For Telephone Companies, a box for longdistance, cable, satellite. To view awas hewe had eliminate the lines of demarcation and promote competition, believing that with competition there would be more investment, more consumer choice, more innovation and fortunately, i think the result has proven us correct that thats exactly what is happened. Now we are in a situation, not t later, thatrs there has to be a massive overhaul. All the new technology and modes of service. , you have boucher worked on telecommunications for a long time as a member of congress. Did congress understand what awawas going on with the Telecommunications Act or was it limited to a few members . Guest as is often the case, the committees that book us on subject matters took the lead. Jack was chairman of our subcommittee. Other members of her subcommittee have been focused on telecommunications for many years. And in some cases decades. We were certainly well prepared for this reform. There was a larger interest. Other members of the energy and Commerce Committee who were not on the subcommittee. Other members of the house and senate who were focused on the need for reform. What was unique at that point was that we had a large, interested Public Community recognizing the fundamental changes have taken place in technology. Fundamental changes had taken place in the marketplace. And the laws that were written for an earlier era were actually impeding progress, impeding investment, impeding innovation, prohibiting the kinds of competition that we thought the consumerrve interest. The barriers in that law were taken down. That was the fundamental achievement of the 1996 act. Telephone companies could offer Cable Tv Service. Cable companies and others were given the opportunity to offer local Telephone Service. So that market for the first time became competitive. Once the local telephone open,ge had proven to be the local phone companies were given the right to offer nationwide Long Distance. And they were also given the right to manufacture Telecommunications Equipment. So markets that had been segregated, markets that were largely anopheles prior to 1996 monopolies prior to 1996 remake competitive. Today we stand on the cusp of another reform because we also have fundamentally different technologies today that have outstripped the Regulatory Environment and created the need for the next comprehensive rewrite of the Telecommunications Act. , so much ofields the 1996 act was about longdistance and local Telephone Companies. Two things we do not think about today was the internet or wireless addressed . Guest we did not, in my opinion. I offer you the best example. As the chairman of the subcommittee, i wanted to be with bill gates and try to get a vision of what he thought the future would be. And i cannot get him and his colleagues to come to washington. I actually had to go to seattle to meet with them. Act,f you look at the 1996 there is one small provision that deals with the internet. And so there is a real need to come back and look at where the whatfalls short, and needs to be done. I will encourage my colleagues when they do this to do what we did not do. As open to make the act as we possibly could so that it could you ball with technology and everything we thought was going to happen in the future. I was very disappointed with what the federal Communications Commission did subsequent to the passage of the act. Much of the intent was lost. Beencouragement is going to that those that do the rewrite be as prescriptive as they can so there is a small chance that the federal Communication Commission will add their own intent. Host what is an example of the intense they lost . Guest we came up with a checklist of what the Telephone Companies had to do to be able to enter Long Distance and open the same day to longdistance companies to offer local Telephone Service. In my opinion, that interpretation what far too long. I think it went outside of what was originally intended. Toagain, when it comes writing the bill this time, i think legislators need to be as prescriptive as possible homage to direct to the federal Communications Commission and anyone else who has to review the act, the Justice Department, so it is narrow so that we preserve what lawmakers intended when they passed the bill. Host because congress has not enacted another comprehensive Telecommunications Act in the last 18 years, hasnt fallen to the fcc to take over has it fallen to the fcc to take over regulation . Guest to a large extent the answer is yes because today the ball is moving into the law directions. Two it is going to the internet protocol. Written we96 act was largely focused on Telephone Service, whether it was local or longdistance eerie to some extent we focused on Cable Tv Service and we wanted to take the steps to make that market competitive, which we did. Buyt primary focus was pots. Plain old Telephone Service. Today the landscape is fundamentally different. Has managed as well as a can without clear direction from congress about how the transition from the era Telephone Service to the time when everything was delivered over the internet should take place. Has done a the fcc good job. Let me cite one example. Chairman tom wheeler chaired a task force before he was chairman. It is their Technical Advisory Task force. In that mode, he produced a report that recommended that by the end of this decade,the o ld circuitswitched Telephone Network sunset. That Network Today is wearing out. It is so old and people have moved on beyond it to such a great extent that the Telecommunications Equipment arefacturers in many cases not even making Replacement Parts for that old network. And the result is that the cost of maintaining it are just soaring. Law, Telephone Companies must maintain the old network as if it was the Core Communications medium used by everyone. Onlyn point of fact, it is used exclusively by five percent of the public and it is used by another 29 in combination with a wireless service. So in total, about 33 of the public is using that old network. And 2 3 have abandoned it altogether. But under current law, it has to be maintained if it did serve. And because of maintaining it the costs are draining invest from the internetbased services and the broadband architectures that consumers have indicated they prefer. And where they can get dramatically more expanded and more functional services and do so in a way that modernizes their communications accessing capabilities. They can communicate wirelessly. The investment needs to be focused on that broadband future and the commission and saying it is time to sunset the circuitswitched network. Its forecasting that clear need and putting in place a thoughtful process based on demonstration projects and some selected markets across the country. To find out what happened, what goes wrong when people are rapidly moved from the old eircuitswitched network to mor modern broadband networks. In advance of a national transition, prior to the end of this decade, Solutions Based upon those perceived problems can be put in place. Has the fcc undertaken regulation . Didink because the 1996 act not focus on broadband or internet protocol, the fcc has been left to its own devices in that area. In my judgment, it has done a good job. I think chairman wheeler and his colleagues are on the right track. Up demonstration projects, finding out what happens when you transition people to broadband and making sure that core consumer values are protected as that process goes forward. And that is a very substantial step, which i think the fcc has handled quite well. Caller host host should there be a reclassification of Broadband Services . Guest that is a good question. I want to get back to what rick said. Tom wheeler is doing an excellent job. And certainly his background here in washington gives him a very unique position in which ot fashion the fcc and make decisions. But i still believe that when withlators come up comprehensive reform, they need to be as direct and as plain as possible so that legislative intent is preserved. That is going to be my encouragement to them. Host what do you think you got wrong with the 1996 act . Guest i get asked that question, and i do not want to be repetitive but i come back and tell people i think we should have been much more prescriptive here and we made a conscious decision to leave latitude in the legislative language so that it would eve all with technology. Evolve. I think that was a mistake. I would encourage people not to do that again. Going back to what we did, we had a clear clut path clear cut path that we announced in 1995 that we were going to do hearings within a certain period that we would have our markups and be out of committee by may. It off the floor be off the f july and be a conference with the senate in septemberoctober, which we were. We felt like we had to lead the process and represent our team as bipartisan effort. When you go back and look at the 1996 act, there is very little opposition in the subcommittee, little opposition in the full committee, very little opposition on the floor. We actually had a very Good Conference here i think much of ed, peoples rick allud had worked on this for years. My counterpart was ed markey. Eddie and i are philosophically different, but we came together thinking it was in the best interests of the American People to come up with a new policy framework. Policy framework predicated on competition. H this little government as little Government Intervention as possible. I think that is what is needed again today. Fcc some former commissioners have said in testimony to congress that the act does not need to be rewritten. Perhaps some piecemeal legislation. That includes reed hunt. Guest i think fundamental things have to be done, and they have to be done legislatively. What defines a rewrite is in the eye of the observer, but there are fundamental things that have to be addressed. For example, the current regulatory structure at the fcc is a blowback to an earlier time when cable Companies Offer cable service, phone Companies Offered service, you had a wireless internet but it was fairly new. There is nothing that speaks specifically to the internet which was in an early stage of commercial development at the time he wrote the 1996 act. Because you have different bureaus writing different rules for various companies, you can get disparate regulation. You have to bear in mind that these companies are competing headtohead, offering the same products. They are offering voice, data an d video, and they are doing so ht a very hard foug competition. And they should be regulated the same way. Structurening the fcc in order to meet the realities of the marketplace, where you no longer have silos, but you have serious crossplatform competition is fundamental to making sure that the regulation enjoy parity and that companies are not giving an advantage or disadvantage because of the Regulatory Environment. That. Nly congress can do the fcc cannot realign the structure that is established by statute. So you can start with that. We also have a spectrum crunch today. Apidly the spectrum that is available is being outstripped by demand for local services. And carriers are experiencing order of magnitude increases inr their short time frames the demand for mobile data. We have got to find creative ways to get more spectrum allocated from government holders who in many instances have in excess of spectrum to of into the hands commercial carriers. The current way we do that is not working. It is slow. The allocation process takes forever. Agency is toldan to vacate us back to them, it can take years for them to move away from it and make that available for commercial auction. I think Congress Needs to be innovative in a way it addresses this. Maybe some incentives should be provided to agencies so that spectrum is vacated more rapidly, made available for commercial carriers. Some have even suggested that we foroa base closing approach this. After the cold war when it was clear we had to Close Military bases, and it was hard to do that because members of congress would fight vociferously in order to keep the base open in their district and have their colic support them. It was very difficult and have their colleagues support them. So Congress Passed a statute that created a commission, the base closing commission. Periodically, that commission bes which bases that can close. Anna recommends a list to congress. Then that list is put to an up or down vote with no amendments. And every time netlist has been presented to the Congress Every time that list has been presented to congress, it has passed. And maybe we need to have mtia toan independent commission evaluate the spectrum that is in the hands of Government Agencies and see whats excess, see what could be auctioned. And then put that to an up or down vote, that list as produced by the agency or independent body of some sort. It certainly worked for base closing. Maybe it will work for this. What im suggesting is congress be creative in the way it addresses the need to get more spectrum into the hands of the commercial carriers. And majority of the spectrum that can be made available for that relatively quickly is in the hands of government. Do you see atcher some point wireless and internet reclassified as an essential Communication Services rather than Information Services . Gost i am not going to there. I do not think it is necessary in order to do that. I agree with jack that Congress Needs to be very precise in directing the fcc with regard to what congressional intent is and what the role of the fcc in in that is going to be. I think jack is right. Act, wewrote the 1996 were too generous in terms of trusting me fcc. We have learned our lesson. I think this congress can apply that lesson to the next telecom reform. As i think the fcc, recently with its power recently having been confirmed by the d. C. Court of appeals in the Net Neutrality decision, not to be precisely what was done in that first order, but to do many things that can assure the fcc functions effectively as an overseer of internet communicationsbased services. Its not going to be necessary to reclassified it. That is something that would only be done as a last resort. And the failure of other authorities. I think the d c circuit has made it very clear that the fcc has the authority to be an effective regular. Guest i think there is one issue that is really glaring. When you talk about comprehensive reform that needs to be addressed. That is the issue of must carry retransmission consent. Broadcast or Cable Company or Satellite Companies or Telephone Companies in delivering different types of programming, i was the republican sponsor for the must carry retransmission consent. To me, that is another example of something that was wellintentioned that is totally out of whack. Today, you have a situation 12 blackouts in 2010. In 2012, there were 91 blackouts. This year, one company has jumped its retransmission 17 ,nt fees upwards of which gets passed onto the consumer. I think we have to go back and look at what was originally intended. As the author, the original intent was tos preserve localism and make sure the localism of the local broadcaster, the local news, the local weather and sports was on that basic tier. We mandated that. The world is different. Now you have a different a number of competitive names. I think we need to create again an environment of competition, an environment of transparency, an environment of openness. I think having a requirement that a broadcaster is automatically on the basic tier is not right. I think the Cable Companies should have that right to enter into negotiations with the broadcaster. Andif something goes awry, there cannot be a good negotiation, unfortunately many of these negotiations occur before the Academy Awards or before the super bowl, before dances with the stars. I think a Cable Companies should have the right to go outside of that local market and pull in another signal if they can compete and find in a negotiated sense the programming they need for their local consumer. I think that would create some balance. I think what we have is outdated legislation, particularly in that area that needs to be addressed. It is interesting. Literally within weeks, the aerial decision is going to be decided. I am not going to predict what is going to happen, but i think there is a very strong likelihood that that decision is going to go against the broadcasters. And so it is going to be interesting to see how they immediately come back to something hasay, got to happen. S