And its latest order has glaring legal flaws that is sure to keep the fcc mired in litigation for a long time. Turning to the designated entity program. The fcc must take immediate action to end its abuse. What once was a wellintentioned Program Designed to help Small Businesses has become a playpen for corporate giants. The recent aws3 auction is a shocking case in point. Dish, which has annual revenues of 14 billion and a market cap of over 34 billion holds an 85 he can witd stake in two companies that are claiming 3. 3 billion in taxpayer subsidies. That makes a mockery of the Small Business program. The 3. 3 billion at stake is real money. It could be used to underwrite over 585,000 pell grants, fund School Lunches for over 6 million children or incentivizing the service of 100,000. It denied them spectrum licenses they would have used to give Rural Consumers a competitive wireless alternative. In my view, the fcc should quickly adopt a further notice of proposed rulemaking so we can close loopholes in our rule before the next spectrum auction. Chairman thune Ranking Member nelson and members of the committee, thanks to you once again for giving me this opportunity to testify. I look forward to answering your questions and to working with you and your staffs in the time to come. Thank you, commissioner. Good afternoon, chairman thune, Ranking Members of the committee. They are change at a breathtaking pace. How quickly . Well, consider this. It took the telephone 75 years before it reached 50 million users. To reach the same number of users, television took 13 years and the internet took 4 years. More recently, angry birds took only 35 days. So, we know the future is coming at us faster than ever before. We also know that the future involves the internet. And our internet economy is the envy of the world. It was built on a foundation of openness and that is why i support network neutrality. With an eye to the future i want to talk about two other things today. Wifi and the homework gap. First, wifi. A few of us go anywhere now without our mobile devices and our palms, pockets or purses. Thats because every day in countless ways our lives are dependent on wireless connectivity. While the demand for our air waves grows, the bulk of our policy conversations are about increasing the supply of licensed airwaves available for commercial auction. This is good but it is also time to give wifi its do. Wifi is how we get online. Wifi is also how our wireless carriers manage their networks through offloading and wifi is a boone to the economy. There are studies that demonstrate it is responsible for more than 140 billion of Economic Activity every year. And thats big. So, we need to make unlicensed Services Like wifi a priority. The commission is doing just that with our work on the 3. 5 gigahertz and next year on the 600 megahertz. Going forward, we all need to be on guard to find more places for wifi to flourish. Second, i want to talk about the homework gap. Today roughly seven in ten teachers assign homework that requires Broadband Access but fcc data suggests as many as one in three households do not have access to broadband at any speed. Think about those numbers. Where they overlaps what i call the homework gap. Because if you are a student in a household without broadband today, getting your homework done, just getting your homework done is hard. Its why the homework gap is now the cruellest part of our digital divide. But its within our power to bridge it. More wifi will help, as will our recent efforts to upgrade connectivity in our nations libraries through erate, but more work remains. And i think the fcc needs to take a hard look at modernizing its program to support connectivity in low income house holds, especially those with schoolaged children. And i think the sooner we act, the sooner we bridge this gap and give more students a fair shot at digital age success. Thank you. Thank you commissioner rosenworcel. As much as we can, trying to adhere to the fiveminute rule, it will be hard because we have a lot of interest in the subject. Let me start by talking a little about an issue important to me and my state, and ill start by saying laws and policies that are outdated often leads to rules that are are arbitrary which ultimately limits Consumer Choice and raises cost. And the current universal service fund rules require a Rural Consumer to buy Voice Service from a small Rural Telephone company in order for that carrier to are eligible for consumer support. If they the carrier is no longer eligible to receive u. S. Support for that subscribers line. This contradiction undermines the mission of the new broadband centric usf. It makes broadband more expensive. Last year Senators Gardner and i led letters to the commission to urged the fcc to propose rules to solve this issue nearly a year later that issue remains unsolved. And so i want to ask each of you a question. Im going to take the approach of my predecessor, chairman rockefeller, and ask for a commitment from each commissioner. The question very simply is will you commit to solving this growing threat bit end of this year. Yes. Absolutely. Yes. Yes. Very good. Thank you. Okay we have unanimity now, sir. Yeah, this was designed to get you guys all on the same side of an issue. You know i want to make just a an observation, in addition to other things we would like to talk about as well. I have a father whos 95 years old. He lives in my hometown in south dakota with a population of about 500 people. Hes a user of the internet. It strikes me if i had to suggest to my dad that were going to regulate the internet he uses with a law that was passed during the Great Depression when he was 14 years old, i think he would probably be flabbergasted. And essentially thats what were doing. Were trying to take something that was designed for a very different era and squeeze it and try to fit it into a modern technology. And one of the issues that that statute allows for is rate regulation. Now, i know that, charnlgs you have contended that no rate regulation is going to result from the internet open order. Lets say hypothetically that someone files a complaint alleging the rates they pay an Internet Service provider are not just and reasonable under section 2. 01. Commissioner pai, as a result of title 2 reclassification, isnt the commission legally obligated to investigate and rule on that type of a complaint . Mr. Chairman that is absolutely right. The order opens the door to complaints under section 2. 08 both to the commission and courts around the country. At that point it will be up to the commission if it receives such a complaint. The order limits itself we dont, things like tariffs but says nothing about expost regulation and i think thats why expost rate regulation is a very real prospect. So if that circumstance were to happen commissioner rosenworcel, if the Commission Judges the rates to be unreasonable, could the fcc require the isp to adjust its rates or to impose fines or forfeitures on the isp . We dont have such a case before us right now, but i think its important as a matter of due process that any provider thats having difficulty to provide service has the opportunity to complain to the commission and seek resolution. So the answer is, yes, the fcc could . Well see when we have a complaint before us. Right. But im just saying sure. Im not saying you should. Im saying you could. Commissioner clyburn how will the fcc decide if a rate is unreasonable or unjust . So given the same context that you set up one of the examples that i gave in my Opening Statement was on inmate calling. And that affirmed should affirm to all of us that the bar is incredibly high when it comes to the scenario that you put forth. We waited over ten years to even think about addressing what was obviously a market failure. We wont know as my colleague says until something is before us. That bar is extremely high for that case to come to the resolution you put forth. You would have the discretion to determine if a rate is unjust or unreasonable . We have an obligation to look at any complaint anything filed before us and make a decision accordingly. And if that decision is made if that conclusion is reached, the fcc could, in that circumstance act in a way that would adjust rates or impose fines, is that i jokingly say that, even though im from the south and we have the other south, South Carolina thank you. And that we have been known to there have been very interesting people who have predicted the future. I, unfortunately, do not have that talent. I would have a hard time i think, explaining or how that adjudicate process would not be rate regulation. And, you know like i said granted the chairman has said that something on which they would forebear, but if you are if a case is brought forward, it strikes me at least the fcc has an obligation to respond. And i also think things decided by this commission certainly dont bind future commissions which is why weve argued all along that working constructively on legislative solution that sets clear rules of the road is the best approach to doing this. But that being said my times expired. Senator nelson. Chairman wheeler, rate regulation, unbundling, tariffing, these are things that some of the big corporations are quite concerned about. And no doubt youve had conversations with ceos of those corporations. And youve explained what your order is. How did you explain it and what was their reaction . Thank you, senator. So rate regulation, tariffing, unbundling, those sections are all foreborn i never knew what the past tense was on forebearance but were not using them out of title 2. To the point senator thune was just making 1993 senator marky then congressman marky, created section 332 of the Communications Act in the house, which was sought by the Wireless Industry when they asked to be treated as title 2 common carriers and to have forebearance from parts of the act that are no longer appropriate in a nonmonopoly situation. That included specifically a decision by Congress Section 201. So, the kind of example that was just raised about section 201b being some kind of back door into rate regulation has existed for 22 years in the Wireless Industry. And the commission has not been confronted and has not acted in this kind of way that suggest its some kind of back door regulation. In fact, whats happened, with the absence of consumer rate regulation that industry has been incredibly successful. The Wireless Voice industry has had 3 billion in investment since then. And it was that model that was actually more forbearance than was created for the Wireless Industry that we patterned the open Internet Order on so that it is not your grandfathers title 2. Title 2 has 48 sections. 27 of those sections we said we will not use. Which is 50 more than mr. Marky results in 22 years ago. So, i think that the record is pretty clear that if we say were not going to have consumer rate regulation, were not going to have tariffing, were not going to have unbundling and we explicitly remove those sections and say were not looking at those sections and we pattern ourselves after something that has this kind of a two decade record of not having these imaginary horribles happen, that were in pretty good course. And things like transparency and a host of other issues theres wide acceptance. So, the interesting thing is there are four regulatory actions in our order. No block, no throttling no pay prioritization and transparency which are the same thing that legislation up here, that the chairman and others have introduced, contain those four. And the isps run ads saying, oh were all for these. We would never think about doing these kinds of things. Those are the four regulatory constructs. The thing where everybody gets adjeta is that we also say, and there should be a basic set of ground rules for things that nobody can anticipate that are not proceed skriptive regulatory saying, we are smart, therefore you will do this, but are saying, well lets take a look and is that just and reasonable . Is that in the consumer interest . Is that in the Public Interest . And on a casebycase basis. The fascinating thing to me, sir, is that the isps for years have been saying, we dont want the fcc to have such broad rulemaking authority. They ought to be looking at things like the ftc on a casebycase basis. Now what happens is we come out and say, we do Something Like the ftc on a casebycase basis and everybody says, oh, thats terrible uncertainty. We dont know what it is. If only they were making rules and tell us what it is. You cant have it both ways. But i think what we have not is common on four aspects. The only four regulatory aspects. And then says there needs to be be a set of rules and there needs to be a set of standards and there needs to be a referee on the field who can throw the flag if somebody violates those standards. And i would just conclude, mr. Chairman by saying that certainly the five commissioners in front of us would never do this kind of dastardly stuff but would a future commission do it . And the flipside of that, and id like you to comment, chairman wheeler what about the future ceos that presently you have confidence in them but what about someone that suddenly wants to go beyond the scope of your intent . So ceos come in to me senator, and they say, you know we trust you. We think you have we agree with everything, but, you know youre not wild and crazy. And we think theyll be decent, responsible decisions, so we trust you. But what about that crazy person thats going to follow you, you know, some years down the road . And my response is, i feel the same way about you, sir that you have said you would never do these kind of dastardly things to the internet but what about the wild and crazy ceo who follows you . So, lets have a basic set of rules. Is it just, is it reasonable and is there a referee on the field who can measure against that yard stick and throw the flag if appropriate . Thank you. Thank you, senator nelson. Senator fisher. Thank you chairman. There are a number members of congress who believe new technologies can help the United States remain innovative. And im working with senator booker, senator shotts, senator ayotte on a number of things. I think thats going to be a very good bipartisan resolution and moving forward hopefully legislation so we can see that innovate toreors are able to grow their business and theyll be able to solve problems with clear rules and also clear expectations. I think thats necessary, that innovators have to have that certainty out there. And when i look at the general conduct that is proposed that you have here im concerned it could jeopardize that regulatory certainty that i think we have to have if were going to remain competitive. The Electronic Frontier foundation has described this rule as an overreach and confusing. Specifically the eff said the fcc believes it has Broad Authority to pursue any number of practices. Hardly the narrow light touch approach we need to protect the open internet. The wall street journal reported that at a recent press conference, you said with respect to the general conduct rule that, quote, we dont really know. We dont know where things will go next. The order says the agency will watch, learn and act as required. A process that is sure to bring greater understanding to the commission. So, my question to you is, how can any business thats trying to innovate have any kind of certainty that theyre not going to be regulated by the fcc under what i view as a very vague rule that you have here . For example, when will it be applied . What specific harms does the general conduct rule seek to address that the rest of the president s open Internet Order doesnt capture . What are you after here . Thank you, senator. First of all, id like to identify myself as an entrepreneur and as somebody who has started multiple companies and spent the ten years before i came into this job as a partner in a Venture Capital firm investing in those kbz. And i know from my experience that the key to innovation is access. And when gate keepers deny access, innovation is stifled. Thats what we want to avoid. We do not want to be in a situation where we are having prescriptive rules. We want to be and what we have structured is something that says, okay, lets ask a couple of questions. Whats the impact on consumers of this action . Whats the impact on content providers, those who want to be delivering, and whats the Public Interest . And i think we can probably all agree that nobody wants to sit by and see something evil happen to any three of those legs of the stool. And those are the tests. And we look and say okay, now, what happens on those three legs of the stool with this kind of an action that we have had a complaint on . And the important thing is as i was saying to senator nelson that this is not us saying were so smart, we know what you should do. This is specifically doing what the isps have been saying to us dont make rules, but, rather, look at things on stay casebycase basis. Thats what we tried to build in that kind of flexibility. With that flexibility, though, what do you do with these entrepreneurs, innovators that are coming up with things that i cant even imagine . All right. And theres a process theyre going to have to go through with the fcc that they dont they dont know if theyre going to be required to go through it or not. What do you say to them . Do they wait and get their idea no, we dont move up the stack. Were talking about the delivery services. Were not talking about regulating two guys and a dog in a garage and they have to get do you think thats clear . Yes maam. Yes, maam. Were very clear on that. And that is an essential component of this. First of all, i think its questionable w