Transcripts For CSPAN3 Key Capitol Hill Hearings 20150228

Minimum requirements if were looking at the high noncompliance rates of utilities, the problems with 56rdability, the problems with small customer bases that just some great emphasis needs to be paid to providing more funding for these disadvantaged and smaller communities. My home state of texas has a lot of money theyre putting into water problems as a result of droughts. Californias done the same thing. Each state runs it different. A lot of states put extra money in. Some states dont. But i think its good. G. A. O. s done a terrific job at looking at some of these issues and i would encourage them to continue to do so. Thank you. My last question for mr. For mayor keegan mr. Newman and mr. Sellman, can you just given us briefly your success on the state resolving fund versus the r. U. S. , or do you access that . Why dont we go with mr. Keegan first . Sure. We havent had very much success. Weve had some limitations due to the average income of ow community. Weve been told its been too high. And our average bill doesnt meet the minimum to qualify for the funding. Weve paid two separate Consulting Firms to search out funds for us and both reported the same thing. Thank you. Mr. Newman . Thank you, mr. Chairman. In my experience one of the issues with the srf as compared to Rural Development has been the paperwork is considered to be cumbersome. And the added administrative cost in applying often nullifies the low interest which in turn makes the srf an option of last resort, which i dont believe was the intended purpose. Mr. Sellman . Yes. Some of my systems we have used on srfs. Were drilling a well right now on one of the systems because it depends on what area youre in in the state. But we were having trouble through Rural Development getting a timely process to get money to drill this well and it was needed. The town of monticello. We got a state Revolving Fund grant for a sewer project right now we just completed. In our district, in our part of the state weve used it. And its helped. But the usda seems tore more of a grant. Some communities cant afford a loan and the grant helps them. My times expired and i know mr. Stewart wanted to answer but i want to go to mr. Tonkel whos recognized for five minutes. Thank you for calling this hearing and for inviting a witness from the 20th district of new york. Mayor keegan i appreciate you make the trip here today. Drinking Water Systems in the district i represent and i think every District Across the country are facing significant challenges as they work tone sure that everyone including people in small and Rural Communities have access to safe water. Thats why i introduced the aqua act last congress, to improve all of the tools epa currently has to assist these systems. I appreciate the work that my colleague mr. Harper from mississippi has done on these issues. I look forward to working with him to get at least some of these changes into law. Seems every week in my district theres at water main break. Treated water and the money weve invested is being wasted. So its dollars and water flowing out of those pipes. Mayor keegan, can you describe some of the issues you have had in your town with water main breaks and the obstacles you face . Preventing these ruptures . We dont really with the recent frost when we have a water main break it doesnt just pop up because the ground is so frozen. So we often dont know where the break is and we dont have the tools or equipment to locate the break. So we have to either call a Consulting Firm that could be 1,500 a day to come with special tools or call the new york Water Association. If theyre available theyll come. So thats its very difficult. We dont always know where the breaks are located. Thank you. And you know this is such a serious issue and one that will require more significant infrastructure financing including that investment in technology not just Technical Assistance. Mr. Gomez, g. A. O. Ha studied the range of Government Programs that provide assistance to rural and small Water Systems as well as the need these systems face. What is the funding gap for Water Infrastructure . I know earlier you gave a combined total. Whats the combined for Drinking Water and how much money does it entail . Epa has estimated the funding gap and they have estimated it to be 662 billion. Thats an estimate from 2002. And that estimate is based on the next 20 years. Thank you. And obviously the Water Systems represented on this panel i would think agree that more resources are required. So mayor keegan, do you support legislation to authorize the srf and increase funding available . You mentioned in your testimony the need for grants, not just loans. I think many of you mentioned that. Is it fair to say your village has reached the limit of its ability to borrow more for the needed funds . Oh absolutely. We really just cant even entertain a Municipal Bond at this time. Right now were only spending our budget items on repairs. We dont have enough money in our budget for replacement of old infrastructure. We are looking for funding but its just been a struggle to find any of that. And srf is also a vafshl thing for you . Yes. We encourage the refunding of that. Do you also support efforts to expand Technical Assistance initiatives like the aqua act . Absolutely, yeah. We call on lots of different any Technical Assistance that can be provided to us is really a value. And to the other gentleman on the panel, any responses in terms of Technical Assistance . And the relevant role it might play. In my experience Technical Assistance is absolutely essential in complying with the various rules and regulations of the epa, particularly because many of these rules are often complex and require innovative approaches. So the training and Technical Assistance thats provided for example, by our state rural Water Associations is indeed an essential component of compliance. And the other gentleman in terms of Technical Assistance funding and the srf . Very essential. We get mayors and water board managers and they need all the training they can get. The secretaries, rural water puts on training for them. They certify them. Every bit of assistance we can get is very well needed. And mr. Stewart . Technical assistance is important also because we need to ensure the investment that the federal governments making through epa and Rural Development. And that Technical Assistance allows people to go out and work with these communities, make sure the loans are going to be repaid, and also to implement mike Asset Management programs. Sought infrastructure and materials they have is going to be maintained in top operating condition so we dont have to go back repeatedly necessarily to replace things that could have been maintained to start with. The aqua act i introduced would cover some of these costs. I appreciate your comments. And with that i yield back. Gentleman yields back his time. Gentleman recognizes the vice chair of the subcommittee mr. Harper for five minutes. Thank you, mr. Chairman. And i can think of few topics more important across the country in every Congressional District than the one were on today. So thanks to each of our guests who are giving testimony today and also welcome mayor hill and also just to have each of you here is something that we greatly appreciate. And my dear friend Kirby Mayfield whos here, whos ceo of the Mississippi Rural Water association whos been a great contact and person sharing information with us. So were thankful for that. If i could mr. Newman, ask you. In your testimony you talked about the trust relationship that small communities have with circuit riders. As we continue to discuss how epa could and should help our communities comply with federal regulation among other things, would you please take a minute and elaborate on the importance of that trust relationship that our Water Systems have with our circuit riders . Yes, sir. The relationship that has been established over the years between the rural Water Associations and the utility managers, the certified water operators, mayors and Small Town Council has been well established over many years. Prime example just last evening a Small Community in mississippi, their water well was down due to snow. And they lost power for a significant period of time. And the mayor of course customs was calling. It was developing into quite a situation. The mayor contacted me. And i immediately contacted the Mississippi Rural Water association, and they in turn immediately began locating a generator for that town and thankfully were able to get that generator delivered to resolve that situation. So in essence, the experience is if youve got a problem and you dont know what to do then you call the Mississippi Rural Water association and theyre there every time to provide the needed assistance. And im also glad that you explained to some of our folks, some of our members that we actually have snow in mississippi. So that was a surprise to i think some. And mr. Sellman, thank you so much for your kind words and your testimony. And i look forward to visiting with the double ponds Water Association folks next month in d. C. Thank you. You talked about hurricane katrina, which impacted our state and louisiana greatly. It was the greatest, most costly Natural Disaster ever in our states history. And you mentioned two Water Systems in Simpson County in my district and the assistance they received after katrina. Would you talk about some of the tools circuit riders have at their disposal that small Water Systems often dont have or have other access to. I think you mentioned radar equipment. How important are these tools to the survival of our smaller Water Systems . Yes. Very important. Before katrina we hadnt had a disaster in south mississippi like that since camille, i reckon 1969. But we were without power. And were about 120 miles from the coast. And we were without power about 20 days. 19 20 days. And at that time some of the Water Systems had started putting in generators. Very few but some had. And you know, like i said in the testimony, you can make it without power for a while. Rig up your generator to get the tv on or something. But without water you cant make it. And we immediately called our circuit riders arkansas, north mississippi, wherever they could get them, brought them to us helped us get hooked up and we got water flowing again. Same way with the waste water. We had smi lift stations that you had to pump waste water. We hooked into those waste water stations and got water to the lagoon or treatment plant. The Ground Penetrating radar you mentioned, they keep one of those and anytime we need to locate a line, a lot of these old lines were put in or growing up in trees now, you dont know exactly where the line is they come out there with this machine and locate that line for us and help us tap it. Help us do whatever we need. And that machines about 35,000 35,000. Most of these little systems dont have the money for that. We call rural water and they help us. Thanks to each of you and great to have all of you here, and thank you for that. And also want to specifically thank Ranking Member tonko for his assistance as we try to work through these important issues. The gentleman will yield back his time. The chair recognizes the gentleman from texas mr. Green for five minutes. Thank you, mr. Chairman for both you and Ranking Member tonko for holding the hearing on the Drinking Water needs of smaller communities. I represent a very urban district in unincorporated and Incorporated Houston texas and we have some of the same problems in our suburban areas that will not be annexed by our cities because the property tax could never cover the cost and yet theyre literally south of intercontinental airport in houston and areas in that district. Over the years in texas weve received money from the state Revolving Fund. Partnered with using it in so many of these communities. But also partnered with the county for sewer service. But it bothered me that last year texas received the lowest amount of money from the state Revolving Fund of 53 million and that goes back to 1997 and thats not anywhere near accounting for inflation. The fact is deeply troubling because of the significance in growing drinking Water Infrastructure needs of texas in general and like i said, a very urban district. If its in the city theyll do it. But this area is not attractive to be annexed. And its very poor communities. They have their septic tanks still. Again, very urban area very Shallow Water wells. Mr. Newman, mr. Sellman and mr. Stewart, do you believe congress should reauthorize the Drinking Water state Revolving Fund this year . Ill be glad to start off. Yes i mean, it seems like an easy one. Yes, sir. Thats one of the most important mechanisms in this country to fund Water Systems. For the other three gentlemen. Do you all agree we ought thoto reauthorize it . Yes, sir. Yes, sir. Do you think congress should increase the funding provided to states and local communities through Drinking Water for state Revolving Fund . Raise the authorization for it. I explained to folks authorization is we have that but you can use the authorization as high as you want. You still have to go back every year and beg the Appropriations Committee for the money. Yeah if i may hes saying do you think the authorization should be raised . If we get asked for appropriations. I think the water needs around the country not only your states but others. My opinion is this is an investment. This is to capital eyes the Revolving Funds the state has. This is to capitalize money that can be revolved again and again for use of communities large and small. Should the fund be raised so we can cover more communities . Absolutely. I would also like to add that in addition to raising the funding to cover more communities, take a look at the process and make sure that the money is being utilized by the communities that it was intended to be ben feshl for. You think theres something in the authorizing law that would need to change to make that happen . Im not so sure about the process of the authorization of the law as i am concerned about just the implementation of the funds and those things that discourage the smaller communities in mississippi that im familiar with from pursuing those funds because these funds were intended to benefit these small communities. And theres a gap and i think we all need to figure out how to bridge that gap. The biggest problem we have in my area is these are very poor communities and to have a Revolving Fund and have it paid back they could hardly afford the monthly water bill and sewer bill to be able to pay it back. So thats the issue again in my area. I assume its in north mississippi just like it is in other parts of rural texas. The. Mr. Stewart, you indicated you worked two decades on Drinking Water issues. The last few years our rain stopped at the louisiana border. Goes from beaumont texas all the way out west its been drought. In the last year though, weve had good rain. In the houston area Southeast Texas and all the way to rio grande valley. But we still have problems out past san antonio. Because thats still in a drought area. How would you describe our current state of drinking Water Infrastructure in texas . I would say for the most part its pretty strong. Certain disadvantaged communities like youre talking about that i really think need some additional resources. Theres some hardhit drought areas in my area of Central Texas that i think need additional support. Fortunately texas has benefited because we have river authorities, we have a progressive Water Development board. We have people that are looking at this issue from a lot of different angles. Texas did provide recently the voters voted for a constitutional amendment to provide for it because of the problems we have. In 2011 harris county, as much of our state, was in the grips of the drought. During the height of the drought due to age water lines, hardening soil, hundreds of water line breakage daily resulting in billions of gallons of lost treated water. Mr. Stewart, do you have any sense of the Economic Impact of the 2011 drought had on our state . Thats something jim might be better able to answer but i know its been severe Economic Impact because if you dont have the water sources youre not going to be able to support the businesses, the growth thats occurring all over texas. Waters just the foundation of all the economy in this country. I know im over time. Way over time. We talk a little slower. Chair now recognizes the gentleman from pennsylvania mr. Murphy for five minutes. Thank you. Ill talk a little fast, see what i can get in. This is for mr. Zellman or mr. Newman. Thank you all for being here. Very informative panel. Engineers who serve in some of these rural Water Systems in my district, for example, in green county in southwestern ben pen, very rural area, but they tell me that states oftentimes impose their own Drinking Water requirements which are far more strict than the epa standards set forth in the Drinking Water act. Could you please provide some examples for some of these stateimposed requirements youve seen in your community or other communities go beyond or differ from the epa standards . In mississippi, and mr. Selman can elaborate on this or correct me if im wrong, but i believe that mississippi that our state regulations are exactly the same as the federal guidelines being no more or no less stringent than the language in the federal act. Same for you, mr. Sellman . Yes. And does anybody else see differences in their communities . No. Thats correct. I dont think our regulations could be any more stringent than what the federal act is written. Thats what the state of mississippi does. Mr. Stewart . I might note that some states o epa regulates Water Quality. They dont regulate capacity requirements. And some states require that you have a certain well production, surface Water Treatment plant, storage and pumping capacities. In a lot of cases those adversely affect small communities because theyre not really theyre not on an engineering basis justified on the basis of how much water is being used. For example, in grown county where theyre dealing with things like small water line extensions not necessarily Water Quality but that has to do with water delivery. Is that what youre saying . Exactly p. The capacity requirements whether its pumping or storage elevated ground storage tanks, sometimes those capacity requirements are a little higher than i think to whats needed to protect public health. What this gets into lets me come back to that. How much could the heightened standards cost rural drinking Water Systems if we make some changes in here . Will it affect i heard some of you alluding to cost issues here. Mr. Keegan, you talked about consulting an engineer on what those costs are. What is this vary for communities, Rural Communities . Anybody have estimates here of the cost you that would bear . Probably save us on all the consulting fees that we spend looking for funding. Anybody else have any thoughts about this . I would say it depends on the requirement. If youre having to treat for arsenic youre probably talking about doubling or tripling of the water bill for a Small Community. So it just depends on what kind of treatment what kind ever constituent the epa is requiring the Small Community to treat for. So the question i have and you talked about some of these things, but how do rural systems get the funds they need to deal with this compliance issue . Anybody have any thoughts on this of what we do . I heard one comment, could the federal government send more money and certainly where the federal government increases or changes standards i sometimes think its unfair to say you now must do all these things and you must bear the cost. But it comes down to a question, though of what else. I mean how are these costs borne oftentimes when you have someone who lives a mile from the next person or half a mile from the next person . And theres huge costs associated with this. Anybody have any comments on how that should be set up . We just raised our rates. We just had the d. E. C. Required our local School District to be on municipal water and they passed a bond. So they passed that. Price on to the taxpayers to took honey the system at considerable expense. What kind of percentage increase would you say that was . Im not sthur. Anybody else have any other thoughts other than put it on the rate payers . Raising rates is the only way that small communities like i work for thats the only option they have. In the 10 to 20 range sometimes. And we have these grant systems. I know that some of my communities are asking for some changes in the way that the loans are established. Rates, et cetera. Any comments on those . The paperwork is quite cumbersome. And usually we have to hire a Consulting Firm to help us apply for the loan. Can you elaborate on that cumbersomeness . What kind of hours and time it adds to your cost. We just arent we just dont have the staff who can understand whats required in the paperwork. We give them the data, how much water we use every day and that kind of thing. Is it safe to say that simplified the paperwork and if youre going to be giving required to have lots of paperwork to also provide some assistance in filling that out . Absolutely. Thank you very much. For the second time im going to try to be quicker on the gavel so everyone gets a chance. For mr. Lott is recognized for five minutes. Well, thank you, mr. Chairman. And to our panel thanks very much for being here. This kind of strikes home to me because the county commissioner from wood county in ohio for six years and handled a lot of water and sewer issues. And also we created a Regional Water and sewer district i was the commissioner to put things together because my home county was over 600 square miles. We had all or part of five cities. 21 villages, 19 townships, and a lot of unincorporated area. And its important. And hearing all of you brings back memories of over 20 years ago that i used to sit in a lot of meetings and hear people talk about because theyre really important issues. In ohio alone i think weve got about 21 billion right now that were looking at that we need in Infrastructure Improvements from water to waste water and storm water. So what youre saying here today is very, very important. We really appreciate you being here because i can commiserate with what youve all said. Ive also been working on legislation for at least one session to try to help on the waste water side to help Rural Communities. But if i could, because i tell you, youve all had very good testimony today. And again, i appreciate you being here. And if i could start with mr. Gomez. I think its important because one of the things weve been haerk out here hearing out here is theres a shortage of dollars, especially when youre talking about rural areas. Could you discuss the relationship between the epa and usda programs . Whether there are overlaps out there and what about the efficiency or synergies that could accrue if we were looking at these programs making sure we didnt have duplication out there or anything like that. Sure thank you. We have looked at those two programs in particular and also at the other agencies that have programs that help Rural Communities. With respect to the usda Rural Utility Service and the epa Drinking Water srf, they are they do have some similar programs and we did not find any areas where they were duplicating effort, meaning they were funding the same project for the same purpose. Projects can get funding from both programs, but theyre usually focusing on different areas. The other things were reporting on is the importance for those two agencies to Work Together to collaborate but also to encourage the state srf programs to work closely with the usdf Rural Utility Service so they can get efficiencies. One of the recommendations we made was they needed to come up with a uniform preliminary engineering report. So that communities arent filing multiip many engineering reports which cost money. Those are things were tracking. We were happy to hear they have come up with a uniform preliminary engineering report and that some states are have adopted it. You you both touched on it in your testimony. You mentioned, mr. Stewart, about bringing the tools back to the communities and the cost of that Technical Assistance. What do we find . Are the tools there i know weve heard from some other of the members asking the panel about the cost. Do you find you have that assistance out there to be able to get it as soon as you can get it . Both rcap and rural water have a right of tools we can bring to bear to smaller communities. An epa and i think i touched on it in my testimony. I think its the access to the tools. We need the Technical Assistance to bring those tools, whether its an Asset Management program, whether its a Financial Management program, whether its an owen and manuals. Whatever those tools might be. The real expense is not just creating the tools its bringing it out to the small communities that cant access them unless they have a Technical Assistance provider out there working with them. Mr. Newman . Would you like to touch on that . About the assistance out there in the communities. So reiterate the comments ive made as well as mr. Stewart, from the perspective of the water system manager the resources resources, the assistance is invaluable because there are very varied issues that occur. Across a water system that may be beyond the scope of a particular utility and beyond the financial capabilities. Utilizing the services of the real Water Association has been gentlemans time has expired. I recognize the gentleman from West Virginia. Thank you, mr. Chairman. Going to go in several directions with this. Weve heard a lot of horror stories. I think weve got a slide perhaps of a water line that theyve been facing. Can we get that up . Here it is. It shows how occluded the line is. They have applied knowing this they have applied ten times to try to get money. And theyve been rejected ten times since 2002. We dont have the money in the srf. And what i was particularly pleased about was the president this year actually maintained for the most part the funding from the Previous Year as compared to what weve seen in the past where the year before he made a 40 reduction in the srf because they said the priority was Climate Change. They thought Climate Change was a higher priority than funding our water problems in Rural America. I hope someone has seen the light with that. But im confused a little bit about the regulatory birnd. Burden. Because particularly a lot of you have been talking, this hearing is about Rural America not whats been offered as weve got to be concerned about the big cities. Im worried at this hearing that we stay focused on Rural America. Because heres just a listing of some of the rules. Ive designed a lot of sewer and water lines. As an engineer im quite familiar with this. But weve got things that a small city has to take care of is the arsenic rule, the chemical rule, lead and copper rule uranium rule the ground water rule enhanced surface water rule 1 and 2, disinfect byproduct rule 1 and 2, the surface water i could go on and on. These are rules small cities have to deal with just as well as a Larger Community of 100,000 or 200,000. And ive got three other communities, theyre just trying to find money for operations let alone install this one community. Theyre working on one of you sat up here and 19th century system. Theyre trying to replace it with that water line right there. How can we get money for operations . Weve got one community in West Virginia theyre dumping raw sewage into the Potomac River because they dont have money to be able to do the Maintenance Work they have to do. Ive got another community, theyre getting their water through water buffaloes. Poured into a cistern so they have some water with that. This is 2015 in america yet we have an administration until this year every year for the last three years has been reducing money to the srf. How are we failing our country when we dont put enough money into the srf . Thats what ive heard many of you say we need to put more money into that program. What do we have to do . How much more money . Can any of you suggest where we have to go with that . I would also add should wish prioritizing the srf money for Rural Communities so were weighting them a little more heavily than the big cities . Sir, youre preaching to the choir here. I think all of us would agree a significantly greater percentage of the srf money should go to Rural Communities and they should be able to access it more quickly. You cant even have a chance of getting the srf money unless you get on the intended use plan. And for a Small Community how do you get on the intended use plan . All of us can tell you thats difficult to do. I mean do you have the Technical Assistance . Do you have an engineer youre working with, somebody thats going to submit the paperwork . Do you even have a chance to get on the money . And thats a problem. Thats one thing i said in my testimony. We need some assistance just so these small communities can get on the intended use plan which is what they do to prioritize money into the srf. How can we what are some factors that we might be able to weight so a Small Community putting in will be given better consideration than a Larger Community . Any of your thoughts . Mr. Gomez. Well, generally, what g. A. O. Always recommends is that you target federal funds to those communities. So if these are the communities thats one of the areas we could target. Okay. I guess were running out of time. Again, mr. Chairman thank you very much for bringing this out. I hope we continue to this is for small cities. The big cities have their own issues, but they have the resources and the Critical Mass to be able to take care of it. Our small towns are 400, 500 people. Were struggling. Wed better find it. Thank you very much. The chair loth gentleman from ohio mr. Johnson for five minutes. Thank you, mr. Chairman. I represent appalachia ohio and i dont have to tell you folks, probably, how rural that is. I hear the horror stories, many of which youve just heard. I could cite similar cases that my colleague from West Virginia mr. Mckinley, did. Mr. Selman long before i was elected to congress i served 26 years in the air force and i was stationed in columbus, mississippi. And you know how rural that area is. So ive seen this for a long time. Mr. Gomez. Does the gao track and can you tell us in regards to all urban and rural systems how many municipalities have their systems charged the true cost of providing water to their customers . In other words, how many of them are operating in the red . Thats a really good question. And its always one area thats debatable, right . Whether people are actually paying the true price of what the water cost. I dont believe that we have done work on that. But if we have id have to get back to you on that. Would you take a look at that, please . I think the American People would be interested to know how these small Rural Communities are struggling and many of them are operating in the red as it stands right now because their residents cant even afford the cost of providing the water. What it can also say is epa has estimated that for these Rural Communities if they have to undertake these water and waste Water Infrastructure projects their rates will likely be four times what the urban rate payer would be paying. Oh absolutely. Its not affordable. And ive got rural areas that are under that exact pressure. They dont have the money because of the economy. They dont have the money to comply with the epas clean water mandates and system mandates today. And on top of that theyre being leveled with these fines that they also cant pay. Its like trying to get blood out of a turnip. And i know you guys know what a turnip is. Its tough. Let me ask you a question mr. Newman. Your testimony mentions that the town of como, mississippi has 2 million in waste water needs and 1 million in Drinking Water upgrades it needs to undertake. Whats the operating budget of como . The annual operating budget in the town of como is approximately 150,000 annually. Okay. And whats the average income of como residents . Per capita, about 21,000. Okay. Is raising local water rates a realistic possibility . Its a realistic possibility from a standpoint of operation and maintenance but not from the standpoint of addressing making these upgrades. Thats correct. Yes. And even if you raised the rates operationally and maintenancewise, would it be enough to cover the cost of providing the service . No. Okay. What is their access to or are there limits on other Funding Sources like commercial lending . Thats a doubleedged question because the question itself kind of says why dont you go in debt to provide water. And thats certainly not a principle i subscribe to. But are you considering other sources . By and large the primary source is Rural Development. Primarily because of the grant component. Other options as we have discussed include a state Revolving Fund. Even commercial lending. However, as is the case with srf, commercial lending is 100 loan and the Interest Rates on a commercial loan is typically going to be layer than the srf. At either case because of the low economies of scale a Community Like como cant afford to borrow the money necessary to make these improvements. They just dont have enough customers over which to spread the cost. Okay. All right. For mr. Newman, mr. Keegan and mr. Selman what challenges do you have in assessing the Drinking Water state Revolving Funds and how does that compare with accessing Rural Utility Service funding . Well, ill allow these gentlemen to elaborate, but one of the issues, and i think we touched on it as well, youve got more help in applying with r. U. S. As opposed to srf. The cost of applying for srf, you may have to utilize services from from a consultant which adds to the cost. And thats typically not the case with the Rural Development process. Okay. Mr. Selman. Weve been able to use some srf money. Our engineer takes whatever they allow as that consultant amount. Whatever they allow for an attorney an engineer or whatever. He does the paperwork for whatever that is. And theyve got that specified in the loan. And weve been able to i know certain regions. Maybe not. But weve been able to take advantage of sfr money. Weve been having trouble getting money through Rural Development. Thank you, mr. Selman. My time has expired. But mr. Keegan, do you want to respond . Weve had trouble accessing funds from either program. In new york state a lot of funding goes to communities that have some sort of citation, some problem with their system. Engineers work very hard to keep our systems smooth running. So were sort of at the bottom of the pile. Thank you very much. Mr. Chairman, Rural America knows how hard it is to get blood out of a turnip. And i appreciate you having this hearing so that we can shed some light on how difficult it is to do this. Thank you very much. Thank you very much. And i thank my Ranking Member and my vice chair, who is trying to lead this charge too. Last but not least, mr. Kramer from the rural state of north dakota. Youre recognized for five minutes. Thank you mr. Chairman, from illinois and Ranking Member from new york for acknowledging Rural America and for reminding us there are other rural places that are better known or their urban centers. Its good to have an alliance. My colleagues or my constituents with the north dakota rural Water Systems association would be very proud of all of you. Youve done a great job today and i felt right at home, even with the unusual accents. But its a reminder there are some things we Work Together on and that are very important. And i wont i wont delay except to tell you that i hear a lot about the Circuit Rider Program from our folks and i think you raise a very important issue. I think its incumbent upon us now as policy makers and eventually appropriators to look for opportunities to prioritize some of the programs you talked about within the context of the entire act. And given the constraints financial constraints we have we do have to be a little bit creative but certainly we can reprioritize. I want to just ask for maybe a little bit of elaboration on one point. I got the gao report was fantastic frankly. And i think it was its nice to see the alphabet soup as my constituents often refer to it and see that theres both recommendation findings and then response by multiple agencies that have to have a tendency perhaps to create extra burden by virtue of requiring sort of uniform processes but not in a uniform way. The uniform preliminary engineering report template i think is a great tool. And i think at a time when our constituents are looking for an efficient effective government this is a good example. And i raise it because i wonder how many more times we could duplicate this throughout the system. One of the frustrations ive seen in the last two years here is not just with epa and usda Rural Development. Certainly in fact there are many others have more. I just hope we could as a house, as a congress, and as Public Officials at every level look for more of these times of opportunities. The public could go wild. That makes perfect sense. Because right now they look at it and im sure you all do, you mean i have to hire the Engineering Firm to dot exact same thing for another agency and pay them . I guess mainly what i want to say is thanks for that. I will want to be monitoring that very carefully see how it works out. And i know you will as well, mr. Gomez because i think therein lie the nuggets of opportunity to demonstrate functionality of government in a way that people expect of us that that we probably havent done so well. Thank you. And we are tracking that by the way. Its part of our tracking that we do every year because we want to make sure that those agencies are making progress and that its helping the communities in need. Thank you for that. And again thanks to awful you. And i will leave some time on the clock and not and just thank you for being so patient to hang around with me this long. Thank you. I yield back. Gentleman yields back his time. Looks like were about gone. Do you have anything else you want to say and take an opportunity . Thank you, mr. Chair. I just want to commend the entire panel. I think what you shared with us is not only great insight but advocacy for what is a very high priority. And youve done it through that front line experience. It provides an extra bit of impact i think on the decisions that are made here. But thank you for reinforcing what we have understood to be a problem, and this is a very high priority problem i would think for the country. So thank you very much and i was impressed by all the statements that youve made and the responses youve provided zblip want to thank the Ranking Member for those comments and thank you for being here. I think its just going to energize us to try to ive kind of asked mr. Tonko and mr. Harper to now get together and try to see where theres similarities and agreement so we can kind of move Forward Together and you can see theres a lot of areas in our country that are kind of left behind just because theyre small. Its not a political statement. Its just the nature of our country. I really appreciate the involvement of my colleagues too. So thank you. I need some business to do. I ask unanimous consent that all subcommittee members have five legislative days to submit Opening Statements for the record. Without objection so ordered. Also unanimous consent in asserting a letter from dr. Ralph jones and a letter and report from the Environmental Working Group without objection. So ordered. And remind folks that members of the committee have ten days to submit written questions for the witnesses to be included. You may get some as followup. Wed ask you that answer those, or return those if you can. And that is without objection. So ordered. And with that the hearing is adjourned. Thank you. Now president obama and president sirleaf of liberia talk about the ebola sxons u. Liberia relations before their closed meeting in the oval office today. This is 12 minutes. Its a great pleasure to welcome once again the president of liberia, president sirleaf. She has been a great friend and ally of the United States. And liberia and the United States obviously have an extraordinary bond and extraordinary history. President sirleaf came into office under some of the most challenging of circumstances. After a brutal civil war she has worked steadily to solidify democracy, to reduce corruption, to deliver basic services to a very poor country, and shes done so with grace and steadiness and reached out to all the people of liberia. Last year proved to be an extraordinarily difficult challenge. Because of the ebola crisis we saw the kind of death and disruption of an entire country and entire region of a sort that we havent seen very often in modern history. I want to express my deepest condolences to the thousands who died from this deadly disease their families obviously continue to grieve. But what is extraordinary is because of president sirleafs leadership, because of the heroism of so many people in liberia and because of the actions of the United States and ultimately the International Community we have made extraordinary strides in driving back pooebebola. Cases are down 95 from their peak. We have a handful of cases that come up per week. Our job is not yet done. And neighboring countries like guinea and seare somewhat behind the progress. Because of the extraordinary courage of Health Workers and Community Leaders and her administration what could have been an even more devastating crisis has been brought under control. I am very proud of the participation of the United States, our men and women in uniform who helped to set up the logistical capacity to absorb additional aid and Health Workers from around the world our ability to set up labs and provide Technical Assistance that allowed Health Workers to go in and do the Contact Tracing and to establish the safe burial practices and raise Community Awareness and to provide more humane treatment. All of those things have contributed to confidence that we are going to be able to stamp out this disease completely. And in the meantime normal life is beginning to return to liberia. Children are beginning to go back to school. People are beginning to go back to soccer matches. Businesses have reopened. And the flow and rhythm of normal life has begun to return. So we are very proud of what liberias accomplished and we have been very proud to be partners with liberia in that process. The meeting today will obviously discuss how we make sure that we are not complacent so long as there is even one case of ebola remaining in west africa. But we are now also in a position to look towards the future. This has had a devastating Economic Impact not surprisingly on liberia. We are going to have to work to find ways to find ways to strengthen the economy, to rebuild infrastructure, to make sure that some of the Development Goals that had been set previously are accelerated to deal with some of the economic contraction. It requires us and others in the International Community to work with our west african partners to ensure that growth returns to liberia. Those are all areas where we are interested to hear how we can be helpful. We have some ideas, as well. In the meantime on programs everything from our millennial challenge grants to Encouraging International investment to the return of peace corps volunteers we want to accelerate as much as possible a return to growth and development to accelerate some of the efforts that had begun to reduce corruption and make sure that prosperity and growth is broad based not just in monrobia. We could not have a better partner. We thank you so much for your leadership. We are very proud of the work that we have done with you. We know the job is not yet done but it shows what can be accomplished when youve got strong Democratic Leaders on the ground and International Partners ready to join in dealing with some of the toughest challenges that any country has ever faced. Thank you for your kind words. We come to express on the health of the liberian people to you and the congress and all of the entities, what we call the front line responders to thank these institutions, to the American People in general for the support we received as we fought this virus. We want to really recognize the extraordinary leadership that you have provided. We recall when the u. N. Secretary general called for a global meeting to discuss this disease, one which we say was the most threatening to global peace. You were there. And you gave the call to the Global Community to see the threat the disease represented. As a result of that the support that came from u. S. Entities were then supplemented by so many others around the world. We know that there was fear in this country and we understood that because we were fearful ourselves. We didnt know how to confront this unknown enemy. And we know that there was a pressure here to be able to stop any traveling of people from liberia or from the other effected countries. But we want to thank you for Standing Firm in resisting that pressure and rallying the American People to see this for what it was and to join partnership with liberia and others to be able to confront it. We also thank you for the military. We know that this may not have been welcome by some, but that made a critical difference in sending a strong message to the liberian people that the United States was with us. And the military not only braced the confidence and motivation of people to save themselves but also left behind a very permanent contribution because they worked with our military. As a result of that today our military can go out and they can build those structures, Health Treatment centers because of their association their work with the u. S. Military. As you correctly pointed out even though 13 of our 15 political subdivisions are now having no new cases and even though we feel confident that we are getting to the place where we can really say we can confront and beat this disease but we know we are not there yet. We are not there because we are still in a region where a few other effected countries, they have not reached the level of success and progress that we have, but we know that we all remain on a threat until all of us have reached a place where we get to zero. And so we have to remain resilient. We would like to see a regional approach for the protection of our borders, to be able to monitor and to manage cross border travel in our long and porous borders. We would like to see the partnership continue as we move towards rebuilding our Health Infrastructure which they have had some meetings. Today we remain confident. You know mr. President the one critical element in all of this was our own people particularly our community people. They took charge. They said were not going to die. Were not going to lose our livelylive lae lively hoods. We are not going to reverse the gains we have made over the past ten years of peace. And so were going to they got the support from the u. S. Entities and the International Community, but they took responsibility. They took leadership. They took ownership. And Going Forward we want to strengthen that. We do not want to lose that motivation and capacity. We want to see them now apply it post ebola to be able to accelerate our own development agenda. So, again, mr. President our message is to come and say to the American People to the u. S. Congress who supported your program in a bipartisan way, i might say, to say to you that your support your partnership has worked. We see it as a Success Story even though we have a lot more work to do. We want to thank you. Thank you madame president. Thank you so much. Thank you, everybody. Thank you, guys. Thank you. Coming up tonight on cspan 3 a look at yesterdays landmark fcc vote on new open internet rules. Then white house Cyber Security coordinator Michael Daniel talks about Cyber Threats and information sharing. The fcc has approved new open internet rules to regulate Internet Service as a public utility. The Net Neutrality ruling prohibits servers from blocking or discriminating through legal contents. Commissioners discuss the decision and explain their opposition. This event is hosted by tech freedom and the International Center for law and economics. It runs about 50 minutes. And were tweeting on fcc live so feel free to join the conversation on twitter. We are Live Streaming so we will take questions from the audience and make sure we get you a mic. If you can turn ringers off on your phones we are recording today and cspan has been kind enough to cover this event. Thanks for coming. Here we are five years later and rob mcdowell is here to kick things off and tell us about his first crack at this. So you were on the commission for six years . Seven. And here we are again. Here we are again, groundhog day except a little different this time. Mark said first time tragedy, second time farce. Here we are a third time. What would you call this . We could be back to a tragedy. It could be a cycle. This is an unfortunate day. I think everyone is familiar with my views. A couple of quick things. Number one the fcc went far beyond what the president said he wanted to do. Not only is independence a question by what it did yesterday, but the overkill with which it executed its actions is really quite astonishing. We dont have an order to read yet so we will have to caveat all remarks given that. Based on the statements and the memo the chairman put out a couple weeks ago we know that they went much farther than they said they needed to originally. All talk of light touch i hope that mask is revealed. I hope that is revealed as a farce and completely disingenuous. Big picture looking back on all of this, where do you think this went off the rails . At the very beginning. Was it ever on the rails i think is the question. It was a run away train that was never on the rails. So, you know first of all, i think the other side im trying to look at this as objectively as i can which is difficult. The other side did a masterful job of messaging. They had to create a sense of a crisis. And then say the internet is so broken that only the government can fix it. And then on top of that say that three unelected washington bureaucrats of which im a recovering one and i have two good friends in the room and they understand their role those three are better able to resolve all of the challenges of the internet and manage its growth better than entrepreneurs and engineers and consumers. And we need more than just existing law and that something is wrong with this market place when its not. The american internet is the greatest Success Story of all time. And so this could all be turned on its ear to have one of the most massive government interventions into a world leading economic sector that is improving the human condition unlike anything else in Human History is really a shame. But when you were fighting this fight it wasbed Net Neutrality and now about title two. Is there bait and switch . History is important and you are a terrific student of history. Remember ten years or so ago this was advertised at making sure Internet Service providers could not block content or degrade the content or act in an anticompetitive way to harm consumers. It was a last mile focused thing. It wasnt happening. The government never did a market study which i called for in 2008. And there are already laws on the books that exist that would make that illegal. So it wasnt happening because of Market Forces and because of existing law that existed prior to yesterday. It has evolved to be the term Net Neutrality an empty vessel into which anyone can pour their hopes and dreams of the government regulating their rival but not them. Thats what many requests boil down to at the fcc, please regulate my rival but not me. He is running too fast can you slow him down . I think the point that for all these years Net Neutrality purists have rejected the notion of the bona fide peer review market study shows that there is a fear of what that might reveal. The last time anything like that was attempted was in 07 but by the federal trade commission which in a unanimous vote said there was nothing broken in the internet to access market and warned against the unintended consequences of new rules in this space. And it was actually pressed. Here we are today. You mentioned comcast and said that could have been addressed by existing laws. Do you think things would have turned out differently if the federal trade commission had gotten involved and looked into whether it was unfair trade practice . Might that be a different direction . Absolutely. Federal trade commission is very well equipped. 100 years of case law and common law separates in many highly complex parts of the economy. Operating systems of computers and the rest and has done a good job there and is enforcement based. You have the due process protections of going to court and can operate in a pretty quick manner. One of the arguments against the ftc or Consumer Protection or antitrust enforcement in this area one of the arguments is that is too slow. The Net Neutrality has been trying to get fcc involved. Could have done a number of Market Studies and had the fcc act in different ways in that time. You have the due process protections of being in court. At the fcc you have no due process protections. The fcc is fact gatherer investigator judge jury and executioner all before the Company Knows what is happening to them. In comcast the fcc never conducted a factual investigation. People never visited and talked to regional manager to find out exactly what was happening and why. The fcc acted anyway. It could have been handled under different law much more flexbly. What is really going on i think is all about economic regulation. This is the cap stone despite the protest to the contrary yesterday. I think the majority of the commission they swear they are not going to do rate regulation whether implicit or not. We will see. Access to networks and rate regulation are intertwined and i think there will be a complaint at some point to say by some socalled provider that we will have networks that look a lot like an isp. They will be saying isp provider or internet back bone provider is providing me access saying they allow access to the network but at a price we think is way too high. Do something about it. The fcc is going to be put in the spot of saying we said we werent going to rate regulate and we are not rate regulating. You are right. That price is too high. Please come back to us with another price. That is going to happen because that is really the folks who are against usage space pricing or tier pricing or pricing freedom. Those against it that is what this debate really is all about. So just to wrap up where two very important guys waiting in the wings. Where do you want this debate to go . What do you think is the best Case Scenario . That is gets blown up in the Appellate Courts to smithereens. I am hopeful bordering on optimism but not quite there yet but im hopeful there could be a legislative solution here but the president can veto it so there is that. Thanks so much for coming. Thank you for having me. Sorry to rush through this. I now introduce the current two commissioners on the federal Communications Commission who are joining me here with Jeffrey Manny of the International Center for law and economics. Please. As many of you know jeff and i are pretty much sick of each other at this point. So to get started here so evidence of a problem, is there any . I think there is evidence in the fact that some think the dress is gold and white and others think it is black and blue. The government needs to fix this. Thanks for hosting this. Could not be more timely. I think what commissioner mcdowel pointed out is you would search in vein not just in this order but throughout the fccs consideration of this issue that there has never been a systemic analysis of what the problem of the internet is. In this order you see scattered niche examples of Madison River attended at degrading certain applications. You see apple and face time and that controversy all of which result through private sector initiatives. The agency decides to create digital dysfunction in order to swing the sledgehammer of title 2 regulations at it. I think Net Neutrality is a solution that wont work in search of a problem that doesnt exist. I think that is absolutely where we are today. Let me read you a quote. Back in 2007 the fcc tried to revise ownership rules. They have been through this before and failed in court. A congressional democrat objected and said there is inadequate data and time to put together an independent panel and objected to the agency moving forward without fully understanding the effects of the decision. That was senator barack obama. And yet today seems like things are very different. There are two parts. First and foremost is i think the latter that it has been talked about in a number of different forums is the right to have the document available to the public. It is something i have been pushing for and my colleagues pushing for, a number of chair men in the house and senate have pushed for. We should have had this document three weeks ago. We should have made that available so people can look at the specifics of the issue look at what we are talking about when complaints that i raise and my colleague raises Going Forward. That wasnt allowed disappointingly. It is something that not only applies in this context but should in many other contexts. There are a lot of other forums. I make the argument that it should be done for every open meeting and make the items circulated available for every open meeting. We will have the conversations continuing at the commission and maybe at some point able to make it happen. To the bigger point and i think it is to your first question to my colleague is there a problem and the answer is there is a problem. It is the document that we adopted yesterday. That is the big problem in terms of what is Going Forwardism i know people havent had the opportunity to read it like we have. I had the benefit of reading it on my honeymoon in hawaii. That was a little bit comfort. I made this point that it is a page turner. And in the sense that you dont know what the next page is going to do. It is 300 plus pages. You read through it and you are like what is the next one . What is going to happen next . You are looking for justification and of course a lot of that is missing. I have problems with the content in and of itself. That is the problem in my view. The bigger question is is there a problem in the Net Neutrality issue that we are trying to solve. I think my colleague highlighted it well. Its prophylactic. There is no underlying problem. This is to go forward, something we are trying to guess. Its guilt by imagination, trying to figure out what might happen in the future even though it is not happening in the market place today. Has anything changed since the 2010 order or since the evidence amassed such as it is evidence that was described as examples that arent enough to tell a coherent story about Net Neutrality anything changed in this order . Have you seen any additional evidence that suggests there is a greater need for some kind of action . A tremendous amount has changed. Broad band deployment is greater. Investment has gone up tremendously. On the mobile side much more penetration and much more speed. The market place that the fcc claims is competitive in some areas have declared others not competitive. Last may you proposed doing independent studies in the model. Even that wasnt enough and last may the chairman ignored your proposal. What would you have wanted i have gotten used to that. Part of the reason why it is proposed is that this issue has been largely fact free for the better part of a decade and it is shocking that recent Decision Making has been thrown by the wayside in favor of what i consider an idealogical agenda. The fcc approved president obamas plan. This should not be a political issue. Never has been before. There has been a historic bipartisan consensus. According to the wall street journal you had white house aides casting a ballot for an initiative they thought would build the president s legacy. To me it seems the internet should be governed by engineers. What would you say is an appropriate response if any to quoting you from yesterday, the order giving most charitable interpretation possible says that isps hold tools necessary to deceive consumers, grade content or disfavor content they dont like. Assuming there arent examples of actual conduct that is the sum total of the problem. If we agree that is the problem what would you do about it . Let us concede for the sake of the argument that isps have not only the ability to discriminate but would discriminate in the future it seems to me that to the extent that there isnt a current problem regulation isnt the way to go. There are many, many tools from antitrust that are available to strike at any competitive conduct by players with market power who are behaving in ways that harm the consumer. The fccs decision yesterday strips one of our major agencies of that tool and that is the ftc because of the common carrier exemption. That is the tool that they need in order to protect consumers. The fcc sweeps all of those powers in order to argate the sole determination of the whim of three elected as to how the internet will work. Can i jump in . The earlier question was what has changed since 2010 item . And the answer in part is the court has ruled that the last item was problematic except for the transparency rule. Two parts got thrown out and that became the question of what is our authority under section 706, i dont believe there is authority under section 706. The court ruled otherwise. That was not enough for the radical protesters. They had to have title ii. I made the point it is a means to an ending. It wasnt about Net Neutrality. It became about title ii being imposed on all of the internet. Not just the last mile but about every aspect of it. That is very problematic. My point to your second question lets assume that isps have this power. You have to break that down. Thats a very broad assumption because think of all of the small isps. I was in st. Louis talking to the wireless guys. They have hundreds of customers, not millions of customers. They have hundreds of customers. I talked to 100 customers and stringing together a network to provide the best service they can to their consumers. They have no market power. I made the point if they called up google and said we want to block your offering we are not going to let your product reach our consumers what are you going to pay us, google wouldnt take their call. We have to be very careful lumping everyone together. There are small cable providers that do not have this power. Instead the argument had been made and a strong argument that there should have been some type of treatment providing to small providers and the commission ignored it. So on this example im really struck on the example back in 2011 metro pcs trying to get to adopt and there were attacks as being the first to commit a major Net Neutrality violation. What they were really trying to do is give people free service partnering with google. What do you draw from that example that radicals will point to a company that had no market power but was doing something that wasnt strictly nonneutral . I think the message is how dare they be innovative . How dare they try to differentiate themselves in the market place. The product must be at these speeds and have these features and anything that provides anything different that tries to figure out how best to operate in the market, what might meet Consumer Needs is not acceptable . I think it is disturbing of what is to come if you look at fcc analysis of the conduct standard that sweeps in virtually any kind of internet related business practice. It is pretty clear the agency has on the chopping block all kinds of Innovative Service plans like metro pcss previous service. The best example is what the fcc said yesterday. Let me read you a response to the question. The press posed a question. Can you tell us more about the internet conduct standard . What are some examples of how the fcc might use it . This is a quote we dont really know. We dont know where things go next. Using this kind of construct of what is reasonable. The fcc will sit there as a referee and be able to throw the flag. Is there a better example of the fact that now we will have lawyers and bureaucrats making these decisions than that . If you were an entrepreneur trying to make a splash in a market place that is competitive how do you differentiate yourself if you build into your equation whether or not regulatory permission. Permissionless innovation is a thing of the past. As it was said reasonable is the most litigated word in the english language. To the point made yesterday the question was from the press conference does an isp have to get preapproval of what it is offering and the answer is ta dont have to. I would hate to be in that situation. Just to give you another quick example first over lte, everyone agrees it is a fantastic service that requires priority coding to work properly. By definition engineers say it has to have priority coding. It follows other related applications cant. Is that a Net Neutrality violation . I dont know whether three bureaucrats in the fcc will decide it is or isnt. And it is one thing if it was three bureaucrats. We are talking about something delegated to the Enforcement Bureau or some other part where we may never see it. That decision may be made long ago and the practice may have been threatened against the company and will stop doing it. Thats something we may never rise to our level given the structure of the item. So this is intentionally naive but im going to ask it anyway because it is possible. There must be some limitations to the order. I know i have seen reports that there are seven factors that will inform the decision. That doesnt strike me as much of a limitation. Is there anything else that would rise to the level of limitation . The court in the verizon case pointed out that 706 had limitations. These limitations are no limitations at all. Did they try to put that kind of limitation here . Let me put it this way. The best argument against that point with respect to limitations comes from the Electronic Frontier foundation which submit last week and put a blog post in two days before vote this week saying the seven factors are vague. Nobody knows how they will be applied. Smaller competitors will have to lawyer up in order to get a plan approved. I would add that what it doesnt know is the plan says the list of factors is nonexhaustive and there may be a number of other factors it might include. If looking at a regulatory body in washington applying the circumstances test it really is the whim as to what is reasonable. They dont call it a catch all for nothing. It is intended to catch everybody. I can think of like data roaming where you can argue some are more specific than others and whatever else we feel at that moment. Put your finger in the air and see where the wipd blows. Is Silicon Valley about to get an ugly wakeup here . The Electronic Frontier foundation in 2007, 2008, 2009 warned about the claims of ancillary jurisdiction. They worried about that being trojan horse. Last year they seemed to embrace title ii. Now they are having cold feet. Do you think they are going to be unpleasantly surprised how this develops . I think we are already seeing evidence that they are unpleasantly surprised. Look at google last week people got wind the fcc is going to classify broad band subscriber Access Service arrangements [ inaudible ] i really recommend googles export abecause it demonstrates what happens when an agency which doesnt have expertise in the area opines in the dark. According to google there is no such thing. They called it imaginary and said it would have second order effects and be disastrous. Google said it would empower to engage in some sort of sender pays approach which would be devastating. But for the fact google made the voice heard the fcc would have been on the brink of creating this without public input. I think there are a number of Authority Things that they will be very unhappy with. I think my colleague said this well in terms of when you read this document its worst than you imagined. I think folks are going to have an opportunity to digest it. I have been making the case to edge providers for years that they are going to be in the fccs authority and that is extremely problematic and they do not want that. The pushback has been they feel comfortable that that wont happen. I do not feel comfortable having followed the fcc for so many years and working at the fcc that i believe it will capture edge providers and all of the activity that they do today although the Amazing Things it is able to bring forward to american consumers. I think you opined on this before. Isnt that true under 706 . Title ii making that a bigger problem than it would have been . I think it is problematic under 706. I think title ii brings exactly what my friend highlighted is all the rate regulation. You can argue that 706 may prevent some of that depending on the structure. Certainly what there has been the presentation that this wont get to rate regulation. I think the previous presentation highlighted you are going to have to get to rate regulation. When the complaint is filed how do you resolve without consideration of the rates. I think that means that the edge providers are going to be in that debate and that is a terrible place to be in terms of what they can actually bring forward. I think also the commissions reliance on 201a is problematic even more than 706 because it is relying on statutory provision. They can specify on what terms infrastructure has to be deployed and specify through routes. This is really onerous. I think a lot of people will be unhappy to see it. From the point of view of an edge provider and Different Cases where this will matter more and less. Arguably at least title ii applies to telecommunications service. Doesnt let the fcc regulate what it cant under the act. Im curious again and this may be too hypothetical to answer, to the extent that edge providers in particular might be at risk do you see 201a being the primary source of trouble or is it 706 enough to cause them concern . Either could be problematic. The problem is fcc is focusing on the end rather than the means. The danger, though, which i tried to illustrate in another context is edge providers like netflix. One could make the argument that open video standards are critical to the functioning of a good Consumer Experience for when it comes to video. I said i dont want the fcc to go down this route. It is not inconceivable to think if there is market power in the online video market place and deploying to disrupt some of the video traffic that from being recognized could a future fcc decide if that is a violation of this virtual cycle . Sure they could. There is no distinction between the two. The chairman kept saying he did a rigorous analysis. Where is the rigor . Did he use the word rigor . He did several times. Could i answer the first question. There is this belief that it is title ii. The truth of the matter is you should get both. Its not one or the other. You get both and lay it on top of each other and then get an opportunity to see how far title ii and 201a goes. You dont need the rest of title ii based on the views of where this Commission Wants to go because you have 201. 201 does everything. You really need 151 and 201. You dont need the rest of the provisions. Congress is wasting its time by including language. Im not sure why you need any other provision in title iii. So this is odd because mobile broad band doesnt exist. 25 mega bits per second is the standard. 4 g subscribers. Is that what you mean when you talk about [ inaudible ]. The interesting thing and i dont want to get too specific but when you have an opportunity to digest the document the argument is presented that forebearance is used extensively so only certain portions of title ii are implied. 56 of my analysis is from in an optical sense of the word. 44 still applies. That 56 that is being forborne the provisions are subsuned into 201. Those provisions [ inaudible ] you can do it in 201. Earlier language providing specificity on how clear that all that can be covered by the other provisions. You only need a couple core provisions to cover every problem that doesnt exist today but may be seen in the future. Gl the addition it is remarkable how many times the document uses for now and at this time. We decide to forebear from now from this provision. We think at this time this provision isnt necessary. What we have seen are a lot of promises of regulatory restraint change based on not facts in the record. So just to summarize and be clear here what im hearing you say is they are not forebearing from the important parts but what they are they are promising not to use those in ways today. What are they giving up if anything . I would argue that they are promising to be a little more specific and promising not to use a specific provision here that they are forebearing from but will use 201 to do dirty work. What do you say to the chairman when he insists forebearance worked find for wireless voice. If one looks at the trajectory of spending by the Wireless Industry it was driven by explosion in mobile data use. Because voice was classified as title ii it is that matters because mobile is not title ii. Mobile voice. Mobile data. Secondly, i noted it is an irony as we know there is no such thing as mobile broad band. Additionally there is a problem with respect to for bearance that people assume that reasonable i will leave it at that. I would concur with that. I certainly with the problem in terms of definitions when you start seeing mobile data i think the statute is very clear. I think that as i said yesterday they are trying to find their way out of the issue and try to subsume it and treat it the same knowing that mobile has so many different components that make it so different than a fixed broad band offering. So i want to make sure we leave time for questions. We havent covered any broadband and a few more process questions to wrap up. Senator obama back in 2007 also talked about the need for public to see the order. And he said that it was not enough for the fcc to make a decision but had to give the public a chance to see it and give congress a chance to react. Why do you think that they wouldnt do what chairman at the time did, put the order out for another round of Public Comment, got another 30 days avoided concerns about legal challenges, about not having proper notice. Delayed the vote. Why did the commission do that this time . Well, it has been publicly reported that the agency was struggling with the question. Should we put new proposals on the table. The president having instructed the fcc to implement his plan which had never been on the table the agency was worried from an administrative procedure act perspective. They decided not to seek further comment. Why . I think because they were being beaten up by the same groups that had successfully according to the journal blind sided the chairman. Those groups were saying we do not want to delay. Delay is not necessary. There is a crisis to solve now. Solve it. So you would say there is a reasonable question whether the title ii sufficiently . I think there is a significant issue. Absolutely. Surely the groups pushing the fcc care about having rules in place. They wouldnt benefit if this fight starts all over again and get to raise money all over again on this issue. That would be ridiculous. Young fool only now at the end do you understand. I think my colleague has framed it well. A number of the groups. You can have a hard time getting that one. A number of the groups had an artificial deadline in their head. You saw this in our previous meeting. We had protesters in previous meetings say what are you delaying for . I think the pressure on getting something done was more important to have an artificial deadline in february rather than waiting until could it wait 30 days until march until you build a more stronger document . I think the groups had said we are going to do this now and has to be done now. Again, if it goes down they will spend years and years looking for it fighting, raising money, advocating for it again. I want to turn to broad band, one more question on this. The chairman when he announced the fact sheet before the order made a big deal about modernizing the communications act. Is that the fccs job . No. It has no right to do that. And i think the fact sheet in my opinion is very misleading. I think it is very problematic in terms of what was on that document and what you will see eventually in the final document. My colleague put it will. I will add you cannot have it both ways and claim these are strongest rules adopted by the fcc and then claim that you are modernizing the communications regulation. The consumer, isps arent going to see a dimes decrease in user revenue revenue. I am confident based on what i have read and i know my colleague feels the same once the public sees how far reaching this is they will realize this is anything other than modernizing. It is a point we have made a number of times. You will see additional costs. Rates are going to go up because of this item. You are going to see universal Service Decisions made. It defers the issue as highlighted in the fact sheet. It defers the question of whether broadband should be subsumed into universal service funding. That is a matter we will deal with and consumers will see higher rates because of it. The fccs defenders insist it is only 11 billion in new taxes and not 14 or 15. Whats wrong with that . To that struggling family figuring out whether to keep broadband in the household and trying to figure out things given different economy they are facing that matters. Every couple dollars matters to a consumer. We know that to be true in terms of adoption rates. Every time one of the issues arises we are told it is only the cost of a cup of coffee. Its just a little saucer full of tea. Eventually you realize this is ridiculous for the american consumer. Nobody is complaining that the broadband bill is too low but that is what the fcc will feed into because of the second order effects. Reclassifying Telecom Services exposes to higher property taxes, District Of Columbia has 11 general receipt tax on other Information Service providers. 11 tax on products. There is zero recognition of that in this order. You both mentioned a few times the 706 report, the fcc redefined broadband to mean 25 mega bits down and three up. What was wrong with that report . You want to start . That is too fast. Its an extensive report. Lets start how it is so important that mobile be subsumed into our broad band regulations we adopted yesterday. Mobile is not counted for that purpose. It is exempt and said we dont have enough data for that purpose and by the way it wouldnt meet it anyway. It wouldnt meet the test that we have. I have argued extensively that the new standard is done for one reason and that is to make sure that the commission reserves its authority to try to use, to impose under 706 and not about the standard itself. I have been talking to a number different small cable providers and talked to somebody who said i tried to build my network out. I went to 101 because i know that is where the chigz is going and i went to 20 and trying to be ahead and the commissions determine that im not actually qualifying and i have to deal with that problem. I have consumers saying i dont have broadband you must increase speeds. Thats not the purpose of the report itself. That is problematic for his business Going Forward. This administration has taken a Cool Hand Luke approach. What we have is a failure to communicate. We have seen they raise the bar to say the market place isnt competitive. The proof in the pudding is when we have to adopt rule makings involving ree issues of broad band deployment. Updating universal service fund. We targeted 10 as the standard and said we will spend up to 10 billion to make sure it is deployed. The mega bit per second standard why are we wasting money that isnt broad band. What is the point of the exercise . Really about justifying more power grabs . I think that is part of it and part of it is it is just a great headline. I think we better look for questions. One final question and then questions from the audience. You need broadband preemption. The constitution in the laws of the United States. Other than that, how was the play . I made it pretty clear and you can see that i think under Gregory V Ashcroft it is clear that the fcc fails the clear statement rule here. If Supreme Court said it wasnt sufficient enough for congress to be determined to given preemptive authority i dont see how this possibly could. I couldnt agree more. I have problems and articulated my views on broad band in and of itself. If you do analysis of different provisions that states have enacted over the years to make sure that rate payers and taxpayers are not fleeced in these new monorails that are being built in many locations, we had a number of them fail. Thats you look at the list of the activities that states have imposed and most of them make complete sense, referendum. You have to actually have a Business Plan. We actually preempted the requirement that a state said they should have a Business Plan. Can you imagine that they would go forward without a Business Plan . There are so many different requirements that make a lot of sense in the broadband world. Our ruling and you will have an opportunity to see that at some point highlights that anything less than a flat band the commission can preempt. What we are doing is driving states to enact total bans on broadband. If thats where they want to go then that is where states will go. Before you ask the question we have very limited time with the commissioners. I would like to get as many questions as possible. One word answer. Im a long time telecom entrepreneur. Im going to read the 317 pages or whatever. Im going to find in there where my next startup is going to be clearly not regulated. So i have started six, seven companies to this point. The first thing you look for is find out where you are orient it versus traditional regulation. Am i going to find that as to where my next startup should be . The order exempts coffee shops that provide Internet Access today. For now. At this time. If you are looking for a lucrative business you should be a telecom lawyer. That is part of the problem is the order is so vast it is hard to say where you would find such an opportunity. I want to ask about this fake 4 million number which i find offensive having organized comments that oppose title ii and the opposite sentiment is attributed which is offensive to me and the people who said we oppose this including most people in this room. The actual data release from the commission had 2. 5 million comments. They claimed there were 1 had the 4 million that no one saw. We know at least 100,000 came from abroad. I dont think those should count. Suddenly it is 4 million plus. We have a guy who wants to regulate the internet who thinks 3. 9 is greater than 4. Why is this claim being given any purchase . I have raised this point. At least a million were on the opposite side. Its been subsumed we saw it yesterday and the press releases that 4 Million People have weighed in. A good portion of them do not like any activity. Im still getting emails today people sending me please dont do this. This is wrong. Its the wrong direction. One final question. So its probably playing what ifs. When this started a year ago the chairman initially proposed rules under 706. Do you guys think if you had supported the rules then, the rules under 706 if this would have played out differently and if we would have ended up where we did now . If you believe Net Neutrality activists were placated by republican support for weak need gutless according to them Net Neutrality regulations then i have a bridge to sell you. If you think that we can support something that will be where the majority will stay as opposed to where the administration will weigh in on title ii do you think we can hold that day, thats a different commission than i know. Fair enough. Commissioner, i have to take off. Please join me in thanking them. [ applause ] on the next washington journal tom shoop has the latest developments in funding the department of Homeland Security and the legal and political status of president obamas executive orders on immigration. Anna gal nd talks about efforts to recruit massachusetts senator Elizabeth Warren to run for president in 2016 the prognosiss request to congress to fight iisis. And founder and ceo of american majority discusses the deservative movements legislative and political agenda. We will take your calls and join the conversation on facebook and twitter. Washington journal live at 7 00 a. M. Eastern on cspan. We have received more than 2,200 entries from 400 schools across the country in this years cspan student camvideo competition on the theme the three branches and you. Wednesday morning we will announce the grand prize winner and show their winning documentary. Following the announcement you can see all 150 winning documentaries at studentcam. Org. The cspan cities tour takes American History tv on the road traveling to u. S. Cities. Next weekend we partner with comcast for a visit to comcast for a visit to galvaston, texas. With the opening of the suez canal in 1869, sailing ships were almost dealt a death blow. Coalfired ships had a shorter route to the northeast, to india, to all of those markets. So sailing ships had to find a way to make their own living. Instead of highvalue cargo, they started carrying lowervalued cargoes. Coal, oil, cotton, et cetera. So elisa really found her niche in carrying any kind of cargo that did not get to market at a fast pace. We return now to the tech Freedom Forum on the fccs open internet rules. This panel is discussing Internet Service providers from blocking or discriminating against legal content moving through their networks. This runs an hour and twentyfive minutes. Well again, thank you so much for coming to this jointtype Freedom International krepter for law economics. As always when we do these panels, we try to present both sides. You heard from one side of the debate and now youre going to hear from the other side of the debate. As you know, here to defend im sure, the fcc in all respects and every detail and then im very happy to have my former colleague, barbara esben who was at the fcc veter ran communications lawyer. And now represents small cable companies, including the American Cable Association at the law firm of cinnamon and ure. So, with that said, well just get into it. So we just hard from commissioner pi and commissioner o reilly. I would love to hear your reactions . Lets start with process. Do you think this was the most open transparent democratic riggering that the fcc ever had as the chairman said yesterday . Or could it be done better . I suppose its always been done better, but i cant remember one thiss been more, you know, open or thoroughly hashed out than this. This is just the standard fcc process. But it did it almost on steroids with lots of workshops, town Hall Meetings obviously town Hall Meetings. And at the end, at the very end, some people are asking well, this should be done differently than the commission has ever done in the last 20 years. Its a little late in the game to change the rules. The initial decision under the panel fcc that got us here was, itself, controversial. It went to the ninth sir cut the ninth sir cut overturned the commission. The ninth circuit refused to take the case and then that was overturned. Youre referring to the initial classification . The initial title, thats right. The initial deregulatory approach. You had a ninth sir cut reversing the fcc and since that time, the fcc has seshltly struggled to try to figure out how to operate in the space. There is a process an old process, for putting a tentive decision out for further Public Notice and comment. And that was used in computer 2 in the early 780s. To me the biggest problem really is, you have, for kmampl wheeler saying todays open Internet Order is a shining example of american democracy at work. Now, i understand the importance of Public Comment e comment in fcc decisionmaking for a long time. But it is afterall, an Expert Agency that its supposed to be we think to justify its kpisz tense because it has a particular ablt to collect, assess highly technical sort of information. What i would say about the idea, for example, opening up the dock et to more comment is from what i can tell, from the way chairman wheeler would have responded to that it wouldnt have mattered anything from the other side. Theres actually enormous amount of that in the docket. And, yet, he says, you know, we listened, we learned, we adjusted our approach based on the public record. Ive seen the public record. And the public record, i know because i criminal intented thousands of pages to it. I know that it contains an enormous amount of information that contradicts the view. But if you listen to wheeler its like, you know, weve got four million comments and that was enough to sway us. That doesnt sound like to me, what the fcc should be doing. Its an enormous amount of information and data on both sides thats completely contradict each other. But i think from the chairmans perspective, what you just said is a bit unfair. Certainly, from his perspective and even from ours, to a degree he began with a proposal, you know, back in may of last year, you know a proposal under a kmeshlt reasonable standpoint. And so the chairman himself evolved from a 70 6 to a senderside to title 2 now to a very different type of title 2 and jet sinning, even at the last minute, the sender side. What concerns me the way it sounds like what pushed in that direction was comments and the millions of often autogenerated, very short and not particularly or in