Transcripts For CSPAN2 Key Capitol Hill Hearings 20140522

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 benefits, one or another, so that we can electricity that information and have that kind of analysis. I agree with the importance of cross benefit analysis. Let me ask you this also. The commissions funding is regulated by the fcc, but we have some that are impacted by this but are not regulated in paying those fees. In the Net Neutrality context, for example, Companies Like google and netflix want the fcc to act on their behalf and petition or visit the agency, if you will, in support of those efforts, but they free ride because they are not paying the fees bearing that part of the regulatory burden. Since they seem so ready and willing to rely on regulation to help them with their Business Models, how would you recommend that those entities share in the cost, pay their part of the cost funding the agency . With all respect, thats a decision this committee and congress can make setting the rules. Im asking what your relation would be. They lobby you and are pushing the Net Neutrality rules. While they may like what you are saying because they want you to step in, we have a lot of people out there paying the fees that are not in favor of what you are doing and we have a lot of innovators who are not in favor of what you are doing. And your door has the name chairman on it. What is your perspective . So our effort in all of this is to represent the American People, not company a or company b. We have been told by the congress from whom we can collect regulatory fees, and we do, if there is a decision that we should collect regulatory fees from somebody else, thats something we obviously will take. If there is a decision that we should expand Regulatory Authority over other entities, that is obviously something we should do. But that is a decision that is out of our hands. I yield back. Yentl lady yields back. Chair recognizes the gentle lady from california. Thank you, mr. Chairman. Chairman wheeler, i would like to understand given the success of the internet in the absence of prioritization, precisely what types of pay privatization do you believe will speed the declinement and adoption of Broadband Internet access services, given that paid privatization agreements would be used as a barrier of entry to startups and Small Business . What prioritization arrangements specifically will be better for the internet than the no prioritization norm we have today . What we are trying to do in this item is to say that anything that affects that Virtuous Cycle the court talked about and i talked about before is not appropriate. Is unlawful and that would include paid prioritization. The court told us to look at this on a case by case basis. We have asked the question in the rule making as to whether we should look at it generically and say its all out. And we are soliciting comments on that. When i buy Internet Access, i am buying the full pipe. I am buying access to everything thats out there. If somebody comes along and says, oh, no, you cant get this unless you pay more, thats unreasonable. And should be banned if somebody says to a consent provider you cant get on unless you pay more, thats unreasonable and would not be permitted. Okay, well, other than Public Safety, i believe paid prioritization should be banned. I think another concern here is a last mile equivalent we are seeing and hearing. The fact that there is so much uncertainty with paid prioritization is troublesome. If this concept moves forward, we could inadvertently block the next google or amazon from the market without even knowing it. Im concerned your hands may be tied here even if the commission wanted to ban anticompetitive paid prioritization deals, you may not have the authority or tools to do so. Chairman wheeler, if you were to explain to my constituents about the two mergers, content agreement and paid prioritization could be legitimized on a commercial regional standard, what would you tell them not just what it means for them but competition and for economy as a whole . I would tell them i felt paid prioritization was commercially unreasonable and therefore, could be dealt with. And that on the question of peering, that is a separate issue that the commission needs to look at and will be looking at, but i would emphasize that i am a strong supporter of the open internet. I would tell them a story when i was a entrepreneur i was shut out of Cable Systems because they were closed networks. I would come with a new product and couldnt get on. Then when i was a venture capitalist before taking this job, that the companies i was backing had to have access to the internet. Could only succeed if they had access to the internet. So i would say to them that i believe in an open internet. I experience d closed networks and the harm they cause and i want to protect and preserve an open internet. You know, i think this is a very critical time. When i have ordinary people off the street coming to me and asking me about all these things theyve heard because people today really depend on the internet. Ordinary citizens the entrepreneurs concerned about this, who else we know out there, so it is very concerning to all of us that there is a potential that we may have a situation where we wont have an open internet. I would like you to consider some of these mergers. We feel like we are in the wild west of the Digital Economy now. Can you commit to us these large mergers that are before us, they may be different than each other, but can you commit to us here that fcc will carefully scrutinize these deals . With a focus toward public. Without hesitation. Chair recognizes former chair of the full committee mr. Barton for his questions. Thank you, mr. Chairman. I want to echo the last question you asked chairman wheeler about lowpower television. You and i are working on a bill to give them some protection. We understand under current law they dont have standing when they repackage. We hope to give them some at least priority or some help if and when we do repackaging. I hear my friends repeatedly talk about the open internet and whether you should try to regulate it under section 706 or title ii. I think youre asking a false question. The internet is open. The question is what does the fcc do in terms of monitoring to make sure it stays open . The analogy im going to use is not perfect but i think is instructive and educational. The airways we fly back and forth from washington to our districts are open. They are regulated and monitored by the faa. If i want to go from washington reagan to dfw, say its 350 one way, but when i show up with my ticket, i get one seat on that plane. I dont get to take 100 of my friends and put them on the plane with me because i happen to buy the ticket first and show up first. So its obvious it would be great for 350 if i could fill the plane. We allow the airlines to price by volume. Maybe if you want to buy the whole plane they do give you a discount and its only 250, but we dont let first person to buy the ticket use the whole plane for 350. For all the bold talk about open access what people really are trying to do is, i want to pay a minimum price and get all this broadband and download everything from netflix and i dont want to pay if i download every movie they went. Netflix pays a basic price and can service 10 million instead of whatever it would be. The broadband providers who spent billions and billions of dollars and have networked this country and provided access through the competitive market principles are not going to somehow all of a sudden decide as long as the fcc, under your chairmanship, make sure that it stays a competitive model. They are going to continue to provide an internet some Pricing System that allocates that it is a limited spectrum. I see no reason to try to shoe horn an approach. Explain why my approach, which is what weve been doing, which works, is the wrong approach . Let me respond to both questions. First, as i said to the chairman, we do not want to move those who dont have to be moved as a part of it. We also believe there is opportunities to go to digital and the new efficiencies that brings just like it did in the class a stations. Thirdly, we are opening a new rule making to specifically deal with that. We agree with the importance of low power and translators. To the second part of your question, let me take the chairmans hat off and put my consumer hat on for a second. Two weekends ago, i called my isp and increased my capacity because i wanted faster through put. They said for another 10 a month, well give you another what turned out to be another 20 mig. That is a marketplace transaction. That is something accepted now. That is not something that is part of the open internet rules. What the open internet rules are trying to say is that when i guy that capacity, i bought that ride to every place on the internet. That somebody cant turn it around and say, oh, but you cant get that. Or somebody cant say, well, you can deliver that to tom, but youve got to pay me an extra fee. So the concept of the open internet is that i have bought this broad partway. And i have the right to use it unfettered on an open basis. And thats what were trying to deliver in this rule making. Im not trying my time expired. Im not trying to oppose that, but if you want youre looking at it from a consumer standpoint and i accept that. That everybody should have access, but if you are a provider of content, you should be willing to pay more based on the number of items you are going to put at any given time on the open internet so that everybody has access to it. If you have a con strained pipeline, somebody has to make a decision how you put things into the pipeline, whether its the airplane or whether its the air waves. With that, mr. Chairman, i yield back. Chair now recognizes the former chairman on the democratic side mr. Waxman. Thank you. Chairman wheeler, i commended your leadership earlier in my Opening Statement about the spectrum auction. I want to ask questions about a different subject. Thats Net Neutrality. Yes, sir. I commend you for tackling this issue and for seeking comment on a broad range of issues, but i have serious concerns about some proposals that have been discussed. You said there would be presumption against broadband providers like verizon, at t and comcast entering into arrangements that give exclusive advantages to their affiliates, is that right . Yes, sir. What i dont understand is why this presumption against exclusive arrangements would be limited to affiliates. Suppose netflix entered into exclusive arrangement with at t or comcast for faster speeds for its videos that block competitors like amazon prime from getting similar service, i think that would be a serious threat to competition and an open internet, yet your proposal does not create a presumption against these exclusive arrangements. Why would you allow any exclusive arrangement that guarantees some content providers faster speeds than competitors can access . Thank you, mr. Waxman. This goes to, back to this Virtuous Cycle that the court talked about. It was interesting yesterday in the wall street journal there was an article that interviewed a bunch of infrastructure manufacturers about the impact in neutrality. They flat out said that if you offer fast lanes for some, you are going to degrade service for others. I think thats at the heart of what we are talking about here. That would be commercially unreasonable under our proposal. Okay. The problem with exclusive arrangements is that they would let some companies block their competition from similar advantages in markets where there is no or only limited choices of broadband providers that would stifle openness and competition. I judge just want to say to you im opposed to any form of a paid prioritization. Paid prioritization divides the internet into the haves and havenots and will entrench the Big Companies at the expense of startups. My understanding is that you asked comment on a multifactor test for determining when paid prioritization is permissible and when it would be prohibited. My concern is that this will create a lot of ambiguity and a lot of litigation. I believe bright lines would be much better for the market and for innovation. So im going to ask you to consider a presumption against all paid prioritization as you develop final rules. Will you agree to consider this option . Absolutely. We have asked in the mprn specifically whether and if so how do you accomplish it . So that is a ripe debate that is in the nprm right now, sir. My understanding is that the reason you have proposed a complicated multifactor test is concern about the court ruling. I agree that if you are limited to acting under section 706, your options could be limited. You are not limited to section 706. You could establish a presumption against paid prioritization under title ii. Thats why its important, so important for us, for you to use your title ii authority as backstop authority. You dont have to settle for a week open internet rules if you exercise your full powers. Im glad youre looking at that possibility. Let me close by thanking you for seeking comment on the backstop proposal in that proposal adopted last week. Im committed to working with you to ensure the Commission Adopts strong and open internet protections for consumers and innovators, while encouraging continued investment in the online content and services we all rely on and enjoy today. I think its important that we get the substance right. We tried three times. We meaning you at the fcc, because of the concern that the consumer have full access to what is on the internet and full access to be able to use the internet to its greatest maximum potential. I would hate to see that Net Neutrality in any way be diminished if we have an opportunity under the law as we look at it to make sure we get the substance right. Thank you, mr. Waxman. Gentleman yields back his time. I turn to the distinguished gentleman from ohio mr. Lata. Thank you very much, mr. Chairman. Again, chairman wheeler, thanks very much for being here. Theres been some discussion on title ii. I would like to follow up on some of that questioning. Central premise of title ii regulation always been that the regulation was a substitute for competition. In two parts for the question then. What types of findings has the commission made to justify entertaining the idea of title ii regulation of the internet . And then do you believe the fcc should have to make a specific showing that of a market Failure Forum proposing rate regulation or reporting requirements are the precursor to rate regulation . Again, these are the kinds of questions we have tried assiduously not to decide on but ask about in this rule making. We have to make a decision on exactly those questions at some point in time. But what we want to achieve is a record that gives everybody the opportunity to opine on that so we can be appropriately informed. What is your time line on that then . So weve got 60 days for comments and then 45 days a for reply comments. Okay. So are you saying then that youre not ruling out rate regulation . Im saying we have asked the question about title ii and the full panoply of title ii. What have you been hearing from the community thus far especially when saying you are asking those questions . What have you been hearing out there . Excuse me. Well, we heard very little on the record, thus far. There has been a great outpouring of people speaking to us through the press. People speaking to us through letters and this sort of thing. As i indicated at the outset, there are two diametrically opposed positions. Our job is to find that which is best for consumers and best for encouraging investment in the internet, which itself is best for consumers. Let me go on with this question. While you resolved some of the issues in the 5 gigahertz rule making there are a number of issues outstanding that have potential to open up another 191 megahertz of spectrum for unlicensed use. What is the fccs and your plan for tackling the open issues . In 5 gig . Right. Think about 5 gig in three bytes. The first byte is the lower end of 5 gigahertz. In the middle component of 5 gigahertz, there are lots of National Defense kinds of activities, radar and this sort of thing. The question is how can you work out sharing arrangements there . We are working with those parties. On the upper end is where you have spectrum that has been identified for intelligent traffic, itfs kinds of activities. That is based around an 80211 standard. There are strong feelings about the need to protect that. I believe its possible to Work Together to meet both sets of needs since its based around a common 80211 standard. The 2011 order requires they set minimum prices they can charge consumers if the provider wants to continue receiving the same amount of funds to support the high cost of the business. So as a result, many of our rural consumers that i represent out there see the rate go from 14 to about 20. 46. While the Communications Act requires rural rates to be recently comparable to rates in urban areas as affordable, reasonably comparable does not mean that the rural rate should be the same as the rural rate when they might be able to call only a few thousand people locally while urban can call many times more than that. Should the rate be the same in the rural areas where the average income significantly lower than it might, in fact, not be as affordable . The rate forward continues to be a tern for many Telecommunications Providers in my district and others servicing Rural America. I understand that the fcc agreed to phase in the increase 2 a year and propose that start date or postpone that start date until after 2015, can you explain why the fcc interprets the reasonably comparable rates to mean exactly the same rates between urban and rural areas considering the smaller population of the rural calling areas and the fact that it was what is affordable in the largest urban areas is not what is also affordable to the consumers in the rural . Thank you. Im glad you asked that question. Its an important question. So as you stated, we are supposed to make sure things are reasonably comparable. The reason for that is to make sure that the subsidies that some americans are paying to deliver service to other americans dont end up being subsidies that some americans are paying to reduce the bills of other americans. But to overcome the high cost of getting to them. In some instances, it has been unfortunately the former. There are in 16 states, there are situations where consumers are paying, some consumers are paying 5 a month for Telephone Service because theyre being subsidized by people in your district and other districts. We need to get our arms around that. So what weve done is to say okay. Step one is, goes into effect january 15. Then what we are going to do, and that cant be more than 2, by the way. And then what we are going to do is go back out with another survey that hits the kind of granularity you were talking about in terms of service and including Long Distance and all these kinds of things. So that we have a better understanding of exactly what comparable means and then look at that issue again. Thank you, mr. Chairman. My time has expired. I yield back. Gentleman yields back. Chairman recognizes the chairman emeritus of the Committee Chairman dingell. I thank you for your courtesy and thank you for holding this friend mr. Wheeler back. Fine public servant. Were looking forward to good things of him. At least weeks open, a number of big ticket items. Including a new nprm and draft rules for the upcoming incentive auction of broadcasters spectrum. Concerning the former, i commend you for your efforts to keep the internet open and will be watching the matter closely as it goes forward. Its my hope the commission will work with this committee for any authority it takes to conform especially concerning title two, reclassification. With respect to the incentive option, im interested in what the committee intends to do about treating broadcasters fairly. My questions will require a simple yes or no answer. Yes, sir. Mr. Chairman, id like to begin with a parochial matter. Specifies the commission made to the coordination on the border with mexico and canada reassigned and relocate and reallocate broadcast frequencies. Is that correct . Yes, sir. Chairman wheeler, in the commissions july 2013 response to my letter of inquiry of the reverse option, gary epstein head of the task force stated the following. The language used in section 6403b1 of the action is, quote, identical to that used by the commission in describing its handling of the earlier dtv transition in which the Commission Adopted our proposed allotments for these stations subject to our continuing negotiations with canada notwithstanding the broadcasters request to the contrary. One here could reasonably assume based on the statement that the commission may reassign and reallocate broadcast frequencies pursuant to the act while negotiations with canada and mexico are still ongoing. Is that correct . Yes, sir. Im going to ask you to submit for the record how youre going to assure protection to the broadcasters and the viewers in that process. Yes, sir. Now, mr. Wheeler, does the commission believe concluded negotiations with canada and mexico prior to commencing the reverse Action Action will get broadcasters particularly in Border Regions greater certainties and likely to increase their willingness to participate. Yes or no. Yes, sir. Now, mr. Wheeler, does the commission expect to conclude negotiations with canada and mexico prior to commencing the reverse action next year . Yes or no. The expectation is it is the goal. You may not make it is what youre saying. It is the goal, and as i answered in your previous will you notify this committee as soon as that becomes likely . Yes, sir. Now, in this matter mr. Chairman, id like to state for the record its my understanding based on exchange with counsel on the community and technology, december 1, 2011, markup of the border negotiations are to be completed before the commission reassigns broadcast channels. I hope that chairman wheeler will honor that understanding. I hope, mr. Chairman, you understand i have great apprehensions about that. Because of the impact it could have on the broadcasters and also on my constituents. Mr. Chauirman, this is i share your deep concern about this. Not only because of the very legitimate concern you have about your constituents and other americans Getting Service along the border, but also the effect as allocation goes into the middle of the country. I can assure you this is an incredibly high priority. I can also assure you that our canadian colleagues have been very forthcoming and very helpful. I would like to have this submitted for the record. Now, mr. Chairman, i note that the Commission Proposes to use a method called, quote, scoring to set individual prices for each broadcast station participating in the reverse option. Is that correct . Its one of the things were considering. We have not made the final decision yet. There are others . We are looking at others. Im going ask that you submit in response to correspondence a proper answer on that. Yes, sir. Concerned with scoring as opposed to Competitive Bidding will decrease willingness to participate in the reverse option. Yes or no. No. Do you intend to work in good faith as the commission refine this rules for reverse option in order to see to it their needs are met as the acts specifies to the best of your abilities. Yes or no. Absolutely. I want to quote admiral rick who once observed the devils in the details but so is salvation. I hope youre going to see that the salvation is there and not just that we are going to find ourselves amidst trouble because of carelessness. Not by you, but by some of your over. Enthusiastic and less than competent predecessors. I thank you. I yield back my time. The gentlemans time expired. We now recognize the gentleman. Thank you. Im going to try to get through three quick points if i can. As you know, theres a lot of concerns on this side of the dias. The question for me is how do you build out. We want more, not less. Does a monopoly insent vise more buildout, more pipelines or does a insent vised work weve got a lot of different ways for data to now flow. And we want to encourage that. And you think only i kind of like the idea of incentivizing people who want to use more, making them pay more to incentivize those who want to have more. My position is more pipes, not less. Competitive markets versus controlled markets. So because heres an example of that on may 16th a wire line released seeking on status of dialup internet traffic. Dialup . Thats a dinosaur. Its hardly used. So there is no you want to talk about uncertainty for the state and for the providers when were still in this process more than 15 years after the fcc first discussed the treatment of dialup, were now to this process . Thats just kind of a statement. That doesnt create certainty. Would you agree . Well, what were trying to do is to create an environment that assures consumers and those who rely on the internet that there is openness while at the same point in time encouraging investment. Lets just go back. I get that, but this is dialup. So if were dealing with the dialup, thats a different topic well, it is, but its not. Its the whole debate about certainty. And we actually have a dinosaur application, why are we even so we still have 40 of our consumers on dialup telephone lines. One of the challenges that we have is how do we evolve that into an allip environment which would be an internetlike environment. And one of the things that i have said to this committee is that we believe that this ip transition is a crucial part okay. In one deal in the sweet spot is the Public Service, 911, call for the creation of the do not call registry, and the automatic dialing issue. The commission keeps saying theres not enough money to do this. I would ask you to check into that. I think theres a lot of money in the fcc. And because this automatic dialing freezes up lines and its a Public Safety concern. I hope we would Work Together to try to i would look forward to that. Let me get back. Myself and the Ranking Member are better involved as you have in the early days also. The last thing i want to from Rural America is there seems to be a de facto freeze on this shared service agreement. And this is in the broadcast local. When you represent a third of the state of illinois as i do now, 33 counties, the shared agreements are now helping to provide. Weve got real cases, better local service to the local folks than less. I guess the basic question in my last minute is whats your plan ensuring the fcc action is predictable, consistent, fair, and timely . So thank you. What we have done is to put out a Public Notice on how we look at transfers. And i consider this to be a procedural reform. Because the way it used to be was broadcasters would come together in some kind of a merger situation. And they would come to the commission which was a black box that had constantly changing. What i wanted to do was say, okay. What are the things that we will look at so that everybody has notice and everybody understands and it is not a black box. Thats the process we have now established to be able to make those kinds of decisions. Thank you. I know my time is expired. Id appreciate it if you keep me in mind as you move forward. Yes, sir. Thank you. Chair now recognizes the gentlelady from colorado. Thank you. I want to followup, chairman wheeler, on this open discussion on the nprm. Leading up to the commissions vote last week, there was a Public Exchange amongst isps and others about the impact of paid prioritization on their models. Weve been hearing from a lot of our constituents about this as well. Now, you talked very briefly about a few minutes ago about what the fcc is doing in under the circumstances review process to look at the effect of this on broadband bills. I want you to talk about what you think the proposed internet rules will have on access to new and innovative connection. They each should be encouragement of new and innovative programming because of the fact that it assures that they will be able to reach the consumer unfettered and without having to pay special fees. And what impact do you think that the rules will have on average broad band speeds, network investments, and overall quality of service . Thats a terrific question. Thank you. Im glad you asked that. One of the fascinating things is that 2010 when the open internet rules were first proposed, since then there has been hundreds of millions of dollars of broadband investment made. So the rules dont seem to have a chilling effect. And speeds have been doing this, going up. And this is what the cord was talking about when they talk about this Virtuous Cycle. In the internet ecosystem, everything adds to everything else. So what do you think the new rules, what effect would they have on these issues . You just talked about whats been happening. We believe that the rules that we have designed will continue to encourage investment in broadband, continue to encourage throughput and as a result continue to encourage innovation from providers. And so are you saying also that average broadband speeds will increase . Yes, maam. And overall quality of service will increase . Yes, maam. Okay. One last thing no one has raised yet is the issue of industry consolidation. And this year weve seen two major merger proposals in the telecom industry. Clearly the industry is going through a period of change and some folks think consolidation is the best approach to this. All things being equal, do you think industry consolidation is good or bad for the consumers . So i read the other day that we are probably the in the last decade, the biggest year for telecom mergers. And what were doing is open a record on each of them and we will make that decision based on the record so you dont have an opinion . I would not want to prejudge the record. Oak. And as you know, congress has recognized the importance of the market place by giving the fcc the ability to review. Do you think the conditions the fcc placed on the comcast nbcu merger were effective at protecting the Public Interest . That is a decision that my predecessor made. I know that it had impact. My goal is to look at the record before that we presented before me and my colleagues and make a difference on those. Do you think it promoted the Public Interest . Yes or no. I think there were multiple things in it that promoted the Public Interest. And what other lessons do you take away from the commissions previous attempts to promote the Public Interest by placing conditions on mergers as you go forward . That it is an Important Role that the commission has. Theres a lot of discussion as to why should there be any authority at the fcc to look at. I strongly believe that there is a big difference between the statutory rigidity and the broader Public Interest issues that youve raised that the statute asks the fcc to look at. Chairman, i just ask if you could supplement your testimony with some specific takeaways this has given you. Thanks very much. Gentlelady yields back. The chair now recognizes im sorry the chair recognizes the chairman. I just wanted to clarify one thing, make sure i heard it right. Did you say 40 of americans are still using dialup for Internet Access . No. Im talking about dialup phone service at large. All right. I was going to say its more like 3 . I thank the courtesy. Thank you for clarifying that, sir. Chair now recognizes the gentleman from nebraska. Thank you. Its good to know my 82yearold father is in the 3 . That makes him very elite. Im trying to talk him out of that, but thats a work in progress. We remember those days we were thrilled to get 56 kb, right . Yeah. So switching gears just a little bit, i want to ask about regression analysis progress and i do think you probably captured its deficiencies better than anyone else has. And i appreciate that work. I was glad to see the commissions followup by repealing the qra formula. So congratulations. I appreciate that. Im curious on your thoughts of how it should be replaced and if you could walk me through what factors are going to be used in any Decision Making and timetables in the process. I respect the question, but i cant really answer it right now because were in the process of theres several proposals. Were in the process of looking at what the best components of each other. We do have proceedings underway to say, okay, what is it to replace qra with. So where are we within the process of those . I think were probably heading into something you would see before fall. Do that when we play mcneice state. For the rest of you, that was humor. Now, then let me go to a broadcast question since we dealt with one i thought would take all of five minutes. The spectrum bill that was authorized and passed through the committee was a bipartisan bill. Unfortunately the order that recently removed the fcc was not bipartisan. Some commissioners stated the order treats tv broadcasters that choose not to participate in the option unfairly and that has me concerned. Congress set aside the 1. 75 to reimburse broadcasters to fully recover their expenses. Why did the fcc not adopt a number as its repacking budget to ensure broadcasters would not have to go out of pocket when forced to the fcc to move . Thank you. Congress said a billion, 750 million is the max that, spe ca spent. We think that would be sufficient. There have been broadcasters that expressed a concern that it might not be sufficient. So we said we dont think thats going to happen, but we will put in place a process that will have a structure in place if and when that should happen. Sir, i dont expect that were going to get will. All right. Ill just yield back my time. The gentleman yields back. And the chair now recognizes the gentleman from utah. Thanks, many chairman. Mr. Wheeler, thanks for your testimony. I appreciate your candor and your articulate way you answer questions. Thank you, sir. I just want to commend you on your efforts to open up more spectrum for unlicensed uses. The fcc took an important step last month by opening up the 100 megahertz for unlicensed uses. Im pleased to see in your testimony that the fcc is trying to free up additional unlicensed. Could you provide an update on where things currently stand with resolving the technical issues in the its band used for vehicletovehicle communications and the parts of the band used for military radar . Yes. So as we talk, theres three slices to five gigahertz. The middle as you suggest is d. O. D. Were having ongoing conversations with them. I have been personally involved in those discussions about a wide range of spectrum issues including this. There are strongly held beliefs on both sides, sir. I continue to believe, however, that people of good faith can finance if you sit at the table long enough. In so far as the high band in five gig, yes. Thats Intelligent Transportation wuch offers such great opportunities. Weve seen the google smart car and all this sort of thing. The thing thats really encouraging is thats an 802type of standard. Its not a dissimilar reality, though, where we need to make sure that people are sitting around the table looking for commonalities rather than looking for differences. Its something we ought to do around congress. You have a little experience. Yeah. But thats the goal of what were trying to do here. Do you have a sense of what the do you have a time frame for when this additional spectrum could be freed up. I wish i did. I would be misleading you if i gave you a date right now. I understand. Another issue i want to mention, the goal to bring 100 megabit broadband to every school in the u. S. To the extension this is implemented, what can the commission do to maximize efficiency and get the most bang for the buck . Wow. Thank you. Great question. There are multiple challenges in that. One is that we need to spend our money, the peoples money, on 21st century broadband solutions. Not 20th century like dialup and Long Distance service. Right now about half of the 2 billion thats being spent is spent for old stuff. Today. Today. Second part is that we have to design a system that helps schools and Library Administrators find their way through the maze that is telecom. I mean, we put them in those jobs to educate students, not to be telecom whizzes. So were trying to develop a process that says heres what you ought to be paying. Heres what somebody next door is paying. Heres like situations so they can go in and understand where their bargaining position is. Were going to be talking about having longer contracts. Buying it on a monthly basis is the worst way to buy. Lets talk about several years. Were going to be encouraging constotioia so you can buy in bulk and get better prices. I think there is a myriad of things we could do to get more efficiency. We intend to do that. Does the fcc plan to use the broadband map to find fiber already in place so it can be leveraged towards these goals . Yes. I yield back. Thank you very much. The gentleman yields back the balance of his time and the chair now recognizes the gentleman from missouri. Thank you very much and good afternoon to you. I believe that some of my colleagues on the other side of the aisle would prefer to title to reclassification. And if the commission were to decide to proceed in that direction, im concerned that it might trigger a lot of illfitting regulations that might not make sense in the context of these services. In your opinion, chairman, would the process of going through forbearance to separate, could it be a messy exercise and could it lead to more years of litigation and uncertainty is my real concern, sir. Thank you, congressman. Thats one of the things that gets teed up and we ask about title two versus section 706. And i presume that will be exhaustively discussed in the responses. And thats exactly the kind of questions that were asking. Thank you. One concern has been raised about the proposed neutrality rule making protections that would be afforded companies who use a carrier providing the same service as another carrier. For example, the large carriers are starting to Bundle Services well beyond the internet and television to include Smart Home Services such as temperature control, Home Health Monitoring which of course is important to another subcommittee of this committee, as well as Alarm Services such as monitoring of home intrusions and fires. Video surveillance or personal Emergency Response systems. What protections will the fcc provide to make sure they dont give preference over a Company Using them as a broad based carrier . Im not sure i exactly understand. Your concern is will there be preferences among providers of those services . Yes, chairman. Thats contrary to the concept of an open internet. So you can assure us and through us the American People that will not be the case as these other services are provided moving forward. Let me give you an example personally. I just switched out adt in my Home Security system for another company. And i was able to access both of them over the internet and both of them over my mobile device. And there should be no interference with my ability to move from adt to the other provider. Thank you. Thats the goal of the commission and you will assure us thats how well proceed moving forward. Its open there needs to be open access to all providers. Thank you. I understand youre a proud graduate of ohio state. You bet, sir. Please be gentle with rutgers now that rutgers has entered the big whatever it is, the big 16 or whatever. Its the big 10 that cant count. I defer back to the chairman the balance of my time, a proud representative from ohio. Thank you very much for the gentleman yielding back the balance of his time. Chair now recognizes the gentleman from north carolina. Thank you very much. And thank you to you chairman wheeler for your service and thank you for your testimony today. I especially thank you for your clarity. I told you that the first time that i met you. Whenever i hear you speak, it is unambiguous. At least until the subject of your Home Security comes up. Then you are a little ambiguous on who the new provider is. But thank you so very much. Mr. Chairman, in the Communications Act, Congress Mandated that the commission ensured diverse participation in media and telecom that includes a participation of minority owned. That the mandate is to create Economic Opportunity and competition by disseminating licenses among a wide variety of applican applicants. It seems to me that the response of the commission to judicial criticism of the fccs inaction in this area and the lack of meaningful study and progress as well as the low level of minority in womenowned participation and Media Telecom licensing that the commission it seems to me are s not committed to these goals. If im wrong on this, i ask you correct me. On may 14th, members of the caucus addressed these concerns in a letter to you. I suppose the letter may not have made its way to your desk yet, but ski you that you look at it very carefully when you do. Question. Precisely what do you need beyond the judicial criticism to get the commission to create opportunities for Diverse Communities . Thank you, congressman. And i got the letter this morning, so thank you. First of all, i agree that we have a mandate to have a broad swath of opportunity for all americans to participate in all aspects of telecommunications. I can assure you that thats a goal of mine. Lets talk about some specifics. Number one, i think what we did on the jsas and the broadcast space actually opens up opportunities for minority and small operators. Its why it was supported by more than a dozen representative minority groups. Secondly is we are going to move on the option to make sure that there are appropriate steps taken to assure that minorities can participate through waivers and other kinds of processes in that. Thirdly we are going to have an and i should pause and all of these call out commissioner clyburn who has been the constant pusher on all of these issues. There will be designated entity rules for the incentive option that will create bidding credits for appropriate designated entities. And i very much take to heart both an institutional responsibility and a personal responsibility the language that you read. And so when the spectrum is auctioned, do you make a it a point diversity will be an overriding part of the commission . We want to make sure there are opportunities for designated entities to get bidding credits so that, for instance, they can bid with 75 cent dollars against at t and verizon. In light of the growing number of mergers in the communications industry, how is the commission Encouraging Companies to partner with Diverse Businesses in the secondary market . We have been doing that in both formally and informally that there are great opportunities when there are transactions for minority companies, the grain teleconference is operating both at t and verizon. Which they purchased as farther of settlements with the commission. Those opportunities are important and worthwhile. I also believe that there can be new opportunities in the broadcast space particularly after the auction in terms of being able to share spectrum and offer other kinds of services. Thank you, mr. Chairman. Thank you very much. The chair recognizes the gentleman from kentucky. Thank you, mr. Chairman. Thank you for coming today. I know you had a busy week, so your time is appreciated. My colleague from california and i have spent a lot of time together on spectrum issues. We founded the congressional spectrum caucus with the goal of looking at different ideas how to move forward on spectrum. And i appreciate the efforts youve done to move the incentive auction forward. And i have a couple of questions about the guard bands and the 680 megahertz band. Carefully considered the importance of maximizing license spectrum and adhered to the standard set by congress for a gap. And i applaud the commission for its work in this regard. Two questions. One, how do you see Going Forward out isolated spectrum in the gap . It will be important for those who bid on adjacent there will not be interference. And are you sure the fcc to say there will be no interference. The answer to both w, you showed technical standards. Yes, sir. And weve been using social media to reach out to interested americans. One came from kelly on facebook. And kelly asked this question, well kelly submitted through facebook who would like to ask you the questions about your plans for future spectrum policy and can you give kelly a brief answer to her question about what your broad future spectrum policy. Overall. Thank you, kelly. The answer is theyre not making it no more. So what we have to do i believe we are today on the cusp of the new horizon on spectrum policy. With two things that were doing. One is the incentive auction that you all created. Because when you boil everything down, it ultimately comes down to economics. And if you can address the other persons economics, you can probably go a long way to solving your economics issue. And thats what the auction does. The other component is spectrum sharing. And the days of here, this is all yours, you use it are over. And unfortunately digital allows that kind of sharing. Think about going into a starbucks and everybody is sharing that wifi spectrum. You put that together and i think thats part of kellys question as to where is spectrum policy going and were in the middle of making both of those work right now which is why what were doing is so terribly important. Ive often used the metaphor and its a simple metaphor in this, we dont have special for balanc ambulances and fire trucks. We move out of the way. Thats a way to put it. I was a state senator in kentucky before here. And theres been concerns in places like utah and oregon where theres been municipal broadband deployed and the projects have failed in areas where there are competitive providers. Property taxes and sales and franchise taxes at risk. I believe leaving city taxpayers on the hook for tens of millions of dollars. Five states or so passed laws saying that cities cant do this. Because the states usually on the hook for it as well. I believe in your written testimony youve said that you believe the fcc could do in this area over state law. I want you to clarify that and why you think washington could have a better view of this than frankfort in kentucky. So there are about 20 states that have put some kind of restrictions in place. And i see it through just exactly the opposite end of the telescope, with all due respect. That if the citizens of a Community Want to organize through their local government to say to bring competition in broadband providing, they should not be inhibited by their elected representative. They should not be inhibited by the fact the incumbents have been urging the adoption of legislation that would ban it. And if we believe in competition, we ought to let competition flourish. So what i have said is that im following, again, judge silv silverm silvermans comments in the open internet case in which he said if there is ever an example where 706 would apply, it is in the ability to say to states, you cannot get in the middle of this Virtuous Cycle. And prohibit consumers from being ability to have access. Because of incumbents or because they dont want to be on the hook for a situation. I go back to First Principles that is this is a decision that ought to be made by the people of the community and that if they want to take the risk if they own it themselves, but you dont have to own it yourself. It is also the gentleman from utah has left but for instance in utah theres a group of cities that has banded together to solicit bids for somebody else to own that they would have a participation in that kind of structure. If the people say thats what we want, we want this kind of competition, then i think they ought to be encouraged to get it. And competition has clearly been shown to be the best tool. I dont disagree with you on that. But my time is expired. Ill yield back. Thank you. Thank you very much. The chairman would never do that to the gentleman from kentucky. The chair recognizes mr. Welsh. We have five minutes so we can go licketysplit. We started the caucus and appreciated you coming in. Enormous concern in Rural America that we get access to the internet. Its essential for our future. Net neutrality is a big deal. Thats the big topic youve been getting comments. Theres an e mor nous amount of concern that if we make the wrong decision, the big guys will get the fast lane, many in Rural America are going to get the break down. At the end of this process were going to have access on terms for folks in Rural America to the internet. You want a quick answer . Yes. Yes. You can give a full sentence to reassure all of us that were going to be driving in the fast lane. There should not there is one internet. There is not a fast internet. There is not a slow internet. There is not a urban internet. There is not a rural internet. There is one internet. Everyone ought to have full access to the ability of the internet. Rural america is spread out and the investors want to put their money where they can make the money. We all understand that. That was true for electricity. But weve got to get that internet out into rule america so we can be part of the modern economy. And we have a universal service fund with the mobile fund. We need to have that and im wondering if you could comment on the status of that to make sure the funds are there to build out that broad band. Specifically on mobility, heres the interesting question that gets raised by mobility. Broadband wireless is lte. It is being built out across america. Recently just one of the major carriers announced a new initiative in Rural America with lte. The question becomes that were wrestling with is should we subsidize something if its already happening and that prudent fiscal responsibility suggests probably not. I got three more questions. So we want to work with you on that to make it rational and not have us investing in things that arent work. But invest in things to help Rural America. Yes, sir. Weve got to work with you and the entire commission, the republicans and democrats, and when you came into our rural working group, you explained a couple of problems you had. Each in i. T. And also procedures where i guess its easier to hire a lawyer than an engineer. Im a lawyer, so maybe id like that, but i wouldnt be very much use to you. What are the things that this committee can advocate to help your entire commission who want to do the job. Thank you for asking. Our i. T. Infrastructure is worthy of the smithsonian. I came from a business background. The things that you cannot do is that are common sense in the business world. The fact that were still using computers that have known cyber risk associated with them. The fact that we cant organize a Consumer Complaint process online for American Consumers because our i. T. System isnt up to it. Its ridiculous. So we have Serious Problems there. And the issue of lawyers versus engineers, far be it from me to take a side on that, but we do need more engineers, sir. Okay. Thank you. And economists. Right. Well, id like our committee to work with you on that next, section 706. Theres a lot of concern about whether you have the sufficient authority under that section in order to give you the rule making power to guarantee the outcome being Net Neutrality. Can you comment on that . Do you still feel that is sufficient and the court gave you a road map forward . I think that we do have sufficient authority and then when the court talked about this Virtuous Cycle and they said anything that interferes with that cycle is a violation of 706, that that is a broad grant of authority. My last question in 26 seconds. Retransconsent content. Weve seen that where people cant get access to the signal. Now thats starting to migrate into the online content. Is this the beginning of the cablization of the internet . Sir, i think it is the right question. Our authority goes to the transmission and Program Access goes to the authority of good faith negotiations. I think there is reason to be concerned when because i happen to subscribe to an isp who is in a dispute with a Program Provider, that the Program Provider blocks access from all coming from that isp, i think that is something that is of concern. And that we should all worry about it. I yield back. Thank you very much. Thank you. The chair recognizes the gentleman from kansas. Thank you, mr. Chairman. I dont want to spend a lot of time on Net Neutrality. I have a different view. I view it as nothing more than a price control. Weve seen how that works in creating supply. I think its very dangerous path that youre headed down. I want to ask process questions related to that. Have you spoken to anyone at the white house in the last month regarding Net Neutrality . Only to keep them appraised. They have been assiduous in their recognition that we are an independent agency. And did you call them or did they call you . I called them. And has anyone else on your staff spoken to folks at the white house or omb in the last month . Not to me well, on the answer is im sure. On this issue, i dont know. But i can assure you from my discussions with everybody from the president on down, the recognition of the independence of our agency and ill go further and assure you that never have i or to my knowledge any one of my staff felt any pressure to decide any issue. I appreciate that. Thank you. Want to follow up on something representative guthrie was saying. You believe the fcc has the power to preempt state laws. Yes, sir. Under section 706. Yes, sir. Do you believe that states have the same authority . I think that thats the the issue i believe is do we have the authority to preempt. That raises the question of what is the authority of the state. I think well probably end up having this answered in court. I just read the statute. The language is identical. It says whatever authority you have, they have. It says state commissions. We have preemptive authority over state commissions. So states have the same authority you do. Its the same statute. I think that it says that both of us have authority but that we have preemptory authority on this issue and i think thats what judge silverman was saying in his dissent. These broadcasts talk not only about future broadcasts but pending applications. First, how many applications have been singled out for close scrutiny since the new guidelines have been issued . How many have been approved in those two months . And when might those broadcasters see the resolution of their applications . I dont know the answer to any of those three off the top of my head, but ill be happy to get it for you for the record. You can understand these are pending applications under a set of rules youve now moved the goal posts on them. Yes, sir, i understand your point. What were trying to do is not move the goal posts, but to open up the process so that Everybody Knows what the but thats what you did. You changed the rules with respect to applications already submitted under a preexisting set of standards. So i dont know how you could describe that as anything but moving the goal posts. With all respect sir, we had a series of transactions that were in place and in the decisions on those transactions, we said, note, Going Forward there will be a new look at what financial structures are in transactions. Not in these transactions that were approving. Then we put out a Public Notice that said, here is how we are going to open up this black box. And here is what is going to be going on. It is that standard. So there was notice as a part of a decision that was not affected. Then there was notice and now those that the bureau is reviewing are subject to both of those. My last 20 seconds, with Net Neutrality and Cyber Security issues, do you plan to give Network Providers Liability Protection to protect as part of your rule making. It was not considered as part of the rule making to have that. Mr. Chairman, i yield back my time. Thank you. The chair recognizes the gentleman from new mexico. Mr. Chairman, thank you very much. Chairman wheeler, thank you so much for being here as well. Chairman wheeler, two weeks ago this committee added my amendment calling on the fcc to conduct a study on reforming the designated market area system to the reauthorization bill. As you know, currently provide by the Research Company based upon the reach of television, broadcast antennas. This network of antennas is based on technology deployed back in the 40s and 50s. But current rules prevent the viewership of much of that content. I believe that system embraced by these technologies could revitalize Television Broadcasting reaching viewers who have more in common than on the old map. It is my hope the Commission Takes this study seriously and brings the policy into the 21st century. I hope we might be able to work for that. Thank you for your leadership on this. And that i assure you we will take it seriously. Thank you, mr. Chairman. And mr. Chairman, it wasnt too long ago that a company would not allow access to another companys apps. There was a question with at t and facetime and an apple product as i talk about fixed versus mobile. They defended it by saying it was allowed under the fccs Net Neutrality rules. Granted this was under 3g. The proposal suggests a no blocking rule that sorry, the no blocking rule was applied a different standard to mobile Broadband Internet access and mobile Internet Access service was disclosed from the discrimination rules. Were seeing mobile getting faster now and with the new spectrum options, even faster than fixed. I appreciate and agree with you that were talking about one internet with open and equal access. With my colleagues in rural areas, i have shared with you before if theres a conversation about taking phone calls and with bandwidth capabilities as well as streaming of content on airplanes, in Rural America we should be able to get the same treatment. I dont understand why were not there yet. But noneless, its coming. Im hopeful that while we have this conversation, were able to have equitable treatment. I know theres as i read in the proposal, that theres elements of asking for a look into this in the rule. But im certainly hopeful that this will be treated with the same scrutiny and level of attention and again as i talk about an old antiquated rule within the 40s and 50s we talked about dialup. That this is another area were going to have Equitable Service as well. Mr. Chairman, in another area i know that theres a number of my colleagues who join me in their concern for recent reports of interconnection deals particularly the one between comcast and netflix. You stated that pairing is not a Net Neutrality issue. There is a matter of the open internet and a matter of the Internet Connection among the various pathways that become the internet. And while i understand that Net Neutrality refers only to the behavior of Internet Service providers blocking or throttling the speeds of certain websites, my question is how is an Interconnection Agreement that essentially throttles content substantially different . So, thank you, sir. Thats a very good question. They you can think of the internet in three parts. There is the actually four parts. There is somebody like netflix getting on the internet and then riding socalled middle line providers to a peering point which is a fancy word for interconnection. Where they then have access to comcast, verizon, whoever the case may be. The consumer buys from their computer up to the peering point. Traditionally peering has been ill take mine, you take yours. Back and forth kind of a thing. And for free. That has begun to change over time. If i may, i apologize, my time is going to lapse. If we could get that into the record. All i would add is once upon a time, peering agreements didnt have an exchange of money. People found a way to work with each other. Exactly right. And im hoping we can get some certainty with the treatment of fixed versus mobile in that area, and, lastly, id like for the record if theres any way that you might be able to provide us more specifics and details with whats been talked about as commercially reasonable as well as we talk about putting Smaller Companies at a disadvantage. I apologize to cut you you a. I could always sit and visit with you. President obama is in support of an open internet and i would encourage you to speak with him as well. Let me just, congressman, so am i. Chair recognizes the gentleman from louisiana. Thank you, mr. Chairman, for having the hearing and thank you, commissioner wheeler, for being here today and answering our questions. I know as we look at the potential changes that have been proposed, a lot of us that want to continue to maintain a free and opet want to i know ive got some concerns with the fact that the fcc would even consider going the title ii route in terms of we classifying broadband. You know, a lot of us have reached out to her constituents to have them also give us suggestions on things that they would like to ask you as well. A lot of the comments we got, i know i got in my district were just concerned about maintaining that open internet. Keeping the government out of regulating it and trying to make sure that the government doesnt impede the ability for the innovations that weve seen which event so dramatic and revolutionize not only the country but revolutionize the entire world and its a lot of innovation thats made in america and we want to continue to see that innovation thrive. When you look at going into the reclassification and its a proposal that is out there, ive got concerns about that, but in your statement just heard the private sector must play the leading role in extending Broadband Networks to every american. If it were to be we classified under title ii, who would pay for extending those networks subject to common carrier regulations . The private sector. But then when you look at the title ii route come with the fcc have the authority to regulate broadband pricing . So, in the vastness of title ii, that is conceivable. One of the reasons that we are asking for title ii versus section 706 comments in this proceeding is to be able to specifically zero in on what are issues such as that are what are those be do you think you may have the ability to regulate broadband pricing . Is that something you think would be an open possibly for the fcc . Showed a full title ii regime be chosen, which it has not been but youre making the proposal. We are not. What were doing is were proposing section 706 as the approach, and the weve asked questions about title ii. And these are the kinds of issues that come up, will come up in the discussion and that are going toward serious consideration. That telecommunications services, because that puts broadband into a different realm. Its not there right now. If you do choose to try to put it there, which is a public utility mentors to every Public Service commission, with the state Public Service commissions and other related entities in the states be able to regulate broadband at that point . So what we have proposed is not title ii. Its section 706. What we have asked is for discussion of title ii in those kinds of issues, but our proposal for which ive taken a lot of heat is not title ii. You dont have to go forward with a proposal. Stop taking the heat right now. I said title ii was on the table, that were willing to look at title ii, and mr. Waxman has a specific proposal what he thinks that title ii ought to be a backup and thats a proposal that is important and worth considering, but to proposal that we made its section 706. You this because youre also it seems like a oneway street where youre just targeting this toward internet providers. There are a lot of content providers, a lot of members have used the netflix example or google, other content providers that also have a play in this realm that you seem to just be targeting this towards Internet Service providers, and so im not sure if theres some ax to grind there, but it just seems like its a onesided approach that youre taking even in the review. I wouldnt recommend going down that road for any of these folks but just wanted to point that out. One last thing because i know im running out of time. In a february report, the fcc, some of your staff and a working group, recommended eliminating some of the reports that are out there, the orbit report, the internatio