U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Publishing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

94–494 2016

PROTECTING THE INTERNET AND CONSUMERS 

THROUGH CONGRESSIONAL ACTION 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMUNICATIONS AND 

TECHNOLOGY 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

JANUARY 21, 2015 

Serial No. 114–1 

( 

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 ................................................................................................ 1 

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

Hon. Anna G. Eshoo, a Representative in Congress from the State of California, opening statement .................................................................................... 4 

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

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

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

Hon. Frank Pallone, Jr., a Representative in Congress from the State of 

New Jersey, opening statement .......................................................................... 9 

Hon. Steve Scalise, a Representative in Congress from the State of Louisiana, 

opening statement ................................................................................................ 130 

WITNESSES

Michael Powell, President and CEO, National Cable & Telecommunications 

Association ............................................................................................................ 11 

Prepared statement .......................................................................................... 14 

Chad Dickerson, CEO, Etsy .................................................................................... 22 

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

Paul Misener, Vice President of Global Public Policy, Amazon.com ................... 27 

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

Jessica Gonzalez, Executive Vice President and General Counsel, National 

Hispanic Media Coalition .................................................................................... 38 

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

Nicol Turner-Lee, Vice President and Chief Research and Policy Officer, Minority Media and Telecommunications Council ................................................. 63 

Prepared statement 1 ........................................................................................ 66 

Meredith Attwell Baker, President and CEO, CTIA—The Wireless Association ........................................................................................................................ 80

Prepared statement 2 ........................................................................................ 82 

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

SUBMITTED MATERIAL

Statement of Mayors of San Francisco, CA and New York, NY, submitted 

by Ms. Eshoo ........................................................................................................ 131 

Statement of the National Association of Realtors, submitted by Ms. Eshoo .... 133 

Statements on racial justice from various organizations, 3 submitted by Ms. 

Eshoo ..................................................................................................................... 94 

Article entitled, ‘‘Comcast, Charter and Time Warner Cable all say Obama’s 

net neutrality plan shouldn’t worry investors,’’ December 16, 2014, the 

Washington Post, submitted by Mr. Doyle ........................................................ 135 

Letter of January 15, 2015, from Sprint to the Federal Communications 

Commission, submitted by Mr. Doyle ................................................................. 138 

Article entitled, ‘‘Verizon: Actually, strong net neutrality rules won’t affect 

our network investment,’’ December 10, 2014, the Washington Post, submitted by Mr. Doyle ............................................................................................. 140 

Letter of November 14, 2014, from wireless companies to the Federal Communications Commission, submitted by Mr. Walden ............................................. 142 

Verizon Policy Blog post entitled ‘‘The Relationship Between Investment and 

Deregulation,’’ December 11, 2014, submitted by Mr. Walden ........................ 144 

Letters and op-eds on net neutrality, submitted by Mr. Walden ........................ 146 

Page

VI 

Statement of the Internet Association, submitted by Mr. Loebsack ................... 162 

1 The attachments to Ms. Turner-Lee’s testimony are available at http:// 

docs.house.gov/meetings/if/if16/20150121/102832/hhrg-114-if16-wstateturner-leen-20150121-u2.pdf. 2 The attachments to Ms. Baker’s testimony are available at http:// 

docs.house.gov/meetings/if/if16/20150121/102832/hhrg-114-if16-wstatebakerm-20150121-u1.pdf. 3 The information is available at http://docs.house.gov/meetings/if/if16/ 

20150121/102832/hhrg-114-if16-20150121-sd009.pdf. 

(1) 

PROTECTING THE INTERNET AND 

CONSUMERS THROUGH CONGRESSIONAL 

ACTION 

WEDNESDAY, JANUARY 21, 2015 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 10:05 a.m., in room 

2123, Rayburn House Office Building, Hon. Greg Walden (chairman of the subcommittee) presiding. 

Present: Representatives Walden, Latta, Barton, Shimkus, 

Blackburn, Lance, Guthrie, Olson, Pompeo, Kinszinger, Bilirakis, 

Johnson, Long, Ellmers, Collins, Cramer, Upton (ex oficio), Eshoo, 

Doyle, Welch, Yarmuth, Clarke, Loebsack, Rush, DeGette, 

Butterfield, Matsui, McNerney, Lujan, and Pallone (ex officio). 

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

Policy Advisor/Director of Coalitions; Sean Bonyun, Communications Director; Leighton Brown, Press Assistant; Rebecca Card, 

Staff Assistant; Karen Christian, General Counsel; Andy 

Duberstein, Deputy Press Secretary; Gene Fullano, Detailee, 

Telecom; Kelsey Guyselmann, Counsel, Telecom; Grace Koh, Counsel, Telecom; Tim Pataki, Professional Staff Member; David Redl, 

Counsel, Telecom; Charlotte Savercool, Legislative Clerk; Macey 

Sevcik, Press Assistant; David Goldman, Minority Chief Counsel 

for Communications and Technology Subcommittee; Margaret 

McCarthy, Minority Professional Staff Member; and Ryan 

Skukowski, Minority Legislative Assistant. 

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

Mr. WALDEN. I will call to order the subcommittee on Communications and Technology. 

Good morning and welcome to our subcommittee’s first hearing 

for the 114th Congress. I can think of no issue within our jurisdiction that is more important to consider at this time than the future 

of the Internet and our responsibility as legislators to set Internet 

policy for the country. That is why we put forward draft legislation 

to provide consumers the protections they deserve while not choking off investment and innovation. 

We have shared this draft with my colleagues on both sides of 

the aisle. We have made it available publicly and we have invited 

2 

our witnesses today to give us their views on this draft proposal, 

and I thank all of our witnesses for their participation. 

We have a very important choice to make between letting three 

very smart and capable, but unelected people at the FCC, a majority of the commission, use a statute written for another era to cobble together a regulatory scheme and undoubtedly will end up in 

court for years in litigation, providing no protections but much uncertainty. Or, we can do our job and craft a new law for this century through the open and transparent legislative process that we 

are beginning today. 

We have come together before in this subcommittee and full committee to craft communications legislation that, frankly, is now 

pretty good law, and we must do it again. It is the only way to 

bring clarity and certainty to Internet governance. 

Now, a little less than 4 years ago the FCC was in court defending its first attempt to regulate the network management practices 

of an ISP. Since then, the commissionhas gone to court twice in defense of net neutrality and twice the courts have rejected the FCC’s 

rules. While the court seems to have given FCC lawyers a third 

time is the charm roadmap for how to craft rules under the current 

act, the commission is preparing to invoke net neutrality’s nuclear 

option: Reclassification under the set of aging and inept rules developed for 19th century railroads and then adapted for the age of 

the monopoly, telephone. 

We don’t have to settle for that. We have a duty to those who 

use the Internet, those who manage the Internet, and those who 

build the Internet to provide legal certainty, consumer protection, 

and clarity for investment. What we are offering today is a solution 

that will bring to an end the loop of litigation and legal gymnastics 

that has flowed from FCC attempts to shoehorn the policy it wants 

to fit the authority that it has. 

Our discussion draft is largely based on the 2010 Open Internet 

Order, adopted by former FCC chairman Julius Genachowski, and 

it draws from the legislative proposal put forward by former Energy and Commerce Committee Chairman Henry Waxman. 

Now, some pundits have raised concerns that the draft bill curtails the newfound authority that the courts have read into Section 

706 of the Telecommunications Act. 706 was added in 1996, and it 

instructs the FCC to promote the deployment of broadband networks. Until recently, it was understood that Section 706 meant 

that the FCC should use its existing authority to promote 

broadband deployment, and it worked. 

However, last year the courts for the first time interpreted Section 706 to permit the FCC to take nearly any, and I underscore 

any, action to promote broadband so long as it is not inconsistent 

with the rest of the act. Did you catch that? It gives them nearly 

any authority at the FCC. This is a broad expansion of what was 

intended under 706. 

Now, while some take comfort that it is a limited majority at the 

FCC will do what they want, I just pose the question: What happens when an FCC not to their liking grabs the regulatory throttle? 

Let me put a finer point on this. That means that Amazon, Etsy, 

and every other Internet-based company should be prepared to 

meet its new regulator. If you would like an idea of what you are 

3 

in for, just look no further than your fellow witnesses, Mr. Powell 

and Ms. Baker, former regulators who currently represent the regulated. It is time to update this law. It is time for a fresh approach 

from we who are elected to write the law and to set the Nation’s 

communications policy. 

My priority is to protect consumers and the Internet we all rely 

upon. My priority is to encourage its expansion to the hills and valleys of our vast Nation that lack connectivity and to various segments of our population that are underserved and are too often ignored. Together we have taken on complicated communications 

challenges and produced good legislative solutions. We have stood 

up to powerful special interests and stood with the American people, and we must do so again. 

The draft legislative proposal represents our good-faith effort to 

end the net neutrality debate before it goes to court again. Our 

committee will not ignore our responsibility. As some of my colleagues know, we have been working on the principles and draft 

legislation literally for months. We have listened to supporters, opponents, and neutral parties too. We will take the advice and counsel from our witnesses today into full consideration, and then we 

won’t let the old Washington gridlock stand in the way of us doing 

our job, for the voters demand it and they deserve it. 

[The prepared statement of Mr. Walden follows:] 

PREPARED STATEMENT OF HON. GREG WALDEN

Welcome to our subcommittee’s first hearing of the 114th Congress. I can think 

of no issue within our jurisdiction that is more important to consider at this time 

than the future of the Internet and our responsibility as legislators to set Internet 

policy for the country. That’s why we’ve put forward draft legislation to provide consumers the protections they deserve while not choking off investment and innovation. We have shared this draft with my colleagues on both sides of the aisle, we’ve 

made it available publicly, and we have invited our witnesses today to give us their 

views on this draft proposal. 

We have a very important choice to make between letting three very smart and 

capable, but unelected people at the FCC use a statute written for another era to 

cobble together a regulatory scheme that undoubtedly will end up in years of costly 

litigation, providing no protections but much uncertainty, or we can do our job and 

craft a new law for this century through the open and transparent legislative process that we are beginning today. 

We have come together before in this committee to craft communications legislation that is now good law, and we must do so again. It is the only way to bring 

clarity and certainty to Internet governance. 

A little less than four years ago, the FCC was in court defending its first attempt 

to regulate the network management practices of an ISP. Since then, the commission has gone to court twice in defense of net neutrality. And twice, the courts have 

rejected the FCC’s rules. While the court seems to have given FCC lawyers a ‘‘third 

time’s the charm’’ roadmap for how to craft rules under the current act, the commission is preparing to invoke net neutrality’s ‘‘nuclear option’’—reclassification under 

the set of aging and inapt rules developed for 19th century railroads and adapted 

for the age of the monopoly telephone. We don’t have to settle for that. 

We have a duty to those who use the Internet, those who manage the Internet 

and those who build the Internet to provide legal certainty, consumer protection and 

clarity for investment. What we are offering today is a solution that will bring to 

an end the loop of litigation and legal gymnastics that has flowed from FCC attempts to shoehorn the policy it wants to fit the authority that it has. 

Our discussion draft is largely based on the 2010 Open Internet Order, adopted 

by former FCC Chairman Julius Genachowski and draws from the legislative proposal put forward by former Energy and Commerce Committee Chairman Henry 

Waxman. 

Some pundits have raised concerns that this draft bill curtails the new-found authority that the courts have read into Section 706 of the Telecommunications Act. 

4 

Section 706 was added in 1996 and instructs the FCC to promote the deployment 

of broadband networks. Until recently, it was understood that Section 706 meant 

that the FCC should use its existing authority to promote broadband deployment. 

And it worked. However, last year the courts for the first time interpreted Section 

706 to permit the FCC to take nearly any action to promote broadband, so long as 

it isn’t inconsistent with the rest of the Act. Did you catch that? Nearly any action. 

While some take comfort that a slim majority of this FCC will do as they want, 

what happens when an FCC not of their liking grabs the regulatory throttle? Let 

me put a finer point on this: that means that Amazon, Etsy, and every other Internet-based company should be prepared to meet its new regulator. If you’d like an 

idea of what you’re in for, look no further than your fellow witnesses Mr. Powell 

and Ms. Baker, former regulators who currently represent the regulated. 

It’s time to update this law. It’s time for a fresh approach from we who are elected 

to write the law and set the nation’s policy. My priority is to protect consumers and 

the Internet we all rely on. My priority is to encourage its expansion to the hills 

and valleys of our vast nation that lack connectivity, and to various segments of our 

population that are underserved and too often ignored. 

Together, we have taken on complicated communications challenges and produced 

good legislative solutions. We’ve stood up to powerful special interests and stood 

with the American people. We must do so again. 

This draft legislative proposal represents our good faith effort to end the net neutrality debate before it goes to court again. Our committee will not ignore our responsibility. As some of my colleagues know, we’ve been working on the principles 

and draft legislation for months. We have listened to supporters, opponents and 

neutral parties, too. We will take the advice and counsel of our witnesses today into 

full consideration. And then we won’t let the old Washington gridlock stand in the 

way of us doing the job our voters demand and deserve. 

Mr. WALDEN. And with that I recognize the gentlelady from California, the ranking member of the subcommittee, Ms. Eshoo, for 

her opening statement. 

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

Ms. ESHOO. Thank you, Mr. Chairman. 

Today’s hearing renews a critical discussion in the new Congress 

about the Internet. Should it be truly open and equal? Should consumers, competition, and choice drive our deliberations? Should 

privacy and the disabled be protected? Should every region, city, 

town, and reservation, be they rural or urban, have equal access 

to broadband speeds capable of leveraging innovative online content and services? 

I have reviewed the majority’s proposal very carefully, and I commend you for finally acknowledging that we do in fact have problems with online blocking, throttling and paid prioritization. We 

agree that bright-line rules should apply to both fixed and mobile 

broadband services. 

What is abundantly clear in the majority’s proposal is to purposely tie the hands of the FCC by prohibiting them from reclassifying broadband under Title II. The proposal creates a huge loophole called specialized services. On the one hand, the proposal says 

it will prohibit fast lanes, but under specialized services, a loosely 

defined term, broadband providers can give themselves prioritized 

service and the FCC will have no power to define this. 

If our goal is to have a system that guarantees equal access of 

an open Internet to everyone, and it should, who is going to carry 

out and oversee this? 

This proposal carries an enormous bias against enforcement, 

which in turn doesn’t give consumers a leg to stand on. 

5 

The proposal does harm to the efforts made to bring broadband 

to rural areas. It could unintentionally harm the 911 system, limit 

the FCC’s authority to promote access by the disabled to communication services, and it could restrict access by competitors to utility poles. 

The proposal also attempts to address specific forms of discrimination, but who today knows with any certainty what tomorrow’s 

forms of discrimination will be. The proposal takes away the authority of the FCC to address them. I don’t think your constituents 

or mine are clamoring for a bill of rights for various companies. 

They want the guarantee of an open accessible Internet. Four million people spoke out to the FCC, and I think our goal should 

match theirs. We should protect ordinary consumers, promote innovation, create real competition, and advance start-ups, and when 

we do, our constituents should be 100 percent confident that these 

things are going to be carried out, that there is going to be a cop 

on the beat. 

An open Internet is not only critical to America’s future, it is essential for every American to learn, to educate, to conduct commerce, to build businesses and create jobs, to innovate, to expand 

our economy, and to promote democracy. It will strengthen the 

middle class and it will bring more into it. 

What paths we take will determine much of our future. In an attempt to eliminate bad practices, we should not be tempted to establish rules that will create new bad practices. I think that this 

would be a march to folly. 

Mr. WALDEN. The gentlelady yield back the balance of her time? 

Ms. ESHOO. The balance of my time I yield to Mr. Doyle. I am 

sorry. 

Mr. WALDEN. Mr. Doyle is recognized. 

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

This draft legislation represents a step forward by my colleagues. 

That being said, the bill still falls short. It permanently revokes 

and severely weakens the Commission’s ability to address serious 

issues in promoting broadband competition, encouraging broadband 

deployment, and protecting consumers and their privacy. 

Mr. Chairman, technology policy needs to be flexible, not proscriptive. It needs to be adaptive and able to change to meet our 

future needs. 

The principles included in the draft bill are very similar to what 

the FCC proposed in its 2010 rules, but since then we have seen 

battles between Netflix and ISPs over interconnection, renewed efforts by cities to build out their own broadband infrastructure and 

create jobs, and a continuing need for strong consumer protection. 

The last 5 years have been a lifetime in the technology world, 

and we need rules that can adapt to the pace of innovation and the 

new challenges that it brings. 

I yield back. 

Mr. WALDEN. Gentleman yields back the balance of the time. 

And we will now go to the chairman of the full committee, the 

gentleman from Michigan, Mr. Upton. 

6 

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

Mr. UPTON. Thank you, Mr. Chairman. 

You know, this committee is known for working together to tackle the tough issues; a tradition of getting the job done where each 

side gives a little bit in order to make things better for the American public. 

But one issue that has divided us for too long is how best to ensure an open Internet rooted in bedrock principles of freedom and 

access for consumers and innovators alike. 

While I certainly believe that free markets address these issues, 

the FCC seems to believe regulatory action is necessary, and one 

of the only tools at its disposal is to apply rules from the Roosevelt 

era to shape the Internet of the 21st Century. 

Given the choice between enacting prudent legislation or leaving 

the FCC to tackle this with tools unfit for the task, we choose to 

take action. 

Last week Chairman Walden, Thune and I put forward draft legislation that would codify FCC’s authority to enforce the bright-line 

rules of the Internet road. Legislation protects consumers and 

innovators, ensuring America remains the preeminent global leader 

of the Internet era. Our proposal prohibits Internet service providers from blocking content, selectively changing the quality of 

traffic based on where it came from or what it is or prioritizing certain traffic based on payment. 

It requires providers to be open and transparent with consumers, 

allowing them to make the most informed choice about their service. 

We have also included safeguards to close potential loopholes and 

prevent mischief. This should all sound very familiar to my Democratic colleagues because they are the rules many of you and the 

President have been calling for for some time. 

The FCC has spent years trying to craft rules that achieve those 

same goals. In fact, much of this bill’s language is taken from past 

FCC attempts, but limits on the commission’s authority have resulted in years, many years, of litigation and certainly uncertainty. 

Consumers and industry deserve better. Consumers deserve certainty to know that they are protected by clear rules. Providers 

need certainty so that they can move forward with their business 

models, because without that certainty, innovation and investment 

suffer and consumers lose. 

Our thoughtful solution provides a path forward that doesn’t involve the endless threat of litigation or the baggage of laws created 

for a monopoly era telephone service. Only Congress can give the 

commission the tools that it needs to protect consumers and innovation in the Internet era and beyond. 

This draft legislation provides a sustainable, responsible path to 

appropriately and effectively address the concerns from the left and 

the right. It puts to bed one of the most contentious issues that we 

face and allows us to move forward in our goal of modernizing the 

Nation’s communication laws. 

Our Comm Act update process can bring bipartisan change, direct communication laws, but we first have to come together and 

resolve this near-decade-long debate over the future of the Internet. 

7 

Yield the balance of my time to Mr. Barton. 

[The prepared statement of Mr. Upton follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

This committee is known for working together to tackle the tough issues. A tradition of getting the job done, where each side gives a little in order to make things 

better for the American public. But one issue that has divided us for too long is how 

best to ensure an open Internet rooted in bedrock principles of freedom and access 

for consumers and innovators alike. 

While I believe free markets address these issues, the FCC seems to believe regulatory action is necessary, and one of the only tools at its disposal is to apply rules 

from the Roosevelt era to shape the Internet of the 21st century. Given the choice 

between enacting prudent legislation or leaving the FCC to tackle this with tools 

unfit for the task, we choose to take action. 

Last week, Chairmen Walden, Thune, and I put forward draft legislation that 

would codify FCC authority to enforce the bright-line rules of the Internet road. 

This legislation protects consumers and innovators, ensuring America remains the 

preeminent global leader of the Internet era. Our proposal prohibits Internet service 

providers from blocking content, selectively changing the quality of traffic based on 

where it came from or what it is, or prioritizing certain traffic based on payment. 

It requires providers to be open and transparent with consumers, allowing them to 

make the most informed choice about their service. We’ve also included safeguards 

to close potential loopholes and prevent mischief. This should all sound very familiar 

to my Democratic colleagues: these are the rules many of you and the president 

have been calling for. 

The FCC has spent years trying to craft rules that achieve these same goals. In 

fact, much of this bill’s language is taken from past FCC attempts. But limits on 

the commission’s authority have resulted in years of litigation and uncertainty. 

Consumers and industry deserve better. Consumers deserve certainty to know 

that they are protected by clear rules. Providers need certainty so they can move 

forward with their business models. Without this certainty, innovation and investment suffer, and consumers lose. 

Our thoughtful solution provides a path forward that doesn’t involve the endless 

threat of litigation or the baggage of laws created for monopoly-era telephone service. Only Congress can give the commission the tools it needs to protect consumers 

and innovation in the Internet era and beyond. 

The draft legislation provides a sustainable, responsible path to appropriately and 

effectively address the concerns from left and right. It puts to bed one of the more 

contentious issues we face and allows us to move forward in our goal of modernizing 

the nation’s communications laws. Our CommActUpdate process can bring about bipartisan change to our communications laws, but we must first come together and 

resolve this near decade-long debate over the future of the Internet. 

I thank our witnesses for their testimony today and look forward to advancing 

this legislation. 

Mr. UPTON. Yield the balance of my time to Mr. Barton. 

Mr. BARTON. Thank you. I thank the chairman. 

I was heartened by some of the comments that Mr. Doyle made 

in his remarks. 

Last night after the President’s State of the Union, I came back 

to my office and did a little video that we put on my FaceBook 

page, we put on YouTube. I believe we put it on Twitter. I have 

a 9-year-old son that has an iPad, an iPod, an Xbox, a PlayStation 

4, his own cell phone, knows how to use the Internet better than 

I do. He is spoiled. Well, that is his mother. That is his mother. 

She has bought him all these things, actually. 

No. That is not true, but, anyway, my point is, to paraphrase 

President Reagan, in his first campaign in 1980, he asked the 

American people: Are you better off today than you were 4 years 

ago? When you look at the Internet, I think you could ask the consumers: Are you better off today than you were 4 years ago? And 

the answer would be: Yes. They are. I see advertisements every 

8 

day. There is one playing down in Texas right now. Give me your 

bill, we will cut it in half. You know? I am not going to name who 

is offering that, but you all would know it if I said it. 

The Internet is not a monopoly like the telephone companies 

were or the utilities were in the 1930s. It is one of the most vibrant 

markets in the world. The chairman’s draft is an attempt to keep 

it that vibrant marketplace. Some of the people that are at this 

table helped develop the policies that make that possible. We 

should support the chairman, work with the minority and try to 

come up with a bill that keeps it a vibrant market. 

And I don’t have any time, but I am supposed to yield to Mr. 

Latta. So if the chairman would give him at least a minute, I 

would ask unanimous consent that Mr. Latta has a minute. 

Mr. WALDEN. Is there any objection? If not, we will recognize Mr. 

Latta for a minute out of courtesy. 

Mr. LATTA. Well, thank you, very much. 

And thank you, Mr. Barton, and thank you, Mr. Chairman. I appreciate that, and thanks to our witnesses for being here today. 

The FCC has indicated it intends to soon move forward with an 

order to reclassify broadband Internet services under Title II of the 

Communications Act. I firmly believe that this course of action will 

bring legal uncertainty, slow innovation and investment, and ultimately negatively affect the American consumers. 

Even those who support reclassification recognize these challenges, but would attempt to circumvent these limits by forbearing 

sections of the law, a plan that would only seem to magnify legal 

uncertainty and further postpone innovation. 

It is evident that upending the longstanding precedent of a lighttouch regulatory framework that governs the Internet would add 

unnecessary regulation on broadband providers and would restrict 

their ability to continue investing in faster networks that consumers demand. That is why I support the discussion draft put forward by the chairman and Chairman Thune in the Senate. 

And with that, Mr. Chairman, I appreciate the unanimous consent. 

Mr. WALDEN. And the gentleman returns the balance of his time. 

Before I proceed to Mr. Pallone, who I believe this is your first 

hearing in Energy and Commerce as the ranking member of the 

full committee. So we welcome you for that. 

We will add, with unanimous consent, an extra minute to your 

side of the aisle, and I have been told too that apparently during 

the open statements the mics literally on this side were—they 

could hear it streaming on the Internet. Apparently not on your 

side. So I think we have got that corrected now. It was an attempt 

to throttle Mr. Doyle. It was not supposed to catch Anna along the 

way, but, anyway, I think we are operating on that. 

Mr. DOYLE. I think this has something to do with the deflated 

footballs, Mr. Chairman. 

Mr. WALDEN. That Ohio State—no. I am not going there. It has 

been painful enough. I appreciate the green room. 

All right. With that, we will get serious again, and I recognize 

the gentleman from New Jersey for 6 minutes. 

9 

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. PALLONE. Thank you, Mr. Chairman. 

Let me start by stressing the importance of network neutrality. 

It is the surprisingly simple concept that consumers, not big corporate interests, should control what they access when they go online, and it represents the idea that small businesses should be 

able to compete on a level playing field. 

Internet access has become a critical part of all of our lives. It 

is how we apply for a job. It is how we help our kids with our 

homework. It is how we grow our businesses. And that is why 4 

million Americans reached out to the FCC demanding strong net 

neutrality protections, and those 4 million people expect that we 

here in Washington will pay attention. 

So I am heartened that my Republican colleagues now agree that 

we all benefit from clear rules of the road enforced by the FCC, and 

I welcome their interest in bipartisan legislation so long as it is 

truly bipartisan from the start. 

Mr. Chairman, I don’t want to undermine the FCC’s authority, 

as I think you suggested, and I certainly don’t think that that will 

serve to protect consumers. The FCC must continue to serve an important role in the broadband age. It must remain the vigilant cop 

on the beat standing ready to act, whether it is to protect consumer 

privacy, to encourage accessibility for American’s with disabilities, 

or to promote broadband deployment to rural areas. And just as 

important, it must maintain the flexibility to keep up with new 

technology. 

So while we in Congress continue our work, I do expect the FCC 

to continue its work. These are complicated issues with complex 

answers. It has taken the FCC nearly 13 months to craft new rules 

that respond to the needs of the American public, and Congress 

cannot be expected to work it all out in 13 days. 

So I urge the FCC to continue to move forward as we begin this 

legislative effort. It has been over a year since the court wiped out 

the core net neutrality rules. So it has been over a year since consumers and innovators last had strong network neutrality protections, and that is simply too long. The time for the FCC to act is 

certainly now. 

I look forward to working with my colleagues and with the commission to ensure that the Internet remains an open platform for 

commerce, innovation, and self-expression for generations to come. 

Now I would like to yield—I know I got an extra minute—so I 

would like to yield 2 minutes to Ms. Matsui, and then the rest of 

the time, which is almost 2 minutes, to Mr. Rush. 

Ms. MATSUI. Thank you. 

I thank the ranking member for yielding me time, the chair for 

holding this hearing, and the witnesses for being here today. 

The American people have spoken clearly on how important the 

Internet is to daily lives and our economy, and I have personally 

heard from hundreds of my constituents who write, call, or come 

up to me to share their thoughts, and I heard the message loud 

and clear when I hosted a field hearing in Sacramento last September on net neutrality. 

10 

I must say, it is remarkable how the debate has shifted on net 

neutrality. I am really glad that my Republican colleagues now 

agree that there are real threats to Internet openness, but I am 

concerned about the unintended consequences of the current draft 

bill. In particular, it could undermine the FCC’s efforts to transition USF to broadband, putting at risk broadband deployment and 

adoption advances in urban and rural areas. 

That said, I do believe that there is a role for Congress, and that 

is why I introduced a bill with Senator Leahy to instruct the FCC 

to write rules that ban pay prioritization or so-called Internet fast 

lanes. The bill has two components. It bans paid prioritization 

agreements, and it does not take away from the commission’s authority. 

By contrast, the Republican bill attempts to ban paid 

prioritization agreements. I am very concerned that the overly 

broad definition of specialized services in the bill could serve as a 

loophole for paid prioritization schemes and create a two-tiered 

Internet system. 

The Internet is dynamic. We don’t know what tomorrow will 

bring us. The FCC needs flexibility to tailor rules to adapt to 

changes in the marketplace. 

As Congress considers legislation, it is important that the FCC 

does not slow down or delay its vote. 

I look forward to continuing to work with my colleagues in a 

truly bipartisan fashion to reinstate strong net neutrality rules. 

And I yield to Congressman Rush. 

Mr. RUSH. I want to thank the gentlelady for yielding. 

I want to thank the ranking member for yielding also. 

For two decades now, the beltway battle over how to best ensure 

a free and open Internet has been fought and persisted without a 

clear victor or a clear verdict. All of this uncertainty harms America’s broadband consumers, chronically and disproportionately disconnected segments of our society and our local and State and Federal Governments, and even our Nation’s economy. Certainly it also 

affects broadband network and edge providers as well, but make no 

mistake about it. It is the consumers who stand to be the biggest 

losers of all. 

Many consumers weighed in with Congress for the strongest proconsumer rules possible. These broadband consumers and users 

have said that they love and depend greatly on their broadband 

services, and that they want for their services to be provided on a 

competitive level, competitive rates, and competitive terms. But 

they also said to Washington, to us here in Washington, with passion and with fervor that they do not trust that their broadband 

providers will honor those terms due to selfish and anti-competitive 

motives. 

This, Mr. Chairman, should serve as a powerful reminder to us 

that the issues arising out of this controversy are propelled by bipartisan concerns and are amenable to bipartisan resolution and 

compromise. These issues greatly concern all broadband consumers 

and citizens in our society regardless of political affiliation or leaning. 

We have all seen and heard, however, that this matter is too important for this committee and for Congress to stand by or for it 

11 

to consider and mark up only a majority Republican draft. Accordingly, Mr. Chairman, it is my intention to introduce open Internet 

legislation in the not-too-distant future. 

I would hope to work with my colleagues on both sides of the 

aisle with aspiration that whatever legislation is hammered out, 

that it will be clearly surely nothing but bipartisan. 

Mr. Chairman and Ranking Member Pallone, I yield back. 

Mr. WALDEN. Gentleman yields backs the balance of the time, 

and that takes care of our colleagues for opening statements. 

We now go to our distinguished panel of witnesses. 

And we are going to start out with Michael Powell, president and 

CEO, National Cable & Telecommunications Association and 

former chairman of the Federal Communications Commission, and, 

Mr. Powell, we are delighted to have you back before our subcommittee, and we look forward to your testimony. 

Please go ahead. 

STATEMENTS OF MICHAEL POWELL, PRESIDENT AND CEO, 

NATIONAL CABLE & TELECOMMUNICATIONS ASSOCIATION; 

CHAD DICKERSON, CEO, ETSY; PAUL MISENER, VICE PRESIDENT OF GLOBAL PUBLIC POLICY, AMAZON.COM; JESSICA 

GONZALEZ, EXECUTIVE VICE PRESIDENT AND GENERAL 

COUNSEL, NATIONAL HISPANIC MEDIA COALITION; NICOL 

TURNER-LEE, VICE PRESIDENT AND CHIEF RESEARCH AND 

POLICY OFFICER, MINORITY MEDIA AND TELECOMMUNICATIONS COUNCIL; AND MEREDITH ATTWELL BAKER, 

PRESIDENT AND CEO, CTIA—THE WIRELESS ASSOCIATION 

STATEMENT OF MICHAEL POWELL 

Mr. POWELL. Particular welcome to the new members of the committee. Nothing like starting with something easy. 

It is a fundamental constitutional principle that Congress establishes the law and federal agencies implement it. The net neutrality debate raises critical institutional policy and practical problems that only Congress can fully address. 

The open Internet struggle has been long and tortuous precisely 

because Congress has not established a clear foundation for the 

FCC to act. The commission has turned itself in knots for over 10 

years trying to adopt a simple set of Internet regulations. Twice, 

the courts have rebuked the commission for exceeding its Congressional tether, even where it found merit in the rules themselves. 

If Congressional authority is the problem, then surely Congressional action is the solution. In the absence of such action, the commission is poised to earnestly try again with another approach, 

prompting a third round of litigation with an uncertain outcome. 

Congress has the power and the responsibility to end this roller 

coaster, which is damaging to everyone other than lawyers and advocates. 

It should further concern this institution that the Title II approach being pursued is establishing an FCC role and regulatory 

framework over the Internet that Congress has yet to fully consider 

and consciously adopt itself. 

Congress adopted Title II 80 years ago to address the parameters 

of telephone regulation. The technologies were radically different. 

12 

The prevailing philosophy favored monopoly rather than competition. Consumers were passive recipients of service rather than active publishers and creators. The telephone era did not have giant 

Internet companies using and influencing services and network demand and consumer applications. Networks were specialized for a 

single purpose, unlike the convergence of today. 

Has Congress, or, for that matter, anyone, fully thought through 

whether this antiquated analog framework should govern our digital future? We have no doubt that Congress soon will seek to advance legislation to rewrite our telecom laws, but we stand now at 

the precipice of having that decision made for Congress rather than 

by Congress in the name of net neutrality, with potentially farreaching unintended consequences. Five unelected regulators 

should not have the final word on these serious questions. The institution that represents 320 million Americans should decide 

them. 

By changing the status quo and invoking Title II to govern Internet affairs, the commission would affect a major and dramatic shift 

in national broadband policy, with sweeping domestic and international consequences. Countries like Russia, China, and Iran have 

consistently sought to subject Internet access to telephone regulation and give the state greater authority over infrastructure. They 

will cheer the news the U.S. abandoned its leadership and moral 

authority as a bulwark against government-controlled over the 

Internet. 

The bevy of legal and practical problems with Title II counsel for 

Congressional intervention. For one, the strong desire to ban 

prioritization is precarious under Title II, which bans unjust and 

unreasonable practices. Under decades of Title II precedent, carriers have been able to charge for providing service without violating this requirement, and while the FCC surely will attempt to 

declare all priority charges unreasonable, it will face serious 

headwinds from well-established precedent. Only statutorily 

banned prioritization rules will avoid this risk. 

Other unintended problems are also sure to follow. One agency’s 

actions will narrow the jurisdiction of another. For example, if the 

FCC declares broadband is telecom service, the Federal Trade 

Commission’s authority over such actions will be diminished. 

Another unintended problem is the reclassification can result in 

new fees on Internet service, raising broadband bills for consumers 

and hurting our national efforts at adoption. 

America has an ambitious national broadband goal. There is a 

strong national desire to reach more Americans in more places. It 

will take nearly $350 billion by the FCC’s own estimate to reach 

all of Americans with 100 megabits per second, and now we dream 

of gigabit speeds. No one can consciously claim that Title II will advance the flow of private capital necessary to meet these ambitions. 

For some, Title II’s sharp edges can be smoothed by forbearance, 

cutting away the dated and choking weeds of onerous regulation 

and leaving the fruit needed to protect consumers, but one person’s 

weeds are another person’s fruit, and the continuous and vigorous 

battle over this, should it be included—and excluded, is itself a 

massive regulatory undertaking fraught with uncertainty and litigation risk. 

13 

Uniquely, Congress has the power to eliminate all of this legal 

uncertainty, and working together in good faith and consensus, we 

believe a cooperative effort will yield positive results. We support 

legislation—we support bipartisan legislation and are open to 

working with all members of the committee to reach a satisfactory 

resolution. 

Thank you, Mr. Chairman. 

Mr. WALDEN. Thank the gentleman for his testimony. 

[The prepared statement of Mr. Powell follows:] 

14 


94494.001
15 


94494.002
16 


94494.003
17 


94494.004
18 


94494.005
19 


94494.006
20 


94494.007
21 


94494.008
22 

Mr. WALDEN. We are now going to go to Mr. Chad Dickerson, the 

CEO of Etsy. 

Mr. Dickerson, we are delighted to have you before the committee. Please make sure your microphoneis on, and we look forward to your testimony, sir. 

STATEMENT OF CHAD DICKERSON 

Mr. DICKERSON. Great. Thank you. 

Thank you, Chairman Walden, Ranking Member Eshoo, and 

members of the subcommittee for the opportunity to testify on this 

important issue. 

As the CEO of a rapidly growing Internet company—technology 

company, I am here today because the Internet, along with the millions of businesses who depend on it, is under threat. 

Etsy is an online marketplace where you can buy handmade and 

vintage goods from artists, designers, and collectors around the 

world. We have democratized access to entrepreneurship for over 

1.2 million sellers, 88 percent of whom are women who collectively 

sold $1.35 billion worth of goods in 2013. Most are sole proprietors 

who work from home, they live in all 50 states, and they depend 

on Etsy income to pay their bills and support their families. Eighteen percent of those sellers support themselves full time on Etsy. 

To build and run the global platform that supports these Internet 

micro businesses, Etsy has raised more than $91 million in capital, 

and we employ over 600 people worldwide. Without the incredible 

power of the free and open Internet, we would not be where we are 

today. 

Like many start-ups, we had humble beginnings. We started out 

of a Brooklyn apartment; went from idea to launching in just a few 

months. No one had to ask permission to launch Etsy or pay for 

the privilege of reaching consumers through Etsy at the same 

speeds as other companies. We proved ourselves on the open market, and this is the entrepreneurial environment that we hope to 

preserve, like you. 

Without clear bright-line rules that preserve a level playing field 

online, millions of start-ups will suffer. Etsy is a low-margin business. We charge just 20 cents to list an item, and take only 3 1⁄2

percent of every transaction. We couldn’t afford to pay for priority 

access to consumers, yet we know that delays of even milliseconds 

have a direct and long-term impact on revenue. So this isn’t just 

about high bandwidth services like video, it is about every company 

that depends on the Internet to reach consumers. 

Without strong rules to prevent discrimination online, we would 

be either forced to raise our fees to have the same quality of services our competitors or accept the revenue loss that comes with delayed load times. This would hurt the micro businesses who depend 

on our platform the most. 

Etsy’s users understand what is at stake. That is why 30,000 of 

them join millions of Internet users to urge Congress and the FCC 

to protect the open Internet. 

In her comments to the FCC, Tina, an Etsy seller from Spring 

Valley, Illinois, captured the sentiments of many micro businesses 

when she wrote, ‘‘We rely on all my sales to make ends meet. Any 

23 

change in those and it is the difference between balanced meals for 

my children and cereal for dinner.’’ 

We applaud Congress for recognizing that strong net neutrality 

rules are essential for innovation online. The discussion draft for 

legislation addresses many of our concerns, and we are encouraged 

to see bipartisan agreement on many points. In particular, we support the outright ban on paid prioritization, blocking, and throttling. We agree that transparency must underpin strong rules, and 

we are encouraged to see that the rules would apply to mobile. 

Given that the majority of Etsy’s traffic now comes from mobile 

sources, it is essential that the same rules apply whether you use 

your phone or your laptop to access the Internet. 

At the same time, we are concerned that the proposal does not 

ban all types of discrimination online, leaving loopholes that could 

be easily exploited. For example, under this bill, broadband companies could prioritize their own services over others. Even more concerning, the legislation would remove the FCC’s authority to address new unanticipated types of discrimination. I have worked in 

this industry my whole adult life, and I know who quickly technologies change. So how can we be sure that this bill anticipates 

every possible form of discrimination? 

We also have serious concerns that by revoking the FCC’s authority under Section 706, the bill would undermine the agency’s 

ability to promote rapid broadband deployment across the country, 

particularly in rural areas where the Internet allows entrepreneurs 

to reach a global marketplace. For example, Linda, an Etsy seller 

from Buchanan, Michigan, said, ‘‘A free Internet is so important to 

me because as someone who moved to a rural area from an urban 

center, I rely on fair and open access to the Internet to grow my 

small Web-based business.’’ 

Finally, while we understand that this legislation is narrowly focused on the last mile connection, the door to that last mile is just 

as important. This bill doesn’t prevent broadband companies from 

creating choke points at the entrance to the last mile, nor does it 

grant the FCC the authority to regulate this issue, often referred 

to as interconnection, leaving a loophole that would allow 

broadband companies to circumvent this legislation, despite its 

good intentions. 

Our position today is the same as it has been all along. We encourage the government to establish clear bright-line rules that 

ban paid prioritization, application-specific discrimination, access 

fees, and blocking online, and to apply those rules equally to fixed 

and mobile broadband, and at the point of interconnection with 

last-mile providers. 

We believe the FCC has all the authority it needs to implement 

such rules, and that Congress has an important role to play as 

well, particularly in helping to address the litigation risks that will 

inevitably follow FCC action. 

We welcome the opportunity to work with you to protect the open 

Internet once and for all. 

Thank you. 

Mr. WALDEN. Mr. Dickerson, thank you very much for your testimony. 

[The prepared statement of Mr. Dickerson follows:] 

24 


94494.009
25 


94494.010
26 


94494.011
27 

Mr. WALDEN. We will now go to Paul Misener, who is vice president of Global Public Policy for Amazon.com, a slightly larger platform for sales. 

Mr. Misener, please go ahead. 

It is good to have you back before the subcommittee. 

STATEMENT OF PAUL MISENER 

Mr. MISENER. Thank you very much, Mr. Chairman. It is good 

to be back. 

Thank you, Ranking Member Eshoo, for your attention to this 

very important issue, for holding this hearing, and for inviting me 

back. 

Amazon has long supported maintaining the fundamental openness of the Internet which has been so beneficial to consumers and 

for innovation. Now there is widespread acceptance of the need for 

government action to ensure that Internet openness. Now policymakers need only decide how to ensure that the Internet openness 

of net neutrality is maintained and effective. 

At Amazon, our consistent business practice is to start with customers and work backwards. That is, we begin projects by determining what customers want and how we can innovate for them. 

Here, in the context of net neutrality public policy, we have done 

the same. We take our position from our customers’, that is consumers’, point of view. Consumers want to keep the fundamental 

openness of the Internet and the choice it provides. Consumers will 

recognize if their net neutrality is taken from them. If their net 

neutrality is taken, they won’t care how or, for example, where in 

the network infrastructure it is taken. 

We believe that the FCC has ample existing statutory authority 

to maintain net neutrality, but of course, obviously, Congress has 

the power to set new policies for net neutrality, either entirely 

through a new statute or through a mix of new and existing statutory authority. 

Amazon remains very grateful for Congress’ continuing attention 

to net neutrality. The topic certainly is worth your vigilant oversight, but thank you, Mr. Chairman, especially for creating and 

sharing your discussion draft bill, and for providing me the opportunity to begin discussing it today. 

The principles of net neutrality contained in the discussion draft 

are excellent. For example, the draft clearly acknowledges that 

throttling and paid prioritization must be banned; that net neutrality protections must apply to wireless as well as to wire line; 

and that providers must disclose their practices. 

Of course, for these excellent principles of Internet openness to 

be meaningful to consumers, they need to be effective. In at least 

three instances, however, the discussion draft could be interpreted 

to undermine that effectiveness. So the bill should be modified accordingly. 

First, in subsection (d), while requiring consumer choice, the bill 

would explicitly exempt specialized services from that requirement. 

This could create a huge loophole if, for example, specialized services involved the prioritization of some content in services, just like 

the proscribed paid prioritization. Consumer choice is baked into 

the Internet. Nothing would protect consumer choice more than 

28 

protecting the open Internet from interference by broadband and 

Internet access service providers. 

Second, in subsection (f), the discussion draft bill would permit 

broadband Internet access providers to engage in reasonable network management, but any claim of reasonable network management should be viewed suspiciously if in practice it undermines 

prohibitions of blocking, throttling, prioritization, et cetera. 

Third, the discussion draft bill is unclear or silent on an important point of clarification: Which parts of the broadband Internet 

access service providers network are covered by the net neutrality 

protections. 

As indicated earlier, a consumer will not care where in her service providers network any interference with net neutrality occurs, 

only whether it occurs. 

In sum, these three areas of the discussion draft bill should be 

modified in order to ensure that the Internet openness of net neutrality is maintained and effective. 

In addition, the discussion draft should be modified to provide 

adequate legal detail and certainty to consumers and businesses in 

the Internet ecosystem. Like all businesses, Internet companies 

need confidence in the state of law and regulation in order to innovate and invest in products and services on behalf of their customers. Details, including the factors that would be considered during formal complaint procedures are essential for businesses and 

consumers to have the confidence to make informed choices about 

investments and purchases. 

We believe that the FCC should be empowered to create adequate legal certainty and detail through effective enforcement tools 

and notice in comment rule making, but the discussion draft bill 

in subsection (b) says the FCC may not expand Internet openness 

obligations beyond the obligations established in the bill. If the intention here is to establish a ceiling for these obligations, that certainly is Congress’ prerogative and a reasonable expectation which 

we would support a provision like this if the bill only went so far. 

However, with such a ceiling in place, it is not necessary to rescind the FCC’s authority under Title II of the Communications 

Act, which, as in subsection (e), which could leave the agency helpless to address improper behavior as well within its authority 

under the ceiling and would leave consumers and businesses in the 

Internet ecosystem without adequate certainty about the FCC’s enforcement powers. 

Also in part, because subsection (b) could be directing the FCC 

to establish formal complaint procedures, this provision could be interpreted to bar the commission from notice and comment rulemaking in this area, and if that is the intent, we oppose it. Directing the FCC not to expand statutorily established obligations is one 

thing, but we believe it would be a mistake to prohibit the commission from providing, through notice and comment rulemaking, adequate legal detail and certainty to customers, consumers, and businesses below that ceiling. 

In conclusion, Mr. Chairman, I look forward to working with you 

and your committee and the FCC to ensure that the Internet openness of net neutrality is maintained and effective, and, of course, 

I welcome your questions. 

29 

Mr. WALDEN. Mr. Misener, thank you very much, and we look 

forward to working with you as well. 

I think we have got ways to address a lot of what you pointed 

out and may actually already have, but we will look forward to 

working with you. 

[The prepared statement of Mr. Misener follows:] 

30 


94494.012
31 


94494.013
32 


94494.014
33 


94494.015
34 


94494.016
35 


94494.017
36 


94494.018
37 


94494.019
38 

Mr. WALDEN. Next we go to Jessica Gonzalez, Executive Vice 

President, General Counsel of the National Hispanic Media Coalition. Ms. Gonzalez, we are delighted to have you here at our subcommittee as well. We look forward to your testimony. 

STATEMENT OF JESSICA GONZALEZ 

Ms. GONZALEZ. Thank you, Mr. Chairman, for having me back, 

Ranking Member Eshoo, and all the members of the subcommittee. 

The open Internet, as we have heard already today, is a crucial 

tool for all people to engage in our democracy, participate in our 

economy, become better educated, and share their stories. I am 

pleased that members on both sides of the aisle recognize the pervasive threat that blocking, throttling, and paid prioritization pose 

to the American people and our economy, because the open Internet truly is a bipartisan issue. 

I am not on this panel to represent vast industries. I am here 

to speak for the millions of Americans who follow this issue with 

a level of awareness that is actually very uncommon for inside the 

beltway telecom policy. 

Over the past year, I have been surprised to align on this issue 

with everyone from my conservative in-laws in the Deep South to 

my liberal friends on the West Coast, none of whom are particularly well-steeped in Federal policy, particularly not telecom policy, 

but they get this because it personally affects their lives. 

And although NHMC supports congressional attention to this 

matter to best protect consumers, I respectfully urge Congress to 

allow the FCC to exercise its Title II authority, complete its rulemaking process, and enact light-touch open Internet rules. 

This is the most certain path to ensure that individuals and businesses are protected without delay. It would allow the expert agency flexibility to respond to innovation and changes in the marketplace. 

The FCC has wide support from nearly 7 million Americans that 

submitted comments or signed petitions, as well as hundreds of 

public interest, civil rights, and consumer advocacy organizations 

and leaders. 

The discussion draft of legislative on the table today would represent a seismic policy shift with repercussions far beyond the open 

Internet debate. It has drawn robust criticism for four main reasons. 

First, it would strip the country’s expert communications agency 

of authority to protect consumers on the communications platform 

of the 21st Century, upending consumer protections that Americans have come to expect and this subcommittee has supported for 

decades; privacy, network reliability, access to 911 services, disability access, just to name a few. It effectively freezes the FCC in 

time, only allowing it to ever confront a handful of harmful practices that we have contemplated based on market conditions and 

technology that exists today. 

Second, it would pour cement on FCC efforts to close the digital 

divide, such as rural broadband subsidies and modernization of 

lifeline which could bring greater broadband affordability to the 

working poor. Today nearly one in three American people still lack 

39 

home broadband access. The vast majority of these people are 

rural, poor, brown, black, or a combination thereof. 

At the same time, standardized testing in American public 

schools is moving to digital formats. It is critically important that 

we do no harm with legislation that would undermine serious efforts to achieve the now indivisible goals of digital and educational 

equality. 

Third, as compared to FCC rules crafted under Title II, it would 

offer consumers limited and inferior protections. The draft legislation does not ban unreasonable discrimination and creates an exception for specialized services that threatens to swallow the rules. 

Fourth, it would create market uncertainty by relying on a 

flawed adjudication process. Consumers and aggrieved parties 

would have the burden to identify, report, and litigate violations, 

but most of us are likely to lack the technical expertise to identify 

the violations, the source, or have the legal expertise to pursue enforcement, or both. 

Those who oppose reclassification point to four concerns. My 

written testimony goes into greater detail about those arguments, 

but let me summarize. 

There is no evidence that Title II would harm investment or innovation, hamper broadband adoption, lead to higher taxes or fees 

or welcome protracted litigation. In fact, the hard evidence, including statements from the ISPs themselves, suggest just the opposite. 

The open Internet has allowed Americans to engage in our democracy at a whole new level. Tea party activists, dreamers, organizers of Black Lives Matter are all excellent examples of regular 

people who have harnessed the power of the open Internet to disseminate their messages and engage in the political process. This 

is democracy and free speech at work, and it is a virtue deserving 

of the strongest protections. 

Thank you very much for having me here today. I look forward 

to questions. 

Mr. WALDEN. Delighted to have you back. Thanks for your comments on the legislation and the issue at hand. 

[The prepared statement of Ms. Gonzalez follows:] 

40 


94494.020
41 


94494.021
42 


94494.022
43 


94494.023
44 


94494.024
45 


94494.025
46 


94494.026
47 


94494.027
48 


94494.028
49 


94494.029
50 


94494.030
51 


94494.031
52 


94494.032
53 


94494.033
54 


94494.034
55 


94494.035
56 


94494.036
57 


94494.037
58 


94494.038
59 


94494.039
60 


94494.040
61 


94494.041
62 


94494.042
63 

Mr. WALDEN. We will now turn to Dr. Nicol Turner-Lee, the vice 

president and chief research and policy officer for Minority Media 

and Telecommunications Council. 

Dr. Turner-Lee, delighted to have you here as well. Please go 

ahead with your testimony. 

STATEMENT OF NICOL TURNER-LEE 

Ms. TURNER-LEE. Thank you very much, Chairman Walden, 

Ranking Member Eshoo, and distinguished members of the committee. 

And I do have to say, as vice president and chief research and 

policy officer, that we just changed our name today at 9 a.m. To 

the Multicultural Media Telecom and Internet Council. So—— 

Mr. WALDEN. We reserve the right to revise and extend our remarks. 

Ms. TURNER-LEE. And at MMTC, still acronym is the same, we 

actually support and work to represent, for those of you that are 

unaware, organizations that consist of the NAACP, The National 

Urban League, Rainbow Push Coalition, AAJC, among others, so as 

my colleague Ms. Gonzalez has recognized, we also stand on the 

side of people who are on the other side of the digital divide. 

And I think that is pretty important on the topic of open Internet 

because we have been actively engaged in this debate as historically disadvantaged communities embark on a journey towards 

first class digital citizenship and all of the opportunities. So we 

welcome and applaud the draft legislation addressing the President’s values. 

I want to use my time to bring three issues to the committee’s 

attention today. My statement is on record in much more detail, 

but my time is best spent on these points. 

I first would like to highlight the unique benefits that an open 

Internet brings to people of color and vulnerable populations who 

we represent, and encourage the committee’s consideration of legislation that promotes an open Internet, and finally I would like to 

offer two friendly recommendations designed to strengthen and ensure that the legislation realizes the value of all consumers who 

want to acknowledge the promise of digital equality. 

I want to affirm the words of Ranking Member Eshoo that 

broadband access, adoption, and digital literacy are civil right prerequisites. Broadband allows people to gain new skills, secure jobs, 

obtain quality education, and receive greater access to healthcare. 

Today, however, too many Americans still do not benefit from all 

that broadband enables. The rate of broadband adoption among 

vulnerable populations is disproportionately low, contributing to a 

persistent digital divide. Despite growth in minority home, 

broadband adoption rates among African Americans and Hispanics 

are still lower than whites. African Americans over 65, for example, 

still exhibit especially low rates. Fort-five percent of African American seniors are Internet users, yet 30 percent only have broadband 

at home, compared to 63 percent and 51 percent respectively for 

white seniors. 

Non-users overall cite a perceived lack of relevance, affordability, 

and the lack of a device, in that order, as their prime reasons for 

not being online. 

64 

So closing the digital divide should and must be an important 

goal for policymakers, and steering the right course of action to 

promote and protect an open Internet is one of the ways to get 

there. 

I want to acknowledge that Congress has had a proud history of 

recognizing structural injustices in our society and acting to correct 

them. 

In the 1860s Congress framed and passed the 13th, 14th, and 

15th Amendments which enabled slavery-extended protection and 

enfranchised millions of Americans for the first time. 

In the 1960s, Congress enacted the Civil Rights Act of 1964, the 

Voting Rights Act of 1965, and the Fair Housing Act of 1968, all 

due in great measure to the Reverend Martin Luther King whose 

birthday we just celebrated. 

Today Congress has the opportunity to show that leadership 

again. By enacting a legislative solution that preserves the open 

Internet we all enjoy, Congress can extend the promise of justice, 

equality, and democracy to all and avoid a legal quagmire that will 

lead to an unending uncertainty for our economy and citizens. 

I agree with Jessica Gonzalez that an open Internet stimulates 

demand for broadband which in turn stimulates investment in infrastructure and innovation. At MMTC, we know firsthand in this, 

and it is our belief that increased investment in broadband also improves access and adoption to the types of innovations we like to 

drive in our communities, but of course the way that we get there 

is going to have an impact. 

For the past 20 years, administration and FCC chairs from both 

political parties have charted a successful regulatory platform for 

the Internet, and communities of color have benefitted. Look at the 

state of wireless adoption among people of color. 

Under the current regulatory framework, nearly 75 percent of African Americans and nearly 70 percent of Hispanic cell phone owners use their devices to access the Internet more than the overall 

population, and people of color have embraced it as a tool of empowerment. Under the current rules, we have actually seen the 

type of collective mobilization in Ferguson, Missouri, New York 

City, and Columbus, Ohio. These stats to drive policymakers to 

continue the progress that is already being made. 

But unfortunately, meaningful open Internet rules have failed in 

the FCC. Last year the D.C. Circuit Court struck down key portions of the commission’s open Internet order, and notwithstanding 

the current regulatory framework that has allowed broadband to 

flourish and adoption to take hold, the FCC is now considering the 

imposition of Title II regulation, which we believe as national civil 

rights organizations is ill-suited to the current realities. 

Imposing such heavy-handed framework on the Internet would 

only serve to stifle broadband deployment, discourage investment, 

and harm innovation. It would also place uncertainty for consumers through regressive taxation on universal service and potential ambiguity on consumer enforcements. 

Some have argued that the adverse effects of Title II regulation 

through judicious application of forbearance authority is the right 

way. We think that misses the point. If the commission could exercise its forbearance authority in productive matter, it still would 

65 

1 Attachments to Ms. Turner-Lee’s testimony have been retained in committee files and are 

available at http://docs.house.gov/meetings/if/if16/20150121/102832/hhrg-114-if16-wstateturner-leen-20150121-u2.pdf. 

take years to sort out and appropriately calibrate a set of rules, 

and this uncertainty will continue to drive us away from the attention of those issues that our community needs the most, the modernization of our schools, universal service reform in other areas. 

So in closing, it is for those reasons that our groups have actually 

asked that we steer away from a tight regulatory framework to 

something that has more flexibility to allow the ecosystem to continue to grow, and we think the proposed legislative is close in actually getting there. 

I would like to just close again with two additional recommendations for Congress to ponder in this debate as we look at this issue. 

First, Congress should address the harmful practice of digital red 

lining. Digital red lining is the refusal to build and serve lower income communities on the same terms as wealthier communities. In 

essence, it imposes digital segregation. Sadly, as the experience of 

our country shows, segregation harms and degrades all of us, and 

this is no less true in the digital age. Congress should empower the 

FCC to prohibit digital red lining and we urge in this legislation 

that Congress also look at how to prevent that because currently 

this is a problem. 

Second, Congress should ensure that its open Internet rules will 

be enforced. MMTC has recommended to the commission the creation of an accessible, affordable, and expedited procedure for the 

reporting and resolution of complaints. 

One approach would be to use the consumer friendly complaint 

process under the Title VII framework of the Civil Rights Act of 

1964. Under Title VII, a complainant receiving the expedited ruling 

from EEOC and does not need to hire a lawyer or write a complicated filing, whether the precise details of implementing a similar mechanism in the communications context, the core principle 

here remains the same. 

Consumers, particularly individuals from vulnerable populations, 

deserve, as it has been mentioned, an accessible, affordable, and 

expedited procedure for ensuring that their government protects 

them, and this must apply at whatever solution that we seek. 

My friends, the time is now to get past the morass of a debate 

that has been lingering for more than a decade, and with Congress’ 

discussion and guidance on this issue, we at MMTC think we can 

make it happen, and we look forward to working with Congress to 

do such so that we can get to the issues that mean the most for 

our communities, universal service, public safety, and assuring that 

we actually allow the Internet to grow to the next level of innovation to solve our social problems. 

Thank you very much. 

[The prepared statement of Ms. Turner-Lee 1 follows:] 

66 


94494.043
67 


94494.044
68 


94494.045
69 


94494.046
70 


94494.047
71 


94494.048
72 


94494.049
73 


94494.050
74 


94494.051
75 


94494.052
76 


94494.053
77 


94494.054
78 


94494.055
79 


94494.056
80 

Mr. WALDEN. Dr. Turner-Lee, thank you for your testimony and 

your suggestions. 

We will now turn to our final witness this morning, Meredith 

Atwell Baker, president and CEO of CTIA—The Wireless Association. 

Ms. Baker, glad to have you back before the subcommittee as 

well. Look for forward to your comments. 

STATEMENT OF MEREDITH ATWELL BAKER 

Ms. BAKER. Chairman Walden, Ranking Member Eshoo, and 

members of the subcommittee, thank you for inviting me to share 

the wireless industry’s perspective on the importance of an open 

Internet. At the outset I want to be clear, America’s wireless industry fully supports an open Internet. Wireless users demand it in a 

marketplace where competition has never been more vigorous. In 

the past 20 years, the wireless industry has grown from a luxury 

product to a key driver of economic growth. We all benefit from 

faster speeds, more services, and lower prices. 

The U.S. is the global leader in wireless by any metric, and it 

is at the forefront of mobile innovation in health, automotive, and 

payment fields. Central to that growth was Congress’s foresight in 

establishing Section 332, a mobile-specific regulatory framework 

outside of Title II. Congress has the opportunity to provide the 

same stability for broadband. 

We greatly appreciate this committee’s work to develop a regulatory foundation for future innovation with commonsense net neutrality provisions. The draft is an excellent start and offers a viable 

path to preserve an open Internet with enforceable requirements. 

Properly crafted legislation will guarantee the protections the 

President has called for, while allowing broadband providers to 

continue to invest billions, create jobs, and innovate products. 

We do not ask that wireless be exempt from any new laws, only 

that any new requirements reflect our industry, our technology, 

and our inherent differences. I want to highlight three key differences. 

First, mobile services are technically different and depend upon 

limited spectrum resources. This requires substantial network 

management, millisecond by millisecond, to deliver service to consumers. Remarkably, there is more bandwidth in a single strand 

of fiber than in all of the spectrum allocated to commercial mobile 

services. 

Second, we are competitively different. More than 8 out of 10 

Americans can choose from 4 or more mobile broadband providers. 

This is fierce competition, and it is driving new services, offerings, 

and differentiation that benefits consumers. 

Third, we are evolutionarily different. 4G networks are less than 

5 years old, and the future is bright, with advancements like LTE 

Broadcast, 5G services, and connected life applications. It is vital 

that any legislation is sufficiently flexible to preserve the competition, differentiation, and innovation mobile consumers enjoy today. 

While we are optimistic that the process on the Hill will enhance 

the wireless experience for all Americans, we have significant reservations with the FCC’s proposed path of Title II. The application 

of Title II in any form to wireless broadband would harm conVerDate Nov 24 2008 10:16 Jul 13, 2016 Jkt 037690 PO 00000 Frm 00086 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-1 CHRIS
81 

2 Attachments to Ms. Baker’s testimony have been retained in committee files and are available at http://docs.house.gov/meetings/if/if16/20150121/102832/hhrg-114-if16-wstate-bakerm20150121-u1.pdf. 

sumers and our economy. Title II is designed for another technology in another era, an era in which competition was largely nonexistent, if at all, and innovation came slowly, if at all. 

Given our industry’s great success with mobile broadband outside of Title II, we have significant concerns with how Title II and 

its 682 pages of regulation would apply to the dynamic mobile 

broadband space. If the Commission proceeds with Title II, as opposed to the 706 path the court contemplated a year ago, the wireless industry will have no choice but to look to the courts. Given 

the clear language of Section 332, we have every confidence that 

we would prevail, but it is not our preferred course. 

Under Section 332, mobile broadband is legally different too. In 

1993, Congress exempted future nonvoice mobile services, like mobile broadband, from common carriage regulation. It did so unambiguously. 

Given our industry’s great success with mobile broadband outside of Title II, we have significant concerns of how Title II and its 

682 pages of regulation would apply. The Commission and the 

courts have repeatedly found that wireless broadband is not a common carriage service. The FCC lacks the statutory authority to 

change course, and litigation would harm consumers, with a year 

or more of uncertainty and delay. As leaders across the globe are 

trying to replicate our mobile success and embrace 5G, this is the 

wrong time to inject uncertainty and delay into our Nation’s efforts. 

We risk falling behind when the stakes have never been higher and 

our connected life and global competitiveness are more within 

reach. 

The better approach would be for Congress to act and end this 

debate. Doing so would free us to turn to pressing bipartisan issues 

like spectrum reform and Comm Act modernization. By acting, 

Congress can help ensure that the United States remains the most 

dynamic and innovative mobile ecosystem. Thank you for the opportunity to appear on today’s panel, and I look forward to your 

questions. 

Mr. WALDEN. Ms. Baker, thank you for being here. 

[The prepared statement of Ms. Baker 2 follows:] 

82 


94494.057
83 


94494.058
84 


94494.059
85 


94494.060
86 


94494.061
87 


94494.062
88 


94494.063
89 


94494.064
90 

Mr. WALDEN. And thanks to all of our witnesses. You have 

blessed us with some really good thought starters. And some of you 

like what we are doing, some of you don’t. All of you, I think we 

can all agree on the principles at stake here. It is a matter of how 

we get there. 

I have got a couple of questions I want to ask. I will lead off. 

To follow up on your testimony, Ms. Baker, regarding Section 

332, and I am not trying to mimic our former chairman, Mr. Dingell, but in the essence of time I have a couple of yes-and-no questions that really would be helpful. And I would start with Mr. Powell and just work down. 

Yes or no, do you agree with Ms. Baker that mobile would not 

be covered under the FCC’s existing authority when it comes to applying these new net neutrality standards? Mr. Powell? 

Mr. POWELL. I forgot whether it is phrased as yes or no, but we 

believe that the FCC could reach wireless by reclassifying much as 

they are proposing to do with respect to fixed broadband. 

Mr. WALDEN. So you think they could get there, even though 332 

has a different view of that. 

Mr. POWELL. Not without risk, but we do believe that they could. 

Mr. WALDEN. All right. 

Mr. Dickerson. 

Mr. DICKERSON. I am not an attorney. 

Mr. WALDEN. That is two of us. But I stayed in a Holiday Inn, 

so I can legislate. 

Mr. DICKERSON. I think the most important thing for us is that 

in our minds there is no difference between mobile and broadband. 

Mr. WALDEN. So you want them both covered? 

Mr. DICKERSON. Both covered in any regulations. 

Mr. WALDEN. Right. On these protections. OK. 

Mr. Misener? 

Mr. MISENER. I agree with Chairman Powell’s assessment, legal 

assessment. I also agree that consumers view these interchangeably—— 

Mr. WALDEN. Right. 

Mr. MISENER [continuing]. And it should be the same policy for 

both. 

Mr. WALDEN. So you think it is legally sustainable. 

Ms. Gonzalez. 

Ms. GONZALEZ. I agree. It is legally sustainable. 

Mr. WALDEN. All right. Ms. Turner-Lee. 

Ms. TURNER-LEE. I am not an attorney, but we think that Title 

II would actually stifle the expansion of mobile. So we think that 

is a bad idea. 

Mr. WALDEN. Ms. Baker, one more time from you. 

Ms. BAKER. Mobile broadband has never been under Title II because of the explicit expression of Congress, so it is not sustainable. 

Mr. WALDEN. So there might be an opportunity for litigation 

here, you think. This is my point. We have got some really talented 

people, some are attorneys, some are not. Some are backed up by 

really smart attorneys as well. There is division right here on this 

panel. This is where I think certainty matters and legislating matters. 

91 

Yes or no, have you actually seen what the FCC is proposing? 

Mr. Powell. 

Mr. POWELL. No. 

Mr. WALDEN. Mr. Dickerson. 

Mr. DICKERSON. We have seen principles. 

Mr. WALDEN. No, I mean have you seen the language? 

Mr. DICKERSON. No. 

Mr. WALDEN. Got it. 

Mr. Misener. 

Mr. MISENER. No. 

Ms. GONZALEZ. They don’t typically release the order. But I have 

heard a great deal about what is in. 

Mr. WALDEN. Oh, you have. But you haven’t read it? 

Ms. GONZALEZ. Haven’t read it, no. 

Mr. WALDEN. OK. 

Ms. TURNER-LEE. Don’t know nothing. 

Mr. WALDEN. Ms. Baker. 

Ms. BAKER. No. 

Mr. WALDEN. All right. And does anybody anticipate they will see 

it before they vote on it? 

Mr. POWELL. No. 

Mr. DICKERSON. I am sorry, could you repeat that question? 

Mr. WALDEN. Does anybody anticipate actually being able to see 

the language before the commissioners are called upon to vote on 

it? 

Mr. POWELL. No. 

Mr. WALDEN. Mr. Dickerson. 

Mr. DICKERSON. We have found the FCC process so far to be 

quite open, so we believe it is quite possible that we could. 

Mr. WALDEN. All right. 

Mr. Misener. 

Mr. MISENER. No. 

Mr. WALDEN. Ms. Gonzalez. 

Ms. GONZALEZ. Not sure if we would see it. 

Mr. WALDEN. Right. 

Ms. TURNER-LEE. Probably not. 

Ms. BAKER. No. 

Mr. WALDEN. We have two former commissioners, both of whom 

said very unlikely, nope, that you will actually see it. That is why 

I think it is a better process. You will actually get it see it through 

a legislative, transparent, open environment. Text is posted. You 

all have given us great input as we move forward. 

There is a disagreement, I will say, at least this is what I am 

hearing, regarding the application of universal service fund fees. If 

I heard different testimony correctly, some believe that the FCC’s 

order would allow it, some believe it wouldn’t. Some think our bill 

would preclude it, some wouldn’t. My question to you is, when it 

comes to universal service fees, under what we know of the FCC’s 

order, what they are proposing, would the Internet now be subject 

to USF levy? 

Mr. Powell. 

Mr. POWELL. Yes. The way it works in short is that Congress requires an assessment of universal service from any telecommunication services provider. If the FCC reclassifies broadband, it will 

92 

immediately be in that classification and subject to that assessment. There is an argument that the Commission could theoretically forebear from that, but in the absence of that action it would 

absolutely result in increased charges on federal universal service. 

Mr. WALDEN. All right. There is also an argument out there in 

the public, some agree, some disagree, that if the FCC goes down 

a Title II path and declares that the Internet is a public utility 

under Title II, that that nearly totally eliminates the Federal 

Trade Commission’s authority, because they don’t have authority 

on regulated common carriers. Correct? 

Mr. Powell, can you speak to that? 

Mr. POWELL. That is correct. Under the Clayton Act Section 5, 

the FTC is prohibited from exercising its authority over privacy, 

data security, and a number of other things against telecommunication services providers. They are obviously a champion of privacy 

today, and have broad-reaching authority to do so. That would be 

disenfranchised by this decision. 

Mr. WALDEN. All right. 

Mr. Misener, finally, you raised concerns in your testimony about 

specialized services—you are not the only one—that exemption in 

our draft legislation. Now, both the FCC and the President have 

said a specialized services exemption is necessary, and the language in our draft tracks the FCC’s proposals. Has there about 

been a net neutrality rule proposed that does not acknowledge the 

need for specialized services? 

Mr. MISENER. I can’t say that there hasn’t been one, but what 

we are concerned about, if that becomes a substitute for paid 

prioritization. 

Mr. WALDEN. Right. 

Mr. MISENER. So that is the concern. Whether someone has proposed it elsewhere, I don’t know. 

I will point out, however, in light of one of the prior comments 

by Chairman Powell, that he is viewing Title II as a binary thing, 

either it is all there or it is not. The Commission did forebear from 

Title II across the board. It need not have back in 2002. And so 

it could be partially unforeborn, as it were, and done very judiciously. So I think we can be much more precise about what this 

means and not view it as an all-or-nothing solution. 

Mr. WALDEN. You could also have another Commission that decides to change all that too. So that gets to our issue of certainty. 

I have gone over my time. I now recognize the gentlelady from 

California, Ms. Eshoo. 

Ms. ESHOO. Thank you, Mr. Chairman. 

I want to thank all the witnesses. I think that you have done a 

marvelous job through your testimony today to highlight what you 

like and what you don’t, where you agree and where you don’t. And 

I think that you have done it very well, and I am grateful to you 

for it. 

I just want to make a comment before I begin with my questions. 

It is thrown around—and it is a heavy charge, because everyone 

cares about this—and that is that if we go, we move in a certain 

direction, that the private sector will stop investing. That is a big 

chill for me and for everyone else. But there isn’t anything to substantiate that. I mean, when you look at the wireless auction, bilVerDate Nov 24 2008 10:16 Jul 13, 2016 Jkt 037690 PO 00000 Frm 00098 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-1 CHRIS
93 

lions of dollars have come in. And when we began that effort, 

Chairman Walden, myself, and the subcommittee, people laughed, 

and they said you are not going to raise a dime out of this. Fortyfive billion dollars so far. Well, I don’t know about anyone else, I 

think $45 billion is a lot of money. That is a lot of investment. That 

is worth something. And the CFO of Verizon said, we will keep investing whether there is Title II or not. The CTO of Sprint. I don’t 

think these are insignificant comments. 

So I think it is important for the record, if someone makes that 

charge, then it should be backed up for us, because we need facts 

and the evidence that comes with the facts. I think that that would 

be most helpful to us. 

I want to go to Mr. Dickerson. I should say to everyone, today 

is the first time I met Mr. Etsy. But get a life, Anna, I met him 

on C-SPAN. He was part of a conference, the Washington ideas 

conference, and I was so taken with how he presented himself, 

what he knew, and what his company has been able to do, I said 

let’s invite him in and be a witness. 

So thank you for being here. And thank you for all the jobs that 

you have created. 

The proposed bill doesn’t prevent a broadband provider from 

prioritizing content from one of its own affiliates. So my question 

to you is, if a broadband provider were to prioritize an affiliate’s 

content, what effect would that have on Etsy? And most importantly, everyone that deals with you is a company. They have created a new company. What kind of an effect would that have? 

Mr. DICKERSON. Yes. One thing that you may not know about 

me, I was actually chief technology officer before I was CEO. So I 

know a lot about technology. And one of the things that we know 

is that for commerce sites, for business sites, and I define this 

broadly from Etsy to Amazon to Google, that the speed of your Web 

site is absolutely directly correlated with revenue. So if things are 

slower, revenue drops. If things are faster, revenue goes up. 

So in a world of paid prioritization, if smaller companies like 

Etsy were disadvantaged against larger companies, then you could 

see the larger companies see advantages purely based on speed. 

Higher revenues. And this would hurt the Etsy sellers who are receiving lower speeds than some of the other competitors. 

Ms. ESHOO. Could it put them out of business? 

Mr. DICKERSON. Put them out of business. And as I said in my 

remarks, we have sellers who are making money using the Internet 

in rural areas and elsewhere, and they are using this money to 

feed their families, pay for school, do all the things that they need 

to do in their lives. 

Ms. ESHOO. Let me go to Mr. Misener. Under the proposed legislation the problem of interconnection abuse is not only ignored, but 

the FCC is prevented from doing anything about it in the future. 

Now, do you believe that if interconnection isn’t explicitly addressed, how would your business and the ability to serve your customers, what would happen? 

Mr. MISENER. Thank you, Ms. Eshoo, very much. I am not so 

clear in the bill whether it is precluded or whether it is not. Some 

people believe very strongly it is precluded. I think it is silent and 

it needs to be explicit that it is included for the very reason I statVerDate Nov 24 2008 10:16 Jul 13, 2016 Jkt 037690 PO 00000 Frm 00099 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-1 CHRIS
94 

3The information has been retained in committee files and is also available athttp:// 

docs.house.gov/meetings/if/if16/20150121/102832/hhrg-114-if16-20150121-sd009.pdf. 

ed in my testimony, which is consumers shouldn’t care. A customer 

of Amazon should not care where in a network operator’s network 

discrimination is occurring, only that it is occurring. And to leave 

that out is a major gap in the legislation, and I would like to see 

that filled. 

Ms. ESHOO. Good. 

Let’s see. I am over time. Mr. Chairman, I failed to ask for a 

unanimous consent request to include in the record a letter dated 

January 20 from the mayors of New York and San Francisco, and 

the letter urges the FCC to adopt the strongest possible open Internet rules using Title II. And I also ask that letters from the National Association of Realtors and a group of racial justice organizations be included in the record. Both letters reiterate that the legislative process should not hold up the FCC from moving forward 

with strong, legally enforceable open Internet rules. 

Mr. LATTA [presiding]. Without objection. 3

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

Ms. ESHOO. Thank you, Mr. Chairman. Yield back. 

Mr. LATTA. The chair recognizes himself for 5 minutes. And, 

again, thanks to our panel for being here today. And as the 

gentlelady just said, it has been a very interesting discussion 

today. 

Mr. Powell, if I could start with a question for you. I found your 

testimony very interesting about when we are dealing with regulations in this town, about trying to put round pegs in square holes 

and all the different things that folks out there are facing. But for 

many of us, we have very diverse districts. We represent suburban, 

urban, rural. But with many of the cable operators that I have in 

my area there have been concerns that the prospect of Title II regulation may require them to overhaul their billing practices, 

change their pole attachment rates, require them to review all of 

the customer privacy terms and conditions, and subject them to 

new enforcement rules. For many of these small companies, this 

would stifle future investment. Balancing potential harms with the 

new regulatory burdens doesn’t seem to be equitable to those small 

providers. Should small providers be exempt from any network 

neutrality rules? 

Mr. POWELL. First of all, I would say that we as an industry, and 

I would think that my small members would concur, are quite supportive of both the concept of open Internet and the government’s 

interest in developing strong and sustainable rules. It is simply a 

false choice to suggest that we are opposed to the core and substantive effort to do so. 

What we are concerned about is in the effort to do so we will employ a comprehensive, complex regulatory regime that will substantially raise the costs of being in the ISP business. Cost management is a critical concern for small businesses, much more than 

even the larger. And on the margins of uneconomic regions that 

have difficulty, like rural America, anything that adds to the costs 

of deploying that infrastructure in those places will dampen both 

95 

the ability and the enthusiasm to reach the hardest parts of the 

country. 

Mr. LATTA. Thank you. 

Ms. Baker, if I could turn to your testimony, you also had some 

discussion about rural America in it, under your section regarding 

the significant risk of Title II. And you mentioned that if the Commission proceeds down that path that litigation would inevitably 

have more delays and uncertainties out there, and it’s also interesting that the harm may be particularly acute for rural customers, 

as a collection of regional providers explained that ‘‘applying an 

outdated and backward-looking Title II common-carriage regime to 

our services...would stifle innovation and investment and would do 

a disservice to rural America.’’ Could you elaborate on that disservice to rural America? 

Ms. BAKER. Of course. Our association this year is chaired by 

Ron Smith, who is president and CEO of Bluegrass Cellular from 

Kentucky, and we brought our rural carriers in to visit with the 

FCC. They don’t have armies of regulatory lawyers to go and comply with transparency and other burdens. Mobile broadband has 

never been under Title II. The uncertainty has already stifled their 

deployment. They are worried. They do not know what Title II 

brings. 

And, additionally, the wireless industry is extremely competitive. 

They need to differentiate to serve their communities. They need 

to make sure that they can compete with different concepts, and 

they are not sure what Title II will bring them in that respect. 

So the lawyers and what Title II would bring is unknown. Competition and differentiation are important to our rural carriers. And 

I think that is at risk under Title II. 

Mr. LATTA. Let me ask you this, because when I am out in my 

district and talk to folks, especially if you are a small business way 

out in an area that might not have very good coverage. They are 

concerned, in fact I just talked with somebody not too long ago, 

about 2 weeks ago, that they have a problem with being able to 

connect with their costumers, even though people are trying to contact them. So are you saying build out and things like that for 

some of these folks would be hampered because of that, because of 

Title II? 

Ms. BAKER. Build out and advanced services. 

Mr. LATTA. OK. Thank you. 

Mr. Powell, if I could go back to your testimony, you go into great 

detail about how the current light touch regulatory structure has 

spurred a rapidly evolving and successful broadband ecosystem. 

Will Title II regulations do anything to encourage continued growth 

as we have seen over the past 15 years? And would the reclassification encourage incumbent providers to upgrade networks or new 

companies to enter the market? 

Mr. POWELL. I think, all hyperbole aside, the issue isn’t whether 

people will invest. Of course they will. They have businesses to 

run. The real question is, will it be at a diminished and dampened 

level compared to the velocity and the ambitions that the country 

has? We hear the President and other people talk about wanting 

the Nation to achieve world class, top broadband speed and status. 

96 

We want gigabit to every American, we want every American to 

have access to the Internet, and we are impatient about that. 

Networks are rebuilt every 18 to 24 months to the tune of $30 

billion to $50 billion annually. To get to gigabit speeds, we are talking about hundreds of billions of dollars required over some 

amount of time. It is simply common sense to understand increasing regulatory costs, increasing uncertainty certainly will slow the 

magnitude or the velocity or the timing or the pace of those evolutions. And I am sure even in companies like Mr. Etsy’s or Amazon they have just as much of an imperative of having a continued 

high growth evolution of network capacity as the primary input to 

the businesses they provide. 

So we do believe both the increased costs associated with the regulatory environment, the cost of borrowing that will go up when 

now the rate of return is based on being a regulatory industry rather than a lightly regulated one, and the years of uncertainty to 

truly finalize and settle and stabilize the rules will probably have 

a negative and depressive effect. All you have to do is look at the 

recession, when companies had plenty of capital but were unwilling 

to deploy or hire or invest because of the uncertainties that surrounded the market during the depths of the recession to have an 

example of how this works. 

Mr. LATTA. Thank you very much. 

And my time has expired. And the chair recognizes Mr. Pallone 

for 5 minutes. 

Mr. PALLONE. Mr. Chairman, I yield to Ms. Eshoo. 

Ms. ESHOO. I thank the gentleman. 

I just want to state for the record something that is very important given what Ms. Baker said. Wireless voice has been, as you 

know, a former commissioner of the FCC, under Title II since 1993. 

So I think everyone needs to have an appreciation of that, and I 

don’t think the testimony reflected that. 

Thank you. 

Mr. PALLONE. Thank you. 

Ms. Gonzalez, I think we both agree that putting net neutrality 

protections into law would be a win for consumers. But how might 

consumers lose if Congress were to enact the draft bill that we are 

discussing today? 

Ms. GONZALEZ. Thank you, Congressman Pallone, for the question. I think with what is on the table today there are serious 

threats. This undermines FCC efforts to bridge the digital divide. 

Particularly concerned with rural subsidies and efforts to reform 

the lifeline program, which could have the potential to bring affordable broadband to the working poor. It undermines privacy, truth 

in billing, all kinds of consumer protections that we as Americans 

have come to expect and rely on, and it calls into question the 

FCC’s ability to continue protecting us on the communications platform of the 21st century. 

Mr. PALLONE. Thank you. 

Now, my Republican colleagues characterize their draft bill as 

consistent with the FCC’s 2010 net neutrality rules. Do you agree 

that the draft bill provides the same level of protection as the 2010 

rules? 

97 

Ms. GONZALEZ. I think it is true there are some rules that look 

like the 2010 rules. There are a number of distinctions that I laid 

out in my testimony, but I think the critical distinction is that it 

strips the FCC of any flexibility to oversee consumer protection and 

ensure that there are not harmful, discriminatory practices on the 

Internet. And so that is the concern. It essentially freezes the FCC 

in time so that it cannot address any harms that fall outside of the 

principles laid out in the draft legislation, nor can it address any 

new harms that present themselves as technology and the marketplace evolve. 

Mr. PALLONE. Thank you. 

Mr. Powell, we have heard the argument today that Title II will 

stifle innovation and investment. In fact, I think the chairman 

called it the nuclear option. How would we evaluate this argument 

in light of the fact that cable companies’ stock prices are up since 

President Obama announced his support for Title II? 

Mr. POWELL. Well, public stock prices are a complex question. I 

am no market expert. But a careful examination historically over 

periods of regulatory intervention versus periods of light regulation 

will demonstrate a clear pattern. In the wake of the 1992 act, when 

cable rates were regulated, investment was depressed for several 

years until the prospect of the 1996 act, which deregulated those 

rates again and they soared. In 2001 and 2002, when the decisions 

to regulate broadband as an information service were put in place, 

it unleashed a radical increase in investment, totaling $1 trillion 

over the course of the year. 

I sincerely believe that the market believes in the assertions and 

promises that Title II will not include rate regulation, it will not 

include the whole bevy of onerous regulations that exist. But unless that is clearly identified in an unequivocal way, I don’t think 

it is priced into the market, and very likely would be if anything 

changed. 

Mr. PALLONE. Maybe the economy is just getting so good 

that—— 

Mr. POWELL. Could be that too. 

Mr. PALLONE. We are just seeing it soar these days based on 

what the President said last night. 

One more question. Most broadband providers, including your 

member companies, say they are already in compliance with network neutrality, and what they are really afraid of is the rate regulation by the FCC, but both the President and the FCC have said 

they support forbearance from regulation of consumer prices. So, 

Mr. Powell, if we all agree rate regulation should be off the table, 

couldn’t Congress narrowly address that issue in legislation, and 

couldn’t there beunintended consequences from placing the kind of 

broad restrictions on the FCC’s authority that are in the draft bill? 

Mr. POWELL. Thank you, sir. I would say two things. First of all, 

rate regulation is the most dangerous of all of the provisions, but 

I wouldn’t concede that of the thousands of regulations in Title II 

that alone is the sole focus of our concern. We do appreciate the 

President saying that rate regulation should be forborne from, and 

Chairman Wheeler’s assertions. 

But simultaneously, we have heard Chairman Wheeler talk 

about the adoption of Sections 201, 202, and 208. Section 201 is the 

98 

statutory provision where rate regulation is derived. It says that to 

ensure that practices for charging will be just and reasonable. That 

is the basis and the historical basis of the Commission’s rate regulation. 

So we don’t yet have any confidence that the words are matching 

the direction of the order and whether the government will make 

clear that rate regulation is off the table or merely say they have 

the power to rate regulate but for now are choosing not to. 

Mr. PALLONE. Thank you. 

Thank you, Mr. Chairman. 

Mr. WALDEN [presiding]. Thank the gentleman. 

I will now recognize the gentleman from Illinois, Mr. Shimkus. 

Mr. SHIMKUS. Thank you, Mr. Chairman. 

My good friend Congresswoman Eshoo kind of had a shot across 

the bow at former Commissioner Baker, now president or chairman 

or czar of CTIA, and so I thought I would give her a chance to 

maybe respond to the statement made by my friend Anna. 

Ms. BAKER. Thank you. I appreciate that. 

Ranking Member Eshoo is correct. First of all, we know the cur- rent framework is working. We have $112 billion of investment in 

the wireless industry in the last 4 years. But let’s go to 1993, when 

Congress was enacting Section 332 and deregulating wireless. They 

did it two ways. They did two buckets. They did CMRS, which was 

mobile voice, and they did that subjected to limited Title II requirements. They separately created a second bucket, which is called 

PMRS, and that was for all new services, like mobile broadband, 

and they specifically exempt the FCC from applying Title II requirements on mobile—well, new services, which mobile broadband 

is a new service. FCC has always acted in accordance with that, 

and the court has always upheld that mobile broadband is not regulated by Title II and cannot be, according to the explicit language 

of Congress. 

Mr. SHIMKUS. Great. Thank you. 

And I know my colleagues have given some credit to the chairman of the subcommittee on movement. I mean, I am a paid 

prioritization guy. So that is where I come from in this debate. And 

I have always been the point that if you are going to make the $30 

billion of investment every 18 months to upgrade the pipes, you 

have to have revenue to do that or you have to have a business 

model to do that. 

My whole position in this has not been limited and government 

control of the existing pipes, but encouragement of the expansion 

of more. But that was then, this is now, we are in a new world 

order where I think we have now looked at the debate and said— 

and businesses have done that too—and said, hey, we need to get 

this monkey off our back, we need to get some rules and some certainty. Businesses always talks about certainty. 

So, again, credit to the chairman by saying, OK, well, let’s go 

back to the previous debates, look at what was put out in front by 

our colleagues, where can we find middle ground? And I believe 

that is the product that Chairman Walden has set forth, now with 

great consternation from my friends on the other side. 

So I am with the chairman. I think we can move forward and 

set some certainty. But I am a legislator. Right? This process we 

99 

want to legislate, we want to define in law, and then allow the executive branch, or in this case the FCC, to implement the law. Because as, again, Chairman Walden said, if another FCC comes and 

is established by some other President, it could get turned topsyturvy again. 

So I just wanted to just in the big point just give some credit 

about how even Chairman Walden is bringing some of us kicking 

and screaming along with him on this policy. 

Mr. WALDEN. Boy, can he kick. 

Ms. ESHOO. Would the gentleman yield just for a second? 

Mr. SHIMKUS. Yes, I would. 

Ms. ESHOO. I am Catholic, and for Catholics, we understand confession. So thank you. 

Mr. SHIMKUS. I still believe in the paid prioritization and 

incentivizing build-out. I am not sure we get there this way. And 

that is my concern. 

Mr. WALDEN. I appreciate it. Would the gentleman yield? 

Mr. SHIMKUS. I would. 

Mr. WALDEN. I appreciate that. And remember part of what 

drives us to legislation. First of all, we would want the FCC, before 

they go off and regulate something that everybody has testified has 

worked pretty darn well, right, I mean what we have today has 

been light touch regulation. That is how it has been built out. 

There is no overwhelming evidence of clear market failure that 

would drive to deep regulatory control from Washington top down. 

That is where some of us have been, why do we have to go down 

this path? 

What is before us today, though, is the President is now turning 

the FCC into his open puppeteer here, you know, and saying here 

is what you have to do, which goes beyond where the FCC chairman said he thought he should go, or what was right for the market. He is being pushed. And then he said, we are going to act at 

the FCC by February 26. And by the way, none of us here is going 

to necessarily see that order. That is part of our reform effort, by 

the way, which we passed out of the House, where we would have 

more transparency in the process. 

So they are moving. We don’t know precisely what that is going 

to look like. We would rather give certainty because of this issue 

that Ms. Baker has outlined regarding mobile devices, because Mr. 

Etsy and Mr. Misener, as you know, we are all going to a mobile 

world. And yet the statute under 332 is pretty clear, that authority 

doesn’t exist at the FCC. Now, they may try to go there, and there 

is dispute whether you can get there and sort of hook something 

around. You are going to be in court. Consumers aren’t going to get 

certainty. The marketplace isn’t going to have certainty. And for 

the third or fourth time, the lawyers are going to get rich. And, Mr. 

Dickerson, you and I aren’t lawyers. So all we are going to do is 

get to pay the bill here. 

So I would prefer to get the committee together, do what we do 

as a committee, find a common ground here. And that is why we 

started with the 2010 order, we started with a lot of the work that 

the Democrats, frankly, had done with Mr. Waxman. If you go 

through section by section you will see that here. And then we just 

100 

want to give pause to the market. So, anyway, I have overextended 

your time. 

Mr. SHIMKUS. I yield back the balance of my time. 

Mr. WALDEN. Thank you. 

Where do we go now? We go now to Mr. Doyle, who hopefully 

will be streamed on the Internet on this version of his comments. 

Mr. DOYLE. Thank you, Mr. Chairman. 

Let me start by saying I am very concerned about the way in 

which this bill strips the FCC of its authority under Section 706 

and prevents the FCC from giving new entrants access to key infrastructure under Title II. The FCC needs access to every tool in 

its arsenal to promote and encourage the build-out of advanced 

broadband infrastructure. Municipal broadband and new entrants 

in the marketplace, like Google Fiber, they are driving U.S. innovation and driving ISPs to offer faster, cheaper services by bringing 

much-needed competition to the broadband market. These buildouts also create jobs across the country, and it is often in areas 

where ISPs have opted not to make the investments theirselves. 

I want to ask Mr. Misener and Mr. Dickerson, both of your companies offer innovative and high-bandwidth applications. Mr. 

Misener, I understand that Amazon has recently begun streaming 

in 4K. Are either of you concerned that the draft bill does not include any mention of peering or interconnection, particularly given 

how congestion at points of interconnection has recently been used 

to leverage payments from edge providers? 

Mr. DICKERSON. I will speak first. We are absolutely concerned 

that interconnection is not included. I agree with what Mr. Misener 

said earlier, we think very much about our customer experience 

and their experience of the Internet. So regardless of whether the 

choke point may happen upstream or in the last mile doesn’t matter. So interconnection is very important to us. 

Mr. DOYLE. Mr. Misener. 

Mr. MISENER. I share that view on behalf of our customers. It is 

one thing that customers just simply should not need to care about. 

Where throttling or discrimination or paid prioritization takes 

place in a network they shouldn’t care. Frankly, they shouldn’t 

need to care much about where in the statute their rights are protected, where net neutrality is extended. It could be done in Congress, it could be done at the Commission, a mix of the two. And 

I would suggest that consumers really don’t care, they just want 

their net neutrality. 

Mr. DOYLE. Thank you. 

Ms. Gonzalez, do you want to add to that? 

Ms. GONZALEZ. Thank you, Congressman Doyle. I think we 

should consider anything that impacts a consumer’s ability to access what they want to access on the Internet. The discussion draft 

strips the FCC of authority to even investigate this issue, and that 

is very concerning. 

Mr. WALDEN. Would the gentleman just on that point? Because 

I don’t believe our draft does that. 

Mr. DOYLE. As long as you give me all my time back. 

Mr. WALDEN. I will give you all your time back. I don’t believe 

our discussion draft does that, and would welcome that opportunity. An on the interconnection piece, we leave that authority 

101 

with the FCC. We don’t do away with that here. So although it is 

absent in the bill, it is still resident at the Commission. So that 

interconnection piece we felt was taken care of. We would be happy 

to have a further discussion. I yield back. 

Mr. DOYLE. Thank you, Mr. Chairman. 

Mr. Misener and Mr. Dickerson, the draft bill also provides this 

carveout for so-called specialized services, yet it doesn’t allow the 

FCC to define what constitutes a specialized service. Can you envision this language being used by an ISP to sell preferred treatment 

or advantaging one competitor over another or even they themselves providing specialized services that unfairly compete in the 

marketplace? 

Mr. DICKERSON. Absolutely. I think the lack of specificity in the 

language could allow for many applications that could be tantamount to discrimination. So, yes. 

Mr. DOYLE. Mr. Misener. 

Mr. MISENER. Mr. Doyle, certainly it would permit it with respect 

to affiliated content. So the network provider itself could engage in 

the provision of specialized services, which would look a lot like 

paid prioritization, only it is just a matter of ownership as opposed 

to payment by a third party. So, yes, we are very concerned. 

Mr. DOYLE. Thank you. 

I just want to add on to what Ms. Eshoo was saying too about 

we have read in several news reports that senior executives from 

major companies that are represented by Chairman Powell and Ms. 

Baker, having made statements about Title II, which, Mr. Chairman, I would like to enter into the record. 

The first is one now that Comcast, Charter, and Time Warner, 

all members of Chairman Powell’s organization, and I quote, Charter Chief Executive Tom Rutledge said that so long as the Federal 

Communications Commission waived parts of Title II that weren’t 

relevant, a step that Net Neutrality advocates support, it would be 

an acceptable outcome. Similar statements were made by Comcast 

and Time Warner Cable. 

Stephen Bye, the Chief Technology Officer of Sprint, a member 

of Ms. Baker’s organization, said Sprint will continue to invest in 

data networks regardless of whether they are regulated by Title II, 

Section 706, or some other light touch regulatory regime. And 

Francis Shammo, the CFO of Verizon, said, ‘‘I mean to be real 

clear, I mean this does not influence the way we invest. I mean we 

are going to continue to invest in our networks and our platforms, 

both in Wireless and Wireline FiOS where we need to. So nothing 

will influence that.’’ 

So I would like to enter these three into the record, Mr. Chairman. 

Mr. WALDEN. Without objection. 

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

Mr. DOYLE. I thank you, and I yield back. 

Mr. WALDEN. The gentleman yields back. 

We now turn to Mr. Guthrie for 5 minutes. Oh, wait a minute, 

Mr. Barton is back. I am sorry. 

Mr. BARTON. I need to get reconnected, Mr. Chairman. 

Mr. WALDEN. All right. Then he will yield. And I think next is 

Mr. Guthrie. 

102 

Mr. GUTHRIE. Thank you very much. It is a privilege to be here. 

And sorry, on this committee we have so many subcommittees 

going on with interesting testimony. I was out just a few minutes 

ago. And I understand, Ms. Baker, you mentioned Bluegrass Cellular, which is in my district. And we are very proud to have a very 

interesting concept and a successful rural carrier. And I understand you also talked about issues facing small rural carriers. But 

in the context of evaluating what constitutes reasonable network 

management, how are congestion issues different for wireless networks, particularly in small rural carriers? 

Ms. BAKER. Well, that is a great question. I did talk about Bluegrass Cellular. They are our chairman this year. And they are 

deeply concerned. They have issued a letter in the record at the 

FCC. I am happy to offer it into the record here about their concerns for rural carriers. So with no objection? So there we go. 

As far as the technical capacity and the reasonable network management standard, we have to be very careful. If, say, Mr. Latta 

and Chairman Walden were reliving the national football championship and Ranking Member Eshoo were tweeting, and you were 

taking your e-mail, if you were all on the same service provider, 

you would all be on the same cell. If we had a bunch of 16-yearolds walking through doing a tour of what Congress looks like, that 

is a millisecond by millisecond management that has to happen by 

our carriers. That is the same cell. It is constrained. One strand 

of fiber is the same capacity of the entire electromagnetic spectrum. 

So there is an awful lot of network management that goes on. 

These people, if you were a CTO of one of these smaller carriers, 

you are updating any sort of things that can help you handle this 

data capacity, just amazing upload. You say $45 billion in the spectrum auction. Well, it is no surprise because the data that we use 

has increased by 730 percent. 

Mr. GUTHRIE. Was that the same as congestion issues and interference issues? Is that different? 

Ms. BAKER. Yes. 

Mr. GUTHRIE. And how are they different? 

Ms. BAKER. The data is increasing, so the congestion is increasing. So we are all using more data. So it is more and more congested, and we have to manage our network more and more. 

Mr. GUTHRIE. It is all about interference, interference issues. 

Ms. BAKER. Interference is if we are all using the same, if it is 

raining outside, if more people come onto our cell site, then we 

have to manage it, we have to make sure that it is optimized so 

that all of us have the best user experience. 

Mr. GUTHRIE. Well, thanks. And thanks for mentioning Bluegrass Cellular. It is a great business. 

And, Mr. Powell, I have a question. I know this issue was 

touched here earlier, but I wanted your input. The FCC, do they 

need to act in February? I mean, everyone wants the Internet to 

remain open and vibrant, but is there some particular reason the 

FCC shouldn’t wait and see whether Congress can enact a bipartisan bill? 

Mr. POWELL. It is really the decision of the Commission and the 

chairman. That is the schedule he establishes. He has that authority under the statute. I do believe that the Commission should alVerDate Nov 24 2008 10:16 Jul 13, 2016 Jkt 037690 PO 00000 Frm 00108 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-1 CHRIS
103 

ways be respectful of the legislative process and provide both the 

expertise it needs to make a decision. But I also do respect their 

separate and different authorities, and they set their own 

timelines. 

Mr. GUTHRIE. So when you were chairman in 2002, when cable 

modem service was determined to be an information service, in 

comments to the FCC the NCTA indicated that, quote, ‘‘The record 

shows that today’s increasingly sophisticated broadband services 

fall even more squarely within the definition of information service 

than ever before,’’ unquote. And could you explain this from the 

perspective and understanding of technology that you had before 

you in 2002 to the NCTA comments expressed to the FCC last 

year? 

Mr. POWELL. I will try my best. I think one thing to note is the 

draft legislation, as I understand it, rather than disenfranchising 

the FCC of authority, is classifying a service the same way this 

Commission has classified that service for over 12 years, through 

both Republican and Democratic administrations, including most 

recently in 2010 by President Obama’s first chairman of the FCC, 

who also agreed it was an information service. The Commission 

has been operating under that definition since the very beginning 

of broadband. That is not new. 

It is important to remember this isn’t completely discretionary. 

Congress creates classes of service and defines them. It defines 

what a telecom service is and it defines what an information service is. When broadband first emerged, and I was privileged to see 

it come onto the scene when I was at the Commission, there was 

an open question as to whether the nature of that new integrated 

Internet service was either a telecommunication service or an information service under our precedents. It was our judgment that the 

factual characteristics, the nature of the service, the way that it 

was used was much more faithful to the definition that Congress 

set out for information services than the one they set out for telephone services. That went all the way to the United States Supreme Court, who agreed with the Commission’s judgment. 

The Commission now is proposing to try to reinterpret the facts 

and apply it to the other definition. Certainly they have prerogative 

to try. But the facts are fundamentally the same as they were in 

2002, and that will be a very serious source of litigation risk for 

the Commission when it fundamentally changes its mind about the 

factual nature of the underlying service. 

Mr. GUTHRIE. Thank you. My time has expired. 

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

We will now go to Mr. Welch for his 5 minutes. 

Mr. WELCH. Thank you, Mr. Chairman. A couple of points and 

then a few questions. 

Number one, I thank you and the ranking member. This is an 

excellent hearing. 

Number two, we are way ahead of where we were last year. I 

mean, this draft bill does contain I think real responses to the over 

3 million comments that were offered to the FCC. So that is terrific. 

Third, I think the FCC itself, Chairman Wheeler, has been extremely responsive. And I have had confidence that his experience 

104 

in the industry, as well as on the public sector side, makes him 

someone who we can have confidence with respect to light touch 

regulation. 

But number four, and this is the heart of it for me, whatever we 

do, my concern is for access to the Internet and the cost. And three 

out of four Americans, and this is especially true in rural America, 

really only have one provider. So they have no competition in many 

parts of the country. 

So this question of what do we do has been answered affirmatively about trying to maintain net neutrality in this legislation, 

but there has been injected into it a major new issue, which is new, 

and that is, do we take away jurisdiction from the FCC? And that 

is a fundamental question that requires, I think, an enormous 

amount of attention before we make a decision to go forward. 

Mr. Powell, I appreciate the point you made about uncertainty, 

because if you are making big investment decisions, obviously 

knowing what the rules of the road are, are important to you. But 

the uncertainty goes both ways. If you have legislation, it is very 

hard to change it. Let’s be real. We know that. If you have a regulatory policy, it is there, and if it is done right it can respond to 

issues. 

So I want to go to a couple of things that Mr. Misener said, because I appreciated how specific you were. In the legislation there 

is talk about specialized services without definition, reasonable network management without definition in the legislation, and third, 

which parts of the broadband are protected by network connection. 

And under this legislation, if there were a problem in any one of 

those three areas, who would resolve the dispute or provide the 

remedy to somebody adversely affected? 

Mr. MISENER. Thank you, Mr. Welch. 

It is unclear. I mean, there is a direction in the bill to establish 

an ex post adjudicatory process, which sounds nice in practice, but 

it certainly does not provide the kind of certainty and detail that 

most businesses and consumers seek. 

Mr. WELCH. So, Mr. Powell, who would resolve those issues? I 

mean, there is not a dispute here that there is not a definition in 

our legislation. We could all anticipate there will be disputes. How 

would they be resolved? 

Mr. POWELL. First thing I think is really important to note is the 

Commission, under judicial precedent, has the right and the obligation to interpret the words of Congress. What specialized services 

means or any other term of Congress would absolutely be within 

the Commission’s power to interpret and enforce as they best understood it. 

Mr. WELCH. So let me just understand, because that is important, I think, to me at least, what you just said. If there were a 

dispute, you are saying the FCC would have jurisdiction even 

though we are taking jurisdiction away from the FCC in this legislation? 

Mr. POWELL. The draft, as I read it, certainly contemplates the 

FCC enforcing the provisions. 

Mr. WELCH. OK. This is serious, because we know this question 

is coming. Let’s say Amazon had a dispute. Where would they go 

105 

to resolve it? Would they go to their legislator or would they go to 

the FCC? 

Mr. POWELL. Surely, they would complain to the Federal Communications Commission, who as I understand is fully empowered 

to resolve that complaint under the provisions laid out by Congress, as they do with every other complaint in their regulatory jurisdiction. 

Mr. WELCH. OK. Thank you, Mr. Powell. 

Mr. POWELL. You are welcome. 

Mr. WELCH. Ms. Baker, one of the questions that I have is most 

of the open Internet talk centers around over the last mile between 

the Internet service provider and the end consumer. But aren’t 

there very real competitive concerns and potential consumer impacts that arise in the exchange of data between the ISPs and networks too? And how can we ensure under this legislation that the 

interconnection continues to happen for smaller competitive carriers in the telecommunication marketplace? 

Ms. BAKER. That actually might be a better question for Chairman Powell. We have been very focused on the mobile industry and 

the technical parameters that are around the mobile industry and 

the competitive factors on the mobile industry. You mentioned competition and only one provider. In the mobile industry, 8 out of 10 

Americans have a choice of 4 or more providers, 94 percent have 

3 or more providers. So it is a very different issue, so you may 

want to redirect your question. 

Mr. WELCH. OK. I think my time has expired. So thank you. I 

yield back. 

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

I would like unanimous consent to submit for the record a letter 

to Ms. Marlene H. Dortch, Secretary, Federal Communications 

Commission, from various companies, Bluegrass Cellular and others. Without objection, it will be entered into the record. 

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

Mr. WALDEN. We will now turn to the gentleman from Texas, Mr. 

Barton, for 5 minutes. 

Mr. BARTON. Thank you, Mr. Chairman. 

I am going to ask just kind of a general information question. 

The gentleman at the end of the table down there, Mr. Powell, I 

used to know a Michael Powell, but he had some hair. 

Mr. WALDEN. He reached perfection. He is my role model. 

Mr. POWELL. That was at the beginning of net neutrality. 

Mr. BARTON. Is this the same Michael Powell who used to be important, used to be the chairman of the FCC? 

Mr. WALDEN. If the gentleman would yield, yes, I believe that is 

the case, and he has reached folic perfection. 

Mr. BARTON. OK. I just wanted to make sure before I asked him 

a question. 

Now, Mr. Powell, now that I know who you are—and I am kidding, I know you—I wouldn’t kid you if I didn’t know you pretty 

well. 

But he is blushing, Mr. Chairman. Let the record show. 

When you were chairman of the FCC, did your Commission give 

any thought to regulating the Internet under Title II? 

106 

Mr. POWELL. No. As I said, this was a question of first impression when broadband was in essence invented. And that question 

was presented to the Commission of, how should it be properly 

classified under congressional law? So we did weigh whether to 

regulate it as a telecommunication provider under Title II or 

whether to regulate it as an information services provider under 

Title I. The Commission voted to do the latter. 

Mr. BARTON. Are you aware of any academic or industry study 

that claims the Internet is a natural monopoly? 

Mr. POWELL. I am not aware of any study. And in fact I think 

one of the most substantial decisions made by this body in 1996, 

when it passed the Telecomm Act, was to abandon that thesis of 

regulatory policy that the markets are not natural monopolies, they 

should be subject to competitive forces, and it shouldn’t be regulated as such. I mean, I think that is one of the things that concerns us about the historical use of Title II. Built in and woven 

throughout that body of law is the assumption that the market is 

served most efficiently by a monopoly, a state-sanctioned monopoly, 

as AT&T once was for a very, very long time. 

Mr. BARTON. Assuming, and I think it is a correct assumption, 

that the Internet is not a natural monopoly, that it is in fact a competitive market, given your knowledge, both in your prior capacity 

as chairman of the FCC and your current capacity as an industry 

leader, do you view any participant on the provider, the base provider part of the market to have what would be called monopoly 

market power? 

Mr. POWELL. No, not during my tenure. And I disagree that is 

the case today. As an old antitrust lawyer, we know that you don’t 

count noses, you look at what the effects are in the market. Has 

capacity expanded? Capacity has expanded 1,500 percent in a decade. Has the market continued to invest? It invested over a trillion 

dollars in that decade. Have prices gone up to monopoly rent levels? Prices have stayed flat and declined on a per megabit basis. 

I don’t think any antitrust scholar or Justice Department could 

conclude that it is an unhealthy, uncompetitive market based on 

the actual characteristics of the market that they use to measure 

that question. 

Mr. BARTON. Well, if it is not a natural monopoly and there is 

no participant in the provider sector of the market that has monopoly market power, then it stands to reason that the committee 

draft is correct that we should explicitly say you shall not regulate 

or oversee the Internet under Title II. Do you agree with that? 

Mr. POWELL. As I have testified consistently, I do think the cost 

and damage to Americans’ ambitions in broadband and Title II far 

outweigh its benefits. I think that if the narrow task before us is 

to create solid, bulletproof, legally sustainable net neutrality rules, 

which we accept, we believe that can be done without resorting to 

that hammer. 

Mr. BARTON. OK. 

Mr. Chairman, I want to thank the former chairman for those 

comments. I do believe that it is wise to put this out as a draft. 

I think there are some very valid questions—and my friends on the 

minority are asking some of those questions—about how to perfect 

the language. I have some concerns myself about certain parts of 

107 

the draft. But as a base principle, the fact that we should not regulate the Internet under Title II, I think is beyond question. And if 

we start from that premise, I think the discussion draft is an excellent document, and we can iron out the details through these hearings and if you take it to subcommittee markup in the markup 

itself. 

With that, I yield back. 

Mr. WALDEN. I thank the gentleman. 

We will now turn to the gentleman from Kentucky, Mr. Yarmuth. 

Welcome aboard, and—— 

Mr. YARMUTH. Thank you very much, Mr. Chairman, and I want 

to thank the panel. It has been a very enlightening conversation, 

and I am new to this entire area. So I am learning a lot as we go. 

And one of the things that intrigues me about this entire field 

is that we have a field that is changing as rapidly as anything 

probably in history has changed, and we talked—some of the members have talked about the difference between 1996 and now and 

how the world has changed. 

But it is not just the technology that has changed, it is also the 

industries have changed in the sense that this is kind of an amorphous corporate structure that is out there now too. There is a lot 

of consolidation going on. There are companies getting into all various areas of the business so that at one point they are acting like 

a common carrier, at another point they are acting as a content 

provider and so forth. 

So, Mr. Powell, you have mentioned before the distinction between information services and telecommunication services in the 

law. Is that a meaningful distinction today? 

Mr. POWELL. I think over time it shouldn’t be, meaning, you 

know, this is, I think, the case for this institution which I think 

it is already committed to taking on the responsibility to write a 

new act. We are entering into a world in which a bit is a bit. Data 

networks follow radically different characteristics than the ones 

that informed those judgments when these laws were written in 

the 1930s or the 1990s, and I do think that is a continuing problem. 

I think net neutrality is actually just one of the first highly contentious issues related to ambiguity, and it won’t be the last, and 

what concerns me is that I think Title II is even more inapplicable 

to modern functions and modern networks, and I think we will be 

ironing out, if that is the governing body, for years to come how 

it is properly applied to networks that do not behave in the ways 

that existed when those judgements were made. 

Mr. YARMUTH. Right. Thank you. 

Ms. Baker, you say in your testimony this similar conversation, 

mobile broadband is different, and I agree with you that network 

neutrality rules need to be flexible enough to take into account the 

technological differences between networks. 

The draft, though, we are discussing today would restrict the 

FCC’s ability to interpret the net neutrality rules once they are enacted. 

How can the FCC give wireless carriers the flexibility they need 

without the authority to modify or clarify the network neutrality 

rules? 

108 

Ms. BAKER. I think the draft is a great start. I think as we evolve 

we need to work on the definitions and make sure that we have 

the proper definition for reasonable network management. Currently it acknowledges the technological differences. I think that is 

important. We will have to watch all the definitions, but I think 

we have got a great start, and look forward to working with all of 

you on it. 

Mr. YARMUTH. Thank you. 

The 1996 act created a partnership between the states and the 

Federal Government, and each had important telecommunications 

oversight and responsibilities. Our partners in state governments 

and public utility commissions are often closer to the ground and 

can respond quickly to consumer complaints. 

As we are considering this legislation, I want to address this to 

Ms. Gonzalez, should we be thinking about the consumer protection 

role of the states as well? 

Ms. GONZALEZ. Absolutely. In fact, there has been a lot of talk 

recently about the FCC acting to protect local choice in broadband. 

In particular, there is an effort to ensure that states do not restrict 

local communities from building their own broadband networks. I 

have concern that the draft legislation, as it stands today, would 

disempower the commission from addressing that very serious 

issue of local choice for consumers. 

Mr. YARMUTH. And while I have your attention, we have been 

talking about the competitive situation with broadband. In my 

community there is basically one system, and so there is really no 

incentive for them to provide great quality service or consumer 

service. 

Are you concerned about the ramifications for consumer protection if we go down this route literally that is in the draft bill? 

Ms. GONZALEZ. Yes. Absolutely. I think it calls into question the 

FCC’s role in protecting consumers and there may be some competition that might not be an actual monopoly, but I think if you 

ask people around the kitchen table do they feel like they have 

choice in particularly their home broadband connections, I think 

the vast majority of consumers feel kind of trapped. 

Mr. YARMUTH. Yes. I agree. 

I just want to say one thing. It is certainly my preference for 

Congress to act in all of these areas, but I have very serious concerns, again, the way the world is moving, Congress at its optimum 

efficiency moves at about 10 miles an hour, and the world is moving at 100, and I think in this field and many, many others it is 

becoming very, very difficult for us to make long-term policy decisions because the future is so uncertain, and we talk about providing certainty, there is not a lot of certainty out in the world just 

because the worldis changing so fast. 

So, anyway, editorial comment. 

Thank you very much. I yield back. 

Mr. WALDEN. Gentleman yields back. 

We now go to the gentleman from Texas, Mr. Olson, for 5 minutes. 

Mr. OLSON. Mr. Chairman, as you know, today is my first hearing as a member of this subcommittee, and I think I am thrilled 

to be here. 

109 

All kidding aside, Ms. Baker, it is always refreshing to have 

someone who went to school in Houston, Texas, as a panelist. 

As you know, ma’am, the last major update to the Communications Act occurred 19 years ago. Giving the importance of the Internet to our economy, our social fabric, does it make sense for Congress to take a fresh look at how to tackle Internet openness rather 

than try to invoke statutory provisions that are decades old? 

Ms. BAKER. Absolutely, and we are very committed to work with 

you on that. 

Mr. OLSON. Thank you. 

One question for all the panelists. We all agree that these proposed changes by the FCC rule to Title II will bring about legislation. I think we can all agree with that. 

My question is that is going to make for a lot of uncertainty. 

How long will that last? When it is decided by the courts, how 

long? Any idea? A year? Two years? Five years? A decade? Mr. 

Powell? 

Mr. POWELL. Well it is always hard to say without looking back 

historically, but when my commission first adopted the definition 

of information services, it was 3 to 4 years before there was complete resolution of a litigation case because of the ruling of the Supreme Court. 

The commission now is proposing to do fundamentally the same 

thing, a brand-new untested definitional change coupled, by the 

way, with new and untested other applications of forbearance and 

other things. 

So we are talking about potentially a litigation process that typically would run 3 to 5 years depending on its complexity, depending on the parties, and depending on the court system. 

Mr. OLSON. Does that assume applications that decisions come 

out longer than 3 to 5 years, or is that sort of the whole window? 

Mr. POWELL. Well, the problem is if any part of the order is overturned by a court, then there are remands to the commission. That 

could be a whole new commission. This commission will only be in 

power for the next 2 years. It could be remanded to the next administration’s commission. This thing could start all over again. It 

is not a complete exaggeration to say 10 years from now we could 

still be sitting here. 

Mr. OLSON. Mr. Dickerson, your comments, sir. How long? 

Mr. DICKERSON. Yes. Well, first of all, we don’t see the FCC action in congressional action as mutually exclusive. I think, obviously, Mr. Powell has a lot of experience in these areas. So I don’t 

want to contradict his legal expertise and the process expertise. 

I am very encouraged by many of the principles in the bill. I 

have stated the issues that I am concerned about. I think the congressional action can—if the bill is amended in the ways that we 

have described could provide much more certainty and work along 

with FCC regulations. 

I wanted to really quickly while I have the floor amend an earlier 

comment. I wanted to clarify that I will not see the draft FCC 

order before they vote, and I apologize for that mistake. 

Thank you. 

Mr. OLSON. Duly noted. 

Mr. Misener, how about the courts? How long? 

110 

Mr. MISENER. Well, all litigation is optional, and so it might be 

up to the litigants whether they pursue it. If we get a great FCC 

order that everyone loves, maybe no one will sue. Some parties 

have suggested that they are going to sue regardless. It is not we, 

it is they. It is a choice of theirs. 

Mr. OLSON. Ms. Gonzalez, how long? 

Ms. GONZALEZ. I think the risk of litigation comes with an FCC 

order as well as with the proposed legislation. I think no matter 

what there will be legal action to clarify definitional issues in the 

legislative draft, and so while all of us, especially those of us who 

are lawyers who don’t make a lot of money on these issues would 

like to see, you know, as little litigation as possible, I think it is 

unavoidable regardless of the path. 

Mr. OLSON. How about 3 to 5 years like Chairman Powell said? 

Do you think that is the window of this uncertainty? 

Ms. GONZALEZ. I think the draft legislation opens up the opportunity for case-by-case adjudications of various definitional issues 

that the FCC would have to resolve, and so it could even be 

longer—— 

Mr. OLSON. Thank you. 

Fairly quick, ma’am, because Ms. Baker is waiting. 

Ms. TURNER-LEE. Yes. I would actually say that I think the draft 

legislation would actually reduce the amount of time and that we 

will experience litigation—— 

Mr. OLSON. OK. 

Ms. TURNER-LEE [continuing]. If we go towards that. And I also 

think the draft legislation would give the Congress as well as the 

FCC some room to look at some of the areas of the bill because out 

of the 11 principles there is probably one that it sounds like needs 

to be debated, and that is the Section 706 authority piece, but I 

think Congress would act much quicker than the type of litigation 

that we would actual have, and we would avoid the consequences 

of Title II. 

Mr. OLSON. Ms. Baker? 

Ms. BAKER. So the 2010 rules were not published for a while. 

There are various kind of procedural ways that the FCC can extend 

that time before they publish them. Once they were published, they 

were turned back last year. We are now at the FCC revisiting 

those. 

Certainly the best way to act for certainty is for Congress to act. 

So it depends on how you count it. That is 2010. It is 2015. They 

will promote some more rules that will also—depending if they 

really go Title II, they will be litigated. That will be another window of several years of litigation and uncertainty. 

Mr. OLSON. Thank you. 

My time has expired. 

Mr. WALDEN. Thank the gentleman for his participation. 

I ask unanimous consent that we enter into the record a statement on the Verizon Policy Blog from Fran Shammo, the Verizon 

executive vice president, chief financial officer, which deals with 

this issue of investment, and in which Fran says, ‘‘Experience in 

other countries shows that over-regulation decreases network investment. If the U.S. ends up with permanent regulations inflicting 

Title II’s 1930-era rules and broadband Internet access, the same 

111 

thing will happen in the U.S. And investment broadband networks 

will go down.’’ So it was a clarifying statement from December 

11th. 

Ms. ESHOO. Somebody is scolding him. 

Mr. WALDEN. I don’t have any knowledge of that since this was 

December 11th, but would enter that into the record. 

Without opposition, so ordered. 

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

Mr. WALDEN. We will go now to Mr. Loebsack. 

Welcome aboard the subcommittee. As you can see, we don’t deal 

with many controversial issues here. 

Mr. LOEBSACK. I am happy to jump into this one as the very first 

issue that I am dealing with, despite the admonition from Mr. Powell about the difficulty of this subject. 

I want to thank the ranking member as well for this wonderful 

hearing today. I have learned a lot. This is the first hearing that 

I have had on this subcommittee. I am on the larger committee as 

well, and if I might, Mr. Chairman, I would like at the outset to 

request submission for the record a letter from the Internet Association offering their analysis and concerns of the draft bill that we 

are discussing. 

Mr. Chair, I would like to submit—— 

Mr. WALDEN. Without objection. 

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

Mr. LOEBSACK. Thank you. 

I come from Iowa. I have 24 counties in my congressional district. It is a much more diverse district than folks on either coast 

of the United States might imagine. No offense to folks on either 

coast, especially our chair and ranking member here, but we have 

got a lot of issues in a district like mine. It is a very big area. 

What I would like to start off with is a question to you, Ms. 

Baker. Those statistics that you cited, something about 8 out of 10 

folks have 4 choices or—can you cite those statistics again? 

Ms. BAKER. 8 out of 10 Americans have a choice of more mobile 

broadband providers, and 94 percent have a choice of three or 

more. 

Mr. LOEBSACK. And do you know where the 20 percent and the 

6 percent reside? Do you have any idea at all? 

Ms. BAKER. I am certain we can get you a map. 

Mr. LOEBSACK. That would be wonderful. I would really appreciate it. I would suspect, although I don’t know for sure, that it is 

probably in rural areas where those folks reside. 

This is my ninth year in Congress. My first year on this committee, but I have been getting around my district for the last 8 

years, and this is a huge issue that has come up, the access on the 

part of rural areas to broadband, to cellular service, to all the 

things that we are talking about here. That is why I am so excited 

to be on this subcommittee. It was my first choice so I could do 

what I can for the folks in my district, and I want to thank all of 

you. 

Mr. Dickerson, in particular, I knew nothing about Etsy until my 

daughter requested a gift certificate as a Christmas present, and 

I immediately went online and found out what a wonderful service 

you offer. So thank you for you being here as well. 

112 

Mr. DICKERSON. Thank you. 

Mr. LOEBSACK. I support net neutrality, obviously. I am interested in working with both sides of the aisle so we can craft some 

kind of legislation to bring this up to where we ought to be in 2015, 

fully recognizing that we really will never as legislators understand 

all the issues down the road because things are going to be changing all the time. 

We are going to do the best we can, and I do appreciate the majority bringing a bill to the floor—or bringing a draft to us at this 

point so we can spend a lot of time working on this, but as I said, 

the rural areas are really probably my major concern as a Congressman, and I would like to ask, Ms. Gonzalez and perhaps Dr. 

Turner-Lee and maybe the rest of you as time permits what effects 

might this proposed legislation have on our rural consumers, especially the Universal Service Fund programs, universal programs, 

service programs, which were already mentioned briefly? 

Ms. GONZALEZ. Thank you. 

Thank you, Congressman for the question. 

This is one of my deep concerns with the draft legislation as it 

stands. Stripping the FCC of Title II and 706 authority, calls into 

question the ability of the commission to continue ongoing processes that help subsidize expansion of broadband in rural areas as 

well as programs that could make it more affordable for those rural 

folks that do have a connection but can’t afford to connect. 

We are really concerned about, people in rural areas driving 

down the road to wherever they can get a wireless signal to do 

their homework or we need to ensure that this bill does no harm 

to efforts to, you know, increase digital inclusion. It is an important 

imperative for education as well. 

Mr. LOEBSACK. Thank you. 

Dr. Turner-Lee? 

Ms. TURNER-LEE. Thank you, Congressman. 

I actually want to say that I think that the bill, if you flip it on 

the other side, has the promise if we were to look carefully at Section 706 authority over Title II to actually increase the further deployment and adoption in rural communities. I think part of the 

reason why the FCC has the authority of 706 is to get at the very 

issue that you are talking about, and I think by looking at the bill 

in a way where that is a point of debate because it is a discussion 

draft will actually allow us to be careful in the legislative path that 

we do take. 

I mean, if we take Title II—we have already heard from the association leaders about the high capital investment in communities 

overall, but the communities like rural and the communities that 

we are concerned with at MMTC will be the last on the list if capital is depressed among our communities. 

So I think we need to be real careful about that. In the study 

that I did in 2010 of the national broadband map, there was very 

little coverage of census tracks that were the lowest in their areas 

in their states and communities, and it has been since 2010 under 

the light-touch regulatory environment that we have seen a lot of 

growth, particularly with wireless as an onramp for some of these 

communities as well. 

113 

So I would caution against throwing the baby out with the bath 

water with the legislative proposal and to come to the table to really think about what ways can Section 706 perhaps—and we have 

offered some solutions that we are willing to work and sit down 

with congressional members, the staff to talk about, but how can 

you actually leverage that point in there so that to the earlier point 

of the congressman we don’t spend a lot of time wasted where we 

can’t get to the debate of universal service deployment and other 

things that you do care about and we do too. 

Mr. LOEBSACK. I see my time has expired, Mr. Chair, but I would 

like a response from the others if that is possible for the record—— 

Mr. WALDEN. Sure. 

Mr. LOEBSACK [continuing]. Moving forward. 

Thank you so much. 

Mr. WALDEN. Or if they can give it to you really quickly. 

Mr. LOEBSACK. Yes. 

Mr. DICKERSON. I could go very quickly. In my opening remarks, 

I said that Etsy is a democratizing force for entrepreneurship. Democratizing entrepreneurship means providing rural broadband so 

that people are not disadvantaged by where they live on whether 

or not they can take advantage of this great platform that we have. 

So we are concerned that legislation, by revoking the FCC’s authority, could really undermine efforts to promote adoption in rural 

areas, broadband adoption. 

Mr. LOEBSACK. All right. Thank you. 

Mr. POWELL. I think the thing I would emphasize quickly is the 

biggest problem of reaching rural America, which should be a sacred obligation of all telecom policy is because the costs are highly 

uneconomical for entry. 

Mr. LOEBSACK. I understand that. 

Mr. POWELL. And so you have to balance off FCC power with ensuring that we are not raising the cost of providing services and 

further disincenting infrastructure builders from coming into those 

communities, and that is the other worry about moving to a regime 

that could raise those costs. 

Mr. LOEBSACK. Any other—— 

Mr. WALDEN. Any others real quickly? 

Mr. Misener, go ahead. 

Mr. MISENER. Thank you. 

It is hard for me to believe that investment requires blocking, 

throttling, not disclosing, engaging in paid prioritization. 

Mr. LOEBSACK. Thank you. 

Mr. WALDEN. All of which would be banned under our draft. Correct? 

Mr. MISENER. Question whether it is enforceably banned, and 

question whether network operators can get out of it by offering 

specialized services or claiming reasonable network management. 

So there are a lot of questions, but clearly those good things, that 

what I call excellent principles, should be protected. 

Mr. WALDEN. And, remember, you still have the FTC in the 

background unless it goes Title II. 

Ms. Gonzalez. 

Ms. GONZALEZ. To response directly to Dr. Turner-Lee, currently 

the Universal Service Fund is located in Title II in Section 254, 

114 

and so 706 isn’t enough for us to get there, and we want assurances that the commission continue ongoing and upcoming processes to expand access. 

Mr. LOEBSACK. Thank you. 

Mr. WALDEN. Dr. Turner-Lee? 

Ms. TURNER-LEE. In response to Ms. Gonzalez—we are going 

down the line. 

I mean, I think that in terms of Title II clearly you are correct 

in terms of the assurances that are there, but then it comes with 

everything else, and I think that everything else is what we are actually concerned about in our communities if you do go back to the 

conversation about rate regulation, et cetera. 

For the communities that we represent, they are not even at the 

beginning of the finish line of this, and we have a lot more work 

to do, and I think we need to be really cautious about the regulatory action that is taken given the fact that there are 30 million 

people that still do not have broadband access, and Congressman, 

many of them in your area, and I think the fact that we have been 

at this conversation and we keep going into this whirlwind continues to disadvantage the people that we represent that needs to 

get about the business of other issues, and so respectfully, Ms. 

Gonzalez, I think you are right, but I think, the same token, I 

think Title II is just much too excessive to actually get the things 

that we want. 

Mr. LOEBSACK. Got it. 

Mr. WALDEN. Ms. Baker. 

Ms. BAKER. Schools and libraries and rural programs exist as 

broadband is classified under Title I. I think they would continue. 

I think it is a good discussion to have. We have a Comm Act rewrite that is going forward. So I think it is important and we all 

realize it is important and we can continue the conversation. 

Mr. LOEBSACK. Thank you. 

Thank you, Mr. Chair. 

Mr. WALDEN. You are welcome. 

I thought it would be helpful too for the whole committee to hear 

everybody get a shot at it, and, Mr. Loebsack, if you would like to 

meet with Mr. Cramer and me afterwards, we can show you what 

a real rural district looks like. 

We are now going to go to the gentleman from Florida who has 

joined our subcommittee, Mr. Bilirakis, for five minutes. 

Mr. BILIRAKIS. Thank you, Mr. Chairman. 

It is an honor to serve on this subcommittee. It has been a terrific hearing. Thank you so very much. I have a couple questions 

here. 

First for Mr. Powell. After speaking with a medium-sized 

broadband provider in my district, they were concerned that during 

this push for a reclassification the FCC has not conducted a single 

study on the impact that reclassification would have on small- and 

medium-sized operators. 

What are your thoughts on the ability of small- and mediumsized ISPs to handle the increased burden of internet regulation? 

Mr. POWELL. I think it is fair to say they are deeply concerned. 

I would emphasize that the FCC has a legal obligation on the RegVerDate Nov 24 2008 10:16 Jul 13, 2016 Jkt 037690 PO 00000 Frm 00120 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-1 CHRIS
115 

ulatory Flexibility Act to take special consideration of small businesses in the cost benefit analysis of their decisions. 

Our members have filed with the commission raising grave concerns that they have not complied with the RFA as part of that 

analysis. That is an ongoing conversation with the commission, but 

yet another potential vulnerability in the rules that will come out 

from the commission. 

Mr. BILIRAKIS. Thank you, sir. 

Ms. Turner-Lee, and I know you touched upon this, but maybe 

you want to elaborate a little bit, I have a couple areas in my district, Lacoochee and Trilby, as many members do, where even 

today Internet adoption is significantly behind the rest of the country and they are struggling to get reliable broadband up and running. 

Can you explain why Title II reclassification could disproportionately impact and further harm communities with lower broadband 

adoption already? 

Ms. TURNER-LEE. Yes. Thank you, Congressman. 

So in my testimony and on record I actually put more statistics 

in there to actually talk about the fact that relevance actually leads 

when it comes to the reasons why people do not get online. The 

cost of broadband as well as the type of device actually come after 

why do I need to use this tool, and I think for all of us in this room, 

if we want to equalize democracy, as it was said earlier, we need 

to get people online to they can realize the full value. 

The challenge with Title II, to your question, is, you know, again, 

as I have said, that we still have to get everybody to the starting 

point before we get to the finish line, and trying to manage around 

some of the hypothetical harms of what the Internet can do really 

does a disservice, and under monopoly-era telephone service we can 

only talk and hear. Under broadband, we can talk, hear, discuss, 

engage, see, and do other things. 

If a community is of color, we want to solve social problems that 

are chronic, like chronic disease or the lack of educational resources, et cetera. The possibilities and aspirations of the Internet 

are so great, and why would we try to restrict and regulate something that is really just still in its infancy, and for our communities, again, relevance is the issue. 

We have got to move people of color, more vulnerable populations 

like the poor and the disabled and seniors and the folks that do not 

speak English as first language to the Internet for the power of 

government resources so they can move from an inline economy to 

an online economy. We have got to move them into places where 

we can solve those problems much like in Florida where people are 

not taking advantage of the new technology, and having a restrictive Title II stance, I think, has its impacts outside of chilling investment and deployment. 

Mr. BILIRAKIS. Thank you so very much. 

Mr. Powell, will Title II regulation do anything to encourage incumbents to upgrade networks or new companies to enter the market? 

Mr. POWELL. Well, I would like to take the latter part of your 

question because I think this is a serious overlooked aspect of Title 

II. It is a major disincentive for a new competitor to enter the marVerDate Nov 24 2008 10:16 Jul 13, 2016 Jkt 037690 PO 00000 Frm 00121 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-1 CHRIS
116 

ket, and all you need to do to look for evidence is some of the examples that are held up as sterling new entry like Google Fiber. 

Google Fiber entered the market, by the way, it only entered the 

market in a handful of selected cities, it elected to provide 

broadband service and it elected to provide video service but refused to offer telephone service. 

It refused in its own public statements in saying it chose not to 

provide telephone service because of the regulatory compliance 

costs associated with being a telephone company. In fact, the President of the United States was in Iowa recently, in Cedar Falls, 

talking about the municipal broadband company that provides a 

very fast Internet service. That company also provides broadband 

and video service. To date, provides no telephone or telecommunication service in part because of the regulatory cost incentives. 

Title II fundamentally assumes an incumbent state-sanctioned 

monopoly, and it tends to provide a regime that is very hostile to 

entering and providing a new and competitive alternative. 

Mr. BILIRAKIS. Thank you very much. 

I yield back, Mr. Chairman. 

Ms. GONZALEZ. Gentleman yields back his time. 

We now go to the gentlelady from California, Matsui, for five 

minutes. 

Ms. MATSUI. Thank you very much, Mr. Chairman, ranking 

member, for hold this hearing today. 

You know, the Internet is very dynamic, and I must say this 

hearing has also been dynamic and lively, and has been much appreciated, I know, by the members here. 

You know, a year ago no one was talking about paid 

prioritization. Now people are talking a lot about it. It is also called 

Internet fast lanes. Now, it is central now to the net neutrality debate, and that is why I had introduced a bill with Senator Leahy 

to ban paid prioritization or so-called Internet fast lanes. 

Now, the reason why I bring this up is because this is where the 

consumer gets involved. The consumer understands this, and when 

I had my hearing and at home when I talk with people, they understand. They don’t like the idea of having to pay extra to access 

the content of programs they want to see or view online, and this 

is pretty clear, and I talk to some of the anchor institutions, schools 

and libraries, and they also feel that they can’t afford to cut deals. 

Neither can the start-ups cut deals with each ISP to compete. So 

this is very central to what we are talking about today. So our policy has to be very clear about how it impacts the consumer. 

Ms. Baker and Mr. Powell, do your associations support a ban on 

paid prioritizations? And I would like a yes or no. 

Mr. POWELL. Yes. 

Ms. BAKER. Yes. 

Ms. MATSUI. Thank you. 

Ms. Gonzalez, and I would like Mr. Misener to comment on this 

too, from a consumer point of view, does the bill truly ban all forms 

of paid prioritization, and if not, why? We have been talking 

around this, but can you please expand on this, and also Mr. 

Misener? 

Ms. GONZALEZ. Sure. So I think as many have raised, there is a 

question around the definition or lack thereof of—or the vague defiVerDate Nov 24 2008 10:16 Jul 13, 2016 Jkt 037690 PO 00000 Frm 00122 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-1 CHRIS
117 

nition of specialized services and whether or not that creates a 

giant loophole that could severely diminish the rule that was intended to ban paid prioritization. I think it is also worthwhile to 

consider issues of discrimination on the Internet that fall outside 

paid prioritization, and there are quite a few. 

Ms. MATSUI. OK. Mr. Misener? 

Mr. MISENER. Thank you. 

I think in addition to the concern about specialized services 

which, by the way, isn’t just possibly a loophole for, quote, ‘‘paid 

prioritization by third parties,’’ but rather by affiliated companies 

engaged in more or less the same behavior. You can imagine a 

Internet broadband access provider also having an affiliated content business which gets special treatment. It wouldn’t be paid 

prioritization in the sense that they were getting paid by a third 

party, but it would be prioritizing traffic based on the ownership 

rather than a payment. 

The other two areas of concern are ones that we have discussed 

previously. One is keeping the reasonable network management 

carveout as narrow as possible, and we should again view that 

askance if it does seem to favor some content over others. 

And, lastly, of course, this business about where in the network 

these things could occur. It needs to be clear in the bill that it is 

throughout the broadband Internet access service provider’s network. 

Ms. MATSUI. Do you feel that this bill is a good starting point? 

How do you feel about this? 

Mr. MISENER. Are you asking me? 

Ms. MATSUI. Yes. 

Mr. MISENER. Yes. I do. I do. I think it is a novel approach where 

a set of principles, and which I have called excellent principles, are 

clearly defined and then capped with a ceiling. If that actually 

works, it is a great start, but our concerns expressed today are that 

how they would actually—how that ceiling with the great principles would actually work, but if it works, that is a great start. 

Ms. MATSUI. Ms. Gonzalez, you feel the same way? 

Ms. GONZALEZ. I am certainly pleased that members on both 

sides of the aisle agree that that net neutrality is a serious problem 

and we need to address it through government action in some way 

or another. 

I have serious reservations about the draft legislation as it 

stands, mostly given the level of authority that it would strip of the 

commission right now and the lack of inclusion of a ban on unreasonable discrimination on the Internet. 

Ms. MATSUI. OK. Well, you know, I strongly believe that we have 

to get this right, either at the FCC or Congress. It is far too important. 

You think about the Internet affects everything that we do in our 

lives, and this is—and I think that this is—the first thing I think 

is a starting point is 100 percent ban on paid prioritization, and we 

have to figure out how to do that, and there can’t be any loopholes. 

I mean, you are talking about some loopholes already. So we have 

to start addressing that. 

If we can’t get that right, we are moving backwards. Our consumers will know that we are moving backwards, and we are really 

118 

stifling competition when you think about that too. I have heard 

from many start-ups who really feel that they were able to start 

their businesses, but in fact if we don’t play this right and ban paid 

prioritization, we will go backwards, and if we don’t ban it, institute strong net neutrality protections for consumers and innovation. 

So I truly believe that this is our opportunity, and this is a wonderful hearing to begin the discussion. 

So I yield back. Thank you. 

Mr. WALDEN. Thank the gentlelady for her comments. 

And we will look forward to working with Mr. Misener, and we 

appreciated your comments as well as we try and—that is obviously not our intent to ban it and then come back and create a 

loophole and allow it to go through. So I appreciate your willingness to work with us on that. 

We are going to go now to the gentleman from Ohio, Mr. Johnson. New member of our subcommittee and delighted to have you 

part of the team. 

Mr. JOHNSON. And winner of the national championship, Mr. 

Chairman. 

Mr. WALDEN. And the gentleman’s time has expired. Let’s go—— 

Mr. JOHNSON. No. In all seriousness, Mr. Chairman, it is an 

honor to be on the subcommittee. Under your leadership, I look forward to the work that we will—— 

Mr. WALDEN. No amount of sucking up is going to get you out 

of that one. OK? 

Mr. JOHNSON. All right. I will buy you a new red tie later. 

To the panelists, thank you folks for being here. I have about 30- 

plus years of private sector and DOD experience in information 

technology, and so I am very familiar with the issues that we are 

dealing with and the criticality of those issues. 

I can remember back in the 1970s when I first got started in information technology and telecommunications, we went through 

generations of technological upgrades about every 10 years. There 

was a generation from the 1970s to the 1980s and then the 1980s 

to the 1990s and about the mid-1990s leading into the 2000s it 

began to accelerate to where we are today. I mean, many of the devices that we all use on a daily basis, many of them weren’t even 

here even 5 years ago. 

Today we see technological turnover about every quarter almost. 

As soon as one model comes out, the next one comes in. And so 

technological innovation requires the right conditions, and more 

government means less flexibility and fewer opportunities to grow. 

I think it was President Ronald Reagan that said, ‘‘The answer to 

our problems is never more government.’’ 

If you look at what the telecom industry needs, in order to be 

successful it needs to be nimble in order to innovate, which it can’t 

do if a heavy hand of government prevents it from doing so. Windows of opportunity in the industry of telecommunications, they 

only open for a very, very short period of time, and innovators must 

have the certainty that if they jump into the fray and if they put 

big investments on the next great big thing, that they are going to 

be able to take advantage and get a return on their investment. 

119 

So, these issues that we are talking about today are extremely 

important, I know I represent a very rural district. We have talked 

about how important this is to some of those areas, and I appreciate those comments. 

Mr. Powell, in NCTA’s comments to the FCC in the open Internet docket, it is stated that Title II reclassification, and I quote, 

‘‘Would dampen the very infrastructure investment the commission 

seeks to foster.’’ These comments go on to indicate that the reclassification, again, quote, ‘‘Would require providers to divert substantial time and resources to design and implement numerous systems 

and processes necessary to comply with the various requirements 

and obligations of Title II.’’ 

Can you quantify in any way the time and resources that you are 

describing in those comments? 

Mr. POWELL. Well, I think it would be difficult to put a number 

on it without agreeing to what the scope is we would have to comply with it, and I think, as we have all recognized, it depends on 

what you are going to be subject to and what you are not. There 

are 1,000 Title II regulations. How many of them will apply, to 

what depth they apply, and what your obligation is on them is a 

huge open question. 

Mr. JOHNSON. Is it safe to say, though, that this type of diversion 

of time and resources will have the effect of chilling innovation? 

Mr. POWELL. If people want a better understanding of this, they 

would go read the history of what the biggest regulatory problems 

were in the 1960s, 1970s, and 1980s with telephone companies. 

There was an enormous dissatisfaction that they were not investing, that they were not innovating. 

What was the last telephone innovation you recall in the area of 

wired phones? Was it the pink princess phone or the blue one? I 

mean, there was a real disincentive belief, and it has been the government’s policy, both at the FCC and Congress, to be retreating 

from those regulatory tools for decades in order to spur more investment and innovation into those industries, and it really was 

that retreat that helped foster and explode the wireless—— 

Mr. JOHNSON. Right. 

Mr. POWELL [continuing]. Industry, the cable industry as a competitor to broadcast and a whole host of other industries with the 

revision of those policies. 

So I think there is plenty of examples of the way that Title II 

or that kind of regulatory model disincents and if you need one last 

example, go look at the experience in Europe, who when we defined 

it as an information service, they pursued the equivalent of Title 

II regulation. Their ministers today are calling for an end to that 

regulatory environment and an adoption of the U.S. model because 

of the depressing effects on innovation and investment and—— 

Mr. JOHNSON. Like I said, more government is never the answer 

to the problem. 

Ms. Baker, do you have a thought on that as well? 

Ms. BAKER. Sure. I would follow up on his example with Europe, 

because as we talk investment, if we want to put some hard numbers to it, we in the wireless industry don’t have it because we 

have never been under title II, but a real world example is Europe, 

and from 2011 to 2013 we put 73 percent more capex in investment 

120 

than Europe. Our networks are 30 times faster, and we have three 

times more LTE, which is the 4G platform than the rest of—than 

Europe. 

So we don’t know how much this would chill. We don’t know— 

certainly we are going to continue to innovate. We are going to continue to invest. The question is how much. Maybe not as much, and 

I would say that when we looked towards the future, we look towards specialized services such as the connected car and what mobile health services are going to offer, and we are going to need to 

have smarter, faster, stronger networks to perform our connected 

life activities. 

It is going to be really exciting, but we want to make sure that 

we continue the framework that has shown such great investment 

and such great opportunity that we are leading the world. 

Mr. JOHNSON. Mr. Chairman, the case has just been made why 

it is to critically important that we do this right. Innovation, particularly in this industry, gives us the tools that we need to get our 

economy thriving once again, and we need to make sure we do this 

the right way. 

And I yield back. 

Mr. WALDEN. Appreciate that. 

Appreciate the gentleman’s experience. We are glad to have you 

on the subcommittee. 

We will turn now to the gentleman from California, Mr. 

McNerney, for 5 minutes. 

Mr. MCNERNEY. Well, Mr. Chairman, I am thrilled to be back on 

this subcommittee, and I want to thank you for holding this hearing and for trying to get ahead of this issue by issuing the draft 

legislation. 

You heard our deep concern about the reduction of the enforcement authority both from the Democrats on the panel and from 

many of our panelists. 

Mr. Chairman, I would love to be able to vote for the final package, and I hope that we can work together to find something that 

would work. 

Mr. Powell, I certainly sympathize with your concerns about 

overregulation raising cost to the providers. However, I also have 

concerns about reducing enforcement authority,thus raising the 

cost for end users. 

But my first question has to do with the forbearance of the Title 

II requirements. Mr. Wheeler has indicated that he is willing to 

forbear, and even if he does this, the current concern is that the 

legislation may inhibit the FCC’s ability to react and adjust to 

technological advances. 

Do you share that concern that the legislation would inhibit the 

FCC’s ability to react? 

Mr. POWELL. Well, I think the FCC has way more to react and 

interpret than is being suggested. The FCC, with any Congressional act, has the first instance in responsibility to interpret those 

provisions and enforce them across a wide range of activity. Even 

in the context of specialized service, if the effect of something someone was doing was to block or ban or throttle, I am absolutely confident the commission could reach that behavior even under this 

statute. 

121 

The complexities of forbearance are substantial. Everybody, including the chairman, have professed an interest in doing so. If one 

were to pull out the record, many of the advocates arguing that 

this is easy to do and will be a light touch are all on record with 

laundry lists of other provisions that should not be forborne from. 

Groups like Public Knowledge and others have long lists of additional requirements that should be maintained. 

There are also serious questions about—— 

Mr. MCNERNEY. Do you think that the FCC is more agile than 

the Congress in addressing these complex issues? 

Mr. POWELL. Not always, to be perfectly honest. The commission 

and Title II have been no bastion of efficiency over time. Regulatory proceedings rarely take less than a year. They often are 

quite exhaustive and take a lot of time. Sometimes that is because 

they struggle to find clear direction from Congress as to how to act. 

The clearer that direction and the more direct it is, the more expeditious the process works, even with FCC implementation. 

Mr. MCNERNEY. Well, we have a chance to pass legislation here, 

I believe, but it may be a 2015 piece of legislation that is in effect 

for 10 years. So we have to get this right and give the FCC the 

flexibility it needs to carry out those intents. At least that is my 

opinion. 

Miss Gonzalez, would you briefly summarize for us the types of 

litigation risk the FCC will likely face under the approach provided 

by the draft legislation. 

Ms. GONZALEZ. So I think there is quite a few factual determinations. If we are talking about procedural risks that the legislation 

poses, I think it puts the burden on consumers to, first of all, assess whether or not they have had their net neutrality rights violated, and then to figure out how to bring that before the commission, and it is somewhat complicated adjudication process that requires lawyers that even many of the start-ups that do have some 

resources, more resources than consumers at least, have said they 

would be unlikely to be able to engage in because they have limited 

legal counsel. 

But beyond that, after those decisions are issued, there could be 

follow-up litigation because this creates a situation where we would 

have to get to the details on a case-by-case basis which could not 

just be one lawsuit that would likely come from the FCC order, but 

a series of lawsuits. 

Mr. WALDEN. Would the gentleman yield? I was trying to get 

clarification. 

Mr. MCNERNEY. I don’t want to lose too much time here. 

Mr. WALDEN. I will give you a little extra with unanimous consent, but how is what we are proposing here directing the FCC to 

put in place appeals mechanism so consumers can appeal differ 

from how it works across any other agency in the government? I 

am confused. 

Don’t we want citizens to have that ability to file a complete and 

appeal and—— 

Ms. GONZALEZ. We want them to have the ability, but we also 

want the Internet service providers to have the burden to show 

that they are not discriminating. 

122 

So it is really about how we are shifting the burden, and it is 

really difficult for—there is actually not a lot of us consumers activists doing this work, and so it is really difficult for consumers 

to carry the burden alone. 

Mr. WALDEN. We will continue this conversation. 

Ms. GONZALEZ. Sure. I would be happy to continue the conversation. 

Mr. WALDEN. And I will go back to the gentleman because I—— 

Mr. MCNERNEY. Thank you. 

Mr. Dickerson, do you think that the FCC has a role to play to 

ensure robust broadband competition? 

Mr. DICKERSON. Absolutely, and one of our concerns with the 

draft legislation is the revocation of authority of the FCC to do 

that. 

Mr. MCNERNEY. OK. Miss Gonzalez, do you think the broadband 

market is sufficiently competitive to protect consumers on its own? 

Ms. GONZALEZ. Not at this time. 

Mr. MCNERNEY. OK. Thank you. 

I will yield back, Mr. Chairman. 

Mr. WALDEN. The gentleman yields back the balance of his time. 

We go now to the gentleman from Missouri, Mr. Long, for 5 minutes. 

Mr. LONG. Thank you, Mr. Chairman. 

And, Mr. Powell, a minute ago you were talking about technology 

and the old land lines and telephone development, our choices were 

pink princess phone or a blue princess phone, and I had to think, 

my 20-year-old daughters—20-something, they are in their 20s, 

what they would do if I handed them a rotary dial phone today and 

said: Here. You need to make a telephone call. I question whether 

they would be able to do that. 

And I saw a cartoon the other day of a young man in 1983, and 

he probably weighed 120 pounds, and he had a desktop computer, 

like we all had, about that size, and it showed 2015 and his computer was now this size, and he weighed about the same thing I 

do today. So while his computer got smaller and he got larger, that 

is kind of what—with this, I am given a reminder or reminded 

about the story that Steve Forbes used to tell that if the cell phone 

development was left to the United States Government, what we 

would have—because in that same year, 1983, first phone I had 

was a brick phone and made by Motorola. 

It weighed two pounds, and in 1983 it cost $3,995. This phone 

didn’t cost me $3,995, and Steve Forbes told the story something 

to the effect of if it was left to the government to develop cell phone 

technology today, that same 2-pound phone would weigh 4 pounds 

and it would cost $7,995. So I think that innovation is a pretty 

good thing, and the government, the more it stays out of it, the better we would be. 

We have had a long hearing here today. Had a full table of witnesses. Lot of my colleagues have spoken before me as they are 

prone to do in these things. Usually the time it gets around to me 

I am one of the wrap-up guys. The time it gets around to me a lot 

of the questions have already been asked, and so normally I like 

to kind of cut to the chase at this point and just get to the meat 

of the issue. 

123 

And, Mr. Powell, sticking with you here, the consensus is that 

the Internet should be open and vibrant. Everybody agrees to that. 

But isn’t the controversy really about the extent of the FCC’s authority to ensure that it remains open and vibrant, whether the authority should be derived from Title II or Section 706, doesn’t it 

make sense for Congress to make that call? 

Mr. POWELL. Well, yes, sir. I think we have to recognize that it 

is not for the FCC or any regulatory agency to create its own jurisdiction. It is for it to act on the jurisdiction provided to it by this 

institution. There is no question that the reason this has been a 

tortuous and long debate for a decade is because the ambiguity surrounding the commission’s authority to adopt a set of rules that, 

as you can tell from this panel, have almost near unanimous consent around the substantive rules we are attempting to achieve. 

The only thing that is being argued about is what authoritative 

basis that is executed on, and every time the commission attempts 

to do that on its own it is going to face, necessarily, litigation, complexity, and challenge around that. 

That is within the power of this institution to pre-terminate, end, 

and settle once and for all, and I think that is why we are so supportive of your efforts to find bipartisan conclusion. 

Mr. LONG. Well, the Title II proponents tell us not to worry 

about the onerous provisions of title II because the FCC can simply 

forbear from applying them. 

Is there anything simple about forbearance and couldn’t numerous individual legal battles occur regarding what the commission 

has and hasn’t decided to forbear upon the net neutrality once the 

orderis released? 

Mr. POWELL. Asking me, sir? 

Mr. LONG. Yes. 

Mr. POWELL. I think people—not a lot of understanding of how 

forbearance works. First of all, there is an institutional risk here. 

It is a pretty hostile thing to say that a regulatory agency should 

sweep away broadly an act of Congress without Congress directing 

it to do so. If you get sweeping forbearance, which we are desperately relying that we will get, is the commission doing something in an untested untried way that essentially eliminates statutorily passed, Presidentially signed legislation, and that poses significant legal risk. 

The other challenge with forbearance is the commission must 

make very specific findings for every rule that it forebears from, 

and it will attempt to do that in a global way we hope, but there 

is a real risk that the courts will say: You are not permitted to do 

that. You are not permitted to just brush away a whole title. You 

have to explain with micro detail why each of these rules doesn’t 

meet the standards Congress set out for you. If that ends up being 

the law, we are talking about a real morass of a process to go 

through rule by rule and make a separate and independent forbearance finding. 

For example, the commission in the past in forbearance proceedings has often said that it has to do it by market. So the forbearance definition says is the market competitive? Well, whatis 

the market? The market in Missouri is arguably different than the 

market in New York City. There have been times when the comVerDate Nov 24 2008 10:16 Jul 13, 2016 Jkt 037690 PO 00000 Frm 00129 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-1 CHRIS
124 

mission has said it can only assess that question on a specific market basis. If that turns out to be required, now we are talking 

about a voluminous set of calculations about whether a rule can no 

longer be implemented or not. 

It is easy to believe the commission is just some plenary authority free to make these judgments as it sees fit, but it is bound very 

strictly by the tools that this institution sets out, and while certainly it can try, and I understand its sincerity, and we are committed to trying to get the best resolution, it is fraught with complexity that can easily be cut through by this institution. 

Mr. LONG. OK. Thank you. 

I was going to save a little time to yield back to the chairman 

and let him tell us everything good about the Oregon Ducks and 

how good they are going to be next year, but I think I am out of 

time. 

Mr. WALDEN. But I could yield you more for that purpose. 

We will turn now to the gentleman from Illinois, Mr. Rush. 

Mr. RUSH. I want to thank you, Mr. Chairman, for this first-class 

hearing, and I want to thank the panelists for being an all-star 

panel of witnesses. 

Mr. Chairman, I want to ask the panel if they would answer this 

question in the Dingell-esque fashion, this first question, with a yes 

or no answer. 

Do you think that the FCC is on a collision course with the D.C. 

Circuit again if it exercises its Section 706 authority to reclassify 

broadband Internet access as a common carrier service under its 

rules? Yes or no beginning with Chairman Powell. 

Mr. POWELL. Yes, sir, I do. 

Mr. DICKERSON. Yes. 

Mr. MISENER. If the network operators choose to make it so, yes. 

Ms. GONZALEZ. Is the question whether they will go to the D.C. 

Circuit or whether the D.C. Circuit will uphold the decision or not? 

Mr. RUSH. Will they be on a collision course? 

Ms. GONZALEZ. I think it is certain to go to litigation. I do believe 

that the D.C. Circuit will uphold the Title II if it is done well. 

Ms. TURNER-LEE. Yes to a collision course. 

Ms. BAKER. Yes. 

Mr. RUSH. All right. 

Chairman Powell, you have hit on this, but I want to ask you 

again in more of a forthright manner. 

Do you have any concerns that under the Republican draft Congress will be restating its intent to say that Section 706 is not a 

direct grant of statutory authority? 

Mr. POWELL. Let me say that I think that is a question for Congress, but representing my industry, we do not have problems with 

the commission retaining some 706 authority and breathing room 

to address changing circumstances as the D.C. Circuit found. 

I found the D.C. Circuit interpretation of 706 questionable; highly in conflict with past rulings of the commission and Congressional 

intent, but the D.C. Circuit ruled that that is what it meant, and 

I think we would rather live with the FCC administering that provision than Title II. 

Mr. RUSH. Thank you. 

I want to move on to Dr. Turner-Lee. 

125 

Are you concerned that the FCC would not be able to deploy 

broadband services and invest in network facilities that provide 

service to low-income rural and minority communities under this 

proposed bill? 

Ms. TURNER-LEE. Under the current bill, I think, as it has been 

said, if there were some additional discussion around the provision 

of Section 706 authority as we have all talked about, I actually 

think, Congressman, to your question, that it would be a win/win 

for what we are looking for in terms of broadband deployment for 

low income consumers as well as rural communities as well. 

As I said earlier, it would also be a great way to look at a proclamation against digital red lining that has the potential to back stop 

and limit progress of what we have been trying to do when it comes 

to ubiquitous deployment among communities. 

I honestly want to just keep reiterating that, you know, adoption 

still is at the top of this debate, and it continues to get swept under 

the rug when we talk about these issues, and so we are looking for 

some type of parody. In the legislative proposal, I think that that 

should stay top of mind as well as the legitimate consumer concerns that need to be dealt with. Even in the case of specialized 

services, consumer demand is driving everything. 

So I think it is important to keep that as the bill is discussed 

and debated, top of mind, Congressman, but I think to your point 

we have to avoid that collision course that you just mentioned, and 

we are on that pathway if we don’t put in the right effects to actually make sure that we don’t do that. 

Mr. RUSH. Miss Gonzalez, I wanted to ask this question. I only 

have 30 seconds—well, 37 seconds. The chairman might be graceful 

and give me a couple of more seconds. 

The Republicans draft would authorize the FCC to hear and adjudicate complaints brought by individuals against their Internet 

broadband provider on a case-by-case basis. 

Should these complaints and outcomes be germane to FCC consideration on whether certain merger transactions would promote 

the public interest? 

Ms. GONZALEZ. I am sorry, Mr. Congressman. Is the question 

whether or not this would serve the public interest to allow the 

commission to adjudicate on a case-by-case basis? 

Mr. RUSH. No. If in fact the commission—should they consider 

that certain merger transactions in association with these complaints brought by individuals, would the FCC take—should the 

FCC consider these complaints germane to its decisions regarding—— 

Ms. GONZALEZ. On mergers? 

Mr. RUSH. Yes. 

Ms. GONZALEZ. Well, I think when it considers complaints, it has 

to look at the ecosystem in general to determine whether or not 

there is competition. I think merger determinations are in separate 

dockets, and rightly so. 

But certainly when considering what kind of protections we need, 

we need to look at the marketplace and whether or not there is 

competition in the merger. You know, mergers and acquisitions and 

the level of competition certainly is relevant. 

Mr. RUSH. Thank you. 

126 

Mr. Chairman, I just have—if I can ask for an additional 45 seconds. 

Mr. WALDEN. If you go fast. 

Mr. RUSH. OK. As you all know, the cash cow of competition 

around the passage of the 1996 Telecommunications Act was really 

a long-distance voice. That is where the profits and traffic volumes 

were. Congress gave the FCC and state commissions authority to 

allow competitors to enter in their local phone markets through resale and interconnection. That was the regulatory, and we saw billions and billions of dollars and investments follow into that sector, 

but times have changed. 

Congress knew about the Internet then, but only a few peoples 

around the world knew what a game changer the Internet would 

become. By the turn of the decade, it had become more apparent 

that the cash cows of communications were not long-distance voice 

but instead wireless voice and later broadband data. 

Mr. Powell stated that over the course of a number of proceedings, the FCC found that broadband Internet access services 

are more like information services than telecommunications services. And perhaps Congress should have stepped back in and reconsidered these definitions, but we did not. 

And, Mr. Chairman, I think that we are on our way with this 

hearing and with additional hearings trying to settle the question 

of do broadband Internet services now fit the criteria for telecommunications services more than information services? 

And with that I yield back. 

Mr. WALDEN. Thank the gentleman. 

Thank the gentleman. 

I will now go to the gentleman from New York, new member of 

our subcommittee, Mr. Collins. 

Mr. COLLINS. Thank you, Mr. Chairman. 

I want to thank all the witnesses. As a new member, we are 

playing catch up a bit, and your testimony has been very valuable. 

My question is for Ms. Baker. I know wireline and wireless, they 

are two different worlds, and you represent the wireless world. And 

the language in our bill does talk about reasonable network management. I would think that is the attempt to give you and the 

wireless some flexibility, because you are in different worlds. 

I also seem to understand your industry is adamantly opposed to 

Title II. So we are here and we are talking and we understand 

there is difference. Could you expand a little bit on the reasonable 

network management language, which all of us embrace but may 

be difficult to interpret, and let me know how you see it impacting 

the wireless world? 

Ms. BAKER. Thanks for the question. 

Yes, the wireless industry is different for a number of different 

reasons. The number one that I think we all have our arms around 

is the technical parameters. We operate on the spectrum, which is 

limited capacity, which is shared, and it is moving. So we need dynamic management millisecond to millisecond, and it changes all 

the time depending on who is sharing the spectrum. And it is going 

to change from today to 45 days from now, because someone is 

going to come up with a more efficient way, and we are going to 

upgrade our networks. 

127 

But they are not just technically different, they are also competitively different, and so our guys need to be able to differentiate different services so that they can compete more effectively against 

each other. We are worried what happens in Title II is that we 

might become one size fits all, and that is not what we want the 

wireless industry. We want the wireless industry to remain dynamic and competitive and continue to innovate and differentiate 

themselves. 

We are also very new, so we are worried with the Title II world 

that we would not be able to introduce some of the exciting things 

that are coming from the wireless platform. I talk about connected 

life, meaning mobile health, connected cars, some of the innovations in education. 

So we want to make sure that our future in wireless, we are the 

world’s leader in 4G, and we want to make sure that we are the 

world’s leader in 5G. We think this bill is a great start. The definition of reasonable network management includes technology. We 

will work with the committee on other definitions. But we are encouraged from the action here because we think the FCC is headed 

down the wrong path. 

Mr. COLLINS. That is very helpful, because I am glad to hear you 

are embracing what we are doing, especially that language, and 

that you feel your industry can live with that language. And certainly I think the committee would be very open as this moves forward. And I just know that there has been that discussion, because 

they are two different worlds. Very happy, again, to hear your support of this critical legislation. 

With time running late, Mr. Chairman, I will yield back the balance of my time. 

Mr. WALDEN. The gentleman has yielded back the balance of his 

time. 

It looks like we will go to our final member at the dais, Mr. 

Cramer of North Dakota. Thanks for sticking with us, and thanks 

for being on the subcommittee. 

Mr. CRAMER. Thank you, Mr. Chairman, for the opportunity. And 

as you know, I spent nearly 10 years in North Dakota regulating 

various industries. And the more telecom cases that came before 

us, the less I was enthused about it, because it just seemed like 

every case that came before us was about a new technology that 

required less regulation, not more. 

Nonetheless, I was happy to carry out really several cases, some 

landmark. I think we did one of the early ETCs for a wireless company. We did an early VoIP interconnection case with a rural telco. 

We did a very contentious cable company seeking facilities-based 

ILEC in the Bakken. I don’t know that any of them were unanimous. I am proud to say I was on the prevailing side, and all of 

them were held up in court, both federal and state court. That said, 

I don’t feel as smart as I used to today for some reason. So I appreciate everybody. 

I also have to say that I was amused by Ms. Eshoo’s admonition 

of Catholic confession with Mr. Shimkus, but I noticed that he said 

he came kicking and screaming, which is far short of repentance, 

I will tell you. 

Ms. ESHOO. It is part of it. 

128 

Mr. CRAMER. I appreciate, Chairman Powell, your reference to 

the omission of the RFA in this by the Commission, because this 

is a far too common omission by several regulatory agencies in recent years, and it was one that hadn’t come to my attention yet. 

But you are right, I think a lot of issues could be solved much better, much more to the liking of investment opportunity if we were 

applying the RFA appropriately. 

I am also interested in this issue of specialized services. And 

maybe this will demonstrate my ignorance a little bit. But if we are 

on the one hand arguing that we should give and we trust the 

FCC’s use of flexibility in determining forbearance, why wouldn’t 

we trust their flexibility in determining specialized services under 

this draft? And is there some way we can tighten that up if it concerns people? If somebody wanted to take that one on. 

Mr. Misener. 

Mr. MISENER. Yes, thank you for the question, Congressman. I 

do believe the FCC, as the specialized agency, ought to be empowered to help flesh out rules, provide through notice and comment 

rulemaking the detail and certainty that both businesses and consumers need, under, again, that ceiling set by Congress. So if the 

bill goes forward, the ceiling is fine, but the commission ought to 

have the authority beneath it. 

Mr. CRAMER. Did you want to take a stab at that, Mr. Powell? 

Mr. POWELL. Well, I just wanted to quickly say, in this denigration of specialized services this Commission has repeatedly held 

that there is room for specialized services, even in its 2010 rules, 

because it believed there were really serious consumer-benefiting 

characteristics to that. 

The reason specialized services is an issue is we use the same 

network for the provision of proprietary services that we built and 

privately financed and own a network to deliver. A huge amount 

of that capacity is reserved and used for the services we are in the 

business of selling. There is an effort, subtle or otherwise, to confiscate the entire platform for public Internet use. 

What the FCC recognized was some portion of that infrastructure will always rightfully be available to the incumbent who built 

the network to deliver the services and innovate for their consumers in the provision of the services they are in business to provide. You have to provide for an allowance for specialized services 

lest you are creating a taking of property in its totality. 

Now, if Mr. Misener is correct, can we talk about how you define 

it or what the FCC’s flexibility in interpreting it? I have absolutely 

no problem with that. 

Mr. CRAMER. Dr. Turner-Lee. 

Ms. TURNER-LEE. Thank you. And Congressman, if I may, I will 

just add on real quickly to the other comments. 

I think there is a conversation that can be had about specialized 

services, particularly if you go back to much of my testimony about 

adoption and relevance. If we look at the case of zero rating programs, for example, for low-income minority communities that are 

not engaged, there is some space to actually have some discussion 

on how those could be used for a public interest. I think it comes 

back to a legitimate consumer concern, and questions related to 

who is to say today that tomorrow we won’t be looking at telemediVerDate Nov 24 2008 10:16 Jul 13, 2016 Jkt 037690 PO 00000 Frm 00134 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-1 CHRIS
129 

cine delivery and our ability to get our health records in real time 

not being important to us. 

I think there is some room for conversation, and with the FCC 

as the expert agency to help us guide that discussion as to what 

is important to consumers. 

Mr. CRAMER. Well, and that brings me to another point that, 

again, maybe I am not understanding clearly, but we have heard 

a lot of bemoaning of the 706 authority, Title II authority being 

stripped away, and that somehow that leaves the FCC powerless, 

and we haven’t talked a lot about their ancillary authority, which 

is there to deal with a lot of these issues. And the ones that aren’t 

there, we are here. I mean, Congress, there is a new one every couple of years. I feel like for too many years Congress has sort of just 

let the agencies become Congress. And I think that is the balance 

we are trying to strike. And I don’t know if somebody has a few 

seconds to add to that. 

Mr. GONZALEZ. I can respond to that, Mr. Congressman. 

Mr. CRAMER. Sure. 

Mr. GONZALEZ. The reason we are concerned about the stripping 

of the 706 and the Title II is because of court cases in the past, 

you know, four decades that have really stripped the FCC of much 

of its ancillary authority and have whittled it away over the years. 

And so that to us feels like a less certain solution. 

Mr. CRAMER. Chairman Powell, has the Commission’s ancillary 

authority been stripped away? 

Mr. POWELL. There are two quick things that I think are important. Number one, the Commission has authorities that come from 

a range of statutes. It is not exclusively governed by just the Telecommunication Act. The Commission has been very aggressive in 

the protection of disability access for communities because this 

body passed the CCVA, which authorizes them to apply disability 

protections to Internet services, and is aggressively doing so. The 

Commission has authority under CALEA to protect surveillance 

and other kinds of issues. There is a whole host of authorities. And 

some, yes, are ancillary. The Commission, I would argue, has lost 

ancillary when it has abused that power. It has also frequently 

used ancillary effectively to do any number of social-positive regulations. 

Mr. CRAMER. I thank you all. This has been fascinating. 

Thank you, Mr. Chairman. 

Mr. WALDEN. Thank you, Mr. Cramer. 

I think that brings to a close the participation by our members. 

I have a series of letters that I ask unanimous consent be added 

in, letters and op-eds and things. One from Joel White, executive 

director of Health IT Now Coalition, opposing Title II; Bradley 

Merrill Thompson, general counsel, mHealth Regulatory Coalition; 

and Robert B. McCray, president and CEO, Wireless-Life Services 

Alliance. Without objection, we will put that one in. 

An opinion piece by our former colleague Rick Boucher on net 

neutrality being low hanging fruit for Congress, and urging action. 

Without objection, we will put that in the record. 

From the Telecommunications Industry Association opposing 

Title II and supporting legislative action from Scott Belcher, chief 

executive officer, Telecommunications Industry Association. A letVerDate Nov 24 2008 10:16 Jul 13, 2016 Jkt 037690 PO 00000 Frm 00135 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-1 CHRIS
130 

ter from the Application Developers Alliance, Mr. Jon Potter, president, Application Developers Alliance, agreeing regarding legislation applied in the debate. And then there is a coalition of economic 

groups, from TechFreedom to Americans for Tax Reform, and a 

whole bunch of others, and individuals representing educational institutions and elsewhere, in support of our legislative initiatives in 

whole or part. So without objection, we will put that in the record 

as well. 

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

Mr. WALDEN. And, again, we want to thank all of our witnesses, 

and especially grant some forbearance to the two that have to go 

now on to the Senate and repeat this. We thank you for your endurance and your participation. To all the witnesses, we are very 

sincere about following up with you sooner rather than later on 

language to deal with these issues. The principles that we have 

outlined in the legislation we feel strongly about. We are not in the 

business of creating loopholes to go around something we feel 

strongly about. So we look forward to collaborating with you on 

that, on the appeals process, and these various things. 

So thank you all. And we stand adjourned. 

[Whereupon, at 1:12 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

PREPARED STATEMENT OF HON. STEVE SCALISE

The importance of today’s hearing and the issue before us cannot be overstated. 

Simply put, the Internet has positively changed the world and transformed our 

economy in ways previously unimagined. How we communicate, work, get our news, 

shop or even watch television have all changed, and improved drastically in just a 

few years. 

Even President Obama stated the ‘‘Internet has been one of the greatest gifts our 

economy—and our society—has ever known.’’ That is why I continued to be baffled 

by this president’s belief that the Federal government needs to now swoop in and 

‘‘fix’’ the Internet. 

Last night the president talked about infrastructure. Well, mobile and fixed 

broadband networks are the infrastructure of the 21st century. They are the keys 

to the future of our economy and the ability of individuals to improve their economic 

well-being. 

But apparently the president and the Chairman of the Federal Communications 

Commission (FCC) believe our 21st century infrastructure must be ‘‘fixed’’ by applying outdated laws and regulations from the 1930s. 

Reclassifying broadband under Title II represents a complete paradigm shift in 

how our government treats the Internet. The long-standing and successful ‘‘light 

touch’’ regulatory model has ensured the Internet’s success. 

Why would we want to introduce more government regulation and bureaucratic 

micromanagement from Washington that would harm a vibrant, successful, wellfunctioning global set of networks? It makes no sense. 

Since its inception, the Internet has been driven by market forces. Consumers 

have picked winners and losers, and innovators have thrived. My fear is that under 

Title II, the government—specifically the FCC—would be in the driver’s seat dictating the market while consumers—and innovation—suffer. 

The impacts of Title II will be profound, and the imminent regulatory uncertainty 

under reclassification will drag on for years and kill billions of dollars in private 

investment. We must proceed deliberately. I urge the FCC to do the same and to 

take its direction from Congress rather than bow to political pressure from the 

White House. 

I commend Chairmen Walden and Upton for putting forward this bill. I urge 

Chairman Wheeler and the other FCC Commissioners to work with Congress on a 

broadband policy framework that works for hard-working taxpayers and innovators 

and ensures a vibrant Internet for generations to come. We do not need the Federal 

government to ‘‘fix’’ the Internet! 

131 


94494.065
132 


94494.066
133 


94494.067
134 


94494.068
135 


94494.069
136 


94494.070
137 


94494.071
138 


94494.072
139 


94494.073
140 


94494.074
141 


94494.075
142 


94494.076
143 


94494.077
144 


94494.078
145 


94494.079
146 


94494.080
147 


94494.081
148 


94494.082
149 


94494.083
150 


94494.084
151 


94494.085
152 


94494.086
153 


94494.087
154 


94494.088
155 


94494.089
156 


94494.090
157 


94494.091
158 


94494.092
159 


94494.093
160 


94494.094
161 


94494.095
162 


94494.096
163 


94494.097
164 


94494.098
165 


94494.099
166 


94494.100
167 


94494.101
168 


94494.102
169 


94494.103
170 

Æ 


94494.104