Coons. Convening under different circumstances than our previous meeting. The were cbc following the guidanc the cdc and the office of the attending physician. So were spaced further apart. Our staff is reduced. Though we are grateful for all of them. The general public is watching online rather than filling up the room. So our hearing today will look a little different. I think we could all agree that the capitol feels a little different, the halls of congress feel a little different. Small businesses, if theyre allowed to open at all, are operating under a very different circumstance. American homes have been classrooms. And offices for millions of americanan family. And at least for a while American Life as we know it has changed. Net nonetheless, access or inaccess to Broadband Internet services m especially in rural areas has remain unchanged. And it might be a good topic for us to touch on today. Our witness today of course is the esteemed chairman of they6yf the governments most experts on Broadband Internet access. Thank you for being here. Well hear from the chairman about the agency spectrum auction program. And any other topic that members su the subcommittee to like to talk to him about. L i hope today will address the critical need to expand hi this country. I think we continue to lag and i think by not making as many progress as we should were an getting further behind. Well discuss the agencys response to the ever growing demand for wireless services. Including the commissions decision with respect to c band. I think everybody in this room knows that a number of us, including me, have been pretty outspoken about the mid band spectrum. I believe from the beginning that we should have a public b. Auction as a transparent means to allocate the c band and as an assurance that luxenberg Satellite Companies, i have nothing against luxenberg, wonderful place, but as an assurance that luxenberg Satellite Companies and shareholders would not be the beneficiaries of what i think any fairminded person would consider to be a windfall that s should go to theed american peoe and im very pleased that the chairman and the commission ultimately announced their support for a public auction this year. Im not completely pleased. Im pleased with the public auction. But im not pleased with the ad parameters of the plan, as the chairman knows. I oppose the commissions proposal to provide 15 billion in various payments to the satellite operators. To makes sense to me as we ask the satellite operators to move, not to move to a new part of the spectrum, just to move within the spectrum, the c band, and tf allow us to use that portion of the c band that theyre not using. That seemed reasonable to me and it seemed reasonable to me thatt we should pay their moving expenses. But were paying them a lot more. Ould b about 9 billion in Walking Around money. D and that money could be used to expand broadband. It could be used to expand Rural Broadband. Ho students connect to the internet to complete homework. Or simply pay down our national debt. Let me say it again, were providing i think somewhere in a the neighborhood of 6 billion in moving expenses which seems fair to me. But the 9 billion to do something that they would have to do anyway and are required to do at the fcc tells me i think is a waste of taxpayer money. And ive authored a bill to address those concerns. Ommiss rather than work with congress on a solution, the commission decided to move forward and to make the deal with the Satellite Companies. The biggest of which promptly ae went into bankruptcy to try to provide leverage. I mean, these companies were e l willing to give up something iu they didnt own ines exchange f billions of dollars. I guess i shouldnt blame them e for not thumping a free melon and taking advantage of the offer. I blame us for not negotiating a better deal. So today well talk about that. Before introducing our witness i want to turn to my friend from delaware. Thank you, chairman kennedy, thank you for convening this hearing and welcome to chairman pai which i believe is your reirdrdthan hearing before the subcommittee and re welcome regular opportunities to detailed engagement and i want to commend you and your staff for making this hearing happen while taking appropriate e precautions to protect those ins attendance. We need to demonstrate our o commitment to thorough and vigorous over sight so i look forward to todays hearing. Leado senator kennedy youve been a leader on the c band issue. And strong advocate for public auction consistent with your role as a steward of federal dollars. Chairman pai, i look forward ton hearing whether there is anything we could do to help make certain this happens on time. I think we all share an understanding of how critical a successful and timely deployment of 5g is to our country. It should bring billions of dollars to the treasury and i would love to find a way to Work Together to have some of the proceeds go to expand broadband in rural and other underserved areas and i have a few ideas. Ussing im interested in also discussing today the implementation of the broadband data act. Ways to facilitate Online Learning during this coronavirus epidemic and figuring out how we can make progress on robocaller fine collection and repair and m replace funding. And last, chairman pai, i want to commend you for the emo in successfulcl implementation of e telehealth demo included in the c. A. R. E. S. Act. You noted in your prepared testimony that the quickly implemented program has made Funds Available to grantees across the country, not the least of which in the states of louisiana and delaware. So i commend you for theot wisd of your prior ortization. Rward with that, i look forward to mi todays hearing and appreciate do either of you are anything youd like to say . Okay. Chairman, why dont you stand and ill swear you in. Do you swear to tell the truth and nothing but truth so help you god . I do. Chairman needs no introduction u. Hes been on fcc since may of 2012. The president designated him the chairman in january 2017. Hes a proud not current resident but at one point was a resident. He went to harvard undergrad, chicago law school. Wo extraordinary institutions. F generaco hes been an attorney at the justice department, the fcc office of General Council, Senate Judiciary committee. He was a partner at jenner and block. You were at a jenner at block. Wonderful law firm, has been for years before his confirmation at the fcc, and hes worked at Verizon Communications earlier in his distinguished career. Mr. Chairman, you honor us with your presence and the floor is yours. Thank you, chairman kenny for the kind words. It has been 8 years although at this point id measure my tenure in pounds and gray hair instead of time. I appear before you to today discuss the fccs Spectrum Program and update you on the work of the commission. When i last appeared before you on march 10th, immediately following that hearing as the chairman pointed out our country was disrupted drastically. Ever since the fcc has been deploying every resource at our disposal to deal with this unprecedented national emergency. For example, i challenge broadband and Telephone Service providers in early march to take what i call the keep americans connected pledge. A volunteer commitment to among other things not terminate service to any residential or Small Business customers because of their inability to pay their bills due to the disruptions caused by the coronavirus pandemic. Im proud of the fact over 780 broadband and Telephone Service providers across the country including all of our nations largest providers have taken that pledge. Moreover, many have gone above and beyond the pledge and have taken additional steps to maintain or expand connectivity during the pandemic. I also want to thank this subcommittee for helping to establish the covid19 Telehealth Program as a part of the cares act. By promoting were enabling many mere people to access care remotely. The commission establish ed the rules for the program in just days after passage of the act. Its now approved funding for 305 Health Care Providers in 42 states plus washington, d. C. For a total of almost 105 million in funding commitments including to louisiana and delaware as senator coons pointed out. In addition to his covid19 related work the commission has continued its ongoing efforts to close the Digital Divide and execute on the 5g fast plan. For instance, were on track to commencement an auction from 3. 7 to 3. 9 gigahertz. Beginning on december 8th. Announced earlier this month all eligible space station operators currently using the spectrum hae committed to an accelerated relocation, which means it willt become available for 5g in the r United States 2 to 5 years stas earlier than would have been thr case. Getting this essential spectrumt out into the marketplace years ahead of schedule will promote American Leadership in 5g. Even with all this progress the commission needs your help. For example, since our last hearing Congress Passed a securi and trusted communications act. This law ratifies the commissions proposal to propose small Rural Telecommunication Companies to end their reliance on manufacturers that pose National Security threats. Ission i strongly support the rip and replace requirements that congress mandated, but that mandate came without money. Last november we estimated that a fullscale rip and replace program could cost up to 2 billion and we ordered an Information Collection to nail down those costs for all covered carriers. Were working through the data s thats been collected but we also want to work with you to get the funds needed to reats. s implement this program and protect americas networks from National Security threats. Similarly Congress Passed recently the broadband data act which ratifies the commissions decision last august to require new granular broadband maps. Deployment maps. But that law prohibited us on relying on the Administrative Service company to implement that effort and the fcc simply does not have the 65 we need to implement. F finally i should note there is l one auction currently mandated by federal law we are not looking forward to holing. Specifically the spectrum map ow 2012 mandates we auction off e parts of the tband which is re currently used by Public Safety entities in several states. Our highly skilled economists believe this auction will raise less revenue. Of the because of the statutory mandato our staff has nonetheless had to divert resources for preparing for an auction to commence in february. By legislation Many Congress would repeal this and address sc 981 fee diversion and i hope h legislation passes as soon as possible. Chairman kennedy, Ranking Member coons, members of the subcommittee thank you once again for giving me this opportunity to testify. I look forward to answering your questions in the time to come. Et i thanks, mr. Chairman. Ill start. Ive got a few questions. My understanding is that your agreement with the foreign Satellite Companies is to provide 3 to 5 billion to relocate within the cband and 9. 7 billion well call it 10 billion to cooperate, ton move quicker. And you have suggested that that will save 2 to 4 years. Whats your basis for saying that . Thank you for the question, chairman. So without the accelerated relocation payments the deadline for moving into the upper portion of the cband and say relinquishing the its baseda on the assessment of staff, thai is the soonest that we could ise require those satellite operators wer partd portio i understand assessment of staff but what are they basing that on . Your agreement with the e compan Satellite Companies . The 2025 deadline youre asking about . No, you say by spending 10 billion were going to speed things up by two to four years and i dont understand why. Right. So theres certain steps the satellite operators would have to take in order to clear that spectrum quickly while improving the Important Service theyre providing. Theyve got to do that anyway. Im saying you say, okay, were giving them 5 billion to relocate, were paying the moving expenses. Were giving them 10 billion to relocate faster and its going to save us 2 to 4 years. Why . You have the Statutory Authority which congress has given you to tell them to move now. So, mr. Chairman, the accelerated relocation payments better align the satellite incentives with those that want the spectrum sooner so this allows them to move quicker. I ui huoi huoi huoi huoi hu6 would find that persuasive as well, but the fcc has taken the position we have to give this 10 billion because if we dont its going to prolong this 2 to 4 years and i dont understand why when ive read the statutes. They say very clearly that the fcc has the authority and the Public Interest to renegotiate any agreement it has. Im not sure that the Satellite Companies have a license, but im not sure what they have. They have a privilege, i think. But why do we have to give them 10 billion . Because mr. Chairman, ultimately those relocation payments put us all so o speak on same page. We want to get the spectrum out there for 5g. I know we do, mr. Chairman, but you said repeatedly ive giving them 10 billion of taxpayer money so theyll move faster and its going to save us two to four years. I dont understand why. I mean, one of the companies has already gone into bankruptcy. They say theyre going to use that to leverage you for more money. Senator, i cant speak for ha company but i will say ha company and others, all the Eligible Companies opted into the payments, which means were on track to get more 5g services quicker. Explain to me again. How do you know its accelera accelerating the payments . Or the accelerating the move . Its accelerating the move because now we have given the satellite operators obviously the funding they would need in order to clear that spectrum quicker no, thats separate. Youre giving them 5 billion for relocation expenses. 10 billion is extra. Correct. And that gives them a very strong incentive to meet that december 2021 deadline. Otherwise, that deadline could go on longer. It could take a longer period of time. Why . You have to authority to tell them to move . Well, smart smart, as we detailed, that particular payment framework gives them a much stronger incentive to move further. I know if gives them incentive. You just spent 10 billion of taxpayer money. I would have an incentive, too. But it seems to me if you have the unconditional authority to tell them to move anyway you dont have a basis for your claim that were saving two to four years here. The other point, mr. Chairman, if i might obviously clearing that two to four years earlier means the Wireless Companies will be more eager to bid at the auction. If youre bidding this year on something that may become free by december 205. Do you not have the authority, a. G. , to tell them to be out within two years . Ill have to check with the general counsel, but my understanding is that youre a good lawyer. You know you have that authority. Ill come back. Ive got more. Thaunk you, mr. Chairman. Do you have a good idea of how much money could be returned to the treasury after this particular auction and potentially incentive payments . How much might go to the treasury and am i right that all of those proceeds must go to the treasury. None can be used to address our underserved communities. The last question is yes. We are required to deposit auction proceeds into the treasury. As to the amount of those proceeds thats difficult to say. Theres been speculation this midband spectrum is so highly prized it could yield tens of billions in revenue. That could leave tens of billions of dollars for the treasury for the important purposes congress may see fit to spend it on. I think there are many worthy causes that could deserve Congress Attention in a bill. Would you or the commissioner support legislation that would direct legislation proceeds to addressing our unmet needs . Ive been on the record for over four years new saying i do support Congress Giving fcc the authority such as broadband, telehealth, closing some of those Digital Divide problems weve encountered. Have the foreign Satellite Companies agreed to waive their rights to take further legal action asserting legal right tuesday the spectrum . Theyve made the election to accept the relocation payments. The hitigation was not one of the conditions, but to my understanding almost all of the companies have not filed anything in the court of appeals. Because to me that was maybe i missed something here, that was the critical issue is were going to pay you billions of dollars, youre not going to sue us and youre going to move. Right. Because the only limitation on your Legal Authority to force them to move is their legal capacity to challenge it in court. Right. Certainly the small satellite operators which did not get any accelerated relocation payments from the fcc they filed a petition for review, but they were going to file no matter what. Our goal from the beginning was to align those satellite operator incentives with