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76–566 2012

THE NATIONAL BROADBAND PLAN: DEPLOYING 

QUALITY BROADBAND SERVICES TO THE LAST 

MILE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMUNICATIONS, 

TECHNOLOGY, AND THE INTERNET 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

APRIL 21, 2010 

Serial No. 111–111 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 


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COMMITTEE ON ENERGY AND COMMERCE 

HENRY A. WAXMAN, California 

Chairman 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

FRANK PALLONE, JR., New Jersey 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

Vice Chairman 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANE HARMAN, California 

TOM ALLEN, Maine 

JANICE D. SCHAKOWSKY, Illinois 

HILDA L. SOLIS, California 

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 

CHARLIE MELANCON, Louisiana 

JOHN BARROW, Georgia 

BARON P. HILL, Indiana 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

CHRISTOPHER S. MURPHY, Connecticut 

ZACHARY T. SPACE, Ohio 

JERRY MCNERNEY, California 

BETTY SUTTON, Ohio 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

JOE BARTON, Texas 

Ranking Member 

RALPH M. HALL, Texas 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOHN B. SHADEGG, Arizona 

ROY BLUNT, Missouri 

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 


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SUBCOMMITTEE ON COMMUNICATIONS, TECHNOLOGY, AND THE INTERNET

RICK BOUCHER, Virginia 

Chairman 

EDWARD J. MARKEY, Massachusetts 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

DIANA DEGETTE, Colorado 

MICHAEL F. DOYLE, Pennsylvania 

JAY INSLEE, Washington 

ANTHONY D. WEINER, New York 

G.K. BUTTERFIELD, North Carolina 

CHARLIE MELANCON, Louisiana 

BARON P. HILL, Indiana 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

CHRISTOPHER S. MURPHY, Connecticut 

ZACHARY T. SPACE, Ohio 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

JOHN D. DINGELL, Michigan (ex officio) 

FRED UPTON, Michigan 

Ranking Member 

CLIFF STEARNS, Florida 

NATHAN DEAL, Georgia 

JOHN SHIMKUS, Illinois 

GEORGE RADANOVICH, California 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE FERGUSON, New Jersey 


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C O N T E N T S 

Page 

Hon. Rick Boucher, a Representative in Congress from the Commonwealth 

of Virginia, opening statement ............................................................................ 1 

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

Hon. Cliff Stearns, a Representative in Congress from the State of Florida, 

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

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 7 

Prepared statement .......................................................................................... 9 

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

opening statement ................................................................................................ 11 

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

Hon. Parker Griffith, a Representative in Congress from the State of Alabama, opening statement .................................................................................... 12 

Hon. Edward J. Markey, a Representative in Congress from the Commonwealth of Massachusetts, opening statement .................................................... 13 

Hon. Robert E. Latta, a Representative in Congress from the State of Ohio, 

opening statement ................................................................................................ 13 

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

Hon. Anna G. Eshoo, a Representative in Congress from the State of California, opening statement .................................................................................... 17 

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

Tennessee, opening statement ............................................................................ 17 

Prepared statement .......................................................................................... 19 

Hon. Cliff Stearns, a Representative in Congress from the State of Florida, 

opening statement ................................................................................................ 20 

Hon. Lee Terry, a Representative in Congress from the State of Nebraska, 

opening statement ................................................................................................ 20 

Hon. G.K. Butterfield, a Representative in Congress from the State of North 

Carolina, opening statement ............................................................................... 21 

Hon. Peter Welch, a Representative in Congress from the State of Vermont, 

opening statement ................................................................................................ 22 

Hon. Kathy Castor, a Representative in Congress from the State of Florida, 

opening statement ................................................................................................ 22 

Hon. Bobby L. Rush, a Representative in Congress from the State of Illinois, 

opening statement ................................................................................................ 23 

WITNESSES

Sharon Gillett, Chief, Wireline Competition Bureau, Federal Communications 

Commission ........................................................................................................... 25 

Prepared statement .......................................................................................... 28 

David Villano, Assistant Administrator, Telecommunications Program, Rural 

Development, U.S. Department of Agriculture .................................................. 31 

Answers to submitted questions ...................................................................... 291 

Joe Garcia, Regional Vice President, National Congress of American Indians .. 32 

Prepared statement .......................................................................................... 35 

Answers to submitted questions ...................................................................... 297 

S. Derek Turner, Research Director, Free Press ................................................... 48 

Prepared statement .......................................................................................... 50 

Mark Dankberg, Chairman and CEO, ViaSat, Inc. .............................................. 63 

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

Answers to submitted questions ...................................................................... 306 

Austin Carroll, General Manager, Hopkinsville Electric System ........................ 89 

Prepared statement .......................................................................................... 91 


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VI 

Austin Carroll, General Manager, Hopkinsville Electric System—Continued 

Answers to submitted questions ...................................................................... 312 

Jeffrey A. Eisenach, Managing Director and Principal, Navigant Economics 

LLC ........................................................................................................................ 111

Prepared statement .......................................................................................... 113 

Answers to submitted questions ...................................................................... 315 

SUBMITTED MATERIALS FOR THE RECORD

Report entitled ‘‘The Broadband Availability Gap,’’ April 2010, by the Federal 

Communications Commission ............................................................................. 141 

Article entitled ‘‘The FCC’s Visible Hand,’’ March 21, 2010, in The Washington Post ............................................................................................................ 290 


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THE NATIONAL BROADBAND PLAN: DEPLOYING QUALITY BROADBAND SERVICES TO 

THE LAST MILE 

WEDNESDAY, APRIL 21, 2010 

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON COMMUNICATIONS, TECHNOLOGY, 

AND THE INTERNET, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:05 a.m., in Room 

2322 of the Rayburn House Office Building, Hon. Rick Boucher 

[Chairman of the Subcommittee] presiding. 

Present: Representatives Boucher, Markey, Rush, Eshoo, 

DeGette, Doyle, Inslee, Butterfield, Christensen, Castor, Space, 

Welch, Dingell, Waxman (ex officio), Stearns, Upton, Shimkus, 

Buyer, Terry, Blackburn, Griffith, and Latta. 

Staff present: Roger Sherman, Chief Counsel; Tim Powderly, 

Counsel; Amy Levine, Counsel; Shawn Chang, Counsel; Greg 

Guice, Counsel; Sarah Fisher, Special Assistant; Bruce Wolpe, Senior Advisor; Phil Barnett, Staff Director; Mitch Smiley, Special Assistant; Elizabeth Letter, Special Assistant; Neil Fried, Minority 

Counsel; Will Carty; Minority Professional Staff; Garrett Golding, 

Minority Legislative Analyst. 

OPENING STATEMENT OF HON. RICK BOUCHER, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH 

OF VIRGINIA 

Mr. BOUCHER. Good morning to everyone. We are conducting this 

morning the second in a series of hearings focusing on the National 

Broadband Plan, and I want to commend the members of the Federal Communications Commission and their staffs for the truly outstanding job that they have done in compiling this plan sorting 

through thousands of comments that have been received from the 

public and providing very thoughtful work and good recommendations to the Congress. The United States stands 16th today among 

developed nations in broadband usage and for the benefit of our national economy and for our national quality of life, we need to do 

better. 

In preparing the National Broadband Plan the Commission has 

made a major contribution to our effort to evaluate our national 

standing to a far higher number, and we are appreciate to the 

Commission for that work. Broadband in the 21st Century is as important as telephone service or electricity service were when they 


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were first introduced more than a century ago. Today’s hearing focuses on how best to deploy broadband to areas that are unserved 

and underserved so that all Americans, including those in the rural 

regions of our nation, may benefit from this truly essential infrastructure. We want to ensure that everyone has access to 

broadband and we also want to ensure that everyone has access at 

meaningful speeds and at truly affordable prices. 

The National Broadband Plan reports that 95 percent of American homes have access to terrestrial fixed broadband infrastructure capable of supporting actual download speeds of at least 4 

megabits per second, leaving approximately 7 million homes 

unserved. I have serious concerns about the accuracy of that number and the methodology that was employed in order to derive it. 

It is my understanding that for cable modem service the broadband 

team looked at maps of where every cable operator is authorized 

to provide service. The broadband team assumed that a cable operator should have built out to its entire service territory. It also assumes that each provider was using at least DOCSIS 2.0 technology, which would mean that every home within the service area 

could get broadband speeds of at least 4 megabits per second downstream and 1 megabit per second upstream. 

Unfortunately, not every cable operator has deployed service 

throughout its franchise area, and not every cable operator has upgraded to DOCSIS 2.0 technology. For DSL service offered by 

phone companies, the broadband team relied on broadband maps 

from states that have already completed those maps. The team calculated where homes should be able to receive DSL service of at 

least 4 megabits per second downstream, 1 megabit upstream 

based on where those maps indicated there is a broadband infrastructure in place. The team also estimated that homes within a 

certain number of feet of central offices should be able to receive 

broadband. The team then extrapolated those figures to the entire 

nation. 

Unfortunately, I think the experience is very different. In my 

own example with my constituency in Virginia the broadband map 

that was provided in my home state of Virginia has proven to be 

less than satisfactory as a genuine predictor of where broadband 

can be found. The map is based on data provided by the telephone 

companies and it over reports the availability of broadband in my 

district, and I am sure elsewhere. I frequently hear complaints 

from constituents who live in communities that the Virginia 

broadband map indicates are served, yet these constituents are persistently asking for broadband service because today they have 

none. 

To the extent that the team extrapolated data from the Virginia 

broadband map and others like it, I can’t, based on my experience, 

consider those projections to be reliable. I appreciate that Ms. Gillett will testify in her testimony today that the 95 percent figure 

is intended to be an estimate of homes that should have access to 

broadband based on what is estimated about where incumbent providers have deployed the infrastructure. It does not mean that 

someone in an area the broadband plan predicts would have 

broadband service could actually pick up a phone and call their 

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tant clarification and one that I hope all members will keep in 

mind as we develop policies that are based on the assumptions of 

broadband availability. 

As we will hear from other witnesses on today’s panel, there remain many areas of our nation without access to broadband or with 

access to broadband only at slow speeds and at high prices. It is 

far too soon to declare mission accomplished with respect to the 

goal of making broadband available to all Americans. I want to 

thank our witnesses for joining us this morning. We look forward 

to your testimony. And at this time, I am pleased to recognize the 

gentleman from Florida, Mr. Stearns. 

[The prepared statement of Mr. Boucher follows:] 


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OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA 

Mr. STEARNS. Good morning, and thank you, Mr. Chairman. 

First of all, Mr. Chairman, I would like to welcome Bob Latta from 

Ohio. He is on our committee and will recognize him and welcome 

him to this great subcommittee. His predecessor Bill Gilmore and 

I came in together, and he served on this committee too, so we are 

delighted to have you. I think all of us in this room and all of the 

folks on the committee would agree that there is tremendous benefits from broadband. Reaching 100 percent on the present 

broadband is a laudable goal. Most of us wonder what is the best 

way to do it, and I think a lot of us think that it can be done 

through private investment, much like we see either the iPhone or 

the iPad or the iTunes or the multiple of devices just pick up and 

everybody has them whether you are in rural or urban areas because the incentives are there. 

For the United States to achieve this ubiquitous broadband deployment, I believe the private sector will have to show the bulk 

of the financial burden, and our policies on this committee should 

reflect that. As you mentioned, according to the broadband plan, 

approximately 290 million Americans or 95 percent, as you mentioned, Mr. Chairman, the population have access to at least 4 

megabits per second broadband service while approximately 2/3 of 

all Americans, about 200 million people, subscribe to broadband. 

This is up from 8 million 10 years ago, so you can see that it is 

moving forward. All these numbers demonstrate our free market 

pro-investment approach to broadband that it is working. Even if 

the government took no action the broadband plan concludes that 

private sector investment will provide 90 percent of the country 

with access to peak download speeds of more than 50 megabits per 

second by the year 2013. Now if the past decade of broadband investment is any guide, the private sector will likely take us the rest 

of the way to the broadband plan goal of reaching 100 million 

households with 100 megabytes per second service by 2020 simply 

letting the private investment pursue its way. Although reaching that goal will cost approximately $359 million, 

the cable, telephone, and wireless industries have been investing 

$60 billion a year in broadband, suggesting we could hit the investment target within 6 years. That is $350 billion. The recent D.C. 

Circuit ruling that struck down the FCC attempt to regulate 

Comcast network management of internet congestion should further caution straying from our deregulatory approach. Even after 

the decision, the FCC still has plenty of explicit authority to implement the broadband plan that they put out. In rejecting the FCC’s 

argument, the D.C. Circuit explained ‘‘statements of congressional 

policy can help delineate the contours of statutory authority.’’ Congress issued such a policy statement in 1996 when it added Section 

230 to the Communications Act. 

My colleagues, that section 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 regulations.’’ So whether to 

revisit that legislative policy which the broadband plan data confirms has worked so well is a matter for Congress and not the 


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FCC’s position. This does not mean, of course, that the government 

has no role. If we are going to subsidize broadband deployment it 

makes sense to concentrate on the 5 percent of the population, 

about 7 million homes, that do not have access to broadband, not 

the 95 percent that already do. We can target the unserved homes 

with an FCC universal service program that has been significantly 

reformed perhaps along the lines outlined in the broadband plan. 

We can also use wireless and satellite services that might better 

reach those hard to serve places, including tribal lands. Government intervention is only appropriate, however, to target those 

homes that are otherwise uneconomic for the private sector to 

reach out and serve. To do otherwise would force the private sector 

to compete against the government or government-funded entities. 

Such skewing of market forces will only harm investment and innovation in the long run. What Congress and the FCC must do is not 

revert to failed regulatory ideas that were designed for old technologies in a monopoly ear marketplace. 

Imposing network neutrality, for example, forcing access to facilities and regulating rates are the surest way to deter the investment we need to reach the broadband plan’s goal. The benefit of 

quality of broadband, I think is obvious to all of us. It is important 

that all Americans, whether in a big city, a rural community or 

tribal land have access to this technology. That I agree. The question remains how do we get there? I don’t think we should let this 

opportunity pass us by. Mr. Chairman, I think there is a great opportunity with these witnesses, and I look forward to hearing their 

opening statements. Thank you. 

Mr. BOUCHER. Thank you very much, Mr. Stearns. The chairman 

of the Energy and Commerce Committee, the gentleman from California, Mr. Waxman, is recognized for 5 minutes. 

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. WAXMAN. Thank you very much, Mr. Chairman. Thank you 

for holding this hearing on deploying broadband service to 

unserved and underserved communities across the nation. Because 

broadband is critical to future economic growth and job creation 

every American must have the opportunity to access high quality, 

high speed broadband from a variety of providers. The plan provides a blueprint on how the public sector policies can promote deployment to both unserved and underserved communities. It also 

speaks to ways in which the private sector can act. By utilizing all 

the tools the public and private sectors have at their collective disposal, we could achieve a primary goal of the National Broadband 

Plan, 99 percent access to high speed broadband within 10 years. 

While there are a number of proposals in the plan, I would commend the FCC staff for their thoroughness, and I would like to 

take a moment to highlight a couple that I find to be promising. 

For example, the plan recognizes that substantial cost savings can 

occur from better planning and coordination among government resources and recommends that all federally-funded rights-of-way 

projects include a broadband conduit at the time of construction. 


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This proposal is similar to legislation introduced by Congresswoman Eshoo, of which I am a co-sponsor. 

Greater access to rights-of-way at reduced cost can help spur the 

deployment of advanced facilities, not only in urban areas but also 

deeper into rural areas. The plan also highlights specific ways in 

which the federal universal service system can be reformed, and I 

am very encouraged by these proposals. The obvious goal is to 

transform the fund to support broadband networks so that all 

Americans have access, and I am encouraged that the FCC is initiating the first of these proceedings in its open meeting that is occurring this morning. I am also encouraged that Chairman Boucher 

is working on draft legislation to help achieve this goal, and I am 

supportive of his efforts. 

The plan also recommends addressing the data roaming issue. 

Consumers will be well served by common sense reform in this 

area. And, finally, I would like to commend the FCC for putting 

forward a proposed time line of its implementation schedule for the 

many proposals in the plan. This is the first time the FCC has so 

clearly outlined its work schedule, and I think that this approach 

is consistent with the chairman’s view that the FCC should be as 

open and transparent as possible. Thank you again, Mr. Chairman, 

for holding this hearing, and I look forward to the testimony of our 

witnesses. 

[The prepared statement of Mr. Waxman follows:] 


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Mr. BOUCHER. Thank you very much, Chairman Waxman. The 

gentleman from Illinois, Mr. Shimkus, is recognized for 2 minutes. 

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

Mr. SHIMKUS. Thank you, Mr. Chairman. I appreciate this hearing. I appreciate the panel, and hopefully I will get a chance to sit 

in to a lot of the discussion. I am personally conflicted about the 

broadband plan. I will try to be a little more calm than I was when 

the FCC was sitting before us. And there are a couple of issues. 

Whether the number is 7 million or whether it is larger, the real 

issue is before we deploy we ought to map, and we didn’t do that, 

so we have the cart before the horse, so that is issue one. I have 

been talking numerous times about let us define what the goal is 

that we are trying to achieve and what speed is going to be the 

standard, whether it is 4, 100, whatever, let us get a definition so 

that we know what we are trying to achieve. 

We ought to roll out—government intervention is only appropriate when we want to target those homes that are otherwise uneconomic for the private sector to serve. I reject this argument that 

it is government’s role to provide a variety of providers, and what 

we see going on is with government taxpayer dollars, we are overbuilding in areas creating a competitive market against incumbent 

providers already when we have at a minimum 7 million people 

who don’t have access. So those of us who represent rural areas 

who may be on dial-up, the appropriate place for government 

money is like we do in the Universal Service Fund to use government help to roll out to areas that are not economic for an individual entity to do, not to overbuild and compete with other traditional providers right now. 

So we have a long way to go. We are wasting time and we are 

wasting money to get deployment out to rural America. So, Mr. 

Chairman, it is timely, and we will be watching this process as it 

moves forward. Thank you. 

Mr. BOUCHER. Thank you very much, Mr. Shimkus. The gentleman from Michigan, Mr. Dingell, Chairman Emeritus of the Energy and Commerce Committee, is recognized for 5 minutes. 

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. DINGELL. Mr. Chairman, I thank you for convening today’s 

hearing on the last mile broadband development. It is very important. I fully support the important cause of providing all Americans 

with access to broadband communications. All the same, we must 

ensure that such federal program implemented to do so is based on 

accurate date and grounded in appropriate statutes. There seems 

to be some confusion concerning the actual level of last mile 

broadband infrastructure deployment and adoption across the 

United States. I would remind my colleagues that deployment and 

adoption are not synonymous with one another, and welcome any 

clarification on this matter our witnesses can provide. As many of 

them have rightly noted, accurate data is invaluable to the proper 

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nism. It is also dispensable to proper administration by the agencies concerned. 

We must also ascertain whether existing statutes are adequate 

to the task of establishing new and functioning support mechanisms to ensure that all Americans have access to broadband communications. I note that the National Broadband Plan recommends 

broadening of the Universal Service Fund contribution base. I hope 

our witnesses, especially Ms. Gillett of the Federal Communications Commission, will provide the members of this subcommittee 

with their candid opinions concerning the extent to which the commission’s statutory authority currently permits this. Should it not, 

I again remind our witnesses that the Congress is the sole progenitor of the commission’s authorities and should be consulted if 

new powers are to be conferred or exercised. 

In closing, I would like to thank the witnesses for appearing before us this morning to allow the members of the subcommittee to 

avail themselves of the expertise of our witnesses. To our witnesses’ dismay, I am sure, I will submit my questions, many of 

them yes or no, for the record, and ask unanimous consent at this 

time, Mr. Chairman, that I be permitted so to do. I also look forward to continued debate on this matter and other matters related 

to the implementation of the National Broadband Plan. I thank you 

for the courtesy that you extended me this morning, Mr. Chairman. 

I commend you for the hearing, and I yield back the balance of my 

time. 

Mr. BOUCHER. Thank you very much, Chairman Dingell. The 

gentleman from Alabama, Mr. Griffith, is recognized for 2 minutes. 

OPENING STATEMENT OF HON. PARKER GRIFFITH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ALABAMA 

Mr. GRIFFITH. I would like to thank the chairman and ranking 

member for calling this hearing today and also thank all of the witnesses for your willingness to testify before this committee. Currently 95 percent of Americans have broadband access and only 5 

percent do not. We on this committee realize that this is an issue 

of unserved versus underserved. I am here today to advocate for 

deployment of broadband to he unserved areas of our country and 

assure that we properly qualify unserved and underserved. It is imperative that any policies we discuss foster competition. 

In today’s business market, access to broadband is vital from the 

boardroom to the farm, and everywhere in between. I believe that 

we have been moving in the right direction with the deployment of 

broadband. Free market principles and pro-investment policies 

have yielded 200 million subscribers, up from 8 million over just 

the last decade. Over the last 10 years private industry has invested over $500 billion in broadband deployment. That is a staggering number and one that confirms that those investments were 

vital to reaching the current 200 million subscribers. If we stay on 

this path and work together, I believe we can meet the goal of providing the remaining 100 million homes with access to broadband 

service by 2020. Again, I thank you for your time today, and I look 

forward to hearing your testimony. 

Mr. BOUCHER. Thank you, Mr. Griffith. The gentleman from 

Massachusetts, Mr. Markey, is recognized for 2 minutes. 


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

OF MASSACHUSETTS 

Mr. MARKEY. Thank you, Mr. Chairman. Thank you for having 

this very important hearing. Welcome, Bureau Chief Gillett. I have 

admired your work in Massachusetts over the years, and I am very 

proud to have you now take on this great national responsibility. 

As the lead House sponsor in 1996 of the E–Rate provision, I call 

it the E–Rate, I was going to call it the E–Rate but I didn’t think 

I could get away with it, so I just call it the E–Rate, it is important 

for us to recognize that the children, that adults without broadband 

should have access in schools and in libraries, but increasingly because according to the FCC 14 to 24 million Americans do not have 

broadband accessible to them at all and another 93 million Americans have chosen not to purchase broadband even if it is available 

to them, we need strategies that can ensure that broadband does 

reach them. 

And so this is a huge issue for us. The OECD has said that we 

have dropped to 15th in world rankings in broadband deployment, 

so what I think we have to do is relying upon this National 

Broadband Plan to have this discussion. We have to devise ways 

that we harness new advances in technologies, insist on administrative efficiencies inside of the programs in order to drive down 

costs and to create savings wherever possible, and we need to shift 

over time to a more rational, stable source of funding while embracing broadband as a service that all Americans should be entitled to. It will become the indispensable infrastructure for the 21st 

Century in our country and around the world. It will be a proxy 

for economic growth in all sectors, energy, health care, education, 

all parts of the American economy. 

If we want to be number 1 for the 4 percent of our population 

as opposed to the other 96 percent of the world, we just have to 

decide if broadband is going to be at the center of that national 

strategy. This hearing will go a long way towards helping us to establish a long-term plan. Thank you, Mr. Chairman. 

Mr. BOUCHER. Thank you very much, Mr. Markey. The chair 

would like to add its welcome also to the gentleman from Ohio, Mr. 

Latta, as a new member of our subcommittee. We look forward to 

working with you, and you are recognized for 2 minutes. 

OPENING STATEMENT OF HON. ROBERT E. LATTA, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO 

Mr. LATTA. Thank you very much, Mr. Chairman. It is an honor 

for me to be on this subcommittee. I look forward to working with 

you and the other members on the subcommittee. I represent one 

of the most rural areas in the State of Ohio, and I am keenly aware 

of the importance broadband deployment plays in the economic development and in the nexus that this axis has the job creation. I 

feel very strongly that the country’s free market private investment 

approach to broadband expansion has been very successful. It is 

also my understanding that according to the National Broadband 

Plan 95 percent of the population has at least 4 megabyte per second broadband service. I believe that the remaining 5 percent for 


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service should be spent on the unserved areas where areas do not 

have access to broadband. 

We need to carefully look at how to expand service to ensure that 

there is not an unfair advantage to one entity, especially in light 

of the fact that private industry has invested billions of their own 

capital to expand services. Additionally, I am concerned how the 

FCC will define competition with the structure of the plan. Furthermore, the plan has called for greater collection analysis of the 

competition data. This is a bit worrisome as companies are essentially being asked to hand over their proprietary data and potentially fuel competition to their services by the government or their 

private sector counterparts. 

There must be safeguards put in place and an assurance that the 

government does not get in the business of competing with this already hyper competitive industry. It is important that while serving to reach this remaining 5 percent of the unserved household, 

that jobs are indeed created. I am critical of increasing bureaucratic red tape through any government initiative when the free 

market can do better. We need to assure that any of the requirements are not detrimental to job creation in Ohio or across the 

country. Broadband expansion can help the economy by creating 

new jobs related to the deployment of necessary infrastructure, as 

well as by giving unemployed workers access to tools that will help 

them find and prepare for new jobs. 

It is my hope that the FCC does indeed focus on broadband deployment which will bring jobs and economic development to rural 

areas and not focus on policy or if the FCC has questionable authority. I want to thank the chairman again for this opportunity. 

I look forward to hearing the testimony from the witnesses. I yield 

back. 

[The prepared statement of Mr. Latta follows:] 


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Mr. BOUCHER. Thank you very much, Mr. Latta. The gentle lady 

from California, Ms. Eshoo, is recognized for 2 minutes. 

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

Ms. ESHOO. Thank you, Mr. Chairman, for scheduling this hearing to continue to explore options for deploying broadband in ways 

that all Americans, not just some, but all Americans will have access to it. The National Broadband Plan makes inclusion an essential priority with a goal of reaching, as we know, 100 million households with 100 megabits per second service by 2020. I think that 

this is an ambitious plan, and I think it is just what we need to 

do. We need to be ambitious given, as you stated earlier, our 16th 

position in the world. We can’t afford to leave some Americans in 

the dust while others move ahead with broadband access in a way 

that turns the underserved and the unserved regions of our nation 

into virtual reality ghost towns. 

I am pleased that the National Broadband Plan contains ideas 

already offered by members. I introduced one that would require 

broadband conduit to be installed for federal highway projects. It 

is the dig once concept, which is what I call it anyway, and I think 

it makes sense from the financial and administrative sense. We can 

guarantee the infrastructure that goes where our highway system 

goes and reap the cost savings of doing a 2 for 1 dig. And so I hope 

to see this move. I think it is smart. I think it makes sense. It is 

pragmatic, and I look forward to seeing it happen. 

Inclusion and access can’t be achieved without funding, and I 

think that we need to update the Universal Service Fund to recognize broadband as a primary communications tool. Certainly, Representative Matsui’s bill moves in that direction. I support it. Mr. 

Markey’s bill, which takes the E-Rate program to the next level, I 

am proud to support. So I think that we need to build in these 

pieces of legislation in order to keep moving ahead. We are only 

going to reach the last mile, in my view, with a unified sense of 

purpose. As I look out at the witnesses here today there is a diverse range of interest, and I am looking forward to hearing how 

you see us reaching and serving the last mile in a way that is inclusive and affordable. So thank you, Mr. Chairman, for continuing 

this series of hearings. They are most valuable, obviously, on the 

broadband plan, and I can’t wait for the implementation phase. I 

yield back. 

Mr. BOUCHER. Thank you very much, Ms. Eshoo. The gentle lady 

from the State of Tennessee, Ms. Blackburn, is recognized for 2 

minutes. 

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

Ms. BLACKBURN. Thank you, Mr. Chairman, and I thank you for 

the hearing and for the focus that we have on this issue. And I 

want to say welcome to all of you who are before us today. We are 

glad you are here. I will tell you if we had been doing our work 

in the manner in which we should have been, you would not have 


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to be here today. We do need to put our attention on the 7 million 

people that do not have access to broadband, and that should be 

the focus of our attention. But we should have gone about our mapping processes first and then we should have issued the definitions 

of what unserved and underserved were going to be. Instead, this 

committee after much discussion, decided that that would be booted to the FCC who then decided they would boot it on to others. 

So we need to look at where we are placing the ability to determine what this is. Now do local governments have a role to play 

in this? They do, but they don’t need to be competing with private 

companies. That is why we need to be looking at these definitions, 

and then making a determination how we go about with completing 

the rest of this broadband access but not driving up costs for the 

consumer. I am looking forward to hearing what you all have to 

say, and welcome to the committee. Mr. Chairman, I yield back. 

[The prepared statement of Ms. Blackburn follows:] 


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Mr. BOUCHER. Thank you very much, Ms. Blackburn. The gentle 

lady from the Virgin Islands, Ms. Christensen, is recognized for 2 

minutes. 

OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA 

Mrs. CHRISTENSEN. Thank you, Chairman Boucher, and Ranking 

Member Stearns for this second hearing on the National 

Broadband Plan. As a representative of a district that is second to 

last in broadband penetration the implementation of the last mile 

is very important to my constituents as it is to tribal areas and 

many communities of color who I am sure make up much of the 

14 to 24 million Americans to whom broadband is unavailable or 

the 93 million or more who are not using it. These communities are 

at a health, educational, and economic disadvantage, and so the optimal deployment of the last mile as well as the middle mile and 

efforts to increase adoption are critical if our communities are to 

thrive and our nation is to remain competitive. 

I think that the National Broadband Plan’s recommendation to 

expand universal service program to cover broadband and the expansion of the Community Connect program are a great start. I 

look forward to the discussions on these and other recommendations during this hearing, and while I recognize that this hearing 

is not specifically on BTOP or BIP they represent an immediate investment opportunity to the territories, many of which are long distances from the mainland and depend greatly on broadband deployment. To date only 2 grants were awarded to the territories in 

round one. It is my hope they will do better in round two because 

it is important that we get the funding to these areas. I would also 

like to welcome our witnesses and look forward to their testimony 

and the discussion on broadband funding and deployment today. 

Thank you. 

Mr. BOUCHER. Thank you, Ms. Christensen. The gentleman from 

Nebraska, Mr. Terry, is recognized for 2 minutes. 

OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEBRASKA 

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

and I look forward to the series of hearings that we will have on 

the National Broadband Plan. That said, I do hope that the actual 

last mile wired line and wireless providers will be able to testify 

in future hearings. They are doing an excellent job according to the 

plan, which states that approximately 290 million Americans, 95 

percent of the population, have access to at least 4 megabits per 

second broadband service. If we are going to meet the goals set out 

in the plan then it makes sense to have federal programs like the 

Universal Service Fund concentrate on the small 5 percent of the 

unserved population that do not have access to broadband. 

These homes are primarily in very rural areas in which it is otherwise uneconomic for the private sector to serve. As we have seen 

by the massive investments made over the last decade, the private 

sector is more than willing to provide service to the rest of the 

country. It should come as no surprise to anyone in this room when 

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vance a much-needed USF reform bill, and which the chairman 

and I have worked so hard on over the years. Again, I think you, 

Chairman Boucher, for holding this hearing and look forward to future hearings. I yield back the rest of my time. 

Mr. BOUCHER. Thank you very much, Mr. Terry. The gentleman 

from Pennsylvania, Mr. Doyle, is recognized for 2 minutes. 

Mr. DOYLE. Thank you, Mr. Chairman. I waive. 

Mr. BOUCHER. Thank you. The 2 minutes will be added to your 

time for questioning our witnesses. The gentleman from North 

Carolina, Mr. Butterfield, is recognized for 2 minutes. 

OPENING STATEMENT OF HON. G.K. BUTTERFIELD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH 

CAROLINA 

Mr. BUTTERFIELD. Thank you, Mr. Chairman, for holding this 

hearing today on deploying broadband to the last mile. While the 

majority of Americans enjoy access to a fast broadband connection 

there is a significant segment that does not, and so my comments 

today will be for those who do not have access to broadband. Those 

who fall into that category either use dial up or simply go without 

the technology that connects us to the internet. These unserved 

and underserved regions should be of the highest concern to those 

who are charged with fulfilling Congress’ intent of nationwide and 

universal broadband deployment and accessibility. I am concerned 

of the amount of BTOP and BIP funds that have been awarded to 

date. Out of the $7.2 billion appropriated to NTIA and RUS, only 

a little more than $2 billion has been awarded. 

With a tremendous need, particularly in rural areas like mine, 

more must be done to expeditiously award qualified applicants. 

More than a dozen applications came from my district, yet only 1 

statewide middle mile infrastructure project has been funded. That 

award will benefit my state by connecting anchor institutions, hospitals, and libraries, but will not benefit my constituents that still 

lack a home connection. The National Broadband Plan also recommends that municipalities lacking access to affordable 

broadband fill the void through a municipally-owned operator. This 

is already happening in a municipally-owned city in my district, 

Wilson, North Carolina, where Green Light, the city’s municipallyowned broadband, is providing fiber to home for every customer at 

an affordable cost. 

The city applied for round 1 of BTOP funds and was not funded 

and it does not qualify for BIP second round funding. Having invested $30 million of their own money, the city has built a successful world class system only to be denied federal assistance for its 

continued operation. Wilson is lucky to have been able to sustain 

themselves for so long, but other regions of the district simply go 

without access to the tools that we all take for granted. Mr. Chairman, my time has expired. I want to thank you for your leadership 

on this issue. I look forward to hearing from the witnesses. I yield 

back the balance of my time. 

Mr. BOUCHER. Thank you, Mr. Butterfield. The gentleman from 

Vermont, Mr. Welch, is recognized for 2 minutes. 


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OPENING STATEMENT OF HON. PETER WELCH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF VERMONT 

Mr. WELCH. Thank you very much, Mr. Chairman, and Ranking 

Member Stearns. Vermont is intimately familiar with the challenges of last mile broadband deployment. We have got close to 20 

percent of Vermonters currently lacking access to high speed 

broadband, and the majority of Vermont lacks access to state of the 

art communication tools like Wi-Fi and town centers and mobile 

television services, so we have got a long way to go. And, of course, 

in this day and age access to broadband is no longer a luxury, it 

is a necessity, and for Vermont and other states like Vermont to 

compete in the 21st Century, we have got to take greater strides 

towards achieving universal access, and to fail in this effort would 

be to fail large slots of rural America, including Vermont. 

So that is why I support the National Broadband Plan proposed 

reform of the Universal Service Fund and expansion of the Community Connect program. We have got to reach that goal of deploying broadband facilities capable of actual download speeds of 4 

megabits upload speeds of 1 megabits to 99 percent of the unserved 

population by 2020. I am hoping to learn more today. I appreciate 

you being here and all of the work that you are doing and look forward to getting from where we are to where we need to be as 

quickly as possible. And I yield back. 

Mr. BOUCHER. Thank you, Mr. Welch. The gentle lady from Florida, Ms. Castor, is recognized for 2 minutes. 

OPENING STATEMENT OF HON. KATHY CASTOR, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA 

Ms. CASTOR. Thank you, Chairman Boucher, for calling this 

hearing, and welcome to our witnesses. Since the Comcast 

BitTorrent case, many people have been wondering what is in store 

for the National Broadband Plan. The plan’s overarching mission 

is very important, and that is to bring the tremendous power of the 

internet to all Americans, rural or urban, rich or poor, young or 

old. So in my view the last mile is not just about geography. There 

are millions of Americans, many of them in well-served communities like mine, who simply do not have the resources to take advantage of the world at their fingertips. In addition, the Universal 

Service Fund has served many telephone users well over the years 

but it is time for an update, and the plan aims to reform the USF 

and bring it into the broadband age, and I am supportive of these 

efforts. 

Many of you have heard me mention before that Floridians over 

time have paid into the USF much more than we have received 

back and we need reform. I want to make sure that the funds are 

intended for broadband and adoption in the new versions of the 

USF are distributed more evenly across communities in the last 

mile in the truest sense of that phrase. I would also like to hear 

what the witnesses have to say about the FCC’s ability to reform 

the USF in the post-Comcast BitTorrent world. We need to figure 

out if the FCC has the authority it needs to make changes to how 

we pay into the USF and expand it to include broadband. 

Regulatory uncertainty is not good for business and it is not good 

for consumers, so now it is time for Congress and the FCC to dig 


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in and do what it takes to bring the real world infrastructure that 

gets us to the last mile. Thank you all, and I look forward to your 

testimony. I yield back. 

Mr. BOUCHER. Thank you, Ms. Castor. The gentleman from Illinois, Mr. Rush, is recognized for 2 minutes. 

OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Mr. RUSH. Thank you, Mr. Chairman. I want to thank the ranking member and say good morning and welcome to each one of our 

witnesses here today. I want to thank you for appearing to offer 

your views on the program as well as your recommendations on 

how to best deploy broadband to individuals and families in 

unserved and underserved areas. In 1989 there was a blockbuster 

movie produced and directed by Kevin Costner called the Field of 

Dreams, and Kevin Costner plays an Iowa corn farmer, Ray 

Kinsella, who hears voices that tell him to build—if he would build 

it, he would come or they would come. Going on blind faith and his 

interpretation of what those voices have commanded of him, Ray 

invests extraordinary measures of times and resources to construct 

a baseball diamond in his corn field. 

Nearly a year later, and following the jeers of neighbors and impending bankruptcy, his vision becomes manifest when the ghosts 

of Chicago White Sox, including the infamous Shoeless Joe Jackson, appear literally out of thin air to practice and play on that 

corn field diamond. The top leaders and management of communication companies have not only told us but are showing us time 

and time again that they are not like Ray Kinsella. Unlike Mr. 

Kinsella, they are not novices in business. Unlike Mr. Kinsella, 

these business leaders are driven by the prospects of generating 

hard cash assets and handsome returns for their shareholders. 

And, unfortunately, unlike Ray, some of these companies have lost 

touch with the vision of their own founders to be content with modest profits while erring on the side of consistently growing their 

networks through all economic cycles. 

Just a generation or two ago, a large percentage of these companies and even public utilities were owned by a wider basis of shareholders. Many of these shareholders held but a few shares of stock 

in a given company and were content to know that their investment would provide them with predictable income and stable dividends. These wide bases have strengthened increasingly over the 

years and some of these companies have been reorganized so as to 

avoid or to minimize their public interest obligation and duties 

under the law. They are now comprised of smaller and smaller 

groups of extremely wealthy individuals and giant financial institutions whose interest in expanding their networks are inseparable 

from what the last few sets of quarterly profits on these companies’ 

income statements show. Therein lies the rub, Mr. Chairman, and 

members of the subcommittee. How can we find that swing spot 

where network expansion and broadband deployment intersect 

with the motives of emerging and mature communications companies alike. 

And I will be listening intently to what the witnesses have to say 

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riod to hear how best Congress can promote the goal of the National Broadband Plan, deploying broadband facilities to 99 percent 

of the unserved population by the year 2020. We are in 2010 now. 

Ten years isn’t a lot of time. Let us start talking and start working 

and start making it happen. Thank you. I yield back the balance 

of my time. 

Mr. BOUCHER. Thank you very much, Mr. Rush. The gentleman 

from Washington State, Mr. Inslee, is recognized for 2 minutes. 

Mr. INSLEE. Thank you. I just want to note where the longest 

last mile is, which is in the tribal communities, and hope that we 

can discuss ways to advance finishing that longest last mile. We 

have got infrastructure challenges. We have got government relationship challenges. We have got some good progress with 57 tribes 

out in Washington. I think there are things we can do, and I hope 

we will talk about ways to get that done today. Thanks. 

Mr. BOUCHER. Thank you, Mr. Inslee. The gentle lady from Colorado, Ms. DeGette, is recognized for 2 minutes. 

Ms. DEGETTE. Mr. Chairman, these are obviously concerns that 

we share even in urban districts as I discussed at the last hearing. 

And with that, I will submit my opening statement and look forward to the testimony. 

Mr. BOUCHER. Thank you very much, Ms. DeGette. We will add 

2 minutes to your time for questioning our panel of witnesses. We 

turn now to our panel, and I want to welcome each of them. I will 

say just a brief word of introduction about each, and then we will 

be very pleased to hear from you. Sharon Gillett is the Chief of the 

Wireline Competition Bureau at the Federal Communications Commission, and was a participant in the construction of the National 

Broadband Plan. David Villano is the Assistant Administrator of 

the Telecommunications Program at Rural Development at the 

U.S. Department of Agriculture. Joe Garcia is the Regional Vice 

President for the National Congress of American Indians. Derek 

Turner is a Research Director for Free Press. Mark Dankberg is 

the Chairman and CEO of ViaSat, Inc. Austin Carroll is the General Manager of the Hopkinsville Electric System from Hopkinsville, Kentucky. And Jeffrey Eisenach is the Managing Director and 

Principal for Navigant Economics LLC. 

We welcome each of you this morning, and without objection your 

prepared written statements will be inserted in the record. We 

would welcome your oral summaries and ask that you try to keep 

those to approximately 5 minutes. Ms. Gillett, we are glad to have 

you here. Congratulations on the fine work with the broadband 

plan, and we look forward to hearing from you. 


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STATEMENTS OF SHARON GILLETT, CHIEF, WIRELINE COMPETITION BUREAU, FEDERAL COMMUNICATIONS COMMISSION; DAVID VILLANO, ASSISTANT ADMINISTRATOR, TELECOMMUNICATIONS PROGRAM, RURAL DEVELOPMENT, U.S. 

DEPARTMENT OF AGRICULTURE; JOE GARCIA, REGIONAL 

VICE PRESIDENT, NATIONAL CONGRESS OF AMERICAN INDIANS; S. DEREK TURNER, RESEARCH DIRECTOR, FREE PRESS; 

MARK DANKBERG, CHAIRMAN AND CEO, VIASAT, INC.; AUSTIN CARROLL, GENERAL MANAGER, HOPKINSVILLE ELECTRIC SYSTEM; JEFFREY A. EISENACH, MANAGING DIRECTOR 

& PRINCIPAL, NAVIGANT ECONOMICS LLC 

STATEMENT OF SHARON GILLETT 

Ms. GILLETT. Thank you, Chairman Boucher, Ranking Member 

Stearns, and members of the subcommittee for the opportunity to 

testify today about broadband deployment as described in the National Broadband Plan. I am also submitting a technical paper that 

the FCC is publishing on the topic, and I request that it be made 

part of the record. 

Mr. BOUCHER. Without objection. 

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

Ms. GILLETT. Thank you. As you know, the plan stems from a 

Congressional directive to ensure that all people in the U.S. have 

access to broadband capability. To meet that objective, the FCC 

needed to size the gap between current broadband deployment levels and the goal of deployment to everyone. Given the limited state 

of available data on broadband deployment, sizing the gap was not 

a simple task. It involved considerable effort to gather the best 

available data and incorporate it into a comprehensive model of the 

current status of broadband deployment. This model considers a 

housing unit to have access to broadband capability if it is close 

enough to today’s telephone or cable network infrastructure such 

that a service provider can deliver broadband at actual speed of 4 

megabits per second download and 1 megabit per second upload 

today. 

The model estimates that 95 percent of the housing units in the 

U.S. can be served from today’s infrastructure, meaning that about 

14 million Americans cannot be served. Just because a housing 

unit can be served, however, does not mean that it is. There is no 

guarantee that a provider makes a retail service available to every 

home that its network is capable of serving. As a result, the actual 

number of citizens who cannot purchase broadband service is likely 

higher than 14 million. Limitations in the model data sources also 

contribute to sensitivities in the 95 percent estimate. 

For example, we relied on public cable industry data, which estimates that 90 percent of housing units are reachable with cablebased broadband. This data attributes cable broadband availability 

to entire cable franchise areas if any part of the franchise area is 

served with two-way capability. This attribution is accurate in 

most, but not all, cases, and accordingly the 90 percent figure may 

be an overstatement. The plan’s estimate of an additional 5 percent 

of housing units that are reachable only through telephone-based 

broadband is similarly based on limited data. The model relied on 

data for a number of states as an input to a statistical regression 


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analysis that allowed us to adapt the conclusions from these states 

to the rest of the nation. 

And I will add that exactly because of the kinds of concerns 

raised by Chairman Boucher, we did not rely on Virginia data as 

one of the states. As is generally the case though with statistical 

extrapolation there is also estimates rather than exact figures. As 

a complement to the broadband infrastructure modeling effort, we 

also analyzed FCC broadband subscribership data recognizing that 

such analysis is an imperfect means of assessing broadband availability. This analysis suggests that 92 percent of Americans live in 

areas where broadband service is offered, meaning that as many as 

24 million Americans live in areas where broadband service is not 

offered. 

Based on these 2 methods of sizing the broadband deployment 

cap, we conclude that broadband is unavailable to approximately 

14 to 22 million Americans. The model developed for the plan also 

estimates the financial commitments needed to reach unserved 

homes and the likely resulting revenues. This financial modeling 

shows that for today’s unserved homes, which are largely located 

in low density rural areas. The private sector business case to 

reach them simply does not add up. While the market has done a 

great job of getting broadband to much of America, market incentives alone will not be enough to reach the homes that remain 

unserved today. Just as the current Universal Service Fund was instrumental in ensuring the availability of telephone service to over 

99 percent of Americans, so too will a financial commitment to universal broadband service be necessary to ensure that broadband 

availability surpasses 95 percent in the future. 

Two helpful developments should improve data on the unserved. 

First, as a result of the Broadband Data Improvement Act, states 

are now gathering data about broadband deployment and by next 

February this data will be integrated into a national broadband 

map. Second, later this year the FCC will propose revisions to its 

broadband data gathering methodology consistent with recommendations in the plan. We look forward to working with Congress, industry representatives, and public interest advocates to 

fashion a new regime of broadband data collection that will provide 

Congress and the FCC with the relevant data we need while respecting industry’s concerns regarding data that is legitimately 

competitively sensitive. 

Allow me to conclude by sharing with you that when I served as 

a state commissioner, lack of broadband availability was the top 

constituent complaint for legislators from rural districts, and now 

such complaints are the most frequent correspondence I receive 

from members of this august body. The addresses are all over the 

country but the issues are the same. In homes without broadband 

children are at an educational disadvantage. Parents are shut out 

from jobs that require online applications and no one can access 

critical government information and services online. If you live in 

one of those homes, it matters little to you whether broadband is 

available to 90, 92 or 95 percent of Americans. What matters most 

is that broadband is not available to 100 percent of the home that 

you live in. 


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Solving that problem lies at the heart of the National Broadband 

Plan and reflects the very core of the FCC’s mission in the 21st 

Century to work to make sure that America has world-leading high 

speed broadband networks. Thank you again for inviting me to testify and I will be happy to address any questions. 

[The prepared statement of Ms. Gillett follows:] 


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Mr. BOUCHER. Thank you very much, Ms. Gillett. Mr. Villano. 

STATEMENT OF DAVID VILLANO 

Mr. VILLANO. Thank you. Chairman Boucher, Ranking Member 

Stearns, members of the committee, thank you for the opportunity 

to discuss the Department of Agriculture’s broadband program, 

specifically USDA’s Community Connect Grant Program, administered by our Rural Utilities Service. We appreciate the work and 

support you and members of Congress have provided to help build 

a strong, dependable and affordable broadband infrastructure in 

rural areas. Rural development is truly committed to the future of 

rural communities. Throughout my 33-year career with rural development, I have worked in virtually all the programs, including 

business, housing, community facilities, and most recently our 

Telecommunications Program. 

My career began in the field and since coming to our national office in Washington, D.C., I have seen firsthand the tremendous impact that our investments made in rural communities. In my current position, I am responsible for all rural development telecommunication programs, and I can think of no program more fundamental to the future of rural America. The expansion of advance 

telecommunication network strengthens our nation’s economy and 

its growth. Yet, in our rural communities internet use trails that 

of urban areas. At RUS, we view modern broadband infrastructure 

investment and rural economic competitiveness as a fundamental 

building block of sustaining economic development. 

Communities lacking access to modern broadband service are at 

a severe disadvantage. During the past 60 years, RUS has provided 

nearly $19 billion in loans and grants to build communication infrastructure in rural communities across the United States. Since 

1995, all RUS financed telecommunication facilities have been 

broadband capable. Our broadband loan program created by the 

2002 Farm Bill has provided over $1.1 billion in loans to more than 

90 broadband projects in rural communities spanning 42 states. 

Our distance learning and telemedicine program, also part of the 

2002 Farm Bill, provides loans and grants for educational opportunities and health care services such as computer networks, telemedicine capabilities, electronic medical records, and interactive 

educational facilities to rural communities. 

To date, our distance learning and telemedicine program have funded nearly 1,000 projects in over 40 states totaling $400 million. 

In 2009, the American Recovery and Reinvestment Act provided an 

additional $2.5 billion for broadband loans and grants. The Recovery Act allows USDA to provide a flexible mix of loans, grants, and 

loan-grant combinations similar to our water and community facility programs, which will make more project in unserved areas feasible and eligible for funding. 

Our Community Connect grant program was created in 2002 to 

meet the needs of totally unserved areas. Community Connect provides grants to eligible applicants to establish broadband service on 

a community-oriented connectivity basis. Broadband service funded 

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vide broadband services in 197 unserved communities, including 

some of the lowest income, neediest, and often highest cost to serve 

areas in the nation. Twenty-five percent of them have gone to tribal areas. The demand for our Community Connect program has 

been considerable. Last year alone, RUS received over 200 applications requesting over $200 million for the $13 million that we had 

available. 

An excellent example of the impact of the Community Connect 

program is the grant awarded to Sacred Wind Communications. 

This $436,000 Community Connect grant made in 2005 funded 

broadband service for the community of Huerfano, New Mexico, on 

the Navajo reservation. Today, Navajos of all ages come to the center to use the computers to check their e-mail, perform searches, 

job hunt, do homework assignments, play educational games, apply 

to college, and to meet with others for social and e-commerce business purposes. In October of 2009 American Express announced 

that Sacred Wind Communications was voted the most aspiring 

small business in America in the company’s Shine a Light contest. 

This is but one example of how Community Connect serves a catalyst for sustainable broadband adoption in rural areas. 

There is no single solution to the complicated mission of bringing 

advanced telecommunication services to every citizen. Government 

incentives, cost support mechanisms, changes in technology, and 

private investment all play a role. The $98 million invested 

through our Community Connect program is just one tool in the 

toolbox to achieve the Administration and Congress’ broadband policy goals. As the most longstanding direct federal grant program to 

promote rural broadband Community Connect is worthy of further 

study to draw lessons learned, not only in terms of broadband deployment but in the impact on economic development, health care 

opportunities, education, and other key indicators of the vibrancy 

of local communities. These lessons can be applied to the analyst 

of much larger investments now being undertaken through the Recovery Act to promote broadband throughout the United States. 

Rural communities will always face challenges in competing economically but they are stronger today because or the partnership 

forged at USDA’s Rural Development. It is an honor and a privilege to work with you and our federal partners throughout the 

Obama Administration to make affordable broadband service widely available throughout rural America. Thank you again for inviting me here to testify. I will be glad to address any questions you 

may have. 

[The prepared statement of Mr. Villano was unavailable at the 

time of printing.] 

Mr. BOUCHER. Thank you very much, Mr. Villano. Mr. Garcia. 

STATEMENT OF JOE GARCIA 

Mr. GARCIA. Good morning. I am Joe Garcia, and I am the current chairman of the All Indian Pueblo Council in New Mexico, and 

also the vice president representing the National Congress of 

American Indians, also former president of the National Congress. 

Chairman Boucher, Ranking Member Stearns, and members of the 

committee, thank you for the opportunity to provide this testimony 

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dian country. Today, some 90 percent of Native Americans living 

in Indian country do not have affordable or reliable high speed access to the internet. The economic, cultural and human significance 

of that fact cannot be underestimated. Connecting Indian country 

with the world can reverse centuries of isolation and neglect. 

In the National Broadband Plan, however, Indian country was 

not an afterthought. Concepts such as a tribal-centric deployment 

models and core community institutions are now becoming part of 

the FCC’s vocabulary. The FCC now understands that carriers 

have often stopped at the borders of Indian country and why tribes 

often find themselves as the only ones willing to make the commitment to provide these services to their citizens. These lessons have 

taught us an important fact about telecom and Indian country. Deployment must be sustainable before it can ever hope to be profitable. 

The submission of the plan to Congress is only the beginning of 

this process. This morning, I would like to highlight 5 recommendations. Our written testimony also expands beyond the 

comments here today. First and foremost, the plan recommends 

that Congress establish a tribal broadband fund to bring services 

to tribal headquarters and other anchor institutions, as well as assisting tribes in deployment planning, infrastructure build out, feasibility studies, technical assistance, business plan development 

and implementation, digital literacy, and outreach. Only a new separate fund will ensure that broadband is actually deployed in Indian country. The existing BIP and the BTOP programs funded at $7.2 billion 

will not be sufficient to close the broadband availability gap. While 

a handful of tribal projects receive funding from the Recovery Act, 

it will take an additional $1.2 billion to $4.6 billion specifically targeted for the tribal broadband fund to begin to close the digital divide. Second, and equally important, is the creation of the FCC Office of Tribal Affairs. To be credible and effective, the FCC must 

give the office sufficient resources, authority, and jurisdiction over 

communication issues affecting Indian country. Congress must increase funding for the FCC’s Indian telecom initiatives so that it 

can genuinely develop and drive a tribal agenda. This new office 

should be an effective instrument of the FCC and voice for tribal 

nations in Washington. 

Third, the universal fund should be reformed with a special emphasis on the unique nature of Indian country. For instance, a library in Indian country may be different from what a library looks 

like elsewhere, but that is no reason to deny support. Indian 

schools need support not only for their classrooms but also for their 

dormitories where children need the internet to study. As sovereign 

nations, tribes need a seat at the table for ETC designations for 

USF support. In changing USF, however, Congress not inadvertently cut the only wire going into Indian country. The current analog telephone High Cost and Tribal Lifeline and Link-Up programs 

are vital to Indian Country and must not be negatively affected. To 

assist with this transition, we also urge Congress to establish a 

tribal seat on the USF Federal-State Joint Board. 

Fourth, tribes need spectrum, spectrum that is often in the 

hands of licensees that have not used it to bring service to Indian 


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country. The FCC should reclaim dormant spectrum and make it 

available to tribes who actually deliver services. This must be more 

than just unregulated or White Space spectrum. It must consider 

dormant licensed spectrum as well. Finally, we urge congressional 

support for the adoption of a Tribal Priority to address the many 

barriers to entry. The Tribal Priority that was recently adopted by 

the FCC for broadcast spectrum is well grounded in strong constitutional principles based on the political status of tribal nations 

as sovereign entities. 

A new tribal priority should be used with reclaim spectrum to 

ensure that it is actually used for broadband services to tribal 

lands but it should also be used by the FCC beyond spectrum to 

barriers across the commission’s rules. At this point, I would like 

to just say that at Ohkay Owingeh—Ohkay Owingeh is the Place 

of the Strong People. We live 25 miles from the state capital of 

New Mexico, Santa Fe. The Los Alamos National Lab, where I retired from, exists just 25 miles away, and yet our little community 

had no access to the internet. A phone company was there but it 

only brought DSL services, and my brother lived less than 1/8 mile 

away from where I lived. He had DSL. I didn’t have DSL. But we 

took that opportunity to say we need access. And so we went and 

did a proposal to USDA some years ago. We got funded, and now 

we have wireless service in our community thanks to our own efforts and to the funding from USDA. 

But that is really what life is about in this country is that if you 

live in the rural areas and remote areas that is where the non-access is the biggest culprit for America. While new congressional 

funding actions are essential, there will be a strong return on your 

investment by engaging tribal governments and community institutions, by taking a tribal-centric approach to deployment, by digging 

once and by sharing infrastructure efficiently. Federal funding will 

produce a bountiful return and will actually save money in the long 

run. In closing, there is one important benefit that I cannot fail to 

mention and that is the sense of empowerment that broadband can 

bring. The ability to shape one’s own future to provide a better 

world for new generations is an important part of what we mean 

by tribal sovereignty. 

The National Congress of American Indians looks forward to continuing our mutually beneficial relationship with the FCC and Congress as we all work to implement effectively the National 

Broadband Plan while finally moving Indian country to the forefront of technology. Thank you so much. 

[The prepared statement of Mr. Garcia follows:] 


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Mr. BOUCHER. Thank you, Mr. Garcia. Mr. Turner. 

STATEMENT OF S. DEREK TURNER 

Mr. TURNER. Chairman Boucher, Ranking Member Stearns, and 

members of the committee, I thank you for the opportunity to testify today on the important issue of the FCC’s National Broadband 

Plan. I am the research director for Free Press, a public interest 

organization dedicated to public education and consumer advocacy 

on communications policy. We have for years worked to ensure that 

the principles and goals in the Communications Act are translated 

through the public policy process into a reality for all Americans. 

Thus, we welcome the call for the FCC to produce a National 

Broadband Plan and we were very pleased that Congress requested 

the plan contain an evaluation of the status of broadband deployment. Good data is a requirement for good policy, and as Congress 

has recognized for too long policymakers have not had the right 

data to understand the problems in our broadband market. 

But as important as quality data is, it is equally important that 

the information be presented in a way where all the caveats, assumptions, and uncertainties are made extremely clear. Congress 

asked that the National Broadband Plan evaluate the status of 

broadband deployment and despite a valiant effort, I think that the 

information presented to Congress in the plan, particularly the way 

it is presented, overstates the actual availability of broadband service in America. In particular, the information presented in the plan 

serves to understate the magnitude of the underserved broadband 

problem, implying that high quality services are offered in most 

rural areas when we know that they probably are not. This is partly the result of some questionable assumptions that underlie the 

data but at a high level it is the result of an unfortunate presentation of the information that can be misleading. 

The National Broadband Plan reports that 95 percent of U.S. 

housing units have access to broadband infrastructure capable of 

supporting actual download speeds of at least 4 megabits per second and actual upload speeds of at least 1 megabit per second, a 

service quality threshold which is the plan’s national availability 

target. This finding is presented prominently in this map and the 

broadband plan, a figure with the title availability of 4 megabits 

per second capable broadband networks in the United States. Now 

when I hear the word availability or am told that something is 

available, I think that means that I could get the item or service 

because someone is offering it. But the plan’s 95 percent available 

4 megabit finding is not supported by data on what services are actually being offered. 

The finding is largely based on the assumption that where cable 

services are such infrastructure is capable of delivering broadband 

service at this quality, but this is like saying if I build a grocery 

store on top of a mountain that is served by a forest road, bread 

is therefore available in my store because that forest road gives me 

the capability of bringing bread there. But if I had no bread on the 

shelf or if the bread is stale the customers won’t much care that 

I have the capability of getting it there. The problems with this estimate only serve to highlight the fact that the FCC currently lacks 

adequate information on the actual state of broadband availability 


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despite years of public and congressional pleas for better data. This 

need not be the case. 

The commission has for nearly 2 years failed to act on its own 

proposal to collect broadband availability data and now despite the 

fact that the National Broadband Plan strongly recommends that 

the FCC finally gather this data, the commission has signaled its 

intent to delay the matter even further by starting another proceeding all the way at the end of this year. As I said at the start, 

good data is a requirement for good policy, but so too is a strong 

commitment to efficiency and good ideas in the face of entrenched 

interests. The National Broadband Plan does set out a plausible vision for modernizing the Universal Service Fund, one that Free 

Press generally supports. However, this USF transition plan still 

leaves in place many of the more problematic aspects of the existing subsidy system, including the lack of a determination of where 

subsidies are actually needed to keep rates at a quality and a reasonably comparable rate. 

Also, the plan proposed to bring unserved areas 2010 era technology but not until 2020. This raises concerns whether these networks will be scalable to reach future universal service goals. If we 

follow such a path, we may ultimately end up just replacing one 

form of the digital divide with another where urban Americans 

have world-class quality networks while rural America is stuck 

with second class access. In closing, as Congress moves forward 

with the oversight of the National Broadband Plan and with its 

own ideas on universal service reform it should be aware of all the 

caveats in the data. Policymakers need the right information to ensure our broadband infrastructure challenges are met in the most 

efficient manner possible. I thank you for your attention and look 

forward to your questions. 

[The prepared statement of Mr. Turner follows:] 


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Mr. BOUCHER. Thank you very much, Mr. Turner. Mr. Dankberg. 

STATEMENT OF MARK DANKBERG 

Mr. DANKBERG. Good morning, Chairman Boucher, Ranking 

Member Stearns, and the members of the committee. Thank you 

very much for the opportunity to present. I am Mark Dankberg. I 

am co-founder of ViaSat, Inc. It is a company I started in my house 

about 24 years ago. It has grown to have about 2,000 employees 

all around the country. And for the last 10 years, we have been 

very focused on bringing broadband to America by satellite. We are 

close to a billion dollar company and we provide this technology all 

around the world. We were investing about $1 billion starting 2 

years ago to do this, and I wanted to cite a famous American, Will 

Rogers, who, believe it or not, is a broadband expert. When Will 

Rogers said it is not the things that you don’t know that will hurt 

you. It is the things you think are so but—what you think is true 

but ain’t so—so let us go back. I am going to tell you 3 things that 

you think are so—that you think are true and ain’t so. 

One is that lack of availability of broadband is primarily a rural 

problem. I am going to show you evidence from our subscribers 

where they are that it is actually—there are more people in Ohio, 

Virginia, New York, California without broadband then there are 

in Wyoming and Montana. There are higher percentages in the 

rural states but more people in the developed states. Number 2, 

that we think it is good business to serve people who don’t have 

broadband available. That is what we are doing. We are investing 

in it. And, third, that satellite actually can provide a very good 

service. It is not a second rate service. So the first thing is this 

map. Here we show the State or Virginia. The green areas are 

areas that are mapped to have availability of one or more terrestrial broadband services. 

Yet, WildBlue, which has over 400,000 subscribers, more than 

half of our subscribers in the State of Virginia are in areas that 

are supposed to have broadband available. It is strong empirical 

evidence that shows exactly what we have been talking about that 

the availability of broadband does not extend to all people. These 

people—90 percent of our subscribers tell us that they can’t get terrestrial broadband, even those people that are in these areas that 

are green. Now this means that it is a much tougher problem. It 

is not a problem just in rural areas. It is a problem around cities. 

The next map shows Ohio, and you can see it is almost the same 

thing. The green areas, all the blue dots are subscribers who have 

gotten satellite because they can’t get terrestrial broadband even in 

those areas. 

So you can imagine that if we think we are going to try to serve 

all these unserved people, we would essentially be building out infrastructure throughout the State of Ohio, not just in the rural 

areas. So satellite is actually an excellent way to provide 

broadband to these scattered people, whether they are in rural 

areas or around metro areas. This next chart shows basically how 

people use the internet, and I wanted to make that point. See if 

we can move on to the next chart, please. It is a pie chart, and it 

shows data from Cisco Systems that shows what the applications 

are that people use on the internet, and you can see it is dominated 


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by 3 things, video, web and e-mail, and peer to peer. For those 

services, which make up 95 percent of internet access, satellite is 

actually excellent service. We also can provide gaming services. We 

can provide voice and video services. 

And to correct sort of misperceptions, I would like to show a 

quick 40-second clip. I wish we could demonstrate it here. But this 

is just 40 seconds slice of clip of an actual satellite internet session 

showing people doing voice-video communications and web browsing that I think will be really illuminating. If we could move it out, 

please. I think we might have to adjust the volume a little bit. Will 

you turn up the volume, please? 

[Video shown.] 

Mr. DANKBERG. The point being is it just looks like an internet 

session, and it is. It is just like any internet session that you would 

have on cable or fiber optics except that it is done over satellite. 

And the point that we are trying to make is that this is far, far 

more effective. The next slide just shows where people talk about 

thousands of dollars to build out or tens of thousands of dollars to 

build out services. Using satellite is basically $5 is the cost to make 

satellite available to any place in our coverage area. We provide 

service at $49 a month and if people elect service the service quality that you saw on that video clip, which we believe is very, very 

comparable to cable or terrestrial broadband would cost less than 

$1,000 to provision at the level that you saw in that video clip. 

We also make that available on a wholesale basis for less than 

half that $49 price to retailers, including DISH TV, DirecTV, the 

National Rural Telecom Cooperative, Quest, and AT&T. We think 

the FCC properly noted that this can be a good service. What they 

said is satellite with these next generation satellites such as the 

ones that we are offering can make service available to any American. All they question is whether this is a scalable solution. I want 

to point out it would take about 7 satellites, that is 7 next generation satellites to make that service available to 7 million subscribers anywhere in the United States. There are already 5 first 

generation satellites that are up. They are not as good as the one 

that we are launching now but they indicate the level of investment private industry has already made. Go to the next slide, 

please. There are 2 of these next generation satellites currently 

under construction. The others will be available 1 year from now 

and will make the level of service that you saw available to approximately 1 to 11⁄2 million people in our coverage area. And just 

by comparison there is 25 existing satellites just for satellite TV 

over the United States today. 

So the main 3 points I would like to make at the end is we do 

believe private industry can deal with this. If the government feels 

though that the subsidy should be used what we would say is that 

it should be technology neutral to let this very cost-effective technology be one of the alternatives. We recommend that it be competitive, that the way you compete is to provide equal service at 

the lowest cost and that the other important point is that the consumer should have a choice, that they shouldn’t be forced to get 

service from a particular subscriber because one company has been 

chosen as the designated entity in that area. And if you look at 

it—— 


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Mr. BOUCHER. Mr. Dankberg, you are well over your amount of 

time here. Can you just wrap up quickly, please? 

Mr. DANKBERG. I was just going to say the 30 million satellite 

homes that get TV in the U.S., nobody would think people would 

use satellite for TV. 

Mr. BOUCHER. Thank you very much, Mr. Dankberg. 

[The prepared statement of Mr. Dankberg follows:] 


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Mr. BOUCHER. Mr. Carroll. 

STATEMENT OF AUSTIN CARROLL 

Mr. CARROLL. Good morning, Chairman Boucher, Ranking Member Stearns, and members of the committee. Thank you for allowing me to be here. My name is Austin Carroll. I am general manager of Hopkinsville Electric System in Hopkinsville, Kentucky, 

and I am testifying today on behalf of the American Public Power 

Association where I serve on the board of directors and the Kentucky Municipal Utilities Association, as well as my position at 

Hopkinsville Electric System. APPA is a national service organization that represents the interests of more than 2,000 publiclyowned, not-for-profit electric utilities located in all states except 

Hawaii. Exhibit 1 in your materials is a map showing the location 

of the APPA members nationwide. Many of these utilities developed in communities that were literally left in the dark during the 

era when the United States was electrified as private sector electric 

companies pursued opportunities in larger population areas. 

State and local governments, therefore, undertook the effort to 

ensure that residents of their communities were served by their 

own power systems in recognition of the fact that electricity is critical to the economic development and educational opportunities and 

quality of life for its residents. Currently, over 70 percent of 

APPA’s members are communities with less than 10,000 population, and approximately 45 million Americans receive their electricity from public power systems. Many of the public power systems were established primarily as the large utilities were unwilling to serve smaller communities and rural areas, which were then 

viewed as unprofitable. In these cases, communities formed public 

power systems to do for themselves what the private sector was either unable or unwilling to do at a fair price. 

The same trend is occurring today in the area of broadband and 

advanced communications. Many public power systems are meeting 

the new Age demands of their communities by providing broadband 

services where such services are unavailable, inadequate or too expensive. These services, provided with high quality and affordable 

prices, are crucial to the economic success and quality of life of 

communities across the nation. Nationwide, 700 public power utilities provide broadband services to school districts, local governments, hospitals, and almost 200 provide internet services to the 

residents. Municipal utilities are nonprofit and do not provide dividends for stockholders. In Kentucky they pay wages that are comparable to that paid by the State of Kentucky. Many public power 

systems have secured loans or utilized municipal bonds to invest 

in infrastructure for broadband. Municipal utilities are locally 

owned and operated utilities that are governed by elected municipal councils or independent utility boards appointed by elected 

mayors. Thus, unlike large private sector broadband providers, municipalities’ sole focus is the needs of their own small territories, 

and they are responsive to their residents through the electoral 

process. 

It is not my purpose to criticize private sector telephone and 

cable companies’ broadband investment, deployment and pricing 

decisions, but rather to illustrate the differences between these 


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companies and municipal/public power utilities that deploy 

broadband services. This testimony focuses on broadband services 

provided by Kentucky municipalities, which I think will provide a 

particular useful example of the important role public power utilities have to play in making broadband available nationwide. And 

I have included a map of Kentucky so you can see the municipalities in Kentucky and the ones providing broadband services. 

In May of 1998, our community board of directors agreed to run 

fiber optic cable to our substations around town in order to monitor 

the substations for electric outage prevention. Then in ’99, we had 

ringed our city on the basis of ringing these substations with fiber 

optic infrastructure. At that time, broadband was not available in 

Hopkinsville. Recognizing the need for our community to participate in the global economy and have available all educational opportunities, HES elected to use our fiber infrastructure to provide 

broadband services to local businesses, industries, government entities and others needing high-speed communications. 

We formed a subsidiary, EnergyNet, to manage that and we keep 

separate books on the EnergyNet side as opposed to the electric 

side. Bandwidth at reasonable prices quickly became a popular entity in our community. Kentucky Derby Hosiery, an international 

sock company, was our first customer. And after that, city building, 

emergency operations center, fire stations, police stations were connected. All schools were connected as well, and by becoming a 

USAC-approved provider of E–Rate services, we were able to reimburse the school system 80 percent of its cost of connectivity so 

major businesses in town are now connected over our system. 

We have now also employed a mass network of radio transmissions across our city and that is our solution for the residential 

sector of Hopkinsville. We have continued to grow. We have built 

a network operations center that is a very hardened facility unlike 

anything else in our community, and we have several of our industries, hospital, and so forth, that locate their service there for security. Hopkinsville was initially handicapped because we didn’t have 

a point of presence for a long distance company, and so it was very 

expensive to try to get broadband at wholesale prices into our community. We have now constructed a line to Bowling Green, Kentucky, where there was a point of presence, and we dropped our 

megabit cost from $125 to $20, which that savings had been passed 

along to our consumers. 

But we now have a world-class system in Hopkinsville. We can 

provide broadband at prices that are competitive with major cities. 

I call them NFL cities. And we are hoping to be able to attract a 

large data center to our community because we have got all the resources to do so. So it is not only a service to our existing businesses and industry but as an economic tool as well. And I appreciate your allowing me to make these comments, and I look forward 

to your questions. 

[The prepared statement of Mr. Carroll follows:] 


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Mr. BOUCHER. Thank you, Mr. Carroll. Mr. Eisenach. 

STATEMENT OF JEFFREY EISENACH 

Mr. EISENACH. Mr. Boucher, Mr. Stearns, members of the subcommittee, thank you for having me here today. I will move quickly 

to stay on time. The first point I would like to make is that America’s current broadband policies are by and large succeeding. Availability is increasing, prices are falling, adoption is rising, and high 

rates of investment and innovation ensure that these trends will 

continue. Our policies can be improved and the National 

Broadband Plan contains some good ideas for doing so, but we 

could also make things worse, in particular, by imposing radical 

and unwarranted new regulations. I will circle back to these policy 

issues in a minute, but first let me describe what I consider to be 

some clear indicators that our broadband policies are producing 

good results. 

I have got some slides. We can go ahead and put the first one 

up. First, as the National Broadband Plan itself points out, approximately 19 out of 20 American households have access to one 

or more wireline providers today, and even more, all but about 2 

percent have access to one or more providers offering 3G wireless 

services. Second, and as the next slide shows, broadband prices are 

dropping and speeds are increasing. Most importantly, from the 

perspective of broadband adoption, the price per megabit for entry 

level plans has fallen by about 75 percent since 2004. I will pause 

for a second and emphasize the price of entry level broadband services per megabit in the United States has fallen by 74 percent in 

the last 5 years. That is a success story. 

Third, as the next slide shows, broadband adoption in the U.S. 

has reached nearly 70 percent of households and is continuing to 

expand, and as the next slide shows, and, importantly, adoption is 

rising most rapidly in the demographic groups where it has been 

lowest in the past. With adoption rates rising by 58 percent among 

those aged 65 or above, 40 percent for low income households, and 

21 percent for rural households between 2008 and 2009. Now these 

positive results, as the next slide suggests, are a function of the 

high levels of mainly private investment of America’s broadband infrastructure. Between 2008 and 2014 analysts estimate that private firms will invest over $450 billion in America’s communications infrastructure of which more than half, $244 billion, will be 

dedicated to broadband. 

In fact, as the next slide indicates, perhaps the strongest indicator that our broadband policies are working lies in the fact that 

investment and communications equipment has performed quite 

strongly even during the recent recession. Whereas private fixed investment overall is down nearly 25 percent since 2006, investment 

in communications equipment is up by nearly 10 percent. These 

data are important because they refute the story line some interest 

groups are pushing which is that our policies have failed and are 

in need of radical change in the form of massive new regulatory 

schemes known as Net Neutrality and mandatory unbundling. 

Complete discussion of these issues would take more time than we 

have here today, but let me be clear about this. Whatever else one 

thinks about these proposals, there is simply no question that they 


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would reduce investment and slow deployment of broadband infrastructure, which is what we are here talking about today. 

Now let me turn to the National Broadband Plan’s proposal for 

expanding broadband availability and reforming the universal service program, the thrust of which I strongly support. In particular, 

the commission is in my view absolutely right to focus universal 

service subsidies on areas where there is not in the absence of a 

subsidy a viable business case for private sector deployment. That 

is, areas which would otherwise be unserved. Further, the commission’s proposal to save about $15.5 billion by phasing out funding 

to competitive eligible telecommunications carriers and reducing 

funding to other high-cost programs are long overdue. 

I would also suggest the commission take a hard look at areas 

where cable firms offer unsubsidized voice service. If a cable company can offer telephone service at reasonable rates without a subsidy then a phone company ought to be able to do so as well. My 

own research suggests the commission could save another $6 billion to $10 billion over the next decade by simply eliminating subsidies to telephone companies where unsubsidized cable companies 

are providing service in the same areas. The commission also, in 

my view, needs to take out a sharper pencil when it comes to new 

spending. Its estimate of a $24 billion availability gap is based on 

2 assumptions that deserve a very hard look. First, this figure apparently assumes that 4G wireless deployment will not count as 

meeting broadband availability goals even though the commission 

says it believes 4G systems will cover 5 of the 7 million currently 

unserved housing units. 

Second, it also assumes that we will extend terrestrial broadband 

capacity to the 250,000 most costly to serve housing units in the 

U.S. for a total cost of $14 billion. That is an average of $56,000 

per housing unit. Is that something we are really going to do? It 

may be more than the houses are worth. When these factors are 

taken into account, it would appear that the broadband availability 

gap is far smaller and the opportunity for savings from current 

USF programs is far greater than the plan currently suggests. And 

this suggests in turn, to go to my final slide, that the plan’s current 

objective of merely not increasing the USF contribution factor, 

which as this slide shows, stands at an all time high of 15.3 percent, is not sufficiently ambitious. 

Let me close by complimenting the commission on its commitment to a data-driven fact-based approach to policy making and by 

urging it to continue that approach as it moves forward. As a start, 

I know we are all anxiously awaiting the release of the underlying 

analyses upon which the plan’s recommendations are based, and I 

gather some of those may have been released, at which point it 

may make sense to revisit much of what is being discussed here. 

Mr. Chairman, that completes my opening remarks. I look forward 

to your questions. 

[The prepared statement of Mr. Eisenach follows:] 


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Mr. BOUCHER. Thank you very much, Mr. Eisenach, and thanks 

to all of our witnesses for sharing their views with us here this 

morning. I was very pleased to note that the broadband plan endorses expanding the Community Connect program. And I was glad 

to hear you testify about that, Mr. Villano, during your presentation. Community Connect, I think, has done a terrific job in making broadband available in communities that for whatever reason 

the private sector has found it to be uneconomic to serve. Oftentimes these are remote communities where the cost of providing 

the middle mile connection in order to bring broadband into that 

community is prohibitive for the private sector when considering 

the number of subscribers who might be there to pay for those very 

large costs. 

And Community Connect has filled that gap very well. The prob- lem is the program, as useful as it is, only had $13 million to spend 

for the entire country in the course of the last year. I have seen 

the benefits of that program in my district. I was glad to hear Mr. 

Welch mention in his opening statement that the program has benefitted Vermont, and I know it has benefitted other countries. The 

broadband plan endorses it and says it ought to be expanded. Can 

you suggest, Mr. Villano, ways in which that could be done, and 

specifically let me begin by asking you if there are currently any 

statutory limitations on your ability to expand it apart from just 

having adequate appropriations? In other words, if more money 

were appropriated for this program could you spend that or would 

you have to have some amendment to your authorizing statute in 

order to enable you to do so? 

Mr. VILLANO. Thank you, Chairman Boucher. No, I don’t believe 

that there are any statutory impediments to increasing the funding 

for the program. A lot of what we are doing under the broadband 

initiative program through the Recovery Act serves a lot of these 

same unserved communities, so there isn’t anything statutorily 

that would do that. 

Mr. BOUCHER. And do you have the capability should additional 

appropriations be provided for Community Connect to spend those 

funds effectively? 

Mr. VILLANO. I definitely believe so, that we have that capability. We are delivering $21⁄2 billion through the Recovery Act right now. 

Once we get through those funds, we would be more than able to 

handle an increase in any appropriation under Community Connect. 

Mr. BOUCHER. Is the methodology of Community Connect in any 

manner assisting you in expending your broadband funds through 

the stimulus program? 

Mr. VILLANO. We have many tools in our toolbox. We have our 

existing broadband program, the Farm Bill program, our infrastructure program, so certainly many of the lessons that we 

learned in Community Connect were brought forward to the 

broadband initiatives program. And if we do receive increased appropriations for Community Connect, we would want to look at 

some of the requirements that we do have for the program. 

Mr. BOUCHER. Thank you very much. I appreciate that. I think 

there is a general consensus on the part of most of the witnesses 

today that the 95 percent estimate that the broadband plan makes 


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about the availability of broadband nationwide is somewhat optimistic, and that number in all likelihood is lower than that. What 

can we do to get better data than the commission had when it 

made that projection? Mr. Turner, you alluded to some possible approaches. Would you like to expand on that? 

Mr. TURNER. Certainly. Mr. Chairman, right now the FCC collects very, very detailed subscribership data broken down by speed 

tier, residential versus business from every single broadband provider in the country and they collect that twice a year, and they 

have been collecting such data, similar data, for almost a decade 

now. But during that process, they have failed to actually ask the 

service providers please define your service territory areas and tell 

us what quality services are available where. And this is a much 

easier effort than filing the subscribership data every 6 months because basically once they define their service territory they only 

need to go back and change that when their service territory 

changes. 

So in 2008 the FCC made a decision, a tentative decision, to collect such data but that was never acted upon, and it sat on the 

table for the past 2 years. And I think it was rather unfortunate 

because had they acted then, we might not have had to run the 

BTOP and BIP program in the dark the way we did. 

Mr. BOUCHER. And so what immediate steps would you recommend? 

Mr. TURNER. I believe the record is quite complete on this issue 

of availability data, and I think the commission should immediately move to an order on the issue and reform form 77 to require 

service providers to detail their availability in service quality areas. 

Mr. BOUCHER. Does anyone else have comment on that? Ms. Gillett, would you like to comment or would other witnesses care to 

comment on what kinds of approaches we might take in order to 

obtain better data on the extent of real availability? Mr. Garcia. 

Mr. GARCIA. Mr. Chairman, I think it is important to know if 

when we speak percentages we got to have a baseline number to 

get that percentage so when we say 95 percent, 90 percent, the 

three A’s that we all have to keep in mind are accessibility, affordability, and availability. They could really muddy up the statistics 

that we provide, but I think if we don’t know how many families, 

for instance, in our rural area, if we don’t know how many families 

could have that service and we only take data on the one that has 

service there is no way to gain a percentage and so the percentage 

number of serviced areas would be fictitious. So I think it is important to realize that the data gathering concept ought to be kind of 

re-evaluated and look at how can we best get the data. 

Mr. BOUCHER. All right. Thank you. Mr. Dankberg. 

Mr. DANKBERG. Yes. The other thing I would add is that one of 

the points in the FCC National Broadband Plan was that the actual speeds that were delivered are in many cases much lower than 

the advertised speeds, and in order to collect this data and make 

it useful it seems like the size of just the availability of broadband 

there ought to be some definition of what that service actually is 

besides just the advertised speed. 


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Mr. BOUCHER. All right. Thank you very much. My time has expired. The gentleman from Florida, Mr. Stearns, is recognized for 

5 minutes. 

Mr. STEARNS. Thank you very much, Mr. Chairman. Mr. 

Dankberg, I just appreciate your Will Rogers quote. I am reminded 

of another quote that Will Rogers said is be thankful that we are 

not getting all of the government we are paying for, which I think 

goes to my question to you. You are saying today that you don’t 

need a subsidy. You don’t think we need a subsidy to go ahead and 

push broadband. 

Mr. DANKBERG. Yes. I think there has been a point made when 

we talk about unserved and underserved, and there is a lack of definition, and the thing that we would really strongly advocate is 

that if there were a definition of what broadband is that I believe 

that satellite could qualify and that we made a business of providing that level of service, whatever it is to be defined, without 

government subsidies, yes. 

Mr. STEARNS. Ms. Gillett, you seemed to hedge a little bit on the 

figures here. The chairman mentioned that he thought the figures 

were too optimistic and I think in your opening statement you 

talked about that, in fact, the figures could be wrong, and I think 

you went ahead and talked about new figures which would indicate 

that it went from 7 million households being unserved to 12 million 

households. Is that correct? 

Ms. GILLETT. No, but almost. I wouldn’t say the figures are 

wrong. I would say the figures are all of necessity estimates because we don’t have perfect data about any of this and that is one 

of our goals is to improve the data about it. 

Mr. STEARNS. In your opening statement, though, I think you actually used some figures here that we wrote down. 

Ms. GILLETT. Yes. The figures are that we approached size in the 

gap from 2 directions. We tried 2 different methods to reach both 

imperfect types of data. One of them is a model and that tells us 

7 million households—— 

Mr. STEARNS. Not so much the process, I am just saying quoting 

your data I still get—— 

Ms. GILLETT. 14 to 24. 

Mr. STEARNS. Yes. I still get about 92 percent of Americans—— 

Ms. GILLETT. That is right. That was what I said in my testimony. 

Mr. STEARNS. So the bottom line is that is a pretty good figure 

still. 

Ms. GILLETT. It still means 24 million people without any 

broadband service. 

Mr. STEARNS. But I think Mr. Dankberg is saying that maybe 

some of these people are not in the rural areas, that they are in 

areas that are in urban areas, which is going to what his original 

statement was from Will Rogers. Another question for you is 

that—— 

Ms. GILLETT. I don’t disagree with him on that. 

Mr. STEARNS. OK. In my opening statement, I talked about in 

the year 2000 there were 8 million people that had broadband and 

10 years later there is 200 million. Isn’t it possible that, and this 

is a question, I am just going to go down all, is it possible based 


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upon those figures if we are going from 8 to 200 million that without any government doing anything in the next 10 years by the 

year 2020 that we will have complete universal ubiquitous 

broadband? Do you think that is true without any government? 

Just yes or no. 

Ms. GILLETT. No, I don’t. 

Mr. STEARNS. Do you, Mr. Villano? 

Mr. VILLANO. No, I don’t. 

Mr. STEARNS. And Mr. Garcia? 

Mr. GARCIA. No. 

Mr. TURNER. No. 

Mr. DANKBERG. I think it is possible, yes. I do think it is possible. 

Mr. STEARNS. Mr. Carroll? 

Mr. CARROLL. No. 

Mr. STEARNS. Mr. Eisenach? 

Mr. EISENACH. I think we are very close with being here today 

so the answer is yes. 

Mr. STEARNS. OK. So you folks are saying that the private market cannot go cover this ubiquitously without the government stepping in doing something except for Mr. Eisenach and Dankberg. 

Now I say to the rest of you, Mr. Dankberg meets a payroll, started 

out in his garage and built a business to $1 billion, so I would say 

if I put you guys all on a scale, I would say he would certainly have 

as much credibility as all of you on the other side of the scale just 

because he has done it, and I admire him for starting this company 

and getting to a billion dollars. And he showed us graphs that obviously there are some urban areas that don’t have it, and he is saying through his video that by and large we can do it. So I think 

we all have to be careful to be careful that perhaps the market can 

do it on its own. 

Mr. Dankberg, the 5 percent of homes that have no broadband 

access are likely in parts of the country that are high cost and low 

population density. So sometimes there is little incentive for private companies to deploy there so I am just being the devil’s advocate with you here. Does this mean that you could still get into 

those through satellite broadband in these areas, notwithstanding 

that most companies, telephone companies and cable companies 

won’t go in because it is so rural? 

Mr. DANKBERG. Yes, all the terrestrial technologies depend on 

the distance between homes and some central anchor point. The 

good thing about satellite communications is that it is distance insensitive so the real issue is just can you economically deliver 

enough bits, enough bandwidth, to those people and that is really 

a technology and economics problem. 

Mr. STEARNS. OK. Ms. Gillett, just if you could just answer yes 

or no. Does Section 230 make 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 and state regulations, isn’t that true, Section 230? 

Ms. GILLETT. I believe that is what the statute says, yes. 

Mr. STEARNS. And striking the FCC attempt to regulate network 

management, didn’t the D.C. court just explain that the statements 

of congressional policy can help delineate the contours of statutory 


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authority? I think the answer is yes to that. And so I just caution 

the FCC, and my point is to go ahead and get involved with either 

Net Neutrality or ancillary authority to augment it through regulation, and that is my only point. Thank you, Mr. Chairman. 

Mr. BOUCHER. Thank you very much, Mr. Stearns. The gentleman from Massachusetts, Mr. Markey, is recognized for 5 minutes. 

Mr. MARKEY. Thank you, Mr. Chairman. And again let me just 

restate that I do believe that the FCC has the authority to be able 

to act notwithstanding the court decision. Obviously from 1996 

after the Telecommunications Act passed all the way up until 

Chairman Powell, they implemented all of the provisions that created this broadband revolution. Remember, not one home in America had broadband in February of 1996 when the Telecommunications Act was signed. Not one home had it, so those changes in 

policy obviously had to be implemented by the FCC in order to create this new environment that makes all of this conversation even 

possible. So I do believe that the FCC has this authority and I ask 

them to explore the various means by which they can reach the 

point where they can implement the recommendations of the 

broadband plan that has been put together. 

What I would like to do is to focus on the Broadband Data Improvement Act that we passed out of this committee about 3 years 

ago. We based it upon Connect Kentucky. How is that plan going? 

How is the data collection going under that law, Ms. Gillett, and 

is it helpful to the FCC? 

Ms. GILLETT. Extremely. That program is administered by the 

NTIA, and they have given grants to all of the states at this point 

who are all collecting data according to a protocol that the FCC 

consulted. We provided technical consultation with the NTIA on 

that, and the data is coming in and the maps will start being assembled next month. 

Mr. MARKEY. Now the information as you can see it at this particular stage, does it indicate that there are gaps across the country 

and do you think that this mapping is going to help us to move beyond kind of anecdotal to actual factual basis for making new policies here in the country? 

Ms. GILLETT. I am totally certain that maps will be helpful and 

the data will be helpful. It is just coming to come in, so it is too 

early to say much about it, but I am sure it will be very helpful. 

Mr. MARKEY. So we will wind up with much more specificity than 

we have had in the past? 

Ms. GILLETT. Yes. 

Mr. MARKEY. And we will be able to deal with what the chairman is talking about in terms of finding out what actually is going 

on in Virginia and not have it be based upon a company just sending in information without it being corroborated. 

Ms. GILLETT. Well, there is an elaborate protocol for collecting 

the information, some of it from industry, but also one of the nice 

things about having states administer these grants is often there 

is a lot of local knowledge of people of what is actually going on 

in their territory and we are hopeful that that will help improve 

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Mr. MARKEY. OK, great. Now let me ask you about the E–Rate. 

Let me move over to that for a second. The FCC, you know, has 

been looking at expanding E–Rate, looking at after school hours as 

well, dealing with the reality of how children actually live their 

lives. Could you talk a little bit about that and the funding streams 

necessary to make sure that we actually deal with the real world 

2010 life of a child at school in America? 

Ms. GILLETT. Absolutely. One of the recommendations for the 

plan was to look at learning as a continuous process and not just 

confined to the school laws. In February the commission passed a 

waiver order and a proposed permanent rule change to allow community use of school E–Rate-funded facilities after hours, so that 

is one example. Another is that the plan discusses the use of wireless connectivity. Kindle and other kinds of electronic books require 

wireless connectivity. Students can take them home and that 

brings them broadband to the home where they may not otherwise 

have it, the many innovative uses we could make of the E–Rate 

program, and we are starting to implement exactly those proposals 

at this point. 

Mr. MARKEY. Within a very small number of years half the children in our country are going to be minorities and we just have to 

deal with the fact that we need a broadband plan for all those children to give them the portable skill set that they are going to need 

in order to compete for jobs in our economy as it unfolds, and unless we think of the E–Rate as a flexible tool to deal with this ever 

expanding need for kids to have the skill set then I think, you 

know, ultimately it will come back to really haunt our economy, so 

I thank you for that testimony. And, again, I just want to come 

back to this point. We just can’t have a national plan put together 

alone by a small handful of communications colossi. We need to ensure that we have a wide ranging entrepreneurial Darwinian paranoia-inducing internet world out there, broadband world, where everyone is given a shot here at providing the leadership for our 

country, and if we step aside and just allow a couple of companies 

to decide the pace at which new gadgets, new applications, who is 

going to have access to it, then we are going to be the losers because China, India, and other countries will just blow right past us 

with their plans to capture these sectors. 

We just should not be looking at the outsourcing of jobs as each 

year goes by because the skills are here because the technologies 

haven’t been developed here. That is our real opportunity here. 

That is what the National Broadband Plan gives us as a national 

challenge. When America has a plan, America wins. When we 

don’t, we lose. We have not had a plan. We have dropped from 2nd 

to 15th in the world. We just have to implement something and we 

cannot delay that implementation. Thank you, Mr. Chairman. 

Mr. BOUCHER. Thank you very much, Mr. Markey. The gentleman from Illinois, Mr. Shimkus, is recognized for 5 minutes. 

Mr. SHIMKUS. Thank you, Mr. Chairman. I really do love this 

committee. We are behind Lichtenstein. I just—to remind my people keep using that or Mordova or the Netherlands. So I will be patient. Can’t we get off this comparing us to Lichtenstein just for a 

minute? What the FCC did if you really want paranoid people competing to fill the broadband space, you need to deregulate. What 


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the FCC did based upon the telecom bill was deregulate. They 

didn’t re-regulate. That is what the FCC is trying to do now. What 

they want to do is since they failed in the courts now they want 

to re-regulate. They want to go back to the dial up phone so, anyway, you can see there is divergent opinions here on the committee, 

and I love Mr. Markey, and I learned all my interactions from him. 

I keep reminding him of that so when he disapproves of my line 

of questioning, I just learned it from the best, so it is a tribute to 

him. 

Mr. Turner, do you believe the analysis in the broadband plan 

that 95 percent of the country to have access to broadband is 

flawed? 

Mr. TURNER. If you define broadband as on or off meaning something or nothing, I think it is close to being correct. Ninety-two to 

95 percent have something. If you were talking about broadband at 

a level that they defined it at 4 megabits per second, I think it is 

overstating the level of availability. 

Mr. SHIMKUS. So you would say it is flawed in your second definition? 

Mr. TURNER. Yes, that is right. 

Mr. SHIMKUS. Do you believe the FCC currently lacks adequate 

information on the actual state of broadband availability? 

Mr. TURNER. Yes, I do. 

Mr. SHIMKUS. Do you think the FCC should collect better data 

on broadband deployment? 

Mr. TURNER. Yes, sir. 

Mr. SHIMKUS. Then shouldn’t we refrain from taking action on 

the broadband plan until the FCC has that data? 

Mr. TURNER. Well, sir, I think if you look at the calendar of items 

that will be proceeding the agency is certainly one that is thorough 

but it doesn’t move very quickly, so I think we should, yes, immediately move to start collecting that data as the proceedings and 

debate—— 

Mr. SHIMKUS. The roll out of the money. I mean this has been 

a constant debate that we have had since the stimulus money saying don’t roll out until you know the need. 

Mr. TURNER. Well, I agree, and I think if you look at the calendar they probably won’t be spending a single dollar of new USF 

money on the new broadband Connect America fund at least until 

2012. 

Mr. SHIMKUS. But that is USF money. There are millions of dollars going out the door right now, billions. 

Mr. TURNER. It is rather unfortunate that, as you said earlier, 

the cart was put before the horse in that case. 

Mr. SHIMKUS. Thank you. Mr. Villano, you do permit grant 

money to be used even if the majority of households covered by a 

project in non-rural areas and even if they already are served by 

one or more providers, is that correct? 

Mr. VILLANO. In our Community Connect program? 

Mr. SHIMKUS. Right. 

Mr. VILLANO. The area has to be totally rural and no one in that 

community—— 


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Mr. SHIMKUS. Yes, I know, only in the RUS program. We have 

several programs in the stimulus and I am talking about era and 

that is kind of the connection—— 

Mr. VILLANO. We require that the community be unserved or underserved and we send our field staff out there before any—— 

Mr. SHIMKUS. Well, let us talk about Hays, Kansas for a second. 

You understand that the Kansas broadband map shows that all but 

200 of the over 11,000 households in Hays already have broadband 

from one or more providers, including a small employee-owned 

business. Is that really a good use of government funds? 

Mr. VILLANO. In Hays, Kansas, we did provide a BIP award to 

a Kansas-based company—— 

Mr. SHIMKUS. You can stop there. Mr. Garcia, is that a good use 

of government funds if we are providing money to providers in an 

area that there is already competing broadband deployment when, 

you know, I like the way it was put, 10 percent of the Indian tribal 

areas have access which means 90 percent do not. Don’t you think 

it would be a better use of money to send that to areas where there 

is no coverage? 

Mr. GARCIA. I believe it would, but the complexities of how these 

proposals are applied for is what drives the funding and where the 

funding is—— 

Mr. SHIMKUS. Well, I disagree that there are very complex at all. 

I would say either a person has service or they don’t. Mr. Turner, 

you used the example of the grocery store. Either they have a defined broadband speed and they can get access to it or they don’t 

and shouldn’t we then going back to the first question know who 

has service before we send money to people who may have competing broadband applicants? 

Mr. TURNER. I think it is absolutely for the benefits of efficiency 

and the benefits of maximizing the money, it is important to have 

the right data. However, I understand what this body was trying 

to do in the context of stimulus, and I defer to the collaboration 

judgment of this body in making that decision. 

Mr. SHIMKUS. My time has expired, and that is where we disagree. I think we spent money and we put people who are already 

providing broadband, we empower competitors to compete against 

with government-subsidized dollars in the broadband field, and 

that is a failure of what we have done. And, Mr. Dankberg, I do 

support technicologically neutral in competition for services. 

Mr. BOUCHER. Thank you very much, Mr. Shimkus. The 

gentlelady from the Virgin Islands, Ms. Christensen, is recognized 

for 5 minutes. 

Ms. CHRISTENSEN. Thank you, Mr. Chairman. I would like to ask 

Ms. Gillett, having followed the Comcast case, do you anticipate 

that the Comcast decision of April 6 would affect your analysis of 

these universal service issues or the recommendations in the National Broadband Plan in any way, and if so, why and how? 

Ms. GILLETT. Our general counsel is assessing the impact of the 

Comcast decision on our authority to support broadband by USF. 

Ms. CHRISTENSEN. And, Mr. Villano, as you may have gleaned 

from my opening statement the U.S. Virgin Islands has not received grants under ARRA funds or broadband infrastructure. One 

of the things that I am concerned about is that the existing 


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landline telephone service provider by Telcos is considered the incumbent borrower and is a troubled entity. To what extent, if any, 

do you think this would affect other entities in the Virgin Islands 

from receiving ARRA funding, the fact that the incumbent is a 

problem? 

Mr. VILLANO. We just closed the second NOPA and there weren’t 

any applications from the Virgin Islands for a second round of 

funding. I don’t know the reasons why but there weren’t any applications for a second round of funding. 

Ms. CHRISTENSEN. That surprises me because I thought we had 

applied. OK. Well, also—— 

Mr. VILLANO. They could have applied under the NTA BTAL program for a middle mile project but there were no last mile projects 

under the BIP program at RUS. 

Ms. CHRISTENSEN. Just to continue on the concern that Mr. 

Shimkus was raising. Is it true that RUS does allow grant money 

to be used in non-rural areas regardless of whether that area includes a majority of households covered by a project and is already 

served by one of the major providers, and, if so, is there an appeals 

process in place that one of the companies that are already 

there—— 

Mr. VILLANO. The award in question was made under our first 

NOFA, and we have a definition of unserved and underserved 

areas. In that particular case, 95 percent of the service territory 

had not broadband service. It was just 5 percent of the geographic 

area that was covered by the loan grant combination that the applicant was awarded did some terrestrial based service. 

Ms. CHRISTENSEN. OK. So is there a process for appealing? 

Mr. VILLANO. No, there is no process for appeal. 

Ms. CHRISTENSEN. I guess I will ask you also again, Mr. Villano, 

will NTIA and RUS collaborate on broadband infrastructure 

awards and what effect will that have on applicants who have submitted multiple applications? 

Mr. VILLANO. Definitely, we will continue our collaboration. We 

have separate NOFAs at this time. I can tell you we are in constant communication and coordinating our efforts. Under the second NOFAs, RUS is focusing on last mile and NTIA is focusing on 

middle mile, but we are working very closely together to make sure 

that we get the best bang for our buck. 

Ms. CHRISTENSEN. So you are saying then that it won’t have any 

effect on applicants that have submitted multiple applications. It 

will be coordinated in some way? 

Mr. VILLANO. Under our first NOFA, we allowed for joint applications and it did complicate the process for some applicants. That 

is why we went with separate NOFAs and separate application 

processes go round, so we will look to make sure that there aren’t 

any overlaps. If they are proposing to find a project and we are in 

a particular area, we want to make sure that we get the money to 

the most areas. 

Ms. CHRISTENSEN. Thank you, Mr. Chairman. I yield back. 

Mr. BOUCHER. Thank you, Ms. Christensen. The gentleman, Mr. 

Buyer, is not here. The gentleman from Alabama, Mr. Griffith, is 

recognized for 5 minutes. 


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Mr. GRIFFITH. Thank you, Mr. Chairman. The FCC, as it rolls 

out the National Broadband Plan in an attempt to deploy to the remaining 5 percent, are we concerned about adoption or how we are 

going to measure adoption rates? Is that a problem or is that a concern that we have? 

Ms. GILLETT. Adoption is very important. It is a very central part 

of the plan as to take steps that increase the adoption of 

broadband. I would say that our data on adoption is actually better 

than our data on availability because that is what we collect is 

subscribership data, and we are now publishing ranges of adoption 

data in our semi-annual reports. 

Mr. GRIFFITH. Thank you. One other question. As we look at the 

FCC’s recommendation for deployment for national broadband, has 

the exemption for the electric cooperatives from FCC pole attachment regulations been considered? 

Ms. GILLETT. I am sorry. Was it in the National Broadband Plan, 

was that issue based? 

Mr. GRIFFITH. Right. 

Ms. GILLETT. Yes, it was raised in the National Broadband Plan 

that poles are an essential—access to poles is essential for deploying broadband and there isn’t a uniform national framework, and 

that is a congressional question for Congress to consider. 

Mr. GRIFFITH. Are we suggesting that we will continue with that 

exemption for the—— 

Ms. GILLETT. It is currently part of the statute so Section 224, 

that is how it is set up that there are separate frameworks for how 

those are regulated, and that would be up to Congress to decide if 

that is the right framework to continue or not. 

Mr. GRIFFITH. So that is really a question for me. Thank you 

very much. OK. Mr. Villano, the second round of broadband initiative program allocates $100 million to satellite projects to provide 

broadband services to unserved areas. Most U.S. satellites have a 

national footprint. How is RUS determining what is an unserved 

satellite area? 

Mr. VILLANO. We will be posting maps of the service areas that 

we fund and NTIA funds under the broadband initiative and the 

BTOP program, and the satellite component, we have an RFP that 

will be published later this month that will make that money available. We are dividing the country into 8 regions and we will let 

competition dictate how we award those funds, but those would be 

areas that have no broadband service and not be able to receiver 

service under the Recovery Act. 

Mr. GRIFFITH. In light of some of the data or some of the comments that we have heard today about what we believe is true and 

what is actually true in unserved areas are we reviewing what we 

think is true and what is actually true? 

Mr. VILLANO. I can tell you for every award that we have made 

under our broadband initiative program, we send actual RUS staff 

out to the field to verify the information that was provided by the 

applicant, and we also post all the maps of the proposed service 

territories so incumbent service providers can comment on that 

whether they do provide service. We look at the comments. We look 

at the application. We send feet on the ground to ensure that those 

areas meet the definitions of the NOFA. 


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Mr. GRIFFITH. OK. Thank you. Mr. Dankberg, I understand that 

satellite broadband services offer an opportunity to reach U.S. consumers in otherwise unserved areas. When the FCC imposes conditions on license transfer applications that limit the business models 

of satellite operators, does that make it more difficult or less difficult to raise money to continue satellite services? 

Mr. DANKBERG. The only thing I can talk about is our experience, 

and we have had fantastic support from the FCC in approving our 

licenses and being innovative in spectrum and in assuming and approving a transfer of licenses when required so it has not really 

been a concern. The FCC from our perspective has been very supportive, sir. 

Mr. GRIFFITH. Thank you, Mr. Chairman. 

Mr. BOUCHER. Thank you, Mr. Griffith. The gentleman from 

Pennsylvania, Mr. Doyle, is recognized for 7 minutes. 

Mr. DOYLE. Thank you, Mr. Chairman. The residents and small 

businesses in my district in Pittsburgh have contributed to the tens 

of billions of dollars worth of subsidies to support telephone service 

in rural areas and for low income people. In 2010 these dollars are 

still being used for telephones, not broadband. Now the FCC has 

outlined a Universal Service Fund reform in the National 

Broadband Plan, and I would like to just start with Mr. Garcia and 

work down through the end of the panel. Number 1, do you support 

that plan, what you like about it, and how you would improve it, 

and if each could just do that briefly, I would appreciate it. Mr. 

Garcia. 

Mr. GARCIA. We support the fact that the universal service has 

to be reformed but we also caution that the services that are part 

of that plan right now not be restricted or diminished but there has 

got to be more accountability in terms of why—that fund has been 

around for a long time and so why do we still have a lot of areas 

that have not benefitted from that very fact, and so we need to employ that a little bit harder and be more deliberate in how that 

service funds are used for that, so we don’t want to diminish what 

is there, but in addition to what we just testified upon, we need 

to build on those opportunities so we need to keep that though. 

Mr. DOYLE. Thank you. Mr. Turner. 

Mr. TURNER. We are generally supportive of the framework certainly of a transition. We think it is time to modernize the fund. 

We do have some concerns about what is going to happen during 

the transition, particularly issues that Dr. Eisenach has raised that 

we do have areas where there are unsubsidized providers, either 

cable or wireless companies that are competing against the subsidized telephone provider, and that may not be the best use for 

our resources. We are also concerned that even some subsidized 

providers themselves where no other un-subsidized providers exist 

have already deployed broadband and could be self-sustaining if all 

their revenue streams are taken into account but today only the 

regulated streams are taken into account while the recovery and 

the cost of their full infrastructure, so we are concerned that the 

FCC should address some of those as we do the transition. 

Mr. DOYLE. Thanks. Mr. Dankberg. 

Mr. DANKBERG. I think the major issue that we have is the artifacts of where unserved people are in a broadband environment is 


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much different than where unserved people are in a voice environment. We have networks that were built for voice. You can support 

long loop lines. That leaves by definition, that is what you seen on 

the map, people who are well served by voice that are not served 

by broadband. And so the notion that you can segregate the areas 

of served and unserved people like you can with voice, I think is 

not a good starting point for building policy. 

Mr. DOYLE. Mr. Carroll? 

Mr. CARROLL. The American Public Power Association doesn’t 

have a position on that but from my position at Hopkinsville Electric System, I think broadband could be expanded by using those 

funds. I think we need to ensure that the different entities out 

there that provide services have access to those funds universally 

and not just the telephone company. 

Mr. DOYLE. Dr. Eisenach? 

Mr. EISENACH. I would just say 2 things. I think the plan doesn’t 

go far enough fast enough as described. Talking about saving $15 

billion out of 45 or so over the course of a decade implies that $30 

billion during that period of time is still going to get spent on what 

we are spending money on now. My second point would be I think 

the commission has known for a decade and so has most people in 

Congress that this is a failed program. This docket was initiated— 

the docket number under which all this is considered is 9645. It 

was opened in 1996 and has been going on since with 250,000 or 

so final comments. The commission has tried heroically half a 

dozen times at least to reform it and it has failed. So my point to 

this committee would be if you want that money going to 

broadband you ought to keep a very close eye on the commission’s 

success or failure in implementing these reforms as proposed. 

Mr. DOYLE. Thank you. Ms. Gillett, I have heard some concerns 

that the Universal Service Fund reform would mean that some people’s phones would be turned off. Is that the case, and if it is not 

the case would you state why it is or why it isn’t? 

Ms. GILLETT. It is not the case and it would not be the case because the plan’s recommendation is that the funding should be 

shifted from voice only networks to networks that provide both 

broadband and high quality voice. 

Mr. DOYLE. OK. I think that is important to get out. Mr. 

Dankberg, in light of what you said to Mr. Stearns, Mr. Villano 

from the Rural Utility Service has set aside $100 million for satellite broadband. I assume your company won’t be taking a cent of 

that money. You are not interested in any of that money? 

Mr. DANKBERG. If there is money to be made in subsidies then 

we will use it. I think we will use it far more efficiently. 

Mr. DOYLE. OK. So you would take some government assistance? 

It sounded like you told Mr. Stearns that you weren’t interested in 

that and you didn’t need it. 

Mr. DANKBERG. I am just from a free enterprise perspective if I 

am competing with other carriers who are subsidized, am I supposed to compete on an unsubsidized basis with companies that are 

given thousands of dollars per home served? I don’t know how to 

respond to that. 

Mr. DOYLE. I am not asking you to. I just thought that is what 

you told Mr. Stearns and I just wanted to get clarification on it 


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that if there is money there you will take it. And maybe just finally 

since I still have a minute and 30 seconds in the remaining time, 

you heard what Ms. Gillett said about whether or not this Universal Service Fund reform would result in people losing their telephones or not, does anybody have any further comments on that, 

and generally I take it you all support reform. You just think it 

needs to go a little quicker and a little further than it is going right 

now. Is that accurate? OK. All right. Well, I think I have asked everything I want to, Mr. Chairman. Thanks. 

Mr. BOUCHER. Thank you very much, Mr. Doyle. The gentlelady 

from Tennessee, Ms. Blackburn, is recognized for 5 minutes. 

Ms. BLACKBURN. Thank you, Mr. Chairman. I want to thank all 

of you for your patience with us today. Mr. Turner, I want to be 

sure that I understood you to say that you did think it was unfortunate that we had put the cart before the horse when it came to 

not doing the mapping and not doing our definitions. Did I understand that right? Yes or no is sufficient. 

Mr. TURNER. Yes. 

Ms. BLACKBURN. OK. Thank you for that. And, Mr. Garcia, I appreciate that you appreciate the fact that the fund has been around 

for a long time but the money doesn’t seem to get out very quickly. 

I think that is the frustration whenever you see government step 

in to what the private sector has done. And, Mr. Chairman, I want 

to ask unanimous consent to enter for the record an editorial from 

the Washington Post that indicates that heavy regulation is unnecessary in light of the broadband plan’s analysis that 95 percent of 

the country has access to broadband, and we have gone from 8 million broadband subscribers to 200 million in the last 10 years. 

Mr. BOUCHER. Without objection, that will be made a part of the 

record. 

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

Ms. BLACKBURN. Thank you, Mr. Chairman. Dr. Eisenach, my 

question is to you. Doesn’t this suggest that our deregulatory approach is working and that we should focus any government effort 

just on the 5 percent or the 7 million homes that are in an area 

that does not receive the private sector access to the broadband 

services? 

Mr. EISENACH. Absolutely. 

Ms. BLACKBURN. And I appreciate your answer on that. I also 

had another question I wanted to ask you. When we look at the 

issues of Network Neutrality, unbundling, compelled wholesaling, 

rate regulation, is there any economic validity to the arguments 

that these issues, Network Neutrality, unbundling, compelled 

wholesaling, would encourage broadband deployment to the last 

mile and wouldn’t regulating broadband just chill the investment 

innovation that we have seen over the past 10 years that has led 

to 200 million homes being connected? 

Mr. EISENACH. In 2 respects, and the first respect is a matter of 

economics. These issues have been very fully studied. Last week, 

I was one of 21 economists, very broad-based group, former CAB 

chairman Alfred Kahn among us, filing comments with the Federal 

Communications Commission specifically on the plan of the Net 

Neutrality and PRM, and our conclusion, simply put, is that the 

economic evidence simply does not support those proposed rules 


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and indeed that those proposed rules, if adopted, would reduce innovation, reduce investment, reduce deployment in the way that we 

are talking about here today. The same set of data, I think, or the 

same economic facts are there on the issue of unbundling, and, indeed, there is a lot of evidence in the FCC’s National Broadband 

Plan—— 

Ms. BLACKBURN. If I can ask one additional question. I guess the 

same would apply to the reclassification? 

Mr. EISENACH. Well, absolutely, because the reclassification is 

simply a precursor and would be seen in the marketplace as a precursor to imposing this sort of heavy-handed regulation. The second 

issue is the commission has laid down a very ambitious agenda. As 

I implied earlier, it will be interesting to see how well it does keeping to the schedule that it has laid out. If it were to embark on 

these major new rulemakings, already in the middle of one of them 

on Net Neutrality, on reclassification, unbundling, and so forth, I 

simply question whether or not universal service won’t once again 

as it has for 15 years fall to the back of the pack in terms of priority, and we will end up sitting here a decade from now saying 

why are we still spending now $8 billion of high cost subsidized 

telephone service. 

Ms. BLACKBURN. Thank you. I appreciate that. Ms. Gillett, I have 

got just a few minutes left, but I want to go back to something. Mr. 

Markey said when we have a plan, we win, when we don’t, we lose. 

And we all believe that, but we think we got the cart before the 

horse on this one. It looks like there are many on the panel that 

agree with that. And so we do have concerns about how you all will 

go about as you assess the data that you say is now beginning to 

come in, and you are saying you think you are going to have sufficient data to address what you term the broadband gap and by 

early next year. So as you do this, how are you going to look at 

that and address this gap but make certain that existing consumers are not going to see their rates go up, that they are not 

going to see additional taxes, additional fees, that they are not 

going to see their rates go up because one of the concerns we hear 

is that they are concerned that if you all get involved in this, then 

consumers who like the plan they have got right now, they are 

going to see their rates elevated. So what is your plan to address 

that? 

Ms. GILLETT. A couple of things. First of all, the premise of the 

plan is that the universal service stays at the size it is so the burden would not go up on consumers. And, secondly, about the data 

point, between the BDIA map and the better data that the FCC is 

proposing to collect by the time, as Mr. Turner says, by the time 

we are able to implement these—I just received word that the first 

proceeding on the universal service reform was just adopted by the 

commission this morning, so we are on our way doing that, but by 

the time we get new rules in place and new money flowing the new 

data will be in and available for use. 

Ms. BLACKBURN. OK. I am out of time. Yield back. 

Mr. BOUCHER. Thank you, Ms. Blackburn. The gentleman from 

Illinois, Mr. Rush, is recognized for 5 minutes. 

Mr. RUSH. Thank you, Mr. Chairman. My question is for Mr. 

Villano. Mr. Villano, last year Senator Menendez and I sent a letVerDate Mar 15 2010 23:06 Jan 10, 2013 Jkt 076566 PO 00000 Frm 00140 Fmt 6633 Sfmt 6633 E:\HR\OC\A566.XXX A566

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ter to your agency and also to the NTIA expressing concerns about 

the number and the amount of stimulus grants that have been 

awarded to small and minority applicants in your initial round of 

decision. I would like to know what you have done to improve those 

numbers. What percentage of total awards to date have been made 

to these types of applicants, and are there any additional improvements on the table in terms of increasing the number of approved 

applicants? 

Mr. VILLANO. Thank you for the question. We did take those concerns very seriously when we developed our second NOFA. I think 

if you read the second NOFA, you will see that we tripled the number of points that we afford to socially disadvantaged businesses 

and their applications. We also award non-socially disadvantaged 

businesses extra points if they provide lower cost service to socially 

disadvantaged businesses in the service areas. Do we publish the 

NOFAs? We did 10 workshops. We had planned to do 10 workshops. One of them was shut down because of the snowstorms we 

had here in Washington. But we did 9 outreach and training sessions throughout the country, and at all those sessions we had special outreach sessions for minority and native applicants for the 

program. In NOFA 2, about 8 percent of the applications that we 

received under the BIP program are from socially disadvantaged 

businesses. 

Mr. RUSH. Can you quantify the number of grants? 

Mr. VILLANO. Under our second NOFA which just closed on—— 

Mr. RUSH. The first one and the second one. 

Mr. VILLANO. Under our first NOFA, we made 68 awards and 

one of those awards was to a socially disadvantaged business that 

was Revada Sea Lion up in Alaska. Under NOFA 2, we have 61 

applications from socially disadvantaged businesses. 

Mr. RUSH. Those have been approved. All right. And are you satisfied with the level of applicants and the process and the level of 

outcome in terms of your productivity? 

Mr. VILLANO. We are pleased with the results under NOFA 2. 

We have a total of 776 applications for $11 billion in funding. We 

have a little over $2 billion available this round, and we are in the 

process of reviewing those applications and hope to have awards 

out this summer. 

Mr. RUSH. Thank you, Mr. Chairman. Yield back. 

Mr. BOUCHER. Thank you very much, Mr. Rush. The gentleman 

from Washington State, Mr. Inslee, is recognized for 5 minutes. 

Mr. INSLEE. Thank you. Ms. Gillett, could you respond to Mr. 

Garcia’s suggestions about improving the relationship, the government relationship, to tribes in this context and how that might 

work and how we can make it work? 

Ms. GILLETT. Certainly. The plan, as you know, makes many recommendations, including a number that Mr. Garcia spoke about, 

including, for example, the Office of Tribal Affairs at the FCC, a 

seat on the USAC board, and so forth, and we look forward to implementing those and would be happy to—our Consumer and Governmental Affairs Bureau will be implementing those recommendations, and I would be happy to have them get back to you with further information about how that is proceeding. And we also recently made public our implementation schedule, which has the 


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dates and quarters of addressing a number of those recommendations on it. 

Mr. INSLEE. Well, that is encouraging, and if we can help you at 

all, let us know. We appreciate that. 

Ms. GILLETT. Thank you. 

Mr. INSLEE. We think that is very important. Mr. Turner, I wanted to ask you about FCC authority in light of this case that came 

down. The FCC has identified several areas that could be impacted 

of this that people may not think of including cyber security efforts, 

universal service reform, access for disabled Americans, and consumer privacy. There is a whole list of things that could be affected. If the FCC does nothing in response to this decision, what 

will happen to the FCC’s ability to advance those policy goals? 

Mr. TURNER. It is casting serious doubt. I think if you look at the 

statute and look at how the statute was developed, Congress at the 

time clearly treated and wanted to treat the wires that bring us 

these services differently from the services themselves, and this 

was the heart of 230B, hands-off approach to the internet services, 

but a light regulatory touch where needed on the wires. And I have 

a lot of trust in the deliberative wisdom of Congress on the shelf 

life of these laws because they are based on principles like universal service, nondiscrimination interconnection, competition, and 

reasoned deregulation. The path Congress gave the FCC for the 

regulation was Section 10. Chairman Powell chose to do a different 

path through the re-definition process, and I think, you know, in 

the words of Justice Scalia, this was sort of a Mobius Strip type 

of reasoning that ignored the statute. 

I think Chairman Powell thought he could stand up all the other 

principles of interconnection, universal service, non-discrimination, 

disability access, all of that on this ancillary authority theory, and 

the court case has shown that that is not going to be able to be 

the case, so the move towards reclassification doesn’t have to be 

seen as a radical move. It simply will be a move that puts the 

FCC’s regulatory framework back in harmony with the law, and I 

guarantee you it will come with some type of heavy forbearance on 

all the rules that are intended to apply to monopoly telephone networks. They certainly will not be applied to broadband networks. 

And we must remember that today the enterprise broadband 

market that serves the biggest businesses in the country is currently regulated under Title 2 and that is one of the most competitive markets and they are not screaming for deregulation and there 

is heavy investment going on there. 

Mr. EISENACH. If I could just jump in very quickly and say at 

least with respect to the Net Neutrality regulations that are proposed the non-discrimination provisions are not less restrictive on 

broadband than what was put in place on telephone networks in 

the past. They are more restrictive. The non-discrimination provisions that were in place on telephone networks in the past permitted just as reasonable discrimination. The proposed Net Neutrality regulations explicitly reject that approach and say there will 

be no discrimination of any kind. To suggest that the private sector 

could have any confidence that the regulations that would be imposed under a Title 2 classification are less restrictive than what 


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had been imposed in the past is just violated by the proposed rules 

we have in front of us today. 

Mr. INSLEE. Well, I just point out that I think it is even a dicier 

gamble to have any confidence that if we don’t do something about 

Net Neutrality there won’t be marketplace efforts to restrict access 

to content, and I think it is clear we need action on here. And I 

appreciate Mr. Turner’s views in this regard. Thank you. 

Mr. BOUCHER. Thank you, Mr. Inslee. The gentleman from Ohio, 

Mr. Space, is recognized for 5 minutes. 

Mr. SPACE. Thank you, Mr. Chairman. This map is a map of the 

State of Ohio, and, as you can see, in the southwestern corner, 

which is the green area which would indicate the unserved area 

pursuant to the work done by Connect Ohio, which is modeled on 

Connect Kentucky, and I have a lot of faith in the work that they 

have done in trying to decide or determine just where access to 

broadband exists and where it doesn’t exist. And the effect that 

that is having on the people of southeastern Ohio is significant. If 

you look at the unemployment rates in these counties, 5 of them 

are above 15 percent, 1 above 18 percent right now. That represents the unemployment rate doesn’t even factor in the tens of 

thousands of people that are fully employed but are working in 

poverty. 

This is a significant problem that hampers economic development. It limits our already limited access to health care, education. 

We see the role of broadband and its integration in health care delivery, educational delivery systems as in its infancy right now 

going nowhere but up, and it longer it takes for us to obtain this 

access the farther behind we are going to fall. That also happens 

to correspond almost identically with my congressional district. 

And we are working hard to see what we can do to provide access 

to this very important technology. And one of the questions I have 

for the panel, and I am going to ask a number of you specifically 

to just give, if you can, because our time is limited, a 2 or 3-sentence response to this question. Ms. Gillett, I am going to ask you 

first. What is it that we can do, Congress can do, to facilitate extension of that last mile to maybe it is 5 percent of the population, 

maybe 7 percent, I don’t know, but I know that percentage is a lot 

bigger in areas like this, what can we do as a Congress to facilitate 

the extension of that last mile to those people who don’t have any 

access right now? 

Ms. GILLETT. I would suggest 3 things. First, would be to work 

with us on the universal service reform so that we can target the 

funds to the places that are unserved. It is a complicated system, 

as Mr. Eisenach mentioned. Reform has been tried many times. 

There is lots of people in the current system so it is complicated, 

and we would appreciate your support with that. Second is we propose to do it in the plan with no additional funds but the plan does 

also pose an option for Congress to consider an appropriation which 

could help make it go faster. And the third thing is I think your 

point about you got the data, you know where these places are. 

That is great. The cooperation of industry in making sure we have 

accurate availability data is key. 

Mr. SPACE. Thank you. Mr. Villano. 


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Mr. VILLANO. Certainly. I would suggest that anybody that you 

have that is looking for service in those areas would contact their 

field representative to determine if they could apply for one of our 

programs. Under the broadband initiative program we made 4 

awards in the State of Ohio under NOFA 1. Under NOFA 2, we 

have 21 pending applications for $193 million. I hope that some of 

those are in your district. 

Mr. SPACE. They are. 

Mr. VILLANO. And that they will filter their way up to the top. 

But it would be most important for applicants to contact RUS and 

the Rural Development state office to see which programs that we 

have that may be of assistance to those communities. 

Mr. SPACE. Thank you. Mr. Eisenach, I want to ask you for 

maybe your perspective on how we bridge that last mile in places 

like this. 

Mr. EISENACH. First of all, I think doing something is important. 

I don’t think it is going to entirely solve itself. I do think that satellite service is my earlier answer to the question where will we be 

in 10 years. I do think that satellite for a lot of purposes is going 

to solve a lot of people’s problems. I don’t think it is going to solve 

the high capacity issue in terms of what you want in a hospital or 

what you want in a government office and areas like that. What 

works? What I have seen work is what is working in Virginia, a 

state where I have spent a lot of time looking closely and I know 

is working in other places around the country, and that is looking 

at local solutions. So what we have in the State of Virginia, something called the Mid-Atlantic Broadband Council, I have been involved with that, the Southwestern Virginia Technology Council. 

The chairman has been intensely involved with that. 

And what those local groups are able to go is pull together businesses, government, public non-governmental organizations, and 

solve problems. These are not problems of rocket science. These are 

problems of digging a ditch and putting some fiber in or putting up 

a tower, and often those problems just take the business community getting together with funding, with funding, but often it is a 

question of people getting together and saying we need to put a 

tower up here. Let us get it done. 

Mr. SPACE. Sure. And the problem, however, is in areas like this 

the local community governments and many of the businesses are 

struggling to survive, and they don’t have the means. 

Mr. EISENACH. I am for funding those efforts. Just to be clear, 

those efforts in Virginia have been funded by a tobacco fund, and 

I think the RUS has been active in funding those efforts. Those are 

good efforts. Those efforts ought to be funded in my view. 

Mr. SPACE. I know I am over time, but the chairman is busy and 

not paying attention to my time. Mr. Chairman, may I have just 

1 more minute? 

Mr. BOUCHER. Yes, sir. Go ahead, Mr. Space. 

Mr. SPACE. Mr. Dankberg, the issue has to do with satellite 

availability in areas like this, and the problem as I see that is the 

capacity in the cost and the quality don’t—you testified that you 

feel they are comparable, but as we move forward it is all about 

speed and it is all about quality and capacity, and I question 

whether or not the technology is there for satellite. 


tkelley on DSK3SPTVN1PROD with 
139 

Mr. DANKBERG. I understand that. I am an engineer. We just designed a new satellite that has 20 times the capacity of the best 

satellite ever. I think it is a question of economics. And what we 

would say just set us a target. If you set a target of 5 megabits, 

10 megabits, we will figure out what the economics are. We can deliver 5, 10, 15, 20. Set a number that you would like and then have 

a competition, and if we can’t meet that number we are happy to 

see it go somewhere else. 

Mr. SPACE. Thank you, Mr. Dankberg. My time has expired. 

Mr. BOUCHER. Mr. Space, if you would yield to me just a second 

the balance of your time which will be extended as much as is necessary. I wonder, Mr. Dankberg, if you would make a project of 

what the retail cost per customer is going to be for that new high 

capacity satellite that you intend to launch. 

Mr. DANKBERG. I think one of the main points that was made 

was the price of broadband coming down. Our new satellite, we will 

offer—we probably are going to offer plans just like we do now, 

which are $50, $60 or $80. We will increase the speeds that we 

offer by a factor of 4, and the amount of congestion, which is really 

the reason that people perceive delay, will go enormously. 

Mr. BOUCHER. So if you can afford $50, $60 or $80, that is fine. 

If you are among that category of individuals who can’t, it becomes 

a problem. 

Mr. DANKBERG. What we would say is we are completely fine 

with the idea of using subsidies to reduce prices for people who 

can’t afford it. We are absolutely OK with that. That can absolutely 

apply to satellite, and we proposed to the RUS a satellite system 

that would make life line broadband service available at $8 per 

month wholesale at 768 kilobits a second. All we want to do is have 

an opportunity to compete at whatever speed, and if subsidies are 

used, we just want to compete to provide service to all of Ohio for 

the same price that might serve one small village at whatever level 

of service is specified. 

Mr. BOUCHER. OK. Thank you very much, Mr. Dankberg. Mr. 

Stearns, I will just recognize you. Mr. Space’s time has expired. 

Mr. STEARNS. Thank you, Mr. Chairman. I just want to ask, 

what speed would that be? You say 4 times. What would that speed 

be? 

Mr. DANKBERG. The speeds for our new satellite, we expect to 

offer 2, 4, and 8 megabits per second as the speeds for our service 

at those retail prices. Our wholesale prices are about half of that. 

The retailers are the ones that mark it up by about a factor of 2. 

Mr. BOUCHER. Thank you. Mr. Dankberg. Let me say thank you 

to each of our witnesses today. We appreciate very much your taking this time and sharing your insights with us. I am going to leave 

the record of this hearing open for approximately 3 weeks during 

which period of time there probably will be some written questions 

propounded to you by the members of the subcommittee. When you 

receive those questions, I hope you will respond promptly, and we 

will make your responses part of the record of this hearing. And 

the gentleman from Florida is recognized. 

Mr. STEARNS. Just to ask unanimous consent for all members’ 

statements to be included in the record. 


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Mr. BOUCHER. Without objection. With that, this hearing is adjourned with the thanks of the subcommittee. 

[Whereupon, at 12:38 p.m., the Subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 


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