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ISSUES IN TELECOMMUNICATIONS COMPETITION 

HEARING 

BEFORE THE

SUBCOMMITTEE ON TELECOMMUNICATIONS AND 

THE INTERNET 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

JULY 22, 2008 

Serial No. 110–138 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

JOHN D. DINGELL, Michigan, Chairman 

HENRY A. WAXMAN, California 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

Vice Chairman 

LOIS CAPPS, California 

MIKE DOYLE, Pennsylvania 

JANE HARMAN, California 

TOM ALLEN, Maine 

JAN SCHAKOWSKY, Illinois 

HILDA L. SOLIS, California 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

DARLENE HOOLEY, Oregon 

ANTHONY D. WEINER, New York 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

CHARLIE MELANCON, Louisiana 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

JOE BARTON, Texas 

Ranking Member 

RALPH M. HALL, Texas 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

BARBARA CUBIN, Wyoming 

JOHN SHIMKUS, Illinois 

HEATHER WILSON, New Mexico 

JOHN SHADEGG, Arizona 

CHARLES W. ‘‘CHIP’’ PICKERING, 

Mississippi 

VITO FOSSELLA, New York 

ROY BLUNT, Missouri 

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE FERGUSON, New Jersey 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

PROFESSIONAL STAFF

DENNIS B. FITZGIBBONS, Chief of Staff 

GREGG A. ROTHSCHILD, Chief Counsel 

SHARON E. DAVIS, Chief Clerk 

DAVID L. CAVICKE, Minority Staff Director 

(II)

(III) 

SUBCOMMITTEE ON TELECOMMUNICATIONS AND THE INTERNET

EDWARD J. MARKEY, Massachusetts, Chairman 

MIKE DOYLE, Pennsylvania 

Vice Chairman 

JANE HARMAN, California 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

BARON P. HILL, Indiana 

RICK BOUCHER, Virginia 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

LOIS CAPPS, California 

HILDA L. SOLIS, California 

JOHN D. DINGELL, Michigan (ex officio) 

CLIFF STEARNS, Florida 

Ranking Member 

FRED UPTON, Michigan 

NATHAN DEAL, Georgia 

BARBARA CUBIN, Wyoming 

JOHN SHIMKUS, Illinois 

HEATHER WILSON, New Mexico 

CHARLES W. ‘‘CHIP’’ PICKERING, 

Mississippi 

VITO FOSELLA, New York 

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE FERGUSON, New Jersey 

JOE BARTON, Texas (ex officio) 

(V) 

C O N T E N T S 

Page 

Hon. Edward J. Markey, a Representative in Congress from the Commonwealth of Massachusetts, opening statement .................................................... 1 

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

opening statement ................................................................................................ 3 

Hon. Charles W. ‘‘Chip’’ Pickering, a Representative in Congress from the 

State of Mississippi, opening statement ............................................................. 4 

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

opening statement ................................................................................................ 5 

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, prepared statement ...................................................................................... 101 

WITNESSES

Matthew Salmon, President, CompTel .................................................................. 6 

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

Larissa Herda, Chairman, President and Chief Executive Officer, tw telecom, 

Inc. ......................................................................................................................... 16 

Prepared statement .......................................................................................... 18 

Carl J. Grivner, Chief Executive Officer, XO Communications ........................... 47 

Prepared statement .......................................................................................... 49 

Catherine Avgiris, Senior Vice President and General Manager, Voice Services, Comcast Cable .............................................................................................. 66 

Prepared statement .......................................................................................... 68 

Jonathan Banks, Senior Vice President, Law and Policy, United States 

Telecom Association ............................................................................................. 75 

Prepared statement .......................................................................................... 77 

SUBMITTED MATERIAL

Edison Electric Institute, statement ...................................................................... 102 

(1) 

ISSUES IN TELECOMMUNICATIONS 

COMPETITION 

TUESDAY, JULY 22, 2008 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON TELECOMMUNICATIONS

AND THE INTERNET, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC. 

The Subcommittee met, pursuant to call, at 2:10 p.m., in room 

2123 of the Rayburn House Office Building, Hon. Edward J. Markey (chairman) presiding. 

Members present: Representatives Markey, Gonzalez, Stearns, 

Upton, Pickering, and Terry. 

Staff present: Amy Levine, Tim Powderly, Colin Crowell, David 

Vogel, Philip Murphy, Neil Fried, Ian Dillner, and Garrett Golding. 

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

OF MASSACHUSETTS 

Mr. MARKEY. I am going to now convene to order this Subcommittee on Telecommunications and the Internet hearing, and 

today’s hearing is about several issues affecting telecommunications competition. This hearing comes several hearings after 

other hearings dealing with these issues including two last year 

that examined telecommunications competition in the United 

States as well as broadband lessons from abroad. 

Looking back, observers increasingly recognize that the United 

States started out on the right path by implementing provisions in 

the 1996 Telecommunications Act that were specifically intended to 

jump-start competition between and among technology platforms. 

When the Telecommunications Act was enacted in 1996, residential 

consumers did not have any broadband offerings in the marketplace. Nineteen ninety-six, no broadband offerings for any consumers. Yet soon after enactment, deployment by cable and competitive new entrants prompted the incumbent phone companies to 

finally deploy such services to residential consumers. By 2000, the 

United States was ranked first in the world, but subsequently regulators began the ill-considered action of taking the market opening rules off the books and the United States started to slide down 

in international broadband rankings. People may quibble with the 

methodology used in such rankings, but regardless of how you slice 

it—price, speed, percentage of subscribers—the United States is 

clearly no longer on top. Ironically, our foreign competitors are now 

enjoying broadband success stories by adopting and implementing 

2 

many of the policies that were embodied in the Telecommunications Act but that the FCC has subsequently abandoned. 

Several pressing competition issues including pole attachment 

rates, interconnection issues, number of reporting time frames, copper wire retirement, and forbearance legislation are before the subcommittee today, and each of these issues, if resolved correctly, can 

help promote greater broadband deployment, speeds, and consumer 

choice. These issues also highlight the repercussions caused by the 

FCC’s regulatory reclassification of services such as broadband access to the Internet. This semantic confusion and the ensuing regulatory uncertainty leave countless carriers and industry participants without clear direction as to their legal rights and obligations 

under the law. The fact that one incumbent provider, Vermont 

Telephone, felt that it was empowered to deny interconnection to 

another provider shows how far some in the industry as well as at 

the FCC have strayed from the intent of Congress in the Telecommunications Act of 1996. 

The continued invocation of intuited ancillary authority under 

Title I of the Telecommunications Act to alternatively modify, 

waive or plug statutory holes in our Nation’s communications laws 

and regulations is untenable in the long term, in view. Congress 

should address these issues and others including broadband consumer protection issues comprehensively in the next Congress as 

part of overarching broadband policy legislation. 

Today’s hearing is also a formal legislative hearing on H.R. 3914, 

a bill offered by Chairman John Dingell and myself addressing forbearance issues. This legislation fixes a glaring problem in the 

Telecommunications Act by removing the so-called ‘‘deem granted’’ 

provision contained in section 10 of the Telecommunications Act. 

This provision currently permits automatic deregulation of duly enacted statutes if the Commission fails to act within the statutory 

time period. This can occur even if a tie vote demonstrates no clear 

majority supports such deregulation. With the Commission having 

permitted forbearance on a two-two tie previously and possibly 

having just four commissioners serving early next year, this concern is not purely theoretical. If there is a clear majority to support 

forbearance on specific obligations, then let us have the FCC act 

in timely fashion with written justification to approve such forbearance. But an agency’s inability to act should not result in the removal of statutory duties that may have taken Congress years and 

a clear Congressional majority to enact. 

In addition, I continue to be concerned about the process by 

which the Commission considers forbearance petitions. In the past, 

industry petitioners have gained the proceeding by filing amendments to their petitions so late in the time period for consideration 

that effective parties and the public have no meaningful opportunity to consider and respond to the proposed amendments. The 

Commission has an open proceeding to reform this obvious abuse 

to the process, and I urge the Commission to act to protect the integrity of the proceedings and the public interest. 

I want to thank all of our distinguished witnesses for their willingness to participate here today. 

3 

I now turn to recognize the ranking member of the Subcommittee 

on Telecommunications and the Internet, the distinguished gentleman from Florida, Mr. Stearns. 

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

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

I welcome all our witnesses this afternoon. The main focus of this 

hearing frankly is on Chairman Dingell’s bill, which is H.R. 3914, 

to eliminate the deemed granted language from the Communications Act forbearance provision. And with this panel, I am sure we 

will get a balanced treatment on both sides, and Mr. Chairman, 

you brought out several points. I hear you continually mention how 

the United States is lagging in broadband. I am reminded that Dr. 

Ford, who testified at one of our hearings, who used to work for 

the FCC and now is with a think tank, he showed that the OECD 

ranking misrepresents the degree of broadband deployment in the 

United States. We have more broadband subscribers than any 

other nation. I don’t know that I can let that go because I think 

there is some question about the United States lagging so much 

but I know we can certainly do better. 

We have more competition and better technology than ever before, my colleagues, and the market is evolving faster than either 

the FCC or Congress themselves can keep up with. Consumers 

clearly benefit from the accelerating convergence of technologies 

that allow for vibrant, cross-platform competition in voice, video 

and broadband. As Congress and the FCC evolve the regulatory environment, they should do so on a technologically neutral basis that 

creates parity among the different types of providers regardless of 

the platform. 

The deemed granted language was designed to ensure that the 

FCC would not let petitions for deregulation languish and so that 

Congress would not need to go through the time-consuming legislative process every time the market outpaced the law, which as we 

have seen over the last two decades is quite a common occurrence. 

Our posture prior to 1996 was regulating unless it could be proven that regulation was not necessary. This led to overregulation 

and stifled growth and innovation. With the 1996 Act, as the chairman pointed out, flipped it and instead of regulating by default, the 

burden was switched to the FCC to defend regulation of telecommunications carriers. This change led to the elimination of 

many arcane and unnecessary regulations and is partly responsible 

for the tremendous growth and innovation we have seen in the past 

12 years. In this market environment, the FCC should have the 

burden to demonstrate that its regulations are still necessary. 

The deemed granted provision is having the intended effect. Various segments of the industry including both incumbent and alternative providers have filed 91 petitions. Under the threat of petitions being deemed granted, the FCC has ruled on 96 percent of 

them. Moreover, the FCC has not been granting petitions indiscriminately. Of the 87 petitions the FCC acted on, it denied a percent in whole or part and approved 23 percent. So without the 

deemed granted language, the FCC is unlikely to have ruled in as 

timely a manner as they did, if at all. The result: we would still 

4 

be stuck with many outdated and overly burdensome regulations 

that do not apply to the new 21st century technology. Perhaps 

much of the innovation we have seen would not have occurred. 

The deemed granted language should be retained because it is 

critical to ensuring the FCC acts in a timely way. My colleagues, 

nevertheless, some in industry have raised questions about the 

FCC’s procedure for evaluating these petitions. We need to work to 

reform the process, not gut the language that makes the provision 

work. That is why last October I and a number of my colleagues 

authored a letter asking the FCC to improve and reform the process so that all parties and the FCC can evaluate all the factual evidence in support or opposition of a particular forbearance request. 

The letter expressed concern with the current forbearance proceedings and whether or not adequate procedures are in place to 

ensure that a rigorous analysis is conducted. Sometimes petitions 

are incomplete when they are filed and only at the last minute is 

all the information submitted. We should be focusing our attention 

on that kind of FCC process reform, not striking the deemed granted. 

Another issue that needs further examination is pole attachments. I do not know what the right answer is but the rules that 

govern attaching communications equipment to poles are a mess. 

The FCC needs to start to clear this up while keeping in mind that 

any rate increase could damage broadband penetration. I hope our 

witnesses today can help us better understand the issues here 

today and help us to move forward. 

So Mr. Chairman, I think this is a very timely hearing. While I 

do not necessarily support eliminating the statutory deemed granted provision, the FCC’s forbearance process is in need of reform 

and I look forward to working with you and other committee members to get it conducted fairly and greater transparency in the forbearance process. Thank you, Mr. Chairman. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentleman from Texas, Mr. Gonzalez. 

Mr. GONZALEZ. I waive opening. 

Mr. MARKEY. The gentleman’s time will be reserved. The chair 

recognizes the gentleman from Mississippi, Mr. Pickering. 

OPENING STATEMENT OF HON. CHARLES W. ‘‘CHIP’’ PICKERING, A REPRESENTATIVE IN CONGRESS FROM THE STATE 

OF MISSISSIPPI 

Mr. PICKERING. Mr. Chairman, I thank you for this hearing and 

want to commend you for the effort. 

Forbearance is a good and necessary thing as part of the 1996 

Act so that we can update and modify as markets change and 

evolve but there are possible problems with the deemed granted 

that if we could have a Commission with only four instead of having the full five and that could be a very real possibility coming the 

first of this year. We would not want to see a loophole created 

where a rash of petitions are filed and then the inability to really 

thoughtfully act on the forbearance petitions as has been done in 

large part so far to date. 

So I commend the chairman of the subcommittee for this effort. 

I think it closes a loophole. It gives certainty. It maintains deadVerDate Nov 24 2008 11:36 Jan 06, 2011 Jkt 037690 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS\110-138 CHRIS
5 

lines and the forcing requirement that the FCC truly act on these 

petitions. I think it is a good balanced way with this bill that we 

can have a workable forbearance policy, certainty in the market 

and that the FCC is still required to act in a timely way, and so 

I commend you for this hearing and look forward to hearing the 

witnesses today on the panel, not only on forbearance but other 

issues that are affecting competition in the marketplace, and with 

that, I yield back, Mr. Chairman. 

Mr. MARKEY. Great. The gentleman’s time has expired. The chair 

recognizes the gentleman from Michigan, Mr. Upton. 

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

Mr. UPTON. Well, good afternoon, and it is nice to be back. I appreciate that we are having this hearing today and seeing our 

former colleague, Mr. Salmon, among us. So nice to have you here, 

Matt. 

I am interested in hearing from our witnesses regarding this legislation. The trend in the telecommunications sector is toward development of advanced technologies and increased competition. Deregulation has successfully promoted investment, innovation and 

more competition, benefiting consumers across the board. In my 

view, the addition of section 10, the deemed granted forbearance 

provision to the Communications Act, was indeed a very positive 

development. It is clear to me that as the level of competition in 

the market increases, the amount of government regulation should 

decrease, and I hope that we would all agree that markets do a better job of protecting consumers than regulators do, and in a competitive market we should permit market forces to work and not 

interpose government regulators between providers and consumers. 

All that does is impede the competition that we all want to see. 

The number of consumer choices and services available has significantly grown as we trend away from regulation. When competition is present, we must continue the course away from regulation, 

and as new services and technologies become available, we must 

avoid the lure of government red tape. 

Yet it seems that the FCC is sometimes reluctant to pull back 

and allow those market forces to work. It sometimes inserts itself 

between consumers and providers, frustrating the operation of market forces. I believe that it is important that FCC decisions should 

be made deliberately and that a written explanation of the Commission’s rationale should be made available to the public. But the 

deregulatory process of section 10 helps to correct the regulatory 

bias of the Commission, and in my view, the deemed granted language should be retained. It is a pro-consumer provision that helps 

to keep the agency from interfering with the relationship between 

buyers and sellers and allows the consumers to benefit from the operation of market forces including both incumbent and alternative 

providers to make sure that they have run through the full process, 

and as my colleague from Florida, Mr. Stearns, indicated, the FCC 

has issued orders for 96 percent of the petitions. Without the 

deemed granted language, the FCC is unlikely to have ruled on the 

petitions in as timely a manner, if not at all. Only four petitions 

have been deemed granted. Only one was controversial of those, 

6 

and of the other three, one was unopposed and two facilitated telephone relay services for people with disabilities. 

Some in the industry have questioned the FCC’s procedures for 

evaluating petitions. The answer, I think, is to reform the FCC 

process and not gut the language that makes the statutory provision work, and I yield back the balance of my time. 

Mr. MARKEY. The gentleman’s time has expired. 

All time for opening statements from members has expired. 

We are now going to turn to our very distinguished panel, and 

our first witness is the Hon. Matt Salmon, who is the President of 

Comptel, a trade association representing competition broadband 

providers. Mr. Salmon served in the U.S. House of Representatives 

from 1995 to 2001, and at the time was the only member of Congress in history to speak Mandarin Chinese, which is pretty close 

to the skill level you need to understand telecommunications regulations. So we welcome you, sir. Whenever you are ready, please 

begin. 

STATEMENT OF MATTHEW SALMON, PRESIDENT, COMPTEL 

Mr. SALMON. Thank you. I might as well give my speech in Mandarin, then nobody can argue with anything I say. 

Chairman Markey, Ranking Member Stearns, other members of 

the subcommittee, it is an honor to be here today. As Chairman 

Markey said, my name is Matt Salmon. I am the President of 

CompTel. As many of you know, Comptel is the face of the competitive telecommunications industry. Our members are telecommunications service providers and their supply partners and they offer 

a wide range of wireline, wireless, and VoIP services. Our industry 

expanded exponentially when passage of the 1996 Telecommunications Act made competitive entry into the local telecommunications market possible. I am proud to say that our members have 

competed and continue to compete vigorously and with innovative 

technology. Although DSL technology was sitting on the shelf collecting dust in the Bell world, the new entrants were the first to 

deploy that technology. Only after competitors took action to respond to what consumers wanted and needed, the Bell companies 

finally responded to deploy DSL. This is the hallmark of the competitive telecommunications industry. Our companies push for and 

deploy innovative technologies before the big phone companies 

deem those consumers worthy of such services. Other examples are 

triple play, Ethernet over copper, fixed wireless, nationwide highspeed services over advanced fiber networks, and the list can go on 

and on. 

I cannot overemphasize that the competitive industry has spent 

billions investing in broadband technologies and infrastructure. It 

is not just the phone and cable companies, as some would like Congress to believe, and the investment is not solely in just deploying 

new infrastructure. Our companies also maximize existing infrastructure including the legacy copper facilities that we lease from 

the Bells. For the telecommunications future of the United States, 

it is all about broadband, and without the competitive industry, 

this Nation will continue to drop in the broadband ratings. The policy and goal of giving all American consumers and businesses acVerDate Nov 24 2008 11:36 Jan 06, 2011 Jkt 037690 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS\110-138 CHRIS
7 

cess to broadband options and services depends on numerous platforms competing, not just two. 

Mr. Chairman, I believe I have a unique perspective because before running for Congress I spent 13 years as a telecommunications 

executive for one of the Bells. I began my career with Mountain 

Bell, which after the breakup of the Bell system became U.S. West. 

As many of you know, they are the predecessor to Qwest Communications. And during the creation and passage of this Act that we 

are talking about today, they and the other Bell companies were 

all about competition. They wanted to compete in the very lucrative 

long-distance markets. As such, the deal for Qwest and other Bells 

to open their networks to competitive companies like ours seeking 

to enter into the local markets was struck. 

I am familiar with this deal as I was a member of Congress from 

the First Congressional District in Arizona, when we were lobbied 

intensely by Qwest and other Bells during the passage of that act. 

During my 6-year tenure in Congress, I remember few issues that 

were lobbied more intensely or where more promises were made by 

the Bell companies. In fact, it reminded me of an old poem my father used to recite to me: ‘‘Just Before Christmas, I’m As Good As 

I Can Be.’’ The ink was not even dry on the President’s signature 

before the Bells challenged the constitutionality of the Act. Furthermore, a full decade of costly litigation ensued at the FCC on 

the rules the Commission crafted to implement the Act. These 

rules are the reason competition exists in a market where the majority of the lines to consumers and businesses are owned by a 

handful of large companies. 

While many aspects of the Act enabled and propelled competition, section 10 has been really troubling. This small section actually has the ability to undo all the good the rest of the Act seeks 

to accomplish. I commend Chairman Dingell for his introduction of 

H.R. 3914, which addresses one of the most troubling parts, and 

you have talked about that. I would just ask you on the whole 

deemed granted issue, imagine a committee or a subcommittee 

here in these hallowed halls in Congress where a tie vote is enough 

to pass the bill or where three bills are scheduled, only two are 

heard, and because of that, all three pass. We would all say that 

was ludicrous, and it would be, but essentially that is the type of 

process that we have to deal with at the FCC, and passage of 3914 

would go a long way toward fixing this deemed granted provision, 

and we would all hope that action could also be taken to stop the 

revolving door of multiple filings of forbearance petitions on exactly 

the same issues. For example, less than 100 days after Verizon’s 

forbearance requests were soundly defeated at the FCC, they filed 

again in two of those markets. Nothing really changed. Not only do 

these frivolous petitions diminish the Commission’s time and capacity to focus on critical issues like USF reform, media ownership, 

digital transition, and other issues of high importance to Congress 

and the American people, they forced the competitive industry to 

use valuable capital fighting these frivolous petitions. We would 

rather use the millions upon millions of dollars that we spend advancing our issues and research and development in growing our 

companies and helping our customers. 

8 

One final note on section 10 of the Act. I don’t believe we ever 

envisioned when we passed the Telecom Act that we would have 

a provision that could unilaterally undo the very act itself. Essentially that is what is happening. What we need to do is focus on 

this fact: there is virtually only one wholesale provider that gives 

us access to the last mile, the Bell Company. Once reasonable access to the last mile is taken away, the marketplace is left with a 

full monopoly on access to business customers’ services and a duopoly between cable and the Bells on residential services. How does 

that protect consumers and how is that in the public good, as Section 10 purports to do? 

Mr. Chairman, our membership is diverse but our needs are very 

uniform. Whether it is dealing with special access, unbundled network elements, interconnection or pole attachments, all we are asking for is to continue to have access to the monopoly infrastructure 

at the cost-based rates, the very rights provided for our companies 

under the Act. Our members did not build out networks in a monopoly world, and under the old telecommunications welfare program where state commissions provided a guaranteed rate of return. Every penny invested in infrastructure by the Bells before 

the Act was met with a guaranteed rate of return. Unlike the Bell 

companies, we did not inherit a government-sponsored network. 

Our investors bore all the risk with starting our companies and 

building our networks. We are not asking for any handouts or giveaways, and heaven forbid, we are not asking for any earmarks. We 

do not come before Congress and ask for the rules to change before 

we invest in broadband. We come before Congress to say we are investing in broadband and we will continue to invest. Please don’t 

change the competitive provisions and rules of the Act. The regulatory environment after years and decades of the Bell Company 

sponsored litigation is now relatively stable and we want it to remain that way so the competition can continue to thrive, technological innovations can continue and grow, and more and more 

Americans can have access to advanced technologies. As I said before, it is all about broadband, and whether all customers and businesses have the access and the range of choices that meets their 

needs, that will happen with the competitive industry. 

Thank you, Mr. Chairman. I appreciate this opportunity. 

[The prepared statement of Mr. Salmon follows:] 

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Mr. MARKEY. Thank you, Mr. Salmon, very much. 

And our next witness is Ms. Larissa Herda, who is the Chairman, President, and Chief Executive Officer of tw telecom, a $2 billion competitive broadband provider. She also serves on the Economic Advisory Council of the Federal Reserve Board of Kansas 

City. We welcome you, Ms. Herda. Whenever you are ready, please 

begin. 

STATEMENT OF LARISSA HERDA, CHAIRMAN, PRESIDENT AND 

CHIEF EXECUTIVE OFFICER, TW TELECOM, INC. 

Ms. HERDA. Good afternoon, Chairman Markey, Ranking Member Stearns and distinguished members of the subcommittee. My 

name is Larissa Herda and I am Chairman, CEO, and President 

of tw telecom, formerly known as Time Warner Telecom. Thank 

you for the invitation to appear before you today. 

Encouraging broadband deployment is an important national policy objective. Deploying fiber networks in the communities where 

we do business if the heart of tw telecom’s business plan. Although 

we have spent billions of dollars deploying broadband infrastructure, we still have no choice but to rely on services provided by 

third parties in certain situations. For example, we have no choice 

but to purchase special access and interconnection from the ILECs. 

As many of you know, the forbearance provision of the Telecommunications Act and the FCC’s implementation threaten to 

eliminate our ability to obtain these vital services. 

I strongly support the legislation filed by Chairman Dingell and 

Chairman Markey and cosponsored by a bipartisan group of this 

committee. I appreciate the subcommittee’s interest in reviewing 

the forbearance process, which is in drastic need of reform. In addition to passing legislation that removes the deemed granted language, please do what you can to convince the FCC that it is critical that they adopt procedural rules to govern the forbearance 

process. 

Today, however, I would like to focus my opening comments on 

our need to attach our fiber facilities to utility-owned poles. In 

order to deploy fiber and deliver broadband services to our customers, tw telecom must be able to obtain access to poles at nondiscriminatory rates. Unfortunately, the current rules governing 

pole attachments are seriously flawed. Under the existing rules, 

pole owners charge two different regulated rates for pole attachments. One applies to telecom carriers and the other applies to 

cable companies. All of these entities provide broadband service to 

end-user customers and this is a very important point to emphasize. Both telecom carriers and cable operators provide these services. But pole attachment rates are determined based on which of 

the legacy regulatory classifications applies to the service provider, 

and the rates applied to a telecom carrier of broadband are two to 

three times higher than the rates applied to cable providers of 

broadband. 

These rate differences exist even though pole attachments providing telecom service do not cause the pole owner to incur higher 

costs or use more space than is the case with the cable attachment. 

This produces particularly egregious results and instances where a 

cable company leases a fiber facility to us. Even though we are 

17 

using the exact same attachment, our use of the cable company’s 

facility to provide telecom services causes the rate for pole attachments supporting that fiber to increase two to three times, even 

though no additional space on the pole is required. 

To the extent that tw telecom provides services like broadband 

Internet access in competition with cable operators, the different 

rates yielded by the pole attachment rules skew competition. They 

cause competitors to pay dramatically different rates for an identical input that they have no choice but to buy. In summary, I urge 

you to press the FCC to adopt a single rate that applies to all competitors that use pole attachments to provide service. 

In January the FCC adopted an NPRM in which it tentatively 

concluded that it should adopt a single rate. Since that time, all industries including many pole owners have commented on the FCC’s 

proposed rulemaking and all agree that a single rate is appropriate. We would appreciate the subcommittee using its oversight 

role to ensure that the Commission adopts a single pole attachment 

rate for all providers of broadband services. This will encourage deployment of broadband networks critical to a vibrant economy. 

Thank you for your time and attention today. 

[The prepared statement of Ms. Herda follows:] 

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Mr. MARKEY. Great. We thank you so much. 

And now our next witness, Mr. Carl Grivner, is the Chief Executive Officer of XO Communications, a competitive broadband provider with over 1 million miles of fiber deployed. Mr. Grivner has 

served in various positions with Ameritech Cable and Wireless and 

IBM. 

STATEMENT OF CARL J. GRIVNER, CHIEF EXECUTIVE 

OFFICER, XO COMMUNICATIONS 

Mr. GRIVNER. Good afternoon, Chairman Markey, Ranking Member Stearns and members of the subcommittee, and thank you for 

the opportunity to appear this afternoon. I also want to thank 

Chairman Dingell, who is not here, and Chairman Markey for introducing the bill, H.R. 3914. I think it addresses the problems of 

deemed granted forbearance petitions. 

Forbearance is part of the broader issue of competition and 

broadband availability. Broadband availability is one of the most 

important challenges in telecom. The United States does lag behind 

many nations and is falling further behind. Other countries use all 

of their resources to make broadband widely available, but in the 

United States, the ILECs constrain broadband by fighting competitive access to the legacy network, and as we all know, competition 

is one of the key drivers of broadband. 

XO is one of the key competitors in helping to accelerate 

broadband development in the United States established in 1996 as 

part of the Telecom Act. We have invested over $7 billion in building advanced networks. We have over 140,000 business customers 

across the United States and we provide a variety of IP services 

to our customer. 

But one significant barrier to broadband deployment remains 

and that is the last mile access to those customers, and it is critical 

for competition. With the Act, Congress mandated access to the last 

mile because ratepayers financed legacy ILEC networks already in 

the ground. By putting capital into their networks, they were guaranteed a rate of return for basically 100 years, and still today in 

over 90 percent of the business market, the ILEC loop facilities are 

the only route into the building, and XO pays for that route. We 

pay hundreds of millions of dollars each year for that last mile of 

connectivity. Now, we prefer not to rely on the ILECs to fill out 

networks but it would cost over $50 billion to build to the 2.3 million buildings within reach of our network, and the FCC agrees 

that it is not cost-effective to duplicate existing facilities. 

Copper networks aren’t dead. They are alive and doing very well. 

Copper services most businesses and 100 million households. Seventy-five percent of all telephone access lines are home run copper. 

Copper facilities are a broadband resource. Copper has evolved over 

the years beyond analog, voice, and dial-up. It is now a leading 

broadband infrastructure. Us, XO, others at this table offer Ethernet over copper at speeds up to 10 megabits per second and soon 

you will have 100 megabits per second over those little copper 

wires that have been existing in the network for almost 100 years. 

Yet the Bells are leveraging their copper cartel to restrict access to 

that last mile. The ILECs control access to nearly all last mile facilities. They want to control the supply through copper removal. 

48 

They want to control access and pricing through the use of the forbearance petition and they want to squeeze out broadband competition. 

So let us start with what is wrong with copper retirement. As 

ILECs deploy fiber, they disable the copper loop. It harms the public interest in at least three ways: it destroys an alternative 

broadband source, it threatens public safety—copper supplies its 

own power—and it poses a danger to national security. It removes 

redundancy in the event of an emergency. The FCC should adopt 

a formal process for approval of copper retirement. ILECs must 

prove that copper retirement is in the public interest. Current rules 

give the ILECs free reign. ILECs simply file notice to retire the 

copper and that is the end of it. Consumers, which we are concerned about, have no recourse. 

If copper destruction is dire, forbearance is even more horrific. 

The 1996 Act included forbearance as a tool to eliminate obsolete 

policies. It worked until the ILECs hijacked forbearance to raise 

rates on the last mile and to take out competition. The most dangerous aspect is deemed granted. It is a decision through inaction: 

don’t do anything and you will get what you want. It is a lack of 

an appealable order. The Committee has taken the right steps with 

H.R. 3914, which would eliminate forbearance deemed granted. But 

even with this legislation, there are still some problems with forbearance. Private parties can dictate the FCC’s agenda and resources. Frivolous petitions are filed as placeholders to start the 

deemed granted clock. Supporting data is incomplete or filed 

months or even a year later, and just let us see what sticks. Petitions are filed at will. A rejected petition can be re-filed the next 

day: that didn’t work; let us try this. Every frivolous ILEC petition 

places a heavy burden on the resources of the FCC and the industry. The lack of rules encourages forbearance petitions. 

Last fall, XO and other competitors petitioned the FCC to create 

long-needed rules governing forbearance, and I want to thank the 

members for stressing the importance of having a deregulatory 

process based on rules and procedures. At a minimum, the rules 

should require a forbearance petition to be complete as filed, require the FCC to seek public comment on petitions, set guidelines 

for the treatment of confidential data, and forbid late filed data by 

petitioners. 

I want to conclude my remarks and look forward to your questions. Thank you. 

[The prepared statement of Mr. Grivner follows:] 

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Mr. MARKEY. Thank you, Mr. Grivner, very much. 

Our next witness is Ms. Cathy Avgiris, who is Senior Vice President and General Manager for voice services for Comcast. In addition to being the Nation’s largest broadband provider, Comcast is 

also the Nation’s fourth largest residential phone provider. We welcome you. Whenever you are comfortable, please begin. 

STATEMENT OF CATHERINE AVGIRIS, SENIOR VICE PRESIDENT AND GENERAL MANAGER, VOICE SERVICES, COMCAST 

CABLE 

Ms. AVGIRIS. Good afternoon, Mr. Chairman and members of the 

subcommittee. Thank you for the opportunity to testify today. My 

name is Catherine Avgiris and I am the Senior Vice President and 

General Manager of Voice Services for Comcast Corporation. I am 

currently responsible for overseeing all aspects of Comcast voice 

business. I last testified before the subcommittee on the E911 bill 

last year and I would like to congratulate this subcommittee and 

Congress for passing this important piece of legislation. It is good 

to be back with you today. 

I am pleased to report that since I last testified, Comcast’s voice 

service continues its rapid growth, as the cable industry continues 

to provide consumers with their first real competitive choice to the 

incumbent telephone companies since Congress passed the Telecommunications Act of 1996. Today, Comcast’s voice service alone 

reaches more than 44 million homes nationwide. In just the last 3 

years, more than 5 million customers have chosen the great savings, reliability, and convenience that our competitive service provides, and as a result of this phenomenal consumer demand, we 

are now the largest facilities-based competitive provider of residential voice service in the United States. 

Facilities-based competition from all cable providers is delivering 

real savings for consumers and competition that has been delayed 

for nearly a decade by litigation and regulatory gamesmanship. 

Economic experts estimate that households will save $95 billion 

over the last 5 years and small businesses will save $16 billion as 

a result of this expanded competition in the voice business. That 

is a total of more than $111 billion in savings. Our actions and our 

investments prove that we believe in competition and we would 

rather compete with the incumbent local telephone companies in 

the marketplace than engage in regulatory battles with the FCC or 

in the halls of Congress. But the incumbents are still dominant 

with an 88 percent share of the market, and this gives them the 

ability and the incentive to frustrate innovation, choice, and competition, especially in those remaining areas where effective competition is dependent on mutual cooperation with competing providers. 

Let me give you three examples. First, cable providers such as 

Comcast have to rely on incumbent telephone companies to interconnect with our network in order to provide true competitive 

choice. Interconnection on terms that are not just, reasonable, and 

non-discriminatory is tantamount to stopping competition dead in 

its tracks. Unfortunately, the incumbents continue to use interconnection as a weapon for impeding competition. For example, we 

are currently in a dispute with an incumbent that is refusing to 

67 

interconnect with us. Put simply, denial of interconnection means 

denial of competition and denial of consumer choice. Other local 

telephone companies use their own tactics to delay or frustrate our 

entry, and as more consumers choose Comcast, the incumbents become more creative in developing roadblocks to competition. 

Second, consumers find it critically important to keep their 

phone numbers when they switch providers. Incumbent telephone 

companies cannot be allowed to drag their feet to impede the number porting process. They must cooperate with their competitors to 

ensure that porting works smoothly. While wireless carriers have 

voluntarily agreed to allow their customers to switch their phone 

numbers to a new wireless provider in a few hours, the current industry standards for wireline providers allow the incumbents to 

take up to 4 business days to switch a number. But the reality is 

that customers typically have to wait a week to port their wireline 

number to Comcast, even though this transaction requires no more 

than a few hours, at most, to complete. Customers expect and 

should be given wireline porting that is as convenient and hasslefree as wireless porting. To that end, the FCC has proposed cutting 

the standard interval in half and Comcast strongly supports that 

proposal. Unfortunately, most of the incumbents have opposed that 

initiative. We hope that Congress or the FCC will implement this 

pro-consumer proposal, and I remind the Committee that number 

porting is a mutual obligation on both incumbents and competitors. 

We are ready, willing and able to port numbers more quickly as 

well. 

Third, we know that one incumbent telephone company has attempted to undermine the number porting process through a practice known as retention marketing. Confidential information exchanged between carriers for the sole purpose of affecting the port 

is being used to keep existing customers from switching their voice 

service to a competitor. In response to a complaint, the FCC recently concluded that this practice is improper, and just last week 

the D.C. Circuit Court rejected Verizon’s attempt to stay that important ruling. As these examples show, Congress and the FCC 

cannot assume that just because facility-based voice competition 

has emerged, all is well. The incumbents will continue to look for 

ways to stifle competition, even as they call for less regulation of 

their own voice business. 

In closing, we note our support of H.R. 3914 and believe that 

there should be no regulatory forbearance by default. Thank you 

again for the opportunity to testify today and I look forward to answering any questions. 

[The prepared statement of Ms. Avgiris follows:] 

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Mr. MARKEY. Thank you very much. 

And our final witness is Mr. Jonathan Banks, who is Senior Vice 

President for Law and Policy at U.S. Telecom, a trade association 

consisting of the Nation’s largest phone companies. Prior to joining 

U.S. Telecom, Mr. Banks held positions with Bell South and with 

the Federal Trade Commission. We welcome you, sir. Whenever 

you are ready, please begin. 

STATEMENT OF JONATHAN BANKS, SENIOR VICE PRESIDENT, 

LAW AND POLICY, UNITED STATES TELECOM ASSOCIATION 

Mr. BANKS. Thank you, Chairman Markey, Ranking Member 

Stearns and members of the subcommittee, and thank you for the 

opportunity to testify before you. 

Consumers today are clearly benefiting from an accelerating convergence of technologies that have created the sort of competition 

that we were all looking for in 1996. Today, Comcast has over 5 

million voice customers, Verizon has over 1 million video customers, and 16 percent of the households in this country have cut 

their wired connection to the telephone world. Telecoms are in the 

video business, cable is in the voice business, and telecom, cable 

and wireless are all in the broadband business. Our companies’ investment in network upgrades and competitive video platforms is 

one example of how consumers are benefiting from lower prices and 

higher quality service today that we all would have envied in 1996. 

And let me say, there is nothing that is more important to our companies than winning new broadband subscriptions in the market 

and they are doing everything they can to sign up customers, as 

is Comcast, other cable companies, and wireless companies. 

This progress has created the urgent need for regulatory parity 

more broadly than just within the telephone industry but across all 

these platforms. The United States Telecom Association represents 

broadband service providers from the very largest to the very small 

companies, from urban providers to purely rural providers, and our 

members provide broadband on both a fixed basis and on a mobile 

basis. We have companies that are very small that are providing 

IP-based video services in competition with cable. We have companies that are small and large operating wireless broadband networks. 

So let me step back for a second and give you an overall perspective of how we see all of our industries contributing to the economy. 

The last several years have brought telecom, media and technology 

together into one ecosystem where each of our sectors depends on 

the other for innovation and for developing products to attract consumers. Telecom, media, and technology, or TMT, is now the fourth 

largest gross domestic product, and it is the leading contributor for 

growth and productivity across our entire economy. About half of 

our Nation’s productivity growth comes from the TMT sector. The 

TMT sector also generates over 10 million jobs, many of which are 

high paying and in high-growth sectors of the economy. In fact, if 

you take the annual investment made by the U.S. government to 

put a man on the moon, add to it the annual investment to create 

the interstate highway system, you will find that that comes in today’s dollars to less than half of what our private companies are 

investing in broadband networks, in software, and in technology, 

76 

and it is that investment that is driving the economic growth in 

jobs that come from our sector. So when we look at policy issues, 

we look to see that this healthy investment trend will not be 

harmed by regulatory decisions, and a key ingredient to the continued success of the investment and the pro-consumer benefits are 

regulatory parity across the sectors so that the possibilities for innovation are as wide as possible. 

Our members support the goal of H.R. 3914 to improve the forbearance process. Congress created the process in 1996 in recognition of the fact that the communications industry was changing 

rapidly and that many FCC regulations were either obsolete in 

1996 or would soon be obsolete. In fact, Congress viewed the importance of regular review of FCC rules to be so important that not 

only did they pass section 10 but they added section 11 to the Act, 

which required the FCC biannually to review its rules and regulations and get rid of the rules and regulations that were no longer 

necessary to the public interest. The FCC has effectively read section 11 out of the Act, leaving only section 10as a vehicle for updating telecommunications regulations. 

I think we have discussed some of the statistics here. Since 1996, 

there have been 87 petitions that the FCC has issued orders on, 

and the orders have roughly put a third of the petitions in the denied status, a third in granted, and roughly a third in partial 

grants or denials. So the FCC has acted judiciously on these petitions. We are certainly aware of the Verizon petition and the controversy that that has engendered, which I do think is in large part 

due to the absence of any accompanying written order making review difficult for Congress or the courts and difficult for anyone to 

ascertain the exact scope of the order. However, the FCC has taken 

some steps to improve this process. They have issued a notice of 

proposed rulemaking to improve the procedures for forbearance and 

this Congress is considering H.R. 3914, which to us does establish 

a read deadline for FCC action, and without a real deadline, FCC 

action can be delayed easily for years, putting the industry that labors under a lot of regulations at a distinct disadvantage. 

My written testimony discusses a number of the important issues 

that you have set out here for comment and that the other panelists have commented on, and I would be happy to discuss those 

with you. Thank you. 

[The prepared statement of Mr. Banks follows:] 

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Mr. MARKEY. Thank you, Mr. Banks, very much. Now we will 

turn to questions from the subcommittee members. 

Ms. Avgiris, your testimony states that H.R. 3914, the legislation 

that Mr. Dingell and I have introduced, would prevent forbearance 

by default and force the Commission to expressly rule on a petition 

so that it is not automatically granted. Does Comcast support passage of H.R. 3914? 

Ms. AVGIRIS. Yes. 

Mr. MARKEY. Mr. Salmon, could you give us a yes or no on that? 

Mr. SALMON. Unequivocally yes. 

Mr. MARKEY. Ms. Herda? 

Ms. HERDA. We agree as well. 

Mr. MARKEY. Mr. Grivner? 

Mr. GRIVNER. Yes. 

Mr. MARKEY. Mr. Banks? 

Mr. BANKS. We would like to work with the Committee to ensure 

that there is some way that the FCC has a real deadline to act. 

Mr. MARKEY. Mr. Banks, your testimony indicates that you support the goal of H.R. 3914 to improve the forbearance process at 

the FCC, and I agree that the forbearance process does need reform. But H.R. 3914 does not address the FCC process but rather 

the deemed granted loophole. Do you support elimination of the 

deemed granted loophole or not? 

Mr. BANKS. We are concerned that simply eliminating the 

deemed granted status without some other inducement to force the 

FCC to act would leave us with outdated regulations for years and 

years and years and no way to get out of them. 

Mr. MARKEY. So even with good congressional oversight, you 

don’t think that we can keep the FCC accountable to our intent? 

Mr. BANKS. I think congressional oversight helps but the FCC’s 

past record suggests that things do sit for years after court remands, for example, without action. 

Mr. MARKEY. Mr. Banks, under section 10, do you agree that 

automatic forbearance from interconnection, for instance, could 

occur on a two-to-two tie? 

Mr. BANKS. Yes. 

Mr. MARKEY. Don’t you agree that such sweeping action is unfair 

on a tie vote or through agency inaction? 

Mr. BANKS. There is clearly legitimate concern over agency inaction and tie votes, yes. 

Mr. MARKEY. If for 221 years the Supreme Court on a four-tofour tie had to agree with the person who had brought the case and 

whoever brings a case can get it to four-to-four wins rather than 

forcing a five-to-three vote to change the laws of the United States, 

that that would be quite a different America that we would live in 

if you did not have to have a majority of the Supreme Court to 

change a law. Four-to-four would change it. And so that is kind of 

at the heart of what we are doing. On our committee here, if it is 

27 to 27, you lose. If it is eight to eight, you lose. If it is four to 

four, you lose. You have to get a majority to change the status quo. 

So this standard I don’t think should be any different for the FCC, 

do you think, Mr. Banks? 

85 

Mr. BANKS. I think you have a very fair point about the difference between the Supreme Court rules, for example, and the 

FCC rule on forbearance here. 

Mr. MARKEY. Now, Ms. Herda, you have heard proposals from 

others that pole attachment rates should be made uniform by making cable operators pay more and telecom companies a little less. 

What, in your view, are the implications for broadband deployment 

of such a plan? 

Ms. HERDA. Well, I think that with regard to the pole attachment 

rates, I am not an expert in that area, but I understand that the 

FCC has gone through quite a process to establish the cable rate, 

and that various PUCs have also agreed that the cable rate is the 

appropriate rate and it has been held up in the federal courts, so 

we advocate the cable rate there. But I think at the end of the day 

there needs to be a process to determine if that rate is the correct 

rate and that a fair cost recovery is appropriate. 

Mr. MARKEY. Should we insist on a rate that is uniform and also 

promotes broadband deployment? 

Ms. HERDA. Yes. 

Mr. MARKEY. You think we should? 

Ms. HERDA. Yes. 

Mr. MARKEY. Mr. Grivner, what are the implications for your 

business and others if Verizon and others disable the copper loop 

facilities to the home or business? 

Mr. GRIVNER. Well, for our business, it removes our ability to 

provide broadband access to our customers, and the copper loop, as 

I said in my opening remarks, is alive and doing very well. There 

have been technologies developed in this country that have expanded the capabilities of copper loops from, as I said earlier, 10 

megabit, now up to 100 megabits of capability out of simple copper 

that exists in the ground today. So I think it would be devastating 

certainly for our businesses but I think it is devastating—when we 

talk about broadband availability, I think it is. The availability is 

there, it is just a matter of using the technology that exists. 

Mr. MARKEY. But they don’t allow the copper to be dug up in 

Japan or in Great Britain, but here in the United States where we 

are supposed to be the leader—— 

Mr. GRIVNER. We got a notice in the mail that the copper has 

been removed and good luck. 

Mr. MARKEY. How much have you invested in your network already, Mr. Grivner? 

Mr. GRIVNER. We have invested over $7 billion and actually have 

increased our spending over the last 2 years. We have invested another $400 to $500 million over the last 2 years in IP technologies 

to bring broadband to our customers. 

Mr. MARKEY. Thank you. My time has expired. The chair recognizes the gentleman from Florida, Mr. Stearns. 

Mr. STEARNS. Thank you, Mr. Chairman. 

You know, listening to both sides, and I think Ms. Avgiris makes 

some good points. I can empathize with both sides, but what we 

have here is, the question is, do we need to regulate? Affirmative 

action is needed to prove that we need to regulate here. Now, there 

is a possibility that we could have a compromise, so I think that 

is what myself and my staff are looking at here. Knowing the 

86 

strong opinions of both sides here, but Mr. Banks, wasn’t the whole 

point of the deemed granted language to make sure the FCC acts 

on forbearance petitions? 

Mr. BANKS. Yes, sir. 

Mr. STEARNS. So let me just go to each of you, a question for each 

person on the panel, and just give me your honest answer. I think 

it is critical that we need the deemed granted language but I agree 

that the FCC process needs to be reformed. I think, Mr. Chairman, 

there is a possibility we can get bipartisan legislation here, and 

here is what I would suggest. Short of eliminating the deemed 

granted language, the question would be for the panel, what kind 

of reforms would you suggest to make sure that the forbearance 

process with the FCC is more transparent and runs smoothly? That 

is, for example, when the process is nearing the end, no one can 

come back at the last minute and submit a whole new affirmative 

plan in which you don’t know anything about it and then you have 

to answer, which goes on. So wouldn’t things like deadlines for the 

filing of amendments and additional evidence address most of the 

concerns that have been expressed here and wouldn’t that be the 

crux of what we could do as reform so that you folks, and I am 

talking to Ms. Avgiris, your folks would not be surprised. So I am 

offering here what I think might be a compromise language which 

is reform at the FCC. 

So why don’t I start with Mr. Salmon and then I work on down, 

just what do you think of the suggestion I had? 

Mr. SALMON. Thank you, Mr. Chairman, Ranking Member 

Stearns. You pose some very, very provocative thoughts. We would 

love to see widespread reform of section 10 but we believe very, 

very strongly that Chairman Dingell’s bill is a very, very good 

start. I think Chairman Markey probably put it as good as I can 

put it. It is a very undemocratic process to allow a two-two vote to 

constitute a victory or a majority. There is no other body ever in 

a democratic society that I know of where that kind of thought 

process goes on. It certainly never went on here. It doesn’t go on 

in the Supreme Court. But additionally, Mr. Banks said that their 

goal is to get rid of antiquated rules and regulations. If all the forbearance process was used for was cleanup language we would 

probably be a little bit more comfortable with the process, but the 

whole forbearance process is used to completely undo the entire 

Act. It is used to completely obfuscate all the other rules and get 

rid of the—— 

Mr. STEARNS. You know I don’t have much time, so I need for 

everybody else to have a chance, but I ask each of now, Ms. Herda, 

the compromise I suggest, do you think that would be something 

you could accept? 

Ms. HERDA. I think obviously process improvements would certainly help but the problem that we have is that when the FCC 

fails to act, it is the competitors that get hurt in the process with 

the deemed granted, and we get punished for that. I am not sure 

that any process improvement is going to improve that situation. 

Mr. STEARNS. So things like deadlines for the filing of amendments, real deadlines, and additional evidence, you think that 

would be an improvement? 

Ms. HERDA. I think they should have deadlines. I think that is— 

87 

Mr. STEARNS. I mean real deadlines. 

Ms. HERDA. But if they don’t meet the deadlines, then to grant 

it after things aren’t met is the problem. 

Mr. STEARNS. Let me go to Mr. Banks because I think you are 

alone here. Mr. Banks, go ahead. I will give you an opportunity to 

speak. 

Mr. BANKS. I think the FCC is an open docket in which they 

have gotten lots of suggestions for process improvements and we 

have to keep in mind that the people who use forbearance are some 

of the big telephone companies but many of the small- and medium-size companies who use it, right now there are 12 forbearance 

petitions pending at the FCC. 

Mr. STEARNS. No, take my suggestion. What about deadlines for 

the filing of amendments, real deadlines so that the CLECs could 

see this early on, know what is at stake and there is no further 

going on. 

Mr. BANKS. So there are definitely some process improvements 

that I think—— 

Mr. STEARNS. Do you think the process improvements I talked 

about you could accept? 

Mr. BANKS. Yes. 

Mr. STEARNS. Do you think that is a compromise? 

Mr. BANKS. Yes. 

Mr. STEARNS. I hear from you that you are willing to work on 

the Dingell bill but you are not necessarily a supporter of it as are 

these folks, so I am offering you sort of compromise that you are 

saying you could accept? 

Mr. BANKS. Yes. 

Mr. STEARNS. OK. Mr. Grivner? 

Mr. GRIVNER. I think we need to fix this. I think we need to fix 

it all the way. What you are suggesting are certainly good suggestions relative to the process but deemed granted as has been mentioned, if it is still hanging out there, so you meet the rules but you 

are still going to get what you want, in the end is a flawed process. 

Mr. STEARNS. OK. And—— 

Ms. AVGIRIS. I also believe that having strict deadlines and providing evidence for the record on a sooner basis helps improve the 

process, but when you get down to it, if a default provision is 

granted of forbearance when you have a two-two tie, only the competitors are hurt that way. 

Mr. STEARNS. Thank you, Mr. Chairman. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentleman from Texas, Mr. Gonzalez. 

Mr. GONZALEZ. Thank you very much, Mr. Chairman, and I commend the ranking member, Mr. Stearns, for coming up with a good 

idea. I don’t believe it goes far enough. That should be in place regardless. To be honest with you, I don’t know of a process where 

you can amend at any time and it especially lends itself to a great 

deal of mischief if someone wanted to play it that way and to game 

the system. Everybody knows how to complicate matters and almost assure because of the complication it extends time, consideration, and then if you have a deemed granted result, you can see 

where all this is going to lead us. 

88 

Mr. Salmon, Mr. Banks, let me ask you, on the deemed granted, 

now, the FCC hears other petitions and disputes and requests, not 

just forbearance petitions, right? In those other settings, in those 

other conditions, do we have anything like a deemed granted provision? 

Mr. SALMON. I know of no other process where there is a deemed 

granted provision, and additionally, when a forbearance petition is 

filed, because of the deemed granted language, the Commission, if 

it is working on another project, whether it is USF or digital, any 

other number of things, they have to pool all their resources and 

put it out to the issue that has a gun to their head. That is why— 

it is just policy. 

Ms. HERDA. What we have also found is that we have no recourse in the courts, as we have seen, that we have no right to appeal. In the case of the Verizon issue, it was determined that we 

couldn’t even appeal it. 

Mr. GONZALEZ. Mr. Banks, back to that question, do you know 

any other hearing, dispute, petition consideration, anything that 

also has a mechanism such as a deemed granted if it is not acted 

on timely? 

Mr. BANKS. I think there are a number of procedures at the Commission involving enforcement actions and maybe some other 

things where the Bureau makes a decision, and unless the Commission rejects it, the decision becomes effectively a Commission 

order. 

Mr. GONZALEZ. Somewhat a cousin to this, so I wouldn’t say you 

have something is almost direct procedurally. I am just curious. 

But there are many aspects of this but it just seems that you could 

really do something with a system that automatically grants the 

relief just because the decisionmaker in this case doesn’t act, and 

I don’t think we have to go to the Supreme Court or the United 

States Congress. We can just look within the confines of the FCC 

and find that this may be very unique. But something of this importance, even if it is not, and we find something that may be similar, as Mr. Banks may have pointed out, we are talking about 

something that really, and I agree with Mr. Markey, I think could 

truly impact competition. 

Let me ask Mr. Grivner, I was surprised, and this is my own ignorance, I just look at the copper wire line as a thing of the past, 

but you are talking about speeds that basically would come under 

premium category classification by the FCC. Is that true? 

Mr. GRIVNER. Yes, absolutely. This copper technology, actually 

Mr. Banks worked at a company, Bell South, that also deployed it 

many years ago, and it has developed here in the good old United 

States by several companies. They have taken existing cop repairs. 

We are selling it to our customers. We sell—you would have to sell 

six or seven T1s at extraordinary pricing to be the equivalent of 

what we are able to get out of simple twisted cop repairs. It is just 

great technology and customers love it as well. 

Mr. GONZALEZ. It is surprising when you indicated what was 

being offered and what was being explored, and I don’t know if 

other members were surprised about the speed or the capacity and 

the ability of copper wire. 

89 

Ms. Herda, in today’s environment, who owns most of the utility 

poles? I mean, my assumption is in the old days you had the incumbents more—— 

Ms. HERDA. You have a combination of incumbent and utility 

providers. 

Mr. GONZALEZ. And today is it utilities have more ownership of 

more poles or—— 

Ms. HERDA. I think that is what I understand. That is what I 

have heard. I think the incumbents have gotten rid of some of 

theirs, a bunch of theirs. 

Mr. GONZALEZ. I come from San Antonio. Our utility company is 

actually by the municipality so I am thinking of other settings, 

which is difficult for me sometimes. But I am just thinking of the 

relationships that municipalities may have with utility companies 

and such, right away easement and so on, but in other aspects too, 

I am thinking in terms of, I know of partnerships with municipalities to build out, let us say, Wi-Fi and maybe even WiMAX and 

such. I am just thinking in terms of giving an unfair edge to any 

particular provider, any particular technology, all using that same 

pole because of the relationships. Do you fear anything of that nature? 

Ms. HERDA. Actually, as a matter of fact, we have services that 

sometimes compete with the providers who own the pole and so 

when we are asking them to actually do the work, they are in no 

rush because certainly it is to their advantage to delay our construction of our fiber networks. So there is, in addition to the rates 

associate with it, which we think everybody should be paying the 

same rates, we think that there should be terms and conditions 

that mandate behavioral conditions. 

Mr. GONZALEZ. Thank you very much. 

And I want to pronounce the name right and I apologize because 

I met you right before the hearing. Is it Avgiris? Ms. Avgiris, regarding, you all called it the portability. I just call it transferring 

your phone number. And what you are telling me is that wireline 

or wireless can do it in a number of hours but not so in other circumstances, and that right now we are looking at 4 days. 

Ms. AVGIRIS. That is correct, 4 business days. 

Mr. GONZALEZ. What do you suspect might be the reason for 

that? Because I am going to ask Mr. Banks obviously. And I have 

a minute and 40 seconds, but—— 

Ms. AVGIRIS. So I will take a minute and 40 of that. Consumers 

want faster porting. They want it because they want to be able to 

purchase services at retail, self-install. Our service provides new 

feature functionality that is not what is available with basic telephone. And they have gotten accustomed to being able to make decisions on their own timeline, and the whole wireless industry and 

their porting within voluntary means to port within a number of 

hours means that that capability is there. Comcast as a provider 

is ready, willing, and able to port a customer’s number away from 

Comcast if they want within the next day. I see no reason why everyone can’t. 

Mr. GONZALEZ. Mr. Banks, do you disagree? 

Mr. BANKS. I think faster porting is good for consumers. Right 

now when our companies get ports from other customers, we don’t 

90 

get them in 4 days. When other companies ask us to port numbers 

to them, they don’t ask us to port them in 4 days. So I think there 

is some reason to think we ought to get to the 4 days first and then 

be careful how we put this requirement on smaller telephone and 

smaller cable companies that would have to mechanize their back 

offices and spend a lot of money to do things that aren’t really how 

they do business in small companies. 

Ms. AVGIRIS. If I could just clarify? 

Mr. GONZALEZ. You have 24 seconds in your response. 

Ms. AVGIRIS. The three largest providers, telecom companies, are 

all electronically bonded. Those are the companies that we believe 

should have a faster porting interval of 1 day. The smaller companies we can work with. 

Mr. GONZALEZ. Thank you very much. 

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

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentleman from Mississippi, Mr. Pickering. 

Mr. PICKERING. Thank you, Mr. Chairman. 

Mr. Banks, let us try to get to the compromise again but from 

a different direction. Earlier in your testimony, you had said that 

you could do away possibly with the deemed granted if you had 

strict timelines of certainty that the FCC had to act on a date certain. Is that something that you could accept? 

Mr. BANKS. Yes. I mean, our whole—the whole function of the 

deemed granted is to force the Commission to act in a world that 

has changed. 

Mr. PICKERING. So if you had appropriate forcing timetable shot 

clocks as part of reform, then you could support removing the language deemed granted? 

Mr. BANKS. If it would serve to give that incentive, a real incentive to the FCC to act, yes. 

Mr. PICKERING. Mr. Chairman, maybe that is the compromise, 

the right balance. I think everyone is concerned that in the first 

3 months of next year while we have a new Administration, it is 

very likely that we could have four Commissioners for an indefinite 

period of time. You could actually have congressional inaction combined with FCC inaction that would create a deadlocked Commission, and I think during that period of time, you could have a lot 

of unintended consequences of gaming of the current process that 

is not what anyone who is involved in the 1996 Act intended. I do 

think that we want regulatory certainty, and to the degree that we 

can force the FCC to act within a certain time period, I think that 

that is in everyone’s best interest, competitors and incumbents 

alike. 

Mr. Grivner, I was going to ask one other question, Mr. Banks. 

I saw you shaking your head when Ms. Avgiris said that the three 

largest can do electronic porting within 1 day. Is that something 

that you could support? 

Mr. BANKS. I am not sure about the 1 day but it is true that the 

largest carriers are electronically bonded in a way that lets them 

do lots more things than the carriers that are smaller than that. 

Mr. PICKERING. Right now, is it a 4-day? 

Mr. BANKS. Right now, it is a 4-day for, right, ports involving 

wireline companies. 

91 

Mr. PICKERING. But for the largest and best for the consumers 

in competition, we could probably change that to 1 or 2 days? 

Mr. BANKS. I think the easiest thing to move down is the people 

that have the bonding rather than the mid-sized and smaller carriers—well, carriers and cable companies both have more troubles. 

Mr. PICKERING. Thank you, Mr. Banks. 

Talking about regulatory certainty and timely action, I am going 

to come back to you, Mr. Grivner. 

Ms. Herda, pole attachments, one of my favorite subjects of all 

time. 

Ms. HERDA. I am sure. 

Mr. PICKERING. That is currently now pending before the FCC? 

Ms. HERDA. I am sorry? 

Mr. PICKERING. That proceeding on pole attachments is now in 

front of the FCC? 

Ms. HERDA. Yes. 

Mr. PICKERING. And how long has that been there? 

Ms. HERDA. Since January. 

Mr. PICKERING. Since January. Is there any announced time of 

action that they will take action? 

Ms. HERDA. No. 

Mr. PICKERING. But you want uniformity? 

Ms. HERDA. Yes. 

Mr. PICKERING. One rate? 

Ms. HERDA. Everybody to have the same rate. 

Mr. PICKERING. And then the certainty of FCC action? 

Ms. HERDA. Right. 

Mr. PICKERING. And what that rate is, you are somewhat flexible? 

Ms. HERDA. Just the rate, to reimburse them for costs obviously. 

It shouldn’t be a profit center for the pole owners but it should be 

fair and equitable. 

Mr. PICKERING. And right now you have the utility rate, the 

telecom rate and the cable rate. Is that correct? 

Ms. HERDA. Yes. 

Mr. PICKERING. So somewhere in between? 

Ms. HERDA. That is for the FCC to decide. 

Mr. PICKERING. But they need to decide soon. 

Ms. HERDA. Yes. 

Mr. PICKERING. Mr. Grivner, talking about regulatory certainty, 

you have invested $7 billion, and this goes back to the forbearance 

and why this is so important. If we had a change in regulatory policy that basically wiped out $7 billion of investment—for example, 

you have to have loops in transport to do your business. The $7 billion that you have invested in facilities, one regulatory decision 

could wipe out billions of dollars of investment and wipe out competitive choices. 

Mr. GRIVNER. Well put. The $7 billion that we have invested 

leads you right up to that customer promise and it is all behind 

that so that last piece of connectivity is critical to that $7 billion 

of investment. 

Mr. PICKERING. So decisions should be made correctly, thoughtfully, majority vote, and a certain process of transparency. I think 

that we can get there. 

92 

Mr. Chairman, this panel has been very helpful. I look forward 

to working with you to get the right balance. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentleman from Michigan, Mr. Upton. 

Mr. UPTON. Well, thank you, Mr. Chairman, and again, I appreciate the testimony from all of our witnesses and some of the questions here. 

I can remember when the 1996 Act was written and this provision was included, and I have to say as I listen to the testimony 

today—as Mr. Banks said to one of the responders, one of the questions, we all want a deadline. We are fed up when the deadlines 

pass us by. And I have to say, at least from my vantage point, I 

think it is worse today than it ever was in the 1990s. I can’t tell 

you how many times I have seen some of the Commissioners or we 

have made a call or written a letter, talked to them about some 

deadline, you are assured that it is going to come by and it doesn’t 

happen, and consequently, as you look at the different petitions 

that have been deemed granted, 91 petitions have been filed. Only 

four have been deemed granted, and as the staff has looked into 

those four, three of them were not controversial at all and the one 

that was, was this one that was on a two-two vote and that was 

before Commissioner McDowell had been on, so someone didn’t 

recuse themselves so it was a two-to-two tie, and as I understand 

it, Mr. Copps and Adelstein had wanted to prevent the entire petition from being deemed granted. They probably, I am guessing, 

could have reached for a compromise at least in some part as it related to the denial in that part and I guess you could see a parallel 

between what happened when we had a two-two split over the 

AT&T/Bell South deal when of course McDowell did take himself 

out, recusal, which I remember that deadline went on forever as 

well. So when you know something like that is going to happen, 

but the question I have, if it ain’t broke, why fix it if it is only really one. Is there only really one so far of this 91? Is the staff correct 

that it is only really one of 91 that are in rough water? 

Mr. BANKS. Yes, your numbers are correct. There is only the 

Verizon petition that has caused any controversy, but the controversy has been among the FCC people. I don’t know that there 

has been any controversy in the marketplace about the effect of 

that order. Verizon, as I understand it, has gone out and used the 

freedom to sign contracts with customers. 

Mr. UPTON. But what this provision did was, it really put the 

gun to the FCC’s head that they really had to live by the shot clock 

that they wanted, right? 

Mr. BANKS. Yes, and to be fair, I think it is difficult to identify 

anything else that will really make the FCC act but that is the 

crux of the problem. 

Mr. UPTON. We have tried. We have sent them brownies. We 

have done a bunch of different things. We have gone down to visit. 

Let me ask one other question, Mr. Banks, and this I think came 

up in a related question I think to Mr. Salmon. Isn’t the deemed 

granted provision similar to the statutory sunset provision like program access except that it gives the added protection of giving the 

FCC the opportunity to prevent the sunset if they so desire? 

93 

Mr. BANKS. That is a very interesting point, and Congress put 

a number of sunset provisions in the 1996 Act including on some 

of the special extra long-distance safeguards and those expired 

after 3 years, the ones I can think of. So you are absolutely correct 

that is like the sunset provisions. 

Mr. UPTON. That is a good note for me to end on. I yield back 

my time. Thank you. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentleman from Nebraska, Mr. Terry. 

Mr. TERRY. Thank you, Mr. Chairman, and I would agree with 

several of the comments made. I have empathy for everyone here. 

Mr. Grivner, I especially appreciate the level of investment. I came 

right after the passage of the 1996 Telecom Act but I engaged in 

the discussions that undoubtedly occurred during passage of what 

to do if the FCC doesn’t act. I think that, as Mr. Upton pointed out, 

a very real concern as we develop policies and one of the policies 

in the 1996 Act was opening up the incumbents’ networks, their infrastructure for competition because we wanted competition, and I 

still think we want competition today, especially as there is a convergence or merging within the incumbent industries. So working 

through this, though if there is some unnecessary or unfair regulation that is hindering the ability of the incumbent to compete, and 

I come from an area where there is good competition between capable and the incumbent. In fact, the incumbent is the minority carrier now. So I come from a different world or perspective. But I am 

just wondering as we work through some options here if a deadline 

really works. What are the consequences to the FCC if we say you 

have to do this by 90 days of the filing of the petition, and then 

there is consequence. Then they still go to a year or 6 months or 

whatever, and I am sure that the deemed granted was to put in 

a consequence. So I am not sure we gain anything here if we just 

put in a date or shot clock without any consequence. 

So, Mr. Banks, I want you to get to that next question of what 

should be the consequence if the FCC misses the deadline that is 

set? What would be the world without the deemed granted if there 

are no consequences? 

Mr. BANKS. I think without the deemed granted, we are likely to 

be in a world where the FCC would not have changed any of the 

rules for Omaha, even though the market had basically flipped 

head over heels. So without consequences, I think the fact that we 

have consequences here is why the FCC has ruled on essentially 

every forbearance petition that has come before it or along the lines 

of the numbers Mr. Stearns gave. So it has been effective and it 

has left us with the one Verizon issue out of the 89 petitions. 

Mr. TERRY. I appreciate that. 

Mr. Grivner, during one of your answers to the questions to Mr. 

Stearns, when you were working through the possibilities of compromise, you mentioned that it is a flawed process, and what went 

through my mind when you said that is whether or not the incumbent should ever receive forbearance. 

Mr. GRIVNER. Should ever receive forbearance? 

Mr. TERRY. Should receive forbearance. I guess what I am trying 

to ask you is, do they deserve it in any situation? 

94 

Mr. GRIVNER. Well, I actually referred to it as forgiveness because really what forbearance has been is a peeling back of the 

1996 Act piece by piece. So if we go back and look at the complete 

history—by the way, everybody you ask that was here in 1996 and 

you ask about forbearance, no one raises their hand as being the 

author of that, which I find interesting. But if you peel it back, 

there were certain conditions that had to be met on both sides to 

create a competitive landscape, and as the years have gone by, 

those kind of even-steven things have been pulled back from the 

competitive industry, and forbearance is just a very, very strange 

process where a two-two vote, whether it be the Supreme Court, 

and God forbid—— 

Mr. TERRY. But eliminating the two-two vote discussion here, because I think we all pretty much agree that needs remedied in 

some way but—— 

Mr. GRIVNER. I think there has to be a reasonable and complete 

submission of data that has to be analyzed by the FCC staff. Let 

us make it a fight. Let us make it a game. Let us not make it a 

basketball game where two teams show up and only two referees 

show up and the other team says I win because only two showed 

up. Let us make it a real game and let us make it a fight, put your 

stuff on the floor. 

Mr. TERRY. Thank you. 

Mr. MARKEY. Mr. Grivner, were you a basketball player at some 

point? 

Mr. GRIVNER. As I understand it, Mr. Chairman, you used to be 

one but a series of injuries have hobbled you. 

Mr. MARKEY. I am feeling your pain, Mr. Grivner. 

So we will go another round here, if we can, for maybe 3 minutes 

a piece from the members if they have any additional questions, 

and I will just say, Mr. Terry, we have been trying actually for 

years to find out which Senator actually stuck in these words over 

in the Senate during this conference committee, but again, they 

had a code of omerta over there which protects each other on a bipartisan basis, but there is kind of a Rosemary’s Baby quality to 

this one provision that everyone accepts the fact that it is an incredibly important storyline but no wants to take credit for the law 

of unintended consequences taken to the pluperfect form that it has 

resulted in. But that is the way the Senate operates. 

Let me turn to you, Ms. Avgiris. Recently Vermont Telecommunications Company denied interconnection on the basis that it only 

had to do so for telecom carriers. So here is Comcast, the fourth 

largest telephone provider in America, being told you are not a 

telecommunications company, and as a result, they can deny you 

interconnection. Can you talk about the implications of the Federal 

Communications Commission determining that Comcast is not a 

telecommunications company for the purposes of interconnection in 

terms of what that represents for competition in Vermont and in 

other States? 

Ms. AVGIRIS. Well, regardless of regulatory classification, interconnection is the fundamental ability of our company to serve our 

customers and exchange traffic with other people so everyone can 

call everyone else. Specifically in the Vermont telephone company 

case, it is not the affiliate, and every company has affiliates. We 

95 

have a retail affiliate that provides an information service which is 

called Comcast Digital Voice that provides features and 

functionality that is much different than what basic telephone is. 

They are not the ones that asked for interconnection. There is another affiliate of Comcast that is a certificated telecommunications 

carrier in each of the 38 States that it provides telecommunications 

services to its clients. That is the entity that asked for it. It meets 

all the obligations of being a telecommunications carrier, supports 

the State 911 universal service fund, interconnection, local number 

porting, and that is where the rub comes because it is—they are 

a certificated CLEC and have the rights and responsibilities to 

interconnect with everyone. 

Mr. MARKEY. I think it is a perfect example of how something 

has gone terribly awry when the people of Vermont are denied this 

competitive opportunity that would give them alternative service 

and potentially lower prices and higher quality of service. It just 

is perverse to me that a very narrow interpretation of what is a 

qualifying company should be able to affect consumers so negatively. 

Let me turn to you, Mr. Banks. When we get to this question of 

whether or not your telephone number is portable, if somebody 

wants to switch from one cell phone company to another cell phone 

company, it takes 2 hours to switch the number, and the cell phone 

companies, that is the large telephone companies that you are here 

representing, although you are not here representing them in that 

form, but they are able to do it in 2 hours. So the question I have 

for you Mr. Banks is why do the same companies take 4 days if 

the same consumer wants to move their wireline service over to another company? Why should it take so long? What is the technological problem at these companies? 

Mr. BANKS. I think it revolves around companies’ operating systems. The wireless carriers are essentially the envy of everyone in 

terms of the newness of their networks and the newness of 

their—— 

Mr. MARKEY. But they are the same companies in terms of their 

CEO, their executive vice president, their chief technology officers. 

They are all the same people. Why can’t they figure out how to cut 

it down from 4 days down to 2 hours the way their cell phone wing 

does in ensuring that consumers keep their same cell phone number as they switch companies? 

Mr. BANKS. Well, you are right that they are owned by the same 

people but they grew up in different worlds and built themselves 

different systems and are in different places in terms of their capital and who can invest in upgrading systems and which part of the 

company is a growth part. So there are systems issues. But it is 

true that the largest carriers have better systems and the mediumsized and smaller carriers—— 

Mr. MARKEY. But how hard can it be just to e-mail to someone 

else inside of the telephone company and say this customer wants 

to switch companies? How long does that take inside of Verizon or 

AT&T? Is that a 4-day process to e-mail? 

Mr. BANKS. No. Verizon and AT&T do this process generally in 

under 4 days and report the data on that to every State as part 

of their 271 filing. 

96 

Mr. MARKEY. Do they ever have meetings, I am wondering, at 

Verizon or AT&T where they bring the cell phone executives over 

to talk to the wireline executives about how they do it? Do they 

ever have meetings like that? 

Mr. BANKS. Well, the North American Numbering Council has 

meetings all the time. 

Mr. MARKEY. I am talking about inside the company. Do any of 

these executives ever meet and talk and they can explain the new 

modern system that the cell phone wing uses in order to do number 

portability? 

Mr. BANKS. Yes, and I think at those meetings the wireless people say that 16 percent of your customers have dropped you and 

come to us, so ha ha. 

Mr. MARKEY. But it takes 4 days. Aha, they say back. That is 

our revenge. We don’t allow it to happen overnight. But I bet you 

it doesn’t take 4 days inside a company. 

Mr. Grivner? 

Mr. GRIVNER. Same question? 

Mr. MARKEY. No, I am fine. I thought you had your hand up. 

Mr. GRIVNER. No, no. 

Mr. MARKEY. My time has expired. Let me turn and recognize 

the gentleman from Florida. 

Mr. STEARNS. Thank you, Mr. Chairman. 

This is a question for the entire panel again and it is dealing 

with pole attachment rates. I think a lot of us agree there is no 

rhyme or reason towards the pole attachment rates that are currently being applied, and I guess the question for each of you is, 

shouldn’t the FCC create a uniform pole attachment regime and 

perhaps what would that regime look like? Mr. Banks, I will start 

with you and then I will go down. 

Mr. BANKS. So I am in complete agreement with Time Warner 

Telecom that that the system needs to be rationalized, that people 

that are attaching to a pole to provide a broadband service with the 

same attachment ought to pay the same price, and that is just a 

matter of rationalizing the prices and applying them uniformly to 

everyone. I think that would certainly help our companies that pay 

an awful lot more than others with our broadband deployment. 

Mr. STEARNS. Ms. Avgiris? 

Ms. AVGIRIS. It is well established both at the FCC and in the 

Supreme Court that the cable rates that have been established for 

pole attachments are more than compensatory, so while we absolutely support a uniform rate and it has to be fair and cost-based 

for the same attachment, we believe it should be the cable rate. 

Otherwise all you are doing is adversely impacting cable broadband 

customers. 

Mr. STEARNS. You just raised another question with me. Would 

you support amending the forbearance provision so it grants cable 

companies deregulatory relief as well? 

Ms. AVGIRIS. As it relates to forbearance, the video space is much 

more competitive. In the voice space, which is what I am here to 

talk about, there are a lot of complex provisions, and we believe 

that the safeguards that are there to protect certain rules need 

careful analysis and so I think the same rules apply. 

97 

Mr. STEARNS. Mr. Grivner, going back to the original question 

dealing with the pole attachment rates. 

Mr. GRIVNER. Uniform pricing and also uniform service level 

agreements as well. 

Mr. STEARNS. Ms. Herda? 

Ms. HERDA. Same thing, uniform pricing, uniform service agreements, and we agree with Ms. Avgiris with regard to the cable 

rates. 

Mr. STEARNS. Matt? 

Mr. SALMON. Same thing, and on the whole idea of the shot 

clock, we would like a shot clock for that. We would also like a shot 

clock for special access where we are paying exorbitant rates and 

they haven’t fixed that problem, a shot clock for USF reform. I 

could go on and on and on, but what is fit for the goose is fit for 

the gander. 

Mr. STEARNS. Do you think that should be deemed granted? 

Mr. SALMON. I am sorry? 

Mr. STEARNS. Do you think it should be deemed granted? 

Mr. SALMON. No, I just don’t think that is good policy, and on 

the whole deemed granted, let me just take a second because Congressman Upton pointed out that there are very few instances 

where deemed granted has actually kicked in. That is only part of 

the problem. The bigger part of the problem with the whole deemed 

granted language is that it encourages companies to file incomplete 

petitions because it is one of the only things that has a shot clock 

and a deemed granted provision. So they filed these frivolous petitions that are incomplete and then at the very last minute they 

throw a bunch of stuff, and like Chairman Markey pointed out, 

pray that something sticks. That is the bigger part of the problem 

that it just runs the whole process askew. 

Mr. STEARNS. Thank you, Mr. Chairman. As Mr. Salmon just 

pointed out, I think what I talked about earlier about a legitimate 

compromise here, just making the deadlines for filing amendments 

and additional evidence just stark and these deadlines are real 

deadlines and they cannot be amended or changed, and by then 

you would know everything and you wouldn’t be concerned about 

what the final outlook was because during the comment period everybody knows, so I hope, Mr. Chairman, that perhaps the suggestion I make would be part of the process here. Thank you. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentleman from Texas, Mr. Gonzalez. 

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

Ms. Herda, I am going to ask a basic question and everybody in 

the audience probably knows the answer but I am trying to figure 

it out. I want to switch service, I come to you, and so there has 

to be an effective termination date communicated to my old carrier 

and an effective start date with you, right? 

Ms. HERDA. Right. 

Mr. GONZALEZ. How then does this portability timeframe play 

into that equation? 

Ms. HERDA. It is different for our services since we sell business 

services and they are complex telephone services, so I think it is 

a bit different from what Comcast is looking for. It is more likely 

that we would need more time to be able to port those services. 

98 

Mr. GONZALEZ. I guess the curiosity is just one starts at a certain 

time, and the calculation. I guess maybe I am missing the whole 

concept about the portability of numbers, the way you identified it, 

in other words, so that people will continue the same business and 

so on. I mean, that is the whole convenience part of it. I am just 

saying that it has to end at a certain time with the old carrier and 

then the new service has to then assume that that new number is 

fully operable. Is there some caveat out there to the customer, hey, 

listen before all that can be accomplished, it is going to take X 

amount of time? 

Ms. HERDA. Yes. When we communicate with our customers—— 

Mr. GONZALEZ. So that would mean then I would be carried with 

my old service for a longer period of time because there is this 4- 

day interval? 

Ms. HERDA. Generally with our services, since we focus on selling 

to just business customers, we also have a facility that is going into 

that customer that takes some time to construct, so we set timeframes for intervals for service which are generally longer than few 

hours. It is very different from the wireless business or maybe the 

very small business customers that Comcast services. 

Mr. GONZALEZ. Does anybody else wish to comment just on the 

observation that time plays to the advantage of someone in that 

particular scenario and maybe even a bottom line? 

Ms. AVGIRIS. The local number interval does present a beginning 

and an end date and the beginning date is when the competing carrier requests the number to be exchanged from the incumbent carrier, and they set a firm order commitment for a particular date 

and it is a question of what is the process internally to complete 

that transaction, share that information between the carriers and 

expedite the port request of the consumer to change service because the whole point behind local number portability is to enable 

competition and to enable choice. 

Mr. GONZALEZ. The longer it takes to complete the transaction to 

get the number ported or whatever it is, obviously then I am being 

carried by my old service—— 

Ms. AVGIRIS. And I may not get the savings that I could otherwise get. 

Mr. GONZALEZ. Thank you very much. Yield back. 

Mr. MARKEY. The chair recognizes the gentleman from Mississippi, Mr. Pickering. 

Mr. PICKERING. Mr. Chairman, thank you, and just for historical 

context, I believe it was Senator Dole and Senator Pressler who 

came up with the forbearance provision, and I happen to think that 

the forbearance process is actually a healthy way to keep the Act 

alive, dynamic, organic, as things change, it can evolve, but it 

needs to be done right and your bill addresses how to do it right. 

And to Mr. Banks and Congressman Gonzalez, I think the bottom line on the portability—— 

Mr. MARKEY. By the way, if I may, if the gentleman would yield, 

the gentleman from Mississippi was on Senator Lott’s staff at the 

time and he would have access to meetings that I as a Democrat 

would not have had access to. So we thank him for clarifying the 

historical reference. 

Mr. PICKERING. Just for history. 

99 

Mr. Banks and to Congressman Gonzalez, I think the real issue 

here is—you said something interesting—you said the difference 

between wireless and wireline, they grew up differently, different 

cultures, but wireless is the growth part of their business, and the 

more they port, the more they grow. The faster they port, the faster 

they grow, and what Verizon and AT&T have found out, once they 

get down to number portability on wireless is that they benefited 

from that. They are growing because more people are switching to 

them. Now, on the other hand, on their wireline side, as cable enters, they are losing customers so that is the losing side of their 

business, and this gets to their bottom line. They want to slow 

down what they lose and they want to speed up what they gain, 

and I think the fair thing to do is to have some uniformity of 

wireline and wireless porting. If this was not technologically feasible to do one issue but this is fairness, level playing field, procompetitive, pro-consumer, pro-choice for everybody and I think 

that we ought to get a portability policy that is same whether it 

is wireless or wireline or something comparable that is reasonable 

with some differences between small companies and large companies. That was more of a comment than a question. 

Let me go back to pole attachments. Ms. Herda, Mr. Grivner, Ms. 

Avgiris, I think you are all on record of supporting the current 

cable rate. Is that correct? 

Ms. HERDA. Yes. 

Mr. PICKERING. And that does have something to do with competition. The more you pay in pole attachments, the less you can 

build out, deploy and compete in other areas, and I think that that 

would be the same for you, Mr. Salmon. So you all would support 

the current cable. Mr. Banks, you would support some uniform 

compromise. Is that correct? 

Mr. BANKS. Yes. I do think that it is important that we also remember that this money goes to support facilities, utility poles that 

we need and it is important to ensure that pole owners, which are 

principally utilities, get enough money that we do have poles when 

we need them. 

Mr. PICKERING. I see that my time is running out. The last thing 

that I would encourage, I do hope that we can get an interconnection policy, Mr. Chairman, if not this Congress, then the next Congress. It is a basic fundamental. It makes the market function. 

Without interconnection policy, we really ought to go home and 

pack it up. It is just a simple, fair way to make all consumers be 

able to complete a call on one network to another and it ensures 

a functioning marketplace. With that, I yield back, Mr. Chairman. 

Mr. MARKEY. I thank the gentleman, and I know the gentleman 

is going home and packing it up, but it all depends on what kind 

of going home and packing it up you are talking about. If the Federal Communications Commission is going home and packing it up 

without actually providing interconnection, that is not a good thing. 

So we are going to finish up by asking each one of you to give 

us a 1-minute summation of what it is that you want us to remember out of this hearing. We will start with you, Mr. Salmon, if you 

could give us your 1-minute summation. 

Mr. SALMON. We have been asked what our druthers are, and I 

think our druthers are, we would like to see section 10 scrapped 

100 

altogether, but this is a good first step and one that we support. 

I think that all of us understand that the most important thing 

that we want in public policy is to make sure that America continues to prosper and continues to grow with technological advancements in the telecommunications realm. We would like to be 

first in the world. That is only going to happen with a very, very 

competitive, robust telecommunications sector, and we are proud to 

be part of that and we would like to move forward in tandem with 

the ILECs as friends singing Kumbaya. Unfortunately, that doesn’t 

happen all the time. 

Mr. MARKEY. Thank you, Mr. Salmon. 

Ms. Herda. 

Ms. HERDA. Yes, I would agree with Mr. Salmon in that I believe 

that forbearance basically gives the FCC authority to rewrite the 

Act and I think that is Congress’s job. I am uncomfortable delegating that rewriting the Act to the FCC. With regard to pole attachments, we are just looking for a unitary rate for everybody to 

be on a level playing field so that when we all compete, we are 

coming from the same set of cost base, and that is it. 

Mr. MARKEY. Thank you. 

Mr. Grivner. 

Mr. GRIVNER. Move 3914 forward. Copper is not dead and electronic bonding is possible for all companies whether they are wireless or wireline. Thank you. 

Mr. MARKEY. That is a Kumbaya moment, electronic bonding. 

Ms. Avgiris. 

Ms. AVGIRIS. Comcast is all about pro-competition, pro-consumer 

choice. All of our positions on local number porting are about more 

choice for consumers. Interconnection provides us the ability to 

complete, and without that we really would be waving away the 

$111 billion that consumers can save. 

Mr. MARKEY. And Mr. Banks, you have the final word. 

Mr. BANKS. The presumption in 1996 was that regulation 

shouldn’t stay through inertia and that is why we have section 10 

and that is why we have section 11. The world has changed now 

when Comcast is the number 4 phone company. So there is no reason to keep regulations through inertia. Of the 91 forbearance petitions filed, most are narrow. They deal with discreet sub-issues of 

telecom regulation, and the Commission has successfully come out 

with orders in all but one of those and that is the Verizon thing. 

I think the process is working and it is getting orders out of the 

FCC. I point you to the court remand that took three years of the 

FCC reporting every month to the district court before a court 

hearing and an order so we do something to make the FCC work. 

Mr. MARKEY. Thank you, Mr. Banks, very much. We thank all 

of you. We do have a looming problem because we could have a 

two-to-two vote at the FCC by the end of this year. In fact, it is 

very likely that that is going to be the case and that would be absolutely historically unacceptable, and it is important for us to get 

this policy right because, as you said, Mr. Banks, in your testimony, 50 percent of the growth in the American economy comes in 

this telecommunications and technology sector. It is not widely understood that 50 percent of the growth comes there but it does and 

it makes all of these decisions central to whether or not we are 

101 

going to continue to see the job growth here and the lowering of 

the cost of communications to all industries. 

With that, we thank this panel and this hearing is adjourned. 

[Whereupon, at 3:52 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

PREPARED STATEMENT OF HON. JOHN D. DINGELL

Today we examine the state of competition in the telecommunications marketplace. Sound telecommunications policy should spur competition between providers, 

bringing lower prices, more innovative services, and better service quality to consumers. But ill-conceived or poorly executed policy represents a lost opportunity for 

such consumer gains. 

Section 10 of the Communications Act, which we will discuss today, was added 

by Congress to ensure that the statute kept pace with changes in technology and 

in the marketplace. It permits providers to request that the Federal Communications Commission (FCC) forbear from enforcing certain laws or regulations, when 

such laws or regulations are no longer necessary to protect the consumer. It further 

provides that if the FCC does not act on a forbearance petition by a date certain, 

then the provider’s request that the FCC not enforce a particular law or regulation 

is automatically granted. 

This provision is dangerous and bad policy because it allows agency action to take 

effect without any formal vote or supporting record. Consumers and companies then 

have no right or recourse when the lack of enforcement harms consumers. 

We are familiar with the episode in 2006 when a four-member Commission was 

evenly divided on the merits of a forbearance petition and was therefore unable to 

act. Because the deadline passed with no Commission action, the petition was 

deemed granted and a host of regulations were tossed aside. Making matters worse, 

the Commission failed to issue an Order explaining the scope of relief granted, 

which prevented Congress from conducting appropriate oversight and precluded 

meaningful judicial review. 

This must not happen again. At any time we could find ourselves with just four 

commissioners having to address forbearance petitions under the ‘‘deemed granted’’ 

regime. 

In an effort to remedy this problem, Chairman Markey and I introduced H.R. 

3914, the ‘‘Protecting Consumers through Proper Forbearance Procedures Act.’’ Our 

bill simply removes the ‘‘deemed granted’’ language from the statute to ensure that 

agency decisions are fully transparent and that affected parties—including consumers—have full legal recourse. 

I am also concerned with the Commission’s process for reviewing forbearance petitions. The Commission must ensure that the forbearance process is fair, open, and 

transparent. Too often, industry petitioners have rigged the process, by filing 

amended petitions late so that opposing parties have no meaningful opportunity to 

respond. I applaud the Commission for opening a proceeding to reform the process, 

and I urge that it be concluded in a manner that serves the public interest and protects consumers. 

We will also consider several other issues today, and I am disappointed that some 

of the companies most interested in these issues declined our invitations to testify. 

For example, Verizon has spent considerable time discussing the issue of retention 

marketing, and Verizon and AT&T have lobbied the Commission about pole attachments. I am disappointed that we will not benefit from their expertise as we consider these important issues. 

Furthermore, this is a legislative hearing on H.R. 3914, which I understand these 

two companies do not support. I am saddened they are not here to more fully explain their views and to answer polite questions I intended to ask them. 

I thank the Chairman once again for considering these important matters. I hope 

that the panel will assist us in building a sound record so that we may thoughtfully 

move forward with carefully crafted legislation. 

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