For lacking authority when the fcc agreed with the company. If you want to proceed under section 706 as your main legal theory, thats fine. You shouldnt water down the open internet rules to fit section 706. Instead get the substance right and invoke title ii as basis of independent authority. Fcc lost two rulings in court over the open internet. You dont have to choose between weak rules and weak legal case. You can issue strong rules and have a strong legal case if you use a belts and suspenders approach to the next rule making. I look forward to exploring this issue with you further in the question period. In the meantime, i yield the balance of my time to my friend and colleague. Thank you very much for yielding me time. Welcome, chairman wheeler. The fcc has a lot on its plate. Commission is considering rules on the broadcast incentive option, aws 3 option, usf and eray and two very significant mergers. Im confident the fcc will be able to demonstrate it can walk and chew gum at the same time. This subcommittee should also do its part. For one, i join a calling for the chairman to hold oversight hearings on the two proposed mergers between comcast and time warner and on at t and directv. Both are some of the largest mergers in our nations telecommunications history. Americans including many in my district of sacramento are seeing the trends towards consolidation, content and pairing deals and how they hear phrases like paid privatization and wondering what is going on. What does all this mean for them for competition and for the economy . It has been encouraging that so Many Americans are speaking up in support of protecting an open internet. I was one who thought the fcc should have taken more time to deliberate in what neutrality rules the commission should propose. We are where we are. The proposal improved over the last few weeks. It is still far from perfect. I support a ban on paid privatization deals. We cant afford a twotiered internet system. I look forward to hearing from you today and yield back the balance of my time. Gentle lady yields back the balance of her time. You heard from us or a few of us up here, mr. Chairman. Now we are delighted to have you here and look forward to your Opening Statement and comments. Thank you again for the work youre doing. Go ahead. Thank you, mr. Chairman and members of the committee. As you pointed out, its been about six months since we last sat down. I what i wanted to do was highlight some of the things that we have done in that period and then engage in a dialogue with you with whatever topics would you like to address. As has been evidenced by a lot of these comments up here, one of the principle responsibilities of the commission is dealing with the spectrum crunch. We have taken a significant step forward in terms of getting more spectrum out to the market. We had the hblock option which raised 1. 5 billion for ten megahertz of spectrum. We have opened a new hundred megahertz swath in the five gigahertz band which is already being referred to as gigabit wifi because of the incredible through put it enables. We have begun a proceeding on spectrum are sharing in 3. 5 gigahertz. We announced yesterday that in accord with the mandate of this committee and congress to auction off b 2 b west 3 section, we will begin the auction november 13th, and we will finish as per your mandate february 22nd, 2015. We have also, as some of the committee noted, established a new set of mobile Spectrum Holding rules, which have been praised by everybody from Public Interest groups to small operators to large operators as was commented by mr. Waxman hitting the ball out of the park. And we have begun the incentive auction process. You mandated us as you said with a nontrivial task, and we have taken the first important steps to that. On the question of universal service and whats going on there, we have fulfilled the pledge that i made to this Committee Last time we were together to eliminate the infamo infamous quantile analysis and seeking comments on what its replacement should be. We funded the connect america fund to provide connectivity to 5 million more americans who do not have access to broadband today. Thats about 1 3 of the total and significant bite out of that we are seeking input through put standards, as technology increases and bandwidth increases, do we need to think about higher bandwidth supported by the connect america fund . How do we best deal with the mobile component of broadband delivery in connect america . And how best to support broadband for rate of return carriers. Those are proceedings under way. We made significant strides in the area of Public Safety. We took a good chunk out of the first net 7. 5 billion with the hband auction. Expect obviously that the next auction will do more. I wouldnt be surprised if we show up at the incentive auction having met the requirement or at least taken a huge bite out of the requirement for funding first net. We had rule making on text 911. Phones arent used just for talking any more but texting. And so if you want to text to an Emergency Service provider, we had a rule making on that. The major carriers stepped up and literally in the last couple of days, they all met their goals for implementation on that, which is a terrific step forward. We also initiated a further notice on location accuracy because as wireless usage increases, and particularly as it replace s wire line connections inside, and as gps usage has increased, theres been a fascinating reality that location accuracy is actually declined. We began the 24 review on media issues with an expedited date. We closed the loophole exploited to get around the ownership rules using joint services agreement. We brought competition back to the retransmission consent negotiations. We continue to impress on the reform issues we believe to be important. The task force came back with 154 recommendations. About 3 4 of those are now well along their way to being in process. They break into two parts. There are proceedal issues and how do you make the agency more efficient. Last week as many discussed, we op opened you rule making an preserving and protecting the open internet. Its important to recognize there are no protections for open internet in place today. The january Court Decision affirmed the commissions authority under section 706 to deal with the open internet and identified what i call a road map for house to achieve that. And what i have proposed is a method that follows that road map. I understand there is a great debate on this issue. I heard the debate here this morning. Between those who say there is no need and those who say it ought to be a regulated utility. What we have tried to do is to follow the courts direction road map, the blueprint, and come up with a proposal that stops blocking, that prohibits anything that degrades a consumers access including prioritization. That asks a broader question about prioritization as to whether it should be banned outright and if so, how . Then engages in the discussion we heard already this morning about title ii versus 706 and collecting a broad scope of information. There is not a fast internet and slow internet. There is not special Services Internet and none. There is one internet. When the consumer buys access to the internet they are buying access to the full internet. Thats what our rules attempt to protect. This has become a debate among legal approaches about legal approaches. Its a healthy debate. It is a debate that furthers multiple requests. We ought to explore the powers that are granted in the 96 act, specifically section 706, keep asking how title ii fits in, but develop a regulatory policy that looks forward not backward because what we need is a regulatory plan for the 21st century. I look forward to discussing that with you, mr. Chairman and members of the committee. Mr. Wheeler, chairman, thank you for being here. We appreciate your work and your willingness to come and spend some time with us. And respond to our questions. I want to pick up on middle class tax relief act which is designed to create a forum where broadcasters could volunteer their spectrum up for auction. For mobile broadband use. Never been done quite like proposed. We all knew that going in, but it seemed like a good balance. Critical term in all of this was broadcasters would volunteer to put their spectrum up. They wouldnt be forced into it. That was the agreement. Yet many of the actions that weve seen coming out of the commission would lead some to believe that the fcc might be bullying broadcasters into giving up spectrum without providing hard data and clear models so that the broadcasters can thoroughly and thoughtfully deliberate and choose to participate or not in this auction. For example, the joint Sales Agreement that are now outlawed. These agreements offer broadcasters viable Business Model in small markets would otherwise suffer from lack of service. Youre considering increasing the attribution value of uaf station so more broadcasters could end up with violation of the national cap under the broadcast ownership rule. Fcc failed to process broadcasters petition for allocation changes from vhf to uaf even though petition were filed prior to the middle class tax relief act. Finally, seek to use a a modifies version will likely result in reduced coverage from broadcasters that choose to stay in the business making the business itself less viable. The very people you are trying to incent to put spectrum up to be available for auction, i think, are concerned about where the commission is headed in a number of areas. Can you explain how these actions will encourage broadcasters to participate in this auction . Thank you, mr. Chairman. I think the goal here that we have been trying to follow is not to discourage or encourage, but to follow through with our responsibili responsibilities. That means enforcing and updating our rules. Do you think any of these things i just cited encourage broadcasters to participate more . If you dont have broadcasters showing up at spectrum we have an important issue, an important and historic role. This is an incentive auction. Im aware of that. What we have tried to do in the mobile Spectrum Holdings rule, for instance, is to encourage broadcasters, encourage, sorry, wireless carriers to buy, which creates the incentive. The interesting thing there was a report by one of the wall street analysts last week who said we expect the greatest risk to this auction, broadcasters not showing up, just dropped. Because the fact that at t suggested that theyre ready to bid between 9 and 18 billion for 20 to 40 megahertz, this analyst said should send p positive signals to broadcasters. Our role is to create this marketplace. And we are not trying to take regulatory action in unrelated areas. But you are taking lots of regulatory actions. It does have an effect on the marketplace. Those two are fact. Quadrennial review not complete, these things are out there. If we dont have these broadcasters coming to the table voluntarily there wont be spectrum available. This one i refer to as mr. Dingell to see if i can get just sort of yes or nos here. Will you commit the fcc will not Score Television stations based on their enterprise value . On their enterprise value. That is not our intention, sir. No. That is a yes, actually, you will commit you will not score. Will you commit the fcc is that correct . Yes. Youll commit the fcc will ensure broadcasters cost to reallocate are covered by the 1. 75 billion Relocation Fund . We believe that fund will be adequate. That is what Congress Told us to spend, period. Completing frequency coordination between canada and mexico before the auction . I think the issue there is what is the term complete . On the dtv transition it never came down to signing on paper we understood where each other were. I am very confident we will be at that kind of a point. That is critical. Will you commit to revoking only those lowpowered tv and translator licenses that are necessary to complete the auction . Yes. Thank you. I think im out of time. With that i would now yield to the gentle lady from california. Thank you, mr. Chairman. A lot of things to discuss, but i want to bore down on or bore into some of the particulars on your recent proposal relative to the internet. On Net Neutrality. Ive argued, many advocates for Net Neutrality have argued that paid prioritization represents a fundamental departure from the internet as we know it. Just restating what is obvious, but i think that when you have hundreds of thousands of people communicating from across the country to you on it that it is important to raise. As a policy, not as a legal question, do you think that paid prioritization should be blocked outright . So i have said, congresswoman, that i dont believe there ought to be haves and have nots. No, just answer my question. Tell me. Do you think it should be blocked outright . We have asked that question in the rule making. And what i have said is that i believe that under section 706, anything anticompetitive or anticonsumer is competitively unreasonable and therefore, can and should be blocked. That becomes the trigger for how you deal with paid prioritization. Yeah. Now what happens the question you per se asked, we asked how and when. What happens if the fcc determines if there is no outright, no way to outright, create an outride band in these paid agreements under 706 . Where does that believe you, where does that leave the country . So when the court gave us our instructions, they talked about what they call the Virtuous Cycle. And that is that content drives the need for conduit which creates the opportunity for content. And that this cycle is what is our responsibility to protect. And thats what 706 authorizes us to protect. So what my proposal is, is that we take them up on that and we say if there is something that interferes with that Virtuous Cycle, which i believe paid prioritization does, that then we can move against it. All right. Lets move over to title ii. Title ii is described, it depends on who is describing it. Its either a scourge. Its been compared to the Early Railroad regulations in our country to being the flip side, you know, the savior title. I talked about in my Opening Statement about one of the impromoteurs of the internet has been consistent innovation. While there are those that and i understand why people would move to title ii because they want the internet protected. These values are, theyre worth protecting, but i also believe that there is room for, in title ii, for heavyhanded regulation. I dont think that let me put it this way. I think we need a light but strengthful legal touch in this because the values are so essential. People across the country and in the world im hearing from people in different parts of the world, are calling for these protections. How would you envision, how would you handle constraint under title ii . In terms of being the chief regulator . Have you given thought to this . Yes, maam. As you know as some people say, share it with me. There is nothing in title ii that prohibits paid prioritization. We have all kinds. You worry me bringing that up first. I think the root question is how do you forebear from that. Okay . And so it is possible to go through and say yes, we will not do this, will not do this. In the wireless context, interestingly enough, congress created that wireless as a common carrier but said this doesnt apply, this doesnt apply and this doesnt apply. We can do that as a commission, as well. It has been proposed that thats an approach to take. There are also those who throw up their hands and in great concern over that say, well, this commission may do this, but what about the next commission . And you cant bind a future commissioned by making those kinds of determination. What we have done in this nprm is ask the specific question here is section 706, title ii, lets compare them and contrast them with each other and tell us what the pluses and minuses and the best ways to get through this are. I think that leads us to the kind of answer youre asking for today. Gentle ladys time expired. Gentle lady from tennessee, ms. Blackburn, vice chair of the full committee for her questions. Thank you, mr. Chairman. Mr. Wheeler, thank you for taking the time to come and be with us. Youve got a feisty term going over there at the fcc. In tennessee we would say youre kicking up a little bust. Its causing concern. Many of our content creators have a tremendous amount of concern about your approach. Many of our Health Care Innovators who are looking at absent telemedica concepts are also expressing concern. I think that probably your actions have inserted a good bit of uncertainty into the Innovation Sector that is looking how we best utilize all things internet to quality of life and access for Economic Development for health care, for innovation. Ive got just a couple of simple questions for you. First of all on cost benefit analysis. I thank you last night your team sent a letter over to us on that question. But what concerned me was in the letter you say that this is just a tool. Cost benefit analysis is just one of those tools that would go into your decision and your nprm does not include an initial cost benefit analysis. Your predecessor mr. Janikowski in this committee, came before us and assured us he was going to use this. He said i brought particular focus to this process, including by directing the early involvement of our chief economists in the analytical process of rule making and by having fcc staff consult with the staff of the office of information and Regulatory Affairs on best practices in conducting cost benefit analysis. I think it is an incredibly important component of this to look at what the cost of Net Neutrality rules would be to the consumer and also industry. I want to know from you, are you going to give as commitment right now that you will conduct a thorough and extensive cost benefit analysis of the actual cost to the consumer and to industry on these rules . Thank you, ms. Blackburn. I agree cost benefit analysis are crucial to Decision Making. In this rule making, we specifically ask what are the costs of one approach or another and wor the b