Transcripts For CSPAN3 Politics Public Policy Today 20150326

Global economy more than six times of tear rifls. Ariffs. I recognize my responsibility to serve all of you and appreciate the input, cooperation help, advice and assistance that you do. We really appreciate this robust dialogue with the clamham lerber and its members. We want to continue to fulfill or obligation operating as a strong Law Enforcement association while helping our businesses remain competitive in the global marketplace. Thank you all very much. Thank you commissioner. We have a few minutes for questions. If i could just ask you to state your name and who youre with to ask your question. Who would like to start it off . You did cover a lot of ground there, thank you, sir. I thought we had one back here but i will just lead off with questions while there is a vocal group up here so i know you guys will have one soon. So spencer, get up there. Commissioner, thank you again for addressing the clam berhamber and broader membership from other organizations as well. We appreciate your partnership, as always. My question is in regards to your international comments. We obviously see the trade facilitation being a big component of the agreement moving forward to remove customs barriers at borders. You mention that u. S. Customs can play a big role in the international environment. How do you see u. S. Customs taking its best practices and exporting those programs but also improving your processes as well and seeing what you could do to modernize to rise to the standards of the tfa. I think were fortunate to have two things going on right now. One is that with assistthe assistant secretary at the helm of cbp and now being the assistant for dhs, we clearly recognize the value that cbp can bring to other currents. Were working hard as you look at things and changes in the world, were working hard to expand our International Footprint and to put more people there. In my relations with the department of state and many of the ambassadors that ive had an opportunity to work with, every ambassador in a foreign country that has a member of cbp within that embassy, almost universally tells me how valuable and helpful they are. They bring a perspective and information to that. So i am intent on moving forward with expanding our International Footprint in cbp. Right now of course many of you flow that were in negotiation. We receive letters of interest from 25 airports around the world to expand preclearance, the same type of preclearance we have and have it in canada for a number of years. So i think thats particularly important. The other is that and we havent done this for a while but over the course of the next day and a half or thursday and friday well be taking all of the Senior Leadership within cbp out to our advanced Training Facility at Harpers Ferry for a day and a half, perhaps away a little bit from blackberries and schbstelephones and spend some time saying how can we better align. Were all busy, we all have these silos we end up operating in. How can we harmonize within cbp to meet some of the goals that i mentioned here. Yes. Microphone is coming to you. My names clark nelson. I we are a provider to your old position. Fingerprint system. You alluded in the beginning to the interface and challenges of balancing commerce and security of course whether it is people or goods moving across the border. Can you comment briefly on the variable priorities from cbp on the new entry exit buy metric Border Control versus goods and management of goods crossing. Im sure everythings a priority, but so i think its particularly critical right now when it comes to the identification of people and things like fraudulent documents. There isnt a day that you dont pick up some news article about syrian foreign fighters, whether its people leaving the United States and i think the number is certainly less than 200 but it is people that have either shown an intent or have gone over to syria. Then of course because they are u. S. Citizens could return back to the United States. What danger, what threat do they pose and how are we recognizing that. It is certainly a much more significant concern in europe, the uk and other locations. But the fraudulent document information and stolen passports, not every country will query passports against interpol stolen passport database. We do. Other countries do. But thats important that we show that this is critical. When you apply for and ask for the information to apply to come in to the United States there are now additional sets of questions. And some of you have read that were working with facial Recognition Systems in an experiment at dulles airport. These are going to continue on. So the fraudulent document information is going to be critical. Biometric exit information. Of course, as everyone in the room also knows, our airports really arent designed for exit and theyre designed to get people on to the airplanes but not through certain portals, et cetera. So we have to think through that pretty clearly, how can we work with Technology Given infrastructure constraints to work in those areas. So i think that the verification of people is critical. The agriculture inspections are still going to be critical and then the screening and riskbased analysis of cargo. Mike mullen. Im mike mullen from the express association of america. Thank you for those remarks, commissioner. I was happy to hear you emphasize the relationship you have with the other government agentcies with the context of the effort to implement the single itds window. I think i can speak for a lot of people in this room in saying that we feel of all the government agencies, cbp has the best grasp, the sort of deepest understanding of Risk Management and that thats an area where a lot of the other agencies, for a host of cultural and historical reasons, have a much different perspective. So my question is, i know this is being discussed in the auspices of the beck. How far do you think you can go or how do you see the government implementing a single approach to Risk Management that from our point of view hopefully will look a lot more like cbps than what some of the other agencies use. I think that the fact that we have such a leadership role with the deputy secretary in the border inner agency and having been the United States attorney in los angeles, he clearly kind of has that understanding and that balance. And i think all of us, especially inside the beltway know that the usual parochial way is to close our arms, make no comment, say that we dont make mistakes and things cant happen but i kind of go back and take my experience as a police chief for a long time. No mayor, no city council held me to a crimefree city of seattle or a crimefree city of buffalo. And yet there are times some elected officials like to hold folks like me accountable for no one should cross the border. A security border is that no one will ever get in. And if only we do more things will be better. We need to not do more whether it comes to huge expenditures. We need to do more when it comes to being smart, to being good partners to using intelligence to using tech noll. Gi whether it choms to border security, trade security or people coming in to the country to do that. I think the more we can talk about that in a very direct way, the more cover or protection it gives to my colleagues and other federal agencies. Commissioner good to see you. Im with u. P. S. Can you give us a few thoughts about your work on beyond the border around how youre going to move forward just working with cbsa on opening the preclearance. So cbsa will still require through the government of canada legislation to allow that. I think we will be able to move a little bit more quickly when it comes to that. I think given the strong working relationship that the two agencies have that hosting and sharing with cbsa, their ability to do some of the work after legislation here in the United States where they can be to work within the United States is absolutely fine. There are so many now there are so many systems now that are available to verify the work thats being done, whether it is video systems, trafficking systems, et cetera, that an overarching concern that, well a representative from canada is doing this, or it is a representative from the United States. We should be able to trust each other. Of course, we also have those systems in place. So i think that i think that that greet that has received so much support will continue to receive support from industries on both sides of the border as they work with both our United States congress and canadas legislature and government to move forward. Over here. Good morning. Thank you so much for taking the time to meet with us. I apologize if i bring up a subject that you already discussed but i was a little late. The question has to do with many in the industry are very concerned that who now enjoy the benefits of i was just wondering if you see in any way possible that the solution could be reached that would satisfy National Security concerns and at the same time preserve this great benefit for some of the companies that need it and deserve it. Thanks. You really hit me with a question that i even couldnt begin to answer. Just so you know. I was worried it might not come to your level but i decide to ask it anyway. Somehow i think it will now. Im sorry what did you say . I think it will get to my level now. Okay. The trade and labor went through just a horrible slowdown in the ports on the west coast thats just being alleviated right now. Customs was somewhat of a bystander in that. But im asking you must have gone through that, too getting briefings all the time. Are there any Lessons Learned from customs having gone through that kind of experience on the west coast and the huge impacts it had on trade . Yeah i think there are, bill. I know you just stepped off coac and we thank you very much for your service on that. That was tremendously careful but we watched that very carefully. It kind of hit home because i hear from people in Washington State about the apple crop that actually was not able to reach an export market. So the costs were tremendous and youd like to see some type of labor piece because when i was the police chief in seattle, we had six years we had the slowdown also. So it creates difficulties. Todd owen, both in his position now but also in his position at long beach in lax, todd worked very hard to have in place a whole series of Additional Support mechanisms whether when it was actually going to be settled, and now things were going to be moving more quickly would we be bringing in people tdy, would we be bringing people in on overtime, would we have extra shifts, what are the Different Things that we could do. Those port directors have been pretty amazing, whether it is oakland, seattle, et cetera, of being able to shift some of their resources away from other locations when it came time that the out cranes were operating fully and the cargo was coming off and there wasnt a new holdup and it wouldnt be us. So we learned lessons from six years ago and we learned a few more lessons this time. That thanks, bill. Time for one more question back leer. Hi, David Richardson with southwest airlines. Thanks for coming out today. Just a congratulations on the preclearance agreement with canada. Could you please address the possibility of possibly some sort of preclearance agreement with mexico in the future . I think mexico is a little further off when it comes to the preclearance. By the way government of mexico and several of the airports mostly in the high tourist destination, have sloanhown an interest in doing that. I think weve made a good first step with the mute all recognition arrangement on trade and cargo security where were both recognizing our mutual programs for vetting traders trusted trader programs. I think that we can expand upon that when it comes to passengers, also. I think it is a little further i think it is a little further down the road for the preclearance in mexico. But it was good, thanks. Commissioner, clearly a lot of progress has been made under your leadership. Terrific job. Thank you. I guess i just want to give you the opportunity, anything that you havent been asked this morning that youd like to hit on or anything that the chamber and our members and the private sector can be doing more of in the next couple of years with you and your team . Yeah. I think the burden falls on us quite a bit. People like todd and brenda and maria luisa are very busy. But i have never seen them not take the opportunity to attend one of your meetings, one of your conferences to have some other very smart people like steve and others to be able to brief. And we do that a lot. We spend a lot of time and effort in that and i think it is time and effort that is well spent. So you should not be and i dont think you have been. You should not be the least bit hesitant in asking and demanding of us that we continue and do more. Thank you. Thank you. Thank you, commissioner. Appreciate it. Congress is busy today trying to wrap up legislative work before heading out for a twoweek spring recess. House earlier passed a bibill known as the doc fix. That changes the medicare payment formula to doctors. Members had passed 17 temporary measures before today. The legislation also reauthorizes the Childrens Health Insurance Program known as chip for two years. Yesterday the house approved the 2016 republican budget plan and today the Senate Continues working on its version of the budget plan with votes on more than 60 amendments possible throughout the day and overnight. Theyll also work on the doc fix legislation that the house passed. Reminder, you can watch live coverage of the house on cspan and the sflat onenate on cspan2. This sunday on q a, eric larson on his new book, dead wake, the Last Crossing of the lucitania. It gets complicated when the question becomes what happened to the lucitania . Why were they allowed to head into the irish sea without escort, without the kind of detailed warning that could have been provided to captain William Thomas turner but was not. This has led to some very interesting speculation about was the slip essentially set up for attack by churchill or someone in the admiralty. And its interesting. I found no smoking memo. Believe me i would have found a smoking memo if it exists. That is, there is nothing to say from churchill or to Jackie Fisher or to someone else saying lets let the lucitania go into the irish sea because we want to get something. Nothing like that exists. Sunday night at 8 00 eastern and pacific on cspans q a. With live coverage of the u. S. House on cspan and the senate on cspan2 here on cspan3 we compliment that coverage by showing you the most relevant congressional hearings and Public Affairs events. On weekends, cspan3 is home to American History conservative with programs that tell our nations story including six unique series. The civil wars 150th anniversary. American artifacts touring museums and Historic Sites to see what artifacts reveal about americas past. History bookshelf. The best known American History writers. The presidency, looking at the policies and legacyies of our nations commanders in chief. Lectures in history with top College Professors delving into americas past. Our new series reel america, featuring archival government and educational films from the 1930s through the 1970s. Fcc commissioner were on capitol hill recently to answer questions about their recent open internet vote classifying the internet as a common carrier like telephone service. Last month the fcc approved a long party line, new open internet rules designed to prohibit Internet Service providers from blocking or diskrim flating legal content moving through their networks. Commission members testified before the science transportation committees. This hearing will come to order. Its great to have all five of our fcc commissioners with us. We want to welcome you and generate a bit of a crowd. Interest in some of these subjects i think here, senator nelson. So let me just start with my remarks and then were going to ill yield to my distinguished Ranking Member, the senator from florida, senator nelson for his remarks and then were going to ask the fcc commissioner to confine their remarks to three minute so we can get to the question and answer which is what i think everybody around here is interested in. So welcome today oversight hearing. Every day every single american relies on some part of our nations vast communication system, the internet, telephone, television, gps or the radio. Efficient Effective Communication system is the bed roc of our nations economy and the tie that binds together our 21st century society. The fcc sits right in the middle of americas digital world. This is more true followed the fcc decision to turn or broad band internet infrastructure into a public utility. It is apparent from that action last month that the fc contraction is threatening an Unpredictable Agency that it struggle to operate designed nearly so 0 years ago and. To be clear todays hearing is not a response to the title 2 order but clearly no discussion about the fcc can ignore one of the most significant and most controversial decisions in the agencys history. My views on this subject are well known. I believe there should be clear rules for the digital road with Clear Authority for the fcc to enforce them. I put forward a draft bill with my house colleague to begin the legislative discussion of how best to put such rules into statute. Like most first drafts our draft bill is not perfect. I invite members of the committee and stakeholders from across the political spectrum to offer us ideas so that the final draft can win bipartisan support and provide everyone in the internet world with the certainty that they need. The fccs recent action accomplished the exact opposite. Rather than exercising regulatory humility, the three majority commissioners decided to take the most radical, polarizing and partisan path possible. Instead of working with me own. My colleagues in the house and the senate to find a consensus, the three of you chose an option that i believe will only increase political regulatory and legal uncertainty which will ultimately hurt average internet users. Your actions jeopardize the open internet that were seeking to protect. There was one idea that unified them for nearly two decades. The internet is not the Telephone Network and you cannot apply the old rules of telecom to the new world of the internet. Three weeks ago three regulators turned their backs on that consensus and i believe the internet and its users will ultimately suffer for it. The debate over the open internet illustrates the importance of the fcc which makes is all the more amazing the congress has not reauthorized the fcc. Since then senator markeys bill was passed over a quarter century ago. Indeed its the oldest expiration in this committees jurisdiction. A situation i intend to recollect fie in this congress. Todays hearing marks the beginning to write and pass legislation to reauthorize the t in this congress. Todays hearing marks the beginning to write and pass legislation to reauthorize the i in this congress. Todays hearing marks the beginning to write and pass legislation to reauthorize the f in this congress. Todays hearing marks the beginning to write and pass legislation to reauthorize the y in this congress. Todays hearing marks the beginning to write and pass legislation to reauthorize the in this congress. Todays hearing marks the beginning to write and pass legislation to reauthorize the in this congress. Todays hearing marks the beginning to write and pass legislation to reauthorize the in this congress. Todays hearing marks the beginning to write and pass legisla this congress. Todays hearing marks the beginning to write and pass legislation to reauthorize the i in this congress. Todays hearing marks the beginning to write and pass legislation to reauthorize the responsive to the needs of consumers, congress and regulating companies alike. I look forward to hearing their suggestions and views. I look forward to hearing the commissioners thoughts today about ways congress with can help their agency improve. Running a new fcc reauthorization bill should not be a oneoff effort. It is my hope that the committee will get back to regularly authorizing the commission as part of its normal course of business. In order to do that effectively the committee must be diligent. As such the commission should expect to come before this committee again. How the Commission Works is just as important as what the commission does. In addition to discussing Important Communications policy matters, i hope members will use todays hearing to explore the commissions operations, processes and budget. For example, the fcc has requested 530 million for fiscal year 2016. This funding level would be the highest in the commissions history. That alone raises eyebrows particular lay when american households continue to do more with less in this stagnant economy. But they want the fund the increase by raiding the universal service fund. Paying for record high budgets by paying for money from various staff is dangerous. Thats what the commissions regulatory fees are for. Usf funds should pay for usf services. I dont believe the fcc should jeopardize its stability and integrity of the universal service fund to pay for its record high budget request. Given the Significant Interest in hearing from the commission today, i do not expect this hearing will be a short one. In order to get to the members questions i ask that all of the witnesses limit their oral statement to three minutes a piece. The longer written statement wills be submitted for the record. I look forward to hearing from your commissioners today in what i hope will be a productive afternoon. With that i would yield to my Ranking Member, senator nelson. Thank you, mr. Chairman. A few weeks ago everybody in this room today knows that the fcc responded to the Dc Circuit Court and responded to 4 million americans by restoring essential protections for consumers and competition on the internet. Obviously theres going to be a lot of discussion today about the content and the development of those rules. And there will be much scrutiny on the legal justification that the fcc used to support its adoption of the rules. Now, while those legal means are important, in fact, they are theu5jc statutory tools Congress Gave the fcc to perform its job. And we must not lose sight of the results of this rule making in terms of the protections that the fcc adopted. As this senator has said repeatedly, as i have discussed with the chairman, i remain open to a truly bipartisan congressional action provided that such action fully protects consumers, does no undercut the fccs role and leaves the agency with flexible forward looking authority to respond to the changes in this dynamic broadband marketplace, so much of which what we think we know today is often changed because of the rapidity of development of technology. Many of you have heard me speak of title x as a yettobe defined title. And i use the term as a way to think beyond the rhetoric that has now engulfed this political argument. The key question for me is, we must ask how or is it possible to take what the fcc has done and provide certainty that only legislation signed into law can provide. Is it part it is part of the larger debate on the appropriate role of our laws and regulations in the broadband age. And as we have that broader discussion, i invite you, mr. Chairman wheeler, to continue to work with us to craft the right policies to accomplish that goal. As important as the issue of Net Neutrality is to this nation, we should never forget the other vital work that is done by the fcc. With ongoing Regulatory Oversight over as much as onesixth of our nations economy, this agency plays a Critical Role in ensuring universal access and promoting competition and protecting Public Safety and protecting consumers. The fcc recently closed the biggest spectrum auction in history, 41 billion. And funding the nationwide Public Safety Wireless Broadband Network in providing 20 billion for deficit reduction. Thats huge. And its in the midst of planning for the voluntary broadcast Television Incentive auction, a new form of spectrum auction that could fundamentally change the nations spectrum policy. Yet, we cant rest. And when it comes to spectrum, continued public and private Technological Development will continue to put strains on our spectrum resources Going Forward. Congress, the fcc and the rest of the federal government needs to Work Together to develop a smart forward looking spectrum policy. And i certainly, this one senator will certainly try to help that effort. The fcc is also overseeing the ongoing evolution of the nations communication networks, known as ip transition. One of the trial projects associated with ip transition is proposed in my state. Im looking forward to an update on that. Generally, i have concerns about how the ip transition might affect Public Safety. So we can get in that. And the fcc has done a lot to modernize its universal Service Fund Programs, including expanding the erate program. What one of us senators has not been involved in erate and promoting . And this Program Provides critical support for our nations schools and their libraries. The enhancements, the increased funding will help guarantee the nations students have access to 21st century technology, not just some of the kids in this country. And i also appreciate the work that the fcc has done to increase the availability of affordable high Speed Broadband in rural areas around the country. I encourage you to redouble that effort to ensure theres not this Digital Divide that keeps going on, that urban kids get one thing and rural kids get another. I want to thank chairman wheeler and the fccs staff on improving the agencys Consumer Complaints department. Senator udall and i sent a letter to the fcc last year asking them to upgrade the commissions Consumer Complaint website to make it more user friendly. And the chairman delivered. And the new Consumer Complaint website is light years ahead of the previous system, and i hope that we can continue to see the additional upgrades. I want to thank all of the five fcc commissioners for your public service. I want to thank you for subjecting yourself to five Committee Hearings no, eight Committee Hearings in five days. And mr. Chairman, i thank you for the privilege of serving with you on this committee. Thank you, senator nelson. I share that. And well look forward to working tot on a lot of these issues in the days and weeks and months ahead. The colleagues on this committee on both sides of the aisle, important work to be done. Were going to start by hearing from our commissioners starting with the chairman tom wheeler who will kick it off then well go no alphabetical order of that with commissioner clyburn, orielly and commissioner pai and commissioner rosenworcel. Thank you, mr. Chairman. Its a privilege to be here with my colleagues. Were five type a individuals who have been working together for the Public Interest. Let me make three quick observations in keeping with your threeminute rule. One the open internet decision, as you indicated is a watershed. Your leadership, mr. Chairman, has illustrated that there really arent any differences about this need to do something, as you said today. We need clear rules. There are different approaches to be sure. Wireless is causing cancer and the fcc has been hiding it from everyone. Suffering with brain injuries, breast cancer. Youre subject to arrest cancer. World Health Organizations classify world Health Organizations classify all the ways of wireless you can hide it in the fcc guidelines. These arent safety standards. Sorry, mr. Chairman. Please proceed. Thank you, mr. Chairman. As i said, there are different approaches that we take to be sure and no doubt well be discussing those. Weve completed our work, strong open internet rules will soon be in place. But let me touch on a couple of other issues real quickly. One is that theres a National Emergency in emergency services. Congress holds the key to that issue. The vast majority of calls to 911 services now come from mobile. We had a unanimous decision of the Commission Just a few weeks ago to require 911 location capability from wireless callers. The carriers are stepping up. But delivering Location Information from the phone is only the front end of the problem. There is no National Policy on how to maximize the life saving potential that is delivered as a and our rules. There was an example, tragic example in georgia just a few weeks ago. Lady by the name of Chanel Anderson who was calling from a sinking car in the middle of a lake and her call was pick up by an antenna in a different Public Safety answering points jurisdiction. And you could hear this heartbreaking conversation with her as she says where she is and the dispatcher keeps saying i cant find it, i cant find it, because this other jurisdiction didnt have the maps as to where this woman was. All because of the vagaries of how a wireless signal gets distributed. There is a real opportunity. The 6,500 Public Safety answering points are staffed by dedicated, qualified individuals. But there is an absence of a federal program that recognize that mobile has changed the nature of 911 and we cant just worry about a signal coming from the caller. We got to worry about what happens to make sure that that signal is used. Just let me be real clear on one thing. This is not an fcc paragraph. I dont care how this gets done where it goes in terms of responsibility. But we have a responsibility to americans to make sure that the information that we as a commission are requiring be transmitted actually can get put to life saving uses and the congress has the ability to do something about that. My second quick issue. The broadband Progress Report that we recently released found that Rural America is falling behind in broadband. The disparity between rural and urban america as senator nelson suggested, is unacceptable. Only 8 of urban americans lack highSpeed Broadband but 53 of Rural Americans do. We tackled a part of that with the erate modernization and the rural fiber gap for schools, 40 of Public Schools 40 of rural schools are without access to fiber. They now have alternatives under the new rules. The commission recently revised the support mechanism for price cap carriers an additional 1. 8 billion from universal Service Funds to upgrade their activities activities. And in areas that are not participateing began the process that will lead to an auction next work where alternative providers can step up and say, no, i will provide service. In an experiment leading up to that, put 100 million out to actually test alternative pathways. We plan to act on rate of return carriers this year. To create a voluntary path for those who elect to receive defined amount of funding to deal with the tying of voice and broadband together which is a problem that they experience to deal with replacing the infamous qra. And thats a process that would be greatly facilitated if stakeholders could agree on a common solution. So i thank you mr. Chairman and members of the committee, for the opportunity to be before you. Look forward to discussing any of the issues that you want to discuss as we go forward. Thank you chairman wheeler. Commissioner clyburn. Chairman thune, Ranking Member nelson, members of the committee. Good afternoon. My written statement details my views on some of the difficult decisions facing the fcc. For purposes of my oral summary, however, i will focus on just two. While i prefer competition over regulation, the truth is that marketplace nirvana does not always exist and here are two examples where markets have failed and regulatory backstop is needed. I made rule call completion a priority as acting chair because it is unacceptable in this day and age that calls are not being put through. We tablet this practice by prohibit a ringing signal unless a call is actually completed, and we have required carriers to retain and report call data. Data collection rules go into effect april 1st, and we will use this information to ensure that the fcc has the tools necessary to take additional action if appropriate. While a petition requested relief from egregious inmate calling rates remain pending at the fcc for nearly a decade, fees and rates continue to increase. Calls made by deaf and hardofhearing inmates top 2. 26 per minute. Add to that an endless array of fees. 3. 59 3. 59 3. 95 to initiate a call. A fee to set up an account. Another fee to close an account. A fee to use a credit card. There is even a fee charged to users to get a refund of their own money. There are 2. 7 million children with at least one parent incarcerated, and they are the ones most punished. And the downstream cost of these inequities are born by us all. The fcc finally adopted interstate rate caps in august of 2013. And what has been the result . Despite dire predictions of losing phone service and lapses in security, we have actually seen increased call volumes as high as 300 and letters to the fcc expresencesing how this has impacted live. I hope we have received the call for perm innent rate caps and fees for all of these customers this um isser. I am grateful mr. Chairman and Ranking Member for the opportunity to appear before you today and look forward to answering any questions you may have. Thank you. Thank you for the opportunity to deliver testimony to you today. I have always held this committee in the highest regard given my past involvement as congressional staffer with oversight hearings andcf¿ legislative efforts. I recommit myself to any resource i have and any help in the future. In tiemy time ive appreciated the challenges presented. It is my goal to maintain friendships even when my fellow commissioner and i disagree and seek opportunities to Work Together. To provide a brief snapshot, have voted with the chairman on approximately 90 of all items. Unfortunately the percentage drops significantly to approximately 62 for the higher profile open meeting items. One of the policies ive not been able to support is the insertion of the commission into every aspect of the internet. The commission pursued an ends justify the means approach to subject broadband providers to a new title 2 regime without a shred of evidence that it is even necessary. Even worse, the order gives authority to fcc staff to review current and future internet practices under vague standards such as just and reasonable, unreasonable interference or disadvantage, and reasonable network management. This is a recipe for uncertainty for our nations broadband providers and ultimately edge providers. Nonetheless, i continue to suggest Creative Ideas to modernize the Regulatory Environment to reflect the current marketplace often through my public blog. For instance ive advocating the any document to be considered in an open meeting should be made publicly available on the commissions website at the same time it is circulated to the commissioners typically three weeks in advance. Under the current process, i meet with numerous outside parties prior to an open meeting. Im precluded for are telling them, for example having read the document that their concern is plis guidemisguided or already addressed. This is really grounded in resistance to change and concerns about resource planningment. In addition the commission has questionable post adoption process that deserves significant attention. While i generally refrain from commenting on legislation i appreciate ideas put forth by senators which address these and other commission practices such as abuse of delegation that locks the public out of critical end stages of the deliberative process. I believe these proposed changes as well as others would improve functionality of the commission and approve consumer access to information. Separately, ive also been outspoken on many substantive issues such as the need to free up spectrum resources for both wireless broadband, both licensed and unlicensed. I look forward to working with my colleagues on this and many other issues in the months ahead and i stand ready to answer any questions you may have. Thank you. Chairman thune, Ranking Member nelson and members of the committee, thank you for giving me the opportunity to this afternoon. Its been an honor to work with the members of this committee on a wide variety of issues from promoting Rural Broadband deployment to freeing up more spectrum for mobile broadband. It is a particular privilege to appear before you today now that senator moran from my home state has joined the committee. I can only hope that his kindness will continue if and when he has a chance to question me later today. I last testified in front of this committee march 12, 2013. Since then things have changed dramatically at the fcc. I wish that i could say on balance these changes have been for the better. But, unfortunately, that is not the case. The foremost example of course is the commissions decision last month to apply title 2 to the internet. The internet is not broken. The fcc didnt need to fix it. But our Party Line Vote overturned a 20year bipartisan consensus in favor of a free and open internet. With the title 2 decision, the fcc voted to give itself the power to micromanage virtually every aspect of how the internet works. The fccs decision will hurt consumers by increasing their broadband bills and reducing competition. And the title 2 order was not the result of a transparent rule making process. The fcc has already lost in court twice, and its latest order has glaring legal flaws that are sure to keep the fcc mired in litigation for a long time. Turning to the designated entity program, the fcc must take immediate action to end its abuse. What once was a well intentioned Program Designed to help Small Businesses has become a playpen for corporate giants. The recent aws3 auction is a shocking case in point. Dish, which has annual revenues of 14 billion and a market cap of over 34 billion, holds an 85 equity stake in two companies that are now claiming 3. 3 billion in taxpayer subsidies. That makes a mockery of the Small Business program. The 3. 3 billion at stake is real money. It could be used to underwrite over 580,000 pel grants, fund school lumplgs for over 6 million children or incentivize the hiring of over 138,000 veterans for a decade. The abuse nebraska to vermont. It denied licenses they would have used to give Rural Consumers a competitive wireless alternative. In my view the fcc should adopt a ruling to close loopholes before the next spectrum auction. Members of the committee, thank you for giving me this opportunity to testify. I look forward to answering questions and working with you and your staffs in the time to come. Good afternoon members of the committee. Today Communications Technologies account for onesixth of the economy and they are changing at a breath taking pace. How quickly . Well, consider this. It took the telephone 75 years before it reached 50 million users. To reach the same number of users television took 13 years and the internet took four years. More recently angry birds took 35 days. So we know the future is coming at us faster than ever before and we also know that the future involves the internet. And our internet economy is the envy of the world. It was built on a foundation of openness and that is why i support network neutrality. With an eye to the future i want to talk about two other things today, wifi and the homework gap. First, wifi. A few of us go anywhere without our mobile devices in our palms, pockets or purses. Thats because every day in countless ways our lives are dependent on wireless connectivity. While the demand for air waves grows the bulk of our policy conversations are about increasing supply of licensed air waves for commercial auction. This is good but it is also time to give unlicensed spectrum and wifi its due. We should do that because wifi is, after all, how we get online. Wifi is also how our wireless carriers manage networks with license through offloading. Wifi is a boon to the economy. There are studies that demonstrate that it is responsible for more than 140 billion of Economic Activity every year and thats big. So we need to make unlicensed Services Like wifi a priority and the commission is doing just that with our work on the 3. 5 band and next year with our work on the 600 mega hertz band. I think it will take more than this to keep up with demand. That is why i think the time is right to explore greater use in the upper portion. Going forward we need to be on guard to find more places for wifi to flourish. Second, i want to talk about the homework gap. Today roughly 7 in 10 teachers assign homework that requires broad band access. But fcc data suggests as many as one in three households do not have access to broad band at any speed. So think about those numbers. Where they overlap is what i call the homework gap because if you are a student in a household without broad band today getting your homework done, just getting your homework done is hard. And its why the homework gap is now the cruellest part of Digital Divide. It is within our power to bridge it. More wifi will help as will recent efforts to upgrade connectivity through e rate. With more work remains. I think the fcc needs to take a hard look at modernizing the program to support connectivity in low income households. I think the sooner we act the sooner we bridge this gap and give more students a fair shot at digitalage success. Thank you. Thank you. We have a lot of participation on both sides today. As much as we can trying to adhere to the fiveminute rule. I know it will be hard because there is a lot of interest in the subject. Let me start by talking a little about an issue important to me and my state. I start by saying laws and policies that are outdated often lead to rules that are arbitrary which ultimately limits Consumer Choice and raises cost. The current universal service fund rules require a Rural Consumer to buy Voice Service in order for that carrier to be eligible for usf support. If the same Rural Consumer decides to buy only Broad Band Services without a telephone subscription the carrier is no longer eligible to receive u. S. Support for that line. This contradicts and under mines the mission of the new broad band centric usf and ask makes broad band more expensive and increasingly threatens sustainability of Rural Communications networks. Last year senators led letters to the commission that urged fcc to propose rules to solve the issue. Nearly a year later the issue remains unsolved. I want to ask each of you a question. I will take the approach of chairman rockefeller and ask for commitment from each commissioner and the question is will you commit to solving this growing threat to Rural Communications by the end of this year . Absolutely. Yes. Yes. Yes. Very good. Thank you. This is designed to get all on the same side of an issue. I want to i want to make just an observation, too. I know the commissions order is the subject of the day in addition to other things we would like to talk about, as well. I have a father who is 95 years old. He lives in my hometown of myrtle south dakota with population of 500 people. He is a user of the internet. It strikes me if i had to suggest to my dad that were going to regulate the internet that he uses with a law that was passed during the Great Depression when he was 14 years old, i think he would probably be flabbergasted. Essentially that is what we are doing. We are trying to take something that was designed for a very different era and squeeze it trying to fit it into a modern technology. One of the issues that that statute allows for is rate regulation. Now, i know that chairman you have contended that no rate regulation will result from open Internet Order. Lets say hypothetically that someone files a complaint at the fcc alleging that the rates they are paying an Internet Service provider for broad band service are not just and reasonable under section 201. As a result of title ii reclassification isnt the commission legally obligated to investigate and rule on that type of complaint . That is absolutely right. The order opens the door to complaints under section 208 to the commission and the country. It would be up to the commission to adjudicate whether or not a rate is just or reasonable. This limits to saying we dont engage in things line tariffs and says nothing but expost regulation. That is why rate regulation is a real prospect. So if that circumstance were to happen if the Commission Judges the rates to be unreasonable could the fcc require the isp to adjust its rates or impose fines on the isp . We dont have such a case before us right now but i think it is important as an order of due process that any provider having difficulty succeeding in getting interconnection they need to provide service has opportunity to complain to the commission and seek resolution. So the answer is yes, the fcc could . We will see when we have a complaint before us. Im not saying you should but im saying you could. In a rate complaint case how will the fcc decide if a rate is unreasonable or unjust . Given the same context that you set up, one of the examples that i gave in my Opening Statement was on inmate calling. That affirms and should affirm to us all that the bar is incredibly high when it comes to the scenario that you put forth. We waited over ten years to think about addressing what was obviously a market failure. So, again, we wont know until something is before us but it passes prologue that far is extremely high for that case to come to the resolution. You would have the discretion to determine if a rate is unjust . We have an obligation, i believe, to look at any complaint filed before us and make a decision accordly. If that conclusion is reached the fcc could in that circumstance act in a way that would adjust rates or impose fines . I jokingly say that even though im from the south and we have the other south, south carolina, and that we have been known very interesting people who have predicted the future i unfortunately do not have that talent. Well, i have a hard time i would think explaining or how that adjudicatory process would not be rate regulation. And like i said, granted the chairman has said that something on which they would forebear but if you are if a case is brought forward strikes me that the fcc has an obligation to respond. And i also think that things that are decided by this commission certainly dont bind future commissions which is why we argued all along that working constructively on legislative solution is the best approach to doing this. My time is expired. Senator nelson. Chairman wheeler, rate regulation, unbundling, tariffing, these are things that some of the big corporations are quite concerned about. No doubt you have had conversations with ceos of those corporations and you have explained what your order is. How did you explain it and what was their reaction . Thank you, senator. So rate regulation, tariffing, unbundling, those sections are all foreborn. I never knew what the past tense is on forebearance. We are not using them out of title ii. The point that senator thune was just making, 1993 created section 332 of the Communications Act in the house which was sought by the Wireless Industry when they asked to be treated as title ii common carriers and to have forebearance from parts of the act that are no longer appropriate in a nonmonopoly situation. That included specifically as a decision by Congress Section 201. So the kind of example that was just raised about section 201b being some kind of back door into rate regulation has existed for 22 years in the Wireless Industry and the commission has not been confronted and has not acted in this kind of way that suggested some kind of back door regulation. In fact, what has happened is that with the absence of consumer rate regulation that industry has been incredibly successful. The Wireless Voice industry has had 300 billion in investment since then. It was that model that is actually more forebearance than was created for the Wireless Industry that we patterned the open Internet Order on. So that it is not your grandfathers title ii. Title ii has 48 sections. 27 of those sections we said we will not use which is 50 more than 22 years ago. So i think that the record is pretty clear that if we say we are not going to have consumer rate regulation, we are not going to have tariffing, we are not going to have unbundling and we explicitly remove those sections and say we are not looking at those sections and pattern ourselves after something that has this kind of a twodecade record of not having these imaginary horribles happen that we are in pretty good course. Things like transparency and a host of other issues, there is wide acceptance. So the interesting thing is that there are four regulatory actions in our order, no blocking, no throttling, no pay prioritization and transparency. Which are the same things the legislation introduced contain those four. The isps run ads saying we are all for these. We would never think about doing these kinds of things. Those are the four regulatories. The thing is that we also say and there should be a basic set of ground rules for things that nobody can anticipate that are not proscriptive regulatory saying we are smart therefore you will do this but are saying lets take a look. Is that just and reasonable . Is that in the consumer interest . Is that in the Public Interest . And on a case by case basis and the fascinating thing to me, sir, is that the isps for years have been saying we dont want the fcc to have such broad rule making authority. They ought to be looking at things like the ftc on a case by case basis. Now we come out and say we do something that is likely ftc on a case by case basis and everybody says that is terrible uncertainty. We dont know what it is if only they would be making rules and telling us what things were. You cant have it both ways. I think what we have built is common on four aspects. The only four regulatory aspects and says there needs to be a set of rules and needs to be a set of standards and needs to be a referee on the field who can throw the flag if somebody violates the standards. And i would just conclude, mr. Chairman, by saying that certainly the five commissioners in front of us would never do this kind of dastardly stuff, but would a future commission do it . And the flip side of that and i would like you to comment, chairman wheeler what about the future ceos that presently you have confidence in them but what about someone that suddenly wants to go beyond the scope of your intent . So ceos come into me, senator, and they say we trust you that we think you have we agree with everything but you are not wild and crazy. We think there will be decent responsible decisions but we trust you. What about the crazy person that will follow you some years down the road . My response is i feel the same way about you, sir . You have said you would never do these kinds of dastardly things to the internet. What about the wild and crazy ceo who follows you . All we are trying to do is say lets have basic set of rules. Is it just . Is it reasonable . Is there a referee on the field who can measure against that yard stick and throw the flag if appropriate . Thank you senator nelson. Senator fisher. Thank you, mr. Chairman and Ranking Member nelson. Chairman wheeler, there are a number of members of congress who believe that new technologies can help the United States remain innovative. I am working with senator booker on the internet of things. I think that is going to be a very good bipartisan resolution and moving forward hopefully legislation so we can see that innovators are able to grow businesses and able to solve problems with clear rules and also clear expectations. I think thats necessary that innovators have to have that certainty out there. When i look at the general conduct rule that is proposed that you have here im concerned it could jeopardize that regulatory certainty that i think we have to have if we are going to remain competitive. The Electronic Frontier foundation has described this rule as an overreach and confusing specifically the eff said the fcc believes it has Broad Authority to pursue any number of practices hardly the narrow light touch approach we need to protect the open internet. Wall street journal reported that at a recent press conference you said with respect to the general conduct rule that, quote, we dont really know. We dont know where things will go next. The order says the agency will watch, learn and act as required, a process that is sure to bring greater understanding to the commission. So my question to you is, how can any business thats trying to innovate have any kind of certainty that theyre not going to be regular rated by the fcc under what i view as a very vague rule, that you have here. For example, when will it be applied, what specific harms does the general conduct rule seek to address, that the rest of the president s open Internet Order doesnt capture . What are you after here . Thank you, senator. First of all, i would like to identify myself, as an entrepreneur, and as somebody who has started multiple companies, and spent the ten years before i came into this job as a partner at a Venture Capital firm investing in those companies. And i know from my experience that the key to innovation is access. And when a gatekeepers deny access, innovation is stifled. Thats what we want to avoid. We do not want to be in a situation where we are having proscriptive rules. We want to be, and what we have structured is something that says, okay, lets ask a couple of questions. Whats the impact on consumers, of this action, whats the impact on content providers, those who want to be delivering. And whats the Public Interest. And i think we can probably all agree that nobody wants to sit by and see something evil happen to any three of those legs of the stool. And those are the tests. And we look and say, okay, now, what happens on those three legs of the stool with this kind of an action that we have had a complaint on. And the important thing is, as i was saying to senator nelson, that this is not us saying, were so smart, we know what you should do, this is specifically doing what the isps have been saying to us, dont make rules, but rather, look at things on a casebycase basis. And thats what weve tried to build in, that kind of flexibility. But that flexibility, though, what do you do with these entrepreneurs and innovators that are coming up with things that i cant even imagine . Right. And theres a process that theyre going to have to go through, with the fcc, that they dont know if theyre going to be required to go through it or not. We dont move up the stack. Were talking about the delivery services. Were not talking about regulating two guys and a dog in a garage and they have to get permission as to do you think thats clear . Yes, maam. Yes, maam. Were very clear on that and that is an essential component of this. First of all, i mean, i think its questionable what our reach would be, in terms of statutory authority. Were dealing with the delivery of what these creative people want to do and make sure they have open delivery. And if i could just switch gears here, in your testimony, i read that youre trying to move forward with a voluntary incentive auction, no later than early 2016. Yes, maam. Are you committed to that . Yes, maam. Okay. Thank you. Thank you, senator fisher. Senator mccaskill. I want to begin with commissioner pais remarks about designate ed designated, and weve visited about this. The thing thats the rest of the story that was not explained was that not only was this a very big company, using Small Businesses to get a 3 billion advantage, a 3 billion advantage, one of the entities that was used was an alaska native corporation, which if i think most people are aware, that they dont have any rules about being small. So, it is insult to injury, because alaska native corporations are multibilliondollar, multinational corporations, that get special deals under our law. They dont have to compete. They dont ever age out of the program. They never get too old for the program. They never get too big for the program. And you confront, legally, so this is really, i think, outrageous. And i hope we can figure out a way to get to the bottom of it. I want to talk about lifeline a little bit. Ive visited with many of you about lifeline. I think it is a program that began under, i believe, president reagan, president bush, you know, it was a subsidy. It morphed into a program without any kind of controls, without any kind of regulation. And it was a mess. Now, i know weve had some weve had some enforcement, but i know weve had a Pilot Program on expanding it to broadband. Let me ask you first, chairman wheeler, when will the report on the Pilot Program be available . Senator, i cant give you the specific date, but its in the next couple of months. Well, we had some enforcement. There hasnt been much in a year. Theres a list of reforms, i think, that include and if any of you disagree with any of these reforms, if you would speak up for the record, i would appreciate it. Taking eligibility and determination out of the hands of carriers . Competitive bidding . Making sure consumers have some skin if the game . Placing a cost cap on the program . Anybody disagree with those four reforms . Okay, i would like to see those instituted and i would like a discussion from you about whether or not it makes sense to continue the Lifeline Program. Doesnt it make more sense to make it a Broadband Program . Looking at the homework gap, looking at the capability of making calls. Over the internet. Does it make sense to institute these structural reforms, as we transition this, from a program where no one has skin in the game and we have allowed the carriers to commit massive fraud in this country. Doesnt it make sense to convert this whole program over to broadband . And i would love your take on that. Im not sure who youre any of you, if someone would speak up, i would love somebody to speak up who disagrees with doing it. Well, i was showing my southern graces. I cannot sit before you and say you need that. One of the things im adamant about. I put four five principles last year. One of which is the most important, that would get to the heart of some of the problems were having is getting the companies out of the eligibility game. They should not be in that space. When it comes to Grocery Stores do not setter or have people eligible, you know, for s. N. A. P. Theyre not in that game. Doctors do not qualify people for medicaid. It should be an independent arm. And i truly believe that a lot of the issues that have plagued this program, if we take them out of that, would go to the heart of what were seeing. Please. I wanted to commissioner p a i and commissioner oreilly, ive had an opportunity to talk to the chairman about this idea. Would you be willing to work with the democratic commissioners on a program that had controls and had reforms in it, that transitioned over to a Broadband Program . Absolutely. And as you may know, i actually wrote recently about this issue, put forward some of my principles and reform. And i thought it would be helpful to start in a review of existing program and all the issues that its faced, before we go to the broadband, expand the program to broadband. That hasnt seemed to be where the direction, where weve been getting the signals internally. Ive tried to put forward reforms that i would think we could do Going Forward. I think we should have that fundamental conversation on the reforms that should be in place before we go there. Or maybe there in lieu of . I would be open to that as well. Senator, first, i want to thank you for your leadership on issues that actually see fiscal responsibility, including the aws3 auction and lifeline. With respect to lifeline with regard to broadband, i think its critical to learn the lessons from the pilot. Secondly, ive put forward in a speech citizen against government waste, a number of different principles for reform, including some of the ones youve talked about. And i think its critical for us to institute those first to ensure that the programs on a stable footing. Because, remember, the Lifeline Program is the only one of the four universal Service Fund Programs that is not capped. So if we dont have those basic reforms for the process, as this program stands, if we expand it to include broadband, theres no telling what kind of problems we might encounter. sure. In 1985, when Ronald Reagan was in the white house, thats when we started this program. It was last updated during the bush administration. It is time to modernize this program along the lines you described, make sure it is free of any waste, fraud, and abuse. And then make it address broadband and things like we described the homework gap. All right, great. And this is not a question of how do we take whats there now and just do a paste here or a change there. We have to look at this entire program, soup to nuts, and say, wait a minute, this started in a twisted pair environment, metamorphosised into a mobile environment. We now live in a broadband environment. Why in the world are we sticking with the decisions of the past . Right. Great, thank you, all. Thank you, senator mccaskill. Senator heller, try to keep it to five, if you can. Thank you, mr. Dharm. Thank you for calling this hearing. I have a statement for the record i would like to submit. I want to thank you the chairmans for being here and chairman, thank you also for attending. Today what i would like to focus on is how rules are adopted. And commissioner oreilly, your Opening Statements and comments were near and dear to some of the comments that i want to make today. But before i do that, i would like to make an observation. The observation that i have is that it was my opinion that the purpose for the Affordable Care act was to guarantee all americans have the same bad health care. And i believe that this title ii decision made by this commission is to guarantee all americans the same bad Internet Service. I also believe two things. And i dont believe im wrong. One is, the purpose of this open Internet Order is one, to regulate and restrict content. And number two, its to open the door to taxation. What i would like is commissioner oreilly and party to tell me why im wrong. Senator, ill tackle part of the question, with respect to taxation, youre right, it opens the door to billions of dollars and fees on broadband. As a result of reclassification, were going to expect to get a recommendation from the joint board on april 7th and it might be kicked off bay short period, but reclassification will lead to the imposition of new broadband taxes. And if you look at some of the new processes that some of the fcc is considering, with respect to the programs administered under the universal service fund, that extra spending has to come from somewhere, and that somewhere is going to come from the consumers pocket. In addition to taxation, one of the issues that has been relatively unremarked upon, is that reclassification opens the door to a lot of taxes on the state and local level. For example, with respect to state property taxes, a lot of jurisdictions tax telephone providers at a much higher rate than they do general businesses or nontelecom providers. In the District Of Columbia alone, where we sit, d. C. Proposes an 11 tax on general receipts, on gross reallies. Thats immediately an 11 tax off the bottom line that the broadband providers will have to pay, which costs will be passed on to the consumer. So i think the taxation aspect of this, completely irrespective of the internet tax freedom act, which does not apply to fees that are associated with broadband, is so critical for us to keep mentioning, because it does affect consumers where it hurts the most. Senator, i would it would be impolite for me to ever suggest that any senator is wrong, but i dont do health care anymore, so i have no comment regarding that part of your point. But in terms of your substantiative comment, on the content, i may refine that and say, i do believe, eventually, that this item, the direction were going, will get to edge providers. Ive made that point consistently. And if you look at where were going on interconnection and how far weve gone on interconnection, there are blurry lines between what is actually the middle mile and what providers are offering today. So, in terms of their structure. And i do believe, eventually, this is going to affect edge providers and the wonderful benefits that they bring to the american economy. Commissioner oreilly, i want to go to your opening comments, calling for amendments, to a rule that at least 21 days prior to publication of a rule, that it be displayed. And made available to the public. And i dont think thats a partisan issue. I think thats an issue that we can all agree with. There are many other ways, i think, to make the fcc more transparent. I have suggested, for example, that for example, that i have concerns with staff changes that take place after votes are have already been taken. I think all commissioners should be asked, should be able to ask for a vote on any order of bureau passes. Commissioners should be able to collaborate more freely, and i think any rule that impacts the economy by more than 100 million should be subject to a cost benefit analysis. Commissioner oreilly, i believe that that would make or increase the transparency and the collaboration of the commission that you have. But i guess the question is, one, do you agree with that, and two, are there any other suggestions that you believe would add more transparency . So you suggested some really good changes that i would hardly agree have advocated. I should make it clear, i dont think it is reflective of the item that weve just talked about. These could be these should apply across the board Going Forward. Its not just about Net Neutrality thats indicative of some incidents, but really should apply Going Forward for everything. Certainly on a 21day availability. But i have a host of ideas that i think would help in my time being on the congressional staffer and now being someone who has seen this for about 15 months. One, and you highlighted the delegation issue, but one interesting you know, we have an ununiform situation now, where its caught our 48 hour rule. And in some instances, were notified that we have 48 hours were basically given a headsup for 48 hours, but only in certain sentences. Sometimes its 48 hours, sometimes its 24 hours, sometimes its zero. I got an email on the friday from one of the bureaus that said, as a courtesy, were letting you know. Its a courtesy theyre letting me know what they are going to do. And i think thats the wrong approach. I went through the process to get on the commission, to make as many decisions as possible, and im happy to vote in a quick and timely way, but i dont think its something that is a courtesy im allowed to know whats happening at the commission. And we see that problem in the delegation area, where things get delegated in many instances by previous commissions, ands that i was part of. And now the Delegation Authority continues, and i dont even have an ability to track ways being decided by the bureaus, separate from whats happening at my level. Commissioner, thank you. I look forward to working with you. Mr. Chairman, i look forward to working with you on the reauthorization of the fcc. I do hope that some of these ideas, both myself and what the commissioner just mentioned could be put forth and looked at as we move forward. I appreciate the good work that you put into that already, senator heller, and look forward to working with you on it. Senator blumenthal . Senator chairman, thanks for working in such a bipartisan way on this hearing and on the bills that well be considering, relating to these issues. First of all, thanks to all of you for being here today. Chairman wheeler, i appreciated your remark about the wild and crazy ceos and the wild and crazy commissioners who might follow the present occupants of those offices. I want to assure you, no one ever asks us about the wild and crazy senators. Im not going to go any farther with that i want to express my strong support for the fccs open Internet Order. This decision was unequivocal, emphatic in its effect. It was a victory for consumers and innovators thats all too rare in washington these days. And i know that it will be challenged in the courts and i want to commit to you that i would be pleased to lead whatever amicus efforts that may be necessary to support it. I believe therell be a lot of support for such involvement by my colleagues, and i believe it is strongly grounded in the authority that the United States Supreme Court has provided, repeatedly, under chevron, most recently, under smiley b. Citi bank and you alluded to it in paragraph 329 of the order. I also want to express my gratitude to all of you in joining in the bipartisan vote to appeal the sports blackout rule they long called for with my colleague, senator mccain. We planned to pursue that issue in the fans act, because the sports leagues, unfortunately, have themselves continued to retain the power to blackout games through their private contract agreements and my special thanks go to commissioner clyburn for starting the proceeding, commissioner pie for going to buffalo and announcing your opposition to the blackout ruling and chairman wheeler for focusing the agencys attention on this issue. I want to express to all of you the action that youve taken, strong and, again, emphatic action on cramming. And particularly to commissioner rosen for coming to connecticut and helping to educate consumers there about the pernicious effects of cramming and the attention that they need to pay to it, but, again, this action on stopping cramming through the settlements that you reach with at t and tmobile, i hope, will lead to rules that go beyond those settlements, as important as they were. I think that there need to be rules established and embodying the conditions that were expressed in those settlements, that require express consent from subscribers, before any Third Party Wireless company, any wireless carrier allows third partys access to their customers bills. Ensure Third Party Charges are clearly and conspicuously identified on bills, and provide free service toll consumers to block those Third Party Charges, should they choose to do so. And i would like to know from each of you, you can say simply yes or no, whether you commit to updating the fccs rules to apply these requirements to the whole Wireless Industry and ensure all carriers protect their subscribers from all of these kinds of deceitful practices, rather than profiting from them. And im assuming that you would agree, and you can indicate simply, yes or no, commissioner clyburn. Yes. Yes. Yes, cramming is pickpocketing and we need to stop it. Yes in two flavors. One is you suggest and two were going to keep enforcing. Thank you. And i hope that it will be possible for those rules to be promulgated. I dont ask for a firm commitment, mr. Chairman, but im hoping by the end of spring, that we can anticipate those rules will be on the books. I would like to just turn briefly to the comcast time warner merger, as the fcc reviews this merger, i would like your assurance, mr. Chairman, that you will take into account anything that the fcc can do to protect consumers. Because i think a number of us are concerned about the potential increases in prices and reduction in Consumer Choice that could come from continued excessive consolidation in the broadband market place. So senator, as you know, this is an adjudicatory proceeding and i should not opine, as were sitting in judgment. The responsibility that we have is to make a decision in the Public Interest, convenience and necessity. That will be the basis of our decision. Nart senator markheed and then senator garner. Thank you so much. And i want to congratulate you on your decision. I think its very consistent with the positions that the fcc has taken over the years and including what you mentioned in 1993 about the light touch approach for the Wireless Industry, under title ii, that o; led to an explosion of hundreds of billions of dollars in that sector. Thats in the best tradition of what the fcc does. And i think under title ii, youll be able to continue that as well, ensuring not only that there is a robust competitive market place, but also that privacy is protected president that the rights of the disabled are also protected. To be shoo you are that additional protections are built into the law. I have a letter from 140 efficacy groups and companies, that support the title ii decision of the fcc and i have unanimous consent. Without objection. Thank you, mr. Chairman. So i would like, if you could, just to talk a little bit more about title ii and how in fact, it was rate regulation that made it possible for there to be a universal phone system across the country. And without it, and the subsidies that flew, that system, that we could not have had universal service. But that the opposite here is the goal of the fcc, in terms of, in terms of your intention to use the 1993 wireless precedent, as the approach which you think is wisest. Can you expand upon that again, mr. Wheeler . Thank you, senator. I think theres two historical approaches here. The first is the internet wouldnt have existed if the fcc wouldnt have required that Telephone Companies controlled who was able to attach equipment to the phone network. And it was those old screeching modems that we bought and hooked up to our first generation Home Computers that allowed the internet to begin to take place. And so the root of the internet is in open access. And then the question becomes, okay, how do you balance out the fact that there need to be Consumer Protections is, at the same point in time, you want to be incentivizing competitive construction of everfaster speed capabilities . And, and it was clear that and as everybody knows, i had an evolutionary process in my own thinking, on this. And the realization that in 1993, what you had structured in the, in section 332, produced the kind of success where there was not rate regulation, there were not all these things that used to come with this old structure. And the most important thing there, senator, i think is that, is that, is the realization that on the day after this order takes effect, the consumer revenues for the isps should be exactly the same if not better than the day before it took effect. Because were not touching those. And one of the things thats key here also is that, you know, when the president made his announcement and joined the 64 members of congress, including you and many on this committee, who said that we ought to be doing title ii, the following day, stocks went up. And so if the concern was that there is a negative impact of this kind of light touch regulation that allows rates to be set by the market, not by government officials, if there was a concern that that was going to have an impact on capital formation, it certainly has been disproved and disproved again after we made our decision, and the stocks are beating the s p. And if i may say this, what weve done is weve created, you have created, a more predictable investment environment, where we know that 62 of all Venture Capital in america two years ago went to internet and software companies. Knowing that they could get in, reach their customers, that there would not be discrimination. That there would not be throttling and blocking, that they could reach their customers. Thats where the energy is, thats where the growth is in the sector, and youve done a great job in identifying those tens of thousands of companies that are out there. And similarly, i just want to say here, that the internet tax freedom act originally passes, you know, 1998, and prohibits states, local governments from taxing internet access, electronic commerce. Its reauthorized every few years. And as an internet tax Freedom Forever act, that senator thune has introduced, that im an original cosponsor of. So i think we have to be careful in this area, and i would just say to you, commissioner rosen, that youve done a fantastic job. The whole commission has, in focusing on erate. As we pass new trade bills, as we speed up the pace of change in our economy, we have to paycheck sure that we speed up the pace at which young kids get the skill set they need, for the new jobs in our country. So if youre thinking about ttip or ttp and you want to speed up the pace of change, you have to speed up the pace of change for kids and by raising the erate from 2. 3 billion to 3. 9 billion per year, youre going to close that homework gap and make sure that the kids in the poorest cities in town, poorest homes get access and the skill sets they need to compete with the smartest kids in the world and i congratulate you for that, because its a vision of what america has to be in this global economy. Thank you, senator markey. Senator gardner . Thank you, mr. Chairman, for holding the hearing today and thank you to the commissioners for joining us today. Chairman wheeler, i know chairman thune covered this, so i want to reiterate what he said. Last year i led almost 90 members of the house and members of congress signing a retro, for a rural rate of return carriers that would encourage broadband adoption. I know senator thune led that earlier. And i wanted to reiterate my support for broadband areas that truly need it. Can i have a commercial here . The same unity your answer did earlier . Yes, sir. The answer is yes, sir. We are going to do that. Very good. We need the great thing about the rate of return here is that there are these small, vibrant, heart of the Community Organizations in very small communities. Getting accord amongst them as to the best way to help them do their job is worthy of henry kissinger. And i hope that we can have the help of you and senator thune and the committee to help send a message that says, hey, folks, it is time to quit bickering over details. Lets have a common approach, because were going to move and well make that decision if we have to make that decision. But it sure would be good if we understood that the various segments of the industry could pull together and say, hey, this is the sort of north star you should be guiding to. Were so close together, i feel like we should be having a cup of coffee. Want a beer . Ill take that. Commissioner clyburn, if theres one thing the fccs title ii proceeding displayed, this is something senator heller talking about earlier as well, the need for greater transparency, for an order with such sweeping regulatory reach, it makes little sense that the general public did not have access to the text of the order until two weeks after the Commission Voted on it. My commissioner to you, commissioner clyburn, is this, should the fcc publicly release items put on circulation prior to a commission vote, especially those that significantly impact the economy . One of the things i like to talk about in terms of this process, it is one of the most open in the world, we had a notice and 4 million comments that allowed people to weigh in. One of the things im also cautious about, when we talk about and im open to it, any type of, you know, ways that we can improve the transparency and the like, is, there is a deliberative process that takes place among us, that i would love for that to continue. I am able to speak in unbridled fashion, and one of the things im worried about, in terms of releasing things, prematurely, what i would say is prematurely, is that could be compromised. If i have a question or concern, or want to get some feedback, i would not like for that to necessarily get out before i come to terms with the exchanges. There are apa issues. Real quasijudicial body, and again, abide by apa requirements, and although those things, i think, need to be fleshed out before we make any type of move in the direction thank you, commissioner clyburn. Commissioner reilly, i know you spoke of this. Commissioner pai, would you like to add to this . I agree that these documents should be revealed at least three weeks before the commission votes. I pointed out in this particular case, the fact it wasnt revealed, created a big haze of confusion, both among Net Neutrality supporters and opponents. And what you saw in the days leading up to the order, a substantial portion of the order was revised, with respect to the socalled Broadband Access service. Theres a great deal of press interest, and if you google it, youll wonder, what does this change about . How does it affect the order . How are we going to respond to it . But because of the sunshine prohibition, none of those people were able to have any input. If we had our product on the table on day one when it was circulated, the American People could see it and ultimately it would have made our work product a lot better. It would have helped it be more legally sustainable. And im running out of time here on a couple of questions, so perhaps we can work on answers for the record. Talking about petitions, a number of petitions before the fcc, u. S. Clarity, petitions for reconsideration or forbearance petitions. Other petitions that have been before the fcc and wondering how we can make sure that these petitions are addressed in a timely manner. Perhaps you can get back to me on how we can what internal processes should we change at the fcc to facilitate, to have a more timely processing. And one last question. Chairman wheeler, 25 million was transferred out of the fy 2016 budget. From the universal service to secs general budget. Im concerned that that could affect something that im very, very concerned about, and thats rural funding usf issues. Chairman wheeler, what additional, not ongoing, Agency Activities will this funding shift pay for . Well, its a proposed shift. And the attitude is this. The idea is this. The money has to be spent. That kind of money has been spent traditionally on the activities of the wireline bureau, the wireless bureau, and others on usf. We fund our auction activity through the revenues from auctions. The question is, why should universal Service Activities be funded by people who are not involved in universal service. So why should a broadcaster have to pay fees for programs theyre not involved in . Why should, you know, some marine licensees, why should, you know, et cetera, et cetera. And so all this was, was an attempt to say, okay, how do we make sure that they are balancing each other out . Because its it has to be paid. And if the decision is that the Congress Wants to say, hey, yes, you ought to make sure that broadcasters pay for this, so be it. What we were trying to do was to say, what makes logical management sense . So let me just clarify. The 25 million isnt dedicated to anything, its just being put back into the general budget. The money the money gets spent, okay . So the question is, does that money get raised by the general assessment that goes against everybody who is involved with the commission. Or does it get raised by through the program that it relates to. And, you know, there will be a significant decrease for broadcasters, for instance, if they no longer contribute to something that they do not participate in. Thank you, senator gardner. Senator booker . First of all, i want to say thank you to all five who are serving our country. Often debates in congress get personal. But every one of you have done a Great Service in trying to achieve noble aspirations and noble goals and im grateful for your work. Some of the issues that individuals have been bringing up have been really important to me and they wont get headlines. Honorable clyburn, criminal Justice Reform is critically important to me and what youre doing through your advocacy with your fellow commissioners and with the chairman is, to me, absolutely essential to end the nightmare of broken families and those linkages that are so important for us to bring justice back to our legal system. I just want to jump in and really, commissioner wheeler, give you a chance to just address some of the things that i hear said, consistently, that i see no evidence for, whatsoever. And i would just like to give you a chance to talk for the brief time that i have, a little bit about this idea, that somehow what you did was antibusiness. That somehow, it undermines the ability for companies to thrive in this market place. Some of the other folks talked, im a passionate believer in the importance of us to have a free and open internet, Net Neutrality. It is critical for the growth of the american economy. And more importantly, as i work with kids, especially urban kids, and see that those skill sets that they can learn, the democratizing force of internet access, to democratize education information, job opportunities, business opportunities, access to capital, all that excites me. And so as a guy whos kind of probusiness, i wonder if you can, can address the issue, because when i read that tmobile, google, cablevision, windstream have acknowledged that using title ii with forbearance doesnt change their investment plan, executives at verizon, folks many my state, comcast, Time Warner Cable charter have said the same thing to their investors. Not going to undermine their investors. Wall street and Capital Markets barely noticed the title ii news. Thats because investors understand the order and the title ii framework does not regulate rates or impose other socalled utility regulations. So wall street didnt budge. The heads of companies that i know and talk with on a regular basis say its not going to affect their behavior. So what these rules do plain and simple is keep broadband providers from discriminating. Would you address the mountain of evidence rebutting the speculation about investment harms . And i think that users deserve the right to an open internet, not just rhetoric, and how title ii, in a sense, does not undermine, but still actually, in my opinion, could provide an environment where theres more investment in the space. Thank you, senator. You know, i think it would be hard to find a bigger capitalist sitting at this table than me. I am a capital c capitalist and i have been involved in starting companies and helping build companies for most of my professional life. The key there are multiple keys to the success of risk capital enterprises. One is that you have to have access to the consumer. I mean, the reason that steve the reason that steve case was able to build aol as he was is because he had this open network that would scale like this. And, you know, he could get six people over here in some place in new jersey and seven people in boston and a couple of people other in albuquerque, and excuse me, i keep and out of that build a whole company. If he would have had to go that they deserve because that is the only reason they will invest the capital to build the pipes to begin with. That has been a tleshold issue with me from day one of this topic. And again, i come back to the model model they have used most successfully and not having rate redlation. Not having something and unbundling it, a structure that encourages the investment. Thirdly, that that is a reality that has been proved out by the market. As you said, sprint says this works for them. Tmobile says theyll invest. Google fiber, who has never been regulated under title ii, says of course well continue to build. Cablevision says, its not going to change our business practices. The small rural rate of return carriers that weve been talking about here in this hearing, they filed in support of title ii with us, because i think everybody understands that appropriately done, title ii provides certainty and serious opportunity for concern. Im going to start you there. Ive seen the chairman bench press. I dont want to tick him off thank you, senator booker. Thats quite a statement from senator booker, too. Im not cory gardner. I just got moved up from the kiddie table here. Its good to be up here. My background was 12 years in Technology Cloud commuting, we took public and we were part of the free wheeling wild west of the internet and see what does that for innovation and Value Creation here in american jobs. Im up with that believes unconstrained innovation, speed of light commerce, and im just hoping that the only constraint that well see in this incredible story with whats going on with the internet is technology constraints, but not regulatory constraints. So it just gives me pause. And i heard, you know, i have Great Respect for my friends across the aisle here, and some of the proof points ive demonstrated in terms of the Capital Markets didnt move with these announcements. The ceos saying things will be okay with some of these companies. Im more concerned about where this all goes longterm. There have been a lot of hearings in washington. Whats began is well intentioned and good idea, turned into overreach. I had not seen many federal agencies and regulations ever diminish. They tend to only grow. So im looking here for kids and grandkids here, where this all heads, because i think weve got something very, very special here in america, which is this free and open internet. So with that as background, i do want to shift gears and talk about the transparency and accountability of the fcc. Im concerned about the commissions routine practice of granting broadband editorial privileges for staff beyond, the technical and conforming edits. Commissioner oreilly, in your testimony, you discussed the problem with these broad staff editorial privileges. Could you describe some specific examples of what needs to be addressed to describe a transparent and open process . Sure. Ive had difficulty, in the last meeting, the chairman asked the bureau asked for rights to editorial privileges and i objected. And they are actually not contained there are no rules on what we have. Theyre just practices that weve written down in this commissioners guide to what the agenda meeting should be. So what ive suggested is, one, we ought to codify our practices here, rather than just have them as freeflowing. But two, ive had a problem with the practice itself, because whats been encompassed within editorial privilege has been changes to the text itself, and substantial changes. In fact, early on in my time, the changes were quite i want to be careful in my wording, but they were quite negative to one of my colleagues, in terms of what was what the changes that were being suggested. Im like, its unnecessary to criticize another one of my colleagues when its something i had voted for. Its unnecessary to do that so look that line, were there staff editorial edits made to the open Internet Order after the Commission Voted on february 26th . Yes. Were you allowed to discuss those changes made to the order . I think that i can suggest there have been changes since the item we voted on and the item that was released. One of them was that they, you know, effectively had to backtrack on the chairmans speech regarding the as i pull out the specifics here, regarding the peering issue. He had argued that it was going to be done separately and not part of this item, and the interconnection issue was going to be separate. And here, they actually put a footnote in and said, no, its actually contained in here. They had to back out their own statement. Just to be clear on that, mike, this, what youre quoting is a speech that i made over a year ago, in which i said. You know, im not sure that that i have been saying throughout this process, as we led up to it, that interconnection needed to be on the table. This was not an editorial decision that was made in secret. This was a policy decision that was put forth to everybody. Let me bring it back here. But can i also say, i would like to identify myself with commissioner oreilly and the points that he made in opening. He and i both walked in, essentially at the same time, and the same day. And were handed well, i was a couple of minutes let me ask chairman wheeler, then why did you choose to have the entire commission revote on the advisory order on march 12th, especially if the fcc staff made substantiative editorial changes. The changes that got made were changes that were in response to dissents, which we are required by law and in the spirit of transparency, can you make the order available to us . Sure, its on the website. February 26th. Its on the website, yes. The final one. Hes saying the one we voted on the day of. The day it was finally voted on, february 26th. The finally order is on the website. And thats the public i dont believe it is. Maybe well follow up on that. But maybe we could get to the bottom of that. The issue right now of transparency and accountability, even within the commissioners here the final order is not on the website . The document as we voted on, on february 26th, is not on the website. The final document, as required by the process and the law to prove the transparency around the process. So i would like then to associate myself with commissioner clyburn, who was absolutely right when she said, this is an editorial process. And going back and forth, if we open that process up, there are multiple things that are going to end. Markets arent going to understand, well, you know, commissioner clyburn wants to change glad to happy. Whats that mean . This is a quasijudicial rule that we exercise. We need to be going through and having an ability to have our own discussions. But 30 seconds more, sir. I think theres a misunderstanding that the end of the game is the final rule. Because what happens is, you put it out, publish it on the federal register, and the next thing that happens is people are going to file in reconsideration. And reconsideration is the entire decision is out there for everybody to see, and then the public comes in and comments and says, no, we think you ought to reconsider this and were going to have to vote again. And im out of time, but let me summarize by saying, you know, the stakes are awfully high, as were looking at something, instead of stepping into title ii and to the internet. And i would hope we could Work Together here to improve the accountability and transparency of that process, so that we one, can ensure we have trust as well as better outcomes. And with that, were out of time. Senator schotts . Thank you. Chairman wheeler, thank you for enduring todays hearing and yesterdays hearing and thank you to all the commissioners for your great work, we really appreciate it. I want to thank the chairman for the bipartisan process that hes undertaken, to explore the possibility of legislating in this space. Im not clear that were going to be able to get there, because i think that we dont have a meeting of the minds, even on the kind of basics of a negotiation, which is to say, its hard to imagine that president obama or house and Senate Democrats would agree to legislation that would undermine the basic principles of Net Neutrality. I think there is some openness among some of us, to enshrining those Net Neutrality principles in statute, but if were unable to kind of reach Common Ground in terms of the beginning of a negotiation, im not necessarily hopeful, but i think it is worth exploring, i think it is worth discussing. Im a little concerned about the litigation risks, not just on the title ii side, but on the forbearances side. So i think its worth exploring, but i also think we ought to be direct with each other, about whats realistic, in terms of a legislative strategy or a litigation strategy. And im not sure at some point, were not going to have to decide which it is and whats the most practical course of action. Can you tell me, mr. Wheeler, how you arrived at the forbearances . Did you sort of start with the Net Neutrality principles and then forebear everything else, or how did you arrive at