Transcripts For CSPAN3 Oversight Hearing With FCC Chair Tom Wheeler And Commissioner Ajit Pai 20240622

With media organizations from the early caucus and primary states are sponsoring this forum and following the live forum, you can provide your input by joining our callin program and adding comments on facebook and twieter on cspan, cspan radio and cspan. Org. On tuesday federal Communications Chair tom wheeler and commissioner aji pay testified before the communications and technology. They discussed rural access to broadband and over the top Video Services. This is almost three hours. Well call to order the subcommittee communications and technology and i want to welcome everyone here today and wish a very good morning to chairman wheeler and commissioner pay, delighted to have you back before the subcommittee again this year. We appreciate the work youre doing at the fcc and i look forward to your testimony and our opportunities to pursue some issues. At the risk of sounding a bit like a broken record, however i continue to be concerned with the commissionys failure to adhere to sound, regulatory process. For the nearly five years that ive had the opportunity to chair this subcommittee you all know ive consistently pushed to make the fcc a better, more Transparent Agency and it seems like the chasm between commissioners deepens over time. When the committee considered process reform legislation a few months ago id hoped we had reached the bottom of the well that it would find its way to the honest policy debates and compromises that characterized it since 1934. Unfortunately, that appears not to be the case and if commissioner pays testimony is any indication things might actually be getting worse at the commission and thats disappointing, to say the least. With all thats going on at the commission and in the world of communications we have much ground to cover in todays hearing which likely will neyes is tate a second round of questioning. Let me highlight five yearareas of policy concern that i and other members have. First, the auction. For a successful auction we all know the sellers and buyers need to fully understand and support the rules, yet when it comes to the band plan questions and uncertainty still abound. Layered on top is growing concern regarding how the repack will work including as it relates to the future of lowpowered television stations and translators. It was never our intent that these Diverse Voices in the marketplace would get fully silenced and then there are the issues of potential interference that have come up which as we all know went mishandled can doom an auction as has occurred in the past. Second, the fccs action on the designated issue raises concern for us and the changes will strengthen the integrity of the program, a goal we all share, sadly, they simply replace one set of set of rules that were gamed with a new set yet to be gamed. The commissions new rules remove the obligation to provide facilities based service and permit leasing 100 of the spectrum purchased. That sets the stage for arbitrager financed by taxpayer dollars to participate in the next spectrum auction bringing nothing to the competitive market. Chairmans advocacy for this outcome is puzzling given the assurances that the changes would protect the program from, quote unquote, slick lawyers taking advantage of loopholes in the program to unjustly enrich their sophisticated clientele. Third, telephone Consumer Protection act. My colleague from new mexico and i have had serious bipartisan discussions about the approach the fcc is taken as it relates to the fundamental nature of democracy in america and Practical Communications in a wireless age. Beyond that members of this subcommittee are just beginning to hear from adversely effected users about the disruption this new ruling will have on a variety of companies and the consumers they try to serve. Fourth expansion of the Lifeline Program. All one has to do is read todays story in politico regarding the problems over at the department of agricultures Rural Utility Service to understand why its so essential. Before any agency moves to spend money it should have tight control and a budget. Unfortunately for rate payers in a Party Line Vote the fcc rushed forward to expand into broadband with little reform and no limit on the spending. Fifth, amid this swirl of controversy that continues to surround the actions the Commission Takes let us not lose sight of what is not getting done. For example, the am revitalization proceeding described by some as grinding to a halt. Despite the chairmans assurances to this subcommittee. The quad ren yal review of ownerships of broadcast properties continues to languish in open violation of the commissions legal obligation. Let me close with this each member of the commission is very bright talented and clearly passionate. And yet as evidenced by recent Public Comments of commissioner riley and testimony today of commissioner pai, its believed their not included in meaningful and substantial way. And stakeholders feel shutout altogether. The commission and all of us work through the complicated issues in todays rapidly evolve evolving communications world. On a final note on the good side of things if you have the background i have, pleased to note that at t today announced that they are reached an agreement to allow fm chips in cell phones making at least the second carrier to do so. And we hope that other carriers will follow suit. With that i have used up my time and turn to the jegentle lady from california. Thank you, mr. Chairman. Good morning chairman wheeler, commissioner pai, welcome back to the committee. Were happy to see you. And as i said we welcome you back. Todays hearing marks the chairmans third appearance before our subcommittee in just over four months. In fact, the Congressional Research service tells me that the chairmans eight appearances before congress this year marks a new record. So congratulations, mr. Chairman. Put that one up on your wall. In the past 14 years in the past 14 years no fcc chair has testified more times before congress in a single calendar year. And of course were only in the seventh month of 2015. It is our subcommittees responsibility to conduct robust oversight. And in so doing we should hear regularly from the chairman and his fellow commissioners. Responsible oversight includes a recognition that the fcc, and i think that we should be doing this. I mean there are many things to raise that are legitimate at least in the minds of those that raise them. But we should include a recognition that the fcc has undertaken an unprecedented series of steps to promote competition, enhance Public Safety and ensure that consumers are protected against deceptive or misleading billing practices. Here are a few highlights of the commissions work over the past year. Modernize the Erate Program to increase the presence of wifi in classrooms and bolster higher capacity Internet Connections to the anchor institutions across the country, schools and libraries. Raised a record 44. 9 billion, with a b, from the aws auction. Repeal the outdated and anticonsumer sports blackout rules which for four decades, 40 years, prevented fans from watching games on television when they were not sold out. I think there are a lot of people in the country that are really thrilled about that. Launched a new Consumer Help Center to streamline the complaint process and improve how consumers interact with the fcc. At this point, mr. Chairman, i would like unanimous consent to place in the record a terrific article from forbes entitled how the fcc saved me 1800. If you havent read it, everyone should. Without objection. Thank you. Freed up 150 megahertz of spectrum for mobile broadband. Established indoor location accuracy rules for wireless calls made to 911. That could be a life saving step right there. Adopted bright line rules that prevent broadband providers from engaging blocking, throttling and paid prioritization. Leveed fine against a Major Telecommunications provider for misleading consumers about their unlimited data plans. Preempted state laws in tennessee and North Carolina that prevented local communities from deploying broadband which they want to do across the country. All of this and more in just one year. And theres much more ahead as the fcc prepares to undertake the worlds first voluntary inventive auction in a Technology Transition to an allip world that preserves the core values of competition, Public Safety and Consumer Protection. So i thank both the chairman and the commissioner for your continuing commitment to a modern telecommunications marketplace. And i yield the remainder of my time to the gentleman from vermont, mr. Welch. Thank you very much. Welcome, chairman wheeler and commissioner pai. Really appreciate the work youre doing. Just a couple of points. Im very encouraged by the Tech Transitions progress that youve been making. That is going to be very helpful to many more businesses that need efficiencies. Its going to be helpful to consumers. I hope you dont stop there. One of my main concerns, i know concern of many of us is to have competition as much as possible in this area. We really do believe that that leads to innovation. And better prices for the consumers. So the special ak sesccess issues continue of top concern to me. And finally i would like to remind you of the Bipartisan Working Group that we have set up. Because theres so many of us, even if we represent urban areas that have rural districts that have special problems and oftentimes arent the big markets. We want to continue to work with the entire commission to try to make certain that the Rural Service is there and will be there and will be the highest quality. Thank you very much. And i yield back the balance of my time. Gentleman yields back. Chair recognizes gentle lady from tennessee, ms. Blackburn. Thank you, mr. Chairman. And i want to welcome you both. We appreciate that you are here. I will say i disagree with my colleague from california as she talked about tennessee. We saw that as stepping on states rights mr. Chairman. And you know that you and i disagree on that. I am pleased yall are here. Im sure youve read the oped in todays paper by each of your predecessors predecessors, getting spectrum to the marketplace is where we need to have our focus. And rather than getting off into all these tan issues, the focus should be the core of your mission, dealing with spectrum deployment and usage. And when you look at the expected increase in the wireless arena, it draws more attention to this. You know, i was thinking as i was prepareing for this hearing. When you go back and look at the industrial revolutions that we have had in this country, looking at the agricultural and the industrial mechanization revolutions, when you look at Technology Information we are almost at a point of being able to say there is this wireless revolution that is going on because business transactions, health care, so many things are going to depend on this spectrum. And we want to make certain that you are focused on this. So we welcome you. We know that we have to be diligent in this. We look at what south korea is already talking about doing. South korea and japan and the fiveg and recapturing the momentum that at one point they had. And we dont want them to be the world leader. We want to be the world leader. And weve got to have you work with us on this. At this time i yield the balance of my time to mr. Latta. Well thank you very much. I thank the gentle lady for yielding. And i want to thank chairman wheeler and commissioner pai for being with us again. Its great to see you both. I look forward to your statements and also to our questions today. The communications and Technology Industry is a very productive and dynamic sector of our economy. This is largely due to bright Innovative Minds and in part because this industry has been widely regulated with the ability to grow and evolve to the demands of the consumers. Therefore we cannot afford to overlook the significance of the regulatory policies and how the fccs decision impact the industrys success. This is why im concerned with many of the actions and propose emerging the fcc and general act of transparency of efficiency and accountability at the agency. I hope todays hearing will provide us with an opportunity to discuss in more detail the commissions policies decisions and processes. And i thank the gentle lady for yielding. I yield back. Yield back my time. Chair recognizes gentleman from new jersey, mr. Bloan, for five. Thank you, mr. Chairman. Thank you to commissioner wheeler and commissioner pai for coming back here today. I know its been a busy few months since you last testified before this subcommittee. I appreciate your willingness to come and give us an update. Im grateful for this opportunity here from chairman wheeler about how hes addressing the democratic members of the subcommittee, many of which shared by our republican colleagues our members are champions from improving universal access to broadband and many underserved rural areas of our country and also tireless advocates for rights of residents of our vast tribal lands. And too often those living on tribal lands are unfairly left on the wrong side of the divisional divide. I hope the fcc can improve deployment to these areas with the economics alone are not enough. Our members have also been devoted to improving Public Safety communications. This is especially meaningful for those of us areas impacted by disasters like Hurricane Sandy who believe everyone should be able to call for help in an emergency. We hope to make our vision into a reality. Our members also share chairman wheelers commitment to competition. Thats why we led the charge to overhaul the fccs designated Entity Program under the new rules that the fcc recently adopted the Program Encourages robust participation from bona fide Small Businesses while allowing innovative Business Models more in line with todays dynamic wireless market. And weve also stood with our Ranking Member in her battle to free up more spectrum for unlicensed use. These air waves can lower barriers to entry and allow for more vigorous competition. And finally i hope to learn more about what the commission can do to support our work to protect consumers. For instance, i know several members of the subcommittee have been focused on the fccs recent actions to address robo calls. We all agree more needs to be done to crackdown on unwanted commercial calls and hope to hear what the commission can do to address the issues our members have raised. I like to yield one minute each of the time well, i guess a minute and a half to mr. Doyle and then a minute and a half to ms. Matsui. Thank you, mr. Chairman for holding this hearing and commissioner wheeler and commissioner pai thank you both for being here today. Mr. Chairman, id like to recognize the accomplishments of the commission and of this chairman. Since tom wheeler erer took over as chairman, the fcc has done much to advance our Telecommunications Agenda from establishing the fccs open Internet Order to keeping the incentive action on track, updating the Lifeline Program for the internet age and steep fines to Telecommunication Companies that abuse consumers. I also want to commend the chairman for advancing a procompetitive agenda both in wire line and wireless service. The commissions upcoming vote on Tech Transitions, action on special access and the establishment of the spectrum reserve in the incentive auction are all important steps towards preserving and promoting competition. Mr. Chairman, keep up the good work. Thank you. And ill yield to our colleague ms. Matsui. Thank you very much for yielding to me. Welcome back chairman wheeler and commissioner pai. Its great to see you again. I know you have a busy agenda and i want to briefly highlight two priorities i know were all interested in. The first is making more spectrum available. Spectrum is our nations invisible infrastructure of the 21st century. Its critical to keep our wireless economy growing. We need to talk about how to put more spectrum into the pipeline so we can continue to meet the demand. Congressman guthrie and i have a bipartisan bill to create new incentives for federal users. We need to continue to explore these solutions. The second is making Broadband Access more affordable. Millions of americans are still on the wrong side of the Digital Divide. The Lifeline Program can and should help these americans get and stay connected. I know the fcc has started work on these very important reforms, but we need to finish the job. I look forward to working with the whole commission as we talk about these matters. And hopefully make progress on this. And i yield back the balance of my time. Thank you. Gentle lady yields back. The gentleman yields back. And i think all time is now expired. So now we go to our two distinguished witnesses chairman of the federal communications commission, were really delighted because we have you a lolt and thats a good thing. We welcome you and commissioner pai. But mr. Wheeler why dont you go ahead and lead off. Its a modern technology thing. Im tempted to make a comment about the National Champion of appearances before, but we could arrange that. I wouldnt want to go down that route. But in the ten weeks in all seriousness in the ten weeks since i was last before this commission tee theres been a lot happening. And i look forward to discussing it with you today. Weve made significant progress to begin the incentive auction on march 29th. Eight months from tomorrow so theres a lot of pressure on here. Weve continued to grapple with the Tech Transitions issues that are raised by the movement from analog to i. P. Networks. And weve approved one merger with conditions. Another was withdrawn and a new one was added. And then of course on top of that the Appeals Court stayed or denied the request for a stay for the open internet rules. But one issue which frankly caught me by surprise was raised by a letter signed by every member of this subcommittee having to do with local number portability. I wanted to report directly to you on that. Our rules require that local reportability be ubiquitous. But looks as though the manner in which the industry has set up the system does not fulfill that requirement. And i appreciate this committee bringing this to our attention. Implementation of the rule apparently requires that a mobile carrier have a presence in the home market of the ported phone number before the transition can occur. This is not possible for smaller regional carriers. So the effect of this is that if i were to move from washington to a market served by a carrier not in washington and to choose that carrier in a competitive choice process, i couldnt port my number. Thats contrary to our rules. And ive asked that it be fixed. Yesterday i wrote the four major carriers as well as their trade associations asking that they identify a solution and report back within 60 days. I believe the carriers are in the best position to fix this. And i look forward to their response. But i did want to say to this committee after raising this issue in unanimity that if this approach doesnt fix it with dispatch, well have to find other approaches that do. But i really appreciate the way that this committee called that to our attention. Because we had not seen that previously. On another matter frequently raised by the committee, im pleased to report that the fcc has completed an exchange of letters with the Telecommunications Agency of mexico, ift, to harmonize tv and wireless spectrum on both sides of the border. Mexico is in the midst of its dtv transition and you as you know are headed into an incentive auction and relocation of broadcast and mobile licenses. Where on the spectrum mexico places its dtv licenses could therefore effect us and our u. S. Licenses and where we place our licenses could effect them. In the good faith negotiations of the mexican ift, this major hurdle has been vaulted. And i want to especially thank my counterpart in mexico and his commissioners for their leadership on this matter. To the north we have been making similarly productive progress with our friends, the canadians. I believe that once we have a decision next week on incentive auction procedures that well be able to conclude that coordination as well. And finally, weve had frequent discussions with this committee about the open internet rule. Now that the d. C. Circuit has put it on an expedited track for judicial review, were only six months or so away from that ruling. Which i know we all have been waiting for. Thank you, mr. Chairman. Ranking member, i look forward to discussing these and any other issues. Thank you chairman. Appreciate the update. Now go to commissioner pai. Delighted to have you before the subcommittee again and please go ahead with your testimony. Thank you mr. Chairman. Thank you for inviting me to testify. This hearing comes at a critical time. The fccs making judgments that will shape the Communications Landscape for years to come. Ill start with the broadcast incentive auction. The fccs empowered to conduct this auction because of your bipartisan efforts. Its therefore disappointing this proceeding has been run in a partisan manner. Time and again commissioner mike oriley and i have offered common sense ideas for improving auction rules and procedures. Often we receive no response at all. When we do receive a response its almost always no. Fortunately it isnt too late to change course. Broadcasters, wireless carriers and unlicensed advocates all agree that the commissions current band plan is flaudwed. I stand ready to do what congress did when it passed the landmark legislation. Compromise to find a consensus solution. Here specifically is what we should focus on. The proposed band plan allows for too much variability and would put too many broadcast stations in the wireless portion of the 600 megahertz band. This will both impair spectrum that would be sold in forward auction and cause interference between broadcast and wireless services. In my view the commission should try to minimize band plan vary blgt. If broadcast stations must be placed in the wireless portion of the band, they should go in the uplink spectrum, not the down link. And in order to reach a compromise, we also need to make more information public. Right now stake holders and commissioners alike are essentially being asked to take on faith that unless we adopt every aspect of the commissions proposals the incentive auction will end in apocalyptic failure. But i prefer the reagan approach, trust but verify. Next, id like to discuss the fccs designated entity or d. E. Program, which has been plagued with abuse. Even though the program is supposed to help Small Businesses large corporations routinely try to game the system. Thats why i was disappointed when the fcc recently voted to make it easier for Big Companies to profit from the program. We were promised fcc action to close loopholes that could be exploited by slick lawyers. Instead, the commission reopened loopholes it had closed on a bipartisan basis years ago. Loopholes through which a minimally competent attorney could drive a truck. Specifically, the fcc paved the way for d. E. s to obtain a 35 discount on auction spectrum and then turn around and immediately lease 100 of it to a large incumbent carrier. Now, at the time we were told that opening up new loopholes in our d. E. Rules was a, quote attack on economic inequality. This assertion is baffling. Lets be clear, those who will profit from these new d. E. Loopholes are specklator who is are already firmly ensconced in the famed 1 . Case and point, under the new rules donald trump would be allowed to own most of a d. E. Get a taxpayer funded discount on spectrum and then lease all of that spectrum to at t or verizon. So during the commissions deliberations, i made simple proposals to prevent this kind of abuse of the program. For example, i proposed anyone making over 55 million a year should be prohibited from owning a d. E. And getting taxpayer funded benefits. Unfortunately, the majority rejected this and other common sense reforms. Shifting gears. When it comes to broadband as congressman welch pointed out, too many rural areas are being left behind. Specifically we are failing areas served by small telecommunications carriers. Thats because of a cork of regulatory history. Our rules governing these carriers give universal support only to companies that offer telephone service, not stand alones or Broadband Service. Thats why i put forward a plan to correct this historical action. A letter made by 115 members of the house of representatives. This group urged the fcc to implement a much simpler and straightforward plan for rate of return carriers than was adopted for price cap carriers. I humbly submit thats exactly what my plan does. It implements a single page of rule changes to existing universal Service Regulations to solve the stand alone broadband problem. These simple amendments would let rural consumers choose broadband as stand alone service. Carriers the assurance they need to increase deployment. And critically would do all of this within the existing budget. Chairman welden, Ranking Member. Thank you for inviting me to testify and continuing to work with you and your staff in time to come. Thank you, commissioner pai. We appreciate your testimony as well. Chairman wheeler as you know lptv, and translaters play an Important Role in providing Important Information and programming to consumers and businesses. And especially when it comes to the translators serving difficult to reach terrain and Rural Communities. What do you plan to do to minimize the impacts of repacking on lptv and translators to help ensure their important programming continues to reach viewers . Thank you mr. Chairman. We share your interest in making sure that this voice continues. As you know the spectrum legislation does not create a repacking role a role in repacking for translators. So the question becomes what do you do about it. So heres what were going to do. One, there are channels well help them find channels if they get displaced as a result of the auction. One of the realities of an auction is you dont really know the displacements going to happen because you dont know the outcome of the auction. So step one is we will work to do that. Step two is that were going to begin a rule making that will allow for channel shareing by lptv stationings just as were counting on channel sharing in the broadcast auction. And that kind of technology should provide the similar kind of solution. And thirdly the rule is constructed in such a way that they dont have to vacate until the wireless carrier in fact is ready to turn up service. So there is a significant buffer of time in there. But we believe that as we help them find new channels and as we have a new rule that allows for channel sharing that that will be able to mitigate the kind of impact that youre concerned about. And arent you going to also give them like in the dtv transition there was an opportunity to apply they got some preference to move . In the application process . Ill get back to you. Let me get back to you. It was a displacement relief. Were laying out a whole process that will help them through this process in finding those kind of new channels. All right. Thank you. I want to talk about some of the Financial Issues because youve spoken about them eloquently before the Appropriations Committee and publicly. And i know that you address field agents during a recent agenda meeting regarding the issue of closing the field offices. And you seem to, you know take special point that your budget comes from congress and all, which is true. And i want to ask commissioner pai, is it true that the Enforcement Bureaus Front Office Management staff has more than doubled size since 2008 . Thats my understanding, yes. Is that true, mr. Wheeler . No, sir. Its not . No, sir. The enforcement staff is now i can give you the exact statistic. 20 smaller than it was under chairman martin. And that since i have come into office we have reduced the Front Office Staff by 14 . Okay. Well want to followup because obviously theres a disagreement among you two on this matter. Isnt it also a fact that the Enforcement Bureau has more vehicles than field agents . Yes, sir. Ill tell you a story. I went to anchorage, ive been trying to visit the offices. We have a policy that says you have to have two employees in each vehicle. Because theres one driving and one working the equipment. You know, like texting and driving. And we have two people in the anchorage office. And we have two vehicles. Its more than just anchorage. Oh, no, this is one of the problems we inherited when we walked in the door that there had been this purchasing. So what were trying to do now is reposition those vehicles so they will be available for the strike teams when they come in. And what about we keep hearing stories that you all have cars and drivers and all that sort of thing at the commission, is that true . Actually, i dont know about you all i dont have a car and driver other than my prius out there. Its true although i do try to walk when i can. It shows. I got a new fitbit to try. My time has run out. Turn to the gentle lady from california. Thank you. I want to start with chairman wheeler. I just want to ask my questions and then you can respond to them. And i have one for commissioner pai. You stated you said in your Opening Statement that the upcoming incentive auction has quote, more moving parts than a swiss watch. And i agree. And one example is the reserve trigger, which i think is really very very important. Its critical that we get it right because we want to ensure that competitive providers have real access to spectrum. So can you commit to addressing the concerns of the competitive carriers prior to the start of the auction . So thats my first question. My second question is some in the medical community have suggested that the fcc delay implementation or consideration of its Technical Rules for the use of channel 37 by unlicensed tv white space devices. Now, delay is i think highly concerning because this is one of the three channels that Tech Companies say are at a minimum needed in this band to stimulate and sustain investment in enhanced wifi. So do you think that your proposal already adequately protects patients and will prevent harmful interference to hospitals . I think that, you know those are i could ask a lot of questions, but i think that those two are really important. And also this year, mr. Chairman, there have been eight broadcast Television Blackouts involving almost 30 u. S. Cities. Can you tell us when the fcc will complete its review of the good faith rules and when we can expect new rules to be put in place to better protect consumers . So those are my questions to you. And a quick one to commissioner pai. I read recent lyly hes not here, but something commissioner oriley said. And its a quote of his. But it does deal with fccs governing principles. And he stated that one of the fccs governing principles should be that the internet is not a necessity in the everyday lives of americans. And i know that he brought up its not even close to being a human right. I dont think thats the jurisdiction of this committee, human rights. But its disturbing to me that we would move away from that relative to a principle. And i wanted to know if you agree or disagree you want to add or subtract from it . So go to chairman wheeler first. And then to commissioner pai. Thank you, ms. Eshoo. Let me see if i can hit those one, two three. Reserve trigger, channel 37 interference, and blackouts. What we have tried to do is to make sure that there is reserve spectrum available. Its never before done, as mr. Welch and others have pointed out its an important component of delivering service to rural areas. The question then becomes after you do that do you want to create rules that allow people to withdraw from the auction early and not have to pay as much as if an auction had been ongoing . And thats whats being requested. That is not what is currently in our proposal. That we dont think there should be a quick out. Ive got what i want let me stop the bidding right now. For reserve spectrum. Secondly inwe have changed from 180 meters to 380 meters the distance that an unlicensed device would be allowed close to these facilities, facilities using channel 37. And that number was arrived at as a result of some studies that were done by the medical telemetry folks. And so thats how that number why that number was increased. Theres a fail safe in here however. And that is that as you know all unlicensed spectrum has to go through a coordination process database where you go through by knowing nobodys there. If that 380 meters is insufficient in a particular area because of some rare equipment theyve got or whatever, that database can be adjusted to say, nope we cant do it here. So i think what weve done in regard to medical equipment is twofold. One, to expand the absolute blackout area, and two, then to have in there a flexible system that will reflect what reality is and shut down if there is a situation that would cause interference. In regard to your third question regarding tv blackouts and good faith negotiations, we intend to have an nprm out by september 4th as this committee has told us to do on that topic. And to be discussing exactly what are the full set of issues that should be involved in good faith. Uhhuh. Thank you congressman for the question. I embrace the fccs charge as given by congress. In fact, the first charge in the communications act, which is to make available so far as possible to all the people in the United States, rapid efficient, nationwide communications services. And in the digital age that increasingly as you know means broadband. I believe not only because im a son of Rural America whose parents currently live on the opposite side of the Digital Divide but seen it as a commissioner of this country. A few weeks ago i was in nebraska where i visited c and c processing, a Meat Processing plant 20 years ago was literally a twoperson operation. And now thanks to a broadband connection they export retail to every state in the country and around the world. Theyve exported wholesale so youre saying you disagree with what im saying is i embrace different policies to make sure broadband deployment is as wide and deep as possible. Ill leave the si man ticksemantics thank you, mr. Chairman. Commissioner wheeler, i want to thank you for your letter dealing with the spectrum auction and Small Businesses. We got it yesterday. And i may come back to you with a couple more questions on that. You know my concern. And i appreciate your responses. All right. I think we can all agree that we are for a successful spectrum auction. Everybody agree for that . Yes. Okay. Im so happy were all on the same page. Make your day, right . Lets talk about the steps. Commissioner, you were talking about some of the steps you thought were necessary. Lets back it up a little bit. I think when you look at the ctia report that came out, mr. Chairman, i want to submit that for the record if no one has put that in to the record. Without objection. Okay. I think that the prelude to a successful auction and to the steps you just articulated is to know how much spectrum that you have. And we know federal agencies are squatting on a lot of spectrum and that theyre not utilizing it. They are sitting on it just in case they think they might want to do something with it. And when you look at 13 years between the auction and the deployment, that is a lot of time you look at the increased usage were expecting, i think that it is dangerous to first of all not inventory and know exactly what youve got, so mr. Chairman, to you, have you inventoried the federal agencies . And do you know how much spectrum theyre squatting on and what you can recoup . First off, ms. Blackburn id like to identify with exactly what youre talking about. Okay. We share the same goals. Im so excited we agree on something. This is a good day. Well, this is a agreement as well. Good. When i was president of ctia, i happened to be the guy that negotiated the first deal with the government to repurpose Defense Department spectrum. Heres what i found as a way of answering your question about squatting. The core of engineers, for instance, said they were fully utilizing a piece of spectrum because once a month it took a reading on a dam level. Right. I dont think thats fully utilized. So the question we have to work through is how do you encourage federal agencies and all users, to think in terms of what is full application. So the answer is we know to your question, is we know who uses what spectrum. The specific use inside that spectrum however okay. Something that the licensee controls. Okay. I dont want to run out of time. Now, if you know who has how much spectrum, have you put this into one report . Mr. Pai, commissioner pai, have you seen a report that says this is how much that is out there . Could you quantify a number . I have not seen a particular report about how federal users are using the spectrum they have. And how much they have . And it would be very helpful to have that. I think it would too before we get too far down this road. What i would like to ask you to do is quantify this. And you and i know, all of us know, the way you can repack this and tighten it up, you can better utilize the spectrum. But these federal agency i got to tell you, weve just done an i. G. Report on wasteful spending. And not following what the i. G. Has asked them to do. Looking at four years of these i. G. Reports. If you dont force the issue, theyre not going to take the action. And spectrum is a very valuable commodity right now. And we cannot allow federal agencies through laziness or lack of creativity or lack of innovation to squat on this spectrum. So before we get too far afield with the 350 megahertz auction and further i would like for you to come back to us and say this is what each of these different departments has. And this is what theyre utilization is. And this is how we can pull that back and redeploy this into the marketplace and auction it. Because if we need a federal override for something, just like with the a. M. Band come back and do Something Like that but dont let them squat on this spectrum. Mr. Pai oh, my time has run out. I will come back for the second round. Yield back. All right gentle ladys time is expired. Now go to the gentleman from new jersey, mr. Pallone. Thank you mr. Chairman. Chairman wheeler i have three questions in three different areas. I want to try to get in. So im going to ask you to respond fairly quickly, if you can. You committed that the fcc would complete a proceeding by the end of this year to make our Wireless Networks more resilient. This deals with communications in emergencies. I want to thank you again for that commitment. Last week former commissioner aid el stein promised to work closely with the staff to restore new rules for Network Resiliency. Were approaching the heart of Hurricane Season and the third anniversary of sandys almost upon us, so what is the status of the fccs proceeding on Network Resiliency . So we are working with the industry on that, mr. Pallone. It is essential that a tower be able to stand up. I think we probably also have to address the backup power issue. Because if the tower is standing but theres no juice, its not worth anything. So these all fit together into a total package. And id be happy to do a more detailed response on that if you would like. Okay. If you do have something you could update us now through the chairman, i would like to maybe have a written response if we could. Without objection. All right. Thank you. Then the second question is with regard to designated entityiesentities, in my Opening Statement i mentioned i support your recent decision to modify the fccs designated entity rules. And since the rules have passed however, ive heard criticism the justice fcc closed some loopholes and not others. How do you respond to the critics that question these decisions . Oh, i think we have tightened up the rules substantially. And will be happy to discuss the specific ways in which we have done that. The key thing is also if you take a look at and ive got to be real careful about how i talk about this because it is a pending proceeding but if you look at what is currently on the record with regard to the d. E. S and their relationship with dish dish, we used a totality of circumstances test that had never been applied before to say we dont think that thats a good idea at a staff level. Thats coming to the commission. So, again, i have to rule on that so i wont go any further. But the fact of the matter is that we then took that totality of the circumstances and put it into the d. E. Rules in this rewrite we just did. So i think we have shown that there is a total picture you have to look at one and two, that we have whatever it takes to step up and blow the whistle and say thats not right. Okay. With regard to the incentive auction and Consumer Outreach as we head towards the incentive auction in the early part of next year, i become concerned about whether consumers will be prepared for the transition. In many ways this education effort will be even more difficult than the one we face with a digital tv transition because we dont have funding for Consumer Outreach this time. And well have to deal with a flash cut. So ive raised this issue with the National Association of broadcasters. And i can say that they committed to working with us to start planning and how best to reach out to consumers. My question is can you commit to working with us and the broadcasters to devise a comprehensive plan to ensure consumers will know what they need to do to continue to watch over the air tv . Yes, sir. Okay. You actually answered all this in four minutes so i will yield back the balance of my time. Well done. Chairman now recognizes gentleman from texas, mr. Barton, up next. Thank you mr. Chairman. And thank you and the Ranking Member for this hearing. Thank the two commissioners, chairman and commissioner pai for being here. I am one of the advocates for low Power Television. And as we all know they dont have any real standing in this repackaging of the spectrum if the main line broadcasters give it back. But they do have a product. They have provided valuable service to the country. And id like to see them helped in some way if at all possible. My question to both of you, ill start with the chairman and then commissioner pai, what can be done to ensure that we still have lowPower Television once this repackaging is complete . Thank you, mr. Barton. And id like to associate myself with this position you take. Low power is an important voice in the community and translators as well. I set up a special meeting with low Power Operators at the n. A. B. Last year Big Convention to make sure i was hearing from them and we were talking about it. I think there are multiple things we can do inside the statutory constraint you referenced. One is that we will help them find new channels after the move ing ing. We dont know which low power will be effectsed because we dont know what will happen in the auction. We have to sit in limbo and watch for that. But then even beyond that we are going to begin a rule making in which we will allow low power end translators to share a channel just like were allowing licensees, full power licensees to share a channel. And that will create that will take advantage of the benefits of digital and create another path. So you do see there will still be a role for low Power Television . Yes, sir. Commission pai. I share provides powerful service in texas, nebraska utah all across this country. Thats why i flagged almost three years ago to make sure within the con statutory restraints, especially in markets where we dont need spectrum to help them stay in business. My concern is however that certain of the policy cuts that we are on the brink of making might end up impairing lptv. And the vacant channel proceeding is one example of that where the fcc said if there is a vacant channel or two after the incentive auction well reserve those. Dont denigrate the importance of unlicensed but nonetheless this is the tv band were talking about. If lptv stations dont have a place to go, it seems to me we should do what we can to prioritize their staying in business. Thank you, with that mr. Chairman i yield back. Chair now recognizes gentle lady from california ms. Matsui for five minutes. Im just going by the list that your staff i was here well before the gavel. Ill give my two minutes i had a minute fiftyfive. Im just going by the list your staff provided. I dont want to get in the middle of this. Im going to yield to ms. Matsui. Im just going by your list. So go ahead ms. Matsui. Thank you very much. And mr. Doyle thank you very much too. Chairman wheeler, after next years incentive auction the fcc would have implemented the last auction congress identified in the 2012 spectrum act. Yet consumer demand for services rely on spectrum continues to explode. And we know it takes a long time for to plan any new spectrum auction. Mr. Chairman do you agree we need to create a spectrum pipeline for the next decade . Yes, maam. Okay. What do you think are the first steps for the policymakers to consider . Well, i think that you and mr. Guthrie have pointed a way towards that by providing some congressional oversight and encouragement in the process. As ms. Blackburn indicated the fcc has a role to say, okay, where are the current allocations. But then it goes to the executive branch to determine the allocation within the specific executive agencies. And to answer those questions. I would look forward to working with and we do have a good working relationship with ntia and to try and address these issues. And i think this is something that both ntia and the fcc can Work Together on. But i also need to be really candid and say that the kind of leadership that you and mr. Guthrie are showing this committee is showing, in keeping the spotlight on, in keeping the pressure on, is essential to paying attention to things downtown. Well, we intend to keep the spotlight on. So thank you. Congress tasked the fcc with balancing many priorities in the upcoming auction, unleashing spectrum for licensed mobile broadband, protecting consumers and createing new opportunities for unlicensed spectrum use. If done right the fcc can ensure that the incentive auction clears a significant amount of beach front spectrum needed to fuel our wireless economy while protecting over the air broadcasting. And preserving the chance for unlicensed innovation. I know a lot of concerns have been raised and that the fccs scheduled to make some key decisions as your august meeting. Chairman wheeler, what is the fcc doing to make sure stakeholders can feel confident in the incentive auction . Well, thank you, congresswoman. You know the challenge of the incentive auction is its like a very complex cross word puzzle except for the fact theres no picture on the front of the box, okay . Yeah. So what we have been trying to do is to make sure that of all the parties that are interested that they can walk away with a solution. It may not be what they have come in and asked for. And as a person who used to also go in and ask the fcc to do things my way on spectrum auctions, i know it doesnt always have to be that way. But you need to make sure that, for instance, as ms. Eshoo and i discuss for medical you have an answer all of these have to balance out. And i believe that the item that were bringing forward contains that kind of balance. What i like to tweak it here or tweak it there . Certainly. But you push here and something busts over here. And so i think that the spectrum auction team headed by gary ri epstein and Howard Simons have done an excellent job in wading through all of this. Okay. Im going to ask you are we on track to see the incentive auction successfully completed next year in a way that preserves the goals that congress intended . Yes, maam. Okay. Im a longtime advocate for modernization of the Lifeline Program. Broadband is a necessity whether its applying for a job growing a Small Business or parents helping their kids with homework. And i applaud the fcc for starting a rule making earlier this year to bring lifeline into the 21st century. Mr. Chairman, what are the next steps for lifeline reform . I hope that we will have a rule making to follow up on the proposed rule making as soon as comments and reply comments are closed and we can sift through them and move forward. But i think that and let me address an issue that commissioner pai was dealing with a moment ago. Broadband is the information pathway of the 21st century. And to deny access to that is to deny access to the 21st century. And i think we need to have policies that make sure that everyone in america has access to that essential pathway of the 21st century. I agree with you. Thank you very much. And i yield back. Chair now recognize the vice chair of the subcommittee chairman from ohio mr. Latta. Thank you very much, mr. Chairman. Commissioner pai, if i could start my questions with you. We all know that consumers are offered an array of video choices today and new internet delivered options are also complemented by the use of consumer apps and watch tv on mobile devices. As a result it seems more Online Entertainment options such as netflix and other over the top providers have transformed the marketplace. Let me ask these couple questions. With that said, commissioner, what is your assessment of the video marketplace . And can you remember a time when consumers had so much choice in that market . Congressman, thanks for the question. I cant think of a time when consumers Video Services have ever had it better. Having grown up in the era of three broadcast stations and no satellite and no cable, i can tell you now when i can power of crackle on my laptop wherever i want and whatever device i want its really a benefit. And i think thats part of the reason why i came out a couple weeks ago and said i dont think that the fcc needs to regulate socalled over the top video. And thats consistent with what the Digital Media association, which represents apple, amazon, pandora, sony, youtube and others said just last week. This is not a marketplace thats failed. Its thriving and lets leave well enough alone. So in your opinion, thats whats driving innovation . Absolutely. And thats one of the great things about the broadband revolution. All these Business Models are thriving because everyone can deliver these services over the internet. Lelt me follow up with this. Should the government be out there picking winners and losers in this space or trying to impose new technology mandates of potentially slow that innovation and limit that choice . Absolutely not. I think the worst thing the government could do would be to regulate either the entire marketplace or pick out particular Business Models for regulatory treatment that will distort the marketplace. Well never know which Business Model consumers would really prefer. Thank you. Turning to you, mr. Chairman if i may. You know, my district in northwest, westcentral ohio and youre kind of familiar with your days in ohio Large Community hospitals and other larger hospital associations in my district. And a number of these hospitals have expressed a very serious concern to the Commission Regarding the Technical Rules for the use of the channel 37 by unlicensed tv white spaces devices. Its already been decided that channel 37 would be available for use by unlicensed devices and part of the inventive auction proceedings, however terks u Technical Rules that provide or protect Wireless Medical Telemetry Service wmts assistance also allow for the safe use of the tv white spaces, devices have not been mutually agreed upon. Let me ask you, do you agree that because wireless devices could cause harmful interference to hospital operations and jeopardize Patient Safety is vitally important that all parties have the opportunity to work cooperatively to reach a consensus industry agreement on this issue before the commission considers it in the august open meeting . So i agree that there is a technological challenge that we have to make sure that we deal with. And i believe that we have a belt and suspenders approach to that. The belt is have a suspended approach to that. The belt is to say that 380 meters from such a site is a no go zone. Which is a tripling of where we were before. The trials theyve run in minnesota. The suspenders are also that the database database. That is the coordination database that must be used for licensed purposes. If there is a problem in Northern Ohio in a particular area. That information gets fed into the database, and that becomes a no fly zone much and so what weve put in place is hard rock and flexibility that is going to deliver the kind of security that i think that both you and we are looking for 37. Do they have dmuf time to get the information to your commission before the august meeting . Theres enough time . Were here on the 27th or 28th of july, were right at that point. They have just submitted to us Additional Information from these field tests it was based upon that we altered what our proposal is. This is not an issue that hasnt been being dealt with since you passed the spectrum act. This is something that has been going on for multiple years. Their tests were really helpful in that regard thats why we tried to make sure that we harmonize with the kinds of things they discovered in those tests. And provide the flexibility to move in and do something if there is an aberration. This goes to miss blackburns point about sharing. We want to create a structure that says you can deal with the statute told us to do that. That was a wise decision on your part, and were following through on that. I would like to submit from the record the American Hospital association association. The chair recognizes the gentleman from virginia. Im just kidding. Welcome. The commissioner was just listening to your Opening Statement where you were la meanting how you and commissioner oreilly have all these wonderful ideas that are met with no response or no. Were feeling your pain, its called being in the minority. Weve been informed by the folks that do the streaming if you could pull the microphone closer. The internet age, theyre not able to hear you as well. I know likely you are a strong advocate for a strong telecommunications marketplace. Youve been a great advocate in moving these long stalled issues forward. I have concerns about the special access proceeding. First, im concerned that the window for moving forward on special access reform is narrow ing particularly with the latest extension of the comment window. The fcc hasnt made the Data Available to the stakeholders. With the comment deadline looming. When will the stakeholders be able to access this data. I dont know the specific date we will announce a specific date. We can free form it here there have been multiple challenges with special access, that staut with the collection of data that was thwarted for years. We finally began to collect that data. In so far as we will make sure the data is on the record i share your interest in wanting to make sure we have an opportunity to address the special interest. It needs to be fact based. Can you give us any idea when you participate the commission taking action on the proceeding . Are we talking, is it going to be in my lifetime. I hope it is while were chairman. Its a shorter period in your lifetime. Let me ask you another thing. I also have concerns about the trigger for the spectrum reserve in the incentive auction. Weve been working hard to ensure this auction will enhance competition. And consumers will repeat the benefits of lower prices and greater innovation. To that end, what is the commission doing to address the concerns that many of us have in regard to the reserve trigger . Well, there the issue of let me be sure which trigger youre talking about. Are you triggering the assignment round issue . Or are you triggering the go ahead the reserve. The question then becomes are you going to cut back on the amount of bidding that goes on for reserve spectrum . We have taken the position that you should not. That first of all the reserve has been created. That in itself is a huge step that a lot of people on this committee degree with. Then the question becomes, do you want the auction to function through the whole process, or do you want to truncate it for a quicker trigger for this spectrum while the other spectrum auction keeps going. It seems to me what that ends up doing is reducing participation in the auction, it probably reduces the prices people will pay because it means that here in the reserve you know you stop while the bidding keeps going on up here in the unreserved. And i think an auction is something that proceeds to a conclusion. Not an auction that gets terminated to Favor One Party or another. And so the establishment of the reserve is a huge point. I think now we should not be doing is picking winners and losers inside that reserve. Thank you, mr. Chairman, ill yield back. The gentleman yields back. The chair now recognizes the gentleman from illinois. Welcome. You both agree that to facilitate broadband deployment is going to take usf reform, is that correct . Yes, sir. And commissioner pie, in your Opening Statement, you mentioned some principles can you restate those quickly for me . I caught a couple of them. With respect to his broadband plan. It would be targeted changes to our universal service rules, allowing carriers to get universal Service Support for the cost they incur currently that extends to Voice Service. Creating a voluntary path where rate of return carriers could get into a certain connect america fund. Obviously the model in that regard isnt perfect they should be given a limited window to be able to do that. These are all kind of rural questions for Rural Service. Its like a lot of the rural areas. So this is on this drop call issue still, i can go to some of my Family Owned Companies or the coops that i have out there and i think we talked about the last couple hearings weve been with, and the its the intermediary carrier ss they seem to be the problem. Companies get blamed. Its the intermediate carrier thats doing it, and it causes all sorts of problems. Yes and you put your finger on it its the intermediate carrier and its the failure on the part of the major carriers to police their subcontractors if you will. Weve done several things. First of all there used to be a game where it would give a false ring to pretend the call was completed it wasnt. Secondly, weve been enforcing this within the last few weeks we fined verizon 2 million and required them to do 3 million of additional improvements to stop this because in 26 rural areas they werent paying attention to this, its the heart of the problem. Its going to the intermediate carriers they need to be paying attention to. And thirdly is that we have a data survey out there right now, to try to identify exactly what the extent and other causes might be so that we can take additional action if warranted. We understand the call completion is a serious issue and we want to be all over it. Thats good. Because were going to the august break i know theyre going to come visit me during the break. Im glad i got a chance to ask the question. Last question, when it comes to the ip transition and the ability to upgrade technologies do all providers face a regulatory level Playing Field when it comes to making upgrades and provide their customers with the Newest Technology . I dont think they do, i think that some segments of the industry face no barrier to deciding to deploy next infrastructure. On the other hand another segment requires them to maintain the networks of yesterday, the copper based edm networks, every dollar they have to spend is by definition a dollar they cant spend deploying fiber that would allow them to compete with others. If we want to have more broadband competition lets have a level Playing Field. Every provider has the strongest possible incentive to deploy to that home. Ill just end on this im glad we talked prior, look forward to getting together with the Ranking Member. Theres always work to be done in this field. And i thank the gentleman, and were going to work on that how does the commission come up with what the amount of a fine is going to be. In one case, its 100 million you just mentioned 2 million, i mean, these are considerable sums. How do you do you have a set of rules around that . For some kinds of issues, such as lifeline there is a schedule fp for other ss, it is the totality of the circumstances kind of situation, where you make a judgment call. And youre the one that makes the call . Yes, maam. Times expired, we now go to the gentleman from vermont. Thank you very much, i thank both of you for joining us today. Chairman wheeler universal Service Really important issue, and i know youve been implementing some of that. What are you doing to make sure that Public Resources are being responsibly used . You can both answer that fp. Thank you, congressman, the commissioner and i share the belief that hes been talking about here in so far as the dichotomy of narrow band and broadband and that needs to be fixedp i think i go a little further in my approach. I have developed what i now started calling the walden rule. Because oh, please. Because i read the other day that you said, mr. Chairman that usf should spend money where no one else will spend. And that is a core principle. And as this committee has been telling us so often, you need to review what our rules are. Right. The fact that were spending money to subsidize the Telephone Company around disney world. Just because we always have doesnt make a lot of sense. The fact that we have no guidelines for operating expenses. We just had a man in hawaii go to jail for tax fraud. Hes a provider of a recipient of universal Service Rural universal service funds. It ended up that he was charging his families education expenses to universal service and the people were having to pay for it. We ought to have some standards for what is in optics. We ought to have some standards for what is in capex. I was just asked the other day to approve a waiver for universal Service Trial to a company that could not produce audited financial statements. Thats wrong. This isnt my money its the peoples money. We need to get it out. Thats why we are working together on a bipartisan package of reforms for how were going to deal with making sure that greater return carriers have what commissioner pie has called a two track solution. We have a model that deals with the new broadband realities, and we have a review of what the standards ought to be and were moving down that path. Thank you, mr. Chairman. You captured the sentiment perfectly, when it comes to broadband, Rural Service should be there, and be high quality, thats exactly why i have proposed this plan, to make sure that when it comes to Rural Americans, we dont leave them on a slow lane when it comes to broadband, we give them the exact same opportunity they would have whether in mont peel yore or new york city. Given the time frame we have committed to, which is to get this done by the end of the year, it would be better to embrace the approach congressman kramer and others have embraced, which is to have a solution to the standalone problem. There are abuses in the system that need to be corrected. And i standing and able to work with him and other commissioners to change that. We cant let the necessary and the perfect be the enemy of the good. Thank you very much. The other thing, lifeline, my view is that its a really important program. There is fraud and abuse. One of the things that happens around here is that out of frustration, when there is flawed and abuse. Sometimes we attack the existence of the braham rather than reform it. And i think where theres participate bipartisan agreement we want to limit what we can do. Thank you mr. Welch. Thats for both of you. Were going to have a rule making on lifeline hopefully before the year is out, it depends on the comments and everything that we receive. And it begins with overhaul. I mean, there are two problems with lifeline. One, it was designed wrong and two it was overseen wrong. It was other than that, everythings fine. But it was designed wrong. I mean, for instance and i must say, this was put in place by previous administration, which we have inherited. It is ridiculous to have the people who are benefiting from the receipt of the funds to certify that the folks getting them are the right folks. Its ridiculous that you not require those people who are receiving the funds to keep records. And on the administration side it is ridiculous that you not have a database for duplicates and that you not put structures in place to be able to what weve done since we came, in 25 reduction on expenditures on lifeline. 20 Million People who were inappropriately on it are no longer on it. And 100 Million Dollars in penalties. So weve done what we can to fix the oversight. What this rule making is going to do is continue that and fix the underlying rule propups. Thank you. My time is up i dont know if you want to let the commissioner identify anything . We have support the chairmans vision having a more fiscally responsible program. My problem is that we didnt adopt some of the more basic reforms. A targeting Broadband Adoption which is the critical issue we want these funds to help them go online. 34 of american households are eligible for the program. And so if were going to have modernize the program to target broadband, lets make sure we have fiscal responsibility measures in place, and target the help to people who really need it thats an important conversation to have. What about the eligibility database, where are you on that . The duplication database, we have in place an operational and its working quite well. In so far as the eligibility base, the issue is ourability to get access to data held by state agencies, principally, and were in the process of working our way through that. Thats something we need to get done obviously. Well go now to the gentleman from new jersey, mr. Lance for five minutes. Thank you mr. Chairman. Commissioner pi, i want to speak with you about the secs recent order regarding the tcpa. You stated in your dissent that the attempt to modernize it is likely to leave the American Consumer, not to mention American Enterprise worse off. Can you elaborate to the committee how you believe the commission may not have gotten this correct . And what it should have done to protect the American Consumer . Thank you, congressman for the question, i began from the premise that unwanted robo callers are a plague on the American Consumer. I dont want to get those calls, i know the chairman doesnt want to get them, nobody wants to get them. It takes us in the opposite direction, for one thing it exempted entire industries from the tcpa. The present pay phone industry can robo call you. It dramatically expanded the range of devices that are considered to be auto dealers if you use your smart phone to make a telephone call, its an auto dealer. Similarly, it opened the loopholes for reassigned numbers, there are 37 million numbers that are reassigned every single year. A lot of legitimate businesses have no reason to know if they have that number in stock, and they have the prior phone numbers owner, they have no reason to know that that number is reassigned. They can face tcpa liability. Those are the kinds of loopholes that are going to generate more litigation, its already become a flood. There are 14 class actions filed in 2008. Theres Something Like 1918. Were opening up a lot of these loopholes, at the same time, were not cracking down on the bad actors which are unwanted robo callers. We didnt create contrary to what i would have preferred, a degree to safe harbor for carriers to allow them to block foreign robo callers. We didnt take more aggressive enforcive measures despite the fact we got 95000 complaints last year for violation of the do not call registry. Weve had one citation from the Enforcement Bureau against the do not call registry of violators, thats unacceptable to me. Why do you think the commission did not have a safe harbor rule . Im not sure. I can tell you its created a tremendous unl certainty among the host of businesses that want to communicate Important Information. Everyone from restaurants to the Los Angeles Lakers have faced class action lawsuits for trying to communicate with people who have voluntarily communicated with them. Thank you, chairman. Thank you, mr. Lance. Several things. First of all, we want to make sure that let me just go down the commissioners list. We wanted to make sure that there were opportunities for if your doctor or a hospital needs to do something because of a medical emergency or your bank needs to contact you because of fraud or Something Like that, that there should be those kinds of exemptions and theyre not big loopholes. Secondly on the question of you get to make one mistake and discover that the lance phone has been transferred, you dont have to do this 3, 4 or hundreds of times as some people have. You can say, excuse me this is not the number. And just provide notification. Thirdly, the it was the congress that created the private right of action and that is something that is a decision that is out of our hands. But to your key point about the safe harbor and the carrier solution. Specifically we addressed that the carriers were saying to us we want what were afraid to offer blocking services, that because you might charge us with blocking costs doing just that. Which would be a violation of our rules. We amended the rules to say, no that is not a violation. And we have now had had a workshop coming up where were bringing the carriers and other affected parties in to sit down to say, okay, exactly how do you do it . Because how you handle a voip call is different from how you handle el a tdm call. How do you put those in place . This is something weve said to the carriers, our rules now specifically allow you to block calls where youre requested by consumers, please do. Any sur rebuttal . I would point out that the safe harbor wasnt given enough granularity to say the least if a carrier is willing to trust an agency thats more than willing to fine a company up to 100 million for the violation of rules that dont exist i would urge them not to rely on a safe harbor that doesnt provide much guidance at all. Youre not encouraging folks not to not block calls . Are we together on the fact that we want them to be blocking calls . On that we agree, which is precisely why i propose the Agency Create a detailed, specific guideline for how the safe harbor would operate. I dont want to send mixed messages. Oh, no, we cant do it. Thank you, my time has expired. Thank you for the rebuttal, the sur rebuttal. Feel free to call either of us at home if you want to followup. We have a prerecorded message well the committee will proceed to talk about this issue, as it relates to democracy. Well go now to mr. Lobsack from iowa for five minutes. I want to come back to one issue that was brought up and have you elaborate on that. Before i ask that specific question, i always like to talk about broad banned as you might imagine, both of you and just how important it is for places like iowa but not just places like iowa but all over the country. I know we have bipartisan support to make sure that we have rules in place to make sure we have programs in place incentives in place to expand that Broadband Availability to so many folks around the country. We know its an Economic Development issue, a health issue, when we talk about the spectrum, for example, issued for hospitals making sure that i heard from someone this morning making sure that they have the broadband available, make sure that they can do what they need to do for their patients. Its important for education i often talk about the university of iowa how they have a program where they offer ap classes, it doesnt do any good in those rural areas if those folks cannot access what the university of iowa offers, we know that farmers its very important for farmers to be able to have access to broadband so they can make decisions for planning and for their businesses in general. On and on and on. In centreville, iowa for one of my 24 town Hall Meetings on broadband, small town, there are 27 people at that meeting on a weekday afternoon at 2 00 in the afternoon, it is just so absolutely critical for them to be able to have this broadband coverage. Really my question goes back to what was already mentioned. Earlier this year, 115 members myself included wrote to you, mr. Wheeler, urging reform of the portion of the High Cost Program for small Rural Broadband providers so they could receive usf support for lines. Only broadband, rather than traditional Voice Service as is the current practice. Rural broadband industry submitted data to the fcc in 2013, the fcc has not yet acted on this plan. Are there issues proposed by the Rural Broadband industry that prevent the fcc from acting on it as proposed and if you could lab rate on that i would appreciate it. Thank you, congressman there are 114 different carriers in with a wash you represent the poster child of the rural challenge for rate of return carriers. And it is outrageous that, you know, if you are if you live in Rural America, youre 30 times more likely not to be able to get broadband as if you live in an urban area. There are two components, we recent ly recently released 10 billion to seven carriers to build their too sillties, i loveseeing the report that theyre going to spend 27 million to bring broad banned to this area, as a result of our fund ss then we go to the rate of return carriers. The challenge with rate of return carrier and how we deal with it the program has been in place for so long and the and the circumstances have changed over that period. As i say i agree strongly with commissioner pi that this by fur indication between narrow band and broadband doesnt make any sense. We have to do better than just slapping that band aid on we have to be seeing, how do we make sure that we can bring this whole program forward. How can we do that. And to try to reach a consensus because theres a couple rural carrier associations that dont agree with themselves, how do you do that. And we its encouraging, everyone has agreed on this two step this two pronged process i laid out a minute ago and i am optimistic that commissioner riley and clyburn and myself who are all working together to come up with a package proposal will be able to get this done and that well be able to live up to the commitment that we made in the other body to have it done by the end of the year. Thank you. The chair recognizes the gentleman from kentucky mr. Guthrie for five minutes. Thank you. My first question is for commissioner pi, its three parts. Why do you oppose putting broadcasters in the broadcast and why is it important to after the incentive auction . I can stop there why do you believe its preferable to put broadcast stations in the uplink rather than the down hitching . Why do you think such a hearing would be helpful . Thanks for the question, i was transcribes as quickly as i could. In terms of putting broadcasters in the gap, one of the things that the Wireless Industry and broadcasters and unlicensed advocates agree on is it placing them in a duplex gap would be a terrible idea. Wireless companies dont like it, s it,s broadcasters are told this is not optimal because the duplex gap is the only reserved spectrum for microphones. If you have a full broadcaster out there unlicensed devices will get drowned out. We need to do what the record suggests, and that is moving them somewhere other than the duplex gap, that begs the question, where do you put them theres not any question theres tremendous open significance putting them in down link, everyone carrying a smart phone now relies on download spectrum. Putting a broadcaster in the down link will so end up causing tremendous problems in terms of broadcast and wireless issues. Here the 700 megahertz options is a cautionary tale. Think about all the effort the commission had to deal with, because we had wireless carriers in the adjacent a block. Those issues took a long time to resolve resolve, and it was challenging. Here were talking about co chition to adjacent channel interference. Plus, remember broadcasters will be there permanently. This is not a problem well be able to work around this is why i would prefer, to place broadcasters if they have to be put in the wireless band to be placed in the uplink. They can minimize the amount of problems they would cause in terms of interference, you could just simply put a base station filter on, it would be easier. Everyone is caring around a mobil device and is always moving. One of the reasons i think it would be helpful, the commission has simply not made available enough data in terms of the simulations for the clearing scenarios, the data and assumptions, and weve heard from anybody from a licenseds advocate to broadcasters, we need more data and need to give you more meaningful input. Lets bring them all into a room lets have everybody participate. We the commissioners can have a fully informed discussion before we vote on august 6th or whenever it is to make sure the ban plan is right. The congress only gave us one chance to get it right, if we dont, the costco be substantial. Hopefully this is the last spectrum . Do you believe enough is being done to ensure theres a Long Term Strategy to make a spectrum available for use . Thanks for the question, i think consistent with what the chairman has said we need to make sure theres more spectrum in the pipeline, i look at the proliferation of broadband as a commissioner commissioner, how are we going to supply the spectrum that all these devices connected to the internet are going to need thats part of the reason why ive been interested in getting information out there. It would be helpful, you and congresswoman matsui have been leaders on that. Not being a i would like to identify with what you and congressman matsui are doing, if we get a chance id like to respond to your first question as well. I oath have nine seconds. I yield back. Thank you, mr. Chairman i thank our Ranking Member, i thank our panelists this afternoon for your updates regarding the agencys activeity activities. I have a few concerns i would like to have you address. One of them worries me a bit, what is not in your testimony how the commission will address continuing challenges and diversity and representation in the media, and telekom industries. We look at our nation and its diversity, and i think theres a widespread acknowledgement that what we see in terms of industry is really just not reflective of who we are as a country. Id like to ask, where is the commissions focus on the completion of the diversity studies. And how can this data be used to create a more new answered and tailored policy and reform that advance equity and inclusion and second to that is what metrics and accountability structures are in place to ensure that vulnerable populations in their communities will be adequately served through these proposals. Thank you very much, miss clark. The media report i have promised to the committee by the middle of next year will include a topic on diversity its been an issue that has caught previous reports. I think there is a couple things we can take theres a substantial increase in the number of broadcast license ease since i became chairman. In large part because of what we did on the jsa rules because because those rules were being used to keep opportunity away from entrepreneurs im proud of that effort. Secondly we all have to recognize its a point mr. Latta was raising an importance of how the Television Business is changing. And the opportunity that is reflerkted by over the top providers. And theres been a difference up here whether we ought to do what this committee did for direct broadcast satellite for over the top. That is to say that you cant hold content back you cant have various leverage points, over the top programming creates incredible new opportunities for minorities. And lastly, weve been talking a lot about the designated entity rules and the wireless auction. And i feel strongly what this Congress Asked us to do was creating opportunities for minorities, women and rural individuals. To participate in wireless. And thats what we did in the de rules and that the suggestions that have been made by my colleagues on the republican side actually would have limited the ability for real live des rather than hypothetical des to participate. On the subject of des. Ill have you respond as well. It appears weve probably cracked the code of one part of supporting Small Businesses how can the commission were you addressing that to i think that we need to make sure that the jsa rule was very helpful in that regard, and has performed as expected. You know we have made it clear that when broadcast licensees come in for transfer, and theyre complying with the rule, we will look favorably upon them selling those assets to minority entrepreneurs. And in fact that has been successful. Thank you chairman. Commissioner, ive run out of time, but hopefully we can get a response from you as well. Thank you. Right now for the record were going to keep moving forward, i think. Mr. Olson from texas, youre used for five minutes. I thank the chair, and welcome chairman wheeler and commissioner pi. Since ive been on the Commerce Committee since 2011. Consumer privacy has been a focus in the 112th and 111th congress, that work was done on the commerce manufacture inging subcommittee. They have jurisdiction. But theyve grabbed that authority to regulate the broadband isps, taking that from the ftc and now its with the fc krc now its under this committees jurisdiction. The good news is, you havent lost me. Im still with you. Folks back home want to know why, whats the problem with the ftc in broadband isps that forces change chairman wheeler one minute you respond to the comments. As you know, the ftc act says it does not have jurisdiction over telecommunications carriers, common carriers. And so when we said that isps were television carriers, it triggered that. We work closely with the ftc their jurisdiction as far as providers. Whatever we do which will be forthcoming in the next few months on our privacy proposals, we will do our best to harmonize so that there is a common common set. Unfortunately, the fccs reclassification of the Service Providers has a twofold hit. It deprived the ftc theyve explicitly been given information for. Secondly, because the fcc irrigated that issue for itself our authority under the statute is relatively circ um scribed. As you pointed out a pretty arcane piece of the puzzle if you will. We dont have any rules in place. The guidance that given out has been completely unhelpful. In may of this year the Enforcement Bureau says they should employ Privacy Protection s s. What does that mean . I have no idea. I have no idea. I would rather have let the experts who have protected consumers handle this issue based on law that you have given them. They have the expertise to handle these issues correct . The chairman talked another issue about privacy and edge providers the Consumer Interest Group filed a petition to ask you to oppose consumer Privacy Protections. When are we going to see your response do you believe providers should have a different standard of protection than isps . The commission has for decades been enforcing privacy on the telecommunications carriers. Its not as though we fell into this patch. Theres a long history of bravecy protection. In so far as extending our jurisdiction to the edge providers, i have said repeatedly that that is not our intention. I dont know when the specific response to that specific petition will be coming out. Ill be happen youpy to get you a date. I dont know what the planning process is i think this is part of the problem, when the fcc crossed this rubicon in february. If you believe the internet is a virtuous cycle. It would seem to follow logically then that if an edge provider is acting in an anticonsumer way, why shun the the fcc have the jurisdiction to extend those same rules. And moreover, if you look at the internet contact standard its not clear to me why the fcc should limit its focus providers. You can see them engaging in any competitive conduct. The fcc opened it up. I hope we dont follow that to its logical conclusion. Thank you both. I yield back the balance of my time. The chair recognizes the gentleman from illinois, mr. Rush for five minutes. I want to thank you for todays hearing. Mr. Chairman, commissioner pi i welcome both of you to todays hearing. I want to lift up one of the most troubling matters that is under the consideration of the fcc. I am referring to the prison phone call rates. I understand the fcc is poised to make a rule inging for prison phone calls thats it, mr. Chairman. We must stop this immoral practice of ever exploitation of the poor. The very one ss least able to perform this. Once and for all we must do away with the practice of Site Commission and we must cap in state phone rates. As you know, mr. Chairman the prison industry is a multibillion dollar business. And if theres any doubt, i want to call your attention to a recent Huffington Post article entitled prisoners pay to loved ones every year. This Company Wants even more you this article reference edd how companies in the prison phone call industry about its 404. 6 million future profits on the bat ends of the very same form as you know ive been fighting this issue for over a decade its now time for the fcc to take action, and reign in these predatory practices, by capping the rate at 5 cents per minute. And eliminating all ancillary fees. More importantly, the fcc must also get ahead of these predatory companies. Theyre right now trying to circumvent the laws by offer inging phone calls at the same predatory rate that they offer phone calls. Mr. Chairman my question is when will the fcc rule on this legalized telephonic terrorism . I agree this is a very sire yous issue. You and i can and people across america owe a huge debt of gratitude, who took this issue, have been sitting on the desk for ten years. And brought it forward so there was a decision about interstate. You know what happens, is that whackamole starts getting played here. Next month we have a decision on that on intrastate that were doing next month. The point that you make about video phones is another legitimate point. The reality here is that what were talking about is a monopoly that is granted to prison s prisons to determine how people communicate. Like any monopoly, it ends up being exploitive. And the people who who are hurt by that exploitation are the very people who rely on it. I can assure you sir that commissioner clyburn keeps our feet to the fire on this and im supportive of her efforts. I want to thats not news, mr. Chairman. And im just im just ap mettic about this situation. I dont know let me move on if i have no my time is up. My time has expired. Were going to do a second round of questions. If youre here well have time. Thank you, mr. Chairman, thanks to both of you for showing up today. In march we discussed Public Safety interference complaint responses and it resulted in a Quarterly Report which you thought was a good idea, i know you have derived some information, have you posted on the website so the public can see whats going on and what youre doing . Sure. You have . No, im saying would we . Should have. I cant answer that question specifically. If if you havent can you post that online as soon as possible . Theres been a lot of attention and concern regarding the designated entity option rules, do you believe theyre now correctly balanced and if if not, what should be done to fix them . I dont think they are, the agency has moved in the opposite direction the agency having loosened some of the restrictions that were imposed on a bipartisan basis several years ago, has now opened the door for large corporations to abuse the program and ironically enough, squeeze out a lot of the Small Businesses who need access to capital in order to provide facilities based service we saw that, where small carriers tried to compete, but they werent able to. They used Shell Companies to prevent them from bidding thats part of the reason why i proposed what i thought worked. If youre making in the upper eight figures you dont need a discount. If youre a Small Business with less than 15 million of revenue, you dont need bidding credits in order to get spectrum at an auction. You should be able to provide facilities based service, not simply flip your spectrum the minute the corporation is over. It fell one vote short. And all of those proposals have restored faith in the Small Business program. Thank you. In the open open internet. What steps have you taken to prevent such increases and what additional steps are expected . There is a proceeding underway that we started in the last 6, 8 weeks, Something Like that, and its to its designed to make sure that there is parody between Telecommunications Services and Cable Service attachment fees. Again can you continue to update us on this . Yes, sir. Appreciate it very much. All right, mr. Chairman, i yield back. Now well go to lets see mr. Johnson is next for five minutes. Thank you mr. Chairman chairman wheeler, in a recent response to questions for the record as to whether you think stakeholders who cannot afford to have regulatory lawyers or lobbyists in washington, d. C. , should also have the same access that other stakeholders have you made a point that the commission does not have funding for routine field hearings and similar activities. Yet youre emissary has been routinely traveling to various events, in fact it seems you both have been wheels up quite frequently in your travels. Let me pose the question this way, given that you apparently have a robust travel budget isnt the real issue how you elect to spend the money . Thank you congressman . I think the people i keep turning down saying im not going to cut talk would probably disagree. My travel is significantly list than other members of the commission, your point is a well taken point decisions get made, there is a travel budget that each commissioner has. And that is for his or her discretion. There is not it really is up to your discretion on how you spend the money, so could you let us know for the record how much the fcc has spent on travel in fy 2013 14 and 15 so far . Have. By commissioner . Yes. Id like to see that. I was listening closely to your discussion with my colleague regarding the designated Entity Program im really struggling a bit with commissioner wheeler ability and the facilities it requirements for a couple reasons. You made a compelling case that this sets the state for arbitrage. How are we going to prevent that from happening . What actions does the commission need to take to make sure that these rural small carriers are able to get the credits that the designated Entity Program was designed to give them, so that they can serve those underserved, unserved airs . Is. Thanks for the question i think we first need to return to the status quo before the most recent decision and we need to adopt some common sense reforms to make sure that large corporations dont gain the system again and to make sure the order did take some of these measures prohibiting a Single Corporation from using multiple bidders thats low hanging fruit thats prohibited by the criminal antitrust laws. Im talking about general rerm tos. The people who need the help, the people who want to serves folks in ohio or kansas can do that. And some of those reforms you know, adding to the amount of lending credits people can get. Large companies cant own large quantities of a de. So that people dont end up flipping all of the spectrum to the entrenched the majority agreed with me. I can tell you that its a real concern for me, and im sure other colleagues that represent rural areas of the country. Ive got High School Students that dont have access to Broadband Internet service. And as a result, they have to either go to a Public Library nearby or some other location. Maybe to where they can get a wireless signal or Something Like that to do their homework, to do research, to do that kind of thing. This is 2015, for crying out loud. A cody that one of the reasons that the facilities based requirement is so important is in a lot of cases business providers dont see the case in building out to that school or that area. Whereas a smaller rural provider who does want to connect those folks to the internet wirelessly have a strong incentive to make sure those folks are connected. When those rules providers are squeezed out and speculators can come in and take the spectrum and flip it to the big incumbents, that really does impact those consumers. Now to the gentleman from missouri, mr. Long, for five minutes. Thank you, mr. Chairman and to you all for being here today. Mr. Chairman chairman wheeler on july 24th four days ago, your agency announced that granted with conditions approval of the transfer of control licenses and authorization from directv to at t. We hear much about the 180day shop clock for reviewing such transfers, yet your agencys provisional grant of approval took over twice the amount of time, as youre well aware, over 400 days. Ive got some questions that id like to have answers to. Whats the point of the shot clock . The shot clock is aspirational to begin with, but its something we try to manage here. The difficulty in this situation was that we were hung up by a Court Proceeding and a Court Decision that itself took as long as the shot clock. And so we specifically dealt with the kind of information that we could have on the public record. And we had to get through that before we could get to the decision. Well, on the 170th day of the 180day shot clock, your agency stopped it for three months. Because of the Court Decision. Is that the same thing youre talking about . The Court Decision. The reality and there is right now pending before commissioner pai and thats not a setup question. I dont know the answer. On the protective order. I just saw it yesterday. So we have put out a an order for to outline how you protect confidential information so that we can be in compliance with the court, so that this will not happen again. And the absence of that was what held up this proceeding. Commissioner pai, do you have the same opinion on why the shot clock was stopped at the 170th day or what the benefit of the shot clock is . The agency inflicted a wound on itself which is why the court had to intervene. The court didnt simply add a cold clock to participate in the proceeding. What happened in the context of that transaction is the agency decided to try to get all kinds of confidential information from programmers and without any kind of due process. So the programmers naturally sued. I urged the agency to try to reach a settlement because this information wasnt really necessary to a resolution and unanimous d. C. Circuit of appeals agreed with me calling the fccs decision an unexplained and departure from policy. Even though they remanded it and said this is the road map to follow if you want this information, despite having said the information was critical, the agency didnt seek it or rely on it in making the decision. The shot clock needs to be more than aspirational. It needs to be a rule. Just as theres 24 seconds in the nba, there should be 180 days period for the fcc, with extensions for extenuating circumstances, but we need to give the public parties a lot of certainty as to how the fcc is going to do it. Ive got another question for chairman wheeler. Three days prior to your conditional grant of approval of the transfer control and license and authorization from directv to at t, the department of justice announced that after an extensive investigation it concluded the combination of at ts landbased internet video business with directv satellite based video business does not pose a significant risk to competition. Although the Justice Department closed its investigation without imposing any conditions, they agency announced they were imposing a number of conditions to address potential harms presented by the combination of at t and directv despite the Justice Departments views that the combination of the two video businesses did not pose a significant risk to competition. What significant risks did your agency identify that the Justice Department apparently missed . We worked closely with the Justice Department on this. I dont think there was a sliver of light between us. How can you say that . Because we have a different test. You have a what . A different test. They have an antitrust test that they face. We have a Public Interest test that we are supposed to measure by. So we have two different standards we measure to. And what was happening here was that in about 25 of the area, of at t service area, directv was a competitor to at t for video service. And so eliminating that competition, the question became, does that create an incentive then to eliminate broadband competition as well . So what we required was that at t expand its broadband coverage which increased competition for broadband by a significant amount and created an opportunity for those video providers not to have to go through an increasingly decreasing a decreasing choke point. You didnt think i was paying attention. We have a red light. My fiveminute shot clock has expired so ill be back for round two. The chair recognizes the gentleman from new york, mr. Collins. Mr. Wheeler, the big issue that ive been involved in as pirate radio which you may know and back in early june, pretty much every new york member of congress as well as jersey sent you a letter. And while the issue may not be a terrible issue in some parts of the country, it truly is in new york city as evidenced by not often you can get 27 members of new york to agree. Upstate and down state were like two different worlds. To sum it up, were extraordinarily disappointed the fcc has clearly said its not a priority. Weve got the letter just from you yesterday. And it and i understand budget concerns and i guess what im trying to the point i want to emphasize is this is an issue, even though its not to you, and you are the chairman, we really dont appreciate you saying that, as you put in here, the time and expense of pursuing these cases present particular difficulties in the current flat budget environment where the Commission Staffing is at its lowest point in 30 years. Overtime is less available so we must prioritize based on existing resources and harm to the public. Thus matters posing an imminent threat to Public Safety are directly harming large numbers of consumers must take precedence over other matters such as pirate radio. I understand what you are saying. But what is the size of your budget . Congressman, i that letter, and those particular words, which i wrote, were not designed to say that this is a low priority, but designed to say that first issue is Public Safety. Pirate radio has to exist inside that. And i believe that we have been very aggressive. So during my chairmanship weve had 200 private radio enforcements. In the last year weve had 100 alone. How many in new york . I dont know the exact number, but i would say 90 80 of those. And so what weve done is and commissioner oreilly, when he was meeting with the new york broadcasters focused on that. He helped us focus on that. We formed an inner Agency Working Group Task Force to work with the nab and the new york broadcasters on this issue. So you had that meeting and the fourth point that came out was basically that you need more folks in your local enforcement officer. Point number four of that hearing was additional fcc enforcement options. Right. That was one of the things. In another hearing we talked about how youve been reducing the local field offices and pulling those folks back to headquarters. And some of us would presume that to be ready to enforce title two which we can disagree on as well. Seems disingenuous and our big concern is words are words, actions are actions, and the actions have not convinced me and i think other members that it is at all a priority. Your letter, while it said maybe some day if weve got nothing else to, do well see what we might want to find in pirate radio. Its a low priority. If thats how you interpret it, i apologize because thats not what was meant. So the new york office, the Boston Office and miami office which is where pirate radio tends to exist, those three areas, this is a whackamole. This is a whackamole thats what pirate radio is. So one of the things that i encouraged in that letter is that congress can be helpful because we cant go we can go and shut somebody down and he or she moves to this spot, boom, and we are just constantly chasing. If congress could also enact, make it illegal to aid and abet the carrying out of this. I think thats also what the nab group has recommended. If we can get at those who are aiding and abetting because theres a that pulls this off. You move to my apartment here. Move to this base here. We didnt know anything about this. So there is a totality of the package here. 200 enforcements. A Task Force Working on it. We could use some additional authorities so we can have some teeth. Im about out of time. Two things. One is, maybe this is a rhetorical question. Ill ask it. Theres been suggestions that the fcc has actually directed field offices to step down and back away from enforcement. Any truth in that . I have heard that suggestion. I have not im going to put it right out here. I have heard that suggestion. I have not seen that command. It did not come from you . It did not come from me. Could you provide me the language that you might suggest because i can appreciate dont bring a problem without a solution, can you bring me the language we might have in for some other legislation that would assist you on the pirate radio issue . It is an important issue for us in new york, and we just dont want to be the last thing on friday afternoon at 4 59 somebody said i have one minute until i get home. Let me see what i can do on pirate radio. Yes, sir. Thank you. I yield back. The chair recognizes the gentleman from south dakota. Thank the chairman and the Ranking Member for suffering along with me as you wait for the last questioner. Thanks to both of you as well. And thank you commissioner pai for referencing the letter that 114 of my closest friends and i sent to the chairman and the fcc regarding stand alone and to both of you for addressing it so thoroughly today. I might just hone in a little bit on some of the finer points regarding the timeline. In the letter i received from you mr. Chairman yesterday, you often referred to a lack of consensus. There seems to be some consensus. You pledged that by the end of the year well solve this. But we need more consensus from stakeholders. As you both know, the community presented a plan in 2013. Modified somewhat over the last couple of years to meet moving targets. I might ask you commissioner pai, youve offered up, i think, your quote from your plan was simple amendments to existing rules as an outcome. One thing ive noticed around here and in regulatory bodies, having served on one, we can tend to complicate simple things. My goal is usually the opposite of that. Are there issues in the arlec plan that prevent this from Going Forward or prevent us from utilizing that as the model . Or are there other issues that could cause this to take so long that you know of . Thanks for the question and also for your kind words about my proposal which is modeled on your letter. I think stepping back 60,000 feet, the problem is basically this. There are a number of problems with a high cost fund. Problem a is stand alone Broadband Service. My position has been consistent with your letter and a companion letter, lets adopt targeted changes to the rules to make sure rate of return carriers arent penalized for offering broadband as a stand alone service. Thats not to say problems b, c, d, e arent important. But with the purposes of this issue, stand alone broadband lets get this piece done and turn to the other issues. The rate of return carriers, i appreciate the efforts to find that consensus. Its not necessary to resolve those issues to adopt a stand alone broadband issue. If we wait until a consensus, i fear well not meet the deadline we set for getting this done by the end of the year. Chairman, can we meet the end of year deadline . Is there a reason we cant meet that and are we attaching too many things to the simple solution . Those are the two right questions. I am trying to do that. It is my goal to do it. I expect to do it. A couple of points here. In order to do that, you cannot be wedded to consensus. As you know at some point in time, you have to pull up and shoot. Indeed. Boy, am i trying to get consensus. If you cant get everybody to agree, you have to put, and we will put forward a proposal on that in a timely basis in order to do things by the end of the year because at the root of this is weve got to do better for rural consumers, period. And its not just one simple fix. Its a broader set of fixes. Im in violent agreement on the narrow broadband issue. But its not enough. And then we also have a responsibility to those people who are paying for this every month in their phone bills to make sure the money is spent responsibly. And i hope we have consensus. Im working for consensus. If we cant have consensus, we need to have progress. There are other issues the fcc has taken up that i wish there had been more consensus on. I dont want consensus to mean 100 , as you might imagine. Shifting then with my remaining time. We spent time talking about the i was about to call it the voluntary auction. Thats what it used to be called. The word voluntary is how its often referred to because it is voluntary, both opting in and opting out. The 1. 75 billion that congress has put in for the repacking fund is probably not going to be enough considering were looking at 1100, maybe, tv stations that will have to involuntarily move. Is there a plan to deal with that shortfall that i can assure my rural north dakota broadcasters that they wont have to bear all the cost . Maybe commissioner pai first . I have long suggested we should treat the 1. 75 billion Relocation Fund as a budget and structure the auction in a way to minimize the possibility that wed exceed it and put the onus on broadcasters to pay up. The other issue that ive heard most recently in nebraska is that 36 months is not necessarily as long as it might seem. Theres a shortage of people able to do the work. A shortage of the equipment necessary for the repacking to be done, and that the commission should be mindful of that as well, as it progresses. So i share your concern and want to make sure broadcasters to the extent possible are held harmless in terms of necessary expenditures. Chairman, i i think hes identified the key issue. We have to live within a budget and manage things within a budget. You gave us that number. We cant change that number and we have to come up with a program that will make it work. Thank you both. If you hang around mr. Mr. Crame, were going to do a second round. You could be quick on the shot clock. Were going to go to the gentleman from new mexico for five. Thank you for being here. Its han honor to be here. Chairman wheeler commissioner pai, thank you for being here. I appreciate the testimony on rural access. As commissioner pai said, hes a rural guy. Im a rural guy. Chairman walden also represents a rural district. We talk about many parts of the country that need Broadband Access and affordability. You heard me say this many times, chairman wheeler. We can have connectivity at 30,000 feet when flying across the United States in an airplane. Theres no reason we cannot have connectivity when on the ground traveling all across america and Rural Communities travel communities and states like mine and new mexico. With that being said, in new mexico, for example, 77 of those living in Rural Communities and 89 in tribal communities lack access to advanced broadband. You have pursued an aggressive agenda that includes reforming the Erate Program, modernizing the life light program. And establishing the connect america plan. Can you discuss what this agenda means for those who lack sufficient access to broadband and Communication Services not just with buildout but making it more affordable so people are able to take advantage of it once theres a buildout. Thank you, congressman. I hope we can do significantly better than the speed delivering to the air. Thats what were doing. I have been in new mexico multiple times and tribal areas and very remote areas in new mexico to personally talk to the individuals involved. I remember a situation that there was a fiber going down this side of the road. A fiber underneath a reservation and over here about 100 yards away was a high school and up here was the library. And they couldnt get a connection from the fiber to the high school because it was cost prohibitive and the Erate Program wasnt paying for that. Now we pay for that. And thats in large part because of these kinds of specific examples weve seen. We need to make sure this is the case. We also need to make sure that lowincome individuals who are disproportionately represented in tribal areas have access to broadband support to connect them. And that is why we are not only overhauling but changing the orientation of the Lifeline Program to go to broadband. Chairman wheeler, in all these areas im going to submit some other questions into the record to flush these areas out. I appreciate the conversation weve had today and the focus in how we can grow the rural family and add attention there. The other place i want to compliment you both and get your perspective is on modernizing the fcc. Youve embarked on expanding electronic filing, decreasing backlogs and improving responsiveness to consumers. Can you tell me what you are doing to provide greater information to consumers, including improving transparency and accountability standardizing using forms, digitizing the process . Boy, am i glad you asked that question. Do you both support that effort . Yes . Commissioner pai . Yes. My first trip to our consumer operation in gettysburg i saw in the corner a humongous machine that the staff proudly announced could take 17 different forms and put them into one envelope. I said why are we sending out 17 different forms . And they said because thats the way we do it. So you contact the fcc on a robocall issue and we will send you the form for robocall as well as the form for loudness on commercials, as well as the form for every other kind of complaint. I said wait a minute. Those forms are required to be sent back. And i would talk to consumers who would say, what am i supposed to do with this . Which form am i supposed to use . We now have updated it, put it on the web. We just won a prize for being one of the best government sites, consumer interface sites on the web and most of all, were then taking that information and putting it back into what should we be doing to help us focus on our priorities. If theres other areas we can work on in this space, i look forward to having those conversations. If im able to because of the length of the line, i look forward to the second round. Indeed. Which were going to start now. So thank you. I want to go back to this issue of lptv and translators and maybe commissioner pai, chairman wheeler. Theres all this talk about set aside an entire channel for unlicensed and i support unlicensed. Weve made a lot of unlicensed available. Theres more to be done. Wont setting aside a whole channel for unlicensed contribute to the problem that were hearing from translators and lptv community . It will by definition to the extent a particular channel is allocated solely for unlicensed. That means an lptvs station cant occupy it, post auction. In reality, probably not because what were talking about here are using tv white spaces and creating these additional applications for unlicensed. In those areas where the duplex gap is not sufficient. And thats going to be a handful of areas that i doubt will be any areas that are the typical lptv rural kind of area. So will you commit to lptv and translators having priority then over unlicensed . No, were so it was really clear. In the tv band. The mandate from this committee is clear the mandate from this committee is theres no priorities given to lptv. And the Committee Also said, however, we need to be encouraging unlicensed. I dont think that it comes down to that kind of a solution though, mr. Chairman, with all due respect. I think it is possible in what we are just breaking our tails on is to be able to accomplish both of these and i think well be successful. I would say my recollection of the statute which we helped write here was the unlicensed was never set aside. As a priority to create a nationwide bad width. We had a lot of discussion about that very fact that you dont go clear all this and then give it away to some pretty major operators. Commissioner pai . This is part of the reason i suggested we adopt a technically sound solution as to where we put broadcasters. If we put them in the up link we avoid this. If we put them in the duplex we not only impair unlicensed you want to this is a really good point commissioner pai has raised. There is serious concern. Lets remember what were talking about here is how do we minimize the aggregate impact across the country . And that means that in a handful of markets, its a percentage that can be is in Single Digits that theres an issue. He is proposing that you put it in the in the up link. Put the interference in the up link. What that does is knock out an entire base station. The impact is much broader. I think you have disagreement with commissioner pai. I have to move along here. My concern is, there are a lot of i hear from my colleagues all over the west. There are concerns these translators are going to go dark because theyre going to get squished out. If they get squished out baz you created a whole band of unlicensed, that only adds to the problem. There is a Public Interest obligation underpinning all of this to provide for them. I realize they dont have all the rights and all that. I was a licensee of translators myself. I knew i could be pushed out. But through this youve got some flexibility here to manage. Thats, i guess, what were calling it. I want to switch gears and go to the tcpa issue because this issue of auto dialer has come up. In your order you adopted a broad definition of an auto dialer. Although you acknowledge, there are outer limits in the capacity to be an auto dialer and there must be more than a theoretical potential the equipment could be modified. Is my iphone an auto dialer . No, sir. There are at least three apps that we found, dial my calls, callbat automated calling, and voxlin voxling, that would turn my iphone into an auto dialer. So the issue we were trying to deal with in this order was not the hardware, but the impact because the since congress acted in 1991, the technology has changed. And what Congress Instructions to us were no contact from auto dialers without permission. But my question is, if i push somebodys name, chairman wheeler, i dont ever dial your number. I just push chairman wheeler and it dials. Is that an auto dialer . No, sir. If i have a database of names i want to reach out to, lets say voters, and i want to turn them out to vote and i have a device that calls until somebody answers and then i can take the call, is that an auto dialer . Yes. If i have a Teletown Hall in my office, which i do and theres some company that calls all those thousands in my district are they now limited in doing this . Unless the consumer has asked to give this. The statute is very explicit. Teletown halls by members of congress and most members do that are now all im doing is im asking you a question. No, sir. So those are prohinted and your contention is always have been . Yes, sir. Wow. Thats interesting. That will be news to a lot of people. Commissioner pai. Mr. Chairman, part of the reason it is indisputable a smartphone is an auto dialer is that if you look at the statute, is says capacity to randomly or sequentially dial a number. The smartphone has intrinsically the ability to do that. The majority rejected my argument saying you can download an app and effectively make it the smartphone an auto dialer even if it isnt intrinsically. Thats part of the reason why every Communications Device other than a rotary phone is now subject to tcpa liability as an auto dialer. Thats not good for anybody other than trial lawyers. Were hearing from others who are theres this issue with the Health Care Exchanges and whether or not Insurance Companies can follow up and notify you its time to come in and have some tests done. Ive been told that may be prohibited now. Are you aware of that . Are you hearing those . Thats the first ive heard of it. It doesnt surprise me. Weve seen from a number of Different Industries they are uncertain what the rules of the road are. Understand what we were doing was responding to a series of petitions. We did not issue a rule. People petitioned us and said what is the rule . You interpreted it. And so if somebody wants to petition us on the kinds of things you talk about, we can deal with that. On the Health Care Issue one we specifically had an exemption for being able to bank fraud, health care, things like this, and for government agencies. With changing technology, 40 of americans no longer have a land line. You spoke out and said pollsters could go the way of blacksmiths, i guess. They have been, right. My point is, so that industry in effect in terms of trying to do a random sample is now put out of business in effect, right . How do you do a random sample on a poll if you cant randomly sample and dial . I once sat down with peter hart to write a piece on that in so far as wireless because you cant have random you cant get to the wireless numbers. You dont know what they are. That went by the board. The issue here is, if you come to us and you say the statute says, which is does, is the only folks who are allowed to be called are those who want to be called. Got it. And im supposed to be a strict constructionalist of the statute. Weve seen some examples by the court where theyd disagree with your interpretation of statue on other issues. And you are constantly encouraging me to be a strict constructionalist. Were trying to understand the impact of your ruling. Ive gone way beyond my time. Ill defer to my colleague from california. Thank you, mr. Chairman. Its an important discussion. And i think that we need to we need to talk about this some more because its what went into the statute was like holding a mirror up to the country at that time. In 91. Thats a long time ago. Thats many, many moons ago when you think of generations of how many generations of Technology Changes have taken place. Whether someone wants to be a strict constructionist, we have to have the elasticity to stay up with the times. Each one of us represents 750,000 people. Maybe weve got to reach out to every single one of them if we possibly can. In my view, meeting with people relative to a telephone town hall meeting has been overwhelmingly embraced. Not just accepted but embraced by my constituents, plus it saves tons of money and they get to just ask whatever they want. So these are i dont think theyd be satisfied, this is what the statute says. I think theyd say change whatever you have to change but keep up with the changes that are taking place. Its important. Since were going into a second round and maybe its just the chairman and myself. Two others . Oh, good. I want to talk about your budget. The house appropriators have really screwed the fcc in plain english, in my view. And i dont think its funny. I think its serious. We had members asking questions today about travel budgets. I think that whatever you do and however you do it, it would be interesting to see if it tracks along with what how members of congress are allowed to handle their mra. I dont know, but it may be something for us to discuss. Now the fy appropriations bill has 315 million in it. That reflects a cut of 25 million below the fy 15 enacted level and 73 million below the request. Now they also have placed in writers that are relative to Net Neutrality and all of that. What id like to ask you, mr. Chairman, is have you had conversations with the appropriators . Is there anyone from the majority here thats been asked to lean in with the appropriators . Were constantly putting on the fcc and in oversight, all of these issues come up. I dont know who is going to do this work and follow up with every members request about what they want . You wanted a closed offices. Members said dont close them. We need them open. But there are so many things that are reliant on dollars and im not talking about having a load of extra dough. Im talking about the agency being able to carry out its responsibilities. So what id like to know is if youve had conversations with the appropriators on the majority side . Have you had conversations with the majority side here to see what can be worked out with the budget . I dont know, you know, these writers, the president is not going to sign Something Like that. And at the end of the day, i think the appropriations process is so messed up around here because we dont have regular order, speaking of transparency and process and all of that. Were going to end up with an omnibus bill. And if we and i think thats whats going to happen. So compare and contrast what your present budget is because an omnibus really doesnt really allow for that much more. And address for us any conversations or how youre following up what the appropriators did to the budget of your agency. Thank you, congresswoman. Weve had conversations with everybody who will listen and some who wont. They and i mean that only in a flippant remark. Im not saying people arent listening. Weve talked to this committee. I was honored the chairman came to the Appropriations Committee, which i think the first time ive ever known a chairman has ever come second time. I was there last year. I missed you. I was right behind you. Waving. So hes got a record for being there twice. Thats not the point. I want to know about the money. We have to live with the number that Congress Gives us. Its that simple. Have you in response to what the appropriators have done, and i dont know, mr. Chairman, were you there to support the appropriators in cutting the budget or against it . I was there to listen to the appropriator. Oh, you didnt testify . No. I was there to hear what they had to say. I see. Have you come up with you know what id like to ask you to do, two things. What you will be able to do with a budget that is reduced by 25 million. Yes, maam. And also and the top line things that you have to do. Weve got to move forward with the auction, with the voluntary auction and all the top line items, and also if we have an omnibus bill, what that does. And i look forward to reviewing that. I think it should be sent to everyone on the committee. Id like to see that. Were walking into something that i think the members of this subcommittee that have oversight responsibility are going to have to understand that we have to curb our appetite for giving the fcc assignments that if they dont have the dollars to carry them out, then they dont have the dollars to carry them out. Somethings going to go. Somethings going to go. One interesting thing, we are currently at the lowest number of fulltime employees in modern history for the agency. Thank you. Now to the gentleman from missouri, mr. Long. I was very impressed i got tofollow the chairman for the first time. Gr you hang around long enough. I felt like sally field, they really do like me. Then i looked around and nobody else was here. Its been reported the chief of the Enforcement Bureau has acknowledged many of his cases fall into the legal gray area where Companies Might not even realize they are doing anything wrong. I know youve raised concerns about this. Can you explain your concerns and what can be done to address them . Thanks for the question. Unfortunately many of the fccs more high profile initiatives have betrayed that basic principle of due process. Thats going back to the signing of the magna carta. And part of the reason ive been outspoken is if private actors from companies to individuals dont know the rules of conduct, then they have no way to know their conduct is violating what the fcc should be their rule. With respect to notices of certain liability the agency has issues its more a request for headlines first and then well figure out the law later if at all. We should look at the facts, look at what the law is. If theres a gap in the law, change it to make sure people are abiding by what we think is proper conduct. We cant saengz somebody for violating a rule they have no reason to know or dont know exists. Thank you. Chairman wheeler and commissioner pai, to the two of you, im curious about broadcasters Relocation Fund and how those moneys are going to be spent. The fund is at 1. 75 billion, as you know, and it was set to pay up for all the relocation costs of the broadcasts to move to a new channel as a part of the auction. Has the fcc determined how many stations it is able to repack with that 1. 75 billion fund . It is thank you, congressman. Its a moving target depending upon the characteristics of who participates in the auction. Do you have to move an antenna, build a taller antenna. How far do you have to move it . Can you give me a ballpark on the number . I can get back to you with one. I dont have one on the top of my head. What we have tried to do is develop a set of rules that can live inside of that and so let me get you the number we use for a denominator in that. I appreciate it. Commissioner pai, same question to you. Ive heard estimates it will cost north of 3 billion to relocate all broadcasters. If that figure is correct and we only have 1. 75 billion in the Relocation Fund, it necessarily follows broadcastered would be out of pocket for the extra 1. 25 billion. Thats something i hope to avoid and am willing to work with you and the chairman and my colleagues to make sure that doesnt happen. Any estimate on the number the 1. 75 billion, how many that would no, unfortunately, i dont. Ads as the chairman pointed out there are a lot of moving parts to this and every broadcaster is unique. Ive heard some figures and i have difficulty believing that 1. 75 billion will cover the estimated number that theyre talking about. If both of you can get back to me on that, i would appreciate it. Im going to yield back with 1 37 to go. Chair recognizes the gentleman from new mexico, mr. Lujan. Id like to associate myself with the questions that chairman walden was asking which appears to be our inability to reach out to the American People to be able to get feed back from them. Chairman wheeler, as we talk about the telephone town halls. When i travel to Rural Communities, one of the things i hear from members is we sometimes have to travel three or four hours to get to town centers. Not even city centers. How much they appreciate being able to weigh in. If the rule requires to opt into this program, how would we reach out to 700,000, 800,000 constituents for them to opt in . We cant send them an email because based on a 2015 press release from the fcc, only 48 of those making less than 25,000 have Broadband Service at home. And so if we cant reach out to them to opt in, do i send them a letter which is what the fcc is working against. You dont want to be sending letters and forms out to aupd in and check a box yes or no and then get the letter back in. I certainly hope we can look at this to see how to address this. Its something that i visited with chairman walden and Ranking Member eshoo about. I look forward to working with you on that as well. With that being said, just some additional questions about broadband penetration. Theres been a little bit of conversation today about broadband. And chairman pai, do you see broadband penetration or accessibility in rural parts to the country as a necessity or luxury . As i said earlier, my goal has been to make sure any american anywhere, whether its on a tribe in new mexico or somewhere in my home state of kansas, anyone who wants Digital Opportunity in terms of broadband connection should be able to get it. Ive laid out proposals on broadband, erate, five gigahertz spectrum to make sure we have competitors out there competing to provide every american with that opportunity. As far as the semantic classification, ill leave to wiser mind than myself. How would you characterize the importance of accessibility to broadband in rural parts of the country . I think its critical. Ive enjoyed traveling to small towns from nebraska to alaska to see how people have used broadband to get opportunities they otherwise wouldnt have. Ive seen in a lot of rural districts if people dont get that highspeed connection, theyll move somewhere else to another state or bigger city to get it. Thats unfortunate. There are a lot of ideas in Rural America that are withering on the vine for lack of that broadband connection. Thats something im passionate about. I would be more than happy to work with you. I would characterize it as a necessity, not a luxury. I appreciate you characterizing it as absolutely critical. Id agree with that assessment. With that, commissioner pai, as we look to the Lifeline Program as well and in the testimony that or your dissent to the 2015 order, in it there were some concerns associated with the cost to the program to date. And in your dissent you did recognize there have been some reforms that we look back to 2012. Understanding in 2005 and 2008 we saw a transformation that went from rotary, land lines and go into mobile phone and now smartphone apparatus. Since 2012 the commission came forward with a unanimous opinion which resulted in a reduction of 214 million in savings in 2012 with substantial projection going into 2014. Im trying to still get the numbers on what the realized savings were as well. In your dissent you listed a concern where there were providers that were signing people up fraudulently, which we need to crack down on and we share that concern. But in the 2015 order that you dissented, there was a reform in there that did state that we would that the fcc would remove the ability for providers to sign people up for verification. Is that something that would that principle is that something youd agree with and other areas you disagreed with in the issue but is that something you could agree with that we would work on together . Verification is one of the issues. One of the problems is the fact that fly by night operators like icon telecom in oklahoma, they just created socalled lifeline customers, got a lot of money for doing it and the ceo ended up pocketing 20 million and spent it on his own private expenses. Thats something we need to weed out. We need to reform the rules and have that conversation about having a fiscally responsible program. I appreciate the reforms the commission put in place. The last question i have is, is 1. 6 billion the right cap . You and i share a concern with Broadband Availability in communities. I would hope we both would agree its not just accessibility from an infrastructure. Its also an affordability question in many rural parts of the country. Whats the right number for a cap . Should it be arbitrary or based on data . I do believe it should be factbased. Thats part of the reason i suggested a cap or a budget of 1. 6 billion. The program was 800 million in 2009. Now 1. 6. Its the only one of the universal Service Fund Programs that isnt capped. What i suggested is we need to have a balance here. We need to make sure we target people that are offline and make sure that were responsible stewards of the consumer tax dollars. This is paid for by consumers. 1. 6 seems to be a good starting point. 1. 6 is based on last years numbers. The only data associated with the number is year to year, that number changes. Understanding that inflation from 2008 to 2012 was because reforms werent necessarily in place to help us back that number down. Mr. Chairman, this scenario where we can work on together as well. But i look forward to having more conversations in this space as well. Thank you for the time, mr. Chairman. We appreciate your participation. And that of our witnesses. Speaking of outdated data, just in closing, the quadrennial review i referenced in my Opening Statement, i think thats probably eight years old. I hope the commission will deal with the quadrennial ownership report. On a basis as required by statute. Modernization is still high on a number of our priorities. And on the dstack issue, we ask in stellar that the Commission Deal with the downloadable Security Issues and it appears that committee was given direction to work on disaggregation of data on a video stream. Again, were after the downloadable issue. I have one letter to put in the record from care payment. Without objection. You heard mr. Chairman, bipartisan concerns on tpca. Youre implementing the law. The law created in 1991 when you got charged for incoming phone calls. No one is talking about robocalls for cell phones but theres an issue we need to take a look at that law. Thank you for your diligence and patient and with that, subcommittee stands adjourned. The house currently in recess for a monthlong district work period. But the Senate Remains in session this week. Todays senators considering a bill that would diverse planned parenthood funds to other Womens Health organizations that do not provide abortions. A procedural vote set for 5 30 today. 60 votes are required for nersh to advance and as always, you can watch the senate live on cspan2. Later this evening, cspan is partnering with New Hampshire union and other media organizations from early primary states for the Voters First Forum with gop president ial cand candidates candidates. This is a look inside the event earlier today in manchester. Our live coverage begins at 6 30 eastern on cspan followed by the event itself at 7 00. And then your calls