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H.R. , A DISCUSSION DRAFT ADDRESSING

BROADBAND MAPPING AND DATA COLLECTION

HEARING

BEFORE THE

SUBCOMMITTEE ON TELECOMMUNICATIONS AND

THE INTERNET

OF THE

COMMITTEE ON ENERGY AND

COMMERCE

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

MAY 17, 2007

Serial No. 110–48

(

Printed for the use of the Committee on Energy and Commerce

energycommerce.house.gov

COMMITTEE ON ENERGY AND COMMERCE

JOHN D. DINGELL, Michigan, Chairman

HENRY A. WAXMAN, California

EDWARD J. MARKEY, Massachusetts

RICK BOUCHER, Virginia

EDOLPHUS TOWNS, New York

FRANK PALLONE, JR., New Jersey

BART GORDON, Tennessee

BOBBY L. RUSH, Illinois

ANNA G. ESHOO, California

BART STUPAK, Michigan

ELIOT L. ENGEL, New York

ALBERT R. WYNN, Maryland

GENE GREEN, Texas

DIANA DEGETTE, Colorado

Vice Chairman

LOIS CAPPS, California

MIKE DOYLE, Pennsylvania

JANE HARMAN, California

TOM ALLEN, Maine

JAN SCHAKOWSKY, Illinois

HILDA L. SOLIS, California

CHARLES A. GONZALEZ, Texas

JAY INSLEE, Washington

TAMMY BALDWIN, Wisconsin

MIKE ROSS, Arkansas

DARLENE HOOLEY, Oregon

ANTHONY D. WEINER, New York

JIM MATHESON, Utah

G.K. BUTTERFIELD, North Carolina

CHARLIE MELANCON, Louisiana

JOHN BARROW, Georgia

BARON P. HILL, Indiana

JOE BARTON, Texas

Ranking Member

RALPH M. HALL, Texas

J. DENNIS HASTERT, Illinois

FRED UPTON, Michigan

CLIFF STEARNS, Florida

NATHAN DEAL, Georgia

ED WHITFIELD, Kentucky

BARBARA CUBIN, Wyoming

JOHN SHIMKUS, Illinois

HEATHER WILSON, New Mexico

JOHN B. SHADEGG, Arizona

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi

VITO FOSSELLA, New York

STEVE BUYER, Indiana

GEORGE RADANOVICH, California

JOSEPH R. PITTS, Pennsylvania

MARY BONO, California

GREG WALDEN, Oregon

LEE TERRY, Nebraska

MIKE FERGUSON, New Jersey

MIKE ROGERS, Michigan

SUE WILKINS MYRICK, North Carolina

JOHN SULLIVAN, Oklahoma

TIM MURPHY, Pennsylvania

MICHAEL C. BURGESS, Texas

MARSHA BLACKBURN, Tennessee

PROFESSIONAL STAFF

DENNIS B. FITZGIBBONS, Chief of Staff

GREGG A. ROTHSCHILD, Chief Counsel

SHARON E. DAVIS, Chief Clerk

BUD ALBRIGHT, Minority Staff Director

(II)

(III)

SUBCOMMITTEE ON TELECOMMUNICATIONS AND THE INTERNET

EDWARD J. MARKEY, Massachusetts, Chairman

MIKE DOYLE, Pennsylvania

Vice Chairman

JANE HARMAN, California

CHARLES A. GONZALEZ, Texas

JAY INSLEE, Washington

BARON P. HILL, Indiana

RICK BOUCHER, Virginia

EDOLPHUS TOWNS, New York

FRANK PALLONE, JR., New Jersey

BART GORDON, Tennessee

BOBBY L. RUSH, Illinois

ANNA G. ESHOO, California

BART STUPAK, Michigan

ELIOT L. ENGEL, New York

GENE GREEN, Texas

LOIS CAPPS, California

HILDA L. SOLIS, California

JOHN D. DINGELL, Michigan (ex officio)

FRED UPTON, Michigan

Ranking Member

J. DENNIS HASTERT, Illinois

CLIFF STEARNS, Florida

NATHAN DEAL, Georgia

BARBARA CUBIN, Wyoming

JOHN SHIMKUS, Illinois

HEATHER WILSON, New Mexico

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi

VITO FOSELLA, New York

GEORGE RADANOVICH, California

MARY BONO, California

GREG WALDEN, Oregon

LEE TERRY, Nebraska

MIKE FERGUSON, New Jersey

JOE BARTON, Texas (ex officio)

(V)

C O N T E N T S

Page

Hon. Edward J. Markey, a Representative in Congress from the Commonwealth of Massachusetts, opening statement .................................................... 1

Hon. Ed Whitfield, a Representative in Congress from the Commonwealth

of Kentucky, opening statement ......................................................................... 3

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

opening statement ................................................................................................ 3

Hon. Mike Doyle, a Representative in Congress from the Commonwealth

of Pennsylvania, opening statement ................................................................... 5

Hon. John Shimkus, a Representative in Congress from the State of Illinois,

opening statement ................................................................................................ 5

Hon. Gene Green, a Representative in Congress from the State of Texas,

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

Hon. Heather Wilson, a Representative in Congress from the State of New

Mexico, opening statement .................................................................................. 7

Hon. Jay Inslee, a Representative in Congress from the State of Washington,

opening statement ................................................................................................ 8

Hon. Marsha Blackburn, a Representative in Congress from the State of

Tennessee, opening statement ............................................................................ 8

Hon. J. Dennis Hastert, a Representative in Congress from the State of

Illinois, prepared statement ................................................................................ 8

Hon. Joe Barton, a Representative in Congress from the State of Texas,

prepared statement .............................................................................................. 9

Hon. Lois Capps, a Representative in Congress from the State of California,

prepared statement .............................................................................................. 10

WITNESSES

Larry Cohen, president, Communications Workers of America .......................... 12

Prepared statement .......................................................................................... 15

Answers to submitted questions ...................................................................... 108

Ben Scott, policy director, Free Press .................................................................... 22

Prepared statement .......................................................................................... 24

Answers to submitted questions ...................................................................... 137

Kyle McSlarrow, president and chief executive officer, National Cable and

Telecommunications Association ........................................................................ 45

Prepared statement .......................................................................................... 46

Answers to submitted questions ...................................................................... 119

Hon. Steve Largent, president and chief executive officer, CTIA ........................ 49

Prepared statement .......................................................................................... 51

Answers to submitted questions ...................................................................... 116

Walter McCormick, president and chief executive officer, United States

Telecom Association ............................................................................................. 67

Prepared statement .......................................................................................... 69

Answers to submitted questions ...................................................................... 123

George Ford, chief economist and editorial advisory board member, Phoenix

Center for Advanced Legal and Economic Public Policy Studies ..................... 73

Prepared statement .......................................................................................... 75

Answers to submitted questions ...................................................................... 112

Brian Mefford, president and chief executive officer, ConnectKentucky ............ 88

Prepared statement .......................................................................................... 90

Answers to submitted questions ...................................................................... 126

(1)

H.R. , A DISCUSSION DRAFT ADDRESSING BROADBAND MAPPING AND DATA COLLECTION

THURSDAY, MAY 17, 2007

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON TELECOMMUNICATIONS

AND THE INTERNET,

COMMITTEE ON ENERGY AND COMMERCE,

Washington, DC.

The subcommittee met, pursuant to call, at 10:00 a.m., in room

2123 of the Rayburn House Office Building, Hon. Edward J. Markey (chairman) presiding.

Members present: Representatives Markey, Doyle, Inslee, Boucher, Stupak, Green, Upton, Hastert, Shimkus, Wilson, Pickering,

Walden, Terry, and Barton.

Also present: Representatives Whitfield and Blackburn.

Staff present: Johanna Shelton, Colin Crowell, Tim Powderly,

Maureen Flood, David Vogel, and Kyle Chapman.

OPENING STATEMENT OF HON. EDWARD J. MARKEY, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH

OF MASSACHUSETTS

Mr. MARKEY. Good morning, ladies and gentlemen. I would ask

everyone if they could assemble so that we can proceed with this

very important hearing.

I want to begin by emphasizing that the legislation addressing

broadband data collection and mapping issues is in draft form and

we welcome suggestions for improvements to it. My goal is to work

towards a bipartisan consensus bill, and I look forward to working

with our Ranking Member Upton, full committee Ranking Member

Joe Barton, Chairman Dingell, of course, and our other committee

colleagues on this measure as we move forward.

I believe at this point that there is a growing consensus, not unanimity, around the fact that current data collection methods used

by the Federal Communications Commission are inadequate and

highly flawed. Currently, the FCC counts a single broadband subscriber in a five-digit ZIP code as indicating the entire ZIP code has

broadband availability even if the sole subscriber is a business and

not a residential consumer. This can lead to highly inaccurate and

overly generous notions of actual broadband availability, particularly in rural areas where ZIP codes are quite large. In addition,

the Telecommunications Act compels the FCC to address the nationwide availability of advanced telecommunications capability,

2

which Congress defined as having high-speed capability. The FCC

implemented this provision and defined high speed in 1999 as

meaning 200 kilobits per second. The problem is that the FCC has

not kept pace with the times or the technology. Simply put, in 2007

terms, 200 kilobits per second is not high speed. The bill proposes

increasing this tenfold to 2 megabits per second. It is important to

keep in mind that from an international perspective, 2 megabits

per second isn’t even that fast. For instance, in our recent hearing

on international broadband issues, we learned that in the United

Kingdom, British Telecom and dozens of other competitors use advanced technology to get significantly more speed out of existing

copper wire connections than we do here, approximately 8 megabits

per second, and that they have plans to boost it to 16 megabits per

second very soon. In Japan, consumers can get 50 megabits per second, so having the FCC go from 200 kilobits to 2 megabits for purposes of national high-speed broadband assessment is relatively

modest in this context.

In addition, under almost any set of measurements, the United

States lags other nations not only in availability and speed, but

also in value. The 50-megabit-per-second service in Japan, for instance, which is not even available to residential consumers in this

country, is available to Japanese consumers for roughly $30. Here

in the United States, consumers typically pay $20 for about 1

megabit of service and $30 to $40 for roughly 4 megabits of service.

Now, all of these are advertised speeds, and depending upon the

network and the time of day, the actual speeds consumers enjoy

are often much lower, but measuring high-speed broadband in kilobits is akin to assessing broadband using horse-and-buggy metrics.

A 21st century broadband strategy should not use a horsepower

measurement of success.

The state of knowledge around the status of broadband services

in the United States also affects the ability of policymakers to

make sound decisions. For instance, the Federal Government can

do a much better job in reforming multibillion-dollar grant and

subsidy programs whether at the Rural Utilities Service or at the

FCC if we have better data on where we truly need to target Government assistance. And similarly, States can focus limited State

resources for economic assistance, computer adoption and

broadband promotion if ample and accurate data is available indicating where such resources should be deployed. This is precisely

what has happened in a State that is ironically more known for

horsepower than broadband power: Kentucky. ConnectKentucky

has been a wildly successful effort and has demonstrated the palpable benefits for mapping broadband for various public policy benefits.

The risks of not developing national data will undermine our

goal of achieving a national plan for universal, affordable

broadband. This in turn adversely affects consumers in communities across the Nation. The benefits of higher speeds, lower prices

and more choices for broadband services include greater economic

opportunity, job creation, worker productivity, access to health care

and educational resources, promotion of innovation and global competitiveness.

3

I look forward to this hearing. I thank our witnesses for appearing today. I turn to recognize the gentleman from Kentucky, Mr.

Whitfield, who is not a member of this subcommittee, but I know

that he wants to welcome one of our witnesses.

OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF KENTUCKY

Mr. WHITFIELD. Chairman Markey, thank you so much and

Ranking Member Upton, I genuinely appreciate the opportunity to

be here this morning, and I will say that I was a member of the

subcommittee last Congress but not this Congress—they threw me

off—but I do appreciate the great work that you all are doing and

the leadership that you provide.

I am really excited to be here this morning to have the opportunity to introduce Mr. Brian Mefford from Kentucky, who is the

president and CEO of ConnectKentucky, and I am proud of that because ConnectKentucky is an initiative that was created in Kentucky. Brian led that initiative, working with the Governor’s Office

in Kentucky, and I believe that it can serve as a model for successfully addressing America’s broadband initiative. This model was

developed in Kentucky by ConnectKentucky, which is a nonprofit

public-private partnership dedicated to accelerating broadband deployment and use across the entire State of Kentucky. Its mission

is simply to ensure that all Kentucky communities and individuals

have broadband access and the ability to complete in the global

economy. Guided by that clearly stated mission, ConnectKentucky

was able to craft and implement a comprehensive strategy, and as

a result of that strategy in Kentucky today, 93 percent of households are connected to the Internet, and by the end of this year 100

percent of Kentucky households will be able to access broadband by

the end of the year, and I think that is a remarkable achievement,

and it was achieved primarily because of Brian Mefford and his organization and the great leadership that they provided in our

State. So Brian, we welcome you today, and I want to thank the

committee for allowing me to introduce him, and I know you will

look forward to his testimony.

Thank you very much.

Mr. MARKEY. We thank the gentleman from Kentucky for paying

us this special guest appearance to introduce our very special

guest.

The Chair now recognizes the gentleman from Michigan, Mr.

Upton.

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

Mr. UPTON. Well, thank you, Mr. Chairman, and I too thank you

for having this hearing today regarding the discussion draft of the

Broadband Census of America Act of 2007.

Today’s hearing builds on the one we held in April on broadband

lessons from abroad. Much of the focus of that hearing centered on

the fact that OECD’s most recent data on broadband deployment

was flawed and vastly understated broadband’s penetration in the

4

United States. So I view the thrust of this legislation as an effort

to get a better idea of U.S. broadband penetration.

We are extremely fortunate to have such a distinguished panel

of experts today, especially since one of our witnesses has direct experience and had great success in implementing a broadband mapping plan at the State level. It isn’t often that we have the advantage of looking at a successful model such as ConnectKentucky,

which we can learn from and implement in a bipartisan way on a

national level, and it would behoove this committee and subcommittee to learn from the outstanding achievements of

ConnectKentucky, which demonstrates perfectly how the Government can work with industry in a non-regulatory manner to create

a public-private partnership that benefits industry and consumers

and provides a catalyst to greater broadband investment. There is

no need for us to recreate the wheel.

As I have stated before, I am very supportive of the overall goal

of this legislation and believe that the success of ConnectKentucky

can be replicated on a nationwide basis, and I look forward to

working with you, Mr. Chairman, to achieve that goal. However, I

am not sure why we need to amend the definition of high speed in

section 706, especially since your proposed change would exclude

most wireless services and even some DSL. Since the FCC’s 2004

data gathering order, the FCC form 477 has required facilitiesbased broadband service providers to categorize broadband connections into five categories with transmission speeds ranging from

200 kilobits per second to 100 megabits per second. So let us just

require the reporting to reflect that increased granularity. After all,

the 200 kbps figure is not a ceiling, and much of the service available today is already well above that. A simple inventory of all the

speeds available will make that abundantly clear and help us improve those numbers, as well as promote development in unserved

areas. I believe that section 3 of your bill requiring the development of broadband inventory maps will show graphically the

unserved and underserved areas. I do question whether NTIA

should be the developer of that map. I believe that the mapping

should be done by a public-private partnership along the lines of

which was done by ConnectKentucky, and I look forward to listening to Mr. Mefford perhaps discuss that in his testimony. The maps

on ConnectKentucky’s Web site are quite informative, and I believe

that grants under section 4 should go to these ConnectKentuckytype public-private partnerships. This model worked very well, and

I don’t see any reason to divert from a model that has demonstrated such success.

Mr. Chairman, I look forward very much to working with you on

the goals of this legislation, and I appreciate again you having the

hearing today. I yield back.

Mr. MARKEY. I thank the gentleman from Michigan.

The Chair recognizes the gentleman from Pennsylvania, Mr.

Doyle.

5

OPENING STATEMENT OF HON. MIKE DOYLE, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

Mr. DOYLE. Thank you, Mr. Chairman, and thank you for holding this hearing on mapping.

Mr. Chairman, I am reminded of one of my favorite Bazooka bubblegum jokes. Are you ready? Why do maps never win at poker?

Mr. MARKEY. Why do maps never win in poker?

Mr. DOYLE. Because they always fold. All right. That wasn’t that

bad. Thankfully, that joke was written years ago.

We know maps today, Mr. Chairman, are created digitally and

many are available online, and as the subcommittee looks to promote broadband deployment and acceptance across the country, we

need to know where it is available, how fast it is and how cheap

it is. Maps are older than language itself, and the knowledge they

contain has often instigated incredible changes. Dr. John Booth did

not know what was causing London’s cholera outbreak in the 1850s

and so he pinned all the victims on a map. His studies of the pattern of the disease were convincing enough to persuade the local

town council to disable the offending well pump, and the cholera

was stopped in its tracks, thus creating the field of epidemiology.

Luckily, our goals today are a little more modest than stopping

a deadly disease. I just want to know who has access to fast

broadband. Even in my urban and suburban district, there are

places that don’t have broadband competition. I hope with better

information we can make better decisions about the Internet, our

most critical information infrastructure. That is why I think there

is a lot to like about this bill. Technology-neutral legislation that

doesn’t disadvantage first movers who have faster speeds than others is almost always a good idea. ConnectKentucky is a great

model, and maybe the bill needs to be more prescriptive and require that States follow that model. Perhaps the bill should also

have a mechanism to revisit the speeds that we define as

broadband every so often. Perhaps the legislation should also look

at why people aren’t buying broadband if it is available to them.

Is it the price? Are they happy with dial-up? Is it that they don’t

have a computer at home or is it that they don’t really have any

providers in their area? I look forward to the witnesses’ testimony

on these points and more.

Mr. Chairman, the maps that will be created under this bill

might go down in history as some of the most useful information

about telecommunications ever collected. Let us make sure that we

get the data we need.

With that, I yield back my time.

Mr. MARKEY. The gentleman’s time has expired.

The Chair recognizes the gentleman from Illinois, Mr. Shimkus.

OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS

Mr. SHIMKUS. Thank you, Mr. Chairman. I do appreciate having

this hearing, and to be honest with you, I have already learned a

lot in just a few opening statements and some of these comments.

Let me just tell you where I am coming from. I am glad Ed was

here but there are parts of my district—where I live in my district,

6

I drive north to get to Louisville, KY, so I border Kentucky. My district goes down to Paducah, and they do have a very successful program that we have been following, going from 60 percent

broadband penetration to 93 percent penetration in 21⁄2 years. That

is now attempting to be modeled by a group that is represented by

a friend of ours, former Member of Congress Glenn Poshard, who

now is involved with Southern Illinois University, and they are

doing a Connect SI, a Connect Southern Illinois, and they have

kind of mapped out our area of coverage, but there are some questions. The question is what you raised, Mr. Chairman, in your

opening statement, at what level, 200? I think ConnectKentucky is

750. You are proposing 2,000. The question is, is a market competitive, what is the standard? There are all these issues that we need

to hash out because in rural America, if we set the standard too

high, we will disenfranchise the rollout of 750. So if you would

work with us as we move this forward, this is an important thing,

and I think southern Illinois is trying to meet these demands right

now in a market-based competitive approach, and I yield back my

time.

Mr. MARKEY. No, of course, my relationship with rural America

is those two stuffed cows in front of the Hilltop Steakhouse on

Route 1 in my district, so of course I am going to be talking to the

gentleman from Illinois and the other Members that represent

rural districts.

The Chair recognizes the gentleman from Texas, Mr. Green.

OPENING STATEMENT OF HON. GENE GREEN, A

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS

Mr. GREEN. Thank you, Mr. Chairman, for holding this hearing

on broadband mapping. As we have explored in previous hearings

increasing broadband access is critical to our economy, and I want

to commend our chairman for proposing legislation addressing the

current problems of broadband access and mapping.

Our district in Houston has fair access by national standards but

still lags behind other parts of our city. Not only is access a problem, but cost is also a prohibitive factor. I am particularly interested in section 3 of the draft legislation. The FCC is also addressing this in a notice of proposed rulemaking it recently issued seeking comment on section 706, what data it collects. I think it is important that collection of this data is accurate and captures not

only number of households passed, but also the number of

broadband service providers available to the consumers as well as

price. We need competition to drive down the prices, and this

would ensure access doesn’t just mean we have lines running by

our house but everyone can connect to those lines. An important

development for Houston and our district is municipal wi-fi. Houston recently approved a deal with the city and EarthLink for a

wireless broadband network license agreement and a 5-year service

agreement. EarthLink will build and maintain a wireless Internet

network, and the project, covering 600 square miles, makes this wifi development the largest in North America. The company will

provide a discounted rate of $10 per user per month or lower, depending on the competitive wholesale rate, for up to 40,000 low-income users. As wireless technology advances, broadband competiVerDate 11-SEP-98 10:58 Jun 03, 2008 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 Q:\DOCS\110-48 SCOM1 PsN: SCOM1
7

tion will not just consist of lines running to the home. This would

help districts like mine that I represent by giving them multiple

options of technology like WiMAX which could provide a more economical way to offer service in rural districts.

One other issue I hope to hear about from Mr. Mefford today is

your No Child Left Offline project. One of the major barriers to

bringing broadband into the home isn’t just running the lines or

the cost of the service but the cost of the equipment, mainly the

computer and getting online.

Mr. Chairman, again I thank you for holding the hearing, and

I look forward to the testimony.

Mr. MARKEY. The gentleman’s time has expired.

The Chair recognizes the gentleman from Oregon, Mr. Walden.

Mr. WALDEN. Thank you, Mr. Chairman. I am going to waive an

opening statement. I know we are going to vote here in about 8

minutes.

Mr. MARKEY. They have actually changed that if you——

Mr. WALDEN. Well, I will still waive so we can get to the witnesses. Thank you.

Mr. MARKEY. The gentlelady from New Mexico, Mrs. Wilson.

OPENING STATEMENT OF HON. HEATHER WILSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW MEXICO

Mrs. WILSON. Thank you, Mr. Chairman. Thank you for holding

this hearing and for bringing this issue forward. I think this is a

really interesting context to provide information to try to get a

standard basis for gathering that information to assist communities and States and even the Nation in planning but also to provide information to consumers on what may or may not be available and what it really means.

I think we probably all share a common goal here, although we

may not all agree on the strategies to achieve that goal, which is

to deploy advanced telecommunications capability to all Americans.

The key here are the words ‘‘all Americans,’’ not just the high income or the high population density areas but areas like rural New

Mexico and low-income neighborhoods and our Nation’s largest

city, and so I think this idea of going at it through data and transparency and making things available easily to companies who may

be interested in going after a market segment or rolling out new

technologies and to consumers so that they know what the choices

are is a good one. Now, there are going to be some things you need

to work on, on how to structure this so we do get real usable information and we don’t discourage the rollout of new technologies and

we go across all technologies.

I also look forward to hearing this panel today. I believe this is

the first time in my memory that we have leaders of associations

representing telecom and cable and wireless all here at the same

time, and in order for this legislation to work, we have to go across

all of the different technologies. So I look forward to hearing the

testimony today and the responses to questions. I look forward to

working on this piece of legislation.

Thank you, Mr. Chairman.

Mr. MARKEY. The gentlelady’s time has expired.

8

The Chair recognizes the gentleman from Washington State, Mr.

Inslee.

OPENING STATEMENT OF HON. JAY INSLEE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON

Mr. INSLEE. I just left a discussion about Internet radio where

a Government agency, at least in many of our views, didn’t quite

get it right on the copyright issue, and I pointed out how important

it is to get it right, and I am really interested in your thoughts on

how we get it right on the high-speed definition issue, particularly

looking at future technology. We tend to be behind technology here

in the Government on occasion, and I would be very interested in

your viewpoints about where that right number is looking into the

future to the definition of high speed, and I just look forward to

this conversation because we have to get that one right.

Thank you very much.

Mr. MARKEY. The gentleman’s time has expired.

The Chair recognizes the gentleman from Nebraska, Mr. Terry.

Mr. TERRY. I will waive.

Mr. MARKEY. The Chair recognizes the gentlelady from Tennessee, Mrs. Blackburn.

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TENNESSEE

Mrs. BLACKBURN. Thank you, Mr. Chairman. I appreciate the opportunity to be able to sit in on the hearing today and I want to

say welcome to the witnesses, and we do look forward to what you

have to say.

My State of Tennessee has recently formed a broadband task

force that is going to be modeled on the ConnectKentucky program,

so Mr. Mefford, I am looking forward to hearing your comments.

I do have some questions about it. I am excited about the opportunities for public-private partnership. I am also interested in what

our industry witnesses are going to have to say as they are working with the ISP providers to deploy this and to increase broadband

penetration. It is good for our rural communities. It is good for economic development.

I thank the chairman and the ranking member for their attention to the issue, and I yield back.

Mr. MARKEY. The gentlelady’s time has expired.

Any other statements for the record will be accepted at this time.

[The prepared statements follow:]

PREPARED STATEMENT OF HON. J. DENNIS HASTERT, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF ILLINOIS

Thank you, Mr. Chairman.

I would like to welcome the panel here today, and I look forward to hearing from

the witnesses on how we should proceed with broadband mapping.

Let us step back for a moment and ask the basic questions. What is the purpose

of mapping out broadband, and what are we trying to achieve? Are we identifying

broadband availability to serve those who do not have access? Or are we using

broadband mapping as a backdoor attempt to regulate?

I am the first to recognize, having more information is always better than having

no information; but what kind of information do we need to achieve our primary

goal of serving those who at present do not have access to broadband? We’ve heard

9

in previous hearings that cable, phone, wireless and satellite providers are already

making large investments in upgrading and deploying broadband. In fact, 100 percent of all AT&T customers in 22 States will have access to high speed Internet by

the end of this year.

Congress must look to ConnectKentucky as a model to achieve broadband coverage everywhere.

We must be cautious that our goal to provide broadband to those without access

does not lead to an overly regulatory regime. Congress must continue to promote

policies that encourage investments in technology and not enact policies that will

delay the rollout of broadband to consumers.

Thank you and I yield back my time.

PREPARED STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF TEXAS

Thank you, Chairman Markey, for holding this hearing.

I particularly look forward to the testimony from our ConnectKentucky witness.

By all accounts, ConnectKentucky has had remarkable success with broadband

mapping. Through its efforts, broadband penetration in Kentucky has increased

from 60 percent to 93 percent in just the last 21⁄2 years.

Broadband mapping involves collecting data to identify where broadband is available and then targeting unserved areas for deployment. ConnectKentucky has

worked collaboratively with industry through voluntary reporting to build a detailed

map of broadband availability. The map has spotlighted untapped markets, leading

the providers to deploy additional facilities and serve more people. ConnectKentucky

attributes its success to the fact that it is not a Government agency but a non-profit

organization funded through State, Federal, and private dollars. It does not regulate

and keeps sensitive data confidential through non-disclosure agreements.

The first question is, can the Nation use the ConnectKentucky model? And here

are some more questions that need answers: Do we need to define ‘‘broadband’’ as

a particular speed or simply take an inventory of the different technologies and

speeds that are available? Should the focus be identifying capabilities, such as the

ability to send e-mail, browse Web sites, and stream video? Are zip codes the right

geographic units to measure? Is there one standard set of data to gather, or should

the data vary by the type of technologies that different providers use and the designs of their networks? How do we minimize the data collection burden, and how

do we protect sensitive information?

There is no question is that better information is necessary. Indeed, our previous

hearing on the data collected by the Organization for Economic Cooperation and Development demonstrated that rankings of countries tend to mislead rather than inform. A more accurate picture of broadband deployment in this country would reverse the inferiority complex many seem to be developing and plot the right course

for continued improvement.

I look forward to learning more today about what data we need to collect, how

we should collect it, and what we can do with it. I yield back.

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We now turn to recognize our very distinguished panel. It is one

that I think, as the gentlelady from Tennessee mentioned, really

covers a full spectrum of perspectives on these issues. Our first witness is Mr. Larry Cohen. Mr. Cohen is the president of the Communications Workers of America. He represents obviously tens of

thousands of communications workers all across our country and is

one of the most important voices in the communications industry.

We welcome you, Mr. Cohen. Whenever you feel comfortable, please

begin.

STATEMENT OF LARRY COHEN, PRESIDENT,

COMMUNICATIONS WORKERS OF AMERICA

Mr. COHEN. Thank you, Mr. Chairman, it is a pleasure to be

here, and also members of the subcommittee. I think the bipartisanship that you addressed is critical to this and we believe at

CWA that this is absolutely possible to establish policy in a bipartisan manner.

I am the president of CWA representing 700,000 members, over

half of whom work on telecom networks including wired, wireless,

cable sectors as well as media workers and others directly affected

by this.

The purpose of this hearing, as the Chair has said, is to discuss

broadband mapping and data collection. Good data is the foundation of good policy. We desperately need a national Internet policy

to reverse the fact that our Nation, the country that invented commercial Internet, has fallen from first to 16th in the world in

broadband adoption.

Equally disturbing, Americans pay more for slower connection

speeds than people in many other countries, and we have heard the

reference to Japan where actually now 80 percent of households

now have access to a fiber network with speeds up to 100 megabits

with 50 as the standard. In general, the United States is stuck

with a 20th-century Internet in the 21st century, and we have

heard, too many Americans, especially those in rural areas or lowincome households, aren’t connected at all.

Unfortunately, we don’t even know the full extent of our problems because our data is so poor. We don’t know where high-speed

networks are deployed, how many households and small businesses

connect to the Internet, we don’t know at what speeds and we don’t

know how much they pay. Without this information, we can’t craft

good policy solutions, and we fall further behind.

The discussion draft of the bill, Broadband Census of America

Act, is a good step forward to fill this information void. As we

know, the draft bill would require the FCC to upgrade its definition

of high speed to not less than 2 megabits download and 1 megabit

up, a standard used in many other countries. CWA supports this

provision. The FCC has not changed its definition of high speed in

9 years, a lifetime in the Internet. Under the FCC’s current definition of 200 kilobits per second in one direction, it takes 17 hours

to download a movie.

Mr. Chairman, CWA has a few recommendations to improve this

section. First, the FCC, as has just been noted, should be instructed to revise this definition periodically. In fact, there is no

good definition. Second, the FCC should continue to collect data at

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all speed levels to measure progress over time. Finally, some have

suggested establishing a new definition of second-generation

broadband pegged to a data rate that would reliably transmit fullmotion, high-definition video. This is also worth considering.

CWA also supports language in the draft bill requiring the FCC

to collect and evaluate broadband deployment at a much more

granular level, down to the ZIP code of nine digits. As the GAO has

pointed out, the FCC’s current five-digit ZIP code methodology is

inadequate in rural areas. A five-digit ZIP code can cover many,

many miles. Moreover, the FCC’s methodology tells us almost nothing about where infrastructure is deployed.

As a remedy, the draft bill instructs the NTIA to create a detailed broadband map of the Nation. The interactive map would be

publicly available on the Web. CWA strongly supports Federal efforts to create a broadband map that is accessible to the public.

The map will help show policymakers and the private sector where

there are deployment gaps and will measure progress towards national goals. In gathering this data, the privacy of proprietary information must be protected.

The draft bill establishes a program of grants to States and communities for broadband mapping. This section of the bill, as it has

been noted, is modeled in part on ConnectKentucky. However,

ConnectKentucky went beyond mapping, and ConnectKentucky

also facilitated deployment of grassroots technology planning teams

in every county in the State, and we will hear more about

ConnectKentucky in a minute.

Mr. Chairman, the current language in the draft bill limits the

States’ grants to broadband mapping. This omits, as I noted, many

important pieces of ConnectKentucky. We urge the subcommittee

to expand the purpose of the grants to include technical assistance,

support for local community teams and support for programs to improve computer ownership and Internet access for unserved and

underserved populations.

CWA also supports provisions in the draft bill to require the FCC

to survey the price, speed and availability of broadband in urban,

rural and suburban areas and among different classes of customers. This information will help policymakers determine whether

Internet services are affordable, which communities are left behind

and where to target solutions.

Over the past few months, CWA has posted a speed test on our

Web site, www.speedmatters.org. About 70,000 people have taken

the test to check actual download and upload speeds. We don’t

claim the results are scientific. We do believe this is the first national survey of Internet upload and download speeds. The results

are troubling.

As you can see from the chart attached to the back of this testimony, the average download speed was 1.9 megabits per second. At

this rate, it takes an hour and a half to download a movie on

broadband. The average U.S. download speed compares to 61 megabits, and we have heard about the speeds in the other countries,

and upload speeds were only 371 kilobits. The chart shows where

we stand. Obviously our goal is to have a policy in this country

that compares favorably to every one of these countries. It is not

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by accident, it is not just the market. Each one of these countries

has a policy.

[The prepared statement of Mr. Cohen follows:]

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Mr. MARKEY. Thank you, Mr. Cohen, very much. I think you are

going to have plenty of attention once we get to the question-andanswer period. Thank you.

Our next witness, Mr. Ben Scott, is the policy director for Free

Press. He testifies today on behalf of Free Press, the Consumers

Union and the Consumer Federation of America. Welcome, sir.

STATEMENT OF BEN SCOTT, POLICY DIRECTOR, FREE PRESS

Mr. SCOTT. Thank you, Mr. Chairman, members of the committee. Thank you for the opportunity to testify today. Together with

other national consumer organizations, we have been studying deployment of broadband for years.

We have always been limited by the FCC’s inadequate data. In

our view, the Commission has failed to fulfill its obligation under

section 706 of the Telecommunications Act to monitor the deployment of broadband appropriately. We cannot evaluate problems

that we don’t measure or study, much less can we solve them. So

it is with great relief that we see the committee considering a datagathering bill. We don’t have any time to lose. Even with the current data, as Mr. Cohen points out, we can see that the U.S.

broadband market has significant problems in the three metrics

that matter most: broadband availability, broadband speed and the

value of broadband products to consumers.

For starters, roughly 10 percent of American households still lack

a terrestrial broadband connection. We pay more for a lot less

bandwidth than our global competitors, and our markets lack the

competition that has led to high broadband subscription overseas.

The OECD ranks us 15th out of its 30 member nations. Our growth

rate relative to the OECD nations between 2005 and 2006 ranks

us a humbling 20th. We can quibble with the details of international comparisons, but the general trend lines are not in error.

Every couple of percentage points that we fall behind represents

billions of dollars in consumer surplus that we leave on the table

each year. We have a problem, so what is the problem? That is

often hard to say. We can see the big picture outlines, but we don’t

have the detailed information necessary to draft the most effective

solution.

With the indulgence of Mr. Dingell, Mr. Upton and Mr. Stupak,

I would like to use the State of Michigan as a case study to show

you what I mean in real terms. If you look at the end of my testimony, you will find charts with all this information for every State

in case you are curious about yours. Using FCC and census data,

we know that the State of Michigan currently ranks 36th out of 50

in household broadband penetration rates. We know that since

2002 the State ranks just 42d in the level of growth. Now, it is

tempting to blame this on big rural areas, but only 25 percent of

Michigan’s population is rural, which is not far off the national average. We can see one very telling problem, which is that just 66

percent of telephone lines in the State are capable of providing

DSL service. On the cable side, I am sure this will do Mr.

McSlarrow’s heart good, the cable lines are 98 percent broadband

capable at the end of 2005. However, over the last 6 months the

FCC’s data shows that declining to 92 percent. The reasons are unclear. This matches another troubling trend in Michigan, which is

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that the overall broadband penetration shows a declining growth

rate in contrast to other States.

So what is going on here? What accounts for Michigan’s

broadband problems, and how should they be addressed? The fact

is, we don’t know, neither does the FCC, neither does any Federal

agency. We don’t have enough information to translate this Statelevel information into the local assessment that we need for solutions. We can implement backdoor-level policies, but we can’t tackle the pressing local problems.

So how do we start doing that? Well, we need detailed information at the ZIP code and ZIP+4 level. We need to know the price

of speed of connections in different neighborhoods, towns and cities.

We need to know local penetration rates. We need to compare different size towns and different towns that are the same size but

with different providers. We need to know if broadband is simply

unavailable or whether it is too expensive. We need to know how

and why competition isn’t working. Without this information, it is

hard to target policies. If we treat the whole State alike, we are

likely to only be partially right. So should we pour money into universal service programs without any data to properly direct it?

Should we favor tax incentives for carriers without measuring past

performance? Should we design technology training programs without knowing where to start them? We would be much better off if

we measured the problems that we are going to solve.

The bill under discussion would represent a very great leap forward in our knowledge about broadband markets and in my view

would inevitably improve broadband policies. We strongly support

all the tools it creates, but we would like to offer a couple of additional ideas. We recommend an evolving standard for high speed

and broadband, as has been mentioned by other members and by

Mr. Cohen, but we also recommend that the FCC collect data not

just if you have one subscriber in a ZIP+4 but how many lines in

a ZIP+4 are capable of providing broadband and of those lines, how

many have a subscriber at the end of them. This information would

revolutionize our understanding of local broadband markets and

usher in the focused policies that bring us what we all want, investment and competition and the social programs necessary to increase broadband’s adoption. Adoption is the goal of availability. I

think that needs to be clarified.

For consumers, the situation is clear. Since better broadband

data means better broadband policies, we should move this bill

with all deliberate speed. We look forward to working with the

committee.

I thank you for your time and attention, and I look forward to

your questions.

[The statement of Mr. Scott follows:]

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Mr. MARKEY. Thank you, Mr. Scott, very much.

Our next witness is Mr. Kyle McSlarrow. Mr. McSlarrow is the

president and chief executive officer of the National Cable and

Telecommunications Association, the association representing the

cable industry. We welcome you back, Mr. McSlarrow. Whenever

you are ready, please begin.

STATEMENT OF KYLE MCSLARROW, PRESIDENT AND CHIEF

EXECUTIVE OFFICER, NATIONAL CABLE AND TELECOMMUNICATIONS ASSOCIATION

Mr. MCSLARROW. Thank you, Mr. Chairman and Ranking Member Upton, Mr. Barton, members of the subcommittee. Thank you

for having me here today.

First, just to get to the bottom line, our industry supports the

thrust of the discussion draft. I think there is no question, and I

suspect everyone on this panel will agree, we need better data. We

need better data for lots of reasons, and I don’t think anybody is

particularly happy with the current definition of 200 kilobits in

terms of the FCC’s analysis of what constitutes high-speed Internet

access in America. But even if we do end up at the same point, I

do think it is important to step back and think about the perspective we are bringing to get there. There are two ways of looking

at this. One way is the way Mr. Cohen and Mr. Scott just presented, which is the sky is falling, we have got a ‘‘problem’’ or

maybe even several problems. I actually reject that. I realize I may

be rowing against the tide here, but I think the more realistic way

to look at this is, there are a lot of great things happening in this

country in broadband. Now, we would say that cable modem service is available to 94 percent of all American households. I think

Ben used a figure that would have been 90 percent. So whether it

is 6 percent or 10 Americans who do not have broadband

connectivity, we would say the way we should look at this is,

speeds are getting faster, prices are dropping per megabit as we go

along, broadband is extending, but there is a core part of the country, whether it is 6 or 10 percent, that we ought to be focused on.

How do we get broadband connectivity with all the benefits, culturally, social and economically, to those areas, and I think it is important to define the problem we are trying to solve.

There is no doubt in my mind, Mr. Chairman, that your discussion draft would go a long way towards addressing that goal, and

therefore we support it, but I think as we move along in terms of

trying to define what high-speed Internet access really is, I think

we should be mindful to the point you said earlier in your opening

statement, which is 200 kilobits might have made sense at one

time. It hasn’t kept pace with change, and the one thing that defines this market today is that it is changing so fast that we have

to be careful about anything we actually put in legislation in terms

of defining high-speed Internet broadband and what it means, and

so as we work with you, Mr. Chairman, and we appreciate the offer

to do so, I think we would want to make sure that the FCC and

NTIA are given the flexibility to gather as much useful information

for you all as policymakers as possible without unnecessarily restricting what those definitions look like, because what makes

sense today may well look strange a couple of years from now.

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My final point, I think whether or not we agree on the speeds

that are being delivered, there is no question that cable modem

services across the Nation are offering the fastest speeds in the Nation, but just last week you may have seen that Brian Roberts, the

CEO of Comcast, at our convention announced our plans in the

next 2 or 3 years to start rolling out a new cable modem specification that would allow us to have download speeds well above 100

megabits per second. So it is not like the marketplace isn’t addressing consumer demand, and it isn’t like consumer experience isn’t

getting better. So whatever we do, we would just throw down a

caution that we should make sure that we are not stopping those

developments from taking place.

Thank you, Mr. Chairman.

[The prepared statement of Mr. McSlarrow follows:]

STATEMENT OF KYLE MCSLARROW

Good morning Chairman Markey, Ranking Member Upton, and members of the

subcommittee. My name is Kyle McSlarrow, and I serve as the president and chief

executive officer of the National Cable & Telecommunications Association. NCTA is

the principal trade association for the cable industry, representing cable operators

serving more than 90 percent of the nation’s cable television households and more

than 200 cable program networks. The cable industry is the Nation’s largest

broadband provider of high-speed Internet access after investing $110 billion over

ten years to build out a two-way interactive network with fiber optic technology.

Cable companies also provide state-of-the-art digital telephone service to over 10

million American consumers.

Mr. Chairman, thank you for inviting me here to testify on your legislative proposal to improve the quality of information on broadband deployment and

broadband adoption rates in this country. As you know, the cable industry supports

sensible and targeted Federal initiatives designed to spur broadband deployment in

rural areas of the country where absent some help, no private party would find it

viable to build a high-speed broadband network. We believe that the government

can and should play a role in making certain that the incredible economic and social

benefits of broadband connectivity are extended to households and small businesses

in those unserved areas. In order to do that, it is vitally important to identify areas

that lack access to broadband service. Identifying communities that lack broadband

access and obtaining information about the factors that have inhibited broadband

deployment to these areas can assist policy makers and the private sector in developing initiatives that will extend broadband service to all Americans. We therefore

support your legislative initiative to collect data regarding the availability of

broadband services across the country.

However, Federal assistance for broadband deployment must be carefully targeted

to unserved communities. Federal subsidies for broadband deployment in rural

areas where private sector businesses are already offering service are unfair to

those companies that take the risk to deploy service. Such market-tilting subsidies

deter those who have invested from investing more, and they are a waste of limited

Federal resources. Better, more meaningful data should allow us to avoid those unfortunate consequences.

We believe that a nationwide survey of broadband service will show the significant progress that has been made in this country with respect to both broadband

deployment and adoption. I outlined cable’s perspective on broadband deployment

in a recent letter to you and the members of this committee.

In our view, America’s current Organization for Economic Co-operation and Development (OECD) ranking does not tell the full story. And it should sound a cautionary note that we are currently examining how to ensure better data that actually

provides the basis for sound policy decision-making in the United States but are

often prepared to credulously assume that the same infirmities won’t appear in

international data.

Mr. Chairman, broadband deployment in this country continues to grow at a robust rate. And the total number of consumers who have signed up for high-speed

Internet service in the U.S. far exceeds that in any other country in the world—

in fact, U.S. broadband users represent more than 30 percent of all the broadband

connections in OECD countries.

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With respect to cable, which is the largest provider of broadband services in the

United States, deployment is the result of our massive investment of risk capital

in the last decade making it possible for us to provide high-speed Internet access,

competitive voice service, and other advanced services. In fact, a recent report by

Kagan Research shows that cable broadband service is now available to more than

94 percent of all U.S. homes.

Due to a highly competitive marketplace, the availability of broadband service

continues to grow while the price-per-megabit continues to drop. And more

broadband competition and investment is imminent. Research and Markets estimates that within five years, there may be as many as 20 million high-speed wireless subscribers, and Parks Associates estimates that by the year 2011 there will

be 2.5 million broadband-over-power line subscribers.

While the price-per-megabit declines, broadband speeds continue to increase.

When cable first offered high-speed Internet service as an always on alternative to

dial-up access in the mid-1990s, we offered speeds of about 1–1.5 Mbps. Today, most

cable operators offer broadband speeds of up to 5 Mbps and greater—and some, like

Cablevision, offer speeds up to 50 Mbps. Other cable operators offer a service that

provides for ‘‘boosts’’ of higher speeds ranging from as high as 10–20 Mbps on an

on-demand, capacity-available basis. In addition, many cable operators will soon deploy a new architecture (DOCSIS 3.0) which will allow speeds above 100 Mbps.

As we stated at the outset, the cable industry supports legislation to collect data

on broadband deployment in the U.S. We have some suggestions that we believe

could further strengthen and clarify the Discussion Draft.

Section 2(a) Definition of High-Speed Transmission—The current FCC definition

of broadband—200 kbps downstream and 200 kbps upstream—is clearly antiquated

given the speeds that most broadband providers are offering consumers today. Most

cable operators offer download speeds that exceed 5 Mbps. Some cable operators

offer even higher download speeds while others offer tiers of service with different

levels of downstream and upstream speeds. However, cable broadband is an asymmetrical service. What that means is that upstream speeds are usually lower than

downstream speeds, which conforms to the way most consumers use the Internet

today. For example a consumer needs very little bandwidth to send a command to

a Web site which typically results in a large amount of data being downloaded to

the consumer. As such, some operators that offer download speeds from 5 to 10

Mbps may well offer upload speeds that are less than 1 Mbps.

The Discussion Draft would revise the definition of ‘‘advanced telecommunications

capability’’ to say that ‘‘high speed’’ means allowing the user to download at not less

than 2 Mbps and upload at not less than 1 Mbps. Under that definition, a highspeed Internet service that offers incredibly fast download speeds approaching 10

Mbps, but upload speeds less than 1 Mbps, would not qualify as a broadband service.

We do not believe the definition in the Discussion Draft accurately reflects the

broadband marketplace. In fact, given the continuing rapid advances in technology

and changes in the way broadband service providers may configure their systems

in order to meet consumer demand in a competitive marketplace, it probably makes

little sense to include an exact definition of ‘‘high-speed’’ in the statute—the definition could be outdated before the bill becomes law. Instead, Congress should encourage or mandate the FCC to periodically update its definition of broadband service,

taking into account technology and marketplace trends.

In any event, Congress should make clear that the FCC’s obligation under section

706 is to promote broadband deployment by all providers, regardless of technology,

and that the Commission must utilize the appropriate mix of deregulatory measures

to fulfill that obligation.

Section 3(g) Protection of Information—As I indicated earlier, broadband is a hotly

competitive marketplace, and therefore deployment data is extremely sensitive. We

appreciate that you have included a provision to clarify that the bill may not be

‘‘construed to authorize or require the NTIA to make publicly available any proprietary information’’ gathered in creating a comprehensive nationwide inventory of existing broadband service and infrastructure. We would urge the committee to

strengthen that provision to state unambiguously that proprietary information submitted to the NTIA is protected against disclosure, including disclosure pursuant to

Freedom of Information Act requests. To the extent States and localities are given

access to this data, they should also be made responsible for protecting it against

disclosure as well.

Section 4 Grants to States and Communities for Broadband Map Development—

Section 4 authorizes NTIA to make grants to States and local governments to ‘‘assist

in providing the NTIA with information to facilitate the development of the

broadband inventory map.’’ Grants could be used by States and localities for ‘‘develVerDate 11-SEP-98 10:58 Jun 03, 2008 Jkt 000000 PO 00000 Frm 00052 Fmt 6633 Sfmt 6633 Q:\DOCS\110-48 SCOM1 PsN: SCOM1
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oping and obtaining information regarding the geographic extent of broadband services deployment and public availability.’’ While we recognize that States and localities will have more direct knowledge of levels of broadband deployment that may

be useful in helping to create the broadband inventory map, we are concerned that

this provision could be read to authorize these governmental units to engage in their

own broadband data collection efforts. These efforts may not be consistent with the

FCC’s reporting requirements, imposing duplicative and unnecessary burdens on

broadband providers. To the extent the States and localities are permitted to play

a role under this legislation, they should be required to use FCC data in order to

assist the NTIA in developing a broadband inventory map.

Section 5 Broadband Service Survey—Section 5(a)(2) would require periodic surveys of the ‘‘advertised and the actual transmission speeds’’ of broadband service in

urban, suburban and rural areas. Cable companies make it very clear in all of their

advertising materials that maximum advertised speeds are not guaranteed at all

times and that actual speeds are governed by many factors that are beyond the operator’s control. Actual transmission speeds can vary significantly depending upon

traffic anywhere on the Internet, both globally and locally. Heavy usage of peer-topeer services or extensive use of full-motion video downloads and video streaming

by just a few users in a neighborhood can result in slower download speeds for all

users.

Of course, cable operators employ network management tools to try to ensure the

best possible Internet experience for the greatest number of customers. But there

is no way for any Internet service provider to account for everything that might happen on the Internet that might affect download or upload speeds at any given moment in time. So the real issue should not be to compare so-called ‘‘advertised’’

speeds with so-called ‘‘actual’’ speeds but rather to make sure that disclosure to consumers is uniform and sufficient to ensure that they know what they’re paying for.

Any attempt by the Commission to get a reliable picture of ‘‘actual’’ network speeds

must be based on monitoring over a period time that includes periods of maximum

demand and peak usage and periods when usage is lower and user applications require less bandwidth.

Congresswoman Doris Matsui recognizes the need to account for such variations

in her bill H.R. 1818, the Broadband Deployment Acceleration Act. The Congresswoman would also set a statutory definition of current generation broadband service—a notion with which we disagree—but H.R. 1818 does recognize that speeds

should be gauged based on what is available ‘‘at least a majority of the time during

periods of maximum demand to each subscriber who is utilizing such services.’’

Should the committee decide to include language directing the Commission to establish criteria for determining broadband transmission speeds, it should do so as proposed in H.R. 1818.

Finally, if the Commission is being asked to compare broadband speeds available

in America with speeds available in other countries, the Commission should be directed to find a way to compare apples to apples—that is, it should apply the same

standard that takes into account speed variations that affect users in other countries, so that we are not accepting without proof that average download speeds in

other nations are greater than they are here.

Thank you again, Mr. Chairman, for the opportunity to testify. We look forward

to working with you and the Members of the Subcommittee on legislation to establish a reliable nationwide inventory of the availability of existing broadband service.

I would be happy to answer any questions you may have.

Mr. MARKEY. Thank you, Mr. McSlarrow, very much.

Our next witness very significantly is an alumnus of this subcommittee, and we very much are proud of his work. In addition,

he also happens to be the president and chief executive officer of

the Cellular Telecommunications Industry Association. That is the

association which represents the wireless industry, and we are

proud of him and glad to see him back here before us again, and

whenever you are ready to go, Steve. This is Steve Largent. Please

begin.

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STATEMENT OF HON. STEVE LARGENT, PRESIDENT AND

CHIEF EXECUTIVE OFFICER, CTIA

Mr. LARGENT. Thank you, Chairman Markey. I appreciate that,

and I also found it amusing that your vice chairman is following

in your footsteps with his ardent sense of humor.

Mr. MARKEY. Let me rescind some of the nice things I said about

the gentleman. I ask unanimous consent to revise and extend my

remarks. Please begin.

Mr. LARGENT. Good morning, Mr. Markey and members of the

subcommittee. I am pleased to have this chance to testify on the

draft broadband mapping bill.

Wireless is an important component to our Nation’s broadband

infrastructure. In the most recent reporting period, 59 percent of

all broadband subscriber additions were wireless, and more than

200 million Americans can now choose to use wireless for mobile

e-mail access, web surfing, music, video and increasingly critical

business and medical functions. CTIA’s member companies are investing heavily to increase the capacity of their networks so they

can provide what consumers demand. With the implementation of

the right policies, CTIA members will do even more, with consumers being the ultimate winners.

I applaud Chairman Markey for his leadership on the issue of

how best to determine the state of broadband deployment in America. The wireless industry agrees that a broadband census can be

a timely and useful tool to help ensure that all Americans can participate in the 21st century economy. We support the chairman’s

objective, and I have several modest suggestions about ways you

can maximize the quantity and quality of the data you seek.

CTIA suggests that rather than changing the existing FCC reporting requirement for broadband, the bill should focus on the development of an inventory map that shows the availability of service offerings at all speeds above 200 kilobits. The information collected can be categorized across a range of speeds such as 200 kilobits to 1 megabit, 1 megabit to 2.5 megabits, and so on. We believe

this approach will enhance the value of the map by giving a more

textured picture of the range of available services. Arbitrarily excluding wireless offerings and other broadband services below 2

megabits per second would render the national deployment data

and the related mapping incomplete and inaccurate and the very

flaw that plagues the OECD’s broadband data.

A second concern is tying collection data and mapping to ninedigit ZIP code areas. The wireless industry provides wireless

broadband to areas that don’t receive mail. Zip codes don’t matter

in a wireless world. CTIA’s member companies compete on the

basis of their broadband coverage. That is why they have created

digital coverage maps and make these maps available to their customers through company Web sites and other promotional materials. Wireless carriers should be permitted to provide these maps

to the NTIA to satisfy data collection needs regarding wireless

broadband. The agency can then manipulate the data into any format that they find useful.

Third, CTIA’s members have no concerns about States or localities having access to the information provided to the NTIA and the

FCC. However, the data collection role given to the States in the

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draft bill appears to establish an independent basis for State jurisdiction over broadband services. This could undermine the clear,

logical and settled nature of the Federal jurisdiction in this area.

It should be made clear that no such independent regulatory authority is intended.

As you move forward, I ask that you keep in mind several other

issues that are critical to making wireless broadband service ubiquitous. First, commercial carriers will continue to need more spectrum in order to meet growing consumer demand for bandwidth.

Accordingly, the upcoming 700 MHz auction must occur on schedule and with the spectrum allocated as designated by law. Second,

spectrum has already been auctioned but must be made available

to companies that have paid for it. The industry applauds the efforts of the NTIA, but the work remains to be done to ensure an

orderly and quick transition of existing Government users off of the

spectrum in the AWS spectrum auction. Third, the Federal-State

Joint Board’s recent recommended decision to cap funding for competitive carriers will harm wireless deployment in rural America

and it should not be adopted by the FCC. The universal service

program needs to be fixed certainly, but the Joint Board’s proposal

is discriminatory and will harm the very consumers that the fund

is supposed to support.

Finally, I would like to thank the 23 members of this committee

who signed on to the analog sunset letter a few weeks ago. Bringing an end to the analog mandate will free up spectrum that can

be used for broadband service, and I especially would like to thank

Mr. Inslee and Mr. Pickering for their leadership on this important

issue.

Thank you again, Mr. Chairman, and I would be happy to answer any questions you may have.

[The prepared statement of Mr. Largent follows:]

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Mr. MARKEY. Thank you, Mr. Largent, very much.

Now we turn to Mr. Walter McCormick. Mr. McCormick is the

president and chief executive officer of United States Telecom,

which is the trade association representing local telephone companies. He has been a frequent visitor to our committee. We welcome

you back. Whenever you are ready, please begin.

STATEMENT OF WALTER MCCORMICK, PRESIDENT AND CHIEF

EXECUTIVE OFFICER, UNITED STATES TELECOM ASSOCIATION

Mr. MCCORMICK. Thank you, Mr. Chairman.

Mr. Chairman, Ranking Member Upton, members of the subcommittee, thank you for the opportunity to appear before you

today to discuss broadband deployment, particularly to underserved and unserved areas. We share your interest in achieving

broader deployment of broadband, and we are pleased that this has

become a bipartisan objective, with both Speaker Pelosi’s Innovation Agenda and the Senate Republican High Tech Task Force

identifying broadband deployment as a key national objective.

Mr. Chairman, you have proposed a map and we think that a

map, makes sense. It makes sense to know where Americans have

access to advanced telecommunications services and where they do

not. It is a practical way of identifying where resources need to be

targeted. Most U.S. consumers enjoy unprecedented choice in

broadband access. Competition among cable, wireline, wireless and

satellite providers has spawned a variety of pricing and service options that benefit consumers. In some areas, there are even free

and advertiser-supported broadband offerings. Technological advancements have lowered barriers to entry and have made it possible for anyone who wants to invest and compete in offering highspeed Internet access to do so, and the FCC has embraced marketbased policies that have resulted in dramatic investment. Indeed,

North American telecommunications companies are projected to

spend $70 billion on new infrastructure this year. Today there are

more than 1,300 broadband service providers in the United States.

Broadband connections have increased more than 16-fold in the

past 6 years, and one in three people in the world who now log onto

the Internet using a broadband connection do so in the United

States. But we all recognize that there are some areas where consumers do not yet have competitive broadband offerings to choose

from and some other areas that lack broadband access altogether.

This legislation is aimed at pinpointing those areas. If we know

precisely where the challenges lie, we can better address them. So

Mr. Chairman, I believe that there is complete consensus on the

objective. Let me offer then our suggestions for how best to go

about developing this map.

First, we think that the more comprehensive the map is, the

more useful it will be. So don’t redefine broadband and thereby arbitrarily exclude from mapping some areas that are covered at

speeds that the FCC has determined are a lot better than dial-up

and capable of full-motion video and displaying text as fast as one

could possibly turn the pages of a book or turn the channels on a

TV. The map should identify all the various offerings and all the

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providers so that policymakers can get a full picture of the marketplace.

Second, draw upon what has been shown to work. We are

pleased as well that the committee has invited ConnectKentucky to

testify today. We too believe that this is a model that builds

broadband maps at the State level through effective public-private

partnerships and is perhaps the best way to achieve our shared objective.

Third, we too suggest that that the nine-digit ZIP code approach

isn’t going to give you what you need. These codes do not correspond to service territories. What you need is to identify gaps as

was done in Kentucky.

Finally, we agree that an international comparison is important,

but if it is to have any utility or relevance whatsoever, it needs to

make an apples-to-apples comparison that takes into account geography and demographics.

Mr. Chairman, we look forward to working with you and the

committee on this legislation and on initiatives aimed at expanding

broadband access and competition. Again, thank you.

[The prepared statement of Mr. McCormick follows:]

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Mr. MARKEY. Thank you very much.

Our next witness is Dr. George Ford. Dr. Ford is the chief economist at the Phoenix Center for Advanced Legal and Economic Public Policy Studies. We welcome you back to the committee, Mr.

Ford. Please begin.

STATEMENT OF GEORGE FORD, CHIEF ECONOMIST AND EDITORIAL ADVISORY BOARD MEMBER, PHOENIX CENTER FOR

ADVANCED LEGAL AND ECONOMIC PUBLIC POLICY STUDIES

Mr. FORD. Glad to be back. Thank you, Mr. Chairman, Ranking

Member Upton and members of the subcommittee. Good morning

and thank you for inviting me back to testify before you today.

Three weeks ago I had the honor of testifying before this subcommittee on the most recent OECD Broadband Rankings report.

While there is certainly a great deal of controversy surrounding

those rankings, we all agree that better data is needed.

As a reminder to the subcommittee, the Phoenix Center is a nonprofit 501(c)(3) organization that publishes academic research on

economics and the telecommunications industry. The Phoenix Center makes it a policy not to endorse or support any particular piece

of Federal or State legislation or proposed regulation.

My comments today are from the perspective of an economist

that uses Government data to research the communications industry. I have written and published numerous papers on communications markets, almost all of them empirical in nature. So you might

say that I have a vested interest in ensuring that the data the Government collects and provides are complete and useful for statistical analysis. I welcome and applaud this subcommittee’s efforts to

improve the Government’s data collection abilities. I can summarize my suggestions into three categories: completeness, comparability and consistency.

First, we need to make sure that the data that we collect are relevant data and make sure this data is complete. Clearly, ZIP code

data does not provide us a complete picture of broadband availability. Each ZIP code represents approximately 30,000 people on average, yet it takes only one reported broadband connection among

those homes for the FCC to consider that ZIP code served by that

provider. Clearly, that is inadequate. We should shrink our unit of

measurement to render a more detailed and accurate picture of

broadband availability. The unit of measurement needs to have a

rational basis and be somewhat stable over time. ZIP codes were

designed for optimal routes for mail carriers and are subject to

change any time based on changes in letter mail volumes. This is

particularly true of the ZIP+4 codes referenced in our discussion

draft.

We also need to include all types of broadband in the collection

effort regardless of technology or provider. The FCC publishes a

small mountain of data and has an entire division devoted to the

collection and dissemination of data, but most of that information

comes from only one industry segment, the local exchange companies. To have a complete picture of how broadband infrastructure

is developing, we need all providers to participate, regardless of

size, geographic location, ownership structure or technology.

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Completeness also dictates that we need information on the different types of speeds and broadband services that are available.

Today many scoff at the FCC’s definition of 200 kilobits as highspeed service, and the discussion draft makes a different choice: 2

megabits downstream and 1 megabit upstream. In my opinion, the

definition of high speed or broadband should be flexible and cover

a range of offerings beginning at the 200 kilobits offering. From an

empirical perspective, having a single threshold, particularly one

that is high, forces researchers to incorrectly assume that areas

that do not meet that threshold have no broadband service at all.

A single threshold creates a statistical dichotomy that does not

exist in reality. Further, the proposed upstream threshold will likely exclude many current deployments of mobile broadband, and

that exclusion is significant.

From a policy perspective, the distribution of availability in

terms of service offerings is almost as interesting as availability

itself. The data also needs to be collected and disseminated in a

manner that allows it to be compared in a way that has statistical

relevance. I am concerned about the proposal in section 4 that has

the broadband map composed of data collected by potentially more

than 50 different State or local governments. Guidelines should be

provided so that everyone is collecting and disseminating similar

data that allows for statistical comparison. Otherwise the data will

not provide researchers like me with valuable, useful information.

What is most troubling to me about the proposal is its failure to

recognize that ZIP codes, even nine-digit ZIP codes, simply cannot

be linked sensibly to demographic data. While researchers often

crudely assign census demographic data to ZIP codes, in doing so

we are not able to utilize all the best demographic information that

the Census Bureau collects. Narrowing the geographic bounds of

the analysis to ZIP+4 level may seem sensible, but it is insufficient,

because as far as I can tell, there is no ZIP+4 demographic data

available from any source. Researchers would be able to do very little with ZIP+4 data. We could make no claims about the relationship between availability and income, race, age, population density

and so forth. These relationships are obviously important from a

public policy perspective.

Mr. Chairman, many, if not all, of the policy questions, this subcommittee considers are empirical questions and empirical questions can only be answered by empirical means. Better data will

lead to a more disciplined approach to broadband policy that will

render better results and eliminate the waste of resources devoted

to quibbling over bad ideas.

I thank you for the invitation to testify, and I welcome any questions that you may have.

[The prepared statement of Mr. Ford follows:]

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Mr. MARKEY. Thank you, Mr. Ford, very much.

And now we turn to the idea which has been the genesis of the

hearing and all of this interest which has now unfolded nationwide.

We now turn to the State of Kentucky and Mr. Brian Mefford. He

is the president and chief executive officer of ConnectKentucky. In

that capacity, he helped to lead efforts to ensure that broadband

is deployed to all citizens of Kentucky. We welcome you, sir. Whenever you are ready, please begin.

STATEMENT OF BRIAN MEFFORD, PRESIDENT AND CHIEF

EXECUTIVE OFFICER, CONNECTKENTUCKY

Mr. MEFFORD. Thank you, Mr. Chairman and Ranking Member

Upton and all members of the committee. I greatly appreciate the

opportunity to be with the committee today and to have the opportunity to speak to these important issues. I appreciate all the compliments this morning and hope to be able to have my testimony

live up to reach that bar that has been set.

Mr. Chairman, we agree with you that the Nation needs to know

where it stands with regard to broadband deployment. We need a

national strategy that shows us not only where broadband is but

where it can take us. The Nation deserves a model that leverages

the best of both the public and private sectors for the sake of

strong communities.

As I said, the compliments this morning have been plentiful, and

they are appreciated. However, I have to tell you that 3 years ago

things in Kentucky were starkly different. Relative to other States,

Kentucky consistently ranked near the bottom in terms of

broadband indicators. The Commonwealth was struggling to use

technology to address traditional challenges such as health care,

education, delivery of Government services and so forth. Jobs in

traditional industries were declining at an alarming pace. Inadequate broadband availability could be traced to much of the

State’s inability to complete in areas critical in a knowledge-based

economy. Significantly though, we also identified that broadband

availability was not the only part of the problem. The other half

of the equation was related to actual use and technology literacy

related to the enabling technologies of broadband.

In terms of availability, there were a series of issues that needed

to be addressed. First, the regulatory environment was not conducive to private investment in Kentucky at that time. The cost of

regulation was high, and the resulting uncertainties meant little

investment was occurring in higher risk areas. Second, very little

data existed to allow us to identify the specific broadband gaps in

Kentucky, resulting in ill-informed public policy and no means for

accurate strategic planning. Third, the business case for providers

to enter unserved areas was challenging at best. The cost of entry

was often prohibitive, and take rates were expected to be extremely

low.

So Mr. Chairman, leveraging the collaborative structure of a public-private partnership, ConnectKentucky developed and implemented a plan to address Kentucky’s broadband challenge, and following are the five most salient features of that plan.

First, it is a market-driven approach. ConnectKentucky has relied heavily on market forces to accelerate broadband availability,

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competition and adoption. We supported a deregulatory environment that has been embraced by all types of providers as conducive

to increased investment in unserved areas.

Second is the mapping component. To create a picture of

broadband availability, ConnectKentucky created broadband inventory maps. These maps helped promote the use of currently available service while also identifying where specific gaps remained.

Data are collected from all providers and depict service availability

based on technology type. Service level data is integrated into a

GIS format that allows for the layering of other data sources and

enables the most accurate determination of household-level detail.

Data layers provide additional demographic and community information to identify things such as density, planned development and

existing public assets such as water towers and other existing assets that can be used in planning for extended broadband coverage.

The third salient feature is data collection, analysis and reporting. In addition to maintaining broadband maps, ConnectKentucky

serves as Kentucky’s broadband data clearinghouse, collecting data

from numerous surveys and sources to, one, advocate for individuals and businesses who need broadband; second, to generate market intelligence for unserved areas; third, to provide a centralized

resource for public policy; and fourth, to understand and interpret

consumer interest and trends.

The fourth salient feature of this plan has been demand creation

and aggregation. In each Kentucky county, we have established

what we call Local eCommunity Leadership Teams. These teams

assemble as a cross-section of the community to create technology

strategies across multiple sectors for that specific county. Local

teams generate and aggregate demand by identifying ways to better use technology locally.

The fifth salient feature of this plan has been the public-private

approach which has served as a middle ground. The public-private

partnership approach is flexible and customizable to local realities.

It allows for the development of initiatives that solve deployment

challenges locally, that promotes the value of technology in a relevant context, improves technology literacy, and drives technology

adoption.

The bottom line of the ConnectKentucky model, Mr. Chairman,

is that it accounts for both supply and demand realities in a manner that respects consumer needs and encourages market-based results with an accurate and detailed picture of unserved areas coupled with efforts to improve take rates in all areas. Private sector

providers have invested aggressively in Kentucky, and consumers

and communities have reaped the benefits. I am glad to tell you

that the results bear out the merits of this model, and we can talk

more about that in detail, but as was mentioned earlier, Kentucky

has gone from 60 percent broadband availability to 93 percent in

the past 21⁄2 years.

Mr. Chairman, no doubt this is a challenge of historical proportions, and just as previous times called for a national response to

the need for railroads, highways, electricity and telephone service,

the broadband challenge calls for an aggressive and comprehensive

response that will ensure that America remains the dominant player in the global economy.

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Thank you, Mr. Chairman.

[The prepared statement of Mr. Mefford follows:]

STATEMENT OF BRIAN R. MEFFORD

Chairman Markey, Ranking Member Upton and members of the committee:

Thank you for the opportunity to speak with you today regarding the important

issues related to broadband mapping and data collection. Connected Nation is a national non-profit organization dedicated to addressing the broadband challenges facing the United States. Connected Nation is the parent company of

ConnectKentucky, our Kentucky-based organization that has served as the ‘‘demonstration project’’ for state-enabled broadband initiatives. It is the ‘‘Kentucky story’’

that I’m here to share with you today. Kentucky stands as the only State to date

with an accurate map of its broadband infrastructure. This is our story.

Four years ago, Kentucky faced the same challenges that are all too common in

states and communities across the country. The Commonwealth was struggling to

use technology-centered solutions to address traditional challenges related to education, healthcare, and the delivery of government services.

On the economic development front, jobs in manufacturing, farming, and mining

were declining at an alarming pace, with little evidence that lost opportunities were

being replaced with new technology-centric ones.

The indicators and impacts of Kentucky’s technology troubles were not hard to

identify. Kentucky consistently ranked low among states in terms of broadband

availability and technology literacy. The number of high-tech companies doing business in the Commonwealth relative to other states was extremely low, and college

graduates were leaving in droves, creating a troubling ‘‘brain drain’’ effect.

The Challenges: The reality of Kentucky’s technology challenge was troubling indeed. We realized that the foundation of broadband infrastructure was not adequate

for creating solutions that could address the opportunities of a new day: not adequate to provide widespread access to telemedicine, distance learning and e-government; not adequate for growing or attracting entrepreneurs and industry; not adequate for providing more opportunities to our communities whose children were

leaving to pursue opportunities elsewhere, never to return.

It was clear that the inadequacy of Kentucky’s broadband infrastructure could be

traced to much of the state’s inability to compete in areas important in the knowledge-based economy. Broadband infrastructure had been built into the state’s more

populous areas, leaving more rural areas unserved. The lack of service not only created the well-termed ‘‘digital divide’’ for rural residents, it also made it impossible

to develop statewide policies that depended upon access to broadband. For instance,

a statewide e-health initiative was not realistic when nearly half of the state’s physicians could not connect to broadband.

Significantly, it was discovered that broadband availability was only part of the

problem. The remainder of the challenge related to the actual use of broadband-related technology. Any resulting turn-around strategy had to be comprehensive in nature: addressing both supply and demand side challenges.

ConnectKentucky set out to identify the barriers that were inhibiting broadband

availability and use. In terms of availability there were a series of issues that needed to be addressed. First, very little data existed to allow us to identify the specific

extent of the broadband gaps in Kentucky. Providers didn’t know, policy makers

didn’t know and communities themselves didn’t know. Second, the regulatory environment was not conducive to private investment, causing little investment to be

made in more risky areas. Third, the business case for providers to enter unserved

areas was challenging at best: the cost of entry was often prohibitive and take rates

were expected to be low.

Challenges related to the use of technology included: lack of appreciation for the

value of technology at the household level, lack of cohesive interest in technology

at the local level, and lack of initiatives to encourage awareness and build interest

in technology at the state level.

The Approach: Leveraging the collaborative nature of the public-private partnership structure, ConnectKentucky developed and implemented a plan to address Kentucky’s broadband challenge. Key elements vital to the success of the plan include:

Mapping: To create a picture of where broadband did and did not exist,

ConnectKentucky created broadband inventory maps. The maps provided the vehicle

for ‘‘purpose driven data collection’’ to help promote the use of current service while

also identifying where specific gaps remain. Data layers (from the census bureau

and other state-level data sources) provide additional demographic and community

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information to identify density, planned development, and existing public assets,

such as water towers, that could be used to plan for extending broadband coverage.

To create the broadband inventory maps, data are collected from all providers and

account for service availability, based on technology type. For example, fixed wireless mapping utilizes a number of variables as inputs to produce propagation depictions that provide a geographic representation of where the signal actually reaches

based on terrain, ground clutter, et cetera.

Data Collection, Analysis and Reporting: As detailed above, ConnectKentucky collects service-level data from all broadband providers in order to produce broadband

inventory maps and provide corresponding gap analyses. Additionally,

ConnectKentucky serves as Kentucky’s broadband data clearinghouse with the intent to:

• Generate market intelligence for unserved areas at a local level to help providers identify investment opportunities and to effectively lower the cost of market

entry; • Provide a central resource for policy makers who are evaluating regulatory matters, assessing incentive programs, and generally tracking the status of broadband

deployment and use in Kentucky; • Collection and reporting of data from household and business surveys assist in

verifying ‘‘supply side’’ data, tracking progress, identifying barriers and opportunities, and tracking household-specific data related to speed of service, price points,

et cetera.

Demand Creation and Aggregation: Local ‘‘eCommunity Leadership Teams’’ create

local technology strategies across multiple sectors including: local government, business and industry, education, healthcare, agriculture, tourism, libraries, and community-based organizations. The local teams generate and aggregate demand by

identifying ways to better leverage technology in local communities. Additionally,

grassroots awareness campaigns are channeled through eCommunity teams, creating a local response to increasing awareness of the value of technology.

Public-Private approach to overcoming obstacles: ConnectKentucky’s structure is

self-replicating in terms of its ability to address challenges in a manner that is flexible and customizable to local realities. The public-private partnership approach allows for the development of initiatives that solve deployment challenges locally, promote the value of technology in proper context, improve technology literacy, and

drive adoption among households, businesses and communities.

The Results: ConnectKentucky has provided Kentucky with a comprehensive approach that accounts for both supply and demand realities in a manner that respects consumer needs and encourages market-based results. With an accurate map

of broadband services and gaps, coupled with efforts to improve take rates, private

sector providers have invested aggressively in the Kentucky market, and consumers

and communities have reaped the benefits. Data collection and reporting by

ConnectKentucky is ‘‘purpose-driven’’ and the purpose is to achieve ubiquitous

broadband coverage that enables job creation and growth, advanced education, improved healthcare and more efficient government services.

Over the implementation of this initiative, Kentucky has experienced a technology

turnaround. Consider the following successes that have occurred during the last 2

years:

• Broadband inventory maps have been created for the entire state, promoting

current coverage and allowing providers to better target unserved areas; • Broadband availability has increased from 60 percent to 93 percent of households able to subscribe (on track to reach 100 percent by the end of 2007), representing 504,000 previously unserved households and more than 1.2 million residents

that can now access broadband;

• Broadband use at home has increased 73 percent, a rate that has led the nation;

• Broadband use among Internet connected businesses rose from 65 percent to 85

percent;

• Home computer ownership grew by 20 percent while the national average rose

by 4 percent;

• More than $650 million in private capital has been invested in Kentucky (unprecedented);

• Nearly 2,000 home computers have been distributed to the homes of underprivileged Kentucky students through the No Child Left Offline program;

• eCommunity Leadership Teams have been established in every Kentucky county

creating grassroots technology growth plans across nine sectors;

• More than 70 percent of Kentucky counties now operate or are in the process

of constructing a meaningful web presence for e-government and online citizen services, up from about 30 percent just 2 years ago;

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• 22,000,000+ positive media impressions have covered Kentucky technology

growth.

The Impact: Over the last 2 years, more than 14,500 total technology jobs have

been created in Kentucky. During the same 2-year period, in the IT sector alone,

Kentucky jobs have grown at a rate 31 times the national growth rate: 3.1 percent

for Kentucky versus 0.1 percent nationally, representing a reversal from years prior

to program implementation.

Technology literacy has improved, the number of high tech jobs has increased, and

Kentucky communities are enjoying the return of their children. Consider these improvements related to Kentucky’s ‘‘brain drain’’ challenge:

• Today, 86 percent of all Kentucky graduates remain in Kentucky to live and

work—an 18 percent increase since 2000; • Since 2000, there has been a 50 percent increase in the number of out-of-state

students who remain in Kentucky; • Among graduates who are Kentucky natives, 95 percent of them now remain

in Kentucky; • The percent of doctoral degree students who stay in Kentucky has nearly doubled (from 27 percent to 52 percent).

Today in Kentucky entrepreneurs are thriving; businesses of all sizes are finding

an environment ripe for growth; rural communities are finding ways to diversify and

provide attractive opportunities for their children; primary schools and universities

are connected as never before, providing content and curriculum previously not possible. In short, as the broadband challenge has been addressed a strong foundation

was established to allow for technology-centric solutions and improvements to flourish.

Kentucky has demonstrated the importance of the national broadband discussion

and the relevance of technology to America’s ability to compete. Based on our experience in Kentucky, we know that technology diminishes the significance of distance.

In the past, opportunities to thrive have depended largely upon one’s proximity to

major markets. Technology has made the distance factor irrelevant. In other words,

with the availability of cutting edge technology, entrepreneurs and businesses can

thrive wherever they choose to locate. Technology has become the great equalizer

for individuals and communities alike—creating opportunities, fueling better education, higher quality healthcare, and better quality of life—regardless of where an

individual or community happens to be located.

This same dynamic, however, represents both a huge opportunity and major

threat for the United States. Other countries have invested in broadband towards

achieving universal access—and like Kentucky, they have managed to leapfrog their

previous standings to become a competitive force. It is the hope of Connected Nation

that this Congress can call the country to arms on this issue by conveying the true

sense of urgency for action. The nation needs to know where it stands with regard

to broadband deployment. We need a map that shows us not only where broadband

is, but where it can take us. The nation deserves a model that leverages the best

of both the private and public sectors for the sake of strong communities. No doubt,

it is a challenge of historic proportion. Just as previous times called for a national

response to the needs for railroads, highways, electricity, and telephone service—

the broadband challenge calls for an aggressive and comprehensive response to ensure that America remains the dominant leader in the global economy.

Thank you, Mr. Chairman, for the opportunity to present to this esteemed committee.

Mr. MARKEY. Thank you very much, Mr. Mefford.

The Chair will now recognize himself for a round of questions,

and we will begin with you, Mr. Ford. The draft bill suggests one

way to obtain greater granularity of data, namely moving to ninedigit ZIP codes. You suggest an alternative: census block data. Can

you explain why you think that is a better approach?

Mr. FORD. I think this is an issue of collection, presentation and

dissemination of information. I don’t think any of the data is going

to be collected as ZIP+4 or a census block because companies are

not going to provide information in that format. They are going to

provide information in the format that they have it in. It is put into

a mapping program, and as Mr. Mefford said, you can overlay all

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sorts of geographic data on top of that. My concern is how it is provided to the public in its form. A map is nice, it is pretty and it

is easy to see, but you can’t take information from a map visually

and use it to study it outside the organizations that have the data.

Mr. MARKEY. Let me go to you, Mr. Mefford. How did you deal

with this issue of using census data?

Mr. MEFFORD. Much as Dr. Ford explained in his testimony, we

used service-level data, so it is actually where service reaches, and

so layering other census data on top of that provides for an easier

path to analysis.

Mr. MARKEY. Mr. Cohen, many of the witnesses say that it is not

necessary for the FCC to measure and report on actual broadband

speeds. Rather, they say the FCC should measure something more

like best efforts broadband speeds. Can you explain why consumers

need to know what their actual broadband speeds are?

Mr. COHEN. Sure. Thank you. Well, speed matters. It matters up

as well as down. Oftentimes there is no attention to up, and we are

not just talking about downloading movies, we are talking about

sending health care information. We are talking about people’s

ability to communicate in two directions, and so we think it is critical to do it both ways. We are talking about education. We are talking about health care. We are talking about people who are disabled. Speeds matter in terms of how you use the service. Right

now that is basically obfuscated. People don’t even know what their

speeds are. And the other comment I would make is price is connected to speed. So we would say that the affordability, the universality, the take-up rate, as others have said here, is also critical

to measure.

Mr. MARKEY. Thank you.

Mr. Scott, we have heard much from industry and others on why

the OECD’s broadband rankings supposedly understate the extent

of broadband deployment in the United States. Now, we had a

hearing on that issue with leaders from around the world a couple

of weeks ago. In fact, the U.S. State Department saw fit to send

OECD a letter to complain. I understand that you have looked into

these complaints. Can you tell us what you found?

Mr. SCOTT. We took those complaints very seriously and analyzed some of them to see whether or not they changed our ranking, and in particular we looked at the special access lines, the big

business lines that the OECD didn’t count in their numbers, and

we went to the wireline bureau——

Mr. MARKEY. That is the reason they said that we really don’t

get the full credit, because we have special access lines here in the

United States, and they don’t count them in OECD.

Mr. SCOTT. So we looked at that, and we called up the wireline

bureau and said how many special access lines are there that

would be in that category, and they didn’t—as is typical at the

FCC, they didn’t have an exact number. They estimated it for us

at around 600,000. So we brought that up to a million just to be

safe, and we refactored that into the OECD numbers and found

that it didn’t change our position relative to other countries.

Mr. MARKEY. But what ranking did we have before you included

special access? What ranking did we receive?

Mr. SCOTT. It was 15.

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Mr. MARKEY. And what did we move up to after you included

them?

Mr. SCOTT. We didn’t move up.

Mr. MARKEY. We stayed the same?

Mr. SCOTT. Yes.

Mr. MARKEY. Oh. That wasn’t clear in the testimony we had 2

weeks ago and the complaints that we received. So it is not that

big of a difference counting the special access?

Mr. SCOTT. No.

Mr. MARKEY. Very interesting.

Let me complete my time and turn and recognize the gentleman

from Michigan, Mr. Upton.

Mr. UPTON. Thank you, Mr. Chairman.

Mr. Mefford, when was it that ConnectKentucky actually began

to crystallize in terms of a thought, in terms of beginning to work

on this project, and what was the cost and how were you able to

raise the money for it? I think it was about $12 million, but you

might confirm that for me.

Mr. MEFFORD. Yes, sir, I appreciate the question. It was about

3 years ago that statewide effort began to crystallize, as you say,

and the sources of funds over the previous 3 years have——

Mr. UPTON. Did you have an assessment through chambers of

commerce, or did the State of Kentucky help your county support

industry?

Mr. MEFFORD. Yes, sir, primarily it has been the support of the

State. We have had funding through grants from our State economic development cabinet, grants from our local development

agencies. We have also had Federal support from the Appalachian

Regional Commission and also some level of support from the

Rural Utilities Service.

Mr. UPTON. But the total is about $12 million? Is that $12 million a year?

Mr. MEFFORD. No, sir. I am sorry. It is actually roughly $3 mil- lion, $3 to $3.5 million per year total. I should say that some of the

funding also comes from some private-sector companies as well.

Mr. UPTON. And now in essence it is done, right? What are your

ongoing efforts?

Mr. MEFFORD. Well, we have surpassed some of the goals we set

for Kentucky 3 years ago, but there is still work to be done, and

so we are at 93 percent availability. We pledged 100 percent availability by the end of this year. There is also work on the demand

side which, as you know, never ends. I mean, we are working with

every community in Kentucky to increase the use of the technology.

Mr. UPTON. Now, I know it is viewed as even though you did receive some State and Federal funds, what is the share as a percentage from Government funds versus private funds that you might

have gotten from industry or individuals?

Mr. MEFFORD. It is roughly 80/20.

Mr. UPTON. Eighty/twenty?

Mr. MEFFORD. Yes, sir.

Mr. UPTON. Government funds?

Mr. MEFFORD. Yes, sir.

Mr. UPTON. And as you began to operate this, as I understand

it, one of the critical factors was that the information was kept conVerDate 11-SEP-98 10:58 Jun 03, 2008 Jkt 000000 PO 00000 Frm 00099 Fmt 6633 Sfmt 6633 Q:\DOCS\110-48 SCOM1 PsN: SCOM1
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fidential in terms of what you actually gleaned from the different

providers of broadband. Is that right?

Mr. MEFFORD. That is right. That is correct. We established a

non-disclosure agreement that establishes the level of detail——

Mr. UPTON. And was that absolutely critical in terms of the success that you were able to—in terms of cooperation that you were

able to get from those providers?

Mr. MEFFORD. Yes, sir, it was certainly one of the critical factors.

It helped address the sense of vulnerability among providers that

the proprietary data would be made publicly available. We had

some measures to be able to secure that. Also, another critical factor to them being willing to give us data was the demand-side work

and the fact that they were seeing take rates increase almost immediately as a result of having their service areas mapped and also

by providing information about the gaps that existed. It was essentially market intelligence that helped them better target investments in unserved areas.

Mr. UPTON. And once the providers saw the unmapped areas

that were there, how willing was the industry to in fact deploy into

those areas?

Mr. MEFFORD. I think that is perhaps the best news of this effort

is that they were extremely willing, once the gaps were clearly illustrated and we could begin overlayering data such as household

density and plan development, they could see where the best places

were to invest pretty quickly.

Mr. UPTON. And in terms of what was in those unmapped areas,

I mean, did you—I look at my district where we have, as an example, Western Michigan University is in Kalamazoo and that was literally one of the very first public educational institutions that became a wireless entity. Did you identify hospitals and major employers and universities and other things that would be a magnet

towards deployment of that?

Mr. MEFFORD. Yes, sir. We do that on the community exercise

that we do with the local communities. We bring local government,

we bring business and industry, health care, education, agriculture,

tourism, local development——

Mr. UPTON. Did you work with local chambers and different economic development engines as well then in——

Mr. MEFFORD. Yes, sir, we work with those and all those other

sectors I mentioned in all of Kentucky’s 120 counties.

Mr. UPTON. And the last question, since my time is running out,

as you looked at the speed, particularly the FCC’s 200 kilobits definition, how important was it to actually measure the speed and

make that available in terms of what was there?

Mr. MEFFORD. We didn’t set a minimum threshold frankly because we felt that we didn’t want an ideal or a perfect version to

be the enemy of the good, and so there are communities—we have

some of the poorest counties in the Nation among our Kentucky

counties and so there are first step broadband technologies that are

relevant and helpful and empower those communities whereas advanced services, fiber and so forth just would not be a reality. We

have mountainous territories that just clearly will not receive some

of these higher-end technologies in the short term. So I can point

to examples across the board. We had one particular example of a

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lady who contacted us in far western Kentucky who said I have

multiple sclerosis and I cannot keep commuting an hour to work,

I need broadband and I need it today, and we were able to work

with our providers and get her broadband. It is not at speeds mentioned in this draft. It was at a lower speed, but she reported to

us immediately that this technology has changed my life, I can now

work from home and I can enjoy the company of my kids and I

don’t come home dead tired every day. And so with that example,

I would say that it was important for us not to eliminate the opportunity to deploy that type of technology.

Mr. UPTON. Thank you.

Mr. INSLEE [presiding]. Thank you. We will recognize Mr. Green

of Texas.

Mr. GREEN. Thank you, Mr. Chairman. I should have done this

earlier. I want to recognize not only our former colleague, Steve

Largent. Every once in a while we used to get to play basketball

together. I can never match your jump. I know that. But also,

President Cohen from CWA, I have to add the disclaimer, I am a

CWA member, and for those of you who think I can go out and fix

your broadband, I came from the publishing sector, and government work over the years and the legislature and Congress has ruined me for even printing a newspaper anymore, much less fixing

your telephone.

Mr. McCormick, section 2 of the draft legislation defines a

broadband connection as 2 megabits per second downstream and 1

megabit per second upstream. Clearly the current definition of

broadband used by the FCC of 200 kilobits per second downstream

and 200 kilobits per second upstream is by many standards extremely low. What do you think the standard for broadband should

be?

Mr. MCCORMICK. Congressman, the purpose of this legislation is

to figure out who has what, and as Mr. Mefford just testified, there

are consumers who if they can get broadband at the speed of four

times the speed of dial-up, it gives them the ability to have speeds

just as fast as you can turn a page in a book or change the channels on a TV. That is a huge advancement. It is important to us

to know what areas have even that and what areas do not. The

FCC currently looks at four different tiers of broadband service.

The first tier goes from 200 kilobits per second to 21⁄2 megabits per

second. We think it is important to map everything, to have a comprehensive map. We realize that broadband speeds are going to

continue to increase with technology, but the goal here is to be able

to provide consumers with access that is superior, far superior to

what they have today and to figure out who has it and who doesn’t.

Mr. GREEN. In follow-up for Mr. Mefford, so you approach it as,

the minimum level would be 200, but it is a consumer issue and

consumer information, so they would know that if they are moving

into a community, they would know that that is the level of the

broadband that is available, not maybe what they are leaving or

what they would hope to have but that consumer information. Is

that correct?

Mr. MEFFORD. Yes, sir, that is correct.

Mr. GREEN. Mr. Cohen, you mentioned in your testimony that

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stream and 1 down. Is it a good idea for Government to set these

standards? Because in Houston, it seems like we are fortunate to

have competition where people will pay for the higher speeds.

Mr. COHEN. Yes, I mean, we think there needs to be labels on

this of some sort to differentiate so that consumers will know, policymakers will know what actually exists there. If we call everything high speed and blend it all together from 200 kilobits up,

here is a chart, here is what is going on in the rest of the world

and we are virtually off the chart. So, we would say that speed

matters. It is better to have 200 than 56 kilobits, but we need to

set a goal. So Japan’s goal was 100 megabits a second by 2010 to

every house. What is our goal? What are we after? We can’t mandate it, but what are our goals? To set the goals, we need to know

what the speeds are.

Mr. GREEN. You mentioned considering a new definition for second generation broadband to carry full screen and high def video.

The panel heard last week from Mr. Cuban that it would take

somewhere in the neighborhood of 1 gigabit per second downstream

to achieve. Do you think that figure is accurate? And you mentioned in your testimony how long it would take to download a

video. If so, what do you think it would take to upgrade the current

infrastructure to reach those speeds?

Mr. COHEN. That is a great question. What it will take is publicprivate partnerships, not just things like ConnectKentucky but actually figuring out, much as they have done in the rest of the world

that is way ahead of us now, how you mix together public policy

goals with private—driving up the kind of numbers that Mr.

McCormick talked about on an ongoing basis. Because what we

have learned is, this country was first, not only first to be there

but led in terms of international deployment, international development, infrastructure investment, and we would probably say that

some of the things we did had unintended consequences and interfered with us keeping that leadership role. So, what it will take to

stimulate private-sector investment is a longer story, but the first

step along the way is to set goals and to figure out exactly where

we are and then find out what do we have to do to meet the goals

to keep us in step with the rest of the world.

Mr. INSLEE. Mr. Green, thank you. We are going——

Mr. GREEN. I understand, and I would like to ask a couple of

questions in writing if I could.

Mr. INSLEE. Thank you. I appreciate it. We have got about 13

minutes. We will try to do two more. We will go to Mr. Barton of

Texas.

Mr. BARTON. Thank you, Mr. Chairman. I will be brief.

The most important question I have is to Mr. Largent. Are you

willing to come out and pitch batting practice for the Republican

baseball team in the next month as we get ready to take on Mr.

Inslee and Mr. Stupak and Mr. Doyle on the dark side?

Mr. LARGENT. I have volunteered my services for both.

Mr. BARTON. For both?

Mr. LARGENT. I am bipartisan.

Mr. BARTON. My God. What a bummer.

Mr. LARGENT. It didn’t help last year.

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Mr. BARTON. What a difference an election makes, right? All

right.

Well, now that we have that out of the way, Mr. McSlarrow, I

scanned the written testimony, and I tried to listen to most of the

witnesses verbally. You seem to be kind of where I am. This isn’t

the worst idea that has ever hit the pike, so we ought to be for it

in some way, but you seemed a little bit ambivalent about it, which

is kind of where I am. Wouldn’t we be a little bit better off maybe

to just inventory the different speeds as opposed to set this 2 megabit per second standard and just inventory what is out there? I

may have misinterpreted what you said, and if I did, it won’t hurt

my feelings if you tell me that.

Mr. MCSLARROW. I think—here is the way I would put it. I think

it is useful to inventory what is out there precisely if you are thinking about unserved or underserved areas so that we know what we

have out there. I think it is a tough question about whether or not

there should be some standard, some metric above which and below

which where you think of broadband or not broadband, because I

don’t know how you define that. I really don’t. And it is changing

and developing every day. But it is probably not harmful to try to

grapple with that question, but I think it more towards your point.

It is more important to get an honest, candid assessment of where

we lack broadband, where we lack anything, first of all, and what

is out there so that actual competitive pressures and the public-private partnerships that we have all been talking about can focus on

that kind of problem and actually provide a meaningful solution.

Mr. BARTON. Mr. McCormick, your association testified enthusiastically in favor of this legislation. Assuming that we do it, what

would your members do with it?

Mr. MCCORMICK. We are enthusiastically in favor of having an

idea of where we are. We are not in favor of redefining broadband

to be 21⁄2 megabits, and what our members would do with it is to

continue to work with public-private partnerships like

ConnectKentucky, to look to build a basis for those who want access to broadband, who will, in fact, take if it is deployed to that

area, and we will also use it to help researchers and policymakers

to understand the level of competition out there, and because technology has brought us to a place where barriers to entry are very

low, they just take investment and use it to encourage investment.

Mr. BARTON. Does any of the panel think that if we did this inventory at the national level, it would change your business plan?

Would decisions be made differently than if this information was

not available?

Mr. MEFFORD. Congressman Barton, I would respond to that.

Our history in Kentucky, we did see that. In fact, having that

tracking and even tracking different speeds informs the business

plans of providers in a significant way. In other words, I also think

tracking lower speeds would encourage other providers outside of

those areas to invest or current providers to invest in higher-bandwidth technologies.

Mr. BARTON. Mr. Chairman, I am going to yield back because I

know you want to get one more round in, but I want to thank the

panel for participating in the hearing.

Mr. MARKEY. I thank the gentleman from Texas.

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I am going to advise the gentleman from Michigan, Mr. Stupak,

that there are 8 minutes and 47 seconds left for the vote on the

floor, and I am going to recognize the gentleman from Michigan for

as much time as he may consume at this point, and then if he

could recess the hearing, and then I intend on returning after that

roll call. There will be four 2-minute roll calls. I will return at that

point after those 2-minute roll calls for approximately a 20-minute

period before we then have a vote on the recommittal motion.

So I recognize the gentleman from Michigan, Mr. Stupak.

Mr. STUPAK. Thank you, Mr. Chairman. I am sorry Mr. Barton

left because it should be noted that Mr. Largent has pitched Democratic batting practice the last 2 years before the election. So I just

want to make sure Joe understood that.

Mr. McSlarrow, if I may, thanks for your testimony on the draft

and broadband deployment. I appreciate your acknowledgement of

the problems facing rural America. I know you have had some concerns about the Rural Utilities Service, subsidized broadband loans

and grants going to communities where there are already multiple

broadband providers. How would this draft legislation help that situation or at least address those concerns?

Mr. MCSLARROW. Well, I think in two ways. One, the arduous

loan program, the applications, a proxy for any Government program, is trying to target funds for support to rural communities

suffers from the fact that they don’t actually know which communities have existing providers, whether or not it is one or more providers in a competitive market, and so therefore they are dependent to some extent on the applicants coming forward and saying I

would like some of this money or I would like a loan, here is the

state of play in this area, and so what we have seen just as a matter of practice is that often those loans, the guarantees that have

been granted to providers, are actually going into suburban areas,

which is the last place anybody really intended that they go. So I

think both in terms of the agency and I think keeping people on

this in terms of applications, it would benefit.

Mr. STUPAK. Well, I authored the Rural Utilities Service provisions in the House working with the Senators from Dakota there,

and now we are getting the farm bill up so many of those concerns

like Houston really wasn’t a rural area, but yet we tried to do some

in my district, and they said we weren’t rural enough. It doesn’t

make any sense. So we are going to try to strengthen that, but if

you have any further concerns on that, please let us know because

that part of the farm bill is moving quickly.

Mr. Scott, thanks for your testimony. You talked about the need

to establish the evolving definition of high-speed Internet access.

Do you think it would also be useful to have data broken down by

multiple categories of high speed? In addition, do you think that

wireless should have a different standard? Isn’t the broadband experience of sending a text messaging on a Verizon cell phone different than downloading a movie over Verizon FiOS?

Mr. SCOTT. Absolutely it is different, and we may have to have

a lawyer-off here, but I don’t see anything in this bill that prohibits

the FCC from doing inventory of all the broadband lines available

that are not dial-up. I think that changing the standard for high

speed is more akin to what Mr. Cohen alluded to, which is setting

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a standard, setting a goal, and having an evolving standard so that

we are trying constantly to raise the bar so that we can advance

and try to get back up with the rest of the world, as you can see

on Mr. Cohen’s chart. I think ultimately the key point here is the

value for the consumer measured in the cost per unit of speed. Because if you look at it, I mean what we found is, in a lot of places

there is broadband available. Over 90 percent of households that

have a cable line going to the house have cable modem capability,

and sometimes that is the only one, and it is expensive, and it

could be price that is the problem, but in a lot of cases people have

it available, and they are just not buying it because they don’t see

it as important enough to buy. So we see the speed prospect as a

question of value. The faster the network, the more cool stuff there

is to do and the more likely it is that people will buy it.

Mr. STUPAK. Mr. Largent, would you care to comment on that

question? Do you think data should be broken down by multiple

categories of high speed, especially do you think wireless should

have a different standard since——

Mr. LARGENT. Well, I think it should be broken down by speed,

because I think it serves as an incentive to get faster, and faster

and that is what is taking place in the wireless industry. We were

a lot slower than we are now, and we have picked up the pace and

that is going to continue over time. Because I think measuring all

speeds from 200 kilobits up is actually a great incentive to continue

this move to faster and faster speeds.

Mr. STUPAK. And then you get into the argument of Net neutrality, because we saw that before if you start breaking it down by

categories.

Mr. LARGENT. What is that about neutrality?

Mr. STUPAK. Net neutrality.

Mr. LARGENT. What about it?

Mr. STUPAK. Well, they argue the Internet is no longer accessible

to everybody because of the data and how much data you can move

at different speeds, then we get back into that old argument.

For the entire panel, if you want, just put it in writing. I would

appreciate because we have 4 minutes left in that vote, and we are

probably going to be late. But anyway, legislation directs the Commission to compare broadband deployment in the United States

with 75 communities in at least 25 countries abroad. I think it is

a good idea. However, I would like to see more of a rural-urban

comparison. So if you would, would you support including rural

communities among the list of 75, or are there any other ways we

can do this comparison other than what is dictated? So if you have

some ideas on that, other ways, especially, we would like to hear

it. If you could send the comments to the committee, the members

would appreciate it.

And with that, on behalf of the chairman, we are going to recess

until after those 2-minute votes. Thank you all.

[Recess]

Mr. MARKEY [presiding]. Ladies and gentlemen, if you would, the

subcommittee is reconvened, and after waiting for another 10 seconds, we will turn and recognize the gentleman from Nebraska,

Mr. Terry.

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Mr. TERRY. Thank you, Mr. Chairman, and I appreciate you having this hearing. As noted in one of our last hearings when we

were comparing broadband access in America to the rest of the

country, Mr. Ford was there, and one of the things that we noted

is, there is no inventory for us to be able to really see if we are

talking apples to apples or something else here, and so I do think

this is an important first step. And as Rick Boucher and I drafted

the USF reform bill, we actually looked at the ConnectKentucky,

and frankly I think what we are trying to do there meshes with

the concept of the public and private, and so we can still use now

the USF with the public commitment to it, especially in the highcost areas, so I see how these two issues merge or at least that the

is the conclusions that Rick and I came to when we studied the

ConnectKentucky.

I do have questions though about the inventory or the mapping

as we call it here, just to make sure that we are talking about the

same things and whether 2 megs or 1 up, down, sideways, whatever. I do think we need to initially take an inventory of what we

have got and then set the goals, and I think first of all the chairman is correct that this committee and subcommittee is the one

that should be setting the goals to define broadband. It would be

interesting though to see if we set it at 2 or 3 or 5 or 1 or whatever

it will end up being, because I am sure at some point in time we

are going to do that, that we do it so we don’t leave certain technologies out at this point or, for example, Mick Jansen from Great

Plains Telecommunications of Blair, NE, which is only a few miles

from my home in Douglas County, NE, and is one of my mentors

on telecommunications policy, he has a loop that is 60 miles, 30

miles to the house, one resident, and then back, and that is difficult maybe for him right now to push 5 megs or 3 megs, but he

can do 1 right now with the 60-mile loop. So I think that we need

to kind of put that into the inventory.

But I want to ask Mr. McSlarrow and Mr. McCormick this, and

I mean this in a sarcastic way, but it makes my point in that the

broadband services to a customer in the billing, it is very confusing

to a customer because what is advertised many times is rolled into

a bundle of package instead of stand-alone, and I joked that the

bills for your broadband telecommunications, video and all of it are

becoming more complicated than the hospital bills. So when we do

this, what would you suggest be the boilerplate, because I think

maybe every town, every system may have a different scenario of

what they bundle, how they can bundle, what speeds they bundle,

and so I am not sure what the criteria should be so we can have

apples-to-apples comparisons as we map. So I will let Mr.

McSlarrow and then Mr. McCormick answer what the criteria

should be so that we are on an even playing field in our comparisons.

Mr. MCSLARROW. Well, as a consumer of all these products, I am

not going to push back about confusion at all. I mean, I don’t understand any of it, to be honest.

Mr. TERRY. I appreciate you sharing that with us.

Mr. MCSLARROW. Ironically, though, in an effort to disclose as

much information to the consumer, we make it more confusing. I

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ously with cable modem service but this is a service, and first of

all, it is asymmetrical, so you have different downstream speeds because that is where most of the capacity needs to be used, as opposed to upstream where you just may be pinging a request. Second of all, it is a shared network, so things are happening during

the day. If your neighbor is downloading movies right next door all

day long, it is going to affect the speeds. The language tends to be

vague so there is sort of—you are buying for a certain price a

speed, say, in my case I have got a 15-megabit service for cost. I

know at least what that means to me is that when I go out and

I have a demand for something on the Internet, it is going to supply that for that burst of activity. I don’t need it for other times,

I need it then. But I also have to know that it is a shared network,

and so I think thinking about this as an average across periods of

the day gives you a better sense of the metric of what you have.

But I don’t know and I don’t really have a creative answer for how

you balance maximum disclosure of what is actually happening

with avoiding consumer confusion. I don’t know if there is something, a one-size-fits-all, that will apply to every broadband service

provider.

Mr. TERRY. I appreciate that. Mr. McCormick, I want to add on

this question about whether or not any of your members and then

come back to Mr. McSlarrow and ask him if any of your members

are willing to give proprietary information to a Government agency

subject to FOIA.

Mr. MCCORMICK. No. With regard to that, we are reluctant to

give proprietary information to a Government agency if that information is subject to FOIA. There are certain FOIA exceptions, but

I think you have a very important point, which is part of investing

and deploying broadband is to develop a business plan that allows

you to differentiate your product in the market and compete. What

we have today is, we have a lot of competition. You raised the issue

of bills. Historically in our industry, consumers were charged for

telephone service based upon minutes of use and distance traveled.

That is no longer the case today because of competition. And so I

think that as we are mapping, what we would hope is that for purposes of looking at coverage areas and doing inventories, that there

would be some categories of service so you know what speeds are

available to consumers. But then what we are going to have is, we

are going to have vigorous competition on speed, quality of service

and price, and we are going to have it on a multi-platform basis.

The three of us right here are going to be aggressively competing,

our industries competing, and the consumer will benefit from that

because each of us is going to do our best to tell the consumer why

we think our offering is preferable than the competitor’s.

Mr. MCSLARROW. And just to echo Walter, we think it is important to gather as much information as possible. If it is proprietary,

we would urge the committee to ensure that not be disclosed, including under FOIA.

Mr. TERRY. Would pricing of 2 megabits down be——

Mr. MCSLARROW. I think if it is publicly available. Pricing information, that is not the issue.

Mr. TERRY. I yield back.

Mr. MARKEY. The gentleman’s time has expired.

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The Chair recognizes the gentleman from Mississippi, Mr. Pickering.

Mr. PICKERING. Mr. Chairman, thank you, and I appreciate the

opportunity to have this hearing. As we go forward, it is very important for us as policymakers to be able to have accurate measurements of where we are as a Nation so that we can come up with

the right policies.

Mr. McSlarrow, Mr. Largent and Mr. McCormick, I would like to

just ask two quick questions of each of you, or maybe just one in

combination for each of you to answer. It is critical to get it right

where we are as a Nation, but at the same time there is a chicken

and egg. What are the policies that will actually help you build out

and deploy? And if you could, what are the one or two things that

you would recommend from a policy perspective for us to get where

we hope to be as a Nation on broadband deployment? And from the

700 MHz to the USF deliberations, are there any other regulatory

or other impediments that you see? What are the two recommendations that each of you would give to those of us here to make the

right policy for the broadband deployment as we go forward?

Mr. MCSLARROW. In 1996, this committee led an effort in the

past Congress to deregulate rates for cable. It didn’t actually take

effect until 1999, and literally that year it spurred over $100 billion

in investment where we rolled out broadband in America, so it is

pretty clear to me that continuing that policy forward is a good

idea for every provider in the marketplace. And the other point I

would make is that for the broadband pipe that we supply, much

of it, as you know, is used up by analog TV channels. Out of the

750-meghertz pipe, 450 of it is used up by analog. So when we are

doing our digital transition, just to stay on message here, it is vital

that we don’t have an agency like the FCC impose dual carriage

or multicasting requirements where we suck up capacity that we

could free up to roll out the 100 megabits of service that I think

every member of this committee says the American people want.

Mr. LARGENT. I thank you for the question, Congressman Pickering. I would say first of all, the great thing about the wireless industry is that we continue to evolve and get better and better. I

brought a phone from maybe the early 1990s, late 1980s. This is

where we were just 10 years ago, and this is where we are today,

and we continue to evolve and get better and better and better and

we are going to continue to do that, and it is because of the competitive pressures that we have in the marketplace that we are

doing all of these great things. But you asked about additional

points that we would like to make at this hearing. I would say 700

MHz is really critical for our industry to have additional spectrum

to operate on and the 700-MHz auction being scheduled at the end

of this hearing hopefully that that happens on schedule. It is very

important to our industry, particularly if we are talking about deployment of broadband. That is going to be real key for us.

Following through on the AWS auction is also highly critical. The

spectrum has already been auctioned, but we have some—we could

use some help from Congress, encouraging—NTIA has done a great

job but maybe some help in encouraging some of the Government

users to move off the spectrum as quickly as possible so that we

can roll it out to our customers as quickly as we can. The universal

104

service cap that the Joint Federal-State Board has recommended

would be highly harmful to our industry, in particular in rolling

out the type of services that we are talking about in this hearing

to rural America and so that is very much of a concern for entry.

And finally, the last thing I would say is, the analog sunset is another way that we have given over 5 years’ time to get people off

of this analog—have this analog sunset occur and yet we still have

a few people that want to hang onto the analog, and this is spectrum that we could use again in a more effective manner as we roll

out digital if we can actually sunset it now after the 5 or 6 or 7

years that we have given people to move off of it. So those would

be the few items that I could think of that we would want to make

in this hearing.

Mr. MCCORMICK. Congressman Pickering, thank you. It is a

great question because we all want to see greater broadband deployment. We think it is the future of our country. I would say

three things. First, we are at the place with unlicensed spectrum

wireless technologies, new technology, broadband over power line,

where the barriers to entry are now extremely low. All it takes is

investment. So first, allow those who invest in offering broadband

to offer over broadband all that broadband can offer—video, entertainment, home security applications, whatever. If they invest, let

them do it. Number 2, we think programs like mapping and doing

an inventory coupled with public-private partnerships like

ConnectKentucky and modest changes to the RUS program would

really help with investment. And third, tax policies. We think that

to extend the Internet tax moratorium is a very important thing to

do.

Mr. PICKERING. Mr. Chairman, thank you.

Mr. MARKEY. I thank you, Mr. Pickering.

What I would like to do is ask each one of you to give us a 1-

minute summation of what you want the committee to remember

about your testimony as we are going forward. We will go in reverse order of the opening statements of the witnesses, and we will

begin with you, Mr. Mefford.

Mr. MEFFORD. Thank you again, Mr. Chairman and all members

of the committee, Ranking Member Upton. The bottom line of the

ConnectKentucky model is that it is a mission-driven approach

that is comprehensive in nature. It accounts for mapping and data

collection to impact both supply and demand of broadband availability and so with a mission to fill the gaps and the mission to increase take rates, we use that to drive the policies and the programs of ConnectKentucky, and again the outcomes sort of bear

out the merits of the model.

Mr. MARKEY. Hold on just one second. That bell means that we

have 15 minutes to vote, and there will be one vote that will then

be followed by a second vote, which will be the final passage of the

legislation which we are considering on the floor, which is the Defense bill, but please continue again, Mr. Mefford.

Mr. MEFFORD. Thank you, Mr. Chairman. I will close with the

key point that the public-private nature of ConnectKentucky has

been critical to the success and that structure allows a degree of

flexibility that allows us to address market realities on both the

supply and demand side at a very local and granular level, and so

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I would encourage the Chair, the committee, to consider this. I

commend you again for the work on this draft, and we look forward

to supporting your work going forward.

Mr. MARKEY. Thank you.

Mr. Ford.

Mr. FORD. There are four things that have struck me today as

I have listened to the testimony and the questions. One is, I can

do about eight pages in 5 minutes. The other is that all of

broadband providing a service that allows someone with M.S. to

work from home and be with their children and be a productive

member of our economy or to download entertainment and turn the

computer into a television set, if we start focusing on high

download speeds for entertainment purposes, we are missing the

true benefit of broadband, which is allowing people to contribute to

the economy, and I think that is very important to remember. The

other point is, if you don’t collect 200-kilobit data in this mapping

project, you are not going to know how bad the FCC’s data was.

You are going to be comparing apples to oranges again. I think that

is worth looking into. And third, the goal of ConnectKentucky and

I think the goal of any program like this is 100 percent availability

or close to 100 percent availability of broadband service. I don’t

know that looking at Sweden and Iceland says anything about that.

We have a goal, 100 percent. That is our target, not what Japan

is doing, not what Sweden is doing and not what the U.K. is doing

but what we want, which is universal coverage. Thank you.

Mr. MARKEY. Thank you.

Mr. McCormick.

Mr. MCCORMICK. Mr. Chairman, we think a map makes a lot of

sense. We fully support it. Number 2, we think the more comprehensive the map, the better it is, so we think that it should map

all broadband take rates, all service providers. Three, draw upon

what works with public-private partnerships in putting together

the map, and finally, the best data available may not come from

ZIP codes. Let us look for gathering it in a way that is the best

data available.

Mr. MARKEY. Thank you.

Mr. Largent.

Mr. LARGENT. Mr. Chairman, I would just say that CTIA and the

wireless providers support what you are trying to do. We would

just say that there are three things that we would offer as changes.

That would be to count all broadband from 200 kilobits and above,

that carriers provide their own coverage map. We are providing

those maps now. NTIA can then manipulate the data however they

would like to through ZIP code, census tract or any other useful

measure, and the data collection should be done at the Federal

level, not the State level.

Mr. MARKEY. Thank you, Mr. Largent.

Mr. McSlarrow.

Mr. MCSLARROW. Mr. Chairman, thank you for your leadership

on this issue. I think as others have said, I think we would urge

you to focus on doing the most comprehensive inventory you can

really with a goal toward leveraging that information to identify

those areas that are unserved or underserved so that you as policymakers, whether it is with Government help or public-private partVerDate 11-SEP-98 10:58 Jun 03, 2008 Jkt 000000 PO 00000 Frm 00110 Fmt 6633 Sfmt 6633 Q:\DOCS\110-48 SCOM1 PsN: SCOM1
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nerships, can identify those areas and figure out how we can expand broadband connectivity to all Americans. Thank you.

Mr. MARKEY. I thank you, Mr. McSlarrow.

Mr. Scott.

Mr. SCOTT. Mr. Chairman, Mr. Ranking Member, from a consumer perspective, it is a good bill, a good idea. It is high time that

we did it. Looking at the broadband data that we have today, we

can see we have some problems, but the data is not detailed

enough for us to figure out how to best solve those problems. We

need data down to the neighborhood, town and city level in order

to evaluate the true state of availability and the true state of adoption, not just by technology but also by speed and price. It will help

us to close the gaps, and it will help us to raise penetration rates.

We also need to use that data to target direct investment, enhance

competition and create programs that encourage people to subscribe to broadband by getting them the equipment and the training that they need. This bill will help us also assess the long-term

trends, which will help us get back on top of the world in

broadband. I think it is a good move, and we look forward to working with the committee.

Mr. MARKEY. I thank you, Mr. Scott, very much.

Mr. Cohen.

Mr. COHEN. Thank you. One, mapping, it is a good idea. We support the draft. Two, the global perspective does matter. It is about

economic development worldwide. Competitiveness matters. It is

critical in rural economic development what the speeds are. We are

off the chart. We need to get back on. Three, price matters, and

being able to understand the price of speed matters as well. And

fourth, goals matter, and this committee setting goals, it is a moving target. It is nothing to be frustrated by. The speeds need to go

up. The affordability needs to go up. The universality needs to go

up as the years go on. Thank you.

Mr. MARKEY. Thank you, Mr. Cohen, very much, and we thank

each one of the panelists. Unfortunately, because of these roll calls,

some of the Members who had evinced enormous interest in this

subject have not had an opportunity to question the panel, and I

am going to make a unanimous consent request that those Members be allowed to submit written questions to the witnesses, and

I would ask that the witnesses respond in a timely fashion to those

questions. Because of the press of business in the Congress for the

rest of the afternoon, unfortunately I will have to adjourn the hearing at this time with my apologies to the other committee members.

My request to the panelists is that you stay close to the subcommittee on this subject. You can obviously pick up the level of

interest that exists in this subject. We would like to pass legislation, have it make sense, have constructive suggestions included in

the final draft of the legislation that we consider before the subcommittee. I don’t think we could have put together a more expert

panel to open the discussion. We thank the State of Kentucky for

being the national leader on this and the inspiration for the legislative discussion which we are having.

And with that, this hearing is adjourned.

[Whereupon, at 12:30 p.m., the subcommittee was adjourned.]

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