[Senate Hearing 113-132]
[From the U.S. Government Publishing Office]
S. Hrg. 113-132
OVERSIGHT OF THE
FEDERAL COMMUNICATIONS COMMISSION
=======================================================================
HEARING
before the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
MARCH 12, 2013
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
JOHN D. ROCKEFELLER IV, West Virginia, Chairman
BARBARA BOXER, California JOHN THUNE, South Dakota, Ranking
BILL NELSON, Florida ROGER F. WICKER, Mississippi
MARIA CANTWELL, Washington ROY BLUNT, Missouri
FRANK R. LAUTENBERG, New Jersey MARCO RUBIO, Florida
MARK PRYOR, Arkansas KELLY AYOTTE, New Hampshire
CLAIRE McCASKILL, Missouri DEAN HELLER, Nevada
AMY KLOBUCHAR, Minnesota DAN COATS, Indiana
MARK WARNER, Virginia TIM SCOTT, South Carolina
MARK BEGICH, Alaska TED CRUZ, Texas
RICHARD BLUMENTHAL, Connecticut DEB FISCHER, Nebraska
BRIAN SCHATZ, Hawaii RON JOHNSON, Wisconsin
WILLIAM COWAN, Massachusetts
Ellen L. Doneski, Staff Director
James Reid, Deputy Staff Director
John Williams, General Counsel
David Schwietert, Republican Staff Director
Nick Rossi, Republican Deputy Staff Director
Rebecca Seidel, Republican General Counsel and Chief Investigator
C O N T E N T S
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Page
Hearing held on March 12, 2013................................... 1
Statement of Senator Pryor....................................... 1
Statement of Senator Thune....................................... 3
Statement of Senator Rockefeller................................. 8
Statement of Senator Wicker...................................... 10
Statement of Senator Ayotte...................................... 38
Statement of Senator Blunt....................................... 40
Statement of Senator Coats....................................... 45
Statement of Senator Fischer..................................... 49
Statement of Senator Heller...................................... 51
Statement of Senator Warner...................................... 52
Statement of Senator Klobuchar................................... 54
Statement of Senator Rubio....................................... 57
Statement of Senator Blumenthal.................................. 59
Statement of Senator Nelson...................................... 61
Statement of Senator Begich...................................... 64
Statement of Senator Cruz........................................ 67
Statement of Senator Cantwell.................................... 69
Witnesses
Hon. Julius Genachowski, Chairman, Federal Communications
Commission..................................................... 4
Prepared statement........................................... 6
Hon. Robert M. McDowell, Commissioner, Federal Communications
Commission; accompanied by Hon. Mignon L. Clyburn,
Commissioner, Federal Communications Commission; Hon. Jessica
Rosenworcel, Commissioner, Federal Communications Commission;
and Hon. Ajit Pai, Commissioner, Federal Communications
Commission..................................................... 11
Prepared statement of Hon. Robert M. McDowell................ 13
Prepared statement of Hon. Mignon L. Clyburn................. 21
Prepared statement of Hon. Jessica Rosenworcel............... 23
Prepared statement of Hon. Ajit Pai.......................... 27
Appendix
Response to written questions submitted to Hon. Julius
Genachowski by:
Hon. John D. Rockefeller IV.................................. 73
Hon. Barbara Boxer........................................... 74
Hon. Bill Nelson............................................. 78
Hon. Frank R. Lautenberg..................................... 80
Hon. Claire McCaskill........................................ 81
Hon. Amy Klobuchar........................................... 83
Hon. Richard Blumenthal...................................... 84
Hon. William M. Cowan........................................ 86
Hon. Roger F. Wicker......................................... 87
Hon. Roy Blunt............................................... 89
Hon. Kelly Ayotte............................................ 89
Hon. Dean Heller............................................. 90
Hon. Dan Coats............................................... 92
Response to written questions submitted to Hon. Robert M.
McDowell by:
Hon. Barbara Boxer........................................... 92
Hon. Frank R. Lautenberg..................................... 94
Hon. Claire McCaskill........................................ 94
Hon. Richard Blumenthal...................................... 97
Hon. William M. Cowan........................................ 98
Hon. Kelly Ayotte............................................ 99
Hon. Dean Heller............................................. 99
Response to written questions submitted to Hon. Mignon L. Clyburn
by:
Hon. Barbara Boxer........................................... 101
Hon. Frank R. Lautenberg..................................... 103
Hon. Claire McCaskill........................................ 104
Hon. Richard Blumenthal...................................... 107
Hon. William M. Cowan........................................ 108
Hon. Kelly Ayotte............................................ 109
Hon. Dean Heller............................................. 109
Response to written questions submitted to Hon. Jessica
Rosenworcel by:
Hon. Barbara Boxer........................................... 112
Hon. Frank R. Lautenberg..................................... 113
Hon. Claire McCaskill........................................ 114
Hon. Amy Klobuchar........................................... 117
Hon. Richard Blumenthal...................................... 118
Hon. John Thune.............................................. 119
Hon. Dean Heller............................................. 120
Response to written questions submitted to Hon. Ajit Pai by:
Hon. Barbara Boxer........................................... 123
Hon. Claire McCaskill........................................ 124
Hon. Richard Blumenthal...................................... 126
Hon. Dean Heller............................................. 127
OVERSIGHT OF THE
FEDERAL COMMUNICATIONS COMMISSION
----------
TUESDAY, MARCH 12, 2013
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 2:52 p.m. in room
SR-253, Russell Senate Office Building, Hon. Mark Pryor,
presiding.
OPENING STATEMENT OF HON. MARK PRYOR,
U.S. SENATOR FROM ARKANSAS
Senator Pryor. I am going to go ahead and call us to order
here, so why doesn't everybody find their seats, please. We
will go ahead and call this meeting to order.
I want to say thank you. Chairman Rockefeller is on his way
with the rest of the Democrats. So, Senator Thune, this is the
moment we have been waiting for, right? Isn't that right?
[Laughter.]
Senator Thune. Let's do some business, Mr. Chairman.
Senator Pryor. Yes, now we can do some good around here.
Senator Thune. Mark, you didn't get invited to the lunch?
Senator Pryor. No. They kicked me out of the lunch a long
time ago.
No, actually, Senator Rockefeller wanted me to come to get
this launched because we know that several Members here and
several Members of the Commission have tight schedules. So let
me just say--I am not going to try to give Senator
Rockefeller's opening statement. What I will do is--we will
just proceed until he is able to get here.
So let me just say, for my part, I am pleased to serve as
Chairman of the Communications, Technology, and Internet
Subcommittee. And, together with Ranking Member Wicker and all
other of the Committee and Subcommittee members, I want to look
forward to a bipartisan exchange of views on all the key
policies that are in that Subcommittee's jurisdiction and also
that the FCC has jurisdiction over, as well.
In today's fast-changing information and communications
technology environment, it is vital that the Committee and the
Subcommittee take a fresh look at the regulatory consumer
landscape. That is why I announced yesterday that the
Subcommittee will hold a series of hearings to examine the
state of various communications markets. I think all the
Committee and Subcommittee members will have the benefit of
hearing from stakeholders on the opportunities and the
challenges that they face. So we are going to do Subcommittee
hearings on wireless communications, wired communications,
video, and rural communications. So all of these are kind of
``state of'' hearings to find out what the lay of the land is
right now.
As the Subcommittee begins its examination, I believe we
should keep several key principles in mind. Foremost, we need
to ensure that investment continues to support the expansion of
technology advancements in broadband connectivity. This
includes our commitment to ensuring access to robust broadband
to support 21st-century smart choices in things like health
care, education, energy, and job creation.
We must also make sure that consumer confidence in our
communications networks and policies is there. This includes
continued work on practical steps for online privacy and
safety. And we must aggressively fight fraud and abuse.
I want to thank all five FCC Commissioners for being here
today. I know you all have a lot on your plate, and I
appreciate hearing from you on the issues before your agency.
And I am particularly interested in your work on the pending
broadcast television incentive auctions, a topic which the
Subcommittee is also planning to explore.
I was pleased that the February 2012 public safety spectrum
legislation provided the Commission with the authority to
conduct incentive auctions. This authority hopes to bridge the
need for additional wireless spectrum through a voluntary
program under which the broadcasters can trade spectrum usage
rights in exchange for a share of the proceeds. The proper
groundwork for these new auctions is essential to ensure that
the full benefit of this new authority is realized by all
stakeholders.
I expect the FCC's work on these auctions to be faithful to
the statute, which I know it will be. Congress tried to
carefully balance competing concerns in the statute to free up
much-needed spectrum for wireless broadband while ensuring a
healthy future for the broadcast industry and while recognizing
the greater goal of modernizing public safety communications
for mobile broadband.
Which brings me to Senator Rockefeller's favorite topic,
which is FirstNet. These incentive auctions should provide a
critical $7 billion in dedicated funding for a nationwide
wireless broadband network for public safety. This network will
provide a new era of lifesaving communication and efficiencies
for first responders. It will equip our firefighters, police
officers, and medical responders with the tools they need to
communicate with each other in real time during crises around
the country and across state lines.
Finally, I want to touch on your ongoing implementation of
the 21st Century Communications and Video Accessibility Act. As
you know, I was the primary of this legislation. The CVAA is
incredibly important for the economy. Already, millions of
Americans are able to more fully contribute to the economy
because of the law. I will continue to closely monitor your
work, and I look forward to doing that. And I look forward to
hearing from you and get an update on your efforts.
In closing, there are a host of other issues, from being
vigilant against consequences of texting while driving to
universal service to the future of rural communications
networks. And I look forward to reviewing with my colleagues
all of these issues and look forward to working with the
Commission on all of them.
Senator Thune, if you are ready, I will turn it over to
you.
STATEMENT OF HON. JOHN THUNE,
U.S. SENATOR FROM SOUTH DAKOTA
Senator Thune. Great. Thank you, Mr. Chairman. I want to
thank you and Chairman Rockefeller for holding this hearing and
want to welcome Chairman Genachowski and all the members of the
Commission before us today. Thank you all for being here.
This is an important subject matter, and your Subcommittee
is obviously going to be a very busy one. And, obviously, as
you can tell by the turnout today, a lot of interest. I am glad
to see the great representation we have from members on our
side. And I hope that we get an opportunity to have a little
interaction with the Commissioners as we move forward.
We are living in the middle of a digital revolution, which
is being powered, in large part, by the huge investments made
by the broadband industry. There is enormous potential for job
creation and innovation in the broadband, Internet, and
technology sectors, and this potential may be most evident in
the area of mobile broadband.
According to a recent Cisco report, mobile data traffic in
the United States grew 62 percent last year, and by 2017 there
will be a thirteenfold increase worldwide. By one estimate, the
Nation's mobile broadband industry directly or indirectly
supports 3.8 million jobs, contributing more than $195 billion
to the U.S. gross domestic product and driving $33 billion in
productivity improvements in 2011 alone.
Unfortunately, a single point of failure under the
government's control could jeopardize this great potential for
job creation and innovation, and that is access to wireless
spectrum. Mobility is driving the innovation economy, and
spectrum is what fuels wireless mobility. Without enough
spectrum, the private sector will not be able to keep pace with
consumer demand, which is growing exponentially. That is why we
must make it a priority to increase the availability of
spectrum for commercial uses as quickly as possible and to do
so in collaboration with industry and government stakeholders.
More broadly, I believe we also must focus on establishing
a 21st century legal and regulatory structure that serves the
purposes of our 21st century economy. It is time for this
committee to take a look at modernizing our nation's rules and
regulations to better reflect today's converged marketplace.
Our technology and telecommunications sectors have been
profoundly changed by the Internet, yet much of our country's
communications laws were written in a pre-Internet world.
These sectors are characterized by extremely dynamic
companies, and we must ensure that the FCC is as nimble as they
are. It has been 23 years since this FCC was last reauthorized
by Congress, and it may be time to develop a new FCC
reauthorization bill to ensure the Commission is an efficient
and truly modern regulator, one that is a reliable resource for
Congress and an effective agency for American citizens and
industry alike.
While I am very enthusiastic about the great potential of
the digital revolution, I want to make sure that all consumers,
including those in our rural communities, are able to enjoy the
economic and societal benefits of the Internet. So I want to
thank Chairman Rockefeller. He and I share the same goal of
getting rural America connected to advanced communications. And
some of the best network infrastructure in the world exists
today in some of the most unlikely places due in no small part
to your leadership and keen interest in making rural America a
priority.
Last, I just want to mention the issue of sequestration. I
have been disappointed by the administration's politically
motivated scare tactics on this subject. And I hope that an
independent commission like the FCC will not be just another
agency following the White House's lead in trying to find cuts
that can trigger a press release before looking to internal
cost-saving measures that are less newsworthy.
And so, Chairman Rockefeller--when he gets here--I look
forward to working with him and with the Commission to unleash
the great potential of the American people to create jobs and
to spur innovation for the 21st century economy.
So thank you, Mr. Chairman. And I look forward to hearing
from our panel today.
Senator Pryor. Thank you, Senator Thune.
I know that we also, in addition to Senator Rockefeller, we
want to recognize Senator Wicker when he arrives. But since
they are not here, let's go ahead and start with our panel.
And the way that we have this set up today is we have all
five commissioners here, and we very much appreciate your
attendance. But what we are going to ask is we are going to ask
Chairman Genachowski to make an opening statement and also
Commissioner McDowell to make an opening statement. And in the
interest of time, we will not ask Commissioners Clyburn,
Rosenworcel, or Pai to make opening statements, but certainly
they will be here and available to answer questions.
So, Chairman Genachowski, thank you for being here.
STATEMENT OF HON. JULIUS GENACHOWSKI, CHAIRMAN, FEDERAL
COMMUNICATIONS COMMISSION
Mr. Genachowski. Thank you, Chairman Pryor. Thank you, and
congratulations on the chairmanship of the Subcommittee. It has
been a privilege working with you for the last several years;
Senator Thune, you, as well. And I have gotten to know many of
you on the Committee over the last few years, and I see some
new faces. And I am looking forward to working together.
Let me briefly start with two actions the Commission took
today: first, approval of the T-Mobile-MetroPCS deal in the
area of mobile and spectrum. Senator Thune, as you mentioned,
this is good news for our mobile economy and mobile consumers.
Second, I wanted to mention the issue of rural call
completion, which a number of you have raised with me over the
last several months. Our enforcement bureau took a significant
action today. The issue here: when consumers can't receive
calls that are made to them, it is a serious threat both to
public safety and also to our economy. Today we announced our
first major enforcement action in this space, a $1 million
consent decree. We will continue to follow the facts wherever
they lead, and we will hold responsible parties accountable.
Now, since we last appeared before this committee, the
Commission has been hard at work to maximize the benefits of
broadband for our economy, our global competitiveness, and
Americans' daily lives.
And we continue to receive news that the ICT sector, what
some call the broadband economy, is thriving in the U.S. Over
the past few years, the U.S. has regained global leadership in
mobile, with as many 4G LTE subscribers as the rest of the
world combined. And while mobile infrastructure investment in
Europe and Asia has been roughly flat since 2009, annual mobile
investment in the U.S. is up 40 percent over this period. Last
year, more than 19 million miles of fiber were laid in the
U.S.--more than all of Europe combined and the best year in the
U.S. since 2000.
The FCC continues to make progress on key elements of our
strategic agenda, as laid out initially in our National
Broadband Plan. I will touch on just a few here.
Since the Committee's last FCC oversight hearing, we are
moving forward with implementation of the major spectrum and
public safety law that Congress passed last year, originating
on a bipartisan basis in this committee.
Last September, we launched our first incentive auctions
proceeding--a comprehensive proposal to implement the law, free
up significant spectrum, and designed to help drive continued
U.S. leadership, and, as I said, free up the spectrum that our
mobile economy needs. We are on track to run the world's first
incentive auction next year.
Of course, FirstNet is another important piece of the new
law. The Commission is taking its FirstNet responsibility
seriously and has met all of its obligations under the statute
on schedule.
Another key public safety priority for the Commission is
improving the resiliency of our networks in times of emergency.
Next week at our Commission meeting, we will be launching a
rulemaking to strengthen 911 reliability.
Our work to enhance cybersecurity continues, as well,
building on smart actions last year to address challenges
relating to botnets and Internet routing and DNSSEC. We are now
focusing on practical steps to improve the security of wireless
devices, apps, and networks.
Universal service reform continues to move forward. With
bipartisan support from Congress, we adopted last year a major
transformation of the multibillion-dollar program that puts us
on the path now to broadband access for all Americans by the
end of the decade.
This past July, we rolled out the first phase of the
Connect America Fund, supporting projects to bring broadband to
nearly 400,000 Americans in unserved rural communities across
37 states. In October, we held the first round of the Mobility
Fund, an unprecedented reverse auction that used $300 million
to efficiently expand wireless coverage to 84,000 unserved road
miles across 31 states.
Of course, in this fast-moving sector where global
competition is fierce, challenges remain. We need to continue
to free up more spectrum for mobile broadband. We need to
continue to drive increasing broadband speed and capacity,
including to our schools and libraries and other anchor
institutions. There is a big need and opportunity around
education technology.
We need to continue pushing for increased broadband
adoption. We must continue to promote Internet freedom and
openness at home and abroad. We need to continue updating our
policies for the broadband era, a process kick-started with our
work on the National Broadband Plan in 2009-2010. We need to
promote media diversity. We need to continue to promote vibrant
and healthy competition and protect and empower consumers.
In my written statement, I have outlined many of the
actions we have launched to tackle these challenges, such as
the Gigabit Cities Challenge to promote a critical mass of 1-
gigabit innovation hubs across America, and the Technology
Transitions Task Force to modernize the Commission's rules.
Let me close by briefly addressing sequestration. The FCC
is currently operating at its lowest employee levels in many
years. I do have serious concerns that the cuts ongoing
sequestration will require will harm the ability of the FCC to
deliver on its vital mission, including universal service,
public safety, spectrum management, and consumer protection.
I look forward to continuing to work with this committee on
these and other issues, and I look forward to your questions.
Thank you.
[The prepared statement of Mr. Genachowski follows:]
Prepared Statement of Hon. Julius Genachowski, Chairman,
Federal Communications Commission
Chairman Rockefeller, Ranking Member Thune, Members of the
Committee, thank you for the opportunity to be here today.
Let me begin by acknowledging Chairman Rockefeller's recently
announced decision to retire from the Senate in 2014. From E-Rate,
which has helped connect almost every classroom in America to the
Internet, to FirstNet, which will help our first responders do their
jobs better and make our communities safer, your legacy of improving
the lives of the American people through communications technology is
remarkable and enduring.
Congratulations to Senator Thune on becoming Ranking Member of this
Committee. You bring deep knowledge and years of experience to this
important position, and the Commission looks forward to being a
resource for you and your staff.
Since we last appeared before you, the Commission has been hard at
work to maximize the benefits of broadband for our economy, our global
competitiveness, and all Americans' daily lives. And we continue to
receive news that the ICT sector--what I've been calling the broadband
economy--is thriving.
Over the past few years, the U.S. has regained global leadership in
mobile, with as many LTE subscribers as the rest of the world combined.
While mobile infrastructure investment in Europe and Asia has been
roughly flat since 2009, annual mobile investment in the U.S. is up 40
percent over this period. And last year, more than 19 million miles of
fiber were laid in the U.S., more than all of Europe combined, and the
best year in the U.S. since 2000.
The FCC continues to make progress on key elements of our strategic
agenda as laid out initially in the National Broadband Plan. I'll touch
on just a few here.
Since this Committee's last FCC oversight hearing we are moving
forward with implementation of the major spectrum and public safety law
Congress passed last year, originating on a bipartisan basis in this
Committee.
Last September, we launched our incentive auctions proceeding--a
comprehensive proposal to free up significant spectrum and designed to
help drive continued U.S. leadership in mobile--and we're on track to
run the world's first incentive auction next year. We are committed to
ensuring healthy financial incentives for broadcasters to facilitate
their participation.
Of course, FirstNet is another important piece of the new law. The
Commission is taking its FirstNet-related responsibilities seriously
and has met all of its obligations under the statute on schedule.
Another key public safety priority for the Commission is improving
the resiliency of our networks in times of emergency. In January, we
issued a report detailing vulnerabilities in our 9-1-1 systems that
were exposed by the 2012 Derecho Storm, and last month we launched a
series of field hearings to identify steps to improve network
reliability and resilience during and in the aftermath of disasters.
And next week we will launch a rulemaking to strengthen 9-1-1
reliability and resiliency.
Our work to enhance cybersecurity continues. Building on smart
actions developed with our multi-stakeholder Communications Security,
Reliability and Interoperability Council to address challenges related
to botnets, Internet routing, and Domain Name System (DNS) security,
we're now focusing on practical steps to improve the security of
wireless devices, apps, and networks.
Universal service reform continues to move forward. With bipartisan
support from Congress, we adopted last year a major transformation of
the multi-billion dollar program that puts us on the path to broadband
access for all Americans by decade's end. This past July we rolled out
the first phase of the Connect America Fund, supporting projects to
bring broadband to nearly 400,000 Americans in unserved rural
communities across 37 states. In October, we held the first round of
the unprecedented Mobility Fund reverse auction, which used $300
million to efficiently expand wireless coverage to 84,000 unserved road
miles across 31 states. In December, we adopted major reforms of USF's
rural health care program, creating the Healthcare Connect Fund to
connect thousands of rural and urban healthcare providers across the
country. And we're making good progress finalizing the cost model for
the long-term Connect America Fund, putting the Commission on track to
launch this landmark initiative--the largest broadband infrastructure
program ever established--later this year.
Of course, in this fast-moving sector, where global competition is
fierce, challenges remain.
We need to continue to free up more spectrum for mobile broadband.
That's why we unleashed 30 MHz of WCS spectrum and 40 MHz of AWS-4
spectrum last year. And that's why we're pushing forward with the
auction of 75 MHz of additional spectrum and new rules we proposed in
December to enable widespread deployment of small cells in the 3.5 GHz
band, which would unleash an additional 100 MHz of spectrum for mobile
broadband. These actions have us on track to meet our ambitious goal of
freeing up 300 MHz of spectrum for broadband by 2015.
We need to continue to drive increasing broadband speed and
capacity, including to our schools, libraries, and other anchor
institutions.
That's why earlier this year I issued the Gigabit Cities Challenge,
which calls for at least one innovation hub with ultra-high-speed
broadband in every state by 2015, and why the Commission is working
with municipalities and broadband providers to meet this challenge. To
promote investment in faster wired and wireless networks, we continue
to seek ways to remove barriers to broadband buildout, building on
policies like our tower siting shot clock; our order to ease access to
utility poles; and ``Dig Once,'' which encourages laying fiber conduit
any time roads are being constructed or repaired.
We need to continue pushing for increased broadband adoption.
That's why we recently announced a partnership with HUD to extend
greater digital literacy training to more than 4 million families
living in public housing.
We must continue to promote Internet freedom and openness at home
and abroad.
At the World Conference on International Telecommunications in
Dubai in December, the U.S. fought attempts by a number of countries to
give a U.N. organization, the International Telecommunication Union,
new regulatory authority over the Internet. Ultimately, over the
objection of the U.S. and others, 89 countries voted to approve a new
treaty that would strengthen the power of governments to control online
content. The Internet should remain free of gatekeepers, and I am
committed to working with my fellow Commissioners, Congress, the
Administration, and private sector stakeholders to preserve Internet
freedom and openness and to resist efforts to balkanize the Internet.
We need to continue updating our policies for the broadband era--a
process kick-started by our work on the National Broadband Plan.
Among many actions, we've already overhauled intercarrier
compensation to eliminate obstacles to deployment of all IP-networks.
In December I launched the Technology Transitions Task Force to conduct
a data-driven review and provide recommendations to modernize the
Commission's rules. And just last week I circulated a NPRM proposing
that VoIP providers receive direct access to numbers. We're working to
accelerate technology transitions while recognizing that these
transitions do not change the Commission's core responsibilities under
the Communications Act: universal service, promoting competition,
consumer protection, and public safety.
We need to promote media diversity.
The Commission recently approved the largest expansion of community
radio in U.S. history. We are also undertaking our Congressionally-
mandated review of our media ownership rules. We expect to receive a
study on the effects of cross-ownership rules on minority ownership and
newsgathering, and this will enhance the record in the Commission's
proceeding. As the Commission considers the issues before it, goals
that are particularly important include guarding against excessive
media consolidation, promoting ownership diversity, enabling robust
local news for all communities, and fostering economic growth and
opportunity.
And we need to continue promoting vibrant and healthy competition
and protecting and empowering consumers through strong actions like our
data roaming rules, recently upheld by the D.C. Circuit.
Let me close by addressing sequestration. The FCC is currently
operating at its lowest staffing levels in many years. I have serious
concerns because the ongoing sequestration cuts will harm the ability
of the FCC to deliver on its vital mission, including universal
service, public safety, spectrum management, and consumer protection.
I look forward to continuing to work with this Committee on these
and other issues and I look forward to your questions.
Thank you.
Senator Pryor. Thank you.
And, Mr. Chairman, because of our delay, we went ahead and
started. And I can either recognize Commissioner McDowell right
now and give you a few moments or I could recognize you for
your opening statement. Which do you prefer?
The Chairman. I think that second idea is sensational.
Senator Pryor. Of recognizing you for your opening
statement?
The Chairman. Right. Right.
[Laughter.]
Senator Pryor. Mr. Chairman, you are recognized.
STATEMENT OF HON. JOHN D. ROCKEFELLER IV,
U.S. SENATOR FROM WEST VIRGINIA
The Chairman [presiding]. OK. I apologize.
Communications technology obviously is reshaping every
aspect of our society. I believe that this change is
overwhelmingly positive. But, as last week's hearing on
cybersecurity reinforced, this change is not without
substantial risk to our national and economic security. Just as
harnessing technological innovation is crucial to our economic
future, addressing the dangers of a completely interconnected
world is just as critical.
Cybersecurity is one of the great. I have two speeches
about cybersecurity, and this is the right one for here.
[Laughter.]
The Chairman. It is one of the great national security
challenges that we face. It is the main one that we face. It is
going to keep getting bigger.
At an intelligence briefing this morning from all heads of
the intelligence community, they are scared to death of it.
Everybody is just sort of taking it for granted somebody is
going to fix it. And we can't get legislation passed. And we
have to. And John Thune and I and Dianne Feinstein and Saxby
Chambliss and Tom Carper and Dr. Coburn are all going to work
together this time--three committees working together.
I believe that two other areas are absolutely critical for
government and industry to come together to address some
pressing needs: first, the construction of a nationwide
interoperable public safety network that our first responders
are owed and have been given under law. Second, we must make
sure that every child in this country is prepared to compete in
the global economy. And that means having access to the
Internet and all innovations deriving from the Internet.
As most of you have heard me say, the job of being an FCC
commissioner is surely one of the hardest, most difficult,
perilous jobs in all of Washington. But then again, we just had
our caucus lunch with the President, so I will modify that a
little bit.
[Laughter.]
The Chairman. Your actions affect how we communicate, what
we see on television, the deployment of new technologies and
interactive services.
Making sure that our first responders have the spectrum and
communication networks that they need to keep us safe is,
frankly, an incredibly proud achievement for this committee. I
think it is the defining piece of legislation for this
committee. Congress allocated $7 billion for the construction
of this network, which will come from the auction proceeds of
spectrum voluntarily--you can spell that if you want--offered
up by broadcasters.
The agency's incentive auction proceeding is one of the
agency's most important undertakings in its history. I know
that this is a complicated proceeding--believe me, I know
that--that affects whole industries. But I believe that the
auction must be driven by one single principle: It must
maximize the resources available for the construction of a
nationwide interoperable broadband network for first
responders, on which we have already voted.
I urge the Commissioners to move forward on an aggressive
timetable to get this proceeding done. I have no doubt that
when we are completed on that, the public safety network will
save a whole lot of lives. And I really mean that. This is an
area where government and private sector must continue to work
collaboratively to solve the most important public safety issue
that we, in fact, face.
Just as we are future-proofing our public safety, we must
also future-proof our efforts to make sure every child in
America has access to cutting-edge technology.
Mr. Chairman, I apologize for not starting out by
recognizing you, who I have now double-inconvenienced.
[Laughter.]
The Chairman. As part of the Telecommunications Act of
1996, Olympia Snowe and I created a little-known program called
the E-Rate. I thought it was a toy at first, early in the
legislation. I believe that this program is incredible. Our
little provision helped drive the broadband revolution in this
country by exposing a generation of kids to the power of the
Internet. It is just an unbelievable revolution--unbelievable
revolution.
The E-Rate program has fundamentally transformed education
in this country. We have connected our most remote school areas
and libraries to the world. Why libraries? Because adults
aren't in elementary school but they can go to libraries. The
E-Rate has enabled schoolchildren across this country to
participate in the information society.
And I have seen firsthand the benefits of the E-Rate in my
state, which is not a rich state. The impact of the E-Rate in
our schools has been amazing. More than 92 percent of
classrooms have Internet access. You just have to have an
understanding of what that means. But, then again, I think I
remember that when we started, California, only 15 percent of
their classrooms had access, which surprised me. Anyway, 92 is
good, and we have to get better.
But as impressive and important as this statistic is, basic
Internet connectivity is not sufficient to meet our 21st
century educational needs. I repeat that: It is not sufficient
for our future. As every educator knows, digital information
and technology will continue to play an increasing role in
education, so we need to think about how we are going to meet
the broadband infrastructure needs of our schools and
libraries. We need to think big about the future of E-Rate.
Simply put, we need to create E-Rate 2.0. We need to fund and
adapt E-Rate to meet the needs of a data-driven society.
By the end of this decade, I believe that every school in
America should have 1 gigabit of connectivity. And if every
coffee shop in America can offer wireless connectivity, then,
by golly, every school in America should be able to offer it,
as well. We owe this to our children.
I end simply by this. Actually, it is more than this.
In 1996, everyone dismissed the need for the E-Rate.
Telecommunications companies took the FCC to court over the
program many times. They all swore in written letters that they
would not take us to court. They all took us to court. And they
all lost. It was wonderful.
[Laughter.]
The Chairman. We have two decades of proof that the E-Rate
has worked. It enabled an education revolution. It exposed a
generation to the power of information and learning. It
literally connected the least among us to the world in a way
never before possible.
So today I urge the FCC and industry to join us in an
effort to make sure that every child in America has a bright
future, that every child has access to the transformative power
of technology.
And I thank you for your courtesy and patience.
OK, we are going to go to Senator Wicker.
STATEMENT OF HON. ROGER F. WICKER,
U.S. SENATOR FROM MISSISSIPPI
Senator Wicker. Well, thank you. Briefly, then, Mr.
Chairman, thanks for holding the hearing.
And welcome to the Commissioners. Appreciate your being
here. And I appreciate the opportunity to discuss not only the
wide array of issues before you but also ways that Congress can
work in conjunction with the Commission to ensure that quality
broadband access is delivered to all corners of our nation,
particularly rural areas like my home state of Mississippi and
the Chair's home state of West Virginia.
To achieve this goal, I believe we must ensure that there
is a level playing field for all broadband providers. We must
seriously examine the need to modernize our nation's
telecommunication laws, particularly in the ultra-competitive
video marketplace, to create a landscape that will foster the
flexibility necessary to provide the best service and most
competitive rates to consumers, thereby maximizing broadband
adoption.
As we continue to work our way out of the still-ailing
economy, it is imperative that we focus on one of the few
sectors of the economy that has grown: the telecommunications,
media, and technology industries. With its virtual on-ramps to
unlimited information and boundless potential as a tool for
business, for education, health care, and others, broadband is
providing the seeds of economic development for the 21st
century workforce.
It is the responsibility of Congress and of the Commission
to help foster continued growth and innovation. I look forward
to the hearing today on how we might best achieve this goal.
And I look forward to working with all the members of this
committee in my new role as Ranking Member of the
Communications Subcommittee. I am committed to working with my
colleagues, including Senator Pryor, my Chair, to help ensure
that our Committee fully exercises its oversight, shines much-
needed light on these important issues, and that our panel is
fully engaged in helping with our broadband and with economic
growth.
So thank you, Mr. Chairman.
The Chairman. Thank you, Senator Wicker.
And now, Commissioner McDowell. And the Chairman has
already given his testimony, and I obviously apologize to you
particularly for that.
And Clyburn, Jessica, and Ajit, as it says here, evidently
aren't giving testimony. I am really disappointed, but I have
to go with what the boss says.
STATEMENT OF HON. ROBERT M. McDOWELL, COMMISSIONER,
FEDERAL COMMUNICATIONS COMMISSION; ACCOMPANIED BY
HON. MIGNON L. CLYBURN, COMMISSIONER,
FEDERAL COMMUNICATIONS COMMISSION;
HON. JESSICA ROSENWORCEL, COMMISSIONER,
FEDERAL COMMUNICATIONS COMMISSION;
AND HON. AJIT PAI, COMMISSIONER,
FEDERAL COMMUNICATIONS COMMISSION
Mr. McDowell. Thank you, Mr. Chairman. And thank you for
having us before you again today. And, Ranking Member Thune and
Ranking Member of the Subcommittee Wicker, congratulations on
your ranking memberships. And, also, it is a delight to be in
front of the new members as well as the veterans of this
committee, as well.
I am hopeful that this year the FCC adopts some sensible
policies in many areas but especially when it comes to
implementing Congress' incentive auction law. My written
testimony covers a great deal of other important topics, but I
would like to use my opening statement time to emphasize my
serious concerns regarding increased international regulation
of the Internet.
Ladies and gentlemen, we are losing the fight for Internet
freedom. The Internet is no longer at a crossroads with freedom
and prosperity down one avenue and command-and-control
government domination down the other. The course of the
Internet's fate was dramatically altered for the worse during a
treaty negotiation in Dubai last December. As a result, this
freedom-enhancing and borderless network of networks, the
greatest deregulatory success story of all time, is quickly
being absorbed into an intergovernmental structure that uses
centralized, top-down chokepoints that employ the power of
international law. Unless defenders of Internet freedom and
prosperity act quickly, this tragic trajectory will become
irreversible.
My testimony on this important matter can be summed up in
four main points. First, last year's World Conference on
International Telecommunications, known as the WCIT,
dramatically ended the era of international consensus to keep
intergovernmental hands off of the Internet. Second, defenders
of Internet freedom must act quickly to turn the threat of
increased intergovernmental control of the Internet into an
opportunity to reverse course. Third, we must offer other
nations, especially those in the developing world that feel
disenfranchised from Internet governance processes, an
alternative to international regulation by improving and
enhancing the multistakeholder process, especially entities
such as the Internet Governance Forum, or IGF. And, finally,
Congress can and should continue to play a constructive role by
amplifying the call for more Internet freedom.
For many years, the global consensus regarding Internet
policy centered on market-opening liberalization and
competition in lieu of government regulation. That consensus
started to unravel several years ago, however. In 2011, for
example, then Russian Prime Minister Vladimir Putin plainly
stated that it was his goal and that of his allies to
establish, quote, ``international control over the Internet,''
end quote, through the ITU. Last December, in Dubai, they
succeeded in establishing an insidious foothold in their
patient and incremental quest to control the operations,
content, and economics of the Net.
We allowed this to happen even though we were explicitly
forewarned. Hindsight allows us to see with great clarify that
not only were defenders of Internet freedom too slow to take
these efforts seriously but they all too easily fell victim to
a disciplined campaign of deception, as well.
For instance, before the WCIT, ITU leadership made three
key promises. Number one, no votes would be taken at the WCIT.
Number two, a new treaty would be adopted only through
unanimous consensus. And, number three, any new treaty would
not touch the Internet. All three promises were promptly broken
in Dubai through near-perfect Orwellian cynicism, all in the
name of making the Internet more democratic.
ITU leadership and pro-regulation member states succeeding
in co-opting arguments for preserving a freedom-enhancing,
flat, bottom-up, and multistakeholder-driven Internet
governance structure while turning the logic of these arguments
on its head to justify their power grab.
Hopefully it is obvious that we must act quickly. Internet
freedom's foes around the globe are working hard to exploit a
new treaty negotiation that is far larger in significance than
the WCIT. In 2014, the ITU will convene in Korea to conduct
what is literally a constitutional convention which will define
the ITU's mission for years to come.
This scenario poses both a threat and an opportunity for
Internet freedom. The threat is obvious: more international
regulation of the Internet. We have an opportunity, however, to
change the debate by finding arguments that are more compelling
to the developing world.
We can start by reminding member states of the incredible
benefits brought forth by open markets, liberalization, and
competition--benefits such as investment, innovation, universal
connectivity, and global prosperity.
Furthermore, we have an opportunity to improve the current
multistakeholder structure to include more meaningful
participation by developing-world nations. A disproportionate
amount of aspiring nations feel left out of the decisionmaking,
and such perceived disenfranchisement has fueled the drive to
expand the legal authority of the ITU. The best avenues to
amplify the voice of the developing world would be through
strengthening participation in and funding of the Internet
Governance Forum. It is the ultimate flat, democratic, and
bottom-up multistakeholder group.
In conclusion, Congress can and should speak loudly to
support policies that promote Internet freedom and global
prosperity. As we dine on our Thanksgiving dinners in 2014, let
us not look back on today and lament how we did not do enough.
We have but one chance. Let us be resolute and tell the world
that all nations will benefit if we stand strong together for
Internet freedom.
Thank you for having me before you today, and I look
forward to your questions.
[The prepared statements of Mr. McDowell, Ms. Clyburn, Ms.
Rosenworcel, and Mr. Pai follow:]
Prepared Statement of Hon. Robert M. McDowell, Commissioner,
Federal Communications Commission
Introduction
Thank you, Chairman Rockefeller, Ranking Member Thune and Members
of the Committee for inviting me to join you today. It has been an
honor working with you over the years, and I am pleased to be back
before you. As always, I look forward to answering any questions you
may have.
Although the bulk of my testimony focuses on my serious concerns
regarding increased international regulation of the Internet, I am
hopeful that the Federal Communications Commission adopts some sensible
policies in other areas this year.
Today's Policy Priorities
I. The FCC Should Adopt Pragmatic Policies for the Upcoming Incentive
Auction
The most important priority for the Commission this year is to
implement the congressionally-mandated incentive auction. We should do
so by:
Ensuring that the rulemaking and incentive auction processes
are transparent and the final rules are intuitive so that all
stakeholders--no matter their technology preference or size--
have a meaningful opportunity to understand and participate;
Avoiding imposing anything that functions as a spectrum cap;
Refraining, for now, from reserving airwaves to create a
``nationwide unlicensed spectrum band'' within the new 600 MHz
Band;
Pragmatically balancing the tension between flexible-use
spectrum policies and adequate interference protections to
account for the technological improvements that will
undoubtedly develop while the proceeding is underway and after
the rules are implemented; and
Steering clear of encumbrances that scare away bidders and
lead directly to unintended harmful consequences.
II. The Executive Branch Must Liberate More Spectrum for Exclusive Use
Licenses Awarded Through Auctions
In addition to creating a constructive environment for an incentive
auction, the Executive Branch must do more to liberate spectrum
occupied by the Federal Government and send it to auction for exclusive
use licenses. The Federal Government occupies a majority of the most
useful spectrum. Without a doubt, much of it is used for important
purposes such as national defense, air traffic control and law
enforcement. But does anyone believe that all Federal spectrum is being
used efficiently? We don't have clear answers to these questions
because the current structure is opaque and discourages the government
from relinquishing spectrum. Ill-defined policies to promote spectrum
``sharing'' in lieu of auctions for exclusive use licenses are
insufficient to meet America's spectrum needs. This scenario must be
rectified or the U.S. wireless industry risks losing the global lead in
wireless it has always enjoyed.
III. The FCC Should Modernize America's Obsolete Media Ownership Rules
As is required by Section 202(h) of the Communications Act, the FCC
must modernize its media ownership rules to reflect the current
economic realities of the marketplace and eliminate any and all
unnecessary mandates.\1\ Not only should the Commission look to
deregulate the traditional media sector in the face of competition from
new media, it should avoid adding new and unnecessary rules. For
example, due to today's competitive media landscape, the Commission
should resist proposals that would restrict broadcasters from entering
into some forms of contracts, such as joint sales, shared service and
local news service agreements, that could provide efficiencies
ultimately benefiting consumers. Unfortunately, new draft rules in this
regard are pending before the Commission. If adopted, they would reduce
the amount of news and information available to smaller communities.
---------------------------------------------------------------------------
\1\ Section 202(h) of the Telecommunications Act of 1996 states
that:
The Commission shall review its rules adopted pursuant to this
section and all of its ownership rules quadrennially . . . and shall
determine whether any of such rules are necessary in the public
interest as the result of competition. The Commission shall repeal or
modify any regulation it determines to be no longer in the public
interest.
Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56,
111-12 Sec. 202(h) (1996); Consolidated Appropriations Act, 2004, Pub.
L. No. 108-199, Sec. 629, 118 Stat. 3, 99-100 (2004) (amending Section
202(h) of the 1996 Act). I concurred in the December 2011 notice of
proposed rulemaking, because the Commission appears to be prepared to
accept a regulatory status quo while I think major changes are
necessary and required by Section 202(h).
---------------------------------------------------------------------------
Additionally, evidence continues to mount that the 1975 newspaper-
broadcast cross-ownership ban should be largely eliminated. Although
the Commission proposed a relaxation of the ban on newspaper-television
ownership for the largest markets and considered eliminating
restrictions on newspaper-radio combinations, these proposals are
anemic and do not reflect marketplace realities. Over the past decade,
broadcast stations and daily newspapers have grappled with falling
audience and circulation numbers, diminishing advertising revenues and
resulting staff reductions,\2\ as online sources gain in popularity.\3\
This trend has led many prominent daily newspapers to declare
bankruptcy or go out of business altogether. Over the past five years,
an average of 15 daily papers, or about one percent of the industry,
have shuttered their doors each year.\4\ The newspaper-broadcast cross-
ownership ban could be exacerbating this situation, according to
evidence compiled in the FCC's record over the years.\5\ Not only is
such a rule unnecessary, it appears to be harming the public interest.
Keeping the ban on the FCC's rulebooks is contrary to Congress's
mandate under section 202(h).
---------------------------------------------------------------------------
\2\ Although some sectors of the news industry have experienced a
slight resurgence, newspapers continue to face decline with both
advertising and circulation revenues continuing on a downward path. In
2011, network and local news viewership increased for the first time in
years; however, local TV station advertising revenues still experienced
a decline. See Pew Research Ctr's Project for Excellence in Journalism,
The State of the News Media 2012, Key Findings, http://
stateofthemedia.org/2012/overview-4/key-findings/ (last visited March
8, 2013) (``The State of the News Media 2012''); The State of the News
Media 2012, Local TV, http://stateofthemedia.org/2012/overview-4/key-
findings/ (explaining that some of this loss is due to a reduction of
political and automotive advertising from 2010 and that these revenues
will rebound during a busy election cycle).
\3\ In fact, the White House's Council of Economic Advisors has
found that newspapers are one of America's fastest-shrinking industries
losing approximately 28.4 percent of its workforce between 2007 and
2011. Online publishing job growth, on the other hand, increased by
more that 20 percent in the same time period. See, e.g., Economic
Report of the President Together with The Annual Report of the Council
of Economic Advisors 188 (February 2012) (citing a LinkedIn study),
available at http://www.whitehouse.gov/sites/default/files/docs/erp
_2012_complete.pdf; Matt Rosoff, Newspapers Are The Fastest Shrinking
Industry In The U.S., Business Insider (Mar. 8, 2012), http://
articles.businessinsider.com/2012-03-08/tech/31135175_1_linkedin-job-
growth-newspapers#ixzz1us0z9Urf.
\4\ The State of the News Media 2012, Major Trends, http://
stateofthemedia.org/2012/overview-4/major-trends/.
\5\ See, e.g., Comments of the Newspaper Association of America,
2010 Quadrennial Review--Review of the Commission's Broadcast Ownership
Rules and Other Rules Adopted Pursuant to Section 202 of the
Telecommunications Act of 1996, MB Docket No. 09-182 (Mar. 5, 2012);
Comments of A.H. Belo Corporation, 2010 Quadrennial Review--Review of
the Commission's Broadcast Ownership Rules and Other Rules Adopted
Pursuant to Section 202 of the Telecommunications Act of 1996, MB
Docket No. 09-182 (Mar. 5, 2012); Joint Comments of Bonneville
International Corporation and the Scranton Times, L.P., 2010
Quadrennial Review--Review of the Commission's Broadcast Ownership
Rules and Other Rules Adopted Pursuant to Section 202 of the
Telecommunications Act of 1996, MB Docket No. 09-182 (Mar. 5, 2012);
Comments of Cox Media Group, 2010 Quadrennial Review--Review of the
Commission's Broadcast Ownership Rules and Other Rules Adopted Pursuant
to Section 202 of the Telecommunications Act of 1996, MB Docket No. 09-
182 (Mar. 5, 2012); Comments of Tribune Company, Debtor-in-Possession,
2010 Quadrennial Review--Review of the Commission's Broadcast Ownership
Rules and Other Rules Adopted Pursuant to Section 202 of the
Telecommunications Act of 1996, MB Docket No. 09-182 (Mar. 5, 2012).
---------------------------------------------------------------------------
The Commission recently indicated that it would accept new evidence
for the record to help determine whether cross-ownership has a harmful
effect on diversity.\6\ Once that review is complete, along with proper
public comment, we should waste no time in completing this proceeding,
which is nearly three years overdue.
---------------------------------------------------------------------------
\6\ Statement from FCC Chairman Julius Genachowski on the Status of
the Media Ownership Proceeding, News Release (Feb. 26, 2013), http://
transition.fcc.gov/Daily_Releases/Daily
_Business/2013/db0226/DOC-319131A1.pdf.
---------------------------------------------------------------------------
IV. The FCC Should Repeal Outdated Analog Regulations in The New IP
World
The Commission should prioritize its reform efforts to focus on the
market's transition from telecom networks that were built for analog
voice services to state-of-the-art data networks that convey an
infinite slurry of ones and zeros (the ``IP transition''). Comments
filed at the FCC indicate that within at least the 22 states where AT&T
operates, for instance, 70 percent of the residential customers with
access to plain old telephone service over aging copper networks are
projected to have chosen a competitive alternative by the end of
2012.\7\ As in so many cases, while our statute and rules stay firmly
rooted in the 20th century, the market is whizzing past us. We are
overdue for a fresh look at how our laws may be hindering--rather than
helping--such market evolutions. At a minimum, we could learn a great
deal from sensibly structured test bed programs.
---------------------------------------------------------------------------
\7\ See Comments of AT&T, In the Matter of Connect America Fund, WC
Docket No. 10-90 (Feb. 24, 2012).
---------------------------------------------------------------------------
Protecting Internet Freedom
Ladies and gentlemen, we are losing the fight for Internet freedom.
Any doubts about this proposition should now be dispelled. The Internet
is no longer at a crossroads--with freedom and prosperity down one
avenue, and command and control government domination down the other.
The course of the Internet's fate was dramatically altered for the
worse during a treaty negotiation in Dubai last December. As a result,
this freedom-enhancing and borderless network of networks--the greatest
deregulatory success story of all time--is quickly being absorbed into
an intergovernmental structure that uses centralized, top-down choke
points. Unless defenders of Internet freedom and prosperity act
quickly, boldly and imaginatively, this tragic trajectory will become
irreversible.
My testimony on this important matter can be summed up in four main
points:
(1) Last year's World Conference on International Telecommunications
(``WCIT'') dramatically ended the era of international
consensus to keep intergovernmental hands off of the Internet;
(2) Defenders of Internet freedom must act quickly to turn the
threat of increased intergovernmental control of the Internet
into an opportunity to reverse course through liberalization of
markets that will spark competition, investment and innovation;
(3) We must offer other nations, especially those in the developing
world that feel disenfranchised from Internet governance
processes, an alternative to international regulation by
improving and enhancing multi-stakeholder entities, such as the
Internet Governance Forum (``IGF''); and
(4) Congress can and should continue to play a constructive role by
amplifying the call for more Internet freedom.
I. Last year's WCIT dramatically ended the era of international
consensus to keep intergovernmental hands off of the Internet.
Since becoming commercialized in the mid 1990s, the Internet
migrated further away from governmental control. As a result of
deregulation, the number of people using the Net world-wide grew from a
mere 16 million in 1995 to over 2.4 billion today.\8\ Net access,
especially through increasingly powerful and affordable mobile devices,
is improving the human condition more quickly and fundamentally than
any other technology in history. Nowhere is this phenomenon more
apparent than in the developing world where unfettered Internet
technologies are expanding economies and raising living standards.
These innovations also empower individuals with information that they
have never had before, thus threatening authoritarian regimes that rule
closed societies. As a result, these regimes, and their client states,
have been pushing for more international Internet regulation in lieu of
the non-governmental ``multi-stakeholder'' model for Internet
governance. At a minimum, a new international regulatory overlay
provides authoritarian governments political ``cover'' and
international legal ``legitimacy'' for restricting Internet
communications in their own countries.
---------------------------------------------------------------------------
\8\ Internet Growth Statistics, Internet World Stats, http://
www.internetworldstats.com/emarketing.htm (last visited March 7, 2013).
---------------------------------------------------------------------------
For many years, the global consensus regarding Internet policy
centered on market opening liberalization and competition. Internet
governance was left to non-governmental private sector groups that not
only have a perfect track record of keeping the Internet open and
working, but helping it thrive as well. This hands-off approach is what
has produced tremendous investment and innovation that has made the
Internet ecosystem flourish.
Starting a few years ago, however, countries such as Russia, China,
Saudi Arabia and others diligently and patiently worked to change that
structure incrementally. Among their many proposals were draft rules
that would have the force and effect of international law calling for:
Changing basic definitions contained in treaty text so the
International Telecommunication Union (``ITU'') would have
unrestricted jurisdiction over the Internet;\9\
---------------------------------------------------------------------------
\9\ See, e.g., Arab States Common Proposals for the Work of the
Conference, Algeria (People's Democratic Republic of), Bahrain (Kingdom
of), Comoros (Union of the), Djibouti (Republic of), Egypt (Arab
Republic of), Iraq (Republic of), Jordan (Hashemite Kingdom of), Kuwait
(State of), Lebanon, Libya, Mauritania (Islamic Republic of), Morocco
(Kingdom of), Oman (Sultanate of), Qatar (State of), Saudi Arabia
(Kingdom of), Somali (Democratic Republic of), Sudan (Republic of the),
Tunisia, United Arab Emirates and Yemen (Republic of), Contribution 7,
at Art. 2 (Oct. 24, 2012), http://www.itu.int/md/S12-WCIT12-C-0007/en
(``Arab States Contribution 7''); African Common Proposals for the Work
of the Conference, African Telecommunication Union Administrations,
Contribution 19, at Art. 2 (Nov. 2, 2012), http://www.itu.int/md/S12-
WCIT12-C-0019/en (``Africa Contribution 19''); Proposals for the Work
of the Conference, India (Republic of), Contribution 21, at Art. 2
(Nov. 3, 2012), http://www.itu.int/md/S12-WCIT12-C-0021/en (``India
Contribution 21''); Proposals for the Work of the Conference, Russian
Federation, Contribution 27, at Art. 2 (Nov. 17, 2012), http://
www.itu.int/md/S12-WCIT12-C-0027/en (``Russia Contribution 27'');
Proposals for the Work of the Conference, Algeria, Saudi Arabia,
Bahrain, China, United Arab Emirates, Russian Federation, Iraq, Sudan,
Contribution 47, at Art. 2 (Dec. 11, 2012), http://www.itu.int/md/S12-
WCIT12-C-0047/en (``Algeria, Saudi Arabia, Bahrain, China, United Arab
Emirates, Russian Federation, Iraq, Sudan Contribution 47'').
Allowing foreign phone companies to charge global content
and application providers internationally mandated fees
(ultimately to be paid by all Internet consumers) with the goal
of generating revenue for foreign government treasuries;\10\
---------------------------------------------------------------------------
\10\ See, e.g., Arab States Contribution 7 at Arts. 6.0.5, 6.0.6;
Africa Contribution 19 at Arts. 6.0.1-6.0.6; Algeria, Saudi Arabia,
Bahrain, China, United Arab Emirates, Russian Federation, Iraq, Sudan
Contribution 47 at Arts. 6.0.3, 6.0.4; Revisions of the International
Telecommunications Regulations--Proposals for High Level Principles to
be Introduced in the ITRs, ETNO, CWG-WCIT12 Contribution 109, at 2
(June 7, 2012), http://www.itu.int/md/T09-CWG
.WCIT12-C-0109/en.
Subjecting cyber security and data privacy to international
control, including the creation of an international
``registry'' of Internet addresses that could track every
Internet-connected device in the world;\11\
---------------------------------------------------------------------------
\11\ See, e.g., Letter dated 12 September 2011 from the Permanent
Representatives of China, the Russian Federation, Tajikistan, and
Uzbekistan to the United Nations addressed to the Secretary-General,
Item 93 of the provisional agenda--Developments in the field of
information and telecommunications in the context of international
security, 66th Session of the United Nations General Assembly, Annex
(Sep. 14, 2011), http://www.cs.brown.edu/courses/csci1800/sources/
2012_UN_Russia_and_China_Code_o_Conduct.pdf (last visited March 8,
2013); Arab States Contribution 7 at Art. 5A; Proposals for the Work of
the Conference, Cameroon (Republic of), Contribution 15, at Art. 5A
(Oct. 2, 2012), http://www.itu.int/md/S12-WCIT12-C-0015/en (``Cameroon
Contribution 15''); Africa Contribution 19 at Art. 5A; India
Contribution 21 at Art. 5A; Common Proposals for the Work of the
Conference, ITU Member States, Members of the Regional Commonwealth in
the Field of Communications (RCC), Contribution 14, at Art. 5A (Oct. 1,
2012), http://www.itu.int/md/S12-WCIT12-C-0014/en (``RCC Contribution
14''); Algeria, Saudi Arabia, Bahrain, China, United Arab Emirates,
Russian Federation, Iraq, Sudan Contribution 47 at Art. 3C.
Imposing unprecedented economic regulations of rates, terms
and conditions for currently unregulated Internet traffic
swapping agreements known as ``peering;'' \12\
---------------------------------------------------------------------------
\12\ See, e.g., Arab States Contribution 7 at Art. 6.0.4; India
Contribution 21 at Art. 6.0.4; Internet Society Background Paper,
International Telecommunications Regulations, available at http://
www.internetsociety.org/sites/default/files/
Internet%20Society%20Background%20Paper-
%20International%20Telecommunication%20Regulations%281%29.pdf (last
visited March 8, 2013).
Establishing ITU dominion over important non-profit, private
sector, multi-stakeholder functions, such as administering
domain names like the .org and .com Web addresses of the
world;\13\
---------------------------------------------------------------------------
\13\ See, e.g., Arab States Contribution 7 at Art. 3.5; Russia
Contribution 27 at Art. 3A.2; Algeria, Saudi Arabia, Bahrain,China,
United Arab Emirates, Russian Federation, Iraq, Sudan Contribution 47
at Art. 3B.
Subsuming into the ITU the functions of multi-stakeholder
Internet engineering groups that set technical standards to
allow the Net to work;\14\
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\14\ See, e.g., Africa Contribution 19 at Art. 3.4A; Russia
Contribution 27 at Art. 3A; Algeria, Saudi Arabia, Bahrain,China,
United Arab Emirates, Russian Federation, Iraq, Sudan Contribution 47
at Arts. 1.6, 3.1, 4.2, 4.3.
Centralizing under international regulation Internet content
under the guise of controlling ``congestion,'' or other false
pretexts; and many more.\15\
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\15\ See, e.g., Arab States Contribution 7 at Art. 5A; Africa
Contribution 19 at Art. 5B. Some member states also called for
requiring network operators to disclose to the government
identification information about every communication carried over their
networks or to give the governments control of the routing of those
communications. Arab States Contribution 7 at Arts.3.3, 3.6; Africa
Contribution 19 at Arts. 3.3, 3.4B; RCC Contribution 14 at Art. 3.3;
Algeria, Saudi Arabia, Bahrain, China, United Arab Emirates, Russian
Federation, Iraq, Sudan Contribution 47 at Arts. 3.3, 3B.3; Cameroon
Contribution 15 at Art. 3.6.
In fact, then-Russian Prime Minister Vladimir Putin plainly stated
in 2011 that it was his goal, and that of his allies, to establish
``international control over the Internet'' through the ITU.\16\ Last
December in Dubai, they succeeded in establishing an insidious foothold
in their patient and incremental quest to ``control'' the operations,
content and economics of the Net. In short, Mr. Putin largely achieved
the first stage of his goal. We allowed this to happen even though we
were explicitly forewarned.
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\16\ Prime Minister Vladimir Putin meets with Secretary General of
the International Telecommunication Union HamadounToure, Gov't of the
Russian Fed'n, http://government.ru/eng/docs/15601/print/ (last visited
March 8, 2013) (``The International Telecommunication Union is one of
the oldest international organisations; it's twice as old as the United
Nations. Russia was one of its co-founders and intends to be an active
member. We are thankful to you for the ideas that you have proposed for
discussion. One of them is establishing international control over the
Internet using the monitoring and supervisory capabilities of the
International Telecommunication Union (ITU). If we are going to talk
about the democratisation of international relations, I think a
critical sphere is information exchange and global control over such
exchange. This is certainly a priority on the international agenda.'').
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Hindsight allows us to see with great clarity that not only were
defenders of Internet freedom too slow to take these efforts seriously,
but they all too easily fell victim to a disciplined campaign of
deception. For instance, before the WCIT, ITU leadership made three key
promises:
(1) No votes would be taken at the WCIT;
(2) A new treaty would be adopted only through ``unanimous
consensus;'' and
(3) Any new treaty would not touch the Internet.\17\
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\17\ WCIT-12: Clarification Needed During Open Letter Session,
ITUBLOG (Nov. 15, 2012), http://itu4u.wordpress.com/2012/11/15/wcit-12-
clarification-needed-during-open-letter-season/ (last visited March 8,
2013) (``Internet Control is simply not in the ITU mandate and ITU will
continue to fully support the multistakeholder approach which it
initiated some ten years ago for the World Summit of the Information
Society.''); Hamadoun I. Toure, U.N. We Seek to Bring Internet to All,
Wired.com (Nov. 7, 2012), http://www.wired.com/opinion/2012/11/head-of-
itu-un-should-internet-regulation-effort/ (last visited March 8, 2013)
(stating ``[n]o proposal will be accepted if it is not agreed upon by
all participants through consensus.''); Hamadoun I. Toure, Global Media
Briefing on WCIT, ITU (June 22, 2012), http://www.itu.int/en/osg/
speeches/Pages/2012-06-22.aspx (last visited March 8, 2013) (``We all
know that, in the true tradition of the ITU, we will not vote on any
issues- just like in January, at the World Radiocommunication
Conference, where in four weeks we did not vote once, but came to
consensus on every issue.''); Speech by ITU Secretary-General Toure,
The Challenges of Extending the Benefits of Mobile, ITU (May 1, 2012),
http://www.itu.int/en/osg/speeches/Pages/2012-05-01.aspx (last visited
March 8, 2013) (``You will, I am sure, have seen and read various media
articles talking about the UN or the ITU trying to take over the
Internet. Let me say quite plainly and clearly: This is simply
ridiculous.''); David McAuley, WCIT `Internet Governance' Hype
Distracts Attention From Serious Issues, ITU Head Says, Bloomberg,
Sept. 11, 2012, http://www.bna.com/itus-toure-wcit-b17179869586/ (last
visited March 8, 2013) (quoting ITU Secretary-General Toure that WCIT
``has nothing to do with [Internet] Governance.'').
All three promises were promptly broken \18\ in Dubai in the name
of making the Internet more ``democratic'' through near-perfect
Orwellian cynicism. ITU leadership and pro-regulation member states
succeeded in co-opting arguments for preserving a freedom-enhancing,
flat and multi-stakeholder driven Internet governance structure while
turning the logic of these arguments on its head to justify their
egregious power grab.\19\
---------------------------------------------------------------------------
\18\ Remarks by Assistant Secretary Strickling at the PLI/FCBA
Telecommunications Policy & Regulation Institute (Dec. 14, 2012),
http://www.ntia.doc.gov/Remarks_by_Assistant
_Secretary_Strickling_at_PLI/FCBA (last visited March 8, 2013) (``The
International Telecommunication Union had made two important promises
in advance of the conference. First, that it would operate by consensus
and second, that Internet issues would not be appropriate for inclusion
in the ITRs. As it turned out, the ITU could not deliver on either of
these promises. When around 40 percent of the participating countries
do not sign the final documents of the conference, it is obvious that
the ITU did not achieve the consensus it had promised.'').
\19\ Notably, at the end of the WCIT, a ``resolution to foster the
greater growth of the Internet'' was adopted ``resolving to instruct
the Secretary-General to continue to take necessary steps for ITU to
play an active and constructive role'' in Internet governance. This
will serve to broaden the scope of the ITU's rules to include the
Internet, undermining the highly successful, multi-stakeholder model of
Internet governance, therefore stunting its growth, not fostering it.
---------------------------------------------------------------------------
At the end of the negotiation, 89 countries had signed on to the
new treaty language, 55 did not sign and 49 did not attend the WCIT.
The ``vote count'' did not end last December, however. Member states
have until 2015 to sign the treaty and many more are expected to do so.
Among those at risk of signing are otherwise close allies, such as many
European nations. If we do not act quickly, the number of signatories
to the treaty will increase rapidly.
In short, the U.S. experienced a rude awakening regarding the stark
reality of the situation: when push comes to shove, even countries that
purport to cherish Internet freedom are willing to succumb to the
clever and deceptive tactics of regulatory incrementalists. Our
experience in Dubai is a chilling foreshadow of how international
Internet regulation could grow insidiously and at an accelerating pace.
Specifically, the explicit terms of the new treaty language give
the ITU policing powers over ``SPAM,'' and attempt to legitimize under
international law foreign government inspections of the content of
Internet communications to assess whether they should be censored by
governments under flagrantly transparent pretexts such as ``network
congestion.'' \20\ The bottom line, however, is that the ITU has now
claimed jurisdiction over the Internet's operations and content.
---------------------------------------------------------------------------
\20\ International Telecommunication Union, Final Acts: World
Conference on International Telecommunications, at Art.5B (Dubai 2012)
(``Final Acts''). The new ITRs provide signing nations with a greater
ability to regulate the blocking of ``SPAM,'' opening the door to the
regulation of content on the Internet, including possible blockage of
political dissent or other forms of protected speech under the First
Amendment of the U.S. Constitution. See id.
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More fundamentally, pro-regulation forces succeeded in upending
decades of consensus that maintained that Internet service providers,
as well as Internet content and application providers, should be
insulated from intergovernmental control. They accomplished this feat
with simple changes in the definitions of crucial treaty terms.\21\
Their audacity doesn't stop there, however. Many countries, in addition
to the ITU itself,\22\ brazenly argued that the old treaty text from
1988 gave the ITU broad jurisdiction over the Internet.\23\
---------------------------------------------------------------------------
\21\ Final Acts at Art.1 abis). For example, an early disagreement
at the WCIT over the reach of the international treaty's application
resulted in a vague, undefined new term that could have far-reaching
consequences. Prior to the WCIT, the ITRs applied only to ``Recognized
Operating Agencies'' (ROAs), or telecommunications operators in each
country. During the WCIT, some countries sought to change the term to
``Operating Agencies,'' expanding the ITRs applicability. This debate
was resolved by the adoption of ``Authorized Operating Agencies''
(AOA), undefined in the ITU Constitution. At present there is no
definitive interpretation of which entities this provision applies to,
likely precipitating disputes between member states regarding which
entities specifically qualify as AOAs. Most assuredly, however, given
current trends, key member states will push aggressively for
definitions that are as expansive as possible.
\22\ The ITU can serve as a useful and constructive forum for the
resolution of many important international communications policy
matters, such as harmonization of spectrum and the allocation of
satellite orbital slots. In contexts such as these, reaching
international consensus through the ITU can produce positive outcomes.
The danger, however, lies with unwarranted ITU ``mission creep'' into
new spheres, such as the complex ecosystems of the Internet.
Replicating the ITU's antiquated telecommunications regulations for
modern digital communications technologies and services that do not
operate like, or in any way resemble, traditional telecom services
would be highly counterproductive. Although maintaining strong U.S.
involvement in the pre-WCIT-12 ITU mission is vital, on a going forward
basis, we should reassess America's support for new ITU actions we find
harmful to freedom, prosperity, our national interest, and the well-
being of all nations, but especially the developing world.
\23\ Speech by ITU Secretary-General Toure, WCIT-12--Myths and
Reality (Sept. 24, 2012), http://www.itu.int/en/osg/speeches/Pages/
2012-09-24.aspx (stating that ``ITU's day-to-day activities [ ] are
already fundamental to promoting Internet growth.''); WCIT-12 Myth
Busting Presentation, ITU, Slides 24, 25, http://www.itu.int/en/wcit-
12/Pages/WCIT-background
briefs.aspx (last visited March 8, 2013) (stating that ``[m]any
consider that [the ITU definition of telecommunications] includes
communications via the Internet, which runs on telecom infrastructure''
and that it is an incorrect ``myth'' that the ``ITU's scope does not
include the Internet'' and that ``WCIT is about the ITU or the UN
extending their mandate so as to control the Internet.'').
---------------------------------------------------------------------------
If these aggressive regulatory expansionists are willing to conjure
ITU authority where clearly none existed before, their imaginations
will see no limits to the ITU's authority over the Internet's affairs
under the new treaty language. Their appetite for multilateral
regulatory expansionism is insatiable as they envision the omniscience
of intergovernmental regulators able to replace the billions of daily
decisions that allow the Internet to blossom and transform the human
condition.
At the same time, worldwide consumer demand is driving
technological convergence. As a result, companies such as Verizon,
Google, AT&T, Amazon, Microsoft, Netflix, and many more lesser-known
enterprises in the U.S. and in other countries, are building across
borders thousands of miles of fiber optics to connect sophisticated
servers and routers that bring voice, video and data services more
quickly to consumers tucked into every corner of the globe. From an
engineering perspective, the technical architecture and service
offerings of these companies look the same. Despite this wonderful
convergence, an international movement is growing to foist 19th Century
regulations designed for railroads, telegraphs and analog voice phone
monopolies onto new market players that are fundamentally different
from the monoliths of yore.
To be blunt, these dynamic new wonders of the early 21st Century
are perilously close to being smothered by innovation-crushing old
rules designed for far different technologies which operated in a much
less competitive market long ago. The practical effect of expanded
rules would be to politicize engineering and business decisions inside
sclerotic intergovernmental bureaucracies. As a technical matter, a
centralized, top-down ``management'' model for the Internet defies its
flat and democratic architecture and would cause a global engineering
nightmare. For example, how would a partitioned Internet work? How
would entrepreneurs be able to build and operate new cross-border
technologies such as cloud computing?
More importantly, the effect of a stunted Internet ecosystem
impaired by a new international regulatory overlay could be devastating
to efforts to improve the human condition across the globe. If these
trends continue, Internet growth would be most severely impaired in the
developing world where Web-connected mobile devices and their
applications enable worried parents to locate medicine for their sick
children, villagers to find drinkable water and farmers to learn
prevailing market prices for their crops.\24\ Even in the U.S.,
brilliant and daring technologists who are working to transform the
world could be forced to seek bureaucratic permission to innovate and
invest. At a minimum, this scenario would create tremendous uncertainty
while driving up costs ultimately borne by all Net consumers.\25\
---------------------------------------------------------------------------
\24\ See, e.g., Ken Banks, In African Agriculture, Information is
Power, Nat'l Geographic (Sept. 5, 2011), http://
newswatch.nationalgeographic.com/2011/09/05/in-african-agriculture-
information-is-power/.
\25\ A recent news article summed up the chaotic effects of a
partitioned Internet. Note the Russian official's call for the U.S. to
agree to international regulation of the Net to avoid fragmentation--a
clever and cynical maneuver to turn arguments against Net regulation on
their head.
The U.N. has no power to force the United States to adopt any
Internet regulation, and the U.S. refused to sign the December treaty,
along with 55 others countries. But if a large number of countries
agree on regulations, the Internet could become fragmented, with very
different rules applying in different regions of the world. ``That
becomes an engineering nightmare,'' McDowell said. Russia has pushed
hardest for international Internet regulation. ``In the future we could
come to a fragmented Internet,'' warned Andrey Mukhanov, one of
Russia's representatives to the U.N. conference, as the U.S. and many
European countries declined to sign the treaty in December.
``[Fragmenting] would be negative for all, and I hope our American and
European colleagues come to a constructive position.'' But by a
``constructive position,'' Mukhanov means one with international web
regulation. . . . Technology groups and companies like Google say that
the regulations, while they often seem nice on the surface, give
government the power to censor content.
Maxim Lott, Internet Still Under Attack by UN, FCC Commissioner
Says, FoxNews.com (Feb. 13, 2013).
---------------------------------------------------------------------------
In sum, the dramatic encroachments on Internet freedom secured in
Dubai will serve as a stepping stone to more intergovernmental
regulation of the Internet in the very near future. The end result will
be devastating to global prosperity and freedom.
II. Defenders of Internet freedom must act quickly to turn the threat
of increased intergovernmental control of the Internet into an
opportunity to reverse course through liberalization of markets
that will spark competition, investment and innovation.
We must act quickly. While we debate what to do next, Internet
freedom's foes around the globe are working hard to exploit a treaty
negotiation that is far larger in significance than the WCIT. In 2014,
the ITU will convene in Busan, Korea and conduct what is literally a
constitutional convention, called a ``plenipotentiary'' meeting, which
will define the ITU's mission for years to come. Member states will
rewrite the ITU constitution and elect a new Secretary General. This
scenario poses both a threat and an opportunity for Internet freedom.
The threat is obvious: more international Internet regulation. We have
an opportunity, however, to change the debate by finding arguments that
are more compelling to the developing world. We can start by reminding
member states of the incredible benefits brought forth by policies that
promote open markets through liberalization and competition. These are
the paths that have proven to lead to investment, innovation, universal
connectivity and global prosperity.
We can start by working to find new allies at the upcoming World
Telecommunications Policy/ICT Forum (``WTPF''), which convenes in
Geneva this May. This conference will focus squarely on Internet
governance and will shape the 2014 Plenipotentiary. Accordingly, the
highest levels of the U.S. Government must make this cause a top
priority and recruit allies in civil society, the private sector and
diplomatic circles around the world.\26\
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\26\ The effort should start with the President immediately making
appointments to fill crucial vacancies in our diplomatic ranks. The
recent departures of my distinguished friend, Ambassador Phil Verveer,
his legendary deputy Dick Beaird, as well as WCIT Ambassador Terry
Kramer, have left a hole in the United States' ability to advocate for
a constructive--rather than destructive--Plenipot.
---------------------------------------------------------------------------
Internet freedom's allies simply cannot dither again. If we do, we
will fail, and global freedom and prosperity will suffer.
III. We must offer other nations, especially those in the developing
world that feel disenfranchised from Internet governance
processes, an alternative to international regulation by
improving and enhancing multi-stakeholder entities, such as the
Internet Governance Forum.
Merely saying ``no'' to any changes to the multi-stakeholder model
has proven to be a losing proposition, as the outcome of the WCIT
clearly illustrates. The Plenipotentiary meeting in 2014, and the WTPF
this coming May in Geneva, provide us with opportunities to amend and
enhance the current multi-stakeholder structure to include more
meaningful participation by developing world nations. Due to limited
time and resources, many smaller countries simply cannot attend the
myriad Internet governance meetings that are held around the globe each
year. As a result, a disproportionate amount of aspiring nations feel
left out of the decision making. Such perceived disenfranchisement has
fueled the drive to expand the legal authority of the ITU. We should
work to change this disparity as soon as possible.
The best avenue to amplify the voice of the developing world would
be through strengthening participation in the IGF. The IGF was
chartered in 2005 in Tunis at the U.N.'s World Summit on the
Information Society. It first met in Athens in 2006. The IGF includes
among its participants civil society, the private sector, non-profits,
governments and the ITU itself. Its structure is classically multi-
stakeholder in nature: it operates by consensus and no government or
other entity controls it. The IGF is a forum for decision making, but
is not the decision maker. In other words, it is a ``wiki' environment
that operates in a flat, democratic and bottom-up manner where the
smallest of players can become empowered, much like the Internet
itself.
The international community, including the private sector, civil
society, non-profits and governments alike, should strive to find ways
to increase meaningful participation in the IGF by all interested
stakeholders. As with many organizations, achieving this goal may be a
matter of raising adequate funds. We should not allow this challenge to
act as an obstacle, however. If we do not give developing nations a
meaningful good faith role in shaping the evolution of the Internet
through a non-governmental multi-stakeholder entity, they will continue
to vote in great numbers to radically expand the ITU's reach.
Ironically, it is the developing world that stands to gain the most
from an unfettered Internet, and they will lose the most under
centralized, top-down control of the Internet's operations, content and
economics.
IV. Congress can and should continue to play a constructive role by
amplifying the call for more Internet freedom.
As we make communications policy here in the United States, we tend
to forget that nearly every government and communications provider on
the globe studies what we do. Without a doubt, this hearing is
streaming live in some countries and is being blocked by government
censors in others. Every detail of our actions is scrutinized while
influencing nations everywhere.
Furthermore, when Congress speaks, especially when it speaks with
one loud and clear voice as it did last year with the unanimous,
bipartisan and bicameral resolutions concerning Internet freedom,
policymakers across the globe pause to think. Repeatedly, I have been
told by international officials that, despite the negative outcome of
the WCIT, last year's resolutions had a positive effect.\27\
---------------------------------------------------------------------------
\27\ Many other proposals that would threaten the Internet were
defeated at the WCIT, such as ``sender party pays,'' which would have
required Web content providers to pay Internet service providers (ISPs)
in other countries for the traffic sent over those networks. See also
David Gross, Walking the Talk: The Role of U.S. Leadership in the Wake
of WCIT, Bloomberg, Jan. 17, 2013, http://www.wileyrein.com/resources/
documents/Gross--BNA--1.17.13.pdf (last visited March 8, 2013)
(explaining that Congress's clear message was heard at WCIT, ``This
action was important not only because of the substance of Congress's
statements, but also because the world understood just how
extraordinary it is for our Congress to act with unanimity, especially
in an era when Congress has immense difficulty reaching consensus on
almost anything. At the end of WCIT, I heard from many foreign
officials that they knew that the United States would not sign the
revised treaty with its Internet-related provisions because Congress
had sent a clear and unequivocal message that such an agreement was
unacceptable to the American people.'').
---------------------------------------------------------------------------
This year, Congress can help by speaking loudly and clearly to
support policies that promote Internet freedom and global prosperity as
we head toward the ITU's plenipotentiary meeting in 2014.
Conclusion
I ask each of you today to take bold and decisive action now. As we
dine on our Thanksgiving dinners in 2014, let us not look back at today
and lament how we did not do enough. We have but one chance. Let us be
resolute and tell the world that all nations will benefit if we stand
strong together for Internet freedom.
Thank you for having me before you today. I look forward to your
questions.
______
Prepared Statement of Hon. Mignon L. Clyburn, Commissioner,
Federal Communications Commission
Chairman Rockefeller, Senator Thune, members of the Committee,
thank you for the opportunity to appear before you today. It is good to
be back, and I look forward to continuing to work with you and the new
members in the years to come, particularly Senator Scott from the great
state of South Carolina.
When I sat before you during our last hearing, I was under
consideration for a second term on the FCC. Today I wish to thank you
for your votes of confidence in January.
I plan to maintain a strong focus on consumer protection, the need
for robust competition, and ways in which we can ensure that technology
can advance key, national objectives. In doing so, I wish to stress
what I see as the primary role of those sitting at this table, and for
the providers we regulate.
Last week, I met with a Colorado broadcaster who summed it up
perfectly. We are trustees, both communications providers and
regulators alike, each serving this Nation for a specific purpose. To
the point, American consumers are in need of and will always benefit
from world-class technology and innovation that often comes from the
private sector, but both must have assurances that the rules which
govern this space are timely, clear, and fair. No matter the product or
service, transparent rules must always be in place to protect all
parties, ensuring that we all are able to enjoy the advantages and
opportunities these communications technologies have to offer.
I believe we have worked hard to fulfill our side of this pact,
with the Commission and industry successfully communicating on how best
to advance universal service for voice and broadband, disabilities
access to communications technologies and services, and better delivery
systems in the area of public safety.
Take for example our current review of the FCC's media ownership
rules. My office has held dozens of meetings with both broadcasters and
our friends in the public interest community, who are both working to
seek middle ground on a number of core issues important to each side.
We want to get the rules right, and I am pleased that we are
considering every possible option before making a final judgment. I
have long warned that it would be imprudent and negligent to change any
rule absent timely and comprehensive data regarding the impact on
female and minority broadcasters and diverse broadcast programming, and
I am pleased that at least one organization has begun a study to that
effect. As a steward of the public interest, I feel duty-bound to
consider all the facts as we fulfill our statutory obligations.
The same can be said with regard to our roadmap for incentive
auctions, and our laser focus on a process that can empower the mobile
wireless and broadcast TV industries and provide sufficient funds to
meet the public safety goals. Chairman Genachowski has set forth a
process that adheres to the statute you and your colleagues in the
House sent us last year, and we intend to fully comply with the
language and goals of the legislation. I will never lose sight of what
I mentioned moments ago, that we are co-trustees, and as such, we will
continue to work diligently with the broadcast industry and proceed in
a way that carefully considers the concerns of all stakeholders.
We also will not stop focusing on improving access to broadband
networks even in the most hard-to-serve areas of the nation, and the
reforms of the Universal Service Fund programs have been a significant
priority for the agency to advance that objective. While physical
access is important, work is ongoing to promote the adoption and use of
broadband. Congress directed us to do so in Section 706 of the
Communications Act, along with our state commissions, and as my last
act as Chair of our Federal-State Joint Conference on Advanced
Services, we hosted a summit in February to focus on the various
adoption programs underway through the Recovery Act funds, as well as
other public and private sector efforts.
We highlighted a number of successful projects and the latest
academic thinking. What we have learned so far is that adoption has
slowed in recent years, and those consumers who have yet to adopt have
multiple reasons for not doing so. Cost remains a significant barrier,
and convincing those who are non-digital natives to get online
typically involves a trusted local partner, digital literacy training,
and subsidized services and equipment if affordability is an issue. I
am pleased that the Commission's Lifeline broadband pilot projects will
lead to additional data for the Commission to study in order to further
advance adoption, especially for low-income, senior and minority
consumers. Moreover, I am encouraged by private sector efforts
committed to increasing broadband adoption in disadvantaged
communities. It is a matter of fairness, as one senior executive so
aptly stated. These are the communities that can be helped the most by
high-speed Internet access, and the public and private sectors should
continue to work together in order to better address this imperative.
As a nation, we can ill-afford to leave anyone behind.
I am, as always, eager to share your objectives with our
hardworking staff at the FCC, and pledge to you that I will remain
diligent and vigilant as a trustee of the American people. Thank you
again for this opportunity, and I look forward to answering any
questions you may have.
______
Prepared Statement of Hon. Jessica Rosenworcel, Commissioner,
Federal Communications Commission
Good afternoon, Chairman Rockefeller, Ranking Member Thune, and the
distinguished members of the Committee.
I am honored to appear before you today as a Commissioner at the
Federal Communications Commission. Prior to serving in this position, I
had the privilege of serving this Committee as Senior Communications
Counsel. But of course, joining you here today behind the witness table
is a different experience altogether. I am grateful for the
opportunity.
Let me start by noting that there is no sector of the economy more
dynamic than communications. By some measures, communications
technologies now account for one-sixth of the economy in the United
States. We have more ways to connect, create, and access content than
at any point in history. These technologies are changing the way we
educate, entertain, and govern ourselves--in communities all across the
country.
But our communications triumphs to date are no guarantee of future
success. Laurels, are not, in fact, good resting places. So I think it
is important to start with what we know. We know that we are witnessing
the breaking down of old barriers between local and long distance;
voice, video, and data; and wired and wireless. We know that the scope
of communications convergence is immense--and the digitization of all
aspects of our economic and civic life is well underway.
There is no question that this transition is exciting. But it also
brings challenges. So in these transitional times, what should guide
the Commission as we carry out the laws developed by Congress? I
believe that our policies must always do two simple things.
First, they must promote confidence for private investment in
digital age infrastructure.
Second, they must promote confidence for consumers to realize the
full potential and opportunity that our emerging digital world
provides.
This is the prism through which I view all of the Commission's
actions. It is the prism through which I believe the agency should
approach the challenging issues ahead. It is the way I believe we can
best foster growth and opportunity through communications--in urban
areas, rural areas, and everything in between.
Now I want to move from the big picture to the particular, from
method to mechanics--and discuss the major communications issues that
lie ahead.
Implementing Successful Wireless Incentive Auctions
The Commission embarked this past September on the complex but
critical task of conducting wireless incentive auctions. As you
undoubtedly know, incentive auctions are a new tool that Congress
provided us with in the Middle Class Tax Relief and Job Creation Act to
address the near-term demands on our Nation's airwaves.
The demands on our airwaves are very real. Consider the fact that
we already have more wireless phones in this country than we have
people. Half of those phones are smartphones. Today one in five
households owns a tablet computer--and that number is growing fast.
Smartphones generate 35 times the traffic of traditional wireless
phones. Tablet computers generate 121 times the traffic of traditional
wireless phones. And over the next five years, mobile data traffic is
expected to grow 13 times what it is today.
So we must get these auctions right. Because if we get them right,
we will facilitate the voluntary return of spectrum from commercial
licensees and promote its efficient reuse. If we get them right, we
will ease congestion on our airwaves and expedite development of new
wireless services and applications. That will mean confidence for
carriers to invest in wireless networks and confidence for consumers to
take advantage of the growing array of new and innovative services that
wireless broadband can put in our hands.
But before we get there, it is useful to consider what has come
before. For nearly two decades, the Commission's path-breaking spectrum
auctions have led the world. The agency has held more than 80 auctions;
it has issued more than 36,000 licenses; and it has raised more than
$50 billion for the United States Treasury. The Commission's
simultaneous multiple round ascending auctions have been a model for
governments and commercial wireless providers across the globe.
We are now again poised to be the world's pioneer with incentive
auctions. To ensure our success I believe that four basic principles
should guide us: simplicity, fairness, balance, and public safety.
Simplicity is key. Incentive auctions are undeniably complicated.
But at every structural juncture, a bias toward simplicity for
participants is crucial. A broadcaster should be able to quickly and
transparently evaluate the opportunities auctions provide.
Fairness is essential. This is especially true with regard to the
treatment of broadcasters that do not participate in the auction.
Fairness demands that we consider how to accomplish repacking by
minimizing unnecessary disruption and maximizing the ability of the
public to continue to receive free, over-the-air television. At the
same time, we ask that broadcasters make a fair assessment of the
opportunities that this auction provides. By offering incentives to
share channels and incentives to relocate from the UHF to the VHF band,
this auction can mean new resources for broadcasters to develop new
programming and deploy new services.
Balance is necessary. None of the three legs of the incentive
auction--the reverse auction, the repacking, or the forward auction--
can stand on its own. For instance, the interference rules we consider
will not only impact broadcast services, but also how much spectrum
will be available for auction, which in turn will impact the revenues
raised. Choices in one area affect others. This also requires attention
to the balance between licensed and unlicensed use of spectrum across
all frequency bands. The former provides reliability and interference
protection; the latter provides low barriers to entry and promotes the
efficient use of limited resources. Good spectrum policy requires both.
Public safety is fundamental. The Commission must remember that
Congress designated auction revenues to support the first nationwide,
interoperable wireless broadband public safety network. We must never
forget that the success of these auctions requires delivering on our
promise to America's first responders.
Finally, it is important to put our incentive auctions--and all of
our spectrum auctions--on a clear timeline. A date certain will focus
all stakeholders, lead to capital formation, provide certainty for
broadcasters, and help ensure success.
Developing a New Approach to Federal Spectrum
Even with incentive auctions on course, demand for our airwaves
will continue to grow at a breathtaking pace. To keep up, more must be
done. I believe this requires rethinking our traditional approach to
Federal spectrum.
Federal authorities have substantial spectrum assignments. After
all, critical missions throughout the government are dependent on
access to our airwaves. Federal authorities use their spectrum
assignments to protect us from attack, with tools like precision guided
munitions and early missile warning systems. They use them to manage
our air traffic, enhance our crop productivity, and monitor our water
supplies. They use them to protect against forest fires, and to predict
weather patterns--like Hurricane Sandy--before they occur. These are
essential to our economic security and our national well-being.
Nonetheless, we are on a hunt for new opportunities for commercial
spectrum, in order to reach the 500 megahertz benchmark for new
wireless broadband use in the Executive Order from President Obama just
under three years ago. With traditional auctions and incentive auctions
in the Middle Class Tax Relief and Job Creation Act we are already on
our way. But meeting this mark will require more. It will require a
fresh look at Federal uses.
The traditional approach to repurposing Federal spectrum for
commercial use entailed three distinct steps: clear Federal users out,
relocate them, and auction the spectrum for new commercial use. But
while this three-part command worked well in the past, it is unlikely
to work as well going forward. Just as in the commercial sector, more
government functions than ever before are traveling over our airwaves
and it is growing harder to find spectrum for Federal relocation.
So it is time for a new approach. It is time to develop a series of
incentives to serve as the catalyst for freeing more Federal spectrum
for commercial use. Government agencies are mission focused. Once a
communications network has been built, once a land mobile radio system
is operational, agencies do not want to change because it disrupts
their mission. This is completely rational. But what if we were to
reward Federal authorities for efficient use of their spectrum
resource? What if they were able to reclaim a portion of the revenue
from the subsequent re-auction of their airwaves? Or enjoy a benefit in
their budget every time they increased their efficient use of the
airwaves? Would they make new choices about their missions and the
resources they need to accomplish them? I think so. In short, instead
of sticks, we should try carrots. We must work with our government
partners so they can realize the value of their spectrum and the value
of using it efficiently--instead of only seeing loss from its
commercial reallocation.
Fostering the Transition to IP Networks
When it comes to communications network infrastructure, we are
living in a transitional time. We have the public switched telephone
network and an emerging Internet Protocol (IP) ecosystem. Today they
coexist. The new and the next interconnect. They are jointly
responsible for carrying our communications.
The numbers clearly demonstrate this transition. In 2001, there
were 192 million circuit-switched telephone lines. A decade later, this
number declined by more than 40 percent to 107 million. In contrast,
interconnected Voice over Internet Protocol (VoIP) subscriptions have
risen by more than 50 percent since 2008, and now number 37 million.
Add to this that over one-third of households have cut the cord
entirely, with their wireless phone their only phone.
What we have is a trend. The ways consumers choose to connect are
growing more diverse, and so are the networks over which our
conversations and content travel.
The Commission is guiding the course for this transition right now.
It has petitions before it that pose basic questions about fostering
the migration to IP network infrastructure. It also has a task force
charged with comprehensively considering issues posed by this
transition.
These are good developments. Because we must do more than just
apply the laws of the present to the networks of the future. We must
make choices that inspire confidence and private investment in our
Nation's infrastructure.
To this end, companies need to understand what policies guide the
Commission's actions, both from a regulatory and enforcement
perspective. We will undermine investment if we are not clear. So as we
develop a framework for the IP transition, I think we should be clear
and not get lost in legal minutiae. We need to ask big questions about
the basic values in our communications laws. For my part, I see four:
public safety, universal service, competition, and consumer protection.
First, public safety is paramount. In the very first sentence of
the Communications Act, Congress instructed the Commission to make
available, ``to all the people of the United States. . .a rapid,
efficient, Nation-wide, and world-wide radio and communication
service'' in order to promote the ``safety of life and property.'' In
light of this directive, any technological or network transition must,
first and foremost, be judged by its ultimate impact on public safety
and network resiliency.
But as the numbers I just shared with you demonstrate, we are
migrating to wireless and IP networks. That means that we are choosing
to go without the independent electrical source that traditionally
powered wireline copper plant. Our new wireless and IP technologies are
dependent on commercial power. When that goes out, so do connections.
But as consumers switch to new networks, I do not believe we have to
sacrifice safety in the process.
So as a result, I think it is time for an honest conversation about
network reliability in the wireless and digital age. It is time to ask
hard questions about back-up power, and how to make sure our networks
are more dependable when we need them most. We also need to make sure
that consumers understand the benefits--and limitations--of new
technologies when they reach out for emergency assistance. Hurricane
Sandy demonstrated this need with painful clarity.
Second, universal service is still essential. No matter who you are
or where you live, prosperity in the 21st century will require access
to broadband services. The Commission's ongoing efforts to promote
broadband deployment and adoption are built on this simple truth. But
as we transition to new technologies, we must ensure that no American
is left behind.
Third, competitive markets are critically important. Competition
inspires private sector investment. The competitive markets that have
spurred so much technological innovation in the past will be the most
effective means of making sure that consumers reap the benefits of this
network transition in the future. This requires special attention to a
key element of the Telecommunications Act that has made our patchwork
of competitive networks work seamlessly: interconnection.
Fourth, consumer protection is always in the public interest. In a
transitional world, consumers rely on both old and new technologies. We
need to help consumers understand what different technologies offer,
help them make informed choices, and inspire confidence in the range of
new services this transition is making available.
As we assess changes in the public switched telephone network, I
think these principles are good guideposts. I think we can work within
this framework and promote confidence in network investment across the
country.
Updating Universal Service and E-Rate for the Broadband Age
Universal service is a cherished notion in communications. After
all, it was back in 1934 when Congress first directed the Commission to
make ``communication by wire and radio'' available ``so far as
possible, to all the people of the United States.'' And it was Congress
who expanded on this notion by adding new principles to guide universal
service policy to the law in 1996. As a result, today, the duty to
preserve and advance universal service is the law of the land.
Technology changes, but these basic legal principles have not. That
is why, a little over a year ago, my colleagues at the Commission
updated the high-cost universal service and intercarrier compensation
system. This was a historic effort. They refocused the fund from last
century's technology on to the broadband and wireless communications
challenges of this century. They put it on a budget. And they increased
accountability throughout.
But I do worry that our reforms to the high-cost universal service
system are extremely complex. I fear that this complexity can deny
carriers dependent on it the certainty they need to confidently invest
in network infrastructure. So when opportunities arise to simplify our
rules in a manner that is fiscally sound, good for rural consumers, and
bound to inspire investment--we should seize them. Our policies must
strive to provide carriers with confidence to invest in broadband and
wireless infrastructure and provide rural consumers with confidence
that they will have access to first-rate communications services.
To this end, I am pleased that the Commission recently made
adjustments to the universal service reforms it put in place for rate-
of-return carriers serving rural areas. Specifically, it combined
separate capital and operating expense benchmarks into a single new
benchmark. As technical as this sounds, it simplifies our regression
analysis and provides carriers with more flexibility and more
confidence to invest in their networks. This is a good thing.
However, going forward I would like to see similar adjustments made
for price cap carriers serving rural communities. Specifically, I would
like to see the Commission distribute incremental support from its
first phase of the Connect America Fund as soon as possible. With more
than 14.5 million rural consumers without broadband today, these funds
could be put to use right now to expand service and create jobs in
rural America. Delaying their distribution until a long-term cost model
is developed under the Connect America Fund would only further delay
rural broadband deployment.
Going forward, we also need to update the E-Rate program to meet
21st century education needs. In my current role, I have met with
school superintendents in communities as diverse as Miami, Florida and
Kotzebue, Alaska. They are uniform in one thing--their praise for the
power of E-Rate to bring high-speed communications to their schools and
libraries. They believe it is essential for digital age learning. But
year-in and year-out, the demand for this program is double the amount
the Commission makes available. Moreover, our surveys suggest that 80
percent of schools and libraries believe their broadband connections do
not meet the current needs. So I believe it is time for E-Rate 2.0. I
think it is time to reboot, reinvest, and reinvigorate this program and
put it on a course to provide higher speeds and greater opportunities
in the days ahead.
Recommitting to Consumers
Communications and media services are becoming a more substantial
part of all of our household budgets. Consumer expenses on
communications bills average more than 4 percent of disposable income.
For many households, that can mean thousands of dollars a year. To be
clear, we are getting a lot more value from these services. We have
more channels than ever before. We have faster broadband. We have
mobility, and with it the expectation that wherever we go, the ability
to connect will follow.
But consumer wallets are not without limit. Pocketbooks have their
bottom. In a world where consumer choices have become both vast and
complex, information is power. So it is vitally important to get
consumers the information they need to make choices with confidence in
a marketplace that can be bewildering to navigate.
Consider, for example, the dizzying array of wireless plans
available: shared and individual plans, limited and unlimited voice,
data, and text. To stay within a plan can require keeping track of
voice, data, and text usage across multiple devices. But I believe that
nobody should need to hire a lawyer to understand their wireless
contract and nobody should need to hire an accountant to explain their
bill. That is why the Commission's bill shock initiative, developed
with wireless carriers, is an especially terrific effort. As a result,
going forward, wireless customers will get alerts before they reach
their voice, data, text, and international roaming limits. So they will
no longer unknowingly rack up unexpected charges on their bills. It's a
nice demonstration of how good information can provide consumers with
the confidence to adopt new technologies and services--and benefit from
their functionality.
But we can do more. For starters, I believe our consumer complaint
process needs an upgrade. While the digital age advances, our consumer
complaint process is stuck in the analog era. Consider that every year
the Commission receives roughly 400,000 complaints and inquiries. The
interfaces we have, however, are dated and the information we provide
has too much of the special charm of regulatory legalese. We can do
better. It is time update this process and so we can answer questions,
direct queries, and help consumers navigate the range of communications
services they use in every aspect of their lives.
But we should go further. This is the era of big data. We should
not just collect this complaint and inquiry information from consumers
and publish it in snapshot form. We should take these numbers and make
them accessible in machine-readable formats, and if possible, with
common metadata tagging schemes. We need to use these data to inform
the Commission's policy activities and ensure consumers are treated
fairly. We can also turn to others to slice and dice these numbers and
identify meaningful trends that deserve our national attention,
concern--or even praise.
In this way we can recommit to consumers, help them get good
information about their communications services, contracts, and
options--and help them make better choices.
Let me close by saying that it is an exciting time in
communications. The issues before us present real challenges. But their
smart execution can also yield great things: confidence for private
investment in infrastructure and confidence for consumers to realize
the wide range of opportunities new digital age services provide.
I look forward to working with you and answering any questions you
might have.
______
Prepared Statement of Hon. Ajit Pai, Commissioner,
Federal Communications Commission
Chairman Rockefeller, Ranking Member Thune, and Members of the
Committee, it is a privilege to appear before you this afternoon. I
last testified in front of this Committee on my third day in office,
and that, it turns out, was exactly three hundred days ago. Since that
appearance, I have been working at the Commission to advance a number
of key objectives: freeing up more spectrum for commercial mobile
broadband; removing regulatory barriers to infrastructure investment;
promoting a vibrant and diverse media marketplace; and making the FCC
as nimble as the industry that we oversee. In some of these areas, we
have made progress over the course of the last ten months. But there is
still much more that we need to do.
1. Spectrum
Let's start with spectrum. A large part of our time at the agency
has been spent evaluating and implementing the responsibilities that
Congress entrusted to us in the Middle Class Tax Relief and Job
Creation Act of 2012. In the Act, Congress tasked the Commission, among
other things, with getting more spectrum into the commercial
marketplace to address the looming spectrum crunch and facilitating the
establishment of a nationwide, interoperable public safety broadband
network.
Holding a successful broadcast incentive auction is critical to
both tasks. This auction is our best opportunity to push a large amount
of spectrum well-suited for mobile broadband into the commercial
marketplace. And Congress has directed that proceeds from that auction
will fund the deployment by the First Responder Network Authority
(FirstNet) of a nationwide, interoperable public safety broadband
network. For these reasons, I believe that we must implement our
incentive auction authority with dispatch. Accordingly, last July, I
called for the FCC to commence the incentive auction rulemaking process
in the fall. To his credit, Chairman Genachowski launched a timely
proceeding last September, and I thank him for that.
As the Commission moves forward on incentive auctions, I believe
that four principles should guide our work. First, we must be faithful
to the statute. It is our job to implement this legislation, not to
rewrite it to conform to our policy preferences. Second, we must be
fair to all stakeholders. This is especially important because the
incentive auction will fail unless both broadcasters and wireless
carriers choose to participate. Third, we must keep our rules as simple
as possible. The broadcast incentive auction is inherently complicated;
unnecessary complexities are likely to deter participation. And fourth,
we need to complete this proceeding in a reasonable timeframe. I
believe that we should aim to conduct the auction no later than June
30, 2014.
Although I am optimistic that fidelity to these principles will
result in a successful broadcast incentive auction, I also see some
storm clouds on the horizon. I am concerned, for example, that the
incentive auction may not provide sufficient funding for FirstNet to
build a nationwide, interoperable public safety broadband network. Only
one closing condition was set forth for the incentive auction in last
fall's Notice of Proposed Rulemaking: that the revenues from the
forward auction must cover the costs of the reverse auction. Such an
outcome, in my view, would be entirely unacceptable. It would mean no
money for FirstNet to build out a nationwide, interoperable public
safety broadband network; no money for state and local first
responders; no money for public safety research; no money for deficit
reduction; and no money for Next Generation 911 implementation. The
statute mentions each of these items, which makes it difficult to
square that legislation with an auction that would provide no funding
for any of them. This is why I believe it is imperative for the
incentive auction's rules to take into account the need to maximize net
revenues.
Another worry involves limits that the Commission might place on
auction participation. We need robust participation from television
broadcasters, current wireless operators, and new entrants in order to
produce the revenue necessary to construct the nationwide,
interoperable public safety network. The more people at the party, so
to speak, the better the party will be. But if the Commission
preemptively tells broadcasters ``You may bid this high, but no
higher,'' many may not show up for the reverse auction. And if the
Commission starts picking and choosing who may participate in the
forward auction--such as by setting a spectrum cap or narrowing the
spectrum screen despite the robust competition in the wireless market--
it will result in less participation, less revenue, less spectrum
available for mobile broadband, and less funding for public safety.
It's worth exploring a bit further the implication of the last item
I mentioned. Ensuring interoperable public safety communications has
been a national priority for over a decade. Indeed, the 9/11 Commission
identified the lack of interoperability as a serious hole in our
Nation's public safety communications and demanded that it be
addressed, and this Committee has led the way in seeking to solve this
problem. So given the importance of constructing a nationwide public
safety network, I am committed to maximizing the net revenues obtained
through the commercial broadcast incentive auction.
The Commission has already received the first round of comments in
the incentive auction proceeding, and the deadline for reply comments
is today. I look forward to reviewing the complete record because we
can only make well-informed decisions if we listen to public input.
Take, for example, the 600 MHz band plan. In the first round of
comments, the Commission's proposed band plan has met with near-
universal opposition. Neither broadcasters nor the wireless industry
believes that it would work. Fortunately, however, our band-plan
proposal did have one positive impact. It motivated broadcasters and
wireless carriers to come together and reach agreement on key
principles for an alternative band plan.
In addition to carefully considering the views of all commenters, I
also look forward to continuing to receive feedback from Congress,
particularly Members of this Committee. Given your key role in crafting
this legislation, it is vital that the Commission keep open the lines
of communication with you. It is also important for us to coordinate
closely with Canada and Mexico to address issues involving border
areas. Absent such coordination, we will have neither a timely nor
successful auction.
Of course, the broadcast incentive auction isn't the only auction
the Commission has on its plate. The Act also directs the Commission to
auction off 25 MHz of spectrum adjacent to AWS-1 (2155-2180 MHz). This
spectrum would ideally be paired with another 25 MHz block adjacent to
AWS-1: 1755-1780 MHz. These bands are already internationally
harmonized for commercial use, which means deployment will be swifter
and cheaper than other options. If we auction off this spectrum in the
next two years, it could raise billions of dollars for FirstNet, Next
Generation 911 implementation, and deficit reduction.
As you know, there is a hitch in the giddyup. The 1755-1780 MHz
band is currently occupied by the Federal Government. Federal
incumbents don't necessarily have an incentive to consolidate their
spectrum holdings or update their spectrum usage with more efficient
alternatives that could improve their ability to carry out their
missions. But there is an established solution for productive
collaboration. The Commercial Spectrum Enhancement Act and the Middle
Class Tax Relief and Job Creation Act apply an open, transparent,
market-based approach to Federal spectrum through the notification-and-
auction process. Let me outline that process briefly.
The notification-and-auction process begins with the FCC notifying
the National Telecommunications and Information Administration (NTIA)
that we intend to auction Federal spectrum for commercial use. That
notification starts an 18-month clock that must run before we can
reallocate the spectrum. Once we notify NTIA, Federal incumbents have
10 months to submit transition plans to NTIA's Technical Panel, which
then has 30 days to review these plans. At the one-year mark, NTIA and
the Office of Management and Budget (OMB) notify the Commission of the
estimated costs and timeline for making that spectrum available for
commercial use based on these transition plans. Two months later, NTIA
publishes the transition plans, and non-federal users have an
opportunity to challenge the transition plans if, for example, they
think a transition plan overstates the costs of relocating the Federal
incumbent. Finally, 18 months after the initial notification, the
Commission may auction the spectrum.
The Commission should commence the notification-and-auction process
now to preserve our ability to auction the 1755-1780 MHz spectrum
paired with the 2155-2180 MHz spectrum we are required by law to
auction by February 2015. Starting sooner rather than later maximizes
flexibility and fairness for everyone. Federal incumbents will have
more time to develop transition plans. Non-federal users will have more
time to challenge cost estimates associated with those plans. And NTIA
and OMB will have more time to calculate the total costs of allowing
commercial use of the spectrum. There is little downside, because if
the auction does not raise more than 110 percent of the estimated costs
of transitioning, auction participants and Federal incumbents are held
harmless.
An important choice will face us after we commence the
notification-and-auction process: We will need to decide whether the
spectrum should be cleared and reallocated for exclusive commercial use
or whether we should auction off only ``shared rights.'' I believe our
goal should be clearing. If our goal is to incentivize investment in
wireless networks, nothing beats clearing. That's one reason the Middle
Class Tax Relief and Job Creation Act puts a thumb on the scale for
clearing and only allows sharing if clearing is technically infeasible
or cost prohibitive.
Not that I'm opposed to spectrum sharing. For example, geographic
sharing by creating exclusion zones around certain areas can be a
useful tool. But spectrum sharing is a complicated and largely untested
endeavor that requires a lot of coordination among potentially hundreds
of Federal users and licensees. The largest wireless providers in
America may be both willing and able to do so. But I doubt that smaller
ones who lack the time or resources are. Indeed, the GAO reported to
Congress last year that Federal sharing would require a lengthy and
unpredictable process that would be especially costly for new entrants.
And sharing could embroil the Commission in lengthy and sensitive
interference disputes. After all, an interference dispute between a
commercial licensee and a government user is far more likely to become
mired in politics than an argument between two private parties--
especially if the government agency uses that spectrum for defense or
other high-priority operations. Recent experience suggests that we
should be reluctant to enter this thicket.
There's one last piece of spectrum I'm excited to discuss: the 5
GHz band. Last month, the Commission teed up the expansion of
unlicensed use by a full 195 MHz in the 5 GHz band. We were not
obligated to go this far--the statute only required that we commence a
proceeding on opening up 120 MHz--but I was especially excited that we
did because it's smart policy.
Our proposal builds on past successes, such as our Part 15 rules
that helped enable Wi-Fi and Bluetooth, and uses spectrum ideally
suited for unlicensed use. The short-range propagation characteristics
of 5 GHz spectrum enable localized reuse with minimal risk of
interference. Manufacturers are already building devices to work on 5
GHz spectrum. And our proposal would create large, contiguous swaths of
spectrum--exactly what the standard for Super Wi-Fi, IEEE 802.11ac,
requires for high-speed, high-capacity data transfers. For example, a
160 MHz-wide channel could deliver 1 gigabit of data per second. In
short, more unlicensed spectrum in the 5 GHz band will allow higher-
speed, higher-capacity connections and will mean less congestion in
apartment buildings and coffee shops, libraries, and offices.
Achieving this vision will not be without its challenges. The
Middle Class Tax Relief and Job Creation Act lets us expand unlicensed
use into the 5350-5470 MHz band only if we determine that ``licensed
users will be protected by technical solutions, including use of
existing, modified, or new spectrum-sharing technologies and
solutions.'' We also must find that ``the primary mission of Federal
spectrum users. . .will not be compromised by the introduction of
unlicensed devices.'' To help us in these tasks, the NTIA has reported
on the potential impacts to Federal Government users from expanding
unlicensed use. And I appreciate their work. But you gave us the
ultimate responsibility, and I hope that we will consider whether
Federal incumbents should alter their systems or operations to
accommodate unlicensed devices in this spectrum and what solutions will
work, keeping in mind the costs and benefits of all potential options.
2. The Internet Protocol (IP) Transition
Today, almost every segment of the communications industry is
competing to offer newer, faster, and better broadband services.
Telecommunications carriers are upgrading DSL with IP-based technology
and fiber. Cable operators are deploying DOCSIS 3.0 to increase
bandwidth tenfold. Satellite providers are offering 12 megabit packages
in parts of the country that never dreamed of such speeds. And millions
of Americans--many of whom don't subscribe to fixed broadband service
at home--now have access to the Internet on the go using the mobile
spectrum the Commission auctioned back in 2006 and 2008.
Underlying these changes is a technological revolution. Analog
signals have gone digital. Circuit switching is giving way to packet
switching. And first-generation cellular has been replaced with ultra-
fast LTE. The common thread knitting all of these changes together is
the Internet Protocol (IP), a near-universal way to organize and
transmit data.
What are the results of all this broadband competition? More
choices for consumers, and major challenges to old business models.
Traditional voice telephony is a good example. In living memory, your
one option was Ma Bell. But now you can select among a number of Voice
over Internet Protocol (VoIP) providers, including cable operators. Or
technology companies like Google, Skype, and Facebook. Or even video
teleconferencing providers. Essentially, voice is becoming just another
application riding over the Internet. It's no surprise, then, that
today only a third of U.S. households subscribe to plain old telephone
service over the public-switched telephone network (PSTN), and that
number is dropping each year.
Yet the Communications Act still assumes that everyone gets plain
old telephone service over the PSTN. And it doesn't say clearly how IP-
based services should be regulated, if at all. Nine years ago this
month, then-Chairman Powell opened the IP-enabled services docket to
try to resolve this anachronism and ambiguity. But many of the
questions raised in that proceeding still remain. How should IP-based
services be classified under the Act? What's the FCC's authority to
regulate these services? And if we do have authority, how should we
exercise it? In short, what approach should we take to the IP
transition? No matter how the FCC answers these questions, make no
mistake: our transition to an all-IP future will happen. But what we do
will have a dramatic impact on the speed and success of that
transition.
I believe that the Commission needs to take a hard look at its
regulations in light of the coming IP transition, if for no other
reason than that the American people are ahead of Washington on this
issue. Through millions of individual choices, consumers are sending a
clear message about the superiority of IP-enabled networks. (For
instance, in 2011, there were over 37 million VoIP subscriptions.)
Government should heed this message and give the private sector the
flexibility to make investment decisions based on consumer demand, not
outdated regulatory mandates.
There are signs that we've already started off on the right foot.
Just this past December, Chairman Genachowski created a Technology
Transitions Policy Task Force. Back in July, I called for such a task
force, one that would help us take a holistic approach to the IP
transition and focus our deliberations on a task that so desperately
needs to be done. The Task Force will hold its first workshop next
week. And I hope it will continue to solicit input from the public and
develop proposals for hastening the IP transition. Given the pace of
change, the Task Force should start forming recommendations promptly.
Although I would not want to prejudge the work of the Task Force,
there are a few guidelines that I think should shape their
deliberations and the Commission's own work on the IP transition.
First, we must ensure that vital consumer protections remain in place.
When consumers dial 911, they need to reach emergency personnel; it
shouldn't matter whether they are using the PSTN, a VoIP application,
or a wireless phone. The same goes for consumer privacy protections and
antifraud measures like our slamming rules. Second, we must not import
the broken, burdensome economic regulations of the PSTN into an all-IP
world. No tariffs. No arcane cost studies. And no hidden subsidies that
distort competition to benefit companies, not consumers. But promises
are not enough: I expect we would recommend the repeal of old-world
regulations that no longer make sense in a competitive all-IP world.
While they remain on the books, wholesale expansion to IP may just be
too tempting. Third, we must retain the ability to combat discrete
market failures and protect consumers from anticompetitive harm.
Fourth, we must respect the meets and bounds of the Communications Act
and not overstep our authority.
How do we put these principles in practice? Probably the best way,
in my eye, is to start with an All-IP Pilot Program that would allow
companies to choose a discrete set of wire centers where they could
turn off their old time-division-multiplexed electronics and migrate
customers to an all-IP platform.
Conducting a trial run before implementing big changes is nothing
new for the FCC. Before we turned off analog broadcasting, then-
Commissioner Copps had the good idea of testing the concept. That
experiment, which was held in Wilmington, North Carolina, provided
valuable feedback and helped make the nationwide DTV transition a
success. Similarly, the FCC launched a rural healthcare pilot program
in 2007. The success of that pilot led to the creation of the
Healthcare Connect Fund this past year. There are plenty of other
examples, from spectrum sharing to the E-Rate program.
In all those cases, we found out that predictions are no substitute
for hard facts and that a paper process isn't nearly as data-driven as
a real-live experiment. That surely will be true for the IP transition,
which represents perhaps the most fundamental transformation in the
history of telecommunications. To quote Blair Levin, the father of the
National Broadband Plan, an All-IP Pilot Program would be ``worth a
thousand pleadings.''
How should we structure this experiment? Let's start with some
basic principles. For one, participation in the All-IP Pilot Program
should be voluntary. No carrier should be forced to participate, and
pilot sites should be located in states that are ready and willing to
embrace the IP transition.
For another, tests should ideally be conducted in a variety of
places that represent our country's diverse geography and population.
We'll learn the most from the pilot program if there are sites in
urban, suburban, and rural communities. And we have to make sure that
low-income and minority communities are included, because the IP
transition is for everyone.
For yet another, no one should be left behind, so residential
customers with fixed telephone service today should continue to have
voice service available to them even when that service is based on IP.
And business customers should know in advance what IP-based services
will replace what they currently have.
Finally, we must be able to evaluate the All-IP Pilot Program in
order to figure out what worked and what didn't. This will help us make
the broader IP Transition. With empirical data in hand, we can reject
the rhetoric in favor of reason.
I should note that the All-IP Pilot Program isn't an issue that
divides the left from the right, Republicans from Democrats, or urban
America from rural America. Endorsements range from AT&T to the
National Cable and Telecommunications Association, from Bandwidth.com
to Alcatel-Lucent. Organizations like the NAACP, the National Urban
League, the Rainbow PUSH Coalition, the National Grange, and the
National Farmers Union also want a pilot program. So do advocacy groups
like the Minority Media and Telecommunications Council, the Asian
American Federation, the League of United Latin American Citizens,
Women Impacting Public Policy, the U.S. Chamber of Commerce, and the
American Consumer Institute.
Moving forward with an All-IP Pilot Program would send a powerful
message to the private sector that we intend to embrace the IP
Transition through a data-driven process. We would signal that we won't
force carriers to invest in old and new networks forever. We would move
closer to the day when carriers will be able to focus exclusively on
investing in the networks of tomorrow rather than maintaining the
networks of yesterday.
3. The Universal Service Fund
Speaking of the networks of tomorrow, we must recognize that
broadband operators in rural America today face unique challenges.
Unlike the urban environment, rural carriers must carefully plan their
infrastructure over a five-, ten-, or twenty-year time scale if they
are to recover their costs. Congress recognized this in section 254 of
the Act, and we need to think long and hard about the statutory command
that universal service support be ``predictable.''
Now, we can argue over the proper size of the Universal Service
Fund, but all of us should be able to agree that given its size, it
should be distributed consistent with the law and common sense. For
example, a constant stream of reforms every year or two is unlikely to
give investors much certainty. Instead, the Commission needs a long-
term strategy and must sometimes be patient before demanding more from
the industry.
Take the quantile regression analysis (QRA) benchmarks created by
the Commission in the 2011 Universal Service Transformation Order and
implemented by the Wireline Competition Bureau in the 2012 Benchmarks
Order. The QRA benchmarks are supposed to create ``structural
incentives for rate-of-return companies to operate more efficiently and
make prudent expenditures.'' But reality has not caught up with theory.
Instead, the QRA benchmarks have resulted in unpredictability and
uncertainty, chilling the investment climate and impeding the
deployment of next-generation technologies and broadband services to
rural Americans.\1\
---------------------------------------------------------------------------
\1\ Letter from John Charles Padalino, Acting Administrator, Rural
Utilities Service, to Marlene H. Dortch, Secretary, FCC, WC Docket Nos.
10-90, 07-135, 05-337, GN Docket No. 09-51, CC Docket Nos. 01-92, 96-
45, WT Docket No. 10-208, at 1-2 (Feb. 15, 2013), available at http://
apps.fcc.gov/ecfs/document/view?id=7022122067.
---------------------------------------------------------------------------
It is true that the Commission recently gave rural carriers some
short-term relief from the 2013 QRA benchmarks. For example, one
problem with the QRA benchmarks was that they limited the capital
investments (capex) and operating expenses (opex) of carriers
separately even though carriers should trade off capex and opex to
minimize the total cost of the network. This salutary measure alone
should reduce the number of capped rural carriers from 159 to 70 in
2013.
But we did not go far enough. The data underlying the benchmarks
are themselves flawed; the only comprehensive study of the benchmarks
conducted to date found significant problems with fourteen of the
sixteen variables used to produce them.\2\ And the Commission has
forthrightly admitted flaws in the maps it used and is in the process
of collecting accurate data. Hopefully, this process will be completed
and necessary revisions will be made before 2014.
---------------------------------------------------------------------------
\2\ Vincent H. Wiemer & Michael J. Balhoff, CFA, White Paper:
Lessons from Rebuilding the FCC's Quantile Regression Analysis at 17
(Feb. 2013), available at http://go.usa.gov/4he4; see also id. at 28
(``[T]he effect of the use of the model. . .is to create a much higher
degree of unpredictability and to incent very conservative levels of
spending by an individual carrier so that it does not risk shortfalls
in recovery on its high-cost spending. Then, if most carriers take this
approach each year as would be rational, each subsequent year becomes
more conservative and there is a potential `race to the bottom.' '');
id. at 68 (``The new QRA is duck hunting when the winds are high, the
distance is farther, and, for sport, there is no light.'').
---------------------------------------------------------------------------
I should note that, like my colleagues, I believe that establishing
limits on the universal service support a carrier can receive is a good
thing. In this era of fiscal restraint, no one can expect the
government to continue to fund their expenses without question. But the
QRA benchmarks do not reduce the size of the USF. They merely impact
how funds are distributed, and I have my doubts about the utility of
the QRA benchmarks as implemented.
For example, the 2013 QRA benchmarks do not incentivize efficient
investment because they apply to expenses incurred two years ago, in
calendar year 2011. And the Universal Service Transformation Order was
not even released until November of that year. They do not plausibly
redirect support from low-cost areas to high-cost areas because, even
after our recent order, carriers like Copper Valley Telephone and
Arctic Slope Telephone will have lower caps merely because they serve
Alaska. They do not target inefficient carriers (only ``outliers''),
nor do they encourage broadband deployment. Indeed, if a rural carrier
below the cap chooses to reinvest any additional support it receives in
broadband, it risks pushing itself over the cap in future years, thus
mitigating any benefit from that additional support. In short, I am
concerned that the QRA benchmarks may simply redistribute support from
one group of carriers to another arbitrarily.
The QRA benchmarks are not the only area where the Commission needs
to take its statutory duty of predictability seriously. Right now, the
Commission is working on the model that will underlie the long-term
support envisioned by Phase II of the Connect America Fund. Although I
had been hopeful that we would have it ready by 2013, that did not
happen, and it looks like we will not be ready for Phase II anytime in
the near future. While that is disappointing, it is better to get the
answers right than to get them right now. But we should be forthright,
declare that Phase II will not be ready until 2014, and, as
Commissioner Rosenworcel recently suggested, move forward with the
second tranche of Phase I as envisioned by the Universal Service
Transformation Order. Better to set a goal firmly in our sights and let
everyone work toward it than to keep capital on the sidelines.
4. Wireless Infrastructure
Removing regulatory barriers to wireless infrastructure investment
is another priority for the Commission. When building next-generation
wireless broadband networks, for example, a major challenge is
complying with the multifarious federal, state, and municipal
regulations covering a wide range of physical infrastructure, from
towers to small cells. Some oversight is necessary to ensure sound
engineering and safety, to be sure, but many procedures are not
designed with facilitating deployment in mind. This makes getting the
necessary permits and sign-offs an expensive, onerous, and
unnecessarily long process.
The Commission has taken some steps in an effort to address this
problem. In 2009, for example, we adopted shot clocks for localities to
act on siting applications for wireless facilities. That ruling is now
before the Supreme Court in City of Arlington v. FCC, and we shall see
in the next few months whether that rule stands or whether we must
return to you for direction. More recently, the Commission sought to
clarify the scope and meaning of section 6409(a) of the Middle Class
Tax Relief and Job Creation Act, which prohibits state and local
governments from denying certain collocation requests.
But more must be done to reduce regulatory barriers to the
deployment of wireless infrastructure. First, I believe the FCC should
make clear that delays to the FCC's shot clock process through
moratoriums are contrary to section 332 of the Communications Act. This
would address the tactic some localities have used to evade deadlines
of adopting an indefinite ``time out'' on the approval of wireless
infrastructure.
Second, the FCC needs to address what happens if a local government
doesn't comply with a shot clock. Currently, if a city does not process
an application within 150 days, the only remedy is to file a lawsuit.
This increases delay and diverts investments away from networks. To
solve this, the FCC should supplement its shot clocks with a backstop:
If a locality doesn't act on a wireless facilities application by the
end of the time limit, the application should be deemed granted.
Third, we should modernize our rules to exempt distributed antenna
systems (DAS) from our environmental processing requirements, except
for rules involving radiofrequency emissions. We can do this if a
technology is ``deemed to have no significant effect on the quality of
the human environment.'' Given their small size and appearance, I
believe that DAS meet this standard. We should similarly update our
historic preservation regulations, yet another regulatory layer, to
facilitate deployment of DAS and small cells that add capacity to
networks.
5. Media
Turning to the media side of our agenda, the FCC should try to
bring the congressionally mandated quadrennial review of our media
ownership rules to a close by Memorial Day. In my view, we must update
our regulations to reflect the changing nature of our Nation's media
landscape while at the same time preserving the Commission's commitment
to the core values of competition, diversity, and localism.
We have not yet been able to reach consensus, but I hope that we
will be able to find common ground and move forward together on a
bipartisan basis. I have been trying to do my part to help make that
happen. I understand that whatever reforms we end up implementing will
not go as far as I might prefer. For example, I believe that the time
has come to eliminate the newspaper-broadcast cross-ownership rule. In
this day and age, if you want to operate a newspaper, we should be
thanking you, not placing regulatory barriers in your path. But that
having been said, Chairman Genachowski's proposals to eliminate the
newspaper-radio and radio-television cross-ownership rules and to relax
modestly the newspaper-television cross-ownership rule are steps in the
right direction. He deserves credit for advancing these reforms, and I
am prepared to support them.
I have serious concerns, however, about proposals that are under
discussion to make Joint Sales Agreements (JSAs) and/or Shared Services
Agreements (SSAs) attributable under our local television ownership
rule. As broadcasters' share of the advertising market has shrunk in
the digital age, television stations must be able to enter into
innovative arrangements in order to operate efficiently. JSAs and SSAs
allow stations to save costs and to provide the services that we should
want television broadcasters to offer.
In my home state, for example, a JSA between two Wichita stations
enabled the Entravision station, a Univision affiliate, to introduce
the only Spanish-language local news in Kansas. Across the border in
Joplin, Missouri, a JSA between Nexstar and Mission Broadcasting not
only led to expanded news programming in that market but also nearly
$3.5 million in capital investment. Some of that money was spent
upgrading the stations' Doppler Radio system, which probably saved
lives when a devastating tornado destroyed much of Joplin in 2011.
For stations in smaller markets like Wichita and Joplin, the choice
isn't between JSAs or having both television stations operate
independent news departments. Rather, the real choice is between JSAs
and having at most one television station continue to provide news
programming while the other does not. If the FCC effectively prohibits
these agreements, fewer stations in small-town America will offer news
programming, and they will invest less in newsgathering. And the
economics suggest that there likely will be fewer television stations,
period.
At the same time as we modernize our media ownership rules, we must
take action to foster more minority ownership. To be sure, the U.S.
Court of Appeals for the Third Circuit has instructed us to do so. But
more importantly, it is the right thing to do. During my time in
office, one message has come across loud and clear when it comes to
minority ownership: The most significant barrier to expanding ownership
diversity is a lack of access to capital.
In order to help address this problem, I support a proposal
advanced by the Coalition for Broadcast Investment (CBI) to end our
current de facto ban on any foreign investment in U.S. broadcast
holding companies that exceeds a 25 percent benchmark. Instead, we
should evaluate proposals for foreign investment on a case-by-case
basis. Our current policy addressing foreign investment in broadcast
stations has been rendered obsolete by changes in the marketplace and
the passage of time. Today, foreign companies can own a majority stake
in cable operators, cable programmers, common carriers, Internet
backbone providers, satellite video providers, newspapers, and other
entities. Yet a foreign company cannot hold more than a twenty-five
percent interest in a single AM radio station. This doesn't make any
sense.
If we relax restrictions on foreign investment, minority Americans
will have more ways to raise capital and expand their participation in
the broadcasting industry. That's why this idea is supported by a wide
range of groups who care about diversity, including the Minority Media
& Telecommunications Council, the League of United Latin American
Citizens, the National Black Chamber of Commerce, and the United States
Hispanic Chamber of Commerce. I applaud the Media Bureau for seeking
comment on CBI's proposal last month and am hopeful that we will be
able to move forward on it in the near future.
Let me mention one last thing before I leave the media space. Last
September, I proposed that the Commission launch an AM Radio
Revitalization Initiative. In the ensuing months, I have been amazed
and gratified by the outpouring of support I have received for this
proposal from AM radio station operators from across the country. We at
the Commission last comprehensively reviewed our AM rules over twenty
years ago, and the band's challenges have multiplied since that time.
While I understand that AM radio isn't the hippest matter on the
Commission's agenda, I believe that AM stations provide an important
service to the American people, and we should not let the AM band
wither on the vine. Rather, we should take action soon.
6. Modernizing FCC Processes
Before concluding, I would like to touch on a subject that affects
all areas of the Commission's work: process reform. We at the FCC must
strive to be as nimble as the industry that we oversee. All too often,
proceedings at the Commission needlessly drag on for many years. For
example, it shouldn't have taken the Commission nine years to respond
to Martha Wright's petition seeking redress for the high long-distance
rates she paid to speak with her then-incarcerated grandson. And it
shouldn't have taken the Commission almost twelve years to issue an
eleven-paragraph order responding to an application for review filed by
a Georgia low-power television station (ironically, an order chastising
a private party for missing a deadline).
The good news is that we are making progress on this front.
Commissioners are voting on items more quickly after they are placed on
circulation. The time between the adoption and the release of items has
decreased. And we have reduced the FCC's backlog. Chairman Genachowski
and the rest of my colleagues deserve credit for these accomplishments.
But we still have room for improvement.
Since taking office, I have proposed a variety of reforms to
improve the Commission's performance. We should streamline our internal
processes where possible. For example, let's adopt a procedure akin to
the U.S. Supreme Court's certiorari process for handling applications
for review and let's speed up our processing of smaller transactions.
We should also take statutory deadlines more seriously. It is
unacceptable that we have only released the congressionally-mandated
annual video competition report two of the last six years. When
Congress tells us to do something, we need to get it done on time. We
should establish more internal deadlines, such as a nine-month deadline
for ruling on applications for review and petitions for reconsideration
along with a six-month deadline for handling waiver requests. And when
we adopt industry-wide rules, we should more frequently use sunset
clauses that require us to eventually revisit the wisdom of (and, if
necessary, revise or repeal) those rules.
Beyond reforming our rules, we should become more accountable to
the public and to Congress about how long it takes the Commission to do
its work. One way to do this would be by creating an FCC Dashboard on
our website that collects in one place key performance metrics. Let's
keep track of how many petitions for reconsideration, applications for
review, waiver requests, license renewal applications, and consumer
complaints are pending at the Commission at any given time. And let's
compare the current statistics in all these categories against those
from a year ago, from five years ago, so everyone can see if we are
headed in the right direction. If we make it easier for others to hold
us accountable for our performance, I'm confident that we would act
with more dispatch.
My emphasis on acting promptly is not just about good government.
It is also about the impact that the FCC's decisions (or lack thereof)
have on our economy. As the pace of technological change accelerates,
so too must the pace at the Commission. We can't let regulatory inertia
frustrate technological progress or deter innovation.
* * *
Congress has entrusted the Commission with important
responsibilities, from managing spectrum to facilitating deployment of
new infrastructure to overseeing the media marketplace. With a
collaborative approach among FCC Commissioners and staff and
consultation with Congress, I'm confident that the agency can discharge
these responsibilities in a way that will serve well the public
interest. Chairman Rockefeller, Ranking Member Thune, and Members of
the Committee, thank you once again for holding this hearing and
allowing me the opportunity to speak. I look forward to listening to
your views, answering your questions, and continuing to work with you
and your staff in the days ahead.
The Chairman. Thank you very much.
I will start the questioning. My first two questions,
probably my only two questions this round, will be for all
commissioners. And they are about the E-Rate.
As I mentioned in my remarks, the E-Rate program has been
tremendously successful. And I think we have to protect what we
have, and I think we have to, understanding the digitalization
of virtually everything--everything going wireless, everything
going everything--we have to be prepared for the future.
So my question to each of you--and if you would answer it
individually, and hopefully with a ``yes'' or a ``no''--if a
speech is necessary, a speech will be heard--would you commit
to working with me to protect E-Rate's accomplishments as well
as updating the program to meet the present and future needs of
our schools and libraries?
Mr. Genachowski. Yes, absolutely. I mentioned in my opening
remarks, E-Rate has been an extraordinary success. There is a
big opportunity and need around education technology, and I
look forward to working with you and the Committee.
The Chairman. Thank you, Mr. Chairman.
Mr. McDowell?
Mr. McDowell. Yes, but we must address contribution reform
first.
The Chairman. Contribution reform?
Mr. McDowell. For universal service, generally speaking.
The Chairman. OK.
Mr. McDowell. How we raise the revenue.
The Chairman. Commissioner Clyburn?
Ms. Clyburn. Anchor institutions like schools and libraries
are important to communities. E-Rate has been important to
schools and libraries, hence important to all communities. So,
yes.
The Chairman. Thank you.
Commissioner Rosenworcel?
Ms. Rosenworcel. Yes. Absolutely.
In my time at the Commission, I have been visiting
superintendents in places as far-flung as Kotzebue, Alaska, and
also Miami, Florida--places that you really can't get much more
different on on this earth. What is neat is that, together,
they consistently believe in the power of E-Rate to bring
digital learning to schools. And I think it is important that
we update it now for this new century.
The Chairman. Thank you, Commissioner.
Commissioner Pai?
Mr. Pai. Yes, Mr. Chairman.
One of the things I have been struck by is the power of a
broadband connection in a school beyond the educational
context. For example, when I visited Kansas City recently, I
visited with a school nurse who, by a video connection to the
University of Kansas Medical Center, was able to develop an on-
the-spot recommendation for a health-care plan for a child who
was feeling ill, which obviated the need for a parent to take
time off from work and travel to this school, which enabled the
child to get much quicker medical attention.
And I think we would do well to consider some of the other
benefits beyond mere learning that the E-Rate program, through
broadband connections in schools, can provide.
The Chairman. Thank you all.
My second question, again for all commissioners, hopefully
``yes'' or ``no'': When Congress authorized voluntary incentive
auctions earlier this year, we made a point of providing
funding for FirstNet. As Congress has always done, we deferred
the intricacies of action--and how happy the Commissioner is--
to the expert agency, which is the FCC.
Now, getting these auctions right and making them simple
enough to encourage sufficient broadcaster participation will
be incredibly complex, burdensome. Consistent with the law, the
FCC is free to make the policy and technical decisions it finds
are in the public interest. But I hope it cannot lose sight of
the broader national purpose of funding FirstNet. As I said
before, the success of these auctions will be judged by their
ultimate ability to provide sufficient revenue to fund
FirstNet, which is, as yet, pretty much unknown to the public,
but to those of us who know it, it is a blockbuster.
So, question number one: Do you understand the need for the
incentive auction rules to provide sufficient funding for
FirstNet?
Mr. Genachowski. Yes. Very important.
The Chairman. Thank you, sir.
Mr. McDowell. Yes. I want to make sure we don't undermine
that goal.
The Chairman. OK.
Ms. Clyburn. Yes. And I believe a market-based engagement
will give us the maximum opportunity to achieve that goal.
Ms. Rosenworcel. Yes, absolutely.
Mr. Pai. Yes.
The Chairman. Thank you.
Do you agree that acting expeditiously to commence these
auctions and avoiding unnecessary delay is important?
Mr. Genachowski. Yes.
Mr. McDowell. Yes.
Ms. Clyburn. Yes.
Ms. Rosenworcel. Yes.
Mr. Pai. Yes.
The Chairman. You see, it is wonderful being Chairman.
[Laughter.]
The Chairman. And my next question is for Chairman
Genachowski, and it is about violence, which you can't do
anything about. But my time has run out. So the estimable
Senator from South Dakota--tall, handsome, pre-Presidential--
Senator Thune.
[Laughter.]
Senator Thune. Let's move on.
[Laughter.]
Senator Thune. Mr. Chairman, the incentive auction is
really important. As I mentioned in my opening statement, we
need to figure out how to free up more spectrum to meet the
demand that is out there.
Mr. Chairman, you are closely associated with the incentive
auction part of the TV spectrum, particularly, since it was
first proposed in the National Broadband Plan. In your prepared
statement, you said the agency plans to run the auction next
year. But your term ends this summer.
What steps are you taking today to ensure the incentive
auction will be a success and will occur in a timely fashion
irrespective of who might be leading the Commission next year?
Mr. Genachowski. Well, as you mentioned--and thank you for
mentioning it--this is something, the incentive auction idea is
part of a larger strategy to free up spectrum that we have been
working on for 4 years at the Commission.
The truth can be told, we started working on implementing
the law before it was passed. And we were able to move quickly
with a comprehensive proposal in September. We have also put
out for comment the software that we would use in the repacking
piece. I think comments came in today.
So the Commission is on track to move forward with this
auction and other steps to free up spectrum for our mobile
economy.
Senator Thune. Let me ask this of any other commissioners.
Are you all optimistic that the Commission will be holding
these auctions next year?
Mr. McDowell?
Mr. McDowell. I have lived through the AWS-1 auction and
the 700 megahertz auction, and these things can take longer
than planned. There are a variety of unforeseen variables that
can pop up. For instance, with the 700 megahertz auction,
actually the potential bidders came to us and asked us for a
while to hold off.
This auction, without any hyperbole, by far is the most
complicated spectrum auction in world history. So while I have
always been a proponent of shot clocks at the FCC, just like in
basketball, I think it is important to work hard toward a goal,
but let us not be surprised if there is something unforeseen
that arises.
Senator Thune. And would anybody else like to comment on
that? And then I would also ask this question, and that would
be: What is the key challenge that you see in meeting that
timeline?
The rest of you can comment about whether or not you think
next year is a possibility or if that is overly optimistic. But
the second question would be, what is the key obstacle or the
key challenge?
Ms. Clyburn. Senator, it is a very aggressive, ambitious
timeline that I feel confident that we will meet. We have a
designated, dedicated team to that end. We have an incredibly
open process. You have a LEARN--we call it LEARN--dynamic where
broadcasters can continually get updated and ask questions.
The open engagement and the desire to achieve this market-
based dynamic is so strong that I feel confident that we will
get there. Of course, there could be unforeseen circumstances,
but all of the momentum and all of the incentives are in place
to achieve that 2014 goal.
Ms. Rosenworcel. Yes. I agree with Commissioner McDowell,
these are the most complex spectrum auctions that the world has
ever seen. But we have a terrific team in place, ready to go.
And, furthermore, I think it is important for the agency to
set deadlines, both for its incentive auctions and its
traditional commercial auctions. I think deadlines focus the
mind. They make clear to stakeholders how they should organize
their activities. And I think they encourage the formation of
capital, which is important in this case for funding FirstNet.
Mr. Pai. Senator, I agree with my colleague. And I think
that, although it is more important to get it right than to get
it done right now, nonetheless I believe, as I said when we
kicked off the implementation process last September 28, that
it is important for us to set a deadline. I don't think the
uncertainty hanging over the broadcast or the wireless industry
serves either of those industries or the American consumers
very well.
In terms of your second question, the biggest challenge, I
think there are a number of them, from international
coordination to the details the panel is hearing. But the
biggest one, to me, is ensuring that the Commission structures
the auction in such a way that both the participants in the
forward and the reverse auction have an incentive to come to
the table.
The auction is going to be a failure if we don't persuade
broadcasters that the rules are simple and compelling enough
for them to participate. The auction will be a failure if we
artificially restrict who can participate in the bidding on the
incentive auction spectrum.
So if we at the FCC keep our focus on what the Chairman
said in his opening statement--maximizing the resources for
FirstNet and making sure that this auction is a success in
terms of participation--we will be on the right track, and
hopefully we will be on the right track next year.
Senator Thune. Mr. Chairman, I have another question, but
we have a lot of people here today, so I will yield the floor
back to you and allow some others to ask questions.
The Chairman. Thank you, sir.
Senator Ayotte?
STATEMENT OF HON. KELLY AYOTTE,
U.S. SENATOR FROM NEW HAMPSHIRE
Senator Ayotte. Thank you, Mr. Chairman.
I want to thank everyone for being here today. I appreciate
the work done by the Commission.
Chairman Genachowski, I wanted to follow up on the
conversation that you and I had in my office not too long ago
about spectrum. We have already heard about the value of
spectrum and how important it is to our economy and our
communications network. But the Pentagon holds certain
spectrum. You and I talked at length about that in my office. I
wanted to follow up.
Where do you see us in terms of the Commission's
discussions with the Pentagon as to how we might commercialize
some of that Federal spectrum in an appropriate way that still
protects our national security but also allows us to use that
spectrum in an appropriate way?
I serve on the Armed Services Committee, so this would be
sort of where the two committees intersect.
Mr. Genachowski. So there are two tracks to freeing up more
government spectrum for commercial use. As I think we talked
about, the government has about 60 percent of the most
desirable spectrum. And even though military needs in the U.S.
are going up, that is more than is necessary, and a lot of it
is inefficiently allocated. So wherever we can clear and
reallocate government spectrum and make it available for
commercial, we should.
We should also move forward on a second track, which is
identifying opportunities for more sharing of government
spectrum with commercial. There is government spectrum, for
example, that is only used in certain parts of the country at
certain times. That can be made available more widely.
This is good for everyone because there is a growing gap
between military communications equipment and commercial--
growing gap as measured by price and functionality. And more
government-commercial/military-commercial spectrum sharing can
help close that gap by bringing more commercial know-how into
the military's processes.
And my discussions with senior military officials on that
are promising, I would say, and I think we are seeing the
military lean more into it. But it is something that I would
look forward to working with you and the Committee on.
Senator Ayotte. And do you think it is possible--I would
open it up for not only your comments but anyone on the
Commission--for us to free up some of the spectrum that is
currently allocated to the Pentagon in a way that would be
actually be cost beneficial to our government?
Mr. Genachowski. Yes. And, in general, that is how it has
been done. There are rules on the book that require the
measurement of the costs of moving and making sure that it, on
a cost-benefit analysis, survives. Spectrum is so valuable on
the commercial markets now--even unlicensed spectrum has
tremendous value in terms of job creation and business
creation--that this is a net win for the country.
Senator Ayotte. We are talking about the spectrum that the
government has, but we have to move beyond that to meet our
capacity. So I wanted to get your thoughts on how do we then
open up the spectrum pipeline--let's assume we can work through
the issues--to more efficiently use the government spectrum.
Mr. McDowell. Well, first of all, back to your previous
question, which is, it is absolutely true that the Federal
Government occupies the vast majority of the most valuable
spectrum. And simply spectrum-sharing is not going to meet our
nation's needs. We need to have maybe work between Congress and
the Executive Branch on forming a way to provide incentives for
the Executive Branch users of spectrum to yield it, to
surrender it, for auctions for exclusive-use licenses. That is
where there is the most value proposition. And right now it is
an opaque process which doesn't really work.
But in the meantime I think what you really need is a full
audit of all Federal spectrum that is as transparent as
possible, given all the classified uses of some spectrum. But
have that audit so we know what we are talking about, and then
determine from there. Because right now the process is far too
opaque.
Senator Ayotte. Does anyone else have anything they want to
offer on that?
Ms. Clyburn. In our traditional means of delivering
spectrum to market, auctions, our AWS auctions and the like--
all of those things, retooling and reconfiguring and
recalibrating our rules to ensure that that gets to market. It
is an all-of-the-above, as the Chairman likes to say, approach,
all-hands-on approach.
And I think you would be proud of the FCC because we are
doing that and talking about that and facilitating that through
our rules and regulations.
Senator Ayotte. Thank you.
I wanted to follow up, Commissioner McDowell, about what
you talked about with respect to what happened in Dubai. What
more can Congress do to stop this infringement on the Internet?
Mr. McDowell. I think it would be very helpful--first of
all, as I met--I know that the Chairman was there, too, and
members of your staffs were there as well--it came up very
frequently that the bipartisan, unanimous resolutions--thank
you, Senator Rubio--that were passed last year were really
heard quite clearly. I think amplifying even further, perhaps
making those resolutions the law of the land, could be very,
very helpful.
But we also need to act very quickly. We also have a power
vacuum a bit at the State Department. We have had Ambassador
Phil Rivera retire, his legendary deputy Dick Beard retire. And
I know those positions will be filled soon, but they can't be
filled soon enough. The groundwork for the 2014 basically
constitutional convention of the ITU really starts now. And
there is a big meeting in Geneva in May that will start setting
the tone for that.
So there is a lot that Congress could do.
Senator Ayotte. Thank you very much, all of you. I
appreciate what you do.
The Chairman. Thank you, Senator Ayotte.
Senator Blunt?
STATEMENT OF HON. ROY BLUNT,
U.S. SENATOR FROM MISSOURI
Senator Blunt. Thank you, Chairman.
Chairman Genachowski, on the Universal Service Fund, I
think 2011 you all initiated a rulemaking process so that that
could also be applied and--maybe be applied and/or transitioned
to broadband. Now, one of my concerns about this, I think you
will recall, has always been the failure to define
appropriately ``underserved'' as opposed to ``unserved.''
My belief is now that you decided in that rule that
``underserved'' was a current carrier that needed to upgrade,
as opposed to bringing another person in to become a
competitor? Am I right in that?
Mr. Genachowski. Two points. I am not sure. One, we did
adopt the comprehensive reform last year, and part of the
design principle was that the funding would go to unserved
areas and not to fund competitors.
Senator Blunt. Right. And then in--how do you allocate the
underserved money? Or do you allocate that money?
Mr. Genachowski. A core design principle of our reforms is
that the money should go to unserved areas and help get
broadband built out where it doesn't exist, and not fund over-
builders or----
Senator Blunt. Good, good. Well, my concern all the time
has been that.
Now, how are we doing on getting that money out? Is there
anything you can--are you in the process of further
implementing that rule or updating the amounts or what it takes
to get money out there?
Mr. Genachowski. Yes. We got a first tranche out very
quickly. It was about $140 million. And that is being used now
to build out broadband to about 400,000 unserved Americans.
We are looking now at the next step. We want to balance
moving quickly to support broadband to unserved homes and
making sure we do it in an efficient, fiscally responsible way.
Senator Blunt. And do you have a cap on the amount of money
to unserved homes?
Mr. Genachowski. Overall, we have the program now on a
budget, and so we are operating within that budget.
Senator Blunt. Now, somebody told me that there was a cap
of around $750 or $775?
Mr. Genachowski. So that is--in order to determine how much
funding goes to a particular home, we need to come up with a
number. And there was a lot of debate over that number. And in
the first tranche of funding, it was based on a $775-per-home
figure.
Some companies want more. If we spend too much, we are
wasting money. If we make it too low, then we are not reaching
everyone. And so we are now looking, having gotten that 775
money out in the first tranche, how should we handle subsequent
funding under the program.
Senator Blunt. And how do you think you should do that?
Mr. Genachowski. Well, we have a record that is open on
that. And, you know, our goal is to maximize the bang for the
buck for the program. It is on a budget. We can only spend the
money in a limited way. And we want to maximize the number of
unserved Americans who get broadband as a result of the
program.
Senator Blunt. And so you are evaluating how many homes you
get to at this level and how many you might add at some higher
level, and, at some point, whether there is a cost-benefit
analysis there?
Mr. Genachowski. That is exactly right. That is exactly
right.
Senator Blunt. On media ownership, another topic I wanted
to ask you about, I have on my tablet that is here with me, I
have three Missouri newspapers, a couple of national
newspapers, three or four other news--I suspect I have a dozen
different ways to get news right here with me.
The media ownership requirements are long before any sort
of proliferation of media like this. Where are we on updating
those requirements?
Mr. Genachowski. Well, we are in the middle of an open
proceeding. And, on one hand, as you say, the world has
changed. Newspapers certainly have come under real pressure. On
the other hand, the new news and information that you see still
isn't received by about 30 percent of Americans.
And so we are in, I think, an interim period where the
concerns about media consolidation remain important, as does
the desire to make sure that Americans, wherever they live, can
get local news and information and we continue to have vibrant
local news-gathering in the U.S.
Senator Blunt. Any additional views from anybody else on
media ownership?
Mr. McDowell?
Mr. McDowell. Senator, I think we are long overdue for
modernization of our media ownership rules. The last time the
Commission voted on an order on this was December 2007. I
thought at the time those were mild and meek.
I think the marketplace has moved past the Commission. The
investment and the eyeballs and the ad dollars are all flowing
to new media. And I think there are a lot of millstones on the
chest of traditional media as they face this competition.
Congress mandated in the 1996 act, under Section 202(h), that
we modernize these rules in the face of new competition, and it
is high time that we do that.
Senator Blunt. Mr. Pai?
Mr. Pai. Senator Blunt, if I could just add very quickly, I
associate myself with Commissioner McDowell's comments.
And I would add, as well, that one of the proposals that is
on the table, which I think properly, you know, should be off
the table, it involves the effective prohibition on joint sales
agreements and shared service agreements. Especially in smaller
markets like Joplin or Springfield, that might be the
difference between a broadcaster staying in the business and
providing local news or exiting the business.
So, for example, in your southwest corner of the state, a
joint sales agreement between Nexstar and Mission Broadcasting
allowed the broadcast station to save $3.5 million, which they
then poured in to upgrading their Doppler radar system, which
proved to be very useful in 2011 when the tornado hit.
So I think we should be very careful about the effect of
our media ownership rules, especially in smaller markets like
that.
Senator Blunt. Ms. Clyburn, Ms. Rosenworcel, either one----
Ms. Clyburn. And I agree, we should be very careful,
looking at the current markets, looking at the critical
information needs of all communities. And so when we move
toward this path--and we rightfully should every 4 years
review--if not, you know, every 4 years mandated--review our
current framework. But we need to be careful that every citizen
has a pathway to engagement--political engagement, public
safety engagement, and alike.
Ms. Rosenworcel. I think we are grappling with a lot of
different trends here. On the one hand, just as you said at the
outset, the ways that we create, distribute, and consume
content are very different than they were just a few years ago.
On the other hand, when you look at how consumers get news and
information, it is not all that different than it used to be.
The Pew Research Center has done some studies, and they
found that 74 percent of consumers still get their news from
local broadcast television stations, and the rest of them get
their news, typically, from radio stations and newspapers. In a
study they did up in Baltimore, they found that 95 percent of
originating news came from traditional news media--newspapers,
television, and radio.
So we are dealing with new and novel ways to get
information, but sometimes those who are creating the
information are the same as they used to be.
On top of that, we have a duty to respond to the Third
Circuit Court of Appeals, which criticized the FCC last time it
tried to relax these rules for not taking into consideration
the diversity of media ownership in this country.
So we are going to have to deal with all of these trends--
how everything is changing, how sometimes the origination of
news still lies with traditional medium, and how the diversity
of ownership affects the news that we get. I think we have
before us a whole bunch of issues on that, and I think every
single one of us at this table is grappling with the way
forward.
Senator Blunt. Thank you, Mr. Chairman.
The Chairman. That is it? OK.
Senator Coats, I want to apologize. I----
Senator Coats. Oh, I was just all teed up and ready to go.
The Chairman.--fingered you, and then I was handed a new
piece of paper with instructions. So I am going to call on you
shortly, but first you have to listen to Senator Pryor.
Senator Coats. I am always happy to defer to Senator Pryor.
Senator Pryor. Thank you, Mr. Chairman.
And thank you, Senator Coats.
Chairman Genachowski, let me start with a question to you
about the Connect America Fund. Certainly, you guys are working
very hard to do, I guess, a final design on the long-term
Connect America Fund. But I know that you also could, with your
discretion, do some incremental funding now.
I think we have about 400,000 Arkansans who do not have
access to rural broadband. And, yes, they say time is money,
but also time is lost opportunity.
And I am just wondering if you all are considering doing
some incremental funding now as you put the longer-term Connect
America Fund in place.
Mr. Genachowski. Senator Pryor, I want to thank you, other
members of this committee, and my colleagues for all working
together to be in a position where we can now be talking about
implementation of a Connect America Fund focused on broadband.
Four years ago, people would have said, This is impossible.
The implementation issues are challenging. This is a
similar issue to the one that Senator Blunt and I just had an
exchange on. We want to get broadband out to unserved rural
Americans as quickly as possible and do it in a way where we
are not overspending. Because if we overspend, we are taking
money away from some other rural American who would get it.
And we have been working together as a group, with an
excellent staff, on this. And we are diligently working to get
this implemented quickly and consistent with our principles.
Senator Pryor. Thank you.
Commissioner Clyburn, let me ask you about the 21st Century
Video Accessibility Act. It appears that the FCC, the device
industry, and the disability community are all working closely
to try to come out with the right set of smart rules. Do you
know the timeline, when those rules might be completed?
Ms. Clyburn. There are a number of things--there is a good
story to tell with that legislation, which is the most
significant piece of legislation for those people with
disabilities since the act in the 1970s.
So what is happening is this incredible desire to connect
all communities, this incredible desire to ensure that
programming is accessible to all. So we have a lot of things
that are going on, particularly as it relates to emergency
services, next-generation 911. All of these things are on the
table and are being discussed.
The text-to-911 is important. You know, how do those with
disabilities, you know, how do they find out what is going on
around them? So we have a series of timelines that you will
hear about during the course of the year that will bridge those
gaps, in terms of crawls, television programming, ensuring that
you have an audible means of knowing, if you are sight-
impaired.
All of those things are going into place; some significant
deadlines that are being met this year. This is a great year
for this act, and it is going to bridge some incredible gaps
with those with sight and hearing disabilities. And you should
be proud. With IP captioning coming up--it is just the sky is
the limit. It is just wonderful.
And in terms of implementation of CVAA, we have not missed
one deadline. There has been a cooperative relationship. There
has been--equipment manufacturers and the like. We are bridging
incredible divides, and the communities are really--they are
elated over what we have done.
Senator Pryor. Great.
Commissioner Rosenworcel, you notice I didn't ask you about
that because you know more about it than I do, and I thought
you might embarrass me with your answer.
[Laughter.]
Senator Pryor. But let me really change gears because I
know that you really basically helped write that legislation,
and we appreciate it. It has been a good success story. But let
me change gears on you, if I can, and ask you about public
safety in wireless and IP-based networks.
I know that if we look at Superstorm Sandy, I hear that
right after the storm about one in four cell towers were out of
commission. And, you know, that is complicated because a lot of
these are independently powered.
But my question for you is, what can Congress do, what can
the Commission do to make sure that we address these problems
as we go forward?
Ms. Rosenworcel. Well, as you suggest, Superstorm Sandy
wreaked havoc on our communications systems. And it is hard to
forget the images that we all saw--the floods, the fires at the
shore, and some of the impossibly large snowdrifts out west.
I think that it demonstrated a few things to us. First, as
the Nation transitions to IP and wireless networks, we need to
have a conversation about commercial power. Our old copper
plant in this country had an independent electrical source, so
when unthinkable weather occurred, you could pick up the phone
and call for help. But now our wireless and IP networks are
dependent on commercial power, and when commercial power goes
out, they don't work. A lot of people realized that in
Superstorm Sandy. And, as you said, one in four of our wireless
towers in the affected region was out during the storm.
So I think now, as we make this transition to new wireless
and IP networks, this is the right time to have a national
conversation about what it means when all of our communications
relies on commercial power. We have to identify how providers
get access to fuel, how they have generators, how they have
backup power. And we also have to talk to consumers about this
so that they have solar chargers and backup power for their own
handheld devices, as well.
Senator Pryor. Mr. Chairman, thank you. That is all I have.
I am going to ask Chairman Genachowski for the record about
cybersecurity and the things that they have done at FCC and
what recommendations they may have to Congress on what we
should be doing on cybersecurity. But I will submit that for
the record.
Thank you.
The Chairman. Thank you, Senator Pryor.
And, Senator--no, Dan. I want to do it, but I can't.
Senator Wicker, subcommittee ranking?
Senator Coats. All right. I apologize. I do have something
I just have to go to. But I will be glad to pick it up at
another time. And I understand. No, I----
The Chairman. Wait, wait, wait.
Senator Wicker. Please go ahead.
The Chairman. See, he is yielding.
Senator Coats. No, I----
The Chairman. Dan, charge.
STATEMENT OF HON. DAN COATS,
U.S. SENATOR FROM INDIANA
Senator Coats. Roger, I will tell you what. I will be very
brief, and then I will yield you the balance of my time, and
you can do 7\1/2\ minutes. I appreciate that. I have a----
Senator Wicker. The clock is ticking.
[Laughter.]
Senator Coats. Mr. Chairman, thank you. It is good to be on
your committee and to serve with you and Senator Thune.
And in another life, I served on the Energy and Commerce
Committee in the House of Representatives, a long time ago,
under John Dingell. And while I guess, as a Republican, I would
prefer to be serving under Chairman Thune, I had a good
experience with Congressman Dingell, and I know I will have a
good experience with you----
The Chairman. Thank you.
Senator Coats--in your last 2 years here. And it is a
privilege to serve with you.
Back then--this was in the 1980s, my 8 years on Energy and
Commerce--the competition and innovation was occurring so
fast--at least I thought it was fast--that we had a tough--the
process of legislating and regulating could hardly keep up with
the change. We are light years ahead of where that was 30 years
ago. And today it is mind-boggling how quickly it changes.
And so I guess my question is, how do we begin to, through
the legislative process and regulatory process, keep up with
this innovation? I mean, we are passing laws and regulations
that are out of date before they even get enacted.
And my question is this: Looking back over your tenure and
reflecting on it, do you have any suggestions or things you
want to leave with us relative to, Boy, if we had known that or
could have done that faster, this would have kept us up to
speed? Is there any advice relative to barriers to regulation
or the process in which it was played out that you would, upon
reflection, want to change?
Mr. Genachowski. It is a great question. And, you know, one
of the things that I think, working together, we have gotten
right is that we focused on some of the enduring principles in
this space that remain consistent even as technology changes.
You know, one is: Make sure that we have infrastructure to
support the new economy. The second is principles like
universal service and competition and public safety.
And I think that keeping ourselves focused on that, that
has led us to ideas like we have to free up spectrum in
creative ways, and it led this committee to pushing through
incentive auction legislation on a bipartisan basis. It led to
reform of the Universal Service Fund.
And so I think working together on those issues--they were
largely bipartisan when you were in the House; they should
remain so--is a strategy that has worked and I think can
continue to work.
Senator Coats. Thank you.
Mr. Chairman, I yield the balance of my time, if it sits
with the chair, to my colleague from----
The Chairman. He gets the balance of your time and all his
time.
Senator Coats. No, no. It is the other way around.
[Laughter.]
Senator Coats. I made him a deal, and I want to stick with
it.
The Chairman. All right.
Senator Coats. Thank you.
Senator Wicker. The ways of the Committee are complex, but
I am glad to be talking.
Mr. Pai, it is generally acknowledged that modernization of
the 21-year-old 1992 Cable Act is a major undertaking that will
take some time and take some doing. You made a speech the other
day saying that there are some things the Commission can do to
provide relief in the interim for folks like cable services and
multichannel video programming distributors through the use of
expanding and extending the FCC's forbearance authority.
Are you making any progress with the other four members on
this? And do you think it also makes sense to expand the
biennial review in the same vein?
Mr. Pai. Well, Senator, thank you for the question. I
certainly would welcome the support of my colleagues. It is a
very recent proposal, though, so I haven't had a chance to
pitch it to them. But I will put the hard sell on as soon as I
can.
Senator Wicker. Surely they read your speech, though.
Mr. Pai. I apologize to them in advance if they did, if
they had to slog through that speech.
But I think one of the fundamental changes that we have
seen in the communications landscape involves the video
marketplace. It has changed so much from when I was a kid and
we had three channels and my dad would direct me to, you know,
put the rabbit ears just so so we could get reception. Now we
can receive on any number of devices high-definition
programming when we want it. And so I think one of the central
problems that we confront as regulators is that our rules
simply haven't kept up the pace with the changes in the video
marketplace.
And I think of the telecom sector as providing a useful
example of how we could operate in the video context. Section
10 of the Communications Act, as you know, allows the FCC to
forbear from the enforcement of a statute or regulation if it
determines that such enforcement is no longer necessary to
protect competition or to promote the public interest.
It seems to me that it would be valuable for the FCC to
have similar authority with respect to Title VI, the video
context. That would allow us to do what we have done on the
telecom side, to relieve wireline providers who are trying to
reach underserved, unserved, and in some cases even served
Americans with better, faster, and cheaper telecom services.
And I think if we did have that forbearance authority, it
would allow the Commission to be a little more flexible in
terms of its application of the statute, because right now we
don't have that flexibility.
And the 1992 Cable Act, as you pointed out, captured a
snapshot of the market at a moment in time that no longer
really applies. Your cable operators, for example, had a 95
percent market share 21 years ago. That has gone below 60
percent now. Over-the-top distribution was unheard of even, you
know, 10 to 15 years ago, and now you have people who are
running Internet-only channels, reaching millions and millions
of people.
So if the Congress saw fit to give us forbearance
authority, I think it would be very valuable and would allow us
to really update our regulation.
Senator Wicker. But we would have to give you that
authority?
Mr. Pai. That is correct, yes.
Senator Wicker. And what about this biennial review
question?
Mr. Pai. So I have been promoting a more robust vision of
what biennial review could be, and that is the full commission
voted, which we would comprehensively review all of our
regulations and, especially in the video context, determine
whether any of them needed to be repealed or revised to meet
the needs of the modern marketplace.
And that is something that we could do--we are mandated to
do it regularly by Congress. And I think if we spent more time
as a commission really doing that, I think we could update our
rules appropriately.
Senator Wicker. Commissioner Rosenworcel, that sounds like
a really good idea, don't you think?
Ms. Rosenworcel. Well, let me start by saying, 1992 was a
long time ago. I had a dot matrix printer, I certainly didn't
have a cell phone, and I never would have imagined that I could
watch video on a tablet in my lap. So I will agree with you
that the law is old.
At the same time, I think there are some virtues in that
law that still are important to us. I think the law speaks to
competition. I think it speaks to making sure everyone can have
local content, including local news. And I think it speaks to
the diversity of ownership and programming as being an
important issue.
So I think there are still some enduring values in the law
that matter to us and we can still apply. But I would agree
with my colleague, Commissioner Pai, that we can regularly
scour our rules and try to identify those that have outlived
their usefulness. And while we may not agree on every single
rule we should get rid of, I think the process and doing that
regularly is a good exercise and something that the Commission
should do.
Senator Wicker. Did you read Commissioner Pai's speech?
[Laughter.]
Ms. Rosenworcel. I slogged through all nine pages of it.
[Laughter.]
Senator Wicker. So what about, then, specifically----
Mr. Pai. Tough crowd.
Senator Wicker.--working with us on a simpler solution,
putting off cable reauthorization until another Congress, but
helping cable services and MVPDs presently?
Ms. Rosenworcel. Well, the thing that I know about cable
and satellite services now is that their rates go up year-in
and year-out. And both as a consumer and as someone who sits in
a regulatory position, I think that is a problem, and I think
it is something that merits a fresh look.
Senator Wicker. Well, if I had time, I would ask the chair
what he thinks of that.
Mr. Genachowski. I think that continuing to look at our
rules, working with the Committee on the best processes to do
that, remains vital.
Over the last few years, we have not only done reviews, but
we have done major actions to remove barriers. The elimination
of intercarrier compensation could be the single largest
elimination of a set of rules that the FCC has done in a very,
very long time--removing barriers to broadband build-out,
things like tower siting, shot clocks.
So I agree with Commissioner Pai that we should think about
how to continue to do this, and I agree with Commissioner
Rosenworcel that there are enduring values in the
Communications Act and issues that we need to continue to focus
on.
The nature of the sector now--and we heard it in the
opening statements from both Ranking Member Thune and from
Senator Pryor and from Chairman Rockefeller--this is a sector
that is thriving, that is growing, where the opportunities are
getting larger, as are the challenges. And so staying current
with the obstacles and barriers to ongoing private investment
in innovation is absolutely essential, and we still have a lot
of work to do.
Senator Wicker. Thank you very much.
Thank you, Mr. Chairman.
The Chairman. Thank you very much.
And now, Senator Fischer.
STATEMENT OF HON. DEB FISCHER,
U.S. SENATOR FROM NEBRASKA
Senator Fischer. Thank you, Chairman Rockefeller and
Ranking Member Thune.
And thank you to all the Commissioners for being here
today.
If I could follow up, please, Commissioner Rosenworcel, you
spoke about the Communications Act, and I believe you said
that, in that, it guarantees local contact and local news. Is
that part of that?
Ms. Rosenworcel. Well, I think that is an important element
of authorizing and creating local broadcast channels so that
they have a duty under the law to serve their community of
license, and that duty includes things like providing local
news and local content.
Senator Fischer. And how are those licenses decided upon?
I live in Nebraska, and I am sure you have heard from some
of my constituents in the Sandhills of Nebraska because we are
unable to get what we consider local news, which would be
Nebraska news. We receive South Dakota news, and we do love
South Dakota, Senator Thune, but----
[Laughter.]
Senator Fischer. And also in the western part of the
state--so we keep up with you, by the way.
But in the western part of the state, my constituents there
receive Colorado news if they go off the satellite. How do we
change that so that we can change those licenses in order to
truly receive local news and local content? We can't even get
local weather, which I believe is a right that communities
should have.
Ms. Rosenworcel. I am sympathetic to the situation you just
described. At the outset, most of that is a function of Nielsen
markets. We have 210 of them in this country, and they chop up
and divide the country into different television and media
markets in ways that are often rational but not always. We have
orphan counties like the ones you are describing that might get
their news from another location.
I would point out to you that in the upcoming renewal of
the Satellite Television Extension and Localism Act, as a
Senator you have an opportunity to speak to this issue. And I
would certainly encourage you to do that. I think it is a piece
of legislation that gives you an opportunity to talk about this
in more detail. And I think you will find that some of your
colleagues also have the same situation, where they have orphan
counties and they can't get news from their local statehouse or
their local weather.
Senator Fischer. Correct. Thank you. Thank you for you that
information.
Commissioner Pai, as you know, rural broadband deployment
is one of the engines for economic development in many states,
and especially in a state like Nebraska. And I have heard
varying reports about the impact of the 2011 transformation
order and what that impact is on my rural communities.
You recently stated--maybe this was in another presentation
you gave; I didn't read the whole thing, though. But you
recently stated that ``the changes in the Federal universal
service programs have caused unpredictability in funding, and
it appears the investment environment has cooled as a result,
impeding the deployment of next-generation technologies and
broadband services to rural Americans.''
I share those concerns. What actions do you recommend that
the FCC could take to ensure that these areas are going to be
served in a predictable and a stable manner?
Mr. Pai. Well, first, I want to commend my more senior
colleagues for the effort they put forth in adopting these
reforms in 2011. I think as the chairman said, it was not an
easy task to reform the rules, which were in need of reform.
But I applaud them for having the political will to do it.
With respect to some of the reforms on the high-cost
program that you mentioned, I have expressed a number of
concerns about the effect of the unpredictability of the
rules--so, for example, the quantile regression analysis the
Commission has adopted. I have supported some of the more
recent reforms that the Commission has adopted to, for example,
combine capital expenditures and operating expenditures to make
it more understandable for rural carriers where the threshold
for a cutoff will be.
But I think there are other ways the Commission could live
up to the statutory command of predictability. I have outlined
a number of them in the comments that you noted.
But I think, by and large, what we have to do is really
listen to the concerns of rural carriers about what their
planning process is, because a lot of their investments are not
made every 6 months or 1 year or 2 years. These are long-term
investments in broadband in rural communities. And so if the
Commission is effectively applying the QRA, or benchmarks,
every single year, more frequently than these carriers were
planning, then it is going to be virtually impossible for them
to make informed decisions without getting penalized for it.
Senator Fischer. Thank you.
Did anyone wish to add to that?
Mr. McDowell. I think it is important to note that this was
the first Federal entitlement reform enacted in a generation;
that the rate of return--carriers before the reform were
receiving $2 billion a year. After the reform, they are
receiving $2 billion a year. Not each carrier is receiving the
same amount; some are receiving less, some are receiving more.
But this was a bipartisan, unanimous vote along a three-to-
one party divide. And I think it is notable that we have said
all along that it is an iterative process, and, as compelling
facts come our way, we can make midcourse corrections. But I
think it is important to adhere to the strict budget that we
put in place. And I think that is going to be best.
You know, no company we regulate should be guaranteed that
it is going to have a certain income level based on a subsidy.
And I think that is important for all of us to remember.
Senator Fischer. Thank you very much.
Thank you, Mr. Chairman.
The Chairman. Thank you very much, Senator Fischer.
Senator Heller?
STATEMENT OF HON. DEAN HELLER,
U.S. SENATOR FROM NEVADA
Senator Heller. Mr. Chairman, thank you, and to the Ranking
Member also, thank you for holding this particular hearing.
I want to thank the panel, also, for taking time, being
here today, and answering our questions. But before I ask a
question, I would like to touch on a couple of points.
Commissioners McDowell and Pai have been discussing FCC
regulations and whether they make sense in today's world. I
agree with them that we regulate telecommunications in silos,
when the world we live in today is becoming more interconnected
each day.
And I also agree with Senator Wicker, believe it or not--
actually, we always agree. But we need to have a strong
discussion here in this committee, this Senate committee,
regarding the 1992 Cable Act and the 1996 Telecommunications
Act and whether those laws are promoting or hindering
innovation, investments in infrastructure, and broadband
adoption.
I also want to mention that I was visited recently by the
Nevada broadcasters and our PBS stations. I would like to
convey to the Commission their concern regarding the spectrum
auction. In Nevada we have over 300 translators and low-power
television stations, and I hope you will keep that in mind as
you move forward next year in completion of this auction.
But I would like to bring to attention the bipartisan FCC
reform measure, a reform measure, the FCC Consolidated Reports
Act I introduced last year. The bill identifies 16 reports
required of the FCC that could be eliminated, 8 separate
reports that could be combined in a single report and produced
to the Congress at a specific time. This particular piece of
legislation passed with bipartisan support in the House.
Last year, I asked all of you your thoughts on this
measure. Four commissioners who answered did not have
significant issues at all with this bill. Commissioner McDowell
said that Congress and the FCC would benefit.
So to you, Mr. Chairman, I do believe that this is a good
government bill. And Commissioners McDowell and Pai both agreed
that it would benefit Congress and the FCC. Would you agree
with that?
Mr. Genachowski. Well, I have survived, in part, by not
endorsing specific legislation in my time here, but the ideas
of reform are something that we are happy to work with you on
and the Committee on.
Certainly, consolidating reports is something that we would
appreciate. We have been trying to do some of that on our own.
So I do think that working with the Committee to continue to
reform our processes is a very healthy thing.
Senator Heller. Commissioner McDowell, do you have any
comments?
Mr. McDowell. Absolutely. I think there are some very
meritorious ideas in that legislation, as you have heard me say
before.
And I also would hope that in the coming months and years
this committee would seriously consider the seemingly daunting
task of a comprehensive statutory rewrite to erase those silos,
to look at all of these services and technologies through the
lens of consumers, like my children, who don't care if it comes
through twisted copper pair or wireless in one way or a
broadcast which is wireless in another way or a coaxial cable
or fiber. Let's look at how are consumers potentially
benefiting and also harmed and if there are concentrations and
abuses of market power.
That is a daunting task, but I think if we all work
together, it doesn't have to be partisan, it could be
unanimous.
Senator Heller. Thank you, Commissioner.
Commissioner Pai, thank you for your recent visit. Do you
have any comments on this?
Mr. Pai. I do think that the Consolidated Reporting Act
would go a long way to streamlining the efforts that the
Commission has to expend in order to report back to Congress. I
think it would also do Congress a much better service because
you would get in one place a comprehensive snapshot of exactly
what is going on in the marketplace.
Let me add, as well, that the endeavor to reform our
processes from a legislative standpoint shouldn't operate to
the exclusion of what we at the Commission can do ourselves to
keep the trains running on time. So, in a number of the
proposals I put forward, which I don't believe are politically
beneficial to anybody but are just a matter of good government,
involved setting deadlines, employing more sunset clauses, you
know, creating a dashboard where the public can monitor exactly
how the Commission is performing with respect to key
performance metrics, like the number of petitions for
reconsideration that are pending, how long it takes us to issue
license renewals, and those kinds of things.
All of which speak to the value of accountability. I think
too often what we have heard over the last number of years, not
limited to any particular agency in terms of political
leadership, is that the Commission doesn't necessarily respond
as quickly to the industry as the industry is moving on its
own. And so I think that is one of the things--I know my
colleagues agree with it. As we move into the 21st century,
deeper into the 21st century, we need to make sure that we are
acting at the same pace as the private sector.
Senator Heller. Thank you, Commissioner.
And I am running out of time. Mr. Chairman, I plan on
introducing, reintroducing, the FCC Consolidated Reporting Act
this year. Certainly hope to get the support of the Committee.
Thank you very much.
The Chairman. Thank you very much, Senator Heller.
And let me just, for the convenience or misery of Members,
Senator Warner will be next, Senator Klobuchar, Senator Schatz,
Senator Rubio, Senator Cowan, Senator Blumenthal, some guy
named Senator Nelson, Senator Begich, and Senator Cruz. So show
your love for the Committee.
Senator Warner?
STATEMENT OF HON. MARK WARNER,
U.S. SENATOR FROM VIRGINIA
Senator Warner. Thank you, Mr. Chairman.
And it is great to see all the Commission members here.
You know, one of the things that Senator Wicker and I, and
Senator Snowe before that, worked on at some length was trying
to make sure we just have a good inventory of spectrum. And I
know the Commission has been generally supportive of this. We
have to get our other colleagues in the Federal Government,
particularly on the DOD and intel side, to help you get there
on that. Because some of the most valuable commodities we have,
we don't have good information about how not only private
sector but much of the public sector is using the existing
spectrum.
Related to that, of course, as spectrum gets more and more
valuable--and as somebody who benefited from that increase in
value in a prior life--we have to make sure we get as much
utilization as possible. I want to talk a little bit about
interoperability. And maybe I will start with the Chairman, but
any other Commissioner who would like to mention this.
I understand that as we look at all of the new technologies
coming on, particularly, obviously, in the wireless space, you
know, if you would like to comment on how you are looking at
the whole question of receiver standards and whether this is
going to be a mandatory system, or now are we looking at
potentially a voluntary buy-in.
Because we are continuing to see new opportunities--I think
about auto industries and others who want to think about
smarter cars as well as smarter phones. Yet there is a constant
question here about interference issues, which, obviously, has
hit a couple of your other actions in the past.
So, Mr. Chairman, do you want to start on that?
Mr. Genachowski. Sure. You know, there was a time when
people thought that spectrum wasn't scarce anymore and we had
all we would ever need and there were no issues. Now, of
course, we know that the opposite is the case and we have some
real challenges on freeing up more and more spectrum.
Part of what we have learned as we have done it is that,
where we have spectrum that is being inefficiently used,
sometimes because of restrictions like satellite restrictions,
we will see receivers come on the market that get interfered
with as we remove unnecessary restrictions. And we have to
tackle that. We are running a process at the Commission to
determine the best was to do that. I know the Committee is
looking at it. But we need to alter the incentive structure so
that we don't see that kind of issue.
Senator Warner. Anyone else want to make a comment on that?
Mr. McDowell. I would actually adopt by reference
everything the Chairman just said. And receiver standards are
very important. We hope that there could be a private-sector
consensus here, so let's push toward that.
It should be part of an overall goal, though, to increase
spectral efficiency, because even if we could identify all the
500 megahertz that the National Broadband Plan calls for to
bring to auction or to bring to market, that is going to take
the better part of a decade to actually get into the hands of
consumers. So what do we do in the meantime? We have to adopt
policies that promote spectral efficiency in a variety of ways.
But, also, one thing we should avoid with the upcoming
incentive auction is making it too complex, too complicated.
Having been a veteran of the 700-megahertz auction, my first
dissent was cast on the encumbrance on the C Block. That
encumbrance, among other unforeseen circumstances, probably
resulted in an interoperability problem which we now face, and
it is a Gordian knot that we have to untangle. So let's be
very, very careful of trying to make these things too
complicated and trying to out-guess the market, because we
can't.
Senator Warner. Anyone else want to make a comment?
Ms. Clyburn. Speaking of interoperability in general, one
thing that comes to mind that I have been talking about a lot
is the lower 700 megahertz, where there are issues as it
relates to interoperability.
There has been engagement for almost a year. I am still
hopeful for a voluntary solution. But the FCC, in its history,
has either mandated or encouraged an interoperability across-
the-board rule. And urban areas alike benefit from it. And so,
where we can, we should either mandate or encourage strongly
voluntary engagement.
Senator Warner. I agree with the voluntary component,
although I know in the past it has not always been successful.
And, you know, at the end of the day, pushing out new
technologies, we are going to need to use all the spectrum we
can.
I know my time is running down. I just am concerned, as
well--I have a whole series of questions I will submit for the
record, Mr. Chairman--but there seems to be a bit of
backsliding on USF reform.
And I just believe that this is a knotty problem. This is
obviously a change of technologies. But if we are going to get
the kind of rural broadband deployment that I think many of us
want to see, this is going to have to be a component.
If you want to comment?
Mr. Genachowski. I just--on that, what I heard you say is
that there shouldn't be any backsliding.
Senator Warner. Yes, that is right. I think that----
Mr. Genachowski. And I completely agree.
Senator Warner. My time has gone up. I just want to also
echo comments I think some of my other colleagues have made.
And I know it opens up an enormous can of worms, but with the
marketplace and technology moving so quickly, at some point a
broader-based looking at reworking of the whole Telecom Act I
think ought to be the subject of this Committee, at least
starting down that path. It may not happen overnight, but
great, great potential.
So I thank the Chairman and thank the Commission members
for being here.
The Chairman. Thank you, Senator Warner.
Senator Klobuchar?
STATEMENT OF HON. AMY KLOBUCHAR,
U.S. SENATOR FROM MINNESOTA
Senator Klobuchar. Thank you very much, Mr. Chairman.
Thank you, Commissioners. Thank you to the Commissioners
who came to Minnesota in the last year or so, including the
Chairman and Commissioner Rosenworcel as well as Commissioner
Clyburn. And you are invited as well, Commissioner McDowell and
Commissioner Pai, thank you so much for your work.
I want to start with unlocking. I appreciate the leadership
the FCC is taking on this issue. I have introduced the Wireless
Consumer Choice Act with Senator Lee and Senator Blumenthal and
we are taking this very seriously. We think this is a great
opportunity to open this up for competition.
I think you know that there has been a lot of outrage over
the recent decision by the Library of Congress--not a common
foil for people, but----
[Laughter.]
Senator Klobuchar.--the recent decision that creates
uncertainty for consumers who want to unlock their phones from
one network to switch to another.
And, again, I see this as an opportunity. And I wondered, I
guess, Mr. Chairman, if you would commit to work with us on
this bill to address any concerns and to take action. And do
you agree that unlocking is an impediment for consumers
choosing to switch carriers and, therefore, is a barrier to
competition?
Mr. Genachowski. I do. I think that decision from the
Library of Congress raised real competition and innovation
concerns. I was happy to see the legislation introduced, and
thank you for your leadership.
And it appears to be a bipartisan issue. We need to address
it because, right now, there are criminal penalties for someone
who gets a new phone and unlocks it. Doesn't make sense.
Senator Klobuchar. No, it doesn't.
Anyone want to add anything more?
Mr. McDowell. I think it is important to get past the
headlines a little bit on this issue. And while we need to
quickly dispel this image of consumers being hauled off in
handcuffs if they try to unlock their cell phone----
Senator Klobuchar. Without their phones, it would have to
be.
Mr. McDowell. With or without their phones, exactly--that
we also need to understand that we need to protect intellectual
property rights. And there is contract law, which your bill
speaks to, that can convey and give consumers lots of options
and lots of freedom here. So let's make sure we are not
undermining intellectual property rights and that we are also
preserving the right to contract.
Senator Klobuchar. Yes.
Ms. Clyburn. I agree with my colleagues. And, also,
affordability is a factor, and environmental factors. You know,
if you have to make all of these changes every time you--if you
have an option to change providers, you know, that is not good
for the environment too. So all of those things go into play.
And thank you so much for introducing that.
Senator Klobuchar. Yes.
Ms. Rosenworcel. I agree. Would be happy to help, whether
that is through the FCC or through updating the Digital
Millennium Copyright Act. I think the most stunning thing,
though, is to find out about the great power of the Librarian
of Congress.
[Laughter.]
Senator Klobuchar. Exactly. I thought the same thing.
And, as you reference, Senator Leahy has a bill that I know
Senator Lee and I are also on. And I think it is a different
approach and we can somehow combine them. We will all work
together.
But I do think it is important, Mr. Chairman, for this
committee, with its jurisdiction over telecommunications, to be
involved in this decision. And that is one of the reasons we
introduced the bill this way.
Yes?
Mr. Pai. Well, I would add that contract law, in my view,
rather than criminal law or copyright law, I think should
govern the relationship between a wireless consumer and the
wireless provider.
And so, to that end, I would be more than happy to work
with you, whether it is an exemption to the DMCA that allows
consumers to unlock their phone or another measure. We stand
ready to aid in your legislative mission.
Senator Klobuchar. Thank you very much.
I read good news today. The FCC is taking the issue
seriously about call completion, with the consent decree, with
Level 3 Communications. Thank you very much.
Could you discuss, Mr. Chairman, what this consent
agreement with Level 3 means for the industry? As you know, we
have had huge problems with call completion in rural areas in
my state and in others.
Mr. Genachowski. I think it sends a clear message that it
is not acceptable, that we will take seriously any instances
that we find of failure to complete calls. We will continue to
investigate reports, and if it is necessary to have more
enforcement actions, that is what we will do.
Senator Klobuchar. OK.
Another question. I understand the FCC has an open
proceeding considering the legal and policy consequences of
expanding or redefining what a multichannel video programming
distributor is, known as a MVPD. What have you found so far?
Would altering the definition promote competition and bring
prices for video services down for consumers?
We have had some issues come up in some of our suburban
areas about the price of cable and also transparency for
wireless service disclosure.
Mr. Genachowski. Well, we haven't reached any decisions in
that proceeding. I am, I think we all are, concerned about
rising prices to consumers and the need to keep on pushing
competition policies in this area.
Senator Klobuchar. Thank you.
And I will follow up more on that so I can let my
colleagues go on. But I just will put some questions in the
record, Commissioner Rosenworcel especially, on metal theft and
copper telecom wires--a growing problem. Senator Graham and I
have a bill that Senators Schumer and Hoeven have cosponsored,
and I appreciate your interest in that. And we will put some
other questions in the record, as well.
Thank you.
The Chairman. Thank you, Senator Klobuchar.
Senator Rubio?
STATEMENT OF HON. MARCO RUBIO,
U.S. SENATOR FROM FLORIDA
Senator Rubio. Thank you, Mr. Chairman.
First, thank you all for serving on this Commission. It is
an exciting time to be there with all these things happening.
I apologize. And I may not use all my time of questioning.
I have a 4:30 appointment to unlock my phone.
[Laughter.]
Ms. Rosenworcel. Are you going to need a lawyer for that?
Senator Rubio. At 4:40, I have to go see the Librarian of
Congress.
[Laughter.]
Senator Rubio. Anyway, I will start with Commissioner
McDowell because you were so involved in the Internet freedom
debate that took place.
Here is my question. I am interested in working on
legislation with others that would declare the policy of the
United States is to promote a global Internet free from
Government control and maintain the current multistakeholder
governance.
So I am not asking you to endorse legislation, although
feel free to do so, any of you. But I would ask you, do you
think that sort of statement from Congress would be something
that is helpful in regards to the position of the United States
in these international bodies and beyond?
Mr. McDowell. First of all, thank you for your leadership
on this issue. And many thanks to every Member of the Senate
for unanimously supporting that resolution last year.
And the short answer is, yes, that would be tremendously
helpful.
Senator Rubio. Great. Good.
Did we get that on tape?
[Laughter.]
Mr. McDowell. I am sure. Yes.
Senator Rubio. All right, I have a second question about
spectrum. And the way I would explain this to people back home
and across the country when they have asked me about it is, we
often hear a lot of conversation about roads and how important
roads are to economic development. You have to be able to get
your products from entry point to the end-use customer. And
spectrum is very similar to that, in my mind. In fact, it is
identical to that, on a different level of course. The spectrum
capacity is what allows people to quickly get information on
tablets or cell phones. It actually would give us a cutting
edge.
I have been concerned, of course, about staying on the
competitive edge. And we have heard differing reports about
where we are in comparison to the rest of the world in terms of
our capabilities now and moving forward. And it seems to me--
and I may be wrong, and if I am, I want you to point this out--
that in the wireless industry, the demand for wireless
broadband might outstrip our ability to provide the supply.
So my question is, would it be helpful if Congress
authorized multiple spectrum auctions, maybe staggered over a
period of time, just to ensure that you have a pipeline of
spectrum entering the marketplace in a steady and predictable
manner? Is that something that you all think might be helpful?
Mr. Genachowski. Senator, I think your thinking about
spectrum as infrastructure is exactly right. And one of the
challenges that we all face is it is invisible infrastructure,
and so it can be hard sometimes to generate the action that we
need. It is why this committee's action on incentive auction
legislation was so important.
You are right to identify the supply demand issue, I think.
The real issue is getting more supply of spectrum to auction.
And so the issues that, for example, Senator Ayotte raised
about how do we get more spectrum from Government use would be
helpful. And I think we can hold an auction anytime, but we
need the supply of spectrum in order to auction. And that is
something that I would look forward to working with you on
together.
Mr. McDowell. Yes, he is absolutely right. So Federal
spectrum has got to be a priority, getting the Federal
Government to liberate spectrum for private-sector use through
exclusive-use licenses rather than sharing.
Ms. Clyburn. And you, of course, can provide the incentives
that might be needed by the Federal holders of spectrum. And I
look forward to working with you on that.
Ms. Rosenworcel. You are absolutely right. The broadband
beneath us and the airwaves all around us are the roads, ports,
and canals of the 21st century. The challenge is just as you
suggested: making sure we have enough spectrum in the pipeline
to meet the demand of that infrastructure.
I think what we are going to have to do, moving ahead,
though, is identify ways to make sure that our Federal users of
spectrum are rewarded when they use it efficiently. If they use
it efficiently, they should see some gain, whether that is
through appropriations or budgeting or some other system. And
if they use it efficiently, it will return more spectrum for
commercial use and we will have more in the pipeline, which
will help grow the wireless economy.
Mr. Pai. And, Senator, I agree with her characterization of
the problem in terms of more intensive spectrum use. The
devices we are using today are, in some cases, 128 times more
data-intensive than the simple cell phone was 15 years ago. So
there is clearly a need on the consumer side.
In terms of Federal spectrum, one of the processes that is
established now under the CSEA, as modified by the legislation
last year, involves a notification and auction process. And as
I outlined it in my testimony, I won't belabor it here for too
long, but that is an established process by which the FCC would
notify the NTIA about Federal spectrum that could be repurposed
for commercial use.
And if we adopt that process and invoke it in a very robust
way, that would be fair and flexible for everybody--for Federal
users, for the FCC, and for the private sector. And I hope we
use it more often.
Senator Rubio. Thank you.
The Chairman. Thank you, Senator.
Senator Blumenthal?
STATEMENT OF HON. RICHARD BLUMENTHAL,
U.S. SENATOR FROM CONNECTICUT
Senator Blumenthal. Thank you, Mr. Chairman. Thank you for
holding this hearing.
And I want to thank my colleague, Senator Klobuchar, for
her leadership, as well, on the unlocking bill, which I have
been very glad and proud to cosponsor.
Let me ask just very quickly, the merger, proposed merger,
involving T-Mobile and MetroPCS, Chairman Genachowski, has that
been approved?
Mr. Genachowski. It has been approved.
Senator Blumenthal. When?
Mr. Genachowski. Today.
Senator Blumenthal. So this information was released at
what point today?
Mr. Genachowski. I don't remember the time that it was
released.
Senator Blumenthal. But just----
Mr. Genachowski. Earlier today.
Senator Blumenthal.--hours in advance of this hearing.
Mr. Genachowski. Yes.
Senator Blumenthal. And let me ask you, was it approved at
the Bureau level or the Commission level?
Mr. Genachowski. The Bureau level.
Senator Blumenthal. And can you tell the Committee, this is
a deal involving 40 million subscribers, billions of dollars.
Are you aware of any transaction of similar size that has been
approved at the Bureau level rather than being circulated for a
vote by the Commission?
Mr. Genachowski. There have been large transactions----
Senator Blumenthal. As large as this one?
Mr. Genachowski. Same order of----
Senator Blumenthal. My information is that none of this
size, in terms of dollars and impact on consumers, has ever
been approved by the Bureau as opposed to by the Commission.
Mr. Genachowski. This may be the largest. The Global
Crossing transaction was very large. There was a major radio
transaction.
Where there are no petitions to deny, no issues of
Commission policy, these are typically done at the Bureau
level. And this was consistent with the precedent in the area.
Senator Blumenthal. I don't want to take time on this issue
now, but I will have follow-up questions for the record.
Mr. Genachowski. Of course.
Senator Blumenthal. Second area. I noticed that today AT&T
has announced a rate hike--I am sure you are aware of it--on
its DSL service. This comes just one week after Verizon
announced an almost-identical rate increase. Both of them
trouble me. Price increases sometimes are a fact of life, but
when we see increases in the market as important as this one,
not only in its impact on consumers but also our economy in
general, I think we ought to pay closer attention.
Let me ask about the FCC's efforts to monitor prices in the
marketplace. As you know, the National Broadband Plan
recommended that the FCC collect and monitor prices and make
that data publicly available so consumers could make more
informed decisions, have better choices.
I know the Commission has an open rulemaking on that issue,
and I wonder if you could tell this committee what the status
is of implementing this recommendation. And do you believe that
the FCC needs such data to better meet your statutory
responsibilities? And--well, let me invite you to answer that
question first.
Mr. Genachowski. Sure. As the broadband plan pointed out,
that would be very helpful data. What is underlying your
question is something that is very important, which is the need
for competition to drive lower prices, better products, more
private investment. And I completely agree with you, and it is
something that we have worked very hard on.
In the mobile space, we have seen much better trends in
mobile competition over the last couple years than we had seen
before. But there is, of course, much more work to do.
Senator Blumenthal. Are you troubled, as well, by these
rate increases?
Mr. Genachowski. I am troubled in general by rate increases
that aren't based on competitive factors. These aren't
something that we have studied specifically yet, but it is
certainly something that we can look at together with you.
Senator Blumenthal. I would appreciate that. And I will
follow up on that area as well.
Finally, because my time is limited: blackouts, sports
blackouts. Grave concern, deeply troubling, especially to many
in Connecticut when they see that their favorite football team
on Sunday or their favorite baseball team or their college
sports team has been blacked out in their area.
The Commission, as you know, put out a notice of inquiry
but hasn't yet moved to a Notice of Proposed Rulemaking. I
wrote to the FCC back in 2011 to ask that you open this
proceeding to discuss whether the nearly 40-year-old sports
blackout rule--I think it is 40 years old--is still relevant in
today's environment. And I wonder if you could give me an
update, a status report, on where you are on this issue which
is profoundly important to people in Connecticut but I think
across the Nation.
Mr. Genachowski. Sure. And blackouts are of tremendous
concern to consumers. We certainly hear from them, as you do.
An area where it comes up too often is in the
retransmission consent area. This is an area where we have had
discussions with the Committee in the past, and look forward to
continuing it because it may be time to update those provisions
to reduce the chances of blackouts during retransmission
consent negotiations.
Senator Blumenthal. Are you planning to move to a
rulemaking proceeding?
Mr. Genachowski. As we said at the time, our authority
under the existing statute is limited. And this may be an area
that we have to work with the Committee to address the blackout
issue.
Senator Blumenthal. Well, my time has expired. I thank the
Chairman for his indulgence. I would like to follow up on this
area, as well, and get some more specific and detailed answers.
And I want to thank you and all the Commissioners for your
very diligent work. Thank you.
The Chairman. Senator Blumenthal, you only exceeded your
time by 31 seconds, so I wouldn't get too worried about it.
Plus the fact that your questioning is always excellent.
Senator Blumenthal. Thank you.
The Chairman. Senator Nelson?
STATEMENT OF HON. BILL NELSON,
U.S. SENATOR FROM FLORIDA
Senator Nelson. Thank you, Mr. Chairman.
I believe that disclosure is one of the strongest things
that can happen in the public sphere. And two decades ago, the
Federal Communications Act had this provision: Section 317,
requiring the on-air identification of sponsors of all
advertisements, political and commercial. And then when the FCC
wrote the regulation, they said that political ads must,
``fully and fairly disclose the true identity of the person or
persons or corporation, committee, association, or other
unincorporated group or entity,'' that pays for them.
Well, as you know, as the result of a Supreme Court
decision, we have been beset upon in the political sphere with
an avalanche of undisclosed, unlimited money from sources that
the public does not know where the political communication
either arguing for or against a particular candidate comes
from.
Indeed, in the Citizens United Supreme Court decision that
set off this crazy contortion of campaign finance law, there
was an interesting statement by the Court, joined by eight of
nine justices, that says, ``Disclosure is the less restrictive
alternative to more comprehensive speech regulations.'' That
would indicate that the Court is looking approvingly of
disclosure.
OK. You have the statutory power. We don't have to do what
we failed by one vote, with 59 votes, and we didn't get 60
votes, four years ago to have the DISCLOSE Act. You have the
power.
So I would like to know what each one of you thinks about
implementing the statutory authority that you have for all of
that undisclosed money that is hiding behind the Committee for
God, Mother, and Country'' and yet is fueled by various special
interests.
Mr. Genachowski. So, Senator, thank you. It is a very
important issue, and I agree with you that disclosure is a
First Amendment-friendly, powerful tool in this space.
Last year--and this was a contentious decision--we approved
new rules that required broadcasters to put online the
information that they now receive about political ads. And they
do receive a significant amount of information. By a 3-2 vote,
we adopted those rules. And that started rolling out before the
last election, and it will continue.
And part of what I think we are obliged to do now is look
at the effect of that as it rolls out, consider the kinds of
issues that you are raising, and determine what, if any, next
steps are appropriate and necessary.
Senator Nelson. Well, the statute passed two years ago
requires on-air identification of all sponsors of all
advertisements. And then the FCC rule that implemented the
statute says, quote, ``fully and fairly disclose the true
identity of the person''--talking about political ads--or
persons or corporation, committee, association, or other
unincorporated group or other entity.''
So does that mean that you are a ``no'' vote?
Mr. Genachowski. No, Senator, I think there are
requirements that are in place on disclosing, including on air,
the sponsors of ads. I think you are suggesting that we look at
going more deeply into who the actual funders are. I think that
is a very important issue and something that we should look at.
Senator Nelson. I am talking about the enforcement of the
FCC's rules that fleshed out the statute that was passed.
Would you indulge me, Mr. Chairman, to just see what the
rest of the Commissioners say?
Mr. McDowell. Thank you, Senator, for the opportunity to
comment on this. And you are absolutely right; disclosure and
transparency are good and curative in many, many contexts.
And as the Chairman pointed out, about a year ago, we had a
vote--actually, there were only three of us at the time at the
Commission. There was a 3-0 vote in part and a 2-1 vote in the
other part. I dissented against the disclosure of broadcast
rates, how much it cost, because I am concerned about
collusion.
So we want to encourage transparency. At the same time, we
need to balance that against what is the right forum. Should
that be the Federal Election Commission or the Federal
Communications Commission? Should broadcasters end up being the
enforcers of political campaigns and these other groups that
are formed? Do we put the burden only on them?
So I think there are a lot of equities to balance here, as
well. There are a lot of groups that get formed in the context
of elections and public issues ads. So where should all the
burden go? The money flows to new media, it flows to old media,
it flows to a lot of different places in old media and not just
broadcast licensees. So we need to be careful to balance.
Senator Nelson. There is no balance here. It says
``requires on-air identification'' of the sponsors of
advertisements. So does that mean you are a ``no''?
Mr. McDowell. Well, and there are already both FEC rules
and FCC rules regarding these sorts of things. So, you know,
all the mouse print and the quick, fast talking at the end of
ads covers a lot of that.
Senator Nelson. We just came through more than a billion
dollars, probably $2 billion to $3 billion, of outside ads from
these undisclosed sources. So this is not an issue in front of
the public. It is here, it is right now.
What about you, Ms. Clyburn?
Ms. Clyburn. Senator, I will look forward to working with
you if there is anything that we have or have not done or that
you identify as deficient.
We moved a long way in moving the information that stations
were previously keeping on premises to the airwaves. It made
the opportunity for investigative work and the like more clear.
Again, if there is anything that we left out, if there is any
``i'' not dotted, I look forward to further engagement with
you.
Senator Nelson. So that is a ``maybe.''
How about you, Ms. Rosenworcel?
Ms. Rosenworcel. I will make it easy. Yes. I agree with
you. Sunlight is the best disinfectant. And we should look at
our rules, make sure they are updated under Section 317, and
make sure that the filings that we receive are as transparent
as they need to be.
Senator Nelson. Mr. Pai?
Mr. Pai. Thanks, Senator. I share my colleague's value of
openness and transparency in all phases of our work.
One of the issues, I think, that we are confronting is that
Section 73.12(12) of our rules, which implements Section 317 of
the Act, requires the disclosure of persons, committees,
corporations, or other entities that are sponsoring the
advertisement. So there is a question under our current rules
whether that requires the disclosure of all the sponsors who
are underlying the actual sponsors. And so there are also some
practical considerations, as Commission McDowell pointed out,
in a 30-second television ad. Would you have to identify every
single sponsor of, you know, who is funding the corporation or
the outside committee?
One of the other things I would like to bring to your
attention is this September 2012 GAO report which studied this
issue in some depth. And it pointed out that, regardless of
what Congress does with respect to the law and what we do with
respect to our rules, it wouldn't hurt for us to update some of
our FCC guidance to broadcasters. Some of that guidance hasn't
been updated since 1963, and it still talks about the fact
that, you know, the expensive kinescope print that you use to
produce a film might warrant sponsorship identification.
And so I think there are things that we could do internally
to provide greater clarity for the industry.
Senator Nelson. That sounds like a ``maybe, yes.''
[Laughter.]
Senator Nelson. In which case, need one more vote.
[Laughter.]
Senator Nelson. I need three votes.
Now, this is of great consequence to the political sphere,
of how it was influenced by undisclosed, unlimited money.
Thank you, Mr. Chairman.
The Chairman. Would the Senator yield to a question?
Senator Nelson. To my Chairman, of course.
The Chairman. It is a fascinating question, and it goes to
the very root of the integrity of democracy. And there were two
fairly--one very clear, one fairly clear ``yes,'' and then
there was sort of a ``yes, maybe,'' and then there was a--you
know.
There is no complexity to this question. There is no way,
cerebrally, to avoid answering his question. To say that the
FTC could do it or somebody else could do it, that is not what
he is asking. He said, you have the power to do it, and he is
asking, will you do it. I don't think it is unfair for him to
insist.
And you have my permission, if Senator Cruz doesn't kill
me, and Senator Cantwell, Senator Begich--well, they will kill
me. I think he should press his point.
Mr. Genachowski. Well, I would be happy to add to that.
We took a major step last year in increasing transparency
around political ads and making the information available to
consumers. It was a very significant----
Senator Nelson. You might have done that, and I commend you
for that. But it didn't affect the outcome.
Here is the outcome. It is disclosure. Once all of those
entities have to put their mouth where their money is, it is
too embarrassing for some of them. Now, some of them, of
course, it was obvious; they made no bones about it. But when
you hide behind that ``Committee of the Flag, Mother, and
Country'' and in the name of that entity all of the
contributions are made, you are violating the statute and the
rule that you all implemented to flesh out the statute.
Thank you.
The Chairman. Thank you, Senator Nelson.
Senator Begich? Thank you for your patience.
STATEMENT OF HON. MARK BEGICH,
U.S. SENATOR FROM ALASKA
Senator Begich. No, I am happy. That was a very interesting
debate, and it would be interesting at some point to further
that discussion.
But let me--as many of you know, I always start--and,
first, I want to say thank you for all the work you have done
in regards to some of the adjustments you have done and the
work you have done in regards to Alaska. But always being
parochial and always caring about my state, I want to lay a
data point, and then I have a couple questions, Mr. Chairman,
if I can direct them your way, and others may want to respond.
A new study came out, I think it is called ``The Brattle
Group,'' a pretty respected group, found that 60 percent, 60
percent of Alaska has wholly inadequate telecommunications.
Sixteen thousand census blocks in Alaska have no wireline
broadband service or no wireless service whatsoever. Another
4,300 census blocks have no wireless service at all.
To get just to 3G--forget 4G, I know that is the goal--just
to get to 3G in Alaska is a quarter of a billion dollars of
investment. So we have significant investments needs.
And, now, Mr. Chairman, I am going to ask you a couple of
questions in regards to two recent ones. I know you just
finished, I think it was Order 6. And one of the issues that, I
think it was in Order 6, that came out--and let me just kind of
state it here.
You have done some positive impacts, again, for Alaska, but
it is clear and it appears there is an error in the regression
analysis. The first that comes to mind is the designation of
tribal lands. The FCC itself, in previous dockets considering
Lifeline and Link Up services, recognized Alaska as designated
100 percent tribal lands. We are not like any other state, we
don't have reservations. And so, in 2012, July, the wireline
bureau conceded that not treating Alaska as 100 percent tribal
lands was an error and that it should be corrected. To date,
that correction has not happened.
What is more disturbing is the most recent arbitrary
designations. I mean, the North Slope, 23 percent tribal. Well,
where do you come up with the data to back that up? Because
being born and raised, I am going to tell you--and I know
Commissioner Pai is going up to North Slope.
And they are going to be anxious to talk to you about what
tribal land is. And I will come to you because you had some
commentary which I appreciated.
I don't know how you come up with these designations. And I
am anxious, one, how you came up with it. And then I want to
see the data. Because I am going to tell you, I will be
surprised if the FCC understands--no disrespect to all of you
and your staff--what tribal lands are. And 23 percent of the
North Slope Borough, as one example, is not tribal land. The
whole area is tribal land.
And, obviously, to be very frank, I am a little agitated
because it has offended many of my constituents in Alaska, how
an agency can determine what tribal land is when you already
have one of the bureaus saying they made an error, should be
100 percent.
So, Mr. Chairman, how do you respond to that?
And then I want to get the data, and I hope it comes from
somewhere, wherever that somewhere is.
Mr. Genachowski. Senator, first of all, thank you for the
positive remarks on our overall reform efforts. You and I have
spent much time talking about this over the last few years,
including in----
Senator Begich. And in Alaska.
Mr. Genachowski. In Alaska, although not in the North
Slope.
Senator Begich. No.
Mr. Genachowski. And, certainly, I recognize, we all
recognize, the staff recognizes that there are elements of
Alaska that are unique and that we have to take into account in
our rules and that the tribal issues in Alaska are complex and
very important.
On the specific question that you are asking, if I may, I
would like to follow up with you on that. Because the
particular----
Senator Begich. I would appreciate that.
Mr. Genachowski.--North Slope tribal issue is not something
that I am----
Senator Begich. That is just one.
Mr. Genachowski.--familiar with.
Senator Begich. It is around Alaska. Many different areas
have different percentage designations. And I would like to
know where the data came from to determine that.
Mr. Genachowski. We will provide that data to you and work
with you on this.
Senator Begich. And did I see another--yes?
Mr. McDowell. Senator, first of all, thank you for raising
this issue. As you know, if it weren't for Senator Ted Stevens,
I would not be here, and I am eternally grateful for that.
Senator Begich. And he probably ingrained in your mind
about tribal issues 100 percent.
Mr. McDowell. It is. And I have always fought for----
Senator Begich. I am just here to help remind you of that
fact.
Mr. McDowell.--tribal lands. We always fight for inserting
Alaska native lands if it is not in our language already. So it
has been a priority of mine since my very first trip as a
commissioner was to Alaska in August of 2006. I have been to
the North Slope in winter when it was a balmy 55 degrees below
zero in Barrow and----
Senator Begich. Extra credit.
Mr. McDowell.--Deadhorse. So I want to work with you on
this issue to help correct it if we need to.
Senator Begich. Very good.
Ms. Clyburn. And, Senator, as you know, I came to Alaska in
the dead of summer, and----
[Laughter.]
Ms. Clyburn. And I am unapologetic for that.
[Laughter.]
Ms. Clyburn. But I want to assure you--and we have talked
several times--that we run a data-driven process. And all data
and methods, in terms of the regression analysis and any other
analysis that we have come up with, are open to you.
So, again, I would invite you to come down to the office or
we can come to you. It might be easier for you to come down to
the office on some of this. And if there are any remaining
questions which obviously----
Senator Begich. We will make it happen.
Ms. Clyburn. All right.
Senator Begich. My time has about run out, and I still have
one important question.
Ms. Rosenworcel. Well, you know, Senator, I have been to
Alaska, I have been up there with you. And I think there are
two points here. First of all, when you have a regression
model, it is only as good as the data you put into it.
Senator Begich. Yes.
Ms. Rosenworcel. And the second point is Alaska is big and
vast, and it is possible that it does not fit into the model
that we use for the lower 48 states.
Senator Begich. Very good. Let me end you there.
Mr. Pai, don't worry, I have a question for you.
Mr. Chairman, if I could just take 2 seconds to kind of go
through.
One other one was a letter that was sent to the Alaska
delegation, dated August 2012, Mr. Chairman. Adopted a variable
that specifically accounts for provision of services in Alaska.
That variable, adopted by the Commission for construction in
Alaska, is a negative coefficient. In other words, the data
actually says--which doesn't make--I am trying to hold myself
here for a second--that it is 46 percent lower to construct in
Alaska than the lower 48. That is impossible, based on my
experience.
And so, you know, when is that--as you said, data going in,
creates something that doesn't work. I mean, San Juan actually
get a 679 percent higher cost of constructing, San Juan, than
Alaska, when we have less than 4 months in some of our areas of
construction season, when San Juan may be a little warmer, 12
months.
So how do we explain that? And can you get me data to
explain this, or fix this problem that doesn't make any sense?
Mr. Genachowski. Yes, I think there may be a
misunderstanding there. Our staff recognizes the cost and
expense of building out in Alaska. So we will pursue that with
you and your staff, and I would look forward to that.
Senator Begich. Very good.
Let me end and just say, Commissioner Pai, thank you.
Given the new data that I showed and some of your
commentary--I did not read the nine-page speech, but I got good
commentary on it--let me ask you, do you agree that it makes no
sense or that there should be clear review of additional
reductions in the USF fund, especially in Alaska, based on this
data that I just laid out on the 60 percent accessibility
issue?
Mr. Pai. Well, Senator, first, I want to thank you----
Senator Begich. I am tagging you because you had a little
different view on the last order.
Mr. Pai. Yes. Thank you for the question. And I want to
express my appreciation for our productive exchanges, both in
public and in private, on these issues. I know it is important
to you, and it is important to me and my colleagues, as well.
I think one of the issues that we are confronting, and you
encapsulated it in your question, which had to use the words
``negative coefficient'' and things like that, an elegant
model, even one that in the abstract is mathematically sound,
can often run aground on the shores of Alaska. And so, from
Barrow to Adak, from, you know, Kotzubue to Cordova, there are
a number of unique challenges that the state faces that aren't
adequately captured in the model.
So, you know, there are two solutions to that. One is, you
know, to stay with things the way they are. The other is to
make the necessary changes to the model, either by tweaking the
variables or putting in better data.
As you know, I have expressed to you before, I stand with
you in terms of my willingness to get it right and make sure
that we do what we can to, you know, provide predictability and
adapt to the conditions of Alaska.
Senator Begich. Thank you. Look forward to seeing you in
June.
Mr. Pai. June, July, August, yes, we will look forward to
that, too.
Senator Begich. Very good. Thank you.
Mr. Chairman, thank you.
The Chairman. Thank you, Senator Begich.
The most patient Senator Cruz.
STATEMENT OF HON. TED CRUZ,
U.S. SENATOR FROM TEXAS
Senator Cruz. Thank you, Mr. Chairman.
I want to begin by thanking the Chairman, thanking each of
the Commissioners for your service, for being here, for your
extended testimony today. I appreciate your being here.
I would like to ask a couple of questions about spectrum
policy, but I would like to begin with just a word of caution
about the recent exchange with Senator Nelson.
The FCC has a long tradition of being nonpartisan. And, as
each of you know, the DISCLOSE Act is a subject of deep, deep
division within the U.S. Congress. And many are concerned that
the DISCLOSE Act, if passed, would have a profoundly partisan
impact and would raise grave First Amendment issues.
And so the word of caution I would raise is, were the
Commission to endeavor through rulemaking to end-run Congress
and adopt a rule that would be perceived as overtly partisan, I
would caution that doing so could well undermine the integrity
of the Commission and imperil the independence of the
Commission.
So I give you that word of caution. You have an important
statutory mission. And my counsel, at least, would be to leave
the political disputes to the members of this body, who are
elected to decide them. And I don't require an answer to that.
That is simply a word of caution.
I want to turn to questions on spectrum now. I have seen
estimates that the Federal Government owns or controls roughly
85 percent of spectrum that is suitable for wireless broadband.
And the question I would ask the chairman and each of you is
twofold.
Number one, for those estimates, are those consistent with
your understanding? And, in your learned judgment, is it
appropriate for the Federal Government to control such an
overwhelming majority of the spectrum that is suitable for
broadband, and for the public, the private sector, to be
allocated only 15 percent?
Mr. Genachowski. So it is an important question, Senator
Cruz, and others on the Committee have asked it, as well, which
I think is a good thing, because we do need to take this issue
seriously. I have seen the number 60 percent, maybe measuring
different spectrum. But either way, when you compare the usage
needs to the amount of spectrum that the Federal Government
has, it doesn't make sense long-term, given the very powerful
demands for commercial spectrum.
And so working together on this is absolutely essential. We
need to clear and reallocate much more Federal spectrum. And I
believe we also need to look at creative sharing ideas and
pursue both tracks.
Senator Cruz. Does anyone disagree with that assessment?
Mr. McDowell. I don't disagree. Actually, the number could
be 60 percent, it could be 85 percent, it could be more,
depending on what you determine is the best spectrum. And
technological innovation is actually expanding that. You know,
there was junk spectrum years ago which is now prime spectrum.
But the Federal Government can and must do more to
relinquish spectrum for auction for exclusive-use licenses.
Senator Cruz. Let me ask, then, a follow up question. Are
any of you aware of any reliable assessment of the value of all
of the spectrum that is controlled by the government? And, if
not, can you imagine any sensible process for valuing it and
assessing just how significant of an asset is this spectrum
that is in the control of the Federal Government?
Mr. Genachowski. Well, the idea of an audit of Federal
spectrum, it has come up earlier in the hearing. It is
important, and I agree with my colleagues that it should be
done. That should not hold up steps we can take in the near
term to free up spectrum where we know there is inefficient use
and we can get it on the market.
Mr. McDowell. The value could be untold, really, if you
look at 400 megahertz to maybe 3 gigahertz, and that is the 85
percent data point you are looking at. You know, based on the
$2.70-per-megahertz POP, which is how we value spectrum, that
came out of the 700 megahertz auction, if all of that could be
used in an unencumbered way at its maximum value, I can't do
the math. That is a lot of zeroes after a number, but it is in
the tens, if not hundreds, of billions.
Ms. Rosenworcel. Yes, the value of Federal spectrum
holdings is really, really big. Too many zeroes to count. But I
think what we need to do----
Senator Cruz. This is a body that we--we generate a lot of
zeroes.
Ms. Rosenworcel. You operate in those numbers.
Senator Cruz. Far too many.
Ms. Rosenworcel. Yes, I know. I know.
[Laughter.]
Ms. Rosenworcel. What we need to do right now, though, is
we need to find ways to give incentives to the Federal
Government to be more efficient with its spectrum. We need to
make sure that when we knock on the Federal Government's door
and ask for more spectrum for commercial broadband use, they
don't just see loss from its reallocation, they see the
possibility of gain. And I think valuing it is the first step
in identifying how to do that.
Senator Cruz. And if I may ask, with the Chairman's
indulgence, one final follow-up question, which is, in your
judgment, what would be the best process for assessing the
macro question of determining the appropriate level of control
and/or ownership of spectrum by the Federal Government and the
value of that, and what is the appropriate level of control
and/or ownership by the private sector?
Mr. Genachowski. I will answer very briefly. I do think
that audit would be the best process. As Commissioner McDowell
points out, we can value spectrum on a megahertz POP basis, and
so I would encourage that path.
Mr. McDowell. The audit plus, borrowing a concept from
zero-based budgeting, which is the Federal Government should
justify use of its spectrum in a transparent way, as
transparent as the Federal Government can be.
Senator Cruz. Thank you very much.
The Chairman. Thank you very much, Senator.
Senator Cantwell?
STATEMENT OF HON. MARIA CANTWELL,
U.S. SENATOR FROM WASHINGTON
Senator Cantwell. Thank you, Mr. Chairman, and thank you
for holding this hearing. I know it has been a long afternoon
already, but I certainly appreciate the opportunity to address
the Commission.
And, you know, I think the last oversight hearing we talked
about media ownership rules, and I more or less know where we
are. You are looking at a study, at this point in time, to give
you more feedback on the proposed rules. It seems as if you are
going to pursue what your Republican predecessor did with
urging more media consolidation, obviously something I don't
support, your proposed rule. So I am not going to spend a lot
of time on that today, other than to just say we will certainly
pursue a resolution of disapproval if that is where you end up.
But I just wanted to point that out. It is not that I don't
want to ask a lot of questions about it. I just know you are at
this stage where you are getting more input from a study.
I do want to ask about unlicensed spectrum, though. And I
guess, first, I just want to start with a basic concept or
question to you, the Chair, but I guess to anybody else who
wants to jump in there.
Do you agree or disagree that the spectrum crunch that we
hear about also applies to the unlicensed spectrum? We spend a
lot of time on the licensed spectrum, but I want to make sure
everybody gets the demand and the crunch on the unlicensed. Do
people think that is a real issue?
Mr. Genachowski. I completely agree. We feel that when we
are at conferences or airports and we are using unlicensed
spectrum, which is what Wi-Fi is built on, and we see and feel
the congestion. This is more likely to get worse than better,
as more and more video and high-bandwidth uses travel over
unlicensed and Wi-Fi.
So I agree with you, we need to free up more spectrum for
Wi-Fi. We proposed another 200 megahertz recently. And then I
also think we need to pursue a new generation of unlicensed,
which we can do as part of the incentive auction process.
Senator Cantwell. And do you agree or disagree that
obviously there are different propagation characteristics of
these different megahertz? So, like, at 600 megahertz or 900 or
2.4, 3.5 gigahertz, 5, there are different--enables certain
things and precludes others? So it is not----
Mr. Genachowski. Agree.
Senator Cantwell. OK. Good.
And that obviously it is very important for innovators to
have access to unlicensed spectrum at different frequencies,
including below 1 gigahertz.
Mr. Genachowski. I agree. And it is both the frequencies,
and it is also the power at which they are permitted to
transmit. There is some Wi-Fi frequency available at lower
frequencies, but it is power-limited. And so this next
generation of unlicensed, which can be both lower frequencies
but also higher power levels, can make a big difference and
create new innovation markets.
Senator Cantwell. And so how do you see us resolving these
issues, or how do we get the attention to these issues so that
we can have this clarity for----
Mr. Genachowski. Well, this is in front of the Commission,
it was in front of Congress in connection with the incentive
auction law. And there was a direction given to the Commission
with respect to guard bands and looking at unlicensed in those
guard bands. I think that was a good outcome on a bipartisan
basis from Congress, and that is under active consideration now
at the Commission.
Senator Cantwell. Yes, go ahead.
Mr. McDowell. Senator, as you know, I have been a long time
proponent of unlicensed use of the TV white spaces, which is a
concept of at least 11 years old. We do need to move forward
with the incentive auction proceeding, but I want to make sure
we do not reserve a large block that is nationwide for
unlicensed use. I think that would undermine funds for the
public safety initiative that Senator Rockefeller was talking
about.
But we can still have robust unlicensed use below 1
gigahertz, just as we are looking at above 5 gigahertz. But we
need to be very careful to not artificially create something
that lends itself better to auctioning for licensed purposes
than unlicensed purposes.
Senator Cantwell. That kind of brings up the Progeny
waiver. So is that something the full commission is going to
look at?
Mr. Genachowski. I presume so, although that is something I
would like to get back to you on. But I presume that is a
commission issue.
Senator Cantwell. And why would it not be?
Mr. Genachowski. Only if it fits into the category of not
presenting any significant commission policy decisions. But I
presume it would be.
Senator Cantwell. Well, I guess it goes--yes, go ahead.
Mr. McDowell. I would hope it would be.
Senator Cantwell. Pardon?
Mr. McDowell. I would hope that it would be something all
five of us could consider.
Senator Cantwell. I guess that is my point, is to shove
some of these things that are already causing challenges in
this space. You know, I would hope that we were going to have a
broader discussion about it instead of, you know, having some
of these waivers given and then having preclusions, basically,
or conflicts, like on the E-911, when we need to have a broad
discussion about how we are going to have this unlicensed
spectrum really be a very robust space for all these
applications.
So thank you, Mr. Chairman.
The Chairman. Thank you, Senator Cantwell.
I should just point out that, as it turns out, on next
Tuesday at 2:30 p.m. we are going to have a classified briefing
for Commerce Committee members on the Federal Government's use
of spectrum. And that notice is being sent to offices today.
I could go on to violence, but you know what I would say
and I know what you would answer. I would just hope that you
could take what you did in 2007 and then also in 2009 and kind
of move them forward. I mean, we have to do the heavy lifting
on it to give you capacity in violence. I have never quite
understood that. And it has sort of a bad reaction on this
committee, which I have never quite understood either. But be
that as it may, you do your work, and I will try to do mine.
And I want to thank you, particularly, Mr. Chairman, for
inconveniencing yourself. This was not according to your
schedule, and you had to make a change. The rest of us did not,
I don't think. And, therefore, I thank you very much for that.
These hearings are interesting in that they wander a bit
from time to time, can come up with interesting and important
subjects. I thought Senator Nelson's thing was very, very
important. I had no idea of what you all had written about
that.
But people are interested. They do know the world is
changing, and they do want to know the right things. We have
some ideological differences, not necessarily with me but with
some others, but I think those can be overcome, and I think we
can do good work.
In any event, thank you all for what you do. It is complex
beyond definition.
And the hearing is adjourned.
Mr. Genachowski. Thank you.
[Whereupon, at 5:11 p.m., the hearing was adjourned.]
A P P E N D I X
Response to Written Questions Submitted by Hon. John D. Rockefeller IV
to Hon. Julius Genachowski
Question 1. As you know, I have long been concerned about the harm
caused to kids by violent programming. That is why I have introduced
legislation to have the National Academy of Sciences study the impact
of violent programming on children's well-being.
I also have long believed that parents must have effective tools to
protect their children from questionable content, no matter how it is
accessed. I know the FCC previously studied this issue in 2007 and
2009, discovering significant flaws in TV ratings systems and parental
controls.
Technology has changed dramatically since your original studies.
Today's mobile devices and online video platforms offer children access
to untold amounts of content and create additional challenges to
parental oversight.
Would you commit to updating the FCC's 2007 and 2009 reports on
media violence and parental control tools, particularly examining the
impact of changes in technology on parents' ability to protect their
children from questionable content?
Answer. As you noted, in 2007, the Commission released a report at
the request of the House Energy and Commerce Committee that studied the
impact of excessively violent programming on children, the advisability
of government regulation of such programming, and the legal issues
raised by such potential regulation.
That report stated that research provides strong evidence that
exposure to violence in the media can cause aggressive behavior in
children, at least in the short term. It also concluded that Congress
could develop an appropriate definition of such programming, but that
such a definition would have to be narrowly tailored and in conformity
with judicial precedent to withstand constitutional review.
In August 2009, pursuant to the Child Safe Viewing Act of 2007, the
Commission issued a Report to Congress in which it assessed the state
of the marketplace with respect to the existence and availability of
advanced blocking technologies, methods of encouraging the development,
deployment, and use of such technologies. The Report also assessed the
existence, availability, and use of parental empowerment tools and
initiatives already in the market.
In October 2009, as a follow-up to the CSVA Report, the Commission
issued a Notice of Inquiry seeking comment on how to help parents and
children take advantage of the opportunities made possible by
electronic media technologies while protecting children from the
potential risks posed by these technologies. This ``Empowering
Parents'' proceeding remains open.
Given the technological changes to which you refer, a reasonable
first step would be for the Commission to update the record to collect
data on the most current technologies available to best empower parents
to protect their children from objectionable programming.
Question 2. On March 1, I sent letters to the four national
wireless providers to express my concerns about the growing evidence of
wireless cramming. As I have expressed in the past, it is important for
both the FCC and Congress to be proactive in this area. As last year's
investigation in this Committee found, wireline cramming costs
consumers and businesses billions, and we have to apply the lessons
learned from that experience to stop wireless cramming. As we continue
to move to a more wireless world, we must remain vigilant. What should
the agency be doing to make sure cramming doesn't move to other
services, such as wireless? Has the agency seen evidence of an increase
in wireless cramming complaints in the past year?
Answer. A pending Notice of Proposed Rulemaking seeks to obtain
information on the scope of wireless cramming complaints. Commission
staff is reviewing the record developed in that proceeding and the data
we are receiving from complaints, as well as the trends in the number
of wireless cramming complaints we are receiving.
On April 18, the Commission held a Public Workshop with industry
experts as well as consumer and state representatives, to help educate
consumers to protect themselves from both Bill Shock and Cramming. We
plan to utilize the information obtained in the pending item and at the
workshops to formulate potential next steps.
Question 3. Prior to the FCC's adoption of last year's reforms to
the universal service high-cost fund, I discussed with you and your
colleagues the importance of making sure that those reforms help bring
wireless service to rural areas that do not have it now. We also
discussed how mountainous terrain and other topographical features can
pose additional challenges and costs to wireless deployment in those
areas.
The Commission recently completed its Mobility Fund ``Phase One''
auction to provide support for wireless build-out in rural America. It
is my understanding that some prospective bidders faced significant
challenges in winning support under the Mobility Fund's Phase One
rules.
I know that the FCC is still considering reforms to the method by
which it distributes wireless support in the future. Will you commit to
a thorough review of this method to be sure that its works effectively
for all rural areas, including those areas, like West Virginia, that
face topographical challenges?
Answer. It is critical that we extend the benefits of mobile
communications to rural areas, including those in West Virginia.
Phase I used a competitive bidding process in areas where it would
be cost effective to develop with a one-time investment. A total 894
bids were submitted, and $300 million awarded to extend service to up
to 83,000 road miles.
We are conducting a thorough review of this auction to identify
successes and areas for improvement. Following the auction, we
solicited further comment on lessons learned, and have been carefully
reviewing the comments received.
______
Response to Written Questions Submitted by Hon. Barbara Boxer to
Hon. Julius Genachowski
Question 1. For years, rural telephone consumers have been
reporting to the FCC that they frequently experience dropped calls and
poor call quality. Last month, the Commission released a Notice of
Proposed Rulemaking (NPRM) proposing data collection to better identify
the source of rural call completion problems. That was a good first
step and one that is long overdue. Will the data the Commission
receives as a result of the NPRM be shared with States so that they may
better address intrastate call termination problems?
Answer. The NPRM sought comment on whether the data the Commission
proposed to collect should be treated as confidential or be open to
public inspection. We will be reviewing the record carefully on this
issue. In addition, in other contexts we have shared even non-public
data with state officials subject to protections, and will consider
that option here as well. We have encouraged our state partners to
participate in the proceeding, and we look forward to working with them
to address rural call completion problems.
Question 2. Can we expect the FCC, in the near future, to undertake
additional enforcement actions like today's consent decree with Level 3
Communications?
Answer. Resolving rural call completion issues is a major priority
for the FCC. We are aggressively pursuing this problem and there will
be significant consequences for those companies that are not fulfilling
their obligations to rural America.
Question 3. The E-Rate program, which has furthered the goal of
bringing broadband Internet access to classrooms and libraries all over
the country, is severely underfunded. Last year alone, it had to turn
away more than $2 billion in applications from schools and libraries
nationwide, including many in California. Experts project that demand
for E-Rate support will continue to grow, particularly as wireless
devices proliferate in the classroom. Yet, the E-Rate cap, which was
set 15 years ago by the FCC, only increases by one percent each year
and may not be able to support the future bandwidth needs of our
schools and libraries. What is the Commission's plan for addressing the
E-Rate funding shortfall and ensuring that schools and libraries can
obtain affordable, high-speed broadband?
Answer. The E-Rate program has achieved remarkable success--97
percent of American schools and nearly all public libraries now have
basic Internet access.
We are at a moment of great opportunity for digital learning.
Broadband and digital tools have game-changing potential for education.
Our significant E-Rate reforms in 2010 were a strong start to lower
costs and expand broadband access to schools and libraries.
As with all our universal service programs, it is critical that we
regularly review E-Rate to ensure it is keeping pace with needs,
operating efficiently and targeting support effectively.
Question 4. As you know, under the E-Rate program service providers
are required to charge schools the lowest price offered to comparable
customers. However, there is evidence that the program's crucial low-
price requirement has been widely neglected.
What steps are the Universal Service Administrative Company and the
FCC taking to ensure that E-Rate funds are used correctly, and that
schools and libraries are receiving the proper discounts on services?
What are the USAC and the FCC currently doing to ensure that
service providers under the E-Rate program are charging schools and the
Federal Government the lowest available prices?
Answer. E-rate program participants are required to ensure
compliance with all applicable Commission rules, including the lowest
corresponding price (LCP) rule.
USAC's annual trainings for applicants and service providers
include a reminder that service providers are required to comply with
the LCP rule.
FCC has taken actions to ensure LCP compliance, including, in 2009,
an $8.3 million FCC-DOJ settlement agreement with AT&T regarding over-
billing.
We will continue to work to ensure LCP compliance going forward.
Question 5. The National Broadband Plan recommended making changes
to the E-Rate program to make services more cost-efficient, prioritize
funding, and give schools and libraries more flexibility regarding how
funds are used. Added flexibility and efficiency are vital for
broadband access expansion in California, where sadly 15 percent of
schools still lack a broadband connection. Can you detail any progress
made toward these goals, including actions taken and future plans?
Answer. The FCC's 2010 E-rate Order is making it easier for schools
and libraries to get the highest speeds for the lowest prices by
increasing their options, streamlining the application process for
educators and librarians, and strengthening protections against fraud
and abuse. We are continuing to update programs across USF and in other
areas to meet the needs of the broadband age.
Question 6. Unleashing spectrum for wireless broadband is critical
to our economy. However, California television stations have inquired
about the existence of translator and low power service at the
conclusion of the repacking process which will follow the reverse
auction. Over four hundred of these stations exist in California and
serve a large and diverse portion of the state. Where do translator and
low power services fit in the Commission's plan to auction broadcast
television spectrum?
Answer. Congress chose not to provide special protection in the
Spectrum Act for low power TV and TV translators, which are secondary
services. However, we recognize the important services low power and TV
translator stations provide, particularly in rural areas, and are
seeking input on measures to ensure that their valued programming
continues to reach viewers.
Question 7. In his testimony, Commissioner Pai expressed concern
that the incentive auction may fail to provide sufficient funding for
FirstNet to build a nationwide, interoperable public safety broadband
network. As you know, this funding is essential to addressing the
serious gap in our Nation's public safety communications identified in
the 9/11 Commission Report. What steps are you taking to ensure that
FirstNet will receive sufficient funding to fulfill its mandate and
ensure our Nation has a reliable public safety network?
Answer. The Commission's central goal is to repurpose the maximum
amount of spectrum for flexible licensed and unlicensed use in order to
unleash investment and innovation, benefit consumers, drive economic
growth, and enhance our global competitiveness, while enabling a
healthy, diverse broadcast television industry.
A key goal of the incentive auction is to raise sufficient revenues
to meet the policy objectives of the Spectrum Act, including funding
FirstNet. Other auctions required under the Spectrum Act, such as the H
Block auction later this year, will also be a source of funding for
FirstNet. As Chairman Genachowski stated when the Commission adopted
the Notice of Proposed Rulemaking on implementation of the incentive
auction, ``Our duty and intention is to faithfully implement the law,
freeing up spectrum, raising very substantial revenue, and helping fund
FirstNet first responders.''
Question 8. On March 4, 2013, you released a statement supporting
consumers' ability to unlock their cell phones so that they can use
them with a different mobile phone company. My colleagues, Senators
Klobuchar, Lee, and Blumenthal, have introduced the Wireless Consumer
Choice Act, which directs the Commission to order carriers to allow
cell phone unlocking. Would the Commission need additional authority
from Congress to enforce a cell phone unlocking order?
Answer. From a communications policy perspective, the decision of
the Copyright Office of the Library of Congress raises serious
competition and innovation concerns. For wireless consumers, it doesn't
pass the common sense test. The FCC has been closely examining this
issue, with the goal of preserving consumers' ability to unlock their
mobile phones. We also encourage Congress to consider a separate
legislative solution.
Question 9. A recent Government Accountability Office report
concluded that the FCC's cell phone safety standards, which were
adopted in 1996, ``may not reflect the latest evidence'' of the health
risks of mobile phone radiation. You reportedly circulated a draft
Notice of Inquiry (NOI) proposing a review of the Commission's outdated
cell phone safety standards in June 2012, but the public is still
waiting for the Commission to take action. When can the public expect
the release of the NOI and the initiation of the Commission's review of
mobile phone safety standards and testing requirements?
Answer. The Commission released this item on March 29, 2013 and it
can be found online at: http://hraunfoss.fcc.gov/edocs_public/
attachmatch/FCC-13-39A1.pdf
We are confident that, as set, the emissions guidelines for devices
pose no risks to consumers. The United States has one of the most
conservative emissions standards in the world. This item provides for a
routine review of our standards. We hope and expect that other Federal
agencies and organizations with whom we work with on this issue will
participate in the process.
Question 10. I was pleased to see that, after considering the issue
for nine years, the Commission initiated a rulemaking to consider how
to eliminate predatory prison phone rates. Exorbitant prison phone
rates impose a significant financial burden on families and reduce
contact between inmates and loved ones, contributing to recidivism.
When can we expect the Commission to adopt rules on prison phone rates?
Answer. The record on the Inmate Calling Services NPRM closed on
April 22. We are actively reviewing the record and considering next
steps.
Question 11. The Commission has suspended the media ownership
proceeding, and it has not yet moved ahead on the long-awaited studies
considering the information needs of communities, which implement
Congress' directive in Section 257 of the Communications Act. The civil
rights community is anxiously awaiting these studies. When can we
expect to see the planned framework for these studies and when will
they produce policy recommendations suitable for Commission action?
Answer. Our Office of Communications Business Opportunities (OCBO)
continues to review the state of communications and media markets as it
coordinates the Commission's Section 257 Report to Congress. As part of
this process, in 2012, we commissioned a review conducted under the
direction of The University of Southern California Annenberg School for
Communication and Journalism, of the existing literature analyzing the
critical information needs of the American public.
The Annenberg report was submitted to the Commission in July 2012.
Following the release of the literature review, and to assist
implementation of its recommendations, OCBO retained an independent
contractor to design a research model to examine how media ecologies
function; how critical information is made available in various media
ecologies; how individuals construct their own media ecologies to meet
their critical information needs; and what barriers exist in our media
ecologies to providing and accessing this information.
The work on the research model was recently completed and delivered
to the Commission. The research model is currently on the Commission's
website and remains open for public comment.
Question 12. I was very pleased to see that the Commission finally
finished implementing the Local Community Radio Act of 2010 and that it
has set an October 2013 application date for new stations.
Is the Commission on track to begin accepting applications in
October?
What else is the Commission doing to ensure that as many
organizations as possible are able to take advantage of this
opportunity?
Answer. Commission staff continues to work diligently to process
the pending FM translator applications in advance of an LPFM window
currently anticipated in October of this year.
The Commission has created new tools for entities interested in the
LPFM service. For example, we released a new LPFM Channel Finder that
searches the FCC database for available LPFM channels at specific
locations. We also held a Public Forum regarding the new rules adopted
under the LCRA. Our webpage provides detailed information on LPFM
service, and the public will be provided notice well in advance of a
filing window opening.
Question 13. A number of private entrepreneurs are in the process
of purchasing television stations that will be eligible to participate
in the spectrum auction. There have been anecdotal reports that a
number of these stations are currently contributing unique perspectives
or niche programming not available anywhere else. Community groups are
concerned that the purchase of these stations might harm the already-
dismal media ownership diversity levels.
Has the Commission analyzed the current market impact of these
transactions on media ownership diversity?
What is the Commission considering as options to minimize the
potentially devastating impact of these transactions on diversity?
Answer. The Incentive Auction NPRM specifically seeks comment on
measures that can be taken outside of the media ownership rules context
to address any impact on diversity as a result of an incentive auction.
Specifically, those measures could include encouraging multicasting or
other distribution methods that could ensure continued access to
minority-oriented or niche programming. In addition, the Commission
continues to evaluate other ways to help increase minority and female
ownership of broadcast stations.
Question 14. On November 30, 2012, I along with eight of my
colleagues sent a letter urging you not to relax the Commission's
cross-ownership rules without responding to our concerns about the low
levels of female and minority ownership of broadcast radio and
television stations. In February, the Commission announced that it
would be delaying its vote on the new rules as it awaits the results of
a study by the Minority Media and Telecommunications Council regarding
the effects of cross-ownership rules on minority ownership and
newsgathering.
Given the fact that MMTC's study is to be conducted by a broadcast
industry analyst who is backed by the newspaper and broadcast industry
associations and has publicly supported a relaxation of the cross-
ownership rules, do you believe the study represents an independent and
impartial analysis of the impact of cross ownership on minority owners?
Do you believe the study's methodology will provide the kind of
analysis required by the Third Circuit Court of Appeals when it ordered
the Commission to provide better justification for proposed diversity
efforts?
Does the Commission believe that radio contributes to viewpoint
diversity?
If the Commission were to conclude that radio does not contribute
to diversity, how would that decision undermine future efforts to
ensure that radio ownership is as diverse as the country it serves?
Answer. We believe that the study proposed by MMTC will augment the
record in the pending media ownership quadrennial review proceeding.
The Commission will review the MMTC study, including its methodology,
when it is submitted and take appropriate action at that time based on
all of the evidence in the record.
While it is true that recent research shows that most radio
stations do not produce significant amounts of local news and that most
consumers do not rely on radio stations as their primary source of
local news, the Commission has held that certain radio ownership limits
are necessary to promote viewpoint diversity ``by ensuring a sufficient
number of independent radio voices and by preserving a market structure
that facilitates and encourages new entry into the local media
market.'' 2006 Quadrennial Review Order, 23 FCC Rcd at 2077, 127
(citing 2002 Biennial Review Order, 18 FCC Rcd at 13739, 305-06).
Question 15. The Commission has acknowledged that rural consumers
are experiencing significant problems receiving long distance or
wireless calls on their landline telephones. The problem appears to be
attributable to the use of IP-based least-cost routing providers. What
does the Commission plan to do to ensure that such interconnection and
reliability problems do not become more prevalent as our Nation's
telephone networks transition to wireless and IP-based services?
Answer. First, public safety and consumer protection are core
principles guiding the work of the FCC's Technology Transitions Policy
Task Force on the migration of communications networks and services.
Ensuring the basic ability of all Americans to reliably receive phone
calls is a critical consideration in this effort.
In addition, actions in the USF/ICC Transformation Order are aimed
at ensuring reliable communications, including transitioning from old
systems of intercarrier compensation to ``bill and keep'' (which would
largely eliminate incentives for practices that undermine the
reliability of rural service) and an express prohibition on call
blocking.
The Commission has also created a Rural Call Completion Task Force
to provide intra-agency coordination and a dedicated process for rural
carriers and consumers to report problems.
Question 16. In light of the recent complaint filed in Federal
court by VoIP providers claiming that the Commission lacks authority
under the Communications Act to apply the no-blocking rule to VoIP
calls, is additional authority needed from Congress to address the
rural call completion problem?
Answer. The Commission currently has authority to apply its ban on
call blocking and other rules to address the rural call completion
problem on VoIP services as appropriate. The Commission generally has
not yet decided whether VoIP services that are exchanged with local
exchange carriers over the public switched telephone network should be
classified as ``telecommunications services'' or ``information
services'' under the Communications Act.
If the Commission ultimately determines that such VoIP services are
telecommunications services, it would have authority to ban call
blocking and practices that result in the failure to complete calls to
rural areas as ``unjust and unreasonable practice[s]'' under Section
201(b) of the Communications Act, in addition to other possible sources
of authority.
If the Commission ultimately determines that such VoIP services are
information services, it still would have authority under its Title I
jurisdiction to adopt rules reasonably ancillary to the effective
performance of its statutorily mandated responsibilities, such as
enforcing a prohibition on call blocking and related practices by
carriers.
The Commission has a pending Notice of Proposed Rulemaking seeking
comment on these issues, and the resulting record will inform what
additional steps it is appropriate for the Commission to take in this
regard.
Question 17. More than half of U.S. broadband subscribers are
subject to some form of bandwidth cap or usage-based pricing. Experts
have pointed out that broadband caps are inefficient for addressing
network congestion and may, instead, have anticompetitive effects. What
does the Commission plan to do to ensure that caps do not undermine
access to affordable, high-speed broadband?
Answer. The provisions of the Open Internet order require
transparency in carrier pricing of broadband service. Business model
experimentation can help consumers, in particular providing lower
priced options to low volume users.
At the same time, new business models and new services by broadband
providers should not come at the expense of competition, including from
over-the-top providers, or at the expense of increases in broadband
speed and monthly capacity. We will continue to monitor this space.
______
Response to Written Questions Submitted by Hon. Bill Nelson to
Hon. Julius Genachowski
Online Public File
Question 1. As we discussed during the hearing, top broadcast
stations in the largest of markets are now required to put their public
files, which includes political ad information, on the Internet. Is
there a policy or statutory rationale for not requiring the same
practice from other multichannel video programming distributors that
maintain similar files?
Answer. Currently all television broadcast stations are required to
place substantially all public file contents online, with the exception
of political files. In addition, television stations affiliated with
the top four networks (ABC, CBS, Fox and NBC) in the top 50 Nielsen
markets are required to place their political files online. All other
broadcast television stations will transition their political files
online by July 1, 2013.
The Commission limited the online disclosure requirement to
broadcast television stations because the proceeding at issue grew out
of the digital transition, which had addressed only broadcast TV, and
not radio or MVPDs, and extending the requirements beyond TV stations
was not possible on the existing record.
The Commission also noted that limiting applicability at the outset
would help ease implementation and allow for a smoother transition.
NG911
Question 2. The FCC has stated that one of its objectives is to
ensure that any NG911 solution ultimately includes the ability of cell
phone users to transmit video and photos to 911 call centers in real
time during a public safety or law enforcement event (in addition to
voice and text). However by most estimates, availability of such
capability (photos and video, or MMES--multimedia emergency services)
in a pure IP NG911 environment, is at least 3-10 years away, given the
cost and development required.
If the technology already exists today, to deploy video and photos
in a hybrid SMS/IP solution, that could be deployed now, on existing
analog or digital PSAP (911 call center) infrastructure, and that
technology would be compatible with any future upgraded IP NG911
system, what can the FCC do to help advance such solutions so that they
are available to all Americans?
Answer. The FCC is taking a number of steps to advance NG911 and to
promote a variety of technological solutions that will enhance access
by public safety to cutting edge technology. For example, as a part of
the transition to NG911, the Commission has proposed to require
carriers to provide text-to-911 service as an essential first step. The
four largest wireless providers (AT&T, Verizon Wireless, Sprint Nextel
and T-Mobile) have already voluntarily committed to provide text-to-911
service to public safety answering points capable of receiving texts by
May 15, 2014. The Commission has proposed to require other carriers and
certain interconnected text messaging providers to do the same.
Earlier this month the Commission imposed an obligation on wireless
carriers and certain over the top interconnected text messaging
providers to supply a ``bounce back'' message to consumers that attempt
to send a text to 911 where the service is not supported. This ``bounce
back'' message service must be implemented no later than September 30,
2013.
The Commission is also examining ways to secure the current and
future NG911 infrastructure, and recently adopted a Notice of Proposed
Rulemaking to examine vulnerabilities in the 911 system. This is a part
of the Commission's focus on infrastructure reliability and resiliency
arising out of the communications issues that followed the mid-Atlantic
derecho and Superstorm Sandy.
While the Commission can impose requirements on those within our
jurisdiction, NG911 will also require the commitment and investment
from a variety of stakeholders outside of the Commission's purview.
Carriers, manufacturers, application developers, and state and local
governments must collaborate to ensure the transition is timely, cost-
effective and meets the needs of both public safety and consumers. To
that end, Congress directed the Commission to submit recommendations on
the promotion of NG911, which were submitted earlier this year. The
Commission's report included recommendations that would provide
incentives for each of these stakeholder segments to participate and
promote NG911 deployment, including the provision of needed funding to
state and local authorities.
600 MHz Band Incentive Auction
Question 3. Under the Middle Class Tax Relief and Job Creation Act
of 2012, Congress directed that you only have one chance at this
broadcast incentive auction. Although the market will determine how
much spectrum will be repurposed, it is the Commission that will come
up with a mark and a band plan prior to the auction's start. Will you
seek the most amount of spectrum you can reasonably identify for
commercial use, and at a minimum, to the 120 MHz called for by the
National Broadband Plan?
Answer. The Commission's central goal is to repurpose the maximum
amount of spectrum for flexible licensed and unlicensed use in order to
unleash investment and innovation, benefit consumers, drive economic
growth, and enhance our global competitiveness, while at the same time
enabling a healthy, diverse broadcast television industry.
1755-1780 MHz & Federal Spectrum
Question 4. The March 2012 NTIA Report on the potential for
clearing and reallocation of the 1755-1850 MHz band indicates that full
relocation of government users may take up to 10 years and cost some
$18 billion. I understand these projections were provided by the
affected Federal spectrum users.
Is the FCC working with NTIA to assess and scrutinize these
projections to confirm the accuracy of these projections? Are these
timeframes consistent with major relocation efforts? What can the FCC
do to gain a better understanding of the cost to relocate Federal
spectrum users and to tighten the timeframes for vacating the band?
Answer. The Commission continues to work with NTIA and other
stakeholders, including the Department of Defense, to free up spectrum
for commercial use, consistent with the President's goals, while also
enabling vital government operations to continue. The process requires
complex technical analysis before any decisions are made. Commission
staff has been working with our counterparts at NTIA and DoD to help
facilitate sharing of information with industry stakeholders in order
to perform that technical analysis. We are hopeful that analysis of the
1755 MHz band can be completed in a time-frame that would allow it to
be paired with the 2155 MHz band for auction.
USF
Question 5. The FCC's National Broadband Plan Goal #4 said that
anchor institutions in all communities should have high-capacity 1
Gigabit per second connections by the year 2020. Many schools,
libraries, health clinics and other anchor institutions are straining
to obtain affordable, high-capacity broadband connections to keep up
with the growing demand for Internet-based services. What actions are
planned by the agency to promote high-speed broadband for anchor
institutions and to make these services affordable?
Answer. The Commission has taken several steps to promote high-
speed broadband for anchor institutions:
Through the Commission's Broadband Acceleration Initiative,
we have expanded the reach of robust, affordable broadband by
streamlining access to utility poles and improving policies for
wireless facilities siting. We also have initiated a proceeding
to examine whether federal, Tribal, state, and local government
policies for access to rights of way could be improved, and
have worked closely with other Federal agencies to implement
Executive Order 13616 and streamline access to Federal land and
buildings to speed broadband deployment.
The 2012 Healthcare Connect Order aims to increase access to
broadband and broadband networks for health care providers,
especially those serving rural areas. Eligible anchor
institutions include: public/not-for-profit hospitals, rural
health clinics, community health centers, health centers
serving migrants, community mental health centers, local health
departments or agencies, post-secondary educational
institutions/teaching hospitals/medical schools, or a
consortium of the above.
The 2011 USF/ICC Transformation Order adopts performance
goals to ensure the availability of broadband and voice service
to homes, businesses, and community anchor institutions. To
that end, the Order requires funding recipients to identify and
report on the community anchor institutions that newly gain
access to fixed broadband service as a result of the funding.
The Commission also expects funding recipients to engage with
community anchor institutions in the network planning stages
with respect to the deployment of supported networks.
The Special Access data collection order balances the burden
and need for necessary data for an annual $12-$18 billion
market. Getting these rules right is critical to competition
and providing broadband access for small businesses.
The 2010 E-Rate Reform Order makes it easier for schools and
libraries to obtain highest speeds for the lowest prices by
increasing their options, streamlining application process for
schools and libraries, and strengthening protections against
fraud and abuse.
______
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to
Hon. Julius Genachowski
Question 1. New Jersey's only high power television station, WWOR,
is required to serve the unique needs of New Jersey. But WWOR has
largely failed to do so. The FCC could place additional conditions on
WWOR's license, which expired in 2007, to better ensure local New
Jersey coverage. But the Commission has not acted on that application
for six years now. When can we expect the FCC to make a decision on
WWOR's license renewal application?
Answer. The renewal application is pending as the staff works
through the various issues presented in Petitions to Deny renewal, as
well as a separate misrepresentation issue related to additional
information submitted under the Commission's ex parte rules. There is
no specific time frame for action on the renewal.
Question 2. As you know, I am concerned about allegations of
misconduct and dishonesty by News Corporation in its phone hacking and
bribery allegations overseas, and in its WWOR renewal application.
Despite these serious allegations, there has been no indication that
the FCC is taking seriously its duty to ensure that those entrusted
with serving the public interest are deserving of broadcast licenses.
What has the FCC done to demonstrate that it takes reviews of the
character of its broadcast license holders seriously?
Answer. The Commission takes all character issues seriously when
they are presented--typically through complaints--such as indecent
programming complaints or as Petitions to Deny renewal or license
transfer applications. If a party raises a character issue, the
application is immediately placed on hold and an investigation is
conducted.
Question 3. Many railroads--particularly commuter railroads--are
having difficulty meeting the 2015 requirement to install Positive
Train Control because of a lack of available spectrum. With the 2015
deadline looming, what steps is the FCC taking to accommodate PTC
implementation?
Answer. The FCC staff is working closely with industry
stakeholders, the National Transportation Safety Board, and the Federal
Railroad Administration to address the spectrum needs of the commuter
rails. As you may know, the FCC faces challenges in providing spectrum
for PTC because the Rail Safety Improvement Act of 2008 did not
designate spectrum for PTC or provide funding to rails for purposes of
acquire spectrum to implement PTC. However, the staff is actively
working with key stakeholders to help negotiate spectrum needs on the
secondary market and have granted waivers of technical, construction,
and other rules to enable timely PTC deployment. At staff's request,
PTC-220, a consortium of the largest U.S. freight railroads which hold
substantial nationwide spectrum, is working closely with many commuter
rails to meet their PTC spectrum needs.
Question 4. Nineteen states currently restrict local governments'
ability to offer broadband, even in areas where companies won't make it
available or affordable. I have previously introduced bills that would
prevent states from restricting municipal broadband, and I am
considering reintroducing this legislation. Do you agree that states
should not be permitted to restrict municipalities from offering
broadband to their residents?
Answer. High-speed broadband is vitally important to our global
competitiveness and the continued growth of our economy, and we must
keep pushing for faster speeds and greater capacity through new
investments in broadband networks.
______
Response to Written Questions Submitted by Hon. Claire McCaskill to
Hon. Julius Genachowski
Question 1. Chairman Genachowski and I have both written to the
Federal Aviation Administration (FAA) encouraging the agency to revise
its rules to allow for the expanded use of electronic devices during
flight. The FAA has established an Aviation Rulemaking Committee (ARC)
to look at possible changes to the rules, and the FCC has a
representative on that committee, which will make recommendations to
the FAA Administrator this summer. Given Chairman Genachowski's stated
position on the issue, can I trust that you will be directing the FCC's
representative on the ARC to convey the opinion of the Commission that
the rules should be changed and work to aggressively push the FAA to do
so?
Answer. The Commission's representative is actively participating
in the work of the FAA Aviation Rulemaking Committee examining the
issue. The committee includes representatives from the various
stakeholders, including aircraft manufacturers, pilots, flight
attendants, consumer device manufacturers and various other
organizations with expertise in this area. The committee is conducting
a thorough examination of the issues, is reviewing all relevant data
and plans to make its recommendations to the FAA in late summer. We
will continue to work closely with the FAA to develop common sense
actions to allow for the expanded use of electronic devices during
flight.
Question 2. Although the FCC's reforms to the Universal Service
Fund's (USF) Lifeline program through its February 2012 order were much
needed, and attempted to address duplicative Lifeline support,
ineligibility, deceptive marketing and other concerns raised in my
December 2011 letter to you on this topic, the reforms appear to have
had little effect in limiting the rapid growth of the program.
While I commend the Commission for its attempt to rein in the rapid
growth of the Lifeline program and address the problems you inherited
when the program was expanded to include wireless providers without any
additional safeguards to prevent waste, fraud and abuse, even with the
reform order in place the Lifeline program grew by 26 percent ($445
million) last year. What additional action is the Commission
considering to address waste, fraud and abuse in the Lifeline program?
Question 2a. Specifically, would the Commission consider suspending
new enrollment in the program while the reforms continue to be
implemented?
Answer. The Commission's reforms have fundamentally altered the
course of this program. In each of the past two quarters, Lifeline
disbursements are down compared to the previous quarter. USAC projects
another decrease in the third quarter. Disbursements have declined
steadily from $185.1 million in December 2012 to $145.8 million in May
of this year. Subscribership has steadily declined each month since
reform took effect, dropping from 18.2 million subscribers in August
2012 to 13.35 million in May 2013. The Commission exceeded its $200
million savings target in 2012 and is on track to save $2 billion by
the end of 2014. Certainly, the Commission is monitoring the effect of
its reforms and, based on this, will determine whether additional
reforms are necessary.
Question 2b. Would the Commission consider capping the program?
Answer. When the Commission adopted reforms in early 2012, it
unanimously determined that a savings target was appropriate to
determine the impact of the reforms. We exceeded the $200 million
savings target in 2012, and are on track to save $2 billion by the end
of 2014. We continue to monitor the impact of our reforms and determine
whether additional reforms are necessary.
Question 2c. We are quick in Washington to create new programs but
what we don't do often enough is reevaluate those programs to make sure
they're still needed. The FCC created the Lifeline program nearly 30
years ago to make sure local phone service was still affordable for
low-income Americans following the breakup of AT&T in 1984. Because
technology has changed and competition has grown, basic
telecommunications services are as affordable as ever. I am wondering
if the Commission has recently looked at whether the Lifeline program
is even still necessary, and if not if you would be willing to do so?
Answer. In the 1996 Telecom Act, Congress codified into law the
principle that ``consumers in all regions, including low-income
consumers . . . should have access to telecommunications and
information services.'' The Commission's Lifeline program implements
that directive.
In 2010, the National Broadband Plan recommended that the FCC work
with states on Lifeline issues. Shortly thereafter, the FCC asked the
Federal-State Joint Board on Universal Service (Joint Board) for input
on reforming the Lifeline program. Building on recommendations from the
Joint Board, as well as recommendations in a 2010 report from the
Government Accountability Office (GAO), in 2011 the FCC initiated
reforms of the Lifeline program not only by commencing a comprehensive
rulemaking, but also by implementing intermediate steps directed at
reducing duplicative support, including targeted audits. The rulemaking
ultimately culminated in a complete overhaul of the program in early
2012 when the Commission approved the Lifeline Reform Order. Currently,
the Commission is reviewing the impact of these reforms to gauge
whether additional actions are warranted. As with all our universal
service programs, it is critical that we regularly review Lifeline.
Question 3. Last year Congress passed a Rubio-McCaskill resolution,
S.Con.Res. 50, stating that Internet infrastructure and content should
remain free from international regulation. Members of the U.S.
delegation to the ITU conference in Dubai have indicated that Congress
sending a clear message on the issue was helpful in their negotiations
and that our efforts on this issue should continue, especially since
those nations that want greater regulation of Internet infrastructure
and content will certainly continue in their efforts.
What more can Congress be doing to help promote a free and open
Internet around the world?
A handful of countries, such as China and Iran, want to heavily
censor the Internet content people can access inside their borders,
while many other nations are simply looking for ways to generate
revenue from Internet traffic that moves through their country, much in
the same way they have done with voice communications for years. Are
there policies the United States can and should be promoting around the
globe to help other nations develop their telecommunications
infrastructure, unleash the economic activity that comes with it, and
thus remove their desire to use global Internet traffic as a revenue
source?
Answer. Though the Department of State heads U.S. participation in
international meetings, the Federal Communications Commission is an
expert agency and member of U.S. delegations to many international
telecommunications meetings. In that capacity, at the International
Telecommunication Union's (ITU) World Conference on International
Telecommunications (WCIT) in Dubai last December, we witnessed the
benefit of strong bipartisan support from the U.S. Senate in the form
of S.Con.Res. 50. Such unity of purpose going forward as the United
States seeks to promote a free and open Internet will continue to be
helpful.
The discussions at the WCIT in Dubai highlighted the criticality of
working with developing countries to highlight the benefits of the
Internet and how to achieve those benefits. We are working with the
U.S. State Department and other agencies to continue outreach efforts
that focus on promoting an enabling environment for broadband
development that creates opportunities for the private sector to invest
in innovative technologies. For example, the United States has
encouraged countries to adopt transparent policy and legal frameworks;
open telecommunications markets to competition; adopt licensing and
taxation reforms; establish transparent universal service programs to
support telecommunications instead of subsidies from international
services; and encourage the efficient and innovative use of spectrum
for mobile broadband. We have and will continue to emphasize in our
work with developing countries and others that regulations that seek to
control revenue flows will hinder investment and impede broadband
growth.
The benefits of that outreach were evident at the ITU's recent
World Telecommunications Policy Forum May 14-16, where consensus was
quickly reached on non-binding opinions concerning Internet policy and
governance issues. There are many additional opportunities over the
next several months to advance these outreach efforts, including at the
ITU's Global Symposium for Regulators in July, and bilateral meetings
with individual countries.
Question 4. The upcoming incentive auctions have been pitched to
Congress as a market-based mechanism that would help put spectrum in
the hands of those most capable of unleashing its economic potential.
That was an appealing idea, and on that basis Congress authorized you
to conduct them. Now there is some concern that the Commission is
contemplating going beyond what will be freed up by the auctions and is
considering repurposing or reallocating many more megahertz in rural
areas just through repacking broadcasters and eliminating LPTV and
translator service.
Is your intention to deal only with what is freed up by auctions,
or is your intention to reallocate as much spectrum from broadcasters
to broadband providers as possible?
Has the Commission studied the impact of reclaiming spectrum on
LPTV and translator service, especially in more rural states that rely
heavily on them to reach areas where no other service is available?
Answer. The Commission is committed to running a market-driven
process focused on providing opportunities for broadcasters in all
markets to participate in the incentive auction. To this end, our goal
is to match wireless demand with broadcaster supply as best we can, in
both urban and rural markets. A successful auction will result in
nationwide, contiguous blocks of spectrum for commercial wireless
service while maintaining a vibrant broadcast industry. This newly
available spectrum will enable significant economic growth and consumer
benefits in all areas, urban and rural.
Congress envisioned that full power and Class A TV stations that
choose not to participate, or participate and do not have their bids
accepted, may need to be repacked. Therefore, in the Spectrum Act,
Congress provides relocation funding and requires the Commission to
make reasonable efforts to preserve the coverage areas and populations
served of such stations.
Additionally, Congress chose not to provide special protection in
the Spectrum Act for low power TV and TV translators, which are
secondary services. However, we recognize the important services low
power and TV translator stations provide, particularly in rural areas,
and are seeking input on measures to ensure that their valued
programming continues to reach viewers.
______
Response to Written Questions Submitted by Hon. Amy Klobuchar to
Hon. Julius Genachowski
Question 1. The FCC released its Sixth Order of Reconsideration on
USF Reform. I understand that this order made some near-term changes to
the model-based caps on universal service support. However, there are
still concerns being voiced, including by the Secretary of Agriculture.
How are you responding to the concerns raised by the Secretary of
Agriculture and others to ensure that companies can continue to make
investments to build out future proof broadband networks with some
reasonable understanding of what universal service support will or
won't be available?
Answer. Commission staff worked with RUS throughout the USF reform
process to understand its concerns and to estimate the potential impact
of different reform options on RUS borrowers. We recognize this has
been a period of transition, but it was critical to reform a system
that had become wasteful and inefficient and was focused on phone
service, not broadband. We will continue to work with RUS as we
complete our implementation of reforms.
Question 2. Last year, Congress passed the Spectrum Act,
authorizing the FCC to conduct the world's first-ever incentive
auction. The Act specifically mentions that the FCC should coordinate
with Canada and Mexico prior to the auction to protect broadcasters
from interference in any repacking. I know that this Committee will
continue to look into the implementation of the Spectrum Act as the FCC
moves forward with designing the Spectrum Act, but it is important to
lay the ground work and have clarity when it comes with our
international neighbors. Has the Commission begun coordination with our
Canadian and Mexican counterparts, if so, please comment on any of the
discussions and their progress. Does the timeline for coordination
align with the timeline for television repacking resulting from the
auction?
Answer. The Spectrum Act requires that the FCC coordinate with the
Canadian and Mexican governments during the incentive auction
proceeding, and the FCC and the State Department have been engaged in
on-going discussions with our counterparts in the Canadian and Mexican
telecommunications authorities relating to the auction.
As is typical of open spectrum proceedings with cross-border
implications, the United States and its Canadian and Mexican
counterparts have established government-to-government working
arrangements to help ensure optimal outcomes for all three countries.
Historically, this process has resulted in mutually beneficial
understandings on efficient, interference-free use of the spectrum in
the U.S.-Canada and U.S.-Mexico border areas.
The U.S.-Canada working arrangement has resulted in several
teleconferences over the past several weeks. The Commission expects
these consultations will ultimately lead to a better-designed and more
successful incentive auction, and will create opportunities for greater
spectrum efficiency and band harmonization across North America.
Question 3. Last year in this committee, you came before us just
after taking action on wireline cramming--a practice that has gone on
too long and cost consumers billions of dollars. I recognize there are
intricacies to the wireless industry that vary from wireline billing
practices, but I strongly urge the Commission to take up the issue for
wireless consumers sooner rather than later. Americans are moving to
wireless at exponential rates. Consumers cannot afford to fall victim
to crammers because the FCC does not act. Mr. Chairman, last year you
committed to look into the wireless cramming problems, have you made
any progress or additional findings?
Answer. A pending Notice of Proposed Rulemaking seeks to obtain
information on the scope of wireless cramming complaints. Commission
staff is reviewing the record developed in that proceeding and the data
we are receiving from complaints, as well as the trends in the number
of wireless cramming complaints we are receiving.
On April 18, the Commission held a Public Workshop with industry
experts as well as consumer and state representatives, to help educate
consumers protect themselves from both Bill Shock and Cramming. We plan
to utilize the information obtained on the pending item and at the
workshops to formulate potential next steps.
______
Response to Written Questions Submitted by Hon. Richard Blumenthal to
Hon. Julius Genachowski
Broadband Competition
Question 1. In 2010 the FCC stated in the National Broadband Plan
that, ``. . . there are reasons to be concerned about wireline
broadband competition in the United States. Whether sufficient
competition exists is unclear and, even if such competition presently
exists, it is surely fragile.''
The plan further stated that, ``To ensure that the right policies
are put in place so that the broadband ecosystem benefits from
meaningful competition as it evolves, it is important to have an
ongoing, data-driven evaluation of the state of competition,'' and that
``additional data are needed to more rigorously evaluate broadband
competition.''
The Plan specifically recommended the Commission undertake a number
of reforms to data collection including:
1. ``[C]ollect broadband availability data at the census block
level, by provider, technology and offered speed.''
2. ``[C]ollect data on advertised prices, prices actually paid by
subscribers, plans, bundles and promotions of fixed and mobile
broadband services that have material penetration among users,
as well as their evolution over time, by provider and by
geographic area.'' The Plan stated that in particular, it ``is
crucial that the FCC track and compare the evolution of pricing
in areas where two service providers offer very high peak
speeds with pricing in areas where only one provider can offer
very high peak speeds.''
3. ``[C]ollect information related to switching barriers, such as
early termination fees and contract length.''
The National Broadband Plan also recommended that the Commission
establish a general policy of making the data it collects available to
the public, including via the Internet in a broadband data depository.
These recommendations reflect the comments of the Department of
Justice, who told the Commission that it ``. . . should expand its
efforts to include an assessment of the nature and extent of
competition in each local broadband market.''
Nearly two years after the National Broadband Plan was released,
the Commission issued a Notice of Proposed Rulemaking (NPRM) that
encapsulated many of these recommendations. The Commission has yet to
act on this NPRM.
Chairman Genachowski, Commissioners McDowell, Clyburn, Rosenworcel
and Pai, do you agree with the National Broadband Plan's
recommendations on the need to collect these additional broadband data?
Do you think the Commission, policymakers and the public have the
appropriate data to determine if the Commission's competition policies
are, in the words of the Department of Justice, using the appropriate
``policy levers . . . to produce superior outcomes,'' and if not, what
additional data is needed?
Chairman Genachowski, When will the Commission take action on the
2011 Data NPRM, and will it result in the Commission collecting
detailed pricing data, and more granular availability data at the
census block level? When will the Commission make these data available
to the public?
Answer. Commission staff is working diligently to design a
collection that ensures the FCC has the data it needs while minimizing
the burden on industry and protecting sensitive data. We will update
you as we move forward with these efforts.
Sports Blackouts
Question 2. Over one year ago, I wrote the FCC and requested the
agency allow public comment on a petition for rulemaking asking the
Commission to reexamine the Sports Blackout Rule. This rule is nearly
forty years old and, along with other Federal rules and league
policies, is one of many obstacles making it unreasonably difficult for
fans to watch their favorite teams play.
I thank the Commission for taking my letter seriously and opening a
Notice of Inquiry (NOI) to solicit comments from the public and other
stakeholders. However, that docket was opened in January of 2012 and
the Commission has yet to take any further action.
The response in the proceeding was overwhelming. The NOI garnered
thousands of comments from consumers impacted by local sports
blackouts, including elderly and disabled sports fans unable to attend
live games. The NFL's revised local blackout policy seems to have done
little in the last regular season to help the most heavily impacted
markets. Commenters have proposed several options, including preserving
the status quo, eliminating the Sports Blackout Rule altogether, or
adopting a sunset period requiring a public interest showing to renew
the rule.
Chairman Genachowski, given this robust record, when will the
Commission issue a Notice of Proposed Rulemaking framing these options
and seeking public input?
Chairman Genachowski, Commissioners McDowell, Clyburn, Rosenworcel
and Pai, what else can the Commission do to help fans unable to watch
their favorite teams compete?
Answer. The Sports Blackout NOI proceeding remains pending as the
Bureau staff reviews the record. According to the record, only 6
percent of the 2011 NFL season was blacked out, and most of the
blackouts were centered in 4 markets--Buffalo, Tampa Bay, San Diego and
Cincinnati.
We recognize that this is a topic that is important to sports fans,
but note that the Sports Blackout rules essentially give effect to the
existing system of private contractual agreements between the various
sports leagues and their distributor partners. The underlying issue
remains primarily a copyright issue because the NFL has the right to
negotiate private contractual agreements for carriage rights with the
various distributors. Those private agreements typically include
restrictions on how the content is distributed (i.e., blackout
provisions). Thus, although we are monitoring this situation closely,
the repeal of the Sports Blackout rule without some restrictions on
these private agreements might have little impact on the blackout of
sporting events.
Incentive Auctions
Question 3. In September last year, I joined other members of the
Connecticut Congressional delegation in writing the FCC to inquire
about the process being undertaken in its incentive auction rulemaking.
My concern is that when the FCC moves stations, as it will need to do
to facilitate this auction, it could cause disruptions to Connecticut
constituents relying on free over-the-air broadcasts for news and
information. As we wrote in our letter, we believe that any plan that
the commission adopts should not negatively impact the ability of our
constituents to receive free local programming via free over the air
service.
In you written response, the Commission committed to making the
auction process, ``as transparent and easy-to-understand as possible.''
Further the FCC stated, ``the Commission established a program which is
designed specifically to educate and solicit substantive input from
broadcasters on all aspects of the incentive auction.''
Chairman Genachowski, in addition to generally educating
broadcasters, what additional steps are being taken to minimize the
potential for consumer harm during the repacking process?
Answer. The Spectrum Act requires the Commission to make all
reasonable efforts to preserve coverage area and population served when
repacking stations in connection with an incentive auction. The
Incentive Auction Notice of Proposed Rulemaking sought comment on the
best approaches to achieve that goal. As you note, the Commission
developed the Learn Everything About Reverse-Auctions Now (LEARN)
program in order to help educate stakeholders, particularly
broadcasters. We also recognized in the NPRM that consumer outreach may
be necessary in order to inform the public about possible changes and
what they would need to do to continue to receive the over-the-air
signals--the NPRM sought comment on how and when to do that. The NPRM
also sought input on how the post-auction transition process can be
managed to minimize any disruption to viewers, and the staff is
evaluating the input received.
______
Response to Written Questions Submitted by Hon. William M. Cowan to
Hon. Julius Genachowski
Incentive Auctions and Innovation in Unlicensed Spectrum
Question 1. Chairman Genachowski, I understand that you recently
visited MIT to discuss the future of innovation in communications. Can
you give us a sense of the potential for innovation and economic growth
that making space available for unlicensed use in the broadcast bands
would generate?
Answer. Both licensed and unlicensed spectrum have contributed to
an explosion of new services and applications and increasing mobile
broadband speeds, and both will be essential parts of the landscape in
the future. The Incentive Auction NPRM proposals seek a balanced
approach to repurposing the 600 MHz band for broadband. Freeing up
additional spectrum--both licensed and unlicensed--is key to
maintaining the United States' global leadership in mobile.
The Commission proposed clearing and auctioning as much spectrum as
possible for licensed use, adding spectrum for commercial providers and
substantial revenues for FirstNet and the Treasury. The Commission also
proposed making a significant amount of spectrum available for
unlicensed use, creating an open platform for innovation to drive
economic growth. Unlicensed spectrum also has a proven record of
driving innovation, investment, and economic growth--hundreds of
billions of dollars of value creation for our economy and consumers.
Opening up opportunities for unlicensed spectrum in the 600 MHz band
promises to increase these benefits, unleashing important innovations
like ``Super Wi-Fi,'' next-generation Smart Grid monitoring, ``Smart
City'' monitoring, enhanced distance learning, and services and
applications that innovators have not even thought of yet.
Question 2. I understand the pressure on wireless companies to
expand their spectrum holdings because of the demand from their
customers for video and other high bandwidth services but aren't they
using Wi Fi today to offload some of their traffic and couldn't this
create another mechanism to help them become more spectrum efficient?
Answer. Today, approximately one-third of mobile data traffic is
offloaded to Wi-Fi, as carriers increasingly develop new methods to
manage capacity on their networks.
However, unlicensed spectrum is not a substitute for exclusive use
spectrum to meet the growing demands of consumers' growing reliance on
smart phones, tablets and other devices that use more bandwidth.
The Incentive Auction NPRM proposals seek a balanced approach to
repurposing the 600 MHz band for broadband to free up additional
spectrum--both licensed and unlicensed.
Universal Service Fund
Question 3. Chairman Genachowski and Commissioner McDowell, my
state contributes dramatically more to the USF program than we receive,
which is particularly problematic because so much of western
Massachusetts lacks the wired broadband and wireless infrastructure
that many USF recipient states enjoy. How will the reform of the USF
program ensure that states like Massachusetts get a fair share of the
subsidies the fund releases and in turn makes communications in places
like the Berkshires more reliable?
Answer. According to the most recent data from the State Broadband
Initiative, 15 million Americans still do not have access to broadband.
While we are making progress, more remains to be done. The USF/ICC
Transformation Order is generating hundreds of millions of dollars in
savings that are being redirected to preserve and extend availability
of voice and broadband in areas across the country.
Commission staff continues to make progress in developing a
forward-looking cost model for Connect America Phase II that will be
used to estimate support amounts in price cap areas. The next steps are
to finalize the inputs for the model and address other policy issues
concerning the implementation of Phase II.
Question 4. Chairman Genachowski, the demand for the E-rate program
far exceeds the available reimbursements. And there are some who fear
that adding more services like digital literacy training or e-textbooks
to the E-Rate's allowable use of funds will only deplete the already
oversubscribed program funds. Is there a way to avoid that outcome and
ensure that the focus of the funds remain on the poorest schools and
districts while we simultaneously pursue the distribution of more
advanced services?
Answer. The E-Rate program has achieved remarkable success--97
percent of American schools and nearly all public libraries now have
basic Internet access.
We are at a moment of great opportunity for digital learning.
Broadband and digital tools have game-changing potential for education.
Our significant E-Rate reforms in 2010 were a strong start to lower
costs and expand broadband access to schools and libraries.
As with all our universal service programs, it is critical that we
regularly review E-Rate to ensure it is keeping pace with needs,
operating efficiently and targeting support effectively.
______
Response to Written Questions Submitted by Hon. Roger F. Wicker to
Hon. Julius Genachowski
Question 1. Mr. Chairman, during your tenure you described
incentive auctions to Congress as a ``market-based'' mechanism that
would help put spectrum in the hands of those who valued it most. That
was an appealing idea, and Congress ultimately authorized the FCC to
conduct incentive auctions. I have some concerns, however, that the
Commission is contemplating going beyond just recovering spectrum from
market-based incentive auctions, but is considering repurposing or
``taking'' many more megahertz in rural areas just through the
repacking of broadcasters. This of course could eliminate low power
television and translator services. As you know, low power and
translators connect viewers to their television services particularly
in rural areas across the country. We are talking about wide open
places where viewers have few or no other viewing options. Will you
commit to sticking to your original advocacy of keeping this process a
market-based one that does not take more from rural America than from
urban America?
Answer. The Commission is committed to running a market-driven
process focused on providing opportunities for broadcasters in all
markets to participate in the incentive auction. A successful auction
will result in nationwide, contiguous blocks of spectrum for commercial
wireless service while maintaining a vibrant broadcast industry. This
newly available spectrum will enable significant economic growth and
consumer benefits in all areas, urban and rural.
Congress envisioned that full power and Class A TV stations that
choose not to participate, or participate and do not have their bids
accepted, may need to be repacked. Therefore, in the Spectrum Act,
Congress provides relocation funding and requires the Commission to
make reasonable efforts to preserve the coverage areas and populations
served of such stations.
Additionally, Congress chose not to provide special protection in
the Spectrum Act for low power TV and TV translators, which are
secondary services. However, we recognize the important service low
power and TV translator stations provide, particularly in rural areas,
and are seeking comment on measures to ensure their programming
continues to reach viewers.
Question 2. The Department of Justice wrote to you on January 28
and asked the FCC to defer action on the proposed acquisition of Sprint
by SoftBank, until they and other law enforcement agencies had an
opportunity to review the national security concerns they had with this
transaction. Enclosed is a copy of the letter. As far as I know, the
FCC never officially responded. Furthermore, I understand the FCC has
no plans to pause its own review of the transaction and that the 180
day clock would continue to run.
Have you responded to the Department of Justice letter from January
28, 2013? If so, please send me a copy of the response.
If you have not responded, why not?
Per the DOJ's requests, will the FCC defer action on the Softbank/
Sprint matter until the DOJ referenced review and the Committee on
Foreign Investment in the United States (CFIUS) review are complete?
Answer. As is our standard practice, the FCC is coordinating with
an interagency group comprised of the Department of Justice (DOJ), the
Federal Bureau of Investigation (FBI), and the Committee on Foreign
Investment in the United States (CFIUS) that normally reviews foreign
investments in communications infrastructure and intends to address any
concerns that result from that process in our order. Because concerns
resulting from the interagency group review and related issues are
addressed in our orders, we do not typically respond to the standard
DOJ letters requesting time to review these matters.
Question 3. What does the Commission plan to do to ensure that the
unspent CAF 1 dollars it allocated to support the deployment of rural
broadband services are used (soon) for that purpose? Can you tell me
exactly when the commission plans to wrap this question up? The market,
the parties involved in these disputes deserve certainty.
Answer. Last week, I circulated an order to my colleagues that
would make an additional $300 million in Connect America Phase I
funding available to extend broadband to unserved areas in price cap
territories. I hope the Commission will act on this draft order soon.
Question 4. I am concerned about the manner in which the FCC has
handled petitions seeking agency action. I understand that, in 2012,
FCC staff dismissed a Petition for Declaratory Ruling filed by Anda,
Inc., a generic pharmaceutical distributor, that had stalled for nearly
17 months without any agency action. The petitioner's request for full
Commission review of that order is now almost a year old, and Chairman
Genachowski told House members at a recent Energy and Commerce
Committee hearing that he ``anticipate[s]'' that an order resolving
that request would be ``circulated . . . in the next few months.''
A more concrete commitment is warranted at this stage, particularly
given the FCC's claim in a recent appellate proceeding that Anda and
similarly situated parties must present their arguments to the
Commission, rather than directly to courts. Will the FCC commit to
circulating an order resolving this matter by no later than April 30,
2013?
Answer. On May 2, 2012, the Commission's Consumer & Governmental
Affairs Bureau issued an order dismissing a Petition filed by Anda,
Inc. that requested a declaratory ruling clarifying the statutory basis
for a Commission rule on fax advertisements. The Administrative
Procedure Act provides that an agency, in its sound discretion, may
issue a declaratory order to terminate a controversy or remove
uncertainty, but the Bureau found that the Petition did not identify
any controversy to terminate or uncertainty to remove. The Bureau also
concluded that, to the extent that the Petition challenged the
Commission's authority to issue the rule itself, the challenge was
time-barred, because under the Communications Act and the Commission's
procedural rules, requests for reconsideration of this rule were due in
June 2006. The Bureau also observed that the Commission's order
adopting the rule had specifically tied the opt-out notice requirement
to the purposes of section 227 of the Act.
It is not uncommon for a Bureau to dismiss a petition for
declaratory ruling when, in the opinion of the Bureau, no controversy
or uncertainty has been identified. Anda has filed an Application for
Review of the Bureau order to the full Commission, which is currently
under review. Staff continues to work diligently on this matter,
including a draft order resolving the Application for Review that will
be circulated to the other Commissioners for their consideration.
______
Response to Written Questions Submitted by Hon. Roy Blunt to
Hon. Julius Genachowski
Question 1. At a hearing in front of the House Energy and Commerce
Committee last year, you stated your commitment to continuing the FCC's
longstanding, hands-off approach to fiber and Internet Protocol
Networks. In Kansas City, Missouri and Kansas City, Kansas, a new-
market entrant to the broadband market is building a fiber network that
is over 100 times faster than standard broadband. Other competitors in
these markets are working to upgrade their networks and increase their
broadband speeds as well. This is a prime example of private industry
reacting to competitive forces in a dynamic marketplace and was
possible because of the Commission's commitment not to intercede in the
expansion of IP and fiber network build outs. Are you still committed
to that maintaining the Commission's hands-off approach toward IP-based
networks?
Answer. Recent increases in broadband deployments and speeds have
been driven by private investment and by policies that created and
maintain the conditions necessary to enable competition.
In response to the growth of IP networks, last December the
Chairman formed the Technology Transitions Policy Task Force to provide
recommendations to modernize the Commission's policies in order to
empower and protect consumers, promote competition, and ensure network
resiliency and reliability. The Task Force is focused on three key
transitions: (1) TDM to IP, (2) copper to fiber, and (3) wireline to
wireless; it is currently conducting a data-driven review and to
develop recommendations. The Task Force builds on actions the
Commission already taken to address technology transitions, including:
overhauling the Universal Service Fund from voice to broadband;
transforming the Intercarrier Compensation system; and advancing Next
Generation 911 and direct access to numbering resources by VoIP
providers.
Question 2. Mr. Chairman, as part of the legislation which
authorized the voluntary incentive auctions, Congress authorized a
broadcaster relocation fund, specifically to compensate broadcasters
who will not participate in the voluntary incentive auction but who
will still be relocated, or ``repacked'' into different frequencies as
a result of what we are all hoping will be a successful auction. The
fund was authorized at $1.75 billion.
Do you forecast this funding level being adequate for the repacking
of the broadcasters who will not participate in the voluntary auction?
Is the Commission treating the relocation funding level of $1.75
billion as a cap on outlays for the moving of broadcasters?
Are there any costs associated with moving broadcasters, such as
new translators or power-increase requirements which you do not believe
the fund will be used for compensation?
Answer. The Commission will not know how many stations need to be
repacked, or the ultimate cost of such repacking, until we conduct the
incentive auction. For full power and Class A TV stations that must
relocate due to the auction, the Spectrum Act provides $1.75 billion to
``reimburse costs reasonably incurred'' by such stations. To ensure
that broadcasters' costs and relocation needs are properly met, we are
seeking comment on:
Proposals to allow broadcasters to choose whether to receive
advance relocation funds based on estimated costs, or to
receive reimbursement for the actual costs incurred with
repacking.
What ``reasonable'' relocation costs are, including whether
to allow for reimbursements for facility upgrades.
How to prioritize reimbursements in the event that total
relocation reimbursements exceed $1.75 billion.
Proposals to allow stations to seek a waiver of service
rules to provide more flexible use of its spectrum in lieu of
receiving reimbursement for relocating.
We are studying the costs, impacts, and logistical challenges
involved in the repacking. As always, we will carefully consider all
comments that we receive before moving forward on implementing the
auction.
______
Response to Written Questions Submitted by Hon. Kelly Ayotte to
Hon. Julius Genachowski
Question 1. Chairman Genachowski, is the Pentagon giving you the
information you need to help facilitate bringing spectrum to the market
in a timely manner?
Answer. The Commission continues to work with NTIA and other
stakeholders, including the Department of Defense, to free up spectrum
for commercial use, consistent with the President's goals, while also
enabling vital government operations to continue.
The process requires complex technical analysis before any
decisions are made. Commission staff has been working with our
counterparts at NTIA and DoD to help facilitate sharing of information
with industry stakeholders in order to perform that technical analysis.
We are hopeful that analysis of the 1755 MHz band can be completed in a
time-frame that would allow it to be paired with the 2155 MHz band for
auction.
Question 2. Chairman Genachowski, The New Hampshire congressional
delegation sent you a letter earlier this month regarding the spectrum
incentive auction proceeding. The letter outlines our interest in
preserving viewer access to local television during any reassigning of
television channels as may be necessary through the auction process.
Can you please give me an update on discussions that may already
occurred or that will take place with Canadian officials on
international coordination of television channel assignments? What
assurances can you give me that there will be little or no
interruptions moving forward?
Answer. The Spectrum Act requires that the FCC coordinate with the
Canadian and Mexican governments during the incentive auction
proceeding, and the FCC and the State Department have been engaged in
on-going discussions with our counterparts in the Canadian and Mexican
telecommunications authorities relating to the auction.
As is typical of open spectrum proceedings with cross-border
implications, the United States and its Canadian and Mexican
counterparts have established government-to-government working
arrangements to help ensure optimal outcomes for all three countries.
Historically, this process has resulted in mutually beneficial
understandings on efficient, interference-free use of the spectrum in
the U.S.-Canada and U.S.-Mexico border areas.
The U.S.-Canada working arrangement has resulted in several
teleconferences over the past several weeks. The Commission expects
these consultations will ultimately lead to a better-designed and more
successful incentive auction, and will create opportunities for greater
spectrum efficiency and band harmonization across North America.
______
Response to Written Questions Submitted by Hon. Dean Heller to
Hon. Julius Genachowski
I appreciate the testimony and your candid answers during the
hearing. I would like to thank you for your service on the Federal
Communications Commission.
Question 1. The hearing touched on many themes that I believe the
Committee should look at including process reform, the looming
transition to IP and the Spectrum auction. However, an opportunity for
the Chairman and the Commissioners to share what they see ``over the
hill'' was not discussed at length. I would like to provide you with an
opportunity to share what you believe are some issues that may not have
been discussed at the hearing.
The spectrum auction is of the utmost importance. Is the Commission
going to set a target date of 2014? What are the challenges with
hitting this date?
Answer. The incentive auction involves many complex policy and
technical considerations, and Commission staff and world-renowned
auction experts are hard at work on these issues. We issued a Notice of
Proposed Rulemaking last fall that sought comment on proposals for the
incentive auction and we have received more than 400 responses from
stakeholders to date. Staff is currently reviewing those responses and
continuing to receive input from outside parties to help develop final
rules. We anticipate adopting an order in the incentive auction
proceeding in 2013 and conducting that auction in 2014.
Question 2. The Commission's spectrum incentive auction process has
the potential for channel reassignment. Nevada has over 300 translators
and low power TV stations, any repacking will put a significant burden
on these stations. Is the FCC taking this into consideration? Can the
Commission preserve viewer access to local channels and still hit the
target of 2014 for the auction to take place?
Answer. Congress chose not to provide special protection in the
Spectrum Act for low power TV and TV translators, which are secondary
services. However, we recognize the important service low power and TV
translator stations provide, particularly in rural areas, and are
seeking comment on measures to ensure their programming continues to
reach viewers.
Question 3. According to the National Broadband Plan wireless
backhaul is ``critical to the deployment of wireless broadband and
other wireless services,'' particularly ``when fiber is not proximate
to a cell site.'' I understand that the existing wireless backhaul
networks face a number of regulatory and technological constraints that
limit their potential capacity. These independently-powerable services
are also important to undergird FirstNet, the national first responder
network. How is the FCC working to speed the deployment of wireless
backhaul services in new frequency bands?
Answer. In 2010, the Commission initiated a proceeding that has
resulted in 650 MHz of additional spectrum, mostly in rural areas,
being made available for wireless backhaul. Additionally, the
Commission eliminated unnecessary restrictions and established build-
out requirements for certain microwave bands to accelerate the
availability of this spectrum, which is used for wireless backhaul.
Question 4. What is the current state of wireless backhaul
deployment in the 24 and 39 GHz bands?
Answer. To date, most wireless backhaul deployment has occurred in
microwave bands lower than 24 or 39 GHz (for example, the 6 GHz, 11
GHz, 18 GHz, and 23 GHz bands). IDT Spectrum (742 licenses) and
Spectrum Holdings Technologies (199 licenses), have reported that they
have met the build-out requirements for their licenses in the 39 GHz
band. Fibertower, which held 103 out of 111 issued 24 GHz licenses and
was the second largest licensee in the 39 GHz band with 634 licenses,
built out only 48 of its 737 total licenses in the 24 and 39 GHz bands.
Question 5. Has any company tried to develop new technology that is
optimized for wireless backhaul in these new frequency bands?
Answer. The licensees in the 24 and 39 GHz bands confirm that
equipment is available for wireless backhaul.
Question 6. The FCC has moved to reclaim wireless backhaul spectrum
in the 24 and 39 GHz range from a number of wireless backhaul providers
despite the providers request for additional time to complete their
roll-out. If the FCC ultimately reclaims spectrum in the 24 and 39 GHz
range, how long will it take, including the necessary legal
proceedings, for a new wireless backhaul provider to build-out a
backhaul service with the seized spectrum?
Question 6a. In at least one case on Appeal to the Full FCC
Commission, a significant wireless backhaul provider, from whom the FCC
seized spectrum, has proposed an aggressive build-out plan that will
have its wireless backhaul network up and running in 18 months. If the
FCC were to prioritize the rollout of wireless backhaul services, would
it be more expedient to grant an 18 month extension and allow a planned
expansion to move forward or can the FCC clear the spectrum and find
another company to build-out the necessary wireless backhaul in less
than 18 months?
Question 6b. Will the FCC work to ensure that it takes all
appropriate actions, including reviewing prior staff-driven efforts
intended to strip existing wireless backhaul providers of their
spectrum, to speed the build-out of needed wireless backhaul services?
Answers to Questions 6-6b. Only one licensee, Fibertower, failed to
demonstrate compliance with the substantial service requirements for 94
of its 24 GHz licenses and 595 of its 39 GHz licenses. The Wireless
Telecommunications Bureau (Bureau) denied Fibertower's requests for an
additional extension of time to demonstrate substantial service for
these licenses, as well as its associated requests for waiver of the
June 1, 2012 substantial service deadline.
Based on these determinations, these licenses automatically
terminated, by operation of Commission rule, as of June 1, 2012. The
Bureau also denied similar requests for extensions in the LMDS band.
None of the terminated licenses was being used to provide backhaul
service.
The Commission seeks to make spectrum in inventory available in an
efficient and timely manner. As a general matter, once a licensee
forfeits a license and it reverts back to inventory, the FCC can move
directly to re-auction. With respect to the 24 GHz and 39 GHz licensees
that automatically terminated, a bankruptcy court injunction currently
prohibits the Commission from reassigning those licenses until the
previous licensee exhausts its appeal rights.
Fibertower continues to hold more than 3,000 additional licenses
(primarily in the 11 GHz, 18 GHz, and 23 GHz bands) used to provide
wireless backhaul services. Those licenses remain in effect. The
Commission is giving careful, thorough, and expeditious consideration
to Fibertower's pending application for Commission review of the
Bureau's action denying its extension request.
The Commission will continue to take all appropriate actions to
promote the availability of wireless backhaul.
______
Response to Written Questions Submitted by Hon. Dan Coats to
Hon. Julius Genachowski
Question 1. Before proceeding to a final rule that would allow
unlicensed users to access the 5.9 GHz spectrum, will the FCC wait for
the results of the testing being undertaken by the National
Telecommunications and Information Administration (NTIA) to determine
whether this spectrum sharing could compromise the life-saving crash
avoidance technologies that are being developed by the auto industry
and the U.S. Department of Transportation using vehicle-to-vehicle
communications over this frequency band?
Question 2. How is the FCC working with the National
Telecommunications and Information Administration (NTIA) to study
whether and to what extent unlicensed users will be able to share the
5.9 GHz frequency band in a way that does not compromise the life-
saving crash avoidance technologies that are being developed by the
auto industry and the U.S. Department of Transportation using vehicle-
to-vehicle communications over this frequency band?
Answer to Questions 1 and 2. The Commission will abide by the
statutory requirements with respect to unlicensed use in the 5 GHz
band.
FCC staff expects that Intelligent Transportation Systems (ITS) and
unlicensed Wi-Fi use will be compatible as both operate within the
802.11 family of technical standards. The FCC has been in communication
with NTIA and the Department of Transportation and is aware of NTIA's
planned schedule for studying the 5.9 GHz spectrum. The Commission has
also been in communication with the Intelligent Transportation Systems
industry consortium (ITSAmerica), the IEEE 802.11 standards group, and
equipment manufacturers, some of which have interests in both robust
Intelligent Transportation Systems and more unlicensed access to
spectrum.
We will continue discussions with these interested parties as our
rulemaking process continues.
______
Response to Written Questions Submitted by Hon. Barbara Boxer to
Hon. Robert M. McDowell
Question 1. On November 30, 2012, I along with eight of my
colleagues sent a letter urging you not to relax the Commission's
cross-ownership rules without responding to our concerns about the low
levels of female and minority ownership of broadcast radio and
television stations. In February, the Commission announced that it
would be delaying its vote on the new rules as it awaits the results of
a study by the Minority Media and Telecommunications Council regarding
the effects of cross-ownership rules on minority ownership and
newsgathering.
Given the fact that MMTC's study is to be conducted by a broadcast
industry analyst who is backed by the newspaper and broadcast industry
associations and has publicly supported a relaxation of the cross-
ownership rules, do you believe the study represents an independent and
impartial analysis of the impact of cross ownership on minority owners?
Answer. As the study has not yet been produced, I have not seen it.
Accordingly, it is not possible for me to determine whether it is an
independent and impartial analysis of whether, and to what extent,
cross ownership affects minority and women ownership. It is my
understanding, however, that this study will be peer-reviewed and will
be released for public comment. Therefore, all interested parties will
have the ability to critique the findings at that time. Furthermore, as
of April 8, 2013, I have recused myself from all matters as I prepare
to depart the Commission, so I will not be participating in future
proceedings regarding media ownership and, in light of the numerous
stakeholders involved, it would not be appropriate for me to opine on
the hypothetical value of this study.
Question 1a. Do you believe the study's methodology will provide
the kind of analysis required by the Third Circuit Court of Appeals
when it ordered the Commission to provide better justification for
proposed diversity efforts?
Answer. It is my understanding that the MMTC study is limited to
evaluating whether eliminating or modifying the Commission's media
cross-ownership rules, in the context of our current quadrennial media
ownership proceeding, would have an adverse effect on minority and
women ownership. It is unlikely that this study will provide an
adequate justification to enhance our efforts to increase minority and
women ownership. The Commission must be mindful that any action the
Commission would take regarding race-and/or gender-based regulations
must satisfy the rigorous demands of the Equal Protection Clause, as
interpreted under the Supreme Court's Adarand line of cases. Throughout
almost seven years at the Commission, I have repeatedly called for such
studies, commonly referred to as diversity studies or Adarand studies,
to be conducted. My efforts to promote diversity in the broadcast
marketplace have been recognized by the National Association of Black
Owned Broadcasters and the Latinos in Information Sciences and
Technology Association. Accordingly, I will repeat: The Commission
needs to complete these diversity studies as soon as possible to assist
us in supporting any new race-and/or gender-based regulations and to
determine the best approaches to increase media diversity, in
accordance with the Constitution.
Question 1b. Does the Commission believe that radio contributes to
viewpoint diversity?
Answer. I have stated on several occasions that, under section
202(h) of the Telecommunications Act of 1996,\1\ the FCC must modernize
all of its media ownership rules to reflect current economic and
marketplace realities, including the development of new media
platforms--such as the Internet, satellite radio and mobile devices--
and that any and all unnecessary mandates should be eliminated. Today,
whether in their homes, at work, or in their cars, Americans have
access to their favorite audio programming not only from radio, but
from all of these new outlets as well. Furthermore, there is evidence
before the Commission that demonstrates that cross ownership does not
negatively affect viewpoint diversity and may actually increase the
quantity and quality of local news and information provided by
commonly-owned outlets to benefit the American consumer. As of April 8,
2013, however, I have recused myself from all matters as I prepare to
depart the Commission, so I will not be participating in future
proceedings regarding media ownership and, in light of the numerous
stakeholders involved, it would not be appropriate for me to opine
further on this matter.
---------------------------------------------------------------------------
\1\ Section 202(h) of the Telecommunications Act of 1996 states
that:
The Commission shall review its rules adopted pursuant to this
section and all of its ownership rules quadrennially. . .and shall
determine whether any of such rules are necessary in the public
interest as the result of competition. The Commission shall repeal or
modify any regulation it determines to be no longer in the public
interest.
Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56,
111-12 Sec. 202(h) (1996); Consolidated Appropriations Act, 2004, Pub.
L. No. 108-199, Sec. 629, 118 Stat. 3, 99-100 (2004) (amending Section
202(h) of the 1996 Act). I concurred in the December 2011 notice of
proposed rulemaking, because the Commission appears to be prepared to
accept a regulatory status quo while I think major changes are
necessary and required by Section 202(h).
Question 1c. If the Commission were to conclude that radio does not
contribute to diversity, how would that decision undermine future
efforts to ensure that radio ownership is as diverse as the country it
serves?
Answer. As of April 8, 2013, I have recused myself from all matters
as I prepare to depart the Commission, so I will not be participating
in future proceedings regarding media ownership and, in light of the
numerous stakeholders involved, it would not be appropriate for me to
opine on this matter. If the Commission undertakes diversity studies,
however, and finds that there is a compelling government interest, as
informed by the Adarand line of cases, the Commission could implement
rules that would promote minority and women ownership across all media
outlets. For example, diversity studies may provide the justification
for a new congressionally-mandated tax certificate program and for
Commission rules, such as minority-based bidding credits and incubator
programs.
Question 2. The Commission has acknowledged that rural consumers
are experiencing significant problems receiving long distance or
wireless calls on their landline telephones. The problem appears to be
attributable to the use of IP-based least-cost routing providers. What
does the Commission plan to do to ensure that such interconnection and
reliability problems do not become more prevalent as our Nation's
telephone networks transition to wireless and IP-based services?
Answer. As for what the Commission plans to do in the future
regarding this issue, I respectfully defer to the Chairman who controls
the FCC's agenda.
Question 3. In light of the recent complaint filed in Federal court
by VoIP providers claiming that the Commission lacks authority under
the Communications Act to apply the no-blocking rule to VoIP calls, is
additional authority needed from Congress to address the rural call
completion problem?
Answer. While I have not taken a position on whether additional
authority would be needed to solve this particular problem, generally
speaking, it has been my opinion that clear direction from Congress is
preferable as the FCC implements our Nation's communications laws.
Furthermore, as of April 8, 2013, I have recused myself from all
matters as I prepare to depart the Commission, so I will not be
participating in future proceedings regarding rural call completion
and, in light of the numerous stakeholders involved, it would not be
appropriate for me to opine further on this matter.
Question 4. More than half of U.S. broadband subscribers are
subject to some form of bandwidth cap or usage-based pricing. Experts
have pointed out that broadband caps are inefficient for addressing
network congestion and may, instead, have anticompetitive effects. What
does the Commission plan to do to ensure that caps do not undermine
access to affordable, high-speed broadband?
Answer. Under a deregulatory structure, the deployment of broadband
throughout our Nation has been swift and strong. The impressive growth
curve shows that between 2003 and 2009, broadband deployment has
increased from reaching 15 percent of Americans in 2003 to 95 percent
of Americans in 2009.\2\ Moreover, mobile broadband has been the
fastest growing segment of the market and the increased use of wireless
devices, in particular, has been tremendous over the past couple years.
Between mid-year 2011 and mid-year 2012, the number of smartphones that
were active on carriers' networks increased by 36.5 percent for a total
of 130.8 million and, during that same time period, the number of
wireless-enabled tablets, laptops, netbooks and wireless broadband
modems that were active on carriers' networks increased by 42
percent.\3\
---------------------------------------------------------------------------
\2\ See, e.g., FCC, Omnibus Broadband Initiative (OBI), Connecting
America: The National Broadband Plan, GN Docket No. 09-51 (2010).
\3\ See CTIA's Mid-Year 2012 Semi-Annual Wireless Survey at 10
(rel. Nov. 2012).
---------------------------------------------------------------------------
As I have said many times before, generally speaking, the Internet
has been the greatest deregulatory success story in history, and the
government should not interfere with this success. Rather, the
government should let the markets work and let consumers choose. As
such, it has been my opinion that broadband providers should have the
means to manage their systems. Also, if anticompetitive behavior is
uncovered, existing laws can address such behavior.
As for what the Commission plans to do in the future regarding this
issue, I respectfully defer to the Chairman who controls the FCC's
agenda.
______
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to
Hon. Robert M. McDowell
Question 1. New Jersey is a net contributor of close to 200 million
dollars a year to the Universal Service Fund (USF). As the USF has
grown, so has the burden on New Jersey and other donor states. As the
FCC moves from distribution reform to contribution reform, should the
FCC take into consideration the impact that contribution reform
proposals could have on net contributor states like New Jersey?
Answer. During my tenure at the FCC, I have regularly highlighted
the dire need for the Commission to work with all stakeholders to craft
pragmatic and fair reforms of the universal service contribution
methodology in a manner that is within the Commission's authority.
Naturally, net contributor states make up one of the stakeholder
groups.
Question 2. What contribution reform proposals could you consider
that would best alleviate the burden on net contributor states like New
Jersey?
Answer. With all due respect, at this point, it is impossible to
answer this question without having access to the relevant data from
the various industry sectors that would be impacted by type of reforms.
______
Response to Written Questions Submitted by Hon. Claire McCaskill to
Hon. Robert M. McDowell
Question 1. Chairman Genachowski and I have both written to the
Federal Aviation Administration (FAA) encouraging the agency to revise
its rules to allow for the expanded use of electronic devices during
flight. The FAA has established an Aviation Rulemaking Committee (ARC)
to look at possible changes to the rules, and the FCC has a
representative on that committee, which will make recommendations to
the FAA Administrator this summer.
I am convinced, and I think most Americans agree, any safety
concerns that might have once existed to justify the current rules have
been addressed by advances in technology both on the airplane itself
and in consumer electronics. While I recognize the decision is not one
that rests with the FCC, as leaders on technology issues--and as one of
only three government agencies with a seat at the table, and the only
not under the Department of Transportation--I want to know if all of
the Commissioners share those views on this issue.
Answer. I have always supported the periodic review of rule to
determine if marketplace conditions have changed to allow for the
elimination of unnecessary regulations. There have been significant
advancements in technology and, therefore, it is common sense to review
and evaluate whether current regulations restricting the use of
electronic devices on airplanes are still necessary. That said, it is
my opinion that the FAA, as the expert agency, should determine whether
such devices interfere with airplane system design and when, and to
what extent, these devices can be used safely during flight. As of
April 8, 2013, I have recused myself from all matters as I prepare to
depart the Commission and, in light of the numerous stakeholders
involved, it would not be appropriate for me to opine further on this
matter.
Question 1a. Given Chairman Genachowski's stated position on the
issue, can I trust that you will be directing the FCC's representative
on the ARC to convey the opinion of the Commission that the rules
should be changed and work to aggressively push the FAA to do so?
Answer. I defer to the Office of the Chairman, who will select and
instruct the representative to ARC.
Question 2. Although the FCC's reforms to the Universal Service
Fund's (USF) Lifeline program through its February 2012 order were much
needed, and attempted to address duplicative Lifeline support,
ineligibility, deceptive marketing and other concerns raised in my
December 2011 letter to you on this topic, the reforms appear to have
had little effect in limiting the rapid growth of the program.
While I commend the Commission for its attempt to rein in the rapid
growth of the Lifeline program and address the problems you inherited
when the program was expanded to include wireless providers without any
additional safeguards to prevent waste, fraud and abuse, even with the
reform order in place the Lifeline program grew by 26 percent ($445
million) last year. What additional action is the Commission
considering to address waste, fraud and abuse in the Lifeline program?
Specifically, would the Commission consider suspending new enrollment
in the program while the reforms continue to be implemented? Would the
Commission consider capping the program?
Answer. Since all of these questions seek answers as to what the
Commission plans to do in the future regarding this issue, I
respectfully defer to the Chairman who controls the FCC's agenda.
Regarding a cap, however, I will note that I have supported imposing a
long-term fixed budget or cap on the Lifeline program in the past. As
of April 8, 2013, I have recused myself from all matters as I prepare
to depart the Commission, so I will not be participating in future
proceedings regarding the Universal Service Fund and, in light of the
numerous stakeholders involved, it would not be appropriate for me to
opine further on this matter.
Question 3. We are quick in Washington to create new programs but
what we don't do often enough is reevaluate those programs to make sure
they're still needed. The FCC created the Lifeline program nearly 30
years ago to make sure local phone service was still affordable for
low-income Americans following the breakup of AT&T in 1984. Because
technology has changed and competition has grown, basic
telecommunications services are as affordable as ever. I am wondering
if the Commission has recently looked at whether the Lifeline program
is even still necessary, and if not if you would be willing to do so?
Answer. Since this question asks what the Commission plans to do in
the future regarding this issue, I respectfully defer to the Chairman
who controls the FCC's agenda.
Question 4. In order to keep up with the demand for spectrum, many
in the private-sector believe efforts need to be taken to clear some of
the federally-occupied spectrum for commercial use, most significantly
spectrum currently occupied by the Department of Defense. Chairman
Genachowski and I have discussed this issue but I am interested in the
views of all of the commissioners.
With the exponential rise in demand for mobile broadband services,
we need to look at all potential resources for spectrum repurposing--
including Federal Government users. The GAO recently reported that the
total percentage of the most highly-valued spectrum exclusively or
predominantly used by the Federal Government is as high as 57 percent.
Given Federal agency budgets, many of these systems are not up-to-date
and thus operate inefficiently, and some Federal uses could be served
by commercial mobile providers. Are there specific instances in which
you believe Federal spectrum could be operated more efficiently?
Answer. First and foremost, the Federal use of spectrum should be
audited so that we have a full picture of how Federal Government
agencies are using spectrum. Although some estimate that the Federal
Government occupies approximately 60 percent of the best spectrum,
others put that figure at over 80 percent. Nonetheless, without an
audit, it is difficult to point out specific instances where Federal
spectrum could be operated more efficiently.
Question 4a. In addition to this Committee I also serve on the
Armed Services Committee. I have started to look at ways we can
incentivize Federal agencies--including the Department of Defense--to
clear or share spectrum, to free up more spectrum for commercial
auction. Based on your experience working with Federal spectrum users,
what ideas can you offer for creating such incentives?
Answer. Congress, the Executive Branch and the FCC should all work
together to implement policies that would give Federal users of
spectrum an incentive to relinquish it for auction. This scenario could
be a win-win-win for the government, the economy and consumers alike.
For instance, Federal spectrum users that clear spectrum could receive
financial incentives funded by the auctions. In today's economic
climate, agencies are more likely to surrender spectrum if they will
receive compensation to overcome budget cuts.
I would like to note that spectrum ``sharing,'' which is a vague
and ill-defined concept, should not be seen as a substitute for
auctioning more spectrum for exclusive-use licenses--especially Federal
spectrum. Spectrum sharing is not a panacea and should only be a
fallback once we have fully exhausted options for auctioning exclusive
licenses for cleared spectrum. Proposed sharing arrangements are not
designed for or suited to robust, high-powered and ubiquitous
commercial availability.
Further, there is also no evidence that spectrum sharing with the
Federal Government will allow for the more-timely deployment of Federal
spectrum for commercial use. Spectrum sharing, by its very nature,
raises interference issues that need to be analyzed before sharing can
occur. For these reasons, we cannot be complacent. Nor should we stop
advocating for additional Federal spectrum to be auctioned for
exclusive use licenses.
Question 5. Last year Congress passed a Rubio-McCaskill resolution,
S.Con.Res. 50, stating that Internet infrastructure and content should
remain free from international regulation. Members of the U.S.
delegation to the ITU conference in Dubai have indicated that Congress
sending a clear message on the issue was helpful in their negotiations
and that our efforts on this issue should continue, especially since
those nations that want greater regulation of Internet infrastructure
and content will certainly continue in their efforts. What more can
Congress be doing to help promote a free and open Internet around the
world?
Answer. Thank you to you, Senator Rubio and your House counterparts
for your leadership on the concurrent resolutions. As a member of the
U.S. delegation to the WCIT in Dubai, I can attest that Congress's
bipartisan resolution was crucial to our negotiations and sent a clear
and definitive message regarding U.S. policy to states interested in
the international regulation of the Internet. Codifying the resolution
language would be a powerful way to continue the United States' efforts
to promote an open and freedom-enhancing Internet worldwide.
Question 5a. A handful of countries, such as China and Iran, want
to heavily censor the Internet content people can access inside their
borders, while many other nations are simply looking for ways to
generate revenue from Internet traffic that moves through their
country, much in the same way they have done with voice communications
for years. Are there policies the United States can and should be
promoting around the globe to help other nations develop their
telecommunications infrastructure, unleash the economic activity that
comes with it, and thus remove their desire to use global Internet
traffic as a revenue source?
Answer. Yes. Our government should educate developing nations about
the importance of Internet freedom. We should stress that less
regulation and taxation of Internet access results in increased
investment, deployment, adoption, prosperity and freedom.
Question 6. The upcoming incentive auctions have been pitched to
Congress as a market-based mechanism that would help put spectrum in
the hands of those most capable of unleashing its economic potential.
That was an appealing idea, and on that basis Congress authorized you
to conduct them. Now there is some concern that the Commission is
contemplating going beyond what will be freed up by the auctions and is
considering repurposing or reallocating many more megahertz in rural
areas just through repacking broadcasters and eliminating LPTV and
translator service. Is your intention to deal only with what is freed
up by auctions, or is your intention to reallocate as much spectrum
from broadcasters to broadband providers as possible?
Answer. As of April 8, 2013, I have recused myself from all matters
as I prepare to depart the Commission, so I will not be participating
in future proceedings regarding the incentive auction and, in light of
the numerous stakeholders involved, it would not be appropriate for me
to opine on this matter.
Question 6a. Has the Commission studied the impact of reclaiming
spectrum on LPTV and translator service, especially in more rural
states that rely heavily on them to reach areas where no other service
is available?
Answer. On September 28th, the Commission adopted a notice of
proposed rulemaking initiating the implementation of the incentive
auction provisions of the Middle Class Tax Relief and Job Creation Act
(``Spectrum Act''). As you are aware, LPTV and translators are
secondary services and such stations are displaced if they cause
unacceptable interference to a full power station or other primary
spectrum users. Further, the Spectrum Act does not include or protect
these stations.
In the notice, the Commission recognized that LPTV and translator
stations will be affected by the incentive auction and repacking
process and requested input on various issues relating to these
services. For instance, we seek input on voluntary channel sharing for
stations and also invite comment on any measures to help ensure that
this important programming continues to reach viewers. The Commission
appreciates the benefits that LPTV and translator stations provide to
their communities and will have to consider the best means to preserve
low-power broadcast opportunities while keeping in mind the mandates
and goals of the Spectrum Act.
______
Response to Written Questions Submitted by Hon. Richard Blumenthal to
Hon. Robert M. McDowell
Broadband Competition
Question 1. In 2010 the FCC stated in the National Broadband Plan
that, ``. . . there are reasons to be concerned about wireline
broadband competition in the United States. Whether sufficient
competition exists is unclear and, even if such competition presently
exists, it is surely fragile.''
The plan further stated that, ``To ensure that the right policies
are put in place so that the broadband ecosystem benefits from
meaningful competition as it evolves, it is important to have an
ongoing, data-driven evaluation of the state of competition,'' and that
``additional data are needed to more rigorously evaluate broadband
competition.''
The Plan specifically recommended the Commission undertake a number
of reforms to data collection including:
1. ``[C]ollect broadband availability data at the census block
level, by provider, technology and offered speed.''
2. ``[C]ollect data on advertised prices, prices actually paid by
subscribers, plans, bundles and promotions of fixed and mobile
broadband services that have material penetration among users,
as well as their evolution over time, by provider and by
geographic area.'' The Plan stated that in particular, it ``is
crucial that the FCC track and compare the evolution of pricing
in areas where two service providers offer very high peak
speeds with pricing in areas where only one provider can offer
very high peak speeds.''
3. ``[C]ollect information related to switching barriers, such as
early termination fees and contract length.''
The National Broadband Plan also recommended that the Commission
establish a general policy of making the data it collects available to
the public, including via the Internet in a broadband data depository.
These recommendations reflect the comments of the Department of
Justice, who told the Commission that it ``. . . should expand its
efforts to include an assessment of the nature and extent of
competition in each local broadband market.''
Nearly two years after the National Broadband Plan was released,
the Commission issued a Notice of Proposed Rulemaking (NPRM) that
encapsulated many of these recommendations. The Commission has yet to
act on this NPRM.
Chairman Genachowski, Commissioners McDowell, Clyburn, Rosenworcel
and Pai, do you agree with the National Broadband Plan's
recommendations on the need to collect these additional broadband data?
Answer. In general, I agree that collecting more data in a targeted
and reasonable way can be helpful. However, I have also previously
expressed concerns that these efforts could ultimately lead to price
regulation of Internet access and services.
Question 1a. Do you think the Commission, policymakers and the
public have the appropriate data to determine if the Commission's
competition policies are, in the words of the Department of Justice,
using the appropriate ``policy levers. . . to produce superior
outcomes,'' and if not, what additional data is needed?
Answer. I have said many times before that it is imperative that
the FCC looks at the whole picture when it analyzes America's broadband
adoption success. First, the FCC should avoid focusing on only whether
individuals are broadband subscribers to wireline services. Increased
use of wireless broadband is equally important. Second, I have
previously noted that broadband subscribership numbers do not take into
account ``non-subscribers'' who are nevertheless active broadband users
through the power of unlicensed services, such as Wi-Fi.
Sports Blackouts
Question 2. Over one year ago, I wrote the FCC and requested the
agency allow public comment on a petition for rulemaking asking the
Commission to reexamine the Sports Blackout Rule. This rule is nearly
forty years old and, along with other Federal rules and league
policies, is one of many obstacles making it unreasonably difficult for
fans to watch their favorite teams play.
I thank the Commission for taking my letter seriously and opening a
Notice of Inquiry (NOI) to solicit comments from the public and other
stakeholders. However, that docket was opened in January of 2012 and
the Commission has yet to take any further action.
The response in the proceeding was overwhelming. The NOI garnered
thousands of comments from consumers impacted by local sports
blackouts, including elderly and disabled sports fans unable to attend
live games. The NFL's revised local blackout policy seems to have done
little in the last regular season to help the most heavily impacted
markets. Commenters have proposed several options, including preserving
the status quo, eliminating the Sports Blackout Rule altogether, or
adopting a sunset period requiring a public interest showing to renew
the rule.
Chairman Genachowski, Commissioners McDowell, Clyburn, Rosenworcel
and Pai, what else can the Commission do to help fans unable to watch
their favorite teams compete?
Answer. As of April 8, 2013, I have recused myself from all matters
as I prepare to depart the Commission. In light of the numerous
stakeholders involved in the proceeding before the Commission, it would
not be appropriate for me to opine on this matter. I was supportive,
however, of the Media Bureau's action, in January 2012, to seek comment
on a petition requesting the elimination of the sports blackout rule.
I have always supported the periodic review of rules to determine
if marketplace conditions have changed to allow for the elimination of
unnecessary regulations. Reviewing this 37-year-old rule to determine
if it is still necessary is constructive as the Commission continues to
look for rules to streamline and modernize. As I said in January 2012,
there have been significant changes in the economics and structure of
professional sports and communications industries since the rule was
enacted. We now live in a world with not only local broadcast stations,
but also cable, satellite, the Internet and wireless, and where
television and merchandizing revenues exceed ticket sales. It is
appropriate for us to re-examine the rule in light of marketplace
changes.
As you know, however, the Commission's rules only prohibit
multichannel video programming distributors (i.e., cable and satellite
providers) from carrying a sporting event in a community if it is
blacked out by the local broadcast station. Thus, even if the
Commission eliminates this rule, games may continue to be unavailable
on television. Pursuant to contract, sports leagues often require a
game to be blacked out from broadcast television if tickets to the game
have not sold out. Our rules do not, and should not, affect the
contractual rights of the sports leagues, broadcasters and MVPDs.
Further, I would like to note that, subsequent to the release of
this public notice, the NFL relaxed their sports blackout policy. Last
season, the NFL allowed the home teams to have the option of selling 85
percent of game tickets to avoid a blackout in their local TV market.
Previously, teams had to sell out games or receive an exception from
the league for the game to be shown on local TV.
______
Response to Written Question Submitted by Hon. William M. Cowan to
Hon. Robert M. McDowell
Universal Service Fund
Question. Chairman Genachowski and Commissioner McDowell, my state
contributes dramatically more to the USF program than we receive, which
is particularly problematic because so much of western Massachusetts
lacks the wired broadband and wireless infrastructure that many USF
recipient states enjoy.
How will the reform of the USF program ensure that states like
Massachusetts get a fair share of the subsidies the fund releases and
in turn makes communications in places like the Berkshires more
reliable?
Answer. Broadband deployment and adoption in all areas of our
country have been priorities for me since arriving at the FCC nearly
seven years ago. Furthermore, I worked closely with Senator Kerry and
Congressman Markey on creative ideas to bring broadband to previously
unserved areas, such as the Berkshires. In fact, several years ago, we
convened a broadband summit in Northampton, MA. Today, the Berkshires
enjoy more broadband connectivity than ever. While more work remains to
be done, we can learn from the progress we have made thus far.
One of the goals of the USF/ICC high-cost reform order was to
target universal service subsidies to areas that are truly unserved by
broadband. The reform order will not result in immediate results but,
hopefully, we will achieve this goal in time as the order is
implemented.
______
Response to Written Question Submitted by Hon. Kelly Ayotte to
Hon. Robert M. McDowell
Question. Commissioner McDowell, as you know, the Commission took a
$17 million budget reduction as the result of sequester. But your
funding level is still larger than any appropriation since 2008.
Neither spectrum auctions nor USF distribution or contribution seem to
be affected. How has sequestration affected the FCC's ability to
function? Where will these cuts be most felt?
Answer. Although I have received several briefings on the effects
sequestration may have on the FCC's operations, I have been assured
that the Commission will be able to carry out its core functions.
Overall, the agency-wide budget is controlled by Chairman Genachowski
and therefore I respectfully defer to him regarding additional
questions. However, as for my office's budget, I have historically
returned almost 40 percent of my annual office travel budget to the
Treasury, on average, during my seven-year tenure at the FCC.
______
Response to Written Questions Submitted by Hon. Dean Heller to
Hon. Robert M. McDowell
I appreciate the testimony and your candid answers during the
hearing. I would like to thank you for your service on the Federal
Communications Commission.
Question 1. The hearing touched on many themes that I believe the
Committee should look at including process reform, the looming
transition to IP and the Spectrum auction. However, an opportunity for
the Chairman and the Commissioners to share what they see ``over the
hill'' was not discussed at length. I would like to provide you with an
opportunity to share what you believe are some issues that may not have
been discussed at the hearing.
Answer. There are numerous issues that will require FCC attention.
For example,
The FCC's reforms of the various universal service programs
will be ongoing;
As the media market continues to change, the Commission will
continue to have opportunities to modernize and eliminate
rules;
The Commission may have an opportunity to eliminate its net
neutrality rules, regardless of the outcome of pending
litigation, and needs to determine the fate of the Title II
docket;
Implementation of the incentive auction legislation and the
attendant policies will require substantial FCC attention; and
Overall, there will be a need to de-regulate, perhaps
through legislation, as markets become more competitive and
converge.
Question 2. The spectrum auction is of the utmost importance. Is
the Commission going to set a target date of 2014?
What are the challenges with hitting this date?
Answer. The challenges with hitting this date are numerous. It is
important to remember that the incentive auctions will, quite
literally, be the most complex spectrum auctions in world history.
Learning from my past experiences with the AWS-1 and 700 MHz auctions,
the entire process could take the greater part of a decade. Although we
want to expedite the auction process and deploy this spectrum for the
benefit of Americans as quickly as possible, it is most important that
the Commission ensures that the auctions are successful, both the
reverse auction and the forward auction. The Commission must work in a
deliberate and transparent manner, with an eye toward simplicity,
humility and restraint. Failure to do so could cause unnecessary delay,
hinder participation and result in unintended consequences.
For instance, attempting to implement an overly-regulatory paradigm
could result in myriad delays, including additional time to write and
release the order and consider petitions for reconsideration.
Additionally, the complexity of this auction coupled with the repacking
of broadcast stations increases the opportunities for legal challenges,
including injunctions and stays. Any regulatory efforts to micromanage
the wireless market, such as adopting spectrum caps and reserving space
in the 600 MHz band for the world's first nationwide unlicensed
spectrum band, are likely to increase the risks of litigation and delay
even further. Such attempts tend to result in uncertainty, inhibit
investment and may reduce the pool of auction participants. This
unwelcome and unintended scenario would jeopardize the main goals of
the spectrum law: putting more spectrum into the hands of consumers as
quickly as possible; maximizing revenue at auction; and funding efforts
to build the nationwide broadband public safety network mandated by
Congress.
Question 3. The Commission's spectrum incentive auction process has
the potential for channel reassignment. Nevada has over 300 translators
and low power TV stations, any repacking will put a significant burden
on these stations. Is the FCC taking this into consideration? Can the
Commission preserve viewer access to local channels and still hit the
target of 2014 for the auction to take place?
Answer. On September 28, the Commission adopted a notice of
proposed rulemaking initiating the implementation of the incentive
auction provisions of the Middle Class Tax Relief and Job Creation Act
(``Spectrum Act''). As you are aware, LPTV and translators are
secondary services and such stations are displaced if they cause
unacceptable interference to a full power station or other primary
spectrum users. Further, the Spectrum Act does not include or protect
these stations.
In the notice, the Commission recognized that LPTV and translator
stations will be affected by the incentive auction and repacking
process and requested input on various issues relating to these
services. For instance, we seek input on voluntary channel sharing for
stations and also invite comment on any measures to help ensure that
this important programming continues to reach viewers. The Commission
appreciates the benefits that LPTV and translator stations provide to
their communities and will have to consider the best means to preserve
low-power broadcast opportunities while keeping in mind the mandates
and goals of the Spectrum Act.
Question 4. According to the National Broadband Plan wireless
backhaul is ``critical to the deployment of wireless broadband and
other wireless services,'' particularly ``when fiber is not proximate
to a cell site.'' I understand that the existing wireless backhaul
networks face a number of regulatory and technological constraints that
limit their potential capacity. These independently-powerable services
are also important to undergird FirstNet, the national first responder
network. How is the FCC working to speed the deployment of wireless
backhaul services in new frequency bands?
Answer. The Commission has taken actions to facilitate the
deployment of wireless backhaul services and ensure that sufficient
microwave spectrum is available to meet current and future demand for
backhaul. In fact, in 2010, the Commission opened a proceeding to
review its rules to remove regulatory barriers to the use of microwave
spectrum for backhaul. This docket remains open.
In August 2011, the Commission released an order implementing rules
to facilitate the deployment of wireless backhaul.\1\ In particular,
the Commission provided backhaul operators access to an additional 650
megahertz of spectrum. This spectrum (the 6875-7125 MHz and 12700-13100
MHz bands) is shared with Fixed and Mobile Broadcast Auxiliary Service
(BAS) and Cable TV Relay Service (CARS) providers.
---------------------------------------------------------------------------
\1\ Amendment of Part 101 of the Commission's Rules to Facilitate
the Use of Microwave for Wireless Backhaul and Other Uses and to
Provide Additional Flexibility to Broadcast Auxiliary Service and
Operational Fixed Microwave Licensees, et al., WT Docket No. 10-153, et
al., First Report and Order, Further Notice of Proposed Rulemaking, and
Memorandum Opinion and Order (2011).
---------------------------------------------------------------------------
In August 2012, the Commission removed regulatory barriers to make
better use of microwave spectrum and provide additional flexibility to
enable licensees to reduce operational costs and facilitate the use of
backhaul in rural areas. For instance, the Commission revised rules to
allow smaller antennas in the 6, 18 and 23 GHz Bands, which will reduce
costs. \2\ At this time and again in October 2012, the FCC took steps
to modify and update technical rules to promote and hasten deployment
in the microwave bands.\3\ Furthermore, the Commission also imposes
buildout requirements to ensure that networks are deployed promptly to
provide service to Americans.
---------------------------------------------------------------------------
\2\ Amendment of Part 101 of the Commission's Rules to Facilitate
the Use of Microwave for Wireless Backhaul and Other Uses and to
Provide Additional Flexibility to Broadcast Auxiliary Service and
Operational Fixed Microwave Licensees, et al., WT Docket No. 10-153, et
al., Second Report and Order, Second Further Notice of Proposed
Rulemaking,Second Notice of Inquiry, Order on Reconsideration, and
Memorandum Opinion and Order at 3 (2012).
\3\ Amendment of Part 101 of the Commission's Rules to Facilitate
the Use of Microwave for Wireless Backhaul and Other Uses and to
Provide Additional Flexibility to Broadcast Auxiliary Service and
Operational Fixed Microwave Licensees, et al., WT Docket No. 10-153, et
al., Order, FCC 12-122 (2012).
Question 4a. What is the current state of wireless backhaul
deployment in the 24 and 39 GHz bands? Has any company tried to develop
new technology that is optimized for wireless backhaul in these new
frequency bands?
Answer. Currently, most wireless backhaul deployment has occurred
in the 6 GHz, 11 GHz, 18 GHz and 23 GHz bands. Deployment of wireless
backhaul services in the 24 GHz and 39 GHz bands was delayed because,
upon request of licensees, the Commission extended the buildout for 24
GHz and 39 GHz licenses to allow, in part, coordination with the
construction of 700 MHz and AWS-1 networks.
In reviewing the Commission's records for the three largest 24 GHz
and 39 GHz licensees, they reflect that IDT Spectrum and Spectrum
Holding Technologies, which hold 742 and 199 39 GHz licenses,
respectively, have reported that they have met the buildout
requirements. Fibertower, which held 103 of the 111 issued 24 GHz
licenses and 634 39 GHz licenses, has constructed 48 of its 737
licenses.\4\ Based on the fact that licenses have been constructed in
both the 24 GHz and 39 GHz bands, it appears that technology and
equipment has been developed to deploy wireless backhaul using these
frequencies.
---------------------------------------------------------------------------
\4\ The Wireless Telecommunications Bureau held that 689 of
FiberTower's licenses automatically terminated for failure to buildout
and meet the substantial service requirement. See FiberTower Spectrum
Holdings LLC, Memorandum Opinion and Order, 27 FCC Rcd 13562 (WTB
2012). Pursuant to a bankruptcy court injunction, these licenses cannot
be reassigned until FiberTower exhausts it appeal rights.
Question 5. The FCC has moved to reclaim wireless backhaul spectrum
in the 24 and 39 GHz range from a number of wireless backhaul providers
despite the providers request for additional time to complete their
roll-out.
If the FCC ultimately reclaims spectrum in the 24 and 39 GHz range,
how long will it take, including the necessary legal proceedings, for a
new wireless backhaul provider to build-out a backhaul service with the
seized spectrum?
Answer. As the question seeks information regarding the time-frame
of potential proceedings before the Commission, I defer to the Chairman
who controls the FCC's agenda.
Question 6. In at least one case on Appeal to the Full FCC
Commission, a significant wireless backhaul provider, from whom the FCC
seized spectrum, has proposed an aggressive build-out plan that will
have its wireless backhaul network up and running in 18 months. If the
FCC were to prioritize the rollout of wireless backhaul services, would
it be more expedient to grant an 18 month extension and allow a planned
expansion to move forward or can the FCC clear the spectrum and find
another company to build-out the necessary wireless backhaul in less
than 18 months?
Answer. This question seeks comment on a particular proceeding in
which a specific licensee requests that the Commission overturn a
bureau decision denying an extension of the deadline to construct
certain licenses and provide substantial service. The bureau decision
resulted in the automatic termination of a large number of 24 GHz and
39 GHz licenses. Further, it is my understanding that the particular
licensee has filed for Chapter 11 bankruptcy relief. As of April 8,
2013, I have recused myself from all matters as I prepare to depart the
Commission. In light of the numerous stakeholders involved in the
proceedings before the Commission and bankruptcy court, it would not be
appropriate for me to opine on this matter.
Question 7. Will the FCC work to ensure that it takes all
appropriate actions, including reviewing prior staff-driven efforts
intended to strip existing wireless backhaul providers of their
spectrum, to speed the build-out of needed wireless backhaul services?
Answer. As of April 8, 2013, I have recused myself from all matters
as I prepare to depart the Commission, so I will not be participating
in future proceedings regarding wireless backhaul services.
______
Response to Written Questions Submitted by Hon. Barbara Boxer to
Hon. Mignon L. Clyburn
Question 1. On November 30, 2012, I along with eight of my
colleagues sent a letter urging you not to relax the Commission's
cross-ownership rules without responding to our concerns about the low
levels of female and minority ownership of broadcast radio and
television stations. In February, the Commission announced that it
would be delaying its vote on the new rules as it awaits the results of
a study by the Minority Media and Telecommunications Council regarding
the effects of cross-ownership rules on minority ownership and
newsgathering.
Given the fact that MMTC's study is to be conducted by a broadcast
industry analyst who is backed by the newspaper and broadcast industry
associations and has publicly supported a relaxation of the cross-
ownership rules, do you believe the study represents an independent and
impartial analysis of the impact of cross ownership on minority owners?
Answer. MMTC's study will be used to inform our current draft
Order, and my hope is that the study's results will give the FCC some
indication as to whether certain forms of media consolidation will
negatively impact female and minority owners or increase barriers to
entry in acquiring and maintaining a broadcast or newspaper entity.
Question 1a. Do you believe the study's methodology will provide
the kind of analysis required by the Third Circuit Court of Appeals
when it ordered the Commission to provide better justification for
proposed diversity efforts?
Answer. Throughout our comment periods leading up to the release of
the Chairman's draft Order, I have repeatedly expressed concern
regarding our need to address the issues raised in the Third Circuit's
most recent decision. Should the some or all of the results of the MMTC
study satisfy the Court's concerns, I feel we should consider
augmenting our Order with that data.
Question 1b. Does the Commission believe that radio contributes to
viewpoint diversity?
Answer. The Chairman's draft Order is skeptical on that point,
finding that TV stations and newspapers are the more popular resource
for news and information. I am less certain of that claim, and look
forward to potential further insight from the MMTC study.
Question 1c. If the Commission were to conclude that radio does not
contribute to diversity, how would that decision undermine future
efforts to ensure that radio ownership is as diverse as the country it
serves?
Answer. I am not ready to draw that conclusion. I feel that radio
provides entertainment, news, and viewpoints that are just as diverse
and unique as television and other offerings, and I am hesitant to take
any action that could harm diverse radio providers. However, I have
looked over the comments that were submitted which call for relaxation
of the newspaper-radio cross-ownership ban, and how such combinations
could inject much-needed resources into both sides of a consolidated
entity. I intend to further examine this possibility with our Media
Bureau during the coming weeks.
Question 2. The Commission has acknowledged that rural consumers
are experiencing significant problems receiving long distance or
wireless calls on their landline telephones. The problem appears to be
attributable to the use of IP-based least-cost routing providers.
What does the Commission plan to do to ensure that such
interconnection and reliability problems do not become more prevalent
as our Nation's telephone networks transition to wireless and IP-based
services?
Answer. The Commission has been actively looking into these issues
and it's something that I'm very concerned about. I attended the
Commission's hearings focusing on the aftermath of Hurricane Sandy and
the Commission has launched proceedings to examine the reliability of
networks to determine whether actions should be taken. In addition, the
FCC's Technology Transition Policy Task Force is focused on these
issues and how to update our rules for modern networks. The Commission
has also asked the Technological Advisory Council (TAC) to provide
recommendations to the Commission on how to improve resiliency and
reliability of networks. Finally, the Commission launched a proceeding
regarding the concerns of call completion and quality of calls to rural
areas. I look forward to reviewing the record developed in these
proceedings as well as the recommendations from the TAC and Task Force.
Question 2a. In light of the recent complaint filed in Federal
court by VoIP providers claiming that the Commission lacks authority
under the Communications Act to apply the no-blocking rule to VoIP
calls, is additional authority needed from Congress to address the
rural call completion problem?
Answer. I believe that the Commission has authority to impose its
proposed rural call completion rules on VoIP providers. We propose to
do so in the pending NPRM, which will provide the Commission additional
information from providers about their call completion rates and
incentivize them to improve their call completion performance.
The Commission relied on Sections 201(b) and 202(a) of the
Communications Act in the pending NPRM. Call routing practices that
lead to rural call termination and quality problems may violate the
prohibition against unjust and unreasonable practices in section
201(b), or may violate carriers' duty under section 202(a) to refrain
from unjust or unreasonable discrimination in practices, facilities, or
services. The Commission sought comment on applying its proposed rules
to VoIP providers through the exercise of its ancillary authority to
the extent that VoIP services are not telecommunications services
regulated under Title II of the Act, on the grounds that such
requirements would be necessary for the Commission to carry out its
section 201(b) and 202(a) obligations with regard to carriers.
As you know, the Commission has been actively working to address
rural call completion for several years. Despite our best efforts we
continue to hear about call completion issues from rural carriers. This
is a significant issue with real-world consequences for rural economies
and public safety. To the extent that providers are not following our
call completion requirements, I have encouraged the Chairman and our
Enforcement Bureau to address these issues swiftly, and I am supportive
of concluding our ongoing rulemaking quickly to provide the Commission
additional information from providers about their call completion rates
so that we may better enforce the requirements of the Act.
Question 3. More than half of U.S. broadband subscribers are
subject to some form of bandwidth cap or usage-based pricing. Experts
have pointed out that broadband caps are inefficient for addressing
network congestion and may, instead, have anticompetitive effects. What
does the Commission plan to do to ensure that caps do not undermine
access to affordable, high-speed broadband?
Answer. The broadband marketplace continues to evolve, and the
Commission is monitoring the delivery of broadband service to
consumers, as required by Section 706 of the Telecommunications Act,
for instance. As part of that effort, studying the impact of speeds
delivered, data caps, and other terms and conditions is a useful
endeavor for us to observe the changes that are occurring, including
how those changes impact the adoption and use rate of broadband and the
benefits that ensue as a result. Such review includes the competitive
effects of services offered on the Internet, including whether the
terms and conditions of that offering, have a limiting effect on
innovative services that may compete directly with incumbents.
To date, my observation is that the marketplace is evolving, and we
should continue monitoring that evolution and the impact it has on the
deployment, adoption and use of broadband by consumers; and we should
address complaints about unfair practices as quickly as possible so as
to ensure continued innovation and investment in broadband. The
Commission currently is considering an expansion of its Section 706
review that aligns with our goals of promoting the deployment, adoption
and use of broadband by all Americans.
______
Response to Written Question Submitted by Hon. Frank R. Lautenberg to
Hon. Mignon L. Clyburn
Question. Nineteen states currently restrict local governments'
ability to offer broadband, even in areas where companies won't make it
available or affordable. I have previously introduced bills that would
prevent states from restricting municipal broadband, and I am
considering reintroducing this legislation. Do you agree that states
should not be permitted to restrict municipalities from offering
broadband to their residents?
Answer. Yes. The National Broadband Plan (``NBP'') recommended that
Congress clarify that State, regional, and local governments should not
be restricted from building their own broadband networks. When
providers cannot meet the needs of local communities, the Plan
recommends that State, regional, and local entities should be able to
respond accordingly, as they were able to do when municipal governments
distributed electricity to thousands of rural communities during the
20th century. Unfortunately, this issue has not been addressed by
Congress, and some broadband industry members continue to encourage
state legislatures to restrict municipalities in this manner, with
South Carolina and North Carolina passing restrictive legislation since
the NBP. Indeed, a recent effort in Georgia failed, but not without
significant work by opponents to defeat the measure. I have spoken out
several times and encouraged state legislatures to ignore these
misguided efforts, but action from Congress to settle this matter would
be welcome.
______
Response to Written Questions Submitted by Hon. Claire McCaskill to
Hon. Mignon L. Clyburn
Question 1. Chairman Genachowski and I have both written to the
Federal Aviation Administration (FAA) encouraging the agency to revise
its rules to allow for the expanded use of electronic devices during
flight. The FAA has established an Aviation Rulemaking Committee (ARC)
to look at possible changes to the rules, and the FCC has a
representative on that committee, which will make recommendations to
the FAA Administrator this summer.
I am convinced, and I think most Americans agree, any safety
concerns that might have once existed to justify the current rules have
been addressed by advances in technology both on the airplane itself
and in consumer electronics. While I recognize the decision is not one
that rests with the FCC, as leaders on technology issues--and as one of
only three government agencies with a seat at the table, and the only
not under the Department of Transportation--I want to know if all of
the Commissioners share those views on this issue.
Given Chairman Genachowski's stated position on the issue, can I
trust that you will be directing the FCC's representative on the ARC to
convey the opinion of the Commission that the rules should be changed
and work to aggressively push the FAA to do so?
Answer. Yes. I look forward to the recommendations from the ARC and
will work with the FAA on next steps as appropriate. I hope that we
people can find a proper way to permit people to use devices, such as
e-readers, from gate to gate.
Question 2. Although the FCC's reforms to the Universal Service
Fund's (USF) Lifeline program through its February 2012 order were much
needed, and attempted to address duplicative Lifeline support,
ineligibility, deceptive marketing and other concerns raised in my
December 2011 letter to you on this topic, the reforms appear to have
had little effect in limiting the rapid growth of the program.
While I commend the Commission for its attempt to rein in the rapid
growth of the Lifeline program and address the problems you inherited
when the program was expanded to include wireless providers without any
additional safeguards to prevent waste, fraud and abuse, even with the
reform order in place the Lifeline program grew by 26 percent ($445
million) last year. What additional action is the Commission
considering to address waste, fraud and abuse in the Lifeline program?
Specifically, would the Commission consider suspending new
enrollment in the program while the reforms continue to be implemented?
Answer. In Section 254 of the Communications Act, Congress
articulated national universal service goals, including that services
should be available at ``affordable'' rates and that ``consumers in all
regions of the nation, including low-income consumers . . . should have
access to telecommunications and information services.'' The Lifeline
program fulfills this intended purpose of the USF, and in the
Commission's Lifeline Reform Order in 2012, we found that Lifeline has
been instrumental in increasing the availability of phone service to
low-income consumers. Not only had many low-income consumers stated in
our record that without a Lifeline subsidy, they would be unable to
afford such service, they also noted the hardships they would face
without access to phone service, such as the lack of access to 911, job
opportunities, and social services.
In fact, in our Lifeline Reform Order the Commission stated that
telephone subscribership among low-income Americans has grown
significantly since the Lifeline program was initiated in 1984, in
response to the break-up of AT&T and the Commission's action to ensure
the availability and affordability of local phone service would be
addressed for low-income families through the implementation of the
Lifeline program. Eighty percent of low-income households had telephone
service in 1984, compared to 95.4 percent of non-low-income households.
However, since the inception of Lifeline, the gap between telephone
penetration rates for low-income and non-low-income households has
narrowed from about 12 percent in 1984 to 4 percent in 2011. In fact,
states that provide higher monthly Lifeline subsidies per household
exhibited greater growth in phone subscribership from 1997 to the
present. The Commission also found that Lifeline had increased the
penetration rate of voice service by keeping low-income consumers
connected to the network, thereby increasing the network effects (i.e.,
the more consumers who are on the network increasing the benefits for
all consumers). Moreover, the additional money invested in USF through
the high-cost, E-rate, and rural healthcare mechanisms achieve more
benefits for all of society when low-income consumers can access the
networks through the Lifeline program.
If a cap were to be imposed, then consumers who are otherwise
qualified may lose or not gain access to the networks. Balancing the
statutory objectives with the policy goal of all consumers to access
the networks and benefit from them, our reforms focused on how we can
address the operation of the program and make it more efficient and
effective without harming qualified low-income consumers' access to the
networks. Access to payphones has significantly declined--currently
approximately only 500,000 payphones remain in the U.S., and
approximately 1.5 million have been displaced as the marketplace has
changed due to the increased availability of mobile phones.
Accordingly, the Commission set a savings target for the Lifeline
reforms of $200 million, which it met during the first year, and we
anticipate that over $400 million will be saved this year, and up to $2
billion by the end of 2014.
Indeed, it is apparent that the reforms that focused on ensuring
that consumers are qualified for the program and that providers are
adhering to the program's rules are working. The overall number of
consumers in Lifeline has dropped significantly since the
implementation of the new certification and usage requirements and the
first annual verification process--from 15.7 million to 13.2 million
households. As a result, Lifeline subscribership is no longer growing,
and every new subscriber must demonstrate eligibility at sign up, in
addition to the many other reforms that have curbed the growth in the
program.
Question 2a. Would the Commission consider capping the program?
Answer. See response immediately above.
Question 3. We are quick in Washington to create new programs but
what we don't do often enough is reevaluate those programs to make sure
they're still needed. The FCC created the Lifeline program nearly 30
years ago to make sure local phone service was still affordable for
low-income Americans following the breakup of AT&T in 1984. Because
technology has changed and competition has grown, basic
telecommunications services are as affordable as ever. I am wondering
if the Commission has recently looked at whether the Lifeline program
is even still necessary, and if not if you would be willing to do so?
Answer. As discussed above, the Lifeline Reform Order fully
considered the benefits of the program and balanced the need for the
program with its reform efforts to ensure that the program would be
more efficient and effective. In its review, the Commission found that
the Lifeline-eligible population had increased significantly over the
past decade. Since 1999, real median household income in the U.S. has
declined by 7.1 percent, while households at the bottom of the income
scale have seen their income decline by 12.1 percent. In 2010, 46.2
million Americans were living in poverty, defined as living at or below
the benchmark established in the Federal Poverty Guidelines, compared
to 31.6 million in 2000. Since we published the Lifeline Reform Order,
the Census Bureau has reported an additional 1.5 percent decline in
median income from 2010 to 2011. Minority populations have fared even
worse; for example African Americans experienced a decrease of 2.7
percent. Thus, the evidence we have indicates that this program is
still needed and that without it, more consumers would be disconnected
from the networks. A monthly subsidy of $9.25 per month per family
ensures that they can have access to 911, job opportunities, social
services, and daycare and school contact. Without it, I believe low-
income families would face even more hardships than they do today. As
such, the Lifeline program continues to assist us in fulfilling the
statutory requirements of universal service that Congress set forth for
the Nation in Section 254.
Question 4. In order to keep up with the demand for spectrum, many
in the private-sector believe efforts need to be taken to clear some of
the federally-occupied spectrum for commercial use, most significantly
spectrum currently occupied by the Department of Defense. Chairman
Genachowski and I have discussed this issue but I am interested in the
views of all of the commissioners.
With the exponential rise in demand for mobile broadband services,
we need to look at all potential resources for spectrum repurposing--
including Federal Government users. The GAO recently reported that the
total percentage of the most highly-valued spectrum exclusively or
predominantly used by the Federal Government is as high as 57 percent.
Given Federal agency budgets, many of these systems are not up-to-date
and thus operate inefficiently, and some Federal uses could be served
by commercial mobile providers. Are there specific instances in which
you believe Federal spectrum could be operated more efficiently?
Answer. Most parties would probably agree that certain systems that
were designed and installed as long as thirty years ago could use
spectrum more efficiently with today's technologies. However, the
Federal agencies advise that they do not have the budget to conduct the
research and development for replacing old technologies with more
efficient ones. The FCC is not in a position to identify particular
systems that can or should use spectrum more efficiently. However, we
believe it is important to understand the assumptions that underlie
current spectrum use and whether these assumptions might be modified to
allow agencies to accomplish their missions using less spectrum in ways
that create opportunity and real value for other services either
through reallocation or sharing.
Question 5. In addition to this Committee I also serve on the Armed
Services Committee. I have started to look at ways we can incentivize
Federal agencies--including the Department of Defense--to clear or
share spectrum, to free up more spectrum for commercial auction. Based
on your experience working with Federal spectrum users, what ideas can
you offer for creating such incentives?
Answer. I believe it would be helpful to empower the Department of
Defense to offer access to its spectrum through auctions either through
reallocations or sharing, with a share of the proceeds used to fund
other funding or program priorities, working of course with the
Congress. For example, this would empower the Department of Defense to
determine whether it might auction part of its spectrum to reduce or
eliminate furloughs.
Question 6. Last year Congress passed a Rubio-McCaskill resolution,
S.Con.Res. 50, stating that Internet infrastructure and content should
remain free from international regulation. Members of the U.S.
delegation to the ITU conference in Dubai have indicated that Congress
sending a clear message on the issue was helpful in their negotiations
and that our efforts on this issue should continue, especially since
those nations that want greater regulation of Internet infrastructure
and content will certainly continue in their efforts. What more can
Congress be doing to help promote a free and open Internet around the
world?
Answer. Though the Department of State heads U.S. participation in
international meetings, the Federal Communications Commission is an
expert agency and member of U.S. delegations to many international
telecommunications meetings. In that capacity, at the International
Telecommunication Union's (ITU) World Conference on International
Telecommunications (WCIT) in Dubai last December, we witnessed the
benefit of strong bipartisan support from the U.S. Senate in the form
of S. Con. Res. 50. Such unity of purpose going forward as the United
States seeks to promote a free and open Internet will continue to be
helpful.
Question 7. A handful of countries, such as China and Iran, want to
heavily censor the Internet content people can access inside their
borders, while many other nations are simply looking for ways to
generate revenue from Internet traffic that moves through their
country, much in the same way they have done with voice communications
for years. Are there policies the United States can and should be
promoting around the globe to help other nations develop their
telecommunications infrastructure, unleash the economic activity that
comes with it, and thus remove their desire to use global Internet
traffic as a revenue source?
Answer. The discussions at the WCIT, in Dubai, highlighted how
critical it is to work with developing countries and highlight the
benefits of the Internet and how to achieve those benefits.
We are working with the U.S. State Department and other agencies to
continue outreach efforts that focus on promoting an enabling
environment for broadband development that creates opportunities for
the private sector to invest in innovative technologies. For example,
the United States has encouraged countries to adopt transparent policy
and legal frameworks; open telecommunications markets to competition;
adopt licensing and taxation reforms; establish transparent universal
service programs to support telecommunications instead of subsidies
from international services; and encourage the efficient and innovative
use of spectrum for mobile broadband. We have and will continue to
emphasize in our work with developing countries and others that
regulations that seek to control revenue flows will hinder investment
and impede broadband growth. There are many opportunities over the next
several months to advance these outreach efforts, including at the
upcoming ITU's World Telecommunications Policy Forum in May, the ITU's
Global Symposium for Regulators in August, and bilateral meetings with
individual countries.
Question 8. The upcoming incentive auctions have been pitched to
Congress as a market-based mechanism that would help put spectrum in
the hands of those most capable of unleashing its economic potential.
That was an appealing idea, and on that basis Congress authorized you
to conduct them. Now there is some concern that the Commission is
contemplating going beyond what will be freed up by the auctions and is
considering repurposing or reallocating many more megahertz in rural
areas just through repacking broadcasters and eliminating LPTV and
translator service.
Is your intention to deal only with what is freed up by auctions,
or is your intention to reallocate as much spectrum from broadcasters
to broadband providers as possible?
Answer. The Commission has and will continue to run a market-driven
process focused on providing opportunities for broadcasters in all
markets to participate in the incentive auction.
A successful auction will result in nationwide contiguous blocks of
spectrum for commercial wireless which will enable significant economic
growth and consumer benefits in all areas, urban and rural as well as a
vibrant broadcast market that continues to reaches all.
Question 9. Has the Commission studied the impact of reclaiming
spectrum on LPTV and translator service, especially in more rural
states that rely heavily on them to reach areas where no other service
is available?
Answer. Congress envisioned that full power TV stations and Class A
stations that choose not to participate would likely need to be
repacked, so the Spectrum Act provides relocation funding and requires
the Commission to make reasonable efforts to preserve coverage area and
population served.
Congress chose not to provide special protection for Low power TV
and TV translators, which are secondary services.
However, in the Commission's NPRM recognized the important service
low power stations provide, particularly in rural areas, and sought
comment on measures to ensure their programming continues to reach
viewers--such as channel sharing, access to multicast channels of full
power stations, and modifications to our displacement application
process.
______
Response to Written Questions Submitted by Hon. Richard Blumenthal to
Hon. Mignon L. Clyburn
Broadband Competition
Question 1. In 2010 the FCC stated in the National Broadband Plan
that, ``. . . there are reasons to be concerned about wireline
broadband competition in the United States. Whether sufficient
competition exists is unclear and, even if such competition presently
exists, it is surely fragile.''
The plan further stated that, ``To ensure that the right policies
are put in place so that the broadband ecosystem benefits from
meaningful competition as it evolves, it is important to have an
ongoing, data-driven evaluation of the state of competition,'' and that
``additional data are needed to more rigorously evaluate broadband
competition.''
The Plan specifically recommended the Commission undertake a number
of reforms to data collection including:
1. ``[C]ollect broadband availability data at the census block
level, by provider, technology and offered speed.''
2. ``[C]ollect data on advertised prices, prices actually paid by
subscribers, plans, bundles and promotions of fixed and mobile
broadband services that have material penetration among users,
as well as their evolution over time, by provider and by
geographic area.'' The Plan stated that in particular, it ``is
crucial that the FCC track and compare the evolution of pricing
in areas where two service providers offer very high peak
speeds with pricing in areas where only one provider can offer
very high peak speeds.''
3. ``[C]ollect information related to switching barriers, such as
early termination fees and contract length.''
The National Broadband Plan also recommended that the Commission
establish a general policy of making the data it collects available to
the public, including via the Internet in a broadband data depository.
These recommendations reflect the comments of the Department of
Justice, who told the Commission that it ``. . . should expand its
efforts to include an assessment of the nature and extent of
competition in each local broadband market.''
Nearly two years after the National Broadband Plan was released,
the Commission issued a Notice of Proposed Rulemaking (NPRM) that
encapsulated many of these recommendations. The Commission has yet to
act on this NPRM.
Chairman Genachowski, Commissioners McDowell, Clyburn, Rosenworcel
and Pai, do you agree with the National Broadband Plan's
recommendations on the need to collect these additional broadband data?
Do you think the Commission, policymakers and the public have the
appropriate data to determine if the Commission's competition policies
are, in the words of the Department of Justice, using the appropriate
``policy levers. . . to produce superior outcomes,'' and if not, what
additional data is needed?
Answer. The broadband marketplace continues to evolve, and the
Commission is monitoring the delivery of broadband service to
consumers, as required by Section 706 of the Telecommunications Act,
for instance. As part of that effort, studying the impact of speeds
delivered, data caps, and other terms and conditions is a useful
endeavor for us to observe the changes that are occurring, including
how those changes impact the adoption and use rate of broadband and the
benefits that ensue as a result. Such review includes the competitive
effects of services offered on the Internet, including whether the
terms and conditions of that offering, have a limiting effect on
innovative services that may compete directly with incumbents.
To date, my observation is that the marketplace is evolving, and we
should continue monitoring that evolution and the impact it has on the
deployment, adoption and use of broadband by consumers; and we should
address complaints about unfair practices as quickly as possible so as
to ensure continued innovation and investment in broadband. The
Commission currently is considering an expansion of its Section 706
review that aligns with our goals of promoting the deployment, adoption
and use of broadband by all Americans.
Sports Blackouts
Question 2. Over one year ago, I wrote the FCC and requested the
agency allow public comment on a petition for rulemaking asking the
Commission to reexamine the Sports Blackout Rule. This rule is nearly
forty years old and, along with other Federal rules and league
policies, is one of many obstacles making it unreasonably difficult for
fans to watch their favorite teams play.
I thank the Commission for taking my letter seriously and opening a
Notice of Inquiry (NOI) to solicit comments from the public and other
stakeholders. However, that docket was opened in January of 2012 and
the Commission has yet to take any further action.
The response in the proceeding was overwhelming. The NOI garnered
thousands of comments from consumers impacted by local sports
blackouts, including elderly and disabled sports fans unable to attend
live games. The NFL's revised local blackout policy seems to have done
little in the last regular season to help the most heavily impacted
markets. Commenters have proposed several options, including preserving
the status quo, eliminating the Sports Blackout Rule altogether, or
adopting a sunset period requiring a public interest showing to renew
the rule.
Chairman Genachowski, Commissioners McDowell, Clyburn, Rosenworcel
and Pai, what else can the Commission do to help fans unable to watch
their favorite teams compete?
Answer. I too have heard from aggrieved fans, and have met with
both the Sports Fans Coalition and the NFL. I have also discussed the
issue with the Chairman's office, and will continue to monitor any
incoming comments pursuant to our Notice of Inquiry of January, 2012.
______
Response to Written Questions Submitted by Hon. William M. Cowan to
Hon. Mignon L. Clyburn
Media Ownership and Diversity
Question 1. Commissioner Clyburn, I know that you have expressed
both concern for the lack of minority media ownership and support for
acquiring additional data to ensure that any relaxation of existing
media ownership rules do not further diminish the diversity of voices
in our media.
Can you talk about the unique role that minority media plays in
minority communities, as well as the study that the Minority Media
Telecommunications Council is commissioning to study the potential
effects of relaxing the rules on minority ownership and minority
communities?
Answer. As the former publisher of a small newspaper that existed
to provide news and information to African-Americans, I am keenly aware
of the need for a variety of voices and viewpoints in diverse
communities--ones that can be trusted and relied upon by individuals in
neighborhoods small and large. Sadly, a large percentage of these
entities are struggling financially, and many no longer exist. This is
due, I am told, to a lack of access to capital, from which stems the
inability to compete with larger newsgathering operations.
That is why I view any proposals allowing media consolidation with
a careful eye, as the ability of a TV station and a newspaper to join
forces could further squeeze smaller content providers out of their
respective markets. I am thus anxious to see the results of MMTC's
study, and to learn if any insight can be gleaned into the potential
negative impacts of the loosening of our rules.
Prison Phone Rates
Question 2. Commissioner Clyburn, the FCC released a Notice of
Proposed Rulemaking to lower interstate calling rates for inmates and
their families at the end of last year. I understand you have been a
champion for the FCC taking such action based on two long-standing
petitions seeking relief from the Commission for almost a decade.
Where is the FCC in the process of reviewing the record, and when
do you expect the Commission to take action to lower rates where they
are not just and reasonable?
Answer. Thank you for your question. Yes, you are absolutely
correct that my views of the high rates families must pay to stay
connected to their loved ones in prison are concerning for a number of
reasons, but most especially because of the overall societal cost.
Numerous studies show that recidivism rates are reduced when
incarcerated individuals stay connected to their family and friends.
Often the telephone plays a crucial role for that connection when so
many are incarcerated far from home, and it is difficult for families
to visit in person.
By lowering prison phone rates we can better connect families, most
of who are low-income, and help lower recidivism rates. To that end, I
am committed to completing the review of the prison phone rate record
that the Commission has received. Comments were filed in March, and
reply comments were due in the proceeding on April 22. It is my hope
that the Chair of the Commission will devote the Commission's resources
to conclude the review of the record and offer an Order for
consideration and vote by the full Commission as soon as possible now
that the record has closed.
______
Response to Written Questions Submitted by Hon. Kelly Ayotte to
Hon. Mignon L. Clyburn
Question 1. Commissioner Clyburn, very few would dispute that we
have a significant spectrum crunch. As I have stated, we clearly have a
natural resource with the Federal Government, but that cannot be the
entire solution. What is your solution for creating a spectrum
pipeline?
Answer. The FCC realizes that we must look for opportunities across
all bands and are doing just that. For example, we recently reallocated
40 megahertz of non-federal spectrum in the S-band from mobile
satellite service to terrestrial wireless service and we modified our
rules to enable deployment of mobile services in 20 megahertz of
spectrum allocated for wireless communications services. We have also
proposed to repurpose a portion of the TV broadcasting spectrum for
wireless broadband through voluntary incentive auctions.
The GAO recently reported that the total percentage of the most
highly-valued spectrum exclusively or predominantly used by the Federal
Government is as high as 57 percent. Therefore our search for spectrum
must necessarily include potential reallocation or sharing of Federal
spectrum as well. This past summer, the President's Council of Advisors
on Science and Technology (PCAST) issued a report that presented
proposals to promote more efficient uses of spectrum. One
recommendation was to promote sharing of certain bands between
commercial and Federal licensees. This past December, the Commission
adopted a Notice of Proposed Rulemaking in the 3.5 GHz Federal band to
promote this type of sharing. We are also working with the NTIA and all
stakeholders to study potential access to Federal spectrum at 1755--
1850 MHz. In sum, we have been moving spectrum into the pipeline and
are continuing to work to identify other opportunities to keep the
pipeline flowing in the future. The Commission's 2012 Voluntary
Incentive Auction NPRM recognized the important service low power
stations provide, particularly in rural areas, and sought comment on
measures to ensure their programming continues to reach viewers--such
as channel sharing, access to multicast channels of full power
stations, and modifications to our displacement application process.
______
Response to Written Questions Submitted by Hon. Dean Heller to
Hon. Mignon L. Clyburn
I appreciate the testimony and your candid answers during the
hearing. I would like to thank you for your service on the Federal
Communications Commission.
Question 1. The hearing touched on many themes that I believe the
Committee should look at including process reform, the looming
transition to IP and the Spectrum auction. However, an opportunity for
the Chairman and the Commissioners to share what they see ``over the
hill'' was not discussed at length. I would like to provide you with an
opportunity to share what you believe are some issues that may not have
been discussed at the hearing.
Answer. The Commission should try to resolve, as soon as possible,
the lack of interoperability in the lower 700 MHz band. Throughout the
history of the mobile wireless industry, whenever it appeared that a
lack of interoperability might arise with regard to a spectrum band the
Commission was about to allocate for mobile wireless service, the FCC
has either issued an order mandating interoperability, as it did in the
1981 Cellular Report and Order, or strongly instructed the industry
that it expects consumer equipment to operate over the entire range of
that spectrum band. However, the he lower 700 MHz band is the only
spectrum band the Commission has allocated that lacks interoperability
this is preventing many American consumers, such as rural customers who
subscribe to service from companies who won licenses in the A Block of
the lower 700 MHz band, from enjoying the access to this innovation
that other Americans can enjoy. The record is now complete and I hope
the Commission staff can move quickly towards a decision that finds a
cost effective solution to achieving interoperability in this band if
the industry fails to reach consensus soon.
The Commission should also continue to work expeditiously to
conclude pending proceedings that seek to implement the specific
mandates of the goals of the Communications and Video Accessibility
Act.
The FCC unanimously adopted a Notice of Proposed Rulemaking to
consider lowering the cost of inmate calling services in December 2012.
This Notice was the result of two longstanding Petitions for Rulemaking
filed by inmates and their families complaining that the calling rates
are excessive. Given that telephone contact is important for families
to maintain contact which helps reduce recidivism rates, and the
overall prison costs to society, and that most families paying these
phone rates are low-income, I believe the Commission should quickly
review the record, which just closed on April 22, and issue a decision
in this proceeding.
We must move forward with our quadrennial review of the FCC's media
ownership rules in a way that leaves no stone unturned in assessing the
potential negative impacts that media consolidation could have on
female and minority owners of broadcast properties.
Question 2. The spectrum auction is of the utmost importance. Is
the Commission going to set a target date of 2014? What are the
challenges with hitting this date?
Answer. We anticipate adopting an order in the incentive auction
proceeding in 2013 and conducting that auction in 2014. The
Commission's central goal is to repurpose the maximum amount of
spectrum for flexible licensed and unlicensed use in order to unleash
investment and innovation, benefit consumers, drive economic growth,
and enhance our global competitiveness, while at the same time enabling
a healthy, diverse broadcast television industry.
Question 3. The Commission's spectrum incentive auction process has
the potential for channel reassignment. Nevada has over 300 translators
and low power TV stations, any repacking will put a significant burden
on these stations. Is the FCC taking this into consideration? Can the
Commission preserve viewer access to local channels and still hit the
target of 2014 for the auction to take place?
Answer. The Commission's 2012 Voluntary Incentive Auction NPRM
recognized the important service low power stations provide,
particularly in rural areas, and sought comment on measures to ensure
their programming continues to reach viewers--such as channel sharing,
access to multicast channels of full power stations, and modifications
to our displacement application process.
Question 4. According to the National Broadband Plan wireless
backhaul is ``critical to the deployment of wireless broadband and
other wireless services,'' particularly ``when fiber is not proximate
to a cell site.'' I understand that the existing wireless backhaul
networks face a number of regulatory and technological constraints that
limit their potential capacity. These independently-powerable services
are also important to undergird FirstNet, the national first responder
network. How is the FCC working to speed the deployment of wireless
backhaul services in new frequency bands?
Answer. Thank you very much for the question. I am very concerned
about the challenges that hard to serve communities, such as those in
rural areas, face. One way to help these communities is to find more
affordable ways for carriers to deploy wireless services. I am pleased
to report that since 2010, the Commission has been working diligently
to revise its rules to facilitate the deployment of wireless backhaul.
Thus far, 650 megahertz of additional spectrum has been made
available, mostly in rural areas, for wireless backhaul.
We have revised our technical antenna standards in several
bands to allow the use of smaller antennas, which can lower
costs for consumers and operators.
Additionally, the Commission eliminated unnecessary rules
which have hindered deployment in the microwave bands.
The agency has also established build-out requirements in its
microwave bands to ensure that licensees timely deploy networks and
provide service to customers.
For the 24 GHz Band microwave service, Local Multipoint
Distribution Service (LMDS) in the 28 and 31 GHz bands, and the
39 GHz Band microwave service, all licensees must demonstrate
substantial service at the end of their 10-year license term.
In 2008 and 2010, the Wireless Telecommunications Bureau
granted extensions of the build-out deadline until June 1, 2012
to licensees in the 24 GHz, 39 GHz, and LMDS bands with the
expectation that the licensees would deploy networks and
provide service within the extended timeframe. As a result,
these licensees had at least 11\1/2\ years to meet their build-
out requirements.
Question 5. What is the current state of wireless backhaul
deployment in the 24 and 39 GHz bands?
Answer. To date, most wireless backhaul deployment has occurred in
microwave bands lower than 24 or 39 GHz (for example, the 6 GHz, 11
GHz, 18 GHz, and 23 GHz bands).
IDT Spectrum (742 licenses) and Spectrum Holdings Technologies (199
licenses), have reported that they have met the build out requirements
for their licenses in the 39 GHz band.
Staff informs me that another licensee, which held 103 out of 111
issued 24 GHz licenses and was the second largest licensee in the 39
GHz band with 634 licenses, built out only 48 of its 737 combined 24
and 39 GHz licenses.
Question 6. Has any company tried to develop new technology that is
optimized for wireless backhaul in these new frequency bands?
Answer. Staff informs me that equipment is available for licensees
to deploy wireless back services in these frequency bands.
Question 7. The FCC has moved to reclaim wireless backhaul spectrum
in the 24 and 39 GHz range from a number of wireless backhaul providers
despite the providers request for additional time to complete their
roll-out. If the FCC ultimately reclaims spectrum in the 24 and 39 GHz
range, how long will it take, including the necessary legal
proceedings, for a new wireless backhaul provider to build-out a
backhaul service with the seized spectrum?
Answer. According to FCC staff, only one licensee failed to
demonstrate compliance with the substantial service requirements for 94
of its 24 GHz licenses and 595 of its 39 GHz licenses.
Staff informs me that the Wireless Telecommunications Bureau
(Bureau) denied that licensee's requests for an additional extension of
time to demonstrate substantial service for these licenses, as well as
its associated requests for waiver of the June 1, 2012 substantial
service deadline.
Based on these determinations, these licenses automatically
terminated, by operation of Commission rule, as of June 1, 2012. The
Bureau also denied similar requests for extensions in the LMDS band.
The Commission seeks to make spectrum in inventory available in an
efficient and timely manner. As a general matter, once a licensee
forfeits a license and it reverts back to inventory, the FCC can move
directly to re-auction.
With respect to the 24 GHz and 39 GHz licensees that automatically
terminated, a bankruptcy court injunction currently prohibits the
Commission from reassigning those licenses until the previous licensee
exhausts its appeal rights.
Question 8. In at least one case on Appeal to the Full FCC
Commission, a significant wireless backhaul provider, from whom the FCC
seized spectrum, has proposed an aggressive build-out plan that will
have its wireless backhaul network up and running in 18 months. If the
FCC were to prioritize the rollout of wireless backhaul services, would
it be more expedient to grant an 18 month extension and allow a planned
expansion to move forward or can the FCC clear the spectrum and find
another company to build-out the necessary wireless backhaul in less
than 18 months?
Answer. This issue has been raised by a licensee's Application for
Review that seeks to overturn the Bureau's decision to terminate that
party's licenses. I am carefully considering this application.
Question 9. Will the FCC work to ensure that it takes all
appropriate actions, including reviewing prior staff-driven efforts
intended to strip existing wireless backhaul providers of their
spectrum, to speed the build-out of needed wireless backhaul services?
Answer. I intend to give careful consideration to the pending
application for Commission review of the Bureau's action denying its
extension request.
I hope the Commission will continue to take all appropriate actions
to promote the availability of wireless backhaul.
______
Response to Written Questions Submitted by Hon. Barbara Boxer to
Hon. Jessica Rosenworcel
Question 1. On November 30, 2012, I along with eight of my
colleagues sent a letter urging you not to relax the Commission's
cross-ownership rules without responding to our concerns about the low
levels of female and minority ownership of broadcast radio and
television stations. In February, the Commission announced that it
would be delaying its vote on the new rules as it awaits the results of
a study by the Minority Media and Telecommunications Council regarding
the effects of cross-ownership rules on minority ownership and
newsgathering.
Given the fact that MMTC's study is to be conducted by a broadcast
industry analyst who is backed by the newspaper and broadcast industry
associations and has publicly supported a relaxation of the cross-
ownership rules, do you believe the study represents an independent and
impartial analysis of the impact of cross ownership on minority owners?
Answer. The Minority Media and Telecommunications Council (MMTC)
has requested that the Commission defer its vote in the 2010
Quadrennial Review proceeding (Docket No. 09-182), which is mandated by
Congress, and the Promoting Diversification of Ownership in the
Broadcasting Services proceeding (Docket No. 07-294) in order to
conduct a study on the impact of cross-ownership on minority and female
broadcast ownership. Once MMTC has submitted the study to the
Commission, I will be in a better position to comment on its findings.
Generally, I have welcomed all stakeholders to submit studies and other
information that would be helpful to Commission deliberations. The
issues raised in the media ownership proceeding, including the
promotion of journalism and viewpoint diversity, are essential to
democratic discourse.
Question 1a. Do you believe the study's methodology will provide
the kind of analysis required by the Third Circuit Court of Appeals
when it ordered the Commission to provide better justification for
proposed diversity efforts?
Answer. In Prometheus Radio Project v. Federal Communications
Commission, the Court of Appeals for the Third Circuit remanded an
earlier decision on media ownership to the Commission. In doing so, it
specifically directed the agency to ``consider the effect of its rules
on minority and female ownership.''
Prior to my joining the Commission, the agency initiated a series
of studies on media ownership, several of which examined issues related
to minority ownership of broadcast stations and viewpoint diversity.
Based on the results of those studies and comments submitted in the
record, the Chairman of the agency chose to circulate a draft decision
in the 2010 Quadrennial Review proceeding. I believe that this
proceeding would still benefit from additional data and as a result, I
have consistently encouraged a wide range of stakeholders to submit
their views to the Commission. Yet until the MMTC study is before the
agency, it is difficult to comment on its methodology and specific
content. But I believe that it is essential for the Commission to build
a record that is responsive to the remand of the Third Circuit Court of
Appeals and consistent with the law.
Question 1b. Does the Commission believe that radio contributes to
viewpoint diversity?
If the Commission were to conclude that radio does not contribute
to diversity, how would that decision undermine future efforts to
ensure that radio ownership is as diverse as the country it serves?
Answer. Radio is a versatile medium that can provide local content
and serve as an outlet for a wide range of viewpoints. Unfortunately,
women and minorities are substantially underrepresented in the
ownership of radio stations. Simply put, the ownership of full-power
broadcast stations is not as diverse as the country it serves. The
decrease in ownership has been especially acute following the
elimination of the minority tax certificate program in 1995. As a
result, at present, racial and ethnic minorities control only 8 percent
of full-power radio stations and 3.6 percent of full-power television
stations. In analyzing the 2010 Quadrennial Review proceeding, the
Commission must be guided by its traditional goals of localism,
diversity, and competition. I look forward to working with you on these
issues going forward.
Question 2. The Commission has acknowledged that rural consumers
are experiencing significant problems receiving long distance or
wireless calls on their landline telephones. The problem appears to be
attributable to the use of IP-based least-cost routing providers.
What does the Commission plan to do to ensure that such
interconnection and reliability problems do not become more prevalent
as our Nation's telephone networks transition to wireless and IP-based
services?
Answer. Failure to complete calls to rural subscribers can cut
families off from relatives, lead rural businesses to lose customers,
and create dangerous delays for public safety communications. This is
unacceptable. That is why I supported a recent Notice of Proposed
Rulemaking (FCC 13-18) that proposed new record-keeping requirements
for originating facilities-based interstate service providers,
including wireless providers and interconnected VoIP providers.
Adopting these requirements would mean the Commission would have the
data necessary to go after bad actors, vigorously enforce its rules,
and bring an end to rural call completion problems. The comment cycle
for this rulemaking closes on May 28, 2013. I am committed to acting
quickly to work with my colleagues to adopt final rules in this
proceeding.
Question 2a. In light of the recent complaint filed in Federal
court by VoIP providers claiming that the Commission lacks authority
under the Communications Act to apply the no-blocking rule to VoIP
calls, is additional authority needed from Congress to address the
rural call completion problem?
Answer. I believe that the Commission has the authority necessary
to address the rural call completion problem. However, I acknowledge
that the Commission has not yet formally determined whether VoIP
services that are exchanged with local exchange carriers over the
public switched telephone network should be classified as
``telecommunications services'' or ``information services'' under the
Communications Act. If the Commission relies on authority under the
former, it would be able to ban call blocking and practices that result
in the failure to complete calls to rural areas as ``unjust and
unreasonable practice[s]'' under Section 210(b) of the Communications
Act, among other possible provisions. If, however, the Commission
relies on authority under the latter, it would need to exercise
authority under its Title I jurisdiction to adopt rules reasonably
ancillary to the effective performance of its statutorily mandated
responsibilities, such as enforcing a prohibition on call blocking and
related practices by carriers. But as a general matter, I would welcome
any additional authority that Congress believes is necessary to address
this problem.
Question 3. More than half of U.S. broadband subscribers are
subject to some form of bandwidth cap or usage-based pricing. Experts
have pointed out that broadband caps are inefficient for addressing
network congestion and may, instead, have anticompetitive effects. What
does the Commission plan to do to ensure that caps do not undermine
access to affordable, high-speed broadband?
I believe that the Commission should monitor the evolution of data
caps--and their impact on consumers. As a general matter, I support the
proposition that those who use more of service may need to pay more--as
is the case with usage-based pricing. Moreover, if these schemes are
transparent and address real network capacity concerns, they can be a
legitimate tool to manage network congestion. But I recognize that if
data caps are set only to generate fees for exceeding the caps, this
can reduce incentives for robust broadband deployment and hinder access
to affordable, high-speed broadband.
______
Response to Written Question Submitted by Hon. Frank R. Lautenberg to
Hon. Jessica Rosenworcel
Question. Nineteen states currently restrict local governments'
ability to offer broadband, even in areas where companies won't make it
available or affordable. I have previously introduced bills that would
prevent states from restricting municipal broadband, and I am
considering reintroducing this legislation. Do you agree that states
should not be permitted to restrict municipalities from offering
broadband to their residents?
Answer. I agree. Access to broadband is essential for prosperity in
the 21st century. In communities that lack broadband services,
municipalities may offer the only solution to bringing affordable high-
speed services to their residents. I believe that state laws that
restrict local governments from offering broadband to their residents--
particularly in unserved areas--can hinder broadband deployment and
adoption.
______
Response to Written Questions Submitted by Hon. Claire McCaskill to
Hon. Jessica Rosenworcel
Question 1. Chairman Genachowski and I have both written to the
Federal Aviation Administration (FAA) encouraging the agency to revise
its rules to allow for the expanded use of electronic devices during
flight. The FAA has established an Aviation Rulemaking Committee (ARC)
to look at possible changes to the rules, and the FCC has a
representative on that committee, which will make recommendations to
the FAA Administrator this summer.
I am convinced, and I think most Americans agree, any safety
concerns that might have once existed to justify the current rules have
been addressed by advances in technology both on the airplane itself
and in consumer electronics. While I recognize the decision is not one
that rests with the FCC, as leaders on technology issues--and as one of
only three government agencies with a seat at the table, and the only
not under the Department of Transportation--I want to know if all of
the Commissioners share those views on this issue.
Answer. Yes. Demand for wireless services is growing at a
breathtaking pace. Consumers have come to expect that they can rely on
their electronic devices at all times--including when they travel. At
the same time, it is necessary to make sure that consumers use their
devices in a way that does not jeopardize public safety. To this end, I
understand that the Federal Aviation Administration is closely
examining the impact of the use of electronic devices on aircrafts. As
part of this effort, the Commission is participating in the Federal
Aviation Administration's Aviation Rulemaking Committee to examine this
issue. I am hopeful that this process will result in revised policies
that permit greater use of personal electronic devices during flight
without harming public safety.
Question 1a. Given Chairman Genachowski's stated position on the
issue, can I trust that you will be directing the FCC's representative
on the ARC to convey the opinion of the Commission that the rules
should be changed and work to aggressively push the FAA to do so?
Answer. While only the Chairman of the agency provides formal
direction to the Commission's representative to the Aviation Rulemaking
Committee, I support his efforts. Moreover, I believe that the
Commission should continue to work with the Federal Aviation
Administration to update rules limiting consumer access to personal
electronic devices on aircraft.
Question 2. Although the FCC's reforms to the Universal Service
Fund's (USF) Lifeline program through its February 2012 order were much
needed, and attempted to address duplicative Lifeline support,
ineligibility, deceptive marketing and other concerns raised in my
December 2011 letter to you on this topic, the reforms appear to have
had little effect in limiting the rapid growth of the program.
While I commend the Commission for its attempt to rein in the rapid
growth of the Lifeline program and address the problems you inherited
when the program was expanded to include wireless providers without any
additional safeguards to prevent waste, fraud and abuse, even with the
reform order in place the Lifeline program grew by 26 percent ($445
million) last year. What additional action is the Commission
considering to address waste, fraud and abuse in the Lifeline program?
Question 2a. Specifically, would the Commission consider suspending
new enrollment in the program while the reforms continue to be
implemented? Would the Commission consider capping the program?
Answer. The Lifeline program is an important part of keeping
everyone in this country connected. After all, having access to
telephone service is essential for calling emergency services, being
able to secure a job, take care of loved ones, and manage routine
interactions with government and with healthcare providers. But for
this program to continue to work, the Commission must do more to ensure
that it is free of waste, fraud, and abuse. Before I arrived at the
agency, my colleagues took steps to improve the Lifeline program. To
date, their reform efforts have already saved more than $200 million in
2012 and are on track to save as much as $400 million in 2013. In
addition, the number of Lifeline subscribers has declined each month
since August 2012 and now stands at 13.2 million down from 18.2
million.
This is a good beginning. But we need to do more--because this is a
program that needs mending, not ending. To start, I believe we should
do more auditing. In particular, I think the agency's Office of
Inspector General should be tasked with a review of this program and
the effectiveness of the reforms already put in place. Moreover, I
recognize that in the Lifeline reforms adopted by my colleagues last
year, they specifically contemplated that after these reforms went into
effect the agency would be in a position to determine if a specific
budget for the program is necessary. Furthermore, I believe we should
revisit questions raised in our last rulemaking on this subject--
including if the $9.25 per month subsidy is the appropriate monthly
support amount for this program. However, given that the number of
Lifeline subscribers has declined substantially, I do not believe
suspension of new enrollment would be prudent at this time.
Question 2b. We are quick in Washington to create new programs but
what we don't do often enough is reevaluate those programs to make sure
they're still needed. The FCC created the Lifeline program nearly 30
years ago to make sure local phone service was still affordable for
low-income Americans following the breakup of AT&T in 1984. Because
technology has changed and competition has grown, basic
telecommunications services are as affordable as ever. I am wondering
if the Commission has recently looked at whether the Lifeline program
is even still necessary, and if not if you would be willing to do so?
Answer. As noted above, the Lifeline program is an important part
of keeping low-income consumers connected to loved ones, emergency
services, healthcare providers and employment opportunities. However,
across the board, all of our universal service programs merit our
regular review, attention, and care. To this end, the agency must
continuously evaluate the Lifeline program to ensure that it is meeting
its intended purpose under Section 254(b)--that quality voice services
are available at affordable rates for low-income consumers throughout
the Nation.
Question 3. In order to keep up with the demand for spectrum, many
in the private-sector believe efforts need to be taken to clear some of
the federally-occupied spectrum for commercial use, most significantly
spectrum currently occupied by the Department of Defense. Chairman
Genachowski and I have discussed this issue but I am interested in the
views of all of the commissioners.
With the exponential rise in demand for mobile broadband services,
we need to look at all potential resources for spectrum repurposing--
including Federal Government users. The GAO recently reported that the
total percentage of the most highly-valued spectrum exclusively or
predominantly used by the Federal Government is as high as 57 percent.
Given Federal agency budgets, many of these systems are not up-to-date
and thus operate inefficiently, and some Federal uses could be served
by commercial mobile providers. Are there specific instances in which
you believe Federal spectrum could be operated more efficiently?
Answer. Federal authorities have substantial spectrum assignments.
Critical missions throughout the government are dependent on access to
our airwaves. Nonetheless, we are on a hunt for new opportunities for
commercial spectrum, in order to reach the 500 megahertz benchmark for
new wireless broadband use in the Executive Order from President Obama
more than two years ago.
In accord with the Commercial Spectrum Enhancement Act, the
Commission recently notified the National Telecommunications and
Information Administration of plans to auction the 1755-1780 MHz band
and the 1695-1710 MHz band. These bands are particularly well suited
for commercial use because they can be paired with other spectrum bands
required to be auctioned by the Middle Class Tax Relief and Job
Creation Act. Specifically, the 1755-1780 MHz band can be paired with
the 2155-2180 MHz band and the 1695-1710 MHz band can be paired with
the 2095-2110 MHz band.
But ultimately, I think it is time for a fresh approach to Federal
spectrum use. Our traditional approach to repurposing Federal spectrum
entailed a three-step process--clearing Federal users, relocating them,
and then auctioning the cleared spectrum for new commercial use.
Although this process has worked well in the past, it will be harder
from here on out. After all, more government functions than ever before
are traveling over our airwaves. Furthermore, finding new spectrum for
government relocation and the funds to support moving is growing more
challenging.
To be successful going forward, I believe we need a new paradigm. I
believe Federal Government users must share in the benefit from
repurposing their spectrum. To this end, it is time to develop a series
of incentives to serve as the catalyst for freeing more Federal
spectrum for commercial use. We need to find ways to reward Federal
authorities for efficient use of their spectrum so that they see
benefit in commercial reallocation and not just loss. I believe if we
align incentives properly, we will both make Federal use of this scarce
resource more efficient and create new opportunities for commercial
use.
Question 4. In addition to this Committee I also serve on the Armed
Services Committee. I have started to look at ways we can incentivize
Federal agencies--including the Department of Defense--to clear or
share spectrum, to free up more spectrum for commercial auction. Based
on your experience working with Federal spectrum users, what ideas can
you offer for creating such incentives?
Answer. As noted above, I think it is necessary to start
identifying ways to incentivize Federal authorities to be more
efficient with spectrum. We need a system that rewards them for
reducing their current allocations and using the spectrum they have
more efficiently. To this end, we need to find ways that reward Federal
authorities when they can identify a swath of their airwaves that can
be repurposed and transitioned from Federal to commercial use. In
short, they must see value from using spectrum efficiently instead of
just seeing loss from commercial reallocation. These rewards could come
in a variety of forms. They could be straightforward and financial--
under which a certain portion of the revenue from the commercial
auction of their previously held spectrum would be reserved for the
Federal entity releasing the spectrum. They could also involve revenue
from leasing for shared access during a period of transition to cleared
rights. They also might involve incentives through the budget and
appropriations process. Finally, it may be useful to consider the
development of synthetic currency, as proposed by the President's
Council of Advisors on Science and Technology, to provide a consistent
way to reward efficiency.
In the end, when it comes to transitioning spectrum from Federal to
commercial use, we need not only use sticks--we should explore carrots.
I think the latter is bound to facilitate more opportunity in spectrum
bands. Given the multiplying number of wireless devices in our lives
and the growing demands on our airwaves--licensed and unlicensed--now
is not a moment too soon.
Question 5. Last year Congress passed a Rubio-McCaskill resolution,
S.Con.Res. 50, stating that Internet infrastructure and content should
remain free from international regulation. Members of the U.S.
delegation to the ITU conference in Dubai have indicated that Congress
sending a clear message on the issue was helpful in their negotiations
and that our efforts on this issue should continue, especially since
those nations that want greater regulation of Internet infrastructure
and content will certainly continue in their efforts. What more can
Congress be doing to help promote a free and open Internet around the
world?
Answer. Last year, I had the privilege of serving as part of the
United States delegation to the Asia-Pacific Economic Cooperation in
St. Petersburg, Russia. The meeting I attended was a preparatory
meeting before the International Telecommunication Union's World
Conference on International Telecommunications (WCIT) in Dubai last
December. I was able to witness firsthand the benefit of strong
bipartisan support from the Congress. To this end the unity of purpose
embodied in S.Con.Res. 50 will continue to be helpful going forward as
the United States seeks to promote a globally free and open Internet,
including in the World Telecommunication/ICT Policy Forum (WTPF) taking
place in May this year in Geneva.
Question 5a. A handful of countries, such as China and Iran, want
to heavily censor the Internet content people can access inside their
borders, while many other nations are simply looking for ways to
generate revenue from Internet traffic that moves through their
country, much in the same way they have done with voice communications
for years. Are there policies the United States can and should be
promoting around the globe to help other nations develop their
telecommunications infrastructure, unleash the economic activity that
comes with it, and thus remove their desire to use global Internet
traffic as a revenue source?
Answer. The discussions at the WCIT in Dubai made clear that it is
necessary to work closely with developing countries to highlight the
social and economic benefits of widespread Internet access. The
Commission is working closely with the Department of State and other
agencies to continue outreach efforts that focus on promoting an
environment for broadband development that creates opportunities for
the private sector to invest in innovative technologies. For example,
the United States has encouraged countries to adopt transparent policy
and legal frameworks; open telecommunications markets to competition;
adopt licensing and taxation reforms; establish transparent universal
service programs to support telecommunications instead of traditional
subsidies from international services; and encourage the efficient and
innovative use of spectrum for mobile broadband. Moreover, in my own
international work, including at the Asia-Pacific Economic Cooperation
in St. Petersburg, Russia and the World Mobile Congress in Barcelona,
Spain, I have and will continue to emphasize that regulations that seek
to control revenue flows will hinder investment and impede broadband
growth.
Question 6. The upcoming incentive auctions have been pitched to
Congress as a market-based mechanism that would help put spectrum in
the hands of those most capable of unleashing its economic potential.
That was an appealing idea, and on that basis Congress authorized you
to conduct them. Now there is some concern that the Commission is
contemplating going beyond what will be freed up by the auctions and is
considering repurposing or reallocating many more megahertz in rural
areas just through repacking broadcasters and eliminating LPTV and
translator service. Is your intention to deal only with what is freed
up by auctions, or is your intention to reallocate as much spectrum
from broadcasters to broadband providers as possible?
Answer. The Middle Class Tax Relief and Job Creation Act directs
the Commission to conduct an incentive auction involving broadcast
spectrum, followed by a repacking of remaining broadcasters in order to
free airwaves for a commercial wireless broadband auction. In doing so,
the Commission must evaluate the broadcast television spectrum,
including the spectrum made available through the required reverse
auction and used by low power stations. We have a duty to follow the
law and act consistently with the statute. I will certainly do so.
As a general matter, however, there is greater demand for wireless
spectrum in congested urban areas and lesser demand in sparsely
populated rural areas. As a result, there may be limited need to
reallocate spectrum in rural areas where low power television and
translators provide service to local communities. But the specific
situations in individual communities, in light of their geography and
spectrum interests, may vary.
Question 6a. Has the Commission studied the impact of reclaiming
spectrum on LPTV and translator service, especially in more rural
states that rely heavily on them to reach areas where no other service
is available?
Answer. In our Notice of Proposed Rulemaking concerning the
upcoming spectrum auctions (FCC 12-118), the Commission specifically
recognized that ``[l]ow power television stations are a source of
diverse and local television programming, and television translator
stations are an important free, over-the-air television resource in
rural and remote locations.'' I agree. The agency sought comment on
``measures to help ensure that important programming provided by low
power television and television translator stations continues to reach
viewers.'' My office is in the process of reviewing the comments
submitted in response to this rulemaking.
It is important to note, however, that the Middle Class Tax Relief
and Job Creation Act provided specific protections in the repacking
process strictly to full power and Class A stations. At the same time,
Congress made clear that the spectrum usage rights of low power
television stations would not be altered by the law. As a result, the
Commission must work within the parameters of the statute as it
determines how best to preserve access to local programming, including
programming broadcast by low power television stations and through the
use of translators.
______
Response to Written Question Submitted by Hon. Amy Klobuchar to
Hon. Jessica Rosenworcel (Referenced in the hearing)
Question. An issue I've been interested in for several years is
metal theft. It's a crime that we see across the country and that tends
to increase with rising metal prices. And in the past, the FBI has put
out information on the threat posed to critical infrastructure by metal
theft. It can also be extremely costly to many different industries,
including the telecom industry.
I've introduced legislation with Senators Graham, Schumer and
Hoeven, which would make it an explicit Federal crime to steal metal
from critical infrastructure and take various steps to help prevent
metal theft more broadly. Most states have enacted laws that try to
address the problem, but they are something of a patchwork. My bill
will not pre-empt existing state laws, but rather will aim to fill in
gaps and allow the Federal Government to partner with state and local
authorities.
Can you talk about how metal theft can cause damage to telecom
infrastructure and lead to disruptions to telecom service and to what
degree can it cause problems for public safety? Is the FCC doing
anything currently to address this issue?
Answer. Shortly after Hurricane Sandy struck last year, I visited
some of the communications facilities in New York that were hard hit by
the storm. I will never forget the messy tangle of wires and the mass
of technicians working inside through the night to get our networks
back up and running. But I was also struck by the guards standing
outside on the street in front of a giant container, filled with metal
pieces from the repair work required following the storm. On top of
everything else required in the aftermath of the hurricane, it was
necessary to take these steps to prevent metal theft and the additional
damage it could cause to communications infrastructure.
So I understand that metal theft can cause network outages that
disrupt service and endanger lives. It can sever communities from first
responders by harming access to emergency 911 systems. Moreover,
replacing and repairing damaged communications infrastructure is
costly. In fact, the Department of Energy has estimated that metal
theft costs businesses across the country roughly $1 billion each year.
While I am not aware of ongoing Commission initiatives regarding metal
theft, I would be pleased to work with you to address this problem.
______
Response to Written Questions Submitted by Hon. Richard Blumenthal to
Hon. Jessica Rosenworcel
Broadband Competition
Question 1. In 2010 the FCC stated in the National Broadband Plan
that, ``. . . there are reasons to be concerned about wireline
broadband competition in the United States. Whether sufficient
competition exists is unclear and, even if such competition presently
exists, it is surely fragile.''
The plan further stated that, ``To ensure that the right policies
are put in place so that the broadband ecosystem benefits from
meaningful competition as it evolves, it is important to have an
ongoing, data-driven evaluation of the state of competition,'' and that
``additional data are needed to more rigorously evaluate broadband
competition.''
The Plan specifically recommended the Commission undertake a number
of reforms to data collection including:
1. ``[C]ollect broadband availability data at the census block
level, by provider, technology and offered speed.''
2. ``[C]ollect data on advertised prices, prices actually paid by
subscribers, plans, bundles and promotions of fixed and mobile
broadband services that have material penetration among users,
as well as their evolution over time, by provider and by
geographic area.'' The Plan stated that in particular, it ``is
crucial that the FCC track and compare the evolution of pricing
in areas where two service providers offer very high peak
speeds with pricing in areas where only one provider can offer
very high peak speeds.''
3. ``[C]ollect information related to switching barriers, such as
early termination fees and contract length.''
The National Broadband Plan also recommended that the Commission
establish a general policy of making the data it collects available to
the public, including via the Internet in a broadband data depository.
These recommendations reflect the comments of the Department of
Justice, who told the Commission that it ``. . .should expand its
efforts to include an assessment of the nature and extent of
competition in each local broadband market.''
Nearly two years after the National Broadband Plan was released,
the Commission issued a Notice of Proposed Rulemaking (NPRM) that
encapsulated many of these recommendations. The Commission has yet to
act on this NPRM.
Chairman Genachowski, Commissioners McDowell, Clyburn, Rosenworcel
and Pai, do you agree with the National Broadband Plan's
recommendations on the need to collect these additional broadband data?
Do you think the Commission, policymakers and the public have the
appropriate data to determine if the Commission's competition policies
are, in the words of the Department of Justice, using the appropriate
``policy levers. . . to produce superior outcomes,'' and if not, what
additional data is needed?
Answer. I agree that the Commission should be collecting these
additional data. With more information, we will be able to improve our
assessment of competition and enhance our broadband policies. Back in
2011, before I joined the Commission, the agency adopted a Notice of
Proposed Rulemaking to consider updates to the Commission's broadband
data collection efforts. At present, the Commission collects broadband
subscription data on a census tract basis. Yet because more detail is
needed, the agency has relied on the National Telecommunications and
Information Administration's National Broadband Map to inform its
broadband policy initiatives. The National Broadband Map shows
broadband availability at the more granular census block level data and
includes information on the speeds offered by provider type.
Going forward, the Commission must continue to work with the
National Telecommunications and Information Administration to make sure
that the National Broadband Map is kept up to date with the information
we need. In addition, I believe that the Commission should collect more
data that is relevant to consumers, including information on the price
and structure of broadband services offered. I also agree that these
data should be made public to the greatest extent possible. Moreover,
we should make this information available in full electronic, machine-
readable formats. By making it public in this fashion we can turn to
others to help us process the data and identify meaningful trends that
deserve our attention, our concern--or even our praise.
Sports Blackouts
Question 2. Over one year ago, I wrote the FCC and requested the
agency allow public comment on a petition for rulemaking asking the
Commission to reexamine the Sports Blackout Rule. This rule is nearly
forty years old and, along with other Federal rules and league
policies, is one of many obstacles making it unreasonably difficult for
fans to watch their favorite teams play.
I thank the Commission for taking my letter seriously and opening a
Notice of Inquiry (NOI) to solicit comments from the public and other
stakeholders. However, that docket was opened in January of 2012 and
the Commission has yet to take any further action.
The response in the proceeding was overwhelming. The NOI garnered
thousands of comments from consumers impacted by local sports
blackouts, including elderly and disabled sports fans unable to attend
live games. The NFL's revised local blackout policy seems to have done
little in the last regular season to help the most heavily impacted
markets. Commenters have proposed several options, including preserving
the status quo, eliminating the Sports Blackout Rule altogether, or
adopting a sunset period requiring a public interest showing to renew
the rule.
Chairman Genachowski, Commissioners McDowell, Clyburn, Rosenworcel
and Pai, what else can the Commission do to help fans unable to watch
their favorite teams compete?
Answer. When a game is blacked out and unavailable for viewing in
the local community, fans often contact the Commission--irritated and
upset that they cannot watch their hometown team. Although I appreciate
that the NFL has revised its local blackout policy, I understand that
15 games were still blocked in 2012. This is unfortunate. Accordingly,
I would support the Commission reexamining the policies behind this
forty year old rule in a Notice of Proposed Rulemaking and formally
determining if retaining this rule remains in the public interest.
______
Response to Written Questions Submitted by Hon. John Thune to
Hon. Jessica Rosenworcel
Question 1. Section 706(b) of the 1996 Telecommunications Act
requires the Commission to conduct a regular inquiry into ``whether
advanced telecommunications capability is being deployed to all
Americans in a reasonable and timely fashion.'' If answered in the
negative, the Commission is further directed by law to ``take immediate
action to accelerate deployment of such capability by removing barriers
to infrastructure investment and by promoting competition in the
telecommunications market.''
Commissioner Rosenworcel, your official statement upon the release
of the August 2012 ``706 Report'' referenced an OECD ranking in which
the United States ranks 15th in the world in fixed broadband
penetration. You said: ``Until the data unequivocally demonstrate that
we [lead the world in broadband], how can the answer to our Section 706
inquiry--whether advanced telecommunications capability is being
deployed to all Americans in a reasonable and timely fashion--be
anything but no?''
Question 1a. Is your view of the ``706'' determination as simple as
that--that we are not deploying advanced telecommunications services in
a reasonable and timely manner if the United States is not ranked
number one in a particular OECD broadband ranking?
Answer. Section 706 asks the Commission to examine ``whether
advanced telecommunications capability is being deployed to all
Americans in a reasonable and timely fashion.'' The Commission
considers a broad range of broadband data in its Section 706 inquiry,
including but not limited to the number of households served by
broadband, the number of Americans that have adopted broadband
services, and international broadband data. This is as it should be.
However, I believe that the state of broadband deployment in the
United States relative to the rest of the world is a relevant factor to
the agency's inquiry into whether broadband is being deployed in a
``reasonable and timely fashion.'' Broadband deployment is a key driver
of economic growth both here in the United States and abroad. If the
United States lags behind its peers in broadband deployment and
adoption, we will also lag behind in our ability to compete in the
global economy. Failure to encourage a robust broadband infrastructure
that is competitive with the most advanced nations will lead to a loss
in American jobs and business.
Question 1b. Did you or your staff analyze the particular OECD
ranking cited in your comments? If so, would you provide the Committee
with your analysis?
Answer. My staff and I reviewed the Commission's broadband reports,
which are publicly available documents. The Commission's Eighth
Broadband Progress Report (FCC 12-90) and a companion report prepared
by the agency's International Bureau titled the International Broadband
Data Report (DA 12-1334) cite to and analyze international broadband
data from the Organization for Economic Co-operation and Development
and other sources.
Question 1c. If a future ``706 Report'' is answered in the
affirmative, do the actions taken at the FCC in its Open Internet
Order--under authority claimed to exist because of the negative 706(b)
determination--become unauthorized?
Answer. No. It is my understanding that the Open Internet Order
(FCC 10-201) relied for its statutory authority not only on section
706(b) of the Telecommunications Act of 1996, but also on other sources
of authority. Those statutory bases include section 706(a) of the
Telecommunications Act of 1996 and Title III of the Communications Act
of 1934, among other provisions. These are discussed in some detail in
paragraphs 115-137 of the Open Internet Order. I acknowledge, however,
that the Open Internet Order is under review before the Court of
Appeals for the District of Columbia Circuit.
______
Response to Written Questions Submitted by Hon. Dean Heller to
Hon. Jessica Rosenworcel
Question 1. The hearing touched on many themes that I believe the
Committee should look at including process reform, the looming
transition to IP and the Spectrum auction. However, an opportunity for
the Chairman and the Commissioners to share what they see ``over the
hill'' was not discussed at length. I would like to provide you with an
opportunity to share what you believe are some issues that may not have
been discussed at the hearing.
Answer. Thank you for this opportunity.
In addition to incentive auctions and our progress toward an
increasingly IP-based telecommunications infrastructure, I believe we
must focus additional energy on two things: providing incentives to
help free Federal spectrum for new commercial use and updating the E-
Rate program for the digital age.
First, demand for our airwaves is growing at a breathtaking pace.
We are a nation with more mobile phones than people. More than half of
these phones are smartphones, which require 35 times the bandwidth of
wireless phones with only voice capability. Tablets, which are now
owned by one in five households, use 121 times the bandwidth of
wireless phones with only voice capability. But this is only the
beginning. By the end of the decade, there will be 50 billion machine-
to-machine devices communicating wirelessly worldwide.
We need to prepare for this demand for spectrum. Right now,
courtesy of the Middle Class Tax Relief and Job Creation Act, the
Commission has a series of traditional spectrum auctions on tap. In
addition, it has new authority to repurpose spectrum for commercial
mobile broadband use through incentive auctions. Nonetheless, more
action is required.
That is why I think it is time to take a fresh look at Federal
spectrum use. Our traditional approach to repurposing Federal spectrum
entailed a three step process--clearing Federal users, relocating them,
and then auctioning the cleared spectrum for new commercial use. But
while this process may have worked in the past, more government
functions than ever before are traveling over our airwaves.
Consequently, it is growing harder to find spectrum for Federal
relocation.
To be successful going forward, I believe Federal users must share
in the benefit from repurposing their spectrum. We must develop a
series of incentives to serve as the catalyst for freeing more Federal
spectrum for commercial use. We should find ways to reward Federal
authorities for efficient use their spectrum resource. They need to see
benefit in commercial allocation, and not only loss. That is why I
believe if we align incentives properly, we will make Federal use more
efficient and create new opportunities for commercial use.
Second, we must update the E-Rate program to meet 21st century
education needs. This is a program that supports communications
services and broadband in schools and libraries across the country. Yet
year-in and year-out, the demand for E-Rate support is more than double
the roughly $2.3 billion the Commission now makes available annually.
Moreover, the Commission's own survey indicates that 80 percent of
schools and libraries believe that their broadband connections do not
meet their current needs. Access to adequate broadband capacity in our
schools and libraries is not a luxury--it is a necessity for our next
generation to be able to compete.
That is why I believe we should create E-Rate 2.0. We can protect
what we have already done with this program, build on it, and put the
program on a course to provide higher speeds and greater opportunities
in the days ahead. To do so, we need to set new capacity goals. To this
end, I believe that by the 2015 school year, every school should have
access to 100 Megabits per 1000 students. Before the end of the decade,
every school should have access 1 Gigabit per 1000 students.
Question 2. The spectrum auction is of the utmost importance. Is
the Commission going to set a target date of 2014?
Answer. I have repeatedly called for a clear timeline for our
incentive auctions--and all of our spectrum auctions. A date certain
will focus all stakeholders, lead to capital formation, provide
certainty for broadcasters, and help ensure success for all of our
upcoming spectrum auctions.
Question 2a. What are the challenges with hitting this date?
Answer. The incentive auctions that Congress called on the
Commission to implement will be the most complex spectrum auctions ever
conducted anywhere in the world. We must develop a first of its kind
reverse auction to benefit broadcasters, devise a method to repack
remaining broadcasters, and create a band plan to give opportunities to
wireless carriers in the 600 MHz band. But while we certainly face
challenges, the Commission has plenty of experience on which to draw.
Over the course of the last two decades, the agency has held more than
80 auctions; it has issued more than 36,000 licenses; and it has raised
more than $50 billion for the United States Treasury. The Commission's
past simultaneous multiple round ascending auctions have been a model
for governments and commercial wireless providers across the globe.
Question 3. The Commission's spectrum incentive auction process has
the potential for channel reassignment. Nevada has over 300 translators
and low power TV stations, any repacking will put a significant burden
on these stations. Is the FCC taking this into consideration? Can the
Commission preserve viewer access to local channels and still hit the
target of 2014 for the auction to take place?
Answer. In the Notice of Proposed Rulemaking in the Matter of
Expanding the Economic and Innovation Opportunities Through Incentive
Auctions (FCC 12-118), the Commission recognized that ``[l]ow power
television stations are a source of diverse and local television
programming, and television translator stations are an important free,
over-the-air television resource in rural and remote locations.'' The
agency sought comment on ``measures to help ensure that important
programming provided by low power television and television translator
stations continues to reach viewers.'' My office is in the process of
reviewing the comments submitted in response to this rulemaking.
It is important to note, however, that the Middle Class Tax Relief
and Job Creation Act provided specific protections in the repacking
process strictly to full power and Class A stations. At the same time,
Congress made clear that the spectrum usage rights of low power
television stations would not be altered by his law. As a result, the
Commission must work within the parameters of the statute in
determining how best to preserve access to local programming, including
programming broadcast by low power stations.
I will work diligently to implement this law as quickly and
effectively as possible to meet the goals of Congress. I believe a 2014
target for the auction remains achievable. However, I also recognize
that as we receive additional input from stakeholders, we need to be
open to adjusting this target, if necessary.
Question 4. According to the National Broadband Plan wireless
backhaul is ``critical to the deployment of wireless broadband and
other wireless services,'' particularly ``when fiber is not proximate
to a cell site.'' I understand that the existing wireless backhaul
networks face a number of regulatory and technological constraints that
limit their potential capacity. These independently-powerable services
are also important to undergird FirstNet, the national first responder
network. How is the FCC working to speed the deployment of wireless
backhaul services in new frequency bands?
Answer. Backhaul is the essential artery from the network edge to
the network core. Traditionally, backhaul has been the province of
copper circuits and fiber optic lines. But as our networks rely
increasingly on wireless technologies, microwave facilities are now
often used to transmit data between cell sites and between cell sites
and network backbones.
As recommended by the National Broadband Plan, the Commission
initiated a proceeding in 2010 to facilitate the deployment of wireless
backhaul. Overall, through this proceeding, the Commission has made 650
megahertz of additional spectrum available for wireless backhaul, most
of which in rural areas. While some of the issues involved in this
proceeding were addressed before I took office last year, I did vote to
approve an order last fall that helped streamline many technical rules,
such as updating microwave backhaul efficiency standards, providing
higher capacity channels, and allowing use of smaller antennas. These
policies decreased costs and increased flexibility, resulting in
lowered barriers to entry in rural areas where laying new fiber for
backhaul can be prohibitively expensive. I also voted to eliminate
unnecessary rules that hindered deployment in the microwave bands.
In addition, the Commission adopted build-out requirements before I
took office that I understand were intended to encourage deployment of
wireless backhaul. For instance, licensees in the 24 GHz Band microwave
service, Local Multipoint Distribution Service in the 28 GHz and 31 GHz
bands, and the 39 GHz Band microwave service were initially required to
demonstrate substantial service at the end of their 10-year license
term, though that deadline was extended twice by the Commission's
Wireless Bureau.
Question 4a. What is the current state of wireless backhaul
deployment in the 24 and 39 GHz bands?
Answer. As I understand it, most wireless backhaul deployment has
occurred in microwave bands lower than 24 GHz or 39 GHz bands
(including, for example, in the 6 GHz, 11 GHz, 18 GHz, and 23 GHz
bands). IDT Spectrum, which holds 742 licenses, and Spectrum Holdings
Technologies, which holds 199 licenses, have reported that they have
met build-out requirements for their licenses in the 39 GHz band.
Fibertower, which held 103 licenses in the 24 GHz band and 634 licenses
in the 39 GHz band, built out 48 of its 737 combined 24 and 39 GHz
licenses.
Question 4b. Has any company tried to develop new technology that
is optimized for wireless backhaul in these new frequency bands?
Answer. My understanding is that licensees in both the 24 GHz and
39 GHz bands report that equipment is available for wireless backhaul
in these bands.
Question 5. The FCC has moved to reclaim wireless backhaul spectrum
in the 24 and 39 GHz range from a number of wireless backhaul providers
despite the providers request for additional time to complete their
roll-out.
If the FCC ultimately reclaims spectrum in the 24 and 39 GHz range,
how long will it take, including the necessary legal proceedings, for a
new wireless backhaul provider to build-out a backhaul service with the
seized spectrum?
Answer. As I understand it, one licensee failed to meet the
construction deadlines for a number of its 24 GHz and 39 GHz licenses.
Using its delegated authority, the Wireless Telecommunications Bureau
declined to extend the deadlines for construction beyond June 1, 2012,
which led to the termination of the licenses. Note that the Wireless
Telecommunications Bureau also denied similar request for extensions in
the Local Multipoint Distribution Service in the 28 GHz and 31 GHz
bands.
While as a general matter, I believe that the Commission should set
timelines for auctioning spectrum that is in our inventory, the
specific 24 GHz and 39 GHz licenses that terminated last year are
subject to a bankruptcy court injunction that prevents us from
auctioning the licenses at this time.
Question 6. In at least one case on Appeal to the Full FCC
Commission, a significant wireless backhaul provider, from whom the FCC
seized spectrum, has proposed an aggressive build-out plan that will
have its wireless backhaul network up and running in 18 months. If the
FCC were to prioritize the rollout of wireless backhaul services, would
it be more expedient to grant an 18 month extension and allow a planned
expansion to move forward or can the FCC clear the spectrum and find
another company to build-out the necessary wireless backhaul in less
than 18 months?
Answer. The Commission should strive to encourage timely and
efficient deployment of spectrum. One tool that the Commission uses to
accomplish that goal is construction deadlines that prevent licensees
from warehousing spectrum that they are not using. If a licensee fails
to meet the deadlines, the Commission should act quickly to make the
spectrum available to other licensees who may be able to put the fallow
spectrum to use.
Question 7. Will the FCC work to ensure that it takes all
appropriate actions, including reviewing prior staff-driven efforts
intended to strip existing wireless backhaul providers of their
spectrum, to speed the build-out of needed wireless backhaul services?
Answer. I make every effort to act quickly when considering
petitions to review staff work. With respect to the petition from
Fibertower, my office met with the company's representatives shortly
after a draft order was circulated to the Commissioners. I voted on the
matter within days of that meeting.
______
Response to Written Questions Submitted by Hon. Barbara Boxer to
Hon. Ajit Pai
Question 1. On November 30, 2012, I along with eight of my
colleagues sent a letter urging you not to relax the Commission's
cross-ownership rules without responding to our concerns about the low
levels of female and minority ownership of broadcast radio and
television stations. In February, the Commission announced that it
would be delaying its vote on the new rules as it awaits the results of
a study by the Minority Media and Telecommunications Council regarding
the effects of cross-ownership rules on minority ownership and
newsgathering.
Given the fact that MMTC's study is to be conducted by a broadcast
industry analyst who is backed by the newspaper and broadcast industry
associations and has publicly supported a relaxation of the cross-
ownership rules, do you believe the study represents an independent and
impartial analysis of the impact of cross ownership on minority owners?
Answer. MMTC has indicated to the Commission that its study will be
peer reviewed and conducted in accordance with refereed journal
standards. Before reaching any conclusions about the study's merit, I
will need to review the completed study along with any accompanying
peer review.
Question 1a. Do you believe the study's methodology will provide
the kind of analysis required by the Third Circuit Court of Appeals
when it ordered the Commission to provide better justification for
proposed diversity efforts?
Answer. Because I have not seen or read the completed study, I have
not yet reached any conclusions on this issue.
Question 1b. Does the Commission believe that radio contributes to
viewpoint diversity?
Answer. In the Notice of Proposed Rulemaking issued in the 2010
Quadrennial Review (and before I took office), the Commission
tentatively concluded that ``radio stations are not the primary outlets
that contribute to local viewpoint diversity.''
Question 1c. If the Commission were to conclude that radio does not
contribute to diversity, how would that decision undermine future
efforts to ensure that radio ownership is as diverse as the country it
serves?
Answer. I believe that the Commission should move forward quickly
to implement many proposals advanced by MMTC to enhance ownership
diversity, such as establishing an incubator program and relaxing
restrictions on foreign investment. My support for these proposals does
not depend on the strength of the link between radio and local
viewpoint diversity.
Question 2. The Commission has acknowledged that rural consumers
are experiencing significant problems receiving long distance or
wireless calls on their landline telephones. The problem appears to be
attributable to the use of IP-based least-cost routing providers.
What does the Commission plan to do to ensure that such
interconnection and reliability problems do not become more prevalent
as our Nation's telephone networks transition to wireless and IP-based
services?
Answer. Sound engineering and testing should be the hallmarks of
the Nation's IP transition. That's precisely why the Commission needs
to commence an All-IP Pilot Program to ensure that we make the switch
in a thoughtful manner and learn about potential problems before they
arise.
Question 3. In light of the recent complaint filed in Federal court
by VoIP providers claiming that the Commission lacks authority under
the Communications Act to apply the no-blocking rule to VoIP calls, is
additional authority needed from Congress to address the rural call
completion problem?
Answer. As a general matter, the Commission has broad authority to
ensure that calls dialed from one telephone number to another go
through, so I do not think congressional action is necessary at this
time.
Question 4. More than half of U.S. broadband subscribers are
subject to some form of bandwidth cap or usage-based pricing. Experts
have pointed out that broadband caps are inefficient for addressing
network congestion and may, instead, have anticompetitive effects. What
does the Commission plan to do to ensure that caps do not undermine
access to affordable, high-speed broadband?
Answer. Although we should monitor market practices, the Commission
should be hesitant to intervene when it comes to broadband pricing
structures. Usage-based pricing, for example, may in fact increase the
affordability of high-speed broadband by allowing broadband providers
to decrease the price for low-use consumers such as senior citizens and
first-time Internet users. Moreover, it is a general tenet of our free-
market economy that the more you consume of a good or service, the more
you are required to pay.
______
Response to Written Questions Submitted by Hon. Claire McCaskill to
Hon. Ajit Pai
Question 1. Chairman Genachowski and I have both written to the
Federal Aviation Administration (FAA) encouraging the agency to revise
its rules to allow for the expanded use of electronic devices during
flight. The FAA has established an Aviation Rulemaking Committee (ARC)
to look at possible changes to the rules, and the FCC has a
representative on that committee, which will make recommendations to
the FAA Administrator this summer.
I am convinced, and I think most Americans agree, any safety
concerns that might have once existed to justify the current rules have
been addressed by advances in technology both on the airplane itself
and in consumer electronics. While I recognize the decision is not one
that rests with the FCC, as leaders on technology issues--and as one of
only three government agencies with a seat at the table, and the only
not under the Department of Transportation--I want to know if all of
the Commissioners share those views on this issue.
Answer. Yes, I generally share Chairman Genachowski's views on this
issue and hope that the FAA can take steps to enable greater use of
tablets, e-readers, and other portable devices during flights.
Question 1a. Given Chairman Genachowski's stated position on the
issue, can I trust that you will be directing the FCC's representative
on the ARC to convey the opinion of the Commission that the rules
should be changed and work to aggressively push the FAA to do so?
Answer. While I do not have the authority to unilaterally direct
the FCC's representative on the ARC, I hope that the Commission will
encourage the FAA to take action on this issue.
Question 2. Although the FCC's reforms to the Universal Service
Fund's (USF) Lifeline program through its February 2012 order were much
needed, and attempted to address duplicative Lifeline support,
ineligibility, deceptive marketing and other concerns raised in my
December 2011 letter to you on this topic, the reforms appear to have
had little effect in limiting the rapid growth of the program.
While I commend the Commission for its attempt to rein in the rapid
growth of the Lifeline program and address the problems you inherited
when the program was expanded to include wireless providers without any
additional safeguards to prevent waste, fraud and abuse, even with the
reform order in place the Lifeline program grew by 26 percent ($445
million) last year. What additional action is the Commission
considering to address waste, fraud and abuse in the Lifeline program?
Answer. Among other actions, the Commission is considering putting
the Lifeline program on a budget, just as we have done with the high-
cost program, the E-Rate program, and the rural healthcare program.
Question 2a. Specifically, would the Commission consider suspending
new enrollment in the program while the reforms continue to be
implemented?
Answer. If the Lifeline program were to grow substantially due to
new enrollees, suspending new enrollment is one option that could be
considered to constrain spending while further reforms are implemented.
Question 2b. Would the Commission consider capping the program?
Answer. Yes.
Question 3. We are quick in Washington to create new programs but
what we don't do often enough is reevaluate those programs to make sure
they're still needed. The FCC created the Lifeline program nearly 30
years ago to make sure local phone service was still affordable for
low-income Americans following the breakup of AT&T in 1984. Because
technology has changed and competition has grown, basic
telecommunications services are as affordable as ever. I am wondering
if the Commission has recently looked at whether the Lifeline program
is even still necessary, and if not if you would be willing to do so?
Answer. The Commission should always be willing to consider whether
any regulations and spending programs continue to be necessary and/or
in the public interest.
Question 4. In order to keep up with the demand for spectrum, many
in the private-sector believe efforts need to be taken to clear some of
the federally-occupied spectrum for commercial use, most significantly
spectrum currently occupied by the Department of Defense. Chairman
Genachowski and I have discussed this issue but I am interested in the
views of all of the commissioners.
With the exponential rise in demand for mobile broadband services,
we need to look at all potential resources for spectrum repurposing--
including Federal Government users. The GAO recently reported that the
total percentage of the most highly-valued spectrum exclusively or
predominantly used by the Federal Government is as high as 57 percent.
Given Federal agency budgets, many of these systems are not up-to-date
and thus operate inefficiently, and some Federal uses could be served
by commercial mobile providers. Are there specific instances in which
you believe Federal spectrum could be operated more efficiently?
Answer. Yes. To give one example, I believe that it would be
possible to clear Federal users from the 1755-1780 MHz band and
repurpose that band for commercial use.
Question 5. In addition to this Committee I also serve on the Armed
Services Committee. I have started to look at ways we can incentivize
Federal agencies--including the Department of Defense--to clear or
share spectrum, to free up more spectrum for commercial auction. Based
on your experience working with Federal spectrum users, what ideas can
you offer for creating such incentives?
Answer. Federal users currently do not have the same incentives as
commercial operators to use spectrum efficiently. Therefore, I agree
that we need to focus on providing Federal agencies with additional
incentives to become more efficient in their spectrum usage. Many
creative ideas have been offered to do just that. Some proposals, for
example, offer financial rewards to agencies that are able to reduce
their spectrum footprint. Others seek to penalize agencies that are not
using their spectrum resources efficiently. At this point, I am not
prepared to endorse any specific proposal but would encourage Congress
to take a close look at this issue.
Question 6. Last year Congress passed a Rubio-McCaskill resolution,
S.Con.Res. 50, stating that Internet infrastructure and content should
remain free from international regulation. Members of the U.S.
delegation to the ITU conference in Dubai have indicated that Congress
sending a clear message on the issue was helpful in their negotiations
and that our efforts on this issue should continue, especially since
those nations that want greater regulation of Internet infrastructure
and content will certainly continue in their efforts. What more can
Congress be doing to help promote a free and open Internet around the
world?
Answer. Making the Rubio-McCaskill resolution the official policy
of the United States would send a strong, bipartisan message to the
world that we support a free and open Internet.
Question 7. A handful of countries, such as China and Iran, want to
heavily censor the Internet content people can access inside their
borders, while many other nations are simply looking for ways to
generate revenue from Internet traffic that moves through their
country, much in the same way they have done with voice communications
for years. Are there policies the United States can and should be
promoting around the globe to help other nations develop their
telecommunications infrastructure, unleash the economic activity that
comes with it, and thus remove their desire to use global Internet
traffic as a revenue source?
Answer. The United States will not be a credible voice in favor of
Internet freedom abroad unless we adopt the right policies here at
home. Therefore, Congress and the Commission should lead by example and
refrain from initiatives to increase government regulation of the
Internet. One small but important step the Commission could take would
be to close the so-called ``Title II'' docket, which contains a
proposal to subject broadband Internet services to onerous common
carrier regulation.
Question 8. The upcoming incentive auctions have been pitched to
Congress as a market-based mechanism that would help put spectrum in
the hands of those most capable of unleashing its economic potential.
That was an appealing idea, and on that basis Congress authorized you
to conduct them. Now there is some concern that the Commission is
contemplating going beyond what will be freed up by the auctions and is
considering repurposing or reallocating many more megahertz in rural
areas just through repacking broadcasters and eliminating LPTV and
translator service. Is your intention to deal only with what is freed
up by auctions, or is your intention to reallocate as much spectrum
from broadcasters to broadband providers as possible?
Answer. In the record, there is a substantial dispute between
parties supporting a so-called ``variable band plan,'' meaning that
more spectrum would be reallocated for mobile broadband in some markets
than in other markets, and parties supporting a nationwide band plan,
where the same amount of spectrum would be reallocated for mobile
broadband across the Nation. Were the Commission to adopt a variable
band plan, it is quite likely that more spectrum would be repurposed in
less populated areas than in the Nation's most heavily populated
markets. At this time, I haven't reached any conclusions as to whether
the Commission should adopt a variable band plan or a nationwide band
plan. This question presents complicated legal, technical, and policy
issues, and I look forward to working with my colleagues to develop a
band plan that is consistent with our statutory authority and serves
the best interests of the American people.
Question 9. Has the Commission studied the impact of reclaiming
spectrum on LPTV and translator service, especially in more rural
states that rely heavily on them to reach areas where no other service
is available?
Answer. In my separate statement on the Notice of Proposed
Rulemaking in the incentive auction proceeding, I specifically
highlighted the importance of translators to rural America and asked
what the Commission could do, consistent with our legal authority, to
ensure that this vital communications link for rural America is not
broken. As we move forward in this proceeding, I believe that the FCC
must study this issue carefully.
______
Response to Written Questions Submitted by Hon. Richard Blumenthal to
Hon. Ajit Pai
Broadband Competition
Question 1. In 2010 the FCC stated in the National Broadband Plan
that, ``. . . there are reasons to be concerned about wireline
broadband competition in the United States. Whether sufficient
competition exists is unclear and, even if such competition presently
exists, it is surely fragile.''
The plan further stated that, ``To ensure that the right policies
are put in place so that the broadband ecosystem benefits from
meaningful competition as it evolves, it is important to have an
ongoing, data-driven evaluation of the state of competition,'' and that
``additional data are needed to more rigorously evaluate broadband
competition.''
The Plan specifically recommended the Commission undertake a number
of reforms to data collection including:
1. ``[C]ollect broadband availability data at the census block
level, by provider, technology and offered speed.''
2. ``[C]ollect data on advertised prices, prices actually paid by
subscribers, plans, bundles and promotions of fixed and mobile
broadband services that have material penetration among users,
as well as their evolution over time, by provider and by
geographic area.'' The Plan stated that in particular, it ``is
crucial that the FCC track and compare the evolution of pricing
in areas where two service providers offer very high peak
speeds with pricing in areas where only one provider can offer
very high peak speeds.''
3. ``[C]ollect information related to switching barriers, such as
early termination fees and contract length.''
The National Broadband Plan also recommended that the Commission
establish a general policy of making the data it collects available to
the public, including via the Internet in a broadband data depository.
These recommendations reflect the comments of the Department of
Justice, who told the Commission that it ``. . .should expand its
efforts to include an assessment of the nature and extent of
competition in each local broadband market.''
Nearly two years after the National Broadband Plan was released,
the Commission issued a Notice of Proposed Rulemaking (NPRM) that
encapsulated many of these recommendations. The Commission has yet to
act on this NPRM.
Chairman Genachowski, Commissioners McDowell, Clyburn, Rosenworcel
and Pai, do you agree with the National Broadband Plan's
recommendations on the need to collect these additional broadband data?
Do you think the Commission, policymakers and the public have the
appropriate data to determine if the Commission's competition policies
are, in the words of the Department of Justice, using the appropriate
``policy levers . . . to produce superior outcomes,'' and if not, what
additional data is needed?
Answer. I agree with the National Broadband Plan that good policy
starts with good data, including data about the preferences consumers
themselves reveal through their spending habits. For example, we
continue to collect data each year on wireline broadband deployment but
much less data on wireless alternatives, whether terrestrial or
satellite, even though consumers are increasingly substituting the
latter for the former. The Commission may need to reevaluate its data
collections accordingly.
Sports Blackouts
Question 2. Over one year ago, I wrote the FCC and requested the
agency allow public comment on a petition for rulemaking asking the
Commission to reexamine the Sports Blackout Rule. This rule is nearly
forty years old and, along with other Federal rules and league
policies, is one of many obstacles making it unreasonably difficult for
fans to watch their favorite teams play.
I thank the Commission for taking my letter seriously and opening a
Notice of Inquiry (NOI) to solicit comments from the public and other
stakeholders. However, that docket was opened in January of 2012 and
the Commission has yet to take any further action.
The response in the proceeding was overwhelming. The NOI garnered
thousands of comments from consumers impacted by local sports
blackouts, including elderly and disabled sports fans unable to attend
live games. The NFL's revised local blackout policy seems to have done
little in the last regular season to help the most heavily impacted
markets. Commenters have proposed several options, including preserving
the status quo, eliminating the Sports Blackout Rule altogether, or
adopting a sunset period requiring a public interest showing to renew
the rule.
Chairman Genachowski, Commissioners McDowell, Clyburn, Rosenworcel
and Pai, what else can the Commission do to help fans unable to watch
their favorite teams compete?
Answer. Since taking office, I have met with parties supporting and
opposing the Sports Blackout Rule. And as a sports fan myself, I
understand the passions that this issue generates. At this point, I
have not yet reached any firm conclusions as to whether the Sports
Blackout Rule should be eliminated, modified, or retained. Should the
Chairman circulate an item addressing the Sports Blackout Rule, I will
approach the issue with an open mind and give careful consideration to
all of the evidence that has been placed in the record.
______
Response to Written Questions Submitted by Hon. Dean Heller to
Hon. Ajit Pai
I appreciate the testimony and your candid answers during the
hearing. I would like to thank you for your service on the Federal
Communications Commission.
Question 1. The hearing touched on many themes that I believe the
Committee should look at including process reform, the looming
transition to IP and the Spectrum auction. However, an opportunity for
the Chairman and the Commissioners to share what they see ``over the
hill'' was not discussed at length. I would like to provide you with an
opportunity to share what you believe are some issues that may not have
been discussed at the hearing.
Answer. I believe that facilitating the deployment of wireless
infrastructure will be an important challenge for the Commission going
forward. While making additional spectrum available for mobile
broadband is critical, in order to use that spectrum, carriers will
have to deploy additional physical infrastructure, such as towers,
small cells, and distributed antenna systems. We therefore need to look
at how we can remove unnecessary regulatory barriers to the deployment
of wireless infrastructure, and I am pleased that the Commission is
currently studying that issue carefully.
Question 2. The spectrum auction is of the utmost importance. Is
the Commission going to set a target date of 2014?
Answer. The Notice of Proposed Rulemaking in the incentive auction
proceeding, issued in September 2012, stated that the Commission
anticipated holding the incentive auction in 2014. In my view, 2014
should continue to be our target date, and we should work to meet that
objective.
Question 2a. What are the challenges with hitting this date?
Answer. The most difficult issues on the horizon are the
configuration of the band plan, the design of the auction, the
mechanics of the repacking process, and coordination with Canada and
Mexico.
Question 3. The Commission's spectrum incentive auction process has
the potential for channel reassignment. Nevada has over 300 translators
and low power TV stations, any repacking will put a significant burden
on these stations. Is the FCC taking this into consideration? Can the
Commission preserve viewer access to local channels and still hit the
target of 2014 for the auction to take place?
Answer. In my separate statement on the Notice of Proposed
Rulemaking in the incentive auction proceeding, I specifically
highlighted the importance of translators to rural America and asked
what the Commission could do, consistent with our legal authority, to
ensure that this vital communications link for rural America is not
broken. As we move forward in this proceeding, I believe that the FCC
must give this issue careful consideration. At this point, I believe
that it is possible for us to address this issue and meet our 2014
target for holding the incentive auction.
Question 4. According to the National Broadband Plan wireless
backhaul is ``critical to the deployment of wireless broadband and
other wireless services,'' particularly ``when fiber is not proximate
to a cell site.'' I understand that the existing wireless backhaul
networks face a number of regulatory and technological constraints that
limit their potential capacity. These independently-powerable services
are also important to undergird FirstNet, the national first responder
network. How is the FCC working to speed the deployment of wireless
backhaul services in new frequency bands?
Answer. I agree with the National Broadband Plan's characterization
of the importance of wireless backhaul. As I mentioned in my statement
supporting an August 2012 order reforming the FCC's microwave backhaul
rules, ``Wireless backhaul in particular can be a vital network
component in areas where wireline infrastructure, such as fiber or
copper, is difficult or prohibitively expensive to deploy. Facilitating
greater use of wireless backhaul thus can enable infrastructure
investment and help address our pressing spectrum needs.'' Statement of
Commissioner Ajit Pai, Amendment of Part 101 of the Commission's Rules
to Facilitate the Use of Microwave or Wireless Backhaul and Other Uses
and to Provide Additional Flexibility to Broadcast Auxiliary Service
and Operational Fixed Microwave Licensees; Petition for Rulemaking
filed by Fixed Wireless Communications Coalition to Amend Part 101 of
the Commission's Rules to Authorize 60 and 80 MHz Channels in Certain
Bands for Broadband Communications, WT Docket No. 10-153, RM-11602 at 1
(Aug. 3, 2012), available at http://hraunfoss.fcc.gov/edocs_public/
attachmatch/FCC-12-87A6.pdf.
Since 2010, the Commission has been reviewing and revising its
rules to facilitate microwave wireless backhaul. Specifically, it has
made an additional 650 MHz of additional spectrum available for
wireless backhaul, mostly in rural areas. It has eliminated unnecessary
rules that have hindered deployment in the microwave bands. It also has
revised its antenna standards in certain bands in order to lower
deployment costs.
Another important step to speeding the deployment of wireless
backhaul services has been the establishment of build-out requirements
in the microwave bands to ensure that licensees construct networks in a
timely fashion. For the 24 GHz Band microwave service, Local Multipoint
Distribution Service (LMDS) in the 28 and 31 GHz bands, and the 39 GHz
Band microwave service, all licensees must demonstrate substantial
service at the end of their 10-year license term in order to obtain a
renewal. In 2008 and 2010, the Wireless Telecommunications Bureau
granted extensions of the build-out deadline until June 1, 2012 to
licensees in the 24 GHz, 39 GHz, and LMDS bands with the expectation
that the licensees would deploy networks and provide service within the
extended timeframe. As a result, these licensees had at least eleven-
and-a-half years to meet their build-out requirements.
Question 4a. What is the current state of wireless backhaul
deployment in the 24 and 39 GHz bands?
Answer. Most wireless backhaul deployment has occurred in the
microwave bands below 24 GHz and 39 GHz. However, IDT Spectrum, which
holds 742 licenses, and Spectrum Holding Technologies, which holds 199
licenses, have reported to the Commission that they have met the build-
out requirements for their licenses in the 39 GHz band.
Question 4b. Has any company tried to develop new technology that
is optimized for wireless backhaul in these new frequency bands?
Answer. The licensees in the 24 and 39 GHz bands confirm that
equipment is available for wireless backhaul in these bands.
Question 5. The FCC has moved to reclaim wireless backhaul spectrum
in the 24 and 39 GHz range from a number of wireless backhaul providers
despite the providers request for additional time to complete their
roll-out.
If the FCC ultimately reclaims spectrum in the 24 and 39 GHz range,
how long will it take, including the necessary legal proceedings, for a
new wireless backhaul provider to build-out a backhaul service with the
seized spectrum?
Answer. In general, once a licensee forfeits a license and it
reverts back to inventory, the FCC can move directly to re-auction that
spectrum. With respect to the 24 GHz and 39 GHz licensees at issue
here, however, a bankruptcy court injunction currently prohibits the
Commission from reassigning those licenses until the previous licensee
exhausts its appeal rights. In light of this fact as well as other
contingencies, I cannot state with specificity how long it would take a
new wireless backhaul provider to build out a backhaul service with the
seized spectrum.
Question 6. In at least one case on Appeal to the Full FCC
Commission, a significant wireless backhaul provider, from whom the FCC
seized spectrum, has proposed an aggressive build-out plan that will
have its wireless backhaul network up and running in 18 months. If the
FCC were to prioritize the rollout of wireless backhaul services, would
it be more expedient to grant an 18 month extension and allow a planned
expansion to move forward or can the FCC clear the spectrum and find
another company to build-out the necessary wireless backhaul in less
than 18 months?
Answer. FiberTower's application for review has been placed before
the full Commission for consideration. I am currently in the process of
reviewing the record that has been compiled in the proceeding and will
carefully consider all relevant facts as well as the applicable law in
reaching a decision in this matter.
Question 7. Will the FCC work to ensure that it takes all
appropriate actions, including reviewing prior staff-driven efforts
intended to strip existing wireless backhaul providers of their
spectrum, to speed the build-out of needed wireless backhaul services?
Answer: I will give thorough consideration to FiberTower's pending
application for review. I also will work to ensure that the Commission
continues to take all appropriate actions to promote the availability
of wireless backhaul.