Fundingirement for first net. Weve also initiated a further accuracy,location because as wireless usage particularly as it wire linehats connections inside and as g. P. S. Increased, theres been a fascinating reality that location accuracy is actually declined. And weve got a notice going on how do we address that, because matter of life and death. Theou mentioned, we began 2014 review on media issues with expedited delivery date. We closed a loophole that was being exploited to get around the ownership rules using joint agreement. And we brought competition back to the retransmission consent negotiations. We have also continued to press issues that so many of you and i share in important. Eing last time we were together i told you we stood up a task this. To deal with they came back with 154 threeendations, about quarters of those are well along process. To being in they break into two parts, there are procedural issues that you thet associate with administrative procedure act and how do you make the agency more efficient. Week, as many have proposed, we opened a rule making on protecting the open internet. Recognize thatto there are no protections for an today. Ternet in place the january Court Decision affirmed the commissions authority under section 706 to with the open internet. And identified what i call a road map for how to achieve that. Have proposed is a roadd that follows that map. I understand that there is a great debate on this issue, i the debate here this morning. Between those who say there is and those who say it ought to be a regulated utility. What weve tried to do is to follow the courts direction, the map, the blueprint, and to come up with a proposal that blocking, that prohibits anything that degrades a consumers access, including prioritization. Asks a broader question about prioritization as to banned it should be outright and if so how. Then engages in the discussion already thisard morning about title 2 versus 706 collecting a broad scope of that. D information on ive consistently said that only one internet. Theres not a fast internet and internet. There is not special Services Internet and non. There is one internet. Consumer buys access to the internet, they are the fullcess to internet. And thats what our rules to protect. This has become a debate among about legalches approaches. Its a healthy debate. Our notice ofthat proposed rule making furthers for multiple requests input. But my position has been similar to that of the Consumer Federation of america, and that is that we ought to explore the powers that are granted in the sectionspecifically 706, keep asking how tight 2 in, but develop a regulatory policy that looks forward not back yard. We need is a regulatory plan for the 21st i look forward to discussing that with you, mr. Chairman and members of the committee. Mr. Wheeler, thank you for being here, we appreciate your work and your willingness to spend some time with us and respond to our questions. On the middle up class tax relief act which is designed to create a forum where broadcasters could volunteer auction. Ctrum up for never been done quite like proposed and we all knew that going in, but it seemed like a good balance. This wasterm in all of that the broadcasters would volunteer to put their spectrum forced intoldnt be it. That was the agreement. Yet many of the actions that thee seen coming out of commission would lead some to believe that the f. C. C. Might be bullying broadcasters into giving up spectrum without providing hard data and clear broadcastersat the can thoroughly deliberate and choose to participate or not in this. Let me tell you what im thinking here. For example, the joint sales nowements that are outlawed, these agreements essentially offer broadcasters a in smallsiness model markets that would otherwise suffer from lack of service. Considering increasing the attribution value of stations such that more broadcasters could end up in violation of the national cap under the broadcast ownership rule. F. C. C. Has failed to broadcast petitions for changes to uhf even though the petitions were filed prior to relief act. Lass tax finally youre seeking to use a imfied version of oet69, hearing about this, to repack inadcasters, likely result reduced coverage for broadcasters that choose to stay in the business, making the less viable. Lf so youre trying to put spectrum be available will for auction, i think are concerned about where the headed in a number of areas. Can you explain how these actions will encourage inadcasters to participate this auction . Thank you plrks chairman. Think the goal here that weve not toying to follow is discourage or to encourage, but follow through with our. Esponsibilities forcing andns in updating thingsthink any of these ive just cited encourage broadcasters to participate more . Broadcastersve showing up with spectrum thinki said, i dont that we have an important issue set, role. Ortant and historic this is an incentive auction. Im aware of that. What we have tried to do in the mobile Spectrum Holdings instance, is to encourage broadcasters, en wirelessim sorry, carriers to buy, which creates the incentive. There was a report by one of the wokestreet analysts last who said we expect the greatest risk to this auction, showing up, not just dropped. At tse the fact that suggested that they are ready toed by between 9 and for 20 to 40 megahertz, this analyst said send positive signals to broadcasters. Goal is to create this marketplace, and were not trying to take regulatory action in unrelated areas but you are taking lots of regular willer to actionings, and it does have an effect on marketplace. Those two are a fact. The quadrennial review not complete, new decisions being made on ownership. There. Hings are out if we dont have these broadcasters coming to the table voluntarily, there wont be available. So i want to steal a line from the distinguished gentleman from mr. Dingell, to see if i can get some yes or nos here. F. C. C. U commit that the will not Score Television stations base on their enterprise value . On their enterprise value, that is not our intention, sir. No. O thats a will you thats a yes actually, that you will commit that you will not score it. You commit the f. C. C. Is that correct . Yes. You will commit the f. C. C. Ensure the broadcasters cost to reallocate are covered the 1. 75 billion Relocation Fund . We believe that that fund will be adequate. Thats what Congress Told us to spend, period. Will you commit to completing frequency coordination with canada and mexico before the auction . I think the issue there is what is the determine complete. Dtvou know in the transition it never came down to actual signing on paper, but we each other were and i am very confident that well be at that kind of point. You commit to revoking only those low power tv aretranslator licenses that necessary to complete the auction . Yes. You. Ank i think im out of time. So would now yield to california. Ady from thank you, mr. Chairman. Butt of things to discuss, bore down on, or bore of the particulars on recent proposal relative to the internet on Net Neutrality. Argued many advocates for have argued that paid prioritization represents a fundamental departure from the internet as we know it. What isd of restating obvious, but i think that when have hundreds of thousands of people communicating from on it the country to you that it is its important to raise. Now, as a policy, not as a legal think that paid prioritization should be blocked outright . I have said, congresswoman, that i dont believe there ought to be haves and have notes. No no, just answer my question him do you think it should be blocked outright . We have asked that question making. Ule id what i have said is that believe that under section 706, is anticompetitive anticonsumer is competitively unreasonable and therefore can blocked. D be and that becomes the trigger for deal with paid prioritization. The question per say that you asked, weve specifically asked how and whether. Now, what happens if the f. C. C. Determines that theres to outright no way ban on theseright paid agreements under 706 . Does that leave you, where does that leave the country . So, when the court gave us talkedtructions, they about what they call the virtual that is that content conduit,e need for which then creates the opportunity for content, and it ishis cycle is what our responsibility to protect. What 706 authorizes us to protect. So what my proposal is, is that we take them up on that and we if there is something that interferes with that virtual i believe paid prioritization does, that then move against it. Now lets move over to title 2. Title 2 is described, it depends on who is describing it. Either a scourge, its been compareed to the Early Railroad our country, to flip side, you know, title. Ior i talked about in my opening about the, one of of the of the internet has been consistent innovation. That, ande are those i understand why people would theyto title 2, because want the internet protected. And these values, theyre worth protecting. But i also believe that there is room for, in title 2, for heavy handed regulation. And i dont think that, well, way. E put it this light, that we need a restraintful legal touch in this because the values are so essential and people across the country and the world, im hearing from people from different parts of the world as are call for these protections. Envision, how would you handle constraint 2 . Er title well in terms of being the chief regulator. Have you given thought to this . Yes, maam. As you know as some people say, share it with me. Know, title 2, theres nothing in title 2 that prohibit prioritization. We have all kinds of paid prioritization. Me byre worrying bringing that up first. But go ahead. Theo, because it goes to root question of yours which is how to you forebear from that, okay. And so it is possible to go and say yes, we will not do this, we will not do this, we this. Ot do in the wireless context, interestingly enough, congress created wireless as a common specificallyhen said, but this doesnt apply and this doesnt apply and this doesnt apply. We can do that as a commission as well. Proposed that thats an approach to take. Throware also those who up their hands in great concern over that because they say, may, well, this commission do this, but what about the next commission. A futureant bind commission by making those kind determinationings. So what we have done in this is to ask the specific section about heres 706, heres title 2, lets compare and con trust them with tell us what the plus excess minuses and the best are. To get through this and i think that leads us to the kind of answer that youre today. For to the gentlew lady from tennessee, miss blackburn for her questions. Thank you, mr. Chairman, and mr. Wheeler we thank you for taking the time to come and be us. Youve got a feisty term going f. C. C. , and inhe tennessee we would say youre dust. G up a little and its causing concern. Many much our content creators amount ofmendous concern about your approach, and many much our health care are looking at apps and tele medicine concepts of that nature are also expressing concern. Think that probably your actions have inserted a good bit of uncertainty into the Innovation Sector that is looking at how we best utilize all things internet for quality economicnd access for development for health care, for innovation. A couple of just simple questions for you. First of all on cost benefit analysis, and i thank you that last night your team sent a to us on that question, but what concerned me that in the letter you say that this is just a tool, cost benefit signal says is just one many tools that would go into doesdecision and your nprm not include an initial cost to benefit analysis. Predecessor, in this came before us and assured us he was going to why this and im actually going to his statement that he gave to us. He said during my tenure ive thisparticular focus to process including the by directing the early involvement economist in the analytical process of rule f. C. C. And by having staff consult with the staff of the office of information and Regulatory Affairs on best practices in conducting cost benefit analysis. I think that it is an incredibly important component of this to look at what the cost beNet Neutrality rules would to the consumer and also to industry. You, are to know from you going to give us a commitment right now that you a thorough and extensive cost benefit analysis actual cost to the consumer and to industry on these rules . You, miss blockburn. I agree that cost benefit signal decisioncrucial to making, and in this rule making we specifically ask what are the of one approach or another and what are the benefits of one another, so that we can collect that information and have that kind of analysis. I agree with the importance of analysis. It okay, let me ask you this also. Funding reallys comes from those that are by the f. C. C. , but we have some that are not. Are impacted by this, but they are not regulated in paying fees, so in the Net Neutrality context, for example, Companies Like google and netflix want the f. C. C. To act and petition or visit the agency, if you will, those efforts. With a free ride, because they paying the fees and bearing that part of the regular willer to burden. Since they seem so ready and rely on regulation to help them, with their business recommendw would you that those entities share in the their part of the agency. Ding the with all respect, thats above my pay grade. Decision that this committee and the congress can rules setting those im asking what your recommendation would be. They come and they lobby you, netthey are pushing the neutrality rules, and while they sayinge what you are because they want you to step in, we have a lot of people out fees who are paying the that are not in favor of what you are doing. Innovators a lot of who are not in favor what was you are doing. And your door has the name on it. N so im asking what is your perspective. So our effort in all of this is to represent the American People, not company a or company b. We have been told by the canress, from whom we collect regulatory fees, and we there is a decision that we should collect regulatory somebody else, thats something we obviously will take. If there is a decision that we should expand regular willer to authority over other entities, obviously something we should do. But that is a decision that is hands. Our i yield back. Chairman recognizes the california,from miss matsui for her questions. Mr. Chairman. Chairman wheeler, id like to understand given the success of the internet in the absence prioritization precisely what types of paid prioritization you theef would speed deployment and adoption of broad services. Net access given that pay privatization areements would be used as barrier of entry to startups and what business, prioritization arrangements internetbetter for the than the norm we have today . Are trying to do in this item is to say that that affects that virtuous psych theyll the court talked aboutand i before, is not appropriate, is and that would include paid prioritization. The court told us to look at this on a case by case basis. Asked the question in the raoul making as to whether at it generically and say its all out. And were soliciting comments on that. But the concept of paid prioritization. When i buy Internet Access, i am the full pipe. Everything access to thats out there. And if somebody comes along and says oh no, you cant get this unless you pay more, thats unreasonable. And should be banned. If somebody comes along and says provider, you cant get on unless you pay more, thats unreasonable and that be permitted. Well, as for my part, other safety, i believe paid prioritization should be banned. I think theres a concern that fact that theres so much uncertainty with paid prioritization is troublesome. This concept moves forward, we could inadvertently block the or amazon from the market without even knowing it. Im concerned that your hand may tied here, even if the banission wanted to anticompetitive paid prioritization deals, you may so. Are the authority to do were to wheeler, if you explain to my constituents what is occurring in the market right the two mergers, content and pairing agreements prioritization, could be legitimized under a commercially reasonable tellard, what would you them . Not just what it means for them, also for competition and for economy as a whole. I feltuld tell them that priorityization was commercially unreasonable and dealt with. Uld be question ofthe peering that that is a separate issue that the commission needs will be looking at. That i amd emphasize a strong supporter of the open internet and i would also tell a story that when i was an out ofeneur, i was shut Cable Systems because they were networks. And i would come with a new on. Uct and cone get and then when i was a venture thisalist before taking job, that the companies i was backing had to have access to the internet, could only succeed thehey had access to internet. So i would say to them that i an open internet, experienced closed networks and the harm they cause to innovation in that i want to an openand preserve internet. You know, i think this is a critical time. When i have ordinary people asking me about all these things theyve heard. Today reallye depend on the internet. Ordinary citizens, the entrepreneurs who are concerned about this. And who else we may not know out there. So its very concerning to all a potentialhere is that we may have a situation an open wont have internet. To i would also like you consider some of these mergers. We feel like were in the wild the Digital Economy now, and now with mergers coming forward. To us thesecommit large mergers that are before different from each other, but can you commit to us here that the f. C. C. Will carefulfully scrutinize these deals with a focus towards Public Interest. Without hesitation. With complete after i wentation affirmation. Chairman now recognizes mr. Bar to be for his questions. I want to echond the last question you asked poweran wheeler about low television. You and i are working on a bill them someto give protection, we understand under havent law they dont standing when they repackage. Somee hope to give them priority or some help if and when we do do these repackaging spectrum. So i want to commend you for are that last question. Chairman wheeler, and my friends on the democratic side, repeatedly talk about the open internet and whether you should try to regulate it under section 706 or title 2. I think youre asking a false question. The internet is open. Question is what does the f. C. C. Do in terms of monitoring make sure that it stays open. Usethe analogy im going to is not perfect, but i think it and educational. The airways that we fly back and to ourrom washington districts are open. Regulated and monitored for a number reasons by the f. A. A. Call up American Airlines and i say i want to go from reagan to d. F. W. , they quote me a price, lets say its 350 one way. When i show up with my ticket, i that plane, in dont get to take 100 of my friends and put them on the because i happened to buy the ticket first and show up first. So its obvious that it would be great for 350 if i could fill the plane. But we allow the airlines to price by volume. You want one ticket, its 350, two tickets, its 700. Maybe if you want to buy the aole plane they do give you discount, it only 250. But we dont let the first to buy the ticket use the whole plane for 350. Aboutr all the bold talk open access what people are do is i want to pay a minimum price and get on band and i want to download everything from net flicks and i dont want to pay i downlow every movie they netflix vice verdict a, bays a basic price and they can people,10 million instead of whatever it would be. So the broad ban providers who billions and billions of dollars and have networked and provided access through the competitive market s are not going to decide all of a sudden as long as the f. C. C. Under your chairmanship makes sure that it stay is a competitive model, theyre going to continue to provide an open internet, but they may want to provide based a volume of use some sort of Pricing System that allocates that if it is in a limited spectrum. Try to shoeson to horn some sort of a regulatory approach into either tying 2 or section 706. To me why my approach, which is what weve been doing, is the wrong approach. Let me see if i can respond your question. F thet on lptv, as i said to chairman, we do not want to move those who don have to be moved of it. We also believe that there is to go to digital and the new efficiencies that it did ins, just lick the class a station. And thirdly worry opening a new rule making to specifically deal that. So because we agree with the importance of low power and translators. The second part of your question, let me take the chairmans hat on and put my second, hat on for a because two weekends ago i isp and increased my capacity. Wanted faster throughput. And they said for another 10 bucks a month well give you another what turned out to be like 20 meg. Thats a marketplace transaction. Thats something thats accepted now. That is not something that is the open internet rules. What the open internet rules are is that when i buy capacity, i bought that the to every place on internet. That somebody cant turn around but you cant get that. Or somebody cant turn around you can deliver that to tom, but youve got to pay me an extra fee. And so the concept of the open boughtt is that i have this broad pathway, and i have it unfeeterred, basis. Pen and thats what were trying to in this rule making. Im not try my time is expired. Trying to oppose that. Lookingou want, youre at it a from a consumer standpoint and i accept that, that everybody should have access. But if you were a provider of content, you should be willing to pay more based on the number of items youre going to put at given time on the open internet so that everybody has access to it, because if you constrained pipeline somebody has to make a decision how you put things into the pipeline, whether its the airplane or whether its the air or the internet. I yield back. Chair now recognizes the on thechairman democratic side, mr. Waxman. You. Ank chairman wheeler, i commented your leadership earlier in my theing statement about spectrum auction. So i want to ask questions about a different subject and thats Net Neutrality. I commend you for tackling this issue and for seeking comment on range of issues, but i have serious concerns about some proposals that have been discussed. Youve said that there would be presumption against broad band like verizon, at t and comcast, entering arrangements that give exclusive advantages to their affiliates. Is that right . Yes, sir. I dont understand is why this presumption against exclusive arrangements would be to affiliates. Netflix entered into an exclusive arrangement with at t for faster speeds for its videos that blocked amazon primeike from getting similar services. I think that would be a serious to competition and an open internet. Yet your proposal does not a presumption against these exclusive arrangements. You allow any exclusive arrangement that guarantees some content faster speeds than competitors can access . Thisank you, mr. Waxman goes back to this Virtuous Cycle the court talked about. Yesterday insting, the wall street journal there was an article that interviewed of infrastructure manufacturers about the impact neutrality. And they flat out said that if offer fast lanes for some, youre going to degrade service others. I think thats at the heart of what youre talking about here. Commercially unreasonable, under our proposal. Okay. The problem with exclusive arrangements is they would let theirompanies block competition from similar advantages in markets where is no limited choices of wouldand providers that stief openness and competition. I just want to say that im of paidto any form prioritization. Paid prioritization divides the internet into the haves and the notes and will en trench the Big Companies at the expense of startups. Is that youveg asked comment on a multifactor determining whether, determining when paid prioritization is permissible be prohibited. Ld my concern is that this will create a lot am big youdity and a lot of litigation. I believe bright lines would be market and for the for innovation. So im going to ask you to a presumption against all paid prioritization as you rules. Nal will you agree to consider this option . Absolutely. Have asked in the nprm whether and if so how do you accomplish it. Is a debate that is in the nprm right now, sir. That theerstanding is reason you have propose a complicated multifactor test is the court ruling. And i agree that if youre sectionto acting under 706, your options could be limited. But you are not limited to section 706. You could establish a presumption against paid prioritization under title 2. Thats why its important for to use your title 2 authority as backstop authority. Have to settle for a weak open internet rule if you powers. Your full and im graduated youre looking possibility. Let me close by thanking you for seeking comment on the backstop in the proposal adopted last week. Im committed to working with the Commission Adopts strong and open internet protections for consumes and while encouraging continued investment in the weine content and services all rely on and enjoy today. I think its important that we substance right. We tried three times, we meaning f. C. C. , because of the concern that the consumer to what is onss the internet and full access to the internet to its greatest maximum potential, to see that net untillity in any way be diminished if we have an under the law as we look at it to make sure that we get the substance right. Ohio, the gentleman from mr. Latta. Thanks very much for being here. Discussion onome title 2 and id like to follow questioning. That central premise of title 2 regulation has been that the substitute fora competition. Question. Ts, for the what types of findings has the commission made to justify idea of title 2 regulation of the internet, and then do you believe the f. C. C. Make a specific showing that of a market failure ray regulation reporting requirements that are the precursor to rate regulation. So, again, these are the kind questions that we have tried on,duously not to decide but to ask about in this rule making. Were going to have to make a on exactly those questions at some point in time. We want to achieve is a everybody theves opportunity to opine on that so appropriately informed. Whats your timeline on that then . Weve got 60 days for forents and then 45 days reply comments. Okay. So are you saying then that youre not ruling out rate regulation . Asked theing we have question about tight 2. The full panoply of tight 2, sir. Let me ask you this what have you been hearing from the far, especially when youre saying you want to ask those questions, what have there . N hearing out well, weve heard very little on the record thus far. Has been a great outpouring of people speaking to the press, people letters to us through and this sort of thing. Outset,icated at the there are two diametrically opposed positions. Do is that you should not anything, and the other is that it should go all the way to publicegulated like a utility. And our job is to find that which is best for consumers and best for encouraging investment internet, which itself is best for consumers. Thist me go on with question. While youve resolved some of in the 5 giga heard rule making, there are a number of issues that are the potential another 195 megahertz of spectrum for unlicensed use. And your plancs issue . K eking the open so you think about five gig bites. E in the middle of 5 gigahertz lots of National Defense kinds of activities, sort of thing. And the question is how can you arrangementsing there, and were working with those parties. Upper end is where you have spectrum that has been identified for intelligent around and that is based an 80211 standard. Feelings aboutg the need to protect that. I believe its possible to Work Together to meet both sets of needs since it based around a common 80211 standard. Me ask this last question, the f. C. C. s 2011 transformationce or transformation order requires phone Companies Set minimum they can charge their consumers. If the provider wants to samenue receiving the amount of fun to important the high cost of the business. Many of our rural consumers that i represent out from will see the rate go 14 to about 20. 46. Communicationings act requires rural rates to be reasonably comparable to rates in urban areas, reasonably thatrable does not mean the rural rate should be exactly the same as the urban rate. Then should the rate be the same, it might be be as affordable. The rates war will continue to a concern for many providers in my district, and others Rural America. I understand the fcht krment c. Theagreed to fiez in increase and postpone the start until after 2015. Can you explain why they reasonablyhe comparable rates to be exactly the same between urban and rural considering the small population rural calling areas and the is hat what thats an important question. So as you stated, were supposed things aree that reasonably comparable. The reason for that is to make sure that the subsidies that some americans are paying to otherr service to americans dont end up being subsidies that some americans paying to reduce the bills of other americans. Come the high cost of them. G to in some instances it has been unfortunately the former. In 16 states there are situations where consumers are some consumers are paying 5 a mob for Telephone Service. Beinge they are subsidized by people in your districts. D other we need to get our arms around that. So what weve done is to okay, step one is it goes into effect january 15, then, and that cant be more than 2, way, and then what were going to do is go back out with survey that hits the kind of granularity you the were about in terms of service and Long Distance and that kinds of things, so we have a better understanding of exactly what comparable means then look at that issue again. Thank you, mr. Chairman, my expired and i yield back. Chairmannow recognizes emeritus of the committee, from mr. Dingell. Thank you, mr. Chairman, i commend you for holding this hearing. Old friendelcome our mr. Wheeler back, a fine public certain van and were looking him. Rd to good things of week theyan, at last adopted a number of items Net Neutrality nprm and draft rules for theup auction ofntive broadcaster spectrum. Concerning the former, i commend to keep the efforts internet open and will be watching the matter closely as forward. Its my hope the commission will work with this committee to action itt any final takes to conform to its authority, especially concerning title 2, reclassification. Now with respect to the incentive auction im interested what the committee intends to do about treating broadcasters fairly. My questions will require a answer. Es or no yes, sir. Mr. Chairman, id like to begin with a parochial matter, section 6403b1 of the middle jobs tax relief and creation act specifies that the tomission may subject international along the border reassignco and canada and relocate and reallocate frequencies. Is that correct . Yes, sir. Wheeler, is the commissions response to my of inquiry about the reverse auction, gary epstein stated the following. Sectionuage used in quote,of the action is, identical to that used by the commission in describing its handing of the earlier dtv thesition in which Commission Adopted our proposed for these stations, subject to our continuing negotiations with canada, not with standing the broadcasters contrary. The one here could reasonably the statement,n that the commission may reassign broadcastcate pursuant to the act while negotiations with canada and mexico are still ongoing. Is that correct . Yes, sir. Im going to ask you to submit for the record how youre going to assure protection to the viewersters and in that process. Yes, sir much. Mr. Wheeler, does the commission believe that concluding negotiations with mexico prior to commencing the reverse action will give broadcasters, particularly in border regions, certainties and likely toincrease their willingness participate in such auction . Yes, sir. Now, mr. Wheeler, does the commission expect to conclude negotiations with canada and theco prior to commencing reverse action next year . No. Or the expectation is, it is the goal. You may not make it is that youre saying . A it is the goal, and is answer you will you notify this thatttee as soon as becomes likely or dangerous . Yes, sir. Now, in this matter, mr. Chairman, a like to state for the record that its my understanding based on exchange with counsel at the energy and subcommittee on communicationings and december 1, 2011, markup of the border of the act negotiations are to be completed before the reassigns broadcast channels. Wheelerhat chairman will honor that understanding. Mr. Chairman, you under i have great apprehensions about that because of the impact it have on the broadcasters. Constituents. Mr. Chairman, this is, i share your deep concern about this. Of the veryause legitimate concern you have about your constituents and other americans Getting Service that the border, but also cantilevering e feng then guess thect then goes about middle of the country. This is very high priority. Can also assure thaw our canadian colleagues have been and veryh coming helpful. I would like to are this the record. R now, mr. Chairman, i note that the Commission Proposes to use a called, quote, scoring, individual prices for each broadcast station participation, or participating the reverse auction. Is that correct . It is one of the things were considering. We have not made the final digs yet. There are others . Others. Looking at im going to ask that you submit in response to corresponds a proper answer on that. Yes, sir. Now, is the commission scoring ashat opposed to Competitive Bidding will decrease broadcasters willingness to participate in the reverse auction . Yes or no. No. Chairman wheeler, in general, do you intend to work in good broadcasters as a commission refines the rules for to see auction in order to it that their needs are met specifies to the best of your ability, yes or no. Absolutely. Want to quote admiral rickover who once observed the the details but so is salvation. Im hoping youre going to see is there andation not just that we are going to ourselves amidst trouble carelessness, not by you, but by some of your thannthusiastic and less exit predecessors. I thank you, mr. Chairman, and i yield back the balance of my time. laughter . The gentlemans time has expired. Now recognizes the yeah from illinois, for five minutes. Andhank you mr. Chairman chairman wheeler. Im going to tray to get through can. Quick points if i as you know theres a lot of concerns on this side of the dias. Premise is, for me, how do you build out. We want more, not less. Regulated monopoly incentivize more buildout or second. E the so thats weve gone from copper satellite, cellular, fiber, a lot of different ways to flow. And we want to encourage that think only, i kind of like the idea of incentivizing people want to use more, making incentivizee to those who carry someone may want to build out more, thats where i come from. My position is more pipes, not less. Regulated pipe. Competitive markets verdict control markets. Wire linethe Competition Bureau released a Public Notice seek be comment on state regulation of dieup internet traffic. Dialup. Thats a dinosaur, its hardly idea. So there is no, want to talk about uncertainty for the state, and for the providers, when in this process, more than 15 years after the f. C. C. First discussed the treatment of dialup, were now to this process . Just kind of a statement, that doesnt create certainty. Would you agree . Well, what were trying to create animkus, is to environment that assures consumers and those who rely on the internet that there is openness, while at the same encouraginge investment. Lets just go back. Dialup. At, but this is so if were dealing with dialup, a different topic. Abouthe whole debate certainty. If we have a dinosaur application, why are we even, so we still have 40 of our consumers on dialup telephone lines. The challenges that we have is how do we evolve that into an allism p. Environment, which would be an internet like environment. One of the things that i have thatto this committee is we believe this i. P. Transition part cial Public Service, 911, spectrum the creation of the do not call registry and the automatic dialing issue, the commission keeps saying theres not enough money to do this. I would ask you to check into that. Inhink theres a lot money the f. C. C. , and pause obviously dialing freezes up lines and its a public estate concern and i would hope we iuld Work Together to, would let me get back and i will that. Oo. Myself and the Ranking Member have been involved in these have in the early days also. The last thing i kindfrom Rural America is of there seems to be a defacto tremendous on this shared agreement. You representhen a third of the state of illinois counties, the3 shared agreements are now weveg to provide, and got real world cases, better folksservice to the local than less. Questionss the basic is whats your plan. They would come to the commission whichs with a black constantly changing oil. What i wanted to do was to say the things that we will look at. So that everybody has notice, everybody understands and it is not a black box. Thats the process that we have established to make those kinds of decisionings. Thank you, i appreciate it. In mind as these things move forward it would be helpful. Sir. S, the general it lady from colorado, five minutes. Thank you. To follow up on this discussion about the open nprm. Et leading up to the commissions vote last week there was a public ebbs change of isps and others about the onact of paid prioritization their business models. Ms. Matsui said, weve been hearing from a lot of our well. Tuents about this as now, you talked briefly about a ago about what the f. C. C. Is doing in its review process to look at the effect of consumersitization on broad ban bills. It wonder if you can comment on proposed open the on et rules will have they each should be anduragement of new innovative programming. What impact do you think that the rules will have on average broadband speeds Network Investments and overyall quality of service . Thats a terrific question. Thank you. Im glad you asked it. One of the fascinating things is that in 2010, when the rules were first proposed, since then there has been hundreds of millions of dollars of broadband investment made so the rules dont seem to have a chilling effect. And speeds have been doing this going up. And this is what the court was talking about when they talk about this Virtuous Cycle, because everything in the internet eco system, everything adds to everything else. So what do you think that the new rules, what effect will they have on these issues . I believe talk about whats been happening. We believe that the rules at we have designed will continue to encourage investment in broadband, continue to encourage increases in throughput, and as a result continue to encourage innovation from providers. Are you saying then also average broadband speeds will increase . Yes, maam. And overall quality of service will increase . Yes, maam. They need to. One last thing no one has raised yet is the issue of industry consolidation. And this year weve seen two major merger proposals in the telecom industry. Now, clearly the industry is going through a period of significant technological and economic change and some folks think that consolidation is the best approach. To this. So all things being equal, do you think industry consolidation is good or bad for the consumers . So i read the other day that in the ably the last decade the biggest year for telecom mergers. And what were doing is opening a record on each of them and well make that decision based on the record that is developed for each. So you dont have an opinion i would not want to prejudge the record. Ok. And as you know, congress has recognized the importance and unique character of the Telecommunications Marketplace by giving the f. C. C. The authority to review mergers under the public i want rest standard. Do you think the connections conditions the f. C. C. Placed were effective at promoting the Public Interest . Oh, wow. Thats a decision my predsessor made. I know it had impact. My goal is to look at the record before that weve presented before me and my colleagues and make a decision on those. Do you think it promoted the Public Interest . Yes or no . I think that there were multiple things in it that promoted the Public Interest. And what other lessons do you take away from the previous teaments to promote the Public Interest by placing conditions on mergers as you go forward . That it is an Important Role that the commission has. Theres a lot of discussion as to why should there be any authority at the f. C. C. To look at Public Interest obligation. I strongly believe that there is a big difference between the that f statutory rigidity the Justice Department is required to look at mergers with, and the kind of broader Public Interest issues that youve raised that the statute asked the f. C. C. To look at. Mr. Chairman, i would just ask if you could supplement your testimony with some specific takeaway that is this has given you. Great. Thank you very much. Thanks, mr. Chairman. The gentlelady yields back. The chair now recognizes im sorry the would the chair recognizes the chairman. I just wanted to clarify one thing and make shir heard right. Did you say 40 of americans are still using dial up for Internet Access . No. I was talking about dial up phone service at large. All right. I was thinking more like 3 . No. Thank you. Thank you for clarifying that, sir. Thank you. The chair now recognizes the gentleman from nebraska for five minutes. Thank you. Well, its good to know that my 82yearold father is in 3 . That makes him very elite. Trying to talk him out of that. We remember those days when we were thrilled to get 56 kb. Yeah. So, switching gears just a little bit. I want to ask about quan tile regression analysis progress and i do think that you have probably captured its deficiencies better than anyone else has and i appreciate that work. I was glad to see the commissions followup by repealing the qra formula. So congratulations. I appreciate that. Im curious on your thoughts of how it should be replaced and if you could walk me through what factors are going to be used in any Decision Making and timetables and process. I respect the question but i cant really answer it right now because were in the process of theres several proposals. Were in the process of looking at what the best components of each are. And i dont want to hip shoot here but we do have proceedings under way to say, ok, what is it that we replace qra with . So if those where are we within the process of those . I think that were probably heading into something that you would see before fall. Before fall . Early fall. Ok. Football season. Well, i dont want to get distracted. Well do that when we play mcknee state and i would appreciate that. Yes, sir. For the rest of you, that was humor. Now, then let me go to a broadcast question since we suck sinchingsly dealt with one i thought would take all of five minutes. The spectrum bill that was authorized and passed through the committee was a bipartisan bill. Unfortunate the order that recently removed the f. C. C. Was not bipartisan. And some commissioners particularly republicans that stated that the order treats tv broadcasters that choose not to participate in the auction unfairly and that has me concerned. Congress set aside the 1. 75 to rei am burs broadcasters to full reimburse broadcasters. Why did the f. C. C. Not adopt the number as its repacking budget and ensure that broadcasters would not have to go out of pocket when forced to the f. C. C. To move . Thank you. Congress said a billion, 750 million, is the max that can be spent on repacking. We think that will be sufficient. There have been broadcasters who have expressed a concern that it might not be sufficient. So we have said, ok, we dont think thats going to happen. But we will put in place a a cess that will have structure in place if and when that should happen. So i dont expect that were going to get there. All right. Ill just yield back my time. Thank you, sir. The gentleman yields back. And the chair now recognizes the gentleman from utah for five minutes. Thanks, mr. Chairman. And thanks for your testimony. I appreciate your candor and your articulate way you answer questions. Thank you, sir. I was going to commend you on your efts to open up more spectrum for unlicensed uses. E fs f. C. C. Opened up last month for unliced use if the five giga hurts band and i was glad to see it was going to free up additional spectrum. Can you provide an update on where things currently stand with resolving the technical issues in the its band currently used for vehicleto vehicle communication and the parts used for military radar . Yes. So as we talked theres three slices to five giga hertz. The middle as you suggest is d. O. D. Were having ongoing discussions with them. I have been personally involved in those discussions as to about why a range of spectrum issues including this. There are strongly held beliefs n both sides, sir. I continue to believe, however, that people of good faith can find answers if you sit at the table long enough. And thats the goal. Insofar as the high band in ive gig, yes, thats Intelligent Transportation which offers such great opportunities which weve seen with the google smart card and all this sort of thing. The thing thats really encouraging is thats an 802 type of standard. Its not a dissimilar reality, wever, where we need to make sure that people are sitting around the table looking for commonalities rather than looking for differences. Some we have a little experience. Yeah. But thats the goal of what were trying to do here. Do you have a sense, a time frame for when this additional spectrum could be freed up . I wish i did. I would be misleading if i gave a date. I understand. Another issue i want to mention, the administrations connect ed program. The gold to bring broadband to every school in the u. S. To the extent that this initiative is implemented through the e rate program, what can the commission do . Thank you. Reat question. There are multiple challenges in that. One is that we need to spend our money, the peoples money, on 21st century highspeed Broadband Solutions not 20th Century Solutions like dial up Telephone Service and Long Distance. Right now about half of the 2. 4 billion thats being spent is spent for old stuff, not new. Today . Today. The second part is that we have to design a system that helps schools and library their way ors find through the maze that is telecom. I mean, weve put them this those jobs to educate students, not to be telecom whizes. So were trying to develop a process that says, you know, heres what you ought to be paying. Heres what somebody next door is paying. Heres like situated, so that they can go in and understand where their barging position is. Were going to bargaining position is. Were talking about longer contracts because buysing it on a monthly basis is the worst way to buy. So lets talk about several years. Were going to be encouraging consorsha so that you can buy in bulk and get better prices. And i just think that there are a myriad of things that we can do to get more efficiency out of the existing bucks. And we intend to do that. Thats great. Does the f. C. C. Plan on using the National Broadband map to identify fiber already in place in a Given Community so it can be leveraged toward these goals . Absolutely. And weve now taken over ownership of the broadband map. I appreciate that. I yield back. Thank you very much. The gentleman yields back the balance of his time and the chair now recognizes the gentleman from new jersey for five minutes. Thank you very much. And good afternoon to you. I believe that some of my colleagues on the other side of the aisle would prefer a title 2 reclassification. And if the commission were to decide to proceed in that direction im concerned that it might trigger a lot of illfitting regulations that might not make sense in the context of these services. In your opinion, chairman, would the process of going through forebearance to separate the wheat from the chaff, could it be a messy exercise and might it lead to more years of litigation and uncertainty, is my real concern, sir . Thank you, congressman. Thats one of the things that gets teed up in the interim period when we ask about title 2 versus section 706. And i presume that that will be exhaust 85ly ively discussed in the pree sponses and thats exactly the kind of questions were asking. Thank you. One concern has been raised about the proposed Net Neutrality rule making process protections that would be afforded companies who use a carrier thats providing the same service as another carrier. For example, the large carriers are beginning to Bundle Services that go well beyond phone service, the internet and television, to include Smart Home Services such as temperature control, Home Health Monitoring which of course is important to another sque of this committee, as well as Alarm Services such as monitoring of home intrusions and fires, video surveillance, personal Emergency Response systems. What protections will the f. C. C. Provide to ensure that a carrier does not give its Service Provider a preference over a Company Using them as a broadbased carrier . Im not sure exactly i understand what your concern is will there be preference among providers of those services . Yes, chairman. Thats contrary to the concept of an open internet. So you can assure us and through us the American People that that will not be the case as these other services are provided moving forward . Let me give an example personally. Yes, sir. I just switched out adt in my Home Security system for another company. And i was able to access both of them over the internet and both of them over my mobile device. And there should be no interference with my ability to move from adt to the other provider. Thank you. And thats the goal of the commission. And you will assure us that that is how we will proceed moving forward. Its open, there needs to be open access for all providers. Thank you. I look forward to working with you. I understand youre a graduate of ohio state . You bet. Yes, sir. Please be gentle with rutgers now that rutgers has entered the big, whatever it is, the big 16. The big ten that cant count. The big ten that cant count. I defer back to the chairman the balance of my time. A proud representative from ohio. Thank you very much for the gentleman yielding back the balance of his time. The chair now recognizes the gentleman from North Carolina for five minutes. Thank you for yielding time and thank you to you chairman wheeler for your service and thank you for your testimony today. I especially thank you for your clarity. I told you that the first time i met you and whenever i hear you speak it is unambiguous at least until the subject of your Home Security comes up and then you are a little ambiguous on who the new provider is. Ut thank you so ever much. In the Communications Act congress mandate that had the commission ensure diverse participation in media and telecom and that includes participation of minority and womenowned businesses. The quote from the statute basically says that the mandate is to promote Economic Opportunity and competition by disseminating lice senses among a wide variety of applicants including small businesses, rural telecoms and businesses owned by members of minority groups and women. End of quote. It seems to me that the response of the commission to judicial criticism of the f. C. C. s inaction in this area and the lack of meaningful study and progress as well as the low level of minority and womenowned participation in media and telecom licensing, that the commission seems to me is not committed to these diversity goals. And if i am wrong about this, i would ask that you correct me. On may 14, members of the Congressional Black Caucus including congressman rush and myself addressed these concerns, these diversity concerns in a letter to you. I suppose the letter may not have made its way to your desk yet but i ask that you look at it very carefully when you do. Question. What precisely do you need beyond the congressional directives and judicial criticism to get the commission to make progress in creating opportunities for Diverse Communities . Thank you, congressman. And i got the letter this morning so thank you. I agree that we a broad date to have swath of opportunity for all americans to participate in all aspects of telecommunications. I can assure you that thats a goal of mine. Now, lets talk about some specifics. Number one. I think what we did on the jsas in the broadcast space actually opens up opportunities for minority and small operators. Thats why it was supported by more than a dozen representative minority groups. Secondly is we are going to move on the aws3 auction to make sure that there are appropriate steps taken to assure that minorities can participate through waivers and other kinds of processes in that auction. Thirdly, we are going to have and i should pause in all of these callout commissioner clyburn who has been the constant pusher on all of these issues. There will be designated entity rules for the incentive auction that will create bidding credits for appropriate designated entities. And i very much take to heart both as an institutional responsibility and as a personal responsibility to language that you read. So when the spectrum is auctioned, you are making a commitment that diversity will be an overriding concern of the commission . So what we want to do is to make sure that there are opportunities for designated entities to get bidding credits so that, for instance, they can bid with 75 cent dollars against at t and verizon 100 cent dollars. In light of the demographic changes occurring in our country and the growing number of mergers in the Communications Industry how is the commission Encouraging Companies to partner with Diverse Businesses in the secondary marketed . We have been doing that in and inform ally, that there are great opportunities when there are transactions for Minority Companies they grain telecom for instance comes to mind which is now operating spectrum i believe for both at t and verizon which they purchased as a part of some settlements with the commission. And those kind of opportunities are important and worthwhile. Can o believe that there be new opportunities in the broadcast space, particularly after the auction, in terms of being able to share spectrum and offer other kinds of services. Thank you, mr. Chairman. Thank you very much. The chair recognizes the gentleman from kentucky. Thank you, mr. Chairman. Thank you for coming today. I know you had a busy week so your time is appreciated. My colleague from california and i have spent a lot of time on spectrum issues and we founded congressional spectrum caucus. Yes, sir, thank you. And working with different ideas on how we can move forward on spectrum. And i appreciate the efforts that youve done to move the auction forward and have a couple of questions about the guard bands and the 6 0 mega herts band. It appears to me that the band plan carefully considered the importance of maximizing license spectrum and adhere to the technically Reasonable Center created a dupe plex gap and i applaud the commission for its work in this regard. Two questions. One. How do you foresee Going Forward with unlicensed spectrum in the due plex gap . It will be important for those who bid on adjacent license to ensure there will be l not be interference . And will they to provide assurance there will not be interference . Yes, sir. The answer to both you just identified technical standards. For instance, were going to have technical standards proceeding for wireless mikes and other whose would be using the spectrum. Yes, sir. Weve been using folks from media to reach out to interested americans and were here representing the American People. One came from kelly on facebook and its asking this question. Kelly submitted through facebook who would like to ask you the question about your plans for future spectrum policy and can you give kelly a brief answer to her question about just broadly future spectrum policy . Thank you, kelly. The answer is that theyre not making it no more. And so what we have to do i believe that we are today on e cusp of the new horizon on spectrum policy with two thing that is we are doing. One is the incentive auction that you all created. Because when you boil everything down, it ultimately comes to economics. And if you can address the other persons economics, you can probably go along a long issues. Lving your the other problem is spectrum sharing. And the days of here this is all yours, you use it, are over. And fortunately digital allows that kind of sharing. Think about going into a star buckeds and everybody is sharing that wifi spectrum. You put those two together and thats i think the answer to kellys question as to where is spectrum policy going. And were in the middle of making both of those work right now which is why what were doing is so terribly important. Ill continue a metaphor and its a simple one. We dont have special highways for ambulances or fire trucks. We get out of the way when they need to go down the highway. Theres something in one of your statements. I was a state senator in kentucky before here and theres been some concerns of places like utah and oregon where theres been municipal broad band deployed and the projects have failed in areas where there were competitive providers and these projects have resulted in putting millions of dollars of public tax funds at risk. I believe it was sold to google for a dollar and leaving city taxpayers on the hook for tens of millions of dollars. My understanding is five states or so have passed laws saying cities cant do this . Because if something happens to the city the states on the hook for it. I believe in your written testimony youve said that you believe the f. C. C. Can do preemption in this area . And why you think washington could have a better view of this than frankfurt, for example, in kentucky. So there are about 20 states that have put some kind of restrictions in place. And i see it through just exactly the opposite end of the telescope with all due respect. That if the citizens of a Community Want to organize through their local government to say to bring competition in broadband provision, they should not be inhibited. Not be inhibited by their elected representatives . By the fact that the incumbents have been urging the adoption of legislation that would ban it. And if we believe in competition, we ought to let competition flourish. O what i have said is that im following again judge silvermans comments in his dissent nonetheless in the open internet case in which he said if theres ever an example in e 706 would apply, it is the ability to say to states you cannot get in the middle of this virttuss cycle and prohibit consumers from being able to have access to a competitive service. So your perception is the government is doing that because of incumbents or because they dont want to be on the hook . So the i go back to first principles. That is this is a decision that ought to be made by the people of the community. And that if they want to take the risk, if they own it themselves, but you dont have to own it yourself. It is also the gentleman from utah has left but for instance, in utah, theres a group of cities that have banded bids for solicit somebody else to own that they would have a participation in. That kind of structure. If the people say thats what we want. We want this kind of competition, then i think they ought to be encouraged to get it. And competition has clearly een shown to be the best tool. I dont disagree with you that. My time has expired. Ill yeeled back. Thank you. Thank you. The chairman would never do that to the gentleman from kentucky. The chair recognizes the gentleman from vermont. Thank you very much, mr. Chairman. Mr. Wheeler, i have five questions. We have five minutes. Yes, sir. First thing. Bob blat and i started the rural congress. Enormous concern in Rural America that we get access to the internet. Its essential for our future. Net neutrality is a big deal. Thats the big topic. Youve been getting comments. Theres an enormous amount of concern that if we make the wrong decision the big guys are going to get the fast lane, the little guys many in Rural America are going to get the breakdown lane. Can you give us some reassurance that at the end of this process were going to have access on equal terms for folks in Rural America to the internet . You want a quick answer . Yes. Yes. Yes. You can give a full sentence to reassure all of us, especially Rural America, that were going to be driving in the fast lane. There is one internet. There is not a fast internet or a slow internet, there is not an urban or rural internet. There is one internet. Everybody ought to have open equal access to the capacity delivered by the internet. Thank you very much. Now, getting the internet. Rural america is spread out and the investors want to put their money where they can make the money. We all understand that. That was true for electricity. But weve got to get that internet out into rule america so that we will Rural America so we can be part of the economy. We have a universal service fund with the Mobility Fund where we need to have that and im wondering if you could comment on the status of that and what we need to do to make sure that the funds are there to build out that broadband. Specific on mobility . Heres the interesting question that gets raised by mobility. Broadband wireless is l trn e. It is being built out across america. Recently just one of the major carriers announced a new initiative in Rural America with lte. The question becomes that were wrestling with, is should we subsidize something if its already happening . And that prudent fiscal responsibility suggests probably not. Ive got three more questions. So we want to work with you on that to make it rationale. But invest in things that are going to help Rural America. Thats where were trying to get to. Weve got to work with you and your entire commission, republicans and democrats. And when you came into our working group you explained a couple of the problems you had and procedures where its better to hire a lawyer than an engineer. Im a lawyer so maybe id like that but i wouldnt be very much use to you. What are the thing that is this committee can advocate to help your entire commission . So up the tools you need to do it . Thank you for asking. Our it infrastructure is worthy of the smithsonian. I came from a business background. The things that you cannot do is that are common sense in the business world. The fact that were still using computers that have known cyber risk associated with them. The fact that we cant organize a Consumer Complaint process on line for American Consumers because our it system isnt up to it is ridiculous. So we have Serious Problems there. On the issue of lawyers versus engineers, far be it from me to take a side on that but we do need more engineers, sir. Thank you. And economists. Right. I would like our committee to work with you on that. Next. Section 706, theres a lot of concern about whether you have the sufficient authority under that section in order to give you the rulemaking power to guarantee the outcomes being Net Neutrality. Can you comment on that . Do you still feel that is sufficient . And the court gave you a roadmap forward. I think we do have sufficient authority. And when the court talked about the this virttuss cycle and said anything that intervees is a violation of 706 that is a very broad grant of authority. Retrance consent in blocking online weve seen that in the broadcast area where there is dispute and people cant get access to the signal. Now thats starting to migrate to the online content. Is this the beginning of the cablization of the internet . Sir, i think it is the right question. Our authority goes to the retransmission and Program Access goes to the authority of goodfaith negotiations. I think there is reason to be concerned when because i happen to subscribe to an isp who is in a dispute with a Program Provider, that the Program Provider blocks all access from all i. P. Addresses coming from an i. S. P. , i think that is something that is of concern. And that we all should worry about. I yield back. Thank you very much. Thank you. The chair recognizes the gentleman from kansas. Thank you, mr. Chairman. Thank you for being here today. I dont want to spend a lot of time on Net Neutrality. We have a different view. I view it as nothing more than a price control. I think weve seen how that works in creating supply so i think it is a very dangerous path youre headed down. I do want to ask a couple process questions. Have you spoken to anyone in the white house or o. M. B. In the last month regarding Net Neutrality . Only to keep them apprised. They have been assiduous in their recognition that we are an independent agency. Did you call them or did they call you . I called them. Has anyone else on your staff spoken to folks at the white house or o. M. B. In the last month . Well, the answer is im sure. On this issue . I dont know. But i can assure you from my discussions with everybody, from the president on down, the recognition of the independence of our agency and ill go further and assure you that never have i or to my knowledge anyone of my staff felt any pressure to decide any issue. I appreciate that. Thank you. I want to follow up on something. You believe the f. C. C. Has the power to preempt state laws, to ban competition from Community Broadband . Yes, sir. Under section 706 . Yes. Do you believe that states have the same authority . I believe thats the issue that i believe is do we have the authority to preempt. That raises the question of what is the authority of the state. Nd i think we have preemptry authority. I think we will probably end up having this answered if yourt. I just read the answer that they have the same authority. The language sigh dentcal. Well, in state commissions as well. Right. It says that we have preemptry authority over state commissions. So state commissions have the same authority you do. You would agree with that . Its a simple statute. I think that it says that both of us have authority but that we have preemptry authority on this issue. And i think thats what judge silverman was saying in his dissent in the verizon case. Not law. Dissent. Will the bureau recently issued processing guidelines for broadcast transactions and these talks about not only future but also pending applications. I have three questions with respect to that. How many applications have been singled out for close scrutiny since that new guidelines have been issued . How many have been approved in those two months . And when might those broadcasters see resolution of their applications . I dont know the answer to any of those three off the top of my head but i will be happy to get it for you for the record. You can understand these are pending applications submitted under a new set of rules. Youve moved the goal post. I understand your point. What were trying to do is not move the goal post but to open up the process so that Everybody Knows what the rules are. Thats what you did. You changed the rules with respect to applications already submitted under preexisting set of standards. I dont know how you could describe that as anything but moving the goal post. With ah all respect, sir, we had a series of transactions hat were in place and in the decisions on those transactions said note Going Forward there will be a new look at what financial structures are in transactions. Not in these transactions that were approving. Then we put out a Public Notice that said here is how we are going to open up this black box and here is what is going to be going on. And it is that standard. So there was notice as a part of a decision that was not affected. Then there was notice through Public Notice. And now those that the bureau is reviewing are subject to both of those. My last 20 seconds. With Net Neutrality are also Cyber Security issues. Do you plan to give Network Providers Liability Protections in their efforts to protect their networks from Cyber Security as part of your rule making . It was not considered as part of the rule making to have that. I yield back my time. Thank you very much. The chair recognize it is gentleman from new mexico. Mr. Chairman, thank you very much. Chairman wheeler, thank you for being here as well. Chairman wheeler two weeks ago the committee added my amendment on reforming the designated market area system to the reauthorization bill. D. M. A. s are defined by a map designed by nielsen, a forprofit marketing company. This network of antenna ss based upon technology deployed back in the 40s and 50s. Americans could have a multitude of viewing options such as cable, broadband and wireless internet but current rules prevent the viewership of much of that content. I believe that a system embraced by these technologies could revitalize broadcasting with new affiliates reaching viewers. It is my hope that the Commission Takes this study seriously and brings the policy into the 21st century. So i hope we might be able to work on that. Thank you for your leadership on this. I assure you that we will take it seriously. Thank you. And it wasnt too long ago that a company would not allow access to another companys aps. There was a question a few years ago with at t and face time an apple product as i talk about fixed versus mobile. They defended it by saying it was allowed under the f. C. C. s Net Neutrality rules. Granted under 3 g. Section 62 of the proposal suggests no blocking rule that the no blocking rule was applied a different standard to mobile broadband Internet Access and mobile Internet Access service was excluded from the unreasonable discrimination rules. Were seeing mobile getting faster now and with the new spectrum options even faster than fixed. I appreciate and agree that were talking about one internet with open and equal access. With my colleagues in rural areas. Ive shared before if theres a conversation about taking phone calls with band withcapabilities as well as streaming of content on airplanes in Rural America we should be able to get the same treatment. I dont understand why were not there yet. But nonetheless, its coming. So im hopeful that as we have this conversation that were able to have equitable treatment. I know that there is, as i read in the proposal, that theres elements of asking for a look into this in the rule. But im certainly hopeful that this will be treated with the same scrutiny and level of attention. And again as i talk about an old antiquated rule within the 40s and 50s wre talked about dialup that this is another area that were going to have equitable treatment as well, especially with new giga bit access as well. In another area, i know that theres another of my colleagues who join me in my concern for recent reports for interconnection deals particularly the one between comcast and net flirks. You stated that pairing is not a Net Neutrality issue. There is a matter of the open internet and a matter of the Internet Connection among the various disparity pathways that become the internet. And while i understand that Net Neutrality refers only to the behavior of internet providers blocking the speeds of certain web sites, my question is, how is an Interconnection Agreement that essentially throttles content substantially different . So thank you, sir. Thats a very good question. You can think of the internet in three parts. There is the actually four parts. There is somebody like net flicks getting on the internet and then riding so called middle mile providers to a peering point which is a fancy word for interconnection, where they then have access to comcast, verizon, whoever the case may be. The consumer buys from their computer up to the pairing point. Traditionally, peering has been, ill take mine, you take yours, back and forth kind of a thing. And for free. That has begun to change over time. My time is going to laps. What i will do is if we can get that to the record. Once upon a time peering agreements didnt entitle an exchange of money. People found a way to work with each other. Im hoping that we can get some certainty with the treatment of fixed versus mobile in that area. And lastly, i would like for the record if theres any way that you might be able to provide us more specifics and detail with whats been talked about as commercially reasonable as well, as we talk about not putting Smaller Companies at disadvantage. I apologize for culting you off. The last thing i would say is president obama isnt supportive of an open internet and i would encourage you to speak with him about that as well. So am i. Thank you very much. The chair recognizes the gentleman from louisiana. Thank you very much for having the hearing and thank you commissioner wheeler for being here today. As we look at the potential change that is have been proposed, a lot of us, that want to continue to maintain a free and open internet want to make sure that were going about it the right way. I know there are concerns with the fact that the f. C. C. Would even consider going the title two route in terms of reclassifying broadband. A lot of us had reached out to our constituents to have them also give us suggestions on things that they would like to ask you as well. And a lot of the comments that we got i know that i got in my district were just concerns about maintaining that open internet. And in keeping the government out of regulating it in trying to make sure that the government doesnt impede the ability for the innovations that we have seen which have been so dramatic and revolutionized not only the country but the entire world. And its a lot of innovation thats made in america and we want to continue to see that innovation thrive. When you look at going into the reclassification, and its a proposal out there, i know ive got concerns about that. But in your written statement you assert that the private sector must play the leading role in extending Broadband Networks to every american. If it were to be reclassified under title 2, who would pay for extending those networks that are subject to common carrier regulations . Private sector. But then when you look at the title two route, would the f. C. C. Have the authority to regulate broadband pricing . So in the vastness of title two, that is conceiveable. One of the reasons that we are asking for title two versus section 706 comments in this proceeding is to be able to specifically zero in on what are issues such as that. What are so you think you may have the ability to regulate broadband pricing . Is that something you think would be an open possibility for the f. C. C. . Should a full title two regime be chosen, which it has not been. But youre making the proposal. 706. No were not. Were proposing section 706 as the approach. And then weve asked questions about title two. And these are the kinds of issues that come up will come up in that discussion and that are going to wasnt serious conversation. But Telecommunication Services that puts broadband into a different realm than today. Its not there right now. If you try to put it there, would state public utility in our state weve got a Public Service commission. Would those state Public Service commissions and other related entities in the states be able to regulate broadband at that point . So what we have proposed is not title 2, is section 706. What we have asked is for a discussion of title 2 in those kinds of issues. But our proposal for which ive taken a lot of heat, is not title 2. You dont have to go forward with the proposal. You can stop taking the heat right now. No. I said that title 2 is on the table. That were willing to look at title 2. But and mr. Waxman has a specific proposal where he thinks that title 2 ought to be a backup. And thats a proposal that is important and worth considering. But the proposal that we made is section 706. Let me ask you this. Because it seems like a oneway street where youre just targeted this towards internet Service Provider. Theres a lot of content providers that, a lot of members have used the net flicks example or google. And other content providers that also have a play in this realm that you seem to just be targeting this towards internet Service Providers. So im not sure if theres some axe to grind there but it seems like its a onesided approach that youre taking even in the review. And i wouldnt recommend going down that road for any of these folks. But just wanted to point that out. And one last thing because i know im running out of time. In a february report the f. C. C. Some of your staff in a working Group Recommended eliminating some of the report that is are out there, the orbit report, the interNational Broadband report. And modifying video competition report and pricing service. Ive got a piece of legislation weve passed out of the full house twice now very bipartisan i think is unanimous earlier in this Congress Called the f. C. C. Consolidated reporting act, which really tries to take a broad view and to eliminate a lot of the outdated reports torks stream lipe the reporting process, something that youve seen bipartisan support to do in the house. Were trying to get the senate to take that up. Im not sure if you have a comment on what you think should happen there, if thats something youre supportive of generally, especially the bipartisan bill in the house to move through the senate to become law to sthreemline the process. So on the senate side, its senator heller who has been pushing on this. And i know that he and senator rock feller are talking about it in terms of their package of legislation over there. I definitely agree that there is a plethora of reports and that we are spending a lot of time that could be better organized, shall we say. Including competitiveness in the tell graph industry which is still on the books which were trying to get rid ofment appreciate that. Anything you can do to help us advocate for the advancement, thats one area where we found a lot of bipartisan support. Hopefully we can get it moved through the senate as well and to the president s desk. Thank you, sir. Thank you. Thank you. I do not see any member on the democratic side. Mr. Chairman, thank you for being here today with us. Thank you for your patience. I might be the end. Wow. So but we have a lot of big issues we want to talk about. Im going to hit a couple right now. I would like to talk to you a little, it was touched earlier, about the erate program. Im a big supporter of the intentions and especially its modernization. And i appreciate the commission putting on the recent workshop on this shufment i have a few concerns. I represent a rural district with a number of very Small Schools and libraries. And over the past few months ive reached out to a lot of these entities and asked them what their concern is and asked them about their participation or lack of participation in the program. To see what concerns or issues they have with the program itself. The number one problem raised in these conversations was complexity involved in both applying for and eventually receiving the funding necessary to move forward in implementing new technology in their facilities through the erate program. And hearing this i actually looked into the issue and found out the basey application for funding this is the process of it but the basic application is 17 pages long. And with additional technologies not deemed necessary can run longer. Wifi. I would probably rather munch myself in the face than have to fill this out. So the ex plexty of the application process has caused a number of these schools to spend money on outside consultants to help guide them through this process and this is money no longer being spent on our students and automatically puts many smaller rural schools at disadvantage if they dont have the fund necessary. Essentially leaving individuals and technological desert, if you will. As the commission continues its efforts to modernize, what are your plans to simplify the application process for these small and rural districts . And also will you commit to working to address the issues faced by these schools who have routinely told me they cannot afford to pursue these funds . Congressman, i share your shock and dismay. Were going to fix it. Good. All right. Do you have an idea of a time frame . How long . Were its going to be part of our erate Modernization Program that were bringing forward. Theres actually a series of things that were going to begin administratively even before that rulemaking takes place. Yes, sir. I mean, im as you know. How do we get on line . So it becomes an interesting challenge. So here we are talking about Broadband Access for schools and libraries. And we have a 17page paper process. Right. So unfortunately its not something you can solve just like this because, as i indicated i think to mr. Welch, we have awful it systems. But what i would like to get to is for your schools and all schools and libraries to be able to get on line to make their filing, to be able to track that filing and where things stand, and to do it less frequently than annually. I appreciate that. I want to touch on one other quick issue in the short amount of time. And thank you for your conversation with the erate issue. Im concerned with the process and policy rationale used to change the f. C. C. s treatment of broadcast jsas for the purpose of broadcast ownership rules. The decision to count the ownership has the effect of tightening ownership restrictions. Without the rules required by statute. And your analysis seemed to lack an appreciation for the Public Interest benefits fostered by jsas in rockford an area i represent without these agreements the fox station produces actually hispanic newscast and theyve said that they will not be able to produce that newscast, for instance. While i dont believe my local tv station should have to fight for a waiver and we can have a broader issue on the whole can that discussion. Your role, are you going to make sure these stations can take advantage of the waivers . Will there be clear and transparent standards for apply for waivers . You raised a really important point about waivers. Why we had to deal with jsas, there was becoming a Cottage Industry in this town on k street of lawyers figuring out ways to get around the ownership rules the commissions had in place forever. Jsa
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