```

[Senate Hearing 114-607]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 114-607

                           OVERSIGHT OF THE 
                   FEDERAL COMMUNICATIONS COMMISSION

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

                                 HEARING

                               BEFORE THE

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 2, 2016

                               __________

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

             
       
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                   JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi         BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri                  MARIA CANTWELL, Washington
MARCO RUBIO, Florida                 CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire          AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas                      RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska                BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas                  EDWARD MARKEY, Massachusetts
DAN SULLIVAN, Alaska                 CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin               TOM UDALL, New Mexico
DEAN HELLER, Nevada                  JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado               GARY PETERS, Michigan
STEVE DAINES, Montana
                       Nick Rossi, Staff Director
                  Adrian Arnakis Deputy Staff Director
                    Rebecca Seidel, General Counsel
                 Jason Van Beek, Deputy General Counsel
                 Kim Lipsky, Democratic Staff Director
              Chris Day, Democratic Deputy Staff Director
       Clint Odom, Democratic General Counsel and Policy Director
                            
                            
                            
                            
                            
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 2, 2016....................................     1
Statement of Senator Thune.......................................     1
Statement of Senator Nelson......................................     3
    Letter dated March 1, 2016, to Hon. Tom Wheeler, Chairman; 
      Hon. Mignon Clyburn, Commissioner; Hon. Jessica 
      Rosenwercel, Commissioner; Hon. Ajit Pai, Commissioner; and 
      Hon. Michael O'Reilly, Commissioner, Federal Communications 
      Commission from Claire McCaskill, U.S. Senator.............     4
    Letter dated March 8, 2016, to Hon. Claire McCaskill from 
      Ajit V. Pai, Commissioner, Federal Communications 
      Commission.................................................     6
    Letter dated March 16, 2016, to Hon. Claire McCaskill from 
      Tom Wheeler, Chairman, Federal Commissions Commission......     6
    Letter dated March 16, 2016, to Hon. Claire McCaskill from 
      Jessica Rosenworcel, Commissioner, Federal Communications 
      Commission.................................................     7
    Letter dated March 24, 2016, to Hon. Claire McCaskill from 
      Michael O'Reilly, Commissioner, Federal Communications 
      Commission.................................................     8
Statement of Senator Wicker......................................    33
Statement of Senator Schatz......................................    35
Statement of Senator Markey......................................    37
Statement of Senator Ayotte......................................    39
Statement of Senator Booker......................................    41
    Letter dated March 1, 2016, to Chairman Tom Wheeler, 
      Commissioner Mignon Clyburn, Commissioner Michael O'Reilly, 
      Commissioner Ajit Pai, and Commissioner Jessica Rosenworcel 
      from the companies of Access Humboldt, American Library 
      Association, AT&T, Benton Foundation, Center for Media 
      Justice, Center for Rural Strategies, CenturyLink, Comcast, 
      Common Cause, Common Sense Kids Action, Connected Nation, 
      Inc., Cox Communications, EveryoneOn, Frontier 
      Communications, Media Mobilizing Project, Multicultural 
      Media, Telecom and Internet Council, National Digital 
      Inclusion Alliance, National Hispanic Media Coalition, 
      OCA--Asian Pacific American Advocates, Public Knowledge, 
      Schools, Health & Libraries Broadband Coalition, The 
      Greenlining Institute, and Verizon.........................    43
Statement of Senator Fischer.....................................    44
    Letter dated March 14, 2016, to Hon. Deb Fischer from Tom 
      Wheeler, Federal Communications Commission.................    45
Statement of Senator Moran.......................................    47
Statement of Senator Johnson.....................................    50
Statement of Senator Gardner.....................................    53
Statement of Senator Daines......................................    56
Statement of Senator Peters......................................    58
Statement of Senator Klobuchar...................................    60
Statement of Senator Sullivan....................................    61
Statement of Senator Blumenthal..................................    64

                               Witnesses

Hon. Tom Wheeler, Chairman, Federal Communications Commission....    10
    Prepared statement...........................................    11
Hon. Jessica Rosenworcel, Commissioner, Federal Communications 
  Commission.....................................................    15
    Prepared statement...........................................    16
Hon. Ajit Pai, Commissioner, Federal Communications Commission...    18
    Prepared statement...........................................    19
Hon. Michael O'Rielly, Commissioner, Federal Communications 
  Commission.....................................................    22
    Prepared statement...........................................    23
Hon. Mignon L. Clyburn, Commissioner, Federal Communications 
  Commission.....................................................    27
    Prepared statement...........................................    28

                                Appendix

Response to written questions submitted to Hon. Tom Wheeler by:
    Hon. John Thune..............................................    71
    Hon. Roger F. Wicker.........................................    74
    Hon. Roy Blunt...............................................    76
    Hon. Kelly Ayotte............................................    76
    Hon. Ted Cruz................................................    77
    Hon. Jerry Moran.............................................    78
    Hon. Ron Johnson.............................................    80
    Hon. Dean Heller.............................................    81
    Hon. Steve Daines............................................    82
    Hon. Maria Cantwell..........................................    83
    Hon. Claire McCaskill........................................    85
    Hon. Amy Klobuchar...........................................    88
    Hon. Richard Blumenthal......................................    89
    Hon. Edward Markey...........................................    92
    Hon. Cory Booker.............................................    92
    Hon. Tom Udall...............................................    93
    Hon. Joe Manchin.............................................    94
Response to written questions submitted to Hon. Jessica 
  Rosenworcel by:
    Hon. John Thune..............................................    95
    Hon. Roy Blunt...............................................    98
    Hon. Ted Cruz................................................    99
    Hon. Deb Fischer.............................................    99
    Hon. Dean Heller.............................................   100
    Hon. Steve Daines............................................   101
    Hon. Claire McCaskill........................................   101
    Hon. Richard Blumenthal......................................   103
    Hon. Joe Manchin.............................................   104
Response to written questions submitted to Hon. Ajit Pai by:
    Hon. John Thune..............................................   104
    Hon. Ted Cruz................................................   106
    Hon. Ron Johnson.............................................   106
    Hon. Dean Heller.............................................   108
    Hon. Claire McCaskill........................................   109
    Hon. Richard Blumenthal......................................   110
Response to written questions submitted to Hon. Michael O'Rielly 
  by:
    Hon. John Thune..............................................   111
    Hon. Ted Cruz................................................   113
    Hon. Deb Fischer.............................................   114
    Hon. Ron Johnson.............................................   114
    Hon. Dean Heller.............................................   115
    Hon. Claire McCaskill........................................   116
    Hon. Richard Blumenthal......................................   117
Response to written questions submitted to Hon. Mignon L. Clyburn 
  by:
    Hon. John Thune..............................................   118
    Hon. Ted Cruz................................................   121
    Hon. Deb Fischer.............................................   121
    Hon. Dean Heller.............................................   122
    Hon. Claire McCaskill........................................   122
    Hon. Richard Blumenthal......................................   125
    Hon. Cory Booker.............................................   125

 
                           OVERSIGHT OF THE 
                   FEDERAL COMMUNICATIONS COMMISSION

                              ----------                              

                        WEDNESDAY, MARCH 2, 2016

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:05 a.m. in 
room SR-253, Russell Senate Office Building, Hon. John Thune, 
Chairman of the Committee, presiding.
    Present: Senators Thune [presiding], Wicker, Blunt, Ayotte, 
Fischer, Moran, Sullivan, Johnson, Heller, Gardner, Daines, 
Nelson, Cantwell, Klobuchar, Blumenthal, Schatz, Markey, 
Booker, Manchin, and Peters.

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

    The Chairman. This hearing will come to order. Welcome to 
today's hearing on Oversight of the Federal Communications 
Commission. During our oversight hearing last March, I 
expressed my amazement that an agency as important as the 
Federal Communications Commission has not been reauthorized by 
Congress in 25 years, making it the oldest expired 
authorization within the Commerce Committee's expansive 
jurisdiction.
    Reversing a quarter century of legislative inertia takes 
time, but together we are beginning to make some progress. For 
example, today's hearing marks the first time this century the 
full FCC has appeared before this committee twice during a 
single Congress. Another example is our unanimous approval last 
year of Senator Heller's FCC Consolidated Reporting Act, which 
would make the Commission's various marketplace examinations 
less burdensome on the agency, as well as more informative to 
Congress.
    Reauthorizing the FCC is our responsibility as legislators 
and representatives of diverse constituencies who are 
increasingly affected by a regulatory agency with nearly half a 
billion dollar budget. It's time for this committee to get back 
to regularly authorizing the Commission as part of its normal 
course of business. To that end, in the next few days, I will 
introduce the FCC Reauthorization Act of 2016, and it is my 
intent to mark up the bill in the coming weeks.
    We have before us today a very familiar face, Commissioner 
Jessica Rosenworcel, who is appearing before the Committee for 
the fourth time this Congress. Commissioner Rosenworcel's re-
nomination is currently pending before the full Senate.
    Commissioner, I support your confirmation, and I was 
pleased to process your nomination through the Committee last 
year. I appreciate your public service at the FCC and your 
prior service to this committee.
    Last year's oversight hearing came shortly after the very 
successful auction of AWS-3 spectrum, which netted more than 
$41 billion in winning bids. That record-setting auction was 
the product of the 2012 Spectrum Act, which also authorized the 
innovative incentive auction of broadcast TV airwaves that is 
scheduled to begin next month.
    In the incentive auction, the FCC is charged with a 
balanced mission: one, reallocate the spectrum voluntarily 
relinquished by TV stations to commercial wireless users, and, 
two, protect both the TV stations that continue to operate 
following the auction and their viewers. Congress provided 
nearly $2 billion to reimburse stations forced to relocate 
during the so-called post-auction repack, and the FCC has 
established a timeline to complete the repacking process.
    Concerns have been raised, however, that the reimbursement 
funds and time allotted for repacking may be inadequate. I am 
hopeful that will not be the case. Nevertheless, these concerns 
deserve and will receive the close attention of this committee. 
I know my colleagues and I all wish to see a successful 
incentive auction and a successful repacking process.
    While local broadcast TV remains an important and popular 
medium, the broader video market continues to dramatically 
change and grow. In fact, the video services market is one of 
the most dynamic segments of the communications space. It is 
driving tremendous innovation in consumer electronics, dynamic 
experimentation in video distribution business models, and 
growing broadband data consumption by consumers.
    It is not a coincidence that the parts of the video market 
seeing the most innovation are also the least regulated. Amidst 
this increasingly competitive video reality, the FCC recently 
proposed a partisan rulemaking to have the government somehow 
produce better results than the astonishing and consumer-
empowering disruption that is already happening.
    Ranking Member Nelson sent Chairman Wheeler a letter 
shortly before the FCC's adoption of this new technology 
regulation proposal. I agree with Senator Nelson's sentiment 
that, and I quote, ``Advances abound in the competitive video 
navigation device market, and that Section 629 should always be 
implemented with an eye toward what is actually happening in 
the marketplace.''
    I want to further echo Senator Nelson's warning to the 
Commission that Section 629 does not contemplate imposing 
regulations by which third parties gain for their own 
commercial advantage the ability to alter, add to, or interfere 
with the programming provided by content providers. Again, 
that's from Senator Nelson's letter.
    The bottom line is that today's video market is 
increasingly competitive, and traditional pay-TV subscribers 
are rapidly finding new, more user friendly, and less expensive 
ways to receive the TV services they purchase on an increasing 
array of consumer devices, including some made by the largest 
companies on the planet.
    Finally, I would like to address the issue of standalone 
broadband support for small rural carriers. Because of flawed 
Universal Service Fund rules, these providers lose all support 
for serving households that choose to subscribe to broadband 
while not simultaneously purchasing landline telephone service. 
Last March, all five of you commissioners made commitments to 
me and this committee to fix the counterproductive loophole by 
the end of 2015.
    It is my understanding that an item is currently on 
circulation at the Commission that would fix the standalone 
broadband problem and which reflects a negotiated compromise 
and some other complex USF reforms that have been linked to 
this simple objective. While the 2015 deadline for standalone 
broadband has recently passed, I am glad the extra time appears 
to have given a fair chance for rural providers to assess the 
impact of those complex reform proposals on their businesses 
and on the rural broadband customers they serve.
    I look forward to seeing the full plan, assessing its 
impact on South Dakotans, and continuing to provide oversight 
of the FCC's implementation of these reforms as Chairman of 
this committee. In the meantime, I would like to thank all of 
you for fulfilling your commitment to fix the standalone 
broadband issue for rural consumers across this nation.
    Now, before I conclude, I would like to say a word 
regarding the report issued earlier this week by Chairman 
Johnson. Among other things, the report finds that the FCC, and 
I quote, ``Failed to live up to standards of transparency.'' I 
want to thank Chairman Johnson and his staff for their work on 
this report, and I hope the Commission, rather than resorting 
to a defensive posture, will look for ways to demonstrate the 
kind of transparency expected of our independent agencies. 
Today's hearing provides one opportunity to do just that.
    So I look forward to hearing your testimony and appreciate 
very much having all our commissioners here before us today, 
and I look forward to having an opportunity to ask you some 
questions later.
    But I turn now to our distinguished Ranking Member, the 
Senator from Florida, Senator Nelson, for his opening 
statement.

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

    Senator Nelson. Thank you, Mr. Chairman, and I return the 
compliments to you in the way that the two of us have worked 
together in a bipartisan way on a number of thorny issues, 
trying to boil them down to a common approach, and I am 
encouraged that we will continue in the Committee, thanks to 
yours and your staff's approach to leadership.
    On behalf of Senator McCaskill, which we all know is going 
through a difficult time, I want to ask that her letter to the 
Commissioners and then their responses, when they submit them, 
be submitted into the record and entered into the record as a 
part of today's hearing.
    The Chairman. Without objection.
    [The information referred to follows:]

                                       United States Senate
                                      Washington, DC, March 1, 2016

Hon. Tom Wheeler, Chairman
Hon. Mignon Clyburn, Commissioner
Hon. Jessica Rosenworcel, Commissioner
Hon. Ajit Pai, Commissioner
Hon. Michael O'Rielly, Commissioner
Federal Communications Commission
Washington, DC.

Dear Chairman Wheeler and Commissioners Clyburn, Rosenworcel, Pai, and 
            O'Rielly:

    At a March 18, 2015, Federal Communications Commission oversight 
hearing held by the Senate Commerce, Science, and Transportation 
Committee, I suggested four specific reforms of the Lifeline program 
that should be implemented by the commission as part of any effort to 
expand the program to cover broadband service. Given the opportunity to 
disagree with any of the reforms, a bipartisan majority of the 
commission raised no objections, and in fact most spoke favorably of 
the proposed reforms.
    Based on my work closely examining the Lifeline program for more 
than four years and my work over the course of my career in bringing 
transparency and accountability to government programs, I continue to 
believe any final Lifeline modernization order should include the 
following reforms:

  1.  Take eligibility determination out of the hands of 
        telecommunications carriers;

  2.  Improve competition among participating telecommunications 
        carriers;

  3.  Make sure consumers have ``skin in the game''; and

  4.  Place a cost-cap or other cost-control mechanism on the program.

    I was pleased to see that the Notice of Proposed Rulemaking 
approved by the commission on June 18, 2015, proposed removing carriers 
from eligibility determination and creating minimum service standards 
for carriers. I was also pleased to see that the NPRM sought to make 
increasing competition among carriers a priority, which will benefit 
both the consumers that participate in the program as well ratepayers 
who fund it. While the NPRM requested comment on whether and how to cap 
the Lifeline program, I am concerned it did not go further.
    When a Republican-majority commission last expanded the Lifeline 
program in 2008 to allow the participation of pre-paid wireless 
carriers, the commission did so without putting additional 
accountability or cost-control measures in place. The result was a 
program that grew from $800 million in 2008 to $2.1 billion in 2012. 
Although spending on Lifeline in 2014 was down to $1.6 billion, likely 
as a result of reforms adopted in 2012, the program is still spending 
twice what it was in 2008 while reports continue of waste, fraud, and 
abuse.
    Particularly given that the NPRM included no estimate for what 
expanding the Lifeline program to cover broadband could cost, or for 
what savings could be realized by other proposed reforms, the 
commission should adopt a cost cap or other effective cost control for 
the Lifeline program to prevent a repeat of the unchecked increase in 
spending that was seen the last time the program was expanded. There is 
simply no justification for allowing the Lifeline program to remain the 
only Universal Service Fund program without a cost control mechanism in 
place.
    The goal of a spending cap is not to deny telecommunications 
services to those who need them most, but rather to ensure the Lifeline 
program is accomplishing its intended goals. A cap imposed by the 
commission can also be revisited by the commission should spending 
approach that level and a determination can be made at that time 
whether eligibility criteria should be changed, the level of subsidy 
reduced, or the cap increased.
    With the commission poised to vote on a final Lifeline 
modernization order as early as this month, I request that you each 
provide a written response by Wednesday, March 16, 2016, indicating 
your position on applying a cost-control mechanism to the Lifeline 
program.
    Modernizing the Lifeline program to cover broadband service as 
opposed to basic phone service is a worthy goal and one I support in 
concept if accompanied by appropriate structural reforms to the 
program. Commissions under President Ronald Reagan and President George 
W. Bush created and expanded the Lifeline program without adequate 
accountability or cost controls in place. In 2012, the commission took 
its first step in the 30-year history of the Lifeline program to impose 
some accountability in the program for providers and beneficiaries. 
Those measures fell short of what was needed. However, this commission 
has the opportunity to adopt the reforms necessary to both bring the 
program into the 21st century and restore the confidence of the 
Congress and the American people that the Lifeline program is working 
effectively.
            Sincerely,
                                          Claire McCaskill,
                                                      U.S. Senator.
                                 ______
                                 
    Q. With the Commission poised to vote on a final Lifeline 
modernization order as early as this month, I request that you each 
provide a written response by Wednesday, March 16, 2016, indicating 
your position on applying a cost-control mechanism to the Lifeline 
program.
    Thank you for the question, Senator.
    I agree that the Lifeline program, like all of the Federal 
universal service programs, should have robust cost controls and 
oversight to protect against waste, fraud and abuse. The explosion of 
fraud occurred due to (in)decisions from previous administrations, but 
under this administration, our focus has been on addressing program 
deficiencies and reigning in abusers of the program.
    In 2012, the FCC's substantial clean-up of Lifeline's inherited 
vulnerabilities saved American consumers in excess of $2.75 billion. 
Additionally, the duplicates database, non-usage rule and other 
measures adopted nearly four years ago have put the program on a more 
sound footing. While I was Acting Chairwoman, the agency took swift and 
strong enforcement action proposing fines of over $100 million against 
providers that violated our rules. But I agree, more must be done.
    Specifically, the provider should no longer determine program 
eligibility. I have been vocal in my call for this since November 
2014.\1\ Allowing providers to determine customer eligibility has 
created incentives for fraud, increased privacy concerns and has left 
us with a program structure that is less than dignified. A neutral, 
third-party verifier, coupled with the existing national duplicates 
database, will eliminate the ability of carriers to enroll ineligible 
consumers and ensure only qualified consumers sign up for service.
---------------------------------------------------------------------------
    \1\ Remarks of Commissioner Mignon Clyburn, Reforming Lifeline for 
the Broadband Era, American Enterprise Institute, November 12, 2014, 
available at https://apps.fcc.gov/edocs public/attachmatch/DOC-
330453A1.pdf.
---------------------------------------------------------------------------
    We also need minimum levels of service. The lack of any standards 
has been extremely profitable to some at the expense of their consumers 
and the universal service fund. The number of minutes offered today is 
so low that consumers may have more of an incentive to get another 
phone in order to stay connected. That should be eliminated as we 
impose minimum standards. And, while I disagree with the FCC putting 
its thumb on the scale and distorting the market to require a minimum 
payment or to mandate that the service be ``free,'' I do agree we need 
minimum standards so that consumers have a floor that provides robust 
service. In addition, the FCC should institute additional reforms to 
ensure that consumers have choices comparable to what the rest of us 
receive. To me, this means lower cost options as well as higher cost 
plan offerings with more or less data where consumers pick the plan 
that fits their budget and meets their needs.
    I believe these programmatic changes will not only put the Lifeline 
program on a sound footing, but the proposed modifications will 
actually exceed any cost control measures that are in place for the 
other universal service programs. Even so, I am open to a budget 
provided that it is consistent with our treatment of other universal 
service programs and does not, for example, foreclose over half of the 
eligible population from participating. The FCC does not artificially 
limit the number of rural carriers that can receive high cost funding 
and we should not place more constraints on those who are our most 
vulnerable. Indeed, the budget for the high cost program is $4.5 
billion annually, of which $2 billion is allocated for the smaller 
carriers that serve 3.88 million lines, whereas, according to USAC, 
over 38 million households qualify for Lifeline. The value of getting 
these low income households connected with broadband, or ensuring they 
can stay connected for $9.25 a month, has a far greater societal impact 
than the billions of dollars allocated to ``connect'' (or more 
accurately stated, to pass by) the remaining unserved households. 
Indeed, the potential reverberating benefits back to society of reduced 
healthcare costs, skilled jobs with a better education and the ability 
to provide a pathway out of poverty and off of government benefits 
programs are endless.
    I believe the Commission should keep all of this in mind as we set 
a budget for Lifeline.
            Sincerely,
                                         Mignon L. Clyburn.
                                 ______
                                 
                          Federal Communications Commission
                                      Washington, DC, March 8, 2016
Hon. Claire McCaskill,
United States Senate,
Washington, DC.

Dear Senator McCaskill,

    Thank you for your recent letter on the need to reform the FCC's 
Lifeline program. I share your concern that last year's Notice of 
Proposed Rulemaking did not go far enough on whether and how to ca p 
the Lifeline program. Like you, I am concerned that spending in this 
program has almost doubled since the end of 2008. And like you, I am 
concerned that waste, fraud, and abuse are still rampant.
    In your letter, you asked for my position on applying a cost-
control mechanism to the Lifeline program. I unequivocally support 
applying a budget to the Lifeline program. The Commission promised that 
it would put the program on a budget in 2013. Now, it's time to follow 
through. Every other program supported by the Universal Service Fund is 
on a budget. Like you, I believe that there is s imply no justification 
to treat the Lifeline program differently.
    I look forward to continue working with you and other members of 
the Senate Committee on Commerce, Science, and Transportation to 
resolve this issue.
            Sincerely,
                                               Ajit V. Pai,
                                                      Commissioner.

cc:
The Honorable John Thune, Chairman, Committee on Commerce, Science, and 
Transportation
The Honorable Bill Nelson, Ranking Member, Committee on Commerce, 
Science, and Transportation
                                 ______
                                 
                          Federal Communications Commission
                                     Washington, DC, March 16, 2016
Hon. Claire McCaskill,
United States Senate,
Washington, DC.

Dear Senator McCaskill:

    Thank you for your letter recognizing both the need for appropriate 
structural reforms to the Lifeline program and the value of modernizing 
the program to cover broadband.
    Last week, I circulated a proposed Order for my colleagues' 
consideration that would modernize the Commission's Lifeline program to 
meet a critical 21st Century need: making broadband more affordable for 
low-income Americans. At the same time, the proposed Order would put in 
place a number of key programmatic reforms designed to protect the 
integrity of the Lifeline program and build on the Commission's recent 
efforts to root out waste, fraud, and abuse in the program.
    Your letter specifically asks for my views on the importance of a 
``cost-cap or other cost control mechanism'' for the Lifeline program. 
I agree that such a mechanism is prudent to safeguard the financial 
stability and integrity of the Lifeline program while ensuring access 
for all eligible consumers. I have therefore proposed that, for the 
first time ever, the Commission take the necessary step of implementing 
a budget mechanism for the Lifeline program. The proposed approach has 
two parts.
    First, the proposed Order would set a Lifeline budget of $2.25 
billion, indexed to inflation, that takes into account current 
participation rates, possible growth of the program as eligible 
consumers are made aware of its benefits, and safeguards in place to 
prevent waste, fraud, and abuse. This proposed budget acts as a 
ceiling, which allows for responsible organic growth from the current 
spending level, based on increased participation by eligible consumers 
generated by the program's support for broadband service. By 
establishing a reasonable budget in conjunction with complementary 
structural reforms, our goal is to meaningfully, but responsibly, 
narrow the digital divide that has left 64.5 million people in the U.S. 
disproportionately those with the lowest incomes-without an Internet 
connection. The Commission took a similar approach in setting a budget 
for the Connect America Fund to put the Commission on a path to 
responsibly modernize the high cost universal service fund.
    Second, the proposed Order establishes a process for the full 
Commission to promptly evaluate and address Lifeline funding in advance 
of the program hitting that $2.25 billion budget. Specifically, if 
expenditures in the Lifeline program reach 90 percent of the budget in 
a given year, the proposed Order requires Commission staff to notify 
the Commission and prepare a written analysis of the causes of the 
spending growth, with action by the full Commission within six months 
of receiving the report. This mechanism will ensure that the Commission 
has the notice and comprehensive information it needs to determine the 
reasons for growth in the program and a process to promptly make any 
necessary changes to the program in response.
    That budget mechanism would work in concert with other proposed 
structural reforms to further ensure the integrity of the modernized 
Lifeline program. Under the proposed Order, the Commission would 
establish a National Eligibility Verifier that removes 
telecommunications carriers from making eligibility determinations; 
make targeted changes to encourage robust competition in the Lifeline 
program; and implement minimum service standards to ensure eligible 
subscribers' benefits are directed only to quality services that are 
worthy of universal service funding. I expect that these rules will 
make Lifeline a truly 21st Century program that effectively and 
responsibly makes broadband service accessible for low-income 
households.
    I also appreciate your recognition of the successful program 
reforms the Commission has implemented since 2012 to prevent waste, 
fraud, and abuse in the Lifeline program, such as creating the National 
Lifeline Accountability Database to prevent subscribers from receiving 
more than one benefit. As a result of these and other reforms, 
disbursements in the Lifeline program decreased from nearly $2.2 
billion in 2012 to under $1.5 billion in 2015. The proposed Lifeline 
Order now before the Commission builds on these efforts. Through the 
budget mechanism and other reforms, like implementing a National 
Eligibility Verifier, the Commission would take the additional steps 
necessary to shut the door on the program's remaining fiscal 
vulnerabilities and ensure responsible spending in the program.
    The proposed Lifeline Order was designed with two equally important 
goals in mind-to help connect low-income Americans to the Internet and 
to ensure the fiscal integrity of the program going forward. We need 
not choose between the two. We can and must have both.
    I appreciate your interest in this matter and our work on this 
issue has benefited from your input and guidance. Your views are 
important and will be included in the record of the proceeding and 
considered as part of the Commission's review. Please let me know if I 
can be of any further assistance.
            Sincerely,
                                               Tom Wheeler,
                                            Office of the Chairman.
                                 ______
                                 
                          Federal Communications Commission
                                     Washington, DC, March 16, 2016

Hon. Claire McCaskill,
United States Senate,
Washington, DC.

Dear Senator McCaskill:

    Thank you for your March 1, 2016, letter regarding the Lifeline 
program at the Federal Communications Commission. As your letter 
acknowledges, this program got its start more than three decades ago, 
back when President Ronald Reagan was in the White House and when most 
communications involved a cord. Today, the Lifeline program supports 
telephone access in approximately 13 million low-income households 
across the country. However, broadband is clearly the communications 
technology of our time. As a result, I believe the program needs to be 
modernized to reflect this reality. Moreover, I believe if the FCC does 
this right, this program can help address the Homework Gap by making it 
possible for more students in low-income households to get the 
connectivity they need to do basic schoolwork.
    As you note, the Lifeline program has been subject to abuse, 
largely as a result of its expansion and rapid growth beginning in 
2008. The FCC cracked down on this abuse in 2012 with, among other 
things, new auditing requirements and the creation of the National 
Lifeline Accountability Database. Recognizing that additional measures 
were necessary, last Summer the FCC began a rulemaking to explore how 
to continue to further update and modernize the program. I fully 
supported this rulemaking.
    This this end, I appreciate the reform ideas that you set forth at 
the March 18, 2015, Senate Commerce, Science, and Transportation 
Committee oversight hearing. Your letter specifically asks about my 
position with respect to one of these ideas--applying a cost control 
mechanism to the Lifeline program. I believe that the FCC should apply 
a cost control mechanism to the Lifeline program and regularly review 
other internal controls. The Lifeline program needs such measures in 
order to ensure accountability and prevent abuse going forward.
    Thank you for your attention and interest in this program.
            Sincerely,
                                       Jessica Rosenworcel.
                                 ______
                                 
                          Federal Communications Commission
                                     Washington, DC, March 24, 2016

Hon. Claire McCaskill,
United States Senate,
Washington, DC.

Dear Senator McCaskill,

    Thank you for your letter of March 1, 2016, regarding potential 
reforms of the Lifeline program. I very much agree with your suggestion 
that the Commission should institute a budget for the program and have 
long advocated this approach. Like you, I envision such a ``budget'' as 
a spending cap that would need to be revisited by the Commission in the 
event any increase in the amount is considered necessary. I have shown 
some willingness to moderate this position to some degree, but none of 
my suggestions have yet been embraced by my colleagues. In order to 
protect contributing consumers, I remain hopeful that the Commission 
will ultimately implement such a mechanism for real cost control of the 
program.
            Sincerely,
                                          Michael O'Rielly,
                                                      Commissioner.

    The Chairman. And I would also say to my colleague from 
Florida that I think all of us on this committee express our 
thoughts and prayers to our colleague, who is a very active and 
respected member of this committee, and hope and pray for a 
quick recovery.
    Senator Nelson. Thank you, Mr. Chairman. And this is 
significant because it has been over a year since all five 
commissioners have appeared before this committee, and a lot 
has happened in the interim.
    Now, I really appreciate, Mr. Chairman, what you said about 
Commissioner Rosenworcel's re-nomination and the confirmation 
that we attempt to get as soon as possible, and I want to 
recall for the record that at the end of the 113th Congress, we 
had--now, this is December 2014--we had one Republican FCC 
Commissioner, Mike O'Rielly, who is here, awaiting 
confirmation. The Democrats agreed to confirm Commissioner 
O'Rielly's nomination without pairing him with any other 
nominee in exchange for a promise that Republicans would 
confirm Democrat Jessica Rosenworcel quickly in the new 
Congress.
    Senator McConnell promised Senator Reid--and I am getting 
this straight from Senator Harry Reid--and promised then 
Chairman Jay Rockefeller that they would move the Rosenworcel 
nomination without delay in the new Congress if the Democrats 
in the last Congress, that is, in 2014, agreed to move 
Commissioner O'Rielly's nomination.
    Commissioner Rosenworcel's nomination is now on the 
Executive Calendar. I know, Chairman, that you are working with 
Leader McConnell to make this happen. We don't want to lose her 
leadership and thoughtful approach to the crucial issues.
    But, Mr. Chairman, this has been now over a year. As 
promised, it didn't happen in the first year of the new 
Congress, last year, 2015. Here we are in the second year of 
the new Congress. Finally, she's on the calendar. I hope we 
will move to fulfill the promise that was made in order to 
confirm Commissioner O'Rielly. And I want to thank all of the 
Commissioners for appearing today.
    As our Nation grows ever more Internet-enabled, more 
connected, and more mobile, this FCC's role becomes ever more 
critical. You are the expert agency that Congress created over 
all things communications. You have a statutory mandate to 
protect consumers, promote competition, ensure universal 
service, and preserve public safety. And as technology 
transitions, these core directives do not necessarily follow. 
So that's where you come in.
    In terms of protecting consumers, I want to call your 
attention to the ongoing problem of spoofing. Last week, 
Senator Fischer and I introduced the Spoofing Prevention Act of 
2016, designed to update the law and provide the FCC with more 
enforcement tools to combat these abusive phone scams. 
Americans lose millions of dollars each year to these scams, 
and that's especially true of vulnerable senior citizens.
    We must protect the public from these scammers, and I hope 
that the Committee can act swiftly on Senator Fischer's and my 
legislation. In the meantime, I expect the FCC to do everything 
that it can under current law to stop these scammers.
    Now, with regard to promoting competition, there has been 
intense interest in the past few weeks on your recent set-top 
box proposal. I support the existing statutory obligation to 
promote competition and choice in how consumers access their 
pay television programming. But it is essential that any new 
FCC rules in this area must not harm the production and 
distribution of video content, and my letter to the Chairman 
said just that.
    The FCC, too, has worked hard to keep the U.S. competitive 
in our national spectrum policy. In a matter of weeks, the 
Commission will launch the first voluntary spectrum incentive 
auction. The agency deserves much praise for getting us to this 
point.
    At the same time, many of us have heard concerns about what 
may happen after the auction during any repacking of TV 
stations. Obviously, we will continue to watch the FCC's work 
closely in order to make sure that TV viewers are not 
disenfranchised at the end of this important process.
    I want to recognize the work being done by the Commission 
related to 5G, the next-generation wireless services. The 
nation is once again on the verge of a wireless revolution, and 
the work on a new spectrum frontier for such services is vital 
to American leadership in this area. Tomorrow, this committee 
will take up the bipartisan MOBILE NOW Act that Chairman Thune 
and I have referenced. That bill is designed to help move the 
ball forward on 5G.
    With regard to universal service, as important as it is to 
promote cutting-edge communications technologies, it is equally 
important that all Americans have access to these networks. I 
know that the FCC has been spending significant time 
considering reforms to the Lifeline program. I want to make it 
fairly obvious that we must have a Lifeline program that helps 
low-income Americans obtain access to broadband in order for 
them to participate in today's digital economy. Failing to do 
so risks exacerbating the digital divide.
    With regard to public safety, a call to 911 remains the 
most important call any one of us will ever make. I hope you 
all will keep that in mind, and I look forward to your 
testimony.
    The Chairman. Thank you, Senator Nelson. We're going to 
proceed now, and we'll start on my right and your left with the 
Chairman of the Commission.
    So Chairman Wheeler, if you'll go first, then we'll just 
work down the dais from there. So thank you for being with us.
    And, by the way, I would add, too--I know it's hard to 
enforce the timeline, but there are some of you on the panel 
who have been on this side, and you know how nice and how much 
the staff would appreciate it if you would confine your 
comments to as close to 5 minutes as possible. I know you have 
written statements, too, that we will certainly include in the 
record.
    Mr. Chairman?

           STATEMENT OF HON. TOM WHEELER, CHAIRMAN, 
               FEDERAL COMMUNICATIONS COMMISSION

    Chairman Wheeler. Thank you very much, Mr. Chairman, and 
members of the Committee. I know we all look forward to 
discussing the matters of importance that you have identified 
as well as some others. So I will heed your admonition and be 
brief.
    Four quick topics: First, as has been referenced, we're 
only 26 days away from the world's first incentive auction. 
Next week, we will have a workshop and a WebEx for broadcasters 
who are desiring to participate so that they can work through 
their processes and begin to understand even more. The 
following week, we will release the forward auction 
participants. The third week, we will have practice sessions 
after we have distributed to the participating broadcasters 
their own security token so they can actually practice and 
stress the system. And the flag falls in 3 weeks and 5 days. 
But who's counting?
    Second, I have just returned with my colleagues, 
Commissioner Rosenworcel and Commissioner Clyburn, from the 
Mobile World Congress, the big gathering of the mobile industry 
in Barcelona, where the buzz was all about 5G. Commissioner 
Rosenworcel made some remarks there that were spot-on insofar 
as the importance of spectrum in 5G. Your MOBILE NOW 
legislation is an important part, as you both, Chairman Thune 
and Ranking Member Nelson, have referenced.
    But I want to make sure that everybody understands there's 
a difference between the way we approach 5G spectrum and the 
way the rest of the world does, because we've just met with the 
rest of the world. We will allocate 5G spectrum faster than any 
nation on the planet. We already have a proceeding underway. We 
will bring that proceeding to closure this summer. We will then 
get out of the way and let innovation and competition reign.
    Now, I've been approached by various other governments 
saying, ``You need to wait until there are standards.'' It's 
not our philosophy to engage in such industrial policy. We are 
world leaders in 4G because of the fact that we made spectrum 
available, and we let competition and innovation reign. I 
believe that that is the same strategy that will bring us to 
world leadership in 5G.
    Third, the last time we were together--Mr. Chairman, you've 
referenced this--we pledged rate-of-return carrier reform and 
broadband support to unserved areas before the end of the year. 
As you said, we met the goal, but not the calendar. Thank you 
for your understanding.
    It was a complex issue, but thanks to the work of 
Commissioners O'Rielly and Clyburn, we have a bipartisan plan 
that was not only negotiated with our offices, which is no easy 
undertaking in and of itself, but also negotiated with the 
major associations of the parties involved, which increased the 
complexity. Commissioner O'Rielly dove into the specifics of 
the issue and exhibited the kind of bringing people together 
attitude in finding solutions that made him such an effective 
member of the staff of this body. Commissioner Clyburn, who had 
over a decade of experience dealing firsthand with this issue 
at the state level, brought that kind of expertise and 
experience and helped us through that process.
    None of us got everything we wanted, nor did any of the 
associations get everything they wanted. But we have a solid 
bipartisan reform and broadband funding for unserved areas, in 
particular, that will serve the test of time.
    Last--and this is not last in priority. It's just last on 
the list. Public safety, as embodied by 911, is dangerously 
close to a crisis as the digital world passes it by. Twenty-
first century lifesaving is being blocked by 20th century 
technology.
    We at the FCC have done all within our power to move the 
next-generation 911 capabilities of digital ahead. We've 
improved 911 location accuracy. We've been pushing for text to 
911 deployment. We've improved network resiliency, and we just 
completed a year-long process where we brought all the experts 
from around the country to spend a year developing a plan for 
just what does it take to get to the next-generation 911.
    We have submitted that task force plan to this committee. 
Congress holds the key to whether there will be a next-
generation 911, and we look forward to working with you in 
achieving that goal.
    Thank you, Mr. Chairman.
    [The prepared statement of Chairman Wheeler follows:]

           Prepared Statement of Hon. Tom Wheeler, Chairman, 
                   Federal Communications Commission
Introduction
    Chairman Thune, Ranking Member Nelson, and Members of the 
Committee, thank you for this opportunity to join with my colleagues to 
discuss our work and mission at the Federal Communications Commission.
    It has been almost a year since I last testified before this 
Committee. The Commission has been hard at work to facilitate dynamic 
technological change to enable economic growth and ensure that our 
communications networks reflect our core values--universal access, 
public safety, and consumer protection. Preserving and promoting 
competition continues to be the underlying foundation of our agenda.
    I am proud to report that the Commission has made significant 
progress in support of these goals, and we continue to see that 
America's communications technology sector is thriving and consumers 
are better served and protected.
    Today, I'll highlight some of our most significant actions since we 
last met, and also preview some of the issues we will be focused on 
moving forward.
Rate-of-Return Modernization
    In recent months, I've had the privilege of visiting Kentucky and 
Montana to learn first-hand about digital opportunities and 
connectivity challenges in rural communities. On my recent visit to 
eastern Kentucky I visited two towns being reshaped by the broadband 
revolution. McKee, Kentucky or as some call it, ``Silicon Holler,'' 
where there is now fiber to every home and business in the county, and 
Hazard, KY where I had the privilege to meet a former coal miner who is 
now working as a coder in the innovation economy. It was a striking 
reminder that the Commission's work can be a critical component to 
renewed economic growth. Our 21st century economy demands nothing less 
than vigorous broadband connections for rural, urban and suburban 
alike.
    The Commission has a Congressional mandate to preserve and advance 
universal service so that all Americans have access to reasonably 
comparable communications services at reasonably comparable rates. 
Promoting universal access to communications is not just a statutory 
obligation; it's smart public policy. Expanding Internet access opens 
up new opportunities for economic growth, job creation, education, 
healthcare, public safety, and many other national challenges.
    In 2011, the Commission voted unanimously to expand rural broadband 
access by modernizing the Universal Service Fund. The Commission took 
an inefficient program for delivering telephone service and created the 
Connect America Fund to support expanded broadband connectivity in 
rural America. These reforms have already delivered significant 
benefits. CAF-supported projects are in the process of connecting 1.7 
million Americans in 45 states, and, over the next six years, CAF is 
poised to invest $9 billion and leverage private investment to deliver 
broadband to 7.3 million rural Americans. In addition, universal 
service reforms have dramatically reduced waste within the program.
    Last year, I pledged to Chairman Thune and other Members of this 
Committee that we would bring forth a solution for the next phase of 
universal service modernization: reforming support for ``rate-of-
return'' carriers. As the result of months of arduous efforts by 
Commissioners Clyburn and O'Rielly and their staffs, we recently 
circulated a bipartisan Order to fulfill that promise.
    The proposed Order sets forth a package of reforms to address rate-
of-return issues that are fundamentally intertwined--the need to 
modernize the program to provide support for stand-alone broadband 
service; the need to improve incentives for broadband investment to 
connect unserved rural Americans; and the need to strengthen the rate-
of-return system to provide certainty and stability for years to come. 
The proposed Order will help to ensure that Federal universal service 
funds are spent wisely, for their intended purpose, and takes concrete 
steps to bring broadband to the millions of rural Americans who remain 
unserved today.
    I am grateful to Chairman Thune for his leadership on this issue 
and his patience as we worked on this important bipartisan reform.
Incentive Auction
    An unquestioned headliner of the Commission's March 2016 agenda is 
the Incentive Auction. The FCC staff has been working tirelessly to 
design this first-of-its-kind auction ever since Congress authorized it 
in February 2012. All systems are go to launch this historic auction in 
26 days.
    Getting to this point represents the culmination of four years of 
hard work at the Commission, following the groundbreaking work of this 
Committee and Congress in enacting the Spectrum Act. It has required 
tireless efforts by our auction task force and multiple bureaus and 
offices, the active involvement of my fellow Commissioners, and input 
from stakeholders and public interest groups representing the full 
range of opinions.
    We are encouraged by the strong interest that we have seen both 
from broadcasters interested in selling their spectrum and the broad 
assortment of parties interested in buying it.
    Our key goal is to repurpose as much spectrum for mobile broadband 
as the market demands to meet growing consumer needs, and that means 
deploying networks using these frequencies in a timely manner. To 
ensure preservation of service for broadcast viewers and timely network 
deployment, we have been focused on post-auction planning for over a 
year, including the release of the draft relocation reimbursement form 
and a reimbursement cost catalog, and we've already begun to pivot and 
to accelerate our planning for the post-auction transition.
    I recognize that getting the transition right is as important as 
getting the auction itself right. Like the auction, the transition will 
be a complex, multi-disciplinary effort that will span several years. 
The task force approach has served us well in designing and 
implementing the auction, and I believe it is the appropriate structure 
for ensuring that the transition has the focus and attention it 
requires. I therefore intend to maintain the task force when the 
auction is complete; as we move forward, its mission will evolve from 
auction to transition.
Spectrum Frontiers--5G
    Just as bipartisan support helped enable the incentive auction, 
there is growing bipartisan interest in the next big thing in spectrum 
policy: 5G. With very fast speeds, scale to support billions of 
sensors, and reduced latency, 5G will allow us to realize the full 
potential of so many promising, yet nascent broadband-enabled 
breakthroughs. It won't just unleash commercial broadband, satellite, 
or government uses, but applications on the horizon, like Internet of 
Things and connected cars, and others we can't accurately predict 
today.
    Fundamentally, we're approaching 5G as we have with previous 
generations of wireless by adopting a flexible use policy and assuring 
that spectrum is available to be deployed when the private sector has 
arrived at the requisite technical standards and network architectures. 
This approach made us successful as global leaders in 4G LTE.
    At this point, none of us knows exactly what 5G will be, but we can 
be certain that the spectrum requirements will be dynamic and ever 
changing. Accordingly, our spectrum policy must be equally dynamic to 
address a wireless reality that is still evolving. We must continue to 
employ flexible use policies and reliance on private-sector innovation 
and investment, while increasing our commitment to spectrum sharing, 
opening new bands for broadband, and smart approaches to wireless 
infrastructure.
    I commend Chairman Thune and Ranking Member Nelson for coming 
together to introduce the MOBILE NOW Act, which aims to facilitate 
investment in 5G technology by removing barriers to infrastructure 
deployment--a goal we share at the Commission. Commissioner Pai has 
been a strong advocate for eliminating barriers to wireless 
infrastructure deployment and I look forward to working with him and 
the other Commissioners on this important issue moving forward. Rest 
assured that spurring 5G innovation and deployment is one of the 
Commission's highest priorities.
    In fact, the Commission launched what we call our Spectrum 
Frontiers rulemaking to explore the use of millimeter wave spectrum--
the airwaves at 24 GHz and above--for 5G. I was disappointed that one 
of the bands the FCC identified for possible 5G use--28 GHz--was 
rejected for study by the International Telecommunication Union at last 
year's World Radio Conference in Geneva. While international 
coordination is preferable, I believe we should move forward with 
exploration of the 28 GHz band, and we plan to act on the Spectrum 
Frontiers proceeding this summer.
    I just returned from the Mobile World Congress in Barcelona where 
5G was the primary object of interest at the conference. Commissioner 
Rosenworcel spoke eloquently at that meeting about the need for 5G 
spectrum and how it will improve the quality of mobile services and 
enable new, heretofore unknown services. My bi-lateral meetings with 
foreign regulators in Barcelona made it clear- they are looking 
pointedly at the United States, watching our 5G-related initiatives 
very closely.
Competition/Set-Top Boxes
    Going back to my nomination hearing, the most consistent theme of 
my messages to Congress--or any audience--has been that ``competition, 
competition, competition'' is the most effective tool for driving 
innovation and consumer benefits.
    One area where competition is virtually non-existent and consumers 
are literally paying the price is the set-top box marketplace. Today, 
99 percent of pay-TV customers lease set-top boxes from their video 
providers, paying an average of $231 a year. Even when the company has 
recovered the cost of the box, consumers must continue to pay a rental 
fee month after month. Collectively, these consumers are spending $20 
billion annually. Senator Markey and Senator Blumenthal deserve 
recognition for shining a spotlight on this issue.
    Last month, the Commission launched a proceeding to introduce 
competition into the set-top box marketplace, as Congress mandates. 
Specifically, we propose establishing open standards for video 
navigation devices like set-top boxes, the same way we have standards 
for cell phones and Wi-Fi routers. The new rules would set the stage to 
provide device manufacturers, software developers and others the 
information they need to introduce innovative new ways for consumers to 
access and enjoy their favorite shows and movies on their terms, while 
at the same time maintaining strong security, copyright and consumer 
protections.
    This proposal will not require changes in the programming business 
practices of pay-TV providers; it will not require consumers to 
purchase new boxes; and it will not harm minority programming 
opportunities. Again, this is all about whether the standard for set-
top boxes should be a closed standard or an open standard.
Lifeline Modernization
    At a time when our economy and lives are increasingly happening 
online, be it job applications, math homework, or neighborhood 
listserves, it doesn't make sense for Lifeline--the Commission's 
program to help low-income Americans afford access to the vital 
communications--to remain focused only on 20th century narrowband voice 
service. Competing and thriving in the 21st century economy requires 
affordable broadband.
    Building on earlier reforms adopted under Chairman Genachowski and 
Chairwoman Clyburn that cracked down on waste, fraud, and abuse and 
weeded out over a billion dollars in payments to ineligible recipients, 
the Commission initiated a proceeding last June to recast Lifeline for 
the broadband era.
    The first principle of Lifeline reform is allowing the program to 
support both fixed and mobile broadband service. We will establish 
minimum standards of service that Lifeline providers must deliver to 
receive funds. We will also improve Lifeline's management and design to 
get to the heart of the historic issues that have undermined this 
program's efficiency. We will streamline the requirements to become a 
Lifeline provider and take a hard look at the burdens we place on those 
providers to make it easier for carriers to participate in the Lifeline 
program. Too many of our country's leading service providers as well as 
many local, innovative, small providers do not provide Lifeline 
service. The more service providers we can encourage to participate, 
the better that service will become.
    Commissioner Clyburn has been a tireless champion of this effort, 
and I am working with her and my other colleagues to propose final 
rules in the not-too-distant future.
Next-Generation 911
    I remain committed to working with Congress and other stakeholders 
to improve our 911 system. Public safety is one of the primary and 
essential missions of the Commission, and it cannot be left behind in 
this technological revolution. But, in too many communities, the 
communications technology behind the 911 system is dangerously out of 
date. Too many Public Safety Answering Points have been unable to 
incorporate Next Generation capabilities and functions into their 
operations. PSAPs also face constant challenges to maintain adequate 
funding for ongoing operations.
    We at the FCC are committed to doing everything in our power to 
make the NG911 transition happen. We have taken action on such issues 
as improving 911 location accuracy, pushing the deployment of text-to-
911, and improving the reliability of legacy, transitional, and Next 
Generation 911 networks. We have also convened our PSAP Task Force, 
which has recently come back with great recommendations on how to build 
the Next Generation architecture for PSAPs. Modernizing the Nation's 
911 system will take work from many stakeholders and I am encouraged by 
the recent creation of a coalition to lead a national effort to 
successfully implement NG911 for all states and territories by the end 
of 2020.
    I know that public safety is also a priority of this Committee, and 
I would urge its Members to do all in their power to make sure our 
Nation's PSAPs have the tools and resources they need to accelerate the 
transition to NG911.
Privacy
    At the direction of Congress, the FCC has worked for years to 
implement laws that protect the privacy of consumers when they use 
communications networks and services, notably with rules to protect 
Customer Proprietary Network Information (CPNI). We need to make sure 
our policies are keeping up as communications technology continues to 
evolve.
    The Open Internet Order expressly determined that privacy 
protections of Title II should be applied to broadband providers and, 
in fact, the provisions of Section 222 apply to broadband providers 
right now. But we have a responsibility under the Communications Act to 
consider whether further guidance and consideration by the Commission 
could better protect the privacy of consumers.
    We're committed to taking a thoughtful, rational approach to 
addressing privacy protections and data security for consumers' use of 
Internet access services. We've begun the process of talking to 
stakeholders about section 222 in the broadband context, and continue 
to invite conversations about core privacy principles--transparency, 
choice and security--while also taking into account the FTC's 
complementary leadership and precedents, consumer expectations and the 
thriving innovation economy.
Conclusion
    The Commission has focused on harnessing the power of 
communications technology to grow our economy and enhance U.S. 
leadership, while preserving timeless values like universal service. As 
my testimony reflects, we have made significant progress toward these 
goals to the benefit of the public. And, to be clear, this is not an 
all-inclusive list. We continue to work on efforts to remove barriers 
to infrastructure deployment, empower Americans with disabilities, and 
improve the agency's internal operations, to name a few.
    I look forward to discussing these actions with the Committee today 
and working with you and my fellow Commissioners to build on this 
progress and maximize the benefits of communications technology for the 
American people.

    The Chairman. Thank you, Chairman Wheeler.
    Commissioner Rosenworcel?

 STATEMENT OF HON. JESSICA ROSENWORCEL, COMMISSIONER, FEDERAL 
                   COMMUNICATIONS COMMISSION

    Commissioner Rosenworcel. Thank you. Good morning, Chairman 
Thune, Ranking Member Nelson, and the members of the Committee. 
Thank you for the opportunity to appear before you today. It's 
my fourth time this Congress. But who's counting?
    As my colleague mentioned, last week, I had the privilege 
of speaking at the Mobile World Congress in Barcelona. It's a 
global gathering to discuss wireless technology. The good news 
is that the United States leads the world in the current 
generation of wireless technology known as 4G. While we have 
only 5 percent of the globe's population, we have over one-
third of its 4G deployment. But what I learned in Barcelona is 
that we have work to do to maintain our leadership role.
    Now, the good news is that wireless policy is front and 
center. This month, at the FCC, we will begin the world's first 
spectrum incentive auction, and, of course, this week, in front 
of this committee, you will consider MOBILE NOW legislation to 
advance our Nation's leadership in wireless policy.
    So in light of all of this, I am going to focus my remarks 
today on three aspects of the future of spectrum policy. First, 
the future of spectrum policy requires looking at millimeter 
wave spectrum. Today, the bulk of our wireless networks are 
built at 3 Gigahertz or below. But in the future, we are going 
to have to bust through that 3 Gigahertz ceiling and start 
looking at airwaves north of 24 Gigahertz. We are going to have 
to look at airwaves that go to infinity and beyond.
    Now, the signals at these high stratospheric frequencies do 
not go far. But if we combine them with dense networks of small 
cells, we are going to be able to have wireless networks that 
are 10 to 100 times faster than what we have today. These 
networks are going to be a formidable part of the next 
generation of wireless technology known as 5G.
    The race to 5G is on. What I learned last week is that our 
counterparts in Europe and Asia are already making headway. So 
it is imperative that the FCC complete its outstanding 
millimeter wave rulemaking and get it done this year.
    Second, the future of spectrum policy requires not just 
more licensed spectrum but also more unlicensed spectrum. In 
short, we need more Wi-Fi. Unlicensed spectrum like Wi-Fi 
democratizes Internet access, encourages permissionless 
innovation, and contributes $140 billion to the U.S. economy 
every year. It's good stuff. So in any effort to increase the 
licensed spectrum pipeline, we need to explore a cut for 
unlicensed. Call it the Wi-Fi dividend.
    Right now at the FCC, we have a golden opportunity for a 
Wi-Fi dividend in the upper portion of the 5 Gigahertz band. 
Thanks to the encouragement of this committee, we have smart 
framework for testing this band for unlicensed use while also 
protecting automobile safety. We need to work with our 
colleagues at the Department of Transportation and the 
Department of Commerce and get this testing underway.
    Third, the future of spectrum policy requires that we focus 
on the ground as much as on the skies. Spectrum gets all the 
glory, but the unsung hero of the wireless revolution is 
infrastructure, because no amount of spectrum will lead to 
better wireless service without good infrastructure on the 
ground. That means we need dig-once policies, we need smarter 
practices for deployment on our Federal lands, and we need 
updated policies for the deployment of small cells, which are 
going to be critical for next-generation 5G networks.
    Now, if we do these three things, we will create dramatic 
opportunities for new wireless services across the country. And 
let me finish by highlighting that last point, not in technical 
terms, but in human terms. We have problems to solve, resources 
that are constrained, and communities that need help navigating 
what is possible in the digital age.
    But we are on the cusp of cars that drive themselves, 
streets that can be safer, commute times that can be cut, 
emergency services that are more effective and healthcare that 
is more personalized, and communities with more capability 
across the board because they are more connected. It's already 
happening.
    The City of Chicago is deploying wireless sensors to help 
solve problems before they occur with childhood asthma, flash 
flooding, and street congestion. Coachella, California, has 
made Wi-Fi available on its school buses to help bridge the 
homework gap and help students who lack the connectivity they 
need to do basic school work. And wireless smart sewer systems 
have saved the City of South Bend, Indiana, millions by 
providing real-time analysis of waste water.
    These efforts are exciting, and they can be bigger and 
bolder if we have forward thinking steps with spectrum policy 
and if we take them right now.
    Thank you.
    [The prepared statement of Commissioner Rosenworcel 
follows:]

     Prepared Statement of Hon. Jessica Rosenworcel, Commissioner, 
                   Federal Communications Commission
    Good morning, Chairman Thune, Ranking Member Nelson, and members of 
the Committee. Thank you for the opportunity to appear before you along 
with my colleagues at the Federal Communications Commission.
    Last week I spoke at the Mobile World Congress in Barcelona. It's a 
global gathering to discuss wireless technology and the good things we 
can do with this invisible infrastructure. The United States has led 
the world in deployment of the current generation of wireless 
technology, known as 4G. While we have only five percent of the world's 
population, we have one-third of all 4G deployment. But what I learned 
in Barcelona is that we have work to do to stay in the lead.
    The good news is that wireless policy is front and center right now 
at the FCC. This month we will begin the world's first spectrum 
incentive auction. I know these matters are front and center for this 
Committee, too, as this week it will take up MOBILE NOW legislation. In 
light of this, I want to focus my statement today on three aspects of 
the future of spectrum policy.
    First, the future of spectrum policy requires looking at millimeter 
wave spectrum. Today, the bulk of our wireless networks are built on 
spectrum below 3 GHz. But in the future we need to bust through this 
ceiling and look high--really high--to infinity and beyond. We need to 
explore spectrum above 24 GHz and even north of 90 GHz. At these high 
frequencies, propagation is a challenge. But we can turn this 
limitation into a strength if we combine these stratospheric 
frequencies with dense networks of small cells. This will enable us to 
deliver wireless speeds more than 10 times higher than what we have 
today. This approach will be a major force in the next generation of 
wireless services, known as 5G. The race to 5G is on--and our 
counterparts in Europe and Asia are already making progress. So it's 
essential that the FCC get going, by completing our outstanding 
millimeter wave spectrum rulemaking this year and leading the way with 
the 28 GHz band.
    Second, the future of spectrum policy requires not just more 
licensed spectrum--but also more unlicensed spectrum. In short, we need 
more Wi-Fi. Unlicensed spectrum, like Wi-Fi, democratizes Internet 
access, encourages permissionless innovation, and is responsible for 
$140 billion in economic activity every year. Historically, the 
legislative process has overlooked the value of unlicensed spectrum 
because it gets low marks in the scoring process at the Congressional 
Budget Office. But this accounting misses the mark--because the broader 
benefits of unlicensed spectrum to the economy are so great. So in any 
effort to increase the licensed spectrum pipeline, we need to explore a 
cut for unlicensed--call it the Wi-Fi dividend.
    Right now at the FCC we have a golden opportunity for a Wi-Fi 
dividend in the upper portion of the 5 GHz band. Thanks to the 
encouragement of this Committee, we have a smart framework for testing 
this band for unlicensed use while also promoting vehicle safety. We 
need to work with our colleagues at the Department of Transportation 
and Department of Commerce and get this testing underway.
    Third, the future of spectrum policy requires that we focus on the 
ground as much as on the skies. Spectrum gets all the glory. But the 
unsung hero of the wireless revolution is infrastructure. Because no 
amount of spectrum will lead to better wireless service without good 
infrastructure on the ground.
    We can begin with Dig Once policies--which can pave the way for 
more broadband deployment by ensuring that when construction crews are 
building or repairing roads, broadband conduit is deployed at the same 
time. We should also take a comprehensive look at tower siting on 
Federal lands--which make up as much as one-third of our national real 
estate. We can expedite deployment here by creating an open data 
inventory of infrastructure and standardizing the use of contracts from 
the General Services Administration.
    At the same time, we need to think beyond traditional tower siting. 
5G use of millimeter wave spectrum puts a new premium on small cells. 
To get this infrastructure in place we will need to find ways to 
harmonize municipal review by developing model practices and program 
alternatives.
    If we do these things, we will create dramatic opportunities for 
new wireless technologies across the country.
    Let me finish by highlighting that last point--not in technical 
terms, but in human terms. We have problems to solve, resources that 
are constrained, and communities that need help navigating what is 
possible in the digital age. But we are on the cusp of cars that drive 
themselves, streets that can be safer, commute times that can be cut, 
emergency services that are more effective, healthcare that is more 
personalized, and communities with more capability across the board 
because they are more connected.
    There's evidence it's already happening. The City of Chicago is 
deploying wireless sensors to help solve problems before they occur--
with childhood asthma, flash flooding, and street congestion. 
Coachella, California, has made Wi-Fi available on its school buses to 
bridge the Homework Gap and help students who lack the connectivity 
they need at home do basic schoolwork. And wireless smart sewer systems 
have saved the City of South Bend, Indiana, millions by providing real-
time analysis of its wastewater.
    These efforts are exciting. But they can be even bigger and bolder 
if we take forward-thinking steps with spectrum policy--and take them 
right now.
    Thank you. I will be happy to answer any questions you might have.

    The Chairman. Thank you, Commissioner Rosenworcel.
    Commissioner Pai?

           STATEMENT OF HON. AJIT PAI, COMMISSIONER, 
               FEDERAL COMMUNICATIONS COMMISSION

    Commissioner Pai. Chairman Thune, Ranking Member Nelson, 
and members of this Committee, thank you for holding this 
hearing. I'd like to focus this morning on four issues on which 
this committee has led: direct dialing 911, contraband cell 
phones, 5 Gigahertz spectrum, and millimeter wave spectrum.
    First, ensuring direct access to 911 is important, both to 
me and to members of this committee. Last month, Senators 
Fischer and Klobuchar, along with Senators Cornyn, Cruz, and 
Schatz, introduced the Kari's Law Act of 2016. I commend those 
Senators for their leadership.
    Many knew of the tragedy that inspired this legislation. In 
December 2014, Kari Rene Hunt Dunn was attacked and killed by 
her estranged husband in a hotel room in Marshall, Texas. Her 
9-year-old daughter tried calling 911 four times as she had 
been trained to do. But those calls never went through, because 
the hotel's phone system required her first to dial a 9 before 
911.
    When I first learned about this sad case 2 years ago, I 
started an inquiry into the status of 911 dialing. And to date, 
we have made substantial progress across this country in fixing 
the problem. When we started, for example, no major hotel 
company required franchisees to permit direct to 911 dialing. 
Today, nearly every major chain does.
    But the job isn't done, and that's why the Kari's Law Act 
of 2016 is needed. It would require that all multiline 
telephone systems sold, leased, or installed in the United 
States allow direct 911 dialing as the default setting. I hope 
this bill becomes law soon.
    Second, I want to turn to the threat posed by inmates' use 
of contraband cell phones. These devices present a major threat 
to public safety, and that threat has only grown worse of late. 
Contraband cell phones are now flooding into our Nation's jails 
and prisons. Inmates are using them to order hits, to run drug 
operations, arrange gang activity, and victimize innocent 
members of the public. I heard about these disturbing 
developments firsthand last October when I visited a maximum 
security prison in Jackson, Georgia.
    We cannot let inmates treat prison as just another base of 
operations for criminal enterprises. We need to act. Now, in 
2009, this Committee passed bipartisan legislation to help law 
enforcement combat this serious threat, and in 2013, the FCC 
picked up the baton with a Notice of Proposed Rulemaking. In 
it, the agency teed up technological solutions and regulatory 
reforms.
    We now need to follow through. To help do that, I announced 
earlier this week that I would hold a field hearing on 
contraband cell phones in South Carolina on April 6. I hope 
that this event will reboot the conversation and build the 
foundation for a robust FCC response.
    Third, I want to thank the Committee for its leadership in 
identifying and drawing attention to the 5 Gigahertz band, a 
band ideally suited for unlicensed use. Four years ago, the 
Spectrum Act called on the FCC to begin the process of opening 
up this band, and the FCC did that in 2013. Since then, 
Senators Marco Rubio and Cory Booker have introduced the Wi-Fi 
Innovation Act, a substantial measure which would help move the 
process forward.
    Right now, there are up to 195 Megahertz of 5 Gigahertz 
spectrum that the FCC could open up for consumer use. Putting 
this spectrum to work could herald a new world of Gigabit Wi-
Fi. So the FCC needs to get this done. But progress hasn't been 
fast enough. Both Qualcomm, through its re-channelization 
approach, and Cisco, through its detect and avoid proposal, 
have identified paths forward, and I hope that we get this 
proceeding across the finish line and soon for the benefit of 
American consumers.
    Fourth and finally, I want to commend Chairman Thune and 
Ranking Member Nelson for the introduction of the MOBILE NOW 
Act and for the spirit of bipartisanship which they showed in 
engaging in that measure. In particular, I want to commend them 
for calling on the FCC to move forward on opening up the 
millimeter wave bands for mobile use.
    Companies are now investing heavily in mobile technologies 
that rely on spectrum above 24 Gigahertz as part of their work 
on 5G technologies. We should aid those efforts with rules that 
will allow 5G to develop in the United States as quickly as 
technology and consumer demand will allow.
    Now, on that score, there is plenty of work to do. The FCC 
recently adopted a notice of proposed rulemaking addressing 
some bands above 24 Gigahertz, but we left 12,500 Megahertz of 
spectrum on the cutting room floor. I called on the agency to 
focus on those bands as well. So I'm glad that this committee, 
too, is looking to move more massive swaths of millimeter voice 
spectrum into the commercial marketplace.
    Chairman Thune, Ranking Member Nelson, and members of this 
Committee, thank you once again for holding this hearing. I 
look forward to answering your questions and to continuing to 
labor alongside you on these critical matters.
    Thank you.
    [The prepared statement of Commissioner Pai follows:]

          Prepared Statement of Hon. Ajit Pai, Commissioner, 
                   Federal Communications Commission
    Chairman Thune, Ranking Member Nelson, and Members of the 
Committee, thank you for giving me the opportunity to testify this 
morning. Since 2012, it has been an honor to work with you on a wide 
variety of issues, from encouraging broadband deployment in rural 
America to saving taxpayers over $3 billion by cracking down on abuse 
of the designated entity program.
    I would like to focus my testimony on four issues where this 
Committee has led. They are: (1) ensuring direct dialing for 911 calls; 
(2) combating the threats posed by inmates' use of contraband 
cellphones; (3) freeing up 5 GHz spectrum for the next generation of 
unlicensed use; and (4) opening up spectrum bands above 24 GHz for 5G 
and other innovative wireless technologies.
    I'll start with the two public safety issues.
    Direct Dial 911.--Ensuring direct access to 911 is important both 
to me and the Members of this Committee. Last month, Senators Deb 
Fischer and Amy Klobuchar, along with Senators John Cornyn, Ted Cruz, 
and Brian Schatz, introduced The Kari's Law Act of 2016. I commend 
those Senators for their leadership.
    Many people now know the tragedy that inspired this legislation. In 
December 2014, Kari Rene Hunt Dunn was attacked and killed by her 
estranged husband in a Marshall, Texas, hotel room. Her nine-year-old 
daughter, who was with her, tried calling 911 four times as she had 
been taught to do. But her calls for help never went through. That's 
because the hotel's phone system required guests to dial a ``9'' before 
calling 911.
    When I learned about this two years ago, I started an inquiry into 
the status of 911 dialing at properties across the country that use 
multi-line telephone systems. I wanted to understand the scope of the 
problem and what we could do to fix it. At the time, I gave Kari's 
father, Hank Hunt, my personal commitment that I would do my best to 
ensure that no one would ever again confront that situation.
    Hank has been a tireless advocate for this cause. One year ago, I 
visited Marshall, Texas, and the 911 dispatch center where the call 
from Kari's daughter would have--and should have--gone. I was honored 
to stand with Hank and report on the progress that had been made in 
just one year's time.
    The progress continues to this day. The American Hotel & Lodging 
Association, which has been a leader in changing industry practice, 
just sent me a progress report. When we started, none of the major 
hotel companies required franchisees to permit direct 911 dialing. Now, 
nearly every hotel chain, including Best Western, Carlson Rezidor, 
Hilton, Hyatt, La Quinta, Motel 6, Starwood, and Wyndham has 
established such a requirement as part of its brand standard. When we 
started, direct dial 911 calls would not have gone through at 55 
percent of franchised hotels. Now, that percentage is substantially 
lower. Consider InterContinental, which includes Holiday Inn, Crowne 
Plaza, and Staybridge. At the start of my inquiry, it reported that 
nearly 1,000 of its properties lacked direct dialing capability. Today, 
each and every one of those properties allows direct dialing.
    And the progress isn't limited to hotels. Even the FCC itself has 
changed; it now allows direct 911 dialing. I want to thank Chairman 
Wheeler for making this happen.
    But the job isn't done. The Kari's Law Act of 2016 would take us 
one step closer to accomplishing Hank's mission. It would require that 
all multi-line telephone systems sold, leased, or installed in the 
United States allow direct 911 calling as the default setting. So I 
applaud the efforts of Hank, Members of this Committee, and the many 
others who are making a difference on this issue. I hope this bill, 
like Congressman Louie Gohmert's companion legislation in the House of 
Representatives, becomes law soon.
    Contraband Cellphones.--I want to turn next to another public 
safety issue that this Committee has worked on. That is the threat 
posed by inmates' use of contraband cellphones. This Committee has a 
longstanding interest in this issue. For instance, in 2009, this 
Committee examined bipartisan legislation designed to help law 
enforcement combat this threat.
    In 2013, the FCC picked up the baton by releasing a Notice of 
Proposed Rulemaking. The agency teed up technological solutions and 
identified possible regulatory reforms--everything from streamlining 
our review of spectrum leases to making it easier for corrections 
facilities and wireless providers to work together. To date, the FCC 
has not taken further action in the rulemaking.
    The use of contraband cellphones is a major public safety problem. 
And the threats they pose have only gotten worse over the past few 
years. They are now flooding into our Nation's jails and prisons. 
Inmates are using them to order hits, run drug operations, direct gang 
activity, and victimize innocent members of the public.
    I've heard about these disturbing developments firsthand. Last 
October, I visited a maximum-security prison in Jackson, Georgia, to 
learn more about this problem. To put it mildly, I was disturbed by 
what I heard.
    Georgia Department of Corrections Commissioner Homer Bryson, Warden 
Bruce Chatman, and other corrections officers told me that prisoners 
are using contraband cellphones to extort the family and friends of the 
incarcerated, putting inmates' safety and lives at risk. For example, 
inmates texted the wife of one Georgia prisoner and demanded $1,000. 
When she couldn't gather the money, she was texted an image of her 
husband with burns, broken fingers, and the word ``RAT'' carved into 
his forehead. In another case, a woman received images on her phone of 
her incarcerated boyfriend being strangled with a shank held to his 
head. She was told that unless she forked over $300, the beatings would 
continue. She could only afford to send about half that amount. Sadly, 
the assaults didn't stop, and after a severe beating, he died.
    The problem is not limited to any one state. In South Carolina, for 
example, a gunman kicked down the door of a corrections officer in the 
early morning hours and shot him six times in the chest and stomach. 
Thankfully, he survived. The hit was coordinated by an inmate using a 
contraband cellphone, and it was ordered because the officer was too 
good at his job--which involved confiscating contraband, including 
cellphones.
    These devices aren't only used for violent crimes. Inmates are also 
using them to run phone scams and con innocent members of the public 
out of their hard-earned money.
    The bottom line is this: The status quo is not acceptable. We 
cannot let inmates treat prison as just another base of operations for 
criminal enterprises. The FCC needs to act.
    To help meet that obligation, I announced earlier this week that I 
will hold a field hearing on contraband cellphones in Columbia, South 
Carolina, on April 6, 2016. By gathering more facts and discussing 
possible solutions, I hope the field hearing will reboot the 
conversation and build a foundation for a robust FCC response. The FCC 
needs to do everything it can to help law enforcement combat this 
problem. I intend to do my part to make that happen. I look forward to 
working with my colleagues at the FCC and the Members of this Committee 
on this matter.
    I'll turn next to two spectrum issues that this Committee has been 
considering.
    5 GHz Band.--I want to thank the Committee for its leadership in 
identifying and drawing attention to the 5 GHz band, a band ideally 
suited for unlicensed use. The Spectrum Act, which was signed into law 
four years ago last week, called on the FCC to begin the administrative 
process for opening up the 5 GHz band. The FCC did that in 2013.
    Since then, Senators Marco Rubio and Cory Booker have introduced 
the Wi-Fi Innovation Act. That bill would require the FCC to test the 
feasibility of opening the upper portion of the 5 GHz band to 
unlicensed use--a portion of the band known as U-NII-4. Chairman Thune 
and others have also played key roles in helping to move the ball 
forward on this part of the 5 GHz band. I applaud those efforts.
    Taken together, in the U-NII-4 band as well as the lower, U-NII-2B 
band, there are up to 195 MHz of spectrum that the FCC could open up 
for consumer use. It is not hyperbole to say that this could transform 
the wireless world. For this spectrum is tailor-made for the next-
generation of unlicensed use. Its propagation characteristics minimize 
interference in the band, and the wide, contiguous blocks of spectrum 
allow for extremely fast connections, with throughput reaching one 
gigabit per second. The technical standard to accomplish this, 
802.11ac, already exists, and devices implementing it are already being 
built. All of this means we can rapidly realize the benefits of more 
robust and ubiquitous wireless coverage for consumers, more manageable 
networks for providers, a new test bed for innovative application 
developers, and other benefits we can't even conceive today. I think 
you would be hard pressed to find a band that would be easier to open 
up for consumer use.
    So the FCC needs to get this done. But progress has not been fast 
enough. I have been calling on the FCC to open these bands up since 
2012. Both Qualcomm, through its re-channelization approach, and Cisco, 
through its detect-and-avoid proposal, have identified paths forward. I 
hope the agency gets this proceeding across the finish line, and soon.
    Spectrum Above 24 GHz.--Finally, I want to commend Chairman John 
Thune and Ranking Member Bill Nelson on the introduction of the MOBILE 
NOW Act. In particular, I commend them for calling on the FCC to move 
forward on opening up millimeter-wave bands for mobile use.
    Not long ago, most would have thought of the millimeter wave bands 
as dead zones when it came to mobile services. After all, nearly all 
commercial mobile networks operate in frequencies below 3 GHz. But as 
has been the hallmark of the communications sector, engineers are 
finding a way and technology is advancing.
    Companies are now investing heavily in mobile technologies that 
rely on spectrum above 24 GHz as part of their work on 5G mobile 
technologies. Over a year ago, I visited Samsung's 5G research lab near 
Dallas, Texas. There, engineers are hard at work developing base 
stations and mobile technologies that are crossing into these spectrum 
frontiers. Their experiments with multiple-input, multiple-output 
antennas no bigger than a Post-it note have already demonstrated that 
5G technologies can use millimeter wave bands to deliver mobile speeds 
in excess of 1 gigabit per second.
    More recently, I attended Intel's demonstration of its millimeter 
wave technology at the FCC's headquarters. It showed how spectrum above 
24 GHz can be used to beam signals off tables, buildings, or other 
objects to find the most efficient, highest-capacity connection between 
a base station and mobile user. These and many other efforts will 
enable consumers to enjoy the next generation of wireless connectivity.
    What is the FCC's role here? In my view, we should put a framework 
in place that will allow 5G to develop in the United States as quickly 
as the technology and consumer demand allow. The U.S. has led the world 
in 4G, and there is certainly a lot of running room left with LTE and 
LTE-Advanced. But we must continue to lead as mobile technologies 
transition to 5G. The key is to make sure that the FCC does not become 
a regulatory bottleneck or send signals that would lead companies to 
focus their research and investments abroad.
    On that score, there's plenty of work to do. On the plus side, we 
unanimously inquired about opening up numerous millimeter-wave bands in 
2014, and the record contained robust support for moving forward on 
them.
    But our recent rulemaking only addresses some of the bands above 24 
GHz. There's another 12,500 MHz of spectrum in the 24 GHz band, 32 GHz 
band, 42 GHz band, and the 70 and 80 GHz bands that might be used for 
mobile services. I called on the FCC to focus on those bands as well. 
Although I wish that the Commission had found a way to do so, I'm glad 
that this Committee is looking to move those massive swaths of spectrum 
into the marketplace. I hope those efforts bear fruit and that the 
Commission will take appropriate action soon.
    Chairman Thune, Ranking Member Nelson, and Members of the 
Committee, thank you once again for holding this hearing and allowing 
me the opportunity to testify. I look forward to answering your 
questions, listening to your views, and continuing to work with you and 
your staff in the days ahead.

    The Chairman. Thank you, Commissioner Pai.
    Commissioner O'Rielly?

   STATEMENT OF HON. MICHAEL O'RIELLY, COMMISSIONER, FEDERAL 
                   COMMUNICATIONS COMMISSION

    Commissioner O'Rielly. Thank you, Chairman Thune, Ranking 
Member Nelson, and members of the Committee, for the 
opportunity to participate in the Committee's FCC oversight 
process.
    The Commission has collectively recognized the need to act 
on wireless issues and especially next-generation networks, 
commonly referred to as 5G. To realize private sector 
deployments, it is paramount that additional licensed and, 
where appropriate, unlicensed bands be made available in both 
the traditional sub-6 Gigahertz frequencies and higher bands, 
including those above 24 Gigahertz.
    The U.S. is currently the world leader in 4G wireless 
communications because our Nation's wireless providers 
endeavored to meet the insatiable consumer demand for new data 
services and recognized the economic value in doing so. Any 
unnecessary delay risks another nation setting the terms of the 
next 15 years of wireless communications, something which we 
should make sure does not happen.
    Along the same lines, I find it necessary to express my 
concerns with the outcome of last November's World 
Radiocommunications Conference. Member nations were unable to 
agree to even study certain bands for future mobile use. In 
particular, the failure to study 28 Gigahertz of highly favored 
band for 5G in the U.S. and other leading technology companies 
means that the U.S. will move forward with our own studies and 
deployment, bypassing the ITU and undermining its future.
    Besides spectrum, companies will need to deploy additional 
facilities in a timely and cost-effective manner. Unnecessary 
siting expenditures will slow down 5G and broadband deployment. 
Let me suggest a few ways in which burdens can be reduced for 
small cell and tower siting.
    First, the Commission must follow through on its commitment 
to expand the relief provided to small cell and DAS 
installations. In addition, despite the best effort of the 
Congress, localities are still blocking far too many facility 
siting attempts. Some options to deal with this include ending 
repetitive permit requirements when multiple small cells are 
sited in close vicinity and preventing permits from being 
denied based on localities' estimate of sufficient 
infrastructure and coverage. For larger towers, co-location 
must be promoted, including by reducing burdens for replacement 
towers and compound expansion, and by resolving the decades old 
problem of twilight towers which will also promote co-location 
and wireless deployment.
    Changing topics, Congress should be mindful of efforts by 
the Commission to expand its regulatory mission, including to 
cover non-communication companies like edge providers. These 
decisions often impact entities that are not familiar with the 
Commission's activities and potentially subject them to get 
another regulatory body or conflicting set of rules.
    Separately, the Commission's creative license in regard to 
statutory interpretation is beyond measure. In some instances, 
the FCC has set aside the intent of Congress, deals struck at 
the time, reams of its own precedent, and sometimes even the 
English language to reinterpret a statute and to force old 
statutory paradigms onto new innovations, all in a single 
minded pursuit of a particular outcome. The result: 
Permissionless innovation is being put through the unnecessary 
wringer, which threatens American economic output, employment, 
and innovation.
    I would also like to bring to your attention three issues 
where a change in law could be beneficial. First, payments made 
in response to USF-related forfeiture orders or consent decrees 
should go back to the fund, thereby reducing the amount of 
money needed from consumers. Second, legislation in the area of 
pirate radio could be helpful to give the Commission more 
enforcement tools and better focus its efforts. Finally, as I 
have often highlighted shortcomings in the Commission's 
processes, I want to again acknowledge Senator Heller's 
continuing reform efforts. Sadly, I must report there are no 
updates on our end.
    Thank you for your time, and I stand ready to answer any 
questions you may have.
    [The prepared statement of Commissioner O'Rielly follows:]

      Prepared Statement of Hon. Michael O'Rielly, Commissioner, 
                   Federal Communications Commission
    Thank you, Chairman Thune, Ranking Member Nelson, and Members of 
the Committee for the opportunity to participate in the Committee's FCC 
oversight process. Since this time last year, a lot has occurred at the 
Commission, and more difficult issues are expected in the coming 
months. While fundamental differences remain on many matters, 
individual Commissioners still seek to find agreement on particular 
issues whenever possible.
Future Wireless Spectrum Demands
    One instance where there has been general recognition at the 
Commission for the need to act is on wireless issues. Much of the 
recent dialogue pertaining to wireless communications has focused on 
next generation wireless networks, commonly referred to as ``5G.'' 
Early visions, architecture designs and equipment demonstrations 
indicate significant improvements in speed, latency and capacity. I've 
seen this technology firsthand during my travels in the U.S. and 
internationally, and expect to see more in the coming weeks. While 
early reports are exciting and promising, it is important to proceed 
with an open mind and an eye towards flexibility in order to promote 
innovation and investment, as many of the concepts and eventual 
standards may change in the years leading to wide scale deployment. To 
that end, everyone may want to be slightly careful not to over-hype the 
technology until it is further along a trajectory.
    To realize private sector 5G deployments in the future, action is 
needed now to allocate additional spectrum. It is paramount that 
additional licensed and, where appropriate, unlicensed bands be made 
available in both the traditional sub-6 GHz frequencies and higher 
bands, including those above 24 GHz. The broadcast spectrum incentive 
auction, if successful, may provide one source of new low-band 
spectrum. Further, significant work has been done by the Commission on 
freeing millimeter bands, and I look forward to completing a final item 
in the summer and expanding the scope of bands in a further notice, per 
my request. On that note, the Commission should be willing to consider 
spectrum blocks that total less than 500 megahertz, and no high-band 
spectrum block should be automatically off the table, especially since 
we do not know where technological enhancements will take us.
    The U.S. is the current world leader in 4G wireless communications, 
because our Nation's wireless providers endeavored to meet the 
insatiable consumer demand for new data services and have recognized 
the economic value in doing so. That leadership position will be 
challenged in the future, however, because other nations see the value 
in being the first to deploy 5G. Any unnecessary or artificial delay 
risks another nation setting the terms of the next 15 years of wireless 
communications, something we should make sure doesn't happen.
    Along the same lines, I find it necessary to express my concerns 
with the outcome of last November's World Radiocommunication Conference 
(WRC-15). While the U.S. may have achieved certain stated goals on the 
non-commercial side, WRC-15 proved to exemplify a broken and outdated 
process. Although I only attended the first week of the conference, I 
can report that some attending nations participated in parliamentary 
games for the sole purpose of protectionism. Lost in this process was a 
recognition of the need to meet the spectrum demands of wireless 
providers--here and abroad.
    In a number of critical spectrum bands, the International 
Telecommunication Union (ITU)-led body was unable to agree to even 
study certain bands for potential harmful interference to incumbent 
users if new wireless services were to be permitted. This lack of 
collegiality and professionalism undermined the future of the 
organization. In particular, WRC-15's inability to permit a study of 
the 28 GHz band -highly favored for 5G use in the U.S. and other 
leading technology countries--means that the U.S. will move forward 
with our own studies and deployment, bypassing the ITU. As for those 
governments that may not share our forward-looking approach, they will 
be left on the sidelines.
Wireless Infrastructure
    Going forward, the next generation of wireless networks also poses 
another challenge that must be addressed--infrastructure siting. To 
realize the promise of 5G, companies will need to expeditiously deploy 
facilities in a cost effective manner. Unnecessary siting expenditures 
substantially risk slowing 5G and broadband deployment. I look forward 
to working with the Committee on this issue going forward, and I offer 
a few ways in which burdens can be reduced for small cell and tower 
siting.
    First and foremost, the Commission must abide by its commitment to 
expand upon the historic preservation and environmental process relief 
provided to small cell and DAS installations, in its October 2014 
Infrastructure Order within the time-frame allotted, which is rapidly 
approaching 18 months. This process needs to be completed as quickly as 
possible and under no circumstances should it extend beyond this fall.
    In addition, despite the best efforts of Congress, localities are 
still blocking far too many facilities siting attempts. The horror 
stories are endless: permitting problems, excessive fees and de facto 
moratoria, especially in obtaining the requisite site approvals in 
rights-of-way. Some options to deal with this include ending repetitive 
permit requirements when multiple small cells are sited in close 
vicinity, and preventing permits from being denied based on a 
locality's estimate of sufficient infrastructure and coverage. Everyone 
wants the benefits of wireless broadband services, but that cannot be 
accomplished without infrastructure.
    For larger towers, collocation must be promoted. Process 
improvements could include reducing burdens for replacement towers and 
compound expansion. Oftentimes, it is cheaper to build a replacement 
tower directly next to an existing facility on land already zoned for 
that purpose than fortifying an old structure. Additionally, sometimes 
the area of a tower site has to be increased slightly to permit backup 
power facilities and provider backhaul equipment. Such changes should 
not require a repeat of the arduous siting review process.
    Resolving the decades-old problem of twilight towers will also 
promote collocation and wireless deployment. Productive conversations 
with shareholders are occurring, but we need greater accommodation in 
order to develop a lasting resolution by this summer or fall. My goal 
here is to solve this problem and any disputes in a quick but 
thoughtful way, not punish or subject wireless companies to our 
Enforcement Bureau and huge payouts.
    Lastly, one of the most frequent complaints I hear about are 
problems with siting on Federal lands. I appreciate this Committee's 
efforts to tackle this problem, among others, in the MOBILE NOW bill. 
Although the FCC does not have a role here, I offer to assist in any 
way possible.
Areas of Concern/Troubling Developments
    Congress should be mindful of efforts by the Commission to expand 
its regulatory mission. For example, over the last couple of years, the 
Commission has expanded the scope of its reach to cover non-
communications companies, like so-called ``edge providers.'' This 
practice is exceptionally disturbing because these decisions often 
impact entities that are not familiar with or do not closely follow the 
Commission's activities. Beyond potentially subjecting these providers 
to yet another regulatory body or a conflicting set of new rules, the 
Commission is using the process to establish precedent under 
questionable procedures.
    Take, for instance, the case of First National Bank, which was 
served a citation for possible violations of the Telephone Consumer 
Protection Act based solely on its terms of service, without even 
making a single so-called ``robocall.'' Before First National was ever 
notified about the citation, the Commission had already tried the case 
through the press, harming the company's reputation. Interestingly, the 
citation was dismissed two months later without similar fanfare. The 
Commission has also negotiated settlements with providers under cloak 
of protected negotiations, meaning no other party was made aware or 
allowed to comment, and then tried to treat the terms of those 
agreements as some kind of precedent and apply them to other 
unsuspecting companies.
    Separately, the Commission's creative license in regard to 
statutory interpretation is beyond measure. While an argument can be 
made that the Commission has always taken some latitude when 
interpreting the provisions in current law, a number of recent items 
have stretched the boundaries of logical reasoning. It's what late 
Justice Scalia might have referred to as ``interpretive jiggery-
pokery,'' and these newly ``found'' grants of authority have been used 
to initiate questionable proceedings and implement suspect policies. In 
essence, the FCC has been known to set aside the intent of Congress, 
deals struck at the time, reams of its own precedent, and sometimes 
even the English language itself to ``reinterpret'' a statute, all in a 
single-minded pursuit of a particular outcome.
    Moreover, this disingenuous approach to statutory interpretation is 
being used as a means to force old statutory paradigms on to new 
innovations, over and over again. Wireless broadband networks are 
transformed into Title II wireline phone companies, over-the-top video 
providers are being shoehorned into Title VI as MVPDs, apps offered by 
video providers are magically set-top boxes, and ``tech transitions'' 
has become a rallying cry for saddling new fiber deployments and 
services with legacy obligations, instead of actually transitioning 
away from old technologies and the outdated rules that governed them.
    Without attempting to re-litigate the Commission's Net Neutrality 
decision, it seems necessary to remind everyone of the implementation 
concerns expressed by many at the time. In particular, opponents of the 
Commission's rules highlighted how innovation would be subject to the 
whims of the Commission under the so-called ``general conduct 
standard.'' Considering the Commission's approach to zero rating 
offerings, it is apparent that our concerns were warranted. 
Specifically, the Commission blessed such offerings one month, 
unleashed a regulatory inquisition the next month, and then seemingly 
dismissed concerns the following month. Along the way, the Commission 
has been unwilling to provide any closure, thus ensuring that the 
entities and their products remain under public suspicion. 
``Permissionless'' innovation is being put through an unnecessary 
wringer, which threatens American economic output, employment, 
innovation, and other critical factors to our Nation's success.
Suggestions for Possible Legislative Changes
1. USF Penalties and Fines Redistributed
    With your indulgence, I would also like to bring to your attention 
an issue where a change in law could benefit all consumers that pay to 
support the Federal universal service fund (USF or Fund). Under current 
law, payments made in response to FCC or Enforcement Bureau forfeiture 
orders or consent decrees--including those involving failure to 
contribute to USF or outright fraud against the Fund--are remitted to 
the U.S. Treasury. While this makes sense in many contexts, different 
treatment may be warranted for USF actions. In those instances, 
consumers have paid extra on their monthly phone bills to support USF 
while companies have shirked their legal responsibilities or abused USF 
programs to the detriment of consumers. Under those circumstances, it 
would seem that an appropriate remedy would be to remit the USF portion 
of the fines or ``voluntary contributions'' back to the Fund, thereby 
returning at least a portion of the money that should have gone to USF 
in the first place.
    In the past, arguments have been made that it would be hard to 
track down which consumers overpaid and reimburse them. But it doesn't 
have to be that complicated. Payments that are made to the Fund in a 
given quarter as a result of enforcement actions can be used to offset 
overall program spending in the next quarter, thereby reducing the 
amount that consumers need to pay on their phone bills that next 
quarter. While this may not provide full compensation to each 
individual consumer that was harmed, it is better than the current 
situation where no money is returned to USF and no ratepayer receives 
any offset. And with USF spending trending higher each year, I imagine 
that even a modest reduction in fees on consumer phone bills would be a 
welcome change. Further, by dedicating such collected monies to the 
Fund, it should decrease concerns in this instance that the 
Commission's enforcement activities could be driven by its desire for 
additional budgetary resources.
2. Pirate Radio
    In the last year, I have been drawing attention to the problem of 
pirate radio. It may not be a huge concern nationwide, but it's 
expanding at an alarming rate in places like Florida, New York, New 
Jersey, and California. And as the equipment needed for high-powered 
broadcasting is becoming less expensive and more widely available, we 
can anticipate that the pirate problem will spread to more cities if 
current trends continue. Far from the amateurish operations that some 
may be picturing, modern pirate radio stations can be very 
sophisticated, established, and lucrative.
    Pirate stations drain resources from legitimate broadcasters and 
cut off the public from critical emergency information. That they are 
allowed to flourish and expand uninterrupted is a major failing on the 
Commission's part. It is a fundamental responsibility of the FCC to 
defend the radio band and all of our licensed spectrum from illegal 
interference, regardless of who is doing the interfering, or why.
    We need to increase enforcement activity in the field, first and 
foremost. I also believe the fight to eliminate pirate radio could get 
a significant boost from a concurrent outreach and education effort. 
Legitimate building owners, advertisers, political campaigns, concert 
promoters, and the like, want nothing to do with facilitating illegal 
activities. But they may not be aware of the pervasiveness and 
seriousness of the problem. So I'm working with the Chairman and my 
colleagues to clearly outline the Commission's pirate radio policies 
and enforcement goals in an advisory document we can use to spread the 
word. Legislation in this area could be helpful as well, to give the 
Commission more enforcement tools and better focus its efforts. Such an 
undertaking would need to be fairly and carefully balanced so as not to 
unnecessarily threaten legitimate businesses that find themselves 
caught in the web of a pirate radio station's lies and deceit.
3. Process Reform
    Finally, as I have often highlighted shortcomings in the 
Commission's processes, I would be remiss if I failed to acknowledge 
Senator Heller's continuing reform efforts, and note any developments 
on internal reforms contemplated on our end. Unfortunately, there is no 
update on this front, and the same failures of transparency and 
fairness continue to impact the quality of both public input and 
Commission decisions.
    To discuss just one example, documents circulated to the 
Commissioners for a decision are still not available for public review 
at the same time, and far from being isolated to one particular issue, 
the pitfalls of this approach are seen regularly. Stakeholders in 
Commission proceedings often have incorrect or incomplete information 
about what is being considered, and Commissioners are not even 
permitted to discuss the substance beyond what the Chairman has chosen 
to make public. So our ex parte meetings are far less productive than 
they could and should be, and there are sometimes nasty surprises when 
an item is finally released. Several people who met with me or my staff 
last month regarding the set-top box proceeding noted the fact that 
they were at a disadvantage, not having been able to read such a 
complex document packed with novel statutory interpretations and 
proposals before attempting to engage with the Commission on the 
substance. And the problem will be exacerbated later this year when the 
Commission heads into even more uncharted territory like privacy. There 
is no need for this predicament, and it is easily remedied. The issues 
may be up for debate, but transparency should never be.

    The Chairman. Thank you, Commissioner O'Rielly.
    Commissioner Clyburn?

  STATEMENT OF HON. MIGNON L. CLYBURN, COMMISSIONER, FEDERAL 
                   COMMUNICATIONS COMMISSION

    Commissioner Clyburn. Chairman Thune, Ranking Member 
Nelson, members of the Committee, good morning. What a 
privilege it is for me to appear before you. Today, I would 
like to center my testimony on two Congressional directives 
relating to universal service and diversity.
    I took seriously my commitment to you, Chairman Thune, to 
modernize the universal service support program for rate-of-
return carriers and stop penalizing carriers whose customers 
migrate to broadband-only lines. This collaborative process has 
resulted in reforms that are a win-win for rural customers and 
those who contribute to the Universal Service Fund.
    Commissioner O'Rielly and the Chairman--I joined them, I'm 
thankful to say. We presented a framework for consideration 
that should modernize the program in a manner that is simple, 
rewards efficiency, and sets forth a path to ensure that we 
connect unserved households and disaggregate support in areas 
served by an unsubsidized competitor.
    But as laudable as this proposal is, the FCC still must 
address the lack of broadband access on tribal lands and the 
gaps that remain in mobile broadband coverage throughout this 
Nation. Millions of Americans are stuck in digital darkness. 
They lack the technological infrastructure needed to improve 
their lives, particularly when it comes to healthcare. Life-
saving and life-changing technologies, like the one I witnessed 
in Ruleville, Mississippi, that manages the care of patients 
with chronic diabetes, are only possible if broadband is both 
available and affordable.
    When it comes to universal service reform, we have no 
choice but to modernize--or allow me to boldly say this morning 
completely overhaul--the Federal Lifeline program. We can never 
forget that Section 254 of the Communications Act places equal 
weight on the needs of low-income consumers as it does for 
those living in rural areas when it comes to access to advanced 
services. The FCC should never turn its back on this directive.
    So let us roll up our sleeves, refrain from dwelling on 
what may be wrong, and start working on fixing and finding 
solutions to address whatever is deficient in Lifeline so that 
low-income Americans once and for all may have access to those 
life-changing opportunities that broadband has unleashed for 
the rest of us.
    Section 257 of the Communications Act tasks the Commission 
with identifying and eliminating market entry barriers and 
promoting the purposes of favoring diversity of media voices, 
vigorous economic competition, technological advancement, and 
promotion of public interest, convenience, and necessity. 
However, I have spoken to dozens of independent programmers who 
say they face insurmountable challenges when it comes to 
acquiring carriage; that it is difficult to receive fair or 
reasonable contract terms; and growth in their online 
distribution model is prohibited or inhibited because program 
distribution access is often restricted via contract.
    For every independent programmer that reaches an agreement 
with an MVPD, there are countless others who cannot even get a 
simple telephone call returned. So I am pleased to say that my 
fellow commissioners joined me in voting for an Independent 
Programming Notice of Inquiry during our February meeting, 
which will launch discussions about what role, if any, the 
Commission should play in addressing obstacles that may be 
preventing greater access by consumers to independent and 
diverse programming.
    Members of the Committee, I am truly grateful for the 
opportunity to speak with you today and look forward to 
answering any questions you may have.
    Thank you.
    [The prepared statement of Commissioner Clyburn follows:]

        Prepared Statement of Mignon L. Clyburn, Commissioner, 
                   Federal Communications Commission
    Chairman Thune, Ranking Member Nelson and members of the Committee, 
good morning.
    What a privilege it is for me to appear before you today. I have 
had the distinct honor, thanks in large part to this committee, of 
serving as an FCC Commissioner for nearly seven years and, prior to 
that, as a South Carolina state commissioner for 11 years. During these 
last 18 years, I have been committed to ensuring that there is a 
regulatory backstop in place to bridge divides in situations where the 
market either is not functioning properly or forecloses opportunities.
    This morning, I would like to center my testimony on two 
Congressional directives relating to universal access and diversity.
    Universal access. I took seriously my commitment to Chairman Thune 
to modernize the universal service support program for rate of return 
carriers and stop penalizing carriers whose customers migrate to 
broadband-only lines. This collaborative process, of which you should 
be proud, has resulted in reforms that I believe are a win-win for 
rural consumers and those who contribute to the Universal Service Fund. 
We have laid out a framework that modernizes the program in a manner 
that is simple, rewards efficiency, and sets forth a framework to 
ensure that we connect unserved households, and disaggregate support in 
areas served by an unsubsidized competitor. Support will be directed 
and targeted to areas that today lack access.
    Did this come without difficulty? No, it did not. Real change is 
rarely ever easy, but this modernization was necessary for us to 
promote rather than discourage broadband deployment in communities that 
need it the most. And, consistent with our 2011 reforms, there are no 
flash cuts but a gradual transition so providers have time to adjust to 
these changes.
    I was pleased with the outcome and sincerely believe that this 
coordinated effort with both Commissioner O'Rielly and Chairman Wheeler 
satisfies our commitment to this Committee and adopts a sustainable 
framework to achieve our long-term universal service goals.
    Updating our rate of return system adds to the list of universal 
service reforms that I am proud to say that I have supported since 
arriving at the FCC, including the 2011 reforms to universal service 
for price cap carriers, updating our E-rate program to close broadband 
connectivity gaps within our schools and libraries, and ensuring that 
rural health care providers have access to the telecommunications and 
broadband services their communities need and deserve. Collectively 
these reforms will help ensure that broadband access is a reality for 
all parts of our Nation.
    But as laudable as these universal service reforms are, the FCC 
still has work to do when it comes to addressing the lack of broadband 
access on Tribal Lands and gaps that remain in mobile broadband 
coverage throughout this Nation. Millions of Americans are stuck in the 
digital darkness and lack the technological infrastructure needed to 
improve their lives, particularly when it comes to healthcare. I have 
visited communities and witnessed firsthand the transformative power of 
telemedicine, but such life-changing technologies like the ones I 
witnessed in Ruleville, Mississippi, are only possible if broadband 
service is both available and affordable. In areas where the private 
sector has not invested because the business case cannot be made, the 
FCC needs to do all in its power to step up and close these gaps.
    Finally, it cannot be said that our job is done when it comes to 
Universal Service reform if we fail to modernize, or dare I say, 
completely overhaul the Federal Lifeline Program. The FCC allocates 
over $8 billion annually for deployment of advanced services but we 
lack any mechanism to ensure that once deployed, service is affordable. 
We cannot lose sight of the fact that Section 254 of the Act places the 
same weight on the needs of low income consumers as it does for those 
living in rural areas when it comes to access to advanced services and 
the FCC should never turn its back on that directive. We must abandon 
the too common pastime of simply criticizing the existing program and 
work collectively to find common sense solutions to truly fix whatever 
is deficient in Lifeline so that low income Americans may once and for 
all have access to those life-changing opportunities that broadband has 
unleashed for the rest of us.
    I look forward to working with the Chairman, my colleagues and 
members of this Committee to close the gaps on Tribal Lands, adopt a 
permanent mobility fund, and modernize the Lifeline for the 21st 
Century.
    Diversity. Section 257 of the Communications Act tasks the 
Commission with two important goals, to: (1) identify and eliminate 
market entry barriers for small businesses, and (2) promote the 
purposes of ``favoring diversity of media voices, vigorous economic 
competition, technological advancement, and promotion of the public 
interest, convenience, and necessity.'' Since 2010, I have been calling 
on the Commission to establish innovative and legally sustainable 
approaches for greater participation by new entrants and small 
businesses in all aspects of the communications industry. I am pleased 
to report that last summer, we reformed our Part 1 Competitive Bidding 
rules so that small businesses have increased flexibility needed to 
secure financing and develop business models to effectively compete in 
an increasingly consolidated wireless market. The upcoming incentive 
auction will offer applicants a unique opportunity to acquire 
substantial amounts of valuable wireless spectrum below 1 GHz. By 
adopting these reforms before that historic auction, we are enabling 
the deployment of mobile broadband networks in a manner that promotes 
competition and encourages new entrants to join the wireless service 
industry.
    Fostering diversity is an important aspect of the Commission's 
work. While we often speak about this issue in the context of the 
quadrennial media ownership review, and rightly so, diversity is also a 
concern in the multichannel video programming distribution marketplace. 
In my years at the Commission, I have met with and spoken to dozens of 
independent programmers who share a common refrain: each says that they 
are facing insurmountable challenges when it comes to acquiring 
carriage; that it is difficult to receive fair or reasonable contract 
terms; and growth in their online distribution model is inhibited, 
because program distribution access is often restricted via contract. 
And for every independent programmer that can reach an agreement with 
an MVPD, there are countless others that cannot get a simple phone call 
returned.
    During last year's AT&T/Direct TV merger, a number of these issues 
were raised yet again by many parties, including independent and 
network-affiliated programmers as well as small cable operators, who 
repeatedly requested relief. While we concluded that it was best not to 
deliberate these issues during merger considerations, the level of 
concern, I felt, merited a separate proceeding where we could explore 
and gain a better understanding of the video programming marketplace 
and whether certain practices by operators, as claimed, are limiting 
the ability to reach viewers. That is why I am pleased that my fellow 
Commissioners joined me in voting for the Independent Programming 
Notice of Inquiry, which was adopted during the February meeting. 
Discussions about what role, if any, the Commission should play in 
addressing obstacles that may be preventing greater access by consumers 
to independent and diverse programming will be launched, triggering a 
fact-finding exercise that will start a conversation on how best to 
promote the availability of diverse and independent sources of video 
programming. While I am not sure where this conversation will take us, 
I am sure that it is time that we have it.
    I am grateful for the opportunity to speak with you today and look 
forward to answering any questions you may have on how the FCC can 
continue to promote greater access to communications technologies and 
services for all Americans. Thank you.

    The Chairman. Thank you, Commissioner Clyburn.
    Thank all of you for being here again and for sharing your 
thoughts with us about the priorities of the Commission and the 
things that we should be focused on here in the Congress as 
well.
    Chairman Wheeler, next January, there's going to be a new 
President of the United States. Your term doesn't technically 
expire until January 1, 2018. FCC Chairmen have traditionally 
resigned from the FCC when a new President is inaugurated, and 
that enables the newly elected President to nominate a Chairman 
to lead the FCC who is from the same party as the new 
President.
    So my question--you can probably figure out where I'm going 
with this--is do you intend to respect that tradition and 
resign from the FCC when the new President takes office unless 
explicitly asked to stay on?
    Chairman Wheeler. Thank you, Mr. Chairman. This is a ways 
off. I understand precedent. I understand expectations. I also 
understand that 10 or 11 months is a long time. So it's 
probably not the wisest thing in the world to do to make some 
kind of ironclad commitment. But I understand the point you're 
making.
    The Chairman. And you understand the tradition that 
historically is what's observed with regard to that.
    Chairman Wheeler. I understand it.
    The Chairman. Chairman Wheeler, it's my understanding that 
Commission rules prohibit the disclosure of nonpublic 
information to any person outside the Commission except as 
authorized in writing by the Chairman. These rules limit the 
ability of Commissioners and the FCC employees to discuss 
certain nonpublic matters with outside stakeholders, making the 
Chairman's waiver authority a potentially valuable tool when 
dealing with outside interests.
    Chairman Wheeler, yes or no, will you provide to the 
Committee any written exceptions that you've signed while 
serving as Chairman of the Commission?
    Chairman Wheeler. Yes, sir.
    The Chairman. Thank you.
    Commissioner O'Rielly, you have recently written about your 
concern that, and I quote, ``The application of this rule in 
the current Commission serves as a roadblock to effective 
public participation and ultimately damages the FCC's 
credibility as an agency.'' Would you like to expand or share 
your concerns?
    Commissioner O'Rielly. Yes. I'll make two points. One is I 
think that it inhibits my ability to talk to outside parties 
who come in to see me. They will suggest certain ideas, ways to 
change things, and I can't correct them in terms of anything 
that they may be mistaken about. They may have some 
information. They may be missing other parts. So it's hard to 
have a full dialog on how to make a best idea and how to--and I 
can, at the same time, test out ideas that I have before these 
parties. So it inhibits my ability.
    Two is I think that the rule as being applied is 
discriminatory, because the rest of my colleagues don't have 
the advantages that the Chairman has and that they have used at 
the time at the Commission. There are a number of things that 
have happened that--disclosure of nonpublic information that 
we're not able to take advantage of. So I think fair 
application of the rule would make more sense.
    The Chairman. I'll direct this to all of the Commissioners. 
It deals with Section 629--which I referenced in my opening 
remarks--of the Communications Act which provides the FCC with 
authority regarding paid TV set-top boxes. The section is 
clearly aimed at actual physical equipment, which is obvious 
when one considers the legislative history, the plain language 
of the statute, and the consumer experience as it was 20 years 
ago when the provision was added to the law.
    So the question is if a paid TV service is offered in a 
manner that requires no set-top box, in other words, no 
physical equipment or devices needed to access the programming, 
does Section 629 remain either necessary for or applicable to 
that paid TV service?
    Mr. Chairman, do you want to lead off?
    Chairman Wheeler. Gee, Mr. Chairman, everything in the 
world is going software. You know, the networks themselves used 
to be run by hardware and are now run by software. That doesn't 
mean that we don't have jurisdiction over those kinds of 
activities. I think the statute talks about equipment, device 
and devices, and in a software world, you cannot consider the 
kind of functionality that the statute talks about and not 
consider software.
    The Chairman. Commissioner Rosenworcel?
    Commissioner Rosenworcel. The Chairman's point is 
fundamentally correct that so many functions that took place 
over hardware are now taking place over software. I think what 
is also fundamental is that Congress wanted to make sure that 
this market was competitive, and whether we're dealing with 
hardware or software, I think we want to find a way to make 
that happen.
    Commissioner Pai. Mr. Chairman, I think this question 
raises the basic approach that Commissioner O'Rielly raised 
concerns about, which is that the agency is taking statutes 
that were written, in this case, almost a quarter century ago 
and expanding them dramatically to assert jurisdiction over an 
entirely new marketplace.
    In my view, as a policy matter, instead of doubling down on 
1990s era technology--I mean, very few consumers I know are 
enthusiastic about their set-top boxes--we should encourage 
efforts to migrate to an apps-based economy, where instead of 
spending a couple of hundred dollars on a box and $15 a month, 
you could spend zero to $5 on an app which would allow any 
navigational device, from a tablet to a smart phone, to effect 
the same functions.
    The Chairman. Commissioner O'Rielly?
    Commissioner O'Rielly. Short answer, no, and I'm happy to 
expand upon that. I agree with my colleague's point in terms of 
the elimination of boxes going forward.
    Commissioner Clyburn. I agree that the current construct 
may on its surface seem limiting. But what we have the capacity 
to do, and I trust that we will continue to have the 
flexibility to do, is look through and recognize that though 
the words may be different, the application and the 
functionality, I believe we should look through current lenses 
and apply and interpret the framework which has either worked 
well or needs room for improvement in order to really 
interpret, again, through today's lens how we approach the 
directive that you have given us to ensure a competitive 
marketplace when it comes to what we now refer to as a set-top 
box.
    The Chairman. I have just one quick ``yes or no'' question 
for all five commissioners, and then I'll ask in a later round 
to follow up. Do you agree that a consistent legislative 
reauthorization process would produce a more responsible and 
productive relationship between the FCC and the Congress?
    Chairman Wheeler. It is your right to write the rules, sir.
    The Chairman. I assume that's a yes.
    Commissioner Rosenworcel. Yes.
    Commissioner Pai. Yes.
    Commissioner O'Rielly. Yes, I defer to Congress on that.
    Commissioner Clyburn. I also defer to Congress.
    The Chairman. All right. Well, if there's a specific 
provision that you suggest that the Committee include in an FCC 
reauthorization bill, I hope that you'll feel free to follow up 
after the hearing with any suggestions that you might have 
about that because it's something that I think would be very 
useful in terms of making the relationship between the Congress 
and the FCC more productive, probably more trusted, and more 
understood, for sure.
    Senator Nelson?
    Senator Nelson. Set-top box. We don't want to threaten the 
vibrant market for quality video programming. So, Mr. Chairman, 
how do you respond to the concerns that I raised about the 
impact your proposal could have on existing copyright and 
contract provisions for video content? Does the FCC--does your 
proposal impact third parties, whether they'll be able to alter 
or add to video programming or advertising contained in such 
programming?
    Chairman Wheeler. Thank you, Senator Nelson. I think there 
are probably several responses to that. One, that which the 
cable operator puts out should remain sacrosanct and untouched, 
and nothing in our proposal creates an opportunity for that to 
happen, because copyright law remains in place, because the 
language that we used actually was lifted from the cable card 
language now being used by cable companies in their cable card 
and has proved sufficient to protect against that.
    And, third, is we actually asked in paragraph 80, I think, 
in the notice, ``But if you think that's not good enough, tell 
us what would make it good enough, because it's not our goal to 
cause harm.''
    Senator Nelson. OK. Let's go to spoofing. Chairman, now, I 
laid out what's happening. I mean, citizens are really getting 
taken, and they're losing thousands of dollars. And the sad 
cases are someone's life savings because, particularly, a 
vulnerable senior citizen has been fooled by the number that's 
calling. Mr. Chairman, many of the provisions in our bill that 
we recommended to Congress in the FCC in 2011--I know you're 
going to agree that it's important for Congress to give you the 
tools necessary to combat the sophisticated spoofing scams.
    Commissioner Rosenworcel, I appreciate your attention to 
phone scams. What has the FCC learned from its inquires into 
the phone scams? Do you agree that more needs to be done to 
inform consumers about their options for avoiding or stopping 
these scams?
    Commissioner Rosenworcel. Yes, Senator. Thank you for the 
question. We've got bad actors, scammers, and fraudsters right 
now who spoof telephone numbers to defraud consumers and try to 
wrongfully obtain something of value from them. We've got to 
put a stop to it. I know you were responsible for the Truth in 
Caller ID Act about 5 years ago, and that has been a helpful 
source of authority for the FCC.
    But what we found in the intervening years is that fraud 
has moved offshore. It's now coming from international 
locations. It has also migrated to texting. So what I 
appreciate about your new legislation is that you're giving us 
the jurisdiction to resolve those problems and try to get these 
bad actors out of the business of spoofing once and for all.
    Senator Nelson. Senators Klobuchar and Blunt have joined 
Senator Fischer and me on that legislation.
    Chairman Wheeler. Senator, can I just pile on for one 
second?
    Senator Nelson. Please.
    Chairman Wheeler. I may be the only member on this panel 
who has actually been victimized by this. I came home a couple 
of weeks ago, and my wife says to me, ``The IRS is calling and 
saying we owe them money.'' This was news to me, and----
    Senator Nelson. You didn't fall for it, did you?
    Chairman Wheeler. So I said, ``Boy, they called the wrong 
number, because I'm the Chairman of the FCC.''
    [Laughter.]
    Chairman Wheeler. And so we got the information, and I took 
it to our enforcement bureau, and they started drilling down, 
and guess what? This was a U.S. number, but it was coming from 
abroad, and we couldn't get to it. So, believe me, we 
understand and are with you on this.
    Senator Nelson. By the way, the Do Not Call List--it 
doesn't work.
    [Laughter.]
    Senator Nelson. I mean, it's gotten so bad, I don't want a 
landline. And now I'm getting the calls I don't want on a cell 
phone. I hope you all will look at that.
    All right. Well, I've run out of time. I'll do a second 
round.
    The Chairman. Are you tired of hearing from those 
Presidential campaigns in Florida?
    [Laughter.]
    Senator Nelson. As a matter of fact, that's right. And I 
was wondering when you were asking the Chairman a few minutes 
ago about what he intends to do in the future--you mean, you 
don't think that President Trump would re-nominate him?
    [Laughter.]
    The Chairman. Well, I guess he won't be running Democrats 
for Trump in Florida, I assume.
    Senator Wicker?

              STATEMENT OF HON. ROGER F. WICKER, 
                 U.S. SENATOR FROM MISSISSIPPI

    Senator Wicker. Commissioner O'Rielly, you gave the 
shortest answer concerning Section 629, so I'm going to ask you 
to expand, because we have the benefit here of someone who has 
been on both sides of this dais on this issue. You were a 
staffer here during the consideration of the 1996 
Telecommunications Act, so can you tell us what you believe 
Congress intended when it drafted the language 20 years ago. Do 
you believe the FCC's proposal aligns with Congressional 
intent?
    Commissioner O'Rielly. Thank you, Senator. There are a few 
of us in a number of different roles that are still involved 
from the 1996 Act. Having worked for then Chairman Tom Bliley, 
who was the author of this provision, I can tell you that I had 
an opportunity--I was in every meeting that we had on the 
Telecomm Act relating to his work, and this was one of his 
priorities.
    His intention of that provision was to make the 
availability of set-top boxes or navigation devices in retail 
establishments. And on behalf of a particular retailer at the 
time that no longer exists, Circuit City--you may have heard of 
it. It's the previous Best Buy of the world. It no longer 
exists. And the issue has somewhat moved on in the time.
    So my argument is--and I made this point when this issue 
was adopted--is that the provision itself is looking at a 
previous time when set-top boxes were on the hardware side of 
the equation. We didn't contemplate at the time that it was 
going to be, you know, an application world in 1994 and 1995.
    You also have to keep in mind the context, and I made this 
point in my statement. You have to look at the context of the 
deal that was struck. We had to work with then Speaker 
Gingrich, who was representing on behalf of his constituent, 
Scientific Atlanta from Georgia. We also had to work with 
Senator Coverdale, who also represented Scientific Atlanta, in 
terms of the scope of what we were able to achieve in that 
provision.
    I don't believe, when you look at the text of the language, 
when it talks about boxes, interactive communications equipment 
and other equipment, that it gets to the application side, that 
it gets to an application-only world that Senator Thune talked 
about in his question. I think it is over-broad and penalizing 
going forward.
    Senator Wicker. Now, Commissioner Pai seems to suggest that 
a $5 or $10 app would suffice and make this proposed rule 
change irrelevant. Do you agree with him?
    Commissioner O'Rielly. I do. I'm not even sure it's in a $5 
or $10--I have 20 video apps on my phone that exist today, and 
I can get them directly from the programmer, and I can get them 
directly from my cable provider. So those apps are free, and I 
watch programming on my phone, on my tablet, and I can watch it 
on my TV through those applications without having to have a 
set-top box.
    Senator Wicker. So in terms of helping the consumer, it 
just seems to me there is a question of who is being helped by 
this rule.
    Commissioner Pai, Senator Nelson seems to make a pretty 
good point about his concerns. Chairman Wheeler says you've got 
nothing to worry about. So what do you say to that? Help us 
out.
    Commissioner Pai. Senator, thank you for the question. I 
think while everybody agrees that this programming stream 
should remain sacrosanct, to borrow the Chairman's phrasing, 
unfortunately, nothing in the document actually protects it.
    So we asked repeatedly, for example, of interested parties 
before our vote: Would the programming stream remain intact? 
Would a third-party set-top box manufacturer, for instance, be 
able to extract ads that were in the programming stream and 
insert their own, and/or insert their own ads layered on top of 
it? We were told, ``Well, no. We're going to rely on market 
forces to govern that.''
    But I think, as Ranking Member Nelson adequately pointed 
out, the copyright and all these other intellectual property 
issues involve very delicate contractual and other arrangements 
that are going to be disrupted. And I think that's part of the 
reason why we heard from an incredible panoply of programmers, 
especially minority programmers, who told us, ``We don't want 
this kind of disruption, because it's ultimately going to 
decrease the amount of compensation and protection we have for 
our intellectual property.''
    Senator Wicker. Thank you, sir.
    Commissioner Clyburn, thank you for your interest in rural 
America. On this panel, we have Senators from states with 
significant rural populations--Mississippi, South Dakota, 
Missouri, Nebraska, Kansas, Nevada, Colorado, and on and on. 
Thank you for coming to Sunflower County, Mississippi.
    Commissioner Clyburn. Absolutely.
    Senator Wicker. And you're going to be back in Mississippi 
soon?
    Commissioner Clyburn. Yes, sir.
    Senator Wicker. I hope we can visit at that time. You and I 
discussed this earlier, but I think you'll acknowledge the 
incredible benefit to public health and education in ensuring 
that we continue to connect wirless-only households through the 
Mobility Fund. It seems to me the FCC must do no harm to 
existing coverage in rural states when considering future 
changes in the USF support for wireless. What do you say to 
that?
    Commissioner Clyburn. So from a number of degrees, I agree 
with you. I have been speaking for a number of years about the 
FCC establishing a permanent Mobility Fund. You and I both know 
when we travel down from Jackson to Ruleville--which I did take 
that drive--that there are spots along the road where we have 
absolutely no coverage. We feel extremely vulnerable. The 
citizens that live off the side of those roads are extremely 
vulnerable, particularly those who are wireless-only consumers. 
They deserve connectivity.
    So I look forward to continuing to work with you to see 
that we have the resources in place to target Universal Service 
funding to those areas where it is absent, to reform the 
Universal Service program, the Lifeline program, to ensure that 
those who do not have connectivity--there are 5 million people 
in this Nation without any phone service. We need to address 
them, particularly.
    So I look forward to continuing to work with you, coming 
back to Jackson and outside of the area. I'm spending more time 
in Mississippi than in South Carolina, incidentally, another 
rural state. And I'm, again, looking forward to working with 
you to truly connect, particularly, those unhealthy doughnut 
holes where there is no connectivity whatsoever.
    Senator Wicker. Thank you, ma'am.
    The Chairman. Thank you, Senator Wicker.
    Senator Schatz?

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

    Senator Schatz. Thank you, Mr. Chairman. I want to thank 
the Commissioners for their dedication and their expertise. We 
don't always agree on every particular action you're taking, 
but I think we all agree on the objectives of the FCC, and I 
think one area where we've been able to achieve some pretty 
good bipartisan agreement is in spectrum policy.
    Senator Moran and I have been working together with the 
Chairman and the Ranking Member on an amendment to Chairman 
Thune and Ranking Member Nelson's MOBILE NOW bill to make sure 
that more unlicensed spectrum is available in the future. I 
think we need a clear plan to support continued innovation in 
the unlicensed band, because it has become an affordable way 
for people from all walks of life to get online and a way for 
carriers to offload traffic.
    Our experience with Wi-Fi is the best example of the 
opportunity ahead, and I believe if we want to continue to 
empower consumers and provide entrepreneurs the space to 
innovate, we've got to focus on Wi-Fi.
    Commissioner Rosenworcel, thank you for your leadership, 
not just on 5G, but on the Wi-Fi dividend. What I'd like you to 
do is just flesh out why you think this is so important and 
what you think the unique policy challenges are in the context 
of the Communications Act and also the FCC's authorities.
    Commissioner Rosenworcel. Well, thank you, Senator Schatz, 
and thank you for your work on behalf of unlicensed spectrum 
policy, because good spectrum policy requires both licensed and 
unlicensed spectrum. There's no better evidence of that than 
taking a look at Wi-Fi. It has democratized Internet access. It 
has created a space for permissionless innovation, which is 
vital for the Internet of things, and it's also how so many of 
our carriers manage their licensed networks, because they 
offload their traffic onto that. On top of that, it's an 
economic boon--$140 billion of activity every year.
    But, traditionally, unlicensed spectrum has kind of been an 
afterthought. It was reserved for scraps of spectrum we didn't 
know what to do with. And the truth is we actually need an 
unlicensed plan that involves low-band, mid-band, and high-band 
spectrum. It shouldn't be an afterthought. It should be front 
and center in our spectrum policy.
    Senator Schatz. Can you talk about the mechanics of why 
it's so difficult to have a plan? I mean, I think it's 
important for the public to understand that the financial 
incentives are just not there when you're talking about the 
auctions, because this is really a commons.
    Commissioner Rosenworcel. You're absolutely right, because 
everybody here knows the Congressional Budget Office combs 
through legislation, and on spectrum policy, it always delivers 
high marks when we sell spectrum at auction. But it delivers 
low marks if we reserve it for unlicensed or Wi-Fi activity, 
which is a shame because of the broader economic benefit of 
having unlicensed around. So I think that accounting is dated. 
It misses the mark, and it shortchanges our wireless future.
    Senator Schatz. Thank you, Commissioner.
    Chairman Wheeler, I wanted to talk to you about the zero 
rating programs. I know that you specifically sort of held 
harmless those programs in the Open Internet Order. But I'm 
personally struggling with my view on this, and I think some of 
the members of the Committee are likewise. There are obviously 
great opportunities for consumers, to provide additional access 
to the Internet.
    On the other hand, it's not at all clear to me that some of 
the programs are all that different from that which is 
prohibited in the Open Internet Order. So I'd like you to kind 
of flesh out first of all what your overarching thinking is 
regarding this and then how the Commission goes ahead and 
evaluates the plans that are being provided by individual 
companies.
    Chairman Wheeler. Thank you, Senator. I would just take 
one--I'm not sure that we held harmless in the Open Internet 
Order. What we did in the Open Internet Order was to 
specifically say that this is something that should not be 
decided here in the Open Internet Order, because, as you point 
out, can you make the case that it is helpful, because in some 
cases it increases choice and lowers cost? Yes. Can you make 
the case that in some instances it is harmful because it is 
used as a tool against competition and a tool to operate 
against other folks? Yes.
    So the question becomes: How do you make those kind of 
judgments? And that's the power of the regulatory agility that 
is in the Open Internet Order. So what we have been doing is 
collecting information and going through a process right now in 
which we are developing the data points necessary to reach the 
kind of conclusions that you're specifically talking about 
here. The staff is far down the path on this. As you indicate, 
this is not a light lift, but this is something that we are 
undertaking.
    Senator Schatz. Well, I'll finish with this, with the 
indulgence of the Chairman. This is, I think, squarely the 
jurisdiction of the expert agency. But I think the policy 
makers have to think through the balancing act going forward, 
because I think zero rating programs are going to be coming 
fast and furious, and some of them are going to be right on 
that edge of at least violating the spirit of the Open Internet 
Order, and some of them are going to be great and easy to 
approve. But, you know, there are going to be some policy 
questions that percolate up to the Committee. Thank you.
    The Chairman. Thank you, Senator Schatz.
    I have Senator Blunt, who has left us. So Senator Markey, 
followed by Senator Ayotte.

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

    Senator Markey. Thank you, Mr. Chairman, very much. Going 
back to the set-top box, I'm very familiar with this provision. 
Chairman Bliley and I are the co-authors of that provision in 
1996. By the way, I'm also the author of the Do Not Call List, 
and it's just----
    [Laughter.]
    Senator Markey. It's just as relevant today as it was a 
quarter of a century ago, and we do want that, obviously, to be 
updated and enforced as diligently as possible.
    I, obviously, had many, many, many conversations with Tom 
Bliley on what our legislative intent was, and I know what we 
wanted to do. We wanted to just break down this monopoly that 
existed that forced consumers to purchase--not purchase, 
actually--to rent a set-top box from the company.
    The reason that we were both concerned with it was that we 
had just finished the process of preventing consumers--to 
purchase phones. For 75 years, Americans had been forced to 
rent a phone, a black rotary dial phone, from the phone 
company.
    It's a good business model, $3 a month, 12 months a year, 
for 50 years. That's what our mothers and fathers had to do. 
It's a good business model if you can make someone rent 
something and pay you $1,800 to rent this, at that time, hunk 
of junk. Companies were ready to move on and innovate--new 
companies. So we had to break it down so that you didn't have 
to rent anymore.
    So along comes the cable industry and adopts the same 
model, that the consumer is forced to rent a set-top box. They 
can't go out and get a different box from an innovative 
company. That's what Tom Bliley and I wanted to see 
accomplished.
    And where are we 20 years later? Here's where we are. 
Ninety-nine percent of all Americans are still renting a set-
top box. That's not innovation--99 percent. What's the average 
per family? Two hundred and thirty-two dollars per year to the 
cable companies, to the satellite companies, to rent the box.
    So we haven't seen any innovation. We haven't seen any 
breakthroughs. We're still waiting for the revolution where you 
can go down to the store or download the app that allows you to 
have a new way of accessing this information in the modern era. 
That's what it was all about.
    So for the purposes of this discussion, net neutrality is 
to content what this set-top box rulemaking is to ensuring that 
the devices, the access points, allow for the consumer to 
control, the consumer to decide. So that's pretty much what 
this whole debate is about.
    So, Mr. Chairman, how closely can we analogize this 
revolution to the black rotary dial phone revolution in terms 
of our need to open up innovation so that the consumer has more 
choices?
    Chairman Wheeler. Well, thank you, Senator. I think the 
analogy is spot-on, and here's the fascinating thing about it. 
You know, the cable industry was for it before they were 
against it. They filed with us in 2010, saying that they wanted 
exactly the kind of things that we're talking about here now. 
Today, however, everybody is inventing all these imaginary 
horribles.
    I mean, the most interesting thing to me--and I pointed it 
out to Senator Nelson. We stole the language from the cable 
card license agreement because that's been working, and we put 
it in the item. But it is now announced to us that that 
language, which has been working for the last several decades, 
is now a complete and total failure. And one can only scratch 
their head and say, ``Gee, there must be a bigger agenda being 
played here than the facts.''
    Senator Markey. And can I just say we're still in the set-
top box era. Comcast, just one company, a great company, by the 
way--but Comcast is installing 40,000 set-top boxes a day in 
America--a day. So we're in the set-top box era.
    There's a 99 percent control by these companies, and to 
pretend otherwise is just to ignore the real life experience of 
every single American who has that clicker with that set-top 
box in front of them, and they would like another choice if we 
can provide it for them. They might stick with the incumbent, 
but I'll tell you one thing. The incumbent is going to start to 
innovate real fast with regard to what that box can do, because 
there's nothing like Darwinian, paranoia-inducing competition 
to spur innovation that makes consumers feel good and lowers 
the price that they have to pay to rent the box if that's what 
they want to continue to do.
    So thank you all so much for your great work.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Markey.
    Senator Ayotte?

                STATEMENT OF HON. KELLY AYOTTE, 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Ayotte. Thank you, Chairman. I want to thank all 
the Commissioners for being here.
    I wanted to ask Commissioner Rosenworcel--this is an issue 
that I've raised repeatedly before the Commission when you've 
come before this Senate committee, and that is the Universal 
Service Fund issue. I appreciate some of the reforms that 
you've made on the distribution side, and, obviously, there are 
additional issues that have been raised here today with the 
Chairman that I hope are also addressed on the distribution 
side.
    I also continue to remain concerned on the contribution 
side. I urge you all to take a nice trip through New Hampshire 
and have the same experience in many rural parts of New 
Hampshire where there is no telecommunications coverage. But 
we're 50th in terms of support under the Universal Service 
Fund, out of 56 states and territories. We are a net donor, 
where my constituents are paying over $37 million in a year, 
and they're getting back approximately $15 million in return. 
It's a very bad deal for my constituents, given that we have 
real needs in my state where it would help the economic 
development and wellbeing of my constituents.
    I know that as the Chair of the Federal-State Joint Board, 
Commissioner, you have said you're going to wait on what you 
might do on contribution reform based on what the court does on 
the Open Internet Order. And I'm trying to understand why we 
have to wait, because recently, the Congress permanently 
enacted the Internet Tax Freedom Act, which would say very 
clearly where policymakers are on both sides of the aisle on 
this issue. We should ensure that you aren't taxed when you 
have access to the Internet, because we want to make sure 
everyone has access, and that's obviously the goal of the 
Universal Fund itself.
    So I would ask you, Commissioner: Why do we have to wait 
for the Open Internet Order to make reforms to the contribution 
side, especially when Congress has so clearly spoken, most 
recently with a permanent extension of the Internet Tax Freedom 
Act? My constituents are really tired of waiting for 
contribution reform, and they're putting a lot of money into 
this, and we're not getting the value back from the fund.
    Commissioner Rosenworcel. Thank you, Senator, and you're 
right. We have talked about this extensively. I want to start 
by saying I am a New Englander. That's where I grew up. So I 
know exactly what you speak of in terms of the inability to get 
service in parts of New Hampshire and northern New Hampshire, 
in particular.
    Senator Ayotte. That's right.
    Commissioner Rosenworcel. So that's familiar to me. To the 
extent that you're saying that we are not acting, I just want 
you to know that we're actually working. We're working 
extensively behind the scenes.
    Just two weeks ago, I met in Washington with my state 
colleagues who are on the joint board who are from all across 
the country, Florida, Washington state, Michigan, and state 
staff who are from other locations, and we talked extensively 
about new models for moving forward, because our existing 
Universal Service system, which supports communications in so 
much of rural America, is right now dependent on an assessment 
on old fashioned long distance service, which we all know does 
not represent the future of communications. And if we want to 
make sure that we get high-speed broadband everywhere, 
including places in New Hampshire, we know we're going to have 
to update the way that we collect that, and we are working 
behind the scenes now, combing over models and trying to 
understand the impact on consumers and businesses if changes 
are made.
    Senator Ayotte. So the thing that I would like to 
understand--and I'd also like Commissioner Pai to jump in, 
because I know he has expressed some opinions on this as well. 
Why does the Open Internet Order jeopardize the potential to do 
contribution reform? What risks are there with this Open 
Internet Order that, in fact, it could end up with a Universal 
Service tax on Internet services? Presumably, this would be 
contradictory to the policy that is very strongly bipartisan as 
reflected in ITFA that we don't want to tax access to the 
Internet.
    So if you could both comment on that, I'd appreciate it.
    Commissioner Rosenworcel. So I want to be clear. I agree 
with that policy. We're not looking to change it. We're just 
looking to modernize the system. To the extent that we're 
talking about why this court case matters, it's just 
fundamentally statutory. Under Section 254(d) of the 
Communications Act, the collection obligation is on 
telecommunications services, and so we need to make sure that 
that definition is a stable one so that we assess ways to move 
forward.
    We're looking at a variety of ways, numbers-based 
contributions, expanding the contribution base with traditional 
telephony. We're looking at a connections-based system. In 
other words, we're looking at models with our state colleagues 
from all across the country right now with the goal of making 
sure that rural communication stays strong.
    Senator Ayotte. I would like to have Commissioner Pai, with 
the Chairman's latitude, also comment on this issue.
    Commissioner Pai. Thank you, Senator. I'll try to be brief. 
I have concerns both in terms of timing and in substance. In 
terms of timing, when the FCC adopted the Open Internet Order 
on February 26, 2015, the joint board was slated to give us a 
recommendation on contributions reform in April 2015.
    If you look buried in footnote 1471 of the 317-page Order, 
we say we anticipate a short extension of the Joint Board's 
deadline would be appropriate. We are now almost a year after--
over a year after the Open Internet Order. We still have no 
recommendation.
    Now, I think that it's pretty clear that a broadband 
Internet access tax would be pretty unpopular, especially in 
light of the bipartisan chorus, as you pointed out, that state 
and local governments should not be able to tax the same. And I 
think it's remarkable that in light of the fact that the FCC 
has declined to refrain from imposing these regulations on all 
these other areas, all these other Title II regulations, that 
this one, a politically salient one, is being put off for a 
later time.
    I think that it's also telling that the agency is already 
spending money in anticipation of getting a greater amount of 
revenue from the Universal Service Fund. For example, we 
boosted the e-rate budget by $1.5 billion a year last year. By 
all accounts, next month, we are going to expand the Lifeline 
program to broadband without any meaningful budget or cap. So 
that money is already being spent, and it has to come from 
somewhere.
    I would respectfully submit to you that, ultimately, it is 
going to be in the form of a broadband tax. Every one of your 
constituents is going to have to pay more for Internet access 
to fund the FCC's spending obligation that's already made 
through the Universal Service Fund. So both in terms of timing 
and substance, I believe that we should be straightforward with 
the American people and decline this opportunity to impose a 
broadband tax.
    Senator Ayotte. Well, I hope we would. My constituents are 
not going to want to pay that tax, and I don't think there's 
support for that tax. So I hope that we would clearly take that 
off the table.
    The Chairman. Thank you, Senator Ayotte.
    I have Senator Booker followed by Senator Fischer followed 
by Senator Moran.

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

    Senator Booker. Commissioner Wheeler, would you just 
respond to that, the expenses and the tax issue, because I 
think it's important to hear your thoughts.
    Chairman Wheeler. The challenge that Commissioner 
Rosenworcel and her team are facing is that there is a 
diminishing amount of services money on which a fixed amount of 
overhead is being charged. That means that it has to 
continually go up.
    Now, sometimes we sit around and our colleagues complain, 
``Oh, my goodness. The Universal Service Fund has gone up. Look 
at the percent that it is today.'' Well, the math says it has 
to, and if it doesn't, you won't be able to fund build-out in 
rural areas. You won't be able to fund schools and making sure 
they're connected. You won't be able to make sure that 
everybody has access.
    This is a pressing problem. This is a complex problem, and 
the thing that was really interesting about Commissioner 
Rosenworcel's response--I'm sitting here and I'm saying, ``Boy, 
is the right person on point on this,'' because she talked 
about multiple solutions, not just the one that you keep 
hearing about.
    Senator Booker. So if I can--I really want to talk about 
innovation and leading the globe in innovation--very, very 
grateful for Senator Ayotte, Senator Fischer, and Senator 
Schatz in leading, really, some of the innovation work that 
we're doing about the Internet of things. I'm really very 
excited about the fact that we are now looking at making sure 
we're focused on unlicensed. In fact, I definitely wanted to 
follow up--which I don't think I'm going to have time--about 
the progress of testing the 5 Gigahertz section.
    But just while we're there, I just really want to, then, 
just jump into the issue of Lifeline, because it's something 
that I think is extraordinarily important. And I'd like to be 
able to submit for the record, without objection from the 
Chairman when he comes back, a letter that was signed by a 
group of broadband providers, public interest groups, really 
public-private groups, talking about the urgencies of the 
digital divide in our country. It's amazing to see--it's signed 
by everybody from Comcast and AT&T to the National Hispanic 
Media Coalition. It's pretty extraordinary.
    So just to stick with this for a second, because when it 
comes to the Lifeline program, I just want to know if we are 
getting a good return on our investment. What are the economic 
and social justifications for modernizing this program, really, 
and the urgency to cover broadband?
    So, Commissioner Rosenworcel, would you comment on that for 
me?
    Commissioner Rosenworcel. Absolutely. Listen, today, it is 
absolutely necessary to have access to broadband to have a fair 
shot of prosperity in the digital age, and we have too many 
households that do not have access. That's important for 
emergency services, for healthcare, for getting and keeping a 
job, and what's especially important to me is that it's really 
critical for homework.
    We have 5 million households in this country with school 
age kids who can't do their homework because they don't have 
broadband access. That's a homework gap that we can help use 
the Lifeline program to bridge, and I think we should be doing 
it without any delay.
    Senator Booker. And, Commissioner Clyburn, would you like 
to add to that?
    Commissioner Clyburn. This is a 30-year-old program that in 
the beginning really worked hard and was successful in 
connecting those last few million people who could not afford 
access to a voice-only product. We do not live in a voice-only 
world. The individuals that need this the most have cut the 
cord, the traditional cord, and have moved on to the mobile or 
wireless spectrum.
    We need to modernize. We need to throw away the old and 
come up with a new construct, one that recognizes and addresses 
the needs of today, a program that is fiscally sound with all 
of the protocols in place to ensure that once and for all, 
whatever vulnerabilities we have are addressed, that the 
provider is no longer the one who is greenlighting individuals 
who are--the consumers who are certified or justified to be on 
the fund.
    We need to get rid of as many vulnerabilities as we can in 
order to serve those who are vulnerable. We are poised to do 
that by the end of this month, and I'm looking forward to 
continued feedback and a successful program that will properly 
serve those who are on the wrong side of the opportunity side.
    Senator Booker. Real quick, I was going to talk about 
innovation.
    Commissioner Clyburn. Oh, I apologize.
    Senator Booker. No worries. I just want to--for the 10 
seconds I have left, could you just talk about the--we've made 
a lot of progress on the inmate calling, but now we're seeing 
some threats where the next frontier is, these video conference 
calls.
    Commissioner Clyburn. Right.
    Senator Booker. You're doing some really good work on that. 
Can you use my last second to talk about that for a second?
    Commissioner Clyburn. Well, we put forth a further notice 
that will look at what is called a video visitation model that 
many facilities have gone to. There are lots of people who 
cannot visit in person their loved one. They're going to a 
video model. We have heard reports that this is financially 
taxing on them. So we're going to look at that to see if this 
regime is as broken as the one which we are already poised to 
fix.
    Senator Booker. Thank you, Commissioner.
    I wanted to submit this to the record earlier.
    The Chairman. Without objection. Thank you, Senator Booker.
    [The information referred to follows:]

                                                      March 1, 2016

Chairman Tom Wheeler,
Commissioner Mignon Clyburn,
Commissioner Michael O'Rielly,
Commissioner Ajit Pai,
Commissioner Jessica Rosenworcel,
Federal Communications Commission,
Washington, DC.

RE: WC Docket No. 11-42, Lifeline and Link Up Reform and Modernization

Dear Chairman Wheeler and Commissioners Clyburn, O'Rielly, Pai,
    and Rosenworcel:

    The undersigned parties--broadband Internet access providers and 
consumer and public interest organizations--share the Commission's goal 
of modernizing the Universal Service Lifeline program to help ensure 
that all Americans have access to modern communications services. We 
all agree that it is time that Lifeline eligible consumers have the 
opportunity to use their benefit to reduce the cost of subscribing to 
broadband Internet access service.
    In order for the addition of broadband Internet access to have the 
desired impact, however, we also believe that the Commission must make 
other critical changes to the program. First, eligibility and 
recertification functions currently performed by service providers must 
be promptly and completely handed over to a third-party verifier/
administrator. This step will both strengthen the program and reduce 
the costs to providers of serving the Lifeline market. Second, the 
Commission should encourage broad provider participation in the new 
broadband Lifeline program. To do so, the Commission should centralize 
and streamline the process of authorizing providers to offer Lifeline-
supported broadband Internet access service. The Commission has the 
legal authority to make this change and the policy rationale for doing 
so is compelling. All Lifeline-eligible consumers deserve broadband, 
and without widespread provider participation, eligible consumers may 
not have access to Lifeline-supported broadband Internet access 
service.
    To fulfill the vital purpose of bringing broadband to those who 
otherwise cannot afford it, we want both the broadest participation 
possible and the flexibility to create innovative solutions. This 
requires a uniform national policy that, while preventing fraud and 
abuse, encourages maximum participation and encourages innovative ways 
to provide affordable broadband. Unfortunately, creating such a 
broadband Lifeline program is incompatible with the current process of 
approving authorized providers.
    We look forward to continuing to work with the Commission on 
updating the Lifeline program and the creation of a new Lifeline 
program targeting broadband for the needs of today's consumers.
            Sincerely,

    Access Humboldt
    American Library Association
    AT&T
    Benton Foundation \1\
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    \1\ The Benton Foundation is a nonprofit organization dedicated to 
promoting communication in the public interest. These comments reflect 
the institutional view of the Foundation and, unless obvious from the 
text, are not intended to reflect the views of individual Foundation 
officers, directors, or advisors.
---------------------------------------------------------------------------
    Center for Media Justice
    Center for Rural Strategies
    CenturyLink
    Comcast
    Common Cause
    Common Sense Kids Action
    Connected Nation, Inc.
    Cox Communications
    EveryoneOn
    Frontier Communications
    Media Mobilizing Project
    Multicultural Media, Telecom and Internet Council
    National Digital Inclusion Alliance
    National Hispanic Media Coalition
    OCA--Asian Pacific American Advocates
    Public Knowledge
    Schools, Health & Libraries Broadband Coalition
    The Greenlining Institute
    Verizon

    Senator Booker. Thank you very much.
    The Chairman. Senator Fischer?

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

    Senator Fischer. Thank you, Mr. Chairman.
    Chairman Wheeler, as you know, this past December, a group 
of seven Senators and myself wrote to you expressing our 
concerns about the FCC's recent actions in the area of 
municipal broadband. I believe that broadband services should 
be available to all Americans no matter where they live, in 
rural and urban areas alike. I'm concerned that the FCC seems 
to be picking winners and losers in the market, and that he 
municipal broadband networks that you are encouraging run the 
risk of over-building private sector networks and taking those 
limited Universal Service Funds away from companies that really 
do rely on them to provide that broadband to rural America.
    Recognizing this, in Nebraska, we did pass a law that 
prohibits municipalities from providing broadband or 
telecommunications services. So, Mr. Chairman, in your response 
to our letter, you said that the Commission has not authorized 
any municipal broadband providers to receive rural broadband 
experiment support at this time.
    It's interesting that you say that, given that last month, 
the FCC's Wireline Competition Bureau released an order that 
removed the Electric Power Board of Chattanooga from further 
participation in the rural broadband experiments program, the 
very municipal broadband provider for whom the FCC recently 
preempted in Tennessee's state law. In that order, the bureau 
said that the Electric Power Board had been provisionally 
selected to receive $710,000 in rural broadband experiments 
funding. Public notices from last year suggest that they are 
not the only ones.
    So, Mr. Chairman, has the FCC authorized municipal 
broadband providers to receive funding through that rural 
broadband experiments program, whether provisionally or not, 
and if so, how much money?
    Chairman Wheeler. Thank you, Senator. I recall the letter 
and specifically doing the research behind it. I will be happy 
to submit for the record the details. If there have been 
developments since then. I don't know them off the top of my 
head.
    Senator Fischer. So you don't know if the FCC has 
authorized that funding for municipal broadband providers 
through that rural fund?
    Chairman Wheeler. I'm sorry. Through the----
    Senator Fischer. You don't know if the FCC has authorized 
municipal broadband providers to receive funding through that 
fund?
    Chairman Wheeler. Well, I just heard you say that that was 
done in Chattanooga. It was a bureau level decision, and I was 
either not aware or have forgotten.
    Senator Fischer. If you could get back to us on that, I 
would appreciate it.
    Chairman Wheeler. Be happy to, yes, ma'am.
    Senator Fischer. I think there are obviously some questions 
out there. Thank you, sir.
    [The information referred to follows:]

                          Federal Communications Commission
                                     Washington, DC, March 14, 2016

Hon. Deb Fischer,
United States Senate,
Washington, DC.

Dear Senator Fischer:

    I am following up on your question from the March 2 hearing 
regarding broadband networks owned by municipal governments. You 
specifically asked whether or not the FCC has authorized municipal 
broadband providers to receive funding through the Rural Broadband 
Experiments Program. The direct answer to your question is that the FCC 
has not--and will not--authorize disbursement of Rural Broadband 
Experiment funds to any municipally-owned broadband provider for areas 
where a competitor has been providing service. I provide below the 
status of all such networks that have been involved in that program.
    In July 2014, the Commission adopted rules for a limited program of 
rural broadband experiments and established a competitive bidding 
process to select projects from entities willing to deploy robust 
broadband to consumers in areas within price-cap telephone companies' 
territory where no competitor was providing broadband service. Bids 
were due on November 7, 2014. The Wireline Competition Bureau (Bureau) 
announced a first list of provisionally selected bidders on December 5, 
2014, and announced additional provisionally selected bidders on March 
4, 2015. As of June 2015, the Bureau announced that no additional rural 
broadband experiments bids would be selected. Four of the provisionally 
selected bidders could be characterized as providers owned by municipal 
governments.
    In order to be authorized to receive funding, all provisionally 
selected bidders must meet several requirements: specifically, the 
Bureau must find each provisionally selected bidder is financially and 
technically qualified, has received eligible telecommunications carrier 
(ETC) designation by the state commission (or the FCC, if the state 
lacks jurisdiction), and has an acceptable irrevocable stand-by Letter 
of Credit. In each case, there are deadlines for submitting the 
requisite information, and the Bureau must affirmatively find the 
submission to be satisfactory in order for the applicant to proceed. 
Only after all of those requirements are met will the Bureau authorize 
the disbursement of support. Prior to that time, there is no funding 
commitment under Federal law; the provisionally selected bidders merely 
are applicants for support.
    Of the four bidders noted above, one affirmatively withdrew its bid 
prior to the deadline to submit financial and technical information. 
Two more were removed by the Bureau for failing to comply with the 
requirements. The last of the four provisionally selected bidders--Lake 
County d/b/a Lake Connections in Minnesota-remains under consideration, 
but has not yet met all of the Commission's post-selection 
requirements.
    Lake Connections was provisionally selected to apply for about $3.5 
million in support for a fiber-to-the-home project serving 7,000 
locations in 847 census blocks. After a challenge process specifically 
designed to ensure that the areas in question were unserved by 
unsubsidized competitors, the Bureau determined that two of those 847 
census blocks were served by a competitor. These blocks were removed 
from the project and the application for support was reduced 
accordingly to $3.49 million. Lake Connections timely submitted the 
required financial and technical information and timely submitted a 
letter of credit commitment letter. Lake Connections has filed a 
petition for waiver of the deadline for submitting proof of its ETC 
designation; although it filed its ETC petition with the Minnesota 
Public Utilities Commission on January 29, 2015, it was not designated 
until December 2, 2015. The Bureau would need to grant Lake 
Connections' petition for waiver of the ETC filing deadline prior to 
finding it ``ready to authorize.'' Were the Bureau to do so, Lake 
Connections would then have to produce a letter of credit prior to 
being authorized to begin receiving support.
    I appreciate your interest in this matter. Please let me know if I 
can be of further assistance.
                                                Tom Wheeler

    Senator Fischer. Commissioner Pai, earlier in your career, 
you spent time working as an attorney with the Department of 
Justice, and as I'm sure you know, the states of North Carolina 
and Tennessee have filed legal challenges to the FCC's--I call 
it a troubling order, preempting laws in those states that do 
restrict the ability of municipalities to provide broadband 
services. And you probably know that the Department of Justice 
has declined to defend the FCC's order in court.
    Can you tell me how rare an action that this is? And 
doesn't it suggest that the FCC overstepped its legal authority 
by preempting these state laws?
    Commissioner Pai. Thank you for the question, Senator. I 
think, indeed, it is exceptionally rare for the Department of 
Justice not to take the position of one of the agencies that it 
is charged, typically, with defending in court.
    I think it speaks to the fact that this particular order 
had significant legal vulnerabilities, which is what I focused 
on in my own dissent, because I believe that under the 
Constitution and the laws of the United States and Supreme 
Court precedents like Nixon v. Missouri Municipal League, it's 
pretty clear that the agency could not find the requisite clear 
statement from Congress to support the preemption of state laws 
such as Nebraska's.
    Senator Fischer. I would hope this committee would take 
note of that and possibly look at legislation that will help 
the FCC in recognizing state laws in the future when we have 
these issues come up.
    Also, Mr. Chairman, I am concerned about what will happen 
to low-power television stations in Nebraska after this year's 
broadcast incentive auction. In Nebraska, we have a population 
of less than 2 million people, and many of those folks live in 
rural areas where it's not possible to receive a signal from 
full-power stations in the state.
    We have a number of low-power television stations, and they 
are valuable for ensuring that Nebraskans, especially those who 
would normally receive their broadcast content from Iowa or 
South Dakota--that they can receive that local content, not 
that we have anything against South Dakota, Mr. Chairman. Of 
course not.
    You have consistently declined to say whether low-power 
television stations will be able to keep their spectrum after 
this incentive auction. Can you assure me that every reasonable 
effort will be made to find a channel for those low-power 
television stations so that they do not have to go off the air? 
They are providing a very worthwhile and valuable service.
    Chairman Wheeler. Yes, ma'am. As you know, the statute does 
not establish any priority for low-power stations. So we've 
been trying to work our way through that. I think there aretwo 
things to bear in mind. One is we don't know--we'll start 
knowing in 26 days--but we don't know right now what the 
spectrum layout is going to look like afterwards.
    What we have done is to say to the low-power companies: 
``We will help you after the auction if, heaven forbid, there 
is a situation. We will help you find a new channel. We will 
help you share''--because the beauty of digital is you're now 
into channel sharing--``and you can maybe even get a little 
upgrade by sharing with a Class A, which gives you a little 
more ooomph in your market.'' So, yes, ma'am, we have laid out 
a plan to do that as soon as we know what the landscape looks 
like.
    Senator Fischer. Well, I really appreciate it, and if I can 
help in any way with that, I would like to----
    Chairman Wheeler. Thank you.
    Senator Fischer.--because as people live around any border 
of their state, it is difficult to be able to get that local 
news, and I think that is very, very important. And as we 
address that need of these orphan counties out there, I think 
these low-powered stations really could be an answer for that. 
So I thank you.
    The Chairman. Thank you, Senator Fischer.
    Senator Moran followed by Senator Johnson.

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

    Senator Moran. Mr. Chairman, thank you. Incidentally, to 
the Senator from Nebraska, I grew up with Nebraska on-the-
border television and radio, and it wasn't that detrimental.
    [Laughter.]
    Senator Moran. Mr. Chairman and Commissioners, thank you 
very much for your presence here. Let me start with the 
spectrum conversation. I'll forego kind of my editorial 
comments and see if I can get directly to this question and a 
few more on some other topics.
    When do you anticipate--this is for you, Chairman Wheeler. 
When do you anticipate that the Spectrum Frontier proceeding 
will be complete?
    Chairman Wheeler. This summer.
    Senator Moran. And do you anticipate that that completion 
of the Spectrum Frontier proceeding will lead to an auction in 
2017, or is that too early?
    Chairman Wheeler. I don't know the answer to that, sir. I 
mean, one of the things that has yet to be worked out--and 
we're working through to get to that summer schedule--is how do 
you deal with existing incumbents, and how do you deal with 
their--and so I can't answer that question because we're not 
there yet.
    Senator Moran. So the consequences of this auction will 
determine the necessary steps in following auctions, or they'll 
learn something from----
    Chairman Wheeler. No, sir. No, sir. What I'm saying is that 
we've got the 600 Megahertz auction, which will begin later 
this month. And then insofar as the 5G spectrum, the millimeter 
wave band spectrum that Commissioner Rosenworcel talked about, 
we are in the process of working through how you deal with 
sharing and other issues for folks that are currently 
incumbents there. That will lead to the kind of resolution that 
we need to authorize use, which we will do this summer.
    Senator Moran. It's not an auction issue. It's a technology 
issue.
    Chairman Wheeler. It's a tech, and that, then, will lead to 
the question of how do you dispose of that spectrum.
    Senator Moran. Given the nature of high-band spectrum, it 
seems to me we're not only going to need more spectrum, but 
we're going to need the support of infrastructure in its 
deployment at higher frequencies. Are you on track to complete 
the small cell proceedings before the end of the year?
    Chairman Wheeler. Yes, sir.
    Senator Moran. Let me turn to the issue of the impending 
auction. One of the concerns I have is that the--my assumption 
is that the spectrum crunch is the greatest in the urban areas. 
And my concern is what does that mean to rural areas. So we 
have the $175 billion cap. We have the 39-month timeframe.
    What's the plan for clearing that spectrum compared to 
rural versus urban? Is there a distinction? And the reason I 
ask the question is I want to make certain that rural is not at 
the end of the line when it comes to reimbursement or at the 
end of the line when it comes to trying to find a contractor to 
build a tower.
    Chairman Wheeler. It's a great question. The reality of 
when you go and run the spectrum auction is that auction is a 
daisy chain--or spectrum is a daisy chain, and how you set up 
spectrum in Chicago affects what happens in Kansas, for 
instance. So they are all interconnected, which means that 
there is not one higher ranking spectrum than other. If you 
haven't got it right in one area, it daisy chains up and screws 
up Chicago. So the answer to your question is we have to solve 
it on a broad base.
    Senator Moran. So I should not have the concerns that rural 
will take a back seat while spectrum is utilized someplace 
else, and then we have problems with accessing the fund or 
enough time to get towers built?
    Chairman Wheeler. Because of this daisy chain issue, if you 
can't clear it in Kansas, you may not be able to clear it in 
Chicago.
    Senator Moran. So if there was a bias, it's technically 
incapable of being accomplished.
    Chairman Wheeler. Yes, sir.
    Senator Moran. Good. And maybe this is to Commissioner 
O'Rielly or to you, Chairman Wheeler. On the issue of rural 
broadband--in fact, Chairman Wheeler, you and I had this 
conversation when you came seeking conversation regarding your 
nomination and confirmation.
    Chairman Wheeler. Yes, sir.
    Senator Moran. You and the Commission have been attempting 
to reform the order of now several years ago in regard to an 
issue that is very important to me and to Kansans. The 
Universal Service Fund is important to us, as you would guess.
    My question is: As you make USF reforms to that 
reimbursement model, can you provide me an update first with 
when the carriers will see an actual order? And, secondly, can 
you assure me that there will be enough support not only to 
recover the cost of providing the service, but the significant 
previous investment that many carriers have made--Rural Utility 
Services loans, private loans?
    I've expressed this concern for a long time, that the RUS 
and FCC seem to be at incompatible places in which your order 
suggests to me that there may be a Federal agency that will be 
owed significant amounts of money from companies who are no 
longer able to make the payments. Their payments and their debt 
serviceability was determined at a time in which the Universal 
Service Fund was different than it's going to be under your 
order.
    Chairman Wheeler. Thank you very much, Senator. First point 
is I hope we will have this bipartisan product voted on soon. 
There are three votes for it today. That triggers what's called 
a must vote, which ends sometime later this month. We are very 
sensitive to the issue that you raised, and this is something 
we talked a lot about with the various industry groups and we 
believe that we will not cross that threshold.
    However--and I don't, Mike, mean to throw this to you in 
terms of now you get a question like this. But I really want to 
emphasize how this was a bipartisan effort, and I shouldn't be 
the only one speaking on behalf of it.
    Commissioner O'Rielly. I appreciate the opportunity. I 
should say I'm limited in what I can say since it's an item 
before us. I would be happy to change those rules, as I 
mentioned earlier.
    Senator Moran. You're good at making your point.
    Chairman Wheeler. I take back my time.
    [Laughter.]
    Commissioner O'Rielly. But to your point, we did spend 
extensive time to ensure that a number of things that go into 
the item that my colleagues are considering will have 
transition periods. We also think that the changes that are 
being asked of legacy carriers in terms of build-out and things 
that will improve the experience for Americans will not have a 
dire effect on their business plans or the loans that they've 
taken out.
    We also have made clear--and I've promised--that if there 
are specific issues to any carrier that I'm willing and ready 
to deal with any type of situation brought to my attention, and 
that while we want to build a strong foundation, it is not 
cement, so we will not consider if there are adverse impacts on 
any----
    Senator Moran. So there's a case-by-case opportunity.
    Commissioner O'Rielly. It is to be sensitive to--that if 
the facts that are presented before us are such that a carrier 
would be dramatically impacted, we would want to be very 
sensitive to that.
    Senator Moran. Thank you.
    The Chairman. Thank you, Senator Moran.
    Senator Johnson?

                STATEMENT OF HON. RON JOHNSON, 
                  U.S. SENATOR FROM WISCONSIN

    Senator Johnson. Thank you, Mr. Chairman. It seems as 
others brought up sports broadcasting, I'm sure the Chairman 
would agree with me that every American ought to be able to 
have access to watching Packer games. And I appreciate----
    Senator Klobuchar. The Chairman likes the Vikings games.
    [Laughter.]
    Senator Johnson. I would say you're probably not going to 
agree with me, Senator Klobuchar, that there are way too many 
people in Wisconsin in the western part of the state wearing 
Packer uniforms on game days.
    So I just want to ask the Chairman--I sent you a letter 
making sure that you will expeditiously review any petition by 
a Wisconsin broadcaster to allow those games be broadcast over 
satellite, and I hope a broadcaster actually does so.
    Chairman Wheeler. I'm sorry. I was coughing. This is----
    Senator Johnson. I just wanted to make sure the FCC 
expeditiously, hopefully grants, the petition of a Wisconsin 
broadcaster to carry Packer games over satellite.
    Chairman Wheeler. So what we're doing as a result of 
STELAR, as you know, is following through and looking at each 
of those. And I understand as a----
    Senator Johnson. Just a simple yes would be----
    Chairman Wheeler. Yes.
    Senator Johnson. Thank you. I appreciate it.
    Chairman Wheeler. I don't get to talk about Ohio State?
    [Laughter.]
    Senator Johnson. I'm really concerned--and the Chairman 
is--we're concerned about Packer games.
    Chairman Wheeler, you are Chairman of an independent 
agency. The FCC is supposed to be an independent agency. 
Correct?
    Chairman Wheeler. Yes, sir.
    Senator Johnson. Accountable to--a creation of Congress. 
Correct?
    Chairman Wheeler. Yes, sir.
    Senator Johnson. Have you had a chance to read the report 
that we issued out of my Committee on Homeland Security and 
Governmental Affairs: Regulating the Internet, how the White 
House Bowled over FCC Independence?
    Chairman Wheeler. No, sir. But I have read summaries of it.
    Senator Johnson. There are a number of troubling findings. 
I'd like to ask a couple of questions. First of all, were you 
aware that you had legal advisors in the FCC that are very 
troubled about the thin record to support the FCC rulemaking, 
potentially in violation of the Administrative Procedures Act. 
Were you aware that within FCC--you were concerned about the 
thin record?
    Chairman Wheeler. Boy, I hope so. I hope that the lawyers 
are constantly second guessing each other and me.
    Senator Johnson. But you were aware of that during----
    Chairman Wheeler. And that was what was going on. We were 
having--believe me, it was fulsome debate and discussion at 
that point.
    Senator Johnson. So there was a proposal for a public 
notice and actually written up, but you did not go forward with 
the public notice to actually beef up that public record.
    Chairman Wheeler. No, I----
    Senator Johnson. Can you describe why that notice wasn't 
issued?
    Chairman Wheeler. Thank you, Senator. I think what we did 
was that we hit pause, and I publicly announced that we were 
hitting pause, for the purpose of enriching the record, and I 
think I said at that point in time we know the big dogs are 
going to sue on this, and we want to make sure that we've got 
I's dotted and T's crossed.
    Senator Johnson. Another concern was really the 
circumvention by the FCC of the ex parte communication 
requirement. In a 1992 Office of Legal Counsel opinion, they 
were obviously concerned about that independence of the agency, 
and they wrote, ``White House staff members should avoid even 
the mere appearance of interest or influence, and the easiest 
way to do so is to avoid discussing matters pending before the 
independent regulatory agencies.''
    Now, there were a number of meetings that we uncovered in 
our investigation, e-mails going back and forth between 
yourself and members of the White House, where, clearly, this 
Open Internet ruling was being discussed, and yet there was 
never a record made of those ex parte communications. I find 
that very troubling.
    Chairman Wheeler. Thank you, Senator. Knowing this was in 
your report, I did go check the rules, and the rules say, 
quote, ``that only substantial significant''--that the only 
times that you need ex parte is when there is substantial 
significance and is clearly intended to affect the ultimate 
decision. And that applies to both communications with the 
White House and communications with Congress.
    Senator Johnson. Well, when you go down the timeline in 
terms of the path you were going down in terms of the Open 
Internet ruling, and then President Obama coming out with his 
statement, and then the FCC turning on a dime, I would say 
those discussions were pretty significant.
    Chairman Wheeler. So the President filed an ex parte, 
though, right? I mean, I just want to make sure we get the 
record straight here, that an ex parte was filed by the 
administration.
    Senator Johnson. On one of those, but----
    Chairman Wheeler. On----
    Senator Johnson.--there were other ones, it reads in the 
report.
    You know, I was actually shocked at the Chairman's 
statement during his opening statement that the FCC was going 
to get out of the way and let innovation and competition reign.
    Commissioner Pai, do you think regulating the Internet 
under Title II is getting out of the way and letting innovation 
and competition reign? Can you describe what's been happening 
in terms of innovation investment in broadband and Internet 
after this ruling?
    Commissioner Pai. Thank you for the question, Senator. I do 
not think it is getting out of the way of innovation 
investment, and the agency itself didn't think that until 
November 10, 2014. I think what we've seen in 2015 is the fact 
that among both major wireline broadband providers and small 
providers that investment in innovation is slowing. For 
example, we've heard from a number of small wireless ISPs, one 
of whom testified to Congress just last month that she is 
shelving plans to upgrade her network in rural Arkansas to 
serve her customers precisely because of the uncertainty and 
the burden posed by these regulations.
    Among major providers, we have seen the first ever decline 
in broadband wireline investment in the Internet age, outside 
of the tech bubble bursting in 2001 and the great recession in 
2008. Now, I think that it is telling that some of these major 
companies are now spending billions of dollars on companies 
like AOL or even putting their investments abroad, and that's 
because, presumably, they think the return on the investment is 
now greater in areas outside of the broadband infrastructure. 
That's an unfortunate thing for the American consumer.
    Senator Johnson. So, possibly, with a little bit more 
public notice, a more robust record, maybe we would not have 
gone down what I think is a very harmful pathway.
    Commissioner Pai. I think the internal documents in your 
report prove that. If you look at the report, e-mail after e-
mail suggests the FCC career staff--and I once was one of 
them--said, ``We do not believe that there's adequate notice 
for all of these separate areas.'' Nine separate aspects of the 
plan were thought to be lacking in terms of the public input.
    Chairman Wheeler. With all due respect to my colleague, 
what he has just portrayed as facts are not. Investment is up, 
and I can quote you from the statements that the companies 
themselves make when they are reporting to Wall Street, because 
I have it here. Fiber is up 13 percent over last year. Usage of 
the Internet is up, and that has driven what you want to be up, 
which is increased revenue per subscriber for the Internet 
companies in the last year since the Open Internet Order took 
place. So I would just suggest that the representations that 
we've heard are not necessary factual.
    Commissioner Pai. But you're not challenging the assertion 
there were nine aspects of this rulemaking that had a thin 
record.
    Chairman Wheeler. No. What I----
    Commissioner Pai. Your own staff said that. You're not 
challenging that.
    Chairman Wheeler. I'm challenging his assertion about the 
effects, and I'm saying insofar as the record is concerned, we 
worked with the staff, and the job of the staff is constantly 
to say, ``Hey, there are issues you need to address.'' And one 
of the reasons that I pushed pause was to make sure we 
addressed all the issues.
    Senator Johnson. I'm out of time.
    Commissioner Pai. So, Senator--well----
    Senator Johnson. Mr. Chairman, can Commissioner Pai 
respond?
    Commissioner Pai. With the indulgence of the Chairman, so 
it's telling that on one hand, we are saying that all this 
investment is up, infrastructure is booming. Yet on the other 
hand, just 1 month ago, the Chairman and a majority of the 
Commission said that broadband is not being reasonably and 
timely deployed pursuant to Section 706. Which is it? Is 
broadband infrastructure broken, or is it not? I submit to 
you----
    Chairman Wheeler. Thirty-five million Americans that don't 
have enough----
    Commissioner Pai. I would submit to you that part of the 
reason why it is not, part of the reason why I agreed with the 
Chairman and my colleagues that broadband is not being 
reasonably deployed in a timely way, is precisely because the 
FCC's policies have failed. This administration's policies on 
broadband have failed, and that's part of the reason why we see 
this decline in broadband infrastructure investment.
    There's a reason why Google, for example, has a greater 
market capitalization than every cable company in the United 
States combined. It's no accident that the regulatory 
infrastructure we have built is now depressing broadband 
investment.
    Chairman Wheeler. We are not seeing a decline in broadband 
infrastructure investment. You can say it and say it and say 
it, but it doesn't make it a fact.
    Commissioner Pai. The facts speak for themselves, and I'd 
be happy to submit the sworn declarations from numerous ISPs 
for the record.
    Chairman Wheeler. I'll be happy to submit the information 
that the companies provide under penalty of SEC to their 
investors about their investments.
    Commissioner Pai. I'll simply say it's striking what CEOs 
with pending mergers before the SEC will say about the SEC's 
top priorities.
    Chairman Wheeler. I'm talking about AT&T and Comcast and 
companies like that.
    Commissioner Pai. Who are typically repeat players before 
an agency that regulates them highly.
    Senator Johnson. Thank you, Mr. Chairman.
    The Chairman. This is good stuff, Senator Johnson.
    [Laughter.]
    Senator Johnson. Appreciate it. Happy to oblige.
    The Chairman. Let's bring it back to the Green Bay Packers.
    Senator Johnson. I think I've done my work here.
    The Chairman. All right. We have next up Senator Gardner.

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

    Senator Gardner. Thank you, Mr. Chairman, and thank you to 
the witnesses. And if this were on Denver TV, I'd love for the 
four corners to have been able to----
    [Laughter.]
    Senator Gardner. Got that one in. Again, thank you to all 
of you for being here.
    The Federal Government owns an extremely high number of 
valuable spectrum--a lot of extremely high valuable spectrum--
but many of us have no idea what the exact commercial value of 
that spectrum is today. Some spectrum currently owned by the 
Federal Government may not be useful to them but could be 
extremely useful to the commercial market. Unfortunately, we 
just don't know the economic opportunity cost of that spectrum 
until it's valued by somebody.
    Commissioner O'Rielly, would you be supportive of the NTIA 
in consultation with the FCC and OMB helping to determine the 
annual economic opportunity cost of spectrum in the Federal 
Government's possession and follow that up with, in essence, 
basically supporting finding the actual dollar value of 
spectrum if it were to be used for commercial purposes?
    Commissioner O'Rielly. So some of that would require 
Congressional changes in law, and so I would leave that to your 
capable skills. But in terms of the theory and the concepts, I 
would. I have advocated to not only determine the opportunity 
cost, but we actually ought to put it onto the budget of the 
agencies, not on the private sector, but on the agencies 
themselves so they have an opportunity cost.
    So it's both the carrot and the stick. My colleagues have 
favored good ideas on the carrot side. I want to be on the 
stick side as well. I think you need both parts to make it 
effective.
    Senator Gardner. Commissioner Pai?
    Commissioner Pai. I agree completely with Commissioner 
O'Rielly on that.
    Senator Gardner. Thank you.
    Commissioner Rosenworcel, as you may know, I, along with 
Senator Mark Warner from Virginia, have introduced a bill 
earlier this week that would create a 16-member Commission to 
study the encryption issue. There are many complex issues 
confronting our country today when it comes to encryption, 
namely, how do we ensure that our citizens' privacy is 
protected while ensuring that we don't create a safe harbor for 
terrorists and bad actors to communicate with one another?
    Do you believe this is an area where we need to get bright 
minds together from law enforcement and the private sector to 
discuss how we move forward with encryption and technology and 
all the concerns that come along with it?
    Commissioner Rosenworcel. Yes, I think it's a smart way 
forward.
    Senator Gardner. Thank you.
    Chairman Wheeler?
    Chairman Wheeler. Yes, sir.
    Commissioner O'Rielly. Yes, sir.
    Senator Gardner. Thank you. Chairman Wheeler, as you know, 
failed retransmission consent negotiations have resulted in 
temporary blackouts negatively impacting television viewers 
across the country. The FCC has undertaken a review of the 
totality of circumstances test for retransmission consent 
negotiations after Congress directed your agency to do so in 
the 2014 STELAR legislation with the hope that we can reduce 
the amount of such blackouts.
    Can you provide the Committee today with any indication of 
when the FCC plans to complete the current totality of 
circumstances proceedings?
    Chairman Wheeler. Thank you, Senator. We're on course and 
speed to maintain--to achieve the date that you established in 
the legislation.
    Senator Gardner. Very good. When it comes to additional 
spectrum and spectrum pipeline issues, the last auction 
scheduled, obviously, is this year, and we all know it's not 
going to produce enough spectrum availability that will satisfy 
consumer needs. In fact, industry has said that mobile data 
traffic will be over 600 times greater next year than it was 
just 10 years ago.
    Further, we are moving toward a 5G world that we've talked 
about today, where we'll be able to do things we never thought 
we had the possibility to do with speeds we never thought 
imaginable. We'll be enhancing the way kids learn, speeding up 
our financial transactions, taking telehealth to the next 
level. But we need more spectrum to achieve this, and I think 
we're all hoping that the FCC moves forward in a positive 
direction. So my questions are these.
    Commissioner O'Rielly, what else can we be doing in 
Congress to free up more commercial spectrum? We've talked 
about some of the ideas. But if you'd like to outline some 
more, how do we create incentives for the Federal Government to 
give up their unused spectrum?
    Commissioner O'Rielly. So I talked about not only 
opportunity cost, estimating opportunity cost, but putting the 
burden on the budget as well. But there are a number of things 
that we have to do. We have to work smarter and get a better 
response from the Federal Government agencies. I know it has 
been difficult to deal with. I spent 20 years working with 
them.
    It is a tough slog, but we need to have better direction 
from them. Part of the difficulty is that NTIA itself 
represents the agencies and not necessarily the best interests 
of spectrum policy, and I think we ought to think about 
changing that mission as well. And then in terms of things that 
will help on Federal lands, I know there are a number of things 
that the Committee is considering on siting facilities on 
Federal lands, and I think that would be extremely helpful.
    Senator Gardner. Very good. I know Senator Klobuchar and 
Senator Daines are working on--as I am as well as a sponsor of 
that--the One-Dig bill. After yesterday's Super Tuesday 
results, we may just want to have it called the Keep Digging 
bill. I don't know.
    [Laughter.]
    Chairman Wheeler. Can I add one thing? One dig, one climb, 
one siting. That's what we need, so that it's not just--you 
don't dig up the streets a lot. But you need to climb the pole 
once, and you need to have siting on this antenna once. And all 
those put together are things that I think we are all in 
violent agreement on here but could definitely use some 
legislative help on.
    Senator Gardner. Well, I dig it. So that's good. And I want 
to thank the broadcasters for working hard to find a solution 
to some of the problems we've had in southwestern Colorado, the 
four corners. I know they've been working hard to find a 
solution for La Plata and Montezuma Counties to this issue of 
whether or not southwestern Colorado can receive Colorado 
broadcasters.
    The two counties did get the Broncos this year, which was 
incredibly important this season. But they did not have access 
to Colorado weather or news, and we've got to fix that. I know 
the FCC has adopted rules to allow counties to petition the FCC 
for state signals, and I thank you for that. But what more can 
you be doing to ensure that all Coloradoans get Colorado 
broadcasts?
    Chairman Wheeler. Are you addressing that to me?
    Senator Gardner. Yes, please.
    Chairman Wheeler. Moving with dispatch. We were frequently 
up here--and Commissioner Rosenworcel was a real champion on 
this issue. We were frequently up here saying, ``But wait a 
minute. There's a hole in the law.'' You fixed the hole in the 
law. You passed the ball to us, to keep the football analogy 
going. You passed the ball to us. It's up to us to move with 
dispatch.
    Senator Gardner. If anybody else would like to comment on 
that, feel free.
    Commissioner Rosenworcel. I might be the only person here 
who's been to La Plata and Montezuma Counties.
    Senator Gardner. Thank you for that.
    Commissioner Rosenworcel. So I'm just going to point that 
out. And I spoke with people there who said in 15 years, they 
never saw the Governor of their state on their television one 
time.
    Senator Gardner. They may regret that if it changes. I 
don't know.
    [Laughter.]
    Commissioner Rosenworcel. Well, I think the point stands 
that they deserve to have access to local news, Colorado 
football games, and generally feel like they're part of the 
state. So we should work with this market modification process 
that you made available to us in the Stellar Reauthorization 
Act to try to make that happen.
    Senator Gardner. Thank you, and thank you for being there 
as well.
    Anybody else? I know I'm out of time, Mr. Chairman.
    [No verbal response.]
    Senator Gardner. Well, thank you.
    The Chairman. All right. Thanks, Senator Gardner.
    Senator Daines and then Senator Peters.

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

    Senator Daines. Thank you, Mr. Chairman.
    Thank you all for being here today. It's exciting to hear 
you all talk about the new technologies and how the U.S. can 
truly remain a leader in innovation. I know we chatted a little 
about over-building, about efficiencies, and so forth, and 
thanks for the support, too, on the Dig-Once amendment. I think 
that's a step forward, and, Chairman Wheeler, your enhancement 
of that is something we ought to be looking at as well, to 
expand that.
    Chairman Wheeler, you've often talked about the need to 
make sure that the Universal Service programs are well managed 
and they're efficient. I certainly agree. But then I see the 
Commission awarding money to entities and areas that already 
have access to fiber, perhaps some over-building, some 
redundancies, insisting we upgrade speeds in urban areas, while 
certainly for many of us who are looking and representing rural 
areas, we are underserved.
    Can you really say that that is an efficient use of 
Universal Service Funds? And should the Commission be focusing 
on areas that have no connectivity, like many areas in Montana, 
and for members here in this committee?
    Chairman Wheeler. No and yes. So no, it is not an efficient 
use of funds to subsidize competition, and that's not something 
that should be going on. Can we do something about it? Yes, and 
I believe we are.
    Now, just one of the issues that I know you and I have 
talked about and other members of the Committee is the Mobility 
Fund, and we're going to come out with a new proposal for how 
we fill--what did you call those--the high-fat doughnut holes 
or something?
    Commissioner Pai. Unhealthy.
    Chairman Wheeler. Unhealthy doughnut holes. But we've got 
to do that in a way that does not subsidize the doughnut where 
there is competition, because we've got, for instance, at least 
four licensees who are not covering that doughnut hole. We want 
to make sure that we support one of them, one, to fill the 
hole, but not to take that money and compete with the others 
around, and that's going to be an art form. But that's 
something that we're hard at work at.
    Senator Daines. And that's important for rural states where 
we are depending on--our small businesses are truly the 
backbone. I had that experience myself in the software business 
in Montana. A lot of the Commission's recent proposals from Net 
Neutrality rules to the set-top box proposal seem to 
disproportionately impact small businesses who do not have 
hallways full of compliance staff.
    In fact, I hear more than anything else from small business 
owners about the compliance burdens that they routinely face. 
And I want to thank, by the way, four of the Commissioners here 
who have been to Montana, I think, in the last 6 months. I 
think we could put you on the payroll for the Montana Chamber 
of Commerce. So you get the quality of life draw and how that's 
an important part of how we can drive this economy.
    Commissioner O'Rielly, you visited Montana, and you had the 
opportunity to see firsthand how small business owners 
contribute to the state. Many of these businesses only have a 
handful of employees and do not have armies of lawyers to wade 
through the thousands of pages of regulations. Do you agree to 
a reasonable--to exempt small businesses from some of these 
regulatory burdens such as the enhanced transparency rules?
    Commissioner O'Rielly. Absolutely, and I know you have 
legislation on this front. I know there was legislation 
considered in the House on this front. My colleague, 
Commissioner Pai, and I have articulated a viewpoint that this 
should have been addressed by the Commission. It wasn't 
sufficiently, in our opinion. This should be something we can 
do, and your legislation would adequately and properly address 
this.
    Senator Daines. Commissioner Pai, is that common sense, to 
try to kind of stratify this to a certain degree in terms of--I 
mean, it's an overused term in DC about one size doesn't always 
fit all. But I think that makes sense for these small 
businesses.
    Commissioner Pai. Particularly on this issue, Senator. Both 
the Obama administration, the Small Business Administration, 
and literally every person who submitted a comment or a reply 
comment in our record suggested this burden was undue and that 
the agency should relieve them of that.
    Senator Daines. Commissioner Rosenworcel?
    Commissioner Rosenworcel. I agree with my colleagues here 
to the right. This is something we can do at the agency. We 
have exempted small businesses from the enhanced transparency 
rule for the next year. But I think it would be useful if the 
agency contemplated a longer or permanent exemption.
    Senator Daines. It's regulations and uncertainty. That's 
the one-two punch. So thanks for that added piece on trying to 
provide some certainty here for our small businesses.
    I want to pivot over to broadcast. Chairman Wheeler, you've 
clearly prioritized unlicensed spectrum in the upcoming 
incentive auction. Under the current proposal, it's not clear 
that some low-power stations and translators will even be able 
to stay on the air. This is a big, big deal, certainly, back 
home.
    What assurances can you give to these small businesses who 
may be forced off the air and to the Montana communities who 
rely on translators to receive the broadcast signals, including 
the Denver Broncos?
    Chairman Wheeler. Thank you, Senator. As I indicated 
before, we don't really know what the auction is going to 
produce. I think that the impact in areas like Montana will be 
different than the impact in other parts of the country, and 
that's a saving grace for you.
    But what we have done is to say that for low-power 
television, we will make special efforts, even though it was 
never addressed in the statute, and, specifically, there was no 
priority or dealing with the low-power challenge. We said we 
will help them find new channels. We will help them share, and, 
in fact, that sharing may even end up with Class A status.
    I mean, this is something--we've heard you loud and clear. 
I know that it is a matter of angst, because people don't know 
until they know. But when we all know, we are ready to spring 
to action.
    Senator Daines. Thank you. Angst is a good word. Scared to 
death also describes it back home in Montana. Thanks for your 
concern for that, Chairman Wheeler. I appreciate it.
    The Chairman. Thank you, Senator Daines.
    Senator Peters?

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

    Senator Peters. Thank you, Mr. Chairman, and thank you to 
each of the Commissioners for being here today and for your 
tremendous leadership each and every day.
    Chairman Wheeler, I certainly enjoyed our recent discussion 
in my office regarding the testing plan which the FCC is 
leading with the Department of Transportation, the NTIA, to 
determine whether the 5.9 Gigahertz band can be opened for 
shared Wi-Fi use, and, as you commissioners have heard me say, 
how important this is for our auto industry, in particular, for 
saving lives, where we know that these applications will save 
tens of thousands of lives, and we're on the cusp of having 
some real cutting edge technology in that area.
    So we want to make sure we do it right and certainly move 
forward with due speed but also with an understanding of how 
important this technology is as a lifesaving technology. So I 
look forward to continuing to work with you as we ensure that 
the three-part testing plan is executed both completely and on 
schedule as well.
    But I want to talk today a little bit about some of the 
challenges that Michigan faces, in particular, northern 
Michigan and our upper peninsula, when it comes to rural 
broadband access. I hear from constituents who have great 
skills to contribute to that part of our state. They are 
working in tech industries. They are in the automotive advanced 
manufacturing fields. But they'd love to go up to God's country 
in northern Michigan and our upper peninsula because of the 
incredible quality of life there, but they can't because their 
livelihood depends on having reliable broadband access.
    So I was pleased that AT&T, Frontier, and Century Link have 
accepted over $60 million annually to expand service to some of 
the most rural parts of my state as part of the Connect America 
Fund, Phase I. But I think we are all aware that the work is 
far from over. I think it's critical that the FCC support 
mobile broadband as part of the Connect America Fund, Phase II, 
and should strive to be technology-neutral when making awards 
so we have a better shot at innovating our way out of this 
problem.
    But perhaps as a threshold matter, we need to ensure that 
the FCC has the best available data to base its multimillion 
dollar funding decisions. I was pleased to join a number of my 
colleagues yesterday in a letter led by Senator Manchin and 
Senator Gardner that asks the FCC to work with the FCC and 
industry to address the shortcomings in the existing coverage 
data. If we continue to rely on a map that overstates coverage, 
we're not going to close the rural gap, and we're going to 
waste an awful lot of money while trying to do that.
    A nonprofit in my state, Connect Michigan, initially 
received Broadband Technology Opportunities Program, the BTOP, 
funds under the Recovery Act to develop an accurate and up-to-
date statewide broadband map that served as an invaluable 
resource for residents wanting to know the speed, price, and 
technology base of the broadband service available to them, but 
also to serve the provider industry when looking to determine 
what those coverage gaps are.
    Connect Michigan then supplied that information to the 
Federal Government for inclusion in the national broadband map. 
But those funds have now dried up, and Connect Michigan is 
piecing together funding and attempting to forge new 
partnerships to keep their critical operations going.
    So my question to you, Chairman Wheeler, is that I realize 
that some states where BTOP-supported broadband data collection 
and mapping efforts may have been more successful than others. 
But I am concerned about the sufficiency of solely using data 
supplied by carriers to fill in the national broadband map 
rather than a more granule state-collected data that we have 
used in the past.
    I know the FCC is doing work now to collect Form 477 data 
to prepare it for inclusion in the national broadband map. Do 
you think the Form 477 data will prove to be more accurate than 
previous data collection efforts by states and independent 
third parties?
    Chairman Wheeler. Thank you very much, Senator. The answer, 
in one word, is yes, but we need to think about this through a 
step-wise process. The first cut at coverage was one of the 
coverage maps that the carriers use, that we see in their 
advertising. That didn't work, because that's an optimal. 
That's our franchise. That's our license area.
    Second, then, we went out and had folks do drive tests, and 
that worked in areas where there were roads, or, at least, main 
roads, but didn't work in rural areas. Now, what we're trying 
to gather is information out of the Form 477 that is much more 
granular in that regard. The reports I'm getting is that we 
are.
    Now, there's one big problem, however. We have been denied 
funds for the national broadband map for the last two fiscal 
years. So we can't--there is no national broadband map that is 
up to date. We've requested it, and the appropriators have axed 
it. We are looking for other solutions, but that's kind of the 
reality we find ourselves in.
    Senator Peters. Well, to try to get more data, one 
suggestion with broad support was for Federal agencies to work 
together to create an accessible open inventory of assets as 
well to bring in more data.
    Chairman Wheeler. Yes. Right.
    Senator Peters. And I want to commend Chairman Thune for 
including in his MOBILE NOW legislation language that would 
create a Federal infrastructure asset data base. But I think 
it's important that the Committee also consider the value of 
further incentivizing states and local governments to 
participate in that database. In fact, I have sponsored an 
amendment to the MOBILE NOW bill that would ask agencies 
involved to complete a report on this issue, and then report 
back to this committee within a year.
    Chairman, do you agree that we would achieve a more 
comprehensive and accurate understanding of where our broadband 
infrastructure assets are in the United States if such a 
database not only included Federal assets but also those owned 
by state and local governments?
    Chairman Wheeler. You cannot manage it if you cannot 
measure it, sir. I am for all the more data we can possibly 
get.
    Senator Peters. And a strong supporter of that amendment. 
Thank you so much.
    The Chairman. Thank you, Senator Peters.
    I think up next, we have agreement here for Senator 
Klobuchar to go next.

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

    Senator Klobuchar. Well, thank you. I'm just going to do 
just 2 minutes, and I appreciate Senator Sullivan letting me go 
ahead.
    I understand the Commission is close to finalizing action 
on an order to address a standalone broadband issue, and 
Chairman Thune and I have advocated for this, and I want to 
thank you for that.
    Just really quickly, Chairman Wheeler, how do you expect 
standalone broadband support to drive rural broadband 
development?
    Chairman Wheeler. I'd like to say through the roof. I think 
that it is going to be very significant, because one of the 
things that we all three agreed on is that we have to make sure 
that the money is not just going into the market, but it is 
going to the broadband holes in the market and it is filling 
those areas that today aren't served with broadband.
    Senator Klobuchar. Very good. And as you know, I've been a 
strong proponent of dig-once. We're trying to work something 
out with this committee. Do you think that dig-once policies 
are a sensible way to try to facilitate broadband deployment? 
Does anyone want to take that?
    Chairman Wheeler. Yes, ma'am. Can I use the line that I 
used while you were out? We need dig-once, climb-once, site-
once.
    Senator Klobuchar. Very good. All right. The other 
questions I'll put on the record. One is on the Charter-TWC 
merger and just concerns Senator Lee and I have raised from the 
content viewpoint. I know you can't comment, and I appreciated 
the Commissioner bringing up the bill that we have on the 911 
system that Senator Fischer and I have introduced with some 
other Senators as well.
    And I always appreciate the Commissioners' work on the 
dropped-call issue and the rest of you as well. That continues 
to concern us in Minnesota. So I really appreciate it.
    Senator Sullivan, your indulgence--thank you very much.
    The Chairman. Thank you, Senator Klobuchar. You did that in 
under 2 minutes. Very impressive. It can be done.
    Senator Sullivan?

                STATEMENT OF HON. DAN SULLIVAN, 
                    U.S. SENATOR FROM ALASKA

    Senator Sullivan. A good example of bipartisanship on the 
Commerce Committee here.
    Well, thank you. I appreciate the Commissioners coming and 
testifying today. As you have heard, there has been a lot of 
discussion focusing on the challenges of rural states. I think 
Senator Daines' point, the effect of regulations on small 
businesseses in states is a big one issue that you're all aware 
of. I think you all know that in Alaska, those issues are 
magnified because a lot of our communities don't even have 
roads that connect each other, let alone telecommunications. So 
I appreciate the focus of all the Commissioners on these 
issues.
    Mr. Chairman, Commissioner Rosenworcel, I know that you've 
been up. Have the other commissioners been to Alaska? Can I get 
just a----
    [Show of hands.]
    Senator Sullivan. Great. Good. Well, we'd love to have you 
back. I really appreciate--seriously, you can talk about, you 
know, distance. Senator Wicker was going through the list of 
rural states in his questions. He forgot us, and I was kind of 
thinking that we have boroughs in Alaska that are bigger than 
Mississippi.
    [Laughter.]
    Senator Sullivan. No offense to Senator Wicker. Anyway, let 
me follow up on a couple of Alaska-specific questions, and then 
I want to try and, address a couple of national issues.
    Mr. Chairman, your visit spurred our wireline and wireless 
carriers to work together with the FCC to address some of the 
unique challenges that we have in Alaska. And, as you know, 
these carriers are making progress on expanded wired and 
wireless broadband capabilities, but they need certainty to 
continue these very costly deployments. As you know, some of 
these deployments are very costly.
    As you and I have talked about recently, I am disappointed 
that you're not considering the comprehensive universal service 
plan proposed by Alaska's carriers, to what we're now referring 
to as the Alaska Plan, at the same time as the national rate of 
return order. Can you assure me today--and I'd like this from 
all the Commissioners, if possible--that the Commission will 
act on the Alaska Plan for rural wireline and wireless services 
within 60 days of adopting the national rate of return order, 
just so we have some certainty on that issue?
    Chairman Wheeler. Thank you, Senator. I've got it on the 
schedule for the second quarter. I hope that we adopt the rate 
of return order yet this month. I'm trying to do quick math--
that moves us into early second quarter. It may be more like 
mid second quarter, but I intend to have this before my 
colleagues in the second quarter.
    Senator Sullivan. So no later than second quarter?
    Chairman Wheeler. Yes, sir.
    Senator Sullivan. Can I get that from all the 
Commissioners? It's a very important issue for my constituents.
    Commissioner Rosenworcel. Yes, and I'll also point out that 
in the current rate of return decision we have before us, I've 
actually asked for the Alaska issues to be addressed right now.
    Senator Sullivan. Well, I appreciate that.
    Commissioner Rosenworcel. Recognizing there's rural and 
then rural Alaska, which are two different things.
    Senator Sullivan. Well, that would be ideal. But if we 
can--and you and I have talked about it, Mr. Chairman--that 
would be the best kind of second order effect, if we can get a 
no-kidding, second quarter, you know, drop-dead date in terms 
of certainty is very important.
    Chairman Wheeler. No kidding, yes, sir.
    Senator Sullivan. Right. Can I get that from all the other 
Commissioners? Just a yes or no on that, as to your commitment.
    Commissioner Pai. Yes.
    Commissioner O'Rielly. Yes, absolutely.
    Commissioner Clyburn. Absolutely.
    Senator Sullivan. Great. Thank you. Going back to certainty 
again, Senator Peters talked about the Connect America Fund, 
Phase II. And, again, although that deployment started for 
Phase II last September, the FCC has yet to publish an order 
for Alaska's price cap carrier who submitted a detailed plan 
over a year ago for using CAF 09II support to deploy broadband 
to the thousands of unserved Alaskan households there.
    Can you provide me a timeline when you think the Commission 
is going to complete its work setting up the terms of a CAF 
Phase II for the Alaska price cap carrier?
    Chairman Wheeler. Yes, sir. In my thinking, the two are 
rolled together, and these are both second quarter.
    Senator Sullivan. Is that--again, I don't need to get it 
from everybody, but if the Chairman agrees that that's a 
timeline, I think that's important.
    Commissioner Rosenworcel. Yes.
    Commissioner Pai. Yes.
    Commissioner O'Rielly. Yes.
    Senator Sullivan. Great. Let me ask just a--this is kind of 
broadening out.
    Commissioner O'Rielly, I know you've been focused on a 
couple of the issues. I just want to ask in a final question--
but, really, any of the Commissioners can mention it.
    Commissioner Rosenworcel, you mentioned this, actually, in 
your testimony.
    But the issue of streamlining the infrastructure permitting 
process clearly impacts Alaska, particularly on Federal lands, 
of which we have--you know, over 60 percent of our lands are 
Federal. But it's really important, as you know, to encourage 
and deploy new technologies, to not burden them.
    Can you give us a sense--first of all, is there consensus 
on the Commission that this is something that we need to do? It 
seems to me it's kind of a no-brainer, and yet the challenges 
of this broader infrastructure deployment issue--we would be 
very, very interested in your suggestions on how to streamline 
the permitting process so we can make sure that--you mentioned 
earlier in your testimony, that the infrastructure on the 
ground gets built in time so the technology is not moving way 
past it.
    So I welcome any thoughts that you might have on this 
broader issue, which I think is not just an issue for Alaska. I 
think it's an issue for the whole country, particularly for 
rural states, who are represented on this committee, and have a 
lot of Federal land as well.
    Commissioner O'Rielly. Yes, Senator. So I have put forward 
a number of different ideas I think will be helpful to 
facilitate infrastructure building and deployment going 
forward. I will just highlight with you a number of things we 
can do at the Commission and are doing, and we are pushing the 
envelope and the legislation that this Congress has approved in 
the past.
    But I would suggest to you that the flip side of this is it 
may require more legislation and it may require more 
preemption, which I know is not a great word to use for folks 
in the Senate. But it is something that is probably going to be 
necessary. When you're talking about small cells 
identification, it is work that's going to be necessary.
    And we've had localities--I referenced one in the speech in 
Florida--where they put up a monopole, and a couple of weeks 
later they made the company pull the monopole down. So, I mean, 
either you want broadband or you don't. We all agree that we 
want it, so we're going to have to figure out to get the 
infrastructure out there, and that sometimes displaces locality 
decisions.
    Senator Sullivan. Commissioner Rosenworcel, on the issue of 
Federal lands, you mentioned----
    Commissioner Rosenworcel. Yes, Federal lands are one-third 
of our national real estate, and they are some of the slowest 
places to deploy broadband. I know in the Middle Class Tax 
Relief and Job Creation Act, this committee had a section that 
required Federal authorities to have a master contract for 
deploying infrastructure on Federal facilities.
    I think the next step, if I could ask this committee to 
take it, would be to actually require Federal authorities to 
use that contract. It's the missing piece. And were we able to 
do that, we would be able to harmonize those contracts on one-
third of our national real estate.
    Senator Sullivan. Then you don't have the preemption issue, 
obviously.
    Commissioner Rosenworcel. Exactly.
    Senator Sullivan. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Sullivan.
    Senator Blumenthal?

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

    Senator Blumenthal. Thank you, Mr. Chairman.
    Everybody on this panel has provided very distinguished 
service to our country. Thank you for that service and for 
being here today. All of you, I know, are familiar with the 
abuse of cramming, which is the unscrupulous practice of 
wireless carriers allowing third parties to add charges on 
monthly bills without authorization or even consent or 
knowledge sometimes of consumers.
    Commissioner Rosenworcel, I want to thank you for your 
visits to Connecticut, your native state, and Hartford to join 
me several times to discuss this abuse and to announce refunds 
that are going back to consumers as a result of the 
Commission's good work.
    At the FCC hearing about a year ago, I raised the mobile 
cramming issue and asked several of you if you would commit to 
initiating an FCC rulemaking to apply the conditions of these 
consent decrees to the whole market, which I think are very 
important to protecting consumers long after the consent 
decrees expire. The consent decrees are good, but all carriers 
should be required to protect consumers from deceitful 
practices and stop anyone from profiting from them.
    So I'd like to ask each of you again to open a rulemaking 
on wireless cramming and ask whether you will commit 
individually to that rulemaking.
    Commissioner Clyburn?
    Commissioner Clyburn. Yes, I would be open to any framework 
that will allow customers to gain control and for us to have 
more tools at our disposal to protect them. It's a very serious 
issue, as you mentioned. So yes.
    Commissioner O'Rielly. I am in favor of more specific rules 
on cramming rather than relying on other provisions in the act, 
and I've raised that in a number of different items. I believe 
it's very important to have--we've had the opportunity and just 
haven't done it.
    Commissioner Pai. Senator, to be clear, the power to 
initiate the rulemaking resides first and foremost with the 
Chairman. So if and when he presents a proposal for us, I'll 
certainly give it the careful scrutiny that it deserves. This 
is a critical issue.
    Commissioner Rosenworcel. Yes. Thank you for giving me the 
opportunity to appear with you to discuss this back in my home 
state. Cramming is fraud. It's digital age pick-pocketing, and 
it's good that we've had consent decrees with carriers that 
have allowed it to occur. But it would be a lot better to 
prevent it from occurring in the first place.
    Senator Blumenthal. Mr. Chairman?
    Chairman Wheeler. Yes.
    Senator Blumenthal. If I may ask you, Chairman Wheeler, is 
there a factor that's holding back the beginning of rulemaking?
    Chairman Wheeler. Not really, sir. I mean, this is, 
frankly, a resources and timing issue. I would point out, as I 
know you are well aware, you know, that we took an enforcement 
action on this against four major carriers for about a quarter 
of a billion dollars, most of which went into consumers' 
pockets, not into any treasury anyplace. So we are vigilant on 
the issue.
    And the interesting thing is that you can do that absent a 
rule because the statute is clear. But if there is a need for 
rules as well, then we ought to have them.
    Senator Blumenthal. And I'm well aware of those enforcement 
actions and commend you for that. That was the reason for the 
various meetings that Commissioner Rosenworcel and I had, 
simply to make consumers aware that they need to claim the 
refund.
    In the short time I have left, I want to talk about the 
Enforcement Bureau, which I think is a critical part of the 
FCC. As a former prosecutor, I know that folks caught breaking 
the law aren't always happy about it, and they make various 
claims, like lack of due process, so I'm not surprised to see 
that happening in objections to the Enforcement Bureau catching 
people who break the law. I think in many instances it's really 
that simple.
    I hear from constituents all the time about unexpected 
increases in their monthly cable bills to never-ending robo-
calls that harass them, even thought they're on the Do-Not-Call 
list, to all kinds of other abuses and violations of law that 
the Enforcement Bureau pursues.
    So I want to commend the Enforcement Bureau for its good 
work and say to you--just ask you what may appear to be a 
rhetorical question. But, just for the record, in terms of due 
process, the Enforcement Bureau now provides for companies to 
respond or challenge a forfeiture, does it not?
    Chairman Wheeler. Yes, sir.
    Senator Blumenthal. And there are opportunities for 
companies to appeal a Commission decision to the Federal court 
system, are there not?
    Chairman Wheeler. Yes, sir.
    Senator Blumenthal. And companies frequently and abundantly 
take advantage of that right.
    Chairman Wheeler. Yes, sir.
    Senator Blumenthal. And in terms of resources, could the 
Enforcement Bureau benefit from additional resources?
    Chairman Wheeler. Yes, sir.
    Senator Blumenthal. Thank you.
    Chairman Wheeler. Can I just add one thing, though?
    Senator Blumenthal. Of course.
    Chairman Wheeler. Everybody thinks about enforcement in 
terms of penalties. The fact of the matter is that if you have 
done something wrong, there should be logical consequences. But 
we're also protecting those who do things right. The most anti-
competitive activity that exists in the market today is when 
your competition cheats.
    So this is not just that you need to have a logical 
consequence for your bad actions. This is how do we make sure 
that the good guys aren't being penalized by the actions of the 
bad guys. So enforcement is a very important pro-competitive 
tool.
    Senator Blumenthal. And I think you have just made one of 
the central points about consumer protection, because the good 
guys are the vast, vast majority of businesses. What these 
rules do--laws, regulations, rules--is essentially protect good 
guys in business from the unfair competition of people who 
break the law to try to cut corners and, thereby, cut costs and 
undercut their competition.
    So in a certain sense--and I made this point about 
antitrust enforcement, about consumer protection enforcement. 
It is in a long-term sense pro-business, pro-jobs, because it 
enables people who play by the rules to have a level playing 
field. And I think that, of course, wise enforcement depends on 
wise enforcers and the Enforcement Bureau having enough 
resources to make good decisions about how to enforce the law. 
But I think your central point is very well taken. Thank you.
    The Chairman. Thank you, Senator Blumenthal.
    I think Senator Nelson has a question.
    Senator Nelson. Just a quick question. Given the fact that 
the most important call that a person may make is 911, tell me 
what your plan is on the next generation of 911 and what you 
think we should do.
    Chairman Wheeler. Thank you, Senator. I think we have taken 
the 911 issue about as far as our authority takes us, and it 
now comes to this Congress. We have just sent to this committee 
the recommendations of a year-long task force on next-
generation 911. It is my understanding that the 911 providers 
themselves are in the process of specifically turning that into 
here's what is needed in terms of specific legislation.
    But I fear that this is something--I was involved in the 
1999 ``911 Act'' that made it a national number. I think it's 
going to take once again Congress stepping up with a national 
policy on 911.
    The Chairman. Thank you, Senator Nelson.
    The only thing standing between you all now and a restroom 
break is Senator Markey and myself.
    So, Senator Markey, do you have some followup questions?
    Senator Markey. I like the sequencing, and then it's just 
you.
    The Chairman. That's right.
    Senator Markey. So I like that.
    [Laughter.]
    Senator Markey. Thank you, Mr. Chairman.
    On February 26 of last year, we opened the next chapter in 
the history of American innovation, and that's because on 
February 26, what will always be known as Internet Freedom day, 
the FCC stood up for Net Neutrality and reclassified broadband 
service under Title II of the Communications Act. It was a 
major victory for consumers, for our economy, and for 
democracy, because that day was a day when the FCC stood up for 
the best ideas, not merely the best funded ideas, and we thank 
you for being on the right side of history.
    So what happened in 2015, then, in the United States as the 
FCC promulgated those Net Neutrality rules? Well, nearly 68 
percent of all venture capital funds invested in the United 
States went toward Internet-specific and software companies in 
2015. So congratulations, FCC.
    You created this engine of innovation and capital flow into 
these new companies, the smart companies, the innovative 
companies, and it's clear that the FCC got this right. There's 
a lot of other places you can put venture capital money, but 
when 68 percent of it, following your decision, goes toward 
that sector, then we've got what young people in colleges and 
graduate schools all across America want to do. They want to 
continue to innovate, and what you have done is make it a lot 
easier for them to do so.
    So what I'd like to do, then, Mr. Chairman, if I could, is 
just ask you a couple of questions. The first is: Is it unusual 
for an independent agency to communicate with the White House?
    Chairman Wheeler. No, sir.
    Senator Markey. Is it typical for an independent agency to 
communicate with the White House?
    Chairman Wheeler. Communicate with the White House, 
Congress, and everybody.
    Senator Markey. Have other presidents weighed in on FCC 
rulemaking since the FCC's founding in 1934?
    Chairman Wheeler. Yes, sir.
    Senator Markey. Do you have any lists of those that come to 
your mind that you think might have acted during that time?
    Chairman Wheeler. Well, I happen to remember one time when 
President Reagan called Chairman Fowler to the Oval Office, and 
I remember that story, because I happened to be around at that 
point in time.
    Senator Markey. I remember that story very well, and I 
don't begrudge President Reagan wanting to do that. But I do 
remember that extremely well. I didn't agree with Chairman 
Fowler on much, but I did appreciate the fact that the 
president can talk to someone serving during his 
administration.
    Did the FCC follow the process used by both Democrat and 
Republican Commissions when crafting the Open Internet Order?
    Chairman Wheeler. The process has remained unchanged, 
Senator.
    Senator Markey. So I want to make clear the FCC has done 
precisely what Congress intended the Commission to do, classify 
broadband Internet access service according to its best 
understanding of the technology of that day and how consumers 
use that technology. I am confident that that is how you are 
proceeding, and I thank you for that. I thank the Commission 
for that.
    I'm also pleased with the recent steps that the FCC has 
taken to increase consumer privacy protections. As part of the 
Commission's correct decision last year to reclassify broadband 
under Title II, the Commission wisely chose to apply Section 
222 to broadband, extending the duty to protect the privacy of 
information that Internet service providers collect about their 
customers because of the unique carrier-customer relationship. 
I believe an ISP has a duty to protect the privacy of consumers 
who use the company's wired and wireless infrastructure to 
connect to the world.
    Senators Booker and Blumenthal and I have written to the 
Commission urging the Commission to initiate a rulemaking to 
protect the privacy of consumers who use the broadband. And I 
do believe you should have a comprehensive definition of 
customer proprietary network information, ensure transparency, 
require consumer consent if the information is going to be 
reused so their privacy is protected, and protect consumers' 
information by requiring ISPs to implement strong data security 
measures.
    Can you give us some idea, Mr. Chairman, when you plan on 
moving forward on rulemaking on broadband privacy?
    Chairman Wheeler. I hope it's very soon, and that includes 
this month.
    Senator Markey. That includes this month. Excellent. I also 
sent you with other Senators a letter on the proposed 
acquisition of Time Warner Cable and Bright House Networks by 
Charter Communications. My hope would be that the Commission 
would look at it, ensuring that the guiding principles are 
competition, competition, competition, as you have said 
repeatedly, Mr. Chairman, and that you ensure that it gets the 
kind of review that ensures that the proper protections are in 
place for the competitive marketplace, which we need.
    Chairman Wheeler. Thank you, Senator.
    Senator Markey. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Markey.
    I have just a couple of final points I'd like to make. One 
is I want to say, as I mentioned earlier, that this committee 
will be marking up the bipartisan MOBILE NOW Act tomorrow, 
which will help advance wireless innovation and deployment. A 
key provision of Ranking Member Nelson's and my bill focuses on 
the high frequency millimeter wave bands that are going to be 
critical for next-generation 5G wireless services.
    So our legislation intentionally builds upon the good work 
that the Commission is doing in its Spectrum Frontiers 
proceeding. So I was glad to hear earlier today that Chairman 
Wheeler expects this order by summer.
    Chairman Wheeler, you've been quoted as saying that in the 
year that you have left in this job, every time that you appear 
before the Congress, the number one item that you will talk 
about is the absolute necessity of Congress dealing with the 
issues in next-generation 911. That's a quote. And, actually, 
that was your prepared testimony. I think it follows up on that 
intent.
    Chairman Wheeler. Yes, sir.
    The Chairman. We've also recently seen an increase in 
organized stakeholder advocacy on this issue, which echoes your 
concerns. Will you be receiving--let me rephrase that. You will 
be receiving questions from the Commerce Committee in the 
coming days as we look more deeply into this issue. So the 
question is: Do I have your commitment that you will cooperate 
with this committee by responding fully and in a timely manner?
    Chairman Wheeler. You bet. Yes, sir.
    The Chairman. Very good. Thank you.
    Senator Cantwell was on her way, racing back over here. But 
I don't think she's going to make it.
    So thank you all very much for your time today. I know it's 
been a lengthy hearing, but a lot of our members, as you can 
see, have great interest in the issues before the Commission.
    Because the Committee may take up legislation to 
reauthorize the Commission in the very near future, the hearing 
record will remain open through close of business this Friday. 
During this time, Senators are asked to submit any questions 
for the record. Upon receipt, the witnesses are requested to 
submit their written answers to the Committee by Friday, March 
11.
    This concludes the hearing. Thank you all. We're adjourned.
    [Whereupon, at 12:42 p.m., the hearing was adjourned.]

                            A P P E N D I X

     Response to Written Question Submitted by Hon. John Thune to 
                            Hon. Tom Wheeler
    Question 1. Following the reclassification of broadband Internet 
access service as a Title II public utility, Chairman Wheeler indicated 
that the FCC will propose new privacy regulations. The Federal Trade 
Commission (FTC) already has extensive experience in protecting 
consumer privacy, and consumers and business already have experience in 
applying the FTC's privacy rules and precedents; the Commission has 
virtually no such experience beyond the very narrow confines of rules 
implementing Sec. 222. Why would the Commission create a new, likely 
inconsistent set of rules rather than adopting the FTC's privacy 
protections? Given that the Commission's rules will only apply to BIAS 
providers, isn't there a significant likelihood that functionally 
identical activities on a smartphone will be governed by completely 
different rules based upon who is providing the service?
    Answer. The Federal Communications Commission (Commission) has a 
long history of protecting the privacy of consumers when using 
communications networks. Throughout the 1980s and 1990s, the Commission 
set guidelines concerning incumbent telephone companies' use and 
sharing of customer information.\1\ Then, in 1996, Congress enacted 
Section 222 of the Communications Act providing statutory protections 
to the privacy of the data that telecommunications carriers collect 
from their customers.\2\ The Commission adopted implementing rules for 
Section 222 and as industry practices and consumer expectations have 
changed it has updated those rules. Today, the Commission is tasked by 
Congress with protecting the private information collected by 
telecommunications, cable, and satellite companies in Sections 222,\3\ 
631,\4\ and 338 \5\ of the Communications Act. Consequently, the 
Commission has significant experience in protecting the privacy of 
consumers.
---------------------------------------------------------------------------
    \1\ See Amendment of Section 64.702 of the Commission's Rules and 
Regulations, Final Order, 77 FCC 2d 384 (1980) (Computer II), recon., 
84 FCC 2d 50 (1980), further recon., 88 FCC 2d 512 (1981), aff'd sub 
nom. Computer and Commc'n Indus. Ass'n v. FCC, 693 F.2d 198 (D.C. Cir. 
1982), cert. denied, 461 U.S. 938 (1983); Amendment of Section 64.702 
of the Commission's Rules and Regulations, Phase I, 104 FCC 2d 958 
(1986); Application of Open Network Architecture and Nondiscrimination 
Safeguards to GTE Corp., Report and Order, 9 FCC Rcd 4922, 4944-45, 
para. 45 (1994); Application of Open Network Architecture and 
Nondiscrimination Safeguards to GTE Corp., Memorandum Opinion and 
Order, 11 FCC Rcd 1388, 1419-25, paras. 73-86 (1995); Furnishing of 
Customer Premises Equipment by Bell Operating Telephone Companies and 
the Independent Telephone Companies, Report and Order, 2 FCC Rcd 143 
(1987), recon. on other grounds, 3 FCC Rcd 22 (1987); aff'd, Ill. Bell 
Tel. Co. v. FCC, 883 F.2d 104 (D.C. Cir. 1989).
    \2\ 47 U.S.C. Sec. 222.
    \3\ 47 U.S.C. Sec. 222.
    \4\ 47 U.S.C. Sec. 551.
    \5\ 47 U.S.C. Sec. 338(i).
---------------------------------------------------------------------------
    When reclassifying broadband as a telecommunications service, the 
Commission chose not to forbear from Section 222. This decision was 
made in recognition of the need to ensure broadband customers have 
privacy protections. The Notice of Proposed Rulemaking (NPRM) that I 
circulated begins the process of adopting rules under Section 222 for 
broadband customers.
    The NPRM focuses on transparency, choice, and data security. This 
approach is consistent with the Commission's history of protecting 
privacy, the FTC's guidance on privacy best practices as well as its 
law-enforcement work, and various sector-specific statutory approaches. 
The NPRM is tailored to the particular circumstances that consumers 
face when they use broadband networks and with an understanding of the 
particular nature and technologies underlying those networks.
    The FTC has jurisdiction over edge providers. The NPRM, however, is 
focused solely on broadband networks, which are not the same as edge 
providers in all relevant respects. For example, consumers can move 
instantaneously to a different website, search engine, or app, but once 
they sign up for broadband service, consumers can scarcely avoid the 
network for which they are paying a monthly fee. As the FTC has 
explained, Internet service providers are ``in a position to develop 
highly detailed and comprehensive profiles of their customers--and to 
do so in a manner that may be completely invisible.'' \6\ Broadband 
providers thus have the ability to capture a breadth of data that an 
individual streaming video provider, search engine, or e-commerce site 
does not.
---------------------------------------------------------------------------
    \6\ Federal Trade Commission, Protecting Consumer Privacy in an Era 
of Rapid Change: Recommendations for Businesses and Policymakers at 56 
(2012), https://www.ftc.gov/sites/default/files/documents/reports/
federal-trade-commission-report-protecting-consumer-privacy-era-rapid-
change-recommendations/120326privacyreport.pdf (2012 FTC Privacy 
Report).
---------------------------------------------------------------------------
    As the expert agency on communications policy issues, the 
Commission is well positioned to ensure consumers have the right level 
of control over the information they share with their broadband 
provider. But, we also recognize that we have complementary authority 
to the FTC in this space and the Commission is determined to continue 
its close working relationship with the FTC. In fact, the Commission 
and the FTC recently entered into an updated consumer protection 
Memorandum of Understanding (MOU). In the MOU each agency recognizes 
the others' expertise and agreed to coordinate and consult on areas of 
mutual interest.\7\
---------------------------------------------------------------------------
    \7\ See FCC-FTC Consumer Protection Memorandum of Understanding 
(2015), https://apps.fcc.gov/edocs_public/attachmatch/DOC-336405A1.pdf.

    Question 2. I understand that you are close to finalizing action on 
an order that would address the standalone broadband issue that many in 
Congress have written to you about over the past several years and also 
adopt some new limits and other measures related to universal service 
support for rate of return providers. Do you commit to work quickly and 
collaboratively with this committee and with affected stakeholders to 
the extent any adverse or unintended consequences arise out of the 
reforms?
    Answer. Last year, I pledged to you and other Members of this 
Committee that we would bring forth a solution for the next phase of 
universal service modernization: reforming support for ``rate-of-
return'' carriers. As the result of months of collaborative efforts by 
Commissioners Clyburn and O'Rielly and their staffs, we recently 
adopted a bipartisan Order to fulfill that promise.
    The Order sets forth a package of reforms to address rate-of-return 
issues that are fundamentally intertwined--the need to modernize the 
program to provide support for stand-alone broadband service; the need 
to improve incentives for broadband investment to connect unserved 
rural Americans; and the need to strengthen the rate-of-return system 
to provide certainty and stability for years to come. The Order will 
help to ensure that Federal universal service funds are spent wisely, 
and for their intended purpose, and takes concrete steps to bring 
broadband to rural Americans who remain unserved today.
    This bipartisan effort was aided by the rate-of-return carriers 
themselves. Working through their trade associations, they engaged with 
Commissioner Clyburn, Commissioner O'Rielly and me in a productive 
manner. We are pleased that NTCA and USTA have supported the result. I 
look forward to working with you, the Committee staff, and all 
stakeholders as we implement these reforms and continue modernizing the 
universal service high-cost program--as well as other components of the 
Universal Service Fund--to ensure that all Americans have access to 
robust voice and broadband services.

    Question 3. Ensuring that rural and urban consumers have access to 
reasonably comparable services at reasonably comparable rates is a 
fundamental statutory principle of universal service. Are you confident 
that the standalone broadband solution you are poised to adopt will do 
that--specifically, will it allow rural consumers to get standalone 
broadband at rates reasonably comparable to their urban counterparts? 
If not, what more do you think the FCC will need do to ensure such 
comparability?
    Answer. In the April 2014 Connect America FNPRM, the Commission 
unanimously articulated four general principles for reform to address 
the stand alone broadband issue. Specifically, these four principles 
were that new rules should (1) provide support within the established 
budget for areas served by rate-of-return carriers; (2) distribute 
support equitably and efficiently, so that all rate-of-return carriers 
have the opportunity to extend broadband service where it is cost-
effective to do so; (3) support broadband-capable networks in a manner 
that is forward looking; and (4) ensure no double-recovery of costs. I 
believe the package of reforms in the recently adopted Order will 
resolve the stand-alone broadband issue and update the rate-of-return 
program consistent with those principles.

    Question 4. I have heard concerns that the methodology used in the 
2014 order to determine the local rate floor for voice service has led 
to rates in some rural areas, including parts of South Dakota, that are 
not reasonably comparable to those services provided in urban areas. 
Given this concern, when do you plan to act on the petition for 
reconsideration filed by several rural associations regarding the rate 
floor methodology? Do any other Commissioners have thoughts regarding 
this matter?
    Answer. In the 2011 USF/ICC Transformation Order, the Commission 
unanimously adopted reforms to make universal service a fairer system 
for all consumers and businesses. The Order includes a phase-out of 
excessive subsidies for basic phone service, which allowed some phone 
companies to charge their customers as little as $5 a month while 
average urban, suburban, and even some other rural consumers, were 
paying over three times that amount. The Commission determined it was 
inappropriate to use limited Federal high-cost support to subsidize 
local rates beyond what is necessary to ensure reasonable comparability 
between urban and suburban rates and rural rates, as required by 
Congress. The reforms gradually eliminate these excessive subsidies to 
level the playing field for all consumers and contain the cost of the 
program, which is funded by universal service fees paid by consumers. 
Commission staff is currently reviewing the record in response to the 
Application for Review you reference.

    Question 5. Last July, the FCC released an omnibus declaratory 
ruling on the Telephone Consumer Protection Act (TCPA). TCPA litigation 
has increased dramatically in the last decade. What considerations did 
the Commission give to the impact its ruling would have on businesses, 
both large and small, that need to reach their customers for legitimate 
business purposes?
    Answer. The Commission gave full consideration to the impact its 
ruling would have on all petitioners, including businesses of all 
sizes. Consistent with our rules, the Commission sought public comment 
on all of the petitions addressed in the June 2015 Declaratory Ruling. 
Based on this record, the Commission granted relief to some businesses, 
including a petitioner who provided time-sensitive healthcare robocall 
alerts. Where the Commission was compelled by the statute and its own 
precedent to deny relief, the ruling nevertheless provided clarity and 
a roadmap for compliance.

    Question 6. Many small businesses seek to improve their efficiency 
and customer relationships by providing information to their customers 
through the use of modern dialing technologies. The FCC's recent 
interpretation of the term ``autodialer'' in the TCPA declaratory 
ruling, however, could sweep in any number of modern dialing 
technologies. Other than using a rotary phone, what other technologies 
can small businesses feel comfortable using without exposing themselves 
to TCPA litigation risk?
    Answer. The Commission's June 2015 Declaratory Ruling provides a 
roadmap for small businesses who wish to comply with the TCPA.
    The June 2015 Declaratory Ruling did not offer a new interpretation 
of the term ``autodialer.'' Instead, the ruling merely applied existing 
precedent regarding the TCPA's autodialer definition to address 
specific requests for clarification. Moreover, while the Commission was 
not asked to address specific types of equipment, the Commission 
provided additional clarity regarding relevant factors in determining 
what equipment constitutes an autodialer, including the amount of 
effort it would take to modify a piece of equipment to have the 
capability to dial random or sequential numbers.

    Question 7. By establishing liability after a mere one-call 
exception, the Commission's ruling creates a perverse incentive for 
incorrectly-called parties to allow or even encourage incorrect calls 
to continue, rather than notify the calling party of the error. These 
continuing incorrect calls thus become potential violations and the 
basis for monetary penalties sought through litigation. What will you 
do to repair this perverse incentive?
    Aswer. The Commission does allow robocallers an opportunity to 
remain free of TCPA liability in the event of an incorrectly-called 
party. Specifically, the June 2015 Declaratory Ruling affords 
robocallers an opportunity to discover a reassignment after one 
incorrect call if best practices, including checking reassigned-numbers 
databases, do not reveal a reassignment. The Commission's decision on 
this point provides callers greater protection from liability than some 
Federal courts have held, which is that all robocalls to a consumer 
other than the subscriber are subject to TCPA liability under the 
statute as written by Congress. Moreover, as the Commission stated in 
its declaratory ruling, the TCPA requires that robocallers obtain the 
subscriber's consent and places no obligation on consumers who may have 
inherited a phone number to notify the robocaller of the reassignment.

    Question 8. Has the Commission considered providing a safe harbor 
for a calling party that reasonably relies on available customer phone 
number records to verify the accuracy of a customer's phone number?
    Answer. The Commission recently considered providing such a safe 
harbor, but ultimately declined to adopt one. Specifically, the 
Commission concluded that, in light of the TCPA's statutory language as 
drafted by Congress and relevant Federal case law, robocallers must 
obtain the subscriber's consent and a robocaller cannot avoid liability 
for calling the wrong consumer by arguing they intended to call someone 
else. As the Commission noted in its ruling, several tools exist for 
robocallers to detect when a number changes hands. In addition, our 
ruling grants robocallers a one-call further opportunity to discover a 
reassignment in the event of an incorrectly-called party. The 
Commission will continue to encourage further development of best 
practices so that businesses trying to reach their customers do not 
make unwanted robocalls.

    Question 9. The pay TV set-top box NPRM proposes to expand the 
scope of the term ``navigation device'' to include ``software or 
hardware performing the functions traditionally performed in hardware 
navigation devices.'' On what theory does the Commission base this 
interpretation and expansion of the statutory term's scope to include 
software? Does software that is not integral to the operation of a 
navigation device fall within the scope of Section 629?
    Answer. The Commission's interpretation of ``navigation device'' is 
based upon a number of sound legal theories. As explained in the NPRM, 
``[w]e believe that when Congress adopted Section 629, it intended the 
term to include software because set-top boxes have run software since 
before 1996.'' NPRM at n.65. The NPRM also notes that ``Congress 
recognized this in the STELAR, which called for a study of downloadable 
software approaches to security issues previously performed in 
hardware.'' NPRM at para. 22. Moreover, as I stated in the hearing, 
everything in the world is moving toward software, and in a software 
world, we cannot consider the kind of equipment that the statute talks 
about and not consider software. Finally, we are in the process of 
developing a record on this and other issues, and I look forward to the 
record that develops in response to this issue.

    Question 10. How does the NPRM propose or contemplate preventing 
third party devices or applications from adding unapproved or 
additional advertising alongside MVPD service content? How does the 
NPRM propose to protect and secure interactive MVPD programming and 
services when accessed through third party devices or applications? How 
does the NPRM propose to enforce such protection and security measures?
    Answer. Today, the Commission is not aware that such ads are a 
problem on third party devices, such as TiVo, Smart TVs, or when you 
access Netflix on a tablet. Nor do we have rules governing the 
contracts that advertisers enter into with these parties. Nevertheless, 
we seek comment on these issues and any actions we can take to mitigate 
such concerns, including through the proposed certification process as 
well as the extent to which copyright law may protect against these 
concerns.
    As for protecting secure interactive programming and services, the 
new proposed rules would create a framework for providing device 
manufacturers, software developers and others the information they need 
to introduce innovative new technologies, while at the same time 
maintaining strong security, copyright and consumer protections. Our 
NPRM proposes to let MVPDs choose the security system or systems that 
they wish to use to protect content. The content protection and 
security that the MVPD chooses would be enforced just as they are 
today--in the private marketplace consistent with contracts, copyright 
law, and the MVPD's power to revoke a compromised device's ability to 
receive service. The proposal, which is based on the way that content 
protection is administered today, states that to license the content 
protection that is necessary to decrypt multichannel video programming 
from a MVPD, the third party must certify that it will honor copy 
protection limits and prevent theft of service.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Roger F. Wicker to 
                            Hon. Tom Wheeler
    Question 1. Chairman Wheeler, I have heard from some of my 
constituents who are competitive carriers that changes in the Universal 
Service Fund have harmed the competitive landscape. Can you please 
provide me with an update on the implementation of the USF high-cost 
program/Connect America Fund?
    Answer. In 2011, the Commission voted unanimously to expand rural 
broadband access by modernizing the Universal Service Fund. The 
Commission took an inefficient program for delivering telephone service 
and created the Connect America Fund (CAF) to support expanded 
broadband connectivity in rural America. These reforms have already 
delivered significant benefits. Over the next five years, CAF is poised 
to invest $9 billion and leverage private investment to deliver 
broadband to 7.3 million rural Americans. In addition, universal 
service reforms have dramatically reduced waste within the program. 
Furthermore, last September, I circulated an Order for the 
consideration of my fellow Commissioners that would address the 
framework for the CAF Phase II competitive bidding process. In 
December, I circulated an updated draft Order that addressed concerns 
raised by other Commissioners' offices.
    Last year, I pledged to the Members of the Committee that we would 
bring forth a solution for the next phase of universal service 
modernization: reforming support for ``rate-of-return'' carriers. As 
the result of months of collaborative efforts by Commissioners Clyburn 
and O'Rielly and their staffs, the Commission recently adopted a 
bipartisan Order to fulfill that promise. The Order sets forth a 
package of reforms to address rate-of-return issues that are 
fundamentally intertwined--the need to modernize the program to provide 
support for stand-alone broadband service; the need to improve 
incentives for broadband investment to connect unserved rural 
Americans; and the need to strengthen the rate-of-return system to 
provide certainty and stability for years to come. The Order will help 
to ensure that Federal universal service funds are spent wisely, for 
their intended purpose, and takes concrete steps to bring broadband to 
the rural Americans who remain unserved today. In addition, a Further 
Notice included with the Order seeks comment on additional reforms that 
would further guard against waste.
    Notably, underlying all of these reforms to the high-cost program 
is the shared principle that we should limit the use of ratepayer funds 
to support service in an area that is served by an unsubsidized voice 
and broadband provider. Prior to making the Phase II offer of model-
based support to the price cap carriers, the Commission conducted a 
robust challenge process to refine the Commission's data on which areas 
of the country were already served by voice and broadband, and removed 
those areas from eligibility. Similarly, the rate-of-return reform 
order adopts a process to determine which rate-of-return areas are 
served by an unsubsidized competitor and reduce support for those 
areas.

    Question 1a. Have you done any studies on the impact of competition 
in unserved and underserved areas related to changes in the USF?
    Answer. Twice a year, the Commission collects deployment and 
subscription data from all broadband providers through its Form 477. 
This data informs both our universal service policies as well as our 
statutory mandate to regularly determine whether advanced 
telecommunications capability is being deployed to all Americans in a 
reasonable and timely fashion.

    Question 1b. Are there any other proceedings currently at the FCC 
which relate to promoting competition in rural areas?
    Answer. As mentioned above, I have circulated an Order that would 
address the framework for the CAF Phase II competitive bidding process. 
As currently drafted, this item would establish a process for companies 
to compete for funding to serve high-cost areas that lack broadband. 
Simply put, competition between providers means that finite universal 
service funding will be used efficiently to deliver the best possible 
solutions.

    Question 2. In your judgment, is existing wireless coverage at risk 
of being stalled or even reduced without continued USF support?
    Do you support a Mobility Fund Phase II that provides support for 
BOTH preserving existing service where it is not otherwise economically 
feasible as well as expanding mobile broadband to areas that are 
unserved?
    Answer. Wireless providers continue to build-out networks and 
expand coverage. However, unserved and underserved communities also 
continue to exist across the Nation. USF provides an important role in 
expanding wireless networks to those areas of the country.
    In 2011, the Commission proposed to provide ongoing financial 
support to promote mobile broadband and high quality voice services in 
areas where such services cannot be sustained or extended absent 
Federal support. In 2014, the Commission sought comment on how 
universal service funds should be targeted. This inquiry was in light 
of the substantial roll-out of 4G LTE by many of the country's mobile 
networks. The Commission proposed to retarget Mobility Fund Phase II 
support to preserve mobile service where it only exists today due to 
support from the Universal Service Fund and to extend 4G LTE service to 
areas where it does not exist.
    Commission staff is currently reviewing the record on this inquiry 
to consider possible next steps for a Mobility Fund Phase II.
                                 ______
                                 
      Response to Written Question Submitted by Hon. Roy Blunt to 
                            Hon. Tom Wheeler
    Question. Thank you for your immediate response following the 
hearing regarding my concerns with the timeliness of replies from the 
Commission to Members of the Senate, and your commitment to improve 
response times.
    In addition to timeliness of responses, what steps can you take to 
better account for the concerns raised by Members of the Senate 
regarding the policies pursued at the Commission?
    Answer. I support an open and transparent process at the Commission 
and I have encouraged my staff to work cooperatively to address the 
concerns of Members of the Senate regarding the FCC's policy decisions. 
I recognize that there will always be disagreements concerning the 
outcome of Commission votes with regard to various policy-based 
decisions. That is one reason why we add all comments from members of 
Congress to our hearing records--to ensure that we have adequately 
considered this information as we engage in the administrative 
rulemaking process.
    We also strictly adhere to the Administrative Procedure Act to make 
certain that all parties have an equal opportunity to comment as we 
engage in rulemakings. I am always available to members of this 
committee to personally discuss our work here, and I routinely take 
phone calls and answer a broad number of letters related to the 
Commission's work. I also have directed the Commission's staff to 
provide routine briefings and technical support to members and their 
staff.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Kelly Ayotte to 
                            Hon. Tom Wheeler
    Question 1. I am a strong supporter of the upcoming incentive 
auction and hope for the successful outcome that we all intended in 
passing the Spectrum Act. However, after speaking with broadcasters 
from New Hampshire, I have heard concerns that the broadcast relocation 
fund could ultimately prove insufficient to reimburse local TV stations 
the costs they incur as part of the repacking process.
    Do you have a plan in place should the $1.75 billion relocation 
fund fall short? Understandably, we will not precisely know the final 
numbers until the auction is complete, but how do you foresee the 
Commission responding if the funds prove to be insufficient?
    Answer. At this point, we have no reason to believe that the $1.75 
billion Broadcaster Relocation Fund will be insufficient to cover 
broadcasters' relocation costs. In order to ensure the sufficiency of 
the fund, we will optimize the final broadcaster channel assignments to 
minimize relocation costs. This optimization will: (1) maximize the 
number of stations assigned to their pre-auction channels; and (2) 
minimize reassignments of stations with high anticipated relocation 
costs, based on the most accurate information available. These steps, 
taken together, will help to ensure that the $1.75 billion 
Reimbursement Fund is sufficient to cover broadcasters' relocation 
costs and that the Fund is disbursed as fairly and efficiently as 
possible.
    Should the $1.75 billion be insufficient, I will notify Congress as 
soon as this becomes clear. The amount was set by the Spectrum Act and 
Congress would need to take action to change it.

    Question 2. While I look forward to the broadcast incentive auction 
that begins on March 29, I would like to further explore reimbursement 
concerns. I have a constituent who has built a wireless microphone 
business from the ground up. His business plays an important role in 
the vitality of his local community--whether it is for plays at the 
University of New Hampshire, productions at the Rochester Opera House, 
or even a speech by the President. This local business has established 
itself as a source for dependable wireless microphone equipment for 
nearly 20 years and is relied upon for its services in New Hampshire.
    My constituent's business was nearly bankrupted during the 2010 
auction of the 700 megahertz band, which necessitated replacing half of 
its equipment--costing approximately $30,000. After purchasing brand 
new equipment, he also has found that he is able to use it well after 
its life expectancy. Despite this investment, he faces the same dilemma 
again with the forthcoming auction.
    Has the Commission considered a solution that fairly reimburses 
wireless microphone providers and looks to replace equipment displaced 
from the band as an unintended consequence of the 600 megahertz 
auction?
    What can be done to ensure small businesses, such as those in the 
wireless microphone community, do not have to shutter their doors as a 
result of the spectrum auction?
    Answer. The Commission understands that wireless microphone 
operators provide an important service that many consumers rely upon. 
While the Spectrum Act does not provide the Commission with authority 
or funding to reimburse wireless microphone operators for the cost of 
any changes in equipment as a result of the auction, the Commission has 
adopted several orders to accommodate both licensed and unlicensed 
wireless microphones after the auction. In the 2014 Incentive Auction 
Report and Order, the Commission provided additional opportunities for 
wireless microphone operations in the spectrum that will continue to be 
allocated for broadcast television service after the auction and 
promised to explore additional opportunities that would accommodate 
wireless microphone operations over the long term. Last summer the 
Commission adopted rules to provide wireless microphones with access to 
the future 600 MHz guard bands and duplex gap (including exclusive 
access to a 4 megahertz portion for licensed use), enable greater use 
of the VHF channels, and provide for new opportunities for licensed 
wireless microphones to operate on a secondary basis in three 
additional bands outside of the TV bands.
    The Commission also has provided for a multi-year period, after the 
end of the auction, to help smooth the transition as wireless 
microphone operators obtain new equipment and move out of the 
repurposed 600 MHz band to other spectrum. These operators may continue 
to use the 600 MHz Band spectrum on a secondary basis until the end of 
the 39-month transition period. Together, these rules and policies 
establish clear protections and opportunities for wireless microphone 
operators to continue to provide their important service to consumers.
                                 ______
                                 
      Response to Written Question Submitted by Hon. Ted Cruz to 
                            Hon. Tom Wheeler
    Question. In the Open Internet Order, the Federal Communications 
Commission (FCC) revised the definition of ``public switched network'' 
to mean ``the network that . . . use[s] the North American Numbering 
Plan, or public IP addresses, in connection with the provision of 
switched services'' (See para. 391 (emphasis added)). Although the FCC 
disclaimed any intent to ``assert'' jurisdiction over the assignment or 
management of IP addresses by the Internet Numbers Registry System (see 
id. at note 1116), the FCC's decision to equate telephone numbers with 
IP addresses nonetheless gives the FCC statutory jurisdiction over IP 
addresses as a matter of law. Over 20 years ago the FCC concluded that 
Section 201 of the Communications Act gave it plenary jurisdiction over 
telephone numbers, because ``telephone numbers are an indispensable 
part'' of the duties that section 201 imposes on common carriers (See 
Administration of the North American Numbering Plan, Notice of Proposed 
Rulemaking, FCC 94-79,  8 (1994)). IP addresses are likewise an 
indispensable part of the duties the FCC imposed on ISPs under section 
201, including the duty to connect to ``all or substantially all 
Internet endpoints.''
    How can the FCC uphold the public interest requirements in section 
201 of the Act if it refuses to assert its statutory authority over an 
indispensable part of the public switched network?
    If the FCC believes regulation of IP numbers used to connect end 
points on the public switched telephone network is unnecessary, why 
hasn't it forborne from the regulation of telephone numbers?
    Answer. In the Open Internet Order, the Commission changed its own 
definition of the term ``public switched network'' in the context of 
Section 332 of the Communications Act, to include IP addresses as well 
as telephone numbers. The Commission concluded that ``[r]evising the 
definition of public switched network to include networks that use 
standardized addressing identifiers other than NANP numbers for routing 
of packets recognizes that today's broadband Internet access networks 
use their own unique addressing identifier, IP addresses . . .'' 
(Emphasis added) (See para. 391), but did not suggest that the 
Commission asserted authority over IP addresses, either pursuant to 
Section 201(a) or pursuant to Section 251(e) (the source of Commission 
authority over numbering issues pursuant to the Telecommunications Act 
of 1996). In fact, the Commission forebore from Section 251(e)--the 
provision that gives the Commission authority over telephone numbers. 
IP addressing--in contrast to telephone numbers--is already governed by 
IANA, (the Internet Assigned Numbers Authority), a department of ICANN, 
that is responsible for the global coordination of IP addressing, among 
other coordination functions.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Jerry Moran to 
                            Hon. Tom Wheeler
    Question 1. The FCC's FY17 budget request says an increase in 
auction funding is necessary ``to implement the requirements mandated 
by Congress in the Spectrum Pipeline Act of 2015.'' However, except for 
asking for a single report to Congress three years after enactment, the 
Spectrum Pipeline Act does not require any specific action of the FCC 
before 2022. Given that senior Commission staff have suggested that the 
Broadcast Incentive Auction will be complete by the end of the current 
Fiscal Year and you testified before the Committee on March 2 that it 
was unlikely that an auction emanating from the Spectrum Frontiers NPRM 
could be scheduled in 2017, why is increased FY17 funding necessary for 
the Commission's spectrum auction activities?
    Answer. Before 2013, our annual auction spending had been capped at 
$85 million for nine years. This amount allowed for no inflationary 
adjustments, no funds for improving the operational efficiencies or 
resiliency of our IT systems, and no money to study new projects to 
support auctions programming.
    The infusion of additional funds since 2013 has enabled us to raise 
over $42 billion for the Treasury in two major auctions, the H Block 
auction and the AWS-3 auction. These funds have also supported our 
efforts to develop and prepare for the first-ever Incentive Auction, 
which is slated to launch this month. The development and 
implementation of the Incentive Auction has required highly-skilled and 
technologically savvy FTEs and contractors with expertise across 
multiple disciplines, including cutting-edge economics and engineering. 
It also has involved the development of essential and resilient new IT 
systems.
    After the completion of the Incentive Auction, however, a 
significant post-auction transition process will remain. To ensure 
preservation of service for broadcast viewers and timely network 
deployment, we have been focused on post-auction planning for over a 
year. We have released of the draft relocation reimbursement form and a 
reimbursement cost catalog for transitioning broadcast stations, and we 
have already begun to pivot and to accelerate our planning for the 
post-auction transition. Like the auction, the transition will be a 
complex effort spanning several years. Therefore, we will continue to 
incur costs associated with the Incentive Auction into the next Fiscal 
Year and beyond. The money spent in this effort will be as critical to 
the success of the auction as the money spent developing and 
implementing the auction itself and will yield important dividends--
financially for the Treasury, and for industry growth supported by 
newly available commercial spectrum.
    The Bipartisan Budget Act of 2015 not only extended our auction 
authority but it mandated that we work with other agencies to identify 
and develop resources for a ``spectrum pipeline.'' In addition to the 
Incentive Auction and several other auctions on our planning list, we 
will be expending resources to support the core goals of the new 
legislation. To do so, we need to upgrade our traditional and aging 
auction IT systems--the ones that were not upgraded during the pre-2013 
years--for use into the next decade, and engage in a broad range of 
economic and engineering studies to ensure that the next generation of 
auctions are at least as successful as past auctions.

    Question 2. Could you please provide the specific plans and details 
on how the Commission intends to carry out and manage the repacking of 
broadcast television stations that will remain on the air? It is 
understood that these plans and details may vary depending on the 
amount of spectrum available, please explain how this will be taken 
into account and provide any studies or analysis undertaken.
    Answer. One of the Commission's primary goals is to allow stations 
sufficient time to move to their new channels in order to minimize 
disruptions of service to viewers. Commission staff is developing a 
transition schedule that will maximize the efficiency of this 
transition and minimize service disruptions. We have been working 
closely with broadcasters to get important input from the industry on 
planning a successful transition. We have also had discussions with 
representatives of the wireless industry, who obviously have a stake in 
an efficient transition process. We anticipate further interaction with 
all affected stakeholders as we develop and refine this transition 
plan.
    The Commission is also committed to establishing fair and efficient 
process for reimbursing broadcasters' relocation costs. As part of that 
process, the FCC commissioned the Widelity Report to more fully 
understand the types of costs that would be required, and the magnitude 
of those costs, to help make efficient use of the Broadcaster 
Relocation Fund. The Commission's Media Bureau adopted a catalog of 
expenses as guidance, which will serve as a means of facilitating the 
process of being reimbursed by setting forth categories of expenses. 
The Commission is also planning on engaging a reimbursement 
administrator to facilitate the disbursement of funds. It recently 
solicited proposals for this position and is currently evaluating those 
proposals.

    Question 3. At the hearing, you indicated that you want to make 
certain that rural stations are not at the end of the line when it 
comes to reimbursement or when it comes to trying to find a contractor 
to build a tower. Does this mean that the Commission is concerned that 
there are not sufficient funds or time available for the repacking 
process? What plans and mechanisms does the Commission have in place to 
deal with either of those circumstances?
    Answer. At this point, we have no reason to believe that the $1.75 
billion Broadcaster Relocation Fund will be insufficient to cover 
broadcasters' relocation costs. In order to ensure the sufficiency of 
the fund, we will optimize the final broadcaster channel assignments to 
minimize relocation costs. This optimization will: (1) maximize the 
number of stations assigned to their pre-auction channel; and (2) 
minimize reassignments of stations with high anticipated relocation 
costs, based on the most accurate information available. These steps, 
taken together, will help to ensure that the $1.75 billion 
Reimbursement Fund is sufficient to cover broadcasters' relocation 
costs and that the Fund is disbursed as fairly and efficiently as 
possible.
    We believe that a 39-month transition period is sufficient for 
stations to apply for a construction permit (3 months) and move to 
their new channels (during the 36-month construction period), while 
also enabling forward auction winners to get access to their newly 
acquired spectrum as quickly as possible, thus ensuring a successful 
incentive auction. The Commission will, of course, take into account 
how many stations actually need to be repacked, and the specific 
characteristics of each, in determining the repacking schedule. Staff 
is developing a transition schedule that will maximize the efficiency 
of this transition and minimize service disruptions.

    Question 4. It is my understanding that stations being repacked 
will be assigned specific dates by which they have to be operating on 
their new channels. How will dates be established? How will such dates 
take into account stations in adjacent markets to avoid interference to 
viewers that could occur if an adjacent market transitions at a 
different time, or the ``daisy chain'' as you referenced in your 
testimony?
    Answer. The Commission decided that having the flexibility to 
consider a variety of actors in establishing construction deadlines is 
critical to the success of the transition. We recognize that many 
different variables are at play that will impact when an individual 
station can successfully transition, including weather and seasonal 
issues, daisy chains and interference issues, and availability of 
equipment and crews. The Commission has been working closely with 
broadcasters to get important input from the industry on planning a 
successful transition, taking into account all of those different 
variables. We have also had discussions with representatives of the 
wireless industry, who obviously have a stake in an efficient 
transition process. We anticipate further interaction with all affected 
stakeholders as we develop and refine this transition plan.

    Question 5. What happens if a station through no fault of its own 
is delayed in making the change to its new repacked channel? Will the 
Commission delay the transition of stations in adjacent markets that 
could be impacted? How will the Commission keep stations informed of 
such delays? Will station costs associated with such delays be 
compensated?
    Answer. The Commission believes that a 39-month transition period 
is sufficient for stations to apply for a construction permit and move 
to their new channels. While we will, of course, take into account how 
many and which stations actually need to be repacked in determining the 
repacking schedule, we see no reason now to change or repeal the 39-
month deadline. Adopting a longer transition period would delay access 
by forward auction bidders to the spectrum they won in the auction. 
That in turn would depress forward-auction participation or the amounts 
that forward auction participants are willing to bid for the spectrum. 
The auction would clear less spectrum, and the Commission would return 
less money to the U.S. Treasury.
    The Commission has created a framework that gives stations every 
opportunity to remain on the air, even if time runs short due to 
unforeseen circumstances. To assist stations, the Commission will 
permit six-month extensions for stations that, for reasons beyond their 
control, cannot complete the modifications to their facilities during 
their construction period. Additionally, special temporary authority 
may be granted to operate on a new channel using a temporary facility 
while they complete their tower modifications. Eligible broadcasters 
can also request special temporary authority to operate on a channel in 
the TV band that is available because it was relinquished by a winning 
bidder in the auction. Furthermore, the Commission is taking 
appropriate measures to disburse funds as fairly an efficiently as 
possible to ensure the sufficiency of the Relocation Fund.

    Question 6. How will the Commission ensure that antennas, 
transmitters, and other equipment be available for those stations with 
the earliest conversion dates? If stations have to pay more for such 
equipment or for expedited delivery will those costs be covered?
    Answer. Commission staff is working with interested parties, 
including tower companies, equipment manufacturers, wireless carriers, 
and broadcasters to identify resources and encourage early planning by 
broadcasters that may be repacked or will voluntarily move to a 
different channel.
    Congress provided for $1.75 billion dollars in the Spectrum Act. To 
help ensure the Broadcaster Relocation Fund is sufficient to cover 
broadcasters' relocation costs, the FCC commissioned the Widelity 
Report to more fully understand the types of costs that would be 
required, and the magnitude of those costs, to help make efficient use 
of the Broadcaster Relocation Fund. The Commission's Media Bureau 
adopted a catalog of expenses as guidance, which will serve as a means 
of facilitating the process of being reimbursed by setting forth 
categories of expenses.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Ron Johnson to 
                            Hon. Tom Wheeler
    Question 1. What is the purpose of the cybersecurity ``assurance'' 
meetings that the FCC plans to conduct with companies?
    Answer. Effective cyber risk management procedures are crucial to 
maintain the reliability and resiliency of our networks. In 2014, 
following issuance of the NIST Cybersecurity Framework for assessing 
cyber risk management, the FCC challenged the communications industry 
to lead the way in creating a new framework to guide the relationship 
between the FCC and industry to best address cybersecurity challenges 
for this critical infrastructure sector, with the goal of individual 
companies proactively managing cyber risk. In response, a broad-based 
group of expert stakeholders, the Communications Security, Reliability 
and Interoperability Council (CSRIC), recommended a comprehensive plan 
for putting this new approach into action. One of the group's key 
recommendations was for individual companies to brief the FCC 
periodically on a voluntary and confidential basis about cyber risks 
and their approach to managing these risks. The Commission is now 
considering a Policy Statement, which, if adopted, would implement the 
CSRIC recommendation by outlining a process for holding these meetings.

    a. What do you expect to get out of these meetings?
    Answer. The voluntary meetings will enable the FCC to work with 
industry to identify best practices, especially among smaller companies 
that have fewer resources to devote to cyber defenses. These meetings 
will also help to identify relevant trends and challenges in this 
rapidly evolving environment that can further aid in cyber risk 
management.

    b. Why aren't these meetings being conducted under the Department 
of Homeland Security's Protected Critical Infrastructure Program?
    Answer. The Commission works closely with DHS to assess the 
preparedness of the telecommunications sector for a wide variety of 
contingencies. Under the Policy Statement under consideration, these 
meetings would be complementary to the DHS cybersecurity efforts. The 
Commission is working with DHS on an administrative arrangement to make 
use of the Protected Critical Infrastructure Information (PCII) 
program. In the interim, and in light of the importance of 
cybersecurity for this critical infrastructure sector of the Nation's 
economy, the Policy Statement under consideration describes the 
confidentiality and other protections that the Commission would apply 
to such meetings while the Commission continues to work with DHS to 
make use of the PCII program.

    c. Are you planning to conduct in-depth cybersecurity audits of 
these companies?
    Answer. No. We intend these meetings to be a conversation on 
companies' cyber risk management practices; there is no ``correct'' or 
``minimum'' standard against which companies will be measured. The 
Policy Statement under consideration makes clear that those companies 
that elect to participate in such meetings have discretion over what 
information they present about their cyber risk management practices 
and how they present it.

    Question 2. I understand that in January 2014 the FCC budgeted $3 
million for telecommunications relay services (TRS) research and 
development, and that a portion of that funding was used to support a 
MITRE Corporation study on Internet Protocol Caption Telephone Service 
(IP CTS).
    a. If that study is complete, will you provide a copy?
    Answer. The MITRE Corporation (MITRE) has performed studies to 
assess the accuracy, latency and associated usability of Internet 
Protocol Caption Telephone Service (IP CTS) devices and services, as 
well as alternative technologies that could augment IP CTS for people 
with hearing loss. In part, these studies are intended to determine the 
feasibility and effectiveness of handling calls through automated 
means, to reduce the need for third party communication assistants. Our 
goal is to develop methods of handling TRS calls that can result in 
savings to the TRS Fund while at the same time ensuring that such calls 
are functionally equivalent to voice telephone calls, as required by 
the Communications Act. Specifically, MITRE has submitted to the FCC 
preliminary test results assessing a sample of current and alternative 
speech recognition technologies and qualitative and quantitative 
measures for device and caption performance. MITRE also has provided 
preliminary results from controlled user assessments, and established a 
baseline of usability metrics based on MITRE's assessments of IP CTS 
devices and services. These activities provide qualitative and 
quantitative measures for device and caption performance.
    The FCC is evaluating MITRE's results to ascertain the extent to 
which new advances in speech recognition technology technologies and 
processes can improve IP CTS so that these services become more 
functionally equivalent to telephone services used by hearing people 
without the need for human intervention during these calls.

    b. If it is not complete, when do you expect it to be done?
    Answer. Phases 1 and 2 of the study have been substantially 
completed and the FCC is reviewing and analyzing the preliminary 
results thus far to determine whether additional studies are necessary.

    c. Do you plan to put the study out for public comment or review?
    Answer. It is the Commission's intention to make MITRE's final 
research results publicly available.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                            Hon. Tom Wheeler
    Question 1. For years, I have believed that the way in which rules 
are processed at the Commission lacks transparency and is detrimental 
to the American public. My FCC Process Reform Act would address these 
transparency and accountability issues for the sake of consumers and 
the industries supporting innovation and our economy.
    For example, the public has no idea the specific language of the 
rules the Commission is voting on until after they are passed. We saw 
that with the net neutrality rules that were pushed through this time 
last year, and we saw it a few weeks ago when the FCC voted on the 
proposal related to set-top boxes.
    In fact, Chairman Wheeler said during that meeting on set-top 
boxes: ``There have been lots of wild assertions about this proposal 
before anybody saw it.'' The problem is that the public doesn't know 
what to expect from the rule--there is no certainty for those on the 
outside.
    Do you believe the public has a right to see the specific language 
of a rule before it is voted on by the Commission?
    Answer. I absolutely believe that the public has the right to see a 
proposed rule and comment on it prior to being voted by the Commission. 
This concept is at the heart of the Administrative Procedure Act as 
well as the Commission's rules. Proposed rules are published well in 
advance of any final rulemaking, as part of an NPRM. Following 
publication of the NPRM, we maintain an open and transparent comment 
period consistent with our rules and the APA. By the time a draft text 
of a final rule is circulated to the Commissioners, there have been 
multiple opportunities for the public to comment--comments, reply 
comments, and generally a significant period for ex parte filings and 
meetings.

    Question 2. As someone committed to protecting Americans' and 
Nevadans' privacy, especially related to personally identifiable 
information (PII), I have a questions regarding the recent set-top box 
Notice of Proposed Rulemaking.
    Currently, pay-TV companies must follow strong privacy protections 
to ensure consumers' personal information is not collected, utilized, 
or shared for non-service related purposes. How does this NPRM 
contemplate applying and enforcing these same privacy to any new 
suppliers entering the set-top box market? Does the FCC have the legal 
authority to enforce Title 6 privacy standards on third parties?
    Answer. Cable providers abide by specific privacy obligations under 
Title VI of the Communications Act. In the NPRM, the Commission 
tentatively concludes that developers of third-party navigation devices 
should certify they are in compliance with the same privacy obligations 
in order to receive the three information flows from pay-TV providers 
that enable third parties to develop competitive solutions. The 
proposal asks a number of questions about how best to enforce such a 
requirement, including whether an independent entity should validate 
third-party developer's certifications, whether the Commission should 
maintain the certifications, and what the appropriate enforcement 
mechanism should be if there are any lapses in compliance with any 
certification.
    Additionally, the NPRM notes that today, competitive navigation 
devices must comply with a host of state and Federal privacy 
protections that include various remedies for consumers. All of these 
protections and remedies would continue to apply under the proposal in 
the NPRM.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Steve Daines to 
                            Hon. Tom Wheeler
    Question 1. Chairman Wheeler, businesses recognize the importance 
of complying with the TCPA. In fact, some businesses have opted to 
ensure their compliance with TCPA by implementing rigorous training, 
monitoring, and enforcement programs. These compliance programs, can be 
an extremely costly investment, but businesses pursue these because it 
is the right thing to do and because these programs work.
    Does the FCC support the concept of a business voluntarily choosing 
to invest in compliance due diligence and verification programs? Why or 
why not?
    Unfortunately, the promise of these voluntary compliance programs 
has been inhibited by a vague vicarious liability understanding that 
causes businesses to shy away from due diligence measures out of 
litigation fear--a perverse disincentive for businesses not to do the 
right thing. Should businesses be penalized for implementing programs 
with the goal on enhancing compliance? Why or why not?
    The issue of a compliance measures was not addressed in the FCC's 
recent TCPA order. Would the FCC support a legislative proposal seeking 
to clarify this uncertainty by amending TCPA to potentially reward, as 
oppose to penalize, businesses that choose to the do the right thing by 
adopting comprehensive TCPA compliance programs?
    Answer. The Commission is committed to the TCPA's goal of 
protecting consumers from unwanted calls and texts, one of the largest 
categories of complaints that we receive. Compliance with the TCPA by 
businesses who make calls is, of course, a key component of ensuring 
that consumers do not receive unwanted calls and texts. Programs that 
involve training, monitoring, and enforcement regarding the TCPA's 
requirements can undoubtedly go a long way toward helping businesses 
make only calls that consumers value and avoid calls that they do not 
want to receive. We would be interested to learn more about the 
concerns that your constituent has raised about compliance programs, 
and would be happy to work with your staff to facilitate a meeting to 
discuss this subject in more detail.

    Question 2. Chairman Wheeler, during your testimony, you said that 
copyright laws remain in place under your set-top box proposal. Under 
your proposal, would a programmer providing its copyrighted programming 
to an MVPD retain its exclusive right to decide whether or not it 
wanted to appear in a third-party app developed by a different party? 
What in the proposal protects a copyright owner's right to decide 
whether, how and on what platforms to disseminate its content?
    Answer. The new proposed rules would create a framework for 
providing device manufacturers, software developers and others the 
information they need to introduce innovative new technologies, while 
at the same time maintaining strong security, copyright and consumer 
protections. An important part of the proposal is parity, if a content 
owner has given the right to an MVPD to display the content on a 
different platform, the proposal seeks to allow others to develop 
options for that platform. The content protection and security that the 
MVPD chooses would be enforced just as they are today--in the private 
marketplace consistent with contracts, copyright law, and the MVPD's 
power to revoke a compromised device's ability to receive service. The 
proposal is clear--we are committed to ensuring the protection of 
content creators' copyright and not interfere with the business 
relationships or content agreements between MVPDs and their content 
providers or between MVPDs and their customers. The proposal, which is 
based on the way that content protection is administered today, states 
that to license the content protection that is necessary to decrypt 
multichannel video programming from a MVPD, the third party must 
certify that it will honor copy protection limits and prevent theft of 
service.

    Question 3. Chairman Wheeler, when you testified before the 
Commerce Committee last May, you said that universal access is at the 
core of the FCC's mission, including access for individuals living on 
tribal lands. Yet, the Commission has not even consistently asked for 
funding for tribal consultation, and, by all accounts, has no intention 
to move forward with the next phase of the tribal mobility fund. Can 
you explain how this is consistent with your claim that access on 
tribal lands is at the core of the FCC's mission?
    Answer. Universal access to telecommunications services, including 
on tribal lands, is a core element of the FCC's mission. The Commission 
is currently planning five regional Tribal consultation and training 
workshops for 2016. The Commission has also invited USDA to 
participate. The first of these workshops will be held in late May or 
early June in Montana, with four more to follow in Oklahoma and in the 
Great Lakes, Southwest, and Pacific Northwest regions of Indian 
Country. The Commission is committed to working with our Tribal 
partners and with USDA to ensure that the 2016 Tribal consultation and 
training workshops, as well as those in future years, provide as 
comprehensive and coordinated an approach as possible.
    In addition, the proposal for an ongoing Tribal Mobility Fund 
remains under consideration as staff reviews the record regarding 
possible next steps for a Mobility Fund Phase II.
    Further, the Commission recently adopted an FNPRM that seeks 
comment on reforming high-cost universal service support to promote 
broadband deployment on Tribal lands, including through a Tribal 
Broadband Factor for rate-of-return carriers serving Tribal lands. I 
plan to take action on this issue in 2016.

    Question 4. Chairman Wheeler, the FCC's exclusivity protections are 
a good way to avoid costly and unnecessarily litigation, especially for 
small businesses. Have you studied what kind of burden removing those 
non-intrusive protections could impose on small broadcasters who would 
then have to rely on expensive and time-consuming litigation with 
bigger companies to enforce their otherwise straightforward contractual 
rights?
    Answer. While we did not do a study on the burden that could be 
imposed on small broadcasters, I strongly believe that there would be 
little, if any, need for broadcasters to resort to litigation. 
Specifically, the likelihood of litigation is low because under the 
proposal a distant station would have to grant its consent to be 
imported into another station's market by an MVPD.
    In addition, an elimination of the exclusivity rules is unlikely to 
have an immediate effect on programmers, broadcasters, cable companies, 
or consumers. This is because current broadcast program contracts and 
network affiliation agreements regularly contain their own exclusivity 
provisions prohibiting a program from being imported into a market if 
it is being shown on a local broadcast station. In these circumstances, 
retaining the exclusivity provisions may well be redundant and a 
Federal intrusion, without cause, into the marketplace. Faith in the 
free market would suggest that government get out of the way, absent an 
indication of harm. Since the rules appear redundant to existing 
contractual provisions based on the record, their elimination would not 
be the trigger for such harm.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                            Hon. Tom Wheeler
    Question 1. Did the FCC rely on the record in the Open Internet 
rulemaking proceeding to reach the decision it ultimately adopted? Does 
the record in the open Internet rulemaking proceeding include legal 
arguments and opinions supporting the Title II approach the FCC 
ultimately adopted? If so how many or what percentage of the record 
supported a Title II approach? Does the record include a filing from 
the Office of President Obama? Does the record in the case show, 
contrary to the allegations in Senator Johnson's report ``REGULATING 
THE INTERNET: HOW THE WHITE HOUSE BOWLED OVER FCC INDEPENDENCE'', that 
the FCC engaged in a robust deliberative process and adopted a decision 
supported by the record as required by the Administrative Procedures 
Act? If so, please detail how the Commission complied with the APA in 
reaching this decision.
    Answer. The 2015 Open Internet Order was the product of a rich 
rulemaking record and the Commission's extensive deliberations on that 
record.
    The May 2014 Notice of Proposed Rulemaking (NPRM) was part of an 
ongoing public discussion about means by which the Commission could act 
to protect an open Internet. An extensive public record on this issue 
existed before we initiated the NPRM. In 2010, the Commission issued a 
Notice of Inquiry asking, among other things, whether and how to apply 
Title II to broadband services. The January 14, 2014, Verizon decision 
vacating portions of the 2010 Open Internet Order included a lengthy 
discussion of the Commission's Title II ``common carrier'' authority. 
One of the key holdings in Verizon was that the Commission could not 
impose rules requiring broadband providers not to engage in ``unjust 
and unreasonable discrimination'' unless the Commission classified 
their services as telecommunications services under Title II. The Open 
Internet rulemaking we initiated in May 2014 was a direct response to 
this remand.
    The NPRM repeatedly sought public comment on the Commission's 
authority under Title II and commenters clearly understood that the 
Commission's authority under Title II would be considered as part of 
the rulemaking process to protect and promote the open Internet as 
evinced by the record. The record is replete with commenters supporting 
a Title II approach, ranging from industry parties (e.g., Cogent and 
COMPTEL) to public interest organizations (e.g., Consumers Union and 
the New America Foundation) to edge providers such as Etsy and Mozilla, 
to individual consumers. The Obama Administration filed an ex parte in 
the Open Internet docket on November 10, 2014, after President Obama 
issued a statement calling for the creation of ``a new set of rules 
protecting net neutrality.''
    The Commission provided notice on multiple occasions of the 
approach that we adopted in the final order, in full compliance with 
our legal obligations under the Administrative Procedure Act (APA), and 
consistent with our practice and precedent.

    Question 2. It has come to my attention that the company Zillow, 
based in my home state, filed comments with your agency in support of a 
declaratory ruling clarifying the regulatory status of mobile messaging 
services (WT Docket No. 08-7).
    Zillow is a popular real estate and rental platform with 
approximately 140 million monthly users that empowers consumers with 
data, and information about housing and connects them with local 
professionals who can help.
    Zillow uses texting to quickly and reliably notify agents of 
potential buyers' inquiries so they can provide a quick call or text 
message back to connect. To prevent spam listings on the website, 
Zillow requires users to validate their identity by receiving a text 
message on their cell phone.
    In its filing with the FCC, Zillow expressed concerns with the 
reliability of message delivery under the carriers' current practices 
that block non-spam text messages. The result of this activity is any 
of the following poor customer experiences:

   Agents don't find out right away that a potential buyer 
        wants to talk to them.

   Potential buyers are frustrated that they don't receive 
        responses from agents.

   Users can't verify their identity, so their listings don't 
        get posted to our site.

    What is the Commission doing to ensure that the critical text 
messages such as those that are sent between buyers and brokers using 
Zillow are delivered with certainty and reliability?
    Answer. Twilio, which provides a platform that allows commercial 
entities to send text messages to end users, filed a petition in WT 
Docket No. 08-7 on August 28, 2015, asking the Commission to classify 
text messaging services as telecommunications services under Title II 
of the Communications Act. On October 13, 2015, the Wireless 
Telecommunications Bureau released a Public Notice seeking comments on 
Twilio's petition and the comment period for the petition closed on 
December 21, 2015. The Commission received substantial input in 
response to the Public Notice, including comments from Zillow, and 
Commission staff are carefully reviewing the technical and policy 
considerations raised in the record. The Commission staff also are 
currently meeting with stakeholders at their request to better 
understand these concerns in light of the developing record.

    Question 3. My office has met with Twilio, which powers messaging 
for several Washington-based companies, including Zillow, Redfin, Peach 
and Nordstrom. Redfin uses text messaging for real estate reminders and 
has experienced filtering. Peach is a lunch delivery platform that uses 
text messages to facilitate orders and filed in support of Twilio's 
petition. Nordstrom uses text messaging through 10-digit numbers to 
reach customers, which is cited by customers as a preferred method of 
communication.
    Twilio asserts that they've made good-faith efforts to resolve the 
blocking of wanted, non-SPAM messages with the carriers and CTIA--it's 
worth noting that Twilio CEO Jeff Lawson serves on CTIA's board.
    Given the lack of progress, shouldn't the FCC intervene to help the 
parties come up with a solution?
    If SPAM is truly a huge concern as the carriers have argued, does 
the FCC agree that only wireless carriers can solve it? I urge the FCC 
to look into the extent of the how bad is the SPAM problem: Where is it 
coming from? What are wireless carriers doing to solve the spam 
problem? From my understanding of the issue, all parties should be 
involved in preventing spam, including the edge providers.
    The current system of filtering messages in the name of SPAM 
prevention is conducted without transparency, unchecked at the carrier 
level. Is this the best approach? Should the FCC require more 
transparency from the carriers?
    Answer. As noted in response to Question 2, the Commission is 
currently considering comments filed in response to a petition filed by 
Twilio on the regulatory treatment of text message services. The impact 
of different approaches for ensuring that consumers receive the text 
messages they want while protecting consumers from unwanted messages is 
among the issues raised in that proceeding. In the record, carriers 
have argued that the current system protects end users from unwanted 
text messages, but other parties have submitted comments indicating 
that carriers engage in blocking text messages desired by end users and 
do so without disclosing that they have blocked an edge provider's 
message.
    The Commission is in the process of reviewing the record in 
response to Twilio's petition. In addition, the Commission is meeting 
with stakeholders at their request, and these meetings will continue to 
develop the record with regard this issue.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Claire McCaskill to 
                            Hon. Tom Wheeler
    Question 1. One of the best tools the Commission has in overseeing 
the Lifeline program is the ability to take aggressive enforcement 
against carriers violating the rules of the program, companies that are 
abusing both the consumers who use the program as well as the rate 
payers that fund it. That's why I applauded a flurry of announced 
enforcement activity from September 2013 through February 2014. During 
that time the FCC issued Notices of Apparent Liability (NALs) totaling 
more than $94 million in proposed fines for 12 companies participating 
in the Lifeline program. Some of those notices are more than two-and-a-
half years old yet not a penny of that money has yet been collected.
    Will you press the Enforcement Bureau to either issue forfeiture 
orders, reach settlements, or dismiss these 12 NALs in an expeditious 
manner?
    Answer. The Commission's Lifeline enforcement actions referenced in 
your question have been referred to the FCC's Office of Inspector 
General, which will handle resolution of those matters.

    Question 2. To avoid this situation in the future, would you 
support a shot clock for resolution of NALs? If so, what do you believe 
would be an acceptable amount of time?
    Answer. The Enforcement Bureau already operates under tight time 
constraints. Section 503(b)(6) of the Communications Act requires the 
Commission to bring enforcement actions that seek to impose a monetary 
penalty within one year of the violation. This one-year statute of 
limitations holds true even if the Commission learns of the violation 
one week or one month before the one-year expiration. A ``shot clock'' 
that would impose an additional set timeline to resolve enforcement 
actions would likely limit the ability of the Enforcement Bureau to 
fully investigate the facts of cases or to pursue complex cases and 
cases involving exigent circumstances.
    I should note that the Enforcement Bureau has made a concerted 
effort to bring enforcement actions to conclusion as quickly as 
possible, including by substantially reducing the time between an NAL 
and a Forfeiture Order. In recent years, the Bureau has made great 
strides to provide timely conclusions to cases. For example, NALs 
issued in 2011 took an average of 19 months to be resolved via 
Forfeiture Order, whereas NALs issued in 2014 took an average of eight 
months to be resolved via Forfeiture Order--a near 60 percent 
improvement in speed. However, these numbers are averages and reflect 
the typical case that was brought to resolution. While many enforcement 
actions are routine, others are also quite complex and can take 
substantial time and resources to resolve. A few examples of the kinds 
of issues that complicate the amount of time needed to conclude 
forfeiture adjudications are: investigations that involve targets in 
foreign countries; investigations that involve coordination with other 
government agencies; investigations in which the governing legal 
authorities have changed, are in the process of changing, or are 
subject to ongoing rulemakings or litigation; and investigations that 
uncover substantially new information or evidence subsequent to the 
NAL.
    In addition, some enforcement actions are resolved through consent 
decrees after the NAL. Settlement negotiations take substantial amounts 
of time and staff resources. The Enforcement Bureau's settlements 
frequently result in consumer protections that are carefully negotiated 
to address the specifics of the case. These settlements provide 
certainty to the investigation targets as well as reduce litigation 
expenses for targets and the Commission, which can be quite substantial 
since regulatory appeals and subsequent Federal court litigation can 
take many years to conclude.

    Question 3. The Bipartisan Budget Act of 2015 included an unwise 
and harmful provision to exempt debt collection calls on behalf of the 
Federal Government from Telephone Consumer Protection Act (TCPA) rules 
that prohibit robocalls to cell phones. Although the provision was 
ostensibly aimed at collecting student loan debt, the loophole was 
potentially widened even further by adoption of the Fixing America's 
Surface Transportation (FAST) Act in December, which requires the 
Internal Revenue Service to contract with private debt collectors to 
collect unpaid taxes. I have held hearings in this committee's Consumer 
Protection Subcommittee and at the Senate Aging Committee on robocalls. 
We should be making it harder--not easier--for this number one consumer 
complaint to continue, especially when there is no evidence that 
robocalls are an effective means of reaching consumers. Until we are 
successful in repealing this provision, the FCC is tasked with adopting 
rules to implement it.
    Would you support rules that require companies collecting debt on 
behalf of the Federal Government to register with the FCC in advance of 
doing so?
    Would you support rules that limit calls from companies collecting 
debt on behalf of the Federal Government to no more than one call per 
consumer per month?
    Answer. I am committed to enforcing the TCPA, which is designed to 
protect consumers from unwanted calls and texts. Consumers value their 
privacy, regardless of whether unwanted efforts to reach them target 
their home landlines or wireless phones. As you note, Section 301 of 
the Bipartisan Budget Act of 2015, which amends the codified Telephone 
Consumer Protection Act, creates an exception to the TCPA's prior 
express consent requirement for automated calls to cellular or 
residential telephones for the purpose of collecting debts owed to or 
guaranteed by the United States.
    Last month I circulated a draft Notice of Proposed Rulemaking 
(NPRM) that seeks comment on several of the concerns you raise, and 
presents proposals that remain faithful to Congress's mandate while 
shielding consumers from unwanted robocalls. The draft NPRM proposes 
strong pro-consumer restrictions on the type and number of calls a 
Federal creditor may place to recover a delinquent debt. In particular, 
the NPRM proposes:

   that only calls made after a debtor has become delinquent 
        are covered by the exception;

   to limit the calls to creditors and those calling on their 
        behalf, including debt servicers;

   that these robocalls can only be made to the debtor, so as 
        to prevent unwanted robocalls to relatives, friends, and other 
        acquaintances of debtors;

   to limit the number of calls to three per month per 
        delinquency; and

   to empower consumers with the right to stop calls from a 
        Federal creditor at any time and to require callers to inform 
        debtors of this right.

    The draft NPRM also makes clear that the new rules will not open a 
door for telemarketing calls. Congress specified that exempted calls 
must be ``solely'' to collect a Federal debt, and the new rules will 
comply with that strict limitation.

    Question 4. What impact do you believe this exemption will have on 
the ability of the Commission's Enforcement Bureau to differentiate 
between calls that are now exempt from TCPA and those that are not, 
particularly when exempt calls and non-exempt calls could be coming 
from the same call centers?
    Answer. I do not anticipate that the exemption will materially 
impair the Commission's ability to differentiate between exempt and 
non-exempt calls. When the FCC investigates potential illegal 
robocalling campaigns, we issue a subpoena or Letter of Inquiry to the 
call center/person/entity responsible for the initiation of the call. 
Our subpoenas and inquiries require the target to produce evidence 
proving that the calls were made with the recipient's prior express 
consent (or prior express written consent, as applicable), or that show 
the calls were permissible under the limited exceptions granted in 
Section 227 of the Communications Act. Commission precedent has been 
very clear that any time a question or doubt arises about whether a 
consumer gave his or her prior express consent, the burden is on the 
caller to demonstrate that it obtained the proper prior express 
consent. The burden will continue to be on the target/caller to produce 
evidence that it made the call on behalf of the Federal Government in 
order to benefit from the new exemption.

    Question 5. The Chairman recently received a letter from Senator 
Blunt and me regarding the upcoming reverse auction portion of Connect 
America Fund, Phase II (CAF II).
    For CAF II in Missouri, there is approximately $400 million 
available over the next 10 years to bring broadband to unserved parts 
of the state. Can you assure me that the money will be spent in 
Missouri and not be reallocated to other areas of the country?
    Answer. The data used to calculate the CAF Phase II offer of 
support in Missouri and elsewhere in the country are outdated. 
Consistent with our overarching principle of not providing support in 
areas that are already served by unsubsidized competitors, we are in 
the process of updating our list of which areas will be subject to 
auction to reflect the current marketplace. We are committed to 
developing an auction framework that will ensure that providers in your 
state, as well as others, can compete to bring robust, scalable 
broadband service to unserved, high-cost areas, subject to the overall 
budget established for Phase II.

    Question 6. As you consider the framework to govern the reverse 
auction to award the remaining dollars available in CAF II, how will 
you ensure that funded projects not only meet today's broadband 
definition, but are future proof and scalable to keep pace with ever-
changing technology and increasing needs for higher speed broadband?
    Answer. The Commission is focused on updating the universal service 
high-cost program to ensure that we are delivering the best possible 
voice and broadband experiences to rural areas not only for today, but 
in the future, all within the confines of the Connect America Fund's 
budget. One of the primary policy goals of the competitive bidding 
process is to ensure widespread participation from all providers that 
can deliver a high-quality service. As we move forward with finalizing 
the structure of the CAF Phase II reverse auction, we will be giving 
full attention to the best ways to ensure that rural communities, 
including those in Missouri, have access to robust and reliable 
broadband service both today and in the future.

    Question 7. In 1993, through the Omnibus Budget Reconciliation Act 
of 1993, Congress directed the FCC to develop regulations governing the 
competitive bidding of spectrum. Included in the statutory instructions 
from Congress was a requirement that the Commission ``ensure that small 
businesses, rural telephone companies, and businesses owned by members 
of minority groups and women are given the opportunity to participate 
in the provision of spectrum-based services.'' To meet this 
congressional mandate the FCC created the Designated Entity (DE) 
program. The program's worthy goal of providing a mechanism for 
legitimate small businesses to partner with larger ones in spectrum 
auctions has undoubtedly helped many small businesses win spectrum 
licenses over the past 20+ years. But it has also provided a blueprint 
for large, multinational, multi-billion-dollar corporations to game the 
system and receive discounts on their bids.
    What assurances can you provide that the commission will do a 
better job of monitoring potential abuse of the DE program in the 
upcoming incentive auction than it did in the recent AWS-3 auction?
    Answer. The Commission always carefully reviews all claims of 
eligibility for small business bidding credits in the course of its 
review of the licensing applications of auction winners. For example, 
in August 2015, the Commission denied over $3 billion in credits in the 
recent AWS-3 Auction to two entities that it found were controlled by a 
large multi-billion dollar corporation and, therefore, ineligible for 
bidding credits. The Commission staff will also carefully review 
applications filed by winning forward auction bidders in the upcoming 
Incentive Auction, which review will be augmented by new rules adopted 
in July 2015.
    Specifically, in July 2015, the Commission updated its competitive 
bidding rules in the Competitive Bidding Report & Order. This Order 
adopted new rules to reflect the dramatic changes in the wireless 
marketplace since the Commission's competitive bidding rules were last 
updated in 2006. Particularly, the new rules better achieve the goals 
that Congress intended through its mandate while preventing the type of 
abuse you reference. As a result, the designated entity program will 
better serve small businesses and eligible rural providers by expanding 
their ability to adopt innovative and flexible business plans, and at 
the same time incorporate a number of measures to make sure that only 
bona fide small businesses and eligible rural service providers benefit 
from bidding credits.
    Simply put, the new rules will ensure that small businesses are not 
able to serve as a stalking horse for another party. The Report & Order 
established the first-ever cap on the total amount of bidding credits 
to minimize the incentive for major corporations to try to take 
advantage of the program. It also limits the amount of spectrum that a 
small business or rural service provider may lease to its disclosable, 
non-controlling investors during the five-year unjust enrichment 
period. The revised rules also clarify that joint bidding agreements 
between designated entities (including small businesses and rural 
service providers) and nationwide service providers will not be 
permitted. Ultimately, the reforms adopted in the Report & Order will 
increase the economic opportunity for small and rural businesses, as 
well as ensure that the beneficiaries of our competitive bidding rules 
are those intended by Congress.

    Question 8. When Congress and the FCC were establishing the 
framework for spectrum auctions more than 20 years ago it probably made 
sense to ensure small businesses were able to compete. But a lot has 
changed. The cost of entering the incredibly expensive wireless 
infrastructure industry is far greater than it was in the early 1990s. 
A company that truly has revenues of $40 million, $15 million, or $3 
million--the thresholds set by the commission for the various levels of 
bidding credits--would be unlikely to enter the industry today. So is 
it time to look at simply eliminating the DE program to prevent future 
abuse?
    Answer. The DE program is an important program that can help bring 
opportunity and competition to the wireless industry. The Commission is 
committed to ensuring that bona fide small businesses and eligible 
rural service providers have the opportunity to participate in our 
spectrum auctions and in the provision of spectrum-based services. For 
this reason, the Commission adopted the Competitive Bidding Report & 
Order last year. This Order updated our competitive bidding rules to 
reflect the dramatic changes in the wireless marketplace since they 
were last updated in 2006. In 2006, the top four national carriers 
served 82 percent of the market; today the top four national carriers 
serve 98 percent of all subscribers. Given these changes, the 
Commission acted to provide bona fide small businesses and eligible 
rural service providers a better on-ramp into the wireless industry, 
and provide small and eligible rural providers with flexibility to make 
businesses decisions with the goal creating more wireless choices for 
consumers. Under the Commission's new rules, the DE program will 
continue to provide small and rural businesses with the flexibility 
they need to gain experience in operations and investment.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Amy Klobuchar to 
                            Hon. Tom Wheeler
    Question 1. Mr. Chairman, in our capacity as Chairman and Ranking 
Member of the Antitrust Subcommittee, Senator Lee and I sent you and 
Attorney General Loretta Lynch a letter on February 17, urging you to 
carefully consider how Charter's acquisition of Time Warner Cable and 
Bright House Networks will ``hinder or promote the development of new 
alternatives for consumers to receive video content.'' We urged you to 
consider whether the transaction would increase Charter's incentive and 
ability to interfere with over-the-top service providers. Interference 
could occur through discriminatory interconnection practices or by 
reducing the price Charter pays to include certain content in its cable 
package. Is this the type of concern that the FCC would consider in a 
merger review?
    Answer. Consistent with our rules, the Commission will evaluate 
whether these proposed transactions are in the public interest. As I 
indicated in my response to your letter, our analysis takes several 
factors into account, including the issues you raised in your letter. 
With regard to the issues you raise here and all issues relevant to the 
transaction, not only do we assess whether we can appropriately remedy 
any harms that may arise from the transaction, we also place great 
emphasis on the benefits that the transaction will confer on American 
consumers. Again, while I am unable to discuss the specific merits of 
this particular proceeding, I can assure you that the Commission will 
be conducting an open and transparent process as required by FCC rules 
and regulations. After developing a full and complete record, we hope 
to conclude our review as quickly as possible.

    Question 2. In 2012, I worked to include an important policy in the 
FAA reauthorization to allow for priority review of construction 
permits in cold weather states. International Falls, Minnesota, is 
fortunate to be home to the coldest annual average temperature in the 
contiguous United States. The KPXM Tower in International Falls also 
happens to be the tallest structure in Minnesota. I can't imagine any 
of us would want to climb 1,505 feet to the top of it in February.
    Chairman Wheeler, will you work with me to ensure that broadcasters 
in cold weather states have the resources and flexibility they need to 
be able to complete the post-auction repacking process in a timely 
manner?
    Answer. Yes. We will take into account how many stations actually 
need to be repacked, and the specific characteristics of each, in 
determining the repacking schedule. The Commission has been working 
closely with broadcasters to get important input from the industry on 
planning a successful transition. We have also had discussions with 
representatives of the wireless industry, who have an interest in an 
efficient transition process. We anticipate further interaction with 
all affected stakeholders as we develop and refine this transition 
plan.
                                 ______
                                 
 Response to Written Questions Submitted by Hon. Richard Blumenthal to 
                            Hon. Tom Wheeler
    Question 1. Last year, I filed comments with the FCC urging the 
establishment of coordinated enrollment opportunities for low-income 
and homeless veterans to the Lifeline Program, which has provided 
critical telephone access to low-income Americans for over 30 years. As 
Ranking Member of the Senate Committee on Veterans' Affairs, I strongly 
believe that greater access to Lifeline benefits will provide support 
for veterans in need as they transition from the armed services to 
civilian employment and as they transition from homelessness into 
housing. What is the FCC doing to ensure that our most vulnerable 
populations, ranging from veterans to students, are aware of these 
essential programs?
    Answer. I share your interest in ensuring that our most vulnerable 
populations, including veterans and students, are aware of these 
essential programs. As I indicated in my response to your letter last 
year on this issue, the Commission sought comment in the 2015 Lifeline 
FNPRM on whether to include Federal low-income assistance programs for 
veterans to qualify those individuals for Lifeline support. Recently, I 
circulated an Order for my colleagues' consideration to modernize the 
FCC's Lifeline program to efficiently and effectively meet a critical 
21st Century need: making broadband more affordable for low-income 
consumers. The Order will be considered at the FCC's March 31 Open 
Meeting.
    The Order proposes to add Veterans Pension and Survivors Pension 
benefit programs to Lifeline's eligibility program. To qualify for the 
Veterans Pension benefit program, veterans must have at least 90 days 
of active duty, including one day during a wartime period, and meet 
other means-tested criteria such as low-income limits and net worth 
limitations established by Congress. In addition, any surviving spouse 
or dependent of a deceased eligible veteran can qualify for the 
Survivors Pensions benefit program. Many commenters supported this 
change and have demonstrated an established need for armed forces 
veterans to access affordable phone service.
    More generally, by supporting broadband, Lifeline will bring 
connectivity into the homes of low-income Americans. We must modernize 
the Lifeline program to improve affordability and access to broadband--
the critical communications technology of the 21st Century--for all low 
income Americans.

    Question 2. What can policymakers do to help get more people 
connected and also ensure that we can meet the growing demand?
    Answer. While it is clear that broadband has become essential in 
today's society, affordability remains a major barrier to adoption by 
low-income consumers. The proposed Order I recently circulated for my 
colleagues' consideration takes a number of steps to address the 
broadband affordability gap. For the first time, low income consumers 
could apply the $9.25 per month support to stand-alone broadband 
service, as well as bundled voice and data service packages. The Order 
would free up the Lifeline marketplace to encourage wide participation 
in the program by broadband providers, giving consumers competitive 
service options. Minimum service standards would ensure that supported 
services meet modern needs, and the establishment of a National 
Eligibility Verifier will further deter waste, fraud and abuse, while 
reducing provider burden. In addition, the Order proposes to set a 
budget of $2.25 billion, indexed to inflation, to limit Lifeline's cost 
to ratepayers, but sufficient to allow for increased participation 
generated by support for broadband service.

    Question 3. The FCC issued its Notice of Proposed Rulemaking on 
Special Access in 2005. Over a decade has now passed, yet there is 
still no final rule. I understand that the FCC needs to collect 
information from providers and users of special access services in 
order to conduct the necessary market analysis to proceed with this 
rulemaking.
    Do you now have the data necessary to finalize a rulemaking to 
ensure that special access lines are provided at reasonable rates and 
on reasonable terms and conditions?
    At this point, are there any other factors blocking you from 
finalizing a rulemaking?
    Answer. The resolution of the business data services (special 
access) proceeding is a high priority at the Commission and we are 
moving forward with all due diligence to conclude this proceeding as 
expeditiously as possible while ensuring full consideration of the 
record. We have collected data, and the comment and reply periods on 
the business data services rulemaking proceeding closed last month. 
Commission staff is reviewing the comments, including substantial 
economic analysis of the data by stakeholders' expert consultants. The 
analysis of the data, as well as other informed public input filed in 
this proceeding, will provide the Commission with the tools necessary 
to fully comprehend this marketplace and take action as appropriate.

    Question 4. As you know, to address increasing demand for wireless 
broadband access, Congress directed the FCC to conduct an incentive 
auction, to encourage broadcast licensees to voluntarily relinquish 
their spectrum rights in exchange for a share of the proceeds in 
auctioning this spectrum to new licensees. In many parts of the 
country, contiguous spectrum will be freed up by ``repacking'' the 
channels to which remaining television broadcasters are currently 
assigned. Do you believe there is enough money in the TV Broadcaster 
Relocation Fund to cover repacking-related expenses incurred by 
broadcasters?
    Answer. At this point, we have no reason to believe that the $1.75 
billion Broadcaster Relocation Fund will be insufficient to cover 
broadcasters' relocation costs. In order to ensure the sufficiency of 
the fund, we will optimize the final broadcaster channel assignments to 
minimize relocation costs. This optimization will: (1) maximize the 
number of stations assigned to their pre-auction channel; and (2) avoid 
reassignments of stations with high anticipated relocation costs, based 
on the most accurate information available. These steps, taken 
together, will help to ensure that the $1.75 billion Reimbursement Fund 
is sufficient to cover broadcasters' relocation costs and that the Fund 
is disbursed as fairly and efficiently as possible.

    Question 5. If the 39 month repack time-frame and the $1.75 billion 
relocation fund are insufficient, does the FCC have the flexibility in 
the statute to ensure consumers and communities won't be negatively 
affected by signals going off the air?
    Answer. The Commission's goal is for consumers to experience 
minimal disruption. To help ensure the Broadcaster Relocation Fund is 
sufficient to cover broadcasters' relocation costs, the FCC 
commissioned the Widelity Report to more fully understand the types of 
costs that would be required, and the magnitude of those costs, to help 
make efficient use of the Broadcaster Relocation Fund. The Commission's 
Media Bureau adopted a catalog of expenses as guidance, which will 
serve as a means of facilitating the process of being reimbursed by 
setting forth categories of expenses. The Commission is taking 
appropriate measures to disburse funds as fairly and efficiently as 
possible to ensure the sufficiency of the Reimbursement Fund.
    Should the $1.75 billion be insufficient, I will notify Congress as 
soon as this becomes clear. The amount was set by the Spectrum Act and 
Congress would need to take action to change it.

    Question 6. If so, how can the FCC ensure that broadcasters have 
sufficient time to move without being forced off the air, if factors 
outside their control delay their ability to reconfigure their 
facilities?
    Answer. We believe that a 39-month transition period is sufficient 
for stations to apply for a construction permit (3 months) and move to 
their new channels (36-month Construction Period), while also enabling 
forward auction winners to get access to their newly acquired spectrum 
as quickly as possible, thus ensuring a successful incentive auction. I 
would also note that the appeals court unanimously upheld the 39-month 
transition period. The Commission has created a framework that gives 
stations every opportunity to remain on the air, even if time runs 
short due to unforeseen circumstances. To assist stations, the 
Commission will permit six-month extensions for stations that, for 
reasons beyond their control, cannot complete the modifications to 
their facilities during their construction period. Additionally, 
special temporary authority may be granted to operate on a new channel 
using a temporary facility while they complete their tower 
modifications. Eligible broadcasters can also request special temporary 
authority to operate on a channel in the TV band that is available 
because it was relinquished by a winning bidder in the auction.

    Questions 7. Do you agree that no non-participating broadcaster 
should be forced off the air, or forced to cover the costs of 
transitioning their signal, to accommodate the repack?
    Answer. Every broadcaster who is assigned to a new channel in the 
repacking process because they choose not to participate in the 
auction, or participate but are not selected, will be eligible for 
reimbursement of their reasonably incurred costs from the Relocation 
Fund. The Commission is taking appropriate measures to disburse funds 
as fairly an efficiently as possible to ensure the sufficiency of the 
Relocation Fund. Non-participating broadcasters cannot and will not be 
forced off the air.

    Question 8. More and more often, we see retransmission consent 
negotiations are turning into disputes that result in programming 
blackouts and it's the consumers that pay the price. The fact is, the 
more these blackouts occur, the more pressure mounts in Washington to 
change the law to ensure consumers get a more fair shake. As you know, 
Section 103(c) of the STELA Reauthorization Act of 2014 (``STELAR'') 
directed the FCC to review the totality of the circumstances test for 
evaluating whether broadcast stations and MVPDs are negotiating for 
retransmission consent in good faith. In September 2015, the Commission 
initiated a rulemaking on this question.
    Please provide a status update on MB Docket No. 15-216.
    Answer. Comments and reply comments were due on December 1, 2015, 
and January 14, 2016, respectively. Staff is currently reviewing the 
record and preparing recommendations on the next steps for action on 
this proceeding.

    Question 9. How does the Commission plan to delineate bad faith 
negotiation tactics from good faith tactics? When can consumers be 
confident there is a cop on the beat policing these negotiations to 
ensure bad faith negotiating tactics are not holding hostage the 
programming they paid for?
    Answer. The Commission has a role pursuant to Section 325 of the 
Communications Act to ensure that retransmission negotiations are 
conducted in good faith. Rule 76.65 currently lays out the standards 
for what constitutes good faith negotiation. We currently have a 
pending Notice of Proposed Rule Making (Docket No. 15-216) that seeks 
comment on how we can strengthen these rules and help minimize service 
disruptions. Commission staff is currently reviewing the record in this 
proceeding.

    Question 10. Last year, I wrote to the FCC regarding a news story 
in the Wall Street Journal that revealed that one in ten antenna sites 
around the country may not adhere to FCC guidelines for providing the 
appropriate level of awareness and control to occupational workers that 
may be exposed to radiofrequency (RF) radiation above the limits for 
the general population. This means thousands of innocent tradespeople--
electricians, painters, HVAC technicians, roofers, firefighters, and 
others whose jobs require them to work in close proximity to RF-
radiating wireless antennas--may be unknowingly exposed to harmful RF 
radiation.
    An April 30, 2014, consent decree issued against Verizon for 
violating FCC radio frequency exposure limits at a rooftop antenna site 
in Hartford, CT, required Verizon to implement a rigorous compliance 
plan to protect Verizon Wireless employees and contractors. However, it 
was unclear what steps Verizon must take to ensure the safety of third 
party workers. Please provide an update on Verizon's compliance with 
this consent decree.
    Answer. The Verizon consent decree resolved multiple investigations 
into the company's compliance with the FCC's rules governing 
radiofrequency exposure. The consent decree requires Verizon to check 
each of its antenna sites for compliance, and provides detailed 
measures for protecting the safety of Verizon workers and third parties 
who might be exposed to radiofrequency radiation at Verizon sites. In 
addition to training and other protections for Verizon workers and 
contractors, the compliance plan also requires Verizon to protect third 
parties by restricting access to sites, installing barriers where 
necessary, and erecting radiofrequency exposure warning signage. 
Pursuant to the agreement, Verizon must report on its compliance with 
the consent decree. According to the most recent report, Verizon has 
now performed compliance reviews of more than 6,900 antenna locations 
and conducted training for all Verizon employees and third party 
contractors with access to Verizon's sites. Verizon's final compliance 
report is due on October 30, 2016.
    It is important to note that the Commission continues to enforce 
its rules and has taken action wherever warranted. The vast majority of 
sites we have reviewed are in compliance with our rules.

    Question 11. The FCC issued a Notice of Proposed Rule Making (NPRM) 
in 2013 regarding RF exposure at wireless sites. What is the status of 
this NPRM?
    Answer. The FCC currently has rules that require compliance with 
the Commission's RF Exposure rules for all wireless transmission 
facilities and they are enforceable. The NPRM sought to clarify 
responsibilities and the process for determining compliance in 
situations where multiple transmission facilities are located close 
together, such as on a rooftop. The NPRM also sought to clarify the 
responsibilities for compliance with the RF exposure rules for today's 
wide variety of transmission facilities, including when barriers may be 
required to restrict access nearby an antenna, warning signs must be 
posted, when compliance with the limits for the general population are 
needed, and other issues. The underlying issues and analyses are quite 
complex and will require careful consideration and coordination with 
other Federal agencies such as the FDA and OSHA. The proceeding 
continues to be a priority.

    Question 12. It is not clear that the proposed rule would require 
wireless service providers to extend the same level of RF radiation 
protection they provide to their own employees to third-party workers. 
What commitment can you make to address this possible oversight gap?
    Answer. The rules the Commission proposed were designed to protect 
all workers, as well as the general public. While I cannot prejudge the 
outcome of our pending proceeding, I remain committed to this goal.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Edward Markey to 
                            Hon. Tom Wheeler
    Question. The rules governing the special access market need to be 
reformed so the businesses, competitive carriers, wireless service 
providers and others who rely on it can take full advantage of robust 
and competitive broadband services. Mr. Chairman, can you update the 
Committee on the status of the current proceeding?
    Answer. The resolution of business data services (special access) 
proceeding is a high priority at the Commission and we are moving 
forward with all due diligence to conclude this proceeding as 
expeditiously as possible while ensuring full consideration of the 
record. We have collected data, and the comment and reply periods on 
the business data services rulemaking proceeding closed last month. 
Commission staff is reviewing the comments, including substantial 
economic analysis of the data by stakeholders' expert consultants. The 
analysis of the data, as well as other informed public input filed in 
this proceeding, will provide the Commission with the tools necessary 
to fully comprehend this marketplace and take action as appropriate.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Cory Booker to 
                            Hon. Tom Wheeler
    Question 1. As you know, commercial demand continues to outpace the 
Federal Government's reallocation of available electromagnetic 
spectrum. The Wi-Fi Innovation Act (S. 424) aims to address the growing 
demand for spectrum by encouraging sharing for unlicensed Wi-Fi use in 
the 5 GHz band. This band shows promise in paving the way for further 
economic growth and innovation. Since the bill's introduction, 
Committee leadership has taken an active role in working to ensure that 
testing and coordination move forward at an appropriate pace. What 
progress has occurred in testing the 5 GHz band since January 1, 2016?
    Answer. The Commission held a meeting with stakeholders in the 5 
GHz band on March 23, 2016, as an essential step in moving ahead with 
this process. In addition, the Commission continues to work 
collaboratively with other government agencies (DOT/NTIA) to ensure 
thorough and complete tests in the 5 GHz band to mitigate the risk of 
harmful interference with Intelligent Transportation Systems (ITS). We 
developed a three-phased testing plan that would involve reviewing 
equipment in the Columbia Lab and testing sample/prototypes off-campus 
utilizing DOT facilities and procedures. The next steps are to refresh 
the record of this proceeding and solicit prototype devices for 
testing.

    Question 2. What steps remain to be taken, and how will FCC 
implement them?
    Answer. We have a significant amount of work ahead of us, including 
initiating the testing process once appropriate prototypes are 
available. The stakeholder meeting was very useful in openly discussing 
some of the parameters for this process. We will need to review the 
record once comments are submitted, and we expect substantial input 
from stakeholders. We also will continue to meet with our agency 
counterparts and discuss ongoing work as we move toward reaching a 
mutually agreeable solution to this matter.

    Question 3. As you know, licensed radio broadcasters in many areas 
of the country face recurring harmful interference from ``pirate'' 
broadcasters illicitly broadcasting on their assigned frequency. What 
steps is FCC taking to enforce the prohibition against illicit radio 
operations?
    Answer. The FCC is committed to enforcement of the licensing 
requirements of the Communications Act, which the Commission has 
interpreted to prohibit unlicensed radio broadcasting. Last year, 20 
percent of the Enforcement Bureau's activities were directed towards 
pirate radio. That's more than any other area of enforcement. During FY 
2015, the Enforcement Bureau issued 130 enforcement actions for pirate 
operations. More than half of those actions were in the New York/New 
Jersey area.
    In addition to taking formal enforcement actions, the Commission is 
also addressing the issue by working more closely with broadcasters and 
raising public awareness about pirate radio. Commissioner O'Rielly has 
been a leader on this issue. I continue to be grateful for his guidance 
in keeping the Commission focused on all the ways that we can combat 
pirate radio. For example, earlier this month, the Commission issued an 
Enforcement Advisory about pirate radio and all five Commissioners 
signed letters addressed to local officials as well as groups that may 
provide support, intentionally or unintentionally, to pirate radio 
operations. The letters and accompanying Enforcement Advisory explain 
the harms caused by pirate radio and seek to enlist the assistance of 
local officials, landlords, and advertisers in identifying pirates and 
depriving them of financial support. The letters and Enforcement 
Advisory may be accessed on the Commission website at: https://
www.fcc.gov/document/enforcement-advisory-unauthorized-radio-
broadcasting
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Tom Udall to 
                            Hon. Tom Wheeler
    Question 1. Chairman Wheeler, I have concerns about Windstream's 
decision to decline up to $27 million in Connect America Fund Phase II 
(CAF II) support to improve broadband service in rural areas of New 
Mexico. The U.S. Census Bureau notes that roughly one third of New 
Mexicans households do not have Internet access at home. According to 
Federal Communications Commission data, only one in four New Mexicans 
living in rural areas has access to fast broadband speeds of 25 
megabits per second (Mbps). When will the Commission begin its 
``reverse auction'' process to direct support to those unserved areas 
of New Mexico that are impacted by Windstream's decision?
    Answer. I share your interest in bridging the rural digital divide 
in our country. The universal service program is one of the most 
important tools at our disposal to ensure that consumers and businesses 
in rural America have the same opportunities as their urban and 
suburban counterparts to be active participants in the 21sl century 
economy. The Commission is focused on updating the universal service 
high-cost program to ensure that we are delivering the best possible 
voice and broadband experiences to rural areas while providing a 
climate for increased broadband expansion, all within the confines of 
the Connect America Fund's budget.
    Last September, I circulated an Order for the consideration of my 
fellow Commissioners that would address the framework for the CAF Phase 
II competitive bidding process. In December, I circulated an updated 
draft Order that addressed concerns raised by other commissioner 
offices. I remain committed to completing the CAF Phase II auction 
framework as expeditiously as possible, and I will continue to work 
with my colleagues to resolve this important matter promptly.

    Question 2. How will the Commission ensure there will be acceptable 
bids from broadband providers for the most difficult areas to serve?
    Answer. One of the primary policy goals for this competitive 
bidding process is to ensure widespread participation from all 
providers that can deliver a high-quality service. Simply put, more 
competition between providers means that finite universal service 
funding will be used efficiently to deliver the best possible 
solutions. As the Commission moves forward with finalizing the 
structure of the CAF Phase II reverse auction, we will take into 
consideration the issues and concerns presented by all stakeholders and 
give full attention to the best ways to ensure that rural communities 
have access to robust and reliable broadband service.

    Question 3. According to the Commission's 2016 Broadband Progress 
report, 1.6 million people living on Tribal lands lack access to 
broadband. Recognizing the challenge of bridging this digital divide, 
the Commission previously proposed a ``Tribal coefficient'' in its 
quantile regression analysis (QRA) for universal support for high cost 
areas. Last year, I sent you a letter asking you to consider a proposal 
for a ``Tribal Broadband Factor'' to help accelerate broadband 
deployment on tribal lands. Will you commit to completing by the second 
quarter of this year the Tribal Broadband Factor proceeding currently 
before the FCC?
    Answer. The Commission recently adopted an Order to modernize 
universal support for rate-of-return carriers. A Further Notice 
included with the Order specifically seeks comment on additional 
reforms, including the Tribal Broadband Factor proposal referenced in 
your letter, to further promote broadband investment and deployment on 
unserved and underserved Tribal lands. As you and I have discussed, I 
will take action on this important issue before the end of 2016. I 
commit to continue working with you to bring technological 
opportunities to people living on Tribal lands lacking access to 
broadband services.

    Question 4. The Commission's Tribal Mobility Fund provided $50 
million in wireless support to underserved Tribal areas. Of that total, 
over $5 million in support helped bring mobile broadband service to 
Picuris Pueblo in Taos County and areas of the Navajo Nation, which 
spans New Mexico, Arizona, and Utah. When will the Commission complete 
a Tribal Mobility Fund Phase II?
    Answer. I am committed to ensuring that underserved Tribal areas 
receive access to mobile broadband services that are reasonably 
comparable to the services provided in the rest of this country. As you 
know, in 2011, the Commission proposed to provide $500 million annually 
in ongoing financial support to promote mobile broadband and high 
quality voice services in areas where such services cannot be sustained 
or extended absent Federal support. Of that $500 million annually, the 
Commission proposed providing up to $100 million for Tribal areas. In 
the last half of 2014, the Commission received comment on a number of 
questions in a Further Notice of Proposed Rulemaking regarding how 
universal service funds should be targeted in a Mobility Fund Phase II. 
This inquiry was in light of the substantial roll-out of 4G LTE by many 
of the country's mobile networks. The Commission proposed to retarget 
Mobility Fund Phase II support to preserve mobile service where it only 
exists today due to support from the universal service fund and to 
extend 4G LTE service to areas where it does not exist. It also sought 
further comment on a Tribal Mobility Fund Phase II. The proposal for an 
ongoing Tribal Mobility Fund Phase II remains under consideration as 
Commission staff reviews the record regarding possible next steps for a 
Mobility Fund Phase II.

    Question 5. Chairman Wheeler, the Federal agency overseeing 
broadband providers and Internet policy should be a flagship agency 
when it comes to using the best IT tools available. What are the most 
important IT systems at the Commission that need to be modernized? 
While I am aware that the FCC is an independent agency, how many of the 
FCC's IT investments are cloud-based services (Infrastructure as a 
Service, Platform as a Service, Software as a Service, etc.)? What 
percentage of the department's overall IT investments are cloud-based 
services? How has this changed since 2011?
    Answer. Like much of the Federal Government, the FCC has faced 
substantial challenges in modernizing legacy IT systems. During the 
past three years, flat budgets have limited modernization efforts, 
although the FCC has been able to make significant progress after 
receiving reprogramming permission from both Senate and House 
appropriators. We were saddled with over 200 legacy systems, many of 
which were antiquated.
    This past September, the FCC undertook and completed the ``server 
lift'', moving our legacy servers to a secure, off-site hosting 
provider, leading to a cost avoidance of over $10 million. In fact we 
were able to reduce O&M spend from 85 percent to or live caller's ability 
to recognize `triple-tones' that identify and record disconnected 
numbers; (6) establish policies for determining whether a number has 
been reassigned if there has been no response to a `two-way' call after 
a period of attempting to contact a consumer; and (7) enable customers 
to update contact information by responding to any text message they 
receive, which may increase a customer's likelihood of reporting phone 
number changes and reduce the likelihood of a caller dialing a 
reassigned number.''
    In sum, the Commission concluded that ``the existence of phone 
number database tools combined with other best practices, along with 
one additional post-reassignment call, together make compliance [with 
the Telephone Consumer Protection Act] feasible.''

    Question 9. The pay TV set-top box NPRM proposes to expand the 
scope of the term ``navigation device'' to include ``software or 
hardware performing the functions traditionally performed in hardware 
navigation devices.'' On what theory does the Commission base this 
interpretation and expansion of the statutory term's scope to include 
software? Does software that is not integral to the operation of a 
navigation device fall within the scope of Section 629?
    Answer. In paragraphs 21-24 of its rulemaking, the Commission 
describes its legal authority to implement the proposed rules. In 
critical part, it notes that the Communications Act does not define the 
terms ``navigation device'' or ``interactive communications equipment, 
and other equipment.'' However, it notes that Section 629 covers 
equipment used by consumers to access multichannel video programming 
and that software features have long been essential elements of such 
equipment.
    The Commission has invited comment on this interpretation of its 
legal authority. I look forward to reviewing the record on this subject 
and, in particular, any additional legal analysis on the scope of the 
agency's authority.

    Question 10. How does the NPRM propose or contemplate preventing 
third party devices or applications from adding unapproved or 
additional advertising alongside MVPD service content? How does the 
NPRM propose to protect and secure interactive MVPD programming and 
services when accessed through third party devices or applications? How 
does the NPRM propose to enforce such protection and security measures?
    Answer. In paragraph 80 of its rulemaking, the Commission notes 
that it has not previously seen problems related to advertising, 
service presentation, and improper manipulation of content in the 
existing CableCARD regime. However, the Commission seeks comment on 
whether or not new rules are needed and asks if copyright law 
adequately protects against any concerns that may arise. In addition, 
in paragraphs 70 and 71 of its rulemaking, the Commission notes that 
licensing and certification will play an important role in ensuring 
that content is protected as intended. The Commission seeks comment on 
the role that licensing and certification can play, as well as comment 
on alternative approaches the Commission could take to address content 
security and protection.
                                 ______
                                 
      Response to Written Question Submitted by Hon. Roy Blunt to 
                        Hon. Jessica Rosenworcel
    Question. The policy choices facing the Commission are complicated, 
and require bipartisanship to produce consensus that balance the 
various concerns of multiple stakeholders. In the past, analysts have 
illustrated that votes at the Commission tended to be unanimous, but 
there has been a stark increase in party-line votes under the current 
Chairman.\1\
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    \1\ https://techpolicyinstitute.org/2016/02/16/the-partisan-fcc/
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    Will you commit to working with your fellow commissioners to forge 
bipartisan consensus for the remainder of 2016, or should the United 
States Senate expect to see continued party-line votes?
    Answer. Yes.
                                 ______
                                 
      Response to Written Questions Submitted by Hon. Ted Cruz to 
                        Hon. Jessica Rosenworcel
    Question 1. In the Open Internet Order, the Federal Communications 
Commission (FCC) revised the definition of ``public switched network'' 
to mean ``the network that . . . use[s] the North American Numbering 
Plan, or public IP addresses, in connection with the provision of 
switched services'' (See para. 391 (emphasis added)). Although the FCC 
disclaimed any intent to ``assert'' jurisdiction over the assignment or 
management of IP addresses by the Internet Numbers Registry System (see 
id. at note 1116), the FCC's decision to equate telephone numbers with 
IP addresses nonetheless gives the FCC statutory jurisdiction over IP 
addresses as a matter of law. Over 20 years ago the FCC concluded that 
Section 201 of the Communications Act gave it plenary jurisdiction over 
telephone numbers, because ``telephone numbers are an indispensable 
part'' of the duties that section 201 imposes on common carriers (See 
Administration of the North American Numbering Plan, Notice of Proposed 
Rulemaking, FCC 94-79,  8 (1994)). IP addresses are likewise an 
indispensable part of the duties the FCC imposed on ISPs under section 
201, including the duty to connect to ``all or substantially all 
Internet endpoints''.
    How can the FCC uphold the public interest requirements in section 
201 of the Act if it refuses to assert its statutory authority over an 
indispensable part of the public switched network?
    Answer. I believe that the Commission's approach is consistent with 
the historic execution of its functions under the Communications Act. 
As you note, the Commission adjusted its interpretation of the term 
``public switched network'' in order to better ``reflect the current 
network landscape.'' Specifically, the Commission updated the 
definition of public switched network to mean ``the network that 
includes any interexchange carriers, and mobile service providers, that 
use the North American Numbering Plan, or public IP addresses, in 
connection with the provision of switched services.'' This update 
reflects the fact that the ``the term `public switched network' should 
not be defined in a static way,'' and recognizes ``that the network is 
continuously growing and changing because of new technology and 
increasing demand.'' Moreover, as the Commission made clear, ``[t]his 
definitional change to our regulations in no way asserts Commission 
jurisdiction over the assignment and management of IP addresses by the 
Internet Numbers Registry System.'' In other words, the Commission 
updated its definition of public switched network to include the 
widespread use of IP addresses, but did not in any way assert 
jurisdiction over IP addresses.

    Question 1a. If the FCC believes regulation of IP numbers used to 
connect end points on the public switched telephone network is 
unnecessary, why hasn't it forborne from the regulation of telephone 
numbers?
    Answer. The Commission has plenary authority over numbering 
pursuant to the Communications Act. Section 251(e)(1) states that 
``[t]he Commission shall have exclusive jurisdiction over those 
portions of the North American Numbering Plan that pertain to the 
United States.'' Among other things, this explicit grant of authority 
has been the foundation for Commission policies that ensure that 
consumers can keep their existing phone number when switching to a new 
phone carrier, that prevent premature exhaust of numbers in an area 
code, and that enable providers to have access to numbering resources. 
To date, the Commission has not forborne from these policies and rules 
because they remain critical to the successful function of the public 
switched network.
                                 ______
                                 
     Response to Written Question Submitted by Hon. Deb Fischer to 
                        Hon. Jessica Rosenworcel
    Question. Commissioner Rosenworcel, in discussing the FCC's recent 
proposal on set-top boxes, nearly everyone has said that they would 
like to see the marketplace continue to move away from set-top boxes 
and towards more innovative methods of allowing customers to access 
video content. New technologies have increased competition in the video 
market, and companies like Netflix, Hulu, Roku, as well as a wide 
variety of video applications are providing new options to consumers. 
Further, many cable and satellite companies are moving away from set 
top boxes and towards application-based platforms. How do we continue 
to encourage innovation in the video marketplace while avoiding 
technology mandates and burdensome regulations?
    Answer. Section 629 of the Communications Act directs the 
Commission to help develop a competitive market for navigation devices, 
or set-top boxes. Despite past efforts, a competitive market for these 
devices has not emerged. In fact, today 99 percent of customers rent 
their set-top boxes from their pay-television provider. This is a 
situation I believe the agency needs to address.
    At the same time, I share your concerns about stifling innovation 
in the marketplace. There is a new generation of viewers who want 
nothing to do with a set-top box and are choosing to cut the cord. 
Plus, new service types are emerging fast--faster than any rulemaking 
process at the agency. What new video models succeed, what degree of 
self-curated viewing they enable, and what prices consumers are willing 
to pay are still up for grabs.
    As a result, I believe the Commission should be guided by the 
statutory charge to develop a competitive market but remain mindful 
that the ways we watch are changing.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                        Hon. Jessica Rosenworcel
    Question 1. Commissioner Rosenworcel, in your testimony before the 
Senate Commerce Committee, you said ``the unsung hero of the wireless 
revolution is infrastructure . . . because no amount of spectrum will 
lead to better wireless service without good infrastructure'' and 
rightly pointed out that we should ``take a comprehensive look at tower 
siting on Federal lands--which make up as much as one-third of our 
national real estate.''
    As you know, 85 percent of Nevada is Federal lands and many of my 
constituents who live, work, and visit those areas lack quality 
service. In 2009, the FCC adopted a shot clock for the municipal zoning 
process, which was later upheld by the Supreme Court and has 
significantly improved the deployment of wireless infrastructure.
    Since the FCC has no authority over Federal lands, there is no 
similar shot clock and as a result infrastructure requests can take 
many months or even years to get a response.
    Do you support Congress legislating in this space and adopting a 
shot clock for Federal agencies--such as the 270-day limit included in 
the MOBILE NOW Act approved by the Committee--to respond to wireless 
infrastructure requests?
    Answer. Yes.

    Question 2. For years, I have believed that the way in which rules 
are processed at the Commission lacks transparency and is detrimental 
to the American public. My FCC Process Reform Act would address these 
transparency and accountability issues for the sake of consumers and 
the industries supporting innovation and our economy.
    For example, the public has no idea the specific language of the 
rules the Commission is voting on until after they are passed. We saw 
that with the net neutrality rules that were pushed through this time 
last year, and we saw it a few weeks ago when the FCC voted on the 
proposal related to set-top boxes.
    In fact, Chairman Wheeler said during that meeting on set-top 
boxes: ``There have been lots of wild assertions about this proposal 
before anybody saw it.'' The problem is that the public doesn't know 
what to expect from the rule--there is no certainty for those on the 
outside.
    Do you believe the public has a right to see the specific language 
of a rule before it is voted on by the Commission?
    Answer. As a general matter, I believe that the Commission should 
make available proposed rule text in any Notice of Proposed Rulemaking 
when initiating a proceeding that could lead to significant changes to 
agency policy. This affords the public a right to comment in a fulsome 
way before action on final rules are taken.

    Question 3. As someone committed to protecting Americans' and 
Nevadans' privacy, especially related to personally identifiable 
information (PII), I have a questions regarding the recent set-top box 
Notice of Proposed Rulemaking.
    Currently, pay-TV companies must follow strong privacy protections 
to ensure consumers' personal information is not collected, utilized, 
or shared for non-service related purposes. How does this NPRM 
contemplate applying and enforcing these same privacy to any new 
suppliers entering the set-top box market? Does the FCC have the legal 
authority to enforce Title 6 privacy standards on third parties?
    Answer. The Commission's rulemaking proposes that competitive 
device manufacturers certify that they will adhere to the same privacy 
protections imposed on multichannel video programming distributors. It 
also seeks comment on the best way to implement and enforce this 
certification process, as well as the scope of its legal authority to 
do so. In addition, the rulemaking asks about state privacy laws that 
restrict how personally identifiable information may be used and 
whether or not such laws provide a level of consumer privacy protection 
that is comparable to what is required under the Communications Act. 
This is an important issue and I look forward to record that develops 
in response to these questions.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Steve Daines to 
                        Hon. Jessica Rosenworcel
    Question. Commissioner Rosenworcel, you said during your testimony 
that you agreed that small businesses should be exempted from some of 
the onerous regulatory burdens. Do you agree that small businesses 
should receive a permanent exemption from the Commission's Title II 
enhanced transparency rules?
    Answer. Yes. I support exempting small providers of broadband 
Internet access services from the enhanced transparency rule. 
Therefore, I believe that the Commission should adopt a permanent 
exemption, or at a minimum, a further extension of the exemption from 
the enhanced transparency rule for these providers.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Claire McCaskill to 
                        Hon. Jessica Rosenworcel
    Question 1. One of the best tools the Commission has in overseeing 
the Lifeline program is the ability to take aggressive enforcement 
against carriers violating the rules of the program, companies that are 
abusing both the consumers who use the program as well as the rate 
payers that fund it. That's why I applauded a flurry of announced 
enforcement activity from September 2013 through February 2014. During 
that time the FCC issued Notices of Apparent Liability (NALs) totaling 
more than $94 million in proposed fines for 12 companies participating 
in the Lifeline program. Some of those notices are more than two-and-a-
half years old yet not a penny of that money has yet been collected. 
Will you press the Enforcement Bureau to either issue forfeiture 
orders, reach settlements, or dismiss these 12 NALs in an expeditious 
manner?
    Answer. I agree with you that waste, fraud, and abuse cannot be 
tolerated in the Lifeline program. I understand that the matters you 
have identified have been referred to the Commission's Office of 
Inspector General. In light of the Office of Inspector General's 
independent nature, I believe it would be inappropriate for me to 
intervene on these matters.

    Question 2. To avoid this situation in the future, would you 
support a shot clock for resolution of NALs? If so, what do you believe 
would be an acceptable amount of time?
    Answer. Yes. Timely disposition of matters before the Commission, 
including law enforcement cases, is important. The precise time for 
resolution of Notices of Apparent Liability would need to both provide 
adequate time for law enforcement to investigate any additional facts 
and parties that are the subject of investigation to fully exercise 
their rights as a matter of due process.

    Question 3. The Bipartisan Budget Act of 2015 included an unwise 
and harmful provision to exempt debt collection calls on behalf of the 
Federal Government from Telephone Consumer Protection Act (TCPA) rules 
that prohibit robocalls to cell phones. Although the provision was 
ostensibly aimed at collecting student loan debt, the loophole was 
potentially widened either further by adoption of the Fixing America's 
Surface Transportation (FAST) Act in December, which requires the 
Internal Revenue Service to contract with private debt collectors to 
collect unpaid taxes. I have held hearings in this committee's Consumer 
Protection Subcommittee and at the Senate Aging Committee on robocalls. 
We should be making it harder--not easier--for this number one consumer 
complaint to continue, especially when there is no evidence that 
robocalls are an effective means of reaching consumers. Until we are 
successful in repealing this provision, the FCC is tasked with adopting 
rules to implement it. Would you support rules that require companies 
collecting debt on behalf of the Federal Government to register with 
the FCC in advance of doing so?
    Answer. While the Budget Act does not require the Commission to 
maintain a registry of companies that call to collect a debt on behalf 
of the United States, I believe this is an idea that could merit 
further exploration. However, before imposing such a requirement, the 
Commission will need to explore the free speech implications of such a 
requirement, the agency's capacity to maintain an up-to-date registry, 
and whether or not there are comparable registries that have been 
maintained in other contexts.

    Question 4. Would you support rules that limit calls from companies 
collecting debt on behalf of the Federal Government to no more than one 
call per consumer per month?
    Answer. The Budget Act specifically provides that the Commission 
``may restrict or limit the number and duration of calls made to a 
telephone number assigned to a cellular telephone service to collect a 
debt owed to or guaranteed by the United States.'' Accordingly, I 
expect that the Commission will seek public comment on how to implement 
the law in this regard before adopting final rules.

    Question 5. What impact do you believe this exemption will have on 
the ability of the commission's Enforcement Bureau to differentiate 
between calls that are now exempt from TCPA and those that are not, 
particularly when exempt calls and non-exempt calls could be coming 
from the same call centers?
    Answer. Because we are only beginning to implement the Budget Act, 
I believe it is too soon to tell how this exemption might impact the 
Commission's enforcement functions or the private right of action under 
the Telephone Consumer Protection Act. However, I believe this is a 
situation that will require monitoring going forward. At the very 
least, it may prove confusing for enforcement and it would be 
unfortunate if this situation resulted in more consumers receiving 
unwanted robocalls not subject to this exemption.

    Question 6. The Chairman recently received a letter from Senator 
Blunt and me regarding the upcoming reverse auction portion of Connect 
America Fund, Phase II (CAF II).
    For CAF II in Missouri, there is approximately $400 million 
available over the next 10 years to bring broadband to unserved parts 
of the state. Can you assure me that the money will be spent in 
Missouri and not be reallocated to other areas of the country?
    Answer. I agree that we should put a premium on making sure that 
states do not lose out where the price cap carrier turned down its 
offer of support. As you know, three of the four price cap carriers in 
Missouri accepted Connect America Fund Phase II funding totaling over 
$93.7 million annually for broadband services in the state. However, 
one price cap carrier serving the state declined its offer of support. 
Going forward, I am hopeful that we can find a way to target funds to 
states where price cap carriers chose not to accept their offer of 
support while at the same time maximizing the overall impact of auction 
funding.

    Question 7. As you consider the framework to govern the reverse 
auction to award the remaining dollars available in CAF II, how will 
you ensure that funded projects not only meet today's broadband 
definition, but are future proof and scalable to keep pace with ever-
changing technology and increasing needs for higher speed broadband?
    Answer. As we consider a framework to evaluate projects in the 
forthcoming CAF II auction, we will need to make sure that we provide 
consumers with meaningful broadband opportunities both today and in the 
future. Our framework should be nimble enough to evaluate capabilities 
from different project bid proposals, including how those project bids 
stack up today and keep pace with the obligations we set forth over 
time.

    Question 8. In 1993, through the Omnibus Budget Reconciliation Act 
of 1993, Congress directed the FCC to develop regulations governing the 
competitive bidding of spectrum. Included in the statutory instructions 
from Congress was a requirement that the Commission ``ensure that small 
businesses, rural telephone companies, and businesses owned by members 
of minority groups and women are given the opportunity to participate 
in the provision of spectrum-based services.'' To meet this 
congressional mandate the FCC created the Designated Entity (DE) 
program. The program's worthy goal of providing a mechanism for 
legitimate small businesses to partner with larger ones in spectrum 
auctions has undoubtedly helped many small businesses win spectrum 
licenses over the past 20+ years. But it has also provided a blueprint 
for large, multinational, multi-billion-dollar corporations to game the 
system and receive discounts on their bids. What assurances can you 
provide that the commission will do a better job of monitoring 
potential abuse of the DE program in the upcoming incentive auction 
than it did in the recent AWS-3 auction?
    Answer. I agree that the Commission needs to do a better job of 
monitoring abuse in the designated entity program. In July 2015 the 
agency put in place a framework that will help do just that in the 
auctions ahead. In particular, the Commission capped the total value of 
bidding credits a designated entity can receive, strengthened 
attribution rules limiting the amount of spectrum an interest holder in 
a designated entity can use, and amended the joint bidding rules by 
generally prohibiting agreements involving a shared strategy for 
bidding at auction. Taken together these reforms are smart, balanced, 
and bound to protect against future abuse. However, I believe the 
Commission will need to continue to monitor the designated entity 
program to protect against any further misconduct.

    Question 9. When Congress and the FCC were establishing the 
framework for spectrum auctions more than 20 years ago it probably made 
sense to ensure small businesses were able to compete. But a lot has 
changed. The cost of entering the incredibly expensive wireless 
infrastructure industry is far greater than it was in the early 1990s. 
A company that truly has revenues of $40 million, $15 million, or $3 
million--the thresholds set by the commission for the various levels of 
bidding credits--would be unlikely to enter the industry today. So is 
it time to look at simply eliminating the DE program to prevent future 
abuse?
    Answer. In Section 309 of the Communications Act Congress charges 
the Commission with ``promoting economic opportunity and competition'' 
when developing the bidding methodologies that govern the auctions of 
our airwaves. Moreover, it tasks the Commission with ensuring ``that 
small businesses, rural telephone companies and businesses owned by 
members of minority groups and women are given the opportunity to 
participate in the provision of spectrum-based services.'' I believe 
that the Commission has a duty to provide policies consistent with 
these provisions in the law. Should Congress choose to revise these 
provisions, the Commission will need to adjust its policies 
accordingly.
                                 ______
                                 
 Response to Written Questions Submitted by Hon. Richard Blumenthal to 
                        Hon. Jessica Rosenworcel
    Question 1. As you know, to address increasing demand for wireless 
broadband access, Congress directed the FCC to conduct an incentive 
auction, to encourage broadcast licensees to voluntarily relinquish 
their spectrum rights in exchange for a share of the proceeds in 
auctioning this spectrum to new licensees. In many parts of the 
country, contiguous spectrum will be freed up by ``repacking'' the 
channels to which remaining television broadcasters are currently 
assigned. Do you believe there is enough money in the TV Broadcaster 
Relocation Fund to cover repacking-related expenses incurred by 
broadcasters?
    Answer. Yes. At this point in the auction process, I believe that 
the $1.75 billion fund established by Congress will be sufficient to 
cover the reasonable costs and expenses associated with the relocation 
of stations following the incentive auction. I recognize, however, that 
there are estimates from the broadcasting community that suggest that 
the cost of relocation may be slightly greater than the amount in 
existing law. If in the future the current fund proves insufficient, 
the Commission should notify Congress and Congress may wish to take 
steps to provide additional support.

    Question 2. If the 39 month repack time-frame and the $1.75 billion 
relocation fund are insufficient, does the FCC have the flexibility in 
the statute to ensure consumers and communities won't be negatively 
affected by signals going off the air?
    Answer. Yes.

    Question 3. If so, how can the FCC ensure that broadcasters have 
sufficient time to move without being forced off the air, if factors 
outside their control delay their ability to reconfigure their 
facilities?
    Answer. The Commission has already adopted policies designed to 
facilitate a smooth transition for broadcasters and their viewers 
during the repacking process. For instance, in the Incentive Auction 
Report and Order, the Commission determined that stations required to 
repack following the auction will receive a construction period 
tailored to their specific circumstances. Stations also will have the 
opportunity to request a one-time, six-month extension of construction 
permits if they experience delays or unexpected challenges. In 
addition, the Commission will work with stations to help mitigate any 
service disruptions if construction of post-auction facilities is not 
completed prior to the 39-month deadline for all stations to cease 
operating on their pre-auction channels. I believe these policies will 
support an orderly transition during the 39-month period. But I also 
recognize that unexpected difficulties may arise, including pressures 
on the capacities of tower and transmission companies as well as 
regional weather events. I believe that the Commission must work with 
Congress to ensure that such difficulties do not jeopardize a smooth 
transition or harm viewer access to free, over-the-air television.

    Questions 4. Do you agree that no non-participating broadcaster 
should be forced off the air, or forced to cover the costs of 
transitioning their signal, to accommodate the repack?
    Answer. Yes. However, I recognize that our efforts will necessarily 
be bound by the law. Specifically, the Middle Class Tax Relief and Job 
Creation Act required the Commission to make ``all reasonable efforts 
to preserve'' the service areas of full-power and Class A television 
stations that do not choose to participate in the auction and set aside 
$1.75 billion to cover any necessary transition.
                                 ______
                                 
     Response to Written Question Submitted by Hon. Joe Manchin to 
                        Hon. Jessica Rosenworcel
    Question. In your statement voting for adoption of the set-top box 
notice of proposed rulemaking (NPRM), you said this rulemaking is 
complicated. You also said that the most successful regulatory efforts 
are simple ones and more work needs to be done to streamline this 
proposal. Could you talk more about that?
    Answer. Based on what we know at the start of this proceeding, 
there are difficult issues to consider, including copyright, privacy, 
and diversity. There are also technical challenges related to 
information streams, standards, and security. My hope is that the 
record we receive will guide the Commission to better understand the 
steps necessary to foster set-top box competition. I firmly believe 
that the simpler regulatory proposals are, the more likely they are to 
be successful in reaching their goals.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
                             Hon. Ajit Pai
    Question 1. Following the reclassification of broadband Internet 
access service as a Title II public utility, Chairman Wheeler indicated 
that the FCC will propose new privacy regulations. The Federal Trade 
Commission (FTC) already has extensive experience in protecting 
consumer privacy, and consumers and business already have experience in 
applying the FTC's privacy rules and precedents; the Commission has 
virtually no such experience beyond the very narrow confines of rules 
implementing Sec. 222. Why would the Commission create a new, likely 
inconsistent set of rules rather than adopting the FTC's privacy 
protections? Given that the Commission's rules will only apply to BIAS 
providers, isn't there a significant likelihood that functionally 
identical activities on a smartphone will be governed by completely 
different rules based upon who is providing the service?
    Answer. I agree that adopting rules inconsistent with the FTC's 
rules would distort the marketplace to favor some service providers 
over others. Indeed, I agree with Chairman Wheeler's testimony to the 
House Energy and Commerce Committee that ``there should be a uniform 
expectation of privacy'' across the online ecosystem. That's why many 
are perplexed that the FCC seems reluctant to adopt the same privacy 
protections for ISPs that the FTC has long applied to edge providers.

    Question 2. I understand that you are close to finalizing action on 
an order that would address the standalone broadband issue that many in 
Congress have written to you about over the past several years and also 
adopt some new limits and other measures related to universal service 
support for rate of return providers. Do you commit to work quickly and 
collaboratively with this committee and with affected stakeholders to 
the extent any adverse or unintended consequences arise out of the 
reforms?
    Answer. Yes. And to the extent that our efforts are intended to 
fulfill our commitment to this Committee, I believe the FCC should make 
the reforms public and allow you and the American public to provide 
feedback before the Commission votes.

    Question 3. Ensuring that rural and urban consumers have access to 
reasonably comparable services at reasonably comparable rates is a 
fundamental statutory principle of universal service. Are you confident 
that the standalone broadband solution you are poised to adopt will do 
that--specifically, will it allow rural consumers to get standalone 
broadband at rates reasonably comparable to their urban counterparts? 
If not, what more do you think the FCC will need do to ensure such 
comparability?
    Answer. I am still reviewing the draft order to determine whether 
it meets our universal service mandate. In the meantime, I have asked 
Chairman Wheeler to release it to the public so that all stakeholders 
can see the details and let their voices be heard before a vote. 
Commissioner O'Rielly has supported my request, but Chairman Wheeler 
has not yet responded to it.

    Question 4. I have heard concerns that the methodology used in the 
2014 order to determine the local rate floor for voice service has led 
to rates in some rural areas, including parts of South Dakota, that are 
not reasonably comparable to those services provided in urban areas. 
Given this concern, when do you plan to act on the petition for 
reconsideration filed by several rural associations regarding the rate 
floor methodology? Do any other Commissioners have thoughts regarding 
this matter?
    Answer. I am not surprised that the rate floor will lead to 
unreasonable rates for your constituents--the whole purpose of the rule 
is to increase rates in rural America without saving the Universal 
Service Fund a single dime. That's why I do not support the rural rate 
floor and have repeatedly called for its repeal.

    Question 5. Last July, the FCC released an omnibus declaratory 
ruling on the Telephone Consumer Protection Act (TCPA). TCPA litigation 
has increased dramatically in the last decade. What considerations did 
the Commission give to the impact its ruling would have on businesses, 
both large and small, that need to reach their customers for legitimate 
business purposes?
    Answer. The Commission minimized, if not ignored altogether, the 
Order's impact on legitimate businesses. That's why I said in my 
dissent that the Order would make abuse of the TCPA much, much easier 
and that the primary beneficiaries would be trial lawyers, not the 
American public.
    The past is likely to be prologue. In my dissent, for instance, I 
highlighted the case of Rubio's, a West Coast restaurateur. Rubio's 
sends its quality-assurance team text messages about food safety 
issues, such as possible foodborne illnesses, to better ensure the 
health and safety of Rubio's customers. When one Rubio's employee lost 
his phone, his wireless carrier reassigned his number to someone else. 
Unaware of the reassignment, Rubio's kept sending texts to what it 
thought was an employee's phone number. The new subscriber never asked 
Rubio's to stop texting him--at least not until he sued Rubio's in 
court for nearly half a million dollars. The Commission's recent TCPA 
action will release the hounds of the trial bar upon many more small 
businesses in similar fashion.

    Question 6. Many small businesses seek to improve their efficiency 
and customer relationships by providing information to their customers 
through the use of modern dialing technologies. The FCC's recent 
interpretation of the term ``autodialer'' in the TCPA declaratory 
ruling, however, could sweep in any number of modern dialing 
technologies. Other than using a rotary phone, what other technologies 
can small businesses feel comfortable using without exposing themselves 
to TCPA litigation risk?
    Answer. If I were counsel to a small business, I would advise it to 
use only a rotary phone given the business-wrecking expense of a TCPA 
class-action suit. That's because the FCC's definition of 
``autodialer'' appears to sweep in every other dialing technology 
currently in existence.

    Question 7. By establishing liability after a mere one-call 
exception, the Commission's ruling creates a perverse incentive for 
incorrectly-called parties to allow or even encourage incorrect calls 
to continue, rather than notify the calling party of the error. These 
continuing incorrect calls thus become potential violations and the 
basis for monetary penalties sought through litigation. What will you 
do to repair this perverse incentive?
    Answer. As I stated in my dissent, the Order's strict liability 
approach leads to perverse incentives. Most significantly, it creates a 
trap for law-abiding companies by giving litigious individuals a reason 
not to inform callers about a wrong number. This will certainly help 
trial lawyers update their business model for the digital age. This 
isn't mere hypothesis, as shown by the case of Rubio's, discussed 
above.
    I hope that the FCC or the courts will soon reject this reckless 
interpretation and replace it with the ``expected-recipient'' approach 
to incorrectly-called parties. Under this approach, TCPA liability 
would not apply if the calling party dialed a number reasonably 
expecting to reach Person A, even if Person B actually answered the 
phone.

    Question 8. Has the Commission considered providing a safe harbor 
for a calling party that reasonably relies on available customer phone 
number records to verify the accuracy of a customer's phone number?
    Answer. The Commission explicitly rejected that approach by 
adopting a strict liability standard. In my view, a safe harbor would 
be consistent with the Act. The Commission has long employed safe 
harbors for reasonable private conduct in other contexts, and there is 
no reason why it couldn't have done so here.

    Question 9. The pay TV set-top box NPRM proposes to expand the 
scope of the term ``navigation device'' to include ``software or 
hardware performing the functions traditionally performed in hardware 
navigation devices.'' On what theory does the Commission base this 
interpretation and expansion of the statutory term's scope to include 
software? Does software that is not integral to the operation of a 
navigation device fall within the scope of Section 629?
    Answer. I do not believe that such software falls within the scope 
of Section 629. I did not vote for the NPRM that proposed to expand the 
scope of the rules implementing Section 629 to include software, and I 
will leave it to those who supported the NPRM to explain their 
reasoning.

    Question 10. How does the NPRM propose or contemplate preventing 
third party devices or applications from adding unapproved or 
additional advertising alongside MVPD service content? How does the 
NPRM propose to protect and secure interactive MVPD programming and 
services when accessed through third party devices or applications? How 
does the NPRM propose to enforce such protection and security measures?
    Answer. The NPRM does not propose any rules to prohibit third party 
devices or applications from adding unapproved or additional 
advertising alongside MVPD service content. Neither does the NPRM 
propose any rules to prohibit third party devices or applications from 
removing the advertising provided by programmers and replacing it with 
their own advertising. In its own words, the NPRM proposes to leave 
``the treatment of advertising to marketplace forces.'' This is one of 
the principal reasons why I opposed the NPRM. I will leave it to those 
who supported the NPRM to explain how it proposes to protect and secure 
interactive MVPD programming and enforce such protection and security 
measures.
                                 ______
                                 
      Response to Written Questions Submitted by Hon. Ted Cruz to 
                             Hon. Ajit Pai
    Question 1. In the Open Internet Order, the Federal Communications 
Commission (FCC) revised the definition of ``public switched network'' 
to mean ``the network that . . . use[s] the North American Numbering 
Plan, or public IP addresses, in connection with the provision of 
switched services'' (See para. 391 (emphasis added)). Although the FCC 
disclaimed any intent to ``assert'' jurisdiction over the assignment or 
management of IP addresses by the Internet Numbers Registry System (see 
id. at note 1116), the FCC's decision to equate telephone numbers with 
IP addresses nonetheless gives the FCC statutory jurisdiction over IP 
addresses as a matter of law. Over 20 years ago the FCC concluded that 
Section 201 of the Communications Act gave it plenary jurisdiction over 
telephone numbers, because ``telephone numbers are an indispensable 
part'' of the duties that section 201 imposes on common carriers (See 
Administration of the North American Numbering Plan, Notice of Proposed 
Rulemaking, FCC 94-79,  8 (1994)). IP addresses are likewise an 
indispensable part of the duties the FCC imposed on ISPs under section 
201, including the duty to connect to ``all or substantially all 
Internet endpoints''.
    How can the FCC uphold the public interest requirements in section 
201 of the Act if it refuses to assert its statutory authority over an 
indispensable part of the public switched network?
    Answer. It cannot. I do not believe that Congress has given the FCC 
any role with respect to regulating the Internet--instead, Congress 
told us to leave the Internet ``unfettered by Federal or State 
regulation.'' Communications Act Sec. 230(b)(2). And so under my view, 
the FCC has no statutory authority over IP addresses.

    Question 1a. If the FCC believes regulation of IP numbers used to 
connect end points on the public switched telephone network is 
unnecessary, why hasn't it forborne from the regulation of telephone 
numbers?
    Answer. As I stated in my dissent to the Title II Order, the FCC's 
approach to forbearance in this area has been scattershot and 
unprecedented. As such, I do not know why the agency did not forbear in 
this particular instance.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Ron Johnson to 
                             Hon. Ajit Pai
    Question 1. At the FCC Oversight hearing I asked Chairman Wheeler 
why the FCC decided not to release a public notice requesting more 
comment on places where the Chairman's office believed the record to be 
thin. Chairman Wheeler responded that he hit pause for the purpose of 
``enriching the record'' because he knew ``the Big Dogs are going to 
sue'' and wanted to make sure ``all the i's were dotted and the t's 
crossed.'' Because no public notice was ever issued, it appears that 
the FCC chose expediency over process. What effect does that have on 
the overall Open Internet Order?
    Answer. In rubber-stamping President Obama's plan to regulate the 
Internet, the FCC violated the procedural requirements of the 
Administrative Procedure Act (APA). The FCC never proposed the rules 
being adopted, violating the APA's notice-and-comment requirement. In 
the Notice, the FCC proposed rules exclusively under section 706 of the 
Telecommunications Act. Every single proposal and every single 
tentative conclusion in the Notice was tailored to avoid reclassifying 
broadband as a Title II service. Yet that's exactly what the FCC did in 
the Title II Order. No one could have anticipated the number or nature 
of the hoops the Order would jump through to reclassify broadband. Nor 
could anyone have anticipated the Order's 49 separate forbearance 
decisions; its decision to subject interconnection to Title II as a 
``component'' of broadband Internet access service; its decision to 
amend agency rules regarding mobile broadband; or its adoption of an 
omnivorous ``Internet conduct'' standard, the scope of which still 
remains uncertain.
    In short, I agree that the agency chose political expediency over a 
public process, and I believe that leaves the Title II Order vulnerable 
to judicial review.

    Question 2. Please provide examples of how investment has been 
hindered based on the FCC's Open Internet Order.
    Answer. Last year, many small ISPs declared under penalty of 
perjury that they are cutting back on investments because of the FCC's 
decision. Here are a few examples.

   KWISP Internet serves 475 customers in rural northern 
        Illinois. As a result of the regulatory uncertainty and costs 
        created by the FCC's decision, KWISP plans to delay network 
        upgrades that would have upgraded customers from 3 Mbps to 20 
        Mbps service, new tower construction that would have brought 
        service to unserved areas, and capacity upgrades that would 
        reduce congestion for existing customers--not to mention the 
        jobs needed to make all of that happen. KWISP worries that even 
        a frivolous lawsuit brought under the Order could force 
        ownership to ``close the business.''

   Wisper ISP Inc. is an 11-year-old ISP that serves 8,000 
        customers around St. Louis, Missouri. Wisper estimates that 
        compliance costs will constitute 10 percent of its operating 
        revenue. As a result, it has already cut investment, resulting 
        in ``slower broadband speeds, less dense coverage, and absence 
        of expansion into new areas.'' For example, prior to the FCC's 
        decision, Wisper was planning to triple the number of new base 
        stations it would deploy each month in order to provide 
        broadband to customers in new areas. But as a result of the 
        Order, Wisper has put those plans on hold.

   SCS Broadband serves 800 customers in rural Virginia. SCS 
        Broadband has already stopped investing in new rural areas 
        because of the FCC's decision, and it won't resume until it can 
        ``determine if the additional cost in legal fees warrant such 
        investments.'' And investors have already told SCS Broadband 
        that ``projects that were viable investments under the regime 
        that existed before the Order will no longer provide the 
        necessary returns to justify the investment.''

   Joink LLC serves 2,500 customers in and around Terre Haute, 
        Indiana. Although Joink was exploring a fiber-to-the-home 
        project in its community, newfound regulatory uncertainty 
        ``will cause us to slow this investment, or not make it at 
        all''--and so, consumers ``will be left with slower broadband 
        speeds.'' Joink also worries that ``those with deeper pockets 
        can use broadly applied subjective standards to drag entities 
        such as Joink into litigation or to force us to forego 
        profitable business practices that can benefit our customers to 
        avoid potentially crippling litigation expenses.''

   Aristotle Inc. serves nearly 800 customers in and around 
        Little Rock, Arkansas. Aristotle has been committed to serving 
        the unserved, and 60 percent of its customers wouldn't have any 
        broadband option at all but for Aristotle's past investments. 
        Because of the regulatory uncertainty created by the Order, 
        Aristotle has dialed back its plans to ``triple'' its customer 
        base and ``expand our service into unserved areas of rural 
        Arkansas.'' At this time, Aristotle plans to target just 
        ``three smaller communities that abut our existing network.''

   Washington Broadband, Inc. serves 1,400 customers in Yakima 
        County, Washington. Washington Broadband ``has aggressively 
        constructed new towers that cover small areas based on a return 
        on investment model of light density return,'' but the Order 
        has forced Washington Broadband to give up that business model. 
        Instead, it ``has decided to scale back expansion to new, 
        unserved or underserved areas and focus on more urban/suburban 
        areas.''

    I have also attached the sworn declarations that these six 
companies and two other small companies filed with the FCC on the 
impact of the Title II Order.

    Question 3. This Commission seems to have difficulty identifying 
competition in the wireless market, as it has steadfastly refused to 
make a finding of effective competition in recent Wireless Competition 
Reports. For instance, in the latest Wireless Competition Report, 
released on December 23, 2015, without a vote by the full Commission, 
Chairman Wheeler's report states: ``this [Report] does not reach an 
overall conclusion or formal finding regarding whether or not the CMRS 
marketplace was effectively competitive, but rather it provides an 
analysis and description of the CMRS industry's competitive metrics and 
trends. . . . This Report instead focuses on presenting the best data 
available on various aspects of competition throughout the mobile 
wireless ecosystem and highlights several key trends.''
    At the same time, the report states that more than 90 percent of 
Americans have access to four or more wireless service providers. And, 
more than 82 percent of Americans have access to four or more providers 
of advanced LTE service. In your view, is the Commission following 
Congress's directive to evaluate the competitiveness of the wireless 
market? Why does Chairman Wheeler's report not reach any conclusion in 
spite of the broad array of choices available to consumers?
    Answer. No, the Commission is not following Congress's directive. 
The Commsision should be making fact-based decisions that reflect 
marketplace realities. But doing so consistently has not been the FCC's 
hallmark in recent years. The FCC's Wireless Competition Report is a 
salient example. Considering the facts you accurately recount above, 
the conclusion was obvious and the decision to make a decision 
shouldn't have been hard.
    As I stated when the agency released the latest Report, this FCC 
will never find that there is effective competition in the wireless 
market, regardless of what the facts show. That's because doing so 
would undermine the agency's goal of expanding its authority to 
manipulate the wireless market--a goal it cannot accomplish if it deems 
that market healthy.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                             Hon. Ajit Pai
    Question 1. For years, I have believed that the way in which rules 
are processed at the Commission lacks transparency and is detrimental 
to the American public. My FCC Process Reform Act would address these 
transparency and accountability issues for the sake of consumers and 
the industries supporting innovation and our economy.
    For example, the public has no idea the specific language of the 
rules the Commission is voting on until after they are passed. We saw 
that with the net neutrality rules that were pushed through this time 
last year, and we saw it a few weeks ago when the FCC voted on the 
proposal related to set-top boxes.
    In fact, Chairman Wheeler said during that meeting on set-top 
boxes: ``There have been lots of wild assertions about this proposal 
before anybody saw it.'' The problem is that the public doesn't know 
what to expect from the rule--there is no certainty for those on the 
outside.
    Do you believe the public has a right to see the specific language 
of a rule before it is voted on by the Commission?
    Answer. Yes. Both as a matter of law and good government, the FCC 
should not adopt regulations before allowing the public to see them.

    Question 2. As someone committed to protecting Americans' and 
Nevadans' privacy, especially related to personally identifiable 
information (PII), I have a questions regarding the recent set-top box 
Notice of Proposed Rulemaking.
    Currently, pay-TV companies must follow strong privacy protections 
to ensure consumers' personal information is not collected, utilized, 
or shared for non-service related purposes. How does this NPRM 
contemplate applying and enforcing these same privacy to any new 
suppliers entering the set-top box market? Does the FCC have the legal 
authority to enforce Title 6 privacy standards on third parties?
    Answer. I do not believe that the FCC has the legal authority to 
enforce Title VI privacy standards directly on third parties. To get 
around this problem, the NPRM attempts to do so indirectly. 
Specifically, it proposes to prohibit MVPDs from providing services to 
any navigation device unless the developer of that device certifies 
that it meets the privacy requirements set forth in Section 631 of the 
Act. However, this raises an obvious dilemma. What happens if a 
navigation device developer violates such privacy requirements after 
providing the certification contemplated by the NPRM? Who would have 
the legal authority to take enforcement action against that developer? 
What would be the remedy? I find it troubling that the answers to these 
important questions are not contained anywhere in the NPRM.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Claire McCaskill to 
                             Hon. Ajit Pai
    Question 1. One of the best tools the Commission has in overseeing 
the Lifeline program is the ability to take aggressive enforcement 
against carriers violating the rules of the program, companies that are 
abusing both the consumers who use the program as well as the rate 
payers that fund it. That's why I applauded a flurry of announced 
enforcement activity from September 2013 through February 2014. During 
that time the FCC issued Notices of Apparent Liability (NALs) totaling 
more than $94 million in proposed fines for 12 companies participating 
in the Lifeline program. Some of those notices are more than two-and-a-
half years old yet not a penny of that money has yet been collected. 
Will you press the Enforcement Bureau to either issue forfeiture 
orders, reach settlements, or dismiss these 12 NALs in an expeditious 
manner?
    Answer. Yes. Indeed, I called on the Commission to take up-or-down 
votes on these forfeitures orders in a speech in the summer of 2014. 
See https://apps.fcc.gov/edocs_public/attachmatch/DOC-328469A1.pdf. 
Since then, I have continued to press the Enforcement Bureau on the 
status of these cases (as well as many others), but the Bureau has 
steadfastly refused to disclose its activities to sitting 
Commissioners.

    Question 2. To avoid this situation in the future, would you 
support a shot clock for resolution of NALs? If so, what do you believe 
would be an acceptable amount of time?
    Answer. Yes, I support a shot clock. This past December, I proposed 
that the FCC should speed up its resolution of enforcement cases by 
setting a meaningful deadline for final action. Specifically, I 
proposed that any forfeiture order be issued within one year of the 
issuance of an NAL. If no such forfeiture order is adopted within this 
timeframe, that NAL would be automatically nullified.

    Question 3. The Bipartisan Budget Act of 2015 included an unwise 
and harmful provision to exempt debt collection calls on behalf of the 
Federal Government from Telephone Consumer Protection Act (TCPA) rules 
that prohibit robocalls to cell phones. Although the provision was 
ostensibly aimed at collecting student loan debt, the loophole was 
potentially widened either further by adoption of the Fixing America's 
Surface Transportation (FAST) Act in December, which requires the 
Internal Revenue Service to contract with private debt collectors to 
collect unpaid taxes. I have held hearings in this committee's Consumer 
Protection Subcommittee and at the Senate Aging Committee on robocalls. 
We should be making it harder--not easier--for this number one consumer 
complaint to continue, especially when there is no evidence that 
robocalls are an effective means of reaching consumers. Until we are 
successful in repealing this provision, the FCC is tasked with adopting 
rules to implement it. Would you support rules that require companies 
collecting debt on behalf of the Federal Government to register with 
the FCC in advance of doing so?
    Answer. I agree with you that we should be making it harder, not 
easier, for companies to bombard consumers with robocalls that they do 
not want. As such, I do not support the Administration's push to exempt 
federal-government-debt collectors from the TCPA and will push for 
rules that constrain that exemption to the full extent the law allows.

    Question 4. Would you support rules that limit calls from companies 
collecting debt on behalf of the Federal Government to no more than one 
call per consumer per month?
    Answer. Because I do not support this new exemption to the TCPA, I 
will push for rules that limit such calls to the full extent the law 
allows.

    Question 5. What impact do you believe this exemption will have on 
the ability of the commission's Enforcement Bureau to differentiate 
between calls that are now exempt from TCPA and those that are not, 
particularly when exempt calls and non-exempt calls could be coming 
from the same call centers?
    Answer. I believe this exemption will make enforcement of the TCPA 
more difficult for the Commission's Enforcement Bureau. Unfortunately, 
the FCC's record is already poor on this front. From January through 
June of last year, for example, the Enforcement Bureau issued only a 
single citation to a potential violator of Federal Do-Not-Call rules--
even though complaints about unwanted telemarketing calls make up about 
40 percent of consumer complaints to the Commission. The FCC needs to 
start taking its charge to protect consumers much more seriously and 
step up its enforcement efforts in this area.

    Question 6. The chairman recently received a letter from Senator 
Blunt and me regarding the upcoming reverse auction portion of Connect 
America Fund, Phase II (CAF II).
    For CAF II in Missouri, there is approximately $400 million 
available over the next 10 years to bring broadband to unserved parts 
of the state. Can you assure me that the money will be spent in 
Missouri and not be reallocated to other areas of the country?
    Answer. The Chairman has proposed a framework for the CAF II 
Auction. Unfortunately, the FCC's rules limit my ability to discuss 
that proposal while it is still under consideration. But I can say that 
I am currently reviewing his proposal and hope to work with my 
colleagues to design an auction that will get the most broadband bang 
for our universal-service buck for the people of every state.

    Question 7. As you consider the framework to govern the reverse 
auction to award the remaining dollars available in CAF II, how will 
you ensure that funded projects not only meet today's broadband 
definition, but are future proof and scalable to keep pace with ever-
changing technology and increasing needs for higher speed broadband?
    Answer. Given that the Chairman's proposal is under consideration, 
I can only say that I hope to work with my colleagues to design an 
auction that will let rural Americans keep pace with their urban 
counterparts when it comes to broadband access.

    Question 8. In 1993, through the Omnibus Budget Reconciliation Act 
of 1993, Congress directed the FCC to develop regulations governing the 
competitive bidding of spectrum. Included in the statutory instructions 
from Congress was a requirement that the Commission ``ensure that small 
businesses, rural telephone companies, and businesses owned by members 
of minority groups and women are given the opportunity to participate 
in the provision of spectrum-based services.'' To meet this 
congressional mandate the FCC created the Designated Entity (DE) 
program. The program's worthy goal of providing a mechanism for 
legitimate small businesses to partner with larger ones in spectrum 
auctions has undoubtedly helped many small businesses win spectrum 
licenses over the past 20+ years. But it has also provided a blueprint 
for large, multinational, multi-billion-dollar corporations to game the 
system and receive discounts on their bids. What assurances can you 
provide that the commission will do a better job of monitoring 
potential abuse of the DE program in the upcoming incentive auction 
than it did in the recent AWS-3 auction?
    Answer. Since I am in the minority at the FCC, I cannot provide any 
assurances regarding the FCC's monitoring of potential abuse of the DE 
program in the upcoming incentive auction. I can assure you, however, 
that I take abuse of the DE program very seriously, and I will not 
hesitate to speak out if large corporate interests attempt to game the 
system again.
    Unfortunately, the Commission has made it more difficult to police 
abuse of the DE program since the AWS-3 auction. In July 2015, the 
Commission decided on a party-line vote to reopen loopholes the agency 
closed on a bipartisan basis years ago--loopholes that led to 
widespread gamesmanship in past auctions. I fear that the agency's 
decision will invite further abuse of the DE program.

    Question 9. When Congress and the FCC were establishing the 
framework for spectrum auctions more than 20 years ago it probably made 
sense to ensure small businesses were able to compete. But a lot has 
changed. The cost of entering the incredibly expensive wireless 
infrastructure industry is far greater than it was in the early 1990s. 
A company that truly has revenues of $40 million, $15 million, or $3 
million--the thresholds set by the commission for the various levels of 
bidding credits--would be unlikely to enter the industry today. So is 
it time to look at simply eliminating the DE program to prevent future 
abuse?
    Answer. I think it would be appropriate for Congress to undertake a 
top-to-bottom review of the DE program. As implemented by the FCC, the 
DE program has been plagued by abuse. Large corporate interests 
routinely try to game the system at the expense of far smaller 
businesses. Congressional oversight is particularly warranted because, 
as noted above, the Commission recently voted 3-2 to reopen loopholes 
that the agency closed on a bipartisan basis years ago.
                                 ______
                                 
 Response to Written Questions Submitted by Hon. Richard Blumenthal to 
                             Hon. Ajit Pai
    Question 1. As you know, to address increasing demand for wireless 
broadband access, Congress directed the FCC to conduct an incentive 
auction, to encourage broadcast licensees to voluntarily relinquish 
their spectrum rights in exchange for a share of the proceeds in 
auctioning this spectrum to new licensees. In many parts of the 
country, contiguous spectrum will be freed up by ``repacking'' the 
channels to which remaining television broadcasters are currently 
assigned. Do you believe there is enough money in the TV Broadcaster 
Relocation Fund to cover repacking-related expenses incurred by 
broadcasters?
    Answer. I do not know at this time whether there will be enough 
money in the TV Broadcaster Relocation Fund to cover all repacking-
related expenses incurred by broadcasters. Among other things, we do 
not yet know how many television stations will need to be repacked.

    Question 2. If the 39 month repack time-frame and the $1.75 billion 
relocation fund are insufficient, does the FCC have the flexibility in 
the statute to ensure consumers and communities won't be negatively 
affected by signals going off the air?
    Answer. The statute provides the FCC with the flexibility to adjust 
the 39-month deadline for completing repacking. However, it does not 
provide the FCC with the flexibility to increase the size of the 
relocation fund above $1.75 billion.

    Question 3. If so, how can the FCC ensure that broadcasters have 
sufficient time to move without being forced off the air, if factors 
outside their control delay their ability to reconfigure their 
facilities?
    Answer. If a broadcaster is unable to meet the 39-month repacking 
deadline due to factors outside of its control, the FCC could grant it 
a waiver of the deadline so that a station would not be forced off the 
air.

    Questions 4. Do you agree that no non-participating broadcaster 
should be forced off the air, or forced to cover the costs of 
transitioning their signal, to accommodate the repack?
    Answer. Yes, I agree that no non-participating broadcaster should 
be forced to cover transition costs. That is why I urged my colleagues 
to adopt a repacking budget of $1.75 billion. I also agree that no non-
participating television station should be forced off the air at the 
end of the 39-month deadline if it has been unable to move due to 
factors outside of its control.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
                         Hon. Michael O'Rielly
    Question 1. Following the reclassification of broadband Internet 
access service as a Title II public utility, Chairman Wheeler indicated 
that the FCC will propose new privacy regulations. The Federal Trade 
Commission (FTC) already has extensive experience in protecting 
consumer privacy, and consumers and business already have experience in 
applying the FTC's privacy rules and precedents; the Commission has 
virtually no such experience beyond the very narrow confines of rules 
implementing Sec. 222. Why would the Commission create a new, likely 
inconsistent set of rules rather than adopting the FTC's privacy 
protections? Given that the Commission's rules will only apply to BIAS 
providers, isn't there a significant likelihood that functionally 
identical activities on a smartphone will be governed by completely 
different rules based upon who is providing the service?
    Answer. As an initial matter, I do not believe the Commission has 
authority to regulate broadband privacy practices under section 222 or 
any other provision. Since Congress has not assigned this role to the 
FCC, the agency should not presume to act, especially in an area where 
it has very little experience or expertise. Moreover, there is a 
significant risk that any rules adopted by the FCC will supplant or 
conflict with well-established FTC privacy precedents that are 
currently serving fairly well as a predictable road map for businesses 
and consumers alike. As I have said before, the Internet is much too 
important to our economy to be saddled with experimental regulations 
from any and all interested agencies.

    Question 2. I understand that you are close to finalizing action on 
an order that would address the standalone broadband issue that many in 
Congress have written to you about over the past several years and also 
adopt some new limits and other measures related to universal service 
support for rate of return providers. Do you commit to work quickly and 
collaboratively with this committee and with affected stakeholders to 
the extent any adverse or unintended consequences arise out of the 
reforms?
    Answer. Yes, I commit to do so. I have also made the same 
commitment to providers and their associations. While the reforms are 
intended to provide much needed stability and certainty to enable 
companies to invest in broadband and deliver service to consumers, we 
also want to continue to work collaboratively to ensure that any 
legitimate issues that arise are quickly and appropriately addressed.

    Question 3. Ensuring that rural and urban consumers have access to 
reasonably comparable services at reasonably comparable rates is a 
fundamental statutory principle of universal service. Are you confident 
that the standalone broadband solution you are poised to adopt will do 
that--specifically, will it allow rural consumers to get standalone 
broadband at rates reasonably comparable to their urban counterparts? 
If not, what more do you think the FCC will need do to ensure such 
comparability?
    Answer. Yes, our intent is to ensure that rates in rural America 
are reasonably comparable to those in urban areas, as required by the 
statute. Here again, if the reforms do not operate as envisioned, we 
would want to work with the providers and their associations to make 
any necessary adjustments.

    Question 4. I have heard concerns that the methodology used in the 
2014 order to determine the local rate floor for voice service has led 
to rates in some rural areas, including parts of South Dakota, that are 
not reasonably comparable to those services provided in urban areas. 
Given this concern, when do you plan to act on the petition for 
reconsideration filed by several rural associations regarding the rate 
floor methodology? Do any other Commissioners have thoughts regarding 
this matter?
    Answer. I do not have any information on the timing of this 
particular petition. As I have said in other contexts, however, the 
Commission should act as promptly as possible on outstanding petitions. 
Too many times, petitions remain pending for multiple years and parties 
receive no indication as to when they might receive an answer, positive 
or negative.

    Question 5. Last July, the FCC released an omnibus declaratory 
ruling on the Telephone Consumer Protection Act (TCPA). TCPA litigation 
has increased dramatically in the last decade. What considerations did 
the Commission give to the impact its ruling would have on businesses, 
both large and small, that need to reach their customers for legitimate 
business purposes?
    Answer. Unfortunately, the FCC gave very little consideration to 
legitimate companies acting in good faith to reach customers who 
expressed interest in being contacted. As I said at the time, the order 
painted nearly all businesses as bad actors and abused the statute in 
multiple ways, making it nearly impossible for companies to use modern 
technology to reach consumers without incurring substantial legal risk.
    In my statement on the ruling, I provided many examples of the wide 
range of businesses and communications that would be negatively 
impacted by the order. In some cases, companies are left to choose 
between adhering to the ruling and compliance with regulations from 
other Federal and state agencies that require businesses to call 
consumers, sometimes multiple times. The FCC ignored all of these 
examples and arguments in reaching its decision and, therefore, it is 
not surprising that a number of companies have challenged the decision 
in court.

    Question 6. Many small businesses seek to improve their efficiency 
and customer relationships by providing information to their customers 
through the use of modern dialing technologies. The FCC's recent 
interpretation of the term ``autodialer'' in the TCPA declaratory 
ruling, however, could sweep in any number of modern dialing 
technologies. Other than using a rotary phone, what other technologies 
can small businesses feel comfortable using without exposing themselves 
to TCPA litigation risk?
    Answer. There is no good answer for businesses. The FCC's 
appallingly incorrect reading of the statutory definition of an 
automatic telephone dialing system (ATDS or autodialer) sweeps in any 
equipment that could be used or modified to function as an autodialer 
at some point in the future. According to the FCC, it does not matter 
how the equipment was configured or used at the time a call was 
actually made. As a result, companies cannot even rely on manual 
dialing as a last resort to reach consumers because even the equipment 
used to manually dial the calls could potentially be changed to 
function as an autodialer in the future.

    Question 7. By establishing liability after a mere one-call 
exception, the Commission's ruling creates a perverse incentive for 
incorrectly-called parties to allow or even encourage incorrect calls 
to continue, rather than notify the calling party of the error. These 
continuing incorrect calls thus become potential violations and the 
basis for monetary penalties sought through litigation. What will you 
do to repair this perverse incentive?
    Answer. I highlighted this concern when the FCC adopted the 
exception. The ruling sets a trap for legitimate businesses and places 
absolutely no responsibility on the consumer to notify a company that 
they reached the wrong person. This was already happening before the 
ruling, as I noted in my statement on the ruling, and the FCC's 
decision will only make a bad situation worse.
    The FCC is currently defending this decision in court, so it is 
unlikely that the FCC will change the exception before the court rules 
on it.

    Question 8. Has the Commission considered providing a safe harbor 
for a calling party that reasonably relies on available customer phone 
number records to verify the accuracy of a customer's phone number?
    Answer. The FCC considered and rejected reasonable proposals by 
outside parties to establish a safe harbor for legitimate companies 
that follow a long list of best practices to avoid stray calls to the 
wrong people. I, too, argued that a safe harbor was warranted because 
there is no comprehensive way to confirm whether a number has been 
reassigned. These concerns were ignored.

    Question 9. The pay TV set-top box NPRM proposes to expand the 
scope of the term ``navigation device'' to include ``software or 
hardware performing the functions traditionally performed in hardware 
navigation devices.'' On what theory does the Commission base this 
interpretation and expansion of the statutory term's scope to include 
software? Does software that is not integral to the operation of a 
navigation device fall within the scope of Section 629?
    Answer. I voted against the Commission's recent ``Commercial 
Availability of Navigation Devices Notice of Proposed Rulemaking and 
Memorandum Opinion and Order'' (commonly referred to as the set-top box 
item) because, in part, I strongly disagreed with the majority's 
interpretation of section 629 to apply to such software, including 
applications or apps. I hope that if the Commission attempts to 
conclude this item, this proposal never sees the light of day as it 
violates the specific wording of the law and the spirit of this 
provision.

    Question 10. How does the NPRM propose or contemplate preventing 
third party devices or applications from adding unapproved or 
additional advertising alongside MVPD service content? How does the 
NPRM propose to protect and secure interactive MVPD programming and 
services when accessed through third party devices or applications? How 
does the NPRM propose to enforce such protection and security measures?
    Answer. As you can see from the text of the item, the majority does 
not see any particular problem needing Commission attention regarding 
the possible replacement of such advertising. Instead, the item states 
that market forces will address any issue but fails to explain how this 
would work in practice. Being one that generally supports market 
forces, I do not know how this would be applied in this instance. In 
terms of protection and security of content, this question may be 
better suited to those Commissioners that support the item as I 
disagreed with the logic and the specific proposals designed to rely on 
third party contracts as a mechanism to enforce and maintain important 
policies.
                                 ______
                                 
      Response to Written Question Submitted by Hon. Ted Cruz to 
                         Hon. Michael O'Rielly
    Question. In the Open Internet Order, the Federal Communications 
Commission (FCC) revised the definition of ``public switched network'' 
to mean ``the network that . . . use[s] the North American Numbering 
Plan, or public IP addresses, in connection with the provision of 
switched services'' (See para. 391 (emphasis added)). Although the FCC 
disclaimed any intent to ``assert'' jurisdiction over the assignment or 
management of IP addresses by the Internet Numbers Registry System (see 
id. at note 1116), the FCC's decision to equate telephone numbers with 
IP addresses nonetheless gives the FCC statutory jurisdiction over IP 
addresses as a matter of law. Over 20 years ago the FCC concluded that 
Section 201 of the Communications Act gave it plenary jurisdiction over 
telephone numbers, because ``telephone numbers are an indispensable 
part'' of the duties that section 201 imposes on common carriers (See 
Administration of the North American Numbering Plan, Notice of Proposed 
Rulemaking, FCC 94-79,  8 (1994)). IP addresses are likewise an 
indispensable part of the duties the FCC imposed on ISPs under section 
201, including the duty to connect to ``all or substantially all 
Internet endpoints.''
    How can the FCC uphold the public interest requirements in section 
201 of the Act if it refuses to assert its statutory authority over an 
indispensable part of the public switched network?
    If the FCC believes regulation of IP numbers used to connect end 
points on the public switched telephone network is unnecessary, why 
hasn't it forborne from the regulation of telephone numbers?
    Answer. In the Open Internet Order, the majority used an ends-
justifies-the-means approach to change a long-standing definition so 
that mobile broadband could miraculously be redefined as a Title II 
service. Inconsistencies, such as those raised above, are one of the 
many unintended consequences of regulatory overreach and using outdated 
rules on modern technology. Hopefully, this change of definition, which 
was implemented without opportunity for public comment and is 
inconsistent with prior Commission precedent, will be struck down by 
the D.C. Circuit. As for why the Commission has not taken action to 
forbear from the regulation of telephone numbers, I leave it to the 
Chairman to respond.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Deb Fischer to 
                         Hon. Michael O'Rielly
    Question 1. Commissioner O'Rielly, as the FCC moves forward with 
reforms of the Lifeline program, I continue to have concerns about the 
potential for waste, fraud, and abuse. In Nebraska, there is little to 
no waste, fraud, or abuse mainly due to the diligence of the state's 
Public Service Commission in overseeing the program. The PSC thoroughly 
vets all companies before designating them as Eligible 
Telecommunications Carriers, and they have leverage through this 
process to police the quality of the services provided. We also have a 
system of verifying the eligibility of consumers applying to the 
program. I understand that some of the changes that you are considering 
would eliminate the important role that states like Nebraska play in 
overseeing and policing the Lifeline program. How would the FCC be able 
to replicate the work that states do to prevent waste, fraud, and abuse 
in the Lifeline program?
    Answer. A draft item just circulated on March 8, so I am limited by 
FCC rules in what I can say about the contents of the item. However, I 
have made clear on multiple occasions that I am concerned about waste, 
fraud, and abuse in the program. I will carefully consider the points 
you raise in reviewing whether any of the reforms would magnify this 
ongoing problem.

    Question 2. Commissioner O'Rielly, in discussing the FCC's recent 
proposal on set-top boxes, nearly everyone has said, yourself included, 
that they would like to see the marketplace continue to move away from 
set-top boxes and towards more innovative methods of allowing customers 
to access video content. New technologies have increased competition in 
the video market, and companies like Netflix, Hulu, Roku, as well as a 
wide variety of video applications are providing new options to 
consumers. Further, many cable and satellite companies are moving away 
from set top boxes and towards application-based platforms. How do we 
continue to encourage innovation in the video marketplace while 
avoiding technology mandates and burdensome regulations?
    Answer. Thankfully, the marketplace--driven by consumer demand--is 
heading in that direction without assistance or mandates by the 
Commisison, as many video distributors are already moving to an app-
centric world and away from the hardware limitations of a set-top box 
environment. Consumers are able to experience wide choices of digital 
video content that will only increase over time, absent unnecessary 
interference from the Commission. While I leave it to Congress' 
purview, I will suggest that there may be great benefits from removing 
unnecessary burdens contained in Title VI of the Communications Act. 
Additionally, it is important that new video offerings, such as over-
the-top video, not be vacuumed into the existing video regulatory 
regime.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Ron Johnson to 
                         Hon. Michael O'Rielly
    Question 1. Commissioner O'Rielly, am I correct that you were not 
offered an opportunity to cast a vote on the latest Wireless 
Competition Report? When did you learn of the Report's release? Do you 
believe the process used to adopt the Report is consistent with 
Congress' statutory direction, and if not, what are your thoughts 
regarding congressional action to repeal or modify this annual 
requirement?
    Answer. You are correct that I was not provided an opportunity to 
vote on the Wireless Competition Report, despite requests from 
Commissioner Pai and me to have it formally circulated to and voted by 
the entire Commission. The timeline of notification and release is as 
follows:

  Dec. 21, 2015, 6:12 pm:    Provided 48 hours notice that the report
                              was to be released on delegated authority.
 
  Dec. 22, 2015, 10:42 am:   My office requested that the report be
                              circulated to and voted on by the
                              Commission.
 
  Dec. 23, 2015, 2:23 pm:    Informed that the Chairman would move
                              forward with the release of the report on
                              delegated authority.
 
  Dec. 23, 2015, approx.     Report released.
   6:00 pm:
 

    Generally, the data contained in this report is used by the 
Commission as a foundation for regulatory decisions and, therefore, 
should contain input from and be approved by the Commissioners. More 
specifically, releasing the report on delegated authority fails to 
comply with the statute, which states that the Commission, not the 
Bureau, must report annually about the state of the mobile industry. 
Further, the report must contain an analysis of ``whether or not there 
is effective competition.'' Even though more than 90 percent of 
Americans have a choice of four or more wireless providers, the report 
does not conclude, as directed by Congress, whether this industry is 
competitive. I leave it to Congress to decide the best course of action 
to rectify this situation and whether the annual report remains useful. 
But it may be helpful for Congress to reiterate, at a minimum, that any 
such report must be released by the Commission, as opposed to on 
delegated authority, and must conclude whether or not the wireless 
industry is competitive.

    Question 2. Commissioner O'Rielly, in your testimony, you provided 
an example of an FCC enforcement action against First National Bank. 
Specifically, you said, ``Before First National was ever notified about 
the citation, the Commission had already tried the case through the 
press, harming the company's reputation. Interestingly, the citation 
was dismissed two month later without similar fanfare.'' What, if 
anything, can Congress do to help address this issue?
    Answer. I have suggested that the Commission change its procedures 
so that citations are not publicized until after the target has had the 
opportunity to respond to the claimed violations, which occurs within 
30 days of the issuance of the citation. I made clear that this change 
would not detract from the Enforcement Bureau's ability to pursue an 
investigation, or a fine if warranted. The company would still receive 
the citation and could face further enforcement action. Nor would it 
detract from the Commission's ability to use a citation as a deterrent 
for other companies because the citation (unless rescinded after 
discussions with the target) would still become public.
    I can report that the Commission has not changed its procedures to 
date. I would welcome any action by Congress to address this issue.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                         Hon. Michael O'Rielly
    Question 1. For years, I have believed that the way in which rules 
are processed at the Commission lacks transparency and is detrimental 
to the American public. My FCC Process Reform Act would address these 
transparency and accountability issues for the sake of consumers and 
the industries supporting innovation and our economy.
    For example, the public has no idea the specific language of the 
rules the Commission is voting on until after they are passed. We saw 
that with the net neutrality rules that were pushed through this time 
last year, and we saw it a few weeks ago when the FCC voted on the 
proposal related to set-top boxes.
    In fact, Chairman Wheeler said during that meeting on set-top 
boxes: ``There have been lots of wild assertions about this proposal 
before anybody saw it.'' The problem is that the public doesn't know 
what to expect from the rule--there is no certainty for those on the 
outside.
    Do you believe the public has a right to see the specific language 
of a rule before it is voted on by the Commission?
    Answer. This simple but powerful fix would benefit the American 
people, the functionality of the Commission and the transparency of our 
government. I appreciate all of your hard work to push this effort 
forward and am hopeful that it will become reality, either through 
changes made by the Commission itself or Congressional action.

    Question 2. As someone committed to protecting Americans' and 
Nevadans' privacy, especially related to personally identifiable 
information (PII), I have a question regarding the recent set-top box 
Notice of Proposed Rulemaking.
    Currently, pay-TV companies must follow strong privacy protections 
to ensure consumers' personal information is not collected, utilized, 
or shared for non-service related purposes. How does this NPRM 
contemplate applying and enforcing these same privacy to any new 
suppliers entering the set-top box market? Does the FCC have the legal 
authority to enforce Title 6 privacy standards on third parties?
    Answer. You raise an important issue regarding the Commission's 
recent set top box item, from which I dissented. The item proposes to 
rely on the imposition of mandates on video distrubutors to include 
privacy requirements in any contract with a third party when sharing 
the so-called data streams. I do not see how Title VI can be read to 
provide the Commission with authority to govern the privacy of third 
party providers' use of this valuable information via the private 
contractual requirements of video distributors.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Claire McCaskill to 
                         Hon. Michael O'Rielly
    Question 1. One of the best tools the Commission has in overseeing 
the Lifeline program is the ability to take aggressive enforcement 
against carriers violating the rules of the program, companies that are 
abusing both the consumers who use the program as well as the rate 
payers that fund it. That's why I applauded a flurry of announced 
enforcement activity from September 2013 through February 2014. During 
that time the FCC issued Notices of Apparent Liability (NALs) totaling 
more than $94 million in proposed fines for 12 companies participating 
in the Lifeline program. Some of those notices are more than two-and-a-
half years old yet not a penny of that money has yet been collected. 
Will you press the Enforcement Bureau to either issue forfeiture 
orders, reach settlements, or dismiss these 12 NALs in an expeditious 
manner?
    Answer. While I don't have any involvement in setting the agenda of 
the Enforcement Bureau, I support the concept of it making timely 
decisions, especially as it relates to incidents of fraud, waste and 
abuse of the Lifeline program.

    Question 2. To avoid this situation in the future, would you 
support a shot clock for resolution of NALs? If so, what do you believe 
would be an acceptable amount of time?
    Answer. I have favored shot clocks in other settings and the use of 
one here may prove beneficial as well. Too many enforcement matters sit 
in holding patterns for too long, making the enforcement of our rules 
more difficult than is necessary. I would be open to seeking public 
comment on an appropriate time table for such a shot clock.

    Question 3. The Bipartisan Budget Act of 2015 included an unwise 
and harmful provision to exempt debt collection calls on behalf of the 
Federal Government from Telephone Consumer Protection Act (TCPA) rules 
that prohibit robocalls to cell phones. Although the provision was 
ostensibly aimed at collecting student loan debt, the loophole was 
potentially widened either further by adoption of the Fixing America's 
Surface Transportation (FAST) Act in December, which requires the 
Internal Revenue Service to contract with private debt collectors to 
collect unpaid taxes. I have held hearings in this committee's Consumer 
Protection Subcommittee and at the Senate Aging Committee on robocalls. 
We should be making it harder--not easier--for this number one consumer 
complaint to continue, especially when there is no evidence that 
robocalls are an effective means of reaching consumers. Until we are 
successful in repealing this provision, the FCC is tasked with adopting 
rules to implement it. Would you support rules that require companies 
collecting debt on behalf of the Federal Government to register with 
the FCC in advance of doing so?
    Answer. I am hesitant to comment too extensively on this matter 
given the Commission currently has a related matter before it. However, 
my first reaction is that this may be outside the statutory authority 
provided to the Commission. Substantively, I am not sure the Commission 
has any expertise in conducting or operating such a registration, or 
whether it would be effective. I will, of course, implement any changes 
enacted by Congress.

    Question 4. Would you support rules that limit calls from companies 
collecting debt on behalf of the Federal Government to no more than one 
call per consumer per month?
    Answer. Again, this is a matter presently before the Commission. 
While the FCC does have authority under the statute to set limits on 
the number and duration of such calls, this proposed limitation may run 
counter to other Federal agency call attempt requirements on those 
servicing or trying to collect a debt owed to or guaranteed by the 
United States.

    Question 5. What impact do you believe this exemption will have on 
the ability of the commission's Enforcement Bureau to differentiate 
between calls that are now exempt from TCPA and those that are not, 
particularly when exempt calls and non-exempt calls could be coming 
from the same call centers?
    Answer. I have generally refrained from critiquing changes in law 
approved by Congress and the Administration. In practice, 
implementation and enforcement of this change may not prove too 
difficult as it will hinge on whether the function of the call meets 
the statutory exemption, which should be a fact-based analysis.

    Question 6. The chairman recently received a letter from Senator 
Blunt and me regarding the upcoming reverse auction portion of Connect 
America Fund, Phase II (CAF II).
    For CAF II in Missouri, there is approximately $400 million 
available over the next 10 years to bring broadband to unserved parts 
of the state. Can you assure me that the money will be spent in 
Missouri and not be reallocated to other areas of the country?
    Answer. The election by the incumbent price cap carriers in 
Missouri to turn down CAF Phase II funding means that these areas will 
be designated for participation in the post right-of-first-refusal 
reverse auction. A draft proposal to implement the reverse auction is 
currently before the Commission. Until such an item is adopted and 
executed, it is premature to predict its effects on the overall 
spending level for Missouri. For instance, it may be that the non-
selected price cap areas can be sufficiently served at a reduced cost 
generated by the reverse auction process.

    Question 7. As you consider the framework to govern the reverse 
auction to award the remaining dollars available in CAF II, how will 
you ensure that funded projects not only meet today's broadband 
definition, but are future proof and scalable to keep pace with ever-
changing technology and increasing needs for higher speed broadband?
    Answer. The Commission is currently considering the components for 
the reverse auction. I do support a structure that recognizes 
differences in service offerings while not favoring one technology over 
another so that the Commission can incentivize the private sector to 
provide broadband in these areas within the established budget.

    Question 8. In 1993, through the Omnibus Budget Reconciliation Act 
of 1993, Congress directed the FCC to develop regulations governing the 
competitive bidding of spectrum. Included in the statutory instructions 
from Congress was a requirement that the Commission ``ensure that small 
businesses, rural telephone companies, and businesses owned by members 
of minority groups and women are given the opportunity to participate 
in the provision of spectrum-based services.'' To meet this 
congressional mandate the FCC created the Designated Entity (DE) 
program. The program's worthy goal of providing a mechanism for 
legitimate small businesses to partner with larger ones in spectrum 
auctions has undoubtedly helped many small businesses win spectrum 
licenses over the past 20+ years. But it has also provided a blueprint 
for large, multinational, multi-billion-dollar corporations to game the 
system and receive discounts on their bids. What assurances can you 
provide that the commission will do a better job of monitoring 
potential abuse of the DE program in the upcoming incentive auction 
than it did in the recent AWS-3 auction?
    Answer. Unfortunately, I am not confident that such abuse will not 
occur in the future, and it's why I dissented on the item adopting 
recent changes to the Commission's DE rules. In particular, I am not 
confident that the rule changes properly protect consumers from 
companies using the DE program as a mechanism to obtain and then sell 
wireless licenses for excessive profits at the expense of the American 
people.

    Question 9. When Congress and the FCC were establishing the 
framework for spectrum auctions more than 20 years ago it probably made 
sense to ensure small businesses were able to compete. But a lot has 
changed. The cost of entering the incredibly expensive wireless 
infrastructure industry is far greater than it was in the early 1990s. 
A company that truly has revenues of $40 million, $15 million, or $3 
million--the thresholds set by the commission for the various levels of 
bidding credits--would be unlikely to enter the industry today. So is 
it time to look at simply eliminating the DE program to prevent future 
abuse?
    Answer. There are legitimate concerns whether the Commission can 
operate an effective and abuse-free DE program while properly 
compensating the American people for use of spectrum. If it cannot be 
done, then the program should be immediately and indefinitely suspended 
and Congress notified of such.
                                 ______
                                 
 Response to Written Questions Submitted by Hon. Richard Blumenthal to 
                         Hon. Michael O'Rielly
    Question 1. As you know, to address increasing demand for wireless 
broadband access, Congress directed the FCC to conduct an incentive 
auction, to encourage broadcast licensees to voluntarily relinquish 
their spectrum rights in exchange for a share of the proceeds in 
auctioning this spectrum to new licensees. In many parts of the 
country, contiguous spectrum will be freed up by ``repacking'' the 
channels to which remaining television broadcasters are currently 
assigned. Do you believe there is enough money in the TV Broadcaster 
Relocation Fund to cover repacking-related expenses incurred by 
broadcasters?
    Answer. I believe that it is premature to know whether the funding 
level established by Congress is sufficient. The broadcast incentive 
auction structure has many moving components that could alter the 
overall repacking costs. For instance, until the band plan is adopted 
by the marketplace via the reverse and forward auctions, it is unclear 
to know how many stations will need to be repacked. While I am 
sympathetic to the concerns of the broadcasting community, it seems 
prudent to examine this issue after the auction concludes.

    Question 2. If the 39 month repack time-frame and the $1.75 billion 
relocation fund are insufficient, does the FCC have the flexibility in 
the statute to ensure consumers and communities won't be negatively 
affected by signals going off the air?
    Answer. If necessary, the Commission could extend the repacking 
timeframe, but it must balance this against the interests of those 
winning licenses in the forward auction, assuming the incentive auction 
is able to close successfully. Once we have a clearer picture of how 
many stations will be repacked, it will be easier to determine whether 
the 39-month repack time-frame is achievable and the best way to 
proceed. It is also possible that individual waivers, rather than a 
blanket extension, may be the best course of action but it is unclear 
at the current time whether this will be necessary. At the same time, 
the Commission doesn't not have authority to increase the repacking 
budget of $1.75 billion; only Congress can do that.

    Question 3. If so, how can the FCC ensure that broadcasters have 
sufficient time to move without being forced off the air, if factors 
outside their control delay their ability to reconfigure their 
facilities?
    Answer. The Commission should properly and closely monitoring the 
repacking process to ensure that any delays are the result of 
legitimate problems faced by broadcasters and not avoidable 
circumstances. Based on this information, the Commission could issue 
individual waivers of the repacking deadline or extend the deadline 
altogether, if necessary.

    Questions 4. Do you agree that no non-participating broadcaster 
should be forced off the air, or forced to cover the costs of 
transitioning their signal, to accommodate the repack?
    Answer. To the extent that any delays in repacking are the result 
of legitimate problems and not avoidable circumstances and its 
repacking costs fully meet the standards set by the Commission, then 
yes.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
                         Hon. Mignon L. Clyburn
    Question 1. Following the reclassification of broadband Internet 
access service as a Title II public utility, Chairman Wheeler indicated 
that the FCC will propose new privacy regulations. The Federal Trade 
Commission (FTC) already has extensive experience in protecting 
consumer privacy, and consumers and business already have experience in 
applying the FTC's privacy rules and precedents; the Commission has 
virtually no such experience beyond the very narrow confines of rules 
implementing Sec. 222. Why would the Commission create a new, likely 
inconsistent set of rules rather than adopting the FTC's privacy 
protections? Given that the Commission's rules will only apply to BIAS 
providers, isn't there a significant likelihood that functionally 
identical activities on a smartphone will be governed by completely 
different rules based upon who is providing the service?
    Answer. Thank you for the question. Both the Federal Trade 
Commission (FTC) and the Federal Communications Commission (FCC) share 
a long and valuable history of collaboration on issues when it comes to 
protecting American consumers and I am pleased to say that I do not see 
that spirit of cooperation ever changing. But Senator, I must 
respectfully disagree with the premise of the question that the FCC has 
virtually no experience in protecting consumer privacy. As you 
mentioned, Section 222 is an explicit grant of authority from Congress 
regarding privacy for telecommunications networks and carriers. In 
fact, the actual title of Section 222 is ``Privacy of Consumer 
Information'' and there outlined are the duties of carriers to protect 
confidentiality and proprietary information. Well before the Open 
Internet Order, the FCC has been the only agency with jurisdiction to 
ensure telecommunications carriers protect consumer privacy.
    The Chairman just circulated a Notice of Proposed Rulemaking on 
Section 222 and privacy for broadband Internet access service (BIAS) 
providers and I am currently reviewing the item. As I review the draft 
and meet with interested parties, I am open to all proposals and 
options on how best to protect consumers' privacy consistent with the 
directives of Section 222. I believe we are all better suited when we 
have a robust record that will help determine how best to proceed.

    Question 2. I understand that you are close to finalizing action on 
an order that would address the standalone broadband issue that many in 
Congress have written to you about over the past several years and also 
adopt some new limits and other measures related to universal service 
support for rate of return providers. Do you commit to work quickly and 
collaboratively with this committee and with affected stakeholders to 
the extent any adverse or unintended consequences arise out of the 
reforms?
    Answer. Yes. I commit to work quickly and collaboratively with the 
Commission to address any adverse or unintended consequences.

    Question 3. Ensuring that rural and urban consumers have access to 
reasonably comparable services at reasonably comparable rates is a 
fundamental statutory principle of universal service. Are you confident 
that the standalone broadband solution you are poised to adopt will do 
that--specifically, will it allow rural consumers to get standalone 
broadband at rates reasonably comparable to their urban counterparts? 
If not, what more do you think the FCC will need do to ensure such 
comparability?
    Answer. I agree that the FCC has a duty to ensure that, consistent 
with the objectives of the statute, rates in rural and high cost areas 
are reasonably comparable to urban counterparts just as we have a duty 
to ensure that low income consumers have access to services reasonably 
comparable to services available urban areas. The FCC conducts an urban 
rate survey every year to help assess what rates consumers are paying 
in those areas. This survey will enable us to compare the urban survey 
reults to rates in rural and high cost areas and, if necessary, take 
action to ensure rates remain reasonably comparable.
    In addition, the FCC's high cost universal service fund is not 
designed to ensure that rates are affordable. Rather, the FCC's 
Lifeline program is the only means-tested program established to 
provide support to ensure that services are affordable for low-income 
consumers who need connectivity the most. Reforming the Lifeline 
program to ensure that those who qualify can apply for a Lifeline 
discount to broadband rather than just voice, is another pivotal 
measure to ensure that rates for advanced telecommunications services 
in rural and urban areas are ubiquitous and affordable.

    Question 4. I have heard concerns that the methodology used in the 
2014 order to determine the local rate floor for voice service has led 
to rates in some rural areas, including parts of South Dakota, that are 
not reasonably comparable to those services provided in urban areas. 
Given this concern, when do you plan to act on the petition for 
reconsideration filed by several rural associations regarding the rate 
floor methodology? Do any other Commissioners have thoughts regarding 
this matter?
    Answer. In 2011, the FCC adopted the local rate floor to ensure 
that finite universal service resources are being used as efficiently 
as possible and not spent on subsidizing local rates that are 
artificially low. We need to ensure that support is sufficient but we 
should never provide any more support than is necessary. The rate floor 
reductions apply only to carriers that receive High Cost Loop Support 
or HCLS, which subidizes intrastate costs and reduces support only to 
the extent rates are below the rate floor. Thus, carriers that do not 
receive HCLS are not impacted and interstate common line support or 
ICLS is not impacted.
    In 2014, the FCC revised the implementation of the rate floor as 
follows:

   Between January 2, 2015, and June 30, 2016, support is 
        reduced only to the extent rates are below $16;

   Between July 1, 2016, and June 30, 2017, support is reduced 
        only for lines with rates under $18 or the rate floor 
        established by the 2016 rate survey, whichever is lower; and

   Between July 1, 2017, and June 30, 2018, support is limited 
        only for lines with rates under $20 or the 2017 rate floor, 
        whichever is lower. Thus, the impact of this rule was phased in 
        over a four-year period and Lifeline customers were excluded 
        from these limitations.

    In 2015, the FCC found, based on a survey of urban rates, that the 
2015 rate floor for voice services is $21.22, and the reasonable 
comparability benchmark for voice services is $47.48. It is my 
understanding that last year, of the 116,000 lines served by rate of 
return carriers in South Dakota, only 41 lines, or 0.0003 percent, were 
below the $16 rate floor. Thus, only carriers serving these 41 lines 
would see a reduction in HCLS support and only to the extent they are 
below $16. Based on this data, coupled with the phased in reductions 
outlined above, the rate floor reductions are still well below average 
rates paid for by urban consumers. And, even after the phase-in, the 
rate floor will be based on urban rates which should ensure that rates 
in rural and high cost areas are reasonably comparable to urban areas.
    In addition, rates for low-income consumers receiving Lifeline that 
are below the rate floor are not impacted and no support is reduced for 
these lines. Even so, I am happy to meet with you and your staff to 
better understand your concern and determine if there are ways for the 
FCC to take action to address it.

    Question 5. Last July, the FCC released an omnibus declaratory 
ruling on the Telephone Consumer Protection Act (TCPA). TCPA litigation 
has increased dramatically in the last decade. What considerations did 
the Commission give to the impact its ruling would have on businesses, 
both large and small, that need to reach their customers for legitimate 
business purposes?
    Answer. As I noted when the Commission adopted the declaratory 
ruling, the agency struck a difficult, but necessary balance with the 
item, maintaining the consumer protections that the TCPA intended, 
while taking into account the needs of businesses. I also noted that we 
would remain vigilant, monitoring consumer complaints not only when it 
comes to unwanted calls but also whether access to important and 
desired information is unintentionally lost.

    Question 6. Many small businesses seek to improve their efficiency 
and customer relationships by providing information to their customers 
through the use of modern dialing technologies. The FCC's recent 
interpretation of the term ``autodialer'' in the TCPA declaratory 
ruling, however, could sweep in any number of modern dialing 
technologies. Other than using a rotary phone, what other technologies 
can small businesses feel comfortable using without exposing themselves 
to TCPA litigation risk?
    Answer. As communications technologies change, so must our rules. 
The Commission's declaratory ruling took several steps to provide small 
businesses protection from TCPA litigation. First and foremost, any 
company can protect themselves by obtaining prior consent for their 
communication. Second, we provided some buffer for companies acting in 
good faith, by allowing them one call, post reassignment, in order to 
affirm any number reassignment.

    Question 7. By establishing liability after a mere one-call 
exception, the Commission's ruling creates a perverse incentive for 
incorrectly-called parties to allow or even encourage incorrect calls 
to continue, rather than notify the calling party of the error. These 
continuing incorrect calls thus become potential violations and the 
basis for monetary penalties sought through litigation. What will you 
do to repair this perverse incentive?
    Answer. The Commission receives overwhelming numbers of complaints 
from consumers about the robocalls and texts they receive. I voted for 
our declaratory ruling last year, including the one-call exception, 
because I believe we did what we could to provide clarity for good 
business actors in this space while protecting consumers from unwanted 
communications. I have also encouraged voluntary participation by all 
providers in some type of comprehensive database for reassigned 
numbers. This idea still has merit. But I look forward to reviewing any 
ideas to improve our implementation of the TCPA that the Chairman's 
Office proposes.

    Question 8. Has the Commission considered providing a safe harbor 
for a calling party that reasonably relies on available customer phone 
number records to verify the accuracy of a customer's phone number?
    Answer. As noted above, the Commission receives overwhelming 
numbers of complaints from consumers about the robocalls and texts they 
receive, and the declaratory ruling struck a difficult, but necessary 
balance between maintaining the consumer protections that the TCPA 
intended, while also taking into account the needs of businesses. The 
declaratory ruling did not adopt a safe harbor, but I am open to 
reviewing any ideas to improve our implementation of the TCPA that the 
Chairman's Office proposes.

    Question 9. The pay TV set-top box NPRM proposes to expand the 
scope of the term ``navigation device'' to include ``software or 
hardware performing the functions traditionally performed in hardware 
navigation devices.'' On what theory does the Commission base this 
interpretation and expansion of the statutory term's scope to include 
software? Does software that is not integral to the operation of a 
navigation device fall within the scope of Section 629?
    Answer. As noted in the NPRM, the Communications Act does not 
define the term ``navigation device,'' but we interpreted the term to 
be broader than hardware alone, as Section 629 is plainly written to 
cover any equipment used by consumers to access multichannel video 
programming and other services. Software features have long been 
essential elements of such equipment, including before adoption of 
Section 629.

    Question 10. How does the NPRM propose or contemplate preventing 
third party devices or applications from adding unapproved or 
additional advertising alongside MVPD service content? How does the 
NPRM propose to protect and secure interactive MVPD programming and 
services when accessed through third party devices or applications? How 
does the NPRM propose to enforce such protection and security measures?
    Answer. We are committed to defending copyright protections 
afforded to content creators, and the proposal does not interfere with 
the agreements between the content companies and MVPDs. In fact, in 
order to be certified, a navigation device maker will need to show that 
they are in compliance with security measures in order to receive 
information from MVPDs.
    Navigation device makers will be required to pass through all 
content, including advertisements. As for inserting additional 
advertisements, the marketplace may actually help discourage such a 
practice, as most consumers are not looking for a product that provides 
additional advertisements. But I look forward to continuing to engage 
on this issue, and I hope that the record of this proceeding will help 
inform this issue.
                                 ______
                                 
      Response to Written Question Submitted by Hon. Ted Cruz to 
                         Hon. Mignon L. Clyburn
    Question. In the Open Internet Order, the Federal Communications 
Commission (FCC) revised the definition of ``public switched network'' 
to mean ``the network that . . . use[s] the North American Numbering 
Plan, or public IP addresses, in connection with the provision of 
switched services'' (See para. 391 (emphasis added)). Although the FCC 
disclaimed any intent to ``assert'' jurisdiction over the assignment or 
management of IP addresses by the Internet Numbers Registry System (see 
id. at note 1116), the FCC's decision to equate telephone numbers with 
IP addresses nonetheless gives the FCC statutory jurisdiction over IP 
addresses as a matter of law. Over 20 years ago the FCC concluded that 
Section 201 of the Communications Act gave it plenary jurisdiction over 
telephone numbers, because ``telephone numbers are an indispensable 
part'' of the duties that section 201 imposes on common carriers (See 
Administration of the North American Numbering Plan, Notice of Proposed 
Rulemaking, FCC 94-79,  8 (1994)). IP addresses are likewise an 
indispensable part of the duties the FCC imposed on ISPs under section 
201, including the duty to connect to ``all or substantially all 
Internet endpoints''.
    How can the FCC uphold the public interest requirements in section 
201 of the Act if it refuses to assert its statutory authority over an 
indispensable part of the public switched network?
    If the FCC believes regulation of IP numbers used to connect end 
points on the public switched telephone network is unnecessary, why 
hasn't it forborne from the regulation of telephone numbers?
    Answer. Thank you for the question. Nothing in the Open Internet 
Order suggests that the Commission asserted authority over the 
assignment or management of IP addresses, either pursuant to Section 
201(a) or pursuant to Section 251(e) (the source of Commission 
authority over numbering issues pursuant to the Telecommunications Act 
of 1996). In fact, the Commission forebore from Section 251(e)--the 
provision that gives the Commission authority over telecommunications 
numbering.
    IP addressing is governed by IANA, (the Internet Assigned Numbers 
Authority), a department of ICANN that is responsible for the global 
coordination of IP addressing, among other coordination functions. 
ARIN--the American Registry of Internet Numbers--is the regional 
administrator responsible for administering Internet numbers is the 
U.S. and certain nearby countries. The NTIA is the U.S. Government 
agency that contracts with ICANN to perform the IANA functions.
                                 ______
                                 
     Response to Written Question Submitted by Hon. Deb Fischer to 
                         Hon. Mignon L. Clyburn
    Question. Commissioner Clyburn, as the FCC moves forward with 
reforms of the Lifeline program, I continue to have concerns about the 
potential for waste, fraud, and abuse. In Nebraska, there is little to 
no waste, fraud, or abuse mainly due to the diligence of the state's 
Public Service Commission in overseeing the program. The PSC thoroughly 
vets all companies before designating them as Eligible 
Telecommunications Carriers, and they have leverage through this 
process to police the quality of the services provided. We also have a 
system of verifying the eligibility of consumers applying to the 
program. I understand that some of the changes that you are considering 
would eliminate the important role that states like Nebraska play in 
overseeing and policing the Lifeline program. How would the FCC be able 
to replicate the work that states do to prevent waste, fraud, and abuse 
in the Lifeline program?
    Answer. Thank you for the question. As a former state commissioner, 
I respect and appreciate the significant role many states play and am 
always mindful of this in my capacity as an FCC Commissioner. As we 
reform Lifeline, my goal is to create a dignified program that creates 
more choice for consumers and eliminates the incentives for fraud. I 
have heard the current Lifeline program, including eligibility 
determination and participation, may deter some providers from 
participating, and I am open to ways to reduce barriers and increase 
choice for consumers. The Chairman just circulated an Order to achieve 
these goals and, if you have concerns, I am happy to meet with you to 
better understand how we can achieve our shared goals.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                         Hon. Mignon L. Clyburn
    Question 1. For years, I have believed that the way in which rules 
are processed at the Commission lacks transparency and is detrimental 
to the American public. My FCC Process Reform Act would address these 
transparency and accountability issues for the sake of consumers and 
the industries supporting innovation and our economy.
    For example, the public has no idea the specific language of the 
rules the Commission is voting on until after they are passed. We saw 
that with the net neutrality rules that were pushed through this time 
last year, and we saw it a few weeks ago when the FCC voted on the 
proposal related to set-top boxes.
    In fact, Chairman Wheeler said during that meeting on set-top 
boxes: ``There have been lots of wild assertions about this proposal 
before anybody saw it.'' The problem is that the public doesn't know 
what to expect from the rule--there is no certainty for those on the 
outside.
    Do you believe the public has a right to see the specific language 
of a rule before it is voted on by the Commission?
    Answer. Thank you for the question. In my opinion, the 
Administrative Procedures Act, which governs all Federal agencies, has 
sufficient notice and comment requirements to give the public, 
including FCC licensees, adequate information about rules the 
Commission might adopt and sufficient opportunity to comment on any 
such proposed rules. To comply with the APA, the Commission typically 
discusses rule proposals in a Notice of Proposed Rulemaking. In some 
cases, it might be difficult to specify every detail of such proposed 
rules. Therefore, Commission should have flexibility, when those few 
instances present themselves, to not specify every detail of every 
proposed rule.

    Question 2. As someone committed to protecting Americans' and 
Nevadans' privacy, especially related to personally identifiable 
information (PII), I have a questions regarding the recent set-top box 
Notice of Proposed Rulemaking.
    Currently, pay-TV companies must follow strong privacy protections 
to ensure consumers' personal information is not collected, utilized, 
or shared for non-service related purposes. How does this NPRM 
contemplate applying and enforcing these same privacy to any new 
suppliers entering the set-top box market? Does the FCC have the legal 
authority to enforce Title 6 privacy standards on third parties?
    Answer. Thank you for the question. I share your concern about 
protecting consumer privacy. While device manufacturers are not subject 
to Title VI as cable providers are, the NPRM proposes that in order to 
be certified, a navigation device maker will need to show that they are 
in compliance with privacy obligations in order to receive information 
from MVPDs.
    In reality, this could mean that navigation device makers will 
comply with the more stringent European Union privacy regulations, in 
order to be able to market their products globally.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Claire McCaskill to 
                         Hon. Mignon L. Clyburn
    Question 1. One of the best tools the Commission has in overseeing 
the Lifeline program is the ability to take aggressive enforcement 
against carriers violating the rules of the program, companies that are 
abusing both the consumers who use the program as well as the rate 
payers that fund it. That's why I applauded a flurry of announced 
enforcement activity from September 2013 through February 2014. During 
that time the FCC issued Notices of Apparent Liability (NALs) totaling 
more than $94 million in proposed fines for 12 companies participating 
in the Lifeline program. Some of those notices are more than two-and-a-
half years old yet not a penny of that money has yet been collected. 
Will you press the Enforcement Bureau to either issue forfeiture 
orders, reach settlements, or dismiss these 12 NALs in an expeditious 
manner?
    Answer. Thank you for your questions. Yes, I agree it is 
appropriate to resolve all Notices of Apparent Liability in a timely 
manner. I also do not have any reason to believe that the Enforcement 
the Bureau is not actively working on pending matters in a manner that 
upholds, respects and balances the rights and responsibilities of both 
the consumer and the carrier.

    Question 2. To avoid this situation in the future, would you 
support a shot clock for resolution of NALs? If so, what do you believe 
would be an acceptable amount of time?
    Answer. While a shot clock could be useful to ensure that the 
agency remains on track when it comes to resolving outstanding issues, 
each situation is different. As a result, while generally supportive of 
a strict timeframe, I would need to learn more about the current 
Enforcement Bureau process and timelines when it comes to particular 
violation categories in order to provide a specific recommendation.

    Question 3. The Bipartisan Budget Act of 2015 included an unwise 
and harmful provision to exempt debt collection calls on behalf of the 
Federal Government from Telephone Consumer Protection Act (TCPA) rules 
that prohibit robocalls to cell phones. Although the provision was 
ostensibly aimed at collecting student loan debt, the loophole was 
potentially widened either further by adoption of the Fixing America's 
Surface Transportation (FAST) Act in December, which requires the 
Internal Revenue Service to contract with private debt collectors to 
collect unpaid taxes. I have held hearings in this committee's Consumer 
Protection Subcommittee and at the Senate Aging Committee on robocalls. 
We should be making it harder--not easier--for this number one consumer 
complaint to continue, especially when there is no evidence that 
robocalls are an effective means of reaching consumers. Until we are 
successful in repealing this provision, the FCC is tasked with adopting 
rules to implement it. Would you support rules that require companies 
collecting debt on behalf of the Federal Government to register with 
the FCC in advance of doing so?
    Answer. The Commission is currently considering a Notice of 
Proposed Rulemaking that implements the Bipartisan Budget Act of 2015. 
I am carefully weighing the proposal in order to ensure that we 
maintain the consumer protections that the TCPA intended, and will take 
this proposal into consideration.

    Question 4. Would you support rules that limit calls from companies 
collecting debt on behalf of the Federal Government to no more than one 
call per consumer per month?
    Answer. The Commission is currently considering a Notice of 
Proposed Rulemaking that implements the Bipartisan Budget Act of 2015. 
I am carefully weighing the proposal in order to ensure that we 
maintain the consumer protections that the TCPA intended, and agree 
that there should be a limit on the number of calls per month, as well 
as opt-out accommodations.

    Question 5. What impact do you believe this exemption will have on 
the ability of the commission's Enforcement Bureau to differentiate 
between calls that are now exempt from TCPA and those that are not, 
particularly when exempt calls and non-exempt calls could be coming 
from the same call centers?
    Answer. The Commission is currently considering a Notice of 
Proposed Rulemaking that implements the Bipartisan Budget Act of 2015. 
I am carefully weighing the proposal in order to ensure that we 
maintain the consumer protections that the TCPA intended. Like all of 
our rulemakings, I agree that we need to take enforceability into 
account as we evaluate the item.

    Question 6. The Chairman recently received a letter from Senator 
Blunt and me regarding the upcoming reverse auction portion of Connect 
America Fund, Phase II (CAF II).
    For CAF II in Missouri, there is approximately $400 million 
available over the next 10 years to bring broadband to unserved parts 
of the state. Can you assure me that the money will be spent in 
Missouri and not be reallocated to other areas of the country?
    Answer. The Order adopting rules for the Connect America Fund Phase 
II auction is on circulation. I am still reviewing the proposed Order 
and evaluating the implications of various proposals, including how 
funding would be distributed. While I cannot reveal the substance of 
the item on circulation, I am happy to meet with you and your staff to 
hear how you would propose to ensure that funding would remain within a 
given state.

    Question 7. As you consider the framework to govern the reverse 
auction to award the remaining dollars available in CAF II, how will 
you ensure that funded projects not only meet today's broadband 
definition, but are future proof and scalable to keep pace with ever-
changing technology and increasing needs for higher speed broadband?
    Answer. As noted above, the Order adopting rules for the Connect 
America Fund Phase II auction is on circulation. I am still reviewing 
the proposed Order but certainly share the goal that we want to ensure 
we fund projects that are future-proof. At the same time, universal 
service support is limited so I want to ensure we have a framework to 
ensure that we enable all consumers to have access to broadband and 
voice services. If you have ideas on how best to achieve these goals, I 
would be interested in hearing them and would be happy to meet with you 
and your staff.

    Question 8. In 1993, through the Omnibus Budget Reconciliation Act 
of 1993, Congress directed the FCC to develop regulations governing the 
competitive bidding of spectrum. Included in the statutory instructions 
from Congress was a requirement that the Commission ``ensure that small 
businesses, rural telephone companies, and businesses owned by members 
of minority groups and women are given the opportunity to participate 
in the provision of spectrum-based services.'' To meet this 
congressional mandate the FCC created the Designated Entity (DE) 
program. The program's worthy goal of providing a mechanism for 
legitimate small businesses to partner with larger ones in spectrum 
auctions has undoubtedly helped many small businesses win spectrum 
licenses over the past 20+ years. But it has also provided a blueprint 
for large, multinational, multi-billion-dollar corporations to game the 
system and receive discounts on their bids. What assurances can you 
provide that the Commission will do a better job of monitoring 
potential abuse of the DE program in the upcoming incentive auction 
than it did in the recent AWS-3 auction?
    Answer. In the 2015 Competitive Bidding Order, the Commission 
adopted a number of reforms to prevent abuse of the DE program. First, 
we prohibited joint bidding agreements that involve a shared strategy 
for bidding at auction. Second, we retained the existing five-year 
unjust enrichment period and graduated repayment schedule. But, we made 
clear that we are limiting the amount of spectrum that non-controlling 
disclosable interest holders of a designated entity--such as 
investors--can use during the unjust enrichment period. Third, when 
evaluating designated entity applications, we adopted a totality-of-
the-circumstances approach when examining whether an agreement or 
relationship between an entity and an alleged non-controlling entity 
would warrant attributing the non-controlling interest's revenue to the 
designated entities. We issued guidance that some management, loan, and 
organizational documents--such as limited liability company agreements 
and other types of operational agreements--could raise concerns that 
warrant particular scrutiny as part of our application review.

    Question 9. When Congress and the FCC were establishing the 
framework for spectrum auctions more than 20 years ago it probably made 
sense to ensure small businesses were able to compete. But a lot has 
changed. The cost of entering the incredibly expensive wireless 
infrastructure industry is far greater than it was in the early 1990s. 
A company that truly has revenues of $40 million, $15 million, or $3 
million--the thresholds set by the commission for the various levels of 
bidding credits--would be unlikely to enter the industry today. So is 
it time to look at simply eliminating the DE program to prevent future 
abuse?
    Answer. I do not think we need to eliminate the Designated Entity 
(DE) program in order to prevent future abuse. More than 20 years ago, 
Congress realized that advanced telecommunications service and wireless 
technologies had the potential to create tremendous opportunities for 
all communities in our Nation. Though it may not have predicted 
smartphones, tablets, millions of mobile broadband apps, and the 
Internet of Things, Congress knew that in order for all communities to 
benefit from technological innovation, this Commission's obligation to 
allocate spectrum in the public interest should be guided by a few 
enduring principles. The ones most relevant here are: all consumers 
should have access to affordable service; entrepreneurs and small 
businesses should have a reasonable opportunity to own and provide 
communications services; and vigorous competition can promote both of 
those policy goals. When Congress amended the Communications Act in the 
1990s to give the Commission authority to conduct spectrum auctions, it 
mandated that we design them to ``promot[e] economic opportunity and 
competition,'' ensur[e] that new and innovative technologies are 
readily accessible to the American people,'' ``avoid[] excessive 
concentration of licenses . . . and disseminat[e] licenses among a wide 
variety of applicants, including small businesses.'' We are not seeing 
widespread abuse that would warrant complete elimination of the 
program. Furthermore, as my prior response indicated, last year, the 
Commission adopted a number of reforms to ensure that only bona fide 
small businesses benefit from our DE program.
                                 ______
                                 
 Response to Written Questions Submitted by Hon. Richard Blumenthal to 
                         Hon. Mignon L. Clyburn
    Question 1. As you know, to address increasing demand for wireless 
broadband access, Congress directed the FCC to conduct an incentive 
auction, to encourage broadcast licensees to voluntarily relinquish 
their spectrum rights in exchange for a share of the proceeds in 
auctioning this spectrum to new licensees. In many parts of the 
country, contiguous spectrum will be freed up by ``repacking'' the 
channels to which remaining television broadcasters are currently 
assigned. Do you believe there is enough money in the TV Broadcaster 
Relocation Fund to cover repacking-related expenses incurred by 
broadcasters?
    Answer. I am aware of studies that conclude that the Relocation 
Fund will be sufficient, and others that say it will not. As the 
scheduled start of the Incentive Auction is mere weeks away, we should 
have a more definitive answer soon on whether or not the Fund will be 
sufficient.

    Question 2. If the 39 month repack time-frame and the $1.75 billion 
relocation fund are insufficient, does the FCC have the flexibility in 
the statute to ensure consumers and communities won't be negatively 
affected by signals going off the air?
    Answer. The Relocation Fund is based upon the statutory language, 
and the 39 month repack period derives from the amount of time that 
Congress gave the Commission to disburse the Relocation Fund. Once we 
know more about the number of stations that will need to be repacked--
and that will be soon--I look forward to working with my colleagues, 
the industry and Congress to ensure the transition is as smooth as 
possible. I am confident that we will collectively work to minimize 
disruption to consumers.

    Question 3. If so, how can the FCC ensure that broadcasters have 
sufficient time to move without being forced off the air, if factors 
outside their control delay their ability to reconfigure their 
facilities?
    Answer. I look forward to collaborating with my colleagues, the 
industry and Congress to ensure a transition that is as smooth as 
possible. Once we know more about the number of stations that will need 
to be repacked, we will have a better idea about the scope of the task 
in front of us. The Chairman has announced that the Incentive Auction 
Task Force will remain in place to oversee the transition, working to 
ensure that we minimize disruption to consumers.

    Questions 4. Do you agree that no non-participating broadcaster 
should be forced off the air, or forced to cover the costs of 
transitioning their signal, to accommodate the repack?
    Answer. I agree that no non-participating broadcaster should be 
forced off the air, and that the Relocation Fund should cover all valid 
transition costs. I will be steadfast in my commitment to ensure a 
smooth transition for the viewing public.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Cory Booker to 
                         Hon. Mignon L. Clyburn
    Question 1. Your leadership was essential in achieving reform of 
the pricing rates for phone calls made from within State and Federal 
prison systems. I applaud the FCC's actions to ensure that incarcerated 
persons can stay connected to their families and ultimately 
rehabilitate into society.
    It appears that similar abuses are occurring in new communications 
technologies such as video conference calling. I am concerned about a 
trend whereby in-person visits to incarcerated family members may be 
replaced by video conference calls in some prisons. Furthermore, these 
video conference calls are often subject to high pricing rates, 
potentially transforming these precious family interactions into a 
source of profit for prisons. What jurisdiction does the FCC have with 
regard to video visitation calls?
    Answer. The FCC sought comment on our jurisdiction to address video 
visitation in the Further Notice of Proposed Rulemaking adopted last 
October. Section 276 of the Act, which gives the FCC authority over 
inmate calling services, is technology neutral and the FCC's 
reclassification of broadband Internet access services as a Title II 
service also applies to inmate calling services. While I am confident 
that the FCC has authority over video visitation calls, providers have 
disputed that the FCC has jurisdiction. If Congress were to act, it 
could remove any lingering doubt regarding our jurisdiction.

    Question 2. What steps should the FCC take to ensure that families 
are able to stay connected with incarcerated individuals?
    Answer. I believe that the FCC, as well as states, should take all 
actions within our power to enable families to stay connected with 
incarcerated individuals, and this means ensuring that inmate calling 
rates are affordable. The FCC's Order adopting rate caps has been 
challenged in court and the providers were successful in their quest 
for a stay of the proposed rate caps. Even so, there is good news: caps 
on those tremendously high ancillary fees will go into effect for 
prisons on March 17, 2016, and the previous interim rate caps continue 
to apply to all inmate calling services calls. I look forward to 
defending the action in court, I trust that the stay is temporary and 
permanent relief is within view.
    In addition, if the FCC's rate caps are the ceiling and the states 
enact further reforms and refine rates and reduce fees for jails and 
prisons within their borders, then it is clear that affordably staying 
connected with friends and family while incarcerated will finally be 
possible. This most ideal scenario would be a win-win for society and 
could help make a real difference in criminal justice reform, since 
numerous studies clearly show that there is a direct correlation 
between regular contact with family and friends during incarceration 
and lower recidivism rates. We should all do everything in our power to 
promote such connectivity through affordable rates.

                                  [all]

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