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95–817 2016

FCC REAUTHORIZATION: OVERSIGHT OF THE 

COMMISSION 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMUNICATIONS AND 

TECHNOLOGY 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

MARCH 19, 2015 

Serial No. 114–24 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

(III) 

SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY

GREG WALDEN, Oregon 

Chairman 

ROBERT E. LATTA, Ohio 

Vice Chairman 

JOHN SHIMKUS, Illinois 

MARSHA BLACKBURN, Tennessee 

STEVE SCALISE, Louisiana 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

ANNA G. ESHOO, California 

Ranking Member 

MICHAEL F. DOYLE, Pennsylvania 

PETER WELCH, Vermont 

JOHN A. YARMUTH, Kentucky 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

BOBBY L. RUSH, Illinois 

DIANA DEGETTE, Colorado 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

JERRY MCNERNEY, California 

BEN RAY LUJA ́ N, New Mexico 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(V) 

C O N T E N T S 

Page 

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

opening statement ................................................................................................ 2 

Prepared statement .......................................................................................... 4 

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

prepared statement .............................................................................................. 115 

WITNESSES

Tom Wheeler, Chairman, Federal Communications Commission ....................... 27 

Prepared statement .......................................................................................... 30 

Answers to submitted questions ...................................................................... 122 

Mignon Clyburn, Commissioner, Federal Communications Commission ........... 44 

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

Answers to submitted questions ...................................................................... 146 

Jessica Rosenworcel, Commissioner, Federal Communications Commission ..... 54 

Prepared statement .......................................................................................... 56 

Answers to submitted questions ...................................................................... 153 

Ajit Pai, Commissioner, Federal Communications Commission .......................... 60 

Prepared statement .......................................................................................... 62 

Answers to submitted questions ...................................................................... 159 

Michael O’Rielly, Commissioner, Federal Communications Commission ........... 75 

Prepared statement .......................................................................................... 77 

Answers to submitted questions ...................................................................... 164 

SUBMITTED MATERIAL

H.R. ———— ........................................................................................................... 5 

Statement of various racial justice and civil rights organizations, submitted 

by Ms. Eshoo ........................................................................................................ 116 

Statement of the Public Interest Spectrum Coalition and other nonprofit 

groups, submitted by Mr. Doyle .......................................................................... 118 

(1) 

FCC REAUTHORIZATION: OVERSIGHT OF THE 

COMMISSION 

THURSDAY, MARCH 19, 2015 

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

The subcommittee met, pursuant to call, at 11:02 a.m., in room 

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

(chairman of the subcommittee) presiding. 

Members present: Representatives Walden, Latta, Shimkus, 

Blackburn, Scalise, Lance, Guthrie, Olson, Pompeo, Kinzinger, Bilirakis, Johnson, Long, Collins, Cramer, Barton, Eshoo, Doyle, 

Clarke, Loebsack, Rush, Butterfield, Matsui, McNerney, Luja ́n, 

Cardenas, and Pallone (ex officio). 

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

Policy Advisor for Communications and Technology; Sean Bonyun, 

Communications Director; Leighton Brown, Press Assistant; Karen 

Christian, General Counsel; Andy Duberstein, Deputy Press Secretary; Gene Fullano, Detailee, Telecom; Kelsey Guyselman, Counsel, Telecom; Peter Kielty, Deputy General Counsel; Grace Koh, 

Counsel, Telecom; David Redl, Counsel, Telecom; Charlotte 

Savercool, Legislative Clerk; Jeff Carroll, Democratic Staff Director; David Goldman, Democratic Chief Counsel, Communications 

and Technology; Margaret McCarthy, Democratic Professional Staff 

Member; Tim Robinson, Democratic Chief Counsel; and Ryan 

Skukowski, Democratic Policy Analyst. 

Mr. WALDEN. If everyone could take their seats. And while they 

are, before we start the clock, as many of you know, I am going 

to exert a little Chairman’s prerogative here, because Mr. Wheeler 

and I have not always gotten along. And I have my opening statement here, but I am just sick and tired of your third string approach to winning, and the way you are willing to tackle and run 

over the top of people, and score points just for scoring points. 

Now, now that the U of O/OU game is over in the national football championship, I want everybody to know I have kept my promise and worn the Ohio State tie. So—— 

Mr. WHEELER. Mr. Chairman, I—— 

Mr. WALDEN. No, you are out of order. 

Mr. WHEELER. I hope we—— 

Mr. WALDEN. I am just going to say that right now. Mute the 

mics—nothing. 

Mr. WHEELER. I hope we are on the record, because I just want 

to say two things. Number one, you are an honorable man, and—— 

2 

Mr. WALDEN. Thank you. 

Mr. WHEELER [continuing]. You had the wrong side, and we were 

pleased to beat you with our backup to the backup quarterback. 

Mr. WALDEN. You think this is going to go better for you? 

Mr. WHEELER. But I do think that the color is very becoming on 

you. 

Mr. WALDEN. Now, just so you know, I have now fulfilled my bet 

that I would wear the Ohio State tie if they beat my Ducks, and 

vice versa. I also want you to know there is a pending matter to 

be settled. I did offer up dates for lunch, which I will buy, and I 

suggested February 26 might have been a wonderful day for the 

Chairman to have lunch with me. He suggested he had other matters to attend to. All right. Enough of fun and frivolity. Thank you 

all for being here, and I thank our FCC Commissioners for being 

here, and my colleagues. I know this is a ‘‘go away day’’, and we 

will probably interrupt it by votes, so we will try and move through 

this. But this is really important business we are going to take up, 

as we always do in this committee, and so on to the serious matters. 

OPENING STATEMENT OF HON. GREG WALDEN 

Mr. WALDEN. It was just over 2 weeks ago that we had the Commission’s managing director present us with his rationale for the 

largest budget request in history for the Federal Communications 

Commission. We were able to discuss with him whether the funding levels requested would actually yield an effective and credible 

agency. Today we have the opportunity to ask the Commissioners 

themselves whether this agency is functioning as it should, whether it is producing the high caliber policymaking that American society requires and deserves, and I, for one, have to confess, I am 

skeptical. 

I think I have a good reason for my skepticism. The Federal 

Communications Commission was once a transparent, predictable 

agency, presiding with a light touch over an explosion of mobile 

and Internet investment and innovation that has greatly benefitted 

consumers. Today that agency, in my opinion, has evolved into a 

place where statutory obligations are left to languish in favor of 

scoring points. 

The agency’s capitulation to the President’s demands comes at 

the end of a proceeding mired in what I say is procedural failures, 

and the White House’s behind the scenes influence on the FCC’s 

process has been well documented by credible news sources, including the Wall Street Journal, through e-mails from Senator Reid’s 

office last May as well. It is the responsibility of an expert independent agency to issue detailed notice to the public when it intends to act, and to apply its expertise to resolve the hard questions of law and policy. This process should be transparent, and 

every effort should be made to resist calls to politicize the outcome. 

Perhaps in this respect, the FCC should learn a thing or two from 

the Federal Trade Commission, an agency the FCC rendered moot 

in protecting ISP consumers. 

A properly functioning commission doesn’t work behind closed 

doors with the President to bypass the administrative process, and 

a properly functioning commission doesn’t make decisions based on 

3 

the number of click and bait e-mails that interest groups can generate. A properly functioning commission focuses on law and facts 

to generate thoughtful and legally sound analysis, rather than 

being carried away by politically generated populous furor. 

The Open Internet proceeding is not the only place where the 

FCC seems to have abandoned good process. I am also concerned 

about the use of delegated authority. Commissioners have the responsibility for dealing with matters that are controversial or make 

new policy, and should not simply delegate a decision to bury the 

result. I am concerned that transparency has suffered between the 

Commissioners. Lack of agreement should not mean that decisional 

documents are kept from other Commissioners until the 11th hour. 

And I am concerned that an excessive number practical proceedings remain unresolved, and thousands of businesses wait in 

the wings while the Commission focuses on extending its regulatory reach. 

But mostly I am concerned that the FCC has overstepped its jurisdiction too regularly, net neutrality, the obvious example here, 

but there are others. An agency only has the authority given to it 

by statute, and I can’t see how any reading of the Communications 

Act would give the impression that Congress granted the FCC authority to be the ultimate arbiter of the use of personal information. I cannot see how the Telecommunications Act could be read 

to gut the 10th Amendment, place the FCC in the position of deciding how states can spend their tax dollars. I cannot see how the 

FCC could possibly interpret its governing statutes to wrest control 

of content from the creators and mandate its presentation on the 

Internet. 

But for the fact that I only have 5 minutes for my statement, we 

could keep going. A bidding credit waiver for grain management, 

government researchers in newsrooms adopting trouble damages 

without notice, excessive and unfunded merger conditions, last 

minute data dumps into the record. The FCC appears to believe it 

is authorized to take the Potter Stewart approach to its authority. 

I know it when I see it. 

To be fair, some of the responsibility lies right here in Congress. 

We have not updated the Communications Act for decades, and 

technology has out-evolved its regulatory framework. The FCC does 

not have the tools to do its job, but this doesn’t mean the agency 

should distort or ignore the current law, or worse, threaten to manufacture authority out of whole cloth, should regulated industries 

have the temerity to resist the Commission’s demands. Instead it 

should work with Congress. We have offered a way forward on net 

neutrality that is more certain, and less costly for society, and it 

is not clear to me that the objections to our legislation are based 

on policy. 

But if we could work together on fixing the net neutrality situation, I think we would be able to chalk up a victory for all of us, 

and for all our consumers, and for the American economy. So it 

starts today with trying to fix the agency itself. It is our job to do 

our due diligence and reauthorize this agency for the first time 

since 1995. I thank our Commissioners, and Chairman Wheeler, for 

their attendance today, and I look forward to our productive session ahead. 

4 

[The prepared statement of Mr. Walden follows:] 

PREPARED STATEMENT OF HON. GREG WALDEN

It was just over 2 weeks ago that we had the commission’s Managing Director 

present us with his rationale for the largest budget request in history for the FCC. 

We were able to discuss with him whether the funding levels requested would actually yield an effective and credible agency. Today we have the opportunity to ask 

the Commissioners themselves whether this agency is functioning as it should— 

whether it is producing the high-caliber policymaking that the American society requires and deserves. I, for one, am skeptical that this is the case. 

I think I have good reason for my skepticism. The Federal Communications Commission was once a transparent and predictable agency presiding with a light-touch 

over an explosion of mobile and Internet investment and innovation that has greatly 

benefited consumers. Today that agency has devolved into a place where statutory 

obligations are left to languish in favor of scoring political points. 

The agency’s capitulation to the president’s demands comes at the end of a proceeding mired in procedural failures and the White House’s behind-the-scenes influence on the FCC’s process has been well documented by the Wall Street Journal 

and through emails from Senator Harry Reid’s office last May. 

It is the responsibility of an expert independent agency to issue detailed notice 

to the public when it intends to act and to apply its expertise to resolve the hard 

questions of law and policy. This process should be transparent and every effort 

should be made to resist calls to politicize the outcome. Perhaps in this respect the 

FCC could learn something from the Federal Trade Commission—an agency the 

FCC recently rendered moot in protecting ISP customers. 

A properly functioning commission doesn’t work behind closed doors with the 

president to bypass the administrative process and a properly functioning commission doesn’t make decisions based on the number of click-bait emails that interest 

groups can generate. A properly functioning commission focuses on law and facts 

to generate thoughtful and legally sound analysis rather than being carried away 

by politically generated populist furor. 

The Open Internet proceeding is not the only place where the FCC seems to have 

abandoned good process. I’m also concerned about the use of delegated authority. 

Commissioners have the responsibility for dealing with matters that are controversial or make new policy and should not simply delegate a decision to bury the result. 

I am concerned that transparency has suffered between the Commissioners; a lack 

of agreement should not mean that decisional documents are kept from other Commissioners until the eleventh hour. And I’m concerned that an excessive number of 

practical proceedings remain unresolved—and thousands of businesses wait in the 

wings—while the commission focuses on extending its regulatory reach. 

But mostly, I’m concerned that the FCC oversteps its jurisdiction too regularly. 

Net neutrality is the obvious example here, but there are others. An agency only 

has the authority given to it by statute, and I cannot see how any reading of the 

Communications Act would give the impression that Congress granted the FCC authority to be the ultimate arbiter of the use of personal information; I cannot see 

how the Telecommunications Act could be read to gut the 10th Amendment and 

place the FCC in the position of deciding how states can spend tax dollars; and I 

cannot see how the FCC could possibly interpret its governing statutes to wrest control of content from the creators and mandate its presentation on the Internet. 

But for the fact that I only have 5 minutes for my statement, we could keep doing 

this all day. A bidding credit waiver for Grain Management; government researchers in newsrooms; adopting treble damages without notice; excessive and unfounded 

merger conditions; and last minute data dumps into the record. The FCC appears 

to believe that it is authorized to take the Potter Stewart approach to its authority: 

‘‘I know it when I see it.’’ 

To be fair, some of the responsibility here lies with Congress. We haven’t updated 

the Communications Act for decades, and technology has out-evolved its regulatory 

framework. The FCC doesn’t have the tools to do its job. But this doesn’t mean that 

the agency should distort or ignore the current law or worse threaten to manufacture authority in whole cloth should regulated industries have the temerity to resist 

the commission’s demands. Instead, it should work with Congress. We have offered 

a way forward on net neutrality that is more certain and less costly for society, and 

it’s not clear to me that the objections to our legislation are based on policy. But 

if we could work together on fixing the net neutrality situation, I think we would 

be able chalk up a victory for all of us, for all consumers, and for the American economy. 

5 

It starts today with trying to fix the agency itself. 

[H.R. ———— follows:] 


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23 

Mr. WALDEN. I would yield the remaining 30 seconds to the vice 

chair, Mr. Latta. 

Mr. LATTA. Well, thank you, Mr. Chairman, and I appreciate you 

for yielding, and holding today’s hearing. I thank the Commissioners for being here. The success and productivity of the communications and technology industry never ceases to amaze me, as it 

has been, and is a constant bright spot in our economy as it rapidly 

advances and evolves to meet consumer demands. 

Given the FCC’s integral role in the marketplace, it is critical 

that the agency is transparent, efficient, and accountable. That is 

why I am concerned with the FCC’s decision to reclassify 

broadband Internet service as a telecommunications service under 

Title II. Despite the fact that the order goes against a light touch 

regulatory approach that was fundamental for providing the industry with flexibility it needed to invest, innovate, and create jobs, 

the order process was not transparent, and represents a regulatory 

overreach that will have lasting negative consequences. 

Today’s hearing is a step in the right direction in an effort to 

make the agency more efficient and effective by reviewing the Commission’s policy decision and processes. I look forward to hearing 

from the Commissioners. 

Mr. Chairman, I yield back with a point of personal privilege. 

From an Ohioan, I think your tie looks great. 

Mr. WALDEN. Sure glad I yielded time to you. With that, I will 

turn to my friend from California, part of the Pac-12, Ms. Eshoo. 

Ms. ESHOO. Thank you, Mr. Chairman. I don’t have any sports 

analogies, so—and obviously I hold a much different view, and so 

I want to express that view with an intensity that I think needs 

to be brought to really what this issue is all about. And I appreciate having the hearing, but I think that the main point is that 

on February 26 the American people finally won one, and it was 

big. The regular guys and gals across our country, part of the beleaguered middle class, were heard. It was a historic day when the 

FCC voted for bright line Open Internet rules to protect the ability 

of consumers, students, and entrepreneurs to learn and explore, 

create and market, all on equal footing. This is about net equality. 

The FCC decision ensures that the Internet remains open and 

accessible to everyone, a source of intellectual enrichment, and an 

engine for economic growth and prosperity in our country. The 

Internet is the public library of our time, a laboratory in the most 

robust marketplace imaginable, and the FCC declared it open to 

all, and for all. I think this is nothing short of extraordinary. 

It was a day when the average person witnessed something very 

rare. The big shots in Washington, D.C. sided with them. Decision 

makers actually took in and considered the advice of over four million Americans. I remember watching TV when Dr. King addressed 

a million people on the Mall. It was a sea of humanity. Well, put 

a multiplier on that. It is over four million people that weighed in, 

and I think that kind of public engagement with our government 

should be celebrated, and not rolled over and disrespected. 

Today the majority has offered a legislative discussion draft intended to reauthorize the FCC. I have reviewed the draft legislation, and concluded that, in effect, it is meant to squeeze an agency 

that is already operating at the lowest number of full time staff in 

24 

30 years. The FCC has to have the means to fulfill its mission, to 

protect consumers, promote competition, and advance innovation. 

That is their mission. This includes huge issues, and they are huge, 

like freeing up additional spectrum, promoting municipal 

broadband deployment, and enhancing 911 services. Any attempt 

to overhaul the FCC’s funding structure should be fully analyzed, 

and the implications of these changes should be fully understood. 

We shouldn’t be horsing around with it, in plain English, and a 48 

hour review is simply insufficient. 

So I find myself wondering, why are we having this hearing 

today? I hope it isn’t a fishing expedition. By compelling the FCC 

Chairman and Commissioners to testify five times over the course 

of 8 days, it seems to me that the majority seems to have chosen 

to ignore a glaring fact. Four million—over four million Americans 

did something. They, and countless more, contacted their members 

of Congress to say, we don’t want to pay more for less. We don’t 

think any kind of discrimination, blocking, or throttling is good or 

fair. We are tired of poor service from providers, confusing bills, 

and having to wait for a half hour or more on hold to try and talk 

to a human being, and we don’t want any gatekeepers. 

So I think that is really what this is all about. I welcome the debate. I welcome the discussion with the Commissioners. And I yield 

the remainder of my time to Congresswoman Matsui. 

Ms. MATSUI. Thank you very much, Ranking Member. I would 

also like to welcome the Chairman and the Commissioners here 

today. We know over the last year the debate over the future of the 

Internet has not been an easy one. There have been many twists 

and turns. But in the end, I was specifically pleased that the FCC’s 

net neutrality rules ensure that paid prioritization schemes, or socalled Internet fast lanes never see the light of day in our economy. 

Americans will not experience Internet slow lanes or gatekeepers 

hindering traffic. We know, however, the fight to preserve net neutrality is not over. 

That said, it is time for us to really get back to working on issues 

that advance our Internet economy. I think spectrum should be at 

the top of that list. The AWS3 option demonstrated the massive appetite for spectrum. I look forward to re-introducing bipartisan legislation with Congressman Guthrie that would create the first ever 

incentive auction for Federal agencies. 

With that, I yield back the balance of my time. 

Mr. WALDEN. The gentlelady yields back. Chair recognizes the 

Vice Chairman of the full committee, Ms. Blackburn. 

Mrs. BLACKBURN. Thank you, Mr. Chairman. And to the Commission, I want to say thank you for being here and offering your 

testimony. As you all know, we have got questions, and we want 

to move right on to them. I think that the recent actions taken by 

the FCC have really raised more questions about your scope, and 

your reach, and your authority, and I will also say about transparency. Chairman Wheeler, I will tell you, I do not think it is acceptable for the Commission to pass a net neutrality rule before the 

American people have the opportunity to find out what is in it, and 

that was disappointing to us. Releasing a draft final order should 

have been a part of the rulemaking process, and it is disappointing 

that it was not. Every dollar you spend is a taxpayer dollar. Every 

25 

action that you take affects the American taxpayer, so that lack of 

transparency is incredibly disappointing. 

I am sure that also you are hearing from Netflix, and some of 

the other stakeholders who have been very disappointed on what 

they found out once they started to read the 322 word-filled pages. 

I will tell you also, as a former State Senator from Tennessee, and 

someone that worked on the telecommunications and interactive 

technology issues there, I was terribly disappointed to see the action of the Commission, to choose to take a vote, and choose to preempt state laws in Tennessee and North Carolina that restrict municipal broadband entry. These are decisions that should be made 

by their state legislators. Your actions there are disappointing, and 

we have questions about them. 

And, Mr. Chairman, I yield back my time. 

Mr. WALDEN. Anyone else on the Republican side seeking time? 

If not, gentlelady yields back. Chair now recognizes the Ranking 

Member of the full Committee, the gentleman from New Jersey, 

Mr. Pallone, for 5 minutes. 

Mr. PALLONE. Thank you, Mr. Chairman. Over the past few days 

we have heard quite a bit about process, fairness, and transparency 

at the FCC. We just heard it again from my previous colleague. 

But given what has transpired in this subcommittee over the last 

48 hours, I wonder whether we first have to make sure our own 

house is in order. As witness testimony was already being submitted, the Republicans released, with no notice, a partisan discussion draft that would completely overhaul the FCC’s funding, and 

this maneuvering is unfair to the witnesses, and unfair to the 

members of the subcommittee, Mr. Chairman. Unfortunately—— 

Mr. WALDEN. Gentleman yield? 

Mr. PALLONE. Yes? 

Mr. WALDEN. Yes. So the discussion draft was put out at least 

an hour and a half before any testimony came in. I realize that is 

still not enough time, but this isn’t a markup. This is a hearing. 

We followed all the committee rules. We have circulated drafts, and 

always tried to be open and transparent. We will continue to be. 

We are not marking up a bill. 

Mr. PALLONE. Well, Mr. Chairman, unfortunately, in this Congress, we seem to have halted a tradition. I am not sure it is in 

the rules, but we have had a long tradition of sharing text with all 

members of the subcommittee at least a week prior to a legislative 

hearing, and we have seen these same partisan tactics—— 

Mr. WALDEN. Will the gentleman yield on that point? 

Mr. PALLONE. Sure. 

Mr. WALDEN. Because actually, when you all were in charge, I 

have got a list here of examples where that wasn’t the case. I agree 

we should be more transparent—— 

Mr. PALLONE. Well, let us just say, if I can take back my time, 

I would like to see us go back to a tradition, process, whatever it 

was, that we have at least a week prior to a legislative hearing. 

I mean, the same thing happened in the Commerce, Manufacturing, and Trade subcommittee in the last couple days, and it just, 

you know, I understand—maybe give examples of things that were 

done in the past by us, but I just think that, Mr. Upton, yourself, 

the subcommittee chairs have all said that they want to act in a 

26 

bipartisan way, they want bipartisan bills, and I appreciate that. 

But if you are going to do that, then we need to have more time 

than just the 48 hours that occurred here today. And we had the 

same thing yesterday in the other subcommittee. If we are going 

to really move forward, we are trying to do bills on a bipartisan 

basis, we need to have more than the 48 hours. 

In addition to that, I have yet to hear a convincing explanation 

for why this legislation is a good idea. Given what we just went 

through with the Department of Homeland Security, I doubt our 

constituents are clamoring for us to create another funding cliff, especially for an agency that just netted $41 billion for public safety 

and deficit reduction without raising a dime in taxes. I just think 

this agency is too important to play these types of games with its 

funding. 

And nonetheless, I am grateful that we are having the hearing 

today. It gives us the opportunity to show our appreciation in person and in public to the FCC for its work. So thank you, Chairman 

Wheeler, and to his fellow Commissioners for all that you have accomplished. This has been an eventful year for the FCC. The Commission has certainly received more than its fair share of attention, 

and also an unprecedented level of civic engagement. Four million 

Americans weighed in, overwhelmingly calling for strong Network 

Neutrality rules. 140 members of Congress engaged in the process. 

And, of course, the President expressed his opinion as well, which 

is not something that we should be embarrassed about, by the way. 

Yet despite the withering glare of the spotlight, the Commission 

stood tall. The Commissioners, and the entire staff of the FCC, 

have shown a steadfast dedication to serving the public interest. 

You showed everyone who called in, who wrote in, who came in to 

support net neutrality that the FCC and the rest of Washington 

know how to listen, so thank you. 

Now, I have repeatedly said that I welcome the majority’s change 

of heart, and their offer to legislate on this issue of net neutrality, 

and I remain open to looking for truly bipartisan ways to enshrine 

the FCC’s Network Neutrality protections into law. But after what 

has taken place over the past few days, I wonder if bipartisanship 

may only be in the eye of the beholder. 

If we are able to find a real partner in this process, we must 

make sure that our efforts do not come at the expense of all the 

other work the Commission does. The FCC must remain an effective cop on the beat to protect consumers. The FCC must continue 

to promote universal service to all Americans. The FCC must ensure that the telecommunications and media markets are competitive. And the FCC must maintain the vitality of our public safety 

communications. And that is why I look forward to hearing today 

how the FCC can continue to serve an important role in the 

broadband age. And so, to the Commissioners, thank you for coming here today, and thank you for your public service. 

May I just ask—I know, because I yielded time to you, Mr. 

Chairman, I wanted to yield a minute of my time to Mr. Luja ́n, but 

I don’t have it now. But if I could ask unanimous consent—— 

Mr. WALDEN. Without objection. 

Mr. PALLONE. Thank you. 

27 

Mr. LUJA ́ N. Thank you, Ranking Member Pallone, and let me second your comments about the need for us to work together. Telecommunications policy has a long history of being made on a bipartisan basis, and I would hate to see the polarization that defined 

so many of our policy debates dominate our efforts on this Subcommittee. 

Before us are real challenges. We still have 77 percent of New 

Mexicans living in rural areas that lack access to fixed high speed 

broadband. And as I have shared with Chairman Wheeler before, 

if we can have Internet access at 30,000 feet on an airplane, we 

should be able to have Internet access all across rural America, including New Mexico. 

Today I am especially interested in hearing from Commissioner 

Rosenworcel on the innovative potential of unlicensed spectrum, 

and I am also excited to hear from a former public utility commissioner, a colleague of mine as well, Commissioner Clyburn’s ideas 

to modernize the Lifeline program in the broadband era. And I 

want to hear from all Commissioners on how we can work with the 

FCC, including strengthening the information and technology systems that collapsed under the weight of millions of comments generated last year when a friend of ours, John Oliver, and four million others filed comment to the FCC, which crashed its servers. 

Four million comments is a lot, but surely the agency that is 

charged with overseeing the Internet should be able to handle the 

traffic. 

And with that, Mr. Chairman, I want to thank everyone for 

being here today, and I look forward to this important conversation 

today. 

Mr. WALDEN. Thank the gentleman for his comments. We will go 

now to the Chairman of the FCC for an opening statement. Mr. 

Wheeler, thank you for being here. We know you have a tough job, 

and we look forward to your comments, sir. 

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

COMMUNICATIONS COMMISSION; THE HONORABLE JESSICA 

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

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

STATEMENT OF TOM WHEELER 

Mr. WHEELER. Thank you very much, Mr. Chairman, Ranking 

Member Eshoo. It is a privilege to be here with all of my colleagues. There has been some reference up here about the Open 

Internet. I am sure we will discuss it more today. Clearly the decision that we made was a watershed. 

You, in your legislation, Mr. Chairman, and we in our regulation, 

identify a challenge, a problem that needs to be solved. We take 

different approaches, to be sure, and no doubt we are going to be 

discussing those, now and in the future. There is common agreement that the Internet is too important to ignore, and too imporVerDate Nov 24 2008 11:42 Jul 14, 2016 Jkt 037690 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-24 CHRIS
28 

tant to not have a set of yardsticks and rules. We have completed 

our work, now Open Internet rules will be in place. 

Now let me move on to another couple of issues that I think are 

important to the committee, and one is that there is a national 

emergency in emergency services, and Congress holds the key to 

the solution. Ms. Eshoo referenced the public safety challenges. The 

vast majority of calls to 911 come from mobile devices. In a unanimous decision of this entire Commission, we have established rules 

for wireless carriers to provide location information as to where 

that call is coming from. The carriers are stepping up. But delivering that information is only the front end of the challenge. 

Mr. Shimkus, about 15 years ago, led legislation making 911 a 

national number. Amazing it had never been that. The calls now 

go through, but many times it is like a tree falling in the forest. 

There was a recent tragic example in Georgia, when a lady by the 

name of Shanelle Anderson called as she was drowning in her car. 

The signal was received by an antenna that happened to be an adjacent PSAP, public safety answering point, that had decided not 

to have maps of the area next door. 

I have listened to the call, and it is heartbreaking. She keeps 

saying, ‘‘well, here is where I am,’’ and the dispatcher keeps saying, 

‘‘I can’t find it on the map. I can’t find it, I don’t know where you 

are,’’ and didn’t know where to send somebody. There are 6,500 different PSAPs in this country. They are all staffed by incredibly 

dedicated individuals, but there needs to be some kind of set of 

standards, and only Congress can deal with it. We have dealt with 

the front end, but now it is necessary to do something about the 

back end. This is not a power grab. I don’t care how it gets done, 

or what agency is responsible, but we owe this to the American 

people. 

The second quick issue that I would like to raise is, Mr. Chairman, both you and I want a Commission that works openly, fairly, 

and efficiently. While three-to-two votes always get the attention, 

about 90 percent of our decisions during my tenure have been 

unanimous. About two percent have been four to one, and there 

have been 21 out of 253 votes that have been three to two. 

We also have, during my tenure, the best record of any full commission this century for getting decisions out quickly. Seventy 

three percent of our decisions are released in one business day or 

less. The measure of that is the last Republican-led commission, it 

took a week before they could hit that number. We also have the 

lowest number, and percentage, of actions made on delegated authority of any commission, Republican or Democrat, in the last 15 

years. But regardless of this, we should be constantly striving for 

improvement. 

Commissioner O’Rielly has raised some really good questions 

about longstanding processes. He and I were in the same position. 

We walked in the door at the same time, and we found processes 

in place that had been typical for both Republican and Democratic 

administrations. As I say, he raised some really good questions, 

and to address these questions, I am going to be asking each Commissioner to appoint one staff person to work on a task force to be 

headed by Diane Cornell, who ran our Process Reform Task Force. 

I have already asked her to begin a review of all similarly situated 

29 

independent agencies so that we know what the procedures are for 

those agencies, and that can be a baseline against which we can 

measure our procedures and move forward to address what I think 

are some of the legitimate issues that Commissioner O’Rielly has 

raised. Thank you, Mr. Chairman. 

[The prepared statement of Mr. Wheeler follows:] 

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Mr. WALDEN. Thank you, Mr. Chairman. We will now move to 

the Honorable Mignon Clyburn, Commissioner of Federal Communications Commission. It is a delight to have you back here, former 

Chairwoman. We are delighted to have you here. Please go ahead. 

STATEMENT OF MIGNON CLYBURN 

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

Eshoo, distinguished members of the Committee. Thank you for the 

opportunity to share my perspectives with you this morning. In my 

written testimony for the record, I discussed the Commission’s 

work in several policy areas. This morning I will focus on spectrum 

auctions and inmate calling services reform. 

In March of 2014 we unanimously adopted licensing and service 

rules to auction 65 megahertz of spectrum in the AWS–3 bands. 

This was not only important for wireless seeking to meet skyrocketing consumer demand on their networks, but it was critical 

for the promotion of more competitive options. My colleagues and 

I agreed on a plan with smaller license blocks, and geographic licensed areas. We also agreed on the need for interoperability between the AWS–1 and AWS–3 bands. Such rules encourage participation by smaller carriers, promote competition in local markets, 

and ensure the auction allocates spectrum to the highest and best 

use. 

Most experts predicted intense bidding in this auction, but no 

one forecasted that the total gross amount of winning bids would 

be a record setting $44.89 billion. The success of this auction was 

due in large part to a painstaking effort to pair the AWS–3 spectrum bands that involve the broadcast and wireless industries, 

Federal agencies, and members of this Committee, and for that I 

thank you. We should follow a similar collaborative approach in the 

voluntary incentive auction. 

Robust participation by small and large wireless carriers in the 

forward auction will encourage broadcast television stations to take 

part in the reverse auction. A unanimously adopted notice of proposed rulemaking seeks to strike a proper balance between licensed 

and unlicensed services. We also initiated a proceeding to reform 

our competitive bidding rules in advance of the incentive auction. 

We proposed comprehensive reforms so small businesses can compete more effectively in auctions, and sought comment on how to 

deter unjust enrichment. 

An example of how the markets do not always work, and a regulatory backstop is sometimes necessary, is inmate calling services. 

While a petition requested relief from egregious inmate calling 

rates remained pending at the FCC for nearly a decade, rates and 

fees continue to increase. Calls made by deaf and hard of hearing 

inmates have topped $2.26 per minute. Add to that an endless 

array of fees. $3.95 to initiate a call, a fee to set up an account, 

another fee to close an account. There is even a fee charged to 

users to get a refund from their own money. These fees are imposing devastating societal impacts that should concern us all. There 

are 2.7 million children with at least one parent incarcerated, and 

they are the ones most likely to do poorly in school, and suffer severe economic and personal hardships, all exacerbated by an unreasonable rate regime. 

45 

Studies consistently show that meaningful contact beyond prison 

walls can make a real difference in maintaining community ties, 

promoting rehabilitation, successful reintegration back into society, 

and reducing recidivism. Ultimately, the downstream costs of these 

inequalities are borne by us all. 

We have had caps on interstate inmate calling rates since February of last year, and despite dire predictions of losing phone service and lapses in security, we have witnessed nothing of the sort. 

What we have seen is increased call volumes, ranging from 70 percent to as high as 300 percent, and letters expressing how this relief has impacted lives. 

I look forward to working with the chairman and my colleagues 

to finally bring this issue over the finish line, my sports reference, 

the best I am going to do this morning, by reforming all rates, 

while taking into account robust security protections. 

Mr. Chairman, and Ranking Member, and others of the committee, I appreciate the opportunity to appear before you today, 

and I look forward to any questions you may have. 

[The prepared statement of Mr. Clyburn follows:] 

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Mr. WALDEN. I think you have a winner there. OK, we are going 

to go now to Commissioner Jessica Rosenworcel. We are delighted 

to have you back before the subcommittee. Look forward to your 

comments as well, Commissioner. Thank you for being here. 

STATEMENT OF JESSICA ROSENWORCEL 

Ms. ROSENWORCEL. Good morning, Chairman Walden. 

Mr. WALDEN. I don’t think that microphone stayed on. 

Ms. ROSENWORCEL. Have I got it now? 

Mr. WALDEN. There you go. 

Ms. ROSENWORCEL. OK. Good morning Chairman Walden, Ranking Member Eshoo, and distinguished members of the Committee. 

Today communications technologies account for 1⁄6 of the economy, and they are changing at a breathtaking pace. How fast? 

Well, consider this. It took the telephone 75 years before it reached 

50 million users. To reach the same number of users, it took television 13 years, and the Internet 4 years. More recently, to reach 

the same number of users it took Angry Birds 35 days. 

So we know the future is coming at us faster than ever before. 

We also know the future involves the Internet, and our Internet 

economy is the envy of the world. It was built on a foundation of 

openness. That is why Open Internet policies matter, and that is 

why I support network neutrality. 

As you have undoubtedly heard, four million Americans wrote 

the FCC to make known their ideas, thoughts, and deeply held 

opinions about Internet openness. They lit up our phone lines, 

clogged our e-mail inboxes, and jammed our online comment system. That might be messy, but whatever our disagreements on network neutrality, I hope we can agree that is democracy in action 

and something we can all support. 

Now, with an eye to the future, I want to talk about two other 

things today, the need for more wi-fi and the need to bridge the 

Homework Gap. 

First, wi-fi. Few of us go anywhere today without mobile devices 

in our palms, pockets, or purses. That is because every day, in 

countless ways, our lives are dependent on wireless connectivity. 

While the demand for our airwaves grows, the bulk of our policy 

conversations are about increasing the supply of licensed airwaves 

available for auction. This is good, but we also need to give unlicensed services and wi-fi its proper due. After all, wi-fi is how we 

get online in public and at home. 

Wi-fi is also how our wireless carriers manage their networks. In 

fact, today nearly one-half of all wireless data connections are at 

some point offloaded onto unlicensed spectrum. 

Wi-fi is also how we foster innovation. That is because the low 

barriers to entry for unlicensed airwaves make them perfect 

sandboxes for experimentation. 

And wi-fi is a boon to the economy. The economic impact of unlicensed activity has been estimated at more than $140 billion annually. By any measure, that is big. 

So we need to make unlicensed services like wi-fi a priority in 

our spectrum policy, and at the FCC, we are doing just that with 

our upcoming work in the 3.5 gigahertz band, and in guard bands 

in the 600 megahertz band. But it is going to take more than this 

55 

to keep up with demand. That is why I think the time is right to 

explore greater unlicensed use in the upper portion of the five 

gigahertz band. And I think, going forward, we are going to have 

to be on guard to find more places for wi-fi to flourish. 

Now, second, I want to talk about another issue that matters for 

the future, and that is the Homework Gap. Today, roughly 7 in 10 

teachers assign homework that requires broadband access, but 

FCC data suggests that as many as one in three households today 

lack access to broadband at any speed. 

Think about those numbers. Where they overlap is what I call 

the Homework Gap. And if you are a student in a household without broadband, just getting homework done is hard. Applying for 

a scholarship is challenging. And while some students may have 

access to a smartphone, let me submit to you that a phone is just 

not how you want to research and type a paper, apply for jobs, or 

further your education. 

This is a loss to our collective human capital, and to all of us, 

because it involves a shared economic future that we need to address. 

That is why the homework gap is the cruelest part of our new 

digital divide. But it is within our power to bridge it. More wi-fi 

can help, as will our recent efforts to upgrade wi-fi connectivity— 

through the e-rate program, but more work remains. I think the 

FCC needs to take a hard look at modernizing its program to support connectivity in low-income households, especially those with 

school-age children. And I think the sooner we act, the sooner we 

bridge this gap, and give more students a fair shot at 21st century 

success. Thank you. 

[The prepared statement of Ms. Rosenworcel follows:] 

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Mr. WALDEN. Thank you, Commissioner. We appreciate your testimony. Those bells that went off, or buzzer, as we so lovingly 

say—we have got two votes, but we should have time to get 

through both the other Commissioners’ testimony, and then we will 

probably break to go vote, and then we will come back immediately 

after votes to resume questioning. 

So welcome, Commissioner Pai. Thank you for being here. Please 

go ahead with your testimony. 

STATEMENT OF AJIT PAI 

Mr. PAI. Chairman Walden, Ranking Member Eshoo, members of 

the subcommittee, thank you for giving me the opportunity to testify here today. It has been an honor to work with the members 

of the Subcommittee on a wide variety of issues, from making 

available more spectrum for mobile broadband to improving the 

Nation’s 911 system. 

I last testified in front of the subcommittee more than a year 

ago, and since that hearing on December 12, 2013, things have 

changed dramatically at the FCC. I wish I could say that these 

changes, on balance, have been for the better, but unfortunately, 

that has not been the case. The foremost example, of course, is the 

FCC’s decision last month to apply Title II to the Internet. 

The Internet is not broken. The FCC didn’t need to fix it. But 

our party line vote overturned a 20-year bipartisan consensus in 

favor of a free and Open Internet. With the Title II decision, the 

FCC voted to give itself the power to micromanage virtually every 

aspect of how the Internet works. The FCC’s decision will hurt consumers by increasing their broadband bills and reducing competition. A Title II order was not the result of a transparent rulemaking process. The FCC has already lost in court twice, and its 

latest order has glaring legal flaws that are guaranteed to mire the 

agency in litigation for a long time. 

Turning to the designated entity program, the FCC must take 

immediate action to end its abuse. What was once a well-intentioned program designed to help small businesses has become a 

playpen for corporate giants. The recent AWS-3 auction is a shocking case in point. DISH, which has annual revenues of $14 billion, 

and a market cap of over $34 billion, holds an 85 percent equity 

stake in two companies that are now claiming $3.3 billion in taxpayer subsidies. That makes a mockery of the small business program. The $3.3 billion at stake is real money. It could be used to 

underwrite over 580,000 Pell grants, fund school lunches for over 

six million schoolchildren, or incentivize the hiring of over 138,000 

veterans for a decade. 

The abuse had an enormous impact on small and disadvantaged 

businesses, from Nebraska to Vermont. It denied them spectrum licenses they would have used to provide consumers with competitive wireless alternative. The FCC should quickly adopt a further 

notice of proposed rulemaking so that we can close these loopholes 

in our rules before our next auction. 

Turning next to process, the FCC is at its best when it acts in 

a bipartisan collaborative manner. During my service under Chairman Genachowski and Chairwoman Clyburn, 89 percent of votes 

on FCC meeting items, where the agency votes on the most high 

61 

profile, significant matters affecting the country, were unanimous. 

Since November 2013, however, only 50 percent of votes at FCC 

meetings have been unanimous. This level of discord is unprecedented. Indeed, there have been 40 percent more party-line votes 

at the FCC in the last 17 months than there were under the entire 

chairmanships of Chairmen Martin, Copps, Genachowski, and Clyburn combined. 

I am also concerned that the Commission’s longstanding procedures and norms are being abused in order to freeze out Commissioners. For example, it has been customary at the FCC for Bureaus planning to issue significant orders on delegated authority to 

provide those items to Commissioners 48 hours prior to their 

scheduled release. Back then, if a Commissioner asked for the 

order to be brought up for a Commission-level vote, that request 

from a single Commissioner would be honored. Recently, however, 

the leadership has refused to let the Commission vote on items 

where two Commissioners have made such a request. Given this 

trend, as well as others, I commend the subcommittee for focusing 

on the issue of FCC process reform, and I welcome the Chairman’s 

announcement this morning. 

Finally, I would like to conclude by discussing an issue where it 

should be easy to reach consensus. When you dial 911, you should 

be able to reach emergency personnel wherever you are. But, unfortunately, many properties that use multi-line telephone systems require callers to press nine, or some other access code, before dialing 

911, and this problem has led to tragedy. 

Unfortunately, the phone systems at many Federal buildings are 

not configured to allow direct 911 dialing. Recognizing this problem, Congress directed the General Service Administration to issue 

a report on the 911 capabilities of telephone systems in all Federal 

buildings by November 18 of 2012. I recently wrote to GSA to inquire about the status of that report, and I was disturbed to learn 

through a press report just a couple of days ago that the GSA 

never completed it. 

The FCC’s headquarters is one such Federal building where direct 911 dialing does not work. But as Ranking Member Eshoo recently observed, when it comes to emergency calling, the FCC 

should be the example not only for the rest of the Federal government, but for the entire country. I commend her and Congressman 

Shimkus for their leadership on this issue. 

Chairman Walden, Ranking Member Eshoo, and members of the 

subcommittee, thank you once again for inviting me to testify. I 

look forward to your questions, and to working with you and your 

staffs in the days to come. 

[The prepared statement of Mr. Pai follows:] 

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Mr. WALDEN. Thank you, Mr. Pai. 

We now turn to the fifth Commissioner, or fourth Commissioner 

and the Chairman, Commissioner O’Rielly. We are delighted to 

have you here. Please go ahead with your full testimony. 

STATEMENT OF MICHAEL O’RIELLY 

Mr. O’RIELLY. Thank you Mr. Chairman, Ranking Member 

Eshoo, Ranking Member Pallone, and members of the subcommittee for the opportunity to deliver testimony today. I have always held the Energy and Commerce Committee in the highest regard, given my past involvement as a congressional staffer, with 

oversight hearings and responsibilities that you have to face every 

day. I applaud the subcommittee for focusing on this issue of reauthorizing the FCC and improving its process, and I recommit myself to being available of any resource I can in the future. 

In my time at the Commission, I have enjoyed the many intellectual and policy challenges presented by the innovative and ever 

challenging communications sector. It is my goal to maintain 

friendships, even when we disagree, and seek out opportunities 

where we can work together. To provide a brief snapshot, I voted 

with the Chairman on approximately 90 percent of all items. Unfortunately, this percentage drops significantly, to approximately 

62 percent, for the higher profile open meeting items. 

One of the policies I have not been able to support is the insertion of the Commission into every aspect of the Internet. As you 

may have heard, the Commission pursued an ends justifies the 

means approach to subject broadband providers to a new Title II 

regime without a shred of evidence that it is even necessary, solely 

to check the boxes on a partisan agenda. Even worse, the order 

punts authority to FCC staff to review current and future Internet 

practices under vague standards such as just and reasonable, unreasonable interference or disadvantage, and reasonable network 

management. This is a recipe for uncertainty for our nation’s 

broadband providers, and ultimately edge—providers. 

Nonetheless, I continue to suggest creative ideas to modernize 

the regulatory environment to reflect the current marketplace, 

often through my public blog. I have written extensively on the 

need to reform numerous outdated and inappropriate Commission 

procedures. For instance, I have advocated that any document to 

be considered at an open meeting should be made publicly available on the Commission’s Web site at the same time it is circulated 

to the Commissioners, typically 3 weeks in advance. This fix is not 

tied to a net neutrality item, although it provides a great example 

why change is needed. 

Under the current process, I meet with numerous outside parties 

prior to an open meeting, but I am precluded from telling them, for 

example, having read the document, that their concerns are misguided, or already addressed. This could be a huge waste of time 

and effort for everyone involved, and allows some favored parties 

an unfair advantage in the hunt for scarce and highly prized information nuggets. The stated objections to this approach, presented 

under the cloak of procedural law, are really grounded in resistance 

to change, and concerns about resource management. In addition, 

76 

the Commission has a questionable post-adoption process that deserves significant attention. 

While I generally refrain from commenting on legislation, I appreciate the ideas approved by this subcommittee, and ultimately 

the full House last Congress, which would address a number of 

Commission practices that keep the public out of the critical end 

stages of the deliberative process. I believe that these proposed 

changes, as well as others, would improve the functionality of the 

Commission, and improve consumer access to information. 

In addition, I would turn the subcommittee’s attention to a host 

of other Commission practices that I believe deserve attention. The 

48-hour notification that my friend mentioned, testimony provided 

by outside witnesses at the Commission open meetings, delegating 

vast authority to staff to make critical decisions or set policy, the 

Regulatory Flexibility Act and Paperwork Reduction Act compliance, and accounting for the Enforcement Bureau’s assessed penalties. 

Separately, I have also been outspoken on many substantive 

issues, such as the need to free up spectrum resources for wireless 

broadband, both licensed and unlicensed. I look forward to working 

with my colleagues on this issue, and so many more in the months 

ahead. I stand ready to answer any questions you may have. 

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

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

input as well. 

Mr. O’RIELLY. Thank you. 

Mr. WALDEN. We will recess now so that Members can go to the 

House floor and vote. Please return as promptly as possible, as we 

will begin our questioning thereafter. We stand in recess. We have 

two quick votes. 

[Recess.] 

Mr. WALDEN. Public and Commissioners to please resume their 

places. We will get restarted here in the hearing in just a second, 

when everybody gets settled. 

All right. Thank you very much, and we will resume the Subcommittee on Communications and Technology. We are now into 

the questioning phase from the members of the committee. And, 

again, we want to thank all of you for your testimony today, and 

the work that you do with all of us every day, so we do appreciate 

that. 

You know, throughout the debate on the Internet proceeding, I 

was amused—there were some comparisons to what former Chairman Kevin Martin did or didn’t do with respect to his media ownership proceeding. Yes, he wrote a late in the day op-ed, put out 

a public notice, testified before Congress, but he didn’t do a further 

notice of proposed rulemaking, and that seems to be precisely why 

the Third Circuit threw his newspaper/broadcast cross-ownership 

rule out. I guess Federal Appellate Judges don’t think much of opeds, news releases, or even congressional testimony when it comes 

to satisfying APA notice and comment requirements. They actually 

think the agency should go through the procedural steps to make 

sure that all interested parties, even those outside D.C. policy circles, get a real opportunity to understand a significant shift in direction, and have a reasonable amount of time to comment. 

So I have got just a couple of questions, and perhaps I will just 

direct them to Mr. Pai. How many of the Commission’s tentative 

conclusions found in the NPRM were reversed in the final order? 

Mr. PAI. Mr. Chairman, virtually all of them. 

Mr. WALDEN. What number paragraph in the NPRM says that 

the Commission planned to assert its authority over IP addressing? 

Was that in the NPRM? 

Mr. PAI. It was not, sir. 

Mr. WALDEN. And what number paragraph of the NPRM put the 

public on notice that the Commission intended to redefine the term 

public switched network? 

Mr. PAI. There is no such paragraph. 

Mr. WALDEN. That is what I was concerned about. I didn’t see 

that either. There are a number of issues that are pending at the 

Commission, and I know Chairman has had a lot on his plate. You 

all have, I get that. It is a rapidly changing environment, and you 

have limited resources and all. Some of you have heard me talk 

about our little applications for FM translators when I was in the 

radio business, 10 years waiting, 30 days to satisfy the requirements and all. And we get a lot of input here from constituencies 

out across the country. Just because of limited time, has the Commission acted on the AM modernization order yet? 

80 

Mr. PAI. Mr. Chairman, it has not yet, and the NPRM, as you 

know, was adopted about a year and a half ago. The record is complete, unanimous support from the public. 

Mr. WALDEN. There is another issue that came up, I was speaking at a group, and it involves this issue to allow small cable operators to operate as a buying group for the purchase of content. Has 

that been acted on yet? That has been pending for some time, I am 

told. 

Mr. PAI. It has not. I voted on the NPRM about—I want to say 

3 years ago, but—— 

Mr. WALDEN. Three years ago? 

Mr. PAI. If I recall, it was the summer of 2012, and I am not sure 

what the status of it is. But I stand ready to vote whenever it is 

teed up for a vote. 

Mr. WALDEN. And my understanding is the Commission has not 

yet issued its quadrennial review of media ownership rules for 

2010. I believe that is about 5 years ago, is that correct? 

Mr. PAI. Five years ago, but December of 2007 was the last time 

the actual rules were adopted. 

Mr. WALDEN. So it has been 8 years since—— 

Mr. PAI. Correct. 

Mr. WALDEN. And isn’t that a statutory obligation? 

Mr. PAI. It is, and that is why I said we need to put the quad 

back in quadrennial. 

Mr. WALDEN. And what about the work on the Connect America 

Fund? Has the Commission finished its work on how Connect 

America will work in supporting mobile? 

Mr. PAI. My understanding is not yet, but that work is underway. 

Mr. WALDEN. These are some of the things that trouble us, to say 

the least. We also had an issue come to our attention involving the 

Western Amateur Radio Friendship Association interference case, 

and maybe, Chairman, I could direct this to you. I understand it 

has been going on for quite a while, and it is quite disturbing. I 

have been told about some of the audio recordings, allegedly that 

there is this jamming that is included. Really awful, repulsive racial epithets, and threats against a female member. And it has 

come to our attention this has been sitting there for a while, where 

these operators are jamming and using really awful, awful language. Do you know the status of that? Can you give us some update on that? Anybody on the——Commission. 

Mr. WHEELER. I can give you an update on that, Mr. Chairman. 

I will—— 

Mr. WALDEN. If you could get back to us? Yes, I think it is called 

the Western Amateur Radio Friendship Association interference 

case. I guess there are a couple of these involving pirate radio operators. Which leads into a discussion, and I am going to run out of 

time here, about the closing of the regional office. 

When we had the CFO, I guess would be close, managing director here, we weren’t really brought up to speed, or advance noticed 

at least, of this notion that you are going to close these regional 

offices. Isn’t that where this enforcement activity generally takes 

place? 

Mr. PAI. Mr. Chairman—— 

81 

Mr. WALDEN. That is fine, whoever. Commissioner Pai? 

Mr. PAI. Yes. Indeed, I think the field offices of the Enforcement 

Bureau perform one of the core functions, which is to protect the 

public interest by, among other things, resolving interference concerns, and protecting public safety. And while, obviously, I am still 

studying the issue, I have had a chance to meet with our union 

representatives. And I know members of this Committee, such as 

Congresswoman Clarke, have recently expressed concern about the 

field offices’ function. 

Mr. WALDEN. Yes. 

Mr. PAI. We want to make sure that, however it is reorganized, 

we protect the public interest. 

Mr. WALDEN. And I will quit here in a second, but we clearly 

don’t have—it would leave only two offices, one in L.A. and San 

Francisco, nothing for the west coast, which I am hearing from various entities. And I was pleased—— 

Mr. WHEELER. Can I at least—— 

Mr. WALDEN. Sure. 

Mr. WHEELER [continuing]. So there are multiple things going on 

there. First of all, we need to make sure that, in flat budgets or 

reduced budgets, that we are spending our money efficiently. When 

you have more trucks than you have agents, which is the reality 

that exists today—— 

Mr. WALDEN. I would sell some trucks. 

Mr. WHEELER [continuing]. You have got to ask yourself the 

question, are you distributing resources as they ought to be distributed? When you have got one manager for every four people, you 

say to yourself, is this the right kind of structure? 

Mr. WALDEN. I fully agree, and I understand—— 

Mr. WHEELER. Then how do you fix that? 

Mr. WALDEN. So what we would like to have is the backup for 

this, because I understand that wasn’t what—— 

Mr. WHEELER. Happy to. 

Mr. WALDEN [continuing]. And I think we have a request pending for that, and we are told—— 

Mr. WHEELER. Yes. 

Mr. WALDEN [continuing]. Well, I don’t know whether we were 

told we can’t get it or whatever, but we would like to see—— 

Mr. WHEELER. No, if my understanding is correct, you asked for 

the consultant’s report. The final consultant’s report is—and—— 

Mr. WALDEN. Yes. 

Mr. WHEELER [continuing]. You will have it when I have it. I 

have seen a draft of the—— 

Mr. WALDEN. OK. 

Mr. WHEELER [continuing]. Structures, but have also—— 

Mr. WALDEN. All right. 

Mr. WHEELER [continuing]. Sent it back for some more detailed 

information. 

Mr. WALDEN. All right. 

Mr. WHEELER. You will have that. 

Mr. WALDEN. Thank you. 

Mr. WHEELER. You will—— 

Mr. WALDEN. I have far exceeded my time. I appreciate the indulgence, Committee. I recognize the gentlelady from California. 

82 

Ms. ESHOO. It is OK, because I will ask you for the same. Thank 

you, Mr. Chairman. Welcome again to the entire Commission. It is 

obvious that we have different takes on the issues, but I sincerely 

thank you for your public service. And, to Commissioner O’Rielly, 

this is a graduate of this committee. You were here under Chairman Bliley, whom I had the pleasure of working with, and getting 

a lot of things done together, so welcome back. 

Commissioner Pai, thank you for your advocacy on the 911 

issues. You know that the mother and father, the mommy and 

daddy of this are right here at the committee. Congressman 

Shimkus and myself founded that caucus, and then helped—— 

Mr. PAI. This—— 

Ms. ESHOO. Well, we did. What is so funny about that? I think 

it is terrific. And it was when no one was paying attention to those 

issues, but it was before our country was attacked. Commissioner 

Rosenworcel, thank you for your clarity, and your passion when 

you speak. And Commissioner Clyburn, go get them. Just go get 

them. And to the distinguished Chairman, I don’t know how many 

people realize this about the Chairman, but he is a man of history, 

and so I want to pick on the vein of history. Because I think it is 

very important for us—around here, life is incremental. It is incremental anyway. God gives us life a day at a time, so those are increments. But I think what I would like to do is to have you, and 

I want to say a few things about it first, to widen the lens of what 

is before us today, in terms of history. 

Now, the majority has defined, or tries to define, net neutrality 

with some very scary things. They call it railroad regulation, billions of dollars in taxes, new taxes are going to be levied, no investment is going to be made, the market is going to be chilled. In 

terms of history, we have been through the Stone Age, the Bronze 

Age, the Iron Age, the Age of Invention, the Industrial Revolution, 

the Technology Age, and now the Information Age. 

And I think why this is difficult for some to actually see—and 

when you see something, you either get it or you miss it. We are 

at a moment in our nation’s history where we are moving to a new 

age. And I would say that those that are on the other side of this 

issue are back in an older age, where you have huge corporations, 

gatekeepers, duopolies. That is not what the Internet is all about. 

So what I would like you to—as a historian, to address what this 

moment is, and place it on the stage of history. 

Mr. WHEELER. Thank you, Ms. Eshoo. You get me started on history, and this—we—— 

Ms. ESHOO. Well, we don’t have very much time. 

Mr. WHEELER. We could—— 

Ms. ESHOO. I have got a minute and 40 seconds left. Yes. 

Mr. WHEELER. I think that we are living through the fourth 

great network revolution in history. 

Ms. ESHOO. Yes. 

Mr. WHEELER. And if you look at those, what you will find is that 

every single time it was the end of Western civilization—— 

Ms. ESHOO. Yes. 

Mr. WHEELER [continuing]. As we know it that—— 

Ms. ESHOO. Yes. 

83 

Mr. WHEELER [continuing]. Was being—people who didn’t want 

to embrace the change was like, this is awful. I have hanging in 

my office a poster from 1839 that was put out by people who were 

against the interconnection of railroads. It was all patterned 

around, women and children are going to be hurt by this. It was 

paid for by all the people whose businesses would be affected because the railroads would interconnect. Yet that interconnection 

drove the 19th and 20th century. 

We always hear these imaginary horribles about the awful things 

that are going to result, and we also always end up saying, as a 

society, we need rules. We need to have a known set of rules. We 

need to have a referee on the field who can throw the flag. That 

is the process that we have gone through since time immemorial, 

every time there is a new network revolution. We have the privilege of living through that, and trying to deal with those realities 

today. 

Ms. ESHOO. Well, I think that that is magnificent in a short period of time. I wish I could question—I have questions for all of 

you. I am going to submit them to you. And, with that, Mr. Chairman, I would like to ask unanimous consent that Congressman 

Cardenas’s questions be submitted for the record. He is a guest of 

our subcommittee today—— 

Mr. LATTA [presiding]. Without objection. 

Ms. ESHOO [continuing]. And demonstrates his great interest in 

the issues at hand. And another from many, many—I don’t know, 

maybe 50 racial justice and civil rights organizations who have addressed a letter to the Chairman and myself in support of net neutrality. 

Mr. LATTA. Without objection. 

[The information appears at the conclusion of the hearing.] 

Ms. ESHOO. Thank you, Mr. Chairman. 

Mr. LATTA. The lady yields back. The next questioner will be the 

gentlelady from Tennessee, Ms. Blackburn, for 5 minutes. 

Mrs. BLACKBURN. Thank you, Mr. Chairman, I appreciate that. 

Chairman Wheeler, I will just add my viewpoint of, when you look 

at our economic revolutions in society, whether it was the Agricultural or the Industrial, the Technology, the Information, successful 

revolutions are about freeing up, not restricting. And what we are 

looking at right now is the vantage point from—that you all are 

coming from is taking away and restricting, not freeing up. 

Chairman—Mr. O’Rielly—Commissioner O’Rielly, let me come to 

you for a moment and talk taxes. You and I penned an op-ed back 

in July, calling for the need for a cost benefit analysis, and really 

looking at what had been said by PPI, Free Pressed, Professor 

Farber, and what they thought would happen with taxes. New 

York Times agreed with that. I want to hear from you a little bit, 

30 seconds’ worth, about why we should have had a cost benefit 

analysis, and what you think the outlook is. 

Mr. O’RIELLY. So I believe that we should do better at the FCC 

on cost benefit analysis, and this is a perfect case. I think the—— 

Mrs. BLACKBURN. None was done. 

Mr. O’RIELLY. This is a woeful job that was done in this instance. 

We are talking about hypothetical harms and real world impacts 

on business. 

84 

Mrs. BLACKBURN. Yes. 

Mr. O’RIELLY. But in terms of your question on taxes, I would 

say—I would switch it more to taxes and fees, because the question 

has been on universal fees, and what happens in universal service 

going forward? The Chairman has been very clear that the item in 

and of itself before us does not impose universal service. That is 

something we are going to punt for about a month or two, and we 

are waiting for the joint board—— 

Mrs. BLACKBURN. OK. 

Mr. O’RIELLY [continuing]. This is something that has to go forward. We are going to see those fees in the months ahead. 

Mrs. BLACKBURN. OK. Commissioner Pai, you gave an interview 

this week and stated that there was going to be a tax on 

broadband, and the Commission is waiting for a joint board to decide April 7 how large that tax is going to be. You want to expand 

on that? 

Mr. PAI. Thank you for the question, Congresswoman. The order 

suggests that the joint board is going to make a recommendation 

on April 7. The order also says that a ‘‘short extension’’ might be 

appropriate. So at some point very soon the joint board is going to 

recommend whether and how to increase these fees that are—— 

Mrs. BLACKBURN. OK. 

Mr. PAI [continuing]. Going to be assessed on broadband for the 

first time. In addition, it is not just the USF fees, as Commissioner 

O’Rielly has pointed out. It is also state and local fees. For example, state property taxes. Localities also impose taxes. The District 

of Columbia imposes an 11 percent tax on gross receipts. These are 

all fees that are going to have to be paid by someone. It is going 

to be paid by the consumer at the—— 

Mrs. BLACKBURN. OK. Chairman Wheeler, rate regulation. I read 

something from Professor Lyons at Boston College, and he said 

Title II is fundamentally a regime for rate regulation. And then we 

are looking at another thing which he said about a person, which 

might include a large company, can file a complaint with the FCC 

under Section 208 if they don’t think their charges are just and 

reasonable. 

So you have denied that the FCC is going to get into rate regulation through this net neutrality order, but—I understand that the 

order does not explicitly state that the FCC will be regulating rates 

on the date the rules are effective, but what about the first time 

that a complaint is filed with the FCC under Section 208 because 

a party feels that their rates are not just and reasonable? What is 

the remedy going to be, and isn’t it true that the FCC will be engaged thereby in de fact rate regulation? 

Mr. WHEELER. Thank you, Congresswoman. I hope somebody 

files that kind of a complaint. As you know, there hasn’t been a 

complaint filed for 22 years in the wireless voice space, despite the 

fact that this same kind of authority exists. If somebody files that 

kind of a complaint, and I don’t want to prejudice a decision, but 

I will assure you that there will be a process that will look at that, 

and will develop, I would hope, a record that would make it very 

clear that the FCC is not in the consumer rate regulation business. 

Mrs. BLACKBURN. Mr. Chairman, don’t you think what you just 

said about there hasn’t been a complaint filed in that space for 22 

85 

years proves the point that the Internet is not broken, this space 

is not broken, and it does not need your oversight and guidance? 

Mr. WHEELER. No, I was referring to wireless voice, not to 

broadband. I think the key thing is, you said in your—— 

Mrs. BLACKBURN. OK, let me cut you off there. I have got one 

question for Commissioner Clyburn. And I want to go to the Lifeline and USAC Program—— 

Ms. CLYBURN. Yes. 

Mrs. BLACKBURN [continuing]. With you. You have advocated restructuring and rebooting that program, and you have had several 

supply-side reforms, and did eliminate incentives for waste, fraud, 

and abuse. And the FCC’s Inspector General, as you know, has performed a review of the verification process on this, and recommended that the FCC may improve the effectiveness of the 

warnings that it gives subscribers, and reduce the level of fraud in 

that program. We have had hearings on this, and I want to work 

with you on it. 

Ms. CLYBURN. Thank you. 

Mrs. BLACKBURN. And is it true that, under the current system, 

the penalty for a subscriber defrauding the program by having 

multiple phones is to lose the subsidy for those phones, all but one? 

They get to keep one, and then the carrier is prosecuted. And I will 

tell you why your answer is important. You all are talking about 

getting into broadband, and in addition to the phones, and you 

have got to reform all of this before you talk about expanding. 

Ms. CLYBURN. I totally agree. And one of the reasons why I set 

out five points for reform is because I recognize two things. One, 

we need to eliminate all incentives, and all existing waste, fraud, 

and those abuses. We need to do that, and the key way to do that 

is to get those providers out of the certification business. They will 

no longer greenlight customers—— 

Mrs. BLACKBURN. We need to prosecute the user—— 

Ms. CLYBURN. And—— 

Mrs. BLACKBURN [continuing]. Not the—— 

Ms. CLYBURN. And we have—— 

Mrs. BLACKBURN [continuing]. You know, not the—— 

Ms. CLYBURN. With guidance from my colleagues, and while I 

was acting Chair—— 

Mrs. BLACKBURN. I yield back. My time is expired. 

Ms. CLYBURN. I am sorry. 

Mrs. BLACKBURN. Thank you, Mr. Chair. 

Mr. LATTA. Thank you. The gentlelady yields back. The Chair 

now recognizes the gentleman from New Jersey, the Ranking Member, for 5 minutes. 

Mr. PALLONE. Thank you, Mr. Chairman. I just want the Commissioners to know, my district was ravaged by Hurricane Sandy 

in 2012, and one of the most concerning impacts of the storm was 

the loss of communications services. A lot of people couldn’t call 

their friends, their family, and 40 percent of our cell towers were 

knocked out in the state. A lot of people there basically learned the 

hard way that when the power lines go down, communications 

services go down along with electricity. 

So I wanted to ask Commissioner Rosenworcel, I know that you 

toured New Jersey after Sandy, and I ask what lessons did you 

86 

learn about how to prevent these kinds of communication failures 

during future emergencies? 

Ms. ROSENWORCEL. Thank you for the question. I did tour the 

New Jersey shore with public safety officials following Hurricane 

Sandy, and I won’t long forget what I saw. A lot of broken homes 

and businesses, and cars and boulders strewn this way and that, 

and piles of sand many blocks from where the ocean is because 

wind and water had delivered it there. 

But I also saw a lot of people who were very committed to rebuilding, and I learned a lot about how communications succeeded 

and failed during that storm. What stuck with me was that many 

of the wireless towers in the affected areas went out. Now, 

throughout the 10 states that were impacted by the storm, about 

a quarter of the wireless cell towers went out of service. In New 

Jersey, as you mentioned, it was about 40 percent. But I would bet 

the number was significantly higher on the New Jersey shore. 

And in the aftermath of learning those things, we were able, at 

the agency, to start a rulemaking to ask, how can we fix this going 

forward? Because we know that 40 percent of all households in this 

country are wireless only, and in the middle of a storm, at the very 

least, they should be able to connect and get the help they need. 

So we issued a rulemaking in 2013, and among the issues discussed in that was the question of how much backup power is necessary at cell sites, and how much of a reporting duty our wireless 

carriers should have when these sites go out of service. I hope that 

we can turn around and deliver a decision on that in short order 

because we don’t know when the next storm is going to hit. But I 

am pretty sure people are going to try to use communications when 

it does. 

Mr. PALLONE. Well, thank you. Let me ask Chairman Wheeler, 

I understand the FCC, as was mentioned, is considering updates 

to its rules to ensure that consumers have access to essential communications during disasters. Can you commit to updating those 

rules this year? 

Mr. WHEELER. Absolutely. The issue that Commissioner 

Rosenworcel raised is a paramount issue. There are broader issues 

too, and that is the whole issue of copper retirement, which got 

forced by Sandy, and how do we make sure that, when the power 

goes down, and you are relying on fiber, which doesn’t carry its 

own power, that you have got the ability to make a 911 call? 

We have a rulemaking going on that literally just closed last 

week. All of these issues interrelate, but first and foremost in our 

responsibility, which was why I focused on the 911 location issue 

in my statement, is public safety. 

Mr. PALLONE. I wanted to ask you about the designated entity 

rules, Mr. Chairman. Obviously small businesses are so important 

in my state and elsewhere, and I just don’t think small businesses 

can survive in capital intensive industries, like telecommunications, without some smart public policy. I am concerned that the 

current rules for small businesses still contain Bush era loopholes 

that allow large corporations to game the system, and so I actually 

introduced today the Small Business Access to Spectrum Act to update the FCC’s rules, and give small businesses a fair shot at accessing the nation’s airwaves. 

87 

Well, there is not much time left, but I will start with Chairman 

Wheeler, if the others want to chime in. Would you commit to 

working to maintain a robust designated entity program focused on 

genuine small businesses? 

Mr. WHEELER. You wrote us and asked us that. I replied yes, we 

will, and yes, we are. We have had a rulemaking going on, and we 

will issue shortly a public notice, making sure that the discussion 

is broadened out, and the record is built on the question of the recent AWS–3 auction, and some of the very legitimate concerns that 

have been raised about that. 

The thing that is frustrating to me, Congressman—you say yes, 

these were Bush era rules, they haven’t been reviewed since then, 

and it is time to review them. What is really upsetting is the way 

in which slick lawyers come in and take advantage of rules that 

this committee created. I was in the room when this committee created designated entities. And, as you say, the world changes dramatically in how a designated entity can be structured and can 

play in now what is a big market, whereas before it was a much 

smaller market. 

Our rules have not kept up, but the slick lawyers sure have figured out how to do it. And we want to make sure, whether it is 

in this, or whether it is in slick lawyers playing around with broadcast licenses, that there is no way that we keep our rules current. 

And we are going to do that on this issue. The commitment that 

I will ironclad give you, sir, is that we want to make sure that we 

have a new set of DE rules in place before the spectrum auction 

takes place early next year. 

Mr. PALLONE. Thank you. 

Mr. LATTA. Gentleman’s time is expired, and yields back. The 

Chair now recognizes himself for 5 minutes. Again, thanks very 

much to the Commissioners for being here today. 

Commissioner Pai, in January the FCC voted to update the 

broadband benchmark speeds to 25 megabits per second for 

downloads and 3 megabits per second for uploads. The speeds had 

previously been set at 4 megabits per second and 1 megabits per 

second. 

While I understand the need to update the broadband speeds, I 

am kind of curious as to the process the Commission chose the 

speeds of 25 megabits and the three megabits. It seems, to an outside observer, that an arbitrary number was picked, especially considering that recently the Commission voted to spend $10.8 billion 

over the next 6 years through the Connect America Fund to employ 

10 megabits per second broadband. According to the Commission’s 

new benchmark, 10 megabits per second is going to no longer even 

be considered broadband. 

Can you walk us through how the agency came to these new 

benchmarks? And then also if you could follow up—and how does 

it still plan to spend over $10 billion on those 10 megabits per second deployment in light of that new definition? 

Mr. PAI. Thank you for the question, Mr. Chairman. I think the 

problem is that the agency has viewed each of these issues in a 

vacuum, and so, in December, when we were talking about rural 

broadband deployment, we agreed to spend, over the course of a 

decade, billions of dollars to establish what we considered to be 

88 

broadband at the time, which was 10 Megabits per second. Flash 

forward 1 month, all of a sudden we learn that actually isn’t 

broadband. Broadband is 25 megabits per second, under which 

standard there is no such thing as mobile broadband, because even 

the fastest LG—4G LTE connection can’t get you to 25 megabits 

per second. Flash forward 1 month more, all of a sudden we learn 

that there is such a thing as mobile broadband, and it is going to 

be classified as a Title II service. 

And I think the schizophrenia that we have seen over the last 

several months from the Commission as to what is broadband illustrates the basic point. We need intellectual consistency that is 

grounded in the facts. And the facts in this case basically stem 

from the question, what do people use broadband for? And by and 

large, if you look at my statement with respect to the January 

order, I was trying to look at patterns of usage. And obviously 

there are going to be some folks who use the Internet for very high 

bandwidth applications, others who use it for less. 

The goal of the FCC shouldn’t be to artificially pick a number so 

that it can declare that the broadband marketplace is uncompetitive, and thus justify regulation. It should be to try to tailor, with 

some forward thinking, what broadband means in the current era. 

And that is why I think the problem with the 25 megabits per second standard, which I forecast would be jettisoned soon, I didn’t 

know it would be 1 month from then, is that it was more grasping 

for press headlines, as opposed to what actually was in the record. 

Mr. WHEELER. Can I—— 

Mr. LATTA. Let me follow up. I am also concerned that this new 

threshold would reduce the broadband investment in rural areas. 

You know, if you look at my district, and you have seen it, is that 

it could ultimately deter the competitive entry into the broadband 

market. Do you foresee any of these benchmark speeds unfairly impacting consumers and businesses in the rural areas? 

Mr. PAI. That is a great question, Congressman, and coming from 

a rural area myself, that is something that I take very personally. 

The FCC heard from a great number of small providers, and that 

is service providers in rural areas, who told us that Title II, ironically, would take us in the opposite direction of getting more competition. A lot of folks in rural areas, if they have an option, it is 

going to be from one of these smaller providers. 

And so we heard, for instance, from 43 municipal broadband providers, who said that Title II regulation ‘‘will undermine our business model that supports our network, raise our costs, and hinder 

our ability to further deploy broadband.’’ We even heard from 24 

small broadband providers on February 17, who said that Title II 

‘‘will badly strain our limited resources, because we have no inhouse attorneys and no budget line items for counsel. 

And those ISPs, by the way, include very small ISPs, including 

one called Main Street Broadband that serves four customers in 

Cannon Falls. The notion that Main Street Broadband in Cannon 

Falls exerts some kind of anti-competitive monopoly vis-a AE2-vis 

edge providers like Netflix, Google, and Facebook is absurd, but I 

think that is part of the reason why the Obama Administration’s 

Small Business Administration was exactly on point when it urged 

the FCC last year to take a careful look at how these rules would 

89 

affect small businesses, because, ultimately, that is where the digital divide is going to open up. It is for the rural Americans, who 

have a tough enough time getting a broadband option as it is. 

Mr. LATTA. Well, thank you. I would like to ask the question 

now—the Chairman mentioned, in his opening statement, about 

the task force starting the agency process, and I am just curious, 

Commissioner Clyburn, when did you find out about the task force? 

Ms. CLYBURN. When did I find out about the actual task force? 

To the best of my knowledge, last quarter of last year. It issued a 

report in February. There was a very interactive process. They 

asked each office to weigh in, and that is when—subject to check. 

My memory is sometimes challenged, but last quarter of last year, 

with a February—— 

Mr. LATTA. All right. Thank you. 

Ms. CLYBURN. Thank you. 

Mr. LATTA. Commissioner Rosenworcel? Excuse me. 

Ms. ROSENWORCEL. I believe they issued a report sometime last 

year. I would have to go back and check. 

Mr. LATTA. Commissioner Pai? 

Mr. PAI. If you are referring to the task force that the Chairman 

announced this morning, is that the one? 

Mr. LATTA. Right, he asked about—that he spoke about in his 

opening testimony. 

Mr. PAI. Then I learned about it this morning, when he announced it. 

Mr. LATTA. Commissioner O’Rielly? 

Mr. O’RIELLY. Well, I appreciate the kind words from the Chairman on the ideas that I put forward. I just learned about it this 

morning. 

Mr. LATTA. Thank you. My time has expired, and the Chair now 

recognizes Mr. Doyle. 

Mr. DOYLE. Thank you, Mr. Chairman. I want to take a moment 

and recognize, along with my colleague, Ms. Eshoo, the historic 

step forward the Commission has made in its Open Internet Order, 

and the order on municipal broadband. Taken together, these actions by the Commission represent incredible wins for consumers, 

entrepreneurs, and millions of Americans who called on the Commission to take action. Innovators shouldn’t need to ask permission, or pay gatekeepers to deploy new products and services, and 

the FCC’s actions will ensure that this remains true. 

And I want to point out one more thing too. My colleagues on the 

other side of the aisle have been talking about Title II like it is the 

end of the world. Well, up until 2002, the Internet was treated as 

a Title II service. It was a Republican FCC Chairman, and a Republican Commission, that acted to re-classify the Internet as an 

information service. I see this rule as the FCC finally setting 

things straight. 

Chairman Wheeler, last September you testified before the 

House Small Business Committee. You were asked about net neutrality proceedings, and you stated Title II is on the table. Now, my 

Republican colleagues are making the allegation that you only 

started looking at Title II as a result of White House interference 

in November of 2014. Was the FCC considering using its Title II 

90 

authority before President Obama joined millions of Americans in 

calling on the FCC to take that course of action? 

Mr. WHEELER. Yes, sir, and the Small Business Committee that 

you cite there was one member who was saying to me, ‘‘don’t you 

dare do Title II,’’ and I was saying, ‘‘we are seriously considering 

Title II.’’ And there was one member who was saying, ‘‘we want 

you to do Title II,’’ and I said, ‘‘yes, we are considering doing Title 

II.’’ 

Mr. DOYLE. Thank you, Mr. Chairman. Let me ask you another 

question. The Open Internet Order makes great strides to protect 

consumers and innovators, but in particular by including interconnection and protections for consumer privacy through Section 

222 in this order. I want to get your commitment that the Commission will move quickly to complete the rulemaking on Section 222, 

and ensure that the Commission has rules in place to protect consumer privacy online. And I would also like your commitment that 

the Commission will take seriously this new responsibility on interconnection. With all of the recent announcements by over the top 

providers releasing new streaming video services, I think it is more 

important than ever that gatekeepers do not restrict these new 

services access to consumers. 

And also, Mr. Chairman, while I have got you here, I would be 

remiss if I didn’t take the opportunity to mention special access. I 

understand that the data collection component is complete. I would 

encourage you to move forward as quickly as possible to complete 

analysis of that data, and to take action to address any harms taking place. Fixing this situation is a great opportunity to improve 

competition and economic growth across this country. 

Mr. WHEELER. So let me see if I can go through it one, two, 

three. One, on privacy, absolutely, sir, and it starts next month, 

when we are holding the workshop that gets the parties together 

and says, ‘‘OK, let us talk specifically about how Section 222 exists 

in this new reality.’’ 

Secondly, with regard to interconnection, I could not agree more 

with your point about how over the top services are revolutionizing, 

and are going to be the consumers’ savior. I sat before this committee before this and other committees before, and it is a bipartisan belief that something has to be done about cable prices. That 

starts with alternatives. Those alternatives are delivered over the 

top via the Internet. That is why the Internet has to be open, so 

there are competitive alternatives for people. 

Mr. WHEELER. Special access. My hair was not gray when I first 

started asking the Commission about special access. Actually, we 

have just gotten permission and have begun the data collection on 

special access. Special access is an incredibly important issue that 

is particularly essential to those who are bringing competition to 

communications. My goal is that we are going to have this whole 

special access issue on the table and dealt with before the end of 

the year. 

Mr. DOYLE. Thank you, and one last thing. And I—this question, it is on the AWS–3 auction. It raised $45 billion in revenue, meeting all the funding targets, including fully funding First Net and 

next gen 911. Considering this new reality, and the massive appetite for spectrum by wireless carriers, hasn’t the FCC been liberVerDate Nov 24 2008 11:42 Jul 14, 2016 Jkt 037690 PO 00000 Frm 00096 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-24 CHRIS
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ated from these fully funded objections, and its reconsideration of 

its previous decision on the size of the spectrum reserve, and the 

incentive auction? 

Mr. WHEELER. Well, that is one of the issues that we are going 

to be addressing again as we put together the final rules for the 

auction. I understand your point, that we have now lived up to our 

committed obligations, and this is an issue that we will be dealing 

with in the next couple of months. 

Mr. DOYLE. Commissioner Clyburn, Rosenworcel, do you have 

comments on that too, very briefly? 

Ms. CLYBURN. One of the things that I joke about, and this is a 

positive joke, is that all predictions were wrong, that—— 

Ms. ROSENWORCEL. Right. 

Ms. CLYBURN [continuing]. Two and a half, three times the 

amount of money that was predicted was raised. You were right to 

say that we have met our obligations, and we will continue through 

other auctions, including incentive auction, to deliver spectrum to 

the American people. 

Mr. DOYLE. Yes. 

Ms. ROSENWORCEL. I agree with the chairman. We will be looking at this in the next few months. It is important we follow the 

statute, and it is also important that we make sure that everyone 

has opportunities to bid in this upcoming auction, and that no single player walks away with all the spectrum. 

Mr. DOYLE. All right. Mr. Chairman, I appreciate your indulgence, then. I would just like to include in the record this letter 

from the Public Interest Spectrum Coalition in regards to the incentive auction. 

Mr. LATTA. Without objection. 

Mr. DOYLE. Thank you. I yield back. 

Mr. LATTA. The yields back. The gentleman’s time has expired. 

The Chair now recognizes the gentleman from Illinois, Mr. 

Shimkus, for 5 minutes. 

Mr. SHIMKUS. Thank you, Mr. Chairman. Welcome to the Commissioners. It is great to have you here. I want to be careful because history does tell us a lot of things. I was fortunate to be on 

the committee during September 11. Chairman Upton of the subcommittee, at that time, took us to Ground Zero because we had 

the Verizon switching station right across the street. And what I 

learned in walking through that process, it was really only a big 

company that could get Wall Street back online after that catastrophic attack. And it is true. I mean, I have still got pictures of 

it. The basement was flooded. You had wires going up to the third 

floor. You had individuals hand tying the copper lines. So as we 

talk about our great country, and competition, and large entities, 

sometimes large entities are very important in the security of this 

country. 

The—and I want to also—thanks for kind words on 911. It is 

really a team effort. Anna and I have been fortunate to work on 

this, but it is a process that you have got to stay vigilant on, as, 

Chairman Wheeler, you mentioned. First we dealt with 911 over 

cell, then really went to location, then we went to voice over Internet. Now we are back into location, because I am being told by 

92 

some PSAPs that there is really too many right now, and that they 

maybe should centralize those. Any comments, briefly, if you can? 

Mr. WHEELER. One of the interesting things that was in your bill 

that you and Ms. Eshoo had was—you asked states to voluntarily 

have state level coordination of their PSAPs, and by and large, that 

has been observed in the breach. It hasn’t existed. There is no state 

level coordination in Georgia. Introducing mobile means that the 

people on the right and on the left side of the map need to be able 

to talk to each other. They need to have similar standards. 

You ticked off some of the issues in terms of the technologies. 

The other is text to 911, which we have required carriers to do. Out 

of the 6,500 PSAPs in the country, 200 have implemented it. That 

means that America’s deaf and hard of hearing community, which, 

thanks to the unanimous action of this Commission, has text to 911 

capabilities provided by carriers. They can text away, and there is 

nobody who hears it. 

Mr. SHIMKUS. And I guess the other thing that we also didn’t 

talk about was the testing that you did on the elevation—I would 

say the elevation—— 

Mr. WHEELER. Yes, sir. The ability to get the Y coordinate. 

Mr. SHIMKUS [continuing]. Stuff like that, and—very excited 

about that opportunity. Of course, I don’t have much high rises—— 

Mr. WHEELER. The Z coordinate. 

Mr. SHIMKUS [continuing]. In—— 

Mr. WHEELER. Yes. 

Mr. SHIMKUS [continuing]. In my congressional district, but I 

know it is probably important in large metropolitan areas. 

Give me some comfort—my concern with the rule being presented is, one, litigation. Two, I have this concern about how do 

you incentivize build-out of the pipes when it looks like you are 

moving back to re-regulation? 

Mr. WHEELER. Yes. 

Mr. SHIMKUS. And that, if you are re-regulating, then you have 

to have a fee. That is where this fee debate comes from. So how 

do you get a fee to help build out? And maybe I am a simplistic 

view, but—and then the other question I have is really about the 

megabit debate, 10, 25. How do you encourage in this new venue, 

and then I will end, and if you all can—how—the individual consumer decide what speed they want versus being forced to buy a 

speed which they will never use, like my mother-in-law? 

Mr. WHEELER. Right. It is interesting, Congressman, everybody 

cites their mother or their mother-in-law in that example. There is 

nothing in here that regulates or established tariffs for the rates 

for consumer services. There is nothing in here that says that a 

company can’t have multiple levels of services. So your mother-inlaw gets e-mail only, and the person next—— 

Mr. SHIMKUS. And will pay for that—— 

Mr. WHEELER. And will pay—— 

Mr. SHIMKUS [continuing]. Simple service—— 

Mr. WHEELER [continuing]. For that kind of—— 

Mr. SHIMKUS [continuing]. Versus what—— 

Mr. WHEELER. And the person next door wants—— 

93 

Mr. SHIMKUS. Just so I can have a contrary debate, can I have 

Commissioner Pai or Commissioner O’Rielly address those before I 

run out of time, which I am about ready to do? 

Mr. PAI. Well, a couple different issues, Congressman. One, I 

think the order explicitly opens the door to ex-post rate regulation. 

Anyone can file a complaint under Section 208, either with the 

Commission, or with any Federal court across the country, and that 

Commission or court will have to adjudicate whether or not the 

rate is just or reasonable. And the fact that, while on the surface 

you might allow for differential prices based on different services, 

nonetheless it is ultimately up to the caprice of any given Commission or court to decide after the fact whether the rate is just and 

reasonable, and that is the essence of rate regulation. 

Additionally, you pointed out the incentive—or the effect that 

this would have on deployment. We have heard from companies 

that were responsible for the largest capital expenditures in our 

country when it comes to broadband, and companies that represent 

very small market areas, and they have told us that the impact of 

this kind of rate regulation, and other Title II regulations, is going 

to impede them from delivering some of those advanced services to 

anybody, whether it is a high bandwidth user or your mother-inlaw. 

Mr. SHIMKUS. With respect to my colleagues and everybody else, 

I will just yield back now. Thank you very much. 

Mr. LATTA. Well, thank you very much. The gentleman yields 

back. The Chair now recognizes, for 5 minutes, the gentleman from 

Iowa, Mr. Loebsack, for 5 minutes. 

Mr. LOEBSACK. Thank you, Mr. Chair. Thanks to all of you for 

being here today. Great discussion about various issues. I guess I 

will start out by saying—I don’t want to be too presumptuous about 

this, but I think a lot of us up here have a lot of concerns about 

rural broadband in particular. I know that that is a big concern for 

all of you. I have 24 counties, and although the Committee Chairman reminded me that his district is a lot larger than mine—I 

don’t mean the current chair, I mean Chairman Walden, and we 

have got some from North Dakota, that is a lot bigger than my district too. 

But I have 24 counties, and I have a lot of rural broadband carriers, a lot of small ISPs, as you mentioned, Commissioner Pai. But 

a lot of folks who need rural broadband for education, educational 

opportunities, for health opportunities—we are going to see a lot 

more tele-health, I think, in rural areas going forward. We are 

going to need that. For farmers, who have to access GPS so they 

can plant, and do it efficiently, and make a living, and for economic 

development, there is no question, and a lot of other reasons as 

well. 

I have one quick statistical question for you, Commissioner Pai. 

You gave us some numbers as far as—I think it was municipal providers and small providers. Can you repeat those numbers? You 

had two numbers, I believe. 

Mr. PAI. Sure. We received a letter from 43 municipal broadband 

providers on February 10, and we also received a letter from 24 

small broadband providers, each of which serves less than 1,000 

customers, on February 17. 

94 

Mr. LOEBSACK. Thank you for those numbers. How many small 

providers are there in the country? You received 20—from 24. Do 

you know what the number is total? 

Mr. PAI. I am not sure of the total number—— 

Mr. LOEBSACK. We have a lot in Iowa alone. 

Mr. PAI. Yes, I am not sure what the overall number is, but this 

is very representative—— 

Mr. WHEELER. About 800, sir. 

Mr. LOEBSACK. About 800? Thank you. 

Mr. PAI. We also—— 

Mr. LOEBSACK. Thank you, Mr. Pai. Thank you, Commissioner. 

Chairman Wheeler, as I am sure you are aware, the FCC reauthorization bill draft that we had before us on this committee that 

has been offered by the majority would make the Universal Service 

Fund subject to the appropriations process. I have been here 9 

years, my 9th year, and things are pretty dysfunctional here, as we 

all know, when it comes to the appropriations process. 

In this current environment, where Congress seems utterly incapable, if you will, of passing a bill through regular order, we saw 

this with the last minute—with the DHS, tying USF funding, 

which is so important for rural areas, as you know, to the appropriations process, I think, does risk a lot of instability down the 

road. I know you may not be willing to weigh in on this, but my 

question to you is do you support attaching USF funding to the appropriations process? 

Mr. WHEELER. Well, let me see if I can answer that, Congressman, by talking about what we hear from the kind of carriers you 

were talking about the small rural carriers. They say, ‘‘we need 

certainty. You are asking us to deploy capital, and we need to know 

that the capital from you is going to come behind that. We need 

to know with 5, 7 years of certainty that this money is going to be 

there.’’ That is the way the Universal Service Program has been 

run to provide that kind of certainty. 

Clearly a serious concern is that if, all of a sudden, that certainty 

is impacted because the appropriations move like this, or don’t 

move—— 

Mr. LOEBSACK. Yes. 

Mr. WHEELER [continuing]. And we are dealing with CRs, or 

whatever the ability of these rural carriers to make the investments that are necessary to provide service in high cost areas will 

be significantly impaired. 

Mr. LOEBSACK. Not to mention putting a cap on such a fund as 

well, which I think is something that is called for as well. This is 

just a really huge concern for so many of us, the rural broadband 

issue, as I mentioned. And I have had concerns in the past about 

how the USF is administered as well. 

I want to make sure—and I would be happy to hear from any 

of you here, I want to make sure that the USF fund actually goes 

to where it is supposed to go as well, and that those folks who can 

access that, and provide that kind of broadband that is necessary 

in those rural areas can have access to those funds. Because we 

also know that a lot of those folks are the ones who are paying into 

it in the first place, and I have just heard complaints that sometimes the funding doesn’t come back to them, they feel as though 

95 

they are being disproportionately put upon, if you will, in terms of 

contributing to that fund, and then not getting back, you know, in 

a proportionate way what they have been putting into it. Would 

any of you care to respond to that? 

Mr. WHEELER. So if I can pick up on that, Congressman? Particularly for the smaller rate of return carriers, we are going to be putting into effect this year a revision of the Universal Service Program for them. We are going to deal with the QRS, the hated regression analysis. We are going to come up with a model that says, 

‘‘here is what you can base your business decisions on.’’ 

If I can pause for a self-interested commercial for a second, we 

do need those carriers to help us come together. The reason I knew 

there were 800 is because we hear multiple voices talking about 

what they need, and everybody sits in a slightly different position, 

and if the industry could come together and say, ‘‘here is a common 

approach,’’ that would be very helpful. 

Mr. LOEBSACK. Thank you. 

Mr. WHEELER. I also need to correct the record on something 

that Mr. Pai said. He was talking about making a broad brush 

statement about small carriers. The NTCA represents these small 

carriers, has said—so the track records of RLEX rural carriers 

makes clear, Title II can provide a useful framework, and does not 

need to be an impediment to investment in ongoing operation of 

broadband networks. In a statement, the small rural wireless carriers also said that they will not object to this. So we have got to 

be careful that we don’t haul out a handful of people and make 

great generalizations from it. 

Mr. LATTA. The gentleman’s time is expired. 

Mr. LOEBSACK. Thank the Chair for indulging me—— 

Mr. LATTA. The Chair now recognizes for 5 minutes the gentleman from New Jersey, Mr. Lance, for 5 minutes. 

Mr. LANCE. Thank you very much. Commissioner Pai, would you 

like to respond to that? 

Mr. PAI. Thank you, Congressman, for the opportunity. I think, 

first, it is significant to remember that, number one, one of those 

folks who submitted the comments about Title II were conceiving 

of Title II in terms of just the last mile connectivity between the 

ISP and the customer. They had no idea, because the FCC never 

published the proposal, that this would go all the way to the far 

reaches of the Internet, including interconnection. 

Mr. WHEELER. That is not correct. 

Mr. PAI. Well, Mr. Chairman, please, if I could respond to the 

Congressman? Second, among the municipal broadband providers 

who—these are folks who, by definition, represent the public interest in their communities. Indeed, one of the municipal broadband 

providers was visited by the President himself in the weeks leading 

up to our vote. They themselves said, please don’t fall prey to what 

they called the ‘‘facile argument’’ that Title II won’t have an effect. 

Third, I think it is important to remember that, with respect to 

the effect that Title II will have on investment and opportunity, 

none of these services have been subjected to Title II previously. At 

the very most you can make the argument that last mile 

connectivity was, but I think it is critical for us to remember that 

regulation does have an effect. 

96 

We have heard from members of the American Cable Association, 

from small ISPs, from municipal broadband providers, and we can 

all debate about the numbers. What is indisputable is that these 

providers have thrived with light-touch regulation, and I think that 

is part of the reason why just yesterday we heard from a major 

broadband provider, ‘‘we have benefitted from, essentially, government staying out of the Internet, and I am worried that we are now 

on a path to starting to regulate an awful lot of things on the Internet.’’ Who was that? That was Google’s Executive Chairman Eric 

Schmidt—— 

Mr. LANCE. Thank—— 

Mr. PAI [continuing]. In Washington. 

Mr. LANCE. Thank you. Commissioner Pai, in your dissenting 

statement you state, I see no legal path for the FCC to prohibit 

paid prioritization or the development of a two-sided market, which 

appears to be the—objection by many to the Chairman’s proposal. 

The NPRM frankly acknowledges Section 706 of the Telecommunications Act could not be used for such a ban, and while the NPRM 

resists saying it outright, neither could Title II. After all, Title II 

only authorizes the FCC to prohibit unjust or unreasonable discrimination, and both the Commission and the Courts have consistently interpreted provision to allow carriers to charge different 

prices for different services. Could you elaborate on that—— 

Mr. PAI. Thank you for the question, Congressman. It has been 

textbook law since Title II and its antecedents were adopted, and 

this goes back to the 1880s, when—— 

Mr. LANCE. Yes. 

Mr. PAI [continuing]. You are regulating railroads, that differential services could be assessed at different prices by common carriers. Extending that toward the Telecommunications Age, it has 

long been the case, as I pointed out in my dissent, that you cannot 

ban paid prioritization. And in that regard, I completely agree with 

the Chairman’s statement on May 20 of last year that there is, 

‘‘nothing in Title II that bans paid prioritization.’’ 

Mr. LANCE. Given that, how long do you think that this is likely 

to be litigated in the courts? And I ask that because businesses 

need certainty as to what the rules of the road will be long term. 

Mr. PAI. I think whether you support or oppose the FCC’s order, 

the unfortunate aspect, everyone can agree on, is this will be litigated for a long time. 

Mr. LANCE. And this goes first, I guess, to the District Court here 

in the District of Columbia? Is—— 

Mr. PAI. Well, it will depend on where a petition for review is 

filed. It could be filed in any of the regional courts of—— 

Mr. LANCE. Yes. 

Mr. PAI [continuing]. Appeals. And then, if there are multiple appeals, it will have to be chosen by a lottery. 

Mr. LANCE. And is it your opinion that this will eventually reach 

the Supreme Court of the United States? 

Mr. PAI. I think it will. It presents a very substantial question, 

on which I could easily imagine the Supreme Court granting writ 

of certiorari. 

Mr. LANCE. Commissioner O’Rielly, your views as to the length 

of a litigation? 

97 

Mr. O’RIELLY. I agree wholeheartedly with my colleague on this. 

This is a 3 plus year debate that we are going to have in the court 

system. 

Mr. LANCE. Commissioner Rosenworcel, your views on that, 

please? 

Ms. ROSENWORCEL. I believe we will see litigation, yes. 

Mr. LANCE. And Commissioner Clyburn? And it is certainly an 

honor to serve with your father in Congress. 

Ms. CLYBURN. Thank you, I appreciate that. I am 99.99 percent 

sure that bill will be a legal—— 

Mr. LANCE. So this is even purer than Ivory soap? 

Mr. WHEELER. Wait a minute, I will go better than my colleague, 

OK? Because the big dogs have promised they are going to—— 

Mr. LANCE. I see. 

Mr. WHEELER [continuing]. Their word. 

Mr. LANCE. I do think that we need certainty going forward, and 

I am deeply concerned regarding that. 

Commissioner Clyburn, in a speech you gave several years ago, 

you said, without forbearance, there can be no reclassification, and 

I believe you went on to compare it as peanut butter and jelly, salt 

and pepper, Batman and Robin. Would you have supported reclassification under Title II without forbearance? 

Ms. CLYBURN. Without forbearance? 

Mr. LANCE. Yes. 

Ms. CLYBURN. One of the things that I think we did right was 

recognize the current dynamics of the day. 

Mr. LANCE. Yes. 

Ms. CLYBURN. This is not your father’s or your mother’s Title II. 

We forbore from 27 provisions, over 700 rules and regulations, so 

I am very comfortable in saying this is looking at a current construct, and that is you looking at me. My seconds are up. Thank 

you. 

Mr. LANCE. Thank you. I think you should have compared it to 

Bogart and Bacall myself. 

Ms. CLYBURN. That will be the next—— 

Mr. LANCE. Thank you very much, Mr. Chairman. I yield back 

my time. 

Mr. LATTA. Well, thank you very much. The gentleman yields 

back. The Chair now recognizes the gentleman from California, Mr. 

McNerney, for 5 minutes. 

Mr. MCNERNEY. Well, I thank the Commissioners for your hard 

work on this. Regarding the litigation issue, is there any decision 

you could make whatsoever on net neutrality that wouldn’t involve 

significant litigation? 

Mr. WHEELER. I think you have just hit the nail on the head, sir. 

Mr. MCNERNEY. OK. Just wanted to make sure about that. I believe most or all stakeholders believe that it is important to meet 

the big three of net neutrality, no throttling, no paid prioritization, 

and no blocking, but there is other stuff that might be controversial 

in your recent decisions. Anything that you want to bring up that 

might be of interest? 

Mr. WHEELER. Thank you, sir. Actually, there are only four regulations in here: no throttling, no blocking, no paid prioritization, 

and transparency. You have got to tell the consumers what you are 

98 

doing, so they have a fair choice. The other thing that we do is to 

establish general conduct rule that says you will not harm consumers; you will not harm innovators and you will not harm the 

functioning of the Internet and the public interest. 

Now, it is really interesting because people come in and say, ‘‘I 

don’t know what that means.’’ Well, that is exactly the way the 

FTC operates, and the way that the carriers have been saying, 

‘‘well, let us take things away from the FCC, and give it to the 

FTC, because we like this case by case analysis better than somebody coming in and having a rulemaking.’’ So we are not having 

a rulemaking that says we know best, this is the way you are supposed to operate. What we are saying is that there needs to be a 

judgment capability that says, ‘‘is there harm?’’ There needs to be 

the ability, if harm is found, to do something about it, but never 

to pre-judge, and always to be in a situation where you are weighing all of the interests. 

Mr. MCNERNEY. OK. Commissioner Rosenworcel, does the FCC 

have the power to regulate broadband providers, consumer privacy 

practices that are unrelated to their phone services? 

Ms. ROSENWORCEL. No. Not if they are unrelated to their telecommunications. 

Mr. MCNERNEY. Right. 

Ms. ROSENWORCEL. No. 

Mr. MCNERNEY. No. Is that something that would be of value? 

Ms. ROSENWORCEL. Well, obviously privacy is an important issue 

to all Americans, and privacy in the digital age is an evolving 

thing. Our statute, which dates back to 1996, involves customer 

proprietary network information under Section 222, and that is 

where the bulk of our privacy authority comes from, with respect 

to telecommunications services. 

Mr. MCNERNEY. Are there enough engineers at the FCC to help 

you do your job? 

Ms. ROSENWORCEL. I think we have terrific engineers at the 

FCC, but in revamping the agency, I think we should make it a 

priority to have more. It is clear that wireless technologies are exploding. The demand for our equipment authorization process is 

also multiplying exponentially. And if we had more engineers, I believe we would be in a position to help facilitate more innovation 

getting to the market faster. 

Mr. MCNERNEY. Do engineers tend to stay out of the politics of 

the Commission, or are they like other human beings and want to 

get into it once in a while? 

Ms. ROSENWORCEL. Well, that is a kind of metaphysical question. 

I am not sure I want to answer that one. 

Mr. MCNERNEY. All right. Let us see. You mentioned that there 

should be greater use for the upper portion of the 5-gigahertz band. 

Could you expand that a little bit, please? 

Ms. ROSENWORCEL. Absolutely. We benefit immensely from wi-fi 

in this country. About 50 percent of us use it to go online regularly 

in public places, and 60 percent of us use wi-fi at home. The bulk 

of our wi-fi activity takes place on the 2.4 Gigahertz band, but that 

place is getting mighty crowded. We also have spectrum in the five 

Gigahertz band that we use for wi-fi. Many of us, for instance, our 

home wi-fi systems are based on it. But only a portion of the five 

99 

Gigahertz band is dedicated to unlicensed and wi-fi services. We 

have got some other uses in there, and I think we should start 

studying those other uses, and find out if we can free up more spectrum in the 5-gigahertz band so more people have more access to 

unlicensed and wi-fi service. 

Mr. MCNERNEY. Well, what are the physical limitations of the 5- 

gigahertz band? Line of sight, or what are the physical limitations? 

Ms. ROSENWORCEL. So the easy way to describe it is the higher 

you go, you get more capacity, but it doesn’t travel as far. So five 

Gigahertz is really good inside buildings, inside households. And as 

more of us use devices that are not tethered to a cord, having that 

functionality is really important. 

Mr. MCNERNEY. Thank you. I yield back, Mr. Chairman. 

Mr. LATTA. Thank you very much. The gentleman yields back. 

The Chair now recognizes the gentleman from Texas for 5 minutes. 

Mr. OLSON. I thank the Chair, and welcome to all the Commissioners. Folks back home noticed that Commissioner Pai and Commissioner O’Rielly weren’t at the rollout of the new rules on February 26 this past year. They have got some questions they want 

answered, and want to know what you guys would answer if you 

had been at that rollout. 

I know there are claims about these Open Internet rules, that 

they do not violate the Fifth Amendment by ‘‘taking’’ broadband 

providers’ property. The Commission states that the rules do not 

break the Fifth Amendment because they ‘‘actually enhance the 

value of broadband networks’’ by protecting innovation. If these 

rules enhance the value of these networks, as the FCC’s majority 

claims, why do broadband providers large and small, wired and 

wireless, oppose the rules? Any thoughts, Commissioner Pai? 

Mr. PAI. Congressman, thank you for the question. I think part 

of the reason why established broadband providers oppose these 

rules is that they have invested literally hundreds of billions, if not 

trillions of dollars since the inception of the Internet in reliance on 

the bipartisan consensus, started in the Clinton Administration, 

that the Internet would ‘‘remain unfettered from Federal and state 

regulation’’. That same combination of President Clinton and Congress agreed that access to the Internet would be an information 

service in Section 230 of the Act. 

In reliance on that determination, a lot of these providers went 

to the capital markets, spent a lot of money, took a lot of risk, to 

build out what I consider to be the best Internet environment in 

the world. As Commissioner Rosenworcel has said, our Internet is 

the envy of the world. And part of the reason why they have a concern about regulatory takings is, under the leading case of Pension 

Benefit Corporation vs. Connolly, there is a question about whether 

reliance expectations have been disturbed by the exertion of these 

Title II regulations, and that is something that a court is going to 

have to work out and take very seriously. 

Mr. OLSON. So they think it is taking it, it sounds like. Mr. 

O’Rielly, your thoughts, Commissioner O’Rielly? 

Mr. O’RIELLY. So I would suspect that there will be an argument 

made and challenged on the Fifth Amendment, and the assumptions made by the Commission are likely to be put to test in court. 

Mr. WHEELER. Congressman? 

100 

Mr. OLSON. Yes, sir. One question for Commissioner Pai, hold on 

a second, if I have some time, but I have got some questions my 

people back home want me to answer. 

Commissioner Pai, let us talk about transparency, how the Committee works behind the scenes. You wrote in your testimony that 

your edits in the e-rate proceedings were rejected, and yet miraculously they came back when another Commissioner introduced 

those same edits. Is that true, false? Can you elaborate on what 

happened there? 

Mr. PAI. Thank you for the question, Congressman. I put my own 

proposal for E-Rate on the table 2 years ago. When the FCC teed 

up its own proposal last year, I suggested, OK, I don’t need to go 

with my proposal. Working within your framework, here are a 

number of suggestions that would get my vote. I was told no, a lot 

of these are all red lines, we don’t want your vote. 

One of the suggestions I had obviously didn’t go to the core of 

the item. It said, I want to allow schools and libraries to be able 

to use e-rate funds for caching servers. Doesn’t seem too ideologically troublesome to me, but that was rejected explicitly as what 

was ‘‘a red line’’. Miraculously, when the order was ultimately 

adopted, and when my colleagues on the other side suggested it, it 

was agreed to. Same thing on the incentive option. I made 12 different asks. I was told no to 11, and maybe on the 12th. 

One of the ones that was deemed a red line was extending the 

comment deadlines, because we had put some very complex proposals on the table, we might want to understand what the public 

thought about it. I was told no, that was a red line, that would risk 

delaying the incentive auction. Lo and behold, now the Bureau on 

delegated authority has extended those very comment deadlines 

twice. These are just some of the pretty non-ideological proposals 

I have made that have been rejected. 

Mr. OLSON. Is that standard practice? 

Mr. PAI. It has not been historically. I can tell you that, based 

on my first year-and-a-half with the Commission, while I might 

have disagreed with some parts of an order that were ultimately 

adopted, nonetheless there was a spirit of collaboration and consensus that ultimately gained buy-in from all the Commissioners. 

And that, I think, ultimately really makes our product stand the 

test of time. It gains us legitimacy among the American public and 

gives us more insulation from litigation risk. 

Mr. OLSON. One final question. There are some parties out there 

that have said this action has been essential because the Internet 

is so essential to our life, the American life, and that the current 

situation is outdated, and it must be changed. This is a change. 

Should that agent of change be you all, or Congress, the elected officials for the American people, our voices, as opposed to, not an offense, but five unelected Commissioners? I am going to go home 

today and take some heat, good and bad, about what has happened 

here. You guys will go home to your families and be OK. How 

about us being in control, as opposed to you all? Any thoughts? 

Mr. PAI. Congressman, that is precisely why, when the D.C. Circuit rendered its decision last year, I said, without knowing how 

this would turn out, we should go to Congress for guidance. You 

wrote the Communications Act. You have updated it over the 

101 

years. You are the elected officials who should decide how the 

Internet economy should proceed. On a matter this important, with 

laws that essentially constrain our authority, we should turn to the 

experts, which is Congress. 

Mr. OLSON. Constitution. Yield back. 

Mr. LATTA. Thank you very much. The gentleman yields back. 

The Chair recognizes for 5 minutes the gentlelady from California. 

Ms. MATSUI [continuing]. Mr. Chairman, I would like to yield my 

time, and we are going to switch our time. 

Mr. LATTA. Well, in that case, the gentlelady yields her time to 

the gentlelady from New York. 

Ms. MATSUI. Thank you. 

Mr. LATTA. Five minutes. 

Ms. CLARKE. Thank you very much, Mr. Chairman, and I would 

like to yield a few seconds to my Ranking Member, Ms. Eshoo. 

Ms. ESHOO. Thank you for your time, appreciate it. To Commissioner Pai, as you went through the litany of your ideas, and you 

didn’t get your way, welcome to the minority. 

Ms. CLARKE. Thank you. Let me just ask a few questions of our 

distinguished Commissioners. And the first question is to Chairman Wheeler. 

Chairman Wheeler, I am concerned about multilingual broadcasting alerts, and the FCC’s urgency around this issue. In addition to 911 upgrades, what is being done to ensure that the EAS 

reflects the growing ethnic and language diversity of our nation? 

Mr. WHEELER. Thank you, Congresswoman, I am glad you asked 

that question. Literally yesterday I was meeting with our public 

safety and security body that is an advisory group, and talking 

with them about the importance of updating EAS, and the recommendations that they have put out, insofar as making sure that 

those updates are communicated to all the parties. Yes, we have 

an EAS system that hasn’t been updated since the Cold War. We 

have to fix it to represent not only new technology, but also increased diversity. 

Ms. CLARKE. And I hope that we will make that a priority because, you know, with the challenges that we are facing, 21st century challenges of climate change, of flooding, of, unfortunately, 

terrorist attacks, it is becoming more and more of a pressing need, 

a current day need. 

The next question I have to you has to do with the Section 257 

report. Congress requires the FCC to report on market entry barriers every 3 years, but your latest report to Congress, the 257 report, was due December 31, 2012, and it is still forthcoming. Would 

you give us an idea, or share with us how the FCC will prioritize 

this as a process reform to ensure more diversity and inclusion in 

the media and telecom industries? 

Mr. WHEELER. Thank you. This has been an item of contention. 

My colleague, Commissioner Clyburn, was moving this process forward when she was acting Chair. I think it is fair to say that it 

ran into some difficulties inside of the Commission amongst the 

Commissioners. She did an admirable and excellent job that I am 

attempting to pick up on, and to move forward on, because these 

kinds of issues are important to not only the future of how we build 

102 

out telecommunications, but the future economic opportunities and 

structure in our country. 

Ms. CLARKE. Very well, I appreciate that. And 2 years ago I sent 

a letter to then FCC Chairman Julius Genachowski, asking that 

the issue of activated FM chips in cell phones be examined. I also 

understand that you, Chairman Wheeler, are interested in this 

issue. What progress has been made to ensure that my constituents 

have every tool at their disposal to receive life-saving information 

in the event of another terrorist attack, power grid outage, or 

weather emergency? 

Mr. WHEELER. So FM chips are a great idea, and they are in an 

increasing number of phones. They bring with them a couple of 

technological challenges. One is antenna size. They need a bigger 

antenna to get the FM signal that that becomes an issue in a tiny 

device. They also can drain battery power. But they are increasingly showing up, consumers have the ability to purchase them, 

and some carriers specifically focus on them. 

I think the broader question is whether or not the Commission 

should be forcing wireless carriers to activate these chips, or 

whether they ought to be leaving that to consumer choice. I know 

that broadcasters around the country are running commercials—— 

Ms. CLARKE. Yes. 

Mr. WHEELER [continuing]. Saying write the FCC, write your 

Congressperson, and make them do it. I think this is something 

that is being resolved in the marketplace, and that we ought to 

monitor that, and watch what happens. 

Ms. CLARKE. I appreciate it. I have a few more questions. I will 

submit them to the record, Mr. Chairman, but I thank you, and I 

thank all of you Commissioners for your hard work and diligence. 

Mr. LATTA. Well, thank you very much. The gentlelady’s time has 

expired. The gentleman from Illinois is now recognized for 5 minutes. 

Mr. KINZINGER. Thank you, Mr. Chairman. Thank you all for 

being here. Thanks for serving your country, and spending all 

afternoon with us. We appreciate it. Hopefully not overly much 

longer. 

Commissioner Pai, I have to tell you, when you were asked by 

Mr. Olson about your suggestions to the Commissioner were ignored, and then other folks made the same suggestion, and they 

were taken in, that was actually pretty mind blowing to me, to be 

honest with you. And, you know, the joke was made earlier, and 

I chuckled too, about welcome to the minority, but I hope the Commission doesn’t become like Congress, because I think the intention 

of the Commission was not to be overtly partisan. That is 

Congress’s job. We battle issues, we debate them. I mean, that is 

what happens. We look for compromise. I hope the Commission 

doesn’t follow our lead on that. 

Commissioner Pai, in your statement of dissent on the Open 

Internet Order, you spent some time talking about the procedure 

surrounding the Notice of Proposed Rulemaking. Specifically, you 

talked about how much the order changed from its initial creation, 

and stated that the standard is whether all interested parties 

should have anticipated the final rule, not that they could have anticipated the final rule. Could you explain a bit further the probVerDate Nov 24 2008 11:42 Jul 14, 2016 Jkt 037690 PO 00000 Frm 00108 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-24 CHRIS
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lems you see with what was originally proposed by the Commission, as compared to what was eventually adopted? 

Mr. PAI. Thank you for the question, Congressman, and for the 

kind words about some of the bipartisan efforts I have made at the 

Commission to reach consensus. I think the problem with respect 

to notice is substantial. I think the FCC teed up, in May of 2014, 

a very different proposal from the one it ultimately adopted. 

The May proposal, for example, was based on Section 706, and 

never mentioned such things as redefining the public switched network. It never mentioned the extent of forbearance, or even what 

specific sections would be forborne from. It never mentioned a 

whole host of other things, and I think the problem is that, once 

the FCC teed up this plan in—on February 5, and voted on February 26—a lot of the things in there, unfortunately, have not— 

there is no record sufficient to support them. Forbearance is the 

best example of that. There is no evidence in the record, certainly 

not on a geographic market basis, to support a finding sufficient to 

grant forbearance on a lot of these things. 

And that is part of the reason why the FCC completely recast its 

forbearance analysis, created this new analysis that junked a lot of 

the previous FCC precedents in order to find forbearance. And I 

think there are going to be substantial legal problems with this. 

Mr. KINZINGER. Thank you. Chairman Wheeler, earlier you said 

that if asked to regulate rates, that the Commission would make 

it clear that the Commission will not regulate retail rates on 

broadband. Would you agree that a prohibition on the Commission 

regulating broadband rates is consistent with your views? 

Mr. WHEELER. So I have said repeatedly that we are not trying 

to regulate rates, and that, again, if Congress wants to do something in that—— 

Mr. KINZINGER. Sure. 

Mr. WHEELER [continuing]. Regard, that is Congress’s authority. 

I would—— 

Mr. KINZINGER. So, wait, you are not interested in, but what 

about the next FCC Commissioner? Do you believe that under Title 

II that they have the authority to regulate rates? Now, you—I 

mean, and I respect that you don’t want to, but you have created 

something that will now be passed down through generations of 

FCC Commissioners. 

Mr. WHEELER. Well, as I said in my earlier response, if this 

comes before us while I am there, I hope that, without pre-judging 

the issue, that we can build a record that will make it difficult for 

that to happen. 

Mr. KINZINGER. But you could understand, then—— 

Mr. WHEELER. Congress clearly has the authority to do—— 

Mr. KINZINGER. You could understand—— 

Mr. WHEELER [continuing]. Like to—— 

Mr. KINZINGER. You could understand our concern, you know, 

again, we respect when you say, I have no intention of doing it. 

That is great. But you can understand the concern of Congress, 

where you implement a rule, and then, in essence, say, I don’t have 

any intention of regulating rates, but I am not going to prevent— 

I mean, I, you know, the next—— 

Mr. WHEELER. So—— 

104 

Mr. KINZINGER [continuing]. Commissioner could do it. 

Mr. WHEELER. Yes. One of the things that we did was we patterned this after Section 332 and the regulation of mobile voice. 

For 22 years this exact same authority has rested at the Commission for mobile voice service and never been used. 

Mr. KINZINGER. So if legislation that said, notwithstanding any 

provision of law, the Federal Communication Commission may not 

regulate the rates charged for broadband Internet access service, 

that would be consistent with that view? 

Mr. WHEELER. That is what we are trying to accomplish. 

Mr. KINZINGER. OK. Commissioner Pai, we have heard Chairman 

Wheeler assert that his decision to apply Title II to mobile 

broadband services will have no impact on investment because mobile voice service has been subject to Title II, and we have seen 

substantial investment in mobile voice under that regime. Do you 

agree? 

Mr. PAI. I do not, Congressman, for a couple of different reasons. 

First, it is critical to remember that the reason rate regulation for 

mobile voice didn’t occur was because the FCC, from the inception, 

determined that competition was sufficient in the voice marketplace so that there wasn’t any need for rate regulation. Here, by 

contrast, the FCC explicitly finds that the broadband market is not 

competitive, so it explicitly opens the door to the kind of rate regulation that was not contemplated for mobile voice. 

Secondly, with respect to mobile investment, one of the reasons 

why we have seen such huge investment since 2007 was because 

of the inception of the smartphone, and the huge increase in mobile 

data traffic that was generated as a result. Wireless carriers now, 

big and small, have to spend to keep up in terms of infrastructure 

and spectrum to deliver some of that mobile data traffic. Mobile 

data traffic has never been classified as a Title II service. That is 

what has driven mobile investment, not Title I’s application to mobile voice. 

Mr. KINZINGER. Thank you, and thank you all again for your 

service, and I yield back. 

Mr. WALDEN. Thank the gentleman. We now turn to the 

gentlelady from California, Ms. Matsui, for—— 

Ms. MATSUI. Thank you, Mr. Chairman. I want to thank you, 

Commissioners, for being here. Question for Commissioner 

Rosenworcel. One of the keys to innovation is spectrum, and more 

spectrum, and I believe we need a national spectrum plan, actually, 

a plan that considers both licensed and unlicensed spectrum. Now, 

you have done a lot in this space, I know, so can you share with 

us briefly some of your ideas to generate revenue from spectrum 

sharing, and the ways to incentivize Federal agencies to relocate? 

Ms. ROSENWORCEL. Thank you for this question, I know, along 

with Congressman Guthrie, you have done a lot of work in this 

area. The fuel for our wireless revolution is spectrum, and if we 

want to have a modern spectrum economy, we are going to need 

a more consistent spectrum pipeline. Today, as you probably know, 

when we need more airwaves for commercial mobile use, we knock 

on the door of Federal authorities—— 

Ms. MATSUI. Yes. 

105 

Ms. ROSENWORCEL [continuing]. And we beg, coax, and cajole, 

and over time they will give us some scraps. And then Congress 

will direct those Federal authorities to clear out of that spectrum, 

relocate, and then you will ask the FCC to auction off those airwaves. This process is slow, it is clunky, it is not reliable, and it 

is not the pipeline that a modern wireless economy needs. 

That is why I think it is really important that we develop a system of structured incentives for Federal spectrum authorities so 

that, when we try to secure more airwaves for commercial use, they 

see benefits in reallocation and not just loss. That could, obviously, 

include anything from changes in their budgets to benefits through 

the appropriations process, to the ability to actually secure what 

sequestration might have taken away. But in any event, I think 

that this type of pipeline would actually make our spectrum markets more effective, fast, and efficient. 

Ms. MATSUI. Well, thank you very much for those comments. 

Chairman Wheeler, I have a question for you. 

Mr. WHEELER. Yes, ma’am. 

Ms. MATSUI. I remain very concerned about the Stingray surveillance devices that are used by a number of local law enforcement 

agencies, without which appear—there doesn’t seem to be any Federal oversight, and the public should actually have more access to 

the information about the Stingray device, including what it is 

being used for, its surveillance capabilities, and who has access to 

the sensitive information that it collects. And despite some assurances to the contrary, it is unclear to me, and many others, how 

the Stingray device does not collect data on innocent Americans. 

And so, Mr. Chairman, in August you announced the creation of 

a task force on the Stingray device and similar technology. I would 

like to know the status of this task force, and why haven’t we seen 

anything come out of it, and what—a series of questions—and what 

you are doing to address the real concern about the lack of oversight over this device. 

Mr. WHEELER. Thank you, Congresswoman. The task force did 

look into the situation, and what we found was as follows: our jurisdiction, and our authority, is to certify the electronics and the 

RF components for such devices for interference questions, and 

that if the application was being made in conjunction with law enforcement, then we would approve it. This is for the technology. 

This is not for who buys it. 

Ms. MATSUI. Right. 

Mr. WHEELER [continuing]. In general, we would approve it. And 

from that point on, its usage was a matter of law enforcement, not 

a matter of the technological question of whether or not a piece of 

hardware interfered with other RF devices. 

Ms. MATSUI. So you are saying that it is out of your jurisdiction, 

and we have to go to other Federal agencies, including law enforcement? Because I am concerned about the device being sold on the 

market, or over the Internet, to non-law enforcement organizations, 

or the general public. So this is something we have to follow up 

with law enforcement, Federal law enforcement? 

Mr. WHEELER. We would—on the broad issue, it is follow up 

with—I think that we would have enforcement jurisdiction in an 

106 

unauthorized use of an RF device if, in fact, it were being sold illegally. 

Ms. MATSUI. OK. Thank you. I just want to bring up another 

issue here. More consumers, particularly the millennials, are opting for online subscriptions to buy the TV channels and programming content they want, and we are really clearly seeing the market react. HBO and Apple streaming agreement, CBS is offering 

monthly online subscriptions, and on and on. 

I really think this is the future, and no doubt it is a complex 

issue, however, cable video is going IP, and soon the consumer will 

be basically paying for bandwidth, and we should look for ways to 

empower the consumer to be able to pay for programming they 

want to watch. So I think this is something our subcommittee 

should explore moving forward in a bipartisan manner, and I just 

put that out there, and I will yield back the balance of my time. 

Mr. WALDEN. Gentlelady yields back the balance of time. Chair 

recognize the gentleman from Florida, Mr. Bilirakis, for questions. 

Mr. BILIRAKIS. Thank you. Thank you, Mr. Chairman, I appreciate it. And I want to thank the Commission for their patience 

today, and also for their testimony. 

Mr. Chairman, Chairman Wheeler, there was an unfortunate accident in the Tampa Bay area, the area that I represent in Congress, last April involving Mr. Humphries. It seems that he had a 

powerful jammer in his SUV, powerful enough to jam local law enforcement radios and calls to 911. He had been doing this for over 

2 years. When a local cell phone company reported interference, the 

field agents in the Tampa office quickly tracked him down, and 

ended the significant threat to the safety of the folks in the Tampa 

Bay area. 

It is my understanding you are planning to close this enforcement office in my area. As a former chairman of the Homeland Security, Emergency Preparedness, Response, and Communications 

Subcommittee, I have a few questions. How many offices, if you are 

closing any, do you plan to close, sir? 

Mr. WHEELER. Sixteen. 

Mr. BILIRAKIS. Sixteen? Will the job slots say from the Tampa 

Bay area be moved to the Washington, D.C. area, yes or no? 

Mr. WHEELER. No. 

Mr. BILIRAKIS. OK. Are you closing the field offices and laying off 

staff to support the Enforcement Bureau’s new work under the net 

neutrality order? 

Mr. WHEELER. No. We are doing it to increase productivity. What 

we are finding is it costs two to three times what a centralized operation would cost, that we have got too many people doing too few 

things in a specific area, not meaning there aren’t issues there, but 

that we can get greater productivity if we follow the kind of model 

the FAA has been doing, where you have strike forces. So we would 

leave in place, in Tampa, for instance, necessary equipment, and 

would bring people in out of the Miami office to deal with the kind 

of situations that you are talking about, and that is a more cost 

efficient way of accomplishing the kind of goals you are talking 

about. 

Mr. BILIRAKIS. Florida is a big state, sir. According to the budget 

request, page 50, the agency will preserve the integrity of public 

107 

safety communications infrastructure by taking action on 99 percent of complaints of interference to public safety communications 

within 1 day. Will you commit to ensuring that this metric has 

been met historically according to the performance report the Commission has issued over the years? Will you commit that this metric will be met—— 

Mr. WHEELER. We believe that we can do this without a diminution in quality, sir. 

Mr. BILIRAKIS. OK. Will you provide the committee a quarterly 

report detailing the Enforcement Bureau’s success in meeting that 

metric, including a list of actions taken through the remainder of 

your Chairmanship, sir? 

Mr. WHEELER. Good idea. 

Mr. BILIRAKIS. OK. Very good. What do you want me to tell the 

deputies—I know you talked about it. If you can elaborate a little 

bit more, what would you like me to tell the deputies and other 

first responders in the Tampa Bay area who may be in danger? 

This is a very important issue, as you know, public safety, by the 

delayed response inevitable, and losing an Enforcement Bureau 

field office, which, again, Florida is a big state, and I know other 

members probably have questions with regard to the offices that 

are being closed, 16 nationwide. 

Mr. WHEELER. So I think the reality that we face is that we have 

a flat or diminishing budget, we have unfunded mandates imposed 

by the Congress, and we have to say, ‘‘how can we increase efficiency?’’ Do I want to close these offices? I don’t want to hear what 

you are saying, I don’t want other folks who are representing areas 

that are going to lose offices, and hear their complaints. But I have 

got a fixed amount of dollars to work with. 

Mr. BILIRAKIS. I will go on—— 

Mr. WHEELER [continuing]. So the question becomes how do you 

become efficient? And that’s what we’re trying to do. 

Mr. BILIRAKIS. Thank you. Commissioner O’Rielly, how do we, 

the United States, have any credibility telling other countries, like 

China or Iran, not to control network management practices within 

their borders if we are taking large steps in that direction, with the 

recent overreaching broadband reclassification? 

Mr. O’RIELLY. So I think there is an extreme trouble that we are 

setting our stage by passage of this item on net neutrality. I think 

it sends the wrong message internationally. That matches up with 

my conversations internationally, when I went to both Spain recently, and I was in South Korea for the ITU. They are interested 

in engaging on issues of the broadband. They would like to get as 

much involvement as they can. 

Those regimes you speak of obviously have greater government 

control on the practices of Internet in their nations. So it is a bifurcated message that we were able to send before the passage of this 

item, that we shouldn’t do it here, and you shouldn’t do it there. 

Now we are saying, well, we are willing to do some things on regulating broadband, but you shouldn’t do them over there, or that it 

is OK, acceptable practice across the world, which I think is just 

a terrible message for them to send—— 

Mr. BILIRAKIS. Mr. Pai, what are your thoughts on this issue? 

108 

Mr. PAI. Congressman, thanks for the question. I agree with my 

colleague, Commissioner O’Rielly, and I would associate myself 

with the State Department’s views 5 years ago, when they represented, ‘‘We are concerned that in some countries net neutrality 

may be used as a justification for blocking access for purposes of 

preventing unwelcome political, social, or cultural information from 

being disseminated to their citizens.’’ And I think this is a bipartisan issue on which the U.S. has historically stood together, and 

I hope, notwithstanding the February 26 order, that would continue into the future. 

Mr. WALDEN. Gentleman’s time—— 

Mr. WHEELER. Congressman—— 

Mr. BILIRAKIS. Thank you. 

Mr. WHEELER. Mr. Chairman, could I just say, for the sake of the 

record, could we submit for the record—— 

Mr. WALDEN. Sure. 

Mr. WHEELER [continuing]. The full quote that was just excerpted by Commissioner Pai? 

Mr. WALDEN. Absolutely. 

Mr. WHEELER. Great. Thank you. Because it is really taken out 

of context. 

Mr. PAI. It is not. 

Mr. WALDEN. Yes. We now recognize the gentleman from Ohio, 

Mr. Johnson, for 5 minutes. 

Mr. JOHNSON. From the great state of Ohio—— 

Mr. WALDEN. Stop it. 

Mr. JOHNSON. Chairman Wheeler, I want to tell you how honored 

I am that you have chosen to join with our Chairman in paying 

tribute to—— 

Mr. WHEELER. You—— 

Mr. JOHNSON [continuing]. Ohio State today. 

Mr. WHEELER. You picked up on this, sir, the—— 

Mr. WALDEN. Is this button the one I use to mute? 

Mr. JOHNSON. OK. Commissioner Rosenworcel, in your opening 

testimony, I want to associate myself with something you said. You 

said we rarely go anywhere these days without our mobile devices 

on us. I couldn’t agree with you more. I was in information technology for over 30 years, long before there was any such thing as 

the Internet as we know it today, and I submit that the reason we 

have these things is because we have had unregulated, by the Federal Government, Internet and information services, which has allowed for the innovators to blossom. So I agree with you. 

Chairman Wheeler, this committee has requested a number of 

documents that have been denied under the claim of deliberative 

process privilege. For the deliberative process privilege to apply, an 

agency must show that a communication was a ‘‘direct part of the 

deliberative process, and that it makes recommendations or expresses opinion on legal or policy matters’’. And in proceedings like 

the Open Internet proceeding, ex parte filings are required to disclose communications between the FCC and the executive branch, 

or its staff, if those discussions are, I quote, ‘‘of substantial significance and clearly intended to affect the ultimate decision’’. 

Now, I am trying to figure out how these two different concepts 

apply here. In withholding certain communications between the 

109 

White House and the FCC, you have asserted the deliberative process privilege. If those communications were relevant to the Commission’s deliberation, several questions emerge. Weren’t they subject to the Commission’s ex parte rules? Are the contents of those 

meetings memorialized in any docket at the Commission? How 

could these conversations with the White House have been both a 

direct part of the deliberative process, but not have been of substantial significance in that proceeding? Those are questions that 

are rolling around in my mind. Now I will get to a question for you. 

I know that you have indicated in your written testimony that 

you received no secret instructions from the White House. But, of 

course, secret instructions are not the standard for determining 

when ex partes are available. Here is my question. In the 10 meetings that you had with the White House in advance of the FCC’s 

action on the Open Internet, is it your opinion that the only meeting that addressed the merits of the Commission’s Open Internet 

proceeding occurred last November? 

Mr. WHEELER. Yes, sir, and—— 

Mr. JOHNSON. Did you say yes? 

Mr. WHEELER. Yes, and the 10 meetings, just to be clear, were 

not meetings that were necessarily on Open Internet. We had trade 

issues, we had national security issues, we had cyber issues, we 

had auction issues—— 

Mr. JOHNSON. But in the 10 meetings that came in advance of 

the FCC’s action on the Open Internet, you are saying that there 

was no information or discussions of substantial significance and 

clearly intended to affect the ultimate decision, which would require the disclosure of that information? 

Mr. WHEELER. There are—— 

Mr. JOHNSON. Is it your opinion that—— 

Mr. WHEELER. There are two parts here. One, you have—— 

Mr. JOHNSON. No, that is a yes or a no answer—— 

Mr. WHEELER. No, you correctly identified what the test—— 

Mr. JOHNSON. So is it yes or no? 

Mr. WHEELER [continuing]. And I did not get instructions in 

those meetings. 

Mr. JOHNSON. No, I am not talking about that. I said do they 

qualify under ex parte, or how do they qualify for both—I am asking you a question—— 

Mr. WHEELER. And there is an exemption—— 

Mr. JOHNSON. Mr. Wheeler, I am—my time. 

Mr. WHEELER. And—— 

Mr. JOHNSON. How do they qualify under both? If they are in discussion with the White House, my goodness, that is the highest office in our land. I find that the American taxpayer does see that 

as significant and substantial. How can they not be significant and 

substantial, clearly intended to affect the ultimate decision, and yet 

you deny them under a deliberative process claim? 

Mr. WHEELER. Well, there are multiple parts to that. You asked 

how. One is there were not instructions given to me. I have been 

on the record on that, and been clear. Second is that—— 

Mr. JOHNSON. That is not the determination. 

Mr. WHEELER. I am about to—the determination also is that, 

specifically, interactions with Congress and the White House are 

110 

excluded from ex parte, and have been since 1991. But I am going 

beyond that, and saying that is a non ex parte conversation, if 

there was a conversation that was taking place in that kind of a 

construct, and two, that—I will even go—— 

Mr. JOHNSON. Under what basis? 

Mr. WHEELER [continuing]. I got no instructions—— 

Mr. JOHNSON. Under what basis? I mean, you can’t just make 

that up. The law says what is required to be revealed and what is 

not to be revealed, and a deliberative process privilege applies 

when you can show a direct part of the deliberative process, and 

that it makes recommendations, or expresses opinion in legal or 

policy matters, rather than substantial significance and clearly intended to affect the ultimate decision. 

Mr. WHEELER. I am quoting the—— 

Mr. JOHNSON. Well, I am disagreeing with you, Mr. Chairman, 

and I think it is irresponsible that you are withholding information 

that rightfully should be openly disclosed to this Committee, and 

to the American people. And, Mr. Chairman, I have—— 

Mr. WALDEN. Gentleman’s time—— 

Mr. JOHNSON [continuing]. Exhausted my time. 

Mr. WALDEN. Chair now recognize the gentleman from New 

York, Mr. Collins, for 5 minutes 

Mr. COLLINS. Thank you, Mr. Chairman. Before I get to my questions for Commissioners O’Rielly and Pai, one follow up to Mr. 

Johnson’s question, Chairman Wheeler. There were 10 meetings, 

and we do understand there was, on the ex parte side, disclosure 

on one of those 10 meetings. It is my understanding that on the 

other nine meetings there was nothing of significance discussed relative to the FCC, where, under the rules of ex parte, that you 

should have, or would be required to otherwise disclose those. Is it 

true there was nothing disclosed on nine of the 10 meetings? 

Mr. WHEELER. No, the test is—— 

Mr. COLLINS. No, I am not asking you for the test. 

Mr. WHEELER. No, there is a—— 

Mr. COLLINS. Was there anything disclosed? 

Mr. WHEELER. There is—— 

Mr. COLLINS. Sir, I am asking the questions. 

Mr. WHEELER. OK. 

Mr. COLLINS. Was there anything disclosed on the other nine 

meetings? That is a yes or a no. 

Mr. WHEELER. I had no—— 

Mr. COLLINS. That is a yes or no. 

Mr. WHEELER [continuing]. Instructions. No. I had no instructions. 

Mr. COLLINS. Well, I guess I am befuddled that in nine of the 10 

meetings in the White House there was nothing of any consequence 

discussed relative to the FCC that would require disclosure. I will 

take you at your word, and just say I am befuddled by that. 

Now, one thing that we were clear about today is the importance 

of certainty. And Chairman Wheeler, more than anyone, stressed 

the importance to the providers in the Internet space of certainty, 

certainty, certainty, and I can’t agree more, with my life in the private sector. Certainty drives investment and returns, and with certainty you invest in innovation. And I would say it is pretty obviVerDate Nov 24 2008 11:42 Jul 14, 2016 Jkt 037690 PO 00000 Frm 00116 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-24 CHRIS
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ous today, the way things have worked has been pretty good, the 

light touch. 

We have the number one service in the world. The investments 

have been billions, and, as Commissioner Pai said, maybe trillions 

of dollars. We lead the world today. Now, here is my concern. We 

have also heard unanimous agreement by the Commissioners litigation is coming, and likely to take 3 years. It is guaranteed. 

Chairman Wheeler said guaranteed there is litigation coming for 3 

years. Well, if that is not the definition of uncertainty, I don’t know 

what is. 

For the next 3 years the folks looking to invest and innovate in 

this world have to live under the ultimate uncertainty of which 

court is going to rule how, and when does it move, and what do 

you do? So, to me, there is a real issue here, a very genuine issue 

of inconsistency with the Chairman stressing importance of certainty, and then saying, and one thing is certain, we are going to 

court, which guarantees uncertainty. 

So I guess, Commissioner Pai, I would like to say again, to me, 

lack of certainty is a wet blanket on investment. Lack of certainty 

is a wet blanket on innovation. And my worry is, with less innovation, and less investment, we will someday wake up and not be the 

leaders in the world relative to what we think and know is probably one of the most important aspects of where we are headed. 

Could you briefly comment on that, and perhaps take a minute, 

and then I would like Mr. O’Rielly to fill in the remaining time. 

Mr. PAI. Thank you for the question, Congressman. I couldn’t 

agree with you more that uncertainty is the bane not only of the 

private sector, but ultimately consumers, who won’t get the benefit 

of some of that private sector risk. I will give you just two instances of uncertainty that this order generates. 

First, with respect to the so-called Internet conduct standard, 

which lays out seven vaguely worded non-exhaustive factors under 

which the FCC is going to determine what is allowed and what 

isn’t allowed. And the FCC, after the vote, conceded ‘‘we don’t know 

where things go next’’. The FCC ‘‘will sit there as a referee and be 

able to throw the flag.’’ The Electronic Frontier Foundation targeted this particular rule and said the problem with a rule this 

vague is that neither ISPs, nor Internet users, can know in advance what kind of practices will run afoul of the rule. 

Second example, the Enforcement Bureau advisory opinion process. Nobody knows exactly how it is going to work. Commissioners 

aren’t going to have the ability to have input into that. And when 

you pair the Enforcement Bureau advisory opinion process with 

this Internet conduct standard, essentially the entrepreneurial 

spirit of American is going to be funneled through this regulatory 

bottleneck, and nobody is going to know in advance until they get 

permission from Washington what is allowed and what isn’t. 

Mr. COLLINS. I couldn’t agree more that the only thing certain 

is uncertainty for the next 3 years. Commissioner O’Rielly? 

Mr. O’RIELLY. I couldn’t agree with my colleague any more. I 

think he has hit it right on the head. I would say I was in St. Louis 

not but a couple months ago and talked to wireless ISPs, and 

talked about what could happen under this item, and what it 

would mean for their business. And these are the guys that are the 

112 

small guys. We talk about 800 other providers, well, these are 800 

wireless ISPs trying to serve in the most rural parts of America, 

and they are stringing together networks under unlicensed bands, 

and they are asking for more spectrum, and they are like, what 

does this mean for me? And I am like, it means more paperwork, 

it means more compliance, it means you don’t know what you can 

do for your business for a number of years. And they were just 

frustrated beyond belief. 

Mr. COLLINS. Well, I share your concerns, and I think America 

will too, and we will have to see where that heads. Mr. Chairman, 

my time is up, and I yield back. 

Mr. WALDEN. Thank the gentleman from New York, and our witnesses. And I have heard some of the same things from small 

Internet providers in my district. They are feeling like they are 

going to be overwhelmed by this, and so I am meeting with some 

of them as well. 

I know Mr. Scalise is on his way here, the Whip of the House, 

so we will try to accommodate his questioning. 

Ms. ESHOO. Mr. Chairman, I am going to have to leave. I have 

to catch a flight, and I don’t know if that has an effect on—if I 

leave, can you keep the hearing open? 

Mr. WALDEN. We can seek counsel on that. But, obviously, we 

should try to accommodate the third ranking member of the—— 

Ms. ESHOO. No, I know, but I—— 

Mr. WALDEN [continuing]. Of our committee, who is on his way. 

Ms. ESHOO. We started at 11 o’clock, so, I mean, he could—— 

Mr. WALDEN. I—— 

Ms. ESHOO. He has had some time to get here. 

Mr. WALDEN. I understand. 

Ms. ESHOO. I am a patient person, but I don’t want to miss my 

flight, so—— 

Mr. WALDEN. What time is your flight? 

Ms. ESHOO. I have to go out to Dulles. 

Mr. WALDEN. So while we—— 

Ms. ESHOO. It doesn’t leave from the Rayburn horseshoe, unfortunately. 

Mr. WALDEN. So while he comes in the door here—we are now 

going to let him get settled, but, as he is—first of all, if I could ask 

all of the witnesses there will be some follow-up questions. Some 

of them you have all taken down. Because of the nature of our 

work, we would like to have prompt responses to the questions. I 

know you have probably had questions from other Committees as 

well, I get that, but the extent to which you can respond promptly, 

that would be helpful. Thank you, Anna. And we would like your 

feedback on the draft legislation that we put out there. All of your 

feedback would be most helpful. It is not a rush job. We are trying 

to get this right, and we think it is very important. 

So, with that, I would now recognize the gentleman from Louisiana, the Whip of the United States House of Representatives, allowing him to catch his breath fully, Mr. Scalise. 

Mr. SCALISE. Thank you, Mr. Chairman, and I tested my 40 

speed getting here, but I appreciate the Commissioners being here, 

coming to testify about their Commission, also about this net neutrality proposal that I know I have strong concerns about, and a 

113 

lot of my other colleagues have expressed real strong concerns 

about as well. 

I guess when you get back to the basic question of what has 

worked so well with the Internet, and the technology community as 

a whole, somebody who graduated in computer science, who has 

worked in the technology industry, I have always felt that the reason that the industry has been so successful is because the Federal 

government hadn’t figured out a way to regulate it, to slow it down. 

And then yet here you come with an answer to a problem that 

doesn’t exist, a heavy handed role of government, and the FCC’s 

traditional role has not been to have a heavy hand. 

And this, when you look at the proposal that has come out, my 

goodness, I mean, over 300 pages of regulations. And this is just 

the first round, before the proposal is even been put into effect. I 

guess anybody is looking for a free and Open Internet, I am sure 

they looked to the over 300 pages of regulations from the Federal 

Government to start that process. It is not broken. Why is the Federal Government here to fix something that has been working incredibly well? Especially when you look at the role of Federal regulations over the years, and just what they have done to harm our 

economy. 

I do want to ask you, Commissioner Pai, because you made some 

comments earlier about the potential taxes and fees that can come 

with this Title II classification, and when you look at Section 202 

of the law, it clearly gives that ability for the FCC to get involved 

in regulating costs for the Internet. And so if you could share with 

me just what kind of impact this can have on both fees being implemented, higher prices that consumers will ultimately pay from 

this new classification? 

Mr. PAI. Thank you for the question, Congressman. I think a 

multitude of fees and taxes are going to be levied on broadband in 

a way that is ultimately going down to the consumer’s detriment. 

Just to give you one example, now that broadband has been reclassified as a telecommunications service, that order explicitly opens 

the door to billions of taxes and fees being assessed through the 

Universal Service Fund. So now, in addition to that line item you 

see on your phone bill which only applies to your voice, the Universal Service Fee, you are going to be paying a fee on broadband, 

and that will happen, I would imagine, in the next several weeks 

or months. 

Secondly, and critically, there are all sorts of other fees that are 

going to be assessed. For example, currently a lot of broadband providers that had not been classified as telecom providers paid a 

lower rate for the equipment that they attached to the utility poles, 

known as pole attachments. They paid a rate under Section 224(d). 

Now, because they are all telecom providers, they will have to pay 

a much higher rate at Section 224(e), and smaller providers in particular will have to pay $150 to $200 million a year just for those 

higher pole attachment rates. Then you add on top of that the 

higher state and local property taxes that a lot of these companies 

will have to pay, because they are now telecom providers. All of 

these costs have to come out of somewhere, and it is going to be 

the consumer’s wallet, and that is one of the reasons why I am concerned. 

114 

Mr. SCALISE. Yes, and we have seen this time and time again, 

that these kind of regulations, and ultimately these new fees and 

taxes that would be paid are ultimately going to be paid by consumers, by people that have been enjoying the benefits of the investments that have been made by private companies. This isn’t 

the Federal Government investing. This is private investment, to 

the tune of billions of dollars. 

I will read you this quote, and maybe I will let you answer it. 

‘‘There is nothing worse for investment, innovation, job creation, all 

things that flow from investment, than businesses not knowing 

what the rules are.’’ You want to comment on that? 

Mr. PAI. I think that is, as I have pointed out many times, the 

bane of not just the private sector, but the consumer, to not know 

what is going to be allowed and what isn’t. And it is exactly in that 

environment where the private sector is the least likely to take the 

risk, to raise the capital, to build the infrastructure that is going 

to connect Americans with digital opportunities. 

And I believe, as you pointed out eloquently in your statement, 

that part of the reason why we enjoy the best Internet experience 

in the world is because we have had this historic bipartisan commitment, dating back to the Clinton Administration, that the Internet would be free from state and Federal regulation. 

Mr. SCALISE. That quote, by the way, was Chairman Wheeler at 

his confirmation hearing. I do want to ask you, Commissioner 

O’Rielly, because you commented on this order that it will negatively impact edge providers. Of course, many of the edge providers 

have been proponents of these net neutrality regulations, but you 

have raised some concerns about how even they would be negatively impacted, people that even asked for this. So if you could 

comment on that? 

Mr. O’RIELLY. Yes. A number of people have highlighted on this 

fact, is that the lines between an edge provider and a telecommunications provider under our new definition are blurring over time. 

And so today you may be an edge provider, tomorrow you may be 

something else. You may have multiple parts to your business, and 

that is problematic as you try to figure out how best to comply with 

our rules. 

More importantly, I believe that the Commission is going to continue to push its regulations up the chain. And so today is about 

telecommunications providers, and we talked about that under our 

new definition. And then we are going to, we now are having a debate in terms of—we are going to have some kind of structure to 

deal with interconnection, or the middle mile, what used to be 

known as peering. In my conversation, we are bleeding right into 

the backbone of the Internet, and I think that only leads us to edge 

providers over time. 

Mr. SCALISE. I see I am out of time, but I appreciate your answers, and hopefully this does go forward. But, with that, I yield 

back the balance of my time. 

Mr. WALDEN. Gentleman yields back, and now that I know the 

rules only require two members of either party to be here, we could 

go five or six more rounds. 

Mr. SCALISE. Let us go. I am sure they would love to stay around 

longer, and—— 

115 

Mr. O’RIELLY. Could we order in? 

Mr. WALDEN. I want to thank our witnesses. I know you have a 

tough job, and we may disagree, but we are all trying to do the 

right thing for the country, so thanks for testifying. Again, if you 

can promptly respond to our questions, that would be appreciated, 

and we look forward to your return visit in the not too distant future, we hope. So, with that, the committee stands adjourned. 

[Whereupon, at 2:15 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

Reauthorization of the Federal Communications Commission is long overdue as 

the agency was last reauthorized nearly a quarter of a century ago. A lot has 

changed over the last 25 years, and reauthorization provides an important opportunity to refocus the commission for the innovation era on its core purpose and responsibility to administer the policies set by Congress for the American people. I intend to see that we deliver. 

The commission has an obligation to conduct its business in the open and in accordance with the law in the public’s interest. The FCC’s recent Open Internet proceeding, however, has been plagued by process failures. Very few people understood 

the extent of the FCC’s new rules regulating the Internet until they were actually 

showcased by the FCC. And if press reports are accurate, nearly all of those who 

were looped in work at the White House. Impacted parties must be given the opportunity to review and understand the regulations the FCC proposes before they are 

adopted. That didn’t happen here. Worse still, this is not the only proceeding that 

has raised questions of the FCC’s process integrity. 

In addition to the lack of transparency, I fear that the FCC has neglected other 

duties in favor of moving a politically motivated net neutrality decision. At last 

year’s oversight hearing, I expressed my concern at the delay in completing the 2010 

Quadrennial Review of Media Ownership rules. To date, the commission still has 

not done the statutorily mandated work and unfortunately, there are many more 

proceedings languishing at the FCC. 

This reauthorization process also provides the opportunity to clarify the commission’s jurisdiction. Of late, the FCC seems to be intent on expanding its authority 

to be the regulator of all things privacy. This is not the commission’s role. Rather, 

it shares responsibility for privacy with the Federal Trade Commission. But the 

FCC’s recent decision to reclassify broadband has taken broadband providers out of 

the FTC’s jurisdiction. As we heard from the FTC at yesterday’s hearing on data 

breach, this action has made consumers less safe. 

The American people and our nation’s economy deserve better and the commission 

has a lot of highly technical work ahead. These complex and difficult issues will require the best efforts of us all. I hope that we can work together to bring back an 

effective, transparent, and apolitical government agency that produces fair outcomes 

and good policy. Let’s get the train back on the tracks. 

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