[Senate Hearing 116-]
[From the U.S. Government Publishing Office]


 
  FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS FOR FISCAL 
                               YEAR 2021

                              ----------                              


                         TUESDAY, JUNE 16, 2020

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.

    The subcommittee met at 10:04 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. John Kennedy (Chairman) presiding.
    Present: Senators Kennedy, Moran, Boozman, Daines, 
Lankford, Coons, Manchin, and Van Hollen.

                   FEDERAL COMMUNICATIONS COMMISSION

               OPENING STATEMENT OF SENATOR JOHN KENNEDY

    Senator Kennedy. The subcommittee meeting will come to 
order.
    Let me start over. The subcommittee meeting will come to 
order.
    I want to thank everybody for coming. I've got a fairly 
short statement that I want to read and then I will turn to 
Senator Coons.
    We're obviously convening under different circumstances 
than our previous meeting. We're following the guidance of the 
CDC and the Office of Attending Physician. So we're spaced 
further apart. Our staff is reduced, though we're grateful for 
all of them. The general public is watching online rather than 
filling up the room.
    So our hearing today will look a little different. I think 
we can all agree that the Capitol feels a little different. The 
halls of Congress feel a little different. Small businesses, if 
they're allowed to open at all, are operating under very 
different circumstances.
    American homes have become classrooms and offices for 
millions of American families, and at least for awhile, 
American life as we know it has changed.
    Nonetheless, access or inaccess to broadband Internet 
services, especially in rural areas, has remained unchanged and 
it might be a good topic for us to touch on today.
    Our witness today, of course, is the esteemed Chairman of 
our FCC, the Honorable Ajit Pai. He is one of government's 
foremost experts on broadband Internet access. Thank you, Mr. 
Chairman, for being here. We'll hear from the Chairman today 
about the agency's Spectrum Auctions Program and any other 
topic that Members of the subcommittee would like to talk to 
him about.
    I hope today we'll address the critical need to expand 
broadband in this country. I think we continue to lag and I 
think by not making as much progress as we should, we're 
getting further behind.
    We'll discuss the agency's response to the ever-growing 
demand for wireless services, including the Commission's 
decisions with respect to C-band.
    I think everybody in this room knows that a number of us, 
including me, have been pretty outspoken about the mid-band 
spectrum. I have believed from the beginning that we should 
have a public auction as a transparent means to allocate the C-
band and as an assurance that Luxembourg satellite companies 
and their shareholders would not be the beneficiaries of what I 
think any fair-minded person would consider to be a windfall 
that should go to the American people, and I'm very pleased 
that the Chairman and the Commission ultimately announced their 
support for a public auction this year.
    I'm not completely pleased, though. I'm pleased with the 
public auction, but I'm not pleased with the parameters of the 
plan, as the Chairman knows. I opposed the Commission's 
proposal to provide $15 billion in various payments to the 
satellite operators. It makes sense to me as we ask the 
satellite operators not to move to a new part of the spectrum, 
just to move within the spectrum, the C-band, and to allow us 
to use that portion of the C-band that they're not using. That 
seemed reasonable to me and it seemed reasonable to me that we 
should pay their moving expenses.
    But we're paying them a lot more, about $9 billion in 
walking-around money, and that money could be used to expand 
our broadband. It could be used to expand rural broadband. It 
could help students connect to the Internet to complete their 
homework or simply pay down our national debt.
    Let me say it again. We're providing, I think, somewhere in 
the neighborhood of $6 billion in moving expenses, which seems 
fair to me, but the $9 billion to do something that they would 
have to do anyway and are required to do, the FCC tells me, I 
think is a waste of taxpayer money.
    I've authored a bill to address those concerns. Rather than 
work with Congress on a solution, the Commission decided to 
move forward and to make the deal with the satellite companies, 
the biggest of which promptly went into bankruptcy to try to 
provide leverage.
    I mean, these companies were willing to give up something 
they didn't own in exchange for billions of dollars. I guess I 
shouldn't blame them for not thumping a free melon and taking 
advantage of the offer. I blame us for not negotiating a better 
deal. So today, we'll talk about that.
    But before introducing our witness, I want to turn to my 
friend from Delaware.

           OPENING STATEMENT OF SENATOR CHRISTOPHER A. COONS

    Senator Coons. Thank you, Chairman Kennedy. Thank you for 
convening this hearing, and welcome to Chairman Pai for what I 
believe is your third hearing before this subcommittee. We 
welcome regular opportunities for detailed engagement like 
this.
    Mr. Chairman, I want to commend you and your staff for 
making this hearing happen while taking appropriate precautions 
to protect us in attendance. We need to keep engaging and 
demonstrating our commitment to thorough and vigorous 
oversight. So I look forward to today's hearing.
    Senator Kennedy, you've been a leader on the C-band issue, 
a strong advocate for a public auction, consistent with your 
role as a steward of Federal dollars, and I'm glad the auction 
is scheduled for this December.
    Chairman Pai, I look forward to hearing whether there's 
anything we can do to help make certain that this happens on 
time. I think we all share an understanding of how critical a 
successful and timely deployment of 5G is to our country.
    It should bring billions of dollars to the Treasury and, 
Senator Kennedy, I'd love to find a way to work together to 
have some of these auction proceeds go to expand broadband in 
rural and other underserved areas, and I, of course, have a few 
ideas.
    I'm interested in also discussing today the implementation 
of the Broadband Data Act, ways to facilitate online learning 
during this coronavirus epidemic, and figuring out how we can 
make progress on robocaller fine collection and repair and 
replace funding.
    And last to Chairman Pai, I just want to commend you and 
your staff for the successful implementation of the Telehealth 
Demo that was included in the CARES Act. You note in your 
prepared testimony that the ``quickly-implemented program has 
made funds available to grantees across the country, not least 
of which in the States of Louisiana and Delaware.'' So I 
commend you for the wisdom of your prioritization.
    So with that, Mr. Chairman, I look forward to today's 
hearing and appreciate your working swiftly to make it happen 
in a safe and appropriate way.
    Thank you.
    Senator Kennedy. Senators, do either of you have anything 
you'd like to say?
    Senator Moran. Not at this point.
    Senator Lankford. No, thank you.
    Senator Kennedy. Okay. Mr. Chairman, why don't you stand 
and I'll swear you in?
    [Witness Sworn.]
    Senator Kennedy. Thank you, Mr. Chairman.
    The Chairman really needs no introduction. He's been on the 
FCC I think since May of 2012. The President designated him as 
the Chairman in January of 2017. He's a proud not current 
resident but at one point he was a resident and grew up in 
Parsons, Kansas. He went to Harvard undergrad. He went to 
Chicago Law School, two extraordinary institutions.
    He's been an attorney at the Justice Department, the FCC 
Office of General Counsel, Senate Judiciary Committee. He was a 
partner at Jenner & Block. You were at Jenner & Block, weren't 
you?
    Chairman Pai. Yes, sir.
    Senator Kennedy. Wonderful law firm, great law firm, has 
been for years, before his confirmation at the FCC, and he's 
worked at Verizon Communications earlier in his distinguished 
career.
    Mr. Chairman, you honor us with your presence and the floor 
is yours.
STATEMENT OF HON. AJIT PAI, CHAIRMAN, FEDERAL 
            COMMUNICATIONS COMMISSION
    Chairman Pai. Well, thank you, Chairman Kennedy, for the 
kind words.
    It has been 8 years, although at this point I measure my 
tenure more in pounds and gray hair instead of time.
    Chairman Kennedy, Ranking Member Coons, and Members of the 
subcommittee, I appear before you today to discuss the FCC's 
Spectrum Auction Program and to update you on the work of the 
Commission.
    When I last appeared before you on March 10, I testified on 
the Commission's fiscal year 2021 Budget Request. Immediately 
following that hearing, as the Chairman pointed out, our 
country was disrupted drastically as a result of the COVID-19 
pandemic.
    Ever since, the FCC has been deploying every resource at 
our disposal to deal with this unprecedented national 
emergency. For example, I challenged broadband and telephone 
service providers in early March to take what I called the Keep 
Americans Connected Pledge, a voluntary commitment to, among 
other things, not terminate service to any residential or small 
business customers because of their inability to pay their 
bills due to the disruptions caused by the coronavirus 
pandemic.
    I'm proud of the fact that over 780 broadband and telephone 
service providers across the country, including all of our 
Nation's largest providers, have taken that pledge.
    Moreover, many have gone above and beyond the pledge and 
have taken additional steps to maintain or expand connectivity 
during the pandemic.
    I also want to thank this subcommittee for helping to 
establish the COVID-19 Telehealth Program as part of the CARES 
Act. By promoting connected health care services, we are 
enabling many more people to access care remotely while 
reducing the risks for patients and for health care providers 
alike.
    The Commission established the rules for the program in 
just days after passage of the Act and has now approved funding 
for 305 health care providers in 42 States, plus Washington, 
DC, for a total of almost $105 million in funding commitments, 
including to Louisiana and Delaware, as Senator Coons pointed 
out.
    In addition to its COVID-19-related work, the Commission 
has continued its ongoing efforts to close the Digital Divide 
and execute on the 5G FAST Plan. For instance, we're on track 
to commence an auction of 280 megahertz of mid-band spectrum, 
from 3.7 to 3.98 gigahertz, known as the C-band, beginning on 
December 8.
    Our efforts to make this critical spectrum available for 5G 
have been going very well. In particular, our staff announced 
earlier this month that all eligible space station operators 
currently using this spectrum had committed to an accelerated 
relocation, which means it will become available for 5G in the 
United States 2 to 4 years earlier than otherwise would have 
been the case.
    Getting this essential spectrum out into the marketplace 
years ahead of schedule will promote American leadership in 5G, 
faster and more reliable wireless broadband connectivity for 
consumers, and the creation of millions of jobs, billions of 
dollars of investment, and stronger economic growth.
    But even with all this progress, the Commission needs your 
help. For example, since our last hearing, Congress passed the 
Secure and Trusted Communications Networks Act. This law 
ratifies the Commission's proposal to require small rural 
telecommunications companies to end their reliance on 
manufacturers that pose national security threats.
    I strongly support the rip and replace requirements that 
Congress mandated but that mandate came without money.
    Last November, we estimated that a full-scale rip and 
replace program could cost up to $2 billion and we ordered an 
information collection to nail down those costs for all covered 
carriers.
    We're working through the data that's been collected but we 
also want to work with you to get the funds needed to implement 
this program and protect America's networks from national 
security threats.
    Similarly, Congress passed recently the Broadband Data Act, 
which ratifies the Commission's decision last August to require 
new granular broadband deployment maps, but that law prohibited 
us from relying on the Universal Service Administrative Company 
to implement that effort, and the FCC simply does not have the 
$65 million we need to start the process and implement that law 
through its first year.
    If we don't get that funding soon, this well-intentioned 
law will end up significantly delaying rather than expediting 
the production of better broadband maps.
    Finally, I should note that there is one auction currently 
mandated by Federal law that we are not looking forward to 
holding. Specifically, the Spectrum Act of 2012 mandates that 
we auction off parts of the T-band, which is currently used by 
public safety entities in several States.
    Our highly-skilled economists believe this auction will 
raise less revenue than the amount of money needed to clear 
incumbents from the spectrum but because of the statutory 
mandate, our staff has nonetheless had to divert resources to 
preparing for an auction process to commence in February.
    Bipartisan legislation in Congress would repeal this 
mandate and address related concerns, like 9/11 fee diversion, 
and I hope this legislation passes as soon as possible.
    Chairman Kennedy, Ranking Member Coons, Members of the 
subcommittee, thank you once again for giving me this 
opportunity to testify. I look forward to answering your 
questions in the time to come.
                  Prepared Statement of Hon. Ajit Pai
    Chairman Kennedy, Ranking Member Coons, and Members of the 
Financial Services and General Government Subcommittee, I appear before 
you today to discuss the FCC's Spectrum Auction Program and update you 
on the work of the Federal Communications Commission.
    When I last appeared before you on March 10, I testified on the 
Commission's fiscal year 2021 budget request, as well as the status of 
our strategic goals and programmatic initiatives. Immediately following 
that hearing, our country was disrupted drastically as a result of the 
COVID-19 pandemic, forcing the Commission to adapt both as a workplace 
and as the independent regulatory agency tasked with regulating our 
Nation's communications sector. The Commission shifted to agency-wide 
voluntary telework 2 days after the hearing and progressed to mandatory 
telework soon thereafter. To their credit, our staff did not skip a 
beat.
    And with respect to our mission, I'm committed to using, and we are 
in fact deploying, every resource at the FCC's disposal to deal with 
this unprecedented national emergency.
    For example, I challenged broadband and telephone service providers 
to take the Keep Americans Connected Pledge--a voluntary commitment (1) 
not to terminate service to any residential or small business customers 
because of their inability to pay their bills due to the disruptions 
caused by the coronavirus pandemic; (2) to waive any late fees that any 
residential or small business customers may incur because of their 
economic circumstances related to the coronavirus pandemic; and (3) to 
open a company's Wi-Fi hotspots to any American who needs them. I'm 
proud of the fact that over 780 broadband and telephone service 
providers across the country, including all of our Nation's largest 
providers, have taken the Pledge and thus agreed to take these concrete 
steps to help Americans stay connected. Many of these same companies 
have gone above and beyond the Pledge and taken additional steps to 
maintain or expand connectivity during the pandemic. For example, 
companies have increased broadband speeds at no cost, offered free 
service to low-income households or students previously without 
broadband, partnered with schools and other companies to create remote 
learning plans, and enhanced telehealth opportunities. While the 
initial Keep Americans Connected Pledge lasted for 60 days, I asked 
industry to step up and extend the Pledge through June 30, 2020. And 
I'm very pleased that we now have more broadband providers signed up 
for the Pledge than we did during the initial 60 days.
    I also want to thank this subcommittee and Congress for helping to 
establish the COVID-19 Telehealth Program as part of the CARES Act. 
Funding for this program supports the daily work of frontline 
healthcare providers in hard-hit regions, from New York to Navajo 
Nation. By promoting connected healthcare services, we are enabling 
many more people to access care remotely while reducing the risks for 
patients and healthcare providers. Since its passage, the Commission 
established the rules for the program in just days and has now approved 
funding for 305 healthcare providers in 42 States plus Washington, D.C. 
for a total of $104.98 million in funding commitments. In Louisiana, 
for example, we have awarded funding to the Ochsner Clinic Foundation 
in New Orleans, the University of Louisiana-Lafayette in Lafayette, and 
Access Health in Kenner. In Delaware, we've directed funding to 
Christiana Care Health Services in Newark. In addition, those providers 
with approved applications include: Community Counseling Services in 
Malvern, Arkansas; Northwestern Memorial Health Care in Chicago, and 
the Southern Illinois Hospital Services in Carbondale, Illinois; the 
Central Kansas Mental Health Center, in Salina, and Compass Behavioral 
Health, in Garden City, Kansas; Johns Hopkins Health Systems in 
Baltimore, and the Anne Arundel Medical Center in Annapolis, Maryland; 
Duncan Regional Hospital in Duncan, Oklahoma; and Lincoln County 
Primary Care Center in Hamlin, West Virginia. Our dedicated staff is 
continuing to process applications quickly and carefully to award 
funding to eligible applicants for eligible services and devices as 
soon as possible.
    The Commission has also taken a number of other steps to help meet 
connectivity needs during the pandemic. For example, the Commission 
unanimously adopted my February proposal to fully fund all eligible 
Rural Health Care Program services for the current funding year with an 
additional $42.19 million in funding. We took additional action to 
assist program participants, including extending the application window 
until June 30, 2020, and easing competitive bidding requirements for 
healthcare providers with expiring evergreen contracts. And we've 
waived our gift rules governing the program to enable service providers 
to offer, and hospitals and rural healthcare providers to solicit and 
accept, improved connections or additional equipment for telemedicine 
for free during the coronavirus outbreak. The Commission's action will 
help ensure that rural healthcare providers have the resources and 
flexibility they need to promote telehealth solutions for their 
patients.
    Going beyond telehealth, in light of the COVID-19 pandemic, the 
Commission has waived its Lifeline rules to ensure that existing 
Lifeline subscribers are not involuntarily removed from the program. We 
have streamlined the enrollment process for low-income consumers in 
rural Tribal lands. We have eased documentation requirements to make it 
easier for Americans who have recently lost their jobs as a result of 
the pandemic to enroll in the Lifeline program. We've clarified that 
schools and libraries that are closed due to the COVID-19 outbreak are 
permitted to allow the general public to use E-Rate-supported Wi-Fi 
networks while on the school's campus or library property. We've given 
certain high-cost carriers flexibility to focus Federal monies on hard-
hit areas allowing them to respond to the unprecedented challenges 
posed by COVID-19, and we've provided regulatory flexibility to 
hundreds of rural broadband and telephone providers to immediately 
waive consumer fees. And we've granted temporary waivers to 
Telecommunications Relay Service providers to allow more American Sign 
Language interpreters to work from home in order to maintain relay 
services during this national emergency for individuals who are deaf or 
hard of hearing.
    Our pandemic emergency work has included substantial work to expand 
spectrum access. We quickly granted Special Temporary Authority to 
AT&T, Sprint, T-Mobile, U.S. Cellular, and Verizon to use additional 
spectrum to meet customer demand for mobile broadband across the United 
States, including Puerto Rico and the U.S. Virgin Islands. The 
Commission has granted similar requests to the Navajo Nation and Makah 
Tribe to use unassigned spectrum in the 2.5 GHz band to provide 
wireless broadband service over their reservations as part of the 
emergency COVID-19 pandemic response. And in March, we granted many 
small wireless Internet service providers temporary access to use the 
lower 45 megahertz of the 5.9 GHz band to serve customers in mostly 
rural and suburban communities in need of better connectivity. To date, 
we have granted authority to more than 100 such providers, and we have 
heard that the spectrum is helping address the increased demand for 
broadband associated with the pandemic.
    In addition to all of this work, the Commission has continued its 
ongoing efforts to close the digital divide and implement our 5G FAST 
Plan. Just last week, the Commission finalized the procedures for our 
Rural Digital Opportunity Fund Phase I auction, which will make $16 
billion available over 10 years for the deployment of high-speed 
broadband to millions of rural homes and small businesses that are 
currently unserved. For example, the preliminary list of eligible areas 
includes 215,793 locations in Arkansas, 201,075 locations in Illinois, 
182,628 locations in Louisiana, 141,792 locations in Oklahoma, and 
128,086 locations in West Virginia. We've scheduled that auction to 
begin on October 29.
    We have also made significant progress on the Commission's 5G FAST 
Plan. In April, the Commission took a bold step to increase the supply 
of unlicensed spectrum: We opened up the entire 6 GHz band for 
unlicensed use--a massive 1,200 megahertz test bed for innovators and 
innovation. By doing this, we effectively increased the amount of mid-
band spectrum available for Wi-Fi by almost a factor of five, which 
will be a huge benefit to consumers and innovators across the Nation, 
while also protecting incumbent users of this spectrum from harmful 
interference.
    In May, the Commission modernized the rules of the 900 MHz band to 
help critical infrastructure entities develop and deploy mission-
critical broadband services. This new use of low-band spectrum will 
help us meet the communications needs of industries that provide 
crucial services, like power, to the American public.
    In June, the Commission started a proceeding aimed at revitalizing 
the 70, 80, and 90 GHz bands and expanding their use for new services. 
Putting this long underused, high-band spectrum to use could create new 
opportunities for reliable 5G backhaul to ferry data from the edge of 
the network to its core. And opening up these bands for broadband 
service to known, movable locations could help keep travelers connected 
by creating a more technologically advanced and competitive market for 
air and sea connectivity.
    Our robust auctions program also continues apace. Just before I 
last appeared before you, we had concluded Auction 103, where bidders 
won licenses for 3,400 megahertz of spectrum in the upper 37, 39 and 47 
GHz bands. That auction had followed on the aggressive schedule the 
year before, where we auctioned 850 megahertz in the 28 GHz band and 
700 megahertz in the 24 GHz band. All told, these three auctions made 
available almost five gigahertz of high-band spectrum for commercial 
use. To put that in perspective, that is more spectrum than was used 
for terrestrial mobile broadband by all wireless service providers in 
the United States combined before these auctions started. Gross 
proceeds for these three auctions totaled over $10 billion.
    Coming up next is our 3.5 GHz auction, scheduled to start on July 
23. It will make available 70 megahertz of spectrum for Priority Access 
Licenses on a county-by-county basis, offering the greatest number of 
licenses--over 22,000--ever in a single FCC auction. Last week, our 
auctions staff announced that we had received 348 short-form 
applications to participate in the auction, which (again) is more than 
in any single auction before.
    Next on deck is the Rural Tribal Priority Window of the 2.5 GHz 
auction, which is scheduled to close August 3. As you may recall, the 
Commission last year liberalized the rules of this underused mid-band 
spectrum and created a special opportunity, a filing window, for rural 
Tribes to get early access to 2.5 GHz before the commencement of an 
auction. Our staff has been engaged in reaching out to Tribal 
stakeholders about this opportunity for the better part of a year now, 
and I am pleased with their efforts to assist Tribes in applying for 
this resource despite the onset of the pandemic. Once the window 
closes, I expect we will move forward with scheduling a 2.5 GHz auction 
in the first half of 2021.
    After that, we're on track to commence an auction of 280 megahertz 
of mid-band spectrum from 3.7-3.98 GHz (known as the C-band) beginning 
December 8. Our efforts to make this critical spectrum available for 5G 
have been going very well. In particular, our staff announced earlier 
this month that all eligible space station operators currently using 
this spectrum had committed to an accelerated relocation--which means 
it will become available for 5G two to 4 years earlier than otherwise 
would have been the case. Getting this essential spectrum out years 
ahead of schedule will promote American leadership in 5G, faster and 
more reliable wireless broadband connectivity for consumers, and the 
creation of millions of jobs, billions of dollars in investment, and 
stronger economic growth.
    In the coming weeks, the Commission will receive and release 
information that will be critical for both bidders in the C-band 
auction and incumbents that are responsible for the transition. Space 
station operators must file their transition plans with the agency by 
June 19, and the public will have an opportunity to provide feedback on 
those plans so that incumbents may submit final transition plans by 
August 14. In the meantime, Commission staff will adopt a cost catalog 
that will outline the presumptively reasonable costs for various 
elements of the transition and will decide the one-time payment offered 
to incumbent earth stations that elect to transition themselves. 
Additionally, we expect the selection committee of outside stakeholders 
to choose an entity to serve as the Relocation Payment Clearinghouse by 
July 30, 2020, and Commission staff will review that selection to 
confirm that it is consistent with our rules.
    But even with all this progress, the Commission needs your help. 
For example, since our last hearing, Congress passed the Secure and 
Trusted Communications Networks Act, which ratifies the Commission's 
proposal to require small, rural telecommunications companies to end 
their reliance on manufacturers that pose national security threats. I 
strongly support the rip-and-replace requirements that Congress 
mandated, but that mandate came without money. Last November, we 
estimated that a full-scale rip-and-replace program could cost up to $2 
billion--and we ordered an information collection to nail down those 
costs for all covered carriers. As our staff work through the data 
that's been collected, we want to work with you to appropriate the 
money needed so that we can move forward quickly to implement this 
program and protect our Nation's networks from national security 
threats.
    In a similar vein, Congress recently passed the Broadband DATA Act, 
which ratifies the Commission's decision last year to require new, 
granular broadband deployment maps for both fixed and mobile providers. 
But that law prohibited us from relying on the Universal Service 
Administrative Company to implement that effort--even though we 
repeatedly warned Congress that this provision would disrupt our work 
on improving these maps and prevent us from implementing the new maps 
without a separate appropriation to cover the significant costs of 
developing the new maps. As such, the Commission stands ready and 
willing to implement this measure, but we do not have the $65 million 
we need to get that effort off the ground and implement that law 
through its first year. We want to work with you to appropriate this 
funding as soon as possible so that we can move forward quickly to 
improve our Nation's broadband maps. Otherwise, this well-intentioned 
law will end up significantly delaying rather than expediting the 
production of better broadband maps.
    Finally, given that this hearing is about oversight of our auctions 
program, I should note that there is one auction currently mandated by 
Federal law that we are not looking forward to holding. Specifically, 
the Spectrum Act mandates that we auction off parts of the T-band--
spectrum from 470-512 MHz, which is currently used by public safety 
entities in several States. Our highly skilled economists believe this 
auction will raise less revenue than the amount needed to clear 
incumbents from the spectrum. But because of the statutory mandate, our 
staff has nonetheless had to divert resources to preparing for an 
auction process to commence in February. Bipartisan legislation in 
Congress would repeal this mandate and address related concerns like 
911 fee diversion, and I hope this legislation passes as soon as 
possible.
    Chairman Kennedy, Ranking Member Coons, Members of the 
subcommittee, I stand ready to work with you in the weeks and months 
ahead to ensure that the Commission has the resources necessary to 
achieve our critical objectives during this challenging time for our 
Nation. And I look forward to answering your questions this morning.

    Senator Kennedy. Thanks, Mr. Chairman.
    I'll start. I've got a few questions. My understanding is 
that your agreement with the foreign satellite companies is to 
provide $3 to $5 billion to relocate within the C-band and $9.7 
billion, we'll call it $10 billion, to cooperate, to move 
quicker, and you have suggested that that will save 2 to 4 
years. What's your basis for saying that?
    Chairman Pai. Thank you for the question, Chairman. So 
without the accelerated relocation payments, the deadline for 
moving into the upper portion of the C-band and relinquishing 
the lower part of it for 5G would occur by December of 2025. 
With the accelerated portion, now we have a 180 megahertz that 
would be cleared by December of 2021.
    Senator Kennedy. What are those deadlines based on, Mr. 
Chairman?
    Chairman Pai. I'd have to go back to the C-band Order, but 
it's based on the assessment of staff and that is the soonest 
that we could require those satellite operators----
    Senator Kennedy. I understand it's the assessment of staff, 
but what are they basing that on? Your agreement with the 
satellite companies?
    Chairman Pai. Well, the 2025 deadline you're asking about?
    Senator Kennedy. No. You say by spending $10 billion.
    Chairman Pai. Oh, right, right.
    Senator Kennedy. We're going to speed things up by 2 to 4 
years?
    Chairman Pai. Right.
    Senator Kennedy. And I don't understand why.
    Chairman Pai. Right. So there is certain steps that the 
satellite operators would have to take in order to clear that 
spectrum quickly while preserving the important service that 
they're currently providing.
    Senator Kennedy. They've got to do that anyway. What I'm 
saying is you say, okay, we're giving them $5 billion to 
relocate. We're paying the moving expenses. We're giving them 
$10 billion to relocate faster and it's going to save us 2 to 4 
years. Why? You have the statutory authority which Congress has 
given you to tell them to move now.
    Chairman Pai. So, Mr. Chairman, the accelerated relocation 
payments better align the satellite operators' incentives with 
those of the wireless companies that want that spectrum sooner 
and so this allows them to move quicker.
    Senator Kennedy. I understand that. I mean, if you give me 
$10 billion, I would find that persuasive, as well, but the FCC 
has taken the position that we have to give this $10 billion 
because if we don't, it's going to prolong this 2 to 4 years, 
and I don't understand why when I've read the statutes. They 
say very clearly that the FCC has the authority in the public 
interest to renegotiate any agreement it has.
    I'm not sure that the satellite companies have a license, 
but I'm not sure what they have. They have a privilege, I 
think, but why do we have to give them $10 billion?
    Chairman Pai. Because, Mr. Chairman, ultimately those 
accelerated relocation payments put us all, so to speak, on the 
same page. We want to get the spectrum out there for 5G----
    Senator Kennedy. I know we do, Mr. Chairman, and I don't 
mean to cut you off, but you've said repeatedly I'm giving them 
$10 billion of taxpayer money so they'll move faster and it's 
going to save us 2 to 4 years. I don't understand why.
    I mean, one of the companies has already gone into 
bankruptcy. They say they're going to use that to leverage you 
for more money.
    Chairman Pai. Senator, I can't speak for that company, but 
what I will say is that that company and others, all the 
eligible satellite companies now have opted into the payments, 
which means that we are on track to get that accelerated 
freeing up of the spectrum to get more 5G services quicker, 
which is an important----
    Senator Kennedy. Well, explain it to me again. Maybe I'm 
misunderstanding. How do you know it's accelerating the 
payments?
    Chairman Pai. It's accelerating----
    Senator Kennedy. Accelerating the move.
    Chairman Pai. It's accelerating the move because now we 
have given the satellite operators obviously the funding they 
would need in order to clear that spectrum quicker.
    Senator Kennedy. No, that's separate. You're giving them $5 
billion for relocation expenses. The $10 billion is extra.
    Chairman Pai. Correct. And that gives them a very strong 
incentive to meet that December 2021 deadline. Otherwise, that 
deadline could go on longer. It could take a longer period of 
time.
    Senator Kennedy. Why? You have the authority to tell them 
to move.
    Chairman Pai. Well, Senator, obviously as we detailed in 
the Order, from Paragraphs 215 to 226, that particular 
accelerated relocation payment framework gives them a much 
stronger incentive to move quicker than they otherwise would.
    Senator Kennedy. I know it gives them an incentive. You 
just spent $10 billion of taxpayer money. I would have an 
incentive, too, but it seems to me if you have the 
unconditional authority to tell them to move anyway, you don't 
have a basis for your claim that we're saving 2 to 4 years 
here.
    Chairman Pai. And the other point, Mr. Chairman, if I 
might, is that obviously clearing that spectrum 2 to 4 years 
earlier means that the wireless companies will be much more 
eager to bid at the auction.
    If you're bidding in December of this year on spectrum that 
may become freed by December 2025----
    Senator Kennedy. I don't want to go over too far, but do 
you not have the authority, Ajit, to tell them to be out within 
2 years?
    Chairman Pai. I'll have to check with the General Counsel.
    Senator Kennedy. Sure you do.
    Chairman Pai. Our understanding is that----
    Senator Kennedy. You're a good lawyer. You know you have 
that authority.
    Senator Coons. I'll come back. I've got some more.
    Senator Coons. Thank you, Mr. Chairman.
    Chairman Pai, do you have a good estimate of how much money 
could be returned to the Treasury as a result of this 
particular auction after payment of relocation costs, costs 
associated with the auction, and potentially incentive 
payments? How much might go to the Treasury, and am I right 
that under current law, all of those net proceeds must go to 
the Treasury? None can be used to address some of our 
underserved communities?
    Chairman Pai. Thank you for the question, Senator. Your 
last question, the answer to that is yes. We are required to 
deposit auction proceeds into the Treasury.
    As to the amount of those proceeds, the predecessor 
question, that's difficult to say. There has been speculation 
that this mid-band spectrum is so highly prized that it could 
yield tens of billions of dollars in revenue.
    Obviously deducting from that the requisite costs, 
administrative costs and otherwise, that could leave tens of 
billions of dollars for the Treasury for the important purposes 
that Congress may see fit to spend it on and that's--as we had 
in our last hearing and our exchange, I think there are many 
worthy causes that could deserve Congress's attention in a 
bill.
    Senator Coons. Would you or do you think the Commission 
overall would support legislation that directed some of those 
auction proceeds to addressing our unmet needs in terms of 
broadband?
    Chairman Pai. I can't speak for my colleagues, but I will 
say that I've been on the record for over 4 years now saying 
that I do support Congress giving the FCC the authority or 
directing the spending itself to worthy causes, such as rural 
broadband access, telehealth, homework, and closing some of 
those Digital Divide problems that we've encountered.
    Senator Coons. And just to be clear, have the foreign 
satellite companies at issue here in the C-band agreed to waive 
their rights to take further legal action, asserting their 
legal rights to the spectrum?
    Chairman Pai. Well, they've made the election to accept the 
relocation payments. The litigation was not one of the 
conditions, but to my understanding, almost all of the 
companies have not filed anything in the Court of Appeals.
    Senator Coons. Because that--to me, that was--maybe I 
missed something here. That was the critical issue, was we're 
going to pay you billions of dollars, you're not going to sue 
us, and you're going to move----
    Chairman Pai. Right.
    Senator Coons [continuing]. Because the only limitation on 
your legal authority to force them to move is their legal 
capacity to challenge it in court.
    Chairman Pai. Right. Certainly the small satellite 
operators, which did not get any accelerated relocation 
payments from the FCC, they've filed a petition for review, but 
they were going to file no matter what and so our goal, as I 
said in the beginning, was to align those eligible satellite 
operator incentives with our own and we believe we've done that 
and dramatically reduced the litigation risk from those 
companies.
    Senator Coons. If the small satellite operators succeed in 
their court actions seeking review and it overturns the FCC 
action, what happens to the accelerated relocation payments?
    Chairman Pai. Well, the accelerated relocation payments are 
not dependent on the small satellite--oh, you're saying if the 
entire thing is----
    Senator Coons. Right. If they succeed in reversing your 
entire Order, now what happens?
    Chairman Pai. Right. I would have to check. I can't 
remember if--I'd have to study the legal aspects of an 
injunction a little closer. I haven't gone down that road in 
part because I believe the challenge that we've received from 
those companies in court is substantially weak. These are not 
companies that use C-band spectrum to deliver service in the 
United States and so just as a threshold matter, putting on my 
lawyer hat, I don't believe there is irreparable harm here that 
could be proved to the satisfaction of a court.
    Senator Coons. That's the best argument I think you've got 
is we're going to make these payments in order to make the 
lawsuits go away and that's why we're able to move.
    Chairman Pai. Yes.
    Senator Coons. I'm unclear about how these small satellite 
challenges might work.
    Chairman Pai. Yes.
    Senator Coons. Let me just move for a minute, if I might, 
Mr. Chairman, to broadband mapping.
    Congress has prohibited you from using USF dollars to 
implement the Broadband Data Act. You've requested, as you said 
in your testimony, $65 million to implement the Act. Absent 
that funding, what's the FCC done to begin to implement the Act 
with its general appropriations in terms of planning or 
drafting regulations?
    I know the Data Act was enacted after the President's last 
budget was submitted, but I'm curious, too, as to why the 
President's budget didn't include a request for the $65 million 
and tell us how you know that that's the right amount and it 
doesn't need to be either more or less.
    Chairman Pai. Sure. So obviously the FCC started its work 
in August of 2019 with the Digital Opportunity Data Collection. 
That work generally took a pause when the Broadband Data act 
was adopted for the reasons I expressed in my opening 
statement.
    With respect to the $65 million, the Office of Managing 
Director and others on the FCC's team, I understand, sat down 
with the Appropriations staff, among others, and did a 
crosswalk on how we arrived at that number for the first year, 
but the startup costs and the implementation for the first year 
would be $65 million.
    There would be additional costs beyond that timeframe, but 
to do the various IT and other back-end work that's necessary, 
we would need that funding. We don't have it currently and 
obviously Congress has given us a very strict budget for the 
particular fiscal year. So we're essentially left with a 
mandate without any money to comply with that mandate.
    Senator Coons. Understood. Mr. Chairman, I've got a number 
of additional questions. Look forward to a second round.
    Senator Kennedy. You bet.
    Senator Moran.
    Senator Moran. Mr. Chairman, thank you.
    Let me follow up with Senator Coons' commentary and 
question about Broadband Data Act and the need for 
appropriations.
    Mr. Chairman, I'll continue to press for those resources to 
be provided to the FCC, but I want to know that you have a 
commitment, you are making a commitment that we are going to 
move to a different set of data to make decisions on broadband 
deployment, recognizing if you have the resources, there's a 
better route to get better information to make better 
decisions, is that true?
    Chairman Pai. Absolutely, Senator. That's why I proposed 
this initiative in 2017. That's why we executed it in August of 
2019 because we need much more granular accurate information 
about this.
    Senator Moran. And I'm not sure if I didn't hear you answer 
Senator Coons' question, but what are you doing today as you 
wait for the additional dollars to get us in a position that 
when the dollars arrive, that we are further along than we 
would otherwise be?
    Chairman Pai. Thank you for the question, Senator. I 
appreciate your giving me a chance to amplify on the answer to 
Senator Coons.
    There is rulemaking-related work that we can do and are 
doing. The problem is that a lot of that is dependent at the 
end of the day on some of the IT and back-end systems to create 
some IT infrastructure to support that mapping and that is the 
kind of work where we really need that money to get the program 
up and starting so that whenever the rulemaking work is done, 
the technical, for lack of a better word, side will be able to 
get stood up quickly, too.
    Senator Moran. In response to the economic consequences of 
COVID-19, approximately 800 broadband providers responded by 
participating in the FCC's Keep Americans Connected Pledge in 
which they committed not to terminate service for households 
and small businesses.
    As Congress focuses its attention on improving broadband 
connectivity, particularly with the high demand during this 
pandemic, how should Congress prioritize funding support for 
broadband providers that are already shouldering significant 
financial hardship due to signing the Pledge and complying with 
the Pledge?
    In other words, revenue is not coming in. I don't know 
whether you could tell me what the total costs to date have 
been in waived late fees and uncollected payments by 
participating providers, but is there a plan to reimburse them 
for that lost revenue? How do we compensate and how do we make 
sure they stay in business?
    Chairman Pai. Very important questions, Senator, and I've 
had conversations with a number of companies individually and 
through their trade associations where I've heard, especially 
for the smaller providers or the providers who serve rural or 
lower-income populations, that the Pledge can be a hardship and 
I would be happy to work with Congress on if there's a vehicle 
that could provide them funding to continue those connectivity 
commitments which are, of course, incredibly important for 
their consumers at the end of the day.
    As to the amount that's necessary or the appropriate 
vehicle, I would defer to Congress, but we'd be happy to have 
our experts on our team work with you to make sure that 
connectivity is as seamless as it possibly can be during this 
pandemic.
    Senator Moran. So does the FCC not know how much lost 
income revenue payments have--what's been lost to providers as 
a result of those who are not paying their bills?
    Chairman Pai. We do not track the amount of accounts 
receivable, if you will, for any individual companies. We could 
see if there's any information publicly available, but we don't 
track that ourselves.
    Senator Moran. And I suppose the expectation, perhaps hope 
is a better word than expectation, is that people would then 
voluntarily pay those bills, those late fees when they were 
capable? Is that the original plan is that this is a pause but 
ultimately those companies, the carriers, the providers would 
be reimbursed or would be compensated for services provided?
    Chairman Pai. For that question, we would defer to the 
particular companies. Our goal, in the immediate emergency of 
March 12 and we adopted the Pledge and then again in May when 
we extended it, was just to make sure that for the time being 
we put all of that on pause and it's going to be a conversation 
that has to happen in Congress, of course, and within the 
industry as to how to proceed after that.
    Senator Moran. Mr. Chairman, I understand the importance of 
the C-band spectrum being made available expeditiously and 
responsibly.
    What is it that--and I understand that the conversation 
taking place here reflects the desire of you and the Chairman 
of this committee to see that both of those things happen.
    What is the outcome of expedition? What do Americans get in 
the competitiveness and the development of 5G? So tell us why 
this is worth it? Why does a couple years matter? What do we 
get for that?
    Chairman Pai. A great question, Senator. I think we get 
three things. Number 1, we deliver 5G services to American 
consumers years before they otherwise could be delivered. 
That's especially critical as we've seen during the pandemic 
for services, such as telehealth or other remote learning-type 
activities. That's going to be incredibly important in the time 
to come and American consumers would benefit from that sooner.
    Number 2, and this is very important, I would argue just as 
important, American leadership in 5G. Over the weekend, a story 
came out in the Wall Street Journal about how the Chinese 
Communist Party is leveraging all levels of government to spend 
$1.4 trillion with a T on emerging technologies, focused in 
particular on 5G. They want to seize the mantle of 5G 
leadership for themselves because they believe, rightfully in 
my view, that America derives significant benefits from being 
the first mover in 5G.
    If we delay the C-band for 2 years or 4 years or however 
many years, that ultimately delays the delivery of mid-band 
spectrum that allows entrepreneurs and innovators to use that 
and that leads to the Number 3 benefit, which is that an 
innovation economy continues to thrive on our shores.
    Capital is fickle. Talent is fickle. The longer the FCC 
delays the introduction of this spectrum for innovators to use, 
the more likely it is that other countries, other regions will 
seize that talent and capital for themselves. I don't want that 
to happen and I think it's not just a wireless priority. I 
think it's a national security priority for us to make the 
innovation economy thrive, continue to thrive in America.
    Senator Moran. Thank you, Mr. Chairman. Thank you, Mr. 
Chairman.
    Senator Kennedy. Yes, sir.
    Senator Lankford.
    Senator Lankford. Mr. Chairman, thank you.
    Thanks for being here again and will continue again to be 
able to pummel me with questions back and forth. I want to back 
up just to some of the lessons learned from COVID-19.
    There's been a lot of waivers and work on the issue of 
telehealth and making sure that's available and accelerating 
that process. What I want to know is what are the lessons 
learned and what is needed long term to be able to make sure we 
maintain telehealth?
    Chairman Pai. A great question, Senator. We're still 
starting to hear back from some of the grantees to which we've 
been distributing the funding. So I hope in time to be able to 
give you some more clarity as to how they've used that funding 
and what benefits that has provided.
    We expect it's going to be tremendous. Already the 
Cincinnati Children's Hospital, for instance, has shown how 
they have given young transplant patients connected devices to 
allow them to be monitored remotely so they don't have to come 
back into the health care facility when their immune systems 
are very vulnerable.
    We've also heard from mental health providers, including 
one in Southeast Kansas, and I believe in Oklahoma, as well, 
that they're going to use this funding to provide care for 
folks who can't come into the facility.
    Going forward, I think one of the things that would be very 
helpful is, of course, to give more attention to this issue, 
breaking down interstate licensing requirements that some 
States still have, making sure the provider in Kansas can 
provide care to a patient in Oklahoma, for instance, making 
sure that reimbursement is much more streamlined so that 
telehealth becomes much more accepted.
    It can be both cost-effective and health care-effective in 
my view to have telehealth solutions and there are other issues 
like that.
    The general problem I would see going forward is making 
sure that we have broadband everywhere and that is in many 
cases the bottleneck, as you know in your State and in mine.
    So supporting the FCC's efforts, either through funding or 
additional authority, to get rural broadband everywhere would 
be absolutely critical. Telehealth only works if you've got a 
broadband connection underlying it and that ubiquitous 
broadband is not something we currently have.
    Senator Lankford. Right. So let me drill down on that some 
and you and I have talked about this before, in fact last time 
you were here we talked about the Mobility Fund, Phase II,----
    Chairman Pai. Yes.
    Senator Lankford [continuing]. And the maps that were put 
out. The maps were wrong. They were proven to be wrong at the 
end of it and my question to you is those that put out false 
maps and false information, what consequences have come to them 
for putting out false information to your office and to us 
because a lot of rural carriers spent a lot of money trying to 
be able to prove those maps were wrong. Those rural carriers 
will never be compensated for it and what I want to know, are 
there consequences for those other carriers that put out false 
maps?
    Chairman Pai. So the FCC staff has looked into that issue 
and going forward, what I can say is part of the reason why we 
started the 5G Fund was to focus on the wireless technology of 
the future, not to double down on 4G, given the behavior that 
we saw in the context of the Mobility Fund, Phase II.
    So going forward again, we have had open public dialogue 
right now that's ongoing about how best to make sure that rural 
parts of this country that are unlikely to get service from any 
major provider for 5G are not going to be left behind as we 
start to pursue C-band and all these other initiatives.
    It's really important to me that those small towns not be 
left out and stuck on 4G or no G as people in big cities start 
to take that for granted.
    Senator Lankford. Right. So are carriers that gave false 
maps to you going to have consequences for giving false maps to 
you?
    Chairman Pai. There absolutely are consequences for 
violating our rules. I can't speculate on what those might be. 
It would depend on the particular fact pattern.
    Senator Lankford. Okay. We just hadn't seen it yet. Again, 
I have nothing against those carriers, other than they gave us 
false information, and there's a consequence for giving out 
false information. There were real-life consequences all around 
the country. People are spending money to try to prove those 
maps wrong and it significantly delayed the roll-out based on 
what's happening. So there were real-life consequences on their 
actions. I want to make sure that that does not happen again in 
the future, that entities know give accurate information when 
you're asked to be able to give information.
    Chairman Pai. I share your frustration, Senator. I came out 
of the gate as Chairman in February of 2017 with the Mobility 
Fund II specifically because I recognized that we needed to 
color in 4G for unserved parts of the country and it's 
frustrating that 3 years later, we're now essentially starting 
with a new program, the 5G Fund, in part, because we did get 
that inaccurate information. That's not acceptable to the 
American taxpayers, not acceptable to me.
    Senator Lankford. No, no, it is not, and for the rural 
areas of my State that are still waiting to be able to get 
access to broadband, it's a real-life consequence for them 
that's obviously proven out during this COVID-19 time period--
--
    Chairman Pai. Right.
    Senator Lankford [continuing]. When they don't have access 
and they would have had either something coming or would have 
had something there in the days ahead.
    Let me make one more quick comment to you. Managed access 
for prisons, something you and I have talked about often.
    Chairman Pai. Yes.
    Senator Lankford. I am trying to figure out how do we block 
contraband cell phones from prisons. What is the process right 
now on the managed access evolved? There always seems to be 
something on the horizon to be discussed----
    Chairman Pai. Yes.
    Senator Lankford [continuing]. And as you and I have talked 
about this for several years, there's always something coming 
but doesn't actually seem to come. Where are we?
    Chairman Pai. So in that regard, I want to thank you first 
for flagging the report that the Commission was due to submit. 
We did submit that report and I hope you had a chance to see 
it.
    Senator Lankford. Yes, we did actually. Thank you.
    Chairman Pai. Absolutely. With respect to mass evolved, I 
think it's a promising opportunity. As I understand the 
technology, it could provide a solution consistent with current 
law that could be very useful.
    Unfortunately, as I understand it, the industry has not 
been as willing to implement that solution or consider 
implementing it and so that's why as recently as yesterday, the 
FCC staff was having conversations with them about the path 
forward.
    I'm frustrated by the situation. To be frank, I don't 
understand what obstacles remain to getting mass involved or 
other promising technologies implemented but we're going to get 
to the bottom of that.
    Senator Lankford. Yes. It's my frustration, as well. It 
always seems to be something under discussion and never 
actually something resolved and----
    Chairman Pai. Right.
    Senator Lankford [continuing]. We continue to have rapists 
that are contacting their victims through a cell phone they 
have in prison and tormenting victims and the cell phone 
companies just seem to turn their head and say it's no big deal 
and at some point, they need to wake up and know this is a 
really big issue and they are responsible for continuing to 
allow that type of behavior to come out of a prison to victims 
until they actually step up and engage and try to help solve 
this rather than maintain it.
    Chairman Pai. I couldn't agree more and I would invite any 
of the folks who are skeptical about what you just said to 
visit Taft Correctional Institution at Ada, go to Jackson 
Penitentiary in Georgia, and go to Ft. Leavenworth in Kansas. 
I've been to these facilities and more and I've heard firsthand 
from a bunch of folks, from administrators to correctional 
officers, about what a serious threat it is and it's a public 
safety issue and it's not just an arcane issue that affects the 
geographic scope of the facility.
    As you mentioned, it affects witnesses and prosecutors and 
general public. I mean, these devices in the hands of somebody 
who means ill could be a significant problem for public safety 
and I think the industry needs to have a higher sense of 
priority for it.
    Senator Lankford. Yes. I do, as well. Thank you.
    Senator Kennedy. Senator Boozman.
    Senator Boozman. Thank you, Mr. Chairman, and thank you so 
much for being here. We do appreciate you and the rest of the 
Commission, your hard work, and you're right at the forefront 
right now.
    It's really interesting, as I listen to the questions, 
we've all got the same questions, you know, which is good. One 
of the things certainly that's come up regards to tele-
medicine, you've already talked about that, but I just want to 
also mention how important.
    I was on a phone call with Administrator Verma the other 
day and again these are not--don't quote me exactly, but she 
made a statement that we've gone from 10,000 a week 
telemedicines to over a million. So, you know, it is 
tremendous, you know, increased volume in things. As a 
provider, I understand how helpful that can be. We've been able 
to beat down many of the obstacles now.
    Are you working with CMS and things like that? Is there a 
group that's trying to coordinate this with not only CMS but 
then we've got the education component. Are we siloed or do we 
have a formal working group that's talking about how to get 
information out there?
    Chairman Pai. Great question, Senator. Even before the 
pandemic, we had been working with CMS, among others. In fact, 
I sat down with Administrator Verma I want to say 2 years ago, 
a year and a half ago, on some of these very issues and that 
collaboration has only ramped up during the pandemic, and we've 
also established collaborations with the Department of 
Education, with other Federal agencies to make sure we're all 
swimming in the same direction and that's essential to make 
these solutions pop.
    Senator Boozman. Because the world is very different now 
than it was, you know, 2 years ago or whenever.
    Chairman Pai. Yes.
    Senator Boozman. So I would really encourage, you know, 
some sort of a formal whatever, that that simply has to be.
    Chairman Pai. Yes.
    Senator Boozman. Are we able to give our schools--are you 
all collaborating in the sense of giving them good information 
as to if they're lacking now what are some of the potential 
alternatives that they could reach to?
    Chairman Pai. We are within the constraint of current law. 
We've been working to change some of our rules to enable school 
districts to get better access to technology. For example, 
waiving the gift rule, which prohibits providers from offering 
and school districts from accepting or soliciting wifi-
connected devices and hot spots and the like.
    But at the end of the day, the law restricts us to 
providing services to classrooms and one of the things we 
encouraged as part of the CARES Act negotiation was the 
creation of a remote learning initiative, somewhat similar to 
what Congress gave us the authority to do in the COVID-19 
Telehealth Program, but a streamlined education initiative to 
do essentially the same thing.
    Outside of the constraints of current law, we've also 
worked with the Department of Education. The CARES Act provided 
a total of $16 billion that local school districts will 
ultimately be able to use for, among other things, education 
technology and we've got a relationship with DOE now to help 
educate State and local governments about the availability of 
these funds and the importance of using them for remote 
learning.
    Senator Boozman. Regarding the Rural Digital Opportunity 
Fund (RDOF) funds, what are some of the potential issues that 
could delay distribution?
    Chairman Pai. I think we're on track right now. We just 
adopted auction procedures, final auction procedures which will 
help us move towards that October 29 reverse auction date.
    There are some who want to delay this auction for awhile 
and I understand the concern they've raised about mapping, but 
if there's an area we know is unserved, we shouldn't wait until 
we solve maps in different parts of the country.
    Those folks deserve digital opportunity and they deserve it 
now, especially in places like Arkansas and Kansas, and we're 
committed to meeting that October 29 deadline.
    Senator Boozman. Tell me. We've talked about this before. 
The six gigahertz,----
    Chairman Pai. Yes.
    Senator Boozman [continuing]. The concern about 
interference with devices.
    Chairman Pai. Absolutely.
    Senator Boozman. I think you, you know, were talking about 
talking to DOE and some things like that. Are we doing that? 
Are we alleviating some of the concern that we have that there 
could be harmful interference?
    Chairman Pai. We believe we have. The Commission 
unanimously adopted a six gigahertz order which makes available 
that spectrum for unlicensed operations and we did that in a 
way that protects incumbents from harmful interference.
    For example, indoors, unlicensed devices, such as Wi-Fi 
routers and the like, have to operate at a lower power level, 
five db as opposed to eight db, which the industry wanted. 
Outdoors, they can operate at standard power but they have to 
use an automated frequency coordination mechanism or AFC. So 
essentially to boil it down, if there's an incumbent operation 
in a particular area, this database will sense that and will 
tell the unlicensed device you can't use this spectrum, there's 
an incumbent here, so, you know, look somewhere else to find 
that spectrum.
    That's one of the critical ways that our engineers came up 
with for threading that needle, promoting better wifi but 
protecting incumbents.
    Senator Boozman. And so are we doing some testing to make 
sure that it's not just on paper but that's actually going to 
work that way?
    Chairman Pai. Absolutely. My understanding is that our 
staff and other stakeholders in the industry, electric 
utilities and others, have been consistently working comparing 
notes and doing some of that testing to make sure, but we're 
always open to getting new information from the field.
    Senator Boozman. Good. Well, thank you very much. I really 
do appreciate your good work.
    Chairman Pai. Thank you, Senator.
    Senator Kennedy. Senator Van Hollen.
    Senator Van Hollen. Thank you. Thank you, Mr. Chairman.
    Chairman Pai, welcome, and I want to, first of all, thank 
you and the Commission for the work you've done to allocate 
telehealth funds to hospitals around the country, including in 
my State of Maryland, as well as other health care facilities. 
You broadly interpreted your authority to make that happen, 
correct?
    Chairman Pai. I think we fairly interpreted it but some 
might say broadly.
    Senator Van Hollen. All right. Well, I think it was broadly 
and what I've been discouraged about is that you've not 
provided that same sort of liberal interpretation when it comes 
to providing Internet services for students at home through the 
E-rate Program.
    I think we've all seen that COVID-19 has exposed many 
disparities in our country, including the deep Digital Divide, 
as more and more people have to work from home and conduct 
their business and other affairs from home. Access to the 
Internet and high-speed Internet is absolutely essential.
    This was already the case before COVID-19. It's especially 
true now and one of the most harmful impacts here has been with 
respect to students. You would agree with that, right?
    Chairman Pai. Yes, sir.
    Senator Van Hollen. Right. Because we used to call it the 
homework gap and I've introduced legislation to use the 
proceeds from the sale of spectrum for that purpose to help 
close the homework gap and I think you've been supportive of 
that idea, but, of course, now it goes beyond homework.
    You know, students are having to do more and more learning 
throughout the day online and we are working to try to put 
additional funds in the next round of coronavirus response 
dedicated to that purpose.
    As you stated, there are funds that can be used for that 
purpose that we provided already in the CARES Act. They go to 
school systems but school systems have a huge amount of demands 
on their resources right now.
    So the idea is to get dedicated funds in the next round 
that we could direct through the E-rate Program for students. 
Would you support that?
    Chairman Pai. It depends on how it's structured, Senator. 
Just so you know, I share your frustration which is why several 
months ago, when the CARES Act was being negotiated, we 
proposed a remote learning initiative outside of the context of 
E-rate with its artificial calendar, other administrative 
restrictions and whatnot. We proposed essentially a streamlined 
program for remote learning. We called it the remote learning 
initiative, and if we had that now, similar to what we've done 
with the Telehealth Program, we could get the money out the 
door in a way that meets the students' needs a lot quicker, we 
think, and so happy to work with you on how the vehicle would 
be structured.
    Senator Van Hollen. Right. No, look, I want to--we want to 
structure this going forward in the best way possible. In the 
meantime, we've got the laws and regulations that are on the 
books,----
    Chairman Pai. Yes.
    Senator Van Hollen [continuing]. Right, and I know you 
relaxed your gift rule to allow schools to accept wifi hot 
spots and devices directly from companies, right?
    Chairman Pai. That's correct.
    Senator Van Hollen. But as I look at the authority you used 
for that, it seems to me you can use that same authority to 
allow e-Rate fund to be used to allow school systems to 
purchase directly hot spots, devices, and computers for 
students who are disconnected, and I'm baffled by why you 
haven't used that flexibility to do so.
    I'm just looking at the language here from the USAC 
website, the Universal Service Administration Company. It says 
that ``Activities that customarily occur on library or school 
property are presumed to be integral, immediate, and proximate 
to the education of students.''
    It seems to me at this particular time when students are 
doing their work from home that you could clearly allow E-rate 
funds to be used for this purpose. So can you take another look 
at that?
    Chairman Pai. I'd be happy to, Senator. The problem--I wish 
we could. We always have the discretion to waive our rules for 
good cause shown, but we can't waive a statute and Section 254 
of the statute says specifically that services to classrooms is 
what the FCC can support through the E-rate Program.
    I agree with you. A quarter century ago when this language 
was drafted, no one conceived that people would be learning out 
of a bricks and mortar facility, but if there's a way to amend 
that statute or, as I said, to give us authority through a 
learning initiative to meet the needs of students, we're always 
happy to do that.
    Senator Van Hollen. Well, I mean, we're working to amend 
it, but just to provide clarity to what I think you could 
already do if you interpreted your authorities within the 
context of the current emergency.
    So I hope we can have a discussion about your existing 
authority to use this because right now, as we speak, before we 
do another round of legislation, which I hope will address this 
issue, but right now, I believe you're not using your 
authorities fully for this purpose. So we'll follow up with you 
on this.
    Thank you, Mr. Chairman.
    Chairman Pai. Thank you, Senator.
    Senator Kennedy. Thank you again, Mr. Chairman, for being 
here. I know you're busy.
    I want to follow up on Senator Lankford's questions. I want 
to be sure I understand. We have inmates who are in prison for 
rape and they have cell phones and in some instances, they are 
calling their rape victims and harassing them and we know about 
it and the carriers involved are not shutting down these cell 
phones, is that accurate?
    Chairman Pai. I would say they have not been as forward-
leaning on some of the technological solutions as they could 
be.
    Senator Kennedy. How many carriers are not being forward-
leaning?
    Chairman Pai. There is no specific number. The ones you 
would know, the names you would know.
    Senator Kennedy. Which ones?
    Chairman Pai. I think all of the major carriers we've been 
working with, AT&T, Verizon, T-Mobile, U.S. Cellular. We worked 
with CTIA, the wireless association.
    Senator Kennedy. Why would you, and by you, I mean the FCC. 
Why would you not get them in, hold a hearing, and say if you 
don't stop this, we're going to hit you so hard that Google 
can't find you?
    Chairman Pai. We've done that, Senator. We actually held--I 
was the first Chairman in history to convene a meeting of the 
industry, correctional officials, and other stakeholders----
    Senator Kennedy. But they're still tolerating it.
    Chairman Pai. So from our perspective, I said, as I 
mentioned to Senator Lankford, I'm very frustrated with where 
we are here and what I will say is if the carriers don't take 
action, then I expect we would move forward with a Notice of 
Proposed Rulemaking.
    Senator Kennedy. I think we're going to hold a hearing on 
that subject.
    Chairman Pai. I would certainly have the witnesses to send 
you because there are folks out there----
    Senator Kennedy. And get the carriers in and we can visit 
with them.
    Let me jump gears here. I've reviewed the transcript of 
your testimony at our two prior hearings. You testified, did 
you not, that one of the reasons, indeed the main reason that 
we're giving the $10 billion, not the $5 billion, to relocate 
but the $10 billion to the foreign satellite companies was to 
avoid litigation, that's correct, isn't it?
    Chairman Pai. So I don't have any reason to believe that 
your rendition is not accurate.
    Senator Kennedy. You said that?
    Chairman Pai. Yes.
    Senator Kennedy. You said it?
    Chairman Pai. Sure.
    Senator Kennedy. Did I also understand that you just 
testified that you have reached an agreement with these foreign 
satellite companies in which taxpayers will give them $10 
billion but you didn't ask them to waive any claims or causes 
of action they have?
    Chairman Pai. So although the incumbents electing these 
payments have not typically waived a right to litigation, they 
have forfeited it by agreeing to the election. That is what I 
understand is in the Commission's Order.
    Senator Kennedy. Have they waived it or not?
    Chairman Pai. They certainly have forfeited it by getting 
the payments.
    Senator Kennedy. Can they come back later and sue?
    Chairman Pai. I don't know the law on that point, having--
--
    Senator Kennedy. Well, we're going to have another hearing 
and get your General Counsel in here.
    I mean, what would prohibit them from taking the $10 
billion, cashing the check or checks, and then suing?
    Chairman Pai. Well, Number 1, it's in the terms of the 
Order. Number 2, they only get the payments if they do the 
requisite work for Phase 1 and Phase 2.
    Senator Kennedy. I understand, but what would prevent them 
from taking the $10 billion and moving and then filing suit and 
say we had to go along because the FCC made us but they were 
wrong and we want damages?
    Chairman Pai. I'm not sure. I can't answer the legal 
hypothetical here.
    Senator Kennedy. I want to get someone who can. You've been 
sued anyway, haven't you?
    Chairman Pai. By the small satellite operators, yes.
    Senator Kennedy. What if they win?
    Chairman Pai. I don't believe they will. As I said, they 
have no use of the----
    Senator Kennedy. If you didn't believe they would win, then 
why did you give the other satellite companies $10 billion to 
avoid litigation?
    Chairman Pai. Well, that's an entirely separate class. 
Those are the folks who are necessary for the transition to be 
successful. They use the C-band spectrum. Their work is 
essential to clearing out that spectrum to make it available 
for 5G.
    Senator Kennedy. But the claims are still the same and that 
is by the satellite companies, big or small, their claim is 
that they have a property right and the FCC can't divest them, 
isn't that true?
    Chairman Pai. But in this case, it is very different 
because you could--I don't believe the small satellite 
operators, as I mentioned, have any cognizable claim of 
irreparable harm. If you're not using something----
    Senator Kennedy. What happens if they win?
    Chairman Pai. That's again in response to Senator Coons, 
I'd have to study what the effect of an injunction would be. It 
would obviously depend on the scope of the injunction, 
etcetera, but I don't believe that's an eventuality that we are 
going to face.
    Senator Kennedy. This makes no sense to me, Mr. Chairman. I 
want to get your General Counsel in here and your lawyers in 
here. I never heard of giving somebody $10 billion to keep them 
from suing without them waiving their claims and causes of 
action.
    Last question. In addition to the $10 billion, we're giving 
the foreign satellite companies $5 billion for relocation 
expenses. They're going to use some of that money to buy 
satellites, is that correct?
    Chairman Pai. Correct, yes.
    Senator Kennedy. They promised to buy American satellites, 
did they not?
    Chairman Pai. Well, several of them, including just today, 
have announced that they will buy American-made.
    Senator Kennedy. But some of them are not buying American 
satellites, is that correct?
    Chairman Pai. I'm not aware of any announcements on that 
front, so I can't speak to whether or not----
    Senator Kennedy. Well, I can show you the news articles.
    Did you put in your Order before you gave them $5 billion 
to move that they had to buy American?
    Chairman Pai. Senator, we don't have the legal authority to 
do that.
    Senator Kennedy. Why not?
    Chairman Pai. Current law doesn't--under the Communications 
Act doesn't give us the ability to do that. So we haven't 
promulgated rules----
    Senator Kennedy. Does it prohibit you?
    Chairman Pai. We would have to have some sort of national 
security justification, some sort of evidence that doing so 
would present a national security----
    Senator Kennedy. I want to get your General Counsel in here 
and let's talk about that, too.
    Senator Coons.
    Senator Coons. Thank you, Mr. Chairman.
    Speaking of national security, on the repair and replace 
issue investments to make sure that smaller telecommunications 
providers are able to remove and replace Huawei and ZTE 
equipment in order to ensure the reliability of our system, the 
FCC estimated it cost $2 billion to conduct a so-called rip and 
replace function for U.S. carrier networks and about a month 
ago, you received responses to a data request from all ATCs and 
their affiliates.
    Has that information confirmed your original estimate or 
are you revising that estimate?
    Chairman Pai. I appreciate the question, Senator. We do at 
this time anticipate that that phrase I used, up to $2 billion, 
would still be required to remove and replace, but if, for 
whatever reason, the evidence suggests otherwise, we'll 
certainly let you know in either direction up or down.
    Senator Coons. And the Secure and Trusted Communications 
Act, which authorized this work but didn't fund it, would 
reimburse telecom providers with fewer than 2 million customers 
to replace equipment that could pose a national security risk.
    Do you believe reimbursement should be limited to the 
smaller carriers only?
    Chairman Pai. I would defer to Congress on that point. I 
could see the argument either way, that some providers which 
might have marginally more scale than that would nonetheless 
face some financial challenges, but I can also see the other 
side of it, that you need to be as fiscally responsible as 
possible and that means you have to balance the availability of 
these funds versus the need for the particular carriers.
    So I think two million is a pretty reasonable dividing 
line, but I could see the argument either way.
    Senator Coons. Let me move to the robocall fine collection 
issue.
    The FCC unanimously proposed a $225 million fine against 
perpetrators of another robocalling scheme that was falsely 
offering health insurance plans. DOJ hasn't actively pursued 
the collection of these fines. In fact, the Wall Street Journal 
reported last year DOJ only collected $6,790 out of $200 
million in levied fines.
    Why has there been such modest follow-through on fine 
collection and what solutions might we pursue to help the DOJ 
and FCC fix this problem?
    Chairman Pai. Senator, I can't speak for the Department of 
Justice, of course. I only have jurisdiction over our neck of 
the woods. But what I can say is that we have emphasized to the 
Department of Justice, Number 1, that this is the FCC's top 
consumer protection priority; Number 2, that these are fines 
that we believe represent an exceptionally strong case for 
enforcement, and that we believe that instituting the 
appropriate collection action in a court of competent 
jurisdiction is vital to making sure that consumers are 
protected.
    A deterrent only works if you actually apply the stick, so 
to speak, to make that deterrent real and in this case, the 
collection of that fine, the extraction of money from the 
wrong-doers is that stick.
    Senator Coons. And some have suggested it's, frankly, 
because the perpetrators don't have meaningful assets against 
which to collect a judgment.
    Is there any evidence that those large fines are actually 
deterring schemes or do we need to rethink how we penalize 
these offensives?
    Chairman Pai. That's a good question.
    Senator Coons. The stick, as it were.
    Chairman Pai. Right. We have seen over the last couple of 
months a downturn in the overall number of robocalls. Whether 
that's attributable in part to the deterrent that we've talked 
about is unclear, but what I can say is that it does serve a 
useful function for us to be able to investigate and in 
appropriate cases obstruct and fine some of these wrong-doers.
    We have seen those particular wrong-doers either mitigate 
or cease their activities and I would also be remiss if I 
didn't point out that it's not just the wrong-doers. For 
example, over the last couple of months, we've worked with the 
Federal Trade Commission and the Department of Justice on so-
called gateway providers.
    These are small telecom companies based in the U.S. They're 
the first point of entry to scam robocalls coming from abroad. 
Over the last couple of months, we have sent a couple of 
letters to a number of different gateway providers saying 
either you stop these scam robocalls coming from abroad on to 
your networks and then being unleashed on American consumers or 
you risk being cut off from access to the U.S. phone networks.
    Within 24 hours, all of those gateway providers cut off the 
scam robocalls. That's a non-monetary judgment, doesn't require 
institution of litigation, but it gets real results for the 
American people.
    We're going to look to broaden that in the time to come.
    Senator Coons. Well, thank you. Last question, if I might, 
Mr. Chairman.
    During the pandemic, there's about 17 million school-aged 
children who don't have access to the Internet at home, as 
we've discussed. Even now students are returning to the 
classroom. It's unclear, uncertain how many of them will be 
able to go back to school full time, how many may need to be 
able to continue to access schooling from home.
    Senator Markey led a bill, the Emergency Educational 
Connections Act. I'm a co-sponsor. The House included $1.5 
billion in the HEROES Act that passed a few weeks ago to 
provide funds to connect students in low-income families to the 
Internet.
    The House authorized $5 billion overall. The Markey bill 
calls for $4 billion. Do you have a sense of what it would 
actually cost to connect every American school child to the 
Internet effectively?
    Chairman Pai. Boy, that's a great question, Senator. It's 
difficult to say because the needs might differ from district 
to district. It might be a wifi hot spot, it might be a tablet, 
it might be both of those things, it might be many other 
things, and so it really depends on each local school 
district's assessment of need and that's particularlized enough 
that I can't give you a macro number at this time, but other 
than to reiterate my commitment to working with you to make 
sure that we close that gap as best we can.
    Senator Coons. Well, I want to work with you to figure out 
this Section 254 issue and whether or not you've got regulatory 
flexibility. You need statutory change, but I think we ought to 
get on this because this is--for too long, there has been a 
Digital Divide. We're in a context now where the country is 
particularly focused on the ways in which that further divides 
opportunity, access to opportunity in this country, and I think 
we should be providing the resources to close that gap.
    Thank you.
    Chairman Pai. I agree.
    Senator Coons. Thank you, Mr. Chairman.
    Chairman Pai. Thank you, Senator.
    Senator Kennedy. Senator Daines and then Senator Moran.
    Senator Daines. Thank you, Mr. Chairman, and thank you, 
Chairman Pai, for being here today.
    I truly want to thank you for all the work you've been 
doing to expand broadband access, to get spectrum out to 
market, and to balance the needs and priorities of the 
different industries and consumer groups that you oversee. This 
is sometimes difficult, but I think you've been doing a great 
job. Thanks.
    Chairman Pai. Thank you, Senator.
    Senator Daines. The COVID-19 pandemic has demonstrated the 
huge need for telehealth and the gaps, as well, both physically 
in our ability to connect and in our laws and in our 
regulations to support and to enable tele-health programs.
    I think there's some places we can improve. No doubt we've 
made some progress. Here's some thoughts. I think we should 
make permanent the telehealth laws that we recently passed, 
including the Connect for Health Act, and others that help 
expand access to telehealth.
    I think we also need to make adoption easier and expand the 
broadband needed to make telehealth a reality for all 
Montanans, particularly Rural Montanans.
    In fact, one study showed that Medicare patients using 
telehealth has increased 11,718 percent in just the last month 
and a half. Many Montanans in most rural places can now access 
a doctor safely and effectively by just using the phone in 
their pocket, but we need to make sure that we have the 
funding, the right regulations, and better tools in place for 
that to work and to make it sustainable.
    Chairman Pai, I know you've been busy recently. So could 
you update me on the actions the FCC has taken to expand 
telehealth in places like Montana?
    Chairman Pai. I appreciate the question, Senator, and for 
your leadership and belief in the power of telehealth.
    The CARES Act passed on a Thursday. The President signed it 
on Friday. The following Monday, I proposed to my fellow 
Commissioners a concrete plan for taking that authority and 
that funding and establishing a telehealth program.
    The Commission adopted it on Tuesday and now, a couple 
months later, we've now approved 10 rounds of funding, 10 
rounds of applications, have distributed approximately a $105 
million to almost 41 States, I believe it is, plus the District 
of Columbia, and it's incredible the range of applications 
we've been seeing, everything from things you might expect, the 
standard remote diagnosis or treatment of some of the chronic 
conditions that we've always seen, but also some unexpected 
places.
    Mental health, for example, has been a particularly 
important vector as people struggle with isolation and the 
stress of dealing with the pandemic. Remote mental health 
services can be especially important.
    The same thing for children who are our vulnerable 
populations, enabling them to get care outside of a bricks and 
mortar facility has been incredibly important, and so I 
couldn't agree more with what you first said, which is that as 
we emerge from this pandemic, I do hope we make permanent or at 
least consider doing so a lot of the forward-thinking steps 
that you have led on.
    Now is telehealth's chance to shine. We need to make it the 
norm rather than the exception.
    Senator Daines. I couldn't agree more, Mr. Chairman. If we 
don't expand broadband access, much of the benefits of 
telehealth will be lost in places like Rural Montana. In fact, 
over the last couple of years with my strong support, we've 
increased Federal investment through FCC and Rural Utilities 
Service (RUS) programs.
    We also need to be looking at ways to increase deployment 
by decreasing some of those barriers. I've led on the effort on 
this Dig Once legislation and am currently working on a bill to 
speed up the approval process for Federal right-of-ways.
    What else can Congress do to reduce barriers so broadband 
providers can more easily connect Montanans?
    Chairman Pai. Great question. I think some of it involves 
the nitty-gritty work that it takes to build a broadband 
network and giving cheaper and quicker access to pulls, for 
example.
    Four years ago, I proposed as a commissioner that Congress 
give the FCC authority to regulate pull attachments that are 
owned by railroads and municipalities. We don't currently have 
that.
    Similarly, supporting some of our efforts to end FCC 
requirements to maintain fitting copper infrastructure so that 
those funds can now be devoted to fiber. Those are some of the 
common steps we could take and from a funding perspective, 
working with the FCC to support things like the Rural Digital 
Opportunity Fund which will support 50,000 locations, up to 
85,000 people in Montana who don't have broadband at all of the 
25 megabit per seconds standard.
    That would be a critical thing to making sure that folks in 
Montana and across the country get on the right side of the 
Digital Divide.
    Senator Daines. Thank you. I want to switch to 5G as I wrap 
up. In April, the FCC released a staff report detailing the 
State eligibility of 5G funds. In the report, it showed that 89 
percent of Montana's physical land mass and 33 percent of 
Montana's population will be eligible for the new 5G funds.
    As you know, Montana is a big State, fourth largest in the 
Nation, with few people. So it's important we are looking at 
both the actual area covered as well as population. We don't 
want carriers just putting up a 5G tower in each of our big 
cities and then calling it a day.
    Could you update me on the 5G Fund and the findings in the 
staff report?
    Chairman Pai. I appreciate the question, Senator. The FCC 
did adopt a proposal or an FCC Notice of Proposed Rulemaking on 
the 5G Fund and what we're seeking comment on now is the right 
way to proceed. Should we proceed based on some of the 
information we have, which would mean an auction to 5G funding 
in 2021, or should we wait until the more granular maps are 
available for expected 5G coverage, which would mean an 
auction, I believe, in 2023? So we're currently having a public 
conversation about that.
    What I will say is that I do believe it's incredibly 
important to make sure that these rural areas get some sort of 
5G service. There's a very pronounced Digital Divide otherwise 
that could emerge if you have folks in parts of States like 
Montana, a huge land mass, small population, that are never 
going to present an easy business case for deployment and 
that's part of the reason why when I introduced the 5G Fund, I 
specifically wanted to earmark, for example, $1 billion for 
deployments that would support precision agriculture.
    You might be a farmer. You might be the only person in 
several acres, if not square miles, in your area, but you 
really need 5G to do the symmetric exchange of data that allows 
your combine to run. Those are the types of deployments we need 
to recognize have value to the American economy.
    Senator Daines. So I appreciate the fact you grew up in 
Kansas, Senator Moran, and with your appreciation for Rural 
America. Your own experience in Rural America brings a lot for 
you in this job and I want to thank you for that.
    Chairman Pai. Thank you, Senator.
    Senator Kennedy. Senator Moran.
    Senator Moran. It is one of Chairman Pai's greatest 
attributes is the place of his birth and growth.
    Chairman Pai, I want to follow up once again on Senator 
Coons's questions. I seem today to be taking his lead, but I 
want to indicate that the Secure and Trusted Communications 
Network Program, the Rip and Replace Program, remains a high 
priority of mine as we aim to remove network elements that are 
deemed to pose security risks and replace them with alternative 
equipment.
    You visited with Senator Coons about the $2 billion and its 
adequacy. I'm also interested, in addition to the answer to 
that question, in identifying an appropriate role for Congress 
to support software-based technology solutions in open radio 
access network equipment.
    How can Congress support development of this type of 
innovative technology without inappropriately tipping the 
scales for one form of technology over another?
    Chairman Pai. That's a great question, Senator. The FCC was 
poised when the pandemic hit to hold a forum on this very topic 
on March 26 and we had to postpone it for obvious reasons, but 
you put your finger on one of the critical issues, which is, 
how do we ensure that we promote the network architecture of 
the future, a network architecture that is much more likely to 
be secure, much more likely to be cost effective, and much more 
likely to be functional?
    That virtualization is where we think things are going to 
some extent and I think there's an important role for Congress 
here, but one role, of course, is to have hearings, of course, 
the standard congressional functions to shine a light on some 
of the issues. It's not going to be a flash cut, of course, and 
so that means we have to have an open conversation about how we 
go from where we are now with the relatively consolidated full 
stack hardware marketplace to the more diverse hardware and 
software-based 5G architecture of the future. So I think having 
hearings and the like is very important.
    In terms of funding, there have been, I know, conversations 
about that. That's an area where I'd have to think very hard 
about the way forward and traditionally we have relied on the 
marketplace to encourage that type of innovation, but that's 
something that Congress would have to examine, as well.
    The other thing I would say is just simply to support the 
FCC's efforts in this regard, to try to figure out--to learn 
more about these vendors and so I've had a chance to meet with 
many of them and if it would be of interest, we could certainly 
pass along the names and contact info of some of those folks. 
They're doing some really innovative things. Many of them are 
based here in the U.S. and we'd like to help you learn about 
them, too.
    Senator Moran. I'd appreciate that information.
    Chairman Kennedy, let me compliment you. A long time ago 
when I came to the Senate, the first leadership role I played 
was as the Ranking Member of this subcommittee before becoming 
its Chairman and in the previous years to my being a Ranking 
Member, the FCC had not been an agency in front of this 
subcommittee in 20 or 30 years.
    Senator Kennedy. Really.
    Senator Moran. Other agencies were more--I don't know--a 
higher priority in the hearing process. It was one of the 
things I encouraged the FCC, and it's an important agency to 
the country, but it's certainly an important agency to Kansas, 
and I want to tell you that you've taken the oversight 
authority of the appropriations process to new levels, and I'm 
anxious to fulfill my responsibilities in my subcommittee to 
the extent that you're doing so here.
    And so I do think that Congress needs to reassert its role 
in many ways and Appropriations is one of the means by which 
we're capable of doing that and oversight is hugely important 
and I'm pleased to be a part of that effort to try to make sure 
that Congress on behalf of the American taxpayer has its role 
fulfilled.
    Senator Kennedy. Thank you. Thank you, Senator.
    Senator Moran. Mr. Ajit Pai may feel differently about this 
topic than I just described but----
    Chairman Pai. I hit the jackpot as far as I'm concerned.
    Senator Moran. Very good. Good answer.
    Senator Kennedy. The senior Senator and former Governor of 
the great State of West Virginia.
    Senator Manchin. Thank you. Those were the good old days.
    Chairman Pai, you and I've had many discussions. I just 
want to get a clear reading on what's going on here.
    First of all, we had $4 billion that was supposed to go 
out, the $4 billion, right, for the rural broadband, and that's 
been held up because of the mapping. We contested the mapping, 
as you know, and the mapping to me is so serious because Rural 
America, Rural Appalachia especially, is going to be left 
behind and the greatest need we have is broadband right now.
    So there was $4 billion there and now that's up to $9 
billion, I understand.
    Chairman Pai. That's part of the 5G Fund. That is what the 
FCC is looking at.
    Senator Manchin. And then you had another $20 billion for 
hard wire?
    Chairman Pai. Exactly.
    Senator Manchin. Okay. And all this is supposed to go out 
by November?
    Chairman Pai. No. That's only for the Rural Digital 
Opportunity Fund, the first phase of RDOF, which is the overall 
$20 billion program. Sixteen billion of it will be allocated 
for unserved areas, starting through a reverse auction on 
October 29.
    Senator Manchin. Okay. But if we don't have--I know--we 
keep having this discussion about mapping. We know the maps 
aren't accurate. We're relying on the carriers right now and 
the carriers are basically showing broad areas of coverage that 
they don't have and we've proven that and I would encourage any 
of my colleagues here to do your own and encourage your 
constituents to do their own tests and you will find out how 
starkly that they are misinformed on that and basically in 
error.
    So they could be left behind. Areas that really need it 
that are showing they're already covered are not going to have 
money dedicated to them.
    You said it was $65 million you needed in order to correct 
this or do the mapping. How much would it take for the Mobile 
Broadband Mapping provisions, Mobile? You was talking about $65 
million on the----
    Chairman Pai. The $65 million would be just for the startup 
in the first year of the Broadband Data Act requirements and so 
that would only cover that first year to get the program up and 
running.
    Senator Manchin. But how about if we were going--what do 
you think needs implemented for just the Mobile Broadband 
Mapping provisions?
    Chairman Pai. I don't know. I can't recall off the top of 
my head if there is a breakout of how much mobile alone would--
the two have been intertwined and in fact the fixed side of it 
is further along than the mobile side. So, you know, solving 
one problem would help us solve the other, I think.
    Senator Manchin. And you're saying that basically none of 
the money that you have available now can be used for this?
    Chairman Pai. We do not have the funds, no. That's why we 
flagged last fall and again earlier this year that this was an 
unfunded mandate and not only that, it prohibited us from going 
to USAC to do this work. So we're----
    Senator Manchin. I'm just saying if you have $9 billion 
basically in the 5G Fund and you have $20 billion in Hard Wire 
Fund, almost $30 billion, we can't get $65 million out of that 
to get the maps correct?
    Chairman Pai. Well, we're talking about the funding, the 
appropriated funding that would----
    Senator Manchin. Yes.
    Chairman Pai [continuing]. Be necessary for the IT and 
back-end work for the employees and the like and that's the 
kind of funding that we need, not the money going out the door 
to the companies.
    Senator Manchin. Have you requested that?
    Chairman Pai. Oh, yes, many, many times, including before 
the passage of the Broadband Data Act.
    Senator Manchin. What did you expect--basically, let's say 
we have another CARES package, CARES II, and I'm understanding 
even the White House is talking about the trillion dollars as 
far as in infrastructure.
    If we can't get this out the door, how are we going to--how 
would we sit here and basically appropriate any more money or 
thinking that we could disburse that?
    Chairman Pai. I defer to you on that. I'll simply say that 
without the money, we can't move ahead with this mandate and I 
wish it were otherwise.
    Senator Manchin. You have gone to the Finance Committee on 
this?
    Chairman Pai. No, not to finance, but we have gone to 
Commerce and Appropriations, among others.
    Senator Manchin. Yes.
    Chairman Pai. Yes. We flagged this issue awhile back.
    Senator Manchin. Chairman, the only thing I can tell you is 
that my State's hurting tremendously. As far as if you want to 
know why economic recovery is not happening the way it should 
is that we couldn't even do telehealth in about 30 or 40 
percent of our State. We had to start basically using audio 
health and reimbursing our doctors on audio health because 
there was no telehealth available. That's how critical it is 
now and it's a shame and something has to be done. If we can do 
something through this subcommittee basically and the money 
that's needed or even transferring or moving money around to 
get the proper mapping, I think it should be the highest 
priority we have.
    Thank you.
    Senator Kennedy. Thank you, Senator.
    I only have a couple more, Mr. Chairman. I want to thank 
you again, you and your fellow Commissioners, for agreeing to 
do a public auction on the C-band.
    If you back out the $5 billion that we're paying for 
relocation expenses, excuse me, and the $10 billion that we're 
paying on top of that, how much do you think taxpayers will net 
from the licensing of the C-band?
    Chairman Pai. It's difficult to say. We've heard estimates 
as high as $50 billion for the overall auction once it's said 
and done and----
    Senator Kennedy. Would that be net?
    Chairman Pai. That's my understanding. Net, I guess 50 
minus 15, so 35 would be the net in that situation.
    Senator Kennedy. Can that money be used for broadband?
    Chairman Pai. Absolutely, Senator, it could be with 
legislation. Now we are, as Senator Coons' question, 
eliminated--we're required to put it in the Treasury, but if 
you change that law, then it can be devoted to that purpose.
    Senator Kennedy. Okay. Now the original proposal by the 
foreign satellite companies, which formed an alliance called 
the C-Band Alliance, was to seek permission from the FCC for 
them to conduct the auction and allocate the C-band and allow 
them, the foreign satellite companies, to keep the proceeds of 
the auction, is that correct?
    Chairman Pai. Yes, a private sale in which, yes, they would 
handle that process.
    Senator Kennedy. And it was clear to me at one point the 
FCC was inclined to go along with it, is that accurate?
    Chairman Pai. No, not from my perspective. I never said 
anything publicly one way or the other about the FCC----
    Senator Kennedy. Well, you may not have, let me just state 
as a matter of fact that I think the FCC was this close to 
doing it, but you didn't, and I thank you for that.
    Some FCC commissioners made public statements saying we're 
going to do this and by this, I mean the private auction.
    As a result, one of the foreign satellite companies, I 
think it would be accurate to call it the lead dog, Intelsat, 
its stock went through the roof. I mean, it went through the 
roof, and I'm happy for it. On November 5, 2019, the CEO of 
Intelsat met with one of your senior lawyers. December 5, 2019, 
according to a lawsuit later that day, two of the biggest 
Intelsat shareholders sold $246 million of their own stock.
    Shortly thereafter, the FCC announced that it was going to 
conduct a public auction, not a private auction, and the price 
of Intelsat stock dropped more than 75 percent, from like 25 
bucks to 6 bucks.
    What happened in that meeting at the FCC on November 5?
    Chairman Pai. I am informed that the company was very keen 
to get a sense from the FCC as to which direction it was 
heading, private sale, public auction, something else, and the 
FCC, the staffer you mentioned, as well as another staffer, 
declined to state a position one way or the other and that was 
it. They did not give any forecast as to where the FCC was 
heading.
    Senator Kennedy. Mm-hmm. Okay. Are those two staffers still 
working for the FCC?
    Chairman Pai. They are, yes.
    Senator Kennedy. Okay.
    Chairman Pai. With great distinction, I would add.
    Senator Kennedy. Okay. I think I would like to ask them to 
come and let us talk about what happened in that meeting. 
Something happened in that meeting. I'm not saying what it is, 
but when you meet with a CEO and the CEO and then the two 
biggest shareholders of the company and the CEO sell a massive 
amount of their stock, maybe it's just a coincidence. I'm not 
saying it is or it isn't, but a massive lawsuit has been filed, 
and I'd like to know more about what happened in that meeting.
    Senator Coons.
    Senator Coons. No further questions, Mr. Chair.
    Senator Kennedy. Okay. I want to give you a breather, Mr. 
Chairman, because I know how busy you are, but at some point I 
would like to ask you and your colleagues to come back and 
let's talk about the prison cell phones and what we can do 
about it. Let's talk about the issue raised by Senator Manchin 
and others and if you wouldn't mind making available your 
lawyers who were in that meeting, we can probably all do this 
in one meeting, one hearing.
    And again I want to thank you for your leadership and I 
mean that. You're a very talented individual and we're lucky to 
have you in government.
    If there are no further questions, Andy says I have to read 
this. The hearing record will remain open until next Tuesday 
for subcommittee members to submit any statements or questions 
to the witnesses for the record.
    [The following questions were not asked at the hearing, but 
were submitted to the witnesses for response subsequent to the 
hearing:]
                  Questions Submitted to Hon. Ajit Pai
              Questions Submitted by Senator John Kennedy
                     definition of access arbitrage
    Question 1. We would like to thank you for taking the time to 
answer our questions regarding the Elimination of Access Arbitrage 
Order and the issues that surround the Order when it comes to recent 
disputes, complaint, law suit, the recent waiver of one company and the 
rest of the waiver requests that have been waiting for weeks now. Our 
goal, is to make sure that the definition used in the Order is clear 
and addresses the Congress's request to Eliminate Access Arbitrage, 
that shifts caused by the Order are properly re-evaluated based on the 
economics of the new routes and the Chairman's belief that there are no 
such things as free conference calls when free conference calls are 
needed most. In following up to your answers we would like to circle 
back with a few additional questions, regarding (1) the definition of 
Access Arbitrage, (2) the cause of the traffic shifts being prescribed 
in the Order (3) forms of free to the consumer conference calls and the 
way they are funded, that will hopefully bring clarity and eliminate 
disputes.
    In combination, your answers to my questions, the back-up queue of 
requests for waivers from this Order, and details on why only 
Inteliquent was granted a waiver have created a need for some 
additional follow-up questions to get a full understanding of how the 
Order sets out to achieve its stated goal of eliminating access 
arbitrage.

    When mentioning the Inteliquent waiver you said:

          This shift materially altered Inteliquent's normal mix of 
        originating and terminating traffic, such that Inteliquent 
        would likely fall under the Commission's ``Access Stimulation'' 
        definition even though it is not behaving like an access 
        arbitrageur

    It is troubling that our Access Stimulation definition needs waiver 
for an entity not behaving like an access arbitrageur. This means that 
the definition of Access Arbitrage, or behaving like an Access 
Arbitrageur, is a different definition than the narrowly focused 
definition of Access Stimulator in the Order. It also means that 
waiving the 6:1 traffic ratio trigger for Inteliquent doesn't create 
consumer harm unless they were behaving as an Access Arbitrageur.

    The Order states:

          ``At the same time, we remain unwilling to adopt an outright 
        ban on access stimulation.\107\ As the Commission concluded in 
        the USF/ICC Transformation Order, prohibiting access 
        stimulation in its entirety or finding that revenue sharing is 
        a per se violation of section 201 of the Act would be an 
        overbroad solution ``and no party has suggested a way to 
        overcome this shortcoming.'' \108\ Instead, the Commission 
        chose to prescribe narrowly focused conditions for providers 
        engaged in access stimulation.\109\ We adhere to that view 
        today because there is still no suggestion as to how a blanket 
        prohibition could be tailored to avoid it being overbroad.''

          First, under our newly amended rules, competitive LECs with 
        an interstate terminating-to-originating traffic ratio of at 
        least 6:1 in a calendar month will be defined as engaging in 
        access stimulation.\124\

    This suggests the Commission, in an effort to avoid an overbroad 
definition of Access Stimulation, attempted to narrow it by 
anticipating the traffic characteristics of a small group of targeted 
LECs ``known'' as the Access Stimulating LECs. This assortment of LECs 
comes from an informal list provided to the FCC by a single carrier, 
and not because of any specific behaviors (i.e., they were LECs thought 
to be behaving like Access Arbitrageurs). The result of this narrowing 
was an interstate terminating to originating ratio ``trigger'' of at 
least 6:1 which can be waived at any time without concern of causing 
consumer harm.
    This may be a faulty way--a dangerous way--of creating a narrowed 
definition (which in and of itself, as the FCC acknowledges, results in 
no consumer harm) to fit a specific company or segment of traffic, then 
enforcing significant financial consequences. As you state in your 
answer to my questions:

          ``That is why we will grant waivers of our rules when it is 
        justified and is in the public interest to do so,''

    Arbitrage is the practice of taking advantage of a price difference 
between two or more markets: striking a combination of matching deals 
that capitalize upon the imbalance of rates, the profit being the 
difference between the market prices at which the unit is traded. The 
difference in access prices, I would assume, is Access Arbitrage and 
where the consumer harm is.

    The Order states:

          We find that by reversing the financial responsibility, 
        customers will receive more accurate price signals and implicit 
        subsidies will more effectively be reduced. We are not 
        persuaded that continuing to allow access-stimulating LECs to 
        collect revenues from access charges, even if ``equalized,'' 
        would eliminate the arbitrage problem. To the contrary, such 
        action would provide access-stimulating LECs (the list) with a 
        protected revenue stream and thus encourage arbitrage.\24\

    But in granting Inteliquent's waiver the Commission stated:

          In its Petition, Inteliquent also convinces us that it is not 
        engaged in access arbitrage (attempts to take advantage of rate 
        differentials in our existing intercarrier compensation 
        system).

    The Order rejects that ``equalized'' rates would eliminate the 
arbitrage problem, but in granting the Inteliquent waiver affirms that 
arbitrage is, by definition, dependent on rate differentials (or ``non-
equalized'' rates). It seems by the Commission's logic, a LEC can be an 
access stimulator and subject to the significant financial consequences 
of the Order, while at the same time not being an access arbitrageur 
and, thus, in need of a waiver.
    Similarly it seems that a LEC could easily avoid the definition of 
being an Access Stimulator by having an acceptable traffic mix, yet 
fully behave like an Access Arbitrageur and thus not need a waiver and 
be free to practice the very arbitrage the Congress instructed the FCC 
to eliminate.
    For reasons of possible carrier misidentification (disputes), a 
growing list of companies patiently waiting on waivers, the resources 
it takes to grant waivers, and because there are numerous reasons for 
material shifts in traffic even without the pandemic, why doesn't the 
Order use the Commission's definition of what it means to act like an 
Access Arbitrageur to directly and consistently achieve its goal of 
identifying and eliminating arbitrage?
    What is the definition of Access Arbitrage and how does it differ 
from the definition of Access Stimulation?
Follow-up to Question 1) What is the act of behaving like an Access 
        Arbitrageur?
    Answer. The Commission has not adopted a definition of ``Access 
Arbitrage,'' but it has adopted a definition of ``Access Stimulation,'' 
which is a form of access arbitrage. That definition, codified in 47 
C.F.R. Sec. 61.3(bbb), provides bright-line criteria for establishing 
whether a local exchange carrier is engaged in access stimulation for 
purposes of the Commission's rules. For example, access stimulation 
occurs if ``[t]he rate-of-return local exchange carrier or a 
Competitive Local Exchange Carrier: (A) Has an access revenue sharing 
agreement, whether express, implied, written or oral, that, over the 
course of the agreement, would directly or indirectly result in a net 
payment to the other party (including affiliates) to the agreement, in 
which payment by the rate-of-return local exchange carrier or 
Competitive Local Exchange Carrier is based on the billing or 
collection of access charges from interexchange carriers or wireless 
carriers. When determining whether there is a net payment under this 
part, all payments, discounts, credits, services, features, functions, 
and other items of value, regardless of form, provided by the rate-of-
return local exchange carrier or Competitive Local Exchange Carrier to 
the other party to the agreement shall be taken into account; and (B) 
Has either an interstate terminating-to-originating traffic ratio of at 
least 3:1 in a calendar month, or has had more than a 100 percent 
growth in interstate originating and/or terminating switched access 
minutes of use in a month compared to the same month in the preceding 
year.'' 47 C.F.R. Sec. 61.3bbb(1)(i). Alternatively, access stimulation 
occurs if a ``Competitive Local Exchange Carrier has an interstate 
terminating-to-originating traffic ratio of at least 6:1 in an end 
office in a calendar month'' or a ``rate-of-return local exchange 
carrier has an interstate terminating-to-originating traffic ratio of 
at least 10:1 in an end office in a three calendar month period and has 
500,000 minutes or more of interstate terminating minutes-of-use per 
month in the same end office in the same three calendar month period. 
These factors will be measured as an average over the three calendar 
month period.'' 47 C.F.R. Sec. 61.3bbb(1)(ii)-(iii).
    The Commission's access stimulation rules are part of its ongoing 
efforts to eliminate access arbitrage, intended to target companies 
that have been exploiting our intercarrier compensation system by 
generating inflated call volumes, padding their bottom lines and 
sticking consumers who never signed up for the services with the bills.
                             traffic shifts
    Question 2. In regard to traffic shifts being intended or 
unintended consequences of the Order, the Order states:

          Our rules leave carriers free to respond in a number of 
        ways--including in combination--such as by changing end-user 
        rates to account for the access-stimulating LEC assuming 
        financial responsibility for the intermediate access providers' 
        charges for delivering traffic under our rules; or by self-
        provisioning or selecting an alternative intermediate access 
        provider or route for traffic where that would be a less costly 
        option, or by seeking revenue elsewhere, for example, through 
        an advertising-supported approach to offering free services or 
        services provided at less than cost.

    One of responses prescribed by the Commission in the Order reminds 
carriers targeted by the Order they are free to select an alternative 
intermediate access provider or route traffic where that would be a 
less costly option.
    Do you consider large traffic shifts as an intended or unintended 
consequence of the Order?
Follow-up to Question 2) What timeframes and carrier network 
        considerations were assessed to ensure this shift would be 
        successful and minimize service disruptions?
Follow-up to Question 2) You issued an order that dramatically changed 
        the economics of call routing. Did you assume traffic would not 
        shift to avoid the shifting economics?
Follow-up to Question 2) Did these shifts in traffic equalize rates and 
        eliminate wasteful arbitrage?
    Answer. To address the practice of carriers gaming the intercarrier 
compensation system, last year the Commission unanimously adopted an 
Access Arbitrage Order to make local exchange carriers engaged in 
wasteful access arbitrage responsible for the costs of having calls 
delivered to them. When that Order was adopted, the Commission expected 
that providers of high-volume calling services, such as conference 
calling, and their access-stimulating local exchange carrier partners 
would likely need to change their business models. There is evidence 
that some such local exchange carriers and their business partners are 
changing their practices. For example, at least six local exchange 
carriers that previously engaged in access stimulation appear to have 
exited that business. This is an intended and beneficial consequence of 
the order.
    Unsurprisingly, some access arbitrageurs are also trying to 
circumvent the Order to continue to obtain implicit subsidies from long 
distance consumers. In some cases, conference calls and other non-
geographic specific services (as opposed to residential and business 
customers located in a specific geographic area) are still made using 
phone numbers originally assigned to carriers providing service in 
rural areas, but the arbitrageurs abruptly changed the locations where 
they want traffic delivered, picking spots with insufficient capacity 
to handle the increased load. In other instances, the arbitrageurs 
changed their routing practices requesting that long distance carriers 
bring calls to the remote location where the access-stimulating carrier 
is located, in an attempt to undermine the Commission's rules requiring 
access-stimulating carriers to bear the costs of their inefficient 
routing decisions.
    Routing changes occur all the time in our Nation's 
telecommunications networks and industry practice and procedures--and 
sometimes contracts negotiated between particular carriers--provide for 
the seamless completion of those changes. Those practices ensure that 
all carriers that will handle traffic on the affected routes receive 
adequate notice of network changes and have sufficient time to make any 
changes needed to handle anticipated calling volumes. It appears as 
though some access arbitrageurs changed the routing of calls outside of 
these practices for the purpose of using the facilities of affiliated 
companies and perpetuating the implicit subsidies that Congress has 
directed the Commission to eliminate.
    Such actions are contrary to the public interest and, along with 
other unjust and unreasonable practices, unlawful.
    The rules that the Commission adopted in the Order last fall just 
became effective in January 2020. We expect that the rules have reduced 
arbitrage and will continue to do so as long as the Commission remains 
vigilant.
                          free conference call
    Question 3. And finally, there is not a ban on free conference 
calls. But am I to understand that the Commission desires to set a 
price floor for conferencing services? Has the Commission determined 
the lowest price it would find acceptable for these services? It seems 
that a number of companies provide free conference calls including, 
Google, Facebook, Zoom, WebEx, FreeConferenceCall.com, GotoMeeting, 
Microsoft/Skype, and many more. Over the last decade application 
companies have been able to use simple inexpensive computers to mix or 
bridge calls for almost no cost, paving the way for more consumer-
friendly free conference call collaboration services. Apparently, 
companies have paid for the service of bridging calls through multiple 
methods without using implicit subsidies and access arbitrage to offer 
these services. Some of the ways to cover free services offered to 
customers include:

  --Charging a fee or subscription for upgrades and additional 
        services--where free is used to promote pay services to the 
        consumer
  --Selling the users information for marketing purposes--where the 
        consumer has decided to lose privacy, gain targeted marketing, 
        rather than pay money
  --Member or donor supported--where members pay what they can to 
        support other members who cannot afford pay services.
  --When paid by the means above does the Commission believe there are 
        such things as free to the consumer conference calls?

    Answer. The Commission does not regulate the price end users pay 
for conference calling services. Rather, it has acted to prevent 
conference calling companies from using intercarrier compensation to 
subsidize the cost of those services. In the Commission's Access 
Arbitrage Order, the Commission acknowledged the possibility that 
companies could use alternative means to cover their costs of providing 
free-to-consumer services, such as accepting advertising support. But 
as your question underscores, just because a consumer does not pay a 
fee for the conference calls does not mean that such calls do not come 
at a cost. In the examples you give, the financial cost is borne by 
those paying for upgraded services, by data purchasers or by third 
parties, rather than as a specific fee paid by the end user. Conference 
calling services that are supported by such means--and do not rely on 
implicit subsidies based on inefficiencies in the intercarrier 
compensation system--are unaffected by the Commission's rules 
concerning arbitrage. Those rules apply only to local exchange carriers 
and do not affect conference calling services that do not rely on 
access arbitrage to fund their operations.

    Question 4. Rural healthcare providers require a robust and 
extensive telecommunications network to interact with and care for 
patients. The networks are used to transmit large electronic files, 
including health records, patient billing, training courses, and more. 
Rural healthcare providers have been aggressively preparing for the 
spread of COVID-19 in their communities and providing dependable tele-
medicine services over the Internet has become all the more critical. 
Having a reliable network is not a luxury; it is mission critical. The 
Rural Health Care (RHC) Universal Service Fund at the FCC provides 
critical funding to eligible healthcare providers for broadband 
services. Currently, these funds are tied up at the FCC. Currently, 
there is approximately $1.07 Billion on the shelf at the FCC for 
funding years 17-20.
    What is the plan to get the $1 Billion in backlogged RHC funds out 
the door?

    Answer. The FCC's Rural Health Care (RHC) Program provides funding 
to eligible healthcare providers for telecommunications and broadband 
services necessary for the provision of healthcare. The RHC Program 
plays a vital role in improving the quality of healthcare and 
telehealth services available to the approximately 60 million people 
who live in rural America. The Universal Service Administrative Company 
(USAC) administers the RHC Program consistent with FCC rules through an 
annual funding cycle.
    RHC Program applications have been processed, and continue to be 
processed, consistent with the annual funding cycle. An RHC Program 
funding year runs from July 1 to June 30 of the following year. For 
example, funding year 2020 began on July 1, 2020, and will end on June 
30, 2021. Applicants are required to submit applications during the 
application filing window in the months before the start of each 
funding year and then begin receiving eligible services and/or 
equipment for RHC Program support when the funding year begins on July 
1. The most recent application filing window for funding year 2020 
opened on February 2, 2020 and closed on June 30, 2020.
    Funds associated with applications that were recently filed or 
applications that require additional investigation because applicants 
have not yet adequately substantiated their eligibility for 
reimbursement represent 94 percent of the funds pending from funding 
years 2017-2020. Indeed, approximately 62 percent of the pending 
funding consists of pending applications for funding year 2020, with 
applications due only on June 30, 2020. USAC is processing these 
applications and expects to begin issuing funding commitments for 
funding year 2020 in the coming weeks. Approximately 10 percent and 17 
percent of the pending amount are attributable to funding years 2018 
and 2019, respectively, because a service provider has not yet provided 
all of the required documentation for approval of its requested rural 
rates for interstate services. The Commission will be able to resolve 
these funding year 2018 and 2019 funding requests after the service 
provider submits this documentation, and USAC will begin issuing 
funding commitments for approved funding requests shortly thereafter. 
Additional pending funds are related to applications that are 
undergoing compliance investigations. USAC will be able to issue 
funding decisions for these applications after completing these 
compliance investigations.
    Beginning in funding year 2021, rates and the amount of support in 
the Telecom Program will be calculated using a publicly available rates 
database. Use of this rates database will streamline application review 
by eliminating USAC's and the Commission's review of submitted rates, 
resulting in faster funding decisions for the Telecom Program.
    USAC carefully reviews all timely filed RHC Program applications 
and reimbursement requests to ensure compliance with FCC rules and to 
protect the program from waste, fraud, and abuse. USAC only reimburses 
for eligible services and equipment delivered during the funding year, 
and applicants may not receive funding in advance. FCC staff will 
continue to work closely with USAC to ensure that funds are disbursed 
in an efficient manner while protecting the RHC Program from waste, 
fraud, and abuse.
Follow-up to Question 4) A variety of measures are being shared on 
        Capitol Hill that would provide more funding to the RHC program 
        in the next COVID-19 package (example attached). Do you believe 
        the FCC can process these funds in a timely manner so 
        healthcare providers can get the support that they desperately 
        need?
    Answer. We expect that the FCC and USAC will be able to effectively 
process applications and disburse funding resulting from legislation 
appropriating additional funds to for telehealth. In particular, I 
would reiterate my request to the Committee for at least $430 million 
to fund the COVID-19 Telehealth Program. This program was a tremendous 
success, with the Commission issuing awards within weeks of the passage 
of the CARES Act. Commission staff reviewed applications on a rolling 
basis and prioritized funding to healthcare providers located in areas 
that were hardest hit by COVID-19 and where the support would have the 
greatest impact on addressing healthcare needs by preventing, preparing 
for, and responding to the coronavirus. In total, the Commission issued 
funding commitments for 539 applications in 47 States plus Washington, 
D.C. and Guam. As one of the States hardest hit by the pandemic, 
Louisiana was a significant beneficiary of the Commission's COVID-19 
Telehealth Program, with awards made to 14 Louisiana healthcare 
providers for more than $6.6 million in support, including Ochsner 
Clinic Foundation in New Orleans, HIV/AIDS Alliance for Region Two in 
Baton Rouge, CommuniHealth Service Bastrop Family Practice & Behavioral 
Health Center in Bastrop, Jefferson Parish Community Health Care 
Centers in Avondale, Lafayette Foundation Clinic in Lafayette, Access 
Health Louisiana in Kenner, DeSoto Regional Health System in Mansfield, 
Southeast Community Health Systems in Zachary, University of Louisiana 
at Lafayette, St. Thomas Community Health Center, Inc. in New Orleans, 
SWLA Center for Health Services in Lake Charles, NO/AIDS Task Force dba 
CrescentCare, New Orleans, Odyssey House Louisiana Community Health 
Center in New Orleans, and Our Lady of the Lake Hospital in Baton 
Rouge.
    However, demand for funding significantly exceeded the Program 
budget and, on July 8, 2020, the Commission exhausted the $200 million 
budget appropriated by Congress for the Program. Accordingly, unless 
Congress provides additional funding for the program, the Commission 
will not able to fund the remaining applications from healthcare 
providers.
    To the extent the Committee wishes to provide additional funding to 
rural healthcare providers, I would note that the Health Care Broadband 
Expansion During COVID-19 Act would be a poor legislative vehicle. 
Career staff have identified a number of programmatic and operational 
challenges regarding the legislation that would preclude swift 
implementation and appropriate authorization of funds. For example, the 
draft contains a number of provisions that appear designed to help 
service providers, not healthcare providers, by reducing competition in 
the program and requiring us to disburse funds to service providers 
without the program's safeguards against waste, fraud, and abuse--in 
other words, it would likely increase the improper payments that 
Congress sought to end with the Improper Payments Elimination and 
Recovery Act and move the program to a pay-and-chase model that's 
widely regarded by inspectors general as subject to abuse. This is 
aside from the more obvious problems with that legislation such as 
diverting funding away from its historic focus on rural Americas as 
well as delaying the reforms the Commission has adopted to speed 
application processing and eliminate abuse.

    Question 6. Low Power FM represents an important medium for members 
of local communities to access relevant, locally-produced information. 
In particular, Low Power FM could be a powerful educational tool for 
sharing information on public health with communities at-risk who lack 
access to other media, on issues such as addiction treatment and 
prevention, infectious disease, or other health threats like COVID-19.
    I understand that in some places, Low Power FM licenses may be 
dormant, not operating, or not broadcasting local information. However, 
the FCC does not regularly monitor or take action to re-allocate unused 
or under-utilized licenses. This is a lost opportunity to advance the 
public good by using an existing resource to assist our communities 
during an ongoing public health crisis.
    How does the FCC track LPFM spectrum use?
Follow-up to Question 6) How does the FCC identify unused or under-
        utilized licenses?
Follow-up to Question 6) What process, if any, does the FCC have to re-
        allocate unused or under-utilized licenses?
Follow-up to Question 6) I understand that the FCC plans to reopen the 
        window for LPFM spectrum allocation in July 2022. This seems 
        like a long time to wait. Is there any way to accelerate the 
        process for re-opening the window for LPFM stations, and at 
        that time, will you address unused or under-utilized licenses?
Follow-up to Question 6) What can be done to prioritize the re-
        allocation of LPFM for public health purposes during a public 
        health emergency?
    Answer. I agree with you that community-based, low power FM 
stations can provide an essential service to their listeners, just as 
full-power stations do. I should note at the outset, however, that the 
First Amendment and Section 326 of the Communications Act do not permit 
the Commission to mandate what content broadcast stations--full power 
or low power--must provide, including public health information. While 
all broadcast stations are expected to operate in the public interest, 
they ultimately have the discretion to choose what content they wish to 
provide.
    LPFM authorizations are only issued during designated filing 
windows for applications for new stations. These applications are 
reviewed by the Media Bureau's Audio Division to determinate whether 
they comply with our engineering and legal requirements. When 
applications are mutually exclusive--that is, that they overlap in 
terms of channel or location, and cannot both be granted--an 
application is selected pursuant to a comparative points analysis. An 
LPFM station may be constructed in any location provided it meets the 
Commission's spacing requirements and does not interfere with another 
authorized broadcast station. Locations with a high density of FM 
stations--such as major cities--have few if any vacant frequencies that 
meet these requirements. The Commission maintains an LPFM Channel 
Finder tool (https://www.fcc.gov/media/radio/lpfm-channel-finder), 
which was developed in the lead up to the 2013 filing window, to assist 
potential applicants locate a vacant FM frequency in their area.
    While I understand many stakeholders' desire to accelerate the next 
LPFM filing window, the limited resources of the Commission preclude a 
filing window prior to 2022. The task of conducting such a filing 
window is the responsibility of the Media Bureau's Audio Division, 
which handles all licensing matters for full power AM and FM stations, 
full power non-commercial FM stations, and FM translator and booster 
stations, in addition to LPFM stations. Bureau staff must allocate 
resources among these services and only opens a filing window for one 
service at a time. Once a filing window is scheduled, the Bureau 
processes all of the applications--potentially thousands--before moving 
to open another filing window for another service. This process can be 
time-consuming for the Bureau's engineering and legal staff, given that 
there is continued interest in new opportunities in the FM band, which 
can result in thousands of filed applications. Additionally, it has 
been our experience that these applications often result in extensive 
legal challenges from competing applicants or other stakeholders, which 
also consume significant Bureau resources. However, the process is 
necessary in order to ensure the continued integrity of the broadcast 
bands by preventing harmful interference among stations or the 
acceptance of applications from parties that are not legally qualified 
to hold Commission licenses. Because of the complexities of the 
licensing process, the Commission does not plan to modify its processes 
to accommodate an earlier LPFM filing window or otherwise accept 
applications for new LPFM stations outside of a filing window.
    The full-power non-commercial FM service will be next to receive a 
filing window, as that service has not had an opportunity for new 
applications since 2010, before the last LPFM filing window in 2013. 
LPFM advocates in fact support having the non-commercial FM window 
before the next LPFM window because non-commercial FM stations are a 
primary service and could displace any secondary LPFM stations. 
Additionally, potential LPFM licensees would be incentivized to first 
apply for an NCE station, thus potentially resulting in more LPFM 
opportunities when there is an LPFM window. Staff anticipates that the 
NCE FM window will be opened after our new non-commercial and LPFM 
processing rules are effective later this year, subject to OMB 
approval. Going forward, these new rules will make the process more 
efficient. Once the applications from the non-commercial FM filing 
window are processed, the Bureau will be in a position to open a filing 
window for new LPFM applications. It is unclear at this point when that 
might occur.
    I am proud of the performance of the broadcast industry during the 
pandemic, in particular LPFM stations, which operate without commercial 
support. Stations continue to keep their communities informed about the 
crisis and provide public health information. They've aired Public 
Service Announcements and increased local news programming. And they've 
held fundraisers for charities and local businesses and aired 
educational programming to help with distance learning for students and 
educators. The industry stepped up once again--as they typically do in 
times of crisis--and I publicly commended their efforts earlier this 
year.
    Finally, I should note that there are several means by which an 
LPFM authorization may terminate. Like full-power stations, LPFM 
stations may go silent for a period of time that does not exceed 12 
months. If a station is silent for 12 months consecutively, its license 
automatically expires as a matter of law under Section 312(g) of the 
Communications Act.
    LPFM stations are also subject to the same 8-year license term as 
full-power stations, so any station that fails to seek renewal will 
lose its license to broadcast. The Commission is currently in the 
middle of the FM station license renewal process, which will be 
completed in 2022. And an LPFM licensee may simply surrender its 
license at any time. Any expired, revoked, or surrendered licenses are 
potential channels for other applicants at the appropriate filing 
window period.
    As with full-power stations, LPFM stations typically notify the 
Media Bureau if the station plans to go silent for longer than a 10-day 
period. The Commission recently clarified that the rules requiring this 
notice explicitly apply to LPFM stations (although it had been the 
general practice of stations to do so previously). For silent periods 
expected to last longer than 30 days, the station must request and be 
granted Special Temporary Authority (STA) for the station to maintain 
its license while it is silent. Each STA is for a 6-month period. The 
Media Bureau maintains a list of stations--including LPFM stations--
that are silent for more than two consecutive months (https://
www.fcc.gov/media/radio/silent-fm-list) and stations are required to 
notify the Commission when operations resume.
    Additionally, our rules require that an LPFM station broadcast a 
minimum of 36 hours per week consisting of at least 5 hours per day on 
at least 6 days of the week, with limited exceptions for stations 
licensed to educational facilities. And our rules under certain 
circumstances permit a party to apply for unused airtime where a 
station fails to broadcast at least 12 hours per day each day of the 
year.

    Question 7. I have been informed by my colleague on the Committee, 
Sen. Hyde-Smith, that the citizens of Mississippi are deeply concerned 
about by the government's assertions that areas of the State have 
adequate mobile coverage, yet those who live in these areas cannot even 
get a signal. You have proposed spending $9 billion on a program to 
expand 5G across the country when we do not even know where it needs to 
go. We recognize there have been requests for funding better maps. 
Should the subcommittee and Congress provide your agency with funds for 
better maps, do you agree that it make senses to collect data for 
better maps before we spend $9 billion to improve connectivity, to get 
a better sense of where that money should be spent?

    Answer. I agree on the importance of collecting more accurate, 
precise, and granular broadband deployment data, and I would welcome 
the Committee providing the Commission with at least $65 million to 
fund the first year of implementation of the Digital Opportunity Data 
Collection as required by the Broadband DATA Act.
    I also agree with Senator Hyde-Smith that the rural citizens of 
Mississippi (along with those of every state) deserve a fair shot at 
getting 5G. And I agree that the maps designed by the last 
administration aren't sufficient to get the job done over the long-
term. The question the Commission now faces with the 5G Fund is whether 
to move forward quickly with an auction that would prioritize support 
to areas that historically lacked 3G or 4G LTE service, or whether to 
wait for new mapping data to come in and the back-end process that will 
be needed to validate and verify that data. I would agree with you that 
if the Committee were to fully fund the first year of implementation, 
it would alleviate the concern that the Commission still does not have 
the funding to carry out the second option.
                                 ______
                                 
            Questions Submitted by Senator Richard C. Shelby
    Question 1. Prior to the FCC's recent adoption of the ``Final 
Report and Order to Open the 6 GHz Band to Wi-Fi and Other Unlicensed 
Uses'' in April 2020, this subcommittee included 6 GHz report language 
in the Fiscal Year 2020 Financial Services and General Government 
Appropriations Act, which was incorporated into the Fiscal Year 2020 
Consolidated Appropriations Act. In this report, it was stated that we 
``expect the Commission to ensure its plan does not result in harmful 
interference to incumbent users or impact critical infrastructure 
communications systems.'' To that end, what work has the FCC done to 
adhere to that direction?

    Answer. On April 24, 2020, the Commission released a Report and 
Order and Further Notice of Proposed Rulemaking (Order), which adopted 
rules opening up the 6 GHz band for unlicensed use while protecting 
incumbent users from harmful interference. The Order carefully 
considered a record assembled over a two-and-a-half-year period, 
starting with the Commission's August 2017 Notice of Inquiry, and that 
included input from public safety entities, utilities, broadcasters, 
wireless Internet service providers, cable operators, content 
distributors, and other stakeholders. As with all of our spectrum 
proceedings, our highly qualified and experienced engineers reviewed 
the studies and data submitted into the record by interested parties in 
compliance with our rules and the Administrative Procedure Act and came 
to a dispassionate, engineering-based decision.
    The public record in this proceeding is replete with numerous 
studies from utilities and public safety entities, examining whether 
introducing unlicensed operations into the 6 GHz band would interrupt 
incumbent services. The Commission's staff dedicated substantial 
resources to reviewing the technical record and met with stakeholders 
to ensure a full understanding of each study and how those studies 
related to each stakeholder's positions on the issues in the 
proceeding. As a result, we expect deployment of unlicensed devices in 
the 6 GHz band will not result in harmful interference to incumbent 
users or impact critical infrastructure communications systems.

    Question 2. Additionally, the Committee's report stated that we 
``expect the FCC to ensure any mitigation technologies are rigorously 
tested in coordination with relevant sector specific agencies, and 
found to be effective in order to protect the electric transmission 
system.'' As such, what specific testing of Automated Frequency 
Coordination (AFC) has the Commission conducted, and if so, was it done 
in coordination with the sector specific agencies as directed in the 
Committee's report?

    Answer. The Commission has not yet authorized any AFC for use in 
the 6 GHz band. Nor was that the purpose of the 6 GHz Order. Instead, 
the purpose of that order was to establish the framework for unlicensed 
use of the band. Specifically, the Commission established a process to 
ensure administrators of the database(s) are qualified and conduct both 
internal and public testing prior to commercial operations. This is 
what the Commission has done for similar database coordination systems, 
such as those used for white space devices and the Citizens Band Radio 
Service. We of course welcome input from the relevant sector-specific 
agencies in that process. Until such time that the Commission approves 
an AFC, only low-power indoor devices may operate.

    Question 3. Furthermore, it is my understanding that in the FCC 6 
GHz Order, the Commission raised the notion of a multi-stakeholder 
group to work through technological issues with deploying unlicensed 
devices on the 6 GHz band. While I believe the Order's recommendation 
is a step in the right direction, I am concerned that this working 
group may not be as effective or robust enough to ensure the 
development of a truly operative AFC to prevent harmful interference to 
incumbent operations. As such, would you support a multi-stakeholder 
group to oversee the AFC testing as part of accommodating 
aforementioned language in Senate Report 116-111? And if so, would it 
be necessary for the FCC to play a central role in leading the multi-
stakeholder working group to provide the proper oversight needed to 
protect incumbents?

    Answer. The FCC supports the multi-stakeholder group that was 
initiated through a joint collaboration of Winnforum and the Wi-Fi 
Alliance. The initial kick-off meeting of the multi-stakeholder group 
on July 31 included representatives from the public safety, utility, 
broadcasting, wireless Internet service provider, and manufacturing 
communities, as well as other stakeholders. Among the issues discussed 
were the steps necessary to move forward with an AFC, including 
standards and testing. We will continue to monitor this situation and 
work with stakeholders to resolve any transitional issues.
                                 ______
                                 
              Questions Submitted by Senator John Boozman
                                 surety
    Question. Chairman Pai, you have undoubtedly heard concerns from 
small Internet service providers (ISPs) regarding the financial burdens 
they face of furnishing letter of credits in order to bid on FCC rural 
broadband auctions. Written testimony before congressional committees 
have related that such letters of credit reduce the liquidity of these 
small business ISPs, which have to set aside working capital and pay 
fees to obtain letters of credit. Several Senators, including myself, 
sent you a letter (attached) on January 28, 2020 asking the FCC to 
explore alternate risk management measures that would maximize 
responsible participation in this program, not inhibit it. Have you 
considered other products, like surety bonds, as acceptable security in 
lieu of letters of credit? Furthermore, have you looked at the question 
of whether allowing surety bonds as acceptable forms of security can 
increase small business participation?

    Answer. In the Rural Digital Opportunity Fund Order, the Commission 
recognized commenters' concerns with the fees associated with 
maintaining the larger letters of credit required because of the size 
of the Rural Digital Opportunity Fund. It concluded that allowing 
auction winners to reduce the value of letters of credit when the 
winner achieved specific broadband deployment milestones would 
establish a mechanism to easily recover disbursed funding in the event 
of non-compliance and fulfill our responsibility to protect program 
funds while also reducing for applicants the costs of participating in 
the Rural Digital Opportunity Fund.
    The Commission found that letters of credit best preserve limited 
Universal Service Fund resources because, unlike performance bonds, 
they allow for immediate reclamation of disbursed support in the event 
the recipient is not properly using those funds. Performance bonds 
would not provide the same level of protection and would require the 
involvement of a third party to adjudicate any disputes that arise, 
which impose additional burdens on carriers and the Commission and 
unnecessarily limit the authority of the Commission to allocate funds. 
Letters of credit are ``independent'' from the underlying transaction. 
Being independent in this way assures that the Universal Service 
Administrative Company, the Fund administrator, can collect monies due 
to it promptly without engaging in disputes with the winning bidder, 
the performance bond guarantor or the winning bidder's trustee in 
bankruptcy over whether the funds should be paid or even whether the 
funds are available to the Fund due to competing claims of creditors.
                                mapping
    Question. Chairman Pai, I would like to highlight a national 
geospatial mapping dataset hosted by the U.S. Geological Survey known 
as the 3D Elevation Program (3DEP) which uses advanced mapping 
technology commonly referred to as Light Detection and Ranging, or 
LiDAR. It is my understanding that roughly 70 percent of the country is 
already mapped to the 3DEP standard, and in regards to my State of 
Arkansas, the entire state has 3DEP coverage. It has been brought to my 
attention that the elevation data from 3DEP can be leveraged as both 
the starting point for a National Broadband Map since it would provide 
the most accurate version of a National Terrain Map, as well as to help 
guide siting and permitting decisions for rural broadband 
infrastructure deployment as part of gap analysis as to where there is 
coverage, and where coverage is missing. Can you tell me whether the 
FCC is partnering with USGS on 3DEP and leveraging such an important 
dataset for broadband infrastructure? Don't you think it makes sense 
for the FCC to leverage an existing nationwide dataset that is 
approaching 100 percent coverage?

    Answer. Thank you for letting me know about this resource. 
Commission staff have already been in contact with staff at the U.S. 
Geological Survey to see whether and how this information could be 
used, for example, to verify provider filings in connection with the 
Digital Opportunity Data Collection. I expect staff will continue to 
collaborate with the U.S. Geological Survey as we complete that 
rulemaking process.
                                 6 ghz
Question.

1.  Chairman Pai, I asked whether you were talking to the Department of 
Energy about testing. My understanding is that the FCC has not reached 
out to DOE to address the electric sector's concerns about testing in 
substantive way. However, your response indicated you believe you have 
discussed the issue with DOE.

   -- Can you please outline the engagement the FCC has had with DOE on 
            working through the interference concerns from the electric 
            sector?
   -- For example, have you or has anyone at the FCC spoken directly to 
            DOE about testing automated frequency coordination (AFC) 
            for unlicensed devices in the 6 GHz band?
   -- If so, who did you talk to at DOE about testing? (Please provide 
            names and titles).
   -- When did those conversations take place? (Please provide dates 
            and times).
   -- What did you discuss and were there any action items?
   -- Did you discuss using the national labs to test devices before 
            they enter the marketplace, as offered by DOE Assistant 
            Secretary Bruce Walker in a September letter to the 
            Commission?

    Answer. My apologies if there was any confusion. At the hearing, I 
was discussing our engagement with all stakeholders, including electric 
utilities, and not specifically with the Department of Energy.
    Perhaps most relevant to your inquiry is the June 27, 2019 
Technical Conference Regarding the Bulk-Power System that the Federal 
Energy Regulatory Commission (FERC) held at its facilities. The 
Commission sent senior-level staff from our Public Safety and Homeland 
Security Bureau to participate, along with all FERC commissioners and 
Department of Energy participants and attendees, such as Peter C. 
Balash, Ph.D., Senior Economist, United States Department of Energy's 
National Energy Technology Laboratory. As the 330-page transcript shows 
(https://cms.ferc.gov/sites/default/files/2020-05/20190809142302-
Transcript%2520-%2520062719ReliabilityTechnicalConference.pdf), the 6 
GHz matter received some attention during the program, but FERC did not 
offer any testing information, engineering data, or spectrum expertise, 
but rather amplified the claims of its regulated businesses. The 
question of additional testing did come up during the program, and 
participants with spectrum expertise cautioned that there would be no 
novel data gleaned from such testing and it would delay the rulemaking 
for several years.
    The Department of Energy never followed up with any communications 
with the FCC until a letter offering assistance months later. If the 
Department or FERC had made a specific request based on the engineering 
data, or if the National Telecommunications and Information 
Administration had made an inquiry, the Commission would have engaged 
with those entities. And FERC and the Department of Energy never did 
submit material for the record that disputes or supports the 
engineering data submitted by the wide range of stakeholders.
    The 6 GHz review had been underway since a 2017 Notice of Inquiry, 
and all agencies had the opportunity during that time to raise issues 
such as testing concerns. The Commission's work was transparent and in 
compliance with our rules, and our rulemaking was widely known and 
discussed within the different stakeholder communities. The extensive 
data in the record has a sound engineering basis, and I do not believe 
secondary testing now that the record has closed is warranted or 
necessary. If the Department decides to engage in the follow-up related 
to the multi-stakeholder group process, the agency is welcome to 
provide such input.

2.  I also asked if testing was being done in the 6 GHz band to ensure 
what you've proposed on paper is actually going to work that way. You 
replied, ``absolutely.'' I have a few questions as follow up:

   -- Does that mean the FCC is conducting testing of automated 
            frequency control (AFC) to mitigate interference from 
            unlicensed devices?
   -- If not, do you believe the FCC should conduct field testing now 
            that the rules have been set in the Final Report and Order?
   -- Given the multiple on the record requests from incumbents for 
            field testing, why is such testing not warranted, 
            especially when it comes to critical infrastructure?

    Answer. Respectfully, my full answer was: ``Absolutely. My 
understanding is that our staff and other stakeholders in the industry, 
electric utilities and others, have been consistently working, 
comparing notes and making progress on various issues, such as 
implementing the processes necessary to qualify AFC operators and test 
the AFCs prior to full commercial operation to ensure they protect 
incumbent operations as required by the rules. Although the Commission 
is not testing actual devices, I reiterate that we're always open to 
getting new information from the field and will analyze and use such 
information appropriately.'' Accordingly, I was not referring to the 
FCC conducting tests, but to the routine actions by the stakeholders in 
this proceeding and follow-up processes.
    I should also note that the Commission has not yet authorized any 
AFC for use in the 6 GHz band. Nor was that the purpose of the 6 GHz 
Order. Instead, the purpose of that order was to establish the 
framework for unlicensed use of the band. Specifically, the Commission 
established a process to ensure administrators of the database(s) are 
qualified and conduct both internal and public testing prior to 
commercial operations. This is what the Commission has done for similar 
database coordination systems, such as those used for white space 
devices and the Citizens Band Radio Service. Until such time that the 
Commission approves an AFC, only low-power indoor devices may operate.

3.  Further, I understand an industry stakeholder group will be 
organized to consider interference issues going forward.

   -- Who is running that?
   -- How are we going to ensure incumbents have a strong voice?

    Answer. The Order suggested that the industry create a multi-
stakeholder group to address issues of common concern. The FCC 
continues to support that approach, and accordingly, a multi-
stakeholder group was initiated through a joint collaboration of 
Winnforum and the Wi-Fi Alliance. The initial organizational meeting of 
the multi-stakeholder group on July 31, 2020 included representatives 
from the public safety, utility, broadcasting, wireless Internet 
service provider, and manufacturing communities as well as other 
stakeholders. Commission staff attended the meeting and will attend 
future meetings, as appropriate, to develop insight regarding continued 
representation of all industry segments as well as the processes 
implemented by the group and the relative participation by each 
industry segment. We will continue to monitor this situation and work 
with stakeholders to resolve any transitional issues.
                                 ______
                                 
            Questions Submitted by Senator Joe Manchin, III
                                hotspots
    Question 1. The coronavirus pandemic has thrown into stark relief 
the digital divide in our country. As millions of Americans work from 
home, chatting over video with colleagues thousands of miles away, 
sending emails, and going about their lives and livelihoods, there are 
still tens of millions--including thousands in my state--that lack 
access to even reliable cell service. As you saw in the April 24th 
letter Senator Collins and I sent you on this subject, I commend the 
private companies that have volunteered to do their part to address 
these challenges by taking the Keep Americans Connected Pledge, and I 
appreciate the work the FCC has done with the Institute for Museum & 
Library Services (IMLS) to promote the use of $50 million in funding it 
received in the CARES Act. But we need to be coordinating all of these 
separate efforts to ensure that that they are going to the people that 
need them the most. While I appreciate the response you sent me 
yesterday, sadly, it missed the point entirely. We do not want you to 
create any maps. All we wanted to know is how to deploy mobile 
broadband hotspots to the places that need it the most. How can we work 
together to better coordinate efforts between the public and private 
sectors to avoid duplication of efforts?

    Answer. I share your goal of closing the digital divide for all 
Americans. That's one reason why I have repeatedly called on Congress 
to fund a Remote Learning Initiative--one that would help ensure that 
the millions of students that cannot return to their school classrooms 
this fall nonetheless have the ability to connect to online learning. 
Such an effort--or an effort limited to the distribution of hotspots to 
consumers in areas with the preexisting wireless coverage needed for 
such hotspots to work--would require significant coordination to ensure 
that any funding is efficiently targeted. Although there are no quick 
and easy solutions to identify where funding is most needed, the 
swiftest process would likely involve an application process that would 
require an applicant to certify, among other things, that it has not 
already received private or public funding for the connectivity 
provided nor received such devices as a gift. Such a process could also 
allow applicants to demonstrate the need they actually have and whether 
mobile coverage is sufficient for hotspots to be a viable solution. 
Finally, we need to continue to have regular, open dialogue and data 
sharing between government agencies and between government agencies and 
the private sector.
                       terrain factor in 5g fund
    Question 2a. I applaud the FCC's commitment to including a terrain 
factor with regards to estimating network deployment costs. It's 
important that high cost, mountainous States like West Virginia to 
build out more cell sites to guarantee service to our constituents. I 
have some questions regarding how the FCC is defining ``mountainous,'' 
however. Anyone that has driven down I-79 through West Virginia will 
tell you that the geography just isn't the same in my State as it is in 
other parts of the East Coast. And yet we're lumped in with most of 
Pennsylvania and New York. Unfortunately, in the preliminary maps 
released by the FCC, there seems to be an inherent bias towards areas 
with higher elevation. I would argue that it's not just the elevation 
difference that matters. There needs to be an emphasis on steepness of 
terrain, not just the height of the mountain. Everyone in West Virginia 
can tell you that you need to go up to get service, and that the lack 
of service is in the valleys and hollers, not on the tops of our 
mountains. Do you believe that the FCC needs to take into account the 
different geographic factors around the country?
    2b. How will you resolve issues that are primarily due to steepness 
rather than elevation?

    Answer. Thank you for your support of the terrain factor and your 
inquiry into its calculation. We agree that what you have termed 
``steepness'' is an important factor in determining the terrain's 
effect on the cost of providing wireless service. As we understand it, 
you are using the steepness to capture the idea of relatively large 
variation in elevation over a given distance. Our proposed terrain 
classification is based on a measure of what we called ``terrain 
roughness,'' which is designed to capture this notion. The measure we 
use is the standard deviation of the elevation of an area.
    Intuitively, one can think of the standard deviation as a measure 
of how much the elevation at many different points in a specified area 
differs from the average elevation of the area. The larger this number, 
the rougher (or steeper) is the terrain in that area. For a perfectly 
flat area, the standard deviation would be zero (as all points would 
have the same elevation so there is no difference in elevation among 
points). The greater the difference in elevation between the higher 
points in an area and the lower points in an area, the greater the 
roughness, and the greater our standard deviation measure. Because the 
measure of standard deviation depends only on the difference in 
elevation among points in an area, the actual level of elevation does 
not affect the measure. Thus, for example, a flat piece of land will 
have a standard deviation of zero, whether its elevation is at sea 
level or in Davis, West Virginia. The same is true for an area with a 
positive standard deviation.
    We recognize that some areas receiving the highest adjustment 
factor are high elevation locations, but this does not reflect a bias 
towards higher elevations. Rather, it is because these locations: (1) 
have much larger areas with the roughest terrain; and (2) have areas in 
which the terrain is rougher than those in West Virginia.
    To explain more precisely, we compare our terrain measures of West 
Virginia to our measures of Idaho, which while about 3.5 times larger 
in square miles than West Virginia, has about the same population and a 
similar per capita income. In West Virginia, the areas (census blocks) 
that are classified as the roughest terrain (a standard deviation 
measure greater than 115 meters) cover only 724 square miles in which 
18,666 people live (about 1 percent of West Virginia's population). By 
contrast, the areas that have a standard deviation greater than 115 
meters in Idaho cover 35,547 square miles in which 117,231 people live 
(about 10 percent of Idaho's population.) Thus, the areas in Idaho that 
are classified as the roughest terrain are 500 times greater than those 
in West Virginia.
    Further, the roughest area in West Virginia has a standard 
deviation measure of 141 meters, and the five most rugged areas have 
standard deviations measures in the range of 141 meters to 127 meters. 
These areas cover roughly 260 square miles in which 7,193 people live. 
The most rugged area in Idaho has a standard deviation of 219 meters, 
and the five most rugged areas have a range of standard deviation 
measures of 219 meters to 197 meters. These areas cover 2,136 square 
miles, in which 5,097 people live. Approximately 75 percent of Idaho's 
roughest areas are rougher than West Virginia's roughest area.
    These comparisons illustrate that the FCC's estimates of difference 
in cost to serve due to terrain are a result of the roughness or 
steepness of terrain and not simply the elevation level of different 
areas.
                   federal geographic data committee
    Question 3a. As you know the FCC must consult the Federal 
Geographic Data Committee (FGDC) before commencing the new version of 
the National Broadband Map. This is the specific requirement found in 
Section 802 of the Broadband DATA Act, Public Law 116-130. Given the 
accuracy of broadband mapping still needs improvement, and in this 
case, given this clear requirement for the FCC to engage the FGDC 
before commencing the new version of the National Broadband Map, have 
you contacted FGDC Chairman Tim Petty to help implement this specific 
provision in the Broadband DATA Act?
    3b. If you have done so, how will the new version of the National 
Broadband Map differ from the previous problematic version based on 
your consultation with the FGDC?
    3c. Will the U.S. Geological Survey's 3D Elevation Program (3DEP) 
be utilized as the National Terrain Model as a starting point for the 
base level map for the National Broadband Map?

    Answer. The Office of Economics and Analytics has been 
corresponding with the Federal Geographic Data Committee and will 
continue to consult with them as we move forward. As you know, and as 
the FCC has warned for almost a year now, the Commission needs funding 
to implement the Broadband DATA Act (at least $65 million), and unless 
and until we get that funding, we cannot start the implementation 
process, making it difficult to describe how the revised National 
Broadband Map will differ from its present incarnation.
    Commission staff have also already been in contact staff at the 
U.S. Geological Survey to see whether and how the 3D Elevation Program 
could be used, for example, to verify provider filings in connection 
with the Digital Opportunity Data Collection or to help calculate a 
terrain factor. I expect staff will continue to collaborate with the 
U.S. Geological Survey as we complete that rulemaking process.
                              surety bonds
    Question 4a. You have undoubtedly heard concerns from small 
Internet service providers (ISPs) regarding the financial burdens they 
face of furnishing letter of credits in order to bid on FCC rural 
broadband auctions. Written testimony before congressional committees 
have related that such letters of credit reduce the liquidity of these 
small business ISPs, which have to set aside working capital and pay 
fees to obtain letters of credit. Several Senators sent the FCC a 
letter on January 28, 2020 asking the FCC to explore alternate risk 
management measures that would maximize responsible participation in 
this program, not inhibit it. Have you considered other products, like 
surety bonds, as acceptable security in lieu of letters of credit?
    4b. Furthermore, have you looked at the question of whether 
allowing surety bonds as acceptable forms of security can increase 
small business participation?

    Answer. In the Rural Digital Opportunity Fund Order, the Commission 
recognized commenters' concerns with the fees associated with 
maintaining the larger letters of credit required because of the size 
of the Rural Digital Opportunity Fund. It concluded that allowing 
auction winners to reduce the value of letters of credit when the 
winner achieved specific broadband deployment milestones would 
establish a mechanism to easily recover disbursed funding in the event 
of non-compliance and fulfill our responsibility to protect program 
funds while also reducing for applicants the costs of participating in 
the Rural Digital Opportunity Fund.
    The Commission found that letters of credit best preserve limited 
Universal Service Fund resources because, unlike performance bonds, 
they allow for an immediate reclamation of disbursed support in the 
event the recipient is not properly using those funds. Performance 
bonds would not provide the same level of protection and would require 
the involvement of a third party to adjudicate any disputes that arise, 
which impose additional burdens on carriers and the Commission and 
unnecessarily limit the authority of the Commission to allocate funds. 
Letters of credit are ``independent'' from the underlying transaction. 
Being independent in this way assures that the Universal Service 
Administrative Company, the Fund administrator, can collect monies due 
to it promptly without engaging in disputes with the winning bidder, 
the performance bond guarantor or the winning bidder's trustee in 
bankruptcy over whether the funds should be paid or even whether the 
funds are available to the Fund due to competing claims of creditors.
                    fcc covid-19 telehealth program
    Question 5a. As part of the CARES Act, Congress appropriated $200 
million in funding to the FCC to help healthcare providers provide 
connected care services to patients at their homes in response to the 
pandemic. The program specifically provides immediate support to 
eligible healthcare providers responding to COVID-19 by fully funding 
telecommunications services, information services, and devices 
necessary to provide care. As COVID-19 continues to spread in 
communities across the United States, millions of people are following 
directives to stay home and avoid risking exposure to the virus. In 
conjunction with those directives, healthcare providers have shifted to 
offering audio-visual telehealth services to patients, so that patients 
can receive evaluations, medical consultations, checkups and other 
services in their own homes, instead of risking exposure at a 
healthcare facility. So far, FCC has awarded a little over half of the 
funding to providers across the country, with several providers within 
West Virginia receiving awards. However, several smaller providers have 
not received any award or indication their application is being 
considered. Can you please describe by what metrics you are determining 
``worthiness'' of these grants?
    5b. How does size of the grant or size of the provider play a role 
in your decisionmaking?
    5c. How has the FCC been thinking about awarding smaller awards to 
providers who are asking as little as $60,000 to support their 
telehealth systems?

    Answer. At a time when our country is facing unprecedented 
challenges, telemedicine services have never been more important. In 
March, the Commission asked Congress to provide us with emergency 
telehealth funding. I'm thankful Congress included $200 million in the 
CARES Act for the FCC to establish a COVID-19 Telehealth Program to 
help healthcare providers provide connected care services to patients 
at their homes or mobile locations. Following enactment of the CARES 
Act, I immediately presented my plan for the COVID-19 Telehealth 
Program to my fellow commissioners, and they unanimously voted to 
approve it. On April 2, 2020, the Commission released the COVID-19 
Telehealth Program Order formally establishing the Program. Our aim was 
to provide immediate support to eligible healthcare providers 
responding to the COVID-19 pandemic by fully funding their 
telecommunications services, information services, and devices 
necessary to provide critical connected care services until the 
program's $200 million in funding has been expended or the COVID-19 
pandemic has ended. And that's exactly what we did.
    Consistent with Congress' directive and the urgent need for 
telehealth services in light of the COVID-19 pandemic, the Commission 
directed the Wireline Competition Bureau to award funding amounts for 
each selected applicant on a rolling basis and to ``target[] funding 
towards areas that have been hardest hit by COVID-19.'' The Commission 
expected the Bureau to ``use publicly available resources to help us 
identify these areas, such as data released by the Centers for Disease 
Control and Prevention, in addition to information provided by 
applicants.'' On the recommendation of the Department of Health and 
Human Services, Commission staff used data collected and published by 
Johns Hopkins University to help identify whether an application was 
from an area that was hardest hit by COVID-19.
    After prioritizing for review applications from the hardest hit 
areas, as directed by the Commission, staff reviewed those applications 
in depth. The Commission ``strongly encourage[d] selected applicants to 
target the funding they receive through the COVID-19 Telehealth Program 
to high-risk and vulnerable patients to the extent practicable,'' 
``recognize[d] that some healthcare providers may have been under pre-
existing strain,'' noted that ``treating other types of conditions or 
patient groups through the Commission's COVID-19 Telehealth Program 
could free up resources, . . . allow healthcare providers to remotely 
treat patients with other conditions who could risk contracting 
coronavirus by visiting a healthcare facility, and could reduce 
healthcare professionals' unnecessary exposure to coronavirus,'' and 
said that staff should ``consider as part of a healthcare provider's 
application a showing that telemedicine directly aids in the prevention 
of pandemic spread by facilitating social distancing and similar 
measures in the community,'' among other things. All of these factors 
were considered holistically with respect to any particular 
application.
    The Telehealth Program support will have a significant impact in 
fighting the ongoing pandemic. Altogether, the Commission was able to 
approve 539 applications of both small and large healthcare providers 
in almost every State in the country, including West Virginia. The 
Commission awarded more than $3 million in funding to healthcare 
providers in West Virginia, including the Wirt County Health Services 
Association in Elizabeth, the Lincoln County Primary Care Center in 
Hamlin, the West Virginia United Health System in Morgantown, the 
Monongalia County General Hospital in Morgantown, and the Charleston 
Area Medical Center in Charleston, which partners with rural hospitals 
throughout West Virginia. In order to ensure as many applicants as 
possible received available funding, the Commission did not award more 
than $1 million to any single application, and a wide variety of 
awards, including 116 (or more than 20 percent of the total awards) 
totaling less than $60,000, was approved. The Program received 
thousands of applications, and the Commission was unable to approve the 
majority of them before the funding was exhausted, even from applicants 
that were located in the hardest hit areas. I'm confident that the 
Program will prove its worth, both in the near and long terms.
                              6 ghz order
    Question 6a. As the Ranking Member on the Energy and Natural 
Resources Committee, I wanted to make sure I understand exactly the 
outreach the FCC conducted with the Department of Energy regarding the 
6 GHz proposal. Can you please describe the FCC's engagement with the 
Department of Energy with respect to the 6 GHz proposal?

    Answer. Perhaps most relevant to your inquiry is the June 27, 2019 
Technical Conference Regarding the Bulk-Power System that the Federal 
Energy Regulatory Commission (FERC) held at its facilities. The 
Commission sent senior-level staff from our Public Safety and Homeland 
Security Bureau to participate, along with all FERC commissioners and 
Department of Energy participants and attendees, such as Peter C. 
Balash, Ph.D., Senior Economist, United States Department of Energy's 
National Energy Technology Laboratory. As the 330-page transcript shows 
(https://cms.ferc.gov/sites/default/files/2020-05/20190809142302-
Transcript%2520-%2520062719ReliabilityTechnicalConference.pdf), the 6 
GHz matter received some attention during the program, but neither FERC 
nor the Department of Energy offered any testing information, 
engineering data, or spectrum expertise, but rather amplified the 
claims of its regulated businesses. The question of additional testing 
did come up during the program, and participants with spectrum 
expertise cautioned that there would be no novel data gleaned from such 
testing and it would delay the rulemaking for several years.
    The Department of Energy never followed up with any communications 
with the FCC until a letter offering assistance months later. If the 
Department or FERC had made a specific request based on the engineering 
data, or if the National Telecommunications and Information 
Administration had made an inquiry, the Commission would have engaged 
with those entities. And FERC and the Department of Energy never did 
submit material for the record that disputes or supports the 
engineering data submitted by the wide range of stakeholders.
    The 6 GHz review had been underway since a 2017 Notice of Inquiry, 
and all agencies had the opportunity during that time to raise issues 
such as testing concerns. The Commission's work was transparent and in 
compliance with our rules, and our rulemaking was widely known and 
discussed within the different stakeholder communities. The extensive 
data in the record has a sound engineering basis, and I do not believe 
secondary testing now that the record has closed is not warranted or 
necessary. If the Department decides to engage in the follow-up related 
to the multi-stakeholder group process, the agency is welcome to 
provide such input.

    6b. Did you discuss with DOE any technical analysis or the 
possibility to test unlicensed devices to ensure there was no 
interference to incumbent critical infrastructure, including energy 
companies and electric utilities? If not, why?

    Answer. The Department of Energy never submitted any material for 
the record. But electric utilities had substantial representation. The 
Commission's staff met with utility stakeholders and engaged in 
discussions on the various analyses submitted both by utility companies 
as well as unlicensed proponents. These analyses and studies submitted 
to the record were extensively analyzed by our engineering staff, and 
after much internal deliberation, the Commission adopted rules designed 
to provide flexibility for unlicensed devices to deploy while 
maximizing utilities' protection from harmful interference.

    6c. If there is interference caused by unlicensed devices, what is 
the plan to address that interference? To that end, if interference 
significantly impacts reliability, would you halt unlicensed devices or 
would you ask this subcommittee for resources to relocate incumbents? 
Doe the FCC have a counter plan in the event this happens? If so, 
please provide that plan.

    Answer. In the unlikely event there is a claim of actual harmful 
interference to an incumbent 6 GHz band user, the Commission has 
competent, experienced engineering field staff at its disposal to 
immediately address the allegations. In such instances, Commission 
engineers can be dispatched to locate sources of interference and take 
remedial actions to eliminate harmful interference.
    As requested by the Commission, the industry has also established a 
multi-stakeholder group initiated through a joint collaboration of 
Winnforum and the Wi-Fi Alliance. The initial organizational meeting of 
the multi-stakeholder group on July 31, 2020 included representatives 
from the public safety, utility, broadcasting, wireless Internet 
service provider, and manufacturing communities as well as other 
stakeholders. Among other things, it created a working group to deal 
with these kinds of situations. I anticipate that this group will 
develop processes and procedures that can be implemented by various 
stakeholders if any believes it is experiencing harmful interference.

                         CONCLUSION OF HEARINGS

    Senator Kennedy. The subcommittee stands in recess, subject 
to the call of the Chair.
    Thanks again, Ajit.
    [Whereupon, at 11:27 a.m., Tuesday, June 16, the hearings 
were concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]