[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
OVERSIGHT OF THE FEDERAL COMMUNICATIONS COMMISSION
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
MARCH 22, 2016
__________
Serial No. 114-129
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
JOE BARTON, Texas FRANK PALLONE, Jr., New Jersey
Chairman Emeritus Ranking Member
ED WHITFIELD, Kentucky BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania ELIOT L. ENGEL, New York
GREG WALDEN, Oregon GENE GREEN, Texas
TIM MURPHY, Pennsylvania DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee MICHAEL F. DOYLE, Pennsylvania
Vice Chairman JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington KATHY CASTOR, Florida
GREGG HARPER, Mississippi JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky PETER WELCH, Vermont
PETE OLSON, Texas BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia PAUL TONKO, New York
MIKE POMPEO, Kansas JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida KURT SCHRADER, Oregon
BILL JOHNSON, Missouri JOSEPH P. KENNEDY, III,
BILLY LONG, Missouri Massachusetts
RENEE L. ELLMERS, North Carolina TONY CARDENAS, California
LARRY BUCSHON, Indiana
BILL FLORES, Texas
SUSAN W. BROokS, Indiana
MARKWAYNE MULLIN, oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota
Subcommittee on Communications and Technology
GREG WALDEN, Oregon
Chairman
ROBERT E. LATTA, Ohio ANNA G. ESHOO, California
Vice Chairman Ranking Member
JOHN SHIMKUS, Illinois MICHAEL F. DOYLE, Pennsylvania
MARSHA BLACKBURN, Tennessee PETER WELCH, Vermont
STEVE SCALISE, Louisiana JOHN A. YARMUTH, Kentucky
LEONARD LANCE, New Jersey YVETTE D. CLARKE, New York
BRETT GUTHRIE, Kentucky DAVID LOEBSACK, Iowa
PETE OLSON, Texas BOBBY L. RUSH, Illinois
MIKE POMPEO, Kansas DIANA DeGETTE, Colorado
ADAM KINZINGER, Illinois G.K. BUTTERFIELD, North Carolina
GUS M. BILIRAKIS, Florida DORIS O. MATSUI, California
BILL JOHNSON, Missouri JERRY McNERNEY, California
BILLY LONG, Missouri BEN RAY LUJAN, New Mexico
RENEE L. ELLMERS, North Carolina FRANK PALLONE, Jr., New Jersey (ex
CHRIS COLLINS, New York officio)
KEVIN CRAMER, North Dakota
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)
C O N T E N T S
----------
Page
Hon. Greg Walden, a Representative in Congress from the State of
Oregon, opening statement...................................... 2
Prepared statement........................................... 4
Hon. Anna G. Eshoo, a Representative in Congress from the State
of California, opening statement............................... 5
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 7
Prepared statement........................................... 7
Hon. Kevin Cramer, a Representative in Congress from the State of
North Dakota, prepared statement............................... 9
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 10
Witnesses
Tom Wheeler, Chairman, U.S. Federal Communications Commission.... 12
Prepared statement........................................... 14
Answers to submitted questions............................... 104
Mignon Clyburn, Commissioner, Federal Communications Commission.. 21
Prepared statement........................................... 23
Answers to submitted questions............................... 145
Jessica Rosenworcel, Commissioner, Federal Communications
Commission..................................................... 28
Prepared statement........................................... 30
Answers to submitted questions............................... 152
Ajit Pai, Commissioner, Federal Communications Commission........ 32
Prepared statement........................................... 34
Answers to submitted questions............................... 162
Michael O'Rielly, Commissioner, Federal Communications Commission 40
Prepared statement........................................... 42
Answers to submitted questions............................... 172
Submitted Material
Statement of civil rights groups, submitted by Mr. Butterfield... 90
Op-Ed by former Representative Henry Waxman entitled, ``FCC cable
box proposal affects more than just cable boxes, The Hill,
March 21, 2016, submitted by Mr. Butterfield................... 94
Statement on the Lifeline Program by the Center on Budget and
Policy Priorities, submitted by Mr. Butterfield \1\
Statement of RLJ Entertainment, Inc., submitted by Ms. Eshoo..... 96
Article entitled, ``Fixing Television with Tomorrowvision,'' by
Public Knowledge, April 2, 2012, submitted by Ms. Eshoo........ 98
Whitepaper entitled, ``Tomorrowvision,'' by Public Knowledge,
April, 2012, submitted by Ms. Eshoo \2\
Statement of civil rights groups, submitted by Ms. Eshoo......... 101
Documents on broadcast investment, submitted by Ms. Eshoo \3\
----------
\1\ Available at: http://docs.house.gov/meetings/IF/IF16/
20160322/104714/HHRG-114-IF16-20160322-SD010.pdf.
\2\ Available at: http://docs.house.gov/meetings/if/if16/
20160322/104714/hhrg-114-if16-20160322-sd004.pdf.
\3\ Available at: http://docs.house.gov/meetings/if/if16/
20160322/104714/hhrg-114-if16-20160322-sd008.pdf.
OVERSIGHT OF THE FEDERAL COMMUNICATIONS COMMISSION
----------
TUESDAY, MARCH 22, 2016
House of Representatives,
Subcommittee on Communications and Technology,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:15 a.m., in
room 2123 Rayburn House Office Building, Hon. Greg Walden
(chairman of the subcommittee) presiding.
Members present: Representatives Walden, Latta, Barton,
Shimkus, Blackburn, Lance, Guthrie, Olson, Pompeo, Kinzinger,
Bilirakis, Johnson, Long, Ellmers, Collins, Cramer, Upton (ex
officio), Eshoo, Doyle, Yarmuth, Clarke, Loebsack, DeGette,
Butterfield, Matsui, McNerney, Lujan, and Pallone (ex officio).
Staff present: Gary Andres, Staff Director; Ray Baum,
Senior Policy Advisor for Communications and Technology; Mike
Bloomquist, Deputy Staff Director; Leighton Brown, Deputy Press
Secretary; Rebecca Card, Assistant Press Secretary; Gene
Fullano, Detailee, Telecom; Kelsey Guyselman, Counsel, Telecom;
Tim Pataki, Professional Staff Member; David Redl, Chief
Counsel, Telecom; Charlotte Savercool, Professional Staff,
Communications and Technology; Dan Schneider, Press Secretary;
Dylan Vorbach, Deputy Press Secretary; Gregory Watson,
Legislative Clerk, Communications and Technology; Christine
Brennan, Minority Press Secretary; Jeff Carroll, Minority Staff
Director; David Goldman, Minority Chief Counsel, Communications
and Technology; Jerry Leverich, Minority Counsel; Lori
Maarbjerg, Minority FCC Detailee; Ryan Skukowski, Minority
Policy Analyst; and Andrew Souvall, Minority Director of
Communications, Outreach and Member Services.
Mr. Walden. I call the subcommittee on Communications and
Technology to order and welcome our distinguished panel, the
chairman and Federal Communication Commission commissioners,
thank you for being here this morning. Good morning Chairman
Wheeler. Commissioners, thank you all for joining us.
I want to start this morning with two points of personal
privilege. First, would you all join me in wishing Commissioner
Clyburn a very joyous and happy birthday? It is not every day
you turn 30, including today. But, oh, well. We know you think
of it as a present to be here with us today.
Thank you for your great service to the country and may you
have many, many more wonderful birthdays ahead, not necessarily
celebrated with us.
Second, today is the last hearing that my good friend of
nearly 30 years, an extraordinary counselor, Ray Baum will
serve as a member of our committee staff. As fate would have
it, our parents were friends back in the 1930s. Ray and I won
back the seats that our fathers had both held and both had been
defeated by Democrats in, when we were elected to the Oregon
legislature in 1988. He followed me as House Majority Leader
and then later served as a member of the Oregon Public Utility
Commission, appointed by a Democratic governor. And then
another Democratic governor appointed him to serve as chairman
of the Public Utility Commission and he served as the chair of
the state Federal-State Joint Board on Universal Service as
well. A really exciting topic, if anybody wants to get too
deeply into, Ray can take you there.
He has given us more than the 5 years he committed, when I
convinced him and his wife to come to Washington and I hope we
all wish him well as he begins a new journey with the
broadcasters. Ray, thanks for decades of strong, fair, and
effective public service for Oregonians and all Americans.
Godspeed on your new journey.
Ms. Eshoo. Mr. Chairman? Mr. Chairman?
Mr. Walden. I would yield to my friend from California.
Ms. Eshoo. I thank the chairman. We all wish Ray the
absolute best because he has given his best here. He has always
been a gentleman. He is a public policy expert. He has given
his all to the committee and during times when it was difficult
for him to do that because he was battling something in terms
of his health but he never missed a beat. And I call that real
dedication, dedication to not only our committee and the work
and the responsibilities of this committee but ultimately for
the American people.
So, God bless you, Ray. We are going to miss you a great
deal. Thank you for everything that you have done on behalf of
all of us.
Mr. Walden. The gentleman from New Mexico.
Mr. Lujan. Thank you, Mr. Chairman. And Ray, this is a
surprise to me, sir, but I also had the honor of working with
Ray Baum and learning from Ray Baum back when he was a utility
commissioner and I was on the New Mexico commission as well.
And it has been an honor working with you, Ray. Many successes
and I look forward to continuing to work with you. You are a
great, great person and you truly are an asset to America. I
look forward to learning from you and working with you in your
future endeavors.
OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OREGON
Mr. Walden. Thank you. Now, on to our hearing.
We are entering what will most likely be, if tradition
holds, the final chapter in the history of the FCC under
Chairman Wheeler's leadership. As the record clearly shows,
while we have worked together on many public policy issues, we
have also been at odds at times on process and policy.
While the Commission began with a commitment to reform the
agency from within, we know that the Commission has implemented
only half of the recommendations of the 2014 FCC Process Reform
Working Group. This is why I believe true reforms require
changes in law that can transcend any particular chairman or
any particular commission. The public deserves no less.
Unfortunately, sharp divisions within the Commission are widely
reported. With the rapidly changing communications marketplace,
we have never needed this independent agency to work together
for the public interest more than now.
And I have to admit there are times when I have expressed
my displeasure with the FCC's actions and its failure to adhere
to the will and intent of Congress. For example,
notwithstanding passage of the bipartisan legislation requiring
that existing JSAs be grandfathered from the FCC's
controversial revisions to the ownership rules, the FCC's media
bureau recently terminated a JSA in spite of this restriction,
evoking a strong bipartisan rebuke. And the recent Senate
report on how the chairman and his general counsel capitulated
to the White House demands regarding net neutrality proceeding
illustrates, without question, the willingness of agency
leadership to subvert what I would call fair and open process
to political pressure from the White House.
But that is not all. I am concerned about the FCC's actions
regarding set top boxes and what that means for copyrighted
programming and consumer privacy. While the FCC has wrapped its
proposal in pro-competition and pro-consumer bunting a broad
range of stakeholders, including content providers, program
distributors, large and small, and civil rights groups have
emerged pointing out that the proposal raises serious concerns
about its downside. I am sure that we will hear more about that
from our other committee members today.
Meanwhile, the chairman has circulated a proposal to impose
privacy rules on ISPs modeled on those for the old telephone
network. Instead of making the proposal public for all to see,
all the public gets is a fact sheet. Words matter, to quote
others on this committee. Mr. Chairman, I call on you to make
that proposal available for all to see, including for
commissioners to comment upon. And I think that would be
helpful and important.
And the chairman has circulated his plan to expand the
Lifeline program to subsidize mobile and fixed broadband
internet access and contemplates increasing spending by $750
million. Again, because this proposal is not public, we have
only the FCC's fact sheet to guide our understanding. While it
appears the chairman has proposed a budget mechanism, certainly
a necessary step, and reforms to combat waste, fraud, and
abuse, which we support going after all of that, the devil is
in the details as to whether they are meaningful details which
we cannot see until the item is adopted and released. Notably
absent from the FCC's marketing materials is a discussion of
the financial impact of the proposal on the families that pay
each month through fees on their phone bills to support the
program.
These are all significant matters that will define how we
communicate for years to come. It will not serve the American
people if they are resolved in a manner that ignores opposing
views, discredits opposing input on its face, and gives short
shrift to collaboration in favor of expediency. Good process--
openness, transparency, and accountability--honest policy
debate, and compromise are the catalyst for balanced,
sustainable outcomes.
Finally, let me end with this. If all goes as planned, and
it appears that it will, the incentive auction will begin on
March 29th. And I commend the Commission and its staff and the
chairman for moving this process along. It has been a very
difficult road, never traveled before. I consider the
legislation that got us here some of the most important work to
have come out of our subcommittee, legislation that reflected
bipartisan agreement, reached through debate and compromise. I
think it is something we can all be proud of.
We all hope the auction is a success. And, of course, only
time will tell. Mr. Chairman, you have recognized this is only
the beginning of a very complex endeavor. I was pleased to see
that your staff has already turned to the post-auction repack
issues. There are, of course, controversies about the
sufficiency of the 39-month time line and the $1.75 billion set
aside fund to fund it. In addition, I remain concerned about
keeping translators and low-power television stations on the
air as appropriate under the rules. I remind the FCC of the
age-old requirement that licensed stations supersede unlicensed
uses of broadcast spectrum. Know that we take these issues
seriously, and I know you do, and will continue to work closely
with you and your team as this phase of the post auction
proceeds to make sure that the intent of the law is followed
and that free over-the-air broadcast programming is not
adversely affected.
Again, thank you for your good work on the auction.
I guess I have used up all the time I had. So, with that, I
would recognize the gentlelady from California for opening
remarks and again thank the chairman and the Commission for the
work you do and for being here today.
[The prepared statement of Mr. Walden follows:]
Prepared statement of Hon. Greg Walden
I want to start this morning with two points of personal
privilege. First: Would you all join me in wishing Commissioner
Clyburn a very joyous and happy birthday today. What a present
to her to get to spend time here! Thanks for your service to
our great country and may you have many, many more wonderful
birthdays ahead.
Second, today is the last hearing that my good friend of
nearly 30 years, and extraordinary counselor, Ray Baum will
serve as member of our committee staff. Our parents were
friends back in 30s, Ray and I won back the seats that our
fathers had both held--and been defeated in--when we were
elected the Oregon legislature in 1988. He followed me as
Majority Leader of the Oregon House, and then Ray went on to
serve as a member of the Oregon Public Utility Commission, then
as its chairman-both appointments by Democratic governors. And
he served as the state chair of the Federal-State Joint Board
on Universal Service, as well. He's given us more than the five
years he committed when I convinced him to come to Washington
and I hope we all will wish him well as he begins a new journey
with the broadcasters. Ray thanks for decades of strong, fair
and effective public service for Oregonians and all Americans.
Godspeed, my friend.
We are entering what will most likely be--if tradition
holds--the final chapter in the history of this FCC under
Chairman Wheeler's leadership. As the record clearly shows,
while we have worked together on many public policy issues,
we've also been at odds at times on process and policy.
While the Commission began with a commitment to reform the
agency from within, we know that the Commission has implemented
only half of recommendations of the 2014 FCC Process Reform
Working Group. This is why I believe true reforms require
changes in law that can transcend any particular chairman or
commission. The public deserves no less. Unfortunately, sharp
divisions within the Commission are widely known. With the
rapidly changing communications marketplace, we've never needed
this independent agency to work together for the public
interest more than now.
And, I have to admit; there are times when I've expressed
my displeasure with the FCC's actions and its failure to adhere
to the will and intent of Congress. For example,
notwithstanding passage of bipartisan legislation requiring
that existing JSAs be grandfathered from the FCC's
controversial revisions to the ownership rules, the FCC's media
bureau recently terminated a JSA in spite of this restriction--
evoking a strong bipartisan rebuke. And the recent Senate
report on how the Chairman and his General Counsel capitulated
to White House demands and cooked the record in the net
neutrality proceeding illustrates without question the
willingness of agency leadership to subvert fair and open
process to political pressure from the White House. But that's
not all.
I am very concerned about the FCC's actions
regarding set top boxes and what that means for copyrighted
programming and consumer privacy. While the FCC has wrapped its
proposal in pro-competition and pro-consumer bunting a broad
range of stakeholders including content providers, program
distributors large and small, and civil rights groups have
emerged pointing out that the proposal raises serious concerns
about its downside.
Meanwhile, the Chairman has circulated a proposal
to impose privacy rules on ISPs modeled on those for the old
telephone network. Instead of making the proposal public for
all to see, all the public gets is a fact sheet. Words matter
(to quote my ranking subcommittee member.) Mr. Chairman, I call
on you to make the proposal available for all to see and
comment upon.
And the Chairman has circulated his plan to expand
the Lifeline program to subsidize mobile and fixed broadband
Internet access--and contemplates increasing spending by $750
million. Again, because the proposal is not public we have only
the FCC's fact sheet to guide our understanding, While it
appears that Chairman Wheeler has proposed a ``budget
mechanism''--certainly a necessary step--and reforms to combat,
waste, fraud and abuse--the devil is in the details as to
whether they are meaningful--details which we cannot see until
the item is adopted and released. Notably absent from the FCC's
marketing materials is a discussion of the financial impact of
the proposal on the families that pay each month through fees
on their phone bills to support the program.
These are significant matters that will define how we
communicate for years to come. It will not serve the American
people if they are resolved in a manner that ignores opposing
views, discredits opposing input on its face, and gives short
shrift to collaboration in favor of expediency. Good process--
openness, transparency, and accountability--honest policy
debate, and compromise are the catalyst for balanced,
sustainable, outcomes.
Finally, let me end with this note. f all goes as planned,
and it appears that it will, the incentive auction will begin
on March 29th. I consider the legislation that got us here some
of the most important work to have come out of our
Subcommittee--legislation that reflected bipartisan agreement--
reached through debate and compromise. We all hope that the
auction is a success. And of course, only time will tell. But
Mr. Chairman, as you have recognized this is only the beginning
of a very complex endeavor. I was pleased to see that your
staff has already turned to the post-auction repack. There are,
of course, controversies about the sufficiency of the 39-month
timeline and the $1.75 billion set aside to fund it. In
addition, I remain concerned about keeping translators and low
power television stations on the air. I remind the FCC of the
age-old requirement that licensed stations supersede unlicensed
uses of broadcast spectrum. Know that we take these issues
seriously and will continue to work closely with you and your
team as this phase of the post auction proceeds to make sure
that the intent of the law is followed and that free over the
air broadcast programming is not adversely affected.
OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Eshoo. Thank you, Mr. Chairman, and good morning to
you. And welcome back to the chairman and each of the
commissioners. It has been 4 months since you have been here. I
think that you have made optimum use of the 4 months since you
were last here because there are a series of actions that are
being taken up at the Commission that I think put consumers
first, strengthen competition and advance innovation.
At the top of that list is the agency's vote last month
that would make it easier for consumers to buy a set top box or
an app from someone other than their cable company. This
technology neutral proposal means that any company will be able
to manufacture a set top box or design an app and sell it to
consumers. Should a consumer wish to continue renting their set
top box from their pay TV provider, they can. No one is going
to take it away from them. I don't know if there is that much
of a love affair with the set top box but if they want it they
can keep it. Very importantly, the FCC's proposal is an
opportunity to enhance access to independent and minority
programming, giving consumers the ability to choose between set
top boxes or apps with improved search functionality and user
interfaces.
Nearly 50 years ago, the FCC took action to give consumers
choice as to whether they wanted to rent their landline
telephone from Ma Bell. Consumers not only saved money but
innovation thrived in the telephone market.
The FCC is also busy in its efforts to modernize its
Lifeline program to make broadband more affordable to low-
income Americans. This has long been the goal of, I think, the
entire committee, certainly huge support on our side of the
aisle. Under the proposal to be voted on next week for the
first time ever, for the first time ever low-income consumers
will be able to use the $9.25 per month Lifeline support
towards stand-alone broadband service. Access to broadband is
the 21st century's lifeline providing a pathway to jobs,
education, healthcare and so much more.
The FCC's action will further our nation's progress toward
bridging the digital divide that has really haunted our
country. We have looked for ways, talked about it, dreamed
about it, hoped for it, and I think that this is a major step
forward of reaching the President's goal of bringing high-speed
broadband to 20 million more Americans by 2020.
In just a matter of days, the FCC will begin its first
voluntary incentive spectrum auction with global mobile traffic
expected to increase nearly eight-fold between 2015 and 2020
and wireless carriers taking steps to deploy 5G. I think it is
critical that we continue efforts to free up more spectrum for
both licensed and unlicensed use.
At the same time, the FCC will take critical action at its
March meeting to protect the privacy of broadband consumers,
efforts to continue to reform the special access mark. And Mr.
Chairman, I hope this is just closed, done, accomplished at the
end of this year.
Transition to Next-Gen 911 and ensuring the internet
remains open and accessible to all Americans.
None of these are small tasks but taken together, not only
individually, but taken together I think that this will leave a
remarkable imprimatur on the country of this commission's work.
So, I thank you. I look forward to a lively discussion and
questions that you are going to be asked. And again, thank you
for being here and the work that you are doing. And I yield
back.
Mr. Walden. The gentlelady yields back the balance of her
time. The chair recognizes the chairman of the full committee,
the distinguished gentleman from Michigan, Mr. Upton.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. Well, thank you, Mr. Chairman. I just want to
echo the words for Ray Baum and I would say, with apologies to
the rest of the staff, I don't know of a more professional
hard-working leader that we have had in Ray over the last 5
years. He has helped set the standard. We work as a team on
both sides of the aisle. Yes, of course, we disagree from time
to time on certain issues but we are not disagreeable and he
has set that bar and we really appreciate his very hard work. I
knew about his background before and he has been an integral
cog in all that we have done and we all appreciate that
friendship and professionalism from Day 1.
Chairman Wheeler and members of this committee, welcome
back for sure.
Last November, the House did pass by a voice vote H.R.
2583, the FCC Process Reform Act, a testament of our bipartisan
commitment to solidify the FCC as a model of openness,
transparency, and collegiality. This committee has pursued FCC
process reform on a bipartisan basis, going back to the 112th
Congress, and I am proud of our continued efforts to improve
the function and transparency of our government.
Underscoring the need for this legislation are, of course,
the continued reports of process failures and divisive
partisanship at the FCC. The FCC is the steward of one of the
most vibrant and innovative sectors of our national economy.
Significant matters remain before it and the stakes are
certainly high. The communications and technology sectors are
among our nation's most precious economic assets, the pinnacle
of innovation and something that we should be rightly so proud
of.
Given the stakes, two of our FCC's most recent proposals
are cause for concern. The chairman recently presented his
colleagues with a proposal to impose new requirements on the
video subscription market and a new privacy regime for internet
service providers. These proposals have the potential to harm
the very sectors that they are attempting to preserve and
stimulate. The Commission should look with a skeptical eye at
calls to regulate part of a market at the request of
competitors.
And as the chairman seeks to implement what is likely the
final year of his agenda, it is no less important now that
matters are addressed through a process that is open and
transparent, informed through robust debate, and resolve
through bipartisan compromise. These were procedures that once
set the FCC apart and should be returned to. It is only through
this approach that we can avoid uncertainty and the threat to
investments.
And I yield to Mr. Latta, Blackburn, and Cramer.
[The prepared statement of Mr. Upton follows:]
Prepared statement of Hon. Fred Upton
Chairman Wheeler and members of the commission, welcome
back. Last November the House passed by voice H.R. 2583, the
FCC Process Reform Act, a testament to our bipartisan
commitment to solidify the FCC as a model of openness,
transparency, and collegiality. This committee has pursued FCC
process reform on a bipartisan basis going back to the 112th
Congress and I am proud of our continued efforts to improve the
function and transparency of our government.
Underscoring the need for this legislation are the
continued reports of process failures and divisive partisanship
at the FCC. The FCC is the steward of one of the most vibrant
and innovative sectors of our national economy. Significant
matters remain before it and the stakes are extremely high. The
communications and technology sectors are among our nation's
most precious economic assets--the pinnacle of innovation and
something that we should rightly be proud of.
Given the stakes, two of the FCC's most recent proposals
are cause for concern. The Chairman has recently presented his
colleagues with a proposal to impose new requirements on the
video subscription market and a new privacy regime for Internet
service providers. These proposals have the potential to harm
the very sectors they are attempting to preserve and stimulate.
The Commission should look with a skeptical eye at calls to
regulate part of a market at the request of competitors.
As the Chairman seeks to implement what is likely the final
year of his agenda, it is no less important now that matters
are addressed through a process that is open and transparent,
informed through robust debate, and resolved through bipartisan
compromise. These were procedures that once proudly set the FCC
apart, and should be returned to. It is only through this
approach that we can avoid the uncertainty and threat to
investment and jobs creation that a flawed process promises to
deliver.
Mr. Latta. I appreciate the chairman for yielding and I
also want to thank the Commissioner for being with us today.
I am always continually amazed by the success and the
productivity of the communications and technology industry.
This dynamic sector is a bright spot in our economy, as it
rapidly advances and evolves to meet consumer demands. Given
the Federal Communications Commission's integral role in this
marketplace, it is critical that Congress monitor its
regulatory policies that impact the industry's success.
With that said, I am concerned with some of the actions and
proposals emerging from the Commission. Take for instance, the
set top box Notice of Proposed Rulemaking which seeks to
replace the failed cable card regime with yet another
government-dictated standard. And Congressman Green and I
worked together to get our bill language inserted into STELAR
to eliminate the integration band, we intended to rid the
marketplace of an outdated technological mandate. However,
rather than allowing consumer demands and competitions to shape
the industry, the FCC has placed it upon itself to inhibit the
future of pay TV with unnecessary government involvement. The
NPRM will surely impede innovation and limit consumer choice.
With that, I look forward to today's hearing and I will
yield back to the chairman. Thank you.
Mrs. Blackburn. I thank you, Mr. Chairman, for yielding. We
are appreciative of the Commissioner's time in coming here
before us this morning. There are concerns, as you have heard
from some of the policies that you have moved forward with, net
neutrality, municipal broadband. The actions that were taken in
North Carolina and Tennessee in muni broadband were so radical
that even DOJ didn't support what you were doing.
We also have concerns pertaining to AllVid and lessening of
the protections that are there for patent holders and
copyrights.
So, lots to discuss today. So, we thank you for your time
and your preparation in being here. And I yield to Mr. Cramer.
Mr. Cramer. Thank you for yielding. Thank you to all three
of you.
I guess I would just associate myself, as much as anything,
with the chairman of the full committee and the chairman of the
subcommittee and put a finer point, perhaps on the set top box
rule. While I have all the same concerns they have, I have a
special particular concern about its impact, the
disproportionate impact it would have on smaller video
providers, rural video providers, and a number of us are always
looking out for the smaller, rural providers.
And then I would just add one other issue and that is that
I continue to hear from especially my rural telephone
cooperatives of call dropping issues. And if maybe after the
hearing somebody could hook up with my staff, I would like to
get the latest from you all. Because we just heard from Tyler
Kilde of Griggs County, for example. They are having as many as
five complaints a month and that still seems awfully high. And
I yield back. Thank you.
[The prepared statement of Mr. Cramer follows:]
Prepared statement of Hon. Kevin Cramer
Chairman Wheeler, Commissioner Clyburn, Commissioner
Rosenworcel, Commissioner Pai, and Commissioner O'Reilly, thank
you for joining us today at this FCC oversight hearing to
discuss the many important issues being considered at the FCC.
Since there are so many members here today, I'll keep my
comments brief.
As an at-large representative of a rural state, and as a
former public service commissioner of 10 years for North
Dakota, many of the issues being raised today hit home for me
in more ways than one. For this reason, I'd like to raise a
number of issues related to rural-specific areas.
First, I'd like to discuss the ongoing issue of call
completion in my state. While many may think this issue is dead
in 2016, I am told completion problems are still occurring.
Earlier this month, my staff met with Tyler Kilde of Griggs
County Telephone Company in Enderlin, North Dakota--a town of
less than one thousand people located an hour outside of Fargo.
Mr. Kilde informed my staff that it is not uncommon for him
to have five complaints a month relating to call completion.
Following this hearing, if your staff could please update me on
the latest information at the FCC related to call completion,
I'd appreciate it.
Second, I'd like to express my concerns for the cable set
top box NPRM and its implementation of the ``AllVid'' approach.
The rule severely harms copyright and content providers by
forcing their product to be handed over without their consent.
It also forces a multichannel video programming distributor
(MVPD) to hand over viewing data without the consumers consent
and allows a 3rd party device to use that data without consent.
I am particularly concerned about the impacts these costly
rules would have on smaller video providers. Since the rules
require MVPDs to re-engineer their systems to send information
to 3rd party boxes, smaller providers will be
disproportionately impacted by these rules due to their lack of
staff and resources. For these reasons and others, I strongly
oppose these rules and I hope the FCC will reconsider their
current approach.
Lastly, I'd like to bring up the FCC's proposed rules on
online privacy, which would place additional requirements on
Internet services providers.
According to a recent study from former Clinton
Administration privacy expert Peter Swire, the rise of
encryption protocols such as HTTPS is increasingly reducing the
amount of accessible information available to Internet service
providers.
With 42 of the top 50 Web sites now using default
encryption, and with 70 percent of all Internet traffic
expected to be encrypted by the end of 2016, I am unconvinced
that the FCC's proposed privacy rules on ISPs will do anything
more than add additional rules to an industry, which has
already seen its fair share of regulations in the past several
years. I would hope you'll reconsider your efforts on this
issue as well.
Thank you again for testifying today and I look forward to
hearing your responses on these important issues.
Mr. Walden. The gentleman yields back.
Mr. Cramer. And I love Ray, too.
I, too, served as a public service commissioner. He was a
legend then, too.
Mr. Walden. I thank the gentleman for his comments. And all
time has been consumed. So, now we go to the ranking member of
the full committee, Mr. Pallone of New Jersey for opening
comments.
OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Mr. Chairman and also Ranking
Member Eshoo. And thank you to all five commissioners for
testifying today.
Anyone who thought the FCC would slow down this year
certainly underestimated the agency. The Commission has teed up
an impressive number of important issues, including the
incentive auction set to launch next week. The auction counts
as one of the most ambitious efforts the agency has ever
undertaken. The air waves that can be freed up through this
auction, both licensed and unlicensed, will ensure consumers
feel the full power of the mobile revolution.
But as important as it is to help consumers of mobile
services, the auction can also be considered successful if it
works for broadcast viewers as well. Back in New Jersey, we
understand the importance of a seamless transition after the
auction because disasters like Hurricane Sandy can strike at
any time and when they do, viewers depend on their local
broadcasters.
Fortunately, all five FCC commissioners have committed to
ensuring viewers do not lose signal as a result of the
repacking process. That is why I drafted the Viewer Protection
Act to give them all the tools they need to keep this
commitment. This bill will prevent viewers' TVs from going
dark, while also ensuring consumers of mobile broadband benefit
from the incentive auction as soon as possible.
Hurricane Sandy also showed the importance of phones in an
emergency. When the hurricane hit New Jersey, we did not just
watch our TVs or listen to our radios but we also looked to our
mobile phones. Unfortunately, too many of those devices let us
down when we needed them the most. And that is why I introduced
the SANDy Act so that we are better prepared the next time
disaster strikes.
The SANDy Act has a number of common sense proposals to
improve access to communications in a disaster. For instance,
the SANDy Act would help ensure the customers of any wireless
carrier can get signal, even if their own carrier service goes
down. No one should be left without any bars on their phone
when a compatible network is still working.
The bill would also create a database of critical personnel
to keep public safety officials and the carriers in better
touch during an emergency when every second counts.
I have been in close contact with both Chairman Wheeler and
the carriers to talk about how to get this done and I want to
thank them both for taking these issues so seriously. I am
optimistic that we are close to a breakthrough that would put
us in a better position for when the next disaster strikes.
And again, I thank the chairman, Ms. Eshoo, and the
commissioners for being here today. I look forward to today's
discussion.
I have about 2 \1/2\ minutes left. I would like to split
that between Mr. Doyle and Mr. Butterfield and yield first to
Mr. Doyle.
Mr. Doyle. Thank you. I appreciate you yielding to me. And
I want to thank the chairman for holding the hearing. And to
our witnesses, this is like deja vu all over again. These guys
are here all the time. But welcome back. We are glad to see
you.
The Lifeline program connects millions of people around the
country to their only source of communication and I just wanted
to take a minute to congratulate Commissioner Clyburn for her
leadership on this issue and the efforts of the full commission
to modernize this program and bring it into the 21st century.
I also want to commend the Commission on moving forward on
broadband privacy reform. I agree that it is critical for FCC
rules to be updated to suit our modern needs and that these
rule recognize the privileged position ISPs hold in acting as
gatekeepers for the rest of the internet.
So, Mr. Chairman, that is all I have to say and I would be
happy to yield back to you so that you can yield to our other
colleague.
Mr. Pallone. I yield--oh, yes. Thank you.
Mr. Doyle. It is just a matter of time.
Mr. Pallone. Oh, my God, we started out all right. I yield
the rest of the time to Mr. Butterfield. Thanks.
Mr. Butterfield. Thank you, very much, Mr. Pallone. Let it
be said that our colleague from Pennsylvania set a record
today. Thank you, Mike Doyle. I thought you were going to eat
up all of that time.
But thank you, Mr. Pallone. Let me begin by sharing with my
colleagues and thanking the commissioners for their incredible
work and thank you for coming today.
I join my many other colleagues in applauding the
Commission for expanding the Lifeline program to subsidize
broadband services but I am afraid one of the unintended
consequences of the current proposal would be the creation of a
copay requirement on low-income participants of Lifeline, as
well as a phase out of voice-only.
And so, Mr. Chairman, I urge the Commission to preserve a
no-charge option for Lifeline participants who may not be able
to afford even a modest co-pay and to maintain a voice-only
option. It is crucial. It is crucial for Lifelinebeneficiaries
in my congressional district and across the country that the
expansion of the program to include broadband will not be at
the expense of essential voice services.
Regarding the set top box proposal, I am also concerned
with the potential for many unintended consequences like many
of those raised in the Op Ed written by Henry Waxman, including
the ability to enforce copyright protections for content
creators and distributors as well as the potential negative
impact the proposal could have on diversity and inclusion of
minority voices.
Along with other stakeholders, I am concerned that the
proposal could lead to a new forum of digital redlining.
Therefore, Mr. Chairman, I ask unanimous consent to include
three items into the record.
Very briefly, the first letter is addressed to Chairman
Wheeler signed by ten civil rights organizations urging the
Commission to postpone the set top box proposal until a study
can be conducted.
[The information appears at the conclusion of the hearing.]
Mr. Butterfield. Second is an Op-Ed from our good friend,
Henry Waxman, that cautions the Commission to explore the
myriad of unintended consequences that could arise from the set
top box proposal.
[The information appears at the conclusion of the hearing.]
Mr. Butterfield. Finally, the third is a copy of comments
filed by the Center on budget and policy priorities, which
urges the Commission to not require any cost sharing in order
to participate in the Lifeline program because evidence shows
that doing so would dampen low-income households' ability to
participate. \1\
---------------------------------------------------------------------------
\1\ The information has been retained in committee files and is
also available at http://docs.house.gov/meetings/IF/IF16/20160322/
104714/HHRG-114-IF16-20160322-SD010.pdf.
---------------------------------------------------------------------------
Mr. Butterfield. Thank you.
Mr. Walden. Without objection.
Mr. Butterfield. Thank you, Mr. Chairman.
With that, I yield back and I thank you.
Mr. Walden. The gentleman's time has expired. All times has
expired for opening statements. I want to again welcome the
chairman and the commissioners here this morning.
And Chairman Wheeler, obviously, we are going to start with
you this morning. Welcome back and I look forward to your
comments.
STATEMENTS OF TOM WHEELER, CHAIRMAN, U.S. FEDERAL
COMMUNICATIONS COMMISSION; MIGNON CLYBURN, COMMISSIONER,
FEDERAL COMMUNICATIONS COMMISSION; JESSICA ROSENWORCEL,
COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION; AJIT PAI,
COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION; MICHAEL
O'RIELLY, COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION
STATEMENT OF TOM WHEELER
Mr. Wheeler. Thank you, Mr. Chairman and members of the --
--
Mr. Walden. But we would ask you to pull that microphone
pretty close. Thank you.
Mr. Wheeler. Let me start off with the topic that many of
you were addressing and that is the upcoming spectrum auction.
It is only going to be a week--is it not coming through?
Mr. Walden. Yes, you have got to get it really close.
Really close. There you go.
Mr. Wheeler. You know I have seldom been accused of not
projecting.
One week from today the green flag goes down on the
incentive spectrum auction. As the committee has noted, this is
the first time this has been tried in the world.
This committee developed the authorizing statute and you
all have been very involved in the intervening years as the
pieces of the puzzle were being built. I would be terribly
remiss if I didn't mention the incredible work of Gary Epstein
and the Incentive Auction Task Force at the FCC in this regard.
Gary and Howard Symons, along with an A plus team, have rustled
wrestled with issues that no one ever before has had to deal
with and it brought us to the threshold of this historic
auction.
Now, many have asked about the impact of the D.C. Circuit's
decision that Latina Broadcasting should be provisionally
certified to participate in the auction. That decision will not
delay the March 29th start date for participating broadcasters
to make their initial commitments.
After March 29th, as we always planned, the auction team
will analyze the initial commitments and calculate the initial
clearing target. We said this process would take 3 to 4 weeks.
The late hour inclusion of Latina will require us to update our
data files and ensure that the auction system is properly
functioning with the updated data prior to circulating the
initial clearing target.
Staff is working through the operational effects of
including Latina so that we can make those updates. But we have
always planned the auction bidding in the reverse auction will
begin in May and we still expect that will happen.
Insofar as the forward auction, in which the wireless
carriers participate, we will proceed with the previously
announced schedule. There are 104 parties that have expressed
interest, a 50 percent increase over the number of qualified
bidders in the record-setting AWS-3 auction. Of course, not all
applicants may become qualified bidders but we are currently
working with them and plan to have a final list by April 6th.
The forward auction, of course, will follow the close of the
reverse auction.
In the coming weeks, we will continue our bidder education
and training activities so that both reverse and forward
auction bidders have plenty of time to become familiar with
bidding systems before the respective auctions begin.
We are finally at the point where we move from the
theoretical to the real world. For months, various hypotheses
have been put forward predicting one effect or another to
happen in the auction. Next week, the wisdom of this committee
in creating a marketplace that will begin to deliver market-
driven decisions to replace all those studies and theories with
real marketplace conclusions will begin.
I look forward to discussing this and other issues with you
today. But before I conclude, I want to once again reiterate
the need for Congress to become involved in the ability of
Next-Generation 911 to protect Americans. Twenty-first century
life-saving is being blocked by the realities of getting beyond
20th century technology. We at the FCC have done all in our
power on this topic, including convening a year-long task force
to report on the challenges being faced. That report is now
complete and has been submitted to this committee. We look
forward to working with you on this important priority.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Wheeler follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Walden. Thank you, Mr. Chairman.
And now we go to Ms. Clyburn for your opening statements.
Commissioner, go ahead.
STATEMENT OF MIGNON CLYBURN
Ms. Clyburn. Thank you.
Chairman Walden, Ranking Member Eshoo, distinguished
members of the subcommittee, please allow me to begin by
offering my thoughts and prayers to the families and victims of
this morning's attacks in Brussels.
I am grateful for the opportunity to appear before you this
morning.
Competition, competition, competition. It is a phrase we
have heard Chairman Wheeler repeat time and time again but
today, I wish to preview an axiom of my own: community,
community, community.
In communities across this nation, be they urban or
suburban, rural or tribal, there is a communications divide, a
divide when it comes to broadband access, affordability and
infrastructure and a divide when it comes to the speeds
necessary to take advantage of all the internet has to offer.
This lack of connectivity has disadvantaged so many of our
communities that Congress and the Commission wisely decided to
act by taking a few simple steps to help bridge these chronic
divides.
First, allow me to applaud the leadership of this Committee
as you consider commonsense proposals to streamline and lower
costs associated with the deployment of broadband. I stand
ready to work with you in support of bipartisan proposals that
will speed the deployment of broadband to more Americans.
Second, I am pleased to have worked collaboratively with my
colleagues Chairman Wheeler and Commissioner O'Rielly to create
a blueprint for rate of return carriers so that rural
communities are not left behind.
Third, and this is critical, once connected broadband
service must be affordable. The Commission has a statutory duty
to ensure that services are affordable and that low-income
consumers have access to advanced services comparable to those
available in urban areas. But for far too long, the Commission
has fallen short of this directive. We have the capacity,
however, to change this.
The chairman has circulated an order that, if adopted,
would put Lifeline on the soundest footing of all of our
universal service programs. The proposal seeks to achieve this
by declining support to providers, unless a neutral third party
has determined that a household is eligible, eliminating
duplicates, and requiring minimum standards.
Now, my office has been inundated with concerns about the
call for minimum standards, particularly for mobile voice, but
the strongest part of the FCC's process, one that is the envy
of regulators from across the globe is that our process enables
parties to give and receive feedback. If parties believe that
the current proposal does not strike the right balance, I have
been clear from the beginning that I am open to taking and
making appropriate adjustments and I plan to live up to that
promise. I am committed to providing qualified Lifeline
consumers with choice and competitive 21st century options. And
I am committed to addressing those outstanding concerns that
reflect the input of our state regulatory partners, as well as
those forward-looking providers who are engaged and committed
to real reform.
Finally, I am excited about the possibilities of 5G and its
ability to fundamentally transform the way we live and interact
with each other. I believe that the best way to deploy spectrum
and the infrastructure required to deploy those 5G services is
for the industry to talk with local governments and
communities, for them to find out what the specific needs of
the communities are and coordinate with them on how a 5G future
can actually help those communities address their short- and
long-term needs. Working together on these and other
initiatives will bring communities closer together, ensuring
that they are better connected and ready for the challenges
facing them.
Thank you, again, for the opportunity to speak with you
this morning and I look forward to answering any questions you
may have.
[The prepared statement of Ms. Clyburn follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Walden. Thank you, Commissioner. We appreciate your
service on the Commission and your comments this morning.
Now, we go to Commissioner Rosenworcel. Good morning.
Welcome. We are glad to have you here. And please go ahead with
your testimony.
STATEMENT OF JESSICA ROSENWORCEL
Ms. Rosenworcel. Good morning, Chairman Walden, Ranking
Member Eshoo, and members of the committee. Thank you for
having me here today. And let me add my best wishes to the
chorus for Ray Baum.
Last week I had the privilege of speaking in Austin, Texas
at South by Southwest. It is a festival for the connected, a
place to get a glimpse of the future. From virtual reality to
robotics, it is all there on the streets of Austin.
Last week I also spent time in California in a rural
farming community in the Coachella Valley. It is a place where
most roads lead to fields but where broadband has not made its
way to most households.
Now, I can say with confidence I am probably the only
person who was in both of those communities last week. But as
dissimilar as they seem, they have something in common. They
both know that future lies in connectivity. They both know that
access to modern communications is no longer a luxury. It is
where we create. It is where we innovate. It is a necessity for
full participation in civic and commercial life.
Now expanding this access is front and center at the FCC.
We will shortly begin work on the world's first spectrum
incentive auction. We will have work to do to repack our
nation's broadcasters. We are updated our universal service
policies and we are exploring spectrum frontiers for 5G
wireless service.
But I want to focus on two things we can do right now that
will make a difference for the least connected and most-
connected among us. We can make more space for Wi-Fi and we can
help bridge the Homework Gap.
First up, Wi-Fi. The 2.4 gigahertz band, where Wi-Fi makes
its primary home is getting mighty crowded. The demand for 5
gigahertz Wi-Fi is also growing. So, before we overwhelm Wi-Fi
as we know it, we need more efforts to secure more unlicensed
spectrum. There is no shortage of reasons why this is a good
idea. Wi-Fi democratizes internet access. It helps wireless
carriers manage their networks through the offloading of
traffic and it encourages permissionless innovation, just like
what I saw all last week on the streets of Austin. And it is
responsible for more than $140 billion in economic activity
every year.
But historically, the legislative process has overlooked
the value of unlicensed spectrum because it gets low marks in
the scoring process at the Congressional Budget Office. Yet,
this accounting misses the mark. It is outdated because the
broader benefits of unlicensed spectrum to the economy are so
great. So in any effort to increase the licensed spectrum
pipeline, we need to explore a cut for unlicensed. Call it the
Wi-Fi dividend.
And right now at the FCC, we have a golden opportunity for
a Wi-Fi dividend in the upper portion of the 5 gigahertz band.
We have a consensus framework for testing this band for
unlicensed use, while also protecting incumbent efforts to use
it for vehicle safety. So, we need to work now with our
colleagues at the Department of Transportation and the
Department of Commerce and get this testing underway.
We also have unlicensed opportunities in the guard bands in
the 600 megahertz band and millimeter wave spectrum at 64 to 71
gigahertz. We need to seize all of them.
Second, I want to talk about another issue that matters for
the future of connectivity and that is the Homework Gap. Today,
roughly seven in ten teachers assign homework that requires
access to the internet but FCC data suggests that as many as
one in three households in this country do not subscribe to
broadband service. So, think about those numbers and where they
overlap. That is what I call the Homework Gap.
So, if you were a student in a household without broadband,
just getting homework done is hard. Applying for a scholarship
is challenging. And while some students may have access to a
smartphone, let me submit to you that a phone is just not how
you want to research and type a paper, apply for jobs, or
further your education.
That is why the Homework Gap is the cruelest part of our
new digital divide. But it is within our power to bridge it and
more Wi-Fi can help. In fact, in Coachella Valley, where I was
last week, they are using Wi-Fi on school buses and turning
ride time into connected time for homework. But more can be
done. And modernizing a Lifeline program to support online
access in households with school-aged children is critical. And
I think the sooner we act, the sooner we bridge this gap and
give more students a fair shot at 21st century success.
Thank you.
[The prepared statement of Ms. Rosenworcel follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Walden. Thank you.
Now, we will go to Commissioner Pai. We are honored to have
you before the panel again this morning. So, please go ahead.
STATEMENT OF AJIT PAI
Mr. Pai. Chairman Walden, Ranking Member Eshoo, members of
the committee, and the indefatigable Ray Baum, thank you for
holding this hearing and giving me the opportunity to testify.
I want to focus this morning on two issues where this
subcommittee has led and where, unfortunately, the FCC is
falling behind: FCC process reform and broadband deployment.
I first want to begin by thanking the subcommittee for its
long-standing focus on FCC process reform. While I firmly
believe that the agency is at its best when it operates in a
bipartisan, collaborative and transparent manner,
unfortunately, the agency has not lived up to that standard
recently. First, the FCC continues to be run in a partisan
fashion. Since December of 2013, there have been 20 separate
party-line votes at our monthly meetings. That is twice as many
as under Chairmen Martin, Copps, Genachowski, and Clyburn
combined.
Second, collaboration has fallen by the wayside. During my
first 18 months on the job, Chairman Genachowski and Chairwoman
Clyburn led us to consensus 89.5 percent of the time on FCC
meeting items. Over the past 2 years, that number has dropped
precipitously to 56.4 percent.
Reflecting this shift, the Chairman's Office frequently
shares non-public information with the press and select outside
parties, while leaving commissioners in the dark. For example,
2 weeks ago, FCC leadership shared the chairman's Lifeline
proposal with the New York Times and promoted it on a call with
reporters before sharing it with my office. That is hardly an
opening for good faith collaboration and it epitomizes how
business is now done at the agency.
Third, the FCC continues to shun transparency. Just last
week, the chairman's office denied a request from me and
Commissioner O'Rielly to release the Rating Return Form Plan
before we vote. Even though Commissioner O'Rielly helped write
it and even though real advocates have told us that, ``it is
absolutely essential to see the written words on the page to
understand the actual effectiveness of the reforms.''
Or take the idea of being more transparent with our
enforcement process. The FCC has had success in recent years
proposing headline-grabbing fines but its follow-through has
been abysmal. Since 2011, the FCC has proposed over $374
million in fines but it has collected only $7.8 million. That
is a meager 2 percent recovery rate. Only with additional
transparency can the public and this subcommittee hold the FCC
accountable for this colossal failure.
Now, none of this has to be this way. When I testified
before this subcommittee a year ago, there was widespread
agreement that the FCC's process was broken. The chairman
himself acknowledged that legitimate issues had been raised.
And he announced a process reform task force.
I took this project seriously and I suggested reforms.
Among other things, I suggested that the chairman provide final
versions of an order a set time before we vote. I proposed that
every commissioner respond when one of us proposes edits. And I
suggested that every commissioner provide his or her input by a
date certain.
After participating in dozens of meetings, the chairman's
task force has accomplished nothing. Not a single reform has
been made one year later. Indeed, the task force has proven to
be a Potemkin village designed to persuade Congress that the
agency is doing something on process reform and, hence, that
legislation and oversight aren't required. But at this point,
the only way to ensure meaningful FCC process reform is through
legislation and vigorous oversight.
I want to turn next to the topic of broadband deployment
and I salute the subcommittee for its leadership in this area.
For its part, there is more that FCC can and should be doing.
On spectrum, we need to open the 5 gigahertz band to unlicensed
innovation, as Ranking Member Eshoo and I recently called for
in a joint op ed.
We need to move forward with another 12,500 megahertz of
millimeter-wave spectrum and we need to launch a rulemaking to
study spectrum above 95 gigahertz.
On the wireline infrastructure side, we must continue to
reform our rules for pole attachments. Let's reduce the cost
that utilities charge internet service providers for preparing
the poles and conduit. These make-ready costs, as they are
known, are a major barrier to competitive entry and the
subcommittee rightly targeted them as ripe for reform.
Let's exclude a pole owner's capital costs when
establishing pole attachment rates. This would reduce broadband
prices and spur deployment.
And let's start adjudicating pole attachment disputes with
dispatch. Although the Commission has a special enforcement
docket for these cases, complaints tend to languish. We have
three from 2014 and two from 2015 still pending. We need to be
adjudicating those in weeks not years.
Chairman Walden, Ranking Member Eshoo, members of the
subcommittee, thank you once again for holding this hearing. I
look forward to answering your questions and working with you
to ensure a better future for all Americans and, particularly,
the Kansas Jayhawks.
[The prepared statement of Mr. Pai follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Walden. Wow, that last point kind of got slipped in
there.
Speaking of which, Chairman Wheeler, I didn't see Ohio
State in the NCAA Tournament but my Ducks are certainly there.
ok, now, we will move right along to Commissioner----
Mr. Wheeler. Can I duck that question?
Mr. Walden. Yes, we have got a long way to get even during
the--anyway, back to football.
ok, now we go to Commissioner O'Rielly. Good morning and
set us back on course.
STATEMENT OF MICHAEL O'RIELLY
Mr. O'Rielly. Thank you, Chairman Walden, Ranking Member
Eshoo, members of the subcommittee for the honor of appearing
before you today. I add my comments about Ray and he knows my
thoughts about him as well.
Let me start with the issue of FCC process reform, as my
colleague did. I find it necessary to reiterate that my efforts
are not about undermining the chairmanship. As I have
previously stated, even if every one of my proposals were
adopted, the chairman would still control the agenda and win
every vote. Additionally, this is not a response to the process
or outcome of net neutrality. These problems existed prior to
that particular item and remain today. Instead, my efforts
attempt to empower the public to engage with the Commission
through a fair process, rather than one deeply slanted to
ensure that only the right insiders get information and can
influence outcomes.
At the same time, we must ensure that the rights of
commissioners are not overrun by the chairman and the
entrenched bureaucracy. Take, for example, our rules
prohibiting all employees, including commissioners, from
releasing non-public information about our proceedings. It
sounds noble until you realize that the current practice
prevents testing out ideas and exchanging creative ways to
consider an issue. Moreover, the rule is being applied in a
discriminatory manner to ensure that the chairman and certain
staff can push selected information to favored parties, while
the commissioners remain muzzled.
As for the chairman's process review task force, it is
important for the subcommittee to realize what is actually
occurring. The chairman came before this body three times last
year and essentially said that my ideas were legitimate and he
was going to consider each one through a special task force.
The reality is, 1 year later that task force has shown its real
purpose to diffuse the debate and deflect legislation in
Congress. Just Friday, ironically, the last day of so-called
Sunshine Week, the message was delivered that the general
counsel, chairman, and other majority commissioners, have
objected to almost each and every idea I raised. My proposal is
to beef up written rationales for statutory authority, provide
a check for instances when delegated authority is being taken
too far, represent the opposing viewpoints when allowing
outside witnesses at open meetings, or give the public more
information about proposals being considered were all denied.
They were even unwilling to agree to such basic courtesies as
holding off on press rollout until an item has actually been
circulated to commissioners.
In sum, all the chairman's leadership team can agree to do
is minutiae, such as setting expectations for timelines to post
proposed edits on our internal email chains.
This demonstrates that there is no intention of making any
real changes absent congressional directives that would improve
the ability of Americans to participate in the government.
To the extent the subcommittee reads additional areas to
review, I would observe that the Office of General Counsel has
turned from an office focused on providing mutual legal
analysis and defending Commission items before the courts into
what it believes is effectively a sixth commissioner, with the
ability to supersede the views of duly appointed and sworn
commissioners. This is harmful to the FCC as an institution and
will ensure that impartiality and rule of law are forever
limited to the realm of secondary considerations.
Turning to substance, I applaud the subcommittee for its
extensive efforts to increase the amount of commercial spectrum
and remove barriers to the deployment of wireless facilities.
Part of my attention is focused on opening up millimeter waves
for the Next-Generation networks. Accordingly, all potential
bands should be considered and simple and proven licensing
frameworks should be adopted to ensure maximum investment and
innovation.
The Commission also appears on track to meet its commitment
to provide further relief for small cell siting but more can be
done to increase infrastructure deployment, namely, concluding
the decades-old twilight tower review and addressing localities
that continue to hinder facility siting. In the same vein, we
must increase our efforts to open up the 5.9 gigahertz band for
unlicensed use. Combining these frequencies with adjacent 5
gigahertz spectrum would permit increased throughput, speed and
capacity. It is not my intention to prevent or undermine
dedicated short-range communications deployment, as sharing can
occur without causing harmful interference to safety of life
applications.
Thank you very much, Mr. Chairman.
[The prepared statement of Mr. O'Reilly follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Walden. Mr. O'Rielly, thank you. And we appreciate all
the testimony of all the members and the chairman.
Commissioner, Pai, I have several questions about the
privacy NPRM you are considering. Press reports indicate that
the predicate is an assumption that ISPs have unique access to
user data, thus requiring regulation. Is this true?
Mr. Pai. Thank you for the question, Mr. Chairman.
Unfortunately, under the FCC's current rules, I am prohibited
from disclosing even to you, the chairman of the subcommittee,
the particular details of the proposal unless the chairman
expressly authorizes it.
Mr. Walden. Seriously, you can't disclose even to us?
Mr. Pai. Under the current FCC rules, that is correct.
Mr. Walden. Chairman Wheeler, could you address this? I am
confused as to why your fellow commissioners are not allowed to
answer questions as to what is in the privacy proposal you have
circulated but I understand you and your media team and others
are free to speak about it in public.
This, to me, is an issue I know it is running that way.
Perhaps it has run that way in the past but it seems peculiar
that the other commissioners can't comment but you can. Will
you let them comment? Can you address this whole----
Mr. Wheeler. So, I don't think that I heard Commissioner
Pai answer the question you asked him, which was is there a
difference between the data that an ISP sees and one an edge
provider sees.
Mr. Walden. So, what I said is that I had several
questions.
Mr. Wheeler. Answering that question has nothing to do with
what any specific paragraph of a proposal might say.
Mr. Walden. Right.
Mr. Wheeler. Point one. If I may, point two: There is a
full-throated, already, discussion about these kinds of
concepts which don't translate into the specific language.
And three, with respect, sir, three, the Notice of Proposed
Rulemaking is very specific and the reason you have a Notice of
Proposed Rulemaking is so specific language can be put out so
that it can be commented on by the public and have a full-
voiced debate, which we will have on the specific language of
this item starting next week.
Mr. Walden. I think it is intriguing to me and
disheartening to me that the Commission is set up in a way that
the chairman can propose something, the chairman can talk about
something, and I am not picking on you, personally, here, but
just the way the system works. It is like if I proposed a bill
circulated among all of us and then my friend, Mr. Doyle, is
prohibited from communicating on it publicly or Mr. Pallone, I
think you would have a different view of our process.
Commissioner Pai, is that not a corollary that, in effect,
that is what happens? A chairman of the FCC, take Mr. Wheeler
out of it, any chairman can propose something; that chairman or
chairwoman can comment on it ad infinitum, the New York Times,
anybody, but you, as a commissioner can't, even to us?
Mr. Pai. That is exactly right, Mr. Chairman. It is a
bizarre state of affairs where we have to pass something before
the American public is allowed to see it, with a narrow and
particularly notable exception of the chairman and his staff
being able to push out misleading fact sheets, do press calls,
and otherwise push their agenda before this full-throated
discussion has had a chance to terminate.
Mr. Walden. Commissioner O'Rielly, do you encounter the
same problem?
Mr. O'Rielly. Yes, sir. I have written about this and I
believe the chairman has an opportunity to write a simple
letter to authorize all commissioners to speak as needed on any
item through the end of his tenure. He has declined to do that,
so far.
Mr. Walden. Have other chairs done that?
Mr. O'Rielly. They have provided more specifics on
particular items but what I am suggesting is that the current
process is just simply broken. I am not sure that other
commissioners or other chairmen have provided such descriptions
as my colleague has provided where you are getting the blog,
you are getting the press rollout, you are getting the fact
sheets that are not accurate.
Mr. Walden. And you are prohibited from commenting?
Mr. O'Rielly. I am actually prohibited from correcting the
fact sheets when people come and meet with me. I can't say you
know I know you think it is going this way but actually that is
not true. I am not allowed to tell them gee, you are completely
wrong; I have read the item, that is not right.
Mr. Walden. This just flies in the face of open transparent
government, in my opinion, and needs to change. And Chairman, I
would hope you would take Commissioner O'Rielly's comments to
heart. I don't know if we have to pass something here, put an
appropriation bill or what, but this is 2016. This is not 1816.
We want an open and transparent process so the public can
comment. We do it or we try to the best of our ability here by
putting bills out for discussion. We have rules that are made
available. Everybody has a chance. I think it just needs to
change.
I want to ask one other question in the 7 seconds I have
left and it is to you, Mr. Wheeler. The quadrennial review,
broadcast ownership rules due by June 30th. I know you all have
had a lot on your plate. I have commended you for the work on
the auction and all but this one is a burr under the saddle, 8
years late. What is it going to take to get a quadrennial----
Mr. Wheeler. I intend to have it on the floor in the
schedule that I gave you, sir.
Mr. Walden. You will get it done?
Mr. Wheeler. And we've been working on it for months.
Mr. Walden. So, it is going to be done this time by June
30th?
Mr. Wheeler. I am going to put it on the floor.
Mr. Walden. All right, my time has expired.
We will now go to the ranking member on the subcommittee,
Ms. Eshoo, for questions for 5 minutes.
Ms. Eshoo. Thank you, Mr. Chairman.
Chairman Wheeler, you have and the full commission has some
huge issues before it. So, I want to go through three of them:
copyright--this all has to do with the set top box proposal--
the issue of copyright; the issue of privacy; and the issue of
impact on minorities both from the professional side and from
the consumer side.
First, on copyright. Copyright is important to all of us.
We know that it is both the life blood of the more than one
industry and they depend on it being protected.
Now, there are critics in all of this and that is not a
surprise. When a major shift is proposed and disruptive, it is
disruptive to a $20 billion income to the cable industry. So,
of course people are going to fight very hard because there is
a lot of money on the table.
But on the issue of copyright, does anything about this
arrangement and the FCC's proposal change under your proposed
rules, relative to copyright?
Mr. Wheeler. Thank you, Ms. Eshoo, the answer is no. And
let me just excerpt paragraph 71 of the proposal.
To achieve the statutory mandate, our regulations must
ensure that navigation devices 1) have content protection that
protects content from theft, piracy, and hacking; 2) cannot
technically disrupt, impede, or impair the delivery of
services. It goes on beyond that but the fact of the matter is
that we have specified copyright protection is essential and
can be maintained. And I would submit that there are tens of
millions of examples of that called iPhones, iPads, smart TVs,
where copyright protection has been maintained through set top
box-like activities.
Ms. Eshoo. Now, does the FCC give away any new or unpaid
rights to distribute video programming?
Mr. Wheeler. No, ma'am.
Ms. Eshoo. OK, the answer is no. Now, in your first answer,
are there additions to the protection of copyright or is it the
same set of principles and rules that apply today?
Mr. Wheeler. Well, the interesting thing is that we
actually took the language from the current cable card license,
which has been very successful in protecting copyright.
Ms. Eshoo. OK. Now, on to the whole issue of minority-
focused programming. Critics alleged that the FCC's proposed
rule, and you know this, would actually limit the availability
of minority programming and content. Now, Robert L. Johnson and
our members have a copy of the letter that I received last
night. I think it is an important letter to read and I would
like to ask for unanimous consent, Mr. Chairman, for Mr.
Johnson's letter to be part of the record.
[The information appears at the conclusion of the hearing.]
Mr. Walden. Without objection.
Ms. Eshoo. Thank you very much.
Now, why is this issue even being raised? There is a woeful
record under what we are operating under now because the cable
companies have really moved at a glacial pace in their efforts
to make more minority programming available to consumers.
Essentially, there are two or three large cable companies
effectively determining today what the American public sees and
how they see it.
So, I don't know why there is a defense of this abysmal
record when we have an opportunity to open new doors to diverse
programming. Do you want to respond to this?
Mr. Wheeler. Well, thank you, Ms. Eshoo.
Ms. Eshoo. Or would you respond to this, please?
Mr. Wheeler. There are four African American-owned channels
in the 500-channel universe on a cable system.
Ms. Eshoo. Four out of how many?
Mr. Wheeler. In a 500-channel universe. And most of them
are on the most expensive tier, by the way.
But the interesting thing here is that there are literally
hundreds of programmers who are seeking to get on and they are
having the door slammed in their face. So the question is how
do you create equal opportunity so that these programmers can
have an equality of standing with the few handful that are
there and have competition and opportunity?
Mr. Walden. The gentlelady's time has expired.
Ms. Eshoo. Well, my time has expired. Thank you, Mr.
Chairman.
Mr. Walden. Thank you. We will now go to the vice chair of
the full committee, the gentlelady from Tennessee, Mrs.
Blackburn, for 5 minutes.
Mrs. Blackburn. Thank you, Mr. Chairman. And I wanted to
first raise an issue involving a consortium of schools in
Tennessee, USAC has denied millions of dollars in E-Rate
funding to the Sweetwater Consortium and many rural schools
could be detrimentally impacted. And the school districts stand
to be financially crippled by the denial and, of course, the
education opportunities limited and suffer significantly with
such a decision.
The Sweetwater Consortium just received a final decision
from USAC on Friday denying their appeal and my office is
continuing with other offices to gather information from the
interested parties and we expect that this is going to end up
with you all before very long.
And Mr. Chairman, the Tennessee delegation wrote the FCC
last year and received a response on July 21, 2015. We
appreciate that. I understand that USAC needs to be a thorough
watchdog of the taxpayer dollars and that the commission is not
yet in a position to offer an opinion on the merits of USAC's
review and you have noted that in your response to us. However,
I am concerned about the amount of time that the process has
taken and I know Chairman Wheeler, you also expressed that
concern in our reply and I will just say that we look forward
to working with you to find a resolution to this.
Commissioner O'Rielly, I want to thank you for your letter
or it was your statement of dissent on the choices in the
AllVid issue. And I agree with you that it is regulation by
speculation.
And Mr. Chairman, you just said you know that hundreds are
seeking a way to get on, talking about some of the independent
producers and the content producers that are seeking an avenue
for the content they produce. And I have to tell you you don't
create equal opportunity by not paying people for what they
have created.
And Chairman Pai, coming to you, I will have to tell you, a
lot of my content producers that are there in Tennessee, they
are very concerned about the set top box proposal and about
honoring copyright. The text of the proposal is something that
has caused them tremendous concern and they talk about it and
they bring it up to me. The chairman had said oh, we are going
to honor those copyright laws but then they are reading this
and they are saying I don't see how this matches because it
would mandate that pay TV providers transmit to third parties
all the programming the pay provider's license, allowing third
parties to use that without obtaining the permission of the
copyright holders or of compensating them.
And you know one of the concerns is the way the proposal
explicitly declines to prohibit third parties from replacing or
altering advertising or manipulating the content.
So, I would like for you to respond to me. Doesn't the
proposal exceed the FCC's authority and create conflicts
between commission regulations, and copyright, and contract
law?
Mr. Pai. Congresswoman, I believe it does and your
constituents are not alone. One of the most notable features of
this proceeding is that we heard from a variety of minority
programmers, networks like Ovation, individuals like Eva
Longoria, minority advocates like MMTC, as well as members of
this body, 30 members of the Congressional Black Caucus, for
instance, who told us to a person that this would compromise
the legitimate intellectual property rights of content creators
and minority content creators, in particular, had in their
creations.
Mrs. Blackburn. I thank you for that. I would hope that the
Commission will look very closely at what some of these
innovators and content creators are pushing forward to the
marketplace and protecting their copyright laws.
To do this where you are looking at the set top box
proposal that is out there, I think is a dangerous step. It
diminishes the value of content. It diminishes the ability of
those who have created this to be appropriately paid. It
undercuts and undermines contract law. And for people who are
innovating in this space, as we have more delivery avenues that
are opening up to us, I think that the proposal that is out
there is a dangerous proposal when it comes to the validity and
the value of contracts.
And I yield back.
Mr. Walden. The gentlelady's time has expired.
We will now go to the ranking member of the full committee,
Mr. Pallone for 5 minutes.
Mr. Pallone. Thank you, Mr. Chairman.
I wanted to start with Commissioner Rosenworcel. I wanted
to publicly thank you for coming up to my district right before
that last major snowstorm to discuss the Sandy Act and how to
improve communications during disasters.
One idea we had coming out of these discussions is whether
we could take a city in the area impacted by Sandy, where we
could work with industry and government officials to develop
best practices that could be used across the country. So, I
just wanted to ask you, do you think that that would be a
worthwhile experiment.
Ms. Rosenworcel. Thank you, Congressman Pallone. So, I have
been in your district just after Hurricane Sandy and now I can
say I have been there just before Snowstorm Jonas. So, I know
that Mother Nature's wrath visits the New Jersey coastline with
some frequency.
And I think that developing a smart city that is a
resilient city on the coast is a terrific idea and my hope is
that by preparing for the worst, we can take those best
practices from New Jersey and export them all around the
country.
Mr. Pallone. Thank you.
I wanted to ask Commissioner O'Rielly about pirate radio. I
wanted to personally thank you for leadership in addressing
this spike in pirate radio stations. And the last time you were
here, we talked about how this is an important issue. And I was
hoping to be able to introduce a bill that would put a stop to
these illegal signals.
I know you have a long background in crafting legislation.
Do you have any suggestions for what to include in a bill like
that?
Mr. O'Rielly. So, one of the issues that I have been
working on and the Commission has been gracious and the
chairman has been gracious in helping me facilitate is getting
to some of the money side of the equation. How do we dry up
money for pirate radio broadcasters? And I think that is
something where we can focus in legislation and we are working
with your good staff in trying to target how to get at the
money part from--we have a number of people that are
advertising. We have political campaigns that are advertising
on pirate radio stations. We have concert venues that are
advertising. We need to figure out how best to go after the
money side.
But I want to be careful on that. I want to make sure that
it is narrowly targeted so that we don't go after those who are
trying to a good job that are unfortunately captured in that
universe, such as building owners and renters. We want to go
after those that are facilitating, not those that may have
provided some----
Mr. Pallone. Thank you. Well, we will work together.
Mr. O'Rielly. I would like that.
Mr. Pallone. Chairman Wheeler, I released earlier this year
a discussion draft bill called the Viewer Protection Act, which
we have discussed that would make sure that consumers keep
access to the channels that stay on the air after the incentive
auction. And while I hope this bill will be bipartisan, I have
heard from some of my colleagues that they want to wait until
we know how many broadcasters will need to be repacked.
At the same time, it is critical that the bill is
introduced with enough time to go through regular order. So, it
is really when the repacking process begins.
So, I think it would be helpful for us to all better
understand the schedule for the auction going forward. Could
you walk us through your estimate of how the next few months
would play out paying particular attention to when we would
know how many broadcasters will need to be repacked?
Mr. Wheeler. Thank you, Mr. Pallone.
As I said in my statement, the reverse auction bidding will
start in May. Exactly when in May, we don't know yet. It
depends upon what we find out when we are sorting through all
this data to come up with a channel plan.
How long it lasts after that is a function of the
marketplace. If I were a betting man, and I have no insight
into this because it is totally in control of the market, not
in control of the Commission, but I think we are looking at, if
we start in May, sometime late summer, early football season
that we have a resolution. But again, that is something that is
out of my control, our control and that the market will
determine.
Mr. Pallone. All right. Well, thank you all. I appreciate
your input on all these questions. I yield back, Mr. Chairman.
Mr. Walden. The gentleman yields back. The chair now
recognizes the gentleman from Texas, the former chairman of the
committee, Mr. Barton, for 5 minutes.
Mr. Barton. Well, thank you, Mr. Chairman, and I welcome
the Commission to the Energy and Commerce Committee.
So far, nobody is asking one question about your budget,
which is, theoretically, why we are here. And I am going to
continue that tradition and not ask you any questions about the
budget.
My question, though, is extremely serious, actually. This
morning we had three explosions rock Brussels airport and metro
station. We think at least 26 people have been killed. There
are over 100 that have been injured. The last time the
Commission was before this subcommittee was just after the
Paris attack and I asked Mr. Wheeler then what the committee
could do in conjunction with the FCC to try to counter these
terrorist attacks in the way that they use the internet to
broadcast their terrorism.
Mr. Commissioner, Chairman, you mentioned that maybe the
Congress needed to update the definition of what a lawful
intercept is under CALEA. Have you all looked at that since you
were before the committee? If so, do you have any
recommendations for the committee?
And I want to be clear, I am not trying to ask the FCC to
shut down the Internet but I do think that in an open society
you can strike a balance between openness and protecting the
public good. So, I am going to ask the question to the chairman
but if the other commissioners want to chime in, you are very
welcome to.
Mr. Wheeler. Thank you, Mr. Barton. And yes, this is a
tragic time and a terribly serious issue.
The Congress has said to the FCC that our responsibility--
and I use that word not just our authority--our responsibility
is to make sure that in the networks that we regulate there is
the equipment to carry out lawful intercepts. That is the
definition that Congress has given us and the scope of our
authority.
The question of what is a lawful intercept is something
that is beyond the statutory authority that you have given us.
The discussion that we had last time was to the effect that it
is up to Congress to make the determination as to what is the
scope of a lawful intercept. But I assure you, sir, that we
will fully take the steps necessary to make sure that the
equipment that is required to be able to make that lawful
intercept is in place.
Mr. Barton. ok. Any of the other commissioners want to
comment? ok.
Something a little bit more mundane, this issue of set top
boxes, which the chairman alluded to and Congresswoman
Blackburn alluded to. I am co-chair with the Privacy Caucus
here in the House. And there is real concern that you are going
to make it possible, perhaps inadvertently, to allow the
collection of large amounts of data, perhaps even megadata
without the consent or knowledge of the customer or of the
client.
Mr. Chairman, you were not real forthcoming to our
subcommittee chairman, Mr. Walden. Can you at least acknowledge
that it is an issue and you have got very cognizant to try to
whatever the Commission does, protect the legitimate privacy
rights of the individual?
Mr. Wheeler. Without a doubt, Congressman. And let me see
if I can be specific on this because if you say I wasn't
specific enough.
Section 631 of the Act establishes privacy expectations on
cable operators and satellite providers. And they then have
that relationship with Roku and TiVo and folks that they are
now working with to say y in their contracts with them, you
will maintain the same kind of privacy protections that we do.
And what we are saying is that any competitive box, set top box
or app, has to be able to make the same kinds of assurances and
that if those assurances are not made, that the cable operator
then doesn't have to do business with that box and that just
like smart TVs and tablets and smartphones, all have that same
kind of ability to collect information and have the FTC
oversight, that if the protections that we have put in place
are still not sufficient, that the FTC has authority to do
something. And as recently as last week, the FTC put out a
notice to smart TV manufacturers that they intended to.
Mr. Barton. ok, my time has expired. Thank you, Mr.
Chairman.
Mr. Walden. Thank you, Mr. Barton.
We will now turn to the gentleman from Pennsylvania, Mr.
Doyle, for questions.
Mr. Doyle. Thank you, Mr. Chairman. Chairman Wheeler, I
want to thank you for your leadership on special access and for
advancing this issue through a very thorny process. It is
critical that we get this right and it is critical that we get
this done. I believe your team is working diligently on this
proceeding. I would only ask that as you work through this
issue, you be sensitive to the harm that is being done at this
moment to competition across the country and that as you
proceed, you keep in mind that this is an ongoing issue that is
not only hurting competitors but hurting consumers as well.
With regards to Lifeline, as you move forward with
Lifeline, I have asked you to be mindful and ensure that low-
income Americans can still use this program with no additional
cost. Opening up the program to more competition and enabling
participants to choose how they use their subsidy is great. But
I would ask you to take particular care to ensure that three
options remain available and that enough flexibility exists in
the program so that people don't lose their access to this
critical resource.
With regards to privacy, thank you again for moving forward
on this issue. I was happy to see the Commission take action in
the order to prohibit super cookies, as well as the enforcement
action it took on the same issue. However, I must say I was
disappointed to not see a prohibition on deep packet inspection
or a proposal to prohibit companies from manipulating consumers
into giving up their privacy for a discount on their bills.
Privacy shouldn't be a luxury for a few that can afford it.
So, as you move forward with this proceeding, I would ask
the Commission ensure that it is not enabling ISPs that charge
consumers for their own privacy.
And finally, on zero rating, I remain concerned about zero
rating in the marketplace. Studies have shown that consumers,
by far, prefer zero rated apps and services when faced with the
expense of busting their data caps. This gives ISPs a natural
advantage in the marketplace and enables them to choose winners
and losers.
I don't think that we need a blanket ban on zero rating but
when ISPs zero rate their own apps and when zero rating
programs are anti-competitive, consumers are being harmed. So,
I would ask, Chairman Wheeler, to encourage you to take action
to police these programs.
Now, I went through all this quickly to give you some time.
You and Commissioner Pai, you know Commissioner Pai said quite
a few things today that I think might have hurt your feelings
and I wanted to give you an opportunity to maybe comment on
your stewardship of the commission.
And also there seems to be a disagreement here on whether
or not on the issue of set top boxes that copyright is being
protected and that whether it is true that people can take
other people's content and not pay for it. So, in the remaining
2 minutes and 26 seconds, Mr. Chairman----
Mr. Wheeler. That is all I have.
Mr. Doyle [continuing]. The floor is yours.
Mr. Wheeler. Let me see if I can tick through a couple of
them. Number one, on the copyright issue. You know the
interesting thing is that there are today the equivalent of
competitive set top boxes available in the market. For
instance, Google Chrome. Now, a lot of things that we hear
about oh, this is Google's big plan to take over cable TV--
malarkey. The Google Chrome, which attaches in your port in
your TV to allow you to get things off of the web, does not
violate copyright, does not overlay commercials, does not do
all of the horrible things that everybody said a set top box
like that would do because copyright law is sacrosanct.
The second thing is I think the people would go crazy and
revolt if something like that happened. So, that is on the
copyright issue.
Secondly, on the process issue, there was an interesting
dichotomy of criticism that we have heard this morning. One is
that we have been operating in a unilateral fashion and not
being collegial. And the other is that the collegial efforts
that we have had to address process that hasn't resulted in a
consensus being built are somehow witness of a nefarious
intent. I find those two to be in conflict.
And so the other issues you raised, you are absolutely
right. Lifeline, we have to make sure that Lifeline is updated
and that it is available. Have I got time? The key thing here
is that digital is cheaper than analog voice. You notice that
every single consumer who signs up to LTE service, which is 80
some percent of Americans get free unlimited voice but if you
are a poor person, we are limiting what you can do. We are
saying you can't get on the internet. You can't have access. We
are going to stick you in this analog world. And that is one of
the things that we are going to take on.
Mr. Doyle. Thank you, Mr. Chairman. I am glad you feelings
weren't hurt.
Mr. Johnson [presiding]. The gentleman's time has expired.
I now recognize the gentleman from Ohio, Mr. Latta.
Mr. Latta. Thank you very much. And to the Commission,
thanks very much for being here today. And oddly enough,
Commissioner Pai, I am going to be talking to you and asking
some questions about set top boxes and integration band. It
seems like something that has been discussed quite a bit this
morning. As you know, Congressman Green and I were able to
secure language in stellar to eliminate the integration band in
order to rid the marketplace of outdated technology and to
foster greater competition innovation.
The FCC is now contemplating mandates that would leave
multichannel video programming distributors no choice but to
provide a box on top of the third-party device. This would once
again bring us back to the problems of integration band of
higher cost to consumers for devices and higher energy costs
for them as well. And in this committee room where we were
having the Secretary of Energy reports, he even said that about
higher energy costs.
He stated that the FCC should be seeking a boxless
solution, which I believe is the future of pay TV. Does the
apps-based proposal that was put forth through the Downloadable
Security Technology Advisory Committee, the DSTAC, get
consumers to a boxless world?
I want to ask you also, as you answer that question, what
we are looking at with the FCC's proposing, are we going
forward, backwards, staying static, and I think what the
consumers out there want to know is where are we going to be in
10 years, not where we were 10 years ago. Commissioner?
Mr. Pai. Thank you for the question, Congressman. I think
the best, if I could tackle the second question first, to
encapsulate what the FCC's approach has been is back to the
future. Instead of moving to an app-based world where consumers
can finally free themselves of this expensive clunky equipment
that consumes a lot of energy and doesn't provide the
functionality they want, the FCC is doubling down on 1990s
technology. And it is essentially going to force MVPDs, cable
operators and the like, to do one of two things. Number one,
either reengineer their entire network or number two, supply
consumers with a second box.
Now, I submit to you that the natural effect is going to be
the second. Reengineering a network is extremely expensive,
compared to simply supplying a second box. That is not what
consumers want to do. And so I would have hoped that the
agency, going to the first question, would have teed up in a
full and fair manner the other proposal that the Downloadable
Security Technology Advisory Committee proposed. One, to be
clear, was the majority's approach, which was to have this
1990s technology embraced yet again. But the other one was an
app-based approach. And instead, there is a very slanted three-
paragraph discussion in this huge document asking why the app-
based approach would end with the destruction of America and
other things bad. And I think if we embrace this in a full and
fair manner, allow the American people to comment, we wouldn't
be in the pickle we are in, where the former chairman of this
committee, Mr. Waxman just yesterday said that this approach is
a 20th century solution to a problem the market is already
solving on its own.
Mr. Latta. Why is that? Why did the FCC do that?
Mr. Pai. Well, I think frequently, the natural inclination
of the agency of late has been to solve problems that don't
exist. But secondly, I think that there is a recognition among
some people that this marketplace hasn't developed as expected.
And I completely agree with him. The reason is that this entire
marketplace is the creation of a 20-year regulatory framework
that is highly intrusive. And I would humbly submit that
technical mandates and agency micromanagement is not the way to
get us to the next stage of the digital video revolution.
Instead, we should embrace a more consumer-friendly approach,
an apps-based approach, for example, and let the marketplace
develop. You are free from some of these legacy regulations
that have simply held us back.
The set top box is not the way of the future. My kids are
not going to know what a set top box or some of this other
equipment is. What they will be familiar with is being able to
access the content they want on the device they want using an
app or other device that they want. That is the future, not the
1990s.
Mr. Latta. Let me follow up, Commissioner. Over the past
Congress--I have introduced a bill that required the FCC to
conduct a cost-benefit analysis at the time of the Notice of
Proposed Rulemaking and again at the time that the final rule
is issued. I think it is important for the public and the
Commission to have a better understanding of monitor impact of
the FCC rules.
In respect to the proposed set top box rules, I believe it
would be of great value to identify the cost and benefits this
rule would have on consumers and MVPDs, especially in small and
medium sized providers.
Did the Commission complete a cost-benefit analysis of this
rule?
Mr. Pai. It did not.
Mr. Latta. Why not?
Mr. Pai. I think, frankly, because if you objectively
tallied up the possible costs and benefits, it would be fairly
clear that the Commission's approach would have yielded,
ultimately, disadvantages to the consumer at the end of the
day.
Mr. Latta. Well, thank you very much and, as my time
expires, I yield back. Thank you very much.
Mr. Johnson. I thank the gentleman for yielding back. I now
recognize the gentleman from Iowa, Mr. Loesback.
Mr. Loesback. I apologize, Mr. Chair. I was thinking that I
was not going to go for a little bit yet.
But thanks to all of you for being here. I really
appreciate this conversation we are having. I was going to ask
about set top boxes but I think I am going to forego that one
this time. I think it has being covered pretty exhaustively.
I do want to say, Commissioner Pai, I am all for the
Jayhawks, too because I am an Iowa State alum but, hopefully,
the Cyclones are going to do well as well.
Mr. Pai. I didn't sign on to that, Congressman.
Mr. Loesback. That is ok. It is all right.
I do speak to former Congressman Jim Wright quite often
about these issues, as you can imagine.
But at any rate, and Commissioner Rosenworcel, in
particular, I know you are all concerned about rural broadband,
but thank you so much for your tremendous efforts on that
front. I look forward to seeing you in Iowa at some point down
the road as well, when we can chat with some of our folks in
Iowa who are particularly concerned about this. So, thank you.
What I would like to do is first ask Chairman Wheeler about
the enhanced transparency issue, having to do with broadband
development and small businesses. You have your particular
order that was out there but then I worked with Chairman Walden
and other members recently to get a bipartisan bill passed
where we have a different approach to that in terms of how we
define small business and extend the period for the exemption,
if you will, for these small broadband providers. And there is
really broad bipartisan support to make sure that we provide
the necessary regulatory relief to these folks so that they
really can in fact expand that broadband capability to as many
folks in these rural areas as possible.
And we are hopeful that the Senate will take this up and
that the President would sign whatever legislation comes out of
this. But if that is not the case, might it be true that the
FCC does intend to further exempt small providers from the
enhanced transparency rules?
Mr. Wheeler. Thank you, Congressman. As you know, we have
exempted them and I recently extended that exemption. There has
been a lot of talk about the transparency of process and
everything here. It is inappropriate for me to sit here and say
oh, yes, there will be an extension or whatever. We will go
through the process. We will build the appropriate record and
act accordingly.
Mr. Loesback. Right.
Mr. Wheeler. Just like what we have done thus far.
Mr. Loesback. Right, I am recognizing that there is that
bipartisan support here to extend it further, if you will.
Do any of the others here want to comment on that
particular issue at this point?
Ms. Clyburn. On that particular issue, as the chairman
alluded to, we are going through a Paperwork Reduction Act
process, which will look at and examine the impact on those
particular carriers. I think I believe it is 100,000 lines and
below. I was pushed for them being exempted while we review
that and see if the impact is in proportion with their
capacity.
Mr. Loesback. Thank you.
And also, Chairman Wheeler, on the incentive auction, Mr.
Chairman, regarding the upcoming incentive auction itself, I am
concerned about the impact that the FCC's repacking plan might
have on broadcasters and dealers in rural America, as you might
imagine.
If the FCC implements a regional repacking plan, will
broadcasters in areas like Iowa be repacked last because there
is less of a spectrum crunch? And if so, can you assure me that
broadcasters in rural markets will have as much time to
transition as broadcasters in areas where there is a spectrum
crunch? I am concerned that there is a 39-month deadline to
transition and whether broadcasters in rural areas may not be
able to start right away. Can you address that issue?
Mr. Wheeler. Thank you, Congressman. This one of the
reasons why we have now, as the chairman indicated, begun the
pivot to OK, what happens after the auction. Everybody is
thinking about the bidding. But OK, then you have to implement
it. And we are putting together a team that will deal with that
question.
One of the proposals on the table right now is some kind of
regional repacking plan. We have not yet made a decision on
that. There are all kinds of extenuating circumstances that
exist in various parts of the country. Clearly, it doesn't make
sense to have the limited assets of folks who erect antennas
racing hither and yon to be able to do things.
Mr. Loesback. Right.
Mr. Wheeler. We have to be able to manage that
appropriately and to deal with the kinds of issues that you
raise.
I can't sit here and say, sir, I have got the written out
answer but I can say, sir, yes, sir, we are on top of that.
Mr. Loesback. Thank you very much.
Again, you can see the rural theme to my questions here,
obviously. But I know that a lot of folks here on this panel
and on the larger committee have these very same concerns that
I have on a bipartisan basis. That is why I have raised those
issues.
Thank you, Mr. Chair, I yield back the remainder of my
time.
Mr. Johnson. I thank the gentleman for yielding back. The
chair now recognizes the gentleman from Illinois, Mr. Shimkus.
Mr. Shimkus. Thank you, Mr. Chairman. It has been a good
hearing. I think we have talked about a broad-range of
different issues that you all are dealing with.
I have two, one has already been asked. So, that will save
me a little bit of time. In the country right now, there is a
revolt brewing in the country. And I attribute it to a couple
of things. One thing I attribute it to is an understanding of
the legislative activities of passing of bills and then the
bill being signed into law, also understanding that the
Executive Branch is defined by the constitution to enforce
those laws.
So, when we see duly passed statutes in a law and then an
agency disregard that, that is kind of leading to this revolt
and this frustration out there. And I can say I mean I just
came through a primary and so I was with the public 24/7 for 2
months and it is visceral and it is real.
So, Commissioner Pai, I want to ask this question first
because this is an example. I think it spreads across the
agencies, not just here.
So, we passed a bill signed into law on joint service
agreements that then delayed that for 10 years. It wasn't
ambiguous. There weren't exceptions included. It just said all
JSAs. Of course I think you were surprised. I was shocked to
see that last month that the chairman's office forcing parties
to eliminate JSAs through merger review.
How is this not an example of this frustration out in
America of an agency disregarding the clear statute of law and
congressional intent? And could you comment on that?
Mr. Pai. Thank you for the question, Congressman. I think,
unfortunately, is that a paradigmatic example of the agency's
disrespect for the rule of law, it is pretty rare that this
body, as you know all too well, reaches overwhelming bipartisan
agreement on anything. But in December of 2015, with a unified
voice, both houses of Congress and the President instructed the
agency to grandfather existing joint sales agreements between
certain broadcast TV stations. The agency simply thumbed its
nose at that statutory command and ordered the unwinding of
certain joint sales agreements, including one joint sales
agreement by Entravision in my home state of Kansas, which
provides the only Spanish language news in the state.
That is remarkable for two reasons. Number one, it is
obviously diverse programming that I and my fellow Kansans
could benefit from. But secondly, it also contradicts an
express commitment to the Congress of FCC leadership last year
that there is quote nothing in what we are doing that would
make that, the Entravision JSA, go away. Now, that was simply
flouted. And I think it is telling that a couple of weeks ago,
a bipartisan group of 12 senators, led by Senator Roy Blunt,
Senator Dick Durbin, including Senators Tim Scott, Charles
Schumer and others told the agency that it was quote bypassing
congressional will and ignoring bipartisan concerns by forging
ahead with this path.
And so if the agency can't be constrained by law, then it
is pretty much just the caprice of one individual, a majority
of commissioners at any given point in time. And that is not
how I think the agency should operate under any leadership----
Mr. Shimkus. Commissioner O'Rielly?
Mr. O'Rielly. I agree with my colleague on both the content
and the point he is making and the point you made.
And I take it to another example. And I know we have talked
about set top boxes in a number of different questions. But if
you look at the statute, the Commission is taking this beyond
the equipment itself and taking it to applications. And the
statute says converter boxes, interactive communications
equipment, and other equipment. And yet we are taking it to
applications. And first we take equipment and interpret it to
be software and then software goes to applications. So,
applications have nothing to do with the set top boxes as they
operate today would be covered by our rules.
Mr. Shimkus. And I just want to end on this. Because this
kind of also talks about this aspect. I am very concerned about
the FCC process debate and the opening statements on that
because maybe some of these things that have occurred, had
there been an open process--you know what? I would call on the
commissioners to enact civil disobedience and disregard the
chairman's edict. And if the chairman can speak to people
anyplace, anytime on something coming down, I would challenge
you. I did some research. No one has done that yet. But by
golly, if there is ever a time to fight for transparency in the
rule of law, it is now. It is in this environment. And I would
encourage you to do that.
And I yield back my time.
Mr. Johnson. I thank the gentleman for yielding back. I now
recognize the gentlelady from Colorado, Ms. DeGette.
Ms. DeGette. Thank you so much.
As a former constitutional lawyer, I was really quite
dismayed to hear Commissioner's Pai's testimony about that the
commissioners are prohibited from commenting on future rules.
And Chairman Wheeler, someone asked you that question. I didn't
quite get the answer. So, I am going to ask you a series of
questions and I would like you help me clarify this.
Under the current rules of the FCC, commissioners are
prohibited from releasing the language of pending rules until
they are voted on in the proceedings. Is that right?
Mr. Wheeler. Yes, ma'am, for the final rule but under NPRM,
one of the things we have done, during my administration is put
out the draft language.
Ms. DeGette. So, you put out draft language. Is that
correct?
Mr. Wheeler. The Notice of Proposed Rulemakings that we
vote on always include in them a rebuttable presumption here is
what we are proposing in terms of specific language.
Ms. DeGette. OK, stop.
Mr. Wheeler. So, we could have the kind of debate we had
today.
Ms. DeGette. Stop. Stop.
Mr. Wheeler. Yes.
Ms. DeGette. Now, so you do put out proposed language----
Mr. Wheeler. Yes, ma'am.
Ms. DeGette [continuing]. in the Notice of Proposed
Rulemaking. Then you debate on it and you vote on it.
Mr. Wheeler. Yes, ma'am.
Ms. DeGette. And then the rule is released, right?
Mr. Wheeler. Yes, ma'am.
Ms. DeGette. Now, do you have a prohibition on
commissioners talking about the proposed rules in advance of
the vote? Yes or no will work.
Mr. Wheeler. No.
Ms. DeGette. Thank you.
Mr. Wheeler. Because--and we have these discussions,
speeches, blogs. As a person who has spent 30 years practicing
before the Commission, I can assure you that throughout history
there has been an ongoing dialog where commissioners have been
speaking out, speaking publicly, talking to the various
parties.
Ms. DeGette. So, under your leadership, what you are saying
is that when there is a proposed rulemaking, commissioners are
allowed to exercise their first amendment rights and speak
about the pending proceedings. Correct?
Mr. Wheeler. What I am saying is that nothing has changed.
Ms. DeGette. Can you just answer my question?
Mr. Wheeler. I am sorry. Would you please----
Mr. Loesback. Yes. Are commissioners allowed to speak
publicly about proposed rulemakings?
Mr. Wheeler. They are allowed to speak about the substance
of the rulemaking.
Ms. DeGette. Right.
Mr. Wheeler. The rule that they keep citing goes to can
they take the specific language and circulate it.
Ms. DeGette. Right. See, that is what I am trying to help
you get out.
Mr. Wheeler. OK.
Ms. DeGette. So, they can talk about the proposed
rulemaking.
Mr. Wheeler. Yes, ma'am.
Ms. DeGette. But they are not allowed to release the
underlying language while it is still under consideration. Is
that correct?
Mr. Wheeler. Other than the Notice of Proposed Rulemaking,
where it is----
Ms. DeGette. And what is the rationale for doing that?
Mr. Wheeler. It has always been that way, ma'am.
Ms. DeGette. And what is the rationale?
Mr. Wheeler. I believe the rationale is in order to
facilitate deliberation amongst the commissioners.
Ms. DeGette. Great, thank you. That is all I was trying to
ask you.
Now, Commissioner Clyburn, in your written testimony, you
mentioned interest in how the broadband can play a role in
healthcare outcomes. And as you might know, Chairman Upton and
I and the whole rest of the Energy and Commerce Committee are
working on 21st Century Cures. A lot of this bill relies on
expansion of the ability to collect data and then to aggregate
that data in clinical trials. And so I just wanted to let you
know that I think what you are talking about is really
important and I think we need to be working together to make
sure that we can get these benefits all around the country
because part of the whole process with this big data and
healthcare research is to get a much bigger diversity both
geographically and ethnically of people who are involved in
clinical trials.
So, I would like to be able to work with you going forward
to making sure that we can achieve these ends.
Ms. Clyburn. Absolutely. We have a Connect2Health Task
Force and we look forward to working with your office to
realize the potential that health and technology, that
marriage, would bring.
Ms. DeGette. Thanks. So, you know I have got a few seconds
left. Let me just go back to what I was talking to Chairman
Wheeler about because what I was trying to get out of him is
this. Once it was explained to me, I can see a real reason why
you would want the proposed actual language of the proposed
rules to be handled through the chairman's office. And you
would want to have people be able to talk internally about that
and you wouldn't want people just releasing bits and pieces of
that language.
So, I agree with that but I also think it is important that
the commissioners can exercise their first amendment rights
without releasing that language. And I think that is what is
happening now. So, I think we just need to everybody take a
deep breath and step back and try to have a little bit more
comity on the whole commission.
Thank you. I yield back.
Mr. Johnson. I thank the gentlewoman for yielding back. I
now recognize Mr. Lance from New Jersey.
Mr. Lance. Thank you.
And I also practiced constitutional law in New Jersey. And
so I would like to ask Commissioner Pai and Commissioner
O'Rielly to comment on the colloquy between my colleague,
Congresswoman DeGette and the chairman.
Mr. Pai. Thanks for the opportunity, Congressman.
It is flatly not true that commissioners have full and fair
latitude to discuss what is in a commission proposal or a
commission order.
Right now, I cannot hand you this document, which is the
Commission's Notice of Proposed Rulemaking on privacy. I cannot
quote you anything in this document in the Commission's Notice
of Proposed Rulemaking.
Mr. Lance. And if you were to do that, would you be
subjected to some sort of legal action?
Mr. Pai. Absolutely. There are sanctions that are
unspecified in our rules but I have no doubt that I wouldn't be
given the benefit of the Rule of Lenity when it comes to
enforcing it.
Mr. Lance. Commissioner O'Rielly, this, to me, is as clear
as mud.
Mr. O'Rielly. So, I agree to the point that you may be
concerned about the specific language being shared but even the
ideas themselves. Nonpublic information is the term used in the
rule. So, anything that is nonpublic. So, if there is an idea
in here----
Mr. Lance. Presumably, that is nonpublic. I do not know
what is in that document of 15 or 20 or 30 pages. And there is
no way I, in the branch of government that is mentioned in
Article I of the Constitution, I am not privy to that. Is that
accurate?
Mr. O'Rielly. That is accurate.
Mr. Lance. Commissioner Pai?
Mr. Pai. Well one thing is that the rationale for keeping
all of this secret is completely baseless. I mean there is no
reason why we couldn't have deliberations while still having
transparency.
And first of all we don't have internal deliberations now
on any item of significance. So, the suggestion is simply
inaccurate. But even beyond that, there is no reason why if you
propose a bill, Congresswoman, and it goes on the Web site,
there is no reason why you and Congressman Lance can't sit down
and hammer out agreements and have deliberations in a full and
fair way.
And the agency is no different. The American public
deserves to know what we are going to do before we propose to
do it and I don't think that is too much to ask.
Mr. Lance. And if you were to release only a portion of it
and if you were to mischaracterize a portion of it,
undoubtedly, another member of the commission would say no,
this is the full and fair interpretation of the larger
document. And this happens in the branch of government in which
we are involved and I would hope in the executive branch as
well.
So, if for some reason you were to mischaracterize or not
fully disclose the entire intent of the document under the
marketplace of ideas, wouldn't that be corrected by another
member of the Commission? Commissioner Pai, Commissioner
O'Rielly, please.
Mr. O'Rielly. Absolutely right. So, I agree with your
analysis and it could be corrected by--but it actually happens
today under the current structure because the fact sheets that
are being put out and are inaccurate and I don't have the right
under our rules to correct them.
Mr. Lance. And you characterize them as inaccurate and that
may be true, that may not be true. I tend to think it is true.
But regardless of whether it is true or not, what would be
wrong with a full discussion?
Mr. O'Rielly. I would be fully comfortable releasing
information so we could make a judgment whether my analysis is
right or wrong.
Mr. Lance. Commissioner Pai?
Mr. Pai. Nothing would be better than to avoid all this he
said/she said disputes by releasing the document. That way,
there is no debate about context. Everybody can see for himself
or herself.
Mr. Lance. And whether or not this has been the situation
over the years regarding the commission, do you believe,
gentlemen that it would be better moving forward if this were
to change and place it in the subjunctive voice, if this were
to change? And why do you think it should change?
Mr. Pai. Whoever is leading the agency, Republican or
Democrat, I would hope that they would embrace the same spirit
of transparency that the Congress has, in terms of making
things public before they are voted upon.
Mr. Lance. Commissioner Rosenworcel, your comments on the
discussion I have had with your colleagues?
Ms. Rosenworcel. Well, thank you. I have not found that our
existing policies get in the way of me having substantive
conversations with stakeholders of every stripe.
I am a little bit confused by the difficulties that my
colleagues are having. I know that they, too, held regular
meetings with public interest authorities, industry, and have
general discussions about the matters before us. I am sure that
every one of us here uses those discussions to inform our
deliberations and our decision-making and voting.
Mr. Lance. In your opinion, do you and I have a right to go
back and forth in the document that Commissioner Pai has at his
desk?
Ms. Rosenworcel. I believe we have the right to go back and
forth and discuss any matter that is before the agency.
Mr. Lance. I don't know what is contained in that document.
Are you able to release to me what is contained in that
document?
Ms. Rosenworcel. I don't believe we are.
Mr. Lance. And why is that, Commissioner?
Ms. Rosenworcel. I believe that is under our Commission's
rules right now.
Mr. Lance. Well, I understand what the rules are. I am
questioning the rules. I obviously understand what the rules
are. The rules may say that this room is painted pink. It is
actually painted green. I understand what the rules are. Do you
agree with the rules?
Ms. Rosenworcel. I think that we can do more so that our
discussions are transparent but I also think it is essential
that we preserve the right to have deliberations among the five
of us and actually review the text and discuss the text among
all of us.
So, I think we should strive to be more transparent but I
think we have to preserve some space for honest deliberation.
Mr. Lance. I think it is essential to the American people
that we, in the first branch of government, under Article I,
have the ability to review what is contained in that document.
Thank you, Mr. Chairman.
Mr. Johnson. I thank the gentleman for yielding back. And
now the chair recognizes the gentlelady from California, Mr.
Matsui.
Ms. Matsui. Thank you, Mr. Chairman. And I am not a
constitutional lawyer so I cannot provide any more clarity to
this but I appreciate the discussion and Commissioner
Rosenworcel's response.
We need to talk something I am passionate about and that is
Lifeline. Access to broadband is absolutely essential for
participation in the 21st century economy. We all know this
that affordability has been a major obstacle for the Americans
that live on the wrong side of the digital divide. We all know
that broadband is not a luxury but an absolute necessity. And
as Commissioner Rosenworcel always says, for parents helping
kids with their homework, and for businesses in all our
communities, and for every American to succeed.
I am thrilled that the FCC is finally modernizing their
Lifeline program into the 21st century. It has been something I
have been calling for since 2009, when I introduced I believe
the first legislation to expand Lifeline to broadband.
Now, as we do so, I hope the FCC makes sure that these
changes are beneficial to the low-income consumers the program
is designed to help, and I believe others have brought up this
concern, and does not harm the vulnerable consumers in the
Lifeline program today.
What I have heard are concerns about the FCC's proposed
changes to support for mobile voice service. And as we expand
Lifeline to broadband, we can't forget that low-income
consumers still need to be able to make voice calls, especially
911 in the event of an emergency.
Chairman Wheeler, quickly, can you explain the proposed
changes you are making to Lifeline support for mobile voice
services?
Mr. Wheeler. Thank you, Congresswoman. The goal is to
create a glide path, a phase-in where over the next 3 \1/2\
years, we are moving from an all-analog Lifeline service to a
digital Lifeline service, where we can take advantage of the
fact that a digital voice minute costs less than an analog
voice minute and by the sheer fact that we are now delivering
things digitally, give those using their phone, in your
example, access to the internet as well.
So, let me give you a specific example. We are talking
about 2 gigabits of data being the minimum threshold in 2018,
as we phase in. Two gigabits of data for the existing price
would be giving the consumer access to 1700 web pages and 900
minutes of voice talk.
Fifty percent of the existing Lifeline users use less than
100 minutes. Two-thirds use less than 200 minutes. So, what we
are talking about here is a quantum leap in the ability to have
access to minutes and this incredible ability to access the
internet.
Ms. Matsui. OK. Commissioner Clyburn, do you think that you
struck the right bands here?
Ms. Clyburn. We are still deliberating. We are listening to
parties and winding up our ex parte process. When I started on
this, it was a process that a lot of people did not want to
take this particular journey.
Ms. Matsui. Right.
Ms. Clyburn. We are on the cusp of making a tremendous
change for those 39 million households that are eligible. And I
am looking forward to continuing working with you to make sure
that this program is one that we can all be proud of.
Ms. Matsui. OK, thank you. I often speak about the need for
global access to spectrum to fuel our wireless economy.
Spectrum is the invisible infrastructure that powers mobile
networks.
As we look ahead to 5G, networks will be transporting more
data than ever before. But wireless services also rely on
wires, which is one of the reasons I care about special access
reform.
Commissioner Rosenworcel, do you agree that we need a
competitive special access market so that the United States can
continue to lead the world in 5G?
Ms. Rosenworcel. Thank you for the question. Yes, I do and
I agree with your assessment that while wireless networks
require wired infrastructure as well.
Ms. Matsui. OK, thank you and I yield back.
Ms. Eshoo. Will the gentlelady yield her remaining time to
me?
Ms. Matsui. So, if I may, yes, I yield.
Ms. Eshoo. Thank you. There was something that was said
earlier from the panel about in search of a problem that
doesn't have a solution or we don't need one et cetera, et
cetera, relative to set top boxes.
And I just want to put this on the record. Since the
Telecommunications Act opened everything up to competition,
including set top boxes, the price of everything else has gone
down 90 percent. The increase of fees for set top boxes has
increased by 185 percent and it is consumers that are picking
up the tab. And it is, essentially, a monopoly. It is
essentially a monopoly.
In my district, talk about boxes, they say think outside
the box, we don't have any boxes. I think it is about time that
in the 21st century that we really open up set top boxes
because----
Mr. Johnson. The gentlelady's time has expired.
Ms. Eshoo. Thank you.
Mr. Johnson. The chair now recognizes the gentleman from
Texas, Mr. Olson.
Mr. Olson. I thank the chair and welcome to our FCC
commissioners. Happy Birthday, Commissioner Clyburn.
Ms. Clyburn. Thank you.
Mr. Olson. Commissioner Rosenworcel, did you have a chance
to go by the County Line Barbeque at South by Southwest out
there on 2222?
Ms. Rosenworcel. No, I went to Salt Lick.
Mr. Olson. You have to come back.
And Commissioner Pai, you brought up the NCAA March
Madness. And our chairman did as well. I am a proud Texan,
guys. I have to tell you, the Aggies from College Station,
Texas A&M University had the greatest comeback ever in college
basketball. Down 12 with 39 seconds left, double overtime, we
are moving on. So, we will play Kansas maybe in Houston for the
final four.
My first question is about privacy for you Commissioner Pai
and Commissioner O'Rielly. The purpose of the NPRM is to get
input from the stakeholders before drafting and passing a
rule--input before. There are no conclusions. But the Texans I
work for back home say this privacy initiative of this proposed
rule is full of conclusions. They say that is putting the cart
before the horse.
So my question is, are there tentative conclusions in this
NPRM for privacy?
Mr. Pai. There are, Congressman.
Mr. Olson. Mr. O'Rielly, are there conclusions?
Mr. O'Rielly. Yes, there are.
Mr. Olson. There are conclusions. Is there a record to base
these conclusions upon, something like an NOI, a Notice of
Intent that was passed this year? Is there some NOI out there
to base these conclusions upon?
Mr. Pai. There is not.
Mr. Olson. And what they are based upon, any clue? I can
tell the people back home yes, they are there, they got there
why?
Mr. Pai. I can't tell you the motivation for any particular
conclusion. But with the entire reason for this enterprise, it
is important to remember that the FCC disrupted the work that
the FTC had done. The FTC had regulated this entire ecosystem
consistently for the past decade. Now, having disrupted that
with the net neutrality order last year, it is incumbent now
upon the FCC to formulate what the privacy rules will be in the
internet service provider space.
Mr. O'Rielly. So to your point in terms of the cart before
the horse, here is a quote from an FCC staffer working on the
issues. He said in terms of precise information about how
information is being used right now, I don't know that we have
that. They don't know what is being used by the ISPs today but
we have a solution in the proposals.
Mr. Olson. The people back home say that does not add up.
Well, I won't say what they will say back home. But one final
question.
Has the Commission caught itself in a corner where to undo
these rules, these new mandates, is that going to be really
hard to do when this rule comes out? Can we stop this or is it
pretty much the train has left the station?
Mr. Pai. I think, unfortunately, Congressman, the
Commission is proposing to leave the station in a certain
direction and notwithstanding what the American people might
tell us after this document finally becomes public, the
Agency's direction, as you will see is pretty clear.
Mr. Olson. Mr. O'Rielly, any comments on that, sir?
Mr. O'Rielly. I agree that it would be challenged. I
suspect it will be challenged in court. And we will see if they
survive that. And barring a change in direction of the
Commission, I think they----
Mr. Olson. The people back home are so tired of having to
go to courts to get the rules enforced the way they are
written. They just say they are sick and tired of going to
courts.
I want to switch gears and talk about the upcoming spectrum
option in rural Texas. It is 1 week away. Now, I am talking
about this issue a lot back home with the Texas Association of
Broadcasters, the TAB, and they are worried about losing parts
of their spectrum, the spectrum not being compensated. The
towers might have to be moved and that cost a lot of money. And
the FCC has not given any assurance that they will be fully
reimbursed, especially in rural areas.
The example they gave me was Amarillo, Texas, a decent size
town, about 2,000 people in the panhandle. They have nine TV
stations there, four Spanish language stations, four. They came
here to D.C., met with the FCC and their concerns were
basically dismissed. They said don't worry; it will be taken
care of; all will be fine. And if it is not fine, we have got
your back. That was not reassuring.
Does the FCC have enough funds to cover rural TV stations
if they have to build a new tower or lose their spectrum? Is
there money out there to do that or is that just a wish and a
prayer?
Mr. O'Rielly. Well, I will answer it this way. I don't know
the answer to that and part of it is because we have a variable
band plan. So, we don't know how much spectrum we are actually
selling. We are going to let the market decide some of those
things through the good legislation you do.
So, we don't know how many people are going to be
displaced. And so some of that will require a little bit of
time to figure out. What I have said, that I would be the first
one here if the 1.75 is not sufficient to advocate that
Congress reconsider this number.
Mr. Olson. Thank you. Mr. Pai, anything to add about that,
sir?
Mr. Pai. I would agree with Commissioner O'Rielly and I
would just add that that is one of the reasons why I have
consistently said that we should have treated the $1.75 billion
as a budget, rather than a soft suggestion.
Mr. Olson. Thank you. I am out of time. On behalf of the
Aggies, whoop.
Mr. Johnson. The gentleman yields back with a whoop. And
with that, I recognize the gentleman from Kentucky, Mr.
Yarmuth.
Mr. Yarmuth. Thank you, Mr. Chairman. Thanks to all of you
for being here today and for doing what you are doing to ensure
that there is access to broadband throughout our country so
that everyone can participate in 21st century economy.
Come November, it is estimated by some that there will have
then spent somewhere in the neighborhood of $10 billion on
political advertising in this cycle. A lot of that is going to
be spent by entities, candidates, and party organizations that
are required by law to disclose their donors. But a significant
portion of it would be spent by front groups that are under no
requirement to disclose their donors. That is why Ms. Eshoo and
I and 168 of our colleagues wrote to Chairman Wheeler asking
the Commission to use its authority under Section 317 to
require the disclosure of donors for all of these front ads,
front organization ads.
And we wrote in January. I received this response during
March 10th from the chairman and it is basically a thank you
for writing response, something I don't think that you would
believe that we would be satisfied with. And while I don't
think that necessarily we expected you to say OK, we will do
that right away, I certainly expected more than this. And what
particularly disturbs me is that when we talked about the basis
for the Commission's refusal to do it is based on their
definition of editorial--using the standard of editorial
control, based on a 1979 interpretation by staff as to what the
standard for be to determine what a sponsoring organization is.
And you mentioned that in January proceedings that you
expanded the requirements to cable companies and satellite
providers and so forth as if that would be satisfactory to us.
Personally, I think that really is a further
institutionalization of the deception of American public
because this standard of editorial control is absolutely the
most useless standard for the American people in trying to
decide or trying to determine the credibility of political
advertising.
I spent most of my career in media prior to coming to
Congress and I have a little bit of an idea what editorial
control is. And in these situations, these groups, Americans
for Puppies and Kittens or Americans for a Brighter Tomorrow,
they don't have editorial control. They may be crafting a
message but they don't have control of that message.
So, if you could imagine, the American Petroleum Institute,
they want to form one of these front groups and fund it. Can
you imagine what would happen if they organization that they
funded, America for a Brighter Tomorrow, ran ads saying we need
to do away with burning all fossil fuels? Those ads wouldn't
stay up very long. They don't have control. They are doing what
their funders want them to do. And that is why this is such a
deceit that has been fostered on the American people. They
don't have any idea who is saying that puppies and kittens are
great.
And until we get this kind of disclosure, billions and
billions of dollars will be spent to deliberately deceive
American voters. And I don't understand why the Commission
would not at least enter into a review of the standard you are
using, to determine what is the most beneficial standard for
deciding what is a true sponsor. A sponsor is who pays for it.
And in this situation, those entities that are paying for it
are not willing to be public, which is why they are using the
facades that they are using.
So, in terms of the public interest, in terms of a vital
and open democracy and a transparent democracy, I would
request, first of all, I would reassert our request to take
action. But short of that, I would hope that maybe we could
meet with Commission staff to talk about this whole notion of
editorial content and exactly what their perception is--I mean
of editorial control and see exactly what their perception of
editorial control is. Because as a former editor, I know who
has control of the editorial process and I know who has control
of the advertising process. And this would be like Coca-Cola
saying we are wanting an ad, put a soft drink ad and you said
OK, well you have to say paid for by Ogilvy and Mather or Leo
Burnett, or one of the advertising agencies, instead of Coca-
Cola.
So, hopefully, we can see this decision and work with us to
do something that is more sensible. I yield back.
Mr. Johnson. I thank the gentleman for yielding back. The
chair now recognizes the gentleman from Illinois, Mr.
Kinzinger.
Mr. Kinzinger. Thank you, Chairman. And thank you all for
being here. I know it is like Christmas Day for you when you
get to come before us. So, I appreciate having you. Thanks for
your service.
Mr. Chairman, Chairman Wheeler, we have had conversations
in the past regarding the rate regulation bill that I
introduced last year. And at the time of our initial
conversation, there was a lot of concern regarding the
authority your commission possesses but chooses to forbear for
the most part in regards to rate regulation. And I appreciate
the forbearance of that. I want to make that clear.
During that conversation, we talked about putting into
statutory law a phrase that would ensure yours and future
commissions do not have the ability to set out retail rates on
broadband internet, which I think is an important role for
Congress to play, to have a voice. But now since the time of
our original conversation, you, along with many of our
colleagues on this committee have said that the bill I
introduced is far greater than what it seems and that it could
end the ability of the FCC to regulate a plethora of other
activities that were not in the bill. And I understand those
concerns and I am willing to work with anyone that is willing
to work with me to ensure that the intent of the bill is moved
forward in a reasonable manner.
Following a number of conversations and negotiations with
members on both sides of the aisle, you passed what I think was
an excellent amendment to the bill being a recent markup to
ensure that a number of issues brought forward by our
colleagues and yourself were specifically exempted from adding
or detracting from the current FCC authority.
Now, not more than a few hours after we passed that bill
out of committee, you were in front another committee in
Congress where the same issues was brought forward. In that
hearing, I have the transcripts actually, you again stated that
we will not regulate broadband rates. Again, I appreciate that.
And you then said that you would be willing to offer your
assistance to Representative Crenshaw in developing legislative
language on this topic. More specifically, you agreed to
provide them with language and assistance within a couple of
weeks from the date of that hearing, which was March 15th.
Would you be willing to provide that language to our committee
when it is completed, which will be around March 29th?
Mr. Wheeler. Yes, sir.
Mr. Kinzinger. OK. I also want to clear something up. In a
recent markup on H.R. 2666, a letter from you was entered into
the record in which you go to great length to explain why my
bill is inconsistent with your comments before a Senate
Appropriations committee. Given that I read you the text of the
bill before it was originally introduced and you stated that
this is what we are trying to accomplish, I am a bit confused
by your letter. So, I just want to clear something up.
This is just yes or no. Do you believe that the FCC should
have the authority to regulate rates after the fact through
enforcement?
Mr. Wheeler. Yes, sir.
Mr. Kinzinger. OK.
Mr. Wheeler. What I was talking about was the question of
de-forbearing.
Mr. Kinzinger. OK.
Mr. Wheeler. And I believe that in the Open Internet rule,
as we did, we should forbear from rate regulation.
Mr. Kinzinger. But you believe that you should have the
authority to regulate rates. Even though you choose not to at
this time, the Commission should have that authority to be able
to regulate broadband rates.
Mr. Wheeler. Yes, sir.
Mr. Kinzinger. That is kind of inconsistent----
Mr. Wheeler. It is because here is what is the concept. So,
for instance, Chairman Walden's amendment that you just
referenced here, the amendment to your original idea, when she
said hey, this will not have any impact on paid prioritization
because obviously, if something is paid, there is a rate being
charged.
Mr. Kinzinger. Well, sir, and I appreciate it. I am willing
to work with you but what I am kind of confused about is you
went from saying hey, we are going to forbear it, we have no
intention of regulating rates on the internet. And I liked the
concept of what your bill is, even if you don't like the
details. We are willing to work with you on the details but you
are saying that you actually disagree that you actually should
have the ability to regulate broadband rates.
Mr. Wheeler. That is what I am trying to address, the issue
of rates. So, for instance, as Chairman Walden's amendment
said, well, paid prioritization could be a rate. That is not
what we are talking about. Throttling could be rates and we
have all agreed we don't want to do throttling. Because how do
you throttle? There is a rate you are paying. You are
delivering less than the service that you say that you are
going to offer. Therefore, there is a rate impact----
Mr. Kinzinger. And I understand. Even though there is a lot
of details but we went from you saying I agree we should not be
able to regulate broadband rates to now saying we should
regulate broadband rates but I will forbear it for this moment.
There is details and that is my point is we are willing to work
with you on a lot of these details.
Mr. Wheeler. Yes, sir.
Mr. Kinzinger. And we are happy to do it with the other
side of the aisle, with you all and I think that is important
but maybe we made a little headlines.
To Commissioner Pai, do you believe that the Open Internet
order leaves open the ability of the FCC to regulate rates in
any fashion after the fact and do you believe that Congress
should act?
Mr. Pai. Yes and yes. And I think the chairman's commitment
should be taken at its word that rate regulation is, indeed, on
the table. And it shouldn't be that big of a leap if the
President has said when he instructed the FCC to adopt Title
II, I don't want the FCC to regulate broadband internet access
rates. If the chairman says I don't want to regulate broadband
internet access rates and I don't have a problem with Congress
codifying that, there should not be an objection when Congress
actually tries to codify that commitment.
Mr. Kinzinger. That is right. And that is the role of
Congress is to make these laws to make these things that we
want our folks to live by or not live by and I guess I am
confused but unfortunately, I am out of time.
So, thank you all. Thanks for being here.
Mr. Wheeler. Thank you.
Mr. Johnson. I thank the gentleman for yielding back and I
recognize now Ms. Clarke from New York.
Ms. Clarke. I thank you, Mr. Chairman and I thank our
ranking member. Good afternoon, Chairman Wheeler, and to the
entire panel of commissioners seated before us today.
My time is short so I want to get right to my question. Mr.
Chairman, as you know some of my colleagues in the
Congressional Black Caucus, the Congressional Hispanic Caucus
and I have expressed our concerns about the potential
irreparable harm the set top box proposal could have on small
minority programmers, content providers, and broadcasters. This
concern was also expressed recently by Adonis Hoffman, a former
chief of staff to a Democratic FCC commissioner, ``If the FCC
adopts the Wheeler proposal in a final order later this year,
it will embed a regime that creates more, not fewer hurdles for
smaller players, new entrants, and minority content providers
to pierce the Silicon curtain.''
Mr. Chairman, you continue to have said that you don't
believe that this disruption will harm or limit minority and
independent programming. So, has the FCC gathered evidence to
this effect? Has a disparity study been conducted to surface
the unintended consequences of this proposal for programmers
whose viability is not only driven by increased viewership but
also proven business models?
Mr. Wheeler. Thank you, Congresswoman. The entire NPRM is
designed to elicit this kind of information and then to collect
that information in the first round and then to have a rebuttal
to that information or adding----
Ms. Clarke. OK, so there has been no study. No. OK.
Mr. Wheeler. No, what I am saying is that is the process.
We are collecting that right now.
Ms. Clarke. OK. So, I have asked the Congressional Research
Service to perform a study on the impact of the set top box
proposal on small and minority programmers and content
providers and broadcasters. I consider this a reasonable
request. Would you consider delaying the rulemaking until the
report is completed and to work with the committee to address
any concerns that may be raised by a report?
Mr. Wheeler. Well, we would look forward to working with
you and the committee on any issues that are raised in this, as
you and I have discussed previously on this.
Ms. Clarke. So you would consider a delay?
Mr. Wheeler. I don't know how long the delay would be,
ma'am.
Ms. Clarke. OK, we can talk about that.
Mr. Wheeler. Yes.
Ms. Clarke. Commissioner Clyburn, I want to commend and
congratulate you on all your efforts on inmate calling
services. It has meant so much to so many families across our
nation and I know it will happen.
I have a question about the modernization of the Lifeline
program. I am hearing from many constituents that they are
concerned with a portion of the proposal that would start
charging for services that have been free for years. I think
that has been a consistent theme here this morning. Would you
further explain the proposal of the modernization of the
Lifeline program?
Ms. Clarke. Well, what we are attempting to do, and it was
a very simple, for me, objective to ensure that the Lifeline
program looks much like everyone else's offerings and options
and opportunities. Right now, it just goes to finance voice
services and we believe in a 21st century economy world that is
insufficient.
So, we are still in a deliberative stage. I have heard
concerns, as I mentioned in my opening remark from consumers
that are concerned, particularly on a mobile voice problem--a
mobile voice consider it to be a problem here.
But what I want to assure you is I am going to take all of
those into considerations because I want, as I have the option
to pay little, none, or more, depending on my ability and what
I want from the market and that is what we are attempting to
create all price points starting at zero.
Ms. Clarke. So, my question is related to the maintenance
of the voice service for constituents that may not have access
to high speed broadband or may not want to adopt the modern
technology because they are seniors or disabled or perhaps less
literate. Is the FCC being too presumptuous that broadband will
be competitively available to all Americans in the next 3
years, as outlined in the agency's draft proposals?
Ms. Clyburn. I will answer this way and more succinctly,
based on time. It is my wish that whatever your desire is from
a communications standpoint, whatever your need is from a
communications standpoint, that this is a program that answers
your needs.
Ms. Clarke. Very well. Mr. Chairman, I yield back. Thank
you very much.
Mr. Johnson. I thank the gentlelady for yielding back. The
chair now recognizes itself for 5 minutes.
Chairman Wheeler, recently, I was shown a quote attributed
to a former venture capitalist, you, regarding the FCC's
regulation of what was then a cutting edge innovative service:
``I would hope the Commission recognizes that despite the fact
that they have very capable and dedicated individuals, it is
not smarter than the functions of the marketplace. In that
regard, I would just point to the cellular industry. The reason
the industry has reached the level it has is because the FCC
was smart enough to know that they didn't have all the
knowledge.''
So, looking at the situation with Binge On and other
products, you have a team scrutinizing them, notwithstanding
the overwhelming consumer response. It sounds like now the
FCC's Enforcement Bureau does have all of the knowledge, in
your opinion. So, what has changed at the FCC since you made
that statement as head of CTIA?
Mr. Wheeler. Well far be it from me to challenge the wisdom
of that statement, Congressman. The model that we built for the
Open Internet is based on Section 332 and what I was speaking
about at that time. And the job that the Congress and the
Commission did in saying it is a common carrier and here are
the things from which you will forbear. And that the
responsibilities of common carriage continue to obtain them.
And just like the common carriage responsibilities of data
roaming were applied to wireless carriers in the last several
years, so, too, do we then look at other common carriage
responsibilities that may fall out and be affected by internet
service providers.
Mr. Johnson. OK, well, great. So, it sounds like your
position has changed, that now the Enforcement Bureau does have
more of the knowledge than the private market.
Let's go on to a second question. On your watch, and one of
our colleagues earlier said we are not really talking about
your budget, which is what you are here to talk about but I am
going to segue to that.
On your watch, average personnel costs for employees in the
Enforcement Bureau have grown faster than was the case under
Chairman Genachowski. Certainly average salaries for those in
the enforcement bureau have grown faster during your tenure
than was the case under your predecessor. How do you explain
this trend toward higher spending?
Mr. Wheeler. You have given me a piece of information that
I was unaware of and I will be happy to----
Mr. Johnson. Would you get back to us and take that
question for the record? Thank you. We would like to know that.
Also, Chairman Wheeler, the FCC, as a matter of practice
sends a contingent of Enforcement Bureau field agents to the
Super Bowl. Correct?
Mr. Wheeler. Yes, sir.
Mr. Johnson. It is the job of these field agents to ensure
that no harmful or malicious interference interrupts
communications, broadcasting, or public safety. Is that
correct?
Mr. Wheeler. Yes, sir.
Mr. Johnson. A group went this year. Am I correct, this
past January--February?
Mr. Wheeler. Yes, sir.
Mr. Johnson. I assume that, given the task, that this team
is responsible for they are made up of primarily engineers that
can resolve those problems. Is that correct?
Mr. Wheeler. I don't know the answer to that, sir.
Mr. Johnson. OK. Could you get back to us on that?
Mr. Wheeler. Yes, sir.
Mr. Johnson. Did the chief of the Enforcement Bureau attend
the Super Bowl as part of the FFC's presence this year?
Mr. Wheeler. I don't know the answer to that, sir.
Mr. Johnson. Would you get back to us on that?
And do you know if any Enforcement Bureau chiefs in the
past have attended the Super Bowl?
Mr. Wheeler. I don't know the answer to that.
Mr. Johnson. OK, so there are three or four questions for
you, if you would get back to us on those.
Sticking with you, Chairman Wheeler, but changing focus, as
the head of an important agency, I am sure you are aware of the
challenges that have arisen in agencies and departments like
the EPA, the IRS, and the State Department with respect to the
use of non-official means of communication, often to avoid or
allay things like the Administrative Procedures Act or the
Freedom of Information Act and the Federal Records Act.
Does the FCC have a policy that clearly requires FCC
employees to comply with these rate obligations and how do you
enforce that policy and ensure that personnel cell phones and
direct messaging over social media platforms are not use by
your employees to avoid the sunshine and openness we expect in
a regulatory agency like the FCC?
Mr. Wheeler. I am sorry, let me see what I understand. You
are saying what policy do we have to make sure that you don't
do business on private----
Mr. Johnson. Yes, essentially.
Mr. Wheeler. That is policy.
Mr. Johnson. Do you have that policy?
Mr. Wheeler. Yes, sir.
Mr. Johnson. What do you do to enforce it? What kind of
enforcement mechanisms do you have in place?
Mr. Wheeler. We don't go spying on our employees.
Mr. Johnson. I am sorry?
Mr. Wheeler. We don't go looking at what our employees are
doing.
Mr. Johnson. How do you enforce it?
Mr. Wheeler. We have the rule in place.
Mr. Johnson. So you don't enforce it.
Mr. Wheeler. If there is a complaint made against the rule,
I am sure we will enforce it.
Mr. Johnson. OK. What I hear you saying is you don't
enforce it.
I yield back and now I recognize Mr. McNerney from
California for 5 minutes.
Mr. McNerney. I thank the chair.
Concerning the ISP privacy proposal, Chairman Wheeler, I
believe that consumers should have control over their data,
what they disclose and how their data is used. Recognizing that
the average internet users may not be aware of the multiple
entities, such as the ISP and Web sites, the collective data,
will your proposal ensure that consumers have an understanding
of what entities are collecting their information?
Mr. Wheeler. Yes, sir.
Mr. McNerney. How will do you that?
Mr. Wheeler. So, there are three legs to this stool. First,
is transparency, that it must be disclosed what information is
being collected and then how that information is used when it
is collected.
The second is that you must be given choice insofar as do
you want that information to be collected and used.
And the third is that that information must be secured so
that it does not end up violating your privacy by leaking out
to some other source.
Mr. McNerney. Are you going to require opt-ins or opt-outs
as part of this?
Mr. Wheeler. Yes, sir.
Mr. McNerney. So the consumers will have to opt-in or opt-
out, depending on what they want?
Mr. Wheeler. Any information that is collected by an ISP
may not be distributed to a non-ISP, in other words, may not be
sold to an advertiser or somebody like this, without the opt-in
consent of the consumer.
Mr. McNerney. Thank you. Data security is a critical
element of the ISP privacy proposal, at least in my opinion.
One of the things you can do is called out by requiring
reasonable steps but what does the Commission mean by
reasonable steps? What does that constitute?
Mr. Wheeler. So, that is noticed by the absence of
reasonable steps. The reality is that one company's solution
may be as adequate as another's solution but what we don't want
to do is to say here is the black and white cookie cutter that
everybody has to do. Let's for instance, let me give you an
example.
There was one company that allowed their employees to
operate--allowed is the wrong word--under whose supervision
where employees sold the information for about 280,000
customers. There must be a reasonable structure in place to
prevent that kind of activity.
Mr. McNerney. So, you don't believe in establishing a
standard through some process and then applying that standard.
Mr. Wheeler. We establish the expectation that you will do
it but there are multiple ways that it can be accomplished.
Mr. McNerney. OK, thank you.
Regarding set top boxes, as you know, I wrote a letter to
you with Mr. Barton and Mrs. Ellmers regarding the privacy
issues under your proposals. I appreciate you responded. We got
that letter last week. Although I have a few questions about
the certification process.
How would consumers go about raising a potential violation
of self-certification or independent certification?
Mr. Wheeler. So, the enforcement exists as it does today
under Section 631 applicable to wireless carriers, that that is
the expectation that applies. Their first role of
responsibility is the cable operator themselves. And the second
is an appropriate complaint to the FTC or the state AG but that
we have the same level of privacy protections that get put in
place today with existing alternative set top boxes, such as
TiVo and Roku.
Mr. McNerney. Well then who would decide an evaluation that
warrants a revocation?
Mr. Wheeler. The revocation of the license?
Mr. McNerney. And the certification.
Mr. Wheeler. So, the cable operator can make that decision
and there can be enforcement action taken by the FTC or the
AGs.
Mr. McNerney. Thank you.
Commissioner Clyburn, I am also interested in the Lifeline
but in California, our customers get a state subsidy, along
with a Wi-Fi subsidy and yet, some of our providers are saying
that even with that with the most generous state subsidy in the
United States, they are still not able to supply, provide the
basic services that are available warranted. How do you see
addressing that problem?
Ms. Clyburn. Our universal service construct has always
been viewed through a public and private lens. And we always
knew that there will be certain limitations from a government
standpoint in terms of allocation of resources, be it state or
local. And so what we are attempting to do through our other
initiatives and conversations and partnerships that we are
continuing to forge is to ensure that the market has options
that would be more in line with the affordability construct in
which you laid out.
And so, it is a continuing work in process and I think we
are on the correct trajectory to marry and close these spots.
Mr. McNerney. So, there may be co-payments involved?
Ms. Clyburn. We always knew that $9.25 from a federal
coffer would not be enough in all cases to bridge the divide.
And that is why it is so important for, as you mentioned,
states like California, who recognize that, who complement the
front economically and we are hoping for more interaction with
the private marketplace to bring things closer to affordability
for those who could use, who need broadband the most.
Mr. McNerney. Thank you, Mr. Chairman for indulging me.
Mr. Johnson. I thank the gentleman for yielding back.
The chair now recognizes the gentleman from Florida, Mr.
Bilirakis.
Mr. Bilirakis. Thank you, very much, Mr. Chairman. I
appreciate it. Thanks to the panel for their testimony today.
I have a couple of questions. Chairman Wheeler, I
understand that a lot of robocalls or automated text messages
are an unwelcome part of modern life and should be limited, as
they are now, under the telephone Consumer Protection Act but
in some cases, consumers, customers have a legitimate need and
a real desire to receive important information from some
businesses. For example, utilities may need to contact their
customers with information about outages, repairs, service
restoration or other important service updates. This is
especially true in a situation we face in Florida when we have
hurricanes and tropical storms. So, it is a public safety
issue.
I understand there is a petition from electric and gas
utilities currently pending at the Commission to clarify that
the TCPA does not apply to non-telemarketing informational
communications from utilities to their customers. Does the
Commission plan to act on this or can you comment on the status
of the petition, please?
Mr. Wheeler. Thank you, Congressman. I am unfamiliar with
that specific petition. We are dealing with several issues that
come out of TCPA. I would love to get back to you with an
answer on that.
Mr. Bilirakis. Please do. Please do. Thank you.
I have a second question for Chairman Wheeler. We recently
had FirstNet up here, along with your Public Safety Bureau. One
of the things we discussed was the level of coordination
between FCC and FirstNet on closing FCC field offices, since
the field agents play a critical role, I am sure you will agree
in resolving interference to public safety communications. Yet,
I still don't have a clear answer to my question.
Was there any consultation between FirstNet and the FCC
about reducing the size of the field office presence? And a
simple yes or no will do.
Mr. Wheeler. I don't believe so, sir.
Mr. Bilirakis. You don't believe so?
Mr. Wheeler. Correct.
Mr. Bilirakis. That is probably a no. Is that correct?
Mr. Wheeler. Yes, sir.
Mr. Bilirakis. Yes, OK.
Mr. Wheeler. To the best of my knowledge.
Mr. Bilirakis. All right.
Commissioners Pai and O'Rielly, the market definition in
the chairman's set top box proposal seems divorced from the
reality of how consumers watch video today. The video market
already competes for consumers getting numerous viewing
options, based on single programs channels or bundles.
Isn't the FCC's market definition backward-looking,
considering where the market is going? What do you think?
Mr. Pai. Congressman, I agree with that characterization. I
can't put it better than the former chairman of this committee,
Henry Waxman, who said just yesterday that this is a 20th
century solution to a problem that the market is already
solving on its own.
Mr. O'Rielly. I agree.
Mr. Bilirakis. Mr. O'Rielly, please?
Mr. O'Rielly. I agree.
Mr. Bilirakis. Thank you.
Next question for the entire panel. Is the Commission
worried about all the automated telephone dialing system cases
being decided in court on a case-by-case basis? Should the
Commission revisit the definition and help to bring clarity to
the issue so that businesses can have clearer guidance? We will
start with the chairman, please.
Mr. Wheeler. Thank you, Congressman. We had a large
proceeding on that within the last 6 or 8 months and what we
are trying to hue to is the specific language that is in TCPA
that says that insofar as wireless calls are concerned, the
wireless subscriber has the right to determine whether or not
you get called.
Mr. Bilirakis. Commissioner Clyburn, please?
Ms. Clyburn. So, I interpreted your--hopefully my
interpretation is in sync with the spirit of your question. One
of the things that we recognize is that every situation is
different and we must have the capacity when it comes to intake
of those calls and complaints, which are huge, they are a
larger number, that we each have the capacity to
compartmentalize them and address them. So, how we look at them
in mesh.
There are a lot of commonalities to many of these calls and
we will address them in such a manner that would be in sync
with that.
Mr. Bilirakis. Thank you. Any other commissioner wish to
comment?
Ms. Rosenworcel. As the chairman alluded to, we did address
autodialer capacity in the summer of 2015, in our most recent
decision under the Telephone Consumer Protection Act.
But if I could make one point, it would be a plea. This is
a law from 1991 and one of the challenges that the agency has
right now is we are taking all sorts of technologies that did
not exist in the early 1990s and trying to figure out how to
fit them into this old law. We are, as a result, struggling
with more robocalls for consumers and more challenging lawsuits
for companies that never intended to be on the wrong side of
the consumers they are calling.
Mr. Bilirakis. Mr. Pai, should the Commission revisit the
definition and help to bring clarity to the issues so that
business have clear guidance?
Mr. Pai. Without question, Congressman. But in the absence
of the Commission doing that, and I don't see any indication
that it will, I think as Commissioner Rosenworcel pointed out,
it would be helpful for Congress to update the Telephone
Consumer Protection Act.
A number of strange situations we find ourselves in now is
on one hand having perverted the definition of autodialer to
include everything more sophisticated than the rotary phone,
all these legitimate businesses are now seeking a special
exemption from the FCC from the TCPA's strictures and the
various class actions that are sure to follow.
At the same time, the administration is exempting entire
categories of favored robocallers, such as government student
debt collectors, the present payphone industry and others. They
get a pass, whereas, a lot of these legitimate businesses
don't. That is an untenable state of affairs.
Mr. Bilirakis. Commissioner O'Rielly?
Mr. O'Rielly. I will just say I agree. I think the
definition was wrong at the time and we should clarify.
Mr. Bilirakis. Thank you. I yield back, Mr. Chairman. I
appreciate it.
Mr. Johnson. I thank the gentleman for yielding back.
And the chair now recognizes the gentleman from Missouri,
Mr. Long.
Mr. Long. Thank you, Mr. Chairman. And before I give my
remarks, I would like to just, along with many others, send out
thoughts and prayers to the victims of the tragedy in Brussels
today, including a U.S. service member and four of his family
members that were injured and three Mormon missionaries, who
were also injured, too, of which I know are Jason Chaffetz,
Chairman of Oversight and Government Reform, constituents of
his.
And another note, I note the passing of my predecessor's
father, Roy Blount's dad. Roy Blount passed away last night and
I know that a lot of folks had not heard that yet.
And I want to add to the accolades, even though he is not
in the room, that everyone has been throwing out to Ray Baum
today. And you know after he wrote Wizard of Oz, I thought he
would be done. I thought he could live off of his residuals.
But Ray is a great guy. And I came to Congress from a
different background than most. I was an auctioneer and a real
estate broker for over 30 years. I am a salesman. And a
salesman has to be upbeat, optimistic, open. And Ray, I have
never seen him in a bad mood. He is always upbeat, optimistic,
and open, regardless of the challenge. I wish him the best of
luck of the NAB. And I just realized out in the hall that he is
1 week younger than I am. Now, I know you can't tell by looking
because I look younger than him, I am sure. But anyway,
congratulations to Ray on his move.
Commissioner Rosenworcel, I want to commend you on your
trip down to Austin promoting the broadband to rural areas,
which is a very, very key object or whatever that we have been
working on, that we need to work on. I, too, spoke in Austin
and participated in a panel 10 days ago today on that very
subject on delivering rural broadband to the rural areas, which
for the students in their studies and everything, it is
critical that we get that done. So, I just wanted to
congratulate you on your trip to Austin to promote the same
thing.
Chairman Wheeler, in the spirt of John Dingle, I am going
to ask you for yes or no answers to my questions. I have got a
few here. I don't have a lot.
But Chairman Wheeler, I would like to focus this morning,
or this afternoon I guess it is now, on your treatment of
television joint sales agreements, known as JSAs. I don't know
if you are aware but there is a JSA in my district between TV
stations KSNF and KODE in Joplin, Missouri. And it was because
of this JSA that KODE was able to buy Doppler radar, which, at
the time, was obviously a benefit to the Joplin community. But
in 2011, when the EF5 tornado ripped through Joplin, killing
161 people in a town of 50,000, so everyone knew someone from
that tragedy, when it ripped through Joplin, there wasn't
anything much more important in my community than the Doppler
radar, which tracked a multiple vortex tornado that stayed on
the ground for six miles. And the reason KODE was able to
afford this piece of weather equipment was because of the JSA.
Now, I have got to admit that I was pretty frustrated with
the FCC when they made the decision back in 2014 to basically
outlaw JSAs, especially when I saw firsthand the difference
they can make to small and medium sized markets like Joplin.
Clearly, also in my hometown of Springfield, there is a JSA
operating there. Clearly, many others in Congress had the same
frustration, which is why last year, we included a 10-year
grandfather for JSAs created before March of 2014 in the
omnibus spending bill.
Chairman Wheeler, again, in the spirit of John Dingle, yes
or no answer. Were you aware of the passage of this law?
Mr. Wheeler. Yes, sir.
Mr. Long. OK, good. I thought that when Congress passed the
law, it would have been the end of the conversation on JSAs
but, unfortunately, to my surprise, I see the FCC has decided
to use the merger process to circumvent a recently passed law.
In a number of instances, the FCC has not provided the law's
10-year grandfather to JSAs involved in a merger. Is that
correct, yes or no?
Mr. Wheeler. No, sir.
Mr. Long. That is not correct?
Mr. Wheeler. That is not correct.
Mr. Long. I am aware that----
Mr. Wheeler. Would you like me to explain?
Mr. Long. I am aware that you argue that there is long-
standing precedent that gives the FCC the right to modify new
licenses. Have you read the language in the omnibus bill that
grandfathers JSA?
Mr. Wheeler. Yes, sir.
Mr. Long. Can you tell me if the omnibus language includes
any exceptions to the 10-year grandfather in the JSAs?
Mr. Wheeler. It talks about license----
Mr. Long. Yes or no?
Mr. Wheeler. It talks about----
Mr. Long. Can you answer yes or no for me? Let me repeat
the question and I would like a yes or no.
Can you tell me if that omnibus language includes any
exceptions to the 10-year grandfather in the JSAs?
Mr. Wheeler. In the definition of license----
Mr. Long. Yes or no? Can you give me a yes or no? That is a
simple question.
Mr. Wheeler. Yes.
Mr. Long. Thank you. Did the language include any exception
in the case of merger reviews or FCC precedent? Yes or no?
Mr. Wheeler. Yes.
Mr. Long. And in the case where the FCC precedent that
conflicts with a federal statute which trumps, isn't the
statute--it is in the statute, isn't it?
Mr. Wheeler. The statute does not conflict.
Mr. Long. It appears others were as surprised as I was with
your interpretation of the statute. Now the statute recently,
the 12 bipartisan senators representing a full political
spectrum from Senators Schumer and Durbin to Senators Blunt and
Wicker sent you a letter telling you the congressional intent
of that omnibus language, mainly to grandfather all JSAs
created before March 14 and you are in receipt of that letter,
yes or no?
Mr. Wheeler. Yes, sir.
Mr. Long. OK, I yield back.
Mr. Johnson. I thank the gentleman for yielding back.
The chair now recognizes the gentlelady from North
Carolina, Mrs. Ellmers.
Mrs. Ellmers. Thank you, Mr. Chairman and thank you to our
panel. I am going to continue the tradition that we are
carrying on here of Congressman Dingle.
And Mr. or, excuse me, Chairman Wheeler, as you know, I
have legislation requiring the FCC publish any rule changes on
their Web site within 24 hours, H.R. 2589. Transparency has
been a priority for this administration. So, I find it strange
that some have balked at this proposal. To that end, I would
like to ask you a few yes or no questions.
Does the FCC have the ability to publish rule changes
online within 24 hours?
Mr. Wheeler. Yes.
Mrs. Ellmers. They do. So, you confirm that within 24 hours
we will be able to publish that information at the FCC?
Mr. Wheeler. You were asking the question do we have the
technical ability to publish within 24 hours.
Mrs. Ellmers. And your answer is yes, correct?
Mr. Wheeler. Yes.
Mrs. Ellmers. Thank you. Now, I want to move on to another
subject. Chairman Wheeler, I have been a little disturbed to
read about the FCC's quote anti-business bias in a recent Hill
article. The commissioner's job is to ensure that the
communications marketplace is functioning to promote benefits
for consumers and not to be beholden to radical special
interest groups. Are you really listening to the wide range of
stakeholders involved in the FCC matters or is there a real
bias, as been pointed out in this article?
Mr. Wheeler. Yes and no.
Mrs. Ellmers. Yes and no?
Mr. Wheeler. Yes, I am--there were two questions there. One
was am I listening and the other is there a bias.
Mrs. Ellmers. So yes, to you are listening and no to the
bias.
Mr. Wheeler. Yes, I am listening. No, there is no bias.
Mrs. Ellmers. Thank you. OK.
So, in 2012, there was a white paper that was created and
Mr. Chairman, I ask unanimous consent to submit this for the
record. \2\
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\2\ The information has been retained in committee files and is
also available at http://docs.house.gov/meetings/if/if16/20160322/
104714/hhrg-114-if16-20160322-sd004.pdf.
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Mr. Johnson. Without objection, so ordered.
Mrs. Ellmers. Thank you. It was a white paper on video
reform from one of these groups, a special interest group
called Public Knowledge, which seems to indicate that you are
listening to very few voices.
I look at the executive summary and find that there are
four recommendations listed here that you have basically
initiated by your administration. And I will go through a
couple of them, as time allows.
One, the FCC should issue a declaratory ruling that
multichannel video programming distributors, it goes on to say,
may not engage in unfair methods of competition or deceptive
acts and practices with regard to online video distributors.
You started this process to--to that question, have you not
started that process?
Mr. Wheeler. I am sorry, I am confused here. I wasn't
chairman in 2012 and I am kind of----
Mrs. Ellmers. You were part of the FCC at that time,
though.
Mr. Wheeler. No, ma'am.
Mrs. Ellmers. You were----
Mr. Wheeler. I was a businessman then.
Mrs. Ellmers. OK, but basically the point I am making is
that in this 2012--not that you were there in 2012. This white
paper was generated in 2012. But the point I am trying to make
is that you are adhering to this white paper.
Mr. Wheeler. I am sorry, ma'am, I am unfamiliar with that
white paper.
Mrs. Ellmers. OK. Well, then I will just point out then
that this particular white paper outlined this particular
suggestion and you are following it.
Mr. Wheeler. On which topic or recommendation?
Mrs. Ellmers. OK, I will read it again for you. The FCC
should issue a declaratory ruling that multichannel video
programming distributors, and it goes on to say, may not engage
in unfair methods of competition or deceptive acts and
practices with regard to online video distributors. And that is
part of the white paper.
You started this process with questions to that practice.
Is that not true?
Mr. Wheeler. I apologize. An online video distributor is--
--
Mrs. Ellmers. OK, I will tell you what. Let's leave that
one aside.
Mr. Wheeler. OK.
Mrs. Ellmers. The FCC, and this is, again, in the white
paper, the FCC should begin a proceeding to determine which
regulations ought to apply to OVDs that choose to operate as
MVPDs themselves. You have begun this rulemaking as well, have
you not?
Mr. Wheeler. Thank you. I have proposed and then have not--
--
Mrs. Ellmers. Yes or no? Yes or no?
Mr. Wheeler. Have not moved on.
Mrs. Ellmers. OK. Well, there again, I would like to submit
a couple more of the quotes from the white paper. We are
submitting the white paper for the record.
But you know, Chairman, I will be honest and tell you at
this point, and after watching this process, I am not sure
exactly whose opinion you are actually taking----
Mr. Johnson. Will the gentlelady yield?
Mrs. Ellmers. My time has expired. And this is troubling to
me. So, this is very troubling and I think that we need to take
more time to acknowledge the fact that you may be taking
opinions that are truly biased and that is very frightening to
me moving forward.
And I yield back, Mr. Chairman.
Mr. Johnson. Did the gentlelady want to specifically say
what she wanted to add to the record there, your last comment?
Mrs. Ellmers. Well I what will say is I basically, Mr.
Chairman, and I thank you, I have a couple of quotes and
basically I will ask for those yes or no answers in written
form.
Mr. Johnson. Without objection, so ordered.
Mrs. Ellmers. Thank you.
Mr. Johnson. The gentlelady has expired.
The chair now recognizes Mr. Collins from New York.
Mr. Collins. Thank you, Mr. Chairman. And thank you,
witnesses. It is almost this is a 3-hour hearing. I have to
admit I took a break and had lunch.
What would be a hearing without the New York guy asking
about pirate radio? So, here we go. I don't think I will take
the whole 5 minutes. But Mr. Wheeler, you and I have had this
discussion back and forth.
Mr. Wheeler. Yes, sir.
Mr. Collins. And so in questions after, following the March
19 oversight hearing, you were asked about the report that
showed a decline in enforcement in pirate radio. And the
question was, has any guidance or instruction been given by the
Office of the Chairman or Enforcement Bureau to commission
staff not to enforce the statute or commission rules with
regard to unlawful operations?
July 21, we did a get a response, July 21, 2015, from you
that stated the Office of the Chairman and the Enforcement
Bureau have not given or instructed to the commission staff not
to enforce the statute or commission rules with regard to
unlawful operation. I am assuming you remember that.
Mr. Wheeler. Yes, sir.
Mr. Collins. OK. So, 1 week later, July 28 we spoke again
in this hearing and I asked you if there was any truth to the
reports to the suggestion that the FCC had actually directed
field offices to step down and back away from an enforcement.
You responded, and I quote, I have heard that. And you further
added that any such command did not come from you.
So, last December, the existence of an internal email
within the Enforcement Bureau, this was last December, was
disclosed that in October of 2014 the staff of the Bureau's
Northeast Region was informed that the FCC's response to pirate
radio operations was being scaled back and the Enforcement
Bureau would not be issuing notices of apparent liability to
the majority of individuals engaged in such unlawful behavior.
So, my question is, since that disclosure came forward last
December, have you looked into that directive.
Mr. Wheeler. I have not looked into that, which I maybe
had, you know was not compos mentis or something at the time.
As you read that into the record, I do not remember that. But I
have taken serious interest in pirate radio. And I am told that
about 20 percent of the activities of the Enforcement Bureau
are directed to pirate radio; that we have had about 130
enforcement actions last year; that we continue on that.
And I would add my voice to Commissioner O'Rielly's comment
earlier about one of the realities that we are finding here is
that we need to get to those who enable it. We can't just pat
ourselves on the back for playing whack-a-mole, that we need to
get to those that enable it. And if there could be legislation
that would address that and empower us to do with----
Mr. Collins. Well, I have got a couple of questions. First
of all, I would like, if you could, look into that directive
and get back to our committee----
Mr. Wheeler. Thank you.
Mr. Collins [continuing]. about who issued that directive.
We would like to know where that came from. But also,
recently----
Mr. Wheeler. The email does not say? I am sorry. There is
the email. Is there an email?
Mr. Collins. I don't have the details.
Mr. Wheeler. OK, I will get on top of that.
Mr. Collins. But real quickly, my last point. You just
mentioned the need for congressional action to take on the
landlords and the others that might be behind the scenes
working on this. But by the same token, there was recently
released from the FCC an advisory notice from the Enforcement
Bureau that stated that the FCC already has the ability to take
FCC enforcement against those individuals. Your own bulletin
said that.
So, I think that it is a bit disingenuous to say you need
congressional action when your own Enforcement Bureau
regulations says you have already got the authority.
Mr. Wheeler. We would love to come back to you and be able
to specifically identify the legislative authority that we are
talking about.
Mr. Collins. But your own enforcement people say you have
already got the authority. So, I would encourage you to, move
forward.
Mr. Wheeler. I think the question is what is the extent of
that----
Mr. Collins. In my last 12 seconds, because I don't want to
hold us over, I just also want to ask a very direct question
because it has been suggested that senior managers of the
Enforcement Bureau do not want to shut down pirate radio
operations because they serve certain communities, certainly
within New York City, that might not have otherwise access to
that.
Is there any truth in that?
Mr. Wheeler. Well, that would be wrong.
Mr. Collins. And so there is no truth in that? And it would
be wrong.
Mr. Wheeler. It is news to me.
Mr. Collins. OK, well I appreciate that fairly direct
answer.
With that, Mr. Chairman, I yield back.
Mr. Johnson. I thank the gentleman for yielding back.
And the chair now recognizes the ranking member, Ms. Eshoo.
Ms. Eshoo. Thank you, Mr. Chairman. I have a unanimous
consent request to place into the record a compilation of
documents. \3\ The documents include press reports documenting
that broadband investment has not decreased as a result of the
Title II reclassification. The documents also include an
analysis of FCC filings and earnings reports of the major
telecom companies, similarly showing that broadband investment
has not decreased and also a letter relative to broadband
privacy rulemaking, all of which we have shared with your
counsel and ask that these be placed in the record.
[The information appears at the conclusion of the hearing.]
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\3\ The list has been retained in committee files and is also
available at http://docs.house.gov/meetings/if/if16/20160322/104714/
hhrg-114-if16-20160322-sd008.pdf.
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Mr. Johnson. Without objection, so ordered.
Ms. Eshoo. Thank you, Mr. Chairman.
Mr. Johnson. I remind members that they have--first of all,
I want to thank the panel for being with us today. Thank you
very much. I am not used to sitting in this chair. So, I almost
forgot that part. Thank you for being here.
I remind members that they have 10 business days to submit
questions for the record. And I ask the witnesses to respond to
the questions promptly. Members should submit their questions
by the close of business on April 6th.
Without objection, the subcommittee is adjourned.
[Whereupon, at 1:12 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
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