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NETWORK NEUTRALITY AND INTERNET 

REGULATION: WARRANTED OR MORE 

ECONOMIC HARM THAN GOOD? 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMUNICATIONS AND 

TECHNOLOGY 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

FEBRUARY 16, 2011 

Serial No. 112–8 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

CLIFF STEARNS, Florida 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

Vice Chair 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

BRIAN P. BILBRAY, California 

CHARLES F. BASS, New Hampshire 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANE HARMAN, California 

JANICE D. SCHAKOWSKY, Illinois 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

ANTHONY D. WEINER, New York 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

(II)

(III) 

SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY

GREG WALDEN, Oregon 

Chair 

LEE TERRY, 

Vice Chairman 

CLIFF STEARNS, Florida 

JOHN SHIMKUS, Illinois 

MARY BONO MACK, California 

MIKE ROGERS, Michigan 

BRIAN P. BILBRAY, California 

CHARLES F. BASS, New Hampshire 

MARSHA BLACKBURN, Tennessee 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

BRETT GUTHRIE, Kentucky 

ADAM KINZINGER, Illinois 

JOE BARTON, Texas 

FRED UPTON, Michigan 

ANNA G. ESHOO, California 

EDWARD J. MARKEY, Massachusetts 

MICHAEL F. DOYLE, Pennsylvania 

DORIS O. MATSUI, California 

JANE HARMAN, California 

JOHN BARROW, Georgia 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., NEW JERSEY

BOBBY L. RUSH, Illinois 

DIANA DEGETTE, Colorado 

JOHN D. DINGELL, Michigan 

HENRY A. WAXMAN, California 

(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 

Prepared statement .......................................................................................... 5 

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

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

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

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

prepared statement .............................................................................................. 8 

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, prepared statement ...................................................................................... 11 

WITNESSES

Julius Genachowski, Chairman, Federal Communications Commission ............ 12 

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

Answers to submitted questions ...................................................................... 230 

Michael J. Copps, Ph.D., Commissioner, Federal Communications Commission ........................................................................................................................ 19

Prepared statement .......................................................................................... 21 

Answers to submitted questions ...................................................................... 247 

Robert M. McDowell, Commissioner, Federal Communications Commission .... 28 

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

Answers to submitted questions ...................................................................... 252 

Mignon Clyburn, Commissioner, Federal Communications Commission ........... 68 

Prepared statement .......................................................................................... 70 

Answers to submitted questions ...................................................................... 261 

Meredith Attwell Baker, Commissioner, Federal Communications Commission ........................................................................................................................ 77

Prepared statement .......................................................................................... 79 

Answers to submitted questions ...................................................................... 265 

SUBMITTED MATERIAL

Letters of May 28, 2010, May 24, 2010, and December 16, 2010, submitted 

by Mr. Terry ......................................................................................................... 137 

Article entitled ‘‘What Net Neutrality Means for You,’’ Trend Micro Consumer 

Newsletter, submitted by Mr. Terry ................................................................... 158 

Letter of December 15, 2010, from Amplex Internet to Mr. Latta, submitted 

by Mr. Latta ......................................................................................................... 159 

Report by Seth P. Waxman, submitted by Mr. Bass ............................................ 161 

Phoenix Center Policy Bulletin No. 25, submitted by Mrs. Blackburn ............... 171 

Editorial entitled ‘‘Net Neutrality: No One Will Be Satisfied, Everyone Will 

Complain,’’ by David J. Farber and Gerald R. Faulhaber, The Atlantic, 

submitted by Ms. Eshoo ...................................................................................... 194 

Letter of February 14, 2011, from the United States Conference of Catholic 

Bishops, submitted by Ms. Eshoo ....................................................................... 196 

Letter of February 16, 2011, from The American Library Association (ALA), 

The Association of Research Libraries (ARL), and EDUCAUSE, submitted 

by Ms. Eshoo ........................................................................................................ 198 

Letter of February 14, 2011, from the American Association of Independent 

Music, submitted by Ms. Eshoo .......................................................................... 204 

Page

VI 

Letter of February 15, 2011, from the Asian American Justice Center, submitted by Ms. Eshoo ............................................................................................ 206 

Letter of February 14, 2011, from Computer & Communications Industry 

Association, submitted by Ms. Eshoo ................................................................. 208 

Letter of February 16, 2011, from the Free Community Paper Industry, 

submitted by Ms. Eshoo ...................................................................................... 210 

Letter of February 14, 2011, from the Future of Music Coalition, submitted 

by Ms. Eshoo ........................................................................................................ 212 

Letter of February 15, 2011, from the Leadership Conference, submitted 

by Ms. Eshoo ........................................................................................................ 214 

Letter of February 15, 2011, from the Economy Corporation, submitted by 

Ms. Eshoo .............................................................................................................. 216 

Letter of February 14, 2011, from various members of the music community, 

submitted by Ms. Eshoo ...................................................................................... 217 

Letter of February 15, 2011, from the National Urban League, submitted 

by Ms. Eshoo ........................................................................................................ 219 

Letter of February 16, 2011, from various organizations supporting the Open 

Internet, submitted by Ms. Eshoo ...................................................................... 221 

Letter of February 15, 2011, from various businesses in support of the Open 

Internet, submitted by Ms. Eshoo ...................................................................... 223 

Letter of March 1, 2011, from various faith leaders in support of the Open 

Internet, submitted by Ms. Eshoo ...................................................................... 225 

Letter of April 6, 2011, from Netflix in support of the Open Internet, submitted by Ms. Eshoo ............................................................................................ 228 

(1) 

NETWORK NEUTRALITY AND INTERNET 

REGULATION: WARRANTED OR MORE 

ECONOMIC HARM THAN GOOD? 

WEDNESDAY, FEBRUARY 16, 2011 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON ENERGY AND COMMERCE, 

SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY, 

Washington, DC. 

The subcommittee met, pursuant to call, at 9:33 a.m., in room 

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

(chairman of the subcommittee) presiding. 

Members present: Representatives Walden, Terry, Stearns, 

Shimkus, Bono Mack, Rogers, Bilbray, Bass, Blackburn, Gingrey, 

Scalise, Latta, Guthrie, Kinzinger, Barton, Upton (ex officio), 

Eshoo, Markey, Doyle, Matsui, Harman, Barrow, Towns, Pallone, 

Rush, Dingell, Inslee, and Waxman (ex officio). 

Staff present: Neil Fried, Majority Chief Counsel; Michael 

Beckerman, Majority Deputy Staff Director; David Redl, Majority 

Counsel; Jeff Mortier, Majority Professional Staff; Carly 

McWilliams, Majority Legislative Clerk; Roger Sherman, Minority 

Chief Counsel; Shawn Chang, Minority Counsel; Jeff Cohen, Minority Counsel; Sarah Fisher, Minority Policy Analyst; Bruce Wolpe, 

Minority Advisor; Pat Delgado, Minority Chief of Staff (Waxman); 

and Phil Barnett, Minority Staff Director. 

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

Mr. WALDEN. Please take your seats, and the hearing is about 

to begin. I call to order the Subcommittee on Communications and 

Technology hearing on net neutrality. I want to welcome our witnesses who are here today, and we look forward to your testimony 

and the responses to your questions. 

We all want an open and thriving Internet. That Internet exists 

today. Consumers can access anything they want with the click of 

a mouse, thanks to our historical hands-off approach. Changing direction now will only harm innovation and the economy. But before 

we even get into the harm the network neutrality rules will cause, 

it is important to realize the FCC’s underlying theory of authority 

would allow the Commission to regulate any interstate communication service on barely more than a whim and without any additional input from the United States Congress. In essence, the FCC 

argues it can regulate anything if in its opinion doing so would encourage broadband deployment. 

2 

I am relieved, however, the FCC declined, under its newfound 

authority, to regulate coffee shops, bookstores, airlines, and other 

entities. This of course means the FCC believes it has the authority 

that it has so far declined. It could have subjected these entities 

to the new rules under its decision. 

If left unchallenged, this claim of authority would allow the FCC 

to regulate any matter it discussed in the National Broadband 

Plan. Recall that the FCC concluded that consumers’ concerns over 

privacy are deterring broadband. Does that mean the FCC can regulate Internet privacy? 

The National Broadband Plan also addresses health IT, distance 

learning, smart grid, smart homes, smart transportation. Can the 

FCC regulate all of these matters too in the name of promoting 

broadband? Under the FCC’s rationale, its authority is bounded 

only by its imagination. 

Former FCC Chairman Kevin Martin tried to go down a very 

similar path. In the wake of Hurricane Katrina, he claimed that 

his authority over wireless services allowed him to require backup 

power at cell sites. During oral arguments, the courts questioned 

the FCC’s logic, asking whether it would grant him seemingly endless authority over things like electric utilities and employees of 

wireless providers. The FCC eventually backed down. This overreach was problematic with a real disaster like Hurricane Katrina. 

I don’t see how it is justified here. 

From the Internet’s inception, we have taken a hands-off approach. The Internet started as a defense agency project to connect 

computers to research facilities. It did not become the explosive 

driver of communications and economic growth it is today until we 

turned it over to free enterprise. Dating as far back as 1971, the 

FCC has consistently treated data services as unregulated information services and not as regulated telecommunications services. 

Congress codified this distinction in the 1996 Telecommunications 

Act. 

FCC Chairman William Kennard reaffirmed this approach. In rebuffing requests to regulate cable Internet access service, Chairman Kennard explained in a 1999 speech, and I quote, ‘‘that the 

fertile fields of innovation across the communications sector and 

around the country are blooming because from the get-go we have 

taken a deregulatory competitive approach to our communications 

structure, especially the Internet.’’ There is no crisis warranting departure from this approach. 

The FCC hangs almost its entire case for regulating the Internet 

on Comcast’s past attempt to combat network congestion by managing peer-to-peer traffic, but Comcast and the peer-to-peer community resolved that issue by gathering their engineers and developing alternative solutions that advanced traffic management techniques to everyone’s benefit. No network neutrality rules were in 

place, and the D.C. Circuit overturned the FCC’s attempts to regulate Comcast’s network management because the Federal Communications Commission failed to demonstrate it had the authority to 

do so. Most everything else the order discusses is either an unsubstantiated allegation or speculation of future harm. 

The FCC even confesses in its order that it has done no market 

analysis, none. It just selectively applied the rules to broadband 

3 

providers, shielding web companies. If the mere threat of Internet 

discrimination is such a concern and if the FCC has done no analysis to demonstrate why one company has more market power than 

another, why would discrimination by companies like Google or 

Skype be any more acceptable than discrimination by companies 

like AT&T and Comcast? Instead of promoting competition, such 

picking of winners and losers will stifle the investment needed to 

perpetuate the Internet’s phenomenal growth, hurting the economy. 

Section 230 of the Telecommunications Act makes it the policy of 

the United States to ‘‘preserve the vibrant and competitive free 

market that presently exists for the Internet and other interactive 

computer services unfettered by federal or state regulation.’’ Statutory statements of policy are not grants of regulatory authority but 

they can help delineate the contours of that authority. In light of 

Congress’s statutory pronouncement that Internet regulation is 

disfavored, the FCC’s theory of regulation by bank shot stretches 

too far. 

At bottom, this is little more than an end run around the D.C. 

Circuit is April 2010 ruling in the Comcast case that the FCC 

failed to show it had the ancillary authority to regulate network 

management. 

[The prepared statement of Mr. Walden follows:] 

PREPARED STATEMENT OF HON. GREG WALDEN

We all want an open and thriving Internet. That Internet exists today. Consumers 

can access anything they want with the click of a mouse thanks to our historical 

hands-off approach. Changing direction now will only harm innovation and the economy. 

But before we even get into the harm the network neutrality rules will cause, it’s 

important to realize that the FCC’s underlying theory of authority would allow the 

commission to regulate any interstate communication service on barely more than 

a whim and without any additional input from Congress. In essence, the FCC argues it can regulate anything if, in its opinion, doing so would encourage broadband 

deployment. I am relieved, however, that the FCC declined under its new-found authority to regulate coffee shops, bookstores, airlines and other entities. This of 

course means that the FCC believes if it had not so declined, it could have subjected 

these entities to these new rules. 

If left unchallenged, this claim of authority would allow the FCC to regulate any 

matter it discussed in the national broadband plan. Recall that the FCC concluded 

that consumers’ concerns over privacy are deterring broadband. Does that mean the 

FCC can regulate Internet privacy? The national broadband plan also addresses 

health IT, distance learning, smart grids, smart homes, and smart transportation. 

Can the FCC regulate all these matters, too, in the name of promoting broadband? 

Under the FCC’s rationale, its authority is bounded only by its imagination. 

Former FCC Chairman Kevin Martin tried to go down a very similar path. In the 

wake of Hurricane Katrina, he claimed that his authority over wireless services allowed him to require backup power at cell sites. During oral argument, the courts 

questioned the FCC’s logic, asking whether it would grant him seemingly endless 

authority over things like electric utilities and employees of wireless providers. The 

FCC eventually backed down. If this overreach was problematic with a real disaster 

like Hurricane Katrina, I don’t see how it is justified here. 

From the Internet’s inception we have taken a hands-off approach. The internet 

started as a defense agency project to connect computers at research facilities. It 

did not become the explosive driver of communications and economic growth it is 

today until we turned it over to free enterprise. Dating as far back as 1971, the FCC 

has consistently treated data services as unregulated information services and not 

as regulated telecommunications services. Congress codified this distinction in the 

1996 Telecommunications Act. 

FCC Chairman William Kennard reaffirmed this approach. In rebuffing requests 

to regulate cable Internet access service, Chairman Kennard explained in a 1999 

4 

speech that ‘‘[t]he fertile fields of innovation across the communications sector and 

around the country are blooming because from the get-go we have taken a deregulatory, competitive approach to our communications structure-especially the Internet.’’ 

There is no crisis warranting departure from this approach. The FCC hangs almost its entire case for regulating the Internet on Comcast’s past attempt to combat 

network congestion by managing peer-to-peer traffic. But Comcast and the peer-topeer community resolved that issue by gathering their engineers and developing alternative solutions that advanced traffic management techniques to everyone’s benefit. No network neutrality rules were in place, and the D.C. Circuit overturned the 

FCC’s attempts to regulate Comcast’s network management because the FCC failed 

to demonstrate it had any authority to do so. Most everything else the order discusses is either an unsubstantiated allegation or speculation of future harm. 

The FCC even confesses in its order that it has done no market analysis. It just 

selectively applied the rules to broadband providers, shielding web companies. If the 

mere threat of Internet discrimination is such a concern, and if the FCC has done 

no analysis to demonstrate why one company has more market power than another, 

why would discrimination by companies like Google or Skype be any more acceptable than discrimination by companies like AT&T and Comcast? Instead of promoting competition, such picking of winners and losers will stifle the investment 

needed to perpetuate the Internet’s phenomenal growth, hurting the economy. 

Section 230 of the Communications Act makes it the policy of the United States 

‘‘to preserve the vibrant and competitive free market that presently exists for the 

Internet and other interactive computer services, unfettered by Federal or State regulation.’’ Statutory statements of policy are not grants of regulatory authority but 

they can help delineate the contours of that authority. In light of Congress’s statutory pronouncement that Internet regulation is disfavored, the FCC’s theory of regulation by ‘‘bank shot’’ stretches too far. 

At bottom this is little more than an end-run around the D.C. Circuit’s April 2010 

ruling in the Comcast case that the FCC failed to show it had ancillary authority 

to regulate network management. 

Mr. WALDEN. With that I now turn to the ranking member for 

her opening statement. 

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

Ms. ESHOO. Good morning, Mr. Chairman, and thank you, and 

warm welcome to all of the commissioners of the Federal Communications Commission. It is very good to see you. I want to thank 

Chairman Walden for calling the commissioners before us early in 

this Congress. It is vitally important that we hear from the full 

Commission to help members make informed decisions on the key 

telecommunications issues that will be before us in this Congress. 

Today’s hearing is intended to examine the FCC’s action to preserve an open Internet and a proposed mechanism to unravel these 

rules. Since being elected to the House in 1992, I have witnessed 

my district lead a technology revolution, and the Nation has prospered as has the world. This success has come in large part due 

to the Internet’s growth, an open forum where companies compete 

online and consumers have a choice in the content they consume. 

In only a few years, innovative companies like Netflix, Skype, 

and eBay have flourished. These companies have created tens of 

thousands of jobs and new competition in areas like telephone service, video, and online shopping, not just in my district but across 

the Nation. By one estimate, the open Internet ecosystem has resulted in more than 3 million new jobs, U.S. jobs, over the past 15 

years. To promote the next Google or Facebook, we must preserve 

these essential qualities and ensure that the Internet remains open 

and free. 

5 

While the FCC’s open Internet rules are not perfect, they are an 

important step forward. Without some clear rules of the road, large 

corporations can carve up the Internet into fast and slow lanes, 

charging a toll for content and blocking innovators from entering 

the information superhighway. I believe consumers, not corporations, should be in the driver’s seat to pick the content they view, 

listen and watch over the Internet. 

We are now faced with at least two legal challenges and the use 

of legislative maneuvers like the Congressional Review Act to overturn the FCC’s work. These actions will inevitably create market 

uncertainty, and I want to repeat that, Mr. Chairman. These actions will inevitably create market uncertainty and delay future innovation in broadband technology. 

Each member of this subcommittee has made it clear where they 

stand on the issue, and I don’t expect this hearing to change those 

views. What is important to remember is what the FCC agreed to 

is a compromise, a word that a lot of Americans celebrate. That understand that compromises have to be made, reflecting the views 

of both sides of the issue, with more than 100,000 comments from 

more than 2 million people across the country, 90 percent of whom 

were in favor of open Internet rules. So the American people have 

really weighed in with the FCC. 

There is broad agreement for the adoption of these rules. 

Comcast, the Nation’s largest broadband provider, voluntarily 

agreed to abide by open Internet conditions for the next 7 years as 

part of its joint venture with NBC Universal. AT&T has said it will 

not engage in efforts to overturn the FCC’s order. If these commonsense rules are good enough for the Nation’s two largest broadband 

providers, then I think it is time we refocus our efforts on the next 

steps needed to promote jobs, broadband deployment, and new investment. 

I think it is time to look forward. That is really what America 

is about, and on what we can work on together in a bipartisan way. 

We are faced with important issues like universal service reform, 

spectrum reform and ensuring that our country’s first responders 

have a nationwide, interoperable public safety network. We will be 

coming up to the 10th anniversary of the attack on our country and 

we still do not have interoperability with our public safety community. That is what this Congress, this committee and full committee 

should be tackling. And when we tackle these issues, we will have 

an opportunity to create jobs in our country, grow the economy, 

and a platform we can all agree on. 

I look forward to hearing from the distinguished chairman all of 

the commission, all the distinguished commissioners and their 

thoughts on how we can ensure that the Internet remains a vital 

resource, an American resource to improve the lives of every citizen 

and everyone around the world for generations to come. Thank you, 

Mr. Chairman, and I yield back. 

[The prepared statement of Ms. Eshoo follows:] 

PREPARED STATEMENT OF HON. ANNA G. ESHOO

Good morning Mr. Chairman and welcome to the FCC Commissioners. 

6 

I commend Chairman Walden for calling the Commissioners before us early in 

this Congress. It’s vitally important that we hear from the full Commission to help 

Members make informed decisions on key telecommunications issues. 

Today’s hearing is intended to examine the FCC’s action to preserve an open 

Internet and a proposed mechanism to unravel these rules. Since being elected to 

the House in 1992, I’ve witnessed my District lead a technology revolution and the 

nation has prospered. This success has come in large part due to the Internet’s 

growth—an open forum where companies compete online, and consumers have a 

choice in the content they consume. 

In only a few years, innovative companies like Netflix, Skype and eBay have 

flourished. These companies have created tens of thousands of jobs and new competition in areas like telephone service, video and online shopping, not just in my 

District, but across the nation. By one estimate, the open Internet ecosystem has 

resulted in more than 3 million new U.S. jobs over the past 15 years. To promote 

the next Google or Facebook, we must preserve these essential qualities and ensure 

the Internet remains free and open. 

While the FCC’s open Internet rules are not perfect, a view I’ve made very clear, 

they are an important step forward. Without some clear rules of the road, large corporations can carve up the Internet into fast and slow lanes, charging a toll for content, and blocking innovators from entering the information superhighway. I believe 

consumers, not corporations, should be in the driver’s seat to pick the content they 

view, listen and watch over the Internet. 

We’re now faced with at least two legal challenges and the use of legislative maneuvers like the Congressional Review Act (CRA) to overturn the FCC’s work. These 

actions will inevitably create market uncertainty and delay future innovation in 

broadband technology. 

Each Member of this Subcommittee has made it clear where they stand on the 

issue and I don’t expect this hearing to change those views. What’s important to remember is what the FCC agreed to is a compromise, reflecting the views of both 

sides of the issue, with more than 100,000 comments from more than 2 million people, 90 percent of whom were in favor of open Internet rules. 

There is broad agreement for the adoption of these rules. Comcast, the nation’s 

largest broadband provider, voluntarily agreed to abide by open Internet conditions 

for the next seven years as part of its joint venture with NBC Universal. AT&T has 

said it will not engage in efforts to overturn the FCC’s order. If these common sense 

rules are good enough for the nation’s two largest broadband providers, then I think 

it’s time we refocus our efforts on the next steps needed to promote jobs, broadband 

deployment and new investment. 

It’s time to look forward and focus on what we can work on together in a bipartisan way. We’re faced with important issues like universal service reform, spectrum 

reform and ensuring that our country’s first responders have a nationwide, interoperable public safety network. By tackling these issues, we have an opportunity to 

create jobs and grow the economy -a platform we can all agree on. 

I look forward to hearing the Chairman and the Commissioners’ thoughts on how 

we can ensure the Internet remains a vital resource to improve the lives of Americans and everyone around the world for generations to come. 

Mr. WALDEN. I thank the gentlelady for her comments. 

I now yield 2 minutes to the chairman of the full committee, the 

gentleman from Michigan, Mr. Upton. 

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

Mr. UPTON. Thank you, Mr. Chairman. 

The FCC’s recent adoption of network neutrality rules to regulate the Internet is perhaps the most striking example of a troubling trend that we have seen at this very important agency. Rather than serving as an impartial expert and authority, the Commission seems to be advancing a policy agenda of its own, often by 

twisting the arms of those who have come before it. The activist 

agenda is particularly embodied in the network neutrality regulations that are the subject of today’s hearing. 

7 

We are pleased to see Chairman Genachowski today alongside of 

his fellow commissioners who announced plans in September of 

2009 to codify four network neutrality principles as enforceable 

rules. However, the history of these principles is clear. First put 

forward in 2004, they were intended for all facets of the industry 

in lieu of regulations. Even when adopted as policies in 2005, the 

FCC made clear that they were not established as rules nor were 

they enforceable. The decision came only 3 months after taking the 

helm of the FCC despite the fact that he made no mention of those 

plans 4 days earlier during his first appearance before this committee. 

I have made it clear that the Energy and Commerce Committee 

will be focused on jobs. As we have seen in the first couple weeks 

of the 112th Congress, one of the greatest threats to job creation 

in our current economy is runaway regulation. Regulations are not 

the problem in and of themselves. In fact, it is regulations that implement the laws passed by Congress. The problem comes when 

unelected personnel in the maze of the federal bureaucracy began 

using the regulations to impose their own agendas, and when they 

do so without congressional authority or thoughtful consideration of 

the economic consequences. Net neutrality is a case in point. The 

FCC has done nothing to specifically quantify any harm requiring 

intervention or the potential harm to consumers, innovation or the 

economy from the proposed rules. Where is the cost-benefit analysis that President Obama called for in his recent Executive order? 

This hearing is to look into that, and I look forward to the answers of those that are here, and I ask that the rest of my statement be included as part of the record. 

Mr. WALDEN. Without objection. 

[The prepared statement of Mr. Upton follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

The FCC’s recent adoption of network neutrality rules to regulate the Internet is 

perhaps the most striking example of a troubling trend we have seen at this important agency. Rather than serving as an impartial expert and authority, the commission seems to be advancing a policy agenda of its own—often, by twisting the arms 

of those who come before it. This activist agenda is particularly embodied in the network neutrality regulations that are the subject of today’s hearing. 

Chairman Genachowski—who we are pleased to see today alongside his fellow 

commissioners—announced plans in September 2009 to codify four network neutrality principles as enforceable rules. However, the history of these principles is 

clear: First put forward in 2004, they were intended for ‘‘all facets of the industry’’ 

in lieu of regulations. Even when adopted as policies in 2005, the FCC made clear 

they were not established as rules, nor were they enforceable. 

Chairman Genachowski’s decision came only 3 months after he took the helm at 

the FCC, despite the fact that he made no mention of those plans four days earlier 

during his first appearance before the House Energy and Commerce Committee. 

I have made it clear that the Energy and Commerce Committee would be focused 

on jobs. And as we have seen in the first few weeks of the 112th Congress, one of 

the greatest threats to job creation in our current economy is runaway regulation. 

Regulations are not the problem in and of themselves—in fact, it is regulations that 

implement the laws passed by Congress. The problem comes when unelected personnel in the maze of the federal bureaucracy begin using regulations to impose 

their own agendas, and when they do so without congressional authority or thoughtful consideration of the economic consequences. 

Net neutrality is a case in point. The FCC has done nothing to specifically quantify any harm requiring intervention, or the potential harm to consumers, innovation, or the economy from the proposed rules. Where is the cost-benefit analysis that 

President Obama called for in his recent executive order? 

8 

In addition to these economic concerns, there are serious legal questions. In April 

2010, the D.C. Circuit found the FCC had failed to demonstrate it had the authority 

to impose these network neutrality rules against a particular provider. Rather than 

re-evaluating the wisdom of regulating the Internet, the FCC began scrambling to 

find an alternative legal theory. 

The FCC proposed classifying Internet access service for the first time as a telecommunications service. This rightfully drew bipartisan alarm from more than 300 

members of the House and Senate, as well as from industry. The FCC pivoted once 

more, now claiming it has authority to adopt any rules regarding information services that might have an impact on broadband, traditional wireline and wireless 

phone service, or broadcast and subscription television. 

Chairman Walden and I have made no secret about our objections to this policy 

and our plans to overturn it using the Congressional Review Act. In fact, here in 

my hand is the resolution Chairman Walden and I intend to drop in the hopper 

down on the House floor. Before we do that, we are giving you this one last chance 

to convince us that you have a sound legal and policy basis for regulating the Internet. 

We believe these rules will hurt innovation and the economy. But we are also concerned that this power grab will do irreparable harm to the FCC as an institution, 

and to the role of Congress as elected representatives of the people to determine the 

law of the land. We do not intend to allow either to occur. 

Mr. WALDEN. And now I think we go to Mr. Barton for a minute 

on our side. 

Mr. BARTON. We have a little high-tech problem getting the button on over here. It just went off again. 

Welcome, our four commissioners and chairmen of the FCC. You 

are all great individuals. You are all very bright. I disagree with 

the majority of you on your net neutrality regulations that you put 

in place but I am impressed by your intellect. 

Mr. Chairman, I will put my statement in the record. Suffice it 

to say that I do not see how this Commission with the intelligence 

that they have could have adopted the rule they did on a 3-2 partisan vote knowing that there was probably going to—in fact, 

knowing there has been a change in the Congress and that every 

candidate who ran on the net neutrality principle that they tried 

to establish was defeated and knowing that the majority of this 

committee and a majority of the Congress on both sides of the aisle 

opposed the rule that they have now put in place. 

We have two hearings going on simultaneously so Mr. Upton and 

myself and others will be going up and down and back but I hope 

to come back in time to question the Commission and try to delve 

into why they did what they did when they did it, knowing that 

it was not going to be well reserved. Thank you, Mr. Chairman. 

[The prepared statement of Mr. Barton follows:] 

PREPARED STATEMENT OF HON. JOE BARTON

Thank you, Mr. Chairman, for holding this important hearing. I would like to welcome our impressive witnesses: all four commissioners and Chairman Genachowski. 

This morning, Mr. Chairman, we are going to hear a familiar story about federal 

bureaucrats taking government regulations too far. The target this time is the Internet. This is the same Internet that has become a thriving force in this country and 

all without any type of formal federal government regulation. 

If strict regulation of the internet was warranted, Congress would have taken appropriate action. However, Congress, the American people, and those in the industry 

saw no looming danger. 

To say that I was stunned to see the backhanded tactics of the FCC when they 

adopted their network neutrality rules at the end of last year would be an understatement. The motives of the FCC on this matter are suspect. It is evident that 

the FCC’s agenda comes straight out of the Obama Administration’s playbook; deVerDate Nov 24 2008 10:31 Oct 24, 2011 Jkt 037690 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-8 021611\112-8 CHRIS
9 

stroy the economy without any regard for the current economic situation and do so 

without showing an imminent threat. 

The actions taken by the FCC have denied the markets from policing themselves. 

The rules for network neutrality serve only to stifle innovation of the services offered by broadband providers. I hope through Congressional action we can return 

to a mindset where we champion platforms that foster a healthy environment for 

competition. 

As a Member of Congress, it is my duty to ensure that actions taken at the federal level are not harmful to citizens that elected us into office. The Internet has 

provided users from all backgrounds with an opportunity to freely explore new 

worlds and express new ideas across an unlimited number of networks. It should 

be our goal to preserve the vibrant competitive free market which allows for continued success and growth of the Internet. 

Mr. WALDEN. I now yield a minute to the gentleman from Nebraska, the vice chair of the committee, Mr. Terry. 

Mr. TERRY. Thank you, Mr. Walden. 

I believe it is safe to say that everyone in this room today wants 

an open and thriving Internet. It is therefore important to point 

out that such an Internet exists today. It is no coincidence that today’s Internet users can access anything they want very quickly 

and easily. This was made possible due to our historical hands-off 

approach to the Internet. As users demand more-sophisticated content, service and applications, we must maintain a similar course 

or face the inevitable decline in investment, service and overall 

blow to our economy. 

I am worried that the FCC’s adoption of its network neutrality 

rules regulating the Internet will do just that, and I am further 

concerned that they were adopted strictly on the speculation of future harm. 

On October 5, 2009, my colleagues and I sent a letter asking that 

the Commission undertake a full market analysis prior to any consideration of network neutrality rules. It is made clear in the order 

that no such analysis took place. Instead the order selectively applies the rules to broadband providers while shielding Web-based 

companies. I am interested in learning today why the Commission 

instead of promoting competition decided it was more appropriate 

to pick the winners and the losers. If the were a mere threat of 

Internet discrimination is such a concern and the FCC has done no 

analysis to demonstrate why one company has more market power 

than another, why would discrimination like companies like Google 

or Skype be any more acceptable than discrimination by companies 

like Verizon and Cox? 

Hopefully these questions will be answered today. I plan on seeking the answers to these questions and about impact on the market, and I yield back. 

Mr. WALDEN. I now recognize the gentleman from Massachusetts, Mr. Markey, for a minute. 

Mr. MARKEY. I thank you, Mr. Chairman. 

I just want to speak on behalf of those of us who ran on net neutrality who are still in Congress, which starts with Ms. Eshoo to 

Mr. Waxman, to Mr. Markey, to Mr. Doyle, Ms. Matsui, all the way 

down just so the record is clear that we are here as we have been, 

and I also want to point out that AT&T was offered the contract 

to build the Internet in 1966 and they turned it town because they 

said they had a monopoly already and long lines and they did not 

want to build a packet switch network because they had to go to 

10 

BB&N, a small company up in Cambridge, Massachusetts, to build 

the Internet. AT&T didn’t want it. 

In 1996, after we passed the Telecom Act, Verizon sued saying 

we don’t want to open up our network under that law to competitors, and the story goes on and on that the broadband barons, any 

time they have control of something they don’t want competition, 

but this Internet revolution that created Google and eBay and 

Amazon and YouTube and Hulu and all of the rest of these companies, it is all as a result, not of the policy of Verizon, the policy of 

these other large companies, it is that the government acted. 

So here is the interesting thing. The paradox of competition is 

that it takes regulations in order to create deregulation, in order 

to create a marketplace for small entrepreneurial companies can 

get into the marketplace. That is what has happened over the last 

30 years. The government has acted in order to make sure that a 

company that had already invented broadband, already invented 

digital, that is AT&T, but had not deployed it so we were all still 

using black rotary dial phones 100 years after Alexander Graham 

Bell in our living room. You don’t go from black rotary dial phones 

to BlackBerrys unless the government finally intervenes and says 

we want these entrepreneurs, we want these small new companies 

that are entering into the marketplace. That is what has happened 

over this last generation. That is what this debate is all about. 

I wish the FCC had gone further so that we could have hundreds, thousands of newer companies coming in and not just relying upon Verizon to innovate because that will be a long day before 

you hear about the first new product that comes from Verizon. 

That has never happened and it is unlikely to ever happen in your 

lifetimes. 

I yield back, Mr. Chairman. 

Mr. WALDEN. There is Mr. Waxman. We are waiting for the 

chairman emeritus. Mr. Waxman, you have the remaining 2 minutes and 35 seconds once you are comfortably seated and ready to 

go. 

Mr. WAXMAN. Thank you very much, Mr. Chairman, and I regret 

that this committee has another subcommittee meeting at the same 

time. 

I am pleased you had this hearing today. This is the first FCCrelated hearing of the subcommittee. I think it is appropriate that 

our witnesses are the five members of the Commission. 

Last December, the FCC took landmark action to preserve the 

open Internet. These rules are a bill of rights for Internet users. 

They contain four key provisions: restore the FCC’s authority to 

prevent blocking of Internet content applications and services, 

which was struck down by the court in the Comcast decision, prevent phone and cable companies from unreasonably discriminating 

against any lawful Internet traffic, prohibit wireless broadband 

providers from blocking Web sites as well as applications that compete with voice or video conferencing while preserving the FCC’s 

authority to adopt additional standards and safeguards under existing authorities, and to direct the FCC to issue transparency regulations so consumers know the price, performance and network 

management practices. 

11 

We are going to hear about these regulations to protect the open 

Internet, and I think that we have to recognize that some of the 

claims that are being made and repeated over and over again are 

just not accurate. The most vibrant sector of our economy today is 

our Internet economy. U.S. companies like Google, Facebook, Amazon and eBay lead the world in innovation. They all urged the FCC 

to act to protect an open Internet because ‘‘commonsense baseline 

rules are critical to ensuring that the Internet remains a key engine of economic growth, innovation and global competitiveness.’’ 

We need to make sure that the Internet is free and open and not 

regulated by anyone who is just simply delivering the service. Even 

AT&T and Comcast, which are two of the Nation’s largest network 

operators, support the rules. AT&T’s CEO stated, ‘‘We didn’t get 

everything we wanted. I wanted no regulation but we ended at a 

place where we have a line of sight and we know can commit to 

investments.’’ And earlier today we received letters from a broad 

and diverse coalition of more than 100 organizations that oppose 

efforts to use legislation to block the open Internet regulations. 

The American people want us to be focusing on creating jobs and 

rebuilding our economy. We have important opportunities in this 

subcommittee to contribute to that effort by making more spectrum 

available, ensuring universal access to broadband. We have a lot of 

things we need to work on together, and I look forward to that. 

This issue has been resolved by the FCC, and I look forward to our 

following the implementation of it. 

I would like to ask unanimous consent to put in the full statement. 

Mr. WALDEN. Without objection, all members are allowed the opportunity to put their full statements in the record. 

[Additional statement for the record follows:] 

PREPARED STATEMENT OF HON. JOHN D. DINGELL

Thank you, Mr. Chairman, and I commend you for carrying on the Committee’s 

long tradition of fair and measured oversight. I would also like to welcome our witnesses this morning, especially Chairman Genachowski. I am confident he and his 

fellow commissioners will answer my questions and those of my colleagues with unequivocal candor and keen insight. 

I understand my Republican colleagues intend to use this hearing to lay the 

groundwork for a resolution to nullify the Commission’s recently adopted Open 

Internet order. While I agree with them that the Commission lacks the statutory 

authority with which to regulate broadband Internet access services, the fact remains that the order has been finalized, and its future now resides within the purview of the courts. I respectfully suggest we not re-litigate the past and instead 

focus our attention on matters pending the Commission’s consideration which have 

the potential to expand our country’s communications infrastructure, enhance U.S. 

competitiveness, and, most importantly, create jobs. Chief among these matters are 

reform of the Universal Service Fund and spectrum policy. 

I look forward to Chairman Genachowski’s and his fellow commissioners’ responses to my questions. I also hope they will affirm anew that the Congress is, as 

I have said so many times, the sole progenitor of the Commission’s authority and 

commit to working with this Committee in advancing that agency’s most important 

work. 

I thank you for your courtesy, Mr. Chairman, and yield the balance of my time. 

Mr. WALDEN. With that, I thank the folks who have offered up 

the opening statements, and I would now like to turn to our panel 

of witnesses, the distinguished members of the Federal Communications Commission, and I will start with that Commission’s 

12 

chairman, Mr. Genachowski. Thank you for being here today, and 

we look forward to your statement. 

STATEMENTS OF JULIUS GENACHOWSKI, CHAIRMAN, FEDERAL COMMUNICATIONS COMMISSION; MICHAEL J. COPPS, 

PH.D., COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION; ROBERT M. MCDOWELL, COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION; MIGNON CLYBURN, 

COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION; 

AND MEREDITH ATTWELL BAKER, COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION 

STATEMENT OF JULIUS GENACHOWSKI 

Mr. GENACHOWSKI. Chairman Walden, Chairman Upton, Ranking Members Eshoo and Waxman, members of the subcommittee, 

this committee has jurisdiction over an area of increasing importance: communications and technology, including the Internet. I 

look forward to working with this committee in a variety of ways 

to strengthen our economy, promote our global competitiveness and 

extend opportunity to all Americans. I have submitted a written 

statement on our actions to preserve Internet freedom and openness. I will be brief here. 

As we considered a framework for Internet freedom, I had three 

priorities. First, consumers, promoting consumer choice, making 

sure that people who use the Internet have the freedom to say 

what they want, go where they want and access any legal content 

or services on the Internet. Second, innovators, making sure that 

the Internet will continue to be a vibrant platform for American entrepreneurs, that the next inventor in his garage, the next Mark 

Zuckerberg in his dorm room, the next Jeff Bezos traveling across 

the country in his car can start and build the next great business 

on the Internet, creating jobs, growing our economy and helping us 

lead the world in innovation. It is essential that we incentivize billions of dollars of private investment in Internet content, applications and services businesses. Now, my third priority is the networks, promoting wired and wireless Internet networks in the 

United States that are the best in the world, fast, robust and universally available. We have to incentivize billions of dollars of private investment to the core of the network, to network infrastructure. 

Throughout the history of Internet, innovative online applications and service have spurred broadband deployment and adoption 

which in turn have encouraged new applications and services. This 

virtuous cycle of innovation and investment throughout the 

broadband economy, that is what we want to maintain and advance. Why? Because the free and open Internet has led to the creation of tens of thousands of small businesses, millions of jobs and 

billions of dollars of investment. 

Now, since 2005 the FCC on a bipartisan basis has made clear 

it would act to enforce open Internet protections. It did so several 

times but it did so without an appropriately adopted framework. 

That is why we acted to bring some resolution and certainty to this 

area, and after an open and participatory process with published 

rules, public workshops, extensive engagement, feedback from over 

13 

200,000 commenters, we established a sensible high-level framework to preserve Internet freedom and openness. The rules fit on 

one page and boil down to four things. 

First, transparency so that consumers and innovators can have 

basic information to make smart choices about broadband networks 

or how to develop and launch the next killer app. Empowering 

them with information will reduce the need for government involvement. Second, no blocking so that consumers can be free to access lawful content or services and so startup and other Internet 

companies can be free to reach Internet consumers. Third, a level 

playing field, a fair, non-discrimination principle so that winners 

and losers online are picked by who should pick them: consumers 

and the market. And fourth, flexibility for Internet service providers, flexibility to manage networks, to deal with congestion and 

harmful traffic, flexibility to pursue innovation and business models and get a real return on investment. 

Now, I understand that some people think this framework 

doesn’t go far enough. Others think it goes too far. I believe it gets 

it about right: light-touch approach consistent with the FCC’s history of bipartisan action on this issue. Informed by earlier FCC and 

Congressional initiatives, supported by the broadest consensus ever 

assembled on this challenging topic, the framework we adopted 

preserves Internet freedom, preserves the Internet job creation engine, protects consumer choices and promotes private investment 

throughout the broadband economy. 

Now, while the Commission was divided on this particular issue, 

we resolve over 95 percent of our votes on a bipartisan basis, and 

I believe we are united on the need to promote broadband access, 

its importance to our 21st century economy and our global competitiveness and to expanding opportunity broadly. 

So I look forward to working with my colleagues and with the 

committee on a series of initiatives including unleashing spectrum, 

reforming universal service, and removing barriers to broadband 

build-out, to harness the opportunities of communications technologies for all Americans. 

Thank you, and I look forward to your questions. 

[The prepared statement of Mr. Genachowski follows:] 

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Mr. WALDEN. Chairman, thank you for your testimony. We look 

forward to your answers. 

I now recognize the distinguished gentleman, the commissioner, 

Mr. Copps. We are delighted to have you here this morning. 

STATEMENT OF MICHAEL J. COPPS 

Mr. COPPS. Thank you, sir. Good morning, Chairman Walden 

and Chairman Upton and Ranking Member Eshoo and Ranking 

Member Waxman and all friends on the committee. I appreciate 

your invitation to participate in this discussion to share with you 

my perspectives, and more importantly, to hear yours. I look forward to your counsel as we begin what I think can be a truly productive year in tackling many telecommunications challenges facing Congress, the Commission and the country. 

It is my firm belief, first of all, that broadband is key to America’s 21st century prosperity. The President, the Congress, and the 

Commission are all looking to this communications infrastructure 

as a key tool for ensuring a better and brighter future for America. 

There is much work to be done to be ensured that everyone in 

this country has equal opportunity in the Digital Age. I believe that 

preserving a free and open Internet, the focus of today’s hearing, 

is a central part of that challenge. I know there are disagreements 

among us about the issue but I have always been open and candid 

with you before the subcommittee and in your personal offices on 

where I stand, and I believe I have consistent in what I say both 

here and at the FCC. Most Americans have a broadband monopoly 

or at best, duopoly, from which to choose. Without adequate competition in the Internet access service market, allowing these companies to exercise unfettered control over America’s access to the 

Internet not only creates risk to technological innovation and economic growth but also poses a real threat to freedom of speech and 

the future of our democracy. This is why I have long advocated for 

some limited rules of the road to maintain openness and freedom 

on the Internet. It is why the Commission adopted in 2005 on a 

bipartisan basis an Internet policy statement that contained the 

basic rights of Internet consumers. This is not about government 

regulating the Internet. It is about ensuring consumers rather than 

Big Telephone or Big Cable have maximum control over their experiences when they go online. 

During the FCC’s proceeding to examine the need for open Internet rules, I swung my door open wide so I could hear from every 

interested stakeholder. I met with broadband providers, online entrepreneurs, technology investors, consumer groups and many individual citizens from across the country. In the end, given that 

fewer and fewer places are controlling access to the Internet, I concluded again that we must make sure a few gatekeepers cannot 

favor their own content, throttle certain types of applications and 

block access to information at will. With the adoption of the open 

Internet order last December, we have at least some concrete rules 

to prevent gatekeepers from circumventing the openness that made 

the Internet the Internet. The Commission has acted using the authority I believe it has and that I lay out in greater length in my 

formal statement, and now both Congress and the courts will help 

to determine where we go from here. 

20 

While we may not always agree on how to proceed on every policy front, there are so many challenges confronting us where you 

and I share common cause and where I think we can make real 

progress this year. First and foremost among them is ensuring that 

our first responders have the communications tools they need to 

protect American lives and property. We are fast approaching the 

10th anniversary year of 9/11. I believe we must make good on our 

promise to create a nationwide interoperable public safety network 

and make progress in significant and tangible ways this year. 

Another area crying out for attention is spectrum policy as consumers expect ever-faster speeds and mobility for their broadband, 

the demand on our finite spectrum resource skyrockets. Just last 

week, the President set an ambitious goal of getting high-speed 

wireless coverage to 98 percent of Americans. This is another area 

where we can work hand in hand to find ways to maximize our 

spectrum resource. In addition, to help meet our shared broadband 

goals, the Commission took an important step last week toward 

transforming the Universal Service Fund, an intercarrier compensation system to address our going-forward communications infrastructure needs. 

There are other challenges, privacy, digital literacy, to name a 

few, where I believe we can work together to ensure that our citizens have the tools they need for our increasingly online world. In 

addition, while I will not dwell on it here, I think most members 

of this subcommittee know of my concerns about America’s current 

media environment, and this goes to the question of broadband and 

online too. A vibrant media landscape, traditional and online, is 

critical to providing our citizens with the news and information 

they need to participate in our democracy. There are some huge 

problems here. 

Finally, as I do every time I come up here, I urge you to take 

action to modify the closed-meeting rule, which prohibits more than 

commissioners from ever talking with one another at the same 

time outside of a public meeting. I believe this prohibition has on 

many occasions during my 10 years at the Commission stifled collaborative discussions among colleagues, delayed timely decisionmaking and discouraged collegiality. Removal of this prohibition 

would, in my mind, constitute as major a reform of Commission 

procedures as anything I can contemplate. 

Thank you again for the opportunity to be here today. I look forward to your comments, your counsel and your questions. 

[The prepared statement of Mr. Copps follows:] 

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Mr. WALDEN. Thank you, Commissioner, and that is why we 

have you all here so that you can all get along and chat. It is a 

good thing. And we have never questioned, Commissioner Copps, 

your forthright approach to telling us your opinions, either, nor has 

anyone in America, and we appreciate that. 

I would like to go now to the commissioner, Mr. McDowell. 

Thank for you for being here. We welcome your comments and testimony as well. 

STATEMENT OF ROBERT M. MCDOWELL 

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

Eshoo and Chairman Upton and Ranking Member Waxman, and I 

also want to special shout-out to Congresswoman Harman. This is 

a sad day for me. This is the last time all of us will testify before 

you. I want to thank you for your years of public service. It is a 

sad day for the McDowell household. I know my brother, Kelly, the 

former mayor of El Segundo, California, is sad to have you leave 

the U.S. Congress, but I know the Woodrow Wilson Center will be 

in excellent hands with you at the helm, so thank you for your 

service. 

Mr. Chairman and members of the Committee, the markets 

under the purview of the FCC are dynamic and ever evolving. Both 

the core and the edge of the Internet are growing at breakneck 

speeds, all to the benefit of American consumers. For instance, the 

United States leads the world in 4G wireless deployment and adoption. Wireless broadband is the fastest growing segment of the 

American broadband market. The United States I also the global 

leader in the creation and use of mobile apps. In fact, the top 300 

free mobile applications in the U.S. app stores enjoyed an average 

of more than 300 million downloads per day last December, and I 

think most of those were on the McDowell kids’ phones, actually. 

Not surprisingly, smartphone sales have outpaced PCs for the first 

time. 

On the other hand, in spite of these positive developments, last 

year the private sector invested an estimated $44 billion in new 

broadband technologies, which is significantly lower than years 

past. I am hopeful that the FCC can work constructively to increase opportunities for investment and job growth by bringing regulatory certainty to the broadband marketplace. With Congress’s 

guidance I look forward to adopting policies that put the power of 

more spectrum into the hands of consumers, help accelerate 

broadband deployment and adoption, make our universal service 

subsidy program more efficient, and modernize our media ownership rules, among many, many other endeavors. 

In addition, the FCC should also strive to clear away regulatory 

underbrush that may have outlived its usefulness and now only deters constructive risk taking. Congress empowered the Commission 

to do just that when it codified section 10s forbearance mandate 

more than 15 years ago. Streamlining our regulations could take 

significant burdens off the backs of entrepreneurs and give them 

more freedom to invest and innovate. Such deregulatory action 

could serve as a much-needed short in the arm for America’s economy. President Obama said as much in his recent Executive order. 

29 

And a little secret about the FCC, which the chairman has already touched on. More than 90 percent of our votes are not only 

bipartisan but are unanimous. I have enjoyed working with my colleagues on many recent initiatives including continuation of our 

longstanding work on unlicensed use of the TV white space, simplifying the process for the construction of cell towers, spectrum reallocation, and initiating the next step to perform our universal 

service subsidy system. 

Obviously we have had a few respectful disagreements as well 

such as our differences concerning the new regulations of Internet 

network management, and I have included for your convenience a 

copy of my dissent. Nonetheless, I am confident that the five of us 

have the ability and the desire to continue to find common ground 

on an array of other issues that touch the lives of every American 

every day. 

Thank you, Mr. Chairman, and I look forward to the questions 

from the committee. 

[The prepared statement of Mr. McDowell follows:] 

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Mr. WALDEN. We appreciate your testimony. 

Now I’d like to go to the distinguished member of the Commission, Ms. Clyburn. Thank you for being with us today. We look forward to your comments. 

STATEMENT OF MIGNON CLYBURN 

Ms. CLYBURN. Thank you very much. Mr. Chairman, Congresswoman Eshoo, members of the subcommittee, good morning, and 

thank you for inviting me to testify. 

The current success of the Internet is largely due to this open architecture. This tremendous technological leap is a great equalizer. 

It allows traditionally underrepresented groups to have an equal 

voice and equal opportunity. It enables any connected individual to 

distribute his or her ideas to a global network or run a business 

right from their very own home. The Internet reduces the barriers 

to entry for new players. It is a gateway to success at a low capital 

cost. That is why it is so important for me to see that this technological marvel remains open, accessible and affordable for every 

American regardless of where they live, work or play. 

There have been strong criticisms over the past several months 

regarding the Commission’s Open Internet Order. Some say that 

nothing was broken so rules aren’t needed and that this will kill 

job opportunities and stifle innovation and investment. We have 

also heard that the order is riddled with loopholes, provides inadequate protections for wireless technologies and prioritizes profits 

over the general public good. 

First, I want to speak to the assertion that the Internet marketplace is functioning fine and does not need fixing. There have been 

formal complaints filed and allegations lodged at the Commission 

about Internet service providers’ behavior despite their expressed 

belief in an open Internet. To that point, the rules we codified in 

December will serve to ensure that the Internet remains open and 

vibrant and that millions of surfers, innovators and everyday consumers will have the essential protections they need so that an 

open Internet is still there tomorrow. The action we took in December will allow people to view photos, sitcoms and full-length movies 

without deliberate interruption, distortion or blockage by any ISP 

which may have competing economic interests. 

I believe one of my primary obligations as an FCC commissioner 

is to protect consumers and allow for activities on the Internet. Our 

Open Internet Order does just that. I embrace the position that 

without clear rules, investment in new services and applications 

will be uncertain, overly cautious and will result in an underperforming marketplace. We have heard this repeatedly from 

innovators and small businesses. A number of companies told me 

of their difficulty, sometimes inability to obtain financing because 

the rules of the road were unclear or that open Internet protections 

were inadequate. Venture capitalists fear that ISPs would discriminate against their possible competitors, they said. Small businesses 

like these are the lifeblood of this Nation and the uncertainty and 

lack of investment in this sector will stifle the full potential of 

these American enterprises. 

Others argue that existing law provides sufficient consumer protections and safeguards. I disagree. My understanding of current 

69 

antitrust law is that violations and harms are addressed only after 

an incident has occurred, thus ISPs have the ability and potentially 

the incentive to stifle new competitive businesses. No government 

action after the fact could properly address such significant impact. 

Therefore, I believe that putting basic protections in place was not 

a reckless act. The Commission did this in order to prevent very 

real and irreversible harms that could occur in the marketplace. 

Hugely effective business models that were not even in existence 

10 years ago have experienced staggering growth due to their ability to directly offer their services to consumers on the Internet 

without ISPs demanding payment for prioritizing their Web sites. 

I want to ensure that many more businesses have those same opportunities in 2021. 

Most people rely on the Internet on a regular basis as indicated 

in a recent Pew Research Center study, which shows that 78 percent of American adults sign on daily. The President has said that 

the Internet is a vital infrastructure and has become center to the 

daily economic life of almost every American, and you recognize its 

significance too by charging the FCC with developing a National 

Broadband Plan to ensure that high-speed Internet is available to 

all Americans no matter where they live. So I do not think we 

acted recklessly nor do I believe that we have harmed the Internet. 

What we did was put a policy in place that will ensure access to 

lawful Web sites, applications and services so that consumers, not 

their Internet service providers, can choose which companies, products services and ideas will succeed. 

Thank you for this opportunity this morning and I look forward 

to answering any of your questions. 

[The prepared statement of Ms. Clyburn follows:] 

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Mr. WALDEN. And we appreciate your testimony and look forward to your answers. 

Now I would like to recognize Commissioner Baker. We are delighted to have you here as well. We look forward to your testimony 

and your answers. Please go ahead. 

STATEMENT OF MEREDITH ATTWELL BAKER 

Ms. BAKER. Thank you very much. Good morning, Chairman 

Walden, Ranking Member Eshoo, Chairman Upton and Ranking 

Member Waxman. I could on. Thank you all, distinguished members of the subcommittee for the opportunity to appear before you. 

Today, 95 percent of U.S. households have access to broadband, 

and the vast majority of those have broadband choice. Our regulatory approach has attracted over half a trillion dollars to build a 

new network infrastructure since 2000. Billions more have been invested in devices and applications that ride on those networks. 

This is an area of our economy that is clearly working. The Commission’s most significant challenge is how to build on this success. 

Given our Nation’s significant budgetary constraints, it is clear 

that the next generation of networks will be constructed primarily 

by private capital just as today’s networks were built. It is through 

this prism, how do we craft policies to promote greater investment 

in our Nation’s infrastructure, that I view all FCC decisions. 

With that perspective, I believe that net neutrality was both the 

wrong policy and the wrong priority. Further, establishing a nationwide policy is Congress’s role, not the FCC’s. We exceeded our 

statutory authority. Preserving open Internet is non-negotiable. It 

is a bedrock principle shared by all in the Internet economy. The 

Internet is open today without the need for affirmative government 

regulation. 

Lacking an evidentiary record of industry-wide abuses, the Commission’s net neutrality decision was based on speculative harms. 

The word ‘‘could’’ alone appears over 60 times. By acting in anticipation of hypothetical harms, the result is overly broad rules which 

I fear will force the government into too prominent a role in shaping tomorrow’s Internet. 

The genius of the Internet is that there is no central command 

to dictate how innovation is to occur. The Commission has now inserted itself into that role of judging how the Internet will resolve. 

Government will be hard pressed to manage the next generation of 

the Internet as well as competition and consumer demand have 

done for previous generations. This risk is heightened because the 

Internet and our broadband networks are still very much in their 

infancy. The Internet will increase fourfold by 2014, and mobile 

broadband will more than double each and every year. 

To respond to the consumer demands for faster and more-robust 

broadband services, operators will have to invest billions more in 

their infrastructure. They will need to experiment and innovate to 

serve consumers. Decisions about the future of the Internet will 

now be managed by the Commission subject to the uncertainty of 

government sanction and delay of government decision-making. 

The open-ended nature of this decision both in how it was legally 

justified and in the number of issues left undefined or undecided 

will only breed greater regulatory uncertainty which necessarily 

78 

raises the cost of capital. In too many decisions, this decision was 

a first step, not a last. 

Congress has given the Commission clear statutorily mandated 

responsibilities, and net neutrality is not one of those. Lacking explicit authority, the Commission twisted the statute in order to establish a national Internet policy. Under the same unbounded 

claim of legal authority, the FCC could adopt any policies it desires 

to promote its particular vision of the Internet. Net neutrality was 

also the wrong priority for the Commission. The focus on net neutrality diverted resources away from the bipartisan reform efforts 

that could have directly addressed the core challenge of promoting 

broadband deployment. This lost opportunity is one of the gravest 

consequences of the net neutrality debate. 

While we may disagree on particular details, I welcome the 

chairman’s renewed focus on universal service, spectrum and 

broadband infrastructure. All of these reforms are directly linked 

to broadband deployment, and I only regret that we did not place 

a higher priority on these efforts sooner. Our ability to successfully 

take any of these steps is dependent upon our strong working relationship with Congress to ensure that we prioritize and target our 

efforts appropriately and that we have sufficient statutory authority to move forward to promote our shared goals. 

I look forward to your questions. Thank you. 

[The prepared statement of Ms. Baker follows:] 

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Mr. WALDEN. Thank you very much for your testimony and the 

testimony by all the commissioners and the chairman. We appreciate it. 

Just for the Committee as an announcement, we are going to try 

and do two rounds at least of questions and we will go in the order 

in which you arrived and then by seniority after the gavel fell, and 

I want to just point out that in the great spirit of bipartisanship 

here on the subcommittee, the Democrats actually have three witnesses and we only have two. 

Mr. UPTON. We are looking to change that after 2012. 

Mr. WALDEN. We will try not to let that happen again. 

All right. I will start with the first questions. Commissioner 

McDowell, you said on page 154 of your dissent that less than a 

year ago the Commission in attempting to defend its Comcast 

BitTorrent decision in the D.C. Circuit ‘‘acknowledged that it has 

no express authority over an Internet service provider’s network 

management practices.’’ They rely on section 706 to authorize the 

FCC in this order to adopt network neutrality rules. Section 706 

also states that ‘‘each State commission’’ and Commissioner Clyburn, you will be interested in this ‘‘with regulatory jurisdiction 

over telecommunications services shall encourage the deployment 

on a reasonable and timely basis of advanced telecommunications 

capabilities to all Americans.’’ If the FCC is relying on section 706 

and perhaps B, not A, but you do trigger the entire statute, I believe, does that not mean that every State regulatory commission 

as authorized in 706(a) can also adopt its own network neutrality 

rules including price caps as specified in that statute? 

Mr. MCDOWELL. It could absolutely, Mr. Chairman. One of the 

concerns is that in the FCC’s order, there is no limiting principle 

on the FCC’s authority so that is not defined or limited in the FCC 

order. 

Mr. WALDEN. Commissioner Clyburn, in early January just a few 

weeks after the Commission’s open meeting, a complaint was already filed alleging that a wireless provider offering a low-cost data 

plan to informed customers is violating the Commission’s rules. 

The rules still have not taken effect. So the question is, is Metro 

PCS’s low-cost data plan a violation of the Commission’s order? 

Ms. CLYBURN. Those type of complaints generally that come before the Commission, I generally do not comment on before a decision is rendered, so I don’t know if you have a follow-up but that 

particular one I am not comfortable in commenting on. 

Mr. WALDEN. Well, I guess the question is not—let me back off 

then. Would a complaint like that violate the Commission’s rules 

in general? 

Ms. CLYBURN. I can say that in general to answer your question 

more broadly, in fact there have been complaints before the agency 

and that is why the chair and the commissioners voted to move in 

this particular direction. It is in order to be able to have the dexterity to address those particular issues as proof that there are 

some issues in the market. 

Mr. WALDEN. Commissioner Baker, the order argues that it can 

regulate cable Internet access because broadcasters are increasingly providing video over the Internet. Does that mean then, 

taken to an extreme, that the FCC could regulate Netflix since 

85 

broadcasters are increasingly offering shows on DVD or Netflix 

Web service? 

Ms. BAKER. Well, I think that is the concern with the statutory 

authority the Commission is using for this order and that we have 

unbridled access to regulate whatever we want to do on the Internet ecosystem. 

Mr. WALDEN. It has also been widely reported, Commissioner 

Baker, that you and Commissioner McDowell did not receive the 

final draft of the order until close to midnight the day before the 

vote. Is that correct? 

Ms. BAKER. Yes, sir. 

Mr. WALDEN. Commissioner McDowell, do you want to speak to 

that at all? 

Mr. MCDOWELL. That is true. We had received other drafts prior 

to that but the final draft that we were to vote on and base our 

dissent on didn’t come until close to midnight the night before the 

meeting. 

Mr. WALDEN. And Commissioner McDowell, while the order does 

not explicitly apply Title II to broadband Internet access services, 

aren’t the rules that were imposed tantamount to common carriage? 

Mr. MCDOWELL. Mr. Chairman, as I point out in my dissent, I 

think the rules really is a Title II order in disguise, this sort of a 

threadbare Title I disguise, and that is part of the concern that you 

were asking Commissioner Clyburn about the potential for rate 

regulation. You know, last year, last January when the FCC argued before the D.C. Circuit in the Comcast BitTorrent case that 

the general counsel was cited in the D.C. Circuit’s order from last 

April. The general counsel said that the Commission could have the 

authority to regulate broadband rates as well, and there is no limiting principle in the order that would restrain the Commission 

from regulating the—— 

Mr. WALDEN. I think that the concern some of us have is, this 

box has been opened pretty widely. The tether seems to have been 

snapped and the authority could be taken clear to the extreme of 

where the States now under section 706(a) if it is read that way, 

it could trigger the statute and the States could enter into regulation of the Internet. 

Now, Commissioner McDowell, if the FCC has conducted no market analysis, which it says it has not, is there any principled reason 

for excluding companies like Google and Skype from these rules? 

Mr. MCDOWELL. Again, there is no limiting principle in the order 

so I think under the logic of the order, the FCC’s jurisdiction is 

boundless. 

Mr. WALDEN. And after all, Skype blocks access to competing application providers like fring, right? You have a blockage going 

there, and Google and Facebook have had some blocking issues involving consumer access to their own contacts. 

My time is expired. With that, I would recognize the gentlelady 

from California, Ms. Eshoo. 

Ms. ESHOO. Thank you, Mr. Chairman, and thank you to each of 

the commissioners for your excellent opening statements. 

Today’s hearing is entitled ‘‘Network Neutrality and Internet 

Regulation: Warranted or More Economic Harm than Good?’’ The 

86 

three basic rules that the chairman rolled out, which is the framework for what the Commission did—transparency, no blocking, no 

unreasonable discrimination—I don’t think anyone is against transparency, for blocking and for unreasonable discrimination. If you 

are, raise your hand on the subcommittee. But I want to examine 

the issue of harm and what led to the framework that the chairman stated and which I just restated. What were the harmful 

things that have arisen at the FCC that led to rules of the road? 

I mean, the Republicans are the ones saying the sky is caving in. 

Really, life is tidy. No one has crossed any lines. There isn’t any 

reason to do this; in fact, it is really going to hurt our country. But 

I want to give you the opportunity to state as briefly as you can 

what led to this and what examples exist and were brought to the 

Commission’s attention? 

Mr. GENACHOWSKI. Thank you. Well, going back to at least 2005, 

the Commission made clear on a bipartisan basis that it would enforce open Internet violations. Against that background, it is surprising that there would be any violations of Internet freedom at 

all but there have been. There was a telephone company called 

Madison River that blocked access to competing voice over Internet 

providers. There was a cable company last year that became significant litigation that blocked competing video providers. Last 

year there was a mobile company that blocked access to mobile 

VoIP. There have been court settlements that are part of the record 

where as part of the settlements, Internet service providers agree 

that they engaged in conduct that was inconsistent with open 

Internet principles. So as against the history of bipartisan intention to enforce, it is surprising there were any violations at all. 

One of the harms that we looked at was, if we for the first time 

would be to remove basic open Internet protections, what we heard 

repeatedly from startup companies, entrepreneurs, investors was 

that without that, they would lose the confidence to invest in startup companies to develop the kind of innovative products and services and applications that we are all so excited about and that we 

need to lead the world in innovation in the 21st century. 

Ms. ESHOO. Thank you. 

I have a question for each one of the commissioners, and a yes 

or no will do. The Republican House leaders and members of this 

committee are considering using a resolution of disapproval under 

the CRA, the Congressional Review Act, to overturn the FCC’s 

Open Internet Order. Do you support or oppose Congress using the 

CRA to overturn the order? Chairman Genachowski? 

Mr. GENACHOWSKI. Well, I don’t have a vote in the Congress. I 

don’t think it is the right idea because I think it will increase uncertainty in this area. 

Ms. ESHOO. Commissioner Copps? 

Mr. COPPS. I would not be for it. 

Ms. ESHOO. Commissioner McDowell? 

Mr. MCDOWELL. First of all, all the examples cited by Chairman 

Genachowski were resolved in favor of consumers under existing 

law before the FCC’s action. I think that is important to note. But 

I also subscribe to the notion that Congress tells me what to do, 

I don’t tell Congress what to do, so if Congress wants to overturn 

an FCC order under the CRA—— 

87 

Ms. ESHOO. But do you think it is a good idea? Do you support 

it? 

Mr. MCDOWELL. Well, obviously I dissented so I think the order 

isn’t founded in law or fact. 

Ms. ESHOO. Commissioner Clyburn? 

Ms. CLYBURN. One of the things that I wanted to point out, if you 

will allow me a second, is that the companies that were cited by 

the chairman, those companies in fact have millions of customers 

who have potential vulnerabilities and who might not have the 

ability or the expertise to file a formal complaint. 

Ms. ESHOO. About the CRA? 

Ms. CLYBURN. So in terms of your question, while I respect the 

body, I am not embracing of the idea. 

Ms. ESHOO. Thank you. 

Commissioner Baker? 

Ms. BAKER. I will be respectful of your time. We take our orders 

from Congress so I think it is important for Congress to tell us 

what their opinion is. 

Ms. ESHOO. I don’t know what that means. 

Ms. BAKER. It means if Congress has——— 

Ms. ESHOO. Do you think it is a good idea? 

Ms. BAKER [continuing]. The CRA to tell us that they disapprove 

of this action, I think—— 

Ms. ESHOO. Do you think a CRA is a good idea? 

Ms. BAKER. I would say I also dissented in the order. I disagree 

with that we have statutory authority to do what we have done. 

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

Ms. ESHOO. Thank you. 

Mr. WALDEN. And just for the record, Ms. Clyburn, we have two 

chairmen here. I assumed you were referring to that chairman, not 

this chairman in your comments there. 

Ms. CLYBURN. Yes. 

Mr. WALDEN. So now let us go to the other chairman, Mr. Upton, 

for 5 minutes. 

Mr. UPTON. Thank you, Mr. Chairman. 

I know as George Will said not too long ago that most folks, most 

Americans are not real fans of how the U.S. government works. I 

don’t think it works very well. But in fact the Internet does. Why 

in the world would you put the government in charge of the Internet? And as Ranking Member Eshoo said and also my good friend, 

Ed Markey, on net neutrality I think there is no secret that at 

least this side of the aisle is not particularly fond of the new net 

neutrality rules and I know that some 300 Members of Congress 

contacted the FCC in the last year voicing such concerns, and probably agree that it really isn’t the light touch that we were hoping, 

which is why in fact a CRA may be introduced in the next couple 

of days and the Congress of course then has 60 days, legislative 

days, to act in both the House and the Senate. 

Commissioner McDowell, you were very outspoken in your dissent on the need for a market analysis. Would a market analysis 

have validated the order, the order’s consent? 

Mr. MCDOWELL. I don’t think so. Each time the government has 

examined the broadband Internet access market, whether it was 

the Federal Trade Commission in 2005, or 2007, the FCC itself in 

88 

2007, the antirust division when they filed comments to the FCC 

a year ago in January, we can debate exactly what they said but 

what they did not say, they did not say that there was a concentration and abuse of market power or any sort of market failure and 

that actually in many of those cases independent government agencies had warned against the uncertainty and the negative collateral 

effects of potential regulation in this area. 

Mr. UPTON. You mentioned a little bit earlier in response to the 

Madison River and the one phone company and a few others as it 

related to what the FCC had done. Do you believe that there are 

existing FCC remedies that are in place if in fact an Internet service provider engaged in that type of prospective conduct that this 

order is designed to prevent? 

Mr. MCDOWELL. I think there are laws already on the books that 

would prevent this, whether it is section 2 of the Sherman Act or 

section 5 of the Federal Trade Commission Act. There are general 

consumer protection powers that the government has here so if it 

is refusal to deal or exclusive dealings and things of that nature, 

the government has the power to cure that. 

Mr. UPTON. And that was a little bit of the result of that debate 

and that answer came out of the Judiciary Committee yesterday. 

Is that not correct? 

Mr. MCDOWELL. That is what I read, yes, sir. 

Mr. UPTON. Chairman Genachowski, wouldn’t it have been prudent for the Commission to do a simple market analysis before 

adopting the rules that we hear so much will burden the industry 

if in fact the order is pursued? 

Mr. GENACHOWSKI. Mr. Chairman, the order engages in extensive market analysis. There is a specific section on costs and benefits. There is a footnote that points out that the order doesn’t make 

a specific market power finding which would put this in the antitrust area but the order extensively analyzes the market. We received significant input and a record from market participants, 

economists and others and so I think the Commission engaged in 

extensive market analysis. 

Mr. UPTON. Now, I know Verizon and others have threatened, 

will be taking this to court to look at a legal challenge. Has your 

legal team given you an analysis that they think this order will be 

able to stand on its two feet and will be verified by the courts? 

Mr. GENACHOWSKI. Yes, they have, that it is consistent with the 

Communications Act, with Supreme Court precedent in this area 

and with the D.C. Circuit Comcast decision last year. 

Mr. UPTON. Mr. McDowell, do you agree with that? 

Mr. MCDOWELL. Well, I disagree obviously. I wrote a very 

lengthy dissent with 130 footnotes, mainly focusing on our lack of 

legal authority, so I think it will fail on appeal. 

Mr. UPTON. Thank you. Yield back. 

Mr. WALDEN. The gentleman yields back his time, and now recognize the chairman emeritus of the committee, Mr. Waxman. 

Mr. WAXMAN. Thank you very much, Mr. Chairman. I think the 

American people would be outraged if they had some Internet carrier or some provider of the service to their home, their cable or 

a telephone company blocking what they can get on the Internet 

or choosing something that benefited them economically and then 

89 

keeping consumers from getting programs. I hope nobody would 

think the idea of stopping Internet freedom, allowing the Web to 

be treated in a neutral way, giving the consumers the power to access whatever they want, that is what I think American people 

would support. And if they found that this was happening, they 

would want it stopped. 

Now, Chairman Genachowski, you think you had enough reason 

to believe this could happen unless you set some rules in place. Is 

that correct? 

Mr. GENACHOWSKI. That is correct. 

Mr. WAXMAN. Freedom is a strange word. It is overused and misused a lot, especially around this place. Freedom for the consumer 

is to get whatever they hope to access but that freedom can be curtailed, some people say by government, but it also can be curtailed 

by other private interests, and government sometimes has to regulate hopefully in a light enough way that they don’t discourage investment and competition and all the good things but the government needs to set rules of the road, saying you cannot do this. Otherwise we saw what happened in Wall Street, we see in other 

places. No regulation means less freedom for the consumers. 

Mr. Copps, is that what your thinking was when you looked at 

the Commission regulating in this area? 

Mr. COPPS. I think that is absolutely correct. That would reflect 

the thinking I have, and you know we have talked about some of 

the specific problems that have come before the Commission but 

there is a historical dimension to this too. This is such an open and 

dynamic and opportunity creating technology and to make sure 

that it is unfettered as we go down the road is so important. The 

history of every other media generation that we have had shows 

that it goes from being open, first being touted as the great new 

opener and a great new vista for the American people’s freedom 

and inevitably what you get is closure and consolidation and tighter and tighter control. That is happened to radio, that has happened to television. It happened to the film industry, and I think 

we need to be taking some precautionary steps to make sure that 

this doesn’t happen in this particular technology. 

Mr. WAXMAN. Well, those precautionary steps could be taken by 

Congress and we could pass a law. We tried to pass a law. We even 

had most of the stakeholders agreeing to a law. We couldn’t get the 

Republican members to pay attention to it. Congress could pass a 

law but evidently the FCC thinks it has the power, and there is 

some dissent as to whether you have the legal authority or not. 

That will be decided by the courts. But meanwhile, what you are 

trying to do is preserve the freedom of the Internet, and a lot of 

the complaints we hear about stopping innovation and investment 

seem to be quite remarkable when you look at the fact that most 

of the groups that are being regulated feel that this regulation, 

that there is a light enough approach that will not have an undue 

impact on them, and in fact, it is welcomed by everybody because 

it provides some regulatory certainty. Today in Bloomberg, they 

said investors so far don’t seem to see the new rules as a threat, 

and they say that you look at Comcast, Time Warner cable, AT&T, 

they are all saving they can live with this. So it seems to me to 

sound the alarm over whether this was a good idea and whether 

90 

we are hurting some of the industry in the United States is not accurate. 

But I found it interesting that one of the questions that was 

raised is how speculative the harm was for the interference in the 

Internet, and in order to attack the proposal, they raised the specter of price controls as a potential for the FCC. Does the FCC plan 

to do price controls? They say this is a slippery slope, opening the 

road to regulation that is unfettered. Is that what is happening, 

Chairman Genachowski? 

Mr. GENACHOWSKI. Not at all. This is in no way about price controls. 

Mr. WAXMAN. Does anybody in this group believe there ought to 

be price controls? If you think so, just say yes. 

Ms. CLYBURN. Mr. Chairman, if you say those words inside of the 

walls of the FCC, there is trouble. 

Mr. WAXMAN. We don’t want price controls either. You don’t 

want price controls. So to raise that as a specter, it seems to be 

unfortunate. Now, this Congressional Review Act not only repeals 

this rule but it prevents the FCC from acting at all in this area, 

and I would hope that Commissioner McDowell and Commissioner 

Baker wouldn’t want to take the power away from the FCC to act 

when they feel it is appropriate to act if Congress hasn’t passed 

any legislation. I strongly hope we can stop that Congressional Review Act attempt to overturn the FCC’s actions. 

I yield back my time, Mr. Chairman. 

Mr. WALDEN. The gentleman’s time is expired. I now recognize 

the other chairman emeritus, Mr. Barton, for 5 minutes. 

Mr. BARTON. Thank you, Mr. Chairman. And again, nothing but 

compliments to the Commission for the intellectual ability that is 

assembled here. I am very proud that we have jurisdiction over the 

FCC, and on an individual basis, I consider each of you friends. 

Having said that, I am at a loss as I listen to what my good 

friend from California, Mr. Waxman, just said that no regulation 

means less freedom, that is Orwellian in the extreme just on the 

face of it. We are not so opposed, those of you that oppose this 3- 

2 ruling, because of what you ruled but the fact that you established the principle if it goes unchallenged that you can regulate 

the Internet. That is what troubles me, not the light touch that Mr. 

Waxman refers to, the fact that if we let this ruling stand, this 

Commission is not going to do price controls. I believe the 

gentlelady from South Carolina when she says, you know, if you 

mouth the word price controls within the walls of the FCC, bad 

things happen. I understand that. But a future FCC could. That is 

why Chairman Upton and Chairman Walden and others are going 

to introduce this Congressional Review Act or a standalone bill to 

overturn it. What Chairman Genachowski and the two commissioners that sided with him have said is, we have got the votes and 

we are going to establish the principle that we can regulate the 

Internet. Now, we understand how controversial that is so we are 

not going to do a lot, we are just going to try to get the nose of 

the camel under the tent, and once we have got that established, 

in the future some future Commission can come forward. 

I am so appreciative of Commissioner McDowell and his dissent 

and all the intellectual footnotes that he put into that. I am very 

91 

appreciative of what Commissioner Baker put in the record in her 

opening statement and I associate myself 100 percent with that. It 

just seems to me that this ruling, when you listen to the answers 

to my friends on the minority side, you are concerned about potential harm in the future so you have to establish the principle now 

that we can regulate to protect against some unknown harm in the 

future. 

Now, Commissioner McDowell, you said, I believe in your dissent 

and again in your opening statement and again in response to a 

question that the existing statutory law and authority that the 

FCC has is sufficient to handle any conceivable potential harm in 

the future without establishing these rules. Is that not correct? 

Mr. MCDOWELL. I think what I said is that we have—the government in general under general consumer protection and antitrust 

laws has ample authority so there are a lot of agencies that could 

intervene. 

Mr. BARTON. And Commissioner Copps, nobody has asked you a 

question yet and you are a bright fellow. Why do you disagree with 

what your fellow commissioner, oddly, to your left, just said? 

Mr. COPPS. I have a little different take on this than probably 

all of my colleagues that the Commission has this authority, has 

had this authority for a long time, has had this authority recognized by Congress and the courts for a long, long period of time and 

that the best way for us to express and exercise that authority is 

to put advanced telecommunications transmission back where it belongs and that is in Title II. I think the Title I road that we went 

down has a substantially better chance in court than the previous 

decision that went on the Comcast case, but my best reading of the 

statute and the legislative history and the court decision is that 

this belongs within Title II. I do not know of a court in the land 

including the Supreme Court that has said we don’t have that authority. In the Brand X case, I don’t think the court could have 

been clearer in saying that deference is accorded to the Commission in these cases where there is ambiguity or difference in the 

definition of the statute or the terms of the statute. There are two 

or more reasonable ordinary ways to interpret it, that our choice 

of one of them was accorded deference and they accorded deference 

to the decision that was made on cable modems in 2005 over my 

objection but they also made clear that times change and our classification can change and our decisions can change, and Justice 

Thomas and others were eloquent in pointing out that that is 

where the expertise to make a lot of these judgments resides. I am 

not as much in search for that authority as some other folks are. 

Mr. BARTON. Thank you. 

And we are going to do another round? 

Mr. WALDEN. Yes, we are, sir. 

Mr. BARTON. Thank you. 

Mr. WALDEN. We appreciate your response. 

I now go to the gentleman from Massachusetts, Mr. Markey, for 

5 minutes. 

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

First of all, most of the industry supported the decision. Comcast 

has made a commitment to comply with them for 7 years as part 

of the Comcast/NBCU merger conditions regardless of the outcome 

92 

of any judicial review. Many wished that the Commission had gone 

much further, restoring Title II authority as Congress originally intended in the Telecom Act of 1996. I wish the Commission had 

gone much further than they did. 

And let me also say that there is a misunderstanding here about 

the Commission’s role here. When AT&T had 1.2 million employees 

and they were the only phone company, it was the Commission 

that made the decision that said if you want to go down to a store 

and buy another phone other than the black rotary dial phone, you 

could do so. AT&T said you are interfering with the free market 

if you let people go and buy another phone other than the black 

rotary dial phone. In the 1970s when MCI and Sprint were starting 

up, AT&T said that a consumer should have to dial 21 additional 

numbers before you reached the number that your mother told you 

to memorize in case you were ever in an accident. Well, those additional 21 numbers made it very hard to have competition but the 

FCC made sure that competition and consumers would be king and 

queen. That is what the FCC has been doing over the years. 

There is a long history here of AT&T and the Baby Bells of engaging in anticompetitive, anticonsumer activity. They said a 

phone call, a long-distance phone call should cost a dollar a minute 

before the government got in. When you were making a long-distance phone call or you got one, you would say hurry, grandma is 

calling from California, it is long distance, and it was. It was a dollar a minute until we got the competition in and the FCC ensured 

that there would be protection of consumers. Now it is under 10 

cents a minute. 

So all of this history of light touch, yeah, light touch, to make 

sure that a two by four didn’t come in from the big companies and 

crush the consumers, making them, you know, be tipped upside 

down and paying more than they should have to. 

So Mr. Chairman, we have fallen in the United States to 15th 

in broadband ranking in price and accessibility and in capacity. Is 

this ruling part of your goal to make sure that America regains its 

position as number one and two in the world before George Bush 

was sworn in and appointed the FCC that was chaired by Michael 

Powell? 

Mr. GENACHOWSKI. Absolutely, and I would say before addressing that directly, in response to what you said before, in each of 

those cases where the FCC took action to protect consumers, promote competition and innovation, someone sued and someone said 

the sky would fall, and in each case that is not what happened. 

Competition was enhanced, innovation was enhanced and the authority was established. 

Mr. MARKEY. Who sued after we passed the 1996 Telecom Act? 

Mr. GENACHOWSKI. A number of the carriers. 

Mr. MARKEY. Verizon sued. They said oh, that is anticompetitive. 

Pac Bell sued, Bell South sued. They said, oh, that is anticompetitive, you are going to let more consumers in. The people who sued 

are the same companies that right—actually AT&T and the NCTA 

and Comcast, they are not saying that. It is Verizon that is coming 

in and saying that they are going to sue but the rest of the industry so far has stayed on the sidelines. Yes, Mr. Genachowski? 

93 

Mr. GENACHOWSKI. On your point about U.S. leadership in innovation, it is so tied to preserving, in my opinion, the freedom and 

openness of the Internet. I mentioned before some of the Internet 

openness violations that we have seen, even as protections were in 

place, one of the things that we heard from innovators, startup 

companies, technology companies in terms of harm that would 

occur now if we didn’t adopt baseline rules is that without that investment would dry up. Investment in early—— 

Mr. MARKEY. Predictability in the marketplace is very important 

to unleash billions of dollars in private sector investment. 

Mr. GENACHOWSKI. Exactly. For us to lead the world in innovation, in my opinion, we need to have rules and a climate that drive 

billions of dollars of investment throughout the broadband economy 

to technology companies, early-stage startups and investors and 

also to our infrastructure, and I think in my opinion what we have 

accomplished here, and it is why there is a broad consensus in 

favor of this approach, is a framework in which there is certainty—— 

Mr. MARKEY. I agree with you. 

Mr. GENACHOWSKI [continuing]. And investment is driven 

throughout the broadband economy. 

Mr. MARKEY. Does the FCC intend on following through on the 

law and launching a set-top box unbundling proceeding and all 

video proceeding? Are you intending on doing that? 

Mr. GENACHOWSKI. Well, that is something that is under consideration. We haven’t announced a timetable for that but clearly people would like to see more innovation on their TV sets in their living. 

Mr. MARKEY. That is the language Mr. Bliley and I put in the 

1996 Act, and I really urge you—I think there are 100,000 new jobs 

that can be created if we give consumers access to new applications 

and new hardware out there in the marketplace. 

I thank you so much for all your good work. I think it was a very 

good decision that you made at the FCC. 

Mr. WALDEN. The gentleman’s time is expired. We now go to the 

vice chair of the committee, Mr. Terry, for 5 minutes. 

Mr. TERRY. Thank you, Mr. Chairman. 

And let me just start with this observation, is that much of our 

side of this dais, our concern is that and what we are opposed to 

is an agency, whether it is FCC or EPA, sua sponte issuing a set 

of rules without congressional authority or specific authority from 

this body, and in fact a majority of Congress in the past term 

under Democrat majority signed on to letters opposing this rule or 

this procedure. And I would like to for the record submit unanimous consent, to submit for the record the three letters dated October 15th, May 28th, and November 19th. 

Mr. WALDEN. Without objection. 

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

Mr. TERRY. I think the signatures on these objecting to the procedures are over 300 members but yet the FCC continued. 

Now, I want to get to another issue that has been hit on here 

about price regulation. At home and my campaign, I have Trend 

Micro to block all of the viruses and spyware, and I got as my 

monthly newsletter, e-mail newsletter from Trend Micro yesterday 

94 

coincidentally, and I am just going to read one part of Trend Micro 

Trendsetter newsletter here under net neutrality sent to all of their 

customers. ‘‘For consumers, deregulation’’ which is what we are trying to on this side of the aisle evidently do ‘‘of the Internet could 

mean higher Internet access prices as ISPs institute tiered models 

that offer speedier downloads to higher-paying customers.’’ Some 

people also worry that allowing businesses to choose what content 

or sites they will be offer will result in the commoditization of a 

formally free and open environment akin to the evolution of television from an essentially free service to a highly fragmented and 

fairly expensive, and like Anna Eshoo said, we all agree on the 

blocking and we can get into the issue of the principle base that 

seem to be working but obviously Trend Micro thinks that you 

have the power now and they want to get their customers lobbying 

here to make sure that you have the power of price setting. Then 

under 706, section—oh, and by the way, unanimous consent to submit—— 

Mr. WALDEN. Without objection. 

Mr. TERRY [continuing]. The Trend Micro e-newsletter on net 

neutrality. 

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

Mr. TERRY. And in section 706(a) says that this is the basis for 

your authority and the order has stated that price cap regulation 

is part of this, so obviously if you are saying that section 706 is the 

basis for your authority, you have authority to regulate prices, and 

there are companies out there that are now manipulating this rule 

to see if they can get a price advantage from the FCC. This seems 

to me to be anticompetitive and creates an atmosphere of uncertainty to new entrants in business operations about what can the 

FCC do to them or for them, so I am going to ask Commissioner 

Baker, has the FCC in developing this rule made any conclusions 

about the cost effect of flattening a tier to a one-price system like 

Trend Micro is requesting and saying that you should be doing? 

Has that been thought through? Is there an economic analysis of 

how that will affect the marketplace? 

Ms. BAKER. It is a good question and one of the biggest concerns 

that I have is where we are going with this in preserving the status quo of the Internet today where we are missing what the Internet may offer tomorrow, and so I think that through the specialinterest groups as they push into tighten the regulations through 

wireless such as the Metro PCS complaint that has been mentioned 

or specialized services or prioritization eliminating these, they will 

eliminate what is going to fund our next generation of broadband 

networks. So I worry that we in the rush to put out net neutrality 

rules, we are missing—we are flattening to a one-size-fits-all 

broadband what may be the next generation of the Internet. 

Mr. WALDEN. The gentleman’s time is expired. I now recognize 

the gentleman from Michigan, the chairman emeritus of the committee, Mr. Dingell, for 5 minutes. 

Mr. DINGELL. Mr. Chairman, I thank you for your courtesy. 

To Chairman Genachowski, there is broad agreement that reform 

of the Universal Service Fund is necessary. I believe that if done 

properly, such reform can support broadband build-out and create 

95 

jobs. Will you commit to completing proceedings to reform USF by 

the end of the year? Yes or no. 

Mr. GENACHOWSKI. Yes. 

Mr. DINGELL. To the remaining commissioners, going across 

starting with you, Mr. Copps, do you support the idea that we 

should have a completed survey by the end of the year? 

Mr. COPPS. A completed survey of? 

Mr. DINGELL. Of the spectrum. 

Mr. COPPS. Yes, I think it would be most helpful to have a spectrum, and it is a time-consuming process but the sooner we can get 

it, the better it will be. 

Mr. DINGELL. Thank you. 

Mr. McDowell? 

Mr. MCDOWELL. Yes. 

Mr. DINGELL. Commissioner Clyburn? 

Ms. CLYBURN. Yes, we have already started in that direction 

with the Spectrum Dashboard and other initiatives. 

Mr. DINGELL. And the last of our commissioners? 

Ms. BAKER. Yes, sir, absolutely. 

Mr. DINGELL. Again, Chairman Genachowski, I understand that 

the Commission is completing a spectrum inventory. Is that true? 

Yes or no. 

Mr. GENACHOWSKI. Yes. 

Mr. DINGELL. Again to Chairman Genachowski, when will the 

Commission have completed this inventory? 

Mr. GENACHOWSKI. Well, we have already completed the first 

phase. Our Spectrum Dashboard is up on our Web site. We will be 

proceeding the next phase relatively soon and we want to provide 

the public more and more information about how spectrum is actually being used. 

Mr. DINGELL. Now, again, Mr. Chairman, will that inventory be 

as comprehensive as the one mandated last year in the Housepassed Radio Spectrum Inventory Act? Yes or no. 

Mr. GENACHOWSKI. Yes, and we have been working with the committee on that. 

Mr. DINGELL. Now, again, Mr. Chairman, similarly, will the results of the Commission’s spectrum inventory be made available to 

the public? Yes or no. 

Mr. GENACHOWSKI. Yes, unless there is some compelling reason 

for a piece to not be, but yes. 

Mr. DINGELL. Now, will the Commission also submit a report to 

the Congress concerning the inventory? 

Mr. GENACHOWSKI. Concerning the inventory? 

Mr. DINGELL. Yes. 

Mr. GENACHOWSKI. We will make it public and we will provide 

Congress and the committee whatever reports it desires. 

Mr. DINGELL. Good. Now again, Mr. Chairman, with respect to 

the spectrum auctions, I note the National Broadband Plan states 

on page 79 that the government’s ability to reclaim clear and reauction spectrum is the ultimate backstop against market failure 

and is an appropriate tool when the voluntary process stalls entirely. Does this mean that the Commission will forcefully take 

spectrum from broadcasters if too few participate in voluntary spectrum auctions? Yes or no. 

96 

Mr. GENACHOWSKI. Well, we haven’t addressed the question. We 

have proposed a win-win-win incentive auction that will free up billions of dollars and bring market incentives into spectrum allocation, helping give this country what it needs, a lot more spectrum 

for mobile broadband. 

Mr. DINGELL. Now, I am just a Polish lawyer from Detroit, and 

sometimes I have trouble understanding some of these things, but 

you are going to have a voluntary spectrum auction. How is it 

going to be voluntary if there is pressure which is placed on the 

holders of this spectrum by the Commission? 

Mr. GENACHOWSKI. Because the auctions themselves would rely 

on market incentives, allowing the market to set a price for existing owners of licenses to make the choice between continuing what 

they are doing or transferring the license in exchange for the offer 

from the auction. 

Mr. DINGELL. Sounds kind of like a bank holdup to me. You hold 

a gun at the teller’s head and say we know that you are going to 

voluntarily give me this money, and if you don’t, I’m going to shoot 

you in the brains. 

Mr. GENACHOWSKI. Only if the free market is a bank holdup. 

Mr. DINGELL. Well, I want you to know I have some dark suspicions on this matter. 

Now, Mr. Chairman, do you believe that a broadcaster who does 

not participate in voluntary incentive action should be forced to relinquish its current channel allocation and spectrum? Yes or no. 

Mr. GENACHOWSKI. Well, the first thing I would say is that 

broadcasting is a very important business in the country and everything we are doing—— 

Mr. DINGELL. No, no, no. Yes or no. 

Mr. GENACHOWSKI [continuing]. Recognizes its importance. That 

is something we are looking at. It is something that actually Congress is looking at because—— 

Mr. DINGELL. Would you please go off, contemplate your navel 

and come back with us an answer yes or no to this question? And 

would the other members of the Commission please do the same 

thing because I am having a hard time understanding this. 

Now, to all commissioners, does the Commission possess the necessary authority with which to engage in voluntary incentive auctions of a spectrum? Yes or no. 

Mr. GENACHOWSKI. We would ask Congress for the authority. 

Mr. DINGELL. I am sorry? 

Mr. GENACHOWSKI. We would ask Congress for the authority. 

Mr. DINGELL. All right. Would each of the commissioners submit 

to me a yes or no on that? 

Mr. WALDEN. And then the gentleman’s time is expired. 

Mr. DINGELL. I sure would like to have an answer to this question. 

Mr. WALDEN. Yes, if the commissioners could go ahead and respond to the chairman emeritus’s question. 

Mr. DINGELL. I do have a few other useful questions that I would 

like to get the answer to. I will be submitting a letter to the Commission and I would ask that the Commission respond, and Mr. 

Chairman, I would ask your courtesy and that of my colleagues on 

97 

the committee in giving me unanimous consent so that both my letter and the response may be inserted into the record. 

Mr. WALDEN. Absolutely, Mr. Chairman, and just for the record, 

Mr. Chairman, the committee is going to have a second round of 

questions here today if other conflicts in your schedule don’t preclude you—— 

Mr. DINGELL. I don’t want you to take my comments as critical 

of you. Thank you. 

Mr. WALDEN. No, we are fine. 

All right. With that, we will—did the other members of the Commission want to answer that question the chairman emeritus asked 

yes or no? 

Mr. COPPS. I think the chairman’s answer, we have asked Congress for that authority is correct. 

Mr. MCDOWELL. I don’t think we have the authority to do the incentive auctions as many proposals have outlined. 

Ms. CLYBURN. Right now, no. 

Ms. BAKER. To do voluntary authority, we need congressional authority. 

Mr. WALDEN. Thank you. 

I am going to go now to Mr. Shimkus for 5 minutes. 

Mr. SHIMKUS. Thank you, Mr. Chairman. It is great to have the 

Commission before us. I appreciate all the time. Many of you have 

come by to talk in the office one on one, and that really is appreciated. I learned a new Latin word, sua sponte. 

Mr. Copps, I think via sua sponte maybe we can address the twomember rule and we will legislate and maybe we can do that. I just 

think it is ridiculous, and if there needs to be someone to lead that 

small change, we might be able to do small things in this Congress 

that don’t get devolved into too much, but that is really silly, and 

you say it every time and many of agree with you, and we don’t 

seem to do anything on it, so let me see if I can take that up as 

a challenge. 

You know, this net neutrality debate, one side says it is going to 

create jobs, the other says no, it is going to hurt jobs, and we are 

focused in this Congress on job creation. The public is confused who 

is right and who is wrong. It is he said, she said. I boil it down 

to the simplest folks in my district who, you know, if they can get 

broadband service—we don’t still have it. High speed, that is mapping and all the other things. But they really do want jobs. You 

know, if we are not going to spend money, we are not going to borrow money in this Congress to try to create jobs, we think that 

failed in the last Congress, plus we are talking about debt and deficit and job creation. 

Mr. WALDEN. This is government control of the microphones. 

Mr. SHIMKUS. Government control. I am on again. So if we are 

going to create jobs without spending money, we have to ease the 

regulatory burden. I don’t know how because that provides more 

certainty. Capital borrowing is lowered when you have more certainty, ease in regulatory burden. The President has agreed to 

that. I think, Mr. Genachowski, you sent out an e-mail asking your 

agency to look at ways where regulatory burden might impinge job 

creation. 

98 

So let me ask Commissioner Baker, had we done a cost-benefit 

analysis, if we would have done a cost-benefit analysis on net neutrality job creation, do you think that would be something we want 

to get an answer to? What do you think we would have come up 

with? 

Ms. BAKER. It is a good question. I think had we done a market 

analysis, certainly every government—every other government that 

has looked at this has come up with the fact that the hypothetical 

problem of net neutrality would be better served—if we are worried 

about on ramps to the Internet, the best way to solve that is to create more on ramps. So aside from the actual authority question, I 

think the policy would come up that the market benefit analysis 

would come out not in favor of this. 

Mr. SHIMKUS. This is just an interesting debate because we even 

heard Chairman Waxman make the statement, and I heard it yesterday in my Environment and Economy hearing, that regulations 

create jobs, and they really believe it, that regulations create jobs. 

I guess he also said—I am not sure. But in a hearing yesterday, 

the EPA also in their statement said we are not going to look at 

job creation, we are not going to look at effects on the economy. So 

that is why we think there should always be at least an analysis 

of cost-benefit analysis, and had this been done prior to promulgation of movement toward net neutrality through the Commission, 

maybe there would be more certainty and their side would be 

pointing out to your analysis and we would be looking at that analysis and saying yes, it is legit or—but nothing. Commission Chairman, do you want to respond? 

Mr. GENACHOWSKI. As I said before, we did do a market analysis, 

and I disagree with my colleague very strongly. I think the pro-job, 

pro-investment outcomes of this balanced framework that we 

adopted very much outweigh the burdens which people either say 

are very small indeed or highly speculative. 

Mr. SHIMKUS. Let me just chime in because I have been on the 

committee for a long time and just like Mr. Markey can talk about 

going back to the breakup of the Bells, I can talk about when the 

cell phone was a mini brick when I got elected and you had to 

change the roaming when you got here to now really voice is really 

the throwaway service. It has been an unregulated environment 

that has moved faster than we can even get there now. And again, 

our concern is, if we are not doing cost-benefit analysis on regulations, the regulations may be important but the public needs to be 

able to make the decision based upon the impact on jobs versus 

benefits received, and that is our frustration. 

Let me ask one more question on this net neutrality debate, and 

it is not to pick on the chairman but recently you are offering applications to kind of spy on—‘‘spy’’ is not a good word but to patrol 

the Internet to see if there is abuse of net neutrality, and prepare 

to fly the winner out here. Do you think that is a good use of taxpayers’ dollars? 

Mr. GENACHOWSKI. Promoting transparency, opening up, giving 

to consumers and early-stage innovators better information about 

how the networks work, I think promoting transparency is a very 

important part of this. 

99 

Mr. WALDEN. The gentleman’s time is expired. I now turn to the 

gentleman from Pennsylvania, Mr. Doyle, for 5 minutes. 

Mr. DOYLE. Thank you, Mr. Chairman. 

Boy, I will tell you, there is probably not two words that have 

been more misused and confused than the words net neutrality, 

and I would venture to say if you asked the 435 Members of Congress what their definition of net neutrality is, you would probably 

get 435 different answers. But let me tell you what it means to me. 

I have four kids. Now, my three boys, they were the first three kids 

we had all went to Penn State, my alma mater, but our youngest, 

who came 7 years after our youngest son, Ali, she is a free spirit 

and she decided to break tradition and go to the University of Dayton, where she is now finishing up her final semester. But one 

thing, you know, Ali growing up with three brothers, it was just 

obvious she was going to be a sports fan and she loves the Pittsburgh Steelers and she loves the Pittsburgh Penguins. Well, one of 

the things she discovered right away when she went to the University of Dayton is that she was being subjected to watching Cincinnati Bengal football and the Columbus Blue Jackets hockey 

team. I felt very badly for her. 

She came home one weekend and she had this little device in her 

hand, and she said ‘‘Dad, we have to hook up this device in the 

house,’’and I said ‘‘what is it,’’ and she said, ‘‘it is called a 

Slingbox.’’ I didn’t know what a Slingbox was so I said, you have 

to be careful, your kids bring things home and you don’t know what 

they are bringing home, and I said, ‘‘Ali, what is it,’’and her eyes 

lit up. She says, ‘‘you are not going to believe this, you hook this 

to your cable and then you hook it to the Internet connection and 

then I can watch Pittsburgh Steelers and Pittsburgh Penguin 

games in Dayton, Ohio.’’ And so we hooked it up and she gets to 

watch Pittsburgh Steelers and Pittsburgh Penguin games in Dayton, Ohio. 

So this is when I decided, this is what open Internet means to 

me. It means that one, my family can use any service on the Internet using any device we choose to use; two, we give innovators the 

ability to create new things for us so that we can use our Internet 

connections and new gadgets for us to use that we never dreamed 

possible; and then three, we provide a cop on the beat to make sure 

that all these promises of an open Internet are kept for us. 

Now, Mr. Chairman, that seems to me to roughly be what the 

FCC order is. Is that right? 

Mr. GENACHOWSKI. Well, in fact, Sling was one application that 

had been blocked and was an issue that gave rise to the concerns 

that led to our order. 

Mr. DOYLE. So it seems to me that the rules that you promulgated, they are aimed to protect me, they are aimed to protect innovation, and I could quote from the companies, and I think we 

have heard them before, AT&T or Wall Street analysts from Bank 

of America, Merrill Lynch, Citi, Wells Fargo, Raymond James, who 

all called the ruling balanced or a light touch and no undue impact 

on carriers. 

I noticed that some of my friends on the other side of the aisle 

and I think also Commissioner Baker spoke to this, that they said 

that they believed the FCC should only issue rules when there is 

100 

a market failure. I have to tell you, I think that is a bad model. 

That is like saying you can only create rules for mortgages when 

housing prices plummet or that you can’t ensure new investors 

aren’t being bilked until millions have lost their nest eggs. 

Mr. Chairman, do you think the FCC should only create rules 

when the Internet ceases to be useful as it is today or only when 

it won’t do the things that our constituents expect it to do? 

Mr. GENACHOWSKI. No, of course not, and we heard from people 

who have been building all the content and services on the Internet 

that given the history, if we didn’t adopt a sensible framework, we 

would see a decline in investment, a decline in new businesses 

starting, a decline in jobs being created. What I am proud of is that 

we were able to find a way to provide certainty and confidence to 

the entrepreneurs and companies building new businesses on the 

Internet and also give certainty and confidence to the infrastructure companies to increase their level of investment. I am proud of 

that. It took a lot of work. 

Mr. DOYLE. Thank you. 

Commissioner Copps and Commissioner McDowell, and these are 

just some quick yes or no answers. One of the biggest areas of controversy in this Open Internet Order is the citation of FCC authority, but rather than debating whether a specific provisions of the 

Communications Act grants FCC direct or indirect authority to regulate broadband providers, which is now going to be up to the 

courts to decide, I want to ask you a few questions about the way 

Congress has approached broadband. 

In the 2008 Farm Bill, Congress directed the FCC to submit a 

comprehensive rural broadband strategy with recommendations for 

the rapid build-out of broadband in rural areas. Are you both familiar with that legislation? 

Mr. COPPS. I was the acting chairman of the Commission at the 

time that helped produce the report. 

Mr. DOYLE. Thank you. In that same year, Congress also passed 

the Broadband Data Improvement Act to improve FCC’s data collection process and promote the deployment of affordable 

broadband services to all parts of the Nation. Have you both heard 

of that bill? 

Mr. COPPS. Yes. 

Mr. MCDOWELL. Yes. 

Mr. DOYLE. And in 2009, Congress passed the Recovery and Reinvestment Act directing the FCC to produce a National Broadband 

Plan with a detailed strategy for achieving affordability of such 

service and maximum utilization of broadband infrastructure and 

service by the public. I know you are both familiar with that legislation. So given the number of laws that Congress has passed on 

broadband that directly involve the FCC, doesn’t it seem logical to 

you that Congress assumed the agency would have the ability and 

the authority to implement and oversee our Nation’s broadband 

policies? 

Mr. WALDEN. The gentleman’s time has expired here. I want 

them to have an answer, but if we have a 5-minute answer, we 

could have issues. 

Mr. COPPS. How about yes? 

Mr. DOYLE. Thank you. 

101 

Mr. MCDOWELL. Congressman, you make a good point, which is 

Congress had a chance during each of those times to pass net neutrality legislation, and it did not. 

Mr. DOYLE. Mr. Chairman? 

Mr. GENACHOWSKI. I would say yes as well. Congress has clearly 

given FCC the authority to look at competition issues involving 

voice and video. It is well accepted that the FCC has authority over 

Internet access providers, so I am quite confident in the legal basis 

of the decision and its constraints on the FCC. 

Mr. DOYLE. Thank you, Mr. Chairman. I would yield back. 

Mr. WALDEN. Ms. Baker? 

Ms. BAKER. Thank you. I have two quick points. 

Mr. WALDEN. Very quickly. 

Ms. BAKER. The first is that the Slingbox, I am a big fan. I was 

one of the first adopters. The problem with Slingbox when it was 

blocked was because it was taking so much capacity on the wireless 

network that we needed to make it more efficient, which is why I 

promote entities like the BTAG, which is a non-governmental 

group of engineers who can work to make more efficient a lot of 

these problems that are coming up much faster than the government process can be. 

And the other point I would like to say is that certainly you gave 

us the broadband plan job to do, which was very important and a 

terrific landmark of our tenure at the FCC. Two hundred of those 

recommendations came forward. Sixty are those are within the 

FCC’s jurisdiction. I think this is something that is going to be 

multi-jurisdictional and we need to all work together. 

Mr. WALDEN. Ms. Clyburn, do you have any quick additions? 

Ms. CLYBURN. My colleagues have amply—— 

Mr. WALDEN. Yes, they have. Thank you. 

The gentlelady from Tennessee is recognized. 

Ms. BLACKBURN. Thank you, Mr. Chairman. Thank you all for 

being here. We indeed have looked forward to this. 

Chairman Genachowski, I want to start with you. We have tried 

to get together and visit on a few things, and I do have a couple 

of questions. Let us go to the Comcast/NBCU merger which I think 

was an overreach of power and a mismanagement of resources and 

it should have been a very simple straightforward vertically integrated merger, and it ended up becoming a forum for groups with 

complaints and grievances and then regulations and conditions and 

open Internet and net neutrality attachments to that merger. So I 

have got about three questions, and of course, you know we need 

to move quickly on this. Is this how you are going to approach 

mergers in the future? 

Mr. GENACHOWSKI. The Comcast/NBCU transaction was one of 

the biggest and most complex that ever came to the agency and we 

handled it in a way that was I think the most professional review 

process. Completing the process at about the time that people 

thought were on the earlier end and making sure that consumers 

and competition were protected. 

Ms. BLACKBURN. OK. Do you expect or is it the goal of the FCC 

as currently configured to legislate policy for every merger that 

comes before the Commission? 

102 

Mr. GENACHOWSKI. We will continue to exercise the responsibilities that Congress gave us under the Communications Act to review mergers and determine that they are in the public interest. 

Ms. BLACKBURN. OK. Do you think that the review should have 

lasted for over a year? 

Mr. GENACHOWSKI. That was what the companies expected when 

they announced their decision. It was on the fast end for transactions of that size. It was done—— 

Ms. BLACKBURN. See, I think it was on the slow end because you 

get in the way of jobs creation. We are all about making certain— 

the interactive technology sector is one of the few sectors creating 

jobs. 

Commissioner McDowell, in light of how long the merger took, 

have we reached the point that we need to initiate a stop clock, put 

that in place to prevent needless dragging on which hampers job 

creation? 

Mr. MCDOWELL. Of course, the FCC has an 180-day shot clock 

but enforcement of that would be helpful. 

Ms. BLACKBURN. Thank you. 

Commissioner Baker, what would you like to have seen done differently in the merger reviews and what would you do differently 

in the future when you look at this merger? 

Ms. BAKER. Well, I think it is clear that we need a comprehensive review but I agree that it can be timely, and our internal shot 

clock of 180 days is a good target and a good time frame that 

should be enforced. I think that the breadth, scope and duration of 

the restrictions placed on the merging companies shows sort of the 

extraordinary leverage that we held over the parties in front of us 

merging. I would like to see the merger conditions have a nexus 

to the actual merger. 

Ms. BLACKBURN. Excellent. Thank you. 

OK. Let us talk about peering and interconnectivity. We know 

that these arrangements have never been regulated, and the FCC 

net neutrality order says that the rules do not cover peering. So 

Mr. Chairman, do you believe the Commission’s new net neutrality 

order and its underlying rules govern the level 3 Comcast dispute? 

Mr. GENACHOWSKI. Well, you said the order says that it doesn’t 

change anything with respect to existing peering arrangements. It 

applies to Internet access service provided to consumers and small 

businesses. You are referring to a dispute that is occurring outside 

the Commission, a commercial dispute. I hope those parties settle 

it and resolve it but it is not something that we have facts and 

data on. I do think the order speaks for itself in the way that you 

suggest. 

Ms. BLACKBURN. All right. Commissioner McDowell, do you believe the FCC has the authority it is claim to govern 

interconnectivity agreements? 

Mr. MCDOWELL. Peering? 

Ms. BLACKBURN. Yes. 

Mr. MCDOWELL. No, ma’am. 

Ms. BLACKBURN. Thank you, sir. I appreciate that. 

Commissioner Clyburn, thank you for coming in and visiting 

with me a few weeks ago. You and I discussed a little bit about 

market failure at that point, and you believe there has been, I beVerDate Nov 24 2008 10:31 Oct 24, 2011 Jkt 037690 PO 00000 Frm 00108 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-8 021611\112-8 CHRIS
103 

lieve there has not been. So why don’t you tell me where you think 

the market failure lies and why the Internet is broken and why we 

need to look at these burdensome regulations? Because I am hearing every single day from innovators that are very concerned about 

the overreach that they see, what this might do and open the door 

for your Commission to regulate everything from set-top boxes to 

privacy to you name it. 

Ms. CLYBURN. There have in fact been formal and informal complaints lodged at the Commission. There have been persons who 

have come to my office, who have called, who have e-mailed, when 

I go to different meetings and public forums, you know, they mention that there are issues, that these issues cause uncertainty in 

the market and cause them to have problems with financing. So 

there are issues. There have been formal complaints and a lot of 

these companies do not have the ability and technical know-how to 

come forward. 

Ms. BLACKBURN. My time is expired. Mr. Chairman, I look forward to the second round. 

Mr. WALDEN. We will now go to the gentlewoman from California, Ms. Matsui, for 5 minutes. 

Ms. MATSUI. Thank you, Mr. Chairman, and I thank the commissioners and chairman for being with us today. I support the FCC’s 

Open Internet Order because it lays a foundation to create market 

certainty that both protects consumers and spurs innovation and 

investment in our economy, and I believe that any attempt to repeal this order should be characterized as stifling innovation and 

discouraging job growth in the technology sectors of our economy. 

Now, I am co-chair of the High Tech Caucus, and one of my priorities is to new innovative sectors like smart grid and health IT 

that offer great economic and job growth opportunities for our Nation. Technology companies are poised to deploy a range of new 

technologies to businesses and residential customers alike to ensure and increase energy efficiency efforts and modernize our 

health care system. 

Mr. Chairman, I believe broadband will play a key role in advancing smart grid technologies and health IT. How does the Open 

Internet Order promote the advancement of these sectors? 

Mr. GENACHOWSKI. Well, I agree that those are very important 

areas for dramatic private investment in the years ahead for the 

United States to build industries that provide real benefits to the 

public and devices and products and applications we can export to 

the rest of the world. What the Open Internet Order does is give 

entrepreneurs, companies thinking about innovating in that space 

the confidence that if they invest the resources and the time to innovate, they will have access to a free and open market, be able 

to reach customers and let consumers and the market pick winners 

and losers and so it is a great opportunity for those segments. 

Ms. MATSUI. OK. Thank you. And I believe one important way 

to move our economy forward is to increase access to affordable 

broadband service to more Americans, and that is why in the coming weeks I plan to reintroduce the Broadband Affordability Act to 

expand the Universal Service Fund lifeline linkup services for universal broadband adoption. 

104 

Mr. Chairman, do you believe your Open Internet Order will further lay a foundation that helps increase broadband adoption rates 

in this country and further bridge our Nation’s digital divide? 

Mr. GENACHOWSKI. I do, because it promotes a virtuous cycle of 

private investment throughout the broadband economy that will accelerate the opportunities and benefits of the Internet for all Americans. 

Ms. MATSUI. Now, I want to follow up on Ranking Member Waxman’s question earlier on market certainty because I believe this 

is an important point. Over the course of this debate, we kept hearing that industry wanted certainty so they could move forward 

with investment and their businesses. Now, it is widely known that 

a number of leading economists and financial institutions have 

stated that on balance, these rules represent a light touch that provides regulatory certainty that broadband providers and our tech 

community need to attract new investments and grow so that my 

sense is that any attempts to repeal in any form would create uncertainty for investors and the market, which puts American innovation investment and growth at risk. So again, what gives here? 

I mean, we need certainty, and this is sort of a light regulation and 

yet we are saying, the other side is saying that this is going to put 

a stranglehold on innovation. So any comments here? 

Mr. GENACHOWSKI. I am concerned about that. For years there 

has been a war in this space between the infrastructure companies 

on one side and the innovation technology companies on the other 

side. What we worked very hard to do over this process is to say 

hey, look, the gap isn’t that large, let us resolve this in a sensible 

way with light-touch rules, move forward because we need all the 

companies in the broadband economy to work together to grow the 

broadband economy and to deal with the global competitive threats 

that we face. I believe we achieved that. I believe that injecting 

new uncertainty into it now will create more harm than good. 

Ms. MATSUI. OK. Any other comments on that? 

Ms. BAKER. All of us would love, we would all love certainty. Unfortunately, I think the only certainty would actually be is if Congress would act to give us authority. I think unfortunately—well, 

I think the courts will turn this around. I think we have a complaint process set up in our rules, that we also have a declaratory 

ruling process set up in our rules. I think all of these leave inroads 

for changes, and I also think we have a 2-year review that is also 

set up to change the rules that exist. So I think that the certainty 

is actually more uncertainty with the rule we adopted. 

Ms. MATSUI. Well, my time is running out but I would just like 

to say that this is a debate that continues to go on, and we understand we must have some regulations. We understand that. And 

we are hopeful that in this case, this light touch will spur innovation which I believe it will. So thank you very much. 

Mr. WALDEN. The gentlelady’s time is now expired, and I will 

turn to the gentleman from Georgia, Mr. Gingrey. 

Dr. GINGREY. Mr. Chairman, thank you, and let me thank the 

chairman and the other four commissioners for being here today. 

I associate myself with Mr. Barton’s comments earlier, the gentleman from Texas, in regard to the level of expertise that you 

bring. 

105 

Obviously we spent a lot of time talking about this, and I would 

say that the members on this side of the aisle feel like this net neutrality ruling, this 3-2 spilt decision, was really unnecessary, a 

hammer in search of a nail, if you will, and our colleagues on the 

other side of the aisle feel like it is very much necessary. In fact, 

my good friend from Pennsylvania talked about the necessity, I 

think he put it as the need for a cop on the beat. I would suggest 

that if there is no history of crime on the beat, is it cost effective 

to put a cop there? In fact, he went on to talk about his daughter 

using the Slingbox. I never heard of the Slingbox but it sounded 

like a heck of a good innovation, and I guess that certainly came 

online at a time before this 3-2 ruling. 

So with that in mind, I am going to ask my first question to the 

chairman. Chairman Genachowski, in the National Broadband 

Plan that was released by the Commission last March, page 5 stated that, and I quote ‘‘The role of government is and should remain 

limited,’’ yet I find the order delivered in the 3-2 vote by the Commission to contradict this very statement. You say in your testimony that the so-called open Internet rules will promote innovation, and maybe you can give me a yes or no answer on this. Has 

there been a lacking of innovation in the absence of government 

regulation over the Internet during the past decade? 

Mr. GENACHOWSKI. As I mentioned, there have been Internet 

protections in place since at least 2005, and so in the space people 

were operating on the assumption that Internet freedom was assured. 

Dr. GINGREY. Well, the question again, yes or no, has there been 

a lack of innovation? 

Mr. GENACHOWSKI. Let me see. There has not been a lack of innovation because there has been—— 

Dr. GINGREY. I will take that as a no. And if there has not been 

a problem with innovation, then why, why is it necessary to promulgate regulations that may well stifle innovation at least according to a December 31, 2010, report from Anna-Marie Kovacs? 

Mr. GENACHOWSKI. What we heard from the innovator community was that in the absence of sensible rules of the road, they 

wouldn’t have the confidence and certainty they need to invest 

their time and resources to raise capital in order to continue to innovate, and they felt very strongly about it. 

Dr. GINGREY. But yet, you know, the innovation that we hear 

about like the example of the Slingbox and other things, I mean, 

you know, this is sort of speculative, it would seem to me, and as 

a result of this order, despite the assurance of your testimony, will 

there not be a subsequent drop-off in innovation due to this unnecessary, as we see it, government regulation? 

Mr. GENACHOWSKI. I think this is a spur to innovation both at 

the edge and in the infrastructure, and I think the statements from 

most of the companies in the space analysts in the space are consistent with that. 

Dr. GINGREY. I don’t see how then you can make that sort of assurance without the proper market analysis which the Commission 

today has admitted did not occur. 

Mr. GENACHOWSKI. With respect, we did do a market analysis in 

our order. 

106 

Dr. GINGREY. Is my time expired? 

Mr. WALDEN. No, but you might want to ask the chairman if it 

is an OIRA standard market analysis as recommended by OMB, 

and if so, if you can make it available. 

Mr. GENACHOWSKI. We will obviously make it available. It is in 

the order, and we will get back to you on whether it is specifically 

OIRA compliant. 

Dr. GINGREY. Mr. Chairman, if I have—— 

Mr. WALDEN. You actually have another minute. 

Dr. GINGREY. Thank you. 

I want to ask Commissioner McDowell, Commissioner, isn’t this 

order full of double-speak? To me, certainly it is. It says to keep 

the Internet free, we need to regulate it. To ensure no one needs 

permission to innovate, everyone will need to ask the FCC for permission to innovate. And it goes on to say to create certainty, as 

few as three commissioners now can decide what types of business 

arrangements and traffic management techniques are reasonable. 

Does that make sense? 

Mr. MCDOWELL. It doesn’t make sense, and I think what we are 

hearing today from the chairman as well as in the order is that innovation only happens at the edge, and he has referred to several 

times about innovators and the technology companies at the edge 

and there is just infrastructure on the other side, the network operators. We want to have innovators everywhere. You have companies like Microsoft and Google as well as Verizon and AT&T who 

have thousands of miles of fiber, have servers and soft switches. 

They offer voice, video and data services of all kinds and all sorts 

of applications, and you don’t want government tilting the scales 

while putting its thumb on the scale to try to distort that market. 

You want innovation at all layers, all levels of that environment. 

Mr. WALDEN. The gentleman’s time has expired. I will recognize 

the gentleman from New Jersey, Mr. Pallone, for 5 minutes. 

Mr. PALLONE. Thank you, Chairman Walden. I do want to say I 

am pleased to see the FCC commissioners here today, and I want 

to touch on two topics with Chairman Genachowski, and again, I 

have to apologize because I know that some of this is repetitive. I 

will try not to be. 

The first is the follow-up to a letter I wrote to you last spring 

regarding the Title II framework you initially laid out regarding 

the Internet principles, and I wanted to reiterate my concerns regarding agency action. I was the chairman of the Subcommittee on 

Health, and I am still the ranking member, and in that capacity, 

I am increasingly sensitive about the tendency of government agencies and in particular independent agencies to arrogate to themselves policymaking authority that is properly exercised solely by 

Congress, in my opinion. Now, while questions involving an agency 

exceeding the authority granted to it by Congress are decided in 

the courts, I think an agency ought to be mindful of the limits on 

its authority. So far, two companies have questioned your authority 

and brought suit against you. Can you tell me—this is sort of repetitive, so I wanted to ask if you could tell me why you believe 

the agency has legal authority to implement network neutrality 

rules or provisions of the National Broadband Plan in the order 

being examined today? But let me say specifically, because you 

107 

have gone into this, where you believe you have the authority, 

what would you cite, and why you think you are going to win in 

the court. I will say it that way. 

Mr. GENACHOWSKI. I am glad you asked the question because it 

allows me to try to clear up one issue. There were many Members 

of Congress who in the course of our proceeding urged us not to 

rely on Title II as a basis for any decision in the area, and after 

a lot of discussion and input, we listened to that, we heard that, 

and in fact we didn’t rely on Title II in adopting a final decision, 

and instead we adopted a framework that is consistent with the 

framework that historically has had consensus in this space, the 

light-touch Title I framework tied to specific provisions in the Communications Act like those instructing us to promote competition. 

And so I do remember getting your letter and it was something 

that we paid careful attention to and that we believe we responded 

directly to in how we ultimately ruled in this matter. 

Mr. PALLONE. And why do you think you are going to win? 

Mr. GENACHOWSKI. Well, we think we are going to win because 

we think that the theory we have laid out is very consistent with 

Supreme Court precedent in this area, and it is consistent with the 

D.C. Circuit decision. The D.C. Circuit was asked to rule that the 

FCC had no authority at all with respect to broadband, and it 

didn’t do that. It set a standard that the FCC has to reach in order 

to adopt sensible rules in this area, and we believe we met that 

standard. It is in litigation now. Almost everything that the FCC 

does ends up in litigation. There are some areas in which the D.C. 

Circuit is in tension with the Supreme Court but we believe we 

meet the standard of the D.C. Circuit case and we are certain that 

we meet the standards set out by the Supreme Court in this area 

and that we are operating well within our authority under the 

Communications Act. 

Mr. PALLONE. All right. Let me get to my second issue. This was 

an issue I raised last summer, or I should say last May. Congress 

learned that Google had gained access to personal WiFi and collected information about consumers’ Internet activities and at the 

time I called on the FCC and the FTC to investigate out of concern 

for consumers’ privacy. Now, the FTC investigation was dropped in 

October without providing sufficient answers, in my opinion, to 

how the privacy breach was allowed to take place and who was affected, but I understand that the FCC is also investigating. So 

could you comment on any progress with that investigation, whether the FCC is examining the data for itself, what steps are being 

taken to avoid situations like this in the future in today’s technology age? 

Mr. GENACHOWSKI. I can’t comment on an open investigation but 

I will say that we certainly heard you in that letter, and any uses 

of spectrum or technologies that are within the FCC’s purview that 

violate the privacy statute and the FCC’s privacy rules are actions 

that we would take very seriously. 

Mr. PALLONE. OK. As far as you can go, in other words. All right. 

Thank you. 

I yield back, Mr. Chairman. Thank you. 

Mr. WALDEN. I thank the gentleman for yielding back. I now go 

to the gentleman from Louisiana, Mr. Scalise, for 5 minutes. 

108 

Mr. SCALISE. Thank you, Mr. Chairman. I appreciate you hosting 

this hearing. I appreciate all of the FCC commissioners coming to 

talk about this important issue of net neutrality and its impact especially on the economy and our ability to continue to encourage 

the innovation and the job creation that I think has been one of 

the hallmarks of the Internet. I would actually agree with the commissioner back in 1999, Commissioner Kennard, who had talked 

about the innovations and also encouraged against the dangers of 

regulating the Internet, and this was President Clinton’s FCC commissioner that talked about the dangers of regulating the Internet, 

especially in ways that it would stifle innovation. When I look at 

what has been happening in the industry, I think one of the few 

real positive signs in a struggling economy that we have today has 

been the technology sector, especially the companies that do operate and innovate using the Internet and its capabilities to allow 

commerce, to allow connectivity of people, of ideas. They are even 

talking about what is happening in Egypt being something that 

really in many ways came out of Facebook, and of course, these 

great innovations happened without net neutrality. These great innovations happened because there was a certainty and an ability 

for industry to go out there and invest, as I think it was Commissioner Baker who pointed out over $500 billion of private investment—this isn’t Federal Government with stimulus but private investment coming out over the last 10 years of the private sector to 

encourage this innovation. This was again without net neutrality, 

without the big hand of the Federal Government or the big hammer, as you might want to call it. 

And so you can see why there is a big concern by many of us 

about this imposition of net neutrality, and this is not just a Republican issue. I know some on the other side have kind of inferred 

that this is the way it should be. I was a little bit surprised to hear 

the three Democrat commissioners saying that they don’t think 

that this Congress should pass a resolution of disapproval because 

when I go back to the Constitution, which is of course our overarching document that lays out the structure, it is article 1, section 

1 that talks about the legislative branch deciding policy, with all 

due respect, not the FCC, not the EPA, not all of these bureaucratic agencies that seem to think that their will is better than 

those of us who were actually elected by the people. 

And so with that, I want to at least try to get into this a little 

bit more, and Chairman Genachowski, starting with you. When we 

look at the private sector innovation that has come with the ability 

to innovate and then of course the business models that are built 

around the things that encourage private investment, do you have 

any concern that by changing the rules, by imposing net neutrality 

and in some cases opening the door for retroactive changes, that 

you are going to discourage that kind of innovation and investment? 

Mr. GENACHOWSKI. Well, I actually agree with what Commissioner McDowell said a few minutes ago about the importance of 

the investment and innovation throughout the broadband economy, 

both early stage and technology companies and also our infrastructure companies, wireless and wired. It is a full broadband economy 

where innovation and investment in any part of it fuels investment 

109 

throughout. We paid very careful attention to this as we worked on 

this item, and I believe this will be a spur to investment and innovation throughout the broadband economy and overwhelmingly the 

analysts who looked at what we did characterized it that way, as 

a light-touch action that increases certainty and will unleash investment. 

Mr. SCALISE. And I guess we will disagree about whether it is 

a light touch and whether it increases certainty versus what many 

of us think that it actually decreases certainty. 

I will ask Commissioner Baker, because you did make those com- ments about the $500 billion of private investment, if you can just 

answer that same question and what effects it would have on future investments. 

Ms. BAKER. So I think it is important what has brought us here 

but I also think what it is important to take us to the new generation, so updating the networks by 2015, the number is going to be 

$182 billion. I think the network providers are going to have to 

have a return on that investment. It is a very tight capital market. 

I think things like network management, prioritization, specialized 

services have been turned into bad words as opposed to engineering 

marvels, and I think that we need to allow—I think the term is 

called wealth transfer and so what we are doing is taking away 

revenue streams from the providers how are building these networks. They need to have as much incentive as possible to have a 

return on their investment, which will then in turn allow all of the 

edge applications to innovate and continue this terrific ecosystem. 

Mr. SCALISE. And we heard some concerns in a previous hearing 

last week about that in relation to the stimulus bill where the federal government was using taxpayer money to in essence other 

companies to compete against private companies who already made 

an investment of billions of dollars, hiring thousands of people, creating good jobs that now will not have that same ability to make 

those investments in the future. 

So again, we have seen those regulations killing jobs and that is 

a big concern. I know we will get into more of it in the second 

round. I appreciate it, and I yield back. 

Mr. WALDEN. The gentleman’s time is expired. The Chair now 

recognizes the gentleman from Illinois, Mr. Rush, for 5 minutes. 

Mr. RUSH. Thank you, Mr. Chairman, and I want to welcome the 

commissioners here again. I want to begin by saying I agree with 

you, Chairman Genachowski. I think in essence you said, your 

statement was that regulations don’t create incentives, they create 

certainty, and certainty is a catalyst for investment and innovation, 

and I certainly concur with those sentiments. When the FCC decided to issue a balanced set of open Internet rules, I for one urged 

industry not to challenge these rules in court. These rules largely 

track an agreement that this committee helped to negotiate among 

parties on all sides of the issue. Now that some of these companies 

have decided to take the court route, the question of the FCC’s authority to adopt rules affecting broadband service providers will unfortunately be left in the hands of the federal appellate court, and 

to me, I would have liked to avoid that. And I would sincerely hope 

that after today that we in Congress will move on and move ahead 

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lems including our looming spectrum crunch and financing the 

build-out of and national interoperable public safety network, reforming universal service and designing all auctions and licensing 

opportunities to ensure that minority and small businesses have 

just as good a chance as the large fat cats, the large corporations, 

the big boys to become real participants and players in the communications and technology sector. 

As you know, Mr. Chairman, Chairman Genachowski, the President recently announced that he supports reallocation of the 700 

megahertz D block to public safety. Further, both Senator Rockefeller and Representative King have reintroduced bills this year 

that will reallocate the D block to public safety. Last year, you testified in front of this subcommittee that you believe the plan to 

auction the D block recommended by the National Broadband Plan 

provides the best strategy going forward. 

Now, I want to ask each one of you, and I only have a few more 

minutes, so if you would quickly answer this question with a yes 

or no answer. Do you still support the recommendations auctioning 

the D block as laid out by the National Broadband Plan? 

Mr. GENACHOWSKI. Yes, and we need to get a mobile broadband 

public safety network built and funded. 

Mr. RUSH. Commissioner Copps? 

Mr. COPPS. Well, I think that is a viable proposal. I think we also 

need to hear from Congress. The central question to me is which 

of the options out there are going to provide money to actually 

build this infrastructure, and we need to identify where that is, 

and I think that will be the route to go. 

Mr. MCDOWELL. I think this issue is more one of public safety 

needing more money rather than more spectrum. I would like to 

see the D block auctioned off cleanly but we need Congress’s help 

to fund that build-out. 

Ms. CLYBURN. I look forward to a Congressional engagement. At 

the bottom of this, at the core of all this is, we need the pathway 

for a truly interoperable public safety network. I think that is what 

we all want, and the best way to get that. I look forward to engagement from you. 

Ms. BAKER. I think I agree with all my fellow commissioners and 

chairman. Last year we testified that an auction was a terrific way 

forward. It seems to me that some other ideas have surfaced from 

other places, and I think if we are going to look at reallocation too 

as a viable alternative, I think the important is to get the public 

safety interoperability network built as soon as possible and we 

will look to you as to how to do that best. 

Mr. RUSH. My next question, when FCC auctioned 52 megahertz 

of spectrum in 2008, one of your predecessors, Chairman 

Genachowski, said it is also appalling that women and minorities 

were virtually shut out of this auction with women-owned bidders 

winning no licenses and minority-owned businesses winning less 

than 1 percent. We clearly failed to meet our statutory obligations 

in 309(j) to expand diversity and the provision of special base services. In 2008, we raised about $20 million for the U.S. Treasury. 

Much of that spectrum has been now deployed to make 4G services 

a reality, giving subscribers faster broadband speeds, supporting 

more and more apps and more and more video. Many critics of the 

111 

auction contend, however, that the FCC’s auction design did not do 

enough to allow women, minority and rural phone companies to 

women any of the spectrum licenses. If you decide to auction the 

D block, what design improvements can FCC make to ensure that 

these types of bidders are more successful this time around? 

Mr. GENACHOWSKI. Well, you raise an important issue, and we 

would look at all possibilities to address those issues in any auction 

design that we take up our next auction design, and in connection 

with the topic of the day, I will say that one of the challenges in 

that area is the amount of capital that is required to build and 

launch a wireless business is very high and it is what makes the 

issue difficult. On the online area, the capital requirements to start 

a business are much lower and so the new opportunities for new 

entrants, diverse entrants on the Internet is something that I think 

is a promising opportunity. 

Mr. WALDEN. The gentleman’s time has expired. Now I would 

like to go the gentleman from Ohio, Mr. Latta, for 5 minutes. 

Mr. LATTA. Well, thank you, Mr. Chairman. I appreciate the opportunity. I want to also thank all of you for being here with us 

today. It is very, very enlightening, and what I would like to kind 

of do is maybe just kind of start off with, I really believe that we 

have got to keep government out as much as we possibly can because if we want to see an invasion of growth, it is not going to 

happen. 

One of the things, Mr. Chairman, I would like to submit for the 

record is a letter from a company doing business in my district 

from Amplex Internet, if I could ask unanimous consent that that 

be included in the record. 

Mr. WALDEN. Without objection. 

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

Mr. LATTA. I appreciate that, Mr. Chairman. 

And one of the things that—and just real quickly about this company. It is in a village in my district and they have 2,100 household and businesses they supply service to and they employ eight 

people and they have added three new employees in the last year, 

which is how we grow things in America, small businesses and 

they grow large. 

But in his letter, it is interesting because he states a couple of 

things that I think that he might have been in your own meeting 

rooms because this letter is dated December 15th of last year, and 

he says in the letter, ‘‘The Internet has grown incredibly rapidly 

without significant government regulation and continues to do so. 

There is no pressing reason for the government to act at this time.’’ 

He goes on to say, ‘‘In the limited number of cases to date involving 

questionable behavior, the existing consumer protection laws have 

been sufficient to address the issue,’’ and I find that interesting because a lot of times I think we—I would like to ask this question. 

You know, we have been kind of talking at the 30,000-foot level 

here today. What we need to do is talk to the people back home 

on main Street. These are the folks that have got to do this. 

And starting with Commissioner McDowell, I think that he must 

have been in your computer because when I am looking at your 

statement, you said it on December 21, 2010. You state on page 6, 

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112 

ken in the Internet access market that needs fixing, and existing 

law and Internet governance structure provide ample consumer 

protection in the event a systematic market failure occurs.’’ Those 

two letters are just 6 days off but this is somebody from Main 

Street, again, somebody that is out there trying to live with this. 

And I guess I would like to read something that Commissioner 

Baker, you have written in your testimony, saying again that—you 

are pretty much saying that our surveys revealed that 93 percent 

of subscribers are happy with their broadband service, and you go 

into that we need broadband competition, we need private capital 

and that the Internet is open without the need of affirmative government regulation. 

So I guess if I could just start with Commissioner McDowell, 

what do I tell the folks back home? How do I explain what we do 

here in Washington that affects them right off the bat? Again, we 

are looking at—you know, we do things at 30,000 feet but we are 

talking about people right at ground level, ground zero. 

Mr. MCDOWELL. Well, I think you have touched on an important 

point which is that we have had wonderful innovation at the edge. 

The Twitters, the Facebooks, the eBays, the Amazons have all developed under the current environment, that there is no systemic 

market failure, that nothing is broken, and when you look around 

the globe it is not private sector mischief with the Internet that is 

the problem, it is state control of the Internet, and that is the concern here. 

But also I would like to sort of take issue with the notion that 

has been aired several times, that the December 21st order was 

somehow some active consensus because Comcast and AT&T and 

NCTA, Comcast Trade Association signed onto it. Comcast was 

very vulnerable, had a large merger before the Commission at that 

time. AT&T, it ended up was being on Qualcom 700 megahertz 

spectrum and was going to need FCC approval of that. And of 

course, those two entities are going to want to comply as best as 

possible. When you read their statements, they aren’t ringing endorsements, and as we have seen debate over this peering issue as 

to whether or not the FCC is going to claim jurisdiction to regulate 

peering, NCTA and AT&T have submitted a joint letter to the 

Commission expressing grave doubts and feeling there is a bit of 

a bait and switch here. 

So, you know, there is not great consensus here, and Wall Street 

analysts aren’t part of that as well. Back in October, October 1, 

2009, we convened a workshop at the FCC on investment and 

broadband, and back when Title I was being discussed and not just 

Title II, and we had analyst after analyst and investor after investor of various stripes and sizes cautioning us against net neutrality 

regulation. Then Title II, the specter of Title II was aired last year 

in the middle of the year. I think what you saw from Wall Street 

in December was more of a sign of relief that it was not an overt 

or an explicit Title II reclassification. In reality, what it is, it is 

Title II with a Title I disguise, as I have said in my dissent. So 

that sign of relief doesn’t necessarily equate to Wall Street’s endorsement of what the FCC did. 

Mr. WALDEN. The gentleman’s time is expired. 

Mr. LATTA. I thank you, and yield back. 

113 

Mr. WALDEN. The chair now recognizes the gentlewoman from 

California, Ms. Harman, for 5 minutes. 

Ms. HARMAN. Thank you, Mr. Chairman, and thank you to the 

subcommittee for years of friendship and partnership. I will miss 

this subcommittee very much and had been looking forward to my 

return here. I will also miss this Commission very much. Rob 

McDowell, thank you for your comments. Others of you, thank you 

for your notes, some of them quite blunt and humorous, which I 

shall treasure. But I want you to know that the set of issues that 

we are addressing this morning are a centerpiece for what will or 

won’t keep our country safe, innovative and free—I do like that 

word—in the future. 

And so let me just turn to my top priority for this subcommittee 

and the Commission, and I have decided that since you all want 

to give me a parting gift, you will act on my top priority, which Michael Copps said he wanted to act on this year, that is, to build 

out in some efficient way a national interoperable communications 

network for first responders, and oh, by the way, while you are at 

it, I hope you will also consider some brilliant legislation that Mr. 

Shimkus and I introduced last year and that I hope he will take 

the lead on reintroducing this year called the Next Generation Public Safety Device Act, the point of which is to create a real competition for devices to use in this emergency space that will provide the 

users with much better performance at a much more competitive 

price. 

So having said that, I would like to ask the commissioners each 

of you whether you are ready to give me these wonderful and important national gifts as I depart the Congress. 

Mr. GENACHOWSKI. Well, we are—if I may, we really are going 

to miss your leadership on this committee and in Congress, particularly on these issues. Getting a mobile broadband public safety 

network built, it should be one of the country’s top priorities. Now, 

it will require funding to build it and so we are ready as a Commission, I think this is true of all of us, to work on a bipartisan basis 

with everyone to support whatever legislation is necessary to move 

forward. We have begun to move forward on the interoperability 

piece. We want to be ready. But you are absolutely right that this 

is a major challenge for the country. 

Ms. HARMAN. Well, let me just add, Mr. Chairman, that I tend 

to favor the auction concept because I think it will generate funding and it will also push innovation. I think that the private sector 

has marvelous ideas to offer the public safety sector. 

Mr. GENACHOWSKI. I would just say, there are several different 

ideas that are now in circulation, in debate. They should be discussed, resolved quickly—— 

Ms. HARMAN. Hear, hear. 

Mr. GENACHOWSKI [continuing]. So we can focus on what gets a 

mobile broadband public safety built quickly. 

Ms. HARMAN. Mr. Copps? 

Mr. COPPS. Well, first of all, thank you very much for the opportunity to respond. Your leadership on this—you and I go back a 

long way in fighting for this issue, and I think maybe the time is 

nigh when we are actually going to get something done. I just 

sense that there is a willingness to move ahead. We have to be 

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practical and pragmatic how we do that, but I think this is the 

year in a bipartisan because it is not a bipartisan issue to get done. 

As my old boss, Senator Fritz Hollings, reminded me many, many 

times, the safety of the people is always the first obligation of the 

public servant, and you have certainly met that obligation often 

and well, and I certainly will miss your leadership on this and a 

whole range of other issues but certainly look forward to the great 

work you will do at the Wilson Center and to continuing our friendship after you leave these hallowed halls. 

Ms. HARMAN. Thank you so much. 

Mr. McDowell? 

Mr. MCDOWELL. I think an auction is the best way to raise the 

maximum amount of revenue for the Treasury to help fund this. In 

the meantime, the FCC has granted waivers to 20 jurisdiction so 

the L.A. area, the D.C. area, for instance, are covered in that regard but great swaths of the country are not. 

Ms. HARMAN. Well, let me just, If I might, on those waivers, 

while I favor that and thank you very much, I worry that we may 

be building regional interoperable networks that will not be interoperable nationally and so it is critical, I think, to have some common rules of the road and also to focus on the devices that are used 

in these regions. 

Mr. GENACHOWSKI. And if I may, we share that concern and it 

is why we are working together on interoperability and why we are 

moving in that proceeding to make sure that we don’t end up with 

that problem. 

Ms. HARMAN. Thank you. 

Mr. Chairman, can the last two witnesses answer my question? 

Mr. WALDEN. Absolutely, yes. Of course. 

Ms. CLYBURN. Again, thank you for your service and I look forward to more and better to come in your new capacity. 

I too, you know, being from a State that is very vulnerable from 

a weather perspective, I too think that this is way overdue, long 

time coming. While I know you have some concerns about those 

waivers, those waivers give us a better pathway forward. They let 

us know in very small, relatively small footprint some of the challenges that will lie ahead. So that type of flexibility does have its 

advantages and I am looking forward to a better and more robust 

interoperable system. 

Ms. BAKER. I agree with all my colleagues about the comments 

on your leadership and your advocacy, and I very much hope that 

your legacy is that we will get this done in the window of opportunity that we have right now while 4G networks are being built 

out, so thank you. 

Ms. HARMAN. Thank you very much. I yield back, Mr. Chairman, 

but I will look forward to this giant gift of a national interoperable 

network and a competitive system to develop devices all wrapped 

up with a bow by December 2011. Would that be all right with 

you? 

Mr. WALDEN. As long as you stay here on the committee. I appreciate your service on the committee, Ms. Harman, and your service 

on the Intelligence Committee too. You have been a real leader and 

we will miss you. 

115 

Ms. ESHOO. If I might, I hope it will be by the anniversary and 

not December but by September 2011. 

Mr. WALDEN. We will have some further discussion about D 

block and broadband plans and money and the access and where 

we go from there before this committee at some point in the not 

too distant future but we are going to try and stay on net neutrality today for the most part. 

Mr. Kinzinger, we recognize you now for 5 minutes. 

Mr. KINZINGER. Thank you, Mr. Chairman, and thanks for coming out to see us and all the patience you are having to put in. I 

know it is not always overly enjoyable to sit there for 21⁄2 hours or 

more and answer questions. Some of them are the same. 

Let me just ask a few, kind of express a few concerns I have, ask 

a couple of questions and then we will move because I don’t want 

to rehash a lot of the old stuff. But let me just say, in 2003 I think 

it was 15 percent of Americans had access to broadband technology. 

As of 2010, it is 95 percent. So as I look over the stretch of just 

7 years, I see an extreme flourishing of what we see in technology 

today in just one decade. I mean, when you even look through history, you are going to see that this—I mean, this is a relatively 

short period of time. I am glad—you know, I often wonder if I could 

go back 15 years or 10 years or whatever to the FCC commissioners and ask them what do you foresee as challenges and how 

can you respond to that right now because of these potential challenges that are coming. I actually fear what they might come up 

with as solutions for what they could potentially see as a challenge 

that doesn’t fully exist yet. 

That is what I see when I look at the net neutrality issue is, OK, 

well, we see potentially what could happen so let us preemptively 

pass this law without really not passing a law because Congress 

isn’t even approving of this, and it is that. I mean, look, I am a 

pilot. That was my job before this. I still love flying airplanes. I 

love the idea that some day we may have flying cars. I think that 

would be great. We could get around all this traffic. But I don’t 

think it is appropriate for the transportation department to now 

take a look at when we have flying cars and go ahead and implement rules for when that is going to happen. That is a concern I 

have. 

And, you know, beyond the issue, beyond the merits of the issue 

and all that, where we have a lot of heartburn and where again 

a supermajority of Congressmen in the last Congress, the 111th, 

not even this one, which significantly looks different now, but when 

a supermajority basically stand up and say we don’t want this or 

we have concerns about this, where I think the heartburn is not 

so much in the rule, we can talk about the rule, you know, I disagree and all that, but is the fact that three of the five commissioners felt that you had the authority to go around Congress implementing this rule, knowing very well if you think it exists on its 

merits, there can be an effort to talk to all of us about the importance of net neutrality and we will be sold on these great merits 

and we may pass it out of the House of Representatives and you 

can do whatever you want, but that didn’t happen. In fact, I have 

heard from a few concerned that well, we think it is going to hold 

up in court. OK. You ought to be real sure. ‘‘We are pretty sure we 

116 

have the authority to do this.’’ You ought to be real sure you have 

the authority, and if you don’t have the authority to do it or you 

are even questioning whether you have the authority, why not 

come to the people’s house and ask for it? If it can stand on it merits, we will give it to you. So that is my thoughts. 

Let me ask, and this will be basically my final question so I may 

give you all mercy and not to have to stay here the whole 5 minutes of my questioning. But as I look through these concerns, and 

right now on the Floor of the House of Representatives and for a 

few weeks going forward we are going to talk about—actually a few 

years going forward we are going to talk about budget issues. We 

are going to talk about how much money this government spent 

that it doesn’t have. You are seeing amendments talking about 

where we can’t spend money and all this. That is a very big concern. 

My question is, how much money—and, Chairman, I will ask you 

this. You may not have the number. I would love to get it if you 

do eventually. How much money has this already broke government spent in the Comcast v. FCC case and how much do you see 

that you will potentially spend in defending the Verizon appeal? I 

will just ask that, if you have a number of how much money that 

the government spent that we don’t have in defending something 

that frankly has been implemented without the authority of Congress. 

Mr. GENACHOWSKI. I don’t have a number but we will work on 

answering your question, and to your larger point, which I completely respect, we continue to be available as a resource to work 

with Congress on legislation that would provide certainty and address issues around broadband, and so that is our job and we look 

forward to being a resource to Congress. 

Mr. KINZINGER. And I hope as new issues come up and new concerns you have, if you are questioning whether or not you really 

do have the explicit authority that you would take that route, and 

I think all of us on this subcommittee would be happy to work with 

you in discussing the pros and cons. 

So at that, I will yield back and I thank you for your time. 

Mr. WALDEN. The gentleman yields back his time. We go now to 

Mr. Towns for 5 minutes. 

Mr. TOWNS. Thank you very much, Mr. Chairman and the ranking member, for holding this hearing. 

Also, let me say to my colleague, Ms. Harman, we are definitely 

going to miss her, and I have taken this sort of somewhat personal 

because I returned to the committee and you leave the committee, 

but we will miss you, and it has been great working with you over 

the years. 

Let me say first of all, Commissioner Genachowski, I heard your 

opening statement and you mentioned jobs, and I think that one 

thing today more than anything else is that we need to focus on 

jobs. I mean, people are unemployed. Many of them attended the 

most prestigious universities in this country but now have no jobs. 

So let me ask you, how can we bridge the digital divide and encourage greater access to technology in economically disadvantaged 

areas where it is lacking? With the speed in which technology is 

developing, what action has the agency taken or planned to take 

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in the future to make sure those left behind by our economy are 

part of this innovation generation? 

Mr. GENACHOWSKI. This is a very significant issue. There are 24 

million Americans who don’t have any broadband infrastructure at 

all and then there are hundred million Americans, about 33 percent of the population, who haven’t adopted broadband and the 

number of Americans who don’t have basic digital tools and skills 

and literacy to participate in a digital economy is way too high. 

There is no silver bullet to solve this. We are working on a series 

of initiatives, some together with other agencies, some looking at 

our programs that have addressed similar issues in the telephone 

era. It is an area where I think there is great opportunity for public-private partnerships because every new subscriber benefits 

these broadband goals and also benefits the infrastructure companies that are signing people up, so I acknowledge the importance 

of this issue and look forward to working with you on it. 

Mr. TOWNS. Thank you very much, because when we leave people 

behind, it does not make us more competitive. 

Commissioner Copps? 

Mr. COPPS. Thank you very much for your question. You know, 

there was a time, historically speaking, when one-third of the Nation was ill-housed and ill-clad and ill-nourished when Franklin D. 

Roosevelt was President of the United States and we all were very 

concerned about that. Now we have a situation where one-third of 

the country are not having access or to being able to take advantage of access to this liberating technology. That should certainly 

put this whole problem at the top of our list or close to the top of 

our list of national priorities and making sure it goes to every 

American no matter who they are, where they live, the particular 

circumstances of their individual lives, white or black, rich or poor, 

city or country. That has got to be the policy. That the universal 

service policy we need to design. 

Mr. TOWNS. Thank you very much. 

Mr. McDowell, Commissioner McDowell? 

Mr. MCDOWELL. Yes, sir. Actually in our work since the chairmanship of Michael Powell on the unlicensed use of the television 

white space is one area where this can be particularly helpful, and 

Chairman Genachowski deserves great credit for continuing to 

move that ball down the field. But unlicensed use of this fabulous 

spectrum will really speed deployment and make things more affordable. Also, it will help, a release valve should there ever be sort 

of anticompetitive behavior in the last mile, and this is an antidote 

to the concerns that net neutrality proponents have. 

But as with WiFi, nobody had heard of WiFi on Friday but Monday it was everywhere practically. So I think with white spaces, 

that is going to help tremendously for affordability, access and 

adoption. 

Mr. TOWNS. Is there anything here we need to do on this side 

of the aisle, as Members of Congress to help move this forward? 

Mr. MCDOWELL. White spaces in particular? 

Mr. TOWNS. Yes. 

Mr. MCDOWELL. Well, I think we are good on that as long as we 

can move forward. I think the spectrum reallocation legislation is 

causing some concern. I was just telling Congresswoman Eshoo, I 

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was just in Silicon Valley in her district a few weeks ago and until 

we know whether or not the incentive auction legislation is going 

to pass and become law, chip makers and software designers are 

withholding their work until they can know how to innovate and 

how the spectrum is actually going to be used. So the sooner Congress can have resolution one way or the other on the incentive 

auction idea, I think that would be fabulously helpful. 

Mr. TOWNS. Commissioner Clyburn? 

Ms. CLYBURN. Thank you, Congressman. I think about this. I 

wrote down three things that came to mind: affordability, availability and education. You touched on those. One thing that was 

great about the National Broadband Plan is that it has forced us 

to concentrate on those challenges, the challenge of that 5 percent 

was mentioned that is not served right now, the challenge of literacy issues which translate into digital literacy issues that you 

asked how possibly Congress could help. When things get better— 

I know things are a little tight budgetarily now—we put forward— 

well, the National Broadband Plan talked about a digital literacy 

core. That is something that these digital navigators could come in 

these communities to help educate and augment the experiences of 

people. Availability and affordability—I know time is short. Those 

go hand and hand, and there are a number of things happening. 

We talked about a major transaction that just took place. There are 

a couple of things that are being offered that I hope are replicated: 

affordable, under $10 a month, high-speed Internet access. That is 

coming, that is possible, can be replicated. Support for equipment, 

which is another barrier to entry, that is an important barrier to 

entry, affordability from that perspective. That is coming. That can 

be replicated. And availability in terms of the infrastructure, the 

things that we could put forward to encourage infrastructure development, that is here now and we look forward to working more 

with you to encourage that to continue. 

Mr. TOWNS. I know my time is expired, but being I am new to 

the committee, can Ms. Baker answer as well? 

Mr. WALDEN. We will go ahead and do that. 

Ms. BAKER. I agree with everything that my fellow commissioners have said. We have done relatively well in deployment. We 

want faster, broader, bigger, better networks to be built but some 

of the focus we really need to do is on adoption. The only thing I 

would add is that we figured how to reach consumers for the first 

time during the digital television transition, and I think if we could 

revisit some of those public-private partnerships to focus since it is 

not a one-size-fits-all problem that we can really use those partnerships to focus on bringing more people to the Internet as it becomes 

very much critical infrastructure. 

Mr. TOWNS. Thank you, Mr. Chairman, for your generosity. 

Mr. WALDEN. You are welcome, Mr. Towns. 

Now we go to Mr. Rogers from Michigan for 5 minutes. 

Mr. ROGERS. Thank you, Mr. Chairman. Good morning, and 

thank you for your time today. 

Mr. Chairman, we all know that the Internet regulation in your 

order regulates Internet service providers, but how does this impact content providers from discriminatory actions? 

119 

Mr. GENACHOWSKI. Are you asking about intellectual property 

issues? 

Mr. ROGERS. Well, companies like Google and Skype and other 

companies are not impacted by your order. I am just curious if you 

believe that the ISPs are conducting some discriminatory action, 

which you claim they are not. Is that correct? 

Mr. GENACHOWSKI. There have been instances of discriminatory 

conduct. 

Mr. ROGERS. OK. So how do you prevent in this order discriminatory conduct for content providers? 

Mr. GENACHOWSKI. Historically, this issue, the open Internet protections that have been in place since 2005 have been focused on 

the Internet service providers, and that is good reason. That is fundamentally where the Communications Act points us to companies 

that—— 

Mr. ROGERS. I understand, but this particular order does not impact content providers. 

Mr. GENACHOWSKI. Correct. 

Mr. ROGERS. Yes? That is correct? 

Mr. GENACHOWSKI. Yes. 

Mr. ROGERS. In your December 21st press release, you describe, 

and I quote, ‘‘The Internet has thrived because of its freedom and 

openness, the absence of any gatekeeper blocking lawful uses of the 

network or picking winners and losers online.’’ But I am curious. 

When I read the order, aren’t you merely making the government 

the gatekeeper in this particular case? 

Mr. GENACHOWSKI. Not at all. With respect, I don’t think that is 

what we are doing. We are simply saying that certain conduct by 

the companies that do control access to the Internet aren’t consistent with Internet freedom and shouldn’t be permitted, and companies have—— 

Mr. ROGERS. Which means you are the gatekeeper because you 

are the sole determinant of that. 

Mr. McDowell, you wrote a dissenting opinion that basically, I 

don’t think you used the word ‘‘gatekeeper’’ but can you help me 

understand? I clearly believe the government is going to make 

those decisions about who is and who is not on access. 

Mr. MCDOWELL. It all boils down to the word ‘‘reasonable’’ and 

how three FCC commissioners will define that term on a case-bycase basis. So when we talk about price tiering, for instance, there 

are some advocacy groups who have pushed for net neutrality rules 

who are worried about price tiering as somehow being discriminatory, and it is discriminatory but not in a bad sense. What this actually does, it allows low-income users, for instance, to have a price 

they can afford for, let us say, wireless services provided by Metro 

PCS. But is that reasonable? That is going to be determined by 

three FCC commissioners. 

Mr. ROGERS. It certainly opens the standard. They were talking 

about applications and the next generation of Facebook, but just 

because nobody wants to buy my particular product or app, I find 

it unreasonable that I don’t have some unusual access to the Internet. Could I bring a case like that to the Commission? 

Mr. MCDOWELL. I think under the logic put forward in the order, 

the Commission has boundless authority and you could bring such 

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cases. The Commission basically says it has authority for direct 

economic and indirect economic regulation but is choosing not to go 

to certain places, but it could, it said in the order. 

Mr. ROGERS. I have met no inventor of any application that 

didn’t think that this was the one that should make it. That is why 

we have thousands and thousands of applications, and I am 

stunned by these very polite terms of ‘‘light touch,’’ of regulation, 

but what we are doing is creating the government as the gatekeeper for the Internet for the first time in its history after it has 

exploded with innovation, and you use Facebook as your term for 

the future but Facebook was there before you got there and so was 

Netscape and so was Google and so was YouTube and it explodes 

and it is fantastic, and for the government to step in and get the 

keys to the gate scares me to death. 

I will ask you this, Mr. McDowell. Was this a controversial order, 

I mean, given the sense that 300 Members of Congress, yes or no? 

Mr. MCDOWELL. Yes. 

Mr. ROGERS. Have you ever seen in your time—well, actually I 

am going to ask Mr. Copps. You have been there 10 years. Have 

you ever done such a controversial order the week before Christmas at the change of a Congress where there was going to be a 

power switch in the body? I mean, a lot going on, a lot of chaos. 

This is major. It is controversial. Have you ever seen that in your 

10 years on the Commission? 

Mr. COPPS. Yes, I have. 

Mr. ROGERS. Oh, really? 

Mr. COPPS. I have seen it a couple of times with regard to media 

ownership, the newspaper broadcast cross-ownership, a number of 

other things where—— 

Mr. ROGERS. Where we were in such a hurry that you didn’t feel 

you needed a full market survey? 

Mr. COPPS. Yes, sir. 

Mr. ROGERS. Wow. Interesting. 

Ms. Baker, you described that the market surveys before, the European Union, not known for its bashfulness about regulating anything if it moves, what was their determination on regulation of 

the Internet in relation to this? 

Ms. BAKER. The European Union took a look at this and actually 

said what we need to do is have a transparency, a very consumerfriendly transparency approach so that if there is a problem there, 

we would be able to address it. So in some regards, we took a much 

more regulatory approach than the European Union. 

Mr. ROGERS. So the French even argued that we have gone too 

far. Interesting. 

Mr. WALDEN. The gentleman’s—— 

Mr. ROGERS. I see my time is expired. I look forward to another 

round of questions, Mr. Chairman. 

Mr. WALDEN. I now turn to the gentleman from Washington, Mr. 

Inslee, for 5 minutes. 

Mr. INSLEE. Thank you, and thank you, Mr. Chair and Ranking 

Member Eshoo, to allow me to participate in this. I think this is 

very important and I appreciate the Commission’s work on this effort because I really do believe the Internet does run a risk of becoming the Outernet if we don’t protect Americans’ access to it, and 

121 

I say ‘‘Outernet’’ because you will be out of luck if your service provider decides that they want you to go to their content provider 

that they have struck a deal with or they have struck a merger 

with rather than what you want to go to on the Internet. And anyone who doesn’t understand that threat doesn’t understand the 

enormous commercial interests in cornering lanes of this freeway. 

Now, everyone has a metaphor. I will just tell you how I look at 

it, and that this is a freeway, and the risk we face is that individual entrepreneurs out of commercial instinct will and do the 

control the on lanes to the freeway. Now, I don’t know how my Republican colleagues think about it but I will tell you, if some commercial entity today put down gates on I-5 on the Mercer Street 

entrance to Interstate 5 in Seattle, Washington, and said you 

couldn’t go past that gate unless you agreed to go to my favorite 

shopping center, I will just pick Walmart for a minute, not that 

there is anything bad about Walmart, instead of Costco, which my 

competitor has a deal with, and that is the risk we face. We face 

people putting gates on this freeway if you don’t go to my favorite 

shopping center that I have struck a deal with as a service provider. 

And I want to thank you for your work on this, but I do want 

to ask you about some concerns because I think there are some 

things we need to continue to explore, and one of them I have a 

principal interest in is how we prevent this from happening in the 

wireless space because we know so much is going to the wireless 

space, and I guess I do have a concern that we have acted in the 

wired space which you can think of a little bit as yesterday but not 

in the wireless space, which I think of as tomorrow, which is going 

to be the future of this thing. I hate to think we did the right thing 

in the wired space but not in the wireless. I just wondered, Mr. 

Copps and Mr. Chairman, and if you could both address that concern, what the options may be for us, I would appreciate it. 

Mr. COPPS. Well, for my part, I would agree and express some 

concern about that because in many ways I think wireless is now 

too where lots of people are cutting their lines and taking the wireless and accessing broadband that way too. I understand that there 

are differences, and when you implement a network neutrality 

rule, you have to be cognizant and sensitive to those differences in 

how you proceed but I think the principle should apply and the 

rule generally should have applied. 

If I can just say one more thing real quickly, I really appreciated 

your illustration of the I-5 example that you used because I was 

sitting here thinking during much of the discussion, the last great 

infrastructure build-out that this country was the interstate highway system, and we made darn sure there were on ramps and they 

were open, and all this talk about oh, it is prospective and all, we 

put safety precautions on there prospectively. We put speed limits 

on there prospectively. There is nothing wrong with doing things 

prospectively, particularly when you are talking about safeguarding 

such a transformative infrastructure as we are talking about here. 

Mr. GENACHOWSKI. Well, I would just add that I agree that the 

importance of mobile access to the Internet is growing every day. 

In the order we adopted, we did take steps to promote Internet 

freedom, the transparency provisions, no blocking. We also wanted 

122 

to be cognizant about some of the differences between wireless and 

fixed and it is something that we will continue to pay attention to 

and do what we can to make sure that Internet freedom is protected on mobile Internet access as well as fixed. 

Mr. INSLEE. Well, there may be some challenges in wireless but 

I hope you all will consider them because we hate to create a safety 

system for the horse-and-buggy day but not for the car day, and I 

think that is kind of the transition we are in. 

Any of the other commissioners, if you would like to comment, 

feel free. 

Ms. CLYBURN. Yes, Congressman. I too do not want the development of two separate worlds, one wired and one wireless. Increasingly, individuals cutting the cord, as my colleague said, is approaching 30 percent, especially in communities that might have 

economic challenges that have to choose which direction to go, and 

interestingly enough, certain communities only access the Internet 

because this is the only affordable means with these mobile devices. So it is important that their experience is as robust as those 

in the wired world, and I share your concerns and again, there is 

no presumption that these open Internet rules do not apply. They 

do apply in this space. 

Mr. WALDEN. The gentleman’s time is—go ahead and finish. 

Ms. BAKER. I was going to say that this isn’t really a question 

of politics or philosophy, it is actually a question of physics, and 

then there are actual technical parameters that justify this decision. None of us want—you know, consumers are the ones that 

don’t benefit if their phones don’t work. I got into a cab the other 

day. He was streaming CNN on his iPhone, which I thought was 

really great, and then I thought actually you are the reason why 

I can’t make a phone call. So I think there are technical parameters that we need to work with that actually exist in the wireless 

world that justify this distinction. 

Mr. INSLEE. Thank you. 

Mr. WALDEN. The gentleman’s time is expired. We will now go 

to the gentleman from New Hampshire, Mr. Bass, for 5 minutes. 

Mr. BASS. Thank you very much, Mr. Chairman. I had the honor 

of serving in this body for 12 years, and on this committee for six, 

and now as a returning Member of Congress, I am learning a lot 

as a new freshman. One thing I learned today is don’t be late to 

the beginning of a subcommittee hearing. We are hitting exactly 3 

hours now, and to the credit of the chair of the committee and the 

subcommittee chair, that is without opening statements. 

It is a very interesting debate that we are having here today. My 

ancestors lived in southern New Hampshire for many, many generations. We have correspondence between my great-grandmother 

and the Keene Coal Company trying to figure out a way to run an 

electric line and a phone line actually later from Keene over to 

Peterborough. There was nothing there. And so when we developed 

the utilities that we have today, they were done because there was 

no other way for that build-out to occur. We did not get rotary dial 

in my hometown until 1964, and you had to sneak another phone 

into your house hoping that somehow Ma Bell wouldn’t be able to 

tell that you were doing this. This was a world of enormous regulation and there was good justification for that. 

123 

And I understand that the nature of this debate basically surrounds the issue of free markets and differing definitions of what 

freedom is and what context it belongs, and I am solidly on the side 

of those who believe that is a dangerous precedent to begin a whole 

new round of regulation for very different reasons, in my opinion, 

from those which we had in early days when the utility business 

was just getting established: rail, electricity and telecommunications. 

Now, having said that, Mr. Chairman, if I could ask for unanimous consent to add to the record a paper I have here by former 

Solicitor General Seth Waxman stating that Internet access service 

was never regulated as a telecommunications service. 

Mr. WALDEN. Without objection. 

Mr. BASS. Thank you. 

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

Mr. BASS. Commissioner McDowell, by the way, thank you for 

coming to visit me, and also Commissioner Clyburn, and I believe 

one of the other ones if you came as well but I was not here and 

I am most apologetic for that, and I welcome you all to come. 

Commissioner McDowell, some individuals continue to claim that 

the retail provision of Internet access service was once regulated as 

a telecommunications service. My understanding is that the FCC 

has never regulated such service. Wasn’t this the genius that led 

to the explosive growth in the Internet as Chairman Kennard 

pointed out when he led the Commission? 

Mr. MCDOWELL. Absolutely. In fact, if you look at the back of my 

dissent, you will see a letter that I filed with this committee last 

spring outlining sort of the history of the regulation of Internet access services and broadband in particular, and it has never been 

regulated as a phone company under Title II. 

Mr. BASS. Commissioner McDowell, the order that we have been 

debating this morning claims that network neutrality is needed to 

protect small upstart Internet companies, but aren’t smart upstarts 

precisely the companies that might want to enter into specialized 

business arrangements with broadband providers so that they can 

compete against the great content providers—we know who they 

are—and ironically, is it possible that this order might protect the 

web incumbents in the end? 

Mr. MCDOWELL. It could. I think this order creates a lot of confusion in the marketplace and we are seeing the market respond in 

a lot of confusing ways. 

Mr. BASS. And lastly, Commissioner McDowell, the Commission’s 

jurisdiction seems to be evolving. While the Commission has deregulated in certain areas—unbundling, cam armus reporting, 

cable price regulation—the agency has at least proposed regulations in new areas which we debated this morning—network neutrality, all vid, data roaming. What do you view as the Commission’s core responsibilities? And I know this is a leading question. 

Has in your view the Commission strayed from those core responsibilities? 

Mr. MCDOWELL. Well, our core responsibility by statute is given 

to us by Congress, and that is to protect the public interest, and 

I think the public interest is best served through competition, so 

as Commissioner Baker pointed out earlier, the best antidote to 

124 

regulation is to have more competition for broadband services, and 

in my 41⁄2 years on the Commission, that is what I have worked 

toward, whether it is making easier to get competitive fiber on the 

ground, freeing up more of the airwaves for either licensed or unlicensed use, etc., let us have more competition and that obviates the 

need for regulation. 

Mr. BASS. Thank you. I yield back, Mr. Chairman. 

Mr. WALDEN. The gentleman’s time is expired. We will go into 

round two now, and I will lead with that. 

Chairman Genachowski, did you or any of your staff or any senior FCC officials explicitly or implicitly indicate to any members of 

industry that if they opposed your order, the FCC might move back 

to Title II approach or decide other proceedings of interest to them 

differently? 

Mr. GENACHOWSKI. No. 

Mr. WALDEN. OK. Chairman, have you adopted industry-wide— 

you have adopted industry-wide net neutrality rules. Why was it 

appropriate to add network neutrality conditions to the Comcast/ 

NBC Universal order, and if you are so confident of your authority, 

which we question obviously, why was it necessary to make those 

conditions continue to apply even if the network neutrality decision 

is overturned in court? 

Mr. GENACHOWSKI. All the conditions in the Comcast case, particularly that one, were transaction-specific. That particular transaction involved the country’s largest Internet service provider combining with a very large content company. We certainly had a lot 

of information in the record of that transaction about the incentives 

to favor their own online content and disfavor others, and so having a condition relating to open Internet was a transaction-specific 

condition that I personally felt was very important. 

Mr. WALDEN. So I go back to something that the chairman emeritus, Mr. Dingell, referenced, his words, speaking of bank holdup 

methods. Look, I was a licensee for 22 years. The last thing you 

ever want to do is poke any of you in the eye because you might 

have another proceeding coming, and I have spoken to most of you 

directly about my concern about agencies that use that opportunity 

to effect policy over which they don’t have, we believe, authority, 

and I find it interesting too that on the D block discussion, you 

have chosen to back off on doing what the law explicitly calls on 

you to do, which is auction the D block, because Senator Rockefeller and others have expressed concern. In this area, roughly 300 

Members of the House said we don’t think you have the authority 

but you chose move forward on that rather expeditiously at the closure of the year, so that is a subject that will continue to be of concern and focus on. 

I want to go back to the section 706 issue upon which is my understanding you based the decision to move forward with the net 

neutrality rules, and in 706(b) in the inquiry portion of that, the 

question arises, if the Commission shall determine whether advanced telecommunication capability is being deployed to all Americans in a reasonable and timely fashion, and I suppose the debate 

here is, what is reasonable and what is timely. In the FCC 

broadband plan that you put forward, you indicate that 95 percent 

of Americans have access to the Internet. The President now calls 

125 

for 98 percent. And two-thirds of Americans choose to subscribe, 

and we have gone from 8 million subscribers to 200 million subscribers in 10 years. I can’t think of a service in America that has 

ever exploded with growth quite like that, and that would seem to 

be both timely and reasonable to me. Why isn’t it timely and reasonable to you all? 

Mr. GENACHOWSKI. Well, I think this is an important question. 

I am glad you asked it. There are 24 million Americans who don’t 

have any access to Internet because there is no infrastructure in 

their areas, and as you mentioned, there are about 100 million 

Americans who don’t subscribe for various reasons. Our rankings 

internationally are not where they should be. There is debate about 

what exactly the number—— 

Mr. WALDEN. Right, but we are building out wireless and we are 

ahead of some countries on that. 

Mr. GENACHOWSKI. But I would say I respectfully disagree on 

this. I don’t think the country is where it should be when it comes 

to broadband, and we have a lot of work to do to make sure our 

broadband infrastructure and adoption is globally competitive. 

Mr. WALDEN. But the issue that arises as a result of making that 

finding that we are not moving reasonably and in a timely manner, 

that is the predicate then that allowed you to trigger 706 and use 

that as the crutch to get the authority to move forward with the 

regulation of net neutrality in part. 

Mr. GENACHOWSKI. Yes. There are other provisions that we relied on that I would be happy to address. 

Mr. WALDEN. But then it leads to the discussion because in 

706(a) it does talk about allowing State commissions to actually set 

price caps and all that. Now, I have heard today, I believe-correct 

me if I am wrong—that your order does not get into setting rates 

or controlling rates on the Internet. 

Mr. GENACHOWSKI. Right. 

Mr. WALDEN. And yet on page 39, number 67, and on page 43, 

number 76, you do contemplate rate control by saying that you 

can’t pay for priority. Isn’t that a form of rate control? 

Mr. GENACHOWSKI. I don’t see it that way and I don’t think that 

is how people in the industry see it, but it is the case that that 

kind of prioritization is something that the order said was 

disfavored. 

Mr. WALDEN. So if you say it is disfavored, that says you believe 

you have the authority to control rates on the Internet, correct? 

Mr. GENACHOWSKI. I really don’t see it that way. 

Mr. WALDEN. Then how could you find that it is—— 

Mr. GENACHOWSKI. I think it is fair to say that any order in this 

area that finds certain conduct inconsistent with Internet freedom 

principles would have the effect of saying particular transactions 

aren’t permitted, and one could look at that and say well, you are 

saying that transaction—— 

Mr. WALDEN. But you are saying a rate of zero. A rate of zero 

is the rate. 

Mr. GENACHOWSKI. Yes. That has been the history of Internet. 

Mr. WALDEN. And another commission could come back and say 

well, we think because all this has been found in part linked to 

126 

706(b) that indeed you have 706(a) authority to set caps, couldn’t 

they? I mean, you don’t have that plan, you tell us, but—— 

Mr. GENACHOWSKI. If I could make a couple points, one is, the 

basis for this decision was both in 706, other sections of the statute 

working together and so we didn’t address the question of whether 

706 alone would be sufficient authority, and we didn’t address 

some of the questions that you are raising because we didn’t have 

to in the context of this proceeding. 

Mr. WALDEN. And the ranking member explained to me I am 

over my time, so I will stop with that even though I have let other 

members go over their time to get your responses. I will now turn 

to the ranking member, my friend from California. 

Ms. ESHOO. You are a gentleman, and I think that I am going 

to have to really stay within my time for having whispered that to 

you. 

First of all, the term ‘‘cops on the beat’’ has been used several 

times, and I think the best cop on the best is Commissioner Copps. 

He has been there for the American people and the consumer and 

in the deepest, broadest way understanding the democratization of 

the Internet and protecting the American people from forces that 

would chip away at it, so I salute you, sir. 

I want to make a couple of observations because now we have 

just about concluded the hearing. There are some curious things 

that have been advanced during this hearing. My Republican 

friends are questioning having any kind of framework. I think it 

is a light framework. That has been questioned, but that is my 

view. I think it is a light touch. And they don’t want any of that, 

in fact, I think are going to be introducing the Congressional Review Act so that there is nothing so that it is just a flat earth without any on it whatsoever. But they are in denial about the past. 

There is a record from the past. There is a record from the past, 

and there is a timeline. It goes from 2005 to this year, to 2011, 

starting with the Madison River Communications blocking VoIP on 

its DSL network, settled by FCC consent decree that included a 

$15,000 payment, to 2006 where Cingular blocked PayPal, 2007– 

2008, Comcast actually denied imbedded midst after FCC complaint filed that it blocked peer-to-peer traffic, 2008, issues in a 

study finding significant blocking of BitTorrent in the United 

States including across Comcast and Cox. 

So you can go through the record. These things actually occurred. 

This is not in the ether. This is not something that has been fabricated. There is a record of violations, and you know who those 

violations against? All of us. All of us and our constituents. So our 

first obligation is to the public, and if there is some misplay including any company that is in my district, you know what? There has 

to be a cop on the beat, not someone that takes out their stick and 

clubs someone but there has to be rules to the road. Now, if you 

ignore the past, then you don’t have a roadmap for the future, and 

I think that it is very important to have these rules. 

Now, another curiosity of mine is about our—and you know how 

respect and regard I have for you, Commissioners McDowell and 

Baker, had the opportunity to remove the open Internet conditions 

on the Comcast merger before they voted but they chose not to dissent or object as far as I know. 

127 

Mr. MCDOWELL. Can I clarify that? 

Ms. ESHOO. Just a minute. Let me finish. I am going to use my 

time. So you essentially voted against them before voting for them, 

which is a real curiosity to me. 

Now, there is a lot of talk about markets and companies and 

whatever here today. A good number of them are my constituents. 

I want to ask for a unanimous consent request that all of these letters representing the companies, the interests, the very interest 

that are a part of this decision that have weighed in and support 

these rules, and they are also opposed to the CRA, and in this 

packet, which I love, the first one is from the United States Conference of Catholic Bishops. They even quote the pope. So I might 

for the record say I think we are on the side of the angels here. 

So Mr. Chairman, with all seriousness, I would really like to ask 

for a unanimous consent request that all of these letters be placed 

in the record. They are Internet companies, they are small, they 

are large, they are in between, and they have weighed in. No one 

has forced them to come forward and express any given view. They 

have offered this, and I think it is an eloquent statement about 

how they view it and that this is something that they agree with, 

so if you would grant that request? 

Mr. WALDEN. Without objection. 

Ms. ESHOO. And then I have—I think I have run out of time, so 

I can’t ask any questions, but—— 

Mr. WALDEN. But if you want to allow Mr. McDowell to respond—— 

Ms. ESHOO [continuing]. Comments remain for the record, and I 

am so glad that we are on the side of the angels, and I thank the 

Catholic Conference of Bishops along with all the companies. 

Thank you. 

Mr. WALDEN. Do you want to allow Mr. McDowell to respond? 

Ms. ESHOO. Sure. 

Mr. MCDOWELL. Thank you, Congresswoman. 

Ms. ESHOO. Why did you vote that way? 

Mr. MCDOWELL. We didn’t vote for the conditions. Actually net 

neutrality is not a condition in the merger. They are part of a side 

agreement. They are commitments in the side agreement between 

the chairman’s office—— 

Ms. ESHOO. Well, aren’t there open Internet rules as part of the 

merger? 

Mr. MCDOWELL. They are not merger conditions, no, ma’am. 

Ms. ESHOO. But they were voluntary. You could have objected to 

them—— 

Ms. BAKER. There is a—— 

Ms. ESHOO [continuing]. If you thought they were so onerous. 

Mr. MCDOWELL. They are in a separate side agreement between 

Comcast and the FCC. 

Ms. ESHOO. Did you ever ask them why they would, since you 

find them to be onerous, why they would find the to be acceptable? 

Did you ever question it? 

Mr. MCDOWELL. Absolutely. I think they were desperate to get 

their merger done and they would have agreed to almost anything. 

Ms. ESHOO. But did you ask them—— 

Mr. MCDOWELL. Yes. 

128 

Ms. ESHOO [continuing]. Why they were—and are you quoting 

them? 

Mr. MCDOWELL. That is pretty much the answer I got. They 

were desperate to get their merger done. 

Ms. ESHOO. Are you quoting them? 

Mr. MCDOWELL. That is a paraphrase. 

Ms. ESHOO. Well, I think there is a difference, with all due respect, because I don’t think that—that is not the way it was presented to me. Yes, Commissioner Baker? 

Ms. BAKER. I think that there are—well, there are absolutely serious legal differences between conditions to the merger and voluntary commitments that a company can make. There is a package 

of voluntary commitments. Some of them have to do with diversity. 

This one is a voluntary commitment that a company can make 

without regard to what he FCC has jurisdiction over so by their 

commitment, it doesn’t imply anything to our statutory authority 

over net neutrality. 

Mr. WALDEN. I am going to have to—— 

Ms. ESHOO. Thank you. 

Mr. WALDEN. Well, we are 21⁄2 minutes over. Let us go now to 

the chairman of the oversight committee and the former chairman 

of this committee, Mr. Stearns. 

Mr. STEARNS. Thank you, Mr. Chairman, and I regret I was prevented from being here. We were chairing an Oversight Committee 

looking into Obamacare, and so I just have a question. I would like 

to start with the chairman and just go down the line, if I could. 

Mr. Chairman, you obviously succeeded in putting net neutrality 

into Title I, but as I understand, the proceedings are still open for 

Title II. Is that correct? 

Mr. GENACHOWSKI. There is a proceeding that is open that looks 

at the effect of the Comcast decision on our authority. 

Mr. STEARNS. OK. But I think in the industry, the perception is 

that the proceedings to do this in Title II is still there, and so my 

question is, do you think it should be closed down, this proceeding 

that you have open in Title II? Just yes or no. 

Mr. GENACHOWSKI. I don’t think there is any confusion about 

where we are. It is Title I—— 

Mr. STEARNS. No, I mean in your opinion do you want to—do you 

think it should remain open or not? 

Mr. GENACHOWSKI. I think a proceeding to continue to have 

input our authority is a healthy thing and could benefit—— 

Mr. STEARNS. Mr. Copps, Commissioner Copps, do you think it 

should be continued to have the proceedings open for Title II? 

Mr. COPPS. Yes, I do. 

Mr. STEARNS. OK. Mr. McDowell? 

Mr. MCDOWELL. I think it should be closed because I think the 

fact that it is open creates some certainty and shows that perhaps 

the Commission wants to move to a full explicit Title II reclassification. 

Mr. STEARNS. Commissioner Clyburn? 

Ms. CLYBURN. I think that we should stay on this pathway and 

that there is certainty with the decision that we made. 

Mr. STEARNS. Commissioner Baker? 

129 

Ms. BAKER. If the chairman is serious that we are going to stay 

with Title I, then he should close Title II proceedings. 

Mr. STEARNS. Well, I think that is my point, Mr. Chairman. I 

think, as you will agree with me, by keeping this open, it is sort 

of a veiled threat for industry and creates uncertainty and gives 

angst to them because, you know, things could change in this proceeding and still open. So I think certainly my position is, if you 

have made your case for Title I, then the proceedings should be 

closed for Title II, and I just think a lot of us are a little concerned 

that it is creating angst in the business environment. 

Commissioner McDowell, I think in terms of when they were 

talking about issuing it in Title I, there was some language that 

we don’t want to get involved with regulating coffee shops and 

bookstores. But if you actually implement a net neutrality, aren’t 

you in effect regulating the Internet in Starbucks by doing that? 

Mr. MCDOWELL. Well, as I said before earlier today, there doesn’t 

seem to be any limiting principle to the FCC’s authority under its 

rule, under its order from December 21st. So if there is no limit to 

its authority, there is no limit to its authority. 

Mr. STEARNS. So they could be in bookstores, they could be in 

coffee shops, anywhere there is WiFi. Wouldn’t you agree? 

So let me just go back to this Title II. The chairman has indicated that this D.C. Circuit ruling in the Comcast case. Mr. Chairman, is it possible—I mean, you have indicated that you want to 

keep it open because of the Comcast case ruling. You might want 

to elaborate. I will give you a chance to elaborate on that to give 

it more justification because you see the two Republicans that say 

we should close it down. In my opinion, you are creating uncertainty. If you went ahead and did it in Title I, there is no reason 

to continue to go forward. In fact, I think the chairman of this committee would like you to let this committee have the jurisdiction instead of you unilaterally doing it, and I think you have indicated 

to me you would like to see us provide that direction. Is that true? 

Mr. GENACHOWSKI. Yes. The single best way to have clarity and 

certainty here would be for Congress to look at the statute, update 

it in a way that was appropriate. There are issues that have been 

raised. We certainly would be a resource to that. We were supportive of efforts that have occurred over time to cause that to happen, and I would continue to work with that. 

Mr. STEARNS. So under what circumstances would you close 

down the open proceedings under Title II? 

Mr. GENACHOWSKI. I have to think about that and get back to 

you, but let me explain. It is not a Title II proceeding. It was a 

neutral proceeding that was launched after the Comcast decision to 

ask questions about our authority and different directions that 

could be gone, all presented in a neutral way. As the authority 

issue continues to be debated, having a proceeding open that is a 

vehicle for comment seems to me to make sense. I would be happy 

to agree to stop debating the authority issue and put that off to one 

side. But again, I think we have made our position very clear. I 

made my position very clear in the order in this case that our basis 

for moving forward under Title I is strong and that is a preferable 

way to proceed. 

130 

Mr. STEARNS. Would any of the other commissioners like to comment on this? Mr. Copps? 

Mr. COPPS. Yes. I would like to keep that proceeding open while 

there is uncertainty and there is uncertainty right now with how 

the courts are going to decide, so I don’t see any reason why that 

should be closed. I want to keep it open because I think there is 

probably a more solid foundation which you and I would disagree 

you on Title II. 

The third thing I want to say is, address this issue that a bunch 

of bureaucrats has end-run the wishes of the Congress. I worked 

in the United States Senate for 15 years. I am kind of a creature 

of the Congress. I take great pride in the service that I had here. 

I voted as I did on all these things because I think I am upholding 

and implementing the laws that Congress passed, and I passionately believe in what I have said here today, but I don’t want to 

leave any impression that I am at odds with the wishes to Congress or at least how I see the wishes of Congress. 

Mr. WALDEN. The gentleman’s time—— 

Mr. STEARNS. Thank you, Mr. Chairman. Unless any one of the 

commissioners wants to add something, I am done. Thank you for 

your time. 

Mr. MCDOWELL. I would just like to add that I think the Title 

II docket, call it what you will, given the context of when it was 

opened in June of last year in the wake of the Comcast court case 

and given the so-called, the announcement of the so-called third 

wave proposal, which was a Title II proposal, that it remains open, 

it seems, as a contingency plan should the courts, or in my view, 

when the courts strike down the FCC’s December 21st order under 

Title I. And so there was plenty of certainty in this marketplace 

until the FCC started examining regulating it. 

Mr. WALDEN. The gentleman’s time is expired. Let us go now to 

the gentleman from Pennsylvania, Mr. Doyle, for 5 minutes. 

Mr. DOYLE. Thanks, Mr. Chairman. 

Commissioner McDowell, I just wanted to revisit something that 

you said at the end of your comment when we talked about the 

stimulus bill and you said if Congress wanted us to implement 

these rules, we should have acted, and you know, in fact, we did 

in the Recovery Act actually require that. I just wanted to read a 

section from it. It says that ‘‘pursuant to this section, the Assistant 

Secretary shall in coordination with the Commission publish nondiscrimination and network interconnection obligations that shall 

be contractual conditions of the grants awarded under this section 

including at a minimum adherence to the principles contained in 

the Commission’s broadband policy statement.’’ So I think at some 

point Congress did indicate that we wanted you to move in that direction. 

But I want to ask Chairman Genachowski, now, we have heard 

a lot of our colleagues on the Republican side of the aisle suggest 

that the process that you used in the merger and also in this open 

Internet proceeding were unusual and perhaps inappropriate, and 

I want to give you the opportunity to share your thoughts on those 

suggestions. How did the process you used differ from past proceedings? 

131 

Mr. GENACHOWSKI. Well, I think in both of those proceedings, we 

met or exceeded best practices in the area, and so to start with our 

open Internet proceeding, we launched with a notice last year that 

published the rules, which was a positive departure from prior 

precedent. We received over 200,000 commenters. We held public 

workshops available offline and online that a number of commissioners, including those who disagreed with the direction participated in to make it open. We issued requests for further comment 

as we drilled down on particular issues and ultimately we exercised 

our judgment and interpreted the will of Congress and made a decision. 

With respect to the Comcast order, we inherited a situation 

where in past transactions there were just enormous complaints 

about length of time far longer than this took about a proceeding 

that was, well, let me just say it in a positive way. We ran a proceeding that was professional, that was focused, that specified the 

issues that we were concerned about coming out of a complex and 

large transaction, and for those who say that the parties acted a 

certain way in advance, which I don’t believe, and they participated 

in proceedings up here in Congress and said similar things and so 

did other parties. After the transaction was over and they could 

have said anything they wanted, they praised the proceeding as 

fair, timely and thorough. 

Mr. DOYLE. And we heard that two of the commissioners didn’t 

get the order until 24 hours before. Tell me, how does a typical 

FCC order move forward? Are dissenting commissioners part of the 

negotiation process and when did Commissioners McDowell and 

Baker tell you they would dissent? 

Mr. GENACHOWSKI. Well, consistent with our practice, which is 

also a best practice, 3 weeks in advance of a Commission meeting, 

we circulate a draft of an order to be voted on, and that kicks off 

a process of deliberation among commissioners, and certainly it is 

my hope in that setting that everyone will reserve judgment until 

there was a chance for full discussion. In this case, unfortunately, 

I think two of the commissioners decided within 12 hours that 

there was nothing to deliberate about or talk about and announced 

that they would dissent. But there continued to be ongoing discussions. There were further drafts circulated. As we got closer to the 

meeting, obviously we needed to circulate a draft that had the support of three members. I would have been happy, as I think all of 

us would have been, to circulate that as soon as there was agreement of at least three members. That agreement occurred on the 

Monday, the day before the meeting, and as quickly as possible 

after that, we circulated that to the full Commission. We took steps 

to make sure that if there were any prejudice from that, perfecting 

a dissent, for example, that the commissioners would have the time 

that they needed to address any issues that came up, but there 

weren’t material differences between what was circulated then and 

what had been circulated earlier. 

Mr. DOYLE. Thank you. I don’t have any other questions, Mr. 

Chairman. Thank you. 

Mr. WALDEN. I would go then to the gentleman from Texas, the 

chairman emeritus, Mr. Barton, for 5 minutes. 

132 

Mr. BARTON. Thank you. I said earlier I was impressed with the 

intellect of the Commission. I must also add too, I am impressed 

with their bladders. I think you all have been here for 3-1/2 hours 

continuously, so that is quite a compliment. 

I want to look at the Title II issue a little bit in this round. My 

understanding is that Title II regulates hard-line, monopolistic 

phone services like we had back in the 1930s through the 1960s. 

I am puzzled why we think that that model would be applied to 

the Internet where we have multiple providers. We obviously have 

a market that functions. We have multiple options for individuals 

to choose. The courts have ruled that it is an information service. 

I just don’t see the connection. 

Commissioner Baker, can you enlighten me on how I am wrong 

when I look at Title II and I see a different system entirely than 

what we have in terms of the Internet? 

Ms. BAKER. No, Mr. Chairman, I think you are entirely right. I 

think it was a contrived way to construe that we might have greater authority, which we don’t have. 

Mr. BARTON. What about you, Mr. McDowell, or Commissioner 

McDowell, I should say? 

Mr. MCDOWELL. As you point out, this was created in 1934 with 

the old circuit switched analog voice Ma Bell monopoly, and actually those rules were taken from the 19th century railroad monopoly regulations. So I don’t think it fits the architecture of the Internet which really defies top-down authoritarian control, so I think 

it would be a mismatch. 

Mr. BARTON. Well, to be fair, I should give the chairman an opportunity here. Chairman Genachowski, what is wrong with my 

analysis of Title II? 

Mr. GENACHOWSKI. Well, as you know, we decided, and I believe 

that proceeding under Title I was the right way to go. The only 

note that I would make in this discussion is that no one at the 

Commission had suggested a full-blown Title II approach. There 

was an approach—— 

Mr. BARTON. The gentleman to your left said—— 

Mr. GENACHOWSKI. Let me—some suggested that the Title II 

mechanism that was used and is used for mobile voice could make 

sense but we listened, we looked at the record, we got input from 

Congress and others and decided to pursue a Title I direction. 

Mr. BARTON. And I am not going to ask Commissioner Copps because he has already pointed out, he spent 15 years in the Senate 

and he could certainly filibuster that question for the next 2 minutes of my time but I will give him an opportunity in writing to 

respond. 

I want to go to Commissioner Baker for my last question. This 

is a question that the staff has prepared. It just goes to show that 

sometimes I can take direction here. Commissioner Baker, the 

order that we are discussing today, the net neutrality order, relies 

on section 706 for authority. Isn’t section 706 about removing barriers to infrastructure investment and won’t network neutrality 

rules deter investment, and hasn’t the FCC in the past said that 

section 706 is not an independent grant of authority? 

Ms. BAKER. Well done. Yes, Mr. Chairman—— 

Mr. BARTON. I can read. 

133 

Ms. BAKER. Yes. I think that this is an attempt to twist a 14- 

year-old deregulatory policy statement into a direct grant of authority, and 706 does not constitute an independent grant of authority. Section 706 is about broadband deployment, and the FCC 

has no authority to erect obstacles in the name of removing them, 

so I think that we have completely misguided basing our authority 

here on 706. You have to keep in mind that section 706 is really 

the centerpiece of all broadband and Internet regulation going forward. It was actually a footnote in the 1996 Act. So this is an odd 

place for us to hang our hat on such an important and intrusive 

regulatory change. 

Mr. WALDEN. Mr. Chairman? 

Mr. BARTON. I am going to yield the time to the distinguished—— 

Mr. WALDEN. You are kind. I don’t know if this even requires 

unanimous consent but I will ask for it. We have a vote on the 

Floor, and what I was thinking was, if we did two, two and two, 

we have three members here, we could get everyone in who has 

stayed around. If you can do less than that, do it. 

Mr. TERRY. One minute for a question and one minute for an answer, I was thinking. 

Mr. WALDEN. Make it 20 seconds on the question. I recognize the 

vice chair. 

Mr. TERRY. All right. And I am going to read it, but I actually 

wrote this question. 

Today, the broadband provider’s business model offers tiers 

based on speed and size, for example, 7 megabits is less costly than 

the 10-, 15- or 20-megabit package or tier. So the question is, is a 

tiered system of size and speed unreasonable discrimination? 

Mr. GENACHOWSKI. The answer is no. We said so in the order 

and it was one of the ways that we brought certainty to the area 

and will boost investment in infrastructure. 

Mr. TERRY. Does anyone else want to comment on that? 

Mr. MCDOWELL. I think it is contradicted in the order by the ban 

on paid prioritization, so if you are consumer and you want a burst 

of speed to download a movie, you don’t want to pay 24 by 7 for 

a big, fat broadband pipe, right? It is not cost-effective. Would that 

order prohibit that? Is that a form of tiering, paid prioritization? 

It gets confusing very quickly. 

Mr. TERRY. OK. Thank you. 

Ms. BAKER. I would agree. Our regulation was kind of clear as 

mud on that, so why don’t you bring a declaratory ruling proceed 

to the FCC and we can decide. I am being sarcastic but—— 

Mr. TERRY. Micro Trend—— 

Ms. BAKER [continuing]. An awful lot of applications, what is the 

Kindle, what is the Garmin, what is Google voice and the next generation of the Facebook, what are these items, are they OK. I think 

the answer from our ruling is that you can either bring a complaint 

process or you can bring a declaratory ruling and we can tell you 

whether it is OK. 

Mr. WALDEN. We are going down to the gentlewoman from Tennessee for no more than 2 minutes. 

Ms. BLACKBURN. Thank you, Mr. Chairman. 

134 

And I just want to go back to where I was with Ms. Clyburn in 

the first round. It is frustrating to us when you all mention that 

you have done market analysis but then there is not market analysis that would meet the OMB standards. You cannot point to a 

market failure. And that is frustrating, so if there is analysis that 

you want to submit to show how you came to these conclusions, I 

think that it would be important to do so. 

Chairman Genachowski—— 

Ms. CLYBURN. The chairman has committed to do that. 

Ms. BLACKBURN. OK. Thank you. 

And I apologize. We have had multiple hearings going on this 

morning. Mr. Chairman, you and I were out at CES last month, 

and I know you walked the same floor I walked. You talked to a 

lot of those innovators and a lot of those guys were out of Tennessee. They are working on health IT. They are working on digital 

music platforms. They are working on content distribution. AOL is 

moving their content headquarters into Nashville. Now, what I am 

hearing from a lot of these innovators at home and when I am out 

and about is hey, what is this business about having to seek permission from the FCC, are we going to have to go to them before 

we innovate, what is the chairman expecting us to do, are they 

going to tie our hands, what is this about anybody can object, they 

can go file a complaint while we are in the innovative process. This 

is the type uncertainty that stifle job creation. 

And Mr. Chairman, I don’t know if anybody has submitted this 

Phoenix study for the record but I think it is excellent. When we 

talk about—— 

Mr. WALDEN. Without objection. 

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

Mrs. BLACKBURN [continuing]. Models that show how many jobs 

are created, indirect job losses, 327,600 jobs. This is serious because we want to get busy with jobs. 

I would like for you, Mr. Chairman, to outline for me and submit 

for the record what do our innovators expect? What is this asking 

permission process going to be? Are they going to have to file? You 

can submit it in writing. I know we are short on time. 

Mr. WALDEN. Yes, we want to get to—— 

Ms. BLACKBURN. And just submit it for the record as a written 

statement, and I appreciate that you all have come and come prepared. 

Mr. GENACHOWSKI. Thank you. May I have 10 seconds to reply 

to that? 

Mr. WALDEN. Yes. 

Mr. GENACHOWSKI. Very quickly, just to be clear to the audience, 

the purpose of the order is to protect innovation without permission, and so no one has to come to the FCC for permission, and the 

Consumer Electronics Association supported open Internet and 

supported our order, and I look forward to continuing this dialog 

with you because it is very important. 

Mr. WALDEN. Now we go to Mr. Scalise for no more than two. 

Mr. SCALISE. Thank you, Mr. Chairman. We will hit the lightning round. 

Chairman Genachowski, on the Open Internet Order, the FCC 

stated for a number of reasons these rules apply only to the proviVerDate Nov 24 2008 10:31 Oct 24, 2011 Jkt 037690 PO 00000 Frm 00140 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-8 021611\112-8 CHRIS
135 

sion of broadband Internet access service and not to edge provider 

activities. Are there no concerns about search engines or online 

video provider contents that they are doing anything improperly? 

Mr. GENACHOWSKI. Well, the history of this issue has been focused on Internet service providers, and that makes sense, particularly given the Communications Act, which focuses our authority 

on companies that are providing communication services by wire or 

spectrum. 

Mr. SCALISE. Right, but we have seen, you know, there are real 

examples that have been reported widely in the media, for example, Google Street View where major privacy violations occurred, 

and yet they are exempted from this, and you know, it gives the 

impression that people feel like you all are picking winners and losers, and that is another whole set of problems that—— 

Mr. GENACHOWSKI. I would say that with respect to any company 

like that that uses spectrum or infrastructure that is in our oversight purview, we will investigate, we will act regardless of company. The point of the proceeding was to make sure that the market and consumers pick winners and losers. 

Mr. SCALISE. Commissioner McDowell, when it comes to these 

language provisions that were put in prohibiting providers from 

taking ‘‘reasonable efforts’’ to address things like—or nothing prohibits providers from taking reasonable efforts to address copyright 

infringements or other unlawful activity. A lot of people are expressing concern that there is no real definition of reasonable effort 

and there may be some concern that as these broadband providers 

try to protect their network from things like cyber attacks that 

they might also be concerned that the FCC is going to come behind 

and fine them because this reasonable effort is undescribed. Can 

you address that? 

Mr. MCDOWELL. Again, that would have to be addressed through 

litigation, and that is part of the concern. The word ‘‘reasonable’’ 

is perhaps the most litigated word in American history, so that will 

be determined by three votes. 

Mr. SCALISE. And I know that creates a lot of uncertainty, and 

as we talk about the things that we want to see to encourage investment, to encourage job creation, it is those exact types of uncertainty that make it hard for people to make that investment. 

And Mr. Chairman, if I can close on this. I know a lot of us have 

conversations about whether or not network neutrality is good. I 

think if you at the American people, a bipartisan majority of Congress has said that they don’t want this government intrusion and 

government takeover of the Internet and so I would hope you all 

would go back and look at that because ultimately innovation—— 

Mr. WALDEN. The gentleman’s—— 

Mr. SCALISE [continuing]. Is the great equalizer, and you know, 

when you look at today’s college dropout can be tomorrow’s billionaire and the dropout of today is able to compete and in many 

cases—— 

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

Mr. SCALISE [continuing]. The big phone company or that other 

big company that out there that you all seem to have some concern 

about. So I would just—— 

Mr. WALDEN. The gentleman’s time—— 

136 

Mr. SCALISE [continuing]. Ask that you keep that in mind, and 

I would yield back the balance of my time—— 

Mr. WALDEN [continuing]. Is expired. 

Mr. SCALISE [continuing]. Whatever that balance is. 

Ms. BLACKBURN. I seek unanimous consent to enter into the 

record an editorial by David J. Farber, grandfather of the Internet, 

arguing the Internet neutrality rules are bad because everyone 

would game the regulations rather than innovate. We have a couple of other documents that have been pre-cleared with the minority to also enter those in the record without objection. 

Mr. WALDEN. Without objection. 

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

Ms. ESHOO. I think the pope trumps it myself. 

Mr. WALDEN. I would also say as a final closing comment, at 

least speaking for some of us on this side of the aisle, the only entity more skeptical than our side of the aisle on these net neutrality 

rules may indeed be the D.C. Circuit Court. 

And finally in conclusion, I would like to thank all the witnesses 

and members that participated in today’s hearing. I remind members they have 10 business days to submit questions for the record, 

and I ask that the witnesses all agree to respond promptly to these 

questions, which I know you will 

With that, we do appreciate your counsel, your insight and your 

hard work, and this hearing stands adjourned. 

[Whereupon, at 1:12 p.m., the subcommittee was adjourned.] 

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