satellite-based 
        solutions. For example, grant programs that require technical 
        support in every county where service is offered are unworkable 
        not only for satellite broadband providers, but for any 
        regional or national service provider. The National Broadband 
        Mapping system, too, should capture data about not only enhance 
        the understanding of our broadband landscape, but also provide 
        a more accurate basis for shaping future broadband programs 
        designed to expand broadband access for all citizens.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Maggie Hassan to 
                            Patricia Cooper
    Question. It's clear there is major interest in improving access to 
broadband and the way we deploy broadband services. This national goal 
transcends party lines, and I'm pleased to be a part of this committee 
where I can work with colleagues on both sides of the aisle to make 
improvements. I would like to hear from you all, what is being done, 
and what more should be done to ensure rural Americans are not left 
behind as technology evolves and innovations emerge. Rural America is 
more complex and difficult to connect for many reasons, but every 
American should have the opportunity to reap the social and economic 
benefits of broadband connectivity. What are your thoughts?
    Answer. Satellite-based Internet infrastructure can bridge the 
broadband access challenges that many rural and remote American 
communities face. SpaceX is developing a non-geostationary satellite 
orbit (``NGSO'') broadband constellation that will offer high-speed, 
low-latency, affordable broadband services to consumers across America, 
regardless of where they are. The SpaceX system, which will begin 
deployment in 2019, is designed to offer fiber-like speeds at a 
competitive price direct to consumers. By their nature, the satellites 
``see'' end-users from their position in low-Earth orbit, regardless of 
whether they are urban or rural, at the low incremental cost of simply 
installing a roof-top terminal. By removing the ``cost-per-mile'' 
construct of connectivity, satellite constellations operating close to 
the Earth can make high-quality, low-latency, affordable broadband to 
consumers who have never been connected, and also bring a competitive 
offering to those who are served currently by only one provider.
    More could be done to enable the development and deployment of this 
sort of Internet infrastructure in space, and more Americans could be 
have access to broadband.

  1.  Satellite-based broadband networks should be captured in any 
        infrastructure, incentive, or tax policy legislation undertaken 
        to expand broadband access in the United States. Such an 
        approach will not only maintain a technology-neutral approach 
        to infrastructure, but also position American consumers to 
        benefit from the significant innovations and nation-wide 
        connectivity of next-generation satellite-based broadband.

  2.  The regulatory framework for NGSO satellite constellations is 
        outdated and incomplete. The Committee should promote decisive 
        updates in Part 5 and 25 of the Commission's Rules that clarify 
        how constellations must share spectrum with each other 
        efficiently, and enable incremental deployment of the 
        constellations to track with emerging demand. This should 
        include regulatory incentives which encourage the use of 
        spectrally-efficient technologies in satellite broadband 
        constellations. At present, the FCC has no mechanism for 
        rewarding more efficient systems for their investment in 
        advanced and spectrum-friendly technologies.

  3.  In order to provide needed broadband connectivity, such satellite 
        constellations will also require multiple launches to deploy 
        the satellites into space. Congress should strongly encourage 
        the FCC to finalize its long-pending rulemaking to allocate 
        spectrum for commercial launch services. This effort is a 
        timely and important step for the Commission to adjust to the 
        increasing cadence and complexity of launches and growth in 
        number of U.S. launch service providers.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Roger Wicker to 
                              Larry Downes
    Question 1. An essential part of reducing barriers to broadband 
deployment and increasing investment in broadband infrastructure is 
having an accurate understanding of what areas across the United States 
remain underserved or unserved. As you mentioned in your testimony, 
previous efforts to provide service to underserved or unserved areas 
have resulted in wasteful spending and overbuilding.

    a. What can Congress and the FCC do to ensure that Federal 
investments in broadband infrastructure are going to areas that are 
truly underserved or unserved?

    b. How can we standardize data collection processes to ensure that 
we have an accurate understanding of what areas remain underserved or 
unserved by mobile broadband coverage?
    Answer. There are several gaps in the data available on broadband 
deployment. The National Broadband Map has not been updated since 2014, 
and the FCC has no current plans to update it.\1\
---------------------------------------------------------------------------
    \1\ See FCC, National Broadband Map, available at https://
www.broadbandmap.gov/.
---------------------------------------------------------------------------
    A second overarching problem is the misguided decision the agency 
made in 2015 to change the definition of broadband to a 25 Mbps 
download speed and a 3 Mbps upload speed.\2\ Even today, these speeds, 
though admirable goals, are much greater than what is actually needed 
by consumers to enjoy nearly all Internet services, including the 
streaming of high-definition video.
---------------------------------------------------------------------------
    \2\ See FCC, 2015 Broadband Progress Report, GN Docket No. 14-126, 
January 29, 2015, available at https://www.fcc.gov/reports-research/
reports/broadband-progress-reports/2015-broadband-progress-report.
---------------------------------------------------------------------------
    As a result of these failings, data suggesting where and for whom 
broadband access in the U.S. is incomplete may be highly misleading. 
That in turns means that upcoming decisions both at the FCC and in 
Congress on how to deploy additional resources to close what remains of 
the digital divide may be driven by faulty analysis, leading to poor 
decisions and, ultimately, a failure to provide assistance where it is 
truly needed.
    These problems need to be addressed before any future decisions on 
taxpayer resource deployments are made. The National Broadband Map 
should be updated and a sustainable process for keeping it current 
adopted. The FCC should also revisit--using technical rather than 
political criteria--its definition of what download and upload speeds 
constitute ``broadband,'' or even whether speed should be sole basis 
for defining broadband service.
    At a more nuts-and-bolts level, there are other well-known issues 
with how the FCC and other government agencies determine and report 
broadband availability and performance. As you noted last week at a 
hearing on the Universal Service Fund and Rural Broadband Investment:

        Inadequate data collection methods are also one of USF's 
        challenges, leading to an inefficient distribution of funds to 
        truly underserved and unserved areas. To address this issue, I 
        recently joined Senator Manchin in introducing the ``Rural 
        Wireless Access Act,'' which has the support of several of my 
        colleagues, including Senators Schatz, Fischer, Klobuchar, 
        Moran, and Peters. This bill would require the FCC to 
        standardize its data collection methods to ensure that USF 
        support is directed to rural communities--in Mississippi and 
        across the nation--that are actually in need.

        Reliable data is a critical step toward eliminating 
        inefficiencies within the USF program and fulfilling the 
        statutory goal of universal service. I appreciate the efforts 
        of all stakeholders involved to improve data collection at the 
        FCC. As these efforts continue, it is important that this data 
        be collected quickly so as not to delay the delivery of 
        essential communications services, through programs like Phase 
        II of the Mobility Fund, to communities in need.\3\
---------------------------------------------------------------------------
    \3\ Statement of Chairman Roger Wicker, Senate Subcommittee on 
Communications, Technology, Innovation, and the Internet, hearing on 
June 20, 2017, available at https://www.commerce
.senate.gov/public/index.cfm/hearings?ID=628B02EB-3D8D-4356-B0E9-
5F4BC4B5A312.

    (a) Setting these definition and measurement issues aside, we know 
there are only a small number of U.S. census tracks that currently have 
no broadband provider. As I noted in my testimony, I believe an 
economic case for deployment in these areas will remain difficult for 
private providers to make, and that therefore these should be the focus 
of any direct investments Congress includes in future infrastructure 
spending.
    That, I believe, is the best hope for ensuring federally-supported 
investments in broadband infrastructure are going to areas that are 
truly underserved or unserved. As I noted:

        Any direct infrastructure spending Congress approves should be 
        targeted exclusively to the few remaining census tracts, mostly 
        rural and tribal, where there is currently no competitive 
        broadband service. Congress should consider setting aside a 
        modest portion of its proposed infrastructure fund, say $20 
        billion, for a one-time rural broadband acceleration program.

        Network operators would be offered subsidies to build out in 
        these extremely high-cost areas, with a requirement to use 
        technologies with sufficient bandwidth to support substantial 
        future growth, perhaps up to 100 Mbps speeds. Calculation of 
        specific subsidies should be made on a per-location basis, 
        determining as precisely as possible how much is needed to 
        overcome otherwise prohibitive build-out costs.

        Funds for the acceleration program, moreover, should come from 
        general appropriations rather than raising the already-
        unsustainable fees consumers pay into the Universal Service 
        Fund, which today represents a 17.4 percent cost added to voice 
        services.\4\
---------------------------------------------------------------------------
    \4\ See FCC, Contribution Factor and Quarterly Filings--Universal 
Service Fund Management Support, available at https://www.fcc.gov/
general/contribution-factor-quarterly-filings-univer
sal-service-fund-usf-management-support.

        To avoid problems that plagued the Recovery Act's scattered 
        broadband initiatives, moreover, the acceleration program 
        should be managed by one agency, with strict controls to help 
        ensure troubled projects get attention (or cut off) sooner 
        rather than later. Between the National Telecommunications and 
        Information Administration, Rural Utilities Service, and the 
        FCC, there is consensus that the FCC does the best job at 
        maximizing its deployment-related funds, and should be the sole 
        agency responsible for the acceleration fund, albeit with added 
---------------------------------------------------------------------------
        controls to reduce waste and abuse.

    (b) Solving the more specific measurement and consistency issues is 
entirely within the technical capability of the FCC, but the agency has 
in recent years had a strong disincentive to do so. Eager to activate 
authority the Commission incorrectly believed was inchoate in the 
Communications Act and in particular in Section 706(a) and (b), the FCC 
has in recent years adjusted definitions and manipulated measurement 
data to emphasize failures in broadband deployment, both wired and 
mobile. For years, the agency refused even to consider mobile broadband 
as a source of broadband at all, arguing weakly that it had inadequate 
data to measure it.\5\
---------------------------------------------------------------------------
    \5\ See, e.g., Larry Downes, How the FCC Sees Broadband's 95 
percent Success as 100 percent Failure, Forbes, Aug. 13, 2012, 
available at https://www.forbes.com/sites/larrydownes/2012/08/23/how-
the-fcc-sees-broadbands-95-success-as-100-failure/#6e324b6dbe55. Even 
in the most recent Broadband Progress Report, the FCC still refuses to 
adopt measurement and reporting tools that show intermodal competition 
between wired and mobile broadband services. See FCC, 2016 Broadband 
Progress Report, GN Docket 15-191, Jan. 29, 2016, available at https://
www.fcc.gov/reports-research/reports/broadband-progress-reports/2016-
broadband-progress-report.
---------------------------------------------------------------------------
    Why has the FCC engaged in such counter-productive behavior? By 
failing to answer or answering negatively Congressional mandates to 
determine whether markets are competitive, and by torturing the data to 
find that broadband was not being deployed ``in a reasonable and timely 
manner'' overall, the FCC justified many of its recent interventions 
into the broadband market.
    While the interventions skewed private broadband investment 
decisions, the misreporting has made it impossible for Congress, the 
agency or others to develop an accurate understanding of the true state 
of the broadband market and in particular where problems in coverage 
remain.
    Given the considerable resources the FCC devotes today to its data 
collection and reporting requirements, this is truly a lose-lose state 
of affairs. As I noted in earlier testimony:

        As Ronald Coase famously wrote, ``If you torture the data long 
        enough, nature will always confess.''

        That, in a nutshell, has become the FCC's unintended modus 
        operandi. The agency collects the data it needs to make wise 
        and efficient decisions, but in the absence of clear guidelines 
        and the most basic economic analysis, the Commission cannot 
        resist the temptation to abandon the logical conclusions 
        compelled by that data in the service of vague, idiosyncratic, 
        transient and, often, unarticulated policy goals. The lack of 
        structure wastes both government and private resources. Worse, 
        it vastly under emphasizes the likelihood that imminent 
        technology disruptors will better and more efficiently advance 
        the communications needs of American consumers with far fewer 
        unintended consequences.

        These problems devalue much of the good work of the agency's 
        staff and subvert the often-admirable goals of the FCC's 
        Chairmen and Commissioners. They have created an epidemic of 
        negative side-effects, including:

   Many of the agency's reports fail to reach obvious 
        conclusions supported by the thorough data collection the 
        agency performs, limiting their usefulness as policy tools to 
        advance the FCC's longstanding charter to promote 
        communications to all Americans.

   Rulemakings torture their analysis and data to justify what 
        appear to be ex ante conclusions to regulate--regardless of the 
        need or cost. . . .\6\
---------------------------------------------------------------------------
    \6\ See Written Testimony of Larry Downes, Hearing on FCC Process 
Improvement, Before the Subcommittee on Communications and Technology, 
Committee on Energy and Commerce, U.S. House of Representatives, July 
11, 2013, available at http://docs.house.gov/meetings/IF/IF16/20130711/
101107/HHRG-113-IF16-Wstate-DownesL-20130711.pdf.

    To overcome these problems, Congress must realign the agency's 
incentives and require the agency to collect and report accurate 
information, allowing its technical experts to define and collect 
neutral and useful standardized data.
    Your proposed legislation, S. 1104, ``The Rural Wireless Act of 
2017,'' \7\ would go far toward resetting the balance, requiring the 
FCC to make its measurements based on good science rather than bad 
politics. I would recommend extending those common-sense principles 
beyond measurement of mobile broadband to wired services as well. I 
also continue to support consolidation of FCC reporting, both to reduce 
duplication and to remove unhelpful data silos between different 
bureaus within the agency.
---------------------------------------------------------------------------
    \7\ See https://www.congress.gov/bill/115th-congress/senate-bill/
1104/text?r=2436.
---------------------------------------------------------------------------
    More broadly, however, Congress should remove any lingering 
temptation for the FCC to perform incomplete, inaccurate, or 
artificially pessimistic data collection and analysis of broadband 
market conditions. That could be accomplished by legislation making 
clear that Congress never intended Section 706 as an independent grant 
of agency authority, let alone one that triggered special powers based 
on particular negative findings about the state of broadband 
competition or availability.\8\
---------------------------------------------------------------------------
    \8\ That clarification was proposed, for example, in draft 
legislation circulated in 2015 by Chairman Thune along with Chairmen 
Walden and Upton in the House. See Larry Downes, Eight Reasons to 
Support Congress's Net Neutrality Bill, The Washington Post, Jan. 20, 
2015, available at https://www.washingtonpost.com/news/innovations/wp/
2015/01/20/eight-reasons-to-support-congresss-net-neutrality-bill/
?utm_term=.874a52ca1c05.
---------------------------------------------------------------------------
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Jerry Moran to 
                              Larry Downes
    Question 1. According to the recommendations included in your 
written testimony, you support the idea of a single Federal agency 
``with strict controls to help ensure troubled projects get attention 
(or cut off) sooner rather than later'' in rural broadband acceleration 
considerations for future comprehensive infrastructure legislation.

    a. Given the existing expertise at the FCC, would you agree that 
the FCC is the best place for the broadband infrastructure conversation 
to take place?

    b. What criteria do you suggest we consider in evaluating choices 
for the creation of any broadband infrastructure investment plan?
    Answer. (a) I have not made a comprehensive evaluation of either 
the corporate finance or project management expertise within the FCC, 
or its strengths in those areas relative to other Federal agencies and 
departments, notably the NTIA and the USAC. A careful and neutral 
evaluation of those capabilities and recommended improvements, however, 
would be essential before Congress authorizes any additional taxpayer 
funding to ensure both professional and efficient disbursement of 
grants, loans, and other resources.
    However, as I noted in my testimony, it is clear from both private 
investigations as well as those of the GAO that funding provided 
through the 2009 Recovery Act was not as effective as it could have 
been, and in many examples resulted in broadband project spending that 
was either unnecessary or, worse, which was never completed.\9\
---------------------------------------------------------------------------
    \9\ See, e.g., Testimony of Ann C. Eilers, Principal Assistant 
Inspector General, DOC OIG before the House Energy & Commerce 
Committee's Subcommittee on Communications and Technology, Is the 
broadband stimulus working?, Feb. 27, 2013, available at https://
www.oig.doc.gov/OIGPublications/OIG-13-017-T.pdf; Government 
Accountability Office, Recovery Act: USDA Should Include Broadband 
Programs Impact in Annual Performance Reports, June, 2014 at page 22; 
Tony Romm, Wired to Fail, Politico, July 28, 2015, available at http://
www.politico.com/story/2015/07/broadband-coverage-rural-area-fund-
mishandled-120601.
---------------------------------------------------------------------------
    These reports singled out the performance of the Rural Utilities 
Service as being especially poor. I am unaware, however, of reforms 
that may or may not have taken place at RUS following the 
recommendations of GAO or others.
    I do believe, however, that any future Federal investment would be 
best coordinated by a single agency. The FCC, if nothing else, has the 
most experience and the most appropriate Congressional mandates to 
advance broadband deployment and adoption goals within the Federal 
Government. The FCC also has the benefit of being the author of the 
visionary 2010 National Broadband Plan, which retains considerable 
value as a planning and evangelizing document.
    Finally, as noted in my testimony, the FCC has in recent months 
initiated proceedings specifically aimed at improving deployment 
opportunities for broadband in rural areas.
    Absent any findings of structural problems internal to the FCC that 
would make it unable to effectively manage future Federal broadband 
initiatives, I do believe the Commission is the best place to 
coordinate the on-going broadband infrastructure conversation.
    (b) Without knowing specific legislative goals and proposed funding 
levels, it's difficult for me to advise the Committee on criteria for 
choosing between competing investment options and proposals.
    However, as I noted in my testimony, I share the non-partisan view 
of many analysts that our remaining digital divide is driven by both 
availability and adoption problems that disproportionately affect 
rural, older and less-educated Americans. Any broadband infrastructure 
plan adopted by Congress should focus on identifying the specific 
reasons for these gaps, and target spending and resources accordingly.
    I recommended limited and carefully controlled direct investment, 
targeted exclusively to the few remaining census tracts, mostly rural 
and tribal, where there is currently no competitive broadband service.
    These should take the form of subsidies to build out in these 
extremely high-cost areas, with a requirement to use technologies with 
sufficient bandwidth to support substantial future growth, perhaps up 
to 100 Mbps speeds. Calculation of specific subsidies should be made on 
a per-location basis, determining as precisely as possible how much is 
needed to overcome otherwise prohibitive build-out costs.
    I also recommend severely limiting ongoing support. To date, the 
FCC provides payments in the form of small ongoing annual subsidies, 
even in areas when all that was needed to overcome high infrastructure 
costs was an initial capital investment. Because of this approach, it 
can take years for providers to recoup their own capital investments, 
unintentionally encouraging operators to build piecemeal in rural 
areas, and to make decisions based on what providers believe the 
government will fund rather than on what consumers want.
    Future investments should avoid this error by offering instead 
carefully-calculated one-time subsidies. This will save billions in 
ongoing costs. While some truly high-cost areas will continue to need 
both start-up capital and operating support, the emphasis for any new 
rural broadband infrastructure spending should be on those locations 
for which capital alone can overcome the need for further government 
subsidy. This will deliver the most bang for scarce taxpayer bucks.
    After determining the optimal per-location subsidy needed, the 
government may find there are more providers willing to build in 
underserved rural and tribal areas than there are funds to support 
them. If so, the FCC should be authorized to run a reverse auction 
among competing providers to bid down the per-location cost.\10\
---------------------------------------------------------------------------
    \10\ See Blair Levin and Carol Mattey In Infrastructure Plan, a Big 
Opening for Rural Broadband, Brookings Institution, Feb. 13, 2017, 
available at, https://www.brookings.edu/blog/the-avenue/2017/02/13/in-
infrastructure-plan-a-big-opening-for-rural-broadband/.
---------------------------------------------------------------------------
    To address equally entrenched adoption problems, I also recommended 
addressing causes of the digital divide unrelated to either 
availability or price.
    As the most recent data from the Pew Research Project shows, we are 
winning the battle to reduce broadband cost for those least able to 
afford it. In addition to expanded Universal Service programs and the 
shift from voice to broadband for Lifeline and other programs, leading 
Internet providers, including Comcast, AT&T and, recently, Sprint, have 
expanded programs aimed at low-income families, signing up millions of 
new Internet users for roughly $10 a month.\11\
---------------------------------------------------------------------------
    \11\ Larry Downes, The Digital Revolution Has Not Reached All of 
Us, The Washington Post, August 31, 2016, available at https://
www.washingtonpost.com/news/innovations/wp/2016/08/31/the-internet-
revolution-has-not-reached-all-of-us/.
---------------------------------------------------------------------------
    As the adoption gap narrows, however, we need new strategies that 
target different problems. Availability and price are no longer the 
most significant factors holding back the 13 percent of Americans who 
remain offline. Consistent with finding over the last decade, the Pew 
Research Center noted recently that only 19 percent of offline adults 
cite the expense of Internet service of owning a computer as a barrier.
    Instead, ``[a] third of non-internet users (34 percent) did not go 
online because they had no interest in doing so or did not think the 
Internet was relevant to their lives.'' Researchers reported. ``Another 
32 percent of non-internet users said the Internet was too difficult to 
use, including 8 percent of this group who said they were `too old to 
learn.' '' \12\
---------------------------------------------------------------------------
    \12\ Monica Anderson and Andrew Perrin, 13 percent of Americans 
Don't Use the Internet--Who are They?, Pew Research Report, Sept. 7, 
2016, available at http://www.pewresearch.org/fact-tank/2016/09/07/
some-americans-dont-use-the-internet-who-are-they/
---------------------------------------------------------------------------
    While income undoubtedly continues to play a significant role in 
non-adoption, in other words, many who remain offline wouldn't use the 
Internet even if it were free. This conclusion was also reached by a 
recent NTIA survey, which found that over half of those who don't have 
Internet service at home--again, largely rural and older Americans, and 
those with less education--say they just don't want or need it.\13\
---------------------------------------------------------------------------
    \13\ National Telecommunications and Information Administration, 
Digitally Unconnected in the U.S. Who's Not Online and Why?, Sept. 28, 
2016, available at www.ntia.doc.gov/blog/2016/digitally-unconnected-us-
who-s-not-online-and-why.
---------------------------------------------------------------------------
    Part of this resistance comes from the fact that unconnected 
Americans don't know how to use a computer or even a smartphone, let 
alone how to install and maintain networking equipment inside or 
outside their home. So whatever funding the infrastructure law provides 
for broadband will be wasted if some of that support isn't directed to 
providing hands-on education and on-going support.
    Public education about why the infrastructure bill is spending 
money on broadband will also be critical to getting maximum value from 
any new investment. That effort should include, at a minimum, the White 
House and related Departments including those dealing with commerce, 
housing, health, energy and education.
    The FCC should be tasked with coordinating the public outreach, and 
for working with stat-ups and established companies developing the most 
exciting and relevant applications and their respective trade groups in 
public-private partnerships.

    Question 2. Are there specific tools such as commonly-mandated 
forms or commonly-mandated resolution timeframes (e.g., ``shot 
clocks'') that can be standardized across all Federal agencies to 
improve the permitting process? What are the benefits and challenges to 
such efficiencies?
    Answer. The more any proposed legislation includes and mandates 
already-understood permitting ``best practices'' across federal--and, 
where possible, tribal, state and local governments--the more effective 
and efficient future deployments will be.
    Many of these practices have been developed by innovative Federal 
agencies and local authorities experimenting with ways to accelerate 
the deployment of fast-changing broadband technologies in specific 
geographies and communities, taking into account geological challenges 
and local preferences.
    They include the ``dig once'' and ``climb once'' policies advocated 
by the White House and Congress, ``shot clocks'' that result in 
applications being deemed granted if a decision is not reached in a 
reasonable timeframe, and master contractor agreements for new 
infrastructure deployments piloted by Google Fiber and other broadband 
providers for both wired and mobile deployments that streamline the 
process of permitting, rights of way, and gaining access to local 
facilities including buildings, roads, utility poles and other 
property.
    Much has been learned over the last few decades of infrastructure 
deployment, and there is consensus on what constitutes the best and 
most effective permitting and other processes. I note several specific 
examples of these practices in my testimony, and there is a wealth of 
literature available from trade groups, academics, and think tanks that 
describe these practices in detail.
    The difficulty, as your questions suggests, is not that we do not 
know how best to manage broadband deployment, but that we lack both 
uniform and enforceable standards that apply to all government actors, 
retaining local values and choice where appropriate.
    The FCC, for example, has long-maintained shot clocks for mobile 
equipment construction application, but lacks the resources to 
adequately monitor compliance, let alone enforce its rules.
    The Federal Government, likewise, has adopted a ``dig once'' policy 
for fiber conduit by way of several Executive Orders, but needs to 
extend that policy to public rights of way adjoining roads, and to 
state roads as well as federal.
    Given the limits of executive authority to extend and enforce these 
best practices, particularly regarding state government, Congress 
should embrace permitting reform as part of any broadband 
infrastructure legislation it develops. That would be the most 
effective and efficient way to propagate these practices throughout the 
government.

    Question 3. Can you explain the importance of taking a 
``technology-neutral approach'' in any comprehensive infrastructure or 
tax legislative package considerations by this Congress and Federal 
regulating agencies?
    Answer. There are many myths about broadband technologies that have 
infected policy decisions over the years, particularly at the FCC. 
These include, for example, a belief promoted by some legal academics 
with minimal technical or business knowledge that the only way to 
achieve universal and competitive broadband deployment is to lay fiber 
optic cable to every home in America, regardless of location or cost, 
and preferably as part of a federally owned and operated Internet 
infrastructure.
    Similarly, the FCC has long emphasized directly and indirectly that 
only wired broadband is truly broadband, leaving other delivery 
technologies either de-emphasized or excluded from various programs.
    These myths are both technologically inaccurate and counter-
productive. Often, their proponents intentionally misread data about 
deployment in other countries to feed a demonstrably false narrative 
that without a nationalized, all-fiber network, the U.S. both is and 
will remain uncompetitive in the Internet economy.\14\
---------------------------------------------------------------------------
    \14\ See Larry Downes, How to Understand the EU-U.S. Digital 
Divide, Harvard Business Review, Oct. 19, 2015, available at https://
hbr.org/2015/10/how-to-understand-the-eu-u-s-digital-divide.
---------------------------------------------------------------------------
    More to the point, these broadband myths explicitly and implicitly 
deter both public and private investment in alternative broadband 
technologies and investment models that would actually close the 
remaining U.S. digital divide quickly and efficiently. By insisting on 
a deployment model that is neither cost-effective nor politically 
viable, those who encourage these myths condemn some consumers, 
particularly rural and tribal residents, to being left out of the 
digital conversation longer than necessary, if not permanently.
    As I noted in my testimony, there have long been multiple broadband 
technologies, including cable, cellular and in particular next-
generation DSL, fixed mobile and satellite, that are better suited to 
deliver broadband to geographically remote and/or sparsely populated 
areas of the country. They provide increasingly fast speeds and high 
reliability, as well as more cost-effective capital and operating 
features.
    Sadly, if these technologies were not treated as second-class 
options by self-styled consumer advocates and their colleagues inside 
the FCC, they would have been deployed even more aggressively in the 
last decades. That would not only have eliminated remaining broadband 
availability gaps sooner but would have led to accelerated development 
of these technologies. Their success would also have stimulated 
competition for more innovation in other potential broadband 
technologies, including broadband over power lines.
    Fiber optics will continue to play an expanded role in Internet 
infrastructure, but for the foreseeable future, as the National 
Broadband Plan made clear, it is unlikely to become the sole last mile 
connection technology for a country as vast and sparsely populated as 
the U.S.
    New cellular and cable technologies, including 5G and Docsis 3.1, 
will offer wider coverage and greatly accelerated speeds. But in many 
rural areas, as I noted in my testimony, fixed wireless technologies 
have proven themselves capable of providing high-speed last-mile 
connections to homes and businesses, with the promise of even better 
performance going forward.
    Satellite-based solutions have likewise matured, as have hybrid 
fiber/copper technologies using existing telephone lines.\15\ Just this 
week, the FCC unanimously approved OneWeb's application to launch a 
constellation of low-orbiting satellites that will, when operational, 
provide global Internet access.\16\ Many other satellite providers, 
including SpaceX, Ligado, Boeing, and Telesat, have pending 
applications.
---------------------------------------------------------------------------
    \15\ Richard Bennett, Wireless First: A Winning Strategy for Rural 
Broadband, High-Tech Forum, April 11, 2017, available at http://
hightechforum.org/wireless-first-a-winning-strategy-for-rural-
broadband/.
    \16\ See Caleb Henry, FCC Approves OneWeb for U.S. Market as it 
Considers other Constellations, Space News, June 23, 2017, available at 
http://spacenews.com/fcc-approves-oneweb-for-us-market-as-it-considers-
other-constellations/. See also Larry Downes, Ligado is Ready to Launch 
a New Mobile Network. Will the FCC Let Them? Forbes, June 12, 2017, 
available at https://www.forbes.com/sites/larrydownes/2017/06/12/
ligado-is-ready-to-launch-a-new-mobile-network-will-the-fcc-let-them/
#7d455e3b3831.
---------------------------------------------------------------------------
    The problem is that up until now Universal Service programs have 
either explicitly or implicitly favored wired technologies, for example 
by defining minimum broadband speeds above what is reasonably necessary 
or by setting latency standards in a way that intentionally if 
implicitly excludes satellite-based solutions.\17\ That means that 
neither network operators nor consumers can make use of Universal 
Service Funds that would otherwise be available to overcome cost 
issues.
---------------------------------------------------------------------------
    \17\ See Doug Brake, A Policymaker's Guide to Rural Broadband 
Infrastructure, Information Technology and Innovation Foundation (April 
2017), available at http://www2.itif.org/2017-rural-broadband-
infrastructure.pdf?mc_cid=4fb4705a17&mc_eid=98756dc702.
---------------------------------------------------------------------------
    Removing technologically-unsound prejudices from USF and elsewhere 
as part of any broadband infrastructure legislation will be crucial in 
achieving the goal of that legislation to close the digital divide, 
particularly for rural Americans. It will also stimulate even faster 
innovation in these and other broadband technologies--including those 
we can't even imagine today.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Maggie Hassan to 
                              Larry Downes
    Question. It's clear there is major interest in improving access to 
broadband and the way we deploy broadband services. This national goal 
transcends party lines, and I'm pleased to be a part of this committee 
where I can work with colleagues on both sides of the aisle to make 
improvements. I would like to hear from you all, what is being done, 
and what more should be done to ensure rural Americans are not left 
behind as technology evolves and innovations emerge. Rural America is 
more complex and difficult to connect for many reasons, but every 
American should have the opportunity to reap the social and economic 
benefits of broadband connectivity. What are your thoughts?
    Answer. Rural residents are making great strides in both access and 
adoption of affordable broadband Internet, but continue to trail urban 
and suburban consumers.
    Just last week, the Pew Research Center released new data on the 
digital divide.\1\ The good news is that the rural divide continues to 
shrink, both in absolute and relative terms:
---------------------------------------------------------------------------
    \1\ Andrew Perrin, Digital Divide Between Rural and Nonrural 
America Persists, Pew Research Center, May 19, 2017, available at 
http://www.pewresearch.org/fact-tank/2017/05/19/digital-gap-between-
rural-and-nonrural-america-persists/
?utm_campaign=Newsletters&utm_source=sen
dgrid&utm_medium=e-mail.

        Nearly two-thirds (63 percent) of rural Americans say they have 
        a broadband Internet connection at home, up from about a third 
        (35 percent) in 2007, according to a Pew Research Center survey 
        conducted in fall 2016. Rural Americans are now 10 percentage 
        points less likely than Americans overall to have home 
        broadband; in 2007, there was a 16-point gap between rural 
        Americans (35 percent) and all U.S. adults (51 percent) on this 
---------------------------------------------------------------------------
        question.

    But, as Figure 1 makes clear, rural users continue to lag in 
adoption.


    Figure 1

    There are, of course, many explanations for the remaining gaps. As 
the Pew research notes, some rural parts of the country still lack 
access to basic broadband infrastructure. Where broadband is available, 
it may be less reliable or offered at slower speeds. And rural users 
may believe, rightly or wrongly, that Internet products and services 
are not relevant to their lives.
    Indeed, according to multiple surveys, the largest impediment today 
to universal broadband adoption is neither availability nor cost--it's 
a perception by non-adopters that there's nothing online of interest to 
them. According to Pew, ``[a] third of non-internet users (34 percent) 
did not go online because they had no interest in doing so or did not 
think the Internet was relevant to their lives.'' Researchers reported 
that ``Another 32 percent of non-internet users said the Internet was 
too difficult to use, including 8 percent of this group who said they 
were `too old to learn.' '' \2\
---------------------------------------------------------------------------
    \2\ Monica Anderson and Andrew Perrin, 13 percent of Americans 
Don't Use the Internet--Who are They?, Pew Research Report, Sept. 7, 
2016, available at http://www.pewresearch.org/fact-tank/2016/09/07/
some-americans-dont-use-the-internet-who-are-they/
---------------------------------------------------------------------------
    While access and price undoubtedly continues to play a significant 
role in non-adoption, in other words, many who remain offline wouldn't 
use the Internet even if it were free. This conclusion was also reached 
by a recent NTIA survey, which found that over half of those who don't 
have Internet service at home--largely rural and older Americans, and 
those with less education--say they just don't want or need it.\3\
---------------------------------------------------------------------------
    \3\ National Telecommunications and Information Administration, 
Digitally Unconnected in the U.S. Who's Not Online and Why?, Sept. 28, 
2016, available at www.ntia.doc.gov/blog/2016/digitally-unconnected-us-
who-s-not-online-and-why.
---------------------------------------------------------------------------
    As the improving relative and absolute adoption rates suggest, 
however, a combination of private and public-private initiatives aimed 
at both access and adoption gaps have and continue to make excellent 
progress in overcoming these real and perceived obstacles.
    Basic technology costs continue to decline, and new infrastructure 
technologies are invented and rapidly improve. Together, these 
translate to high-speed access becoming increasingly cost-effective 
even in the most geographically remote parts of the U.S.
    Cable providers continue to expand their networks, and new 
protocols increase the speed and reliability of those networks. Hybrid 
fiber/copper options that utilize existing telephone infrastructure 
have brought high-speed broadband to many areas that are otherwise too 
expensive to serve.
    New wireless technologies, including fixed wireless systems 
utilizing existing 4G LTE networks, are both more cost-effective and 
competitive with wired solutions. And, as we heard at the hearing, low-
orbit satellite broadband services have the potential to deliver 
competitive service without introducing latency that reduces the 
usefulness of some applications, notably high-definition video.
    For those areas of the country where these alternatives remain 
difficult to cost-justify, programs administered by the FCC, including 
the Connect America Fund and Mobility Fund, have accelerated the push 
to provide needed capital for infrastructure investment. The agency has 
committed even more revenue from the Universal Service Fund to these 
programs, and there remains the potential for Congress, as part of a 
possible infrastructure bill, to increase those funds even more.
    Just last month, FCC Chairman Pai announced the formation of a 
Rural Broadband Auctions Task Force,\4\ tasked with implementing 
auction-based allocation of another $6.5 billion in rural 
infrastructure funding.
---------------------------------------------------------------------------
    \4\ See https://apps.fcc.gov/edocs_public/attachmatch/DOC-
344201A1.pdf.
---------------------------------------------------------------------------
    Earlier in the year, Chairman Pai also announced the creation of a 
Broadband Deployment Advisory Committee.\5\ The Committee, composed of 
leaders from both public and private sector organizations at the 
federal, state and local levels, has as its mission:
---------------------------------------------------------------------------
    \5\ See https://www.fcc.gov/broadband-deployment-advisory-
committee.

        [T]o make recommendations for the Commission on how to 
        accelerate the deployment of high-speed Internet access, or 
        ``broadband,'' by reducing and/or removing regulatory barriers 
        to infrastructure investment. This Committee is intended to 
        provide an effective means for stakeholders with interests in 
        this area to exchange ideas and develop recommendations for the 
        Commission, which will in turn enhance the Commission's ability 
        to carry out its statutory responsibility to encourage 
---------------------------------------------------------------------------
        broadband deployment to all Americans.

    Supplementing these efforts, the Commission has initiated several 
Notices of Proposed Rulemaking to implement specific changes aimed at 
improving the speed and efficiency of both public and private broadband 
deployment initiatives.
    Finally, for rural Americans for whom cost is a barrier to 
broadband adoption, both private and public efforts to reduce or 
subsidize the price of connection continue to bring more Americans 
online. Most major broadband providers, following the early efforts of 
Comcast, AT&T and others, have programs that provide reduced price 
service (about $10 a month) for lower income Americans and their 
communities. Likewise, the FCC continues to transform Universal Service 
programs originally designed to subsidize wired voice service into 
programs aimed at both wired and mobile broadband.
Recommendations
    As I noted in my written testimony, however, there are still ways 
in which these positive developments can be further improved. 
Specifically, I identified eight reforms that Congress should consider 
including in future infrastructure spending or otherwise. (A detailed 
explanation for each can be found in my written testimony.)

  1.  Limit and carefully control direct investments. Any direct 
        infrastructure spending Congress approves should be targeted 
        exclusively to the few remaining census tracts, mostly rural 
        and tribal, where there is currently no competitive broadband 
        service. Congress should consider setting aside a modest 
        portion of its proposed infrastructure fund, say $20 billion, 
        for a one-time rural broadband acceleration program.

  2.  Severely limit ongoing support. To date, Federal efforts to 
        overcome the financial hurdles to deploying rural broadband 
        infrastructure have suffered from a structural flaw. The FCC 
        provides payments in the form of small ongoing annual 
        subsidies, even in areas when all that was needed to overcome 
        high infrastructure costs was an initial capital investment.

     Future investments should avoid this error by offering instead 
        carefully-calculated one-time subsidies. While some truly high-
        cost areas will continue to need both start-up capital and 
        operating support, the emphasis for any new rural broadband 
        infrastructure spending should be on those locations for which 
        capital alone can overcome the need for further government 
        subsidy.\6\
---------------------------------------------------------------------------
    \6\ See Blair Levin and Carol Mattey In Infrastructure Plan, a Big 
Opening for Rural Broadband, Brookings Institution, Feb. 13, 2017, 
available at, https://www.brookings.edu/blog/the-avenue/2017/02/13/in-
infrastructure-plan-a-big-opening-for-rural-broadband/.

  3.  Extend ``Dig Once.'' Lack of coordination between broadband and 
        other infrastructure projects wastes time and resources, 
        particularly when roads are being built or maintained. It is 
        essential that we fully embrace a ``Dig Once'' rule, requiring 
        installation of conduits for broadband equipment whenever roads 
        are being dug up for any reason. According to the Government 
        Accountability Office, ``Dig Once'' can reduce the cost of 
        deploying fiber under highways in urban areas up to 33 percent 
        and up to 16 percent in rural areas.\7\
---------------------------------------------------------------------------
    \7\ See Letter from Government Accountability Office, June 27, 
2013, available at http://www.gao.gov/assets/600/591928.pdf.

  4.  Address other unproductive barriers to mobile deployments. 
        Congress should establish Federal guidelines to eliminate 
        unnecessary bickering over pole attachments, especially for 
        poles that are municipally-owned or owned by regulated 
        utilities. To avoid rent-seeking behavior that grinds the 
        process to a halt, we need cost-based attachment fees, ``climb-
        once'' policies, and basic rules about notice and contractor 
        qualifications. Network operators should not be penalized in 
        either time or money for replacing or upgrading small cell 
        equipment--applications that are often treated as full-scale 
---------------------------------------------------------------------------
        installations of new towers.

  5.  Re-engineer government processes that hinder private investment. 
        Beyond pole and building access issues, both wired and mobile 
        deployment is being held back unnecessarily by unproductive 
        costs associated with dealing with slow and overly bureaucratic 
        local governments. The problem is not so much local regulations 
        as it is local processes--or often, the lack thereof. Best 
        practices distilled from a long history of good and bad 
        examples should be established at the Federal level and 
        included in the infrastructure bill as conditions for local 
        jurisdictions to receive Federal assistance.

  6.  Make investments technology-neutral. Until now, Universal Service 
        programs have either explicitly or implicitly favored wired 
        technologies, for example by defining minimum broadband speeds 
        above what is reasonably necessary or by setting latency 
        standards in a way that intentionally excludes satellite-based 
        solutions.\8\ No matter how the infrastructure bill provides 
        for broadband in the remaining unserved locations, it should do 
        so on a technology-neutral basis to encourage continued 
        development of new options.
---------------------------------------------------------------------------
    \8\ See Doug Brake, A Policymaker's Guide to Rural Broadband 
Infrastructure, Information Technology and Innovation Foundation (April 
2017), available at http://www2.itif.org/2017-rural-broadband-
infrastructure.pdf?mc_cid=4fb4705a17&mc_eid=98756dc702.

  7.  Address nonfinancial causes of the digital divide. Many 
        unconnected Americans don't know how to use a computer or even 
        a smartphone, let alone how to install and maintain networking 
        equipment inside or outside their home. Whatever funding the 
        infrastructure law provides for broadband will be wasted if 
        some of that support isn't directed to providing hands-on 
        education and on-going support. Community groups and senior 
        centers are natural conduits for these essential services, 
---------------------------------------------------------------------------
        along with private programs that are today underfunded.

  8.  Use the bully pulpit to encourage digital want-nots. Public 
        education about why the infrastructure bill is spending money 
        on broadband will be critical to getting maximum value from any 
        new investment. That effort should include, at a minimum, the 
        White House and related Departments including those dealing 
        with commerce, housing, health, energy and education.

    Following these basic recommendations will maximize the value of 
any taxpayer money spent on broadband infrastructure. Even more, these 
simple steps will help multiply government spending with continued 
private investment, accelerating efforts to close the digital divide 
and bring the least-connected parts of the country into our growing 
digital conversation.
    In Silicon Valley, that's what we call a win-win-win.
                                 ______
                                 
     Response to Written Question Submitted by Hon. Jerry Moran to 
                           Brian M. Hendricks
    Question. I am excited to see Kansas serving as a leader to other 
states by successfully accelerating wireless deployment and investment 
by streamlining their processes through its state legislature. I 
understand that other states have not been able to reach similar state-
level legislative solutions.

    a. Do you think the patchwork if deployment laws across the states 
will impact uniform investment and deployment 4G and 5G infrastructure?
    Answer. Senator Moran, yes, Nokia believes that a patchwork of laws 
and local zoning practices creates a significant problem. As I noted in 
my testimony, in order to evolve our wireless infrastructure further 
under the hypothetical Fifth Generation (5G) umbrella that will require 
networks to have near zero latency (delay in transmission of packets) 
and extremely high peak data rates, we will need to deploy hundreds of 
thousands of small cells, distributed antenna systems (DAS), and other 
micro-infrastructure. Doing this will allow current networks to support 
use cases with zero fault tolerance like autonomous driving vehicles. 
Making substantial upgrades to large macro tower sights as the primary, 
or only method, to increase capacity and coverage in 5G rather than 
utilizing smaller cells to bolster and evolve 4G networks does not make 
technical or economic sense.
    In order to achieve ubiquitous deployment of 5G in the U.S., we 
need to ensure that there are predictable, non-burdensome frameworks 
available to process the many thousands of small infrastructure 
applications we anticipate. When a service provider and a vendor 
partner like Nokia look at areas for deployment planning purposes, you 
want the considerations to be: (1) what infrastructure is already 
deployed, (2) how is the network performing and what is the user 
experience like, and (3) what new equipment makes the most sense for 
this area to increase coverage, capacity and performance to support the 
emerging Internet of Things (IoT) vision of a connected society. You do 
not want a variable in that equation to be the regulatory environment.
    We have seen deployments quickly become infeasible due to things 
like: (1) requirements to submit numerous applications for a single, 
multi-site deployment, (2) requirements that three or more agencies 
must sign off on an application in seriatim rather than using 
concurrent review, and (3) initial connection fees and recurring 
monthly ``rents'' that exponentially increase the cost of the project. 
Modest projects, such as a the hypothetical 200 small cell deployment I 
mentioned in the hearing, quickly amass costs in the millions of 
dollars just to obtain regulatory approval and access. That is before 
we have even purchased the equipment, established connectivity and 
power, or served a single customer.
    What the foregoing will produce, if unchecked, is a very uneven 
deployment of these new network components. For example, prioritizing 
one urban area over another, or one suburban or mid-sized city over 
another based primarily on a regulatory cost vs. economic opportunity 
analysis. We have already begun to see this happen. Many cities across 
the country have expressed interest in demonstration deployments for 
special events, or to do early deployments of connected infrastructure 
or Smart Cities technology. Unsurprisingly, the cities chosen for early 
deployment share in common a few characteristics, including: well 
established processes, dedicated personnel to review and facilitate 
approval and siting, and fees that are tied closely to the actual costs 
incurred by the city in furnishing access.
    Nokia believes that a more harmonized framework across the country 
would greatly aid in planning and deployment of the next generation 
networks. Some of these concepts are discussed in my response to the 
next question. Importantly, if we do not see greater consistency in the 
processes, fees and other circumstances related to siting of 5G 
infrastructure, roll out of the technology will be very uneven across 
the U.S. And, that has important implications because 5G is an 
essential development to ensure that all of the contemplated uses 
cases, from connected healthcare and its improved access to diagnostic 
and therapeutic medicine to intelligent transportation are available to 
all Americans. Closing the digital divide between communities with 
robust broadband access and those without it has been a major policy 
priority. We do not want lack of common sense, reasonable siting 
policies in many jurisdictions to be a reason the divide grows further.

    b. What further actions can the Federal Communication Commission 
(FCC) take to incentivize the deployment of 4G and 5G infrastructure?
    Answer. The FCC has played an important role over the last few 
decades in promoting the deployment of communications networks that 
meet the needs of consumers by providing guiderails where necessary to 
achieve deployment goals. The FCC can do so again today by modernizing 
its approach to wireless siting to reflect the unique challenges of 
further building out today's 4G LTE networks and tomorrow's 5G 
networks.
    As I previously noted, dense networks of smaller wireless 
facilities are key to creating the capacity needed to support next-
generation wireless networks. Small cells are usually no more than a 
few feet in dimension and are typically placed on existing structures 
like rooftops, water towers, and the sides of buildings, or our poles 
along local streets and rights of way. Although some states and 
localities are beginning to understand the importance of small cell 
technologies and are streamlining local policies to facilitate their 
deployment, many others are imposing on small cells the same types of 
regulations, laws, and requirements that govern macrocell (large, 
frequently tower-based) deployments. These barriers can take several 
forms, including those I mentioned in my response to the preceding 
question and through direct or de facto prohibitions on new wireless 
infrastructure.
    The FCC can address these barriers without undermining localities' 
important role in permitting new facilities. Specifically, the FCC can 
ensure that localities issue permits for wireless facilities that allow 
them to fully recover their costs to process the permits, but that 
nevertheless are issued within reasonable timelines and without 
unreasonable requirements (so-called shot clocks, prohibitions against 
moratoria and policies that severely restrict deployment based on 
arbitrary criteria such as not putting a small cell on a pole more than 
30 feet in height). Doing so will enable the rapid buildout of next-
generation networks and will foster connected, smart communities across 
the country. There are multiple ways to achieve this. The FCC could 
utilize its open proceeding to establish a framework for reasonable 
fees and ``shot clocks'' that states and localities must follow. The 
Commission could then utilize its Broadband Deployment Advisory 
Committee (BDAC) to create a set of model processes, perhaps a 
template, that states and localities could adopt as an operating 
framework. The BDAC should include more representation from state and 
local governments than it does at this time to further that 
collaborative process. Following its rule making and BDAC process, the 
Commission would be in a strong position to review ongoing siting 
practices and provide relief where unreasonable or unworkable practices 
remain. Congress should also consider augmenting the tools that the 
Commission has to effectuate this type of outcome by clarifying 
Sections 253 and 332 of the Communications Act.

    c. What role do you see a potential comprehensive infrastructure 
package playing in modernizing Federal deployment laws and rules?
    Answer. Senator Moran, we believe that a comprehensive 
infrastructure package is an excellent policy opportunity for Congress. 
With respect to broadband, we have noted that a fiscal component should 
be included, and that there are a variety of ways in which Congress can 
incentivize and enable early deployments of 5G and IoT technology on a 
small scale. We also believe that there are opportunities to further 
address the complexities of rural deployment.
    With respect to Federal deployment laws and rules, Nokia is 
cognizant of the challenges in attempting to reform siting policies and 
rules related to Federal land and buildings, particularly because there 
are multiple committees in both the House and Senate with a 
jurisdictional claim to the effected agencies. That makes a single, 
stand alone bill addressing siting much more difficult to effectuate. 
The nature of a comprehensive infrastructure package, which of 
necessity will involve inputs and collaboration across multiple 
committees, makes it more sensible to address the issue of broadband 
infrastructure siting comprehensively.
    Such a bill will likely include policy and fiscal focus on highways 
in which so-called ``dig once'' language can greatly increase the 
availability and cost effectiveness of fiber for future broadband 
needs. Similarly, an infrastructure bill will likely include a section 
dealing with broadband and the programs administered by both the FCC 
and the Department of Commerce (NTIA) making it reasonable to further 
clarify FCC authority over infrastructure siting practices at the state 
and local level. In addition, broadband is likely not the only 
technology or activity that can benefit from a review and alteration of 
policies and practices at multiple Federal agencies including the 
Department of the Interior that play a role in determining access to 
Federal lands and buildings. Congress is in a strong position to 
utilize incentives to these agencies to adopt reforms, or to prescribe 
what processes should look like for review of applications. And, 
further, to provide a deemed granted framework or other approval 
mechanism that grants applications for access if the agencies fail to 
follow the prescribed practices.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maggie Hassan to 
                           Brian M. Hendricks
    Question 1. It's clear there is major interest in improving access 
to broadband and the way we deploy broadband services. This national 
goal transcends party lines, and I'm pleased to be a part of this 
committee where I can work with colleagues on both sides of the aisle 
to make improvements. I would like to hear from you all, what is being 
done, and what more should be done to ensure rural Americans are not 
left behind as technology evolves and innovations emerge. Rural America 
is more complex and difficult to connect for many reasons, but every 
American should have the opportunity to reap the social and economic 
benefits of broadband connectivity. What are your thoughts?
    Answer. Thank you, Senator Hassan, for your leadership and the 
opportunity to provide Nokia's views. Rural deployment of broadband has 
been a decades long challenge. There are several reasons for this, 
including: (1) lower population densities that in turn provide fewer 
subscribers to facilitate a workable business case, (2) even where 
broadband has been available, we have done a poor job as an industry of 
creating interest in adoption by rapidly advancing the use cases to 
make adoption a high value proposition for all consumers, and (3) the 
high cost of deploying fiber to every home, and technical limits in 
early wireless technology. High adoption rates are even more critical 
in areas where you may have fewer enterprise customers (businesses), 
fewer anchor institutions, and smaller pools of consumers.
    There are some promising signs that we may be able to overcome some 
of these previous challenges. One the ``wired'' side, the cost of fiber 
has declined, making new deployments much less costly. In addition, 
provisions such as ``dig once'' that will require future highway 
projects to include conduit for future fiber deployments will cause 
further cost efficiencies by avoiding much of the cost of trenching for 
new cable to be laid. Nokia has also made significant advances in 
technology that allow for the use of already deployed copper 
infrastructure to provide ever higher broadband speeds. Speeds up to 1 
Gbps in the transport area of networks are now feasible in certain 
circumstances, which in turn increases data speeds available to 
consumers.
    With respect to wireless, prior generations of wireless broadband 
have been able to greatly expand the availability of broadband to 
consumers, but not always at data rates that made wireless a 
competitive alternative to other services. That changed significantly 
with the deployment of the 4th generation (4G) of wireless. Peak data 
rates have risen considerably in the last five to seven years, and 
further evolutions are anticipated between now and 2020 that will bring 
mobile broadband speeds to a much higher level.
    Recognizing that in rural areas there are still challenges, 
including lower data rates for individuals that live miles away from 
the nearest cell tower, Nokia has worked on solutions that can increase 
the performance of current wireless service. One product, called 
FastMile, allows a consumer to mount a very small multi-directional 
antenna on their premises through a self-install process. This 
increases the normal coverage area available to consumers by 12x and 
can increase available throughput and data rates by 2.5x. The design of 
this technology is attractive to wireless service providers because it 
can be overlaid on their current infrastructure deployments and 
utilizes different frequency bands than the underlying network, many of 
which are underutilized in rural areas. The net effect of this is to 
dramatically change the business case for rural deployment of high 
quality mobile broadband.
    To build on these developments, Congress could consider:

   Further work on spectrum, particularly in identifying low 
        band spectrum (below 6 GHz) because the propagation 
        characteristics are well suited for all types of deployments, 
        and particularly good for rural deployments. Nokia strongly 
        recommends that Congress prioritize the range of 3.1-3.55 GHz 
        and 3.7-4.2 GHz, both in the MOBILE NOW Act;

   In any infrastructure bill that includes broadband, direct 
        additional resources toward foundational research into 
        increasing performance of currently deployed copper and fiber 
        infrastructure, and solutions that can increase the efficiency 
        of spectrum use or utilization of lightly used bands available 
        in rural areas.

    Question 2. Mr. Hendricks, as we prepare for the future of wireless 
networks and pave the way for 5G networks specifically, I think it 
would be useful to shed light on what 5G will mean for Granite Staters 
and people across the country. What will our devices be able to do with 
5G that they can't do today? What will 5G mean in practical terms for 
our constituents? What are the biggest impediments to deploying 5G 
throughout the country and particularly in rural areas like those in my 
state of New Hampshire?
    Answer. The short answer to what can consumers expect from 5G is 
this: a truly portable and programmable world. They will be able to 
have access to the information and services they value, wherever they 
are, with an expectation of reliability that is much higher than even 
current LTE networks provide. They will be able to conduct commerce, 
access high bandwidth services including health care, and monitor and 
control appliances. They will have access to lower cost transportation 
due to the cost reduction benefits produced by autonomous vehicles. 
Some of the more exciting aspects of the programmable world Nokia sees 
include the potential for remotely delivering not just diagnostic, but 
therapeutic health care services, greatly improving the quality of the 
rural health care delivery system.
    As I noted in my written testimony, the United States is fortunate 
to have excellent wireless networks. But, it is important to note that 
3G networks were engineered primarily for voice and to support basic 
data including text. The 4G (LTE) networks deployed in the last seven 
years made an exponential leap in capability, but they were still 
designed primarily for voice and higher speed data to support 
applications like social networking and streaming video. The capacity 
in these 4G networks has been tested at times, in part because of wider 
adoption of smart phones and the introduction of other handhelds such 
as tablets and by the emergence of streaming services like Netflix. 
Wireless carriers have stayed ahead of these demands with increases in 
spectrum utilization efficiency and network management.
    As we look to the future, we need to be cognizant of network 
performance issues including peak data rates and latency (delay in 
transmission). Current networks have made significant progress in peak 
data rates, but still see levels well below what will be necessary to 
support applications with a zero-fault tolerance and which require 
massive bandwidth such as autonomous driving vehicles and some aspects 
of health care.
    There is a distinction between ``connected'' transportation, which 
relays data to and from a vehicle but the driver remains the 
controlling interface with the road, and truly autonomous vehicles 
whose critical operating systems including braking cannot depend on a 
network with insufficient capacity and performance. LTE networks of 
today are well suited for connected transportation (information relay 
to the vehicle). But with latency of 35-60 milliseconds, they are less 
well suited in their current deployment configuration to ensure safe, 
autonomous vehicles on a mass scale. Similarly, connected health care, 
which can include remote diagnostic services and even some imaging is 
quite different than conceptual ideas like remote surgery that will 
require latency to be near zero.
    What the foregoing makes clear is that there is a distinction 
between applications where basic data is being transmitted from sensors 
(connected health, transportation, some aspects of smart metering) and 
services which will require much more bandwidth and much lower latency. 
It is not inconceivable that we will see a true industrial Internet, 
with remote operation of large machinery, a tactile Internet that 
allows remote surgery, and the transmission or real time 4K quality 
video as part of virtual or augmented reality.
    The challenge, as I noted in my testimony is that these use cases 
are arriving at the same time billions of new devices will be 
connecting to current networks, ranging from sensors on appliances and 
information interfaces in transportation to health care devices and 
services. From a challenge standpoint, we must be able to deploy 
hundreds of thousands of new small cell and related technologies to 
``densify'' the LTE networks already deployed and to evolve them 
further. This involves several challenges: (1) creating the technology 
and making it small, cost effective, and higher performing, (2) gaining 
access to the necessary rights of way and other structures at a local 
level to make these deployments, and to avoid egregious charges for 
access that compromise the financial viability of the projects, and (3) 
as I noted in the foregoing question, continuing to find ways to get 
more performance from the infrastructure that has been deployed already 
through additional spectrum allocations for mobile broadband 
applications.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Catherine Cortez Masto 
                         to Brian M. Hendricks
    Question 1. In your testimony, you spoke about Nokia's personal 
experience with the frustrating siting process. Can you elaborate more 
on any specific challenges Nokia has faced in connection with any 
permitting on Federal lands or with Federal facilities?
    Answer. Thank you Senator for the questions and for your engagement 
on these issues. As I noted at the hearing, Nevada has been very 
forward leaning in its technology policy on a bipartisan basis. We 
frequently have conversations with local officials including 
infrastructure planners about their needs and interests, and they 
regularly inquire about changes they can make to policies to enable 
rapid deployment of new equipment. Industry has spent considerable time 
focusing on the issues with state and local government processes, which 
remain problematic, so I believe it is important to note examples of 
governments that are working hard to enable 5G and the connected 
society vision when we do encounter them. We have spent less time on 
the Federal issues. So, thank you for providing an opportunity to offer 
more information.
    Our experience siting on Federal lands varies based on several 
factors, including: (1) the responsible agency, (2) the policies and 
practices (if indeed there are any), and (3) personnel issues. On the 
personnel side, as with the state and local environment, we often find 
at both the agency regional office and the national level there are 
limited personnel resources dedicated to application review. Policies 
for handling applications have not been effectively communicated to all 
responsible staff and training in the policies and the procedures for 
processing applications has not been sufficient. Regions where the 
amount of Federal land tend have more resources, so the resourcing 
issues are magnified in states where there is relatively little Federal 
land being managed. Applications for siting on Federal land can take 
many months, or even years and there is no effective guidance or rule 
governing how quickly the applications must be reviewed and acted upon. 
Some of the process length is due to the list of regulatory 
requirements including impact studies, but much of the length is due to 
personnel limitations and training issues.

    Question 2. You also mentioned that the lack of employee resources 
exacerbates a number of other impediments. Can you elaborate on the 
impact that a lack of sufficient staff within Federal agencies, like 
the Department of Interior, or others, have on this process? How do you 
think the Federal hiring freeze has further impeded the efficiency of 
processing applications?
    Answer. Roughly 28 percent of the land in the U.S. is owned by the 
Federal Government. It is therefore critical for the wireless industry 
to have access and the ability to construct facilities on Federal 
lands, properties, and buildings, particularly in rural and remote 
areas that more often consist of Federal lands. The industry works with 
numerous Federal agencies that manage those lands so that facilities 
can be constructed. But, the processes vary greatly across agencies and 
can often take years to complete. The lack of uniform processes, 
including timelines for required action and procedures for reviewing 
and responding to applications is not a personnel issue, it is an issue 
of not prioritizing siting as a function of the agency. This is 
something that Congress has, and can continue to address.
    Ensuring that agencies are appropriately staffed, imposing 
additional Congressional oversight on agencies administering Federal 
lands, and encouraging adoption of standardized deadlines and processes 
for reviewing wireless siting applications will promote new 
infrastructure construction for the benefit of Federal employees and, 
more broadly, American consumers.
    Nokia cannot say definitively whether the hiring freeze has (or 
will) exacerbate the problems we have experienced. However, it is safe 
to say that the freeze limits options to overcome the staffing 
limitations. A few practical suggestions that can improve siting on 
Federal land include:

   At each relevant agency that is involved in the review and 
        approval of siting on Federal lands, direct that the head of 
        the agency appoint a career employee, and/or to establish an 
        office that is responsible for:

    (1)  maintaining an updated policy document regarding 
            infrastructure siting on Federal land under their 
            jurisdiction;

    (2)  providing points of contact within the agency that can answer 
            questions (ombudsman like approach) and ensuring that all 
            regional offices have at least one employee responsible for 
            reviewing and responding to applications; and

    (3)  developing and clearly communicating training on the agency 
            procedures to regional office staff.

   Establishing standardized application review and approval 
        timelines, and providing a mechanism for deeming applications 
        approved if they are not acted upon within these time periods; 
        and

   Consider streamlining or waiving the application of any 
        remaining Federal regulations that impose impact analysis 
        requirements on equipment below a certain size.

    Question 3. In our discussion during the hearing, we discussed your 
highlighting of Smart Cities. I just wanted to follow-up and get your 
response about whether: (a) Nokia was a partner with any communities 
who applied for the USDOT 2015 Smart City Challenge? And (b) Would 
Nokia be looking to engage with public and private sector applications 
for any similar efforts in the future?
    Answer. During this particular challenge Nokia was completing our 
acquisition of infrastructure provider Alcatel-Lucent and divesting 
other non-core businesses to retool our market strategy. We did not 
have some of the core competencies that were necessary to make a 
compelling partner. Following completion of the acquisition, Nokia 
announced an aggressive move into certain vertical markets including 
Smart Cities where we believe our products are a compelling fit. We 
anticipate being active as partners with cities on future applications 
and have been working on projects in non-U.S. markets such as connected 
sewer, connected bus shelter and port security. I have included here a 
link to our smart city site that includes a high-level summary of our 
vision, potential capabilities, and links to white papers and other 
items of interest. https://networks.nokia.com/smart-city
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Jerry Moran to 
                           Hon. Jeff Weninger
    Question 1. Kansas was one of the first states in the Nation to 
pass legislation to eliminate barriers to wireless broadband 
deployment. In 2016, the Kansas legislature passed and the Governor 
signed this bill into law to help expedite the deployment of small cell 
technology in the state. Small cell technology will be the backbone of 
the next generation wireless technology and networks, known as 5G. 
Since this bill was signed into law last year, Arizona, Ohio, Colorado, 
and Virginia have all signed into law similar bills. Indiana, Iowa, and 
Florida have passed similar bills that are waiting action by their 
Governors.

    a. Given the wide range of deployment processes and associated fees 
across the country, do you anticipate wireless providers utilizing 
certain states' streamlined state-level deployment laws like those 
found in Arizona and my home state of Kansas?
    Answer. I definitely believe that the cell companies will use this 
as a large part in their decision making process. The fact that Kansas 
and Arizona have a friendly predictable environment now should be a 
very positive factor. I am sure population and density will play a 
factor as well.

    b. How do you see states like Arizona and Kansas serving as models 
of favorable pathways for deployment to other states? And the Federal 
level?
    Answer. I believe our states have set the bar for the others to 
follow. After I had the privilege of testifying I truly believe a 
national model is the way to go. This is critical infrastructure in 
this era. We have to pull together and allow ourselves to succeed. I 
believe there are some states that will need some flexibility for 
weather and different local issues, but I believe you can come up with 
a way to make it work.

    c. Your written testimony mentions the ``productive discussions'' 
between industry and local leaders that were coordinated leading up the 
introduction and enactment of Arizona's state law promoting investment 
in small cell deployment. Could you please elaborate on these 
conversations and their ability to reach a productive consensus?
    Answer. The large group of stakeholders had fifteen to twenty 
meetings. At first it was tense and it was tough to find common ground. 
We slowly found out what was the most important issues that the sides 
had. The cell companies main issues were price and having the same 
process for every locale. They needed a price that was reasonable and a 
process that was efficient.
    The municipalities main concerns were for public safety, design 
standards, and concealment requirements. Cities and counties have spent 
years making these areas beautiful and it's understandable that they 
want to keep it that way.
    I also believe that the fact that I am a former city councilman of 
eight years helped. I understand the issue of local control and not 
wanting to give that up. But I also understand and conveyed to them 
that this isn't like any other issue. This is critical infrastructure 
that their constituents want and need.

    Question 2. In your experience, are there examples where state-
level reviews (like environmental reviews) of a permitting application 
can be used by the Federal Government to avoid needless duplication?
    Answer. I believe that it would be much more efficient to allow the 
states to act as the approval mechanism for a Federal program. The main 
goal is to make this efficient as possible and to your point 
duplicating reviews by the Federal Government will certainly delay 
deployment.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Dan Sullivan to 
                           Hon. Jeff Weninger
    Question. The construction season in Alaska is shorter than most. 
This does not allow for delays caused by roadblocks in the federal, 
state, or local permitting process. For example, one of our carriers in 
Alaska experienced delays and increased costs in getting permission to 
install towers in building out their network. This situation involved 
only a few towers, with a small footprint, in a large national wildlife 
refuge.

    a. Representative Weninger, do we need to consider improved tools 
like reasonable shot clocks and ``deemed granted'' remedies in any 
infrastructure package?
    Answer. I believe there needs to be shot clocks and deem granted 
policies. Without them there is no mechanism to make this happen in an 
efficient manner. You can still approve these in batches and pull out 
the ones that the planning department believes has issues. These are 
large investments in communities that the citizens and the government 
want. I am at a loss as to why communities would want to delay such an 
investment.

    b. What are the benefits and challenges to enforcing such 
mechanisms?
    Answer. The benefit is faster deployment, predictability, jobs, 
investment and our country being a leader into the 5G world.
    The challenge is does the policy have any teeth if it's not 
followed? Are some communities doing everything they can to put up 
roadblocks? I would think and hope that situation would self correct. 
It is possible that such behavior might put a community to the back of 
the deployment line.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Maggie Hassan to 
                           Hon. Jeff Weninger
    Question. It's clear there is major interest in improving access to 
broadband and the way we deploy broadband services. This national goal 
transcends party lines, and I'm pleased to be a part of this committee 
where I can work with colleagues on both sides of the aisle to make 
improvements. I would like to hear from you all, what is being done, 
and what more should be done to ensure rural Americans are not left 
behind as technology evolves and innovations emerge. Rural America is 
more complex and difficult to connect for many reasons, but every 
American should have the opportunity to reap the social and economic 
benefits of broadband connectivity. What are your thoughts?
    Answer. I believe a combination of things can be done to speed up 
deployment of cellular technology in rural America.

  1.  I believe targeted tax credits to the companies deploying this 
        technology is appropriate in these specific rural areas. This 
        is critical infrastructure in today's society.

  2.  I like the idea that your committee has put forward involving the 
        use of government facilities and land for deployment in rural 
        areas. Between government owned land and government facilities 
        there are enormous opportunities to deploy this technology 
        throughout rural America.

  3.  The Federal Government should allow the deployment of this 
        technology at Federal Government facilities and land in rural 
        America for no charge. The investment in jobs as well as rural 
        economic development dollars that would flow would more than 
        make up for an arbitrary fee that discourages investment.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Maggie Hassan to 
                           Hon. Gary Resnick
    Question. It's clear there is major interest in improving access to 
broadband and the way we deploy broadband services. This national goal 
transcends party lines, and I'm pleased to be a part of this committee 
where I can work with colleagues on both sides of the aisle to make 
improvements. I would like to hear from you all, what is being done, 
and what more should be done to ensure rural Americans are not left 
behind as technology evolves and innovations emerge. Rural America is 
more complex and difficult to connect for many reasons, but every 
American should have the opportunity to reap the social and economic 
benefits of broadband connectivity. What are your thoughts?
    Answer. Senator Hassan, thank you for this question. Many 
communities around the country, particularly in rural areas, do not 
have access to broadband services, and even those that do have 
broadband, certainly do not have the level of broadband services or 
competition to improve service and rates that many urban areas enjoy. 
During my eight years on the FCC's Intergovernmental Advisory Committee 
and my decades of working on these issues with the National League of 
Cities, I have heard from many local officials across the country that 
have clamored for broadband service, often offering financial 
incentives and other assistance to broadband providers to deploy 
facilities to serve their constituents. Unfortunately, there have been 
few if any takers. Even my own City, which is within dense, urban 
southeast Florida, until recently, was served by only one wireline 
broadband provider until we convinced a second that with greater 
density occurring, it made sense to build out our City.
    The reason broadband providers do not reach rural and other 
communities is simple. As industry itself will plainly state, there is 
simply no current business plan that would support expanding or 
offering such services in these communities. There is not sufficient 
return on investment for the industry to commit the capital to build 
facilities in these areas, particularly compared to the return the 
industry can realize by deploying more infrastructure in dense and 
wealthy areas.
    Obviously, local government siting regulations do not impair the 
ability to offer broadband services in rural and other less attractive 
areas. Quite the contrary, often such local governments will offer 
incentives and other assistance to providers to deploy their service in 
their communities. However, even such incentives do not entice 
providers to do what their bottom line concerns and shareholders will 
not support. Many local governments required complete buildouts to 
ensure that broadband infrastructure was deployed throughout cities and 
counties, even where the return on investment was lower. Such local 
buildout requirements have been opposed by industry and prohibited in 
many states.
    In many cases, the local governments realized that the only way to 
bring quality, affordable broadband to their constituents was to 
provide it themselves. Unfortunately, the industry has opposed 
government broadband, often lobbying state legislatures to place 
prohibitions and other roadblocks on municipal broadband. Recently, the 
U.S. Court of Appeals for the Sixth Circuit upheld such state 
prohibitions in Tennessee and North Carolina.
    There are several actions the Federal Government could take to 
encourage the deployment of broadband infrastructure in such areas.

  (1)  The process for access to Federal lands for the deployment of 
        broadband infrastructure should be made more predictable and 
        easier.

  (2)  Congress must ensure that FirstNet services meet their stated 
        Federal goal of serving both urban and rural communities. 
        FirstNet has the very real potential of bringing advanced 
        services to rural communities.

  (3)  Federal and state policies should support, rather than restrict, 
        local governments' broadband initiatives. Many cities, for 
        example, seek to install conduit as part of transportation 
        roadway projects, to make it easier for broadband providers to 
        deploy fiber. However, Federal funds for such transportation 
        projects may not allow installation of conduit, even at the 
        local governments' expense. Federal funds for roads, bridges, 
        water and other infrastructure should be available for 
        broadband infrastructure as well. Federal law should also allow 
        local governments to provide broadband services if such 
        governments decide to do so.

  (4)  Finally, Congress should consider subsidies or tax incentives 
        that may spur private investment, which, coupled with potential 
        public funding, would actually bring these vital services to 
        rural America. Further, many states are now granting tremendous 
        taxpayer subsidized incentives to the industry in the form of 
        free or basically free access to government property in the 
        rights of way, to deploy infrastructure. Governments should be 
        able to negotiate for the benefit of their constituents in 
        exchange for such valuable subsidies. In this day and age, it 
        is absolutely outrageous that there are large segments of 
        Americans that do not have access to affordable, quality 
        broadband service. If left to market forces, this will 
        continue. However, compared to other issues confronting our 
        nation, this does have readily available solutions. Thank you 
        again for the opportunity to respond.

                                  [all]