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99–683 2016

OVERSIGHT OF THE FEDERAL COMMUNICATIONS 

COMMISSION 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMUNICATIONS AND 

TECHNOLOGY 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

NOVEMBER 17, 2015 

Serial No. 114–101 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

(III) 

SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY

GREG WALDEN, Oregon 

Chairman 

ROBERT E. LATTA, Ohio 

Vice Chairman 

JOHN SHIMKUS, Illinois 

MARSHA BLACKBURN, Tennessee 

STEVE SCALISE, Louisiana 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

ANNA G. ESHOO, California 

Ranking Member 

MICHAEL F. DOYLE, Pennsylvania 

PETER WELCH, Vermont 

JOHN A. YARMUTH, Kentucky 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

BOBBY L. RUSH, Illinois 

DIANA DEGETTE, Colorado 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

JERRY MCNERNEY, California 

BEN RAY LUJA ́ N, New Mexico 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(V) 

C O N T E N T S 

Page 

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

opening statement ................................................................................................ 1 

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

Hon. Anna G. Eshoo, a Representative in Congress from the State of California, opening statement .................................................................................... 5 

Prepared statement .......................................................................................... 6 

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

opening statement ................................................................................................ 7 

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

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

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

Hon. Gus M. Bilirakis, a Representative in Congress from the State of Florida, prepared statement ...................................................................................... 94 

WITNESSES

Tom Wheeler, Chairman, Federal Communications Commission ....................... 11 

Prepared statement .......................................................................................... 13 

Answers to submitted questions ...................................................................... 102 

Mignon Clyburn, Commissioner, Federal Communications Commission ........... 18 

Prepared statement .......................................................................................... 20 

Answers to submitted questions ...................................................................... 139 

Jessica Rosenworcel, Commissioner, Federal Communications Commission ..... 27 

Prepared statement .......................................................................................... 29 

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

Ajit Pai, Commissioner, Federal Communications Commission .......................... 33 

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

Answers to submitted questions ...................................................................... 150 

Michael O’Rielly, Commissioner, Federal Communications Commission ........... 40 

Prepared statement .......................................................................................... 42 

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

SUBMITTED MATERIAL

Statement of Bill Haslam, Governor of Tennessee, submitted by Mrs. 

Blackburn ............................................................................................................. 96 

Statement of Herbert H. Slatery, III, Lieutenant Governor of Tennessee, 

submitted by Mrs. Blackburn ............................................................................. 97 

Letter of June 18, 2015, from Messrs. Latta and Green to FCC Commissioner 

Tom Wheeler, submitted by Mr. Latta ............................................................... 98 

Statement of the Illionois Chamber of Commerce, submitted by Mr. 

Kinzinger .............................................................................................................. 100 

(1) 

OVERSIGHT OF THE FEDERAL 

COMMUNICATIONS COMMISSION 

TUESDAY, NOVEMBER 17, 2015 

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

The subcommittee met, pursuant to notice, at 10:15 a.m., in room 

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

Present: Representatives Walden, Latta, Barton, Shimkus, 

Blackburn, Scalise, Lance, Guthrie, Olson, Pompeo, Kinzinger, Bilirakis, Johnson, Long, Ellmers, Collins, Cramer, Upton (ex officio), 

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

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

Staff Present: Ray Baum, Senior Policy Advisor, Communications 

and Technology; Rebecca Card, Assistant Press Secretary; Andy 

Duberstein, Deputy Press Secretary; Gene Fullano, Detailee, 

Telecom; Kelsey Guyselman, Counsel, Telecom; Peter Kielty, Deputy General Counsel; Grace Koh, Counsel, Telecom; David Redl, 

Counsel, Telecom; Charlotte Savercool, Professional Staff, Communications and Technology; Gregory Watson, Legislation Clerk, Communications and Technology; Jean Woodrow, Director, Information 

Technology; Christine Brennan, Minority Press Secretary; Jeff Carroll, Minority Staff Director; David Goldman, Minority Chief Counsel, Communications and Technology; Tiffany Guarascio, Minority 

Deputy Staff Director and Chief Health Advisor; Jerry Leverich, 

Minority Counsel; Lori Maarbjerg, Minority FCC Detailee; Tim 

Robinson, Minority Chief Counsel; and Ryan Skukowski, Minority 

Policy Analyst. 

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

Mr. WALDEN. Good morning, everyone. And welcome to the subcommittee on Communications and Technology and our oversight 

hearing on the Federal Communications Commission. 

I want to welcome the Chairman and all of the Commissioners. 

We are glad to have you here again. We appreciate your joining us 

today. 

As you know, it is our job to not only initiate innovative legislation and work with all of you on various individual legislative and 

regulatory priorities, but it is also our job to conduct rigorous and 

appropriate oversight of the Federal Communications Commission. 

And that is the subject of the hearing that we have today. 

2 

Sadly, it is clear by various actions of this and previous commissions that Congress has delegated too much flexibility at times and 

authority to the FCC. And it seems that, regardless of what our 

clear legislative intent is, too often that clear intent gets misunderstood or, worse, obfuscated or obstructed. So, colleagues, we have 

to do a better job when we write these bills so as to limit FCC authority, not to expand it. 

This committee has placed an emphasis on improving the FCC’s 

processes when it comes to conducting the people’s business. The 

full House has concurred with our work on multiple occasions, including as recently as last night, when the House passed the FCC 

Process Reform Act of 2015 unanimously. This effort arises from 

complaints and suggestions from the public and from various Commissioners over the years under various Chairs. Better process at 

the FCC will result in more transparent decisionmaking, where all 

the Commissioners have a meaningful opportunity to participate. 

And, Chairman Wheeler, while you have made important improvements, and I commend you for that—you have reduced backlogs, you have implemented a new complaint process, among other 

items—members of your own Commission are driven to publicly express their frustrations with the bigger decisionmaking process at 

times, so it is distressing to hear of somewhat bitter divisions. 

Now, let me give you three specific issues that concern me and 

many of us on the committee. 

First, our lawyers believe the FCC has disregarded the clear directive in the STELA Reauthorization Act of 2014 by expanding the 

scope of the DSTAC Working Group beyond what was ever intended by the committee. So that is number one. 

Number two, the FCC has promulgated rules designed to preempt state laws regarding municipal broadband absent congressional authority to do so. 

And, of course, the FCC continues its 8-year-long failure to complete its required quadrennial review of media ownership rules. I 

wonder what penalties would befall a licensee of the Commission 

that so failed to follow the law. 

And that is just the list of things that have already happened. 

The Commission has a number of pending proceedings that threaten to walk the same tired path of partisan, predetermined outcomes. 

The Commission has announced a rulemaking to ‘‘clarify the 

FCC’s expanded privacy authority under the new Internet rules,’’ 

even when some cheerleaders for Title II common carrier regulation of the Internet access are coming to realize just how wide a 

net this self-granted authority casts over the Internet. If IP addresses are equivalent to phone numbers under Title II, just how 

will commerce flow in a broadband world? What is the FCC’s definition of ‘‘privacy’’ under a law designed for hand-cranked telephones? 

The Commission appears poised to move forward on an item to 

redefine multichannel video programming distributor, or MVPD, to 

include linear over-the-top video providers. This is billed as a way 

to promote online video as a competitor to traditional cable and 

satellite providers, yet many over-the-top providers assert that govVerDate Nov 24 2008 12:18 Jun 01, 2016 Jkt 037690 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-101 CHRIS
3 

ernment intervention is not warranted and that this will chill investment and innovation in the nascent, growing sector. 

And the Commission appears ready to move forward to expand 

the scope of the universal service Lifeline program without adopting controls to prevent ballooning costs. While this Commission has 

taken some steps to reduce waste, fraud, and abuse—and I commend you for that—much work remains in these areas, and the 

program still lacks meaningful spending controls. This, despite the 

fact the contribution factor for universal service—that is the percentage of consumers’ bills the FCC collects each month to support 

the Universal Service Fund program—will rise to 18 percent in 

January, and that is an all-time high. 

Serious concerns about the misguided management and reward 

system of the Enforcement Bureau have risen to the point that 

Chairman Upton, the vice chairman of this subcommittee, Mr. 

Latta, and I have asked the Government Accountability Office to 

conduct an independent investigation into how decisions are made, 

how fines are determined, and how employee performance is assessed. 

In addition to these concerns, many stakeholders have expressed 

overarching concern that the FCC is adopting and applying its 

rules in an arbitrary fashion, singling out certain companies or industries for asymmetric regulation. This concern is buttressed, in 

their view, by so many 3-to-2 votes. 

With the spectrum auction less than 4 months away, I would 

also like to get your assurance that the Federal Communications 

Commission will fully and faithfully implement the law that was 

passed by Congress that broadcasters will not be forced to participate and that the Commission will make all reasonable efforts to 

preserve broadcaster coverage, prevent interference, and make sure 

that consumers can continue to enjoy their over-the-air viewing. 

Two final notes. First, congratulations to the FCC on your October 23 unanimous vote to adopt the AM radio revitalization order, 

providing needed relief to the struggling AM radio industry. To 

quote the NAB press release, ‘‘a great day for AM radio and for 

millions of listeners across America.’’ I especially commend Commissioner Pai for his leadership on this issue and for all of you for 

coming together and finally getting this done. 

And I also want to congratulate Commissioners Rosenworcel and 

O’Rielly for their bipartisan efforts on 5G wireless. Keep it up. 

There is no lack of leadership or ability among the five people 

sitting before us today. You are all accomplished, recognized leaders. Our job is to change the system so each of you is a full participant in these incredibly important and complex decisions in a rapidly changing communications world. 

With that, I will turn to my friend from California, Ms. Eshoo, 

for her opening comments. 

[The prepared statement of Mr. Walden follows:] 

PREPARED STATEMENT OF HON. GREG WALDEN

As you know, it’s our job on this subcommittee to not only initiate innovative legislation and work with each of you on various legislative and policy proposals, but 

also to conduct rigorous and appropriate oversight of the FCC, as we will do today. 

4 

Sadly, it’s clear by various actions of this and previous commissions, Congress has 

delegated too much flexibility and authority to the FCC. And it seems that regardless of what our clear legislative intent is, too often that clear intent is misunderstood, or worse, obfuscated or obstructed. So colleagues, we have to do a better job 

when we write these bills so as to limit FCC authority, not expand it. 

This committee has placed an emphasis on improving the FCC’s processes when 

it comes to conducting the people’s business. The full House has concurred with our 

work multiple times, including as recently as last night when the House passed the 

FCC Process Reform Act of 2015 by voice vote. This effort arises from complaints 

and suggestions from the public and from various commissioners over the years 

under various chairs. Better process at the FCC will result in more transparent decision-making where all the commissioners have a meaningful opportunity to participate. 

And Chairman Wheeler, while you have made important improvements—you’ve 

reduced backlogs, implemented a new complaint process among other items—members of your own commission are driven to publicly express their frustrations with 

the bigger, decision-making process. It’s distressing to hear of the bitter divisions. 

Now, let me give you three, specific issues that concern us: 

• Our lawyers believe the FCC has disregarded the clear directive in the STELA 

Reauthorization Act of 2014 and expanded the scope of the DSTAC working group 

beyond what was ever intended; •The FCC has promulgated rules designed to preempt state laws regarding municipal broadband absent congressional authority to do so; • and, of course, the FCC continues its eight-year-long failure to complete its required quadrennial review of media ownership rules. (I wonder what penalties 

would befall a licensee of the commission that so failed to follow the law?) 

And that’s just the list of things that have already happened. The commission has 

a number of pending proceedings that threaten to walk the same tired path of partisan, predetermined outcomes: •The commission has announced a rulemaking to ‘‘clarify the FCC’s expanded privacy authority under the new Internet rules.’’ Even some cheerleaders for Title II, 

common carrier regulation of Internet access are coming to realize just how wide 

a net this self-granted authority casts over the Internet. If IP addresses are equivalent to phone numbers under Title II, just how will commerce flow in a broadband 

world? What’s the FCC’s definition of ‘‘privacy’’ under a law designed for handcranked telephones? •The commission appears poised to move forward on an item to redefine ‘‘multichannel video programming distributor’’ or ‘‘MVPD’’ to include linear over the top 

video providers. This is billed as a way to promote online video as a competitor to 

traditional cable and satellite providers—yet, many over-the-top providers assert 

that government intervention is not warranted and that will chill investment and 

innovation in the nascent and growing sector. 

•The commission appears ready to move forward to expand the scope of the Universal Service Lifeline program without adopting controls to prevent ballooning 

costs. While the commission has taken some steps to reduce waste, fraud and abuse, 

much work remains in these areas, and the program still lacks meaningful spending 

controls. This despite the fact that the contribution factor for universal service—the 

percentage of consumers’ bills that the FCC collects each month to support USF programs—will rise to 18 percent in January, an all-time high. 

• Serious concerns about the misguided management and reward system of the 

Enforcement Bureau have risen to the point that Chairman Upton, Vice Chairman 

Latta and I have asked the Government Accountability Office to conduct an independent investigation into how decisions are made, how fines are determined and 

how employee performance is assessed. 

In addition to these concerns, many stakeholders have expressed overarching concern that the FCC is adopting and applying its rules in an arbitrary fashion, singling out certain companies or industries for asymmetric regulation. This concern 

is buttressed by so many 3–2 votes. 

With the spectrum auction less than four months away, I would also like to get 

your assurance that the FCC will fully and faithfully implement the law, that 

broadcasters will not be forced to participate, and that the commission will make 

all reasonable efforts to preserve broadcasters coverage areas so that consumers can 

continue to enjoy over-the-air viewing. 

Two final notes. First, congratulations to the FCC for your October 23rd, unanimous vote to adopt the AM Radio Revitalization Order providing needed relief to 

the struggling AM radio industry—to quote the NAB press release ‘‘a great day for 

AM radio and for millions of listeners across America.’’ I commend Commissioner 

Pai for his leadership on this issue and all of you for coming together and finally 

5 

getting that done. And I want to also congratulate Commissioners Rosenworcel and 

O’Rielly for their bipartisan efforts on 5G wireless—keep it up. 

There is no lack of leadership or ability among the five people sitting before us 

today. You are all accomplished, recognized leaders. Our job is to change the system 

so that each of you is a full participant in these incredibly important and complex 

decisions in the rapidly changing communications world. 

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

Ms. ESHOO. Thank you, Mr. Chairman. 

And good morning, Mr. Chairman and members of the Commission. It is always great to see you here, the full Commission. 

I want to start out by commending the Chairman and, certainly, 

the Commissioners. The Chairman began his job as the Chairman 

of the Commission 2 years ago this month. I don’t know what the 

exact date was, Mr. Chairman, but I know it was 2 years ago. And 

it may seem to you like 100 years, some days anyway. 

But in the staff memorandum, if members have read it, I just 

want to go through what I think is an honor roll of addressing 

issues. This is taking on a great deal, and I think they are all worthy of mention. Some of my colleagues are not going to agree, but, 

obviously, I think it is very important: net neutrality, spectrum legislation, public safety, AWS–3 auction, incentive auctions, the 

pending merger transactions, universal service, the E-rate, Lifeline, 

Rural Health Care Program, tech transition, consumer protection, 

public safety, enforcement, and I think there is—well, obviously, 

there has been work on process reform. 

And when I name off all of these areas, imagine the work that 

is underneath one or two words. So, whether Commissioners have 

agreed or disagreed on parts of policies that come under those umbrellas, you have taken on a huge workload, and I salute you. I 

have served with either five or six chairmen and commissions, and 

I think that this is the most proactive commission and chairman 

that we have worked with. So thank you. I salute you. 

More than a decade ago, the Columbia Business School professor 

Eli Noam examined the relationship between entrepreneurship and 

government and telecommunications. He concluded that entrepreneurial firms exist in the telecom sector—and this is so interesting 

to me—not despite of government but, rather, because of it. 

So let’s assess how. Competition has been foundational in the 

Communications Act for more than 80 years, eight decades. So we 

do get some things right around here. Actions such as the 

Carterfone decision, the breakup of AT&T, and the 1996 Telecom 

Act demonstrated that when incumbents fail to innovate that the 

public sector has to step up to protect consumers and promote competition. 

But what should communications policy look like in the second 

decade of the 21st century? In the Internet age, it begins with 

open, interconnected networks that empower consumers and businesses to use the devices and the services of their choosing. Robust, 

enforceable open Internet rules prevent broadband providers from 

blocking or throttling lawful online content or engaging in paid 

prioritization. 

6 

It means reforming legacy video laws that hinder innovation and 

consumer choice while protecting incumbent interests. And it 

means ensuring that consumers can buy a set-top box from someone other than their pay-TV provider. The lack of competition in 

the set-top box space has left consumers paying, on average, what 

some people think is whopping: $231 a year on rental fees alone. 

Why we allow this to continue I don’t know, but it really does need 

to be addressed. 

So, to promote competition, we also need commonsense policies 

that make it easier for new companies to enter the broadband market. And I want to thank Commissioner Rosenworcel for highlighting in her testimony today the ‘‘dig once’’ policy that the chairman of our subcommittee and myself launched and on a bipartisan 

basis have promoted to promote broadband and do it in a very 

smart way. 

Finally, competition should be embedded in the decisions we 

make on spectrum. A balanced spectrum policy that recognizes the 

importance of both licensed and unlicensed spectrum is going to enhance competition, it will drive down prices, and it will unlock new 

innovation. It is an innovation platform in our country, and we 

can’t lose sight of that. 

So my special thanks to you, Mr. Chairman, for your superb 

leadership; to each Commissioner for your leadership, for your 

working together. Even when you disagree, it is not personal, it is 

about the policy. And we all benefit from a variety of views. 

And more than anything else, I will be gone from this world, but 

what I want written about the 21st century is that it was an American century. 

I have gone over my time. I apologize to Congresswoman Matsui. 

I was going to yield time to her, but perhaps somebody else will. 

Thank you, Mr. Chairman. 

And thank you—— 

[The prepared statement of Ms. Eshoo follows:] 

PREPARED STATEMENT OF HON. ANNA G. ESHOO

More than a decade ago, Columbia Business School Professor Eli Noam examined 

the relationship between entrepreneurship and government in telecommunications. 

He concluded that entrepreneurial firms exist in the telecom sector not despite of 

government but rather because of it. Let’s assess how. 

Competition has been foundational in the Communications Act for more than 80 

years. Actions such as the Carterfone decision, the breakup of AT&T and the 1996 

Telecom Act demonstrated that when incumbents fail to innovate, the government 

has stepped in to protect consumers and promote competition. But what should competition policy look like in the second decade of the 21st century? 

In the Internet age, it begins with open, interconnected networks that empower 

consumers and businesses to use the devices and services of their choosing. Robust, 

enforceable open Internet rules prevent broadband providers from blocking or throttling lawful online content or engaging in paid prioritization. It means reforming 

legacy video laws that hinder innovation and consumer choice, while protecting incumbent interests. And it means ensuring consumers can buy a set-top box from 

someone other than their pay-TV provider. The lack of competition in the set-top 

box space has left consumers paying on average a whopping $231 per year on rental 

fees alone. 

To promote competition, we also need commonsense policies that make it easier 

for new companies to enter the broadband market. A ‘dig once’ policy is one such 

example of how to reduce the barriers to broadband deployment, increase competition, and do so while saving taxpayer dollars. When new competition is unlikely to 

7 

emerge, such as in the $40 billion a year special access market, the FCC must act 

decisively to reform the market and stop anti-competitive practices. 

Finally, competition should be embedded in the decisions we make on spectrum. 

A balanced spectrum policy that recognizes the importance of both licensed and unlicensed spectrum will enhance competition, drive down prices and unlock new innovation. 

My special thanks to Chairman Wheeler and fellow Commissioners for being here 

today. With your commitment to a competitive telecommunications agenda, the second decade of the 21st century can be the decade when entrepreneurs finally prevailed. 

Mr. WALDEN. Thank you. 

Ms. ESHOO [continuing]. Commissioners. 

Mr. WALDEN. I will now turn to the chairman of the full committee, the gentleman from Michigan, Mr. Upton, for opening comments. 

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

Mr. UPTON. Well, thank you, Mr. Chairman. 

As we all know, 2 years ago, this committee welcomed a newly 

sworn-in Chairman Wheeler to this very hearing room. Our message then for the new Chair and the entire Commission was short 

and sweet: Given the FCC’s jurisdiction over one of the most important sectors of our economy, the decisions that they would make 

would be critical to innovation, jobs, and our Nation’s global leadership in technology. 

And, today, our request is just as simple: In executing its functions, the agency must operate with openness and transparency for 

the benefit of American consumers and job creators. 

Unfortunately, notwithstanding our clear and numerous concerns, the FCC has been plagued at times by process failures and 

a lack of healthy and honest policy debate. Ultimately, this has 

produced uncertainty in the market, harming our economy and the 

robust communication sector’s ability to create the jobs that all 

Americans need. 

There remains many significant matters to be decided by the 

Commission. These are opportunities for the FCC to get back on 

track, to demonstrate its commitment to process reform and return 

to the bipartisan policymaking that was once a hallmark of the 

FCC. 

What you collectively do together matters to folks in Michigan 

and across the country, whose daily lives have been transformed by 

technology. And if the process can be improved, we will all be better for it. 

I yield the balance of my time to Mrs. Blackburn and then Mr. 

Latta. 

[The prepared statement of Mr. Upton follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

Two years ago, the Energy and Commerce Committee welcomed a newly sworn 

in Chairman Wheeler to this very hearing room. Our message then for the new 

Chairman and the entire commission was short and sweet: given the FCC’s jurisdiction over one of the most important sectors of our economy—the decisions that they 

would make would be critical to innovation, jobs, and our nation’s global leadership 

in technology. And today, our request is just as simple: in executing its functions, 

8 

the agency must operate with openness and transparency for the benefit of American consumers and job creators. 

Unfortunately, notwithstanding our clear and numerous concerns, the FCC has 

been plagued at times by process failures and a lack of healthy and honest policy 

debate. Ultimately, this has produced uncertainty in the market harming our economy and the robust communications sectors’ ability to create the jobs Americans 

need. 

There remain many significant matters to be decided by the commission. These 

are opportunities for the FCC to get back on track, to demonstrate its commitment 

to process reform and return to the bipartisan policy-making that was once a hallmark of the FCC. What you collectively do together, matters—to folks in Michigan 

and across the nation whose daily lives have been transformed by technology. And 

if the process can be improved, we will all be better for it. 

Mrs. BLACKBURN. Thank you, Mr. Chairman. 

I want to say thank you to each of the Commissioners for taking 

your time to be here. It has been a while since we have had the 

full panel, and we are appreciative for this because we do have 

some questions. And FCC actions over the past several months 

have raised some questions about transparency and accountability 

and, as our chairman likes to say, regulatory humility or the lack 

thereof. So those are issues we want to cover with you today. 

We also are going to want to talk some about net neutrality and 

the Commission’s potential entry into the online privacy realm. 

That has been the jurisdiction of the FTC, so we are a bit concerned about that and about how your policies seem to go about 

pushing the concept of picking winners and losers, which is not 

your job. The marketplace should do that. 

I am also going to have some questions about your decision to 

preempt state laws in Tennessee and North Carolina on the muni 

broadband issue. The chairman touched on this. You have a position there that even DOJ found that it could not support. So this 

is of concern to us. 

We thank you for being here to answer the questions. 

And I yield the balance of the time to Mr. Latta. 

Mr. LATTA. Well, thank you very much. I appreciate the 

gentlelady for yielding. 

And, Mr. Chairman, thanks for today’s hearing. 

And to the Commission, thanks very much for being with us 

today. 

Over the past year, this subcommittee has devoted many hearings to oversight of the FCC. This attention has not been misplaced. The communications and technology industry is a very productive and dynamic sector of our economy. We cannot afford to 

overlook the significance of regulatory policies and how the FCC’s 

decisions affect the success of this vibrant industry. 

Without proper oversight, some actions emerging from the FCC, 

like the Downloadable Security Technical Advisory Committee proposals, can go unchecked and have negative impacts on a thriving 

industry. DSTAC, established by the FCC as directed by Congress, 

was formed to make recommendations on a software-based, 

downloadable security system for securing video content. However, 

the FCC allowed the DSTAC to focus on navigation interface 

issues, as well as downloadable security. This action goes against 

clear direction from Congress. As a result, the technical working 

group failed to achieve its intended purpose. 

9 

I look forward to hearing from the Commissioners today on this 

issue, Mr. Chairman. And I yield back the balance of my time. 

Mr. WALDEN. The gentleman yields back the balance of the chairman’s time. 

And we will now go to the ranking member of the full committee, 

the gentleman from New Jersey, Mr. Pallone. 

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

Mr. PALLONE. Thank you, Chairman, and I also want to thank 

our ranking member for holding this hearing. 

And thank you to all the Commissioners for coming up to talk 

with us once again. 

This is the fourth FCC oversight hearing we have had this year. 

I certainly appreciate the efforts the Republicans have put into 

overseeing the Commission. Oversight of all the agencies under our 

committee’s jurisdiction is always a top priority for Democrats, and, 

still, I wish the committee had been as energetic this year about 

other problems the American people are grappling with, such as 

climate change, safe drinking water, or domestic violence in sports. 

Nevertheless, today’s hearing is at least timely. We just recently 

commemorated the third anniversary of when Hurricane Sandy 

ripped through the East Coast. The storm left people across my district stranded without communication, some of them for weeks. 

And so I have spent the past 3 years making sure that we are better prepared for the next time disaster strikes. Because unless we 

do more to control climate change, there will be a next time. 

And that is why, yesterday, I introduced the SANDy Act to make 

sure people have better access to communications in an emergency. 

The bill recognizes the importance of phone service, TV, and radio 

during emergencies. I hope that the proposal in that bill, along 

with the efforts at the FCC to make networks more resilient, will 

mean that we never have a repeat of the communication failures 

from 3 years ago. 

But as important as network resiliency is, the FCC role in helping consumers is much broader. So I would like to briefly mention 

my other priorities for the Commission. 

First, online video. The future of communications is video, and 

the future of video is online and mobile. I thank the Commission 

for its ongoing work to understand this dynamic market, but I urge 

you to always remain focused on putting consumers first. Above all, 

the Commission’s priority should be making sure consumers are 

the ones deciding what services and devices meet their needs. 

Second is spectrum. To make sure consumers can access the content they choose wherever they choose on whatever device they 

choose, they need more spectrum. The FCC is doing its part to 

meet this demand through its record-breaking spectrum auction 

earlier this year and its first-of-its-kind incentive auction set for 

early next year. I hope that Congress can continue to do our part 

by building on our recent work in the budget deal. We must find 

new ways to free more spectrum. We have not done enough. 

I know I have a couple other people here that want to use my 

time, but, before I yield, I wanted to thank Chairman Walden for 

10 

his willingness to revisit the matter of broadcast ownerships. The 

chairman called a hearing to explore this issue a few months ago 

but had to cut it short. And this is an issue that the American people care deeply about, so I appreciate the fact that the chairman 

has offered to complete the hearing on December 3, and I look forward to it. 

So I thank, again, our witnesses. I look forward to hearing from 

you all about the important work the FCC is doing to help consumers. 

I have 2 minutes. I would like to give 1 minute to Mr. Butterfield 

and 1 to Ms. Matsui. We will start with Mr. Butterfield. 

Mr. BUTTERFIELD. I will do it very quickly, Mr. Pallone. Thank 

you very much for yielding. 

And thank you, Mr. Chairman, for convening this important 

hearing today. 

And to Commissioner Wheeler and to your colleagues, thank you 

so very much for coming. 

I would like to very quickly mention one thing because I may not 

be able to get it out during the remainder of the hearing. This is 

very important to me, and it is important to members of the Congressional Black Caucus. I recall that when I was a judge, when 

I was lawyer, and now as a community-based Congressman, I have 

run into this problem constantly throughout the years, and that 

has to deal with telephone calls from prisoners. Even when I was 

a trial judge, I used to get collect calls from those who were incarcerated. 

And you, Mr. Wheeler, and your Commission have addressed this 

issue, and I want to thank you and Ms. Clyburn and the others 

who worked so diligently on this. A call that used to cost as much as $14 per minute—a lot of peo- ple don’t realize this—$14 per minute now costs 11 cents per 

minute. A 15-minute phone call used to be up to $210—a 15- 

minute call, $210. Now it is $1.65 per minute. 

And I just want to commend you for your bold step in making 

that happen. I have a friend who is in prison. I visit him four times 

a year. And it is a big conversation among the population in the 

prison, how they have been relieved of these burdensome phone 

calls. And so I want to thank you for your work in that area. 

And now I yield to my friend, Ms. Matsui. 

Ms. MATSUI. Thank you very much for yielding to me. 

Welcome back, Chairman Wheeler and Commissioners. We appreciate the work you are doing in many areas. 

One of my top priorities is making more spectrum available. The 

recently passed Budget Act took important first steps, but I believe 

Congress and the FCC need to build upon these provisions to identify new spectrum opportunities. 

We also share many other priorities, from modernizing the Lifeline program for broadband to keeping the incentive auction on 

track. I look forward to hearing more about the FCC’s progress on 

promoting a competitive market for special access services. 

I also urge the Commission to work with the subcommittee to ensure any products of the set-top box working group process serve 

the public interest. 

Thank you, and I yield back. 

11 

Mr. WALDEN. The gentlelady yields back. 

All time has expired. 

We will now go to the Chairman of the Federal Communications 

Commission, the Honorable Mr. Wheeler, for your opening statement. It is good to see you. 

And I just want to stipulate for the record, the red I am wearing 

has nothing to do with Ohio State. 

Let’s go now to Mr. Wheeler. 

STATEMENTS OF THE HON. TOM WHEELER, CHAIRMAN, FEDERAL COMMUNICATIONS COMMISSION; THE HON. MIGNON 

CLYBURN, COMMISSIONER, FEDERAL COMMUNICATIONS 

COMMISSION; THE HON. JESSICA ROSENWORCEL, COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION; THE 

HON. AJIT PAI, COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION; AND THE HON. MICHAEL O’RIELLY, 

COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION 

STATEMENT OF THE HON. TOM WHEELER 

Mr. WHEELER. Mr. Chairman, it is a privilege to be here. Ms. 

Eshoo, Mr. Pallone. 

The color facts speak for themselves, sir. 

I have a prepared statement in the record, and I look forward to 

discussing a vast array of topics that have been suggested here 

today. 

Let me begin by applauding this body and the House for the bipartisan passage of H.R. 2583. We understand the process reforms 

that you seek, and we will comply with the law. 

Briefly today, let me focus on three topics that only Congress can 

resolve and pledge to work with this committee in addressing 

them. 

As I have said every time that I have been here, we have a crisis 

in bringing public safety communications into the digital era. We 

all mourn the events in Paris and the tragedy that happened there, 

but it reminds us of the need for constant preparedness and vigilance. 

When September 11 happened in this country, we discovered 

problems with the interoperability among our first responders, and 

Congress stepped up to address that. Mr. Pallone’s new proposal 

that he just spoke about reminds us of the need to improve network resiliency in disasters. 

And there is another lurking problem, and that is the difficulty 

of our 6,800 public safety answering points, our 911 operators, and 

the difficulty they are having adopting the next generation, the digital generation, of 911 capabilities. They risk becoming analog islands in a digital sea. The current systems are costly to operate 

and with limited capabilities compared to digital. The transition is 

expensive. It requires new equipment and new systems. It requires 

running redundant analog and digital during the conversion. 

There needs to be a national solution, national coordination, and 

national help to find the funds, perhaps from future auctions. It is 

worthy of public hearings, I would urge, Mr. Chairman, to illuminate the issue and the potential solutions, and we would look 

forward to working with the committee in that regard. 

12 

Secondly, this committee has taken really important steps on infrastructure construction, and more opportunities await. There are 

really three goals. When you look at infrastructure, there are really 

three goals. How do you provide for clarity, consistency, and completion—the three C’s of infrastructure. 

Insofar as clarity is concerned, today, court decisions decide infrastructure policy. Congress should decide infrastructure policy. 

You know, we need policy on activities that are deemed normally 

not to have significant impact on the environment. We need to 

eliminate the need for permits on technology upgrades without negative effects. We need to have the presumption that one commercial approval works for others; you don’t have to have repetitive approvals. And we need to address the challenge in the Clean Water 

Act that says that when you dig up a street to replace the sewer 

you are prohibited by law from laying fiber. It just doesn’t make 

any sense. Talk about ‘‘dig once.’’ 

Insofar as consistency, only Congress can streamline the siting of 

facilities on Federal lands. There are just too many agencies with 

too many diverse processes to do serially. 

And on the question of completion, there needs to be certainty in 

the decisions. The reality is that appeals from the shot clock—we 

establish a shot clock, and then it goes to court in appeals, and it 

just delays the process further. One example of a solution was recently passed in the State of California, where the California law 

says that if a decision is not made within the shot clock it is 

deemed granted. 

So clarity, consistency, and completion are the goals we need to 

focus on for infrastructure, and we looked forward to working with 

you on those. 

And, finally, I know that this committee is concerned about pirate radio. During my tenure, we have taken 280 enforcement actions against pirate radio. That is in the last 2 years. Commissioner O’Rielly has been a real leader in keeping us focused on this. 

We are working with the NAB on a joint task force on pirate radio. 

But we need more tools. We are playing Whack-a-Mole right 

now. Every time a station pops up, we whack it. We need to have 

consequences for those who facilitate those stations popping up, the 

landlords who look the other way because helping pirates is riskfree. Congress could make it illegal to aid or abet pirate radio operations, and, in the process, denying them the opportunity to operate in this way would be a significant means of thwarting the continued growth of pirate radio. 

On these and all other issues, we look forward to working with 

this committee. And I thank you for the opportunity to be here. 

[The prepared statement of Mr. Wheeler follows:] 

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Mr. WALDEN. Mr. Chairman, thank you for those recommendations and suggestions. Thanks for being here. We look forward to 

the questions. 

We will now go to the Honorable Ms. Clyburn, Commissioner of 

the Federal Communications Commission. 

Thanks for your good work on the issues raised by Mr. 

Butterfield. And we look forward to your testimony. 

STATEMENT OF THE HON. MIGNON CLYBURN 

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

Eshoo, distinguished members of the committee. I appreciate the 

opportunity to appear before you this morning in the company of 

my colleagues. 

We are living during an incredibly exciting time. America remains the land of opportunity. Technological advancements 

abound, providing new means to achieve the American Dream. And 

broadband is one of the biggest enablers of that dream. It is breaking down barriers to health care through remote monitoring, it is 

offering new paths to jobs and training, and it is providing our children with world-class learning. 

Most Americans enjoy ubiquitous access to broadband, but the 

number of those who do not remains high. I am both humbled and 

grateful that, from the directive issued by you, that the FCC has 

the obligation, ability, and opportunity to serve our Nation by acting to close chronic opportunity divides. 

My written testimony, which I ask to be included in the record, 

focuses on a promise and opportunities made possible by universal 

access to broadband, and it outlines our efforts to close those remaining communications access gaps. 

The Mobility Fund. While many of us enjoy nearly ubiquitous 

mobile coverage, pockets of our Nation remain in darkness. In 

2001, a bipartisan FCC adopted a dedicated Mobility Fund, but it 

has yet to be implemented. I believe that it is imperative that we 

move quickly to adopt a permanent Mobility Fund to eliminate coverage gaps across our Nation. 

Lifeline. The statute accords equal weight to rural high-cost 

areas and low-income consumers when it comes to ensuring access 

to service reasonably comparable to those we enjoy in urban areas, 

and it is time that the FCC do so, as well. It is time to move from 

merely criticizing to fixing remaining problems in Lifeline. 

So I fully support the modernization of the program to address 

the affordability divide. And I believe that the steps we have already taken and the plan we have outlined in our notice of proposed rulemaking would not only eliminate incentives for waste, 

fraud, and abuse but enable Lifeline to become truly a real communications bridge to help Americans in need to get back on their 

feet. 

The incentive auction. The Commission has worked hard to implement your directives regarding the incentive auction. And I am 

proud that we adopted rules to incentivize smaller companies to deploy wireless networks in areas that lack advanced services. 

And, as you have heard, the reform of inmate calling services. I 

am deeply grateful that we finally acted, in the absence of a functional marketplace, to provide affordable communication services 

19 

for those wanting and needing to stay in touch with the currently 

incarcerated. Too many families, friends, and attorneys are making 

unconscionable choices to stay in touch. And our Nation is plagued 

by the highest recidivism rate in the world in part because families 

cannot afford to maintain regular contact and too many former inmates go home as strangers and are unable to readjust. 

Our Connect to Health program. That task force is an effort to 

reach beyond the Beltway to focus on game-changing projects and 

stimulating new collaborations between public and private stakeholders and local communities that are seeking to solve health 

challenges through broadband-enabled solutions. 

And, lastly, we talked about it, the AM revitalization item. This 

bipartisan compromise addressed and met the needs of small businesses, AM radio owners, and the public by taking steps to increase 

the viability of AM radio stations through access to an FM translator. 

Mr. Chairman, this sums up my testimony. The rest is in the 

record. And I look forward to any questions you may have. 

[The prepared statement of Ms. Clyburn follows:] 

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Mr. WALDEN. Commissioner, thank you for your good work, and 

thanks for sharing those items with us. 

We will now go to Commissioner Rosenworcel. 

Thank you for being here. We look forward to your testimony, as 

well. 

STATEMENT OF THE HON. JESSICA ROSENWORCEL 

Ms. ROSENWORCEL. Good morning, Chairman Walden, Ranking 

Member Eshoo, and members of the subcommittee. Thank you for 

the opportunity to appear before you today along with my colleagues at the FCC. 

Today, communications technologies account for one-sixth of our 

economy, and that is no wonder, because these are the networks 

that carry all aspects of modern, commercial, and civic life. They 

are changing at a breathtaking pace, requiring us all to think boldly about the future. And, in the months ahead, the FCC will do just 

that as we begin the world’s first spectrum incentive auction, work 

to speed the IP transition, and update universal service and media 

policies. This is lofty stuff. 

But I want to begin today by talking about the least glamourous 

part of the communications revolution. I want to talk about infrastructure. Because no amount of new fiberoptic facilities or spectrum matters without good policies on the ground. 

I believe it is time to take a comprehensive look at deployment 

practices and find a way to make them more consistent all across 

the country. We can begin with ‘‘dig once’’ policies, which can pave 

the way for more broadband deployment. 

And the notion behind ‘‘dig once’’ is simple. When construction 

crews are building or repairing roads, deploying broadband conduit 

at the same time adds only 1 percent to the cost of highway 

projects. But this small change can have big impact, yielding more 

broadband investment, more universal access, and more competition. 

We should also focus on Federal lands, which make up as much 

as one-third of our national real estate. We can expedite deployment here by creating an open data inventory of Federal infrastructure assets that can help support broadband and wireless deployment. 

We also need standard contracts from the GSA to facilitate deployment of antenna structures on Federal property. And, while we 

are at it, we should consider extending FCC’s shot-clock policies for 

State and local jurisdictions to Federal authorities so those who 

want to deploy infrastructure get a timely response. 

Not all of these policies can be acted on by the Commission 

alone, but I believe it is essential that we work with you and our 

Federal colleagues to help put them in place. 

Now, these gritty realities of network deployment may not get 

the glory, but they are important. Of course, it is also important 

that we focus on what we can do with our new networks. So now 

I want to talk about how our networks are used for learning. 

When I was growing up, homework required just a paper, pencil, 

and my brother leaving me alone. That is no longer true, because 

today 7 in 10 teachers assign homework that requires access to 

28 

broadband. But FCC data suggests as many as one in three households do not subscribe to broadband service. 

Now, if you think about those numbers, where they overlap is 

what I call the homework gap. And if you are a student in a household without broadband, now just getting your homework done is 

hard. Applying for a scholarship is challenging. And while some 

students may have access to a smartphone, let me submit to you 

that a phone is just not how you want to research and type a 

paper, apply for jobs, or further your education. 

These students enter the job market with a serious handicap. 

And that is a job market today where half of all jobs require some 

level of digital skills. By the end the decade, that number jumps 

to 77 percent. But the loss here, ultimately, is more than individual, because it is a loss to our collective human capital and 

shared economic future that we need to address. 

Now, to address it is going to require a mix of public and private 

initiatives, modernizing FCC work to support connectivity in lowincome households, more WiFi, more competition, and better infrastructure. But I think the sooner we act, the sooner we bridge the 

homework gap and give more students a fair shot at 21st-century 

success. 

Now, learning, of course, is just one example of how new communications technologies are remaking our world. There are others. 

Just last week, we had a cruel reminder from abroad that when 

the unthinkable occurs our security so often depends on 

connectivity. And in the days and weeks ahead, I know our horror 

will not fade, but our resilience will only grow. And at home and 

abroad, we need to study the mix of public alerts, first-responder 

communications, and social networking that facilitated safety. 

Those lessons can make us stronger, and we should submit ourselves to the discipline of learning them. 

Thank you. I look forward to answering any questions. 

[The prepared statement of Ms. Rosenworcel follows:] 

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Mr. WALDEN. Thank you, Commissioner. 

I will now turn to Commissioner Pai for your opening comments. 

Thanks for being with us. We look forward to your testimony. 

STATEMENT OF THE HON. AJIT PAI 

Mr. PAI. Thank you, sir. 

Chairman Walden, Ranking Member Eshoo, members of the subcommittee, thank you for inviting me to testify today. Since 2012, 

it has been a pleasure to labor alongside you on these issues of critical importance, and I look forward to continuing that work in the 

time to come. 

This morning, I would like to share my perspective on three important issues on which members of this subcommittee have recently focused, and I will start with broadband deployment. 

Before shovels even hit the dirt, Internet service providers must 

navigate a dizzying array of Federal, state, and local obstacles, and 

this comes at a cost. Every week spent negotiating with a municipality for access to local rights of way is another week that consumers must wait for a faster service. Every dollar spent complying 

with outdated regulations is a dollar that could have been spent delivering digital opportunities. I have heard and seen this for myself, everywhere from Fargo, North Dakota, to Hammond, Louisiana. 

I applaud the work of this subcommittee on breaking down the 

barriers to broadband infrastructure deployment. On a bipartisan 

basis, you have examined six bills that could boost broadband deployment, including the Broadband Conduit Deployment Act of 

2015. This bill would help ensure that fiber accompanies every new 

highway and, thereby, improve broadband across America. This 

kind of work in the weeds is exactly what is needed if we are going 

to spur private-sector investment. 

Unfortunately, in my view, the FCC has not been as focused in 

promoting the digital revolution. The decision to regulate Internet 

service providers, like Ma Bell of yore, is a case in point, but that 

is not the only problematic decision. The FCC has also impeded the 

IP transition, making it harder for carriers to leave behind the fading copper networks of yesterday and focus on building next-generation networks. 

It is time for the Commission to change course. We should recognize that competition is the best guarantor of consumer welfare, 

certainly more than pervasive regulation. We should embrace the 

IP transition and clear out the regulatory underbrush that has 

slowed down the rollout of new services. And we should work with 

this subcommittee on further breaking down the barriers to infrastructure investment. 

Speaking of changing course, I hope the Commission will soon 

abandon its quest to regulate the over-the-top video market. So far, 

we have left this market to evolve on its own, and that has been 

a wise approach, in my opinion. As the Digital Media Association, 

which represents over-the-top providers including Apple, Microsoft, 

and Sony, put it, ‘‘The tremendous developments in over-the-top 

services have emerged in an environment that permits innovators 

to be flexible and unencumbered.’’ And so the Commission’s proposal, as they put it, ‘‘could end up backfiring, reducing resources 

34 

and opportunities for these innovators rather than expanding 

them.’’ 

And, last month, Ranking Member Pallone called on the FCC to 

hit the ‘‘pause’’ button on regulating streaming video because consumers are beginning to have more programs to choose from, more 

ways to get them, and more options on prices. I wholeheartedly 

agree. And I think that the FCC should embrace the paradigm he 

expressed this morning of putting consumers first. 

One last concern I raise for the subcommittee’s consideration is 

the agency’s enforcement process. I applaud the leaders of this subcommittee for asking the GAO last month to investigate the management of the FCC’s Enforcement Bureau. 

To be blunt, the FCC’s enforcement process has gone off the 

rails. The FCC routinely asserts that companies have violated 

never-adopted rules, ignores facts that get in the way of good press, 

and plucks forfeiture amounts out of thin air. 

Things weren’t always this way. Under Chairman Genachowski’s 

leadership, I only dissented on one enforcement action, and that 

was because I thought the proposed forfeiture amount was too low. 

Under Acting Chairwoman Clyburn’s leadership, I didn’t dissent on 

any Enforcement Bureau actions, not one. But in the last 13 

months, I have voted against 10. To be clear, I haven’t changed my 

approach. It is the Commission’s approach that has changed. 

One further problem is that Commissioners themselves can’t 

oversee the enforcement process. On June 24, I asked the Enforcement Bureau to provide me with a list of their open investigations. 

One day before our last oversight hearing, the Chairman’s office 

told me they believed they were a week or two away from supplying this information. Five months later, my office has followed 

up on this request no less than 12 separate times, and I still 

haven’t received a list of open investigations. 

This is unacceptable. As someone nominated by the President 

and accountable to this body and to the American public for making FCC policy, I should be able to find out what the FCC, including its bureaus, is doing. That I can’t indicates that the agency’s 

process is broken. 

Chairman Walden, Ranking Member Eshoo, members of the subcommittee, thank you once again for holding this hearing. I appreciate your concern about areas of interest to the FCC and look forward to working with you once again in the time to come. 

[The prepared statement of Mr. Pai follows:] 

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Mr. WALDEN. Thank you, Commissioner Pai. That is very disturbing. We will follow up on that. 

Mr. O’Rielly, we are delighted to have you before the committee. 

Commissioner, please go ahead with your opening comments. 

STATEMENT OF THE HON. MICHAEL O’RIELLY 

Mr. O’RIELLY. Thank you, Mr. Chairman. Thank you for the 

honor to be before this subcommittee to help further its oversight 

responsibility over the Federal Communications Commission. 

During my 2-year tenure, I have tried to be true to my principles, look for areas of agreement with my colleagues, and move 

past any disagreements that we may have. This subcommittee is 

right to focus significant attention on the Commission, given how 

our decisions impact the American economy. In retrospect, I wish 

I had pushed for more FCC hearings when I advised committee 

members years ago. 

With your indulgence, I would like to touch on four areas to help 

further the discussion. 

First, a key priority for me is expanding the amount of commercial spectrum available and updating infrastructure rules to facilitate build-out. While the Spectrum Pipeline Act is a step in the 

right direction, industry experts indicate that 350 megahertz of licensed spectrum will be needed to meet projected demand by the 

end of the decade. Inevitably, Federal Government users must reduce their footprint. And we need to incentivize this transition, including instituting Federal Government spectrum user fees. 

The Commission’s efforts to release more spectrum for commercial use include the upcoming broadcast incentive auction, a proceeding targeting specific bands above 24 gigahertz, and examining 

the best ways to open the 5.9-gigahertz band for unlicensed use. 

But no matter how much new spectrum is available, substantial 

infrastructure upgrades are needed. And I have discussed a number of ways to promote build-out in my written testimony. 

Second, the Commission recently moved to reduce barriers to private-sector, not government, foreign investment by proposing to extend the common carrier streamlined review process to broadcast 

licensees. This action is not just about increasing capital for domestic broadcasters but also about expanding the ability of U.S. firms 

to invest internationally. 

At the same time, fixing the process at the Commission will do 

nothing to alleviate the problems inherent in the opaque and 

lengthy Team Telecom review process. I respectfully request this 

body to consider ways to work across committee jurisdiction to craft 

an oversight function for Team Telecom that is grounded in fact 

and legitimacy rather than the whims of any Federal department 

at any given moment. 

Third, I repeat my call for some badly needed process reforms at 

the Commission. Top of this list is allowing those interested in 

Commission open meeting items to see the exact text being proposed to engage in a clear and level playing field, not through a 

dense fog of spin. 

Other reform ideas I have advocated were summarily deferred to 

a process review task force. My office has been actively engaged in 

41 

this process, but suffice it to say that no action has occurred yet. 

The committee’s legislation in this area is both helpful and needed. 

Lastly, the subcommittee should be concerned about the potential for Commission mission creep. Nearly every week, the Commission expansively interprets the Communications Act to claim broad 

authority outside that originally contemplated by the law. Without 

proper constraints, it is easy to see this or a future Commission 

trying to micromanage business practices of edge providers or online companies. 

The Commission’s strong interest in regulating privacy and data 

security is a troubling example with major implications for the tech 

economy and those businesses that transact with customers online. 

The Commission should not freelance in an area where it has little 

expertise. The communications sector is much too important to the 

economy to be saddled with experimental regulations from any and 

all interested agencies. 

So, with that, I thank the chairman and wish to yield back. 

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

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Mr. WALDEN. Commissioner O’Rielly, thank you. 

And thanks to all the Commissioners and the Chairman for 

being here and for your comments. 

I am going to start. 

Commissioner Rosenworcel, I noted in your recent testimony in 

the Senate that you supported cost-benefit analysis in the FCC’s 

decisionmaking, reflecting what the President has proposed in his 

2011 Executive order. Is that correct? 

Ms. ROSENWORCEL. Thank you for the question, Chairman Walden. 

I did acknowledge that the President issued an Executive order 

in July of 2011—— 

Mr. WALDEN. Right. 

Ms. ROSENWORCEL [continuing]. Directing agencies to the extent 

possible to follow cost-benefit analysis, yes. 

Mr. WALDEN. And you support that? 

Ms. ROSENWORCEL. I can support an Executive order, yes. 

Mr. WALDEN. Some I do; some I don’t. 

Commissioner Pai, do you support that concept, as well, the costbenefit analysis in the FCC’s decisionmaking, reflecting the President’s order of 2011 for the other agencies? 

Mr. PAI. I do wholeheartedly, Mr. Chairman. 

Mr. WALDEN. Mr. O’Rielly? 

Mr. O’RIELLY. Absolutely, Mr. Chairman. 

Mr. WALDEN. Commissioner Clyburn? 

Ms. CLYBURN. I support the concept. 

Mr. WALDEN. So, Commissioner Wheeler, it looks—— 

Mr. WHEELER. Oh, my goodness. 

Mr. WALDEN [continuing]. Like you have three to two here right 

now, or three to one. Is this something we can look forward to you 

maybe circulating? 

Mr. WHEELER. Well, I think the first thing that I clearly don’t 

need to remind this committee—— 

Mr. WALDEN. You are an independent agency not subject to 

the—— 

Mr. WHEELER [continuing]. That we are—— 

Mr. WALDEN [continuing]. President’s Executive order. 

Mr. WHEELER [continuing]. Independent—— 

Mr. WALDEN. That is why you can show leadership and—— 

Mr. WHEELER. You knew it. 

Mr. WALDEN. Yes. 

Mr. WHEELER. And it is hard not to believe in cost-benefit analysis. 

Mr. WALDEN. OK. 

Mr. WHEELER. And the purpose of rulemakings is to conduct that 

kind of cost-benefit analysis and to discover, through the advocacy 

process, what are the costs—— 

Mr. WALDEN. All right, but—— 

Mr. WHEELER [continuing]. And what are the benefits and make 

a decision on it. 

Mr. WALDEN. As you know this process, I only have 5 minutes, 

so I am going to cut to the chase here. 

Is that something you are willing to put out for the Commission 

to consider in a formal basis, that you will do cost-benefit analyses? 

47 

Mr. WHEELER. So, Mr. Chairman, I have not specifically looked 

at the Executive order you referenced. Let me take a look at it, and 

I will be happy to get a response to you. 

Mr. WALDEN. All right. I will make sure and get it to you. 

This issue that Commissioner Pai raised is obviously disturbing 

to the committee. And he details how this has not been an issue 

in the past, now contends it is an issue. He has been trying to get 

access to what the Enforcement Bureau is looking at. 

If I were on the Commission, I would feel that responsibility and 

feel like I had the authority to get that. What is the issue there, 

Chairman? 

Mr. WHEELER. Thank you, Mr. Chairman. 

I think that the issue here is the difference between a law enforcement activity and a policy deliberation. And in the law enforcement side of things, you are dealing with sensitive information, you are dealing with information that can move markets, you 

are dealing with a presumption of innocence, that somebody’s name 

gets dragged through the press—— 

Mr. WALDEN. Well, but I guess if—— 

Mr. WHEELER [continuing]. But let me—— 

Mr. WALDEN. Because if prior Chairs have been willing to share 

that information, is there a specific—— 

Mr. WHEELER. It is not my understanding that that is the case, 

sir, that the law enforcement activities have always been—— 

Mr. WALDEN. But are all of these law enforcement, or are they 

just—— 

Mr. WHEELER. They are all law enforcement, yes, sir. 

Mr. WALDEN. All right. Commissioner Pai seems to have a disagreement. I am going to try and sort this out. 

Commissioner Pai? 

Mr. PAI. Mr. Chairman, a couple of responses. 

First, I think, fundamentally, every Commissioner has the responsibility to understand, because we are accountable for the policy decisions that any subordinate bureau makes. 

Secondly, I have a security clearance comparable to any member 

of the Enforcement Bureau. I have been privy to some of the most 

sensitive government operations there are, far more sensitive, for 

example, than deciding whether or not Lyft or Uber or somebody 

else should get a citation from the Enforcement Bureau. 

Additionally, I think that it is a question of selective prosecution 

that has been raised. For example, on issues like the TCPA, our 

number-one source of complaints is for violations of the Do Not 

Call Registry. Yet, when we adopted the TCPA rules, we only had 

one Enforcement Bureau citation on the books. Why is that? 

Pirate radio. Commissioner O’Rielly has long been beating the 

drum, yet it wasn’t a priority till—— 

Mr. WALDEN. All right. 

Mr. PAI [continuing]. Recently. I want to understand why that is. 

Mr. WALDEN. Commissioner O’Rielly, have you had similar sort 

of problems? 

Mr. O’RIELLY. I agree with my colleague on a number of fronts. 

And he raised these issues—I have raised them before publicly. I 

have a problem with a number of aspects of our Enforcement Bureau, both in the selective prosecution but also getting information. 

48 

For instance, we have been trying to work on pirate radio for a 

while. In July, we adopted an item. I have been pushing them to 

do the policy statement that all of us agreed to do. It wasn’t until 

last week, when this hearing was announced, or 2 weeks ago, that 

we actually finally got some ideas out of the Enforcement Bureau 

in terms of how to address pirate radio. 

So I am troubled by how irresponsive they are to the concerns 

that we have and the activities that we would like to see addressed. But then, also, on the prosecution side, deep problems in 

terms of some of the items that we have adopted against my wishes. 

Mr. WALDEN. All right. My time for questions has expired. To be 

continued. 

We turn now to the gentlelady from California, Ms. Eshoo. 

Ms. ESHOO. Thank you, Mr. Chairman. 

Thank you for all of your opening statements. 

There is something that I failed to mention in my opening statement, and I think it is important enough to circle back. I was talking about new competition and when it is unlikely to emerge. An 

example is the $40-billion-a-year special access market. The FCC, 

I believe, has to act decisively to reform the market and stop anticompetitive practices. So I know that you are working on it, but I 

want to underscore it, because this isn’t something that is small. 

I would also like to recognize Ambassador Verveer, who is in the 

audience. 

And thank you for your extraordinary service to our country, Mr. 

Ambassador. Welcome. You enhance the hearing room with your 

presence. Thank you very much. 

Mr. WALDEN. Here, here. 

Ms. ESHOO. Now, some questions. 

Commissioner O’Rielly, in March, you called for the Commission 

to proceed with setting rules and policies that affirmatively permit 

foreign ownership of broadcast licensees above the 25-percent cap. 

I know that the proposed rulemaking was unanimously adopted 

last month. 

Can you just quickly state what you think will come out of that 

proposal? 

Mr. O’RIELLY. Absolutely. 

Ms. ESHOO. Because I think it is a very important one. 

Mr. O’RIELLY. No, I think so, as well. And I agree. And I thank 

the good work of my colleagues, including the Chairman, who has 

been very cooperative on this issue. 

We have worked to try and provide a clear path for foreign investment into U.S. broadcast properties from the private sector, not 

the government, not foreign governments. And, in doing so, we 

think we can increase the amount of capital available for broadcasters in terms of things that they may need to do. That is very 

important. 

But it also, as I talked about in my testimony, it is also about 

allowing U.S. investors internationally. This has been a barrier 

that is pointed on in a number of—— 

Ms. ESHOO. It does raise capital. 

Mr. O’RIELLY. Absolutely. 

49 

Ms. ESHOO. It raises capital. So thank you, and thank you for 

working on that. 

Commissioner Rosenworcel, you need to know that the chairman 

leaned over and said, ‘‘What did you do to get so many Commissioners to talk about ’dig once’?’’ One of these days, it is going to 

pass the Congress. But thank you. And thank you to the Chairman 

and anyone else that—I think that Commissioner Clyburn also said 

something about it. 

You suggested that legislative efforts to increase licensed spectrum for the licensed spectrum pipeline should also include unlicensed. Obviously, you know that I am a huge proponent of unlicensed spectrum. You have called this the WiFi dividend. 

Now, in crafting legislation, how do we ensure that the enormous 

economic value of unlicensed is reflected in CBO’s scoring? 

I almost didn’t ask you this, because you are not a CBO person, 

but you have been on the inside of the government. And this is a 

problem. Anyway, do you want to take a shot at it? 

Ms. ROSENWORCEL. Thank you for the question, difficult though 

it is. 

Everyone in this room has probably used unlicensed spectrum 

today. 

Ms. ESHOO. Sure. 

Ms. ROSENWORCEL. Maybe it has been WiFi, your garage-door 

opener, an RFID tag when you were at the store, or a baby monitor 

overnight. Everyone in this room has used it. It is a huge part of 

our daily lives, and it is a huge part of our economy, responsible 

for more than $140 billion in economic activity annually. 

Ms. ESHOO. Right. 

Ms. ROSENWORCEL. So, when we talk about spectrum policy, we 

need to make sure we talk both about licensed and unlicensed. And 

when legislation moves through this committee, including a swath 

of unlicensed is a good thing for the wireless economy. It is what 

I have called the WiFi dividend. 

The challenge, as you acknowledge, comes with the Congressional Budget Office, which reviews spectrum legislation and has 

a heavy bias towards spectrum that gets auctioned and sold 

through the FCC’s auction process. It strikes me that that accounting is outdated because it doesn’t account for the $140 billion in 

economic activity every year that is dependent on unlicensed spectrum. 

And so the idea behind a WiFi dividend is to continue to move 

unlicensed spectrum when licensed legislation comes about. And I 

think, if we do that, we can see the economy grow and the Internet 

of Things really flourish. 

Ms. ESHOO. Yes, that is great. Thank you. 

Mr. Chairman, our Senate colleagues have done a study and concluded that consumers pay an average of $231 annually. I said that 

in my opening statement. What are we going to do about this? 

I think that section 629 is pretty specific in terms of its intention 

to give consumers a choice in what device they want to use. Do you 

want to comment on this? 

Mr. WHEELER. Well, thank you, Ms. Eshoo. 

Just last week, we closed a comment period in which we were 

asking for responses to the DSTAC report that Mr. Latta had refVerDate Nov 24 2008 12:18 Jun 01, 2016 Jkt 037690 PO 00000 Frm 00055 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-101 CHRIS
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erenced, and I think we need to then decide what we do to go on 

from there. 

You know, I was reading section 629 this morning in anticipation 

it might be a topic. And I note that it specifically says that the 

Congress is telling the FCC to ‘‘assure,’’ quote/unquote, the availability of competitive navigation devices. 

So we are going to get the comments in. We had a really fulsome 

DSTAC process. It produced two separate reports. We put both of 

those out for comments. The comments closed last week. We will 

review them and decide what happens next. 

Ms. ESHOO. My time has expired. I have more questions. I don’t 

know if we are going to do more than one round. 

Mr. WALDEN. We will try to. 

Ms. ESHOO. Thank you very much. 

Mr. WALDEN. We will go now to Mrs. Blackburn next. 

Mrs. BLACKBURN. Thank you, Mr. Chairman. 

Chairman Wheeler, I want to talk about the Downloadable Security Technical Advisory Committee report and the final report it 

issued on development of downloadable security systems that 

would facilitate the delivery of video programming over third-party 

services. And, as you can imagine and as we have talked many 

times, my content producers in Nashville have a lot of concern 

about this. 

And one of the proposals would allow MVPD service to be disassembled into individual piece parts that any retail device manufacturer could selectively reassemble into a new configuration and 

a new service. And it is similar to the AllVid concept considered by 

the FCC in 2010. Disaggregating this MVPD content would also 

lead third parties to circumvent the consumer protections that are 

built into regulated MVPD service but not into AllVid. 

So, with respect to AllVid, I am concerned by ideas that are 

being pushed right now by some individuals and groups that would 

allow third parties to use the content for their own service in ways 

that violate the licensing terms and without consent of the content 

creator. 

And we have a TV marketplace that is producing more video content than ever, so why would the government support this kind of 

intervention and theft? 

Mr. WHEELER. Thank you, Ms. Blackburn. 

I think the first reality here is that AllVid was an idea from half 

a dozen years ago. The world has moved on substantially since 

then. 

As I indicated to Ms. Eshoo, the goal of DSTAC was to address 

exactly the question that you raise. And there were strong opinions 

on both sides. And the conclusions, the comments on it have just 

been filed. 

I can assure you that it is no one’s goal to thwart the security 

that protects the sanctity of copyrights and that we will review the 

record that has been developed accordingly. 

Mrs. BLACKBURN. So we can be assured that you all are not 

going to diminish the right of these content creators to control their 

content, correct? 

Mr. WHEELER. We have to protect copyright, madam. 

Mrs. BLACKBURN. OK. 

51 

Let me move on. I watched some video statements made by Jonathan Chambers over at the North Carolina Rural Center’s Rural 

Broadband Conference that was held back in September. And he 

did a presentation called ‘‘Build It Anyway.’’ And he, in this, personally talked about how he personally secured $100 million, which 

he referred to as a tiny amount of money, for a rural broadband 

experiment. 

And I want to play that right now. 

[Video shown.] 

Mrs. BLACKBURN. OK. If we can come back to the questioning. 

Mr. Chairman, were you aware of this presentation and aware 

that he was discussing $100 million as a tiny amount of money? 

Because I can assure you, to my constituents in Tennessee, it is not 

a tiny amount of money. 

Mr. WHEELER. I am unaware, but you just gave me a new piece 

of information. I had not seen that video, nor had I heard a report 

of this presentation. 

Mrs. BLACKBURN. Are you aware of this supposed experiment? 

Mr. WHEELER. Yes. We all voted on that experiment. And the 

question is, are there alternative ways to get broadband delivery in 

rural areas? We have a crisis in terms of broadband in rural America—— 

Mrs. BLACKBURN. The private sector, I think, can probably—— 

Mr. WHEELER. The issue is we are currently subsidizing one 

group of people who build fiber. And so the question was, ‘‘should 

there be tests of others who also build fiber, such as electric co-ops, 

and whether they can provide service where it is not being provided?’’ That is what this test was about. 

Mrs. BLACKBURN. But to the tune of $100 million? 

Mr. WHEELER. That is what the test is about. Yes, ma’am. 

Mrs. BLACKBURN. You think that that is worth $100 million? 

Mr. WHEELER. There are huge areas—— 

Mrs. BLACKBURN. OK. 

Mr. WHEELER [continuing]. Of our country that are not being 

served by broadband. 

Mrs. BLACKBURN. Is this an example of regulatory humility with 

which you approach your job? 

Mr. WHEELER. No, I think our responsibility, I hope, is to make 

sure that we are using funds to expand the reach of broadband and 

to do so creatively. 

Mrs. BLACKBURN. Mr. Chairman, I have letters from both the 

Governor and the Lieutenant Governor of the State of Tennessee 

I would like to submit for the record about their concerns—— 

Mr. WALDEN. Without objection. 

Mrs. BLACKBURN [continuing]. With overriding muni broadband. 

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

Mrs. BLACKBURN. I yield back. 

Mr. WALDEN. The gentlelady yields back. 

I recognize the ranking member of the full committee, Mr. 

Pallone, for 5 minutes. 

Mr. PALLONE. Thank you, Mr. Chairman. 

I mentioned earlier that, yesterday, I introduced the Securing Access to Networks in Disasters, or SANDy, Act. And the SANDy Act 

52 

is a result of an examination of what went wrong during Hurricane 

Sandy 3 years ago and incorporates some lessons learned. 

I wanted to ask initially, Commissioner Rosenworcel, I know you 

visited New Jersey shortly after Sandy struck, and, based on your 

experiences, do you have any suggestions for legislative steps we 

can take to help consumers during emergencies and disasters? 

Ms. ROSENWORCEL. Thank you, Congressman Pallone. 

I did in fact visit the New Jersey shore right after Hurricane 

Sandy hit, and I won’t soon forget what I saw: the coast ripped 

apart by wind and rain and the people who lived there and their 

stamina and fortitude and desire to rebuild. I know that our communications networks worked during that storm, but not all of 

them, and on the New Jersey coast, far too few of them. 

So I think your SANDy legislation is a terrific start to force us 

to look at network resiliency in a new way, to come up with master 

contacts for our Nation’s 911 call centers, and also to adjust the 

Stafford Act to reflect a priority of communications service providers in crisis. 

Mr. PALLONE. Thank you. 

Let me ask Chairman Wheeler: A second component of this issue 

involves network resiliency. And, as you know, over 40 percent of 

the wireless towers went out in New Jersey during Sandy. What 

is the status of the FCC’s proceeding on network resiliency? 

Mr. WHEELER. So we have had a 911 network resiliency proceeding which we completed, and we continue to work on the other 

resiliency issues. I think that your legislation is helping to focus on 

these issues and will provide some more responsibilities to follow 

through on. 

Mr. PALLONE. All right. I am going to follow up with you about 

some of this after the hearing—— 

Mr. WHEELER. Great. 

Mr. PALLONE [continuing]. If that is OK. 

Let me ask you, Chairman Wheeler, about the incentive auction. 

I know that running a successful incentive auction next year is one 

of your top priorities, and that—— 

Mr. WHEELER. Yes, sir. 

Mr. PALLONE [continuing]. Is one of mine, as well. And I have 

heard some concerns that the software you are using to run the 

auction may not be ready in time. So I just wanted to give you a 

chance to respond. 

Two questions. When do you expect the incentive auction software package to be finalized? And do you plan to give the impacted 

industries practice rounds with the software before the auction 

starts? 

Mr. WHEELER. Thank you very much, Mr. Pallone. 

The software packages are being developed over time, and are 

virtually all completed at this point. They are being run through 

an internal red team process; an outside, third-party, break-it process, if you will. 

And then, specifically to your question, we will be having trials 

and mock auctions, where it will be tested ultimately by those who 

are going to use it. 

Mr. PALLONE. OK. 

53 

Let me just ask you about pirate radio. I know you have been 

fairly successful lately in finding bipartisan support on a number 

of things. And I think an issue that you discussed that should have 

bipartisan support are the problems with the proliferation of illegal 

pirate radio stations. You mentioned it in your statement. 

Do you think that there are any changes in the law that could 

help the FCC better enforce against illegal pirate radio stations? 

Mr. WHEELER. Yes, sir. This has been an effort that Commissioner O’Rielly and I have both been working on, and he has particularly been the cattle prod on the activity. 

But, as I said in my statement, it is Whack-a-Mole right now. 

They pop up, we jump on them, they pop up, we jump on them, 

but they just move to the next place. 

Landlords turn a blind eye to this. If there was a way that we 

could go and say to the landlords, ‘‘Excuse me, you have some liability in this decision, as well.’’ They just see it as income—‘‘Hey, 

I have somebody that is going to start paying me money for this 

space. I will rent it out to them.’’ If they understood that there 

were consequences from that kind of enabling and illegal act, I 

think that would be very helpful. 

Mr. PALLONE. OK. 

Did you want to respond, Mr. O’Rielly? 

Mr. O’RIELLY. No. I agree with the Chairman’s comments. I 

think I want to be careful exactly on approaching landlords. We 

would like to have an education process, as well. Many may not be 

familiar. I do not want to expose landlords in a broad category. I 

want to be careful when we do it. 

But it is not just landlords. It is political campaigns that advertise on these illegal pirate stations. And there are a lot of other— 

concert promoters. There are things that we need to educate the 

community that should not be participating with these pirate radios. They are illegal, and we should go after all the mechanisms 

to eliminate them. 

Mr. PALLONE. All right. Thanks a lot. 

Thank you, Mr. Chairman. 

Mr. WALDEN. We will now turn to the gentleman from Texas, Mr. 

Barton, for 5 minutes. 

Mr. BARTON. Well, thank you, Mr. Chairman. 

I apologize to the Commission for not being here for their opening statements. As you know, we have the Health subcommittee, 

and they are meeting at 10, so we always have to go back and 

forth. So I missed their statement, but I am appreciative of the 

Commission being here. 

Those of you that have attended hearings like this in the past, 

my normal routine would be to start asking the Chairman and the 

other members a series of questions about low-power television. I 

am going to submit those for the record, so I am not going to disappoint you, but we will put them in the written part of the record. 

What I am going to do is kind of go off script—yes, and Greg 

says, ‘‘Uh-oh’’—but in a positive way, I hope, bipartisan. 

We just had this terrible attack in Paris, and hundreds of people 

were killed. We need to do something about it. ISIS and the terrorist networks can’t beat us militarily, but they are really trying 

54 

to use the Internet and all of the social media to try to intimidate 

and beat us psychologically. 

My question—and I will start with the Chairman, but then each 

of the members of the Commission: Isn’t there something we can 

do under existing law to shut those Internet sites down? And I 

know they pop up like weeds, but, once they do pop up, shut them 

down, and then turn the Internet addresses over to the appropriate 

law enforcement agencies to try to track them down? 

I would think that, even in an open society, when there is a clear 

threat, they have declared war against us, our way of life, they 

have threatened to attack this very city that our Capitol is in, that 

we could do something about the Internet social-media side of the 

equation. 

So I would start with the Chairman and then anybody else who 

wishes to comment. 

Mr. WHEELER. Thank you, Mr. Barton. 

As you have done, we cannot underestimate the challenge here. 

I am not sure that our authority extends to picking and choosing 

among Web sites, but I do think there are specific things that we 

can do. As you—— 

Mr. BARTON. Well, do we need to, on a bipartisan basis, give additional authority to shut some sites down? 

Mr. WHEELER. One of the issues here is the question of ‘‘What 

is a lawful intercept?’’ is something that the Congress can define. 

You did it in CALEA. Things have moved on since then. You know, 

you read in the press that they were using PlayStation 4 games to 

communicate, which is outside the scope of anything ever considered in CALEA. So there are probably opportunities to update the 

lawful intercept concept. 

I think there is also a question about the security of our networks. There have been 17 fiber cuts in the Bay Area in the last 

few months mysteriously happening. There were two fiber cuts yesterday, not in the Bay Area but elsewhere in the country. We need 

to have some kind of a big-data capability of determining what is 

happening to our network out there. Because it is not just people 

getting on the network; it is, perhaps, people doing things to the 

network. 

We have the only reporting system in the Nation that we run, 

called the Network Outage Reporting System, NORS. We don’t 

have the ability to use that to go for big data, to have big-data 

analysis. It is barely holding together with baling wire and glue because it is using ancient technology. We have been asking for appropriations to upgrade that. 

I know the appropriation process is still underway, and I know 

it is not this committee, but this experience has called out the importance of network security. And if we can’t connect the dots—you 

know, after 9/11, we kept hearing about ‘‘We couldn’t connect the 

dots, we couldn’t connect the dots.’’ We have the ability inside our 

systems to use big data to connect the dots, but we don’t have—— 

Mr. BARTON. Well, my time—— 

Mr. WHEELER [continuing]. The capacity to do it. 

Mr. BARTON [continuing]. Is about to expire. I would assume it 

is a ‘‘yes’’ answer, that the Commission will work with the committee if we need to update our laws to do so. 

55 

Mr. WHEELER. It is a capital ‘‘Yes,’’ sir. 

Mr. BARTON. OK. 

Is there anybody else who wants to comment on that before—my 

time just expired. 

Ms. ESHOO. Well, I want to thank you for raising this. And I 

know that the FBI, relative to the cuts in the Bay Area, have said 

that they need to deal with HPSCI, the House Permanent Select 

Committee on Intelligence. And so we will just—— 

Mr. BARTON. Well, it is a clear and present danger. 

Ms. ESHOO. Yes. Of course it is. 

Mr. BARTON. They have declared war against us. 

Ms. ESHOO. And I don’t think any of this is coincidental either. 

Mr. BARTON. And they are using the Internet in an extremely offensive, inappropriate—— 

Ms. ESHOO. Effective way. 

Mr. BARTON [continuing]. Way against us. And we ought to be 

able to make it, at a minimum, much more difficult and, hopefully, 

absolutely shut it down. 

With that, Mr. Chairman, I would yield back. 

But I will get you my questions on low-power TV. 

Mr. WHEELER. I look forward to them, sir. 

Mr. WALDEN. The gentleman yields back the balance of his time. 

The chair now recognizes the gentleman from Pennsylvania, Mr. 

Doyle. 

Mr. DOYLE. Thank you, Mr. Chairman. 

And I just want to say to Mr. Barton, I wholeheartedly agree 

with what you said, too, and hopefully we can work on that. 

Chairman Wheeler, at the risk of sounding like a broken record, 

I want to talk to you a little bit about special access. 

Mr. WHEELER. Yes, sir. 

Mr. DOYLE. First, I want to thank you for the Commission’s continued work on special access. And while I was somewhat concerned that the comment deadlines were once again extended, I 

want to applaud the Commission for beginning its investigation 

into tariff rates and conditions in these markets. I believe that the 

Commission has worked hard and diligently on this proceeding. I 

just wish you would work faster. However, I know some of my colleagues on the other side of the aisle have taken issue with this 

proceeding. 

Mr. Chairman, I have two questions. 

First, if ILECs are using their market position to charge anticompetitive rates to competitors, jacking up prices for competing 

services, or driving competitors out of business, do consumers benefit from that? 

And, secondly, does investment in broadband infrastructure increase or decrease in competitive markets? 

Mr. WHEELER. Well, I think the answer to the first is ‘‘no,’’ and 

the answer is ‘‘increase’’ in the second. 

You know, one of the things that gets lost in this issue is we call 

it ‘‘special access.’’ Boy, there is a term that doesn’t say anything. 

What we are talking about is services that are necessary for competition. We ought to start calling these ‘‘competitive services.’’ 

Because you can’t have cell densification, which makes wireless 

networks work better, without backhaul, which requires this speVerDate Nov 24 2008 12:18 Jun 01, 2016 Jkt 037690 PO 00000 Frm 00061 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-101 CHRIS
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cial access. You can’t have the Internet of Things in 5G built out. 

It is going to do nothing but expand the need for this, let alone the 

kind of competitive services you were talking about that increases 

service opportunity by competitive providers and lowers costs. 

So I think we ought to call it what it is. This is services that are 

essential for competition. 

Mr. DOYLE. Thank you, Mr. Chairman. 

Mr. Chairman, I also want to ask you, the Commission recently 

decided, in evaluating spectrum transitions, to take a closer look at 

deals that involve low-band spectrum. And the FCC recognized the 

unique value of that spectrum and the fact that there is already 

significant concentration of that spectrum among just a few carriers. 

You have now evaluated several transactions in which you have 

conducted that enhanced review, but in each case you still decided 

to allow further concentration of low-band spectrum. Just last 

week, the Commission approved a transaction where the buyer exceeded the low-band screen established by the Commission. 

My question is, what is the point of creating a mechanism for enhanced review if the Commission is not prepared to use it? 

Mr. WHEELER. Well, thank you, Congressman. 

I think there are two parts to that. One is you always want to 

have this enhanced review because that, in itself, is putting a stake 

in the ground, if you will. 

Secondly, it is a review. And so the question becomes ‘‘Is there 

a legitimate application that overcomes that stake in the ground?’’ 

In this particular instance, which involves some rural broadband, 

some rural spectrum for AT&T, the Commission reached the decision that, yes, on the merits, this would be enhancing to service to 

consumers. 

Mr. DOYLE. Thank you. 

Mr. Chairman, let me ask you, on privacy, I am concerned about 

some of the ongoing reports we are seeing that ISPs are tracking 

consumers online by using tracking headers and other types of unsecure technologies that can endanger consumer privacy and user 

security. Third-party companies are already publicly claiming that 

they are using these super-cookies to track users online. Mr. Chairman, I just want to urge the Commission to take action and rein 

in these harmful practices. 

And, finally, on set-top boxes, the DSTAC recently released its 

report on new proposals that would allow consumers to buy and 

use third-party devices for video programming. I believe the future 

of this technology is over-the-top services. I encourage the Commission to continue working on this issue. Pay-TV subscribers should 

not have to suffer exorbitant rental fees for poorly designed and 

produced equipment. And I would urge the Commission to continue 

your work on these proceedings. 

Mr. Chairman, thank you and all of the Commission for being 

here before us today. I know we see you frequently, and we appreciate your input and the work that you are doing on the Commission. 

I yield back. 

Mr. WALDEN. The gentleman yields back the balance of his time. 

57 

The chair now recognizes the vice chair of the subcommittee on 

Communications and Technology, the gentleman from Ohio, Mr. 

Latta. 

Mr. LATTA. Thank you very much, Mr. Chairman, for yielding. 

And, again, to the Commissioners for being here, thanks very 

much. 

If I could go back to a question the chairman had asked a little 

bit earlier to Commissioners Clyburn and Rosenworcel. 

Do you have access to the Enforcement Bureau’s work? 

Ms. CLYBURN. Every 2 to 3 weeks, I have meetings with the Enforcement Bureau. We go through items, you can call them hot topics, so to speak. Some of them are extremely hot. You know, some 

are at, I guess, the genesis of some of the conversations here today. 

So I have never felt that there was any information that I requested or that I needed to know what is going on in the bureau, 

know what’s going on in the ecosystem, and make a decision that 

might come up to us. I have never felt—— 

Mr. LATTA. OK. Let me ask this, though. You say you have a 

meeting every couple of weeks. How current is that information 

from the Enforcement Bureau? Is it something that has happened 

in the last 2 weeks, or is it something that has gone on for weeks 

and months beforehand? 

Ms. CLYBURN. It depends on the status of the item, so it is just 

all of the above. 

Mr. LATTA. Could I ask a follow-up on that, then? When you say 

it is the status of the item, how many would be older type of enforcement work? 

Ms. CLYBURN. If I had to handicap it based on the last three or 

four meetings, sort of 50/50. Again, an item might get teed up, and 

then you will get a status—— 

Mr. LATTA. So some of them have been going on for a lot longer 

before you ever find out about it. 

Ms. CLYBURN. Naturally. And when you talk about NALs, notice 

of apparent liability, and process, you get updates. And these often 

take quite a bit of time, because, again, there is due process to the 

party that might have the NAL. So it can be a mixture there. 

Mr. LATTA. OK. 

Let me ask Commissioner Rosenworcel, what is your response to 

that? 

Ms. ROSENWORCEL. My access is virtually the same as what 

Commissioner Clyburn just described. 

Mr. LATTA. Commissioner Pai? 

Mr. PAI. So the conversation thus far has focused on things that 

are circulated to the Commissioners for a vote—a notice of apparent liability, for instance. 

What I am talking about is a list of open investigations, things 

that the Enforcement Bureau is doing without our knowledge that 

is not ultimately, perhaps, going to be presented to us for a vote. 

Quite often, we hear about these things only when they reach the 

press. And, for example, the recent Hilton letter of inquiry is something that I learned about and my staff learned about because of 

press reports. 

58 

And it seems to me that it is not too much to ask for the people 

who are tasked by this body with setting communications policy to 

understand what it is—— 

Mr. LATTA. Let me—— 

Mr. PAI. The Enforcement Bureau is not an independent agency 

with—— 

Mr. LATTA. Yes, let me interrupt, if I could. When you say you 

got something from a press report, how long had that Enforcement 

Bureau’s work been going on prior to you even seeing it in the 

newspaper? 

Mr. PAI. I am not sure how long it had been going on, but it was 

issued contemporaneously with some other enforcement actions we 

took that very day. 

Mr. LATTA. OK. 

If I could ask Commissioner O’Rielly? 

Mr. O’RIELLY. I have similar problems. But can I give you an example that just happened yesterday? We came out with an FTC– 

FCC memorandum of understanding. I had an opportunity to talk 

to some folks at the FTC. They were notified of it on last Thursday. 

I learned of it yesterday morning. So, I mean, it is just a lack of 

sharing. 

Mr. LATTA. OK. Thank you. 

Commissioner Pai, if I could go on to another question for you. 

In June, Congressman Green and I sent a letter to Chairman 

Wheeler stating our concerns with the direction of the DSTAC and 

urged the Commissioner to follow the clear statutory language set 

forth in STELA and ensure that the DSTAC inquiry and report do 

not go beyond the bounds of the statute. And, unfortunately, 

changes were not made to DSTAC, which was unable to reach a 

consensus on recommendations for downloadable security solutions 

for set-top boxes. 

DSTAC produced a report with two recommendations, one that 

would rely on apps, and one referred to the AllVid. And, again, the 

gentlelady from Tennessee had asked some questions questioning 

to the Commissioner on this, or the Chairman of the Commission. 

If I could ask you, Commissioner Pai, on the app, if apps are already prevalent in the market and used on smartphones, smart 

TVs, and Apple TVs, et cetera, why isn’t the FCC keeping focused 

on consumer demands and preferences rather than looking backward to the AllVid approach? 

Also, are you concerned that such a strict technological mandate, 

which would take years to develop, would be obsolete by the time 

it is even implemented? 

Mr. PAI. Thank you for the question, Congressman. And I understand that is a widespread concern. I think that here regulatory 

humility is called for, not just because it is imperative that the 

FCC hew strictly to the mandate that was set forth in the law but 

also because, as you pointed out and have pointed out various 

times before, this marketplace is changing rapidly, and so any FCC 

intervention could have unintended consequences. 

So, therefore, I don’t think it is appropriate for us to issue technological mandates or otherwise adopt proposals that could frustrate innovation, that could allow for the theft of content, that 

could otherwise stand in the way of consumer benefits. 

59 

Mr. LATTA. OK. 

Well, thank you. My time has expired. 

And, Mr. Chairman, if I could ask unanimous consent to enter 

the letter from Congressman Green and myself—— 

Mr. WALDEN. Without objection. 

Mr. LATTA [continuing]. Into the record. 

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

Mr. WALDEN. I appreciate that. 

We will now go to Mr. Loebsack from Iowa. 

Mr. LOEBSACK. Thank you, Mr. Chair. Thanks for having this 

hearing. 

It is good that all five of you are here today. I really appreciate 

your presence and responding to questions. 

Before I ask my question about USF, which I ask almost every 

time we have somebody here at least, I do want to mention again 

that I think that Mr. Barton raised a very serious issue here, not 

necessarily what we can do with the Internet and restricting it, 

whatever the case may be, but I think bigger questions beyond that 

even. 

And, Chairman Wheeler, I was very happy to hear you—or not 

happy, but I appreciate the fact that you had some information on 

fiber cuts. 

I was on the Armed Services Committee for 8 years before I got 

on this committee. Traveled overseas to zones of conflict often. I 

guess it heightens my concern, obviously, about what happened in 

Paris. We all are concerned about that. But then we bring it home 

here to our infrastructure in the United States. And the Internet 

fiber, all of this is part of our infrastructure. 

It is absolutely essential that we know where all of this is so that 

we can protect it and so we can make sure that we can prevent an 

attack on that part of our infrastructure. I think it is really critical. 

So thank you for addressing that. And I am sure we are going to 

go forward with this, in cooperation with you folks, to make sure 

that we can prevent those kinds of attacks from happening on that 

very important part of our infrastructure. 

I do want to ask about universal service. You all know—I think 

I have mentioned this a number of times—that I represent a very 

rural district. When I first got on this committee earlier this year, 

I went to all 24 counties, and I talked to folks about rural 

broadband and how important it is for the economy, for education, 

for health care, for farmers, economic development, on and on and 

on. 

And folks are very frustrated in my district, especially when it 

comes to the USF. And so I kind of want to know what the status 

is, if we can have a status update for fixing the standalone 

broadband problem that ties the Universal Service Fund to voice 

service, denies support for broadband-only service in areas served 

by smaller rural carriers. 

We have gotten bipartisan support to do something about the 

USF and to reform it so that we really can bring that service to 

folks in theses rural areas. It is bipartisan. 

And so I would like to get a little update, if I could, from you, 

Chairman Wheeler, about where we are on that. And I promised 

60 

folks last week when I was talking to them that I would ask you 

directly about that. 

Mr. WHEELER. Thank you, Congressman. 

Yes, this is a bipartisan effort. We have a bipartisan working 

group of three of us up here—Commissioner O’Rielly, Commissioner Clyburn, and myself—who are working on a rate-of-return 

carrier reform package that we hope to have on the floor of the 

Commission next month. 

Mr. LOEBSACK. Good. 

Mr. WHEELER. A lot of people have focused on a December date 

that we had talked about in a Senate hearing. We are not going 

to be controlled by the calendar, but we want to get this done 

quickly. 

The key issue here is whether or not we are going to make sure 

that the money is spent for the expansion of broadband. Because 

that is what your consumers want. They say, ‘‘How do I get 

broadband further out into my areas?’’ 

There are some proposals that are put forth that are called fixes 

to this that say, ‘‘OK, we will send the money out, but there is no 

requirement that it actually expand broadband.’’ 

Mr. LOEBSACK. That is right. 

Mr. WHEELER. And our group, the three of us, are working to 

say, ‘‘How do we make sure that we have money that is going out 

to rural areas that will result in expansion of broadband service?’’ 

Mr. LOEBSACK. I appreciate that. 

Did you want to say something, as well, Commissioner 

Rosenworcel? 

Ms. ROSENWORCEL. Oh, sure. 

Mr. LOEBSACK. Or Commissioner Clyburn? 

Ms. CLYBURN. We get mixed up all the time. 

Mr. LOEBSACK. Sorry about that. 

Ms. CLYBURN. One of the reasons why I am so excited about 

working with this group is, I asked myself a question: Is there a 

mechanism in place when it comes to these carriers that will tell 

us how many households are connected? And when I could not answer that question, I said: We have to do something beyond modernizing this program. We need a way to track to make sure that 

we are on target, to make sure that the moneys are going to close 

the broadband gap. 

And so this is why it is so important for us to make sure that 

each dollar we spend is to enable broadband deployment. 

Mr. LOEBSACK. Thank you. 

Ms. CLYBURN. And I am proud to work with these men to see 

that that happens. 

Mr. LOEBSACK. Thanks to all of you. I really appreciate it. 

I am near the end of my time. I do want to submit, however, a 

question for the record on video relay service, if I may, Mr. Chair. 

I would like to be able to submit that question, as well. 

Thank you so much. I yield back. 

Mr. LATTA [presiding]. The gentleman yields back. 

The chair now recognizes the gentleman from Illinois, the chairman of the Subcommittee on Environment and the Economy, for 5 

minutes. 

Mr. SHIMKUS. Thank you, Mr. Chairman. 

61 

Hey, Loebsack, how many counties? 

Mr. LOEBSACK. Twenty-four. 

Mr. SHIMKUS. I have 33. So I just say ‘‘ditto’’ to his comments, 

and I don’t have to go down that route. 

But I would also—the good response, what popped in her head 

was the failure of broadband stimulus to do a lot of what we want 

it to do in rural America. And it was the overbuilding of competitive areas. And just on the record, being here for a while helps you 

remember some of the old stories, and we lost a great opportunity 

there. 

Chairman, you mentioned clarity, consistency, completion? 

Mr. WHEELER. Yes. 

Mr. SHIMKUS. I like that. I am starting to wrap my mind around 

reliability, affordable, and sustainable. I think those are also good 

goals to reach in a lot of different areas. And I think it highlights 

telecommunication in the next era for all Americans, again, dealing 

with the rural changes. 

But that goes to an issue that we talked about the last time, I 

think, when the full Commission was here. We still have a terrible 

problem with dropped calls in rural America. And I talked to the 

association this morning, said I would raise it. 

I think the last answer was, ‘‘We have the rules to enforce it.’’ 

I think our folks don’t see it that way. Or my point is, they are still 

having a problem, and it is not fixed. 

Do you want to comment briefly on that? 

Mr. WHEELER. Thank you. Thank you, Mr. Shimkus. 

Mr. SHIMKUS. Briefly. 

Mr. WHEELER. I mean, there are several things. One—I will be— 

watch how fast. 

One is that we did pass a rule that false rings, which is what 

was going on, are no longer allowed. 

Secondly, we heard a lot about enforcement today. We have 

moved against three major carriers who were allowing this to happen. We just finished with Verizon, for instance, with a $2 million 

fine and a requirement that they do $3 million to fix the situation 

because they knew it was going on, and they did nothing about it. 

So, yes, sir, we are trying to be aggressive on this front. 

Mr. SHIMKUS. And let me have a followup. What is the status of 

this data collection effort? And will this information be made public? And, if not, why? 

Mr. WHEELER. We are—— 

Mr. SHIMKUS. On the call completion question. 

Mr. WHEELER. On the call completion, we are completing that. 

And to the extent that there is nonconfidential data, it will be on 

the record. 

Mr. SHIMKUS. OK. Thank you. 

I want to talk also about—because the ranking member of the 

subcommittee and I, we do the first responders. And Ranking 

Member Pallone talked about his proposal. FirstNet has to get its 

act together. FirstNet came to see us. I think they are making better strides. But they are on the hook if we have another major 

event, and we have not moved aggressively. 

Now, in discussions with me, they say they now understand that 

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works, which was what we were trying to say when we fought on 

the legislation to begin with. 

But shame on us and shame on FirstNet and shame on the Commission if we have another event and we cannot communicate. So 

we need to all have our shoulders at the wheel and do what we can 

to push this. 

Commissioner O’Rielly? 

Mr. O’RIELLY. Can I only say that, when we were working on the 

statute I was working on behalf of a number of Senators, the structure that is now outlined is something I disagreed with. And the 

Commission actually doesn’t have a great role in FirstNet. NTIA, 

at the Department of Commerce, has a greater role in its oversight 

function. I lost that debate, and now we have a process exactly 

playing out how I thought it might. 

Mr. SHIMKUS. I think I lost some of the debate during that discussion, too, and I am not sure it is appropriately placed. And I 

don’t think we have a—I am just concerned. I am glad they came 

to visit with me. But the public is not going to say, ‘‘Oh, it is 

NTIA,’’ right? 

Mr. O’RIELLY. True. 

Mr. SHIMKUS. They are going to say FCC, they are going to say 

Members of Congress and the executive branch. 

Mr. O’RIELLY. No, I tried to provide authority to the FCC 

through that process. I just lost that discussion. So if Congress 

wishes to give us more authority, we would be happy to have more 

involvement. 

Mr. SHIMKUS. Thank you. 

And let me just continue with you. That memo you received, you 

got it yesterday? 

Mr. O’RIELLY. Yes, sir. 

Mr. SHIMKUS. You said the FTC had it Thursday? 

Mr. O’RIELLY. Yes, sir. 

Mr. SHIMKUS. Commissioner Pai, when did you get that memo? 

Mr. PAI. I saw it on the Web site yesterday. 

Mr. SHIMKUS. Commissioner Rosenworcel? 

Ms. ROSENWORCEL. Yesterday. 

Mr. SHIMKUS. Commissioner Clyburn? 

Ms. CLYBURN. The same. 

Mr. SHIMKUS. Chairman Wheeler, do you want to respond? 

Mr. WHEELER. I have been working on it for 18 months. The reality here is that it was signed yesterday, it became effective yesterday, and that—— 

Mr. SHIMKUS. But you understand the problem. This is illustrative of this debate about communicating. And I know we have, 

you know, three to two, and I know Democrats have the majority, 

but I would hope the Commissioners are kind of one big, happy 

family and work together to move telecommunications processes. 

Just like we do on this committee, right? 

So I think it is just a little—— 

Ms. ESHOO. Thank you, Brother Shimkus. 

Mr. SHIMKUS [continuing]. Illustrative, and everybody should 

have the information when everyone has the information. 

And I yield back. 

63 

Mr. LATTA. The gentleman’s time has expired, and he yields 

back. 

The chair now recognizes the gentlelady from California for 5 

minutes. 

Ms. MATSUI. Thank you, Mr. Chairman. 

Chairman Wheeler, Congress tasked the FCC with balancing 

many priorities in the incentive auction, including protecting access 

to local broadcasting. 

Now, during the last few weeks, I had a chance to meet with 

many of our Sacramento broadcasters. They work hard to keep my 

constituents informed. My local broadcasters have also told me that 

they are invested in the success of the incentive auction. 

I believe the incentive auction can clear the beachfront spectrum 

to fuel our wireless economy while making sure Sacramentans and 

consumers across the Nation still get the local news and information that they need. 

My local broadcasters also brought up the concern that they 

could be at risk of losing their license after the auction if they 

aren’t able to transition to a new channel assignment within 39 

months. I know how critical it is to get the spectrum into the market, but we need to make sure that this transition doesn’t leave TV 

viewers in the dark. 

Chairman Wheeler, my question is: How can the FCC, number 

one, make sure broadcasters successfully make this transition after 

the auction? And two, what is the FCC’s plan if broadcasters can’t 

meet the FCC’s deadline? 

Mr. WHEELER. Thank you very much, Ms. Matsui. 

I totally agree on the importance of local community broadcasting and why it has to remain after the auction. 

Here is how it works. We had 36 months that the statute said 

before you have to move off after getting money. Then we put 3 

months in for construction permits, which is how you got to 39 

months. 

Now, the interesting thing is that the National Association of 

Broadcasters, in our proceedings, said, ‘‘Oh, we only need 30 

months.’’ But, be that as it may, what we would do in this kind 

of a situation that you outlined is to have an extension. I mean, 

there is a 6-month extension at least that you can get on this that 

we will be able to work through. 

This is not a drop-off-the-edge-of-the-table situation for anybody. 

As we see that things are approaching the edge of the table, there 

are solutions that can be taken. 

But at the same point in time, those who are bidding on spectrum need to know that there is some certainty that they are going 

to get it, or else it doesn’t have any value to them. And so we look 

at 39 months, we look at the extension, we look at certainty, and 

I think we can work it out. 

Ms. MATSUI. So you will balance this out and work with them. 

Mr. WHEELER. I think we can work with them, yes. 

Ms. MATSUI. OK, great. I can assure my locals then. 

Mr. WHEELER. Yes, ma’am. 

Ms. MATSUI. Thank you. 

Commissioner Rosenworcel, you have spoken about the need for 

smart spectrum policies so that the United States can continue to 

64 

lead the world in 5G. I know the FCC has taken some recent steps 

to look at opening up higher-frequency spectrum bands for nextgeneration mobile services. Congress has also acted. The Bipartisan 

Budget Act included important provisions. 

Now, Commissioner Rosenworcel, what more can the FCC do to 

identify new spectrum opportunities? What more can Congress do? 

Ms. ROSENWORCEL. Thank you, Congresswoman Matsui, for the 

question. 

Today, as you probably know, the bulk of our spectrum activity 

takes place at 3 gigahertz or below, but, going forward, we are 

going to look way, way up there. And when we do, if we combine 

really stratospheric frequencies with dense networks of small cells, 

we are going to develop wireless services that go further and faster 

than ever before. 

It is absolutely imperative that the FCC lead when we deal with 

this issue, because the rest of the world is starting to look at highband spectrum and trying to find ways to deploy. We have a rulemaking, and it is important that we conclude that rulemaking and 

identify bands where we can proceed. 

Ms. MATSUI. OK. Great. 

Chairman Wheeler, you have highlighted the FCC’s work on a 

spectrum above 24 gigahertz as critical for 5G. I hope the FCC will 

move forward expeditiously so that we can create a climate for 

American leadership in 5G. 

And I know this is really important. We just ought to reiterate 

this. When do you expect to issue final rules for this important proceeding? 

Mr. WHEELER. Thank you, Congresswoman. 

As Commissioner Rosenworcel just indicated, we just developed 

in this proposed rulemaking for 28 GHz, 37 GHz, and 39 GHz 

bands, as well as for 64 GHz to 71 GHz for unlicensed purposes. 

And we did that in a timely manner so that we could go to the 

World Radio Conference in Geneva, which is being held right now, 

and get a leg up, if you will, on advocating our position to the 

world. 

Ms. MATSUI. OK. 

Mr. WHEELER. So that was step one. We will close this rulemaking by the summer, clearly. And I have also committed to my 

colleagues that we will also open a new rulemaking on additional 

spectrum up in the higher bands. 

Ms. MATSUI. OK. Good. 

Well, thank you very much. 

And I know my time is up. I yield back. 

Mr. LATTA. Thank you. 

The gentlelady’s time has expired, and she yields back. 

The gentleman from New Jersey is recognized for 5 minutes. 

Mr. LANCE. Thank you, Mr. Chairman. 

Good morning to the panel. 

Commissioner O’Rielly, I believe there is a good deal of room for 

criticism of the net-neutrality order. And I ask you what message 

you believe this sends internationally when our government asserts 

such authority over the Internet. Are you at all concerned that 

other nations, including some repressive regimes, could get the 

65 

wrong idea about America’s commitment to free speech and free expression online? 

Mr. O’RIELLY. Yes, sir. Thank you for the question. 

I experienced this when I was in Barcelona recently, when we 

had an opportunity to talk to some of our European colleagues 

about what they were planning to do and what activities the 

United States signals were sending to their activities. And if you 

see what the European Union has done recently on the issue of net 

neutrality, it is different than what the United States has done and 

is actually a step back, I would say, from some of the extensive 

steps that we have taken and problematic steps that we have 

taken. 

So I am troubled by what message it sends internationally, how 

far and how wide the United States has moved through the netneutrality proceeding at the Commission. I think it is the wrong 

signal internationally. Thankfully, some of the other nations are 

looking at it a little differently, but it is very problematic going forward. 

Mr. LANCE. Thank you. 

Mr. Pai, do you have an opinion on that? 

Mr. PAI. I would agree with what my colleague said. And I also 

have had the opportunity to speak with counterparts from South 

Asia to South America who have expressed amazement that, having built the Internet economy that is the envy the world, the U.S. 

would put that at risk with a regulatory scheme that creates more 

uncertainty and impedes future broadband deployment. 

Mr. LANCE. Thank you. 

Chairman Wheeler, you stated your intent to commence a rulemaking to promulgate rules, quote, to clarify the FCC’s expanded 

privacy authority under the new Internet rules and that you would 

hope that this would be forthcoming this fall. 

Could you please update us on that, given the timeframe? 

Mr. WHEELER. We have missed fall, Mr. Lance. And—— 

Mr. LANCE. Congress misses deadlines all the time, so—— 

Mr. WHEELER. And it is, I think, because of the significance of 

the issue. We have long had responsibility for privacy issues. And 

how that maps over into the IP world is something that I hope we 

will be able to begin to surface in proposals early next year. 

Mr. LANCE. Thank you. 

Are there other members—Mr. Pai? 

Mr. PAI. Two aspects of that. 

First, the agency’s decision divested the Federal Trade Commission of jurisdiction, and they are the agency with longstanding expertise as well as statutory authority over this area. 

In the meantime, unless and until the FCC, the five of us, promulgate rules, the binding guidance upon the agency was put out 

in an Enforcement Bureau advisory on May 20 of last year. And 

this is the core rule now that the private sector has to adhere to: 

‘‘The Enforcement Bureau intends that broadband providers should 

employ effective privacy protections in line with their privacy policies and core tenets of basic privacy protections.’’ 

I have no idea what this means. Neither does the private sector. 

And the entire industry is at the mercy, from edge providers to 

66 

ISPs, as to how the agency is going to proceed in this brave new 

world. 

Mr. LANCE. Yes, I tend to agree with that. 

Would other members of the Commission like to comment? 

Commissioner Rosenworcel? 

Ms. ROSENWORCEL. Sure. 

Privacy is a cherished principle, and it is also a complicated one 

in the digital age. So, going forward, we are going to have to provide more clarity. I respect that the Chairman wants to have a 

rulemaking on that. And I acknowledge, as Commissioner Pai said, 

that our existing guidance is insufficient to date. 

Mr. LANCE. Yes. Thank you. 

Commissioner Clyburn? 

Ms. CLYBURN. One of the things that is uplifting and great about 

this is we have complementary jurisdiction with the FTC, and we 

work collaboratively. We meet on a monthly basis to make sure 

that consumers are protected. So our job, our collaborative, combined role is to ensure that there are no holes when it comes to 

protecting consumers. 

And so we will work and we will get more clarity when something is before us. But in terms of the jurisdiction under section 

222, our role, as provided by you, is clear when it comes to privacy. 

Mr. LANCE. Commissioner O’Rielly? 

Mr. O’RIELLY. I have spent a great deal of time on the issue of 

privacy. I have to say, I find that the Commission’s understanding 

of the issue is lacking and its expertise is low. 

The FTC spent over the last two decades becoming an expert in 

this space and providing guidance and providing the structure, and 

we are going to waltz in there and provide quite a bit of damage, 

I think, going forward, notwithstanding the fact that it is a very 

important issue. 

Mr. LANCE. Thank you. I think we will continue to monitor this, 

and I thank you for your testimony. 

Thank you, Mr. Chairman. 

Mr. LATTA. Thank you. 

The gentleman’s time has expired, and he yields it back. 

The chair now recognizes the gentleman from California for 5 

minutes. 

Mr. MCNERNEY. I thank the chairman. 

And I thank the Commissioners for giving us your wishlist this 

morning. I think it was an interesting list. 

Mr. Chairman, would you update us a little bit on the Commission’s efforts to address cybersecurity, specifically coordination with 

some of the other Federal agencies? 

Mr. WHEELER. Yes, sir. 

As a matter of fact, next week, I am meeting with a coordinating 

group of the heads of all of the independent agencies of the government—Nuclear Regulatory Commission, FTC, FERC, the whole 

group—where we are coordinating our policies. 

And the approach that we have taken at the FCC is one of the 

models that is being talked about across all agencies, which is, how 

do you work with a multistakeholder group inside your industry to 

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ing, with the involvement of the agency, and how do we do that 

across the board? 

The financial industry has been very successful in doing that. We 

are successfully now underway on that, and we will be continuing 

to work with other agencies. 

Mr. MCNERNEY. Are you a lead agency in regard to this issue? 

Mr. WHEELER. I would hope so, sir. 

Mr. MCNERNEY. Do you think there is a potential that sort of a 

knee-jerk reaction to the tragic Paris attacks could actually make 

us less secure, specifically—— 

Mr. WHEELER. I am not sure what you mean by ‘‘a knee-jerk reaction.’’ 

Mr. MCNERNEY. Well, I mean some policies that are designed to 

sound tough but actually cause problems, more problems than they 

were intended, specifically with cyber and maybe backdoor policies. 

Mr. WHEELER. So, it is interesting. I was having a discussion 

with Ms. Matsui, who I see has left, before the hearing that—one 

of the things that I have found my 2 years in this job is that the 

regulatory process—because it provides for so much diverse input 

from so many different parties—is a slow process. So I think that 

that tends to mitigate the kind of knee jerk you are talking about. 

And the fact that there wouldn’t be lots of opinions heard, I 

think, is not a reality that exists, as the Administrative Procedure 

Act set out our procedures. 

Mr. MCNERNEY. Thank you. 

Commissioner Clyburn, you mentioned the Mobility Fund hasn’t 

really been implemented yet. Do you see a path forward to that? 

Ms. CLYBURN. Yes, I do. I have been working with our Wireless 

Bureau, and they assured me that we have a pathway to completion. 

You and I have both experienced traveling down roads, traveling 

down state highways where we look at our phones, absolutely no 

bars, absolutely no coverage. At night, alone, it is not the most 

comfortable feeling. 

And so we are looking at this, how do we ensure the safety in 

terms of travel, the opportunities, particularly in rural America, 

that they have comparable service. And I think we are on a pathway of doing that real soon. 

Mr. MCNERNEY. Thank you. 

Commissioner Rosenworcel, you mentioned the Federal lands for 

broadband deployment. What is your vision for that? 

Ms. ROSENWORCEL. Well, by some measures, one-third of our Nation’s real estate is owned by the Federal Government. And they 

are some of the areas that have the sparsest deployment of communications services. 

So the question is, what Federal facilities exist on those lands 

that we could use to support broadband deployment or antenna 

structures? And if we could identify what facilities we have, we 

would be in a position to expedite deployment in rural America and 

lower the cost of deployment while we are at it. 

Mr. MCNERNEY. So the initial phase, then, would be just to identify existing facilities. 

Ms. ROSENWORCEL. I think it would be important for us to identify existing facilities. I also think it would be important for us to 

68 

develop a master contract with the GSA so that the private sector 

that is interested in deployment would have a single contract they 

could use. And I also think we should consider shot clocks, which 

would reduce the amount of time that the Federal Government had 

to respond to those requests for deployment. 

Mr. MCNERNEY. OK. Thank you. 

Mr. O’Rielly, you mentioned that Federal Government user fees 

are needed. Would you expand on that a little bit? 

Mr. O’RIELLY. So it is a suggestion I said. My colleague and I 

have had a good, healthy discussion over the years regarding in 

terms of incentives that may provide. I also think you need to provide a mechanism to force Federal users to relinquish spectrum, 

and I think that one way to do that is impose a spectrum fee. 

So we put the opportunity cost to the spectrum for the Federal 

Government users on an annual basis, and, therefore, they have an 

incentive to decrease how much they use. 

Mr. MCNERNEY. Thank you. 

I was certainly interested in the comment on high-frequency 

spectrum, but we will have to put that one off. 

Thank you, Mr. Chairman. I yield back. 

Mr. LATTA. Thank you very much. 

The gentleman’s time has expired, and he yields back. 

The chair now recognizes for 5 minutes the gentleman from 

Texas. 

Mr. OLSON. I thank the chair. 

And welcome to our friends from the FCC. 

I am going to talk about privacy and the Enforcement Bureau 

this afternoon. I want to ask about what I call a what-the-heck moment I had back home. 

About 2 weeks ago, Chairman Wheeler, you were on the Charlie 

Rose show, and you shared that in the next several months the 

FCC would address privacy of the networks. You stated, ‘‘We need 

a voice in the collection of information about us,’’ end quote. Those 

10 words set off an onslaught of what-the-heck questions from back 

home. 

So, Commissioner O’Rielly, I may be mistaken here, but doesn’t 

the FTC have jurisdiction over the privacy of the networks, not the 

FCC? Are you concerned about the takeover, mission creep of the 

FCC getting involved in the FTC’s business? 

Mr. O’RIELLY. So, as the result of our net-neutrality decision, we 

now have an issue regarding the privacy of networks, broadband 

networks, and the treatment of them under, as my colleagues highlighted, section 222. 

I am extremely concerned about that and have highlighted that 

for a considerable amount of time and what it can mean for two 

different regulatory agencies to have oversight over similar information and that providers that operate on both sides of the equation will be stuck with two different regulators fighting over each 

other. The MOU is an attempt to try and say that we are going 

to cooperate, but the different treatment of the same data is going 

to be problematic, in my opinion. 

I have also highlighted why I think that our expertise on the 

subject matter is pretty dormant and lacking compared to the FTC. 

Mr. OLSON. Mr. Pai, your comments, sir? Same issue. 

69 

Mr. PAI. I would agree with Commissioner O’Rielly on that. 

And I think it is also critical to remember that our authority, as 

granted by Congress, is extremely limited. Under section 222, telecommunications carriers, backed up by the FCC’s rules, have a 

duty to protect customer proprietary network information. That is 

a very narrow category of information, such things as your telephone number or what service you subscribe to. It is not the vast 

array of information that people think about when they think 

about privacy. 

And so I worry, as well as Commissioner O’Rielly has suggested, 

that the agency’s newfound zeal to enforce these privacy mandates 

may bleed over to edge providers. If you like something on 

Facebook, is that, sort of, a consumer piece of information that consumers would expect to be private? It may well be, in which case 

the FCC would have the incentive and ability to get into that 

space. 

Mr. OLSON. I share those concerns. 

Any comments, gentlemen, about this MOU that came out yesterday between the FTC and FCC? Any comments about that? 

Mr. PAI. I agree with what Commissioner O’Rielly has said, both 

in terms of process, the fact that all of us found out about it yesterday, and in terms of substance, that the MOU wouldn’t have been 

necessary if we had each stayed within our lanes and let the FTC 

handle what it is statutorily empowered to do. And if we focused 

on building out broadband to a lot of these areas as opposed to regulating the network heavily, this entire MOU would have been obviated. 

Mr. O’RIELLY. There is one sentence or at least one clause in 

here that just highlights the exact problem I have indicated. It 

says, ‘‘... Including FCC’s authority over activities engaged in by 

common carriers and by non-common carriers for and in connection 

with common-carrier services.’’ 

The scope of that is extremely broad. ‘‘By non-common carriers 

for and in connection with common-carrier services.’’ There is no 

limiting principle on that concept. I think that is very problematic. 

Mr. OLSON. Again, what the heck? 

And then about the Enforcement Bureau, the rise of the Enforcement Bureau, the current head was quoted last April in the National Journal as saying this: ‘‘Generally speaking, I have found 

that most companies want to do the right thing. And when it’s 

clear that something is impermissible, they generally don’t do it,’’ 

end quote. He said, ‘‘When it’s clear, they generally don’t do it.’’ 

But then he said: I’m almost always working in a gray area. 

‘‘Clear’’ to me means black and white. ‘‘Gray’’ is gray, nebulous. 

That gray area has earned him the title from the National Journal 

of ‘‘the FCC’s $365 million man.’’ Back home, again, people say, 

what the heck? 

So my question for you, Mr. O’Rielly and Mr. Pai, is: How does fines totaling $365 million help consumers, promote innovation and 

investment? How come they should have that role instead of Congress? 

Mr. PAI. That is a good question, Congressman. I suppose those 

companies should be grateful to the extent that the agency was 

generous. In the Ortel case, for example, it said that the FCC had 

70 

the authority to fine those companies $9 billion, but, out of the 

goodness of its heart, it was only going to fine them $5 million. But 

I think, in a lot of cases, it is simply a number drawn out of thin 

air. 

And in this regard, I tend to be old-fashioned. I think, before you 

enforce a rule, you have to have a rule. If you are going to pick 

a number, it should have some grounding in objective fact and, you 

know, precedent. That is just not the way the enforcement operation works anymore. 

Mr. O’RIELLY. Can I comment on top of that? And I highlighted 

this in my testimony. If you see some of the citations that we 

issued against First National Bank and Lyft, we didn’t provide 

them any kind of notice that they were even coming. They didn’t 

even know what was happening. 

So the idea that you referenced, where they are working with the 

carriers and trying to make sure that they do the right thing, these 

weren’t carriers; these are non-carriers—had no idea what was 

coming their way, and there was no communication from the Commission. 

So I agree with my colleague’s just point. These numbers are picked out of the air. We are not going to see $365 million. It is 

great for a press release, but it is not going to actually develop. 

Mr. OLSON. And that is very frightening for the market. 

One final question. You guys are—— 

Mr. WHEELER. Could I—— 

Mr. OLSON. I only have a little time here. Sorry, Commissioner 

Wheeler, but I have one last question. 

You all are in charge of the bureau, the Enforcement Bureau. 

Let’s play like you are grade school teachers, you give them grades. 

What grade would you give them, A through F? 

Mr. WHEELER. A. 

Mr. OLSON. A. 

Ms. Clyburn? 

Ms. CLYBURN. A. 

Mr. OLSON. Ms. Rosenworcel? 

Ms. ROSENWORCEL. A. 

Mr. OLSON. Mr. Pai? 

Mr. PAI. Not passing. 

Mr. OLSON. Mr. O’Rielly? 

Mr. O’RIELLY. A fine individual but a D-minus. 

Mr. OLSON. D-minus. 

Thank you much. I yield back. 

Mr. WHEELER. Let me say that we worked with the attorney general of Texas on that $353 million settlement. It was billions of dollars that were crammed onto the bills of millions of subscribers 

across the country. And of that $353 million, some went back to the 

State of Texas, as the AG insisted, and to other States. But $267 

million went back into the pockets of consumers who had been 

bilked because they were charged for things they did not buy. 

That is rational enforcement. That is the kind of job I think that 

all consumers expect us to be doing. Millions of people, billions of 

dollars, done in conjunction with all 50 State AGs. 

Mr. OLSON. I hear you, but—— 

Mr. LATTA. The gentleman’s time has expired. 

71 

Mr. OLSON [continuing]. Pay this money right now. Yes. Again, 

we don’t have that. You guys should not have that weapon. You 

should be working with our governors, our attorney generals. That 

is my interest. 

Mr. LATTA. Thank you. 

The gentleman’s time has expired, and he yields back. 

The chair now recognizes the gentlelady from Colorado for 5 minutes. 

Ms. DEGETTE. Thank you, Mr. Chairman. 

Well, Chairman Wheeler, I wanted to ask you, with respect to 

these recent enforcement efforts, the recent ones, what is your view 

of the FCC’s authority vis-a AE2-vis your ability to take these efforts? 

Mr. WHEELER. Thank you. I think we have the responsibility and 

the authority as granted in the act. 

And the interesting thing, what we are hearing here is, so we 

have 19 notices of apparent liability this year. The average annual 

notice of apparent liabilities by the last Republican administration 

of the FCC was an average of 215 a year. 

Ms. DEGETTE. Thank you. 

Now, yesterday, the FTC and the FCC announced a memorandum of understanding for continued cooperation on consumer 

protection. And this MOU mentioned that the agencies are going 

to engage in joint enforcement actions. So are there some specific 

areas where you think that consumer protection is particularly at 

risk and where this cooperation is going to be especially beneficial? 

Mr. WHEELER. Thank you. 

The other thing that is key to know about that MOU is that it 

replaced the previous MOU. This is not some unique relationship. 

Ms. DEGETTE. Right. It didn’t just come up out of thin air. 

Mr. WHEELER. And so what we have always tried to do is to say, 

OK, what are the lanes, and where do we cooperate? Because our 

authorities abut with these other. And I think we have an excellent 

working relationship with the FTC, and we were able to codify it 

in this MOU. 

Ms. DEGETTE. And are there some specific areas in which you 

think you can cooperate that will be beneficial? 

Mr. WHEELER. So, for instance, on the issue of the cramming that was discussed a moment ago, the $353 million fine, we have 

worked with the FTC on that. It is clear that the FTC has authority over the non-common-carrier—— 

Ms. DEGETTE. I only have 5 minutes. 

Mr. WHEELER [continuing]. Activity of common carriers. 

Ms. DEGETTE. Are there other areas that you think—— 

Mr. WHEELER. FTC has authority over the—— 

Ms. DEGETTE. Cramming. Are there other areas you are going to 

focus on? 

Mr. WHEELER. Yes. 

Ms. DEGETTE. What are they? 

Mr. WHEELER. So, for instance, they have authority over noncommon-carrier activities of common carriers. 

Ms. DEGETTE. OK. 

Now, there are 14 months left in the Obama administration, and, 

obviously, the Commission has a lot of pending actions and rules. 

72 

One thing I think the Commission should focus on completing is 

any further actions on the Satellite TV Extension and Localism Act 

reauthorization that this subcommittee authored last Congress. 

In that act, Congress directed the Commission to prepare a report on downloadable security capabilities for pay-TV content. Now, 

what I understand is that a technical advisory group has completed 

its report, and some stakeholders are seeking a rulemaking that 

would require changes to the set-top boxes used in cable, IPTV, and 

satellite TV providers. This is something Mr. Doyle was talking 

about a little bit. 

One of the main issues we hear about from consumers over and 

over again is that customer service can be complicated to navigate 

and also onerous. And so a lot of us feel like we need to protect 

consumers, while at the same time giving providers and content 

creators the flexibility they need to adapt to changing business 

models. 

So I am wondering if the Commission has considered, if leased 

set-top boxes are responsible for their own customer service, that 

could cause a lot of confusion. 

Mr. WHEELER. So, thank you, Congresswoman. 

The comment period on the recommendations of the DSTAC report ended last week. I don’t know if this was an issue that was 

raised in the comments. I would suspect so. And we have not fully 

worked through those comments. 

Ms. DEGETTE. Well, once you do, I would appreciate it if you 

would supplement your testimony so that we could get an answer 

to that. 

Now, I, lastly, want to touch on the special access issue. Many 

competitive telephone providers use the physical infrastructure of 

incumbent carriers to provide telecom services to businesses 

through an arrangement called ‘‘special access.’’ 

The FCC has been considering updating the special access rules 

for decades, as some of us on this committee know, and it has recently completed an extensive data-gathering process to inform 

changes to the rules. 

I am wondering, Chairman Wheeler, if, now that the Commission 

has undertaken such a significant effort, will this be a priority for 

the FCC during the remainder of this administration? 

Mr. WHEELER. Yes, ma’am. 

Ms. DEGETTE. Thanks. 

I yield back. 

Mr. LATTA. Thank you. 

The gentlelady yields back. 

And the chair now recognizes the gentleman from Kansas for 5 

minutes. 

Mr. POMPEO. Thank you, Mr. Chairman. 

We have heard from four Commissioners today, Mr. Wheeler, 

that they are getting late information, incomplete information with 

respect to Enforcement Bureau practices. 

Your explanation implied somehow that they were untrustworthy 

or incapable of handling the sensitive information. I think that is 

counterfactual. I think they, all four, are cable people, highly capable of handling that information. And I also think it is inconsistent 

with how this Commission ought to operate. 

73 

And so I would certainly urge you to change that practice and 

would urge this committee to do all that we can to make sure that 

you do. 

Mr. WHEELER. Well, I would hope that I was not giving an impression that they are untrustworthy. As Commissioner Clyburn 

said, they are briefed every 2 weeks by the Enforcement Bureau as 

to—— 

Mr. POMPEO. Thank you. I don’t have much time. It was certainly the implication that I heard from you. Perhaps I got it 

wrong. 

I want to talk about competition in the cybersecurity world. I 

spend a fair amount of time on this in my role on the Intelligence 

Committee and here on this subcommittee. 

Not too long ago, you were talking about network providers, Mr. 

Wheeler, and you talked about a common set of standards for 

cybersecurity. 

Mr. WHEELER. Yes, sir. 

Mr. POMPEO. My judgment is that would make it easier for hackers. If you had a common set of standards, it is easier to attack. 

These businesses, these network providers, are in the business of 

providing secure, reliable connectivity. That is how they operate 

their business, how they make money. 

Why is it you think you can develop a set of standards that 

would be superior to what AT&T or Sprint or Verizon or any of the 

others might be able to accomplish in the world of cybersecurity? 

Mr. WHEELER. We didn’t develop them. They developed them. 

What we did was provide a coordinating body. This was a multistakeholder process where everybody sat down and put together 

the best heads and said, what are the kind of processes that we all 

need to make sure that we have in place, and how do we monitor 

those processes so that we know, are they being done, A, and, B, 

as you just suggested, the hackers are always working ways 

around, and how do we keep up with that. 

Mr. POMPEO. Right. It makes no sense to me for a common set 

of standards to be a regulatory tool that the FCC issues. It just 

makes it simple. 

Mr. WHEELER. We have not issued them, sir. It is not a regulatory tool. 

Mr. POMPEO. Great. I am glad that you have now committed to 

not doing that today. 

Mr. WHEELER. No, let me—— 

Mr. POMPEO. I appreciate that. 

Mr. WHEELER. We have a process that was developed in conjunction with—it is not developed as a rule, OK? It is flexible. It is designed to be flexible—— 

Mr. POMPEO. Great. 

Mr. WHEELER [continuing]. For the very reasons you are talking 

about. 

Mr. POMPEO. I am thrilled. 

You talk about competition all the time. The IP transition is supposed to make sure we have the most updated technology. And yet 

the Commission, when it decided to impose requirements that carriers provide IP-based wholesale replacement services to competiVerDate Nov 24 2008 12:18 Jun 01, 2016 Jkt 037690 PO 00000 Frm 00079 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-101 CHRIS
74 

tors, the fiber facilities, that you said you required, quote, ‘‘reasonably comparable to those of legacy services.’’ 

Why would you create what appears to me to be a real disincentive for deploying new facilities and new services? 

Mr. WHEELER. Thank you, sir. 

Because of the fact that you don’t want a situation where regulation is encouraging the people who are currently using competitive 

facilities to not be able to have equivalents. 

So if I am selling a service to you and it is based on copper and 

suddenly the carrier decides, I am taking the copper out or shutting it down, I need to be able to continue to provide a service to 

you. And so, if that migrates over into fiber and IP, I ought to still 

be able to have a relationship with that carrier so that I can continue to provide the service to you. 

Mr. POMPEO. Commissioner Pai, do you agree with that analysis 

in terms of the disincentive it creates for build-out? 

Mr. PAI. I don’t, Congressman. 

And I think you put your finger right on the concern. The notion 

that the government should force one company to stay in a business that it doesn’t want to be in for the benefit of another company is the very definition of intrusive government intervention. 

Instead, we should recognize that the marketplace is much more 

competitive, that cable companies are deploying metro Ethernet, 

that wireless is increasingly an alternative, and get out of this 

business of, you know, sort of, Depression-era regulation of a marketplace that simply isn’t the way it was back in the 1930s. 

Mr. POMPEO. You actually made the case more articulately than 

I did. Thank you. 

Mr. WHEELER. But nobody is saying that you should stay in a 

business you don’t want to be in. What the rule says is that you 

can’t shut somebody off without offering them the same kind of 

service in your new technology. 

Mr. O’RIELLY. Well, and the rule also states, Congressman, that 

you can’t change your services without our permission, which we 

will never give you. 

Mr. WHEELER. Which has been the rule forever. 

Mr. POMPEO. Right. 

Mr. WHEELER. That is in 214. 

Mr. POMPEO. Would you agree we should that rule? 

Mr. WHEELER. Section 214—— 

Mr. POMPEO. But, no, I am asking—no, I understand the history. 

Mr. WHEELER. Section 214—— 

Mr. POMPEO. So it has not only been there a long time, but you 

like it. 

Mr. WHEELER. Section 214 has been the bedrock of telecommunications policy for the last 80 years. 

Mr. POMPEO. Chairman Wheeler, have you read the reports, Reuters reports, about WCRW and its connection to control by Chinese 

entities? 

Mr. WHEELER. Yes, sir. 

Mr. POMPEO. Tell me what the FCC is doing about that and what 

your position is with respect to that particular station that is airing 

pro-Chinese communications here in the United States. 

75 

Mr. WHEELER. We have an investigation going on to find out, 

with the representations that have been made along the way as 

they filed for increases in power and other kinds of things. We 

learned about it through the Reuters report, just as you did. 

Mr. POMPEO. Great. And so I assume, because there is an investigation going on, there is nothing more you will share with me this 

morning. Is that correct? 

Mr. WHEELER. Thank you, sir. 

Mr. POMPEO. Great. Thank you. 

I yield back the balance of my time. 

Mr. LATTA. The gentleman yields back. 

And the chair now recognizes the gentleman from Kentucky for 

5 minutes. 

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

Thanks to all the Commissioners for their testimony and appearance. 

A couple years ago, I was in a middle school in my district, which 

is Louisville, Kentucky. And it is a school that is not atypical in 

an urban setting. Ninety-five percent of the kids were on free and 

reduced lunch. And I asked the principal what percentage of her 

students she would estimate had access to the Internet at home. 

She said probably 10 percent. And, you know, that breaks your 

heart because you know those kids are lost, particularly if they are 

already in middle school. 

So what we have been trying to do in Louisville is—broadband, 

expanded broadband is great. Wireless technology is great. But 

there are families who can’t afford $10 a month for whom 

broadband means nothing because they don’t have a computer, 

whose only access might be through the phone, and so forth. 

So we have been trying to do a local initiative to try and just create in some neighborhoods public WiFi, free WiFi, so kids could at 

least be able to have it, whether they have a tablet or a phone. And 

AT&T and others have been very helpful in trying to accomplish 

that. 

So I would just throw that out as—I know some of you are sensitive to this. But as you consider expanded access, that is a critical 

consideration. 

Secondly, earlier this year, I introduced the Keep Our Campaigns 

Honest Act, which would require the FCC to use its existing authority to require disclosure of those who are funding campaign 

spots. 

We just concluded a campaign in Kentucky in which the vast majority of all the ads run for both gubernatorial candidates were run 

by outside groups. Nobody knows who they were. Nobody still 

knows who they were. I would say that my constituents’ reaction 

was that, if there were a lot of Styrofoam bricks available, they 

would have bought as many as they could have afforded. The outrage was palpable. 

So, once again, I would request that the Commission consider 

that. We are going into a campaign that has already started with 

anonymous ads. And this is something that I think is a high priority for Americans, and it is certainly for, I think, the benefit of 

democracy that people know who they are being influenced by. 

76 

I know Chairman Walden has a problem with the KOCH Act, as 

we call it, because he says it would require too many donors to be 

listed. But I think the Commission could do something; say, anybody who funded more than 25 percent of the ads, so, at the most, 

you would have four people identified in the ad. But, again, I think 

this is critical, and I would urge you to proceed on that. 

And, finally, a question that I have to ask because the person I 

live with would not welcome me back unless I did. And I am new 

to this subcommittee and relatively new to the committee, so I may 

have missed something, but where does the implementation of the 

requirement on volume of ads in television shows stand? Because, 

anecdotally, it seems that it has not been implemented very extensively. 

I would throw it open to anybody. Chairman? 

Mr. WHEELER. So, first of all, I understand the reporting-to-ahigher-authority challenge that you face. 

And, you know, the interesting thing that is going on, I can’t answer specifically—and I will get something for the record for you— 

but the interesting thing that we are now seeing is that there is 

actually a decrease in the number of ads on most of the major networks right now, as they are feeling the pressure from online competition and people not wanting to sit through ads. 

And that is the marketplace operating, and that is an encouraging thing. I am not sure what an agency’s role should be in saying there should be this many ads, but—— 

Mr. YARMUTH. No, I am not talking about the frequency, the 

number of ads. I am talking about the sound volume. 

Mr. WHEELER. Oh, the sound. Oh. 

Mr. YARMUTH. The sound volume. 

Mr. WHEELER. Yes, Commissioner Clyburn has just passed me a 

note saying—— 

Mr. YARMUTH. Thank you. 

Ms. ESHOO. Would you yield just for 2 seconds? 

Mr. YARMUTH. Sure. I yield. 

Ms. ESHOO. It is going to be on my tombstone as the only thing 

that people in the country know me for. But thanks for asking 

about it. 

Mr. YARMUTH. And I actually notice that there are some commercials, actually, where the volume drops. And I don’t know whether 

that is intentional, somebody trying to get people to pay more attention or not. But I am just curious as to where the enforcement 

mechanism is or whether it is being enforced. 

Mr. WHEELER. I would be happy to get back to you on that. 

Mr. YARMUTH. Thank you very much, Mr. Chairman. I yield 

back. 

Mr. LATTA. Thank you. 

The gentleman yields back the remainder of his time. 

And the chair now recognizes the gentleman from southeastern 

Ohio for 5 minutes. 

Mr. JOHNSON. Thank you, Mr. Chairman. 

And I thank our panel members for being with us today. 

Chairman Wheeler, as you know, we had concerns about your 

proposal to relocate the 200 servers from your headquarters to 

West Virginia. We sent you letters to that effect. Those concerns 

77 

were not with the purpose of the move but the disruption that it 

would cause to operations and the risk of data loss. 

We have had a number of open inquiries and investigations on 

the FCC, and we are still waiting on some of those documents to 

be produced. 

So, according to the materials that you provided in response to our letters, you were permitted, at your request, to reprogram $8.5 

million for this effort. How much did the move actually cost? Did 

it cost $8.5 million? 

Mr. WHEELER. I don’t know that off the top of my head. 

Mr. JOHNSON. You don’t know the answer for that? So you don’t 

know whether it was more? Less? 

Mr. WHEELER. I can get you—— 

Mr. JOHNSON. Can you get me that, please? 

Do you have a plan for where you plan to move—if it didn’t cost the $8.5 million, do you have a plan for where you intend to put 

the surplus that you asked for? 

Mr. WHEELER. I don’t know that it exists. 

Mr. JOHNSON. OK. So you will get that back for the record? 

Mr. WHEELER. Yes. 

Mr. JOHNSON. All right. 

Well, suffice it to say the move didn’t go as smoothly as we were 

told it would. You ran into problems with cabling that were attributed to the contractor. And the move took an additional 3 days, according to senior FCC management. 

According to at least one press report, employees were told to 

stay at home when the problems were encountered, and you were 

unable to get all the systems back up and running in the time that 

you allotted. Is that true? 

Mr. WHEELER. Yes, sir. 

Mr. JOHNSON. OK. 

According to another report, a senior FCC manager stated, ‘‘We 

could have always asked for more time up front, possibly padded 

our schedules. Instead, we chose to be ambitious in our timelines 

because that is what a startup mentality culture does.’’ 

So the way I read that statement is, rather than appreciate the 

impact of taking the agency off line on other organizations, agencies, regulated entities, and the public, a decision was made to go 

for the sound bite. Am I reading that wrong? 

Mr. WHEELER. Yes, sir. 

Mr. JOHNSON. OK. 

Well, then, didn’t the FCC have the final say on the plans for the 

move? How did you allow this to happen? 

Mr. WHEELER. No, I think that this was a question of what is 

a logical way of doing it—— 

Mr. JOHNSON. I am an IT guy, Chairman Wheeler, and I have 

been doing implementations for a long time, and any planning up 

front includes planning for things like this. 

Mr. WHEELER. I am an IT guy, too. I agree. 

Mr. JOHNSON. Did you guys have that in your consideration? 

Mr. WHEELER. Yes, sir. And we built in, and it was wrong. 

Mr. JOHNSON. OK. Good. So you acknowledge that that was a 

failure. 

Mr. WHEELER. But I must say—— 

78 

Mr. JOHNSON. Good. 

Mr. WHEELER [continuing]. I think that our staff is fabulous—— 

Mr. JOHNSON. Let me move on. Let me move on, Mr. Chairman. 

Does the FCC have in place a policy on the approval and the use 

of social media and Web 2.0—for example, using Twitter and 

YouTube? Such a policy would seek to insulate the FCC from cyber 

threats and social engineering, would it not? 

Mr. WHEELER. I am sorry, do we have—— 

Mr. JOHNSON. Do you have a policy on the approval and the use 

of social media and Web 2.0, like Twitter and YouTube? 

Mr. WHEELER. On our—— 

Mr. JOHNSON. On your employees. 

Mr. WHEELER. Yes, we have a policy. 

Mr. JOHNSON. You do. 

Does the FCC have general guidelines for use of these technologies for FCC employees in their official capacities, in their responsibilities of FCC employees? 

Mr. WHEELER. I believe so, that it said use it in your official capacity. 

Mr. JOHNSON. You say you believe so. You do, or you don’t? 

Mr. WHEELER. No, I believe so. And I believe that the counsel is 

to use it appropriately in your official capacity. 

Mr. JOHNSON. Do these guidelines extend to the use of these 

technologies for FCC employees in their unofficial capacity? 

Mr. WHEELER. This is a question of the use of FCC facilities for 

unofficial activities—— 

Mr. JOHNSON. In their unofficial capacity—— 

Mr. WHEELER. Yes, sir. 

Mr. JOHNSON [continuing]. Are there guidelines on how FCC employees should be using those kinds of technologies? 

Mr. WHEELER. Yes, sir. 

Mr. JOHNSON. Can you describe to us what those policies are? 

Mr. WHEELER. You are supposed to have—you are using this for 

official purposes. I believe that there have been actions taken 

against some employees who didn’t. I believe that there have been 

Office of Inspector General inspections in some situations and that 

people have lost their jobs. 

Mr. JOHNSON. OK. 

Well, are you familiar with the several videos posted online memorializing the server move? Have you seen some of those videos? 

Mr. WHEELER. No, sir, I haven’t seen those. 

Mr. JOHNSON. Well, in these videos, the Commission revealed 

several pieces of non-public information, including the names and 

license plates of some FCC employees, the types of servers the FCC 

is using to store important and sensitive data, and many pictures 

of the specific setup the FCC has at its new data center. 

Chairman Wheeler, it is a little hard for me, as an IT professional, to take seriously the FCC as an agency that wants to be a 

privacy and cybersecurity regulator when it sacrificed important 

cyber information, employee privacy, at the altar of good PR. 

Commissioner Pai, were you aware these videos were being posted? 

Mr. PAI. I was not, Congresswoman. 

79 

Mr. JOHNSON. Commissioner Clyburn, were you aware that the 

videos were being posted? 

Ms. CLYBURN. I was not. 

Mr. JOHNSON. Commissioner Rosenworcel? 

Ms. ROSENWORCEL. No. 

Mr. JOHNSON. No? 

Commissioner O’Rielly? 

Mr. O’RIELLY. No, sir. 

Mr. JOHNSON. OK. 

Mr. WHEELER. I was not either, sir. 

Mr. JOHNSON. You were not either? OK. 

Chairman Wheeler, our colleagues on the Committee on Appropriations are currently working on final provisions to fund our government agencies. Among the issues that they are tackling as part 

of that process is putting into law a ban on the FCC’s use of its 

authority to regulate rates for broadband Internet access service, 

consistent with your consistent statements to Congress that FCC 

won’t regulate, rate-regulate broadband. 

It is my understanding that Appropriations staff asked the FCC 

to provide technical assistance in drafting this provision and that 

the FCC refused to provide Congress with the benefit of your expertise. It is completely inappropriate for an agency of the government to refuse to engage in the provision of its expertise to the 

Congress. 

When will you remedy this situation? And can you assure that 

it will not happen again? Are you guys going to provide that information to the Appropriations staff or not? 

Mr. WHEELER. I was unaware of that situation, Congressman. I 

do think that it is unnecessary to put those kind of riders on the 

Appropriations—— 

Mr. JOHNSON. But that is not your call. That is not your call. 

That is Congress’ request. Are you going to provide the information? 

Mr. WHEELER. I was unaware of the situation—— 

Mr. JOHNSON. And are you going to provide the information? 

Mr. WHEELER [continuing]. It is not hard to figure out how to 

draft it. Yes, sir. 

Mr. JOHNSON. OK. All right. 

Mr. Chairman, my time has expired. 

Mr. LATTA. Thank you very much. 

The gentleman’s time has expired. 

And the chair now recognizes the gentlelady from New York for 

5 minutes. 

Oh, I am sorry. I didn’t see Mr. Butterfield come back in. 

Mr. BUTTERFIELD. Thank you, Mr. Chairman. 

Mr. LATTA. The gentleman is recognized for 5 minutes. 

I am sorry. 

Mr. BUTTERFIELD. Thank you, Mr. Chairman. 

Let me first direct my question to you, Chairman Wheeler. As I 

understand it, the congressionally mandated Downloadable Security Technology Advisory Committee report provides no assurances 

that, under the AllVid approach, unlike an apps approach, congressionally mandated protections like privacy and emergency alerts 

would be honored. 

80 

Now, tell me, how does that serve the public interest? 

Mr. WHEELER. I am not sure I understand the question, that this 

is—— 

Mr. BUTTERFIELD. Maybe I am reading it incorrectly. Let me try 

it again. 

As I understand it, the congressionally mandated Downloadable 

Security Technology Advisory Committee report—— 

Mr. WHEELER. Right. 

Mr. BUTTERFIELD [continuing]. Provides no assurances that, 

under an AllVid approach, congressionally mandated protections 

like privacy and emergency alerts would be honored. Does that 

serve the public interest? 

Mr. WHEELER. So, thank you, Congressman. 

Mr. BUTTERFIELD. Yes. 

Mr. WHEELER. AllVid was a half-a-dozen-years-ago kind of approach. I know people like to characterize what is going on as the 

resurgence of AllVid. 

What we did was to have a report that dealt with the security 

issues involved in fulfilling our section 629 responsibilities. And the 

comments on that just closed last week. 

Mr. BUTTERFIELD. OK. 

Mr. WHEELER. I am unaware, having not been through the comments yet or seen a briefing on the comments, of the kind of issues 

that you have raised having been raised in the comments, but I 

will certainly look for them. 

Mr. BUTTERFIELD. And if this approach does not honor licensing 

terms that are negotiated between programmers and MVPDs, how 

would that affect the diversity of programming available to consumers? 

Mr. WHEELER. So, as I said to Ms. Blackburn, one of the reasons 

that you had the security discussion to begin with was the protection of copyrights so that the kind of situation you talk about 

wouldn’t happen. 

Mr. BUTTERFIELD. Does that also give online video distributors a 

competitive advantage over traditional distributors, as OVDs would 

not be overburdened by the rules? Does it give a competitive advantage to the traditional distributors? 

Mr. WHEELER. I think we want to make sure—the question is— 

so there are online over-the-top services coming through on the 

Internet part of the cable that comes into your house. The question 

then becomes, on the cable part of the cable, if you will, what is 

the impact of the set-top box? 

And the important thing—because I know this committee is very 

interested in making sure that there is no thwarting of innovation 

through regulation. And we share that, as well. One of the questions that I hope was addressed—and I look forward to the comments—is what is the impact of the set-top box on thwarting the 

kind of opportunities for consumers that I think you were just talking about. 

Mr. BUTTERFIELD. All right. 

Let’s go to Lifeline modernization. Lifeline modernization appears to be on good track, but the question still remains, how do 

we create a wireless broadband solution under the current rate of 

$9.95? 

81 

Mr. WHEELER. So, yes, it is on track. And, thanks to Commissioner Clyburn for the work that she has been doing, Commissioner 

Rosenworcel and her calling us out constantly on the homework 

gap, we are going to address those problems. 

And I think that if you look at the kind of capacity that can be 

bought at that kind of price, that what we want to do is give people 

the opportunity to do that and to exercise their own choices along 

the way, as well. 

Mr. BUTTERFIELD. Can you speak to how you intend to promote 

competition among Lifeline providers at this price? 

Mr. WHEELER. Consumers should have choices. 

Mr. BUTTERFIELD. Finally, how will the FCC ensure that voiceonly still remains a service offering for eligible low-income consumers? 

Mr. WHEELER. It is important. 

Mr. BUTTERFIELD. All right. The next question would take longer 

than 40 seconds, so I am going to stop right there and yield back. 

Mr. LATTA. Thank you very much. 

The gentleman yields back the balance of his time. 

And the chair now recognizes the gentleman from Illinois for 5 

minutes. 

Mr. KINZINGER. Thank you, Mr. Chairman. 

And thank you all for being here today and having a good time 

with us. We appreciate it. 

Mr. Chairman, before I get started with my questions, I am 

going to ask unanimous consent to include in the record a letter 

from the Illinois Chamber of Commerce on the need for a regulatory approach at the FCC that fosters investment and innovation 

in the deployment of technology. 

Mr. LATTA. So ordered. 

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

Mr. KINZINGER. Chairman Wheeler, I understand that the FCC 

has established a broadcast reimbursement deadline of 39 months 

after the auction. If the Commission plans to repack up to 1,100 

local TV stations, there is a reasonable question about whether 

that 39 month deadline is technically feasible with so few tower 

crews, structural consultants, a lack of antenna manufacturing capacity, among other things. 

Even if we assume that all of those issues are resolved, there is 

still the outstanding issue of whether or not the relocation fund 

will be sufficient to pay for moving all of the broadcasters. You 

have responded to some of those concerns, stating that you have no 

reason to believe that the $1.75 billion broadcaster relocation will 

be insufficient to cover their relocation costs. 

That leaves a secondary question of, what if the fund isn’t sufficient to pay for the moving of all broadcasters? Again, your Commission stated that you believe the fund will be sufficient, but if 

it is not, the FCC has the authority to develop a prioritization 

scheme for reimbursement claims. What would this scheme entail? 

Mr. WHEELER. So, obviously, it is a hypothetical at this point in 

time—— 

Mr. KINZINGER. Right. 

82 

Mr. WHEELER [continuing]. And you would want to know what the realities of the situation are. The $1.75 billion is a number that 

set by the committee, and we will adhere to that. There is—— 

Mr. KINZINGER. Well, no, I understand. I have limited time, but 

if it is not sufficient. So you said you would prioritize. 

Now, are you saying that you would provide funding over the $1.75 billion? Or would you be pulling from one broadcaster to pay 

another? How is that going to work? 

Mr. WHEELER. So we are limited to $1.75 billion. One of the challenges of the whole auction is it is an auction, and you don’t know 

what the result is going to be. 

Mr. KINZINGER. Yes. 

Mr. WHEELER. And so we could sit here and hypothesize—— 

Mr. KINZINGER. But we need to hypothesize, to an extent, because—— 

Mr. WHEELER. I am sorry, what? 

Mr. KINZINGER. I said, to an extent, we need to hypothesize, because we have to plan, we have to understand so we are not surprised. 

Mr. WHEELER. And what that means is you have to be ready to 

be able to deal with the issue should it arise. 

Mr. KINZINGER. Yes. 

Mr. WHEELER. And that includes maybe coming back to Congress 

and saying, hey, there were some judgment calls here that didn’t 

work out. And so, that may be—— 

Mr. KINZINGER. But you see it—potentially on the table would be 

prioritizing broadcasters or maybe pulling from one—— 

Mr. WHEELER. So, actually, I think that the broadcasters—I don’t 

want to get in the situation where you are picking and choosing. 

Mr. KINZINGER. Yes. 

Mr. WHEELER. That is not the job of this agency. 

Mr. KINZINGER. No. 

Mr. WHEELER. I do want to be in a situation of adhering to the 

law, which says 1.75. 

Mr. KINZINGER. OK. 

Mr. WHEELER. And if that means we have to come back and say 

to the committee, hey, it didn’t work and here are the facts—but 

I haven’t got those facts to give you now. 

Mr. KINZINGER. OK. 

For the whole panel, let’s assume for a moment that the 39 

month deadline for relocating broadcasters can’t be met. And I 

know you assume it can. Let’s assume for a moment it can’t. Would 

you allow broadcasters to be forced off the air at that point? 

Mr. WHEELER. No. 

Mr. KINZINGER. I guess we will start with Mr. O’Rielly. 

Mr. O’RIELLY. No, sir. 

Mr. PAI. No. 

Ms. ROSENWORCEL. No. 

Ms. CLYBURN. Absolutely not. 

Mr. WHEELER. No. And the interesting thing is we have a 6- 

month extension that is provided for now. And the other thing that 

is fascinating to us is that, when the NAB participated in this, they 

told us they would only need 30 months. 

Mr. KINZINGER. OK. 

83 

Mr. WHEELER. And, we are all learning as this process goes on. 

Mr. KINZINGER. Yes. 

And not to skip back to the relocation fund, but one of the things 

I want to make sure, though, is one of the possibilities is not forcing broadcasters to then shoulder the cost of it if it is above $1.75 

billion, right? 

Mr. WHEELER. This is clearly no one’s goal. 

Mr. KINZINGER. OK. Well, that is good. It is not anybody’s goal; 

I just want to make sure it is not really there as an option. 

Mr. WHEELER. I understand, Congressman. 

Mr. KINZINGER. Commissioner O’Rielly, in a welcome sign of the 

kind of collaboration that we expect but seldom see on the Commission, you and Commissioner Clyburn both issued a joint statement 

of support for the public notice recently issued to remind USF recipients of expenditures that should not be supported by the universal service. 

Your joint statement went further and stated concerns with certain other expenses not related to the provision of service, such as 

for artwork and cafeterias, that may be permitted under certain 

readings of the rules. You both called on the Commission to initiate 

a proceeding to address these issues in the coming months. 

Commissioner O’Rielly, what would be the benefits of such a proceeding? 

Mr. O’RIELLY. So the vast number of rural carriers do a wonderful job in serving and completely don’t do some of these practices. 

But we have found that some providers have been doing a very interesting reading of our rules. We do not believe that the scarce 

universal service funding should go to things like artwork within 

the building of the provider or building a cafeteria for their employees. So we want the dollars to be spent on building out networks 

and providing service to consumers. 

Mr. KINZINGER. And, basically, everybody on the panel would 

agree, I think, this? 

Mr. WHEELER. Yes. 

Mr. KINZINGER. All right. 

Mr. Chairman, hopefully that is—— 

Mr. LATTA. Thank you very much. 

Mr. KINZINGER [continuing]. That is good input. And I will I yield 

back. 

Mr. LATTA. The gentleman’s time has expired. 

And also, the chair has heard that we might have votes around 

1:05 to 1:20. So if we can keep our questions at 5 minutes, I would 

appreciate it. 

And the gentleman from Vermont is recognized for 5 minutes. 

Mr. WELCH. Thank you very much. Sorry for my absence. 

First of all, I want to thank the Commission for the tremendous 

work that you do. There are very hard, contentious issues. In the 

hope that we have on this committee—Bob Latta and I, of course, 

started the Rural Working Group—and I know the hope on your 

Commission is that you would find ways to work together in a contentious time. 

But let me ask, Commissioner Pai, you had indicated your problem with the enforcement process now, and I heard you loud and 

84 

clear. I just thought I would ask Mr. Wheeler, I would give you an 

opportunity to respond to that. 

Because I assume all of you hope, against hope at times, that you 

can get a bipartisan votes. That eludes us on this panel more than 

we would like. It eludes you on your Commission more than you 

would like. 

But, Mr. Wheeler, I would like you to at least have an opportunity to respond to Commissioner Pai. 

Mr. WHEELER. Well, thank you. And, as I said, we have been following the processes that have been in place for the Commission 

for years and years and years. There are actually fewer notices of 

apparent liability that have been issued than when Commissioner 

Pai was in the General Counsel’s Office. So there have been some 

changes in that regard. 

We want to make sure the Commissioners continue to get briefed 

on a regular basis, as they always have. And we want to recognize 

that there are certain things that are law enforcement activities 

and certain things that are policy activities. 

Mr. WELCH. Yes. All right. Thank you. 

And, Commissioner Rosenworcel, I want to thank you. 

Commissioner Rosenworcel came up to Vermont. People were impressed. You might want to have her in Indiana. 

But you were talking about the homework gap. And that is, in 

fact, a big deal. What kind of progress are you making, and what 

can we do to be helpful? 

Ms. ROSENWORCEL. Thank you. I appreciate the question. And I 

appreciated the opportunity to head home to New England, too. 

I think the homework gap is the cruelest part of our new digital 

divide, but it is within our power to bridge it and fix it. We can 

update a low-income program known as Lifeline to make sure it 

supports broadband. We should focus in a laser-like way on households that have children who are in school. And we should also promote the availability of more unlicensed spectrum and WiFi. 

Those things will all make a difference, as will more public- and 

private-sector partnerships to help bring computers and broadband 

to students who are in school. 

Mr. WELCH. OK. 

And you also spoke in the beginning about ‘‘dig once.’’ 

I wonder, Mr. Pai and Mr. O’Rielly, that seems to me to be such 

a practical way to try to avoid cost and have the money spent really, Mr. O’Rielly, in the way you were suggesting, where other moneys were not properly spent. 

Is that something we can make progress on? Ms. Eshoo has been 

a leader on this. But I will start with you, Mr. Pai, and then you, 

Mr. O’Rielly. 

Mr. PAI. Thanks for the question, Congressman. 

I think, absolutely, there is bipartisan agreement here, as there 

is on this panel, on ‘‘dig once’’ and other policies like it. As I pointed out in my testimony, I think the six pieces of legislation that 

you have introduced and/or are considering are terrific. 

And I have seen that for myself. Just last week, I was in Hammond, Louisiana, stringing fiber along mud in the Bayou, and I 

heard firsthand how difficult it is to navigate around some of these 

regulatory obstacles. 

85 

Mr. WELCH. Well, Mr. Chairman, I hope we can really do that. 

Mr. O’Rielly? 

Mr. O’RIELLY. Yes, I support the legislation, but I think it may 

require Congress to—we can’t do it ourselves—require congressional action, and we support that. 

Mr. WELCH. OK. So you are really recommending to this panel 

that we do everything we can to do something sensible to save 

money and expand access. 

Mr. O’RIELLY. Absolutely. And there is a number of build-out 

ideas my colleagues and I have had, and we think those would be 

very hopeful. 

Mr. WELCH. All right. 

Mr. Chairman, I move the bill. We can get away with it. We are 

here. 

Mr. LATTA. Is the gentleman yielding back there? 

Mr. WELCH. I am not yielding. I still have another minute. 

Mr. LATTA. OK. 

Mr. WELCH. Mr. Wheeler, on the broadband speed, you know, 

there are two standards out there now, 10/1 versus 25/3. So that 

conflict is a conflict, and I am wondering if you can address that. 

Mr. WHEELER. Thank you, Congressman. 

Yes, 25 down and 3 megabits up is what we call table stakes, 

and it is available today to about 80 percent of the population. The 

problem is it is not available to 20 percent of the population, and 

how do we get there. 

So, first, you have to have universal service reform that makes 

sure that money is being spent to expand broadband. And then, 

secondly, you have to recognize that this is a growing process, that 

the most expensive part of building broadband is laying the fiber. 

After that, it is all electronics, and the cost actually declines. 

So how do we get broadband, good broadband, but not what we 

would like to see across the board, out first? And that is what we 

are saying. So we will support 10/1 as a minimum. But a lot of people are building more. I was at the NTCA convention and met a 

gentleman from North Dakota who said that he serves 14,000 

square miles, has 4,000 subscribers, and he has fiber to the home. 

Mr. WELCH. That is great. 

I see my time is up, but I just want to at least thank—I can’t 

ask my question—Commissioner Clyburn, who also came to 

Vermont and gave an outstanding presentation to all our utility 

folks. 

So thank you very much, Commissioner. 

Mr. LATTA. Thank you. 

The gentleman’s time has expired. 

The chair now recognizes the gentleman from Missouri for 5 minutes. 

Mr. LONG. Thank you, Mr. Chairman. 

Chairman Wheeler, I am going to channel my inner Chairman 

Dingell here and ask for a yes-or-no answer to a simple question. 

Isn’t regulating broadband providers, but not anybody else, going 

to create confusion or even a false sense of security among consumers that whatever rules apply to broadband providers will 

apply to whoever sees their information on the Internet, yes or no? 

86 

Mr. WHEELER. I am sorry, I didn’t understand what you were 

saying at the end. Whoever sees—— 

Mr. LONG. Shouldn’t consumers have the same protection on privacy issues, shouldn’t they assume that they have the same protection, whether they are going over a line or whether they are using 

a third party? Shouldn’t the protections be the same? 

Mr. WHEELER. There should be uniform expectation of privacy, 

yes, sir. 

Mr. LONG. OK. 

Even if you can’t or just don’t want to impose privacy obligations 

on other entities, what steps should other agencies or Congress 

take to ensure that consumers’ information is protected in a uniform manner on the Internet? 

Mr. WHEELER. Well, as you say, we have said that we will not 

regulate edge providers. And the FTC has moved with its own set 

of guidelines. The administration has its white paper. And I expect 

that what we do will be operating within those same kind of concepts so that there is some parity along the way. 

Mr. LONG. Regulating the edge providers differently. 

Mr. WHEELER. No, we will not be regulating the edge providers 

differently. 

Mr. LONG. You won’t. 

Mr. WHEELER. We will not. 

Mr. LONG. OK. 

Commissioner Pai, do you want to weigh in on this? 

Mr. PAI. Congressman, I think this is essentially the problem, is 

that if consumers are to have a uniform expectation of privacy, 

then it would seem to follow from that that everybody in the 

broadband ecosystem, from your Internet service provider all the 

way to the edge provider, should face the same regulations. 

Mr. LONG. Right. I mean, to me, that makes common sense, and 

that is what I am trying to get to. 

Commissioner O’Rielly, do you have any comment on that? 

Mr. O’RIELLY. I agree with my colleague’s point. I imagine that 

when this item is done we are going to have different regimes for 

different types of—based on the provider used or a third-party provider. And that is going to be problematic for consumers. 

Mr. LONG. OK. 

Chairman Wheeler, in STELA, this committee requested that the 

GAO, Government Accountability Office, study the impact of any 

phaseout of the compulsory copyright licenses for cable and satellite on the related provisions in the communications law. The 

GAO is currently conducting that study and has yet to report back 

to Congress on its findings. 

I have concerns with the FCC moving ahead and repealing exclusivity rules which are interrelated with these licenses before GAO 

has reported back to this committee and has made any predetermination as to the appropriate public policy decision. Is it necessary that the FCC phase out these rules now, which seems premature? 

Mr. WHEELER. Thank you, Congressman. 

STELA also required the Commission to begin a proceeding on 

retransmission consent negotiations. Exclusivity is an issue that 

87 

factors into that. I think that is the appropriate place to address 

it. 

Mr. LONG. OK. 

I will stay with you, Chairman Wheeler. I have a little time here 

left, I think. 

As you know, the committee has been very active in working to 

find ways to get more spectrum into the commercial marketplace 

to fuel the growing need for broadband. We have taken a series of 

legislative steps to make that happen, but the FCC plays a crucial 

role here also. 

One area where we can make quick progress is commercializing 

the spectrum of 1675 to 1680 megahertz. This spectrum has been 

the subject of a 3-year-old proceeding at the FCC, and both Congress and the administration have offered budget language encouraging its use for the wireless broadband by 2017. So how and when 

will the FCC complete these proceedings? 

Mr. WHEELER. For 16 gig? We are looking—— 

Mr. LONG. Yes. 

Mr. WHEELER. We are looking at all of the above-3-gig spectrum. 

I believe that we will—— 

Mr. LONG. 1675 to 1680 megahertz is what I am—— 

Mr. WHEELER. Megahertz? 

Mr. LONG. Yes. Not gig, megahertz. 

Mr. WHEELER. Sorry. I thought you were talking about the upper 

band. 

I can’t answer that question specifically, sir, and give you a time. 

I will be happy to get back to you. 

Mr. LONG. Yes, I would love for you to get back to my staff on 

that. 

And, as you know, this committee has been very active in working to find ways to get more spectrum into the commercial marketplace to fuel the growing need for broadband. We have taken a series of legislative steps to make that happen. But, like I say, you 

all play a crucial role. So if you could check that out and get back 

to me, I would really appreciate that. 

Mr. WHEELER. We certainly agree with the importance of doing 

that. 

Mr. LONG. I yield back. 

Mr. LATTA. Thank you. 

The gentleman yields back. 

And, also, the members see that they have just called our first 

votes, with about 13:49 left. 

And the chair now recognizes the gentlelady from New York. 

Ms. CLARKE. Thank you, Mr. Chairman. And I thank our ranking 

member, Ms. Eshoo. And I would like to thank our Commissioners 

for their appearance and responses today. 

Like many of you, I am encouraged, actually excited, about the 

recent signing of the bipartisan budget agreement, which included 

provisions of the Spectrum Pipeline Act of 2015 that is based on 

a draft that my office introduced. And I look forward to the FCC 

fulfilling the goals of this act and identifying and repurposing wireless spectrum from Federal to commercial uses. 

More spectrum can only translate into more opportunities for our 

Nation’s citizens, particularly those from historically underserved 

88 

communities where wireless broadband is often the only gateway 

to opportunities. 

On this point, I have a question related to increasing engagement for seasoned and aspiring entrepreneurs and businesses of 

color in the upcoming spectrum auction and beyond. But, prior to 

that, I would just like to say to Commissioner Clyburn, congratulations on the reform of the inmate calling services. This will help 

to mitigate a lot of the hardship millions of families across our Nation have faced in dealing with that service. 

But I would like to ask, do you see the FCC’s revamped designated-entity rules as sufficient enough to create opportunities for 

minority spectrum ownership? And what can the FCC do to enhance and incentivize secondary market transactions that have the 

potential to drive more diversity in minority ownership of commercial wireless spectrum? 

I was directing that to you, Commissioner Clyburn. 

Ms. CLYBURN. OK. Thank you very much. I appreciate it. 

A number of things that we have done in the past year and a 

half or so, I think, will stimulate the marketplace and the ecosystem. 

We repealed the attributable material relationship rule and the 

former defaulter rule because we recognize that, while well-intentioned, they were keeping businesses, particularly diverse businesses, out of the market. 

We also adopted a rural bidding credit, which will give more incentive to those in those particular areas, which is a twofer. It 

would, you know, stimulate more deployment in those particular 

areas, and it would allow for more opportunities in a smaller footprint. 

We also are looking at small-business incentives, bidding credits, 

that, again, would stimulate that type of investment and opportunities. 

And, of course, we are always looking for ways to stimulate secondary-market transactions. Again, a smaller footprint, in some 

cases, and a more laser-beam focus. 

And so we are looking at and continuing conversations with 

those who have great ideas to really do what we can to diversify 

the ecosystem for businesses of all sizes and businessowners from 

all backgrounds. 

Ms. CLARKE. Thank you. That is encouraging. We want to definitely stay focused on that. There have been some substantial 

losses, particularly in black communities, over the years, and we 

would like to see opportunities particularly for young, more inspired businessowners and entrepreneurs to really gain a foothold 

in this market. 

Shifting gears a bit, the FCC appears to have been focused on 

expanding online video platforms, but there still appears to be challenges in getting the content directly to the consumer, as evidenced 

in the current AllVid debate. 

So I want to drill down just a little bit and ask Chairman Wheeler: The proposal made by the AllVid proponents in your DSTAC 

proceedings requires a new box just to get the MVPD content to 

the new retail device. Instead of getting rid of boxes, AllVid reVerDate Nov 24 2008 12:18 Jun 01, 2016 Jkt 037690 PO 00000 Frm 00094 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-101 CHRIS
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quires an additional box. And I think you have heard colleagues 

commenting on this this morning. 

This is a concern on two fronts for consumers, increased box 

costs and increased energy costs, in addition to no guarantee of 

consumer protection. This seems out of step with today’s marketplace. 

Aren’t these increased costs and diminished consumer protections a concern for the FCC, as well? 

Mr. WHEELER. Thank you, Congresswoman. 

There has been a lot of talk today about AllVid, which is a halfdozen years old and apparently somebody has wanted to resurrect. 

We have just finished a comment period on the DSTAC requirement that was in STELA. It was finished last week. The making 

of conclusions from that is premature. 

We believe that section 629 says to us that we have the responsibility to assure that there is competitive choice in terms of navigation devices. DSTAC had several approaches as to how to do that. 

The decision about where you go from there is one that we have 

not yet made because the comments just closed last week. 

Ms. CLARKE. Well, let me just say this. I think it is clear that 

we need to monitor this very closely. Because there is no doubt, if 

two devices are needed, there is going to be an increase in energy 

costs. There is no doubt about that. 

Mr. WHEELER. It is also possible there could be no devices needed and there would be a reduction in cost. I mean, that is the interesting thing that we have to—— 

Mr. LATTA. And I am sorry to have to cut the Chairman off. We 

have—— 

Ms. CLARKE. Yes. No problem. I yield back, Mr. Chairman. 

Mr. LATTA [continuing]. About 7 minutes left on the roll here. 

And the chair now recognizes the gentleman from New York for 

5 minutes. 

Mr. COLLINS. Thank you, Mr. Chairman. I guess we will see if 

I can be a little bit brief. 

Mr. Wheeler, at the end of July, in this hearing room, I asked 

you about pirate radio. I am a New Yorker. That is a big issue certainly down State, even though I am from the Buffalo area. And 

I did send you a letter signed by the entire New York delegation—— 

Mr. WHEELER. Yes, sir. 

Mr. COLLINS [continuing]. And most of the New Jersey delegation, including Ranking Member Pallone. 

But, since then, I have continued to be disappointed. There have 

only been, as I understand it, five or six fines issued related to pirate radio. And it is such a small number, it is certainly the feeling 

within the industry that that has done nothing to address the serious issue, that we consider a serious issue, of the multiple pirate 

radio operators that continue to operate in the New York metropolitan area. 

So, you know, my contention is, you know, to be very direct, that 

you have paid this lip service and, frankly, little more than lip 

service. You know, you decimated the Enforcement Bureau. You 

have closed offices and eliminated field engineers in an effort you 

call consolidation. But I can tell you, coming from the business secVerDate Nov 24 2008 12:18 Jun 01, 2016 Jkt 037690 PO 00000 Frm 00095 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-101 CHRIS
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tor, and I do understand consolidation, you need results to go with 

it, and, in this case, there have been few to no results. 

So my staff called your Enforcement Bureau and said, ‘‘Can you 

give us an update on what is going on with pirate radio and the 

enforcement efforts?’’—directly to your Enforcement Bureau. I don’t 

know if you will be surprised to hear this. Their comment was, ‘‘We 

are not handling that. You will have to call Mr. Wheeler’s personal 

office to find out what is being done on pirate radio.’’ 

My perspective? That is an embarrassing runaround, disrespectful to my office for sure, that your Enforcement Bureau says, ‘‘We 

are not doing anything.’’ 

Mr. WHEELER. I agree with you, sir. 

Mr. COLLINS. So I would like you and would ask you to get back 

to us—— 

Mr. WHEELER. Yes, sir. 

Mr. COLLINS [continuing]. In particular to my staff, who came off 

of that phone call and you can imagine the comments that they 

made about what we consider to be lip service to pirate radio. And 

if nothing else, if that is all it is, tell us that is all it is. But I would 

very much appreciate not having to wait months to get a response 

on this, because I found that unbelievable, frankly. 

Mr. WHEELER. So do I. 

Mr. COLLINS. Well, good. So I will look—— 

Mr. WHEELER. Because the reality is, as I said in my statement, 

Congressman, there have been 280 enforcement actions that we 

have taken in the last 2 years under my chairmanship. And we 

have a joint task force that we are working with the NAB on this. 

And I suggested in my testimony that there were also some additional steps that Congress could take to help us deal with the landlords, because they are the ones who are facilitating this. And the 

pirate radio folks, you shut them down, they thumb their nose at 

you, and they go someplace else. 

Mr. COLLINS. No, we understand that piece. But we were quite 

frustrated by the—— 

Mr. WHEELER. I would be, too. 

Mr. COLLINS [continuing]. Very direct response—— 

Mr. WHEELER. I would be, too. 

Mr. COLLINS. So we will just jointly dig to the bottom. 

Mr. WHEELER. We will fix that. 

Mr. COLLINS. Now, the other thing—and I reach out to the industry and ask them to help me with some questions. I am sitting here 

at the bottom of the dais, and, usually, by the time, 30 other questions are asked. And I will tell you, what came back from me asking them to ask you was really a frustration they see right now in 

the investment side, actions that are a wet blanket and really having a negative impact on investments. 

But they also pointed out, from their perspective—and I don’t 

know whether this is a rhetorical comment or asking a question, 

but—what they see from the FCC as selective enforcement on the 

TTY issue, spectrum set-asides for companies who are not participating in the auctions, and onerous regulations extended to new 

technologies like streaming video that do nothing but discourage 

investments. 

91 

Mr. WHEELER. Thank you for asking. Let me see if I can tick 

them off real fast. 

Mr. COLLINS. All right. 

Mr. WHEELER. TTY. It is really interesting. AT&T asked for a 

waiver. We granted them the waiver. We called them and said, 

‘‘We are going to grant you the waiver.’’ 

They followed the next day with a letter saying, ‘‘Why haven’t 

you granted us the waiver? And, by the way, what about our competitors on this?’’ 

We went back to them, and we said, ‘‘Would you file a complaint 

so we can see if it is appropriate to take enforcement?’’ 

Mr. COLLINS. I am about to run out of time. 

Mr. WHEELER. They didn’t want us to do that. 

And, secondly, on over-the-top, we have started a rulemaking on 

that. The purpose of rulemakings is to learn. We learned the vast 

number of things that are developing very rapidly. And we have 

not moved forward on that notice of proposed rulemaking. And I 

don’t see, until the situation changes, that we would. 

And I forget your third. 

Mr. COLLINS. That is OK. My time has expired. 

Mr. LATTA. The gentleman’s time has expired. 

Mr. COLLINS. And I do look forward to catching up with you on 

the enforcement piece. Thank you. 

Mr. LATTA. The chair now recognizes the gentleman from Illinois 

for 5 minutes. 

Mr. RUSH. I want to thank you, Mr. Chairman. 

And I also want to commend the Commission and Commissioner 

Clyburn, in particular, for the capping on the predatory phone 

rates for our inmates across the country. 

But I wanted to ask the Commission in general, I want to raise 

a question and raise an issue that is affecting my city, Chicago, 

other urban areas all across the Nation, and this is on the issue 

of urban violence. 

There have been 2,587 shootings and 435 murders in Chicago so 

far this year—more than L.A. And New York City combined. And 

it is well-known that these gang leaders who are primarily perpetrating this violence, that they are using social media to advance 

their agendas and their conflicts. 

Knowing that the FCC has limited jurisdiction over Facebook, 

Twitter, and Instagram, is there anything within the realm of public safety that the FCC can use to help address and curtail this violence? Can and will the FCC add its important voice, its stature, 

to this dynamic discussion? 

Mr. WHEELER. Mr. Rush, the situation that you describe is, as 

you say, tragic. It is not dissimilar to what Mr. Barton raised a moment ago with regard to terrorist threats and terrorists using social 

media. 

We do not have jurisdiction over Facebook and all the other edge 

providers. We do not intend to assert jurisdiction over them. And 

I don’t believe that they are—as legitimate as your concern is, I 

don’t believe that we have the jurisdiction to do the kind of thing 

that you suggest. 

Mr. RUSH. That means that you don’t think that the FCC could 

weigh in on this in any way? 

92 

Mr. WHEELER. I am happy to use the bully pulpit. I am happy 

to talk to Mark Zuckerberg and others to raise this issue and to 

say, hey, this is important kind of thing, we need to be in this together. But we don’t have regulatory authority. 

Mr. RUSH. I am not seeking regulatory. 

Mr. WHEELER. OK. 

Mr. RUSH. I would grant you that I don’t believe that you have 

jurisdiction. But I think that there is a bully pulpit, that you and 

others may be able to address this issue. I am not trying—I don’t 

want to—— 

Mr. WHEELER. I will call Mark Zuckerberg this afternoon to raise 

the issue that you have raised and the issue that Mr. Barton has 

raised. And I am sure that he is concerned about it, as well, and 

he will have some thoughts. 

Mr. RUSH. Thank you. 

Ms. CLYBURN. Right quickly, sir. Good to see you. And thank you 

for the acknowledgement. 

One thing that we are acting on and working with law enforcement and other authorities are stolen phones, as people are still 

using throwaway phones and burner phones or whatever you want 

to call them to commit crimes. We are continuing to work—our 

Consumer and Government Affairs Bureau is working with our sister agencies and then, like I said, law enforcement authorities and 

mayors across this Nation to address that issue. So where we can, 

we will. 

Mr. RUSH. Thank you. 

Does any other Commissioner have anything to offer? 

Mr. PAI. Congressman, this doesn’t directly relate to social 

media, but one of the things that I was disturbed to find when I 

visited a maximum-security prison in Georgia recently was that the 

use of contraband cell phones is having a direct and severe effect 

on people outside of prisons. I heard about family members, witnesses, and others, crime victims, who, because of the use of contraband cell phones in prison, have faced threats, including to their 

very lives. 

And I think that is something where the agency, a couple of 

years ago, teed up a number of different ideas. And I think it would 

be appropriate for the agency to come to closure on that to help 

protect some of these people, disproportionately minority, who are 

getting, some killed or robbed or otherwise threatened by use of 

this technology. 

Mr. RUSH. Thank you, Mr. Chairman. I yield back. 

Mr. LATTA. Thank you very much. 

The gentleman yields back. 

Just to let everyone know, we are about 18 minutes into this 

vote, with about 230 that haven’t voted. 

And the chair recognizes the gentleman from Florida. 

Mr. BILIRAKIS. Thank you, Mr. Chairman. I will be as brief as 

I possibly can. 

Thank you for the Commissioners’ testimony today. I really appreciate it so much. 

Chairman Wheeler, as part of the Enforcement Bureau’s ongoing 

work, it is my understanding that there has been a letter of inquiry, or LOI, seeking information from a hotel chain on all of the 

93 

properties from, again, its name, the name of the hotel chain—including franchises, over which it may not have any legal authority. 

To your knowledge, does the Enforcement Bureau have any reason to believe there are violations of the Commission’s rules at 

these facilities? That is the first question. 

Mr. WHEELER. Thank you, Congressman. 

Typically, an LOI, a letter of inquiry, is sent when there is a belief that this is and they are seeking information to find out whether that belief is factual. 

Mr. BILIRAKIS. Based on the size of the request—again, all the 

properties—the cost to the hotel and loss of productivity and wages 

would seem to be quite high, I am sure you will agree, given the 

technical nature of the request, without any notion that this fishing 

expedition will bear fruit for consumers. 

Isn’t this exactly the kind of thing that a cost basis analysis 

would prevent from being unnecessarily imposed on, again, American job creators? Would you agree with that? 

Mr. WHEELER. Thank you. 

There have been multiple actions that we have brought against 

hotel chains because what they have been doing is jamming the 

signals of people like you and me in order—— 

Mr. BILIRAKIS. You are sure of that? You are certain of that? 

Mr. WHEELER. I am certain we have brought these actions and 

that is what was going on and that what has happened is that they 

have been forcing people to buy services from them instead of using 

the licensed services that we have authorized. And section 333 of 

the act says that we have a responsibility to protect the licensed 

services that we authorize. And—— 

Mr. BILIRAKIS. And it specifically states that in the act—— 

Mr. WHEELER. Yes, sir. 

Mr. BILIRAKIS [continuing]. With regard to WiFi. Is that correct? 

Mr. WHEELER. It is an appropriate service of the agency. 

And so I am unfamiliar with exactly the specifics that you are 

talking about here, but if there is a letter of inquiry that was sent 

out, I would imagine that there have been some indications of difficulties and WiFi access being blocked in contravention of the law. 

Mr. BILIRAKIS. You are assuming that. OK. Thank you. 

Commissioner Pai, there has been some renewed attention to the 

TCPA this summer. The FCC recently passed a package of declaratory orders, but I fear they didn’t impose real reforms to actually 

stop unwanted calls or help on this. And maybe it would cause unnecessary litigation. 

A statement from the Chairman about telephone townhalls had 

been quickly corrected after our last oversight hearing, within a 

few hours, I understand. I have a different question this time for 

this hearing. 

We talked about apps for customer relationship management and 

whether a smartphone is or can be an autodialer under the FCC’s 

majority’s interpretation. There are many small businesses in 

America, in my district as well, that rely on smartphones to run 

their businesses. 

I have a few questions. Yes-or-no answers would be greatly appreciated. 

Mr. PAI. Sure. 

94 

Mr. BILIRAKIS. If a small business owner has a smartphone and 

uses one of those apps, has that person violated the TCPA, in your 

opinion? 

Mr. PAI. Yes, according to the majority. 

Mr. BILIRAKIS. Could that person be subject to FCC enforcement 

action even for a misdial? 

Mr. PAI. Yes. 

Mr. BILIRAKIS. Unbelievable. 

Would that person be subject to the private right of action provided under the TCPA? 

Mr. PAI. Yes. 

Mr. BILIRAKIS. OK. 

Commissioner Rosenworcel, is this a result that you support? 

Ms. ROSENWORCEL. Well, let me be clear. I don’t like robocalls, 

and I think most people are not fond of them. So I think we should 

take any and all actions we can to prevent them, because those unwanted calls are not something that people are all that eager to receive. 

Mr. BILIRAKIS. However, we are not accomplishing our goal—— 

Ms. ROSENWORCEL. No, but let me speak to you exactly to what 

you were talking about with autodialers. 

The Telephone Consumer Protection Act was passed in 1991. In 

1991, an autodialer was a big, bulky piece of equipment. One of our 

challenges today is that we have to still use that law when we have 

software that can accomplish what that hardware did decades ago. 

And so I think the struggle that the agency has is trying to figure out how to manage with a statute that didn’t contemplate the 

digital world we live in today. 

Mr. BILIRAKIS. OK. Let me ask you again. Do you—— 

Mr. LATTA. I am sorry. The—— 

Mr. BILIRAKIS. OK. Yes, we have to go. 

Mr. LATTA [continuing]. Gentleman’s time has expired. 

Mr. BILIRAKIS. All right. I am going to submit something for the 

record. 

[The statement of Mr. Bilirakis follows:] 

PREPARED STATEMENT OF HON. GUS M. BILIRAKIS

I would like to register my disappointment in your October 22 order limiting the 

ability for jails to collect commissions on inmate phone calls. We’ve exchanged letters on this issue this year, and law enforcement officials in my district, like Sherriff 

Chris Nocco from Pasco County, continually inform me how important these fees are 

to their operations. 

Services like GED programs, parenting classes and industry certification training 

programs are solely funded by these fees, and now are at risk of termination. 

While it’s on questionable legal grounds that the FCC can even regulate intrastate rates charged by payphone service providers in the first place, the practical 

result of this order will cap rates in aggregate so that revenues won’t cover expenses 

at all. 

Reintegration services will disappear, and that’s a shame. 

Thank you and I yield back. 

Mr. BILIRAKIS. Thank you, Mr. Chairman. 

Mr. LATTA. Thank you very much. 

And the chair recognizes the ranking member. 

Ms. ESHOO. Thank you, Mr. Chairman. 

Just very quickly, two things. 

95 

Thank you to all of the Commissioners. I have some more questions. I will put them in writing. 

Commissioner Clyburn, I didn’t get to say earlier, thank you for 

your work on Lifeline. Thank you. It is really helping to make a 

difference. 

And to Commissioners O’Rielly and Pai, I hope that I didn’t hear 

you siding with people that rip off consumers. Any outfit that is 

going to place charges on a consumer’s bill and bilk them, I don’t 

think that is the place where anybody wants to stand. Now, maybe 

you have some other issues with the enforcement part of the agency. But that is not only the wrong side, it is the wrong side of history. 

Mr. Chairman, I would like to ask for a point of clarification on 

the introduction of multimedia during our hearings. Earlier in our 

hearing today, one of our colleagues introduced a video as part of 

her line of questioning without asking for objection. As you know, 

when letters or other written materials are entered into our record, 

we first have to ask for unanimous consent. 

The Democrats on the committee had previously sent a letter to 

our Republican colleagues asking them, when video or other multimedia evidence is introduced, that we first check with our colleagues on the other side. Now, she may not have known that that 

request should have been made. 

And I think, for regular order here, no side ever wants to be surprised. So I ask—— 

Mr. LATTA. If I could—— 

Ms. ESHOO. But let me just ask the parliamentarian the following—— 

Mr. LATTA. Well, just if I could, to the ranking member, because 

of the interest of time and we are going to miss the vote, if we 

could ask our staffs to work together on your question. 

Ms. ESHOO. Yes, but let me put my question—— 

Mr. LATTA. OK. 

Ms. ESHOO [continuing]. Out there so it is a part of the record. 

It is a parliamentary inquiry, and it is the following: Can you 

provide some clarification as to whether video and multimedia evidence will be treated the same as written materials as a matter of 

this subcommittee’s process? 

And we will await the—— 

Mr. LATTA. We will work with our staff. 

Ms. ESHOO. Yes. Not the staff, the parliamentarian. 

Mr. LATTA. OK. Thank you. 

Ms. ESHOO. Thank you, Mr. Chairman. 

Mr. LATTA. And if I could real quickly just, again, thank the 

Commission for being with us today. On behalf of the chairman of 

the subcommittee and also the ranking, we thank you for your 

time. 

And, without any other questions coming before us, we stand adjourned. 

Ms. ESHOO. Thank you. 

[Whereupon, at 1:25 p.m., the subcommittee was adjourned.] 

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