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[Senate Hearing 106-1097]
[From the U.S. Government Publishing Office]

 
NOMINATION OF SUSAN NESS, TO BE A MEMBER OF THE FEDERAL COMMUNICATIONS 
                               COMMISSION
=======================================================================

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 22, 2000

                               __________

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

                       U. S. GOVERNMENT PRINTING OFFICE
78-813                          WASHINGTON : 2000
___________________________________________________________________________
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                     JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana                DANIEL K. INOUYE, Hawaii
SLADE GORTON, Washington             JOHN D. ROCKEFELLER IV, West 
TRENT LOTT, Mississippi                  Virginia
KAY BAILEY HUTCHISON, Texas          JOHN F. KERRY, Massachusetts
OLYMPIA J. SNOWE, Maine              JOHN B. BREAUX, Louisiana
JOHN ASHCROFT, Missouri              RICHARD H. BRYAN, Nevada
BILL FRIST, Tennessee                BYRON L. DORGAN, North Dakota
SPENCER ABRAHAM, Michigan            RON WYDEN, Oregon
SAM BROWNBACK, Kansas                MAX CLELAND, Georgia
                  Mark Buse, Republican Staff Director
            Martha P. Allbright, Republican General Counsel
               Kevin D. Kayes, Democratic Staff Director
                  Moses Boyd, Democratic Chief Counsel

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 22, 2000...................................     1
Statement of Senator Burns.......................................     1
    Prepared statement...........................................     1
Statement of Senator Dorgan......................................    19
Statement of Senator Hollings....................................     2
    Prepared statement...........................................     2
Statement of Senator Inouye......................................     7
Statement of Senator Rockefeller.................................     5
Statement of Senator Snowe.......................................    26
    Prepared statement...........................................    27

                               Witnesses

Mikulski, Hon. Barbara A., U.S. Senator from Maryland............     4
    Prepared statement...........................................     5
Ness, Hon. Susan, Commissioner, Federal Communications Commission     7
    Prepared statement...........................................     8
    Biographical information.....................................     9
Sarbanes, Hon. Paul S., U.S. Senator from Maryland...............     3

                                Appendix

Response to written questions submitted by Hon. Sam Brownback to:
    Susan Ness...................................................    35
Response to written questions submitted by Hon. Conrad Burns to:
    Susan Ness...................................................    40
Response to written questions submitted by Hon. Max Cleland to:
    Susan Ness...................................................    43
Response to written questions submitted by Hon. Trent Lott to:
    Susan Ness...................................................    45
Response to written questions submitted by Hon. John McCain to:
    Susan Ness...................................................    45

NOMINATION OF SUSAN NESS, TO BE A MEMBER OF THE FEDERAL COMMUNICATIONS 
                               COMMISSION

                              ----------                              

                       WEDNESDAY, MARCH 22, 2000

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:30 a.m. in room 
SR-253, Russell Senate Office Building, Hon. Conrad Burns 
presiding.
    Staff members assigned to this hearing: Virginia Pounds, 
Republican Professional Staff; and Jonathan Oakman, Democratic 
Staff 
Assistant.

            OPENING STATEMENT OF HON. CONRAD BURNS, 
                   U.S. SENATOR FROM MONTANA

    Senator Burns. I call the Committee to order, and thank you 
for coming this morning. Our special guest this morning as we 
have our first hearing or the hearing for the reappointment of 
Ms. Ness to the Federal Communications Commission. We welcome 
you here this morning and appreciate you coming. We also 
welcome our two guests. I don't have much of a statement to 
make prior to the--I will reflect that in my questions, and I 
would move my spotlight to my ranking member on this Committee, 
Senator Hollings.
    [The prepared statement of Senator Burns follows:]

   Prepared Statement of Hon. Conrad Burns, U.S. Senator from Montana
    I would like to welcome everyone to today's hearing. Without 
question, the Federal Communications Commission is one of the most 
critical agencies in ensuring this nation's future, particularly given 
the explosion of information technologies and the Internet. Given this 
fact, today's hearing on the reconfirmation of Commissioner Ness takes 
on added gravity.
    I certainly am impressed with Commissioner Ness' commitment to 
public service and her reputation for accessibility. The Commissioner 
has always had an open-door policy and I applaud her for that. I am 
concerned, however, with three issues in particular: the continuing 
failure of the Commission to properly implement Section 706, its ill-
conceived low power radio proposal and lack of common sense on the 
cross-ownership issue. I look forward to hearing more from the 
Commissioner about her positions on these issues.
    I am very disturbed by the Commission's delay in properly using the 
authority granted to it under Section 706 of the Telecommunications 
Act. I authored Section 706 during the crafting of the Act to provide 
deregulatory incentives so that telecommunications firms would invest 
in broadband technologies. The Section directs the FCC to make these 
technologies available to ``all Americans.'' Yet in its report on 
broadband deployment last year, the Commission refused to use its 
Section 706 authority, citing the spread of broadband technologies 
across the nation, even though only 2% of Americans had broadband 
access. Simple common sense dictates that less than two percent 
deployment does not equal ``all Americans.''
    I will not allow Section 706 to be dismantled through FCC inaction. 
Broadband access is as important to our small businesses in Montana as 
water is to agriculture. With broadband access, high-tech Montana 
companies can compete on the same basis as large corporations in the 
global markets being made possible by the surge in e-commerce. The 
Communications Subcommittee will be holding a hearing on broadband 
deployment and Section 706 next Tuesday and I expect it will be one of 
the most important hearings of the year.
    I am also very concerned about the Commission's recent actions on 
low power radio. I remain to be convinced that the concerns about 
interference with existing broadcasters have been properly addressed. I 
should note that public radio has been among the most vocal critics of 
this proposal. Instead of essentially legalizing pirate radio in the 
guise of serving some vague public interest goal, the Commission should 
be working with nonprofits to take advantage of new technologies. In 
the last six months, there has been an explosion of Internet radio 
broadcasting, for instance. Using the Internet, individuals and small 
nonprofits have been creating their own global broadcasting 
distribution networks with minimal costs and no interference issues.
    Yet the Commission continues to ram forward with this ill-conceived 
scheme. I certainly look forward to Commissioner Ness further 
explaining her thinking and actions on this issue.
    The Commission's outdated position on cross-ownership is also of 
great concern to me. Broadcasters and newspaper owners have 
consistently urged that the newspaper-broadcast cross-ownership ban 
should be eliminated, arguing in particular that unprecedented growth 
in the number of new communications outlets make the rule an 
anachronism. I agree with that view. One cannot credibly say that a 
``scarcity'' of communications voices exists today.
    I am also concerned about the Commission's continuing delay in 
issuing a comprehensive universal service order, among other issues. I 
look forward to further exploring these matters today. Thank you.

             STATEMENT OF HON. ERNEST F. HOLLINGS, 
                U.S. SENATOR FROM SOUTH CAROLINA

    Senator Hollings. I include my statement in the record and 
yield to our distinguished Senators who are prepared to 
introduce the witness.
    [The prepared statement of Senator Hollings follows:]

            Prepared Statement of Hon. Ernest F. Hollings, 
                    U.S. Senator from South Carolina
    I thank Chairman McCain for agreeing to holding this nomination 
hearing for Commissioner Ness early in the legislative year. 
Commissioner Ness has served as a Commissioner since 1994 during a 
challenging and exciting time at the FCC. She has worked diligently to 
implement the Telecommunications Act of 1996 and has been an advocate 
for competition. In addition, to her day-to-day duties, Commissioner 
Ness has immersed herself in issues of international telecommunications 
policy and chairs the Federal-State Joint Board on Universal Service. I 
thank her for her service and for her dedication to developing sound 
telecommunications policy.
    As the FCC fulfills its duty of regulating the telecommunications 
industry, there are two specific challenges that the FCC must meet 
successfully. The first is promoting competition in the local phone 
market, and the second is protecting the public interest.
    Soon after the passage of the Telecommunications Act of 1996 a 
slate of 271 applications that did not meet the 14 point checklist were 
filed at the FCC. However, today companies are beginning to take the 
271 process more seriously. This has resulted in the FCC granting Bell 
Atlantic's 271 application in New York. I understand that Bell Atlantic 
has since had some problems meeting the requirements of Section 271, 
and has entered a consent decree with the FCC to pay $27 million in 
fines. Therefore, as the FCC reviews 271 applications it is important 
that the FCC grants only those applications that truly meet the 
requirements of Section 271, and at a minimum, meet the standard in its 
Bell Atlantic decision. The FCC must also have in place the necessary 
enforcement tools to address compliance issues that may arise.
    The drafters of the Communications Act of 1934 had considerable 
foresight when they included provisions in the Act requiring the FCC to 
make decisions in accordance with the public interest. This standard is 
particularly important in light of the great number of mergers 
occurring in the telecommunications market. We have seen the number of 
Bell phone companies go from seven to four because of mergers, and the 
FCC recently authorized the merger of a Bell company and a long 
distance company. There has been tremendous consolidation in the radio 
industry and there are now pending mergers such as AOL and Time Warner 
which, if approved, would allow the merged company to leverage its 
market power across several media platforms. In this environment the 
FCC must be able to utilize its public interest standard to ensure 
that: consumers are protected, rates are reasonable and affordable, 
service offerings are responsive to consumer needs, and companies 
continue to provide new and innovative services.
    I welcome Commissioner Ness today and look forward to hearing her 
testimony.

    Senator Burns. Mr. Brownback?
    Senator Brownback. I want to hear from our distinguished 
colleagues.
    Senator Burns. We appreciate your coming this morning and 
your interest in this appointment, and I would ask at this time 
is Mr. Sarbanes ready to introduce his special guest?

              STATEMENT OF HON. PAUL S. SARBANES, 
                   U.S. SENATOR FROM MARYLAND

    Senator Sarbanes. Thank you very much, Mr. Chairman, 
Senator Hollings, Senator Brownback. I'm very pleased to be 
here to indicate my very strong support for the reconfirmation 
of Susan Ness as the Commissioner of the Federal Communications 
Commission. In my view, she's done an outstanding job in this 
role. I think she's served our nation well.
    As you know, she was appointed to the Commission in 1994. 
During her tenure there, she's chaired the Commission's 
Federal/State Joint Board charged with addressing universal 
telephone service issues. She's been the Commission's lead 
representative for the 1995-1997 World Radio Communications 
Conference. She's currently a member of the National 
Association of Regulatory Utility Commissioners Committee on 
Communications and the Federal Communications Bar Association.
    The Committee knows well that she's been an active 
proponent of fair competition both domestically and globally. 
She's worked hard to promote the advancement of new 
technologies, expand economic opportunities, reduce regulatory 
uncertainty. She's played a key role in shaping policies for 
the efficient management of the radio spectrum. She's credited 
with helping to forge a consensus on the digital television 
standard, on guidelines to improve the quality and quantity of 
children's educational television program. She's worked 
tirelessly to facilitate delivery of advanced 
telecommunications systems to the classroom and to community 
libraries so that all children can participate in the 
telecommunications and information revolution.
    She had a very distinguished record before coming to the 
Commission, although obviously her performance there is a 
critical standard in judging her reconfirmation. She has been a 
senior lender to communication companies as the vice-president 
of a regional financial institution. She has been assistant 
counsel in a House Committee on banking currency in housing. 
She has been a very active leader in our community in Maryland, 
a Chair of the Montgomery County Charter Review Commission, 
Vice Chair of the County's Task Force on Community Access to 
Television.
    She has done I think a terrific job in handling some very 
tough problems before the Commission. I think she's reflected 
prudence, intelligence, fair and balanced judgment and I 
strongly urge the Committee to permit her to carry forward her 
good work by reconfirming her for another term on the FCC.
    Thank you very much.
    Senator Burns. Thank you, Senator Sarbanes. Senator 
Mikulski.

            STATEMENT OF HON. BARBARA A. MIKULSKI, 
                   U.S. SENATOR FROM MARYLAND

    Senator Mikulski. Thank you very much, Mr. Chairman. I will 
just highlight some additional comments. I believe my senior 
colleague covered a lot of the information that I wish to 
convey as well and ask unanimous consent that my statement go 
into the record.
    Senator Burns. Without objection.
    Senator Mikulski. Mr. Chairman, I, too, wholeheartedly 
endorse the renomination of Susan Ness to be a Commissioner at 
the FCC. I think she brings competence, I think she brings 
experience and I think she brings a sense of community because 
sometimes we get so fascinated by technology--what are the new 
regulatory--we forget that really ultimately, 
telecommunications is to serve the consumer and to help bring 
the world together, either business to business or business to 
consumers or people to people. I believe she brings that 
backbone and those insights.
    She brought to the Commission initially an incredible 
educational background, a graduate from Douglass College, in 
addition to that, a law degree from Boston College and then 
went on and got a Master's Degree in Business Administration 
from Wharton. Now, that's a pretty excellent background to 
bring to the technical issues facing FCC and the need to 
understand both the law as well as the business aspects.
    We have been particularly proud of the job she's done in 
the FCC and the challenges that she's taken a very keen 
interest in improving children's educational TV, promoting 
universal service and universal access, again, a very keen 
interest to be sure that you don't have a digital divide in the 
United States of America between our children who have access 
to technology and those who don't, the roll-out of digital 
television, new wireless service, expanding competition in 
telephone and video, efficient spectrum management. Then she's 
also taken the work of unnecessary regulations, not what else 
can we do but what don't we have to do so we don't have to 
shackle this new world of E business and E buzz.
    In her work at the Federal/State Joint Board, she has 
represented us in World Radio Communications conferences in 
Switzerland. She was the FCC's rep in 1995 and 1997 and one of 
the areas that she's expressed interest in, I know the 
Committee was very strong in this, this opening overseas 
market. If we invent it, we want to be able to sell it and I 
think she's been a real champion of that.
    She's been recognized by her peers, a recipient of the 
International Radio and TV Society Foundation. Electronic Media 
named her as one of 12 to watch in 1997 and she was honored by 
the Women of Wireless and the American Women in Radio and TV 
for all of her efforts.
    I know that her family's here and they have been very proud 
of her work as the two Senators have, and I believe that she 
will ably do it, continue to do a very able job on the 
Commission. And I think anybody who brings her owns mitts is 
always prepared for anything that lies ahead so I 
wholeheartedly endorse her renomination.
    [The prepared statement of Senator Mikulski follows:]

            Prepared Statement of Hon. Barbara A. Mikulski, 
                       U.S. Senator from Maryland
    I am happy to be here this morning to introduce FCC Commissioner 
Susan Ness for reconfirmation to the FCC.
    Commissioner Ness was originally appointed to the FCC by President 
Clinton in 1994 and has been the Commission's senior member since 
November 1997. Commissioner Ness has been a dedicated and tireless 
worker in helping to formulate communications policies that will 
benefit the quality of life for future generations. Commissioner Ness 
currently chairs the Federal-State Joint Board which is charged with 
addressing universal telephone service issues and has served as the 
FCC's lead representative at the 1995 and 1997 World Radiocommunication 
Conferences in Geneva, Switzerland.
    Among her many accomplishments during her FCC tenure, Commissioner 
Ness has worked to: improve children's educational television; promote 
universal telephone service; connect classrooms and libraries to the 
Internet; roll out digital television service; introduce new wireless 
services; expand telephone and video competition; promote efficient 
spectrum management; open overseas markets; and eliminate unnecessary 
regulations.
    In recognition of her accomplishments Commissioner Ness was chosen 
as a recipient of the International Radio and Television Society 
Foundation Award and was selected one of Electronic Media's ``12 to 
Watch in 1997.'' She has also been honored by Women of Wireless and by 
the American Women in Radio and Television for her efforts on behalf of 
women.
    Prior to coming to the FCC, Commissioner Ness was a senior lender 
to communications companies as a vice president of a regional financial 
institution. A lawyer by profession, she also served as Assistant 
Counsel to the Committee on Banking, Currency and Housing in the U.S. 
House of Representatives. She also founded 
and directed the Judicial Appointments Project of the National Women's 
Political 
Caucus.
    Commissioner Ness is a graduate of Douglass College where she 
received a B.A. in 1970. There she served on the Board of Directors of 
WRSU Radio. She received a Juris Doctor, cum laude from Boston College 
Law School and a Masters in Business Administration from The Wharton 
School of The University of Pennsylvania.
    Another 5 years for Commissioner Ness will be good for the FCC and 
good for the country. I wholeheartedly support Commissioner Ness's 
renomination and urge a swift reconfirmation.

    Senator Burns. Thank you, Senator Mikulski. Before we take 
your statement, Commissioner, we have been joined by the 
distinguished Senator from West Virginia. Mr. Rockefeller, do 
you have a statement? We have already made ours.

          STATEMENT OF HON. JOHN D. ROCKEFELLER, IV, 
                U.S. SENATOR FROM WEST VIRGINIA

    Senator Rockefeller. I know it and that is the reason I 
called you last night with great respect to ask your permission 
if I could talk for about 60 seconds, and you said yes. I want 
to do that because I so strongly support Susan Ness and I think 
it is incredibly important for the FCC that she be renominated.
    This has been a two-year process. She has more experience 
than anybody on the FCC. She's taken from the telecommunication 
to regulation act every single aspect of that and worked it 
through. We've spent endless hours working together overcoming 
problems and she's patient, understanding, knows it. I didn't 
even know about The Wharton School until I was reading about it 
last night, but that's just another dimension.
    She's been very strong on universal service, she's been 
very strong on consumer interest, and very strong on trying to 
get compromise for a digital television standard effective on 
that. She's pushed to move new technologies toward the 
marketplace as quickly as possible, which I think is important 
for a Commissioner, and she's been a very effective advocate 
for spectrum management policies that create a level playing 
field for all kinds of technologies.
    But given all that, still I think the experience is the 
thing which is so important, the stability which is needed on 
the FCC. I sorely suspect that they're understaffed, that 
they're under-funded, and I will have questions for her on 
that, but I'm extremely supportive of her renomination. I think 
it's an absolute must for the success of the FCC in a situation 
where all the work that she does is moving much more quickly 
than we in Congress, where our committees were set up just 
after the second World War are prepared to deal with them, so 
we really need Susan Ness.
    Thank you, Mr. Chairman.
    Senator Burns. Thank you, Senator. Now we'll have a 
statement from Ms. Ness and welcome this morning and before 
this Committee.
    Senator Hollings. Mr. Chairman, let me just say hearing all 
these laudatory statements, that I think of the comment made by 
Winston Churchill in July 1945. We had VE Day on May the 8th of 
1945 and the end of July, Mr. Churchill was voted out of office 
by Clement Atlee, and under the rule in the United Kingdom, 
you're supposed to be outside, which he was, of 10 Downing with 
his clothing rack and his chest of drawers.
    And the BBC said, ``Mr. Prime Minister, what is your 
comment?''
    He said, ``The British people are a funny lot. They show 
their gratitude for a job well done by promptly voting you out 
of office.''
    Here was a fellow who had won the war to end all wars and 
in just 3 months' time they were getting rid of him. And Ms. 
Ness has been held up now since, what, almost a year, having 
done an outstanding job. As Churchill says, don't look for 
gratitude, which she's got some good friends here, and you 
waited entirely too long.
    The only reason I asked, Mr. Chairman, for you to yield 
just a second is because I wanted to commend the Commission on 
its rulings with respect to Section 271 now that we have had 
Bell Atlantic. You've instituted an Enforcement Bureau, and 
let's continue with that, because that's highly important that 
we don't think to just get approval and then they don't have to 
still comply with their 14-point checklist. The lawyers for the 
Bell companies wrote those 14 points, and I'm very, very much 
along with Senator Rockefeller in support of your renomination, 
and I hope we can get it in the next markup here so we can get 
it to the floor. Thank you, Mr. Chairman.
    Senator Burns. Thank you, Senator. I was doing pretty good 
about keeping the speeches down up here.
    Senator Hollings. Well, she deserved the comment, and I've 
got to get to another one.
    [The prepared statement of Senator Inouye follows:]

 Prepared Statement of Hon. Daniel K. Inouye, U.S. Senator from Hawaii
    I thank the Chairman for holding a hearing on the nomination of 
Commissioner Susan Ness for a second term as Commissioner of the 
Federal Communications Commission (FCC). Commissioner Ness' term 
expired last year and given her work at the FCC, it is important that 
this committee take a serious look at renominating her to serve a 
second term at the FCC.
    Prior to going to the FCC, Commissioner Ness had a great deal of 
experience in the communications world, particularly in the area of 
finance, and while at the FCC, she has built admirably on that 
experience. Commissioner Ness spent nearly 10 years in the 
communications industries division of the American Securities Bank in 
Washington, D.C. she also served as an Assistant Counsel to the House 
Committee on Banking, Currency, and Housing.
    At the FCC, Commissioner Ness has certainly distinguished herself. 
She has taken a special interest in international and wireless 
communications policy and has represented the United States and the FCC 
well in international arenas. I would also like to recognize 
Commissioner Ness for her dedicated service as Commissioner during a 
historic and challenging time at the FCC as it implements the 
Telecommunications Act of 1996. In this context, Commissioner Ness has 
had to deal with difficult issues such as universal service, access 
charge reform, and opening the local phone markets to competition.
    I welcome Commissioner Ness. I thank her for her hard work at the 
FCC, and I look forward to hearing her testimony.

    Senator Burns. Well, I think maybe with citing Churchill 
and his demise after World War II, it stood by the old 
Presbyterian saying that no good deed shall go unpunished, and 
we may be in that sort of a situation, but I understand that it 
is the Chairman of--the full Committee's intent is to move this 
nomination out of Committee, and that's what I understand now, 
anyway, and I think that's a good sign.
    Ms. Ness, we look forward to your opening statement and 
thank you for coming this morning and, you know, if the other 
two Senators want to be excused, I know they don't have 
anything else to do today. You might want to introduce your 
family, if you'd like.

          STATEMENT OF HON. SUSAN NESS, COMMISSIONER, 
               FEDERAL COMMUNICATIONS COMMISSION

    Ms. Ness. Thank you very much, Mr. Chairman. I would like 
to introduce the members of my family who are here today. 
First, my husband, Larry Schneider, my best friend for the last 
25 years. My daughter Elisabeth Schneider--why don't you stand? 
And my eleven-year-old son and computer advisor, David 
Schneider.
    Senator Burns. He taught you how to use it, didn't he? I 
know about that.
    Ms. Ness. I'd also like to acknowledge my mother, Ruth 
Ness, who would have liked to have been here today but she is 
with my 102-year-old grandmother who unfortunately entered the 
hospital earlier this week. And I know during my last 
confirmation hearing, my then 97-year-old grandmother had 
watched on C-SPAN and had alerted the family to the fact that 
it was being covered. I see that C-SPAN is here today. 
Hopefully, my grandmother is in a position to watch once again. 
I know she would be if she can.
    I also want to thank Chairman McCain for agreeing to hold 
the hearing today, and thank you very much, Chairman Burns, for 
agreeing to preside today.
    I also would like to thank Senator Hollings for all of his 
help in providing me with this opportunity today, and my home 
Senators Barbara Mikulski and Paul Sarbanes for their very, 
very generous introduction, their support and their friendship.
    I have been privileged to serve our country at a time of 
explosive growth and change in the telecommunications industry. 
We, the Commission, are at the epicenter of a fundamental 
transition that is changing the way we live, work and play. 
We're transitioning from a monopoly based to a competitive-
based industry, from an analog to a digital world, from 
narrowband to broadband, from fixed applications to mobile 
applications, from circuit-switched to packet-switched and from 
a traditional economy to an Internet-based economy.
    Lest we be complacent, the Commission is also transitioning 
from the implementation stage of the Telecommunications Act to 
the enforcement stage of that Act. And all of this has been 
happening on my watch. New technologies, new media, new 
business plans are emerging every day. Our challenge at the 
Commission is to facilitate innovation and encourage investment 
in this dynamic information age.
    And our commitment is to ensure that all Americans have 
access to the telecommunications tools so vital in this new 
economy. I'm invigorated by the challenge and both inspired and 
humbled by this commitment to the American people. For me, 
there could be no better place to serve the country than at the 
FCC, and at this time. With your consent I would like very much 
to continue to serve, and I thank you for this extraordinary 
opportunity.
    [The prepared statement and biographical information of Ms. 
Ness follow:]

         Prepared Statement of Hon. Susan Ness, Commissioner, 
                   Federal Communications Commission
Mr. Chairman and distinguished members of the Committee:

    It is an honor to appear before you today.
    I want to begin by thanking both the Committee Chairman, Senator 
McCain, for scheduling this hearing and the Subcommittee Chairman, 
Senator Burns, for agreeing to chair it. I also want to thank the 
Ranking Member, Senator Hollings, for his invaluable assistance, and 
the senators from my home state of Maryland, Senator Mikulski and 
Senator Sarbanes, for their support and friendship.
    It is a great privilege to be entrusted--along with my four 
colleagues and a staff of dedicated employees--with implementation of 
our Nation's communications laws. Through the Commission's 
implementation of those laws, we seek to effectuate your vision--that I 
share--of competition and innovation throughout the communications 
industry; of access for all Americans to advanced services; of 
elimination of outdated regulations; and of opened global markets. I 
appreciate the opportunity you have given me to serve in a position to 
promote these goals, and with your consent, I will continue to do so.
    I have been fortunate to serve at an extraordinary time. When I 
first appeared before this Committee in 1994, the Internet was still a 
nascent network used predominantly by academia. Less than 10 percent of 
Americans had cellular phones. Spectrum licenses were awarded by 
lotteries, not auctions. There was no direct broadcast satellite 
service. And local telephone competition was largely a dream.
    Today, the Internet has revolutionized the way we live, work, and 
play. Over sixty percent of Americans now use the World Wide Web on a 
regular basis. Eighty million Americans subscribe to mobile telephone 
service. Over 8,000 spectrum licenses have been awarded by auction. 
Direct broadcast satellite is the fastest-growing video service. And 
there are a multitude of new companies aiming to provide consumers with 
choices for their local and advanced telecommunications services.
    But the best is yet to come.
    Over the next five years and beyond, the Internet will profoundly 
change the way we live and work. The convergence of previously separate 
industries will allow information and content, whether voice, data or 
video, to be transmitted virtually any time and any place over an ever-
expanding number of paths. Multiple broadband pipelines, both wired and 
wireless, will bring a new generation of applications to consumers. 
Millions of devices, from soda machines to mobile phones will 
communicate directly on the Internet. New technologies such as software 
defined radio and spread spectrum devices, will fundamentally challenge 
the way we think of spectrum allocation. Together, these innovations 
will provide consumers with a wealth of new choices and lower prices. 
Our task is to insure that all Americans have access to the wealth of 
benefits and opportunities flowing from this telecommunications 
revolution.
    Mr. Chairman, the future depends upon innovation. And the 
Commission plays an important role. We foster innovation when we create 
opportunities for new technologies, whether wired or wireless, to reach 
users. We foster innovation when we reform rules and practices that 
impede competitive forces. And we foster innovation when we reduce 
barriers to investment and open markets to competition. But we must do 
so at a pace consistent with digital age speed and efficiency.
    We live in a global economy. Countries around the world have looked 
to the leadership of the United States in opening telecommunications 
markets to competition. We can be proud of our record at home and 
abroad.
    Mr. Chairman, I am excited about the future. That is why I am so 
enthusiastic about participating in the effort to transform your vision 
into reality. That is why I would be honored to serve the American 
people during this time of unprecedented change.
    Thank you.

                      a. biographical information
    1. Name: (Include any former names or nick names used.) Susan Paula 
Ness.
    2. Position to which nominated: Commissioner, Federal 
Communications Commission.
    3. Date of nomination: July 19, 1999.
    4. Address: (List current place of residence and office addresses.) 
Residence: 5505 Devon Road Bethesda, Maryland 20814. Office: Federal 
Communications Commission, 445 12th Street, S.W., Washington, D.C. 
20554.
    5. Date and place of birth: August 11, 1948, Elizabeth, New Jersey.
    6. Marital status: (Include maiden name of wife or husband's name.) 
Married to Lawrence Alan Schneider.
    7. Names and ages of children: (Include stepchildren and children 
from previous marriages.) Elisabeth Ness Schneider, August 14, 1984 (14 
years old); David Ness Schneider, July 6, 1988 (11 years old).
    8. Education: (List secondary and higher education institutions, 
dates attended, degree received and date degree granted.) The Wharton 
School, Graduate Division (University of Pennsylvania), September 1981-
May 1983, MBA, May 1983; Boston College Law School, September 1971-May 
1974, J.D., May 1974; Douglass College (Rutgers University), September 
1966-May 1970, B.A., May 1970; Sarah Lawrence College (Geneva, 
Switzerland program), Oct. 1968-May 1969; Verona High School, Verona, 
NJ, Diploma, June 1966.
    9. Employment record: (List all jobs held since college, including 
the title or description of job, name of employer, location of work, 
and dates of employment.)

1994-Present              Federal Communications Commission, Washington,
                           D.C., Commissioner.
1983-1992                 American Security Bank, Communications
                           Industries Division, Washington, D.C., VP/
                           Group Head (1988-1992), Vice President (1986-
                           1992), Asst. Vice President (1984-86), Asst.
                           Treasurer (1984), Corp. Banking Rep. (1983-
                           84).
1978-1981                 National Women's Political Caucus, Washington,
                           D.C., Director, Judicial Appointments
                           Project.
1977-1982                 Consultant (self employed), Bethesda,
                           Maryland, Consultant, Consumer Credit/
                           Government Relations.
1975-1977                 Committee on Banking, Currency & Housing--U.S.
                           House of Representatives, Washington, D.C.,
                           Assistant Counsel (Full Committee).
1974-1975                 Consumer Product Safety Commission,
                           Washington, D.C., Attorney/Advisor.
Summer 1973               Nessen & Csaplar, Boston, MA, Summer
                           Associate.
Summer 1972               San Francisco Neighborhood Legal Services, San
                           Francisco, CA, Summer Law Clerk.
1970-1971                 Harvard School of Public Health, Boston, MA,
                           Administrative Assistant.
Summer 1970               NBBS (Dutch Student Travel Bureau), Leiden,
                           The Netherlands, U.S. Representative (Student
                           Tours).
 

    10. Government experience: (List any advisory, consultative, 
honorary or other part-time service or positions with Federal, State, 
or local governments, other than those listed above.)

1987-1994                 Montgomery County Charter Review Commission,
                           Montgomery County (MD), Chair 1991-1994,
                           Member 1987-1994.
1984                      Montgomery County Task Force on Community
                           Access Television, Montgomery County (MD),
                           Vice Chair.
1978                      Dept. of Housing & Urban Development, Project
                           on Women & Mortgage Credit, Washington, D.C.,
                           Project consultant.
1978-81                   Montgomery County Commission for Women,
                           Montgomery County, MD, President 1980-1981,
                           Financial Officer 1979-80, Member 1978-80.
1977                      Department of Commerce, Office of Legislative
                           Affairs, Washington, D.C., 30 Day Consultant.
 

    11. Business relationships: (List all positions held as an officer, 
director, trustee, partner, proprietor, agent, representative, or 
consultant of any corporation, company, firm, partnership, or other 
business enterprise, educational or other institution.) Trustee of 
Trust Under Will of Edward S. Ness (father) (simple testamentary 
trust); Member, Advisory Board, Gruss Public Policy Fellowship Program, 
The Wharton School, University of Pennsylvania (unpaid).
    12. Memberships: (List all memberships and offices held in 
professional, fraternal, scholarly, civic, business, charitable and 
other organizations.) I am admitted to the practice of law in the 
District of Columbia and maintain active membership status. I am also 
admitted to the practice of law in the State of Maryland, but have 
taken inactive status for the duration of my time at the FCC. Other 
memberships: Federal Communications Bar Association, Leadership 
Washington (Class of 1988), Wharton Alumni Club of Washington, Boston 
College Law School Alumni Association, South Bradley Hills Neighborhood 
Association, National Association of Women Judges (associate member), 
Smithsonian Institution (Resident Associate), WETA contributor, United 
States Holocaust Memorial Museum, American Women in Radio and 
Television (honorary member), Walt Whitman Parent, Student, Teacher 
Association, Maret Parent Teacher Association, DNC Women's Leadership 
Forum, Renaissance Weekend, Har Shalom Synagogue, Emily's List.
    13. Political affiliations and activities:
    (a) List all offices with a political party which you have held or 
any public office for which you have been a candidate. Democratic 
Precinct Chair (Resigned 1994).
    (b) List all memberships and offices held in and services rendered 
to all political parties or election committees during the last 10 
years. During the past 10 years (prior to entering government service) 
I was active in numerous national and local Democratic party campaigns 
and political activities as a volunteer advisor and/or financial 
contributor. Since entering government service, I have limited my 
activities to certain memberships and financial contributions, as 
indicated below:
    Clinton for President 1991-92 (Co-Chair, Montgomery County, MD 
primary and general election, National Finance Committee), Bruce Adams 
for County Executive (Montgomery County, MD (1992-94) (Treasurer)), 
Bruce Adams for County Council (Montgomery County, MD) (Finance Chair), 
DNC Business Council (member 1992-94), DNC Trustee (1993), DNC Women's 
Leadership Forum (current member), Maryland Democratic Party (current 
member), Democratic Leadership Council (current member), EMILY's List 
(current member).
    (c) Itemize all political contributions to any individual, campaign 
organization, political party, political action committee, or similar 
entity of $500 or more for the past 10 years.

1990           Friends of Sid Kramer               $500
1991           Clinton Committee `91               $1,000
1991           Clinton Committee `91               $1,000 (spouse)
1992           Democratic National Committee       $650 (convention
                                                    package)
1992           Don Bonker for Senate               $500
1992           Don Bonker for Senate               $500
1992           DNC Victory Fund                    $2,000 (joint)
1993           Friends of Bruce Adams              $500
1993           Maryland Democratic Party           $500
1994           Women's Forum, DNC                  $1,000
1995           Clinton/Gore `96 Primary Committee  $1,000
1995           Clinton/Gore `96 Primary Committee  $1,000 (spouse)
1996           DNC Federal Account                 $2,000 (spouse)
1996           Friends of Chris Dodd               $500 (spouse)
1996           Women's Leadership Forum, DNC       $1,000
1998           Mikulski For Senate                 $500
1998           Power & Leadership in U.S. Senate   $500
1998           Women's Leadership Forum, DNC       $1,000
1999           Gore 2000                           $1,000 (spouse)
 

    14. Honors and awards: (List all scholarships, fellowships, 
honorary degrees, honorary society memberships, military medals and any 
other special recognition for outstanding service or achievements.) 
International Radio and Television Society Foundation, award for 
achievements in electronic media, New York, NY (May 1999); Rutgers 
University Hall of Distinguished Alumni, elected in 1998; Douglass 
Society, Douglass College, elected 1997; Women of Wireless, Certificate 
of Achievement; American Women in Radio and Television Award; Boston 
College Law School, Juris Doctor, cum laude.
    15. Published writings: (List the titles, publishers, and dates of 
books, articles, reports, or other published materials which you have 
written.) Ness, Gender Stereotypes Still Need to Change, (letter), 
Wireless Week, March 8, 1999; Ness, Auction Integrity Vital, Wireless 
Week, January 26, 1998; Ness, Heads Up Call for Children's TV, 
(letter), Washington Post, October 4, 1997; Ness, Libraries: A Critical 
Lane on the Information Superhighway, llinois Libraries, Vol. 79 No. 2, 
Spring 1997; Ness, Spectrum Management Principles for the Twenty First 
Century, The National Regulatory Research Institute Quarterly Bulletin, 
Volume 3, Fall 1996; Ness, Upgrading What TV Offers Children, 
Washington Times, September 14, 1996, at A13; Ness, Responsible TV, 
Washington Post, October 27, 1995, at A24; Ness, Reflections on the 
Sixtieth Anniversary of the Communications Act, Federal Communications 
Law Journal, Volume 47, No. 2., December 1994, at 311; Wechsler & Ness, 
Power Plays, Ms. Magazine, February 1980, at 27; Ness & Wechsler, Women 
Judges--Why so Few?, Graduate Woman, November-December 1979, at 10; 
Ness, A Sexist Process Keeps Qualified Women Off the Bench, Washington 
Post, March 26, 1978, Outlook Section, at C-6; Various Reports of the 
Montgomery County Commission for Women (1979-80); Report of the 
Montgomery County Task Force on Community Access Television, March 1, 
1984; Report of the Montgomery County Charter Review Commission, May 1, 
1992; Report of the Montgomery County Charter Review Commission, May 1, 
1990.
    16. Speeches: Provide the Committee with two copies of any formal 
speeches you have delivered during the last 5 years which you have 
copies of on topics relevant to the position for which you have been 
nominated. Package and index attached.*
---------------------------------------------------------------------------
    * The speeches have been retained in the Committee's files.
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    17. Selection:
    (a) Do you know why you were chosen for this nomination by the 
President? Although I have not spoken with the President about his 
decision, I assume that he chose to nominate me for the same reasons he 
did five years ago, as well as his assessment of my track record over 
the past five years. Initially, I believe he selected me for my 
expertise in communications finance, and for my dedication to serve the 
American public. Over the past five years, I believe I have established 
myself as thoughtful, hard-working, knowledgeable, and fair, with a 
strong commitment to promoting competition and serving the interests of 
consumers.
    (b) What do you believe in your background or employment experience 
affirmatively qualifies you for this particular appointment? My five 
year record as an FCC Commissioner best qualifies me for reappointment. 
I am the only Commissioner at present who has served more than two 
years and the only one who has participated throughout the Commission's 
implementation of the Telecommunications Act of 1996. I have a thorough 
knowledge of the legal, policy, technical, and economic issues with 
which the Commission has been grappling as we transition from a 
monopoly to a competitive marketplace. I also have considerable 
experience in the art of consensus-building, and have demonstrated the 
ability to interpret and follow the law, and to meet statutory 
deadlines. I believe I have an excellent working relationship with the 
industry, with our colleagues in state and local government, with 
consumers, and with our global trading partners. I have worked closely 
and cooperatively with the Congress, especially with our oversight 
committee.
    Prior to becoming a Commissioner, I was vice president and group 
head of the Communications Industries Division of a regional bank. I 
worked closely with communications companies nationwide that were 
expanding their businesses, creating jobs and contributing to economic 
growth. As a result, I developed an understanding of the financial 
circumstances and business plans of rural telephone companies, long 
distance providers, wireless carriers, satellite companies, radio and 
TV broadcasters, and cable companies and programmers, among others, and 
the impact of government regulation on these entities. I have brought 
this business perspective--as well as my earlier experience on Capitol 
Hill and as a consumer advocate--to my work as a Commissioner.
    In addition to my professional career, prior to joining the 
Commission, I served my local community as the chair or vice chair of 
several county government commissions. My work on the FCC reflects my 
sensitivity to community needs.
    So much of what the Commission does will impact the lives of future 
generations. I am fortunate that my two children actively use and 
benefit from information age technologies. I am committed to doing what 
I can to spur the availability and affordability of broadband networks 
so that children from all walks of life are empowered to achieve their 
full potential.
                   b. future employment relationships
    1. Will you sever all connections with your present employers, 
business firms, business associations or business organizations if you 
are confirmed by the Senate? I did so prior to joining the Federal 
Communications Commission in 1994.
    2. Do you have any plans, commitments or agreements to pursue 
outside employment, with or without compensation, during your service 
with the government? If so, explain. No.
    3. Do you have any plans, commitments or agreements after 
completing government service to resume employment, affiliation or 
practice with your previous employer, business firm, association or 
organization? No.
    4. Has anybody made a commitment to employ your services in any 
capacity after you leave government service? No.
    5. If confirmed, do you expect to serve out your full term or until 
the next Presidential election, whichever is applicable? If confirmed, 
I would be honored to serve my full term.
                   c. potential conflicts of interest
    1. Describe all financial arrangements, deferred compensation 
agreements, and other continuing dealings with business associates, 
clients or customers. I have a vested interest in a defined benefits 
pension fund from NationsBank, successor to American Security Bank, 
which will pay a monthly annuity, beginning, September 1, 2014. I have 
no control over the funds, and do not know the value of the pension, 
who manages the pension funds, or the assets in which the fund is 
invested.
    2. Indicate any investments, obligations, liabilities, or other 
relationships which could involve potential conflicts of interest in 
the position to which you have been nominated. When I joined the 
Commission in 1994, my husband converted from an equity partner to a 
contract partner in the law firm of Arnold & Porter to insulate our 
family from any earnings resulting from the firm's representation of 
communications clients. Nonetheless, I consider whether it is necessary 
to recuse myself if Arnold & Porter represents a client in an 
adjudicatory proceeding, and I confer with the Commission's Office of 
General Counsel as necessary to ensure that I avoid any appearance of 
conflict of interest.
    3. Describe any business relationship, dealing, or financial 
transaction which you have had during the last 10 years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated? I am aware of no such 
potential conflicts of interest.
    4. Describe any activity during the past 10 years in which you have 
engaged for the purpose of directly or indirectly influencing the 
passage, defeat or modification of any legislation or affecting the 
administration and execution of law or public policy. My primary 
responsibility as a Commissioner has been to implement the laws that 
Congress writes, not to lobby for changes in those laws. Nonetheless, 
during my tenure at the FCC, I have occasionally expressed to Members 
of the Senate and House, and in public meetings, my views on 
legislation. For example, I spoke publicly and privately in 1994 and 
1995 of my hope that Congress would enact comprehensive communications 
legislation, as ultimately occurred in 1996. I have also testified on 
slamming issues at several Senate field hearings.
    Occasionally, I joined with other Commissioners in suggesting 
various revisions in the Communications Act (many of these were enacted 
in the Telecommunications Act of 1996). At one point I recall joining 
my colleagues in a letter concerning the adequacy of the Commission's 
annual appropriation. I have spoken about the desirability of amending 
the Government in the Sunshine Act, and of confirming the public 
ownership of radio spectrum. I also have answered questions in private 
meetings with Representatives and Senators, and in public oversight 
hearings, concerning various other legislative proposals.
    I participated in the negotiation of the World Trade Organization 
agreement on telecommunications services, and I have served as a senior 
member of the FCC delegation in bilateral and multilateral negotiations 
on WTO implementation, the World Radio Conferences of 1995 and 1997, 
and various related international matters. In these activities, I have 
conferred from time to time with members of Congress, as well as with 
officials of the Department of Commerce, State Department, and U.S. 
Trade Representative.
    And, within the specified jurisdiction of the Commission, I have 
affected the administration or execution of law or public policy in 
hundreds of proceedings over the past five years, both through my 
participation in the Commission's deliberations and through the votes 
that I have cast.
    Prior to joining the FCC, I participated actively at the state and 
local level on public policy matters in my home state of Maryland. I 
served as the chair of the Montgomery County Charter Review Commission. 
In that capacity, I testified before our County Council and the State 
legislature on county charter matters.
    5. Explain how you will resolve any potential conflict of interest, 
including any that may be disclosed by your responses to the above 
items. (Please provide a copy of any trust or other agreements.) I try 
to conduct myself in a manner that minimizes the potential for any 
conflicts of interest--or appearances of conflict--to arise. Whenever 
an ethical issue is presented, I consult my conscience, my advisors 
and, where appropriate, our Office of General Counsel ethics experts, 
for guidance. I recognize that public office is a public trust, and I 
am committed to maintaining a high ethical standard for myself and for 
my staff.
    6. Do you agree to have written opinions provided to the Committee 
by the designated agency ethics officer of the agency to which you are 
nominated and by the Office of Government Ethics concerning potential 
conflicts of interest or any legal impediments to your serving in this 
position? Yes.
                            d. legal matters
    1. Have you ever been disciplined or cited for a breach of ethics 
for unprofessional conduct by, or been the subject of a complaint to 
any court, administrative agency, professional association, 
disciplinary committee, or other professional group? If so, provide 
details. No.
    2. Have you ever been investigated, arrested, charged or held by 
any Federal, State, or other law enforcement authority for violation of 
any Federal, State, county, or municipal law, regulation or ordinance, 
other than a minor traffic offense? If so, provide details. No.
    3. Have you or any business of which you are or were an officer 
ever been involved as a party in interest in an administrative agency 
proceeding or civil litigation? If so, provide details? No.
    4. Have you ever been convicted (including pleas of guilty or nolo 
contendere) of any criminal violation other than a minor traffic 
offense? No.
    5. Please advise the Committee of any additional information, 
favorable or unfavorable, which you feel should be considered in 
connection with your nomination. I have nothing specific to add at this 
time, but would be pleased to respond to any additional questions the 
Committee may ask.
                     e. relationship with committee
    1. Will you ensure that your department/agency complies with 
deadlines set by congressional committees for information? I will do 
everything within my power to ensure that the FCC complies with 
deadlines set by congressional committees for information.
    2. Will you ensure that your department/agency does whatever it can 
to protect congressional witnesses and whistle blowers from reprisal 
for their testimony and disclosures? I will do everything within my 
power to ensure that the FCC protects congressional witnesses and 
whistle blowers from reprisal for their testimony and disclosures.
    3. Will you cooperate in providing the committee with requested 
witnesses, to include technical experts and career employees with 
firsthand knowledge of matters of interest to the committee? I will 
cooperate fully with the Committee to provide it with the witnesses it 
needs and desires.
    4. Are you willing to appear and testify before any duly 
constituted committee of the Congress on such occasions as you may be 
reasonably requested to do so? Yes, I would be happy to appear and 
testify.
                  f. general qualifications and views
    1. Please describe how your previous professional experience and 
education qualifies you for the position for which you have been 
nominated. I believe my experience as a lawyer (including service on 
one congressional committee staff) and as a banker (working with 
virtually every sector of the communications industry) were excellent 
training for this position. But at this juncture I believe it is my 
experience as a Commissioner, making literally thousands of decisions 
and dealing with virtually every provision of the Communication Act and 
related laws, that is most relevant. I have worked diligently to 
implement the laws Congress has enacted; I have listened carefully to 
the concerns of industry and consumers; and I have forged a strong 
working relationship with my FCC colleagues and with our state 
commission counterparts to expedite the arrival of competition, 
streamline or eliminate regulation, and preserve access to 
telecommunications and information services at affordable prices for 
all.
    2. What skills do you believe you may be lacking which may be 
necessary to successfully carry out this position? What steps can be 
taken to obtain those skills? I believe that I have the skills 
necessary to successfully carry out my responsibilities as a member of 
the FCC. Nonetheless, if confirmed to another term, as I have done over 
the past five years, I would strive to increase my knowledge and 
improve my skills to continue to merit the public trust.
    3. Why do you wish to serve in the position for which you have been 
nominated? I am deeply committed to serving the American public, and 
believe I can best do so at this time by continuing in my position as 
an FCC Commissioner. I care passionately about the issues before us. We 
are at a pivotal time in the transition from monopoly to competition in 
communications and much is left to be done. If confirmed by the Senate, 
I would welcome the opportunity to continue to play a role in ensuring 
that the communications laws are properly implemented.
    In carrying out the laws Congress has enacted, we have greatly 
enhanced the lives of Americans, from accelerating the introduction of 
new technologies and services, to establishing rules that will enable 
people with disabilities to have meaningful access to 
telecommunications products and services, and children--especially from 
low income and rural districts--to have classroom access to the 
Internet. I believe that I have contributed significantly to the 
decisions which this Commission has rendered over the past five years.
    As I noted, there is much left to be done. I want to promote 
increased competition in all communications markets (especially local 
telephony and multichannel video services), ensure that rural Americans 
participate fully in the benefits of communications advances, eliminate 
unnecessary regulation, promote efficient spectrum usage, open overseas 
markets, and protect the interests of children (V-chip, E-rate, and 
children's educational television programming).
    I believe that the quality of FCC decision making on these and 
other issues will be strengthened by my continued participation. The 
agency has four relatively new Commissioners. I provide continuity, 
institutional knowledge, and historical insights that might otherwise 
be lacking.
    4. What goals have you established for your first two years in this 
position, if confirmed? If confirmed, my principal goal would be to 
continue faithfully to implement the communications laws of the United 
States for the benefit of the American public. Specific priorities 
during the next two years include: (1) further strengthening of the 
support regime for telephone service in high-cost areas; (2) approving 
meritorious applications for long distance relief filed by Bell 
companies; (3) promoting the deployment of advanced (broadband) 
communications services to all Americans; (4) expediting review of 
telecommunications mergers; (5) completing revisions to broadcast 
ownership rules; (6) eliminating regulations that are no longer needed 
and streamlining those that are more burdensome than necessary; (7) 
ensuring a successful implementation of digital television; (8) 
advancing the interests of U.S. companies and U.S. consumers in the 
next World Radio Conference; (9) nurturing the growth of wireless 
services (terrestrial and satellite); and (10) promoting policies for 
efficient spectrum management. For further elaboration, see answer to 
Question F.6. below.
    5. Please discuss your philosophical views on the role of 
government. Include a discussion of when you believe the government 
should involve itself in the private sector, when should society's 
problems be left to the private sector, and what standards should be 
used to determine when a government program is no longer necessary. 
First and foremost, I want to distinguish between the role of Congress 
in making the laws and that of an FCC Commissioner in implementing 
them. My principal responsibility as a Commissioner is to follow 
faithfully the law as Congress wrote it, regardless of whether I might 
have chosen a different course if I had discretion to do so.
    Generally speaking, I tend not to believe in ``big government'' or 
``no government'' but in ``smart government.'' I believe in the 
supremacy of markets in allocating resources, setting prices, picking 
winners and losers, etc. But government can play an important role in 
correcting market failures, mediating disputes, and protecting 
consumers.
    The role of government can better be assessed in the context of 
specific examples than in the abstract. In the case of digital 
television, for example, I thought it was right for the government to 
add its imprimatur to the standard that had been developed by industry; 
virtually all industry representatives felt this would assist in 
expediting a successful transition to DTV. In the case of Personal 
Communications Services, however, I elected for the government not to 
mandate a particular transmission methodology, and I believe the 
competition between GSM, TDMA, and CDMA has been beneficial. I believe 
government still plays a useful role in spectrum allocations, but in 
the assignment process I believe that a market mechanism (auctions) 
produces fairer and faster results when there are competing 
applications than other approaches (such as comparative hearings, which 
require subjective decisions).
    Often, the issue is not whether ``government'' or the ``market'' is 
better, but how government can help to create conditions that will 
allow greater reliance on competition, and less on regulation. Local 
telephone competition is a case in point. Here, Section 251 requires 
some significant government intervention to create opportunities for 
greater competition, but as that competition emerges the need for 
entry, exit, and price regulation will diminish, and such regulation 
may well hamper greater competition.
    Wireless services provide another example, but one where the 
evolution of competition is more advanced. Early in my tenure, we 
adopted the PCS band plan and PCS auction rules and then conducted the 
A and B block auctions. Those actions, by government, enabled the 
introduction of additional competition in a market that had previously 
been a duopoly. Soon thereafter, we were confronted with petitions by 
states that wished to continue to regulate the prices for commercial 
mobile radio services. Based on our assessment of the prospects for 
competition, we denied the petitions, and ended rate regulation for 
CMRS. The results have been every bit as good as we had hoped they 
would be. Yet even the robust wireless competition that has emerged in 
the larger markets has not eliminated the need to address such wireless 
issues as hearing aid compatibility, E911 location information, or 
issues relating to the Communications Assistance to Law Enforcement 
Act.
    Congress has provided the FCC with appropriate guidance--and 
authority--concerning the removal of unnecessary regulations. Under 
Section 10 of the Communications Act--a tool I find very useful--we can 
and must eliminate any regulation that is not necessary to maintain 
just and reasonable prices, practices, etc., that is not necessary for 
the protection of consumers, and where removal is consistent with the 
public interest. We have repeatedly used that authority to examine our 
rules and to eliminate those which are no longer needed. I am also an 
advocate for the use of properly tailored sunset provisions in 
regulations.
    Finally, given the dizzying speed with which telecommunications 
technology and the marketplace are changing, it is critical for the 
Commission to step back and review our rules to determine whether the 
underlying purpose is still valid, whether the rules are in fact 
achieving that objective, and whether there is a less burdensome way to 
accomplish it. The biennial review provision of the Telecommunications 
Act (Section 11) is one vehicle for conducting such a review. I will 
not hesitate to revisit decisions which I have rendered where changed 
market conditions warrant.
    6. In your own words, please describe the agency's current 
missions, major programs, and major operational objectives. The 
Commission's mission is outlined in the Conference Report accompanying 
the Telecommunications Act of 1996: ``to provide for a pro-competitive, 
de-regulatory national policy framework designed to accelerate rapidly 
private sector deployment of advanced telecommunications and 
information technologies and services to all Americans by opening all 
telecommunications markets to competition . . .''
    Much of our present focus is on completing orders to implement the 
provisions of the Act. In our otherwise successful defense of our local 
competition order, the Supreme Court remanded one piece--what 
constitutes an unbundled network element (UNE) (Section 
251(c)(3),(d)(2))--to the Commission for further review. In addition to 
the UNE remand, we must further refine support mechanisms for telephone 
service in high-cost areas (Section 254), and evaluate forthcoming 
applications for Bell company entry into long distance (Section 271). 
We must conduct thorough but expeditious evaluations of proposed 
mergers (Sections 214 and 310), combat slamming (Section 258), and 
implement the Communications Assistance to Law Enforcement Act (Section 
229).
    We are finally completing our review of our broadcast ownership and 
attribution rules, and finding ways to accelerate review of future 
broadcast transactions. We must continue to oversee the transition from 
analog to digital television broadcasting, facilitate the introduction 
of digital radio broadcasting, ensure compliance with the V-Chip law 
and the Children's Television Act, and ensure that advanced 
telecommunications capabilities are being deployed to all Americans on 
a reasonable and timely basis.
    Our mission also includes managing the radio spectrum for non-
government uses. A major focus is WRC 2000, in which spectrum managers 
around the globe will convene to establish the spectrum rules of the 
road. We must engage in these debates--well in advance of WRC 2000--if 
we are to have an impact on outcomes that will affect billions of 
dollars of U.S. business.
    7. In reference to question number six, what forces are likely to 
result in changes to the mission of this agency over the coming five 
years? The communications marketplace is changing and, as it does, so 
too must the FCC. The most notable change that we are working to bring 
about is to increase competition in all markets, especially those 
currently characterized by little competition today (local telephone 
service and multi-channel video service). Increased competition will 
mean less prescriptive regulation, and we will need to adjust and 
streamline our rules as competitive developments warrant. Our efforts 
will be assisted by changes in technology, which are blurring the lines 
between previously discrete fields and making it easier, for example, 
for cable companies to offer telephone services, telephone companies to 
offer video services, and both to offer high-speed Internet access 
services.
    Increasingly, our spectrum policies are being challenged by new 
proposals for band sharing. We must refine our spectrum management 
policies to expedite the deployment of new wireless technologies while 
protecting existing services from unacceptable levels of interference.
    Chairman Kennard has initiated a process to plan for the FCC of the 
future. A wide variety of stakeholders has been consulted. My 
colleagues and I need to review the many suggestions that have been 
received and work together to see which ones make sense and which do 
not, and to determine the appropriate scope and timing of the various 
changes we do decide to make. Structural changes (such as the recent 
proposal to create an Enforcement Bureau and a Public Information 
Bureau) and potential statutory changes will, of course, be presented 
to Congress for review.
    8. In further reference to question number six, what are the likely 
outside forces which may prevent the agency from accomplishing its 
mission? What do you believe to be the top three challenges facing the 
board/commission and why? The FCC's ability to do its job is dependent 
first and foremost on our professional staff of lawyers, engineers, 
economists, analysts, and other experts. We are extremely fortunate to 
have exceptionally knowledgeable and talented people working diligently 
to administer the Communications Act, and we are also fortunate that 
Congress has appropriated the funds necessary to fulfill our 
responsibilities and to deploy efficiency-enhancing technology (e.g., 
for electronic filing initiatives). But budget limitations have 
nonetheless hindered our ability to attract new talent to replace those 
who have left.
    The propensity for service providers to litigate instead of compete 
unnecessarily delays the implementation of FCC decisions. Judicial 
review (though a vital element of our system of laws) is an ``outside 
force'' that sometimes impedes the Commission from accomplishing its 
mission. The Supreme Court eventually overturned the 8th Circuit's 
ruling on the FCC's local competition order, but for two intervening 
years the environment for investment and competition was clouded.
    Our highest priority is to ensure that all Americans can enjoy the 
best communications and information services possible, at affordable 
prices. The three top challenges in meeting this priority are to (1) 
promote competition whenever possible, (2) continue to address the 
unique needs of rural Americans and those with low incomes, and (3) 
eliminate those rules that have outlived their usefulness. As we pursue 
these and related issues, we can expect occasional criticism from 
industry participants, consumers, reviewing courts, and others, but we 
need to see this transition through with decisions that are clear, 
fair, prompt, and consistent with the law.
    9. In further reference to question number six, what factors in 
your opinion have kept the board/commission from achieving its missions 
over the past several years? I believe that the FCC is achieving its 
missions. The Commission embraced the many assignments in the 
Telecommunications Act with a firm commitment to implement the law 
faithfully and to meet the many statutory deadlines. I am proud of so 
many hard-working staff members whose efforts led to completion of 
every rulemaking on time. I am also proud that my colleagues on the 
Hundt Commission were able to achieve unanimity throughout that 
process.
    It is not inconsistent with the foregoing to observe that our work 
is not yet completed. I have always believed, for example, that 
replacing the telephone monopoly with a competitive telecommunications 
environment would take a number of years. Unnecessary litigation and 
footdragging have been a source of delay, but fundamentally the process 
of opening the telephone network to competition (with resale, unbundled 
network elements, collocation, number portability, construction and 
interconnection of new facilities, etc.) is inevitably complicated and 
slow. Moreover, our authority to effectuate changes is shared with our 
state colleagues. But (as I described more fully in a January 1999 
speech supplied in response to Question 
A. 16), I believe we are generally on track and beginning to see the 
desired results. Generally speaking, most Americans are receiving more 
and better communications services, and paying less, than ever before.
    Similarly, with respect to telephone service in rural areas, we 
have not yet completed adapting federal support mechanisms to a 
competitive environment. The analytic and political difficulties are 
quite substantial. But while we try to craft a compromise regime that 
will assure affordable universal service for all, we have taken steps 
to ensure that there is no diminution of support available to rural 
subscribers, and telephone service remains affordable throughout the 
nation.
    One indication of the FCC's success in achieving its missions is 
the tendency of other nations to follow the U.S. example. The policies 
of the Communications Act and of FCC rulemakings as well as the concept 
of an independent commission are being emulated in many countries 
around the world.
    10. Who are the stakeholders in the work of this agency? Our 
principal stakeholders are the 273 million Americans who depend on 
communications to conduct their businesses, communicate with their 
families and friends, obtain news and information, and be entertained. 
Various statutory provisions also require particularized attention to 
the needs of low-income consumers, those in rural, insular, and high-
cost areas, students and teachers, library patrons, rural health care 
providers, and people with disabilities. Other stakeholders include 
various industry sectors: large and small incumbent and competitive 
telephone companies, cable operators and programmers, radio and TV 
broadcasters, wireless carriers, satellite operators, international 
carriers, equipment manufacturers, law enforcement officials, public 
safety officials, and information service providers, among others.
    11. What is the proper relationship between your position, if 
confirmed, and the stakeholders identified in question number ten. In 
every proceeding presented to the Commissioners, I believe it is our 
responsibility to review the law, afford all interested parties an 
opportunity to express their views, consider these views and the 
recommendations of our staff and to reach our best possible independent 
judgment on the merits. I do not believe we should favor or disfavor 
any particular consumer group or industry sector but rather provide a 
neutral forum that rules fairly, wisely, consistently, and 
expeditiously. Ultimately, our responsibility is to the law and to the 
American people, subject to your oversight and that of the courts, not 
to any particular group or sector.
    12. Please describe your philosophy of supervisor/employee 
relationships. Generally, what supervisory model do you follow? Have 
any employee complaints been brought against you? I have a personal 
staff of five--three professionals and two administrative. As a result, 
I find it reasonably easy to stay informed of their activities and 
provide whatever direction is required. Each of my advisors has direct 
access to me at any time, day or night, and we communicate regularly in 
person, by e-mail, and by telephone. I rely on my staff for their 
expertise, judgment, and discretion, but I alone am responsible for the 
decisions I make.
    No employee complaints have been brought to my attention. Indeed, I 
have been fortunate to have an exceptionally able staff that has served 
for unusually long periods of time relative to the average tenure for 
legal advisors.
    13. Describe your working relationship, if any, with the Congress. 
Does your professional experience include working with committees of 
Congress? If yes, please describe. The Commission was established by 
Congress to implement its communications laws, and I am committed to 
consulting with Congress to insure that we are fulfilling our duties to 
the American public. Over the past five years, I have worked closely 
with Congress in a variety of ways. Throughout my tenure, I have 
regularly made myself available to Members of Congress, on both sides 
of the aisle and both sides of Capitol Hill to discuss issues, brief 
them on developments at the Commission, and solicit their views and 
concerns. I have participated in numerous group and one-on-one meetings 
with Senators and Representatives and conferred in person or by 
telephone on scores of occasions with congressional staff.
    More formally, I have testified at periodic oversight hearings held 
by the House and Senate Commerce Committees, and their Communications 
Subcommittees. I have also testified before several Senate Commerce 
Communications Subcommittee field hearings on slamming, before the 
Senate Government Operations subcommittee on slamming, and before the 
House Judiciary Committee on mergers. I have responded to many 
congressional letters.
    Prior to my experience at the Commission, I worked with committees 
of Congress both as assistant counsel to the House Banking Committee 
and, later, as the head of a coalition striving to increase the number 
of women in the federal judiciary.
    If confirmed, I pledge to continue to work closely with Congress to 
ensure that the laws are faithfully implemented.
    14. Please explain how you will work with this Committee and other 
stakeholders to ensure that regulations issued by your board/commission 
comply with the spirit of the laws passed by Congress. Over the past 
five years, I have tried my best to take into account the views and 
concerns of the members of this Committee and to keep you informed of 
our activities. If I am confirmed for another term, I will continue to 
listen to any Member, at any time, regarding whatever issues we are 
considering.
    I recognize that members at times have differing views about the 
meaning of various statutory provisions. I will read and reread the 
law; and I will stand ready to explain the reasons why I believe every 
vote that I cast is consistent with the letter and spirit of the laws 
passed by Congress.
    15. In the areas under the board/commission jurisdiction, what 
legislative action(s) should Congress consider as priorities? Please 
state your personal views. I hope Congress will pass legislation 
confirming that a license to use radio spectrum is a conditional 
privilege and is not an asset that can be treated as part of an estate 
in bankruptcy and therefore tied up for years. I also hope Congress 
will support (though no legislation is needed) the proposed 
establishment of a new Enforcement Bureau and Consumer Information 
Bureau. I look forward to Congress completing action on the Satellite 
Home Viewer Act and Intelsat privatization. I also hope that Congress 
adopts a program for tax certificates to facilitate first-time minority 
and female owners' investment in broadcast properties.
    I would like Congress to consider giving the Commission authority 
to set fees for private use of the radio frequency spectrum so that the 
American public reaps the benefit of spectrum usage.
    16. Please discuss your views on the appropriate relationship 
between a voting member of an independent board or commission and the 
wishes of a particular president. Fundamentally, I believe that FCC 
Commissioners must exercise independent judgment on all matters coming 
before the Commission. I listen closely to, and consider carefully, 
whatever recommendations are made by industry chieftains, members of 
the public, and political leaders, both in the Congress and in the 
Administration (including the President), but at the end of the day I 
believe that each Commissioner must exercise his or her own best 
judgment, within the statutory framework established by Congress.

    Senator Burns. Thank you very much, Commissioner. We've 
been joined by the distinguished Senator from North Dakota, 
west of the river, we might add, Senator Dorgan.

              STATEMENT OF HON. BYRON L. DORGAN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Dorgan. Mr. Chairman, thank you very much. I'm 
pleased to be here to support the nomination of Commissioner 
Ness. I think Senator Rockefeller indicated that this is a 
Commission that very much needs her continued leadership. We 
have four other members of the Commission who are relatively 
new. I voted for all of them and I'm proud they're there, but 
Commissioner Ness has been there and is the, as Senator 
Rockefeller indicated, the institutional memory.
    But, more important from my standpoint and I think the 
standpoint of perhaps you and others, Mr. Chairman, is as we 
implement the Telecommunications Act, the use of the Universal 
Service Fund to build out the infrastructure for advanced 
telecommunications services will have a lot to do with how this 
country looks in the future. It will have a lot to do with 
where people live, where jobs are created, where people move, 
where people do business.
    If we have a country in which there is a digital divide and 
small towns and rural areas do not have the larger pipes or the 
advanced services through which data can move, they are 
destined not to attract economic development and jobs and new 
opportunities. They are destined to be in that circumstance. We 
must avoid that at all cost, and we must take steps and actions 
to make sure that the Universal Service Fund is used as the Act 
was written and intended.
    The Universal Service Fund in the Telecommunications Act is 
designed not only to facilitate the services of telephones at 
affordable prices, and comparable service but in addition to 
that, we wrote into the Act that it relates to advanced 
telecommunications services or broadband, as well, so the 
connection of the Universal Service Fund to that requirement 
and that opportunity is critically important. There's no one on 
the Commission who has a better understanding of that or 
understands the urgency of that better than Commissioner Ness. 
As someone representing a rural state, it is imperative that we 
keep Commissioner Ness on that Commission fighting for those 
issues.
    This is not a case of her fighting our fight on these 
issues at the expense of someone else. This isn't a zero-sum 
game. It is the fact that the implementation of the 
Telecommunications Act is working quite well in some areas of 
the country. There is robust, aggressive competition where 
there is an income stream to justify it, and we all understand 
that.
    I just had a meeting a moment ago when a colleague of mine, 
Senator Burns, took out his Palm VII and someone said, ``Is 
that wireless?''
    He said, ``Yes, but it doesn't work in Montana.''
    And the point he was making just by answering the inquiry 
was yeah, this is wireless and it's wonderful, I'm glad I have 
it this morning in Washington, DC but in Montana, it doesn't 
work. Wouldn't work in North Dakota, either, because we don't 
have ubiquitous services all across this country and the build-
out isn't occurring at the same pace in all areas.
    I think everyone at this dais at this point has an interest 
in seeing that rural areas experience the full flower of 
opportunity coming from the Telecommunications Act. No one on 
the Commission has as strong a voice on those issues as 
Commissioner Ness. That is why this hearing is important. I 
deeply appreciate your holding it. I hope we can move 
expeditiously on this nomination.
    Senator Burns. Well, like I said, the Chairman has already 
indicated that he is going to move this nomination out of 
Committee so we're happy about that.
    Commissioner Ness, thank you for coming this morning. Let 
me start off by--I don't know of anybody that I've had the 
opportunity to work with since I come to Washington, DC, and 
since you were put on the Commission that we have had a very, 
very good working relationship and I want--and I appreciate 
your accessibility. Also, we've done some things in the country 
and you've been very, very, very active in furthering those 
things, and those things we are concerned about in rural areas 
and how universal service works and how we are seeing the roll-
out.
    There's a couple of areas that I have concerns about, if 
you would just help me along a little bit, that has to do with 
Section 706, of course, in the Telecom Act. I had quite a lot 
to do with that Section and the build-out of technology into 
rural areas and this type thing and broadband deployment in 
this thing.
    Could you give the Committee your view of the current state 
of that broadband roll-out in America and specifically in rural 
areas? How do you think we're progressing in implementing 706?
    Ms. Ness. Thank you, Senator. We have been working very 
hard to implement Section 706. I think it was an inspired 
section of the Act because it is vital that all areas of the 
country have access to advanced communications under a roll-out 
that is reasonable and timely.
    We have convened, together with our colleagues at the State 
Commissions, a Joint Commission to hold a series of hearings 
across the country. I'm going to be participating in a number 
of those hearings to determine to what extent the roll-out is 
taking place and what impediments there may be to a more rapid 
roll-out. We've instituted a couple of proceedings, one of 
which is dealing primarily with Indian reservations, to ensure 
that advanced communications do not stop at the door of the 
reservations.
    We are working with rural telephone companies to make sure 
that they are full participants in this process.
    Senator Burns. Do you think the Commission has been 
aggressive, as aggressive as it should have been in 
implementing 706?
    Ms. Ness. Senator, we can always do more, as we attempt to 
implement that section. We are hoping, by virtue of our 
upcoming report, to look over all of the issues soup to nuts.
    Senator Dorgan. Give me an idea of when you start looking 
at a section like that in the deployment of broadband, have we 
had a disagreement on the Commission on how it should be 
implemented or what the Commission should be doing. We're 
seeing now some broadband move into rural areas. Now, let's 
face it, now, in my state of Montana and like the state of West 
Virginia and the state of North Dakota, we are not exactly--
Billings, Montana may be rural by the measurement that we use 
nationwide, and then when we go to Lewistown, Montana, that's 
frontier, and going back to some old terms used in Medicare and 
things. But we're seeing some things happen out there. We think 
probably it just hasn't happened fast enough.
    Ms. Ness. Senator, the transition from narrowband to a 
broadband economy is happening far more rapidly than anyone 
would have expected. It does require a tremendous amount of 
investment on the part of providers of these services. We're 
trying to do everything we can to have multiple opportunities. 
For example, in some rural areas it could very well be that 
wireless is a great solution to reach hard-to-reach areas. 
Satellites may very well be a way of reaching many of these 
communities and so we have, in fact, a proceeding underway on 
satellites to determine how they can participate more actively 
in providing universal service with broadband facilities. 
Again, this is vitally important and we are trying to see where 
the impediments are and what we can do, proactively, to move it 
along more rapidly.
    Senator Burns. Senator Dorgan is exactly right on the 
build-out, and if we're going to have any kind of economic 
chance to stay up with the rest of the world in a national or a 
global economy, broadband is essential out there. We've got a 
situation now in rural America that is not a very pretty 
picture, and until America wants to pay more for its bread, 
we're going to continue to be in a very, very--in an economic 
state that we're very uncomfortable in in our area, so we know 
it's very important. Senator Brownback?
    Senator Brownback. Thank you very much, Mr. Chairman. Thank 
you, Commissioner Ness, for coming in front of the group and 
answering some questions.
    I want to turn if I could to some specific questions 
regarding particularly Bell Atlantic's application to get into 
in-region long distance service in New York, but not so much 
that but the template it sets for future roll-outs there.
    In the separate statement that you issued in conjunction 
with the Commission's approval of Bell Atlantic's application 
to provide in-region long distance service in New York, you 
indicated that it would have been in your words unfair to 
penalize Bell Atlantic for its record on DSL loop performance 
at this time, close quote. You state that, quote, because the 
consumer market for broadband services has only recently begun 
to develop, end quote, the FCC collaborative process did not 
adequately address the ordering and provisioning of DSL-capable 
loops. Then you go on to say that our evaluation of future 
applications will be focused on this issue.
    Now, in reading all of those together it sounds a lot like 
that you may be favoring an ever-expanding checklist before 
other applicants are going to be allowed these same 
opportunities that were provided to Bell Atlantic, and I'm 
concerned if that is the case, if there's going to be more 
items on the checklist, that people don't know about, and I 
would like for you to tell us today, is the checklist set now 
for applicants seeking to provide that long distance service?
    Ms. Ness. Yes, Senator, the checklist is set. When Congress 
enacted the Telecom Act, the checklist was very clear. In 
implementing that act, we have been working cooperatively with 
the carriers so that they know what is expected of them.
    Broadband delivery of DSL services is a telecommunications 
service. Loops must be made available. There are technical 
issues associated with providing DSL-ready loops. We have been 
trying to work through these technical issues with the 
carriers. I felt in the case of New York that during the 
collaborative process, we had not talked sufficiently about DSL 
service because it was just beginning to roll out, and I 
thought it would be unfair to weigh that piece so heavily.
    Going forward, DSL, as we talked a few minutes ago, is 
rolling out much more rapidly than we would have earlier 
envisioned. It is important competitively and it is one service 
that we are and will be focusing on.
    Senator Brownback. So the checklist for future applications 
will remain the same as it was for Bell Atlantic's application 
when it went through the FCC?
    Ms. Ness. The requirement to make loops available, yes.
    Senator Brownback. And there will not be additional items 
added to the checklist.
    Ms. Ness. I do not believe this is an additional item, it 
is focusing on specifically making sure that there are 
telecommunications loops available.
    Senator Brownback. I want to make sure that companies in 
making their applications know here's the hurdles we have to 
clear and that they're set and there are not additional ones 
that are put after the first one has been cleared.
    We passed the Act in 1996. We're now in 2000 and it seems 
like it's taken quite a while to implement this Act, and I 
would hope that those checklists could be set, firmed up and 
everybody know what they have to meet to get into long distance 
services.
    In your statement accompanying the Commission's May 7, 1997 
Universal Service Order you indicated you thought the FCC had 
made substantial progress and established a clear timetable for 
implementation of that Telecommunications Act which was enacted 
into law February 8th of 1996, which in telecommunications 
development is ancient history, I suppose, given this rate of 
change.
    Did you really think that 4 years after the bill became law 
that the FCC would still not have fully implemented the high-
cost provisions of Section 254? Do you consider how long it has 
taken and how much further we have to go for a clear timetable 
there?
    Ms. Ness. Senator, certainly universal service, in 
particular, high cost, is an area we care about tremendously. 
That's one of the cornerstones of the Act. I would have liked 
to have taken less time. It is very complex. We have been 
proceeding in a manner to ensure particularly in rural and 
high-cost areas that everyone has access to telecommunications 
at comparable rates and comparable services. When you try to 
revise pieces of this, you want to do it carefully so that you 
don't cause any harm, and we believe that we've done that. 
We've completed work with the larger carriers. We're working 
closely with the rural carriers to ensure that they can 
continue to provide the wonderful services that they provide to 
the rural community without displacement. We have come a long 
way to accomplish that working with our colleagues in the 
states and I think we're well on track to have completed that.
    Senator Brownback. If I might submit to you, 4 years is a 
long time, given the rate of change that's taken place in 
telecommunications and the platform for the new economy that 
it's providing, and by not having this issue resolved, it 
further impedes investment into rural and other high-cost 
areas. I would really hope we could step, you know, step up the 
implementation of that so the rural areas and those providing 
telephony and other services would know what they've got to 
work with. I think that's just an important thing to have.
    One final question, if I could. Last year I introduced 
legislation that prohibits the application of spectrum caps to 
new spectrum that is auctioned in the future. One of the 
reasons I introduced the bill was to accelerate the 
introduction of advance services, including wireless Internet 
access and other data services, for which operators need 
substantially more spectrum in order to provide the service. 
Given the fact that some of the spectrums from C and F block 
licenses is not currently being used, is it safe to conclude 
that relief from the spectrum cap could be granted for these 
licenses without risking industry consolidation? If so, 
shouldn't relief be granted to ensure that advance wireless 
services develop without behind relevancies?
    Ms. Ness. Senator, I care very much about competition and 
the availability of advanced services, particularly wireless 
services. This is a matter that is currently before us, and we 
will take your views under advisement. Recently, we implemented 
another requirement, which is to make available by auction 
channels 60 to 69. We did so without putting a spectrum cap on 
that. That's another swath of spectrum that will be available 
for advanced services.
    Senator Brownback. Well, I'd hoped that we could provide 
those and make them available so that more of the advance 
services would be available. Mr. Chairman, thank you very much.
    Senator Burns. Senator Rockefeller?
    Senator Rockefeller. Thank you, Mr. Chairman.
    Commissioner Ness, when I made my introductory remarks----
    Senator Burns. Excuse me, Senator, I don't want to 
interrupt you but we've got a vote on. How do you want to do 
this? I'll go vote.
    Senator Rockefeller. OK, and then we'll come back.
    Senator Burns. OK.
    Senator Rockefeller. It's very interesting, in fact, that 
our Committee system was in fact set up many, many years ago 
having absolutely no idea of the science and technology kinds 
of changes. Then you have the phenomenon of a Senate where, oh, 
I guess there's maybe a couple in their 40's, 50's, 60's, 70's, 
80's and 90's are the ages, and so therefore, our making a 
policy or deciding not to make policy for the purposes of the 
advancement of science and technology in telecommunications is 
very important. But it also, I think, means that the Federal 
Communications Commission is even more important, because we 
really don't have the experience by virtue of generation, 
although many of us are trying, that the Commission does, and 
particularly you, because as I indicated, you are the only 
member of the Commission who has served since, you know, the 
Telecommunications Act was passed.
    Senator Brownback indicated that that was really a very 
long time ago, but it seems like yesterday, and what I would 
like to do, if you would sort of reflect on some of the issues 
that--you've learned from this very kind of difficult 
transition from what appeared to be a relatively clear act to 
the four years. That includes, as I indicated, under-funding, 
getting sued for every single thing that you do or whatever. 
But what is it that you've learned? Because I think your 
experience is really important here.
    Ms. Ness. Thank you very much, Senator. Yes, I have 
participated in the implementation of the entire Act and, as a 
result of that, I've had a chance to see the interplay of all 
of the sections of the Act, in particular, how we go about 
meeting the goals, the interplay of the goals of competition, 
for example, and serving rural communities.
    I'm very sensitive to these types of issues. It's given me 
an opportunity to understand the relationships that we have 
with the states, how we work together to provide seamless 
transition from monopoly to competition. It's given me an 
opportunity to work with some of our foreign colleagues, to 
find ways to work together to introduce competition abroad.
    We stand as a model for many countries in how one opens the 
market to competition and so the experience of implementing our 
Act has helped us to work globally as well as nationally.
    Lastly, it has also shown me the impact that all of our 
activities have on consumers. I want to make sure that the 
consumers at the end of the day reap the benefits of all that 
is going on in the communications arena. Thank you.
    Senator Rockefeller. Thank you. Senator Snowe and I later 
this week are going to be introducing a rural 
telecommunications bill that addresses what Senator Dorgan is 
also very concerned about, and that is the build-out of 
broadband in rural areas or, rather, the lack of build-out. And 
it's very interesting to look at what Bell Atlantic and others 
plan in terms of broadband in West Virginia, and it basically 
covers five of our 55 counties and ignores all the others. And 
that gets you into another definition of the digital divide, 
not just the use of computers but the use of data flow, 
individual, you know, flow, and all the rest of it and at what 
speed--you know, what's the upload, what's the download time, 
et cetera.
    And so Senator Snowe and I are going to be introducing this 
bill which provides a tax credit to them. And I'm not 
necessarily a tax credit type of Senator, but I think that, you 
know, if that will help telecommunications expand and build out 
into rural areas, and we define rural areas in a particular 
way--and this doesn't go on forever. This is sunsetted after 3 
years, but we want to give them the start.
    Can you sort of look out at the future on the question of 
the digital divide? Most people on this Committee come from 
rural states and very much like the Finance Committee, which 
used to be an Oil and Gas Committee, is now pretty much a rural 
Committee, and I would just be interested in your concept in 
terms of what it might be like in 10 years or what needs to 
happen over those 10 years.
    Ms. Ness. Senator, the beauty of telecommunications and 
broadband communications is you can create industries any time, 
any place. This presents a great opportunity for rejuvenation 
of rural economies, so I'm very excited. In fact, I'm bullish 
on doing what we can to make sure that the rural areas have 
access to broadband telecommunications facilities. Just because 
a fiber line passes by a rural community doesn't necessarily 
mean that the inhabitants of that community will have access to 
those facilities. We want to find ways that we can make that 
happen.
    But in my view, there will be, because of changes in 
technology, declining costs in so many of these delivery 
mechanisms. We have an opportunity to make sure that rural 
areas can partake and benefit from these technologies.
    Senator Rockefeller. You know, Senator Dorgan said that 
comparable services include not just universal service but also 
broadband, and that's in the law, and yet here I am offering a 
tax credit bill to try and entice companies to do something 
which under the law they ought to be doing, and that worries 
me. And even the tax credit bill which Senator Snowe and I are 
going to introduce, I think the telecommunications companies 
like that but, on the other hand, even that will not cover all 
of West Virginia. It's only going to be--or all of Maine or all 
of North Dakota. It's just going to be an increment of 
improvement and I think that, you know, I just think that's 
terribly important.
    I visited in one of our most remote communities last week. 
I was in two of them, and in one of them, there was an Internet 
company because there had been a special build-out for them but 
for nobody else within a hundred miles in any direction.
    Ms. Ness. One of the things that I've asked the Joint Board 
to do this year is to re-examine the definition of universal 
service. It is an evolving set of obligations and we will be 
looking at that probably beginning this summer.
    Senator Rockefeller. Thank you.
    Senator Dorgan. Commissioner, I believe neither Senator 
Snowe nor I have voted and there's a vote probably about to 
finish so we will have to leave in a moment, and I'm unable to 
come back because I'm Ranking Member on an appropriations 
subcommittee that is meeting as well, so I have to be there. 
But let me mention a couple of quick items, and I'll be very 
brief. First of all, there's no living American who can 
interpret his or her phone bill these days. You know, you get a 
phone bill for 25 dollars and it's eight and a half pages and 
completely not understandable.
    I mean, there's no way to interpret or to understand it. 
And I actually just made some calls to the carrier some while 
ago just for fun to see if they could explain it to me and they 
couldn't, so the people who sent me the bill don't know why 
they send me the bill, and it's eight to ten pages for $30. So 
that's not your fault, but would you work on that?
    Ms. Ness. We have approved a truth-in-billing rulemaking to 
try to address some of these problems so that everyone knows 
exactly what is on their bill and that there is simple language 
identifying the charges. But I sympathize with you, Senator. 
Just recently I received a bill and I looked at it and I could 
not believe the charges because I made one international phone 
call and had not presubscribed to an international plan.
    Senator Dorgan. Second on the issue of truth in billing, I 
have felt that you should connect access charge reform to 
universal service. What's happened is you're giving companies 
access charge reductions to the tune of billions of dollars and 
they take those reductions and they smile and they say that's 
fine, we like that, but now what we're going to do is to tell 
the consumer in one line on our billing the universal service 
requirement. So they put a few dollars on that phone bill that 
says, ``Here's what we've got to do because the government says 
we have to do it.'' This is the additional charge. They don't 
tell the consumer the full story. They also had a reduction, 
incidentally, that exceeds that additional charge. Truth in 
billing would require that they tell the customer the whole 
story, and that is something we ought to be concerned about. I 
think you ought to tie access charge reform specifically to 
universal service--connect those two numbers.
    Finally, the Senator from Kansas raised a point I just want 
to make briefly. We set up the checklist not as a barrier, 
necessarily. We want those companies that want to meet the 
checklist, go through it, and become competitive and do long 
distance. We want them to do that and so we want the checklist 
not to be an insurmountable barrier, but the reason that this 
hasn't happened as quickly as some would suggest. The Senator 
from Kansas wondered why some companies have not made it a 
decision, and they want to make the checklist. It requires a 
company that says my company's goal is to meet this checklist, 
then take steps to do it.
    Some companies have been pretty slow off the blocks in that 
regard, but for those that want to (and now many of them do), 
we don't want meeting the checklist to be an insurmountable 
barrier--we want it to be reasonable. I'm going to ask--Bob 
Rowe from the National Association of Rural Utility 
Commissioners is working on a regional test to OSS testing 
under the 271 process. I would like for you to share your 
thoughts with the Committee on that. And I probably won't be 
able to listen to them, and so if you will perhaps send me a 
note on that, I would appreciate it. I've got to go vote. Did 
you vote?
    Senator Burns. Yes.
    Senator Dorgan. Well, easy for you to laugh, then. We 
haven't voted and I have been taking some time that Senator 
Snowe perhaps wants to take as well, so Commissioner Ness, 
consider those issues. Thank you for being here. I'm a strong 
supporter of your nomination. Thank you very much.
    Senator Burns. Senator Snowe.

              STATEMENT OF HON. OLYMPIA J. SNOWE, 
                    U.S. SENATOR FROM MAINE

    Senator Snowe. Thank you, Mr. Chairman. I'm sorry that I 
wasn't able to be here earlier but there are so many 
conflicting meetings this morning.
    I want to take this opportunity to welcome Commissioner 
Ness to this Committee and for her nomination for a second term 
on the FCC. I applaud her for the work that she has done, 
particularly in the area in upholding the universal service 
subsidy and providing the discounts to schools and libraries 
and health care facilities in all parts of the country. And 
beyond her commitment in providing leadership at the FCC and 
chairing the Joint State-Federal Board on Universal Service. 
Commissioner Ness also is very knowledgeable and experienced in 
so many of the telecommunications matters that are going to 
have an impact on the future of this country and is also 
committed to enforcing the laws as Congress intended.
    Commissioner Ness, we appreciate your commitment to 
enforcing the laws according to the spirit of the statutes as 
passed by Congress over the years concerning 
telecommunications.
    As Senator Rockefeller indicated, I do share his concern 
about the extent to which competition has reached the rural 
areas. Certainly, the intent of the Telecommunications Act in 
the deregulation of the telecommunications industry was to 
bring competition to the rural areas of the country, as well. 
That has been much slower, and I hope that the FCC and you will 
give it specific attention, particularly in terms of bringing 
broadband to rural areas, and that's why Senator Rockefeller 
and I are looking at providing a tax credit as a way of 
expediting broadband delivery to rural areas. In addition, I 
hope that you can address this Committee in terms of what the 
FCC is doing to bring about competition in all areas because it 
is going to continue to make a difference in the have and have-
nots technologically in America.
    The second area of interest and of concern perhaps is the 
mergers that are taking place. And obviously, we've seen a 
ground-
breaking, unprecedented merger between AOL and Time-Warner that 
may or may not have advantages or disadvantages at this time. I 
think it is difficult to say, but I would also appreciate your 
views and perspective on these mergers and what kind of 
benefits or disadvantages do they bring to the consumers and 
what can we expect in the future.
    So again, Commissioner Ness, thank you for the work that 
you have done and I hope that we can expedite your 
reconfirmation here because I think you have done a superb job 
on the Commission. Thank you, Mr. Chairman.
    [The prepared statement of Senator Snowe follows:]

  Prepared Statement of Hon. Olympia J. Snowe, U.S. Senator from Maine
    Mr. Chairman, the world of telecommunications is changing and 
advancing at an unprecedented pace, which leads to ever-increasing 
demands on the FCC. In light of these rapid changes and increasing 
demands, it is critical that prospective FCC Commissioners have the 
knowledge, experience, and ability to forge coalitions that are needed 
to effectively do their jobs. All of these attributes are possessed by 
Commissioner Ness, and I strongly support her re-appointment 
accordingly.
    Mr. Chairman, I believe that Susan Ness is not only well-qualified 
to serve at the FCC during this critical juncture in telecommunications 
history, but she has also proven herself to be invaluable member of the 
commission who would leave a substantial void if the full Senate fails 
to re-confirm her in the weeks/months ahead.
    For instance, not only does Commissioner Ness chair the Federal-
State Board on Universal Service--a job that requires a close working 
relationship and ability to build coalitions with state and local 
governments and private companies--but she has also led the charge for 
American interests as the lead representative from the FCC at the 1995 
and 1997 World Radio Conferences.
    However, there is more to being an FCC Commissioner than simply 
being knowledgeable of the issues or the leader of a delegation--there 
is also a need to be a stalwart for enforcing the laws passed by 
Congress as intended, and to have a vision for how the numerous 
policies carried out by the FCC will converge and impact Americans for 
years to come.
    Again, I believe that Commissioner Ness has a proven record in this 
regard, and I hope that she will use today's hearing to highlight not 
only her credentials and experience, but also her zealousness to 
enforce the laws as intended and her vision of telecommunications in 
the next century.
    In the process of laying out her vision for the 21st Century, I do 
not ask that Commissioner Ness pre-judge matters that are currently 
before the FCC or that will likely be before the Commission in the 
upcoming months. Rather, I am hopeful that she will give us a broad 
view of how she sees telecommunications technologies affecting the 
lives of the American people and what role she sees the FCC playing to 
facilitate the development and introduction of these technologies in 
the marketplace. Because ultimately, new technologies are not created 
to simply ``build a better mousetrap''--rather, they are built to 
better people's lives.
    I would like to thank Commissioner Ness for being with us this 
morning, and look forward to a robust discussion of her experience and 
vision that will shape her approach to numerous telecommunications 
issues in the years ahead.
    Ultimately, I believe Commissioner Ness stands second to none in 
terms of her experience and qualifications to serve a second term at 
the FCC, and urge that my colleagues move toward the rapid 
consideration and re-confirmation of Commissioner Ness in the weeks 
ahead. Thank you, Mr. Chairman.

    Senator Burns. Did you want to react to that question of 
the effect of the mergers?
    Ms. Ness. I would be happy to. First, to the question as to 
what we expect to see in the future, I think we're in line for 
many, many more mergers as companies are going global. As 
companies continue to consolidate, it is a time of uncertainty, 
and one way of addressing uncertainty oftentimes is to combine. 
Many of these mergers will provide great consumer benefits, 
some will not. And it's the role of the Commission to make a 
determination whether a merger is in the public interest and, 
if not, is there something that can be done to ensure that it 
would be in the public interest?
    We have tried to exercise that obligation with sensitivity 
and restraint. What we have not done as well as we should is to 
do it more rapidly, and that is one commitment that I make to 
try to see to it that our process works more rapidly, because 
when you're in the middle of a merger, you lose out on many of 
the benefits of competition in the marketplace because you are 
so focused on completing that merger.
    Senator Snowe. Thank you.
    Senator Burns. Thank you, Senator Snowe. Going on in this, 
in some mergers I think you're entirely correct, some mergers 
are beneficial to the consumer and also the way we do business, 
some are not, and you have to look I guess at mergers on a 
case-by-case basis.
    It's interesting the AOL and the Time-Warner. Up until this 
point, I think the Internet was sort of technology driven. And 
we knew at some date content would take over and be the driving 
force of the Internet, and I think we have entered the era of 
that. There are some areas of that that concern you, there are 
some areas that I think will be very beneficial.
    Sometimes when mergers happen, everybody that is under that 
same tent it seems like it's very competitive with each other, 
and if that competition continues, why, I think that's a very 
good sign.
    Let's go into another area. And I still have some concerns 
about low-power radio. It just seems like the Commission 
without the direction of Congress just took off and started 
making policy with regard to low-power radio, and some of our 
most vocal critics has been those folks in public radio, the 
translater interference, this kind of interference, and I would 
just like your view on low power. Why do you think the 
Commission has to take an active role that goes beyond the 
intent, what I believe is not the intent of Congress?
    Ms. Ness. Senator, we have seen a great consolidation in 
radio, and as a result of that, many community groups are not 
in a position to be able to take advantage of this extremely 
important medium. I care very much about enabling these voices 
to have an opportunity to broadcast, but I also care very much 
that we do not destroy the integrity of the FM band and thus, 
my involvement in this has been to ensure that the integrity of 
the FM band is preserved, that we do not have interference with 
existing radio stations. I also want to make sure that existing 
radio stations can transition into the digital world by going 
digital. So I took it upon myself to look at those issues as we 
considered this new service.
    I've been told by our engineers this is not a problem. I am 
very concerned about translators. And if it turns out that 
there is a specific problem, I would like to address it.
    Senator Burns. Why would we--even though the engineers at 
the FCC maybe do not have the same concerns as engineers across 
the country, I mean, I've not been into one major market and 
talked to engineering people that do not have concerns. Why do 
we have this difference of opinion?
    Ms. Ness. Senator, I am concerned about interference. I can 
tell you that the engineers at the Commission are very 
dedicated engineers. They've looked at it in a number of 
different ways. We did not go ahead with second adjacent 
channel. I made sure that was completely off the table. We did 
not go ahead with thousand-watt stations. I made sure that was 
completely off the table. I wanted to make sure that if someone 
had to move from one tower to the next, for example, because 
there was a digital television station coming in, whatever it 
might be, that they would be protected.
    I am concerned about translators. They provide a wonderful 
service in the United States. I am told that the engineering 
works. If it does not work, if there is interference, we need 
to know about it and we need to address it.
    Senator Burns. That's sort of trying to address the stolen 
property after the horse has left the barn. If you do have 
problems, it's pretty hard to recall those licenses.
    Ms. Ness. Our engineers who have been involved in broadcast 
for a very long time tell us that under these parameters, the 
parameters that have been set, that this should not cause undue 
interference. I will be vigilant to ensure that such is the 
case because, as I said when we started the conversation, I 
care very much about the integrity of the FM band.
    Senator Burns. Let's go from that, from low power. You see, 
I have the opinion that even though low power and some folks 
who want to put a low-power station should go through the same 
rigors of establishing a radio station that any other 
commercial broadcaster or public broadcaster makes when they 
establish an entity to do that and apply for spectrum in order 
to do it.
    Let's go from there to cross-ownership, your views on 
cross-ownership. We have between newspapers and cable and 
broadcast industries and those entities, I would like your 
views on that, please.
    Ms. Ness. Certainly, Senator. The world has changed. The 
world has changed dramatically over the last couple of years 
and it seems to me that it is timely for us to be looking at 
the cross-ownership rules. I believe an item was just delivered 
to us that will address cross-ownership of both television and 
radio with newspapers, and I intend to look very carefully at 
the issues raised when I vote that item.
    Senator Burns. Do you have a guiding principle whenever you 
start making these decisions on cross-ownership?
    Ms. Ness. I look at the marketplace, not as it has been, 
but where it is and where it is going in the future. I do not 
believe in regulation if it is not essential to preserve 
certain underlying values. I care about diversity of voices in 
the marketplace but again, I want to make sure that our rules 
are not overly restrictive. And certainly, the broadcast 
ownership rules that we approved last summer suggest that it is 
a very different world based upon the underlying values of the 
Telecom Act.
    Senator Burns. Give me a for-instance. We have--let's just 
take my home town. We've got I think five or six FMs and maybe 
four AMs and one newspaper. Is there any way that you have a 
philosophy on should the newspaper be able to own--and we have 
three television stations. Any guiding light on should a 
newspaper in Billings, Montana be able to own a broadcast 
property there under those conditions?
    Ms. Ness. Senator, I'm not familiar with your market. As an 
underlying principle I would say once again if there is 
diversity of voices, that is important, but I would also--I 
also understand that there are a number of different proposals 
that are on the table that would look at size of market, for 
example, and until I've had an opportunity to hear those 
proposals and talk with folks, I would be hesitant to give you 
an opinion. The only thing I will commit to is that I will look 
very carefully at the issues because we're in a changing 
economy, and I know that all broadcasters and newspaper 
publishers are trying their best to compete in what is a 
rapidly changing world.
    Senator Burns. Thank you, Commissioner. We have been joined 
by Senator Cleland. Senator? We welcome your comments and if 
you have any questions of the Commissioner. Thank you for 
coming.
    Senator Cleland. Well, thank you very much, Mr. Chairman. I 
couldn't help but compare your home town with my home town. My 
home town had no radios, no television, no newspaper, which is 
why I got elected. Mr. Chairman, today----
    Senator Burns. That's like the old Harry Truman statement: 
Spend the first 6 months when you're here trying to figure out 
how you got here, then the next 6 months trying to figure out 
how everybody else got here.
    Senator Cleland. Glad to be with you, Ms. Ness. Thank you 
for the job that you've done.
    Ms. Ness. Thank you, Senator Cleland.
    Senator Cleland. May I say that you're asking us for an 
additional 5-year term as a member of the FCC. In Georgia, your 
oversight as a member of the FCC is pretty important to us. It 
means millions of dollars in funding for school children and 
libraries to access the Internet. It means children's 
educational programming. It means insuring spectrum access for 
utility workers after a tornado enabling the troops of the 82d 
Airborne at Fort Benning to have more than adequate 
communication capability with their commanding officers when 
performing defense maneuvers. I'm an old Army Signal Officer so 
I know that very well.
    It means guidance along the road to local telephone 
competition. It means developing further robust competition 
among Internet service providers. More and more of them are 
making their homes in my state and access to broadband 
services--a number of services in addition to just telephone. 
It means media integrity.
    I look forward to hearing some of your ideas about your 
philosophy of the last 5 years of service and what you would 
like to do the next five. Mr. Chairman, I have a couple of 
questions.
    Senator Burns. You may proceed.
    Senator Cleland. Ms. Ness, as you know, Section 706 of the 
1996 Telecommunications Act encourages the deployment of 
``advanced telecommunications capability.'' The report the FCC 
issued in response stated that this technology is being 
deployed on a timely basis. I would like to know what is your 
opinion on the employment of advanced services and what type of 
role do you see the E rate Program playing in achieving the 
goals of Section 706?
    Ms. Ness. Senator, we have endeavored to review the 
deployment of advanced services every year. That report was a 
snapshot at the very beginning. We are conducting hearings 
around the country together with our state colleagues to see 
how well the deployment is progressing and whether it is 
leaving certain communities behind. We hope to identify any 
barriers to deployment, and to take action on those barriers. 
So while the initial report suggested that it was rolling out 
in timely fashion, we are continuing to be vigilant to see if 
that continues to be the case and whether any communities are 
being left behind. It is a vital opportunity, particularly for 
rural communities, for economic growth to have 
access to broadband, and we're committed to ensuring that it 
happens.
    Senator Cleland. The 1996 act also requires co-location and 
interconnection with existing ILECs, incumbent local exchange 
carriers in their facilities. In your statement following the 
approval of Bell Atlantic's Section 271 application you 
indicated that previous FCC decisions, ``adequately addressed 
the ordering and provisioning of extant DSL loops;'' however, 
you said our evaluation of future applications will, indeed, 
focus on this issue.
    What does this mean for future applicants? I know that Bell 
South is seeking the same kind of approval as Bell Atlantic.
    Ms. Ness. On 271, Senator, I think we turned the corner. 
I'm very encouraged by the hard work that the Bell operating 
companies and the State Commissions and the competitive 
carriers are engaging in to make this work. There's a 
demonstrable advancement that is taking place certainly over 
the past year or so. We approved one application. We expect to 
approve more. DSL and broadband services are very important to 
the communities and we hope to see the provisioning of lines 
that are DSL capable to roll out expeditiously as well to make 
those available to competitors.
    Senator Cleland. You believe your reviews are being done in 
a timely manner?
    Ms. Ness. Section 271 requires us to reach our conclusions 
in 90 days. We have met every deadline.
    Senator Cleland. That is quite a challenge and well done.
    Ms. Ness. Again, I want to commend the states, because they 
have really labored very hard to make sure that we have the 
information available, and I want to commend the carriers who 
have been working very hard to implement the tasks needed to 
open the markets to competition.
    Senator Cleland. Thank you very much. Well said. I've been 
informed of the excellent work the FCC's wireless bureau has 
done in reducing its backlog of paperwork. A great deal of the 
work the wireless bureau does directly impacts the spectrum 
allocation in the United States, which I hear is increasingly a 
challenge.
    As you know, there's a great deal of exciting wireless 
technology that claims to reduce the amount of spectrum needed 
for this technology to operate while increasing the power and 
capability of wireless products.
    Ms. Ness, I believe you're aware of the importance of 
spectrum management. Would you like to comment on the emphasis 
the wireless bureau has placed on acting on technology of the 
claims to increase the amount of spectrum available?
    Ms. Ness. I'm very excited about the possibility of new 
technologies that will turn spectrum management essentially on 
its head. We just initiated a proceeding on software defined 
radio. We have another proceeding underway on ultra wideband. 
Both of these technologies will work to provide more 
opportunities for both broadband deployment and specialized 
services throughout the bands of spectrum. These are very 
complex issues, and one of the biggest responsibilities of the 
Commission is to ensure that spectrum is made available and in 
a manner that does not interfere with existing users of 
spectrum. We take that responsibility very seriously. I would 
like to see us work even more closely with our colleagues at 
NTIA to ensure that bands can be made available for newer 
services.
    Senator Cleland. Ms. Ness, just kind of a philosophical 
question here. Five years ago when you were approved by the 
Senate to sit on the FCC, so much of the technology and so many 
of the companies that are out there today in many ways didn't 
even exist or, shall we say, were not even on the radar screen 
5 years ago. Just seeing that incredible advance of technology, 
and the incredible investment in information and 
telecommunications technologies and companies that raise hair 
on our heads whenever we contemplate the billions and hundreds 
of billions invested in these companies, isn't it quite a 
challenge as we walk into the 21st century together that over 
the next 5 years, just what might happen? You might see a need 
for the FCC to update or revamp or come up to speed on, and 
adjust or reform some of its practices and its own workings in 
order to keep up with the world that is growing exponentially 
at an incredible rate of speed.
    Ms. Ness. Yes, Senator, there are a number of things that 
we are doing to modernize the FCC, if you will, including 
streamlining application requirements. We are looking at 
restructuring the agency along more functional lines. This 
might be very helpful because of convergence to be able to have 
the expertise within a bureau to address those policy concerns.
    As I mentioned earlier, we are really moving, transitioning 
from implementing the Act to enforcing the Act and thus, we 
have set up an enforcement bureau to respond rapidly when there 
are violations under the Act so that folks cannot game the 
regulatory process. It seems to me we need to be more 
responsive by eliminating, through forbearance, unnecessary 
regulations, and I suspect we will be moving more rapidly in 
that direction.
    Lastly, I know Senator Rockefeller had asked about 
resources at the Commission. One area where we desperately need 
more resources is in engineering. I would like to see us more 
and more work with industries to ensure that new technologies 
can be rolled out as rapidly as possible without interfering 
with existing users of the spectrum, and that is going to take 
even more engineers than we have today, but I think that that 
is a worthy goal. It is a complex world and we would like to 
get as many new services out as rapidly as possible in a 
responsible manner.
    Senator Cleland. When I look at just the last 5 years and 
look at the prospect of what might happen in the information 
technology and telecommunications in the next 5 years, it's 
stunning what might happen in the next ten. So I just offer my 
word of support not only for your nomination and your further 
service on the FCC, but count on me to help you adapt to the 
need for speed in this incredible world where government 
hopefully can adapt quickly enough and surely enough to be 
responsive to industry but also continue to protect the public 
interest. Thank you very much for your service. Thank you, Mr. 
Chairman.
    Senator Burns. Thank you, Senator. I had another line of 
questioning. I didn't get all the information I wanted.
    Senator Rockefeller, do you have any other questions at 
this time or any comment?
    Senator Rockefeller. No, Mr. Chairman, but I would like to 
note that which I did not before, that Commissioner Tristani is 
here and I just think that's very nice.
    Ms. Ness. I want to thank all of my colleagues on the 
Commission. They have been terrific to work with.
    Senator Burns. I want to do some followup with you, 
Commissioner, with regard to I want to ask you--and I think 
this is better done in probably a private conversation, not 
keeping it from anyone, but I have some concerns about how we 
deal with spectrum and how we go through the auction business 
and how we handle it if it's repossessed and how we should use 
that and the FCC's role. I think we're going to consider in 
Congress how we deal with spectrum once it is owned and how 
much control do we have to relinquish as a government, or do we 
lose complete control of that spectrum?
    I would like to kind of ferret that out a little bit with 
you, and I think we can do that in private conversation, but 
there are some things happening that does concern Congress or 
at least this Member of Congress, anyway, with regard to 
dealing with spectrum and allocations and its use.
    And there are other Senators who have indicated they have 
some questions for you, also. I would ask you that you might 
respond to the individual Senators and to the Committee for its 
review, and that's all the questions I have today, other than 
the fact that I'll be in touch with you as far as the spectrum 
is concerned.
    But I want to thank you for coming today and responding to 
the questions, and appreciate your cooperation and I look 
forward in moving this nomination.
    Ms. Ness. Thank you very much, Senator.
    Senator Burns. This hearing is closed.
    [Whereupon, at 10:45 a.m., the committee adjourned.]
                            A P P E N D I X

     Response to Written Questions Submitted by Hon. Sam Brownback 
                             to Susan Ness
    Question 1. In the separate statement that you issued in 
conjunction with the Commission's approval of Bell Atlantic's 
application to provide in-region, long-distance service in New York, 
you indicated that it would have been ``unfair to penalize Bell 
Atlantic for its record on DSL loop performance at this time.'' You 
state that ``[b]ecause the consumer market for broadband services has 
only recently begun to develop, the FCC's collaborative process did not 
adequately address the ordering and provisioning of xDSL-capable 
loops.''
    You go on to say that ``our evaluation of future applications . . . 
will indeed focus on this issue.'' Are you saying that we do not know 
today all the criteria that will be used to evaluate future 
applications? Are you saying that you anticipate that the goalposts for 
a successful 271 petition could change with each new application if 
something new happens in the marketplace?
    Answer. The statute makes clear that the Commission cannot limit or 
extend the competitive checklist in section 271. The section 271 
checklist requires that Bell companies make unbundled loops available 
to competitors. In 1996, in the Local Competition Order, the Commission 
made clear that access to loops includes an obligation to provide 
unbundled loops capable of supporting xDSL technologies.
    Nevertheless, although the obligation to provide access to xDSL-
capable loops was clear before the first section 271 application was 
filed, I believed it would have been unfair to deny Bell Atlantic's 
application on this basis for several reasons. First, competitors had 
been ordering xDSL-capable loops from Bell Atlantic for a limited 
period of time. Second, there was a surge in requests for xDSL-capable 
loops in the month immediately prior to the filing of the application. 
Third, because competitors had only recently begun to order large 
numbers of such loops, the New York Public Service Commission had not 
addressed xDSL-specific issues until August 1999 when it initiated a 
collaborative process to resolve competitors' concerns. Similarly, 
neither Bell companies nor competitors had raised the ordering and 
provisioning of xDSL-capable loops in either the collaborative process 
or previous section 271 proceedings, and therefore, the Commission had 
not previously been presented with the issue in those contexts.
    Thus, given this set of circumstances, I concluded that it would 
have been unfair to penalize Bell Atlantic due to the evolving data in 
the record on Bell Atlantic's provisioning of xDSL-capable loops. 
Nevertheless, it would not be unfair to look at this market-opening 
obligation in future section 271 applications, because competitors are 
ordering increasing numbers of xDSL-capable loops and states are 
developing performance measurements and standards in this area.

    Question 2. I would like to ask you about a statement you made in 
conjunction with the approval of the SBC-Ameritech merger. You stated 
that ``[a]bsent conditions, the record is compelling that the 
combination of SBC and Ameritech would not serve the public interest.'' 
Where do you think that the FCC derives the authority to impose the 
onerous conditions that were imposed upon SBC and Ameritech in order 
for their merger to be approved? You forced these companies, as you 
have done with many companies in other merger approvals, to agree to 
conditions that you could not have mustered 3 votes to force them to 
accept in a general rulemaking. Why do you think that the FCC has the 
authority to impose conditions in the context of approving a merger 
that it could not impose in a general rulemaking? And if you think that 
such terms could be imposed in a general rulemaking, why didn't the FCC 
initiate one and impose these conditions on SBC and Ameritech that way?
    Answer. In the case of SBC/Ameritech, the record indicated that, on 
balance, the proposed transaction would not have been in the public 
interest absent conditions. The merger of two of the largest incumbent 
phone companies that together comprise one-third of the nation's access 
lines threatened specific harms identified in the Commission's 
decision, including the elimination of a significant competitor both 
within and outside of each company's region, increased incentive and 
ability to discriminate against other service providers, and less 
ability to use benchmarks to detect discrimination and monitor 
compliance with the statute and the Commission's rules. Although the 
Commission determined that the public interest harms of this 
transaction outweighed the benefits, the conditions that were proposed 
offset the harms that the transaction would cause. These proposed 
conditions were placed on the public record for comment.
    These conditions addressed the harms of the transaction by, among 
other things, helping to ensure that the local market is open to 
competition and that this transaction would lead to improved services 
for consumers. Some argue that certain of these conditions were not 
tailored in a sufficiently narrow manner to address only the harms 
caused by the merger. In this case, I believed, on balance, that the 
transaction, as presented to the Commission with these conditions, 
served the public 
interest.
    As to whether a condition should be adopted in the context of an 
application, as opposed to a rulemaking of general applicability, it 
may be appropriate to impose or accept conditions as part of an 
application when the specific consolidation may harm competition or 
have other consequences that are adverse to the objectives of the 
Communications Act. A condition that commits the merging parties to 
actions that would reduce or offset the damage that would otherwise be 
caused by the consolidation may shift the balance in favor of approval. 
Since the harm in question may be merger-specific, it may be 
appropriate for the relief also to be merger-specific, and not to apply 
to other parties who will not be receiving the benefits of 
consolidation. For example, in U S WEST/Qwest, although opponents of 
the transaction sought similar market-opening improvements, the 
Commission expressly declined to impose those conditions, because it 
concluded that the public interest benefits of the transaction 
outweighed the harms without the need for any such conditions.

    Question 3. Should the unbundling obligations of Section 251(c)(3) 
be a permanent requirement? If there are three or more facilities-based 
competitors in a market, should Section 251(c)(3) of the Act cease to 
apply to an ILEC? What about five or more facilities-based competitors? 
Does it matter whether the facilities-based competitors are all 
wireline carriers? What if five facilities-based carriers are offering 
voice services, but not data services?
    Answer. The Commission made clear in the order adopted last 
September that the unbundling obligations in Section 251(c)(3) are not 
permanent obligations. Rather, the Commission noted that, as market 
conditions change and new technologies develop, elements that currently 
must be unbundled will likely no longer meet the 
criteria for unbundling. Accordingly, the Commission concluded that it 
should periodically reexamine the availability of alternative sources 
of network elements to 
determine whether specific elements must continue to be unbundled. As 
competition takes hold, I fully expect that the unbundling requirements 
will be scaled back further.
    The existence of a significant level of facilities-based 
competition provides significant probative evidence that an efficient 
competitor is able to self-provision a network element or obtain it 
from a third-party. Nevertheless, there is no specific metric that 
definitively demonstrates when an element no longer needs to be 
unbundled. As the question recognizes, facilities-based competitors may 
only be serving certain customers or offering certain services. As a 
result, the Commission established specific criteria to be used to 
determine when, as a practical matter, a requesting carrier ought 
reasonably to be expected to be capable of self-provisioning an element 
or obtaining it from other market participants.
    Moreover, beyond modifications to the list of elements that must be 
unbundled, Congress indicated that the Commission can forbear from the 
requirements in Section 251(c)(3) once those requirements have been 
fully implemented and the statutory criteria in section 10 have been 
met.

    Question 4. You initially voted to incorporate groundbreaking 
Commission policy in an approval of the transfer of a television 
license involving WQED Pittsburgh. You, Chairman Kennard, and 
Commissioner Tristani voted to impose ``guidelines'' that would have 
tread rather recklessly on the programming decisions made by non-
commercial educational broadcast licensees.
    In your separate statement that you issued in conjunction with the 
order, you indicated that you and your colleagues ``have an obligation 
to provide additional guidance to FCC staff, as well as to applicants 
and existing licensees, if we are to be able to assess whether a 
broadcaster's judgment is reasonable.'' Yet, you also indicated that 
``[w]hile there may be additional guidance concerning the types of 
programming that would or would not qualify, . . . I do not believe 
that it would be appropriate to go beyond our elaboration today, absent 
public discussion and comment.''
    My question to you is how you draw a distinction between what 
programming content regulation can and should be imposed in the context 
of a license swap and what can only occur through public discussion and 
comment? Why did you initially think that any programming content 
regulation could be imposed other than in the normal notice and comment 
process?
    Answer. I do not believe that the Commission should impose new 
programming content regulations in the context of license assignment 
proceedings. On occasion, in adjudicating petitions to deny an 
application for Commission consent to the assignment of a license, the 
FCC is called upon to interpret existing rules or policies to resolve 
the contested matters. The Supreme Court has recognized that on 
occasion administrative agencies must have the power to interpret and 
apply their substantive rules on a case-by-case basis. SEC v. Chenery, 
332 U.S. 194, 203 (1947).
    In the WQED, Pittsburgh case, at the time of the initial vote, I 
believed that the Commission was interpreting a rule already on the 
books pursuant to the authority recognized by the Supreme Court in 
Chenery. While it understandably may appear hard to discern from the 
actual language of the additional guidance, it was my intention to 
avoid having the Commission tread ``recklessly on the programming 
decisions made by non-commercial educational broadcast licensees.'' 
Indeed, in my separate statement I indicated that I ``would continue to 
defer to the judgment of an applicant or licensee concerning the 
educational nature of its programming,'' unless that judgment was 
arbitrary or unreasonable. See Separate Statement, at 4 citing Way of 
the Cross, 102 F.C.C.2d at 1372 n.8 (1985).
    After issuing the decision, I realized that I had made a mistake 
and immediately took steps to correct it by rescinding the additional 
guidance. Had I followed more carefully my own guidance in supporting 
the grant of the application, including the concern you cite regarding 
an elaboration without public comment, I might have reached this 
conclusion prior to the issuance of the initial decision. The case 
highlights for me the importance of narrowly applying the authority 
recognized in Chenery, especially where the interpretation may be 
construed as imposing additional content regulation.

    Question 5. In your statement regarding the Federal-State Joint 
Board's November 23, 1998 recommendations, you state that ``[a] model 
is the only tool that has been identified to permit objective 
assessment of special needs that may require increased federal support 
to particular study areas. But we will not use this tool unless it has 
achieved a level of accuracy, predictability, and openness that earns 
it broad acceptance.''
    Do you really think that the model implemented by the Commission 
this past Fall has earned broad acceptance? There has been a 
substantial amount of criticism about the model that it takes too long 
to run, that the numbers still don't add up. How is the model accurate, 
predictable, and open?
    Answer. No economic model is perfect. Despite the criticisms of the 
cost model, however, no one has proposed a better alternative for 
objectively estimating non-rural carriers' forward-looking cost of 
providing service, which is the basis for prices in a competitive 
market. When used to estimate forward-looking costs on a statewide 
basis, the model appears to have gained a reasonable level of 
acceptance.
    Core principles underlying the Commission's adoption of the cost 
model are that the model and the process used to create it be open and 
predictable. Because the Commission has adhered to these principles, 
interested parties have been able to replicate and verify the cost 
model's results. The benefits of a transparent system were seen 
recently when industry members brought to the Commission's attention a 
transcription and programming error that has since been corrected.
    In addition, this open process enables parties to critique the cost 
model and propose modifications that can improve it. As the Commission 
recognized in the orders it adopted last fall, it will need to continue 
to study how the model itself should change to reflect changing 
circumstances. FCC staff and staff of the Federal-State Joint Board on 
Universal Service continue to analyze the model in an effort to make it 
even more accurate. We need to continue these efforts and watch closely 
the implementation of the model to ensure that it achieves the 
objective of estimating forward-looking costs in an accurate and 
predictable manner. As issues come to light, we need to address them.

    Question 6. In your statement accompanying the Commission's May 7, 
1997 universal service order, you indicated that you thought that the 
FCC had made ``substantial progress'' and established ``a clear 
timetable for implementation.'' The Telecommunications Act was enacted 
into law on February 8, 1996. Did you really think that four years 
after the bill became law that the FCC would still not have fully 
implemented the high-cost provisions of Section 254? Do you consider 
how long it has taken and how much farther we have to go a clear 
timetable?
    Answer. I share your frustration regarding the time it has taken to 
complete universal service reform. I would have preferred to complete 
the process earlier. Nevertheless, the Commission has made substantial 
progress and I believe we are on the right track.
    We have reformed the high-cost mechanism for non-rural carriers, 
and they are making the transition to a support mechanism based on 
forward-looking costs. We have also made universal service support 
portable so that competitors who win customers can receive the same 
support that the incumbent would have received.
    Nevertheless, although we have made significant progress on these 
complex issues, much remains to be done. Recognizing the unique 
circumstances facing rural carriers, the FCC worked with rural carrier 
associations to establish a separate track for rural carriers. The 
Federal-State Joint Board on Universal Service convened a Rural Task 
Force that must recommend by October 1st, an appropriate universal 
service regime that reflects the different cost structures of rural 
carriers. Once the Rural Task Force has issued its recommendation, I 
will urge the Joint Board and the FCC to move as rapidly as possible to 
complete the process. I recognize that uncertainty can be a major 
impediment to investment. At the same time, however, we must take the 
time to ensure that any mechanism we adopt makes sense for rural 
carriers and is faithful to the Communications Act's core principle 
that all Americans should have access to reasonably comparable services 
at reasonably comparable rates. This effort is too important not to get 
right. In the meantime, we have sought to ensure that rural carriers 
receive adequate support from the current mechanism in order to prevent 
upward pressure on rates in rural areas.
    I would also have preferred to proceed concurrently with reform of 
high cost support and access charges. If we are going to get universal 
service mechanisms for high cost areas right, we must identify high 
cost support that is implicit in access charges. We are currently 
considering an industry proposal for access charge reform for price-cap 
carriers. In addition, numerous rural carriers, along with their 
associations, are developing an analogous proposal that would address 
access charges, universal service, and separations. We must make 
resolution of these complex and interrelated issues a top priority. At 
the same time, as we address access charge reform, we need to make sure 
that consumers, including residential and low-volume consumers, will 
receive the benefits of cost savings due to access charge reductions.

    Question 7. The FCC has expressed its intent to reauction certain C 
and F block PCS licenses in July of this year. These licenses were 
previously auctioned, but never built out and never paid for. Last 
year, I introduced legislation that prohibits the application of 
spectrum caps to new spectrum that is auctioned in the future. One of 
the reasons that I introduced this bill was to accelerate the 
introduction of advanced services including wireless Internet access 
and other data services for which operators need substantially more 
spectrum in order to provide the service. Given the fact that some of 
the spectrum from C and F block licenses is not currently being used, 
is it safe to conclude that relief from the spectrum cap could be 
granted for these licenses without risking industry consolidation? If 
so, shouldn't relief be granted to ensure that advanced wireless 
services develop without hindrance? If not, why not?
    Answer. The Commission presently has pending before it a number of 
requests and responsive pleadings concerning the reauction of certain C 
and F block PCS licenses, including issues related to Section 20.6 of 
the FCC's rules (the ``spectrum cap''). We will receive additional 
pleadings on the issues later this month. I do not wish to prejudge the 
issues raised in these requests and pleadings.
    Strong arguments have been made that removing those licenses not 
presently being used to provide service from the application of the 
spectrum cap would not cause industry consolidation. It is also 
important for the FCC to enable licensees to provide advanced wireless 
services if they choose to do so. It was precisely for that reason that 
I supported language in our spectrum cap decision last fall to provide 
for waivers to facilitate the deployment of next generation wireless 
services. As a general matter, I would like to see more spectrum made 
available to new entrants and existing licensees for the provision of 
advanced services.

    Question 8. In the order adopting licensing and service rules 
governing the 36 MHz of commercial spectrum located in the 700 MHz band 
to be auctioned this Spring, the FCC found that ``the spectrum cap for 
the existing 180 megahertz of CMRS spectrum provides a sufficient 
safeguard against excessive consolidation of CMRS spectrum.'' If you 
agree with this statement, do you support my legislation that would 
preclude the FCC from applying the spectrum cap to all future auctions, 
which would leave the rules governing the existing 180 megahertz 
intact?
    Answer. I supported our conclusion that ``the spectrum cap for the 
existing 180 megahertz of CMRS spectrum provides a sufficient safeguard 
against excessive consolidation of CMRS spectrum.'' Indeed, I elected 
not to apply the spectrum cap to the 30 MHz in Channels 60-69 to be 
auctioned this spring. I would be extremely hesitant to apply Section 
20.6 to any further allocations of spectrum, and believe that parties 
seeking the applicability of such restrictions would bear a heavy, if 
not insurmountable, burden. Of course, if a party were to argue that we 
should make the restrictions of Section 20.6 applicable to a new 
allocation of spectrum, I would be obligated to consider that argument 
on the basis of the laws and factual record applicable to that 
proceeding.

    Question 9. With recent industry consolidation, there are now five 
national wireless carriers. How many carriers need to offer service in 
a given market before the current wireless spectrum is no longer 
necessary?
    Answer. The Commission released its most recent order on spectrum 
aggregation limits on September 22, 1999. In that order, the Commission 
cited certain theory and research that tended to show that the 
competitive nature of a market was enhanced significantly when the 
number of competitors in a market was increased from three competitors 
to four competitors, and again when increased to five competitors. 
Beyond five competitors, the evidence and theory did not establish as 
significant a change in the competitiveness of the market.

    Question 10. Given the FCC's new duopoly and one-to-a-market rules, 
why should the newspaper/broadcast crossownership rule remain 
unchanged? Why should newspapers be precluded from the broadcasting 
business when one single owner can have as many as two television 
stations and six radio stations in the same market? Do you support 
issuing a notice of proposed rulemaking on this issue?
    Answer. Yes, I support reexamining this rule in light of sweeping 
changes in the media marketplace since the inception of the rule. Such 
an assessment is timely. The Commission is in the process of completing 
its Biennial Review of broadcast ownership rules. I plan to carefully 
consider the changing marketplace, including the consolidation of radio 
and television properties within a market, cable clustering, access to 
information over the Internet, DBS, and other forms of information 
distribution, as well as other probative information on the record 
before I draw any conclusions.

    Question 11. Given events such as the AOL-Time Warner merger, the 
announced acquisition of Times Mirror by Tribune, and the consolidation 
of cable companies, is the 35% national ownership cap for television 
broadcasters still necessary? If so, what goals does the cap accomplish 
considering the current makeup of the marketplace for video programming 
and distribution, as well as the Internet?
    Answer. The 35% cap is a subject of our currently pending Biennial 
Review and adjudicatory proceedings. I want to consider all viewpoints 
before deciding whether we should alter or remove the cap. Questions 
have been raised as to whether the underlying purpose of the rule in 
ensuring viewpoint diversity by limiting the market reach of any single 
broadcaster is still relevant today. I will examine all of the facts 
presented before determining whether the rule should be modified or 
eliminated.

    Question 12. Is a strong must-carry requirement for cable systems 
to carry DTV signals necessary to achieve a successful transition by 
television broadcasters from analog to digital operations?
    Answer. As a general matter, I prefer to see resolution of this 
issue through marketplace forces, to the extent possible. There is 
little dispute that broadcasters' digital signals will be carried in 
lieu of the analog signals once conversion is completed.
    As cable systems expand and modernize to accommodate digital 
channels and Internet access, they will add capacity that could be used 
to carry the digital broadcast signal. Some cable multiple system 
operators have pledged to carry the digital broadcast signal in 
addition to the analog signal if the programming is different and of 
interest to subscribers. I have strongly encouraged cable operators and 
broadcasters to sit down and discuss digital cable carriage in 
conjunction with retransmission consent negotiations. When a must-carry 
rulemaking is presented for a vote, I will consider the extent to which 
cable operators and broadcasters have worked together to craft digital 
carriage arrangements.
    If broadcasters' digital signals are not carried by cable 
operators, the digital transition could be hindered. Given cable 
television's current market penetration rate of less than 70%, however, 
cable carriage by itself would not be sufficient to complete the 
transition under the 85% DTV penetration benchmark set by Congress in 
the Balanced Budget Act of 1997.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Conrad Burns 
                             to Susan Ness
(1) I am concerned that the FCC refuses to acknowledge the property 
rights of winning bidders of spectrum licenses in those licenses and 
that the Commission apparently considers itself exempt from the 
Bankruptcy Code and its automatic stay provisions. The FCC cannot 
simply repossess people's property, including spectrum, except by due 
process of law, including bankruptcy law.
    The Commission has sought exemption from the bankruptcy laws to 
repossess spectrum in recent appropriations bills, and Chairman Kennard 
recently asked a Senate Committee to give the Commission such special 
treatment. Congress has refused to do so, and I agree with the 
lawmakers who have jurisdiction over the Bankruptcy Code that the FCC 
should not be given special treatment superior to that of other 
private, secured creditors.

    Question. In your view, does the Commission deserve special 
dispensation from the Bankruptcy Code? If so, why?
    Answer. In my view, the FCC is not receiving special dispensation 
from the Bankruptcy Code. Instead, the FCC has acted consistently with 
the principle that a licensee has only the rights specified in the 
terms of the license. The licenses issued by the FCC to which you refer 
expressly stated on the face of the license that failure to comply with 
the condition for full and timely payment pursuant to the Commission's 
rules resulted in the automatic cancellation of the license. In seeking 
to enforce its rules and the terms of its licenses, the Commission 
seeks only to protect the integrity of its auction licensing process 
established under Section 309 of the Act, not to obtain special 
dispensation from the Bankruptcy Code. The United States Court of 
Appeals for the Second Circuit already has held that bankruptcy courts 
cannot change the terms and conditions of FCC licenses, including 
payment requirements. NextWave Personal Comm., Inc. v. FCC, 200 F.3d 43 
(2d Cir. 1999). While I recognize that these issues are still being 
litigated in the courts, my goal is to preserve the integrity of the 
auction process and to prevent purchasers of licenses at auction from 
using the Bankruptcy Code to escape their obligation to comply with 
their commitments to the American people.

    Question. Please describe your views on spectrum management.
    Answer. Here are some of my thoughts on spectrum policy and 
spectrum management:
    My goal is to make spectrum available in ways that provide maximum 
benefits for the American public. Allocations and service rules for 
spectrum should be as flexible as possible to enable the licensee to 
respond to a rapidly changing marketplace without having to obtain 
regulatory dispensation. We should inform the public as far in advance 
as possible of our plans to make spectrum bands available so that 
prospective licensees can develop and execute viable business plans. To 
the extent feasible, we should recognize international implications of 
spectrum use, and consult with our trading partners to harmonize 
spectrum band allocations to spread the cost of equipment development 
across more users, thereby lowering the cost of service to the consumer 
and facilitating global communications. We should be technology 
neutral, yet encourage open systems and connectivity where appropriate. 
Auctions are the most efficient means of swiftly and equitably 
licensing providers to expedite commercial service to the public. 
However, we must also ensure that adequate spectrum is available for 
public safely, amateur, scientific, and other applications where 
auctions are not appropriate. The FCC should also make available 
adequate unlicensed spectrum so that entrepreneurs can develop a host 
of new and innovative services.
    We must streamline our processes to eliminate unnecessary delay in 
the approval of new technologies. The FCC plays a critical role in 
ensuring that licensees can operate free of harmful interference. We 
must find better ways of resolving competing and contradictory analyses 
of interference for new technologies or new sharing proposals so that 
we can make most efficient use of spectrum. One approach might be for 
the FCC to oversee an interference testing plan, in which all 
interested parties are invited to participate. That could alleviate the 
battle of the engineering reports. Finally, we must adopt processes 
that swiftly resolve interference claims when they occur.

    Question. Do you consider spectrum a public resource?
    Answer. Yes.

    Question. Is the primary goal of spectrum management the 
maximization of revenue or the most efficient technological use of the 
spectrum?
    Answer. The primary goal of spectrum management is to ensure that 
the public reaps the greatest benefit from services provided through 
the use of spectrum. As a general matter we rely on market forces to 
achieve that goal. Through its rules, the FCC also encourages the most 
efficient technological use of the spectrum.

    Question. What improvements do think can be made in spectrum 
management policy?
    Answer. We need to look more holistically at the spectrum available 
for commercial applications. Previously, we focused on spectrum issues 
on an ad hoc basis, one band at a time. In establishing rules for a 
single band, we addressed policy issues that affected many bands. 
Because the FCC focused on one band at a time, industry did not know 
what other spectrum would be made available at a later point in time. 
And the policies we adopted in wireless proceedings had the potential 
to conflict with our international objectives.
    To address these issues, we have elevated the spectrum policy 
function at the Commission through the establishment of the Spectrum 
Policy Executive Committee, which is comprised of the Wireless, 
International, Mass Media bureau chiefs, and the head of the Office of 
Engineering and Technology. That body formulates spectrum policies for 
Commission approval. Last fall, the Commission adopted a Spectrum 
Policy Statement, which described our spectrum policies and listed a 
multitude of spectrum bands that the FCC was considering making 
available for use. Such policies include, among others, providing 
flexibility in spectrum allocations and service rules and being 
technology neutral. These changes have been beneficial.
    In addition to the changes we have already begun to implement, we 
must redouble our efforts to resolve more rapidly conflicting 
performance and interference issues. We must do so even in the face of 
increasing demand for spectrum, increasing technical complexity, and 
rapid technological change. Also, we must continue to work with our 
counterparts abroad for more global harmonization of spectrum 
allocations, where feasible.

    Question. Please describe your views on private property rights as 
they apply to spectrum management policy.
    Answer. As a general matter, I believe that licensees should have 
the flexibility and discretion to decide the most desirable method for 
serving the public. Nevertheless, licensees cannot have the authority 
to violate the Commission's rules or disserve express Commission 
policy, especially based on claims that they hold property rights in 
the license. Moreover, the Commission appropriately retains the 
ability, where justified by the broad public interest, to reallocate 
spectrum from one use 
to another, and to move incumbents in order to introduce new and more 
efficient 
services.
    The ``property'' right of licensees in their licenses is prescribed 
by the Communications Act. Under Section 301 of the Communications Act, 
each licensee only holds its license pursuant to ``the terms and 
conditions of the license'' and has no ``ownership'' interest in the 
spectrum (which belongs to the American people). Section 309(j)(6)(C) 
specifically provides that ``Nothing in this subsection or the use of 
competitive bidding shall diminish the authority of the Commission 
under other provisions of this Act to regulate or reclaim spectrum 
licenses.''

(2) Last year, the Commission granted waivers of its rules to allow the 
introduction of ``ultra-wide band'' (``UWB'') equipment capable of 
transmitting across large swaths of bandwidth, including spectrum 
dedicated for critical safety operations. The waiver limited the number 
of units that could be introduced into the market; one of the 
ostensible purposes of the waiver was to allow for the testing of UWB 
equipment for its ability to operate without interfering with existing 
users of the affected spectrum.
    As I understand it, this equipment has not been tested and serious 
concerns have been raised over whether this equipment can operate 
without interfering with operational public safety services. 
Nonetheless, I am informed, the Commission is close to issuing a Notice 
of Proposed Rulemaking (``NPRM'') for the purpose of establishing rules 
and procedures for commercial exploitation of UWB equipment.

    Question. What is motivating the federal government to move so 
quickly on a rule-making strategy that could well affect public safety 
in the absence of thorough technical studies?
    Answer. The Commission has moved cautiously and with great 
sensitivity in evaluating proposals regarding UWB. For a number of 
years, proponents of this technology have been requesting Commission 
action simply to investigate the possibility of establishing rules that 
would permit the deployment of UWB. In September of 1998, the 
Commission issued a Notice of Inquiry (``NOI'') asking questions about 
the UWB technology, and has received over 125 responses to the NOI. The 
Commission has taken over 18 months to consider the responses, and to 
work with NTIA in an effort to reach a better understanding on issues 
involving UWB.
    Our approach to a rulemaking for UWB is to ask the public to 
comment on a wide range of issues regarding the technology and 
potential for interference. The NOI provided us with an appropriate 
basis to proceed further--again, cautiously--with a proposed rulemaking 
that does not necessarily assume a particular outcome, but rather asks 
questions about appropriate rules for UWB. I have met with members of 
the GPS community who believe they could be adversely affected by UWB 
operation and I have assured them that no final rules will be adopted 
permitting deployment of UWB that could impact on GPS operations unless 
and until the Commission has determined that UWB will not cause harmful 
interference--especially where public safety is concerned. I believe 
this process will be enhanced by conducting a general rulemaking that 
has as its goal the development of a record on potential interference 
issues. I view the rulemaking process as an opportunity to ask 
appropriate questions to resolve the issues that have been in 
contention for some time.
    I have called for joint testing of UWB by the GPS and UWB 
communities--ideally with the direct involvement of NTIA and FCC staff. 
This testing should be concluded before any rules are finalized that 
could adversely impact public safety. The Commission has a statutory 
obligation to protect public safety uses of the spectrum as well as a 
statutory obligation to foster the development of new and beneficial 
technologies, including those that support public safety.

    Question. From a procedural standpoint, why is the Commission 
considering leapfrogging the established practice of testing new 
equipment and services prior to initiating a rulemaking proceeding? 
Shouldn't the Commission first conduct verifiable tests of the 
interoperability of UWBs with existing services before it commences a 
NPRM that establishes rules for UWB operations?
    Answer. The Commission is not proposing to leapfrog the established 
process. The Commission has conducted initial testing in connection 
with granting the very limited waivers you reference. As discussed 
above, the Commission already has proceeded with a Notice of Inquiry, 
issued more than 18 months ago. As I discussed above, any NPRM 
addressing UWB will ask questions, explore alternatives and to seek 
data to support rules for the operation of UWB that will insure that 
there will not be harmful interference. Again, rules will not be 
adopted until the UWB and public safety community undertake appropriate 
tests and we are satisfied that we have adequately addressed 
interference questions.

    Question. Recently industry suggested to me that they have been 
informed by government representatives that the UWB NPRM is on a 
``fast-track.''
    Is it the FCC's position that this NPRM is on a ``fast track?''
    Answer. The process for assessing potential rules for UWB operation 
has not proceeded on a faster track than traditional rulemaking 
proceedings; indeed, we have been criticized for proceeding too slowly. 
The supporters of UWB technology first contacted the Commission many 
years ago. The NOI was initiated more than 18 months ago. As discussed 
above, an NPRM will further the goal of resolving questions of 
potential interference by seeking comment from the public on specific 
issues.

    Question. Wouldn't you agree that, because public safety is 
implicated by this application, the Commission should at a minimum 
ensure that the UWB equipment has been tested by independent entities 
and the results of these tests clearly show that UWB equipment will not 
interfere with critical public safety services prior to initiating the 
NPRM?
    Answer. I agree that the Commission has an obligation to protect 
public safety uses of spectrum. I also expect that the record developed 
in response to the issuance of an NPRM will include the results of 
testing that addresses interference questions that have emerged in the 
UWB debate. Historically, the Commission has invited the submission of 
test data in response to technical issues raised in rulemakings 
involving new technologies or services. The issuance of an NPRM can 
clarify the issues that must be addressed in subsequent testing. There 
is no safety risk to the public, because an NPRM does not adopt any 
rules; it builds an appropriate and complete record for Commission 
consideration.

    Question. What is preventing the Commission from immediately 
delaying the rule-making process until independent and complete 
technical studies are undertaken regarding the impact of UWB 
applications on the frequency bands involving safety-of-life services?
    Answer. The Commission is obligated to protect public safety and to 
serve the public interest by authorizing new services that do not 
conflict with that goal. Indeed, the FCC has a duty not to hinder 
technological innovation. See 47 U.S.C. Sec. 7(b). In furthering these 
goals, we have an obligation to reach prudent decisions without undue 
delay. Therefore the Commission should not delay asking the appropriate 
questions regarding interference until after completion of testing. The 
questions posed in an NPRM both spur and guide appropriate testing.

    Question. Industry has suggested that the approach that the 
Commission is considering with respect to this ``fast track rule-making 
process'' has effectively shifted the burden of proof from an applicant 
seeking to introduce a new device into a public safety arena to already 
existing safety-of-life services.
    Is it the Commission's intention to shift the burden here?
    Do you think that it is wise for the Commission to shift the burden 
where safety of life services are implicated?
    Answer. I do not believe the Commission will shift the burden in a 
manner inconsistent with the mandate of Congress. Section 7(a) of the 
Communications Act of 1934, as amended, plainly states that ``[i]t 
shall be the policy of the United States to encourage the provision of 
new technologies and services to the public. Any person or party (other 
than the Commission who opposes a new technology or service proposed to 
be permitted under this Act shall have the burden to demonstrate that 
such proposal is inconsistent with the public interest.'' In evaluating 
the public interest, the Commission makes every effort to ensure that 
spectrum used for public safety services is protected.

    Question. With the rapid emergence of wireless communications 
applications, and urgent need to protect the integrity of the aviation 
safety zone (e.g., passengers not allowed to operate laptops and cell 
phones during the ascent and descent phases), why hasn't the government 
initiated spectrum harmonization studies?
    Answer. To a great extent, electromagnetic compatibility issues 
involving uses of spectrum are addressed in the context of specific 
proposals. This is why the Commission seeks comments on out-of-band 
emissions limits in nearly any rulemaking concerning the allocation of 
spectrum for new services. Beyond the Commission's direct efforts, 
however, standards bodies, other agencies and joint government-industry 
organizations also deal with such compatibility issues. For example, 
the Radio Technical Commission for Aeronautics (``RTCA'') examined the 
use of passenger-carried electronic devices aboard aircraft and the FAA 
commissioned the Applied Physics Laboratory of Johns Hopkins University 
to study interference threats to aviation's use of GPS. I believe the 
RTCA is examining compatibility between aviation's use of GPS and UWB.
    Finally, I understand that the Commission's Technological Advisory 
Council is considering a study that will examine the overall noise 
floor and the implications of additional operations that contribute to 
the noise floor. A study of this kind will necessarily involve much 
more than just consideration of what contribution to the noise floor 
might result from UWB.

    Question. The National Research Council has indicated it would take 
18 months and half a million dollars to test UWB equipment's 
compatibility with existing public safety services.
    Have any studies of this nature been initiated or funded?
    Answer. I do not believe that the NRC proposal has been initiated 
or funded. I have heard that NTIA anticipates studying UWB 
compatibility with certain government uses and that the Department of 
Transportation plans to do so as well. I would, note, however, that 
many of the subjects proposed for review in the NRC study are matters 
addressed in the Commission's NOI proceeding and are matters on which 
we would invite comment in any NPRM.

    Question. How is this consistent with the NPRM time scale?
    Answer. The Commission has no predetermined time scale for 
conclusion of its NPRM. I believe that any interference tests should 
take as long as necessary to provide the information needed to answer 
questions posed in an NPRM.

    Question. Are these studies underway by the Commission or under the 
oversight of any agency of the Federal Government?
    Answer. As noted above, I understand that both NTIA and DOT plan to 
conduct studies. I also expect that various other interested parties 
will have testing conducted by independent laboratories. As noted 
above, I have encouraged the parties to agree upon joint testing under 
the auspices of NTIA.
                                 ______
                                 
      Response to Written Questions Submitted by Hon. Max Cleland 
                             to Susan Ness
    Question 1. Could you please comment on the status of FCC merger 
reviews? Do you believe these reviews are done in a timely manner?
    Answer. In most cases, the Commission expeditiously processes 
applications for approval of the assignment or transfer of control of 
licenses. I am concerned, however, that in certain cases, the 
Commission has not moved with sufficient speed to render a decision on 
merger applications. I understand that delay creates uncertainty that 
makes it difficult for businesses to develop and implement plans that 
will lead to a more competitive telecommunications marketplace.
    The Commission needs to do a better job of deciding promptly which 
mergers will serve the public interest and which will not. To 
accomplish this objective, the Commission should commit to a more 
predictable timetable for identifying and resolving the issues 
presented by mergers. In particular, the Commission should take the 
following steps: (1) place applications on public notice expeditiously 
upon receipt, and call for the filing of comments and petitions to deny 
on appropriate dates, usually within 30 days; (2) commit to a specific 
time frame for identifying any additional information that the 
applicants must submit, or any issues that the applicants must address; 
and (3) limit the time period during which any permitted ex parte 
communications are permitted to occur, and after that time period, 
proceed expeditiously to a decision. As a general matter, I believe 
that reviews of complex transactions should be completed within 180 
days, if proponents submit requested documentation in timely fashion. 
Time constraints, however, should not enable merger applicants to game 
the process by running out the clock.

    Question 2. For the most part, the FCC has chosen to forbear on 
regulating advanced services. However, as you know, telephone companies 
are subject to regulation with respect to their deployment of DSL 
service. Obviously, they are thought of as ``different'' in the eyes of 
regulators. How do you view the phone companies as a different kind of 
player with respect to their role in developing broadband 
communications?
    Answer. The Internet has grown enormously in recent years with 
minimal government regulation. The FCC has not regulated the Internet 
in the past, does not do so now, and has no intention of doing so in 
the future. The underlying services provided by telephone companies 
that consumers use to access the Internet, however, are 
telecommunications services subject to the framework that Congress 
established in the Communications Act. The Act does not distinguish 
between voice and data services. Rather, Congress established a regime 
to promote competition throughout all telecommunications markets.
    The Commission, for its part, has sought to carry out Congress' 
pro-competitive and deregulatory objectives in all telecommunications 
markets, including the advanced services market. For instance, to 
promote competition in broadband services, the Commission adopted rules 
to ensure that competitors can obtain access to loops and collocation 
space. At the same time, however, the Commission also determined that 
incumbent carriers generally are not required to unbundle facilities 
they use to provide advanced services, including packet switches and 
DSLAMs. Moreover, the Commission has held that, when a carrier sells 
advanced services in bulk to an Internet provider, those services are 
not subject to the wholesale discount requirement in Section 251(c)(4).
    With respect to the rollout of broadband, I am committed to 
ensuring that advanced communications are made available to all 
Americans on a reasonable and timely basis. In a world that is 
increasingly dependent on information technology, access to broadband 
services is becoming the key to economic prosperity. The government's 
role is not to pick winners and losers. Rather, as underscored in 
Section 706 of the Telecommunications Act of 1996, our job is to reduce 
barriers to deployment and competition so that companies are able to 
invest and innovate. In this way, we can make sure that broadband 
services roll out as quickly as the technology and the economics allow 
in all areas of the country, including rural and lower-income areas.
    The Commission is currently in the middle of its second inquiry on 
the deployment of advanced services pursuant to Section 706. In this 
proceeding, we are examining steps we can take not only to promote the 
deployment of advanced telecommunications capability but also to 
facilitate consumer choice among broadband service suppliers.

    Question 3. I understand the Commission recently relaxed its 
ownership restrictions on local television stations and is now 
permitting greater joint ownership among television stations serving 
the same market. I also understand that newspapers are seeking similar 
relief. Do you foresee Commission action on behalf of newspaper owners?
    Answer. The Commission currently has before it a draft Biennial 
Review report addressing the newspaper/broadcast cross ownership 
prohibition, among other things. I am committed to reviewing this 
report carefully and acting on it promptly. The Biennial Review 
provides an opportunity to consider developments in the media 
marketplace and determine whether they warrant elimination or 
modification of some or all of our cross-ownership and multiple 
ownership rules.
    The communications marketplace has changed significantly during the 
course of the past few years. In addition to newspapers, radio and 
television, consumers increasingly have access to a wide assortment of 
other sources of news and information. Cable television, satellite 
services, and the Internet have had a profound effect on the 
marketplace. Growing access to those sources must be balanced against 
the fact that newspapers and television stations remain the dominant 
sources of local news and information for most consumers.
    The new local ownership rules to which you refer also are an 
important factor to be considered in determining whether to relax the 
prohibition against cross ownership of newspapers and radio stations 
and newspapers and television stations in a local market.
    I am aware of several proposals to amend the current newspaper/
broadcast cross-ownership prohibition. While I cannot predict what 
action the Commission will take, I will carefully consider these 
proposals as I examine the Biennial Review report.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Trent Lott to Susan 
                                  Ness
    Question. As you are aware, the ultrawide band industry has been 
seeking regulatory approval for its important technology for several 
years. However, the companies that would utilize this technology still 
do not have the authorizations necessary to bring their revolutionary 
products to U.S. customers. I am concerned about this delay. As 
highlighted in recent press articles, there are numerous public safety 
benefits of UWB technology. Also, UWB technology may alleviate the 
impending wireless bottleneck by utilizing previously ignored parts of 
the radio spectrum.
    I commend you for your role in advancing and accelerating the 
deployment of new technologies, and would appreciate hearing your views 
on the status of the rulemaking process and the necessary testing to 
deploy the UWB technology.
    Answer. I look forward to the Commission's release of a notice of 
proposed rulemaking (NPRM) on UWB in the near future. I share your view 
that UWB technology may prove to be extremely beneficial on a variety 
of fronts, including public safety. At the same time, I am mindful of 
the fact that there have been claims that the introduction of UWB 
technology could create harmful interference, especially to public 
safety services. As the agency charged with managing non-federal uses 
of the electromagnetic spectrum, I believe we must guard against such 
interference. Any NPRM will build upon the experience gained with 
initial testing of UWB devices in connection with the waivers issued 
last summer for such equipment, the record in response to the Notice of 
Inquiry we issued in September 1998 concerning UWB, and the FCC's 
experience with other devices. At the same time, I believe that the 
Commission must encourage and consider additional testing in order to 
assist in the resolution of conflicting claims as to the compatibility 
of UWB with existing services. Testing should be used as a light in the 
search for truth, however, and not as a means for casting the long 
shadow of undue delay.
                                 ______
                                 
      Response to Written Questions Submitted by Hon. John McCain 
                             to Susan Ness
1. General
    Question. If you had the chance to change only one of the many 
votes you have cast during your tenure as a Commissioner, which one 
would it be?
    Answer. Out of the approximately 2,500 votes I have cast since 
joining the FCC, I most regret having voted to permit winning bidders 
for the ``C'' Block licenses in the personal communications service 
(``PCS'') to pay for their licenses by making installment payments. 
Although Section 309(j)(4)(A) of the Communications Act of 1934, as 
amended, instructed the Commission to consider the use of installment 
payments, it did not mandate the use of such payments. The Commission 
had hoped to enable entrepreneurial companies with limited access to 
up-front capital to be able to bid at auction, construct a network, and 
compete to offer services to the public. Some licensees are 
successfully doing so today. Unfortunately, some bidders became over-
extended and ultimately failed to make timely payments for their 
licenses. The unintended consequences of authorizing installment 
payments have been delays in the provision of service to the public and 
protracted litigation in which the Commission has had to protect the 
integrity of its licensing process.

    Question. What are the three most important problems facing the FCC 
today, and what would you do to address them?
    Answer. First, the FCC must allocate suitable spectrum for the 
provision of new and advanced wireless services. Often such allocations 
necessitate resolving difficult spectrum sharing issues between varied 
users of the spectrum. The Commission is also evaluating proposals to 
authorize the operation of devices that use spectrum in fundamentally 
different ways, which also raise questions concerning potential 
interference with existing services and the Commission's ability to 
police such interference.
    Given the rapidly changing marketplace for wireless communications, 
the Commission should provide for flexible use of the spectrum wherever 
such flexibility will not compromise protecting other primary users 
from harmful interference. In some cases, the Commission simply will 
have to make difficult choices regarding allocations, and then 
promulgate rules that provide incentive for the most efficient 
resolution of sharing or relocation issues through the operation of 
market forces. Also, the Commission should expend every effort to 
encourage and participate in the testing of new spectrally efficient 
technologies so that they may be authorized under conditions that do 
not adversely interfere with current users. These technologies hold the 
promise of reducing the constraints on the allocation and use of 
spectrum.
    Our spectrum responsibilities make it especially important that the 
Commission be able to attract qualified engineers and other staff with 
sufficient industry and technical expertise to resolve questions 
concerning spectrum interference and other technical questions related 
to the use of spectrum. While the Commission has attracted a number of 
superb engineers and technical experts, time and time again the 
resolution of many of our most difficult questions depends upon answers 
to complicated claims regarding interference and spectrally efficient 
operation of equipment. The FCC must continue to attract and develop 
quality technical expertise and personnel to address these issues.
    Second, the FCC is seeking to foster the deployment of advanced 
services across the nation in a manner that makes the benefits of these 
advanced services available to all Americans. At the same time, it is 
seeking to rely on the competitive forces of the marketplace and avoid 
burdensome regulation and upward pressure on the cost of providing 
telecommunications services.
    The Commission must continue to exercise restraint in the 
regulation of advanced services. It must continue to license the 
provision of as many wireless and satellite services as possible, not 
only to provide for competition, but to permit these services to reach 
segments of our population that are not reached as easily through wired 
networks. The Commission must continue to educate itself about the 
needs of rural and urban communities and ensure that the universal 
service funding mechanisms adopted by the Commission serve the 
objectives that were the basis of Congress' adoption of the 
Telecommunications Act of 1996.
    Third, the Commission needs to do a better job of managing its 
review of mergers. I discuss this issue in greater detail in response 
to question 3 below.
2. International Spectrum Issues
    Question. Based on your experience in past World Administrative 
Radio Conferences, what improvements would you make to the process by 
which the U.S. plans for, and participates in, international spectrum 
allocation meetings?
    Answer. World Administrative Radio Conference decisions have a 
profound impact on U.S. business, domestically and globally. The U.S. 
is but one vote out of more than 150 countries represented. 
Historically, the U.S. has been slow to formulate its positions and to 
circulate them to other administrations, and slow to depart from a 
position even when changes in the international environment indicate 
adopting a different course would be advantageous. Often, the U.S. has 
entered negotiations with other administrations too late in the process 
to avoid major clashes at conferences.
    We have learned from our mistakes. After the 1997 conference, I 
advocated that a number of changes be made. Many have been adopted, 
which should lead to a better outcome at the WRC-2000 conference this 
May. The FCC submitted its recommendations early, and the U.S. 
circulated its draft positions in advance of regional conferences so 
that other administrations could work with us to reach consensus on 
proposals. The White House appointed our head of delegation early 
enough to enable meaningful participation in bilateral and multilateral 
meetings, and has given high level attention to WRC issues so that 
disputes within the U.S. government could be resolved quickly. Finally, 
regional conferences of spectrum managers are now open to outside 
observers, enabling countries to exchange information earlier in the 
process. This should reduce the number and magnitude of issues 
remaining in dispute at the opening of WRC-2000.
    I have one other recommendation: The U.S. government should earmark 
additional funds to enable more participation by U.S. government 
experts in regional and bilateral meetings. The FCC is a vital member 
of the U.S. team. We have the technical expertise and global 
relationships to resolve difficult issues, but we lack the budget to do 
so. When the U.S. has taken the time to visit other delegations, the 
outcome has been greater support for our proposals.
3. FCC Merger Reviews
    Question. I realize that you support continuing the FCC's authority 
to review telecom mergers. Based on your five years' experience, is 
there any aspect of the current process that needs improvement, and, if 
so, what specific changes would you make?
    Answer. While I support the FCC's continued authority to review 
mergers of communications companies, I believe we can and should 
improve the process. Specifically, the Commission needs to ensure that 
its review of the largest and most complicated mergers is conducted in 
a more expeditious and transparent manner under standards that are 
consistently and equitably applied. Undue delays stifle the development 
of competition.
    In most cases, the Commission expeditiously processes routine 
applications for approval of the assignment or transfer of control of 
licenses. Over the past several years, however, the Commission has been 
called upon to rule on several exceptionally large mergers. These 
transactions have posed significant public policy considerations and 
have implicated existing FCC rules. Often they have engendered 
significant opposition, not just from competitors or customers of the 
licensees, but from members of the public as well. While I generally 
believe that our efforts to resolve the issues raised in the 
application proceedings have had positive intentions and results, we 
can and should make changes to expedite the process and to make it more 
transparent to the public.
    First, the Commission should commit to a more predictable timetable 
for identifying and resolving the issues presented by mergers. The 
Commission should place applications on public notice immediately upon 
receipt, and call for the filing of comments and petitions to deny on 
appropriate dates, usually within 30 days. The Commission should commit 
to a specific time frame for identifying any additional information 
that the applicants must submit, or any issues that the applicants must 
address. As a general matter, I believe that reviews of complex 
transactions should be completed within 180 days, if proponents submit 
requested documentation in timely fashion. Time constraints should not 
enable merger applicants to game the process by running out the clock.
    Second, the Commission should ensure that its processes are open 
and transparent. The Commission should be judicious in its use of the 
``permit but disclose'' process in license transfer proceedings, and 
limit the period for such interaction when it is used. The Commission 
should be diligent in ensuring that the contents of any claims or 
proposals made in such meetings appear in the public record. Commission 
requests for information should be reduced to writing and placed in the 
public record.
    Finally, the Commission should be prepared to so rule when a 
proposed transaction, as originally proposed, is not in the public 
interest. If we consider conditioning the grant, such conditions should 
be narrowly tailored and designed to address identified merger-specific 
ills. We should refrain from imposing conditions that are more 
appropriate for a rulemaking of general applicability.
4. Newspaper and Mass Media Ownership Restrictions
    Question. Would you agree that radio and TV stations, cable TV 
channels, newspapers and the Internet are among the many competing 
sources of news and information available to consumers today?
    Answer. Yes. The media landscape has changed significantly. Cable 
TV channels have become important sources of news and information for 
some consumers. Others turn regularly to the Internet. Newspapers and 
magazines continue to be major sources of news and information as well.

    Question. If so, why does the Commission count ONLY radio and TV 
stations for purposes of applying its new local broadcast ownership 
rules?
    Answer. In applying the radio/TV cross-ownership rule, in addition 
to broadcast stations, the Commission counts both a cable system and a 
daily newspaper as marketplace voices.
    In the TV duopoly rule, in order to simplify the test, the 
Commission limited its voice count to radio and television stations, 
but set the threshold number of voices at a level that recognized the 
impact of cable television, satellites, newspapers and Internet access 
on marketplace diversity.
    Radio and television stations are the only communications vehicles 
licensed by the Commission. In most markets, there are far more 
applicants than there are licenses available. Therefore, given the 
continued reliance by the public on television and radio for most news 
and information, it remains in the public interest to broadly 
disseminate broadcast licenses.

    Question. When the local cable TV operator can offer (and even own) 
dozens of different channels of cable programming, why does the 
Commission prohibit a local newspaper from owning even one local TV 
station?
    Answer. Broadcast television stations and newspapers remain the 
most influential sources of local news and information for the public. 
To promote viewpoint diversity, the Commission historically has 
prohibited the common ownership of broadcast and newspapers in the same 
market.
    I believe that the competitive marketplace has changed 
significantly over the past few years, propelled by the clustering of 
cable systems within a geographic market, the advent of the Internet, 
local stations carried on satellite, digital television and other 
emerging sources of information. Moreover, relationships between 
content providers and distribution outlets are shifting dramatically, 
changing the underlying economics of information and entertainment 
production and dissemination. Therefore, I believe that it is timely 
for us to revisit our newspaper/broadcast cross-ownership rules to 
determine whether they continue to serve the public interest. The 
Commission is examining all of our broadcast rules under its Biennial 
Review, and I plan to take a fresh look at both the radio and 
television cross-ownership rules in the course of that review.

    Question. When the Internet enables any user to interact with a 
virtually endless variety of different sources of information and 
viewpoints, how does the Commission justify retaining ANY broadcast 
ownership restrictions based on the need to assure ``viewpoint 
diversity''?
    Answer. As noted above, I agree that the marketplace has changed 
dramatically over the past few years. Last summer, the FCC 
significantly relaxed the one-to-a-market rule and television duopoly 
rules to reflect marketplace realities. Our Biennial Review, currently 
before the Commission, provides an opportunity to reexamine all of our 
rules to determine whether they continue to serve the public interest. 
I plan to take a fresh look at these rules.
    While I agree that the Internet provides an endless variety of 
sources of information and viewpoints, not all of the population has 
access to the Internet at home. Far fewer still enjoy broadband 
Internet access. As we examine our ownership rules, I look forward to 
reviewing any studies that may be submitted regarding how the Internet 
is changing the public's consumption of information and whether it is 
reducing the preeminent role historically played by the broadcast 
industry.
5. Deregulation and Forbearance
    Question. You have said that the FCC must know ``not just when to 
regulate, but when to deregulate.'' Section 10 of the 1996 Telecom Act 
states that the FCC must abstain from regulation if it determines that 
(1) enforcement is not necessary to ensure that charges and practices 
are just and reasonable; (2) enforcement is not necessary for 
protection of consumers; and (3) forbearance is consistent with the 
public interest.
    What competitive indicators do you look for, and what type of 
record showing do you require, in evaluating forbearance requests?
    Answer. An important objective of the Telecommunications Act of 
1996 is deregulation of telecommunications markets. As competition 
develops and expands in telecommunications markets, many rules and 
statutory provisions designed for monopoly markets may no longer be 
necessary, and indeed, may adversely affect innovation and competition. 
In Section 10, Congress provided the Commission with a powerful and 
precise deregulatory tool. I believe we must use this forbearance tool 
even more aggressively in the future as competition develops further.
    We have used our forbearance authority, as well as our preexisting 
ability to eliminate or modify our rules, to reduce burdens on 
carriers. Among other things, we have eliminated and streamlined: (1) 
requirements for mid-sized and small carriers; (2) accounting 
requirements for all carriers; (3) tariff-filing requirements; and (4) 
pre-approval requirements prior to offering new or expanded services. 
We have also provided a blueprint for deregulating access services as 
competition increases. Sometimes we have chosen to address a problem 
raised in a forbearance petition by way of a rulemaking that would have 
broader applicability.
    Regarding the record showing, the starting point for any 
forbearance analysis is the three-prong test in the statute. Parties 
seeking forbearance should set forth an explanation of how the 
statutory criteria are met. In applying the congressionally mandated 
standards, the Commission should conduct a comprehensive and aggressive 
Section 10 analysis so that we can eliminate unnecessary regulations 
that detract from competition while preserving those that continue to 
serve vital purposes. I do not believe that the burden of proof lies 
exclusively on the shoulders of forbearance proponents.
    As for competitive indicators, I would first note that the 
statutory criteria can be better assessed in the context of specific 
examples than in the abstract. In particular, where the forbearance 
petition relates to a congressional statute (as opposed to Commission 
regulation), I would consider carefully Congress's underlying policy 
objectives for that provision. If the statutory provision were enacted 
to address lack of competition in the marketplace, I would find it 
useful to review data demonstrating the changed competitive 
circumstances and dynamics of the relevant market(s).
    Congress has given the Commission appropriate guidance in Section 
10 concerning the removal of unnecessary regulation. The provision 
requires forbearance when market forces can ensure that prices and 
practices are just and reasonable, when consumers will be protected, 
and when the public interest will be served. As competition develops, 
we should rely to an even greater extent on market solutions, rather 
than traditional economic regulation. In addition, we should 
proactively use our forbearance power not only when the development of 
competition justifies the easing of regulation, but also when doing so 
will accelerate the development of competition without harming 
consumers.
6. Digital Television
    Question. Recently the cable and consumer electronics industries 
came to an agreement on standards for cable-ready digital television 
sets. When can we expect to see similar progress between copyright 
holders and equipment manufacturers? What is the Commission's role in 
such negotiations?
    Answer. The off-air availability of first quality digital product 
is a critical component of the broadcast transition from analog to 
digital. Few consumers will be interested in digital broadcast if 
compelling programming has not been made available.
    Copyright holders and equipment manufacturers have been in 
protracted negotiations for well over a year on adoption of a copy 
protection technology and the terms for licensing its use. Currently, 
the leading contender is the ``5C'' technology, and the five companies 
that own the technology have been meeting periodically with major film 
companies to try to reach an agreement on the technology. I do not know 
when they will reach an agreement. The film companies apparently differ 
among themselves in their priorities and attitudes with respect to 5C.
    I believe that government has the obligation to ensure that the 
American public has access to the best free digital broadcast system 
possible and that the transition from analog to digital is as smooth as 
possible for our citizenry.
    The Commission can play a role in facilitating inter-industry 
agreements, preferably, without regulation. I have always favored 
marketplace solutions to these issues. To this end, I have occasionally 
convened meetings of the heads of all of the trade associations with a 
stake in the digital transition to identify outstanding issues and to 
set deadlines by which the parties would resolve them. The Commission, 
however, should intervene if parties fail to reach agreement, consumers 
are harmed, and the Commission has sufficient legal authority to act.
                           Further Questions
1. General:
Initial question. If you had the chance to change only one of the many 
votes you have cast during your tenure as a Commissioner, which one 
would it be?

    Question 1. Further question: Your response to this question was 
that you most regret having voted in favor of allowing PCS C Block 
licensees to utilize installment payments, in part because, ``The 
unintended consequences of authorizing installment payments have been 
delays in the provision of service to the public . . .''
    In your judgment, do any of the Commission's other C Block 
implementing rules create a tension between the goals of increasing the 
number of small business competitors in the market and enhancing 
consumer welfare most effectively?
    Answer. Whenever the Commission adopts rules that limit the 
availability of spectrum to specific uses or users--either through 
technical restrictions or through eligibility requirements--a tension 
is created between the benefits achieved by the restriction and the 
benefits that might be obtained from more flexible rules.
    In the C Block service rules, I supported the Commission's efforts 
under Section 24.709 to ensure that consumers would reap the benefits 
of competition in the provision of personal communications services 
(``PCS'') from small businesses and other statutorily designated 
entities. The C Block rules, in their entirety, were designed to enable 
entrepreneurial companies with limited access to up-front capital 
required for auctions to enter the market, construct facilities, and 
offer service to the public.
    A variety of qualifying entities have acquired C Block licenses, 
and are providing new, innovative and competitive communications 
services to the public as a result of the eligibility restrictions. 
Among other things, these services have addressed the need for more 
rapid deployment of service in rural areas and service plans that 
target users beyond high-end business consumers.
    As you may be aware, we currently are considering requests to 
reevaluate these rules in conjunction with the reauction of C Block 
spectrum. As I review the requests to alter the eligibility rules for 
future C Block auctions, I will take into account the dynamics of the 
marketplace today to see whether the restrictions continue to serve the 
public interest.

    Question 2. Other Commission rules and policies would appear to 
create similar tensions between these same goals. Please assess the 
extent to which the following ostensibly competition-enhancing rules 
do, or do not, unintentionally compromise the goal of efficiently 
giving better service to the average consumer: (a) the effect of the 
rules implementing Sections 251 and 271 in providing average 
residential consumers with more choices among competing providers of 
local and long-distance telephone service; (b) the effect the 
application of these rules has had in providing average residential 
consumers with more choices among competing providers of high-speed 
broadband service; and (c) the effect that maintaining the newspaper-
broadcast cross-ownership restriction has in assuring that average 
consumers have access to a diverse array of print and electronic 
sources of news and information.
    Answer. (a) The framework that Congress established in Sections 251 
and 271, and the Commission's implementation of those sections, ensure 
that consumers reap the benefits of increased competition in both local 
and long-distance markets. Sections 251 and 271 enable Bell companies 
to participate in the long-distance market, but only after they have 
opened their local markets to competition. The experience in New York 
illustrates that, when barriers to competition are removed, competitors 
will enter all segments of the local market, including the facilities-
based residential market. And once a Bell Company has fulfilled its 
responsibility to open its local market to competition, Bell Company 
participation in the long-distance market leads to intensified 
competition in that market.
    (b) The Commission has sought to carry out Congress' pro-
competitive and deregulatory objectives in the advanced services market 
not only to promote the deployment of broadband services, but also to 
facilitate consumer choice among broadband service suppliers. I am 
encouraged that companies in virtually all segments of the 
communications industry--including wireline, cable, wireless, and 
satellite--are rushing to deploy broadband services.
    For instance, to promote competition in wireline broadband 
services, the Commission adopted rules to ensure that competitors can 
obtain access to loops and collocation space, as Congress directed in 
Section 251. In addition, the Commission ruled that customers of 
incumbent carriers may choose to receive high-speed broadband services 
from a competitor, while receiving voice services from the incumbent. 
At the same time, however, the Commission determined that incumbent 
carriers generally are not required to unbundle facilities they use to 
provide advanced services, including packet switches and DSLAMs. In 
addition, the Commission has held that, when a carrier sells advanced 
services in bulk to an Internet provider, those services are generally 
not subject to the wholesale discount requirement in Section 251(c)(4). 
In all of these actions, the Commission's objective has been to reduce 
barriers to competition so that companies are able to invest and 
innovate and consumers reap the benefits of a multiplicity of 
providers.
    (c) In the case of the newspaper/broadcast cross ownership rule, 
the historic purpose of the rule has been to foster diversity of 
viewpoints between a local broadcaster and a local newspaper, 
maintaining two voices as opposed to one among the sources consumers 
traditionally rely upon for their news and information. To that extent, 
the intended purpose of the rule and the actual effect of the rule are 
the same.
    However, as I have previously recognized, changes in the media 
marketplace warrant the Commission examining whether the historic 
purpose of the rule still has merit, and whether the rule should be 
modified to account for changes in the media landscape. I plan to take 
a fresh look at the newspaper/broadcast cross ownership rule in the 
context of the Biennial Review item currently before the Commission, at 
which time I will examine carefully the public record on this issue.

Initial question. What are the three most important problems facing the 
FCC today, and what would you do to address them?

    Question 3. In your answer you alluded to the difficulty of 
attracting and retaining qualified technical experts, particularly 
engineers. As you know, the Commission's technical expertise in the 
technology and economics of the telecommunications industry is the 
principal factor limiting the scope of the judicial review that 
Congress authorized in the Administrative Procedure Act (the ``APA''). 
The American Bar Association is currently preparing a Restatement of 
Administrative Law that will address this, and other, issues relating 
to the scope of judicial review of Commission action.
    The following questions seek further information on your views on 
the Commission's technical expertise and the doctrines that govern the 
availability and scope of judicial review of Commission actions under 
the APA:

    A. Although courts have articulated tests for distinguishing 
reviewable ``final agency action'' from non-reviewable agency actions, 
they have also called such tests ``baffling,'' ``confused'' and 
``enshrouded in considerable smog.'' The Administrative Conference of 
the United States (``ACUS'') has proposed that the Commission and other 
agencies should have to state affirmatively when they issue 
``guidances'' or other documents that are not intended to have the 
force and effect of law that would render them immediately reviewable 
under the APA. Do you support the ACUS recommendation, and if not, what 
alternative standards would you propose for identifying those 
Commission actions that should be subject to judicial review?
    Answer. As a general matter, I do not believe that the Federal 
Communications Commission, or other administrative agencies, should 
adopt ``guidances'' or other documents that affect the substantive 
legal rights of regulated entities and have such actions escape 
judicial review. Any final administrative action that affects the 
substantive legal rights of a party should be subject to judicial 
review.

    B. The American Bar Association's Restatement of Administrative Law 
proceeds, for now, from a 1986 analysis that concludes that ``[t]he 
vigor with which such review [of agency action] is conducted will 
depend on the individual judge's assessment of competing policies.'' 
See Ronald M. Levin, Scope-of-Review Doctrine Restated: An 
Administrative Law Section Report, 38 Admin. L. Rev. 233, 253 (1986). 
Do you support the so-called ``hard look'' line of cases that would 
allow reviewing courts to ``extensively examin[e] the agency's 
analysis''? See id. at 260.
    Answer. As the article cited in your question recognizes, the 
``hard look'' doctrine for review of agency decisions raises some 
controversial issues and is met with some skepticism. See Ronald M. 
Levin, Scope-of-Review Doctrine Restated: An Administrative Law Section 
Report, 38 Admin. L. Rev. 233, 259 (1986) (``hard look'' line of cases 
``should be read with some skepticism, for the type of judicial 
argument that they reflect is highly controversial, and the Supreme 
Court guidance concerning it is uncertain''). I do believe that 
rigorous judicial scrutiny of agency work product serves ``a valuable 
quality control function'' where it is accomplished through an 
intensive examination of the agency's own analysis. In this respect, 
the Commission is forced to take a ``hard look'' at its own decision 
making, which it should do regardless of the standard of judicial 
review that is applicable.
    On the other hand, to the extent that such review involves the 
substitution of the judgment of judges on the merits, the ``hard look'' 
could impair the coherence of regulatory programs. Such review also may 
strain the technical competence of the judiciary in highly technical 
areas where the agency is authorized to develop and retain expert 
personnel. See id. at 260. Given these concerns, ``hard look'' review 
of agency action should permit the reviewing court to rigorously review 
the agency's analysis and rationale for its decision, but not 
substitute its own judgment for the judgement of the agency where the 
agency determination is reasonable or based upon agency expertise.

    C. In Fresno Mobile Radio. Inc. v. F.C.C., 165 F.3d 965, 970 (D.C. 
Cir. 1999), the D.C. Circuit rejected the Commission's conclusion that 
incumbent SMR license-holders would be more likely to warehouse SMR 
spectrum than EA license-holders. The Court called the Commission's 
conclusion ``a foolish notion that should not be entertained by anyone 
who has had even a single undergraduate course in economics.''
    (1) Please explain why the D.C. Circuit was or was not correct when 
it concluded that the Commission's disparate treatment of EA and 
incumbent SMR licensees was based upon an economic analysis that 
constituted ``a foolish notion that should not be entertained by anyone 
who has had even a single undergraduate course in economics?''
    Answer. In Fresno Mobile Radio, Inc. v. FCC, 165 F.3d 965 (D.C. 
Cir. 1999), the court of appeals upheld the majority of the 
Commission's rules relating to a new class of radio spectrum licenses 
for bandwidth in the 800 MHz range. The one aspect of those rules that 
the court invalidated involved the Commission's interim construction 
requirements. Under those requirements, licensees that had recently 
obtained licenses at auction (EA licensees) were allowed to provide 
service within their geographic areas more gradually than were 
incumbent SMR licensees that had received licenses under a different 
set of rules not involving a competitive bidding process. The 
Commission justified that distinction in treatment on two different 
grounds, both of which were rejected by the court. Your question 
relates to the second, alternative justification, which the Commission 
addressed in one sentence of its order: ``Moreover, the competitive 
bidding process provides incentives for EA licenses to build out 
quickly, and thus reduces the likelihood that a longer construction 
period would lead to spectrum warehousing.'' Amendment of Part 90 of 
the Commission's Rules, Memorandum Opinion and Order on 
Reconsideration, 12 F.C.C. Rcd9972, para. 81 (1997).
    As I understand this language, the Commission reasoned that a 
licensee that had recently secured the considerable financing necessary 
to prevail at auction would feel more pressure to earn an immediate 
return on its investment than would licensees that had never incurred 
any similar expense in obtaining their spectrum. As the D.C. Circuit 
explained, that reasoning, without more, is inconsistent with a basic 
textbook axiom of economic behavior, under which ideally rational 
actors ignore sunk costs when making business decisions. 165 F.3d at 
969. The court suggested that the Commission's approach might have been 
justifiable if lenders or others had imposed ``institutional 
constraint[s]'' on the build-out choices of EA licensees, but, the 
court observed, the Commission had made no such finding, and its 
rationale thus lacked an empirical foundation. Id. On remand, the 
Commission addressed the court's concerns by, among other things, 
authorizing incumbent SMR licensees to choose a build-out regime 
similar to the one recently adopted for EA licensees. See Amendment of 
Part 90 of the Commission's Rules to Facilitate Future Development of 
SMR Systems in the 800 MHz Frequency Band, FCC No. 99-399 (Dec. 23, 
1999). I fully supported the decision to alter our rules rather than 
look to bolster the decision with an empirical foundation.

    D. If you disagree with the D.C. Circuit's analysis, please provide 
citations to the briefs and the administrative record filed by the 
Commission that show that your arguments were presented and explained 
to private industry and the Court.
    Answer. As explained above, I have accepted the D.C. Circuit's 
analysis in the Fresno Mobile Radio decision.

    Question 4. In your response to the initial question, you state 
your goal of ``promulgat[ing] rules that provide incentive for the most 
efficient resolution of sharing or relocation issues through the 
operation of market forces.'' Many would suggest that market forces, 
not regulation, provide the greatest incentives for efficient 
resolution of most problems, and that regulation often impedes, rather 
than helps, market forces achieve efficiency. Please give three 
examples of Commission rules that, in your judgment, have facilitated 
the operation of market forces. In each case, please explain what 
specific market incentives the rule provided that the market did not, 
what additional burdens or costs the rule imposed, and the specific 
reasons why you believe that the rule was justified in light of these 
costs.
    Answer. In my response to the initial question, I acknowledged that 
at times, the Commission will have to make difficult choices regarding 
spectrum allocations, and then promulgate rules that provide incentive 
for the most efficient resolution of sharing or relocation issues 
through the operation of market forces. This acknowledgement arose 
specifically because I believe that market forces, not regulation, 
generally provide the greatest incentives for efficient resolution of 
most problems, and that regulation often impedes, rather than helps, 
market forces achieve efficiency.
    Examples of Commission actions that have facilitated the operation 
of market forces include:
    (1) In WT Docket No. 95-157, the Commission adopted rules covering 
the relocation of fixed microwave services from the 1850-1990 MHz 
frequencies to provide for the establishment of services using emerging 
technologies. These rules were part of the Commission's efforts to 
allocate spectrum for use in the provision of, among other things, new 
personal communications services (``PCS''). The Commission provided for 
first, a voluntary relocation period, and then, subsequently, a 
mandatory relocation period, to ensure that newly-licensed PCS 
operators could obtain the use of the spectrum that they won at 
auction. By providing for a separate voluntary relocation period 
followed by a mandatory relocation period, the Commission provided 
incentives for PCS operators and fixed microwave licensees to agree 
upon a market-based price for relocation. The relocation requirement 
for fixed microwave licensees was the ``burden or cost'' imposed by the 
rules. The relocation was justified by the public interest in the 
allocation for PCS services and the need to prevent interference 
between PCS and microwave operations.
    (2) Last fall, the Commission modified its rules requiring 
commercial mobile radio service providers to establish and implement 
plans to provide wireless emergency 911 (``E-911'') services. In that 
action, the Commission adopted new rules that permit carriers to select 
from two different technologies to provide wireless E-911 service--
``hand-set based'' solutions and ``network-based'' solutions. Although 
slightly different timing and measurement requirements apply to each 
technology, the rules were designed to achieve regulatory parity for 
both technologies so that market forces would determine which 
technology a carrier selects. The ``burden or cost'' will be the cost 
to the carrier, and ultimately to the public, for electing an E-911 
solution and implementing it within the time set forth in the FCC's 
rules. The rules are justified by the public benefit derived by 
expedited initiation of wireless E-911 service.
    (3) As required by Congress, the Commission promulgated rules that 
call for an auction of the spectrum in the 746-806 MHz band. 
Specifically, in June 2000, the Commission will auction 30 MHz of 
spectrum. The spectrum will be auctioned in two paired 5 and 10 MHz 
blocks, with 6 regional licenses for each paired block. In adopting 
these frequency blocks and geographic regions, the Commission declined 
to allocate the spectrum in one nationwide 30 MHz block, and also 
declined to break the spectrum up into smaller regional or frequency 
blocks. Some parties advocated one nationwide 30 MHz license, to enable 
them to provide a nationwide fixed broadband service. Some wireless 
carriers planning to provide new ``third generation'' mobile services 
argued that a nationwide allocation of 30 MHz would hinder their 
ability to purchase the spectrum license for regional service. Some 
sought smaller allocations in 50 or 176 geographic regions. So that 
market forces--not government regulation--would determine the use of 
this spectrum, the Commission divided the spectrum into 6 large 
regional blocks of 10 or 20 MHz, and allowed the blocks to be 
aggregated. Admittedly, there is a ``burden or cost'' to aggregate six 
regions of 10 and 20 MHz blocks. However, the Commission's action was a 
practical way to allow bidders with different business plans to acquire 
the spectrum under a set of rules that did not favor one service over 
another.

    Question 5. You further state in your initial response that the 
Commission must allocate ``suitable spectrum'' for the provision of new 
and advanced wireless services. In light of the ever-increasing 
scarcity of spectrum resources, how do you define ``suitable 
spectrum?'' Do you account for future growth in making this 
determination? If so, what time frame do you consider and what factors 
do you use to analyze growth projections?
    Answer. In answering the first set of questions, I stated that the 
FCC must allocate ``suitable spectrum'' for the provision of new and 
advanced wireless services. In using the term ``suitable spectrum,'' I 
meant spectrum that has the appropriate propagation characteristics and 
channel capacity to support advanced mobile, or fixed, wireless 
services. For example, it is difficult to provide mobile terrestrial 
services in bands well above 3GHz. It would be inappropriate to allow 
high powered services on bands where there would be interference with 
bands reserved for public safety users. Finally, the blocks should be 
wide enough to accommodate anticipated services, and large enough for 
both initial and future growth of the service.
    When looking at potential allocations of spectrum, I do take into 
account future growth in service. An appropriate time frame should 
extend beyond a decade or more, although such projections are extremely 
difficult to make reliably given the dramatic changes that can occur. 
Generally, I consider projections submitted by the applicants, FCC 
technical experts, and other commenting parties. Also, I must consider 
the number of licenses to be awarded in the band.
    In resolving difficult sharing issues, one must take into account, 
not just the original service provider, but the aggregate impact on 
existing and future services when multiple licensees are providing 
service in the band.

    Question 6. Please elaborate on the specific steps the Commission 
takes in ``resolving difficult spectrum sharing issues.'' Does the 
Commission conduct its own independent technical analysis? If not, what 
steps does the Commission take to verify contradictory technical 
analysis submitted to substantiate interference claims?
    Answer. In cases where there is debate or conflict over spectrum 
sharing or interference issues, the Commission uses its own engineering 
experts, where feasible, to conduct an independent technical analysis. 
Such assessment may include a review of the literature, a detailed 
technical analysis of conflicting submissions by parties with divergent 
views, laboratory testing in our own facilities, or occasionally, field 
testing. Unfortunately, budgetary constraints at the FCC limit the 
extent of the FCC field tests.
    The Commission relies on the knowledge and experience of its 
technical staff for analysis in resolving the contradictory technical 
claims submitted to substantiate interference. Occasionally, I have 
advocated joint testing, with FCC oversight, in cases where parties 
make contradictory technical assertions of interference. Such joint 
testing with Commission participation would reduce disputes based on 
methodology of the testing, and would resolve interference claims more 
quickly.
2. On international spectrum issues:
Initial question: Based on your experience in past World Administrative 
Radio Conferences, what improvements would you make to the process by 
which the U.S. plans for, and participates in, international spectrum 
allocation meetings?

    Question 7. In your answer to this initial question, you indicate 
that the Commission needs more money in order to attract and retain 
qualified technical capacity. You also indicate that the FCC needs more 
money to send technical experts to the World Radiocommunication 
Conference. What criteria do you propose should be used to determine 
whether persons proposed for international travel are, in fact, 
technical experts whose presence will benefit U.S. industry? And what 
mechanism do you propose that Congress should use for holding the 
Commission accountable for these decisions? Finally, in your view, to 
what extent would this need for additional money be reduced if 
international travel were limited to satellite coordinations and WRC-
related activities?
    Answer. The private sector repeatedly has lauded the FCC members of 
the WRC and bilateral telecommunications delegations for their 
professionalism, expertise, and ability to work with industry as well 
as our government colleagues and other administrations to resolve 
difficult technical and policy issues. I have confidence in the ability 
of our bureau chiefs to select those employees best able to fill the 
staffing needs of a particular delegation. As a general matter, I would 
expect those individuals assigned to represent the United States 
government and the FCC at the WRC (and preparatory and regional 
sessions leading up to the Conference) to have the professional 
education, expertise and experience needed to analyze highly complex 
technical issues under pressure. These individuals also should possess 
a sound understanding of the practical or ``real-world'' consequences 
of complex technical proposals. Ideally, they should have experience in 
international negotiations on WRC issues and to have a reputation or 
authority that will command respect from negotiators from other 
administrations. Finally, it is desirable that such individuals possess 
an ability to work well in a team during long periods of intense 
negotiations.
    I believe that the normal congressional oversight function is 
adequate to hold the Commission accountable for its spending on 
international travel. Members of Congress can ascertain the identity 
and background of any Commission personnel participating in the WRC or 
its preparatory process. The FCC should regularly brief Congress on the 
progress being made on WRC. In addition, Congressional staff members 
previously have attended such conferences and were able to assess 
directly the performance of delegation members. The FCC should be held 
accountable for its international travel expenditures, especially in 
light of our budgetary constraints.
    Finally, in stating that the United States government earmark 
additional funds for participation in regional and bilateral meetings, 
I meant to encompass all aspects of WRC preparation, not just the 
regional and bilateral meetings. I have been told by industry 
representatives that our presence (or absence) at such meetings makes a 
difference. And of course, we must continue to fund satellite 
coordination activities. I would not recommend limiting FCC 
participation to international spectrum matters, however. Our 
participation in bilateral meetings with our counterparts from other 
countries has helped to open foreign markets to competition, lower 
international accounting rates, eliminate time-consuming type-approval 
processes for telecommunications equipment, and resolve other 
telecommunications licensing issues. These negotiations and agreements 
protect U.S. consumers, enhance competition domestically and globally, 
as well as protect critical military, public safety systems, and other 
services from interference.

    Question 8. What do you believe are some of the issues that will 
pose the greatest challenges to the national security interests of the 
United States during WRC-2000?
    Answer. I rely on the NTIA and their clients (i.e., the Department 
of Defense and the National Security Agency) to alert us to the 
critical issues implicating the national security of the United States 
as we plan for and participate in the world radio conferences. This 
year, I anticipate at least two issues at WRC-2000 of concern to DOD 
and the NSA: First, several administrations may seek to establish a 
mobile satellite service in frequency bands where the United States 
government uses global position systems and technology. Second; one of 
the frequency bands targeted by some administrations for third 
generation mobile services includes 1755-1850 MHz--frequencies that 
presently are allocated to the Department of Defense. Within the U.S. 
government, there have been extensive discussions early on with the 
Department of Defense so that the delegation would understand the 
Department's 
concerns.

    Question 9. Over the past few years, the national security 
community has expressed concern with the reallocation of some spectrum 
from the Department of Defense to the commercial sector, and over 
reports of interference between systems of the Department of Defense 
and the private sector. Do you believe that the current process is 
adequate to ensure a fair allocation of spectrum to meet the needs of 
the government, and the Department of Defense in particular, as well as 
the needs of the commercial sector? What, if any changes would you 
recommend?
    Answer. Under the current process, Congress has enacted legislation 
whenever 
it has determined that the public would best be served by reallocating 
spectrum from government use to the commercial sector. Given the 
current scarcity of unencumbered spectrum, the private sector 
understandably desires even greater access to spectrum reserved for 
federal government use and argues that government should be required to 
be more spectrally efficient. At the same time, the Department of 
Defense argues that its retention and use of spectrum is essential to 
protect the national security of the United States. I am encouraged 
that NTIA has initiated a dialogue with industry to explore ways to 
maximize the efficiency with which U.S. government uses spectrum.
    These dialogues may also identify chunks of spectrum that can be 
used by industry without significant adverse effect on federal 
government operations. I have urged such exchanges in the past, and 
commend NTIA for this initiative.
    Additionally, I recognize that the Commission must give serious 
consideration at an early stage to NTIA and DOD concerns regarding any 
proposed FCC spectrum allocations or rules that might adversely impact 
U.S. government operations. I support more regular exchanges between 
the FCC and NTIA/DOD on spectrum matters. I am pleased that the FCC's 
Spectrum Policy Executive Committee has begun to participate in such 
exchanges. We regularly try to obtain NTIA comments on proposals before 
releasing a notice of proposed rulemaking on matters that affect 
government systems. While the Commission must follow the Administrative 
Procedure Act in finalizing its rules, NTIA participation at an early 
stage ultimately will expedite resolution of issues.

    Question 10. Do you support the development of better receiver 
standards to ensure that systems operating in adjacent frequencies do 
not receive interference from one another?
    Answer. I support efforts by industry to develop receivers 
appropriate to the circumstances of the particular radio service in 
conjunction with which they are used. In some cases, voluntary industry 
standards may be a useful means of reducing the susceptibility of 
receivers to interference from undesired signals. While the Commission 
has authority to establish interference susceptibility standards for 
home electronic equipment, I am not aware that the Commission has ever 
chosen to use this authority except in conjunction with implementation 
of the All-Channel Receiver Act. Despite the FCC's historic restraint 
in adopting receiver standards, given the increased demand for 
spectrum, I am willing to explore all options for improving spectrum 
efficiency, including, as a last resort, proceedings to establish 
better receiver standards.

    Question 11. Can we expect the U.S. to harmonize its spectrum 
allocations with the rest of the world in order to promote advanced 
wireless services such as 3G? Isn't such harmonization necessary for 
U.S. manufacturers and service providers to achieve parity with foreign 
competitors?
    Answer. While it might be desirable for the United States and other 
administrations to harmonize spectrum allocations, particularly with 
respect to advanced wireless services such as 3G, such a result will be 
extremely difficult to accomplish. First, it is unlikely that the rest 
of the world will be able to agree on a frequency band or bands that 
will harmonize globally the spectrum in which 3G services will be 
provided. Europe, Canada, Asia and the South and Latin American 
countries have not suggested any consistent approach to harmonization 
of spectrum for 3G. Moreover, the bands that have emerged as the most 
popular proposals in certain regions of the world are, in the United 
States, either allocated to the Department of Defense or heavily 
encumbered by licensees of Instructional Fixed Television Service or 
Multichannel Multipoint Distribution Services.
    U.S. and foreign manufacturers and 3G service providers would 
indeed benefit from a globally harmonized 3G allocation. This is one 
reason why products utilizing software defined radio technology which 
permit operation in a much wider range of frequencies hold such promise 
to reduce the burdens of disparate allocations.

    Question 12. Please explain your views on the appropriate 
government role on technology standards. Wouldn't the adoption of an 
FCC standard for advanced wireless technologies, such as 3G, improve 
U.S. competitiveness in the worldwide market?
    Answer. As a general matter, I support the operation of market 
forces and voluntary industry initiatives to develop and establish 
technology standards. Such flexibility has facilitated technological 
innovation, as technologies compete in the marketplace. There are 
tradeoffs, however. A global standard enables manufacturers to amortize 
costs across a larger number of units, lowering the cost to consumers. 
Additionally, common equipment standards may increase service 
competition because the cost to the consumer of switching providers is 
less if the consumer does not have to buy a new handset. Moreover, 
where there is a common standard and common spectrum allocation, 
consumers are not inconvenienced when traveling abroad.
    Because the U.S. has pursued a course of ``flexibility'' and Europe 
has maintained an industrial policy of establishing technical 
standards, many believe that the U.S. has fallen behind its trading 
partners in the provision of mobile wireless services. This divergence 
of approaches has been the source of much international negotiation 
over the past two years.
    While in the short term, regulatory flexibility may permit the 
development of divergent standards that delay ubiquity or 
interoperability of service, in the long term, consumers will benefit 
from continued improvements in technology. The key may be to require 
interoperability of systems and where feasible, to look for global 
spectrum to allocate. Longer term, technologies such as software 
defined radio may eventually obviate the need for uniform global 
spectrum allocations or standards. And the U.S. should work with 
industry and our trading partners to identify early on common spectrum 
for advanced services.
    Notwithstanding my general preference for flexible standards and 
allocations, I will not hesitate to press industry to adopt open 
standards. I also will not hesitate to ratify an industry-developed 
standard (such as digital television), if I am convinced such action is 
essential for consumers to reap the benefits of a new service.
3. On FCC Merger Reviews:
Initial question: I realize that you support continuing the FCC's 
authority to review telecom mergers. Based on your five years' 
experience, is there any aspect of the current process that needs 
improvement, and, if so, what specific changes would you make?

    Question 13. You have indicated that when the Commission conducts 
merger review, it should impose only ``voluntary conditions'' that are 
``narrowly tailored and designed to address identified merger-specific 
ills'' and that ``refrain from imposing conditions that are more 
appropriate for a rulemaking of general applicability.'' Do you believe 
that ``voluntary conditions'' accepted by companies seeking to 
consummate a merger are ``final agency action'' reviewable under the 
APA, and if not, what language would you propose adding to the APA or 
the Communications Acts to ensure that even ``voluntary'' merger 
conditions can be reviewed by courts to ensure that they meet your 
proposed requirements for merger conditions?
    Answer. Section 402(b) of the Communications Act of 1934, as 
amended, permits applicants to appeal from decisions and orders of the 
Commission if their application ``is denied by the Commission.'' 47 
U.S.C. Sec. 402(b)(l-2). Under Section 402(b)(6) of the Act, appeals 
also are available to ``any other person who is aggrieved or whose 
interests are adversely affected by any order of the Commission 
granting or denying any application.'' Section 402(b) generally has 
been construed to prevent an applicant from seeking review of a 
decision granting its application, even where conditions have been 
imposed on the grant, an interpretation that is consistent with the 
Commission's rules.
    If Congress wants to permit judicial review of conditions placed on 
a grant, it could amend Section 402(b)(6) to authorize appeals by ``any 
person, including an applicant, who is aggrieved or whose interests are 
adversely affected by any order of the Commission granting or denying 
any application.'' I would agree with the notion that parties should be 
able to seek review of agency actions that adversely affect their 
interests, including conditions placed on the grants of their 
authorizations. On the other hand, if I were to support such review, it 
would be limited by two concerns. First, applicants generally are 
required to exhaust their administrative remedies before the agency 
prior to seeking review in court. If an applicant does not challenge 
the imposition of a condition before the agency, both the reviewing 
court and the agency are placed in a difficult, if not untenable, 
position in considering the appeal. The agency, as a deliberative body, 
will not have had the opportunity to express its rationale for the 
imposition of the condition. Second, court actions eliminating or 
modifying conditions imposed on the grant of an application may alter 
the public interest analysis underlying the grant, and make decisions 
on remand from such reversal problematic, especially where, as usual, 
the transaction already has been consummated.
    These concerns only strengthen the belief I expressed in my initial 
answer that the process is best served where, conditions are ``narrowly 
tailored and designed to address identified merger-specific ills.'' I 
note that in my initial answer, in stating this belief, I did not 
differentiate between ``voluntary conditions'' and ``conditions.''

    Question 14. Please explain where, in the continuum between the 
following opposite views, your own views are:
    (A) In a free market, regulated companies have a presumptive right 
to merge with other companies. Government bears the burden of showing 
how, and why, certain aspects of a proposed merger would harm the 
public interest, and any remedies or conditions imposed by government 
should be narrowly tailored to address the demonstrable harms that 
would otherwise occur by virtue of the merger's unconditioned 
consummation.
    (B) In the interests of consumers, regulated companies have no 
presumptive right to merge. The companies, not the government, bear the 
burden of showing how, and why, a proposed merger would further the 
overall public interest. Government is free to impose conditions on a 
merger that in its judgment would advance the public interest, 
regardless of how closely related the conditions are to the prevention 
of demonstrable harm that would not occur but for the merger's 
unconditioned consummation.
    Answer. My views come much closer to the first of these two 
statements than to the second. I differ only as to the burden of proof, 
which, as with other applications, lies with the applicant. But in the 
great majority of mergers reviewed by the Commission under Sections 214 
and 310 of the Communications Act, this burden is easily and routinely 
met.

    Question 15. Please show how the FCC's recent SBC/Ameritech, Bell 
Atlantic/NYNEX, AT&T/TCI and US WEST/Qwest merger decisions exemplify 
your views as you expressed them in your answer to the above question.
    Answer. These mergers are several of the largest and most complex 
that the Commission has addressed during the past few years. Each of 
them has engendered significant opposition and has posed significant 
public policy considerations.
    First, in evaluating these applications, we have sought to engage 
in a transparent process, consistently trying to improve it in a manner 
that encourages public comment. Each of these applications was put out 
for public comment, and, in certain cases, public forums were held at 
which time the public was encouraged to air its views. In the case of 
SBC/Ameritech, proposed conditions were also placed on the public 
record for comment. Nevertheless, as I stated in my responses to the 
original questions, this is an area in which the Commission can and 
should strive for improvement. We must engage in an open dialogue on 
the record with all stakeholders. In this way, we can ensure a decision 
that is widely accepted as fair.
    Second, although the review of some of these transactions was 
completed in a reasonable period of time (the AT&T/TCI review, for 
example, was completed in less than 180 days), I am very concerned that 
the Commission did not move with sufficient speed to render a decision 
in all of these transactions. As I have stated publicly and repeatedly, 
the Commission should resolve such applications far more rapidly than 
it has in the past.
    Third, in the vast majority of transactions the Commission reviews, 
the Commission has determined that the transactions would serve the 
public interest without conditions. At times, and in these 
transactions, the Commission has expressly declined to impose 
conditions that were requested by opponents, but that were not 
necessary to address merger-specific harms. For example, in AT&T/TCI, 
we expressly declined to impose ``open access'' requirements. In US 
WEST/Qwest, we expressly declined to require market-opening 
improvements or the creation of a separate affiliate.
    At other times, the Commission has adopted conditions that ensure 
compliance with the statutes and the Commission's rules. For example, 
the Commission determined that the US WEST/Qwest merger would serve the 
public interest provided that the applicants comply with Section 271 by 
carrying out their proposal to divest their in-region interLATA 
customers.
    In still other cases, the Commission has adopted conditions or 
accepted proposals designed to ensure that the public interest benefits 
of a transaction outweigh its harms. Some argue that certain of these 
conditions were not tailored in a sufficiently narrow manner to address 
only the harms caused by the merger. In these complex cases, I 
supported the acceptance of these conditions because I believed, on 
balance, that the transaction, as presented to the Commission with 
these conditions, served the public interest. Nevertheless, as I have 
indicated, the Commission should endeavor to ensure that any conditions 
it imposes are designed to address merger-specific ills.

    Question 16. Please indicate which paragraphs of the Commission's 
Bell Atlantic/NYNEX order do not duplicate the type of antitrust and 
competition analysis customarily performed by the Department of Justice 
in DOJ's merger review process.
    Answer. In the Bell Atlantic/NYNEX order, the Commission undertook 
an analysis that differed in significant ways from the analysis 
performed by the Department of Justice (DOJ). A full comparison with 
the DOJ analysis is not possible, because unlike the FCC, the DOJ did 
not issue an extensive document setting forth the analysis. The 
Commission, unlike DOJ, has the obligation to enforce specific 
requirements and provisions of the Communications Act that are outside 
of the DOJ's merger review process. To carry out its responsibility, 
the Commission examined whether the transaction would further the aims 
of the Communications Act, and whether the public interest benefits of 
the transaction outweigh the harms. To demonstrate the differences in 
the analysis, an illustrative, although not exhaustive, list of 
paragraphs from the Bell Atlantic/NYNEX order follows the points below.
    Although the DOJ and the Commission used a similar analysis to 
assess the relevant product and geographic markets, the analyses were 
not duplicative because the facts assessed were used to evaluate 
different statutory objectives. The DOJ, under the primary federal 
antitrust laws, examined whether the proposed merger would 
significantly lessen competition. The Commission examined whether, on 
balance, the transaction would promote the competition and deregulation 
that Congress sought to foster in the Telecommunications Act of 1996 
(``1996 Act''). Recognizing that the relevant markets were undergoing a 
rapid and dynamic transition from monopoly to competition, the 
Commission assessed the impact on competition both during the 
implementation of the 1996 Act and as implementation of the statute 
alters market structure in the future. See, e.g., para.para. 7, 10, 37-
48, 66, 96-100. The Commission also took into account declining entry 
barriers by, among other things, identifying as market participants not 
only firms that are currently in the market, but also those firms that 
were previously precluded from the market by barriers that the 1996 Act 
had sought to eliminate. See, e.g., para.para. 7, 58, 60, 80-94, 126-
127.
    Unlike the DOJ, the Commission further examined whether 
consolidation within the industry would substantially frustrate or 
impair the Commission's implementation or enforcement of the 
Communications Act. For example, the Commission examined the ability of 
the Commission to use benchmarks to detect discrimination and monitor 
compliance with the statute and the Commission's rules. See, e.g., 
para.para. 16, 147-152.
    In addition, the Commission examined other benefits and harms of 
the merger, including the effects of the merger on the incentives for 
implementation of the market opening provisions of the 1996 Act. The 
Commission also examined whether the transaction would affect the 
quality of telecommunications services provided to consumers or would 
result in the provision of enhanced or new services to consumers. See, 
e.g., para.para. 153-176.
4. Newpaper and Mass Media Ownership Restrictions:
Initial question: Would you agree that radio and TV stations, cable TV 
channels, newspapers and the Internet are among the many competing 
sources of news and information available to consumers today?

    Question 17. If so, why does the Commission count only radio and TV 
stations for purposes of applying its new local broadcast ownership 
rules?
    Answer. With regard to local radio station ownership, Section 
202(b)(1) of the Telecommunications Act of 1996 states unambiguously 
that the Commission ``shall'' revise its local radio ownership rules to 
correspond to the provisions of that Section, which states that a party 
may own, operate or control ``up to'' stated numbers of AM and/or FM 
stations, depending on the total number of stations in the local 
market. Although subsection (b)(2) states that the Commission has the 
discretion to allow parties to exceed the numerical limitations set 
forth in subsection (b)(1), the statute fails in any way to suggest 
that the Commission has the discretion to limit the number of local 
stations the statute would otherwise allow a party to acquire. The 
legislative history is consistent with this reading of the statute: 
``[Section 202(b)(1)] directs the Commission to further modify its 
rules with respect to the number of radio stations a party may own, 
operate, or control in a local market. Subsection (b)(2) provides an 
exception to the local market limits, where the acquisition or interest 
in a radio station will result in an increase in the number of radio 
stations'' (emphasis added).
    Notwithstanding the evidently clear wording and intent of the law, 
the Commission is purported to be considering adopting more stringent 
limitations on local radio ownership, consisting of ``guidelines'' on 
the percentage of concentration in the local radio advertising revenues 
that a given local radio station consolidation would produce.

    Question 18. How do you interpret the cited provisions of the 1996 
Telecom Act and accompanying legislative history? Do you read them to 
empower the Commission to reduce the number of stations the statute 
otherwise permits one party to acquire, or do you read them to empower 
a party to acquire any number and complement of stations ``up to'' the 
limits set by the statute without other FCC regulatory constraint?
    Answer. I do not believe that, under Section 202(b)(1) or (2), the 
Commission has discretion to reduce the numerical ownership limits 
established by the statute. Shortly after passage of the 
Telecommunications Act of 1996, the Commission amended its rules to 
account for the new statutory numerical limits.
    Section 202(b), however, did not remove the Commission's 
longstanding obligation to consider the public interest, including 
market concentration, in any transfer of control or assignment 
application proceeding. Instead, Section 310(d) of the Communications 
Act of 1934 requires the Commission to review all assignment and 
transfer applications for broadcast licenses and to grant them only if 
so doing would serve the public interest, convenience and necessity.
    The Commission has long considered the effect of a proposed 
transaction on competition in relevant broadcast markets to be a 
critical component of this public interest review, and the courts have 
long agreed with this approach. As the Supreme Court noted in FCC v. 
RCA Communications, Inc., ``there can be no doubt that competition is a 
relevant factor in weighing the public interest.'' Had Congress 
intended to exclude a public interest analysis in all radio license 
transfers and assignments, it would have so stated. A radio merger that 
results in over 95% of a relevant market being controlled by the top 
two radio licensees, for example, poses a public interest concern, and 
merits Commission scrutiny even in cases where the numerical test is 
met. Notwithstanding the residual ``public interest'' analysis that is 
applied in assessing license assignment and transfer applications, the 
Commission's record is clear in effectuating the intent of Congress to 
allow significant radio market concentration.

    Question 19. If you believe the Commission retains discretion to 
reduce the number of stations that may be acquired in a local market, 
do you believe that the degree of resulting concentration in the radio 
advertising market would be an appropriate benchmark? If so, please 
provide an analysis of why, including (a) an explanation of the 
correlation between the interests of the listening audience and the 
interests of local advertisers; (b) your analysis of the Commission's 
statutory authority, and its institutional expertise, in regulating 
commercial advertising.
    Answer. Advertising revenue share may be an appropriate proxy for 
evaluating market concentration under the public interest test. The 
Commission's concern in avoiding the aggregation of market power by 
broadcast owners is directed not so much at protecting local 
advertisers in the first instance as at preventing adverse effects on 
listeners. If, for example, a single competitor acquires sufficient 
market power through consolidation, it may be able to exercise that 
power to deter entry, disadvantage rivals, or cause otherwise efficient 
rivals to exit from the market and thus deprive the consumer of 
independent voices. Moreover, vigorous competition among market 
stations compels competitors to produce a better product--better 
programming--which directly benefits the listening public.
    This use of advertising market share as one of several indicators 
of market concentration is not ``regulating commercial advertising.'' 
The Commission does not regulate the price, quantity, or quality of 
radio advertising aired by commercial radio stations. I do not believe 
that the Commission has either the statutory authority or the 
institutional expertise for such regulation.

    Question 20. Please state whether the Commission is, or is not, 
considering the implementation of any such ``guidelines.'' If so, 
please state (1) when their completion is anticipated; (2) whether to 
your knowledge any proposed radio station acquisitions otherwise 
consistent with Section 202(b)(1) are being held in abeyance pending 
their implementation; and (3) whether to your knowledge any other 
federal agency has jurisdiction to oversee issues involving competition 
in local advertising markets, including radio advertising.
    Answer. (1) I do not know whether Chairman Kennard intends to 
address the radio merger review process through merger guidelines or a 
Notice of Proposed Rulemaking. As I do not control the agency's agenda, 
I cannot comment on if or when such action would be taken. I do believe 
that broadcasters and the public are entitled to voice their views on 
the factors the Commission should consider in determining whether an 
acquisition is in the public interest. When broadcasters were limited 
to only two AM and two FM stations in a market, there was little need 
to be concerned with abuse of market power. A rulemaking to establish 
guidelines (or rules) would provide the industry and other members of 
the public with an opportunity to examine the rapidly evolving 
marketplace and determine at what point, if at all, consolidation harms 
the public interest. I would prefer a public rulemaking.
    (2) I do not support holding applications for radio station 
acquisitions in abeyance pending implementation of any guidelines or a 
rulemaking. The Commission should render its decisions quickly after an 
opportunity for notice and public comment. Extensive delays in ruling 
on applications imposes hardship on applicants. To my knowledge, action 
on pending radio merger transactions is not being withheld pending 
consideration of any possible guidelines.
    (3) Other federal agencies, such as DOJ and FTC, have authority 
under the antitrust statutes to examine competition in local 
advertising markets. Their standard of review of competition issues in 
radio advertising markets differs from the Commission's public interest 
standard and the exercise of their jurisdiction to review radio merger 
cases is, unlike the Commission's, subject to the Department's 
discretion. As I have said, however, there should be improved 
coordination between the FCC and other federal agencies in the merger 
review process.

Initial question: When the local cable TV operator can offer (and even 
own) dozens of different channels of cable programming, why does the 
Commission prohibit a local newspaper from owning even one local TV 
station?

    Question 21. In your response to this question, you state that, 
``television stations and newspapers remain the most influential 
sources of local news and information for the public,'' and that 
``[G]iven the continued reliance by the public on television and radio 
for most news and information, it remains in the public interest to 
broadly disseminate broadcast licenses,'' I presume your view is that 
broadcast television will remain an important source of news and 
information for the average consumer for the foreseeable future.
    Answer. I do believe that broadcast television will remain an 
important source of news and information for the average consumer for 
the foreseeable future.

    Question 22. Please indicate what evidence there is that a 
newspaper's ownership of a television station in any of the nation's 
fifty largest TV markets would reduce the diversity of voices in a 
market more sharply than a television station's ownership of a second 
television station in that market.
    Answer. The Commission's adoption many years ago of the rule 
barring cross-ownership of a television station and a daily newspaper 
published within the service area of that television station was based 
on the record in that proceeding and its predictive judgment that such 
a combination would unduly harm diversity. Such predictive judgment 
historically has been founded on the unique position daily newspapers 
hold in local markets, as evidenced by, among other things, their 
limited number and the substantial share of local advertising revenues 
they typically garner. As I have stated, however, I believe it is 
timely for us to revisit our newspaper/broadcast cross-ownership rules 
as part of our biennial review. We should ascertain whether there are 
any material differences between newspaper/television station 
combinations and local television duopolies. We should also examine 
whether the size of market has an impact on the number of outlets for 
news and information.

    Question 23. Given the fact that newspapers typically have more 
staff and resources than broadcast stations, and can therefore cover 
local issues more thoroughly, permitting common ownership of local 
newspapers and TV stations would allow the co-owned TV station to cover 
more events and issues and to cover them more thoroughly. In light of 
your statement that the public relies heavily on television for news 
and information, why wouldn't it benefit the public to allow common 
ownership of newspapers and television stations in the same market?
    Answer. In some markets, both a broadcast station and a newspaper 
independently have staff and resources that will cover local issues 
thoroughly. These two independent sources of local news may well be the 
dominant sources of local news and information. In this instance, the 
public will not benefit if the competing viewpoints that might be 
fostered from separate ownership and control of these dominant sources 
of local news and information are brought under common control. Such a 
combination could be especially troubling if those seeking public 
office are precluded from coverage on the two most prevalent sources of 
news and information in a community because of common ownership.
    Nevertheless, I have recognized that the media landscape has 
changed significantly in the years following the time that the 
Commission adopted its prohibition on newspaper/broadcast cross-
ownership. With the advent of more broadcast stations, the growth in 
cable news and information channels, and the availability of news and 
information on the Internet and other outlets, newspapers and 
television stations may not be as dominant a source of local news and 
information as they once were. Moreover, the common ownership of local 
newspapers and television stations could enable a jointly owned 
television station to initiate greater and deeper coverage of news and 
issues than it would otherwise be able to do.
    The Commission will examine all of its broadcast rules in its 
Biennial Review, and I plan to take a fresh look at both the radio and 
television cross-ownership rules in the course of that review.

    Question 24. If the average consumer continues to depend on local 
television stations for news and information, why has the Commission 
not yet resolved the issue of local television broadcasters' digital 
must-carry rights?
    Answer. I do not control the Commission agenda. There is great 
uncertainty in the marketplace, and broadcasters and cable operators 
alike need to know what rules, if any, will be imposed. I have 
expressed to the Chairman my desire to resolve the digital must carry 
item as soon as possible. The staff has had sufficient time to consider 
parties' arguments and prepare recommendations to the Commission.

    Question 25. If the Commission were to decline to extend digital 
must-carry rights to all local television stations, how would the 
Commission justify requiring all broadcasters to provide a minimum of 
three hours per week of educational children's programming?
    Answer. In the case of analog television broadcasting, where both 
must-carry and children's television rules have been prescribed, 
neither is dependent upon the other. There is no linkage between the 
two. Must-carry is an outgrowth of the Cable Act of 1992. The 
children's television rules (which do not establish a hard-and-fast 
three-hour-per-week requirement but rather allow licensees a measure of 
flexibility) were prescribed to implement the Children's Television Act 
of 1990 (``CTA''). In exchange for a free television broadcast license, 
broadcasters are expected to serve their communities. Congress in 1990 
determined that children constitute a significant segment of the 
underserved community and that they are entitled to educational 
programming. Our rules implementing the CTA were designed to strike a 
fair balance.
    The Commission has made no determinations regarding the 
applicability of must-carry rights to digital television signals or 
regarding the children's television programming requirements applicable 
to digital television broadcasting. The former is the subject of a 
pending notice of proposed rulemaking, and the latter is encompassed 
within a pending notice of inquiry. I will want to acquaint myself with 
the comments of interested parties, the recommendations of FCC staff, 
and the views of my colleagues before making any decision on either 
subject.

Initial question: When the Internet enables any user to interact with a 
virtually endless variety of different sources of information and 
viewpoints, how does the Commission justify retaining any broadcast 
ownership restrictions based on the need to assure ``viewpoint 
diversity''?

    Question 26. In responding to this question, your support for the 
current ownership rules appears to rely, in part, on the fact that 
``not all of the population has access to the Internet at home.'' In 
your view, at what point do you consider an alternative source of news 
and information to be ``available'' for the purpose of reducing or 
eliminating scarcity-based broadcast regulation?
    Answer. I stated in my answer to your initial question that, ``[a]s 
we examine our ownership rules [in the Biennial Review], I look forward 
to reviewing any studies that may be submitted regarding how the 
Internet is changing the public's consumption of information and 
whether [the Internet] is reducing the preeminent role historically 
played by the broadcast industry.'' If this appeared to be unqualified 
``support for current ownership rules,'' that certainly was not my 
intent.
    Congress and the Supreme Court have treated broadcast media as 
uniquely able to reach a mass audience. For example, the enactment of 
the 1992 Cable Act and the Supreme Court's decision on the FCC's must 
carry rules in Turner Broadcasting System, Inc. v. FCC both were 
premised on findings that television broadcasting is uniquely able to 
reach a mass audience. If the Internet or other alternative sources of 
local news and information were able to reach the same mass audience to 
the same degree, the outcome in Turner may have been different.
    Current Internet availability may justify reducing broadcast 
regulation to some extent, but the degree of such deregulation would 
depend entirely on evidence of the public's reliance on the Internet 
for local news and information. That is why I look forward to reviewing 
the studies to which I referred in my original answer, as we consider 
the issues raised in the Biennial Review.

    Question 27. Should universal service subsidies be expanded to fund 
the deployment of data networks and computers to every home?
    Answer. The Federal-State Joint Board on Universal Service is 
undertaking a proceeding this year to reexamine the definition of 
universal service. Section 254 makes clear that the definition of 
universal service is an evolving one that must take into account 
technological advances.
    Through this proceeding, we will determine the extent to which 
specific services, including broadband services that would allow high-
speed transmission of data and other information, meet the criteria 
that Congress established in section 254.
    The Commission, however, consistent with Congress' directive in 
section 254, has not contemplated extending universal service support 
to provide computers to every home. Indeed, in implementing the schools 
and libraries support mechanism, the Commission, based on the Joint 
Board's recommendations, expressly declined to provide support for 
personal computers in the classroom.
5. On deregulation and forbearance:
Initial question: You have said that the FCC must know ``not just when 
to regulate, but when to deregulate.'' Section 10 of the 1996 Telecom 
Act states that the FCC must abstain from regulation if it determines 
that (1) enforcement is not necessary to ensure that charges and 
practices are just and reasonable; (2) enforcement is not necessary for 
protection of consumers; and (3) forbearance is consistent with the 
public interest.
    What competitive indicators do you look for, and what type of 
record showing do you require, in evaluating forbearance requests?

    Question 28. In your response, you cite the fact that the 
Commission had ``used our forbearance authority . . . to reduce burdens 
on carriers.'' Can you explain why it took the Commission fifteen 
months to issue a decision on the forbearance petition filed by ITTA 
and then another six weeks to issue the text of the order? Please 
explain what you will do to assure that the goals of fostering 
competition in a dynamic marketplace are not frustrated by inexcusable 
Commission delay in issuing decisions on forbearance petitions in the 
future.
    Answer. I share your concern that, in certain cases, the Commission 
has not moved with sufficient speed to render a decision on forbearance 
petitions. I understand that delay creates uncertainty and unnecessary 
costs. Although I do not determine when orders addressing forbearance 
petitions are provided to the Commissioners, I would expect that the 
Commissioners would receive such orders as quickly as possible after 
the record closes. I have expressed my view that the Commissioners 
should receive draft orders in sufficient time so that the vast 
majority of petitions are acted on and issued within the twelve-month 
period provided in the statute. The statutory three-month extension 
should only be used in extraordinary circumstances. I currently have 
designated someone in my office to be primarily responsible for 
forbearance petitions, including tracking the status of any pending 
requests for forbearance.

    Question 29. Please explain why you believe that the costs of 
requiring small and midsize telephone companies to comply with 
structural separations requirements outweighs the benefit of enhancing 
their ability to more efficiently optimize their networks and service 
offerings.
    Answer. In response to a forbearance petition filed by the 
Independent Telephone and Telecommunications Alliance, the Commission 
took significant steps to reduce burdens on small and mid-sized 
carriers. One request that the Commission did not grant, however, was 
forbearance from the requirements that incumbent local exchange 
carriers must offer in-region long-distance and commercial mobile radio 
services (``CMRS'') through separate affiliates. These requirements are 
intended to prevent carriers with market power from misallocating costs 
and to facilitate detection of discrimination against unaffiliated 
long-distance and CMRS providers.
    These separation rules, however, were designed for markets that 
lack local competition. As competition develops further in the local 
exchange market, these rules should no longer be necessary. As I 
indicated when the Commission decided this issue, I look forward to 
working with small and mid-sized carriers to develop a record that 
demonstrates that the statutory forbearance criteria have been met. 
Moreover, I do not believe that the burden of proof lies exclusively on 
the shoulders of forbearance proponents. The Commission needs to be 
comprehensive and aggressive in its forbearance analysis so that we can 
eliminate rules that are no longer necessary and that detract from 
competition and innovation.

    Question 30. Manufacturers now must wait several months for FCC 
approval to market new equipment designs. What steps are being taken to 
improve the FCC processes so that domestic manufacturers are not 
subjected to unnecessary delays? Do competitive forces exist that may 
obviate the need for such rigorous FCC review?
    Answer. The Commission has recently taken several actions to 
streamline its equipment authorization requirements. Many types of 
equipment that formerly required FCC approval can now be self-
authorized by the manufacturer. Certain equipment that poses a high 
risk of interference or noncompliance currently requires certification 
by the Commission. Moreover, the Commission recently has reduced the 
speed-of-service for processing applications for certification to 36 
days through implementation of electronic filing and other measures. In 
the near future the Commission plans to designate private sector 
Telecommunications Certification Bodies (TCBs) that will be empowered 
to certify equipment instead of the Commission. This should make the 
certification process more convenient and less time consuming for 
manufacturers. The Commission is also in the process of implementing 
Mutual Recognition Agreements with Europe and Asia that will allow TCBs 
from the United States to certify telecommunications equipment for 
direct export to foreign markets. The Commission also plans to initiate 
a proceeding to streamline its Part 68 requirements for equipment that 
connects to the public switched telephone network by relying 
increasingly on the industry to develop standards and authorize 
equipment.
6. On digital TV:
Initial question: Recently the cable and consumer electronics 
industries came to an agreement on standards for cable-ready digital 
television sets. When can we expect to see similar progress between 
copyright holders and equipment manufacturers? What is the Commission's 
role in such negotiations?

    Question 31. What role do you expect the FCC to play in the 
voluntary negotiations between broadcast licensees operating on 
channels 52-69 and new commercial users that purchased their licenses 
for use of that spectrum at auction? What is the implication of these 
private negotiations on public safety use of the 700 MHz band 
allocation?
    Answer. The Commission has adopted rules that will govern the 
purchase of licenses for frequencies between 746-806 MHz, covering the 
channels 60-69 on which some broadcasters currently operate. A number 
of parties have filed petitions for reconsideration in the Channel 60-
69 proceeding. One petitioner has requested that the Commission adopt 
rules that will facilitate voluntary negotiations between new entrants 
and incumbent broadcasters that could lead to a more rapid transition 
to digital television as well as a more rapid use of the spectrum by 
new entrants for new digital services. I expect that any rules the 
Commission adopts will reflect the public interest in permitting 
voluntary relocation, the more rapid transition to digital television, 
and the more expeditious provision of new services in the band to the 
public. These concepts are still in formation, and we have not yet 
heard from the public. In reviewing proposed rules, I would expect the 
Commission to evaluate whether Commission action approving a request to 
implement the result of voluntary negotiations will violate its 
statutory authority or result in a loss of service to the public.
    Private negotiations that result in a more rapid transition to 
digital television, hastening broadcast stations move to their digital 
channel assignments, will help public safety organizations to use this 
band more expeditiously. First, because of adjacent channel 
interference issues, new commercial licensees will want to clear the 
channels adjacent to their frequencies in order to operate without 
interference. I therefore expect that new commercial licensees will 
want to negotiate for a faster transition for broadcasters currently on 
television channels designated for use by public safety. Second, for 
the same adjacent channel interference reason, public safety users will 
benefit when a commercial operator negotiates with a broadcaster to 
move to its operation to a channel outside of the 746-806 MHz band.

                                
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