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88–325 2015

OVERSIGHT OF THE FEDERAL COMMUNICATIONS 

COMMISSION 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMUNICATIONS AND 

TECHNOLOGY 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

DECEMBER 12, 2013 

Serial No. 113–109 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

RALPH M. HALL, Texas 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

BEN RAY LUJAN, New Mexico 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

(III) 

SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY

GREG WALDEN, Oregon 

Chairman 

ROBERT E. LATTA, Ohio 

Vice Chairman 

JOHN SHIMKUS, Illinois 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

MARSHA BLACKBURN, Tennessee 

STEVE SCALISE, Louisiana 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

JOE BARTON, Texas 

FRED UPTON, Michigan, ex officio 

ANNA G. ESHOO, California 

Ranking Member 

MICHAEL F. DOYLE, Pennsylvania 

DORIS O. MATSUI, California 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

BEN RAY LUJAN, New Mexico 

JOHN D. DINGELL, Michigan 

FRANK PALLONE, JR., NEW JERSEY

BOBBY L. RUSH, Illinois 

DIANA DEGETTE, Colorado 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

HENRY A. WAXMAN, California, ex officio 

(V) 

C O N T E N T S 

Page 

Hon. Greg Walden, a Representative in Congress from the State of Oregon, 

opening statement ................................................................................................ 1 

Prepared statement .......................................................................................... 3 

Hon. Anna G. Eshoo, a Representative in Congress from the State of California, opening statement .................................................................................... 5 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

opening statement ................................................................................................ 6 

Prepared statement .......................................................................................... 7 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 8 

WITNESSES

Tom Wheeler, Chairman, Federal Communications Commission ....................... 10 

Prepared statement .......................................................................................... 13 

Answers to submitted questions ...................................................................... 87 

Mignon Clyburn, Commissioner, Federal Communications Commission ........... 23 

Prepared statement .......................................................................................... 25 

Answers to submitted questions ...................................................................... 113 

Jessica Rosenworcel, Commissioner, Federal Communications Commission ..... 34 

Prepared statement .......................................................................................... 36 

Answers to submitted questions ...................................................................... 127 

Ajit Pai, Commissioner, Federal Communications Commission .......................... 38 

Prepared statement .......................................................................................... 40 

Answers to submitted questions ...................................................................... 138 

Michael O’Rielly, Commissioner, Federal Communications Commission ........... 52 

Prepared statement .......................................................................................... 53 

Answers to submitted questions ...................................................................... 151 

(1) 

OVERSIGHT OF THE FEDERAL 

COMMUNICATIONS COMMISSION 

THURSDAY, DECEMBER 12, 2013 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC. 

The subcommittee met, pursuant to call, at 10:10 a.m., in room 

2123 of the Rayburn House Office Building, Hon. Greg Walden 

(chairman of the subcommittee) presiding. 

Members present: Representatives Walden, Latta, Shimkus, 

Terry, Rogers, Blackburn, Lance, Guthrie, Gardner, Kinzinger, 

Long, Ellmers, Barton, Upton (ex officio), Eshoo, Matsui, Lujan, 

Dingell, DeGette, Matheson, and Waxman (ex officio). 

Staff present: Gary Andres, Staff Director; Ray Baum, Senior 

Policy Advisor/Director of Coalitions; Sean Bonyun, Communications Director; Matt Bravo, Professional Staff Member; Andy 

Duberstein, Deputy Press Secretary; Gene Fullano, Detailee, 

Telecom; Kelsey Guyselman, Counsel, Telecom; Grace Koh, Counsel, Telecom; David Redl, Counsel, Telecom; Charlotte Savercool, 

Legislative Coordinator; Tom Wilbur, Digital Media Advisor; Jessica Wilkerson, Staff Assistant; Shawn Chang, Democratic Chief 

Counsel for Communications and Technology Subcommittee; Margaret McCarthy, Democratic Professional Staff Member; Kara van 

Stralen, Democratic Policy Analyst; and Patrick Donovan, Democratic FCC Detailee. 

OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON 

Mr. WALDEN. I will call to order the subcommittee on Communications and Technology, and it is a delight to welcome all five 

members of the Federal Communications Commission, fully installed, and bright and shiny faces and ready to go today. We welcome you. And, Chairmen Wheeler and Commissioner O’Rielly, we 

especially welcome you and look forward to working with you to set 

the communications agenda for the United States. 

The Federal Communications Commission is the arm of our government tasked with fostering some of the most important parts of 

our national economy, and among them, the telecommunications industry, the video distribution industries, and the Internet. 

Given the economic significance of these industries, the changes 

from Congress—the charge from Congress to encourage competition, license our national spectrum assets, and facilitate technological advances, is one that must be discharged with transparency, 

2 

accountability, and a long view of the technological landscape. It is 

with this in mind that this subcommittee has worked over the last 

3 years on efforts to improve the Commission’s processes. As the 

subcommittee with jurisdiction over the Federal Communications 

Commission, we take this task very seriously and with great care 

to ensure the Commission not only remains a vital institution, but 

one that can serve as an example for other federal agencies of accountability and efficiency. A bipartisan majority of this subcommittee is deeply committed to this cause, and is proud to have 

reported out a bipartisan FCC process reform bill to the full House 

of Representatives yesterday. 

Chairman Wheeler, it is clear you want to improve the Agency. 

I have appreciated our conversations and your comments, and I 

would like to commend you for turning your attention to this task 

as one of your first roles as Chairman by asking one of your top 

advisors to review the FCC process, and submit recommendations 

for improvement by early 2014. 

While there are a number of large proceedings currently pending 

at the Commission, many of this we will talk about today, I am 

particularly concerned with returning the Commission to addressing some of its long-overdue responsibilities. For example, despite 

multiple unsuccessful trips to the Third Circuit Court of Appeals, 

the Commission’s responsibility to address the Media Ownership 

proceeding remains unfulfilled. Additionally, licensing, one of the 

original reasons for the creation of the Commission, has fallen woefully behind. Of particular note is the tragic pace of processing of 

applications in the Commission’s Media Bureau. 

Now, the AM Radio industry has been clamoring for the ability 

to use FM translators to give new life to that classic medium, and 

I certainly appreciate what Commissioner Pai has done taking on 

this issue, and it is very good work, and as a former licensee, I actually know firsthand the Commission has been in no rush to address translator applications. In fact, my own application sat unresolved at the Commission for 10 years. To put this in context, while 

the Commission considered my application, my wife and I actually 

sold our radio stations, our son went off and graduated from college, and every full-power television station in the country converted from analog to digital broadcasting. 

Look, the Commission can do better than that. The Commission 

should do better than that, and I am hopeful that our shared commitment will lead to improvement in that bureau. 

As the only one on the panel with the unique experience of having been a licensee of commercial broadcast, and still under your 

jurisdiction with my amateur radio license, which I am set to 

renew for March, and hopefully it will get approved within 10 

years, I would like to offer two pieces of advice for you as you move 

forward with your change. First, where Congress has spoken, I 

urge you to heed the words in statute, and reject calls to act in 

ways contrary to congressional intent. For example, in the Incentive Auction proceedings, some were calling on the Commission to 

exclude bidders from participating in the auction. Others still are 

calling for excessive guard bands in the attempt to end run requirements to license reclaim TV band spectrum. I am just saying both 

are bad ideas. 

3 

Second, I urge you to bear in mind that even seemingly small 

changes in your rules can have significant impact on the market. 

The Commission’s recent decision to apply yet incomplete rules to 

its UHF discount has effectively frozen many plans for broadcast 

mergers and acquisitions. The problem here isn’t that the Commission wants to update, or needs to update the UHF discount rule; 

the problem is that, absent a decision how and importantly when 

the Commission will move forward, it has pressed pause for an indefinite period of time. We all know that markets do not react favorably to this kind of open-ended uncertainty. 

On the other hand, I applaud the recent announcement on the 

schedule for the Spectrum Incentive Auctions. Both the broadcast 

and wireless industries are waiting with baited breath to see how 

the FCC addresses this first-of-a-kind auction, to say nothing of the 

public safety agencies that are counting on the auction fund to fund 

FirstNet. The certainty of a timetable is good for both stakeholders 

and for the Commission. 

Finally, turning to those large proceedings the Commission has 

on its plate. We are looking forward to working with you to tackle 

the tough issues like the IP transition, universal service reform 

and media ownership. Chairman Upton and I recently launched a 

large proceeding of our own; an initiative to update the Communications Act. Each of you brings a unique perspective to your work 

on the Commission; industry lobbyists, newspaper publisher, a couple of lawyers, even some former legislative Hill staffers. That experience combined with your expertise on the Federal Communications Commission staff and your own work on the Commission will 

be valuable in our efforts as we work together to update and modernize the Communications Act. 

So Congress—or, Chairman Wheeler, we wouldn’t want to demote you to the level of Congressman, Chairman Wheeler—yes, our 

numbers aren’t that great. Commissioner O’Rielly, we especially 

welcome you aboard the FCC. And Commissioners Clyburn, 

Rosenworcel, and Pai, welcome back, not only to the Commission, 

but before our committee. We thank you all for joining us today. 

We look forward to working together in this very critical sector of 

America’s economy to spur further innovation of technology growth 

and jobs. 

And with that, I will now yield to the ranking member of the 

subcommittee, my friend, Ms. Eshoo, from California. 

[The prepared statement of Mr. Walden follows:] 

PREPARED STATEMENT OF HON. GREG WALDEN

I am pleased to welcome the full complement of FCC Commissioners and its new 

chairman to our subcommittee today. Chairman Wheeler and Commissioner 

O’Rielly, we welcome you and look forward to working with you to set the communications agenda for our nation. 

The Federal Communications Commission is the arm of our government tasked 

with fostering some of the most important parts of our national economy. Among 

them, the telecommunications industry, the video distribution industries, and the 

Internet. Given the economic significance of these industries, the charge from Congress to encourage competition, license our national spectrum assets, and facilitate 

technological advances is one that must be discharged with transparency, accountability, and a long view of the technological landscape. 

It is with this in mind that this subcommittee has worked over the last 3 years 

to improve the commission’s process. As the subcommittee with jurisdiction over the 

4 

FCC, we take great care to ensure that the commission not only remains a vital 

institution, but one that can serve as an example for other federal agencies of accountability and efficiency. A bipartisan majority of this subcommittee is deeply 

committed to this cause and is proud to have reported a bipartisan FCC process reform bill to the full House yesterday. Chairman Wheeler, it’s clear you want to improve the agency, and I’d like to commend you for turning your attention to this 

task by assigning one of your top advisors to review FCC processes and submit recommendations for improvement by early January 2014. 

While there are a number of large proceedings currently pending at the commission, many of which we will talk about today, I am particularly concerned with returning the commission to addressing some of its long overdue responsibilities. For 

example, despite multiple unsuccessful trips to the Third Circuit Court of Appeals, 

the commission’s responsibility to address the media ownership proceeding remains 

unfulfilled. Additionally, licensing—one of the original reasons for the creation of 

the commission—has fallen woefully behind. Of particular note is the tragic pace of 

processing of applications in the commission’s Media Bureau. The AM radio industry has been clamoring for the ability to use FM translators to give new life to a 

classic medium. I appreciate Commissioner Pai’s good work in this regard. And, as 

a former licensee, I know first hand that the commission has been in no rush to 

address translator applications. My own application sat unresolved at the commission for ten years. To put this in context, while the commission considered my application my wife and I sold our stations, our son went off to and graduated college, 

and every full-power television station in the country converted from analog to digital broadcasting. The commission can and should do better and I am hopeful that 

our shared commitment will lead to improvement. 

As the only one on this panel with the unique experience of having been a licensee 

of the commission as well as a policymaker, I would like to offer two pieces of advice 

for you as you move forward with your charge. First, where Congress has spoken, 

I urge you to heed the words in statute and reject calls to act in ways contrary to 

congressional intent. For example, in the incentive auction proceeding some are calling on the commission to exclude bidders from participating in the auction. Others 

still are calling for excessive guard bands in an attempt to end-run requirements 

to license reclaimed TV band spectrum. Both are bad ideas. 

Second, I urge you to bear in mind that even seemingly small changes in your 

rules can have significant impact on the market. The commission’s recent decision 

to apply yet incomplete rules to its UHF discount has effectively frozen many plans 

for broadcast mergers and acquisitions. The problem here isn’t that the commission 

wants to update the UHF discount rule, the problem is that absent a decision how— 

and importantly, when—the commission will move forward, it has pressed pause for 

an indefinite period of time. We all know that markets do not react favorably to this 

kind of open-ended uncertainty. 

On the other hand, I applaud the recent announcement on the schedule for the 

spectrum incentive auctions. Both the broadcast and wireless industries are waiting 

with bated breath to see how the FCC address this first-of-its-kind auction, to say 

nothing of the public safety agencies that are counting on the auction to fund 

FirstNet. The certainty of a timetable is good for both stakeholders and the commission itself. 

Finally, turning to those large proceedings that the commission has on its plate, 

we are looking forward to working with you to tackle tough issues like the IP Transition, Universal Service Reform, and media ownership. Chairman Upton and I recently launched a large proceeding of our own—an initiative to update the Communications Act. Each of you brings a unique perspective to your work on the commission: industry lobbyist, newspaper publisher, a couple of lawyers, and even some 

former legislative staffers. That experience, combined with your expertise on the 

Federal Communications Commission itself will be valuable part of our efforts and 

we look forward to working together. 

Chairman Wheeler, Commissioner O’Rielly, welcome. Commissioners Clyburn, 

Rosenworcel, and Pai, welcome back. We thank you for joining us today and look 

forward to working together to foster this critical sector of the economy. 

5 

# # # 

OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Ms. ESHOO. Thank you, Mr. Chairman, for holding this hearing. 

It is wonderful to see a full Federal Communications Commission 

before us. Welcome to each one of you. A special welcome to the 

new Chairman. I think that you start out with 100 percent goodwill with everyone that is on this committee, I think our full committee, in fact, I think the Congress. 

There have been many months where we didn’t have a full Commission. I want to once again thank Commission Clyburn for her 

exceptional leadership during that period of time. Welcome to each 

one of the Commissioners, and, of course, to the newest Commissioner, Mike O’Rielly, who served on the other side of that table. 

When I first came to the committee, he was here when we began 

the Telecom Act, and now, guess what, you get to trudge through 

that all over again, according to the Chairman. So I guess there are 

some things that we just never finish with. 

As Chairman Wheeler announced last week, the Commission has 

made the upcoming Incentive Auction of broadcast television spectrum the top priority of the Commission, and I agree. This is a rare 

opportunity to auction beachfront spectrum under 1 gigahertz, and 

the FCC has to structure rules to promote a competitive wireless 

landscape, and ensure carriers of all sizes, both regional and national, have an opportunity to bid competitively for licensed spectrum, and it has to be done right. It is the first time in the history 

of the world that an auction has been structured this way, and I 

appreciate, Mr. Chairman, and all the Commissioners, your understanding the delicacy of this needing to be done right, well, and 

successfully. 

Similarly, recognizing the enormous economic and societal benefits of an unlicensed spectrum, which is tucked away in one corner 

of my Telecom heart, the FCC has an opportunity to structure a 

band plan that ensures a nationwide block of spectrum under 1 

gigahertz dedicated for unlicensed innovation. With unlicensed 

spectrum being a critical tool to bring broadband to unserved 

areas, including rural America, this opportunity really must be 

seized. 

In addition to the important role the FCC has in freeing up more 

spectrum for mobile broadband, I would like to highlight four 

issues that the Commission make a top priority in 2014, and I 

think you are going to. 

First, during the 3 months since I released draft legislation, the 

message from individuals, communications companies and consumer groups has been abundantly clear. Our video laws are in 

need of reform. They are broken. Independent of such legislation, 

the Commission does have an important responsibility to promote 

competition, consumer choice, and localism across the video marketplace. 

Second, I hope the Commission will continue its focus on modernizing the e-Write Program to support the 21st century digital needs 

6 

of our schools and libraries. In June, together with Commissioner 

Rosenworcel, we called for such an update, and I am pleased that 

the Whitehouse and the FCC agree with us and have made this 

issue a key priority. We have to stay on it. We have to move, and 

we have to make it much better. It has got to be a 21st century 

plan. 

Third, the Commission should uphold, I think, the goals of Section 629, and ensure a vibrant, competitive retail Set-Top Box market. The successor to the current cable card regime, whether by 

FCC rule or, more preferably, a voluntary industry agreement, will 

usher in a new generation of technologies that will give consumers 

greater choice and ensure that innovation flourishes. 

Finally, I am pleased that the Commission has made the transition to next-generation 911, as well as improving the indoor location accuracy of 911 calls a key priority. In fact, later today, it is 

my understanding that the Commission will vote on an Order to 

improve the reliability of 911, and I look forward to continued updates as the Commission proceeds with the implementation of Next 

Gen 911. 

Mr. Chairman, thank you for holding this morning’s hearing. I 

look forward to the important testimony of Chairman Wheeler and 

each of the Commissioners. Most importantly, I pledge to work 

with each of you to make America’s communications sector the 

most effective and the most admired in the world. 

And with that, I yield back. 

Mr. WALDEN. Gentlelady yields back. 

The Chair now recognizes the chairman of the full committee, 

Mr. Upton, from Michigan, I believe. 

Mr. UPTON. Great State of Michigan. 

Mr. WALDEN. Not Ohio. 

OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. UPTON. Thank you, Mr. Chairman. 

Now, today we welcome a fully-constituted FCC back to the Energy and Commerce Committee. The last time that we heard from 

the full Commission was in July of 2012. So the FCC has regulatory authority over a sector of our economy that is critical to innovation, jobs and our Nation’s global leadership in technology. The 

communications sector is also an integral part of our daily lives, 

connecting us to loved ones, alerting us to natural disasters, and 

entertaining and educating us every single day. 

As the regulatory agency of these industries, the FCC has the 

immensely-important task of promoting growth and competition. 

Our hearing today will examine actions that the FCC has taken 

since the last Commission last appeared and set expectations for 

the Agency’s future. As the oversight authority for the Commission, 

our committee works hard to ensure that the FCC functions for the 

benefit of American consumers as well as companies. And we also 

want to make sure that this Agency functions efficiently and transparently as all government agencies should. 

I am glad to say that this is not a partisan concern. Bipartisan 

majority on a voice vote of the full committee reported an FCC 

Process Reform Bill yesterday that will help the FCC operate more 

7 

openly and effectively, and we expect it to be on the House floor 

in the not-too-distant future. And the bill is needed. There are several stalled proceedings and ambiguous projects at the Commission 

that caused concern to me and other members of the committee. 

We have sent a number of letters in the past months regarding 

media ownership proceedings. Subcommittee Vice Chair Latta has 

gone to the extent of drafting a bill to end the Cable Set-Top Box 

Integration Ban, a bill that seems to make a lot of sense, and 

which perhaps the FCC should have considered doing a while ago. 

My concern and hope is that we can start a productive dialogue 

today with our esteemed witnesses on these and the many other 

important issues pending at the Commission. 

Commissioner O’Rielly, I would like to welcome you back to the 

Energy and Commerce Committee, a committee you know well, 

having once served here as staff. And, Chairman Wheeler, though 

you are from Ohio, this is often known as the Big House, now the 

Dingell Room. Hope you appreciate the green-and-white decor. 

And, yes, we were for Sparty. Welcome back. 

And I yield to other members—Republican members. 

[The prepared statement of Mr. Upton follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

Today we welcome a fully constituted FCC back to the Energy and Commerce 

Committee. The last time we heard from the full commission was July 2012. The 

FCC has regulatory authority over a sector of our economy that is critical to innovation, jobs, and our nation’s global leadership in technology. The communications sector is also an integral part of our daily lives, connecting us to loved ones, alerting 

us to natural disasters, and entertaining and educating us every day. As the regulatory agency of these industries, the Federal Communications Commission has the 

immensely important task of promoting growth and competition. 

Our hearing today will examine actions the FCC has taken since the commission 

last appeared and set expectations for the agency’s future. As the oversight authority for the commission, our committee works hard to ensure that the FCC functions 

to the benefit of American consumers and companies. We also want this agency to 

function efficiently and transparently, as all government agencies should. I’m glad 

to say that this is not a partisan concern—a bipartisan majority of the full committee reported an FCC Process Reform bill yesterday that will help the FCC operate more openly and effectively. 

And the bill is needed. There are several stalled proceedings and ambiguous 

projects at the commission that cause concern to me and other members of this committee. We have sent several letters in the past months regarding media ownership 

proceedings. Subcommittee Vice Chairman Latta has even gone to the extent of 

drafting a bill to end the cable set-top box integration ban, a bill that seems to make 

a lot of sense and which, perhaps the FCC should have considered doing a while 

ago. My sincere hope is to start a productive dialogue today with our esteemed witnesses on these and the many other important issues pending at the commission. 

Commissioner O’Rielly, I’d like to welcome you back to Energy and Commerce, a 

committee you know well, having once served on the staff here. Chairman Wheeler, 

we welcome you and look forward to working together during your tenure as chairman. 

# # # 

Mr. WALDEN. The Chairman now recognizes the vice chair on 

subcommittee communications, Mr. Latta, from Ohio, home of the 

Speaker of the House. More importantly, number two. 

Mr. LATTA. Thank you very much for yielding, Mr. Chairman, 

and thank you very much to our Commissioners for being with us 

8 

today, and welcome to our newest members of the Commission. I 

really appreciate having you here with us today. 

The communications and technology industry has been a consistent bright spot in the U.S. economy. It has created millions of 

American jobs, spurred significant investment and innovation, and 

most importantly, empowered consumers, who are the driving force 

behind robust competition in the communications marketplace. 

As U.S.-based businesses lead the world in technological advances, we have a responsibility to ensure the FCC fosters continued growth and development in the communications sector. This 

can be achieved by the FCC incorporating more transparency and 

accountability in its processes; operating within the bounds of the 

statutory authority; and acting upon legislation according to Congressional intent. 

I look forward to continuing working with Chairman Upton and 

the members of this committee, and also Congressman Green, on 

my bill, H.R. 3196, which is the legislation to eliminate the integration ban on Set-Top Boxes, and allow the marketplace to get to the 

next generation of innovation without the regulatory barriers being 

put in front of it. 

I look forward to the hearing and hearing the testimony today. 

And, Mr. Chairman, I yield back. 

Mr. WALDEN. Thank you. 

Chair recognizes the gentlelady from Tennessee, the vice chair of 

the full committee, for the remaining 40 seconds, if she wants. 

Mrs. BLACKBURN. And I thank the Chairman. I want to welcome 

all of our Commissioners, and publicly commend Commissioner 

Clyburn for the wonderful work that she did when she served as 

the Acting Chair. We appreciate that leadership. And, Chairman 

Wheeler, we look forward to having you continue and to work in 

a collaborative manner to find results for the private sector. We 

would hope that the Commission will be proactive, not get beyond 

its mission, but to stay focused on your core mission. Pay attention 

to economic analysis, look at cost-benefit analysis, and make certain that you don’t suffer mission creep, which is casting a shadow 

over the private sector. 

With that, I yield back. 

Mr. WALDEN. The gentlelady yields back. 

Chair recognizes the ranking member of the full committee, Mr. 

Waxman. 

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. WAXMAN. Thank you very much, Mr. Chairman. I want to 

welcome the members of the Commission, Chairman Wheeler and 

all the Commissioners, and I also want to join in commending 

Commissioner Clyburn for the incredible job she did as Acting 

Chairwoman from the industry agreement on interoperability, to 

long-overdue reforms on prison phone rates. Your brief chairmanship will be remembered for the remarkable amount you accomplished. 

Let me welcome Chairman Wheeler and Commissioner O’Rielly. 

I congratulate you on your appointment and confirmation, and we 

9 

are pleased to have you here. You join the FCC at a time when our 

country is undergoing dramatic and perhaps fundamental transformations in communications, networks and technologies, and the 

decisions you make at the Commission will no doubt have lasting 

impact on our nation’s communications landscape. 

At the top of the FCC agenda is the spectrum auctions authorized by the Public Safety and Spectrum Auction Act last year, and 

I am pleased to see that the FCC is moving ahead to conduct the 

H Block Auction in January, in addition to allocating new wireless 

spectrum to address our nation’s spectrum shortage. This auction 

will provide significant down-payment for the nationwide Interoperable Public Safety Network. 

I also support, Chairman Wheeler, your recently-announced 

timetable for the Incentive Auction. This auction has many layers 

of complexity, and I applaud your commitment to getting the technical issues right. 

Congress gave the FCC the tools to unleash the economic opportunities for both licensed and unlicensed spectrum, revolutionized 

public safety communications, ensure a vibrant and competitive 

wireless market, all the while protecting consumer access to free, 

over-the-air television. And I think the FCC must remain faithful 

to these goals as you implement the law. 

You also must bear in mind the principles undergirding the Communications Act as we consider the next evolution in our nation’s 

wireless networks. Our values do not change with each successive 

generation of technology. Whether the infrastructure is copper or 

fiber optics, the Commission’s charge is to protect and promote the 

longstanding goals of competition, universal access and consumer 

protection. 

Chairmen Upton and Walden recently called for a multi-year examination of possible updates to the Communications Act, and I 

welcome the opportunity for a bipartisan consideration of these 

issues, and I hope the Commission will be a partner in this endeavor. 

In 2010, the Commission and this committee spent many hours 

working to preserve the principle of an open Internet. That process 

led to a sensible set of rules governing the broadband market that 

was supported by a diverse group of stakeholders, and provided the 

foundation for the FCC’s Open Internet Order. I believe the Open 

Internet Order will be upheld in the court, but whatever the outcome, I will be looking to you to ensure that the Internet remains 

an open platform for innovation and economic growth. 

I want to, at this point, yield the balance of my time to my fellow 

Californian and good friend, Congresswoman Matsui. 

Ms. MATSUI. Thank you very much, Ranking Member Waxman, 

for yielding me time. It is wonderful to see the full complement of 

the Commission here today. I want to join in welcoming Chairman 

Wheeler and—who brings a wealth of knowledge and experience to 

the FCC, and I would also like to congratulate and welcome Commissioner O’Rielly, and I also would like to commend Commissioner Clyburn for her leadership during the interim period. Thank 

you very much. 

Mr. Chairman, the subcommittee is working diligently to find bipartisan solutions for smart and sound spectrum policy for our naVerDate Nov 24 2008 15:37 Jan 30, 2015 Jkt 037690 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-109 CHRIS
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tion. We work to create a path for DOD to reallocate the 7055 to 

7080 megahertz band. DOD and the broadcasters should be applauded for their leadership on a landmark sharing agreement. 

Moreover, I joined with Representative Guthrie to introduce H.R. 

3674, the Federal Spectrum Incentive Act, which passed this committee yesterday in a bipartisan manner. The bill is first of its kind 

that offers a fresh approach that would create a Federal Spectrum 

Incentive Auction. 

I look forward to working closely with my colleagues and the Administration in moving this bill to the floor. 

There are tough decisions ahead, and I want to encourage also 

the FCC to move it forward with the USF reform efforts. Modernizing the USF for broadband, particularly the Lifeline Program, 

will provide a path toward universal broadband adoption in this 

country. 

And with that, I yield back the balance of my time. 

Mr. WALDEN. The gentlelady yields back the balance of her time. 

All time has been consumed. We will now go to our witnesses, 

and again, we thank you very much for being here today, and the 

public service work you are all undertaking. 

And, Mr. Wheeler, as Chairman of the FCC, we are going to lead 

off with you. So pull that microphone close, turn on the button, and 

you are good to go, sir. 

STATEMENTS OF THE HONORABLE TOM WHEELER, CHAIRMAN, FEDERAL COMMUNICATIONS COMMISSION; THE HONORABLE MIGNON CLYBURN, COMMISSIONER, FEDERAL 

COMMUNICATIONS COMMISSION; THE HONORABLE JESSICA 

ROSENWORCEL, COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION; THE HONORABLE AJIT PAI, COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION; AND 

THE HONORABLE MICHAEL O’RIELLY, COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION 

STATEMENT OF TOM WHEELER 

Mr. WHEELER. Thank you very much, Mr. Chairman, Ms. Eshoo, 

other members of the committee. It is a privilege to be before you 

today, and a privilege to be joining my colleagues here, the full 

component of the Commission. I think we will make a great team, 

and I know that all of us are honored to be able to work with the 

quality men and women that make up the FCC. 

Today is my 39th day on the job, and I have enjoyed the informal 

discussions that I have been able to have with many of you in the 

interim. I look forward to today having even more complete discussions and to working with you afterwards. 

As I think everybody in their statements has indicated, we are 

in a very exciting time—in the midst of a great network revolution. 

The lesson of history is that revolutions like that come chock full 

of challenges, and we are going to have to work together on how 

we address those challenges. 

We have tended to look at those challenges through three prisms, 

if you will. First of all, how do we make sure that what policies we 

adopt promote economic growth and maintain national leadership? 

11 

Clearly, at the root of those are issues such as competition and 

maintaining the necessary assets, such as spectrum. 

The second prism is what we have begun to call ‘‘the network 

compact.’’ For a century, there has been a developed set of values 

that represent the relationship between those who operate networks and those who use networks. Those values must be preserved regardless of the type of the technology used in the network. 

And third is the goal that networks work for everyone. It is not 

just the delivery of broadband, but it is what broadband enables 

that is important. If we don’t have 21st century education capabilities, if we don’t make sure that Americans with disabilities have 

access to the capabilities of the new technology network, if we don’t 

make sure that the Tribal Americans have opportunities to use the 

new networks, then we have failed in our goal. 

So those three things—economic growth, the network compact 

and what networks enable—are the three pillars of policy, but at 

the heart of them is competition. It has become a joke, at least in 

my office that I keep saying competition, competition, competition, 

but that is very much what we believe. 

Let me do a quick look at the three areas where the Commission 

is keeping pace with innovation—that innovative economy. First is 

process reform. The committee’s bipartisan effort yesterday is significant and is noted and appreciated. On my second day, Mr. 

Chairman, as you noted, I began a process that will produce a report in 60 days. We are going to look at how to enhance accountability through deadlines and tracking systems; how to expedite 

the licensing process like you referenced, and how to shorten the 

processing time of applications for review. Commissioner Pai has 

an interesting idea in that regard, how to streamline consumer 

complaint collection and a searchable database, which Commissioner Rosenworcel has been a champion of, and how to attack the 

backlog, as Commissioner Clyburn did when she was Chairwoman. 

We also want to weed out outdated regulations and incorporate 

performance measures. 

The second focus is going to be, as you have all appropriately 

said, the spectrum auctions, especially the Incentive Auction. This 

committee, working with NTIA and DOD, has provided great leadership on the 1755 to 1780 MHz band, and we look forward to moving forward on that and moving that to auction. The Guthrie-Matsui Bill, which you all moved yesterday and has been referenced, 

takes the Incentive Auction idea and applies it to federal agencies, 

which is a great step forward. Speaking of incentives, we have the 

Incentive Auction coming up. We have established a schedule now. 

We are going to have policy recommendations in January; we are 

going to have consideration and discussion of that until spring 

when we will be making a decision; and we will have an auction 

in mid-2015. 

But while we are discussing spectrum and regulatory process, I 

would be remiss if I didn’t bring up an item we will be considering 

today—a proposal to ask for comments on a rule to reflect the realities of new onboard aircraft technology. There have been lots of 

misconceptions about that, and let me just see if I can address 

these right up front. One, we are proposing to consider to continue 

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works, but where there is new onboard technology that eliminates 

that potential for interference, then there is no need for an interference rule. This is the responsible thing to do. Where the rationale for a rule doesn’t exist, the rule shouldn’t exist. We are the expert technical agency, and new technology removes the technical 

justification of this rule. In that regard, I should mention that I 

have spoken with Transportation Secretary Fox this morning, and 

he has told me that, yes, the FCC is the technical agency, and that 

the Department of Transportation is the aviation agency, and that 

they will be moving on a rule to address voice calls on airplanes. 

I am the last person in the world who wants to listen to somebody 

talking while I fly across the country, but we are the technical 

agency, and we will make the technical rules that reflect the way 

the new technology works. 

Finally, item three, you have all talked about the IP transitions, 

I should say because it is not just one transition, it is a multifaceted process. At today’s meeting, we are going to hear a report 

from the Technology Transitions Policy Taskforce, which will lay 

out a schedule including a plan for a January order that will invite 

experiments in the field, real-life experiments, recommend data collection, and create a framework for policy decisions. 

So we have a full agenda, as you have all said. It is a privilege 

to be here, to be able to work with all of you, and I look forward 

to doing that in the time coming. 

[The prepared statement of Mr. Wheeler follows:] 

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Mr. WALDEN. Chairman Wheeler, thank you for your public service, and thank you for recognizing our concerns on the subcommittee and full committee. 

And now we will switch to, I guess once a Chairman, always a 

Chairman, right? Highest title. Former Chairwoman Clyburn. We 

are delighted to have you back before the committee. Thanks for 

your work publicly and please go ahead with your opening statement. 

STATEMENT MIGNON CLYBURN 

Ms. CLYBURN. Thank you, Chairman Walden, Ranking Member 

Eshoo and members of the committee. Thank you again for allowing me to appear before you today. 

Since our last visit, I have had an incredible opportunity to serve 

as Acting Chair, and I am glad to note that with the support of my 

colleagues and the assistance of a skilled and dedicated staff, we 

were able to move a number of important items which clearly advanced the public interest. 

This hearing comes at a critical stage in our communications policy continuum. We are experiencing tremendous technological 

change that affects every aspect of our lives. And as we look ahead 

to the challenges of tomorrow, I believe it is important to understand the terrain over which we have traveled. We have reached 

a voluntary interoperability industry solution and the lower 700 

megahertz ban to address an issue that, for years, had been impeding the deployment of valuable spectrum. We launched a proceeding to modernize the FCC’s schools and libraries program, 

known E-Rate, to ensure that our children have the resources and 

connectivity they need to support digital learning and become the 

leaders of tomorrow. We adopted an Order to address rule call completion because it is unacceptable in today’s world that calls to nonurban areas are not being completed. We adopted an Order to reform inmate calling services to finally provide relief to millions of 

families who have been paying unreasonably-high rates to stay connected with loved ones. We enabled the H Block Spectrum Auction, 

and the AWS–3 Proposal to take major steps forward on government and commercial spectrum sharing, and we have made ongoing reforms to Lifeline, and proposed significant forfeitures to companies not following the FCC’s rules. 

With Chairman Wheeler and my fellow Commissioners, I look 

forward to building on the progress we have made. As Chairman 

Wheeler has made clear, the voluntary incentive auction proceeding continues to be a top Commission priority. For those broadcast television licensees who want to continue to use their spectrum, the Act mandates that the Commission make all reasonable 

efforts to preserve the coverage area and population served. The 

Act also has clear directives for the proceeds from the Forward 

Auction, which includes much-earned contributions to the Public 

Safety Trust Fund and the national deficit. 

Congress also gave the Commission authority to propose a ban 

plan with an appropriate balance of unlicensed and licensed spectrum. Unlicensed spectrum plays a critical role in advancing more 

efficient use of spectrum, and commercial wireless carriers are increasingly using unlicensed Wi-Fi services to offload their 

24 

smartphone traffic. In addition to spectrum, Chairman Wheeler has 

also announced that the Commission will consider an Order next 

month to launch trials regarding the ongoing technology transitions. 

I do believe that trials, instructed properly, can produce helpful 

insights into how best to approach reform, and I will be keeping 

a keen eye on how the trials and future reforms affect all consumers. Process reform is where we have an opportunity to develop 

an even more efficient Agency. 

Yesterday, the committee passed a Federal Communications 

Commission Process Reform Act of 2013. I am pleased that the proposed modifications to The Sunshine Act would facilitate federal 

commissioners’ participation on the Federal State Joint Boards and 

the Joint Conference. 

I would also encourage you to review the Paperwork Reduction 

Act and how it can be improved. For example, the FCC is using its 

Web site to better inform consumers and industry, yet, to obtain 

voluntary feedback on our Web site, the PRA requires OMB approval. As a result, the Commission cannot be as responsive to 

users without engaging in a lengthy OMB approval process. 

So as you can see, Mr. Chairman, and distinguished members of 

the committee, we have both challenges and opportunities ahead. 

I look forward to working with each of you to address our evolving 

communications landscape. 

I appreciate your attention this morning, and would be glad to 

answers any questions you may have. 

[The prepared statement of Ms. Clyburn follows:] 

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Mr. WALDEN. Thank you for your work, your testimony, your recommendations. 

And we will now go to Commissioner Rosenworcel. Thank you for 

being here this morning. We are delighted to have you back, and 

please go ahead. 

STATEMENT OF JESSICA ROSENWORCEL 

Ms. ROSENWORCEL. It is good to be back. 

Good morning, Chairman Walden, Ranking Member Eshoo, and 

members of the subcommittee. It is an honor to appear before you 

today in the company of my colleagues, new and old, at the FCC. 

By some measures, communications technologies account for as 

much as 1⁄6 of our economy. No wonder. These are the networks 

that carry all aspects of our modern, commercial and civic life. 

They are changing at a breathtaking pace. Keeping up requires 

taking a fresh look at our policies. Informed by the policies of the 

past, we have to think boldly about the future. 

Now, in the weeks ahead we will do this as we wrestle with the 

upcoming transition to Internet protocol, and think about Spectrum 

Auctions, including Incentive Auctions, but I think we make a mistake if we focus only on networks themselves. After all, there is 

great beauty and power in what we can do with them. 

Our new networks can change the ways we connect, create and 

conduct commerce. They can change the ways we learn and seek 

security. So in my brief time before you today, this is what I want 

to talk about; how the broadband beneath us and the airwaves all 

around us can improve education and improve public safety. 

First, I want to talk about the E-Rate Program. E-Rate helps 

connect schools and libraries across the country to the Internet. It 

is a byproduct of the Telecommunications Act of 1996. Remember 

1996? Probably everyone in this room called the Internet the Information Super Highway. It was a long time ago. 

In 1996, only 14 percent of public schools were connected to the 

Internet. Today, thanks to the E-Rate, that number is north of 95 

percent, which sounds good. It sounds like the job is done, but 

nothing could be further from the truth, because the challenge 

today is not connection, it is capacity. Too many of our E-Rate 

schools access the Internet at speeds as low as 3 megabits. That 

is too slow for high-definition video, it is not fast enough for the 

most innovative teaching tools, and it is definitely not fast enough 

to prepare the next generation with the STEM skills that are so 

essential to compete. 

Contrast this with efforts underway in some of our world neighbors. In South Korea, 100 percent of schools are connected to highspeed broadband, and all schools are converting to digital textbooks 

by 2016. Ireland will have all schools connected to 100 megabits 

next year. Finland will have all schools connected to 100 megabits 

the year after that. Meanwhile, in both Turkey and Thailand, the 

government is seeking a vendor to supply tablet computers to millions of students for a new era of broadband-enabled digital learning. 

Now, we can wait and see where the status quo takes us and let 

other nations lead the way, or we can choose a future where all 

American students have the access to the broadband they need to 

35 

compete, no matter who they are, where they live or where they 

go to school. I think it is time to compete. I think it is time for ERate 2.0. The FCC has a rulemaking proceeding underway to 

reboot and recharge the E-Rate Program. I think we need to make 

it a high priority. I think we need to find ways to bring 100 megabits to all schools in the near-term, and 1 gigabit to all schools in 

the long-term. While we are at it, we must find ways to reduce the 

bureaucracy of this program, and make it easier for small and 

rural schools to participate. 

Second, I want to talk about a number all of us know by heart 

but none of us ever hopes to use. I want to talk about 911. 

In my time at the FCC, I have visited 911 call centers all across 

the country. I am always struck by the steely calm of those who 

answer the phones and help ensure that help is on the way. I am 

also struck by how many emergency calls now come in from wireless phones. In fact, nationwide, more than 70 percent of calls 

made to 911 are made from wireless phones. That is more than 

400,000 calls per day. 

Now, if you use your wireless phone to call 911 from outdoors, 

your location is reported, sometimes to within 50 meters, under 

FCC location accuracy standards. But if you use your wireless 

phone to call 911 from indoors, you had better cross your fingers 

because no FCC location accuracy standards apply. I think this is 

an unacceptable gap in public safety communications. It deserves 

your attention and ours, because no matter where you are when 

you call 911, you want first responders to find you. 

Moreover, as our networks evolve and the ways we use them 

change, we must make sure our public safety policies keep pace. In 

fact, our approaches to networks, both wired and wireless, need to 

evolve as markets evolve, but in our efforts, we must not lose sight 

of why networks matter because they can do more than connect us, 

they can strengthen, education and enhance our security, and, of 

course, grow our economy in new and exciting ways. 

Thank you. I look forward to answering any questions you might 

have. 

[The prepared statement of Ms. Rosenworcel follows:] 

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Mr. WALDEN. Ms. Rosenworcel, thank you for your work and 

your testimony and your suggestions. 

We go now to Commissioner Pai. Thank you for being here, and 

thank you for all the work you have been doing, and please go 

ahead with your opening statement. 

STATEMENT OF AJIT PAI 

Mr. PAI. Thank you, Mr. Chairman. Chairman Walden, Ranking 

Member Eshoo, Members of the Subcommittee. Thank you for holding this hearing. 

It has been exactly one year since I last appeared before you, and 

much has happened in the time since. Most notably, we have lost 

two colleagues, and we have gained two new ones. Chairman 

Wheeler and Commissioner O’Rielly have gotten off to strong 

starts, and I am pleased that we are finally back at full strength. 

Over the past year, we have made progress in a number of different areas, but there is much more to be done. This morning, I 

will touch on two of the issues that I find most pressing: the Incentive Auction and E-Rate reform. A fuller list of FCC priorities, from 

cable forbearance to AM radio, is detailed in my written testimony. 

First, the Incentive Auction. Perhaps the most daunting challenge the Commission faces is the looming spectrum crunch. To 

meet this challenge, we are focused on implementing the responsibilities that Congress gave us in the Spectrum Act, especially 

with respect to the Broadcast Incentive Auction. 

The Incentive Auction is the Commission’s best chance to push 

a large amount of spectrum, well suited for mobile broadband, into 

the commercial marketplace. I support Chairman Wheeler’s recent 

announcement, setting the middle of 2015 as our new target. It is 

more important to get the Incentive Auction done right than it is 

to get it done right now. If, for example, any part of our software 

were to fail during the Incentive Auction, like another government 

Web site that shall not be named, the Commission, by law, would 

not get a second bite at the apple. 

My greatest worry about the Incentive Auction, however, is not 

with technology; it is about participation. In order for the Incentive 

Auction to be successful, we will need robust participation by both 

broadcasters and wireless carriers. So the Commission must avoid 

choices that will deter participation in both the Reverse Auction 

and the Forward Auction. 

For the Reverse Auction, prices paid to broadcasters should be 

determined by the market, not set by administrative fiat. Any attempt to restrict payments to broadcasters, including a complicated 

scoring scheme, will deter broadcasters’ participation and risk causing the Incentive Auction to fail. 

For the Forward Auction, the Commission should not limit carriers’ ability to participate, such as by setting a spectrum cap or 

narrowing the spectrum screen. This would result in less spectrum 

for mobile broadband, less revenue to fund national priorities that 

this Committee has identified, and a greater chance for a failed 

auction. 

Another issue that will impact participation in the Forward Auction is the size of the geographic licenses to be offered. Our NPRM 

proposed using Economic Areas, but some argue that this would 

39 

make it too difficult for smaller carriers to participate in the auction. Our goal should be to allow as many carriers as possible to 

bid, whether they be nationwide, regional, or rural. So I am 

pleased to see alternative proposals for license sizes, such as the 

newly-coined ‘‘Partial Economic Areas.’’ If technically feasible, 

these proposals deserve serious consideration. 

Aside from the Incentive Auction, there are many other opportunities when it comes to spectrum, from the H Block Auction next 

month to the possible clearing of AWS–3 to greater unlicensed use 

in the 5 gigahertz band. Consistent with my all-of-the-above approach, I hope we seize all of these opportunities in the near-term. 

The second issue I will discuss is the Universal Service Fund’s 

Schools and Libraries Program, better known as E-Rate. 

In many ways, E-Rate has been a success, as my colleague has 

pointed out. But it also has had difficulties. The funding process 

can stretch for years. Many schools and libraries feel compelled to 

hire outside consultants to handle all the complexities. Others don’t 

bother applying at all. Services like paging are prioritized over 

services like connecting classrooms, and there is no meaningful 

transparency into either the amount or the impact of E-Rate spending. 

To solve these problems, I proposed a Student-Centered E-Rate 

Program. This means an upfront allocation of funding and a matching requirement so that applicants know how much money they 

can spend, and have greater incentives to spend that money wisely. 

This means simplifying the application process. This means targeting funding and next-generation technologies, while still letting 

local schools set their own priorities. And this means making all 

funding and spending decisions accessible on a central Web site 

that everyone can see. 

In its first year, a student-centered approach would provide an 

extra $1 billion for next-generation services, all without collecting 

an extra dime from the American people. Accordingly, I believe it 

would be premature to increase the program’s budget. And under 

no circumstances should we do so without finding corresponding 

savings in other parts of the Universal Service Fund. We cannot 

ask Americans to pay even more in their monthly phone bills, especially when median household income in this country is now lower 

than it was in 2007. 

Thank you once again to Chairman Walden and Ranking Member Eshoo for holding this hearing. I look forward to answering 

your questions, and to continuing to work with you and my colleagues in the months to come. 

[The prepared statement of Mr. Pai follows:] 

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Mr. WALDEN. Thank you, Commissioner Pai. We appreciate your 

thoughtful testimony and your recommendations. 

We will now go to Commissioner O’Rielly. Welcome aboard the 

Federal Communications Commission. Welcome back before this 

committee. And you know how the rules work, so please go ahead, 

and again, thank you for being here today. 

STATEMENT OF MICHAEL O’RIELLY 

Mr. O’RIELLY. Thank you to the Chairman and ranking member, 

and members of the subcommittee. 

In respect of the time of the subcommittee members, I would like 

to make five points and then move on to answer your questions. 

Point 1. I am truly honored to be before the subcommittee. I had 

the pleasure of working in front of the full committee staff for 8 

years, and it was one of the greatest jobs I will ever have. The 

breadth of knowledge and command of the diverse policy issues by 

the members of this committee are of the highest quality. 

Point 2. The FCC is an independent agency, not part of the Executive Branch. It was created by Congress and serves to implement 

the statutes enacted by Congress. I firmly believe that our role is 

to follow the statute as written, and not substitute our thoughts for 

your work. The Commission has no right or authority to ignore the 

statute or statutory deadlines. Thankfully, I have worked on most 

communications policy statutes over the last 20 years, and have 

firsthand knowledge of the intent behind many key provisions. 

Point 3. The Commission has difficult but exciting work ahead. 

If done correctly, it can have a significant positive impact on U.S. 

gross domestic product and on national productivity. Our communications companies are extremely important to the U.S. economy, 

and we must allow them to flourish in the world marketplace. The 

Commission’s overall focus, however, must remain on the consumer. 

Point 4. In terms of specific items, my particular focus and attention will be on the immediate work before the Commission. In the 

big picture, the FCC must finish rules for the Incentive Auctions, 

continue USF reform, proceed with the IP transition trials, and 

complete our media ownership proceeding. 

Point 5. Part of the role of the Commission is to conduct outreach 

and provide information to the public. I take this function seriously, and it is why I am choosing to spend some time on the issue 

of distracted driving caused by wireless device users. Drivers need 

to put away their wireless phones and focus their ‘‘eyes on the 

drive.’’ Let me be clear. My view is the wireless industry is doing 

yeoman’s work to get out the message. They are aware of the problem, they are dedicating considerable resources to finding solutions 

and education, and they are working hard to prevent the horrible 

tragedies caused by texting, viewing, emailing, tweeting, mapping, 

posting, among others, while driving. It does not appear that more 

government regulation will be helpful in this space. Instead, I am 

talking to my colleagues to find ways to use our voice in non-regulatory, non-costly ways to educate the public and prevent senseless 

accidents. 

Thank you. 

[The prepared statement of Mr. O’Rielly follows:] 

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Mr. WALDEN. You win the prize. Two minutes and 37 seconds return. No, we want to thank you all—— 

Mr. O’RIELLY. I’m familiar with this committee very well. 

Mr. WALDEN. Yes, that is right. Yes indeed. Some will learn 

along the way. We appreciate all your testimony and your recommendations, and it is just good to have all five Commissioners 

in place, or four Commissioners and Chair in place. As Commissioner Pai said, it has been a year to the day, I think, since we had 

the Commissioners here, so welcome aboard. 

I know we all have a lot of questions. I am going to—I have 

learned at the heels of the former Chairman, Mr. Dingell, about 

trying to get answers at a relatively rapid rate, so I am going to 

try and pose some of these, not as skillfully as he does, in a yesor-no format, but the extent to which you can address them rapidly, and that would be good. 

And I want to start, Mr. Wheeler, with you as Chairman. I know 

you all are voting on this NPRM today. I do want to stress, it 

would be helpful if the public got to see that. As far as I know, you 

and your staff are the only ones who see it in advance. That is one 

of the process issues I hope you will break through, and this maybe 

will be the last NPRM that is not public first. But the Commission—I want to follow up and figure out how you are going to permit, as your testimony indicates, airlines to choose whether to 

allow voice calls, and here is why I ask it. Is the Commission planning to waive either the common carrier obligation to complete 

calls, or the net neutrality rules on blocking VoIP packets? Both 

would seem to be necessary in order to prevent voice calling from 

aircraft. 

Mr. WHEELER. So thank you, Mr. Chairman. 

So first to your point that the NPRM that we are considering 

today will be complete in listing the rule—the words of the rule—— 

Mr. WALDEN. Right. 

Mr. WHEELER [continuing]. That we are considering. In light of 

the philosophy that—— 

Mr. WALDEN. Right. 

Mr. WHEELER [continuing]. You and I share, which is let us get 

it out there so people can see it. 

Mr. WALDEN. Right. 

Mr. WHEELER. The purpose of this is to do just that; to put the 

language out so people can see it and give us their comments on 

it. 

Now, to your specific question, the Open Internet Order specifically provides what is called the premises exemption, and that 

means that coffee shops, bookstores, and airlines mentioned by 

name, are exempted from the Order in that, under the definition 

of reasonable network management, which is one of the tools that 

are allowed for premises owners, which include airlines, there is 

the ability to pick and choose exactly what comes over. 

Mr. WALDEN. All right. We will follow up more on the other piece 

that you might have to deal with as well. 

I want to ask you about Title II. You have a—you haven’t, but 

there has been a proceeding open at the Commission for a long 

time that would—the reclassification docket. Are you planning to 

keep that open or are you planning to close it? 

59 

Mr. WHEELER. So I think we are in a situation right now where 

we are waiting for a court opinion on exactly what our authorities 

are on a broad sense, and that there is no rush between now and 

then to make a decision on Title II. I will note, however, that, as 

you mentioned, this docket has been open for a long time, and it 

has not had the threatened chilling effect that some had worried 

about on investment in wireless and broadband infrastructure. 

This is an issue that clearly is going to have to be dealt with—— 

Mr. WALDEN. Right. 

Mr. WHEELER [continuing]. And we will start with the court decision. 

Mr. WALDEN. Sorry, I have about three more questions I want 

to try and get in here. 

We understand the FCC has launched a study, a multimarket 

study, of critical information needs. Apparently the study includes 

a qualitative media analysis which would require interviewing reporters and editors to figure out how the media decide what news 

stories to run. Are these the kinds of questions that government 

entities should be asking of the news media? And with somebody 

with a journalism degree, I do get a little chill up my spine thinking about the government asking how these decisions are made. 

Doesn’t it have an effect on the media that the regulatory body is 

even asking these questions, and how does it help you fulfill your 

Section 257 mandate fund which is predicated? 

Mr. WHEELER. So I think this goes back to the root of the discussion you and I were having a moment ago about making sure that 

the public understands what is going on. The 257 requirement 

mandates lowering barriers to access to media for minorities, 

women, small business and other identified groups. 

In order to make that kind of a judgment, you have to have facts. 

In order to have facts, you do studies. And what we did was, there 

is a study that has been proposed by a consulting firm that we 

were working with, and we put that out for public notice to exactly 

get the kind of input—— 

Mr. WALDEN. All right. 

Mr. WHEELER [continuing]. That you are suggesting—— 

Mr. WALDEN. All right, I—— 

Mr. WHEELER [continuing]. But it is not, and this is not an effort 

to influence the media. 

Mr. WALDEN. Well, I am going to interrupt you just a second because when you are spending somewhere between $209,918, and 

some of the questions of the media personnel include what is the 

news philosophy of the station, who decides what stories are covered, what are the demographics of news management staff, have 

you ever suggested coverage of what you consider to be a story with 

critical information or consider its use, what was the reason given 

for the decision, these seem like really internal journalistic issues. 

Now, I need to move on to one other because I am actually over, 

but it is a very important question. The quantile regression analysis, QRA, approach to provide universal support for world companies, that was part of the Commission’s USF reform efforts, has 

had a negative impact, negative impact, on investment and the deployment of broadband services in rural America. Commissioner 

Pai, you have been an advocate for the need to address this probVerDate Nov 24 2008 15:37 Jan 30, 2015 Jkt 037690 PO 00000 Frm 00065 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-109 CHRIS
60 

lem, to ensure that rural Americans are not left behind. What do 

you recommend, Commissioner Pai, needs to be done with regard 

to the application of the QRA? 

Mr. PAI. Well, thank you for the question, Mr. Chairman. 

I have seen the problems on paper. The Obama Administration’s 

Department of Agriculture, for example, reported earlier this year 

that some 37 percent of funds from RUS are sitting on the table 

because there is so much uncertainty among rural carriers. And I 

have seen it in person from my home state of Kansas to carriers 

in rural Alaska. Because they are uncertain about what the future 

portends, because of the QRA, they are not making additional investments in terms of broadband, and that creates a digital divide 

that we won’t be able to bridge. 

Mr. WALDEN. So, Chairman Wheeler, if I might, given the negative impact of the QRA that it is having on broadband development, especially in rural America, do you intend to reconsider its 

application? 

Mr. WHEELER. Yes. As a matter of fact, I have asked the Bureau 

to draft an Order that I could share with my colleagues to eliminate the QRA and to return to the high-cost loop support model. 

Mr. WALDEN. I appreciate that. I have got other issues obviously 

with the FM translators for AM, and delay in the rulemaking, dealing with cable operators and the groups utilized by them, and so 

maybe we can follow up afterwards, but the committee has been 

kind to let me overextend my questioning, but we are usually fairly 

flexible on that here. 

So I will now turn it over to the ranking member from California, 

Ms. Eshoo. 

Ms. ESHOO. That is great. So I have 7 minutes, right, Mr. Chairman? 

Mr. Chairman, you said that it is your 39th day. What I would 

like to add to that is that I think your adult lifetime of work has 

brought you to this. So it is not just really the 39th day—— 

Mr. WHEELER. It has been a long lifetime I think. 

Ms. ESHOO [continuing]. It is a wonderful path that has prepared 

you for this position. 

I have a whole list of niche issues, which is really the way we 

deal with all of these things. 

First of all, do you think you are going to get a deal on cell phone 

unlocking by the end of this year? 

Mr. WHEELER. We will be presenting to the Commission today, 

the voluntary agreement that has been reached with the wireless 

industry. And so the answer to your question is strongly yes. 

Ms. ESHOO. That is just terrific. My second question to you, Mr. 

Chairman, is last week, as you know, I joined with my colleagues, 

Representatives Doyle and Matsui, to ask you to take action to prevent AT&T from implementing a significant rate hike for their special access customers. I appreciate what you have done in terms of 

the suspension, but I think that there is much more than needs to 

be done on special access reform. 

Can we expect further action on special—— 

Mr. WHEELER. I—— 

Ms. ESHOO [continuing]. Access reform? 

61 

Mr. WHEELER. I apologize, Ms. Eshoo, but I am currently recused 

from that—— 

Ms. ESHOO. OK. 

Mr. WHEELER [continuing]. Proceeding, and so—— 

Ms. ESHOO. I see. So how will it happen? 

Mr. WHEELER. It moves ahead with the other members of the 

Commission. 

Ms. ESHOO. I see. Well, I am just going to assume that they are 

going to—that this area is going to be examined because we really 

have to have reasonable rates for this important service. 

Commissioner Rosenworcel, thank you for your testimony. I love 

the way you present things. It is so clear. You can feel the sense 

of urgency and why it is urgent. 

How are you going to pursue getting this done at the Commission? The whole issue of E-Rate, everything that is attached to it, 

you have presented an eloquent case, and I think that you gave a 

fantastic speech last week on 911 and the problems that we have 

between indoor and outdoor. So on both that and the E-Rate, 

maybe I should be asking the Chairman what he plans to do on 

E-Rate. I know what you want to do, but maybe we should just 

switch over to Chairman Wheeler. 

Mr. WHEELER. Well, I think on E-Rate, that there is a leader in 

this Commission, and that Commissioner—— 

Ms. ESHOO. We only need five. 

Mr. WHEELER. What? 

Ms. ESHOO. We only need five. 

Mr. WHEELER. I would like to associate myself with the remarks 

of—— 

Ms. ESHOO. Good. Good. 

Mr. WHEELER [continuing]. Ms. Rosenworcel. 

Ms. ESHOO. Well, we will look forward to you joining her in that 

effort, and maybe the next time the Commission comes before us, 

you can tell us the steps that you are going to take. 

Mr. WHEELER. We are going to put out a schedule, just like we 

have for the Incentive Auction and the IP transition, to address 

this issue. 

Ms. ESHOO. That is terrific. On the challenge of the indoor versus 

outdoor and wireless and 911, what is your plan to address this? 

Ms. ROSENWORCEL. Well, as the old saying goes, you may only 

make one 911 call in your life, but it will be the most important 

call—— 

Ms. ESHOO. Right. 

Ms. ROSENWORCEL [continuing]. You will ever make. 

Ms. ESHOO. Yes. 

Ms. ROSENWORCEL. And right now, if you make that call from 

your wire line phone, your first responder knows exactly where you 

are. 

Ms. ESHOO. Right. 

Ms. ROSENWORCEL. If you make that call outdoors, in a field, 

using your wireless phone, we have location accuracy standards so 

that first responder—— 

Ms. ESHOO. Well, I am asking—— 

Ms. ROSENWORCEL [continuing]. Can find you. 

62 

Ms. ESHOO [continuing]. What you want to do about where the 

challenge lies. 

Ms. ROSENWORCEL. So—— 

Ms. ESHOO. We know what is working. 

Ms. ROSENWORCEL [continuing]. Indoors—— 

Ms. ESHOO. Yes. 

Ms. ROSENWORCEL [continuing]. Is the problem. We have no 

standards. And increasingly, household are cutting the cord. More 

than 1⁄3 of households rely exclusively on their wireless phones. So 

I don’t think it is acceptable that when people make emergency 

calls, first responders can’t find them. 

Ms. ESHOO. Yes. 

Ms. ROSENWORCEL. I have recommended in that speech that you 

mentioned that we start a rulemaking to address this, because we 

have heard both from carriers—— 

Ms. ESHOO. Yes. 

Ms. ROSENWORCEL [continuing]. And from public safety officials 

on the frontline that this is an issue that—— 

Ms. ESHOO. Well, good for you for identifying this and taking it 

up, because I think one of the things that I taught my children 

from their earliest memory was 911, and putting their little fingers 

on the keypad so that they would understand that, and I think—— 

Ms. ROSENWORCEL. Me too. 

Ms. ESHOO [continuing]. You are absolutely right. Commissioner 

Pai, you made a wonderful comment, something about not one 

dime more on phone bills. I want to raise something with the 

Chairman, going back to it, about below-the-line fees. Representatives Doyle, Lujan, Matheson, myself, we wrote to our Nation’s 

leading wireless and wire line providers and we asked them about 

their practice of applying below-the-line fees on monthly bills. I 

agree with Commissioner Pai. That is why we wrote. We have a 

concern about what people are paying. These things are hidden. 

They think that they are—they think everything on their bill is a 

tax. And I have to tell you, I brought my bills in. I couldn’t tell 

what the heck they were. Who was doing what to whom and what 

it was for. So tell me what you think the Agency, or if you have— 

I know there is a long list of big challenges, but these are still important issues for consumers. What steps can the Agency take 

under existing statute to ensure that consumers know exactly how 

much they are paying each month, especially prior to signing up 

for their service, and this whole issue of below-the-line fees? 

Mr. WHEELER. Yes. Ms. Eshoo, this is a very legitimate concern. 

The specific one I believe you are referencing is a re-transmission 

consent—— 

Ms. ESHOO. That too. 

Mr. WHEELER [continuing]. The charge—— 

Ms. ESHOO. Yes. 

Mr. WHEELER [continuing]. That cable operators have just begun 

putting on—— 

Ms. ESHOO. Right. 

Mr. WHEELER [continuing]. The bill. 

Ms. ESHOO. Right. 

Mr. WHEELER. And I say just begun, and I am trying to get our 

arms around that and figure out just exactly what our authorities 

63 

are to answer your question. It does, however, strike me that it fits 

right in, the broader issue that the Chairman and Mr. Upton and 

others have talked about in terms of the kinds of issues that need 

to be addressed in a Telecom Act rewrite here, is just what is going 

on. If they are—— 

Ms. ESHOO. Yes, but that will be like 7 years from now. 

Mr. WHEELER. Well, no, but I—— 

Mr. WALDEN. Oh, no. 

Ms. ESHOO. Well, yes. 

Mr. WHEELER. I won’t speak—— 

Ms. ESHOO. Let us see. 

Mr. WALDEN. I won’t get crosswise between you and the Chairman. 

Ms. ESHOO. OK. Yes, no. Thank you. Thank you, Mr. Chairman, 

and thank you Chairman Walden. 

Mr. WHEELER. Thank you. 

Ms. ESHOO. And thank you to the entire Commission. I want to 

say also a welcome to the whole new team that has come in, and 

we wish you well, we really do. And the Chairman and the Commission will operate at a higher level because of the high level of 

people that have come in to support the work. So congratulations 

to each one of you. 

Mr. WALDEN. We will now move on to the vice chair of the full— 

of the subcommittee, Mr. Latta, from Ohio from 5 minutes. 

Mr. LATTA. Thank you very much, Mr. Chairman. Again, thanks 

very much for our Commission members for being with us today. 

And this is a question I would like to ask all of you, and this 

question is, the Incentive Auction legislation prohibits the FCC 

from excluding qualified bidders from the auction. And fortunately, 

while the Incentive Auction process works its way up to the Commission, it appears that the Wireless Bureau is simultaneously 

working on the ‘‘spectrum aggregation’’ docket to achieve—de facto 

spectrum caps. Will you commit to allowing any interested bidder 

that complies with the statutory requirements to participate fully 

in the auction? And, Chairman, if I can start with you, because I 

notice in your testimony on page 6 that you talk about the Incentive Auction, you had said that you are looking at a voluntary market oriented approach, so if I could start with you. 

Mr. WHEELER. The statute is quite explicit in that regard that 

the Commission may not exclude somebody from participating. 

Mr. LATTA. And also, what about aggregating, would it be wide 

open for everyone to be involved in that? 

Mr. WHEELER. Well, it is interesting with the—what has been 

developing here. I mean the CEO of AT&T recently came out with 

a statement saying, wait a minute, I think I would like to have 

rules to make sure that not one party can run away with all the 

spectrum. So I think there is—in between those positions is where 

reality exists, but the statute, I agree, is quite clear. The statute 

says that you will not exclude anybody, and the statute also says 

that the Commission will design an auction so as to promote economic opportunity and competition and consumer choice to sustain 

a healthy wireless marketplace, and we will do both. 

Mr. LATTA. Madam Clyburn. 

64 

Ms. CLYBURN. Yes, Section 6404 is clear that any party that 

abides or obeys the rules, that they are qualified to participate. It 

also makes clear that the Commission has the authority to enforce 

and introduce rules of general applicability that will allow for spectrum aggregation in order to promote competition. So again, my 

colleague mentioned that part of the reason for, I think for some 

of the robust participation and the type of ideas that we are seeing 

is because we took a dual path on the same day we released the 

rules, or released the notice of opposed rulemaking on Incentive 

Auction, we also released a notice of proposed rulemaking on trying 

to glean information about this dual path. So I think that this, in 

the long run, will help and improve our information and information dissemination and our acquisition and rulemaking once we decide on a clear path forward. 

Mr. LATTA. Thank you. Commissioner? 

Ms. ROSENWORCEL. The Middle-Class Tax Relief and Job Creation Act says that we can have rules of general applicability, but 

we cannot exclude anyone from participation in the auction. I think 

it is easy and simple; we just have to follow the law. 

Mr. LATTA. Commissioner Pai? 

Mr. PAI. I would agree with my colleague, and I would also point 

out that if you look at the end goal which is to have a successful 

auction that pushes out a lot of spectrum, yields sufficient revenue 

to fund national priorities, and provides fairness to all parties involved, then we should not preemptively deter participation from 

wireless carriers by adopting unduly strict spectrum policies. 

Mr. LATTA. Commissioner O’Rielly? 

Mr. O’RIELLY. I want to thank my colleagues for stating that the 

statute is clear because, as one of many people who worked on it, 

it was an effort to give the Commission some authority in this 

space when members couldn’t come to agreement. I am extremely 

hesitant to impose limitations on spectrum holdings because we 

have certain other obligations under the statute. In a nice way, I 

mean the money from the auctions has already been spent. We 

have already spent the money from the Spectrum Act, and so we 

have obligations to provide $7 billion for FirstNet, and we have deficit reduction numbers that have already gone out the door. So I 

am worried about anything that would depress auction revenues. 

I am certainly aware of the statute and I want to remain openminded, but I am hesitant at this time to impose any type of limitation. 

Mr. LATTA. Thank you. And many of you know that rural call 

completion has been an ongoing issue in my district, and I commend the FCC for producing the November 8 Order and Further 

Notice of Proposed Rulemaking to improve the Commission’s ability 

to monitor the delivery of calls to rural areas by mandating certain 

recording, retention and reporting requirements from carriers. And, 

Commissioner Pai, do you believe the November 8 Order will resolve the call completion problem or does more need to be done? 

Mr. PAI. Congressman, I certainly hope that it will. Whether it 

is Toledo or Topeka, we need to figure out where the kink in the 

system is, whether it is intermediate providers, whether it is lastmile, what point in the network is failing. And if it is a technical 

problem, then we can take steps to fix that technical problem, but 

65 

if it is something else, then the FCC needs to be empowered to take 

corrective action. So I certainly support taking the appropriate actions sooner rather than later on that issue. 

Mr. LATTA. Thank you very much. 

Mr. Chairman, I see my time has expired and I yield back. 

Mr. WALDEN. Thank the gentleman. 

We now turn to the ranking member of the full committee, Mr. 

Waxman, for 5 minutes. 

Mr. WAXMAN. Thank you very much, Mr. Chairman. 

I just want to indicate that under the Act, the FCC may not single out a specific provider for exclusion from a system of competitive bidding. At the same time, the FCC is permitted to adopt and 

enforce rules of general applicability that promote competition. 

Even AT&T recently acknowledged they would support rules that 

limit the amount of spectrum any one company could acquire as 

long as the rules applied evenly to all auction participants. 

Chairman Wheeler, as you know, I am a strong supporter of the 

FCC’s open Internet rules because I believe the Internet must remain an open platform for innovation and commerce. You have emphasized the importance of the Open Internet Order. At the same 

time, you recently made comments suggesting that an Internet 

service provider could charge a content provider, such as Netflix, 

a fee in order to guarantee the best available transmission speed. 

Do you see these type of business arrangements as consistent with 

the FCC’s open Internet rules that you support? 

Mr. WHEELER. Thank you, Mr. Waxman, for raising that issue 

because it gives me an opportunity to get more specific than I was 

in Ohio. 

I am a strong supporter of the open Internet rules, full stop. The 

rules were written in such a way as to envision opportunities for 

innovation and experimentation, and to impose on them a balance 

between protecting the open Internet, protecting consumers and 

stimulating innovation. New ideas under the Open Internet Order, 

new ideas such as those you have referenced, in a wireless environment particularly, are not prohibited, but there is a clear responsibility for the Commission to make sure that what takes place does 

not interfere with Internet access, is not anticompetitive, and does 

not provide preferential treatment, and we will enforce that. We 

will maintain the balance between innovation and assuring there 

is an open Internet. 

Mr. WAXMAN. I appreciate your expanding on that issue. While 

network infrastructure and technology have changed since the passage of the 1996 Telecommunications Act, the values embedded in 

the Act have not. And, Mr. Chairman, I know that the Commission 

will soon begin a process to collect real-world information and data 

on the IP transitions. How will the Commission continue to advance the longstanding goals of competition, universal access and 

consumer protection throughout this transition process? 

Mr. WHEELER. You know, Mr. Waxman, there are many people 

who have described the IP trials as a technology trial. I don’t think 

they are a technology trial. We know how to build IP networks. 

They are exactly what you just phrased. They are a values trial. 

They are how do we make sure that the values that, for 100 years, 

Americans have come to expect from their networks continue even 

66 

after the way in which that network operates changes. And that is 

what we are going to be looking for in these trials. It is not whether the guzintas and the guzouttas wash. We know that can get 

taken care of. It is how do you preserve the values in the new technological environment? 

Mr. WAXMAN. Commissioner Rosenworcel, do you want to add 

anything to that? 

Ms. ROSENWORCEL. I think there are so many exciting things 

that can come with new networks, and I think we should embrace 

the future rather than reject it. So I think experimenting in these 

kind of trials is a smart way to go, but as we move into the future, 

what we do has to be informed by the values that have always 

been a part of communications policy. And I see four: public safety, 

universal access, competition and consumer protection. 

Mr. WAXMAN. OK. Commissioner O’Rielly—— 

Mr. O’RIELLY. Yes, sir. 

Mr. WAXMAN [continuing]. I appreciate your appeal to bipartisanship in your testimony, and I know you played an important role 

in helping us get bipartisan legislation in the passage of the Public 

Safety and Spectrum Act last year, because you helped negotiate 

the provisions and the availability of unlicensed spectrum in the 

Broadcast Incentive Auction. 

What is your perspective on unlicensed spectrum generally, and 

do you think the Commission is on the right track in balancing the 

availability of unlicensed and licensed bands? 

Mr. O’RIELLY. Yes, I am a strong proponent of unlicensed spectrum. I am always amazed what the innovators and the experimenters can do with unlicensed spectrum. I think there is great opportunity in 600 MHz for more unlicensed spectrum. The NPRM 

that was put out on this matter proposed a number of different 

ideas where unlicensed could fit. The Commission proposed Channel 37, the guard bands, if there are going to be guard bands, depending on what our band plan looks like. We talked about wireless microphones. There’s still going to be white space at least in 

500 MHz, maybe in 600 MHzas well. And then there are going to 

be residual conversions depending if you are talking about converting from 6 megahertz broadcast channels to 5 megahertz wireless channels. So there should be opportunities in the Incentive 

Auction proceeding after our rules are complete for unlicensed 

spectrum, and I am strongly supportive of those. 

Mr. WAXMAN. Thank you. 

Mr. O’RIELLY. The only difficulty is figuring out how big those 

guard bands should be. 

Mr. WAXMAN. OK, thank you. And my last question is to Commissioner Pai. You stated in your testimony that 92 percent of 

Americans now can choose from 10 or more wireline competitors. 

If that number is accurate, doesn’t it demonstrate that the procompetitive policies of the ’96 Telecom Act are working, and don’t you 

believe we should continue to support a marketplace that gives 

non-incumbents a fair chance to compete? 

Mr. PAI. Congressman Waxman, thank you for the question. I 

think what the multiplicity of choices that consumers enjoy today 

demonstrates is that in the IP environment where you have convergence, something that we only dreamed about during the ’96 Act— 

67 

where you have telephone companies competing with cable companies competing with wireless companies and others to provide the 

same services that we can now rely in a way we could not in 1996 

on the marketplace and technological innovation to drive consumer 

choice. And so to the extent that there are values of competition 

embedded in the 1996 Act, I, of course, embrace those, but I think 

we also need to be mindful of the fact that technology can quite 

often outpace where laws and regulations are, and that appears to 

be where we are with respect to the IP transition. 

Mr. WAXMAN. Yes, but do you think we should support a marketplace that gives non-incumbents a fair chance to compete? 

Mr. PAI. Absolutely. I think the marketplace should give every 

competitor a fair chance to compete. 

Mr. WAXMAN. Thank you. Thank you, Mr. Chairman. 

Mr. WALDEN. Now turn to the gentleman from Michigan, Mr. 

Rogers. 

Mr. ROGERS. Thank you very much, and as the representative of 

Michigan State University, I want to say thank you for giving me 

a great weekend. I appreciate that. I do find it suspicious, however, 

that my phone has not worked since the game. 

Mr. WHEELER. Yes. 

Mr. ROGERS. I wonder if you might be looking into that for me, 

Mr. Chairman. 

The FCC’s recent Communications Security Reliability and Interoperability Council meeting—— 

Mr. WHEELER. Right. 

Mr. ROGERS [continuing]. I understand you talked about the need 

to apply metrics and evaluate cyber security. Can you elaborate on 

that for me? 

Mr. WHEELER. The CSRIC, which is the shorthand for the group 

you are talking about, has done a terrific job in using the multistakeholder process to come up with rules on botnets, on DNSSEC, 

on router security, important kinds of network security issues, but 

it is not enough just to say, OK, here are the rules, and then walk 

away. The question is, are the rules working. And so what I had 

asked CSRIC to do, not for us to impose but in the multi-stakeholder process, is to say how do you establish metrics to know if 

this is working, because that is the trust-but-verify kind of a situation. 

Mr. ROGERS. Well, how do you find those—how are you working 

through that process to define metrics in threats that change literally by the hour? 

Mr. WHEELER. So on those 3 issues, for instance, on botnets, for 

instance, how can you track the movement of where botnets are 

going, they seem to have moved into data centers, for instance, and 

what do we know about that and what might that suggest, and 

what are we seeing in terms of results of the implementation of the 

kinds of things that CSRIC has suggested. That is what we need 

to know. 

Mr. ROGERS. All right, and if you find that out, and you find that 

you are in some disagreement with industry on meeting those 

standards, do you foresee a regulatory scheme? 

Mr. WHEELER. Well, I wouldn’t want to presume a hypothetical. 

I would hope that we would be working with industry to identify 

68 

what needs to be done, and much like we are going to announce 

today on cell phone unlocking when we sat with industry and said, 

here is a problem, it has to be solved, and by the way we will have 

metrics on that. I think that is the preferable first approach, and 

that is the approach that we are taking with CSRIC. 

Mr. ROGERS. But when you say that, does that mean—if I hear 

you correctly, that means you are at least contemplating a regulatory scheme of some sort, beyond just the voluntary here is our 

metrics, try to—— 

Mr. WHEELER. Yes, that is—— 

Mr. ROGERS [continuing]. Meet those metrics. 

Mr. WHEELER [continuing]. That is the right question but it is 

not—the key word is contemplating. I have talked repeatedly about 

what I call the seesaw, the regulatory seesaw. You do this, we don’t 

need to do this. And so what CSRIC is doing is saying, OK, here 

are the kinds of things that need to be done. Saying let us measure 

them, make sure that is going because the result is that we don’t. 

If the seesaw has to tip, it has to tip, but it only tips on the basis 

of need, not the basis of theory. 

Mr. ROGERS. If I understood your answer, there is a possibility 

you could regulate. 

Mr. WHEELER. There is always the possibility, sure. 

Mr. ROGERS. Yes, OK, we should have lots of conversations on 

that. I worry that by the time you have processed your regulatory 

framework, you are too late, you have missed the boat, the threat 

changes—— 

Mr. WHEELER. I—— 

Mr. ROGERS [continuing]. They have moved down the—OK. 

Mr. WHEELER. I could not agree more. The challenge of networks 

and the reason why the multi-stakeholder process is preferred—— 

Mr. ROGERS. Yes. 

Mr. WHEELER [continuing]. Is because it is much more dynamic, 

much more flexible, moves much quicker than a regulatory process 

can, and then can stay flexible. 

Mr. ROGERS. OK. 

Mr. WHEELER. And that is why I am trying to say, yes, this is 

the preferred process to deal with. 

Mr. ROGERS. So you are not going to move away from the council? 

Mr. WHEELER. I am sorry? 

Mr. ROGERS. You are not going to move away from the council 

model for regulation, you are going to continue to try to use that. 

Mr. WHEELER. The multi-stakeholder process—— 

Mr. ROGERS. Yes. 

Mr. WHEELER [continuing]. On this is the right way to go. 

Mr. ROGERS. Perfect. Can you talk about Team Telecom? It is an 

important compliment to the CFIUS process—— 

Mr. WHEELER. Right. 

Mr. ROGERS [continuing]. In terms of preventing investments or 

IT equipment purchases to prevent, certainly, a threat to our national security interests, like Chinese attempts to gain control of IT 

and telecommunication notes in the United States. Can you walk 

us through where you are at on that to give us some idea where 

you are—what you are thinking? 

69 

Mr. WHEELER. Well, when issues come before the Commission 

relative to mergers, acquisitions, whatever the case may be, the 

input from Team Telecom is always sought and taken into account, 

and is crucially important. 

Mr. ROGERS. Yes. Do you see an improvement to that process? 

Can we do something different? You have a limited set of—once 

that report comes back, you have a limited set of decisions you can 

make. You are either in, you are out—— 

Mr. WHEELER. Correct. 

Mr. ROGERS [continuing]. Or you disagree with the decision. Is 

there something better we should be doing there, providing some 

authority for you all to be, given again, the nature of the changing 

technology and how fast the changes—— 

Mr. WHEELER. I have not had to live through one of these yet, 

so I am probably not qualified to opine here on the fly. I would love 

to look into this and to have a discussion with you about it. 

Mr. ROGERS. We are looking at some reforms to CFIUS to try to 

make sure we are keeping up, and I look forward to that dialog. 

Mr. WHEELER. Great. I will look forward to that. 

Mr. ROGERS. Thank you very much for being here. 

Mr. WALDEN. Thank you, gentlemen. 

We will now turn to committee chairman emeritus, Mr. Dingell, 

for—also from Michigan, I believe, for 5 minutes. Go ahead, Mr. 

Dingell. 

Mr. DINGELL. Mr. Chairman, I commend you for this very important hearing, and I have no comments on football or other matters. 

I want to welcome my old friend, Chairman Wheeler, to the committee. We look forward to great things from you. I am satisfied 

you will serve will distinction. I want to also welcome Commissioner O’Rielly, and I want to commend Commissioner Clyburn for 

her fine service as Acting Chairwoman. Quite frankly, your daddy 

would be very proud. 

My questions this morning are going to be directed solely at 

Chairman Wheeler, and will elicit, as you not be surprised to hear, 

yes or no responses. 

Chairman, I would like to start with the Reverse Auction of 

Broadcast Frequencies, authorized by the Middle Class Tax Relief 

and Job Creation Act. I note you recently announced that the Commission will not conduct such auctions until 2015. That gives you 

an extra year. In the meantime, do you expect to complete negotiations concerning the relocation of broadcast frequencies with Canada, Mexico and our border areas, yes or no? 

Mr. WHEELER. No, but, am very hopeful that we will be able to 

move it forward, and as DTV showed, you don’t have to have the 

signature on the page. 

Mr. DINGELL. And you know that that can cause an awful lot of 

viewers to lose service, and an awful lot of screens to go dark in 

our part of the country. Chairman Wheeler, similarly, paragraph 

15 of the Commission’s notice of proposed rulemaking for the Incentive Auction states, ‘‘the Commission expects interested parties 

will have an opportunity for meaningful comment on all specific repackaging methodologies it is considering before it makes a decision.’’ Does the Commission publicly commit to sharing with the 

public the broadcast frequency repackaging methodology it adopts, 

70 

as well as the variables and other inputs it may use to predict repackaging results, yes or no? 

Mr. WHEELER. I will go beyond yes and say absolutely. 

Mr. DINGELL. Now, Mr. Chairman, let us move on to the Forward 

Auction of Broadcast Frequencies. Section 6403(C) of the Middle 

Class Tax Relief and Job Creation Act provides the Commission 

may not grant licenses through Forward Auction, reassigned or reallocated broadcast frequencies, or revoke spectrum usage right unless it proceeds—unless the proceeds of the Forward Auction are 

greater than the following 3 factors combined. First, the total 

amount of compensation the Commission must pay successful bidders in the Reverse Auction, the costs of conducting a Forward 

Auction, and the estimated costs for the Commission to pay for 

broadcaster reallocations. In addition, it is in the public interests 

that the Commission ensure the auction raises a significant 

amount of money in order to help build out of the FirstNet. Together, these constitute a significant pressure on the Commission 

to raise sufficient revenues to accomplish these objectives. Do they 

not, yes or no? 

Mr. WHEELER. Yes. 

Mr. DINGELL. Now, Mr. Chairman, at the end, will the Commission adopt transparent and simple rules to encourage participation 

by the broadest group of wireless providers in the Forward Auction, 

yes or no? 

Mr. WHEELER. Yes. 

Mr. DINGELL. Mr. Chairman, it is—let us focus our attention on 

intelligent transportation systems. This is of considerable importance to my part of the country and our principle industries, and 

the 5 gigahertz band. Given that the Commission licensed ITS almost 15 years ago, is it reasonable to say that it would be premature for the Commission to authorize unlicensed use of the 

5850–5925 megahertz band before the studies are completed, that 

confirm such use would not cause harmful interference with ITS 

services and other incumbent users, yes or no? 

Mr. WHEELER. Yes, and let me go further. We will not authorize 

if there is harmful interference. 

Mr. DINGELL. I am very comforted that you are here this morning, Mr. Chairman. Now, Chairman Wheeler, do you believe that 

the Commission should approve unlicensed use of the 5850–5925 

megahertz band before definitively establishing no risk of harmful 

interference with ITS systems or practical strategies to mitigate 

such risk, yes—— 

Mr. WHEELER. No, and I repeat, will do nothing that causes 

harmful interference. 

Mr. DINGELL. Now, Mr. Chairman, alternately, is the Commission considering moving forward with rulemaking opening up only 

the 5350 megahertz band for unlicensed use, yes or no? 

Mr. WHEELER. So this is where I need to just ask a question, sir. 

The answer is yes, if it is are we considering. The answer is no, 

if we have decided. 

Mr. DINGELL. Now, Mr. Chairman, I would like to commend you 

for your work in advancing the transition to IT-based networks. 

Will the Commission consider an Order in January 2014 that will 

71 

address geographic trials, as well as how to protect in the best way 

consumers using IT-based networks, yes or no? 

Mr. WHEELER. Yes. 

Mr. DINGELL. Mr. Chairman, you have been most gracious to me, 

and I thank you for this. 

Mr. Chairman, your comments have been most enlightening and 

helpful. I want to thank you and the members of the Commission 

for your presence and assistance throughout this morning. Thank 

you, Mr. Chairman. 

Mr. WALDEN. Thank you very much. The gentleman yields back, 

and the Chair now recognizes for 5 minutes Mr. Guthrie. 

Mr. GUTHRIE. Thank you, Mr. Chairman. I appreciate that. 

Chairman Wheeler, and welcome to the FCC also, Mr. O’Rielly. 

Mr. WHEELER. Thank you, sir. 

Mr. GUTHRIE. I appreciate having you here. And, Commissioner 

Clyburn, again, I echo the good work that you did in your time as 

Chairwoman. 

But there seems to have been a lot of progress being made, this 

is to Chairman Wheeler, a lot of progress been made to free-up the 

1755 to 1780 hertz band for commercial use, megahertz band, and 

I know the FCC has already sought comment on how this band 

should be used for commercial purposes. Is the FCC on track to 

auction the 1755 to 1780 band paired with the 2155, 2180 band, 

and if so, when will it occur? 

Mr. WHEELER. So the answer is yes, we are on track. There are 

some issues that still have to be worked out with NTI and DOD 

and some—— 

Mr. GUTHRIE. Are there some impediments—— 

Mr. WHEELER [continuing]. Details, but I think—I am sorry, 

what? 

Mr. GUTHRIE. Are there some impediments that you can identify 

that are—that you are on track, but you say there are some impediments? 

Mr. WHEELER. Yes, I think these are just implementational kinds 

of things in their agreement, but to be specific to your question, we 

would hope that we could do it in the September time frame. 

Mr. GUTHRIE. September time frame, great. And then you spent 

some time in the wireless industry I know, and have seen firsthand 

how spectrum demand has grown exponentially. I realize that a lot 

of our short-term focus is on the Incentive Auction on the 1755 to 

1780 megahertz, but looking forward, what is the FCC doing to 

plan for future spectrum demand, and how can the FCC ensure 

that there continues to be a pipeline on new spectrum to satisfy 

what consumers—an insatiable demand for bandwidth anywhere, 

any time. So to look at again, how do you plan for future spectrum 

demand beyond this? What kind of thoughts do you have—— 

Mr. WHEELER. Sure. 

Mr. GUTHRIE [continuing]. Beyond this—— 

Mr. WHEELER. Sure. 

Mr. GUTHRIE [continuing]. Forward Auction? 

Mr. WHEELER. Well, first we say yay and verily to what you and 

Ms. Matsui have done. Applying the Incentive Auction concepts to 

government spectrum, I am a believer that by the time that you 

peel everything away, it comes down to economics no matter who 

72 

you are. Right? And the economics of an agency where they can get 

cash to help them fulfill their mission is an important kind of decision they should make. And you have created—with Ms. Matsui, 

have created a structure where this can happen. 

Mr. GUTHRIE. Well, we looked at that in our working group, and 

it is a lot of work for these agencies to do that. It is not something 

you can just wish away, as I learned more and more about it. And 

I always say I didn’t run around Kentucky saying, send me to 

Washington and I will deliver you spectrum. And so you learn 

things when you get elected that you never thought you would deal 

with, and I have found this fascinating because, as I said, my constituents demand it. They want the fast bandwidth. So—— 

Mr. WHEELER. But it is also—— 

Mr. GUTHRIE [continuing]. But it is—— 

Mr. WHEELER. It is interesting—— 

Mr. GUTHRIE [continuing]. But it is true that we have to—if we 

were looking at it just by law say, by Fiat say, you have to release 

spectrum, I mean you could get numbers, well, it is going to cost 

this, it is going to cost that, and so it does give them a reason to 

go in and make this happen. 

Mr. WHEELER. And the interesting thing is, I was involved in the 

negotiation for AWS–1 back in the year 2000, and the first negotiation with the Department of Defense, and we kept saying to them, 

but you are going to get money, and they kept saying, but we can’t 

spend it because it goes to the General Treasury. 

Mr. GUTHRIE. Right. 

Mr. WHEELER. And so what you have done is set up a structure 

to help compensate people. The beauty of it is that what it does is 

that it creates a cash flow for them to be able to meet their new 

needs, and to be able to upgrade their equipment, and so it is a 

winning situation all around. 

Mr. GUTHRIE. That is like, Ms. Matsui, she said—I think yesterday you said, win, win, win, I think is what it does for the consumers, for the agencies and for the taxpayers. So beyond—so in 

the future, what are you kind of looking at, do you think should 

happen, just for bandwidth and more spectrum as we all move into 

the future? 

Mr. WHEELER. I am sorry, sir? 

Mr. GUTHRIE. Well, I must just as we move on into the—beyond 

the immediate auctions and things, what other things do you think 

we can do to free spectrum? 

Mr. WHEELER. So first of all, we are constantly looking at how 

you get the most efficient use out of the spectrum. One of the interesting things that we are going to be running is a test on what do 

you do with spectrum sharing, because there is probably not—there 

is, in a digital world, the opportunity to share spectrum, but our 

spectrum allocations were set up with analog assumptions. 

Mr. GUTHRIE. Yes. 

Mr. WHEELER. And so if we can share it, reuse it, it is a great 

opportunity and we need to be pursuing that as well. 

Mr. GUTHRIE. Yes, a great metaphor of that I always thought 

was you don’t have a lane on a highway dedicated just for emergency vehicles, but when emergency vehicles come down the highway, people get out of the way. 

73 

Mr. WHEELER. Good point. 

Mr. GUTHRIE. And I think that is a great metaphor for that. 

Well, Mr. Chairman, I will yield back 15 seconds. 

Mr. WALDEN. Chair recognizes the gentlelady from California for 

5 minutes. 

Ms. MATSUI. Well, thank you very much, and let me just follow 

up on my partner’s questions here. 

I know back in the day, you were looking at the use of federal 

spectrum, and I think it is a concept now that has finally come to 

the point where we can actually do something about it. And I believe that this is a way to really encourage the federal agencies to 

relinquish a non-critical spectrum, and as Congressman Guthrie 

says, it is not easy to do, but we worked with DOD and we made 

a lot of progress. 

Now, I am also looking at what Commissioner Rosenworcel has 

also always said about using the carrot-and-stick approach regarding the federal spectrum holders, and having them relinquish their 

spectrum. Now, in your view, and I also want Chairman Wheeler 

to comment on this too, are the financial incentives identified in 

the bill adequate to encourage federal agencies to relinquish noncritical spectrum? And I think I will go to you first, Chairman 

Wheeler. 

Mr. WHEELER. I don’t know the answer to that because I haven’t 

market-tested it, and I think that ‘‘is this enough incentive?’’ is a 

market-test question. So I am going to, with all due respect, punt. 

What is important is the concept that has been developed, and it 

would seem to me that once that concept is codified, that making 

sure that incentives are adequate is frankly the easier lift on the 

whole exercise. 

Ms. MATSUI. All right, thank you. Commissioner Rosenworcel? 

Ms. ROSENWORCEL. Thank you for the question. I think first of 

all that the legislation that you and Congressman Guthrie have introduced is terrific. The demand on our airwaves is going up and 

the supply of unencumbered spectrum is going down. It is time to 

be creative. This legislation is creative. As far as the incentives go, 

I think it is a good starting point for conversation because right 

now, federal agencies, by some measures, have veto control over 

about 60 percent of our airwaves. They use their spectrum, their 

mission focus, to protect our national defense, to keep our planes 

in the sky, to tell us what weather patterns are coming, but they 

don’t have structural incentives to be efficient with it. Your bill is 

a start of a conversation about how we should apply those incentives, and once we get them right, we will have a catalyst for a lot 

more spectrum from new mobile broadband uses, which would be 

a terrific thing for the economy. 

Ms. MATSUI. Great. Thank you very much. 

Chairman Wheeler, you have emphasized how important it is for 

you to lead the FCC in fact-based decision-making. In the 5 

gigahertz proceeding, for example, this committee is looking to the 

FCC’s engineering expertise to determine the conditions under 

which Wi-Fi can use a band in a way that protects the missions 

of federal systems and commercial systems. How are you and your 

staff planning on responding to the challenge, and is this proceeding a priority for the Commission? 

74 

Mr. WHEELER. So as Commissioner O’Rielly said, I would associate myself with his comment that he is a strong supporter of unlicensed. The key, of course, is to make sure that there is no harmful 

interference, as I have discussed with Mr. Dingell, but I believe 

that if you take a look at the 5 gigahertz, and you look at block 

1, NII–1, that we should be moving to a rulemaking on that, which 

is something that Commissioner Pai has often suggested. Also 

when you look at band 2 which is DOD, and band 4 which is ITS, 

that we have to address the questions that I was addressing with 

Mr. Dingell, and that is to make sure there is no harmful interference, and there is nothing in the record that really gets to that 

at this point in time, but we need to build that record. 

Ms. MATSUI. OK, fine, thank you very much. And I have to ask 

a broadband-adoption question here. The FCC has, Chairman 

Wheeler, implemented broadband adoption as part of the Lifeline 

reform measures. Can you explain what the FCC plans to do 

here—— 

Mr. WHEELER. Yes. 

Ms. MATSUI [continuing]. And what is the goal of these pilot 

projects? 

Mr. WHEELER. So there are 14 projects that are taking place 

around the country that we are funding with some of the savings 

that we have had in other parts of the program, and we are going 

to be looking at, for instance, what is the impact of a Lifeline-like 

subsidy on broadband adoption, and we are going to be looking at 

what are the kinds of training issues to help people understand 

what broadband can do for them, and the kinds of things that they 

can do once they get on the Internet, because those seem to go part 

and parcel. It is not just that you can access it, but also that you 

can use it and you understand why you ought to be using it. 

Ms. MATSUI. So are you going to use this information to develop 

a responsible permanent broadband adoption program? 

Mr. WHEELER. That is the goal. These are trials to inform our 

future actions, and wireless broadband and broadband adoption are 

kind of the sine qua non of what the Agency does. 

Ms. MATSUI. OK. I want to thank you. 

I yield back my time. 

Mr. WALDEN. The gentlelady yields back her time. 

And the Chair recognizes the gentleman from Texas for 5 minutes. 

Mr. BARTON. Thank you, Mr. Chairman, and I want to make a 

comment on the audience. This one is a lot bigger than the one upstairs with the joint hearing, and they seem to be more interested 

too. So I guess that is a credit to the subcommittee and the FCC 

Commissioners. We have the NRCC—not NRC, NRC. 

Mr. WALDEN. I think you need to be clear on that one. 

Mr. BARTON. That would be news, wouldn’t it, if Greg Walden 

was testifying upstairs? Anyway, I just have one question. 

The Middle Class Tax Relief and Job Creation Act requires repackaging and auctioning of the 65 megahertz of spectrum, and the 

low-powered TV stations, of which there are hundreds if not thousands, are not guaranteed continued existence, but Chairman Walden, this subcommittee, myself, have a bill that we hope to introduce very soon. While it doesn’t guarantee them any additional 

75 

rights, it does create, I hope, a pathway so that they may continue 

to exist. As the new Chairman of the Commission, Mr. Wheeler, do 

you have any thoughts on what might be done to give our low-powered TV industry a chance to continue to exist? 

Mr. WHEELER. Thank you, Mr. Barton. Yes, and that would probably fall in three buckets. One, there has been a lot of talk following the statute, and as you point out, the statute says that 

LPTV translators are secondary surfaces and that is what the statute says. Second is we have actually opened a public notice on the 

delivery of the content of LPTV’s. How do we make sure that the 

content, and this ends up being more of a digital technology question than anything else, and how do you use digital technology to 

get the content out, because that is the consumer protection issue 

here, to make sure the consumer gets the content. And then the 

third point here is that there may be a safeguard in the reality 

that rural areas don’t have that great a demand for spectrum for 

wireless services to begin with, and so they may be operating in 

areas where there will be less pressure to get spectrum, but we will 

find out as we go through this process. 

Mr. BARTON. OK. Commissioner O’Rielly, you are the new kid on 

the block, so to speak. You haven’t had a chance publicly to comment on this issue. Do you have any thoughts about low-powered 

TV and what might be done to help them continue to exist? 

Mr. O’RIELLY. Well, the Chairman is right in the sense that you 

have the right to introduce legislation. Working for the members 

on the Spectrum Act, there was a decision made by those members 

to not protect low-power and translators, and you have legislation. 

I would defer to your legislation to whether that may resolve that. 

I know you and I had a chance to talk. I know some of the lowpower representatives have argued it may be beneficial financially 

to the government for low-power television stations to participate. 

I am not sure, and I don’t know if it is accurate, but we have heard 

that argument as well, and it is probably something we have to explore. 

Mr. BARTON. OK. 

That is my only question, Mr. Chairman. With that, I yield back. 

Mr. LATTA. The gentleman yields back the balance of his time. 

The Chair now recognizes the gentleman from Utah for 5 minutes. 

Mr. MATHESON. Thank you, Mr. Chairman. I appreciate all the 

Commissioners taking the time to be here today. I think this is a 

very informative hearing. 

First, Chairman Wheeler, in my city, Utah, we have over 750 active translators that relay signals to many rural communities that 

rely on broadcast television to obtain their newscast, their public 

service announcements, their entertainment. Now, with the increased reliance on mobile data, there is no doubt that we need to 

take steps to move forward with making more spectrum available— 

I’ve heard concerns that the spectrum repackaging that could result from the Incentive Auctions could have a negative impact on 

those rural communities that tend to be more dependent on broadcast television. 

What steps is the FCC taking to protect these viewers from possible negative impacts? 

76 

Mr. WHEELER. Well, Congressman, the first issue is how threatened should they feel, and the fact that they are living in rural 

areas where there is less of a demand for mobile spectrum may end 

up being a de facto shield for them. 

Mr. MATHESON. All right. 

Mr. WHEELER. Secondly is, as the statute says, this is a secondary surface, it does not have protection. So the question is how 

do you protect consumers, as you are suggesting, who rely on it, 

and that is why we have had a public notice and are seeking comments on the question of how do you get what the translator or 

LPTV station does in terms of content out, and how does new technology fit into that, such as digital use of the airwaves or whatever 

the case may be. But this is clearly an issue where we need to be 

focusing on what is the effect on the consumer—— 

Mr. MATHESON. Right. 

Mr. WHEELER [continuing]. Rather than what is the effect on the 

transmission media, because you have told us how we should look 

at that transition media. 

Mr. MATHESON. Right. I appreciate that response. There has 

been a lot of back-and-forth on how the Incentive Auction should 

be structured, and I think most would agree it is imperative we 

maximize participation, both in the Reverse Auctions and the Forward Auctions, but, Chairman Wheeler, I was wondering, what do 

you see is the best way for us to maximize participation and also 

revenue for the federal government in both of these auctions? 

Mr. WHEELER. Before I took this job, I was in the business of 

doing business deals—— 

Mr. MATHESON. Yes. 

Mr. WHEELER [continuing]. And I think that is what we are talking about here. 

Mr. MATHESON. Right. 

Mr. WHEELER. This is a business transaction that someone who 

has a license needs to make a business decision about, and how do 

you do that. Well, I—and what is our role. First of all, we need to 

make sure that we are getting relevant information on a timely 

basis into the hands of those parties to make that decision, and 

that is why we have scheduled the auction plan. We are saying in 

January, we are going to begin laying out exactly what that kind 

of information needs to be. Secondly, I think it is incumbent on us 

to have an outreach program—— 

Mr. MATHESON. Yes. 

Mr. WHEELER [continuing]. In which we make sure that small 

and large broadcasters understand how the program is going to 

work, what the economics could be, and maybe even begin to think 

in terms of what economic models might look like, because at the 

end of the day, what we are really doing is we are saying we want 

the marketplace to make a decision as to what is the highest and 

best use of spectrum, and the marketplace can’t make that kind of 

decision until it is informed. So it is incumbent upon us to make 

sure that that kind of information is in a timely manner available 

to those, and to help them with that process. 

Mr. MATHESON. Commissioner Rosenworcel, I have a question for 

you about the ConnectED Program you mentioned briefly in your 

opening testimony. You also mentioned that the current E-Rate 

77 

program had some bureaucratic inefficiencies built into it right 

now. What can the Commission do to maximize efficiency to get 

more bang for the buck, what can you do with your existing authority, or what do you need for Congress to do to change it to also increase those efficiencies? 

Ms. ROSENWORCEL. Thank you very much for the question. I 

think this program is really important, and reinvigorating it is 

really important for education, infrastructure and the economy. I 

think we can do more with this program just as it is. As my colleague, Commissioner Pai, noted, we do subsidize a whole bunch of 

old-fashioned services right now. We should phase those out over 

time and focus instead on capacity and band width. And like you 

mentioned, we need to reduce bureaucracy. Bureaucracy gets in the 

way of small and often rural schools from participating in this program. I would like to see us encourage greater use of consortia to 

improve bulk buying power, and also have multiyear applications 

to reduce the administrative burden on schools that do participate. 

Mr. MATHESON. I appreciate that. 

Mr. Chairman, I yield back. 

Mr. LATTA. The gentleman yields back. 

And the Chair now recognizes for 5 minutes the gentleman from 

Nebraska. 

Mr. TERRY. Thank you, Mr. Chairman. And let me begin with by 

thanking former Acting Chair Clyburn, and during your tenure as 

Acting Chair, you finished the low-power FM, and you guys did a 

wonderful job on it, you really did, and I want to thank all of you 

for that. 

But Acting Chair—former Acting Chair, just now Member Clyburn—— 

Ms. CLYBURN. The Commissioner—— 

Mr. TERRY. Commissioner, yes. 

Ms. CLYBURN [continuing]. Formerly known as. 

Mr. TERRY. Yes, that works, and you can have a sign for your 

name now, but you were extremely communicative. I love the way 

you reach out to us and, frankly, you are so extraordinary that I 

think every Chairman, including the new one, should model themselves after that. We don’t—it is very rare that we see that level 

of communication, so I just want to thank all of you. This really 

is a great Board. You guys are really serious about the real issues, 

and I like how you filter out the politics that surrounds all of this. 

Keep it up. 

I know that the quantile regression analysis has already been 

discussed to some point, but I just want to let you know that has 

been a long-time concern for me. I think some of the concerns that 

we had that it could actually displace or retard capital investment 

in rural America, when this is all about getting cheap resources 

and capital into rural America because of its high cost. And so it 

really needs to be reviewed, and, Chairman Wheeler, I appreciate 

your comments on the record here today is that you understand 

this problem. I will invite you and all of the Commissioners out to 

rural Nebraska. You land in my district, then we go there. But it 

really is becoming a problem. There is one provider in Diller, Nebraska, that we have used as the model for responsible rural 

telecom, because there are businesses there that now have high 

78 

speed, and they are using it to monetize their businesses there, 

where they truly are a worldwide business, not just the two blocks 

at Diller, Nebraska. But there is a wind farm that they are having 

trouble. The wind farm that wants to go there, that needs a 

broadband hookup, and they are saying, with our cap, we don’t 

have the money. We aren’t allowed to use that money in that way. 

So it is having serious effects. It is just not that one house that is 

30 miles aback and, you know, line in and out, it is really hurting 

rural economic development. 

So I want to go ahead. And then in my 2 minutes left, I want 

to ask the real question and to Chairman Wheeler, and either of 

the Commissioners wish to step in, but I want to ask about a rule 

that concerns the video market. Many of us are concerned that the 

price of cable subscriptions, and I will tell you that is an often and 

frequent call to my congressional office. And the current market for 

video is seeing an expansion in the scope of current law wasn’t necessarily intended to address. That is the FCC has defined buying 

group of MVPD’s for the purpose of program access rules in a way 

that excludes the NCTC, essentially the only buying group out 

there. So are there plans by the Commission to look into this, to 

maybe change it, do you think that the NCTC should be excluded 

from this process, Chairman Wheeler? 

Mr. WHEELER. Thank you, Mr. Terry. I have just become aware 

of the issues that have been raised about this, and want to get all 

over it and would ask that we be able to get back to you, but the 

answer is we are now aware and will be dealing with it. 

Mr. TERRY. Any of the Commissioners have concerns about the 

NCTC being excluded from this rule? Hearing none, Mr. Pai, you 

actually had an expression. 

Mr. PAI. No good expression goes unpunished. 

Mr. TERRY. Yes. 

Mr. PAI. I supported the notice that teed-up a lot of the questions—and we teed-up a lot of different questions, as you know, 

paragraphs 84 to 100 of that Order listed all the issues under consideration—and I look forward to working with Chairman Wheeler 

and my colleagues to ensure that the FCC takes the appropriate 

action to ensure that buying groups or other—— 

Mr. TERRY. Great. 

Mr. PAI [continuing]. Entities are able to compete. 

Mr. TERRY. And others nodded. 

Mr. O’RIELLY. Right. 

Mr. TERRY. Mr. O’Rielly? 

Mr. O’RIELLY. I am sorry, I didn’t express a facial—— 

Mr. TERRY. Also known as the new guy. 

Mr. O’RIELLY. The new guy, yes. I would have to agree with 

Chairman Wheeler. I don’t have as much information on this, and 

I look to get up-to-speed on it, so I apologize that I don’t. 

Mr. TERRY. Yield back. 

Mr. LATTA. The gentleman yields back the balance of his time. 

And the Chair now recognizes the gentleman from New Mexico 

for 5 minutes. 

Mr. LUJAN. Mr. Chairman, thank you very much. And, Chairman 

Wheeler, welcome today. To all the Commissioners, welcome. 

Again, as we are announcing former positions in post, CommisVerDate Nov 24 2008 15:37 Jan 30, 2015 Jkt 037690 PO 00000 Frm 00084 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-109 CHRIS
79 

sioner Clyburn, I know that you are very welcome here today. It 

is great to hear the recognition from my colleagues with your leadership and your work, and I don’t want to speak for former Public 

Utility Commissioner Ray Baum either, but I am going to invoke 

his name a bit. It is good to have another fellow Utility Commissioner here and a leader. For those of you that aren’t aware, myself 

and Ray served at the same time on Utility Commissions as Commissioner Clyburn. We had a chance to do some great things together, and it is great to have you again in that leadership capacity, Commissioner Clyburn. 

Chairman Wheeler, I appreciate very much the conversation 

about quantile regression analysis. I think you will see that there 

are many rural members of Congress, or members that represent 

rural parts of America, that are on this committee. As we look at 

this encouraging investment in rural America, I hope that, through 

all these deliberations and rulemaking, that we don’t lose sight of 

the fact that if we can make a mobile call from an airline, that we 

should be able to make it anywhere in rural America. And if technology is allowing for that to occur, I don’t want to hear that we 

are not able to anymore. So thank you again for looking at this and 

making sure that rural America will not be left out, Mr. Chairman. 

With that being said, I would also encourage and was encouraged 

by the fact that, in a recent report, there was some conversation 

about the Tribal—and would encourage that that is critically important as we roll out the re-evaluation of the QRA. And lastly, I 

want to let you know that I am planning on introducing a piece of 

legislation to include the elevation of the National Tribal Recognition of ONAP as a permanent office, and I would hope that we 

might be able to work with our colleagues to elevate that—reports 

directly to the Chairman, especially with the evolution of what we 

are seeing with the extension of utilities across rural America, including tribal lands. 

Mr. Chairman, I am intrigued very much by the conversation 

around the IP transition. I think Chairman Rogers, Chairman of 

the Intelligence Committee, was asking about the importance of security in networks, that we not lose sight of the fact of the importance of protection of consumers and network security. As we are 

looking forward into future technologies, sometimes things that we 

have read about in fiction or we have seen in television, there has 

been a lot of concern recently about security of networks, about the 

infringement on individuals, peering eyes, if you will, sometimes 

into consumer information, and I am intrigued by your direction to 

move onward with real-world experiments that will be coming forward. I would like your thoughts on anything that you are aware 

of, or that the FCC may be looking at with laser-based quantum 

encryption, point-to-point work that is happening right now with 

our national labs, it has been written about, I know it makes some 

people nervous but it seems to me that as we are looking to protect 

consumer information and intellectual property, that the more advanced that we can make our networks with technology that is currently available that we may take to the commercial marketplaces, 

something that I would like to encourage and see and just like to 

get your thoughts on that. 

80 

Mr. WHEELER. I just learned quantile regression analysis, and 

now you want me to know laser-based quantum encryption. 

Mr. LUJAN. Yes, sir. 

Mr. WHEELER. I look forward to learning a lot about that. I don’t 

mean to be light, but let me be specific on what I can comment on. 

Our networks need to be secure, period. What I was trying to say 

to Mr. Rogers is that the best way for attacking that is through the 

multi-stakeholder process and moving with dispatch, because the 

bad guys sure figure out a way to get around things so we need 

to make sure that our responses are flexible. We are working, obviously, with the President’s Executive Order and the various steps 

that he is taking, or the Executive agencies are taking, in that regard. I happen to believe that 2 challenges of the IP transition is 

going to be the security of the networks and the privacy of the information. If you go back to the comment that I was making, I believe, to Mr. Waxman about the trials need to be about measuring 

values, then we need to be addressing both of those issues inside 

that trial, and I look forward to learning more about how laser 

quantum can help that. 

Mr. LUJAN. I appreciate it, Chairman. And if I may, Mr. Chairman, you know, it wasn’t too long ago that when the same idea was 

presented, that we may be able to move data over lights and lasers—— 

Mr. WHEELER. Right, exactly. 

Mr. LUJAN [continuing]. There were a lot of discouraging 

thoughts that were associated with that, but as we are moving now 

away from copper as a new medium where even the ability to move 

data on fiber can’t keep up with our processing speeds. If laserbased quantum encryption is good enough to keep national security 

secrets preserved, I would certainly hope that we find a way to extend these protections to consumers as well. And again, with the 

real threats that are taking place with theft, with intellectual property, right now we know that it works point-to-point, but there are 

ways to make this work with—what we have available. This is a 

serious area that I have tried to take up with the Intelligence Committee. They were very cautious with their conversations with me 

until I presented with them with publications that have talked 

about this in open source and an unclassified way. So I am hoping 

that we might be able to look into this more, and have a serious 

attempt to incorporate this into our day-to-day lives. 

Thanks again, Mr. Chairman, for that latitude. 

Mr. LATTA. The gentleman yields back. 

And the Chair now recognizes the gentleman from Colorado for 

5 minutes. 

Mr. GARDNER. Thank you, Mr. Chairman. And I want to commend all the Commissioners for being here today, and congratulations on your new role and your newly-retired-from role. Thank you 

for your service. And, Commissioner Pai, I want to thank you for 

your work on the quantile regression analysis, and the comments 

that you made at the beginning of your testimony was—the question of Chairman Walden, I guess, was something that I have dealt 

with each and every day in a district bigger than the State of 

South Carolina. I have a number of rural telecom, rural utilities 

that continue to face the uncertainty as you have mentioned about 

81 

the QRA, and I appreciate it. And so, Chairman Wheeler, thank 

you very much for your comments on that as well, and I look forward to following up with you as those conversations and decisions 

move forward. 

I wanted to ask a quick question to Commissioner Pai about the 

issue of ConnectED and the E-Rate Program. Who is responsible 

for policing to make sure the E-Rate Program is being used as it— 

as appropriately, making sure there is no abuse of the program? 

Mr. PAI. Congressman, thanks for the question. In theory, the 

Universal Service Administrative Company, overseen by us, monitors it, but in practice, given the limited resources that USAC has 

and given the limited resources the FCC has to oversee USAC, 

there is not a great deal of transparency and accountability in the 

system. 

Mr. GARDNER. A question I had with that is twofold. Number 1, 

how do we ensure that there is no overlap of private sector service 

with E-Rate funding and programs to make sure that we are not 

adding to government competition of the private sector, but number 

two, if USAC has identified a problem with an E-Rate contract or 

recipient, is there a way to police or perhaps are there bar—you 

know, disbarment issues that you can talk about, because I know 

one of the issues in Colorado is that there has been a company that 

is involved, and has been morphed into a new company, that has 

had significant issues with E-Rate violations and is now involved 

in another company in Colorado that is providing services to 

schools. 

Mr. PAI. Yes. USAC has taken actions such as the type you have 

indicated, and as well the Department of Justice in appropriate 

cases can take action where it suspects that something fraudulent 

has occurred. And I am quite sure I speak for my colleagues when 

I say that the FCC has no interest in doing anything but enforcing 

the rules against people who abuse the E-Rate system. With respect to the first part of your question, I think it is critical as we 

think about reforming the E-Rate Program, in addition to restructuring the basic planks of it, that we ensure that at the end of day 

we don’t supply E-Rate funds to supplant or add to the problems 

of competitors who have taken the risk and invested private capital 

in deploying networks. 

Mr. GARDNER. And, Commissioner Rosenworcel, I know you 

talked about this as well. I don’t know if you have anything to add. 

Ms. ROSENWORCEL. You know, I would echo largely the sentiment of my colleague. I—we wouldn’t want government funds to 

displace private sector funds. We want to be efficient with the limited dollars we have, and make sure we reach as many schools, at 

as high speed as possible, including in rural Colorado. And with respect to oversight, we could always benefit from more oversight. 

When we find bad actors in a program, we have to take efforts to 

get them out. 

Mr. GARDNER. Great. Thank you. And Commissioner—or, Chairman Wheeler, a question I have, and this may be something that 

you need to get back to me on, are you familiar with a report on 

next-generation 911 that is being put together by the National 

Highway Traffic Safety Administration in connection with a Blue 

Ribbon Panel that was convened by, let me get the name here, the 

82 

FCC’s Communications Security Reliability and Interoperability 

Council? 

Mr. WHEELER. Right. That is CSRIC, yes. 

Mr. GARDNER. Yes, CSRIC. Are you familiar with a report that 

is about to come out in January? 

Mr. WHEELER. I am not familiar with a report that is about to 

come out. 

Mr. GARDNER. There was the Blue Ribbon Panel that was put together at—— 

Mr. WHEELER. Right, I know that, right. Yes. 

Mr. GARDNER. Right, CSRIC. Apparently, there is a Blue Ribbon 

Panel—the report is coming out in January, and there are some 

questionable findings in this report, and I would hope that perhaps 

the FCC, because I believe some of the findings are not in-line with 

FCC ideas at all. If you could take a look at that report before it 

is issued and public to make sure that when we issue a report that 

has the stamped seal of approval of the federal government, that 

it is in-line with the FCC directives, and believes that—— 

Mr. WHEELER. You can consider that done. 

Mr. GARDNER. Thank you very much. And a final question in my 

time, regarding the IP transition issues, heading in a good direction but—and there are significant strides being made to transition 

to IP but, talking about rural America again, how do we further 

encourage this transition in a way that ensures consumers remain 

served in the long-run and particularly in rural America? 

Mr. WHEELER. I am sorry, that consumers would be served in the 

long-run? 

Mr. GARDNER. In the long-run, particularly in rural America. 

Mr. WHEELER. Yes, it is going to be very important that we have 

trials in rural areas to begin to answer those kind of questions. I 

mean you can’t go to New York City or some place like this and 

run a trial and say that it applies in cities in your district. That 

is going to be one of the criteria that we are looking at. 

Mr. GARDNER. Thank you. 

Yield back my time. 

Mr. WALDEN. Thank you. The gentleman yields back. 

And the Chair recognizes the gentleman from Missouri for 5 minutes. 

Mr. LONG. Thank you, Mr. Chairman. And, Chairman Wheeler, 

I came to Congress with a 30-year background in the auction business, so that was my profession for 30 years before I got here, so 

I have a great interest, and any time that we try to conduct an auction for anything, and it is certain to me about this Reverse Auction thing, because I am not sure exactly how that is supposed to 

work, but can you provide us with a timeline of actions that need 

to occur before the Incentive Auctions would begin? 

Mr. WHEELER. Yes, sir. In next month’s open meeting, we are 

going to have a presentation that is going to lay out both the 

timeline and the policy issues that need to be decided, and some 

recommendations on those. Then in the spring, we are going to be 

voting on a Report and Order that solicits offers to do trials, sets 

up a measurement scheme for them, and begins to address the 

kinds of policy issues that will be tangential to all of that, and then 

we will go forth with trials. 

83 

Mr. LONG. Can you also tell me what the FCC is doing to ensure 

that the maximum amount of revenue will be generated through 

these auctions, which was always a concern of mine as an auctioneer? 

Mr. WHEELER. Believe me, one of ours as well because we have 

the responsibility not only to fund FirstNet and the auction activities themselves, but also to contribute to pay down the federal deficit. And I think the key to how you can maximize revenue comes 

down to multiple things. One is, we have got to be able to attract 

broadcasters. We have got to have something, as I was saying previously, that are rules that are understandable, are rules that we 

are actually being aggressive and helping people understand the 

economic impact of them, because there is, as you know, you are 

only going to bid to the point that your spreadsheets say it is going 

to be making sense. So that is the first thing, that we have to attract broadcasters. We also have a challenge here in that we have 

to be freeing up spectrum. 

Mr. LONG. Have to be what? 

Mr. WHEELER. Freeing up spectrum. 

Mr. LONG. Which requires people to put spectrum—— 

Mr. WHEELER. Which—there is the—— 

Mr. LONG [continuing]. End of the auction. 

Mr. WHEELER. There is the key. So you have to provide the appropriate incentive to get them to free up—— 

Mr. LONG. And do you foresee that happening? From what I have 

talked to, and people I have talked to, I don’t know if that is going 

to happen in as large a way as what we—— 

Mr. WHEELER. So the Congress told us to make it happen, and 

we are going to do our damndest to deliver on those instructions, 

and I believe that we will be able to fulfill the challenge that we 

have been given. And in no way, shape or form do I underestimate 

the magnitude of it. I have spent more time on this issue in the 

last 39 days than any other issue. And I know my colleagues all 

feel the same way on this. We understand that we are biting off 

a huge chunk here. 

Mr. LONG. And there is an article where you were speaking in 

Ohio, and to quote out of the article, ‘‘the protection of competition 

Mr. Wheeler said would apply to the coming auctions of additional 

airwaves or spectrum for mobile broadband. In April, the Justice 

Department told the FCC that it could help to protect competition 

by ensuring that the two largest companies, AT&T and Verizon, 

were not allowed to use their financial might to buy up all the 

available spectrum being auctioned, shutting out smaller carriers.’’ 

So how do you balance that? How do you decide I want to get the 

most money for my product over here, but I want to limit my bidders over here, how does that—— 

Mr. WHEELER. I also think that the more people that get to the 

auction, presumably, the better result. And so we want to make 

sure that we are creating an auction marketplace that will attract 

as many people as possible, not just the giants. As a former entrepreneur, we want to make sure that we have smaller wireless companies, and that there are entrepreneurial opportunities in here. 

That is one of the things that is most interesting about what we 

recently put out for public notice, the proposal from the CompetiVerDate Nov 24 2008 15:37 Jan 30, 2015 Jkt 037690 PO 00000 Frm 00089 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-109 CHRIS
84 

tive Carriers Association, the Rural Carriers Association and the 

NTCA, the Rural Wireline Association, on talking about smaller 

economic areas so that they could bid for a smaller piece of geography, rather than a humungous piece, because four entrepreneurs, 

four smaller carriers, they can target their activities, they can take 

something that is a consumable bite, rather than be forced to go 

out and not compete. 

Mr. LONG. But they also have to put together a patchwork quilt 

of—to make their system work, correct, but they can buy through 

the auction, they have to be able to—— 

Mr. WHEELER. So they can buy their areas, they can buy other 

smaller areas, rather than having to buy and this is not a decision, 

I just want to be clear, this is what we have put out for comment, 

but it is certainly a very interesting idea—— 

Mr. LONG. But if they made A, B and C, and they get A and B 

but then they can’t get C, then A and B weren’t worth anything. 

Mr. WHEELER. But that is kind of the history of the wireless industry. We are about to conduct our 96th auction, and I have been 

in them from the outset, and traditionally, that kind of situation 

has occurred, and then an aftermarket develops in which various 

players say, ‘‘OK, how can I reorganize for the most efficiency?’’ 

Mr. LONG. OK. I am beyond my time by quite a little bit, so if 

I had any time, I would yield it back. 

Mr. WALDEN. The gentleman’s time has expired. 

And the Chair now recognizes the gentlelady from North Carolina for 5 minutes. 

Mrs. ELLMERS. Thank you, Mr. Chairman. And thank you to the 

Commissioners for being here today. 

Commissioner Clyburn, I am going to direct my questions to you. 

I have an issue that has been raised from my sheriffs back home 

in North Carolina. It has to do with one of the points that you 

made in your opening testimony, and I will just read from your 

opening statement. ‘‘We adopted an Order to reform inmate calling 

services to finally provide relief to millions of families and 2.7 million children who have been paying unreasonably-high rates to stay 

connected with incarcerated loved ones.’’ My sheriffs back home do 

have some concerns on this issue, and they would like me to pose 

some questions to you in regard to security measures that they will 

now be putting in place. Certainly, they want to be able to provide 

access and information and the ability to communicate with family 

members, but they are concerned that this regulation is saying that 

their ability to put forward call blocking through the prison, is that 

an issue. Is that looked upon as something that we want to veer 

away from? 

Ms. CLYBURN. So let me start again. Thank you, and it is a 

pleasure meeting a Carolinian. 

Mrs. ELLMERS. Absolutely, yes. 

Ms. CLYBURN. Right. We might argue a bit about which—— 

Mrs. ELLMERS. Yes. 

Ms. CLYBURN. Right. 

Mrs. ELLMERS. That is OK though. We are brothers, cousins, sisters. 

Ms. CLYBURN. Absolutely. 

Mrs. ELLMERS. That is right. 

85 

Ms. CLYBURN. So let me start with the latter in terms of the call 

blocking concerns that some of the sheriffs and persons who run 

jail facilities have mentioned. So as it relates to that particular 

item, I want to assure you that nothing within anything that we 

have delivered in this Order prevents any type of security in—security needed type of a blocking. So if it is a judge or a witness or 

something—— 

Mrs. ELLMERS. Yes. 

Ms. CLYBURN [continuing]. You know, is potentially at risk—— 

Mrs. ELLMERS. Yes. 

Ms. CLYBURN [continuing]. Then yes, these providers can block 

calls. The call blocking comes into play when there is not a business relationship with—if someone is doing business with somebody else, and then the supplier—— 

Mrs. ELLMERS. Yes. 

Ms. CLYBURN [continuing]. Is blocking them, that is when we 

have some disconnects with our rules, but when it comes to security protocols, that is in place. So you mentioned what is at the epicenter of our reasoning for reform—— 

Mrs. ELLMERS. Yes. 

Ms. CLYBURN [continuing]. That family members, those who represent those who are incarcerated, not everybody incarcerated is 

guilty—— 

Mrs. ELLMERS. Yes. 

Ms. CLYBURN [continuing]. And those who are trying to help rehabilitate those inmates have complained to us for a number of 

years, for well over 10 years, that the ability to communicate was 

just financially outrageous, that it was an unaffordable regime. So 

what we did, after 10 long years, was act. 

Mrs. ELLMERS. Yes. 

Ms. CLYBURN. And we looked at, and reminded ourselves with 

the Communications Act in terms of universal service principles 

put forward—— 

Mrs. ELLMERS. Yes. 

Ms. CLYBURN [continuing]. That is the providing of just and reasonable rates for all. And so we put in a mechanism that will provide that, and what we also did, not only providing a means for 

just and reasonable rates for those families and others who use the 

phone service, but providing the means for a just and reasonable 

rate of return—— 

Mrs. ELLMERS. Yes. 

Ms. CLYBURN [continuing]. For those carriers. At the same time, 

built in those—that just and reasonable rate of return for carriers—— 

Mrs. ELLMERS. Yes. 

Ms. CLYBURN [continuing]. Is the amount of money needed to 

provide state-of-the-art security protocols. 

Mrs. ELLMERS. Yes. 

Ms. CLYBURN. So nothing within the framework in terms of what 

we put forth in terms of the Order and the further Order that will 

deal with intrastate rates, will compromise security protocols, but 

it will bring more certainty and more, I guess, I would—again, just 

affordability for those—— 

Mrs. ELLMERS. Yes. 

86 

Ms. CLYBURN [continuing]. Who are making calls to the incarcerated. 

Mrs. ELLMERS. There are also concerns about the cost involved. 

Can you give some guidance in anticipation of the costs that they 

will have to incur as a result of wanting to make sure that everyone is protected? 

Ms. CLYBURN. Right. 

Mrs. ELLMERS [continuing]. And the security is there. Also would 

you consider exempting local jails until they can come up with a 

plan of action? 

Ms. CLYBURN. So one of the things that we have put forth in this 

engagement is the capacity for any provider that is under distress—— 

Mrs. ELLMERS. Yes. 

Ms. CLYBURN [continuing]. They can apply for a waiver process 

for a full waiver. And so that capacity is within means, and so they 

do have the ability to do so, but one of the things that I wanted 

to emphasize is when we came up with this particular rate structure, we looked at a number of cost studies—— 

Mrs. ELLMERS. Yes. 

Ms. CLYBURN [continuing]. And cost models that included a wide 

array of facilities, and came up actually with a cost structure that 

was much higher than some of the petitioners wanted us to—— 

Mrs. ELLMERS. Yes. Yes. 

Ms. CLYBURN [continuing]. But we thought that we needed to 

take into account facilities, large and small, in order to come up 

with a rate structure that we think it strikes the right balance. 

Mrs. ELLMERS. Well, thank you very much. And I look forward 

to working with the Commission on this issue and the subcommittee and my law enforcement back home, so thank you so 

much. I look forward to that. 

Ms. CLYBURN. Thank you, ma’am. 

Mrs. ELLMERS. And I yield back the remainder of my time. 

Mr. LATTA [presiding]. The gentlelady yields back. And seeing no 

other members to ask questions, I want to thank the Commission 

for being with us today, and I know that Chairman Walden does 

the same, and I also want to thank the Commission for changing 

your time today for your meeting to be able to be here, and I understand your meeting is at 2 o’clock, so we appreciate you accommodating the committee to appear before us today. 

And seeing no further business to come before the committee, the 

committee stands adjourned. 

[Whereupon, at 12:30 p.m., the subcommittee was adjourned.] 

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