[Senate Hearing 111-967]
[From the U.S. Government Publishing Office]
S. Hrg. 111-967
REVIEWING THE NATIONAL BROADBAND PLAN
=======================================================================
HEARING
before the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
APRIL 14, 2010
__________
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Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
JOHN D. ROCKEFELLER IV, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii KAY BAILEY HUTCHISON, Texas,
JOHN F. KERRY, Massachusetts Ranking
BYRON L. DORGAN, North Dakota OLYMPIA J. SNOWE, Maine
BARBARA BOXER, California JOHN ENSIGN, Nevada
BILL NELSON, Florida JIM DeMINT, South Carolina
MARIA CANTWELL, Washington JOHN THUNE, South Dakota
FRANK R. LAUTENBERG, New Jersey ROGER F. WICKER, Mississippi
MARK PRYOR, Arkansas GEORGE S. LeMIEUX, Florida
CLAIRE McCASKILL, Missouri JOHNNY ISAKSON, Georgia
AMY KLOBUCHAR, Minnesota DAVID VITTER, Louisiana
TOM UDALL, New Mexico SAM BROWNBACK, Kansas
MARK WARNER, Virginia MIKE JOHANNS, Nebraska
MARK BEGICH, Alaska
Ellen L. Doneski, Staff Director
James Reid, Deputy Staff Director
Bruce H. Andrews, General Counsel
Ann Begeman, Republican Staff Director
Brian M. Hendricks, Republican General Counsel
Nick Rossi, Republican Chief Counsel
C O N T E N T S
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Page
Hearing held on April 14, 2010................................... 1
Statement of Senator Rockefeller................................. 1
Statement of Senator Hutchison................................... 3
Prepared statement........................................... 5
Statement of Senator Ensign...................................... 7
Statement of Senator Dorgan...................................... 17
Statement of Senator Johanns..................................... 19
Statement of Senator Isakson..................................... 22
Statement of Senator Begich...................................... 23
Statement of Senator Pryor....................................... 25
Statement of Senator McCaskill................................... 27
Statement of Senator Klobuchar................................... 29
Statement of Senator Snowe....................................... 31
Statement of Senator Nelson...................................... 33
Prepared statement........................................... 33
Statement of Senator Cantwell.................................... 35
Witnesses
Hon. Julius Genachowski, Chairman, Federal Communications
Commission..................................................... 9
Prepared statement........................................... 11
Appendix
Hon. John F. Kerry, U.S. Senator from Massachusetts, prepared
statement...................................................... 43
Response to written questions submitted to Hon. Julius
Genachowski by:
Hon. John D. Rockefeller IV.................................. 44
Hon. Daniel K. Inouye........................................ 45
Hon. John F. Kerry........................................... 49
Hon. Byron L. Dorgan......................................... 56
Hon. Maria Cantwell.......................................... 58
Hon. Frank R. Lautenberg..................................... 62
Hon. Mark Pryor.............................................. 62
Hon. Claire McCaskill........................................ 63
Hon. Amy Klobuchar........................................... 64
Hon. Tom Udall............................................... 65
Hon. Mark Warner............................................. 68
Hon. Mark Begich............................................. 73
Hon. Olympia J. Snowe........................................ 80
Hon. John Ensign............................................. 87
Hon. George S. LeMieux....................................... 89
Hon. David Vitter............................................ 91
Hon. Sam Brownback........................................... 91
REVIEWING THE
NATIONAL BROADBAND PLAN
----------
WEDNESDAY, APRIL 14, 2010
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 2:34 p.m. in room
SR-253, Russell Senate Office Building, Hon. John D.
Rockefeller IV, Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV,
U.S. SENATOR FROM WEST VIRGINIA
The Chairman. This hearing will come to order.
We welcome all of our guests, most particularly Julius
Genachowski, who is Chairman of the Federal Communications
Commission, which is a seminal job in Washington, D.C.
Broadband is more than a technology. It is a platform for
social and economic opportunity. With broadband networks, we
can change the way we approach job creation, education, health
care, entertainment, and other things. We can change the way we
connect with our communities around the world.
That is why I fought last year to make sure that the
Recovery Act included programs designed to bring broadband to
everybody in this country no matter who they are, and no matter
where they live. It is an operating principal.
The Recovery Act included two major initiatives: one, a
grant program to spur the adoption and deployment of broadband;
and two, a broadband plan for the Nation developed by the FCC.
It is the broadband plan that we are here to discuss today.
That is why we are here: who gets what when, for how long, all
of that.
The FCC released the National Broadband Plan last month,
and like many of my colleagues, I joined the chorus singing
praises for this effort. I think the document is a great start,
but I have concerns, real concerns.
Back in October when we held a hearing to discuss the
broadband grant programs, I spoke about the prospects for the
broadband plan. I said I wanted to see concrete action on the
day that the plan is delivered because I believe we need real
broadband solutions for real people. And we need them now. A
mere menu of options for the FCC and the Congress with far-off
time frames are, to this Senator, not good enough. I believed
that in October and I believe it now.
The report has over 200 recommendations, but it takes no
action and suggests no action. It is long on vision, but it is
short on tactics. So I am going to challenge the FCC. I am
going to challenge the FCC to make the hard choices--for them
as a commission to make the hard choices within, regardless of
anything else going on, that will help bring broadband to every
corner of our country.
I mentioned to the Chairman outside that I have spent much
of the last week at a mine disaster in a rural part of West
Virginia. Amongst all of the horrible things that come out of
an experience like that, one of the most disturbing was the
fact that not one person there--not the rescue people trying to
get inside, mine officials, miners' families, and most
importantly, trying to call people in Detroit or Akron or
wherever they might be--could not do that. There is no cell
phone service in that part of the State, and it is not even the
most rural part of the State. That made me angry.
Putting ideas on paper is just not enough. Just seeking
comment on a slew of issues is not enough. To me, 10 years
after 9/11, it is action that counts. Let me tell you why.
In West Virginia, one in five households lacks access to
broadband service. As this plan notes, only 71 percent of the
State's population has access to 3G wireless service. Every day
that goes by, communities without broadband in West Virginia--
and every other State in the country, because there is no State
that does not have remote and rural parts to it--risks falling
father behind.
In this new century, universal broadband service is the
promise of a fair shot at economic opportunity. It really is
just exactly that. It is the promise of educational equality
and affordable health care, and it opens the door for everyone
to participate in our democratic dialogue, where people can
talk with each other, and hopefully do so with dignity, no
matter who you are or where you live. Income, geography,
nothing has anything to do with this.
Before I conclude my remarks, let me take a minute to
mention last week's disheartening decision by the Circuit Court
of Appeals of the District of Columbia. No doubt, the messy
situation that Comcast has so generously put us in adds to the
complexity of your task, Mr. Chairman. No question about it.
But for me, two things are clear.
First, in the near term, I want the agency to use all of
its existing authority. I do not care how many lawyers you have
or do not have. I want you to exercise the authority that you
do have. Comcast and others want to take that away. They love
deregulation so much, they just cannot even express it. And
there are a lot of other folks sitting out there who represent
companies that feel the same way, but at least they did not
take it to court. Now that it has been taken to court and now
that it has been shot down, it puts the whole National
Broadband Plan at risk, and the Chairman of the FCC ought to be
pretty upset about that. I know I am.
And second, in the long-term, if there is a need to rewrite
the law to provide consumers and the FCC and industry with a
new framework, I, as Chairman, will take that task on. That is
the option where I think we are probably going to end.
A lot of people sitting in this room represent companies
who love deregulation and will do anything to get out of
anything to do with government. We have had a history in the
recent FCC of a lot of non-action on issues where action was
needed. I just want to say, Mr. Chairman, to you that this is a
committee, at least so long as I am Chairman, that is here to
protect people, to protect consumers. Most of the rest of the
world can take care of itself. Consumers cannot. People without
cell phone service cannot make that phone call to the mother of
a deceased miner. They cannot do it. So that is the way I look
at my responsibilities here, and I think a lot of us feel that
way.
So in closing, I appreciate the challenges before the FCC.
I understand they are much more complicated now. Do not let
that discourage you at all. Bend the curve if you have to.
I look forward to the Chairman's testimony about how he is
going to move ahead and how we are all going to do it, in fact,
together and bring the wonders of broadband to every community
in this country. That has to be the end result.
I call upon the distinguished Ranking Member from Texas.
STATEMENT OF HON. KAY BAILEY HUTCHISON,
U.S. SENATOR FROM TEXAS
Senator Hutchison. Thank you, Mr. Chairman.
Mr. Chairman, first, I want to extend my support for what I
know is, for every one of us, a concern about that horrible
disaster that happened in your State. And I know that your
being there was very comforting for the victims' families, but
also I know that it was probably very difficult personally to
meet with people who had experienced such a loss. So, each of
us relate to what you have done and said, and we hope that
there can be mine safety measures that will protect the people
who work in those mines in the future.
I do want to also address the broadband issue, which of
course is the subject of this hearing, but there is no question
that we are also going to discuss the recent court decision
that is going to have a huge impact on, I think, Internet
survivability for the future.
Let me first say that there are some good parts of the
broadband plan that the Commission has brought to us today, and
certainly the series of recommendations on the reform of the
Universal Service Fund is good because it provides support for
low-income Americans to have access to telecommunications
capabilities, and lowers the cost of building infrastructure in
rural areas.
I also think the focus that the Commission has on making
sure that anchor institutions such as libraries, schools,
universities, and hospitals have priority access to broadband
is also very key.
I believe, however, that there are concerns raised in this
report. I will start with the effort to encourage broadcasters
to voluntarily give back some of their spectrum.
We have just completed a digital television transition. It
was very time-consuming and expensive for broadcasters, but we
have gotten through it. Some of the spectrum that broadcasters
had was reclaimed from broadcasters. So asking them to give
back more I think is probably unfair.
But, what concerns me even more is the agency's reference
to involuntary measures that might require more from the
broadcasters after they have already gone though a very
expensive transition in compliance with the requirements of
Congress. So, I know many of us will be monitoring the
Commission's activities in this area very closely, and I hope
that there will not be a heavy hand of government pushing
involuntary give-back requirements.
Further, I am disappointed that there are not enough
incentives for private investment, such as the measures I
suggested in a bill that I introduced last year. Such
incentives would provide a truly voluntary, incentive for
broadcasters and traditional communications companies to invest
in underserved or rural areas. And I think that would allow
these providers to be creative and innovative and have an
incentive to do it.
My bill also would provide a review of the large number of
Federal programs that support broadband to see if we can
streamline some of them, and that too was not adequately
addressed in your report. So, I think taking some of the
broadband that is available, using it in a better way, and
providing investment incentives should be a part of any plan
going forward in the future.
The really big concern, however, that I want to address is
the FCC's growing regulatory posture. You have just heard the
other side of the argument from the Chairman, and I am very
concerned that the Commission is going to overstep its
Congressional authority and by means of, ``bending the curve,''
perhaps to do it.
I think that if you look at the history of the really soft
regulatory touch that we have had on the Internet, that has
been very positive. It has promoted innovation, and we have
seen really a good consumer outcome, more consumer choices at a
better price because we have opened the doors rather than
having the heavy hand of regulation that would begin to
restrict private companies that build and maintain a core
communications network, and to be able to manage their own
facilities.
I am concerned that there are more and more calls for the
heavy footprint even though we have seen the success of a light
footprint, which is or has been the FCC's policy starting in
about 2002.
Now we have the Comcast case, which I think Comcast
certainly had the right to appeal that the FCC did not have the
Congressional authority in the law to say that they could not
manage their own networks. And the court ruled in Comcast's
favor.
Now we hear that there is an effort to go into the
broadband area and really go back to the old kind of regulation
that I think is going to stifle the evolution that we have seen
in the Internet. Companies that did not exist 10 years ago are
now titans of the industry, and I think that we have seen the
good effects of that soft touch in promoting innovation and
growth.
The proclamations last week that the court decision left
the broadband market without any consumer protection capability
ignore the fact that the most robust consumer protection agency
in this country, the Federal Trade Commission, has enforcement
jurisdiction. Ironically, this jurisdiction was conveyed to the
FTC when the FCC removed the common carrier regime from these
technologies and would be eliminated if the FCC reverses that
decision and I think, thereby, would harm the consumers by
reducing their available protections.
In my judgment, if the FCC were to take the action that
Chairman Genachowski and his colleagues appear to be
considering, reclassifying broadband as a common carrier
service, and if it does so without a directive from Congress
and a thorough analysis of the facts and the potential
consequences to investment, the legitimacy of the agency would
be seriously compromised.
I hope, and I am asking you today, to step back and
consider the consequences of such a decision and whether there
are alternatives where we can work together to clarify the
authority of the FCC while preserving the environment that
encourages investment and creativity, which is the unique
quality of American technology. I hope that we can find the
common ground.
As the Chairman has said, he is willing to dive into this
if he believes that you do not have the statutory authority or
are not able to get it. This will be a vigorous debate, Mr.
Chairman, and I look forward to having it. I hope that we can
do something in a way that will achieve the goal that I think
all of us have, which is more choices at a better price for
consumers, and also make sure that we do not stifle innovation.
Thank you, Mr. Chairman.
[The prepared statement of Senator Hutchison follows:]
Prepared Statement by Kay Bailey Hutchison, U.S. Senator from Texas
Mr. Chairman, thank you for holding this important and timely
hearing on the Federal Communications Commission's recently completed
National Broadband Plan. In light of the decision by the U.S. Court of
Appeals for the D.C. Circuit last week, I would have preferred to have
all five of the FCC Commissioners appear before us, but I do welcome
Chairman Genachowski back today.
At the outset, let me complement the Chairman, his staff, and the
dozens of volunteers that worked for a year to conduct hearings, seek
robust public input, and to analyze an extraordinary amount of
information.
We will likely spend time today discussing the court's decision,
its impact on the broadband plan, and the idea of network neutrality
regulations. But, before turning to those matters, I want to note that
there are a number of positive provisions in the plan that we can work
together on in a bipartisan way, here and at the Commission.
For example, the Commission has made a series of recommendations to
reform the Universal Service Fund that provides support for low income
Americans to access telecommunication capabilities and provides support
to lower the cost of building infrastructure in rural areas. Without
reform, the program is not sustainable in this emerging communications
environment.
I am also pleased that the Commission focuses heavily on making
sure that anchor institutions in our communities like schools,
universities, hospitals, and libraries have access to very robust
broadband services.
However, I also have concerns with some of the plans'
recommendations.
While I commend the Commission for focusing on the need that we
have to identify additional spectrum, I have concerns with the
Commission's focus on spectrum used by broadcasters to provide free
over-the-air television to millions of households.
We just completed the digital television transition where some
spectrum was already reclaimed from broadcasters. Although the
immediate focus of the Commission will be on ``voluntary'' give backs
of spectrum by broadcasters, the agency has reserved the right to move
to ``involuntary'' measures. This is extraordinarily disturbing, and I
will be monitoring the Commission's activities in this area very
closely.
Further, I am disappointed that the plan does not offer ideas to
encourage direct private investment in new infrastructure in unserved
areas.
Last year I introduced the Connecting America Act, which would
provide investment tax credits to providers that undertake investment
in unserved areas or that make substantial commitments to upgrade their
existing networks, regardless of the technology they use. My bill would
also provide a review of the large number of Federal programs that
support broadband to determine if we can streamline them and make the
money work more effectively, or provide a single application point.
I hope that Chairman Genachowski and his team will take another
look at ways to stimulate direct private investment in our unserved
areas. It is clear that we do not have the public funds to tackle this
problem.
The really big concerns with the plan and the FCC's growing
regulatory posture:
While I have some concerns about the plan itself, I am much more
concerned by the aggressive regulatory posture being conveyed by the
Commission.
Investment began to truly flourish in broadband technology when the
Commission made a decision in 2002 to remove advanced communications
technologies from the suffocating embrace of common carrier regulation,
a nineteenth century way of looking at and regulating commercial
activities. In the years that followed, companies invested tens of
billions of dollars in infrastructure and we witnessed a continuing
convergence between technologies and more choices for consumers.
Starting just a few years after the FCC adopted this light touch
regulatory approach, however, we began to hear calls for a larger
regulatory footprint that restricts how private companies that build
and maintain the core communications networks manage their facilities.
We first heard of ``net neutrality'' back in 2006, when the issue arose
during this committee's last effort at comprehensive reform.
We rejected calls to intervene into the Internet arena then, and
have consistently decided not to pass legislation. Yet, the calls to
regulate this technology area persist! In 2007, those calls resulted in
a decision by the FCC to cite Comcast for a violation of the agency's
open Internet principles, the first sign that the Commission would
actively seek to impose restrictions on how companies manage their
networks.
While Comcast challenged the Commission's authority to regulate
broadband in court, Chairman Genachowski started a rulemaking to adopt
the open Internet principles set down 5 years ago as rules. I cautioned
him last Fall that the case for regulation has not been made, and new
rules will likely result in uncertainty and threaten investment.
Mr. Chairman, that's the history of the ``net neutrality''
discussion, which has renewed focus because last week by the Court of
Appeals for the D.C. Circuit ruled against the Commission and held that
the authority cited by the FCC to justify its holding against Comcast
was not sufficient to justify the Commission's actions in that case.
In the wake of the court's decision, the regulatory chorus has
grown louder still. Claims have been made that the court decision
leaves consumers without protections and the agency with no authority
to implement the national broadband plan, or to promote an open
Internet.
The remedy suggested by a number of parties is to risk the vitality
of the broadband market by reemploying the outdated common carrier
regulatory framework that the Commission reasoned just 8 years ago
would stifle the evolution of the Internet.
This rather remarkable suggestion served as a reminder that
throughout the entire net neutrality debate the two most important
things, reason and facts, have been in short supply. If we are going to
have a discussion going forward about the proper framework for
oversight of the broadband market, both must guide our way.
I begin with the view that the Internet as an open platform for
innovation is a reality, not an aspiration. Companies that did not
exist 10 years ago have emerged as titans of industry based almost
entirely on the Internet as a means to reach consumers.
The argument that we need to promote an open Internet seems to both
presume openness is threatened and that existing authorities and
protections are unable to address that threat. Neither appears to be
objectively true, and regulators have failed to demonstrate that there
is an exigency requiring additional government involvement.
I asked Chairman Genachowski last October to provide the Committee
with the number of alleged violations of the Commission's ``open
Internet'' principles under investigation, or that were the basis of
prior Commission enforcement action, in part to inform our discussion
about whether there is an exigency. Regrettably, the letter I received
back contained none of the information I asked for.
The net neutrality discussion has also lacked analysis of existing
authorities and protections to determine the role they may play in
preserving the openness of the Internet. For example, are the Nation's
anti-trust laws and the agencies that enforce them unable to address
the possibility that a company that owns both content and the means to
distribute it may favor its own content over that of a competition?
And the proclamations last week that the court's decision left the
broadband market without any consumer protection capability completely
ignore the fact that the most robust consumer protection agency in this
country, the Federal Trade Commission (FTC), has enforcement
jurisdiction. Ironically, this jurisdiction was actually conveyed to
the FTC when the FCC removed the common carrier regime from these
technologies, and would be eliminated if the FCC reverses that
decision, actually harming consumers by reducing their available
protections.
We have had this discussion now for almost 4 years without facts
and reason. This technology marketplace is far too important to the
Nation's commercial health to be subjected to uninformed debate or
reflexive regulatory actions.
In my judgment, if the FCC were to take the action Chairman
Genachowski and his colleagues appear to be considering, reclassifying
broadband as a common carrier service, and if it does so without a
directive from Congress and a thorough analysis of the facts and the
potential consequences to investment, the legitimacy of the agency
would be seriously compromised.
I hope that we can take a step back to consider the consequences of
such a decision and whether there are alternatives we can work together
on to clarify the authority of the FCC while preserving an environment
that encourages investment. I am confident we can find common ground,
but that will not happen if the FCC takes this action.
Mr. Chairman, again, thank you for holding this important hearing.
I am sure it will not be our last on this subject. I look forward to
Chairman Genachowski's testimony.
The Chairman. Thank you very much, Senator.
And now Senator Ensign?
STATEMENT OF HON. JOHN ENSIGN,
U.S. SENATOR FROM NEVADA
Senator Ensign. Thank you, Mr. Chairman, and also thank
you, Chairman Genachowski, for being here today.
The plan that you have put forth is an ambitious, thought-
provoking document. It aims high and does not side-step the
difficult politically charged issues. The dedication and
tireless effort of the FCC staff is on display throughout the
plan's 376 pages. Chairman Genachowski, you and your staff are
to be commended for all of their hard work.
Despite all that effort, however, I am somewhat
disappointed with how the plan has turned out. The plan begins
by saying the Government should play a limited role in the
broadband ecosystem, but then it follows up with dozens and
dozens of recommendations to do exactly the opposite. As I
learn more about the National Broadband Plan, I see a lot more
Federal spending, a lot more FCC regulation, and a lot more
Government involvement in broadband. There are billions of
dollars for broadband subsidies, a brand new digital literacy
corps, mandates for cable TV boxes and broadband digital
labels, and the suggestion that heavy-handed regulations like
net neutrality and unbundling are needed.
What I do not see are many recommendations to get the
Government out of the way of one of our Nation's most
innovative, successful, and competitive industries. The number
of Americans who have broadband at home has grown from 8
million in 2000, to nearly 200 million last year. Even in the
worst of times, the private sector and Wall Street continue to
put money into deploying and improving our country's broadband
networks. By the FCC's own data, broadband providers have
invested well over $100 billion in their own networks over the
last 2 years, in spite of the recession. I simply do not see
any signs of a gross market failure that might warrant the
Government spending tens of billions of dollars to subsidize
broadband, or using a heavier hand to regulate the marketplace.
And I am not the only one who can see the FCC's
justification for all this intervention. The Washington Post
editorial board agrees with me, saying that, quote, ``such an
assessment is premature at best.''
Before it makes a single recommendation, the National
Broadband Plan admits that ``technology costs and consumer
preferences are changing too quickly in a dynamic part of the
economy to make accurate predictions.'' That is a direct quote.
And I completely agree with it. But then the plan spends the
next 300-plus pages making predictions about technology costs
and consumer preferences in order to justify its 200 or more
recommendations.
While I do have concerns with many of the recommendations
in the plan, I do not want to give the impression that there is
nothing of value in the report. In particular, I applaud that
the plan places so much importance on finding more spectrum for
wireless broadband. Congress and the FCC need to develop a
comprehensive, long-term spectrum policy, and the National
Broadband Plan helps to start that critical dialogue.
I look forward to working with my colleagues and with the
FCC in a bipartisan manner to engage all spectrum stakeholders
to ensure America keeps pace with the coming mobile revolution.
The plan would also stop the Universal Service Fund from
subsidizing multiple competitors, would reform intercarrier
compensation, would increase spectrum flexibility, and has some
interesting ideas on maximizing infrastructure utilization. I
look forward to learning more about these recommendations and
many others contained in the National Broadband Plan during
this hearing and in the coming weeks and months.
And just one last comment on the Comcast v. the FCC
decision. This clearly has had a major impact on the future of
our country's broadband policy. The D.C. Circuit correctly, in
my view, upheld the view that the FCC does not have unfettered
power to regulate the Internet, and I hope that the Commission
will continue its successful light-touch approach, as was
described by my colleague, Senator Hutchison, to the Internet
and will now abandon what I believe was a misguided pursuit of
net neutrality regulations.
I look forward to hearing from Chairman Genachowski on how
he thinks the decision will affect other parts of the National
Broadband plan.
And one last comment to you, Chairman Genachowski, is that
Nevada is the most urbanized State in the country, and what
that means is we have the most distance in our rural areas and
probably, even though it might not affect a huge population, we
have a lot of people out there that have tremendous places that
do not have coverage. Having said that, I do believe that the
private sector is more the answer than the Government in trying
to reach those last parts of our population who are currently
underserved. I think through the right incentives, that the
private sector will more than meet the challenge.
I thank you, Chairman Rockefeller, for holding this
hearing.
The Chairman. Thank you, Senator.
Mr. Chairman?
STATEMENT OF HON. JULIUS GENACHOWSKI, CHAIRMAN, FEDERAL
COMMUNICATIONS COMMISSION
Mr. Genachowski. Chairman Rockefeller, Ranking Member
Hutchison, members of the Committee, thank you for the
opportunity to testify today on the National Broadband Plan.
The plan, as you know, stems from a Congressional directive
that the FCC prepare a national broadband plan that, quote,
``shall seek to ensure that all people of the United States
have access to broadband capability,'' include a strategy for
affordability and adoption of broadband communications, and
also recommend ways that broadband can be harnessed to tackle
important national purposes.
The plan addresses these Congressional requirements in a
way that reflects a strong conviction that, as our Nation
rebuilds its economy, broadband communications can and must
serve as a foundation for long-term economic growth, ongoing
investment, enduring job creation, and broad opportunity.
As a Nation, we have work to do to seize the vast
opportunities of broadband. The status quo is not good enough
to maintain our global competitiveness in this rapidly changing
world. Millions of Americans continue to live in areas that
have no broadband at all. Studies place the U.S. as low as 18th
when it comes to important attributes of broadband adoption and
speeds. Our records show that roughly 65 percent adoption in
the U.S. compares to much higher percentages, over 90 percent,
in other countries in Asia and Western Europe.
One study ranks the U.S. 6th out of 40 industrial countries
in innovative competitiveness and 40th out of the 40 countries
surveyed in the rate of change of innovative capacity. That is
unacceptable.
Second, certain communities within the U.S. are lagging:
rural Americans, low-income Americans, minorities, seniors,
tribal communities, and Americans with disabilities. For these
groups, adoption rates are much lower than 65 percent, which is
itself not good enough.
Altogether, 93 million Americans are not connected to
broadband at home, including 13 million children. And 14
million Americans do not have access to broadband where they
live, even if they want it. Again, unacceptable.
Our FCC plan is a plan for action, a plan that is as strong
as it is non-ideological and nonpartisan. The plan sets
ambitious goals for the country, including access for every
American to robust and affordable broadband service and to the
skills to subscribe; broadband speed of at least 1 gigabit to
at least one library, school, or other public anchor
institution in every community in the country; affordable 100
megabits-per-second to 100 million households; world-leading
mobile innovation with the fastest and most extensive wireless
networks of any nation; access for every first responder to a
nationwide interoperable broadband public safety network.
In addition to these and other goals, the plan lays out a
robust, sensible, and efficient action plan for achieving them.
It proposes a once-in-a-generation transformation of the
Universal Service Fund from yesterday's technology to
tomorrow's. It proposes recovering and unleashing licensed and
unlicensed spectrum so that we can lead the world in mobile. It
proposes ways to cut red tape, lower the costs of private
investment, and accelerate deployment of wired and wireless
networks. It proposes initiatives to foster vibrant and
competitive free markets and empower consumers. It proposes a
road map to tackle vital inclusion challenges so that everyone
everywhere can enjoy the benefits of broadband. And it proposes
ways in which broadband can be deployed to help solve many of
our Nation's major challenges, including education, health
care, energy, and public safety.
On public safety, the plan lays out an action plan designed
to finally deliver on the recommendations of the 9/11
Commission that we have interoperable communications for our
first responders, and I am pleased that the Chair and Vice
Chair of the 9/11 Commission, as well as other bipartisan
members, have endorsed the plan that the National Broadband
Plan lays out.
Against this backdrop, last week we announced a broadband
action plan to implement the broadband plan. I would like to
note that we started to act even before we did the plan. We
adopted rules several months ago to give more flexibility to
schools, to have schools under the E-Rate program be available
for broadband, and we adopted rules to lower the cost of
investment by speeding up tower siting for mobile broadband. So
we have been acting already.
In the plan we released last week, which was an
unprecedented step in both agency planning and transparency, we
propose a more than robust schedule of issues to consider and
actions to take in the period ahead.
Notwithstanding the decision last week in the Comcast case,
I am confident that the Commission has the authority it needs
to implement the broadband plan. Whatever flaws may have
existed in the specific actions and reasoning before the court
in that case, I believe that the Communications Act, as amended
in 1996, enables the Commission to, for example, reform
Universal Service to connect everyone to broadband
communications, including in rural areas and Native American
communities; take steps to ensure that we lead the world in
mobile; promote competition and innovation on broadband
networks; protect and empower all consumers of broadband
communications; support robust use of broadband by small
businesses to drive business expansion and job creation; and
safeguard public safety and homeland security.
I believe it is vitally important that the Commission act
on the broadband plan's road map to protect America's global
competitiveness and help deliver the extraordinary benefits of
broadband to all Americans. I believe this essential mission is
completely consistent with the Communications Act, and I can
assure the Committee that our actions will be rooted in sound
legal foundation designed to promote investment, innovation,
competition, and the interests of consumers.
I look forward to your questions and thank you.
[The prepared statement of Mr. Genachowski follows:]
Prepared Statement of Hon. Julius Genachowski, Chairman,
Federal Communications Commission
Chairman Rockefeller, Ranking Member Hutchison, members of the
Committee, thank you for the opportunity to testify today on the
National Broadband Plan.
The Plan, as you know, stems from a Congressional directive that
the FCC prepare a ``national broadband plan'' that ``shall seek to
ensure that all people of the United States have access to broadband
capability,'' include a strategy for affordability and adoption of
broadband communications, and also recommend ways that broadband can be
harnessed to tackle important ``national purposes.''
The Plan addresses each aspect of these Congressional requirements
in a way that reflects a strong conviction that, as our Nation rebuilds
its economy, broadband communications can and must serve as a
foundation for long-term economic growth, ongoing investment, and
enduring job creation.
Broadband is the indispensable infrastructure of the digital age--
the 21st century equivalent of what canals, railroads, highways, the
telephone, and electricity were for previous generations.
Multiple studies tell us the same thing--even modest increases in
broadband adoption can yield hundreds of thousands of new jobs.
Broadband communications increase the velocity of information, and
the velocity of commerce.
A broad array of people throughout the ecosystem--investors,
entrepreneurs, business leaders, labor leaders, consumer advocates and
others--agree that if the United States has world-leading broadband
networks, we will see a powerful new wave of innovation, and business
and job creation here at home.
The title of one recent op-ed written by the CEO of a major
American technology company said it well: ``Fix the bridges, but don't
forget broadband.''
We have work to do to seize the opportunities of broadband. The
status quo is not good enough to maintain our global competitiveness in
this rapidly changing world.
First, studies place the U.S. as low as 18th when it comes to
important attributes of broadband adoption and speeds. Our record shows
roughly 65 percent adoption in the U.S. compared to significantly
higher adoption percentages--up to 90 percent or more--for some
countries in Asia and Western Europe.
One study ranks the U.S. 6th out of 40 industrial countries in
innovative competitiveness--and 40th out of the 40 in ``the rate of
change in innovative capacity.'' The first of those rankings is enough
of a concern. That last-place statistic is the canary in the coal mine.
It shows that we will not succeed by standing still, or even moving
at our current pace.
Second, certain communities within the U.S. are lagging--rural
Americans, low-income Americans, minorities, seniors, Tribal
communities, and Americans with disabilities. For these groups,
adoption rates are much lower than 65 percent.
Altogether, 93 million Americans are not connected to broadband at
home, including 13 million children. And 14 million Americans do not
have access to broadband where they live, even if they want it.
Finally, the work of the FCC staff on the broadband plan showed
that the costs of digital exclusion grow higher every day. Several
years ago, not having broadband could have been thought by some to
simply be an inconvenience. Now, broadband access and digital literacy
are essential to participation in our economy and our democracy.
For example, more and more companies are posting job
openings exclusively online. If someone is unemployed and does
not have access to broadband, opportunities are passing them
by.
Children are increasingly given homework and research
assignments that require online access Studies show that
combining in-person instruction with online learning can
significantly improve educational results. Children are at a
disadvantage if they can't connect to broadband at home, or are
in schools with inadequate broadband connections.
As I believe Congress anticipated when it directed the FCC to
prepare a National Broadband Plan, the plan that the FCC has submitted
is a plan for action, and a call to action, that these times demand.
The staff has produced a plan that is as strong as it is non-
ideological and non-partisan. It was the outcome of an extraordinary
process that has been unprecedented in many respects: unprecedented in
its openness and transparency; in the breadth and depth of public
participation; in its professionalism; and in its focus on data and its
analytical rigor.
The Plan sets ambitious goals for the country, including:
Access for every American to robust and affordable broadband
service and to the skills to subscribe.
Broadband speed of at least 1 gigabit to at least one
library, school, or other public anchor institution in every
community in the country.
Affordable 100 megabits-per-second to 100 million
households.
World leading mobile innovation, with the fastest and most
extensive wireless networks of any nation.
Access for every first-responder to a nationwide,
interoperable broadband public safety network.
In addition to these and other goals, the Plan lays out a robust,
sensible and efficient roadmap for achieving them:
It proposes a once-in-a-generation transformation of the
Universal Service Fund from yesterday's technology to
tomorrow's.
It proposes recovering and unleashing licensed and
unlicensed spectrum so that we can lead the world in mobile.
It proposes ways to cut red tape, lower the cost of private
investment, and accelerate deployment of wired and wireless
networks.
It proposes initiatives to foster vibrant and competitive
free markets and empower consumers.
It proposes a roadmap to tackle vital inclusion challenges,
so that everyone, everywhere can enjoy the benefits of
broadband.
And it proposes ways in which broadband can be deployed to
help solve many of our Nation's major challenges: including
education, health care, energy, and public safety.
On public safety, America's first responders are on the front lines
every day protecting our families and communities. The National
Broadband Plan lays out a multi-part game plan designed to finally
deliver on the recommendation of the
9/11 Commission that we have interoperable communications for our first
responders.
I am pleased that several bipartisan members of the 9/11
Commission--including Chair and Vice Chair, Thomas Kean and Lee
Hamilton--have praised the Plan's public safety provisions as ``a clear
roadmap for finally reaching th[e] goal'' of interoperability.
I am similarly heartened that a broad array of companies--including
companies that often disagree on key communications policies--as well
as non-profits, consumer and public interest groups have voiced strong
support for the Plan and for moving expeditiously toward
implementation.
If I may pull out one quote, from the CEO of a major technology
company in Business Week:
``The vital communications systems that make our economy work
and serve as a platform for business innovation and social
interactions are second-class. Sadly, many of us have accepted
that. It's time to overcome our broadband complacency. The
national broadband plan sent to Congress by the Federal
Communications Commission is critical to our economic and
national security. Without a plan, we simply cannot compete.''
I believe the Plan will deliver extremely significant economic and
fiscal benefits over time, as broadband is harnessed for job creation
and new investment.
And cognizant of the challenging economic times we now confront,
the Plan is fiscally prudent. The Plan recognizes the overwhelming
primacy of private investment in achieving our national broadband
goals. And it identifies opportunities for new spectrum auctions that
could generate billions in revenue, exceeding any funding or
investments that the Plan suggests for Congressional consideration.
As we move forward, working with this Committee and all
stakeholders, the same principles that guided the creation of this plan
will guide its implementation, including:
Processes that are open, participatory, fact-based, and
analytically rigorous.
A recognition of the transformative power of high-speed
Internet.
The essential role of private investment in extending
broadband networks across our Nation.
The profound importance of vibrant competition to bring
consumers the best services at the best prices, and to spur
world-leading innovation and ongoing investment.
The necessity of tackling vital inclusion challenges and
promoting universal digital literacy, so that everyone,
everywhere can enjoy the benefits of a broadband Internet that
is open, safe, and trusted.
And a recognition that government has a crucial, but
restrained, role to play, focusing with laser-like precision on
efficient and effective solutions.
The important point is to act on the challenges and opportunities
of broadband. Other countries are doing so; they are developing
infrastructure to attract technology innovators. A recent New York
Times article reported that, for the first time, the Chief Technology
Officer of a major American tech company, has moved to China. In a
report from China, the newspaper wrote: ``Companies--and their
engineers--are being drawn here more and more as China develops a high-
tech economy that increasingly competes directly with the United
States.''
Against this backdrop, last week we started the essential
transition from planning to implementation, releasing a detailed agenda
laying out a schedule for Commission proceedings and actions over the
next year, driving forward on the broadband plan. This is an
unprecedented step in both planning and transparency. It reflects both
the importance as well as the magnitude of the workload ahead.
Notwithstanding the decision last week in the Comcast case, I am
confident that the Commission has the authority it needs to implement
the broadband plan. Whatever flaws may have existed in the specific
actions and reasoning before the court in that case, I believe that the
Communications Act--as amended in 1996--enables the Commission to, for
example, reform universal service to connect everyone to broadband
communications, including in rural areas and Native American
communities; help connect schools and rural health clinics to
broadband; take steps to ensure that we lead the world in mobile;
promote competition; support robust use of broadband by small
businesses to drive productivity, growth, job creation and ongoing
innovation; protect and empower all consumers of broadband
communications, including thorough transparency and disclosure to help
make the market work; safeguard consumer privacy; work to increase
broadband adoption in all communities and ensure fair access for people
with disabilities; help protect broadband communications networks
against cyber attack and other disasters; and ensure that all broadband
users can reach 911 in an emergency.
I believe it is vitally important that the Commission act on the
broadband plan's roadmap to protect America's global competitiveness
and help deliver the extraordinary benefits of broadband to all
Americans. I believe this essential mission is completely consistent
with the Communications Act, and I can assure the Committee that our
actions will be rooted in a sound legal foundation, designed to promote
investment, innovation, competition, and consumer interests.
Thank you.
The Chairman. Thank you very much, Mr. Chairman.
I will start and be followed, of course, by Senator
Hutchison, then Senator Dorgan, then Senator Johanns. Then we
will go on from there in order of arrival.
As I noted at the outset, Mr. Chairman, the National
Broadband Plan has more than 200 recommendations, and it is
roughly 375 pages. It has recommendations for the Department of
Defense, recommendations for the Department of Transportation,
Department of Education, Department of Labor, Department of
Justice, Federal Trade Commission, National Institutes of
Standards and Technology, National Academy of Sciences, Food
and Drug Administration, and a slew of others. In fact, it says
by my count--that I got help on--``Congress should'' 139 times.
Now, this just simply begs the question. In an effort of
this magnitude, what are your priorities for the FCC coming out
of this plan?
Mr. Genachowski. Well, the priorities, I think, are clearly
articulated in the plan. One is reform and update the Universal
Service Fund so that broadband communications can reach every
American, including rural areas, which responds to the issues
you made in your opening statement with respect to both wired
and wireless broadband; second, making sure that we lead the
world in mobile by having enough spectrum available to take
advantage of the huge opportunity for investment, innovation,
and job creation that we have; third, making sure that we
deliver on the 9/11 Commission recommendations with respect to
a public safety network and that our communications networks,
our data networks are protected against attack; fourth, that we
promote vibrant competition on our broadband communications
networks; and fifth, that we protect and empower consumers with
respect to broadband communications wherever they live.
The Chairman. What I am interested in is actual decisions
and plans, things that are ready to go. As I indicated at the
hearing we had some time ago on this, I wanted, when the plan
came to us, that--you know, we would just be off and running. I
do not get that impression from this. What I want to see is
real changes. I want to see that happen for real consumers
wherever they live.
On the FCC's legal authority, vis-a-vis Comcast, as you
acknowledge in your testimony, last week the District of
Columbia issued a decision that creates new complexities for
you, for all of us. To better understand this, let us go back
to the beginning. The case before the court began with Comcast
customers discovering that the company was interfering with
their use of certain Internet applications. The FCC then found
that Comcast had ``significantly impeded consumers' ability to
access Internet content and applications of their choice.''
So my question is simple. As a result of the court
decision, what happens if Comcast engages in the same practices
today?
Mr. Genachowski. Well, Mr. Chairman, the first thing that
the case reminds us is that requirements to preserve a free and
open Internet have been in place for quite some time. They were
adopted by a bipartisan commission several years ago before I
got there. What we have been seeking to do at the FCC is make
sure that there is a sound legal foundation under it. There
were some process issues with that decision, and I think we see
the consequences of that. We need in my opinion to make sure
that the free and open architecture of the Internet, the
understanding that participants in broadband have that
blocking, degrading, taking advantage of consumers is
unacceptable, that we continue that. These are policies that
have promoted not only consumer interests but investment,
innovation, competition, and I think it is essential that the
freedom, the openness of the Internet for consumers, for
speakers, for entrepreneurs continue.
The Chairman. That is impressive, almost elegiac. Where are
the results?
Mr. Genachowski. With respect to----
The Chairman. When are we going to see things happening? It
is a wonderful report. It has all kinds of wonderful visions of
life. But I do not see how it helps any of my people in West
Virginia except as a vision, as a purpose. I do not see action
plans.
Mr. Genachowski. Mr. Chairman, if I could, we released last
week something that has been unprecedented for the Commission,
a detailed plan for over 50 real actions by the Commission that
will help ordinary Americans. And if I may, even before we
released the broadband plan, when we found good ideas that we
could act on, we took them. And so we identified a problem with
the E-Rate program where schools could not use their facilities
to support people in the community. And rather than waiting for
the broadband plan to be released, we said this is an idea that
is ripe. Let us do it. In fact, before we issued the broadband
plan, we took that action and schools are now able to use E-
Rate funding for broader purposes to help their communities.
Similarly with respect to mobile, we identified, over the
course of the plan, obstacles to mobile companies in some cases
building out their networks to rural America, and we adopted
rules that are speeding up the towers that are necessary for
mobile broadband to roll out.
So we have already taken actions and the staff of the
Commission is hard at work every day to continue to act for
consumers, to promote investment, to promote innovation, and to
extend the opportunities of broadband to all Americans.
The Chairman. Sounds good, Mr. Chairman.
My time is up.
Senator Hutchison?
Senator Hutchison. When you say that you are adopting so
many different ways to improve the capability for more
consumers to have Internet access or broadband, why did you not
also include a recommendation to have an incentive for a
private company to make these types of investments? Would that
not vastly expand the opportunities for more service to
consumers and could it not be one of the many recommendations
that you made?
Mr. Genachowski. Senator, if I may. The plan contains a
number of recommendations to incentivize greater investment. It
takes a look at right-of-way issues, other obstacles to
investment, lowering the costs of investment to incentivize
faster investment, greater investment. Broader deployment is a
core objective of the plan, and there are a number of
recommendations in the plan designed to do that. I hope we
caught them all. If there are any that we missed, we would be
more than happy to work with you because there is no question
that private investment will drive the build-out and deployment
of broadband networks, that incentivizing that, making sure
there is competition, is essential.
Senator Hutchison. So you would look at another type, which
would be an incentive for private companies to make the
investment so that the Government would not be the only source?
Mr. Genachowski. We would be happy to work with you on
that.
Senator Hutchison. Thank you.
On the issue of the net neutrality rulemaking, I had sent
you a letter a while back saying, is there really basically a
need for this? Are there a lot of complaints? Is there
something in the records that shows there is a real need to
start being heavier in the regulatory area?
My question is, has the Commission conducted an economic
analysis that would indicate that there is a need for more
regulation when the sort of lighter regulatory hand has
produced so many good results in the last 10 years?
Mr. Genachowski. Senator, a bipartisan commission several
years ago adopted open Internet rules, and since then I think
there has been large compliance with them. I agree in a light-
touch approach, but I think the Commission had already
concluded that these kinds of steps are essential. We launched
a proceeding that was designed to address a number of the
procedural issues that existed, clarified to bring greater
certainty and predictability to this area, and to make sure
that we preserve the freedom and openness of the Internet for
competitors, for entrepreneurs, for innovators, for speakers. I
am confident that we can do that, and I am confident that we
can do that in a way that is consistent with a light-touch
approach to adopting rules in this area.
Senator Hutchison. I would agree with you that the
Commission policy that was bipartisan was to open it and
basically to have the light touch. But, I think the Comcast
decision by the court should be at least a warning flag to the
FCC that it is a heavy hand and the Commission does not have
the authority from Congress to actually use it and that it
overstepped its bounds. I would just ask maybe what is your
interpretation of the court opinion if you differ from mine?
Mr. Genachowski. Senator, my focus has been on policy
principles in this area like promoting investment, innovation;
promoting competition; taking seriously the needs of consumers
every day, and we have developed through the broadband plan and
otherwise a set of concrete action steps to get there;
reforming Universal Service; making sure that we unleash
mobile, promoting competition; and promoting the interests of
small businesses, the engine of job creation and economic
growth in our economy. There are a whole series of areas that
we have been working very hard to identify the policy steps
that will promote the global competitiveness of the United
States and the interests of all consumers. That is what I am
focused on.
We inherited a landscape that had more unpredictability and
instability in it than I would have liked. The court decision
reminds us of that. We have an obligation to make sure that as
we protect and empower consumers, as we promote innovation, as
we promote investment, that our decisions are on a solid legal
foundation. There are lawyers, obviously, hard at work on this.
I am convinced that we can find a way consistent with the light
touch in this area, but consistent with being very serious
about promoting innovation, protecting consumers, and promoting
investment, that we can get to a place that works for the
country and that promotes the global competitiveness of the
United States.
Senator Hutchison. Well, I will just say that many of the
commentators are very concerned that all of this process is
going to mean we are going to spend a lot of money on lawyers,
and not as much on innovation, and it is going to cause more
confusion and instability in investment than what I think you
are stating.
And I agree. The goal is to have more investment, more
openness, more competition, and more availability for
consumers. So, I just hope you will keep the light touch as
much a part of your thinking as all of the process and, by
trying to define so much, maybe having more money spent on
lawyers than innovation.
Thank you.
The Chairman. Thank you, Senator Hutchison.
Senator Dorgan?
STATEMENT OF HON. BYRON L. DORGAN,
U.S. SENATOR FROM NORTH DAKOTA
Senator Dorgan. Mr. Chairman, thank you very much.
Mr. Genachowski, first of all, on the broadband plan, I
want you to make things happen and make good things happen. So
I support what you are trying to do. I know the devil is in the
details, but I want you to implement an aggressive broadband
plan.
But I want to talk about this issue of net neutrality, or
what I call Internet freedom. I am not a big fan of the light
touch, as a matter of fact. I do not want over-regulation for
sure. But you know, a decade ago we had regulators come to town
boasting about a new day with a light touch, and at the end of
the decade, we discovered 6, 8, 10 years of willful blindness
by referees was not the way to deal with the free marketplace.
The free marketplace is a wonderful place. Free and open
markets are important, but you need a referee with a striped
shirt and a whistle to call the fouls. And the FCC is a
referee. And I want you to have the touch that is necessary to
protect the interests of the American people and the citizens
who use the Internet. This is an unbelievable innovation in our
lives, truly unbelievable.
Let me ask a couple of questions. Is it not the case that
the Internet was built, developed, and began to flourish under
the rules that existed, which included the rule of
``nondiscrimination?''
Mr. Genachowski. Yes.
Senator Dorgan. And so that nondiscrimination requirement
represented the way the Internet was created, and the purpose
of it was to make sure that the marketplace would pick winners
and losers, not some gatekeeper or not some toll booth that had
the money and the size. The marketplace would pick winners and
losers. Is that correct?
Mr. Genachowski. I agree with that, yes.
Senator Dorgan. And so without nondiscrimination rules,
perhaps a Sergei and Larry in a dorm room someplace that 10
years later would become Google might never have access to
someone in Minot, North Dakota who wishes to access that
website because they perhaps could not afford to pay the toll
that someone wanted to exact.
And let me quote Mr. Whittaker, the famous quote, going
back to AT&T, saying look, these are my pipes. I do not want
somebody using my pipes free of charge, and so it goes.
Then the question is, who with their new idea has access to
get on the Internet or to present their idea to everyone in the
world without discrimination?
So now we have a circumstance where the nondiscrimination
rules are gone because the FCC determined that the Internet was
a communications service rather than a telephone service and
used, I believe, Title I. But even when they did that, even
that different FCC said we are going to establish four
principles that are attached to it, but forgot and left out the
principle of nondiscrimination, which has persuaded Olympia
Snowe, and myself, and others to fight very hard to say you
cannot possibly go down the road here and say that we are
against a nondiscrimination policy with respect to the
Internet. I mean the opposition to that is to say, no, we are
for a discrimination policy. That cannot possibly be the public
policy piece that we choose.
And so let me ask the question then about, what does this
court case mean and what are your alternatives to respond to
it? Because I want you to respond to it aggressively to the end
stage of which you are able to develop the principles that
recreate the nondiscrimination rules that always existed.
What we are buying these days as consumers are bundled
products, Internet, telephone service, all in a big bundle, and
now we are told, well, this Internet, this unbelievable
innovation in our lifetimes, should be over here and not
subject to the nondiscrimination rules under which the Internet
started and flourished. What are your options?
Mr. Genachowski. I agree with your description of history
and the description of what we are trying to do as preserving
an openness, a freedom that has existed for a very long time
that was made binding by the prior commission and that needs to
continue. To me that is the focus.
There are legal issues now that we have to address in view
of the decision. There are lawyers working very hard in good
faith on identifying the way to move forward that is based on a
strong legal foundation. I am convinced we have that authority
under the Communications Act, and I trust our lawyers are
working with all the lawyers who have an interest here to
identify the strongest legal foundation for preserving the
freedom and openness of the Internet, and making sure that the
next generation of entrepreneurs have a fair chance, and that
consumers of Internet services are protected.
Senator Dorgan. Chairman Genachowski, I think there are two
ways ahead as well. One is using your existing authority. It
was, after all, the FCC which decided to take Internet out of
Title II and put it in Title I and thereby abolish the
nondiscrimination rules. So I mean, I think you have that
opportunity. You have a couple of other opportunities, and of
course, the Congress has an opportunity to address this. But I
do not think between now and the end of the year it is likely
that Congress is going to be addressing it. So I think we are
going to have to look to the FCC to do it because the FCC
unraveled it in the first place. So you have the capability, I
think, using existing authority in several different ways to
address it.
But I did want to, again, just say that I know that there
is a lot of language around: network neutrality, Internet
freedom, all these things. It really comes down to the point of
the head here that we have always had a nondiscrimination
requirement, saying that the big interests that now can begin
to control a lot of this cannot discriminate. So that is the
basis of the debate that we are having, and Senator Snowe and I
have worked on this for a long, long, long while. And I hope
that the end stage of this is, on behalf of American consumers,
to restore the nondiscrimination rules. I do not want to in any
way injure innovation, the growth of the Internet, but the fact
is, it was created and grew under the very rules that we are
trying to reestablish.
So listen, I hope that you will not shy away from taking
the tough positions here, or making tough choices of doing what
you need to do on behalf of the American consumer as a
regulator. That is the role of the FCC.
So thank you for being there and thank you for taking my
advice, I hope.
[Laughter.]
The Chairman. Thank you, Senator Dorgan.
Senator Johanns, to be followed by----
Senator Ensign. I thought I was next. I was here when you
gaveled.
The Chairman. Well, I am not going to get into a fight. I
am going to call on Senator Johanns, and then I am going to
call on Senator John Ensign, and then Senator Isakson, and then
Senator Begich.
STATEMENT OF HON. MIKE JOHANNS,
U.S. SENATOR FROM NEBRASKA
Senator Johanns. Chairman Genachowski, thank you very much.
Chairman Rockefeller, I appreciate the fact that you take on
these tough issues because this is a tough policy issue.
Chairman Genachowski, let me, if I might, focus on a
statement that you have made a couple of times here, and it is
in your written testimony. And that statement is that you
believe you have the power, the authority within the
Communications Act, to implement the broadband plan. Now, I
read a part of that plan that talks about net neutrality, which
is on page 58 of the plan.
Now, here is where I am coming from on that. I looked first
at this Comcast case and there is something in this case in the
very first paragraph that tells me a lot. The court says, ``In
this case, we must decide whether the Federal Communications
Commission has authority to regulate an Internet service
provider's network management practices.'' And it goes on to
say in the second sentence of this very lengthy opinion,
``Acknowledging that it has no express statutory authority over
such practices, the Commission''--and then the Commission goes
on to put forth this argument that you have incidental
authority.
Now, here is why I cite this section, as I start my
questioning today. As a former cabinet member, there were many
things I thought were just and fair and would be well received,
but the first question I always asked legal counsel was, do I
have the authority to do this?
Senator Dorgan and I agreed on payment limits. We might
have had a different approach, but I did not have the authority
to do that on my own.
My first question to you is the Commission has already
conceded that you do not have that express authority to
implement net neutrality under Title I. Is that not the case?
Mr. Genachowski. I do not agree with that, sir.
Senator Johanns. Well, where is the authority? Why did the
Comcast court not find that authority?
Mr. Genachowski. The Comcast court found a series of
problems with the process and reasoning by the Commission in
the Comcast case, which is clearly spelled out in the opinion.
Let me say that there are a series of very important public
policy objectives: extending broadband to rural America,
protecting and empowering consumers, making sure that small
businesses--but these go together. And it is essential for our
competitiveness, for our economy, for all Americans that we
take an approach to the Communications Act that is consistent
with the purposes of the Communications Act and the statutory
language.
To your point about legal counsel, I completely agree. We
will not do anything that is not supported by counsel where we
cannot make a decision and go to court and say this is within
our authority under the statute.
Senator Johanns. And under Comcast, you have already been
told. I mean, this case is very, very specific in saying you do
not have the authority to do this. Even some of your own
Commissioners, your fellow Commissioners, are acknowledging,
well, if we do not have the authority here, we will go under
Title II. Is that not the case?
Mr. Genachowski. Well, you would have to ask my colleagues,
but I can assure you that anything that we do in all of the
areas concerning communications will have a solid legal
foundation. That is our goal. And I completely agree with you
that that is our responsibility.
Senator Johanns. OK.
The second piece of this--and let me zero in, if I might,
on Title II because one of the Commissioners, as you know,
said, well, let's just go down the Title II route. Here is my
problem with that.
I have reviewed the orders of the Commission. 2002, Cable
Modem Order. 2005, Wireline Broadband Order. 2007, Wireless
Broadband Order. And the 2005 Brand X case that again makes it
very, very clear to me that there is no way legally that you
could proceed under Title II to try to regulate broadband in a
way that would establish firm legal authority. Would you agree
with that?
Mr. Genachowski. Our counsel is in the process of
evaluating, working with all of the outside counsel who are
interested, and I understand that there are a number of
different options and possibilities. But I do not believe that
prior decisions have closed the door on solid bases in the
Communications Act to proceed on Universal Service, on small
businesses, on consumers, on promoting competition and
innovation.
Senator Johanns. Here is the difficulty, and already I have
run out of time and my hope is that we will have another round
of questions because this is fundamental stuff.
But here is where you are, I think. I think you have been
handed your hat in your hand by the Comcast case. I think under
your own prior rulings, the Commission's rulings, and under the
Brand X case, you cannot proceed under Title II. It would be
like remaking the world. But the bottom line is this: if you
want to make policy, then what you need to do is pay the filing
fee, do a lot of parades, raise money, and start at this end of
the table. It is just a situation, I believe, where Congress
has not given you the power that you are attempting to assert
under portions of this broadband plan, and we in Congress
should tell you that. So any court that may review this record
should understand that as a Senator, I do not believe you have
the power, and I think the courts are telling you that. The
only solution to that is, therefore, to come back and work with
us and try to work through these differences of policy
implications.
Does that make sense to you?
Mr. Genachowski. Well, I would look forward to working with
you and the Committee on a path forward that accomplishes what
I think are broad goals that we have been discussing. So, yes.
Senator Johanns. Thank you, Mr. Chairman.
The Chairman. Thank you.
And now Senator Isakson?
Senator Hutchison. I think you said Ensign.
The Chairman. Ensign. Ensign. See, you spooked me. It says
Ensign right here.
Senator Ensign. Thank you.
I think it is important for us to drill down a little
further on Title I versus Title II. Are you currently
considering switching broadband from Title I to Title II?
Mr. Genachowski. I have instructed our lawyers to take the
recent decision seriously, to take all decisions seriously, and
to evaluate what our options are. So I have instructed them to
look at the policies that I think Congress and the Commission
have been clear about and determine a solid legal foundation
and a path to move forward.
Senator Ensign. Obviously, I disagree with Senator Dorgan
on this. I think he wants you to go to Title II because he does
not think that we have the time here in Congress to do it, and
I would agree with that. We do not have the time. Once again if
you take it down that track, I think it is a very dangerous
thing to do. My personal belief is this is regulation looking
for a problem.
Let us consider a hypothetical. What if you had a large
user of the network to the point where that large user actually
degraded somebody else's chance for getting on the network?
Under that scenario, should the network owner be able to manage
its network in a way that makes sense, that protects the
smaller user, and that keeps the Internet free?
Mr. Genachowski. Well, Senator, we have tried to be clear
that reasonable network management is appropriate, consistent
with principles of preserving a free and open Internet.
Senator Ensign. Well, I believe that in the world of
network neutrality that has been proposed by others, that you
can end up with a situation of unintended consequences where
broadband networks can get jammed up. There is more and more
technology out there, and more and more users on the Internet
than ever.
And so the point that I am making is that I disagree with
Senator Dorgan. I think the Internet has been fabulously
successful. Ever since broadband was taken from Title II to
Title I, it has been fabulously successful. We have had
exponential growth, and I think we are going to continue to
have that with light touch regulations. If we get into heavy-
handed rules, if there was a problem out there that was
specific, if we had the studies showing economic harm to our
country, it might be a different story. But we are certainly
not seeing the kinds of widespread problems, or hardly even
isolated problems, to justify a major policy change such as
network neutrality.
So I just hope that you are very cautious when we move
forward, and I agree with Senator Johanns that this should be
something that the Congress should deal with with multiple
hearings, make it public, and make it the responsibility of
policymakers up here instead of doing it at the FCC.
I appreciate all the work that you all are doing. I know
you have a difficult job in this very technical area.
The Chairman. Is that it? OK.
Senator Isakson?
STATEMENT OF HON. JOHNNY ISAKSON,
U.S. SENATOR FROM GEORGIA
Senator Isakson. Chairman Genachowski, would you favor
reclassifying the Internet from I to II?
Mr. Genachowski. We have not settled on a path forward. We
are focused on the policy objectives around rural America and
consumers and small businesses that we have been discussing.
Senator Isakson. I know you used the term ``we.'' I was
asking the question, do ``you'' think it ought to be changed
from classification I to II?
Mr. Genachowski. I have not made any decisions yet. We are
evaluating the court decision, and my focus has been on
policies to promote economic growth, job creation, and the
issues that we have talked about.
Senator Isakson. If--and this is a hypothetical question.
If you moved Internet access from I to II, would you, to be
consistent, want to reclassify Internet services and other
applications as well?
Mr. Genachowski. I am not sure I understand the question,
but in part, that is because of where we are in our process. My
focus has been, how do we make sure that all consumers, all
small businesses, all investors can have a climate where we
maximize the benefits to broadband of all Americans. And there
are many important issues here, including making sure that
rural America has a fair chance on broadband, small businesses,
consumers. These are central issues for us every day. They are
central issues on the Communications Act. The Communications
Act makes it very clear that we should be concerned about rural
America, concerned about consumers, concerned about small
businesses, concerned about investment and innovation. And in a
changing world, these are difficult challenges and I
acknowledge that.
Senator Isakson. This is just another opinion question.
When we went through telecommunications deregulation back, I
guess, 2 decades ago now, somewhere along there, it ended up
fostering a tremendous amount of expansion in new products, new
innovations, new companies, and new businesses that exist and
flourish today because of it. Do you think too much regulation
is an inhibitor to getting the benefits from technology like
broadband and like the Internet?
Mr. Genachowski. Yes. I think it is important to make sure
that any rules and regulations in this area are narrowly
tailored, that they are designed to promote innovation, to
address economic issues as we have in rural America, and I do
think it is important with the Internet and other aspects of
broadband communications to have the rules that are necessary
but no more.
Senator Isakson. Well, I really appreciate all the words of
that answer, but in particular the word ``promote'' because the
expansion of the wonder of the Internet is what we are looking
to in the future, both to reach rural people, as well as
wireless broadband to get to areas where information has never
been before.
I have been reading your report, and on page 273,
recommendation 13.6; I will just read the recommendation
because I think the Commission is saying with this
recommendation what I am trying to say. It says: ``Congress
should consider eliminating tax and regulatory barriers to
telework.'' This is the section where you promote
telecommunications. Teleworking is something we ought to be
promoting to maximize the environmental benefits and everything
else. But most of our labor laws, overtime laws, and many
regulations that come under the Department of Labor or from the
Congress today actually are inhibitors to telework and the use
of wireless broadband or broadband technology.
So in your own report, you make reference to the restraints
that regulation can bring to restrict the expansion and the use
of a benefit like Internet access and broadband. So follow that
along as you go through the decisions that you make.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Isakson.
Senator Begich?
STATEMENT OF HON. MARK BEGICH,
U.S. SENATOR FROM ALASKA
Senator Begich. Thank you very much, Chairman Genachowski.
Thank you for being here, and I appreciate it. I am not
going to get into net neutrality, Internet freedom. First, I am
not a lawyer. I do not intend to debate it and, no offense to
my friends who are lawyers, I do not intend to ever be one
either. I will leave that to the process that you are going
through.
I want to be very frank with you, very parochial, and then
I have a couple of questions I am just going to put on since I
have heard some of the debate here.
But first, I know as you move forward on the Universal
Service Fund, and that is kind of your first stage, I know I
have harassed you before and I know we have tried to get a
schedule. I know you have some issues and cannot get there yet.
But I would hope that you can be in Alaska prior to that
because the use of the USF fund is pretty critical for us, and
I would hope that you can make that commitment. Again, I know
you are working on it and your office is, and we are I think
badgering you every week. So to us that is important before you
move down the path aggressively on the USF fund. So if you have
a comment on that, I would appreciate that.
The other is a question in regards to, as you rolled out
your plan, one of the things you had in there was FCC Office of
Tribal Affairs and Tribal Seat on the USAC Board. What is your
timetable for that?
Mr. Genachowski. As soon as possible, Senator. Let me get
back to you with a specific timetable, but it was very
important to us to identify in the plan the incredible
shortcomings on our tribal lands of Native Americans with
respect to communications, and we take it very seriously, and
we look forward to working with you on moving forward on that
quickly.
Senator Begich. Please let us know on the timetable.
Again, a commitment on coming to Alaska? Yes, no?
Mr. Genachowski. Yes, as soon as I can. I am looking
forward to it.
Senator Begich. Before you go too far down the road on
Universal Service Fund reform?
Mr. Genachowski. I will do everything I can to get to
Alaska as soon as I can, and I am looking forward to it.
Senator Begich. We will be on the phone every 3 days then.
[Laughter.]
Senator Begich. But let me ask you--again, I do not want to
get into Internet freedom because your plan is much broader
than that. I mean, you have some great stuff in there on
education, health care, which again for a rural State like
mine, it is going to be very valuable, some of the expansions
and some of the efforts there.
But I want to go to the original question that the Chairman
asked. I know when we do plans, when I was mayor, we would
always have ``the plan.'' Then we would have the work flow with
specific timetables. I know you have laid out--I have read the
release in regard to several things that you are aggressive
about.
Do you have a workflow schedule that can say, for example,
item A, item B, item C, just as you have laid out in your
release I think you did last week or the week before that says
these are our dates and milestones that we are planning to
target? I think that is where the Chairman was partially going,
was the plan has a lot of stuff in there. And there will be
complaints and considerations that we want to give and put on.
But when you set these out, a specific timetable so we can be
honest with you, hold you accountable for what you said you
would do in this plan. Do you have something like that
available?
Mr. Genachowski. I think the bureau chiefs and office
chiefs at the FCC either have or are working very hard on
specific workflows to implement what you saw in the
implementation plan.
But I am very proud of the implementation plan that the FCC
released last week, unprecedented in the history of the FCC to
produce a transparent plan with a schedule over the course of a
year of really quite a significant volume of actions. That was
a breakthrough for the FCC. I appreciate the work of the staff
that went into producing that.
Senator Begich. Yes. I do not disagree with you. I just
want to get dates and times that go with it. For example, I
loved one of the examples you gave which was the utilization of
the services that are in schools because that was in Alaska an
exempted plan, and we thank you for taking that as an example
and using it nationally because we thought the rules, to be
very blunt with you, were foolish when they first were
established. You have discovered that now in your new role, and
now made that a national program, which we appreciate.
So I guess that is what is I am looking for. I just want to
see that, and I think that is important.
I have to keep glancing at Mr. Udall's clock to see where I
am at. He has a clock. I do not.
In all these plans, one of the concerns I have--and not
only with yours but many other Departments and so forth that
are developing plans. Do you have a financial match? Meaning
you have laid out what you want to do. All this takes
resources, and as we all know, for years gone by and a lot of
decisions that have been made, we are in a world of hurt when
it comes to the budget of this country. Do you have something
that corresponds with this that says this plan will take this
many years and, oh, by the way, here is what it will cost for
our agency to implement this and here are resources that we
hope to tap into?
And if you do not, I want to give you the answer--if you do
not, I would highly encourage you to do it because I do not
care if it is in this committee or my Armed Services Committee
or Veterans Committee, this is going to be my mantra. We are a
trillion-plus in debt this year in deficit. Plans are great,
but if you do not have the money or the resources to implement
them, they sit on the shelf and we will be back at it again.
So give me your thoughts then. And I think my time is up.
Mr. Genachowski. With respect to resources at the FCC
itself, this is an issue that comes up when I speak with our
bureau chiefs about doing more faster. One of the challenges
that they each have in doing their work are the resources at
the FCC themselves. So it is obviously something that we pay
very close attention to. We have a budgeting cycle at the FCC
also with respect to Congress.
With respect to external funding like the Universal Service
Fund, that is in a different area, and of course, we take that
seriously and we have issues there.
But I think your point is very well taken, and I would like
to follow up with you on it.
Senator Begich. Absolutely. I look forward to it. Mr.
Chairman, thank you very much, and thank you for your
presentation today.
The Chairman. Are you finished, Senator Begich?
Senator Begich. Yes, only because my clock has run out. It
is only because Mr. Udall moved a cup, so I have to look at it
now. If I did not see it, I would keep going.
The Chairman. Well, it is a pity.
[Laughter.]
The Chairman. Senator Pryor, to be followed by Senator
McCaskill, Senator Brownback, Senator Thune, and Senator
Klobuchar.
STATEMENT OF HON. MARK PRYOR,
U.S. SENATOR FROM ARKANSAS
Senator Pryor. Thank you, Mr. Chairman.
Chairman Genachowski, good to have you before the Committee
again. I also want to thank you for coming to Arkansas. It was
a great trip and I appreciate you getting a sense of the lay of
the land there.
Let me start with the Universal Service Fund. I support the
reform that you are talking about, but I am concerned about the
impact it may have on our small companies that offer land line
service because they really do depend on USF funding in order
to provide the quality and the affordable service that they do.
So can you walk me through very quickly how the FCC plans
to ensure that the small local carriers still get what they
need in order to provide service in rural areas but still that
accomplishes the goals you are trying to play out?
Mr. Genachowski. There was an extraordinary team that
worked on these issues as part of the plan to find a way where
broadband communications, high-speed data communications can be
supported in rural Arkansas and other parts of the country to
move from where we are now where USF is supporting yesterday's
technology, to a world where it is supporting today's
technology, but to do it with certainty but without flash cuts
that would create more problems than it solves. It is obviously
a challenge and the plan lays out, from beginning to end,
starting right away, but over 10 years doing the conversion,
and we believe that we can start making progress immediately,
that it is important to lay out a clear calendar for companies,
but finding a way to shift the program to the new
communications services that people really need without having
flash cuts that would disrupt existing reliances and
dependencies on the program.
Senator Pryor. Do you anticipate having to increase USF
fees in order to do this?
Mr. Genachowski. The goal of the plan is to not increase
the rate of growth of the fund. That would have been the easy
thing to do, to say, hey, we have this fund. Now let us add to
it with broadband. And we did not think that was fiscally
prudent. We also wanted to avoid flash cuts. So the design of
the plan is to have the shift over a period of time without
increasing the growth of the fund but also without cutting it
back.
Senator Pryor. And can you tell the Committee a little bit
about the mobility fund, and how they are targeted, and how
many States are considered below the national standard?
Mr. Genachowski. Well, this gets to a point that the
Chairman started with at the beginning. We want to make sure
that we are focusing on next generation broadband
communications but that we are not leaving behind basic local
services. I have a 18-year-old. He is driving and I absolutely
want him to have broadband access wherever he lives in the
country. But if he gets into an accident, I want to make sure
wherever he is, he can call 911 on his mobile phone or call me
or call whatever he needs. So the plan sets out a path to
tackle both of these challenges.
Not easy, of course. Not easy in a time where fiscal
restraint is so important. I think it will be an ongoing topic
to talk about and work on together, but these are both very
important goals that I personally feel very strongly about.
Senator Pryor. This may be my last question because I may
run out of time. But the old issue of inter-carrier
compensation. I know that as you go through the reform process,
and to me that is one of the things that has to be solid
throughout the whole process, is inter-carrier compensation.
You do not want the carriers who are providing the services all
the way through the system like they are supposed to and not
being compensated for it.
So as you are going through this transition and all these
changes, do you feel like the FCC has a plan and a commitment
to keep the inter-carrier compensation flowing the way it
should?
Mr. Genachowski. I think we have a plan and a direction
that recognizes the multiple interdependencies and the
complexities. I cannot tell you that have already solved every
complex, detailed problem that is in here. We will need help
from all of the companies involved, all of the stakeholders.
But we have a focused staff that understands this very well and
that is very focused on the goals that are laid out in the
broadband plan to achieve this, and that recognizes that we
will need to rely on private companies in rural America to
continue to deliver these services to people who are there.
But we also are on a track--as you know with the Universal
Service Fund, if we do not start to reform it, we face the
danger that the thing itself collapses. So we want to get out
ahead of that. And we have had very good conversations with
local phone companies who are coming in with different ideas
and approaches to work on a transition. I think they are at the
point now, from what I see, that they acknowledge the
importance of transitioning so that they can offer all of their
customers modern broadband communications.
Senator Pryor. Mr. Chairman, before I relinquish the
microphone here, I do want to thank Chairman Genachowski and
the rest of the Commissioners and all the FCC staff for the
hundreds, maybe thousands of hours you have put into creating
this document because I know it was not easy, very time-
consuming, a zillion different meetings and different details
you worked through. But thank you for doing that.
The Chairman. Thank you, Senator.
Senator McCaskill?
STATEMENT OF HON. CLAIRE McCASKILL,
U.S. SENATOR FROM MISSOURI
Senator McCaskill. Thank you, Mr. Chairman.
I would like to talk about the spectrum. I see how my life
has changed over the last 10 years as it relates to usage of
broadband. And recently, very recently, my husband got an iPad
for his birthday, and I have had my hands on it more than he
has. I will tell you that I am confident that there will be
massive changes in the way that we are entertained, and where
we are entertained, and how we are entertained by products
coming over broadband. I looked out a few minutes ago and
almost every head was down because they were all typing. The
entire audience is transcribing this hearing and sending it to
whoever they work for or whoever at their company is
interested.
Clearly, this is finite. Now, if we have time, we can talk
about where the 300 MHz of spectrum are going to come from, and
how upset the TV stations are about the idea that some of it is
going to come from them. But at the end of the rainbow, when it
is all being used, and all of a sudden there is no more left,
what happens? Do poor people get squeezed out and rich people,
who can afford to do what my family does, be big, old hogs when
it comes to bandwidth, much less the small businesses that have
seven servers in their basement and are not paying any more
than my mom who plays bridge and checks her e-mail once a
month? What are you envisioning?
While the plan is great, I do not see you getting to that
ultimate pressure point. What do we do in this country when we
run out of spectrum?
Mr. Genachowski. Solving this challenge, which I agree is
so important for our economy, for small businesses, for
consumers, is vital. And I do not think there is any single
solution. Recovering spectrum is necessary, but it is not
sufficient. I think that is the point of your question. We need
to encourage and incentivize new technologies that process
information over spectrum more efficiently. We need to find
ways to do that near-term, and also look at our longer-term R&D
spend and think about whether there is enough spending going
into that long-term to solve because it is such an important
challenge for our country.
We have to look at all of our spectrum policies to make
sure that they are promoting the most efficient use of
spectrum, promoting secondary markets, and we have to make sure
that we have a climate and a set of policies that are promoting
business models and that have the right incentives so that a
combination of smart policies in the market and technologies
can solve this. If we solve it, we can lead the world in mobile
and have it be an extraordinary engine for job creation,
innovation for the United States for many years to come. If we
do not solve it, we will be looking back in a number of years
and saying why did those other countries jump ahead of us.
Right now we know that we can have the best mobile innovation
world happen here in the United States. I believe we have to
tackle these problems so that is true in 5 years and 10 years
as well.
Senator McCaskill. I see the end coming, and I hope the
technology is developed that allows us to get more out of the
spectrum we have instead of having to crowd people out of it.
This was touched on a little bit before. But I am fearful, and
I think it is something that the FCC really needs to focus on
as you look toward the future of our economy in this country
and your role in it, more importantly, the role of the private
sector in developing the technology that would do that.
Let me quickly, because I do not have much time left--I
know that you are talking about a voluntary giving-up of the
spectrum. I may have questions in writing on that as it relates
to the subject of grabbing more spectrum.
But adoption, low-income adoption. Ninety-five percent of
the households in America have access to broadband, but only 45
percent of low-income households have it. So there are some
things in here. Could you briefly talk about what you see as
the best things in here that are going to help us with--because
that really in so many ways is a key for economic strength and
economic advancement by many, many people in this country is
that ability to cross that great digital divide to the world of
the Internet in these low-income households. Could you speak to
that briefly?
Mr. Genachowski. Yes, a very, very important topic. Our
work showed that there were different reasons for the adoption
gap. In some cases, it is affordability and in some cases it is
relevance and digital literacy. So a plan that responds to the
actual causes needs to tackle all of the above.
Reforming the Universal Service Fund would involve
reforming a lifeline program which tackles affordability.
Competition policies will help with affordability by
incentivizing lower prices. There are a series of other
recommendations in the plan that go to relevancy and digital
literacy, a digital literacy core, thinking in a very smart way
about Government services, accelerating E-Rate. A very high
percentage of the community that are non-adopters are involved
with some Government programs. And so the faster that we move
to electronic Government services, we not only save money for
the Government, but we actually can make a real dent in
adoption.
So I would be happy to follow up with you on this. There
are a lot of great ideas on the plan, and we need to pursue all
of them to take us from 65 percent to our goal of 90 percent in
10 years.
Senator McCaskill. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator McCaskill.
And now Senator Brownback who is not here. Senator Thune is
not here. Senator Klobuchar is.
STATEMENT OF HON. AMY KLOBUCHAR,
U.S. SENATOR FROM MINNESOTA
Senator Klobuchar. Thank you very much.
Hello, Chairman. Good to see you again. I, first of all,
want to thank you for your plan, all the work that you are
doing. I think it is incredibly important. Like everyone else
who mentioned the court case and their concerns about it, I am
also very concerned, but I wanted to focus more on some of the
contents of the plan. We have got to find a way to get it done,
as far as I am concerned.
The things that I was very interested in, are that you
included a recommendation that consumers receive more pricing
and performance information from their broadband provider. I
have authored a bill on this with Senator Begich, the idea of
digging once when counties or cities or States are tearing up a
roadway, that you then put the conduit in. And that is
something I have done with Senator Warner. So we appreciate
that. And then finally the development of the next generation
of 911. I Co-Chair the 911 Caucus with Senator Burr. So I think
those are very good things.
My first focus actually is on cybersecurity and just what
parts of the plan do you think could be imperiled by this court
case, and what are the plans for the FCC's role with the
cybersecurity? I just see it as the elephant in the room. We
questioned Attorney General Holder this morning. That was my
focus and how we can better ensure the security of the
Internet, whether it is identity theft or anything else that
may go on and how does this court decision impede you from
proceeding with that.
Mr. Genachowski. Well, I think to your question, we need
to, and I believe we will find a way to make sure that we have
the authority we need so that steps that are appropriate for
the FCC to take with respect to----
Senator Klobuchar. And what kind of steps are you looking
at?
Mr. Genachowski. Some of them go to best practices for
networks. Some of them go to issues with respect to outages.
For many agencies, including ours, there is a focus every day
on developing the best set of strategies and tactics to deal
with the fast-moving problem. Admiral Jamie Barnett who is
heading our Public Safety and Homeland Security Bureau, is very
focused on this, and making sure that we both identify the
steps to take and that we have the authority to pursue them is
essential.
Senator Klobuchar. Right. Senator Thune and I have a bill
on peer-to-peer. I could not believe the stories I heard out of
Minnesota on this. You know, one employee of a company does
some work at home one day, does not know that her kid loaded a
P2P program on there, and all of the company's--this is a
medium-sized company--all of their employee records go out onto
the Internet and are taken by someone, and a bunch of them
become victims of identity theft. It is unbelievable. I hope
you will be looking into that as we go forward.
I thought I would talk a little bit about the focus on
promoting competition by having transparency and the
information available, as I mentioned before, so that consumers
know how fast their Internet is, what the price is. Could you
talk about the importance of that for developing this
competitive marketplace?
Mr. Genachowski. Sure. One of the findings of the work we
did in the broadband plan was that the speeds that consumers
actually get are much lower than the advertised speeds.
Senator Klobuchar. Really.
Mr. Genachowski. And that there is a lot of consumer
confusion.
One of the things that makes me optimistic about this area
is that new technologies provide new ways to get information to
consumers in better, more efficient ways so that they can make
the market work.
Senator Klobuchar. Consumers would probably want to know
not just what their speed is in a vacuum--that means nothing--
but what the average is, what speeds are that help you to get
certain things. Is that what----
Mr. Genachowski. Yes, and we have already taken steps at
the FCC in terms of applications that we have released that
allow people to measure the speeds that they do have. It is, of
course, just the beginning, but ultimately it should be easy
for a consumer to be able to know their speed, other people's
speeds, various competitors' speeds so that the market can work
as effectively as possible.
Senator Klobuchar. Could you comment--and I know I have
asked you this before--about the ``Dig Once,'' bill and what
you have seen in other parts of the country, if you think this
is workable?
Mr. Genachowski. Listen, we were happy to include that idea
in the plan. There are a number of areas where there are some
obvious steps that can be taken that will lower the costs of
investment, and increase the speed and the deployment of wired
and wireless broadband. This is one. So it is an important part
of the plan, and I am glad you mentioned it.
Senator Klobuchar. For the 911 piece of this, what steps is
the FCC taking to move forward with an IP-based 911 system?
Obviously, this is the idea that people who are calling 911 now
are not just using a land line. In fact, they are not just
using a cell phone. Most of our 911 call centers have adapted
to that. There are still some issues. But they will be only
texting, and so they are going to be stuck on a snowmobile in
the middle of Minnesota or Nebraska, and lost or they break
their leg, and they can only text it. We are not quite ready
for that new world.
Mr. Genachowski. No. There are many challenges, but I think
the goal to your point as well, is very clear. Consumers need
to be able to contact 911 with whatever communications service
they are using. There are a series of steps that we are going
to take, I think starting very soon, to make sure that we can
move 911 to a place that whatever service you are on, you have
the ability to contact a first responder.
Senator Klobuchar. And the other piece of this is it really
could be helpful for, say, downloading a building before the
fire fighters--the blueprints where a fire fighter walked in,
just the potential of safety. If you can get pictures from a
scene and then send it back to first responders, whether they
are cops or fire fighters. I think all this is going to happen,
but we are going to have to figure out how to do it the right
way with the Internet.
Mr. Genachowski. It is critical that we do it and it is
critical that we have the ability to do and move quickly
because we cannot afford to wait.
Senator Klobuchar. Well, thank you. I had some additional
questions, some concern from some of our local broadcasters. So
I will put those in writing for you. Thank you.
The Chairman. Thank you, Senator.
Senator Snowe?
STATEMENT OF HON. OLYMPIA J. SNOWE,
U.S. SENATOR FROM MAINE
Senator Snowe. Thank you. Thank you, Mr. Chairman.
And thank you, Chairman Genachowski for being here today
discussing an array of critical issues with respect to
broadband and how we are going to deploy broadband in the
future. I commend you for the work that you have engaged in.
On the question of net neutrality, because we have heard so
much discussed here today on both sides of the equation--and as
you know, I have been a strong proponent of net neutrality
legislation. In fact, Senator Dorgan and I have been working on
redrafting our legislation from the previous Congress because
we do think it is important.
And I think it is so often overlooked about the fact that
nondiscrimination requirements have existed in our
telecommunications statutes for more than 70 years, a
requirement to ensure against unjust anticompetitive practices,
unreasonable discrimination. And that is what it is all about.
In fact, I would say that innovation has really been compatible
with those nondiscrimination principles since the FCC took
actions in 2005. Up until the time of the court case, frankly,
they co-existed. It did flourish. But the point is, we have to
make sure that we have the same freedom and openness to ensure
that all users of the Internet have similar capabilities.
So that is not surprising then that there is an array of
groups that support net neutrality: Consumers Union, Christian
Coalition, Gun Owners of America, moveon.org, Teamsters,
Parents Television Council, American Library Association,
across the philosophical spectrum because of the concern that
if you do not have those type of protections, that you do not
have the ability to prohibit anticompetitive practices by large
carriers, for example, then you are going to deny the average
person or the small business access to the Internet as we know
it today.
It is not changing it. It is what we have had, what we have
had historically.
I would like to hear from you. What are the ramifications
if we do not incorporate these nondiscrimination principles?
Frankly, I think we are looking at one side--well, we do
not want to regulate the Internet. Well, it is not about it. We
are trying to keep it as it is. That's the interesting part
about it. And I think there is even a growing consensus within
the industry and with stakeholders on this very question. Even
those major carriers that have opposed net neutrality
legislation or approaches in the past and protections are now
coming around very differently.
So I would like to have your views taking it from a
different perspective, and that is, what would be the
ramifications without such protections?
Mr. Genachowski. I think the ramifications could be that
our world leadership in innovation and entrepreneurship goes
away. It is the freedom and openness of the Internet that has
created all these incredible success stories over the last 10
years, tiny companies started in the garage that now employ
hundreds, thousands of people that create economic activity
that are some of our major exports to other countries.
My concern is that if we do not preserve the freedom and
openness of the Internet that we have had, that other countries
will move forward and take our mantel as world leaders in
innovation and entrepreneurship. And that is what I am
concerned about. And I think to your point, preserving what we
have had is all we need to do.
Senator Snowe. That is exactly right. This is really
maintaining the status quo in all of this and how best to do
it, understanding that technology has evolved in very recent
years--witness voice and video and we have to accommodate that
as well.
The court did not say that you did not have the authority.
It was that the authority was not tied to any specific
statutory provision. Is that correct?
Mr. Genachowski. Correct.
Senator Snowe. So that is what the lawyers are reexamining
now, as to what authority you might have under the statutes.
Mr. Genachowski. That is correct.
Senator Snowe. You also have an open proceeding with
respect to all of this as well. So obviously, you think you do
have some options under statute.
Mr. Genachowski. Correct. We opened the proceeding because
we wanted to make sure that there was as much clarity and
certainty as possible in this area to maximize the amount of
innovation and entrepreneurship and consumer protection that we
could have. So that proceeding is open. We will be getting
comments in--we extended it because of the decision--in 2 or 3
weeks. I do not remember exactly. But I do hope that can become
a vehicle for getting to the point that you mentioned.
I agree with you that in the last few months, since we
started an open, inclusive, participatory proceeding, we have
seen the area of consensus grow in terms of what the FCC should
do in the area of disagreement narrow. And I think that is a
very healthy thing. I am committed to continuing to work in
that direction so that we can preserve the free and open
Internet that has been such a boon for our country.
Senator Snowe. Well, I hope that we also can get to the
legislative front, but in the meantime, I think it is going to
be important for you to be doing the work that you are doing.
And hopefully, that can work and we can build that kind of
consensus in reaching that accommodation.
Does the court decision deny you beyond in the broadband
plan overall, other areas in which to extend broadband, for
example, I mean, in emerging technologies or where is it that
it is going to inhibit your ability to implement the broadband
plan?
Mr. Genachowski. It potentially raises questions in a
number of areas, including Universal Service to rural America,
including small businesses, including consumers, including
public safety and cybersecurity.
That is why I think it is so important that we make sure
that everything we do has a solid legal foundation. The
Communications Act, I believe, requires the FCC to adopt
policies that protect consumers, promote investment and
innovation in communications networks, whether they are
traditional networks or newer data networks. From a consumer's
perspective, they assume that the FCC is making sure that
consumers are protected, that competition is promoted, that
innovation and investment are promoted, and I believe it will
be completely consistent with the Communications Act for us to
continue to do what the FCC on a bipartisan basis has been
doing for quite some time.
Senator Snowe. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
Senator Nelson?
STATEMENT OF HON. BILL NELSON,
U.S. SENATOR FROM FLORIDA
Senator Nelson. Thank you, Mr. Chairman. I would ask that
my statement be entered in the record as an opening statement.
The Chairman. Would I have a chance to read it first before
I rule on that?
[Laughter.]
Senator Nelson. That is up to you.
The Chairman. So ordered.
[The prepared statement of Senator Nelson follows:]
Prepared Statement of Hon. Bill Nelson, U.S. Senator from Florida
I am pleased to hear from Chairman Genachowski today to outline the
National Broadband Plan. This plan is an important piece of the
American Reinvestment and Recovery Act, which was designed to create
new jobs, spur economic activity and make important investments in our
Nation's long-term growth. The National Broadband Policy piece seeks to
develop policies to ensure that all Americans have access to
affordable, world-class broadband. I was pleased to support the Act.
I commend the Chairman, Commissioners, and the FCC staff for
putting together this comprehensive 377-page plan with ``Internet
speed'' and for developing a plan to go forward with implementation
with Internet speed.
I know this report is only the beginning of the process. Some of
these plans will be the subject of dozens of rulemakings back at the
FCC and legislation here in the Congress. I will be watching carefully
as these plans are developed to make sure that the goals of the
National Broadband Plan are realized without delay.
In my home State of Florida, extending broadband pipes to citizens
is no longer a luxury, it is a necessity.
You need broadband to find and apply for jobs.
Classroom instruction at all levels--from elementary school
to graduate school--takes place over broadband lines.
Families on military bases need high speed Internet
connections to communicate with deployed military service
members overseas.
Medical records and health histories are being digitized so
that our doctors and health professionals can have our complete
medical history at their finger tips to provide us care.
Small businesses, the main drivers of employment and
commerce in my state, need affordable broadband access to stay
competitive with larger companies in the United States and
abroad.
All of these things are enabled by broadband and are necessary to
get folks back on their feet and to help regain our leadership in the
world.
Of the many recommendations in the plan, I am eager to hear more
about the plan to free up chunks of airwaves for wireless broadband
devices like smart phones and mobile computers. This is, without
question, an important goal.
Although I am encouraged that the recommendations on the airwaves
are described as ``voluntary,'' the devil is in the details. And the
details are in the implementation. We need to tread carefully here
given that the future of free-over-the-air TV depends on how we deal
with this issue.
At a time when the investment in news gathering and reporting is
declining, we need to ``first do no further harm'' to the diversity of
independent media voices. This diversity is critical to our democracy
and should not be sacrificed for any reason.
Senator Nelson. Thank you, Mr. Chairman.
Mr. Genachowski, your plan has recommendations to provide
the ultra-high speed Internet to some select military
installations. Of course, we have quite a bit of military in
the State of Florida. So share with us what makes large
military installations an ideal test bed for the ultra-high
speed Internet connection.
Mr. Genachowski. One of the things that I saw at our Air
Force base in Qatar when I was over there was how forward-
looking the military is in understanding that broadband
communications can serve multiple objectives, keep our troops
with their families, whether they are at a base in the U.S. or
abroad, further distance learning, making sure that troops can
complete their degrees, advance in the military, further health
care-related objectives. When I was in Arkansas--Senator Pryor
is not here, but I met someone from the military who said when
he went overseas, he had to take his paper medical records with
him. So including the military as part of our test bed effort,
as thinking about the ways that we can identify rolling out
broadband, sharing the benefits, sharing learning, was a very
important part of us. And our friends in the Pentagon was very
cooperative in finding a way that they could participate in
making sure that all Americans can benefit from broadband.
Senator Nelson. And if we can ever get it sufficiently
secure, we could also have our military, even in the field, be
able to vote while they are overseas on assignment. We have
been raising that issue because when you find out exactly how
many military ballots are actually absentee ballots that are
counted, you will find it is a pitifully poor percentage of the
registered voters. Something for your consideration.
Small business. What initiatives do you have to move
forward with immediately boosting the small business segment
that can stimulate investment, innovation, and job creation?
Mr. Genachowski. We found that in small business, one, the
opportunity is huge for small businesses to get on the
Internet, expand their markets, grow their businesses, reduce
their costs by using services that are in the cloud with a real
result of greater revenue, lower costs, more profits, and more
jobs.
We found that there are two obstacles, essentially, to
small businesses in broadband. One involves literacy,
understanding what is out there, and the other involves
affordability.
On the literacy/understanding piece, we have already
announced--Chairman, I forgot to mention this before--a program
with the Small Business Administration to immediately start
providing better information to small businesses about the
opportunities, how to get on broadband. Administrator Mills has
been a great partner in this.
With respect to affordability, there are a series of
competition issues that we need to address. We have heard many
complaints from small businesses that they do not feel their
choices are adequate, they feel their prices are too high. So
that is an area that we are moving forward on at the
Commission. It is complex but it is important that small
businesses understand the opportunity of broadband and that
they have real choice.
Senator Nelson. Now, in your recommendations to reallocate
the spectrum from various uses, including TV broadcasting, to
commercial wireless uses like smart phones and high-speed
wireless Internet, the question is are you going to treat
public TV broadcasters like you would the commercial TV
broadcasters?
Mr. Genachowski. Well, the plan that we have suggested is a
voluntary one where it is focused on commercial broadcasters
that increases their options to share spectrum with another
station in the market, participate in an auction, and get
benefits. Public media has been extraordinarily important in
the country, I think even more so as the commercial sector has
had to deal with the awful economy and that has had certain
consequences on programming. So public media becomes incredibly
important, both with respect to traditional television--many
Americans still just receive over-the-air TV--but also making
sure the public media can reach the next generation of
audiences where they are on the Internet, on mobile phones. We
found the public television and radio community to be very
interested in a partnership on the best, most effective way
that they can serve their audience and their important mission
in the 21st century.
Senator Nelson. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Nelson.
Senator Cantwell?
STATEMENT OF HON. MARIA CANTWELL,
U.S. SENATOR FROM WASHINGTON
Senator Cantwell. Thank you, Mr. Chairman.
And Chairman Genachowski, it is good to see you. I know
that the FCC is holding a workshop on its notice of proposed
rulemaking on net neutrality in Seattle coming up here later
this month. So, I know you are going to hear a lot about what
we think about in the Northwest as how fundamental it is to the
future of broadband in the United States to make sure there is
an open Internet. So we appreciate you holding that field
hearing.
And I always am amazed when I see these reports since the
decision. You know, 53 percent of the public does not want the
FCC to regulate the Internet when the issue is the public wants
the FCC to protect them to make sure that the Internet is not
artificially taxed by business, preventing consumers access to
content without paying more for it. And the notion that
somebody thinks they can spin this around Washington, I
guarantee you, you will hear an earful when you get to Seattle.
They understand that access to content through the Internet
should not be artificially taxed.
One of the things I am curious about is since we had our
hearing here about the Comcast-NBC merger, we have now had this
D.C. decision. So the potential combination of Comcast and
NBC--how will that impact your--I know you cannot speak
specifically. I am asking you to speak broadly about the
Commission in evaluating that deal. In the MCI-Verizon, you
were able to condition, post-merger, certain conditions be met
protecting the consumer using that net neutrality. So how will
you look at making sure that content is not blocked, you know,
things that will be very important for that decision?
Mr. Genachowski. As you indicate, I cannot talk
specifically about the transaction, but I take your views and I
will make sure that they are incorporated in the Commission's
consideration of the transaction.
Senator Cantwell. Do you have a concern generally that that
is harder now since the court decision?
Mr. Genachowski. I am not sure that it is harder. I think
that there are many issues, very serious issues, in the
transaction that we will be taking one by one very seriously
and looking at them on their own terms. I am sure that these
issues will be considered very seriously as part of that. We
have already heard from people on that issue in the
transaction. I am sure we will hear from more. It will be taken
very seriously as part of the review of that transaction.
Senator Cantwell. I know also in another decision with the
Third Circuit's removing the stay on media ownership that came
out under Chairman Martin, that there is now an opportunity for
the Commission to start moving on that process. And so I know
you have a quadrennial review of media ownership. So to me, it
is very important that the Commission start moving on this and
make sure that you consider this in a comprehensive way. Is
that part of the plan?
Mr. Genachowski. Yes. We started the process of the review,
the 2010 review, in 2009. There will be a Commission action in
the near future to go to the next stage, and we will be
tackling the ownership issues.
Senator Cantwell. Thank you.
And on the issue of the broadband plan, we are 8-plus years
after 9/11 and yet the notion of interoperability communication
systems for first responders is still more of a goal than a
reality. In your broadband plan, you have some objectives to
meet certain petitions no later than the third quarter of this
year. We are very interested in the Northwest, Seattle.
Particularly in Pierce County and in Seattle, you might have
seen this rash of police killings in the news. So the law
enforcement community is very interested in basically getting
these public safety spectrum trusts to be able to access for
building an interoperable public network.
Mr. Genachowski. It is a vitally important issue, and it is
a real action plan to move forward quickly and make sure we get
a public safety network built. It does require, we suggest,
some actions by Congress because this is an area where we do
not think the private sector will get the public safety network
built. But we have a series of steps to take in connection with
that to make sure that networks are hardened, interoperable.
And we have a unique opportunity now that I am very hopeful
that we can take advantage of. As we are building out our 4G
networks, if we can build out the public safety network at the
same time, we will reduce the costs of that dramatically. If we
do not move forward with the public safety network now and all
the 4G network truck rolls and equipment are already out and
then we try to accomplish exactly the same thing later, the
costs will be much, much higher. So I agree with you that it is
essential to move forward and to move forward on a very fast
timetable, and I look forward to working together on that.
Senator Cantwell. The plan calls for that by the third
quarter of this year. So do you think you will make that?
Mr. Genachowski. We will make our part. We do not have the
funding available for the funding part, but we will do
everything that we need to do on our schedule.
Senator Cantwell. Thank you.
And I would just like to echo my colleagues' calls about
unlicensed spectrum as it relates to the development moving
forward of Wi-Fi. I know that you guys are looking at 20
megahertz, but there is a lot bigger need for this. So I will
look forward to asking you more about that.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Cantwell.
We will go to a second round now. Do you have time?
Mr. Genachowski. Of course.
The Chairman. I was just saying to Senator Hutchison before
she left, I do not know how many times I have talked here, not
just in this position but in the 24 years that I have been on
this committee, about ruralness, and I always somehow work the
name ``West Virginia'' in there. It strikes me that I am not
doing rural America a favor when I do that.
You talk about a looming spectrum crisis, and then you come
up with the statement that the Nation needs 500 megahertz of
new spectrum in the next 10 years.
But I have this worry, which goes along with what I said at
the beginning, about you set out a large picture, but then
there is sort of nothing taking after this 911 thing. Like
Senator Cantwell, I am so shocked. I am so embarrassed. I mean,
you got the blessings of the 9/11 Commission, but I am fairly
sure they could not have read anything about interoperable
first responders because really nothing has happened. There
have been bits that have happened, of course, but nothing
fundamental has happened in the most obvious homeland security,
national safety type issue imaginable.
Now, I go back to mine disaster that we had. People could
not call. It was really embarrassing, Mr. Chairman, to see
Verizon technicians who had been, obviously, up for 5 days
trying to string wires for land lines out to a place that they
rarely had ever been to before, if ever. Maybe to the
elementary school where the press was. But they were out there
like crazy. It was almost comical trying to string up wires so
that rural America could be heard in a genuine matter of life
and death, which turned out to be all death.
Now, I am not satisfied that you really are taking into
consideration rural America. I think you are saying it. I think
you are postulating it out there, but you specifically define
when you are talking about rural America--you say that the
looming spectrum crisis--when you are talking about that, it is
strictly an urban problem. You refer to it as an urban problem.
And that is all of a sudden when I become more than a West
Virginian because the Adirondacks, the intersections of
California, endless, hundreds of thousands of square miles of
New Mexico, Colorado, North Dakota, the State of Washington--I
mean, every State has enormous rural chunks.
The pattern of the telecommunications industry has been so
clearly and so blatantly, and so obviously two-fold. One, we
pledge to cover all your people. How many times I have heard
that from the different people who have been doing
telecommunications for the greater part of West Virginia, and
they always go right to the cities, right to the businesses who
will pay their bills on time, and right to the sections where
the houses have the income level so they do not have to worry
about it. But do not try and look for them in rural West
Virginia or in rural Montana or in rural North Dakota. They are
just not there and they are not going there.
So when people say--you know, I got sick of this talk. This
is meant to be about real people getting service. And we got
into the discussion about light touch versus heavy touch and
process and Title I and Title II, and all of that is important
when it comes down to it. But the real problem is getting that
service to people who need it, and every single State has rural
people. And I want to know what your plans are for that.
Mr. Genachowski. Well, Mr. Chairman, I could not agree more
with what you are saying. If I could make a couple of points.
One is the problems in rural America with respect to
deployment are very serious problems that the plan takes
seriously, and it proposes the first-ever mobility fund.
The Chairman. I knew you were going to say that. Go ahead.
Mr. Genachowski. Well, it is an important step to directly
tackle the challenges in rural America.
The Chairman. When will it be in place?
Mr. Genachowski. As soon as possible and we will lay out a
timetable for you.
The Chairman. When?
Mr. Genachowski. There is a timetable and I apologize. We
will get you a timetable to move it forward.
The Chairman. Do you have an idea? It is a lot of America.
Mr. Genachowski. As quickly as we possibly can.
The Chairman. Do you feel the pressure, though?
Mr. Genachowski. I certainly do.
The Chairman. Not of me but of rural America, of
underserved, unserved people speaking, needing you. And if you
need us to help you get the authority that you need, use us.
I mean, I do not want to get into this thing, but Chairman
Powell made your life a whole lot more difficult, a whole lot
more difficult. So let us just face facts. If you are going to
need help to be able to do more, you come to us. And it may be
a close vote. It may be a partisan vote. I have no idea. But it
is a battle worth fighting. Getting you out to where you can do
what you want to do quickly--quickly--that is the President's
main problem and it is also yours. Everybody expects him to be
able to get everything done in the first year and a half: peace
in the world, prosperity in America, and all the rest.
You have got some of that problem too, and you asked for it
because you are smart, you are aggressive, you tend, I think,
to surround yourself sometimes with a rather small group of
people. I do not know who you listen to from the outside. I do
not know what your process for setting priorities is and making
sure that they are done. The work plan that Senator Begich was
talking about really is the only way that you get anything
done. It is not talking about a problem. It is doing something
about it.
And I want my people to be able to be treated in exactly
the same way as those of my family who live in New York City.
And I am not going to settle for anything less, and I am going
to give you hard time until that happens.
Mr. Genachowski. I completely agree, sir.
The Chairman. Thank you.
Senator Dorgan?
Senator Dorgan. Senator Rockefeller, thank you.
The Chairman. Oh, there is a vote. Is it an important vote,
do you happen to know?
[Laughter.]
Senator Dorgan. I do not know what the vote is, actually.
The Chairman. We have got 15 minutes. Go ahead.
Senator Dorgan. Well, first of all, Chairman Genachowski,
thank you for, again, your work and for being here.
The implicit suggestion by some was why do you not get out
of the way and let the free market work. It is a wonder, and
let us let the full flower of that wonder of the free market
work. I love the free market. I think it is the best allocator
of goods and services that I have ever seen, but it needs a
referee and you are a regulator. You are a referee.
When I say I am not for the light touch, let me be quick to
say I do not want over-regulation, but I want you to use the
right touch to make sure that the referee is doing what the
referee must do to keep the free market free.
So with that, I want to send you some questions about the
Internet and broadband and American Indians and the Indian
reservations and the very significant problems of serving
there. They are way behind.
I want to send you some questions about Universal Service
reform, including inter-carrier compensation, which is very
important. It is very important that that reform move carefully
and thoughtfully.
I am also going to send you some questions about the 100-
megabit 2020, which I think is called 100 Squared. And then
your plan calls for Universal Service speeds at 4 megabits. So
my question will be, as I send you some questions, what part of
America will be served with 100 megabits and what will get 4
megabits, and is that not, in fact, a very substantial digital
divide? And what are the consequences of that for economic
opportunities in a region?
But what I want to do is I want to tell you just a very
short story. I grew up in a town of 250-300 people in a small
house with two bedrooms and a shed out in front. And I had not
been back to that house since I was a teenager. Some while ago
I went back to the house, knocked on the door, and the woman
who answered in this little town of a couple hundred people--I
asked her would you mind if I see this home. It was where I
grew up. And she said, I would be happy to have you come in.
I came in and as I entered the shed, I saw a bunch of
cardboard and tape. And as I walked into the kitchen from the
shed, I saw a camera on the kitchen counter and a little
stanchion there with a bracelet hanging on an appendage. And I
said, what are you doing? She said, well, I am taking a
photograph of this bracelet. It was kind of a pretty gold
bracelet. And I said, why are you doing that? She said, well, I
sell on the Internet. I said, really. Yes. She said, I sell on
the Internet. I sell jewelry on the Internet that I buy from
others and then resell on the Internet. And I said, is that
what the cardboard boxes and the tape are for? She said, sure.
So here in my home, a very small, home in a small town is a
woman that reaches the world. She is on the Internet and
someone from Moscow or Delhi can access what she is selling. I
said, how are you doing? She said, fine. I supplement my
husband that drives the gas truck for the Farmers Union Oil
Company and I make a decent income selling on the Internet. It
could not have been possible previously. It never would have
happened. She has an international business capability from
that little town.
But she has that capability because no one has the
opportunity to say you are too small or we are going to impose
a fee on you. We are going to impose some impediment that does
not allow others to see you unless you comply with these three
requirements. Pay us in order to get on our provider network.
No one can do that at this point, or at least I should say no
one could do that originally under the rules of the Internet
because it was under Title II and included the rules of
nondiscrimination.
That is why this is such an important issue, and it is why
I come back to it again. I think the genius of the Internet--it
is the ultimate democratic tool for everybody in the world to
reach everyone else in the world without any interference. And
when someone of significant clout said I do not want this user
or that user using my pipes, that tells me, wait a second. We
are talking toll booths and gatekeepers and others that might
want to find ways to get revenue off a determination of who can
be on the Internet. So that is why this is so important.
I think the firms that are involved in doing innovation,
the big firms and small firms--God bless them. I support them.
I am not anti-big or anything of the sort. I want this to
remain free and open. And I worry. Go back to the financial
issue for the last decade or so--in fact, go back a decade and
a half and see what happened under blind regulators. We need
effective regulation, not to retard the innovation of the
Internet, but to make certain that it remains free and open and
to make certain it protects the free market.
So I just wanted to tell you that story about my little
hometown because that is replicated all over America, and that
is the genius of people saying, you know what? I can start a
business too right here in my kitchen. That is such a wonderful
story.
So let me ask you finally--my time is expiring. It is the
case, to reaffirm, that the origin of the Internet, the
construction of it and the growth of the Internet occurred
under a series of principles which included nondiscrimination.
Is that not the case?
Mr. Genachowski. I believe that is correct.
Senator Dorgan. The Chairman indicated that the FCC under a
different Chairman decided we are going to change the rules and
redescribe Internet service as something other than telephone
service under Title II, which is the way it had been regulated.
So that was no service to you and, in my judgment, the American
people. I opposed it at the time. But we need to find a way, in
my judgment, to restore that which always existed and has
always existed with respect to telephone service and previously
existed with respect to Internet service. I think it is the
right way to protect the American people, at the same time to
allow the Internet to flourish and grow and for the free
enterprise system to work the way it is meant to work.
So, Mr. Chairman, thank you for your work and thanks for
spending as much time as you have with us today.
Mr. Genachowski. Thank you, Senator.
The Chairman. Thank you, Senator.
Senator Johanns and Senator Cantwell, just two really good
20-second questions.
Senator Johanns. There is not enough time to ask a
question, but I would like to sit down with you more
extensively.
This is not a question of whether these things are good or
not good. Much of what Senator Dorgan says, many of us, myself
included, could agree with, but the point is this is where we
debate policy. You are not elected. No one voted for you. And
it is very, very important that Federal Departments exercise
the authority granted to them. Comcast has said very, very
clearly you exceeded your authority. There just is not any way
around that opinion.
The second piece of this, to go back to Title II with the
history you have here based upon factual determinations and
then try change the world I think will only buy greater
litigation, more lawyers, and you will be stopped in the end
also.
The point, Mr. Chairman, that I want to make, as I wrap up
here today, is that there is a way to do this in the American
system, and you are a bright guy and I have so much admiration
for your background and your skills. I cannot think of anybody,
as said during your confirmation hearing, better qualified to
do what you are doing than you.
But it is here that this policy is argued out and fleshed
out. The words exist in the English language to give you the
power to do net neutrality and manage in that way if we choose
to give that to you. Comcast said you did not have that power.
And under the Title II rulings by the FCC itself and under the
Supreme Court decision relative to one of those rulings, I
think the decision has already been made that broadband is an
information service. It is not a telecommunications service.
And I think to change that now will invite, again, a court to
step in and stop you.
I look forward to sitting down with you and having this
great discussion.
Mr. Genachowski. I look forward to it.
Senator Johanns. Thank you for your patience today.
The Chairman. Senator Cantwell?
Senator Cantwell. Thank you, Mr. Chairman.
Two quick questions. Chairman Genachowski, will you decide
on all open white space issues, you know, the reconsideration
of the database order for the 700 megahertz no later than the
third quarter of this year?
Mr. Genachowski. I believe that is right, yes.
Senator Cantwell. OK, thank you.
And I know in the recommendations in the education
recommendations, there was some discussion in there about
different technology choices. Do you believe in neutrality in
technology?
Mr. Genachowski. Technological neutrality?
Senator Cantwell. Yes.
Mr. Genachowski. Yes.
Senator Cantwell. I think it is very important. There are
some models, and having neutrality I think is very important.
Thank you, Mr. Chairman.
The Chairman. Thank you.
Thank you, Mr. Chairman.
This hearing is adjourned.
[Whereupon, at 4:37 p.m., the hearing was adjourned.]
A P P E N D I X
Prepared Statement of Hon. John F. Kerry,
U.S. Senator from Massachusetts
Mr. Chairman, thank you.
Chairman Genachowski, I support the National Broadband Plan and
consider it a national priority to get robust, open, and affordable
broadband to every home. That infrastructure could serve as a platform
for innovation, jobs, growth, and a more participatory democracy. But
it will not reach its potential if we continue to follow the previous
Administration's philosophy that because broadband service is carried
over the wires owned by telephone and cable we should do nothing. Under
that philosophy, we fell behind the rest of the world in broadband. And
our falling behind was not due to a lack of consensus on the goal that
we should have the strongest broadband platform in the world. It was
due to a failure of policy.
In 2004, both President Bush and I called for affordable universal
broadband service by 2006, and I said it needed to be 100 times as fast
as it was then. The reasons we have not reached those goals are
outlined in the National Broadband Plan: broadband service is highly
concentrated in the hands of one or two providers in most markets,
wireless broadband is not robust enough to competitively drive
improvements in wired broadband service, consumers lack the information
they need to make well informed decisions, and we have not yet
modernized our Universal Service Fund to ensure rural America is
broadband connected.
To our industry friends who are rightly proud of the growth in
broadband to date, I say that yes, it is true that we have seen an
Internet fueled revolution in communications over the last twenty
years. But that does not mean we cannot nor should not be doing better.
I find it unacceptable that Americans in big cities like Boston don't
enjoy the prices or level of service common in cities in South Korea or
Japan. It is wrong that seven million Americans in small towns like
Monroe and in sections of the western part of my State enjoy no
broadband service at all. And the fact that well over half of our
public school kids in Boston do not have Internet service at home is
hurting their ability to learn and compete.
Mr. Chairman, I believe that there is a clear role for your agency
and Congress to play to change these circumstances. But as you know,
your authority to do so has come into question because a Federal
appeals court ruled last week that the agency is highly limited in what
it can do under the current regulatory classification of broadband
services. I have not advocated that the FCC reclassify broadband
services as a result of this decision because I trust your judgment and
want you to explore all options. But I absolutely believe that the
agency has that legal authority to reclassify the service in order to
protect consumers and provide for universal access to affordable
broadband.
According to the FCC General Counsel, the court decision places a
number of Americans and American communities at risk of being left
behind. He wrote recently that the ``decision may affect a significant
number of important Plan recommendations. Among them are
recommendations aimed at accelerating broadband access and adoption in
rural America; connecting low-income Americans, Native American
communities, and Americans with disabilities; supporting robust use of
broadband by small businesses to drive productivity, growth and ongoing
innovation; lowering barriers that hinder broadband deployment;
strengthening public safety communications; cybersecurity; consumer
protection, including transparency and disclosure; and consumer
privacy.''
On the other side, telephone and cable companies are arguing that
they should be unregulated and free to deliver broadband service as
they wish until a new law is written. And I am not opposed to
considering a new legal regime of governance designed specifically for
broadband service. But I do not believe broadband either should or
needs to go without FCC oversight until then. If the Commission can
come up with an alternative to reclassification of broadband service
for the purpose of fulfilling your mission, then I am open to hearing
it. My bottom line, though, is that we must ensure that the values that
produced ubiquitous telephone service in the 20th century combined with
the market incentives for competition in the 1996 Telecommunications
Act are part of the 21st century's platform for communication. The FCC
has it within its authority to do that by revisiting the last
Administration's regulatory decisions, and if necessary we can
supplement those efforts legislatively.
The Broadband Plan calls for the United States to develop the most
robust, widely accessible broadband infrastructure in the world by
2020. It states that we can achieve that by releasing more spectrum to
encourage wireless broadband competition, better informing consumers,
and protecting the open Internet. You have also suggested modernizing
the Universal Service Fund and investing in a wireless network police
and firefighters can access and rely on to safeguard their vital
communications during emergency situations. Those efforts would
respectively result in investments in rural broadband and would ensure
that the radio collapses that occurred in the wakes of 9/11 and
Hurricane Katrina never happen again. I support each of these
initiatives.
I have a number of questions for you today that I hope will help
give Americans the clearest picture possible of how your
recommendations will produce results and what we in Congress need to do
to help you. And as you pursue those results, you can be confident that
you have an ally in this, Senator.
______
Response to Written Question Submitted by Hon. John D. Rockefeller IV
to
Hon. Julius Genachowski
Question. As I noted at our hearing, in the near-term, I want the
FCC to use all of its existing authority to protect consumers and
pursue the broad objectives of the broadband plan. How, if at all,
would classification of Internet access service as either a
telecommunications service or information service affect efforts to
address online copyright theft, computer viruses or spam, or
cybersecurity?
Answer. The D.C. Circuit's opinion in Comcast v. FCC cast serious
doubt on the legal theory the Commission used for the past few years to
support its vital role with respect to broadband Internet access. I
have shared with my fellow Commissioners a draft Notice of Inquiry for
their consideration at the Commission's June 17 Open Meeting. This
Notice would initiate an agency proceeding to seek public comment on
how the Commission should best address the challenge that Comcast has
handed us. It would seek comment on all options, and invite any ideas
for how the Commission should proceed, including: maintaining the
current ``information service'' classification of services such as
cable modem and DSL Internet access; classifying broadband Internet
connectivity service as a ``telecommunications service'' to which all
the requirements of Title II of the Communications Act would apply; and
a ``third way''--similar to the highly successful approach that has
been used for cell phone services since 1993--under which the
Commission would identify the Internet connectivity service that is
offered as part of wired broadband Internet service as a
telecommunications service and forbear from applying all provisions of
Title II other than the small number that are needed to implement
fundamental universal service, competition, and consumer protection
policies.
As you know, Section 1 of the Communications Act explains that the
Commission exists ``for the purpose of the national defense [and] for
the purpose of promoting safety of life and property through the use of
wire and radio communication.'' Cybersecurity is a growing concern, and
the Commission has recently begun two proceedings to assess our needs
in this area: we have launched an inquiry on the ability of existing
broadband networks to withstand significant damage or severe overloads
as a result of natural disasters, terrorist attacks, pandemics or other
major public emergencies; and we have begun a proceeding to seek public
comment on the proposed creation of a new voluntary cybersecurity
certification program that would encourage communications service
providers to implement a full range of cybersecurity best practices. We
will examine the records of these proceedings closely, along with the
record generated in response to the Notice of Inquiry on our legal
framework. To the extent that the Commission possessed the necessary
authority to address cybersecurity, as well as online copyright theft,
computer viruses or spam before Comcast, the ``third way'' I mentioned
above would protect that authority. If, on the other hand, the
Commission decides to maintain the information service classification,
jurisdictional issues would be addressed on a case-by-case basis, in
light of the particular details of the proposal at issue.
I welcome your recent announcement that you, along with Chairmen
Kerry, Waxman, and Boucher, intend to start a process to develop
proposals to update the Communications Act. I welcome that process, and
any new ideas that others may propose to address this issue, and the
Commission stands ready to serve as a resource to Congress as it
considers legislative changes in this area.
______
Response to Written Questions Submitted by Hon. Daniel K. Inouye to
Hon. Julius Genachowski
Question 1. I appreciate and support the efforts of the Federal
Communications Commission (FCC) to provide a special emphasis on the
needs of Native Americans. Broadband adoption rates by those living on
Tribal lands continue to be among the lowest of any population group.
According to the FCC's data, fewer than 10 percent of those living on
Tribal lands have terrestrial broadband available. Factors contributing
to this situation include the rural nature of many of these lands and
the lack of adequate broadband deployment. The plan also notes the
similar circumstances facing Native Alaskans. I am most pleased with
the FCC's expression that the plan's recommendations addressing Tribal
communities are intended to include Native Hawaiians. Do I have your
assurance that as you move forward with your efforts to improve
broadband deployment and adoption in Native communities, you will take
into consideration the unique needs of Native Hawaiian communities and
take appropriate steps to fully address these needs?
Answer. Yes. As the Commission moves forward in its efforts to
improve broadband deployment and adoption in Native communities, we
will most certainly take into consideration the unique needs of Native
Hawaiians and work to address those needs. The National Broadband Plan
is intended to bring broadband to all Americans. Many of the
recommendations in the Plan will assist communities, including Native
Hawaiians, that have fallen behind with respect to broadband deployment
and adoption. The Plan also includes a number of recommendations to
improve broadband deployment and adoption on Tribal lands specifically.
We intend for as many of these recommendations to apply to Native
Hawaiians as possible consistent with current and future law.
Question 2. Can you outline the impact that ``repacking'' the
broadcast band would have on Hawaii? As you know, Kauai is served by
translators. How would the FCC's proposals affect this population? As
we saw recently with tsunami warnings, this emergency service provided
by these translator stations was essential to potentially saving lives.
Moreover, Hawaii Public Television also serves the entire state with
translators. Will this service be put in jeopardy?
Answer. We recognize the value and importance to the public of
continuing to maintain a viable broadcast television service. For
example, as you observe with respect to the tsunami warnings provided
by TV translators on Kauai, TV stations provide important services that
must be preserved. We therefore will seek to limit the impact on
television service from recovery of spectrum, and no stations will be
required to cease operations. In order to make spectrum available for
new uses, we may need some stations to change their channels and/or we
may give others the opportunity to share channels. The plan under
consideration for recovery of broadcast television spectrum would not,
however, require that any stations involuntarily share or otherwise
yield their channels; any such actions would be voluntary on the part
of station licensees. Like stations elsewhere in the country, stations
in Hawaii, both full service and low power (including translators)
could be required to change channels or may seek to share channels.
However, no broadcaster would have to go off the air. The Commission
will carefully consider the interests of television broadcasters and
the public as it proceeds with the recovery of spectrum for new
broadband uses.
Question 2a. To follow up on this point, what does ``repacking''
and channel sharing mean for over-the-air HD? I also understand that
the majority of Honolulu TV stations are multi-casting new content.
What would happen to this service? Will my constituents need to rescan
digital TV's and converter boxes? If channels are moved will my
constituents need to purchase new antennas?
Answer. Re-packing by itself would have no impact on a station's
ability to provide HD or any multicast services it may choose to offer.
With respect to channel sharing, information gathered in preparation of
the National Broadband Plan indicates that two stations sharing a
channel should each be able to provide HD, multicast SD and mobile
program services. Arrangements involving sharing between more than two
stations could limit the service options of individual broadcasters in
such arrangements to some extent and, in particular, their ability to
provide HD and multicast services simultaneously. Any such outcome
would be the result of voluntary action by the affected broadcaster,
and would not be imposed by the re-packing plan recommended in the
National Broadband Plan.
Any rearrangement of television channels, which includes re-
packing, would require viewers to re-scan their digital television
receivers and converter boxes. Also, viewers might need to obtain new
antennas in cases where local stations would: (1) re-locate to a new
transmitter at a site farther away or (2) move to low VHF channels
(channels 2-6) and a viewer's antenna does not already include a
capability for effective reception of low VHF signals.
Question 2b. Hawaii broadcasters have expressed some concerns with
the voluntary nature of your spectrum proposals. How would the
Commission proceed if no local broadcasters agree to ``share'' channels
or turn in their licenses all together?
Answer. For the Plan to work, we don't need all, or even most
licensees to voluntarily reducing use of UHF spectrum by going off the
air, channel sharing or moving to the VHF band. If a limited number of
broadcasters in a limited number of markets relinquish UHF spectrum,
our staff believes we can free up a very significant amount of
bandwidth. I believe, and the staff at the FCC believes, that a
voluntary approach will work. We do not believe that it will come to
the point where we have to examine other mechanisms.
Question 2c. Can you further elaborate on spectrum user fees and
how you envision the Commission proceeding with them?
Answer. The National Broadband Plan calls on Congress to grant the
FCC and NTIA authority to impose spectrum fees, but only on spectrum
that is not licensed for exclusive flexible use. In my view, spectrum
fees can serve some of the same effects that a well-functioning market
produces by compelling spectrum users to recognize the value to society
of the spectrum that they use.
Question 3. The National Broadband Plan (NBP) proposes a goal of
having 100m homes subscribed at 100 Mbps by 2020 while the leading
nations already have 100 Mbps fiber-based services at costs of $30 to
$40 per month and beginning roll-out of 1 Gbps residential services,
which the FCC suggests is required only for a single anchor institution
in each community by 2020. This appears to suggest that the U.S. should
accept a 10 to 12 year lag behind the leading nations. What is the
FCC's rationale for a vision that appears to be firmly rooted in the
second tier of countries?
Answer. The National Broadband Plans sets forth a vision for the
United States to lead the world in the number of homes and people with
access to affordable, world-class broadband connections. The 100-
squared initiative, which is an aspiration goal of providing 100
million homes with access to 100 Mbps download speeds by 2020, will
help ensure America's global competitiveness in the 21st century. A
widespread level of affordable high-speed connectivity will encourage
innovators to develop the next generation of cutting-edge applications.
As a milestone, by 2015, 100 million U.S. homes should have affordable
access to actual download speeds of 50 Mbps and actual upload speeds of
20 Mbps.
The Plan also sets forth recommendations designed to spur research
and development, which are also key aspects of ensuring that America
remains a broadband world leader. In particular, the Plan recommends a
renewed focus on a Federal broadband research and development funding
agenda, which includes broadband networks, equipment, services and
applications. For U.S. companies to continue to be leaders in high-
value areas of the global broadband ecosystem, they must continue to
generate and benefit from scientific innovation.
Moreover, the Plan's universalization targets of 4 Mbps download
and 1 Mbps upload is aggressive. It is one of the highest
universalization targets of any country in the world. Many nations,
such as South Korea and Finland, adopted short-term download targets
around 1 Mbps. The Plan recommends reevaluting the 4 Mbps target every
year so this target may rise over time, which will ensure that
Americans continue to receive high quality broadband access at an
affordable rate, and that consumers in rural areas will continue to
receive broadband service that is reasonably comparable to the service
provided in urban areas.
Question 3a. 100 Mbps service typically costs $100 per month in the
U.S., or about 3 times that of other countries, and some have claimed
that these costs will go up under the proposed Plan. We already know
that price is one of the barriers to broadband adoption in this
country. What is the FCC's vision for how prices in the U.S. should
compare to other developed nations, and how will this be achieved?
Answer. One of the goals of the Plan is for every American to have
access to robust broadband service at an affordable price. The
Commission intends to achieve this and other goals through policies
that ensure robust competition, and as a result, maximize consumer
welfare, innovation and investment. Although the price of broadband
service is relevant to achieving our goal, no single metric can provide
an adequate basis for comparison particularly given differences between
the U.S. and other developed nations in measures of household income,
market and political structures, demography and geography.
Pursuant to the Broadband Data Improvement Act, the FCC will
continue to assess its international standing as part of the annual
report required by Section 706 of the Communications Act. The report
intends to compare the extent of broadband service capability,
including information about transmission speeds and price, in a total
of 75 communities in at least 25 countries. Part of this review
involves comparing relevant similarities and differences in each
community, including their market structures, level of competition, the
types of technologies deployed, applications and services those
technologies enable, the regulatory models, types of applications and
services used, and information about business and residential use of
such services. This information will help the Commission staff evaluate
our country's standing relative to other developed nations based on
several parameters, which will provide a more holistic comparison than
price alone.
Question 3b. Is the FCC committed to promoting the availability of
symmetric broadband services which can enable telework, home-based
entrepreneurship, home-based health care and more?
Answer. The National Broadband Plan included many recommendations
meant to remove barriers to and promote telework and support
entrepreneurship, as well as modernize health IT. The Plan recommended
that Congress consider eliminating tax and regulatory barriers to
telework and that the Federal Government should promote telework
internally. I welcome the opportunity to discuss any other ideas you
may have on promoting these home-based options.
Question 4. While the NBP tasks the FCC with the commendable goal
of ensuring all Americans have access to broadband, it does not ensure
that all Americans will receive comparable affordable services. In
reality, the 100 squared plan (100 million households receiving 100
Mbps) will likely be implemented in urban areas, while rural Americans
are only assured of a speed of 4 Mbps. Are we no longer committed to
ensuring that all Americans receive comparable affordable communication
services?
Answer. The Commission remains committed to ensuring that Americans
in all regions of the Nation have access to telecommunications and
information services that are reasonably comparable to those services
provided in urban areas and at rates that are affordable and reasonably
comparable to rates charged for similar services in urban areas, as
required by section 254 of the Communications Act. I believe that 4
Mbps broadband service is, in fact, reasonably comparable to the
broadband service provided in urban areas today. Although the National
Broadband Plan set an aspirational goal of 100 Mbps, the median speed
of broadband service purchased by consumers today is 4 Mbps, and only 6
percent of consumers subscribe to broadband service that exceeds 10
Mbps. Moreover, it is important to balance the cost of funding
universal service against the burdens on consumers who contribute into
the fund. While I believe that 4 Mbps is an appropriate target today, I
am committed to revisiting that target every 4 years and adjusting it
as circumstances change. Doing so will ensure that there is no digital
divide in this country.
Question 4a. Will this lead to a bandwidth divide between urban and
rural Americans?
Answer. As discussed above, 4 Mbps is the median speed of broadband
service currently purchased by consumers and is therefore an
appropriate target today. I am committed to revisiting that target
every 4 years and adjusting it as circumstances change to ensure that
services in rural areas are reasonably comparable to broadband services
in urban areas. Doing so will ensure that there is no digital divide in
this country.
Question 5. Under the NBP, rural communication carriers would be
required to move from ``rate of return regulation'' to ``price cap
regulation.'' Under rate of return regulation, rural telecommunications
providers have been able to invest in the build-out of broadband
infrastructure that is meeting the growing needs for bandwidth across
rural America. Why would it be good public policy to abandon the rate
of return regulatory system that has already allowed the deployment of
broadband to many rural, high-cost areas of the country?
Answer. The National Broadband Plan sets forth a vision to provide
broadband access to all Americans, regardless of where they live and
regardless of the regulatory classification of their carrier. Many
providers, including both price cap and rate-of-return carriers, have
made significant investments in broadband, and the Plan outlines ways
to reduce costs, such as pole attachment and rights of way reform, to
promote further investment to ensure all Americans have access to
broadband. Yet, the Plan also recognizes that there are some geographic
areas that lack a private business case to deploy broadband. Doing
nothing would lead to a growing digital divide, which is not an option.
As one critical step to achieve the goal of universal broadband,
the Commission must reconfigure the current High-Cost Universal Service
Fund, which is designed to support voice service, to a new universal
service program, described in the Plan as the ``Connect America Fund,''
that will provide support for broadband networks capable of providing
voice services. As part of this conversion, the Plan recommends moving
rate-of-return carriers to incentive regulation. The Plan does not,
however, specify the type of incentive regulation, such as price cap.
A shift from rate-of-return to incentive regulation advances both
to the general goal of ensuring widespread deployment of broadband
networks and the specific tool of universal service reform. Rate-of-
return regulation was implemented at a time when monopoly providers
offered regulated voice telephone service over copper wires in a
particular geographic area. Such an era no longer reflects the reality
of converging technologies and competition in the 21st century
broadband world. Indeed, a growing number of rural carriers have
voluntarily elected to convert to price cap regulation to become more
efficient and competitive. Moreover, the conversion to incentive
regulation could help limit growth in the legacy High-Cost Universal
Service Fund while the Commission moves to adopt a more efficient and
targeted funding mechanism for government support for broadband
investment.
Incentive regulation could take many forms. Indeed, the majority of
states have already recognized the benefits of moving to some form of
incentive regulation--with over 30 states having already eliminated
rate of return regulation for local rates. States have found it
possible to craft regimes that provide the necessary stability for
ongoing investment. The Commission is seeking comment on the
recommendation in the Plan, including the proposal to move to incentive
regulation. The Commission also asks parties to suggest other
alternatives that would allow the Commission to achieve the National
Broadband Plan goals of world-leading, affordable broadband service for
all Americans. The Commission welcomes and encourages all interested
parties to provide suggestions, data and recommendations in response to
the Notice.
Question 6. The NBP says that the FCC should ``include market-based
mechanisms to determine the firms that will receive Connect America
Fund support and the amounts they will receive.'' Can you give some
examples of what this market-market based mechanism might be?
Answer. The National Broadband Plan recommends that the Connect
America Fund should rely on market-based mechanisms where appropriate
to determine the entities that should receive support and how much
support should be provided. On April 21, 2010, the Commission adopted a
Notice of Inquiry and Notice of Proposed Rulemaking, which sought
comment on a procurement auction mechanism proposed by 71 economists.
In addition, the Commission previously sought comment on competitive
bidding, including reverse auctions. Requests for proposals (RFPs) or
other procurement processes are additional examples of market-based
mechanisms that could be used to determine which entities should
receive support and support levels.
Question 6a. As changes to the price regulation structure are made,
and market-based mechanisms are implemented to determine which
providers will receive support, what consideration has been given to
the billions of dollars in loans rural telecommunication providers have
borrowed from the Rural Utilities Service (RUS), as well as private
sector financiers Rural Telephone Finance Cooperative (RTFC), CoBank,
and others, to continue to expand and improve broadband services to
their customers in rural America? Do you believe these investments
might be put in jeopardy as these policy shifts move forward and create
uncertainty in the market?
Answer. The Commission staff met with RUS and CoBank, among others,
on a variety of occasions to exchange ideas and get their input as we
developed recommendations for the Plan. The recommendations in the Plan
call for a staged and measured transition to enable the industry time
to prepare and make adjustments. The Plan recommends the creation of a
Connect America Fund to support broadband service in areas that
otherwise would not have access to broadband because the costs of
serving such areas exceed the revenues. In other words, the Plan
recommends providing support to geographic areas that lack a private
sector business case to justify deployment and the provision of
service--areas that therefore would not have any broadband access
absent public support.
I believe we should ensure that communities that have already have
access to broadband today continue to have such access in the future.
An important component of the Plan's recommendations is the recognition
that some areas will require ongoing support from the new Connect
America Fund to maintain broadband service. The Commission is in the
process of implementing these recommendations and looks forward to
receiving input from RUS, CoBank and others on how to craft rules that
will create a stable environment for ongoing investment in rural
America.
Question 7. Please describe the steps that have been taken by the
FCC to coordinate with the RUS to ensure that decisions made by the
FCC, and its related entities such as the National Exchange Carrier
Association (NECA), do not put into jeopardy investments made by rural
carriers and the underlying loans that made such investments possible.
Answer. The Commission staff had a variety of meetings with the
leadership and staff at RUS, as well as meetings with NECA and
representatives of rural carriers, including OPASTCO, WTA and NTCA to
receive input on the development of the Plan. We will continue to meet
with RUS, NECA and other interested stakeholders throughout the
rulemaking process to solicit input and factual information that will
enable the Commission to craft workable policies that will ensure that
all Americans have access to broadband.
Question 8. Chapter 17 of the plan includes a section on the legal
framework for the FCC's implementation of the plan. In your testimony
you stated that your counsel, along with interested outside counsel,
are evaluating different options and possibilities. Concerns have been
raised about the impact that the uncertainty of future actions by the
FCC would have on decisions by broadband providers to invest in
upgrades or expand service. How realistic are these concerns? What
actions can the FCC take now to allay these concerns and to provide an
environment that will continue to create jobs and stimulate investment
and innovation?
Answer. Promoting continued investment and job creation, both in
the core broadband networks and through Internet-based services and
applications that ride on such networks, is a key priority for the FCC
and a key focus of the National Broadband Plan. The private sector is
the key to investment and job creation, but government policy can help
facilitate those outcomes, including through recommendations of the
National Broadband Plan to spur broadband deployment and adoption, such
as universal service reform. Telecommunications policy must take
account of current market and technological realities.
After the National Broadband Plan was released, the United States
Court of Appeals for the District of Columbia Circuit released its
decision in Comcast Corp. v. FCC, 600 F.3d 642 (D.C. Cir. 2010). The
Comcast decision casts serious doubt on whether the legal framework the
Commission chose for broadband Internet services nearly a decade ago is
adequate to achieve core broadband policies, which prior Commissions
thought they had legal authority to implement. To confront this
challenge, I have shared with my fellow Commissioners a draft Notice of
Inquiry for their consideration at the Commission's June 17 Open
Meeting. This Notice would initiate an agency proceeding to seek public
comment on how the Commission should best address the challenge that
Comcast has handed us, including how the agency can foster
predictability and promote innovation and investment. It would seek
comment on all options, and invite any ideas for how the Commission
should proceed, including: maintaining the current ``information
service'' classification of services such as cable modem and DSL
Internet access; classifying broadband Internet connectivity service as
a ``telecommunications service'' to which all the requirements of Title
II of the Communications Act would apply; and a ``third way''--similar
to the highly successful approach that has been used for cell phone
services since 1993--under which the Commission would identify the
Internet connectivity service that is offered as part of wired
broadband Internet service as a telecommunications service and forbear
from applying all provisions of Title II other than the small number
that are needed to implement fundamental universal service,
competition, and consumer protection policies.
As you know, Chairmen Rockefeller, Waxman, Kerry, and Boucher, have
announced they will start a process to develop proposals to update the
Communications Act. I welcome that process, and any new ideas that
others may propose to address this issue, and the Commission stands
ready to serve as a resource to Congress as it considers legislative
changes in this area.
______
Response to Written Questions Submitted by Hon. John F. Kerry to
Hon. Julius Genachowski
Question 1. Writing on the effect of the recent court decision on
the National Broadband Plan, the FCC General Counsel wrote,
``yesterday's decision may affect a significant number of important
Plan recommendations. Among them are recommendations aimed at
accelerating broadband access and adoption in rural America; connecting
low-income Americans, Native American communities, and Americans with
disabilities; supporting robust use of broadband by small businesses to
drive productivity, growth and ongoing innovation; lowering barriers
that hinder broadband deployment; strengthening public safety
communications; cybersecurity; consumer protection, including
transparency and disclosure; and consumer privacy.'' Mr. Chairman,
given these specific communities and issues that the decision places at
risk, how long can the FCC examine the decision before taking action?
Answer. I intend to address the Commission's legal framework for
broadband by the end of this year. As you know, after the National
Broadband Plan was released, the United States Court of Appeals for the
District of Columbia Circuit released its decision in Comcast Corp. v.
FCC, 600 F.3d 642 (D.C. Cir. 2010). The Comcast decision casts serious
doubt on whether the legal framework the Commission chose for broadband
Internet services nearly a decade ago is adequate to achieve core
broadband policies, which prior Commissions thought they had legal
authority to implement. To confront this challenge, I have already
shared with my fellow Commissioners a draft Notice of Inquiry for their
consideration at the Commission's June 17 Open Meeting. This Notice
would initiate an agency proceeding to seek public comment on how the
Commission should best address the challenge that Comcast has handed
us. It would seek comment on all options and invite any ideas for how
the Commission should proceed, including: maintaining the current
``information service'' classification of services such as cable modem
and DSL Internet access; classifying broadband Internet connectivity
service as a ``telecommunications service'' to which all the
requirements of Title II of the Communications Act would apply, and; a
``third way''--similar to the highly successful approach that has been
used for cell phone services since 1993--under which the Commission
would identify the Internet connectivity service that is offered as
part of wired broadband Internet service as a telecommunications
service and forbear from applying all provisions of Title II other than
the small number that are needed to implement fundamental universal
service, competition, and consumer protection policies.
I welcome your recent announcement that you, along with Chairmen
Rockefeller, Waxman, and Boucher, intend to start a process to develop
proposals to update the Communications Act. I welcome any new ideas
that others may propose to address this issue, and the Commission
stands ready to serve as a resource to Congress as it considers
legislative changes in this area.
Question 1a. I was here in 1996 and I can assure you that I never
meant for cable and telephone broadband Internet service providers to
fall outside the authority of the FCC to protect consumers, protect
against discrimination, ensure that people with disabilities are given
consideration, or ensure that modern communications are available to
everyone in America. Given the history of communications policy, would
it not fall outside of our values to have a central communications
service not subject to the jurisdiction of the Federal Communications
Commission?
Answer. Congress created the Federal Communications Commission with
an explicit mission: ``to make available, so far as possible, to all
people of the United States . . . A rapid, efficient, Nation-wide, and
world-wide wire and radio communications service with adequate
facilities at reasonable charges, for the purpose of the national
defense, [and] for the purpose of promoting the safety of life and
property through the use of wire and radio communication.'' Broadband
is increasingly essential to the daily life of every American. It is
fast becoming the primary way we as Americans connect with one another,
do business, educate ourselves and our children, receive health care
information and services, and express our opinions. That is why in
March, a unanimous FCC said in our Joint Statement on Broadband that
``[w]orking to make sure that America has world-leading high-speed
broadband networks--both wired and wireless--lies at the very core of
the FCC's mission in the 21st Century.''
Question 2. Mr. Chairman, some have argued that you should cede
authority over broadband service to the FTC until and unless the
Congress writes a new law. Yet the FTC has no clear rulemaking
authority to benefit consumers in policy matters such as universal
service reform, lifeline/link-up for broadband, emergency
communications policies, and accessibility for the disabled. And limits
to its rulemaking authority make it unlikely the FTC could implement
the specific goals of the FCC's national broadband plan, such as
increased transparency on broadband service speeds, truth-in-billing
reform, and increased privacy protections. Also, the FTC has no clear
proactive rulemaking capability to promote competition policy, through
policies such as data roaming, interconnection, or pole attachment rate
reform. These policies are key components of the FCC's national
broadband plan. Mr. Chairman, what do you say to those who argue that
the FCC should cede its authority over communications over broadband to
the FTC?
Answer. In the decades since Congress created the Commission, the
technologies of communications have changed and evolved, and with the
guidance of Congress, the Commission has tailored its approach to these
changes. But the basic goals have been constant: to encourage private
investment and the building of a communications infrastructure that
reaches all Americans wherever they live; to pursue meaningful access
to that infrastructure for economic and educational opportunity and for
full participation in our democracy; to protect and empower consumers;
to promote competition; to foster innovation, economic growth, and job
creation; and to protect Americans' safety. While the FCC will continue
to work closely with our sister agencies including the Federal Trade
Commission and the United States Department of Justice on issues of
mutual concern, I believe the FCC has a unique and vital role in
achieving these goals.
Question 3. Mr. Chairman, Section 706 of the Telecommunications Act
of 1996 requires the FCC to determine whether ``advanced
telecommunications capability [i.e., broadband or high-speed access] is
being deployed to all Americans in a reasonable and timely fashion.''
If this is not the case, the Act directs the FCC to ``take immediate
action to accelerate deployment of such capability by removing barriers
to infrastructure investment and by promoting competition in the
telecommunications market.'' Mr. Chairman, how does your plan remove
barriers to investment and promote competition in the
telecommunications market in accordance with the direction in the 1996
Act?
Answer. Many of the recommendations in the National Broadband Plan
focus on removing or reducing barriers to investment and competitive
entry. In particular, the Plan focuses in several areas on the key
input components of broadband infrastructure and service deployment.
For example, this month the Commission is scheduled to implement the
Plan's recommendations regarding utility pole attachments, allowing the
use of existing infrastructure for the deployment of fiber and wireless
networks to provide next generation services. Also, the Plan makes
several recommendations to improve the availability of spectrum, which
is a crucial ingredient for many new broadband services. In addition,
the Plan recommends significantly reforming the universal service
program to ensure that broadband services are being deployed
effectively and efficiently throughout the Nation.
Question 4. Nearly 100 million Americans are not connected to the
Internet. According to your report, ``they are older, poorer, less
educated, more likely to be a racial or ethnic minority, and more
likely to have a disability than those with a broadband Internet
connection at home.'' Cost remains the primary barrier to entry, and
limited digital proficiency, especially among seniors and the less
educated, is also cited as a reason for this gap. And children in the
inner city and many rural areas lack the textbooks, tools and teachers
to help improve their readiness for the digital economy. I understand
that not all Americans will have access to the same level of broadband
service, but I believe we should be making a basic level of service
available to everyone at an affordable rate. In the 20th century, we
determined that Americans needed access to the predominant
communications network of that time, telephone service, to get a job,
to connect with each other, and to be able to access health and
emergency services. How are those values reflected in your plan for
broadband service and do Americans need broadband service for those
purposes today?
Answer. As more aspects of daily life move online and offline
alternatives disappear, the range of choices available to people
without broadband narrows. Getting a job is more difficult without
access to online postings and the ability to submit applications
online. Students without broadband lack access to the same level of
information as their connected peers, and attempts to find medical
information without access to online health sources limits patients'
knowledge, choices and care. People without a broadband connection will
certainly not experience the potential benefits of broadband--increased
earning potential, enhanced connections with friends and family,
improved health and a superior education. Recommendations in the
National Broadband Plan reflect the importance of equality of access to
broadband service by setting a path to extend broadband networks
through public investment in privately owned infrastructure. The Plan
also includes a variety of recommendations to reduce barriers to
adoption of broadband--cost, digital literacy and relevance.
Question 4a. Mr. Chairman, I am worried about those kids who have
no Internet service at home even though Comcast serves Boston. And I
worry about the towns in Western Massachusetts subject to only one
provider of service, partially served by only one provider, or lacking
service all together. What do you say to those who argue that you
should only focus on those completely without access to the Internet
and leave the market alone as it relates to competition or urban
affordability?
Answer. The National Broadband Plan addresses all of these issues--
connecting the unserved, spurring competition, and foster adoption to
address cost barriers for low-income consumers. To connect the
unserved, the Plan sets forth a path to connect everyone to broadband,
which include, among other things, transitioning the Universal Service
Fund to support broadband. But, the Plan is not limited to connecting
the unserved. Rather, the Plan contains multiple recommendations that
will foster competition across the ecosystem. They include the
following:
Collect, analyze, benchmark and publish detailed, market-by-
market information on broadband pricing and competition, which
will likely have direct impact on competitive behavior (e.g.,
through benchmarking of pricing across geographic markets).
This will also enable the FCC and other agencies to apply
appropriate remedies when competition is lacking in specific
geographies or market segments.
Develop disclosure requirements for broadband service
providers to ensure consumers have the pricing and performance
information they need to choose the best broadband offers in
the market. Increased transparency will incent service
providers to compete for customers on the basis of actual
performance.
Undertake a comprehensive review of wholesale competition
rules to help ensure competition in fixed and mobile broadband
services.
Free up and allocate additional spectrum for unlicensed use,
fostering ongoing innovation and competitive entry.
Update rules for wireless backhaul spectrum to increase
capacity in urban areas and range in rural areas.
Expedite action on data roaming to determine how best to
achieve wide, seamless and competitive coverage, encourage
mobile broadband providers to construct and build networks, and
promote entry and competition.
Change rules to ensure a competitive and innovative video
set-top box market to be consistent with Section 629 of the
Telecommunications Act. The Act says that the FCC should ensure
that its rules achieve a competitive market in video
``navigation devices,'' or set-top boxes--the devices consumers
use to access much of the video they watch today.
Clarify the Congressional mandate allowing state and local
entities to provide broadband in their communities and do so in
ways that use public resources more effectively.
Clarify the relationship between users and their online
profiles to enable continued innovation and competition in
applications and ensure consumer privacy, including the
obligations of firms collecting personal information to allow
consumers to know what information is being collected, consent
to such collection, correct it if necessary, and control
disclosure of such personal information to third parties.
Further, the Plan also contains a variety of recommendations to
increase adoption, including ways to address cost barriers to broadband
adoption and utilization. In particular, the Plan recommends that the
Commission expand Lifeline Assistance (Lifeline) and Link-Up America
(Link-Up) to make broadband more affordable for low-income households.
In addition, the Plan recommends that the Commission consider free or
very low-cost wireless broadband as a means to address the
affordability barrier to adoption.
Question 4b. Mr. Chairman, you have repeatedly applauded a cable
industry program offering half-priced service for 2 years for low
income families with children in public middle school. It is called the
A+ program. How many communities have signed up for that program and
what could be done to make it more attractive?
Answer. The cable industry has proposed the Adoption Plus (A+)
program as a two-year pilot of a public-private partnership that would
be designed to promote sustainable broadband adoption for middle-school
aged children in low income households that do not currently receive
broadband service. The cable industry suggested that the Federal
Government provide funding to implement the pilot.
The A+ proposal provides an example of private industry taking
initiative and offering solutions to partner with other stakeholders
and provide comprehensive solutions for overcoming multiple barriers to
adoption for low-income school children. This program has not yet been
implemented, so many details of the program may need to be refined to
make sure that it is attractive for communities, competitively neutral,
and effective.
Several other efforts, such as Computers for Youth and Computers
for Families, provide comprehensive solutions targeting low-income
school-aged children and their families, and these programs could also
serve as models for a national pilot program.
Question 4c. The City of Boston applied for a BTOP grant to have
municipal broadband service delivered to poor communities. It was
rejected because there is cable modem and DSL service available there.
But your study cites that cost remains the primary barrier to service
for the working poor. If the private sector is not making some level of
service available to low income consumers at a very low price or for
free, shouldn't cities and municipalities have the opportunity to
provide those services?
Answer. The Commission is not involved with the evaluation or
review of the Broadband Technology Opportunities Program (BTOP) so the
Commission is unable to comment on the specifics of the City of
Boston's application or the merits of their proposal. Concerns
regarding the BTOP process should be directed to NTIA. The Plan
recommends that Congress make clear that state, regional, and local
governments can build broadband networks. Though municipal broadband
has its risks and may discourage private investment, the Plan suggests
that in the absence of private investment sufficient to meet local
needs, towns and cities should have the right to move forward and build
networks that serve their constituents as appropriate.
Question 5. Mr. Chairman, both the DOJ and the NTIA submitted
comments for the plan explaining that very few firms control the market
for high-speed Internet access in the U.S. Most people have at most a
choice of two providers who use broadband service to leverage the sale
of a bundle of other services. The Harvard Berkman Center also
submitted a study as part of your deliberation that concluded it was
necessary to open incumbent telephone and cable networks for wholesale
use by new entrants that want to provide competing services to people's
homes. I know that this is a highly contentious issue and I think it
speaks to the moderate approach you took to the construction of this
plan that the issue is not directly addressed in your report. I agree
that we should try better consumer disclosure and more wireless
competition first, but how will the Commission determine whether and in
what form it might be necessary to open the wires up to competition if
the spectrum and disclosure policies you have proposed do not drive
higher speeds and more competitive services? Is there anything
different about the market of broadband services for small businesses
that requires more heightened consideration of competition issues?
Answer. The Commission, through its implementation of various
provisions in the Communications Act, already requires many incumbent
local phone companies to share certain inputs from their networks with
competitors. The National Broadband Plan recommends that the Commission
review the hodgepodge of requirements for network sharing and develop a
comprehensive framework to ensure that broadband inputs, particularly
for small business services, are widely available. As a part of this
review, the Commission will also consider a variety of proposals for
access to incumbent facilities. The Commission plans to review the
needs of small businesses separately from those of residential users as
the needs and services available to meet those needs may differ.
Question 5a. In wireless, given the dominance of two carriers in
the market today, what is your benchmark for success in making the
wireless broadband industry more competitive?
Answer. There are few areas in communications that present greater
promise for our country than mobile--in terms of driving our economy
and delivering broad opportunity for all Americans--and our goal must
be for America to lead the world in mobile. To promote this goal, we
must ensure that American consumers have access to competitive
broadband data communications services whenever they want and wherever
they are, and also ensure that the United States has the fastest and
most extensive mobile networks in the world.
Competition is important for many reasons, including, of course,
that it produces low prices and high quality for consumers. Competition
also drives invention and innovation which makes it especially
important in a fast-changing marketplace like communications.
For its 14th Annual Mobile Wireless Competition Report, we have
undertaken a broader and more comprehensive analysis of the wireless
industry than the Commission has conducted in years past. The
Commission's competition policy will be fact-based and data-driven, and
intended to support innovation and investment in the manner that best
serves American consumers.
Question 6. I am committed to doing whatever we need to do and
spending what we need to spend to ensure that if another natural or
terrorist disaster hits the United States our first responders are not
left unable to communicate. Did the FCC propose a system that will
require police, fire, and emergency service agencies to rely on
commercial carriers for their mission-critical broadband communications
needs because commercial carriers have provided you with some assurance
that it will be made open for use by public safety officials? What is
the advantage of going commercial rather than allocating it directly to
public safety officials? As you know, scores of public safety agencies
have expressed concern with that proposal.
Answer. The National Broadband Plan proposes a comprehensive
strategy for creating a nationwide interoperable broadband network for
our Nation's police, fire and emergency services agencies. Under the
Plan, these agencies will have full use of the 10 megahertz of
dedicated 700 MHz spectrum that has already been allocated for public
safety broadband services. This spectrum will meet public safety
communications needs during normal operations and during most
emergencies. In the rare cases where additional capacity is required,
public safety users will have priority access to commercial networks,
including in the 700 MHz D Block. This overall strategy is the best
means of providing public safety users with adequate broadband capacity
while enabling them to leverage 4G commercial deployments in the 700
MHz band to significantly reduce costs.
Question 7. Pending at the Commission are more than one dozen
waiver requests filed by small and large jurisdictions, including
Boston, that want to start constructing such a network right now. These
jurisdictions seek to use the 10 MHz of spectrum already in the hands
of the Public Safety Spectrum Trust, dedicated specifically to public
safety in a manner that will be compliant with the Commission's broader
public safety policies and standards. Chairman Genachowski, can you
provide the Committee with your opinion on these waiver requests and
when you expect the Commission to act on them?
Answer. The Commission recently released an order granting
conditional waivers for early deployment to twenty-one petitioners,
including Boston. Each waiver recipient is required under the order to
adhere to certain technical specifications, such as mandatory use of
the LTE 3GPP Release 8 air interface, which is the version that major
carriers have announced they will be deploying starting this year, and
to submit detailed plans for achieving interoperability with other
networks. We also expect that such submissions will include a
discussion of any specialized equipment, features description of any
specialized equipment, feature or application, and how it will be used
to further public safety purposes, and how its use will conform to the
Commission's stated interoperability goals. This order will enable the
waiver recipients to move forward with their broadband deployment plans
while preserving the Commission's long-term goals for nationwide
interoperability.
Question 8. Mr. Chairman, if I understand correctly, you have
suggested a program by which you have indicated that some broadcasters
would submit spectrum that they have licensed but not allocated in
exchange for some portion of auction receipts, thereby creating a win-
win for them and wireless broadband users. And there is some room there
for consideration. In the top 10 TV markets, a median of 20 channels
out of 49 are directly being used by full-power broadcasters or to put
it another way 120 out of nearly 300 MHz are occupied and the rest are
lying fallow.
As you know, the broadcast spectrum proposal has met with much
skepticism and my broadcasters back home are no exception. I know that
this spectrum is the equivalent of beachfront property on the airwaves.
But I cannot support moving forward until I hear from my broadcasters
that it is workable and truly a win-win. Can you elaborate more on
channel sharing proposals in your plan? From what my broadcasters say,
channel sharing would strip consumers of the ability to watch HD,
multi-cast and mobile TV programming over-the-air. Is this accurate?
Answer. As discussed below, channel sharing would not limit
consumers' ability to watch HD, multicast, and mobile TV programming
over-the-air. Under the approach described in the National Broadband
Plan, channel sharing would be a voluntary option for broadcasters to
reduce their operating costs and provide a potential source of capital
for investment into programming. If a broadcaster chose not to
participate, their broadcast services would not change from what they
are today. With respect to station services under channel sharing,
information gathered in preparation of the National Broadband Plan
indicates that two stations sharing a channel should each be able to
provide HD, multicast SD, and mobile program services. Channel sharing
arrangements between more than two stations could, however, limit the
service options of individual broadcasters in such arrangements to some
extent and, in particular, their ability to provide HD and multicast
services simultaneously.
Question 8a. Mr. Chairman, my understanding is that the Plan
recommends that the FCC ``repack'' the broadcast television bands in an
effort to free up additional spectrum. Would re-scanning of TV's and
converter boxes be necessary after repacking, would that create
consumer confusion, and would this effect future multicast and HD
programming?
Answer. Viewers in markets where local stations were re-packed to
new channels or changed channels as part of a sharing arrangement would
need to re-scan their digital television receivers and converter boxes.
We also anticipate that there would be a period of time before the re-
pack would take place. To avoid consumer confusion, information would
be provided in advance advising viewers of the need to and the process
to re-scan their receivers and the date on which the channel changes
would take place. Re-packing by itself would have no impact on a
station's ability to provide HD or any multicast/mobile services it may
offer.
Question 8b. Mr. Chairman, as you know, Commissioner Clyburn has
expressed concerns about the effect this proposal would have on
diversity in broadcasting and on local journalism. We also had a
hearing on the future of journalism earlier this Congress. Where is the
FCC on their inquiry in this arena?
Answer. On January 21, 2010, the Commission issued a Public Notice
announcing its examination of the Future of Media and Information and
the Needs of Consumers. The objective of the review is to assess
whether all Americans have access to vibrant, diverse sources of news
and information that will enable them to enrich their lives and
communities, as well as our democracy. The Public Notice set out a
number of questions for which public comment was sought, and those
comments were due on May 7, 2010. In addition to those submissions,
project staff is reviewing existing studies, the records of other
proceedings and other resources for pertinent data. Staff also is
reaching out to industry, advocacy and public interest groups,
academics and others to participate in the proceeding, through written
filings or meetings. A Future of Media workshop on commercial media was
held on March 4, and another, on public and other noncommercial media,
on April 30. The project plans to issue a report by the end of the year
which provides an assessment of the current media landscape, analysis
policy options and, as appropriate, policy recommendations to the
Commission, as well as other government entities and parties. The
Inquiry will be conducted with great sensitivity to the First Amendment
and the need to protect free speech and an independent press. Any
recommendations will be crafted in furtherance of the longstanding
public interest goals of the Commission's media policy, including
diversity, localism and competition.
Question 9. In the National Broadband Plan, the FCC makes several
recommendations regarding wholesale competition regulations for
broadband services provided to small businesses. One proposal under
consideration by the FCC is a petition which seeks access to local
fiber facilities in order to provide broadband services to small
business customers. It is my understanding that the Small Business
Administration Office of Advocacy supported that petition. Are multiple
broadband providers competing to serve small businesses now and what
can you do to encourage broadband service delivery and packaging for
the unique needs of small businesses?
Answer. I'm certain that there is a great deal of variability among
small businesses throughout America regarding the competitive choices
each has available to serve its unique needs. With a proper regulatory
framework and suitable data necessary to implement that framework, we
can better ensure that small businesses have sufficient competitive
alternatives to meet their evolving needs. In response to the Plan's
recommendations, we are undertaking a review of existing policies and
development of just such a competitive framework.
Question 10. Mr. Chairman, though this debate today has broken
largely along partisan lines, it should not. Neither network neutrality
nor ensuring that our communications network is accessible to everyone
are partisan issues. The Christian Coalition's Vice President of
Communications, Michele Combs put it best in testimony before your
Commission when she said that ``We believe that organizations such as
Christian Coalition should be able to continue to use the Internet to
communicate with our members and with a worldwide audience without a
phone or cable company snooping in on our communications and deciding
whether to allow a particular communication to proceed, slow it down,
block it, or offer to speed it up if the author pays extra to be on the
`fast lane.' '' She went on to say, ``Any threat to the ability of
organizations and groups to reach the American public at very low cost
without permission is simply unacceptable and strikes at the heart of
an engaged citizenry and well functioning democracy in the 21st
century.'' Mr. Chairman, in your review of the comments on an Open
Internet and network neutrality, have you noticed a disconnect between
what those who use the Internet like the Christian Coalition on one of
the political spectrum and Daily Kos on the other or are users largely
united on this question?
Answer. Staff review of the comments in the Open Internet
proceeding is ongoing; we received reply comments from tens of
thousands of people and entities at the end of last month. Commenters
from across the political spectrum have expressed support for the
proposed open Internet principles, with a particular emphasis on the
benefits of the principles for promoting free speech and innovation,
and enabling new and/or traditionally marginalized voices to
participate online.
______
Response to Written Questions Submitted by Hon. Byron L. Dorgan to
Hon. Julius Genachowski
Question 1. Reforming intercarrier compensation and the Universal
Service Fund is a difficult but critical undertaking. Transitioning
from a regime that supports voice telephony to one that supports
broadband is not an easy task. The National Broadband Plan suggests
that the current size of the fund can be used to bring fast and
affordable broadband to the Nation. How do you plan to make these
changes without growing the current size of the fund?
Answer. Universal service resources are finite and contributions
have grown significantly over the last decade. The contribution factor
is at its highest ever level at more than 15 percent. To keep the
overall size of the Universal Service Fund within baseline projections,
the Commission will need to eliminate inefficient funding of legacy
voice service and refocus Universal Service Funding to directly support
modern communications networks that will provide broadband as well as
voice services.
The National Broadband Plan recommends a 10-year transition to
ensure that service providers that rely on universal service to provide
voice service to their communities can make the migration to broadband
successfully. During this transition, the Plan recommends that the
Commission establish a Connect America Fund to support broadband and a
Mobility Fund to provide one-time support to consumers in states that
significantly lag the national average for 3G service. During this same
period, the Plan also recommends that the Commission reduce spending
under the legacy high-cost support mechanisms and target the savings to
the Connect America Fund and other recommendations in the National
Broadband Plan. On April 21, 2010, the Commission adopted a notice of
inquiry and notice of proposed rulemaking, which sought comment on: (1)
moving rate-of-return companies to incentive regulation, (2)
retargeting interstate access support to a new Connect America Fund,
and (3) eliminating funding for competitive eligible telecommunications
carriers over a five-year period. The Plan recommends that by the end
of the transition, the Commission eliminate the legacy high-cost
support mechanisms and all support will be provided through the Connect
America Fund.
Question 2. Today, according to one survey, North Dakota ranks 42nd
out of fifty states in broadband speed. Your goal for ``100 Squared''--
100 million households with 100 megabits-per-second download speeds--by
2020 is laudable. Yet the plan also calls for a reformed Universal
Service Fund that supports broadband offerings at 4 Mbps. How can your
universal service plan get us to ``100 Squared''? How will you
structure the policies to meet these goals in a way that doesn't
exacerbate the existing digital divide?
Answer. The National Broadband Plan sets forth a path for the
United States to lead the world in the number of homes and people with
access to affordable, world-class broadband connections. The Plan
includes a goal of connecting 100 million U.S. homes with affordable
access to actual download speeds of at least 100 Mbps and actual upload
speeds of at least 50 Mbps by 2020. The Plan recommends encouragement
of private sector investment to realize this goal by, among other
things, fostering competition, driving demand for increased network
performance and lowering the cost of deploying infrastructure. These
will help inform consumers about broadband performance, expand services
and infrastructure, and reform access to rights-of-way to lower
barriers to entry for firms.
At the same time, ensuring all people have access to broadband
requires the Commission to set a national broadband availability target
to guide public funding. An initial universalization target of 4 Mbps
of actual download speed and 1 Mbps of actual upload speed, with an
acceptable quality of service for interactive applications, would
ensure universal access. The 4 Mbps is the median speed received by
residential consumers today, and what many consumers are likely to use
in the near term, given past growth rates. A universalization target of
4 Mbps download and 1 Mbps upload is aggressive. It is one of the
highest universalization targets of any country in the world. Many
nations, such as South Korea and Finland, have already adopted short-
term download targets around 1 Mbps.
To ensure that consumers in rural areas receive broadband speeds
reasonably comparable to urban areas, the Plan also recommends
reevaluating this 4 Mbps funding target every 4 years and adjusting it
as appropriate to reflect changing consumer use and demand. Doing so
will ensure that there is no digital divide in this country.
Question 3. Many of the goals laid out in the plan focus on
mobility and the need for fast, extensive wireless networks. But I do
not believe the plan addresses the issue of handset device exclusivity
and its effect on competition. Chairman Genachowski, at a hearing in
the Commerce Committee last June, you committed to reviewing the
exclusive arrangements between wireless carriers and cell phone
manufacturers. What is the current status is of the petition for
rulemaking on handset device exclusivity filed in May of 2008?
Answer. On May 20, 2008, the Rural Cellular Association filed a
petition requesting that the Commission initiate a rulemaking
proceeding examining ``exclusivity arrangements between commercial
wireless carriers and handset manufacturers.'' The Commission collected
a record on the petition last year. In addition to assessing the record
submitted, Commission staff are meeting with interested parties and are
independently monitoring and evaluating the availability of handsets to
consumers, and to smaller service providers, in the mobile wireless
marketplace.
Question 4. There are a number of departments and agencies that
work on broadband issues. How will the FCC work with those partners to
improve broadband access and availability in Indian country?
Answer. The NBP includes a number of recommendations to improve
coordination across Federal departments and agencies that work on
broadband issues. In particular, Recommendation 9.14 urges the
Executive Branch to establish a Federal-Tribal Broadband Initiative
specifically for this purpose. Once this Initiative is established, the
Commission will work closely with its Federal partners on the
Initiative to improve broadband access and availability on Tribal
lands.
We are already in the process of implementing other recommendations
that will enable the Commission to more effectively coordinate with
Federal partners. For example, we are creating an Office of Native
American Affairs, which will work with other Federal departments and
agencies to coordinate cross-agency efforts for helping Tribes. We
expect to appoint a Director to this Office shortly. We are also in the
process of establishing an FCC-Native Nations Broadband Task Force,
which will include senior staff from all FCC Bureaus and Offices. This
Task Force will ensure that Tribal concerns are considered in all
broadband-related discussions and initiatives involving the Commission
and other Federal departments and agencies.
Question 5. The National Broadband Plan proposes establishing a
Federal-Tribal Broadband Initiative, a FCC-Tribal Broadband Task Force
and an Office of Tribal Affairs. How will these entities coordinate
with tribes and with each other to assist tribes in improving broadband
access?
Answer. We envision that all three entities will coordinate with
each other in a close and integrated manner. The Office of Native
American Affairs will be led by a new Director, who will lead a staff
focused exclusively on Native American issues. In addition to having
dedicated staff support, the Director will also be able to leverage the
full expertise and resources of the Commission through the FCC-Native
Nations Broadband Task Force, which will be led by the Director and
will include senior staff from all the Bureaus and Offices. Once the
Federal-Tribal Broadband Initiative has been established, the Director
and the Task Force will represent the Commission on the Initiative.
With respect to coordinating with Tribes, the Office of Native
American Affairs will engage in regular and meaningful communication
with Tribal governments, organize outreach activities and events, and
serve as a resource and partner to Tribal governments. In addition,
both the FCC-Native Nations Task Force and the Federal-Tribal Broadband
Initiative will include elected or appointed leaders of Tribal
governments, which will enable and facilitate direct coordination with
Tribes. The Task Force will also develop a formal FCC consultation
policy for consulting with Tribal governments.
Question 6. The lack of data is a consistent problem for most
Indian issues, and broadband is no exception. I applaud your
recommendations aimed at better broadband data collection on tribal
lands. How can this data assist the FCC and others in increasing access
to broadband for tribes?
Answer. The lack of data regarding broadband deployment and
adoption on Tribal lands renders it difficult to understand the true
scope of the challenge, formulate intelligent policy, and address
specific needs across Tribal communities. For example, we do not have a
clear understanding of the amount of additional funding that would be
needed to deploy broadband infrastructure to all Tribal lands. The lack
of data also complicates efforts to measure the efficacy of adoption
efforts and initiatives. With better data, we could begin the process
of identifying needs, developing tailored approaches, and working with
Tribes to implement real solutions.
______
Response to Written Questions Submitted by Hon. Maria Cantwell to
Hon. Julius Genachowski
Question 1. Almost eight and one half years after 9/11, an
interoperable communications system for our first responders remains a
goal rather than a reality. There are some actions the FCC can take in
the immediate term to improve public safety communications. Pending at
the FCC are waiver requests from several cities that want to start
immediate construction of an interoperable public safety network.
Seattle is one of the cities. Seattle is proposing to use spectrum
already in the hands of the Public Safety Spectrum Trust in a manner
that will be consistent and compliant with the Commission's broader
public safety policies and standards.
Public safety organizations in neighboring communities in Pierce
County want to expand Seattle's proposed interoperable network
southward once it is up and running. Last year, there were five police
officers murdered in Pierce County. In one incident, law enforcement
officials told me that its lack of interoperable communications across
jurisdictions slowed down their manhunt to track down the perpetrator.
Do you believe the Seattle waiver request is consistent with the public
safety objectives of the national broadband plan?
Answer. We recently released an order granting conditional waivers
to twenty-one petitioners, including Seattle. This order will enable
Seattle and the other waiver recipients to move forward with their
broadband deployment plans while preserving the Commission's long-term
goals for nationwide interoperability.
Question 1a. The Commission's proposed broadband plan agenda
indicates it will act these on petitions no later than in the third
quarter this year. Can you assure me that the Commission will keep to
this schedule?
Answer. We have already released an order acting on these
petitions.
Question 2. The D Block auction during Chairman Martin's watch was
a complete failure. The National Broadband Plan recommends licensing
the D Block for commercial use, with options for public safety
partnerships. That is a change from the earlier plan for the D block
auction winner to build out a joint network for public safety and
commercial use.
There are some who argue that the spectrum should be given directly
to local public safety. Most emergencies tend to be either local or
regional in nature. Under this scenario, the local government would
negotiate with a local carrier to operate the network. Why do you
believe the approach described in the National Broadband Plan will be
more successful than providing the spectrum directly to public safety
in cities and regions and allowing them to negotiate with local
telecommunications providers?
Answer. The public safety broadband spectrum is licensed to the
Public Safety Spectrum Trust (PSST), which includes on its board
representation from a number of national public safety organizations.
With regard to the commercial D Block adjacent to the public safety
broadband spectrum, the Commission must auction the D Block for
commercial use in order to comply with current law. Notwithstanding the
legal requirement to auction the D Block, our analysis indicates that
mere reallocation of the D Block to public safety would not ensure
deployment of a nationwide, interoperable public safety broadband
wireless network that is reliable and resilient. The National Broadband
Plan's approach, on the other hand, will achieve this goal by providing
public safety users with 10 megahertz of dedicated spectrum, priority
access to 700 MHz commercial spectrum when they need it (providing
significantly more capacity), and the ability to leverage commercial
deployments--including in the D Block--to reduce their overall costs
significantly. Making the D Block available for commercial use will
also ensure there is a market for consumer-priced ``off the shelf''
devices that will greatly reduce device costs for public safety, in
contrast to the current situation where specialized public safety
devices often cost thousands of dollars per unit. One essential
ingredient to a nationwide, interoperable network, also recommended by
the Plan, is public funding to bring public safety's chosen partners up
to public safety standards and to extend the network into rural areas.
Reallocation of the D Block alone will not ensure a nationwide network.
Funding is necessary in this regard and the National Broadband Plan's
recommendations were based on a detailed cost model. The ability for
the National Broadband Plan's recommendations to create a nationwide,
interoperable public safety broadband network is a key is reason that
the former Chair, Vice Chair and two members of the 9/11 Commission
called the FCC's plan ``a realistic framework to move forward.''
Question 2a. Is getting the Emergency Response Interoperability
Center up and running a gating function for building out the public
safety network? How do you ensure that NIST and DHS will participate
fully in ERIC? Will that require legislation?
Answer. The Commission recently released an order establishing
ERIC, which is now in the initial staffing phase. The Commission is in
the process of negotiating Memoranda of Understanding (MOUs) with both
NIST and DHS, which should obviate the need for legislation to ensure
their participation. We have already been engaged in close coordination
with these Federal partners, and my staff and I look forward to working
with our Federal partners to make ERIC a success.
Question 2b. What happens to implementation of the public safety
recommendations of the National Broadband Plan if Congress cannot
appropriate $6.5 billion over the next 10-years for a new grant program
to help construct the network?
Answer. The bottom line is that, without significant public
funding, the public safety broadband network will be neither nationwide
nor fully interoperable. Reliance on commercial partnerships alone, or
on the reallocation of the D Block to public safety, cannot guarantee
deployment in remote areas or ensure that public safety broadband
facilities are built to required standards for hardening, reliability
and redundancy. The public funding program is therefore a crucial
component of the Plan's strategy for creating the network.
Question 2c. Do you believe the Commission currently has authority
under the universal service provisions of the Telecommunications Act of
1934 (as amended) to have telecommunications providers add a small
service charge to customers' bills to help toward the funding of the
public safety network's operations?
Answer. The Plan recommends that Congress consider enacting
legislation to create a funding program to support capital and
operational expenses for the public safety broadband network. I believe
that Congressional action is the best means of assuring that the
Commission has a clear source of authority to put this mechanism into
place. The public safety broadband network will thrive only if a
sustainable and adequate public funding mechanism is established to
support the operation, maintenance and continual evolution of the
network.
Question 3. My understanding is that under the National Broadband
Plan, the over-the-air television broadcasters in certain markets will
be provided with incentives to return some spectrum and have their
channels moved closer together. I imagine the Commission would want to
pack the over the air broadcast channels in as close together as the
interference protection rules allow. If this is the case, would the
relocation of over-the-air broadcaster's channels into a narrow band
lead to a dramatic reduction in the amount of spectrum available for
white space in most communities?
Answer. The Commission is currently developing plans for beginning
to implement the National Broadband Plan's recommendation for recovery
of a portion of the spectrum currently used by over-the-air television
stations. In implementing that plan, there is potential for impact on
the amount of white space, (locally vacant, TV spectrum) that is
available for use by unlicensed white space devices. The extent of such
impact and how it would affect the amount of white space spectrum
available in different communities would depend on how the spectrum
recovery is implemented. The National Broadband Plan also recommends
that the Commission provide additional spectrum for unlicensed devices
on a nationwide basis; such additional spectrum could offset any
potential unlicensed spectrum that might be reduced through changes in
allocation and use the extant broadcast television spectrum.
Question 4. The broadband plan urges the FCC to complete the
necessary actions to implement the use of fixed wireless and portable
personal devices in the broadcast white space. If Congress were to make
the statutory changes to implement the spectrum proposal in the plan,
how might it impact the current rules regarding the use of the
broadcast white spaces?
Answer. The requested statutory changes would facilitate the
transfer of spectrum from the overthe-air television service to
wireless broadband uses. This change could reduce the amount of TV
white space that is available at individual locations and such a
reduction could affect certain aspects of the TV white space rules,
including those governing the spectrum used by fixed versus personal/
portable devices and perhaps other portions of the rules depending on
how the spectrum recovery is implemented. Accordingly, the Commission
may need to review its TV white space rules in light of any changes it
makes in the spectrum that is available for over-the-air television
once those changes are complete.
Question 5. The FCC issued its final order in the broadcast
television white spaces proceeding in November of 2008. A number of
parties have asked the FCC to reconsider its order. Additionally, there
are other open issues at the Commission that impact the use of the
white spaces such as the database proceeding and the 700 MHz proceeding
including questions around wireless microphones operating illegally in
the band. The FCC order has been appealed to the courts and the court
case has been held in abeyance until the FCC completes its
reconsideration proceeding. I am pleased to see that your Broadband
Agenda has indicated that you plan to issue a white spaces Opinion and
Order in the third quarter of this year. Will you decide all open white
spaces issues: the reconsideration, the database order and the 700 MHz
issues no later than the third quarter of this year?
Answer. As you indicate, there are several matters outstanding that
affect TV white spaces, including petitions for reconsideration,
selection of one or more database administrators and a decision on
final rules for wireless microphones. We intend to complete our action
on the petitions for reconsideration and wireless microphones in the
third quarter of this year. We also expect that we would complete our
decision on the database manager(s) in the same time-frame or shortly
thereafter.
Question 6. I've been a strong advocate for technology neutrality--
be it in healthcare IT, smart grid, or cybersecurity. My belief is that
if we establish a neutral playing field it will allow many options to
emerge. Consumers and businesses will benefit from a diversity of
choices. I believe it is important to clearly describe the desired
objectives of the National Broadband Plan and ensure that all segments
of industry can compete in a technology neutral manner to meet the
prescribed goals. It is important that policymakers refrain from
adopting policies that pick winners and losers. The discussion around
education software was largely focused on touting the benefits of a
particular software business model-open source (p. 231).
I have nothing against this particular business model, but it is
critical that the government not prescribe which technology or software
development business model should be adopted---either when it is a
market actor or when it is making policy. Do you believe that
technology neutrality is important and will this principal guide your
communications policy decisions in implementing the National Broadband
Plan?
Answer. I agree that the Commission should always strive where
possible to avoid placing its thumb on the scales to favor one
technology choice over another. The National Broadband Plan is based on
this same philosophy and specifically supports ``regulatory frameworks
that are pro-competitive, transparent and technology-neutral.''
Question 7. The use of advanced metering will contribute to our
Nation's energy efficiency and conservation efforts. There is some
concern, though, that information obtained from advanced metering will
allow utilities and third parties to infer patterns from the data they
collect of what goes on in a household over the course of a day. This
stream of information may become another source of revenue for
utilities and allow them to evolve their business model. There is a
question of consumer privacy. The Telecom Act of 1996 created Section
222 of the Communications Act on how telecom companies need to treat
the privacy of Consumer Proprietary Network Information. Do you believe
there should be an analogous statute created for the smart grid?
Answer. The National Broadband Plan (NBP) recommends that consumers
be able to access and control their own digital energy information.
Privacy and security are critical to the success of the Smart Grid; the
NBP stresses that ``security and privacy should be fundamental to both
network architectures and everyday business processes.''
The NBP recommends that states update their energy data policies,
to include privacy and data accessibility rules for the Smart Grid.
However, the NBP also recommends that ``if states fail to develop
reasonable policies over the next 18 months, Congress should consider
national legislation to cover consumer privacy and the accessibility of
energy data.''
Consumer Proprietary Network Information (CPNI) rules are
principally about privacy and the protection of customer information in
telecom. There are separate rules, such as Truth-In-Billing, that
address the customer's rights to access his or her own data. Other
industries, like health care, have integrated protection and
accessibility rules. HIPAA, as an example, sets forth national rules to
protect personal information, to ensure patients can get timely access
to their own information, and to allow authorized third parties access
to patient data. If Congress is going to consider national smart grid
legislation about energy data, it would be worth considering including
provisions for both the protection and accessibility of the data.
Question 7a. Do you believe utilities should allow consumers to
provide an affirmative consent before it can disclose smart meter
information to third parties?
Answer. Generally yes, but with exceptions. With safeguards,
electric utilities should be able to conduct certain regulated
activities, such as energy efficiency programs, without requiring
individual affirmative consent for data disclosure. Imagine, for
example, a third-party vendor that helps a utility with its energy
efficiency programs. Today, this vendor already has to comply with the
utility's existing data protection rules--i.e., a consumer's monthly
energy usage data can only be used to help the utility offer energy
efficiency products/services back to the customer. Requiring utilities
to now get individual affirmative consent would have the unintended
consequence of lowering the response rate to the utility's energy
efficiency programs.
There are a few other limited scenarios where, with the proper
safeguards (e.g., anonymization of personal information), utilities
should be able to disclose a subset of information gathered from smart
meters without affirmative consent. The NBP offers examples:
``With reasonable privacy protections, the Federal Government
should be granted limited access to utility bills from homes
receiving Federal energy efficiency funds to better evaluate
the government's energy efficiency programs, such as
weatherization. Energy consumption data, when aggregated, can
be very useful to a wide variety of public policy and economics
researchers. States should consider how third parties might get
access to anonymized datasets for research purposes, with
strict privacy protections.''
For most other scenarios, however, utilities should require
affirmative consent before disclosing smart meter information to third
parties.
Question 8. The broadband plan says the amount of data moving
across the Smart Grid networks is modest today but is expected to grow
significantly over time. No one seems to have a good handle at the
moment on the Smart Grid's future bandwidth needs. The plan makes four
recommendations related to addressing the future spectrum needs for the
Smart Grid. How do you see the spectrum needs for the Smart Grid
evolving? Will it be a combination of commercial wireless spectrum for
less secure communications and dedicated spectrum for mission critical
communications?
Answer. There are over 3,000 utilities in the U.S. that serve
customers across very different topologies and regulatory regimes.
There is not a single solution or a ``representative'' network for the
Smart Grid. Many utilities use a mix of commercial and private networks
in the Smart Grid, and will continue to do so.
Although, generally speaking, electric utilities traditionally
prefer to build and maintain private networks for mission critical
communications, some utilities do use commercial networks for mission
critical communications today. Commercial networks can be made secure
and resilient, as demonstrated by their use in the Federal Government
(DOD, DHS, etc.). For some smaller utilities, the lack of internal
networking expertise and personnel might have driven the decision to
use commercial facilities.
Utilities will need greater communications across the grid, and
many are increasingly using wireless technologies, which are often more
cost-effective that wired facilities in reaching wide areas or
distributed assets. These wireless networks including licensed
commercial networks, licensed private networks, and private networks
operating at power levels where FCC licenses are not required.
Dedicating spectrum for the Smart Grid would have benefits and
disadvantages. Potential benefits include: (1) providing another
mechanism for the Federal Government to drive national interoperability
standards and best practices of cyber-security, privacy, and consumer
data access, (2) vendor standardization and competition, which could
lead to lower equipment prices or more functionality, and (3) a
possible acceleration of smart grid deployments. Risks/disadvantages to
dedicating spectrum include: (1) possible sub-optimal use of spectrum,
(2) fewer applications and users on commercial networks to drive down
the cost for all users, (3) the opportunity cost to the U.S. Treasury
of not auctioning off the spectrum to commercial broadband users, and
(4) a near-term effect of ``freezing the market'' while companies re-
evaluate their Smart Grid technology road maps.
Developing a Smart Grid is national policy set forth by EISA 2007,
and the NBP recommends that the Federal Government continue to explore
the issue of providing spectrum, recommending that ``NTIA and the FCC
should specifically explore possibilities for coordination of Smart
Grid use in appropriate Federal bands. Any new broadband network built
in the identified spectrum should be required to meet standards of
interoperability, customer data accessibility, privacy and security.
Use of this spectrum should not be mandated, so that legacy systems are
not stranded and that commercial, other shared networks and unlicensed
wireless networks can be used where appropriate.''
It's important to note that there are a variety of possible models
that could be employed to provide spectrum to the industry, including a
sharing of spectrum with Federal users, sharing with public safety
networks (also recommended in the NBP), dedicating spectrum with
specific build-out requirements, and auctioning spectrum for critical
infrastructure uses (which includes the Smart Grid, but could also
include natural gas and water management, among other). Market-based
auctions pose some challenges for utilities, since approximately 30
percent of the power is delivered to customers through non-profit
entities (co-operatives and municipals), and even among the investor-
owned utilities, some have business model or service territory
incompatibilities to participating in spectrum auctions.
Question 9. In January, NIST released its Framework and Roadmap for
Smart Grid Interoperability. There was a short section that touched on
models for smart grid information networks. It also discussed
technologies for standards for smart grid communications
infrastructure. There was nothing in the broadband plan on
communications standards issues related to the Smart Grid. For example,
one of the debates is whether the entire Smart Grid should be IP-based.
Do you believe the Smart Grid should be IP-based end-to-end?
Answer. The NBP is technology-neutral and does not recommend one
networking protocol over another for the Smart Grid. However, the NBP
does stress the importance of open standards and uses the success of
Internet Protocol (IP) standard as an example. The NBP notes that:
``the NIST standards development process should continue to draw on
lessons from the Internet. Open standards are critically important--
Internet Protocol being a prime example.''
NIST has a Priority Action Plan (PAP) focused on the role of
Internet Protocol (IP) in the Smart Grid. This is the proper forum for
the architectural debates about how fast and how much IP can be
incorporated into the Smart Grid. It is important to remember that the
Smart Grid includes a wide variety of legacy utility communications
systems, some of which are incompatible with IP networks.
Question 9a. Is there a reason where there was no recommendations
relating to Smart Grid communications standards in the broadband plan?
Answer. Establishing and maintaining national Smart Grid standards
is critical to the success of the Smart Grid (and is national policy
under EISA 2007). The NBP did not offer specific recommendations to
improve or change the NIST Smart Grid standards coordination process,
but did stress the importance of the process and of Smart Grid
standards. The NBP states:
``Standards are critical to the Smart Grid. For example, the
faster NIST can accelerate market convergence toward a small
number of appliance communications standards, the sooner
manufacturers can offer smart appliances that communicate with
the rest of the smart home. Standards will help ensure that the
Smart Grid is ``plug-and-play,'' encouraging innovation by
giving companies a large potential market for devices and
applications and providing customers with the ability to use
any of them to take advantage of the grid.''
______
Response to Written Question Submitted by Hon. Frank R. Lautenberg to
Hon. Julius Genachowski
Question. While we work to bring new communications services to
more Americans, New Jerseyans still lack basic TV coverage of local
news and events. WWOR, New Jersey's only high-power commercial TV
station, has not adequately served the people of New Jersey and is
operating under a license that expired almost 3 years ago. When will
the FCC be in a position to act on WWOR's renewal application and
concerns about its local news coverage?
Answer. As you know, a petition to deny the license renewal
application of WWOR has been filed with the Commission. The petition
raises important issues about both the quantity and quality of New
Jersey specific news provided by WWOR. The petitioner recently
submitted additional information which currently is under review in the
Media Bureau. I hope this matter can be concluded expeditiously.
______
Response to Written Questions Submitted by Hon. Mark Pryor to
Hon. Julius Genachowski
Question 1. I support the goals of the FCC's recommendations
regarding set-top boxes but I understand that the FCC's proposal would
unintentionally change the competitive landscape by favoring cable over
satellite due to differences in system architecture. I am worried that
the FCC's television set-top box proposal will have a
disproportionately negative impact on rural residents who rely on
satellite delivered television. Do you plan on examining that situation
further to ensure there are no unintended consequences of harming the
consumer?
Answer. Yes, I agree that the Commission should consider
differences in system architecture to ensure that consumers are not
disadvantaged To prevent any unintended consequences, the ``Allvid''
Notice of Inquiry recently adopted by the Commission includes
particular questions to assure that the Commission's eventual course of
action does not unfairly burden any subscription video provider.
Specifically, the Notice of Inquiry seeks comment on network-specific
functions that the Commission would need to consider as we develop our
proposal. In addition, the Notice invites commenters to propose
alternate methods that would help to achieve retail availability of
smart video devices that can access subscription video services. The
Commission will consider these comments carefully, and I am confident
that this proceeding will conclude with a solution that benefits all
subscription video providers, device manufacturers, and consumers.
Question 2. One of the recommendations in the National Broadband
Plan is that the Federal Government should launch a National Digital
Literacy Program that creates a Digital Literacy Corps, increase the
capacity of digital literacy partners and create an Online Digital
Literacy Portal. The plan cites the statistic that 22 percent of non-
adopters claim a digital literacy-related factor as their main barrier.
The rate of broadband adoption is low in my state. In addition to the
recommendations in the National Broadband Plan, would incentivizing
businesses to offer digital literacy programs in low-income areas be an
effective mechanism to increase the adoption rate of broadband?
Answer. Digital literacy training can promote broadband adoption
and help individuals and businesses gain the skills they need to
compete in the 21st century economy. Private sector businesses play an
important role in digital literacy in several ways. Businesses provide
training to their own employees and support local and community efforts
by creating digital literacy content and training materials, supporting
employee volunteers who provide digital skills training to local
community members or small businesses and providing financial
assistance to non-profit groups who provide digital literacy training.
These efforts can be particular effective when they include trusted
members of the community providing training to non-adopters in
comfortable settings and should be encouraged.
Question 3. The plan recommended that all community colleges should
be connected with high-speed broadband. A recent report from the
Brookings Institution report states that, ``Community Colleges present
enormous opportunities for meeting national and economic goals.'' My
state is home to 23 community colleges and I couldn't agree more that
these institutions should have improved connectivity and access to
greater technological resources as community anchor institutions. The
Federal Communications Commission has indicated that it would require
around $350 million to fund broadband connections for community
colleges. In your view, would a grant program be an effective mechanism
to reach the goal of community college connectivity?
Answer. As you note, the National Broadband Plan recognized the
important role that community colleges play in preparing students for
their place in the 21st century workforce. As the Plan explained,
Congress should evaluate the amount of funding necessary to connect all
public community colleges with high-speed broadband after the awarding
of funding through the Broadband Technology Opportunities Program.
There may be many ways, including grant programs, to successfully
allocate and distribute additional funding that can achieve the goal of
improving availability of high-speed broadband at Community Colleges.
______
Response to Written Questions Submitted by Hon. Claire McCaskill to
Hon. Julius Genachowski
Question 1. The National Broadband Plan proposes to use 2,345-2,360
MHz spectrum for the expansion of broadband wireless communications.
That spectrum is adjacent to a band that aerospace companies use radio
spectrum in the 2.3 GHz band for flight test telemetry. Has the FCC
reviewed how test flights will be affected by this change? Can you
provide any assurance that broadband wireless in the adjacent band to
will not cause interference to flight test telemetry?
Answer. FCC staff issued a public notice on April 2, 2010, inviting
comment on the specific draft rules, including both the technical
standards and interference resolution mechanisms to protect adjacent
band services. The FCC staff has thoroughly analyzed the record, met
numerous times with commercial Aeronautical Mobile Telemetry (AMT)
stakeholders, and with the National Telecommunication and Information
Administration (NTIA) which represents Federal AMT stakeholders. I am
committed to working with our counterparts at NTIA to find a solution
that adequately protects AMT operations.
Question 2. The biggest benefit that I see for broadband is the
economic development and job growth that it can bring. Wiring towns and
building infrastructure is paramount to encourage growth in communities
and is an investment that will pay off in the future. It will also make
up more competitive with the rest of the world.
The Plan talks a lot about public-private partnerships to encourage
economic development and job growth. That sounds great and I like the
concept in theory--private companies have invested $60 billion in
broadband and have created hundreds of thousands of jobs, including
tens of thousands in Missouri. It is clear that we can't have real
growth without private investment buying into the Plan. But how do you
envision this working? What sort of incentive do private companies have
to enter into arrangements like this? Have you gotten interest from
private companies? And are you concerned about overlap with existing
programs and companies?
Answer. Private sector cooperation and investment are important for
America to achieve continued growth and innovation. The importance of
the private sector is one reason why the Plan emphasizes the benefits
of creating public-private partnerships, particularly in the section
dealing with economic opportunity. To date, the private sector has
shown a willingness to collaborate with the Commission and other public
institutions in these initiatives. Specifically, the Small Business
Association (SBA) and its volunteer resource partner, SCORE, recently
announced a partnership with 10 leading technology firms to provide
digital literacy tools to small businesses across the country, as
recommended in the Broadband Plan. The goal of this partnership is to
leverage existing infrastructure and programs SBA and SCORE have in
place, as well as leveraging existing expertise and resources that the
private sector firms have in place. In this way, the Commission can
seek to bring more resources to a broader array of companies and
communities, while not duplicating past efforts or wasting resources.
Moreover, the private sector firms stand to gain exposure for their
products, a reputation for dedicated involvement in local communities,
and a broad array of potential new customers as more businesses take
advantage of broadband and its associated tools and applications.
______
Response to Written Questions Submitted by Hon. Amy Klobuchar to
Hon. Julius Genachowski
Question 1. One of the most discussed aspects of the plan is the
transition of spectrum from broadcast television to wireless broadband.
Many of my constituents, especially those in rural areas, are worried
that they may lose access to over-the-air television signals. If the
broadband plan recommendations go through, what will this mean for
consumers' ability to access broadcast television?
Answer. If the broadband plan's recommendations for the broadcast
TV spectrum are implemented, consumers will continue to access
broadcast television using the same receivers and antennas that they
are currently using. In some cases, depending on how a market is
repacked, viewers might need to obtain new antennas in cases where
local stations would: (1) re-locate to a new transmitter at a site
farther away or (2) move to low VHF channels (channels 2-6) and a
viewer's antenna does not already include a capability for effective
reception of low VHF signals.
Broadcasters will have the option of choosing how to best serve
their viewers, including strengthening their financial basis by
reducing the amount of spectrum they are using while continuing to
provide their own unique programming content over the air by sharing a
channel with another station. Channel sharing by two or more stations
would not require consumers to use additional equipment; the multiple
stations would be received as multicast streams with existing
receivers. Viewers would, of course, need to re-scan their digital
television receivers and converter boxes to be able to view stations on
their new channels after the channel re-packing was completed. We
anticipate that various analyses will need to be performed and
considered through rule making. However, it is reasonable to anticipate
that few, if any, changes in the TV allotments will be needed in most
rural areas.
Question 1a. While it is clear that wireless broadband needs
additional capacity, how can we be sure that broadcast television
remains viable?
Answer. Participation in the channel sharing program would be
voluntary, as would any decision by a station to vacate its channel
pursuant to an incentive auction. In addition, we will make sure that
there are sufficient spectrum resources for broadcast stations to
continue to operate in a viable manner. We also intend to work with the
broadcast television industry throughout the spectrum recovery process
and to address their concerns in the various actions that we will take.
Question 2. Several billion dollars was recently spent on the
converter box program to ensure that no viewers were disenfranchised as
a result of the digital transition. Will they still be able to access
over-the-air television and get a strong signal?
Answer. The digital television converter boxes would continue to
function to provide service from over-the-air signals after the
broadcast TV spectrum is re-packed. The available television stations
may be on different channels in some cases, but this could be handled
through rescanning of the existing converter boxes (or TV receivers)
and consumer education. Signal strengths would only be affected in
cases where a broadcast station relocated its transmitter and/or
combined to share a channel with another station whose service area was
different from its own; such cases could result in an increase or a
decrease in service area, or a change in service area with little to no
net change in coverage area. Any potential impact on consumer reception
of TV signals will need to be considered carefully through rule making
and minimized to the extent possible.
Question 2a. Will they have to purchase new equipment or antennas?
Answer. Consumers will generally not need to purchase any new
equipment to continue to receive television signals off-the-air if
stations are re-packed to new channels. As indicated above, a new
antenna might be needed if a station in a viewer's market were to
relocate to a channel in the low-VHF range (channels 2-6) and the
viewer's antenna did not already include the capability for effective
reception of those channels.
______
Response to Written Questions Submitted by Hon. Tom Udall to
Hon. Julius Genachowski
Question 1. Mr. Genachowski, I am pleased that the National
Broadband Plan includes recommendations for tackling the digital divide
facing our Nation's Tribal lands, where less than 10 percent of
residents have access to broadband.
I know you understand the severity of this problem, and I want to
thank you for your leadership in addressing this challenge. I strongly
support the Broadband Plan's recommendation to establish an Office of
Tribal Government Affairs at the FCC to improve cooperation and
coordination with Tribal leaders on a government to government basis. I
also support efforts to transition the Universal Service Fund for
telephone to a ``Connect America Fund'' for broadband. However, when
transitioning to a Connect America Fund, how will the Commission ensure
that this reform effort addresses the unique connectivity needs of
Indian Country, where the current Universal Service Fund has not yet
achieved universal telephone service?
Answer. The National Broadband Plan contains several
recommendations to address the disparity existing in Indian Country. It
gives us a roadmap for increasing broadband deployment and adoption in
unserved or underserved areas, including isolated Tribal lands. The
availability of broadband service also means the availability of
quality telephone service in these areas.
The Commission has taken the first critical step by beginning the
process of converting the Universal Service Fund over time to support
broadband, which will free up more resources to build modern
communications networks including on tribal lands. On April 21, 2010,
the Commission adopted a notice of inquiry and notice of proposed
rulemaking to examine near and longer-term processes to target funding
toward new deployment of broadband networks in unserved areas while
considering final rules to implement a new Connect America Fund that
will efficiently provide universal service support for broadband and
voice services. The Commission looks forward to receiving substantial
input for this record from tribal governments, so Commission staff can
understand and account for unique circumstances present on tribal
lands.
Also within the second quarter of this year, the Commission intends
to launch the new Office of Native American Affairs and the Native
Nations Broadband Task Force. These initiatives should allow more
efficient government-to-government relations with tribal governments,
and the means to address more effectively the full range of Native
American issues. The National Broadband Plan also recommends creating a
tribal seat on both the Federal-State Joint Board on Universal Service
and on the Universal Service Administrative Company board of directors,
and the creation of a Federal-Tribal Broadband Initiative consisting of
tribal leaders and officials from across all Federal agencies. I
strongly support all of these initiatives, and will work hard to put
them in place to enhance government-to-government interaction with
tribal bodies.
The remote nature of some tribal lands has prevented the residents
of those areas from gaining even basic telecommunications services. The
Commission needs better data on these regions, so it plans to issue a
broadband data rulemaking proceeding toward the end of this year, and
coordinate with Native American governments to enhance data collection
on tribal lands. The Commission also intends to issue a spectrum on
tribal lands rulemaking proceeding during the fourth quarter of this
year to examine increasing mobile opportunities in Native American
communities, and follow with a rural health care reform rulemaking
proceeding with an eye toward bringing access to world-class healthcare
for tribal and remote regions.
Throughout the Commission's activities implementing the National
Broadband Plan, I intend to keep a watchful eye on how our actions
benefit the most remote and unserved regions. I look forward to
expanded and enhanced coordination with tribal governments, and full
participation from tribal representatives and stakeholders in this
major effort, so we can be assured of addressing the disparity in
communications services that has existed on many tribal lands.
Question 1a. What resources or funding would the proposed ``Tribal
Broadband Fund'' need to meet the goal of universal broadband service
on our Nation's Tribal lands?
Answer. Given the paucity of data regarding broadband deployment
and adoption on Tribal lands, we do not yet have a clear sense of the
required funding levels for the Tribal Broadband Fund. Submissions from
NCAI and other Tribal entities recommend establishing the Tribal
Broadband Fund on the level of $310 million. However, the full cost of
deploying broadband service to all Tribal lands has been estimated to
range anywhere between $1.2 billion to $4.6 billion. The Commission
will work with other Federal departments and agencies to improve data-
collection on Tribal lands so that we can develop an accurate
assessment regarding the funding needs of Indian Country.
Question 2. The National Broadband Plan recommends that the Rural
Utility Service (RUS) make a priority of issuing Smart Grid loans to
rural electric cooperatives. These rural cooperatives operate 42
percent of our Nation's distribution infrastructure. The RUS has its
roots in President Franklin Roosevelt's rural electrification program
of the 1940s. Given that the agency today already supports electric and
broadband service in rural America, having RUS support Smart Grid
deployment makes sense to me. Could you expand on the National
Broadband Plan's brief recommendation number 12.10 regarding RUS loans
for Smart Grid?
Answer. As a major lender to rural electric cooperatives, the Rural
Utility Service (RUS) has an opportunity to bring the benefits of the
Smart Grid to rural America. By some statistics, rural electric
cooperatives are ahead in selected Smart Grid applications. Smart
Meters are an example; it became cost effective to automate meter
reading sooner in rural communities, where long distances made it more
difficult or costly to read meters. Advanced metering penetration
within rural electric cooperatives has grown quickly, having increased
from 3.8 percent in 2006 to 16.4 percent in 2008. In other areas,
however, rural electric cooperatives reportedly lag in their adoption
of Smart Grid applications compared to larger investor-owned utilities.
In this respect, RUS has an opportunity to help rural America catch up.
In FY 2009, RUS disbursed 209 electric loans and loan guarantees
totaling $6.6 billion; the total RUS electric loan portfolio was over
$40 billion. Although the RUS has not provided the NBP exact numbers,
the majority of these loans were for traditional grid improvements, not
Smart Grid. RUS has the opportunity to fund more deployments of Smart
Grid, and to encourage adoption of best practices in cyber-security,
privacy, and data accessibility.
In a few cases, electric cooperatives are building broadband
networks to offer retail broadband services in addition to serving as a
smart grid network. The NBP encourages RUS to continue to fund these
innovative projects.
Question 3. The National Broadband Plan makes clear the importance
of competition in broadband markets. The Plan highlights how wireless
broadband providers may emerge as important competitors to wireline and
cable broadband providers. However, some of the largest providers of
DSL and fiber to the home broadband also have a major presence in the
mobile broadband market. How will the FCC help ensure that consumers
benefit from robust competition in broadband markets that lowers prices
and encourages investment in new technologies?
Answer. The National Broadband Plan recognizes that the Commission
will have to pay particular attention to its competition policies. For
instance, the Plan recommended and the Commission recently embarked on
policy changes regarding mobile roaming, to allow smaller competitors
the ability to compete by roaming on larger carriers' networks in some
instances. Similarly, the Commission plans to review its wholesale
competition policies to ensure that investment incentives are balanced
against the need to ensure competition for broadband services.
Question 3a. How will rural Americans benefit from lower broadband
prices and better service if where they live is served by just one
provider?
Answer. While some areas may not see as much competition as others,
many of the proposals we have advanced would lower the costs for new
entrants to deploy networks further into rural America. Additionally,
the Commission has proposed changes to the way in which the universal
service program will disburse support for broadband networks in rural
and high-cost areas of the country. Such changes would include speed
and service quality standards.
Question 3b. How will the FCC increase transparency in broadband
markets for consumers with respect to data on availability and price of
broadband service, as briefly discussed in the Plan's recommendation
4.2?
Answer. The Plan sets forth recommendations to increase
transparency in the retail broadband market. Doing so should encourage
broadband service providers to deliver better value to consumers
through better services.
In particular, the Plan includes four recommendations to increase
transparency:
The Commission should, in coordination with the National
Institute of Standards and Technology (NIST), establish
technical broadband measurement standards and methodology and a
process for updating them. The FCC should also encourage the
formation of a partnership of industry and consumer groups to
provide input on these standards and this methodology.
The Commission should continue its efforts to measure and
publish data on actual performance of fixed broadband services,
and should publish a formal report and make the data available
online.
The Commission should issue a Notice of Proposed Rulemaking
to determine appropriate disclosure obligations for broadband
service providers, including disclosure obligations related to
service performance. These obligations should include simple
and clear data that a ``reasonable consumer'' can understand,
while providing more detailed disclosure for more interested
parties such as tech-savvy consumers, software developers and
entrepreneurs designing products for the network.
The Commission should develop broadband performance
standards for mobile services, multiunit buildings and small
business users.
The Commission has already begun implementing these recommendations
and has launched ``The Consumer Broadband Test'' (currently in beta) to
enable consumers receives real-time information about the quality of
their broadband connections. Additional information on the Consumer
Broadband Test, including the ability for consumers to test their
broadband speed, is available at http://www.broad
band.gov/qualitytest/about/.
Moreover, the Commission's Broadband Action Agenda indicates that
the Commission will consider a Notice of Proposed Rulemaking to
implement the Plan's transparency and disclosure recommendations in the
third or fourth quarter of 2010.
Question 4. Rural wireless providers in my state tell me that
customers cannot always use their smart phone's mobile broadband
features when roaming outside their home provider's coverage area. This
is due to the difficulty of companies always coming to an agreement on
reciprocal data roaming arrangements. How will the FCC address data
roaming issues--discussed in the Plan's recommendation number 4.11--so
that these rural wireless companies can fully serve their customers,
who often live in remote areas?
Answer. In April, the FCC sought additional comment on whether to
extend automatic roaming obligations to mobile data services. Comments
are due June 14, 2010, and reply comments are due July 12, 2010. I look
forward to reviewing the record and working with my fellow
Commissioners to determine, in an expeditious manner, the path forward
that best serves American consumers with a focus on the importance of
data roaming for rural Americans.
Question 5. The National Broadband Plan highlights how set top
boxes can become more effective gateways to the Internet, especially
for those who may have cable or satellite television but no computer at
home.
However, I have heard some concerns from satellite television
providers that the set top box technology they use is not as suitable
as similar cable devices for becoming a new, standardized gateway to
the Internet. This is potentially more important for rural Americans
who live in areas served only by satellite TV. How will the FCC address
this concern when moving forward with efforts to ``open up'' TV set top
boxes as a way to promote Internet access for more Americans?
Answer. I understand your concerns and the Notice of Inquiry
recently adopted by the Commission regarding devices used by consumers
to select and enjoy video programming is designed to ensure that our
actions serve all Americans who subscribe to television services. The
Commission's goal is to enable a cable subscriber in Albuquerque to
move to Pie Town (or any other area of New Mexico) and subscribe to
satellite service using the same smart video device. Specific questions
are included in the Notice of Inquiry to assure that the Commission's
course of action does not unfairly burden any subscription video
provider based on its delivery method and system architecture. In
particular, the Notice of Inquiry seeks comment on network-specific
functions that the Commission would need to consider as we develop our
proposal. The Notice also invites commenters to propose alternate
methods that would help us achieve retail availability of smart video
devices that can access subscription video services. The Commission
will consider these comments carefully, and I am confident that this
proceeding will conclude with a solution that benefits all subscription
video providers, device manufacturers, and consumers.
Question 6. Chairman Genachowski, everyone seems to agree that
spectrum is a scarce and valuable resource that we must use wisely to
allow consumers to benefit from current and new technologies, meet the
needs of public safety agencies, and preserve our national defense
capabilities. In the FCC's efforts to promote more efficient use of
limited spectrum resources, how will the agency protect the quality and
utility of those spectrum bands that may become more crowded in the
future?
Answer. The manner in which spectrum is allocated, licensed (or
unlicensed) and made available for use, and how interference is
defined, disputes are adjudicated, and band-sharing is administered,
will have a profound impact on how the wireless marketplace develops.
The Commission is careful to evaluate technical considerations,
including reducing the potential for interference, prior to allocating
or licensing spectrum. Commission staff works closely with Federal
partners, commercial licensees and industry to identify and address
concerns--and corresponding solutions--in advance. We support measures
that promote the efficient use of spectrum and seek to take advantage
of technical advancements, such as dynamic spectrum access. We will
continue to work closely with Federal partners, licensees, and
unlicensed users and consumers to determine what will work best.
Question 6a. For example, how will the FCC ensure that new mobile
technologies do not interfere with satellite radio service, which
relies on sensitive antennae for picking up distant signals?
Answer. As you may be aware, Sirius-XM asserts that mobile devices
transmitting continuous video from a vehicle in the wireless
communication service (WCS) spectrum will cause harmful interference to
satellite radio reception in nearby vehicles. Conversely, the WCS
industry is concerned that unnecessarily conservative technical
constraints will impede its ability to effectively provide mobile
video, data, and voice service to the public.
The FCC is sensitive to the importance of maintaining the quality
and service levels of satellite radio. Accordingly, the stringent rules
the FCC engineering staff is recommending are designed to prevent
harmful interference to the satellite radio service and quickly remedy
interference if it should occur. Recently, a public field test was
performed by the trade association representing the majority of WCS
licensees (WCS Coalition). In that test, a device representative of
that which would be sold to consumers was used to transmit data at
rates that would support file transfers or video uploads from the user
device. Other vehicles equipped with Sirius-XM radios drove or parked
next to the WCS-equipped vehicle. Sirius-XM participated in this
demonstration and it was open to the public and was witnessed by about
a dozen FCC engineering staff. Interference received by SDARS receivers
under this demonstration was insufficient to cause the loss of
satellite radio signal for more than an inconsequential interval.
To ensure the most complete and specific participation and analysis
possible, Commission staff put on public notice for comment by the
parties and the public detailed proposed rules that were informed by
the observations at the demonstration. The proposed rules include
technical and operational restrictions for WCS and a requirement that
WCS licensees cooperate in good faith in the selection and use of new
stationsites and new frequencies to reduce interference and make the
most effective use of the authorized facilities. Under the proposed
rules, licensees of stations suffering or causing harmful interference
must cooperate in good faith and resolve such problems by mutually
satisfactory arrangements. We will be further guided by the specific
information and arguments submitted in response to those proposed rules
to ensure the continued reception of satellite radio service by the
public.
______
Response to Written Questions Submitted by Hon. Mark Warner to
Hon. Julius Genachowski
Question 1. There has been a great deal of discussion about the
possible reclassification of broadband services under Title II of the
Communications Act. I recognize the FCC is considering multiple options
in response to the ruling and I think it is important for consumers to
be able to continue enjoying all the Internet has to offer. Do you
think it is possible to institute a technology-neutral regulatory
framework that includes nondiscrimination protections and provides for
reasonable network management?
Answer. Yes, but the Commission must carefully consider the legal
framework on which it implements those protections. The decision of the
United States Court of Appeals for the District of Columbia Circuit in
Comcast Corp. v. FCC, 600 F.3d 642 (D.C. Cir. 2010), casts serious
doubt on whether the legal framework the Commission chose for broadband
Internet services nearly a decade ago is adequate to achieve core
broadband policies, which prior Commissions thought they had legal
authority to implement. To confront this challenge, I have shared with
my fellow Commissioners a draft Notice of Inquiry for their
consideration at the Commission's June 17 Open Meeting. This Notice
would initiate an agency proceeding to seek public comment on how the
Commission should best address the challenge that Comcast has handed
us. It would seek comment on all options, and invite any ideas for how
the Commission should proceed, including: maintaining the current
``information service'' classification of services such as cable modem
and DSL Internet access; classifying broadband Internet connectivity
service as a ``telecommunications service'' to which all the
requirements of Title II of the Communications Act would apply; and a
``third way''--similar to the highly successful approach that has been
used for cell phone services since 1993--under which the Commission
would identify the Internet connectivity service that is offered as
part of wired broadband Internet service as a telecommunications
service and forbear from applying all provisions of Title II other than
the small number that are needed to implement fundamental universal
service, competition, and consumer protection policies. As you know,
Chairmen Rockefeller, Waxman, Kerry, and Boucher have announced they
will start a process to develop proposals to update the Communications
Act. I welcome that process, and the Commission stands ready to serve
as a resource to Congress as it considers legislative changes in this
area
Specifically on open Internet issues, we will continue to work with
stakeholders to find the best approach to preserving the open Internet,
and Commission staff is currently reviewing the tens of thousands of
comments in the Open Internet proceeding. We look forward to reviewing
the responses generated by the Notice of Inquiry on our legal framework
for broadband as well.
Question 2. Is it possible to accomplish this under the provisions
of the 1996 Act or have we come to a point where Congress should start
considering updating telecommunications law to create a better system
that incents business development, provides for reasonable network
management--where like forms of traffic are treated similarly--and also
maintains open access to the Internet for consumers?
Answer. As you know, Chairmen Rockefeller, Waxman, Kerry, and
Boucher have announced they will start a process to develop proposals
to update the Communications Act. I welcome that process, and any new
ideas that others may propose to address this issue, and the Commission
stands ready to serve as a resource to Congress as it considers
legislative changes in this area.
Question 3. Although I have always believed all Americans should
have access to broadband, I'm also concerned about broadband
affordability. Commerce Department data shows that while the broadband
adoption rate is just 64 percent, availability is much higher--95
percent of U.S. households have access to broadband. Do you think the
plan does enough to provide affordable service to Americans? Is it
enough to just expand the existing Lifeline program and to build out
more services?
Answer. The National Broadband Plan recommends significant changes
be made to the Lifeline and Link Up universal service low-income
programs that would greatly enhance broadband affordability. Currently,
Lifeline discounts offset eligible low-income consumers' recurring
monthly telephone charges, while Link Up discounts reduce eligible low-
income consumers' one-time telephone connection/installation charges.
If both Lifeline and Link Up discounts are expanded to apply to service
packages that include broadband, as the National Broadband Plan
recommends, eligible low-income consumers would be eligible for
discounts for both recurring monthly charges and installation charges
for broadband service. Specifically, the National Broadband Plan
recommends that: (1) the Commission and states should require eligible
telecommunications carriers to permit Lifeline customers to apply
Lifeline discounts to any service or package that includes basic voice
telephone service; (2) the Commission should integrate the expanded
Lifeline and Link Up programs with other state and local e-government
efforts; and (3) the Commission should facilitate pilot programs that
will produce actionable information to implement the most efficient and
effective long-term broadband support mechanism.
Question 3a. Completing the infrastructure build out is very
important to me, but should we be thinking more innovatively in terms
of long-term service affordability?
Answer. The National Broadband Plan recommends expanding Lifeline
discounts--which currently offset eligible low-income consumers'
recurring, monthly telephone charges--to include discounts for service
packages that include broadband. This expansion of Lifeline discounts
to broadband offerings, if adopted by the Commission, would help ensure
that broadband service is affordable on an ongoing basis to eligible
low-income consumers. Additionally, the National Broadband Plan
recommends that the Commission integrate the expanded Lifeline program
with other state and local e-government efforts which may provide low-
income consumers with additional ongoing broadband discounts.
Question 4. As a former Governor who helped bring more broadband to
Virginia, the issue of improving rural coverage is a priority for me.
Coverage has improved in rural Virginia over the last 10 years but the
broadband plan does not appear to address the dead spot issue, which is
a huge investment barrier for wireless carriers. What should we be
doing in rural areas with spotty coverage, particularly given the
problem in using and sharing data service? These spotty areas normally
have lower tier data speeds, not up to par with those available in
urban areas.
Answer. I think that there area number of steps that we can take to
address these issues in rural areas. Rural areas often present special
and unique challenges due to environmental or other factors, such as
access issues, or topography. Often the biggest challenge in deploying
networks in rural areas is cost, due to greater distance between
facilities and very low population density over which to spread the
cost of buildout.
The Commission has already put in place two initiatives that should
provide more information regarding the scope of ``spotty service'' and
``dead spots'' or ``dead zones'' with respect to broadband services.
The Consumer Broadband Test (Beta) and the Broadband Dead Zone
Reporting Form are now available via the Commission's broadband
website. The purpose of the Consumer Broadband Test (Beta) is to give
consumers and the Commission additional information about the quality
of their broadband connections and to create awareness about the
importance of broadband quality in accessing content and services over
the Internet. The Commission will be able to use the data collected
from the Consumer Broadband Test (Beta), along with submitted street
addresses, to analyze broadband quality and availability on a
geographic basis across the United States.
Additionally, consumers have the ability to report dead zones
through the Broadband Dead Zone Reporting Form, which provides
interested parties with the opportunity to voluntarily participate in
the FCC's effort to pinpoint areas in the United States where Americans
are unserved or underserved by broadband access.
The National Broadband Plan also recommends spectrum access models
that could be beneficial to rural deployment, including a new
contiguous band for unlicensed services. Just as rural WISPs have been
able to successfully deploy affordable Wi-Fi networks in their
communities, more unlicensed spectrum may allow for greater bandwidth
and coverage using similar models. Also, the Plan recommends the
creation of a Mobility Fund to provide one-time support for deployment
of 3G networks, to bring all states to a minimum level of 3G (or
better) mobile service availability.
In addition, the Plan recommends a number of steps to make sure
sufficient microwave spectrum is available to help meet current and
future needs for backhaul. One of the factors affecting the cost of
rural buildout is the cost of backhaul to carry traffic between
facilities. Rural carriers in particular are making increasing use of
microwave links for backhaul. The Plan recommends revising the
Commission's rules to allow for spectrum sharing among various point-
to-point services where technologically feasible in order to increase
the amount of spectrum available for backhaul by facilitating the
efficient use of spectrum by multiple, compatible users. Further, the
plan recommends revision of the technical rules for microwave services
to allow increased flexibility, for example by modifying minimum
throughput rules to allow for modulation techniques that would increase
range. While I am heartened by an increasing number of technological
solutions to increase the deployment of broadband and the quality of
that deployment in rural areas, it is critically important that we
pursue all possible avenues to facilitate quality broadband service in
rural areas.
Question 4a. The plan gives the government 10 more years in which
to devise a plan to build a public safety network. Can we be more
aggressive in deploying this much-needed network?
Answer. The Commission has begun implementing the Plan's
comprehensive strategy for building out a nationwide interoperable
public safety wireless broadband network. We recently established the
Emergency Response Interoperability Center (ERIC) and the Commission
currently has under consideration a waiver order that would enable
early deployments in the public safety broadband spectrum. In upcoming
months, the Commission will undertake a series of rulemakings that will
address roaming and priority access, auction of the D Block, and other
elements of the Plan's comprehensive strategy. The Commission is
committed to following the aggressive schedule we have set to ensure
that our Nation's first responders soon have the nationwide network
they deserve.
Question 4b. Are you optimistic that we will have a nationwide
interoperability standard in place before we try to build out a
nationwide system? It seems like this is a prerequisite if we want to
make sure first responders are able to communicate with one another,
but it's also disappointing that 9 years after 9/11 we still have not
worked out a standard or built the network.
Answer. The Commission has already taken important steps to promote
interoperability on the public safety broadband network. Under my
proposed Order addressing the public safety broadband waivers, the
Commission will require states and localities engaged in early
deployments to use a common air interface and to adhere to an initial
set of interoperability requirements developed by the recently
established ERIC. These requirements will be further refined as ERIC
develops a more detailed interoperability framework, which will ensure
seamless communication on the nationwide network from the start of its
development.
Question 5. Another issue that has been raised by public safety
groups relates to priority access to the network in times of crisis.
Some in the public safety community seem to be very concerned that
under the FCC's plan, priority access may not be provided when it is
needed most. How would you respond to these concerns?
Answer. Under the Plan, public safety agencies will have full use
of the 10 MHz of dedicated 700 MHz spectrum that has already been
allocated for public safety broadband services. This spectrum will form
the foundation of the nationwide public safety broadband network, and
will always be available to public safety for its highest-priority
communications. In addition, the Commission will soon commence a
rulemaking to ensure that public safety users can obtain quick and
reliable roaming and priority access to commercial broadband networks
in major emergencies where additional capacity may be required.
Commercial 4G technologies can support a variety of newer forms of
priority access that can fully meet public safety needs in such
emergencies, far beyond anything possible on traditional circuit-
switched networks that offer Wireless Priority Service. These 4G
technologies also can enable public safety users to prioritize their
own traffic more effectively, to ensure that the most vital
communications are given the highest priority.
Question 6. The FCC also included some significant language in the
broadband plan regarding the need to fulfill one element of the 1996
Act by providing greater competition in the set-top box market. Why do
you think it is important to the deployment and use of broadband?
Answer. Innovation in the communications device and application
market has driven Internet connectivity and use since the days of dial-
up access. Since the early 1990s, computer hardware and software have
become more sophisticated and capable of handling higher data rates and
web browsers have provided more intuitive user interfaces, both of
which have led consumers to subscribe to Internet services and use
increasing amounts of data. More recently, innovative mobile devices
have increased the adoption and use of wireless broadband. Increased
competition in the set-top box market will lead to innovative internet-
connected devices that consumers can connect to their televisions, thus
encouraging further adoption and use of broadband. Indeed, consumer
demand for online video already is beginning to increase, and consumers
are showing interest in devices that can access that video over a
broadband connection. For example, Netflix recently reported that 55
percent of its 14 million subscribers streamed more than 15 minutes of
a movie or television show in the first quarter of 2010, up from 36
percent last year--each of those subscribers accesses that video over a
broadband connection. While these numbers are encouraging, they pale in
comparison to the more than 95 million households that subscribe to
multichannel video services. Unfortunately, a combination of technical
and economic factors has discouraged competition in the subscription
video device market, which makes it difficult for companies to
introduce competitive innovative video devices that appeal to those 95
million households. If the Commission can encourage retail competition
for devices that can access subscription multichannel video services,
device manufacturers will begin to offer retail products that integrate
traditional and online video content. Consumers who purchase those
devices specifically for the subscription video also will want to
access the full array of services that their devices can provide, which
will encourage broadband adoption and use.
Question 7. Intellectual property protections do not appear to be
clearly discussed in the broadband plan. Does the FCC intend to look at
these issues and how might these issues intersect with privacy concerns
and ISP content management or network management issues?
Answer. Under the Communications Act, the FCC has a limited role
with respect to intellectual property policy, but we recognize that our
actions can affect the transmission of intellectual property over
communications networks. Our rules must respect the careful balance
Congress has created between creating strong incentives for creators to
create and disseminate their works online, and promoting the lawful use
of copyrighted works and protecting consumers' privacy rights. For
example, Open Internet principles only apply to lawful content,
applications, and services--not to activities like unlawful
distribution of copyrighted works, which has serious economic
consequences. The enforcement of copyright and other laws and the
obligations of network openness subject to reasonable network
management can and must co-exist.
Question 8. The plan lays out an aggressive timeline for the
spectrum components. How do you intend to adhere to the timelines you
laid out and when do you expect to complete the final rules for TV
white space devices?
Answer. We are currently taking the steps necessary to prepare a
decision on the white space petitions for reconsiderations this summer.
That action, which will complete our rules for TV white space devices,
is part of our Broadband Action Agenda plan.
Question 8a. Are you open to making changes to those rules which
would provide more flexibility for rural broadband applications, such
as higher power limits?
Answer. We are looking at all possibilities for providing more
flexibility for rural broadband applications, including the option of
allowing increased power limits that may facilitate service in rural
areas.
Question 8b. Can this happen within the existing timeline?
Answer. We recognize that the timelines laid out in the NBP are
aggressive, and we will need the support of the full Commission, as
well as Congress and other Federal, state and local agencies, and
industry, in order to meet those deadlines.
Question 9. Regulatory certainty and regulatory flexibility are
paradoxical concepts for entrepreneurs, but they are both critically
important to the development of new technologies. What kind of
assurance can you provide to entrepreneurs and investors who are
looking to the FCC to carry out a pro-innovation agenda? For example,
will there be increased opportunities for new dynamic spectrum access
technologies and ``smart'' radios or other new technologies?
Answer. It is clearly apparent to all of us that the increasing
demands for a finite amount of spectrum will necessitate ever more
efficient ways to utilize spectrum, which will have to include new
techniques, some already developing, some in development, and some yet
to be thought of. Obvious among these is spectrum sharing by compatible
devices or services, and fundamental to many such arrangements would be
the utilization of ``smart'' radios, ``smart'' antennas and other
``opportunistic'' devices and technologies that can provide for
instantaneous spectrum access where and when it is determined to be
unused and available at any moment in time at a particular location and
over a given transmission path. Nearly 10 years ago, the Commission
recognized this direction in modifying its equipment rules to
accommodate the earliest versions of software radios. More recently,
developments of these technologies was fundamental to our adoption of
new rules to open the Television White Spaces to new devices. We remain
committed to continuing in this direction as these technologies evolve
and made this is an important element of the National Broadband Plan.
We have already publicly committed to initiating a proceeding later
this year to look further into ways of increasing opportunities for
opportunistic use of spectrum. Initial ideas in this area include
identifying frequency bands that could be used for innovation in
cognitive technologies such as spectrum sensing and ``smart'' radios
and examining ways to expand the use of geo-location databases to
identify available spectrum indifferent frequency bands. In conducting
this future proceeding, we are committed to working with the industry,
including entrepreneurs, to strike the right balance between providing
a level of certainty and allowing for innovation and flexibility to
allow nascent technologies to flourish, while at the same time
recognizing and protecting the services provided to consumers by
incumbent operators and devices.
Question 10. In my experience, spectrum allocation debates can take
a very long time to resolve. If broadcasters choose not to voluntarily
relinquish spectrum, have you looked into alternative regulatory
options such as spectrum sharing?
Which kinds of alternatives are you considering and how will the
Commission balance the interests and expectations of current spectrum
users with the demands of consumers and the emergence of new
technologies?
How are you planning to facilitate or rely on negotiated solutions
among the interested parties?
Answer. For the Plan to work, we don't need all, or even most
licensees to voluntarily reducing use of UHF spectrum by going off the
air, channel sharing or moving to the VHF band. If a limited number of
broadcasters in a limited number of markets relinquish UHF spectrum,
our staff believes we can free up a very significant amount of
bandwidth. I believe, and the staff at the FCC believes, that a
voluntary approach will work. We do not believe that it will come to
the point where we have to examine other mechanisms.
To the second part of the question, one attractive feature of the
voluntary approach is that it gives broadcasters additional financing
options, which could help fund production of local news and other
community-based programming, and/or investment in advanced broadcast
technologies that would allow broadcasters to take advantage of
emerging mobile and compression technologies.
To the third part of the question, transparent bidding open to all
potentially interested parties is likely to find a better solution than
deal-making that is limited to self-selected parties, which often are
forced to act with less information than they would have in an auction.
Direct negotiations among parties may have a role with respect to
technical issues such as interference or coordination.
Question 11. Do you believe that the Commission should expand on
Recommendation 5.5 in the plan? Does the FCC support the spectrum
relocation process improvements outlined in legislation before
Congress, namely H.R. 3019?
Answer. Recommendation 5.5 of the National Broadband Plan
(``Plan'') outlines some revisions for Congress to consider in the
Commercial Spectrum Enhancement Act (CSEA) to facilitate relocation of
incumbents from Federal spectrum that could be licensed for broadband
deployment. These recommendations focus on expanding the definition of
reimbursable costs to provide Federal agencies adequate incentives to
vacate Federal spectrum.
I agree that the Federal spectrum relocation process can be
improved, leading to more efficient use of available spectrum resources
while enhancing wireless broadband availability. The CSEA funding
mechanism was essential to the relocation of Federal incumbents from
spectrum the Commission auctioned and licensed for Advanced Wireless
Services (``AWS-1'').
Any effort to build upon the success of the CSEA and implement
possible improvements in the Federal spectrum relocation process,
should consider the elements of a successful relocation framework. The
objective of a successful framework should be not only to facilitate
incumbent relocation from Federal spectrum and minimize for prospective
bidders the uncertainty associated with the Federal relocation process,
but also to treat incumbent spectrum users fairly and ensure that vital
governmental functions are not adversely affected.
______
Response to Written Questions Submitted by Hon. Mark Begich to
Hon. Julius Genachowski
Question 1. In your view, what changes to the Communications Act
are needed for the FCC to effectively achieve the goals articulated in
the plan?
Answer. The majority of the plan's recommendations to the
Commission are plainly within the Commission's commonly understood
authority. Our authority to implement some, however, is called into
question by the recent decision of the United States Court of Appeals
for the District of Columbia Circuit in Comcast Corp. v. FCC, 600 F.3d
642 (D.C. Cir. 2010). The Comcast decision casts serious doubt on
whether the legal framework the Commission chose for broadband Internet
services nearly a decade ago is adequate to achieve core broadband
policies, which prior Commissions thought they had legal authority to
implement. To confront this challenge, I have shared with my fellow
Commissioners a draft Notice of Inquiry for their consideration at the
Commission's June 17 Open Meeting. This Notice would initiate an agency
proceeding to seek public comment on how the Commission should best
address the challenge that Comcast has handed us. It would seek comment
on all options, and invite any ideas for how the Commission should
proceed, including: maintaining the current ``information service''
classification of services such as cable modem and DSL Internet access;
classifying broadband Internet connectivity service as a
``telecommunications service'' to which all the requirements of Title
II of the Communications Act would apply; and a ``third way''--similar
to the highly successful approach that has been used for cell phone
services since 1993--under which the Commission would identify the
Internet connectivity service that is offered as part of wired
broadband Internet service as a telecommunications service and forbear
from applying all provisions of Title II other than the small number
that are needed to implement fundamental universal service,
competition, and consumer protection policies. As you know, Chairmen
Rockefeller, Waxman, Kerry, and Boucher have announced they will start
a process to develop proposals to update the Communications Act. I
welcome that process, and any new ideas that others may propose to
address this issue, and the Commission stands ready to serve as a
resource to Congress as it considers legislative changes in this area.
Question 2. Thank you very much for your strong support for
deployment of broadband on tribal lands and the amount of unserved
areas in the U.S. that are tribal lands. While we all support more
broadband in these areas, many still lack basic phone service. How do
you propose to balance the needs of expanding all telecommunications
services to Alaska and other states that lack basic phone service?
Answer. The National Broadband Plan contains several
recommendations to address disparities throughout the nation, including
on tribal lands and Alaska Native regions. It gives us a roadmap for
increasing the Nation's standing in broadband deployment and adoption,
and for unserved or underserved areas, access to broadband also means
quality telephone service for the first time in too many areas.
The Commission took the first critical step by beginning the
process of converting the Universal Service Fund over time to fund
modern communications networks that support broadband as well as voice
service. On April 21, 2010, the Commission adopted a notice of inquiry
and notice of proposed rulemaking to examine near- and longer-term
processes to target funding toward new deployment of broadband networks
in unserved areas while considering final rules to implement a new
Connect America Fund mechanism that will efficiently support broadband
and voice services. The Commission looks forward to receiving
substantial input for this record from tribal governments, so
Commission staff can understand and account for unique circumstances
present on tribal lands, including Alaska Native regions.
The remote nature of some parts of Alaska has prevented the
residents of those areas from gaining even basic telecommunications
services. The Commission needs better data on these regions, so it
plans to issue a broadband data rulemaking proceeding toward the end of
this year, and coordinate with Native American governments to enhance
data collection on tribal lands, including Alaska Native regions. The
Commission also intends to issue a spectrum on tribal lands rulemaking
proceeding during the fourth quarter of this year to examine increasing
mobile opportunities in Native American communities, and follow with a
rural health care reform rulemaking proceeding with an eye toward
bringing access to world-class healthcare for tribal and remote
regions.
Question 3. I commend your sensitivity to the difficulties of
serving residents of Tribal Lands, including Alaska, following the
FCC's long precedent of policies designed to address the unique and
complex deployment challenges of serving these areas. Will you continue
to work with me to ensure that FCC broadband policies recognizing the
unique challenges of Tribal Lands are responsive to my constituents'
needs?
Specifically I would like to you to carefully consider keeping the
exemption from interim cap for tribal lands that was put in place for
the high cost fund as the FCC moves toward a new model of support. I am
very concerned about the impact the changes will have on the investment
in Alaska infrastructure and the companies who work hard to deploy
service to some of the most unserved areas of the Nation.
Answer. As we move forward with universal service reform, including
possible changes to the interim cap on competitive eligible
telecommunications carrier support, the Commission intends to consider
unique circumstances present on tribal lands, including Alaska Native
regions. Indeed, on April 21, 2010, the Commission adopted a notice of
inquiry and notice of proposed rulemaking, the Commission specifically
sought comment on whether there are any unique circumstances on tribal
lands, including Alaska Native regions, that would necessitate a
different approach.
Question 4. Under Recommendation 9.7, the Plan calls on the FCC to
create an FCC Office of Tribal Affairs and a Tribal seat on the USAC
Board. Are you able to give us a timeline of implementation of these
specific actions?
Answer. Launch of the FCC's Office of Native American Affairs is
targeted for June 2010. Adding Tribal representation to the USAC Board
requires amendment of the Commission's rules.
Question 5. Many rural Incumbent Local Exchange Companies (ILECs)
are concerned with the reform suggestions outlined in the National
Broadband Plan. Can you direct me to where the plan discusses the level
of high-speed broadband now available to customers served by rural
Incumbent Local Exchange Companies (ILECs) vs. those served by Bell
Operating Companies (BOCs) and other non-rural telecoms?
Follow-up: Can you ask the broadband staff to prepare this
comparison? I anticipate that there is far greater deployment available
in areas served by rural telephone companies because of the universal
service system and regulatory framework applicable to the rural
incumbents. I would like to make certain the Commission has those facts
before them as we go forward.
Answer. The Plan, as well as a recent technical paper ``The
Broadband Availability Gap,'' provide data on the fraction of unserved
housing units that are in areas served by a Bell Operating Company, a
mid-size price cap carrier, and a rate of return carrier. The Plan
estimated that:
52 percent of unserved housing units are in census blocks in
which one of the three Regional Bell Operating Companies (AT&T,
Verizon or Qwest) is the incumbent local exchange carrier;
15 percent of the unserved housing units are in census
blocks where a mid-sized price-cap carrier is the incumbent
provider; and
One-third (33 percent) of unserved housing units are in
census blocks where a rate-of-return carrier is the incumbent
provider.
To measure broadband deployment progress, the Commission needs
accurate, up-to-date data. Moreover, the Commission's Broadband Action
Agenda includes opening a proceeding later this year to improve the
data it collects on broadband deployment. At present, the data on
availability provide very limited insight as to whether any one
particular regulatory regime, which provides support for voice
services, has had an impact on broadband deployment.
Question 5a. Do you believe that it is generally understood that
investment in broadband compliant infrastructure in rural areas is
driven by the contrasting regulatory regimes in place for rural ILECs
and non-rural ILECS?
Follow-up: I think we all should have quantifiable information as
we go forward with implementing this plan. With all the time and effort
that your broadband staff has already undertaken, I hope it won't be
difficult to provide us with a summary that demonstrates how extensive
broadband high speed deployment has been in areas served by rural
incumbent carriers subject to common carriage rate of return regulation
compared to the broadband deployment in rural areas served by price cap
companies providing high speed Internet as a non common carrier
service.
Answer. As noted in the preceding answer, there are unserved
communities in areas served by both price cap and rate of return
carriers. Absent comprehensive reform, many communities in America will
never have access to broadband because there is no private sector
business case to serve these areas. Leaving some communities behind is
not consistent with the country's long-standing goal of universal
service. This digital divide exists today and will only get worse if
the universal service system is not fundamentally reformed. Thus,
comprehensive reform to the universal service system is necessary to
ensure that all communities have access to broadband. The Commission
looks forward to gathering more information through our rulemaking
process to assist us in crafting the appropriate policies in this area.
Question 5b. If rate of return regulation for rural companies has
resulted in rural areas obtaining significant high speed broadband
availability but price cap regulation for BOCs has resulted in little
deployment in the rural areas they serve, why does the report propose
to end rate of return regulation when it is rate of return regulation
that has had success in meeting the goals of high speed broadband
deployment?
Answer. The National Broadband Plan sets forth a vision to provide
broadband access to all Americans, regardless of where they live and
regardless of the regulatory classification of their carrier. Both
price cap and rate-of-return carriers, have made significant
investments in broadband. As noted above, the Plan, as well as a recent
technical paper ``The Broadband Availability Gap,'' provide data on the
fraction of unserved housing units that are in areas served by a Bell
Operating Company, a mid-size price cap carrier, and a rate of return
carrier. The Plan estimated that:
52 percent of unserved housing units are in census blocks in
which one of the three Regional Bell Operating Companies (AT&T,
Verizon or Qwest) is the incumbent local exchange carrier;
15 percent of the unserved housing units are in census
blocks where a mid-sized price-cap carrier is the incumbent
provider; and
One-third (33 percent) of unserved housing units are in
census blocks where a rate-of-return carrier is the incumbent
provider.
As one critical step to achieve the goal of universal broadband,
the Commission must reconfigure the current High-Cost Universal Service
Fund, which is designed to support voice service, to a new universal
service program, described in the Plan as the ``Connect America Fund,''
that will provide support for broadband networks capable of providing
voice services. As part of this conversion, the Plan recommends moving
rate-of-return carriers to incentive regulation. The Plan does not,
however, specify the type of incentive regulation, such as price cap.
A shift from rate-of-return to incentive regulation advances both
to the general goal of ensuring widespread deployment of broadband
networks and the specific tool of universal service reform. Rate-of-
return regulation was implemented at a time when monopoly providers
offered regulated voice telephone service over copper wires in a
particular geographic area. Such an era no longer reflects the reality
of converging technologies and competition in the 21st century
broadband world. Indeed, a growing number of rural carriers have
voluntarily elected to convert to price cap regulation to become more
efficient and competitive. Moreover, the conversion to incentive
regulation could help limit growth in the legacy High-Cost Universal
Service Fund while the Commission moves to adopt a more efficient and
targeted funding mechanism for government support for broadband
investment.
Incentive regulation could take many forms. Indeed, the majority of
states have already recognized the benefits of moving to some form of
incentive regulation--with over 30 states having already eliminated
rate of return regulation for local rates. States have found it
possible to craft regimes that provide the necessary stability for
ongoing investment. The Commission is seeking comment on the
recommendation in the Plan, including the proposal to move to incentive
regulation. The Commission also asks parties to suggest other
alternatives that would allow the Commission to achieve the National
Broadband Plan goals of world-leading, affordable broadband service for
all Americans. The Commission welcomes and encourages all interested
parties to provide suggestions, data and recommendations in response to
the Notice.
Question 5c. Why did the plan settle on the download speed of 4 MB
(megabits-per-second) by 2020? It seems a bit modest for a goal.
Answer. The Commission analyzed consumer usage of broadband speeds
to set an initial target of 4 Mbps of actual download speed and 1 Mbps
of actual upload speed, which is quite aggressive. It is one of the
highest universalization targets in the world. Many nations, such as
South Korea and Finland, have already adopted short-term download
targets around 1 Mbps. In addition, the 4 Mbps is comparable to the
median speed received by residential consumers today, and what many
consumers are likely to use in the near term, given past growth rates.
To ensure that consumers in rural areas receive broadband speeds
comparable to urban areas, the Plan also recommends reevaluating this 4
Mbps funding target every 4 years and adjusting it as appropriate to
reflect changing consumer use and demand to ensure that rural areas
continue to receive service that is reasonably comparable to service in
urban areas. Doing so will ensure that there is no digital divide in
this country.
Question 5d. Does this goal provide a competitive benefit to
wireless technology?
Answer. The Plan is technology and provider neutral. The Plan
recommends that any provider that is able to meet the qualifications
set forth by the Commission will be eligible to receive support to
deploy broadband. The public and interested parties will have ample
opportunity to comment and provide suggestions on what the criteria
should be adopted to be eligible for distribution of support.
Question 6. The CLECs who serve rural Alaska communities have been
investing in mobile services and bringing cell phones to regions of the
state that previously were unserved. They are very concerned the
transition away from the High Cost Fund. Under a current order from the
FCC, the CLECs are exempted from a cap on the High Cost Fund. Will you
look into the possibility of extending this exemption on tribal lands
as you move forward on USF reforms?
Answer. In considering any universal service reforms, we will
consider whether an exemption should be made for tribal lands,
including Alaska Native regions, or any other region where unique
circumstances necessitate a different approach. Indeed, in the
universal service reform notice of inquiry and notice of proposed
rulemaking adopted on April 21, 2010, the Commission specifically
sought comment on whether there are any unique circumstances on tribal
lands, including Alaska Native Regions, that would necessitate a
different approach.
Question 7. Many critics of the plan believe investment in networks
will be chilled by the work of the National Broadband plan. Some people
have expressed concerns that the Plan may produce the unintended
consequence of chilling investment in these networks. Can you please
address these concerns?
Answer. The National Broadband Plan sets forth recommendations that
are designed to encourage, not discourage, investment in broadband
networks. While I don't know the specific proposals that these concerns
reference, the Commission intends to move forward in an open and data-
driven manner with the goal of expanding and improving broadband
networks, and removing barriers to innovation and investment throughout
the Nation.
Question 8. I appreciate the push to bring the country to a 4G
world--but the plan highlights that Chairman Rockefeller and my states
lag behind in populations with access to a 3G network, with West
Virginia 71 percent and Alaska with 77 percent covered. As you know,
the remaining percentage will be the most difficult and costly to
cover. Can you discuss some of the funding changes proposed for network
build out? (Chapter 8.3)
Answer. As you have noted, building out networks on sparsely
populated and/or remote areas can be very costly. Nonetheless, as a
nation we need to ensure that no population is left out of the benefits
that come with access to mobile broadband. The Plan proposes the
creation of a Mobility Fund, as part of broader reforms of the
Universal Service Fund. Without increasing the overall size of
Universal Service Funding, the Plan recommends providing one-time
support for deployment of infrastructure enabling robust mobile
broadband networks, to bring all states to a minimum level of mobile
availability. Bringing all states up to a national standard will help
enable Americans in unserved areas participate in the mobile
revolution. I have directed staff to prepare a specific proposal for a
Mobility Fund for Commission vote this fall.
Question 9. I also appreciate the recognition that the FCC gives to
the most under and unserved populations, tribal communities. I received
many complains in my office regarding the broadband ARRA programs and
their perceived failure to accommodate the needs of tribal communities.
For future grant programs under NTIA (BTOP) and Rural Utilities
Service, do you have recommendations on how to improve the process for
tribal communities?
Answer. The Commission is not involved with the evaluation or
review of the Broadband Technology Opportunities Program (BTOP).
Concerns regarding the BTOP process should be directed to NTIA.
Question 10. The Broadband plan notes that rural Americans are
significantly less likely to subscribe to broadband Internet access
than their counterparts in urban areas. As you may know, Alaska has
many rural communities. What strategies will you use to close the gap?
Answer. Many of the adoption recommendations included in the
National Broadband Plan are similar to those proposed in the first
round BTOP application submitted by the University of Alaska for their
Bridging the e-Skills Gap in Alaska program. For example, the Digital
Literacy Corps, if funded, could provide digital skills training to a
group of local rural residents, who, as trusted members of their
communities, could help other residents understand the value of
broadband and acquire the skills needed to navigate online
environments. The Plan also recommends targeted awareness programs and
a best practices clearinghouse, which would help rural communities
share best practices and eliminate redundant efforts, both of which
were included in the Alaska proposal. Additionally, the Plan suggests
continuing support for state level initiatives, which could allow
Alaska more ability to plan and implement programs specifically
tailored to meet the state's needs and the unique adoption barriers
faced by its citizens.
Low-income residents may also benefit from the plan's
recommendation to expand low income Universal Service support to
broadband, and Native Alaskans will benefit from recommendations
designed to increase adoption and deployment of broadband on Tribal
lands such as the Tribal Broadband Fund.
Question 11. In the Plan, the FCC shows that adoption on Tribal
lands is extremely low because broadband has not been built out to
these areas. In Alaska, we have many regions that are either
underserved or not served at all. How do you plan to address this from
both the wireline and the wireless perspective? Additionally, will you
discuss how you believe the Commission should move forward in modifying
the Tribal Land Bidding Credit (pg. 97 of NBP)?
Answer. As noted above, the National Broadband Plan aims to provide
several tools to address disparities throughout the nation, including
on tribal lands and Alaska Native regions. The Commission took the
first critical step by beginning the process of converting the
Universal Service Fund over time to fund modern communications networks
that support broadband as well as voice service. On April 21, 2010, the
Commission adopted a notice of inquiry and notice of proposed
rulemaking to examine near- and longer-term processes to target funding
toward new deployment of broadband networks in unserved areas while
considering final rules to implement a new Connect America Fund
mechanism that will efficiently support universal access to broadband
and voice services. The Commission looks forward to receiving
substantial input for this record from tribal governments, so
Commission staff can understand and account for unique circumstances
present on tribal lands, including Alaska Native regions.
Recommendation 5.17 of the Plan outlines five specific actions to
be undertaken as the Commission considers the unique spectrum needs of
Tribal lands, which are intended to assist the development of wireless
services. First, in connection with the recently launched Spectrum
Dashboard, Commission staff is continuing to explore and implement
improvements to the database that will assist in spectrum policy
planning and decisionmaking, promote a robust secondary market in
spectrum and improve communications services in all areas of the U.S.,
including rural, underserved and Tribal lands. As a first step, we are
seeking to develop a search feature that would identify spectrum
licensed on federally recognized Tribal lands.
Second, as you note, I have directed staff to explore changes to
the Tribal Land Bidding Credit program. I have asked staff to prepare
an NPRM for the 4th quarter of this year proposing rules to promote
greater use of spectrum on Tribal lands in coordination with Tribal
governments, including possible revisions to the Tribal Land Bidding
Credit. In that regard, we would seek comment on possible improvements
to our program for providing Tribal Land Bidding Credits, including
modifications to facilitate Tribal access to spectrum on Tribal lands.
Third, we will explore establishing a Tribal Priority for wireless
licenses covering Tribal lands. While the statutory and regulatory
procedures for licensing wireless services are different in some
respects from those applicable to broadcast stations, the Tribal
Priority recently adopted for the threshold stage of FM radio allotment
and AM radio licensing could be a model for establishing a similar
priority in the wireless context.
Fourth, we will explore creating additional flexibility and
incentives for build out of facilities serving Tribal lands.
Fifth, the Plan recommends expeditious resolution of pending
petitions for reconsideration in the White Space proceeding and proceed
with a Notice of Inquiry to consider higher power fixed operations in
rural areas, which often include Tribal lands. I have directed staff to
complete the final rules for TV white space devices by resolving
outstanding challenges to those rules in the 3rd quarter of this year.
Several other aspects of the Plan propose action to address the
need to ensure that services reach all parts of the country.
Recommendation 8.3 proposes the creation of the Mobility Fund to
provide onetime support for deployment of 3G networks, to bring all
states to a minimum level of 3G (or better) mobile service
availability. This proposal, along with proposals with respect to other
mechanisms mentioned above, such as the Connect America Fund, will
assist the build out of wireless services.
Question 12. Many Alaskans are concerned about rising monthly bills
due to surcharges and line items that were not made clear to them when
they signed up for service. What steps can the FCC take to improve
transparency in billing?
Answer. In August 2009, the FCC released a broad Notice of Inquiry
(NOI) as part of its Truth-inBilling proceeding seeking information on
opportunities to protect and empower American consumers by ensuring
that consumers have sufficient access to relevant information about
communications services. The Consumer Information and Disclosure NOI
asked questions about the adequacy of information available to
consumers at all stages of the purchasing process, including: (1)
choosing a provider, (2) choosing a service plan, (3) managing use of
the service plan, and (4) deciding whether and when to switch to a
different provider or plan. The Consumer Information and Disclosure NOI
asks these questions about all communications services used by
consumers, including wireline and wireless, broadband, and video
subscription services. The NOI also recognized that ``access to
accurate information plays a central role in maintaining a well-
functioning marketplace that encourages competition, innovation, low
prices and high-quality services.'' (NOI at para. 5.) FCC staff are
reviewing the record compiled in response to the NOI and considering
appropriate next steps for protecting consumers.
Question 13. It's alarming to me that the FCC has found that
broadband providers often times don't actually deliver the speeds they
advertise. How can consumers make these important decisions when they
don't know what speeds they are signing up for?
Answer. The FCC also recognized the importance of consumer
information to meaningful competition in its National Broadband Plan
(NBP), stating: ``Consumers need more information about the speed and
overall performance of the [broadband] services they receive and of
competitive offers in their area, and about the gap between actual and
advertised speeds and the implications of that difference.'' (NPB at
p.44.) To provide consumers this necessary information, the NBP
recommends that the FCC, in coordination with the National Institute of
Standards and Technology, establish technical broadband measurement
standards and a methodology and process for updating them. It also
recommends that the FCC encourage the formation of a partnership of
industry and consumer groups to provide input on these standards and
this methodology. Further, the Plan recommends that the FCC continue
measuring and publishing data on actual performance of broadband
services and initiate a rulemaking proceeding to determine performance
disclosure requirements for broadband. The FCC has posted on its
website links to broadband speed measurement tools available free to
all consumers from any location where they use broadband service, and
FCC staff have begun work to implement the Plan's additional
recommendations. Further to the NBP recommendation, the FCC recently
contracted with a third-party, SamKnows Limited, to begin measuring
broadband speeds.
Question 14. The NBP (National Broadband Plan) notes that Americans
in low-income households subscribe to broadband Internet at much lower
rates than their more affluent counterparts, even though they adopt
mobile and pay-TV services at nearly the same rates. Can you try to
explain this difference? How is the Commission going to tackle this
problem it?
Answer. An FCC survey conducted in developing the NBP identified
three major barriers that keep non-adopters from getting broadband: (1)
cost, (2) digital literacy, and (3) relevance. (NPB at 170.) In
addition to outlining guiding principles for improving broadband
adoption and utilization, the Plan made specific recommendations for
addressing each barrier. The Plan's recommendations for addressing the
cost barrier include expanding the current Universal Service Lifeline
Assistance and Link-Up America programs to make broadband more
affordable for low-income households and considering free or very low-
cost wireless broadband as a means to address affordability. In
addition, ensuring competition and a well-functioning marketplace by
providing all consumers with the information needed to make purchasing
decisions may also help make broadband more affordable.
The FCC has developed an outreach and educational structure to
reach targeted constituencies. These constituencies align with those
highlighted in the NBP. We will be working with national, state and
local governments and community organizations. Specifically, our
targeted constituencies are African American, Hispanic, Senior, Rural
and Tribal. While we are targeting these groups, we also are working
with organizations that will aid us in lifting some of the adoption
barriers, such as libraries, senior and community centers, schools and
local organizations.
Question 14a. How does the FCC plan to promote innovation in
content and online applications?
Answer. Promoting innovation in content and online applications is
a key goal of the Commission's ongoing Open Internet proceeding. I
believe that high-level rules of the road to preserve the free and open
Internet can help ensure that content and application innovation
continues to flourish online. The Commission moved forward last month
with a proceeding to promote innovation and consumer choice in the
video-device marketplace, which will help foster more innovative
content and applications, implementing a key recommendation of the
National Broadband Plan. The National Broadband Plan contains a number
of other recommendations to promote innovation in online content and
applications, e.g., regarding privacy, the smart grid, health IT, and
online learning. The FCC is working to help implement those
recommendations, either directly or by assisting other government
agencies and stakeholders.
Question 15. Mr. Chairman, I wanted to bring your attention to the
letter Senator Wicker and I sent to you last month regarding data
roaming issues and the current open proceeding. Can you give us a more
specific timeline on this moving forward proceeding?
Answer. In April, the FCC sought additional comment on whether to
extend automatic roaming obligations to mobile data services. Comments
are due June 14, 2010, and reply comments are due July 12, 2010. I look
forward to reviewing the record and working with my fellow
Commissioners to determine, in an expeditious manner, the path forward
that best serves American consumers with a focus on the importance of
data roaming for rural Americans.
______
Response to Written Questions Submitted by Hon. Olympia J. Snowe to
Hon. Julius Genachowski
Question 1. The Broadband Plan makes several references to the
private sector investment that has been made to broadband networks and
services. The document even goes as far to state that ``due in large
part to private investment and market-driven innovation, broadband in
America has improved considerably in the last decade.''
Back in the Fall, the Commission concluded that a total investment
for universal broadband availability for the Nation would range from
$20 billion to $350 billion depending on the speed of broadband
service.
In the Plan, the Commission concludes that in order to achieve the
National Broadband Availability Target of broadband speeds of 4 Mbps
download and 1 megabit-per-sec upload, the total cost would be
approximately $33 billion.
The Plan sets a goal of 100 million U.S. homes should have
affordable access to actual download speeds of at least 100 Mbps and
actual upload speeds of at least 50 Mbps by 2020. Can you pinpoint or
elaborate on what the Commission has estimated as the required
investment to achieve that goal?
Answer. The Plan's goal for achieving affordable, actual download
speeds of 100 megabits-per-second downstream and 50 megabits-per-second
upstream to 100 million American homes by 2020 is ambitious but
achievable. The 100-squared initiative will help ensure America's
global competitiveness in the 21st century. A widespread level of
affordable high-speed connectivity will encourage innovators to develop
the next generation of cutting-edge applications in the American
market, for the American people.
The network deployment model developed and referenced in the Plan
was aimed at estimating what areas of the country are currently
``unserved'' by broadband and calculating the level of investment that
would be needed to serve those areas. The model was not developed with
the purpose of estimating the investment that would be required to
build 100 Mbps networks to 100 million households.
Question 2. One of the main goals of the Plan to is to ``maximize
investment'' but the document seems to be light on recommendations
related to financial incentives such as tax credits to bolster capital
investment in infrastructure.
Given the significant capital expenditures required to meet the
Commission's National Broadband Availability Target and 100-100 goal,
why weren't there more recommendations related to tax credit-based
incentives? The plan made these types of tax-based proposals to
Congress for Research and Experimentation (R&E) and telework practices.
Answer. The Plan includes a variety of recommendations to reduce
costs and encourage private sector deployment in broadband networks and
applications. The Plan has recommendations to encourage private sector
investment to realize the 100 squared goal by, among other things,
fostering competition, driving demand for increased network performance
and lowering the cost of deploying infrastructure. These
recommendations should help inform consumers about broadband
performance, expand services and infrastructure, and reform access to
rights-of-way to lower barriers to entry for firms. The Plan also
encourages Congress to make the Research and Experimentation (R&E) tax
credit a long-term tax credit to stimulate broadband research and
development, which is a cost effective way to spur private sector
research and investment in broadband networks and applications.
Question 3. The Plan also establishes six long-term goals to serve
as a compass over the next 10 years. The first goal is to provide at
least 100 million U.S. homes with affordable Internet broadband access
with actual download speeds of at least 100 megabits-per-second and
actual upload speeds of at least 50 megabits-per-second. Providing
consumers, developers, and small businesses such high-speed broadband
speeds will truly revolutionize the Internet as well as exponentially
increase the benefits it provides--users will be able to leverage new
and emerging high-bandwidth applications and services that aren't
available today or accessible with lower speeds.
But at the same time, the Plan acknowledges that broadband carriers
are aggressively upgrading their networks to offer higher speeds and
greater capacities. The Plan cites several network upgrades and
expansions that are already planned or in the process of being
implemented over next 2 to 3 years that will provide approximately 100
million homes with broadband speeds of 20 to 50 megabits-per-second and
provide the building blocks to even faster broadband speeds in long-
term. How will the Commission measure the effectiveness of this Plan as
a catalyst for accelerating the investment that is currently underway
or broadband deployment and adoption in general?
Answer. The Plan includes a variety of recommendations and
benchmarks to track progress of broadband deployment and adoption.
Implementing the Plan requires a long-term commitment to measuring
progress and adjusting programs and policies to improve performance.
The Plan's recommendations to monitor implementation include:
a. Ensuring that the FCC quickly publishes a timetable of
proceedings to implement plan recommendations within its
authority;
b. Publishing an evaluation of plan progress and effectiveness
as part of the annual Section 706 Advanced Services Inquiry;
c. Creating a Broadband Data Depository;
d. Continue to utilize Broadband.gov as a public resource for
broadband information; and,
e. Publishing a Broadband Performance Dashboard with metrics
designed to track broadband plan goals.
Also, as required by the Broadband Data Improvement Act, the
Commission intends to conduct periodic surveys of consumers in urban,
suburban, and rural areas in the large business, small business, and
residential consumer markets to evaluate the characteristics of
broadband service capability and adoption. These periodic national
surveys will help track adoption rates over time, which can help
measure the effectiveness of the Plan's proposals.
The Plan recommends that the Commission and the U.S. Bureau of
Labor Statistics collect more detailed and accurate data on actual
availability, penetration, prices, churn and bundles offered by
broadband service providers to consumers and businesses, and should
publish analyses of these data. The Commission's Broadband Action
Agenda includes a proceeding later this year to improve the data the
Commission collects on broadband deployment and adoption. By collecting
more granular data over an extended time period, the Commission and
other agencies can analyze the impact of programs and investment on
broadband deployment and adoption.
In addition, the National Broadband Plan recommends Congress and
Federal agencies promote third-party evaluation of future broadband
adoption by including specific requirements and funding for program
evaluation and funding to conduct in-depth assessments and longitudinal
program assessment.
Question 4. One of the E-rate recommendations in the Plan is that
the FCC should reexamine specific E-rate rules that appear to limit the
flexibility of applicants to craft the most cost-effective broadband
solutions based on the types of broadband infrastructure, services and
providers available in their geographic areas. While more flexibility
could possibly reduce the overall cost of broadband and increase
bandwidth, there are concerns about maintaining the integrity of the
program. The E-rate program has been very successful, well run, and
established procedures for minimizing waste, fraud, and abuse. Can you
elaborate on the FCC's plan with respect to reforming and enhancing the
E-rate program but maintaining the integrity and ensuring that
increasing flexibility doesn't open it up to more waste, fraud, and
abuse?
Answer. In keeping with the National Broadband Plan's vision of
improving and modernizing the universal service programs, the
Commission is currently examining what is working well and what can be
improved in the current E-rate program. Specifically, the Commission is
considering several potential reforms that would cut red tape by
eliminating rules that have not effectively served their intended
purpose, while continuing to protect against waste, fraud, and abuse.
For example, the Commission is considering streamlining the E-rate
application process, providing greater flexibility for applicants to
choose the most cost-effective and educationally useful broadband
services. The Commission is also exploring ways to expand the reach of
broadband to the classroom, including schools that serve populations
facing unique challenges, such as tribal schools or schools for
children with physical, cognitive, or behavioral disabilities.
Additionally, the Commission is taking steps to make the E-rate program
more user-friendly and is working closely with the Universal Service
Administrative Company, which administers the E-rate program under the
Commission's direction.
The E-rate program provides two ``priorities'' for discounting
telecommunications services--Priority 1 for external telecommunications
and Internet connections and Priority 2 for internal connections/
wiring. The Plan recommends that the Commission develop ways that
Priority 2 funding can be made available to more E-rate applicants.
Given the advancements in information technology and more dynamic
content and applications that teachers and students are utilizing,
numerous schools are finding that traditional Priority 1 connections
(typically T1/T3s) are not enough for the growing demand and usage--
that higher bandwidth connections are needed. Libraries have also
conveyed the need for greater capacity due to increased patronage.
Question 5. The Broadband Plan makes numerous proposals related to
the Universal Service Fund, in general. As you know, the Universal
Service Administrative Company (USAC) is the independent, not-for-
profit corporation designated as the administrator of the Federal
Universal Service Fund by the FCC. Can you elaborate on how involved
the Universal Service Administrative Company (USAC) was in assisting
the FCC's development of these recommendations? Were USAC official
active participants in discussions?
Answer. As the National Broadband Plan Team developed its
recommendations, it obtained information and data from USAC, as
necessary, regarding the operation of the existing universal service
programs.
Question 6. The E-rate program provides two ``priorities'' for
discounting telecommunications services--Priority 1 for external
telecommunications and Internet connections and Priority 2 for internal
connections/wiring. The Plan recommends the Commission develop ways
that Priority 2 funding can be made available to more E-rate
applicants. Given the advancements in information technology and more
dynamic content and applications that teachers and students are
utilizing, numerous schools are expressing that traditional Priority 1
connections (typically T1/T3s) are not enough for the growing demand
and usage--that higher bandwidth connections are needed. Libraries have
also conveyed the need for greater capacity due to increase patronage.
How will the Commission balance the recommendation for increasing
Priority 2 funding with accommodating for greater Priority 1 funding to
meet the growing bandwidth needs of schools and libraries?
Answer. Funding under the E-rate program is essential to enable
schools and libraries to maintain current levels of Internet
connectivity and to provide access to improved telecommunications and
information services as technology advances. High-speed services are
needed to handle the applications available today, including online
distance learning and videoconferencing. Schools will need E-rate
funding for both the initial implementation of high-speed broadband
access and for ongoing costs to maintain and continuously improve their
networks. Although the E-rate program has always been able to fund all
Priority 1 requests in the past, the demand for internal connections
has exceeded the E-rate program's $2.25 billion cap in every year but
one since the program's existence. The Commission is currently
considering ways to ensure that schools and libraries receive funding
for Priority 2 services, with two goals in mind: (1) providing funding
for internal connections to more schools and libraries than in the
past; and (2) ensuring that a predictable amount of funding is
available to schools and libraries for internal connections each year.
Question 7. One of the main focal points of the Plan is radio
spectrum and finding more of it for wireless. While I strongly agree
that comprehensive spectrum policy reform is long overdue and paramount
to achieving the long-term telecommunications needs of this nation, I
am concerned about what seems to be a heavy emphasis on reallocation
instead of a more multi-faceted solution that includes fostering
technological advancement and more robust spectrum management.
Case in point, there are extensive and detailed recommendations in
the Plan to reallocate 120 megahertz of spectrum currently being used
by broadcasters as well as the voluntary mobile auction fund, but only
general recommendations to encourage technical innovation and spectrum
sharing/reuse opportunities that would improve spectrum efficiency. For
example, a technology known as femtocell, that can increase capacity by
offloading wireless traffic onto broadband wireline networks, wasn't
mentioned once in the Plan.
This plan is suppose to be forward thinking but seems to be
somewhat stuck in the past by presenting a roadmap that excessively
relies on reallocation, which is a zero sum game, instead of a greater
emphasis on technological innovation and robust management to increase
spectrum efficiency and wireless capacity. Do you agree that more
robust spectrum management policy and technical innovation advancement
are just as important, if not more so than reallocation? Can you
explain in more detail how the Plan will implement a comprehensive
solution to ensure that spectrum is available to meet the future needs
of all users--not just wireless broadband?
Answer. I certainly agree that an effective spectrum policy
involves much more than allocation decisions. The Plan includes a
number of recommendations for spectrum policy initiatives.
For instance, the Plan calls for ensuring greater transparency
concerning existing spectrum allocation and utilization. The FCC has
already launched, concurrent with release of the Plan, the ``spectrum
dashboard,'' which enables user-friendly access to information
regarding spectrum bands and licenses. The dashboard will also assist
in spectrum policy planning and decision-making, and help promote a
robust secondary market in spectrum so that companies can access
spectrum to serve a variety of different needs. The Plan also
recommends that the Commission move forward with creating methods for
ongoing measurement of spectrum utilization. This too, will help
provide a fact base that can inform policymaking so that we can take
needed actions to make better use of spectrum. In addition, the Plan
calls for a triennial assessment of spectrum allocations to ensure that
existing allocations serve the public interest.
I also believe that the FCC should expand incentives and mechanisms
for incumbent licensees to yield their spectrum to more productive
uses. The Plan sets forth several different mechanisms, including the
use of incentive auctions and expansion of tools to facilitate
relocation of government users.
Question 8. One of the recommendations within the National
Broadband Plan is that the FCC should make 500 megahertz newly
available for broadband use within the next 10 years, of which 300
megahertz between 225 MHz and 3.7 GHz should be made newly available
for mobile use within 5 years.
While the Plan briefly notes general estimates between 40 to 150
megahertz of spectrum are required for each operator, it wasn't clear
as to how the 500 MHz would ultimately be parceled out--spectrum
license sizes for new competitors and additional spectrum bandwidth to
increase capacity for incumbent spectrum licensees. Can you elaborate
on how that 500 MHz will be distributed?
Answer. As the Plan notes, the forecast of the need to make 300
megahertz of spectrum between 225 MHz and 3.7 GHz available by 2015
reflects a set of reasonable assumptions about the evolution of supply
and demand for mobile bandwidth. Determinations about whether spectrum
is licensed or unlicensed, as well as service rules, will need to be
developed. By adopting flexible use policies for this spectrum, and
facilitating secondary markets, the Commission will help ensure that
spectrum can be put to its highest and best use.
Question 9. How will the Commission balance providing more spectrum
to incumbents in order to increase capacity and bandwidth with
providing spectrum to new entrants to foster more competition so
consumers can have more choices available to them?
Answer. The first priority is to make available additional
spectrum. Both incumbents and new entrants will need access to
spectrum.
Question 10. The FCC recently launched a free broadband speed test
for consumers to check the download and upload speeds of their Internet
broadband connection. The premise is that the test will allow consumers
to compare the FCC test results with the speeds promised by the
broadband provider and allow the FCC to use data collected from the
test to analyze broadband quality and availability across the United
States.
However, some users have expressed concern about widely varying
results. There is actually a disclaimer on the FCC test site stating
that the test may not be an accurate representation of connection
quality provided by one's broadband provider. An FCC official recently
stated that ``software-based tools can provide individuals with
inconsistent performance results, some of which are out of the control
of the ISP.'' Given the test transfers a small amount of generic data
back and forth between a user's computer and a testing server, the path
that the data takes could contain numerous hops or links owned and
operated by multiple carriers that the consumer is not aware of--even
for local end points. In addition, the old adage ``you're only as fast
as your slowest link'' seems to apply. So one could easily see a
possible misrepresentation the test would have and the consumer
confusion that could result.
Is the FCC concerned about consumer confusion that the Commission's
Consumer Broadband Test could create? With varying test results and
lack of detailed information presented, it could lead to consumers
wrongly accusing their broadband provider of not providing what they
are advertising even though, as the FCC official noted, some
performance characteristics are out of the ISP's control, correct?
Answer. The Commission recognizes that there are limitations to the
online, software-based, speed tests, as you rightly point out. However,
these speed tests are not designed primarily to test the performance
that a consumer's broadband provider is delivering (and solely
responsible for), but rather to provide insight into the actual
performance that the consumer experiences on his or her device. In that
respect, the software-based tests are extremely valuable.
Beyond performance experienced by the consumer though, we are also
interested in performance delivered by an individual ISP, as part of
the broader transparency initiative. For that reason, we are also
launching a hardware-based speed testing project in partnership with a
third-party contractor, SamKnows.
The goal of the project is to provide consumers with
accurate and complete information about what speeds are
delivered to their homes by ISPs.
While measuring performance experienced on an end-user
device is valuable as well, ISPs cannot be reasonably held
accountable for factors inside of the home that may degrade
service. Therefore, this project will rely on scientific,
hardware-based testing that will test performance at the point
of the user's router.
The initial test will rely on a panel of 10,000 volunteers
across ISPs, service tiers and geographies, all of which will
be given a customized router that can be easily integrated into
their existing home network.
The FCC will make results of this study available later this
year on both a publicly accessible website and in the form of a
report.
This is the first step in an iterative process to design a
specific testing methodology for broadband services and create
more transparency and accountability in the broadband
marketplace.
Question 11. Transparency with broadband performance is a key issue
within the Plan but there isn't any real mention of the multitude of
factors that affect broadband speeds--the multiple links that exist
between consumer and the Internet content they're accessing, equipment
performance, the type of data being transmitted, existence of viruses/
malware, etc. What are the FCC's plans to properly address this?
Answer. Many factors affect broadband performance, so, as described
above, the Commission intends to employ a two-part strategy to provide
improved measurement and reporting of broadband speeds and performance.
The first part, tackled by online speed tests at the end-user's device,
will provide information on performance experienced by consumers. The
second part, tackled by hardware-based testing that sits behind a
customer's modem, will provide information on performance delivered by
ISPs. As the diagram below illustrates, there are a number of points
where performance can be affected:
Software-based testing covers performance for the entire range from
point 1 to point 6. However, to isolate just the performance delivered
by ISPs, it is important to focus just on point 2 to point 5. The
Commission staff is working with a third-party contractor, SamKnows, as
well as the ISP community to accomplish this. By placing test devices
at the Customer Premise Equipment (CPE) point, we can remove
performance degradation that occurs between points 5 and 6 from factors
such as in-home wiring, multiple computers in use, viruses or malware
on a device, and other issues. By working with ISPs and independent
testing locations to place testing servers on ISP networks and at
commonly used peering exchanges, we can remove performance degradation
that occurs between points 1 and 2 from factors such as off-network or
public Internet traffic that an ISP cannot control.
Although there are a multitude of factors affecting broadband
speeds, by performing both of these tests, the Commission hopes to
isolate just those factors that ISPs are responsible for. That way,
consumers are informed as to whether, when they experience sub-standard
performance, the issue is what is delivered by the ISP, or whether the
issue is on their device or in their home network. This will lessen the
burden on ISPs to deal with customer complaints about performance that
they cannot correct, and lessen the burden on consumers that may
erroneously purchase higher speed service packages when that may not be
the true problem.
Question 12. The Broadband Plan indicates that approximately 4
percent of housing units are in areas with three wireline providers
(either DSL or fiber, the cable incumbent and a cable over-builder),
and 78 percent are in areas with two wireline providers. Thirteen
percent are in areas with a single wireline provider and 5 percent have
no wireline provider.
However, this data seems to conflict with the FCC's most recent
semi-annual broadband report, which was released earlier this year in
February. Table 13, which details the percentage of Census Tracts with
Residential Fixed High-Speed Connections related to the number of
providers, indicates that 26 percent of census tracts have three
broadband providers and only 1.1 percent of census tracts have no
broadband provider.
Table 13.--Percentage of Census Tracts with Residential Fixed High-Speed Connections by Technology as of
December 31, 2008
(Connections over 200 kbps in at least one direction)
----------------------------------------------------------------------------------------------------------------
Number of Providers
------------------------------------------------------------------
Technology Seven or
Zero One Two Three Four Five Six More
----------------------------------------------------------------------------------------------------------------
aDSL 4.3 40.7 38.4 13.4 2.7 0.4 0.1 0.0
sDSL 96.0 3.8 0.2 0.0 0.0 0.0 0.0 0.0
Other Wireline 99.2 0.8 0.0 0.0 0.0 0.0 0.0 0.0
Cable Modem 8.6 79.3 11.6 0.6 0.0 0.0 0.0 0.0
FTTP 86.7 13.0 0.2 0.0 0.0 0.0 0.0 0.0
Satellite 45.2 24.6 24.5 5.6 0.0 0.0 0.0 0.0
Fixed Wireless 87.3 10.2 2.0 0.4 0.1 0.0 0.0 0.0
Power Line 99.8 0.2 0.0 0.0 0.0 0.0 0.0 0.0
aDSL and/or Cable Modem and/or FTTP 1.5 6.6 34.7 35.7 16.2 4.3 0.8 0.2
Any Technology 1.1 2.6 15.1 25.7 26.1 16.7 7.9 4.8
----------------------------------------------------------------------------------------------------------------
Note: Figures may not sum to totals due to rounding.
Sources: FCC Form 477, Part VI and Census 2000.
Can you clarify the differences in the data sets? Which is more
accurate in detailing the number of broadband providers consumers have
available to them?
Answer. Table 13 displays data that broadband providers submit to
the FCC on Form 477. This data collection requires providers to show
the number of customers by technology and speed tier for each census
tract in which they offer service. The table then shows the percent of
tracts with a given number of providers for each of these technologies.
The NBP highlights a shortcoming of this approach (Ch 4, endnote
6). It states that ``. . . the new 477 data are not ideal for analyzing
competition because the data identify providers that operate anywhere
in a Census tract and not whether their service areas overlap
geographically.'' So while over half of the census tracts have four or
more providers their service territories have an unknown but likely
limited overlap.
The NBP (Exhibit 4-A) depicts share of housing units in tracts with
0-3 providers. In partial explanation of how the NBP derived these
numbers the endnote states ``First, we do not count providers with less
than 1 percent of broadband subscriptions in a given Census tract under
the assumption that a provider, with such a small number of subscribers
is probably not available to a large part of the tract. Second, we
identify cable overbuilders (such as RCN) in the data, which allows us
to make reasonable assumptions about where cable companies actually
provide service to the same geographic areas. Specifically, we assume
that any given area is served by a maximum of one facilities-based DSL
provider and one cable provider unless a cable overbuilder is present,
in which case we count both cable providers. We also count fiber-
specific competitors, but do not double-count telco providers that
offer both DSL and fiber in the same tract (such as Verizon DSL and
FiOS).''
Question 13. Another table (Table 10) in the report shows that the
number of broadband providers has increased from 1,270 in June 2005 to
1,554 in December 2008--a 22 percent increase over 3 and a half years.
Table 10.--Nationwide Number of Providers of High-Speed Connections by Technology 2005-2008
(Connections over 200 kbps in at least one direction, in thousands)
----------------------------------------------------------------------------------------------------------------
2005 2006 2007 2008
Technology ---------------------------------------------------------------
Jun Dec Jun Dec Jun Dec Jun Dec
----------------------------------------------------------------------------------------------------------------
aDSL 758 818 833 858 864 856 863 879
sDSL 270 269 256 257 242 233 238 262
Other Wireline 206 241 246 256 246 250 259 290
Cable Modem 227 242 254 279 282 292 296 341
FTTP 138 170 187 222 251 276 308 430
Satellite 10 4 5 5 5 5 4 5
Fixed Wireless 423 463 452 505 484 514 505 617
Mobile Wireless 13 15 19 24 19 22 24 46
Power Line and Other 18 7 6 6 6 7 6 5
Total 1,270 1,345 1,327 1,396 1,374 1,399 1,395 1,554
----------------------------------------------------------------------------------------------------------------
Note: Multiple Form 477 filers within a holding company structure count as one provider.
Source: FCC Form 477, Part I.
From the FCC's point of view is the broadband industry becoming
more competitive and do consumers have more options for broadband
providers available to them?
Answer. The Plan recognizes that competition is crucial for
promoting consumer welfare and spurring innovation and investment in
broadband access networks. Competition provides consumers the benefits
of choice, better service and lower prices. The Plan analyzed available
data to assess the current state of competition among wireline
broadband services and mobile wireless broadband services, and the
competitive dynamics across different broadband technologies. However,
the Plan does not analyze the market power of specific companies or
reach definitive conclusions about the current state of competition for
residential broadband services. Rather, the Plan includes a variety of
recommendations designed to spur competition and innovation across the
three elements of the broadband ecosystem--networks, devices and
applications.
With regard to broadband networks, the Plan makes recommendations
intended to ensure that consumers have the information they need to
make decisions that maximize benefits from these services. Increased
transparency will likely drive service providers to deliver better
value to consumers through better services. The Plan also focuses on
ways to increase competition in the wholesale broadband market--
including issues associated with high-capacity circuits, copper
retirement, interconnection and data roaming.
As the Commission considers rulemakings to implement these
recommendations, the Commission looks forward to participation from the
public and interested parties to ensure that the goals of increased
competition are realized.
Question 14. Broadband Internet access services are currently
classified as information service, which is defined as ``the offering
of a capability for generating, acquiring, storing, transforming,
processing, retrieving, utilizing, or making available information via
telecommunications, and includes electronic publishing.''
Some have suggested reclassifying broadband as a telecommunications
service, which is defined as ``the transmission, between or among
points specified by the user, of information of the user's choosing,
without change in the form or content of the information as sent and
received.''
Without question, there has been a significant evolution in the
telecommunications industry and the networks--from the legacy tip &
ring circuit-switched PSTN voice network to the high-bandwidth, dynamic
routing, IP packet-based networks of today, where there is a
convergence of various data types. Today's broadband networks employ
numerous protocols, various caching and queuing technologies, DNS/IP
addressing, as well as encoding and decoding (codecs) technologies that
allow consumers to utilize countless services and applications online.
Very simply, there is an extensive amount of processing, storing, and
converting activities on a broadband network than the legacy phone
network with regards to the User Network Interface (UNI) connection. In
your opinion and from a pure definitional standpoint, which definition
is more appropriate for broadband access services? Do you believe a new
definition or classification (such as ``Internet Service'' or
``Broadband Service'') may be required to better reflect broadband
Internet access services?
Answer. In the Brand X decision, 454 U.S. 967 (2005), the Supreme
Court held that it is ambiguous whether cable modem service, one form
of broadband Internet access service, is an integrated information
service or includes a telecommunications service component.
A majority of six Justices are on record as saying that
classification of cable modem service is a call for the FCC to make and
that ``the Commission is free within the limits of reasoned
interpretation to change course if it adequately justifies the change''
(id. at 1001); one of the six ``just barely'' accepted the FCC's
information service approach; and the three remaining Justices
expressed the view that the agency must classify a separable
telecommunications service within cable modem offerings. In light of
that decision, I believe the FCC has discretion in deciding whether
broadband Internet access service includes a telecommunications service
component.
As you know, Chairmen Rockefeller, Waxman, Kerry, and Boucher have
announced they will start a process to develop proposals to update the
Communications Act. A limited update of the Communications Act could
lock in an effective broadband framework to promote investment and
innovation, foster competition, and empower consumers. I have committed
all available Commission resources to assisting Congress in its
consideration of how to improve and clarify our communications laws.
Question 15. Would reclassification of broadband Internet access
service as a telecommunications service change the ability of service
providers to deal with online copyright theft? What should be done to
maximize security for copyright holders from a technology standpoint?
Answer. I do not believe that classification of the transmission
component of broadband Internet access service as a telecommunications
service would have any effect on the ability of service providers to
deal with online copyright theft. The National Broadband Plan
recognizes (at page 58) that ``[t]he Internet must be a safe, trusted
platform for the lawful distribution of content.'' The Plan
acknowledges (at page 17) that digital piracy is an ongoing problem.
The Plan notes promising developments in technology to prevent piracy,
such as content finger-printing, and lauds industry-led initiatives to
develop guidelines for dealing with piracy. I am hopeful that
continuing advances in technology, development of industry guidelines,
and enforcement of copyright laws will curb piracy without stifling
innovation or overburdening lawful uses of copyrighted works.
Question 16. Additionally, would reclassification have any
implications for the ability of service providers to deal with computer
viruses or spam, or even to implement cybersecurity measures? As a
member of the Intelligence Committee, I am very interested in
enhancing--and not impeding--cybersecurity protections, so I look
forward to your comments on this.
Answer. As you know, section 1 of the Communications Act explains
that the Commission exists ``for the purpose of the national defense
[and] for the purpose of promoting safety of life and property through
the use of wire and radio communication.'' Cybersecurity is a growing
concern, and the Commission has recently begun two proceedings to
assess our needs in this area: we have launched an inquiry on the
ability of existing broadband networks to withstand significant damage
or severe overloads as a result of natural disasters, terrorist
attacks, pandemics or other major public emergencies; and we have begun
a proceeding to seek public comment on the proposed creation of a new
voluntary cybersecurity certification program that would encourage
communications service providers to implement a full range of
cybersecurity best practices. We will examine the records of these
proceedings closely, along with the record generated in response to the
Notice of Inquiry on our legal framework. To the extent that the
Commission possessed the necessary authority to address cybersecurity,
as well as online copyright theft, computer viruses or spam before
Comcast, the ``third way'' classification framework discussed in the
Notice of Inquiry on our legal framework would protect that authority.
If, on the other hand, the Commission decides to maintain the
information service classification, jurisdictional issues would be
addressed on a case-by-case basis, in light of the particular details
of the proposal at issue.
______
Response to Written Questions Submitted by Hon. John Ensign to
Hon. Julius Genachowski
Question 1. Chairman Genachowski, last month the Washington Post
wrote that ``it is curious that the [FCC] faults the market for
failing'' when ``the number of Americans who have broadband at home has
grown from 8 million in 2000 to nearly 200 million last year.'' The
National Broadband Plan itself notes that broadband providers invested
$130 billion into their networks over the last 2 years, during a major
recession. I have to agree with the Washington Post editorial board--I
don't see signs of gross market failure that might justify the sort of
government spending and increased government intervention recommended
by the Plan. How is it that you and your team came to such a different
conclusion?
Answer. In the Recovery Act, Congress directed the FCC to develop a
National Broadband Plan that would ``seek to ensure that all people of
the United States have access to broadband capability and [to]
establish benchmarks for meeting that goal,'' as well as promote the
use of broadband infrastructure in advancing a number of national
purposes like health care delivery, education, and energy independence
and efficiency.
In 2009, I said that our steps to fulfill this Congressional
directive would be data-driven--not starting with conclusions, but
using data to develop analysis--not just accepting data, but digging
into data to find concrete solutions that supersede ideology--and that
can make a difference in the lives of real Americans.
To complete the Plan, the FCC launched 36 staff-level public
workshops attracting over 2,500 participants; issued 31 Public Notices,
generating over 23,000 comments totaling more than 74,000 pages; and
used new media tools including our broadband blog, which received over
1,200 comments, all of which were entered into the official record.
The data we gathered from this process showed that on many
quantifiable metrics, the United States faced significant gaps. The FCC
team found that roughly 14 to 24 million Americans lack access to
broadband infrastructure that can support today's applications, and
that roughly 80 million American adults still do not use broadband at
home. Only 16 percent of public community colleges have high-speed
connections comparable to research universities. And nearly a decade
after 9/11, the Nation's first responders still lack access to a
nationwide, interoperable wireless public safety network.
To be sure, today's broadband ecosystem is vibrant and healthy in
many ways--in large part, due to the large investments that private
sector providers have made. In order to meet the high goals for
American technological leadership that we set in the Plan, private
sector investment will be essential. That's why the plan takes steps to
drive innovation and investment in the broadband ecosystem long into
the future--yielding innovations, devices and services we cannot dream
of today. These solutions--making 500 MHz of spectrum available for
mobile broadband use and reforming the Universal Service Fund in a
revenue-neutral manner to make broadband available to every American--
are not intended to displace the role of private investment. Rather,
they are targeted to maximize the fruits of that investment in a way
that speeds the deployment, adoption and use of broadband in the ways
Congress intended and for the benefit of all Americans.
Question 2. Chairman Genachowski, one of the National Broadband
Plan's goals is to have 100 million households served by 100 megabit
broadband within 10 years. Achieving this goal will obviously require
tens of billions of dollars to be invested into broadband networks. The
Plan, however, recommends net neutrality restrictions; suggests broader
unbundling mandates; and leaves the door open to using outdated
monopoly telephone regulations for broadband. Most people I talk to say
that heavy-handed regulations like these will deter the private-sector
investment you need to reach your 100 to 100 target. If such policies
would result in less investment, isn't the FCC be undermining its own
goals by pursuing these regulatory policies?
Answer. I start with the belief that the private sector must play
the leading role in extending broadband networks across our nation, to
ensure we realize our ambitious 100 X 100 goal. Promoting private
sector investment is a key focus of the National Broadband Plan and a
key priority for the FCC, including through initiatives to reduce
barriers to broadband deployment; reform the Universal Service Fund to
support broadband; and provide high-level rules of the road to preserve
the free and open Internet as an engine for economic growth and private
investment, both in and on top of broadband Internet platforms.
Question 3. Chairman Genachowski, in your testimony before the
House Commerce Committee, you left the door open to pursuing
involuntary proposals to reallocate broadcaster spectrum. While you and
I agree on the importance of finding more spectrum for wireless
broadband, I believe we must exhaust every possible voluntary proposal
before even talking about involuntary mechanisms. Do you agree? And if
so, will you commit to us today that you will not consider m
involuntary proposals until the FCC has completed its consideration and
implementation of all possible voluntary mechanisms?
Answer. I believe, and the staff at the FCC believes, that a
voluntary approach can work, and our goal is to first employ all
possible voluntary mechanisms. We believe a voluntary approach with
proceeds sharing will allow the market to determine the best use of
spectrum, allowing the right amount of spectrum demanded by the market
to flow to its highest valued use, while creating value for everyone in
that chain of stakeholders (broadcasters, consumers, and broadband
providers).
______
Response to Written Questions Submitted by Hon. George S. LeMieux to
Hon. Julius Genachowski
Question 1. Last year, Congress approved a stimulus bill directing
more than $7 billion in funding for broadband deployment. While some of
the funds have now gone out, the funding did not go out quickly, and
many of the largest broadband providers would not participate. Since
this money was allocated before this plan was created, are you
concerned that billions of dollars in funding are being misspent in a
fashion that is devoid of a strategic plan? Has your staff been
coordinating with the Department of Commerce and the Department of
Agriculture to ensure that their funding plans complement the broadband
plan we are considering today?
Answer. The Commission coordinated extensively with the Executive
Branch and provided its technical and other expertise to the
Departments of Commerce and Agriculture during the development of their
Recovery Act grant and loan programs, and our agencies remain in
contact on matters of broadband policy. While the grant and loan
programs were implemented prior to the completion of the National
Broadband Plan, as required by law, I believe that those programs are
complementary to the proposals in the Plan. The plan explicitly
mentions the BTOP program in several places, highlighting how this
first investment in broadband will impact the broadband ecosystem, and
how best to measure and learn from those early investments to improve
decisions in the future. In addition, the Plan emphasizes the
importance of deploying facilities to consumers who do not have access
to broadband or who face other obstacles to adoption, such as
affordability, and recommends a variety of different tools to advance
these goals.
Question 2. As you know, spectrum availability has been of concern
as our Nation's technologies develop. We must be working to find ways
to free up spectrum for new technologies. In the National Broadband
Plan, it is stated that to free up spectrum broadcasters will be asked
to volunteer to give up some of their spectrum (of which they already
gave some up for the digital transition). What is the plan should these
broadcasters not volunteer more of their spectrum?
Answer. I believe, and the staff at the FCC believes, that a
voluntary approach can work, and our goal is to first employ all
possible voluntary mechanisms. We believe a voluntary approach with
proceeds sharing will allow the market to determine the best use of
spectrum, allowing the right amount of spectrum demanded by the market
to flow to its highest valued use, while creating value for everyone in
that chain of stakeholders (broadcasters, consumers, and broadband
providers). We intend to focus our efforts on voluntary mechanisms so
as to best ensure their success.
Question 3. As you know, in recent years, Internet piracy and
intellectual property protection has been a mounting problem. The
National Broadband Plan would be a perfect opportunity o address this
issue. The current plan does not mention piracy and has little mention
of intellectual property protections. Why was there no acknowledgement
in your plan of the piracy problems that plague our entertainment and
software companies online? With the rollout of this plan, almost every
American will have access to broadband. With greater broadband speeds
and availability, what is being done to protect the content from being
stolen?
Answer. The National Broadband Plan recognizes (at page 58) that
``[t]he Internet must be a safe, trusted platform for the lawful
distribution of content.'' The Plan acknowledges (at page 17) that
digital piracy is an ongoing problem. The Plan notes promising
developments in technology to prevent piracy, such as content finger-
printing, and lauds industry-led initiatives to develop guidelines for
dealing with piracy. The Plan does not include any specific
recommendations for ensuring that expanding broadband deployment will
not increase the amount of piracy of copyrighted works. I am hopeful
that continuing advances in technology, development of industry
guidelines, and enforcement of copyright laws will curb piracy without
stifling innovation or overburdening lawful uses of copyrighted works.
Question 4. Do you believe public safety needs or will need more
than 10 MHz of spectrum for voice, video, and data? If yes, by when? If
they do, then why not just allocate the spectrum now? Why should we try
to solve this problem later if we already have the solution in front of
us now? Will it not cost more to solve the problem later and create
problems with interoperability because systems will be on different
spectrum bands?
Answer. Currently there is 10 MHz of dedicated capacity in the 700
MHz band available for use for public safety broadband communications.
This spectrum is available today and, because of its propagation and
other technical attributes, provides a solid platform for deployment of
a nationwide, interoperable public safety broadband network. This 10
MHz of dedicated capacity is the necessary core on which to build the
public safety network and will provide public safety with more than
adequate capacity and performance required to support day-to-day and
emergency communications.
Technology advances in the LTE air-interface standard will likely
make it possible for non-contiguous spectrum to be part of the network.
Accordingly, should additional capacity be required in the future, this
technology, in conjunction with the interoperability requirements
imposed by the FCC's Emergency Response Interoperability Center will
ensure that interoperability is not compromised.
The 700 MHz band, where this spectrum is located, is particularly
exciting as new 4G technologies, such as LTE, are just beginning to be
deployed to support advanced data communications. Public safety, by
being able to deploy their networks now and in the near future, can
capitalize on these technologies and this commercial deployment,
ensuring a technological evolution path and reducing costs by
leveraging these commercial technologies.
More specifically, in deploying its network in this core spectrum,
public safety can enter into incentive-based partnerships with
commercial entities to deploy their network in a cost-effective manner
that utilizes these state-of-the-art commercial 4G technologies and
leverages commercial infrastructure. In this way, public safety will
recognize approximately $9 billion in cost savings for the construction
of the network and potentially tens of billions in savings in operating
costs. Unfortunately, as I will discuss a little later, if the D block
is reallocated to the public safety community, it is likely that these
cost savings will not be recognized because significant cost-
efficiencies will squandered. If this occurs, the mere expense of the
network will make it extremely unlikely that the network will be
nationwide, leaving portions of the country without access to these
critical public safety communications services.
FCC technical staff has spent considerable time and effort ensuring
that the 10 MHz of dedicated spectrum available to public safety will
provide more then adequate capacity and performance for day-to-day and
emergency communications. Our analysis, which we released publicly this
week, demonstrates through the examination of several real-life large-
scale emergencies, that allowing public safety to build out their
broadband network on the core 10 MHz of dedicated spectrum supports
these critical communications requirements. When analyzing capacity, an
important point to keep in mind is that spectrum does not equal
capacity. By deploying advanced, 4G wireless technologies and cellular
network architecture, public safety can achieve much greater capacity
than they have achieved in the past. Further, based on the past
evolutionary trends of commercial technologies, if the public safety
network is deployed utilizing non-proprietary commercial technologies,
capacity and performance of the network is likely to improve in the
same amount of spectrum.
However, we also recognize that it is impossible to plan for the
worst emergency. Accordingly, it is critical to provide public safety
with a backstop of additional capacity for use when they need it such
as when their network is at capacity or otherwise unavailable.
Accordingly, the FCC is planning to shortly initiate a rulemaking
proceeding that will require commercial operators across the 700 MHz
band to provide public safety with roaming and priority access on their
networks at reasonable rates. This means that public safety will have
access to as much as 60 MHz of additional spectrum--far more then the
10 MHz of spectrum available in the D block. Further, unlike the case
of just reallocating the D block, roaming and priority access will
provide public safety with access to resilient networks in case their
network is rendered unavailable.
Still, there are additional pieces to ensure adequate capacity and
performance. First, our cost model recognizes and captures the need for
deployable caches of communications equipments, such as cell towers on
wheels, to ensure that the public safety community is able to
supplement its network during the worst emergencies.
Second, we have also recommended that states and localities should
include in their building codes requirements for the installation of
in-building transmitters.
Question 5. The National Broadband Plan seems to place a heavy
emphasis on public safety having priority access to commercial networks
to augment the 10 MHz of dedicated public safety broadband spectrum.
How can you be sure that commercial carriers will be willing to provide
that access?
Answer. The Commission will soon commence a proceeding to require
commercial networks to offer public safety users priority access and
roaming capabilities at reasonable rates. This will ensure that
critical communications needs can be met even when public safety
broadband networks are at capacity or unavailable.
______
Response to Written Questions Submitted by Hon. David Vitter to
Hon. Julius Genachowski
Question 1. The FCC's recently released National Broadband Plan
makes numerous references to several internal reports prepared by the
Omnibus Broadband Team as support for its recommendations.
The Broadband Availability Gap Report, cited 22 times
Broadband Performance Report
Spectrum Reclamation: Options for Broadcast Spectrum Report
The Public Safety Broadband Wireless Network Report
I understand that these reports still have not been made available.
Is this true, when do you expect to release these reports so Congress
and the public can begin the process of reviewing the analysis
underlying the recommendations contained in the Plan?
Answer. The Broadband Availability Gap Report was released April
21, 2010. The Public Safety Broadband Wireless Network Report was
released April 23, 2010. They are available for download at http://
www.broadband.gov/plan/broadband-working-reports-technical-papers.html.
The FCC has already held an open workshop on the Broadband
Availability Gap Report to present the broadband team's analysis and
take questions from the public.
The release dates for the Spectrum Reclamation: Options for
Broadcast Spectrum Report and the Broadband Performance Report are
forthcoming.
Question 2. I know the plan's goal is to reach 100 million
households with 100 Mbps service. Some analysts believe that we may be
on path to reach this goal with current market conditions. Wouldn't it
be preferable to let the market investment work instead changing the
broadband regulatory structure in a way that many think could provide
disincentives to investment?
Answer. I agree that we should let the market work where it can
effectively promote innovation, investment, deployment, and provide
consumers with reasonable, affordable choices. As the Commission works
through the implementation of the National Broadband Plan
recommendations, we will take care to ensure that our policies
encourage investment and deployment, promote innovation, and allow
consumers to enjoy the benefits of next generation broadband services.
______
Response to Written Questions Submitted by Hon. Sam Brownback to
Hon. Julius Genachowski
Question 1. In response to a question I asked you during this
committee's consideration of your nomination, you stated that you
``agree that unthinking or heavy-handed regulation always carries the
risk of burdening innovation, investment, and dynamism--and that the
FCC must be vigilant in guarding against such an approach.''
I have therefore been surprised about several initiatives you have
taken, or are considering since becoming Chairman. You launched into a
rulemaking proceeding on network neutrality before having gathered any
facts regarding whether there is a problem that needs a regulatory
solution. Now that the D.C. Circuit has rejected the FCC's assertion of
authority to impose network management regulations on broadband
providers, you are allegedly considering reclassifying broadband
services as telecommunications services, saddling such services with
common carrier regulations. And some of your recommendations in the
National Broadband Plan, such as fiber unbundling, contemplate
eradicating the extremely successful broadband policies that began
under Chairman Kennard in the Clinton Administration.
I was glad during your confirmation process that you recognized
that heavy-handed regulation runs ``the risk of burdening innovation,
investment, and dynamism.'' But you seem to be heading in that very
direction, despite the impact that such regulation would have on your,
and the Obama Administration's, broadband goals. How are you going to
achieve ubiquitous broadband deployment when, by your own admission,
you are risking investment by imposing burdensome regulations?
Answer. Promoting continued investment and job creation, both in
the core broadband networks and through Internet-based services and
applications that ride on such networks, is a key priority for the FCC
and a key focus of the National Broadband Plan. On June 17, the
Commission adopted a Notice of Inquiry on a Legal Framework for
Broadband. This Notice initiates an agency proceeding to seek public
comment on how the Commission should best address the challenge that
the D.C. Circuit's Comcast decision has handed us, including how the
agency can foster predictability and promote innovation and investment.
It seeks comment on all options, and invites any ideas for how the
Commission should proceed, including: maintaining the current
``information service'' classification of services such as cable modem
and DSL Internet access; classifying broadband Internet connectivity
service as a ``telecommunications service'' to which all the
requirements of Title II of the Communications Act would apply; and a
``third way''--similar to the highly successful approach that has been
used for cell phone services since 1993--under which the Commission
would identify the Internet connectivity service that is offered as
part of wired broadband Internet service as a telecommunications
service and forbear from applying all provisions of Title H other than
the small number that are needed to implement fundamental universal
service, competition, and consumer protection policies.
Question 2. If broadband were to be reclassified as
telecommunications service, do you think broadband service providers
would increase investment in their networks? Please explain your
answer.
Answer. These issues are addressed in my answer to Question 1 above
and in the statements released by myself (Genachowski Statement) and
the FCC's General Counsel, Austin Schlick (Schlick Statement), on May
6, 2010, concerning the ``Third Way.'' Copies are attached for your
convenience. I believe the ``Third Way'' I have proposed, would
encourage investment in broadband networks by providing regulatory
certainty, avoiding needless regulation, and enabling the provision of
universal service support for broadband deployment. I would also note
that the Third Way is modeled on the light touch regulatory treatment
for the wireless industry that many have cited as pro-investment and
pro-innovation. I remain open to other ideas that will achieve the same
objective and provide a sound legal framework, and the Notice of
Inquiry adopted at our June 17 Open Meeting seeks comment on all
possible approaches, including maintaining the current information
services classification for broadband Internet services.
Question 3. Do you believe that a reclassification of broadband
services would survive a court challenge? Are you willing to endure
years of uncertainty waiting for an answer?
Answer. I am confident that any decision the FCC issues that
addresses or relies on Commission authority to implement broadband
policies will be challenged in court. For the reasons given in the May
6, 2010 statement by the FCC's General Counsel, I believe that
classification of the transmission component of wireline broadband
Internet access service as a telecommunications service would survive
judicial review. See Schlick Statement at 6-7.
Question 4. In the Comcast case, the D.C. Circuit held that the FCC
had not demonstrated that its regulation of the network management
activities of ISPs was reasonably ancillary to express authority
provided to the FCC by Congress. But the D.C. Circuit reiterated its
two-part test that the Commission is permitted to exercise ancillary
authority when: (1) Title I covers a particular entity or activity and
(2) Commission action is ``reasonably ancillary to the Commission's
effective performance of its statutorily mandated responsibilities.''
Do you agree that the D.C. Circuit's decision does not preclude the
Commission from exercising ancillary jurisdiction in the future as long
as the agency ties such authority to its ``statutorily mandated
responsibilities''?
Answer. I agree that the Comcast decision does not preclude the
Commission from exercising ancillary authority to effectuate
statutorily mandated responsibilities. The Notice of Inquiry adopted on
June 17, seeks comment on the strongest arguments for use of ancillary
authority to realize the FCC's mission for broadband communications.
Question 5. In Comcast, the D.C. Court concluded that ``[b]y
leaping from Brand X's observation that the Commission's ancillary
authority may allow it to impose some kinds of obligations on cable
Internet providers to a claim of plenary authority over such providers,
the Commission runs afoul of Southwestern Cable and Midwest Video I.''
Doesn't this mean that the D.C. Circuit acknowledges that the FCC can
exercise ancillary authority to impose certain rules, but that the FCC
must demonstrate that the imposition of such rules is reasonably
ancillary to the agency's statutorily mandated responsibilities?
Answer. See Response to Question 3 above.
Question 6. According to Commissioner McDowell's March testimony at
the House Energy and Commerce Committee, ``[m]ore than half of all
Americans have a choice of five wireless providers. Ninety-four percent
have a choice of four. Similarly, we lead the world in 3G build-out and
adoption.'' In addition, Commissioner McDowell asserts that ``[n]ot
only does the United States have one-third of the world's market share
of ``mobile apps,'' but the American mobile app market has grown over
500 percent since 2007.'' Given these facts, how did the report
conclude that the United States lags in mobile innovation?
Answer. The National Broadband Plan stated that ``[t]he United
States maintains the greatest tradition of innovation and
entrepreneurship in the world--one that combines creativity with
engineering to produce world-leading applications, devices and content,
as well as the businesses that bring them to market.''
However, innovation will be constrained if the FCC does not make
additional spectrum available. As the Plan states, ``Mobile broadband
is growing at unprecedented rates. . . playing an increasingly
important role in our lives and our economy. Mobile broadband is the
next great challenge and opportunity for the United States. It is a
nascent market in which the United States should lead.'' Today, the FCC
has only 50 megahertz of spectrum in the pipeline that it can assign
for broadband use, just a fraction of the amount that will be necessary
to match growing demand. As a result, companies representing 5 percent
of the U.S. economy asked the FCC to make more spectrum available for
mobile broadband, saying that ``without more spectrum, America's global
leadership in innovation and technology is threatened.''
If we do not make more spectrum available, scarcity of mobile
broadband could mean higher prices, poor service quality, an inability
for the United States to compete internationally, depressed demand, and
ultimately, a drag on innovation.
The Plan concludes that ``[b]y any measure, innovation is thriving
in mobile and computing devices.'' I look forward to working with
Congress, the industry and stakeholders to ensure that the United
States has the spectrum it needs to lead the world in mobile
innovation, with the fastest and most extensive wireless networks of
any nation.
______
The Third Way: A Narrowly Tailored Broadband Framework
Chairman Julius Genachowski--Federal Communications Commission--May 6,
2010
Many have asked about the FCC's next steps in view of the recent
decision in the Comcast case. I'll describe here a path forward, which
will begin with seeking public comment on a post-Comcast legal
foundation for the FCC's approach to broadband communications services.
The goal is to restore the broadly supported status quo consensus that
existed prior to the court decision on the FCC's role with respect to
broadband Internet service.
This statement describes a framework to support policies that
advance our global competitiveness and preserve the Internet as a
powerful platform for innovation, free speech, and job creation. I
remain open to all ideas on the best approach to achieve our country's
vital goals with respect to high-speed broadband for all Americans, and
the Commission proceeding to follow will seek comment on multiple legal
theories and invite new ideas.
The FCC's Mission
More than 75 years ago, Congress created the Federal Communications
Commission with an explicit mission: ``to make available, so far as
possible, to all people of the United States . . . A rapid, efficient,
Nation-wide, and world-wide wire and radio communications service with
adequate facilities at reasonable charges, for the purpose of the
national defense, [and] for the purpose of promoting the safety of life
and property through the use of wire and radio communication.''
In the decades since, the technologies of communications have
changed and evolved--from telephone, radio, and broadcast TV to cable,
satellite, mobile phones, and now broadband Internet. With the guidance
of Congress, the Commission has tailored its approach to each of these
technologies. But the basic goals have been constant: to encourage
private investment and the building of a communications infrastructure
that reaches all Americans wherever they live; to pursue meaningful
access to that infrastructure for economic and educational opportunity
and for full participation in our democracy; to protect and empower
consumers; to promote competition; to foster innovation, economic
growth, and job creation; and to protect Americans' safety.
The Consensus Understanding of the FCC's Role with Respect to Broadband
A challenge for the FCC in recent years has been how to apply the
time-honored purposes of the Communications Act to our 21st Century
communications platform--broadband Internet--access to which is
generally provided by the same companies that provide telephone and
cable television services.
Broadband is increasingly essential to the daily life of every
American. It is fast becoming the primary way we as Americans connect
with one another, do business, educate ourselves and our children,
receive health care information and services, and express our opinions.
As a unanimous FCC said a few weeks ago in our Joint Statement on
Broadband, ``Working to make sure that America has world-leading high-
speed broadband networks--both wired and wireless--lies at the very
core of the FCC's mission in the 21st Century.''
Over the past decade and a half, a broad consensus in the public
and private sectors has developed about the proper role and authority
for the FCC regarding broadband communications. This bipartisan
consensus, which I support, holds that the FCC should adopt a
restrained approach to broadband communications, one carefully balanced
to unleash investment and innovation while also protecting and
empowering consumers.
It is widely understood--and I am of the view--that the extreme
alternatives to this light-touch approach are unacceptable. Heavy-
handed prescriptive regulation can chill investment and innovation, and
a do-nothing approach can leave consumers unprotected and competition
unpromoted, which itself would ultimately lead to reduced investment
and innovation.
The consensus view reflects the nature of the Internet itself as
well as the market for access to our broadband networks. One of the
Internet's greatest strengths--its unprecedented power to foster
technological, economic, and social innovation--stems in significant
part from the absence of any central controlling authority, either
public or private. The FCC's role, therefore should not involve
regulating the Internet itself.
Consumers do need basic protection against anticompetitive or
otherwise unreasonable conduct by companies providing the broadband
access service (e.g., DSL, cable modem, or fiber) to which consumers
subscribe for access to the Internet. It is widely accepted that the
FCC needs backstop authority to prevent these companies from
restricting lawful innovation or speech, or engaging in unfair
practices, as well as the ability to develop policies aimed at
connecting all Americans to broadband, including in rural areas.
The Broadband Policy Agenda
Consistent with this consensus view of the FCC's role, Congress
last year directed the FCC to develop America's first National
Broadband Plan, which we delivered in March. And I have described over
the past months the policy initiatives I believe are of crucial
importance to our global competitiveness, job creation, and broad
opportunity. These include:
Extending broadband communications to all Americans, in
rural and urban America and in between, by transforming the $9
billion Universal Service Fund from supporting legacy telephone
service to supporting broadband communications service;
Protecting consumers and promoting healthy competition by,
for example, providing greater transparency regarding the
speeds, services, and prices consumers receive, and ensuring
that consumers--individuals as well as small businesses--are
treated honestly and fairly;
Empowering consumers to take control of their personal
information so that they can use broadband communications
without unknowingly sacrificing their privacy;
Lowering the costs of investment--for example, through smart
policies relating to rights-of-way--in order to accelerate and
extend broadband deployment;
Advancing the critical goals of protecting Americans against
cyber-attacks, extending 911 coverage to broadband
communications, and otherwise protecting the public's safety;
and
Working to preserve the freedom and openness of the Internet
through high-level rules of the road to safeguard consumers'
right to connect with whomever they want; speak freely online;
access the lawful products and services of their choice; and
safeguard the Internet's boundless promise as a platform for
innovation and communication to improve our education and
health care, and help deliver a clean energy future.
At the same time, I have been clear about what the FCC should not
do in the area of broadband communications: For example, FCC policies
should not include regulating Internet content, constraining reasonable
network management practices of broadband providers, or stifling new
business models or managed services that are pro-consumer and foster
innovation and competition. FCC policies should also recognize and
accommodate differences between management of wired networks and
wireless networks, including the unique congestion issues posed by
spectrum-based communications. The Internet has flourished and must
continue to flourish because of innovation and investment throughout
the broadband ecosystem: at the core of the network, at its edge, and
in the cloud.
These policies reflect an essential underlying regulatory
philosophy:
A strong belief in the free market and in private investment
as essential and powerful engines of economic growth;
An embrace of the view that a healthy return-on-investment
is a necessary and desirable incentive to risk-taking and
deployment of capital;
A recognition of the powerful role entrepreneurs,
innovators, startups and small businesses must play in fueling
American economic success; and
An understanding that government has a vital but limited
role in advancing common goals, for example by helping tackle
core infrastructure and public safety challenges; providing
basic rules of the road to enable markets to work fairly;
acting in a properly calibrated way when necessary to protect
consumers and promote competition, investment, and innovation--
and otherwise getting out of the way of the entrepreneurial
genius and free market that is America's greatest competitive
advantage.
Implications of Comcast v. FCC
The recent court opinion in Comcast v. FCC does not challenge the
longstanding consensus about the FCC's important but restrained role in
protecting consumers, promoting competition, and ensuring that all
Americans can benefit from broadband communications. Nor does it
challenge the commonsense policies we have been pursuing.
But the opinion does cast serious doubt on the particular legal
theory the Commission used for the past few years to justify its
backstop role with respect to broadband Internet communications. The
opinion therefore creates a serious problem that must be solved so that
the Commission can implement important, commonsense broadband policies,
including reforming the Universal Service Fund to provide broadband to
all Americans, protecting consumers and promoting competition by
ensuring transparency regarding broadband access services, safeguarding
the privacy of consumer information, facilitating access to broadband
services by persons with disabilities, protecting against cyber-
attacks, ensuring next-generation 911 services for broadband
communications, and preserving the free and open Internet.
The legal theory that the Comcast opinion found inadequate has its
roots in a series of controversial decisions beginning in 2002 in which
the Commission decided to classify broadband Internet access service
not as a ``telecommunications service'' for purposes of the
Communications Act, but as something different--an ``information
service.''
As a result of these decisions, broadband became a type of service
over which the Commission could exercise only indirect ``ancillary''
authority, as opposed to the clearer direct authority exercised over
telecommunications services. Importantly, at the time, supporters of
this ``information services'' approach clearly stated that the FCC's
so-called ``ancillary'' authority would be more than sufficient for the
Commission to play its backstop role with respect to broadband access
services and pursue all sensible broadband policies.
The Commission's General Counsel and many other lawyers believe
that the Comcast decision reduces sharply the Commission's ability to
protect consumers and promote competition using its ``ancillary''
authority, and creates serious uncertainty about the Commission's
ability, under this approach, to perform the basic oversight functions,
and pursue the basic broadband-related policies, that have been long
and widely thought essential and appropriate.
This undermining of settled understandings about the government's
role in safeguarding our communications networks is untenable. Since
the decision, lawyers from every quarter of the communications
landscape have been debating a difficult and technical legal question:
What is the soundest and most appropriate legal grounding to let the
FCC carry out what almost everyone agrees to be necessary functions
regarding broadband communications?
The Conventional Options
Two primary options have been debated since the Comcast decision:
One, the Commission could continue relying on Title I ``ancillary''
authority, and try to anchor actions like reforming universal service
and preserving an open Internet by indirectly drawing on provisions in
Title II of the Communications Act (e.g., sections 201, 202, and 254)
that give the Commission direct authority over entities providing
``telecommunications services.''
Two, the Commission could fully ``reclassify'' Internet
communications as a ``telecommunications service,'' restoring the FCC's
direct authority over broadband communications networks but also
imposing on providers of broadband access services dozens of new
regulatory requirements.
I have serious reservations about both of these approaches.
The FCC General Counsel advises that under the first option,
continuing to pursue policies with respect to broadband Internet access
under the ancillary authority approach has a serious risk of failure in
court. It would involve a protracted, piecemeal approach to defending
essential policy initiatives designed to protect consumers, promote
competition, extend broadband to all Americans, pursue necessary public
safety measures, and preserve the free and open Internet.
The concern is that this path would lead the Commission straight
back to its current uncertain situation--and years will have passed
without actually implementing the key policies needed to improve
broadband in America and enhance economic growth and broad opportunity
for all Americans.
Meanwhile, the second option, fully reclassifying broadband
services as ``telecommunications services'' and applying the full suite
of Title II obligations, has serious drawbacks. While it would clarify
the legal foundation for broadband policy, it would also subject the
providers of broadband communications services to extensive regulations
ill-suited to broadband. Title II, for example, includes measures that,
if implemented for broadband, would fail to reflect the long-standing
bipartisan consensus that the Internet should remain unregulated and
that broadband networks should have only those rules necessary to
promote essential goals, such as protecting consumers and fair
competition.
Accordingly, I directed the FCC General Counsel and staff to
identify an approach that would restore the status quo--that would
allow the agency to move forward with broadband initiatives that
empower consumers and enhance economic growth, while also avoiding
regulatory overreach. In short, I sought an approach consistent with
the longstanding consensus regarding the limited but essential role
that government should play with respect to broadband communications.
I am pleased the General Counsel and staff have identified a third-
way approach--a legal anchor that gives the Commission only the modest
authority it needs to foster a world-leading broadband infrastructure
for all Americans while definitively avoiding the negative consequences
of a full reclassification and broad application of Title II.
A Third Way
As General Counsel Austin Schlick has explained more fully in his
statement today, under this narrow and tailored approach, the
Commission would:
Recognize the transmission component of broadband access
service--and only this component--as a telecommunications
service;
Apply only a handful of provisions of Title II (Sections
201, 202, 208, 222, 254, and 255) that, prior to the Comcast
decision, were widely believed to be within the Commission's
purview for broadband;
Simultaneously renounce--that is, forbear from--application
of the many sections of the Communications Act that are
unnecessary and inappropriate for broadband access service; and
Put in place up-front forbearance and meaningful boundaries
to guard against regulatory overreach.
This approach has important virtues.
First, it will place Federal policy regarding broadband
communications services, including the policies recommended in the
National Broadband Plan, on the soundest legal foundation, thereby
eliminating as much of the current uncertainty as possible. From
reorienting the Universal Service Fund to support broadband in rural
America, to adopting focused consumer protection and competition
policies, to promoting public safety in a broadband world, this
approach would provide a solid legal basis. In particular, it would
allow broadband policies to rest on the Commission's direct authority
over telecommunications services while also using ancillary authority
as a fallback.
Second, the approach is narrow. It will treat only the transmission
component of broadband access service as a telecommunications service
while preserving the longstanding consensus that the FCC should not
regulate the Internet, including web-based services and applications,
e-commerce sites, and online content.
Third, this approach would restore the status quo. It would not
change the range of obligations that broadband access service providers
faced pre-Comcast. It would not give the FCC greater authority than the
Commission was understood to have pre-Comcast. And it would not change
established policy understandings at the FCC, such as the existing
approach to unbundling or the practice of not regulating broadband
prices or pricing structures. It would merely restore the longstanding
deregulatory--as opposed to ``no-regulatory'' or ``over-regulatory''--
compact.
Fourth, the approach would establish meaningful boundaries and
constraints to prevent regulatory overreach. The FCC would invoke only
the few provisions necessary to achieve its limited but essential
goals. Notably, these are the very same provisions (sections 201, 202,
and 254, for example) that telephone and cable companies agree the FCC
should invoke, albeit indirectly under an ``ancillary authority''
approach. The Commission would take steps to give providers and their
investors confidence and certainty that this renunciation of regulatory
overreach will not unravel while also giving consumers, small
businesses, entrepreneurs and innovators the confidence and certainty
they need and deserve. Since Congress gave the Commission forbearance
authority 17 years ago, the Commission has never reversed or undone a
forbearance decision.
Fifth, the approach is familiar and has worked well in an analogous
context--wireless communications. In its approach to wireless
communications, Congress mandated that the FCC subject wireless
communications to the same Title II provisions generally applicable to
telecommunications services while also directing that the FCC consider
forbearing from the application of many of these provisions to the
wireless marketplace. The Commission did significantly forbear, and the
telecommunications industry has repeatedly and resoundingly lauded this
approach as well-suited to an emerging technology and welcoming to
investment and innovation. In short, the proposed approach is already
tried and true.
Sixth, this approach would allow the Commission to move forward on
broadband initiatives that are vital for global competitiveness and job
creation, even as it explores with Congress and stakeholders the
possibility of legislative clarification of the Communications Act. The
Communications Act as amended in 1996 anticipated that the FCC would
have an ongoing duty to protect consumers and promote competition and
public safety in connection with broadband communications. Should
Congressional leaders decide to take up legislation in the future to
clarify the statute and the agency's authority regarding broadband, the
agency stands ready to be a resource to Congress as it considers any
such legislative measures. In the interim, however, this approach would
ensure that key initiatives to address pressing national challenges can
move forward.
I will ask my Commission colleagues to join me soon in launching a
public process, seeking comment on this narrow and tailored approach.
The proceeding will seek comment regarding the Title I and Title II
options discussed above, will seek input on important questions such as
whether wired and wireless broadband access should be treated
differently in this context, and will invite new ideas. As we move
forward, my focus will be on the best method for restoring the shared
understanding of FCC authority that existed before the Comcast decision
and for putting in place a solid legal foundation for achieving the
policy goals that benefit consumers and our economy in the most
effective and least intrusive way.
The state of our economy and recent events are reminders both of
the need to be cautious and the necessity of a regulatory backstop to
protect the American people. I stand ready to explore all constructive
ideas and expect those who engage with us to do so constructively as
well. The issues presented by the Comcast decision are a test of
whether Washington can work--whether we can avoid strawman arguments
and the descent into hyperbole that too often substitute for genuine
engagement.
The Comcast decision has created a serious problem. I call on all
stakeholders to work with us productively to solve the problem the
Comcast decision has created in order to ensure a solid legal
foundation for protecting consumers, promoting innovation and job
creation, and fostering a world-leading broadband infrastructure for
all Americans.
______
A Third Way Legal Framework for Addressing the Comcast Dilemma
Austin Schlick, General Counsel--Federal Communications Commission--May
6, 2010
Chairman Genachowski has asked me to describe the legal thinking
behind the narrow and tailored approach to broadband communications
services that he introduced for public discussion today. It springs
from a longstanding consensus about how the FCC should approach
Internet access services; from a recent court decision that casts
serious doubt on the FCC's current strategy for implementing that
consensus; and from a belief that Congress's laws and the Supreme
Court's decisions provide a way to overcome this new challenge.
The Policy Consensus. As the Chairman explains in his statement,
general agreement has developed about the agency's light-touch role
with respect to broadband communications. This bipartisan agreement
spans the FCC Chairmen and Commissioners, Congress, and industry, and
has three elements:
1. The Commission does not regulate the Internet. The policy of
preserving the Internet as a generally unregulated, free-market
forum for innovation, speech, education, and job creation finds
expression in (among other provisions) section 230 of the
Communications Act, which states Congress's conclusion that
``[t]he Internet and other interactive computer services have
flourished, to the benefit of all Americans, with a minimum of
government regulation.'' (47 U.S.C. 230(a)(4))
2. Dial-up Internet access service (used by about 5 million
American households essentially to ``call'' the Internet) is
subject to the regulatory rules for telephone service. This
policy protects the 5.6 million American households that depend
on ordinary telephone service to reach the Internet.
3. For the broadband access services that a majority of on-line
consumers use to reach the Internet, the Commission refrains
from regulation when possible, but will step in when necessary
to protect consumers and fair competition. This balanced
approach to broadband access services was expressed most
clearly on September 23, 2005, when a unanimous Commission
released two companion decisions addressing broadband Internet
access service. The first decision that day, generally known as
the Wireline Broadband Order, ``established a minimal
regulatory environment for wireline broadband Internet access
services to benefit American consumers and promote innovative
and efficient communications.'' (Para. 1) It reclassified
telephone companies' Internet access offerings as indivisible
``information services'' subject only to potential regulation
under the doctrine of ancillary authority. (``Ancillary
authority'' refers to the Commission's discretion under the
statutory provisions that establish the agency (Title I of the
Communications Act) to adopt measures that are ``reasonably
ancillary to the effective performance of the Commission's
various responsibilities.'' United States v. Southwestern Cable
Co., 392 U.S. 157 (1962).) The companion decision, known as the
Internet Policy Statement, adopted principles for an open
Internet and expressed confidence that the Commission had the
``jurisdiction necessary to ensure that providers of
telecommunications for Internet access . . . are operated in a
neutral manner.'' (Para. 4) As recently as March 16 of this
year, the current Commission--again unanimously--adopted a
Joint Statement on Broadband reaffirming that ``[e]very
American should have a meaningful opportunity to benefit from
the broadband communications era.'' (Para. 3)
These three basic principles reflect the Commission's commitment to
a policy that promotes investment in the Internet and broadband
technologies, and ensures basic protections for businesses and
consumers when they use the on-ramps to the Internet.
The Comcast Case. A month ago, the United States Court of Appeals
for the D.C. Circuit issued an opinion that raises serious questions
about the Commission's ability to implement the consensus policy
effectively, absent some responsive administrative action. That case is
Comcast v. FCC, the so-called Comcast/BitTorrent case. The case began
in 2007, when Internet users discovered that Comcast was secretly
degrading its customers' lawful use of BitTorrent and other peer-to-
peer applications. In 2008, the FCC issued an order finding Comcast in
violation of Federal Internet policy as stated in various provisions of
the Communications Act and prior Commission decisions.
The D.C. Circuit held that the Commission's 2008 order lacked a
sufficient statutory basis, because it did not identify ``any express
statutory delegation of authority'' for putting an end to Comcast's
undisclosed interference with its own customers' communications. The
narrow holding is that because the Commission, in 2002, classified
cable modem offerings entirely as ``information services'' (a category
not subject to any specific statutory rules, but only the agency's
ancillary authority under Title I of the Act), it could not, in 2008,
enforce Title II's nondiscrimination and consumer protection principles
in the cable modem context. The underlying legal principle is that,
when the Commission classified residential broadband services as solely
and entirely information services despite their substantial
transmission component, the Commission unintentionally went too far in
limiting its ability to protect consumers and small businesses.
The opinion recognizes the Commission's continued ability to adopt
rules concerning services Congress specifically addressed in the
Communications Act--wireline and wireless telephony, broadcasting, and
cable and satellite TV--and those rules may incidentally benefit the
Internet. But, under Comcast, the FCC's 2002 classification decision
greatly hampers its ability to accomplish a task the Commission
unanimously endorsed in 2005: ``ensur[ing] that broadband networks are
widely deployed, open, affordable, and accessible to all consumers.''
(Internet Policy Statement)
The Commission's Options. Comcast undermined only the particular
legal foundation used in recent years to support the longstanding
consensus regarding broadband policy, not the consensus itself. In
particular, the case casts no doubt on the wisdom of the three-part
framework that has encouraged the development of diverse and innovative
Internet applications, content, and services, as well as faster and
more widely available access connections. The Commission's focus is on
putting the consensus approach back on a sound legal footing. The
public debate surrounding the Comcast decision has focused on two
principal options, but there is a third approach that may provide a
more tailored and sustainable alternative.
1. Title I: Stay the Course
Some big cable and telephone companies suggest the agency should
stick with the information service classification, try to adapt its
policies to the new restrictions announced by the Comcast court, and
see how it goes. This is a recipe for prolonged uncertainty. Any action
the Commission might take in the broadband area--be it promoting
universal service, requiring accurate and informative consumer
disclosures, preserving free and open communications, ensuring
usability by persons with disabilities, preventing misuse of customers'
private information, or strengthening network defenses against
cyberattacks--would be subject to challenge on jurisdictional grounds
because the relevant provisions of the Communications Act would not
specifically address broadband access services. Paradoxically, the FCC
would be on safe legal ground only to the extent its actions regarding
emerging broadband services were intended to affect traditional
services like telephone and television.
Even if the Commission won every case, there would be
implementation delays of months or years while legal challenges worked
their way through the courts--eons in what the Ninth Circuit has called
the ``quicksilver technological environment'' of broadband. (AT&T Corp.
v. City of Portland, 216 F.3d 871, 876 (9th Cir. 2000)). The extended
uncertainty would deprive investors, innovators, and consumers of
needed clarity about the rules of the road. Because the stay-the-course
proposal does not allow the Commission directly to promote broadband
deployment and adoption or protect broadband competition and consumers,
it would not support the consensus status quo that existed before
Comcast.
2. Title II: Telephone-Style Regulation of Broadband Internet Services
A second option is to reclassify broadband Internet access services
as telecommunications services and apply the full suite of provisions
established in Title II of the Communications Act, many of which were
developed decades ago for telephone networks. That approach would put
the Commission on a strong jurisdictional footing in future broadband
rulemakings and adjudications, because broadband Internet services
would be governed directly by Title II. But this full Title II approach
would trigger a detailed regulatory regime (comprising 48 sections of
the United States Code) that the Commission has successfully refrained
from applying to broadband Internet services. Although there would be
clear rules of the road for broadband, those rules would be
inconsistent with the current consensus approach of regulatory
restraint.
3. A Third Way: Placing the Consensus Policy Framework on a Sound Legal
Footing
There is a third legal path that fits better with the Commission's
settled, deregulatory policy framework for broadband communications
services. It begins at the Supreme Court. In National Cable and
Telecommunications Association v. Brand X Internet Services, Inc., a
majority of the Justices deferred to the Commission, and permitted its
information service classification of cable modem offerings, because
the Communications Act ``leaves Federal telecommunications policy in
this technical and complex area to be set by the Commission.'' Justice
Scalia, joined by Justices Souter and Ginsburg, concluded in a strong
dissent that the ``computing functionality'' and broadband transmission
component of retail Internet access service must be acknowledged as
``two separate things.'' The former involves unregulated information
services while the latter is a telecommunications service. The dissent
therefore would have held that the Commission's information service
classification of cable broadband Internet access service was an
unreasonable and unlawful interpretation of the Communications Act.
As discussed in detail below, adopting Justice Scalia's bifurcated
view of broadband Internet access service is entirely consistent with
(although not compelled by) the Brand X majority opinion. This course
would also sync up the Commission's legal approach with its policy of
(i) keeping the Internet unregulated while (ii) exercising some
supervision of access connections. The provisions of Title II would
apply solely to the transmission component of broadband access service,
while the information component would be subject to, at most, whatever
ancillary jurisdiction may exist under Title I.
In addition to narrowing the applicability of Title II, the Scalia
approach enables the Commission to use the powerful deregulatory tool
Congress provided specifically for tailoring Title II's requirements to
the Internet Age, and thereby establishing appropriately confined
boundaries for regulation. When Congress amended the Communications Act
in 1996, most consumers reached the Internet using dial-up service,
subject then (as it is now) to Title II. Cable modem service was
emerging, though, and telephone companies were beginning to offer DSL
broadband connections for Internet access under Title II. Aware of the
changing landscape, Congress gave the FCC authority and responsibility
via section 10 of the Communications Act to ``forbear'' from applying
telecommunications regulation, so that the new services are not subject
to needlessly burdensome regulations. And in section 706 of the
Telecommunications Act of 1996 (47 U.S.C. 1302), Congress directed the
FCC to use its new forbearance power to ``encourage the deployment on a
reasonable and timely basis of advanced telecommunications capability
to all Americans.''
The upshot is that the Commission is able to tailor the
requirements of Title II so that they conform precisely to the policy
consensus for broadband transmission services. Specifically, the
Commission could implement the consensus policy approach--and maintain
substantively the same legal framework as under Title I--by forbearing
from applying the vast majority of Title II's 48 provisions to
broadband access services, making the classification change effective
upon the completion of forbearance, and enforcing a small handful of
remaining statutory requirements. As few as six provisions could do the
job:
Sections 201, 202, and 208. These fundamental provisions
collectively forbid unreasonable denials of service and other unjust or
unreasonable practices, and allow the Commission to enforce the
prohibition. Long before the Comcast decision, access providers
supporting an information service classification made clear that they
did not seek to avoid enforcement of these fair-dealing principles:
In December 2000, Cox commented in the Cable Modem docket
that ``a Title I classification ensures that the Commission has
ample ability and authority to implement rules to correct any
market failures or other policy concerns about cable data
services that might develop in the future.''
In May 2002, Verizon agreed in the Wireline Broadband
proceeding that ``classification of broadband under Title I
[would not] lead to any erosion of the consumer protections
provisions of the Communications Act.''
In July 2003, SBC (now AT&T) noted in the same docket that
Title I classification of broadband Internet access services
would allow the Commission ``to intercede at some later point
if necessary to protect consumers.''
After Comcast, the commonsense consensus that there should not be
unreasonable conduct by broadband access service providers remains. In
the Commission's pending Open Internet Proceeding, for example, Comcast
has urged ``a standard based on `unreasonable and anticompetitive
discrimination.' '' Sprint Nextel has commented that ``[t]he
unreasonable discrimination standard contained in Section 202(a) of the
Act contains the very flexibility the Commission needs to distinguish
desirable from improper discrimination.'' And AT&T has concurred that
the ``unreasonable discrimination'' prohibition in section 202(a) ``is
both administrable and indispensable to the sound administration of the
Nation's telecommunications laws.''
Applying sections 201, 202, and 208 to broadband access service
would hold broadband access providers to standards they agree should be
met and would address the specific problem that sparked the case--
secret interference with subscribers' lawful Internet transmissions.
Applying a few other Comcast sections of Title II would allow the
Commission to address other recognized issues as well.
Section 254. Section 254 requires the Commission to pursue policies
that promote universal service goals including ``[a]ccess to advanced
telecommunications and information services . . . in all regions of the
Nation.'' In the Joint Statement on Broadband issued earlier this year,
the Commission called for reform of the universal service program to
``emphasize the importance of broadband.'' The Title I/information
services model used by the Commission actually undermines
accomplishment of this goal, because universal service support is
generally available only for telecommunications services: The law
defines ``universal service'' as ``an evolving level of
telecommunications services the Commission shall establish
periodically'' (emphasis added). Industry agrees this is a problem.
AT&T (in a January 2010 white paper) and the cable industry (in a March
2010 letter) have both proposed untested theories they think might
permit universal support for broadband under Title I. Recognizing
broadband transmission as a separable telecommunications service would
definitively solve the problem.
Section 222. Title II requires providers of telecommunications
services to protect the confidential information they receive in the
course of providing service. These protections are another part of the
consensus policy framework for broadband access. A unanimous Commission
addressed privacy in the 2005 Wireline Broadband Order, stating that
``[c]onsumers' privacy needs are no less important when consumers
communicate over and use broadband Internet access than when they rely
on [telephone] services'' (para. 148), and that it had jurisdiction to
enforce this norm (para. 146). As early as 1987, ``long before Congress
enacted section 222 of the Act, the Commission had recognized the need
for privacy requirements associated with the provision of enhanced
[i.e., information] services'' and established rules for telephone
companies to protect ``legitimate customer expectations of
confidentiality'' as well as other companies' confidential business
information. (Id. Para. 149 and n.447).
Section 255. Telecommunications service providers and providers of
telecommunications equipment or customer premises equipment must make
their services and equipment accessible to individuals with
disabilities, unless not reasonably achievable. The Wireline Broadband
Order addressed this requirement as well. Again, although the
Commission was there adopting the Title I legal framework, it held fast
to the Title II rule, promising to ``exercise our Title I ancillary
jurisdiction to ensure achievement of important policy goals of section
255.'' (Para. 123) The Joint Statement on Broadband similarly provides
that disabilities should not stand in the way of Americans' access to
broadband. (Para. 3)
The Wireless Experience. Although it would be new for broadband,
this third way is a proven success for wireless communications. In
1993, Congress addressed the minimum safeguards necessary for then-
emerging commercial mobile radio services (CMRS), such as cell phone
service. Congress specified in a new section 332(c) of the
Communications Act that Title II applies to CMRS, but the Commission
may forbear from enforcing any provision other than the core
requirements of sections 201, 202, and 208. This forbearance framework
for wireless has been so successful that in 2001, Tom Tauke, Verizon's
Senior Vice President for Public Policy and External Affairs, told the
House Judiciary Committee that ``this approach produced what is
arguably one of the greatest successes in this industry in the last
twenty years--the growth of wireless services''--and it ``will work''
for wireline broadband as well.
(Aside from this statutory history, wireless broadband may be
distinguishable from cable and telephone company broadband access
services on account of differences in the technical and consumer
aspects of wireless broadband service, as well as the Commission's
direct jurisdiction over licensing of wireless services under Title III
of the Communications Act. On the other hand, telecommunications
classification of a distinct transmission component within wireless
broadband service might be essential to supporting deployment and wider
adoption of wireless broadband under section 254.)
A Stronger Legal Foundation. Applying a few foundational sections
of Title II to the transmission component of broadband Internet access
service would establish a strengthened legal basis on which to
implement the consensus policy for broadband access. If broadband
access service is found to contain a separate telecommunications
service, as Justices Scalia, Souter, and Ginsburg believed was the only
plausible view, then the Commission may protect broadband consumers by
grounding its authority in Title II directly as well as in Title I as
ancillary authority. This belt-and-suspenders approach--relying on
direct statutory authority in addition to ancillary authority--puts the
Commission in an inherently more secure position than the Title I
approach, which allows only assertions of ancillary authority.
The legal issue surrounding the third way is not whether the
Commission can sufficiently protect consumers in a particular context,
as it is under the information service classification and the Comcast
opinion, but whether the Commission's decision to adopt Justice
Scalia's classification of broadband access would be permissible. Brand
X all but answers that question.
Brand X involved a challenge by independent Internet service
providers (ISPs), long distance carriers, consumer and public interest
groups, and states to the Cable Modem Declaratory Ruling. In that 2002
decision, the Commission had concluded that cable modem service then
was being provided as ``a single, integrated service that enables the
subscriber to utilize Internet access service,'' with a
telecommunications component that was not ``separable from the data
processing capabilities of the service.'' The Commission held that
cable modem service ``does not include an offering of
telecommunications service to subscribers'' and, accordingly, no
portion of it triggered Title II duties or protections. (Cable Modem
Declaratory Ruling paras. 38-39)
When the case was briefed at the Supreme Court, all the parties
agreed with the Commission that cable modem service either is or
includes an information service. The Court therefore addressed whether
the Commission permissibly applied the Communications Act in choosing
to conclude that cable modem service providers offer only an
information service, rather than a telecommunications service and an
information service. The Court's opinion unequivocally reaffirms the
principle that courts must defer to the implementing agency's
reasonable interpretation of an ambiguous statute. Justice Thomas,
writing for the six-Justice majority, recited that:
In Chevron [U.S.A., Inc. v. Natural Resources Defense Council,
Inc., 467 U.S. 837 (1984)], this Court held that ambiguities in
statutes within an agency's jurisdiction to administer are
delegations of authority to the agency to fill the statutory
gap in reasonable fashion. Filling these gaps, the Court
explained, involves difficult policy choices that agencies are
better equipped to make than courts. 467 U.S., at 865-866. If a
statute is ambiguous, and if the implementing agency's
construction is reasonable, Chevron requires a Federal court to
accept the agency's construction of the statute, even if the
agency's reading differs from what the court believes is the
best statutory interpretation.
(545 U.S. at 980) Furthermore, ``[a]n initial agency interpretation
is not instantly carved in stone. On the contrary, the agency. . .must
consider varying interpretations and the wisdom of its policy on a
continuing basis.'' (Id. at 981 (quoting Chevron))
Turning to the Communications Act, Justice Thomas wrote:
The entire question is whether the products here are
functionally integrated (like the components of a car) or
functionally separate (like pets and leashes). That question
turns not on the language of the Act, but on the factual
particulars of how Internet technology works and how it is
provided, questions Chevron leaves to the Commission to resolve
in the first instance. . . . [T]he statute fails unambiguously
to classify the telecommunications component of cable modem
service as a distinct offering. This leaves Federal
telecommunications policy in this technical and complex area to
be set by the Commission.
(Id. at 991) ``The questions the Commission resolved in the order
under review,'' Justice Thomas summed up, ``involve a subject matter
[that] is technical, complex, and dynamic. The Commission is in a far
better position to address these questions than we are.'' (Id. at 1002-
03 (internal citation and quotation marks omitted))
Justice Breyer concurred with Justice Thomas, stating that he
``believe[d] that the Federal Communications Commission's decision
falls within the scope of its statutorily delegated authority,''
although ``perhaps just barely.'' (Id. at 1003)
In dissent, Justice Scalia, joined by Justices Souter and Ginsburg,
expressed the view that the Commission had adopted ``an implausible
reading of the statute[,] . . . thus exceed[ing] the authority given it
by Congress.'' (Id. at 1005) Justice Scalia reasoned that ``the
telecommunications component of cable-modem service retains such ample
independent identity that it must be regarded as being on offer--
especially when seen from the perspective of the consumer or end
user.'' (Id. at 1008)
These opinions collectively afford the Commission great flexibility
to adjust its approach going forward--particularly by adopting an
approach like the one suggested by Justice Scalia. The Brand X case put
six Justices on record as saying that classification of cable modem
service is a call for the FCC to make and that ``the Commission is free
within the limits of reasoned interpretation to change course if it
adequately justifies the change'' (id. at 1001); one of the six ``just
barely'' accepted the FCC's information service approach; and the three
remaining Justices expressed the view that the agency must classify a
separable telecommunications service within cable modem offerings. As
many as all nine Justices, it seems, might have upheld a Commission
decision along the lines Justice Scalia suggested. In any event, the
lawfulness of a limited reclassification could be confirmed relatively
quickly in a single court case, avoiding the prolonged and uncertain
case-by-case testing that would follow from continuing down the Title I
road.
An agency reassessment of the classification issue would have to
include consideration of the policy impact of the Comcast case, as well
as a fresh look at the technical characteristics and market factors
that led Justice Scalia to believe there is a divisible
telecommunications service within broadband Internet access. The
factual inquiry would include, for instance, examination of how
broadband access providers market their services, how consumers
perceive those services, and whether component features of broadband
Internet access such as e-mail and security functions are today
inextricably intertwined with the transmission component. If, after
studying such issues, the Commission reasonably identified a separate
transmission component within broadband Internet access service, which
is (or should be) offered to the public, then the consensus policy
framework for broadband access would rest on both the Commission's
direct authority under Title II and its ancillary authority arising
from the newly recognized direct authority. This necessarily would
allow a stronger legal presentation than the standalone ancillary
jurisdiction arguments that the Commission made unsuccessfully in
Comcast.
No New Unbundling Authority. In the wake of Comcast,
representatives of the incumbent telephone companies have sometimes
suggested that any deviation from the current information service
classification of broadband Internet access would open the door to new
network unbundling authority under section 251(c) of the Communications
Act. That is not a credible concern. An incumbent telephone company's
network unbundling obligations under section 251 do not depend on the
classification of the services the incumbent company is providing. The
Commission's adoption of its current information service classification
accordingly did not lessen unbundling obligations or authority under
section 251. In paragraph 127 of the 2005 Wireline Broadband Order (the
order that extended the information-service classification to telephone
companies' broadband access) the Commission specifically explained that
``nothing in this Order changes a requesting telecommunications
carrier's [unbundling] rights under section 251 and our implementing
rules.''
Nor would identifying a separate telecommunications component of
broadband access service afford competing ISPs any new rights to the
incumbents' networks on a wholesale basis under the old Computer
Inquiry rules. The Commission ``eliminate[d]'' those requirements for
wireline broadband access providers in 2005, no matter whether they
provide a Title I or Title II access service. (Id. para. 80).
As for cable companies, there is currently an open rulemaking
proceeding--begun by the Powell Commission at the same time it adopted
the information services theory--that asks ``whether it is necessary or
appropriate at this time to require that cable operators provide
unaffiliated ISPs with the right to access cable modem service
customers directly.'' (Cable Modem Order para. 72) The Commission has
not taken any action to implement mandatory access to cable broadband
networks, and a consensus seems to have developed that it should not be
ordered. Should the Commission wish to formally confirm that consensus,
it could close the 2002 proceeding.
No Rate Regulation. Nor would identification of a
telecommunications service within broadband Internet access be a
harbinger of monopoly-era price regulation, as some have suggested.
Congress made mobile services subject to Title II in 1993, but under
the model established for wireless services the Commission rejected
rate setting. A wireless carrier's success, the Commission explained,
``should be driven by technological innovation, service quality,
competition-based pricing decisions, and responsiveness to consumer
needs--and not by strategies in the regulatory arena.'' (Implementation
of Sections 3(n) and 332 of the Communications Act, Regulatory
Treatment of Mobile Services, 9 FCC Rcd 1411, 1420 (1994)) There is no
reason to anticipate the Commission would reach a different conclusion
about prices or pricing structures for broadband access. Indeed, more
than 800 incumbent telephone companies voluntary provide broadband
access as a Title II telecommunications service today, and while most
have voluntary tariffs, the Commission expressly does not require
tariffing. (Wireline Broadband Order para. 90)
Difficult To Overturn. Would a forbearance-based approach provide
greater or lesser protection against future over-regulation of
broadband access than today's information service classification?
Although neither approach would, could, or should absolutely prevent
the Commission from adjusting its future policies in light of changed
circumstances, the forbearance approach should provide greater, not
lesser, protection against excessive regulation than the Title I
approach.
As already discussed, the Commission's information service approach
was highly discretionary and, the Supreme Court instructed in Brand X,
subject to review ``on a continuing basis.'' For both reasons, the
current information service classification is inherently insecure.
Justice Scalia made this point in Brand X. (545 U.S. at 1013)
Forbearance determinations for broadband access transmission would be
more difficult than the information service classification to reverse.
That is because Section 10 mandates forbearance if:
(1) enforcement of such regulation or provision is not
necessary to ensure that the charges, practices,
classifications, or regulations by, for, or in connection with
that telecommunications carrier or telecommunications service
are just and reasonable and are not unjustly or unreasonably
discriminatory;
(2) enforcement of such regulation or provision is not
necessary for the protection of consumers; and
(3) forbearance from applying such provision or regulation is
consistent with the public interest.
The initial determination to forbear from regulating broadband
access would be straightforward under this test. Applying sections 201,
202, and 208 would directly address the first prong of the test. As for
the second and third prongs (protecting consumers and consistency with
the public interest), the critical fact is that Title II rules
currently do not apply to broadband access service. Forbearing would
preserve the status quo, not change it. To satisfy the statutory
forbearance criteria, therefore, the Commission would only have to
conclude that consumers and the public interest are adequately
protected today, without application of the Title II provision at
issue. Consistent with the 2005 classification order, this analysis
could be undertaken on a nationwide rather than market-by-market basis.
(See Wireline Broadband Order paras. 91-93)
Unforbearing (that is, imposing Title II rules that have not been
applied to broadband access services in many years, if ever) would be a
different matter entirely. In order to overturn a grant of forbearance,
the Commission would first have to compile substantial record evidence
that the circumstances it previously identified as supporting
forbearance had changed, and then survive judicial review under the
Administrative Procedure Act's arbitrary-and-capricious standard. The
difficulty of overcoming section 10s deregulatory mandate and a prior
agency finding in favor of forbearance is illustrated by the fact that
the FCC has never reversed a forbearance determination made under
section 10, nor one made for wireless under the similar criteria of
section 332(c)(1).
The Commission could further reinforce the certainty of forbearance
in the text of any implementing order. For instance, the Commission
might provide that in the event of an adverse court decision on
forbearance the old unitary information service classification would
spring back, or that there would be some other response by the
Commission that is more consistent with the pre-Comcast status quo than
full Title II regulation.
No Inconsistent State Regulation. Excessive state regulation is as
threatening to the Internet as excessive Federal regulation. The
Commission, however, has broad authority to preempt inconsistent state
requirements when they frustrate valid Federal policies. Under today's
information service classification, the Commission's general policy of
not regulating information services means that states have little
ability to regulate broadband Internet access services. The Commission
has similar authority to preempt state regulation of interstate
telecommunications services when the state regulation is inconsistent
with Federal regulation (or deregulation) and the state cannot limit
the effect of its regulation to an intrastate portion of the service.
Furthermore, section 10(e) of the Act specifically provides that no
state may apply a provision of Title II that the Commission has
nullified through forbearance. For these reasons, broadband access
providers would have at least the same protection against unjustified
state regulation as they enjoy today. Indeed, access providers arguably
would have more protection under a tailored forbearance approach than
under the Title I approach; because a permissible exercise of Federal
jurisdiction can effectively limit state jurisdiction, the Comcast
decision's narrowing of Federal ancillary jurisdiction might have the
corollary effect of expanding the permissible scope of state
regulation.
No Red Tape or Slippery Slopes. Finally, a third-way approach
modeled on the successful framework used for wireless services would
have to be administrable and lead to sensible results in practice.
Administration should be a non-issue. Access providers would be free to
define and redefine their transmission services to best meet
operational and customer needs, without any need to file tariffs (given
forbearance from the rate-setting provisions of the Act). The fact-
specific inquiry involved in a tailored forbearance approach, moreover,
would address only facilities-based providers that offer access
transmission to the public at large. Providers of Internet content,
applications, and services would remain unregulated under the first
prong of the Commission's consensus framework, while providers of
negotiated (``private'') carriage services--on the Internet or
elsewhere--are not telecommunications service providers subject to
Title II. (See Communications Act section 3(46) (``The term
`telecommunications service' means the offering of telecommunications
for a fee directly to the public, or to such classes of users as to be
effectively available directly to the public, regardless of the
facilities used.'') A narrow and tailored forbearance approach to
solving the Comcast problem appears workable in this respect as well.
Whether, all things considered, the legal response to Comcast
sketched out here is the best one for the Commission to adopt would be
for the five FCC Commissioners to answer after an opportunity for
public comment and private study. In my judgment, it's a question worth
asking.