```

[Senate Hearing 113-132]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 113-132
 
                           OVERSIGHT OF THE 
                   FEDERAL COMMUNICATIONS COMMISSION 

=======================================================================

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 12, 2013

                               __________

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

                               ----------
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

            JOHN D. ROCKEFELLER IV, West Virginia, Chairman
BARBARA BOXER, California            JOHN THUNE, South Dakota, Ranking
BILL NELSON, Florida                 ROGER F. WICKER, Mississippi
MARIA CANTWELL, Washington           ROY BLUNT, Missouri
FRANK R. LAUTENBERG, New Jersey      MARCO RUBIO, Florida
MARK PRYOR, Arkansas                 KELLY AYOTTE, New Hampshire
CLAIRE McCASKILL, Missouri           DEAN HELLER, Nevada
AMY KLOBUCHAR, Minnesota             DAN COATS, Indiana
MARK WARNER, Virginia                TIM SCOTT, South Carolina
MARK BEGICH, Alaska                  TED CRUZ, Texas
RICHARD BLUMENTHAL, Connecticut      DEB FISCHER, Nebraska
BRIAN SCHATZ, Hawaii                 RON JOHNSON, Wisconsin
WILLIAM COWAN, Massachusetts
                    Ellen L. Doneski, Staff Director
                   James Reid, Deputy Staff Director
                     John Williams, General Counsel
              David Schwietert, Republican Staff Director
              Nick Rossi, Republican Deputy Staff Director
   Rebecca Seidel, Republican General Counsel and Chief Investigator

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 12, 2013...................................     1
Statement of Senator Pryor.......................................     1
Statement of Senator Thune.......................................     3
Statement of Senator Rockefeller.................................     8
Statement of Senator Wicker......................................    10
Statement of Senator Ayotte......................................    38
Statement of Senator Blunt.......................................    40
Statement of Senator Coats.......................................    45
Statement of Senator Fischer.....................................    49
Statement of Senator Heller......................................    51
Statement of Senator Warner......................................    52
Statement of Senator Klobuchar...................................    54
Statement of Senator Rubio.......................................    57
Statement of Senator Blumenthal..................................    59
Statement of Senator Nelson......................................    61
Statement of Senator Begich......................................    64
Statement of Senator Cruz........................................    67
Statement of Senator Cantwell....................................    69

                               Witnesses

Hon. Julius Genachowski, Chairman, Federal Communications 
  Commission.....................................................     4
    Prepared statement...........................................     6
Hon. Robert M. McDowell, Commissioner, Federal Communications 
  Commission; accompanied by Hon. Mignon L. Clyburn, 
  Commissioner, Federal Communications Commission; Hon. Jessica 
  Rosenworcel, Commissioner, Federal Communications Commission; 
  and Hon. Ajit Pai, Commissioner, Federal Communications 
  Commission.....................................................    11
    Prepared statement of Hon. Robert M. McDowell................    13
    Prepared statement of Hon. Mignon L. Clyburn.................    21
    Prepared statement of Hon. Jessica Rosenworcel...............    23
    Prepared statement of Hon. Ajit Pai..........................    27

                                Appendix

Response to written questions submitted to Hon. Julius 
  Genachowski by:
    Hon. John D. Rockefeller IV..................................    73
    Hon. Barbara Boxer...........................................    74
    Hon. Bill Nelson.............................................    78
    Hon. Frank R. Lautenberg.....................................    80
    Hon. Claire McCaskill........................................    81
    Hon. Amy Klobuchar...........................................    83
    Hon. Richard Blumenthal......................................    84
    Hon. William M. Cowan........................................    86
    Hon. Roger F. Wicker.........................................    87
    Hon. Roy Blunt...............................................    89
    Hon. Kelly Ayotte............................................    89
    Hon. Dean Heller.............................................    90
    Hon. Dan Coats...............................................    92
Response to written questions submitted to Hon. Robert M. 
  McDowell by:
    Hon. Barbara Boxer...........................................    92
    Hon. Frank R. Lautenberg.....................................    94
    Hon. Claire McCaskill........................................    94
    Hon. Richard Blumenthal......................................    97
    Hon. William M. Cowan........................................    98
    Hon. Kelly Ayotte............................................    99
    Hon. Dean Heller.............................................    99
Response to written questions submitted to Hon. Mignon L. Clyburn 
  by:
    Hon. Barbara Boxer...........................................   101
    Hon. Frank R. Lautenberg.....................................   103
    Hon. Claire McCaskill........................................   104
    Hon. Richard Blumenthal......................................   107
    Hon. William M. Cowan........................................   108
    Hon. Kelly Ayotte............................................   109
    Hon. Dean Heller.............................................   109
Response to written questions submitted to Hon. Jessica 
  Rosenworcel by:
    Hon. Barbara Boxer...........................................   112
    Hon. Frank R. Lautenberg.....................................   113
    Hon. Claire McCaskill........................................   114
    Hon. Amy Klobuchar...........................................   117
    Hon. Richard Blumenthal......................................   118
    Hon. John Thune..............................................   119
    Hon. Dean Heller.............................................   120
Response to written questions submitted to Hon. Ajit Pai by:
    Hon. Barbara Boxer...........................................   123
    Hon. Claire McCaskill........................................   124
    Hon. Richard Blumenthal......................................   126
    Hon. Dean Heller.............................................   127

                           OVERSIGHT OF THE 
                   FEDERAL COMMUNICATIONS COMMISSION

                              ----------                              

                        TUESDAY, MARCH 12, 2013

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:52 p.m. in room 
SR-253, Russell Senate Office Building, Hon. Mark Pryor, 
presiding.

             OPENING STATEMENT OF HON. MARK PRYOR, 
                   U.S. SENATOR FROM ARKANSAS

    Senator Pryor. I am going to go ahead and call us to order 
here, so why doesn't everybody find their seats, please. We 
will go ahead and call this meeting to order.
    I want to say thank you. Chairman Rockefeller is on his way 
with the rest of the Democrats. So, Senator Thune, this is the 
moment we have been waiting for, right? Isn't that right?
    [Laughter.]
    Senator Thune. Let's do some business, Mr. Chairman.
    Senator Pryor. Yes, now we can do some good around here.
    Senator Thune. Mark, you didn't get invited to the lunch?
    Senator Pryor. No. They kicked me out of the lunch a long 
time ago.
    No, actually, Senator Rockefeller wanted me to come to get 
this launched because we know that several Members here and 
several Members of the Commission have tight schedules. So let 
me just say--I am not going to try to give Senator 
Rockefeller's opening statement. What I will do is--we will 
just proceed until he is able to get here.
    So let me just say, for my part, I am pleased to serve as 
Chairman of the Communications, Technology, and Internet 
Subcommittee. And, together with Ranking Member Wicker and all 
other of the Committee and Subcommittee members, I want to look 
forward to a bipartisan exchange of views on all the key 
policies that are in that Subcommittee's jurisdiction and also 
that the FCC has jurisdiction over, as well.
    In today's fast-changing information and communications 
technology environment, it is vital that the Committee and the 
Subcommittee take a fresh look at the regulatory consumer 
landscape. That is why I announced yesterday that the 
Subcommittee will hold a series of hearings to examine the 
state of various communications markets. I think all the 
Committee and Subcommittee members will have the benefit of 
hearing from stakeholders on the opportunities and the 
challenges that they face. So we are going to do Subcommittee 
hearings on wireless communications, wired communications, 
video, and rural communications. So all of these are kind of 
``state of'' hearings to find out what the lay of the land is 
right now.
    As the Subcommittee begins its examination, I believe we 
should keep several key principles in mind. Foremost, we need 
to ensure that investment continues to support the expansion of 
technology advancements in broadband connectivity. This 
includes our commitment to ensuring access to robust broadband 
to support 21st-century smart choices in things like health 
care, education, energy, and job creation.
    We must also make sure that consumer confidence in our 
communications networks and policies is there. This includes 
continued work on practical steps for online privacy and 
safety. And we must aggressively fight fraud and abuse.
    I want to thank all five FCC Commissioners for being here 
today. I know you all have a lot on your plate, and I 
appreciate hearing from you on the issues before your agency. 
And I am particularly interested in your work on the pending 
broadcast television incentive auctions, a topic which the 
Subcommittee is also planning to explore.
    I was pleased that the February 2012 public safety spectrum 
legislation provided the Commission with the authority to 
conduct incentive auctions. This authority hopes to bridge the 
need for additional wireless spectrum through a voluntary 
program under which the broadcasters can trade spectrum usage 
rights in exchange for a share of the proceeds. The proper 
groundwork for these new auctions is essential to ensure that 
the full benefit of this new authority is realized by all 
stakeholders.
    I expect the FCC's work on these auctions to be faithful to 
the statute, which I know it will be. Congress tried to 
carefully balance competing concerns in the statute to free up 
much-needed spectrum for wireless broadband while ensuring a 
healthy future for the broadcast industry and while recognizing 
the greater goal of modernizing public safety communications 
for mobile broadband.
    Which brings me to Senator Rockefeller's favorite topic, 
which is FirstNet. These incentive auctions should provide a 
critical $7 billion in dedicated funding for a nationwide 
wireless broadband network for public safety. This network will 
provide a new era of lifesaving communication and efficiencies 
for first responders. It will equip our firefighters, police 
officers, and medical responders with the tools they need to 
communicate with each other in real time during crises around 
the country and across state lines.
    Finally, I want to touch on your ongoing implementation of 
the 21st Century Communications and Video Accessibility Act. As 
you know, I was the primary of this legislation. The CVAA is 
incredibly important for the economy. Already, millions of 
Americans are able to more fully contribute to the economy 
because of the law. I will continue to closely monitor your 
work, and I look forward to doing that. And I look forward to 
hearing from you and get an update on your efforts.
    In closing, there are a host of other issues, from being 
vigilant against consequences of texting while driving to 
universal service to the future of rural communications 
networks. And I look forward to reviewing with my colleagues 
all of these issues and look forward to working with the 
Commission on all of them.
    Senator Thune, if you are ready, I will turn it over to 
you.

                 STATEMENT OF HON. JOHN THUNE, 
                 U.S. SENATOR FROM SOUTH DAKOTA

    Senator Thune. Great. Thank you, Mr. Chairman. I want to 
thank you and Chairman Rockefeller for holding this hearing and 
want to welcome Chairman Genachowski and all the members of the 
Commission before us today. Thank you all for being here.
    This is an important subject matter, and your Subcommittee 
is obviously going to be a very busy one. And, obviously, as 
you can tell by the turnout today, a lot of interest. I am glad 
to see the great representation we have from members on our 
side. And I hope that we get an opportunity to have a little 
interaction with the Commissioners as we move forward.
    We are living in the middle of a digital revolution, which 
is being powered, in large part, by the huge investments made 
by the broadband industry. There is enormous potential for job 
creation and innovation in the broadband, Internet, and 
technology sectors, and this potential may be most evident in 
the area of mobile broadband.
    According to a recent Cisco report, mobile data traffic in 
the United States grew 62 percent last year, and by 2017 there 
will be a thirteenfold increase worldwide. By one estimate, the 
Nation's mobile broadband industry directly or indirectly 
supports 3.8 million jobs, contributing more than $195 billion 
to the U.S. gross domestic product and driving $33 billion in 
productivity improvements in 2011 alone.
    Unfortunately, a single point of failure under the 
government's control could jeopardize this great potential for 
job creation and innovation, and that is access to wireless 
spectrum. Mobility is driving the innovation economy, and 
spectrum is what fuels wireless mobility. Without enough 
spectrum, the private sector will not be able to keep pace with 
consumer demand, which is growing exponentially. That is why we 
must make it a priority to increase the availability of 
spectrum for commercial uses as quickly as possible and to do 
so in collaboration with industry and government stakeholders.
    More broadly, I believe we also must focus on establishing 
a 21st century legal and regulatory structure that serves the 
purposes of our 21st century economy. It is time for this 
committee to take a look at modernizing our nation's rules and 
regulations to better reflect today's converged marketplace. 
Our technology and telecommunications sectors have been 
profoundly changed by the Internet, yet much of our country's 
communications laws were written in a pre-Internet world.
    These sectors are characterized by extremely dynamic 
companies, and we must ensure that the FCC is as nimble as they 
are. It has been 23 years since this FCC was last reauthorized 
by Congress, and it may be time to develop a new FCC 
reauthorization bill to ensure the Commission is an efficient 
and truly modern regulator, one that is a reliable resource for 
Congress and an effective agency for American citizens and 
industry alike.
    While I am very enthusiastic about the great potential of 
the digital revolution, I want to make sure that all consumers, 
including those in our rural communities, are able to enjoy the 
economic and societal benefits of the Internet. So I want to 
thank Chairman Rockefeller. He and I share the same goal of 
getting rural America connected to advanced communications. And 
some of the best network infrastructure in the world exists 
today in some of the most unlikely places due in no small part 
to your leadership and keen interest in making rural America a 
priority.
    Last, I just want to mention the issue of sequestration. I 
have been disappointed by the administration's politically 
motivated scare tactics on this subject. And I hope that an 
independent commission like the FCC will not be just another 
agency following the White House's lead in trying to find cuts 
that can trigger a press release before looking to internal 
cost-saving measures that are less newsworthy.
    And so, Chairman Rockefeller--when he gets here--I look 
forward to working with him and with the Commission to unleash 
the great potential of the American people to create jobs and 
to spur innovation for the 21st century economy.
    So thank you, Mr. Chairman. And I look forward to hearing 
from our panel today.
    Senator Pryor. Thank you, Senator Thune.
    I know that we also, in addition to Senator Rockefeller, we 
want to recognize Senator Wicker when he arrives. But since 
they are not here, let's go ahead and start with our panel.
    And the way that we have this set up today is we have all 
five commissioners here, and we very much appreciate your 
attendance. But what we are going to ask is we are going to ask 
Chairman Genachowski to make an opening statement and also 
Commissioner McDowell to make an opening statement. And in the 
interest of time, we will not ask Commissioners Clyburn, 
Rosenworcel, or Pai to make opening statements, but certainly 
they will be here and available to answer questions.
    So, Chairman Genachowski, thank you for being here.

    STATEMENT OF HON. JULIUS GENACHOWSKI, CHAIRMAN, FEDERAL 
                   COMMUNICATIONS COMMISSION

    Mr. Genachowski. Thank you, Chairman Pryor. Thank you, and 
congratulations on the chairmanship of the Subcommittee. It has 
been a privilege working with you for the last several years; 
Senator Thune, you, as well. And I have gotten to know many of 
you on the Committee over the last few years, and I see some 
new faces. And I am looking forward to working together.
    Let me briefly start with two actions the Commission took 
today: first, approval of the T-Mobile-MetroPCS deal in the 
area of mobile and spectrum. Senator Thune, as you mentioned, 
this is good news for our mobile economy and mobile consumers.
    Second, I wanted to mention the issue of rural call 
completion, which a number of you have raised with me over the 
last several months. Our enforcement bureau took a significant 
action today. The issue here: when consumers can't receive 
calls that are made to them, it is a serious threat both to 
public safety and also to our economy. Today we announced our 
first major enforcement action in this space, a $1 million 
consent decree. We will continue to follow the facts wherever 
they lead, and we will hold responsible parties accountable.
    Now, since we last appeared before this committee, the 
Commission has been hard at work to maximize the benefits of 
broadband for our economy, our global competitiveness, and 
Americans' daily lives.
    And we continue to receive news that the ICT sector, what 
some call the broadband economy, is thriving in the U.S. Over 
the past few years, the U.S. has regained global leadership in 
mobile, with as many 4G LTE subscribers as the rest of the 
world combined. And while mobile infrastructure investment in 
Europe and Asia has been roughly flat since 2009, annual mobile 
investment in the U.S. is up 40 percent over this period. Last 
year, more than 19 million miles of fiber were laid in the 
U.S.--more than all of Europe combined and the best year in the 
U.S. since 2000.
    The FCC continues to make progress on key elements of our 
strategic agenda, as laid out initially in our National 
Broadband Plan. I will touch on just a few here.
    Since the Committee's last FCC oversight hearing, we are 
moving forward with implementation of the major spectrum and 
public safety law that Congress passed last year, originating 
on a bipartisan basis in this committee.
    Last September, we launched our first incentive auctions 
proceeding--a comprehensive proposal to implement the law, free 
up significant spectrum, and designed to help drive continued 
U.S. leadership, and, as I said, free up the spectrum that our 
mobile economy needs. We are on track to run the world's first 
incentive auction next year.
    Of course, FirstNet is another important piece of the new 
law. The Commission is taking its FirstNet responsibility 
seriously and has met all of its obligations under the statute 
on schedule.
    Another key public safety priority for the Commission is 
improving the resiliency of our networks in times of emergency. 
Next week at our Commission meeting, we will be launching a 
rulemaking to strengthen 911 reliability.
    Our work to enhance cybersecurity continues, as well, 
building on smart actions last year to address challenges 
relating to botnets and Internet routing and DNSSEC. We are now 
focusing on practical steps to improve the security of wireless 
devices, apps, and networks.
    Universal service reform continues to move forward. With 
bipartisan support from Congress, we adopted last year a major 
transformation of the multibillion-dollar program that puts us 
on the path now to broadband access for all Americans by the 
end of the decade.
    This past July, we rolled out the first phase of the 
Connect America Fund, supporting projects to bring broadband to 
nearly 400,000 Americans in unserved rural communities across 
37 states. In October, we held the first round of the Mobility 
Fund, an unprecedented reverse auction that used $300 million 
to efficiently expand wireless coverage to 84,000 unserved road 
miles across 31 states.
    Of course, in this fast-moving sector where global 
competition is fierce, challenges remain. We need to continue 
to free up more spectrum for mobile broadband. We need to 
continue to drive increasing broadband speed and capacity, 
including to our schools and libraries and other anchor 
institutions. There is a big need and opportunity around 
education technology.
    We need to continue pushing for increased broadband 
adoption. We must continue to promote Internet freedom and 
openness at home and abroad. We need to continue updating our 
policies for the broadband era, a process kick-started with our 
work on the National Broadband Plan in 2009-2010. We need to 
promote media diversity. We need to continue to promote vibrant 
and healthy competition and protect and empower consumers.
    In my written statement, I have outlined many of the 
actions we have launched to tackle these challenges, such as 
the Gigabit Cities Challenge to promote a critical mass of 1-
gigabit innovation hubs across America, and the Technology 
Transitions Task Force to modernize the Commission's rules.
    Let me close by briefly addressing sequestration. The FCC 
is currently operating at its lowest employee levels in many 
years. I do have serious concerns that the cuts ongoing 
sequestration will require will harm the ability of the FCC to 
deliver on its vital mission, including universal service, 
public safety, spectrum management, and consumer protection.
    I look forward to continuing to work with this committee on 
these and other issues, and I look forward to your questions. 
Thank you.
    [The prepared statement of Mr. Genachowski follows:]

       Prepared Statement of Hon. Julius Genachowski, Chairman, 
                   Federal Communications Commission
    Chairman Rockefeller, Ranking Member Thune, Members of the 
Committee, thank you for the opportunity to be here today.
    Let me begin by acknowledging Chairman Rockefeller's recently 
announced decision to retire from the Senate in 2014. From E-Rate, 
which has helped connect almost every classroom in America to the 
Internet, to FirstNet, which will help our first responders do their 
jobs better and make our communities safer, your legacy of improving 
the lives of the American people through communications technology is 
remarkable and enduring.
    Congratulations to Senator Thune on becoming Ranking Member of this 
Committee. You bring deep knowledge and years of experience to this 
important position, and the Commission looks forward to being a 
resource for you and your staff.
    Since we last appeared before you, the Commission has been hard at 
work to maximize the benefits of broadband for our economy, our global 
competitiveness, and all Americans' daily lives. And we continue to 
receive news that the ICT sector--what I've been calling the broadband 
economy--is thriving.
    Over the past few years, the U.S. has regained global leadership in 
mobile, with as many LTE subscribers as the rest of the world combined. 
While mobile infrastructure investment in Europe and Asia has been 
roughly flat since 2009, annual mobile investment in the U.S. is up 40 
percent over this period. And last year, more than 19 million miles of 
fiber were laid in the U.S., more than all of Europe combined, and the 
best year in the U.S. since 2000.
    The FCC continues to make progress on key elements of our strategic 
agenda as laid out initially in the National Broadband Plan. I'll touch 
on just a few here.
    Since this Committee's last FCC oversight hearing we are moving 
forward with implementation of the major spectrum and public safety law 
Congress passed last year, originating on a bipartisan basis in this 
Committee.
    Last September, we launched our incentive auctions proceeding--a 
comprehensive proposal to free up significant spectrum and designed to 
help drive continued U.S. leadership in mobile--and we're on track to 
run the world's first incentive auction next year. We are committed to 
ensuring healthy financial incentives for broadcasters to facilitate 
their participation.
    Of course, FirstNet is another important piece of the new law. The 
Commission is taking its FirstNet-related responsibilities seriously 
and has met all of its obligations under the statute on schedule.
    Another key public safety priority for the Commission is improving 
the resiliency of our networks in times of emergency. In January, we 
issued a report detailing vulnerabilities in our 9-1-1 systems that 
were exposed by the 2012 Derecho Storm, and last month we launched a 
series of field hearings to identify steps to improve network 
reliability and resilience during and in the aftermath of disasters. 
And next week we will launch a rulemaking to strengthen 9-1-1 
reliability and resiliency.
    Our work to enhance cybersecurity continues. Building on smart 
actions developed with our multi-stakeholder Communications Security, 
Reliability and Interoperability Council to address challenges related 
to botnets, Internet routing, and Domain Name System (DNS) security, 
we're now focusing on practical steps to improve the security of 
wireless devices, apps, and networks.
    Universal service reform continues to move forward. With bipartisan 
support from Congress, we adopted last year a major transformation of 
the multi-billion dollar program that puts us on the path to broadband 
access for all Americans by decade's end. This past July we rolled out 
the first phase of the Connect America Fund, supporting projects to 
bring broadband to nearly 400,000 Americans in unserved rural 
communities across 37 states. In October, we held the first round of 
the unprecedented Mobility Fund reverse auction, which used $300 
million to efficiently expand wireless coverage to 84,000 unserved road 
miles across 31 states. In December, we adopted major reforms of USF's 
rural health care program, creating the Healthcare Connect Fund to 
connect thousands of rural and urban healthcare providers across the 
country. And we're making good progress finalizing the cost model for 
the long-term Connect America Fund, putting the Commission on track to 
launch this landmark initiative--the largest broadband infrastructure 
program ever established--later this year.
    Of course, in this fast-moving sector, where global competition is 
fierce, challenges remain.
    We need to continue to free up more spectrum for mobile broadband.
    That's why we unleashed 30 MHz of WCS spectrum and 40 MHz of AWS-4 
spectrum last year. And that's why we're pushing forward with the 
auction of 75 MHz of additional spectrum and new rules we proposed in 
December to enable widespread deployment of small cells in the 3.5 GHz 
band, which would unleash an additional 100 MHz of spectrum for mobile 
broadband. These actions have us on track to meet our ambitious goal of 
freeing up 300 MHz of spectrum for broadband by 2015.
    We need to continue to drive increasing broadband speed and 
capacity, including to our schools, libraries, and other anchor 
institutions.
    That's why earlier this year I issued the Gigabit Cities Challenge, 
which calls for at least one innovation hub with ultra-high-speed 
broadband in every state by 2015, and why the Commission is working 
with municipalities and broadband providers to meet this challenge. To 
promote investment in faster wired and wireless networks, we continue 
to seek ways to remove barriers to broadband buildout, building on 
policies like our tower siting shot clock; our order to ease access to 
utility poles; and ``Dig Once,'' which encourages laying fiber conduit 
any time roads are being constructed or repaired.
    We need to continue pushing for increased broadband adoption. 
That's why we recently announced a partnership with HUD to extend 
greater digital literacy training to more than 4 million families 
living in public housing.
    We must continue to promote Internet freedom and openness at home 
and abroad.
    At the World Conference on International Telecommunications in 
Dubai in December, the U.S. fought attempts by a number of countries to 
give a U.N. organization, the International Telecommunication Union, 
new regulatory authority over the Internet. Ultimately, over the 
objection of the U.S. and others, 89 countries voted to approve a new 
treaty that would strengthen the power of governments to control online 
content. The Internet should remain free of gatekeepers, and I am 
committed to working with my fellow Commissioners, Congress, the 
Administration, and private sector stakeholders to preserve Internet 
freedom and openness and to resist efforts to balkanize the Internet.
    We need to continue updating our policies for the broadband era--a 
process kick-started by our work on the National Broadband Plan.
    Among many actions, we've already overhauled intercarrier 
compensation to eliminate obstacles to deployment of all IP-networks. 
In December I launched the Technology Transitions Task Force to conduct 
a data-driven review and provide recommendations to modernize the 
Commission's rules. And just last week I circulated a NPRM proposing 
that VoIP providers receive direct access to numbers. We're working to 
accelerate technology transitions while recognizing that these 
transitions do not change the Commission's core responsibilities under 
the Communications Act: universal service, promoting competition, 
consumer protection, and public safety.
    We need to promote media diversity.
    The Commission recently approved the largest expansion of community 
radio in U.S. history. We are also undertaking our Congressionally-
mandated review of our media ownership rules. We expect to receive a 
study on the effects of cross-ownership rules on minority ownership and 
newsgathering, and this will enhance the record in the Commission's 
proceeding. As the Commission considers the issues before it, goals 
that are particularly important include guarding against excessive 
media consolidation, promoting ownership diversity, enabling robust 
local news for all communities, and fostering economic growth and 
opportunity.
    And we need to continue promoting vibrant and healthy competition 
and protecting and empowering consumers through strong actions like our 
data roaming rules, recently upheld by the D.C. Circuit.
    Let me close by addressing sequestration. The FCC is currently 
operating at its lowest staffing levels in many years. I have serious 
concerns because the ongoing sequestration cuts will harm the ability 
of the FCC to deliver on its vital mission, including universal 
service, public safety, spectrum management, and consumer protection.
    I look forward to continuing to work with this Committee on these 
and other issues and I look forward to your questions.
    Thank you.

    Senator Pryor. Thank you.
    And, Mr. Chairman, because of our delay, we went ahead and 
started. And I can either recognize Commissioner McDowell right 
now and give you a few moments or I could recognize you for 
your opening statement. Which do you prefer?
    The Chairman. I think that second idea is sensational.
    Senator Pryor. Of recognizing you for your opening 
statement?
    The Chairman. Right. Right.
    [Laughter.]
    Senator Pryor. Mr. Chairman, you are recognized.

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

    The Chairman [presiding]. OK. I apologize.
    Communications technology obviously is reshaping every 
aspect of our society. I believe that this change is 
overwhelmingly positive. But, as last week's hearing on 
cybersecurity reinforced, this change is not without 
substantial risk to our national and economic security. Just as 
harnessing technological innovation is crucial to our economic 
future, addressing the dangers of a completely interconnected 
world is just as critical.
    Cybersecurity is one of the great. I have two speeches 
about cybersecurity, and this is the right one for here.
    [Laughter.]
    The Chairman. It is one of the great national security 
challenges that we face. It is the main one that we face. It is 
going to keep getting bigger.
    At an intelligence briefing this morning from all heads of 
the intelligence community, they are scared to death of it. 
Everybody is just sort of taking it for granted somebody is 
going to fix it. And we can't get legislation passed. And we 
have to. And John Thune and I and Dianne Feinstein and Saxby 
Chambliss and Tom Carper and Dr. Coburn are all going to work 
together this time--three committees working together.
    I believe that two other areas are absolutely critical for 
government and industry to come together to address some 
pressing needs: first, the construction of a nationwide 
interoperable public safety network that our first responders 
are owed and have been given under law. Second, we must make 
sure that every child in this country is prepared to compete in 
the global economy. And that means having access to the 
Internet and all innovations deriving from the Internet.
    As most of you have heard me say, the job of being an FCC 
commissioner is surely one of the hardest, most difficult, 
perilous jobs in all of Washington. But then again, we just had 
our caucus lunch with the President, so I will modify that a 
little bit.
    [Laughter.]
    The Chairman. Your actions affect how we communicate, what 
we see on television, the deployment of new technologies and 
interactive services.
    Making sure that our first responders have the spectrum and 
communication networks that they need to keep us safe is, 
frankly, an incredibly proud achievement for this committee. I 
think it is the defining piece of legislation for this 
committee. Congress allocated $7 billion for the construction 
of this network, which will come from the auction proceeds of 
spectrum voluntarily--you can spell that if you want--offered 
up by broadcasters.
    The agency's incentive auction proceeding is one of the 
agency's most important undertakings in its history. I know 
that this is a complicated proceeding--believe me, I know 
that--that affects whole industries. But I believe that the 
auction must be driven by one single principle: It must 
maximize the resources available for the construction of a 
nationwide interoperable broadband network for first 
responders, on which we have already voted.
    I urge the Commissioners to move forward on an aggressive 
timetable to get this proceeding done. I have no doubt that 
when we are completed on that, the public safety network will 
save a whole lot of lives. And I really mean that. This is an 
area where government and private sector must continue to work 
collaboratively to solve the most important public safety issue 
that we, in fact, face.
    Just as we are future-proofing our public safety, we must 
also future-proof our efforts to make sure every child in 
America has access to cutting-edge technology.
    Mr. Chairman, I apologize for not starting out by 
recognizing you, who I have now double-inconvenienced.
    [Laughter.]
    The Chairman. As part of the Telecommunications Act of 
1996, Olympia Snowe and I created a little-known program called 
the E-Rate. I thought it was a toy at first, early in the 
legislation. I believe that this program is incredible. Our 
little provision helped drive the broadband revolution in this 
country by exposing a generation of kids to the power of the 
Internet. It is just an unbelievable revolution--unbelievable 
revolution.
    The E-Rate program has fundamentally transformed education 
in this country. We have connected our most remote school areas 
and libraries to the world. Why libraries? Because adults 
aren't in elementary school but they can go to libraries. The 
E-Rate has enabled schoolchildren across this country to 
participate in the information society.
    And I have seen firsthand the benefits of the E-Rate in my 
state, which is not a rich state. The impact of the E-Rate in 
our schools has been amazing. More than 92 percent of 
classrooms have Internet access. You just have to have an 
understanding of what that means. But, then again, I think I 
remember that when we started, California, only 15 percent of 
their classrooms had access, which surprised me. Anyway, 92 is 
good, and we have to get better.
    But as impressive and important as this statistic is, basic 
Internet connectivity is not sufficient to meet our 21st 
century educational needs. I repeat that: It is not sufficient 
for our future. As every educator knows, digital information 
and technology will continue to play an increasing role in 
education, so we need to think about how we are going to meet 
the broadband infrastructure needs of our schools and 
libraries. We need to think big about the future of E-Rate. 
Simply put, we need to create E-Rate 2.0. We need to fund and 
adapt E-Rate to meet the needs of a data-driven society.
    By the end of this decade, I believe that every school in 
America should have 1 gigabit of connectivity. And if every 
coffee shop in America can offer wireless connectivity, then, 
by golly, every school in America should be able to offer it, 
as well. We owe this to our children.
    I end simply by this. Actually, it is more than this.
    In 1996, everyone dismissed the need for the E-Rate. 
Telecommunications companies took the FCC to court over the 
program many times. They all swore in written letters that they 
would not take us to court. They all took us to court. And they 
all lost. It was wonderful.
    [Laughter.]
    The Chairman. We have two decades of proof that the E-Rate 
has worked. It enabled an education revolution. It exposed a 
generation to the power of information and learning. It 
literally connected the least among us to the world in a way 
never before possible.
    So today I urge the FCC and industry to join us in an 
effort to make sure that every child in America has a bright 
future, that every child has access to the transformative power 
of technology.
    And I thank you for your courtesy and patience.
    OK, we are going to go to Senator Wicker.

              STATEMENT OF HON. ROGER F. WICKER, 
                 U.S. SENATOR FROM MISSISSIPPI

    Senator Wicker. Well, thank you. Briefly, then, Mr. 
Chairman, thanks for holding the hearing.
    And welcome to the Commissioners. Appreciate your being 
here. And I appreciate the opportunity to discuss not only the 
wide array of issues before you but also ways that Congress can 
work in conjunction with the Commission to ensure that quality 
broadband access is delivered to all corners of our nation, 
particularly rural areas like my home state of Mississippi and 
the Chair's home state of West Virginia.
    To achieve this goal, I believe we must ensure that there 
is a level playing field for all broadband providers. We must 
seriously examine the need to modernize our nation's 
telecommunication laws, particularly in the ultra-competitive 
video marketplace, to create a landscape that will foster the 
flexibility necessary to provide the best service and most 
competitive rates to consumers, thereby maximizing broadband 
adoption.
    As we continue to work our way out of the still-ailing 
economy, it is imperative that we focus on one of the few 
sectors of the economy that has grown: the telecommunications, 
media, and technology industries. With its virtual on-ramps to 
unlimited information and boundless potential as a tool for 
business, for education, health care, and others, broadband is 
providing the seeds of economic development for the 21st 
century workforce.
    It is the responsibility of Congress and of the Commission 
to help foster continued growth and innovation. I look forward 
to the hearing today on how we might best achieve this goal.
    And I look forward to working with all the members of this 
committee in my new role as Ranking Member of the 
Communications Subcommittee. I am committed to working with my 
colleagues, including Senator Pryor, my Chair, to help ensure 
that our Committee fully exercises its oversight, shines much-
needed light on these important issues, and that our panel is 
fully engaged in helping with our broadband and with economic 
growth.
    So thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Wicker.
    And now, Commissioner McDowell. And the Chairman has 
already given his testimony, and I obviously apologize to you 
particularly for that.
    And Clyburn, Jessica, and Ajit, as it says here, evidently 
aren't giving testimony. I am really disappointed, but I have 
to go with what the boss says.

      STATEMENT OF HON. ROBERT M. McDOWELL, COMMISSIONER,

       FEDERAL COMMUNICATIONS COMMISSION; ACCOMPANIED BY

             HON. MIGNON L. CLYBURN, COMMISSIONER,

               FEDERAL COMMUNICATIONS COMMISSION;

            HON. JESSICA ROSENWORCEL, COMMISSIONER,

               FEDERAL COMMUNICATIONS COMMISSION;

                AND HON. AJIT PAI, COMMISSIONER,

               FEDERAL COMMUNICATIONS COMMISSION

    Mr. McDowell. Thank you, Mr. Chairman. And thank you for 
having us before you again today. And, Ranking Member Thune and 
Ranking Member of the Subcommittee Wicker, congratulations on 
your ranking memberships. And, also, it is a delight to be in 
front of the new members as well as the veterans of this 
committee, as well.
    I am hopeful that this year the FCC adopts some sensible 
policies in many areas but especially when it comes to 
implementing Congress' incentive auction law. My written 
testimony covers a great deal of other important topics, but I 
would like to use my opening statement time to emphasize my 
serious concerns regarding increased international regulation 
of the Internet.
    Ladies and gentlemen, we are losing the fight for Internet 
freedom. The Internet is no longer at a crossroads with freedom 
and prosperity down one avenue and command-and-control 
government domination down the other. The course of the 
Internet's fate was dramatically altered for the worse during a 
treaty negotiation in Dubai last December. As a result, this 
freedom-enhancing and borderless network of networks, the 
greatest deregulatory success story of all time, is quickly 
being absorbed into an intergovernmental structure that uses 
centralized, top-down chokepoints that employ the power of 
international law. Unless defenders of Internet freedom and 
prosperity act quickly, this tragic trajectory will become 
irreversible.
    My testimony on this important matter can be summed up in 
four main points. First, last year's World Conference on 
International Telecommunications, known as the WCIT, 
dramatically ended the era of international consensus to keep 
intergovernmental hands off of the Internet. Second, defenders 
of Internet freedom must act quickly to turn the threat of 
increased intergovernmental control of the Internet into an 
opportunity to reverse course. Third, we must offer other 
nations, especially those in the developing world that feel 
disenfranchised from Internet governance processes, an 
alternative to international regulation by improving and 
enhancing the multistakeholder process, especially entities 
such as the Internet Governance Forum, or IGF. And, finally, 
Congress can and should continue to play a constructive role by 
amplifying the call for more Internet freedom.
    For many years, the global consensus regarding Internet 
policy centered on market-opening liberalization and 
competition in lieu of government regulation. That consensus 
started to unravel several years ago, however. In 2011, for 
example, then Russian Prime Minister Vladimir Putin plainly 
stated that it was his goal and that of his allies to 
establish, quote, ``international control over the Internet,'' 
end quote, through the ITU. Last December, in Dubai, they 
succeeded in establishing an insidious foothold in their 
patient and incremental quest to control the operations, 
content, and economics of the Net.
    We allowed this to happen even though we were explicitly 
forewarned. Hindsight allows us to see with great clarify that 
not only were defenders of Internet freedom too slow to take 
these efforts seriously but they all too easily fell victim to 
a disciplined campaign of deception, as well.
    For instance, before the WCIT, ITU leadership made three 
key promises. Number one, no votes would be taken at the WCIT. 
Number two, a new treaty would be adopted only through 
unanimous consensus. And, number three, any new treaty would 
not touch the Internet. All three promises were promptly broken 
in Dubai through near-perfect Orwellian cynicism, all in the 
name of making the Internet more democratic.
    ITU leadership and pro-regulation member states succeeding 
in co-opting arguments for preserving a freedom-enhancing, 
flat, bottom-up, and multistakeholder-driven Internet 
governance structure while turning the logic of these arguments 
on its head to justify their power grab.
    Hopefully it is obvious that we must act quickly. Internet 
freedom's foes around the globe are working hard to exploit a 
new treaty negotiation that is far larger in significance than 
the WCIT. In 2014, the ITU will convene in Korea to conduct 
what is literally a constitutional convention which will define 
the ITU's mission for years to come.
    This scenario poses both a threat and an opportunity for 
Internet freedom. The threat is obvious: more international 
regulation of the Internet. We have an opportunity, however, to 
change the debate by finding arguments that are more compelling 
to the developing world.
    We can start by reminding member states of the incredible 
benefits brought forth by open markets, liberalization, and 
competition--benefits such as investment, innovation, universal 
connectivity, and global prosperity.
    Furthermore, we have an opportunity to improve the current 
multistakeholder structure to include more meaningful 
participation by developing-world nations. A disproportionate 
amount of aspiring nations feel left out of the decisionmaking, 
and such perceived disenfranchisement has fueled the drive to 
expand the legal authority of the ITU. The best avenues to 
amplify the voice of the developing world would be through 
strengthening participation in and funding of the Internet 
Governance Forum. It is the ultimate flat, democratic, and 
bottom-up multistakeholder group.
    In conclusion, Congress can and should speak loudly to 
support policies that promote Internet freedom and global 
prosperity. As we dine on our Thanksgiving dinners in 2014, let 
us not look back on today and lament how we did not do enough. 
We have but one chance. Let us be resolute and tell the world 
that all nations will benefit if we stand strong together for 
Internet freedom.
    Thank you for having me before you today, and I look 
forward to your questions.
    [The prepared statements of Mr. McDowell, Ms. Clyburn, Ms. 
Rosenworcel, and Mr. Pai follow:]

     Prepared Statement of Hon. Robert M. McDowell, Commissioner, 
                   Federal Communications Commission
Introduction
    Thank you, Chairman Rockefeller, Ranking Member Thune and Members 
of the Committee for inviting me to join you today. It has been an 
honor working with you over the years, and I am pleased to be back 
before you. As always, I look forward to answering any questions you 
may have.
    Although the bulk of my testimony focuses on my serious concerns 
regarding increased international regulation of the Internet, I am 
hopeful that the Federal Communications Commission adopts some sensible 
policies in other areas this year.
Today's Policy Priorities
I. The FCC Should Adopt Pragmatic Policies for the Upcoming Incentive 
        Auction
    The most important priority for the Commission this year is to 
implement the congressionally-mandated incentive auction. We should do 
so by:

   Ensuring that the rulemaking and incentive auction processes 
        are transparent and the final rules are intuitive so that all 
        stakeholders--no matter their technology preference or size--
        have a meaningful opportunity to understand and participate;

   Avoiding imposing anything that functions as a spectrum cap;

   Refraining, for now, from reserving airwaves to create a 
        ``nationwide unlicensed spectrum band'' within the new 600 MHz 
        Band;

   Pragmatically balancing the tension between flexible-use 
        spectrum policies and adequate interference protections to 
        account for the technological improvements that will 
        undoubtedly develop while the proceeding is underway and after 
        the rules are implemented; and

   Steering clear of encumbrances that scare away bidders and 
        lead directly to unintended harmful consequences.
II. The Executive Branch Must Liberate More Spectrum for Exclusive Use 
        Licenses Awarded Through Auctions
    In addition to creating a constructive environment for an incentive 
auction, the Executive Branch must do more to liberate spectrum 
occupied by the Federal Government and send it to auction for exclusive 
use licenses. The Federal Government occupies a majority of the most 
useful spectrum. Without a doubt, much of it is used for important 
purposes such as national defense, air traffic control and law 
enforcement. But does anyone believe that all Federal spectrum is being 
used efficiently? We don't have clear answers to these questions 
because the current structure is opaque and discourages the government 
from relinquishing spectrum. Ill-defined policies to promote spectrum 
``sharing'' in lieu of auctions for exclusive use licenses are 
insufficient to meet America's spectrum needs. This scenario must be 
rectified or the U.S. wireless industry risks losing the global lead in 
wireless it has always enjoyed.
III. The FCC Should Modernize America's Obsolete Media Ownership Rules
    As is required by Section 202(h) of the Communications Act, the FCC 
must modernize its media ownership rules to reflect the current 
economic realities of the marketplace and eliminate any and all 
unnecessary mandates.\1\ Not only should the Commission look to 
deregulate the traditional media sector in the face of competition from 
new media, it should avoid adding new and unnecessary rules. For 
example, due to today's competitive media landscape, the Commission 
should resist proposals that would restrict broadcasters from entering 
into some forms of contracts, such as joint sales, shared service and 
local news service agreements, that could provide efficiencies 
ultimately benefiting consumers. Unfortunately, new draft rules in this 
regard are pending before the Commission. If adopted, they would reduce 
the amount of news and information available to smaller communities.
---------------------------------------------------------------------------
    \1\ Section 202(h) of the Telecommunications Act of 1996 states 
that:

    The Commission shall review its rules adopted pursuant to this 
section and all of its ownership rules quadrennially . . . and shall 
determine whether any of such rules are necessary in the public 
interest as the result of competition. The Commission shall repeal or 
modify any regulation it determines to be no longer in the public 
interest.

    Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56, 
111-12 Sec. 202(h) (1996); Consolidated Appropriations Act, 2004, Pub. 
L. No. 108-199, Sec. 629, 118 Stat. 3, 99-100 (2004) (amending Section 
202(h) of the 1996 Act). I concurred in the December 2011 notice of 
proposed rulemaking, because the Commission appears to be prepared to 
accept a regulatory status quo while I think major changes are 
necessary and required by Section 202(h).
---------------------------------------------------------------------------
    Additionally, evidence continues to mount that the 1975 newspaper-
broadcast cross-ownership ban should be largely eliminated. Although 
the Commission proposed a relaxation of the ban on newspaper-television 
ownership for the largest markets and considered eliminating 
restrictions on newspaper-radio combinations, these proposals are 
anemic and do not reflect marketplace realities. Over the past decade, 
broadcast stations and daily newspapers have grappled with falling 
audience and circulation numbers, diminishing advertising revenues and 
resulting staff reductions,\2\ as online sources gain in popularity.\3\ 
This trend has led many prominent daily newspapers to declare 
bankruptcy or go out of business altogether. Over the past five years, 
an average of 15 daily papers, or about one percent of the industry, 
have shuttered their doors each year.\4\ The newspaper-broadcast cross-
ownership ban could be exacerbating this situation, according to 
evidence compiled in the FCC's record over the years.\5\ Not only is 
such a rule unnecessary, it appears to be harming the public interest. 
Keeping the ban on the FCC's rulebooks is contrary to Congress's 
mandate under section 202(h).
---------------------------------------------------------------------------
    \2\ Although some sectors of the news industry have experienced a 
slight resurgence, newspapers continue to face decline with both 
advertising and circulation revenues continuing on a downward path. In 
2011, network and local news viewership increased for the first time in 
years; however, local TV station advertising revenues still experienced 
a decline. See Pew Research Ctr's Project for Excellence in Journalism, 
The State of the News Media 2012, Key Findings, http://
stateofthemedia.org/2012/overview-4/key-findings/ (last visited March 
8, 2013) (``The State of the News Media 2012''); The State of the News 
Media 2012, Local TV, http://stateofthemedia.org/2012/overview-4/key-
findings/ (explaining that some of this loss is due to a reduction of 
political and automotive advertising from 2010 and that these revenues 
will rebound during a busy election cycle).
    \3\ In fact, the White House's Council of Economic Advisors has 
found that newspapers are one of America's fastest-shrinking industries 
losing approximately 28.4 percent of its workforce between 2007 and 
2011. Online publishing job growth, on the other hand, increased by 
more that 20 percent in the same time period. See, e.g., Economic 
Report of the President Together with The Annual Report of the Council 
of Economic Advisors 188 (February 2012) (citing a LinkedIn study), 
available at http://www.whitehouse.gov/sites/default/files/docs/erp
_2012_complete.pdf; Matt Rosoff, Newspapers Are The Fastest Shrinking 
Industry In The U.S., Business Insider (Mar. 8, 2012), http://
articles.businessinsider.com/2012-03-08/tech/31135175_1_linkedin-job-
growth-newspapers#ixzz1us0z9Urf.
    \4\ The State of the News Media 2012, Major Trends, http://
stateofthemedia.org/2012/overview-4/major-trends/.
    \5\ See, e.g., Comments of the Newspaper Association of America, 
2010 Quadrennial Review--Review of the Commission's Broadcast Ownership 
Rules and Other Rules Adopted Pursuant to Section 202 of the 
Telecommunications Act of 1996, MB Docket No. 09-182 (Mar. 5, 2012); 
Comments of A.H. Belo Corporation, 2010 Quadrennial Review--Review of 
the Commission's Broadcast Ownership Rules and Other Rules Adopted 
Pursuant to Section 202 of the Telecommunications Act of 1996, MB 
Docket No. 09-182 (Mar. 5, 2012); Joint Comments of Bonneville 
International Corporation and the Scranton Times, L.P., 2010 
Quadrennial Review--Review of the Commission's Broadcast Ownership 
Rules and Other Rules Adopted Pursuant to Section 202 of the 
Telecommunications Act of 1996, MB Docket No. 09-182 (Mar. 5, 2012); 
Comments of Cox Media Group, 2010 Quadrennial Review--Review of the 
Commission's Broadcast Ownership Rules and Other Rules Adopted Pursuant 
to Section 202 of the Telecommunications Act of 1996, MB Docket No. 09-
182 (Mar. 5, 2012); Comments of Tribune Company, Debtor-in-Possession, 
2010 Quadrennial Review--Review of the Commission's Broadcast Ownership 
Rules and Other Rules Adopted Pursuant to Section 202 of the 
Telecommunications Act of 1996, MB Docket No. 09-182 (Mar. 5, 2012).
---------------------------------------------------------------------------
    The Commission recently indicated that it would accept new evidence 
for the record to help determine whether cross-ownership has a harmful 
effect on diversity.\6\ Once that review is complete, along with proper 
public comment, we should waste no time in completing this proceeding, 
which is nearly three years overdue.
---------------------------------------------------------------------------
    \6\ Statement from FCC Chairman Julius Genachowski on the Status of 
the Media Ownership Proceeding, News Release (Feb. 26, 2013), http://
transition.fcc.gov/Daily_Releases/Daily
_Business/2013/db0226/DOC-319131A1.pdf.
---------------------------------------------------------------------------
IV. The FCC Should Repeal Outdated Analog Regulations in The New IP 
        World
    The Commission should prioritize its reform efforts to focus on the 
market's transition from telecom networks that were built for analog 
voice services to state-of-the-art data networks that convey an 
infinite slurry of ones and zeros (the ``IP transition''). Comments 
filed at the FCC indicate that within at least the 22 states where AT&T 
operates, for instance, 70 percent of the residential customers with 
access to plain old telephone service over aging copper networks are 
projected to have chosen a competitive alternative by the end of 
2012.\7\ As in so many cases, while our statute and rules stay firmly 
rooted in the 20th century, the market is whizzing past us. We are 
overdue for a fresh look at how our laws may be hindering--rather than 
helping--such market evolutions. At a minimum, we could learn a great 
deal from sensibly structured test bed programs.
---------------------------------------------------------------------------
    \7\ See Comments of AT&T, In the Matter of Connect America Fund, WC 
Docket No. 10-90 (Feb. 24, 2012).
---------------------------------------------------------------------------
Protecting Internet Freedom
    Ladies and gentlemen, we are losing the fight for Internet freedom. 
Any doubts about this proposition should now be dispelled. The Internet 
is no longer at a crossroads--with freedom and prosperity down one 
avenue, and command and control government domination down the other. 
The course of the Internet's fate was dramatically altered for the 
worse during a treaty negotiation in Dubai last December. As a result, 
this freedom-enhancing and borderless network of networks--the greatest 
deregulatory success story of all time--is quickly being absorbed into 
an intergovernmental structure that uses centralized, top-down choke 
points. Unless defenders of Internet freedom and prosperity act 
quickly, boldly and imaginatively, this tragic trajectory will become 
irreversible.
    My testimony on this important matter can be summed up in four main 
points:

  (1)  Last year's World Conference on International Telecommunications 
        (``WCIT'') dramatically ended the era of international 
        consensus to keep intergovernmental hands off of the Internet;

  (2)  Defenders of Internet freedom must act quickly to turn the 
        threat of increased intergovernmental control of the Internet 
        into an opportunity to reverse course through liberalization of 
        markets that will spark competition, investment and innovation;

  (3)  We must offer other nations, especially those in the developing 
        world that feel disenfranchised from Internet governance 
        processes, an alternative to international regulation by 
        improving and enhancing multi-stakeholder entities, such as the 
        Internet Governance Forum (``IGF''); and

  (4)  Congress can and should continue to play a constructive role by 
        amplifying the call for more Internet freedom.
I. Last year's WCIT dramatically ended the era of international 
        consensus to keep intergovernmental hands off of the Internet.
    Since becoming commercialized in the mid 1990s, the Internet 
migrated further away from governmental control. As a result of 
deregulation, the number of people using the Net world-wide grew from a 
mere 16 million in 1995 to over 2.4 billion today.\8\ Net access, 
especially through increasingly powerful and affordable mobile devices, 
is improving the human condition more quickly and fundamentally than 
any other technology in history. Nowhere is this phenomenon more 
apparent than in the developing world where unfettered Internet 
technologies are expanding economies and raising living standards. 
These innovations also empower individuals with information that they 
have never had before, thus threatening authoritarian regimes that rule 
closed societies. As a result, these regimes, and their client states, 
have been pushing for more international Internet regulation in lieu of 
the non-governmental ``multi-stakeholder'' model for Internet 
governance. At a minimum, a new international regulatory overlay 
provides authoritarian governments political ``cover'' and 
international legal ``legitimacy'' for restricting Internet 
communications in their own countries.
---------------------------------------------------------------------------
    \8\ Internet Growth Statistics, Internet World Stats, http://
www.internetworldstats.com/emarketing.htm (last visited March 7, 2013).
---------------------------------------------------------------------------
    For many years, the global consensus regarding Internet policy 
centered on market opening liberalization and competition. Internet 
governance was left to non-governmental private sector groups that not 
only have a perfect track record of keeping the Internet open and 
working, but helping it thrive as well. This hands-off approach is what 
has produced tremendous investment and innovation that has made the 
Internet ecosystem flourish.
    Starting a few years ago, however, countries such as Russia, China, 
Saudi Arabia and others diligently and patiently worked to change that 
structure incrementally. Among their many proposals were draft rules 
that would have the force and effect of international law calling for:

   Changing basic definitions contained in treaty text so the 
        International Telecommunication Union (``ITU'') would have 
        unrestricted jurisdiction over the Internet;\9\
---------------------------------------------------------------------------
    \9\ See, e.g., Arab States Common Proposals for the Work of the 
Conference, Algeria (People's Democratic Republic of), Bahrain (Kingdom 
of), Comoros (Union of the), Djibouti (Republic of), Egypt (Arab 
Republic of), Iraq (Republic of), Jordan (Hashemite Kingdom of), Kuwait 
(State of), Lebanon, Libya, Mauritania (Islamic Republic of), Morocco 
(Kingdom of), Oman (Sultanate of), Qatar (State of), Saudi Arabia 
(Kingdom of), Somali (Democratic Republic of), Sudan (Republic of the), 
Tunisia, United Arab Emirates and Yemen (Republic of), Contribution 7, 
at Art. 2 (Oct. 24, 2012), http://www.itu.int/md/S12-WCIT12-C-0007/en 
(``Arab States Contribution 7''); African Common Proposals for the Work 
of the Conference, African Telecommunication Union Administrations, 
Contribution 19, at Art. 2 (Nov. 2, 2012), http://www.itu.int/md/S12-
WCIT12-C-0019/en (``Africa Contribution 19''); Proposals for the Work 
of the Conference, India (Republic of), Contribution 21, at Art. 2 
(Nov. 3, 2012), http://www.itu.int/md/S12-WCIT12-C-0021/en (``India 
Contribution 21''); Proposals for the Work of the Conference, Russian 
Federation, Contribution 27, at Art. 2 (Nov. 17, 2012), http://
www.itu.int/md/S12-WCIT12-C-0027/en (``Russia Contribution 27''); 
Proposals for the Work of the Conference, Algeria, Saudi Arabia, 
Bahrain, China, United Arab Emirates, Russian Federation, Iraq, Sudan, 
Contribution 47, at Art. 2 (Dec. 11, 2012), http://www.itu.int/md/S12-
WCIT12-C-0047/en (``Algeria, Saudi Arabia, Bahrain, China, United Arab 
Emirates, Russian Federation, Iraq, Sudan Contribution 47'').

   Allowing foreign phone companies to charge global content 
        and application providers internationally mandated fees 
        (ultimately to be paid by all Internet consumers) with the goal 
        of generating revenue for foreign government treasuries;\10\
---------------------------------------------------------------------------
    \10\ See, e.g., Arab States Contribution 7 at Arts. 6.0.5, 6.0.6; 
Africa Contribution 19 at Arts. 6.0.1-6.0.6; Algeria, Saudi Arabia, 
Bahrain, China, United Arab Emirates, Russian Federation, Iraq, Sudan 
Contribution 47 at Arts. 6.0.3, 6.0.4; Revisions of the International 
Telecommunications Regulations--Proposals for High Level Principles to 
be Introduced in the ITRs, ETNO, CWG-WCIT12 Contribution 109, at 2 
(June 7, 2012), http://www.itu.int/md/T09-CWG
.WCIT12-C-0109/en.

   Subjecting cyber security and data privacy to international 
        control, including the creation of an international 
        ``registry'' of Internet addresses that could track every 
        Internet-connected device in the world;\11\
---------------------------------------------------------------------------
    \11\ See, e.g., Letter dated 12 September 2011 from the Permanent 
Representatives of China, the Russian Federation, Tajikistan, and 
Uzbekistan to the United Nations addressed to the Secretary-General, 
Item 93 of the provisional agenda--Developments in the field of 
information and telecommunications in the context of international 
security, 66th Session of the United Nations General Assembly, Annex 
(Sep. 14, 2011), http://www.cs.brown.edu/courses/csci1800/sources/
2012_UN_Russia_and_China_Code_o_Conduct.pdf (last visited March 8, 
2013); Arab States Contribution 7 at Art. 5A; Proposals for the Work of 
the Conference, Cameroon (Republic of), Contribution 15, at Art. 5A 
(Oct. 2, 2012), http://www.itu.int/md/S12-WCIT12-C-0015/en (``Cameroon 
Contribution 15''); Africa Contribution 19 at Art. 5A; India 
Contribution 21 at Art. 5A; Common Proposals for the Work of the 
Conference, ITU Member States, Members of the Regional Commonwealth in 
the Field of Communications (RCC), Contribution 14, at Art. 5A (Oct. 1, 
2012), http://www.itu.int/md/S12-WCIT12-C-0014/en (``RCC Contribution 
14''); Algeria, Saudi Arabia, Bahrain, China, United Arab Emirates, 
Russian Federation, Iraq, Sudan Contribution 47 at Art. 3C.

   Imposing unprecedented economic regulations of rates, terms 
        and conditions for currently unregulated Internet traffic 
        swapping agreements known as ``peering;'' \12\
---------------------------------------------------------------------------
    \12\ See, e.g., Arab States Contribution 7 at Art. 6.0.4; India 
Contribution 21 at Art. 6.0.4; Internet Society Background Paper, 
International Telecommunications Regulations, available at http://
www.internetsociety.org/sites/default/files/
Internet%20Society%20Background%20Paper-
%20International%20Telecommunication%20Regulations%281%29.pdf (last 
visited March 8, 2013).

   Establishing ITU dominion over important non-profit, private 
        sector, multi-stakeholder functions, such as administering 
        domain names like the .org and .com Web addresses of the 
        world;\13\
---------------------------------------------------------------------------
    \13\ See, e.g., Arab States Contribution 7 at Art. 3.5; Russia 
Contribution 27 at Art. 3A.2; Algeria, Saudi Arabia, Bahrain,China, 
United Arab Emirates, Russian Federation, Iraq, Sudan Contribution 47 
at Art. 3B.

   Subsuming into the ITU the functions of multi-stakeholder 
        Internet engineering groups that set technical standards to 
        allow the Net to work;\14\
---------------------------------------------------------------------------
    \14\ See, e.g., Africa Contribution 19 at Art. 3.4A; Russia 
Contribution 27 at Art. 3A; Algeria, Saudi Arabia, Bahrain,China, 
United Arab Emirates, Russian Federation, Iraq, Sudan Contribution 47 
at Arts. 1.6, 3.1, 4.2, 4.3.

   Centralizing under international regulation Internet content 
        under the guise of controlling ``congestion,'' or other false 
        pretexts; and many more.\15\
---------------------------------------------------------------------------
    \15\ See, e.g., Arab States Contribution 7 at Art. 5A; Africa 
Contribution 19 at Art. 5B. Some member states also called for 
requiring network operators to disclose to the government 
identification information about every communication carried over their 
networks or to give the governments control of the routing of those 
communications. Arab States Contribution 7 at Arts.3.3, 3.6; Africa 
Contribution 19 at Arts. 3.3, 3.4B; RCC Contribution 14 at Art. 3.3; 
Algeria, Saudi Arabia, Bahrain, China, United Arab Emirates, Russian 
Federation, Iraq, Sudan Contribution 47 at Arts. 3.3, 3B.3; Cameroon 
Contribution 15 at Art. 3.6.

    In fact, then-Russian Prime Minister Vladimir Putin plainly stated 
in 2011 that it was his goal, and that of his allies, to establish 
``international control over the Internet'' through the ITU.\16\ Last 
December in Dubai, they succeeded in establishing an insidious foothold 
in their patient and incremental quest to ``control'' the operations, 
content and economics of the Net. In short, Mr. Putin largely achieved 
the first stage of his goal. We allowed this to happen even though we 
were explicitly forewarned.
---------------------------------------------------------------------------
    \16\ Prime Minister Vladimir Putin meets with Secretary General of 
the International Telecommunication Union HamadounToure, Gov't of the 
Russian Fed'n, http://government.ru/eng/docs/15601/print/ (last visited 
March 8, 2013) (``The International Telecommunication Union is one of 
the oldest international organisations; it's twice as old as the United 
Nations. Russia was one of its co-founders and intends to be an active 
member. We are thankful to you for the ideas that you have proposed for 
discussion. One of them is establishing international control over the 
Internet using the monitoring and supervisory capabilities of the 
International Telecommunication Union (ITU). If we are going to talk 
about the democratisation of international relations, I think a 
critical sphere is information exchange and global control over such 
exchange. This is certainly a priority on the international agenda.'').
---------------------------------------------------------------------------
    Hindsight allows us to see with great clarity that not only were 
defenders of Internet freedom too slow to take these efforts seriously, 
but they all too easily fell victim to a disciplined campaign of 
deception. For instance, before the WCIT, ITU leadership made three key 
promises:

(1)  No votes would be taken at the WCIT;

(2)  A new treaty would be adopted only through ``unanimous 
        consensus;'' and

(3)  Any new treaty would not touch the Internet.\17\
---------------------------------------------------------------------------
    \17\ WCIT-12: Clarification Needed During Open Letter Session, 
ITUBLOG (Nov. 15, 2012), http://itu4u.wordpress.com/2012/11/15/wcit-12-
clarification-needed-during-open-letter-season/ (last visited March 8, 
2013) (``Internet Control is simply not in the ITU mandate and ITU will 
continue to fully support the multistakeholder approach which it 
initiated some ten years ago for the World Summit of the Information 
Society.''); Hamadoun I. Toure, U.N. We Seek to Bring Internet to All, 
Wired.com (Nov. 7, 2012), http://www.wired.com/opinion/2012/11/head-of-
itu-un-should-internet-regulation-effort/ (last visited March 8, 2013) 
(stating ``[n]o proposal will be accepted if it is not agreed upon by 
all participants through consensus.''); Hamadoun I. Toure, Global Media 
Briefing on WCIT, ITU (June 22, 2012), http://www.itu.int/en/osg/
speeches/Pages/2012-06-22.aspx (last visited March 8, 2013) (``We all 
know that, in the true tradition of the ITU, we will not vote on any 
issues- just like in January, at the World Radiocommunication 
Conference, where in four weeks we did not vote once, but came to 
consensus on every issue.''); Speech by ITU Secretary-General Toure, 
The Challenges of Extending the Benefits of Mobile, ITU (May 1, 2012), 
http://www.itu.int/en/osg/speeches/Pages/2012-05-01.aspx (last visited 
March 8, 2013) (``You will, I am sure, have seen and read various media 
articles talking about the UN or the ITU trying to take over the 
Internet. Let me say quite plainly and clearly: This is simply 
ridiculous.''); David McAuley, WCIT `Internet Governance' Hype 
Distracts Attention From Serious Issues, ITU Head Says, Bloomberg, 
Sept. 11, 2012, http://www.bna.com/itus-toure-wcit-b17179869586/ (last 
visited March 8, 2013) (quoting ITU Secretary-General Toure that WCIT 
``has nothing to do with [Internet] Governance.'').

    All three promises were promptly broken \18\ in Dubai in the name 
of making the Internet more ``democratic'' through near-perfect 
Orwellian cynicism. ITU leadership and pro-regulation member states 
succeeded in co-opting arguments for preserving a freedom-enhancing, 
flat and multi-stakeholder driven Internet governance structure while 
turning the logic of these arguments on its head to justify their 
egregious power grab.\19\
---------------------------------------------------------------------------
    \18\ Remarks by Assistant Secretary Strickling at the PLI/FCBA 
Telecommunications Policy & Regulation Institute (Dec. 14, 2012), 
http://www.ntia.doc.gov/Remarks_by_Assistant
_Secretary_Strickling_at_PLI/FCBA (last visited March 8, 2013) (``The 
International Telecommunication Union had made two important promises 
in advance of the conference. First, that it would operate by consensus 
and second, that Internet issues would not be appropriate for inclusion 
in the ITRs. As it turned out, the ITU could not deliver on either of 
these promises. When around 40 percent of the participating countries 
do not sign the final documents of the conference, it is obvious that 
the ITU did not achieve the consensus it had promised.'').
    \19\ Notably, at the end of the WCIT, a ``resolution to foster the 
greater growth of the Internet'' was adopted ``resolving to instruct 
the Secretary-General to continue to take necessary steps for ITU to 
play an active and constructive role'' in Internet governance. This 
will serve to broaden the scope of the ITU's rules to include the 
Internet, undermining the highly successful, multi-stakeholder model of 
Internet governance, therefore stunting its growth, not fostering it.
---------------------------------------------------------------------------
    At the end of the negotiation, 89 countries had signed on to the 
new treaty language, 55 did not sign and 49 did not attend the WCIT. 
The ``vote count'' did not end last December, however. Member states 
have until 2015 to sign the treaty and many more are expected to do so. 
Among those at risk of signing are otherwise close allies, such as many 
European nations. If we do not act quickly, the number of signatories 
to the treaty will increase rapidly.
    In short, the U.S. experienced a rude awakening regarding the stark 
reality of the situation: when push comes to shove, even countries that 
purport to cherish Internet freedom are willing to succumb to the 
clever and deceptive tactics of regulatory incrementalists. Our 
experience in Dubai is a chilling foreshadow of how international 
Internet regulation could grow insidiously and at an accelerating pace.
    Specifically, the explicit terms of the new treaty language give 
the ITU policing powers over ``SPAM,'' and attempt to legitimize under 
international law foreign government inspections of the content of 
Internet communications to assess whether they should be censored by 
governments under flagrantly transparent pretexts such as ``network 
congestion.'' \20\ The bottom line, however, is that the ITU has now 
claimed jurisdiction over the Internet's operations and content.
---------------------------------------------------------------------------
    \20\ International Telecommunication Union, Final Acts: World 
Conference on International Telecommunications, at Art.5B (Dubai 2012) 
(``Final Acts''). The new ITRs provide signing nations with a greater 
ability to regulate the blocking of ``SPAM,'' opening the door to the 
regulation of content on the Internet, including possible blockage of 
political dissent or other forms of protected speech under the First 
Amendment of the U.S. Constitution. See id.
---------------------------------------------------------------------------
    More fundamentally, pro-regulation forces succeeded in upending 
decades of consensus that maintained that Internet service providers, 
as well as Internet content and application providers, should be 
insulated from intergovernmental control. They accomplished this feat 
with simple changes in the definitions of crucial treaty terms.\21\ 
Their audacity doesn't stop there, however. Many countries, in addition 
to the ITU itself,\22\ brazenly argued that the old treaty text from 
1988 gave the ITU broad jurisdiction over the Internet.\23\
---------------------------------------------------------------------------
    \21\ Final Acts at Art.1 abis). For example, an early disagreement 
at the WCIT over the reach of the international treaty's application 
resulted in a vague, undefined new term that could have far-reaching 
consequences. Prior to the WCIT, the ITRs applied only to ``Recognized 
Operating Agencies'' (ROAs), or telecommunications operators in each 
country. During the WCIT, some countries sought to change the term to 
``Operating Agencies,'' expanding the ITRs applicability. This debate 
was resolved by the adoption of ``Authorized Operating Agencies'' 
(AOA), undefined in the ITU Constitution. At present there is no 
definitive interpretation of which entities this provision applies to, 
likely precipitating disputes between member states regarding which 
entities specifically qualify as AOAs. Most assuredly, however, given 
current trends, key member states will push aggressively for 
definitions that are as expansive as possible.
    \22\ The ITU can serve as a useful and constructive forum for the 
resolution of many important international communications policy 
matters, such as harmonization of spectrum and the allocation of 
satellite orbital slots. In contexts such as these, reaching 
international consensus through the ITU can produce positive outcomes. 
The danger, however, lies with unwarranted ITU ``mission creep'' into 
new spheres, such as the complex ecosystems of the Internet. 
Replicating the ITU's antiquated telecommunications regulations for 
modern digital communications technologies and services that do not 
operate like, or in any way resemble, traditional telecom services 
would be highly counterproductive. Although maintaining strong U.S. 
involvement in the pre-WCIT-12 ITU mission is vital, on a going forward 
basis, we should reassess America's support for new ITU actions we find 
harmful to freedom, prosperity, our national interest, and the well-
being of all nations, but especially the developing world.
    \23\ Speech by ITU Secretary-General Toure, WCIT-12--Myths and 
Reality (Sept. 24, 2012), http://www.itu.int/en/osg/speeches/Pages/
2012-09-24.aspx (stating that ``ITU's day-to-day activities [ ] are 
already fundamental to promoting Internet growth.''); WCIT-12 Myth 
Busting Presentation, ITU, Slides 24, 25, http://www.itu.int/en/wcit-
12/Pages/WCIT-background
briefs.aspx (last visited March 8, 2013) (stating that ``[m]any 
consider that [the ITU definition of telecommunications] includes 
communications via the Internet, which runs on telecom infrastructure'' 
and that it is an incorrect ``myth'' that the ``ITU's scope does not 
include the Internet'' and that ``WCIT is about the ITU or the UN 
extending their mandate so as to control the Internet.'').
---------------------------------------------------------------------------
    If these aggressive regulatory expansionists are willing to conjure 
ITU authority where clearly none existed before, their imaginations 
will see no limits to the ITU's authority over the Internet's affairs 
under the new treaty language. Their appetite for multilateral 
regulatory expansionism is insatiable as they envision the omniscience 
of intergovernmental regulators able to replace the billions of daily 
decisions that allow the Internet to blossom and transform the human 
condition.
    At the same time, worldwide consumer demand is driving 
technological convergence. As a result, companies such as Verizon, 
Google, AT&T, Amazon, Microsoft, Netflix, and many more lesser-known 
enterprises in the U.S. and in other countries, are building across 
borders thousands of miles of fiber optics to connect sophisticated 
servers and routers that bring voice, video and data services more 
quickly to consumers tucked into every corner of the globe. From an 
engineering perspective, the technical architecture and service 
offerings of these companies look the same. Despite this wonderful 
convergence, an international movement is growing to foist 19th Century 
regulations designed for railroads, telegraphs and analog voice phone 
monopolies onto new market players that are fundamentally different 
from the monoliths of yore.
    To be blunt, these dynamic new wonders of the early 21st Century 
are perilously close to being smothered by innovation-crushing old 
rules designed for far different technologies which operated in a much 
less competitive market long ago. The practical effect of expanded 
rules would be to politicize engineering and business decisions inside 
sclerotic intergovernmental bureaucracies. As a technical matter, a 
centralized, top-down ``management'' model for the Internet defies its 
flat and democratic architecture and would cause a global engineering 
nightmare. For example, how would a partitioned Internet work? How 
would entrepreneurs be able to build and operate new cross-border 
technologies such as cloud computing?
    More importantly, the effect of a stunted Internet ecosystem 
impaired by a new international regulatory overlay could be devastating 
to efforts to improve the human condition across the globe. If these 
trends continue, Internet growth would be most severely impaired in the 
developing world where Web-connected mobile devices and their 
applications enable worried parents to locate medicine for their sick 
children, villagers to find drinkable water and farmers to learn 
prevailing market prices for their crops.\24\ Even in the U.S., 
brilliant and daring technologists who are working to transform the 
world could be forced to seek bureaucratic permission to innovate and 
invest. At a minimum, this scenario would create tremendous uncertainty 
while driving up costs ultimately borne by all Net consumers.\25\
---------------------------------------------------------------------------
    \24\ See, e.g., Ken Banks, In African Agriculture, Information is 
Power, Nat'l Geographic (Sept. 5, 2011), http://
newswatch.nationalgeographic.com/2011/09/05/in-african-agriculture-
information-is-power/.
    \25\ A recent news article summed up the chaotic effects of a 
partitioned Internet. Note the Russian official's call for the U.S. to 
agree to international regulation of the Net to avoid fragmentation--a 
clever and cynical maneuver to turn arguments against Net regulation on 
their head.

    The U.N. has no power to force the United States to adopt any 
Internet regulation, and the U.S. refused to sign the December treaty, 
along with 55 others countries. But if a large number of countries 
agree on regulations, the Internet could become fragmented, with very 
different rules applying in different regions of the world. ``That 
becomes an engineering nightmare,'' McDowell said. Russia has pushed 
hardest for international Internet regulation. ``In the future we could 
come to a fragmented Internet,'' warned Andrey Mukhanov, one of 
Russia's representatives to the U.N. conference, as the U.S. and many 
European countries declined to sign the treaty in December. 
``[Fragmenting] would be negative for all, and I hope our American and 
European colleagues come to a constructive position.'' But by a 
``constructive position,'' Mukhanov means one with international web 
regulation. . . . Technology groups and companies like Google say that 
the regulations, while they often seem nice on the surface, give 
government the power to censor content.

    Maxim Lott, Internet Still Under Attack by UN, FCC Commissioner 
Says, FoxNews.com (Feb. 13, 2013).
---------------------------------------------------------------------------
    In sum, the dramatic encroachments on Internet freedom secured in 
Dubai will serve as a stepping stone to more intergovernmental 
regulation of the Internet in the very near future. The end result will 
be devastating to global prosperity and freedom.
II. Defenders of Internet freedom must act quickly to turn the threat 
        of increased intergovernmental control of the Internet into an 
        opportunity to reverse course through liberalization of markets 
        that will spark competition, investment and innovation.
    We must act quickly. While we debate what to do next, Internet 
freedom's foes around the globe are working hard to exploit a treaty 
negotiation that is far larger in significance than the WCIT. In 2014, 
the ITU will convene in Busan, Korea and conduct what is literally a 
constitutional convention, called a ``plenipotentiary'' meeting, which 
will define the ITU's mission for years to come. Member states will 
rewrite the ITU constitution and elect a new Secretary General. This 
scenario poses both a threat and an opportunity for Internet freedom. 
The threat is obvious: more international Internet regulation. We have 
an opportunity, however, to change the debate by finding arguments that 
are more compelling to the developing world. We can start by reminding 
member states of the incredible benefits brought forth by policies that 
promote open markets through liberalization and competition. These are 
the paths that have proven to lead to investment, innovation, universal 
connectivity and global prosperity.
    We can start by working to find new allies at the upcoming World 
Telecommunications Policy/ICT Forum (``WTPF''), which convenes in 
Geneva this May. This conference will focus squarely on Internet 
governance and will shape the 2014 Plenipotentiary. Accordingly, the 
highest levels of the U.S. Government must make this cause a top 
priority and recruit allies in civil society, the private sector and 
diplomatic circles around the world.\26\
---------------------------------------------------------------------------
    \26\ The effort should start with the President immediately making 
appointments to fill crucial vacancies in our diplomatic ranks. The 
recent departures of my distinguished friend, Ambassador Phil Verveer, 
his legendary deputy Dick Beaird, as well as WCIT Ambassador Terry 
Kramer, have left a hole in the United States' ability to advocate for 
a constructive--rather than destructive--Plenipot.
---------------------------------------------------------------------------
    Internet freedom's allies simply cannot dither again. If we do, we 
will fail, and global freedom and prosperity will suffer.
III. We must offer other nations, especially those in the developing 
        world that feel disenfranchised from Internet governance 
        processes, an alternative to international regulation by 
        improving and enhancing multi-stakeholder entities, such as the 
        Internet Governance Forum.
    Merely saying ``no'' to any changes to the multi-stakeholder model 
has proven to be a losing proposition, as the outcome of the WCIT 
clearly illustrates. The Plenipotentiary meeting in 2014, and the WTPF 
this coming May in Geneva, provide us with opportunities to amend and 
enhance the current multi-stakeholder structure to include more 
meaningful participation by developing world nations. Due to limited 
time and resources, many smaller countries simply cannot attend the 
myriad Internet governance meetings that are held around the globe each 
year. As a result, a disproportionate amount of aspiring nations feel 
left out of the decision making. Such perceived disenfranchisement has 
fueled the drive to expand the legal authority of the ITU. We should 
work to change this disparity as soon as possible.
    The best avenue to amplify the voice of the developing world would 
be through strengthening participation in the IGF. The IGF was 
chartered in 2005 in Tunis at the U.N.'s World Summit on the 
Information Society. It first met in Athens in 2006. The IGF includes 
among its participants civil society, the private sector, non-profits, 
governments and the ITU itself. Its structure is classically multi-
stakeholder in nature: it operates by consensus and no government or 
other entity controls it. The IGF is a forum for decision making, but 
is not the decision maker. In other words, it is a ``wiki' environment 
that operates in a flat, democratic and bottom-up manner where the 
smallest of players can become empowered, much like the Internet 
itself.
    The international community, including the private sector, civil 
society, non-profits and governments alike, should strive to find ways 
to increase meaningful participation in the IGF by all interested 
stakeholders. As with many organizations, achieving this goal may be a 
matter of raising adequate funds. We should not allow this challenge to 
act as an obstacle, however. If we do not give developing nations a 
meaningful good faith role in shaping the evolution of the Internet 
through a non-governmental multi-stakeholder entity, they will continue 
to vote in great numbers to radically expand the ITU's reach. 
Ironically, it is the developing world that stands to gain the most 
from an unfettered Internet, and they will lose the most under 
centralized, top-down control of the Internet's operations, content and 
economics.
IV. Congress can and should continue to play a constructive role by 
        amplifying the call for more Internet freedom.
    As we make communications policy here in the United States, we tend 
to forget that nearly every government and communications provider on 
the globe studies what we do. Without a doubt, this hearing is 
streaming live in some countries and is being blocked by government 
censors in others. Every detail of our actions is scrutinized while 
influencing nations everywhere.
    Furthermore, when Congress speaks, especially when it speaks with 
one loud and clear voice as it did last year with the unanimous, 
bipartisan and bicameral resolutions concerning Internet freedom, 
policymakers across the globe pause to think. Repeatedly, I have been 
told by international officials that, despite the negative outcome of 
the WCIT, last year's resolutions had a positive effect.\27\
---------------------------------------------------------------------------
    \27\ Many other proposals that would threaten the Internet were 
defeated at the WCIT, such as ``sender party pays,'' which would have 
required Web content providers to pay Internet service providers (ISPs) 
in other countries for the traffic sent over those networks. See also 
David Gross, Walking the Talk: The Role of U.S. Leadership in the Wake 
of WCIT, Bloomberg, Jan. 17, 2013, http://www.wileyrein.com/resources/
documents/Gross--BNA--1.17.13.pdf (last visited March 8, 2013) 
(explaining that Congress's clear message was heard at WCIT, ``This 
action was important not only because of the substance of Congress's 
statements, but also because the world understood just how 
extraordinary it is for our Congress to act with unanimity, especially 
in an era when Congress has immense difficulty reaching consensus on 
almost anything. At the end of WCIT, I heard from many foreign 
officials that they knew that the United States would not sign the 
revised treaty with its Internet-related provisions because Congress 
had sent a clear and unequivocal message that such an agreement was 
unacceptable to the American people.'').
---------------------------------------------------------------------------
    This year, Congress can help by speaking loudly and clearly to 
support policies that promote Internet freedom and global prosperity as 
we head toward the ITU's plenipotentiary meeting in 2014.
Conclusion
    I ask each of you today to take bold and decisive action now. As we 
dine on our Thanksgiving dinners in 2014, let us not look back at today 
and lament how we did not do enough. We have but one chance. Let us be 
resolute and tell the world that all nations will benefit if we stand 
strong together for Internet freedom.
    Thank you for having me before you today. I look forward to your 
questions.
                                 ______
                                 
      Prepared Statement of Hon. Mignon L. Clyburn, Commissioner, 
                   Federal Communications Commission
    Chairman Rockefeller, Senator Thune, members of the Committee, 
thank you for the opportunity to appear before you today. It is good to 
be back, and I look forward to continuing to work with you and the new 
members in the years to come, particularly Senator Scott from the great 
state of South Carolina.
    When I sat before you during our last hearing, I was under 
consideration for a second term on the FCC. Today I wish to thank you 
for your votes of confidence in January.
    I plan to maintain a strong focus on consumer protection, the need 
for robust competition, and ways in which we can ensure that technology 
can advance key, national objectives. In doing so, I wish to stress 
what I see as the primary role of those sitting at this table, and for 
the providers we regulate.
    Last week, I met with a Colorado broadcaster who summed it up 
perfectly. We are trustees, both communications providers and 
regulators alike, each serving this Nation for a specific purpose. To 
the point, American consumers are in need of and will always benefit 
from world-class technology and innovation that often comes from the 
private sector, but both must have assurances that the rules which 
govern this space are timely, clear, and fair. No matter the product or 
service, transparent rules must always be in place to protect all 
parties, ensuring that we all are able to enjoy the advantages and 
opportunities these communications technologies have to offer.
    I believe we have worked hard to fulfill our side of this pact, 
with the Commission and industry successfully communicating on how best 
to advance universal service for voice and broadband, disabilities 
access to communications technologies and services, and better delivery 
systems in the area of public safety.
    Take for example our current review of the FCC's media ownership 
rules. My office has held dozens of meetings with both broadcasters and 
our friends in the public interest community, who are both working to 
seek middle ground on a number of core issues important to each side. 
We want to get the rules right, and I am pleased that we are 
considering every possible option before making a final judgment. I 
have long warned that it would be imprudent and negligent to change any 
rule absent timely and comprehensive data regarding the impact on 
female and minority broadcasters and diverse broadcast programming, and 
I am pleased that at least one organization has begun a study to that 
effect. As a steward of the public interest, I feel duty-bound to 
consider all the facts as we fulfill our statutory obligations.
    The same can be said with regard to our roadmap for incentive 
auctions, and our laser focus on a process that can empower the mobile 
wireless and broadcast TV industries and provide sufficient funds to 
meet the public safety goals. Chairman Genachowski has set forth a 
process that adheres to the statute you and your colleagues in the 
House sent us last year, and we intend to fully comply with the 
language and goals of the legislation. I will never lose sight of what 
I mentioned moments ago, that we are co-trustees, and as such, we will 
continue to work diligently with the broadcast industry and proceed in 
a way that carefully considers the concerns of all stakeholders.
    We also will not stop focusing on improving access to broadband 
networks even in the most hard-to-serve areas of the nation, and the 
reforms of the Universal Service Fund programs have been a significant 
priority for the agency to advance that objective. While physical 
access is important, work is ongoing to promote the adoption and use of 
broadband. Congress directed us to do so in Section 706 of the 
Communications Act, along with our state commissions, and as my last 
act as Chair of our Federal-State Joint Conference on Advanced 
Services, we hosted a summit in February to focus on the various 
adoption programs underway through the Recovery Act funds, as well as 
other public and private sector efforts.
    We highlighted a number of successful projects and the latest 
academic thinking. What we have learned so far is that adoption has 
slowed in recent years, and those consumers who have yet to adopt have 
multiple reasons for not doing so. Cost remains a significant barrier, 
and convincing those who are non-digital natives to get online 
typically involves a trusted local partner, digital literacy training, 
and subsidized services and equipment if affordability is an issue. I 
am pleased that the Commission's Lifeline broadband pilot projects will 
lead to additional data for the Commission to study in order to further 
advance adoption, especially for low-income, senior and minority 
consumers. Moreover, I am encouraged by private sector efforts 
committed to increasing broadband adoption in disadvantaged 
communities. It is a matter of fairness, as one senior executive so 
aptly stated. These are the communities that can be helped the most by 
high-speed Internet access, and the public and private sectors should 
continue to work together in order to better address this imperative. 
As a nation, we can ill-afford to leave anyone behind.
    I am, as always, eager to share your objectives with our 
hardworking staff at the FCC, and pledge to you that I will remain 
diligent and vigilant as a trustee of the American people. Thank you 
again for this opportunity, and I look forward to answering any 
questions you may have.
                                 ______
                                 
     Prepared Statement of Hon. Jessica Rosenworcel, Commissioner, 
                   Federal Communications Commission
    Good afternoon, Chairman Rockefeller, Ranking Member Thune, and the 
distinguished members of the Committee.
    I am honored to appear before you today as a Commissioner at the 
Federal Communications Commission. Prior to serving in this position, I 
had the privilege of serving this Committee as Senior Communications 
Counsel. But of course, joining you here today behind the witness table 
is a different experience altogether. I am grateful for the 
opportunity.
    Let me start by noting that there is no sector of the economy more 
dynamic than communications. By some measures, communications 
technologies now account for one-sixth of the economy in the United 
States. We have more ways to connect, create, and access content than 
at any point in history. These technologies are changing the way we 
educate, entertain, and govern ourselves--in communities all across the 
country.
    But our communications triumphs to date are no guarantee of future 
success. Laurels, are not, in fact, good resting places. So I think it 
is important to start with what we know. We know that we are witnessing 
the breaking down of old barriers between local and long distance; 
voice, video, and data; and wired and wireless. We know that the scope 
of communications convergence is immense--and the digitization of all 
aspects of our economic and civic life is well underway.
    There is no question that this transition is exciting. But it also 
brings challenges. So in these transitional times, what should guide 
the Commission as we carry out the laws developed by Congress? I 
believe that our policies must always do two simple things.
    First, they must promote confidence for private investment in 
digital age infrastructure.
    Second, they must promote confidence for consumers to realize the 
full potential and opportunity that our emerging digital world 
provides.
    This is the prism through which I view all of the Commission's 
actions. It is the prism through which I believe the agency should 
approach the challenging issues ahead. It is the way I believe we can 
best foster growth and opportunity through communications--in urban 
areas, rural areas, and everything in between.
    Now I want to move from the big picture to the particular, from 
method to mechanics--and discuss the major communications issues that 
lie ahead.
Implementing Successful Wireless Incentive Auctions
    The Commission embarked this past September on the complex but 
critical task of conducting wireless incentive auctions. As you 
undoubtedly know, incentive auctions are a new tool that Congress 
provided us with in the Middle Class Tax Relief and Job Creation Act to 
address the near-term demands on our Nation's airwaves.
    The demands on our airwaves are very real. Consider the fact that 
we already have more wireless phones in this country than we have 
people. Half of those phones are smartphones. Today one in five 
households owns a tablet computer--and that number is growing fast. 
Smartphones generate 35 times the traffic of traditional wireless 
phones. Tablet computers generate 121 times the traffic of traditional 
wireless phones. And over the next five years, mobile data traffic is 
expected to grow 13 times what it is today.
    So we must get these auctions right. Because if we get them right, 
we will facilitate the voluntary return of spectrum from commercial 
licensees and promote its efficient reuse. If we get them right, we 
will ease congestion on our airwaves and expedite development of new 
wireless services and applications. That will mean confidence for 
carriers to invest in wireless networks and confidence for consumers to 
take advantage of the growing array of new and innovative services that 
wireless broadband can put in our hands.
    But before we get there, it is useful to consider what has come 
before. For nearly two decades, the Commission's path-breaking spectrum 
auctions have led the world. The agency has held more than 80 auctions; 
it has issued more than 36,000 licenses; and it has raised more than 
$50 billion for the United States Treasury. The Commission's 
simultaneous multiple round ascending auctions have been a model for 
governments and commercial wireless providers across the globe.
    We are now again poised to be the world's pioneer with incentive 
auctions. To ensure our success I believe that four basic principles 
should guide us: simplicity, fairness, balance, and public safety.
    Simplicity is key. Incentive auctions are undeniably complicated. 
But at every structural juncture, a bias toward simplicity for 
participants is crucial. A broadcaster should be able to quickly and 
transparently evaluate the opportunities auctions provide.
    Fairness is essential. This is especially true with regard to the 
treatment of broadcasters that do not participate in the auction. 
Fairness demands that we consider how to accomplish repacking by 
minimizing unnecessary disruption and maximizing the ability of the 
public to continue to receive free, over-the-air television. At the 
same time, we ask that broadcasters make a fair assessment of the 
opportunities that this auction provides. By offering incentives to 
share channels and incentives to relocate from the UHF to the VHF band, 
this auction can mean new resources for broadcasters to develop new 
programming and deploy new services.
    Balance is necessary. None of the three legs of the incentive 
auction--the reverse auction, the repacking, or the forward auction--
can stand on its own. For instance, the interference rules we consider 
will not only impact broadcast services, but also how much spectrum 
will be available for auction, which in turn will impact the revenues 
raised. Choices in one area affect others. This also requires attention 
to the balance between licensed and unlicensed use of spectrum across 
all frequency bands. The former provides reliability and interference 
protection; the latter provides low barriers to entry and promotes the 
efficient use of limited resources. Good spectrum policy requires both.
    Public safety is fundamental. The Commission must remember that 
Congress designated auction revenues to support the first nationwide, 
interoperable wireless broadband public safety network. We must never 
forget that the success of these auctions requires delivering on our 
promise to America's first responders.
    Finally, it is important to put our incentive auctions--and all of 
our spectrum auctions--on a clear timeline. A date certain will focus 
all stakeholders, lead to capital formation, provide certainty for 
broadcasters, and help ensure success.
Developing a New Approach to Federal Spectrum
    Even with incentive auctions on course, demand for our airwaves 
will continue to grow at a breathtaking pace. To keep up, more must be 
done. I believe this requires rethinking our traditional approach to 
Federal spectrum.
    Federal authorities have substantial spectrum assignments. After 
all, critical missions throughout the government are dependent on 
access to our airwaves. Federal authorities use their spectrum 
assignments to protect us from attack, with tools like precision guided 
munitions and early missile warning systems. They use them to manage 
our air traffic, enhance our crop productivity, and monitor our water 
supplies. They use them to protect against forest fires, and to predict 
weather patterns--like Hurricane Sandy--before they occur. These are 
essential to our economic security and our national well-being.
    Nonetheless, we are on a hunt for new opportunities for commercial 
spectrum, in order to reach the 500 megahertz benchmark for new 
wireless broadband use in the Executive Order from President Obama just 
under three years ago. With traditional auctions and incentive auctions 
in the Middle Class Tax Relief and Job Creation Act we are already on 
our way. But meeting this mark will require more. It will require a 
fresh look at Federal uses.
    The traditional approach to repurposing Federal spectrum for 
commercial use entailed three distinct steps: clear Federal users out, 
relocate them, and auction the spectrum for new commercial use. But 
while this three-part command worked well in the past, it is unlikely 
to work as well going forward. Just as in the commercial sector, more 
government functions than ever before are traveling over our airwaves 
and it is growing harder to find spectrum for Federal relocation.
    So it is time for a new approach. It is time to develop a series of 
incentives to serve as the catalyst for freeing more Federal spectrum 
for commercial use. Government agencies are mission focused. Once a 
communications network has been built, once a land mobile radio system 
is operational, agencies do not want to change because it disrupts 
their mission. This is completely rational. But what if we were to 
reward Federal authorities for efficient use of their spectrum 
resource? What if they were able to reclaim a portion of the revenue 
from the subsequent re-auction of their airwaves? Or enjoy a benefit in 
their budget every time they increased their efficient use of the 
airwaves? Would they make new choices about their missions and the 
resources they need to accomplish them? I think so. In short, instead 
of sticks, we should try carrots. We must work with our government 
partners so they can realize the value of their spectrum and the value 
of using it efficiently--instead of only seeing loss from its 
commercial reallocation.
Fostering the Transition to IP Networks
    When it comes to communications network infrastructure, we are 
living in a transitional time. We have the public switched telephone 
network and an emerging Internet Protocol (IP) ecosystem. Today they 
coexist. The new and the next interconnect. They are jointly 
responsible for carrying our communications.
    The numbers clearly demonstrate this transition. In 2001, there 
were 192 million circuit-switched telephone lines. A decade later, this 
number declined by more than 40 percent to 107 million. In contrast, 
interconnected Voice over Internet Protocol (VoIP) subscriptions have 
risen by more than 50 percent since 2008, and now number 37 million. 
Add to this that over one-third of households have cut the cord 
entirely, with their wireless phone their only phone.
    What we have is a trend. The ways consumers choose to connect are 
growing more diverse, and so are the networks over which our 
conversations and content travel.
    The Commission is guiding the course for this transition right now. 
It has petitions before it that pose basic questions about fostering 
the migration to IP network infrastructure. It also has a task force 
charged with comprehensively considering issues posed by this 
transition.
    These are good developments. Because we must do more than just 
apply the laws of the present to the networks of the future. We must 
make choices that inspire confidence and private investment in our 
Nation's infrastructure.
    To this end, companies need to understand what policies guide the 
Commission's actions, both from a regulatory and enforcement 
perspective. We will undermine investment if we are not clear. So as we 
develop a framework for the IP transition, I think we should be clear 
and not get lost in legal minutiae. We need to ask big questions about 
the basic values in our communications laws. For my part, I see four: 
public safety, universal service, competition, and consumer protection.
    First, public safety is paramount. In the very first sentence of 
the Communications Act, Congress instructed the Commission to make 
available, ``to all the people of the United States. . .a rapid, 
efficient, Nation-wide, and world-wide radio and communication 
service'' in order to promote the ``safety of life and property.'' In 
light of this directive, any technological or network transition must, 
first and foremost, be judged by its ultimate impact on public safety 
and network resiliency.
    But as the numbers I just shared with you demonstrate, we are 
migrating to wireless and IP networks. That means that we are choosing 
to go without the independent electrical source that traditionally 
powered wireline copper plant. Our new wireless and IP technologies are 
dependent on commercial power. When that goes out, so do connections. 
But as consumers switch to new networks, I do not believe we have to 
sacrifice safety in the process.
    So as a result, I think it is time for an honest conversation about 
network reliability in the wireless and digital age. It is time to ask 
hard questions about back-up power, and how to make sure our networks 
are more dependable when we need them most. We also need to make sure 
that consumers understand the benefits--and limitations--of new 
technologies when they reach out for emergency assistance. Hurricane 
Sandy demonstrated this need with painful clarity.
    Second, universal service is still essential. No matter who you are 
or where you live, prosperity in the 21st century will require access 
to broadband services. The Commission's ongoing efforts to promote 
broadband deployment and adoption are built on this simple truth. But 
as we transition to new technologies, we must ensure that no American 
is left behind.
    Third, competitive markets are critically important. Competition 
inspires private sector investment. The competitive markets that have 
spurred so much technological innovation in the past will be the most 
effective means of making sure that consumers reap the benefits of this 
network transition in the future. This requires special attention to a 
key element of the Telecommunications Act that has made our patchwork 
of competitive networks work seamlessly: interconnection.
    Fourth, consumer protection is always in the public interest. In a 
transitional world, consumers rely on both old and new technologies. We 
need to help consumers understand what different technologies offer, 
help them make informed choices, and inspire confidence in the range of 
new services this transition is making available.
    As we assess changes in the public switched telephone network, I 
think these principles are good guideposts. I think we can work within 
this framework and promote confidence in network investment across the 
country.
Updating Universal Service and E-Rate for the Broadband Age
    Universal service is a cherished notion in communications. After 
all, it was back in 1934 when Congress first directed the Commission to 
make ``communication by wire and radio'' available ``so far as 
possible, to all the people of the United States.'' And it was Congress 
who expanded on this notion by adding new principles to guide universal 
service policy to the law in 1996. As a result, today, the duty to 
preserve and advance universal service is the law of the land.
    Technology changes, but these basic legal principles have not. That 
is why, a little over a year ago, my colleagues at the Commission 
updated the high-cost universal service and intercarrier compensation 
system. This was a historic effort. They refocused the fund from last 
century's technology on to the broadband and wireless communications 
challenges of this century. They put it on a budget. And they increased 
accountability throughout.
    But I do worry that our reforms to the high-cost universal service 
system are extremely complex. I fear that this complexity can deny 
carriers dependent on it the certainty they need to confidently invest 
in network infrastructure. So when opportunities arise to simplify our 
rules in a manner that is fiscally sound, good for rural consumers, and 
bound to inspire investment--we should seize them. Our policies must 
strive to provide carriers with confidence to invest in broadband and 
wireless infrastructure and provide rural consumers with confidence 
that they will have access to first-rate communications services.
    To this end, I am pleased that the Commission recently made 
adjustments to the universal service reforms it put in place for rate-
of-return carriers serving rural areas. Specifically, it combined 
separate capital and operating expense benchmarks into a single new 
benchmark. As technical as this sounds, it simplifies our regression 
analysis and provides carriers with more flexibility and more 
confidence to invest in their networks. This is a good thing.
    However, going forward I would like to see similar adjustments made 
for price cap carriers serving rural communities. Specifically, I would 
like to see the Commission distribute incremental support from its 
first phase of the Connect America Fund as soon as possible. With more 
than 14.5 million rural consumers without broadband today, these funds 
could be put to use right now to expand service and create jobs in 
rural America. Delaying their distribution until a long-term cost model 
is developed under the Connect America Fund would only further delay 
rural broadband deployment.
    Going forward, we also need to update the E-Rate program to meet 
21st century education needs. In my current role, I have met with 
school superintendents in communities as diverse as Miami, Florida and 
Kotzebue, Alaska. They are uniform in one thing--their praise for the 
power of E-Rate to bring high-speed communications to their schools and 
libraries. They believe it is essential for digital age learning. But 
year-in and year-out, the demand for this program is double the amount 
the Commission makes available. Moreover, our surveys suggest that 80 
percent of schools and libraries believe their broadband connections do 
not meet the current needs. So I believe it is time for E-Rate 2.0. I 
think it is time to reboot, reinvest, and reinvigorate this program and 
put it on a course to provide higher speeds and greater opportunities 
in the days ahead.
Recommitting to Consumers
    Communications and media services are becoming a more substantial 
part of all of our household budgets. Consumer expenses on 
communications bills average more than 4 percent of disposable income. 
For many households, that can mean thousands of dollars a year. To be 
clear, we are getting a lot more value from these services. We have 
more channels than ever before. We have faster broadband. We have 
mobility, and with it the expectation that wherever we go, the ability 
to connect will follow.
    But consumer wallets are not without limit. Pocketbooks have their 
bottom. In a world where consumer choices have become both vast and 
complex, information is power. So it is vitally important to get 
consumers the information they need to make choices with confidence in 
a marketplace that can be bewildering to navigate.
    Consider, for example, the dizzying array of wireless plans 
available: shared and individual plans, limited and unlimited voice, 
data, and text. To stay within a plan can require keeping track of 
voice, data, and text usage across multiple devices. But I believe that 
nobody should need to hire a lawyer to understand their wireless 
contract and nobody should need to hire an accountant to explain their 
bill. That is why the Commission's bill shock initiative, developed 
with wireless carriers, is an especially terrific effort. As a result, 
going forward, wireless customers will get alerts before they reach 
their voice, data, text, and international roaming limits. So they will 
no longer unknowingly rack up unexpected charges on their bills. It's a 
nice demonstration of how good information can provide consumers with 
the confidence to adopt new technologies and services--and benefit from 
their functionality.
    But we can do more. For starters, I believe our consumer complaint 
process needs an upgrade. While the digital age advances, our consumer 
complaint process is stuck in the analog era. Consider that every year 
the Commission receives roughly 400,000 complaints and inquiries. The 
interfaces we have, however, are dated and the information we provide 
has too much of the special charm of regulatory legalese. We can do 
better. It is time update this process and so we can answer questions, 
direct queries, and help consumers navigate the range of communications 
services they use in every aspect of their lives.
    But we should go further. This is the era of big data. We should 
not just collect this complaint and inquiry information from consumers 
and publish it in snapshot form. We should take these numbers and make 
them accessible in machine-readable formats, and if possible, with 
common metadata tagging schemes. We need to use these data to inform 
the Commission's policy activities and ensure consumers are treated 
fairly. We can also turn to others to slice and dice these numbers and 
identify meaningful trends that deserve our national attention, 
concern--or even praise.
    In this way we can recommit to consumers, help them get good 
information about their communications services, contracts, and 
options--and help them make better choices.
    Let me close by saying that it is an exciting time in 
communications. The issues before us present real challenges. But their 
smart execution can also yield great things: confidence for private 
investment in infrastructure and confidence for consumers to realize 
the wide range of opportunities new digital age services provide.
    I look forward to working with you and answering any questions you 
might have.
                                 ______
                                 
          Prepared Statement of Hon. Ajit Pai, Commissioner, 
                   Federal Communications Commission
    Chairman Rockefeller, Ranking Member Thune, and Members of the 
Committee, it is a privilege to appear before you this afternoon. I 
last testified in front of this Committee on my third day in office, 
and that, it turns out, was exactly three hundred days ago. Since that 
appearance, I have been working at the Commission to advance a number 
of key objectives: freeing up more spectrum for commercial mobile 
broadband; removing regulatory barriers to infrastructure investment; 
promoting a vibrant and diverse media marketplace; and making the FCC 
as nimble as the industry that we oversee. In some of these areas, we 
have made progress over the course of the last ten months. But there is 
still much more that we need to do.
1. Spectrum
    Let's start with spectrum. A large part of our time at the agency 
has been spent evaluating and implementing the responsibilities that 
Congress entrusted to us in the Middle Class Tax Relief and Job 
Creation Act of 2012. In the Act, Congress tasked the Commission, among 
other things, with getting more spectrum into the commercial 
marketplace to address the looming spectrum crunch and facilitating the 
establishment of a nationwide, interoperable public safety broadband 
network.
    Holding a successful broadcast incentive auction is critical to 
both tasks. This auction is our best opportunity to push a large amount 
of spectrum well-suited for mobile broadband into the commercial 
marketplace. And Congress has directed that proceeds from that auction 
will fund the deployment by the First Responder Network Authority 
(FirstNet) of a nationwide, interoperable public safety broadband 
network. For these reasons, I believe that we must implement our 
incentive auction authority with dispatch. Accordingly, last July, I 
called for the FCC to commence the incentive auction rulemaking process 
in the fall. To his credit, Chairman Genachowski launched a timely 
proceeding last September, and I thank him for that.
    As the Commission moves forward on incentive auctions, I believe 
that four principles should guide our work. First, we must be faithful 
to the statute. It is our job to implement this legislation, not to 
rewrite it to conform to our policy preferences. Second, we must be 
fair to all stakeholders. This is especially important because the 
incentive auction will fail unless both broadcasters and wireless 
carriers choose to participate. Third, we must keep our rules as simple 
as possible. The broadcast incentive auction is inherently complicated; 
unnecessary complexities are likely to deter participation. And fourth, 
we need to complete this proceeding in a reasonable timeframe. I 
believe that we should aim to conduct the auction no later than June 
30, 2014.
    Although I am optimistic that fidelity to these principles will 
result in a successful broadcast incentive auction, I also see some 
storm clouds on the horizon. I am concerned, for example, that the 
incentive auction may not provide sufficient funding for FirstNet to 
build a nationwide, interoperable public safety broadband network. Only 
one closing condition was set forth for the incentive auction in last 
fall's Notice of Proposed Rulemaking: that the revenues from the 
forward auction must cover the costs of the reverse auction. Such an 
outcome, in my view, would be entirely unacceptable. It would mean no 
money for FirstNet to build out a nationwide, interoperable public 
safety broadband network; no money for state and local first 
responders; no money for public safety research; no money for deficit 
reduction; and no money for Next Generation 911 implementation. The 
statute mentions each of these items, which makes it difficult to 
square that legislation with an auction that would provide no funding 
for any of them. This is why I believe it is imperative for the 
incentive auction's rules to take into account the need to maximize net 
revenues.
    Another worry involves limits that the Commission might place on 
auction participation. We need robust participation from television 
broadcasters, current wireless operators, and new entrants in order to 
produce the revenue necessary to construct the nationwide, 
interoperable public safety network. The more people at the party, so 
to speak, the better the party will be. But if the Commission 
preemptively tells broadcasters ``You may bid this high, but no 
higher,'' many may not show up for the reverse auction. And if the 
Commission starts picking and choosing who may participate in the 
forward auction--such as by setting a spectrum cap or narrowing the 
spectrum screen despite the robust competition in the wireless market--
it will result in less participation, less revenue, less spectrum 
available for mobile broadband, and less funding for public safety.
    It's worth exploring a bit further the implication of the last item 
I mentioned. Ensuring interoperable public safety communications has 
been a national priority for over a decade. Indeed, the 9/11 Commission 
identified the lack of interoperability as a serious hole in our 
Nation's public safety communications and demanded that it be 
addressed, and this Committee has led the way in seeking to solve this 
problem. So given the importance of constructing a nationwide public 
safety network, I am committed to maximizing the net revenues obtained 
through the commercial broadcast incentive auction.
    The Commission has already received the first round of comments in 
the incentive auction proceeding, and the deadline for reply comments 
is today. I look forward to reviewing the complete record because we 
can only make well-informed decisions if we listen to public input. 
Take, for example, the 600 MHz band plan. In the first round of 
comments, the Commission's proposed band plan has met with near-
universal opposition. Neither broadcasters nor the wireless industry 
believes that it would work. Fortunately, however, our band-plan 
proposal did have one positive impact. It motivated broadcasters and 
wireless carriers to come together and reach agreement on key 
principles for an alternative band plan.
    In addition to carefully considering the views of all commenters, I 
also look forward to continuing to receive feedback from Congress, 
particularly Members of this Committee. Given your key role in crafting 
this legislation, it is vital that the Commission keep open the lines 
of communication with you. It is also important for us to coordinate 
closely with Canada and Mexico to address issues involving border 
areas. Absent such coordination, we will have neither a timely nor 
successful auction.
    Of course, the broadcast incentive auction isn't the only auction 
the Commission has on its plate. The Act also directs the Commission to 
auction off 25 MHz of spectrum adjacent to AWS-1 (2155-2180 MHz). This 
spectrum would ideally be paired with another 25 MHz block adjacent to 
AWS-1: 1755-1780 MHz. These bands are already internationally 
harmonized for commercial use, which means deployment will be swifter 
and cheaper than other options. If we auction off this spectrum in the 
next two years, it could raise billions of dollars for FirstNet, Next 
Generation 911 implementation, and deficit reduction.
    As you know, there is a hitch in the giddyup. The 1755-1780 MHz 
band is currently occupied by the Federal Government. Federal 
incumbents don't necessarily have an incentive to consolidate their 
spectrum holdings or update their spectrum usage with more efficient 
alternatives that could improve their ability to carry out their 
missions. But there is an established solution for productive 
collaboration. The Commercial Spectrum Enhancement Act and the Middle 
Class Tax Relief and Job Creation Act apply an open, transparent, 
market-based approach to Federal spectrum through the notification-and-
auction process. Let me outline that process briefly.
    The notification-and-auction process begins with the FCC notifying 
the National Telecommunications and Information Administration (NTIA) 
that we intend to auction Federal spectrum for commercial use. That 
notification starts an 18-month clock that must run before we can 
reallocate the spectrum. Once we notify NTIA, Federal incumbents have 
10 months to submit transition plans to NTIA's Technical Panel, which 
then has 30 days to review these plans. At the one-year mark, NTIA and 
the Office of Management and Budget (OMB) notify the Commission of the 
estimated costs and timeline for making that spectrum available for 
commercial use based on these transition plans. Two months later, NTIA 
publishes the transition plans, and non-federal users have an 
opportunity to challenge the transition plans if, for example, they 
think a transition plan overstates the costs of relocating the Federal 
incumbent. Finally, 18 months after the initial notification, the 
Commission may auction the spectrum.
    The Commission should commence the notification-and-auction process 
now to preserve our ability to auction the 1755-1780 MHz spectrum 
paired with the 2155-2180 MHz spectrum we are required by law to 
auction by February 2015. Starting sooner rather than later maximizes 
flexibility and fairness for everyone. Federal incumbents will have 
more time to develop transition plans. Non-federal users will have more 
time to challenge cost estimates associated with those plans. And NTIA 
and OMB will have more time to calculate the total costs of allowing 
commercial use of the spectrum. There is little downside, because if 
the auction does not raise more than 110 percent of the estimated costs 
of transitioning, auction participants and Federal incumbents are held 
harmless.
    An important choice will face us after we commence the 
notification-and-auction process: We will need to decide whether the 
spectrum should be cleared and reallocated for exclusive commercial use 
or whether we should auction off only ``shared rights.'' I believe our 
goal should be clearing. If our goal is to incentivize investment in 
wireless networks, nothing beats clearing. That's one reason the Middle 
Class Tax Relief and Job Creation Act puts a thumb on the scale for 
clearing and only allows sharing if clearing is technically infeasible 
or cost prohibitive.
    Not that I'm opposed to spectrum sharing. For example, geographic 
sharing by creating exclusion zones around certain areas can be a 
useful tool. But spectrum sharing is a complicated and largely untested 
endeavor that requires a lot of coordination among potentially hundreds 
of Federal users and licensees. The largest wireless providers in 
America may be both willing and able to do so. But I doubt that smaller 
ones who lack the time or resources are. Indeed, the GAO reported to 
Congress last year that Federal sharing would require a lengthy and 
unpredictable process that would be especially costly for new entrants. 
And sharing could embroil the Commission in lengthy and sensitive 
interference disputes. After all, an interference dispute between a 
commercial licensee and a government user is far more likely to become 
mired in politics than an argument between two private parties--
especially if the government agency uses that spectrum for defense or 
other high-priority operations. Recent experience suggests that we 
should be reluctant to enter this thicket.
    There's one last piece of spectrum I'm excited to discuss: the 5 
GHz band. Last month, the Commission teed up the expansion of 
unlicensed use by a full 195 MHz in the 5 GHz band. We were not 
obligated to go this far--the statute only required that we commence a 
proceeding on opening up 120 MHz--but I was especially excited that we 
did because it's smart policy.
    Our proposal builds on past successes, such as our Part 15 rules 
that helped enable Wi-Fi and Bluetooth, and uses spectrum ideally 
suited for unlicensed use. The short-range propagation characteristics 
of 5 GHz spectrum enable localized reuse with minimal risk of 
interference. Manufacturers are already building devices to work on 5 
GHz spectrum. And our proposal would create large, contiguous swaths of 
spectrum--exactly what the standard for Super Wi-Fi, IEEE 802.11ac, 
requires for high-speed, high-capacity data transfers. For example, a 
160 MHz-wide channel could deliver 1 gigabit of data per second. In 
short, more unlicensed spectrum in the 5 GHz band will allow higher-
speed, higher-capacity connections and will mean less congestion in 
apartment buildings and coffee shops, libraries, and offices.
    Achieving this vision will not be without its challenges. The 
Middle Class Tax Relief and Job Creation Act lets us expand unlicensed 
use into the 5350-5470 MHz band only if we determine that ``licensed 
users will be protected by technical solutions, including use of 
existing, modified, or new spectrum-sharing technologies and 
solutions.'' We also must find that ``the primary mission of Federal 
spectrum users. . .will not be compromised by the introduction of 
unlicensed devices.'' To help us in these tasks, the NTIA has reported 
on the potential impacts to Federal Government users from expanding 
unlicensed use. And I appreciate their work. But you gave us the 
ultimate responsibility, and I hope that we will consider whether 
Federal incumbents should alter their systems or operations to 
accommodate unlicensed devices in this spectrum and what solutions will 
work, keeping in mind the costs and benefits of all potential options.
2. The Internet Protocol (IP) Transition
    Today, almost every segment of the communications industry is 
competing to offer newer, faster, and better broadband services. 
Telecommunications carriers are upgrading DSL with IP-based technology 
and fiber. Cable operators are deploying DOCSIS 3.0 to increase 
bandwidth tenfold. Satellite providers are offering 12 megabit packages 
in parts of the country that never dreamed of such speeds. And millions 
of Americans--many of whom don't subscribe to fixed broadband service 
at home--now have access to the Internet on the go using the mobile 
spectrum the Commission auctioned back in 2006 and 2008.
    Underlying these changes is a technological revolution. Analog 
signals have gone digital. Circuit switching is giving way to packet 
switching. And first-generation cellular has been replaced with ultra-
fast LTE. The common thread knitting all of these changes together is 
the Internet Protocol (IP), a near-universal way to organize and 
transmit data.
    What are the results of all this broadband competition? More 
choices for consumers, and major challenges to old business models. 
Traditional voice telephony is a good example. In living memory, your 
one option was Ma Bell. But now you can select among a number of Voice 
over Internet Protocol (VoIP) providers, including cable operators. Or 
technology companies like Google, Skype, and Facebook. Or even video 
teleconferencing providers. Essentially, voice is becoming just another 
application riding over the Internet. It's no surprise, then, that 
today only a third of U.S. households subscribe to plain old telephone 
service over the public-switched telephone network (PSTN), and that 
number is dropping each year.
    Yet the Communications Act still assumes that everyone gets plain 
old telephone service over the PSTN. And it doesn't say clearly how IP-
based services should be regulated, if at all. Nine years ago this 
month, then-Chairman Powell opened the IP-enabled services docket to 
try to resolve this anachronism and ambiguity. But many of the 
questions raised in that proceeding still remain. How should IP-based 
services be classified under the Act? What's the FCC's authority to 
regulate these services? And if we do have authority, how should we 
exercise it? In short, what approach should we take to the IP 
transition? No matter how the FCC answers these questions, make no 
mistake: our transition to an all-IP future will happen. But what we do 
will have a dramatic impact on the speed and success of that 
transition.
    I believe that the Commission needs to take a hard look at its 
regulations in light of the coming IP transition, if for no other 
reason than that the American people are ahead of Washington on this 
issue. Through millions of individual choices, consumers are sending a 
clear message about the superiority of IP-enabled networks. (For 
instance, in 2011, there were over 37 million VoIP subscriptions.) 
Government should heed this message and give the private sector the 
flexibility to make investment decisions based on consumer demand, not 
outdated regulatory mandates.
    There are signs that we've already started off on the right foot. 
Just this past December, Chairman Genachowski created a Technology 
Transitions Policy Task Force. Back in July, I called for such a task 
force, one that would help us take a holistic approach to the IP 
transition and focus our deliberations on a task that so desperately 
needs to be done. The Task Force will hold its first workshop next 
week. And I hope it will continue to solicit input from the public and 
develop proposals for hastening the IP transition. Given the pace of 
change, the Task Force should start forming recommendations promptly.
    Although I would not want to prejudge the work of the Task Force, 
there are a few guidelines that I think should shape their 
deliberations and the Commission's own work on the IP transition. 
First, we must ensure that vital consumer protections remain in place. 
When consumers dial 911, they need to reach emergency personnel; it 
shouldn't matter whether they are using the PSTN, a VoIP application, 
or a wireless phone. The same goes for consumer privacy protections and 
antifraud measures like our slamming rules. Second, we must not import 
the broken, burdensome economic regulations of the PSTN into an all-IP 
world. No tariffs. No arcane cost studies. And no hidden subsidies that 
distort competition to benefit companies, not consumers. But promises 
are not enough: I expect we would recommend the repeal of old-world 
regulations that no longer make sense in a competitive all-IP world. 
While they remain on the books, wholesale expansion to IP may just be 
too tempting. Third, we must retain the ability to combat discrete 
market failures and protect consumers from anticompetitive harm. 
Fourth, we must respect the meets and bounds of the Communications Act 
and not overstep our authority.
    How do we put these principles in practice? Probably the best way, 
in my eye, is to start with an All-IP Pilot Program that would allow 
companies to choose a discrete set of wire centers where they could 
turn off their old time-division-multiplexed electronics and migrate 
customers to an all-IP platform.
    Conducting a trial run before implementing big changes is nothing 
new for the FCC. Before we turned off analog broadcasting, then-
Commissioner Copps had the good idea of testing the concept. That 
experiment, which was held in Wilmington, North Carolina, provided 
valuable feedback and helped make the nationwide DTV transition a 
success. Similarly, the FCC launched a rural healthcare pilot program 
in 2007. The success of that pilot led to the creation of the 
Healthcare Connect Fund this past year. There are plenty of other 
examples, from spectrum sharing to the E-Rate program.
    In all those cases, we found out that predictions are no substitute 
for hard facts and that a paper process isn't nearly as data-driven as 
a real-live experiment. That surely will be true for the IP transition, 
which represents perhaps the most fundamental transformation in the 
history of telecommunications. To quote Blair Levin, the father of the 
National Broadband Plan, an All-IP Pilot Program would be ``worth a 
thousand pleadings.''
    How should we structure this experiment? Let's start with some 
basic principles. For one, participation in the All-IP Pilot Program 
should be voluntary. No carrier should be forced to participate, and 
pilot sites should be located in states that are ready and willing to 
embrace the IP transition.
    For another, tests should ideally be conducted in a variety of 
places that represent our country's diverse geography and population. 
We'll learn the most from the pilot program if there are sites in 
urban, suburban, and rural communities. And we have to make sure that 
low-income and minority communities are included, because the IP 
transition is for everyone.
    For yet another, no one should be left behind, so residential 
customers with fixed telephone service today should continue to have 
voice service available to them even when that service is based on IP. 
And business customers should know in advance what IP-based services 
will replace what they currently have.
    Finally, we must be able to evaluate the All-IP Pilot Program in 
order to figure out what worked and what didn't. This will help us make 
the broader IP Transition. With empirical data in hand, we can reject 
the rhetoric in favor of reason.
    I should note that the All-IP Pilot Program isn't an issue that 
divides the left from the right, Republicans from Democrats, or urban 
America from rural America. Endorsements range from AT&T to the 
National Cable and Telecommunications Association, from Bandwidth.com 
to Alcatel-Lucent. Organizations like the NAACP, the National Urban 
League, the Rainbow PUSH Coalition, the National Grange, and the 
National Farmers Union also want a pilot program. So do advocacy groups 
like the Minority Media and Telecommunications Council, the Asian 
American Federation, the League of United Latin American Citizens, 
Women Impacting Public Policy, the U.S. Chamber of Commerce, and the 
American Consumer Institute.
    Moving forward with an All-IP Pilot Program would send a powerful 
message to the private sector that we intend to embrace the IP 
Transition through a data-driven process. We would signal that we won't 
force carriers to invest in old and new networks forever. We would move 
closer to the day when carriers will be able to focus exclusively on 
investing in the networks of tomorrow rather than maintaining the 
networks of yesterday.
3. The Universal Service Fund
    Speaking of the networks of tomorrow, we must recognize that 
broadband operators in rural America today face unique challenges. 
Unlike the urban environment, rural carriers must carefully plan their 
infrastructure over a five-, ten-, or twenty-year time scale if they 
are to recover their costs. Congress recognized this in section 254 of 
the Act, and we need to think long and hard about the statutory command 
that universal service support be ``predictable.''
    Now, we can argue over the proper size of the Universal Service 
Fund, but all of us should be able to agree that given its size, it 
should be distributed consistent with the law and common sense. For 
example, a constant stream of reforms every year or two is unlikely to 
give investors much certainty. Instead, the Commission needs a long-
term strategy and must sometimes be patient before demanding more from 
the industry.
    Take the quantile regression analysis (QRA) benchmarks created by 
the Commission in the 2011 Universal Service Transformation Order and 
implemented by the Wireline Competition Bureau in the 2012 Benchmarks 
Order. The QRA benchmarks are supposed to create ``structural 
incentives for rate-of-return companies to operate more efficiently and 
make prudent expenditures.'' But reality has not caught up with theory. 
Instead, the QRA benchmarks have resulted in unpredictability and 
uncertainty, chilling the investment climate and impeding the 
deployment of next-generation technologies and broadband services to 
rural Americans.\1\
---------------------------------------------------------------------------
    \1\ Letter from John Charles Padalino, Acting Administrator, Rural 
Utilities Service, to Marlene H. Dortch, Secretary, FCC, WC Docket Nos. 
10-90, 07-135, 05-337, GN Docket No. 09-51, CC Docket Nos. 01-92, 96-
45, WT Docket No. 10-208, at 1-2 (Feb. 15, 2013), available at http://
apps.fcc.gov/ecfs/document/view?id=7022122067.
---------------------------------------------------------------------------
    It is true that the Commission recently gave rural carriers some 
short-term relief from the 2013 QRA benchmarks. For example, one 
problem with the QRA benchmarks was that they limited the capital 
investments (capex) and operating expenses (opex) of carriers 
separately even though carriers should trade off capex and opex to 
minimize the total cost of the network. This salutary measure alone 
should reduce the number of capped rural carriers from 159 to 70 in 
2013.
    But we did not go far enough. The data underlying the benchmarks 
are themselves flawed; the only comprehensive study of the benchmarks 
conducted to date found significant problems with fourteen of the 
sixteen variables used to produce them.\2\ And the Commission has 
forthrightly admitted flaws in the maps it used and is in the process 
of collecting accurate data. Hopefully, this process will be completed 
and necessary revisions will be made before 2014.
---------------------------------------------------------------------------
    \2\ Vincent H. Wiemer & Michael J. Balhoff, CFA, White Paper: 
Lessons from Rebuilding the FCC's Quantile Regression Analysis at 17 
(Feb. 2013), available at http://go.usa.gov/4he4; see also id. at 28 
(``[T]he effect of the use of the model. . .is to create a much higher 
degree of unpredictability and to incent very conservative levels of 
spending by an individual carrier so that it does not risk shortfalls 
in recovery on its high-cost spending. Then, if most carriers take this 
approach each year as would be rational, each subsequent year becomes 
more conservative and there is a potential `race to the bottom.' ''); 
id. at 68 (``The new QRA is duck hunting when the winds are high, the 
distance is farther, and, for sport, there is no light.'').
---------------------------------------------------------------------------
    I should note that, like my colleagues, I believe that establishing 
limits on the universal service support a carrier can receive is a good 
thing. In this era of fiscal restraint, no one can expect the 
government to continue to fund their expenses without question. But the 
QRA benchmarks do not reduce the size of the USF. They merely impact 
how funds are distributed, and I have my doubts about the utility of 
the QRA benchmarks as implemented.
    For example, the 2013 QRA benchmarks do not incentivize efficient 
investment because they apply to expenses incurred two years ago, in 
calendar year 2011. And the Universal Service Transformation Order was 
not even released until November of that year. They do not plausibly 
redirect support from low-cost areas to high-cost areas because, even 
after our recent order, carriers like Copper Valley Telephone and 
Arctic Slope Telephone will have lower caps merely because they serve 
Alaska. They do not target inefficient carriers (only ``outliers''), 
nor do they encourage broadband deployment. Indeed, if a rural carrier 
below the cap chooses to reinvest any additional support it receives in 
broadband, it risks pushing itself over the cap in future years, thus 
mitigating any benefit from that additional support. In short, I am 
concerned that the QRA benchmarks may simply redistribute support from 
one group of carriers to another arbitrarily.
    The QRA benchmarks are not the only area where the Commission needs 
to take its statutory duty of predictability seriously. Right now, the 
Commission is working on the model that will underlie the long-term 
support envisioned by Phase II of the Connect America Fund. Although I 
had been hopeful that we would have it ready by 2013, that did not 
happen, and it looks like we will not be ready for Phase II anytime in 
the near future. While that is disappointing, it is better to get the 
answers right than to get them right now. But we should be forthright, 
declare that Phase II will not be ready until 2014, and, as 
Commissioner Rosenworcel recently suggested, move forward with the 
second tranche of Phase I as envisioned by the Universal Service 
Transformation Order. Better to set a goal firmly in our sights and let 
everyone work toward it than to keep capital on the sidelines.
4. Wireless Infrastructure
    Removing regulatory barriers to wireless infrastructure investment 
is another priority for the Commission. When building next-generation 
wireless broadband networks, for example, a major challenge is 
complying with the multifarious federal, state, and municipal 
regulations covering a wide range of physical infrastructure, from 
towers to small cells. Some oversight is necessary to ensure sound 
engineering and safety, to be sure, but many procedures are not 
designed with facilitating deployment in mind. This makes getting the 
necessary permits and sign-offs an expensive, onerous, and 
unnecessarily long process.
    The Commission has taken some steps in an effort to address this 
problem. In 2009, for example, we adopted shot clocks for localities to 
act on siting applications for wireless facilities. That ruling is now 
before the Supreme Court in City of Arlington v. FCC, and we shall see 
in the next few months whether that rule stands or whether we must 
return to you for direction. More recently, the Commission sought to 
clarify the scope and meaning of section 6409(a) of the Middle Class 
Tax Relief and Job Creation Act, which prohibits state and local 
governments from denying certain collocation requests.
    But more must be done to reduce regulatory barriers to the 
deployment of wireless infrastructure. First, I believe the FCC should 
make clear that delays to the FCC's shot clock process through 
moratoriums are contrary to section 332 of the Communications Act. This 
would address the tactic some localities have used to evade deadlines 
of adopting an indefinite ``time out'' on the approval of wireless 
infrastructure.
    Second, the FCC needs to address what happens if a local government 
doesn't comply with a shot clock. Currently, if a city does not process 
an application within 150 days, the only remedy is to file a lawsuit. 
This increases delay and diverts investments away from networks. To 
solve this, the FCC should supplement its shot clocks with a backstop: 
If a locality doesn't act on a wireless facilities application by the 
end of the time limit, the application should be deemed granted.
    Third, we should modernize our rules to exempt distributed antenna 
systems (DAS) from our environmental processing requirements, except 
for rules involving radiofrequency emissions. We can do this if a 
technology is ``deemed to have no significant effect on the quality of 
the human environment.'' Given their small size and appearance, I 
believe that DAS meet this standard. We should similarly update our 
historic preservation regulations, yet another regulatory layer, to 
facilitate deployment of DAS and small cells that add capacity to 
networks.
5. Media
    Turning to the media side of our agenda, the FCC should try to 
bring the congressionally mandated quadrennial review of our media 
ownership rules to a close by Memorial Day. In my view, we must update 
our regulations to reflect the changing nature of our Nation's media 
landscape while at the same time preserving the Commission's commitment 
to the core values of competition, diversity, and localism.
    We have not yet been able to reach consensus, but I hope that we 
will be able to find common ground and move forward together on a 
bipartisan basis. I have been trying to do my part to help make that 
happen. I understand that whatever reforms we end up implementing will 
not go as far as I might prefer. For example, I believe that the time 
has come to eliminate the newspaper-broadcast cross-ownership rule. In 
this day and age, if you want to operate a newspaper, we should be 
thanking you, not placing regulatory barriers in your path. But that 
having been said, Chairman Genachowski's proposals to eliminate the 
newspaper-radio and radio-television cross-ownership rules and to relax 
modestly the newspaper-television cross-ownership rule are steps in the 
right direction. He deserves credit for advancing these reforms, and I 
am prepared to support them.
    I have serious concerns, however, about proposals that are under 
discussion to make Joint Sales Agreements (JSAs) and/or Shared Services 
Agreements (SSAs) attributable under our local television ownership 
rule. As broadcasters' share of the advertising market has shrunk in 
the digital age, television stations must be able to enter into 
innovative arrangements in order to operate efficiently. JSAs and SSAs 
allow stations to save costs and to provide the services that we should 
want television broadcasters to offer.
    In my home state, for example, a JSA between two Wichita stations 
enabled the Entravision station, a Univision affiliate, to introduce 
the only Spanish-language local news in Kansas. Across the border in 
Joplin, Missouri, a JSA between Nexstar and Mission Broadcasting not 
only led to expanded news programming in that market but also nearly 
$3.5 million in capital investment. Some of that money was spent 
upgrading the stations' Doppler Radio system, which probably saved 
lives when a devastating tornado destroyed much of Joplin in 2011.
    For stations in smaller markets like Wichita and Joplin, the choice 
isn't between JSAs or having both television stations operate 
independent news departments. Rather, the real choice is between JSAs 
and having at most one television station continue to provide news 
programming while the other does not. If the FCC effectively prohibits 
these agreements, fewer stations in small-town America will offer news 
programming, and they will invest less in newsgathering. And the 
economics suggest that there likely will be fewer television stations, 
period.
    At the same time as we modernize our media ownership rules, we must 
take action to foster more minority ownership. To be sure, the U.S. 
Court of Appeals for the Third Circuit has instructed us to do so. But 
more importantly, it is the right thing to do. During my time in 
office, one message has come across loud and clear when it comes to 
minority ownership: The most significant barrier to expanding ownership 
diversity is a lack of access to capital.
    In order to help address this problem, I support a proposal 
advanced by the Coalition for Broadcast Investment (CBI) to end our 
current de facto ban on any foreign investment in U.S. broadcast 
holding companies that exceeds a 25 percent benchmark. Instead, we 
should evaluate proposals for foreign investment on a case-by-case 
basis. Our current policy addressing foreign investment in broadcast 
stations has been rendered obsolete by changes in the marketplace and 
the passage of time. Today, foreign companies can own a majority stake 
in cable operators, cable programmers, common carriers, Internet 
backbone providers, satellite video providers, newspapers, and other 
entities. Yet a foreign company cannot hold more than a twenty-five 
percent interest in a single AM radio station. This doesn't make any 
sense.
    If we relax restrictions on foreign investment, minority Americans 
will have more ways to raise capital and expand their participation in 
the broadcasting industry. That's why this idea is supported by a wide 
range of groups who care about diversity, including the Minority Media 
& Telecommunications Council, the League of United Latin American 
Citizens, the National Black Chamber of Commerce, and the United States 
Hispanic Chamber of Commerce. I applaud the Media Bureau for seeking 
comment on CBI's proposal last month and am hopeful that we will be 
able to move forward on it in the near future.
    Let me mention one last thing before I leave the media space. Last 
September, I proposed that the Commission launch an AM Radio 
Revitalization Initiative. In the ensuing months, I have been amazed 
and gratified by the outpouring of support I have received for this 
proposal from AM radio station operators from across the country. We at 
the Commission last comprehensively reviewed our AM rules over twenty 
years ago, and the band's challenges have multiplied since that time. 
While I understand that AM radio isn't the hippest matter on the 
Commission's agenda, I believe that AM stations provide an important 
service to the American people, and we should not let the AM band 
wither on the vine. Rather, we should take action soon.
6. Modernizing FCC Processes
    Before concluding, I would like to touch on a subject that affects 
all areas of the Commission's work: process reform. We at the FCC must 
strive to be as nimble as the industry that we oversee. All too often, 
proceedings at the Commission needlessly drag on for many years. For 
example, it shouldn't have taken the Commission nine years to respond 
to Martha Wright's petition seeking redress for the high long-distance 
rates she paid to speak with her then-incarcerated grandson. And it 
shouldn't have taken the Commission almost twelve years to issue an 
eleven-paragraph order responding to an application for review filed by 
a Georgia low-power television station (ironically, an order chastising 
a private party for missing a deadline).
    The good news is that we are making progress on this front. 
Commissioners are voting on items more quickly after they are placed on 
circulation. The time between the adoption and the release of items has 
decreased. And we have reduced the FCC's backlog. Chairman Genachowski 
and the rest of my colleagues deserve credit for these accomplishments. 
But we still have room for improvement.
    Since taking office, I have proposed a variety of reforms to 
improve the Commission's performance. We should streamline our internal 
processes where possible. For example, let's adopt a procedure akin to 
the U.S. Supreme Court's certiorari process for handling applications 
for review and let's speed up our processing of smaller transactions. 
We should also take statutory deadlines more seriously. It is 
unacceptable that we have only released the congressionally-mandated 
annual video competition report two of the last six years. When 
Congress tells us to do something, we need to get it done on time. We 
should establish more internal deadlines, such as a nine-month deadline 
for ruling on applications for review and petitions for reconsideration 
along with a six-month deadline for handling waiver requests. And when 
we adopt industry-wide rules, we should more frequently use sunset 
clauses that require us to eventually revisit the wisdom of (and, if 
necessary, revise or repeal) those rules.
    Beyond reforming our rules, we should become more accountable to 
the public and to Congress about how long it takes the Commission to do 
its work. One way to do this would be by creating an FCC Dashboard on 
our website that collects in one place key performance metrics. Let's 
keep track of how many petitions for reconsideration, applications for 
review, waiver requests, license renewal applications, and consumer 
complaints are pending at the Commission at any given time. And let's 
compare the current statistics in all these categories against those 
from a year ago, from five years ago, so everyone can see if we are 
headed in the right direction. If we make it easier for others to hold 
us accountable for our performance, I'm confident that we would act 
with more dispatch.
    My emphasis on acting promptly is not just about good government. 
It is also about the impact that the FCC's decisions (or lack thereof) 
have on our economy. As the pace of technological change accelerates, 
so too must the pace at the Commission. We can't let regulatory inertia 
frustrate technological progress or deter innovation.
                                *  *  *
    Congress has entrusted the Commission with important 
responsibilities, from managing spectrum to facilitating deployment of 
new infrastructure to overseeing the media marketplace. With a 
collaborative approach among FCC Commissioners and staff and 
consultation with Congress, I'm confident that the agency can discharge 
these responsibilities in a way that will serve well the public 
interest. Chairman Rockefeller, Ranking Member Thune, and Members of 
the Committee, thank you once again for holding this hearing and 
allowing me the opportunity to speak. I look forward to listening to 
your views, answering your questions, and continuing to work with you 
and your staff in the days ahead.

    The Chairman. Thank you very much.
    I will start the questioning. My first two questions, 
probably my only two questions this round, will be for all 
commissioners. And they are about the E-Rate.
    As I mentioned in my remarks, the E-Rate program has been 
tremendously successful. And I think we have to protect what we 
have, and I think we have to, understanding the digitalization 
of virtually everything--everything going wireless, everything 
going everything--we have to be prepared for the future.
    So my question to each of you--and if you would answer it 
individually, and hopefully with a ``yes'' or a ``no''--if a 
speech is necessary, a speech will be heard--would you commit 
to working with me to protect E-Rate's accomplishments as well 
as updating the program to meet the present and future needs of 
our schools and libraries?
    Mr. Genachowski. Yes, absolutely. I mentioned in my opening 
remarks, E-Rate has been an extraordinary success. There is a 
big opportunity and need around education technology, and I 
look forward to working with you and the Committee.
    The Chairman. Thank you, Mr. Chairman.
    Mr. McDowell?
    Mr. McDowell. Yes, but we must address contribution reform 
first.
    The Chairman. Contribution reform?
    Mr. McDowell. For universal service, generally speaking.
    The Chairman. OK.
    Mr. McDowell. How we raise the revenue.
    The Chairman. Commissioner Clyburn?
    Ms. Clyburn. Anchor institutions like schools and libraries 
are important to communities. E-Rate has been important to 
schools and libraries, hence important to all communities. So, 
yes.
    The Chairman. Thank you.
    Commissioner Rosenworcel?
    Ms. Rosenworcel. Yes. Absolutely.
    In my time at the Commission, I have been visiting 
superintendents in places as far-flung as Kotzebue, Alaska, and 
also Miami, Florida--places that you really can't get much more 
different on on this earth. What is neat is that, together, 
they consistently believe in the power of E-Rate to bring 
digital learning to schools. And I think it is important that 
we update it now for this new century.
    The Chairman. Thank you, Commissioner.
    Commissioner Pai?
    Mr. Pai. Yes, Mr. Chairman.
    One of the things I have been struck by is the power of a 
broadband connection in a school beyond the educational 
context. For example, when I visited Kansas City recently, I 
visited with a school nurse who, by a video connection to the 
University of Kansas Medical Center, was able to develop an on-
the-spot recommendation for a health-care plan for a child who 
was feeling ill, which obviated the need for a parent to take 
time off from work and travel to this school, which enabled the 
child to get much quicker medical attention.
    And I think we would do well to consider some of the other 
benefits beyond mere learning that the E-Rate program, through 
broadband connections in schools, can provide.
    The Chairman. Thank you all.
    My second question, again for all commissioners, hopefully 
``yes'' or ``no'': When Congress authorized voluntary incentive 
auctions earlier this year, we made a point of providing 
funding for FirstNet. As Congress has always done, we deferred 
the intricacies of action--and how happy the Commissioner is--
to the expert agency, which is the FCC.
    Now, getting these auctions right and making them simple 
enough to encourage sufficient broadcaster participation will 
be incredibly complex, burdensome. Consistent with the law, the 
FCC is free to make the policy and technical decisions it finds 
are in the public interest. But I hope it cannot lose sight of 
the broader national purpose of funding FirstNet. As I said 
before, the success of these auctions will be judged by their 
ultimate ability to provide sufficient revenue to fund 
FirstNet, which is, as yet, pretty much unknown to the public, 
but to those of us who know it, it is a blockbuster.
    So, question number one: Do you understand the need for the 
incentive auction rules to provide sufficient funding for 
FirstNet?
    Mr. Genachowski. Yes. Very important.
    The Chairman. Thank you, sir.
    Mr. McDowell. Yes. I want to make sure we don't undermine 
that goal.
    The Chairman. OK.
    Ms. Clyburn. Yes. And I believe a market-based engagement 
will give us the maximum opportunity to achieve that goal.
    Ms. Rosenworcel. Yes, absolutely.
    Mr. Pai. Yes.
    The Chairman. Thank you.
    Do you agree that acting expeditiously to commence these 
auctions and avoiding unnecessary delay is important?
    Mr. Genachowski. Yes.
    Mr. McDowell. Yes.
    Ms. Clyburn. Yes.
    Ms. Rosenworcel. Yes.
    Mr. Pai. Yes.
    The Chairman. You see, it is wonderful being Chairman.
    [Laughter.]
    The Chairman. And my next question is for Chairman 
Genachowski, and it is about violence, which you can't do 
anything about. But my time has run out. So the estimable 
Senator from South Dakota--tall, handsome, pre-Presidential--
Senator Thune.
    [Laughter.]
    Senator Thune. Let's move on.
    [Laughter.]
    Senator Thune. Mr. Chairman, the incentive auction is 
really important. As I mentioned in my opening statement, we 
need to figure out how to free up more spectrum to meet the 
demand that is out there.
    Mr. Chairman, you are closely associated with the incentive 
auction part of the TV spectrum, particularly, since it was 
first proposed in the National Broadband Plan. In your prepared 
statement, you said the agency plans to run the auction next 
year. But your term ends this summer.
    What steps are you taking today to ensure the incentive 
auction will be a success and will occur in a timely fashion 
irrespective of who might be leading the Commission next year?
    Mr. Genachowski. Well, as you mentioned--and thank you for 
mentioning it--this is something, the incentive auction idea is 
part of a larger strategy to free up spectrum that we have been 
working on for 4 years at the Commission.
    The truth can be told, we started working on implementing 
the law before it was passed. And we were able to move quickly 
with a comprehensive proposal in September. We have also put 
out for comment the software that we would use in the repacking 
piece. I think comments came in today.
    So the Commission is on track to move forward with this 
auction and other steps to free up spectrum for our mobile 
economy.
    Senator Thune. Let me ask this of any other commissioners. 
Are you all optimistic that the Commission will be holding 
these auctions next year?
    Mr. McDowell?
    Mr. McDowell. I have lived through the AWS-1 auction and 
the 700 megahertz auction, and these things can take longer 
than planned. There are a variety of unforeseen variables that 
can pop up. For instance, with the 700 megahertz auction, 
actually the potential bidders came to us and asked us for a 
while to hold off.
    This auction, without any hyperbole, by far is the most 
complicated spectrum auction in world history. So while I have 
always been a proponent of shot clocks at the FCC, just like in 
basketball, I think it is important to work hard toward a goal, 
but let us not be surprised if there is something unforeseen 
that arises.
    Senator Thune. And would anybody else like to comment on 
that? And then I would also ask this question, and that would 
be: What is the key challenge that you see in meeting that 
timeline?
    The rest of you can comment about whether or not you think 
next year is a possibility or if that is overly optimistic. But 
the second question would be, what is the key obstacle or the 
key challenge?
    Ms. Clyburn. Senator, it is a very aggressive, ambitious 
timeline that I feel confident that we will meet. We have a 
designated, dedicated team to that end. We have an incredibly 
open process. You have a LEARN--we call it LEARN--dynamic where 
broadcasters can continually get updated and ask questions.
    The open engagement and the desire to achieve this market-
based dynamic is so strong that I feel confident that we will 
get there. Of course, there could be unforeseen circumstances, 
but all of the momentum and all of the incentives are in place 
to achieve that 2014 goal.
    Ms. Rosenworcel. Yes. I agree with Commissioner McDowell, 
these are the most complex spectrum auctions that the world has 
ever seen. But we have a terrific team in place, ready to go.
    And, furthermore, I think it is important for the agency to 
set deadlines, both for its incentive auctions and its 
traditional commercial auctions. I think deadlines focus the 
mind. They make clear to stakeholders how they should organize 
their activities. And I think they encourage the formation of 
capital, which is important in this case for funding FirstNet.
    Mr. Pai. Senator, I agree with my colleague. And I think 
that, although it is more important to get it right than to get 
it done right now, nonetheless I believe, as I said when we 
kicked off the implementation process last September 28, that 
it is important for us to set a deadline. I don't think the 
uncertainty hanging over the broadcast or the wireless industry 
serves either of those industries or the American consumers 
very well.
    In terms of your second question, the biggest challenge, I 
think there are a number of them, from international 
coordination to the details the panel is hearing. But the 
biggest one, to me, is ensuring that the Commission structures 
the auction in such a way that both the participants in the 
forward and the reverse auction have an incentive to come to 
the table.
    The auction is going to be a failure if we don't persuade 
broadcasters that the rules are simple and compelling enough 
for them to participate. The auction will be a failure if we 
artificially restrict who can participate in the bidding on the 
incentive auction spectrum.
    So if we at the FCC keep our focus on what the Chairman 
said in his opening statement--maximizing the resources for 
FirstNet and making sure that this auction is a success in 
terms of participation--we will be on the right track, and 
hopefully we will be on the right track next year.
    Senator Thune. Mr. Chairman, I have another question, but 
we have a lot of people here today, so I will yield the floor 
back to you and allow some others to ask questions.
    The Chairman. Thank you, sir.
    Senator Ayotte?

                STATEMENT OF HON. KELLY AYOTTE, 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Ayotte. Thank you, Mr. Chairman.
    I want to thank everyone for being here today. I appreciate 
the work done by the Commission.
    Chairman Genachowski, I wanted to follow up on the 
conversation that you and I had in my office not too long ago 
about spectrum. We have already heard about the value of 
spectrum and how important it is to our economy and our 
communications network. But the Pentagon holds certain 
spectrum. You and I talked at length about that in my office. I 
wanted to follow up.
    Where do you see us in terms of the Commission's 
discussions with the Pentagon as to how we might commercialize 
some of that Federal spectrum in an appropriate way that still 
protects our national security but also allows us to use that 
spectrum in an appropriate way?
    I serve on the Armed Services Committee, so this would be 
sort of where the two committees intersect.
    Mr. Genachowski. So there are two tracks to freeing up more 
government spectrum for commercial use. As I think we talked 
about, the government has about 60 percent of the most 
desirable spectrum. And even though military needs in the U.S. 
are going up, that is more than is necessary, and a lot of it 
is inefficiently allocated. So wherever we can clear and 
reallocate government spectrum and make it available for 
commercial, we should.
    We should also move forward on a second track, which is 
identifying opportunities for more sharing of government 
spectrum with commercial. There is government spectrum, for 
example, that is only used in certain parts of the country at 
certain times. That can be made available more widely.
    This is good for everyone because there is a growing gap 
between military communications equipment and commercial--
growing gap as measured by price and functionality. And more 
government-commercial/military-commercial spectrum sharing can 
help close that gap by bringing more commercial know-how into 
the military's processes.
    And my discussions with senior military officials on that 
are promising, I would say, and I think we are seeing the 
military lean more into it. But it is something that I would 
look forward to working with you and the Committee on.
    Senator Ayotte. And do you think it is possible--I would 
open it up for not only your comments but anyone on the 
Commission--for us to free up some of the spectrum that is 
currently allocated to the Pentagon in a way that would be 
actually be cost beneficial to our government?
    Mr. Genachowski. Yes. And, in general, that is how it has 
been done. There are rules on the book that require the 
measurement of the costs of moving and making sure that it, on 
a cost-benefit analysis, survives. Spectrum is so valuable on 
the commercial markets now--even unlicensed spectrum has 
tremendous value in terms of job creation and business 
creation--that this is a net win for the country.
    Senator Ayotte. We are talking about the spectrum that the 
government has, but we have to move beyond that to meet our 
capacity. So I wanted to get your thoughts on how do we then 
open up the spectrum pipeline--let's assume we can work through 
the issues--to more efficiently use the government spectrum.
    Mr. McDowell. Well, first of all, back to your previous 
question, which is, it is absolutely true that the Federal 
Government occupies the vast majority of the most valuable 
spectrum. And simply spectrum-sharing is not going to meet our 
nation's needs. We need to have maybe work between Congress and 
the Executive Branch on forming a way to provide incentives for 
the Executive Branch users of spectrum to yield it, to 
surrender it, for auctions for exclusive-use licenses. That is 
where there is the most value proposition. And right now it is 
an opaque process which doesn't really work.
    But in the meantime I think what you really need is a full 
audit of all Federal spectrum that is as transparent as 
possible, given all the classified uses of some spectrum. But 
have that audit so we know what we are talking about, and then 
determine from there. Because right now the process is far too 
opaque.
    Senator Ayotte. Does anyone else have anything they want to 
offer on that?
    Ms. Clyburn. In our traditional means of delivering 
spectrum to market, auctions, our AWS auctions and the like--
all of those things, retooling and reconfiguring and 
recalibrating our rules to ensure that that gets to market. It 
is an all-of-the-above, as the Chairman likes to say, approach, 
all-hands-on approach.
    And I think you would be proud of the FCC because we are 
doing that and talking about that and facilitating that through 
our rules and regulations.
    Senator Ayotte. Thank you.
    I wanted to follow up, Commissioner McDowell, about what 
you talked about with respect to what happened in Dubai. What 
more can Congress do to stop this infringement on the Internet?
    Mr. McDowell. I think it would be very helpful--first of 
all, as I met--I know that the Chairman was there, too, and 
members of your staffs were there as well--it came up very 
frequently that the bipartisan, unanimous resolutions--thank 
you, Senator Rubio--that were passed last year were really 
heard quite clearly. I think amplifying even further, perhaps 
making those resolutions the law of the land, could be very, 
very helpful.
    But we also need to act very quickly. We also have a power 
vacuum a bit at the State Department. We have had Ambassador 
Phil Rivera retire, his legendary deputy Dick Beard retire. And 
I know those positions will be filled soon, but they can't be 
filled soon enough. The groundwork for the 2014 basically 
constitutional convention of the ITU really starts now. And 
there is a big meeting in Geneva in May that will start setting 
the tone for that.
    So there is a lot that Congress could do.
    Senator Ayotte. Thank you very much, all of you. I 
appreciate what you do.
    The Chairman. Thank you, Senator Ayotte.
    Senator Blunt?

                 STATEMENT OF HON. ROY BLUNT, 
                   U.S. SENATOR FROM MISSOURI

    Senator Blunt. Thank you, Chairman.
    Chairman Genachowski, on the Universal Service Fund, I 
think 2011 you all initiated a rulemaking process so that that 
could also be applied and--maybe be applied and/or transitioned 
to broadband. Now, one of my concerns about this, I think you 
will recall, has always been the failure to define 
appropriately ``underserved'' as opposed to ``unserved.''
    My belief is now that you decided in that rule that 
``underserved'' was a current carrier that needed to upgrade, 
as opposed to bringing another person in to become a 
competitor? Am I right in that?
    Mr. Genachowski. Two points. I am not sure. One, we did 
adopt the comprehensive reform last year, and part of the 
design principle was that the funding would go to unserved 
areas and not to fund competitors.
    Senator Blunt. Right. And then in--how do you allocate the 
underserved money? Or do you allocate that money?
    Mr. Genachowski. A core design principle of our reforms is 
that the money should go to unserved areas and help get 
broadband built out where it doesn't exist, and not fund over-
builders or----
    Senator Blunt. Good, good. Well, my concern all the time 
has been that.
    Now, how are we doing on getting that money out? Is there 
anything you can--are you in the process of further 
implementing that rule or updating the amounts or what it takes 
to get money out there?
    Mr. Genachowski. Yes. We got a first tranche out very 
quickly. It was about $140 million. And that is being used now 
to build out broadband to about 400,000 unserved Americans.
    We are looking now at the next step. We want to balance 
moving quickly to support broadband to unserved homes and 
making sure we do it in an efficient, fiscally responsible way.
    Senator Blunt. And do you have a cap on the amount of money 
to unserved homes?
    Mr. Genachowski. Overall, we have the program now on a 
budget, and so we are operating within that budget.
    Senator Blunt. Now, somebody told me that there was a cap 
of around $750 or $775?
    Mr. Genachowski. So that is--in order to determine how much 
funding goes to a particular home, we need to come up with a 
number. And there was a lot of debate over that number. And in 
the first tranche of funding, it was based on a $775-per-home 
figure.
    Some companies want more. If we spend too much, we are 
wasting money. If we make it too low, then we are not reaching 
everyone. And so we are now looking, having gotten that 775 
money out in the first tranche, how should we handle subsequent 
funding under the program.
    Senator Blunt. And how do you think you should do that?
    Mr. Genachowski. Well, we have a record that is open on 
that. And, you know, our goal is to maximize the bang for the 
buck for the program. It is on a budget. We can only spend the 
money in a limited way. And we want to maximize the number of 
unserved Americans who get broadband as a result of the 
program.
    Senator Blunt. And so you are evaluating how many homes you 
get to at this level and how many you might add at some higher 
level, and, at some point, whether there is a cost-benefit 
analysis there?
    Mr. Genachowski. That is exactly right. That is exactly 
right.
    Senator Blunt. On media ownership, another topic I wanted 
to ask you about, I have on my tablet that is here with me, I 
have three Missouri newspapers, a couple of national 
newspapers, three or four other news--I suspect I have a dozen 
different ways to get news right here with me.
    The media ownership requirements are long before any sort 
of proliferation of media like this. Where are we on updating 
those requirements?
    Mr. Genachowski. Well, we are in the middle of an open 
proceeding. And, on one hand, as you say, the world has 
changed. Newspapers certainly have come under real pressure. On 
the other hand, the new news and information that you see still 
isn't received by about 30 percent of Americans.
    And so we are in, I think, an interim period where the 
concerns about media consolidation remain important, as does 
the desire to make sure that Americans, wherever they live, can 
get local news and information and we continue to have vibrant 
local news-gathering in the U.S.
    Senator Blunt. Any additional views from anybody else on 
media ownership?
    Mr. McDowell?
    Mr. McDowell. Senator, I think we are long overdue for 
modernization of our media ownership rules. The last time the 
Commission voted on an order on this was December 2007. I 
thought at the time those were mild and meek.
    I think the marketplace has moved past the Commission. The 
investment and the eyeballs and the ad dollars are all flowing 
to new media. And I think there are a lot of millstones on the 
chest of traditional media as they face this competition. 
Congress mandated in the 1996 act, under Section 202(h), that 
we modernize these rules in the face of new competition, and it 
is high time that we do that.
    Senator Blunt. Mr. Pai?
    Mr. Pai. Senator Blunt, if I could just add very quickly, I 
associate myself with Commissioner McDowell's comments.
    And I would add, as well, that one of the proposals that is 
on the table, which I think properly, you know, should be off 
the table, it involves the effective prohibition on joint sales 
agreements and shared service agreements. Especially in smaller 
markets like Joplin or Springfield, that might be the 
difference between a broadcaster staying in the business and 
providing local news or exiting the business.
    So, for example, in your southwest corner of the state, a 
joint sales agreement between Nexstar and Mission Broadcasting 
allowed the broadcast station to save $3.5 million, which they 
then poured in to upgrading their Doppler radar system, which 
proved to be very useful in 2011 when the tornado hit.
    So I think we should be very careful about the effect of 
our media ownership rules, especially in smaller markets like 
that.
    Senator Blunt. Ms. Clyburn, Ms. Rosenworcel, either one----
    Ms. Clyburn. And I agree, we should be very careful, 
looking at the current markets, looking at the critical 
information needs of all communities. And so when we move 
toward this path--and we rightfully should every 4 years 
review--if not, you know, every 4 years mandated--review our 
current framework. But we need to be careful that every citizen 
has a pathway to engagement--political engagement, public 
safety engagement, and alike.
    Ms. Rosenworcel. I think we are grappling with a lot of 
different trends here. On the one hand, just as you said at the 
outset, the ways that we create, distribute, and consume 
content are very different than they were just a few years ago. 
On the other hand, when you look at how consumers get news and 
information, it is not all that different than it used to be.
    The Pew Research Center has done some studies, and they 
found that 74 percent of consumers still get their news from 
local broadcast television stations, and the rest of them get 
their news, typically, from radio stations and newspapers. In a 
study they did up in Baltimore, they found that 95 percent of 
originating news came from traditional news media--newspapers, 
television, and radio.
    So we are dealing with new and novel ways to get 
information, but sometimes those who are creating the 
information are the same as they used to be.
    On top of that, we have a duty to respond to the Third 
Circuit Court of Appeals, which criticized the FCC last time it 
tried to relax these rules for not taking into consideration 
the diversity of media ownership in this country.
    So we are going to have to deal with all of these trends--
how everything is changing, how sometimes the origination of 
news still lies with traditional medium, and how the diversity 
of ownership affects the news that we get. I think we have 
before us a whole bunch of issues on that, and I think every 
single one of us at this table is grappling with the way 
forward.
    Senator Blunt. Thank you, Mr. Chairman.
    The Chairman. That is it? OK.
    Senator Coats, I want to apologize. I----
    Senator Coats. Oh, I was just all teed up and ready to go.
    The Chairman.--fingered you, and then I was handed a new 
piece of paper with instructions. So I am going to call on you 
shortly, but first you have to listen to Senator Pryor.
    Senator Coats. I am always happy to defer to Senator Pryor.
    Senator Pryor. Thank you, Mr. Chairman.
    And thank you, Senator Coats.
    Chairman Genachowski, let me start with a question to you 
about the Connect America Fund. Certainly, you guys are working 
very hard to do, I guess, a final design on the long-term 
Connect America Fund. But I know that you also could, with your 
discretion, do some incremental funding now.
    I think we have about 400,000 Arkansans who do not have 
access to rural broadband. And, yes, they say time is money, 
but also time is lost opportunity.
    And I am just wondering if you all are considering doing 
some incremental funding now as you put the longer-term Connect 
America Fund in place.
    Mr. Genachowski. Senator Pryor, I want to thank you, other 
members of this committee, and my colleagues for all working 
together to be in a position where we can now be talking about 
implementation of a Connect America Fund focused on broadband. 
Four years ago, people would have said, This is impossible.
    The implementation issues are challenging. This is a 
similar issue to the one that Senator Blunt and I just had an 
exchange on. We want to get broadband out to unserved rural 
Americans as quickly as possible and do it in a way where we 
are not overspending. Because if we overspend, we are taking 
money away from some other rural American who would get it.
    And we have been working together as a group, with an 
excellent staff, on this. And we are diligently working to get 
this implemented quickly and consistent with our principles.
    Senator Pryor. Thank you.
    Commissioner Clyburn, let me ask you about the 21st Century 
Video Accessibility Act. It appears that the FCC, the device 
industry, and the disability community are all working closely 
to try to come out with the right set of smart rules. Do you 
know the timeline, when those rules might be completed?
    Ms. Clyburn. There are a number of things--there is a good 
story to tell with that legislation, which is the most 
significant piece of legislation for those people with 
disabilities since the act in the 1970s.
    So what is happening is this incredible desire to connect 
all communities, this incredible desire to ensure that 
programming is accessible to all. So we have a lot of things 
that are going on, particularly as it relates to emergency 
services, next-generation 911. All of these things are on the 
table and are being discussed.
    The text-to-911 is important. You know, how do those with 
disabilities, you know, how do they find out what is going on 
around them? So we have a series of timelines that you will 
hear about during the course of the year that will bridge those 
gaps, in terms of crawls, television programming, ensuring that 
you have an audible means of knowing, if you are sight-
impaired.
    All of those things are going into place; some significant 
deadlines that are being met this year. This is a great year 
for this act, and it is going to bridge some incredible gaps 
with those with sight and hearing disabilities. And you should 
be proud. With IP captioning coming up--it is just the sky is 
the limit. It is just wonderful.
    And in terms of implementation of CVAA, we have not missed 
one deadline. There has been a cooperative relationship. There 
has been--equipment manufacturers and the like. We are bridging 
incredible divides, and the communities are really--they are 
elated over what we have done.
    Senator Pryor. Great.
    Commissioner Rosenworcel, you notice I didn't ask you about 
that because you know more about it than I do, and I thought 
you might embarrass me with your answer.
    [Laughter.]
    Senator Pryor. But let me really change gears because I 
know that you really basically helped write that legislation, 
and we appreciate it. It has been a good success story. But let 
me change gears on you, if I can, and ask you about public 
safety in wireless and IP-based networks.
    I know that if we look at Superstorm Sandy, I hear that 
right after the storm about one in four cell towers were out of 
commission. And, you know, that is complicated because a lot of 
these are independently powered.
    But my question for you is, what can Congress do, what can 
the Commission do to make sure that we address these problems 
as we go forward?
    Ms. Rosenworcel. Well, as you suggest, Superstorm Sandy 
wreaked havoc on our communications systems. And it is hard to 
forget the images that we all saw--the floods, the fires at the 
shore, and some of the impossibly large snowdrifts out west.
    I think that it demonstrated a few things to us. First, as 
the Nation transitions to IP and wireless networks, we need to 
have a conversation about commercial power. Our old copper 
plant in this country had an independent electrical source, so 
when unthinkable weather occurred, you could pick up the phone 
and call for help. But now our wireless and IP networks are 
dependent on commercial power, and when commercial power goes 
out, they don't work. A lot of people realized that in 
Superstorm Sandy. And, as you said, one in four of our wireless 
towers in the affected region was out during the storm.
    So I think now, as we make this transition to new wireless 
and IP networks, this is the right time to have a national 
conversation about what it means when all of our communications 
relies on commercial power. We have to identify how providers 
get access to fuel, how they have generators, how they have 
backup power. And we also have to talk to consumers about this 
so that they have solar chargers and backup power for their own 
handheld devices, as well.
    Senator Pryor. Mr. Chairman, thank you. That is all I have.
    I am going to ask Chairman Genachowski for the record about 
cybersecurity and the things that they have done at FCC and 
what recommendations they may have to Congress on what we 
should be doing on cybersecurity. But I will submit that for 
the record.
    Thank you.
    The Chairman. Thank you, Senator Pryor.
    And, Senator--no, Dan. I want to do it, but I can't.
    Senator Wicker, subcommittee ranking?
    Senator Coats. All right. I apologize. I do have something 
I just have to go to. But I will be glad to pick it up at 
another time. And I understand. No, I----
    The Chairman. Wait, wait, wait.
    Senator Wicker. Please go ahead.
    The Chairman. See, he is yielding.
    Senator Coats. No, I----
    The Chairman. Dan, charge.

                 STATEMENT OF HON. DAN COATS, 
                   U.S. SENATOR FROM INDIANA

    Senator Coats. Roger, I will tell you what. I will be very 
brief, and then I will yield you the balance of my time, and 
you can do 7\1/2\ minutes. I appreciate that. I have a----
    Senator Wicker. The clock is ticking.
    [Laughter.]
    Senator Coats. Mr. Chairman, thank you. It is good to be on 
your committee and to serve with you and Senator Thune.
    And in another life, I served on the Energy and Commerce 
Committee in the House of Representatives, a long time ago, 
under John Dingell. And while I guess, as a Republican, I would 
prefer to be serving under Chairman Thune, I had a good 
experience with Congressman Dingell, and I know I will have a 
good experience with you----
    The Chairman. Thank you.
    Senator Coats--in your last 2 years here. And it is a 
privilege to serve with you.
    Back then--this was in the 1980s, my 8 years on Energy and 
Commerce--the competition and innovation was occurring so 
fast--at least I thought it was fast--that we had a tough--the 
process of legislating and regulating could hardly keep up with 
the change. We are light years ahead of where that was 30 years 
ago. And today it is mind-boggling how quickly it changes.
    And so I guess my question is, how do we begin to, through 
the legislative process and regulatory process, keep up with 
this innovation? I mean, we are passing laws and regulations 
that are out of date before they even get enacted.
    And my question is this: Looking back over your tenure and 
reflecting on it, do you have any suggestions or things you 
want to leave with us relative to, Boy, if we had known that or 
could have done that faster, this would have kept us up to 
speed? Is there any advice relative to barriers to regulation 
or the process in which it was played out that you would, upon 
reflection, want to change?
    Mr. Genachowski. It is a great question. And, you know, one 
of the things that I think, working together, we have gotten 
right is that we focused on some of the enduring principles in 
this space that remain consistent even as technology changes. 
You know, one is: Make sure that we have infrastructure to 
support the new economy. The second is principles like 
universal service and competition and public safety.
    And I think that keeping ourselves focused on that, that 
has led us to ideas like we have to free up spectrum in 
creative ways, and it led this committee to pushing through 
incentive auction legislation on a bipartisan basis. It led to 
reform of the Universal Service Fund.
    And so I think working together on those issues--they were 
largely bipartisan when you were in the House; they should 
remain so--is a strategy that has worked and I think can 
continue to work.
    Senator Coats. Thank you.
    Mr. Chairman, I yield the balance of my time, if it sits 
with the chair, to my colleague from----
    The Chairman. He gets the balance of your time and all his 
time.
    Senator Coats. No, no. It is the other way around.
    [Laughter.]
    Senator Coats. I made him a deal, and I want to stick with 
it.
    The Chairman. All right.
    Senator Coats. Thank you.
    Senator Wicker. The ways of the Committee are complex, but 
I am glad to be talking.
    Mr. Pai, it is generally acknowledged that modernization of 
the 21-year-old 1992 Cable Act is a major undertaking that will 
take some time and take some doing. You made a speech the other 
day saying that there are some things the Commission can do to 
provide relief in the interim for folks like cable services and 
multichannel video programming distributors through the use of 
expanding and extending the FCC's forbearance authority.
    Are you making any progress with the other four members on 
this? And do you think it also makes sense to expand the 
biennial review in the same vein?
    Mr. Pai. Well, Senator, thank you for the question. I 
certainly would welcome the support of my colleagues. It is a 
very recent proposal, though, so I haven't had a chance to 
pitch it to them. But I will put the hard sell on as soon as I 
can.
    Senator Wicker. Surely they read your speech, though.
    Mr. Pai. I apologize to them in advance if they did, if 
they had to slog through that speech.
    But I think one of the fundamental changes that we have 
seen in the communications landscape involves the video 
marketplace. It has changed so much from when I was a kid and 
we had three channels and my dad would direct me to, you know, 
put the rabbit ears just so so we could get reception. Now we 
can receive on any number of devices high-definition 
programming when we want it. And so I think one of the central 
problems that we confront as regulators is that our rules 
simply haven't kept up the pace with the changes in the video 
marketplace.
    And I think of the telecom sector as providing a useful 
example of how we could operate in the video context. Section 
10 of the Communications Act, as you know, allows the FCC to 
forbear from the enforcement of a statute or regulation if it 
determines that such enforcement is no longer necessary to 
protect competition or to promote the public interest.
    It seems to me that it would be valuable for the FCC to 
have similar authority with respect to Title VI, the video 
context. That would allow us to do what we have done on the 
telecom side, to relieve wireline providers who are trying to 
reach underserved, unserved, and in some cases even served 
Americans with better, faster, and cheaper telecom services.
    And I think if we did have that forbearance authority, it 
would allow the Commission to be a little more flexible in 
terms of its application of the statute, because right now we 
don't have that flexibility.
    And the 1992 Cable Act, as you pointed out, captured a 
snapshot of the market at a moment in time that no longer 
really applies. Your cable operators, for example, had a 95 
percent market share 21 years ago. That has gone below 60 
percent now. Over-the-top distribution was unheard of even, you 
know, 10 to 15 years ago, and now you have people who are 
running Internet-only channels, reaching millions and millions 
of people.
    So if the Congress saw fit to give us forbearance 
authority, I think it would be very valuable and would allow us 
to really update our regulation.
    Senator Wicker. But we would have to give you that 
authority?
    Mr. Pai. That is correct, yes.
    Senator Wicker. And what about this biennial review 
question?
    Mr. Pai. So I have been promoting a more robust vision of 
what biennial review could be, and that is the full commission 
voted, which we would comprehensively review all of our 
regulations and, especially in the video context, determine 
whether any of them needed to be repealed or revised to meet 
the needs of the modern marketplace.
    And that is something that we could do--we are mandated to 
do it regularly by Congress. And I think if we spent more time 
as a commission really doing that, I think we could update our 
rules appropriately.
    Senator Wicker. Commissioner Rosenworcel, that sounds like 
a really good idea, don't you think?
    Ms. Rosenworcel. Well, let me start by saying, 1992 was a 
long time ago. I had a dot matrix printer, I certainly didn't 
have a cell phone, and I never would have imagined that I could 
watch video on a tablet in my lap. So I will agree with you 
that the law is old.
    At the same time, I think there are some virtues in that 
law that still are important to us. I think the law speaks to 
competition. I think it speaks to making sure everyone can have 
local content, including local news. And I think it speaks to 
the diversity of ownership and programming as being an 
important issue.
    So I think there are still some enduring values in the law 
that matter to us and we can still apply. But I would agree 
with my colleague, Commissioner Pai, that we can regularly 
scour our rules and try to identify those that have outlived 
their usefulness. And while we may not agree on every single 
rule we should get rid of, I think the process and doing that 
regularly is a good exercise and something that the Commission 
should do.
    Senator Wicker. Did you read Commissioner Pai's speech?
    [Laughter.]
    Ms. Rosenworcel. I slogged through all nine pages of it.
    [Laughter.]
    Senator Wicker. So what about, then, specifically----
    Mr. Pai. Tough crowd.
    Senator Wicker.--working with us on a simpler solution, 
putting off cable reauthorization until another Congress, but 
helping cable services and MVPDs presently?
    Ms. Rosenworcel. Well, the thing that I know about cable 
and satellite services now is that their rates go up year-in 
and year-out. And both as a consumer and as someone who sits in 
a regulatory position, I think that is a problem, and I think 
it is something that merits a fresh look.
    Senator Wicker. Well, if I had time, I would ask the chair 
what he thinks of that.
    Mr. Genachowski. I think that continuing to look at our 
rules, working with the Committee on the best processes to do 
that, remains vital.
    Over the last few years, we have not only done reviews, but 
we have done major actions to remove barriers. The elimination 
of intercarrier compensation could be the single largest 
elimination of a set of rules that the FCC has done in a very, 
very long time--removing barriers to broadband build-out, 
things like tower siting, shot clocks.
    So I agree with Commissioner Pai that we should think about 
how to continue to do this, and I agree with Commissioner 
Rosenworcel that there are enduring values in the 
Communications Act and issues that we need to continue to focus 
on.
    The nature of the sector now--and we heard it in the 
opening statements from both Ranking Member Thune and from 
Senator Pryor and from Chairman Rockefeller--this is a sector 
that is thriving, that is growing, where the opportunities are 
getting larger, as are the challenges. And so staying current 
with the obstacles and barriers to ongoing private investment 
in innovation is absolutely essential, and we still have a lot 
of work to do.
    Senator Wicker. Thank you very much.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    And now, Senator Fischer.

                STATEMENT OF HON. DEB FISCHER, 
                   U.S. SENATOR FROM NEBRASKA

    Senator Fischer. Thank you, Chairman Rockefeller and 
Ranking Member Thune.
    And thank you to all the Commissioners for being here 
today.
    If I could follow up, please, Commissioner Rosenworcel, you 
spoke about the Communications Act, and I believe you said 
that, in that, it guarantees local contact and local news. Is 
that part of that?
    Ms. Rosenworcel. Well, I think that is an important element 
of authorizing and creating local broadcast channels so that 
they have a duty under the law to serve their community of 
license, and that duty includes things like providing local 
news and local content.
    Senator Fischer. And how are those licenses decided upon?
    I live in Nebraska, and I am sure you have heard from some 
of my constituents in the Sandhills of Nebraska because we are 
unable to get what we consider local news, which would be 
Nebraska news. We receive South Dakota news, and we do love 
South Dakota, Senator Thune, but----
    [Laughter.]
    Senator Fischer. And also in the western part of the 
state--so we keep up with you, by the way.
    But in the western part of the state, my constituents there 
receive Colorado news if they go off the satellite. How do we 
change that so that we can change those licenses in order to 
truly receive local news and local content? We can't even get 
local weather, which I believe is a right that communities 
should have.
    Ms. Rosenworcel. I am sympathetic to the situation you just 
described. At the outset, most of that is a function of Nielsen 
markets. We have 210 of them in this country, and they chop up 
and divide the country into different television and media 
markets in ways that are often rational but not always. We have 
orphan counties like the ones you are describing that might get 
their news from another location.
    I would point out to you that in the upcoming renewal of 
the Satellite Television Extension and Localism Act, as a 
Senator you have an opportunity to speak to this issue. And I 
would certainly encourage you to do that. I think it is a piece 
of legislation that gives you an opportunity to talk about this 
in more detail. And I think you will find that some of your 
colleagues also have the same situation, where they have orphan 
counties and they can't get news from their local statehouse or 
their local weather.
    Senator Fischer. Correct. Thank you. Thank you for you that 
information.
    Commissioner Pai, as you know, rural broadband deployment 
is one of the engines for economic development in many states, 
and especially in a state like Nebraska. And I have heard 
varying reports about the impact of the 2011 transformation 
order and what that impact is on my rural communities.
    You recently stated--maybe this was in another presentation 
you gave; I didn't read the whole thing, though. But you 
recently stated that ``the changes in the Federal universal 
service programs have caused unpredictability in funding, and 
it appears the investment environment has cooled as a result, 
impeding the deployment of next-generation technologies and 
broadband services to rural Americans.''
    I share those concerns. What actions do you recommend that 
the FCC could take to ensure that these areas are going to be 
served in a predictable and a stable manner?
    Mr. Pai. Well, first, I want to commend my more senior 
colleagues for the effort they put forth in adopting these 
reforms in 2011. I think as the chairman said, it was not an 
easy task to reform the rules, which were in need of reform. 
But I applaud them for having the political will to do it.
    With respect to some of the reforms on the high-cost 
program that you mentioned, I have expressed a number of 
concerns about the effect of the unpredictability of the 
rules--so, for example, the quantile regression analysis the 
Commission has adopted. I have supported some of the more 
recent reforms that the Commission has adopted to, for example, 
combine capital expenditures and operating expenditures to make 
it more understandable for rural carriers where the threshold 
for a cutoff will be.
    But I think there are other ways the Commission could live 
up to the statutory command of predictability. I have outlined 
a number of them in the comments that you noted.
    But I think, by and large, what we have to do is really 
listen to the concerns of rural carriers about what their 
planning process is, because a lot of their investments are not 
made every 6 months or 1 year or 2 years. These are long-term 
investments in broadband in rural communities. And so if the 
Commission is effectively applying the QRA, or benchmarks, 
every single year, more frequently than these carriers were 
planning, then it is going to be virtually impossible for them 
to make informed decisions without getting penalized for it.
    Senator Fischer. Thank you.
    Did anyone wish to add to that?
    Mr. McDowell. I think it is important to note that this was 
the first Federal entitlement reform enacted in a generation; 
that the rate of return--carriers before the reform were 
receiving $2 billion a year. After the reform, they are 
receiving $2 billion a year. Not each carrier is receiving the 
same amount; some are receiving less, some are receiving more.
    But this was a bipartisan, unanimous vote along a three-to-
one party divide. And I think it is notable that we have said 
all along that it is an iterative process, and, as compelling 
facts come our way, we can make midcourse corrections. But I 
think it is important to adhere to the strict budget that we 
put in place. And I think that is going to be best.
    You know, no company we regulate should be guaranteed that 
it is going to have a certain income level based on a subsidy. 
And I think that is important for all of us to remember.
    Senator Fischer. Thank you very much.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Fischer.
    Senator Heller?

                STATEMENT OF HON. DEAN HELLER, 
                    U.S. SENATOR FROM NEVADA

    Senator Heller. Mr. Chairman, thank you, and to the Ranking 
Member also, thank you for holding this particular hearing.
    I want to thank the panel, also, for taking time, being 
here today, and answering our questions. But before I ask a 
question, I would like to touch on a couple of points.
    Commissioners McDowell and Pai have been discussing FCC 
regulations and whether they make sense in today's world. I 
agree with them that we regulate telecommunications in silos, 
when the world we live in today is becoming more interconnected 
each day.
    And I also agree with Senator Wicker, believe it or not--
actually, we always agree. But we need to have a strong 
discussion here in this committee, this Senate committee, 
regarding the 1992 Cable Act and the 1996 Telecommunications 
Act and whether those laws are promoting or hindering 
innovation, investments in infrastructure, and broadband 
adoption.
    I also want to mention that I was visited recently by the 
Nevada broadcasters and our PBS stations. I would like to 
convey to the Commission their concern regarding the spectrum 
auction. In Nevada we have over 300 translators and low-power 
television stations, and I hope you will keep that in mind as 
you move forward next year in completion of this auction.
    But I would like to bring to attention the bipartisan FCC 
reform measure, a reform measure, the FCC Consolidated Reports 
Act I introduced last year. The bill identifies 16 reports 
required of the FCC that could be eliminated, 8 separate 
reports that could be combined in a single report and produced 
to the Congress at a specific time. This particular piece of 
legislation passed with bipartisan support in the House.
    Last year, I asked all of you your thoughts on this 
measure. Four commissioners who answered did not have 
significant issues at all with this bill. Commissioner McDowell 
said that Congress and the FCC would benefit.
    So to you, Mr. Chairman, I do believe that this is a good 
government bill. And Commissioners McDowell and Pai both agreed 
that it would benefit Congress and the FCC. Would you agree 
with that?
    Mr. Genachowski. Well, I have survived, in part, by not 
endorsing specific legislation in my time here, but the ideas 
of reform are something that we are happy to work with you on 
and the Committee on.
    Certainly, consolidating reports is something that we would 
appreciate. We have been trying to do some of that on our own. 
So I do think that working with the Committee to continue to 
reform our processes is a very healthy thing.
    Senator Heller. Commissioner McDowell, do you have any 
comments?
    Mr. McDowell. Absolutely. I think there are some very 
meritorious ideas in that legislation, as you have heard me say 
before.
    And I also would hope that in the coming months and years 
this committee would seriously consider the seemingly daunting 
task of a comprehensive statutory rewrite to erase those silos, 
to look at all of these services and technologies through the 
lens of consumers, like my children, who don't care if it comes 
through twisted copper pair or wireless in one way or a 
broadcast which is wireless in another way or a coaxial cable 
or fiber. Let's look at how are consumers potentially 
benefiting and also harmed and if there are concentrations and 
abuses of market power.
    That is a daunting task, but I think if we all work 
together, it doesn't have to be partisan, it could be 
unanimous.
    Senator Heller. Thank you, Commissioner.
    Commissioner Pai, thank you for your recent visit. Do you 
have any comments on this?
    Mr. Pai. I do think that the Consolidated Reporting Act 
would go a long way to streamlining the efforts that the 
Commission has to expend in order to report back to Congress. I 
think it would also do Congress a much better service because 
you would get in one place a comprehensive snapshot of exactly 
what is going on in the marketplace.
    Let me add, as well, that the endeavor to reform our 
processes from a legislative standpoint shouldn't operate to 
the exclusion of what we at the Commission can do ourselves to 
keep the trains running on time. So, in a number of the 
proposals I put forward, which I don't believe are politically 
beneficial to anybody but are just a matter of good government, 
involved setting deadlines, employing more sunset clauses, you 
know, creating a dashboard where the public can monitor exactly 
how the Commission is performing with respect to key 
performance metrics, like the number of petitions for 
reconsideration that are pending, how long it takes us to issue 
license renewals, and those kinds of things.
    All of which speak to the value of accountability. I think 
too often what we have heard over the last number of years, not 
limited to any particular agency in terms of political 
leadership, is that the Commission doesn't necessarily respond 
as quickly to the industry as the industry is moving on its 
own. And so I think that is one of the things--I know my 
colleagues agree with it. As we move into the 21st century, 
deeper into the 21st century, we need to make sure that we are 
acting at the same pace as the private sector.
    Senator Heller. Thank you, Commissioner.
    And I am running out of time. Mr. Chairman, I plan on 
introducing, reintroducing, the FCC Consolidated Reporting Act 
this year. Certainly hope to get the support of the Committee. 
Thank you very much.
    The Chairman. Thank you very much, Senator Heller.
    And let me just, for the convenience or misery of Members, 
Senator Warner will be next, Senator Klobuchar, Senator Schatz, 
Senator Rubio, Senator Cowan, Senator Blumenthal, some guy 
named Senator Nelson, Senator Begich, and Senator Cruz. So show 
your love for the Committee.
    Senator Warner?

                STATEMENT OF HON. MARK WARNER, 
                   U.S. SENATOR FROM VIRGINIA

    Senator Warner. Thank you, Mr. Chairman.
    And it is great to see all the Commission members here.
    You know, one of the things that Senator Wicker and I, and 
Senator Snowe before that, worked on at some length was trying 
to make sure we just have a good inventory of spectrum. And I 
know the Commission has been generally supportive of this. We 
have to get our other colleagues in the Federal Government, 
particularly on the DOD and intel side, to help you get there 
on that. Because some of the most valuable commodities we have, 
we don't have good information about how not only private 
sector but much of the public sector is using the existing 
spectrum.
    Related to that, of course, as spectrum gets more and more 
valuable--and as somebody who benefited from that increase in 
value in a prior life--we have to make sure we get as much 
utilization as possible. I want to talk a little bit about 
interoperability. And maybe I will start with the Chairman, but 
any other Commissioner who would like to mention this.
    I understand that as we look at all of the new technologies 
coming on, particularly, obviously, in the wireless space, you 
know, if you would like to comment on how you are looking at 
the whole question of receiver standards and whether this is 
going to be a mandatory system, or now are we looking at 
potentially a voluntary buy-in.
    Because we are continuing to see new opportunities--I think 
about auto industries and others who want to think about 
smarter cars as well as smarter phones. Yet there is a constant 
question here about interference issues, which, obviously, has 
hit a couple of your other actions in the past.
    So, Mr. Chairman, do you want to start on that?
    Mr. Genachowski. Sure. You know, there was a time when 
people thought that spectrum wasn't scarce anymore and we had 
all we would ever need and there were no issues. Now, of 
course, we know that the opposite is the case and we have some 
real challenges on freeing up more and more spectrum.
    Part of what we have learned as we have done it is that, 
where we have spectrum that is being inefficiently used, 
sometimes because of restrictions like satellite restrictions, 
we will see receivers come on the market that get interfered 
with as we remove unnecessary restrictions. And we have to 
tackle that. We are running a process at the Commission to 
determine the best was to do that. I know the Committee is 
looking at it. But we need to alter the incentive structure so 
that we don't see that kind of issue.
    Senator Warner. Anyone else want to make a comment on that?
    Mr. McDowell. I would actually adopt by reference 
everything the Chairman just said. And receiver standards are 
very important. We hope that there could be a private-sector 
consensus here, so let's push toward that.
    It should be part of an overall goal, though, to increase 
spectral efficiency, because even if we could identify all the 
500 megahertz that the National Broadband Plan calls for to 
bring to auction or to bring to market, that is going to take 
the better part of a decade to actually get into the hands of 
consumers. So what do we do in the meantime? We have to adopt 
policies that promote spectral efficiency in a variety of ways.
    But, also, one thing we should avoid with the upcoming 
incentive auction is making it too complex, too complicated. 
Having been a veteran of the 700-megahertz auction, my first 
dissent was cast on the encumbrance on the C Block. That 
encumbrance, among other unforeseen circumstances, probably 
resulted in an interoperability problem which we now face, and 
it is a Gordian knot that we have to untangle. So let's be 
very, very careful of trying to make these things too 
complicated and trying to out-guess the market, because we 
can't.
    Senator Warner. Anyone else want to make a comment?
    Ms. Clyburn. Speaking of interoperability in general, one 
thing that comes to mind that I have been talking about a lot 
is the lower 700 megahertz, where there are issues as it 
relates to interoperability.
    There has been engagement for almost a year. I am still 
hopeful for a voluntary solution. But the FCC, in its history, 
has either mandated or encouraged an interoperability across-
the-board rule. And urban areas alike benefit from it. And so, 
where we can, we should either mandate or encourage strongly 
voluntary engagement.
    Senator Warner. I agree with the voluntary component, 
although I know in the past it has not always been successful. 
And, you know, at the end of the day, pushing out new 
technologies, we are going to need to use all the spectrum we 
can.
    I know my time is running down. I just am concerned, as 
well--I have a whole series of questions I will submit for the 
record, Mr. Chairman--but there seems to be a bit of 
backsliding on USF reform.
    And I just believe that this is a knotty problem. This is 
obviously a change of technologies. But if we are going to get 
the kind of rural broadband deployment that I think many of us 
want to see, this is going to have to be a component.
    If you want to comment?
    Mr. Genachowski. I just--on that, what I heard you say is 
that there shouldn't be any backsliding.
    Senator Warner. Yes, that is right. I think that----
    Mr. Genachowski. And I completely agree.
    Senator Warner. My time has gone up. I just want to also 
echo comments I think some of my other colleagues have made. 
And I know it opens up an enormous can of worms, but with the 
marketplace and technology moving so quickly, at some point a 
broader-based looking at reworking of the whole Telecom Act I 
think ought to be the subject of this Committee, at least 
starting down that path. It may not happen overnight, but 
great, great potential.
    So I thank the Chairman and thank the Commission members 
for being here.
    The Chairman. Thank you, Senator Warner.
    Senator Klobuchar?

               STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. Thank you very much, Mr. Chairman.
    Thank you, Commissioners. Thank you to the Commissioners 
who came to Minnesota in the last year or so, including the 
Chairman and Commissioner Rosenworcel as well as Commissioner 
Clyburn. And you are invited as well, Commissioner McDowell and 
Commissioner Pai, thank you so much for your work.
    I want to start with unlocking. I appreciate the leadership 
the FCC is taking on this issue. I have introduced the Wireless 
Consumer Choice Act with Senator Lee and Senator Blumenthal and 
we are taking this very seriously. We think this is a great 
opportunity to open this up for competition.
    I think you know that there has been a lot of outrage over 
the recent decision by the Library of Congress--not a common 
foil for people, but----
    [Laughter.]
    Senator Klobuchar.--the recent decision that creates 
uncertainty for consumers who want to unlock their phones from 
one network to switch to another.
    And, again, I see this as an opportunity. And I wondered, I 
guess, Mr. Chairman, if you would commit to work with us on 
this bill to address any concerns and to take action. And do 
you agree that unlocking is an impediment for consumers 
choosing to switch carriers and, therefore, is a barrier to 
competition?
    Mr. Genachowski. I do. I think that decision from the 
Library of Congress raised real competition and innovation 
concerns. I was happy to see the legislation introduced, and 
thank you for your leadership.
    And it appears to be a bipartisan issue. We need to address 
it because, right now, there are criminal penalties for someone 
who gets a new phone and unlocks it. Doesn't make sense.
    Senator Klobuchar. No, it doesn't.
    Anyone want to add anything more?
    Mr. McDowell. I think it is important to get past the 
headlines a little bit on this issue. And while we need to 
quickly dispel this image of consumers being hauled off in 
handcuffs if they try to unlock their cell phone----
    Senator Klobuchar. Without their phones, it would have to 
be.
    Mr. McDowell. With or without their phones, exactly--that 
we also need to understand that we need to protect intellectual 
property rights. And there is contract law, which your bill 
speaks to, that can convey and give consumers lots of options 
and lots of freedom here. So let's make sure we are not 
undermining intellectual property rights and that we are also 
preserving the right to contract.
    Senator Klobuchar. Yes.
    Ms. Clyburn. I agree with my colleagues. And, also, 
affordability is a factor, and environmental factors. You know, 
if you have to make all of these changes every time you--if you 
have an option to change providers, you know, that is not good 
for the environment too. So all of those things go into play. 
And thank you so much for introducing that.
    Senator Klobuchar. Yes.
    Ms. Rosenworcel. I agree. Would be happy to help, whether 
that is through the FCC or through updating the Digital 
Millennium Copyright Act. I think the most stunning thing, 
though, is to find out about the great power of the Librarian 
of Congress.
    [Laughter.]
    Senator Klobuchar. Exactly. I thought the same thing.
    And, as you reference, Senator Leahy has a bill that I know 
Senator Lee and I are also on. And I think it is a different 
approach and we can somehow combine them. We will all work 
together.
    But I do think it is important, Mr. Chairman, for this 
committee, with its jurisdiction over telecommunications, to be 
involved in this decision. And that is one of the reasons we 
introduced the bill this way.
    Yes?
    Mr. Pai. Well, I would add that contract law, in my view, 
rather than criminal law or copyright law, I think should 
govern the relationship between a wireless consumer and the 
wireless provider.
    And so, to that end, I would be more than happy to work 
with you, whether it is an exemption to the DMCA that allows 
consumers to unlock their phone or another measure. We stand 
ready to aid in your legislative mission.
    Senator Klobuchar. Thank you very much.
    I read good news today. The FCC is taking the issue 
seriously about call completion, with the consent decree, with 
Level 3 Communications. Thank you very much.
    Could you discuss, Mr. Chairman, what this consent 
agreement with Level 3 means for the industry? As you know, we 
have had huge problems with call completion in rural areas in 
my state and in others.
    Mr. Genachowski. I think it sends a clear message that it 
is not acceptable, that we will take seriously any instances 
that we find of failure to complete calls. We will continue to 
investigate reports, and if it is necessary to have more 
enforcement actions, that is what we will do.
    Senator Klobuchar. OK.
    Another question. I understand the FCC has an open 
proceeding considering the legal and policy consequences of 
expanding or redefining what a multichannel video programming 
distributor is, known as a MVPD. What have you found so far? 
Would altering the definition promote competition and bring 
prices for video services down for consumers?
    We have had some issues come up in some of our suburban 
areas about the price of cable and also transparency for 
wireless service disclosure.
    Mr. Genachowski. Well, we haven't reached any decisions in 
that proceeding. I am, I think we all are, concerned about 
rising prices to consumers and the need to keep on pushing 
competition policies in this area.
    Senator Klobuchar. Thank you.
    And I will follow up more on that so I can let my 
colleagues go on. But I just will put some questions in the 
record, Commissioner Rosenworcel especially, on metal theft and 
copper telecom wires--a growing problem. Senator Graham and I 
have a bill that Senators Schumer and Hoeven have cosponsored, 
and I appreciate your interest in that. And we will put some 
other questions in the record, as well.
    Thank you.
    The Chairman. Thank you, Senator Klobuchar.
    Senator Rubio?

                STATEMENT OF HON. MARCO RUBIO, 
                   U.S. SENATOR FROM FLORIDA

    Senator Rubio. Thank you, Mr. Chairman.
    First, thank you all for serving on this Commission. It is 
an exciting time to be there with all these things happening.
    I apologize. And I may not use all my time of questioning. 
I have a 4:30 appointment to unlock my phone.
    [Laughter.]
    Ms. Rosenworcel. Are you going to need a lawyer for that?
    Senator Rubio. At 4:40, I have to go see the Librarian of 
Congress.
    [Laughter.]
    Senator Rubio. Anyway, I will start with Commissioner 
McDowell because you were so involved in the Internet freedom 
debate that took place.
    Here is my question. I am interested in working on 
legislation with others that would declare the policy of the 
United States is to promote a global Internet free from 
Government control and maintain the current multistakeholder 
governance.
    So I am not asking you to endorse legislation, although 
feel free to do so, any of you. But I would ask you, do you 
think that sort of statement from Congress would be something 
that is helpful in regards to the position of the United States 
in these international bodies and beyond?
    Mr. McDowell. First of all, thank you for your leadership 
on this issue. And many thanks to every Member of the Senate 
for unanimously supporting that resolution last year.
    And the short answer is, yes, that would be tremendously 
helpful.
    Senator Rubio. Great. Good.
    Did we get that on tape?
    [Laughter.]
    Mr. McDowell. I am sure. Yes.
    Senator Rubio. All right, I have a second question about 
spectrum. And the way I would explain this to people back home 
and across the country when they have asked me about it is, we 
often hear a lot of conversation about roads and how important 
roads are to economic development. You have to be able to get 
your products from entry point to the end-use customer. And 
spectrum is very similar to that, in my mind. In fact, it is 
identical to that, on a different level of course. The spectrum 
capacity is what allows people to quickly get information on 
tablets or cell phones. It actually would give us a cutting 
edge.
    I have been concerned, of course, about staying on the 
competitive edge. And we have heard differing reports about 
where we are in comparison to the rest of the world in terms of 
our capabilities now and moving forward. And it seems to me--
and I may be wrong, and if I am, I want you to point this out--
that in the wireless industry, the demand for wireless 
broadband might outstrip our ability to provide the supply.
    So my question is, would it be helpful if Congress 
authorized multiple spectrum auctions, maybe staggered over a 
period of time, just to ensure that you have a pipeline of 
spectrum entering the marketplace in a steady and predictable 
manner? Is that something that you all think might be helpful?
    Mr. Genachowski. Senator, I think your thinking about 
spectrum as infrastructure is exactly right. And one of the 
challenges that we all face is it is invisible infrastructure, 
and so it can be hard sometimes to generate the action that we 
need. It is why this committee's action on incentive auction 
legislation was so important.
    You are right to identify the supply demand issue, I think. 
The real issue is getting more supply of spectrum to auction. 
And so the issues that, for example, Senator Ayotte raised 
about how do we get more spectrum from Government use would be 
helpful. And I think we can hold an auction anytime, but we 
need the supply of spectrum in order to auction. And that is 
something that I would look forward to working with you on 
together.
    Mr. McDowell. Yes, he is absolutely right. So Federal 
spectrum has got to be a priority, getting the Federal 
Government to liberate spectrum for private-sector use through 
exclusive-use licenses rather than sharing.
    Ms. Clyburn. And you, of course, can provide the incentives 
that might be needed by the Federal holders of spectrum. And I 
look forward to working with you on that.
    Ms. Rosenworcel. You are absolutely right. The broadband 
beneath us and the airwaves all around us are the roads, ports, 
and canals of the 21st century. The challenge is just as you 
suggested: making sure we have enough spectrum in the pipeline 
to meet the demand of that infrastructure.
    I think what we are going to have to do, moving ahead, 
though, is identify ways to make sure that our Federal users of 
spectrum are rewarded when they use it efficiently. If they use 
it efficiently, they should see some gain, whether that is 
through appropriations or budgeting or some other system. And 
if they use it efficiently, it will return more spectrum for 
commercial use and we will have more in the pipeline, which 
will help grow the wireless economy.
    Mr. Pai. And, Senator, I agree with her characterization of 
the problem in terms of more intensive spectrum use. The 
devices we are using today are, in some cases, 128 times more 
data-intensive than the simple cell phone was 15 years ago. So 
there is clearly a need on the consumer side.
    In terms of Federal spectrum, one of the processes that is 
established now under the CSEA, as modified by the legislation 
last year, involves a notification and auction process. And as 
I outlined it in my testimony, I won't belabor it here for too 
long, but that is an established process by which the FCC would 
notify the NTIA about Federal spectrum that could be repurposed 
for commercial use.
    And if we adopt that process and invoke it in a very robust 
way, that would be fair and flexible for everybody--for Federal 
users, for the FCC, and for the private sector. And I hope we 
use it more often.
    Senator Rubio. Thank you.
    The Chairman. Thank you, Senator.
    Senator Blumenthal?

             STATEMENT OF HON. RICHARD BLUMENTHAL, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Blumenthal. Thank you, Mr. Chairman. Thank you for 
holding this hearing.
    And I want to thank my colleague, Senator Klobuchar, for 
her leadership, as well, on the unlocking bill, which I have 
been very glad and proud to cosponsor.
    Let me ask just very quickly, the merger, proposed merger, 
involving T-Mobile and MetroPCS, Chairman Genachowski, has that 
been approved?
    Mr. Genachowski. It has been approved.
    Senator Blumenthal. When?
    Mr. Genachowski. Today.
    Senator Blumenthal. So this information was released at 
what point today?
    Mr. Genachowski. I don't remember the time that it was 
released.
    Senator Blumenthal. But just----
    Mr. Genachowski. Earlier today.
    Senator Blumenthal.--hours in advance of this hearing.
    Mr. Genachowski. Yes.
    Senator Blumenthal. And let me ask you, was it approved at 
the Bureau level or the Commission level?
    Mr. Genachowski. The Bureau level.
    Senator Blumenthal. And can you tell the Committee, this is 
a deal involving 40 million subscribers, billions of dollars. 
Are you aware of any transaction of similar size that has been 
approved at the Bureau level rather than being circulated for a 
vote by the Commission?
    Mr. Genachowski. There have been large transactions----
    Senator Blumenthal. As large as this one?
    Mr. Genachowski. Same order of----
    Senator Blumenthal. My information is that none of this 
size, in terms of dollars and impact on consumers, has ever 
been approved by the Bureau as opposed to by the Commission.
    Mr. Genachowski. This may be the largest. The Global 
Crossing transaction was very large. There was a major radio 
transaction.
    Where there are no petitions to deny, no issues of 
Commission policy, these are typically done at the Bureau 
level. And this was consistent with the precedent in the area.
    Senator Blumenthal. I don't want to take time on this issue 
now, but I will have follow-up questions for the record.
    Mr. Genachowski. Of course.
    Senator Blumenthal. Second area. I noticed that today AT&T 
has announced a rate hike--I am sure you are aware of it--on 
its DSL service. This comes just one week after Verizon 
announced an almost-identical rate increase. Both of them 
trouble me. Price increases sometimes are a fact of life, but 
when we see increases in the market as important as this one, 
not only in its impact on consumers but also our economy in 
general, I think we ought to pay closer attention.
    Let me ask about the FCC's efforts to monitor prices in the 
marketplace. As you know, the National Broadband Plan 
recommended that the FCC collect and monitor prices and make 
that data publicly available so consumers could make more 
informed decisions, have better choices.
    I know the Commission has an open rulemaking on that issue, 
and I wonder if you could tell this committee what the status 
is of implementing this recommendation. And do you believe that 
the FCC needs such data to better meet your statutory 
responsibilities? And--well, let me invite you to answer that 
question first.
    Mr. Genachowski. Sure. As the broadband plan pointed out, 
that would be very helpful data. What is underlying your 
question is something that is very important, which is the need 
for competition to drive lower prices, better products, more 
private investment. And I completely agree with you, and it is 
something that we have worked very hard on.
    In the mobile space, we have seen much better trends in 
mobile competition over the last couple years than we had seen 
before. But there is, of course, much more work to do.
    Senator Blumenthal. Are you troubled, as well, by these 
rate increases?
    Mr. Genachowski. I am troubled in general by rate increases 
that aren't based on competitive factors. These aren't 
something that we have studied specifically yet, but it is 
certainly something that we can look at together with you.
    Senator Blumenthal. I would appreciate that. And I will 
follow up on that area as well.
    Finally, because my time is limited: blackouts, sports 
blackouts. Grave concern, deeply troubling, especially to many 
in Connecticut when they see that their favorite football team 
on Sunday or their favorite baseball team or their college 
sports team has been blacked out in their area.
    The Commission, as you know, put out a notice of inquiry 
but hasn't yet moved to a Notice of Proposed Rulemaking. I 
wrote to the FCC back in 2011 to ask that you open this 
proceeding to discuss whether the nearly 40-year-old sports 
blackout rule--I think it is 40 years old--is still relevant in 
today's environment. And I wonder if you could give me an 
update, a status report, on where you are on this issue which 
is profoundly important to people in Connecticut but I think 
across the Nation.
    Mr. Genachowski. Sure. And blackouts are of tremendous 
concern to consumers. We certainly hear from them, as you do.
    An area where it comes up too often is in the 
retransmission consent area. This is an area where we have had 
discussions with the Committee in the past, and look forward to 
continuing it because it may be time to update those provisions 
to reduce the chances of blackouts during retransmission 
consent negotiations.
    Senator Blumenthal. Are you planning to move to a 
rulemaking proceeding?
    Mr. Genachowski. As we said at the time, our authority 
under the existing statute is limited. And this may be an area 
that we have to work with the Committee to address the blackout 
issue.
    Senator Blumenthal. Well, my time has expired. I thank the 
Chairman for his indulgence. I would like to follow up on this 
area, as well, and get some more specific and detailed answers.
    And I want to thank you and all the Commissioners for your 
very diligent work. Thank you.
    The Chairman. Senator Blumenthal, you only exceeded your 
time by 31 seconds, so I wouldn't get too worried about it. 
Plus the fact that your questioning is always excellent.
    Senator Blumenthal. Thank you.
    The Chairman. Senator Nelson?

                STATEMENT OF HON. BILL NELSON, 
                   U.S. SENATOR FROM FLORIDA

    Senator Nelson. Thank you, Mr. Chairman.
    I believe that disclosure is one of the strongest things 
that can happen in the public sphere. And two decades ago, the 
Federal Communications Act had this provision: Section 317, 
requiring the on-air identification of sponsors of all 
advertisements, political and commercial. And then when the FCC 
wrote the regulation, they said that political ads must, 
``fully and fairly disclose the true identity of the person or 
persons or corporation, committee, association, or other 
unincorporated group or entity,'' that pays for them.
    Well, as you know, as the result of a Supreme Court 
decision, we have been beset upon in the political sphere with 
an avalanche of undisclosed, unlimited money from sources that 
the public does not know where the political communication 
either arguing for or against a particular candidate comes 
from.
    Indeed, in the Citizens United Supreme Court decision that 
set off this crazy contortion of campaign finance law, there 
was an interesting statement by the Court, joined by eight of 
nine justices, that says, ``Disclosure is the less restrictive 
alternative to more comprehensive speech regulations.'' That 
would indicate that the Court is looking approvingly of 
disclosure.
    OK. You have the statutory power. We don't have to do what 
we failed by one vote, with 59 votes, and we didn't get 60 
votes, four years ago to have the DISCLOSE Act. You have the 
power.
    So I would like to know what each one of you thinks about 
implementing the statutory authority that you have for all of 
that undisclosed money that is hiding behind the Committee for 
God, Mother, and Country'' and yet is fueled by various special 
interests.
    Mr. Genachowski. So, Senator, thank you. It is a very 
important issue, and I agree with you that disclosure is a 
First Amendment-friendly, powerful tool in this space.
    Last year--and this was a contentious decision--we approved 
new rules that required broadcasters to put online the 
information that they now receive about political ads. And they 
do receive a significant amount of information. By a 3-2 vote, 
we adopted those rules. And that started rolling out before the 
last election, and it will continue.
    And part of what I think we are obliged to do now is look 
at the effect of that as it rolls out, consider the kinds of 
issues that you are raising, and determine what, if any, next 
steps are appropriate and necessary.
    Senator Nelson. Well, the statute passed two years ago 
requires on-air identification of all sponsors of all 
advertisements. And then the FCC rule that implemented the 
statute says, quote, ``fully and fairly disclose the true 
identity of the person''--talking about political ads--or 
persons or corporation, committee, association, or other 
unincorporated group or other entity.''
    So does that mean that you are a ``no'' vote?
    Mr. Genachowski. No, Senator, I think there are 
requirements that are in place on disclosing, including on air, 
the sponsors of ads. I think you are suggesting that we look at 
going more deeply into who the actual funders are. I think that 
is a very important issue and something that we should look at.
    Senator Nelson. I am talking about the enforcement of the 
FCC's rules that fleshed out the statute that was passed.
    Would you indulge me, Mr. Chairman, to just see what the 
rest of the Commissioners say?
    Mr. McDowell. Thank you, Senator, for the opportunity to 
comment on this. And you are absolutely right; disclosure and 
transparency are good and curative in many, many contexts.
    And as the Chairman pointed out, about a year ago, we had a 
vote--actually, there were only three of us at the time at the 
Commission. There was a 3-0 vote in part and a 2-1 vote in the 
other part. I dissented against the disclosure of broadcast 
rates, how much it cost, because I am concerned about 
collusion.
    So we want to encourage transparency. At the same time, we 
need to balance that against what is the right forum. Should 
that be the Federal Election Commission or the Federal 
Communications Commission? Should broadcasters end up being the 
enforcers of political campaigns and these other groups that 
are formed? Do we put the burden only on them?
    So I think there are a lot of equities to balance here, as 
well. There are a lot of groups that get formed in the context 
of elections and public issues ads. So where should all the 
burden go? The money flows to new media, it flows to old media, 
it flows to a lot of different places in old media and not just 
broadcast licensees. So we need to be careful to balance.
    Senator Nelson. There is no balance here. It says 
``requires on-air identification'' of the sponsors of 
advertisements. So does that mean you are a ``no''?
    Mr. McDowell. Well, and there are already both FEC rules 
and FCC rules regarding these sorts of things. So, you know, 
all the mouse print and the quick, fast talking at the end of 
ads covers a lot of that.
    Senator Nelson. We just came through more than a billion 
dollars, probably $2 billion to $3 billion, of outside ads from 
these undisclosed sources. So this is not an issue in front of 
the public. It is here, it is right now.
    What about you, Ms. Clyburn?
    Ms. Clyburn. Senator, I will look forward to working with 
you if there is anything that we have or have not done or that 
you identify as deficient.
    We moved a long way in moving the information that stations 
were previously keeping on premises to the airwaves. It made 
the opportunity for investigative work and the like more clear. 
Again, if there is anything that we left out, if there is any 
``i'' not dotted, I look forward to further engagement with 
you.
    Senator Nelson. So that is a ``maybe.''
    How about you, Ms. Rosenworcel?
    Ms. Rosenworcel. I will make it easy. Yes. I agree with 
you. Sunlight is the best disinfectant. And we should look at 
our rules, make sure they are updated under Section 317, and 
make sure that the filings that we receive are as transparent 
as they need to be.
    Senator Nelson. Mr. Pai?
    Mr. Pai. Thanks, Senator. I share my colleague's value of 
openness and transparency in all phases of our work.
    One of the issues, I think, that we are confronting is that 
Section 73.12(12) of our rules, which implements Section 317 of 
the Act, requires the disclosure of persons, committees, 
corporations, or other entities that are sponsoring the 
advertisement. So there is a question under our current rules 
whether that requires the disclosure of all the sponsors who 
are underlying the actual sponsors. And so there are also some 
practical considerations, as Commission McDowell pointed out, 
in a 30-second television ad. Would you have to identify every 
single sponsor of, you know, who is funding the corporation or 
the outside committee?
    One of the other things I would like to bring to your 
attention is this September 2012 GAO report which studied this 
issue in some depth. And it pointed out that, regardless of 
what Congress does with respect to the law and what we do with 
respect to our rules, it wouldn't hurt for us to update some of 
our FCC guidance to broadcasters. Some of that guidance hasn't 
been updated since 1963, and it still talks about the fact 
that, you know, the expensive kinescope print that you use to 
produce a film might warrant sponsorship identification.
    And so I think there are things that we could do internally 
to provide greater clarity for the industry.
    Senator Nelson. That sounds like a ``maybe, yes.''
    [Laughter.]
    Senator Nelson. In which case, need one more vote.
    [Laughter.]
    Senator Nelson. I need three votes.
    Now, this is of great consequence to the political sphere, 
of how it was influenced by undisclosed, unlimited money.
    Thank you, Mr. Chairman.
    The Chairman. Would the Senator yield to a question?
    Senator Nelson. To my Chairman, of course.
    The Chairman. It is a fascinating question, and it goes to 
the very root of the integrity of democracy. And there were two 
fairly--one very clear, one fairly clear ``yes,'' and then 
there was sort of a ``yes, maybe,'' and then there was a--you 
know.
    There is no complexity to this question. There is no way, 
cerebrally, to avoid answering his question. To say that the 
FTC could do it or somebody else could do it, that is not what 
he is asking. He said, you have the power to do it, and he is 
asking, will you do it. I don't think it is unfair for him to 
insist.
    And you have my permission, if Senator Cruz doesn't kill 
me, and Senator Cantwell, Senator Begich--well, they will kill 
me. I think he should press his point.
    Mr. Genachowski. Well, I would be happy to add to that.
    We took a major step last year in increasing transparency 
around political ads and making the information available to 
consumers. It was a very significant----
    Senator Nelson. You might have done that, and I commend you 
for that. But it didn't affect the outcome.
    Here is the outcome. It is disclosure. Once all of those 
entities have to put their mouth where their money is, it is 
too embarrassing for some of them. Now, some of them, of 
course, it was obvious; they made no bones about it. But when 
you hide behind that ``Committee of the Flag, Mother, and 
Country'' and in the name of that entity all of the 
contributions are made, you are violating the statute and the 
rule that you all implemented to flesh out the statute.
    Thank you.
    The Chairman. Thank you, Senator Nelson.
    Senator Begich? Thank you for your patience.

                STATEMENT OF HON. MARK BEGICH, 
                    U.S. SENATOR FROM ALASKA

    Senator Begich. No, I am happy. That was a very interesting 
debate, and it would be interesting at some point to further 
that discussion.
    But let me--as many of you know, I always start--and, 
first, I want to say thank you for all the work you have done 
in regards to some of the adjustments you have done and the 
work you have done in regards to Alaska. But always being 
parochial and always caring about my state, I want to lay a 
data point, and then I have a couple questions, Mr. Chairman, 
if I can direct them your way, and others may want to respond.
    A new study came out, I think it is called ``The Brattle 
Group,'' a pretty respected group, found that 60 percent, 60 
percent of Alaska has wholly inadequate telecommunications. 
Sixteen thousand census blocks in Alaska have no wireline 
broadband service or no wireless service whatsoever. Another 
4,300 census blocks have no wireless service at all.
    To get just to 3G--forget 4G, I know that is the goal--just 
to get to 3G in Alaska is a quarter of a billion dollars of 
investment. So we have significant investments needs.
    And, now, Mr. Chairman, I am going to ask you a couple of 
questions in regards to two recent ones. I know you just 
finished, I think it was Order 6. And one of the issues that, I 
think it was in Order 6, that came out--and let me just kind of 
state it here.
    You have done some positive impacts, again, for Alaska, but 
it is clear and it appears there is an error in the regression 
analysis. The first that comes to mind is the designation of 
tribal lands. The FCC itself, in previous dockets considering 
Lifeline and Link Up services, recognized Alaska as designated 
100 percent tribal lands. We are not like any other state, we 
don't have reservations. And so, in 2012, July, the wireline 
bureau conceded that not treating Alaska as 100 percent tribal 
lands was an error and that it should be corrected. To date, 
that correction has not happened.
    What is more disturbing is the most recent arbitrary 
designations. I mean, the North Slope, 23 percent tribal. Well, 
where do you come up with the data to back that up? Because 
being born and raised, I am going to tell you--and I know 
Commissioner Pai is going up to North Slope.
    And they are going to be anxious to talk to you about what 
tribal land is. And I will come to you because you had some 
commentary which I appreciated.
    I don't know how you come up with these designations. And I 
am anxious, one, how you came up with it. And then I want to 
see the data. Because I am going to tell you, I will be 
surprised if the FCC understands--no disrespect to all of you 
and your staff--what tribal lands are. And 23 percent of the 
North Slope Borough, as one example, is not tribal land. The 
whole area is tribal land.
    And, obviously, to be very frank, I am a little agitated 
because it has offended many of my constituents in Alaska, how 
an agency can determine what tribal land is when you already 
have one of the bureaus saying they made an error, should be 
100 percent.
    So, Mr. Chairman, how do you respond to that?
    And then I want to get the data, and I hope it comes from 
somewhere, wherever that somewhere is.
    Mr. Genachowski. Senator, first of all, thank you for the 
positive remarks on our overall reform efforts. You and I have 
spent much time talking about this over the last few years, 
including in----
    Senator Begich. And in Alaska.
    Mr. Genachowski. In Alaska, although not in the North 
Slope.
    Senator Begich. No.
    Mr. Genachowski. And, certainly, I recognize, we all 
recognize, the staff recognizes that there are elements of 
Alaska that are unique and that we have to take into account in 
our rules and that the tribal issues in Alaska are complex and 
very important.
    On the specific question that you are asking, if I may, I 
would like to follow up with you on that. Because the 
particular----
    Senator Begich. I would appreciate that.
    Mr. Genachowski.--North Slope tribal issue is not something 
that I am----
    Senator Begich. That is just one.
    Mr. Genachowski.--familiar with.
    Senator Begich. It is around Alaska. Many different areas 
have different percentage designations. And I would like to 
know where the data came from to determine that.
    Mr. Genachowski. We will provide that data to you and work 
with you on this.
    Senator Begich. And did I see another--yes?
    Mr. McDowell. Senator, first of all, thank you for raising 
this issue. As you know, if it weren't for Senator Ted Stevens, 
I would not be here, and I am eternally grateful for that.
    Senator Begich. And he probably ingrained in your mind 
about tribal issues 100 percent.
    Mr. McDowell. It is. And I have always fought for----
    Senator Begich. I am just here to help remind you of that 
fact.
    Mr. McDowell.--tribal lands. We always fight for inserting 
Alaska native lands if it is not in our language already. So it 
has been a priority of mine since my very first trip as a 
commissioner was to Alaska in August of 2006. I have been to 
the North Slope in winter when it was a balmy 55 degrees below 
zero in Barrow and----
    Senator Begich. Extra credit.
    Mr. McDowell.--Deadhorse. So I want to work with you on 
this issue to help correct it if we need to.
    Senator Begich. Very good.
    Ms. Clyburn. And, Senator, as you know, I came to Alaska in 
the dead of summer, and----
    [Laughter.]
    Ms. Clyburn. And I am unapologetic for that.
    [Laughter.]
    Ms. Clyburn. But I want to assure you--and we have talked 
several times--that we run a data-driven process. And all data 
and methods, in terms of the regression analysis and any other 
analysis that we have come up with, are open to you.
    So, again, I would invite you to come down to the office or 
we can come to you. It might be easier for you to come down to 
the office on some of this. And if there are any remaining 
questions which obviously----
    Senator Begich. We will make it happen.
    Ms. Clyburn. All right.
    Senator Begich. My time has about run out, and I still have 
one important question.
    Ms. Rosenworcel. Well, you know, Senator, I have been to 
Alaska, I have been up there with you. And I think there are 
two points here. First of all, when you have a regression 
model, it is only as good as the data you put into it.
    Senator Begich. Yes.
    Ms. Rosenworcel. And the second point is Alaska is big and 
vast, and it is possible that it does not fit into the model 
that we use for the lower 48 states.
    Senator Begich. Very good. Let me end you there.
    Mr. Pai, don't worry, I have a question for you.
    Mr. Chairman, if I could just take 2 seconds to kind of go 
through.
    One other one was a letter that was sent to the Alaska 
delegation, dated August 2012, Mr. Chairman. Adopted a variable 
that specifically accounts for provision of services in Alaska. 
That variable, adopted by the Commission for construction in 
Alaska, is a negative coefficient. In other words, the data 
actually says--which doesn't make--I am trying to hold myself 
here for a second--that it is 46 percent lower to construct in 
Alaska than the lower 48. That is impossible, based on my 
experience.
    And so, you know, when is that--as you said, data going in, 
creates something that doesn't work. I mean, San Juan actually 
get a 679 percent higher cost of constructing, San Juan, than 
Alaska, when we have less than 4 months in some of our areas of 
construction season, when San Juan may be a little warmer, 12 
months.
    So how do we explain that? And can you get me data to 
explain this, or fix this problem that doesn't make any sense?
    Mr. Genachowski. Yes, I think there may be a 
misunderstanding there. Our staff recognizes the cost and 
expense of building out in Alaska. So we will pursue that with 
you and your staff, and I would look forward to that.
    Senator Begich. Very good.
    Let me end and just say, Commissioner Pai, thank you.
    Given the new data that I showed and some of your 
commentary--I did not read the nine-page speech, but I got good 
commentary on it--let me ask you, do you agree that it makes no 
sense or that there should be clear review of additional 
reductions in the USF fund, especially in Alaska, based on this 
data that I just laid out on the 60 percent accessibility 
issue?
    Mr. Pai. Well, Senator, first, I want to thank you----
    Senator Begich. I am tagging you because you had a little 
different view on the last order.
    Mr. Pai. Yes. Thank you for the question. And I want to 
express my appreciation for our productive exchanges, both in 
public and in private, on these issues. I know it is important 
to you, and it is important to me and my colleagues, as well.
    I think one of the issues that we are confronting, and you 
encapsulated it in your question, which had to use the words 
``negative coefficient'' and things like that, an elegant 
model, even one that in the abstract is mathematically sound, 
can often run aground on the shores of Alaska. And so, from 
Barrow to Adak, from, you know, Kotzubue to Cordova, there are 
a number of unique challenges that the state faces that aren't 
adequately captured in the model.
    So, you know, there are two solutions to that. One is, you 
know, to stay with things the way they are. The other is to 
make the necessary changes to the model, either by tweaking the 
variables or putting in better data.
    As you know, I have expressed to you before, I stand with 
you in terms of my willingness to get it right and make sure 
that we do what we can to, you know, provide predictability and 
adapt to the conditions of Alaska.
    Senator Begich. Thank you. Look forward to seeing you in 
June.
    Mr. Pai. June, July, August, yes, we will look forward to 
that, too.
    Senator Begich. Very good. Thank you.
    Mr. Chairman, thank you.
    The Chairman. Thank you, Senator Begich.
    The most patient Senator Cruz.

                  STATEMENT OF HON. TED CRUZ, 
                    U.S. SENATOR FROM TEXAS

    Senator Cruz. Thank you, Mr. Chairman.
    I want to begin by thanking the Chairman, thanking each of 
the Commissioners for your service, for being here, for your 
extended testimony today. I appreciate your being here.
    I would like to ask a couple of questions about spectrum 
policy, but I would like to begin with just a word of caution 
about the recent exchange with Senator Nelson.
    The FCC has a long tradition of being nonpartisan. And, as 
each of you know, the DISCLOSE Act is a subject of deep, deep 
division within the U.S. Congress. And many are concerned that 
the DISCLOSE Act, if passed, would have a profoundly partisan 
impact and would raise grave First Amendment issues.
    And so the word of caution I would raise is, were the 
Commission to endeavor through rulemaking to end-run Congress 
and adopt a rule that would be perceived as overtly partisan, I 
would caution that doing so could well undermine the integrity 
of the Commission and imperil the independence of the 
Commission.
    So I give you that word of caution. You have an important 
statutory mission. And my counsel, at least, would be to leave 
the political disputes to the members of this body, who are 
elected to decide them. And I don't require an answer to that. 
That is simply a word of caution.
    I want to turn to questions on spectrum now. I have seen 
estimates that the Federal Government owns or controls roughly 
85 percent of spectrum that is suitable for wireless broadband. 
And the question I would ask the chairman and each of you is 
twofold.
    Number one, for those estimates, are those consistent with 
your understanding? And, in your learned judgment, is it 
appropriate for the Federal Government to control such an 
overwhelming majority of the spectrum that is suitable for 
broadband, and for the public, the private sector, to be 
allocated only 15 percent?
    Mr. Genachowski. So it is an important question, Senator 
Cruz, and others on the Committee have asked it, as well, which 
I think is a good thing, because we do need to take this issue 
seriously. I have seen the number 60 percent, maybe measuring 
different spectrum. But either way, when you compare the usage 
needs to the amount of spectrum that the Federal Government 
has, it doesn't make sense long-term, given the very powerful 
demands for commercial spectrum.
    And so working together on this is absolutely essential. We 
need to clear and reallocate much more Federal spectrum. And I 
believe we also need to look at creative sharing ideas and 
pursue both tracks.
    Senator Cruz. Does anyone disagree with that assessment?
    Mr. McDowell. I don't disagree. Actually, the number could 
be 60 percent, it could be 85 percent, it could be more, 
depending on what you determine is the best spectrum. And 
technological innovation is actually expanding that. You know, 
there was junk spectrum years ago which is now prime spectrum.
    But the Federal Government can and must do more to 
relinquish spectrum for auction for exclusive-use licenses.
    Senator Cruz. Let me ask, then, a follow up question. Are 
any of you aware of any reliable assessment of the value of all 
of the spectrum that is controlled by the government? And, if 
not, can you imagine any sensible process for valuing it and 
assessing just how significant of an asset is this spectrum 
that is in the control of the Federal Government?
    Mr. Genachowski. Well, the idea of an audit of Federal 
spectrum, it has come up earlier in the hearing. It is 
important, and I agree with my colleagues that it should be 
done. That should not hold up steps we can take in the near 
term to free up spectrum where we know there is inefficient use 
and we can get it on the market.
    Mr. McDowell. The value could be untold, really, if you 
look at 400 megahertz to maybe 3 gigahertz, and that is the 85 
percent data point you are looking at. You know, based on the 
$2.70-per-megahertz POP, which is how we value spectrum, that 
came out of the 700 megahertz auction, if all of that could be 
used in an unencumbered way at its maximum value, I can't do 
the math. That is a lot of zeroes after a number, but it is in 
the tens, if not hundreds, of billions.
    Ms. Rosenworcel. Yes, the value of Federal spectrum 
holdings is really, really big. Too many zeroes to count. But I 
think what we need to do----
    Senator Cruz. This is a body that we--we generate a lot of 
zeroes.
    Ms. Rosenworcel. You operate in those numbers.
    Senator Cruz. Far too many.
    Ms. Rosenworcel. Yes, I know. I know.
    [Laughter.]
    Ms. Rosenworcel. What we need to do right now, though, is 
we need to find ways to give incentives to the Federal 
Government to be more efficient with its spectrum. We need to 
make sure that when we knock on the Federal Government's door 
and ask for more spectrum for commercial broadband use, they 
don't just see loss from its reallocation, they see the 
possibility of gain. And I think valuing it is the first step 
in identifying how to do that.
    Senator Cruz. And if I may ask, with the Chairman's 
indulgence, one final follow-up question, which is, in your 
judgment, what would be the best process for assessing the 
macro question of determining the appropriate level of control 
and/or ownership of spectrum by the Federal Government and the 
value of that, and what is the appropriate level of control 
and/or ownership by the private sector?
    Mr. Genachowski. I will answer very briefly. I do think 
that audit would be the best process. As Commissioner McDowell 
points out, we can value spectrum on a megahertz POP basis, and 
so I would encourage that path.
    Mr. McDowell. The audit plus, borrowing a concept from 
zero-based budgeting, which is the Federal Government should 
justify use of its spectrum in a transparent way, as 
transparent as the Federal Government can be.
    Senator Cruz. Thank you very much.
    The Chairman. Thank you very much, Senator.
    Senator Cantwell?

               STATEMENT OF HON. MARIA CANTWELL, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Cantwell. Thank you, Mr. Chairman, and thank you 
for holding this hearing. I know it has been a long afternoon 
already, but I certainly appreciate the opportunity to address 
the Commission.
    And, you know, I think the last oversight hearing we talked 
about media ownership rules, and I more or less know where we 
are. You are looking at a study, at this point in time, to give 
you more feedback on the proposed rules. It seems as if you are 
going to pursue what your Republican predecessor did with 
urging more media consolidation, obviously something I don't 
support, your proposed rule. So I am not going to spend a lot 
of time on that today, other than to just say we will certainly 
pursue a resolution of disapproval if that is where you end up.
    But I just wanted to point that out. It is not that I don't 
want to ask a lot of questions about it. I just know you are at 
this stage where you are getting more input from a study.
    I do want to ask about unlicensed spectrum, though. And I 
guess, first, I just want to start with a basic concept or 
question to you, the Chair, but I guess to anybody else who 
wants to jump in there.
    Do you agree or disagree that the spectrum crunch that we 
hear about also applies to the unlicensed spectrum? We spend a 
lot of time on the licensed spectrum, but I want to make sure 
everybody gets the demand and the crunch on the unlicensed. Do 
people think that is a real issue?
    Mr. Genachowski. I completely agree. We feel that when we 
are at conferences or airports and we are using unlicensed 
spectrum, which is what Wi-Fi is built on, and we see and feel 
the congestion. This is more likely to get worse than better, 
as more and more video and high-bandwidth uses travel over 
unlicensed and Wi-Fi.
    So I agree with you, we need to free up more spectrum for 
Wi-Fi. We proposed another 200 megahertz recently. And then I 
also think we need to pursue a new generation of unlicensed, 
which we can do as part of the incentive auction process.
    Senator Cantwell. And do you agree or disagree that 
obviously there are different propagation characteristics of 
these different megahertz? So, like, at 600 megahertz or 900 or 
2.4, 3.5 gigahertz, 5, there are different--enables certain 
things and precludes others? So it is not----
    Mr. Genachowski. Agree.
    Senator Cantwell. OK. Good.
    And that obviously it is very important for innovators to 
have access to unlicensed spectrum at different frequencies, 
including below 1 gigahertz.
    Mr. Genachowski. I agree. And it is both the frequencies, 
and it is also the power at which they are permitted to 
transmit. There is some Wi-Fi frequency available at lower 
frequencies, but it is power-limited. And so this next 
generation of unlicensed, which can be both lower frequencies 
but also higher power levels, can make a big difference and 
create new innovation markets.
    Senator Cantwell. And so how do you see us resolving these 
issues, or how do we get the attention to these issues so that 
we can have this clarity for----
    Mr. Genachowski. Well, this is in front of the Commission, 
it was in front of Congress in connection with the incentive 
auction law. And there was a direction given to the Commission 
with respect to guard bands and looking at unlicensed in those 
guard bands. I think that was a good outcome on a bipartisan 
basis from Congress, and that is under active consideration now 
at the Commission.
    Senator Cantwell. Yes, go ahead.
    Mr. McDowell. Senator, as you know, I have been a long time 
proponent of unlicensed use of the TV white spaces, which is a 
concept of at least 11 years old. We do need to move forward 
with the incentive auction proceeding, but I want to make sure 
we do not reserve a large block that is nationwide for 
unlicensed use. I think that would undermine funds for the 
public safety initiative that Senator Rockefeller was talking 
about.
    But we can still have robust unlicensed use below 1 
gigahertz, just as we are looking at above 5 gigahertz. But we 
need to be very careful to not artificially create something 
that lends itself better to auctioning for licensed purposes 
than unlicensed purposes.
    Senator Cantwell. That kind of brings up the Progeny 
waiver. So is that something the full commission is going to 
look at?
    Mr. Genachowski. I presume so, although that is something I 
would like to get back to you on. But I presume that is a 
commission issue.
    Senator Cantwell. And why would it not be?
    Mr. Genachowski. Only if it fits into the category of not 
presenting any significant commission policy decisions. But I 
presume it would be.
    Senator Cantwell. Well, I guess it goes--yes, go ahead.
    Mr. McDowell. I would hope it would be.
    Senator Cantwell. Pardon?
    Mr. McDowell. I would hope that it would be something all 
five of us could consider.
    Senator Cantwell. I guess that is my point, is to shove 
some of these things that are already causing challenges in 
this space. You know, I would hope that we were going to have a 
broader discussion about it instead of, you know, having some 
of these waivers given and then having preclusions, basically, 
or conflicts, like on the E-911, when we need to have a broad 
discussion about how we are going to have this unlicensed 
spectrum really be a very robust space for all these 
applications.
    So thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Cantwell.
    I should just point out that, as it turns out, on next 
Tuesday at 2:30 p.m. we are going to have a classified briefing 
for Commerce Committee members on the Federal Government's use 
of spectrum. And that notice is being sent to offices today.
    I could go on to violence, but you know what I would say 
and I know what you would answer. I would just hope that you 
could take what you did in 2007 and then also in 2009 and kind 
of move them forward. I mean, we have to do the heavy lifting 
on it to give you capacity in violence. I have never quite 
understood that. And it has sort of a bad reaction on this 
committee, which I have never quite understood either. But be 
that as it may, you do your work, and I will try to do mine.
    And I want to thank you, particularly, Mr. Chairman, for 
inconveniencing yourself. This was not according to your 
schedule, and you had to make a change. The rest of us did not, 
I don't think. And, therefore, I thank you very much for that.
    These hearings are interesting in that they wander a bit 
from time to time, can come up with interesting and important 
subjects. I thought Senator Nelson's thing was very, very 
important. I had no idea of what you all had written about 
that.
    But people are interested. They do know the world is 
changing, and they do want to know the right things. We have 
some ideological differences, not necessarily with me but with 
some others, but I think those can be overcome, and I think we 
can do good work.
    In any event, thank you all for what you do. It is complex 
beyond definition.
    And the hearing is adjourned.
    Mr. Genachowski. Thank you.
    [Whereupon, at 5:11 p.m., the hearing was adjourned.]
                            A P P E N D I X

Response to Written Questions Submitted by Hon. John D. Rockefeller IV 
                       to Hon. Julius Genachowski
    Question 1. As you know, I have long been concerned about the harm 
caused to kids by violent programming. That is why I have introduced 
legislation to have the National Academy of Sciences study the impact 
of violent programming on children's well-being.
    I also have long believed that parents must have effective tools to 
protect their children from questionable content, no matter how it is 
accessed. I know the FCC previously studied this issue in 2007 and 
2009, discovering significant flaws in TV ratings systems and parental 
controls.
    Technology has changed dramatically since your original studies. 
Today's mobile devices and online video platforms offer children access 
to untold amounts of content and create additional challenges to 
parental oversight.
    Would you commit to updating the FCC's 2007 and 2009 reports on 
media violence and parental control tools, particularly examining the 
impact of changes in technology on parents' ability to protect their 
children from questionable content?
    Answer. As you noted, in 2007, the Commission released a report at 
the request of the House Energy and Commerce Committee that studied the 
impact of excessively violent programming on children, the advisability 
of government regulation of such programming, and the legal issues 
raised by such potential regulation.
    That report stated that research provides strong evidence that 
exposure to violence in the media can cause aggressive behavior in 
children, at least in the short term. It also concluded that Congress 
could develop an appropriate definition of such programming, but that 
such a definition would have to be narrowly tailored and in conformity 
with judicial precedent to withstand constitutional review.
    In August 2009, pursuant to the Child Safe Viewing Act of 2007, the 
Commission issued a Report to Congress in which it assessed the state 
of the marketplace with respect to the existence and availability of 
advanced blocking technologies, methods of encouraging the development, 
deployment, and use of such technologies. The Report also assessed the 
existence, availability, and use of parental empowerment tools and 
initiatives already in the market.
    In October 2009, as a follow-up to the CSVA Report, the Commission 
issued a Notice of Inquiry seeking comment on how to help parents and 
children take advantage of the opportunities made possible by 
electronic media technologies while protecting children from the 
potential risks posed by these technologies. This ``Empowering 
Parents'' proceeding remains open.
    Given the technological changes to which you refer, a reasonable 
first step would be for the Commission to update the record to collect 
data on the most current technologies available to best empower parents 
to protect their children from objectionable programming.

    Question 2. On March 1, I sent letters to the four national 
wireless providers to express my concerns about the growing evidence of 
wireless cramming. As I have expressed in the past, it is important for 
both the FCC and Congress to be proactive in this area. As last year's 
investigation in this Committee found, wireline cramming costs 
consumers and businesses billions, and we have to apply the lessons 
learned from that experience to stop wireless cramming. As we continue 
to move to a more wireless world, we must remain vigilant. What should 
the agency be doing to make sure cramming doesn't move to other 
services, such as wireless? Has the agency seen evidence of an increase 
in wireless cramming complaints in the past year?
    Answer. A pending Notice of Proposed Rulemaking seeks to obtain 
information on the scope of wireless cramming complaints. Commission 
staff is reviewing the record developed in that proceeding and the data 
we are receiving from complaints, as well as the trends in the number 
of wireless cramming complaints we are receiving.
    On April 18, the Commission held a Public Workshop with industry 
experts as well as consumer and state representatives, to help educate 
consumers to protect themselves from both Bill Shock and Cramming. We 
plan to utilize the information obtained in the pending item and at the 
workshops to formulate potential next steps.

    Question 3. Prior to the FCC's adoption of last year's reforms to 
the universal service high-cost fund, I discussed with you and your 
colleagues the importance of making sure that those reforms help bring 
wireless service to rural areas that do not have it now. We also 
discussed how mountainous terrain and other topographical features can 
pose additional challenges and costs to wireless deployment in those 
areas.
    The Commission recently completed its Mobility Fund ``Phase One'' 
auction to provide support for wireless build-out in rural America. It 
is my understanding that some prospective bidders faced significant 
challenges in winning support under the Mobility Fund's Phase One 
rules.
    I know that the FCC is still considering reforms to the method by 
which it distributes wireless support in the future. Will you commit to 
a thorough review of this method to be sure that its works effectively 
for all rural areas, including those areas, like West Virginia, that 
face topographical challenges?
    Answer. It is critical that we extend the benefits of mobile 
communications to rural areas, including those in West Virginia.
    Phase I used a competitive bidding process in areas where it would 
be cost effective to develop with a one-time investment. A total 894 
bids were submitted, and $300 million awarded to extend service to up 
to 83,000 road miles.
    We are conducting a thorough review of this auction to identify 
successes and areas for improvement. Following the auction, we 
solicited further comment on lessons learned, and have been carefully 
reviewing the comments received.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Barbara Boxer to 
                        Hon. Julius Genachowski
    Question 1. For years, rural telephone consumers have been 
reporting to the FCC that they frequently experience dropped calls and 
poor call quality. Last month, the Commission released a Notice of 
Proposed Rulemaking (NPRM) proposing data collection to better identify 
the source of rural call completion problems. That was a good first 
step and one that is long overdue. Will the data the Commission 
receives as a result of the NPRM be shared with States so that they may 
better address intrastate call termination problems?
    Answer. The NPRM sought comment on whether the data the Commission 
proposed to collect should be treated as confidential or be open to 
public inspection. We will be reviewing the record carefully on this 
issue. In addition, in other contexts we have shared even non-public 
data with state officials subject to protections, and will consider 
that option here as well. We have encouraged our state partners to 
participate in the proceeding, and we look forward to working with them 
to address rural call completion problems.

    Question 2. Can we expect the FCC, in the near future, to undertake 
additional enforcement actions like today's consent decree with Level 3 
Communications?
    Answer. Resolving rural call completion issues is a major priority 
for the FCC. We are aggressively pursuing this problem and there will 
be significant consequences for those companies that are not fulfilling 
their obligations to rural America.

    Question 3. The E-Rate program, which has furthered the goal of 
bringing broadband Internet access to classrooms and libraries all over 
the country, is severely underfunded. Last year alone, it had to turn 
away more than $2 billion in applications from schools and libraries 
nationwide, including many in California. Experts project that demand 
for E-Rate support will continue to grow, particularly as wireless 
devices proliferate in the classroom. Yet, the E-Rate cap, which was 
set 15 years ago by the FCC, only increases by one percent each year 
and may not be able to support the future bandwidth needs of our 
schools and libraries. What is the Commission's plan for addressing the 
E-Rate funding shortfall and ensuring that schools and libraries can 
obtain affordable, high-speed broadband?
    Answer. The E-Rate program has achieved remarkable success--97 
percent of American schools and nearly all public libraries now have 
basic Internet access.
    We are at a moment of great opportunity for digital learning. 
Broadband and digital tools have game-changing potential for education. 
Our significant E-Rate reforms in 2010 were a strong start to lower 
costs and expand broadband access to schools and libraries.
    As with all our universal service programs, it is critical that we 
regularly review E-Rate to ensure it is keeping pace with needs, 
operating efficiently and targeting support effectively.

    Question 4. As you know, under the E-Rate program service providers 
are required to charge schools the lowest price offered to comparable 
customers. However, there is evidence that the program's crucial low-
price requirement has been widely neglected.
    What steps are the Universal Service Administrative Company and the 
FCC taking to ensure that E-Rate funds are used correctly, and that 
schools and libraries are receiving the proper discounts on services?
    What are the USAC and the FCC currently doing to ensure that 
service providers under the E-Rate program are charging schools and the 
Federal Government the lowest available prices?
    Answer. E-rate program participants are required to ensure 
compliance with all applicable Commission rules, including the lowest 
corresponding price (LCP) rule.
    USAC's annual trainings for applicants and service providers 
include a reminder that service providers are required to comply with 
the LCP rule.
    FCC has taken actions to ensure LCP compliance, including, in 2009, 
an $8.3 million FCC-DOJ settlement agreement with AT&T regarding over-
billing.
    We will continue to work to ensure LCP compliance going forward.

    Question 5. The National Broadband Plan recommended making changes 
to the E-Rate program to make services more cost-efficient, prioritize 
funding, and give schools and libraries more flexibility regarding how 
funds are used. Added flexibility and efficiency are vital for 
broadband access expansion in California, where sadly 15 percent of 
schools still lack a broadband connection. Can you detail any progress 
made toward these goals, including actions taken and future plans?
    Answer. The FCC's 2010 E-rate Order is making it easier for schools 
and libraries to get the highest speeds for the lowest prices by 
increasing their options, streamlining the application process for 
educators and librarians, and strengthening protections against fraud 
and abuse. We are continuing to update programs across USF and in other 
areas to meet the needs of the broadband age.

    Question 6. Unleashing spectrum for wireless broadband is critical 
to our economy. However, California television stations have inquired 
about the existence of translator and low power service at the 
conclusion of the repacking process which will follow the reverse 
auction. Over four hundred of these stations exist in California and 
serve a large and diverse portion of the state. Where do translator and 
low power services fit in the Commission's plan to auction broadcast 
television spectrum?
    Answer. Congress chose not to provide special protection in the 
Spectrum Act for low power TV and TV translators, which are secondary 
services. However, we recognize the important services low power and TV 
translator stations provide, particularly in rural areas, and are 
seeking input on measures to ensure that their valued programming 
continues to reach viewers.

    Question 7. In his testimony, Commissioner Pai expressed concern 
that the incentive auction may fail to provide sufficient funding for 
FirstNet to build a nationwide, interoperable public safety broadband 
network. As you know, this funding is essential to addressing the 
serious gap in our Nation's public safety communications identified in 
the 9/11 Commission Report. What steps are you taking to ensure that 
FirstNet will receive sufficient funding to fulfill its mandate and 
ensure our Nation has a reliable public safety network?
    Answer. The Commission's central goal is to repurpose the maximum 
amount of spectrum for flexible licensed and unlicensed use in order to 
unleash investment and innovation, benefit consumers, drive economic 
growth, and enhance our global competitiveness, while enabling a 
healthy, diverse broadcast television industry.
    A key goal of the incentive auction is to raise sufficient revenues 
to meet the policy objectives of the Spectrum Act, including funding 
FirstNet. Other auctions required under the Spectrum Act, such as the H 
Block auction later this year, will also be a source of funding for 
FirstNet. As Chairman Genachowski stated when the Commission adopted 
the Notice of Proposed Rulemaking on implementation of the incentive 
auction, ``Our duty and intention is to faithfully implement the law, 
freeing up spectrum, raising very substantial revenue, and helping fund 
FirstNet first responders.''

    Question 8. On March 4, 2013, you released a statement supporting 
consumers' ability to unlock their cell phones so that they can use 
them with a different mobile phone company. My colleagues, Senators 
Klobuchar, Lee, and Blumenthal, have introduced the Wireless Consumer 
Choice Act, which directs the Commission to order carriers to allow 
cell phone unlocking. Would the Commission need additional authority 
from Congress to enforce a cell phone unlocking order?
    Answer. From a communications policy perspective, the decision of 
the Copyright Office of the Library of Congress raises serious 
competition and innovation concerns. For wireless consumers, it doesn't 
pass the common sense test. The FCC has been closely examining this 
issue, with the goal of preserving consumers' ability to unlock their 
mobile phones. We also encourage Congress to consider a separate 
legislative solution.

    Question 9. A recent Government Accountability Office report 
concluded that the FCC's cell phone safety standards, which were 
adopted in 1996, ``may not reflect the latest evidence'' of the health 
risks of mobile phone radiation. You reportedly circulated a draft 
Notice of Inquiry (NOI) proposing a review of the Commission's outdated 
cell phone safety standards in June 2012, but the public is still 
waiting for the Commission to take action. When can the public expect 
the release of the NOI and the initiation of the Commission's review of 
mobile phone safety standards and testing requirements?
    Answer. The Commission released this item on March 29, 2013 and it 
can be found online at: http://hraunfoss.fcc.gov/edocs_public/
attachmatch/FCC-13-39A1.pdf
    We are confident that, as set, the emissions guidelines for devices 
pose no risks to consumers. The United States has one of the most 
conservative emissions standards in the world. This item provides for a 
routine review of our standards. We hope and expect that other Federal 
agencies and organizations with whom we work with on this issue will 
participate in the process.

    Question 10. I was pleased to see that, after considering the issue 
for nine years, the Commission initiated a rulemaking to consider how 
to eliminate predatory prison phone rates. Exorbitant prison phone 
rates impose a significant financial burden on families and reduce 
contact between inmates and loved ones, contributing to recidivism. 
When can we expect the Commission to adopt rules on prison phone rates?
    Answer. The record on the Inmate Calling Services NPRM closed on 
April 22. We are actively reviewing the record and considering next 
steps.

    Question 11. The Commission has suspended the media ownership 
proceeding, and it has not yet moved ahead on the long-awaited studies 
considering the information needs of communities, which implement 
Congress' directive in Section 257 of the Communications Act. The civil 
rights community is anxiously awaiting these studies. When can we 
expect to see the planned framework for these studies and when will 
they produce policy recommendations suitable for Commission action?
    Answer. Our Office of Communications Business Opportunities (OCBO) 
continues to review the state of communications and media markets as it 
coordinates the Commission's Section 257 Report to Congress. As part of 
this process, in 2012, we commissioned a review conducted under the 
direction of The University of Southern California Annenberg School for 
Communication and Journalism, of the existing literature analyzing the 
critical information needs of the American public.
    The Annenberg report was submitted to the Commission in July 2012. 
Following the release of the literature review, and to assist 
implementation of its recommendations, OCBO retained an independent 
contractor to design a research model to examine how media ecologies 
function; how critical information is made available in various media 
ecologies; how individuals construct their own media ecologies to meet 
their critical information needs; and what barriers exist in our media 
ecologies to providing and accessing this information.
    The work on the research model was recently completed and delivered 
to the Commission. The research model is currently on the Commission's 
website and remains open for public comment.

    Question 12. I was very pleased to see that the Commission finally 
finished implementing the Local Community Radio Act of 2010 and that it 
has set an October 2013 application date for new stations.
    Is the Commission on track to begin accepting applications in 
October?
    What else is the Commission doing to ensure that as many 
organizations as possible are able to take advantage of this 
opportunity?
    Answer. Commission staff continues to work diligently to process 
the pending FM translator applications in advance of an LPFM window 
currently anticipated in October of this year.
    The Commission has created new tools for entities interested in the 
LPFM service. For example, we released a new LPFM Channel Finder that 
searches the FCC database for available LPFM channels at specific 
locations. We also held a Public Forum regarding the new rules adopted 
under the LCRA. Our webpage provides detailed information on LPFM 
service, and the public will be provided notice well in advance of a 
filing window opening.

    Question 13. A number of private entrepreneurs are in the process 
of purchasing television stations that will be eligible to participate 
in the spectrum auction. There have been anecdotal reports that a 
number of these stations are currently contributing unique perspectives 
or niche programming not available anywhere else. Community groups are 
concerned that the purchase of these stations might harm the already-
dismal media ownership diversity levels.
    Has the Commission analyzed the current market impact of these 
transactions on media ownership diversity?
    What is the Commission considering as options to minimize the 
potentially devastating impact of these transactions on diversity?
    Answer. The Incentive Auction NPRM specifically seeks comment on 
measures that can be taken outside of the media ownership rules context 
to address any impact on diversity as a result of an incentive auction. 
Specifically, those measures could include encouraging multicasting or 
other distribution methods that could ensure continued access to 
minority-oriented or niche programming. In addition, the Commission 
continues to evaluate other ways to help increase minority and female 
ownership of broadcast stations.

    Question 14. On November 30, 2012, I along with eight of my 
colleagues sent a letter urging you not to relax the Commission's 
cross-ownership rules without responding to our concerns about the low 
levels of female and minority ownership of broadcast radio and 
television stations. In February, the Commission announced that it 
would be delaying its vote on the new rules as it awaits the results of 
a study by the Minority Media and Telecommunications Council regarding 
the effects of cross-ownership rules on minority ownership and 
newsgathering.
    Given the fact that MMTC's study is to be conducted by a broadcast 
industry analyst who is backed by the newspaper and broadcast industry 
associations and has publicly supported a relaxation of the cross-
ownership rules, do you believe the study represents an independent and 
impartial analysis of the impact of cross ownership on minority owners?
    Do you believe the study's methodology will provide the kind of 
analysis required by the Third Circuit Court of Appeals when it ordered 
the Commission to provide better justification for proposed diversity 
efforts?
    Does the Commission believe that radio contributes to viewpoint 
diversity?
    If the Commission were to conclude that radio does not contribute 
to diversity, how would that decision undermine future efforts to 
ensure that radio ownership is as diverse as the country it serves?
    Answer. We believe that the study proposed by MMTC will augment the 
record in the pending media ownership quadrennial review proceeding. 
The Commission will review the MMTC study, including its methodology, 
when it is submitted and take appropriate action at that time based on 
all of the evidence in the record.
    While it is true that recent research shows that most radio 
stations do not produce significant amounts of local news and that most 
consumers do not rely on radio stations as their primary source of 
local news, the Commission has held that certain radio ownership limits 
are necessary to promote viewpoint diversity ``by ensuring a sufficient 
number of independent radio voices and by preserving a market structure 
that facilitates and encourages new entry into the local media 
market.'' 2006 Quadrennial Review Order, 23 FCC Rcd at 2077,  127 
(citing 2002 Biennial Review Order, 18 FCC Rcd at 13739,  305-06).

    Question 15. The Commission has acknowledged that rural consumers 
are experiencing significant problems receiving long distance or 
wireless calls on their landline telephones. The problem appears to be 
attributable to the use of IP-based least-cost routing providers. What 
does the Commission plan to do to ensure that such interconnection and 
reliability problems do not become more prevalent as our Nation's 
telephone networks transition to wireless and IP-based services?
    Answer. First, public safety and consumer protection are core 
principles guiding the work of the FCC's Technology Transitions Policy 
Task Force on the migration of communications networks and services. 
Ensuring the basic ability of all Americans to reliably receive phone 
calls is a critical consideration in this effort.
    In addition, actions in the USF/ICC Transformation Order are aimed 
at ensuring reliable communications, including transitioning from old 
systems of intercarrier compensation to ``bill and keep'' (which would 
largely eliminate incentives for practices that undermine the 
reliability of rural service) and an express prohibition on call 
blocking.
    The Commission has also created a Rural Call Completion Task Force 
to provide intra-agency coordination and a dedicated process for rural 
carriers and consumers to report problems.

    Question 16. In light of the recent complaint filed in Federal 
court by VoIP providers claiming that the Commission lacks authority 
under the Communications Act to apply the no-blocking rule to VoIP 
calls, is additional authority needed from Congress to address the 
rural call completion problem?
    Answer. The Commission currently has authority to apply its ban on 
call blocking and other rules to address the rural call completion 
problem on VoIP services as appropriate. The Commission generally has 
not yet decided whether VoIP services that are exchanged with local 
exchange carriers over the public switched telephone network should be 
classified as ``telecommunications services'' or ``information 
services'' under the Communications Act.
    If the Commission ultimately determines that such VoIP services are 
telecommunications services, it would have authority to ban call 
blocking and practices that result in the failure to complete calls to 
rural areas as ``unjust and unreasonable practice[s]'' under Section 
201(b) of the Communications Act, in addition to other possible sources 
of authority.
    If the Commission ultimately determines that such VoIP services are 
information services, it still would have authority under its Title I 
jurisdiction to adopt rules reasonably ancillary to the effective 
performance of its statutorily mandated responsibilities, such as 
enforcing a prohibition on call blocking and related practices by 
carriers.
    The Commission has a pending Notice of Proposed Rulemaking seeking 
comment on these issues, and the resulting record will inform what 
additional steps it is appropriate for the Commission to take in this 
regard.

    Question 17. More than half of U.S. broadband subscribers are 
subject to some form of bandwidth cap or usage-based pricing. Experts 
have pointed out that broadband caps are inefficient for addressing 
network congestion and may, instead, have anticompetitive effects. What 
does the Commission plan to do to ensure that caps do not undermine 
access to affordable, high-speed broadband?
    Answer. The provisions of the Open Internet order require 
transparency in carrier pricing of broadband service. Business model 
experimentation can help consumers, in particular providing lower 
priced options to low volume users.
    At the same time, new business models and new services by broadband 
providers should not come at the expense of competition, including from 
over-the-top providers, or at the expense of increases in broadband 
speed and monthly capacity. We will continue to monitor this space.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Bill Nelson to 
                        Hon. Julius Genachowski
Online Public File
    Question 1. As we discussed during the hearing, top broadcast 
stations in the largest of markets are now required to put their public 
files, which includes political ad information, on the Internet. Is 
there a policy or statutory rationale for not requiring the same 
practice from other multichannel video programming distributors that 
maintain similar files?
    Answer. Currently all television broadcast stations are required to 
place substantially all public file contents online, with the exception 
of political files. In addition, television stations affiliated with 
the top four networks (ABC, CBS, Fox and NBC) in the top 50 Nielsen 
markets are required to place their political files online. All other 
broadcast television stations will transition their political files 
online by July 1, 2013.
    The Commission limited the online disclosure requirement to 
broadcast television stations because the proceeding at issue grew out 
of the digital transition, which had addressed only broadcast TV, and 
not radio or MVPDs, and extending the requirements beyond TV stations 
was not possible on the existing record.
    The Commission also noted that limiting applicability at the outset 
would help ease implementation and allow for a smoother transition.
NG911
    Question 2. The FCC has stated that one of its objectives is to 
ensure that any NG911 solution ultimately includes the ability of cell 
phone users to transmit video and photos to 911 call centers in real 
time during a public safety or law enforcement event (in addition to 
voice and text). However by most estimates, availability of such 
capability (photos and video, or MMES--multimedia emergency services) 
in a pure IP NG911 environment, is at least 3-10 years away, given the 
cost and development required.
    If the technology already exists today, to deploy video and photos 
in a hybrid SMS/IP solution, that could be deployed now, on existing 
analog or digital PSAP (911 call center) infrastructure, and that 
technology would be compatible with any future upgraded IP NG911 
system, what can the FCC do to help advance such solutions so that they 
are available to all Americans?
    Answer. The FCC is taking a number of steps to advance NG911 and to 
promote a variety of technological solutions that will enhance access 
by public safety to cutting edge technology. For example, as a part of 
the transition to NG911, the Commission has proposed to require 
carriers to provide text-to-911 service as an essential first step. The 
four largest wireless providers (AT&T, Verizon Wireless, Sprint Nextel 
and T-Mobile) have already voluntarily committed to provide text-to-911 
service to public safety answering points capable of receiving texts by 
May 15, 2014. The Commission has proposed to require other carriers and 
certain interconnected text messaging providers to do the same.
    Earlier this month the Commission imposed an obligation on wireless 
carriers and certain over the top interconnected text messaging 
providers to supply a ``bounce back'' message to consumers that attempt 
to send a text to 911 where the service is not supported. This ``bounce 
back'' message service must be implemented no later than September 30, 
2013.
    The Commission is also examining ways to secure the current and 
future NG911 infrastructure, and recently adopted a Notice of Proposed 
Rulemaking to examine vulnerabilities in the 911 system. This is a part 
of the Commission's focus on infrastructure reliability and resiliency 
arising out of the communications issues that followed the mid-Atlantic 
derecho and Superstorm Sandy.
    While the Commission can impose requirements on those within our 
jurisdiction, NG911 will also require the commitment and investment 
from a variety of stakeholders outside of the Commission's purview. 
Carriers, manufacturers, application developers, and state and local 
governments must collaborate to ensure the transition is timely, cost-
effective and meets the needs of both public safety and consumers. To 
that end, Congress directed the Commission to submit recommendations on 
the promotion of NG911, which were submitted earlier this year. The 
Commission's report included recommendations that would provide 
incentives for each of these stakeholder segments to participate and 
promote NG911 deployment, including the provision of needed funding to 
state and local authorities.
600 MHz Band Incentive Auction
    Question 3. Under the Middle Class Tax Relief and Job Creation Act 
of 2012, Congress directed that you only have one chance at this 
broadcast incentive auction. Although the market will determine how 
much spectrum will be repurposed, it is the Commission that will come 
up with a mark and a band plan prior to the auction's start. Will you 
seek the most amount of spectrum you can reasonably identify for 
commercial use, and at a minimum, to the 120 MHz called for by the 
National Broadband Plan?
    Answer. The Commission's central goal is to repurpose the maximum 
amount of spectrum for flexible licensed and unlicensed use in order to 
unleash investment and innovation, benefit consumers, drive economic 
growth, and enhance our global competitiveness, while at the same time 
enabling a healthy, diverse broadcast television industry.
1755-1780 MHz & Federal Spectrum
    Question 4. The March 2012 NTIA Report on the potential for 
clearing and reallocation of the 1755-1850 MHz band indicates that full 
relocation of government users may take up to 10 years and cost some 
$18 billion. I understand these projections were provided by the 
affected Federal spectrum users.
    Is the FCC working with NTIA to assess and scrutinize these 
projections to confirm the accuracy of these projections? Are these 
timeframes consistent with major relocation efforts? What can the FCC 
do to gain a better understanding of the cost to relocate Federal 
spectrum users and to tighten the timeframes for vacating the band?
    Answer. The Commission continues to work with NTIA and other 
stakeholders, including the Department of Defense, to free up spectrum 
for commercial use, consistent with the President's goals, while also 
enabling vital government operations to continue. The process requires 
complex technical analysis before any decisions are made. Commission 
staff has been working with our counterparts at NTIA and DoD to help 
facilitate sharing of information with industry stakeholders in order 
to perform that technical analysis. We are hopeful that analysis of the 
1755 MHz band can be completed in a time-frame that would allow it to 
be paired with the 2155 MHz band for auction.
USF
    Question 5. The FCC's National Broadband Plan Goal #4 said that 
anchor institutions in all communities should have high-capacity 1 
Gigabit per second connections by the year 2020. Many schools, 
libraries, health clinics and other anchor institutions are straining 
to obtain affordable, high-capacity broadband connections to keep up 
with the growing demand for Internet-based services. What actions are 
planned by the agency to promote high-speed broadband for anchor 
institutions and to make these services affordable?
    Answer. The Commission has taken several steps to promote high-
speed broadband for anchor institutions:

   Through the Commission's Broadband Acceleration Initiative, 
        we have expanded the reach of robust, affordable broadband by 
        streamlining access to utility poles and improving policies for 
        wireless facilities siting. We also have initiated a proceeding 
        to examine whether federal, Tribal, state, and local government 
        policies for access to rights of way could be improved, and 
        have worked closely with other Federal agencies to implement 
        Executive Order 13616 and streamline access to Federal land and 
        buildings to speed broadband deployment.

   The 2012 Healthcare Connect Order aims to increase access to 
        broadband and broadband networks for health care providers, 
        especially those serving rural areas. Eligible anchor 
        institutions include: public/not-for-profit hospitals, rural 
        health clinics, community health centers, health centers 
        serving migrants, community mental health centers, local health 
        departments or agencies, post-secondary educational 
        institutions/teaching hospitals/medical schools, or a 
        consortium of the above.

   The 2011 USF/ICC Transformation Order adopts performance 
        goals to ensure the availability of broadband and voice service 
        to homes, businesses, and community anchor institutions. To 
        that end, the Order requires funding recipients to identify and 
        report on the community anchor institutions that newly gain 
        access to fixed broadband service as a result of the funding. 
        The Commission also expects funding recipients to engage with 
        community anchor institutions in the network planning stages 
        with respect to the deployment of supported networks.

   The Special Access data collection order balances the burden 
        and need for necessary data for an annual $12-$18 billion 
        market. Getting these rules right is critical to competition 
        and providing broadband access for small businesses.

   The 2010 E-Rate Reform Order makes it easier for schools and 
        libraries to obtain highest speeds for the lowest prices by 
        increasing their options, streamlining application process for 
        schools and libraries, and strengthening protections against 
        fraud and abuse.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to 
                        Hon. Julius Genachowski
    Question 1. New Jersey's only high power television station, WWOR, 
is required to serve the unique needs of New Jersey. But WWOR has 
largely failed to do so. The FCC could place additional conditions on 
WWOR's license, which expired in 2007, to better ensure local New 
Jersey coverage. But the Commission has not acted on that application 
for six years now. When can we expect the FCC to make a decision on 
WWOR's license renewal application?
    Answer. The renewal application is pending as the staff works 
through the various issues presented in Petitions to Deny renewal, as 
well as a separate misrepresentation issue related to additional 
information submitted under the Commission's ex parte rules. There is 
no specific time frame for action on the renewal.

    Question 2. As you know, I am concerned about allegations of 
misconduct and dishonesty by News Corporation in its phone hacking and 
bribery allegations overseas, and in its WWOR renewal application. 
Despite these serious allegations, there has been no indication that 
the FCC is taking seriously its duty to ensure that those entrusted 
with serving the public interest are deserving of broadcast licenses. 
What has the FCC done to demonstrate that it takes reviews of the 
character of its broadcast license holders seriously?
    Answer. The Commission takes all character issues seriously when 
they are presented--typically through complaints--such as indecent 
programming complaints or as Petitions to Deny renewal or license 
transfer applications. If a party raises a character issue, the 
application is immediately placed on hold and an investigation is 
conducted.

    Question 3. Many railroads--particularly commuter railroads--are 
having difficulty meeting the 2015 requirement to install Positive 
Train Control because of a lack of available spectrum. With the 2015 
deadline looming, what steps is the FCC taking to accommodate PTC 
implementation?
    Answer. The FCC staff is working closely with industry 
stakeholders, the National Transportation Safety Board, and the Federal 
Railroad Administration to address the spectrum needs of the commuter 
rails. As you may know, the FCC faces challenges in providing spectrum 
for PTC because the Rail Safety Improvement Act of 2008 did not 
designate spectrum for PTC or provide funding to rails for purposes of 
acquire spectrum to implement PTC. However, the staff is actively 
working with key stakeholders to help negotiate spectrum needs on the 
secondary market and have granted waivers of technical, construction, 
and other rules to enable timely PTC deployment. At staff's request, 
PTC-220, a consortium of the largest U.S. freight railroads which hold 
substantial nationwide spectrum, is working closely with many commuter 
rails to meet their PTC spectrum needs.

    Question 4. Nineteen states currently restrict local governments' 
ability to offer broadband, even in areas where companies won't make it 
available or affordable. I have previously introduced bills that would 
prevent states from restricting municipal broadband, and I am 
considering reintroducing this legislation. Do you agree that states 
should not be permitted to restrict municipalities from offering 
broadband to their residents?
    Answer. High-speed broadband is vitally important to our global 
competitiveness and the continued growth of our economy, and we must 
keep pushing for faster speeds and greater capacity through new 
investments in broadband networks.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Claire McCaskill to 
                        Hon. Julius Genachowski
    Question 1. Chairman Genachowski and I have both written to the 
Federal Aviation Administration (FAA) encouraging the agency to revise 
its rules to allow for the expanded use of electronic devices during 
flight. The FAA has established an Aviation Rulemaking Committee (ARC) 
to look at possible changes to the rules, and the FCC has a 
representative on that committee, which will make recommendations to 
the FAA Administrator this summer. Given Chairman Genachowski's stated 
position on the issue, can I trust that you will be directing the FCC's 
representative on the ARC to convey the opinion of the Commission that 
the rules should be changed and work to aggressively push the FAA to do 
so?
    Answer. The Commission's representative is actively participating 
in the work of the FAA Aviation Rulemaking Committee examining the 
issue. The committee includes representatives from the various 
stakeholders, including aircraft manufacturers, pilots, flight 
attendants, consumer device manufacturers and various other 
organizations with expertise in this area. The committee is conducting 
a thorough examination of the issues, is reviewing all relevant data 
and plans to make its recommendations to the FAA in late summer. We 
will continue to work closely with the FAA to develop common sense 
actions to allow for the expanded use of electronic devices during 
flight.

    Question 2. Although the FCC's reforms to the Universal Service 
Fund's (USF) Lifeline program through its February 2012 order were much 
needed, and attempted to address duplicative Lifeline support, 
ineligibility, deceptive marketing and other concerns raised in my 
December 2011 letter to you on this topic, the reforms appear to have 
had little effect in limiting the rapid growth of the program.
    While I commend the Commission for its attempt to rein in the rapid 
growth of the Lifeline program and address the problems you inherited 
when the program was expanded to include wireless providers without any 
additional safeguards to prevent waste, fraud and abuse, even with the 
reform order in place the Lifeline program grew by 26 percent ($445 
million) last year. What additional action is the Commission 
considering to address waste, fraud and abuse in the Lifeline program?

    Question 2a. Specifically, would the Commission consider suspending 
new enrollment in the program while the reforms continue to be 
implemented?
    Answer. The Commission's reforms have fundamentally altered the 
course of this program. In each of the past two quarters, Lifeline 
disbursements are down compared to the previous quarter. USAC projects 
another decrease in the third quarter. Disbursements have declined 
steadily from $185.1 million in December 2012 to $145.8 million in May 
of this year. Subscribership has steadily declined each month since 
reform took effect, dropping from 18.2 million subscribers in August 
2012 to 13.35 million in May 2013. The Commission exceeded its $200 
million savings target in 2012 and is on track to save $2 billion by 
the end of 2014. Certainly, the Commission is monitoring the effect of 
its reforms and, based on this, will determine whether additional 
reforms are necessary.

    Question 2b. Would the Commission consider capping the program?
    Answer. When the Commission adopted reforms in early 2012, it 
unanimously determined that a savings target was appropriate to 
determine the impact of the reforms. We exceeded the $200 million 
savings target in 2012, and are on track to save $2 billion by the end 
of 2014. We continue to monitor the impact of our reforms and determine 
whether additional reforms are necessary.

    Question 2c. We are quick in Washington to create new programs but 
what we don't do often enough is reevaluate those programs to make sure 
they're still needed. The FCC created the Lifeline program nearly 30 
years ago to make sure local phone service was still affordable for 
low-income Americans following the breakup of AT&T in 1984. Because 
technology has changed and competition has grown, basic 
telecommunications services are as affordable as ever. I am wondering 
if the Commission has recently looked at whether the Lifeline program 
is even still necessary, and if not if you would be willing to do so?
    Answer. In the 1996 Telecom Act, Congress codified into law the 
principle that ``consumers in all regions, including low-income 
consumers . . . should have access to telecommunications and 
information services.'' The Commission's Lifeline program implements 
that directive.
    In 2010, the National Broadband Plan recommended that the FCC work 
with states on Lifeline issues. Shortly thereafter, the FCC asked the 
Federal-State Joint Board on Universal Service (Joint Board) for input 
on reforming the Lifeline program. Building on recommendations from the 
Joint Board, as well as recommendations in a 2010 report from the 
Government Accountability Office (GAO), in 2011 the FCC initiated 
reforms of the Lifeline program not only by commencing a comprehensive 
rulemaking, but also by implementing intermediate steps directed at 
reducing duplicative support, including targeted audits. The rulemaking 
ultimately culminated in a complete overhaul of the program in early 
2012 when the Commission approved the Lifeline Reform Order. Currently, 
the Commission is reviewing the impact of these reforms to gauge 
whether additional actions are warranted. As with all our universal 
service programs, it is critical that we regularly review Lifeline.

    Question 3. Last year Congress passed a Rubio-McCaskill resolution, 
S.Con.Res. 50, stating that Internet infrastructure and content should 
remain free from international regulation. Members of the U.S. 
delegation to the ITU conference in Dubai have indicated that Congress 
sending a clear message on the issue was helpful in their negotiations 
and that our efforts on this issue should continue, especially since 
those nations that want greater regulation of Internet infrastructure 
and content will certainly continue in their efforts.
    What more can Congress be doing to help promote a free and open 
Internet around the world?
    A handful of countries, such as China and Iran, want to heavily 
censor the Internet content people can access inside their borders, 
while many other nations are simply looking for ways to generate 
revenue from Internet traffic that moves through their country, much in 
the same way they have done with voice communications for years. Are 
there policies the United States can and should be promoting around the 
globe to help other nations develop their telecommunications 
infrastructure, unleash the economic activity that comes with it, and 
thus remove their desire to use global Internet traffic as a revenue 
source?
    Answer. Though the Department of State heads U.S. participation in 
international meetings, the Federal Communications Commission is an 
expert agency and member of U.S. delegations to many international 
telecommunications meetings. In that capacity, at the International 
Telecommunication Union's (ITU) World Conference on International 
Telecommunications (WCIT) in Dubai last December, we witnessed the 
benefit of strong bipartisan support from the U.S. Senate in the form 
of S.Con.Res. 50. Such unity of purpose going forward as the United 
States seeks to promote a free and open Internet will continue to be 
helpful.
    The discussions at the WCIT in Dubai highlighted the criticality of 
working with developing countries to highlight the benefits of the 
Internet and how to achieve those benefits. We are working with the 
U.S. State Department and other agencies to continue outreach efforts 
that focus on promoting an enabling environment for broadband 
development that creates opportunities for the private sector to invest 
in innovative technologies. For example, the United States has 
encouraged countries to adopt transparent policy and legal frameworks; 
open telecommunications markets to competition; adopt licensing and 
taxation reforms; establish transparent universal service programs to 
support telecommunications instead of subsidies from international 
services; and encourage the efficient and innovative use of spectrum 
for mobile broadband. We have and will continue to emphasize in our 
work with developing countries and others that regulations that seek to 
control revenue flows will hinder investment and impede broadband 
growth.
    The benefits of that outreach were evident at the ITU's recent 
World Telecommunications Policy Forum May 14-16, where consensus was 
quickly reached on non-binding opinions concerning Internet policy and 
governance issues. There are many additional opportunities over the 
next several months to advance these outreach efforts, including at the 
ITU's Global Symposium for Regulators in July, and bilateral meetings 
with individual countries.

    Question 4. The upcoming incentive auctions have been pitched to 
Congress as a market-based mechanism that would help put spectrum in 
the hands of those most capable of unleashing its economic potential. 
That was an appealing idea, and on that basis Congress authorized you 
to conduct them. Now there is some concern that the Commission is 
contemplating going beyond what will be freed up by the auctions and is 
considering repurposing or reallocating many more megahertz in rural 
areas just through repacking broadcasters and eliminating LPTV and 
translator service.
    Is your intention to deal only with what is freed up by auctions, 
or is your intention to reallocate as much spectrum from broadcasters 
to broadband providers as possible?
    Has the Commission studied the impact of reclaiming spectrum on 
LPTV and translator service, especially in more rural states that rely 
heavily on them to reach areas where no other service is available?
    Answer. The Commission is committed to running a market-driven 
process focused on providing opportunities for broadcasters in all 
markets to participate in the incentive auction. To this end, our goal 
is to match wireless demand with broadcaster supply as best we can, in 
both urban and rural markets. A successful auction will result in 
nationwide, contiguous blocks of spectrum for commercial wireless 
service while maintaining a vibrant broadcast industry. This newly 
available spectrum will enable significant economic growth and consumer 
benefits in all areas, urban and rural.
    Congress envisioned that full power and Class A TV stations that 
choose not to participate, or participate and do not have their bids 
accepted, may need to be repacked. Therefore, in the Spectrum Act, 
Congress provides relocation funding and requires the Commission to 
make reasonable efforts to preserve the coverage areas and populations 
served of such stations.
    Additionally, Congress chose not to provide special protection in 
the Spectrum Act for low power TV and TV translators, which are 
secondary services. However, we recognize the important services low 
power and TV translator stations provide, particularly in rural areas, 
and are seeking input on measures to ensure that their valued 
programming continues to reach viewers.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Amy Klobuchar to 
                        Hon. Julius Genachowski
    Question 1. The FCC released its Sixth Order of Reconsideration on 
USF Reform. I understand that this order made some near-term changes to 
the model-based caps on universal service support. However, there are 
still concerns being voiced, including by the Secretary of Agriculture.
    How are you responding to the concerns raised by the Secretary of 
Agriculture and others to ensure that companies can continue to make 
investments to build out future proof broadband networks with some 
reasonable understanding of what universal service support will or 
won't be available?
    Answer. Commission staff worked with RUS throughout the USF reform 
process to understand its concerns and to estimate the potential impact 
of different reform options on RUS borrowers. We recognize this has 
been a period of transition, but it was critical to reform a system 
that had become wasteful and inefficient and was focused on phone 
service, not broadband. We will continue to work with RUS as we 
complete our implementation of reforms.

    Question 2. Last year, Congress passed the Spectrum Act, 
authorizing the FCC to conduct the world's first-ever incentive 
auction. The Act specifically mentions that the FCC should coordinate 
with Canada and Mexico prior to the auction to protect broadcasters 
from interference in any repacking. I know that this Committee will 
continue to look into the implementation of the Spectrum Act as the FCC 
moves forward with designing the Spectrum Act, but it is important to 
lay the ground work and have clarity when it comes with our 
international neighbors. Has the Commission begun coordination with our 
Canadian and Mexican counterparts, if so, please comment on any of the 
discussions and their progress. Does the timeline for coordination 
align with the timeline for television repacking resulting from the 
auction?
    Answer. The Spectrum Act requires that the FCC coordinate with the 
Canadian and Mexican governments during the incentive auction 
proceeding, and the FCC and the State Department have been engaged in 
on-going discussions with our counterparts in the Canadian and Mexican 
telecommunications authorities relating to the auction.
    As is typical of open spectrum proceedings with cross-border 
implications, the United States and its Canadian and Mexican 
counterparts have established government-to-government working 
arrangements to help ensure optimal outcomes for all three countries. 
Historically, this process has resulted in mutually beneficial 
understandings on efficient, interference-free use of the spectrum in 
the U.S.-Canada and U.S.-Mexico border areas.
    The U.S.-Canada working arrangement has resulted in several 
teleconferences over the past several weeks. The Commission expects 
these consultations will ultimately lead to a better-designed and more 
successful incentive auction, and will create opportunities for greater 
spectrum efficiency and band harmonization across North America.

    Question 3. Last year in this committee, you came before us just 
after taking action on wireline cramming--a practice that has gone on 
too long and cost consumers billions of dollars. I recognize there are 
intricacies to the wireless industry that vary from wireline billing 
practices, but I strongly urge the Commission to take up the issue for 
wireless consumers sooner rather than later. Americans are moving to 
wireless at exponential rates. Consumers cannot afford to fall victim 
to crammers because the FCC does not act. Mr. Chairman, last year you 
committed to look into the wireless cramming problems, have you made 
any progress or additional findings?
    Answer. A pending Notice of Proposed Rulemaking seeks to obtain 
information on the scope of wireless cramming complaints. Commission 
staff is reviewing the record developed in that proceeding and the data 
we are receiving from complaints, as well as the trends in the number 
of wireless cramming complaints we are receiving.
    On April 18, the Commission held a Public Workshop with industry 
experts as well as consumer and state representatives, to help educate 
consumers protect themselves from both Bill Shock and Cramming. We plan 
to utilize the information obtained on the pending item and at the 
workshops to formulate potential next steps.
                                 ______
                                 
 Response to Written Questions Submitted by Hon. Richard Blumenthal to 
                        Hon. Julius Genachowski
Broadband Competition
    Question 1. In 2010 the FCC stated in the National Broadband Plan 
that, ``. . . there are reasons to be concerned about wireline 
broadband competition in the United States. Whether sufficient 
competition exists is unclear and, even if such competition presently 
exists, it is surely fragile.''
    The plan further stated that, ``To ensure that the right policies 
are put in place so that the broadband ecosystem benefits from 
meaningful competition as it evolves, it is important to have an 
ongoing, data-driven evaluation of the state of competition,'' and that 
``additional data are needed to more rigorously evaluate broadband 
competition.''
    The Plan specifically recommended the Commission undertake a number 
of reforms to data collection including:

  1.  ``[C]ollect broadband availability data at the census block 
        level, by provider, technology and offered speed.''

  2.  ``[C]ollect data on advertised prices, prices actually paid by 
        subscribers, plans, bundles and promotions of fixed and mobile 
        broadband services that have material penetration among users, 
        as well as their evolution over time, by provider and by 
        geographic area.'' The Plan stated that in particular, it ``is 
        crucial that the FCC track and compare the evolution of pricing 
        in areas where two service providers offer very high peak 
        speeds with pricing in areas where only one provider can offer 
        very high peak speeds.''

  3.  ``[C]ollect information related to switching barriers, such as 
        early termination fees and contract length.''

    The National Broadband Plan also recommended that the Commission 
establish a general policy of making the data it collects available to 
the public, including via the Internet in a broadband data depository.
    These recommendations reflect the comments of the Department of 
Justice, who told the Commission that it ``. . . should expand its 
efforts to include an assessment of the nature and extent of 
competition in each local broadband market.''
    Nearly two years after the National Broadband Plan was released, 
the Commission issued a Notice of Proposed Rulemaking (NPRM) that 
encapsulated many of these recommendations. The Commission has yet to 
act on this NPRM.
    Chairman Genachowski, Commissioners McDowell, Clyburn, Rosenworcel 
and Pai, do you agree with the National Broadband Plan's 
recommendations on the need to collect these additional broadband data? 
Do you think the Commission, policymakers and the public have the 
appropriate data to determine if the Commission's competition policies 
are, in the words of the Department of Justice, using the appropriate 
``policy levers . . . to produce superior outcomes,'' and if not, what 
additional data is needed?
    Chairman Genachowski, When will the Commission take action on the 
2011 Data NPRM, and will it result in the Commission collecting 
detailed pricing data, and more granular availability data at the 
census block level? When will the Commission make these data available 
to the public?
    Answer. Commission staff is working diligently to design a 
collection that ensures the FCC has the data it needs while minimizing 
the burden on industry and protecting sensitive data. We will update 
you as we move forward with these efforts.
Sports Blackouts
    Question 2. Over one year ago, I wrote the FCC and requested the 
agency allow public comment on a petition for rulemaking asking the 
Commission to reexamine the Sports Blackout Rule. This rule is nearly 
forty years old and, along with other Federal rules and league 
policies, is one of many obstacles making it unreasonably difficult for 
fans to watch their favorite teams play.
    I thank the Commission for taking my letter seriously and opening a 
Notice of Inquiry (NOI) to solicit comments from the public and other 
stakeholders. However, that docket was opened in January of 2012 and 
the Commission has yet to take any further action.
    The response in the proceeding was overwhelming. The NOI garnered 
thousands of comments from consumers impacted by local sports 
blackouts, including elderly and disabled sports fans unable to attend 
live games. The NFL's revised local blackout policy seems to have done 
little in the last regular season to help the most heavily impacted 
markets. Commenters have proposed several options, including preserving 
the status quo, eliminating the Sports Blackout Rule altogether, or 
adopting a sunset period requiring a public interest showing to renew 
the rule.
    Chairman Genachowski, given this robust record, when will the 
Commission issue a Notice of Proposed Rulemaking framing these options 
and seeking public input?
    Chairman Genachowski, Commissioners McDowell, Clyburn, Rosenworcel 
and Pai, what else can the Commission do to help fans unable to watch 
their favorite teams compete?
    Answer. The Sports Blackout NOI proceeding remains pending as the 
Bureau staff reviews the record. According to the record, only 6 
percent of the 2011 NFL season was blacked out, and most of the 
blackouts were centered in 4 markets--Buffalo, Tampa Bay, San Diego and 
Cincinnati.
    We recognize that this is a topic that is important to sports fans, 
but note that the Sports Blackout rules essentially give effect to the 
existing system of private contractual agreements between the various 
sports leagues and their distributor partners. The underlying issue 
remains primarily a copyright issue because the NFL has the right to 
negotiate private contractual agreements for carriage rights with the 
various distributors. Those private agreements typically include 
restrictions on how the content is distributed (i.e., blackout 
provisions). Thus, although we are monitoring this situation closely, 
the repeal of the Sports Blackout rule without some restrictions on 
these private agreements might have little impact on the blackout of 
sporting events.
Incentive Auctions
    Question 3. In September last year, I joined other members of the 
Connecticut Congressional delegation in writing the FCC to inquire 
about the process being undertaken in its incentive auction rulemaking. 
My concern is that when the FCC moves stations, as it will need to do 
to facilitate this auction, it could cause disruptions to Connecticut 
constituents relying on free over-the-air broadcasts for news and 
information. As we wrote in our letter, we believe that any plan that 
the commission adopts should not negatively impact the ability of our 
constituents to receive free local programming via free over the air 
service.
    In you written response, the Commission committed to making the 
auction process, ``as transparent and easy-to-understand as possible.'' 
Further the FCC stated, ``the Commission established a program which is 
designed specifically to educate and solicit substantive input from 
broadcasters on all aspects of the incentive auction.''
    Chairman Genachowski, in addition to generally educating 
broadcasters, what additional steps are being taken to minimize the 
potential for consumer harm during the repacking process?
    Answer. The Spectrum Act requires the Commission to make all 
reasonable efforts to preserve coverage area and population served when 
repacking stations in connection with an incentive auction. The 
Incentive Auction Notice of Proposed Rulemaking sought comment on the 
best approaches to achieve that goal. As you note, the Commission 
developed the Learn Everything About Reverse-Auctions Now (LEARN) 
program in order to help educate stakeholders, particularly 
broadcasters. We also recognized in the NPRM that consumer outreach may 
be necessary in order to inform the public about possible changes and 
what they would need to do to continue to receive the over-the-air 
signals--the NPRM sought comment on how and when to do that. The NPRM 
also sought input on how the post-auction transition process can be 
managed to minimize any disruption to viewers, and the staff is 
evaluating the input received.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. William M. Cowan to 
                        Hon. Julius Genachowski
Incentive Auctions and Innovation in Unlicensed Spectrum
    Question 1. Chairman Genachowski, I understand that you recently 
visited MIT to discuss the future of innovation in communications. Can 
you give us a sense of the potential for innovation and economic growth 
that making space available for unlicensed use in the broadcast bands 
would generate?
    Answer. Both licensed and unlicensed spectrum have contributed to 
an explosion of new services and applications and increasing mobile 
broadband speeds, and both will be essential parts of the landscape in 
the future. The Incentive Auction NPRM proposals seek a balanced 
approach to repurposing the 600 MHz band for broadband. Freeing up 
additional spectrum--both licensed and unlicensed--is key to 
maintaining the United States' global leadership in mobile.
    The Commission proposed clearing and auctioning as much spectrum as 
possible for licensed use, adding spectrum for commercial providers and 
substantial revenues for FirstNet and the Treasury. The Commission also 
proposed making a significant amount of spectrum available for 
unlicensed use, creating an open platform for innovation to drive 
economic growth. Unlicensed spectrum also has a proven record of 
driving innovation, investment, and economic growth--hundreds of 
billions of dollars of value creation for our economy and consumers. 
Opening up opportunities for unlicensed spectrum in the 600 MHz band 
promises to increase these benefits, unleashing important innovations 
like ``Super Wi-Fi,'' next-generation Smart Grid monitoring, ``Smart 
City'' monitoring, enhanced distance learning, and services and 
applications that innovators have not even thought of yet.

    Question 2. I understand the pressure on wireless companies to 
expand their spectrum holdings because of the demand from their 
customers for video and other high bandwidth services but aren't they 
using Wi Fi today to offload some of their traffic and couldn't this 
create another mechanism to help them become more spectrum efficient?
    Answer. Today, approximately one-third of mobile data traffic is 
offloaded to Wi-Fi, as carriers increasingly develop new methods to 
manage capacity on their networks.
    However, unlicensed spectrum is not a substitute for exclusive use 
spectrum to meet the growing demands of consumers' growing reliance on 
smart phones, tablets and other devices that use more bandwidth.
    The Incentive Auction NPRM proposals seek a balanced approach to 
repurposing the 600 MHz band for broadband to free up additional 
spectrum--both licensed and unlicensed.
Universal Service Fund
    Question 3. Chairman Genachowski and Commissioner McDowell, my 
state contributes dramatically more to the USF program than we receive, 
which is particularly problematic because so much of western 
Massachusetts lacks the wired broadband and wireless infrastructure 
that many USF recipient states enjoy. How will the reform of the USF 
program ensure that states like Massachusetts get a fair share of the 
subsidies the fund releases and in turn makes communications in places 
like the Berkshires more reliable?
    Answer. According to the most recent data from the State Broadband 
Initiative, 15 million Americans still do not have access to broadband. 
While we are making progress, more remains to be done. The USF/ICC 
Transformation Order is generating hundreds of millions of dollars in 
savings that are being redirected to preserve and extend availability 
of voice and broadband in areas across the country.
    Commission staff continues to make progress in developing a 
forward-looking cost model for Connect America Phase II that will be 
used to estimate support amounts in price cap areas. The next steps are 
to finalize the inputs for the model and address other policy issues 
concerning the implementation of Phase II.

    Question 4. Chairman Genachowski, the demand for the E-rate program 
far exceeds the available reimbursements. And there are some who fear 
that adding more services like digital literacy training or e-textbooks 
to the E-Rate's allowable use of funds will only deplete the already 
oversubscribed program funds. Is there a way to avoid that outcome and 
ensure that the focus of the funds remain on the poorest schools and 
districts while we simultaneously pursue the distribution of more 
advanced services?
    Answer. The E-Rate program has achieved remarkable success--97 
percent of American schools and nearly all public libraries now have 
basic Internet access.
    We are at a moment of great opportunity for digital learning. 
Broadband and digital tools have game-changing potential for education. 
Our significant E-Rate reforms in 2010 were a strong start to lower 
costs and expand broadband access to schools and libraries.
    As with all our universal service programs, it is critical that we 
regularly review E-Rate to ensure it is keeping pace with needs, 
operating efficiently and targeting support effectively.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Roger F. Wicker to 
                        Hon. Julius Genachowski
    Question 1. Mr. Chairman, during your tenure you described 
incentive auctions to Congress as a ``market-based'' mechanism that 
would help put spectrum in the hands of those who valued it most. That 
was an appealing idea, and Congress ultimately authorized the FCC to 
conduct incentive auctions. I have some concerns, however, that the 
Commission is contemplating going beyond just recovering spectrum from 
market-based incentive auctions, but is considering repurposing or 
``taking'' many more megahertz in rural areas just through the 
repacking of broadcasters. This of course could eliminate low power 
television and translator services. As you know, low power and 
translators connect viewers to their television services particularly 
in rural areas across the country. We are talking about wide open 
places where viewers have few or no other viewing options. Will you 
commit to sticking to your original advocacy of keeping this process a 
market-based one that does not take more from rural America than from 
urban America?
    Answer. The Commission is committed to running a market-driven 
process focused on providing opportunities for broadcasters in all 
markets to participate in the incentive auction. A successful auction 
will result in nationwide, contiguous blocks of spectrum for commercial 
wireless service while maintaining a vibrant broadcast industry. This 
newly available spectrum will enable significant economic growth and 
consumer benefits in all areas, urban and rural.
    Congress envisioned that full power and Class A TV stations that 
choose not to participate, or participate and do not have their bids 
accepted, may need to be repacked. Therefore, in the Spectrum Act, 
Congress provides relocation funding and requires the Commission to 
make reasonable efforts to preserve the coverage areas and populations 
served of such stations.
    Additionally, Congress chose not to provide special protection in 
the Spectrum Act for low power TV and TV translators, which are 
secondary services. However, we recognize the important service low 
power and TV translator stations provide, particularly in rural areas, 
and are seeking comment on measures to ensure their programming 
continues to reach viewers.

    Question 2. The Department of Justice wrote to you on January 28 
and asked the FCC to defer action on the proposed acquisition of Sprint 
by SoftBank, until they and other law enforcement agencies had an 
opportunity to review the national security concerns they had with this 
transaction. Enclosed is a copy of the letter. As far as I know, the 
FCC never officially responded. Furthermore, I understand the FCC has 
no plans to pause its own review of the transaction and that the 180 
day clock would continue to run.
    Have you responded to the Department of Justice letter from January 
28, 2013? If so, please send me a copy of the response.
    If you have not responded, why not?
    Per the DOJ's requests, will the FCC defer action on the Softbank/
Sprint matter until the DOJ referenced review and the Committee on 
Foreign Investment in the United States (CFIUS) review are complete?
    Answer. As is our standard practice, the FCC is coordinating with 
an interagency group comprised of the Department of Justice (DOJ), the 
Federal Bureau of Investigation (FBI), and the Committee on Foreign 
Investment in the United States (CFIUS) that normally reviews foreign 
investments in communications infrastructure and intends to address any 
concerns that result from that process in our order. Because concerns 
resulting from the interagency group review and related issues are 
addressed in our orders, we do not typically respond to the standard 
DOJ letters requesting time to review these matters.

    Question 3. What does the Commission plan to do to ensure that the 
unspent CAF 1 dollars it allocated to support the deployment of rural 
broadband services are used (soon) for that purpose? Can you tell me 
exactly when the commission plans to wrap this question up? The market, 
the parties involved in these disputes deserve certainty.
    Answer. Last week, I circulated an order to my colleagues that 
would make an additional $300 million in Connect America Phase I 
funding available to extend broadband to unserved areas in price cap 
territories. I hope the Commission will act on this draft order soon.

    Question 4. I am concerned about the manner in which the FCC has 
handled petitions seeking agency action. I understand that, in 2012, 
FCC staff dismissed a Petition for Declaratory Ruling filed by Anda, 
Inc., a generic pharmaceutical distributor, that had stalled for nearly 
17 months without any agency action. The petitioner's request for full 
Commission review of that order is now almost a year old, and Chairman 
Genachowski told House members at a recent Energy and Commerce 
Committee hearing that he ``anticipate[s]'' that an order resolving 
that request would be ``circulated . . . in the next few months.''
    A more concrete commitment is warranted at this stage, particularly 
given the FCC's claim in a recent appellate proceeding that Anda and 
similarly situated parties must present their arguments to the 
Commission, rather than directly to courts. Will the FCC commit to 
circulating an order resolving this matter by no later than April 30, 
2013?
    Answer. On May 2, 2012, the Commission's Consumer & Governmental 
Affairs Bureau issued an order dismissing a Petition filed by Anda, 
Inc. that requested a declaratory ruling clarifying the statutory basis 
for a Commission rule on fax advertisements. The Administrative 
Procedure Act provides that an agency, in its sound discretion, may 
issue a declaratory order to terminate a controversy or remove 
uncertainty, but the Bureau found that the Petition did not identify 
any controversy to terminate or uncertainty to remove. The Bureau also 
concluded that, to the extent that the Petition challenged the 
Commission's authority to issue the rule itself, the challenge was 
time-barred, because under the Communications Act and the Commission's 
procedural rules, requests for reconsideration of this rule were due in 
June 2006. The Bureau also observed that the Commission's order 
adopting the rule had specifically tied the opt-out notice requirement 
to the purposes of section 227 of the Act.
    It is not uncommon for a Bureau to dismiss a petition for 
declaratory ruling when, in the opinion of the Bureau, no controversy 
or uncertainty has been identified. Anda has filed an Application for 
Review of the Bureau order to the full Commission, which is currently 
under review. Staff continues to work diligently on this matter, 
including a draft order resolving the Application for Review that will 
be circulated to the other Commissioners for their consideration.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Roy Blunt to 
                        Hon. Julius Genachowski
    Question 1. At a hearing in front of the House Energy and Commerce 
Committee last year, you stated your commitment to continuing the FCC's 
longstanding, hands-off approach to fiber and Internet Protocol 
Networks. In Kansas City, Missouri and Kansas City, Kansas, a new-
market entrant to the broadband market is building a fiber network that 
is over 100 times faster than standard broadband. Other competitors in 
these markets are working to upgrade their networks and increase their 
broadband speeds as well. This is a prime example of private industry 
reacting to competitive forces in a dynamic marketplace and was 
possible because of the Commission's commitment not to intercede in the 
expansion of IP and fiber network build outs. Are you still committed 
to that maintaining the Commission's hands-off approach toward IP-based 
networks?
    Answer. Recent increases in broadband deployments and speeds have 
been driven by private investment and by policies that created and 
maintain the conditions necessary to enable competition.
    In response to the growth of IP networks, last December the 
Chairman formed the Technology Transitions Policy Task Force to provide 
recommendations to modernize the Commission's policies in order to 
empower and protect consumers, promote competition, and ensure network 
resiliency and reliability. The Task Force is focused on three key 
transitions: (1) TDM to IP, (2) copper to fiber, and (3) wireline to 
wireless; it is currently conducting a data-driven review and to 
develop recommendations. The Task Force builds on actions the 
Commission already taken to address technology transitions, including: 
overhauling the Universal Service Fund from voice to broadband; 
transforming the Intercarrier Compensation system; and advancing Next 
Generation 911 and direct access to numbering resources by VoIP 
providers.

    Question 2. Mr. Chairman, as part of the legislation which 
authorized the voluntary incentive auctions, Congress authorized a 
broadcaster relocation fund, specifically to compensate broadcasters 
who will not participate in the voluntary incentive auction but who 
will still be relocated, or ``repacked'' into different frequencies as 
a result of what we are all hoping will be a successful auction. The 
fund was authorized at $1.75 billion.
    Do you forecast this funding level being adequate for the repacking 
of the broadcasters who will not participate in the voluntary auction?
    Is the Commission treating the relocation funding level of $1.75 
billion as a cap on outlays for the moving of broadcasters?
    Are there any costs associated with moving broadcasters, such as 
new translators or power-increase requirements which you do not believe 
the fund will be used for compensation?
    Answer. The Commission will not know how many stations need to be 
repacked, or the ultimate cost of such repacking, until we conduct the 
incentive auction. For full power and Class A TV stations that must 
relocate due to the auction, the Spectrum Act provides $1.75 billion to 
``reimburse costs reasonably incurred'' by such stations. To ensure 
that broadcasters' costs and relocation needs are properly met, we are 
seeking comment on:

   Proposals to allow broadcasters to choose whether to receive 
        advance relocation funds based on estimated costs, or to 
        receive reimbursement for the actual costs incurred with 
        repacking.

   What ``reasonable'' relocation costs are, including whether 
        to allow for reimbursements for facility upgrades.

   How to prioritize reimbursements in the event that total 
        relocation reimbursements exceed $1.75 billion.

   Proposals to allow stations to seek a waiver of service 
        rules to provide more flexible use of its spectrum in lieu of 
        receiving reimbursement for relocating.

    We are studying the costs, impacts, and logistical challenges 
involved in the repacking. As always, we will carefully consider all 
comments that we receive before moving forward on implementing the 
auction.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Kelly Ayotte to 
                        Hon. Julius Genachowski
    Question 1. Chairman Genachowski, is the Pentagon giving you the 
information you need to help facilitate bringing spectrum to the market 
in a timely manner?
    Answer. The Commission continues to work with NTIA and other 
stakeholders, including the Department of Defense, to free up spectrum 
for commercial use, consistent with the President's goals, while also 
enabling vital government operations to continue.
    The process requires complex technical analysis before any 
decisions are made. Commission staff has been working with our 
counterparts at NTIA and DoD to help facilitate sharing of information 
with industry stakeholders in order to perform that technical analysis. 
We are hopeful that analysis of the 1755 MHz band can be completed in a 
time-frame that would allow it to be paired with the 2155 MHz band for 
auction.

    Question 2. Chairman Genachowski, The New Hampshire congressional 
delegation sent you a letter earlier this month regarding the spectrum 
incentive auction proceeding. The letter outlines our interest in 
preserving viewer access to local television during any reassigning of 
television channels as may be necessary through the auction process. 
Can you please give me an update on discussions that may already 
occurred or that will take place with Canadian officials on 
international coordination of television channel assignments? What 
assurances can you give me that there will be little or no 
interruptions moving forward?
    Answer. The Spectrum Act requires that the FCC coordinate with the 
Canadian and Mexican governments during the incentive auction 
proceeding, and the FCC and the State Department have been engaged in 
on-going discussions with our counterparts in the Canadian and Mexican 
telecommunications authorities relating to the auction.
    As is typical of open spectrum proceedings with cross-border 
implications, the United States and its Canadian and Mexican 
counterparts have established government-to-government working 
arrangements to help ensure optimal outcomes for all three countries. 
Historically, this process has resulted in mutually beneficial 
understandings on efficient, interference-free use of the spectrum in 
the U.S.-Canada and U.S.-Mexico border areas.
    The U.S.-Canada working arrangement has resulted in several 
teleconferences over the past several weeks. The Commission expects 
these consultations will ultimately lead to a better-designed and more 
successful incentive auction, and will create opportunities for greater 
spectrum efficiency and band harmonization across North America.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                        Hon. Julius Genachowski
    I appreciate the testimony and your candid answers during the 
hearing. I would like to thank you for your service on the Federal 
Communications Commission.

    Question 1. The hearing touched on many themes that I believe the 
Committee should look at including process reform, the looming 
transition to IP and the Spectrum auction. However, an opportunity for 
the Chairman and the Commissioners to share what they see ``over the 
hill'' was not discussed at length. I would like to provide you with an 
opportunity to share what you believe are some issues that may not have 
been discussed at the hearing.
    The spectrum auction is of the utmost importance. Is the Commission 
going to set a target date of 2014? What are the challenges with 
hitting this date?
    Answer. The incentive auction involves many complex policy and 
technical considerations, and Commission staff and world-renowned 
auction experts are hard at work on these issues. We issued a Notice of 
Proposed Rulemaking last fall that sought comment on proposals for the 
incentive auction and we have received more than 400 responses from 
stakeholders to date. Staff is currently reviewing those responses and 
continuing to receive input from outside parties to help develop final 
rules. We anticipate adopting an order in the incentive auction 
proceeding in 2013 and conducting that auction in 2014.

    Question 2. The Commission's spectrum incentive auction process has 
the potential for channel reassignment. Nevada has over 300 translators 
and low power TV stations, any repacking will put a significant burden 
on these stations. Is the FCC taking this into consideration? Can the 
Commission preserve viewer access to local channels and still hit the 
target of 2014 for the auction to take place?
    Answer. Congress chose not to provide special protection in the 
Spectrum Act for low power TV and TV translators, which are secondary 
services. However, we recognize the important service low power and TV 
translator stations provide, particularly in rural areas, and are 
seeking comment on measures to ensure their programming continues to 
reach viewers.

    Question 3. According to the National Broadband Plan wireless 
backhaul is ``critical to the deployment of wireless broadband and 
other wireless services,'' particularly ``when fiber is not proximate 
to a cell site.'' I understand that the existing wireless backhaul 
networks face a number of regulatory and technological constraints that 
limit their potential capacity. These independently-powerable services 
are also important to undergird FirstNet, the national first responder 
network. How is the FCC working to speed the deployment of wireless 
backhaul services in new frequency bands?
    Answer. In 2010, the Commission initiated a proceeding that has 
resulted in 650 MHz of additional spectrum, mostly in rural areas, 
being made available for wireless backhaul. Additionally, the 
Commission eliminated unnecessary restrictions and established build-
out requirements for certain microwave bands to accelerate the 
availability of this spectrum, which is used for wireless backhaul.

    Question 4. What is the current state of wireless backhaul 
deployment in the 24 and 39 GHz bands?
    Answer. To date, most wireless backhaul deployment has occurred in 
microwave bands lower than 24 or 39 GHz (for example, the 6 GHz, 11 
GHz, 18 GHz, and 23 GHz bands). IDT Spectrum (742 licenses) and 
Spectrum Holdings Technologies (199 licenses), have reported that they 
have met the build-out requirements for their licenses in the 39 GHz 
band. Fibertower, which held 103 out of 111 issued 24 GHz licenses and 
was the second largest licensee in the 39 GHz band with 634 licenses, 
built out only 48 of its 737 total licenses in the 24 and 39 GHz bands.

    Question 5. Has any company tried to develop new technology that is 
optimized for wireless backhaul in these new frequency bands?
    Answer. The licensees in the 24 and 39 GHz bands confirm that 
equipment is available for wireless backhaul.

    Question 6. The FCC has moved to reclaim wireless backhaul spectrum 
in the 24 and 39 GHz range from a number of wireless backhaul providers 
despite the providers request for additional time to complete their 
roll-out. If the FCC ultimately reclaims spectrum in the 24 and 39 GHz 
range, how long will it take, including the necessary legal 
proceedings, for a new wireless backhaul provider to build-out a 
backhaul service with the seized spectrum?

    Question 6a. In at least one case on Appeal to the Full FCC 
Commission, a significant wireless backhaul provider, from whom the FCC 
seized spectrum, has proposed an aggressive build-out plan that will 
have its wireless backhaul network up and running in 18 months. If the 
FCC were to prioritize the rollout of wireless backhaul services, would 
it be more expedient to grant an 18 month extension and allow a planned 
expansion to move forward or can the FCC clear the spectrum and find 
another company to build-out the necessary wireless backhaul in less 
than 18 months?

    Question 6b. Will the FCC work to ensure that it takes all 
appropriate actions, including reviewing prior staff-driven efforts 
intended to strip existing wireless backhaul providers of their 
spectrum, to speed the build-out of needed wireless backhaul services?
    Answers to Questions 6-6b. Only one licensee, Fibertower, failed to 
demonstrate compliance with the substantial service requirements for 94 
of its 24 GHz licenses and 595 of its 39 GHz licenses. The Wireless 
Telecommunications Bureau (Bureau) denied Fibertower's requests for an 
additional extension of time to demonstrate substantial service for 
these licenses, as well as its associated requests for waiver of the 
June 1, 2012 substantial service deadline.
    Based on these determinations, these licenses automatically 
terminated, by operation of Commission rule, as of June 1, 2012. The 
Bureau also denied similar requests for extensions in the LMDS band. 
None of the terminated licenses was being used to provide backhaul 
service.
    The Commission seeks to make spectrum in inventory available in an 
efficient and timely manner. As a general matter, once a licensee 
forfeits a license and it reverts back to inventory, the FCC can move 
directly to re-auction. With respect to the 24 GHz and 39 GHz licensees 
that automatically terminated, a bankruptcy court injunction currently 
prohibits the Commission from reassigning those licenses until the 
previous licensee exhausts its appeal rights.
    Fibertower continues to hold more than 3,000 additional licenses 
(primarily in the 11 GHz, 18 GHz, and 23 GHz bands) used to provide 
wireless backhaul services. Those licenses remain in effect. The 
Commission is giving careful, thorough, and expeditious consideration 
to Fibertower's pending application for Commission review of the 
Bureau's action denying its extension request.
    The Commission will continue to take all appropriate actions to 
promote the availability of wireless backhaul.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Dan Coats to 
                        Hon. Julius Genachowski
    Question 1. Before proceeding to a final rule that would allow 
unlicensed users to access the 5.9 GHz spectrum, will the FCC wait for 
the results of the testing being undertaken by the National 
Telecommunications and Information Administration (NTIA) to determine 
whether this spectrum sharing could compromise the life-saving crash 
avoidance technologies that are being developed by the auto industry 
and the U.S. Department of Transportation using vehicle-to-vehicle 
communications over this frequency band?

    Question 2. How is the FCC working with the National 
Telecommunications and Information Administration (NTIA) to study 
whether and to what extent unlicensed users will be able to share the 
5.9 GHz frequency band in a way that does not compromise the life-
saving crash avoidance technologies that are being developed by the 
auto industry and the U.S. Department of Transportation using vehicle-
to-vehicle communications over this frequency band?
    Answer to Questions 1 and 2. The Commission will abide by the 
statutory requirements with respect to unlicensed use in the 5 GHz 
band.
    FCC staff expects that Intelligent Transportation Systems (ITS) and 
unlicensed Wi-Fi use will be compatible as both operate within the 
802.11 family of technical standards. The FCC has been in communication 
with NTIA and the Department of Transportation and is aware of NTIA's 
planned schedule for studying the 5.9 GHz spectrum. The Commission has 
also been in communication with the Intelligent Transportation Systems 
industry consortium (ITSAmerica), the IEEE 802.11 standards group, and 
equipment manufacturers, some of which have interests in both robust 
Intelligent Transportation Systems and more unlicensed access to 
spectrum.
    We will continue discussions with these interested parties as our 
rulemaking process continues.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Barbara Boxer to 
                        Hon. Robert M. McDowell
    Question 1. On November 30, 2012, I along with eight of my 
colleagues sent a letter urging you not to relax the Commission's 
cross-ownership rules without responding to our concerns about the low 
levels of female and minority ownership of broadcast radio and 
television stations. In February, the Commission announced that it 
would be delaying its vote on the new rules as it awaits the results of 
a study by the Minority Media and Telecommunications Council regarding 
the effects of cross-ownership rules on minority ownership and 
newsgathering.
    Given the fact that MMTC's study is to be conducted by a broadcast 
industry analyst who is backed by the newspaper and broadcast industry 
associations and has publicly supported a relaxation of the cross-
ownership rules, do you believe the study represents an independent and 
impartial analysis of the impact of cross ownership on minority owners?
    Answer. As the study has not yet been produced, I have not seen it. 
Accordingly, it is not possible for me to determine whether it is an 
independent and impartial analysis of whether, and to what extent, 
cross ownership affects minority and women ownership. It is my 
understanding, however, that this study will be peer-reviewed and will 
be released for public comment. Therefore, all interested parties will 
have the ability to critique the findings at that time. Furthermore, as 
of April 8, 2013, I have recused myself from all matters as I prepare 
to depart the Commission, so I will not be participating in future 
proceedings regarding media ownership and, in light of the numerous 
stakeholders involved, it would not be appropriate for me to opine on 
the hypothetical value of this study.

    Question 1a. Do you believe the study's methodology will provide 
the kind of analysis required by the Third Circuit Court of Appeals 
when it ordered the Commission to provide better justification for 
proposed diversity efforts?
    Answer. It is my understanding that the MMTC study is limited to 
evaluating whether eliminating or modifying the Commission's media 
cross-ownership rules, in the context of our current quadrennial media 
ownership proceeding, would have an adverse effect on minority and 
women ownership. It is unlikely that this study will provide an 
adequate justification to enhance our efforts to increase minority and 
women ownership. The Commission must be mindful that any action the 
Commission would take regarding race-and/or gender-based regulations 
must satisfy the rigorous demands of the Equal Protection Clause, as 
interpreted under the Supreme Court's Adarand line of cases. Throughout 
almost seven years at the Commission, I have repeatedly called for such 
studies, commonly referred to as diversity studies or Adarand studies, 
to be conducted. My efforts to promote diversity in the broadcast 
marketplace have been recognized by the National Association of Black 
Owned Broadcasters and the Latinos in Information Sciences and 
Technology Association. Accordingly, I will repeat: The Commission 
needs to complete these diversity studies as soon as possible to assist 
us in supporting any new race-and/or gender-based regulations and to 
determine the best approaches to increase media diversity, in 
accordance with the Constitution.

    Question 1b. Does the Commission believe that radio contributes to 
viewpoint diversity?
    Answer. I have stated on several occasions that, under section 
202(h) of the Telecommunications Act of 1996,\1\ the FCC must modernize 
all of its media ownership rules to reflect current economic and 
marketplace realities, including the development of new media 
platforms--such as the Internet, satellite radio and mobile devices--
and that any and all unnecessary mandates should be eliminated. Today, 
whether in their homes, at work, or in their cars, Americans have 
access to their favorite audio programming not only from radio, but 
from all of these new outlets as well. Furthermore, there is evidence 
before the Commission that demonstrates that cross ownership does not 
negatively affect viewpoint diversity and may actually increase the 
quantity and quality of local news and information provided by 
commonly-owned outlets to benefit the American consumer. As of April 8, 
2013, however, I have recused myself from all matters as I prepare to 
depart the Commission, so I will not be participating in future 
proceedings regarding media ownership and, in light of the numerous 
stakeholders involved, it would not be appropriate for me to opine 
further on this matter.
---------------------------------------------------------------------------
    \1\ Section 202(h) of the Telecommunications Act of 1996 states 
that:

    The Commission shall review its rules adopted pursuant to this 
section and all of its ownership rules quadrennially. . .and shall 
determine whether any of such rules are necessary in the public 
interest as the result of competition. The Commission shall repeal or 
modify any regulation it determines to be no longer in the public 
interest.

    Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56, 
111-12 Sec. 202(h) (1996); Consolidated Appropriations Act, 2004, Pub. 
L. No. 108-199, Sec. 629, 118 Stat. 3, 99-100 (2004) (amending Section 
202(h) of the 1996 Act). I concurred in the December 2011 notice of 
proposed rulemaking, because the Commission appears to be prepared to 
accept a regulatory status quo while I think major changes are 
necessary and required by Section 202(h).

    Question 1c. If the Commission were to conclude that radio does not 
contribute to diversity, how would that decision undermine future 
efforts to ensure that radio ownership is as diverse as the country it 
serves?
    Answer. As of April 8, 2013, I have recused myself from all matters 
as I prepare to depart the Commission, so I will not be participating 
in future proceedings regarding media ownership and, in light of the 
numerous stakeholders involved, it would not be appropriate for me to 
opine on this matter. If the Commission undertakes diversity studies, 
however, and finds that there is a compelling government interest, as 
informed by the Adarand line of cases, the Commission could implement 
rules that would promote minority and women ownership across all media 
outlets. For example, diversity studies may provide the justification 
for a new congressionally-mandated tax certificate program and for 
Commission rules, such as minority-based bidding credits and incubator 
programs.

    Question 2. The Commission has acknowledged that rural consumers 
are experiencing significant problems receiving long distance or 
wireless calls on their landline telephones. The problem appears to be 
attributable to the use of IP-based least-cost routing providers. What 
does the Commission plan to do to ensure that such interconnection and 
reliability problems do not become more prevalent as our Nation's 
telephone networks transition to wireless and IP-based services?
    Answer. As for what the Commission plans to do in the future 
regarding this issue, I respectfully defer to the Chairman who controls 
the FCC's agenda.

    Question 3. In light of the recent complaint filed in Federal court 
by VoIP providers claiming that the Commission lacks authority under 
the Communications Act to apply the no-blocking rule to VoIP calls, is 
additional authority needed from Congress to address the rural call 
completion problem?
    Answer. While I have not taken a position on whether additional 
authority would be needed to solve this particular problem, generally 
speaking, it has been my opinion that clear direction from Congress is 
preferable as the FCC implements our Nation's communications laws. 
Furthermore, as of April 8, 2013, I have recused myself from all 
matters as I prepare to depart the Commission, so I will not be 
participating in future proceedings regarding rural call completion 
and, in light of the numerous stakeholders involved, it would not be 
appropriate for me to opine further on this matter.

    Question 4. More than half of U.S. broadband subscribers are 
subject to some form of bandwidth cap or usage-based pricing. Experts 
have pointed out that broadband caps are inefficient for addressing 
network congestion and may, instead, have anticompetitive effects. What 
does the Commission plan to do to ensure that caps do not undermine 
access to affordable, high-speed broadband?
    Answer. Under a deregulatory structure, the deployment of broadband 
throughout our Nation has been swift and strong. The impressive growth 
curve shows that between 2003 and 2009, broadband deployment has 
increased from reaching 15 percent of Americans in 2003 to 95 percent 
of Americans in 2009.\2\ Moreover, mobile broadband has been the 
fastest growing segment of the market and the increased use of wireless 
devices, in particular, has been tremendous over the past couple years. 
Between mid-year 2011 and mid-year 2012, the number of smartphones that 
were active on carriers' networks increased by 36.5 percent for a total 
of 130.8 million and, during that same time period, the number of 
wireless-enabled tablets, laptops, netbooks and wireless broadband 
modems that were active on carriers' networks increased by 42 
percent.\3\
---------------------------------------------------------------------------
    \2\ See, e.g., FCC, Omnibus Broadband Initiative (OBI), Connecting 
America: The National Broadband Plan, GN Docket No. 09-51 (2010).
    \3\ See CTIA's Mid-Year 2012 Semi-Annual Wireless Survey at 10 
(rel. Nov. 2012).
---------------------------------------------------------------------------
    As I have said many times before, generally speaking, the Internet 
has been the greatest deregulatory success story in history, and the 
government should not interfere with this success. Rather, the 
government should let the markets work and let consumers choose. As 
such, it has been my opinion that broadband providers should have the 
means to manage their systems. Also, if anticompetitive behavior is 
uncovered, existing laws can address such behavior.
    As for what the Commission plans to do in the future regarding this 
issue, I respectfully defer to the Chairman who controls the FCC's 
agenda.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to 
                        Hon. Robert M. McDowell
    Question 1. New Jersey is a net contributor of close to 200 million 
dollars a year to the Universal Service Fund (USF). As the USF has 
grown, so has the burden on New Jersey and other donor states. As the 
FCC moves from distribution reform to contribution reform, should the 
FCC take into consideration the impact that contribution reform 
proposals could have on net contributor states like New Jersey?
    Answer. During my tenure at the FCC, I have regularly highlighted 
the dire need for the Commission to work with all stakeholders to craft 
pragmatic and fair reforms of the universal service contribution 
methodology in a manner that is within the Commission's authority. 
Naturally, net contributor states make up one of the stakeholder 
groups.

    Question 2. What contribution reform proposals could you consider 
that would best alleviate the burden on net contributor states like New 
Jersey?
    Answer. With all due respect, at this point, it is impossible to 
answer this question without having access to the relevant data from 
the various industry sectors that would be impacted by type of reforms.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Claire McCaskill to 
                        Hon. Robert M. McDowell
    Question 1. Chairman Genachowski and I have both written to the 
Federal Aviation Administration (FAA) encouraging the agency to revise 
its rules to allow for the expanded use of electronic devices during 
flight. The FAA has established an Aviation Rulemaking Committee (ARC) 
to look at possible changes to the rules, and the FCC has a 
representative on that committee, which will make recommendations to 
the FAA Administrator this summer.
    I am convinced, and I think most Americans agree, any safety 
concerns that might have once existed to justify the current rules have 
been addressed by advances in technology both on the airplane itself 
and in consumer electronics. While I recognize the decision is not one 
that rests with the FCC, as leaders on technology issues--and as one of 
only three government agencies with a seat at the table, and the only 
not under the Department of Transportation--I want to know if all of 
the Commissioners share those views on this issue.
    Answer. I have always supported the periodic review of rule to 
determine if marketplace conditions have changed to allow for the 
elimination of unnecessary regulations. There have been significant 
advancements in technology and, therefore, it is common sense to review 
and evaluate whether current regulations restricting the use of 
electronic devices on airplanes are still necessary. That said, it is 
my opinion that the FAA, as the expert agency, should determine whether 
such devices interfere with airplane system design and when, and to 
what extent, these devices can be used safely during flight. As of 
April 8, 2013, I have recused myself from all matters as I prepare to 
depart the Commission and, in light of the numerous stakeholders 
involved, it would not be appropriate for me to opine further on this 
matter.

    Question 1a. Given Chairman Genachowski's stated position on the 
issue, can I trust that you will be directing the FCC's representative 
on the ARC to convey the opinion of the Commission that the rules 
should be changed and work to aggressively push the FAA to do so?
    Answer. I defer to the Office of the Chairman, who will select and 
instruct the representative to ARC.

    Question 2. Although the FCC's reforms to the Universal Service 
Fund's (USF) Lifeline program through its February 2012 order were much 
needed, and attempted to address duplicative Lifeline support, 
ineligibility, deceptive marketing and other concerns raised in my 
December 2011 letter to you on this topic, the reforms appear to have 
had little effect in limiting the rapid growth of the program.
    While I commend the Commission for its attempt to rein in the rapid 
growth of the Lifeline program and address the problems you inherited 
when the program was expanded to include wireless providers without any 
additional safeguards to prevent waste, fraud and abuse, even with the 
reform order in place the Lifeline program grew by 26 percent ($445 
million) last year. What additional action is the Commission 
considering to address waste, fraud and abuse in the Lifeline program? 
Specifically, would the Commission consider suspending new enrollment 
in the program while the reforms continue to be implemented? Would the 
Commission consider capping the program?
    Answer. Since all of these questions seek answers as to what the 
Commission plans to do in the future regarding this issue, I 
respectfully defer to the Chairman who controls the FCC's agenda. 
Regarding a cap, however, I will note that I have supported imposing a 
long-term fixed budget or cap on the Lifeline program in the past. As 
of April 8, 2013, I have recused myself from all matters as I prepare 
to depart the Commission, so I will not be participating in future 
proceedings regarding the Universal Service Fund and, in light of the 
numerous stakeholders involved, it would not be appropriate for me to 
opine further on this matter.

    Question 3. We are quick in Washington to create new programs but 
what we don't do often enough is reevaluate those programs to make sure 
they're still needed. The FCC created the Lifeline program nearly 30 
years ago to make sure local phone service was still affordable for 
low-income Americans following the breakup of AT&T in 1984. Because 
technology has changed and competition has grown, basic 
telecommunications services are as affordable as ever. I am wondering 
if the Commission has recently looked at whether the Lifeline program 
is even still necessary, and if not if you would be willing to do so?
    Answer. Since this question asks what the Commission plans to do in 
the future regarding this issue, I respectfully defer to the Chairman 
who controls the FCC's agenda.

    Question 4. In order to keep up with the demand for spectrum, many 
in the private-sector believe efforts need to be taken to clear some of 
the federally-occupied spectrum for commercial use, most significantly 
spectrum currently occupied by the Department of Defense. Chairman 
Genachowski and I have discussed this issue but I am interested in the 
views of all of the commissioners.
    With the exponential rise in demand for mobile broadband services, 
we need to look at all potential resources for spectrum repurposing--
including Federal Government users. The GAO recently reported that the 
total percentage of the most highly-valued spectrum exclusively or 
predominantly used by the Federal Government is as high as 57 percent. 
Given Federal agency budgets, many of these systems are not up-to-date 
and thus operate inefficiently, and some Federal uses could be served 
by commercial mobile providers. Are there specific instances in which 
you believe Federal spectrum could be operated more efficiently?
    Answer. First and foremost, the Federal use of spectrum should be 
audited so that we have a full picture of how Federal Government 
agencies are using spectrum. Although some estimate that the Federal 
Government occupies approximately 60 percent of the best spectrum, 
others put that figure at over 80 percent. Nonetheless, without an 
audit, it is difficult to point out specific instances where Federal 
spectrum could be operated more efficiently.

    Question 4a. In addition to this Committee I also serve on the 
Armed Services Committee. I have started to look at ways we can 
incentivize Federal agencies--including the Department of Defense--to 
clear or share spectrum, to free up more spectrum for commercial 
auction. Based on your experience working with Federal spectrum users, 
what ideas can you offer for creating such incentives?
    Answer. Congress, the Executive Branch and the FCC should all work 
together to implement policies that would give Federal users of 
spectrum an incentive to relinquish it for auction. This scenario could 
be a win-win-win for the government, the economy and consumers alike. 
For instance, Federal spectrum users that clear spectrum could receive 
financial incentives funded by the auctions. In today's economic 
climate, agencies are more likely to surrender spectrum if they will 
receive compensation to overcome budget cuts.
    I would like to note that spectrum ``sharing,'' which is a vague 
and ill-defined concept, should not be seen as a substitute for 
auctioning more spectrum for exclusive-use licenses--especially Federal 
spectrum. Spectrum sharing is not a panacea and should only be a 
fallback once we have fully exhausted options for auctioning exclusive 
licenses for cleared spectrum. Proposed sharing arrangements are not 
designed for or suited to robust, high-powered and ubiquitous 
commercial availability.
    Further, there is also no evidence that spectrum sharing with the 
Federal Government will allow for the more-timely deployment of Federal 
spectrum for commercial use. Spectrum sharing, by its very nature, 
raises interference issues that need to be analyzed before sharing can 
occur. For these reasons, we cannot be complacent. Nor should we stop 
advocating for additional Federal spectrum to be auctioned for 
exclusive use licenses.

    Question 5. Last year Congress passed a Rubio-McCaskill resolution, 
S.Con.Res. 50, stating that Internet infrastructure and content should 
remain free from international regulation. Members of the U.S. 
delegation to the ITU conference in Dubai have indicated that Congress 
sending a clear message on the issue was helpful in their negotiations 
and that our efforts on this issue should continue, especially since 
those nations that want greater regulation of Internet infrastructure 
and content will certainly continue in their efforts. What more can 
Congress be doing to help promote a free and open Internet around the 
world?
    Answer. Thank you to you, Senator Rubio and your House counterparts 
for your leadership on the concurrent resolutions. As a member of the 
U.S. delegation to the WCIT in Dubai, I can attest that Congress's 
bipartisan resolution was crucial to our negotiations and sent a clear 
and definitive message regarding U.S. policy to states interested in 
the international regulation of the Internet. Codifying the resolution 
language would be a powerful way to continue the United States' efforts 
to promote an open and freedom-enhancing Internet worldwide.

    Question 5a. A handful of countries, such as China and Iran, want 
to heavily censor the Internet content people can access inside their 
borders, while many other nations are simply looking for ways to 
generate revenue from Internet traffic that moves through their 
country, much in the same way they have done with voice communications 
for years. Are there policies the United States can and should be 
promoting around the globe to help other nations develop their 
telecommunications infrastructure, unleash the economic activity that 
comes with it, and thus remove their desire to use global Internet 
traffic as a revenue source?
    Answer. Yes. Our government should educate developing nations about 
the importance of Internet freedom. We should stress that less 
regulation and taxation of Internet access results in increased 
investment, deployment, adoption, prosperity and freedom.

    Question 6. The upcoming incentive auctions have been pitched to 
Congress as a market-based mechanism that would help put spectrum in 
the hands of those most capable of unleashing its economic potential. 
That was an appealing idea, and on that basis Congress authorized you 
to conduct them. Now there is some concern that the Commission is 
contemplating going beyond what will be freed up by the auctions and is 
considering repurposing or reallocating many more megahertz in rural 
areas just through repacking broadcasters and eliminating LPTV and 
translator service. Is your intention to deal only with what is freed 
up by auctions, or is your intention to reallocate as much spectrum 
from broadcasters to broadband providers as possible?
    Answer. As of April 8, 2013, I have recused myself from all matters 
as I prepare to depart the Commission, so I will not be participating 
in future proceedings regarding the incentive auction and, in light of 
the numerous stakeholders involved, it would not be appropriate for me 
to opine on this matter.

    Question 6a. Has the Commission studied the impact of reclaiming 
spectrum on LPTV and translator service, especially in more rural 
states that rely heavily on them to reach areas where no other service 
is available?
    Answer. On September 28th, the Commission adopted a notice of 
proposed rulemaking initiating the implementation of the incentive 
auction provisions of the Middle Class Tax Relief and Job Creation Act 
(``Spectrum Act''). As you are aware, LPTV and translators are 
secondary services and such stations are displaced if they cause 
unacceptable interference to a full power station or other primary 
spectrum users. Further, the Spectrum Act does not include or protect 
these stations.
    In the notice, the Commission recognized that LPTV and translator 
stations will be affected by the incentive auction and repacking 
process and requested input on various issues relating to these 
services. For instance, we seek input on voluntary channel sharing for 
stations and also invite comment on any measures to help ensure that 
this important programming continues to reach viewers. The Commission 
appreciates the benefits that LPTV and translator stations provide to 
their communities and will have to consider the best means to preserve 
low-power broadcast opportunities while keeping in mind the mandates 
and goals of the Spectrum Act.
                                 ______
                                 
 Response to Written Questions Submitted by Hon. Richard Blumenthal to 
                        Hon. Robert M. McDowell
Broadband Competition
    Question 1. In 2010 the FCC stated in the National Broadband Plan 
that, ``. . . there are reasons to be concerned about wireline 
broadband competition in the United States. Whether sufficient 
competition exists is unclear and, even if such competition presently 
exists, it is surely fragile.''
    The plan further stated that, ``To ensure that the right policies 
are put in place so that the broadband ecosystem benefits from 
meaningful competition as it evolves, it is important to have an 
ongoing, data-driven evaluation of the state of competition,'' and that 
``additional data are needed to more rigorously evaluate broadband 
competition.''
    The Plan specifically recommended the Commission undertake a number 
of reforms to data collection including:

  1.  ``[C]ollect broadband availability data at the census block 
        level, by provider, technology and offered speed.''

  2.  ``[C]ollect data on advertised prices, prices actually paid by 
        subscribers, plans, bundles and promotions of fixed and mobile 
        broadband services that have material penetration among users, 
        as well as their evolution over time, by provider and by 
        geographic area.'' The Plan stated that in particular, it ``is 
        crucial that the FCC track and compare the evolution of pricing 
        in areas where two service providers offer very high peak 
        speeds with pricing in areas where only one provider can offer 
        very high peak speeds.''

  3.  ``[C]ollect information related to switching barriers, such as 
        early termination fees and contract length.''

    The National Broadband Plan also recommended that the Commission 
establish a general policy of making the data it collects available to 
the public, including via the Internet in a broadband data depository.
    These recommendations reflect the comments of the Department of 
Justice, who told the Commission that it ``. . . should expand its 
efforts to include an assessment of the nature and extent of 
competition in each local broadband market.''
    Nearly two years after the National Broadband Plan was released, 
the Commission issued a Notice of Proposed Rulemaking (NPRM) that 
encapsulated many of these recommendations. The Commission has yet to 
act on this NPRM.
    Chairman Genachowski, Commissioners McDowell, Clyburn, Rosenworcel 
and Pai, do you agree with the National Broadband Plan's 
recommendations on the need to collect these additional broadband data?
    Answer. In general, I agree that collecting more data in a targeted 
and reasonable way can be helpful. However, I have also previously 
expressed concerns that these efforts could ultimately lead to price 
regulation of Internet access and services.

    Question 1a. Do you think the Commission, policymakers and the 
public have the appropriate data to determine if the Commission's 
competition policies are, in the words of the Department of Justice, 
using the appropriate ``policy levers. . . to produce superior 
outcomes,'' and if not, what additional data is needed?
    Answer. I have said many times before that it is imperative that 
the FCC looks at the whole picture when it analyzes America's broadband 
adoption success. First, the FCC should avoid focusing on only whether 
individuals are broadband subscribers to wireline services. Increased 
use of wireless broadband is equally important. Second, I have 
previously noted that broadband subscribership numbers do not take into 
account ``non-subscribers'' who are nevertheless active broadband users 
through the power of unlicensed services, such as Wi-Fi.
Sports Blackouts
    Question 2. Over one year ago, I wrote the FCC and requested the 
agency allow public comment on a petition for rulemaking asking the 
Commission to reexamine the Sports Blackout Rule. This rule is nearly 
forty years old and, along with other Federal rules and league 
policies, is one of many obstacles making it unreasonably difficult for 
fans to watch their favorite teams play.
    I thank the Commission for taking my letter seriously and opening a 
Notice of Inquiry (NOI) to solicit comments from the public and other 
stakeholders. However, that docket was opened in January of 2012 and 
the Commission has yet to take any further action.
    The response in the proceeding was overwhelming. The NOI garnered 
thousands of comments from consumers impacted by local sports 
blackouts, including elderly and disabled sports fans unable to attend 
live games. The NFL's revised local blackout policy seems to have done 
little in the last regular season to help the most heavily impacted 
markets. Commenters have proposed several options, including preserving 
the status quo, eliminating the Sports Blackout Rule altogether, or 
adopting a sunset period requiring a public interest showing to renew 
the rule.
    Chairman Genachowski, Commissioners McDowell, Clyburn, Rosenworcel 
and Pai, what else can the Commission do to help fans unable to watch 
their favorite teams compete?
    Answer. As of April 8, 2013, I have recused myself from all matters 
as I prepare to depart the Commission. In light of the numerous 
stakeholders involved in the proceeding before the Commission, it would 
not be appropriate for me to opine on this matter. I was supportive, 
however, of the Media Bureau's action, in January 2012, to seek comment 
on a petition requesting the elimination of the sports blackout rule.
    I have always supported the periodic review of rules to determine 
if marketplace conditions have changed to allow for the elimination of 
unnecessary regulations. Reviewing this 37-year-old rule to determine 
if it is still necessary is constructive as the Commission continues to 
look for rules to streamline and modernize. As I said in January 2012, 
there have been significant changes in the economics and structure of 
professional sports and communications industries since the rule was 
enacted. We now live in a world with not only local broadcast stations, 
but also cable, satellite, the Internet and wireless, and where 
television and merchandizing revenues exceed ticket sales. It is 
appropriate for us to re-examine the rule in light of marketplace 
changes.
    As you know, however, the Commission's rules only prohibit 
multichannel video programming distributors (i.e., cable and satellite 
providers) from carrying a sporting event in a community if it is 
blacked out by the local broadcast station. Thus, even if the 
Commission eliminates this rule, games may continue to be unavailable 
on television. Pursuant to contract, sports leagues often require a 
game to be blacked out from broadcast television if tickets to the game 
have not sold out. Our rules do not, and should not, affect the 
contractual rights of the sports leagues, broadcasters and MVPDs.
    Further, I would like to note that, subsequent to the release of 
this public notice, the NFL relaxed their sports blackout policy. Last 
season, the NFL allowed the home teams to have the option of selling 85 
percent of game tickets to avoid a blackout in their local TV market. 
Previously, teams had to sell out games or receive an exception from 
the league for the game to be shown on local TV.
                                 ______
                                 
  Response to Written Question Submitted by Hon. William M. Cowan to 
                        Hon. Robert M. McDowell
Universal Service Fund
    Question. Chairman Genachowski and Commissioner McDowell, my state 
contributes dramatically more to the USF program than we receive, which 
is particularly problematic because so much of western Massachusetts 
lacks the wired broadband and wireless infrastructure that many USF 
recipient states enjoy.
    How will the reform of the USF program ensure that states like 
Massachusetts get a fair share of the subsidies the fund releases and 
in turn makes communications in places like the Berkshires more 
reliable?
    Answer. Broadband deployment and adoption in all areas of our 
country have been priorities for me since arriving at the FCC nearly 
seven years ago. Furthermore, I worked closely with Senator Kerry and 
Congressman Markey on creative ideas to bring broadband to previously 
unserved areas, such as the Berkshires. In fact, several years ago, we 
convened a broadband summit in Northampton, MA. Today, the Berkshires 
enjoy more broadband connectivity than ever. While more work remains to 
be done, we can learn from the progress we have made thus far.
    One of the goals of the USF/ICC high-cost reform order was to 
target universal service subsidies to areas that are truly unserved by 
broadband. The reform order will not result in immediate results but, 
hopefully, we will achieve this goal in time as the order is 
implemented.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Kelly Ayotte to 
                        Hon. Robert M. McDowell
    Question. Commissioner McDowell, as you know, the Commission took a 
$17 million budget reduction as the result of sequester. But your 
funding level is still larger than any appropriation since 2008. 
Neither spectrum auctions nor USF distribution or contribution seem to 
be affected. How has sequestration affected the FCC's ability to 
function? Where will these cuts be most felt?
    Answer. Although I have received several briefings on the effects 
sequestration may have on the FCC's operations, I have been assured 
that the Commission will be able to carry out its core functions. 
Overall, the agency-wide budget is controlled by Chairman Genachowski 
and therefore I respectfully defer to him regarding additional 
questions. However, as for my office's budget, I have historically 
returned almost 40 percent of my annual office travel budget to the 
Treasury, on average, during my seven-year tenure at the FCC.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                        Hon. Robert M. McDowell
    I appreciate the testimony and your candid answers during the 
hearing. I would like to thank you for your service on the Federal 
Communications Commission.

    Question 1. The hearing touched on many themes that I believe the 
Committee should look at including process reform, the looming 
transition to IP and the Spectrum auction. However, an opportunity for 
the Chairman and the Commissioners to share what they see ``over the 
hill'' was not discussed at length. I would like to provide you with an 
opportunity to share what you believe are some issues that may not have 
been discussed at the hearing.
    Answer. There are numerous issues that will require FCC attention. 
For example,

   The FCC's reforms of the various universal service programs 
        will be ongoing;

   As the media market continues to change, the Commission will 
        continue to have opportunities to modernize and eliminate 
        rules;

   The Commission may have an opportunity to eliminate its net 
        neutrality rules, regardless of the outcome of pending 
        litigation, and needs to determine the fate of the Title II 
        docket;

   Implementation of the incentive auction legislation and the 
        attendant policies will require substantial FCC attention; and

   Overall, there will be a need to de-regulate, perhaps 
        through legislation, as markets become more competitive and 
        converge.

    Question 2. The spectrum auction is of the utmost importance. Is 
the Commission going to set a target date of 2014?
    What are the challenges with hitting this date?
    Answer. The challenges with hitting this date are numerous. It is 
important to remember that the incentive auctions will, quite 
literally, be the most complex spectrum auctions in world history. 
Learning from my past experiences with the AWS-1 and 700 MHz auctions, 
the entire process could take the greater part of a decade. Although we 
want to expedite the auction process and deploy this spectrum for the 
benefit of Americans as quickly as possible, it is most important that 
the Commission ensures that the auctions are successful, both the 
reverse auction and the forward auction. The Commission must work in a 
deliberate and transparent manner, with an eye toward simplicity, 
humility and restraint. Failure to do so could cause unnecessary delay, 
hinder participation and result in unintended consequences.
    For instance, attempting to implement an overly-regulatory paradigm 
could result in myriad delays, including additional time to write and 
release the order and consider petitions for reconsideration. 
Additionally, the complexity of this auction coupled with the repacking 
of broadcast stations increases the opportunities for legal challenges, 
including injunctions and stays. Any regulatory efforts to micromanage 
the wireless market, such as adopting spectrum caps and reserving space 
in the 600 MHz band for the world's first nationwide unlicensed 
spectrum band, are likely to increase the risks of litigation and delay 
even further. Such attempts tend to result in uncertainty, inhibit 
investment and may reduce the pool of auction participants. This 
unwelcome and unintended scenario would jeopardize the main goals of 
the spectrum law: putting more spectrum into the hands of consumers as 
quickly as possible; maximizing revenue at auction; and funding efforts 
to build the nationwide broadband public safety network mandated by 
Congress.

    Question 3. The Commission's spectrum incentive auction process has 
the potential for channel reassignment. Nevada has over 300 translators 
and low power TV stations, any repacking will put a significant burden 
on these stations. Is the FCC taking this into consideration? Can the 
Commission preserve viewer access to local channels and still hit the 
target of 2014 for the auction to take place?
    Answer. On September 28, the Commission adopted a notice of 
proposed rulemaking initiating the implementation of the incentive 
auction provisions of the Middle Class Tax Relief and Job Creation Act 
(``Spectrum Act''). As you are aware, LPTV and translators are 
secondary services and such stations are displaced if they cause 
unacceptable interference to a full power station or other primary 
spectrum users. Further, the Spectrum Act does not include or protect 
these stations.
    In the notice, the Commission recognized that LPTV and translator 
stations will be affected by the incentive auction and repacking 
process and requested input on various issues relating to these 
services. For instance, we seek input on voluntary channel sharing for 
stations and also invite comment on any measures to help ensure that 
this important programming continues to reach viewers. The Commission 
appreciates the benefits that LPTV and translator stations provide to 
their communities and will have to consider the best means to preserve 
low-power broadcast opportunities while keeping in mind the mandates 
and goals of the Spectrum Act.

    Question 4. According to the National Broadband Plan wireless 
backhaul is ``critical to the deployment of wireless broadband and 
other wireless services,'' particularly ``when fiber is not proximate 
to a cell site.'' I understand that the existing wireless backhaul 
networks face a number of regulatory and technological constraints that 
limit their potential capacity. These independently-powerable services 
are also important to undergird FirstNet, the national first responder 
network. How is the FCC working to speed the deployment of wireless 
backhaul services in new frequency bands?
    Answer. The Commission has taken actions to facilitate the 
deployment of wireless backhaul services and ensure that sufficient 
microwave spectrum is available to meet current and future demand for 
backhaul. In fact, in 2010, the Commission opened a proceeding to 
review its rules to remove regulatory barriers to the use of microwave 
spectrum for backhaul. This docket remains open.
    In August 2011, the Commission released an order implementing rules 
to facilitate the deployment of wireless backhaul.\1\ In particular, 
the Commission provided backhaul operators access to an additional 650 
megahertz of spectrum. This spectrum (the 6875-7125 MHz and 12700-13100 
MHz bands) is shared with Fixed and Mobile Broadcast Auxiliary Service 
(BAS) and Cable TV Relay Service (CARS) providers.
---------------------------------------------------------------------------
    \1\ Amendment of Part 101 of the Commission's Rules to Facilitate 
the Use of Microwave for Wireless Backhaul and Other Uses and to 
Provide Additional Flexibility to Broadcast Auxiliary Service and 
Operational Fixed Microwave Licensees, et al., WT Docket No. 10-153, et 
al., First Report and Order, Further Notice of Proposed Rulemaking, and 
Memorandum Opinion and Order (2011).
---------------------------------------------------------------------------
    In August 2012, the Commission removed regulatory barriers to make 
better use of microwave spectrum and provide additional flexibility to 
enable licensees to reduce operational costs and facilitate the use of 
backhaul in rural areas. For instance, the Commission revised rules to 
allow smaller antennas in the 6, 18 and 23 GHz Bands, which will reduce 
costs. \2\ At this time and again in October 2012, the FCC took steps 
to modify and update technical rules to promote and hasten deployment 
in the microwave bands.\3\ Furthermore, the Commission also imposes 
buildout requirements to ensure that networks are deployed promptly to 
provide service to Americans.
---------------------------------------------------------------------------
    \2\ Amendment of Part 101 of the Commission's Rules to Facilitate 
the Use of Microwave for Wireless Backhaul and Other Uses and to 
Provide Additional Flexibility to Broadcast Auxiliary Service and 
Operational Fixed Microwave Licensees, et al., WT Docket No. 10-153, et 
al., Second Report and Order, Second Further Notice of Proposed 
Rulemaking,Second Notice of Inquiry, Order on Reconsideration, and 
Memorandum Opinion and Order at 3 (2012).
    \3\ Amendment of Part 101 of the Commission's Rules to Facilitate 
the Use of Microwave for Wireless Backhaul and Other Uses and to 
Provide Additional Flexibility to Broadcast Auxiliary Service and 
Operational Fixed Microwave Licensees, et al., WT Docket No. 10-153, et 
al., Order, FCC 12-122 (2012).

    Question 4a. What is the current state of wireless backhaul 
deployment in the 24 and 39 GHz bands? Has any company tried to develop 
new technology that is optimized for wireless backhaul in these new 
frequency bands?
    Answer. Currently, most wireless backhaul deployment has occurred 
in the 6 GHz, 11 GHz, 18 GHz and 23 GHz bands. Deployment of wireless 
backhaul services in the 24 GHz and 39 GHz bands was delayed because, 
upon request of licensees, the Commission extended the buildout for 24 
GHz and 39 GHz licenses to allow, in part, coordination with the 
construction of 700 MHz and AWS-1 networks.
    In reviewing the Commission's records for the three largest 24 GHz 
and 39 GHz licensees, they reflect that IDT Spectrum and Spectrum 
Holding Technologies, which hold 742 and 199 39 GHz licenses, 
respectively, have reported that they have met the buildout 
requirements. Fibertower, which held 103 of the 111 issued 24 GHz 
licenses and 634 39 GHz licenses, has constructed 48 of its 737 
licenses.\4\ Based on the fact that licenses have been constructed in 
both the 24 GHz and 39 GHz bands, it appears that technology and 
equipment has been developed to deploy wireless backhaul using these 
frequencies.
---------------------------------------------------------------------------
    \4\ The Wireless Telecommunications Bureau held that 689 of 
FiberTower's licenses automatically terminated for failure to buildout 
and meet the substantial service requirement. See FiberTower Spectrum 
Holdings LLC, Memorandum Opinion and Order, 27 FCC Rcd 13562 (WTB 
2012). Pursuant to a bankruptcy court injunction, these licenses cannot 
be reassigned until FiberTower exhausts it appeal rights.

    Question 5. The FCC has moved to reclaim wireless backhaul spectrum 
in the 24 and 39 GHz range from a number of wireless backhaul providers 
despite the providers request for additional time to complete their 
roll-out.
    If the FCC ultimately reclaims spectrum in the 24 and 39 GHz range, 
how long will it take, including the necessary legal proceedings, for a 
new wireless backhaul provider to build-out a backhaul service with the 
seized spectrum?
    Answer. As the question seeks information regarding the time-frame 
of potential proceedings before the Commission, I defer to the Chairman 
who controls the FCC's agenda.

    Question 6. In at least one case on Appeal to the Full FCC 
Commission, a significant wireless backhaul provider, from whom the FCC 
seized spectrum, has proposed an aggressive build-out plan that will 
have its wireless backhaul network up and running in 18 months. If the 
FCC were to prioritize the rollout of wireless backhaul services, would 
it be more expedient to grant an 18 month extension and allow a planned 
expansion to move forward or can the FCC clear the spectrum and find 
another company to build-out the necessary wireless backhaul in less 
than 18 months?
    Answer. This question seeks comment on a particular proceeding in 
which a specific licensee requests that the Commission overturn a 
bureau decision denying an extension of the deadline to construct 
certain licenses and provide substantial service. The bureau decision 
resulted in the automatic termination of a large number of 24 GHz and 
39 GHz licenses. Further, it is my understanding that the particular 
licensee has filed for Chapter 11 bankruptcy relief. As of April 8, 
2013, I have recused myself from all matters as I prepare to depart the 
Commission. In light of the numerous stakeholders involved in the 
proceedings before the Commission and bankruptcy court, it would not be 
appropriate for me to opine on this matter.

    Question 7. Will the FCC work to ensure that it takes all 
appropriate actions, including reviewing prior staff-driven efforts 
intended to strip existing wireless backhaul providers of their 
spectrum, to speed the build-out of needed wireless backhaul services?
    Answer. As of April 8, 2013, I have recused myself from all matters 
as I prepare to depart the Commission, so I will not be participating 
in future proceedings regarding wireless backhaul services.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Barbara Boxer to 
                         Hon. Mignon L. Clyburn
    Question 1. On November 30, 2012, I along with eight of my 
colleagues sent a letter urging you not to relax the Commission's 
cross-ownership rules without responding to our concerns about the low 
levels of female and minority ownership of broadcast radio and 
television stations. In February, the Commission announced that it 
would be delaying its vote on the new rules as it awaits the results of 
a study by the Minority Media and Telecommunications Council regarding 
the effects of cross-ownership rules on minority ownership and 
newsgathering.
    Given the fact that MMTC's study is to be conducted by a broadcast 
industry analyst who is backed by the newspaper and broadcast industry 
associations and has publicly supported a relaxation of the cross-
ownership rules, do you believe the study represents an independent and 
impartial analysis of the impact of cross ownership on minority owners?
    Answer. MMTC's study will be used to inform our current draft 
Order, and my hope is that the study's results will give the FCC some 
indication as to whether certain forms of media consolidation will 
negatively impact female and minority owners or increase barriers to 
entry in acquiring and maintaining a broadcast or newspaper entity.

    Question 1a. Do you believe the study's methodology will provide 
the kind of analysis required by the Third Circuit Court of Appeals 
when it ordered the Commission to provide better justification for 
proposed diversity efforts?
    Answer. Throughout our comment periods leading up to the release of 
the Chairman's draft Order, I have repeatedly expressed concern 
regarding our need to address the issues raised in the Third Circuit's 
most recent decision. Should the some or all of the results of the MMTC 
study satisfy the Court's concerns, I feel we should consider 
augmenting our Order with that data.

    Question 1b. Does the Commission believe that radio contributes to 
viewpoint diversity?
    Answer. The Chairman's draft Order is skeptical on that point, 
finding that TV stations and newspapers are the more popular resource 
for news and information. I am less certain of that claim, and look 
forward to potential further insight from the MMTC study.

    Question 1c. If the Commission were to conclude that radio does not 
contribute to diversity, how would that decision undermine future 
efforts to ensure that radio ownership is as diverse as the country it 
serves?
    Answer. I am not ready to draw that conclusion. I feel that radio 
provides entertainment, news, and viewpoints that are just as diverse 
and unique as television and other offerings, and I am hesitant to take 
any action that could harm diverse radio providers. However, I have 
looked over the comments that were submitted which call for relaxation 
of the newspaper-radio cross-ownership ban, and how such combinations 
could inject much-needed resources into both sides of a consolidated 
entity. I intend to further examine this possibility with our Media 
Bureau during the coming weeks.

    Question 2. The Commission has acknowledged that rural consumers 
are experiencing significant problems receiving long distance or 
wireless calls on their landline telephones. The problem appears to be 
attributable to the use of IP-based least-cost routing providers.
    What does the Commission plan to do to ensure that such 
interconnection and reliability problems do not become more prevalent 
as our Nation's telephone networks transition to wireless and IP-based 
services?
    Answer. The Commission has been actively looking into these issues 
and it's something that I'm very concerned about. I attended the 
Commission's hearings focusing on the aftermath of Hurricane Sandy and 
the Commission has launched proceedings to examine the reliability of 
networks to determine whether actions should be taken. In addition, the 
FCC's Technology Transition Policy Task Force is focused on these 
issues and how to update our rules for modern networks. The Commission 
has also asked the Technological Advisory Council (TAC) to provide 
recommendations to the Commission on how to improve resiliency and 
reliability of networks. Finally, the Commission launched a proceeding 
regarding the concerns of call completion and quality of calls to rural 
areas. I look forward to reviewing the record developed in these 
proceedings as well as the recommendations from the TAC and Task Force.

    Question 2a. In light of the recent complaint filed in Federal 
court by VoIP providers claiming that the Commission lacks authority 
under the Communications Act to apply the no-blocking rule to VoIP 
calls, is additional authority needed from Congress to address the 
rural call completion problem?
    Answer. I believe that the Commission has authority to impose its 
proposed rural call completion rules on VoIP providers. We propose to 
do so in the pending NPRM, which will provide the Commission additional 
information from providers about their call completion rates and 
incentivize them to improve their call completion performance.
    The Commission relied on Sections 201(b) and 202(a) of the 
Communications Act in the pending NPRM. Call routing practices that 
lead to rural call termination and quality problems may violate the 
prohibition against unjust and unreasonable practices in section 
201(b), or may violate carriers' duty under section 202(a) to refrain 
from unjust or unreasonable discrimination in practices, facilities, or 
services. The Commission sought comment on applying its proposed rules 
to VoIP providers through the exercise of its ancillary authority to 
the extent that VoIP services are not telecommunications services 
regulated under Title II of the Act, on the grounds that such 
requirements would be necessary for the Commission to carry out its 
section 201(b) and 202(a) obligations with regard to carriers.
    As you know, the Commission has been actively working to address 
rural call completion for several years. Despite our best efforts we 
continue to hear about call completion issues from rural carriers. This 
is a significant issue with real-world consequences for rural economies 
and public safety. To the extent that providers are not following our 
call completion requirements, I have encouraged the Chairman and our 
Enforcement Bureau to address these issues swiftly, and I am supportive 
of concluding our ongoing rulemaking quickly to provide the Commission 
additional information from providers about their call completion rates 
so that we may better enforce the requirements of the Act.

    Question 3. More than half of U.S. broadband subscribers are 
subject to some form of bandwidth cap or usage-based pricing. Experts 
have pointed out that broadband caps are inefficient for addressing 
network congestion and may, instead, have anticompetitive effects. What 
does the Commission plan to do to ensure that caps do not undermine 
access to affordable, high-speed broadband?
    Answer. The broadband marketplace continues to evolve, and the 
Commission is monitoring the delivery of broadband service to 
consumers, as required by Section 706 of the Telecommunications Act, 
for instance. As part of that effort, studying the impact of speeds 
delivered, data caps, and other terms and conditions is a useful 
endeavor for us to observe the changes that are occurring, including 
how those changes impact the adoption and use rate of broadband and the 
benefits that ensue as a result. Such review includes the competitive 
effects of services offered on the Internet, including whether the 
terms and conditions of that offering, have a limiting effect on 
innovative services that may compete directly with incumbents.
    To date, my observation is that the marketplace is evolving, and we 
should continue monitoring that evolution and the impact it has on the 
deployment, adoption and use of broadband by consumers; and we should 
address complaints about unfair practices as quickly as possible so as 
to ensure continued innovation and investment in broadband. The 
Commission currently is considering an expansion of its Section 706 
review that aligns with our goals of promoting the deployment, adoption 
and use of broadband by all Americans.
                                 ______
                                 
 Response to Written Question Submitted by Hon. Frank R. Lautenberg to 
                         Hon. Mignon L. Clyburn
    Question. Nineteen states currently restrict local governments' 
ability to offer broadband, even in areas where companies won't make it 
available or affordable. I have previously introduced bills that would 
prevent states from restricting municipal broadband, and I am 
considering reintroducing this legislation. Do you agree that states 
should not be permitted to restrict municipalities from offering 
broadband to their residents?
    Answer. Yes. The National Broadband Plan (``NBP'') recommended that 
Congress clarify that State, regional, and local governments should not 
be restricted from building their own broadband networks. When 
providers cannot meet the needs of local communities, the Plan 
recommends that State, regional, and local entities should be able to 
respond accordingly, as they were able to do when municipal governments 
distributed electricity to thousands of rural communities during the 
20th century. Unfortunately, this issue has not been addressed by 
Congress, and some broadband industry members continue to encourage 
state legislatures to restrict municipalities in this manner, with 
South Carolina and North Carolina passing restrictive legislation since 
the NBP. Indeed, a recent effort in Georgia failed, but not without 
significant work by opponents to defeat the measure. I have spoken out 
several times and encouraged state legislatures to ignore these 
misguided efforts, but action from Congress to settle this matter would 
be welcome.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Claire McCaskill to 
                         Hon. Mignon L. Clyburn
    Question 1. Chairman Genachowski and I have both written to the 
Federal Aviation Administration (FAA) encouraging the agency to revise 
its rules to allow for the expanded use of electronic devices during 
flight. The FAA has established an Aviation Rulemaking Committee (ARC) 
to look at possible changes to the rules, and the FCC has a 
representative on that committee, which will make recommendations to 
the FAA Administrator this summer.
    I am convinced, and I think most Americans agree, any safety 
concerns that might have once existed to justify the current rules have 
been addressed by advances in technology both on the airplane itself 
and in consumer electronics. While I recognize the decision is not one 
that rests with the FCC, as leaders on technology issues--and as one of 
only three government agencies with a seat at the table, and the only 
not under the Department of Transportation--I want to know if all of 
the Commissioners share those views on this issue.
    Given Chairman Genachowski's stated position on the issue, can I 
trust that you will be directing the FCC's representative on the ARC to 
convey the opinion of the Commission that the rules should be changed 
and work to aggressively push the FAA to do so?
    Answer. Yes. I look forward to the recommendations from the ARC and 
will work with the FAA on next steps as appropriate. I hope that we 
people can find a proper way to permit people to use devices, such as 
e-readers, from gate to gate.

    Question 2. Although the FCC's reforms to the Universal Service 
Fund's (USF) Lifeline program through its February 2012 order were much 
needed, and attempted to address duplicative Lifeline support, 
ineligibility, deceptive marketing and other concerns raised in my 
December 2011 letter to you on this topic, the reforms appear to have 
had little effect in limiting the rapid growth of the program.
    While I commend the Commission for its attempt to rein in the rapid 
growth of the Lifeline program and address the problems you inherited 
when the program was expanded to include wireless providers without any 
additional safeguards to prevent waste, fraud and abuse, even with the 
reform order in place the Lifeline program grew by 26 percent ($445 
million) last year. What additional action is the Commission 
considering to address waste, fraud and abuse in the Lifeline program?
    Specifically, would the Commission consider suspending new 
enrollment in the program while the reforms continue to be implemented?
    Answer. In Section 254 of the Communications Act, Congress 
articulated national universal service goals, including that services 
should be available at ``affordable'' rates and that ``consumers in all 
regions of the nation, including low-income consumers . . . should have 
access to telecommunications and information services.'' The Lifeline 
program fulfills this intended purpose of the USF, and in the 
Commission's Lifeline Reform Order in 2012, we found that Lifeline has 
been instrumental in increasing the availability of phone service to 
low-income consumers. Not only had many low-income consumers stated in 
our record that without a Lifeline subsidy, they would be unable to 
afford such service, they also noted the hardships they would face 
without access to phone service, such as the lack of access to 911, job 
opportunities, and social services.
    In fact, in our Lifeline Reform Order the Commission stated that 
telephone subscribership among low-income Americans has grown 
significantly since the Lifeline program was initiated in 1984, in 
response to the break-up of AT&T and the Commission's action to ensure 
the availability and affordability of local phone service would be 
addressed for low-income families through the implementation of the 
Lifeline program. Eighty percent of low-income households had telephone 
service in 1984, compared to 95.4 percent of non-low-income households. 
However, since the inception of Lifeline, the gap between telephone 
penetration rates for low-income and non-low-income households has 
narrowed from about 12 percent in 1984 to 4 percent in 2011. In fact, 
states that provide higher monthly Lifeline subsidies per household 
exhibited greater growth in phone subscribership from 1997 to the 
present. The Commission also found that Lifeline had increased the 
penetration rate of voice service by keeping low-income consumers 
connected to the network, thereby increasing the network effects (i.e., 
the more consumers who are on the network increasing the benefits for 
all consumers). Moreover, the additional money invested in USF through 
the high-cost, E-rate, and rural healthcare mechanisms achieve more 
benefits for all of society when low-income consumers can access the 
networks through the Lifeline program.
    If a cap were to be imposed, then consumers who are otherwise 
qualified may lose or not gain access to the networks. Balancing the 
statutory objectives with the policy goal of all consumers to access 
the networks and benefit from them, our reforms focused on how we can 
address the operation of the program and make it more efficient and 
effective without harming qualified low-income consumers' access to the 
networks. Access to payphones has significantly declined--currently 
approximately only 500,000 payphones remain in the U.S., and 
approximately 1.5 million have been displaced as the marketplace has 
changed due to the increased availability of mobile phones. 
Accordingly, the Commission set a savings target for the Lifeline 
reforms of $200 million, which it met during the first year, and we 
anticipate that over $400 million will be saved this year, and up to $2 
billion by the end of 2014.
    Indeed, it is apparent that the reforms that focused on ensuring 
that consumers are qualified for the program and that providers are 
adhering to the program's rules are working. The overall number of 
consumers in Lifeline has dropped significantly since the 
implementation of the new certification and usage requirements and the 
first annual verification process--from 15.7 million to 13.2 million 
households. As a result, Lifeline subscribership is no longer growing, 
and every new subscriber must demonstrate eligibility at sign up, in 
addition to the many other reforms that have curbed the growth in the 
program.

    Question 2a. Would the Commission consider capping the program?
    Answer. See response immediately above.

    Question 3. We are quick in Washington to create new programs but 
what we don't do often enough is reevaluate those programs to make sure 
they're still needed. The FCC created the Lifeline program nearly 30 
years ago to make sure local phone service was still affordable for 
low-income Americans following the breakup of AT&T in 1984. Because 
technology has changed and competition has grown, basic 
telecommunications services are as affordable as ever. I am wondering 
if the Commission has recently looked at whether the Lifeline program 
is even still necessary, and if not if you would be willing to do so?
    Answer. As discussed above, the Lifeline Reform Order fully 
considered the benefits of the program and balanced the need for the 
program with its reform efforts to ensure that the program would be 
more efficient and effective. In its review, the Commission found that 
the Lifeline-eligible population had increased significantly over the 
past decade. Since 1999, real median household income in the U.S. has 
declined by 7.1 percent, while households at the bottom of the income 
scale have seen their income decline by 12.1 percent. In 2010, 46.2 
million Americans were living in poverty, defined as living at or below 
the benchmark established in the Federal Poverty Guidelines, compared 
to 31.6 million in 2000. Since we published the Lifeline Reform Order, 
the Census Bureau has reported an additional 1.5 percent decline in 
median income from 2010 to 2011. Minority populations have fared even 
worse; for example African Americans experienced a decrease of 2.7 
percent. Thus, the evidence we have indicates that this program is 
still needed and that without it, more consumers would be disconnected 
from the networks. A monthly subsidy of $9.25 per month per family 
ensures that they can have access to 911, job opportunities, social 
services, and daycare and school contact. Without it, I believe low-
income families would face even more hardships than they do today. As 
such, the Lifeline program continues to assist us in fulfilling the 
statutory requirements of universal service that Congress set forth for 
the Nation in Section 254.

    Question 4. In order to keep up with the demand for spectrum, many 
in the private-sector believe efforts need to be taken to clear some of 
the federally-occupied spectrum for commercial use, most significantly 
spectrum currently occupied by the Department of Defense. Chairman 
Genachowski and I have discussed this issue but I am interested in the 
views of all of the commissioners.
    With the exponential rise in demand for mobile broadband services, 
we need to look at all potential resources for spectrum repurposing--
including Federal Government users. The GAO recently reported that the 
total percentage of the most highly-valued spectrum exclusively or 
predominantly used by the Federal Government is as high as 57 percent. 
Given Federal agency budgets, many of these systems are not up-to-date 
and thus operate inefficiently, and some Federal uses could be served 
by commercial mobile providers. Are there specific instances in which 
you believe Federal spectrum could be operated more efficiently?
    Answer. Most parties would probably agree that certain systems that 
were designed and installed as long as thirty years ago could use 
spectrum more efficiently with today's technologies. However, the 
Federal agencies advise that they do not have the budget to conduct the 
research and development for replacing old technologies with more 
efficient ones. The FCC is not in a position to identify particular 
systems that can or should use spectrum more efficiently. However, we 
believe it is important to understand the assumptions that underlie 
current spectrum use and whether these assumptions might be modified to 
allow agencies to accomplish their missions using less spectrum in ways 
that create opportunity and real value for other services either 
through reallocation or sharing.

    Question 5. In addition to this Committee I also serve on the Armed 
Services Committee. I have started to look at ways we can incentivize 
Federal agencies--including the Department of Defense--to clear or 
share spectrum, to free up more spectrum for commercial auction. Based 
on your experience working with Federal spectrum users, what ideas can 
you offer for creating such incentives?
    Answer. I believe it would be helpful to empower the Department of 
Defense to offer access to its spectrum through auctions either through 
reallocations or sharing, with a share of the proceeds used to fund 
other funding or program priorities, working of course with the 
Congress. For example, this would empower the Department of Defense to 
determine whether it might auction part of its spectrum to reduce or 
eliminate furloughs.

    Question 6. Last year Congress passed a Rubio-McCaskill resolution, 
S.Con.Res. 50, stating that Internet infrastructure and content should 
remain free from international regulation. Members of the U.S. 
delegation to the ITU conference in Dubai have indicated that Congress 
sending a clear message on the issue was helpful in their negotiations 
and that our efforts on this issue should continue, especially since 
those nations that want greater regulation of Internet infrastructure 
and content will certainly continue in their efforts. What more can 
Congress be doing to help promote a free and open Internet around the 
world?
    Answer. Though the Department of State heads U.S. participation in 
international meetings, the Federal Communications Commission is an 
expert agency and member of U.S. delegations to many international 
telecommunications meetings. In that capacity, at the International 
Telecommunication Union's (ITU) World Conference on International 
Telecommunications (WCIT) in Dubai last December, we witnessed the 
benefit of strong bipartisan support from the U.S. Senate in the form 
of S. Con. Res. 50. Such unity of purpose going forward as the United 
States seeks to promote a free and open Internet will continue to be 
helpful.

    Question 7. A handful of countries, such as China and Iran, want to 
heavily censor the Internet content people can access inside their 
borders, while many other nations are simply looking for ways to 
generate revenue from Internet traffic that moves through their 
country, much in the same way they have done with voice communications 
for years. Are there policies the United States can and should be 
promoting around the globe to help other nations develop their 
telecommunications infrastructure, unleash the economic activity that 
comes with it, and thus remove their desire to use global Internet 
traffic as a revenue source?
    Answer. The discussions at the WCIT, in Dubai, highlighted how 
critical it is to work with developing countries and highlight the 
benefits of the Internet and how to achieve those benefits.
    We are working with the U.S. State Department and other agencies to 
continue outreach efforts that focus on promoting an enabling 
environment for broadband development that creates opportunities for 
the private sector to invest in innovative technologies. For example, 
the United States has encouraged countries to adopt transparent policy 
and legal frameworks; open telecommunications markets to competition; 
adopt licensing and taxation reforms; establish transparent universal 
service programs to support telecommunications instead of subsidies 
from international services; and encourage the efficient and innovative 
use of spectrum for mobile broadband. We have and will continue to 
emphasize in our work with developing countries and others that 
regulations that seek to control revenue flows will hinder investment 
and impede broadband growth. There are many opportunities over the next 
several months to advance these outreach efforts, including at the 
upcoming ITU's World Telecommunications Policy Forum in May, the ITU's 
Global Symposium for Regulators in August, and bilateral meetings with 
individual countries.

    Question 8. The upcoming incentive auctions have been pitched to 
Congress as a market-based mechanism that would help put spectrum in 
the hands of those most capable of unleashing its economic potential. 
That was an appealing idea, and on that basis Congress authorized you 
to conduct them. Now there is some concern that the Commission is 
contemplating going beyond what will be freed up by the auctions and is 
considering repurposing or reallocating many more megahertz in rural 
areas just through repacking broadcasters and eliminating LPTV and 
translator service.
    Is your intention to deal only with what is freed up by auctions, 
or is your intention to reallocate as much spectrum from broadcasters 
to broadband providers as possible?
    Answer. The Commission has and will continue to run a market-driven 
process focused on providing opportunities for broadcasters in all 
markets to participate in the incentive auction.
    A successful auction will result in nationwide contiguous blocks of 
spectrum for commercial wireless which will enable significant economic 
growth and consumer benefits in all areas, urban and rural as well as a 
vibrant broadcast market that continues to reaches all.

    Question 9. Has the Commission studied the impact of reclaiming 
spectrum on LPTV and translator service, especially in more rural 
states that rely heavily on them to reach areas where no other service 
is available?
    Answer. Congress envisioned that full power TV stations and Class A 
stations that choose not to participate would likely need to be 
repacked, so the Spectrum Act provides relocation funding and requires 
the Commission to make reasonable efforts to preserve coverage area and 
population served.
    Congress chose not to provide special protection for Low power TV 
and TV translators, which are secondary services.
    However, in the Commission's NPRM recognized the important service 
low power stations provide, particularly in rural areas, and sought 
comment on measures to ensure their programming continues to reach 
viewers--such as channel sharing, access to multicast channels of full 
power stations, and modifications to our displacement application 
process.
                                 ______
                                 
 Response to Written Questions Submitted by Hon. Richard Blumenthal to 
                         Hon. Mignon L. Clyburn
Broadband Competition
    Question 1. In 2010 the FCC stated in the National Broadband Plan 
that, ``. . . there are reasons to be concerned about wireline 
broadband competition in the United States. Whether sufficient 
competition exists is unclear and, even if such competition presently 
exists, it is surely fragile.''
    The plan further stated that, ``To ensure that the right policies 
are put in place so that the broadband ecosystem benefits from 
meaningful competition as it evolves, it is important to have an 
ongoing, data-driven evaluation of the state of competition,'' and that 
``additional data are needed to more rigorously evaluate broadband 
competition.''
    The Plan specifically recommended the Commission undertake a number 
of reforms to data collection including:

  1.  ``[C]ollect broadband availability data at the census block 
        level, by provider, technology and offered speed.''

  2.  ``[C]ollect data on advertised prices, prices actually paid by 
        subscribers, plans, bundles and promotions of fixed and mobile 
        broadband services that have material penetration among users, 
        as well as their evolution over time, by provider and by 
        geographic area.'' The Plan stated that in particular, it ``is 
        crucial that the FCC track and compare the evolution of pricing 
        in areas where two service providers offer very high peak 
        speeds with pricing in areas where only one provider can offer 
        very high peak speeds.''

  3.  ``[C]ollect information related to switching barriers, such as 
        early termination fees and contract length.''

    The National Broadband Plan also recommended that the Commission 
establish a general policy of making the data it collects available to 
the public, including via the Internet in a broadband data depository.
    These recommendations reflect the comments of the Department of 
Justice, who told the Commission that it ``. . . should expand its 
efforts to include an assessment of the nature and extent of 
competition in each local broadband market.''
    Nearly two years after the National Broadband Plan was released, 
the Commission issued a Notice of Proposed Rulemaking (NPRM) that 
encapsulated many of these recommendations. The Commission has yet to 
act on this NPRM.
    Chairman Genachowski, Commissioners McDowell, Clyburn, Rosenworcel 
and Pai, do you agree with the National Broadband Plan's 
recommendations on the need to collect these additional broadband data? 
Do you think the Commission, policymakers and the public have the 
appropriate data to determine if the Commission's competition policies 
are, in the words of the Department of Justice, using the appropriate 
``policy levers. . . to produce superior outcomes,'' and if not, what 
additional data is needed?
    Answer. The broadband marketplace continues to evolve, and the 
Commission is monitoring the delivery of broadband service to 
consumers, as required by Section 706 of the Telecommunications Act, 
for instance. As part of that effort, studying the impact of speeds 
delivered, data caps, and other terms and conditions is a useful 
endeavor for us to observe the changes that are occurring, including 
how those changes impact the adoption and use rate of broadband and the 
benefits that ensue as a result. Such review includes the competitive 
effects of services offered on the Internet, including whether the 
terms and conditions of that offering, have a limiting effect on 
innovative services that may compete directly with incumbents.
    To date, my observation is that the marketplace is evolving, and we 
should continue monitoring that evolution and the impact it has on the 
deployment, adoption and use of broadband by consumers; and we should 
address complaints about unfair practices as quickly as possible so as 
to ensure continued innovation and investment in broadband. The 
Commission currently is considering an expansion of its Section 706 
review that aligns with our goals of promoting the deployment, adoption 
and use of broadband by all Americans.
Sports Blackouts
    Question 2. Over one year ago, I wrote the FCC and requested the 
agency allow public comment on a petition for rulemaking asking the 
Commission to reexamine the Sports Blackout Rule. This rule is nearly 
forty years old and, along with other Federal rules and league 
policies, is one of many obstacles making it unreasonably difficult for 
fans to watch their favorite teams play.
    I thank the Commission for taking my letter seriously and opening a 
Notice of Inquiry (NOI) to solicit comments from the public and other 
stakeholders. However, that docket was opened in January of 2012 and 
the Commission has yet to take any further action.
    The response in the proceeding was overwhelming. The NOI garnered 
thousands of comments from consumers impacted by local sports 
blackouts, including elderly and disabled sports fans unable to attend 
live games. The NFL's revised local blackout policy seems to have done 
little in the last regular season to help the most heavily impacted 
markets. Commenters have proposed several options, including preserving 
the status quo, eliminating the Sports Blackout Rule altogether, or 
adopting a sunset period requiring a public interest showing to renew 
the rule.
    Chairman Genachowski, Commissioners McDowell, Clyburn, Rosenworcel 
and Pai, what else can the Commission do to help fans unable to watch 
their favorite teams compete?
    Answer. I too have heard from aggrieved fans, and have met with 
both the Sports Fans Coalition and the NFL. I have also discussed the 
issue with the Chairman's office, and will continue to monitor any 
incoming comments pursuant to our Notice of Inquiry of January, 2012.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. William M. Cowan to 
                         Hon. Mignon L. Clyburn
Media Ownership and Diversity
    Question 1. Commissioner Clyburn, I know that you have expressed 
both concern for the lack of minority media ownership and support for 
acquiring additional data to ensure that any relaxation of existing 
media ownership rules do not further diminish the diversity of voices 
in our media.
    Can you talk about the unique role that minority media plays in 
minority communities, as well as the study that the Minority Media 
Telecommunications Council is commissioning to study the potential 
effects of relaxing the rules on minority ownership and minority 
communities?
    Answer. As the former publisher of a small newspaper that existed 
to provide news and information to African-Americans, I am keenly aware 
of the need for a variety of voices and viewpoints in diverse 
communities--ones that can be trusted and relied upon by individuals in 
neighborhoods small and large. Sadly, a large percentage of these 
entities are struggling financially, and many no longer exist. This is 
due, I am told, to a lack of access to capital, from which stems the 
inability to compete with larger newsgathering operations.
    That is why I view any proposals allowing media consolidation with 
a careful eye, as the ability of a TV station and a newspaper to join 
forces could further squeeze smaller content providers out of their 
respective markets. I am thus anxious to see the results of MMTC's 
study, and to learn if any insight can be gleaned into the potential 
negative impacts of the loosening of our rules.
Prison Phone Rates
    Question 2. Commissioner Clyburn, the FCC released a Notice of 
Proposed Rulemaking to lower interstate calling rates for inmates and 
their families at the end of last year. I understand you have been a 
champion for the FCC taking such action based on two long-standing 
petitions seeking relief from the Commission for almost a decade.
    Where is the FCC in the process of reviewing the record, and when 
do you expect the Commission to take action to lower rates where they 
are not just and reasonable?
    Answer. Thank you for your question. Yes, you are absolutely 
correct that my views of the high rates families must pay to stay 
connected to their loved ones in prison are concerning for a number of 
reasons, but most especially because of the overall societal cost. 
Numerous studies show that recidivism rates are reduced when 
incarcerated individuals stay connected to their family and friends. 
Often the telephone plays a crucial role for that connection when so 
many are incarcerated far from home, and it is difficult for families 
to visit in person.
    By lowering prison phone rates we can better connect families, most 
of who are low-income, and help lower recidivism rates. To that end, I 
am committed to completing the review of the prison phone rate record 
that the Commission has received. Comments were filed in March, and 
reply comments were due in the proceeding on April 22. It is my hope 
that the Chair of the Commission will devote the Commission's resources 
to conclude the review of the record and offer an Order for 
consideration and vote by the full Commission as soon as possible now 
that the record has closed.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Kelly Ayotte to 
                         Hon. Mignon L. Clyburn
    Question 1. Commissioner Clyburn, very few would dispute that we 
have a significant spectrum crunch. As I have stated, we clearly have a 
natural resource with the Federal Government, but that cannot be the 
entire solution. What is your solution for creating a spectrum 
pipeline?
    Answer. The FCC realizes that we must look for opportunities across 
all bands and are doing just that. For example, we recently reallocated 
40 megahertz of non-federal spectrum in the S-band from mobile 
satellite service to terrestrial wireless service and we modified our 
rules to enable deployment of mobile services in 20 megahertz of 
spectrum allocated for wireless communications services. We have also 
proposed to repurpose a portion of the TV broadcasting spectrum for 
wireless broadband through voluntary incentive auctions.
    The GAO recently reported that the total percentage of the most 
highly-valued spectrum exclusively or predominantly used by the Federal 
Government is as high as 57 percent. Therefore our search for spectrum 
must necessarily include potential reallocation or sharing of Federal 
spectrum as well. This past summer, the President's Council of Advisors 
on Science and Technology (PCAST) issued a report that presented 
proposals to promote more efficient uses of spectrum. One 
recommendation was to promote sharing of certain bands between 
commercial and Federal licensees. This past December, the Commission 
adopted a Notice of Proposed Rulemaking in the 3.5 GHz Federal band to 
promote this type of sharing. We are also working with the NTIA and all 
stakeholders to study potential access to Federal spectrum at 1755--
1850 MHz. In sum, we have been moving spectrum into the pipeline and 
are continuing to work to identify other opportunities to keep the 
pipeline flowing in the future. The Commission's 2012 Voluntary 
Incentive Auction NPRM recognized the important service low power 
stations provide, particularly in rural areas, and sought comment on 
measures to ensure their programming continues to reach viewers--such 
as channel sharing, access to multicast channels of full power 
stations, and modifications to our displacement application process.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                         Hon. Mignon L. Clyburn
    I appreciate the testimony and your candid answers during the 
hearing. I would like to thank you for your service on the Federal 
Communications Commission.

    Question 1. The hearing touched on many themes that I believe the 
Committee should look at including process reform, the looming 
transition to IP and the Spectrum auction. However, an opportunity for 
the Chairman and the Commissioners to share what they see ``over the 
hill'' was not discussed at length. I would like to provide you with an 
opportunity to share what you believe are some issues that may not have 
been discussed at the hearing.
    Answer. The Commission should try to resolve, as soon as possible, 
the lack of interoperability in the lower 700 MHz band. Throughout the 
history of the mobile wireless industry, whenever it appeared that a 
lack of interoperability might arise with regard to a spectrum band the 
Commission was about to allocate for mobile wireless service, the FCC 
has either issued an order mandating interoperability, as it did in the 
1981 Cellular Report and Order, or strongly instructed the industry 
that it expects consumer equipment to operate over the entire range of 
that spectrum band. However, the he lower 700 MHz band is the only 
spectrum band the Commission has allocated that lacks interoperability 
this is preventing many American consumers, such as rural customers who 
subscribe to service from companies who won licenses in the A Block of 
the lower 700 MHz band, from enjoying the access to this innovation 
that other Americans can enjoy. The record is now complete and I hope 
the Commission staff can move quickly towards a decision that finds a 
cost effective solution to achieving interoperability in this band if 
the industry fails to reach consensus soon.
    The Commission should also continue to work expeditiously to 
conclude pending proceedings that seek to implement the specific 
mandates of the goals of the Communications and Video Accessibility 
Act.
    The FCC unanimously adopted a Notice of Proposed Rulemaking to 
consider lowering the cost of inmate calling services in December 2012. 
This Notice was the result of two longstanding Petitions for Rulemaking 
filed by inmates and their families complaining that the calling rates 
are excessive. Given that telephone contact is important for families 
to maintain contact which helps reduce recidivism rates, and the 
overall prison costs to society, and that most families paying these 
phone rates are low-income, I believe the Commission should quickly 
review the record, which just closed on April 22, and issue a decision 
in this proceeding.
    We must move forward with our quadrennial review of the FCC's media 
ownership rules in a way that leaves no stone unturned in assessing the 
potential negative impacts that media consolidation could have on 
female and minority owners of broadcast properties.

    Question 2. The spectrum auction is of the utmost importance. Is 
the Commission going to set a target date of 2014? What are the 
challenges with hitting this date?
    Answer. We anticipate adopting an order in the incentive auction 
proceeding in 2013 and conducting that auction in 2014. The 
Commission's central goal is to repurpose the maximum amount of 
spectrum for flexible licensed and unlicensed use in order to unleash 
investment and innovation, benefit consumers, drive economic growth, 
and enhance our global competitiveness, while at the same time enabling 
a healthy, diverse broadcast television industry.

    Question 3. The Commission's spectrum incentive auction process has 
the potential for channel reassignment. Nevada has over 300 translators 
and low power TV stations, any repacking will put a significant burden 
on these stations. Is the FCC taking this into consideration? Can the 
Commission preserve viewer access to local channels and still hit the 
target of 2014 for the auction to take place?
    Answer. The Commission's 2012 Voluntary Incentive Auction NPRM 
recognized the important service low power stations provide, 
particularly in rural areas, and sought comment on measures to ensure 
their programming continues to reach viewers--such as channel sharing, 
access to multicast channels of full power stations, and modifications 
to our displacement application process.

    Question 4. According to the National Broadband Plan wireless 
backhaul is ``critical to the deployment of wireless broadband and 
other wireless services,'' particularly ``when fiber is not proximate 
to a cell site.'' I understand that the existing wireless backhaul 
networks face a number of regulatory and technological constraints that 
limit their potential capacity. These independently-powerable services 
are also important to undergird FirstNet, the national first responder 
network. How is the FCC working to speed the deployment of wireless 
backhaul services in new frequency bands?
    Answer. Thank you very much for the question. I am very concerned 
about the challenges that hard to serve communities, such as those in 
rural areas, face. One way to help these communities is to find more 
affordable ways for carriers to deploy wireless services. I am pleased 
to report that since 2010, the Commission has been working diligently 
to revise its rules to facilitate the deployment of wireless backhaul.

   Thus far, 650 megahertz of additional spectrum has been made 
        available, mostly in rural areas, for wireless backhaul.

   We have revised our technical antenna standards in several 
        bands to allow the use of smaller antennas, which can lower 
        costs for consumers and operators.

   Additionally, the Commission eliminated unnecessary rules 
        which have hindered deployment in the microwave bands.

    The agency has also established build-out requirements in its 
microwave bands to ensure that licensees timely deploy networks and 
provide service to customers.

   For the 24 GHz Band microwave service, Local Multipoint 
        Distribution Service (LMDS) in the 28 and 31 GHz bands, and the 
        39 GHz Band microwave service, all licensees must demonstrate 
        substantial service at the end of their 10-year license term.

   In 2008 and 2010, the Wireless Telecommunications Bureau 
        granted extensions of the build-out deadline until June 1, 2012 
        to licensees in the 24 GHz, 39 GHz, and LMDS bands with the 
        expectation that the licensees would deploy networks and 
        provide service within the extended timeframe. As a result, 
        these licensees had at least 11\1/2\ years to meet their build-
        out requirements.

    Question 5. What is the current state of wireless backhaul 
deployment in the 24 and 39 GHz bands?
    Answer. To date, most wireless backhaul deployment has occurred in 
microwave bands lower than 24 or 39 GHz (for example, the 6 GHz, 11 
GHz, 18 GHz, and 23 GHz bands).
    IDT Spectrum (742 licenses) and Spectrum Holdings Technologies (199 
licenses), have reported that they have met the build out requirements 
for their licenses in the 39 GHz band.
    Staff informs me that another licensee, which held 103 out of 111 
issued 24 GHz licenses and was the second largest licensee in the 39 
GHz band with 634 licenses, built out only 48 of its 737 combined 24 
and 39 GHz licenses.

    Question 6. Has any company tried to develop new technology that is 
optimized for wireless backhaul in these new frequency bands?
    Answer. Staff informs me that equipment is available for licensees 
to deploy wireless back services in these frequency bands.

    Question 7. The FCC has moved to reclaim wireless backhaul spectrum 
in the 24 and 39 GHz range from a number of wireless backhaul providers 
despite the providers request for additional time to complete their 
roll-out. If the FCC ultimately reclaims spectrum in the 24 and 39 GHz 
range, how long will it take, including the necessary legal 
proceedings, for a new wireless backhaul provider to build-out a 
backhaul service with the seized spectrum?
    Answer. According to FCC staff, only one licensee failed to 
demonstrate compliance with the substantial service requirements for 94 
of its 24 GHz licenses and 595 of its 39 GHz licenses.
    Staff informs me that the Wireless Telecommunications Bureau 
(Bureau) denied that licensee's requests for an additional extension of 
time to demonstrate substantial service for these licenses, as well as 
its associated requests for waiver of the June 1, 2012 substantial 
service deadline.
    Based on these determinations, these licenses automatically 
terminated, by operation of Commission rule, as of June 1, 2012. The 
Bureau also denied similar requests for extensions in the LMDS band.
    The Commission seeks to make spectrum in inventory available in an 
efficient and timely manner. As a general matter, once a licensee 
forfeits a license and it reverts back to inventory, the FCC can move 
directly to re-auction.
    With respect to the 24 GHz and 39 GHz licensees that automatically 
terminated, a bankruptcy court injunction currently prohibits the 
Commission from reassigning those licenses until the previous licensee 
exhausts its appeal rights.

    Question 8. In at least one case on Appeal to the Full FCC 
Commission, a significant wireless backhaul provider, from whom the FCC 
seized spectrum, has proposed an aggressive build-out plan that will 
have its wireless backhaul network up and running in 18 months. If the 
FCC were to prioritize the rollout of wireless backhaul services, would 
it be more expedient to grant an 18 month extension and allow a planned 
expansion to move forward or can the FCC clear the spectrum and find 
another company to build-out the necessary wireless backhaul in less 
than 18 months?
    Answer. This issue has been raised by a licensee's Application for 
Review that seeks to overturn the Bureau's decision to terminate that 
party's licenses. I am carefully considering this application.

    Question 9. Will the FCC work to ensure that it takes all 
appropriate actions, including reviewing prior staff-driven efforts 
intended to strip existing wireless backhaul providers of their 
spectrum, to speed the build-out of needed wireless backhaul services?
    Answer. I intend to give careful consideration to the pending 
application for Commission review of the Bureau's action denying its 
extension request.
    I hope the Commission will continue to take all appropriate actions 
to promote the availability of wireless backhaul.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Barbara Boxer to 
                        Hon. Jessica Rosenworcel
    Question 1. On November 30, 2012, I along with eight of my 
colleagues sent a letter urging you not to relax the Commission's 
cross-ownership rules without responding to our concerns about the low 
levels of female and minority ownership of broadcast radio and 
television stations. In February, the Commission announced that it 
would be delaying its vote on the new rules as it awaits the results of 
a study by the Minority Media and Telecommunications Council regarding 
the effects of cross-ownership rules on minority ownership and 
newsgathering.
    Given the fact that MMTC's study is to be conducted by a broadcast 
industry analyst who is backed by the newspaper and broadcast industry 
associations and has publicly supported a relaxation of the cross-
ownership rules, do you believe the study represents an independent and 
impartial analysis of the impact of cross ownership on minority owners?
    Answer. The Minority Media and Telecommunications Council (MMTC) 
has requested that the Commission defer its vote in the 2010 
Quadrennial Review proceeding (Docket No. 09-182), which is mandated by 
Congress, and the Promoting Diversification of Ownership in the 
Broadcasting Services proceeding (Docket No. 07-294) in order to 
conduct a study on the impact of cross-ownership on minority and female 
broadcast ownership. Once MMTC has submitted the study to the 
Commission, I will be in a better position to comment on its findings. 
Generally, I have welcomed all stakeholders to submit studies and other 
information that would be helpful to Commission deliberations. The 
issues raised in the media ownership proceeding, including the 
promotion of journalism and viewpoint diversity, are essential to 
democratic discourse.

    Question 1a. Do you believe the study's methodology will provide 
the kind of analysis required by the Third Circuit Court of Appeals 
when it ordered the Commission to provide better justification for 
proposed diversity efforts?
    Answer. In Prometheus Radio Project v. Federal Communications 
Commission, the Court of Appeals for the Third Circuit remanded an 
earlier decision on media ownership to the Commission. In doing so, it 
specifically directed the agency to ``consider the effect of its rules 
on minority and female ownership.''
    Prior to my joining the Commission, the agency initiated a series 
of studies on media ownership, several of which examined issues related 
to minority ownership of broadcast stations and viewpoint diversity. 
Based on the results of those studies and comments submitted in the 
record, the Chairman of the agency chose to circulate a draft decision 
in the 2010 Quadrennial Review proceeding. I believe that this 
proceeding would still benefit from additional data and as a result, I 
have consistently encouraged a wide range of stakeholders to submit 
their views to the Commission. Yet until the MMTC study is before the 
agency, it is difficult to comment on its methodology and specific 
content. But I believe that it is essential for the Commission to build 
a record that is responsive to the remand of the Third Circuit Court of 
Appeals and consistent with the law.

    Question 1b. Does the Commission believe that radio contributes to 
viewpoint diversity?
    If the Commission were to conclude that radio does not contribute 
to diversity, how would that decision undermine future efforts to 
ensure that radio ownership is as diverse as the country it serves?
    Answer. Radio is a versatile medium that can provide local content 
and serve as an outlet for a wide range of viewpoints. Unfortunately, 
women and minorities are substantially underrepresented in the 
ownership of radio stations. Simply put, the ownership of full-power 
broadcast stations is not as diverse as the country it serves. The 
decrease in ownership has been especially acute following the 
elimination of the minority tax certificate program in 1995. As a 
result, at present, racial and ethnic minorities control only 8 percent 
of full-power radio stations and 3.6 percent of full-power television 
stations. In analyzing the 2010 Quadrennial Review proceeding, the 
Commission must be guided by its traditional goals of localism, 
diversity, and competition. I look forward to working with you on these 
issues going forward.

    Question 2. The Commission has acknowledged that rural consumers 
are experiencing significant problems receiving long distance or 
wireless calls on their landline telephones. The problem appears to be 
attributable to the use of IP-based least-cost routing providers.
    What does the Commission plan to do to ensure that such 
interconnection and reliability problems do not become more prevalent 
as our Nation's telephone networks transition to wireless and IP-based 
services?
    Answer. Failure to complete calls to rural subscribers can cut 
families off from relatives, lead rural businesses to lose customers, 
and create dangerous delays for public safety communications. This is 
unacceptable. That is why I supported a recent Notice of Proposed 
Rulemaking (FCC 13-18) that proposed new record-keeping requirements 
for originating facilities-based interstate service providers, 
including wireless providers and interconnected VoIP providers. 
Adopting these requirements would mean the Commission would have the 
data necessary to go after bad actors, vigorously enforce its rules, 
and bring an end to rural call completion problems. The comment cycle 
for this rulemaking closes on May 28, 2013. I am committed to acting 
quickly to work with my colleagues to adopt final rules in this 
proceeding.

    Question 2a. In light of the recent complaint filed in Federal 
court by VoIP providers claiming that the Commission lacks authority 
under the Communications Act to apply the no-blocking rule to VoIP 
calls, is additional authority needed from Congress to address the 
rural call completion problem?
    Answer. I believe that the Commission has the authority necessary 
to address the rural call completion problem. However, I acknowledge 
that the Commission has not yet formally determined whether VoIP 
services that are exchanged with local exchange carriers over the 
public switched telephone network should be classified as 
``telecommunications services'' or ``information services'' under the 
Communications Act. If the Commission relies on authority under the 
former, it would be able to ban call blocking and practices that result 
in the failure to complete calls to rural areas as ``unjust and 
unreasonable practice[s]'' under Section 210(b) of the Communications 
Act, among other possible provisions. If, however, the Commission 
relies on authority under the latter, it would need to exercise 
authority under its Title I jurisdiction to adopt rules reasonably 
ancillary to the effective performance of its statutorily mandated 
responsibilities, such as enforcing a prohibition on call blocking and 
related practices by carriers. But as a general matter, I would welcome 
any additional authority that Congress believes is necessary to address 
this problem.

    Question 3. More than half of U.S. broadband subscribers are 
subject to some form of bandwidth cap or usage-based pricing. Experts 
have pointed out that broadband caps are inefficient for addressing 
network congestion and may, instead, have anticompetitive effects. What 
does the Commission plan to do to ensure that caps do not undermine 
access to affordable, high-speed broadband?
    I believe that the Commission should monitor the evolution of data 
caps--and their impact on consumers. As a general matter, I support the 
proposition that those who use more of service may need to pay more--as 
is the case with usage-based pricing. Moreover, if these schemes are 
transparent and address real network capacity concerns, they can be a 
legitimate tool to manage network congestion. But I recognize that if 
data caps are set only to generate fees for exceeding the caps, this 
can reduce incentives for robust broadband deployment and hinder access 
to affordable, high-speed broadband.
                                 ______
                                 
 Response to Written Question Submitted by Hon. Frank R. Lautenberg to 
                        Hon. Jessica Rosenworcel
    Question. Nineteen states currently restrict local governments' 
ability to offer broadband, even in areas where companies won't make it 
available or affordable. I have previously introduced bills that would 
prevent states from restricting municipal broadband, and I am 
considering reintroducing this legislation. Do you agree that states 
should not be permitted to restrict municipalities from offering 
broadband to their residents?
    Answer. I agree. Access to broadband is essential for prosperity in 
the 21st century. In communities that lack broadband services, 
municipalities may offer the only solution to bringing affordable high-
speed services to their residents. I believe that state laws that 
restrict local governments from offering broadband to their residents--
particularly in unserved areas--can hinder broadband deployment and 
adoption.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Claire McCaskill to 
                        Hon. Jessica Rosenworcel
    Question 1. Chairman Genachowski and I have both written to the 
Federal Aviation Administration (FAA) encouraging the agency to revise 
its rules to allow for the expanded use of electronic devices during 
flight. The FAA has established an Aviation Rulemaking Committee (ARC) 
to look at possible changes to the rules, and the FCC has a 
representative on that committee, which will make recommendations to 
the FAA Administrator this summer.
    I am convinced, and I think most Americans agree, any safety 
concerns that might have once existed to justify the current rules have 
been addressed by advances in technology both on the airplane itself 
and in consumer electronics. While I recognize the decision is not one 
that rests with the FCC, as leaders on technology issues--and as one of 
only three government agencies with a seat at the table, and the only 
not under the Department of Transportation--I want to know if all of 
the Commissioners share those views on this issue.
    Answer. Yes. Demand for wireless services is growing at a 
breathtaking pace. Consumers have come to expect that they can rely on 
their electronic devices at all times--including when they travel. At 
the same time, it is necessary to make sure that consumers use their 
devices in a way that does not jeopardize public safety. To this end, I 
understand that the Federal Aviation Administration is closely 
examining the impact of the use of electronic devices on aircrafts. As 
part of this effort, the Commission is participating in the Federal 
Aviation Administration's Aviation Rulemaking Committee to examine this 
issue. I am hopeful that this process will result in revised policies 
that permit greater use of personal electronic devices during flight 
without harming public safety.

    Question 1a. Given Chairman Genachowski's stated position on the 
issue, can I trust that you will be directing the FCC's representative 
on the ARC to convey the opinion of the Commission that the rules 
should be changed and work to aggressively push the FAA to do so?
    Answer. While only the Chairman of the agency provides formal 
direction to the Commission's representative to the Aviation Rulemaking 
Committee, I support his efforts. Moreover, I believe that the 
Commission should continue to work with the Federal Aviation 
Administration to update rules limiting consumer access to personal 
electronic devices on aircraft.

    Question 2. Although the FCC's reforms to the Universal Service 
Fund's (USF) Lifeline program through its February 2012 order were much 
needed, and attempted to address duplicative Lifeline support, 
ineligibility, deceptive marketing and other concerns raised in my 
December 2011 letter to you on this topic, the reforms appear to have 
had little effect in limiting the rapid growth of the program.
    While I commend the Commission for its attempt to rein in the rapid 
growth of the Lifeline program and address the problems you inherited 
when the program was expanded to include wireless providers without any 
additional safeguards to prevent waste, fraud and abuse, even with the 
reform order in place the Lifeline program grew by 26 percent ($445 
million) last year. What additional action is the Commission 
considering to address waste, fraud and abuse in the Lifeline program?

    Question 2a. Specifically, would the Commission consider suspending 
new enrollment in the program while the reforms continue to be 
implemented? Would the Commission consider capping the program?
    Answer. The Lifeline program is an important part of keeping 
everyone in this country connected. After all, having access to 
telephone service is essential for calling emergency services, being 
able to secure a job, take care of loved ones, and manage routine 
interactions with government and with healthcare providers. But for 
this program to continue to work, the Commission must do more to ensure 
that it is free of waste, fraud, and abuse. Before I arrived at the 
agency, my colleagues took steps to improve the Lifeline program. To 
date, their reform efforts have already saved more than $200 million in 
2012 and are on track to save as much as $400 million in 2013. In 
addition, the number of Lifeline subscribers has declined each month 
since August 2012 and now stands at 13.2 million down from 18.2 
million.
    This is a good beginning. But we need to do more--because this is a 
program that needs mending, not ending. To start, I believe we should 
do more auditing. In particular, I think the agency's Office of 
Inspector General should be tasked with a review of this program and 
the effectiveness of the reforms already put in place. Moreover, I 
recognize that in the Lifeline reforms adopted by my colleagues last 
year, they specifically contemplated that after these reforms went into 
effect the agency would be in a position to determine if a specific 
budget for the program is necessary. Furthermore, I believe we should 
revisit questions raised in our last rulemaking on this subject--
including if the $9.25 per month subsidy is the appropriate monthly 
support amount for this program. However, given that the number of 
Lifeline subscribers has declined substantially, I do not believe 
suspension of new enrollment would be prudent at this time.

    Question 2b. We are quick in Washington to create new programs but 
what we don't do often enough is reevaluate those programs to make sure 
they're still needed. The FCC created the Lifeline program nearly 30 
years ago to make sure local phone service was still affordable for 
low-income Americans following the breakup of AT&T in 1984. Because 
technology has changed and competition has grown, basic 
telecommunications services are as affordable as ever. I am wondering 
if the Commission has recently looked at whether the Lifeline program 
is even still necessary, and if not if you would be willing to do so?
    Answer. As noted above, the Lifeline program is an important part 
of keeping low-income consumers connected to loved ones, emergency 
services, healthcare providers and employment opportunities. However, 
across the board, all of our universal service programs merit our 
regular review, attention, and care. To this end, the agency must 
continuously evaluate the Lifeline program to ensure that it is meeting 
its intended purpose under Section 254(b)--that quality voice services 
are available at affordable rates for low-income consumers throughout 
the Nation.

    Question 3. In order to keep up with the demand for spectrum, many 
in the private-sector believe efforts need to be taken to clear some of 
the federally-occupied spectrum for commercial use, most significantly 
spectrum currently occupied by the Department of Defense. Chairman 
Genachowski and I have discussed this issue but I am interested in the 
views of all of the commissioners.
    With the exponential rise in demand for mobile broadband services, 
we need to look at all potential resources for spectrum repurposing--
including Federal Government users. The GAO recently reported that the 
total percentage of the most highly-valued spectrum exclusively or 
predominantly used by the Federal Government is as high as 57 percent. 
Given Federal agency budgets, many of these systems are not up-to-date 
and thus operate inefficiently, and some Federal uses could be served 
by commercial mobile providers. Are there specific instances in which 
you believe Federal spectrum could be operated more efficiently?
    Answer. Federal authorities have substantial spectrum assignments. 
Critical missions throughout the government are dependent on access to 
our airwaves. Nonetheless, we are on a hunt for new opportunities for 
commercial spectrum, in order to reach the 500 megahertz benchmark for 
new wireless broadband use in the Executive Order from President Obama 
more than two years ago.
    In accord with the Commercial Spectrum Enhancement Act, the 
Commission recently notified the National Telecommunications and 
Information Administration of plans to auction the 1755-1780 MHz band 
and the 1695-1710 MHz band. These bands are particularly well suited 
for commercial use because they can be paired with other spectrum bands 
required to be auctioned by the Middle Class Tax Relief and Job 
Creation Act. Specifically, the 1755-1780 MHz band can be paired with 
the 2155-2180 MHz band and the 1695-1710 MHz band can be paired with 
the 2095-2110 MHz band.
    But ultimately, I think it is time for a fresh approach to Federal 
spectrum use. Our traditional approach to repurposing Federal spectrum 
entailed a three-step process--clearing Federal users, relocating them, 
and then auctioning the cleared spectrum for new commercial use. 
Although this process has worked well in the past, it will be harder 
from here on out. After all, more government functions than ever before 
are traveling over our airwaves. Furthermore, finding new spectrum for 
government relocation and the funds to support moving is growing more 
challenging.
    To be successful going forward, I believe we need a new paradigm. I 
believe Federal Government users must share in the benefit from 
repurposing their spectrum. To this end, it is time to develop a series 
of incentives to serve as the catalyst for freeing more Federal 
spectrum for commercial use. We need to find ways to reward Federal 
authorities for efficient use of their spectrum so that they see 
benefit in commercial reallocation and not just loss. I believe if we 
align incentives properly, we will both make Federal use of this scarce 
resource more efficient and create new opportunities for commercial 
use.

    Question 4. In addition to this Committee I also serve on the Armed 
Services Committee. I have started to look at ways we can incentivize 
Federal agencies--including the Department of Defense--to clear or 
share spectrum, to free up more spectrum for commercial auction. Based 
on your experience working with Federal spectrum users, what ideas can 
you offer for creating such incentives?
    Answer. As noted above, I think it is necessary to start 
identifying ways to incentivize Federal authorities to be more 
efficient with spectrum. We need a system that rewards them for 
reducing their current allocations and using the spectrum they have 
more efficiently. To this end, we need to find ways that reward Federal 
authorities when they can identify a swath of their airwaves that can 
be repurposed and transitioned from Federal to commercial use. In 
short, they must see value from using spectrum efficiently instead of 
just seeing loss from commercial reallocation. These rewards could come 
in a variety of forms. They could be straightforward and financial--
under which a certain portion of the revenue from the commercial 
auction of their previously held spectrum would be reserved for the 
Federal entity releasing the spectrum. They could also involve revenue 
from leasing for shared access during a period of transition to cleared 
rights. They also might involve incentives through the budget and 
appropriations process. Finally, it may be useful to consider the 
development of synthetic currency, as proposed by the President's 
Council of Advisors on Science and Technology, to provide a consistent 
way to reward efficiency.
    In the end, when it comes to transitioning spectrum from Federal to 
commercial use, we need not only use sticks--we should explore carrots. 
I think the latter is bound to facilitate more opportunity in spectrum 
bands. Given the multiplying number of wireless devices in our lives 
and the growing demands on our airwaves--licensed and unlicensed--now 
is not a moment too soon.

    Question 5. Last year Congress passed a Rubio-McCaskill resolution, 
S.Con.Res. 50, stating that Internet infrastructure and content should 
remain free from international regulation. Members of the U.S. 
delegation to the ITU conference in Dubai have indicated that Congress 
sending a clear message on the issue was helpful in their negotiations 
and that our efforts on this issue should continue, especially since 
those nations that want greater regulation of Internet infrastructure 
and content will certainly continue in their efforts. What more can 
Congress be doing to help promote a free and open Internet around the 
world?
    Answer. Last year, I had the privilege of serving as part of the 
United States delegation to the Asia-Pacific Economic Cooperation in 
St. Petersburg, Russia. The meeting I attended was a preparatory 
meeting before the International Telecommunication Union's World 
Conference on International Telecommunications (WCIT) in Dubai last 
December. I was able to witness firsthand the benefit of strong 
bipartisan support from the Congress. To this end the unity of purpose 
embodied in S.Con.Res. 50 will continue to be helpful going forward as 
the United States seeks to promote a globally free and open Internet, 
including in the World Telecommunication/ICT Policy Forum (WTPF) taking 
place in May this year in Geneva.

    Question 5a. A handful of countries, such as China and Iran, want 
to heavily censor the Internet content people can access inside their 
borders, while many other nations are simply looking for ways to 
generate revenue from Internet traffic that moves through their 
country, much in the same way they have done with voice communications 
for years. Are there policies the United States can and should be 
promoting around the globe to help other nations develop their 
telecommunications infrastructure, unleash the economic activity that 
comes with it, and thus remove their desire to use global Internet 
traffic as a revenue source?
    Answer. The discussions at the WCIT in Dubai made clear that it is 
necessary to work closely with developing countries to highlight the 
social and economic benefits of widespread Internet access. The 
Commission is working closely with the Department of State and other 
agencies to continue outreach efforts that focus on promoting an 
environment for broadband development that creates opportunities for 
the private sector to invest in innovative technologies. For example, 
the United States has encouraged countries to adopt transparent policy 
and legal frameworks; open telecommunications markets to competition; 
adopt licensing and taxation reforms; establish transparent universal 
service programs to support telecommunications instead of traditional 
subsidies from international services; and encourage the efficient and 
innovative use of spectrum for mobile broadband. Moreover, in my own 
international work, including at the Asia-Pacific Economic Cooperation 
in St. Petersburg, Russia and the World Mobile Congress in Barcelona, 
Spain, I have and will continue to emphasize that regulations that seek 
to control revenue flows will hinder investment and impede broadband 
growth.

    Question 6. The upcoming incentive auctions have been pitched to 
Congress as a market-based mechanism that would help put spectrum in 
the hands of those most capable of unleashing its economic potential. 
That was an appealing idea, and on that basis Congress authorized you 
to conduct them. Now there is some concern that the Commission is 
contemplating going beyond what will be freed up by the auctions and is 
considering repurposing or reallocating many more megahertz in rural 
areas just through repacking broadcasters and eliminating LPTV and 
translator service. Is your intention to deal only with what is freed 
up by auctions, or is your intention to reallocate as much spectrum 
from broadcasters to broadband providers as possible?
    Answer. The Middle Class Tax Relief and Job Creation Act directs 
the Commission to conduct an incentive auction involving broadcast 
spectrum, followed by a repacking of remaining broadcasters in order to 
free airwaves for a commercial wireless broadband auction. In doing so, 
the Commission must evaluate the broadcast television spectrum, 
including the spectrum made available through the required reverse 
auction and used by low power stations. We have a duty to follow the 
law and act consistently with the statute. I will certainly do so.
    As a general matter, however, there is greater demand for wireless 
spectrum in congested urban areas and lesser demand in sparsely 
populated rural areas. As a result, there may be limited need to 
reallocate spectrum in rural areas where low power television and 
translators provide service to local communities. But the specific 
situations in individual communities, in light of their geography and 
spectrum interests, may vary.

    Question 6a. Has the Commission studied the impact of reclaiming 
spectrum on LPTV and translator service, especially in more rural 
states that rely heavily on them to reach areas where no other service 
is available?
    Answer. In our Notice of Proposed Rulemaking concerning the 
upcoming spectrum auctions (FCC 12-118), the Commission specifically 
recognized that ``[l]ow power television stations are a source of 
diverse and local television programming, and television translator 
stations are an important free, over-the-air television resource in 
rural and remote locations.'' I agree. The agency sought comment on 
``measures to help ensure that important programming provided by low 
power television and television translator stations continues to reach 
viewers.'' My office is in the process of reviewing the comments 
submitted in response to this rulemaking.
    It is important to note, however, that the Middle Class Tax Relief 
and Job Creation Act provided specific protections in the repacking 
process strictly to full power and Class A stations. At the same time, 
Congress made clear that the spectrum usage rights of low power 
television stations would not be altered by the law. As a result, the 
Commission must work within the parameters of the statute as it 
determines how best to preserve access to local programming, including 
programming broadcast by low power television stations and through the 
use of translators.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Amy Klobuchar to 
          Hon. Jessica Rosenworcel (Referenced in the hearing)
    Question. An issue I've been interested in for several years is 
metal theft. It's a crime that we see across the country and that tends 
to increase with rising metal prices. And in the past, the FBI has put 
out information on the threat posed to critical infrastructure by metal 
theft. It can also be extremely costly to many different industries, 
including the telecom industry.
    I've introduced legislation with Senators Graham, Schumer and 
Hoeven, which would make it an explicit Federal crime to steal metal 
from critical infrastructure and take various steps to help prevent 
metal theft more broadly. Most states have enacted laws that try to 
address the problem, but they are something of a patchwork. My bill 
will not pre-empt existing state laws, but rather will aim to fill in 
gaps and allow the Federal Government to partner with state and local 
authorities.
    Can you talk about how metal theft can cause damage to telecom 
infrastructure and lead to disruptions to telecom service and to what 
degree can it cause problems for public safety? Is the FCC doing 
anything currently to address this issue?
    Answer. Shortly after Hurricane Sandy struck last year, I visited 
some of the communications facilities in New York that were hard hit by 
the storm. I will never forget the messy tangle of wires and the mass 
of technicians working inside through the night to get our networks 
back up and running. But I was also struck by the guards standing 
outside on the street in front of a giant container, filled with metal 
pieces from the repair work required following the storm. On top of 
everything else required in the aftermath of the hurricane, it was 
necessary to take these steps to prevent metal theft and the additional 
damage it could cause to communications infrastructure.
    So I understand that metal theft can cause network outages that 
disrupt service and endanger lives. It can sever communities from first 
responders by harming access to emergency 911 systems. Moreover, 
replacing and repairing damaged communications infrastructure is 
costly. In fact, the Department of Energy has estimated that metal 
theft costs businesses across the country roughly $1 billion each year. 
While I am not aware of ongoing Commission initiatives regarding metal 
theft, I would be pleased to work with you to address this problem.
                                 ______
                                 
 Response to Written Questions Submitted by Hon. Richard Blumenthal to 
                        Hon. Jessica Rosenworcel
Broadband Competition
    Question 1. In 2010 the FCC stated in the National Broadband Plan 
that, ``. . . there are reasons to be concerned about wireline 
broadband competition in the United States. Whether sufficient 
competition exists is unclear and, even if such competition presently 
exists, it is surely fragile.''
    The plan further stated that, ``To ensure that the right policies 
are put in place so that the broadband ecosystem benefits from 
meaningful competition as it evolves, it is important to have an 
ongoing, data-driven evaluation of the state of competition,'' and that 
``additional data are needed to more rigorously evaluate broadband 
competition.''
    The Plan specifically recommended the Commission undertake a number 
of reforms to data collection including:

  1.  ``[C]ollect broadband availability data at the census block 
        level, by provider, technology and offered speed.''

  2.  ``[C]ollect data on advertised prices, prices actually paid by 
        subscribers, plans, bundles and promotions of fixed and mobile 
        broadband services that have material penetration among users, 
        as well as their evolution over time, by provider and by 
        geographic area.'' The Plan stated that in particular, it ``is 
        crucial that the FCC track and compare the evolution of pricing 
        in areas where two service providers offer very high peak 
        speeds with pricing in areas where only one provider can offer 
        very high peak speeds.''

  3.  ``[C]ollect information related to switching barriers, such as 
        early termination fees and contract length.''

    The National Broadband Plan also recommended that the Commission 
establish a general policy of making the data it collects available to 
the public, including via the Internet in a broadband data depository.
    These recommendations reflect the comments of the Department of 
Justice, who told the Commission that it ``. . .should expand its 
efforts to include an assessment of the nature and extent of 
competition in each local broadband market.''
    Nearly two years after the National Broadband Plan was released, 
the Commission issued a Notice of Proposed Rulemaking (NPRM) that 
encapsulated many of these recommendations. The Commission has yet to 
act on this NPRM.
    Chairman Genachowski, Commissioners McDowell, Clyburn, Rosenworcel 
and Pai, do you agree with the National Broadband Plan's 
recommendations on the need to collect these additional broadband data? 
Do you think the Commission, policymakers and the public have the 
appropriate data to determine if the Commission's competition policies 
are, in the words of the Department of Justice, using the appropriate 
``policy levers. . . to produce superior outcomes,'' and if not, what 
additional data is needed?
    Answer. I agree that the Commission should be collecting these 
additional data. With more information, we will be able to improve our 
assessment of competition and enhance our broadband policies. Back in 
2011, before I joined the Commission, the agency adopted a Notice of 
Proposed Rulemaking to consider updates to the Commission's broadband 
data collection efforts. At present, the Commission collects broadband 
subscription data on a census tract basis. Yet because more detail is 
needed, the agency has relied on the National Telecommunications and 
Information Administration's National Broadband Map to inform its 
broadband policy initiatives. The National Broadband Map shows 
broadband availability at the more granular census block level data and 
includes information on the speeds offered by provider type.
    Going forward, the Commission must continue to work with the 
National Telecommunications and Information Administration to make sure 
that the National Broadband Map is kept up to date with the information 
we need. In addition, I believe that the Commission should collect more 
data that is relevant to consumers, including information on the price 
and structure of broadband services offered. I also agree that these 
data should be made public to the greatest extent possible. Moreover, 
we should make this information available in full electronic, machine-
readable formats. By making it public in this fashion we can turn to 
others to help us process the data and identify meaningful trends that 
deserve our attention, our concern--or even our praise.
Sports Blackouts
    Question 2. Over one year ago, I wrote the FCC and requested the 
agency allow public comment on a petition for rulemaking asking the 
Commission to reexamine the Sports Blackout Rule. This rule is nearly 
forty years old and, along with other Federal rules and league 
policies, is one of many obstacles making it unreasonably difficult for 
fans to watch their favorite teams play.
    I thank the Commission for taking my letter seriously and opening a 
Notice of Inquiry (NOI) to solicit comments from the public and other 
stakeholders. However, that docket was opened in January of 2012 and 
the Commission has yet to take any further action.
    The response in the proceeding was overwhelming. The NOI garnered 
thousands of comments from consumers impacted by local sports 
blackouts, including elderly and disabled sports fans unable to attend 
live games. The NFL's revised local blackout policy seems to have done 
little in the last regular season to help the most heavily impacted 
markets. Commenters have proposed several options, including preserving 
the status quo, eliminating the Sports Blackout Rule altogether, or 
adopting a sunset period requiring a public interest showing to renew 
the rule.
    Chairman Genachowski, Commissioners McDowell, Clyburn, Rosenworcel 
and Pai, what else can the Commission do to help fans unable to watch 
their favorite teams compete?
    Answer. When a game is blacked out and unavailable for viewing in 
the local community, fans often contact the Commission--irritated and 
upset that they cannot watch their hometown team. Although I appreciate 
that the NFL has revised its local blackout policy, I understand that 
15 games were still blocked in 2012. This is unfortunate. Accordingly, 
I would support the Commission reexamining the policies behind this 
forty year old rule in a Notice of Proposed Rulemaking and formally 
determining if retaining this rule remains in the public interest.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
                        Hon. Jessica Rosenworcel
    Question 1. Section 706(b) of the 1996 Telecommunications Act 
requires the Commission to conduct a regular inquiry into ``whether 
advanced telecommunications capability is being deployed to all 
Americans in a reasonable and timely fashion.'' If answered in the 
negative, the Commission is further directed by law to ``take immediate 
action to accelerate deployment of such capability by removing barriers 
to infrastructure investment and by promoting competition in the 
telecommunications market.''
    Commissioner Rosenworcel, your official statement upon the release 
of the August 2012 ``706 Report'' referenced an OECD ranking in which 
the United States ranks 15th in the world in fixed broadband 
penetration. You said: ``Until the data unequivocally demonstrate that 
we [lead the world in broadband], how can the answer to our Section 706 
inquiry--whether advanced telecommunications capability is being 
deployed to all Americans in a reasonable and timely fashion--be 
anything but no?''

    Question 1a. Is your view of the ``706'' determination as simple as 
that--that we are not deploying advanced telecommunications services in 
a reasonable and timely manner if the United States is not ranked 
number one in a particular OECD broadband ranking?
    Answer. Section 706 asks the Commission to examine ``whether 
advanced telecommunications capability is being deployed to all 
Americans in a reasonable and timely fashion.'' The Commission 
considers a broad range of broadband data in its Section 706 inquiry, 
including but not limited to the number of households served by 
broadband, the number of Americans that have adopted broadband 
services, and international broadband data. This is as it should be.
    However, I believe that the state of broadband deployment in the 
United States relative to the rest of the world is a relevant factor to 
the agency's inquiry into whether broadband is being deployed in a 
``reasonable and timely fashion.'' Broadband deployment is a key driver 
of economic growth both here in the United States and abroad. If the 
United States lags behind its peers in broadband deployment and 
adoption, we will also lag behind in our ability to compete in the 
global economy. Failure to encourage a robust broadband infrastructure 
that is competitive with the most advanced nations will lead to a loss 
in American jobs and business.

    Question 1b. Did you or your staff analyze the particular OECD 
ranking cited in your comments? If so, would you provide the Committee 
with your analysis?
    Answer. My staff and I reviewed the Commission's broadband reports, 
which are publicly available documents. The Commission's Eighth 
Broadband Progress Report (FCC 12-90) and a companion report prepared 
by the agency's International Bureau titled the International Broadband 
Data Report (DA 12-1334) cite to and analyze international broadband 
data from the Organization for Economic Co-operation and Development 
and other sources.

    Question 1c. If a future ``706 Report'' is answered in the 
affirmative, do the actions taken at the FCC in its Open Internet 
Order--under authority claimed to exist because of the negative 706(b) 
determination--become unauthorized?
    Answer. No. It is my understanding that the Open Internet Order 
(FCC 10-201) relied for its statutory authority not only on section 
706(b) of the Telecommunications Act of 1996, but also on other sources 
of authority. Those statutory bases include section 706(a) of the 
Telecommunications Act of 1996 and Title III of the Communications Act 
of 1934, among other provisions. These are discussed in some detail in 
paragraphs 115-137 of the Open Internet Order. I acknowledge, however, 
that the Open Internet Order is under review before the Court of 
Appeals for the District of Columbia Circuit.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                        Hon. Jessica Rosenworcel
    Question 1. The hearing touched on many themes that I believe the 
Committee should look at including process reform, the looming 
transition to IP and the Spectrum auction. However, an opportunity for 
the Chairman and the Commissioners to share what they see ``over the 
hill'' was not discussed at length. I would like to provide you with an 
opportunity to share what you believe are some issues that may not have 
been discussed at the hearing.
    Answer. Thank you for this opportunity.
    In addition to incentive auctions and our progress toward an 
increasingly IP-based telecommunications infrastructure, I believe we 
must focus additional energy on two things: providing incentives to 
help free Federal spectrum for new commercial use and updating the E-
Rate program for the digital age.
    First, demand for our airwaves is growing at a breathtaking pace. 
We are a nation with more mobile phones than people. More than half of 
these phones are smartphones, which require 35 times the bandwidth of 
wireless phones with only voice capability. Tablets, which are now 
owned by one in five households, use 121 times the bandwidth of 
wireless phones with only voice capability. But this is only the 
beginning. By the end of the decade, there will be 50 billion machine-
to-machine devices communicating wirelessly worldwide.
    We need to prepare for this demand for spectrum. Right now, 
courtesy of the Middle Class Tax Relief and Job Creation Act, the 
Commission has a series of traditional spectrum auctions on tap. In 
addition, it has new authority to repurpose spectrum for commercial 
mobile broadband use through incentive auctions. Nonetheless, more 
action is required.
    That is why I think it is time to take a fresh look at Federal 
spectrum use. Our traditional approach to repurposing Federal spectrum 
entailed a three step process--clearing Federal users, relocating them, 
and then auctioning the cleared spectrum for new commercial use. But 
while this process may have worked in the past, more government 
functions than ever before are traveling over our airwaves. 
Consequently, it is growing harder to find spectrum for Federal 
relocation.
    To be successful going forward, I believe Federal users must share 
in the benefit from repurposing their spectrum. We must develop a 
series of incentives to serve as the catalyst for freeing more Federal 
spectrum for commercial use. We should find ways to reward Federal 
authorities for efficient use their spectrum resource. They need to see 
benefit in commercial allocation, and not only loss. That is why I 
believe if we align incentives properly, we will make Federal use more 
efficient and create new opportunities for commercial use.
    Second, we must update the E-Rate program to meet 21st century 
education needs. This is a program that supports communications 
services and broadband in schools and libraries across the country. Yet 
year-in and year-out, the demand for E-Rate support is more than double 
the roughly $2.3 billion the Commission now makes available annually. 
Moreover, the Commission's own survey indicates that 80 percent of 
schools and libraries believe that their broadband connections do not 
meet their current needs. Access to adequate broadband capacity in our 
schools and libraries is not a luxury--it is a necessity for our next 
generation to be able to compete.
    That is why I believe we should create E-Rate 2.0. We can protect 
what we have already done with this program, build on it, and put the 
program on a course to provide higher speeds and greater opportunities 
in the days ahead. To do so, we need to set new capacity goals. To this 
end, I believe that by the 2015 school year, every school should have 
access to 100 Megabits per 1000 students. Before the end of the decade, 
every school should have access 1 Gigabit per 1000 students.

    Question 2. The spectrum auction is of the utmost importance. Is 
the Commission going to set a target date of 2014?
    Answer. I have repeatedly called for a clear timeline for our 
incentive auctions--and all of our spectrum auctions. A date certain 
will focus all stakeholders, lead to capital formation, provide 
certainty for broadcasters, and help ensure success for all of our 
upcoming spectrum auctions.

    Question 2a. What are the challenges with hitting this date?
    Answer. The incentive auctions that Congress called on the 
Commission to implement will be the most complex spectrum auctions ever 
conducted anywhere in the world. We must develop a first of its kind 
reverse auction to benefit broadcasters, devise a method to repack 
remaining broadcasters, and create a band plan to give opportunities to 
wireless carriers in the 600 MHz band. But while we certainly face 
challenges, the Commission has plenty of experience on which to draw. 
Over the course of the last two decades, the agency has held more than 
80 auctions; it has issued more than 36,000 licenses; and it has raised 
more than $50 billion for the United States Treasury. The Commission's 
past simultaneous multiple round ascending auctions have been a model 
for governments and commercial wireless providers across the globe.

    Question 3. The Commission's spectrum incentive auction process has 
the potential for channel reassignment. Nevada has over 300 translators 
and low power TV stations, any repacking will put a significant burden 
on these stations. Is the FCC taking this into consideration? Can the 
Commission preserve viewer access to local channels and still hit the 
target of 2014 for the auction to take place?
    Answer. In the Notice of Proposed Rulemaking in the Matter of 
Expanding the Economic and Innovation Opportunities Through Incentive 
Auctions (FCC 12-118), the Commission recognized that ``[l]ow power 
television stations are a source of diverse and local television 
programming, and television translator stations are an important free, 
over-the-air television resource in rural and remote locations.'' The 
agency sought comment on ``measures to help ensure that important 
programming provided by low power television and television translator 
stations continues to reach viewers.'' My office is in the process of 
reviewing the comments submitted in response to this rulemaking.
    It is important to note, however, that the Middle Class Tax Relief 
and Job Creation Act provided specific protections in the repacking 
process strictly to full power and Class A stations. At the same time, 
Congress made clear that the spectrum usage rights of low power 
television stations would not be altered by his law. As a result, the 
Commission must work within the parameters of the statute in 
determining how best to preserve access to local programming, including 
programming broadcast by low power stations.
    I will work diligently to implement this law as quickly and 
effectively as possible to meet the goals of Congress. I believe a 2014 
target for the auction remains achievable. However, I also recognize 
that as we receive additional input from stakeholders, we need to be 
open to adjusting this target, if necessary.

    Question 4. According to the National Broadband Plan wireless 
backhaul is ``critical to the deployment of wireless broadband and 
other wireless services,'' particularly ``when fiber is not proximate 
to a cell site.'' I understand that the existing wireless backhaul 
networks face a number of regulatory and technological constraints that 
limit their potential capacity. These independently-powerable services 
are also important to undergird FirstNet, the national first responder 
network. How is the FCC working to speed the deployment of wireless 
backhaul services in new frequency bands?
    Answer. Backhaul is the essential artery from the network edge to 
the network core. Traditionally, backhaul has been the province of 
copper circuits and fiber optic lines. But as our networks rely 
increasingly on wireless technologies, microwave facilities are now 
often used to transmit data between cell sites and between cell sites 
and network backbones.
    As recommended by the National Broadband Plan, the Commission 
initiated a proceeding in 2010 to facilitate the deployment of wireless 
backhaul. Overall, through this proceeding, the Commission has made 650 
megahertz of additional spectrum available for wireless backhaul, most 
of which in rural areas. While some of the issues involved in this 
proceeding were addressed before I took office last year, I did vote to 
approve an order last fall that helped streamline many technical rules, 
such as updating microwave backhaul efficiency standards, providing 
higher capacity channels, and allowing use of smaller antennas. These 
policies decreased costs and increased flexibility, resulting in 
lowered barriers to entry in rural areas where laying new fiber for 
backhaul can be prohibitively expensive. I also voted to eliminate 
unnecessary rules that hindered deployment in the microwave bands.
    In addition, the Commission adopted build-out requirements before I 
took office that I understand were intended to encourage deployment of 
wireless backhaul. For instance, licensees in the 24 GHz Band microwave 
service, Local Multipoint Distribution Service in the 28 GHz and 31 GHz 
bands, and the 39 GHz Band microwave service were initially required to 
demonstrate substantial service at the end of their 10-year license 
term, though that deadline was extended twice by the Commission's 
Wireless Bureau.

    Question 4a. What is the current state of wireless backhaul 
deployment in the 24 and 39 GHz bands?
    Answer. As I understand it, most wireless backhaul deployment has 
occurred in microwave bands lower than 24 GHz or 39 GHz bands 
(including, for example, in the 6 GHz, 11 GHz, 18 GHz, and 23 GHz 
bands). IDT Spectrum, which holds 742 licenses, and Spectrum Holdings 
Technologies, which holds 199 licenses, have reported that they have 
met build-out requirements for their licenses in the 39 GHz band. 
Fibertower, which held 103 licenses in the 24 GHz band and 634 licenses 
in the 39 GHz band, built out 48 of its 737 combined 24 and 39 GHz 
licenses.

    Question 4b. Has any company tried to develop new technology that 
is optimized for wireless backhaul in these new frequency bands?
    Answer. My understanding is that licensees in both the 24 GHz and 
39 GHz bands report that equipment is available for wireless backhaul 
in these bands.

    Question 5. The FCC has moved to reclaim wireless backhaul spectrum 
in the 24 and 39 GHz range from a number of wireless backhaul providers 
despite the providers request for additional time to complete their 
roll-out.
    If the FCC ultimately reclaims spectrum in the 24 and 39 GHz range, 
how long will it take, including the necessary legal proceedings, for a 
new wireless backhaul provider to build-out a backhaul service with the 
seized spectrum?
    Answer. As I understand it, one licensee failed to meet the 
construction deadlines for a number of its 24 GHz and 39 GHz licenses. 
Using its delegated authority, the Wireless Telecommunications Bureau 
declined to extend the deadlines for construction beyond June 1, 2012, 
which led to the termination of the licenses. Note that the Wireless 
Telecommunications Bureau also denied similar request for extensions in 
the Local Multipoint Distribution Service in the 28 GHz and 31 GHz 
bands.
    While as a general matter, I believe that the Commission should set 
timelines for auctioning spectrum that is in our inventory, the 
specific 24 GHz and 39 GHz licenses that terminated last year are 
subject to a bankruptcy court injunction that prevents us from 
auctioning the licenses at this time.

    Question 6. In at least one case on Appeal to the Full FCC 
Commission, a significant wireless backhaul provider, from whom the FCC 
seized spectrum, has proposed an aggressive build-out plan that will 
have its wireless backhaul network up and running in 18 months. If the 
FCC were to prioritize the rollout of wireless backhaul services, would 
it be more expedient to grant an 18 month extension and allow a planned 
expansion to move forward or can the FCC clear the spectrum and find 
another company to build-out the necessary wireless backhaul in less 
than 18 months?
    Answer. The Commission should strive to encourage timely and 
efficient deployment of spectrum. One tool that the Commission uses to 
accomplish that goal is construction deadlines that prevent licensees 
from warehousing spectrum that they are not using. If a licensee fails 
to meet the deadlines, the Commission should act quickly to make the 
spectrum available to other licensees who may be able to put the fallow 
spectrum to use.

    Question 7. Will the FCC work to ensure that it takes all 
appropriate actions, including reviewing prior staff-driven efforts 
intended to strip existing wireless backhaul providers of their 
spectrum, to speed the build-out of needed wireless backhaul services?
    Answer. I make every effort to act quickly when considering 
petitions to review staff work. With respect to the petition from 
Fibertower, my office met with the company's representatives shortly 
after a draft order was circulated to the Commissioners. I voted on the 
matter within days of that meeting.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Barbara Boxer to 
                             Hon. Ajit Pai
    Question 1. On November 30, 2012, I along with eight of my 
colleagues sent a letter urging you not to relax the Commission's 
cross-ownership rules without responding to our concerns about the low 
levels of female and minority ownership of broadcast radio and 
television stations. In February, the Commission announced that it 
would be delaying its vote on the new rules as it awaits the results of 
a study by the Minority Media and Telecommunications Council regarding 
the effects of cross-ownership rules on minority ownership and 
newsgathering.
    Given the fact that MMTC's study is to be conducted by a broadcast 
industry analyst who is backed by the newspaper and broadcast industry 
associations and has publicly supported a relaxation of the cross-
ownership rules, do you believe the study represents an independent and 
impartial analysis of the impact of cross ownership on minority owners?
    Answer. MMTC has indicated to the Commission that its study will be 
peer reviewed and conducted in accordance with refereed journal 
standards. Before reaching any conclusions about the study's merit, I 
will need to review the completed study along with any accompanying 
peer review.

    Question 1a. Do you believe the study's methodology will provide 
the kind of analysis required by the Third Circuit Court of Appeals 
when it ordered the Commission to provide better justification for 
proposed diversity efforts?
    Answer. Because I have not seen or read the completed study, I have 
not yet reached any conclusions on this issue.

    Question 1b. Does the Commission believe that radio contributes to 
viewpoint diversity?
    Answer. In the Notice of Proposed Rulemaking issued in the 2010 
Quadrennial Review (and before I took office), the Commission 
tentatively concluded that ``radio stations are not the primary outlets 
that contribute to local viewpoint diversity.''

    Question 1c. If the Commission were to conclude that radio does not 
contribute to diversity, how would that decision undermine future 
efforts to ensure that radio ownership is as diverse as the country it 
serves?
    Answer. I believe that the Commission should move forward quickly 
to implement many proposals advanced by MMTC to enhance ownership 
diversity, such as establishing an incubator program and relaxing 
restrictions on foreign investment. My support for these proposals does 
not depend on the strength of the link between radio and local 
viewpoint diversity.

    Question 2. The Commission has acknowledged that rural consumers 
are experiencing significant problems receiving long distance or 
wireless calls on their landline telephones. The problem appears to be 
attributable to the use of IP-based least-cost routing providers.
    What does the Commission plan to do to ensure that such 
interconnection and reliability problems do not become more prevalent 
as our Nation's telephone networks transition to wireless and IP-based 
services?
    Answer. Sound engineering and testing should be the hallmarks of 
the Nation's IP transition. That's precisely why the Commission needs 
to commence an All-IP Pilot Program to ensure that we make the switch 
in a thoughtful manner and learn about potential problems before they 
arise.

    Question 3. In light of the recent complaint filed in Federal court 
by VoIP providers claiming that the Commission lacks authority under 
the Communications Act to apply the no-blocking rule to VoIP calls, is 
additional authority needed from Congress to address the rural call 
completion problem?
    Answer. As a general matter, the Commission has broad authority to 
ensure that calls dialed from one telephone number to another go 
through, so I do not think congressional action is necessary at this 
time.

    Question 4. More than half of U.S. broadband subscribers are 
subject to some form of bandwidth cap or usage-based pricing. Experts 
have pointed out that broadband caps are inefficient for addressing 
network congestion and may, instead, have anticompetitive effects. What 
does the Commission plan to do to ensure that caps do not undermine 
access to affordable, high-speed broadband?
    Answer. Although we should monitor market practices, the Commission 
should be hesitant to intervene when it comes to broadband pricing 
structures. Usage-based pricing, for example, may in fact increase the 
affordability of high-speed broadband by allowing broadband providers 
to decrease the price for low-use consumers such as senior citizens and 
first-time Internet users. Moreover, it is a general tenet of our free-
market economy that the more you consume of a good or service, the more 
you are required to pay.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Claire McCaskill to 
                             Hon. Ajit Pai
    Question 1. Chairman Genachowski and I have both written to the 
Federal Aviation Administration (FAA) encouraging the agency to revise 
its rules to allow for the expanded use of electronic devices during 
flight. The FAA has established an Aviation Rulemaking Committee (ARC) 
to look at possible changes to the rules, and the FCC has a 
representative on that committee, which will make recommendations to 
the FAA Administrator this summer.
    I am convinced, and I think most Americans agree, any safety 
concerns that might have once existed to justify the current rules have 
been addressed by advances in technology both on the airplane itself 
and in consumer electronics. While I recognize the decision is not one 
that rests with the FCC, as leaders on technology issues--and as one of 
only three government agencies with a seat at the table, and the only 
not under the Department of Transportation--I want to know if all of 
the Commissioners share those views on this issue.
    Answer. Yes, I generally share Chairman Genachowski's views on this 
issue and hope that the FAA can take steps to enable greater use of 
tablets, e-readers, and other portable devices during flights.

    Question 1a. Given Chairman Genachowski's stated position on the 
issue, can I trust that you will be directing the FCC's representative 
on the ARC to convey the opinion of the Commission that the rules 
should be changed and work to aggressively push the FAA to do so?
    Answer. While I do not have the authority to unilaterally direct 
the FCC's representative on the ARC, I hope that the Commission will 
encourage the FAA to take action on this issue.

    Question 2. Although the FCC's reforms to the Universal Service 
Fund's (USF) Lifeline program through its February 2012 order were much 
needed, and attempted to address duplicative Lifeline support, 
ineligibility, deceptive marketing and other concerns raised in my 
December 2011 letter to you on this topic, the reforms appear to have 
had little effect in limiting the rapid growth of the program.
    While I commend the Commission for its attempt to rein in the rapid 
growth of the Lifeline program and address the problems you inherited 
when the program was expanded to include wireless providers without any 
additional safeguards to prevent waste, fraud and abuse, even with the 
reform order in place the Lifeline program grew by 26 percent ($445 
million) last year. What additional action is the Commission 
considering to address waste, fraud and abuse in the Lifeline program?
    Answer. Among other actions, the Commission is considering putting 
the Lifeline program on a budget, just as we have done with the high-
cost program, the E-Rate program, and the rural healthcare program.

    Question 2a. Specifically, would the Commission consider suspending 
new enrollment in the program while the reforms continue to be 
implemented?
    Answer. If the Lifeline program were to grow substantially due to 
new enrollees, suspending new enrollment is one option that could be 
considered to constrain spending while further reforms are implemented.

    Question 2b. Would the Commission consider capping the program?
    Answer. Yes.

    Question 3. We are quick in Washington to create new programs but 
what we don't do often enough is reevaluate those programs to make sure 
they're still needed. The FCC created the Lifeline program nearly 30 
years ago to make sure local phone service was still affordable for 
low-income Americans following the breakup of AT&T in 1984. Because 
technology has changed and competition has grown, basic 
telecommunications services are as affordable as ever. I am wondering 
if the Commission has recently looked at whether the Lifeline program 
is even still necessary, and if not if you would be willing to do so?
    Answer. The Commission should always be willing to consider whether 
any regulations and spending programs continue to be necessary and/or 
in the public interest.

    Question 4. In order to keep up with the demand for spectrum, many 
in the private-sector believe efforts need to be taken to clear some of 
the federally-occupied spectrum for commercial use, most significantly 
spectrum currently occupied by the Department of Defense. Chairman 
Genachowski and I have discussed this issue but I am interested in the 
views of all of the commissioners.
    With the exponential rise in demand for mobile broadband services, 
we need to look at all potential resources for spectrum repurposing--
including Federal Government users. The GAO recently reported that the 
total percentage of the most highly-valued spectrum exclusively or 
predominantly used by the Federal Government is as high as 57 percent. 
Given Federal agency budgets, many of these systems are not up-to-date 
and thus operate inefficiently, and some Federal uses could be served 
by commercial mobile providers. Are there specific instances in which 
you believe Federal spectrum could be operated more efficiently?
    Answer. Yes. To give one example, I believe that it would be 
possible to clear Federal users from the 1755-1780 MHz band and 
repurpose that band for commercial use.

    Question 5. In addition to this Committee I also serve on the Armed 
Services Committee. I have started to look at ways we can incentivize 
Federal agencies--including the Department of Defense--to clear or 
share spectrum, to free up more spectrum for commercial auction. Based 
on your experience working with Federal spectrum users, what ideas can 
you offer for creating such incentives?
    Answer. Federal users currently do not have the same incentives as 
commercial operators to use spectrum efficiently. Therefore, I agree 
that we need to focus on providing Federal agencies with additional 
incentives to become more efficient in their spectrum usage. Many 
creative ideas have been offered to do just that. Some proposals, for 
example, offer financial rewards to agencies that are able to reduce 
their spectrum footprint. Others seek to penalize agencies that are not 
using their spectrum resources efficiently. At this point, I am not 
prepared to endorse any specific proposal but would encourage Congress 
to take a close look at this issue.

    Question 6. Last year Congress passed a Rubio-McCaskill resolution, 
S.Con.Res. 50, stating that Internet infrastructure and content should 
remain free from international regulation. Members of the U.S. 
delegation to the ITU conference in Dubai have indicated that Congress 
sending a clear message on the issue was helpful in their negotiations 
and that our efforts on this issue should continue, especially since 
those nations that want greater regulation of Internet infrastructure 
and content will certainly continue in their efforts. What more can 
Congress be doing to help promote a free and open Internet around the 
world?
    Answer. Making the Rubio-McCaskill resolution the official policy 
of the United States would send a strong, bipartisan message to the 
world that we support a free and open Internet.

    Question 7. A handful of countries, such as China and Iran, want to 
heavily censor the Internet content people can access inside their 
borders, while many other nations are simply looking for ways to 
generate revenue from Internet traffic that moves through their 
country, much in the same way they have done with voice communications 
for years. Are there policies the United States can and should be 
promoting around the globe to help other nations develop their 
telecommunications infrastructure, unleash the economic activity that 
comes with it, and thus remove their desire to use global Internet 
traffic as a revenue source?
    Answer. The United States will not be a credible voice in favor of 
Internet freedom abroad unless we adopt the right policies here at 
home. Therefore, Congress and the Commission should lead by example and 
refrain from initiatives to increase government regulation of the 
Internet. One small but important step the Commission could take would 
be to close the so-called ``Title II'' docket, which contains a 
proposal to subject broadband Internet services to onerous common 
carrier regulation.

    Question 8. The upcoming incentive auctions have been pitched to 
Congress as a market-based mechanism that would help put spectrum in 
the hands of those most capable of unleashing its economic potential. 
That was an appealing idea, and on that basis Congress authorized you 
to conduct them. Now there is some concern that the Commission is 
contemplating going beyond what will be freed up by the auctions and is 
considering repurposing or reallocating many more megahertz in rural 
areas just through repacking broadcasters and eliminating LPTV and 
translator service. Is your intention to deal only with what is freed 
up by auctions, or is your intention to reallocate as much spectrum 
from broadcasters to broadband providers as possible?
    Answer. In the record, there is a substantial dispute between 
parties supporting a so-called ``variable band plan,'' meaning that 
more spectrum would be reallocated for mobile broadband in some markets 
than in other markets, and parties supporting a nationwide band plan, 
where the same amount of spectrum would be reallocated for mobile 
broadband across the Nation. Were the Commission to adopt a variable 
band plan, it is quite likely that more spectrum would be repurposed in 
less populated areas than in the Nation's most heavily populated 
markets. At this time, I haven't reached any conclusions as to whether 
the Commission should adopt a variable band plan or a nationwide band 
plan. This question presents complicated legal, technical, and policy 
issues, and I look forward to working with my colleagues to develop a 
band plan that is consistent with our statutory authority and serves 
the best interests of the American people.

    Question 9. Has the Commission studied the impact of reclaiming 
spectrum on LPTV and translator service, especially in more rural 
states that rely heavily on them to reach areas where no other service 
is available?
    Answer. In my separate statement on the Notice of Proposed 
Rulemaking in the incentive auction proceeding, I specifically 
highlighted the importance of translators to rural America and asked 
what the Commission could do, consistent with our legal authority, to 
ensure that this vital communications link for rural America is not 
broken. As we move forward in this proceeding, I believe that the FCC 
must study this issue carefully.
                                 ______
                                 
 Response to Written Questions Submitted by Hon. Richard Blumenthal to 
                             Hon. Ajit Pai
Broadband Competition
    Question 1. In 2010 the FCC stated in the National Broadband Plan 
that, ``. . . there are reasons to be concerned about wireline 
broadband competition in the United States. Whether sufficient 
competition exists is unclear and, even if such competition presently 
exists, it is surely fragile.''
    The plan further stated that, ``To ensure that the right policies 
are put in place so that the broadband ecosystem benefits from 
meaningful competition as it evolves, it is important to have an 
ongoing, data-driven evaluation of the state of competition,'' and that 
``additional data are needed to more rigorously evaluate broadband 
competition.''
    The Plan specifically recommended the Commission undertake a number 
of reforms to data collection including:

  1.  ``[C]ollect broadband availability data at the census block 
        level, by provider, technology and offered speed.''

  2.  ``[C]ollect data on advertised prices, prices actually paid by 
        subscribers, plans, bundles and promotions of fixed and mobile 
        broadband services that have material penetration among users, 
        as well as their evolution over time, by provider and by 
        geographic area.'' The Plan stated that in particular, it ``is 
        crucial that the FCC track and compare the evolution of pricing 
        in areas where two service providers offer very high peak 
        speeds with pricing in areas where only one provider can offer 
        very high peak speeds.''

  3.  ``[C]ollect information related to switching barriers, such as 
        early termination fees and contract length.''

    The National Broadband Plan also recommended that the Commission 
establish a general policy of making the data it collects available to 
the public, including via the Internet in a broadband data depository.
    These recommendations reflect the comments of the Department of 
Justice, who told the Commission that it ``. . .should expand its 
efforts to include an assessment of the nature and extent of 
competition in each local broadband market.''
    Nearly two years after the National Broadband Plan was released, 
the Commission issued a Notice of Proposed Rulemaking (NPRM) that 
encapsulated many of these recommendations. The Commission has yet to 
act on this NPRM.
    Chairman Genachowski, Commissioners McDowell, Clyburn, Rosenworcel 
and Pai, do you agree with the National Broadband Plan's 
recommendations on the need to collect these additional broadband data? 
Do you think the Commission, policymakers and the public have the 
appropriate data to determine if the Commission's competition policies 
are, in the words of the Department of Justice, using the appropriate 
``policy levers . . . to produce superior outcomes,'' and if not, what 
additional data is needed?
    Answer. I agree with the National Broadband Plan that good policy 
starts with good data, including data about the preferences consumers 
themselves reveal through their spending habits. For example, we 
continue to collect data each year on wireline broadband deployment but 
much less data on wireless alternatives, whether terrestrial or 
satellite, even though consumers are increasingly substituting the 
latter for the former. The Commission may need to reevaluate its data 
collections accordingly.
Sports Blackouts
    Question 2. Over one year ago, I wrote the FCC and requested the 
agency allow public comment on a petition for rulemaking asking the 
Commission to reexamine the Sports Blackout Rule. This rule is nearly 
forty years old and, along with other Federal rules and league 
policies, is one of many obstacles making it unreasonably difficult for 
fans to watch their favorite teams play.
    I thank the Commission for taking my letter seriously and opening a 
Notice of Inquiry (NOI) to solicit comments from the public and other 
stakeholders. However, that docket was opened in January of 2012 and 
the Commission has yet to take any further action.
    The response in the proceeding was overwhelming. The NOI garnered 
thousands of comments from consumers impacted by local sports 
blackouts, including elderly and disabled sports fans unable to attend 
live games. The NFL's revised local blackout policy seems to have done 
little in the last regular season to help the most heavily impacted 
markets. Commenters have proposed several options, including preserving 
the status quo, eliminating the Sports Blackout Rule altogether, or 
adopting a sunset period requiring a public interest showing to renew 
the rule.
    Chairman Genachowski, Commissioners McDowell, Clyburn, Rosenworcel 
and Pai, what else can the Commission do to help fans unable to watch 
their favorite teams compete?
    Answer. Since taking office, I have met with parties supporting and 
opposing the Sports Blackout Rule. And as a sports fan myself, I 
understand the passions that this issue generates. At this point, I 
have not yet reached any firm conclusions as to whether the Sports 
Blackout Rule should be eliminated, modified, or retained. Should the 
Chairman circulate an item addressing the Sports Blackout Rule, I will 
approach the issue with an open mind and give careful consideration to 
all of the evidence that has been placed in the record.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                             Hon. Ajit Pai
    I appreciate the testimony and your candid answers during the 
hearing. I would like to thank you for your service on the Federal 
Communications Commission.

    Question 1. The hearing touched on many themes that I believe the 
Committee should look at including process reform, the looming 
transition to IP and the Spectrum auction. However, an opportunity for 
the Chairman and the Commissioners to share what they see ``over the 
hill'' was not discussed at length. I would like to provide you with an 
opportunity to share what you believe are some issues that may not have 
been discussed at the hearing.
    Answer. I believe that facilitating the deployment of wireless 
infrastructure will be an important challenge for the Commission going 
forward. While making additional spectrum available for mobile 
broadband is critical, in order to use that spectrum, carriers will 
have to deploy additional physical infrastructure, such as towers, 
small cells, and distributed antenna systems. We therefore need to look 
at how we can remove unnecessary regulatory barriers to the deployment 
of wireless infrastructure, and I am pleased that the Commission is 
currently studying that issue carefully.

    Question 2. The spectrum auction is of the utmost importance. Is 
the Commission going to set a target date of 2014?
    Answer. The Notice of Proposed Rulemaking in the incentive auction 
proceeding, issued in September 2012, stated that the Commission 
anticipated holding the incentive auction in 2014. In my view, 2014 
should continue to be our target date, and we should work to meet that 
objective.

    Question 2a. What are the challenges with hitting this date?
    Answer. The most difficult issues on the horizon are the 
configuration of the band plan, the design of the auction, the 
mechanics of the repacking process, and coordination with Canada and 
Mexico.

    Question 3. The Commission's spectrum incentive auction process has 
the potential for channel reassignment. Nevada has over 300 translators 
and low power TV stations, any repacking will put a significant burden 
on these stations. Is the FCC taking this into consideration? Can the 
Commission preserve viewer access to local channels and still hit the 
target of 2014 for the auction to take place?
    Answer. In my separate statement on the Notice of Proposed 
Rulemaking in the incentive auction proceeding, I specifically 
highlighted the importance of translators to rural America and asked 
what the Commission could do, consistent with our legal authority, to 
ensure that this vital communications link for rural America is not 
broken. As we move forward in this proceeding, I believe that the FCC 
must give this issue careful consideration. At this point, I believe 
that it is possible for us to address this issue and meet our 2014 
target for holding the incentive auction.

    Question 4. According to the National Broadband Plan wireless 
backhaul is ``critical to the deployment of wireless broadband and 
other wireless services,'' particularly ``when fiber is not proximate 
to a cell site.'' I understand that the existing wireless backhaul 
networks face a number of regulatory and technological constraints that 
limit their potential capacity. These independently-powerable services 
are also important to undergird FirstNet, the national first responder 
network. How is the FCC working to speed the deployment of wireless 
backhaul services in new frequency bands?
    Answer. I agree with the National Broadband Plan's characterization 
of the importance of wireless backhaul. As I mentioned in my statement 
supporting an August 2012 order reforming the FCC's microwave backhaul 
rules, ``Wireless backhaul in particular can be a vital network 
component in areas where wireline infrastructure, such as fiber or 
copper, is difficult or prohibitively expensive to deploy. Facilitating 
greater use of wireless backhaul thus can enable infrastructure 
investment and help address our pressing spectrum needs.'' Statement of 
Commissioner Ajit Pai, Amendment of Part 101 of the Commission's Rules 
to Facilitate the Use of Microwave or Wireless Backhaul and Other Uses 
and to Provide Additional Flexibility to Broadcast Auxiliary Service 
and Operational Fixed Microwave Licensees; Petition for Rulemaking 
filed by Fixed Wireless Communications Coalition to Amend Part 101 of 
the Commission's Rules to Authorize 60 and 80 MHz Channels in Certain 
Bands for Broadband Communications, WT Docket No. 10-153, RM-11602 at 1 
(Aug. 3, 2012), available at http://hraunfoss.fcc.gov/edocs_public/
attachmatch/FCC-12-87A6.pdf.
    Since 2010, the Commission has been reviewing and revising its 
rules to facilitate microwave wireless backhaul. Specifically, it has 
made an additional 650 MHz of additional spectrum available for 
wireless backhaul, mostly in rural areas. It has eliminated unnecessary 
rules that have hindered deployment in the microwave bands. It also has 
revised its antenna standards in certain bands in order to lower 
deployment costs.
    Another important step to speeding the deployment of wireless 
backhaul services has been the establishment of build-out requirements 
in the microwave bands to ensure that licensees construct networks in a 
timely fashion. For the 24 GHz Band microwave service, Local Multipoint 
Distribution Service (LMDS) in the 28 and 31 GHz bands, and the 39 GHz 
Band microwave service, all licensees must demonstrate substantial 
service at the end of their 10-year license term in order to obtain a 
renewal. In 2008 and 2010, the Wireless Telecommunications Bureau 
granted extensions of the build-out deadline until June 1, 2012 to 
licensees in the 24 GHz, 39 GHz, and LMDS bands with the expectation 
that the licensees would deploy networks and provide service within the 
extended timeframe. As a result, these licensees had at least eleven-
and-a-half years to meet their build-out requirements.

    Question 4a. What is the current state of wireless backhaul 
deployment in the 24 and 39 GHz bands?
    Answer. Most wireless backhaul deployment has occurred in the 
microwave bands below 24 GHz and 39 GHz. However, IDT Spectrum, which 
holds 742 licenses, and Spectrum Holding Technologies, which holds 199 
licenses, have reported to the Commission that they have met the build-
out requirements for their licenses in the 39 GHz band.

    Question 4b. Has any company tried to develop new technology that 
is optimized for wireless backhaul in these new frequency bands?
    Answer. The licensees in the 24 and 39 GHz bands confirm that 
equipment is available for wireless backhaul in these bands.

    Question 5. The FCC has moved to reclaim wireless backhaul spectrum 
in the 24 and 39 GHz range from a number of wireless backhaul providers 
despite the providers request for additional time to complete their 
roll-out.
    If the FCC ultimately reclaims spectrum in the 24 and 39 GHz range, 
how long will it take, including the necessary legal proceedings, for a 
new wireless backhaul provider to build-out a backhaul service with the 
seized spectrum?
    Answer. In general, once a licensee forfeits a license and it 
reverts back to inventory, the FCC can move directly to re-auction that 
spectrum. With respect to the 24 GHz and 39 GHz licensees at issue 
here, however, a bankruptcy court injunction currently prohibits the 
Commission from reassigning those licenses until the previous licensee 
exhausts its appeal rights. In light of this fact as well as other 
contingencies, I cannot state with specificity how long it would take a 
new wireless backhaul provider to build out a backhaul service with the 
seized spectrum.

    Question 6. In at least one case on Appeal to the Full FCC 
Commission, a significant wireless backhaul provider, from whom the FCC 
seized spectrum, has proposed an aggressive build-out plan that will 
have its wireless backhaul network up and running in 18 months. If the 
FCC were to prioritize the rollout of wireless backhaul services, would 
it be more expedient to grant an 18 month extension and allow a planned 
expansion to move forward or can the FCC clear the spectrum and find 
another company to build-out the necessary wireless backhaul in less 
than 18 months?
    Answer. FiberTower's application for review has been placed before 
the full Commission for consideration. I am currently in the process of 
reviewing the record that has been compiled in the proceeding and will 
carefully consider all relevant facts as well as the applicable law in 
reaching a decision in this matter.

    Question 7. Will the FCC work to ensure that it takes all 
appropriate actions, including reviewing prior staff-driven efforts 
intended to strip existing wireless backhaul providers of their 
spectrum, to speed the build-out of needed wireless backhaul services?
    Answer: I will give thorough consideration to FiberTower's pending 
application for review. I also will work to ensure that the Commission 
continues to take all appropriate actions to promote the availability 
of wireless backhaul.

                                  
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