Transcripts For CSPAN3 Politics And Public Policy Today 20240622

Secondary sanctions on foreign entities doing businesses with entities remain listed with terrorism and human rights issues. The problem is the laudable positions have not been made public and they are only effective if they are aggressively publicized and equally enforced. The fact is as u. S. Officials will concede in private conversations that the administration suffers from a trust deficit. Whether one believes this is deserved or not. It is there. And the fact is that not only are none of the positions listed just listed clear within the deal, the deal could easily be read as prohibiting each and every one of them. Failing to make these positions public not only undermines the utility, it makes people question whether the administrations intention is to act on those positions moving forward. Those are Critical Issues not open to interpretation under the iran deal. The task force issued the last statement identifying iran with a region which poses risk to the Financial System. They found that such ongoing and Money Laundering risks that the International Community must apply active what they call Counter Measures to protect themselves an the Financial System from irans illicit footba financial conduct. But now a journal contacted me asking me to read a article on what europe can do to protectively integrate them into the Financial System and one should forgive the editors thinking this should be the policy since it talked about refraining actions that could undermine trade and economic relations for iran. For years now u. S. Officials have pointed to the conduct and conduct brought upon sanctions aimed at countering said conduct. Todays irans conduct continues and if the conduct based consequences do not kick in, this could be the death nell of the sull cut. Designating a company here and there is not enough. What worked as making iran a jurisdiction due to the massive business and Reputational Risk inherent of doing business with iran. But at the very time we most need to be able to highlight the fact that iran is a risky jurisdiction with icgc controls the economy and human rights abuses are on the rise and support for military and others continue ub abated, we are denied the ability to discourage business with iran. The best we can do is delineate irans ongoing illicit conduct and remain there are secondary sanctions and maybe some Reputational Risk. The former secondary sanctions depends on the u. S. Follow through and the latter depends on how the rest of the International Community perceive risk in the wake of an iran deal that does not discourage but encourages business with iran. How effective will it be to highlight the role of the irg once they have been removed from the sanctions list. Banks can move back into the market but nonu. S. Companies are likely to trip over each other in a rush to enter the maskt which is been described in europe as a eldorado or potential bonanza. And we lose the chance of Multi Lateral sanctions. Under the deal, u. N. Sanctions disappear and what remains is u. S. Sanctions. To be sure u. S. Sanctions on deep proliveration conduct remain in place and would impact behavior of foreign banks and this puts the own us solely on the u. S. The deal is not a bilateral or a Multi Lateral one in fact and our partners should be expected to do their part holding iran in account for their acts. Thank you. Thank you for the opportunity to testify. Mr. Chairman, you have my testimony, ill just make four quick points. I served in the Bush Administration as undersecretary of state and had the pleasure to appear before your committee before and had lead responsibilities on iran. And i come to you as a supporter of this agreement. I think it has many benefits for our country and this is my first point it will effectively arrest the Forward Movement in Irans Nuclear program that began with ahmadinejads election ten years ago this summer and it will make sure that iran does not have the potential to produce fissile material for the Nuclear Weapons program for the next 1015 years. It will narrow the break out time as the last Panel Discussed from two to three months now to about a year. Theyll be significantly strengthened inspections of the Nuclear Supply chain for 25 years. And sanctions wont be lifted and this is important, this could take months, until iran complies with the letter of the agreement. The administration is rightly going to maintain sanctions on iran for terrorism and human rights violations. And a final advantage and it hasnt been discussed this morning is that we have an opportunity to stop iran from becoming a Nuclear Weapons power through diplomacy and negotiation without having to resort to war. I certainly believe any american president should use force should they get close to a nuclear weapon, that is not the case now. And i think both president obama and president bush before him thought that diplomacy should be tried first. I congratulation the administration on this accomplishment. Second point but there are risks here. Ive outlined some of the benefits but there are substantial risks and im mindful of them. And the most important is the superstructure of the iran program, the uranium and the plutonium will be in moth balls. It can be revived 1015 years from now when the restrictions begin to elapse. I expect the iranians two decades from now when want to reconstitute a program and they could build a Covert Program on that facility or behind that facility and that is going to be a problem for the United States at that time. Well have to reconstitute a sanctions regime that will not be impossible but i dont minimize the difficulty of doing that. I work with juan zarate in trying to establish that regime ten years ago. And finally, i would just like to say that the global embargoes on the iran conventional arms and the Ballistic Missile programs that will end in five and eight years respectively, i wish they had not been agreed to, the end of the embargo. I wish the administration had held the line. I wish we wouldnt be in a position to five and eat years from now of having to reconstitute sanctions programs an i think that is a compromise that should not have been made. Third point, mr. Chairman, if you the benefits if you weigh the benefits and the ri s risks, i think the benefits out weigh the risks. Because we are going to freeze this program for 1015 years. And if we get into a scene air yore where there is no deal, i think three things will happen. The Global Coalition weve build across the years across two administrations will weaken. The sanctions regime wont end immediately. The United States wont end the sanctions but it will atrophy and most importantly the iranians will not feel constrained to abide by the restrictions that under secretary sherman and kerry negotiated, they are unfettered and unshackled to become a Nuclear Threshold state again and i think that would be a weakening of american strategic interest. I do think that sometimes were too caught up in the conventional wisdoms in this debate and just two quick examples i think are real vant, mr. Chairman. I dont believe the congressional defeat of this nublt deal nuclear deal will lead inevitably to war. I dont think that is right. I think iran would we careful to become a threshold state but not to cross the line. But neither do i believe that it leds to an Iranian Nuclear weapon. A lot will depend on what we do. Not so much president obama, but the next president an the president after that. And i think that is what congress should be thinking about. How do we strengthen americas Strategic Policy in the middle east to deter the iranians as we implement the nuclear deal. The president is giving a speech at this hour at the american university. I hope what he is saying there is that were going to close the big gap right now between the United States and israel and assure israels military edge. And i assume hes saying that ptd and that we and that we can continue i think successfully this week, we should say the american president should say that he would use force against iran should it get close to a nuclear weapon, should it violate this deal. There are things i think that both democrats and republicans here on capitol hill can agree to. Perhaps in an accompanied statement to the nuclear deal to strengthen on a bipartisan basis americas policy in the middle east. So mr. Chairman, i support this agreement. Would you hope that congress would approve this agreement and not and strengthen the ability of our country to move ahead, both to pursue the nuclear deal and contain iranian power in the middle east in the process. Thank you. Thank you. I have a few questions mr. Zarate. Secondary sanctions, are sanctions, as i understand, that place restrictions not directly on iran but on those who would deal with iranian entities. I will pose this question to you and mr. Dubo witz. Even if the europeans and others were to completely completely lift restrictions on dealings with iran, would u. S. Secondary sanctions still keep Major Global Companies from doing business in and with iran . U. S. Second air sanctions which would apply to third Country Nationals and companies, it has enormous impact in reach and does effect what kurns do and what the companies decide to invest in. So i think the general answer is yes, it depends on the environment, depends on the nature of the secondary sanctions, whether or not they are deemed to be legitimate, whether or not they are conduct based which is how the efforts have really worked and pinched the iranians and it would depend on the sense of enforcement of those sanctions. If there is a sense that these are sanctions on the books only, and are not going to be expanded, arent going to be enforced, then they wont work. Part of the effectiveness over the past ten years has been not only as a sanctions regime been put in place but they have been enforced and led by the u. S. And the u. S. Alone. I think we have to keep that [ inaudible ]. That is right. I agree. And if Congress Overwhelmingly agree and i dont think companies are rushing back in any way. I think they have deep concerns over counterparty risk and dooing business with the revolutionary guard and they have deep concerns over Political Risk as who the next president and undersecretary of the treasury is and how vigorously we enforce. If congress were to disapprove the deal, even more reason they wouldnt rush and that would expend the amount of extend the amount of time to reenter the market. So congressional disapproval i dont think will lead to the collapse of the sanctions. As mr. Zarate has said, the power of u. S. Second air sanctions are going to make major Financial Institutions and companies receiticent entering market whether you approve or dont approve the deal. And the risk to the Financial System integrity and the threat to the u. S. Financial action is a concern to this committee. We found iran to present grave risk to the Financial System due to lack of Money Laundering safeguards and the involvement of iranian banks in supporting terrorism. Is there, sir, is there reason to believe that the problems that gave rise to this Task Force Designation will go away any time soon and is it safe for nonu. S. Persons and entities to do business with iranian banks . Would you explain . Thank you for the question, chairman. It is a very simple answer to the question no. Those risks are not going away. And fatah is talking about Money Laundering and financial risks. It has nothing to do with proliferation. All of the warnings are in full force. This is just from the end of june. The next report will be issued in october. And it is very important that the administration claims that it will and it should be held to going around and explaining to people these risks exist. The problem is that how the world interprets risk is going to change. When it is just the United States, the first instance, secondary sanctions apply if you want to have business here. If you are a Small Company that doesnt want to, if you can find an Iranian Company that is doing this arms length business with the rtc, but when these entities come off the e. U. List and the fishu created between the union, they dont believe these are listable entities and the e. U. Does and there is some risk. How long, the five years, eight years, the full 20 years and nobody can answer that question because it is changing the nature of risk. It is no longer a consensus. Mr. Dubo witz, the pathway to a bomb, that is what we all underlying here thinking, and in your testimony you testified how the agreement is fundamentally flawed because even if iran abides by the deal, which none of us believe it will, it can open and expand each path way to a bomb that the agreement seeks to shut down. Could you describe briefly here today how this would work and what sanction tools a future u. S. President would have to stop iran from achieving a pathway to a bomb . Thank you, chairman shelby. So under the agreement, because of the sunset clauses, the Ballistic Missile program, the access to heavy weaponry, they go away year five and then year eight, and 8 1 2 they can go centrifuge r d and put facility news the luttance facility and after 15 years iran can enrich uranium to 60 . We heard from undersecretary today and 60 is as close to weapons grade as you can get. They can legally build multiple lat anza and fordows all over the country. So what that implies is a patient multi path way to a bomb. Both in a nattance and a fordow path way. And the second part of the question is what do you do about that . When iran has near zero breakout at a easier clandestine sneak out in an icbm program, in terms of sanctions, there is nothing you can do about it. The sanctions tool is gone and at that point you have to face a bi binary choice, you accept you have a Nuclear Threshold iran with unlimited enrichment capacity and multiple heavy water reactors and the capability to build a bomb very, very quickly or you use military force to for stall that kind of breakout or sfeekout. We will not have a peaceful option left and iran will be much nor stronger and the consequences to American Security will be much more grave. I will pose this question for all of you, as i mentioned in my Opening Statement, sanctions are a crucial tool of u. S. Policy, im concerned that the u. S. Government is not taking maximum advantage of this tool. Is any part of the u. S. Government tasked with a long range strategic sanctions planning and is anyone within the u. S. Government tasked with doing Contingency Planning for sanctions equivalent to what the pentagon does with operational plans and what improvements could we make in those kind of matters . Well start with you, mr. Zarate. Mr. Chairman, we established when i was at the treasurer, the office of terrorism and Financial Intelligence, led by adam szubin and that is the war commend for financial power and tools. There is a question though as to whether or not wire doing were doing enough in the preservation of the tools and the use in other context and the use of tools by the chinese and the russians to not only extend their reach but to also exploit our vulnerabilities. So i would say that that responsibility lies largely with the office of terrorism and Financial Intelligence at the Treasury Department in concert with the Intelligence Department and in concert with others and that perhaps we need to be more gressive and forwardleaning in terms of the power. One of my concerns with the deal is it is not clear that weve considered fully the longterm implications for the use of our power in this regard. Chairman shelby, a simple answer, i would ask under secretary szubin, who is incredibly talented professional, to provide you the 1015 year contingency plan for use the economic sanctions against iran when had has no breakout and sneak out and unlimited sneak out capacity. That plan should be in place today. Because of the smet pro sun set provisions well lose our power and that plan should be used today and disclosed to your committee. Dr. Levitt. Ill echo what juan said in particular. I used to be the deputy secretary assistant, and it had the ability to interact with the Intelligence Community is quite vigorous. We were both there within tfi, we would have the Strategic Planning meetings for the things we were dealing with then and i believe and certainly hope they are having these type of meetings now. What is unclear is just how far over the horizon the strategic conversations are going. And whether or not were taking into consideration the Immediate Impact of this deal on the longterm efficacy of our u. S. Sanctions architecture. Sanctions are a tool to be used to reach goals. We shouldnt do this to say we want to use sanctions forever but well always have goals we want to reach for which sanctions could be a useful tool and therefore it is critically important to maintain that tool as viable and effective. And ill ask all of you this question. But mr. Ambassador burns first. I want to answer your question first. Sure. Thank you so much. I would say that the most important thing for us, the United States, is to have effective treasury, state and white house cooperation on what we are trying to do with sanctions and persist over the longterm first. Second, we have to marry what we do with our allies around the world and i think that is the problem. If Congress Disapproves the deal and we walk away, we lose the potency of the sanctions. And third, i say objectively, i cant speak objectively about the Bush Administration because i was part of it. But i think president bush and obama have effectively pursued a sanctions regime against the iranians which is why were here today. They submitted to the negotiations and the deal has been made. Thank you. Ill ask that question to you, i ask it earlier to each one of you, do you believe that any agreement with iran, can you trust iran . Do you trust iran not to cheat, if they get a chance . Mr. Chairman, i served in the white house as the deputy adviser for terrorism so i watch lethal activity against our own troops and civilians around the world. So do i trust iran absolutely not. And this is precisely why any deal of any sort, whether it is this jcpoa has to have effective enforcement and tools that deal with the other risks which will go up because of an enriched regime in tehran. So i dont think weve done that. I dont think the deal has that in mind. And i havent heard from the administration a plan to deal with those increased risks and that is a real challenge with the reasonableeem in tehran. Mr. Chairman. Dont trust iran. And i was struck today, my jaw dropped when undersecretary sherman admitted well not have physical access to all military sites. Because this deal is a bet on the iaea. This deal is a bet on verification and inspection. This deal is a fundamental existential bet that well be able to go anywhere, any time, into military sites. The iranians have been saying for years now, well not allow the United States or the iaea into our military sites. And if we cant get physical access, boots on the ground access into all military sites, and im deeply concerned about the efficacy of the verification inspection regime and therefore we agree we dont trust iran but if we dont trust our own inspection regime, i think we have a serious problem. Me too. Dr. Levitt. We can expect iran to conduct in nefarious activity more tomorrow than today. Beyond that we cannot respect them in and out of government. The verification regime is important. And as mark laid out there are holes big enough to drive a truck through. The question isnt so much is it fair that the people who have a vote dont get to read the iaea agreements and others did and the question is why was that agreed to . It is absolutely true that we in the United States want the provisions made kept a secret so our office isnt made public either but why was that agreed to in the deal and that is what i dont understand and the question is how trong the verification tools will be, not the 24 7 var quickation of declared sites but the ones where the real work is happening. You remember the reagan said the soviets trust but verify and i think of the raubans we say dont trust and do verify. And i think everybody agrees with that. And if this agreement is implemented and two or three years down the road we suspect there are covert facilities and if the iranians deny after this managed inspection process deny access, theyll be in violation of the deal. And so in that eventuality and it may not be what he was talking about directly, well have a way forward to press the iranians. Senator brown. Thank you. Thank you mr. Chairman. Especially to mr. Zarate and to ambassador burns, thank you for the work you did. I think neither you two nor secretary clinton or secretary kerry or president obama or bush get the credit for weaving together the six countries in a p5 1 against all odds and holding them together in the sanctions and i think the historical concept and the diplomatic maneuvers you made we should thank you for and this should be the historical cob text to all of that and so thank you. And ambassador burns you said you do not see a more effective or realistic alternative to give the u. S. A greater possibility at this point of preventing an Iranian Nuclear weapon. You then said if Congress Rejects this agreement, you mentioned Global Coalition would weaken, sanctions would atrophy and shackles on iran i ksht remember if you said undone or loosen. Talk to us, if you would, what would happen if we respect this and especially in light of what our p5 1 allies would do, what their reaction would be and what about other countries in europe and asia notably japan and india and italy, what their reactions might be. Thank you, senator. I do think that the framework for members one of the questions that members have to ask and we all do too is, is there a credible alternative. I think this is not a perfect deal but i dont see one right now. Because if you work through the logic train, if Congress Defeats the president and the United States cannot implement the deal and not remove the sanctions and get the benefit of iran complying, then i think a couple of things happen. Number one, part of the value of the sanctions regime has been the countries that you mentioned, not just the e. U. But in finally, after a lot of work complying and japan and south korea and the other Major Trading partners, some of the banks arent going to go back and do business but some of the corporations in those countries will and i think well begin the regime will begin to bleed. The political unit weve had. And it is very powerful when you have well over 170 countries sanctioning iran politically. So that is the first thing that will go. The second, i think the europeans will be in an extraordinarily difficult place. All of the prime ministers in Parliament Support the deal and they support the deal, the governments do. And so they dont want to hurt the United States if we cant implement the deal and ask them not to move forward but i dont think there be unity in the e. U. They will have to reauthorize the use of sanctions. I can think of three or four that dont want to reauthorize, the weaker countries and the ones closer to russia and the russians will love to embarrass the United States. And that is a big problem. The biggest problem in congress defeating the president this deal wont go into effect and iran will be unfettered and unshackled and wont have the restrictions that the deal promises in the next ten or 15 years and it wont be a frozen country in terms of the nuclear capacity, it will be a Nuclear Threshold state again, so if i weigh the it is hard to say exactly what would happen because were talking about hypotheticals. I dont want to be too doctrine air. I think this would be a messy situation. But ultimately the iranians would be strengthened and we would be weakened in the long range struggle we are in with them. We are competing for power in the middle east. We need to win over the next 2025 years and despite my misgivings about part of the deal and i enumerated that, i think what we get is we stop them for the next 10 or 15 years and for me that means a lot and that is why i support the deal. I think when we have people on the other side, and those on the committee, we all agree that the military option should be available. And you mentioned that in your testimony. What when you said that you said that we should provide a more concrete assurance that the u. S. Will take military action, what did you mean by that . Should the president say that again . Should the president ial candidates, want to be the next candidate, make that clear. Is that something we do now or reiterate in the next 18 months, what do you mean by that. What i meant is that the United States needs to have strategic intimidation of iran and it needs to be credible. It cant be credible if they dont think we mean what we say and this will have to be for president obama and his successor and the successors successor over the next 25 years. So i would hope that every president ial candidate of both parties and most pertinently president obama would say unequivocally and unambiguously if iran bolts from the agreement and violates it in a fundamental way and we see iran racing toward a nuclear weapon, we have a little bit of time to react, that the United States president would use force to prevent that from happening. Would wouldnt resolve the entire problem. It would knock them back a couple of years if we bomb nat ans and furdo. And at some point we have would have we would have to another negotiation down the line. But i can not see the United States succeeding in containing iran if were not willing to use force and be credible about it. And i say this with the greatest respect because i respect president obama of course, i think he needs to say that. In the middle of the debate to reassure the congress and the American People and reassure people like me that that is a credible threat of force. And havent seen the speech that he just said and perhaps he said it in that speech. One question for mr. Levitt, you describe in your testimony that major secondary Bank Sanctions will be retabed under the agreement and you note that is a good thing. If congress does not reject the deal, are there ways that the treasury should be using the Bank Sanctions in a more robust way to mitigate the problems youve identified with the deal . Thank you for the question. The secondary sanctions as weve said are very powerful. The second sanctions would remain on the nonproliferation entities and it is not the kicker for everything and it is not the case that a particular bank was only involved in proliferation or intelligence. So it is difficult to show that an entity is engaged in activities related just to terrorism and then a question of political will as mark said, if you have Something Like the central bank of iran, will there be the waill to put forward sanctions on the major entities or smaller ones if we think that might annoy the iranians. It will deter the major Financial Institutions and some corporations from doing business in iran, at least for a period of time. The banks probably for a long period of time, that is for sure. But by virtue of it limited to certain times of little listity activity, were no longer talking about iran as a risky jurisdiction, when it is becoming an even more risky jurisdiction. And that tool kit, which was in some ways the most effective, not the formal sanctions of any kind but the informal sanctions that brought to bear the reputational and business risks, those are going to begin to fade very, very quickly. Thank you mr. Chairman. Thank you. [ inaudible ]. About 290 american citizens [ inaudible ]. This listed and it covers 40 states, including 24 people from new york, 22 people from florida, 14 people from ohio, and 13 from my home state of illinois. In this list if we deliver over 100 billion to iran, what do you suspect will happen with regard to the death toll of americans against iranian chair. Mr. Chairman, can i interrupt, we have a habit of doing this in this committee. Can you give us the source of this list in. This is mainly the u. S. Marines killed in 1983. The u. S. Marines killed in 1983. The 241 marines killed there. At the lab an hes this was in lebanon. Thank you. Senator, it is wellknown who the victims of iranian terrorism are. There are multiple lawsuits. And outstanding judgments. A Group Representing u. S. Viengts of terrorism just filed an in junction in a u. S. Court to block the administration from giving 100 billion back to iran and so i think that the purpose of that injunction senator kirk is to actually prevent future victims of iranian terrorism. I find it quite surprising that we havent required the iranians to satisfy the judgments for past victims of terrorism and yet were willing to give them billions of dollars to fund what everybody agrees would be future acts of terrorism against americans and others. I would also note one own thick senator kirk, i did some research into this and we talk about where the money will be spent in terms of syria and hezbollah and hamas, and people have said that it is not a lot of money, it is lowcost and lowtech but i looked into the rauban budget for 2015. The icgc and the kuds ford will get 6. 4 billion. And the president rowhani is anticipated the sanctions relief in his budget and that represents 65 of the total represent budget of iran and 10 of the total public budget. So the iranians will spend 10 of the total public budget supporting the revolutionary guards ant the quds force who are primarily responsible for acts of terrorism. It gives you a sense of where the Iranian Regime is highlighting its own priorities. If i could follow up i got a second okay. Senator, i just wanted to add to that if i could, for just a moment. It does strike me as odd that we have assumed as a country that the cost of the deal is simply that the money will flow back to iran in an unfettered and uncontrolled way and were doing nothing in the immediate term with the real risk that terrorism finance will flow flu the revolutionary guard core, the mois and the quds force. And it is odd that we slug our shrug our shoulders that this is the cost of the deal. And i dont think it should be. And it is remarkable that the administration has described the walkaway plan here as if were the isolated party internationally when in fact the iranians continue to engage in a whole range of illicit conduct. When we entered into the negotiations with iran completely isolated, with the own us on iran to prove the bonafides, and suddenly were told at the moment of fruition if we dont accept a deal, we are the isolated party internationally. That is a remarkable turn of the tables. And i just dont think the cost of the deal as described is acceptable and we should be mitigating against that and there are ways of doing that and i havent heard that from the administration. Ambassador. Senator kirk, i want to thank you for your first chart. In my written testimony i said one of the issues we have to press the iranians on now is the marines that they killed in 1983, the American Embassy personnel who died in 1983. Malcolm kerr, gunned down in beirut in 1984 at the ins gags of iran. It is one of the issues we have to pursue and some of the issues are in federal court where mesh citizens have sued the iranian government and they deserve justice. I wouldnt advise making this on the nuclear deal but making it conditional on any presumption of negotiations with iran in the future and we can contain the problem of iran in they are nonnuclear than a Nuclear Weapons power and that is another reason why i support the agreement. Dr. Levitt if i may. To follow up on the last question and partially answering this one. Breaking apart proliferation sanctions doesnt work. Last year david cohen under secretary of the treasury and Deputy Director of the cia touted the collateral counterterrorism benefit of counter proliferation sanctions targeting irans banking and oil sectors. And i quote, in fact, the success of our unprecedented irans sanctions regime, including the sanctions on iran and the ability to sell the oil has Fund Terrorism groups such as hezbollah. That will no longer be the case. Senator kirk. Mr. Chairman, i wanted to go through the chart to show you that the the estimates of the Congressional Research service on what irans notional terror budget is. We, according to crs, their support for hezbollah is about 100 million to 200 million per year and support for hamas is tens of millions of dollars per year. Support for the assad regime in syria is 16 billion to 15 billion per year. Support for the rebels in yemen, tens of millions of dollars per year. The key question, when you add it all up, it is between 6 billion to 16 billion as a state sponsor of terror. The key question to follow up is should they get 100 billion in sanctions relief. And what would become of the situation and on internet terrorism front . Go ahead. They would be enriched,en boldened, add to the budget theyve already allocated for these groups. These groups, hearing from them directly, the secretary from hezbollah, expects more support from the iranians. So i think we should take the iranians and their proxies at their word. They are going to profit from this deal and we have to do things to mitigate the risk of that if this deal moves forward. There is no question. And i think shrugging our shoulders and assuming it is the cost of the deal is not good enough. Senator kirk, what has not been discussed is in 16 months they will lift sanctions on ico, known as satad in the iranian acronym. This is the Holding Company of the Supreme Leader of iran. It is a 95 billion Holding Company designated by ofac in six months allowing the Supreme Leader freely to move 95 billion through the Financial System around the world. So this is not the 100 billion in escrow funds, it is 95 billion in a holdco that the Supreme Leader has. That is 200 billion. And one point of clarification. Secretary szubin was talking about the accounts down to 56 billion. Administration is trying to have an argument both ways. If the money is only spent on the economy and not on terrorism, then that 56 billion includes about 25 billion that the chinese will spread on upstream Energy Investments and another 20 million that is being secured gon nonperforming loans and that is money spent on the iran economy. So if it is irans economy it is 100 billion. But if the argument from the administration is they will spend that money on terrorism, then the administration is right. 100 billion is not available for terrorism. Over 56 billion is available for terrorisms. But lets get our arguments straight. 100 billion is available for irans economy. That is what is in the escrow funds. And as i said, 95 billion is sitting in the Holding Company available to fund exactly what you are talking about. And the revolutionary guards are going to get 6. 5 billion crepting 10 of the public budget and they are the entity in control of irans overseas expansion and terrorist activities. Dr. Levitt, do you have a comment . You know, lets listen to what hezbollah said about it. Close to the regime but they have been holding weekly meetings with Bashar Al Assad and he noted under sanctions they funded alleys and ant pace now a rich and powerful raub open to the world, end quote, could do more. And i say in the next phase iran can stand by allies, friends, people in the region and the Palestinian People more than any time in past and that is what the others are afraid of, end quote. Ambassador burns, you have a comment. I assume whether it is 100 billion or 56 and im not competent to answer that question, some has to go to con tracks as was explained in the last panel and some will go to revive the iranian economy given the populations frustration with sanctions and some will go to the rgc and you are right about that. I do think if there is congressional disapproval and we can fulfill the agreement and they become a threshold state, there are more powerful force to exert mayhem in the middle east and if we can freeze them and weaken them over the next ten years. So just thinking strategically, i think we have to combat this force and set up a containment regime but if they are weakened by the nuclear agreement, well have greater success i think in doing that. Thank you, senator. Thank all of you for appearing and your patience here today. Very important hearing, very important issue. The committee is adjourned. Thank you, mr. Chairman. [ hearing adjourned ] coming up today at 4 00, a hearing on wildfire management from the sent energy and Natural Resources committee. They study areas prone to wildfires, such as arizona and the chief of the United States Forest Service testifies on cspan. And tonight a discussion on urban riots from furg, to wats to turnofthecentury race riots, and the Panel Includes remarks from authors an history professors, robin kelly and max herman. Here is a preview. I dont think we want the police to entirely go away or disappear. But i think a lot of people want the police to be more accountab accountable. And that is something positive. Ive been trying to think of things that are positive that have come out of these evens an one of the positive things of late in baltimore, ferguson, other places, is people are starting to demand more accountability from the Police Forces and politicians are coming on board with that. In newark, the mayor signed an executive order instituted a policecivilian review board. People have been asking for that since 1965 when the congress on racial equality in newark was demanding a civilian review board and kept getting kicked down the road. But it was put in place just recently, new york state governor andrew cuomo, im not always a huge fan of his policies but he has said if Police Officers and the local prosecutor will not pursue Police Issues then the state will. So there has been positive movement in that direction to hold police more accountable. And can you watch that program on race riots tonight beginning at 8 00 p. M. Eastern on our companion network cspan. This weekend, on the cspan networks, politics, books and American History. Saturday night at 8 00 p. M. Eastern on cspan, congressional p profiles with brendan boil, Louisiana Republican ralph abra ham and Brenda Lawrence and new york republican tom mcarthur and on saturday night at 9 00 with re elections coming, well show you the debate in canada on saturday night on book tvs afterwards, Charles Murray argues that through the use of technology we with rein in the power of the federal government. And sunday evening south an south ard talks about the people of nagasaki japan, from the morning it was bombed on august 9th, 1945, to today. This weekend on American History tv on cspan 3 we commemorate the 70th anniversary of the bombings of hiroshima and nagasaki and the end of the war in the pacific. The programming starts on saturday morning at 10 00 with the conversation of clifton trueman daniel and later well visit the atomic bomb exhibit with the director of Nuclear Study peter cuss nick. And on saturday morning at 10 00 the cover an continues with the 2000 documentary on the making of the atomic bomb and later interviews with two bomb survivors. Get the complete schedule at cspan. Org. Sunday night, on q a. Former emergency manager of detroit kevin orr talks about detroits Financial Issues and hi job overseeing the largest municipal bankruptcy in u. S. History. If detroit had taken the 1. 5 billion it borrowed in 2005 and the 2006 and the stock market went down to 6,500 and just invested in index fund, dow jones, standard and poors, the market is trading at 18,000, almost triple what it was. They could have paid the pensions in full and gotten back in the practice of a 13th check, giving pensions a 13th check at the end of the year in addition to the 12 they are due. It could have fixed itself if there was sober management going forward, just any lake organization, the United States as well. If you have strong leadership and some focus leader shirp, you can resolve these problems but it takes a lot of effort. Sunday night on cspans q a. Next, federal Communication Commission chair tom wheeler and ajit pai testify on the House Communications and technology. They discuss rural access to broadband and over the top Video Services. This is three hours. Well call to order the subcommittee on communications and technology. And i want to and wish a very good morning to chairman wheeler and commissioner pai, 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 commissions 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 yet 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 the commission would begin to fine its way back to the debates and compromises that characterized it since 1934. Unfortunately, that appears not to be the case and if commissioner pais 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 necessitate a second round of questioning. To get started, let me highlight five areas 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 entity issue raises concerns for many of us. While the fcc majority changes it will strength the integrity of the program, a goal we all share, sadly, im afraid, they simply replace one set of rules that were gained with a new set yet to be gained. 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 has 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 the Lifeline Program 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 quadrennial 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. We hear similar complaints from stakeholders who feel ignored or shut out altogether. The commission and all of us work through the complicated issues in todays rapidly 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 gentle 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 in the 3. 5 gigahertz brand for mobile broadband. Established indoor location accuracy rules for wireless calls made to 911. That could be a lifesaving step right there. Adopted bright line rules that prevent broadband providers from engaging, blocking, throttling and paid prioritization. Levied 100 million 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 access issues continue to be 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, mr. Janokowski and mr. Dowel. Getting spectrum to the marketplace is where we need to have our focus. And rather than getting off into all these tansgital issues, your 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 preparing 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 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 delighted to have you back. Apparently were really delighted because we have you a lot, 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 ip 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 commonsense 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 flawed. 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 variability. If broadcast stations must be placed in the wireless portion of the band, they should go in the uplink spectrum, not the yin inc. Downlink or the gap. 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 quirk 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 accident. Based on the principles set forth in a may 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 things that is an reality of an auction is you dont really know where the displacement is 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 sharing 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 recently 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 we 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 that involves a database where you get permission to use it by knowing that 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 semantics 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 idlestein 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 entities, 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, 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. We dont know which low power will be affected 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 translators, lptv stations dont have a place to go, it seems to me with 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. Thank you, mr. Chairman. 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 insulin ent auction, unleashing new spectrum for licensed mobile broadband. Protecting consumer access to local broadcasting and creating 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 gentleman 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 growing 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 have had so much choice in that market . Congressman, thanks for the question. I cant think of a time when consumers of 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 up 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 innovation. . Absolutely. And that is the great thing about the broadband about the broadband about the broadband about the broadband can deliver the services over the internet. And limit that choice. Absolutely not. I think the worse thing the government could do would be to pick owl particular Business Models tor treatment. That will distort the market place and well never know which Business Models customers would prefer. Turning, mr. Chairman, my zriekt, northwest central ohio and you are familiar with it with your days in ohio and i have larger hospitals in my district and a number of the hospitals have expressed a very serious concern to the commissioner regarding the Technical Rules for the use of the canal 37 by unlicensed tv white space devices. It is already decided that channel 37 is available for use but unlicensed devices, however Technical Rules that protect Wireless Medical Telemetry Service allow for the white spaces, devices that have 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 it is important that all parties should 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 Technology Challenge that we have to make sure that we deal with. And i believe we have a belt and suspenders approach to that. The belt is to say that 380 meters from such a site is a nogo zone, which is tripling of where we were before in response to what the wmts folks said in some of the trials theyve run up in minnesota. But the suspenders are also that the data base that is the coordination data base that must be used for unlicensed purposes, if there is a problem in northern ohio, in a particular area, that information gets fed into the data base, and that then becomes a nofly zone. 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. Do you think they have enough time to make sure they get that information to the commission before your august meeting . Do you think there is enough time. Here we are on what is it the 27th of july or 28th, that were right at that point . Theyve just submitted to us Additional Information from these field tests and it was based upon that, that we altered what our proposal is. This is not an issue that hasnt been being dealt with since you passed the spectrum pact. That is something that has been going on for multiple years. Their tests were really helpful in this regard. That is why we try to make sure that we harmonize with the kinds of things that theyve discovered in those tests. And provide the flexibility to move in and do something if, in fact, there is an aberration. This goes to mrs. Back burns point about sharing. This is the whole reality about sharing. We want to create a structure that says that you can deal with the aberrations and this Committee Told us in statute to do that, and that was a wise decision on your part and were following through on that. Well thank you, mr. Chairman, if i may, i would like to submit for the record a statement from the American Hospital association. Without objection. Thank you. Chair now recognizes the gentleman from vermont oh, just kidding. [ laughter ] mr. Doyle, pennsylvania. That would have really gone bad. Mr. Chairman, if your goal was to get his attention, you succeeded. I wanted to make sure he was awake. Mr. Doyle. Mr. Chairman, thank you. Gentlemen, welcome, commissioner pai, i was just listening to your Opening Statement where you were lamenting how you and commissioner oreilly have all of these wonderful ideas that are met with no sponsor no. And i wab you to know we on the democratic side are feeling your pain. It is called being in the minority. [ inaudible ]. Would the gentlemen nod on that, weve been notified by those doing the streaming, if you could pull the microphone closer, in the internet age they are not able to hear you. We feel your pain. I just want you to know. Chairman wheeler, i have questions for you. I know you are a strong advocate for a competitive wireless market place and good advocate in moving these longstalled issues forward. I have concerns about the special access proceedings. First im concerned that the window for moving forward on special access reform is narrowing particularly with the latest extension of the comment woepd. Additionally i heard that the fcc has made the Data Available to the stakeholders. With the comment deadline looming, when will the stakeholders be able to access this data to make fully informed commented for the proceeding . Thank you, mr. Doyle. I do not know the specific date. We will announce a specific date. I cant free form it here. But there have been multiple challenges with special access that start with the collection of data that was thwarted for years and we were finally able to begin collecting that data. In so far as we will make sure that that data is on the record and on the record in a timely manner. And i share your interest in wanting to make sure that we have an opportunity to address the special access question but it needs to be factbased. I mean, can you give us any idea when you anticipate the commission taking action on the proceeding . I mean, are we talking is it going to be in my lifetime . Sir, i hope it is while i am chairman and that is a shorter period than your lifetime. Let me ask you another thing. And like a lot of people on this committee and our Ranking Member, i also have concerns about the trigger for the spectrum reserve and the incentive auction. Weve all been working hard to make sure the auction will enhance competition for wireless broadband and consumers will reap the benefits of lower prices and great erin ovation. To that end what is the administration doing to address the concerns we have about the reserve trigger particularly in regard to the trigger coming into play so late in the auction . Well, let me be sure which trigger you are talking about . Are you triggering the assignment round issue or are you triggering the go ahead. No. So the reserve. So the question then becomes are you going to cut back on the amount of bidding that goes on for reserve spectrum. And 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 there were a lot of people on this committee and this commission disagree 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. And it seems to me that 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 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 what we should not be doing is is picking winners and losers inside that reserve. Thank you, mr. Chairman. I yield back. Gentleman yields back. Chair now recognized the gentleman from illinois for five minutes. Thank you. Welcome. You both agree that to facilitate broadband deployment is going to take u. S. Effort reform, is that correct. Yes. And commissioner pai in your Opening Statement, you mentioned some principals. Can you restate them quickly. I got a calm of them. It would be a twofold plan. First and foremost are targeted changes to allow rate of return carriers to get universal Service Report for the cost they f